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A

PROJECT REPORT ON
Financial Statement Analysis
At

Submitted to
(Ahmedabad Institute of Technology)
IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF THE
AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ASMINISTRATION

In

Gujarat Technological University


UNDER THE GUIDANCE OF
Faculty Guide (Prof. Devendra Lodha)

Submitted by
(SEJAL CHAVDA)
[Batch: 2015-17, Enrollment No.:157010592005]
(Ahmedabad Institute of Technology)
MBA PROGRAMME

Affiliated to Gujarat Technological University Ahmedabad


August, 2016

Students Declaration

I, Sejal Jayeshkumar Chavda, hereby declare that the report for Summer Internship
Project entitled Financial Statement Analysis is a result of my own work and my
indebtedness to other work publications, references, if any, have been duly acknowledged.

Place

: Ahmedabad

Date

(Sejal Chavda)

Institutes Certificate
I certified that this Summer Internship Project Report Titled Financial Statement
Analysis is the bonafide work of Ms Sejal Jayeshkumar Chavda (Enrollment
No157010592005), who carried out the research under my supervision. I also certify
further, thattothebestofmyknowledgetheworkreportedhereindoesnotformpartofany other
project report or dissertation on the basis of which a degree or award was conferred on an
earlier occasion on this or any other candidate.

Signature of the Faculty Guide


(Prof. Devendra Lodha)
Assistant Professor
Department of management studies Ahmedabad Institute of Technology

Prof. Devendra Lodha (H.O.D)


Department of management studies
Ahmedabad Institute of Technology

PREFACE
The project report is accompanied with practical experience to add some worthiness to
education. This practical training in MBA program develops core competencies of
corporate world.
Thus, we have a practical outlook of the managerial experts and witness the function of
management in real world.
My work in this project is, therefore, a humble attempt towards this end.
In spite of my best efforts, there may be errors or omissions, which may please be
excused.

ACKNOWLEDGEMENT
To make any project, essential requirement is able guidance and references without
which project is incomplete. I forward my gratitude to Mr Ahok Bothra (CFO),
Mr Ketan Desai (GM Finance), Mr Hemant Rathod and the staff of Nandan
Denim Ltd. for their support.
Secondly, I express my sincere thanks to Prof. Devendra Lodha (H.O.D.) who
guided me throughout the project and gave me valuable suggestions and
encouragement.
Lastly, I am thankful to all people who had helped me directly or indirectly to
prepare the report.

EXECUTIVE SUMMARY
Nandan Exim Limited is housed with one of the most sophisticated weaving plants and
other facilities to manufacture superior quality gray cotton fabrics, khakhis and denims.
The plant manufactures 100% cotton piece dyed fabric, blended cotton fabric and denim
keeping in tune with the fashion and market trends. The range of fabrics include denim,
twills, stretch, bull denim, broken twills. The products manufactured at Nandan Exim
Limited are primarily marketed in International as well as Domestic market.
The Company forayed into manufacturing of textiles by embarking on a project to set up
facilities for weaving of Denim Fabric in FY2004. The Company commenced full scale
commercial production of 20 MMPA capacity of Denim manufacturing facility in
FY2006. In FY2009, the Company installed 3,240 rotors for manufacture of open-end
yarn, 22,464 spindles for manufacture of ring spun yarn and 15 MW Captive Power Plant.
Problem statement based on literature review: To be accurate is a necessity while we
make the Financial Statement. (a) Accountants or financial analysts should not be rushed
in collection, preparation, analysis and interpretation off financial statements.
Horizontal analysis compares financial information over time, typically from past quarters
or years. Horizontal analysis is performed by comparing financial data from a past
statement, such as the income statement. Vertical analysis is a percentage analysis of
financial statements. Each line item listed in the financial statement is listed as the
percentage of another line item
The companys growth is 22.68% in terms of revenue, 29.72% in terms of PBT, 30.83% in
terms of PAT.
From the Financial statement analysis the company can measure its profitability. The
Directors of Nandan Denim are assessing the growth potential of the business. Nandan
Denim Ltd is in competition of Arvind and Arvee Denim. In upcoming year Nandan
Denim has planned 612 Cr project and it may possible that high competition will be there
in Market among these two companies. Nandan Denim has achieved second position
among these five companies with 51.43 cr. Net profit.

TABLE OF CONTENTS
SR.NO

PARTICULARS

PAGE NO

Preface
Acknowledgment
Executive summary

1.

Company Introduction

1.1

Company Profile

1.2

About Nandan Denim Limited

1.3

Growth of Company

1.4

Product Profile

13

1.5

SWOT Analysis

15

1.6

Industry Analysis

20

1.7

Major players in the industry

22

2.

Literature review

27

3.

Research Methodology

38

4.

Data Analysis and Interpretation

41

5.

Synopsis

53

6.

Limitations and Conclusion

58

Bibliography

CHAPTER 1
COMPANY INTRODUCTION

1|Page

1.1 Company Profile


Chiripal Group, Incorporated in the year 1972, is a professionally managed business entity
comprising of a team of professionals from different fields and expertise.The Group, which
had started with a few power looms, has evolved into multi-activity, multi-product Textile
House that produces fiber to apparel under one roof.The diversified business in the fields of
Petrochemicals, Spinning, Weaving, Knitting, Fabric Processing, Chemicals, Infrastructure,
BOPP Films and Educational Initiatives offer employment to more than 20000 people
associated directly or indirectly with the Group.With clear focus and ambitious growth plans
on the anvil, the Group has been gearing itself to take on the future challenges.
Pursuing its ambitious plans of expansion, Chiripal Group laid foundations of ultra-modern
100% cotton & blended bottom wear fabrics and the most modern & versatile denim
manufacturing project called Nandan Exim Limited.
Nandan Exim Limited is housed with one of the most sophisticated weaving plants and
other facilities to manufacture superior quality gray cotton fabrics, khakhis and denims.
The products manufactured by Nandan Exim Limited are primarily intended for sufficing the
needs of the leading customers of the country and exports to the developed markets of the
West and South East Asia, Europe & America.
The plant manufactures 100% cotton piece dyed fabric, blended cotton fabric and denim
keeping in tune with the fashion and market trends.
Also manufactured are fabrics of different weaves, dyes, combination of yarns, weights etc.
These fabrics find applications in various outfits and garments. The range of fabrics include
denim, twills, stretch, bull denim, broken twills.
The products manufactured at Nandan Exim Limited are primarily marketed in International
as well as Domestic market. Within a short span of one year, the company has been able to
supply its products to renowned national players as well as exporters. The marketing efforts
are concentrated towards having a presence among various customer groups in the
international arena like the garment manufacturers, importers, distributors, etc. and the
readymade garment exporters, renowned brands, distributors &stockists in the national
market.Customer is the heart of all the endeavors, be it sales, marketing, quality control or
R&D. So we continually exert to meet and exceed our Customer's expectation. At Nandan
Exim Limited, we believe that a healthy environment is vital to the healthy existence of
current and future generations and that one can't build a strong economy at the cost of
2|Page

endangering the environment. We also believe that both, the manufacturers and the
consumers alike must be concerned about the environment and that the preservation of the
environment is not a one-time job, but a never-ending process.
Vision Statement:
A position that we sustain by producing high quality denim that is ahead of the fusion curve
and is the choice of discerning customers across the spectrum of brands all over the world.
Contact us
Survey No. 198/1 & 203/2,
Saijpur-Gopalpur, Pirana road,
Piplej,
Ahmedabad - 382 405.
Gujarat, INDIA.
Contact +91 - 98258 00199 / 98792 00199
Fax +91 - 79 - 2573 1188
nandan@chiripalgroup.com

