Gillette analysis
2019
During 2019, Company rarely had any photos other than the advertisements and products pictures. This not only shows professionalism from their side but is efficient in showing the information without hiding any facts and figures.
In ‘Board of directors’, the pictures of the management are small and not overly sized. This shows and reflects a commitment to a more modest approach to their annual report. Though the design can be improved, more importance to their background and information is given. This is the case for all 5 years
MDA (3 pages)
1. The 2019 report highlights economic challenges in India, emphasizing FMCG sector growth, risk management, and HR initiatives, without explicit mention of capex plans or geographic expansion.
2. The report addresses the impact of a slower economy, emphasizing positive FMCG sector outlook driven by a rising young population, urbanization, and government initiatives, but lacks details on capex or segment expansion.
3. Risk management measures, compliance focus, and security programs are detailed, but specific capex plans, business segment expansion, or geographic expansion strategies are not explicitly discussed.
4. The report underscores the company's competitive HR strategies, talent attraction, and development efforts, but there's no mention of capex initiatives, new business segments, or geographic expansions.
5. The document doesn't provide a comprehensive view of the company's 5-year strategy, as it primarily focuses on managing risks, ensuring compliance, and sustaining performance in a challenging economic environment, with minimal details on capex or expansion plans.
Ratio analysis
Current Ratio: 1.6943, indicating a solid liquidity position before the pandemic.
Trade Receivables Turnover Ratio: 10.4137, showing the company was collecting receivables at a faster rate in a pre-pandemic economy.
Net Profit Ratio: 0.1349, reflecting the company's profitability before the pandemic-induced disruptions.
Auditors report:
1. True and Fair View: The auditors have provided an unqualified opinion, affirming that the financial statements offer a true and fair view of the company's financial position as of June 30, 2019, in compliance with Indian Accounting Standards and other generally accepted accounting principles in India.
2. Revenue Recognition: Revenue recognition has been highlighted as a key audit matter, particularly the estimation of trade discounts and rebate schemes, which is considered judgmental due to variable terms with customers. However, through detailed audit procedures, the auditors did not raise any concerns that would affect the overall opinion.
3. Tax Risks: Uncertain tax positions were also identified as a key audit matter due to the inherent judgments involved in determining provisions for these uncertainties. Nonetheless, the auditors' extensive procedures suggest that the companys tax provisions and related controls are adequately managed.
4. Financial Controls: The report emphasizes the company's responsibility for maintaining adequate internal financial controls and the auditors' responsibility for evaluating these controls. No significant deficiencies were reported, indicating that the company has a sound internal control system.
Overall, the audit report for 2019 suggests that Gillette India Limited's financial statements are reliable, and the company has effectively managed key areas of audit significance, such as revenue recognition and tax provisions.
2020
There are still no irrelevant photos
MDA (3 pages)
1. The 2020 report acknowledges the economic downturn due to the pandemic, highlighting government reforms, but lacks details on capex plans, segment expansion, or geographic expansion.
2. Despite short-term challenges, the long-term FMCG sector outlook is optimistic, with the report emphasizing government initiatives, digital penetration, and resilience, but without explicit capex or expansion strategies.
3. Risk management measures, compliance focus, and security programs are detailed, but specifics on capex plans, business segment expansion, or geographic expansion strategies are not explicitly discussed.
4. The report underscores competitive HR strategies, talent attraction, and development efforts, with virtual onboarding initiatives, but doesn't delve into capex initiatives, new business segments, or geographic expansions.
5. The document provides a comprehensive view of risk management, financial performance, and HR initiatives, but lacks specific details on the company's 5-year strategy, capex plans, or expansion goals.
Ratio analysis
Current Ratio: 2.0179, a notable increase possibly due to an increase in current assets like cash or a decrease in current liabilities as companies often hold onto cash to weather uncertain periods.
Inventory Turnover Ratio: 3.5091, showing a decrease in efficiency, which may result from disrupted supply chains or changes in consumer demand due to the pandemic.
Net Profit Ratio: 0.1362, slightly higher than in 2019, which is surprising given the economic downturn and the fact that Gillette is a consumer good, this could be the result of cost-cutting measures or other adjustments in response to the pandemic.
Auditors report:
1. Unqualified Audit Opinion: The auditors have expressed an unqualified opinion on the financial statements, indicating they believe these statements provide a true and fair view of the company's financial condition in accordance with applicable accounting standards and the Companies Act, 2013.
2. Corporate Governance Compliance: The auditors certify that Gillette India complied with the conditions of Corporate Governance as per the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, during the year ended June 30, 2020.
3. Revenue Recognition Attention: Revenue recognition, particularly regarding discounts and incentives, was identified as a key audit matter, yet the auditors' procedures did not find issues significant enough to affect their opinion.
