b+79 purav+patadia

7/31/2019 B+79 Purav+Patadia

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A

Financial project report on

CENTURY ENKA LIMITED

SUBMITTED TO

MARWADI EDUCATION

FOUNDATION GROUP OFINSTITUTIONS

(AFFILIATED TO THEGUJARAT TECHNOLOGICAL UNIVERSITY)

TOWARDS THE PARTIAL FULFILLMENT OF THE

PAPER OF PRACTICAL STUDIESIN THE FIRST YEAR OF

MASTER OF BUSINESS ADMINISTRATIONPROGRAMME.

2011-2012

Prepared by

Name: Purav PatadiaM.B.A SEM. - 1

Roll no.MBA103079


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ACKNOWLEDGEMENT

Through this acknowledgement, I express my sincere gratitude

towards all those people who have helped me in the preparation of this

project, which has been a learning experience.

I would like to thank the director Prof. Dr. S. Chinnam Reddy sir, the

faculty, the computer lab instructor, the Liberian and the administrative staff

of MARWADI EDUCATION FOUNDATION GROUP OF

INSTITUTIONS For their support.

Finally, I express my sincere thanks to Prof. Bhavik Panchasara

who guided me throughout the project and gave me valuable suggestion and

encouragement.


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PREFACE

As a part of the course curriculum, the M.B.A. semester-1students are

required to prepare a financial project report. The objective behind preparing

this report is to relate the management subjects taught in the classroom to

their practical application.

The preparation of this report is based on financial analysis of annual

reports of three consecutive years for a CENTURY ENKA LIMITED

company, using ratio analysis, common size statement and other financial

tools.

The scope of project report is limited to the study of the financial

position of the company on the basis of the published data available. In spite

of my best efforts, there may be error of omissions and commissions, which

may please be excused.


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INDEX

Sr.no. Pertculars Page no.1 Analysis of industry 5

2 Introduction Of company 9

3 Orge. Hierarchy 10

4 Profit and loss account 11

5 Balance sheet 13

6 Cash flow statement 15

7 Common size statements 16

8 Financ ial highlights 18

9 Ratio analysis 27

10 Awards and achievements 47

11 Social responsibility 48

12 Human resource management 49

13 Conclusion 50

14 Bibliography 51


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BRIEF ANALYSES OF INDUSTRY &INDUSTRY TREND

Textile Industry is one of the largest and oldest industries in India. It hasa significant role in India as it fulfils the essential and basic need of people.Textile Industry in India stands at unique place and has maintained asustainable growth over the years. This is a self-reliant and independentindustry and has great diversification and versatility.

Textile Industry in India provides great contribution for the developmentof economy. It is the second largest textile industry in the world after China.It provides ample employment opportunities to people belonging to allclasses. After agriculture this industry provides employment to maximumnumber of people in India employing 35 million people.

Textile Industry represents the rich culture, tradition, heritage &economic well-being of country with diversified range and versatility. At thesame time industry is competitive enough to fulfil different demand patternsof domestic and global markets.

With huge investments, persistence innovations, latest product mix andplanned marketing, today, India has come out as a flourishing outsourcingcentre for textiles and apparel industry to meet the global requirement of themanufacturing fibers and yarns products. In a view of the rising rapport withmajor global brands, dismantling of quota system from 2005 era would hitupon India as a main global outsourcing hub.


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KEY FACTS OF TAXTILE INDUSTRY

Indian Textile Industry is one of the largest and oldest industry in

India.

Indian Textile Industry is highly fragmented industry; at the same

time it is an independent and self-reliant industry that has shown

sustainable growth over the years.

Indian textile Industry is valued at US$ 36 Billion with exports of

US$ 17 Billion in 2005-2006.

Indian Textile Industry is second largest industry in terms of

providing vast employment opportunities and employs around 35

million people in country after agriculture sector.

The Indian Textile Industry plays vital role in economic development

and contributes 14% to industrial production in the country.