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1.2 ABOUT THE COMPANYNANDAN DENIM LTD


The Company was originally incorporated as Nandan Exim Private Limited on August 9,
1994. It was renamed as Nandan Exim Limited on January 16, 2004. The name of the
Company was further renamed to Nandan Denim Limited on September 3, 2013. The
Company is a part of Chiripal Group and is promoted by Mr. Vedprakash D. Chiripal and Mr.
Brijmohan Chiripal. The Company is listed on BSE and NSE. It started its business activity
with an objective to carry on the business of manufacturing, exporting and trading in textiles
and related goods. The Company commenced its commercial operation during FY1999.
The Company forayed into manufacturing of textiles by embarking on a project to set up
facilities for weaving of Denim Fabric in FY2004. The Company commenced full scale
commercial production of 20 MMPA capacity of Denim manufacturing facility in FY2006.
The Company further expanded its denim fabric capacity by 10 MMPA in FY2007, 30
MMPA in FY2011 and 10 MMPA in FY2013 thereby taking the total capacity to 70 MMPA.
In FY2009, the Company installed 3,240 rotors for manufacture of open-end yarn, 22,464
spindles for manufacture of ring spun yarn and 15 MW Captive Power Plant.
Currently, the Company is one of the largest manufacturers of denim fabric in India. Denim
fabrics woven at NDL are either made up of 100% Cotton Yarn or mixed with Lycra,
Polyester etc. depending upon the market requirement.
Thus the company before commencement of expansion project (ongoing & proposed project)
is operating denim line with an installed capacity of 700 lac meters per annum, open end yarn
with 38 tons/ day (3240 rotors) and ring frame with 16 tons/ day (22464 spindles) capacity at
existing plant site at Piplej, Ahmedabad.

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The details of present total no. of employees as on 31.12.15 are listed below:
Sr No

Particulars

No of employees

Office and Administrative Staff

301

Factory workers (Skilled and Unskilled)

729

The Main Objective of the Company is as follows:


The main objective of the Company pursued at the time of its incorporation is in line with the
proposed business plan of ring spinning yarn manufacture, open yarn spinning manufacture
and processing of fabric for shirting and khakhi.
Global Supplier
Nandan Denim is one of the largest manufacturers of denim in the world, already making its
presence felt in the domestic as well as international market. We take pride in supplying
denim fabric to the best known international brands like Polo, Ralph Lauren, Calvin Klein,
Target, Armani Exchange, Tommy Hilfiger and Ann Taylor. We have a strong dealer
network spread across the world to enable easy and timely availability with direct contacts
available in Hong Kong, Bangladesh, Egypt, Peru, Panama, Columbia and Korea.
The mixing of international customers with the domestic customers enables Nandan to mix
the two different streams of cultures, brining world to India and taking India to the world.
The products manufactured by Nandan are compliant with the stringent quality norms
specified by its valued customers. The relationship developed with the customers is nurtured
through unconditional customer satisfaction indexation, one of the barometers that Nandan
prides to possess.

5|Page

Shared Values

Passion leading to excellence It is the driving force that prods us towards greater heights in
whatever we do Agility to stay ahead and to innovate We are self-motivated towards being
a step ahead of the competition and pioneering changes that revolutionize the industry
Aggression for Growth of all stakeholders Growth for us means collective progress for all
our stakeholders our customers, employees, investors and the community at large
Ethical Behaviour that underlines all our practices We try to be absolutely fair and
transparent in all our dealings with internal and external bodies
Respect for diverse views We value opinions and beliefs of individuals and communities
without any bias that allows us to have a well-rounded approach
Care for the environment and the community We make sure that our processes and products
do not harm the environment or the communities we come in contact with and constantly
work towards a more sustainable future for all
Collaborative and Relationship Driven - We value relationships with our employees as well
as the communities that we come in contact with and strive relentlessly to empower them
Customer Orientation - We believe that our greatest strength lies in knowing our customers
and anticipating their needs in advance and doing our best to meet them in time
6|Page

Shareholding Pattern
The authorized share capital of the company is Rs. 100Crore divided into 10Crore equity
shares of Rs 10/- each. The issued, subscribed and paid up capital is Rs. 45,54,90,560 as on
March 31, 2015.
The shareholding pattern of the company as on 31st Dec 2015 is as under:
Sr No

Particulars

Promoter

Shares in no.s
and 27758720

%
60.94%

Promoter Group
2

Public Shareholding

Institutions ( FI / 1560099

3.43%

Govt/ FII)
B

Bodies Corporate

3425168

7.52%

Individuals

9874338

21.71%

Non Residents

2915279

6.40%

Sub Total 2

17774784

39.06%

Total

45533504

100.00%

7|Page

Board of Directors
Promoters belong to Chiripal Family of Ahmedabad, Gujarat and are fully involved in the
textile business. The Promoters have over 30 years of experience in the field of
manufacturing, trading and export of various textile products.
The Board comprises of: No

Director Name

Designation

ShriVedprakash D Chiripal

Director

ShriBrijmohan D Chiripal

Managing director

Shri T. S. Bhattacharya

Professional Director

Shri Ambalal C. Patel

Professional Director

ShriGiraj Mohan Sharma

Professional Director

Ms. Pratima Ram

Professional Director

Dr. Yasho V. Verma

Professional Director

8|Page

1.3 GROWTH OF THE COMPANY


NDL is one of the largest manufacturers of denim fabric in India.
Group has established strong business relations with various suppliers and vendors for raw
material, ensuring smooth operations of the various divisions.
Group has established a name for itself in the textile sector, as is evidenced from the fact that
leading domestic and international companies are sourcing raw materials for their products
from the Group.
Promoters and management team are well experienced and qualified personnel for
implementing the proposed project and managing its day to day operations.

9|Page

Functional management is the most common type of organizational management. The


organization is grouped by areas of specialty within different functional areas (e.g., finance,
marketing, and engineering). Some refer to a functional area as a "silo". Besides the heads of
a firm's product and/or geographic units the company's top management team typically
consists of several functional heads such as the chief financial officer, the chief operating
officer, and the chief strategy officer. Communication generally occurs within a single
department. If information or project work is needed from another department, a request is
transmitted up to the department head, who communicates the request to the other department
head. Otherwise, communication stays within the department. Team members complete
project work in addition to normal department work.

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Social Responsibility
Corporate Social Responsibility is a form of corporate self-regulation integrated into a
business model. CSR is about capacity building for sustainable livelihoods. With the same
objectives, Chiripal Group gave birth to Chiripal Charitable Trust. The CSR activities of the
Group are guided by the vision and philosophy of the Chairman, Mr. Vedprakash D. Chiripal,
who got this inspiration from his parents. He enunciated the value of trusteeship in business
and laid strong foundation for its ethical and value-based functioning. As a responsible
"Corporate Citizen", the Group is engaged in various social welfare activities. Through its
social commitment, it intends to promote initiatives, for educational and health awareness
amongst the weaker sections of the society.

