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Overview of Stock market and Fundamental Analysis on FMCG Sector

A summer training report submitted for the Partial fulfillment of the Master of Business Economics [M.B.E.] Semester II
Submitted by

[ Vaywala Divyesh M.]

Roll No [46] Submitted to

DEPARTMENT OF ECONOMICS
VEER NARMAD SOUTH GUJARAT UNIVERSITY SURAT 395 007

[June-2010]

DECLARATION

I declare that summer training report entitled Overview of Stock

market and Fundamental Analysis on FMCG Sector submitted for

the partial fulfillment of the Semester II in Master of Business Economics [M.B.E.] is my original work and carried it out at Department of Economics, Veer Narmad South Gujarat University- Surat.

The project or any part of it has not been previously submitted for any degree.

Name of the Student along with signature

Vaywala Divyesh M. Date

Index
Particulars Page No.

Chapter 1: Introducation of Training Objective of study Benefit of Study 01 02

Chapter 2: Industry Profile Stock Market Overview History of Indian Stock Market Trading Pattern of the Indian Stock Market 03 04 13

Chapter 3: Company Profile History of Company Milestone of company Jainam Organisation Hirearchy About department 17 21 22 23

Chapter 4: Theoretical Framework

35

Chapter 5: Research Methodology

39

Chapter 6: Data Analysis Ratio Analysis Conclusion and Suggestion Annexure

42 57 73 74

Chapter: 1

Introduction of Training

1.1

Introduction to Training.
This project report is prepared as result of summer training of M.B.E. (Full

time) which was of 4 weeks from 19th May 2010 to 16th June 2010. The researcher has taken training at JAINAM SHARES CONSULTANT PVT LTD which is simply related with stock market. Hence it is Stock broking firm which deals with different market like Equity, Commodity, and Derivatives etc.

1.2

Objective of Study:
 To gain knowledge about different market such as capital market and its industry which is helpful in completing this report effectively.  To gain the knowledge about stock market and it operation.  To become familiarize with organization, which help in applying theoretical concepts into practical routine.  To understand the working system of different department.  To get an experience of working environment.  To become part of professionalism.  To understand technical terms and its applications in study.  To understand of working of different departments and its connectivity with whole organization.  To gain the detailed knowledge of core functions like Marketing, Human Resources, Finance, Research.  To know how the scripts are being traded in Equity market, Derivatives, Commodity market.

1.3 Benefit of Study:

The research has gained some of the following benefit due to this study.  Got the knowledge about stock market and its operations.  Learnt about different scrip.  Learnt about equity and derivatives and how the prices are being volatile.  The working of sensex and nifty its rules and regulation.  How to invest in different security and at what time investor should exit or enter in trading.  How the top management is handling whole organization structure.  Learnt some technical terms of stock market and its application in trading.  The detailed study fundamental analysis of pharmaceutical industry with top 10 companies as per market capital.

Chapter: 2
Stock Market Overview:-

Industry Profile

The main function of the stock market is to enable trade in the shares of public companies, which in turn reflect the performance of the companies whose shares are traded in the stock market. Here is providing you with a detailed Stock Market Overview. Stock markets are also a vital part of an economy or the economic system of a country. Today most economies around the world are judged by the performance of their stock markets. The stock markets serve a vital purpose in the growth and development of a company that wants to expand. Such companies with expansion plans and new projects are in need of funding and the stock market serves as the best platform from which a company can sell itself to the discerning public on the basis of merit among other things. To trade in the stock market a company has to be absolutely transparent about its vital fundamentals such as revenues, income, assets, liabilities, infrastructure, etc. as this allows the investing public to make a fair assessment of the said companys market worth.

The stock markets function on the basis of two principles, which are better known as:  Primary markets When a company decides to sell its shares to the public through an (Initial Public Offer) IPO then it can be said that it is operating in the primary market. In fact, for companies that offer their shares to the public for the first time, this process is a mandatory requirement and involves a few stages of compliance with the market regulator that eventually allows it to trade in the stock market.  Secondary markets After a company has successfully completed its IPO it is allowed to get listed in the particular stock market where it has applied for membership. Here it may be said that the company has entered the secondary market and its shares are available for trade as those of other companies listed on the stock market. The market regulator determines the listing price but thereafter the companys shares are traded on a regular basis and the price is determined by the market forces, primarily demand and supply.

There are two main exchanges in India: 1. BSE Stock Exchange 2. NSE Stock Exchange The most famous stock exchange in India is the Mumbai Stock Exchange whose market movement indicator the (Bombay Stock Exchange) BSE Sensex is still an icon of Indias economic performance. However, in an IT enabled environment it is the far more sophisticated and advanced (National Stock Exchange) NSE that has gradually gained in prominence due to more substantive profile.

History of Indian Stock Market:The Indian stock market is one of the oldest and fastest growing financial markets in the world and considered to the best among the markets of the emerging economies. The history of Indian stock markets dates back 200 years toward the end of the 18th century when India was under the spell of the East India Company. The development of the capital market in India concentrated around Mumbai where no less than 200 to 250 stockbrokers were active during the second half of the 19th century. The growth of the various stock exchanges in India was more due to local demand-pulls than anything else and consequently the stock exchanges of Mumbai (BSE), Ahmadabad and Kolkata were established by the end of the 19th century. By the early 1960s the total number of stock exchanges in India rose to eight that included Mumbai, Ahmadabad and Kolkata apart from Madras, Kanpur, Delhi, Bangalore and Pune. Today there are 21 regional stock exchanges in India in addition to the centralized NSE (National stock Exchange) and OTCEI (Over the Counter Exchange of India). The stock markets in India remained stagnant due to the controlled nature of the economy up to the early 1990s when the Indian economy began liberalizing. As the controls began to be dismantled or eased out, the stock markets witnessed a flurry of

IPOs hitting the market. This resulted in many new companies across different industry segments to come up with newer products and services. One of the striking features of the growth of the Indian economy in recent years has been the role played by its stock markets in assisting and fuelling that growth. Much of the organized sector in India has been affected by high growth and the stock markets played an all-inclusive role in sustaining that growth. Many PSUs (Public Sector Undertakings) that decided to offload part of their equity were also helped by the wellorganized stock market in India. During the mid 1990s the government of India launched the NSE (National Stock Exchange) and the OTCEI (Over the Counter Exchange of India) to usher in an easier and more transparent form of trading in stocks. While the NSE has not just done well to grow and evolve into the virtual backbone of capital markets in India the OTCEI struggled and is yet to show any sign of growth and development. The integration of IT into the capital market infrastructure has been particularly smooth in India due to the countrys world class IT industry and this has pushed up the operational efficiency of the Indian stock market to global standards. As a result the country has been able to capitalize on its high growth and attract foreign capital like never before. The SEBI (Securities and Exchange Board of India) is the regulating authority for capital markets in India. SEBI came into prominence in the 1990s after the capital markets experienced some turbulence and has grown in strength as one of the countrys most important institutions.

Bombay Stock Exchange (BSE):Bombay Stock Exchange is the oldest stock exchange in Asia with a rich heritage, now spanning three centuries in its 133 years of existence. What is now popularly known as BSE was established as "The Native Share & Stock Brokers' Association" in 1875. BSE is the first stock exchange in the country which obtained permanent recognition (in 1956) from the Government of India under the Securities Contracts (Regulation) Act 1956. BSE's pivotal and pre-eminent role in the development of the Indian capital market is widely recognized. It migrated from the open outcry system to an online screen-based order driven trading system in 1995. Earlier an Association of Persons (AOP), BSE is now a corporatised and demutualised entity incorporated under the provisions of the Companies Act, 1956, pursuant to the BSE (Corporatisation and Demutualization) Scheme, 2005 notified by the Securities and Exchange Board of India (SEBI). With demutualization, BSE has two of world's best exchanges, Deutsche Brse and Singapore Exchange, as its strategic partners. Over the past 133 years, BSE has facilitated the growth of the Indian corporate sector by providing it with an efficient access to resources. There is perhaps no major corporate in India which has not sourced BSE's services in raising resources from the capital market. Today, BSE is the world's number 1 exchange in terms of the number of listed companies and the world's 5th in transaction numbers. The market capitalization as on December 31, 2007 stood at USD 1.79 trillion. An investor can choose from more than 4,700 listed companies, which for easy reference, are classified into A, B, S, T and Z groups.

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The BSE Index, SENSEX, is India's first stock market index that enjoys an iconic stature, and is tracked worldwide. It is an index of 30 stocks representing 12 major sectors. The SENSEX is constructed on a 'free-float' methodology, and is sensitive to market sentiments and market realities. Apart from the SENSEX, BSE offers 21 indices, including 12 sectoral indices. BSE has entered into an index cooperation agreement with Deutsche Brse. This agreement has made SENSEX and other BSE indices available to investors in Europe and America. Moreover, Barclays Global Investors (BGI), the global leader in ETFs through its iShares brand, has created the 'iShares BSE SENSEX India Tracker' which tracks the SENSEX. The ETF enables investors in Hong Kong to take an exposure to the Indian equity market. BSE has tied up with U.S. Futures Exchange (USFE) for U.S. dollardenominated futures trading of SENSEX in the U.S. The tie-up enables eligible U.S. investors to directly participate in India's equity markets for the first time, without requiring American Depository Receipt (ADR) authorization. The first Exchange Traded Fund (ETF) on SENSEX, called "SPICE" is listed on BSE. It brings to the investors a trading tool that can be easily used for the purposes of investment, trading, hedging and arbitrage. SPICE allows small investors to take a long-term view of the market. BSE provides an efficient and transparent market for trading in equity, debt instruments and derivatives. It has a nation-wide reach with a presence in more than 450 cities and towns of India. BSE has always been at par with the international standards. The systems and processes are designed to safeguard market integrity and enhance transparency in operations. BSE is the first exchange in India and the second in the world to obtain an ISO 9001:2000 certifications. It is also the first exchange in the country and second in the world to receive Information Security Management System Standard BS 7799-2-2002 certification for its BSE On-line Trading System (BOLT). BSE continues to innovate. In recent times, it has become the first national level stock exchange to launch its website in Gujarati and Hindi to reach out to a larger number of investors. It has successfully launched a reporting platform for corporate bonds in India christened the ICDM or Indian Corporate Debt Market and a unique ticker-cum-

