Pioneer Embroidery Limited

Financial Statement Analysis of Pioneer Embroidery Limited

A

Summer internship Programme

On

“FINANCIAL STATEMENT ANALYSIS OF PIONEER EMBROIDERY LIMITED, SURAT"

IN PARTIAL FULFILMENT OF THE

REQUIREMENT OF THE AWARD FOR THE DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Submitted toMR. VARUN DHINGRA

(Assistance Professor)

Submitted by

SAHIL DHANANI

Enrollment No. 147040592002

M.B.A 3rd SEMESTER III

Bhagwan Mahavir College of Management

M.B.A PROGRAMMEAffiliated to Gujarat Technological University

AhmadabadJune-July 2015


Preface

As a part of this two year programmed leading to Masters Degrees in Business

Administration from Bhagwan Mahavir College of Management (MBA),

Bharthana Surat, Affiliated by GTU (Gujarat Technology University), curriculum

of which includes both theoretical orientation in specialized areas.

In fulfillment of these objectives, I had observed the organization. I made a report

on ‘‘A STUDY ON FINANCIAL STATEMENT ANALYSIS OF PIONEER

EMBROIDERY LIMITED, VALSAD’’. I have put my level best to prepare my

project an error free project. Every effort has been made to offer the most

authenticate position with accuracy.


Acknowledgement

“No man is indispensable but there are certain morals without whom the quality

of work suffers. Their guidance becomes indispensable in acquiring quality

results.”

To begin with, I would like to express my deep sense of gratitude to my college

Bhagwan Mahavir College of Management and Gujarat Technological

University for providing me an opportunity to do my Summer Internship Project

Report.

Secondly, I would like to express my sincere gratitude to my project guide

Mr. Varun Dhingra for supporting me in this project. I truly appreciate the

guidance that they presented to me. Without their priceless management,

encouragement and assistance, this project would have not been possible.

I would also have a great pleasure in thanking the company ‘Pioneer

Embroidery Ltd., Valsad and Wasim & Co.’ who has helped me in finding the

information relating to my project.

Thanking you,

SAHIL DHANANI

DECLARATION


I hereby declare that the Summer Internship Project (SIP) Report titled ‘‘A

STUDY ON FINANCIAL STATEMENT ANALYSIS OF PIONEER

EMBROIDERY LIMITED, VALSAD ’’ is based on original piece of work done by

me under the guidance of Mr. Varun Dhingra (Assistant professor) of Bhagwan

Mahavir College of Management (MBA), Bharthana, Surat for the fulfillment of

degree of Master of Business Administration and whatever information has been

taken from any source had been duly acknowledge.

I further declare that the personal data & information received from any

respondent during survey has not been shared with any one and is used for

academic purpose only.

Date:

Place:

Sahil Dhanani

Enrollment No: 147040592002

EXECUTIVE SUMMARY


It has been a good learning experience to do our project training in the well

known & prestigious organization, as a part of MBA program. The study has

been made an attempt to gain better understanding about the analysis of the

Financial reports of Pioneer Embroidery Limited, Valsad.

The main objective of the project was to study the financial position, performance, and

changes in the financial position of a company which will be useful in making future

decisions. Also, to study the Ratio Analysis, Comparative Statement and Common size

statement of the company. On the whole it was a wonderful experience & a great learning

opportunity. The complete project was an eye opener which no book taught us. There

were times when we were disheartened & disappointed, but there were times when things

went Right & made us feel proud. Success does not come at once; we have to start right

from the scratch & struggle our way through all hardships with courage & determination.

INDEX


SR. NO PARTICULARS PAGE NO

Preface

Acknowledgement

Declaration

Executive Summary

PART-I GENERAL INFORMATION

1 Industry profile

Indian Handicraft Industry

Country-Wise Exports of Handicrafts

Value Adding Chain in Handicrafts

Global Scenario of Embroidery Market

SWOT Analysis of the Indian Handicrafts Industry

1

2

7

8

9

12

2 Company Profile 13

3 Product Profile 17

4 History of Pioneer Embroidery Limited 22

PART-II INTRODUCTION OF THE STUDY5 Literature review 26

6 Research Methodology

Formulation of Problem

Research Objectives

Research Design

Data Collection Method

Data Collection Period

Limitations of the Study

Analytical Tools

29

7 Data Analysis and Interpretation

Ratio Analysis

o Liquidity Ratio

o Activity Ratio

35


o Solvency Ratio

o Profitability Ratio

Comparative Statement Analysis

Common Size Analysis

74

87

9 Findings 9910 Conclusion 100

11 Bibliography 101

12 Annexure

Balance Sheet of the Company

Profit and Loss of the Company

102

Industry Profile


mbroidery is the handicraft of decorating fabric or other materials with

needle and thread or yarn. Embroidery may also incorporate other

materials such as metal strips, pearls, beads, quills, and sequins.

Embroidery is most often used on caps, hats, coats, blankets, dress shirts,

denim, stockings, and golf shirts. Embroidery is available with a wide variety of

thread or yarn color.

EThe basic techniques or stitches on surviving examples of the earliest

embroidery—chain stitch, buttonhole or blanket stitch, running stitch, satin stitch,

cross stitch—remain the fundamental techniques of hand embroidery today.

Origins

Embroidery has been dated to the Warring States period (5th-3rd century BC) of

ancient China. The process used to tailor, patch, mend and reinforce cloth

fostered the development of sewing techniques, and the decorative possibilities

of sewing led to the art of embroidery. In a garment from Migration period

Sweden, roughly 300–700 CE, the edges of bands of trimming are reinforced

with running stitch, back stitch, stem stitch, tailor's buttonhole stitch, and whip

stitching, but it is uncertain whether this work simply reinforced the seams or

should be interpreted as decorative embroidery.

The remarkable stability of basic embroidery stitches has been noted:

It is a striking fact that in the development of embroidery ... there are no changes

of materials or techniques which can be felt or interpreted as advances from a

primitive to a later, more refined stage. On the other hand, we often find in early

works a technical accomplishment and high standard of craftsmanship rarely

attained in later times.

Indian Handicrafts Industry

https://en.wikipedia.org/wiki/Cross_stitch

https://en.wikipedia.org/wiki/Satin_stitch

https://en.wikipedia.org/wiki/Running_stitch

https://en.wikipedia.org/wiki/Buttonhole_stitch

https://en.wikipedia.org/wiki/Chain_stitch

https://en.wikipedia.org/wiki/Embroidery_stitch

https://en.wikipedia.org/wiki/Yarn

https://en.wikipedia.org/wiki/Sequin

https://en.wikipedia.org/wiki/Quill

https://en.wikipedia.org/wiki/Bead

https://en.wikipedia.org/wiki/Pearl

https://en.wikipedia.org/wiki/Metal


https://en.wikipedia.org/wiki/Sewing_needle

https://en.wikipedia.org/wiki/Textile

https://en.wikipedia.org/wiki/Handicraft


“I

ndia is a creative hub for embroidery with fairy tale motifs patterning the surface of cloth.”

India is one of the important suppliers of handicrafts to the world market. The

Indian handicrafts industry is highly labour intensive cottage based industry and

decentralized, being spread all over the country in rural and urban areas.

Numerous artisans are engaged in crafts work on part-time basis. The industry

provides employment to over six million artisans (including those in carpet trade),

which include a large number of women and people belonging to the weaker

sections of the society.

In addition to the high potential for employment, the sector is economically

important from the point of low capital investment, high ratio of value addition,

and high potential for export and foreign exchange earnings for the country. The

export earnings from Indian handicrafts industry for the period 1998-99 amounted

to US$ 1.2 billion.

Although exports of handicrafts appear to be sizeable, India’s share in world

imports is miniscule. It is a sector that is still not completely explored from the

point of view of hidden potential areas. India, a country with 26 states and 18

languages and more than 1500 dialects offers an enormous range of handicrafts

from each of the states. Major centres in Uttar Pradesh are Moradabad also

known as the "Peetalnagari" (City of Brass), Saharanpur for its wooden articles, Ferozabad for Glass. The North Western state of Rajasthan has to offer

the famous Jaipuri quilts, Bagru and Sanganer printed textiles and wooden and wrought iron furniture from Jodhpur. The coastal state of Gujarat comes


with embroidered articles from Kutch. Narsapur in Andhra Pradesh is famous

for its Lace and Lace goods. But this is only a small part of the total product

range. India offers much more.

Handicrafts are classified into two categories :

Articles of everyday use

Decorative items

The craftsmen use different media to express their originality. The diversity of the

handicrafts is expressed on textiles, metals – precious and semi-precious, wood,

precious and semi-precious stones, ceramic and glass.

Textile based handicrafts:

Hand printed textiles including block and screen printing, batik,

kalamkari (hand printing by pen) and bandhani (tie and die) are used in products

ranging from bed-covers to sheets, dress material to upholstery and tapestry.

The famous embroidered articles of silk and cotton, often embellished with

mirrors, shells, beads, and metallic pieces are also found in India. Embroidery is

done too on leather, felt and velvet etc. This segment of the industry accounts

for almost half a million strong employment in addition to a large number of

designers, block makers, weavers and packers involved in the trade.

Clay, Metal and Jewellery:

Brass, copper, bronze, bell metal are used for a variety of wares and in a

variety of finishes. Scintillating ornaments are available in a wide


range of patterns, styles and compositions. Made from precious

metals, base metals, precious and semi-precious stones; these ornaments have

traditional as well as modern styles.

Woodwork:

Wooden articles in India range from the ornately carved to the absolutely

simple. One can find toys, furniture, decorative articles, etc. bearing

the art and individuality of the craftsman. India is known particularly for its

lacquered wood articles.

Stone Craft:

The intricately carved stoneware made of marble, alabaster or soapstone,

etc., inlaid with semiprecious stones carry on the heritage of Indian

stone crafts.

Glass and Ceramic:

Glass and ceramic products are a fast upcoming segment in the

handicrafts from India. The age-old production process of mouth-blowing

the glass instills a nostalgic feeling. The varied shapes of ceramic and

glass in a number of colours, would appeal to Western aesthetics while

retaining the Indian touch.

Craft concentration Areas:


A wide range of handicrafts are produced all over Indian artmetalware /

EPNS ware, wood carvings and other wooden artwares, imitation

jewellery, handprinted textiles, shawls as artwares, embroidered goods,

lace and lace goods, toys, dolls, crafts made of leather, lacquerware,

marble crafts etc. Although it is difficult to limit a specific place for the

particular craft, the following places are listed for their particular crafts.

Artmetalware : Moradabad, Sambhal, Aligarh, Jodhpur, Jaipur,

Delhi, Rewari, Thanjavur, Madras, Mandap,

Beedar, Kerala & Jagadhari, Jaselmer

Wooden Artwares

: Saharanpur, Nagina, Hoshiarpor, Srinagar,

Amritsar, Jaipur, Jodhpur, Jagdalpur, Bangalore,

Mysore, Chennapatna, Madras, Kerala &

Behrampur (WB)

Handprinted Textiles & Scarves

: Amroha, Jodhpur, Jaipur, Farrukhabad, Sagru &

Sanganer

Embroidered goods

: Kutch (Gujarat), Jaisaimer, Baroda, Lucknow,

Jodhpur, Agra, Amritsar, Kullu, Dharmshala /

Chamba & Srinagar

Marble & Soft Stone Crafts

: Agra, Madras, Baster, Jodhpur

Papier Mache Crafts

: Kashmir, Jaipur

Terracotta : Agra, Madras, Baster, Jodhpur


Zari & Zari Goods

: Rajasthan, Madras, Baster

Imitation Jewellery:

: Delhi, Moradabad, Sambhal, Jaipur, Kohima

(Tribal)

Artistic Leather Goods

: lndore, Kolhapur, Shanti Niketan (WB)

Selected crafts pockets for achieving export goal:

Although each crafts pockets has its particular problems, a few selected craft

pockets are identified based on their past performance for immediate remedial

attention to stimulate a quantum in exports of handicrafts in the coming years.