Textile Industry contributes around 4% of GDP, 9% of excise

collections, 18% of employment in industrial sector, and has 16 %share in countrys export.

Industry has direct and strong linkage with rural and agriculture

sector, therefore it is estimated that, one of every six households in

country is directly or indirectly dependent on this industry.

Industry contributes around 25% share in the world trade of cotton

yarn.


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Indian Exports of Apparel & TextileFacts & Figures

Our exports increased from US$ 14 million (2004-05) to US$ 17

million (2005-06)21.77 % increase in 1 year. With continuing growth, the total exports has increased to US$

19.62 billion (2006-07).

Indias Current share in world export of textiles industry is 3.5 -

4 %.

Indias Current share in world clothing export 3 %.

Worlds Major exports market is Europe (22% share in textiles &

43% share in apparel).

Single largest buyerUS (10% share in textiles and 32.65 share in

apparel).

Other major export markets include - UAE, Saudi Arabia, Canada,

Bangladesh, China, Turkey and Japan.

Largest export segment Readymade Garments (45% share in

textile exports and 8.25 share in India's total exports).

Exports of readymade garments are expected to touch US$ 14.5

billion with a cumulative annual growth rate of 18-20% (Apparel

export Promotion Council)


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MAJOR PLAYERS OF INDUSTRY

Arvind Mills:-Arvind Mills is one of the major and fully verticallyintegrated composite mills player in India. It has large productionin denim, shirting and knitted garments. It is now adding value bymanufacturing denim apparel. Its sales are around US$ 300million.

Raymond:-Raymonds has the large, diversified integratedbusiness model, which is spread across the value chain from yarn

to retail. It is specialized in Diversified woolen textiles. It alreadysupplies to some US retailers. It also looking to also expandingdenim capacity and to become second largest denim player inIndia. Its presence in retail will be big positive in future. Its annualsales are around US$ 300 millions

Reliance Textiles:-Reliance Textiles is one of the major Textile

Company that is in business of fully integrated manmade fiber. Ithas capacity of more than 6 million tones per year. It has jointventure partners like, DuPont, Stone & Webster, Sinco (Italy) etc.

Vardhaman Spinning :-Vardhman deals in spinning, weaving andprocessing segment of the industry. It is planning to double itsfabric processing capacity to 50 million meters. It is an approvedsupplier to global retailers like GAP, Target and Tommy Hilfiger.

Its sales are little over US$ 130 millions


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INTRODUCTION OF THE COMPANY

The company CENTURY ENKA was Established in year 1965. The

company is a joint venture of B.K. Birla group and Accordis group ofNetherland.

CENTURY ENKA LTD. has three plants, which are

Century enka ltd. At pune Konkan Synthetic Fibres At Mahad in Maharashtra Rajashree Polyfil At Bharuch in Gujarat

It produces Nylon & Polyester Filament Yarns, POY, Jumbo Beams,Speciality Yarns, Industrial or Fibre grade Chips, Industrial Yarns & TyreCord Fabrics.

CEL is having installed capacity of 1,10,000 tons/annum of NylonChips & Polyester Chips with 12,000 tons/annum of Industrial Filament or

Tyre Cord Fabric.

CEL emphasizes on modernizing the technology to manufacture theglobal standard quality of Nylon & Polyester filament yarns. Century EnkaLtd is committed towards value of quality, innovation and fair businesspractices for complete customer satisfaction through good quality products.The company always focuses on improving plant efficiency in terms of rowmaterial consumption, wastage of raw material and energy consumption.The company also believes that the customer satisfaction is the key of

organizational success. The companys core business practices are based onthe concept of trust ship reflects transparency, adequate disclosure, fairnessin the conduct of the companys business operations.


