Pioneer Embroidery Limited

Financial Statement Analysis of Pioneer Embroidery Limited
Page 1
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 to
MR. 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 PROGRAMME
Affiliated to Gujarat Technological University
Ahmadabad
June-July 2015

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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.

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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

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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

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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.

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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 STUDY
5 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

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 Ratio Analysis
o Liquidity Ratio
o Activity Ratio
o Solvency Ratio
o Profitability Ratio
 Comparative Statement Analysis
 Common Size Analysis
35
74
87
9 Findings 99
10 Conclusion 100
11 Bibliography 101
12 Annexure
 Balance Sheet of the Company
 Profit and Loss of the Company
102

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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.
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.
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.
E

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Indian Handicrafts Industry
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
“I

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10
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 classifiedinto 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.

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 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.

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 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

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13
 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

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 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

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Value Adding Chain in Handicrafts
1
• Identification of market opportunities
2
• Prototype design and development / adaption and refinement
3
• Test marketing
4
• Upgrading equipping facilities
5
• Securing inputs
6
• Entrepreneurial hiring, training, managing
7
• Production, quality control and packaging
8
• Costing and pricing
9
• Physical distribution
10
• Export Market Development

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GlobalScenarioof EmbroideryMarket
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
69
151
205
466
164 171 117
108 57
1440
453
954
79
177 235
536
190 195
135 122
68
1642
539
1139
0
200
400
600
800
1000
1200
1400
1600
1800
Rs.inCrores
Countrywise Export of Handicrafts
1997-98
1998-99

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The Germanhandicrafts and Giftware Market
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

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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
Birthday
36%
Christmas
17%
Visit to friends/family
10%
No Special Occasion
9%Easter
7%
Thank You
4%
Others
17%
Occasions for which gift items are often purchased

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SWOT Analysis of the Indian handicrafts industry
 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

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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

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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,

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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 EmbroideriesLtd.
Table No.1 CompanyInformation
Name of the
organization
Pioneer 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

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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
Listing
Bombay Stock Exchange and National Stock Exchange
of India Ltd.
ISIN for
Demateralization
INE156C01018
Share Transfer Agent
LINK INTIME INDIA PRIVATE LIMITED
C-13, Pannalal Silk Mills Compound,
L.B.S Marg, Bhandup (West),
Mumbai – 400 078

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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:

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 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:

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 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.

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 Some Pictures of Spun Yarn are:

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History Of Pioneer Embroidery Limited
Table No.2: History ofCompany
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.

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 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.

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 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

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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.

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33
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.

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34
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

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35
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.

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36
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"
 ResearchObjectives
 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

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37
 ResearchDesign
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

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38
 Data CollectionMethods
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 CollectionPeriod
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.

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39
 AnalyticalTools
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:
 CommonSize 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.

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40
 ComparativeAnalysis
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

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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.

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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

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 CurrentRatio:
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 Asset
Current Liability
Table No. 3 (` in lacs)
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Current 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 16660.64
Current Ratio 1.82 1.58 1.25 0.98
Chart No. 3
1.82
1.58
1.25
0.98
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
2011 2012 2013 2014
CURRENTASSET
Current
Ratio
YEARS
PERCENTAGE(%)

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44
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.

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45
 Quick/Acid TestRatio:
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 2013-2014
Current 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

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46
Chart No. 4
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.
1.44
1.29
1.01
0.81
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2011 2012 2013 2014
QUICK RATIO/ACID TEST RATIO
Quick
Ratio
YEARS
PERCENTAGE(%)

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 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
*100
Current Liability
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Cash and cash
equivalents
150.59 131.08 336.98 310.98
Cash Ratio 1.50 1.15 2.45 1.87
Chart No. 5
1.50
1.15
2.45
1.87
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2011 2012 2013 2014
CASH RATIO
Cash Ratio
PERCENTAGE(%)
YEARS

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48
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.

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 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 2013-2014
Current 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
8230.50
6602.67
3444.53
-312.56
-1000.00
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
8000.00
9000.00
2011 2012 2013 2014
WORKING CAPITAL
Working Capital
Rs.inLacs
YEARS

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50
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.

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51
 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

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 Debtors / Receivable TurnoverRatio:
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 Sales
Average 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 4655.6
Bills receivable 0 0 0 0
TOTAL 4850.87 4715.11 4616.52 4655.6
Debtor / Receivable Turnover Ratio 3.67 4.40 5.21 5.87
Chart No. 7
3.67
4.40
5.21
5.87
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2011 2012 2013 2014
DEBTORS/RECEIVABLE TURNOVER RATIO
Debtors
Turnover
Ratio
YEARS
DEBTORSTURNOVERRATIO

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53
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.