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screen aptly named 'BSE Broadcast' which enables information dissemination to the common man on the street. In 2006, BSE launched the Directors Database and ICERS (Indian Corporate Electronic Reporting System) to facilitate information flow and increase transparency in the Indian capital market. While the Directors Database provides a singlepoint access to information on the boards of directors of listed companies, the ICERS facilitates the corporate in sharing with BSE their corporate announcements. With over 20 million shareholders, India has the third largest investor base in the world after the USA and Japan. Over 9,000 companies are listed on the stock exchanges, which are serviced by approximately 7,500 stockbrokers. The Indian capital market is significant in terms of the degree of development, volume of trading and its tremendous growth potential. There are 23 recognized stock exchanges in India, including the Over the Counter Exchange of India (OTCEI) for small and new companies and the National Stock Exchange (NSE), which was set up as a model exchange to provide nation-wide services to investors. NSE, which in the recent past has accounted for the largest trading volumes, has a fully automated screen based system that operates in the wholesale debt market segment as well as the capital market segment. India has emerged as the worlds 15th largest equity market after it added several companies to the billion-dollar club in terms of capitalization in the last three months, taking the total to 81 companies. India has become the third largest Asian market (excluding Japan and Australia) after having toppled Korea, China and Singapore that have 80, 50 and 47 firms with billion-dollar market capitalization respectively. India is also inching closer to outpacing Taiwan that has 84 such companies but lags far behind Hong Kong which has 107, the highest in Asia. Bombay Stock Exchange (BSE), one of the oldest in the world, accounts for the largest number of listed companies and has also started a screen-based trading system with the introduction of the Bombay On-Line Trading system

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The number of companies listed on the BSE at the end of December 1994 was 4,702. This was more than the aggregate total of companies listed in 9 emerging markets (Malaysia, S.Africa, Mexico, Taiwan, Korea, Philippines, Thailand, Brazil and Chile). The number of companies was also more than the in developed markets of Japan, UK, Germany, France, Australia, Switzerland, Canada and Hong Kong. There is a large presence of FIIs in the Indian capital market with over 451 FIIs and 38 foreign brokers registered with SEBI. The cumulative investment of FIIs in the Indian stock market stood at US$ 6.59 billion in July 1996 and US $12 billion in April 2000. Since January 2005, FII's have pumped in $8 billion into Indian markets, compared to $8.5 billion in entire 2004 and $6.6 billion in entire 2003. Foreign investors invested $4.02 billion in June-August 2005, which is much higher than the $3.41 billion flows India received between January and May. The recent decision of the government of easing limits on inward portfolio investment, with an increase in the ceiling for FII and non-resident Indians from 24 percent to 30%, provides a tremendous incentive to FII investment. FIIs are also permitted to invest self owned funds in the debt market and in unlisted securities.

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National Stock Exchange (NSE):National Stock Exchange of India (NSE) is India's largest Stock Exchange & World's third largest Stock Exchange in terms of transactions. Located in Mumbai, NSE was promoted by leading Financial Institutions at the behest of the Government of India, and was incorporated in November 1992 as a tax-paying company. In April 1993, NSE was recognized as a Stock exchange under the Securities Contracts (Regulation) Act-1956. NSE commenced operations in the Wholesale Debt Market (WDM) segment in June 1994. Capital Market (Equities) segment of the NSE commenced operations in November 1994, while operations in the Derivatives segment commenced in June 2000. NSE has played a catalytic role in reforming Indian securities market in terms of microstructure, market practices and trading volumes. NSE has set up its trading system as a nation-wide, fully automated screen based trading system. It has written for itself the mandate to create World-class Stock Exchange and use it as an instrument of change for the industry as a whole through competitive pressure. NSE is set up on a demutualised model wherein the ownership, management and trading rights are in the hands of three different sets of people. This has completely eliminated any conflict of interest. NSE was set up with the objectives of
 Establishing nationwide trading facility for all types of securities  Providing fair, efficient & transparent securities market using electronic trading

system
 Enabling shorter settlement cycles and book entry settlements

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 Meeting International benchmarks and standards

Within a very short span of time, NSE has been able to achieve its objectives for which it was set up. Indian Capital Markets are a far cry from what they were 12 years back in terms of market practices, infrastructure, technology, risk management, clearing and settlement and investor service. To ensure continuity of business, NSE has built a full fledged BCP site operational for last 7 years. NSE's markets:NSE provides a fully automated screen-based trading system with national reach in the following major market segments: Equity OR Capital Markets  Futures & Options OR Derivatives Market  Wholesale Debt Market (WDM)  Mutual Funds (MF)  Initial Public Offerings (IPO)

The National Stock Exchange of India Limited has genesis in the report of the High Powered Study Group on Establishment of New Stock Exchanges, which recommended promotion of a National Stock Exchange by financial institutions (FIIs) to provide access to investors from all across the country on an equal footing. Based on the recommendations, NSE was promoted by leading Financial Institutions at the behest of the Government of India and was incorporated in November 1992 as a tax-paying company unlike other stock exchanges in the country. On its recognition as a stock exchange under the Securities Contracts (Regulation) Act, 1956 in April 1993, The Capital Market (Equities) segment commenced operations in November 1994 and operations in Derivatives segment commenced in June 2000.

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NSE provides exposure to investors in two types of markets, namely: 1. Wholesale debt market 2. Capital market Wholesale Debt Market - Similar to money market operations, debt market operations involve institutional investors and corporate bodies entering into transactions of high value in financial instruments like treasury bills, government securities, commercial papers etc. Capital Market (Trading at NSE)  Fully automated screen-based trading mechanism  Strictly follows the principle of an order-driven market  Trading members are linked through a communication network  This network allows them to execute trade from their offices  The prices at which the buyer and seller are willing to transact will appear on the

screen
 When the prices match the transaction will be completed  A confirmation slip will be printed at the office of the trading member

Advantages of trading at NSE

 Integrated network for trading in Stock market of Ideally automated screen based

system that provides higher degree of transparency

 Investors can transact from any part of the country at uniform prices  Greater functional efficiency supported by totally computerized network

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Trading Pattern of the Indian Stock Market:Indian Stock Exchanges allow trading of securities of only those public limited companies that are listed on the Exchanges. They are divided into two categories:

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Types of Transactions:The flowchart below describes the types of transactions that can be carried out on the Indian Stock exchanges:

Indian Stock exchange allows a member broker to perform following activities:

y y y y

Act as an agent, Buy and sell securities for his clients and charge commission for the same, Act as a trader or dealer as a principal, Buy and sell securities on his own account and risk.

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Over The Counter Exchange of India (OTCEI) Traditionally, trading in Stock Exchanges in India followed a conventional style where people used to gather at the Exchange and bids and offers were made by open outcry. This age-old trading mechanism in the Indian Stock markets used to create much functional inefficiency. Lack of liquidity and transparency, long settlement periods and benami transactions are a few examples that adversely affected investors. In order to overcome these inefficiencies, OTCEI was incorporated in 1990 under the Companies Act 1956. OTCEI is the first screen based nationwide Stock Exchange in India created by Unit Trust of India, Industrial Credit and Investment Corporation of India, Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation Oil India, General Insurance Corporation and its subsidiaries and Can Bank Financial Services.

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Advantages of OTCEI:
 Greater liquidity and lesser risk of intermediary charges due to widely spread

trading mechanism across India.

1) The screen-based scrip less trading ensures transparency and accuracy of prices.  Faster settlement and transfer process as compared to other exchanges.  Shorter allotment procedure (in case of a new issue) than other exchanges.

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Chapter: 3

Company Profile

Jainam Share Consultant Pvt. Ltd. History of Company:Jainam Share Consultants Pvt. Ltd. was incorporated on 10th November 2003 and it is mainly carrying on the broking business in the equity market. The company has acquired memberships of the two major stock exchanges of India; National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Ltd. (BSE). The company is also registered as a Depository Participant (DP) with Central Depository Services Ltd. (CDSL).

Jainam Share Consultants Pvt. Ltd. :The company commenced its BSE operations from 4th October 2004 and its NSE operations from 17th March 2005. Since incorporation the company has been consistently growing with the present client base of around 11000+ clients. The company has approximately 80 outlets to cater to the needs of the investors for their equity trading in the stock exchanges.

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The companys registered office is situated at, M-5/6, Malhar Complex, Dumas Road, Ichchanath, Surat 395007.

Jainam Commodities Pvt. Ltd. :Jainam Commodities Pvt. Ltd. was incorporated on 1st June 2005 and is mainly carrying on the broking business in the commodity market. The company has acquired memberships of the two major commodity exchanges of India viz. National Commodity & Derivatives Exchange Ltd. (NCDEX) and Multi-Commodity Exchange of India Ltd. (MCX) The Companys registered office is situated atM-11, Malhar Complex, Dumas Road, Ichchanath, Surat 395007. Board of Directors:1) Dr. Jitendra Shah 2) Mr. Chirag Shah 3) Mr. Milan Parikh 4) Mr. Nipun Shah 5) Mrs. Pinal Shah 6) Mrs. Purna Shah

Mission:TO PROVIDE WORLD CLASS SERVICES AND CRATE WEALTH FOR EVERY ONE

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Vision 2015:-

TO BE THE MOST PREFERRED ORGANIZATION PROVIDING ALL FINANCIAL SERVICES ACROSS THE COUNTRY

Products and services of the company:1. Equity 2. Derivatives 3. Depositary 4. Commodities 5. Systematic trading 6. Internet trading 7. IPO -Initial Public Offerings 8. Mutual fund 9. Insurance

Jainam Share Consultants Pvt. Ltd.

Member: Bombay Stock Exchange Ltd. (BSE) Trading Member ID: 2001 SEBI Registration No.: INB011211639 (CM Segment)

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Member: National Stock Exchange of India Ltd. (NSE) Trading Member ID: 12169 SEBI Registration No.: INB231216939 (CM Segment) SEBI Registration No.: INF231216939 (Derivatives Segment)

Member: Central Depository Services (I) Ltd. (CDSL) DP ID: 41500 SEBI Registration No.: IN-DP-CDSL-322-200

Jainam Commodities Pvt. Ltd.

