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    Company Profile

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    Nirma - An Overview

    Nirma is one of the few names - which is instantly recognized as a true

    Indian brand, which took on mighty multinationals and rewrote the Marketing

    rules to win the heart of the consumer.

    Nirma, the proverbial Rags to Riches saga of Dr. Karsanbhai Patel, is a

    classic example of the success of Indian entrepreneurship in the face of stiff

    competition. Starting as a one-man operation in 1969, today, it has about 14,

    000 employee-base and annual turnover is above Rs. 25, 00 Crores.

    India is a one of the largest consumer economy, with burgeoning middle

    class pie. In such a widespread, diverse Marketplace, Nirma

    aptly concentrated all its efforts towards creating and building a strong

    consumer preference towards its value-for-money products.

    It was way back in 60s and 70s, where the domestic detergent Market

    had only premium segment, with very few players and was dominated by

    MNCs.

    It was 1969, when Karsanbhai Patel started door-to-door selling his

    (Nirma) detergent powder, priced at an astonishing Rs. 3 per kg, when the

    available cheapest brand in the Market was Rs. 13/- per kg. It was really an

    innovative, quality product with indigenous process, packaging and low-

    profiled Marketing, which changed the habit of Indian housewives for

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    washing their clothes.

    In a short span, Nirma created an entirely new Market segment in

    domestic Marketplace, which is, eventually the largest consumer pocket and

    quickly emerged as dominating Market player a position it has never since

    relinquished. Rewriting the Marketing rules, Nirma became a one of the

    widely discussed success stories between the four-walls of the B-school

    classrooms across the world.

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    BOARD OF DIRECTORS

    Dr. K. K. Patel, Chairman

    Shri Rakesh K. Patel, Vice Chairman

    Shri Shrenikbhai K. Lalbhai

    Shri Pankaj R. Patel

    Shri Rajendra D. Shah

    Shri A. P. Sarwan

    Shri Chinubhai R. Shah

    Shri Kaushikbhai N. Patel Shri Kalpesh A. Patel, Executive Director

    Shri Hiren K. Patel, Managing Director

    AUDITORS COMPANY SECRETARY

    Hemanshu Shah & Co., Shri Paresh Sheth

    Chartered Accountants,

    Ahmedabad

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    REGISTERED OFFICE

    Nirma House,

    Ashram Road,

    Ahmedabad 380 009

    SUBSIDIARY COMPANY

    Nirma ConsumerCare Limited,

    Nirma House,

    Ashram Road,

    Ahmedabad 380 009

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    Corporate Social Responsibility

    Nirma's vision visualises itself as a vibrant, pro-active and widely

    admired, ethical corporate citizen. Nirma believes that exemplaryachievements on the Business points are not enough in the making of a good

    corporate citizen. In fulfilment of this role as a responsible part of the society

    and environment in which one operates, Nirma has undertaken a host of

    activities in the educational and social development areas.

    Realising the significant role of education - especially technical andmanagerial in socio-economic development of the nation, Nirma played a vital

    role by establishing the Nirma Education & Research Foundation (NERF)

    in 1994.Recently, this Foundation has been awarded University status. This

    status gives way to shape up and expand into a body providing education in

    other courses like medicine, nursing, biotechnology, etc.

    Along with the existing courses under a single roof of Nirma University.

    Today, this state-of-the art academic infrastructure runs various institution

    bodies such as Institute of Technology, Institute of Management, Institute

    of Pharmaceutical Sciences and Institute of Deploma Engineering. These

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    all institutions are located in a disciplined, serene and pleasant environment.

    The campus blends beautifully with the green landscaping, aesthetic elegance

    of arches and the vibrant pursuit of knowledge by the young aspirants. The

    environment gives full scope for group activities, which are plenty, as also to

    individual pursuits for development on preferred tracks.

    Awards

    The man behind the success of Nirma phenomenon Dr. Karsanbhai Patel

    is a recipient of various awards and accolades. He has been bestowed with

    various awards like

    Udyog Ratna by Federation of Association of Small-Scale Industries of

    Gujarat, New Delhi.

    Outstanding Industrialist of Eighties by Gujarat Chamber of

    Commerce and Industry, Ahmedabad (in 1990).

    Gujarat Businessman Award in 1998 by Gujarat Chamber of

    Commerce and Industry, Ahmedabad.

