SUMMER INTERNSHIP PROJECT REPORT

ON

A STUDY OF FINANCIAL ANALYSIS OF

SUPERHOUSE LIMITED

Submitted towards partial

Fulfilment of
Master of Business Administration
Academic Session 2016-2018

IMS Engineering College Ghaziabad Uttar Pradesh – 201009

Affiliated to Dr. A.P.J. Abdul Kalam University Lucknow.

Submitted by: Under the guidance of:

Nitin Sharma Dr. Meenu Baliyan

MBA (IMSEC) MBA (IMSEC)

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IMS Engineering College, Ghaziabad – Delhi NCR
A NAAC ACCREDITED INSTITUTION
(Approved by AICTE & Affiliated to Dr. A.P.J Abdul Kalam
Technical University, Lucknow)

CERTIFICATE

This is to certify that Ms./Mr. NITIN SHARMA Roll No. 1614370029 is a bonafide student of

MBA 3rd semester during session 2017-18. The summer training project report entitled A STUDY

ON FINANCIAL ANALYSIS OF SUPERHOUSE LTD. has been prepared by him/ her in

partial fulfillment for the award of degree of Master of Business Administration of Dr. A.P.J.

Abdul Kalam Technical University, Lucknow (formerly UPTU Lucknow).

Dr. Meenu Baliyan Dr. Monica Verma

(Faculty In charge) Head-MBA

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ACKNOWLEDGEMENT

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ACKNOWLEDGEMENT

It is always difficult to acknowledge, so precocious adapt as that of learning, as it is only a debt

that is difficult to repay expect through gratitude. There are occasions where mere expressions of

words stand nowhere near the feeling felt. The completion of this training with its report is such

one occasion.

I take this opportunity to express my warmest appreciations and give special recognition to those

entire individual who have contributed immensely to make this project report.

The formal statement of acknowledgement will hardly meet the ends of justice in the matter of

expressing a sense of gratitude to my college authorities Coordinator Dr. MEENU BALIYAN,

Summer training Mentor Mr. S.P BHATT {finance Department of SUPERHOUSE Ltd.} and

whole team of finance dept. of SUPERHOUSE ltd. for giving practical dimensions to my

theoretical studies in the form of training and framing report which is suitable and highly

beneficial.

Above all, I accord cordial regards to my loving parents and grateful to almighty for bringing me

up in an atmosphere of life and confidence and infusing in me the spirit to the face challenges of

life bravely that made me really work towards the goal of success.

A Heartful thank to SUPERHOUSE LTD.

Nitin Sharma

MBA(IMSEC)

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EXECUTIVE SUMMARY
EXECUTIVE SUMMARY

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EXECUTIVE SUMMARY

SUPERHOUSE LIMITED (Noida) is a Garment Division of the SUPERHOUSE GROUP.

Superhouse Group is a multi-unit and multi-product conglomerate with brand leadership in the

field of footwear manufacturing and exports. The Group is well equipped with the most modern

machineries and a specialized workforce and produces all types of quality leather, leather goods

and textile garments that are appreciated all over the world. Superhouse Group has 18 units, with

a workforce of over 5000 and a presence in more than 35 countries. Superhouse is now a US$ 75

million company.

Superhouse Limited (Textile Division), a unit of Superhouse group, is involved in manufacturing

activities of Textile products like Riding Sportswear, High Fashion Ladies wear, Casual wear,

Active wear. The enviable records of satisfying its overseas clients are only due to the dedicated

workforce and high international quality standard product.

The project entitled “Study of financial analysis of SUPERHOUSE LTD. The term of study

was kept limited to make the title true. The purpose of the report is to get the in depth understanding

of the financial performance of the company. With the growing the Export and Indian economy

and the government policies, for infrastructure the demand for garments is increasing and seeing

this as an opportunity is under taking many new projects for expansion of the production which

are under implementation for increasing the capacity of the plants. Because the textile industry is

a sun rising company which means that three basic needs of the people are cloth, meal and house.

So the one of thing that is cloth produced in textile industry. So, it is sun rising company. Financial

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performance has been analyzed in two ways – ratio analysis and overall study of the financial

structure of SUPERHOUSE LTD.

The performance of the textile division of the company during the year was satisfactory.

The annual turnover the SUPERHOUSE GROUP is 6780.24 million. The Company has posted

yet another impressive for the 2014-15 results, which has surpassed all respective previous levels.

It has shown substantial growth in turnover, cash profit, profit before tax and profit after tax.

The textile industry of India plays a substantive role in the economy. This is one of the

largest industry in India in terms of employment generation, and earning foreign exchange. The

paper focuses on the financial strength of the textile sector in India. And to know that up to what

extent textile sector has used their available resources effectively. For this purpose, profitability,

liquidity and solvency position of textile companies has examined. In this paper comparative ratio

analysis technique has used to know the financial soundness of textile companies.

The result shows the profitability margins has slightly different due to volatile textiles market and

volatility in raw material prices. The liquidity and solvency position is almost same in all the textile

companies.

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TABLE OF CONTENTS

CHAPTER
S.NO. TITLE Page .No.
NO.

1 CHAPTER.1 INTRODUCTION TO FINANCIAL ANALYSIS 12-32

2 CHAPTER.2 COMPANY PROFILE,EVENTS,AWARDS,PRODUCTS 33-68

3 (A) OVERVIEW OF INDIAN TEXTILE INDUSTRY 34-45

4 (B) SWOT ANALYSIS OF INDIAN TEXTILE INDUSTRY 46-48

6 (C) COMPANY PROFILE 49-58

7 (D) COMPANY MAJOR EVENTS 59-61

8 (E) AWARDS 62

9 (F) PRODUCTS 63-67

10 (G) EXPORT MARKETS 68

11 CHAPTER.3 OBJECTIVES & RESEARCH METHODOLOGY 69-71

12 (A) OBJECTIVES , NEED , SCOPE OF THE STUDY 70

13 (B) RESEARCH METHODOLOGY 71

14 (C) SOURCES OF DATA 71

15 CHAPTER.4 DATA ANALYSIS 72-89

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16 (A) INTRODUCTION TO FINANCIAL RATIOS 73

17 (B) KEY FINANACIAL RATIOS 73

18 (C) FINANACIAL RATIO’S OF COMPANY 74-89

19 (D) FINDINGS 90-92

20 CHAPTER.5 CONCLUSION & SUGGESTIONS 93-96

CONCLUSION
21 (A) 94

SUGGESTIONS
22 (B) 96

BIBLIOGRAPHY
23 (C) 97-99

99-101
24 ANNEXURE’S

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INTRODUCTION
INTRODUCTION
TO
FINANCIAL ANALYSIS
TO

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FINANCIAL ANALYSIS

Financial analysis (also referred to as financial statement analysis or accounting

analysis or Analysis of finance) refers to an assessment of the viability, stability and profitability

of a business sub-business or project.

It is performed by professionals who prepare reports using ratios that make use of information

taken from financial statements and other reports. These reports are usually presented to top

management as one of their bases in making business decisions. Financial analysis may determine

if a business will:

 Continue or discontinue its main operation or part of its business;

 Make or purchase certain materials in the manufacture of its product;

 Acquire or rent/lease certain machineries and equipment in the production of its goods;

 Issue stocks or negotiate for a bank loan to increase its working capital;

 Make decisions regarding investing or lending capital;

 Make other decisions that allow management to make an informed selection on various

alternatives in the conduct of its business.

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FINANCIAL STATEMENT

A financial statement is an organized collection of data according to logical and consistent

accounting procedures. Its purpose is to convey an understanding of some financial aspects of a

business firm. It may show a position at a moment of time as in the case of a balance sheet, or may

reveal a series of activities over a given period of time, as in the case of an income statement.