An effort towards saving lives


Every year, it organizes an annual blood donation camp with support from Prathma Blood
Centre, at the corporate office and all over the Group units, where thousands of units of blood
is collected, through voluntary donation and active participation of our staff members and
workers.
Helping people our employees and the community
Every year, as the pilgrims of Dakor temple pass through Dakor, the trust organises a rest
camp for them where hot water bath, massages and meals are served to over 10-12 lakh
pilgrims. In addition to this, as a regular practice, the trust and the companies run employee
welfare schemes for the benefit of our employees and their families.

Education
FNandan Denim plans to develop education facilities in villages around its plants to provide
high quality education to village children at affordable cost.
Sanitation
Nandan Denims CSR plan also includes development of sanitation facilities in villages
around its plants.

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Green Belt Development


Nandan Denim has committed itself to develop green belt at its factories. We have already
planted over 25000 trees and the counting continues with each day.
An open agenda
Unlike other corporate, at Nandan we keep re-visiting our CSR agenda to assess and develop
the model with the change in the time. The above items are assessed as immediate need in the
surrounding areas and the list gets updated on regular basis.

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1.4 PRODUCT PROFILE

Denim

Khaki

Shirting

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The Denim Fabrics of company is regarded for its premium quality. The composition of
these fabrics consists of 100% cotton, cotton spandex, cotton poly, cotton poly spandex,
cotton modal, cotton tencel etc. The Stretch Denim Fabric of our company is very popular for
the comfort that one gets while wearing it. With stunning colors, these cotton fabrics are
popular among the people of all ages. We stand top among the Stretch Denim Fabric
Manufacturers in India. We are also among the major Suppliers of Denim Fabrics.
The Bottom Weight Fabrics our company are well-marked for their superior standard of
quality. The Bottom Weight Garments manufactured form these fabrics are very much in
demand in all over India. The latest sophisticated technology is used in the manufacturing
process so as to maintain a higher standard of quality. These are extremely comfortable to put
on. Beside a reliable manufacturer, we are among the prominent Bottom Weight Cotton
Fabrics Suppliers in India whose products are supplied to all over India.

Quality System of Nandan Denim


"Quality is never an accident. It is always the result of an intelligent effort"
We ensure that the quality system laid and followed by Nandan to deliver promised
performance of the products is regularly evaluated, criticized and improved to exceed
customer requirements and industry standards. We take quality as the mantra for our success
and practice at each process to consistently adhere and exceed what we have achieved once.
Quality is appreciable only if it is practiced consistently. Internal audit mechanism of the
technical cells ensures that there is no miss on this front.
The products manufactured at Nandan meet the roughest and toughest quality tests in Fully
Computerised Quality Testing Laboratory. The auto dispensing laboratory with all the testing
equipment checks for colour fastness, shrinkage, GSM, pH, pilling, abrasion, perspiration
fastness, wash fastness, skew movement and bowing, tearing & tensile strength, stiffness of
fabric, Hunter lab shade grouping and visual shade grouping, etc. The lab is also equipped
with state-of-the-art testing equipment for cotton and yarn to ensure quality ab initio. All the
important cotton quality parameters are tested using Uster HVI and AFIS.
The processed fabric is suitably packed to ensure fabric safety during the transit.

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1.5 SWOT ANALYSIS OF INDIAN TEXTILE INDUSTRY

The Indian Textile industry adds 14% to the industrial production and 8% to the GDP of
India. It provides employment to 38 million people and thus, is the second largest
employment provider after agriculture. The Indian Apparel & Textile Industry is one of the
largest sources of foreign exchange flow into the country with the apparel exports accounting
for almost 21% of the total exports of the country. A systematic SWOT analysis of the textile
and apparel industry indicates the following: STRENGTH
1. Raw material base
India has high self sufficiency for raw material particularly natural fibres. Indias
cotton crop is the third largest in the world. Indian textile Industry produces and
handles all types of fibres.
2. Labour
Cheap labour and strong entrepreneurial skills have always been the backbone of the
Indian Apparel and textile Industry.
3. Flexibility
The small size of manufacturing which is predominant in the apparel industry allows
for greater flexibility to service smaller and specialized orders.
4. Rich Heritage
The cultural diversity and rich heritage of the country offers good inspiration base for
designers.
5. Domestic market
Natural demand drivers including rising income levels, increasing urbanisation and
growth of the purchasing population drive domestic demand.

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WEAKNESS
1. More dependence on cotton
Due to over specialization in cotton, the bulk of the international market is missed
out, synthetic products in India are expensive and fabric required for items like
swimsuit, sky-wear and industrial apparel is relatively unavailable.
2. Spinning Sector
Spinning sector lacks modernization and there is a need of introducing new
technology.
3. Weaving Sector
India has relatively less number of shuttle-less loom.
4. Fabric Processing
Processing is the weakest link in the Indian textile value chain, adversely affecting its
ability to compete in exports.
5. Poor Infrastructure
High power costs and long export lead times are eroding Indias export
competitiveness across the textile chain.
6. Low Labour Productivity
Productivity levels for manufacturing various apparel items are far lower in India in
comparison with its competitors.
OTHER WEAKNESSSES

Less attention on man power training

Poor quality standards

Distance of the potential market

Lower average consumption in domestic market

Lack of professionalism and integration of supply chain

Dependence on quota system

Very low investment on R&D

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Limited exploitation of economies of scale

OPPORTUNITIES
1. Growing Industry
World textile trade would continue to grow at a rate of 3-4% to reach $200-210 billon
by 2010.
2. Market access through bilateral negotiation
The trade is growing between regional trade blocs due to bilateral agreements
between participating countries.
3. Integration of Information technology
Supply Chain Management and Information Technology has a crucial role in
apparel manufacturing. Availability of EDI (Electronic Data Interchange), makes
communication fast, easy, transparent and reduces duplication.
4. Opportunity in High Value Items
India has the opportunity to increase its UVRs (Unit Value Realization) through
moving up the value chain by producing value added products and by producing
more and more technologically superior products.
THREATS
1. Decreasing Fashion Cycle
There has been an increase in seasons per year which has resulted in shortening of the
fashion cycle.
2. Formation of Trading Blocks
Formation of trading blocs like NAFTA, SAPTA, etc; has resulted in a change in the
world trade scenario. Existence of bilateral agreements would result in significant
disadvantage for Indian exports.
3. Phasing out of Quotas
India will have to open its protected domestic market for foreign players thus
domestic market will suffer.
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SWOT Analysis of the Company


Strengths

This project is promoted by the Chiripal Group. The Chiripal Group has been active
in textile business since 1972 and has promoted several successful ventures in textile
sector.

The proposed factory site is near Ahmedabad city which is very well connected by
road, rail, sea and air to major cities of India and rest of the world.

The machinery and the technology chosen for the manufacture of cotton yarn are
latest and proven.