    Excellence in Corporate Governance Award by Rotary International

    District 2000.

    A&M Hall of Fame

    Shri Karsanbhai has been awarded an Honorary Doctorate by Florida

    Atlantic University, Florida, USA in the year 2001 in recognition of his

    exceptional accomplishments as a philanthropist and Businessman.

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    Dividends

    2005-2006

    During the year for the Company announced dividend at 6 % on

    Preference shares i.e. Rs.6/- per share on 2,79,285 Redeemable Non-

    Cumulative Non-Convertible Preference shares of Rs.100/- each absorbing

    Rs.0.19 crore including tax on dividend.

    ForEquity shares the Company announced dividend at 75 % i.e. Rs.7.50/-per share on the 7,93,84,684 equity shares of Rs.10/- each absorbing Rs.67.89

    Crores including tax on dividend.

    During the year under review, your Company achieved Gross Sales of

    Rs.2244.11 crore against Rs.2149.21 crore for the previous year, registering

    growth of about 4.46 %.

    2006-2007

    In this year Company recommend the dividend on Preference shares at 6

    % i.e. Rs.6/- per share on 279285 Redeemable Non Cumulative Non

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    Convertible Preference shares of Rs.100/- each absorbing Rs.0.19 Crores

    including tax on dividend. The Board has not recommended any further

    dividend on equity shares for the year ended 31st March, 2007 keeping in

    view the Companys need to reserve the internal accruals, to finance the

    future objectives and considered the interim dividend paid, as final dividend

    on equity shares for the financial year 2006-07.

    The Company paid interim dividend at 80 % on subdivided Equity shares

    of Rs.5/- each during the year i.e. Rs.4/- per equity share.

    2007-2008

    On Preference shares the Company announced dividend at 6 % i.e. Rs.6/-

    per share on 279285 Redeemable Non cumulative Non convertible Preference

    shares of Rs.100/- each absorbing Rs.0.20 Crores including tax

    On Equity shares the Company announced dividend at 80 % i.e. Rs.4/- pershare of Rs.5/- each absorbing Rs.74.48 Crores including tax, for the financial

    year 2007-08.

    The Turnover during the year on standalone basis has marginally increased

    from Rs.2541.05 Crores to Rs.2650.78 Crores showing increase by Rs.109.73

    Crores.

    On consolidated basis, the turnover is Rs.3003.03 Crores during the year.

    The operating profit before interest, depreciation and tax is Rs.390.26 Crores

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    during the year compared to Rs.379.38 Crores of the previous year. The net

    profit has gone up to Rs.229.73 Crores during the year under review.

    Cash flow Statements

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    Cash flow statement for the year ended 31st

    March, 2008

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    Cash flow statement for the year ended 31st March, 2007

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    Cash flow statement for the year ended 31st March, 2006

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    Notes:

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    Profit Before Tax of the Company for the Financial year 2007-08 is

    226.58 Crores & has Flow of Cash 386.96 Crores, which is Operating

    Profit before Working Capital changes. It is increase as compare to Net

    Profit Before Tax. Because of the Company provides depreciation or writes

    off the Debt.

    The Company has Net Cash Flow from Operating Activity of Rs. 219.93

    Crores. Here the Trade Receivables are increasing and because ofPayment

    of Interest & Direct Taxes, The Company has Net Cash Flow from

    Operating Activities is decreasing.

    The Company purchases Fixed Assets worth Rs. 311.44 Crores for the

    Financial year 2007-08 and also purchases Investments of Rs.40.76 Crores.

    The Company receives Interest of Rs.15.39 Crores.

    Because of all the above Transactions, the Company has decreasing Net

    Cash used in Investing Activities of Rs.113.55 Crores.

    The Company has Borrowings of Rs.382.88 Crores and it also Repays the

    Borrowings of Rs.2.61 Crores. Due to the Payment and Borrowings, the

    Company has Net Cash used in Financial Activities is of Rs.123.42 Crores.