4. Tax Position Complexity: The company is subject to various tax risks and the resolution of these can be complex and long-drawn. However, the auditors' scrutiny of management's judgment and provisions for these uncertainties did not result in an adverse opinion.
2021
There are still no irrelevant photos, though a lot of effort has gone in design and making it look aesthetically pleasing
MDA (2 pages)
1. The report discusses the economic impact of the COVID-19 pandemic in 2020, with signs of recovery, but lacks explicit details on capex plans, business segment expansion, or geographic expansion.
2. The long-term FMCG sector outlook is positive, citing government initiatives, digital penetration, and resilience, yet specifics on capex or expansion strategies are not explicitly addressed.
3. Detailed risk management measures, compliance focus, and security programs are outlined, but specific capex plans, business segment expansion, or geographic expansion strategies are not highlighted.
4. The document emphasizes competitive HR strategies, talent attraction, and development efforts, including virtual internships, but does not delve into capex initiatives, new business segments, or geographic expansions.
5. The comprehensive report provides insights into risk management, financial performance, and HR initiatives, but lacks specific details on the company's 5-year strategy, capex plans, or expansion goals.
Ratio analysis
Inventory Turnover Ratio: Decreased from 3.5091 in 2020 to 3.2682 in 2021. This reduction suggests that the company was either slower in selling its inventory or had more inventory on hand throughout the year. A lower inventory turnover can indicate excess stock, less efficient sales, or that inventory is not being managed as effectively as it could be. This might require the company to review its inventory levels, sales forecasts, and market demand to improve this ratio in the future. This can be due to covid 19 being at its peak. This could suggest lingering effects of the pandemic, such as supply chain issues, changes in consumer demand, or the company's strategic decisions to hold more inventory in response to uncertainty in supply.
Debt to Capital Employed Ratio: Remained at 0 from 2020 to 2021, indicating that the company did not have long-term debt during these years. This suggests a conservative financial strategy with low reliance on debt financing.
Auditors’ opinion:
The auditor's report for Gillette India Limited for the fiscal year ending June 30, 2021, indicates that the financial statements provide a true and fair view of the company's financial condition and operations, complying with the accounting standards and legal requirements. There is no indication of an adverse opinion or significant issues regarding the recognition of income and expenses. The auditors highlighted revenue recognition and uncertain tax positions as key audit matters, which were areas of focus due to their complexity and judgmental nature, but these did not lead to an adverse opinion. The company maintained proper books and there were no discrepancies found that would materially affect the financial statements.
The opinion suggests that the company's financial practices, as they relate to the audited financial statements, are sound and that there are adequate internal controls over financial reporting. The auditors also confirm the company's compliance with relevant legal provisions concerning financial disclosures and managerial remuneration. Overall, the auditor's report provides a positive assessment of Gillette India's financial practices for 2021.
2022
There are still no irrelevant photos, though a lot of effort has gone in design and making it look aesthetically pleasing
MDA (28 pages)
The length of Gillette India Limited's Management Discussion and Analysis (MD&A) sections varies over time, indicating that 2022 was probably a critical year with strategic changes or difficulties that called for a thorough examination and an increased focus on environmental sustainability initiatives. The ensuing shortening in 2023 may signify a return to a more stable operational environment or a successful resolution of the problems addressed the year before.
1. The report acknowledges the challenges of a volatile operating environment, outlines the impact of the pandemic, and highlights government initiatives contributing to economic recovery, but does not specify capex plans, business segment expansion, or geographic expansion.
2. Despite macroeconomic challenges, the company reports sales growth of 12%, attributes it to a strong product portfolio, improved retail execution, and strategic choices. The focus remains
on integrated strategies, but there's no explicit mention of capex or expansion plans.
3. The document emphasizes risk management through a dedicated committee, compliance with legal requirements, and security measures but lacks details on capex initiatives, business segment expansion, or geographic expansion.
4. Environmental sustainability efforts are outlined, including zero waste to landfill and reductions in carbon emissions. However, specific details about capex plans, new business segments, or geographic expansions are not provided.
5. The report forecasts positive economic growth, outlines business performance, risk management, and sustainability efforts but lacks explicit information on capex plans, business segment expansion, or geographic expansion for the next five years.
Ratio analysis (2021-2022)
Quick Ratio: Increased from 0.7639 in 2021 to 0.8721 in 2022. This indicates an improvement in the company's ability to meet its short-term obligations without relying on the sale of inventory.
Total Debt to Total Equity Ratio: Increased from 0.5176 in 2021 to 0.6325 in 2022. This suggests that the company has increased its leverage, possibly taking on more debt in comparison to its equity.
Trade Receivables Turnover Ratio: Decreased from 10.3416 in 2021 to 9.9320 in 2022. This reduction might indicate that the company is taking longer to collect its receivables, which could impact cash flow.