This project is being implemented along with the ongoing project. Following are the
some of the facilities which will be common for ongoing and proposed spinning unit:

Land

Humidification Plant, yarn testing facilities

Technical staff

Air Compressor

All these facilities will help NDL to keep the project cost comparatively on lower
level to make the project more profitable and viable.

Similarly for the processing NDL do not have to incur capital expenditure towards
land.

Required skilled and un-skilled labour is easily available in the local and nearby area.

Weaknesses

The company has control over the entire value chain i.e. from spinning to marketing
and distribution except raw material i.e. cotton production

The management will take appropriate & timely measures to address the problem by
passing the incremental cost to customers by adjusting the selling price accordingly.

Opportunities

The Company is planning to export majority of its product range. The proposed IndiaEU FTA and the initiative like Make in India can provide significant growth

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opportunities of Europe market.

Chiripal Group of Companies has multi-location market presence. This is great


opportunity for NDL to establish its product faster domestically as well as globally.

Threats

Price of the raw cotton and the final yarn which is beyond the control of individual
unit - has been volatile in the recent past. It depends more on the ability of The
Company to handle such a situation in future. Profitability of the Company would be
adversely affected in the event of price volatility, availability of this raw material and
the demand for the yarn being produced.

Any adverse change in government regulations may affect the industry and
consequently the operations of the Company.

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1.6 INDUSTRY ANALYSIS


Growth and Evaluation of Industry in India
India is the second largest producer of textiles and garments in the world. The Indian textiles
and apparel industry is expected to grow to a size of US$ 223 billion by 2021, according to a
report by Technopak Advisors. This industry accounts for almost 24% of the worlds spindle
capacity and 8% of global rotor capacity. Abundant availability of raw materials such as
cotton, wool, silk and jute as well as skilled workforce have made the country a sourcing hub.
The textiles industry has made a major contribution to the national economy in terms of
direct and indirect employment generation and net foreign exchange earnings. The sector
contributes about 14 per cent to industrial production, 4 per cent to the gross domestic
product (GDP), and 27 per cent to the country's foreign exchange inflows. It provides direct
employment to over 45 million people. The textiles sector is the second largest provider of
employment after agriculture. Thus, growth and all round development of this industry has a
direct bearing on the improvement of the Indias economy.

Growth of Textile Industry


The Indian textiles industry is set for strong growth, buoyed by strong domestic consumption
as well as export demand. The most significant change in the Indian textiles industry has been
the advent of man-made fibres (MMF). India has successfully placed its innovative range of
MMF textiles in almost all the countries across the globe. MMF production recorded an
increase of 10 per cent and filament yarn production grew by 6 per cent in the month of
February 2014. The productions of MMF increased by about 4 per cent during the period
April 2013February 2014.While, the production of Cotton Yarn increased by about 10 per
cent during February 2014 and by about 10 per cent during April 2013February 2014.
Blended and 100 per cent non-cotton yarn production increased by 6 per cent during February
2014 and by 8 per cent during the period April 2013February 2014. Cloth production by
mill sector registered a growth of 9 per cent in the month of February 2014 and of 6 per cent
during April 2013February 2014. Cloth production by power loom and hosiery increased by
2 per cent and 9 per cent respectively, during February 2014. The total cloth production grew
by 4 per cent during February 2014 and by 3 per cent during the period April 2013February
2014. Textiles exports stood at US$ 28.53 billion during April 2013January 2014 as
compared to US$ 24.90 billion during the corresponding period of the previous year,
registering a growth of 14.58 per cent. Garment exports from India is expected to touch US$
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60 billion over the next three years, with the help of government support, said Dr A
Sakthivel, Chairman, Apparel Export Promotion Council (AEPC). The textiles sector has
witnessed a spurt in investment during the last five years. The industry (including dyed and
printed) attracted foreign direct investment (FDI) worth Rs 6,710.94crore (US$ 1.11 billion)
during April 2000 to February 2014.

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1.7 MAJOR PLAYERS IN THE INDUSTRY

Competitors of Nandan Denim Ltd.


Arvind
Started in 1931 by three brothers, Mr Kasturbhai Lalbhai, Mr Chimanbhai Lalbhai
and Mr Narottambhai Lalbhai, with a share capital of Rs 2,525,000 (US$
41,957*), Arvind Mills was set up with the aim of manufacturing high-end
superfine fabrics in India. The company has carved out an aggressive strategy to
verticalise its current operations by setting up world-scale garmenting facilities
and offering a one-stop shop service, by offering garment packages to its
international and domestic customers. With their growing global footprint, Arvind
has carved a niche with brand names like Arrow, Flying Machine, USPA, New
Port, Mega Mart, and The Arvind Store. Today, Arvind Mills has diversified into
other major segments such as fabrics, garments, advanced materials, chemicals
and dyes, retail, engineering, real estate, sustainable agriculture, and telecom.

KG Denim
It is a premier denim and apparel fabric manufacturer, catering to leading fashion
brands and retailers worldwide. During their 70 year journey, they have remained
committed to a simple mantra, believe in enabling fashion. And a mere look at
their journey so far bears testimony to this fact. Their diverse and value integrated
approach has seen them go from strength to strength. From being the reigning
kings of denim, today, they are poised on the threshold of success in the home
textile arena. The journey ahead seems as exciting.

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Aarvee Denim
Aarvee Denims and Exports Ltd is a leading global player in the textile industry.
Being backed by experienced promoters, the company is spreading its wings all
over the globe at a very fast pace. Established in 1988 by Arora& VB Group,
which has been involved in textile trade for over 50 years, are the forces behind
this dynamic organization. More than five decades of experience, well qualified
human resources and state of the art production units have made ADEL today
Worlds one of the largest Vertically Integrated Denim Mill.
The Company has its integrated productions of:
Yarn (Open End, Ring & PTY): Capacities of 39,000 metric (tons/annum)
Denim Fabric: 85 million meters/annum
Non-Denim Bottom Wear Fabric: 18 million meters/annum
Apparels: 3.5 million pcs/annum
Company is also into Green energy generation with Installations of 20.5 MW
Wind Power.

R&B Denims
R&B Denims is being promoted by the RawatKhedia and the Borana groups,
undoubtedly two of the most influential textile houses in the polyester hub that
Surat is. Rawat Khedia group is currently under the leadership of Mr. Anand
Dalmia, whereas the Borana group is being headed by Mr. Mangilal Borana, both
of whom are supported by their sons.
Both of these companies have a long lineage of more than 30 years each, in the
textile industry, and are very well known in their areas of expertise. The Borana
group, today, is capable of weaving output value of more than 1.5 million meters
of polyester Grey fabrics a month, whereas the Rawat Khedia group has a
processing output of more than 5 million meters of premium quality synthetic
fabrics per month. The stats and figures are very much the proof of the enormity
of these companies, which couldnt have been achieved ever, if they had not stuck
to the international standards in terms of quality and services policies that the
company adheres by.