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    Comparative Profit & Loss A/c

    Particulars

    Schedule

    2005-06 2006-07 2007-08

    Income:

    Sales

    Less:Excise Duty

    2244.11

    325.31

    2541.05

    295.01

    2650.78

    318.57

    Net Sales

    Other Income (13)

    Increase In Stock (14)

    1918.80

    24.01

    6.98

    2246.04

    26.23

    67.52

    2332.21

    19.65

    25.96

    (1) Total Income 1949.80 2339.79 2371.82

    Expenditure:

    Consumption of Raw Material (15)

    Purchase Of Finished Goods

    Payment to & Pro. for Employee (16)

    Mfg, Admin & Sales Exps. (17)

    Interest & Charges (18)

    906.18

    --

    43.8

    506.13

    (6.73)

    1091.62

    0.07

    65.10

    803.62

    (6.52)

    1084.06

    1.15

    81.65

    814.70

    7.92

    (2) Total Expenditure 1449.36 1953.89 1989.42

    Profit Before Dep. & Tax (1-2)

    Less:Pro. For Depreciation

    Add:Pro. For Expenditure

    500.44

    158.42

    --

    385.90

    207.51

    --

    382.34

    226.65

    70.89

    Profit Before Tax

    Less:Pro. For Tax - Current Tax

    - Fringe Benefit Tax

    - Deferred Tax

    344.02

    106.5

    0.44

    (4.30)

    178.39

    20

    0.50

    (48.77)

    226.58

    26

    0.40

    (29.55)

    Net Profit 241.30.44 109.12 229.73

    From the above Statement, we can conclude that

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    1. The Sales of the company is continuously increasing, which is Rs.

    2244.11 Crores in the Financial Year 2005-06 and Rs.2650.78 Crores in

    the Financial Year 2007-08 rise by Rs.406.67 Crores.2. There is no provision for the Expenditure in the Previous Years, but

    company Introduce a Provision for Expenditure in the Year 2007-08

    worth Rs. 70.89 Crores.

    3. As compare to the Previous Year, The Net Profit of the Company also

    increased by Rs. 120.60 Crores.

    Comparative Balance Sheet

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    Particulars

    Schedules2006 2007 2008

    SOURCES OF FUNDS

    Shareholders FundsShare capital (1)

    Reserves and surplus (2)82.16

    1965.81

    82.36

    2347.42

    82.36

    2502.62

    2047.99 2429.78 2584.98

    Loan Funds

    Secured loans (3)

    Unsecured loans (4)

    344.30

    3.79

    239.15

    85.70

    182.54

    261.40

    348.09 324.85 443.94

    2396.08 2754.63 3028.92APPLICATION OF FUNDS

    Fixed Assets (5)

    Gross block

    Less : Depreciation

    2733.48

    983.35

    3649.80

    1404.99

    3738.92

    1826.96

    Net block

    Add : Capital work-in-progress

    1750.13

    40.78

    2044.81

    113.23

    1911.96

    259.61

    1790.91 21588.04 2171.57

    Investments (6) 7.49 6.70 45.85

    Current Assets, Loans & Advances

    Inventories (7)

    Sundry debtors (8)

    Cash and bank balances (9)

    Loans and advances (10)

    308.14

    221.52

    271.17

    319.98

    486.01

    233.39

    62.77

    550.50

    635.16

    216.37

    72.65

    500.86

    1120.81 1332.67 1425.04

    Less : Current Liabilities and Provisions (11)

    Current liabilities

    Provisions91.77

    77.18

    214.60

    125.23

    195.46

    129.68

    168.95 339.83 325.14

    Net Current Assets 951.86 992.84 1099.90

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    Deferred tax liabilities (12) 354.18 402.95 288.40

    597.68 589.89 811.50

    2396.08 2754.63 3028.92

    From the above Balance sheet of the Company for three Years, we can

    conclude below given matters:

    1. The Reserves & Surpluses of the company are continuously increasing

    from Rs. 1965.80 Crores in the Year 2005-06 to Rs. 2502.62 in 2007-08.

    2. In addition, the Investments are going on rising from only Rs.7.49

    Crores on The Year 2005-06 to Rs.45.85 Crores in the Year 2007-08

    Difference of Rs.38.36.

    3. Simultaneously the Current Assets of the Company are increase by Rs.

    148.04 Crores as Compare to the Year 2005-06.

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    Ratio Analysis

    Ratio:

    A Ratio is only comparison of numerator with denominator. The term

    Ratio refers to the numerical or quantitative relationship between two figures

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    and obtained by the letter Ratios are designed to show, How one number is

    related to another?