Moradabad(UP)

: For Artmetalwares and imitation jewellery

Saharanpur (UP)

: For Wooden handicrafts & Wrought iron handicrafts

Jodhpur (Raj.)

: For Wooden, Wrought Iron and Sea Shell handicrafts

Narsapur(A.P.) : For Lace and Lace goods

COUNTRY-WISE EXPORTS OF HANDICRAFTS


The major buyers for handicrafts (other than carpets) are as under:

o Art Metalwares : U.S.A., Germany, U.K. & Italy

o Wood Wares : U.S.A., U.K., Germany & France

o Hand Printed &

Textiles & Scarves

: U.S.A., U.K. , Germany & Canada

o Embroidered &

Crochetted Goods

: U.S.A., Saudi Arabia, U.K., Germany

o Shawls as

Artwares

: Saudi Arabia, U.S.A. Japan & U.K

o Zari & Zari goods : U.K. U.S.A., Japan & Saudi Arabia

o Imitation

Jewellery

: U.S.A., U.K., Saudi Arabia & Germany

o Miscellaneous

Handicrafts

: U.S.A., Germany, U.K. & France

Value Adding Chain in Handicrafts

Australia2%

Canada4%France

5%

Germany11%Italy

4%Japan

4%Netherlands3%

Saudi Arabia2%

Switzerland1%

U.S.A.32% U.K.

11% Others23%

Major Destinations for Indian Handicrafts(% share in 1998-99)


Global Scenario of Embroidery Market

1Identification of market opportunities2Prototype design and development / adaption and refinement3Test marketing4Upgrading equipping facilities5Securing inputs6Entrepreneurial hiring, training, managing7Production, quality control and packaging8Costing and pricing9Physical distribution10Export Market DevelopmentAustralia

2%

Canada4%France

5%

Germany11%Italy

4%Japan

4%Netherlands3%

Saudi Arabia2%

Switzerland1%

U.S.A.32% U.K.

11% Others23%

Major Destinations for Indian Handicrafts(% share in 1998-99)


In the changing world scenario, craft products exported to various countries form

a part of lifestyle products in international market. The impact is due to the

changing consumer taste and trends. In view of this it is high time that the Indian

handicraft industry went into the details of changing designs, patterns, product

development, requisite change in production facilities for a variety of materials,

production techniques, related expertise to achieve a leadership position in the

fast growing competitiveness with other countries.

The 6 million craft persons who are the backbone of Indian Handicraft Industry as

provided with inherent skill, technique, traditional craftsmanship but that is quite

sufficient for primary platform. However, in changing world market these craft

persons need an institutional support, at their places i.e. craft pockets for value

addition and for the edge with other competitors like China, Korea, Thailand etc.

Graph 1: Country wise Export of Handicrafts

The German handicrafts and Giftware Market

Austra

lia

Canad

a

France

German

yIta

lyJa

pan

Netherl

ands

Saudi

Arabia

Switzerl

and

U.S.A

.U.K

.

Others

0

200

400

600

800

1000

1200

1400

1600

1800

69151

205

466

164 171 117108 57

1440

453

954

79177 235

536

190 195135 122

68

1642

539

1139

Countrywise Export of Handicrafts

1997-981998-99

Rs. i

n Cr

ores


With over 82 million inhabitants, Germany is the largest market for giftware and

handicrafts items in Europe. A member of and situated within the European

Union, Germany is supplied with giftware and handicrafts from Germany as well

as the surrounding European countries such as France, Italy, Switzerland and

the United Kingdom and from all other parts of the world: Russia, Latin America,

Africa and Asia.

The size of the total German giftware and handicrafts market varies according to

the definition of giftware and handicrafts. With its present size around DM 29.5

billion it corresponds to a broad definition of giftware and handicrafts that

includes the following items: home furnishings, artmetalware, table accessories,

Christmas decoration, woodware and furniture, imitation jewellers, artificial

flowers/plants, scents/cosmetics, sweets, toys/computer games, books,

discs/videos, watches/jewellery, certain apparel/textile items and others. The

German giftware and handicrafts market grew from DM 29.1 billion in 1998 to DM

29.5 billion in 1999, but experienced a slight decline in the first quarter of 2000.

The substantial supply of giftware and handicrafts has transformed the German

giftware and handicrafts market into a fiercely price-competitive market place.

Nevertheless, innovative and new to market giftware and handicrafts items place

still have good market prospects. It is essential for the German giftware and

handicrafts marketers to find new products to stay competitive. Although German

consumers may be willing to pay a high price for exclusive items they are very

price conscious and want value for money. Among traditional gift items, candles,

festive items, including Christmas decoration, exclusive gift boxes and gift-wrap,

ribbons, nostalgic calendars and all types of scented items have best prospects.

The German market shows a strong demand for low-priced candles. Thus

imports from Poland and China have increased substantially. The average

growth for the overall giftware and handicrafts is estimated at 1-2 percent over

1999-2000.


Occasions for which embroidery products are purchased:

Graph No.2 : Occasions for which gift items are often purchased

SWOT Analysis of the Indian handicrafts industry

Birthday36%

Christmas17%

Visit to friends/family10%

No Special Occasion9%Easter

6%

Thank You4%

Others17%

Occasions for which gift items are often purchased


Strength o Abundant and cheap labour hence can compete on price

o Low capital investment and high ratio of value addition

o Aesthetic and functional qualities

o Wrapped in mist of antiquity

o Hand made and hence has few competitors

o Variety of products which are unique

o Exporters willing to handle small orders

o Increasing emphasis on product development and design up

gradation

Weaknesses o Inconsistent quality

o Inadequate market study and marketing strategy

o Lack of adequate infrastructure and communication facilities

o Capacity to handle limited orders

o Untimely delivery schedule

o Unawareness of international standards by many players in the

market

Opportunities o Rising appreciation for handicrafts by consumers in the developed

countries

o Widespread novelty seeking

o Large discretionary income at disposal of consumer from

developed countries


o Growth in search made by retail chains in major importing countries

for suitable products and reliable suppliers. Opportune for

agencies to promote marketing activities

o Use of e-commerce in direct marketing

Threats Decline in India’s share due to:

o Better quality products produced by competitors from Europe,

South Africa, South Asia, etc.

o Better terms of trade by competing countries

o Consistent quality and increasing focus on R&D by competing

countries

o Better packaging

o Stricter international standards


COMPANY PROFILE

"One of the Largest Manufacturer of Embroideries in Asia"

"Second Largest Manufacturer of Laces in the World"

Pioneer Embroideries Limited, grown from modest beginnings in 1991 to

become India's largest manufacturer-exporter of Embroideries, Torchon/Bobbin

laces, Raschel laces and other garment accessories in India. They are also the

proud owners of the no. 1 retail brand for embroidered clothing "Hakoba". A clear

vision along with focus on quality, creativity and innovation has resulted in this

spectacular, trail-blazing success largest retail chain for embroidered products).

With an outstanding operational infrastructure, superb craftsmanship and

obsession for the best quality, it has not taken us long to create waves in the

international market. Today we have established an impeccable reputation and


carved a permanent niche in the industry throughout the world. Their impressive

international roster includes clients from the North America, Latin America, Europe, the Middle East and Africa. Pioneer is also the largest player in the domestic market. Catering to millions of satisfied customers already, Pioneer Group is now poised to move ahead in leaps and bounds.

Pioneer Group have a qualified and highly motivated design development team,

which is constantly working towards generating new design to match the latest

trends across the globe. State-of-the-art software and machines are used with

trained personnel for monitoring the output, matching it to our own high and

exacting standards. We are constantly working on developing new lines that

matches the design specifications and requirements of our new clients. Today,

they have more than 40000 designs in their Library for their customers.

Let's take a look at Company Facts - Pioneer Embroideries Ltd.

Table No. 1 Company Information

Name of the

organizationPioneer Embroideries Limited

Date of incorporation 25th of October, 1991.

Board of Directors

Chairman: Raj Kumar Sekhani

Managing Director : Harsh Vardhan Bassi

Independent Director : Joginder Kumar Baweja

Independent Director: Gopalkrishnan Sivaraman

Geographical area

/Process House

1638, G.I.D.C. , Sarigam,

Dist. Valsad,


Gujarat -396155

Constitution Public Limited Company

Business Type Manufacturer / Supplier

Corporate Office

Unit No.21 to 25, 2nd Floor,

Orient House, 3-AUdyog Nagar,

Off S. V. Road, Goregaon (West),

Mumbai – 400 062

Telephone No. 91-22- 42232323

Fax No. 91-22- 42232313

Website www.pelhakoba.com

CIN L17291MH1991PLC063752

ListingBombay Stock Exchange and National Stock Exchange

of India Ltd.

ISIN for

DemateralizationINE156C01018

Share Transfer Agent

LINK INTIME INDIA PRIVATE LIMITED

C-13, Pannalal Silk Mills Compound,

L.B.S Marg, Bhandup (West),

Mumbai – 400 078


Product Profile of Company

Dope Dyed Polyester Yarn: Dope Dyed Yarn is a synthetic Yarn where

the Polymer, before the extrusion process, is mixed with dye and and

extruded fibres are then coloured.

This gives a yarn with excellant colour fastness and light fastness

characteristics.

Some pictures of Dope Dyed Polyester Yarn are:


Embroidered Fabric & Laces : Embroidery is the handicraft of

decorating fabric or other materials with needle and thread or yarn.

Embroidery may also incorporate other materials such as metal strips,

pearls, beads, quills, and sequins. Embroidery is most often used on caps,

hats, coats, blankets, dress shirts, denim, stockings, and golf shirts.

Embroidery is available with a wide variety of thread or yarn color.

The basic techniques or stitches on surviving examples of the earliest

embroidery—chain stitch, buttonhole or blanket stitch, running stitch, satin

stitch, cross stitch—remain the fundamental techniques of hand

embroidery today.

Lace is a delicate fabric made of yarn or thread in an open weblike

pattern made by machine or by hand.

Originally linen, silk, gold, or silver threads were used. Now lace is often

made with cotton thread, although linen and silk threads are still available.

Manufactured lace may be made of synthetic fiber. A few modern artists

make lace with a fine copper or silver wire instead of thread

Some Pictures of Embroidered Fabric & Laces are:

https://en.wikipedia.org/wiki/Cross_stitch



https://en.wikipedia.org/wiki/Running_stitch

https://en.wikipedia.org/wiki/Buttonhole_stitch

https://en.wikipedia.org/wiki/Chain_stitch

https://en.wikipedia.org/wiki/Embroidery_stitch


https://en.wikipedia.org/wiki/Sequin

https://en.wikipedia.org/wiki/Quill

https://en.wikipedia.org/wiki/Bead

https://en.wikipedia.org/wiki/Pearl

https://en.wikipedia.org/wiki/Metal


https://en.wikipedia.org/wiki/Sewing_needle

https://en.wikipedia.org/wiki/Textile

https://en.wikipedia.org/wiki/Handicraft


Spun Yarn: Yarn is a long continuous length of interlocked fibers,

suitable for use in the production of textiles, sewing, crocheting, knitting,

weaving, embroidery, and rope making. Thread is a type of yarn intended

for sewing by hand or machine. Modern manufactured sewing threads

may be finished with wax or other lubricants to withstand the stresses

involved in sewing. Embroidery threads are yarns specifically designed for

hand or machine embroidery.


Some Pictures of Spun Yarn are:


History Of Pioneer Embroidery LimitedTable No. 2: History of Company

YEAR EVENTS

1991

The company was incorporated on 25th October, under the

Companies Act, 1956 in the state of Maharashtra at Mumbai.