Thus, the term financial statement generally refers to the basis statements;

i) The income statement

ii) The balance sheet

iii) A statement of retained earnings

iv) A statement of charge in financial position in addition to the above two statement.

Financial statement analysis:

It is the process of identifying the financial strength and weakness of a firm from the available

accounting data and financial statement. The analysis is done by properly establishing the

relationship between the items of balance sheet and profit and loss account the first task of financial

analyst is to determine the information relevant to the decision under consideration from the total

information contained in the financial statement. The second step is to arrange information in a

way to highlight significant relationship. The final step is interpretation and drawing of inferences

and conclusion.

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Thus financial analysis is the process of selection relating and evaluation of the accounting

data/information.

This study contains following analysis:

1) comparative analysis statement

2) common-size analysis statement

3) Ratio analysis

4) Trend analysis.

1) Comparative financial statement:

Comparative financial statement is those statements which have been designed in a way so as to

provide time perspective to the consideration of various elements of financial position embodied

in such statements. In these statements, figures for two or more periods are placed side by side to

facilitate comparison.

But the income statement and balance sheet can be prepared in the form of comparative financial

statement.

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i) Comparative income statement:

The income statement discloses net profit or net loss on account of operations. A comparative

income statement will show the absolute figures for two or more periods. The absolute change

from one period to another and if desired. The change in terms of percentages. Since, the figures

for two or more periods are shown side by side; the reader can quickly ascertain whether sales

have increased or decreased, whether cost of sales has increased or decreased etc.

ii) Comparative balance sheet:

Comparative balance sheet as on two or more different dates can be used for comparing assets and

liabilities and finding out any increase or decrease in those items. Thus, while in a single balance

sheet the emphasis is on present position, it is on change in the comparative balance sheet. Such a

balance sheet is very useful in study in the trends in an enterprise.

2) common-size financial statement:

Common-size financial statements are those in which figures reported are converted into

percentages to some common base in the income statement the sales figure is assumed to be 100

and all figures are expressed as a percentage of sales. Similarly, in the balance sheet, the total of

assets or liabilities is taken as 100 and all the figures are expressed as a percentage of this total.

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3) Ratio analysis:
Ratio analysis is a widely used tool of financial analysis. The term ratio in it refers to the

relationship expressed in mathematical terms between two individual figures or group of figures

connected with each other in some logical manner and are selected from financial statements of

the concern. The ratio analysis is based on the fact that a single accounting figure by itself may not

communicate any meaningful information but when expressed as a relative to some other figure,

it may definitely provide some significant information the relationship between two or more

accounting figure/groups is called a financial ratio helps to express the relationship between two

accounting figures in such a way that users can draw conclusions about the performance, strengths

and weakness of a firm.

Classification of ratios:

A) Liquidity ratios

B) Leverage ratios

C) Activity ratios

D) Profitability ratios

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Profitability

It is an ability to earn income and sustain growth in both the short- and long-term. A company's

degree of profitability is usually based on the income statement, which reports on the company's

results of operations;

Solvency

It is an ability to pay its obligation to creditors and other third parties in the long-term;

Liquidity

It is an ability to maintain positive cash flow, while satisfying immediate obligations;

Both solvency and liquidity are based on the company's balance sheet, which indicates the

financial condition of a business as of a given point in time.

Stability

the firm's ability to remain in business in the long run, without having to sustain significant losses

in the conduct of its business. Assessing a company's stability requires the use of the income

statement and the balance sheet, as well as other financial and non-financial indicators etc.

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A) LIQUIDITY RATIOS:

These ratios portray the capacity of the business unit to meet its short term obligation from its

short-term resources (e.g.) current ratio, quick ratio.

Current ratio:

Current ratio may be defined as the relationship between current assets and current liabilities it is

the most common ratio for measuring liquidity. It is calculated by dividing current assets and

current liabilities. Current assets are those, the amount of which can realized with in a period of

one year. Current liabilities are those amounts which are payable with in a period of one year.

Current assets
Current assets = -------------------------
Current liabilities

Liquid Ratio:
The term liquidity refers to the ability of a firm to pay its short-term obligation as and when they

become due. The term quick assets or liquid assets refers current assets which can be converted

into cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities.

Liquid assets
Liquid ratio = -------------------------
Liquid liabilities

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Absolute liquidity ratio:
Absolute liquid assets include cash, bank, and marketable securities. This ratio Obtained by

dividing cash and bank and marketable securities by current liabilities.

Cash + bank +marketable securities

Absolute liquidity ratio = ----------------------------------------------
Current liabilities

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B) LEVERAGE RATIOS:

Many financial analyses are interested in the relative use of debt and equity in the firm. The term

solvency refers to the ability of a concern to meet its long-term obligation. Accordingly, long-term

solvency ratios indicate a firm’s ability to meet the fixed interest and costs and repayment

schedules associated with its long-term borrowings. (E.g.) debt equity ratio, proprietary ratio,

etc….

Debt equity ratio:

It expresses the relationship between the external equities and internal equities or the relationship

between borrowed funds and „owners‟ capital. It is a popular measure of the long-term financial

solvency of a firm. This relationship is shown by the debt equity ratio. This ratio indicates the

relative proportion of debt and equity in financing the assets of a firm. This ratio is computed by

dividing the total debt of the firm by its equity (i.e.) net worth.

Outsider’s funds
Debt equity ratio = ------------------------------
Proprietor’s funds

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Proprietary ratio:

Proprietary ratio relates to the proprietors’ funds to total assets. It reveals the owner’s contribution

to the total value of assets. This ratio shows the long-time solvency of the business it is calculated

by dividing proprietor’s funds by the total tangible assets.

Proprietor’s funds
Proprietary ratio = ---------------------------
Total tangible assets

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C) ACTIVITY RATIOS:

These ratios evaluate the use of the total resources of the business concern along with the use of

the components of total assets. They are intended to measure the effectiveness of the assets

management the efficiency with which the assets are used would be reflected in the speed and

rapidity with which the assets are converted into sales. The greater the rate of turnover, the more

efficient the management would be (E.g.)

stock turnover ratio, fixed assets turnover ratios etc….

Stock turnover ratio:

This ratio indicates whether investment is inventory is efficiently used or not it explains whether

investment in inventories in with in proper limits or not. It also measures the effectiveness of the

firm’s sales efforts the ratio is calculated as follows.

Cost of goods sold

Stock turnover ratio = -----------------------------
Average stock

Opening Stock + Closing Stock

Average stock = -----------------------------------------
2

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Fixed assets turnover ratio:

The ratio indicates the extent to which the investments in fixed assets contribute towards sales. If

compared with a previous year. It indicates whether the investment in fixed assets has been

judicious or not the ratio is calculated as follows.

Net sales
Fixed assets turnover ratio = -------------------
Fixed assets

Working capital turnover ratio:

Working capital turnover ratio indicates the velocity of the utilization of net working capital. This

ratio indicates the number of times the working capital is turned over in the course of a year. It is

a good measure over –trading and under-trading.

Net sales
Working capital turnover ratio = ----------------------------
Net working capital

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Return on total assets:

Profitability can be measured in terms of relationship between net profit and total assets. It

measures the profitability of investment. The overall profitability can be known by applying this

ratio.

Net profit
Return on total assets = ----------------------------- x100
Total assets

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(D)PROFITABILITY RATIOS:

The profitability ratios of a business concern can be measured by the profitability ratios. These

ratios highlight the end result of business activities by which alone the overall efficiency of a

business unit can be judged, (E.g.) gross ratios, Net profit ratio.