Member: Multi-Commodity Exchange of India Ltd. (MCX) Trading Member ID: 29735 FMC Registration No. : MCX/TCM/CORP/0924

Member: National Commodities & Derivatives Exchange Ltd. (NCDEX) Trading Member ID: 00738 FMC Registration No. : NCDEX/TCM/CORP/0723

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Milestone of company:Jainam Share Consultants Pvt. Ltd. 2005 15th December Acquired Membership of Central Depository service (India) Ltd. 2004 23rd December Acquired Membership of National Stock Exchange of India Ltd. (Cash Seg.) 2004 17th December

Acquired Membership of National Stock Exchange of India Ltd. (F & O Seg.)

2004

30th December

Acquired Membership of Bombay Stock Exchange Ltd. (Cash Seg.)

2003

10th November

Company Registered

Jainam Commodities Pvt. Ltd. 2006 06th February Acquired Membership of National Commodity and Derivatives Exchange of India Ltd. 2005 08th December Acquired Membership of Multi Commodity Exchange of India Ltd. 2005 1st June Company Registered

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Jainam Organisation Hirearchy

Board of Directors

HRM Shital Mehta

Operation

Finance Hemal Zaveri

Marketing Chetna Bhandari

General Account & Banking

Mutual Fund Abhishek Shah

Demat A/C Kamlesh Patel

Customercare Dhawal Panchal

System/ technical

Research Rohan Mehta

Commodiy Devesh Shah

RMS (Riskmanagement system) Dilip Morakhia

Account Opening Nisha Dudhwala

Security & KYC Hetal Shah

IT & Software Nikhil Tandel

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About Department:Human Resources Department:Introduction:

The JAINAM shares companys HR department plays a significant role in day to day life activities. Its activities and functions are related with other departments. The department is base on the following FIVE CORE VALUES. 1. Change 2. People Development 3. Security 4. Team Work 5. Integrity Total number of employee: 160

Functions of HR manager:
1. Job Analysis 2. Man power planning 3. Recruitment and selection 4. Placement (Right person at right job) 5. Induction training 6. Development programmes 7. Performance Appraisal 8. Miscellaneous All functions work actively. These are as below:

1) Job Analysis:
Job analysis can be defined as the procedure for determining the duties and skill requirements of a job and the kind of person who should be hired for it.

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2) Man Power Planning:

After doing job analysis they are always done a Manpower Planning. As we know that success of any organization depends upon the quantity and quality of its human resources. JAINAM has accepted a strategy of putting right person on the right job. They doing MPP as per the business plan. They are doing MPP for one year period. They are using a technique of managerial judgment for the forecast of the future human resource. They are doing MPP on the basis of future supply of human resource. They make assumption of future expected loss of human resource. They are done MPP on continuous basis.

3) Recruitment and Selection:

After doing Job analysis and HRP, they recruit and select the person as per job requirement. The below diagram shows hoe Job analysis and HRP helpful in Recruiting and Selection Every firm can hire a person after the Job analysis and HRP has been done.  Sources of recruitment:~ They generally use both the internal and external sources for the Recruitment. Internal sources:They generally use internal sources for Recruitment and Selection. They generally recruit the require person through Promotion and Transfer. They used past employee of company for the Recruitment. External sources:As a external sources of Recruitment they used a service of a agency which are providing a skilled Human Resources. Currently they are Recruiting a persons from MAFOIA consultancy Ltd.

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 Selection process:~ i. Interview:

After recruiting a necessary employee for the job they select a right person who has all necessary skills and ability to do job. They select a person through a Interview process. Interviews are taken by a HR Manager of the JAINAM and by the Manager of respected department in which the person is required. ii. Test during Interview:

If any special test is required during interview, they are planning to put it in action for checking the abilities of applicant. iii. Final placement:

After the test and final interview call over, right person at right place to be placed in the JAINAM by the HR manager.  Induction Training:~ As new employee is placed in the organization, the following are some important task which is done to make him/her familiar with the organization. As I have joined the organization for the purpose of my MBE summer training, they have consider me as a new employee of the firm and given me induction manual to be familiarize with the JAINAM. Purpose of Induction manual: 1. To make familiar with organization and its culture. 2. Accelerate socialization process for the individual. 3. Aware of responsibilities and privileges. 4. Integrate with the organization.

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Mutual Fund Department:A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized are shared by its unit holders in proportion to the number of units owned by them. Thus a Mutual Fund is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.

ADVANTAGES OF MUTUAL FUNDS:The advantages of investing in a Mutual Fund are:  Professional Management  Diversification  Convenient Administration  Return Potential  Low Costs  Liquidity  Transparency  Flexibility

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 Choice of schemes  Tax benefits  well regulated TYPES OF MUTUAL FUND SCHEMES:By structure:  Open-ended scheme  Close ended scheme  Interval scheme By Investment Objective:  Growth scheme  Income scheme  Balance scheme  Money market scheme Other Scheme:  Tax saving scheme  Special scheme

Marketing & Sales Department:This department was started before two year in the organization. When I talked to marketing manager, Chetna Bhandari who has 11 years experience in share broking firm, about requirement of this department in the company , she replied like on demand of 300 sub brokers and to make easy transactions and to facilitate them, they have established the marketing and sales department last year  Functions of department: 1. Taking references from sub brokers. 2. Making call for appointment to explain detailed information. 3. Fixing meeting with client and sharing information.

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4. Problem solving of clients and sub brokers. 5. Meeting with existing sub brokers in 15 days. 6. Meeting with new clients in every week. 7. For potential consumers they are appointing one special guide  Advertisement: When I asked her about advertisement and its rules, she told me that if the firm wants to put single banner they need to take permission from SEBI. If there are any changes in the matter immediately they have to inform to SEBI about changes.  Strategy: She told me about the strategy to stabilize their firm in this competitive environment. In her words If we think that ANGEL, SHARE KHAN and other big firms are our competitors then we will not be able to survive in the market. So we believe that we, ourselves are competitors of the firm

IT & Software department:This department was stared before 1 year. When I talked to in charge of the department Mr. Nikhil Tandel about the need for staring this department, he explained me the various reasons like,  Reasons for establishment of the department: 1. To build, stabilize, and deploy IT services, applications, and infrastructure improvements in the most efficient way possible. 2. Software service problem was in very high degree 3. To become self dependent in making software for the business 4. In future to apply for innovations and creative ideas in business for growth and expansion of the firm 5. To facilitate the A/C & trading department

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6. To solve IT problems quickly. 7. Reliability and security of business plan 8. Asset protection 9. Restoration of a service to health when things go wrong.

KYC (know your client) department & DP:The department plays significant role in the stock market transaction and in company.  What is KYC? In order to prevent identity theft, identity fraud, money laundering, terrorist financing, etc, the RBI had directed all banks and financial institutions to put in place a policy framework to know their customers before opening any account. This involves verifying customers' identity and address by asking them to submit documents that are accepted as relevant proof. Mandatory details required under KYC norms are proof of identity and proof of address. Passport, voter's ID card, PAN card or driving license are accepted as proof of identity, and proof of residence can be a ration card, an electricity or telephone bill or a letter from the employer or any recognized public authority certifying the address. Some banks may even ask for verification by an existing account holder. Though the standard documents which are accepted as proof of identity and residence remain the same across various banks, some deviations are permitted, which differ from bank to bank. So, all documents shall be checked against banks requirements to ascertain if those match or not before initiating an account opening process with any bank. Thus opening a new bank account is no longer a cake walk. Those are the basic requirements of KYC to identify a customer at the account opening stage.

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DP department: What is a demat account? Demat refers to a dematerialized account. Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, you need to open a demat account if you want to buy or sell stocks. So it is just like a bank account where actual money is replaced by shares. You have to approach the DPs (remember, they are like bank branches), to open your demat account. Let's say your portfolio of shares looks like this: 40 of Infosys, 25 of Wipro, 45 of HLL and 100 of ACC. All these will show in your demat account. So you don't have to possess any physical certificates showing that you own these shares. They are all held electronically in your account. As you buy and sell shares, they are adjusted in your account. Just like a bank passbook or statement, the DP will provide you with periodic statements of holdings and transactions.  Is a Demat account a compulsory? Nowadays, practically all trades have to be settled in dematerialized form. Although the market regulator, the Securities and Exchange Board of India (SEBI), has allowed trades of upto 500 shares to be settled in physical form, nobody wants physical shares any more. So a demat account is a must for trading and investing.

Customer Care Department: Definition: Customer Care is the processing of meeting (and exceeding) your customer expectations of service.

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 Mission of the department: One satisfied customer is more valuable than 5 lacs Rs. Advertisement.  Objectives of Customer Care:
y y y

Create a culture of customer focus. Creating rapport and building loyalty. Achieving customer satisfaction.

They are committed to providing customers with efficient, local, support to help them achieve the maximum benefit from their solution. They have structured their business so that, no matter where customers are located, they have direct access to local sales, support and management to ensure they are responsive to all customers' needs - not just product maintenance.

Finance Department:Introduction: The primary purpose of any business is to earn profits. To earn profit, the business has to produce goods or render services. To do either, management of business must have adequate supply of funds. It is the responsibility of the finance department to ensure the supply of the needed funds. Financial management is the application of planning and control to the finance function of a business to ensure that the funds needed are raised and used effectively for its benefits. Financial management means procurement of funds at minimum cost and its effective use in order to maximize the wealth of shareholders.

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The companys Finance department is divided into two parts:  Account Department  Banking Department Functions of Account Department:  Payment of expenses.  Final accounts.  All types of taxes.  Auditing and statutory auditing. (Quarterly)  Daily or time to time banking match.  Pay in pay out.  Collection of check and entry maintenance.  Enquiry and third party check. Functions of Banking Department:  Capital Structure maintenance  Pay in pay out of checks with exchanges.  Maintenance of OD  Fulfillment of necessary requirement of department of financial needs.

Research Department:Introduction: In the firm of share broking organization research department plays crucial role for time to time updates and other technical services for clients as well as internal purpose.

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The Jainam shares consultants Pvt. Ltd is providing the following technical services. Technical Services: Intra-day Calls:For day traders Jainam provides intraday calls with entry, exit and stop loss levels during the market hours and our calls are flashed on our terminals. Our analysts continuously track the calls and provide the recommendations according to the market movements. Past performance of these calls in terms of profit/loss is also available to our associates to enable them to judge the success rate. Posting Trading Calls:Jainams Position Trading Calls are based on a through analysis of the price movements in selected scripts and provides calls for taking positions with a 10 - 15 days time span with stop losses and targets. These calls are also flashed on our terminals during market hours. Derivative strategies:Our analyst take a view on the NIFTY and selected scripts based on derivatives and technical tools and devise suitable Derivative Strategies , which are flashed on our terminals and published in our derivative reports.