    Advantages of Ratio Analysis

    The use of Ratio was started by banks for ascertaining the liquidity and

    profitability of companies Business for the purpose of advancing loans to

    them profitably. The Ratio analysis provides useful data to the Management,

    which would keep them in taking important policy decisions. Diverse group of

    people make use of Ratio to determining a particular aspect of the financialposition of the Company in which they are interested.

    Profitability:-

    Useful information about the trend of profitability is available from

    profitability Ratios. The Gross Profit Ratio, the Net Profit Ratio & Ratio of

    Return on Investment, give good ideas of the Profitability of Business. On the

    basis of these Ratios, investors get ideas about the overall efficiency of

    Business. The Management gets an idea about the efficiency of managers &

    banks as well as other creditors draw useful conclusion about repaying

    capacity of borrowers.

    Liquidity:-

    In fact, the use of Ratios made initially Business. The current Ratio,

    liquid Ratio & acid test Ratio will be able to meet its current liability as &

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    when the nature bank & others leaders will be able to conclude from these

    Ratios whether the firm will be able to pay regularly the interest & loan

    interest.

    Efficiency:-

    The turnover Ratios are excellent guides to measures the efficiency of

    managers, i.e. the stock turnover will indicate how efficiently the sale is being

    made the debtors turnover will indicate the efficiency of collection

    department and assets turnover shows the efficiency with which the assets are

    used in Business. All such Ratios related to sales present a good picture on the

    success or otherwise of the Business.

    Inter-Firm Comparison:-

    The absolute Ratios of firm are not much use, unless they are compared

    with similar Ratio of the other firm belonging to same industry. This is inter-

    firm comparisons, which shows the strength and weakness of the firm as

    compare to other firm and will indicate corrective measures.

    Use for budgetary Control:-

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    Regular budgetary reports are prepaid in a Business where the system of

    budgetary control is in use. If various Ratios are presented in these reports it

    will give a fairly good idea about various aspects of financial position.

    Useful for Decision Making:-

    Ratios guide the Management in making some of the important decision.

    Suppose, the liquidity Ratio shows an unsatisfactory position, the

    Management may decide to get addition liquid funds. Even for capital

    expenditure decision, the Ratio of return on investment will guide the

    Management. The efficiency of various departments can be judged on the

    Business of their profitability Ratio and efficiency of each department can

    thus be determined.

    Disadvantages of Ratio Analysis

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    Single Years Ratio has Limited Liquidity:-

    The utility of Ratios computed from the financial statement of one year

    only is obviously limited. They must be compared with the past results of the

    Company as above with the result of other Business firms in the same

    industry.

    Other factors must be Considered:-

    While computed Ratios of different firms, it must be remembered that

    different accountancy plans & policies. For example, some may use a straight-

    line method of depreciation, while others may make use of diminishing

    balance method. Hence, great care has to be exercised before any conclusions

    are drawn from such comparison.

    Limiting Utility of Historical Ratios:-

    While comparing Ratios of past several years it should be remember that

    charges in price level might render such comparison useless. An assets

    purchase some ten years before may be sales are expressed in current Market

    value.

    Importance of Ratio

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    The inter relationship that exists among the different items appeared in

    the financial statements are related by A/C Ratio. Ratio analysis of affirm is

    financial statement of it interest to a number of parties mainly, share holder,creditors, financial executives etc. shareholders are interested with earning

    capacity of the firm.

    Liquidity Position:-

    With the help of Ratio analysis conclusion can be drawn regarding the

    liquidity position of affirm. The liquidity position of a firm would be

    satisfactory if it is able to meet its current obligations when they become due.

    A firm can be say to have the ability to meet its short-term liabilities if it has

    sufficient liquid fund to pay the interest on its short maturing debt usually

    within a year as to repay the principles.

    Long Term Solvency:-

    Ratio analysis is equally useful for assessing the long-term finance

    liability of a firm. This aspect of the financial position of a bollowel is of

    concern to long-term creditors Security analysis of the present & position

    owners of Business. The long term, solvency is measured by the leverage,

    capital & profitability Ratio that focus on earning power & operating

    efficiency Ratio analysis the strengths and weakness of firm in this aspect.