Gross profit ratio:

This ratio expresses the relationship between Gross profit and sales. It indicated the efficiency of

production or trading operation. A high gross profit ratio is a good management as it implies that

cost of production is relatively low.

Gross profit
Gross profit ratio = ----------------------------------- x 100
Net sales

Net profit ratio:

Net profit ratio establishes a relationship between net profit (after taxes) and sales. It is determined

by dividing the net income after tax to the net sales for the period and measures the profit per rupee

of sales.

Net profit
Net profit ratio = ----------------- x 100
Net sales

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EXPANSES RATIO:

This ratio establishes the relationship between various indirect expenses to net sales.

a) ADMINISTRATIVE EXPENSES RATIO:

Administrative expenses
Administrative expenses ratio = ------------------------------- x 100
Sales

b) SELLING &DISTRIBUTION EXPENSES RATIO:

Selling &distribution expenses

Selling &distribution expenses ratio = ----------------------------------------- x 100
Sales

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WHY FINANCIAL ANALYSIS IS IMPORTANT?

The financial statement analysis is important for different reasons:

1. HOLDING OF SHARES

Shareholders are the owners of the company. Time and again, they may have to take decisions

whether they have to continue with the holdings of the company's share or sell them out. The

financial statement analysis is important as it provides meaningful information to the shareholders

in taking such decisions.

2. Decisions and Plans

The management of the company is responsible for taking decisions and formulating plans and

policies for the future. They, therefore, always need to evaluate its performance

and effectiveness of their action to realize the company's goal in the past. For that purpose,

financial statement analysis is important to the company's management.

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3. Extension of Credit

The creditors are the providers of loan capital to the company. Therefore, they may have to take

decisions as to whether they have to extend their loans to the company and demand for higher

interest rates. The financial statement analysis provides important information to them for their

purpose.

4. Investment Decision

The prospective investors are those who have surplus capital to invest in some

profitable opportunities. Therefore, they often have to decide whether to invest their capital in the

company's share. The financial statement analysis is important to them because they can obtain

useful information for their investment decision making purpose.

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TYPES OF ANANLYSIS

Since there is recurring need to evaluate the past performance, present financial position, the

position of liquidity and to assist in forecasting the future prospects of the organization, various

financial statements are to be examined in order that the forecast on the earnings may be made and

the progress of the company are ascertained.

The financial statements are: Income statement, balance sheet, statement of earnings, statement of

changes in financial position and the cash flow statement. The income statement, having been

termed as profit and loss account is the most useful financial statement to enlighten what has

happened to the business between the specified time intervals while showing, revenues, expenses

gains and losses. Balance sheet is a statement which shows the financial position of a business at

certain point of time. The distinction between income statement and the balance sheet is that the

former is for a period and the latter indicates the financial position on a particular date. However,

on the basis of financial statements, the objective of financial analysis is to draw information to

facilitate decision making, to evaluate the strength and the weakness of a business, to determine

the earning capacity, to provide insights on liquidity, solvency and profitability and to decide the

future prospects of a business entity.

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There are various types of financial analysis. They are briefly mentioned herein:

External analysis:

The external analysis is done on the basis of published financial statements by those who do not

have access to the accounting information, such as, stock holders, banks, creditors, and the general

public.

Internal Analysis:

This type of analysis is done by finance and accounting department. The objective of such analysis

is to provide the information to the top management, while assisting in the decision making

process.

Short term Analysis:

It is concerned with the working capital analysis. It involves the analysis of both current assets and

current liabilities, so that the cash position (liquidity) may be determined.

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Horizontal Analysis:

The comparative financial statements are an example of horizontal analysis, as it involves analysis

of financial statements for a number of years. Horizontal analysis is also regarded as Dynamic

Analysis.

Vertical Analysis:

It is performed when financial ratios are to be calculated for one year only. It is also called as static

analysis.

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ABOUT TEXTILE INDUTRY
COMPANY PROFILE, EVENTS,
AWARDS AND PRODUCTS
&

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(A)Overview of the Indian textile industry

Segments of Indian Textile Industry

Indian Textile Industry can essentially be categorized into two segments: -

1. Organized Textile Industry

2. Unorganized Textile Industry Unorganized sector is the dominant part in this industry which

mainly utilizes the traditional practices (woven or spun) in cloth production and hence is labor

intensive in nature. This industry is characterized by the production of clothes either through

weaving or spinning with the help of hands. The decentralized nature is considered as another

important feature of the unorganized textile industry in India.

The other half of the Indian Textile industry is a highly organized one with immense importance

on capital intensive production process. This sector is characterized by sophisticated mills where

technologically advanced machineries are utilized for mass production of textile products.

Sub-Sectoral Categorization of Indian Textile Industry

 Textile Industry based on fiber produced through manmade means or natural cotton.

 Yarn industry utilizing fiber or filament of the man-made type.

 Textile industry involved in the production of wool, its derivatives and final woolen products.

 Production, processing of Jute and the textile industry based on it.

 Textile industry involved in the mass production of natural silk along with derivative and final

products from silk.

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 Handloom Industry.

 Handicrafts industry which is basically unorganized in nature.

Sub-Categorized sectors of the Indian Textile Industry

Textile Industry based on fiber produced through manmade means or natural cotton. In the whole

Indian textile industry, this sector has come as the largest producer of textile products. This

industry has also proved its potential in employing the maximum number of people in the entire

industry which has been calculated to be around a whooping one million workers. As per the latest

records (31.01.2014) of Ministry of Textiles, the total number of mills in this particular sector is

1818 in number. The installed capacity of all these mills accumulates to 35.37 million spindles

and 0.45 million rotors.

Spun Yarn industry can again be divided into two sub-sectors: -

 Cotton Yarn producing industry the production of this industry type is heavily dependent on

the yearly production of cotton which again depends on the vagaries of nature. Hence it has

been observed that the rate of production in this sector shows fluctuating trend.

 Completely non cotton blended yarn producing industry

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This industry type is a consistent performer where its rate of production has increased at a

consistent rate. It has been observed that between the period 1999 and 2005, capacity utilized in

this sector has varied anything between 80% and 93%.

Organized sector in Textile Industry is passing through a stage of stagnation and the main reason

behind it is transformation in the structural set-up of the industry. It has been found out that the

weaving sector is delinked from the spinning sector which has led to the rise of power looms of

decentralized nature. Over the years, the production capacity of this organized sector has seen an

absolute decrease of 0.54 lakh between March 2000 and January 2007.

Cloth production has also evidenced a declining trend during 2000-2010 with an absolute decrease

of ninety-four million square meters. The annual growth rate of total cloth production in the textile

industry has been calculated to be around 5.24 % “between” 2000-01 to 2009-010. But stratified

result of this industry show that during the above mentioned period, the organized sector of this

industry has posted fluctuating results whereas the unorganized one has performed positively with

a yearly rate of growth amounting to 5.4%.

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Investment in Indian Textile Industry

Investment in Indian Textile Industry

The scenario of investment in the Indian textile industry started to change after the inception of

the special “Textile Package” during the 2014-2015 budgets. The recommendations made in the

budget included the reforms that are required to be made in the fiscal policy of the Indian Textile

Industry for attracting investment in this industry. The policy matters associated with restructuring

of debt for financial viability of this industrial sector are also being addressed in this budget. A

fund was set up in accordance with the recommendations of the aforesaid budget with an initial

principal amount of Rs. 3000 crores. This fund was meant for restructuring of the textile sector.

Factors responsible for wooing the investors in Indian textile industry: -

 The size of the textile along with apparel market in India is quite big.

 Performance of this industry has been consistent right from the start of the new millennium.