The company has been incorporated to setup facilities to

design and Manufacture Embroidery Fabrics and Laces with

an installed capacity of 324 million stiches per annum at

Sarigam near Vapi in Gujarat State.

The company has been promoted by Raj Kumar Sekhani and

Mr Baid. Pioneer has an installed capacity of 1572m stitches

with 43 machines (including those of the group concerning J

J Textiles)working at full capacity for producing embroidered

cloth of different width and length.

1994

The company is also proposing to enter into high value

added garment business as a part of forward integration.

During the year under review, the company entered the

capital market and offered 28,10,000 Equity Shares of Rs.

10/- each for cash at par aggregating Rs. 281.00 lacs on 14th

Sept-1993,for subscription to the Indian Public & NRI.

1995 The R&D department has successfully developed `chemical

laces'(a very high value added & import substitute product).

1997 The company's products are positively corelated with the

fashion industry. The Company's products are part & parcel

of the fashion industry.

The company has taken up expansion project at Silvassa by


importing 12 computerised embroidery machines having

installed capacity of 46 lac metres p.a.

The Authorised Capital of the Company is proposed to be

increased from Rs. 5,00,00,000/- to Rs. 8,00,00,000/- to

facilitate issue of further shares to meet part of capital cost of

expansion project of the company at Silvassa.

1998

The manufacturing capacity is enhanced due to installation of

12 Fully Computerised Embroidery Machines to enlarge the

product range.

The Company has issued 16,50,000 Equity Shares of Rs.

10/-each for cash at par aggregating Rs. 165 Lacs on

preferential basis to the Promoter-Directors, their Relatives &

Associate Concerns on 28th February.

The Company has carried out R & D in the area of product

development, capital reduction.

1999

Pioneer Embroideries Ltd of Mumbai has entered into an

agreement to acquire a total of 46,00,000 equity shares

(representing 40.14 per cent of the paid-up equity capital) of

Rs. 10 each of Salzer Textiles Ltd (STL) from Interspitzen

AG, Switzerland and Sturzenegger Lingenschaften AG,

Switzerland, at a price of Rs. 0.95 per share.

2000 Pioneer Embroideries Ltd will sign a memorandum of

understanding (MoU) for marketing its products abroad

through the South Korean company, Moojin International Ltd.

Pioneer Embroideries, manufacturer of embroidery and

fashion garments accessory products, is taking over

Coimbatore-based Sulzer Textiles, a loss making export

oriented embroidery manufacturing unit (EoU).

Pioneer is also setting up the world's largest crochet lace

plant by installing 364 machines (needles for crochet)which

has been financed by SICOM.


Pioneer acquires Hakoba brand, deal seen at Rs 12 cr.

Pioneer Embroideries takes over Sulzer Textiles.

2001 Pioneer Embroideries Board approves formation of 100%

subsidiary in UAE & Nigeria.

2003 PEL's Hakoba brand inaugurates fashion gallery in

Secunderabad

2004 Pioneer starts manufacturing of Hakoba knits.

Pioneer Embroideries - Starting of 15th Retail Shop under

brand Hakoba.

2005

Pioneer Embroideries acquires South Korean factory unit for

mn.

Pioneer Embroideries enters into agreement with BCCL for

investment in its WOS.

Pioneer Embroideries has given the Bonus in the Ratio of

1:2.

The Company has recommended a dividend @ 20% i.e. Rs

2.00 per equity share.

2006

Pioneer Embroideries Ltd has informed that the Company

has acquired Mas Embroideries Pvt Ltd, a manufacturer of

Embroidered Fabrics and Laces situated at Maneshar,

Gurgaon.

The Company has recommended a dividend @ 15% i.e. Rs.

1.50 per equity share.

2007 The Company recommended Dividend @ 15% on Equity

Shares of the Company.

the Company has entered into a Development Agreement

with Sunteck Realty & Infrastructure Ltd, for Development of

its property,situated at Hakoba Compound, Western Express

Highway, Borivali(East), Mumbai.

The Commercial Production of Polyester Dope Dyed Yarn

Plant of the Company as set up at Kala Amb. Dist. Sirmaur in


Himachal Pradesh has been started.

2008

Pioneer Embroideries Limited has appointed Mr. Shashikant

G. Kedia as Company Secretary of the Company

Pioneer Embroideries Ltd has appointed Mr. Narendra

Kumar Jain as Company Secretary of the Company w.e.f.

September 15, 2008. He is also appointed as Compliance

Officer of the Company for the purpose of Clause 47 of the

Listing Agreements.

2009

Registered Office of the Company has been shifted from

Hakoba Compound, Western Express Highway, Borivali

West, Mumbai - 400066 to Unit No 101B, 1st Floor, Abhishek

Premises, Plot No C5-6, Dalia Industrial Estate, Off. New

Link Road, Andheri West, Mumbai 400058.

2011

Mr. C.V. Ramana has been appointed as an Additional

Director on the Board of the Company. He is a Non-

Executive Independent Director on the Board with effect from

May 06, 2011. Also, Mr. C.V. Ramana has been Co-opted as

member of the Audit Committee with effect from May 06,

2011.

2012 Mr. Uday V. Nemlekar has been appointed as Compliance

Officer of the company.

2014 Mr. Shriprakash Jain has been appointed as Chief Financial

Officer (CFO) of the Company.


Literature Review

1. Doron Nissim & Stephen H Penman: (1999) In his Research article on

financial performance he has pointed that this paper outlines a financial

statement analysis for use in equity valuation. Standard profitability

analysis is incorporated, and extended, and is complemented with an

analysis of growth. The perspective is one of forecasting payoffs to

equities. So financial statement analysis is presented first as a matter of

proforma analysis of the future, with forecasted ratios viewed as building

blocks of forecasts of payoffs.

2. Kennedy and Muller (1999): in his research article on financial

performance he has pointed that the analysis and inferences/interpretation

of financial statement are an attempt to determine the significance and

meaning of financial statement data so that the forecast can be made of

the prospects for future earnings, ability to pay interest and Debt

maturates (both currrent and long term) and profitability and sound

dividend policy.

3. Elizabeth Duncan and Elliott (2004) : In his research article on financial

performance he has pointed that he had stated that the paper in the title of

efficiency, customer service and financial performance among australian

financial institutions showed that all financial performance measures as

interest margin, return on assets, and capital adequacy are positively

correlated with customer service quality scores.

4. Jonas Elmerraji (2005): in his research article financial performance he

has pointed that he tries to say that ratio can be an invaluable tool for

making an investment decision. Even so many new investors would rather

leave their decisions to fate them try to deal with the intimidation of

financial ratios. the truth is that ratios aren't intimidating, even if you don't

have a degree in business or finance. Using Ratios to make informed

decisions about an investment makes a lot of sense, once you know how

to use them.


5. John J.Wild, K.R.Subramanyam & Robert F.Halsey (2006) in his

research article on financial performance he has pointed that he have said

that the financial Statement analysis is the application of analytical tools

and techniques to general-purpose financial statements and related data

to derive estimates and inferences useful in business Analysis. Financial

statement analysis reduces reliance on hunches, guesses, and intuition

for Business decisions. It decreases the uncertainty of business analysis.

6. I.M.Pandey (2007) : in his research article on financial performance he

has pointed that the financial statements contain information about the

financial consequences and sources and uses of financial resources, one

should be able to say whether the financial condition of a firm is good or

bad; whether it is improving or deteriorating. One can relate the financial

variables given in financial statements in a meaningful way which will

suggest the actions which one may have to initiate to improve the firm’s

financial condition

7. Susan Ward (2008): in his research article on financial performance he

has pointed that emphasis that financial analysis using ratios between key

values help Investors cope with the massive amount of numbers in

company financial statements. For Example, they can compute the

percentage of net profit a company is generating on the funds it has

deployed. All other things remaining the same, a company that earns a

higher percentage of Profit compared to other companies is a better

investment option.

8. Rachchh Minaxi A (2011): in his research article on financial

performance he has pointed & suggested that the financial statement

analysis involves analyzing the financial statements to extract information

that can facilitate decision making. It is the process of evaluating the

relationship between component parts of the financial statements to obtain

a better understanding of an entity’s position and performance.

9. Priyaaks (Mar 2012),: in his research article on financial performance he

has pointed that Financial statement analysis is the process of examining


relationships among financial statement elements and making

comparisons with relevant information. It is a tool in decision-making

processes related to stocks, bonds, and other financial instruments.

From the above literature review, it is evident that, the financial

performance depicts the efficiency of organization. Along with that

financial statements are very useful for decision making in the company

by Board of Directors and management. It also helps to know the

prosperity of the company with the profitability.


Research Methodology

Research methodology is a way to systematically solve the research problem. It

may be understood as a science of studying how research is done

systematically. In it we study the various steps that are generally adopted by a

researcher to know not only the research method or techniques but also can be

the methodology. Researcher always need to understand the assumption

underlined various techniques and they need to know the criteria by which they

can decide technique and procedure will be applicable to certain problems and

other will not.

Research may also be defined as a search for knowledge through an objective

and scientific method of finding solution of problems.

Formulation of Problem

“Financial Statement Analysis at Pioneer Embroidery Ltd, Valsad"

Research Objectives

Provide information about the financial position, performance, and

changes in the financial position of a company which will be useful in

making future decisions.

To analyze and compare the

o Profitability;

o Liquidity;

o Long Term Solvency position; &

o Efficiency of Pioneer Embroidery Limited


Research Design

Research design is the framework that has been created to seek answers

to research questions. Research design is considered to be a "blue print"

of the study. The design of a study defines the study type (descriptive,

correlational, semi-experimental, experimental, review, meta-analytic) and

sub-type (e.g., descriptive longitudinal case study), research question,

hypotheses, independent and dependent variables, experimental design,

and, if applicable, data collection methods and a statistical analysis plan.

In this Project, researcher is

making use of Descriptive

Research Design


Data Collection Methods

Secondary Data have been used as collection method.

Secondary Data – This has been collected using internal and

external sources such as:

o Annual Reports of the company

o Company Website: http://www.pelhakoba.com

o Data collected from authorized websites

Data Collection Period

My study is based on 4 financial years, i.e 2010-2011, 2011-2012, 2012-2013 and 2013-2014.Financial data collected from Annual reports of the

company.

Limitations of the Study

The data analysis is just for 4 years. Considering 4 years data, you

may not be able to draw accurate conclusion.

Due to time limitation, there may be minor things which may not be

included.


Analytical Tools

Researcher have used 3 Finance analytical tools in this study for analyzing the performance of the company. Which are:

o Ratio Analysis

o Comparative Statement

o Common Size Statement

Let us see each Analytical tool in brief:

Common Size Analysis

Analyzing a single period financial statement works well with vertical

analysis. On the income statement, percentages represent the correlation

of each separate account to net sales. Express all accounts other than net

sales as a percentage of net sales. Net income represents the percentage

of net sales not used on expenses. For example, if expenses total 69

percent of net sales, net income represents the remaining 31 percent.

Vertical analysis performed on balance sheets uses total assets and total

liabilities for comparison of individual balance sheet accounts.

This involves the procedure of comparing different figures of separate

entities to one specific figure of an entity for one specific period of time.

This type of analysis is of great significance in carrying out the decision

making process. An accountant can also expand the vertical analysis by

comparing the figures of one specific period with those of another period.


Comparative Analysis

Horizontal analysis is the comparison of data sets for two periods.

Financial statements users review the change in data much like an

indicator. Optimistic analysts look for growth in revenue, net income and

assets in addition to reductions in expenses and liabilities. Calculating

absolute dollar changes requires the user to subtract the base figure from

the current figure. Expressing changes with percentages requires the user

to divide the base figure by the current figure, and multiply by 100.