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 Average CollectionPeriod
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 Months
Debtor / Receivable Turnover Ratio
Table No. 8 ('In Lacs)
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
365 days or 12 Months 12 12 12 12
Debtor / Receivable Turnover Ratio 3.671807325 4.396520972 5.20926802 5.868594811
Average Collection Period 3.27 2.73 2.30 2.04
Chart No. 8
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.
3.27
2.73
2.30
2.04
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2011 2012 2013 2014
AVERAGECOLLECTION PERIOD
No. of
Months
YEARS
PERCENTAGE(%)

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 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 Sold
Average Inventory
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Cost of Goods Sold 7160.68 6977.31 8577.6 9724.27
Average Inventory 3996.905 3577.7 3341.035 3121.47
Stock/ Inventory Turnover Ratio 1.79 1.95 2.57 3.12
Chart No. 9
1.79
1.95
2.57
3.12
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
2011 2012 2013 2014
STOCK TURNOVERRATIO
%
PERCENTAGE(%)
YEARS

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56
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.

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 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 Revenue
Fixed Assets
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Net Revenue 17814.25 20730.08 24048.69 27321.83
Fixed Assets 11726.72 11561.93 10886.85 10029.08
Assets Turnover Ratio 1.52 1.79 2.21 2.72
Chart No. 10
1.52
1.79
2.21
2.72
0.00
0.50
1.00
1.50
2.00
2.50
3.00
2011 2012 2013 2014
ASSET TURNOVER RATIO
Asset
Turnover
Ratio
YEARS
PERCENTAGE(%)

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58
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.

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59
 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

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 SolvencyRatio:
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)
*100
Total liabilities
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
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

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61
Chart No. 11
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.
3.44
2.33
-6.27
1.31
-8.00
-6.00
-4.00
-2.00
0.00
2.00
4.00
2011 2012 2013 2014
SOLVENCY RATIO
%
YEARS
PERCENTAGE(%)

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62
 Currentdebts 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 Liability
Inventory
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
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
2.62
3.41
4.09
5.77
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2011 2012 2013 2014
CURRENTDEBTS TO INVENTORY RATIO
Current
Debts
Inventory
Ratio
YEARS
PERCENTAGE(%)

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63
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.

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64
 Currentdebts 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 Liability
Net Worth
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Net 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
0.77
0.90
1.48
1.25
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2011 2012 2013 2014
CURRENTDEBTS TO NET WORTH RATIO
Current Debts to net
Worth Ratio
PERCENTAGE(%)
YEARS

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65
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.

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66
 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 Asset
Net Worth
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Fixed Asset 11726.72 11561.93 10886.85 10029.08
Net 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
0.90 0.92
1.17
0.75
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
2011 2012 2013 2014
FIXED ASSET TO NET WORTH RATIO
Fixed Asset to Net…
YEARS
PERCENTAGE(%)

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67
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.

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68
 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

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 Gross ProfitMargin:
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
*100
Revenue
2010-2011 2011-2012 2012-2013 2013-2014
Gross 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

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70
Chart No. 15
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.
37.89
30.37
34.68 34.53
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
40.00
2011 2012 2013 2014
GROSS PROFIT MARGIN
Gross Profit Margin ( % )
YEARS
PERCENTAGE(%)

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71
 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)
*100
Revenue
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
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
0.51 -1.62
-13.50
-2.46
-16.00
-14.00
-12.00
-10.00
-8.00
-6.00
-4.00
-2.00
0.00
2.00
2011 2012 2013 2014
NET PROFIT MARGIN
Net Profit…
YEARS
PERCENTAGE(%)

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72
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.

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73
 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 tax
Total assets (or Average Total assets)
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Net Income after tax 95.01 -372.25 -3338.18 -691.85
Total 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
0.00
-0.01
-0.10
-0.02
-0.12
-0.10
-0.08
-0.06
-0.04
-0.02
0.00
0.02
2011 2012 2013 2014
RETURN ON ASSET
%
PERCENTAGE(%)
YEARS

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74
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.

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75
 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) :-
EBIT
Capital Employed
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
EBIT 95.01 1129.68 45.01 975.52
Capital 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
0.01
0.09
0.00
0.07
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.10
2011 2012 2013 2014
Return On Capital Employed (ROCE)
%
YEARS
PERCENTAGE(%)

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76
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.