 Availability of the skilled labor in India is comparatively cheap in relation to the same in other

parts of the world.

 The policies related to the Foreign Direct Investment in India are comparatively lenient and

are transparent in nature among all the developing countries.

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 There is no limit on foreign direct investment in the textile industry and hence 100% direct

investment can be done by the foreign capitalists in the Indian textile industry.

 Foreign Investments done in the Indian Textile Industry through the automatic route offers a

hassle-free way of investing. These investments are not required to be approved by the

government or the apex bank of India, RBI. The foreign investors are only required to make a

notification to the regional office of the apex bank only after receiving the receipt of the

remittance. This notification is required to be done within thirty days from the date of receiving

the remittance. The ministry concerned with the development of Textile Industry in India has

 formed a special cell for attracting FDI in this sector. Objectives of this special cell for wooing

FDI are: -

 This cell helps the willing foreign companies to find out viable partners meant for floating a

joint venture company in order to produce textile products.

 FDI special cell acts as the mediator between the foreign investor and the different

organizations for setting up the textile industry. The specialized helps that are given by this

cell involve advisory support along with assistance.

 At the time of operation of the textile industry set by the foreign investor certain problems may

crop up. These problems are sorted out by the FDI cell.

 FDI cell monitors as well as maintains the data related with the total production of the textile

sector. They also collect the stratified data of production by both domestic industry as well as

the industry set up by the foreign investor. In the financial year 2005-2006, it has been found

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out that the percentage share of the textile industry in the total foreign investment done was 1.02%.

As a part of domestic textile sector expansion, the companies of Indian origin are also not far

behind in making investments.

Government Policies Relating to the Textile Industry in India

Introduction

The Indian textile industry is one of the largest industries in the world. The Ministry of Textiles in

India has formulated numerous policies and schemes for the development of the textile industry in

India. Some of them are detailed in the following sections.

National Textile Policy

 The National Textile Policy was formulated keeping in mind the following objectives:

Development of the textile sector in India in order to nurture and maintain its position in the

global arena as the leading manufacturer and exporter of clothing.

 Maintenance of a leading position in the domestic market by doing away with import

penetration.

 Injecting competitive spirit by the liberalization of stringent controls.

 Encouraging Foreign Direct Investment as well as research and development in this sector.

 Stressing on the diversification of production and its up gradation taking into consideration the

environmental concerns.

 Development of a firm multi-fiber base along with the skill of the weavers and the craftsmen.

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Such goals are set to meet the following targets: -

 The size of textile and apparel exports must reach a level of US $75 billion by the year 2018.

 The Technology Up Gradation Fund Scheme should be implemented in a strict manner.

 The garments industry should be removed from the list of the small scale industry sector.

 The handloom industry should be boosted and encouraged to enter into foreign ventures so as

to compete globally. The National Textile Policy has also formulated rules pertaining to certain

specific sectors. Some of the most important items in the agenda happen to be the availability

and productivity along with the quality of the raw materials. Special care is also taken to curb

the fluctuating price of raw materials. Steps have also been taken to raise silk to the

international standard.

Government policy on cotton and man-made fibre: -

One of the principal targets of the government policy is to enhance the quality and production of

cotton and man-made fiber. Ministry of Agriculture, Ministry of Textiles, cotton growing states is

primarily responsible for implementing this target.

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Other thrust areas: -

Information Technology

Information technology plays a significant role behind the development of textile industry in India.

IT (Information Technology) can promote to establish a sound commercial network for the textile

industry to prosper.

Human Resource Development

Effective utilization of human resource can strengthen this textile industry to a large extent.

Government of India has adopted some effective policies to properly utilize the manpower of the

country in favor of the textile industry.

Financing arrangement

Government of India is also trying to encourage talented Indian designers and technologists to

work for Indian textile industry and accordingly government is setting up venture capital fund in

collaboration with financial establishments.

ACTS

Some of the major acts relating to textile industry include:

Central Silk Board Act, 1948

The Textiles Committee Act, 1963

The Handlooms Act, 1985

Cotton Control Order, 1986

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The Textile Undertakings Act, 1995 Government of India is earnestly trying to provide all the

relevant facilities for the textile industry to utilize its full potential and achieve the target. The

textile industry is presently experiencing an average annual growth rate of 9-10% and is expected

to grow at a rate of 16% in value, which will eventually reach the target of US $ 125 billion by

2018. The clothing and apparel sector are expected to grow at a rate of 21 %t in value terms.

Textile Industry Exports: -

Introduction

Textile industry plays a significant role in the growth of Indian economy and it is an important

component of global trade. Textile industry accounts for about one third of India's total export

earnings. It is regarded as the second largest industry of India and is the largest foreign export

earner, accounting for 35% of the gross export earnings in trade. During 1992-93 and 2010-12,

textile exports recorded an increase at a compound annual growth rate of 14.01%. Handloom and

cotton are the two most significant sectors in textile industry. These two sectors together contribute

the major portion of total textile export in India.

Trading partners

Leading trading partners of India are Malaysia, Australia, Kazakhstan, USA, South Africa,

Romania, Argentina, Egypt, Germany, Finland, Turkey, Denmark, Holland, Sweden, Switzerland,

U.K, USA, and New Zealand.

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India's export to Malaysia

Malaysia imports various types of textile products from India to meet the requirements of raw

materials for its emerging garment industry. Malaysia's total textile imports are estimated to exceed

US$ 1.5 billion annually. Malaysia's major importing products include woven man-made fiber

fabrics, apparel accessories, textile yarn, knitted and crocheted fabrics, and women’s apparel.

India's export to USA

USA is regarded as the largest textile and apparel market in the world, which amounts to over $200

billion annually. In 2012, about 45% of the U.S. market demand was met with imported products,

which accounted for 20% of the overall global textile and apparel imports. In 2010, the total

imports of clothing and textiles by USA was 80% (US $ 71 bn) and 20% (US $ 18 bn), respectively.

Asia contributed the most, specifically India. India basically supplied readymade garments to

USA.

India's export to Australia

Australia is considered as one of the most open textile markets in the world. Major textile imports

include apparels and made-ups under chapter 62, 61 and 63, specifically polyester-cotton and

polyester-viscose types. Bulk of cotton and hand-made fibers are: -

42
Indian exports of textiles to Germany

Germany can be regarded as one of the leading importers of Indian handmade fiber textiles.

Germany is also an important market in EU (European Union), specifically for textile and clothing,

with a total market size of about US $ 45 billion (in 2012). During 20013-14, the total German

imports of textile products from India amounted to Rs. 5374.59 crores and in the same year, the

total imports value of Synthetic and Rayon textiles from India amounted to Rs. 375.63 crores,

showing a growth of 58.43% comparing to the performance of previous year.

Indian exports of textiles to EU (European Union)

EU overpowered USA as becoming the largest market for textiles and clothing in the world. Asia

predominates the EU market in both clothing and textiles, with 30% (US $ 30 billion) and 17 %

(US $ 8 billion) share, respectively. India is one of the leading suppliers of textile products to the

EU market and ranked fourth, ahead of other textile exporters like Mexico, Bangladesh and

Turkey, with a market share of 5.2% (US $ 0.45 billion).

Current trend Industry sources reveal that India's textile exports are likely to fall short by over 16%

from the expected target. This is happening because of an increase in value of money and slowing

down of investment. Shekhar Agarwal, chairman, Confederation of Indian Textile Industry opines

that in 2018, the textile exports in India will not surpass $ 20.5 billion mark, witnessing a negative

growth in exports, specifically in segments like garments. Garments accounts for about half of the

overall textile exports by India.