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ORGANIZATION HIERARCHY OFTHE COMPANY

Name of the Directors DesignationMr. B. K. Birla Non-Executive Director & Promoter

Mr. R. A. Shah Non-Executive & Independent Director

Mr. B. S. Mehta Non-Executive & Independent Director

Mr. V. Dixit Non-Executive & Independent Director

Mr. G. M. Singhvi Executive & Whole-time Director

Mr. C.B.gagrani secretary

Messrs. Price Waterhouse Auditor


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PROFIT & LOSS A/C

Particulars 2008-09(Rs./cr.)

2009-10(Rs./cr.)

2010-11(Rs./cr.)

Income

Sales 1264.3 1327.03 1484.65

Less: Excise duty 101.97 96.16 140.32

Net Sales 1162.33 1230.87 1344.33

Other Income 18.98 10.05 12.76

1181.31 1240.92 1357.09

Decrease in Stocks -26.2 37.88 78.41

1155.11 1278.80 1435.50

ExpenditureRaw materials consumed 740.5 759.65 934.86

Purchase of goods(trading) 14.74 4.18 5.39

Expenses 290.87 290.60 317.33

1046.11 1054.43 1257.58Profit before Interest, Depreciation

and Tax.109 224.37 177.92

Interest Expenditure -25.66 -10.84 -13.05

Less: Interest income 1.84 3.43 2.47

-23.82 -7.41 -10.58

Depreciation -59.31 -61.27 -61.36

Less: transferred from revaluationreserve

0.21 0.21 0.21

-59.1 -61.06 -61.15

Profit before exceptional item andtaxation

26.08 155.90 106.19

Exceptional item 3.5 3.36 0

Profit before taxation 22.58 155.90 106.19


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Provision for Taxation

Current tax -13.82 -65.64 35.57

Minimum alternate tax credit

entitlement

0 0 0

Fringe benefit tax -0.26 0 0

Deferred Tax 8.12 13.26 8.74

-5.96 -52.38 -26.83Net Profit 16.62 100.16 79.36Balance b/f from last year 113.1 116.29 186.16

Profit available for appropriation 129.72 216.45 265.52

Appropriations

Proposed equity dividend 10.03 13.11 14.20

Tax on equity dividend 1.7 2.18 2.31

11.73 15.29 16.51General Reserve 1.7 15.00 15.00

Balance carried to B/S 116.29 186.16 234.01

129.72 216.45 265.52


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BALANCE SHEET

Particulars 2008-09

(Rs./cr.)

2009-10

(Rs./cr.)

2010-11

(Rs./cr.)

Sources of Funds

Shareholders Funds

Share Capital 20.05 20.85 21.85

Equity Share Warrants 0 4.73 0Reserves & Surplus 450.32 549.43 629.87

470.37 574.89 651.72Loan Funds

Secured loans 248.92 192 313.33

Unsecured loans 35.53 15.61 93.04

284.45 207.61 406.37Deferred tax liability 131.79 118.53 109.79

Total 886.61 901.03 1167.88

Application of Funds

Fixed Assets

Gross block 1521.61 1509.86 1568.40

Less: Depreciation 856.25 899.82 946.28Net block 665.36 610.04 622.12

Capital Work in Progress 0.08 0.06 124.23

665.44 610.10 746.35Investments 3.19 3.19 3.19

Current Assets, Loans & Advances

Inventories 119.62 196.34 302.39

Sundry debtors 73.79 94.03 125.08


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Cash and bank balances 7.87 3.96 9.70

Other current assets 0.26 0.20 0.22

Loans and advances 78.13 78.99 94.07279.67 373.52 531.46

Less: Current liabilities and

Provisions

Liabilities 45.39 62.43 88.23

Provisions 19.66 23.35 24.8965.05 85.78 113.12

Net Current Assets 214.62 287.74 418.34

Miscellaneous Expenditure 3.36 0 0

Total 886.61 901.03 1167.88


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CASH FLOW STATEMENT

Particulars Year ended

31.3.2009(Rs.)

Year ended

31.3.2010(Rs.)

Year ended

31.3.2011(Rs.)