An accountant can follow one of the two given below methods to conduct

a Comparative financial analysis:

Dollar analysis is the first way method of horizontal financial analysis in

which the amounts in absolute dollars of various items are compared for

an entity over different periods of time. This type of analysis helps analyze

the spending trend of a business. Besides, it also helps analyze the

effects of external factors like rise in prices over business expenditures.

Percentage analysis is based on the change in different items over

different periods of time calculated in terms of percentage. With the help of

this type of analysis, the performance of a small business can be

compared to that of a large business in the same industry.

Ratio Analysis

Ratios express a relationship between two financial statement totals, and

compare to budgets and industry benchmarks. Five common categories of


ratios exist: liquidity, asset turnover, leverage, profitability and solvency.

Reviewing ratios for performance compared with prior periods or industry

specific benchmarks provides financial statements users with recognition

of strengths and weaknesses.

There are many ratios used to analyze financial statements:

Liquidity Analysis Ratio: For example, the net working capital ratio is

calculated between net working capital and total assets.

Profitability Analysis Ratio: For example, return on assets ratio is

calculated between net income and average total assets. Profit margin

ratio is calculated between net income and sales. Earning per share is

calculated between net income and number of outstanding shares.

Activity Analysis Ratio: For example, asset turnover ratio is calculated

between sales and average total assets. Inventory turnover ratio is

calculated between cost of goods sold and average inventories.

Capital Structure Analysis Ratio: The most important ratio is debt to equity

ratio, which is calculated between total liabilities and total stockholder's

equity.

Capital Market Analysis Ratio: For example, dividend ratio is calculated

between annual dividends per common share and market price of

common stock per share.

All these ratios are collectively used to carry out the financial analysis of

business to assess growth, profitability, and solvency of a business.

Remember that ratio analysis is as important as horizontal and vertical

analysis and must not be overlooked.


RATIO ANALYSIS

Liquidity Ratio:

A class of financial metrics that is used to determine a company's

ability to pay off its short-terms debts obligations. Generally, the

higher the value of the ratio, the larger the margin of safety that the

company possesses to cover short-term debts.

Liquidity ratio expresses a company's ability to repay short-term

creditors out of its total cash. It is the result of dividing the total cash

by short-term borrowings. It shows the number of times short-term

liabilities are covered by cash. If the value is greater than 1.00, it

means fully covered.

Ratios Covered under Liquidity ratios in this project are: Current Ratio

Quick ratio/Acid test Ratio

Cash Ratio

Working Capital


Current Ratio:

Current ratio is balance-sheet financial performance measure of

company liquidity. Current ratio indicates a company's ability to

meet short-term debt obligations. The current ratio measures

whether or not a firm has enough resources to pay its debts over

the next 12 months.

Current Ratio:- Current AssetCurrent Liability

Table No. 3 (` in lacs)

Particulars 2010-2011 2011-2012 2012-2013 2013-2014Current Asset 18276.02 17953.56 17180.3 16348.08

TOTAL 18276.02 17953.56 17180.3 16348.08

Current Liability 10045.52 11350.89 13735.77 16660.64

TOTAL 10045.52 11350.89 13735.77 16660.64Current Ratio 1.82 1.58 1.25 0.98

Chart No. 3


2011 2012 2013 20140.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2.001.82

1.58

1.25

0.98

CURRENT ASSET

Current Ratio

YEARS

PE

RC

EN

TA

GE

(%)

Interpretation:

The higher ratio indicates the better liquidity position; the firm will be able

to pay its current liabilities more easily. Higher the current ratio, larger the

amount of rupees available per rupees of current liability. Here the ratio is

continuously decreasing from the year 2011 to 2014. In the year 2011

ratio is higher which show higher liquidity in that year but in the year 2014

the ratio is very low which indicate that firm is not able to meet it current

obligation.


Quick/ Acid Test Ratio:

The term “Acid-test ratio” is also known as quick ratio. The most

basic definition of acid-test ratio is that, “it measures current

(short term) liquidity and position of the company”. To do the

analysis accountants weight current assets of the company

against the current liabilities which result in the ratio that

highlights the liquidity of the company.

Quick ratio/Acid test Ratio :- (Current Assets – Inventory)Current liabilities


Particulars 2010-2011 2011-2012 2012-2013 2013-2014Current Assets 18276.02 17953.56 17180.3 16348.08

Inventory 3830.26 3325.14 3356.93 2886.01

Total 14445.76 14628.42 13823.37 13462.07



Total 10045.52 11350.89 13735.77 16660.64

Quick ratio/Acid test Ratio

1.44 1.29 1.01 0.81

Chart No. 4

2011 2012 2013 20140.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60 1.441.29

1.01

0.81

QUICK RATIO/ACID TEST RATIO

Quick Ratio

YEARS

PER

CE

NT

AG

E(%

)

Interpretation:

An ideal quick ratio is said to be 1:1. If it is more, it is considered to be

better. If the quick ratio is less than 1:1 so the liquid asset is less than

current liability. Here the quick ratio of the company is continuously

diminishing from the year 2011 to 2014. In the year 2014 the ratio is the


lowest, which indicate that company does not have enough quick assets

to meet its current liabilities.

Cash Ratio

Cash ratio (also called cash asset ratio) is the ratio of a company's

cash and cash equivalent assets to its total liabilities. Cash

ratio is a refinement of quick ratio and indicates the extent to

which readily available funds can pay off current liabilities.

Potential creditors use this ratio as a measure of a company's liquidity

and how easily it can service debt and cover short-term

liabilities.

Cash Ratio :- Cash and cash equivalents *100Current Liability


Particulars 2010-2011 2011-2012 2012-2013 2013-2014Cash and cash

equivalents150.59 131.08 336.98 310.98


Cash Ratio 1.50 1.15 2.45 1.87

Chart No. 5


2011 2012 2013 20140.00

0.50

1.00

1.50

2.00

2.50

3.00

1.50

1.15

2.45

1.87

CASH RATIO

Cash Ratio

PE

RC

EN

TA

GE(%

)

YEARS

Interpretation:

The cash ratio is the most stringent and conservative of the three short- term

liquidity ratios (current, quick and cash). Here the Cash ratio of the company is

being volatile from the year 2011 to 2014 having a slight increase in the year

2013. Very few companies will have enough cash and cash equivalents to fully

cover current liabilities, so it's not necessary to have Cash ratio above 1:1.


Working Capital

Working capital is the amount by which the value of a company's

current assets exceeds its current liabilities. Also called net

working capital. Working capital is frequently used to measure a

firm's ability to meet current obligations. It measures how much in

liquid assets a company has to build its business.

Working Capital :- Current Assets-Current Liabilities


Particulars 2010-2011 2011-2012 2012-2013 2013-2014Current Assets 18276.02 17953.56 17180.3 16348.08

Current Liabilities 10045.52 11350.89 13735.77 16660.64

Working Capital 8230.50 6602.67 3444.53 -312.56

Chart No. 6


2011 2012 2013 2014-1000.000.00

1000.002000.003000.004000.005000.006000.007000.008000.009000.00 8230.50

6602.67

3444.53

-312.56

WORKING CAPITAL

Working Capital

Rs.

in L

acs

YEARS

Interpretation:

Working capital refers to that part of capital which is not tied up in fixed assets

but is use to meet the day to day requirements of business.” The goal of working

capital management is to manage the firm’s current assets and current liabilities

in such a way that a satisfactory level of working capital is maintained. Here in

2014 working capital of company is -312.56, which is not a good indicator for a

company.


Activity Ratio:

Activity / Turnover Ratios are a set of financial ratios used to

measure the efficiency of various operations of a business.

Activity ratios measure the efficiency of the firm in using its

resources / assets. These ratios are also known as Asset

Management Ratios because these ratios indicate the

efficiency with which the assets of the firm are managed / utilized.

It is a metric of how well a company is able to convert inventory and

receivables into cash.

Ratios Covered under Activity ratios in this project are:

o Debtor / Receivable Turnover Ratio

o Average Collection Period


o Stock / Inventory Turnover Ratio

o Assets Turnover Ratio

Debtors / Receivable Turnover Ratio:

Receivable turnover ratio indicates the frequency of conversion

from debtors to cash normally in a year. It also suggests the

extent of liquidity of debtors.

Debtor / Receivable Turnover Ratio :-

Credit SalesAverage Debtors + Bills Receivables


Particulars 2010-2011 2011-2012 2012-2013 2013-2014

Credit Sales 17811.46 20730.08 24048.69 27321.83

TOTAL 17811.46 20730.08 24048.69 27321.83

Average Debtors 4850.87 4715.11 4616.52 4655.6Bills receivable 0 0 0 0

TOTAL 4850.87 4715.11 4616.52 4655.6Debtor / Receivable Turnover Ratio 3.67 4.40 5.21 5.87


Chart No. 7

2011 2012 2013 20140.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

3.67

4.40

5.215.87

DEBTORS/RECEIVABLE TURNOVER RATIO

Debtors Turnover Ratio

YEARS

DE

BT

OR

S T

UR

NO

VE

R R

AT

IO

Interpretation:

Debtors Turnover Ratio indicates the time of conversion from debtors to

cash normally in a year. It also suggests the extent of liquidity of debtors.

Here, in 2011 the Debtors Turnover Ratio is 3.67 and in 2014 it increases

to 5.87, this shows that companies credit Sales is increasing and is

required to have control on it.


Average Collection Period

Average collection period gives a time period in which debtors are

converted into cash. Can be calculated with the formula:

Average Collection Period :- 365 days or 12 MonthsDebtor / Receivable Turnover Ratio

Table No. 8 ('In Lacs) Particulars 2010-2011 2011-2012 2012-

20132013-2014

365 days or 12 Months 12 12 12 12Debtor / Receivable Turnover

Ratio3.6718073

254.3965209

725.209268

025.8685948

11

Average Collection Period 3.27 2.73 2.30 2.04

Chart No. 8


2011 2012 2013 20140.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50 3.27

2.73

2.302.04

AVERAGE COLLECTION PERIOD

No. of Months

YEARS

PE

RC

EN

TA

GE(%

)

Interpretation: Here, in 2011 the collection period is 3.27 months and is being

decreased to 2.04 months in 2014 which is a good sign for a company.

Stock / Inventory Turnover Ratio

Inventory turnover ratio indicates how many times inventory is sold and

replaced in a financial year. In other words, the ratio gives the frequency

of conversion of inventory into cash in a given financial year.

Normally, higher ratio is considered good as it suggests better inventory

management.

Stock / Inventory Turnover Ratio :-

Cost of Goods SoldAverage Inventory

Table No. 9 (` in lacs)Particulars 2010-2011 2011-2012 2012-2013 2013-2014

Cost of Goods Sold 7160.68 6977.31 8577.6 9724.27Average Inventory 3996.905 3577.7 3341.035 3121.47

Stock/ Inventory Turnover Ratio 1.79 1.95 2.57 3.12

Chart No. 9


2011 2012 2013 20140.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

1.791.95

2.57

3.12

STOCK TURNOVER RATIO

%

PER

CE

NT

AG

E(%

)

YEARS

Interpretation:

Inventory Ratio indicates as to how many times in a year Inventory is replaced.

Here, in 2011 Stock/ Inventory Turnover Ratio is 1.79. Whereas, in 2014 Stock/

Inventory Turnover Ratio is 3.12. Which is a good sign for a company.


Assets Turnover Ratio

The amount of sales or revenues generated per dollar of assets. The

Asset Turnover ratio is an indicator of the efficiency with which a

company is deploying its assets. Generally speaking, the higher the

ratio, the better it is, since it implies the company is generating more

revenues per dollar of assets.