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Comparison Chart of Major Competitors of NDL

Name

Last Price Market

Sales Turnover

Net Profit

Total Assets

Cap.
(Rs. cr.)
Arvind
Nandan
Denim

307.10

7,930.64

5,407.26

318.85

5,671.77

132.90

638.57

1,156.73

63.32

681.76

70.15

164.57

841.23

7.03

583.99

Aarvee
Denim

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Five Forces Analysis assumes that there are five important forces that determine
competitive power in a business situation. These are:
1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices. This
is driven by the number of suppliers of each key input, the uniqueness of their product
or service, their strength and control over you, the cost of switching from one to
another, and so on. The fewer the supplier choices you have, and the more you need
suppliers' help, the more powerful your suppliers are.
2. Buyer Power: Here you ask yourself how easy it is for buyers to drive prices down.
Again, this is driven by the number of buyers, the importance of each individual buyer
to your business, the cost to them of switching from your products and services to
those of someone else, and so on. If you deal with few, powerful buyers, then they are
often able to dictate terms to you.
3. Competitive Rivalry: What is important here is the number and capability of your
competitors. If you have many competitors, and they offer equally attractive products
and services, then you'll most likely have little power in the situation, because
suppliers and buyers will go elsewhere if they don't get a good deal from you. On the
other hand, if no-one else can do what you do, then you can often have tremendous
strength.
4. Threat of Substitution: This is affected by the ability of your customers to find a
different way of doing what you do for example, if you supply a unique software
product that automates an important process, people may substitute by doing the
process manually or by outsourcing it. If substitution is easy and substitution is viable,
then this weakens your power.
5. Threat of New Entry: Power is also affected by the ability of people to enter your
market. If it costs little in time or money to enter your market and compete
effectively, if there are few economies of scale in place, or if you have little protection
for your key technologies, then new competitors can quickly enter your market and
weaken your position. If you have strong and durable barriers to entry, then you can
preserve a favourable position and take fair advantage of it.

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CHAPTER 2
LITERATURE REVIEW

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2.1 FINANCIAL STATEMENTS ANALYSIS - AN INTRODUCTION


Analysis means establishing a meaningful relationship between various items of the two
financial statements with each other in such a way that a conclusion is drawn. By financial
statements we mean two statements:
1. Profit and loss Account or Income Statement
2. Balance Sheet or Position Statement
These are prepared at the end of a given period of time. They are the indicators of
profitability and financial soundness of the business concern. The term financial analysis is
also known as analysis and interpretation of financial statements. It refers to the establishing
meaningful relationship between various items of the two financial statements i.e. Income
statement and position statement. It determines financial strength and weaknesses of the firm.
Analysis of financial statements is an attempt to assess the efficiency and performance of an
enterprise. Thus, the analysis and interpretation of financial statements is very essential to
measure the efficiency, profitability, financial soundness and future prospects of the business
units.

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2.2 BACKGROUND OF THE STUDY


Financial statement analysis is an integral and important part of the broader field of
business analysis. Business analysis is the process of evaluating company's economic
prospects and risks. This includes an analyzing a company's business environment, its
strategies, and its financial position and performance. Business analysis is useful in a wide
range of business decisions such as whether to invest in equity or in debt securities, whether
to extend credit through short or long term loans, how to value a business in an initial public
offering (IPO), and how to evaluate restructurings including mergers, acquisitions, and
divestitures.
Financial Statement Analysis is the application of analytical tools and techniques to general
purpose financial statements 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. It does not lessen the
need for expert judgment but, instead, provides a systematic and effective basis for business
analysis.

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2.3 LITERATURE REVIEW (RESEARCH PAPERS, BOOKS, WEBSITES)


Literature Review is the documentation of a comprehensive review of the published and
unpublished work from secondary sources of data in the areas of specific interest to the
researcher. The main aim is to find out problems that are already investigated and those that
need further investigation.

1. Florenz C. Tugas (2009-2011)


Most financial statement analyses focus on firms belonging to industries that either
contribute significantly to economic figures or posit in a highly competitive business
environment. Whatever the motivation may be, financial statement analysis should be
made available to all industries for reasons of comparability and benchmarking. So
much so to industries that silently propel economic development and growth, of
which the education subsector is. In the Philippines, there are only three listed firms in
the education subsector. These are Centro Escolar University (CEU), Far Eastern
University (FEU), and iPeople, Inc. (Malayan Colleges). This research paper aims to
analyze the financial statements of these three firms for three periods (2009, 2010,
and 2011) using liquidity ratios, activity ratios, leverage ratios, profitability ratios, and
market value ratios. For liquidity, the following ratios were used: current ratio; quick
or acid-test ratio; cash flow liquidity ratio; average collection period; and days
payable outstanding. For activity, the following ratios were used: accounts receivable
turnover; accounts payable turnover; fixed assets turnover; and total assets turnover.
2. BhargavPandya PhD
Ratio analysis has been a primary tool of conducting financial analysis of any
company. Different ratios highlight overall financial position of a company. This
research paper aims at analyzing the financial performance of Tata Steel Ltd using the
framework of ratio analysis. The basic objective of this paper is to evaluate and judge
the performance of Tata Steel during the research period. The reference period for the
study is 10 years beginning from year 2001-02 to 2010-11.Data for the study has been
taken from the annual report of Tata steel for the year 2010-11. The study reveals that
Tata Steel performed well in terms of return available to all the investors measured as
return on average capital employed. It also revealed that Tata steel offered a higher
return to equity shareholders measured in terms of return on equity and earnings per

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share during the reference period .However, declining return on average net worth on
year on year basis is a cause of concern for TSL. Besides, this it was also found that
debt policy of the company is very conservative as it uses lower degree of risk to
avoid financial risk and insolvency risk. Though, TSL is performing well at least in
terms of book value measures as highlighted above, markets dont seem to be
favouring the stock of TSL as it is offering lower premium on its share in terms of
low P/E Ratio which also offers an opportunity to conduct further research
KEYWORDS Ratio, Return, net worth, equity, earnings.

3. NWOKEJI OGONNA UZOCHUKWU (AUGUST, 2012)


Financial Statement Analysis and Interpretation is a very vital instrument of good
management decision-making in business enterprise. Good decisions ensure business
survival, profitability and growth. Without financial statement analysis in investment
decisions, an enterprise is likely to make decisions, which could spell its doom. Poor
or lack of qualitative financial statement analysis could lead to investment returns,
low profitability and even inability to identify viable investment opportunities. The
main objective of this project is therefore, was to determine how firms could use
financial statement analysis and interpretation to aid management decisions and to
avert the problems highlighted above. Primary and secondary data are employed to
broaden the scope of this study. Primary data are sourced from questionnaire
responses. This provided data for the validation of the hypotheses tested with the use
of chi-square (X2). The test revealed as follows: (1) Significant difference between
the returns of the financial statement in Analysis and Interpretation based on
management decision. (2) Organizational profitability has relationship with financial
statement analysis and interpretation based management decision but not
significantly. The project concludes that companies should pay great attention to the
use of financial statement analysis so as to properly equip themselves with this
invaluable tool.