Cash Flowarising fromOperating

activities

224.45 81.34 21.34

Cash Flow

arising fromInvesting

activities

(0.51) (3.41) (194.34)

Cash Flowarising from

Financingactivities

(220.59) (81.84) 178.74

Total 3.35 (3.91) 5.74


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COMMON SIZE INCOME STATEMENT

Particulars 2008-09(Rs./cr.)

2009-10(Rs./cr.)

2010-11(Rs./cr.)

Revenue 1155.11 100% 1278.80 100% 1435.50 100%

Less: expenditure 1046.11 90.56% 1054.43 82.45% 1257.58 87.61%

PBDIT 109 9.44% 224.37 17.55% 177.92 12.39%

Less: interest &depreciation

82.92 7.17%68.47 5.35% 71.73 5.00%

PROFIT BEFORE

EXCEPTIONAL ITEM

AND TAXATION

26.08 2.26%

155.9 12.79% 106.19 7.39%

Less: exceptional item(VRS compensation) 3.50 0.30% 3.36 0.26% --- ---

PBT 22.58 1.96% 152.54 12.53% 106.19 7.39%

Less : provision fortaxation

5.96 0.52%52.38 4.20% 26.83 1.87%

PAT 16.22 1.44% 100.38 8.33% 79.36 5.52%


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COMMON SIZE BALANCE SHEET

Particulars

2008-09

(Rs. /cr.)

2009-10

(Rs./cr.)

2010-11

(Rs./cr.)ASSETS:

Fix assets 665.44 75.05% 610.10 67.71% 746.35 63.91%

Investments 3.19 0.36% 3.19 0.36% 3.19 0.36%

Current assets 279.67 31.54% 373.52 41.45 531.46 45.51

LESS: Current

liabilities andprovisions

(65.05) (7.34%)

(85.78) (9.52%) (113.12) (9.69%)

Misc. exp. 3.36 0.38% --- --- --- ---

TOTAL 886.61 100% 901.03 100% 1167.88 100%

LIABILITIESEquity 470.37 53.05% 574.89 63.80% 651.72 55.80%

Debt (loan) 284.45 32.08% 207.61 23.04% 406.37 34.80%

Deferred tax liabilities 131.79 14.86% 118.53 13.15% 109.79 9.40%

TOTAL 886.61 100% 901.03 100% 1167.88 100%


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SALES/TOTAL INCOME:

Year 2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

Sales(Rs. In

Crores)

812.31 950.81 991.12 980.73 1183.68 1162.33 1230.87 1344.33

INTERPRETATION:

The sales of the company are growing over the period. That hasresulted into the growth in overall income of the company. Thecompany is operating with economies of scale. That is good forcompanys profitability.


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PROFIT BEFORE DEPRECIATION, INTREST & TAX:

Year 2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

PBDIT

(Rs. InCrores)

126.48 104.45 84.29 94.95 113.25 109.00 224.37 177.92

INTERPRETATION:

The profit of the company before depreciation, interest and tax is

fluctuating over the period of time and this is mainly due to thefluctuations in the interest burden of the company. The companys

interest burden has increased over the period of time which has resultedinto the reduction in the profit of the company before depreciation,interest and tax. But in last two years interest was lower so profit of thecompany before depreciation, interest and tax is high.


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PROFIT BEFORE DEPRECIATION & TAX:

Year 2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11PBDT

(Rs. InCrores)

124.90 103.48 77.60 76.98 82.63 85.18 216.87 167.34

INTERPRETATION:

The profit before depreciation and tax of the company if fluctuatingover the period of time and this is mainly due to the high depreciation.The company has purchased the assets over the period of time. So theamount of depreciation has increased. So the companys PBDT is

fluctuating. But because of high PBDIT in last two years the PBDT isalso high.