Daily Services:Market Outlook at 9:00 AM A crisp pre-market report that arms our clients with sensitive information before the opening bell. Key corporate developments, policy announcements, geo-political news and views are analyzed for their impact on the market.

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Technical Report at 6:00 PM This report analyses trading patterns, historical background, market position of key stocks and offer short term (1 to 5 days) as well as medium term (10 to 20 days) views. Tracking individual scripts as well as the Sensex and Nifty, its insight cuts through the market maze.

Derivative Analysis Report The report provides FII activity in derivative segments, change in open interest, put call ratio, cost of carry of stock and index based derivative products. Our derivative analysts use the above tolls to project the movement during the next trading sessions.

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Chapter: 4 Theoretical Framework

 Fundamental Analysis: What Is It?

Basics: When talking about stocks, fundamental analysis is a technique that attempts to determine a securitys value by focusing on underlying factors that affect a company's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements. Fundamental analysis serves to answer questions, such as:  Is the companys revenue growing?  Is it actually making a profit?  Is it in a strong-enough position to beat out its competitors in the future?  Is it able to repay its debts?  Is management trying to "cook the books"? Of course, these are very involved questions, and there are literally hundreds of others you might have about a company. It all really boils down to one question: Is the companys stock a good investment? Think of fundamental analysis as a toolbox to help you answer this question. The term fundamental analysis is used most often in the context of stocks, but you can perform fundamental analysis on any security, from a bond to a derivative. As long as you look at the economic fundamentals, you are doing fundamental analysis. For the purpose of this tutorial, fundamental analysis always is referred to in the context of stocks.

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 Fundamentals: Quantitative and Qualitative:

You could define fundamental analysis as researching the fundamentals, but that doesnt tell you a whole lot unless you know what fundamentals are. As we mentioned in the introduction, the big problem with defining fundamentals is that it can include anything related to the economic well-being of a company. Obvious items include things like revenue and profit, but fundamentals also include everything from a companys market share to the quality of its management. The various fundamental factors can be grouped into two categories: quantitative and qualitative. The financial meaning of these terms isnt all that different from their regular definitions. Here is how the MSN Encarta dictionary defines the terms:
y y

Quantitative capable of being measured or expressed in numerical terms. Qualitative related to or based on the quality or character of something, often as opposed to its size or quantity. In our context, quantitative fundamentals are numeric, measurable

characteristics about a business. Its easy to see how the biggest source of quantitative data is the financial statements. You can measure revenue, profit, assets and more with great precision. Turning to qualitative fundamentals, these are the less tangible factors surrounding a business - things such as the quality of a companys board members and key executives, its brand-name recognition, patents or proprietary technology.  Quantitative Meets Qualitative: Neither qualitative nor quantitative analysis is inherently better than the other. Instead, many analysts consider qualitative factors in conjunction with the hard, quantitative factors. Take the Coca-Cola Company, for example. When examining its stock, an analyst might look at the stocks annual dividend payout, earnings per share, P/E ratio and many other quantitative factors. However, no analysis of Coca-Cola would be complete without taking into account its brand recognition. Anybody can start a company that sells sugar and water, but few companies on earth are recognized by billions of people.

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Its tough to put your finger on exactly what the Coke brand is worth, but you can be sure that its an essential ingredient contributing to the companys ongoing success.

 The Concept of Intrinsic Value:

Before we get any further, we have to address the subject of intrinsic value. One of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stocks real value. After all, why would you be doing price analysis if the stock market were always correct? In financial jargon, this true value is known as the intrinsic value. For example, lets say that a companys stock was trading at $20. After doing extensive homework on the company, you determine that it really is worth $25. In other words, you determine the intrinsic value of the firm to be $25. This is clearly relevant because an investor wants to buy stocks that are trading at prices significantly below their estimated intrinsic value. This leads us to one of the second major assumptions of fundamental analysis: in the long run, the stock market will reflect the fundamentals. There is no point in buying a stock based on intrinsic value if the price never reflected that value. Nobody knows how long the long run really is. It could be days or years. This is what fundamental analysis is all about. By focusing on a particular business, an investor can estimate the intrinsic value of a firm and thus find opportunities where he or she can buy at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.

 Ratio Valuation:
Financial ratios are mathematical calculations using figures mainly from the financial statements, and they are used to gain an idea of a company's valuation and financial performance. Some of the most well-known valuation ratios are price-toearnings and price-to-book. Each valuation ratio uses different measures in its

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calculations. For example, price-to-book compares the price per share to the company's book value. The calculations produced by the valuation ratios are used to gain some understanding of the company's value. The ratios are compared on an absolute basis, in which there are threshold values. For example, in price-to-book, companies trading below '1' are considered undervalued. Valuation ratios are also compared to the historical values of the ratio for the company, along with comparisons to competitors and the overall market itself.

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Chapter: 5 Research Methodology

 OBJECTIVE OF THE STUDY The title of this project is fundamental analysis on FMCG (Fast moving Consumer Goods) industry. The main objective of project is to make the good portfolio or to suggest the sound portfolio regarding the FMCG sector by selecting good company from industry by the tool of ratio analysis. The objective can be stated like to earn the maximum profit by reducing the risk in future of the sound company after analyzing the recent trends and fundamental analysis in that particular industry.  To guide the investors for selecting industry so that they can invest in the best companies who can give maximum return.  To know about the selected industry and its contribution towards the overall Indian economy.  To analyze the ratio, thereby to know the companies respective positions in the market.  Problem Statement: Fundamental analysis with reference to FMCG (Fast moving Consumer Goods) sector.  Assumption and benefits of the study Assumption:The assumption of this study is that the majority of the information that goes into the analysis comes from the company itself. Companies employ investor relations managers specifically to handle the analyst community and release information. When it comes to massaging the data or spinning the announcement, CFOs and investor relations managers are professionals. When reading these reports, it is important to take into consideration any biases a sell-side analyst may have. The buy-side analyst, on the

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other hand, is analyzing the company purely from an investment standpoint for a portfolio manager. If there is a relationship with the company, it is usually on different terms. In some cases this may be as a large shareholder. Benefits: Fundamental analysis helps in: 1. Identifying the intrinsic value of a security. 2. Identifying long-term investment opportunities, since it involves real-time data  Research Design:A Research design is an overall framework of project that indicates what information to be collected from which sources and by which procedures. Research design is the plan, structure and strategy, if investigation conceived so as to obtain answer to research questions. Based on research requirement formalized studies is more pertinent i.e. Descriptive study have been used, as I had try to describe the situation of the selected COMPANY whether they are fundamentally strong or not.  Sampling: Sample Design: I have used selected the FMCG companies on the basis of total market capital. Companies which are on the top in list of total market capital are selected. Sample Size: I have selected top 2 companies for analysis on the basis of total market capital.  Research tool used I have used secondary data as a tool for research and analysis them through ratio analysis.  Data collection: I have used secondary data for research and I have collected data from internet.  Limitation of Study:

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The common limitation of the study is that the project is based on the future and as we know that the future is always uncertain. The projects predict all about the future but the preceding the future is one limitation because of the uncertainty of the future. The input by using which the project made secondary data and no primary data is used in the making of the project so there can be a fault in secondary data or can be problem in obtaining the secondary data. There are certain limitations of projects which have to keep in mind while considering the project as sound portfolio for anyone. The return or portfolio has to earn from the stock market, which also belongs to certain limitation like there are different trends in stock markets or speculative transaction, etc. which can affect the probability of investors.

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Chapter: 6
FMCG Industry Analysis:-

Data Analysis

The Indian FMCG sector is the fourth largest sector in the economy with a total market size in excess of US$ 13.1 billion. It has a strong MNC presence and is characterized by a well-established distribution network, intense competition between the organized and unorganized segments and low operational cost. Availability of key raw materials, cheaper labour costs and presence across the entire value chain gives India a competitive advantage. The FMCG market is set to treble from US$ 11.6 billion in 2003 to US$ 33.4 billion in 2015. Penetration level as well as per capita consumption in most product categories like jams, toothpaste, skin care, hair wash etc in India is low indicating the untapped market potential. Burgeoning Indian population, particularly the middle class and the rural segments, presents an opportunity to makers of branded products to convert consumers to branded products. Growth is also likely to come from consumer 'upgrading' in the matured product categories. With 200 million people expected to shift to processed and packaged food by 2010, India needs around US$ 28 billion of investment in the foodprocessing industry.  Industry Strengths: 1. Low operational costs 2. Presence of established distribution networks in both urban and rural areas 3. Presence of well-known brands in FMCG sector  Key Growth Drivers The FMCG industry has undergone substantial growth on account of the following reasons: y Availability of raw materials: India is the largest producer of livestock, milk, sugarcane, coconut, spices and cashew apart from being the second largest

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producer of rice, wheat, fruits & vegetables. On account of its diverse agroeconomic conditions, there exists a wide variety of raw materials that suit the requirements of the food processing industry. y Vast agricultural output: Worldwide, India is one of the largest producers of farm output. In 2005, agriculture and allied sectors like forestry, logging and fishing accounted for 18.6% of the GDP. India is also home to the worlds largest cattle population, approximately 193 mn. y Low labour costs: As per the labour cost advantage index prepared by global management consultancy AT Kearney for the year 2006, India has maintained its supreme position, followed by China in the South Asian sub-continent. y Large Domestic Market: Increasing disposable income has resulted in a rise in the domestic market size. Increasing income has translated into higher consumption levels. y Presence across value chain: Indian FMCG firms have a presence across the entire value chain of the industry, from raw material supply to final processed and packaged goods, both in the personal care products and in the food processing sector. As a result firms located in India have become more cost competitive. y Growing share of organised retail: The modern trade format provides a wider visibility to the FMCG products. Organised retail has led to a boom in consumption by generating wide spread employment opportunities.