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4. SALAMI & MARTIKAINEN (1994)


It is obvious that the existing main research areas in financial ratio analysis are fairly
separate from each other sometimes with traditions of their own. Historically, these
trends have developed to a degree on their own without a distinct theoretical
framework to encompass the entire field of financial statement analysis. Of the four
areas reviewed in this paper only the first and the second are closely interrelated. The
research on the functional form of financial ratios has been characterized by
theoretical discussions about the ratio format in financial ratio analysis and empirical
testing of the ratio model. We conclude from the review that the proportionality
assumption for financial ratios is stronger within an industry than between industries.
Moreover, proportionality varies from ratio to ratio, and between time periods
indicating problems in temporal stability. The research on the distributional
characteristics of financial ratios has focused much on the question of normality of the
financial ratio distributions because normality would be very convenient in statistical
analysis. The empirical results, however, indicate that in many cases the financial
ratios follow other than the normal distribution. Part of the research has sought to
restore normality by transformations of the data or by eliminating outlier
observations. Some improvement towards normality has been observed, but in many
cases it has been inadequate. The research on classifying financial ratios into
parsimonious sets can be in our opinion best characterized as the following trends:
pragmatically empiricism, deductive approach, inductive approach, and confirmatory
approach. The review shows that the number of essential financial ratios often can be
reduced to about 4-7 essential ratios. However, empirically based categorizations are
not stable across the different studies that is there is no clear consensus what the
categories are, except that profitability and solidity commonly appear. This dispersion
of the inductive empirical results has given rise to using theoretical classifications and
then seeking empirical confirmation of a priori classifications. The most prevalent
method has been factor analysis, although also other options have been used.

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5. Edward J. Riedl * Harvard Business School(October 2007)


This paper investigates whether presentation of special items within the financial
statements reflects the firms underlying economic performance or opportunism. We
examine the presentation of recognized special items either as a separate line item on the
income statement or aggregated within another line item with disclosure only in the
footnotes. Our study is motivated by standard-setting interest in performance reporting
and financial statement presentation, as well as prior research investigating managers
presentation choices in other contexts. Using different constructs of persistence to capture
the economics of reported special items, we find evidence consistent across a range of
specifications that special items highlighted on the income statement are more transitory
than those revealed only in the footnotes. For most special items, these results are
consistent with this presentation decision reflecting underlying firm performance. For
subset observations namely, those likely to reflect big bath reporting incentives we
provide limited evidence suggestive of opportunism in this presentation decision.
6. Karnataka Power Corporation Limited, Bangalore
The Karnataka Power Corporation Limited (KPCL) is mainly involved in the generation
of power and is the sole administrator for the power generation in the state. It was formed
on 20th I. INTRODUCTION July 1970 as a sister concern to Karnataka Electricity Board
(KEB) in order to eradicate the power famine of the state. The present study is conducted
to analyze the financial performance of Karnataka Power Corporation Limited with the
help of various ratios. From the present study it is found that company financial
performance is seeing to be sound, because the company trying to increase its production
and also net profit.
7. Stephen H. PENMAN (April 1989)
On the basis of an extensive financial statement analysis we have derived a summary
measure from financial statements that predicts future stock returns. Although we cannot
be absolutely sure that this measure is not solely a risk attribute, the analysis indicates that
this is not so. It appears that this fundamental measure captures equity values that are not
reflected in stock prices. We feel reasonably confident in our conclusion because of the
conservative approach to the data. We followed a fixed, preset program of investing in
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stocks which may not be optimal. We derived the value measure based on observed
correlations with one-year-ahead earnings and ignored earnings for years further in the
future. The model estimated to predict these earnings did not exploit all aspects of the
data. It was based on a dichotomous specification of future earnings rather than on actual
dollar amounts and was not re-estimated every year in the sample period. Further, it was
based on a pooling of all firms and one suspects that industry-specific or firm-specific
models would produce improvements, provided enough data were available to estimate
coefficients with precision.
8. Anaja Blessing & Emmanuel E. Onoja
This study analyzes the role of financial statements on investment decision making: a
case of United Bank for Africa Plc. in Nigeria. Financial Reporting Standards and
Practices have in the recent past come under great criticisms, demanding that accountants
take further steps in ensuring that the true and fair view of the actual worth of business
are also incorporated in the financial statements published by them. The general objective
is to ascertain the role of financial statement on investment decision making in United
Bank for Africa Plc. of Nigeria .This study used the secondary data from ten years
financial statements of the bank. Ordinary least squares (OLS) regression method of
analysis, was adopted to test the hypotheses. The parameter estimates of the regression
equation obtained revealed that, the transparency of financial statements of the bank has
significant influence on the investment decision making of the users of financial
statements

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9. Howard E. Johnson
Financial statement analysis is fundamental to a corporate acquirers assessment of an
acquisition or merger candidate. As part of its due diligence investigation, a corporate
acquirer typically analyzes the current and prospective financial statements of a target
company. This analysis is used in estimating the value of the shares or net assets of the
target company, and in determining the price and terms of a transaction the acquirer is
prepared to offer and accept. This paper will address the practical applications of financial
statement analysis typically performed by corporate acquirers in open market valuation
and pricing exercises. This paper is not intended to be an all-inclusive discussion, and
some of the items discussed may not be applicable in a given situation. Every open
market transaction is unique, and judgment is required to determine the appropriate nature
and level of financial statement analysis that should be undertaken in each case.
10. Hayden Wimmer, Roy Rada
Determining which attributes may be employed for predicting the market capitalization of
a business firm is a challenging task which may benefit from research intersecting
principles of accounting and finance with information technology. In our approach,
information technology in the form of decision trees and genetic algorithms is applied to
fundamental financial statement data in order to support the decision making process for
predicting the direction of the value of a company with value defined as the market
capitalization. The decision process differs from year to year; however, the amount of
variation is crucial to a successful decision making process. The research question posed
is how much variation occurs between years? We hypothesize the amount of variation
is smaller than half the number of financial statement attributes that may be employed in
the decision making process. We develop a system which tests the amount of variation
between years measured as the amount of generations required to reach a target level of
fitness. The hypothesis is tested using data filtered from Computers global database. The
results support the research hypothesis and advance us toward answering the research
question. The implications of this research are the possibility to improve the decision
process when employing financial statement analysis as applied to the market
capitalization and financial valuation of business firms.

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Book Reviews:
1. Financial Statement Analysis Gokulsharma
Simply speaking, financial statements mean the statements showing the financial affairs of a
person, an enterprise, or an accounting unit. They need to be interpreted and analyzed from
various angles to get the true picture. This book, now in its Second Edition, explains the
objectives of financial statement analysis and provides with examples the major tools and
techniques used for such an analysis. In this edition, the new format for income statement
prescribed in Part II of Schedule VI of the Companies Act, 1956 has been incorporated.
Implications of these changes on the analysis and interpretation of the statement have also
been discussed. The book is meant for the undergraduate and postgraduate students of
Management and Commerce.
2. Fundamentals of Financial Management
It covers all aspects of the subject, from the basics, to financial analysis, budgeting, planning,
management of working capital, and long term financing. The book begins with an Overview
section. This provides an introduction to Financial Management and to the Financial
Environment. The next part covers Financial Planning and Analysis. This section explains
concepts like taxes, cash flow, financial statements, and analysis of funds flow and
statements. It also discusses financial planning and forecasting.
The third part covers the Fundamental Valuation Concepts. This section looks at risk and
return, and Securities valuation. The next two parts focus on capital structure, budgeting and
dividends. These sections discuss cost of capital, capital structure, planning the capital
structure, share valuation and dividend policy. The chapter on Capital budgeting also includes
techniques of capital budgeting and analyzing risks in capital budgeting. Part seven goes into
Long Term Financing. It covers securities market and sources of long term finance.
The next part discusses Working Capital Management. It covers topics like working capital
policy and financing, inventory management, and cash and credit management. The last part
looks at some special topics like acquisitions, restructuring and mergers. It also discusses
international finance management, and project finance, leasing and hire purchase.
Fundamentals of Financial Management provide a good coverage of the basic concepts
relating to the financial environment. The topics explained include tax systems, financial
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institutions, banking arrangements and the regulatory framework. All the concepts are
explained using numerous examples and illustrations. Besides the illustrations given within
the chapter, additional concepts, tools and techniques with illustrations are provided at the
end of chapter sections. The book takes an analytical approach, and explains the various
analytical methods in context.