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PROFIT AFTER TAX:

Year 2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

PAT

(Rs. InCrores)

57.00 52.56 17.59 16.72 13.41 16.62 100.16 79.36

INTERPRETATION:

The profit after tax of the company has tremendously gone down over theperiod of time. In the year 2005-06 the PAT of the company is almostless than half than the year 2004-05. This situation is very bad from theview point of company and share holders. The company has to take someactions to arrest such a down fall in PAT. And company has done itcompany has good profit after tax in last two year. Which is good forcompany and its shareholders.


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DIVIDEND PAY OUT:

Year 2003-

04

2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

DividendPay Out

(In %)

60% 60% 60% 60% 50% 50% 60% 65%

INTERPRETATION:

The company has paid handsome amount of dividend to the share holdersover the period of time. In all the years the percentage of dividend isalmost the same but in 2007-08 and 2008-09 the percentage of dividendhas decreased which may be due to the recession but the company hastried its best to reward the share holders whenever possible. And in lasttwo year it has paid again good amount of dividend.


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EARNING PER SHARE:

Year 2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

EPS

(Rs.Per

Share)

19.90 18.35 6.45 8.34 6.69 8.29 49.61 36.47

INTERPRETATION:

The earnings per share refer to earnings made by the company from theamount invested by the share holders. There is a sudden fall in the EPS of

the company from 2005-06 which is due to the reduction in PAT of thecompany. But in last two years companys PAT is good so earning pershare is also very high. That is good for the share holder.


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BOOK VALUE PER SHARE:

Year 2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

BVPS

(Rs.Per

Share)

180.18 191.67 223.46 224.78 221.70 227.21 276.81 294.43

INTERPRETATION:

The Book Value per Share of the company has increased over the periodof time which is good for the company The net assets of the companyhave increased which has led to rise in the Book Value Per Share hasincreased gradually due to the improvement in the management of thecompany.


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TOTAL ASSETS:

Year 2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

Total

Assets

744.82 915.78 889.98 1032.02 1035.79 886.61 901.03 1167.88

INTERPRETATION:

The total assets of the company have been increasing which indicates thegrowth of the company at a high pace. The company is investing its fundin acquiring new machines which led to the technological up gradation ofthe company which leads to the better quality of the production.


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Introduction of accounting Ratio:-

Meaning:-

If relationships between various related items in these financialstatements are established, they can provide useful clue to gaugeaccurately the financial health and ability of business to make profit.This relationship between the two related items of financialstatements is known as RATIOS.

Thus a ratio is one number expressed in terms of another. It is a

mathematical yardstick that measures the relationship between twofigures.

A ratio is usually expressed in different ways:-

Simple figure or pure ratio. Percentage. Proportion of number or fraction.


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Importance of Ratio Analysis:-

Ratio analysis is a process of comparison of one figure againstanother and interpretation of the ratios to know the strengths andweaknesses of firms operations and of its financial position.

Ratio analysis helps various interested party like prospectiveinvestors, creditors, banks, employees etc to draw useful

conclusions to serve their purposes. The use of ration is becoming increasing popularly recently. Originally the bank used the current ratio to judge the capacity of

borrowing firm to repay the loan and to make regular interest

payments. Today it has assumed such an importance that anybody connected

with the business turns to ratios for measuring the financial strengthsand earning capacity of the business.

The suppliers of funds in the form of share capital would like toanalyze the accounts to ascertain its earning capacity and futureprospectus.

A banker or a creditor will measure the repaying capacity and thefinancial strengths on the basis of accounting ratios.


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Classification of Accounting Ratios:-

The ratios can be classified into following categories:-

Traditional classification

Functional classification

Traditional classification:-

The ratios are grouped into three categories on the basis of thefinancial statement from which the figures are taken for computing the

ratios. It is well-known traditional classification and has been so groupedsince the advent of ration analysis.

The ratios according to classifications are:-

1.Revenue statement ratios:

The ratios which are computed on the basis of items taken from revenuestatement i.e. Profit and loss. Net profit ratio is computed by dividing netprofit by sales and multiplying by 100.