Assets Turnover Ratio :- Net RevenueFixed Assets


Net Revenue 17814.25 20730.08 24048.69 27321.83Fixed Assets 11726.72 11561.93 10886.85 10029.08

Assets Turnover Ratio 1.52 1.79 2.21 2.72


Chart No. 10

2011 2012 2013 20140.00

0.50

1.00

1.50

2.00

2.50

3.00

1.521.79

2.21

2.72

ASSET TURNOVER RATIO

Asset Turnover Ratio

YEARS

PER

CE

NT

AG

E(%

)

Interpretation:

Asset Turnover Ratio gives you a ratio of how much revenue is generated

against the asset being used. Here, in 2011, Asset Turnover Ratio is 1.52 and is

increasing every year and has 2.72 in the year 2014. It indicates a good sign for

a company.


Solvency Ratio:

Solvency ratio is one of the various ratios used to measure the

ability of a company to meet its long term debts. Moreover,

the solvency ratio quantifies the size of a company’s after tax

income, not counting non-cash depreciation expenses, as

contrasted to the total debt obligations of the firm. Also, it

provides an assessment of the likelihood of a company to

continue congregating its debt obligations.

Ratios Covered under Activity ratios in this project are: Solvency ratio

Current debts to inventory ratio

Current debts to net worth ratio


Fixed assets to net worth ratio

Solvency Ratio:

Solvency ratio is one of the various ratios used to measure the ability of a

company to meet its long term debts. A solvency ratio higher than 20% is

considered to be financially sound.

SOLVENCY RATIO :- (After Tax Net Profit + Depreciation) *100Total liabilities


After Tax Net Profit 95.01 -372.25 -3338.18 -691.85


Depreciation 1166.94 1213.48 1266.18 1098.91

TOTAL 1261.95 841.23 -2072 407.06

Total liabilities 36729 36108.26 33070.01 31075.77

TOTAL 36729 36108.26 33070.01 31075.77

SOLVENCY RATIO 3.44 2.33 -6.27 1.31

Chart No. 11

2011 2012 2013 2014

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

3.44 2.33

-6.27

1.31

SOLVENCY RATIO

%

YEARS

PE

RC

EN

TA

GE(%

)


Interpretation:

This identifies the ability of a company to meet its long term debts. Here,

Solvency Ratio of the company is 3.44% in 2011 and is decreasing every year

since then till 2013. Again, in the year 2014 we can see increase in Solvency

Ratio comparing to last year. Which means that company is recovering and trying

to gain its position. It is good sign for a company.

Current debts to inventory ratio:

This ratio reveals the reliability of a company on available inventory for the

repayment of debts. Formula for the same is:

Current debts to inventory ratio :- Current LiabilityInventory



Total 10045.52 11350.89 13735.77 16660.64

Inventory 3830.26 3325.14 3356.93 2886.01


Total 3830.26 3325.14 3356.93 2886.01

Current debts to inventory ratio 2.62 3.41 4.09 5.77

Chart No. 12

2011 2012 2013 20140.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2.62

3.414.09

5.77

CURRENT DEBTS TO INVENTORY RATIO

Current Debts In-ventory Ra-tio

YEARS

PER

CE

NT

AG

E(%

)

Interpretation:

The Ratio clearly shows the Reliability of the company's solvency . We can

consider the company to be non reliable as its completely increasing from year to

year. In year 2011, the Current Debt to inventory Ratio is 2.62 which has

increased to 5.77 till the year 2014. This gives Negative sign for the investors

and the company also.


Current debts to net worth ratio

This ratio reveals the reliability of a company' solvency out of its Net worth

to meet its current Liabilities. Formula for the same is:

Current debts to net worth ratio:- Current LiabilityNet Worth


Current Liability 10045.52 11350.89 13735.77 16660.64Net Worth 13004.59 12632.34 9311.69 13291.17

Current debts to net worth ratio 0.77 0.90 1.48 1.25

Chart No. 13


2011 2012 2013 20140.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

0.770.90

1.48

1.25

CURRENT DEBTS TO NET WORTH RATIO

Current Debts to net Worth Ratio

PER

CE

NT

AG

E(%

)

YEARS

Interpretation:

The Ratio shows the relation of Current Liability with net Worth. In this it shows

that in year 2011, Net worth of the company is more than its Liability. The same

gets increased in going years and in year 2013 it becomes 1.48. In year 2014 it

again reduced to 1.25 Which is a good indicator for the company when

compared to 2013 Ratio. Should be less than 1.


Fixed assets to net worth ratio

It represents the percentage of assets centered in fixed assets In

comparison to total equity.

Fixed assets to net worth ratio:-Fixed AssetNet Worth

Table No. 14 (` in lacs)Particulars 2010-2011 2011-2012 2012-2013 2013-2014Fixed Asset 11726.72 11561.93 10886.85 10029.08Net Worth 13004.59 12632.34 9311.69 13291.17

Fixed assets to net worth ratio 0.90 0.92 1.17 0.75


Chart No. 14

2011 2012 2013 20140.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

0.90 0.92

1.17

0.75

FIXED ASSET TO NET WORTH RATIO

Fixed Asset to Net Wo...

YEARS

PER

CE

NT

AG

E(%

)

Interpretation:

Here, Fixed Asset to Net Worth Ratio is continuously fluctuating from year to year

and it shows that Net worth in a year is covering the fixed asset completely in

2014. which means that the company's net worth is increasing compared to fixed

asset. This implies that more capital is wasted with company compared to its

Fixed Asset which gives negative impact for its investor.


Profitability Ratio:

Profitability ratios measure a company’s ability to generate earnings

relative to sales, assets and equity. These ratios assess the ability

of a company to generate earnings, profits and cash flows

relative to relative to some metric, often the amount of money

invested. They highlight how effectively the profitability of a

company is being managed.

Ratios Covered under Activity ratios in this project are:o Gross Profit Margin

o Net Profit Margin

o Return On Assets (ROA)


o Return On Capital Employed (ROCE)

o Return On Equity (ROE)

o Return on Investment (ROI)

o EPS

Gross Profit Margin:

Gross profit margin (gross margin) is the ratio of gross profit (gross sales

less cost of sales) to sales revenue. It is the percentage by which gross

profits exceed production costs. Gross margins reveal how much a

company earns taking into consideration the costs that it incurs for

producing its products or services.

Gross Profit Margin:- Gross Profit *100Revenue


Table No. 15 (` in lacs) 2010-2011 2011-2012 2012-2013 2013-2014Gross Profit 7160.68 6977.31 8577.6 9724.27 TOTAL 7160.68 6977.31 8577.6 9724.27 Revenue 18899.41 22976.69 24732.38 28160.43 TOTAL 18899.41 22976.69 24732.38 28160.43 GROSS PROFIT MARGIN 37.89 30.37 34.68 34.53

Chart No. 15


2011 2012 2013 20140.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00 37.89

30.37 34.68 34.53

GROSS PROFIT MARGIN

Gross Profit Margin ( % )

YEARS

PER

CEN

TAG

E(%

)

Interpretation:

Here the gross profit Margin is 37.89% in the year 2011.Later, in the year

2012, it decreases and then it increases in the year 2013 to 34.68%. In

2014, the gross profit Margin remains stable by having 34.53%. Gross

Profit Margin seems to be good of the company.


Net Profit Margin:

Net profit margin (or profit margin, net margin, return on revenue) is a ratio

of profitability calculated as after-tax net income (net profits) divided by

sales (revenue). Net profit margin is displayed as a percentage. It shows

the amount of each sales dollar left over after all expenses have been

paid.

Net Profit Margin :- Profit (after tax) *100Revenue


Profit (after tax) 95.01 -372.25 -3338.18 -691.85 Total 95.01 -372.25 -3338.18 -691.85 Revenue 18684.91 22976.69 24732.38 28160.43 Total 18684.91 22976.69 24732.38 28160.43 Net Profit Margin 0.51 -1.62 -13.50 -2.46

Chart No. 16

2011 2012 2013 2014

-16.00

-14.00

-12.00

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00 0.51 -1.62

-13.50

-2.46

NET PROFIT MARGIN

Net Profit Margin ( % )

YEARS

PE

RC

EN

TA

GE

(%)


Interpretation:

This ratio is used to measure overall profitability of the company and

hence it is very useful too. Here in the year 2011, the returns was 0.51%

and is getting decrease in the year 2012 and 2013 due to Deferred Tax

Payment and Exceptional Item Expense(can see in Profit and Loss

account). Again, in the year 2014 you can see that companies Net profit

has made a growth of around 10% considering the previous year. This

year(2014) also profit is affected by Exceptional items Expense. Company

may have a positive Net Profit Margin in current year.


Return on Asset:

Return on assets (ROA) is a financial ratio that shows the percentage of

profit that a company earns in relation to its overall resources (total

assets). Return on assets is a key profitability ratio which measures

the amount of profit made by a company per dollar of its assets.

Return On Assets (ROA):- Net Income after taxTotal assets (or Average Total assets)


Net Income after tax 95.01 -372.25 -3338.18 -691.85Total assets (or Average Total assets) 33675.84 36108.26 33070.01 31075.77

Return On Assets (ROA) 0.00 -0.01 -0.10 -0.02

Chart No. 17

2011 2012 2013 2014

-0.12

-0.10

-0.08

-0.06

-0.04

-0.02

0.00

0.02 0.00-0.01

-0.10

-0.02

RETURN ON ASSET

%

PER

CE

NT

AG

E(%

)

YEARS


Interpretation:

Return on asset for the year 2011 is 0.00 and is decreasing every year. Still, in

year 2014 it has recovered to -0.02. The reason behind the negligible figures of

ratio is due to company's net loss in last 4 years. They are currently trying to

meet its current liabilities as of now and hopefully the ratio will increase in going

years.


Return On Capital Employed (ROCE)

Return on capital employed (ROCE) is a measure of the returns that a

business is achieving from the capital employed, usually expressed in

percentage terms.

Return On Capital Employed (ROCE) :- EBITCapital Employed


EBIT 95.01 1129.68 45.01 975.52Capital Employed 13364.65 12632.34 9311.69 13291.17

Return On Capital Employed (ROCE) 0.01 0.09 0.00 0.07

Chart No. 18

2011 2012 2013 20140.000.010.020.030.040.050.060.070.080.090.10

0.01

0.09

0.00

0.07

Return On Capital Employed (ROCE)

%

YEARS

PER

CE

NT

AG

E(%

)


Interpretation:

Looking at the Graph Above, we can see that the returns on Capital employed is

Negligible as the company is not making profit. As the Profit Increases the return

on Capital Employed will Increase.


Return On Equity (ROE)

Return on equity (ROE) is the amount of net income returned as a

percentage of shareholders equity. It reveals how much profit a company

earned in comparison to the total amount of shareholder equity found on

the balance sheet.

Return On Equity (ROE) :- Net income after taxShareholder's equity


Net income after tax 95.01 -372.25 -3338.18 -691.85Shareholder's equity 13364.65 12632.34 9311.69 13291.17

Return On Equity (ROE) 0.01 -0.03 -0.36 -0.05

Chart No. 19

2011 2012 2013 2014

-0.40

-0.35

-0.30

-0.25

-0.20

-0.15

-0.10

-0.05

0.00

0.05

0.01

-0.03

-0.36

-0.05

Return On Equity (ROE)

%

YEARS

PER

CE

NT

AG

E(%

)


Interpretation:

This shows us as to what percentage of return share holders may get as per total

share holders Equity. Looking at the Graph we see that its decreasing from 2011

till 2013. Again, in the year 2014 it has recovered comparing to the previous year

Return on Equity.


Earning per Share:

Earnings per share (EPS) is the portion of a company’s profit that is

allocated to each outstanding share of common stock, serving as an

indicator of the company’s profitability. It is often considered to be one of

the most important variables in determining a stock’s value, and it

comprises the “E” part of the P/E (price-earnings) valuation ratio.