    Operating Efficiency:-

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    Yet another dimension of the usefulness if the Ratio analysis, relevant

    from the viewpoint of Management is that it throws light on the degree of

    efficiency in the Management & utilization of its assets. The various activitiesRatios measure this kind of operational efficiency.

    Overall Profitability:-

    On like the outside parties which are interested in one aspect of the

    financial position of a firm, the Management is constantly concerned about the

    ability of the firm to meet its short term as well as long term obligation to its

    creditors to ensure a reasonable return to its owners and secured optimum

    utilization of the assets of the firm.

    Inter- Firm Comparison:-

    Ratio analysis not only throws light on the financial position of a firm

    but also serves as a stepping-stone to remedial measures. This is made

    possible due to inter firm comparison & comparison with industry averages. A

    single figure of a particular Ratio is meaningless unless it is related to some

    standards, more Ratios as a firm with the industry average. It should be

    reasonably accepted that the performance of the firm should be broad

    uniformity with that of the industry to which it belongs.

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    Spread Sheet

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    PARTICULARS AS ON 31-03-08 AS ON 31-03-07 AS ON 31-03-06

    Equity Share Capital (Paid Up) 79.57 79.39 79.39

    Reserves & Surpluses 2502.62 2347.42 1965.81Preference Share Capital 5.00 5.00 10.00

    Secured Loans

    Long Term Loans -- - 295.82

    Short Term Loans 182.54 239.15 48.48

    Fixed Assets(Excluding Depreciation) 1911.96 2044.81 1750.13

    + Capital ( Work In Progress) 259.61 113.32 40.78

    Total Fixed Assets 2171.57 2158.04 1790.91

    Current Assets

    Inventory 635.16 486.01 308.14Sundry Creditors 216.37 233.39 221.52

    Loans & Advances 500.86 550.50 319.98

    Cash & Bank 72.65 62.77 277.14

    Total Current assets 1425.04 1332.67 1120.81

    Current liabilities & Provisions 325.14 339.83 168.95

    Income

    Sales 2650.78 2541.05 2244.11

    - Excise Duty 318.57 295.0 325.31

    Net sales 2332.21 2244.28 1918.80

    Other Income 13.65 26.23 24.02

    Increase In stock 25.96 67.52 6.98

    Expenditure

    Sales 2650.78 2541.05 2244.11

    - Gross Profit 876.34 766.6 710.13

    Cost Of Goods Sold 1774.44 1772.69 1533.98

    Cost of Material Consumed 1084.06 1091.62 906.16

    + Salary, Wages & Bonus 7211 57.6 3.06

    + Current Manufacturing Exps. 814.70 803.62 506.13

    Profit Before Tax(PBT) 226.58 178.39 344.02Provision For Tax 55.95 69.27 111.24

    Profit After Tax (PAT) Or Net Profit 229.73 109.12 241.38

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    Calculation & Interpretation of Ratio

    1. Gross Profit Ratio:-

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    It is Ratio expresses the relationship between gross profits earned to net

    sale. It is also known as Gross Margin. It is basic measurement of

    profitability of Business.

    Gross Profit Ratio= Gross Profit * 100

    Sales

    37.01%

    34.16%

    37.57%

    32.00%

    33.00%

    34.00%

    35.00%36.00%

    37.00%

    38.00%

    Ratio

    2005-06 2006-07 2007-08

    Year

    Gross Profit Ratio

    Interpretation:-

    Particular 2005-06 2006-07 2007-08

    GROSS PROFIT 710.13 766.6 876.34

    NET SALES 1918.8 2244.28 2332.28

    GROSS PROFIT RATIO 37.01% 34.16% 37.57%

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    We can observe from the above Ratio that the profitability of the

    industry is fluctuating. In the year 2005-06 the Ratio is 37.01%. In the year

    2006-07 it decreased by 34.16% and in the year 2007-08 it increased by37.57%.