2. Balance sheet ratios:

When two items or groups of items appearing in the balance sheet. Arecompared, the ratio so obtained is a balance sheet ratio. Ration betweencurrent assets and current liability is a balance sheet ratio.

3. Composite ratio:

A ratio showing the relationship between one items taken from balancesheet and on e item from profit and loss account is a composite ration or acombined ratio known as balance sheet ratio and revenue statement ratio. Areturn on capital employed shows the proportion of net profit to capitalemployed and it is a composite ratio.


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Functional classification:-

Ratios are also grouped in accordance with certain tests.On this basis there are four categories of ratios.

Profitability Ratio. Activity / Turnover Ratio. Liquidity Ratio. Leverage Ratio Valuation Ratio. Solvency ratios.

Relationship between two various related items in the financialstatement of the company are established, is known as accounting ratio.

Ratios are useful to the prospective investor, creditors, banks andemployees to make decision of doing investment in the company. Ratioanalysis is process of compression of one figure with another figure. Andinterpretation of the ratio is done for knowing strengths and weaknesses ofthe firms operation and firms financial position.

Method of interpretation through ratios:-

Comparison with ideal ratio

Comparison with past ratio

Help of some related ratio

Comparison of ratio with other firms ratio.


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SOLVENCY RATIO

The proportion of owners capital to outside debts or the proportion offixed income bearing securities to equity capital are known as solvencyratios. The long term solvency of a company is judged by leverage ratios.The short term creditors, like the bankers and suppliers of raw material, aremore concerned with the firms current debt paying ability.

On the other hand, long term creditors, like debenture holders,financial institutions, etc. are more concerned with firms long term financial

strength. In fact, a firm should have a strong short as well as long term

financial position. To judge the long term financial position of a firm,financial leverage or capital structure ratios are calculated. These ratiosindicate mix of funds provided by owners and lenders. These ratios show themix of capital provided by the owners & creditors of the company.

Solvency Ratio includes following ratio: -

Debt Equity Ratio

Capital Employed to Net Worth Ratio

Fixed Interest Coverage Ratio


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DEBT-EQUITY RATIO

Concept:- This ratio establishes the relationship between total debt

of the company and total net worth of the company. This ratio isuseful in measuring the burden of debt on equity share holders fundof the company.

Formula:-

Debt-EquityRatio:-

Total Debt

Total Net Worth

Computation:-

Particulars 2009 2010 2011

Total Debt 284.45 207.61 406.37

Total Net Worth 470.37 574.89 651.72Ratio 0.60 : 1 0.36:1 0.62:1

Analysis:-

i. The Debt-Equity ratio of the company is fluctuating.ii. The Debt-Equity ratio of the company is very high which shows the

huge burden of debt on equity share holders fund. This due to the

very huge amount of secured loans. If the company still keep onincreasing the secured loan amount than the pressure on the assets

would increase. So the borrowing capacity if the company wouldbecome weaken.


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CAPITAL EMPLOYED TO NET WORTH RATIO:-

Concept:- This ratio establishes the relationship between capitalemployed in the business and the net worth of the company. This ratiois useful in measuring the proportion of share holders fund in thetotal capital employed in the business.

Formula:-

Capital

Employed tonet worth

Ratio:-

Total Capital Employed

Total Net worth

Computation:-


Total CapitalEmployed(TA-CL)

671.99 613.29 699.54

Total Net Worth 470.37 574.89 651.72Ratio 1.43 : 1 1.07:1 1.07:1

Analysis:-

i. The Capital Employed to net worth ratio of the company is

fluctuating.ii. The total contribution of the share holders fund in the entire capital

structure of the company has decreased in 2009.


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FIXED INTREST COVREGE RATIO

Concept:- This ratio establishes the relationship between the EBIT

and Interest of the company. This ratio is useful in measuring theinterest bearing capacity of EBIT of the company.