43
Indian textile exports to USA and China are growing rapidly. B.K. Patodia, chairman of

India's Cotton Textiles Export Promotion Council, expressed that China and India are speedily

becoming the two biggest textile players in the world.

CRISIL (Credit Rating Information Services of India Limited), India's leading Ratings, Research,

Risk and Policy Advisory Company predicts that India's textile export earnings will increase from

USD 17 billion (FY 2014) to around USD 40 billion by FY (Financial Year) 2016.

44
(B) SWOT ANALYSIS OF INDIAN TEXTILE INDUSTRY

Strength

• Post 2005, removal of quota restrictions to give a major boost.

• Export target in textile at USD 75 Billion by 2014.

• Low per capita consumption in India.

• Cost competitiveness.

Weaknesses

• Fragmented Industry.

• Effect of Historical Government Policies.

• Technological Obsolescence.

Opportunities

• Indian companies need to focus on Product Development

• Increased use of CAD to develop designing capabilities

• Investing in Trend Forecasting to enable the growth of industry

45
Threats

• Competition in Domestic Market

• Need to improve the Working Conditions of the people who are involved in this profession.

• Need to revamp Consumer Consciousness

• Tackle Chinese Aggression over the International Market

46
RECOMMENDATIONS

• Setting up Textile Industries oriented SEZs

• Starting up new courses like Textile Manufacturing and Textile Technology at ITIs and

Engineering Institutes

• Liberalized labour laws, tax and other benefits of a Special Economic Zone need to be

implemented

• Access to high quality and cost-effective manpower

• Excellent connectivity by road, rail air and ports and Single-window clearance

47
(C) COMPANY PROFILE

Superhouse Group is a conglomeration of several companies engaged in manufacturing and

export of finished leather, leather products and textile garments.

The parent company, Aminson’s Leather Finishers Pvt., was incorporated as private limited

company on January 14, 1980. It was converted into a public limited company on December 22,

1984 and its name changed to Aminson’s Limited on February 21, 1989. In addition, five group

companies – Super House Limited, Super Garments Limited, Sharp Leathers Limited, Super

Footwear Limited and Allen Shoes Limited – were merged with Aminson’s Limited in 1994,

1995 and 1996 as per the orders of the Hon’ble High Court of Judicature, Allahabad.

The name of the company was changed to Superhouse Leathers Limited on March 4, 1996 and

finally Superhouse Limited on November 10, 2006 with the approval of the Registrar of

Companies, Kanpur (U.P).

Superhouse Group is a multi- unit and multi- product conglomerate with brand leadership in the

field of footwear manufacturing and exports. The Group is well equipped with the most modern

machineries and a specialized workforce and produces all types of quality leather, leather goods

and textile garments that are appreciated all over the world.

A US $75 million group, Superhouse Group has 15 units, with a workforce of over 5000 and a

presence in more than 35 countries. Our commitment to quality is reaffirmed by our ISO 9002

certification. Stringent EN 345-norms make us one of the most respected manufacturers amongst
48
importers from European countries. Being equipped with requisite infrastructure and strict

adherence to high standards of quality, we are able meet CSA, ANZ & and SABS standards.

A perfect blend of highly technical, skilled and semi-skilled workforce and competent managers

has helped us in carving out an enviable position for ourselves in the global market.

The Group is also engaged in the manufacturing and export of Readymade Garments and Riding

Products.

In addition, we are approved vendors for global brands such as Wal-Mart, Filanto, Auchan, Andre,

Shoe Fayre, Hudson Bay, Heckel, Securite, Secura and many more.

49
GROUP OF COMPANIES

 LEATHER GARMENTS DIVISION-:

C-10, Sector-58, Phase III

Noida -201301 (U.P) INDIA

50
 RIDING & FASHION GARMENTS DIVISION-:

A-14, Sector-65, Phase III

Noida- 201301 (U.P.) INDIA

 RIDING & FASHION GARMENTS DIVISION 2-:

A-61 / 2, UPSIDC Industrial area, Sikandrabad.

Dist. Bulandshahr (U.P.). INDIA

51
. TEXTILE WORKWEAR DIVISION-:

E-23-24, Site-1

UPSIDC Industrial Area

Unnao-209801 (U.P.) INDIA

52
GENERAL INFORMATION

SUPERHOUSE LIMITED

A-14, SECTOR 65

PHASE III NOIDA – 201307 (UP) INDIA

Tel: +91 120 4647777

Fax: +91 120 4264666

Website: www.superhouse.in

Company Officer-:

Mr. YASH PAL SINGH

A-14, SECTOR 65

PHASE III NOIDA – 201307 (UP) INDIA

53
MANAGEMENT

The following persons constitute the company’s board of directors: -

Sir No. Name of Directors Designation

1. Mr. Mukhtarul Amin Chairman and Managing Director

2. . Mrs. Shahina Mukhtar Whole time Director

3. . Mr. Zafarul Amin Joint Managing Director

4. Mr. Vinay Sanan Executive Director

5. Mr. Anil Kumar Agarwal Director Finance

6. Mr. Mohd. Shadab Whole time Director

7. Mr. N. C. Jain Director

54
8. Dr. Krishna Kumar Agarwal Director

9. Mr. Dilip Kumar Dheer Director

10. Mr. Kamal Agarwal Director

11. Mr. Anil Soni Director

12. Mr. Syed Javed Ali Hashmi Director

FINANCE CONTROLLER OF SUPERHOUSE LTD.

 MR. S.P BHATT

55
. COMPANY BUSINESS PHILOSOPHY

It has been long pursued policy and commitment of Superhouse Limited to adhere to highest

standards of integrity –professional and financial – and business ethics in the operation of its

business. Since beginning company focus has been achieving economies in the scale of production,

rationalize cost, integration of operations thereby, increase the revenue from year to year.

The company view on costs has never refrained from rewarding the work force of company. Until

date we have enjoyed cordial with company work force at all levels, keeping in mind company

philosophy and to meet out any contingency company have always developed second line of key

managerial personnel. Company human resource development policy are designed to motivate

achieve goal and excellence in management. The company have always remained conscious about

prevalent fashion and design and quality translated into high level of consumer’s satisfaction.

Company has also kept fully abreast with latest trend prevailing in domestic as well as international

markets. The company philosophy is not only to earn profit but prosperity of other stakeholders.

56
Company competitive strengths

 Extensive experience of company promoters

 The landed property in Kanpur, Sikandrabad and Noida.

 Wide and various ranges of products.

 Quality standard

 Various outside Indian subsidies.

 Best Exporter in textile industry.

57
(C)Company major events

Year Event

1980 The Company was incorporated on 14th January, as a private limited

company, under the name; AMINSON’S LEATHER FINISHERS

PRIVATE LIMITED with its registered office at Kanpur in the state of

Uttar Pradesh.

1984 It was converted into a Public Limited Company by special resolution

passed at the meeting of shareholders.

1989 The name of Company was subsequently changed to AMINSON

LIMITED on 21st February, and a fresh Certificate of Incorporation was

obtained from the Register of Companies, Uttar Pradesh, at Kanpur.

1990 The Company had made a public issue of equity shares for financing its

expansion project of increasing its installed capacity to 3,00,000 hides p.a.

and for setting up a new unit at Unnao in U.P.

1993 The company's operations during the period were adversely affected by

distributed law & order situation prevalent in the country and imposition

of export duty @ 5% on the export of finished leather and withdrawal of

Exim Scrip/Rep. License on the export, by Government of India.

58
1995 The Scheme of Amalgamation of M/s. Super House Limited and Super

Garments Limited with this Company has been duly sanctioned by Hon'ble

High Court of Judicature at Allahabad vide its.