 Indian FMCG Sector: Current Scenario:The growth potential for FMCG companies looks promising over the longterm horizon, as the per-capita consumption of almost all products in the country is amongst the lowest in the world. As per the Consumer Survey by KSA-Technopak, of the total consumption expenditure, almost 40% and 8% was accounted by groceries and personal care products respectively. Rapid urbanization, increased literacy and rising per capita income are the key growth drivers for the sector. Around 45% of the population in India is below 20 years of age and the proportion of the young population is expected to increase in the next five years. Aspiration levels in this age group have been fuelled by

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greater media exposure, unleashing a latent demand with more money and a new mindset. In this backdrop, industry estimates suggest that the industry could triple in value by 2015 (by some estimates, the industry could double in size by 2010). In our view, testing times for the FMCG sector are over and driving rural penetration will be the key going forward. Due to infrastructure constraints (this influences the cost-effectiveness of the supply chain), companies were unable to grow faster. Although companies like COLGATE and DABUR have dedicated initiatives targeted at the rural market, these are still at a relatively nascent stage. The bottlenecks of the conventional distribution system are likely to be removed once organized retailing gains in scale. Currently, organized retailing accounts for just 3% of total retail sales and is likely to touch 10% over the next 3-5 years. In our view, organized retailing results in discounted prices, forced-buying by offering many choices and also opens up new avenues for growth for the FMCG sector. Given the aggressive expansion plans of players like Pantaloon, Trent, Shoppers Stop and Shoprite, we are confident that the FMCG sector has a bright future.

 Outlook:There is a huge growth potential for all the FMCG companies as the per capita consumption of almost all products in the country is amongst the lowest in the world. Again the demand or prospect could be increased further if these companies can change the consumer's mindset and offer new generation products. Earlier, Indian consumers were using non-branded apparel, but today, clothes of different brands are available and the same consumers are willing to pay more for branded quality clothes. It's the quality, promotion and innovation of products, which can drive many sectors.

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History of Colgate Company:Colgate-Palmolive (India) Limited (CPIL) is India's leading provider of scientifically proven oral care products with multiple benefits at various price points. The Company was incorporated in 23rd September of the year 1937. The range of products includes toothpastes, toothpowder and toothbrushes under the 'Colgate' brand, as well as a specialised range of dental therapies under the banner of Colgate Oral Pharmaceuticals. These have become an essential part of daily oral hygiene and therapeutic oral care in India. The Company also provides a range of personal care products under the brand name 'Palmolive', such as shaving creams, lotions, face creams, baby powder and talcum powder, etc. Colgate toothpaste adds MFP Fluoride, clinically proven to reduce cavities during the year 1968. The Company's successful product Colgate Plus toothbrush was introduced in the year 1983. During the year 1988, CPIL received a licence for producing 24,000 tonnes per annum of fatty acids. It also registered with DGTD for production of 30,000 tonnes of toilet soap per annum. The Company established a wholly owned subsidiary at Hetanda in Nepal during June of the year 1988 to manufacture the toothpaste and tooth powder initially. The Company launched new Colgate Gel Toothpaste, Palmolive Extra Care and new Palmolive soap in the year 1991 and also re launched a high quality Colgate Plus and other toothbrushes during the same year. Prior to this, the A&MMODE Annual Survey rated Colgate as the 1 brand for India's Top Brands during the year 1992 and so on to eight years. In 1994, CPIL had acquired the oral hygiene business of Hindustan Ciba-Geigy Ltd. The Company had introduced the Colgate fresh stripe toothpaste and Palmolive naturals soap in personal care products segments, Keratin Treatment Shampoo and Palmolive optima in Hair care segment during the year 1996. In the same year of 1996, CPIL had established a modern facility at Aurangabad to manufacture Dicalcium phosphate, a key ingredient for toothpaste. In the year 1998, the company had launched

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Colgate Double Protection toothpaste for the entire family. Colgate-Palmolive had launched the ad campaign for its new product Colgate Double Protection toothpaste in competition with rival brand Pepsodent from the Hindustan Lever stable.

During the year 1999, CPIL had launched three new products, such as Colgate Double Protection, Colgate Total and Colgate Sensation. In the same period, the company started a new research and development centre, a manufacturing facility in Nepal, and completed a dicalcium phosphate facility in Aurangabad. In the year 2000, CPIL had introduced two new variants to its Palmolive Naturals soap range and has revitalised its sandalwood soap. Also in the same year launched two new variants in its Palmolive Naturals range of beauty soap lime and milk cream. The Company had re launched its Colgate Gel as Colgate Fresh Energy Gel. In the year 2000, the company had entered into a strategic tie-up with Calcutta-based First-net Solutions Ltd for joint sales promotion of Colgate Fresh Energy Gel toothpaste on the Web portal called www.yantram.com. CPIL made a foray into a new category of herbal care with the launch of Colgate Herbal touted to be a vehicle for increasing the company's rural market penetration over a period of time. The Company had formulated its biggest national-level consumer promotion involving its toothpaste, toothbrush and soaps in the year 2001. Also in the same year launched international cleaning product 'Ajax' in the Indian household products category for summer. CPIL had divested its stake in its subsidiary Camelot Investment Company during the year 2003. Colgate launched international range of Palmolive Aeromatherapy personal care products, as a result the company decided to concentrate on its non-oral care division. CPIL had commenced shipment of the New Superior Colgate Dental Cream in the year 2003 itself and the Herbal range was expanded with the launch of Herbal White toothpaste for whitening combined with the benefits of Herbal ingredients. The Company's wholly owned subsidiary Colgate Palmolive Nepal Ltd temporarily suspended its operations in view of deterioration in general security situation in Hetauda (Nepal). Brand Equity's Most Trusted Brand Survey had ranked Colgate as India's Most Trusted Brand across all categories for four consecutive years in 2003 and also this ranking is continued the following four years. CPIL had unveiled the shower gel variant and Palmolive Aroma Sensual Shower Gel in the year 2004, enriched with a blend of Orchid

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extract and pure essential oils of jasmine and rose. The Company made tie up with IDA to create and promote oral health campaign in the same year 2004. During the year 2005, the company had introduced the new one, the Colgate Active Salt toothpaste.

CPIL had decided to establish state of the art additional toothpaste manufacturing facility at Baddi in Himachal Pradesh and the new facility (first phase) became operational in April 2005 and the remaining two phases has commissioned during 2005-06. During October of the year 2007, CPIL had taken the viral route to spread the message of good oral health as part of its initiative to offer free dental check ups during Oral Health Month. The Company's New Colgate Cibaca Lal Dantmanjan launched with the goodness of Laung, Kapoor, Neem and Tulsi as at March of the year 2008.

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 Financial report of Colgate Company:-

Profit & Loss Account

Mar '08 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax 1,597.30 78.42 1,518.88 23.91 0.76 1,543.55 639.13 7.74 117.28 52.37 337.29 91.02 0.00 1,244.83 274.81 298.72 1.44 297.28 19.84 0.00 277.44 14.62 292.06 60.34 231.71 605.70 0.00 176.79 50.85 Mar '09 1,810.65 59.89 1,750.76 35.07 1.04 1,786.87 750.79 11.10 138.54 69.15 357.04 96.21 0.00 1,422.83 328.97 364.04 1.10 362.94 22.95 0.00 339.99 5.30 345.29 55.09 290.22 672.04 0.00 203.99 34.14

(In Rs. Cr.) Mar '10 1,962.46 -------1,962.46 25.40 11.43 1999.29 651.59 ------161.33 122.21 299.42 303.02 0.00 1537.57 70.44 460.90 1.50 459.40 30.66 0.00 428.74 -----428.74 61.54 367.20 -----0.00 -----------

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Balance Sheet (Annual)

Mar '08 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 13.60 13.60 0.00 0.00 148.61 0.00 162.21 0.00 4.69 4.69 166.90 Mar '09 13.60 13.60 0.00 0.00 202.70 0.00 216.30 0.00 4.69 4.69 220.99

(In Rs. Cr.) Mar '10 13.60 13.60 0.00 0.00 326.11 0.00 339.71 0.00 4.59 4.59 330.70

449.59 258.19 191.40 7.59 72.59 75.64 9.19 41.67 126.50 215.76 102.60 444.86 0.00 362.27 187.27 549.54 -104.68 0.00 166.90 46.67 11.93

425.26 251.33 173.93 4.67 38.33 82.42 11.13 43.69 137.24 232.48 207.45 577.17 0.00 411.93 161.19 573.12 4.05 0.00 220.98 46.46 15.90

--------253.14 0.00 21.00 110.55 9.77 347.58 467.9 116.75 5.48 590.13 0.00 426.65 124.82 551.47 38.66 0.00 330.70 46.08 24.98

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Key Financial Ratios

Mar '08 Investment Valuation Ratios Face Value Dividend Per Share Profitability Ratios Operating Ratio (%) Net Profit Margin (%) Return On Net Worth (%) Liquidity And Solvency Ratios Debt Equity Ratio Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Working capital turnover ratio Cash Flow Indicator Ratios Dividend Payout Ratio P/E Ratio Sales growth (%) Earnings Per Share Book Value 1.00 13.00 81.96 15.25 142.84 0.03 10.47 164.10 -14.51 0.76 22.44 14.03 17.04 11.93

(In Rs. Cr.) Mar '09 Mar '10 1.00 15.00 81.27 16.57 134.17 0.02 12.27 172.32 432.28 0.70 22.06 15.27 21.34 15.90 1.00 5.00 96.41 22.19 131.92 0.01 9.69 188.37 50.76 0.16 21.08 12.09 32.03 24.98

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History of Dabur Company:Dabur India Limited (DIL) was incorporated in 16th September of the year 1975 for manufacture of high-grade edible & industrial guargum powder and its sophisticated derivatives. Now the it is one of the leading FMCG companies in India with building on a legacy of quality and experience for over the years, Dabur is today India's most trusted name and the world's largest Ayurvedic and Natural Health Care Company. The Company's FMCG portfolio includes five flagship brands with distinct brand identities, which consists Dabur as the master brand for natural healthcare products, Vatika for premium personal care, Hajmola for digestives, Real for fruit-based drinks and Anmol for affordable personal care products. An Ayurvedic medicine used as a digestive aid is branded and launched as the popular Hajmola tablet in the year 1978. After a year, in 1979, Dabur Research Foundation was set up and also commercial production of the most modern herbal medicines plant was started at Sahibabad. DIL had launched the pharmaceutical medicines in the year 1988. During the year 1989, the company made a care with fun by the way of its business strategy, Ayurvedic digestive formulation was converted into a children's fun product with the launch of Hajmola Candy. In an innovative move, a curative product was converted to a confectionary item for wider usage. During the year 1992, a new range of coconut oil under the brand name `Anmol' was launched. The company developed Dab 10, an intermediate for anti-cancer drug namely Taxol. DIL had entered into a joint venture agreement with M/s. Guldenhorst BV Netherland to form a company for manufacture and marketing of all types of bubble gum, chewing gum, toffees, chocolate, cocoa related products and sugar based spreading creams etc. The company entered into capital market, Dabur came out with its public issue in the