    2. Stock Turnover Ratio:-

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    This Ratio shows the number of times the average stock is turn over during

    the year. This Ratio signifies the efficiency of sales. It is computed by

    dividing the cost of goods sold by the average stock of the year.Stock Turnover Ratio= Cost of Goods Sold

    Average Stock

    Particular 2005-06 2006-07 2007-08Sales 2244.11 2539.29 2650.78

    Gross Profit 710.13 766.6 876.34

    Cost of Goods Sold 1533.98 1772.69 1774.44

    OP. Stock 73.86 80.94 148.46

    CL. Stock 80.94 148.46 174.42Average Stock 77.45 114.7 161.44

    STOCK TURN OVER RATIO 19.81 18.30 10.99

    19.8118.3

    10.99

    0

    5

    10

    15

    20

    Ratio

    2005-06 2006-07 2007-08

    Year

    Stock Turnover Ratio

    Interpretation:- We can see that in the year 2005-06 No. of times the average

    stock is turned over to 19.81 times, in the year 2006-07 it decreased by 18.30

    times and in the year 2007-08 it increased by 10.99 tomes.

    3. Current Ratio:-

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    It is on index on profitability of Business and it is obtained by comparing

    net profit with capital employed. The term capital employed includes share

    capital.Return on Capital Employed = Net Profit before Interest & Tax * 100

    Capital Employed

    Particular 2005-06 2006- 07 2007- 08

    Profit before Tax 344.02 178.39 226.58

    Interest 6.73 6.52 7.92

    Net Profit before Interest & Tax 350.75 184.91 234.5Share Capital 82.18 82.36 82.36

    Reserve& Surplus 1965.81 2347.42 2502.62

    Secured loan 344.30 239.15 182.54Capital Employed 2392.29 2668.93 2767.52

    RETURN ON CAPITAL EMPLOYED RATIO 14.66% 6.93% 8.47%

    14.66%

    6.93% 8.47%

    0.00%

    5.00%

    10.00%

    15.00%

    Ratio

    2005-06 2006-07 2007-08

    Year

    Return on Capital Em ployed

    Interpretation:-

    We can observe from above chart that return on capital employed is

    14.66% in the year 2005-06 and it went up to 6.93% in the year 2006-07.

    Again, it reaches at the level of 8.47% in the year 2007-08.

    5. Return on Share Holders Fund:-

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    In order to judge the efficiency with which the proprietors funds are

    employed in Business. This Ratio is ascertained proprietors equity funds

    included Share Capital & Reserves. This Ratio shows what amount ofdividend is likely to be received on shares.

    Return on Share Holders Fund = Net Profit before Interest & Tax * 100

    Share Holders fund

    Particular 2005-06 2006- 07 2007- 08

    Profit After Tax 241.38 109.12 229.73(-)Interest 6.73 6.52 7.92

    Net Profit After Interest & Tax 234.69 102.6Share Capital 82.18 82.36 82.36

    (+)Reserve& Surplus 1965.81 2347.42 2502.62

    (-) Differed Tax Assets Share Holder's Fund 2.66 49.46 126.97

    Share Holders Fund 2045.33 2380.32 2458.01

    RETURN ON SHARE HOLDER'S FUND RATIO 11.47% 4.31% 9.02%

    11.47%

    4.31%

    9.02%

    0.00%

    2.00%

    4.00%

    6.00%

    8.00%

    10.00%

    12.00%

    Ratio

    2005-06 2006-07 2007-08

    Year

    Return on Share Holders Fun

    Interpretation:-

    36

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    We can observe from above chart that Return on Share Holders fund is

    11.47% in the year 2005-06 and it went up to 4.31% in the year 2006-07.

    Again it reaches at the level of 9.02% in the year 2007-08.

    6. Return on Equity Share Capital:-

    37

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    Return on Equity Share Capital Ratio shows the relationship between net

    profit and shareholders Funds.

    Return on Equity Share Capital = Net Profit Preference Dividend * 100Equity Share Capital

    Particular 2005-06 2006- 07 2007- 08

    Profit After Tax 241.38 109.12 229.73

    (-) Interest 6.73 6.52 7.92

    Net Profit After Interest & Tax 234.69 102.6 221.81

    Preference Share Dividend 0.17 0.17 0.17

    NPAIT - Preference Dividend 234.48 102.43 221.64

    ()Equity Share Capital 79.40 79.40 79.59

    RETURN ON EQUITY SHARE CAPITAL RATIO 2.95% 1.29% 2.78%

    2.95%

    1.29%

    2.78%

    0.00%

    0.50%

    1.00%

    1.50%

    2.00%

    2.50%

    3.00%

    Ratio

    2005-06 2006-07 2007-08

    Year

    Return on Equity Share Capital

    Interpretation:-

    Return on Equity Share Capital Ratio indicates fluctuation in this the

    Ratio was 2.95% in 2005-06 then it decreased to 1.29% in 2006-07 and it

    further increased to 2.78% in 2007-08.