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CHAPTER 3
RESEARCH METHODOLOGY

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3.1 PROBLEM STATEMENT BASED ON LITERATURE REVIEW


After the literature review I come to know about the importance of the financial statement in
any kind of industry. To be accurate is a necessity while we make the Financial Statement.
From it we come to know about the profitability of the company.
The researcher recommends the following:
(a) Accountants or financial analysts should not be rushed in collection, preparation, analysis
and interpretation off financial statements.
(b) Financial statements should be made to reflect current cost accounting to eliminate or
reduce the effects to historical cost principle and inflation risk element.
(c) A combination of different ratios should be used in analyzing a companys financial
and/or operating performance. Proper use of financial statement analysis should be made not
only in investment but also in other areas of decision making.

3.2 OBJECTIVE OF THE STUDY


A specific result that a person or system aims to achieve within a time frame and with
available resources.
In general, objectives are more specific and easier to measure than goals. Objectives are basic
tools that underlie all planning and strategic activities. They serve as the basis for creating
policy and evaluating performance. Some examples of business objectives include
minimizing expenses, expanding internationally, or making a profit.

Main Objective: To study the profitability and overall strength of Nandan Denim Ltd
through Financial Analysis
Financial analysis serves the following purposes:
1. To Measure the profitability
2. To Indicate the trend of Achievements
3. To Assess the growth potential of the business
4. To Compare position in relation to other firms
5. To Assess solvency of the firm

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3.3 RESEARCH DESIGN- DESCRIPTIVE


For the study of Financial Statement Analysis the descriptive research design is used in this
project report. Descriptive research design is concerned with describing the characteristic of a
particular phenomenon which is already exists. According to my project which focuses on
precious part of the company, and according to that the descriptive research design is
appropriate.
3.4 DATA SOURCE:
Secondary Data:
Secondary data refer to the data has been already collected. The secondary data, which has
been used to carry out this study, are as follows:
Sources of secondary data:

Some other relevant study material and website


The study is mainly based on the SECONDARY DATA.

3.5 SAMPLING PLAN:


Profitability and growth of the company on the base of comparison of
Financial Statements.
Sample size : Financial Statements given by the company (2011-2015)

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CHAPTER 4
DATA ANALYSIS AND
INTERPRETATION

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4.1 KINDS OF FINANCIAL STATEMENT ANALYSIS


1. Horizontal analysis
Horizontal analysis compares financial information over time, typically from past
quarters or years. Horizontal analysis is performed by comparing financial data from a
past statement, such as the income statement. When comparing this past information
one will want to look for variations such as higher or lower earnings.
2. Vertical analysis
Vertical analysis is a percentage analysis of financial statements. Each line item listed
in the financial statement is listed as the percentage of another line item. For example,
on an income statement each line item will be listed as a percentage of gross sales.
This technique is also referred to as normalization or common-sizing.

Type of Financial statement


1. Audited financial statement
"Audited financial statement" means a provider's financial statement that has been
prepared in accordance with generally accepted accounting principles and that has
been audited by an independent certified public accountant in accordance with
generally accepted auditing standards and includes notes to the financial statement
that state whether or not the community is in compliance with its reserve
requirements.
2. Unaudited financial statement
An unaudited financial statement is one that you have not subjected to an independent
verification and review process. Your financial statements remain unaudited until they
are scrutinized and approved by a certified external auditor.

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Horizontal analysis
Financial statements of Nandan Denim ltd

Balance Sheet (2011-2015)

(Above digits are Rs. In Cr)

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Sources of Fund
450
400
350

Amt in Cr

300
250
200
150

Mar '15
Mar '14
Mar '13
Mar '12

100

Mar '11

50
0

Interpretation
From the above graph it can be seen that the companys Total share capital and equity share
capital is same in all the 5 years.
The total debt of company has increased from March 2011 to March 2015.

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Current Assets & Current Liabilities


600

500

Amt in Cr

400

300

Total Current Assets


Current Liabilities

200

100

0
Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

Year

Interpretation
The total current assets of the company have increased in past five years, while the current
liability is also increasing.
Working capital of the company has increased from 66.16 cr. to 183.06 cr.

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Cash and Bank Balance


Cash and Bank Balance
70

60,1

60
50
40
26,07

30

19,93

20

15,5
6,92

10
0
Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

Interpretation
In the past five years there has been a major shift in Cash and bank balance from 6.92 Crores
to 60.1 Crores. It clearly denotes that the sales of the company are increasing.

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Investments
8

Amt in CR

7
6
5
4
3
2
1
0
Investments

Mar '15
7,35

Mar '14
4,16

Mar '13
0,37

Mar '12
0,28

Mar '11
3,41

Interpretation
From the above chart it can be seen that in the year 2012 and 2013 the companys
investment is very less. While in 2015 the companys investment is very high. The
company has invested 100 lakhs in Bonds, 600.47 lakhs in equity shares, 25 lakhs in
mutual funds and 4.50 lakhs in Partnership firm.

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Contingent Liabilities
250

Amt in Cr

200
150
100

Contingent Liabilities

50
0
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11
Year

Interpretation
Contingent liabilities are kept for uncertain circumstances. The company has increased it
contingent liability from 42.73 crores to 208.9 crores.

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Inventories
160
140
120
100
80

Inventories

60
40
20
0
Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

Interpretation
By tacking business inventories alongside sales, Investors can interpret the direction of
production demand going forward.
Here inventory growth (16.16%) is less than sales growth (116%), so production demand will
increase. Thus it is creating economic growth.

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PROFIT & LOSS A/C (2011-2015) (Above digits are Rs. In Cr)

(Above digits are Rs. In Cr)

Profit & Loss


1.200,00

Amount in Cr

1.000,00
800,00
600,00
400,00
200,00
0,00
Total Income
Total Expenses

Mar '15

Mar '14

Mar '13

Mar '12

Mar '11

1.077,58

909,91

742,24

571,6

523,87

909,1

773,25

633,79

484,19

455,7

Interpretation
Above parameters show Total income & Total Expenses against amount.
According to the analysis of the graph in March 2011 the Total Income and Total
Expenses has been represented which gradually increases over the years till March
2015. Total expenses are comparatively decreases to Total Income.