Earning Per Share:-Net Income

Average Outstanding Common Share

Table No. 20 (` in lacs)Particulars 2010-2011 2011-2012 2012-2013 2013-2014Net income 9501000 -37225000 -333818000 -69185000

Average Outstanding Common Share 12208215 12915200 13137978 17699094

Earning Per Share 0.78 -2.88 -25.41 -3.91

Chart No. 20

2011 2012 2013 2014

-30.00

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00 0.78

-2.88

-25.41

-3.91

Earning per Share

EPS

YEARS

PE

RC

EN

TA

GE(%

)

http://www.investopedia.com/terms/c/commonstock.asp


Interpretation:

Earnings per share is also a calculation that shows how profitable a company is

on a shareholder basis. Positive EPS do attract the Investors for Investment.

Here, in Pioneer Embroidery Ltd. we continuously see fall in EPS from 2011 till

2013 and again increase in EPS from 2013 to 2014. Looking at such a huge

increase in the EPS from -25.85 to -3.91 IN THE YEAR 2013 -2014, we can

conclude that company may do better in current Financial year


COMPARATIVE STATEMENT ANALYSIS OF PIONEER EMBROIDERY LTD FOR THE YEAR 2014-2013

Statement of Balance Sheet for 2014 & 2013 ( In Lacs)

S. No. 1

S. No. 2

Particulars 2013-2014 2012-2013Increase

or Decrease

In Percentage

Details Details Details in %

A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4443.99 4443.99 0 0.00 (b) Share application Money 0 0 0 (c) Reserves and Surplus 8,847.18 4,867.70 3979.48 81.75 Loan Funds (a) Secured Loans (b) UnSecured Loans 2 Non-Current Liabilities Long Term Borrowings 1,123.96 10,022.55 -8898.59 -88.79 3 Current Liabilities (a) Short Term Borrowings 4,901.42 4,578.69 322.73 7.05 (b) Trade Payables 1,850.00 2,127.66 -277.66 -13.05 (c) Other Current Liabilities 9,414.05 6,651.21 2762.84 41.54 (d) Short Term Provisions 495.17 378.21 116.96 30.92 TOTAL LIABILITIES 31075.77 33070.01 -1994.24 -6.030358

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 9,640.43 10,240.86 -600.43 -5.86 (ii) Intangible Assets 42.79 50.45 -7.66 -15.18 iii) Capital Work- in- Progress 345.86 595.54 -249.68 -41.92 (b) Non-Current Investments 2,659.64 2,659.74 -0.1 0.00 (c) Deferred Tax Assets 0.00 0.00 0 0.00


(d) Long Term Loans and Advances 2,007.67 2,313.93 -306.26 -13.24

(e) Other Non Current Assets 31.3 29.19 2.11 7.23 2 Current Assets (a) Current Investments 0 0 0 0 (b) Inventories 2,886.01 3,356.93 -470.92 -14.03 (c) Trade Receivables 4,655.60 4,616.52 39.08 0.85 (d) Cash & Cash Equivalents 310.98 336.98 -26 -7.72

(e) Short Term Loans & Advances 8,361.21 8,790.64 -429.43 -4.89

(f) Other Current Assets 134.28 79.23 55.05 69.48

Less: Current Liabilities and

Provision 0 0 0 0 Profit and Loss Account 0 0 0 0 TOTAL ASSET 31,075.77 33,070.01 -1994.24 -6.030358

FINDINGS:

There is no change in paid up share Capital of the company.

Reserve and Surplus of the company increased due to settlement of

FCCB for Rs. 434.14 Lacs against total due and balance of Rs. 4,065.16

lacs being transferred to Capital Reserve.

We can see that Long Term Borrowings of the Company has been

restructured and amount of 4065.16 lacs has been transfered to Capital

Reserve as it is waved off. Some part of Loan from SBI and Union Bank of

India has been restructured and converted from long term to short term

Borrowings as company was unable to meet its obligations, CDR Scheme

was withdrawn. Also, company has fully paid off its loan of ICICI Bank and

done settlement of some of its loan.

Other Current Asset is getting Increased due to hike in Export Incentive.


STATEMENT OF PROFIT & LOSS for 2014 & 2013 ( In Lacs )SR. NO Particulars 2013-2014 2012-2013 Increase or

DecreaseIn

Percentage


. Details Details Details in %

I Gross revenue from Operations 27,321.83 24,048.89 3,272.94 13.61 Less: Exice Duty 0 -0.2 0.20 -100.00

Net Revenue from Operations 27,321.83 24,048.69 3,273.1413.610471

1 II Other Income 838.6 683.69 154.91 22.66 Increase/(Decrease) in Stock

III Total Revenue (I + II) 28,160.43 24,732.38 3,428.0513.860574

7 IV Expense Cost of Raw Materials Consumed 16,699.37 15,337.26 1,362.11 8.88 Purchases of Stock-in-Trade 346.03 257.7 88.33 34.28 Changes in Inventories 552.16 -123.87 676.03 -545.76 Employee Benefits Expense 2,382.23 2,115.54 266.69 12.61 Finance Costs 1,667.37 1,532.19 135.18 8.82

Depreciation and Amortization Expenses 1,098.91 1,266.18 -167.27 -13.21

Other Expenses 5,442.91 4,972.75 470.16 9.45 Interest 0.00 0.00 0.00 0.00

Total Expense 28,188.98 25,357.75 2,831.2311.165146

8

V

Profit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) -28.55 -625.37 596.82 -95.434703

Provision for Deffered Tax Liability / (Asset) 0 0 0 0.00

VI Exceptional Items 663.3 861.81 -198.51 -23.03 VII Profit/(Loss) before Tax (V-VI) -691.85 -1,487.18 795.33 -53.479068 VIII Tax Expenses Current Tax 0 0 0.00 0.00 Deferred Tax 0 1,851.00 -1,851.00 -100.00 IX Profit/(Loss) for the year (VII-VIII) -691.85 -3,338.18 2,646.33 -79.274635


Add: Balance b/f from last period 0 0 0.00 0.00 Balance Carried to Balance Sheet X Earning per Equity Share Basic -3.91 -25.41 Diluted -3.91 -25.41

FINDINGS:

Exceptional Items:

The Company has written off advances given to its subsidiary of Rs.388

lacs as permission give by RBI as management find its not recoverable.

The Company has written off Capital Work in Process of Rs 274.90 lacs

considered as Exceptional Items by management.



Statement of Balance Sheet for 2013 & 2012 ( In Lacs)S.

No. 1

S. No. 2


or Decrease

In Percentage


A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4443.99 4046.88 397.11 9.81 (b) Share application Money 0 968 -968 -100.00 (c) Reserves and Surplus 4,867.70 7617.46 -2749.76 -36.10 Loan Funds (a) Secured Loans 0.00 0.00 0.00 0.00 (b) UnSecured Loans 0.00 0.00 0.00 0.00 2 Non-Current Liabilities Long Term Borrowings 10,022.55 12,125.03 -2102.48 -17.339998 3 Current Liabilities

(a) Short Term Borrowings 4,578.69 4,516.21 62.481.3834609

1

(b) Trade Payables 2,127.66 2,027.82 99.844.9235139

2

(c) Other Current Liabilities 6,651.21 4,515.65 2135.5647.292416

4

(d) Short Term Provisions 378.21 291.21 8729.875347

7 TOTAL LIABILITIES 33070.01 36108.26 -3038.25 -8.41428

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 10,240.86 10,985.38 -744.52 -6.78 (ii) Intangible Assets 50.45 56.42 -5.97 -10.58 iii) Capital Work- in- Progress 595.54 520.13 75.41 14.50 (b) Non-Current Investments 2,659.74 2,219.80 439.94 19.82 (c) Deferred Tax Assets 0.00 1,851.00 -1851 -100


(d) Long Term Loans and Advances 2,313.93 2,482.95 -169.02 -6.81

(e) Other Non Current Assets 29.19 39.02 -9.83 -25.19 2 Current Assets (a) Current Investments 0 30 -30 -100.00 (b) Inventories 3,356.93 3,325.14 31.79 0.96 (c) Trade Receivables 4,616.52 4,715.11 -98.59 -2.09 (d) Cash & Cash Equivalents 336.98 131.08 205.9 157.08

(e) Short Term Loans & Advances 8,790.64 9,575.59 -784.95 -8.20

(f) Other Current Assets 79.23 176.64 -97.41 -55.15

Less: Current Liabilities and

Provision 0 0 0 Profit and Loss Account 0 TOTAL ASSET 33,070.01 36,108.26 -3038.25 -8.41428

FINDINGS

The Deviation in Reserve and Surplus is due to loss being transferred to

Reserve and Surplus.

Share application Money has been converted to Share Capital.

We can see that in Long Term Borrowings, part of Loan from SBI and

Union Bank of India has been restructured and converted from long term

to short term Borrowings as company was unable to meet its obligations

Short term Loans and Advances reduced due to S.R Investments Ltd.

(considered doubtful) for amount 845.07 Lacs.

STATEMENT OF PROFIT & LOSS for 2013 & 2012 ( In Lacs )SR. NO

.

Particulars 2012-2013 2011-2012 Increase or

Decrease

In Percentage



I Gross revenue from Operations 24,048.89 20,730.74 3,318.15 16.01 Less: Exice Duty -0.2 -0.66 0.46 -69.70 Net Revenue from Operations 24,048.69 20,730.08 3,318.61 16.0086695 II Other Income 683.69 2,246.61 -1,562.92 -69.57 Increase/(Decrease) in Stock III Total Revenue (I + II) 24,732.38 22,976.69 1,755.69 7.64117895 IV Expense Cost of Raw Materials Consumed 15,337.26 13,463.13 1,874.13 13.92 Purchases of Stock-in-Trade 257.7 202.97 54.73 26.96 Changes in Inventories -123.87 86.67 -210.54 -242.92 Employee Benefits Expense 2,115.54 1,877.58 237.96 12.67 Finance Costs 1,532.19 1,540.13 -7.94 -0.52 Depreciation and Amortization Expenses 1,266.18 1,213.48 52.70 4.34 Other Expenses 4,972.75 4,238.91 733.84 17.31 Interest 0.00 0.00 0.00 #DIV/0! Total Expense 25,357.75 22,622.87 2,734.88 12.0890055

VProfit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) -625.37 353.82 -979.19 -276.74806

Provision for Deffered Tax Liability / (Asset)

VI Exceptional Items 861.81 764.27 97.54 12.76 VII Profit/(Loss) before Tax (V-VI) -1,487.18 -410.45 -1,076.73 262.329151 VIII Tax Expenses Current Tax 0 0 0.00 0.00 Deferred Tax 1,851.00 -38.2 1,889.20 -4945.55 IX Profit/(Loss) for the year (VII-VIII) -3,338.18 -372.25 -2,965.93 796.757555 Add: Balance b/f from last period 0 0 0.00 0.00 Balance Carried to Balance Sheet


X Earning per Equity Share Basic -25.41 -2.88 Diluted -25.41 -2.88

FINDINGS

Difference in other Income is due to Sell of Profit on Fixed Assets sold in

2012.

The Company is doing Loss in the year 2013 due to Increase in the cost of

Raw Material and Other Expense. We can also see decrease in Other

Incomes.

The Company has written off advances given to its subsidiary of

Rs.861.81 lacs as permission give by RBI as management find its not

recoverable.


Statement of Balance Sheet for 2012 & 2011 ( In Lacs)S.