During the year the Company has received maximum number of Export

Awards in Leather and Garments Industry for various categories of Export

2000 made during last year.

Company has also entered into indigenous Market in a big way. The

Company has launched its product in the Indigenous Market with the brand

name of ALLENCOOPER.

2007 Super House Leathers has introduced a new range of Allen Cooper Shoes.

2010 Company name has been changed from Super House Leathers Ltd to

Superhouse Ltd.

2011 Superhouse Ltd has entered into contract with the shareholders of M/s.

Briggs Industrial Footwear Ltd., Leicester, U.K. for the acquisition of

100% shareholding of the company.

59
2012 Superhouse has recommended Dividend @ 15%.

2012-13 Superhouse Ltd has won Best Export Performance.

2014 Board has recommended a dividend of Rs.1.50per share (i.e.15%).

2014-15 Niryaat Shree Award 2014-15, Presented by

Hon'ble President of India Shree Pranab Mukharji

60
(D)AWARDS

 Superhouse Group has been honored with prestigious National Export Award for outstanding

export performance and also, Beast overall Export Gold Trophy Presented by Council for

Leather Exports.

 UTKRAST PURASKAAR, RAJYA NIRYAAT PURASKAAR Presented by Niryaat

Protsaahan Wibhaag Uttar Pradesh Government.

 In year 2013-14 Best Export Performance for Non Leather Harness & Saddler Presented by

Council for Leather Exports. And also Best Exporter for Leather Footwear Category above Rs.

200 Crores.

61
(E) PRODUCTS

Fashion Wear

The fashion garments industry has seen huge demands on both design and quality. Superhouse

Ltd. manufacturing expertise, innovative design and rigorous quality control allow them to

produce leather and suede garments that are as affordable and fashionable. They constantly

change our designs keeping in mind the latest global trends and styles, and as per the demands of

their customers.

Based in Noida unit manufactures for reputed international labels in USA. The list includes brands

like ‘DKNY’, ‘Liz’, ‘Claiborne’, ‘Ralph Lauren’, ‘Gap Inc.’,

Capacity: 6,000 garments per data

62
Leather Garments

The unique combination of manufacturing expertise, exceptional design and rigorous quality

Jackets: Ladies’ Short Jackets, Men’s Jackets, Motorcycle Jackets, 3/4 Jackets and Vests.

Trousers, Skirts, Camisoles, Jackets / Trousers with embroidery / crochet detailing

Quality Standards-:

CEN 345 & DIN 4843.

63
Work Wear:

Work wear is the latest milestone in Superhouse quest for variety in garment manufacturing.

Within a short span of two years, they have been able to tap the most demanding and renowned

bulk overseas buyers and a vast array of domestic consumers as well. This has been achieved by

maintaining consistent quality, competitive pricing and consistency in timely dispatch &

delivery.

The range of work wear includes industrial clothing, safety wear, uniforms, bib trousers,

trousers, boiler suits, body warmers, waterproof clothing, fire-retardant clothing and embroidered

work wear.

Superhouse’s garments are designed to provide comfort in shape, size and movement, with multi

option and adjustment features added to give our customers the complete benefit of well thought

out work wear products.

Volume: 2,000 garments per day.

64
Fabric Products

• KNITTED INTERLOCK FABRIC 96% COTTON 4% SPANDEX

• KNITTED INTERLOCK FABRIC 94% COTTON 6% SPANDEX

• KNITTED FINE CORD RIB FABRIC 62% POLYESTER 32% COTTON 6% SPANDEX

• KNITTED MEDIUM CORD RIB FABRIC 62% POLYESTER 32% COTTON 6%

SPANDEX

• KNITTED BIG CORD RIB FABRIC 62% POLYESTER 32% COTTON 6% SPANDEX

• KNITTED COTTON HARRING BONE FABRIC 95% COTTON 5% SPANDEX

• KNITTED INTERLOCK PRINTED FABRIC 96% NYLON 4% LYCRA

• BI-STRETCH WOVEN FABRIC 94% COTTON 6% LYCRA

• BI-STRETCH WOVEN FABRIC 96% COTTON 4% LYCRA

• BI-STRETCH WOVEN MULTI CHECK FABRIC 94% COTTON 6% LYCRA

• WEFT-STRETCH WOVEN FABRIC 94% COTTON 6% LYCRA

• WEFT-STRETCH WOVEN FABRIC 96% COTTON 4% LYCRA

• WEFT-STRETCH WOVEN MULTI CHECK FABRIC 94% COTTON 6% LYCRA

• BI-STRETCH WOVEN DENIM FABRIC 96% COTTON 4% LYCRA

65
• WEFT-STRETCH WOVEN DENIM FABRIC 96% COTTON 4% LYCRA

• WOVEN NYLON LYCRA FABRIC 96% NYLON 4% LYCRA

• WEFT-STRETCH WOVEN CODUROY FABRIC 96% COTTON 4% LYCRA

• WOVEN POLY VISCOSE 96% POLYESTER 4% LYCRA

NOTE: THEY CAN DEVELOP NEW FABRIC AS PER CUSTOMER’S

REQUIREMENT.

66
(F) EXPORT MARKETS

U.K, Spain, Europe, USA, Germany, United Arab Emirates, Russia, Japan, Australia, New-

Zealand, Holland, Thailand.

67
OBJECTIVES OF THE STUDY
&
RESEARCH METHODOLOGY

68
(A) OBJECTIVES OF STUDY

The major objectives of the recent study are to know about financial strengths and weakness of

Superhouse ltd. through Financial Ratio analysis.

 To study the liquidity position of the company.

 To study the profitability of the company.

 To evaluate the performance of the Superhouse ltd. by using ratios as a yardstick to

measure the efficiency of the company.

NEED OF STUDY:

 Textile industry is very volatile due to import export activities.

 Import export indices measures the growth of economy.

SCOPE OF STUDY:

 In last few years the role and importance of import and export is increased as a result of

globalization of market.

 Enhancement in working area and need for enhancing the market.

69
(B) RESEARCH METHODOLOGY

Data source & Collection Methods:

Secondary Data:

Secondary Data are those which have already been collected by someone else and which have

already been passed through the statistical process. [Secondary data will be collected from the

reports of the bank, books, journals and internet. It is gathered from annual reports, official records

and standing orders of the units here will be done the analysis on basis of secondary data, which

include:

 Balance Sheet of bank.

 Profit and loss A/C of the company.

 Research papers

 Newspapers

DATA ANALYSIS:

 Ratio analysis

70
DATA ANALYSIS
WORKING CAPITAL ANALYSIS

71
Ratio analysis:

Ratio analysis is a widely used tool of financial analysis. The term ratio in it refers to the

relationship expressed in mathematical terms between two individual figures or group of figures

connected with each other in some logical manner and are selected from financial statements of

the concern. The ratio analysis is based on the fact that a single accounting figure by itself may

not communicate any meaningful information but when expressed as a relative to some other

figure, it may definitely provide some significant information the relationship between two or

more accounting figure/groups is called a financial ratio helps to express the relationship

between two accounting figures in such a way that users can draw conclusions about the

performance, strengths and weakness of a firm.

RATIOS CALCULATED:

 GROSS PROFIT RATIO

 NET PROFIT RATIO

 RECEVIABLE RATIO

 PAYABLE RATIO

 CURRENT RATIO

 QUICK RATIO

 DEBT EQUITY RATIO

 FIXED ASSET TURNOVER RATIO

72
GROSS PROFIT RATIO OF SUPERHOUSE Ltd.

This ratio expresses the relationship between Gross profit and sales. It indicated the efficiency of

production or trading operation. A high gross profit ratio is a good management as it implies that

cost of production is relatively low.