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CASH FLOW STATEMENT (2011-2015)

Cash Flow
250

Amount in Cr

200

Closing Cash & Cash


Equivalents

150

Opening Cash & Cash


Equivalents

100

Net Cash From


Operating Activities

50

Net Profit Before Tax

0
Mar '15 Mar '14 Mar '13 Mar '12 Mar '11

Interpretation
Above graph perceived that Net profit Before Tax, Net Cash, Operating Cash &
Closing Cash are increasing from the year 2011 to 2015.
It shows as if company will touch the highest profit in upcoming years.

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NET SALES OF NANDAN DENIM LTD. (2012-2016)

Above graphs data interprets that the companys Net Sales are increasing
consistently from March, 2012 to March 2016.
It is interpreting that company is successfully doing its Financials.

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CHAPTER 5
SYNOPSIS

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Findings
Findings are the principal outcomes of a research project, what the project suggested,
revealed or indicated. This usually refers to the totality of outcomes, rather than the
conclusions or recommendations drawn from them.
I found from the data analysis and interpretation that the Company is growing day by
day in financial term. From 2012-2016 its sales are increasing from 572.58 Cr to
1156.73 Cr. There is 50% increase in sales in last 5 years.
With the help of financial statement, the company can find out its stand among its
competitors in the market. Moreover, it is the most reliable analysis through which the
growth of the company could be measured.

Objective 1
To study the profitability and overall strength of Nandan Denim Ltd through Financial
Analysis

Financial Performance
1200
Amt in Cr

1000
800
600

2015

400
2014

200
0
Revenue from
operations

Profit before
Tax

Profit after Tax

Particular

From the above graph of data shows that there is a comparison between the years
2014 and 2015.
We can see in the graph that there is increase in profit and revenue in the company.
The companys growth is 22.68% in terms of revenue, 29.72% in terms of PBT,
30.83% in terms of PAT.
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It is evident from the above graphs that your Nandan Denim has progressed during the
period ended March 31, 2015. It has achieved aggregate sales of Rs. 1096.53 crores
and Profit Before Tax of Rs. 71.23 crores.

Barring unforeseen circumstances, the Directors of your Company expect continued


growth in turnover and profitability in future also.

From the Financial statement analysis the company can measure its profitability.
The graph is indicating the trend of achievement of Nandan Denim Ltd.
The Directors of Nandan Denim are assessing the growth potential of the business.

Objective 2
Comparative position in relation to other firms
1. Position of the Company

Nandan Denim Ltd is in competition of Arvind and Arvee Denim.


It occupies Second position among these three.
In upcoming year Nandan Denim has planned 612 Cr project and it may possible that
high competition will be there in Market among these two companies.

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2. Net Profit of the Company in comparison with other companies

Net Profit
Net Profit

318,85

51,43

Nandan Denim

Arvind

0,21
KG Denim

0,19
Aarvee Denim

1,39
R&B Denims

(Amt in Cr)

We can see from the above line diagram that Arvind is on summit but it also shows
that Nandan is climbing to reach at summit.
Nandan Denim has achieved second position among these five companies with 51.43
Cr. Net profit.
The diagram can also interpret that company is capable to recover the debt according
to its profitability.

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Learning from the project


I have learned new skills and as well as I improved my current skills.
I learn in this 2 months a greater sense of professionalism that how to behave how to
show confidence as well as how to work professionally.
I am great full to this training because it gave more confidence in my career direction
Besides new knowledge and better business etiquette, I should be able to walk away
with tangible evidence of what I've accomplished.
For example: The project I made, campaigns I worked on.
Training experiences in higher education are essential to professional development.
This qualitative study investigated how internship experiences contribute to career
adaptability development and to the transition between the roles of student and
professional.
I found new connections (colleagues) over there in terms of reference. In future if I
will have needed the reference they will support me as well.

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CHAPTER 6
LIMITATIONS AND CONCLUSION

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Limitations of the Study


The area for research is too limited. It is basically depended on data that have
been founded from the internet and data that provided by the company.
Research Project, being the part of the syllabus, has to be prepared to learn the
process and doesnt demand us to emphasize on the accurate data or the accurate
study. Though I have put enough efforts in preparing the project, it might not
dive the exact picture of the realistic details of the market.
As there was a constraint of time I could select limited data for research however
for thorough research purpose more accurate data can be included.

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Conclusion
Nandan Denim has shown fine statistical growth in their product demand with the
help of marketing strategy which has helped in increasing their customers.
Nandan Denim will be Asias biggest denim fabric maker by June this year when the
company will have completed its Rs 621-crore capacity expansion programme.
Arvind and Nandan Denim are both based in Ahmedabad, Gujarat. While Nandan
Denim was set up in 2004 and is a part of the Chiripal Group established in 1972,
Arvind Ltd was founded in 1931 as part of the Lalbhai Group, whose first
manufacturing unit, Saraspur Manufacturing Company, was set up in 1897 to produce
cotton yarn.
The above statement and analysis of comparative data says that in upcoming year
Nandan Denim will beat the Arvind.

Nandan Denim Ltd (NDL) has a denim production capacity of 71 million meters per
annum, at present.

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Bibliography
http://www.aarvee-denims.com/profile.html, Major players in textile industry, 15th July,
2016

http://www.moneycontrol.com/competition/nandandenim/comparison/NE06,

Balance

sheet, cash flow statement, 15th July,2016

http://www.rnbdenims.com/profile.html, R&D Company data, 17th July, 2016


http://www.kgdenim.com, KG Denim Company data, 17th July,2016
http://www.arvind.com, Arvind Company Data, 17th, July, 2016
http://www.nandandenim.com, Nandan Comapny Profile, 10th July, 2016
http://www.chiripalgroup.com, Chiripal Company Data, 10th July, 2016
http://www.goodreads.com, Financial Statement Analysis Gokul Sharma, 22th July,2016
http://veracap.com/wp-content/uploads/2014/11/financial-analysis-in-mergers
acquisitions.pdf, Mergers and acquisition paper, 23rd, july 2016

References

1. Florenz C. Tugas (2009-2011) Ramon V. del Rosario College of Business De La


Salle University, Manila, Philippines
2. Bhargav Pandya, The Maharaja Sayajirao University of Baroda, Vadodara, India

3. Nwokeji Ogonna Uzochukwu (August, 2012), department of accountancy faculty


of management and social sciences caritas university, amorji-nike, enugu, enugu
state
4. SALAMI & MARTIKAINEN (1994), Professor of Accounting and Business
Finance
5. Edward J. Riedl * Harvard Business School(October 2007), Morgan Hall 383,
Harvard Business School Boston,
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6. Stephen H. PENMAN (April 1989), Universi(v of California, Berkeley, CA


94720, USA
7. Anaja Blessing & Emmanuel E. Onoja (PhD), Department of Accounting, Faculty
of Management Sciences, Kogi State University, Anyigba Kogi State, NIGERIA
8. Howard E. Johnson (MBA, CA, CMA, CBV, CPA, CFA), managing director at
Campbell Valuation Partners Limited (CVPL)
9. Hayden Wimmer, Roy Rada, Assistant Professor of Information Technology at
Georgia Southern University

Books
1. Financial Statement Analysis Gokul Sharma
2. Fundamentals of Financial Management
3. Research Methodology C.R Kothari, New Age International
Publication, second edition page No.55 to 62.

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