2023
There are still no irrelevant photos, though a lot of effort has gone in design and making it look aesthetically pleasing
MDA (8 pages)
Economic Outlook and Performance: Indian economy positive; 10% sales growth, 23% profit after tax; global inflation decline; resilient workforce during challenges.
Strategic Choices and Integrated Approach: Integrated strategy focuses on product, brand, productivity, disruption, and agility; reinforcement for balanced growth and value creation.
Segment Performance and Innovation: Grooming business records highest-ever market share; successful initiatives in blades, razors, and Braun; Oral-B sustains growth through innovation.
Risk Management and Sustainability: Robust risk management, compliance adherence; commitment to corporate social responsibility; emphasis on environmental sustainability and zero-manufacturing-waste-to-landfill.
Technology, Collaboration, and Acknowledgments: Leverage of advanced technology; no CapEx plans mentioned; continuous innovation through global collaboration; acknowledgment of stakeholder support during challenges.
Ratio analysis (2022-2023)
Current Ratio: Increased from 1.4347 in 2022 to 1.5320 in 2023. This improvement indicates a stronger liquidity position, suggesting the company is more capable of covering its short-term obligations with its current assets.
Interest Coverage Ratio: Increased significantly from 40.0627 in 2022 to 61.8623 in 2023. This suggests that the company's earnings are much more sufficient to cover its interest expenses, indicating improved profitability or reduced finance costs.
Working Capital Turnover Ratio: Decreased from 7.8192 in 2022 to 5.7068 in 2023. This decrease might imply either a reduction in sales or an increase in working capital, suggesting a potential inefficiency in utilizing working capital to generate sales.
These patterns show how COVID-19 affected organizations broadly: liquidity became a top concern, supply chain disruptions and shifts in customer behavior impacted operational efficiencies, and active financial management preserved profitability.
Auditors report:
1. Unqualified Opinion: The auditors have expressed an unqualified opinion, stating that the financial statements present a true and fair view in accordance with the applicable accounting standards and the Companies Act, 2013. This indicates no adverse findings.
2. Revenue Recognition Scrutiny: Revenue recognition, especially around discounts, incentives, and rebates, was a key audit matter due to its complexity and judgment required, but it was sufficiently addressed through audit procedures, indicating no significant issues were found.
3. Sufficient Audit Evidence: The auditors confirm they have obtained enough appropriate audit evidence to provide a basis for their opinion, suggesting thorough examination and reasonable assurance of the financial statements' accuracy.
4. Internal Controls and Compliance: The report affirms the company's internal financial controls regarding financial reporting and compliance with legal requirements, with no material weaknesses reported.
In summary, the auditor's report for 2023 does not indicate an adverse opinion. It suggests that Gillette India's financial statements for the year are reliable and that the company has adequate internal controls in place to ensure accurate financial reporting.
Share price graph for 5 years
2019: The stock shows a stable trend with a slight uptrend towards the end of the year, indicating steady investor confidence and potentially good company performance or favorable market conditions during that period.
2020: There is a sharp decline around the beginning of 2020, which could correlate with the global financial market downturn due to the COVID-19 pandemic. The market then seems to recover slightly but remains volatile throughout the year, indicating uncertainty and possibly reflecting the impact of the pandemic on the company's operations.
2021: The chart shows that the stock price begins to stabilize and gradually increase, suggesting recovery from the previous year's volatility and possibly improved company performance or market conditions.
2022: Starting in mid-2022, there is a notable upward trend, which could suggest significant positive developments for the company, such as strong financial results, successful product launches, or favourable market dynamics.
2023: The trend continues upward with higher peaks, implying continued investor confidence and possibly ongoing positive performance by the company or bullish market sentiment.
Overall Trends and Insights: -
Liquidity: The company has generally maintained or improved its liquidity over the years, as seen in the current and quick ratios.
Leverage and Debt Management: There has been an increase in leverage in 2022, but overall, the company shows a conservative approach towards long-term debt.
Operational Efficiency: While there are fluctuations in turnover ratios (receivables, inventory, working capital), these changes are not drastic, indicating a stable operational efficiency with minor variations.
Count the irrelevant photos interpretation for 5 years: Since there are no irrelevant photos for all 5 years:
1. Focus on Professionalism: The absence of irrelevant images suggests a focus on professionalism and a commitment to presenting information in a clear and straightforward manner, avoiding potential distractions.
2. Efficiency of Communication: By excluding irrelevant imagery, the company is likely prioritizing efficient communication of financial and strategic information, which is the core purpose of annual reports.
3. Brand Image: The improvement in graphic design could be a strategic move to strengthen the company's brand image. Good design can enhance readability, help communicate key messages more effectively, and reflect the company's attention to detail and quality standards.
Competitors:
Gillette does not have director competitor which provides a proper men’s grooming range. Though under PnG, there are product-to-product competition such as Dabur and Colgate for Oral care and Hindustan Unilever for personal care product.