Gross Profit Ratio

FORMULA: - Gross Profit * 100

Sales

2014-15 2015-16 2016-17

Gross Profit ratio: - 9.03 9.19 9.36

73
ANALYSIS THROUGH CHART

GROSS PROFIT RATIO

9.4 9.36

9.3
9.19
9.2
9.1 9.03
9
8.9
8.8
2014-15 2015-16 2016-17

GROSS PROFIT RATIO

INTERPRETATION

Gross profit ratio of the company is 9.03% for the year 2014-15 and it is increased to 9.19% in

2015-16. It is because the cost of the company has minor decreased because of decreased in raw

material cost. Then company’s gross profit ratio increased to 9.36% due to increase of Sales which

is best for company so we can say that company’s position is strong for the financial year 2016-

17.

74
NET PROFIT RATIO OF SUPERHOUSE Ltd.

Net profit ratio establishes a relationship between net profit (after taxes) and sales. It is determined

by dividing the net income after tax to the net sales for the period and measures the profit per rupee

of sales.

Net Profit Ratio

FORMULA: - Net Profit * 100

Sales

YEAR 2014-15 2015-16 2016-17

Net Profit ratio: - 4.13 4.12 4.87

75
ANALYSIS THROUGH CHART

NET PROFIT RATIO

5 4.87
4.8

4.6

4.4

4.2 4.13 4.12

3.8

3.6
2014-15 2015-16 2016-17

NET PROFIT RATIO

INTERPRETATION

Company’s net profit is 4.13% in the year 2014-15 and then it is decreased to 4.12% in 2015-16.

But in 2016-17 by covering minor decrease of previous year and increased to 4.87%. But from

above data and by seeing the overall earning we can say that company is in good position.

76
POSITION OF RECEIVABLE RATIO IN SUPERHOUSE LTD.

FORMULA: -

DEBTORS

RECEIVABLE RATIO = ---------------- * 365

SALES

YEAR 2014-15 2015-16 2016-17

RECEIVABLE RATIO (IN DAYS) 55 61 70

ANALYSIS THROUGH CHART

77
RECEIVABLE RATIO (IN DAYS)
80
70
70
61
60 55

50

40

30

20

10

0
2014-15 2015-16 2016-17

RECEIVABLE RATIO (IN DAYS)

INTERPRETATION

From the above table and diagram we can say that company has good debt collection period

because the company have low debt collection period. But the companies’ debt collection period

for the year 2014-15 is 55 and then it is increased to 61 in 2015-16 than 70 in 2016-17. So we can

say that the company’s debt collection period is increasing averagely by 5 days per year. We can

say that the company has no impact on slowdown of economy. So we can say that overall position

of the company is satisfactory.

78
POSITION OF PAYABLE RATIO IN SUPERHOUSE LTD.

FORMULA:-

CREDITORS

PAYABLE RATIO= -----------------------------*365

PURCHASES

YEAR 2014-15 2015-16 2016-17

PAYABLE RATIO (IN DAYS) 85 70 78

79
ANALYSIS THROUGH CHART

PAYABLE RATIO
90 85
78
80
70
70

60

50

40

30

20

10

0
2014-15 2015-16 2016-17

PAYABLE RATIO

INTERPRETATION

SUPERHOUSE LTD. has good payable ratio like receivable ratio. The company has averagely 77

days of payable ratio. So it is good for company because lower the payable ratio means the

company liquidity position is strong.

80
POSITION OF CURRENT RATIO IN SUPERHOUSE LTD.

FORMULA

TOTAL CURRENT ASSETS

CURRENT RATIO = --------------------------------------------

TOTAL CURRENT LIABILITIES

YEAR 2014-15 2015-16 2016-17

T.C.A 231.15 273.83 340.85

T.C.L 140.88 161.22 182.45

CURRENT RATIO 1.64 1.69 1.86

81
ANALYSIS THROUGH CHART

CURRENT RATIO
1.9
1.86
1.85

1.8

1.75
1.69
1.7
1.64
1.65

1.6

1.55

1.5
2014-15 2015-16 2016-17

CURRENT RATIO

INTERPRETATION

The current ratio of the unit is less than standard. The current ratio should be 2:1 but it is not. But

the company has 1.64 in 2014-15, 1.69 in 2015-16 and 1.86 in 2016-17. So we can say that the

company is in not in position as it need.

82
POSITION OF QUICK RATIO IN SUPERHOUSE LTD.

FORMULA: -

TOTAL CURRENT ASSETS - INVENTORIES

QUICK RATIO = -----------------------------------------------------------------

TOTAL CURRENT LIABILITIES

YEAR 2014-15 2015-16 2016-17

INVENTORIES 115.64 131.95 145.17

QUICK RATIO 0.81 0.88 1.07

83
ANALYSIS THROUGH CHART

QUICK RATIO
1.2
1.07

1
0.88
0.81
0.8

0.6
QUICK RATIO

0.4

0.2

0
2014-15 2015-16 2016-17

INTERPRETATION

If we consider the data of the company, we can say that this ratio is also not matching with standard

that is 1:1. The company have quick ratio 0.81 in 2014-15 than it is increased to 0.88 in 2015-16

and then it increased to 1.07 in 2016-17.

84
POSITION OF DEBT-EQUITY RATIO IN SUPERHOUSE LTD.

Formula = Debt / Equity

Calculation of debt-equity ratio at SUPERHOUSE LTD:

Particulars 2014-15 2015-16 2016-17

Long Term Debt 109.95 136.52 157.36

Net Worth 147.53 166.21 196.06

D/E Ratio 0.74:1 0.82:1 0.80:1

85
ANALYSIS THROUGH CHART

DEBT-EQUITY RATIO
0.84
0.82
0.82
0.8
0.8

0.78

0.76
0.74
0.74

0.72

0.7
2014-15 2015-16 2016-17

DEBT-EQUITY RATIO

INTERPRETATION

we can say that SUPERHOUSE LTD is using its funds and not taking loans from banks. Equity is

more than debt that shows a very strong position in whole market. Using lower debts decreases

the cost as well as risk. So company is in good position.

86
FIXED ASSETS TURNOVER RATIO:

Net sales

Fixed assets turnover ratio = -------------------

Fixed assets

YEAR 2014-15 2015-16 2016-17

FIXED ASSET 4.29 3.47 2.06

TURNOVER RATIO

87
ANALYSIS THROUGH CHART

FIXED ASSET TURNOVER RATIO

5
4.5 4.29
4
3.47
3.5
3
2.5 2.06
2
1.5
1
0.5
0
2014-15 2015-16 2016-17

FIXED ASSET TURNOVER RATIO

INTERPRETATION

The above table and diagram shows the relationship between the fixed assets and sales. The value

of fixed asset turnover ratio in 2014-15 is 4.29. And in 2015-16 is 3.47, in 2016-17 is 2.06. The

ratio indicates the extent to which the investments in fixed assets contribute towards sales.

88
FINDINGS:

GROSS PROFIT RATIO OF SUPERHOUSE Ltd.

Gross profit ratio of the company is 9.03% for the year 2014-15 and it is increased to 9.19% in

2015-16. It is because the cost of the company has minor decreased because of decreased in raw

material cost. Then company’s gross profit ratio increased to 9.36% due to increase of Sales which

is best for company so we can say that company’s position is strong for the financial year 2016-

17.

NET PROFIT RATIO OF SUPERHOUSE Ltd.

Company’s net profit is 4.13% in the year 2014-15 and then it is decreased to 4.12% in 2015-16.