    7. Debtor Ratio:-

    38

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    This Ratio shows the number of days taken to collect the dues of credit

    sales. It shows the efficiency and policy for collection of debt.

    Debtor Ratio= Debtors + Bills Receivables *365

    Credit Sales

    Particular 2005-06 2006- 07 2007- 08

    Debtors 221.52 233.39 216.37

    Bills Receivable 0 0 0

    Total 221.52 233.39 216.37

    Credit Sales 1918.8 2244.38 2332.21

    DEBTOR'S RATIO 42days 38days 34days

    4238 34

    0

    10

    20

    30

    40

    50

    Ratio

    2005-06 2006-07 2007-08

    Year

    Debtors Ratio (In Days)

    Interpretation:-

    Debtors Ratio show average collection period of the industry. In 2005-

    06 the Ratio was 42 days which decreased to 38 days in 2006-07 and further

    more decreased to 34 days in 2007-08 which showing good efficiency.

    8. Debtors Turnover Ratio:-

    39

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    The debtors turnover Ratio suggests the number of times the amount credit

    sale collected during the year.

    Debtors Turnover Ratio = Credit Sales

    Average Debtors

    Particular 2005-06 2006- 07 2007- 08

    Average Debtors 221.52 233.39 216.37

    Credit Sales 1918.8 2244.38 2332.21

    DEBTOR'S TURNOVER RATIO 9 times 10 times 11 times

    9 Times 10 Times 11 Times

    0

    2

    4

    6

    8

    10

    12

    Ratio

    2005-06 2006-07 2007-08

    Year

    Debtor's Turnover Ratio

    Interpretation:

    Debtors turnover Ratio was 9 times in 2005-06. In 2006-07, it was

    increased to 10 times and in 2007-08, it increases to 11 times.

    9. Fixed Assets Ratio:-

    40

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    The Ratio shows the relationship between fixed assets and turnover means

    sales. Fixed assets compute the Ratio dividing the amount of sale.

    Fixed Assets Ratio = Total Sales

    Fixed Assets

    Particular 2005-06 2006- 07 2007- 08

    Sales 1918.8 2244.38 2332.21

    Fixed Assets 1750.13 2044.81 1911.96

    FIXED ASSETS RATIO 1.1 1.1 1.22

    1.1 1.1

    1.22

    1

    1.05

    1.1

    1.15

    1.2

    1.25

    Ratio

    2005-06 2006-07 2007-08

    Year

    Fixed Assets Ratio

    Interpretation:

    This Ratio compared fixed capital with fixed assets. How much times

    fixed assets is more than capital. Here it is constantly increase but it is

    balanced. Therefore, it is good for Company.

    10. Total Assets Turnover Ratio:-

    41

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    A variant of current Ratio or quick Ratio which is design to show the

    amount at cash available, to meet immediate payments. Liquid assets obtain

    by liquid liability.Liquid Ratio = Liquid Assets

    Liquid Liability

    Particular 2005-06 2006-07 2007-08

    Sundry Debtors 221.52 233.39 216.37

    Cash & Bank 271.17 62.77 72.65

    Loans & Advances 319.98 550.5 500.86

    TOTAL LIQUID ASSETS 812.67 846.66 789.88

    Current Liabilities 91.77 214.6 195.46

    Provisions 71.18 125.23 129.68

    TOTAL LQUID LIABILITY 168.95 339.83 325.14

    LIQUIDTY RATIO 4.81:1 2.49:1 2.43:1

    4.81:1

    2.49:1 2.43:1

    0

    1

    2

    3

    4

    5

    Ratio

    2005-06 2006-07 2007-08

    Year

    Liquidity Ratio

    Interpretation: Standard liquid Ratio is 1: 1. Liquid Ratio shows the

    amount of cash available to meet immediate payment. If liquid assets are

    equal to or more than liquid liabilities, it is considered as satisfactory. Here, in

    2005-06, Company has more liquid assets compared with liabilities but its

    constant decreased in last two years.

    12. Proprietary Ratio:-

    43

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    The Ratio shows the proportion of proprietors funds to the total assets

    employed in the Business.