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77
 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 tax
Shareholder's equity
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Net income after tax 95.01 -372.25 -3338.18 -691.85
Shareholder'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
0.01
-0.03
-0.36
-0.05
-0.40
-0.35
-0.30
-0.25
-0.20
-0.15
-0.10
-0.05
0.00
0.05
2011 2012 2013 2014
Return On Equity (ROE)
%
YEARS
PERCENTAGE(%)

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78
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.

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79
 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
Particulars 2010-2011 2011-2012 2012-2013 2013-2014
Net 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
0.78
-2.88
-25.41
-3.91
-30.00
-25.00
-20.00
-15.00
-10.00
-5.00
0.00
5.00
2011 2012 2013 2014
Earningper Share
EPS
YEARS
PERCENTAGE(%)

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80
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

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81
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 2012-2013
Increase
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

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(c) Deferred Tax Assets 0.00 0.00 0 0.00
(d) Long TermLoans 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

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83
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.

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84
STATEMENT OF PROFIT & LOSS for 2014 & 2013
( In Lacs )
SR.
NO.
Particulars
2013-2014 2012-2013
Increase or
Decrease
In
Percentage
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 fromOperations 27,321.83 24,048.69 3,273.14 13.6104711
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 3,428.05 13.8605747
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 2,831.23 11.1651468
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

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85
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.

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86
( In Lacs)
S.
No.
1
S.
No.
2
Particulars 2012-2013 2011-2012
Increase
or
Decrease
In
Percentage
(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
Long Term Borrowings 10,022.55 12,125.03 -2102.48 -17.339998
(a) Short Term Borrowings 4,578.69 4,516.21 62.48 1.38346091
(b) Trade Payables 2,127.66 2,027.82 99.84 4.92351392
(c) Other Current Liabilities 6,651.21 4,515.65 2135.56 47.2924164
(d) Short Term Provisions 378.21 291.21 87 29.8753477
TOTAL LIABILITIES 33070.01 36108.26 -3038.25 -8.41428
B] 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

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(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
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
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.

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88
( 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
II Other Income 683.69 2,246.61 -1,562.92 -69.57
IV Expense
Cost of Raw Materials Consumed 15,337.26 13,463.13 1,874.13 13.92
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
V
Profit /(Loss) Before Exceptional and
Extraordinary Items and Tax (III-IV) -625.37 353.82 -979.19 -276.74806
(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
Deferred Tax 1,851.00 -38.2 1,889.20 -4945.55

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89
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
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.

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90
( In Lacs)
S.
No.
1
S.
No.
2
Particulars 2011-2012 2010-2011
Increase
or
Decrease
In
Percentage
(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
Long Term Borrowings 12,125.03 13678.89 -1553.86 -11.36
(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
TOTAL LIABILITIES 36108.26 36729 -620.74 -1.690054
B] 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
Advances 2,482.95 2722.01 -239.06 -8.78

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91
(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
Advances 9,575.59 9301.05 274.54 2.95
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.

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( In Lacs )
SR.
NO.
Particulars
2011-2012 2010-2011
Increase
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
II Other Income 2,246.61 1085.16 1,161.45 107.03
Increase/(Decrease) in Stock 0
IV Expense
Cost of Raw Materials Consumed 13,463.13 10572.86 2,890.27 27.34
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
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
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
Deferred Tax -38.2 -41.8 3.60 -9.42

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93
IX Profit/(Loss) for the year (VII-VIII) -372.25 95.01 -467.26 -491.80086
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.

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94
COMMON SIZE ANALYSIS OF PIONEER EMBROIDERY LTD FOR THE YEAR
2014-2013
STATEMENT OF BALANCE SHEET FOR 2014 & 2013
S.
No.
S.
No.
Particulars
2013-
2014 Common
size %
2012-
2013 Common
size %Amount
Rs. In
Lacs
Amount
Rs. In
Lacs
(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
Long Term Borrowings 1,123.96 3.62 10,022.55 30.31
(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
TOTAL LIABILITIES 31075.77 100 33070.01 100
B] ASSETS
(a) Fixed Assets
(i) Tangible Assets 9,640.43 31.02 10,240.86 30.97
(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

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Advances 2,007.67 6.46 2,313.93 7.00
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
(e) Short Term Loans & Advances 8,361.21 26.91 8,790.64 26.58
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.

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96
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
Less: Exice Duty 0 0.00 -0.2 0.00
Net Revenue fromOperations 27,321.83 97.02 24,048.69 97.24
II Other Income 838.6 2.98 683.69 2.76
III Total Revenue (I + II) 28,160.43 100.00 24,732.38 100.00
IV Expense
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
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
and Extraordinary Items and Tax
(III-IV) -28.55 -0.10 -625.37 -2.53
(Asset)
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

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IX Profit/(Loss) for the year (VII-VIII) -691.85 -2.46 -3,338.18 -13.50
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.