But in 2016-17 by covering minor decrease of previous year and increased to 4.87%. But from

above data and by seeing the overall earning we can say that company is in good position.

POSITION OF RECEIVABLE RATIO IN SUPERHOUSE LTD.

From the above table and diagram we can say that company has good debt collection period

because the company have low debt collection period. But the companies’ debt collection period

for the year 2014-15 is 55 and then it is increased to 61 in 2015-16 than 70 in 2016-17. So we can

say that the company’s debt collection period is increasing averagely by 5 days per year. We can

say that the company has no impact on slowdown of economy. So we can say that overall position

of the company is satisfactory.

89
POSITION OF PAYABLE RATIO IN SUPERHOUSE LTD.

SUPERHOUSE LTD. has good payable ratio like receivable ratio. The company has averagely 77

days of payable ratio. So it is good for company because lower the payable ratio means the

company liquidity position is strong.

POSITION OF CURRENT RATIO IN SUPERHOUSE LTD.

The current ratio of the unit is less than standard. The current ratio should be 2:1 but it is not. But

the company has 1.64 in 2014-15, 1.69 in 2015-16 and 1.86 in 2016-17. So we can say that the

company is in not in position as it need.

POSITION OF QUICK RATIO IN SUPERHOUSE LTD.

If we consider the data of the company, we can say that this ratio is also not matching with standard

that is 1:1. The company have quick ratio 0.81 in 2014-15 than it is increased to 0.88 in 2015-16

and then it increased to 1.07 in 2016-17.

POSITION OF DEBT-EQUITY RATIO IN SUPERHOUSE LTD.

we can say that SUPERHOUSE LTD is using its funds and not taking loans from banks. Equity is

more than debt that shows a very strong position in whole market. Using lower debts decreases

the cost as well as risk. So company is in good position.

90
FIXED ASSETS TURNOVER RATIO:

The above table and diagram shows the relationship between the fixed assets and sales. The value

of fixed asset turnover ratio in 2014-15 is 4.29. And in 2015-16 is 3.47, in 2016-17 is 2.06. The

ratio indicates the extent to which the investments in fixed assets contribute towards sales.

91
CONCLUSION

92
(A) CONCLUSION

By concluding the study about the financial analysis it is finding that FIANACIAL ANALYSIS

of Superhouse ltd. is too good. Superhouse ltd. has sufficient funds to meet its current obligation

every time which is due to sufficient profits and efficient management of Superhouse Limited.

Cash management and receivable management are too much good because of centralized control

on these. Raw material for the all units of Superhouse group is purchased by corporate office in

bulk which is the best way. Safety measures for inventories are also quiet sufficient in company.

Overall the financial performance of Superhouse ltd is very much efficient.

On studying the financial performance of Superhouse Ltd. for a period of three years

from 2014-15 to 2016-17, the study reveals that the financial performance is better. Superhouse

Ltd has been able to maintain optimal cost positioning. Despite price drops in various products,

the company has been able to maintain and grow its market share to make strong margins in

market, contributing to the strong financial position of the company. The company was able to

meet its entire requirements for capital expenditures and higher level of working capital

commitment with higher volume of operations and from its operating cash flows.

93
SUGGESTIONS

94
(B) SUGGESTIONS

 Management should make the proper use of inventory control techniques like fixation of

minimum, maximum and ordering levels for all the items for less blockage of money.

 The unit should also adopt proper inventory control like ABC analysis etc. This inventory

system can make the inventory management more result oriented The EOQ can be followed in

stores

 Due to competition prices are market driven and for earning more margin company should

give the more concentration on cost reduction by improving its efficiency

 The investments of surplus funds are made by the corporate office and the unit is not generally

involved while taking decisions with regard to structure of investment of surplus funds. The

corporate office should involve the units so as to better ascertain the future requirements of

funds and accordingly the investments are made in different securities.

 The company also concentrates on Indian Market as it does for export

 The Management must find out the reasons for the decrease in sales and must take

appropriate measures.

 The Management must also study the market position and it also find the demand prevailing

in the market for the products and thus this will guide them to enhance their sales volume.

95
BIBLIOGRAPHY
BIBLIOGRAPHY

96
References

 BOOKS

 ANNUAL REPORTS OF SUPERHOUSE LTD.

 WEBSITES

 http://www.superhousegroup.com/

 http://www.economywatch.com/business-and-economy/textile-industry-overview.html

 http://www.economywatch.com/business-and-economy/textile-mills.html

 http://www.allprojectreports.com/performance analysis/performance _analysis.htm

 http://www.moneycontrol.com/

T.S Reddy and Y. Hariprasad Reddy, Financial management, New

Delhi: Tata Mc Graw hill Publishing company Ltd., 1999, 3rd edition

M.A Sahaf Management and Accounting 4th Edition, Tata McGraw Hill

Publishing Company Ltd, 5th Reprint - 2006 - New Delhi.

IM. Pandey, Financial Management 8th Edition, Vikas Publishing house

Pvt Ltd, 6th Reprint -2006- New Delhi.

97
IM. Pandey, Working capital Management 8th Edition, Vikas Publishing

house Pvt Ltd, 6th Reprint -2006- New Delhi

R.K. Sharma & S.K. Gupta, Financial Management

R.P. Rustagi, Financial Management

98
ANNEXURE’S

Balance Sheet of Superhouse ------------------- in Rs. Cr. -------------------

Mar
Mar Mar Mar
Mar '17 '16
'15 '14 '13

12mth 12 12 12

12 months s mths mths mths

Sources Of Funds

Total Share Capital 11.42 11.42 11.42 11.42 11.42

Equity Share Capital 11.42 11.42 11.42 11.42 11.42

209.2 151.4
Reserves 246.33 232.71 182
6 9

220.6 193.4 162.9

Networth 257.75 244.13
8 2 1

169.6 157.3 136.5

Secured Loans 173.27 178.27
2 6 2

169.6 157.3 136.5

Total Debt 173.27 178.27
2 6 2

350.7 299.4
Total Liabilities 431.02 422.4 390.3
8 3

99
Mar Mar Mar Mar
Mar '17
'16 '15 '14 '13

12 12 12 12
12 mths
mths mths mths mths

288.6 270.8 254.1

330.25 330.21
Gross Block 5 1 7

Less: Revaluation Reserves 0 2.42 2.45 2.63 3.3

125.6 111.3
Less: Accum. Depreciation 136.4 138.15 99.13
8 2

160.5 156.8 151.7

Net Block 193.85 189.64
2 6 4

Capital Work in Progress 3.71 11.59 16.18 3.22 5.48

Investments 36.58 35.22 34.97 32.31 29.59

145.1 131.9
Inventories 169.58 176.23 173.3
7 5

105.1 126.3
Sundry Debtors 94.73 113.82 87.09
6 5

Cash and Bank Balance 0 29.57 28.42 25.81 22.23

306.8 297.3 241.2

Total Current Assets 264.31 319.62
8 3 7

Loans and Advances 46.5 36.38 48.45 43.52 32.56

100
355.3 340.8 273.8
Total CA, Loans & Advances 310.81 356
3 5 3

171.8 174.7 156.5

Current Liabilities 152.88 166.08
4 6 7

Provisions 2.28 3.96 4.87 7.69 4.65

176.7 182.4 161.2

Total CL & Provisions 155.16 170.04
1 5 2

178.6 112.6
Net Current Assets 155.65 185.96 158.4
2 1

390.2 350.7 299.4

Total Assets 389.79 422.41
9 9 2

124.6
51.59 192.32 89.16 76.15
Contingent Liabilities 8

200.1 175.4 147.7

Book Value (Rs) 233.79 221.43
6 4 7

101