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year 1994 and also in the same year DIL had entered into oncology segment. An integrated facility was designed at Alwar for manufacture of Ayurvedic Veterinary range. The company had signed a MOU with Osein International Ltd for manufacture of biscuits, snack, foods & other products in India. During the year 1995, in addition to the existing products, the company had exported products like an improved version of Chyawanprash (with more honey and less pungency) liquid form of Chyawanprash an aqueous based, hair vitalizer Melatonine etc. The Company had entered into foods business with the launch of Real Fruit Juice in the year 1996, the first local brand of 100% pure natural fruit juices made to international standards. In 1997, The Company had set up a new manufacturing unit with a high degree of automation at Baddi (H.P.) to produce company's well-known brands viz. Chyawanprash, Janma Ghunti, Ayurvedic Oils and Asva-Arishtas. Burman family hands over management of the company to professionals in the year 1998. In the same year, Dabur had signed a joint venture with Bongrain International SA of France to form a new company under the name of Dabon International Ltd. After a year, in 1999, DIL had entered into an agreement with its Spanish partner Agrolimen to offload its 49 per cent stake in the joint venture company General De Confiteria India Ltd in favour of an Agrolimen group company. During the year 2000, Dabur had launched Efarelle Comfort, a natural menstrual pain reliever and also the company's ayurvedic specialties division has launched plain isabgol husk under the brand name Nature Care. Super specialty drugs With the setting up of Dabur Oncology's sterile cytotoxic facility, the Company gains entry into the highly specialised area of cancer therapy in the year 2001. In the year 2003, the company had demerged its pharmaceuticals business from the FMCG business into a separate company as part of plans to provider greater focus to both the businesses. Also in the year 2003, DIL made its tie up with Free Markets Inc for using leading edge technologies to execute online markets for its procurement needs. CRISIL assigned CRISIL GVC LEVEL 2 rating for governance and value creation practices of the company. As a reflection of its constant efforts at achieving superior quality standards, Dabur became the first Ayurvedic products company to get ISO 9002 certification. Made tie up Uttaranchal for cancer drug in the year 2004 and also in the same year DIL had acquired a Nigerian company called African Consumer Care Ltd. During the year 2005, as part of the inorganic growth

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strategy, Dabur India acquired Balsara's Hygiene and Home products businesses, a leading provider of Oral Care and Household Care products in the Indian market for the consideration of Rs 143-crore all-cash deal. In the year 2006, Pasadensa Foods Ltd was amalgamated with Dabur Foods Ltd. Besta Cosmetics Ltd was amalgamated with the company with effect from 1st April of the year 2006. During the same year, to sell FMCG products in Pakistan, the company incorporated one subsidiary company under the name Asian Consumer Care Pakistan Pvt Ltd. Celebrated its 10 years of Real Dabur Foods and unveiled the new packaging and design for Real in the year 2007 at the completion of 10 years of the brand. The new refined modern look depicts the natural goodness of the juice from freshly plucked fruits. Dabur Foods Ltd was amalgamated with the company with effect from 1st April of the year 2007 to extract synergies and unlock operational efficiencies. The integration also helps Dabur sharpen focus on the high growth business of foods and beverages, and enter newer product categories in this space. The Company forayed into the organised retail business through its wholly owned subsidiary, H&B Stores Ltd during the year 2007. In November of the year 2007, DIL had inked an agreement to partner Indian Oil Corporation (IOC), India's largest commercial enterprise, in servicing the growing rural market demand for consumer goods through IOC's chain of Kisan Seva Kendra (KSS). In April of the year 2008, H&B Stores Ltd (subsidiary of Dabur) entered into South India with the opening of two beauties, health and wellness retail stores under the brand name `newu' at the Rajiv Gandhi International Airport, Shamshabad. Subsequently, in May 2008, its rapid expansion in India with the simultaneous opening in one week of three `newu' branded beauty, health and wellness retail outlets across Bangalore and Faridabad. The company made its foray into the hard surface cleaning market by the way had launched two new products into the market, disinfectant Floor Cleaner and anti-bacterial Kitchen Cleaner under the `Dazzl' brand as at July of the year 2008. Dabur's future enhancement is in the area of newly developed concept newu; The Company will invest Rs 140 crores by 2010 to establish its presence in the retail market in India with a chain of stores on the Health & Beauty format.

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 Financial report of Dabur Company:-

Profit & Loss account

Mar '08 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax 2,128.02 34.39 2,093.63 17.92 3.04 2,114.59 1,026.98 38.42 149.69 15.59 400.82 75.32 0.00 1,706.82 389.85 407.77 10.92 396.85 25.75 5.67 365.43 -0.86 364.57 48.40 316.77 679.85 0.00 129.60 22.03 Mar '09 2,435.85 27.52 2,408.33 29.30 38.89 2,476.52 1,271.74 36.63 167.32 17.59 425.16 84.68 0.00 2,003.12 444.10 473.40 14.47 458.93 27.42 3.94 427.57 -0.72 426.85 51.44 373.55 731.38 0.00 151.39 25.73

(In Rs. Cr.) Mar '10 3,390.90 25.30 3,365.66 24.10 14.70 3404.40 1,320.41 0.00 280.40 428.50 484.5 0.00 0.00 2513.81 -----671.70 13.2 658.50 55.70 ----602.80 ----602.80 98.50 504.34 -----0.00 -----------

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Balance Sheet (Annual)

Mar '08 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs) 86.40 86.40 0.00 0.00 441.92 0.00 528.32 16.45 0.24 16.69 545.01 Mar '09 86.51 86.51 0.00 0.00 651.69 0.00 738.20 8.26 130.72 138.98 877.18

(In Rs. Cr) Mar '10 86.76 86.76 0.00 0.00 1197.60 0.00 1275.98 70.20 109.00 179.20 1501.90

467.93 189.77 278.16 16.26 270.37 201.15 100.46 67.36 368.97 206.94 0.90 576.81 0.00 345.16 265.41 610.57 -33.76 13.95 544.98 171.24 6.11

518.77 210.45 308.32 51.71 232.05 261.72 112.36 32.16 406.24 455.65 111.53 973.42 0.00 381.87 315.10 696.97 276.45 8.64 877.17 174.15 8.53

1242.70 339.50 903.20 0.00 264.10 428.30 134.70 192.40 755.40 370.60 0.00 1126.00 0.00 494.50 326.00 820.60 305.50 2.70 1501.90 175.18 14.71

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Key Financial Ratios

Mar '08 Investment Valuation Ratios Face Value Dividend Per Share Profitability Ratios Operating Ratio (%) Net Profit Margin (%) Return On Net Worth (%) Liquidity And Solvency Ratios Debt Equity Ratio Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Working capital turnover ratio Cash Flow Indicator Ratios Dividend Payout Ratio P/E Ratio Sales growth (%) Earnings Per Share Book Value 1.00 1.50 81.52 15.06 59.96 0.03 6.87 25.84 -62.02 0.41 29.95 19.97 3.67 6.11

(In Rs. Cr)

Mar '09 1.00 1.75 83.17 15.44 50.60 0.19 6.45 22.63 8.71 0.41 22.85 15.03 4.32 8.53 Mar '10 1.00 0.00 74.69 14.98 39.53 0.06 5.88 27.25 11.02 0.00 27.30 39.75 5.81 14.71

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Ratio Analysis Profitability Ratio:1) Operating Ratio:Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales. It is generally expressed in percentage. Operating ratio shows the operational efficiency of the business. Lower operating ratio shows higher operating profit and vice versa. An operating ratio ranging between 75% and 80% is generally considered as standard for manufacturing concerns. This ratio is considered to be a yardstick of operating efficiency but it should be used cautiously because it may be affected by a number of uncontrollable factors beyond the control of the firm. Moreover, in some firms, non-operating expenses from a substantial part of the total expenses and in such cases operating ratio may give misleading results. Formula of operating ratio: = [(Cost of goods sold + Operating expenses) / Net sales] 100 Where; COGS = Sales Gross Profit Operating ratio of Colgate Company Particulars Mar '08 COGS = Sales Gross Profit 816.52 Plus: Operating expenses 428.31 Total (A) 1,244.83 (A/ Net Sales) 0.8196 81.96 % Operating ratio

Mar '09 969.58 453.25 1,422.83 0.8127 81.27 %

Mar 10 935.13 602.44 1892.02 0.9641 96.41 %

Operating ratio of Dabur Company Particulars Mar '08 COGS = Sales Gross Profit 1230.68 Plus: Operating expenses 476.14 Total (A) 1,706.82 (A/ Net Sales) 0.8152 81.52 % Operating ratio

Mar '09 1493.28 509.84 2,003.12 0.8317 83.17 %

Mar 10 2029.31 484.5 2513.81 0.7469 74.69 %

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Analysis:
Operating ratio shows the net margin over the year. We can see that ratio of Colgate Company in 2008, 2009 and 2010 is 81.26 %, 81.27 % and 96.41 % respectively. In 2008 and 2009, the ratio of this company is close to each others. But in the year 2010, there is vast difference to previous ratio that is 96.41 % which is big fluctuation that is not good for company. In Dabur company, Ratios of 2008, 2009 and 2010 is 84.52 %, 83.17 % and 74.69 % respectively. Here we can see that ratio of this company continuously increase till year 2010 which is not good for this Company. Here, in 2010, Operating profit of Dabur is not impressive and on other hand operating profit of Colgate is much healthy compare to Dabur Company.