Page
98
2013-2012
S.
No.
S.
No.
Particulars
2012-2013
Common size
%
2011-2012
Common
size %
Amount
Rs. In
Lacs
Amount
Rs. In
Lacs
(a) Share Capital 4443.99 11.99 4046.88 11.21
(c) Reserves and Surplus 8,847.18 23.88 7617.46 21.10
35.87 34.98
Long Term Borrowings 10,022.55 27.05 12,125.03 33.58
(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
TOTAL LIABILITIES 37049.49 100 36108.26 100
B] ASSETS
(a) Fixed Assets
(i) Tangible Assets 10,240.86 30.97 10,985.38 30.42
(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
Advances 2,313.93 7.00 2,482.95 6.88

Page
99
(e) Other Non Current
Assets 29.19 0.09 39.02 0.11
2 Current Assets 0
(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
Advances 8,790.64 26.58 9,575.59 26.52
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.

Page
100
S.No. Particulars
2012-2013 Common
size %
2011-2012 Common
size %Amount
Rs. In
Lacs
Amount
Rs. In
Lacs
Less: Exice Duty -0.2 0.00 -0.66 0.00
II Other Income 683.69 2.76 2,246.61 9.78
Increase/(Decrease) in Stock 0.00
IV Expense
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
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
(III-IV) -625.37 -2.53 353.82 1.54
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

Page
101
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.

Page
102
2012-2011
S.
No.
S.
No.
Particulars
2011-2012
Common
size %
2010-2011
Common
size %
Amount
Rs. In
Lacs
Amount
Rs. In
Lacs
(a) Share Capital 4046.88 11.21 4046.88 11.02
(c) Reserves and Surplus 7617.46 21.10 7989.71 21.75
Long Term Borrowings 12,125.03 33.58 13678.89 37.24
(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
TOTAL LIABILITIES 36108.26 100 36729 100
B] ASSETS
(a) Fixed Assets
(i) Tangible Assets 10,985.38 30.42 11033.91 30.04
(ii) Intangible Assets 56.42 39.46
(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

Page
103
(d) Long Term Loans and
Advances 2,482.95 6.88 2722.01 7.41
2 Current Assets 0 0.00 0 0.00
(b) Inventories 3,325.14 9.21 3830.26 10.43
(c) Trade Receivables 4,715.11 13.06 4850.87 13.21
(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.

Page
104
S.No. Particulars
2011-2012 Common
size %
2010-2011 Common
size %Amount
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
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
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
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
(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

Page
105
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.

Page
106
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.

Page
107
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.

Page
108
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/

Page
109
Annexure- A
Balance Sheet
S.
No.
S. No.
2 Particulars
2013-
2014
2012-
2013
2011-
2012
2010-
2011
Amount
Rs. In Lacs
Amount
Rs. In Lacs
Amount
Rs. In Lacs
Amount
Rs. In Lacs
1 Shareholders’Funds
(a) Share Capital 4443.99 4443.99 4046.88 4046.88
(b) Share applicationMoney 0 0 968 968
(c) ReservesandSurplus 8,847.18 4,867.70 7617.46 7989.71
2 Non-CurrentLiabilities
Long TermBorrowings 1,123.96 10,022.55 12,125.03 13678.89
(a) Short TermBorrowings 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) OtherCurrent Liabilities 9,414.05 6,651.21 4,515.65 3684.08
(d) ShortTerm Provisions 495.17 378.21 291.21 283.58
TOTAL LIABILITIES 31075.77 33070.01 36108.26 36729
B] ASSETS
1 Non-CurrentAssets
(a) FixedAssets
(i) Tangible Assets 9,640.43 10,240.86 10,985.38 11033.91
(b) Non-CurrentInvestments 2,659.64 2,659.74 2,219.80 2127.85
(c) DeferredTax Assets 0.00 0.00 1,851.00 1812.8

Page
110
(d) Long Term Loans and
Advances 2,007.67 2,313.93 2,482.95 2722.01
(e) Other NonCurrent Assets 31.3 29.19 39.02 63.6
2 Current Assets
(a) CurrentInvestments 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 & CashEquivalents 310.98 336.98 131.08 150.59
(e) ShortTerm Loans& Advances 8,361.21 8,790.64 9,575.59 9301.05
(f) OtherCurrentAssets 134.28 79.23 176.64 113.25
TOTAL ASSET 31,075.77 33,070.01 36,108.26 36,729.00

Pioneer Embroidery Limited

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