    Proprietary Ratio = Proprietors Fund *100Total Assets

    Particular 2005-06 2006-07 2007-08

    Proprietor's Fund 2047.99 2429.78 2584.98

    Fixed Assets 1750.13 2044.81 1911.96

    Current Assets 1120.81 1332.67 1425.04

    Total Assets 2870.98 3377.48 3337

    PROPRIETORY RATIO 71.33% 71.94% 77.46%

    71.33% 71.94%

    77.46%

    68.00%

    70.00%

    72.00%

    74.00%

    76.00%

    78.00%

    Ratio

    2005-06 2006-07 2007-08

    Year

    Proprietory Ratio

    Interpretation:

    Higher the Ratio better will be the financial position of the Company.

    The Ratio 40% to 60% is considering balance Ratio. Company has got good

    proprietor Ratio in last three years. Therefore, Companys financial position is

    very good.

    13. Debt Equity Ratio:-

    44

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    This Ratio shows the proportion of long-term external equities and internal

    equities. In this proportion of funds provided by long-term creditors and that

    provided by shareholders.Debt Equity Ratio = Long Term Liability *100

    Share Holders Fund

    Particular 2005-06 2006-07 2007-08

    Long-term Liability 324.85 324.85 443.94

    Share Holder's Fund 2047.99 2429.78 2584.98

    DEBT EQUITY RATIO 15.86% 13.37% 17.17%

    15.86% 13.37%17.17%

    0.00%

    5.00%

    10.00%

    15.00%

    20.00%

    Ratio

    2005-06 2006-07 2007-08

    Year

    Debt Equity Ratio

    Interpretation:

    Higher the Ratio, it is good for Company. The last three years Ratio

    shows that in the year 2006-07 the Ratio is high. Therefore, it is good for

    Companys growth.

    14. Operating Ratio:-

    45

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    It is the Ratio shows relationship between cost of goods sold and operating

    expenses to net sales. It shows the efficiency of the Management, the higher

    the Ratio the less will be the margin available to the proprietors.

    Operating Ratio = Cost of Goods Sold + Operating Expenses *100

    Net Profit

    Particular 2005-06 2006-07 2007-08Sales 2244.11 2539.29 2332.21

    Gross Profit 710.13 766.66 876.27

    Cost of Goods Sold 1533.98 1772.63 1455.94

    Payment to Provision for Employees. 43.8 0.07 1.15Interest & Charges 6.73 6.52 7.92

    Consumption Of Stores and Spars 45.74 47.9 51.04

    Power And Fuel Expenses 225.86 256.27 278.53

    Processing Charges 23.93 14.83 16.35

    Total Expenses 346.06 325.59 354.99

    Net Sales 1918.8 2244.28 2332.21

    OPERATING RATIO 0.98 0.9349 0.78

    0.98 0.930.78

    0

    0.2

    0.4

    0.6

    0.8

    1

    Ratio

    2005-06 2006-07 2007-08

    Yaer

    Operating Ratio

    Interpretation: In the year 2005-06 the Ratio was 0.98% and it was decreased

    by 0.93% in the year 2006-07, again it is decreased to 0.78% in 2007-08.

    15. Net Profit Ratio:-

    46

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    This Ratio valuable for the purpose of ascertaining overall profitability of

    Business and shows the efficiency. It is the reserve of the operating Ratio.

    Net Profit Ratio =Net Profit after Interest & Tax *100Net Sales

    Particular 2005-06 2006-07 2007-08Profit After Tax 241.38 109.12 229.73

    (-) Interest 6.73 6.52 7.92

    Net Profit After Interest & Tax 234.69 102.6 221.81

    Net Sales 1918.8 2244.28 2332.28

    NET PROFIT 12.23% 4.28% 9.51%

    12.23%

    4.28%

    9.51%

    0.00%

    2.00%

    4.00%

    6.00%

    8.00%

    10.00%

    12.00%

    14.00%

    Ratio

    2005-06 2006-07 2007-08Year

    Net Profit

    Interpretation:

    This Ratio Indicates Proportion of sales revenue left to the Company

    after all operating expenses are meeting. Higher the Ratio better will be theprofitability. In the year 2005-06, the Ratio is highest, but in 2006-07, it has

    decreased & in 2007-08, it has increased.