2) Net profit ratio:Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as percentage. The two basic components of the net profit ratio are the net profit and sales. The net profits are obtained after deducting income-tax and, generally, non-operating expenses and incomes are excluded from the net profits for calculating this ratio. Thus, incomes such as interest on investments outside the business, profit on sales of fixed assets and losses on sales of fixed assets, etc are excluded. NP ratio is used to measure the overall profitability and hence it is very useful to proprietors. The ratio is very useful as if the net profit is not sufficient, the firm shall not be able to achieve a satisfactory return on its investment. Formula of Net Profit Ratio: Net Profit Ratio = (Net profit / Net sales) 100

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Particulars Net Profit (A) Net sales (B) (A/B) Net Profit ratio

Net Profit ratio of Colgate Company Mar '08 Mar '09 231.71 290.22 1,518.88 1,750.76 0.1525 0.1657 15.25 % 16.57 %

Mar 10 435.61 1,962.46 0.2219 22.19 %

Particulars Net Profit (A) Net sales (B) (A/B) Net Profit ratio

Net Profit ratio of Dabur Company Mar '08 Mar '09 316.77 373.55 2,093.63 2,408.33 0.1513 0.1551 15.13 % 15.51 %

Mar 10 504.34 3,365.66 0.1498 14.98 %

Analysis:
Net profit ratio shows that situation of overall profit of the Company. In above calculation, In 2008, 2009 and 2010, Net profit ratio of Colgate Company is 15.25 %, 16.57 % and 22.19 % respectively. Here we can see that over this periods, ratio is continuously increase till 2010 which is good position for Colgate Company. On the other hand, In 2008, 2009 and 2010, Net profit ratio of Dabur Company is 15.13 %, 15.51 % and 14.98 % respectively. Here we can see that in 2009, net profit ratio is increase but after that its decrease which is not good for company. In 2010, Colgate company achive good profit compare to Dabur Company.

3) Return on net worth Ratio:It is the ratio of net profit to share holder's investment. It is the relationship between net profit (after interest and tax) and share holder's/proprietor's fund. The two basic components of this ratio are net profits and shareholder's funds. Shareholder's funds include equity share capital, (preference share capital) and all reserves and surplus belonging to shareholders. Net profit means net income after

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payment of interest and income tax because those will be the only profits available for share holders. Formula of Return on Net worth Ratio: = [Net profit (After tax & Pref. Dividend) / Share holders fund] 100 Where; Share holders fund = Equity + Reserves Return on Net worth ratio of Colgate Company Particulars Mar '08 Mar '09 Net profit (After tax & Pref. Div.) (A) 231.71 290.22 Share holders fund (B) 162.21 216.30 1.4284 1.3417 (A/B) 142.84 % 134.17 % Return on Net worth ratio

Mar 10 4,356.10 330.22 1.3192 131.92 %

Return on Net worth ratio of Dabur Company Particulars Mar 08 Mar 09 Net profit (After tax & Pref. Div.) (A) 316.77 373.55 Share holders fund (B) 528.32 738.20 0.5996 0.5060 (A/B) Return on Net worth ratio 59.96 % 50.60 %

Mar 10 504.34 1275.98 0.3953 39.53 %

Analysis:
This ratio is of great importance to the present and prospective shareholders as well as the management of the company. Here we can see that RON of Colgate Company is 142.84 %, 134.17 % and 131.92 % respectively. We can see that RON of Colgate is continuously decrease till 2010 which is not good for Company. Because, here shareholder can not get more return compare to previous year. RON of Dabur Company is 59.96 %, 50.60 % and 39.53 % respectively. Here we can see that RON of Colgate is also continuously decrease till 2010 which is not good for Company.

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In 2010, Colgate Company gives more return to his shareholder compare to Dabur Company. The position of Colgate Company is much good compare to Dabur company.

Liquidity and Solvency Ratio:1) Debt Equity Ratio:Debt-to-Equity ratio indicates the relationship between the external equities or outsiders funds and the internal equities or shareholders funds. It is also known as external internal equity ratio. It is determined to ascertain soundness of the long term financial policies of the company. Formula of debt equity ratio: Debt Equity Ratio = Long Term Debts / Shareholders Funds Where, Long Term Debts = Secured and Unsecured Loans Debt equity ratio of Colgate Company Particulars Mar '08 Mar '09 Long Term Debts (A) 4.69 4.69 Shareholders Funds (B) 162.21 216.30 Debt equity ratio (A/B) 0.03 0.02

Mar 10 4.59 330.22 0.01

Debt equity ratio of Dabur Company Particulars Mar '08 Mar '09 Long Term Debts (A) 16.69 138.98 Shareholders Funds (B) 528.32 738.20 Debt equity ratio (A/B) 0.03 0.19

Mar 10 70.20 1275.98 0.06

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Analysis:
This ratio shows the relative amount of funds supplied to co. by outsiders and by owners. It also indicates the extent to which a co. has to depend upon outsiders for is financial requirements in long terms. Generally acceptable debt-equity ratio is 1:1. Here the ratio for 2008, 2009 and 2010 is 0.03:1, 0.02:1 and 0.01:1 respectively which is good for Colgate Company. Here debt equity ratio is impressively decreasing. So financially company is very strong. And the ratio for 2008, 2009 and 2010 is 0.03:1, 0.19:1 and 0.06:1 respectively which is good for Dabur Company. Here year on year, this ratio is increasing till 2010 which is not good performing in finance. Comparatively, this ratio of Colgate Company is impressive than Dabur which is shown that financially Colgate company is more strong than Dabur.

Management Efficiency Ratios:1) Inventory Turnover Ratio:Every firm has to maintain a certain level of inventory of finished goods so as to be able to meet the requirements of the business. But the level of inventory should neither be too high nor too low. This ratio tells how often a business inventory turns over during the course of the year. Because inventories are least liquid form of assets, a high inventory turnover ratio is generally positive. On the other hand, an unusually high ratio compared to the average for your industry could mean a business is losing sales because of inadequate stock on hand. If your business has sufficient assets tied up in inventory, tracking your turnover is critical to successful financial planning. If inventory is turning too slowly, it could indicate that it may be hampering your cash flow. Because his ratio judges annual inventory turns, it is usually conducted once a year.

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To judge whether the ratio of a firm is satisfactory or not, it should be compared over a period of time on the basis of trend analysis. It can also be compared with the level of other forms in that line of business as well as with industry average. Formula of Inventory Turnover Ratio: = Cost of Goods Sold / Avg. Inventory Where, C.O.G.S. = Sales Gross Profit

Inventory Turnover ratio of Colgate Company Particulars Mar '08 Mar '09 Cost of Goods Sold (A) 816.52 969.58 Avg. Inventory (B) 77.99 79.03 10.47 12.27 Inventory Turnover Ratio (A/B)

Mar 10 935.13 96.49 9.69

Inventory Turnover ratio of Dabur Company Particulars Mar 08 Mar 09 Cost of Goods Sold (A) 1230.68 1493.28 Avg. Inventory (B) 179.26 231.44 6.87 6.45 Inventory Turnover Ratio (A/B)

Mar 10 2029.31 345.01 5.88

Analysis:
Inventory ratio indicates the efficiency of a firms inventory management and also shows the rate at which stocks are converted into sales and then into cash. High inventory ratio is more preferable especially for consumer goods. Here Inventory ratio for 2008, 2009 and 2010 is 10.47, 12.27 and 9.69 respectively. Here we can see that this ratio become in decreasing till 2010. Here Inventory ratio for 2008, 2009 and 2010 is 6.87, 6.45 and 5.88 respectively. Here we can see that this ratio is also decrease continuously which is not good for Company.

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In 2010, Inventory ratio is decrease for both companies. But Colgate has higher ratio compare to Dabur. So we can say that Colgate has good inventory velocity of conversion of stock into sales.

3) Debtors Turnover Ratio:A concern may sell goods on cash as well as on credit. Credit is one of the important elements of sales promotion. The volume of sales can be increased a liberal credit policy. The effect of a liberal credit policy may result in tying up substantial funds of a firm in the form of trade debtors (or receivables). Trade debtors are expected to be converted into cash within a short period of time and are included in current assets. Hence, the liquidity position of concern to pay its short term obligations in time depends upon the quality of its trade debtors. The higher the value of debtors turnover the more efficient is the management of debtors or more liquid the debtors are. Similarly, low debtors turnover ratio implies inefficient management of debtors or less liquid debtors. It is the reliable measure of the time of cash flow from credit sales.

Formula of Debtors Turnover Ratio: Debtors Turnover Ratio = Total Sales (Net Sales) / Avg. Debtors Debtors Turnover ratio of Colgate Company Particulars Mar '08 Mar '09 Total Sales (A) 1,518.88 1,750.76 Avg. Debtors (B) 9.26 10.16 164.10 172.32 Debtors Turnover ratio (A/B)

Mar 10 1,962.46 10.45 188.37

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Debtors Turnover ratio of Dabur Company Particulars Mar '08 Mar '09 Total Sales (A) 2,093.63 2,408.33 Avg. Debtors (B) 80.72 106.41 25.84 22.63 Debtors Turnover ratio (A/B)

Mar 10 3,365.66 123.53 27.25

Analysis:
Debtors turnover ratio shows the rate at which cash is generated by the turnover of debtors. Here, Debtors turnover ratio for 2008, 2009 and 2010 is 164.10, 172.32 and 188.37. We can see that this ratio continuously increase till 2010 which is good for Colgate Company. And for Dabur Company, Debtors turnover ratio for 2008, 2009 and 2010 is 25.84, 22.63 and 27.25. Here we can see that debtors turnover ratio decrease in 2009 but after increase in 2010. In 2010, Debtors turnover ratio is higher in Colgate Company which shows that the more efficient is the management of debtors compare to Dabur Company.