No. 1

S. No. 2


or Decrease

In Percentage



A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4046.88 4046.88 0 0.00 (b) Share application Money 968 968 0 0.00 (c) Reserves and Surplus 7617.46 7989.71 -372.25 -4.66 2 Non-Current Liabilities Long Term Borrowings 12,125.03 13678.89 -1553.86 -11.36 3 Current Liabilities (a) Short Term Borrowings 4,516.21 4229.56 286.65 6.78 (b) Trade Payables 2,027.82 1848.3 179.52 9.71 (c) Other Current Liabilities 4,515.65 3684.08 831.57 22.57 (d) Short Term Provisions 291.21 283.58 7.63 2.69 TOTAL LIABILITIES 36108.26 36729 -620.74 -1.690054

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 10,985.38 11033.91 -48.53 -0.44 (ii) Intangible Assets 56.42 39.46 16.96 42.98 iii) Capital Work- in- Progress 520.13 653.35 -133.22 -20.39 (b) Non-Current Investments 2,219.80 2127.85 91.95 4.32 (c) Deferred Tax Assets 1,851.00 1812.8 38.2 2.11

(d) Long Term Loans and Advances 2,482.95 2722.01 -239.06 -8.78

(e) Other Non Current Assets 39.02 63.6 -24.58 -38.65 2 Current Assets (a) Current Investments 30 30 0 0.00 (b) Inventories 3,325.14 3830.26 -505.12 -13.19 (c) Trade Receivables 4,715.11 4850.87 -135.76 -2.80 (d) Cash & Cash Equivalents 131.08 150.59 -19.51 -12.96

(e) Short Term Loans & Advances 9,575.59 9301.05 274.54 2.95


(f) Other Current Assets 176.64 113.25 63.39 55.97 TOTAL ASSET 36,108.26 36,729.00 -620.74 -1.690054

FINDINGS

In Current Liability of the company, we can see that there is increase in

Working Capital Term Loans, Foreign Currency Term Loans and Funded

Interest Term Loans.

Increase in Intangible Asset due to Additional Software Installation

Increase in Other Current Assets is due to Insurance Claim Receivables.

STATEMENT OF PROFIT & LOSS for 2012 & 2011 ( In Lacs )

SR. NO. Particulars

2011-2012 2010-2011Increase

or Decrease

In Percentage


I Gross revenue from Operations 20,730.74 17814.94 2,915.80 16.37 Less: Exice Duty -0.66 -0.69 0.03 -4.35 Net Revenue from Operations 20,730.08 17,814.25 2,915.83 16.3679638


II Other Income 2,246.61 1085.16 1,161.45 107.03 Increase/(Decrease) in Stock 0 III Total Revenue (I + II) 22,976.69 18,899.41 4,077.28 21.5735835 IV Expense Cost of Raw Materials Consumed 13,463.13 10572.86 2,890.27 27.34 Purchases of Stock-in-Trade 202.97 120.52 82.45 40.62 Changes in Inventories 86.67 -39.81 126.48 145.93 Employee Benefits Expense 1,877.58 1775.17 102.41 5.45 Finance Costs 1,540.13 1395.8 144.33 9.37

Depreciation and Amortization Expenses 1,213.48 1166.94 46.54 3.99

Other Expenses 4,238.91 3854.72 384.19 9.06 Total Expense 22,622.87 18,846.20 3,776.67 20.0394244

V

Profit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) 353.82 53.21 300.61 564.950197

VI Exceptional Items 764.27 0 764.27 100.00 VII Profit/(Loss) before Tax (V-VI) -410.45 53.21 -463.66 -871.37756 VIII Tax Expenses Current Tax 0 0 0.00 0.00 Deferred Tax -38.2 -41.8 3.60 -9.42 IX Profit/(Loss) for the year (VII-VIII) -372.25 95.01 -467.26 -491.80086 X Earning per Equity Share Basic -2.88 0.0075 Diluted -2.88 0.0037

FINDINGS


Increase in Other Incomes is due to Adjustments to Carrying Amount of Loan given to Subsidiary/JV(Net), Profit on Fixed Assets sold (Net) and Gain on Exchange Rate Difference (Net).

Exceptional Item consists of Bad Debts which are not recoverable.

COMMON SIZE ANALYSIS OF PIONEER EMBROIDERY LTD FOR THE YEAR

2014-2013

STATEMENT OF BALANCE SHEET FOR 2014 & 2013S. No.

S. No. Particulars

2013-2014 Common

size %

2012-2013 Common

size %Amount Rs. In Lacs

Amount Rs. In Lacs


A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4443.99 14.30 4443.99 13.44 (b) Share application Money 0 0.00 0 0.00 (c) Reserves and Surplus 8,847.18 28.47 4,867.70 14.72 2 Non-Current Liabilities Long Term Borrowings 1,123.96 3.62 10,022.55 30.31 3 Current Liabilities (a) Short Term Borrowings 4,901.42 15.77 4,578.69 13.85 (b) Trade Payables 1,850.00 5.95 2,127.66 6.43 (c) Other Current Liabilities 9,414.05 30.29 6,651.21 20.11 (d) Short Term Provisions 495.17 1.59 378.21 1.14 TOTAL LIABILITIES 31075.77 100 33070.01 100

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 9,640.43 31.02 10,240.86 30.97 (ii) Intangible Assets 42.79 0.14 50.45 0.15 iii) Capital Work- in- Progress 345.86 1.11 595.54 1.80 (b) Non-Current Investments 2,659.64 8.56 2,659.74 8.04 (c) Deferred Tax Assets 0.00 0.00 0.00 0.00

(d) Long Term Loans and Advances 2,007.67 6.46 2,313.93 7.00

(e) Other Non Current Assets 31.3 0.10 29.19 0.09 2 Current Assets (a) Current Investments 0 0.00 0 0.00 (b) Inventories 2,886.01 9.29 3,356.93 10.15 (c) Trade Receivables 4,655.60 14.98 4,616.52 13.96 (d) Cash & Cash Equivalents 310.98 1.00 336.98 1.02 (e) Short Term Loans & Advances 8,361.21 26.91 8,790.64 26.58 (f) Other Current Assets 134.28 0.43 79.23 0.24


TOTAL ASSET 31,075.77 100.00 33,070.01 100.00

FINDINGS:

Equity Fund of the Company has Increased from 28.16% to 42.77%. It is

due to Capital Reserve Credited by settlement of FCCB and other

settlement of loans as earlier discussed.

Long Term Liability has Reduced from 30.31% to 3.62% in 2014 year end.

its due to settlement of FCCB and reclassification long term liability to

short term liability.

The Company has 42% Equity Funds and 47 % debt Funds in 2014 out of

Company has 31% Fixed Assets and 8.5% Investment. and Company has

Loans & Advances of 35% which implies that company is not utilizing

funds properly.

The Company has 25% Inventory and Trade receivable and Only 1% cash

and cash Equivalents.

STATEMENT OF PROFIT & LOSS FOR 2014 & 2013

S.No. Particulars

2013-2014 Common size %

2012-2013 Common size %Amount

Rs. In Lacs

Amount Rs. In Lacs

I Gross revenue from Operations 27,321.83 97.02 24,048.89 97.24 Less: Exice Duty 0 0.00 -0.2 0.00 Net Revenue from Operations 27,321.83 97.02 24,048.69 97.24 II Other Income 838.6 2.98 683.69 2.76 Increase/(Decrease) in Stock


III Total Revenue (I + II) 28,160.43 100.00 24,732.38 100.00

IV Expense Cost of Raw Materials Consumed 16,699.37 61.12 15,337.26 63.78 Purchases of Stock-in-Trade 346.03 1.27 257.7 1.07 Changes in Inventories 552.16 2.02 -123.87 -0.52 Employee Benefits Expense 2,382.23 8.72 2,115.54 8.80 Finance Costs 1,667.37 6.10 1,532.19 6.37

Depreciation and Amortization Expenses 1,098.91 4.02 1,266.18 5.27

Other Expenses 5,442.91 19.92 4,972.75 20.68 Interest 0.00 0.00 0.00 0.00 Total Expense 28,188.98 103.17 25,357.75 105.44

V

Profit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) -28.55 -0.10 -625.37 -2.53

Provision for Deffered Tax Liability / (Asset)

VI Exceptional Items 663.3 2.43 861.81 3.15

VII Profit/(Loss) before Tax (V-VI) -691.85 -2.46 -1,487.18 -6.01

VIII Tax Expenses Current Tax 0 0 0 0 Deferred Tax 0 0.00 1,851.00 6.77

IX Profit/(Loss) for the year (VII-VIII) -691.85 -2.46 -3,338.18 -13.50 Balance Carried to Balance Sheet X Earning per Equity Share Basic -3.91 -25.41 Diluted -3.91 -25.41

FINDINGS and Suggestions:


Cost of Sales of the company stand at 62.5% every year. And the Gross

Profit Margin is 37.5% approximately.

The Company's Indirect Expenses consist of Finance Cost and Employee

Benefits is near about 20% and other expenses is 20%. Therefore,

including Cost of Sales and Other Expenses is 102.5%. This is the reason

company is making losses. In order to overcome the losses company

need to reduce its cost of sales and other expenses.

In some year, company has exceptional items i.e. Bad Debts. The

Company should Make proper policies to recover its Trade Receivable in

due time.


2013-2012

STATEMENT OF BALANCE SHEET FOR 2013 & 2012S. No.

S. No. Particulars

2012-2013Common size

%

2011-2012Common size %

Amount Rs. In Lacs

Amount Rs. In Lacs

A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4443.99 11.99 4046.88 11.21 (b) Share application Money 0 0.00 968 2.68 (c) Reserves and Surplus 8,847.18 23.88 7617.46 21.10


35.87 34.98 2 Non-Current Liabilities Long Term Borrowings 10,022.55 27.05 12,125.03 33.58 3 Current Liabilities (a) Short Term Borrowings 4,578.69 12.36 4,516.21 12.51 (b) Trade Payables 2,127.66 5.74 2,027.82 5.62 (c) Other Current Liabilities 6,651.21 17.95 4,515.65 12.51 (d) Short Term Provisions 378.21 1.02 291.21 0.81 TOTAL LIABILITIES 37049.49 100 36108.26 100

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 10,240.86 30.97 10,985.38 30.42 (ii) Intangible Assets 50.45 0.15 56.42 0.16 iii) Capital Work- in- Progress 595.54 1.80 520.13 1.44 (b) Non-Current Investments 2,659.74 8.04 2,219.80 6.15 (c) Deferred Tax Assets 0.00 0.00 1,851.00 5.13

(d) Long Term Loans and Advances 2,313.93 7.00 2,482.95 6.88

(e) Other Non Current Assets 29.19 0.09 39.02 0.11

2 Current Assets 0 (a) Current Investments 0 0.00 30 0.08 (b) Inventories 3,356.93 10.15 3,325.14 9.21 (c) Trade Receivables 4,616.52 13.96 4,715.11 13.06 (d) Cash & Cash Equivalents 336.98 1.02 131.08 0.36

(e) Short Term Loans & Advances 8,790.64 26.58 9,575.59 26.52

(f) Other Current Assets 79.23 0.24 176.64 0.49


TOTAL ASSET 33,070.01 100.00 36,108.26 100.00

FINDINGS:


Company has 33% Fixed Assets and 8.04% Investment. and Company

has Loans & Advances of 34% which implies that company is not utilizing

funds properly.

The Company has 24% Inventory and Trade receivable and Only 1% cash

and cash Equivalents.


S.No. Particulars



Rs. In Lacs

Amount Rs. In Lacs

I Gross revenue from Operations 24,048.89 97.24 20,730.74 90.23 Less: Exice Duty -0.2 0.00 -0.66 0.00 Net Revenue from Operations 24,048.69 97.24 20,730.08 90.22 II Other Income 683.69 2.76 2,246.61 9.78 Increase/(Decrease) in Stock 0.00


IV Expense Cost of Raw Materials Consumed 15,337.26 62.01 13,463.13 58.59 Purchases of Stock-in-Trade 257.7 1.04 202.97 0.88


Changes in Inventories -123.87 -0.50 86.67 0.38 Employee Benefits Expense 2,115.54 8.55 1,877.58 8.17 Finance Costs 1,532.19 6.20 1,540.13 6.70

Depreciation and Amortization Expenses 1,266.18 5.12 1,213.48 5.28

Other Expenses 4,972.75 20.11 4,238.91 18.45 Total Expense 25,357.75 102.53 22,622.87 98.46

V

Profit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) -625.37 -2.53 353.82 1.54

VI Exceptional Items 861.81 3.48 764.27 3.326284

VII Profit/(Loss) before Tax (V-VI) -1,487.18 -6.01 -410.45 -1.79

VIII Tax Expenses Current Tax 0 0 Deferred Tax 1,851.00 7.48 -38.2

IX Profit/(Loss) for the year (VII-VIII) -3,338.18 -13.50 -372.25 -1.62 X Earning per Equity Share Basic -25.41 -2.88 Diluted -25.41 -2.88

FINDINGS

Cost of Sales of the company stand at 62.5% every year. And the Gross

Profit Margin is 37.5% approximately.