3) Working Capital Turnover Ratio:Working capital turnover ratio indicates the velocity of the utilization of net working capital. The working capital turnover ratio measures the efficiency with which the working capital is being used by a firm. A high ratio indicates efficient utilization of working capital and a low ratio indicates otherwise. But a very high working capital turnover ratio may also mean lack of sufficient working capital which is not a good situation. Formula of Working Capital Turnover Ratio: = Sales (or Cost of Sales) / Net Working capital Where; Net Working Capital = Current assets Current liabilities

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Working Capital Turnover ratio of Colgate Company Particulars Mar '08 Mar '09 Sales (or Cost of Sales) (A) 1,518.88 1,750.76 Net Working capital (B) -104.68 4.05 -14.51 432.28 Working Capital Turnover ratio (A/B)

Mar 10 1,962.46 38.66 50.76

Working Capital Turnover ratio of Dabur Company Particulars Mar '08 Mar '09 Sales (or Cost of Sales) (A) 2,093.63 2,408.33 Net Working capital (B) -33.76 276.45 -62.02 8.71 Working Capital Turnover ratio (A/B)

Mar 10 3,365.66 305.50 11.02

Analysis:
Total assets turnover ratio indicates effective utilization of total assets in generating sales. Here fixed assets turnover ratio in 2008, 2009 and 2010 is -14.51, 432.28 and 50.76 respectively which stats that Colgate Company is utilizing total assets effectively to generate sales. In Dabur Company, ratio of 2008, 2009 and 2010 is -62.02, 8.71 and 11.02 respectively. Here we can say that primarily this company impressively attained a growth in it. Here we can says that Colgate is showing a better performance in utilizing net working capital with respect to sales.

Cash Flow Indicator Ratios:1) Earnings per Share (EPS):Earnings per share ratio (EPS Ratio) is a small variation of return on equity capital ratio and is calculated by dividing the net profit after taxes and preference dividend by the total number of equity shares. The earnings per share is a good measure of

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profitability and when compared with EPS of similar companies, it gives a view of the comparative earnings or earnings power of the firm. EPS ratio calculated for a number of years indicates whether or not the earning power of the company has increased. Formula of EPS: = ( Net profit Pref. Dividend ) / No. of shares Earnings per Share of Colgate Company Particulars Mar '08 Mar '09 Net profit (A) 231.71 290.22 Pref. Dividend (B) 0.00 0.00 231.71 290.22 (A-B) EPS [(A-B)/ No. of shares] 17.04 21.34

Mar '10 435.61 0.00 435.61 32.03

Earnings per Share of Dabur Company Particulars Mar '08 Mar '09 Net profit (A) 316.77 373.55 Pref. Dividend (B) 0.00 0.00 316.77 373.55 (A-B) EPS [(A-B)/ No. of shares] 3.67 4.32

Mar '10 504.34 0.00 504.34 5.81

Analysis:
This ratio gives a view of the comparative earnings or earnings power of the firm. In Colgate Company, EPS for year 2008, 2009 and 2010 is 17.04, 21.34 and 32.03 respectively. Here we can see that EPS in continuous increase till 2010 which is good for company. In Dabur Company, EPS for year 2008, 2009 and 2010 is 3.67, 4.32 and 5.81 respectively. Here EPS of this company also increase which is good.

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In 2010, we can see that EPS of Colgate Company is higher compare to Dabur Company. Colgate is good condition in earning power.

2) Dividend payout Ratio:Dividend payout ratio is calculated to find the extent to which earnings per share have been used for paying dividend and to know what portion of earnings has been retained in the business. It is an important ratio because ploughing back of profits enables a company to grow and pay more dividends in future. The payout ratio and the retained earning ratio are the indicators of the amount of earnings that have been ploughed back in the business. The lower the payout ratio, the higher will be the amount of earnings ploughed back in the business and vice versa. A lower payout ratio or higher retained earnings ratio means a stronger financial position of the company. Formula of Dividend payout Ratio: = Dividend per share / Earnings per Share Dividend payout Ratio of Colgate Company Particulars Mar 08 Mar 09 Dividend per share (A) 13.00 15.00 Earnings per Share (B) 17.04 21.34 0.76 0.70 Dividend payout Ratio (A/B)

Mar 10 5.00 32.03 0.16

Dividend payout Ratio of Dabur Company Particulars Mar 08 Mar 09 Dividend per share (A) 1.50 1.75 Earnings per Share (B) 3.67 4.32 0.41 0.41 Dividend payout Ratio (A/B)

Mar 10 0.00 5.81 0.00

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Analysis:
Dividend Payout ratio is indicator of the amount of earnings that have been ploughed back in the business. In Colgate Company, ratio is 0.76, .070 and 0.16 respectively for year 2008, 2009 and 2010. We have seen that payout ratio decreasing year to year till 2010 which is good for strong financial condition. And payout ratio for Dabur Company in year 2008, 2009 and 2010 is 0.41, 0.41 and 0.00 which implies decreasing scale that is also good for financial strong performance. Comparatively Dabur Company is impressively better that Colgate because Dabur Company use whole fund for his strong financial perpose.

3) P/E Ratio:Price earnings ratio (P/E ratio) is the ratio between market price per equity share and earning per share. The ratio is calculated to make an estimate of appreciation in the value of a share of a company and is widely used by investors to decide whether or not to buy shares in a particular company. Generally, higher the price earning ratio the better it is. If the P/E ratio falls, the management should look into the causes that have resulted into the fall of this ratio.

Formula of P/E Ratio: = Market value per share / EPS P/E Ratio of Colgate Company Particulars Mar '08 Mar '09 Market value per share (A) 382.35 470.75 EPS (B) 17.04 21.34 22.44 22.06 P/E Ratio (A/B)

Mar 10 675.25 32.03 21.08

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Particulars Market value per share (A) EPS (B) P/E Ratio (A/B)

P/E Ratio of Dabur Company Mar 08 Mar 09 109.90 98.70 3.67 4.32 29.95 22.85

Mar 10 158.60 5.81 27.30

Analysis:
Price earnings ratio helps the investor in deciding whether to buy or not to buy the shares of a particular company at a particular market price. Ratio of Colgate Company for year 2008, 2009 and 2010 is 22.44, 22.06 and 21.08 respectively. Here we say that this ratio is decreasing year to year which is worse for Company. Another hand, ratio of Dabur Company for 2008, 2009 and 2010 is 29.95, 22.85 and 27.30 respectively. Here we see that P/E ratio was decreased but after that its become increasing that is good for Company. Dabur has strong P/E ratio compare to Colgate. So Dabur can easily attract investor to invest in his company.

4) Book value per share:Equals to the book value of a company divided by the number of shares outstanding. Book value is a good way of judging if the stock market value is reasonable compared to company's true value. Market value is usually higher than the book value. A good indication of safer investment is if the stocks market capitalization is close to the book value. Market value is what the investment community's expectations are and book value is based on costs and retained earnings. A thing to remember is that during bull markets the stock price is more likely to trade much higher than book value, and in a bear market the two value's may be much closer.

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Formula of Book value per share: = Net worth / No. of Share Where, Net worth = Equity + Reserve & Surplus Book value per share of Colgate Company Particulars Mar '08 Mar '09 Equity 13.60 13.60 Plus: Reserve & Surplus 148.61 202.70 Networth (A) 162.21 216.30 Book value per share [A/ no. of share] 11.93 15.90

Mar 10 13.60 326.11 339.71 24.98

Book value per share of Dabur Company Particulars Mar '08 Mar '09 Equity 86.40 86.51 Plus: Reserve & Surplus 441.92 651.69 Networth (A) 528.32 738.20 Book value per share [A/ no. of share] 6.11 8.53

Mar 10 86.76 1197.60 1275.98 14.71

Analysis:
In above calculation, Book value of Colgate for year 2008, 2009 and 2010 is 11.93, 15.90 and 24.98 respectively. Book value of this company is continuously increasing till 2010 which says good for company. Book value of Dabur Company for 2008, 2009 and 2010 is 6.11, 8.53 and 14.71 respectively. Here we can say that book value of this company is also continuously increasing till 2010. So both companies are growing impressively that is good for company and investors.

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5) Sales Growth:Formula of Sales Growth: = [(Sales Current Year Sales Previous Year) / Sales Previous Year] 100 Sales Growth of Colgate Company Particulars Mar 08 Mar 09 Sales Current Year 1,518.88 1,750.76 Less: Sales Previous Year (B) 1,331.99 1,518.88 Total (A) 186.89 231.88 14.03 % 15.27 % Sales Growth (A/B)

Mar 10 1,962.46 1,750.76 211.7 12.09 %

Sales Growth of Dabur Company Particulars Mar '08 Mar '09 Sales Current Year 2,093.63 2,408.33 Less: Sales Previous Year (B) 1,745.15 2,093.63 Total (A) 348.48 314.70 19.97 % 15.03 % Sales Growth (A/B)

Mar 10 3,365.66 2,408.33 957.33 39.75 %

Analysis:
Sales growth is also useful for particular FMCG Sector. Sales growth of Colgate Company for year 2008, 2009 and 2010 is 14.03 %, 15.27 %, and 12.09 %. Sales Growth of this company is decrease in 2010 compare to 2009 which is worse for Company. Sales growth of Dabur Company for year 2008, 2009 and 2010 is 19.97 %, 15.03 % and 39.75 %. Here we have seen that growth of the sales in very impressive compare to Colgate which is good for Dabur for future growth.

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Conclusion:
Fundamental analysis can be valuable, but it should be approached with caution. If you are reading research written by a sell-side analyst, it is important to be familiar with the analyst behind the report. We all have personal biases, and every analyst has some sort of bias. As per my analysis, we can say that FMCG sector is tremendous growth rate with relevant other growing sectors. As per analysis of my company, these companies are launched many product for improve its growth and change lot of structure. They increase its research and development expenses for stay in competition and give maximum benefits to his investors.

Suggestion:
As per my analysis, I suggest to investors that that invest their money in Colgate and Dabur. They can buy both companies share because both companies are good as fundamentally. But Colgate is stronger than Dabur. Both companies are strong in FMCG sector.

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Annexure:
List of Person Contacted in Organization:

Sr. No. 1 2 3 4 5 6

Name
Mr. Nipun Shah Mrs. Jigisha Reliawala Mr. Hardik Gandhi Mr. Rohan Mehta Mr. Saurabh Shah Mrs. Trupti Raj

Designation
Head of Department Relationship Manager Research Exe. Research Manager Compliance Manager HR Manager

Contact No.
3055555-2100 3055555-7060 3055555-2015 3055555-7014 3055555-2105 3055555-7133

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Bibliography:
Website:
http://in.advfn.com/StockExchanges/about/NSE/NationalStockExchangeIndia.html http://in.advfn.com/StockExchanges/about/BSE/BombayStockExchange.html www.scribd.com http://info.shine.com www.docstoc.com www.moneycontrol.com www.bseindia.com www.dabure.com www.colgate.com www.jainam.com www.accountingformanagment.com

I also used Capitaline software for collacting data.