The Company's Indirect Expenses consist of Finance Cost, Depreciation

and Employee Benefits is near about 20% and other expenses is 20%.

Therefore, including Cost of Sales and Other Expenses is 102.5%. This is

the reason company is making losses. In order to overcome the losses

company need to reduce its cost of sales and other expenses.


In some year, company has exceptional items i.e. Bad Debts. The

Company should Make proper policies to recover its Trade Receivable in

due time.


2012-2011

STATEMENT OF BALANCE SHEET FOR 2012 & 2011

S. No.

S. No. Particulars



Amount Rs. In Lacs

Amount Rs. In Lacs

A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4046.88 11.21 4046.88 11.02 (b) Share application Money 968 2.68 968 2.64 (c) Reserves and Surplus 7617.46 21.10 7989.71 21.75 2 Non-Current Liabilities


Long Term Borrowings 12,125.03 33.58 13678.89 37.24 3 Current Liabilities (a) Short Term Borrowings 4,516.21 12.51 4229.56 11.52 (b) Trade Payables 2,027.82 5.62 1848.3 5.03 (c) Other Current Liabilities 4,515.65 12.51 3684.08 10.03 (d) Short Term Provisions 291.21 0.81 283.58 0.77 TOTAL LIABILITIES 36108.26 100 36729 100

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 10,985.38 30.42 11033.91 30.04 (ii) Intangible Assets 56.42 39.46 iii) Capital Work- in- Progress 520.13 1.44 653.35 1.78 (b) Non-Current Investments 2,219.80 6.15 2127.85 5.79 (c) Deferred Tax Assets 1,851.00 5.13 1812.8 4.94

(d) Long Term Loans and Advances 2,482.95 6.88 2722.01 7.41

(e) Other Non Current Assets 39.02 0.11 63.6 0.17 2 Current Assets 0 0.00 0 0.00 (a) Current Investments 30 0.08 30 0.08 (b) Inventories 3,325.14 9.21 3830.26 10.43 (c) Trade Receivables 4,715.11 13.06 4850.87 13.21 (d) Cash & Cash Equivalents 131.08 0.36 150.59 0.41

(e) Short Term Loans & Advances 9,575.59 26.52 9301.05 25.32

(f) Other Current Assets 176.64 0.49 113.25 TOTAL ASSET 36,108.26 100.00 36,729.00 100.00


FINDINGS:


Company has 32% Fixed Assets and 8.04% Investment. and Company

has Loans & Advances of 34% which implies that company is not utilizing

funds properly.

The Company has 22% Inventory and Trade receivable and less then 1%

cash and cash Equivalents.


S.No. Particulars



Rs. In Lacs

Amount Rs. In Lacs

I Gross revenue from Operations 20,730.74 90.23 17814.94 94.26 Less: Exice Duty -0.66 0.00 -0.69 0.00 Net Revenue from Operations 20,730.08 90.22 17,814.25 94.26 II Other Income 2,246.61 9.78 1085.16 5.74 Increase/(Decrease) in Stock 0.00 0 0.00


IV Expense Cost of Raw Materials Consumed 13,463.13 58.59 10572.86 55.94 Purchases of Stock-in-Trade 202.97 0.88 120.52 0.64 Changes in Inventories 86.67 0.38 -39.81 -0.21 Employee Benefits Expense 1,877.58 8.17 1775.17 9.39 Finance Costs 1,540.13 6.70 1395.8 7.39


Depreciation and Amortization Expenses 1,213.48 5.28 1166.94 6.17

Other Expenses 4,238.91 18.45 3854.72 20.40 Total Expense 22,622.87 98.46 18,846.20 99.72

V

Profit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) 353.82 1.54 53.21 0.28

VI Exceptional Items 764.27 3.33 0 0

VII Profit/(Loss) before Tax (V-VI) -410.45 -1.79 53.21 0.28

VIII Tax Expenses Current Tax 0 0 Deferred Tax -38.2 -0.17 -41.8

IX Profit/(Loss) for the year (VII-VIII) -372.25 -1.62 95.01 0.50 X Earning per Equity Share Basic -2.88 0.0075 Diluted -2.88 0.0037

FINDINGS:

Cost of Sales of the company stand at 60 % every year. And the Gross

Profit Margin is 38% approximately.

The Company's Indirect Expenses consist of Finance Cost, Depreciation

and Employee Benefits is near about 20% and other expenses is 18.5%.

Therefore, including Cost of Sales and Other Expenses is 98.46%. Hence,

in this year company was in profit

In this year, company has exceptional items i.e. Bad Debts. The Company

should Make proper policies to recover its Trade Receivable in due time.


Findings

Working Capital of the Company is decreasing from year to year.

Which is of a Good Indicator for the company. Company need to

work in it in order to have smooth function of operation.

Year by Year the Asset of the company is being utilized properly

and in an appropriate manner

Net Worth of the Company is not being Utilized properly in the

company.

Gross Profit of the company seems to be good.

EPS in the year 2013 had dropped down to -25.85. In the year

2014 it went just -3.91 point Down. We can see huge recovery from

the year 2013 to 2014.

We can see that in the year 2012-2013, Long Term Borrowings,

part of Loan from SBI and Union Bank of India has been


restructured and converted from long term to short term Borrowings

as company was unable to meet its obligations

Short term Loans and Advances reduced due to S.R Investments

Ltd. (considered doubtful). Every year some amount of it is set off

as Doubtful debts to recover the total Investments done in this

Subsidiary company.

Additional Software was installed in the year 2011- 2012 which has

increased the Intangible Asset of the Company.

Due to continuous losses in the recent years, no deferred tax

assets has been created in the accounts. The deferred tax assets

shall be created again on turnaround of the Company.

Conclusion

Gross Profit margin of the company is good. But, Company need to work on

the Indirect expenses due to which the company is facing losses.

Company need to work on reducing its Exceptional Items i.e Doubtful

Advances written off and Assets/CWIP written off. This will help the company

to have positive returns.

Considering the analysis you can say that it’s a good time for the investors to

invest in the company.


Bibliography

Breif of a company is available at : http://www.silkolite.com/index1.html.

Company Profile Details collected from : http://www.tradeindia.com/Seller-

2927490-PIONEER-EMBROIDERIES-LTD-/

Company Profile details collected from 22nd Annual report, 2014 of the

company.

Industry Profile of Embroidery work in India is collected from :

https://www.gfe.de/Publication/Indian%20Handicrafts%20Industry.doc

Literature review collected from www.ijemr.net ( International Journal of

Engineering and Management Research

Ratio Analysis work is done from:

http://www.efinancemanagement.com/financial-analysis,

http://www.readyratios.com/reference/liquidity/,

http://www.readyratios.com/reference/profitability/


Annexure- A

Balance SheetS. No.

S. No. 2 Particulars

2013-2014

2012-2013

2011-2012

2010-2011

Amount

Rs. In LacsAmount

Rs. In LacsAmount

Rs. In LacsAmount

Rs. In Lacs

A] EQUITY AND DEBENTURES 1 Shareholders’ Funds (a) Share Capital 4443.99 4443.99 4046.88 4046.88 (b) Share application Money 0 0 968 968 (c) Reserves and Surplus 8,847.18 4,867.70 7617.46 7989.71 2 Non-Current Liabilities Long Term Borrowings 1,123.96 10,022.55 12,125.03 13678.89 3 Current Liabilities (a) Short Term Borrowings 4,901.42 4,578.69 4,516.21 4229.56 (b) Trade Payables 1,850.00 2,127.66 2,027.82 1848.3 (c) Other Current Liabilities 9,414.05 6,651.21 4,515.65 3684.08


(d) Short Term Provisions 495.17 378.21 291.21 283.58 TOTAL LIABILITIES 31075.77 33070.01 36108.26 36729

B] ASSETS 1 Non-Current Assets (a) Fixed Assets (i) Tangible Assets 9,640.43 10,240.86 10,985.38 11033.91 (ii) Intangible Assets 42.79 50.45 56.42 39.46 iii) Capital Work- in- Progress 345.86 595.54 520.13 653.35 (b) Non-Current Investments 2,659.64 2,659.74 2,219.80 2127.85 (c) Deferred Tax Assets 0.00 0.00 1,851.00 1812.8

(d) Long Term Loans and Advances 2,007.67 2,313.93 2,482.95 2722.01

(e) Other Non Current Assets 31.3 29.19 39.02 63.6 2 Current Assets (a) Current Investments 0 0 30 30 (b) Inventories 2,886.01 3,356.93 3,325.14 3830.26 (c) Trade Receivables 4,655.60 4,616.52 4,715.11 4850.87 (d) Cash & Cash Equivalents 310.98 336.98 131.08 150.59 (e) Short Term Loans & Advances 8,361.21 8,790.64 9,575.59 9301.05 (f) Other Current Assets 134.28 79.23 176.64 113.25 TOTAL ASSET 31,075.77 33,070.01 36,108.26 36,729.00


Annexure- B

STATEMENT OF PROFIT & LOSS

2013-2014

2012-2013

2011-2012

2010-2011

Particulars

Amount Rs. In Lacs

Amount Rs. In Lacs

Amount Rs. In Lacs

Amount Rs. In Lacs

I Gross revenue from Operations 27,321.83 24,048.89 20,730.74 17814.94 Less: Exice Duty 0 -0.2 -0.66 -0.69 Net Revenue from Operations 27,321.83 24,048.69 20,730.08 17,814.25 II Other Income 838.6 683.69 2,246.61 1085.16 Increase/(Decrease) in Stock 0 0 0 0 III Total Revenue (I + II) 28,160.43 24,732.38 22,976.69 18,899.41 IV Expense Cost of Raw Materials Consumed 16,699.37 15,337.26 13,463.13 10572.86 Purchases of Stock-in-Trade 346.03 257.7 202.97 120.52 Changes in Inventories 552.16 -123.87 86.67 -39.81 Employee Benefits Expense 2,382.23 2,115.54 1,877.58 1775.17 Finance Costs 1,667.37 1,532.19 1,540.13 1395.8 Depreciation and Amortization Expenses 1,098.91 1,266.18 1,213.48 1166.94


Other Expenses 5,442.91 4,972.75 4,238.91 3854.72 Total Expense 28,188.98 25,357.75 22,622.87 18,846.20

VProfit /(Loss) Before Exceptional and Extraordinary Items and Tax (III-IV) -28.55 -625.37 353.82 53.21

VI Exceptional Items 663.3 861.81 764.27 0 VII Profit/(Loss) before Tax (V-VI) -691.85 -1,487.18 -410.45 53.21 VIII Tax Expenses Current Tax 0 0 0 0 Deferred Tax 0 1,851.00 -38.2 -41.8 IX Profit/(Loss) for the year (VII-VIII) -691.85 -3,338.18 -372.25 95.01 X Earning per Equity Share Basic -3.91 -25.41 -2.88 0.0075 Diluted -3.91 -25.41 -2.88 0.0037

Pioneer Embroidery Limited

Education

Transcript of Pioneer Embroidery Limited