Formula:-

Fixed Interest

convergeRatio:-

EBIT

Total Interest

Computation:-


EBIT 109 224.37 177.92Total Interest 25.66 10.84 13.05Ratio 4.25 times 20.70 times 13.63 times

Analysis:-

i. The Fixed Interest coverage ratio of the company is fluctuating.ii. The fixed interest coverage ratio of the company is around 3-4 times

which shows the good interest bearing capacity of the company. So ifin future the company wants to increase the fixed interest bearingsecurities in the capital structure of the company than the companycan go for it, if this trend continues.


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Profitability Ratio


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GROSS PROFIT RATIO

Concept:- This ratio establishes the relationship between the gross

profit and net sales of the company. This ratio is useful in measuringthat on every 100 sales the company is earning how much profit?

Formula:-

Gross Profit

Ratio:-Gross Profit

Net Sales

Computation:-


Gross Profit 195.08 223.19 175.76

Net Sales 1162.33 1230.87 1344.33Ratio 16.85% 18.13% 13.07%

Analysis:-

i. The Gross Profit ratio of the company is increasing.ii. It is seems that the sales has gone up due to which the ratio is also

increasing. On the sale of every 100 Rs. the company is getting theprofit of around 18 Rs. which is good for the company. The companyshould try to increase the margin.


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NET PROFIT RATIO

Concept:- This ratio establishes the relationship between the netprofit and net sales of the company. This ratio is useful in measuringthe profitability of the company.

Formula:-

Net Profit

Ratio:-

PAT

Net Sales

Computation:-


PAT 16.62 100.16 79.36

Net Sales 1162.33 1230.87 1344.33Ratio 1.43% 8.13% 5.90%

Analysis:-

i. The Net Profit ratio of the company is fluctuating.ii. There is an inverse relationship between the gross profit & the net

profit of the company because gross profit is rising whereas net profit

is fluctuating. This is because of the increase in the administrative andselling expenses. The company should control the administrative andselling expenses. So that the net profit margin can be increased. But inyear 2010 it is high and it is good for the company.


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RETURN ON SHARE HOLDERS FUND

Concept:- This ratio establishes the relationship between the profit

after tax and the share holders fund of the company. This ratio isuseful in measuring the efficiency with which the share holders fundis being employed in the business.

Formula:-

Return onshares holder

fund Ratio:-

PAT

Share holders fund

Computation:-


PAT 16.62 100.16 79.36

Share holdersfund 470.37 574.89 651.72

Ratio 3.56% 17.42% 12.17%

Analysis:-

i. The return on share holders fund is stable.ii. It seems the company is earning satisfactory returns on the share

holders fund. We can say that the company should try to increase thePAT of the company otherwise the company may loose the shareholders confidence.


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RETURN ON TOTAL ASSETS

Concept:- This ratio establishes the relationship between the profit

after tax and the total assets employed in the business. This ratio isuseful in measuring the efficiency with which the total assets arebeing employed in the business.

Formula:-

Return on totalassets Ratio:-

PAT

Total Assets

Computation:-


PAT 16.62 100.16 79.36Total Assets 754.82 782.50 1,058.09

Ratio 2.20% 12.8% 7.50%

Analysis:-

i. The return on total assets of the company is stable.ii. The company is earning satisfactory returns on the fixed assets

employed in the business. But the company can still increase theefficiency and can get higher returns on the total assets.


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Activity ratios


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INVENTORY TURNOVER RATIO

Concept:- This ratio establishes the relationship between COGS and

average inventories. This ratio is useful in measuring the efficiencywith which the inventories is converted into sales.

Formula:-

Inventory Turn-

over Ratio:-COGS

Average Inventories

Computation:-


COGS 966.53 1007.68 1168.57

Avg. Inventories 119.62 196.34 302.39Ratio 6.38 times 5.13 times 3.86 times

Analysis:-

i. The stock turn over ratio of the company is decreasing.ii. This is not satisfactory ratio for the company, but in year 2009 the

inventories are almost 6 times in a year are converted into the sales.


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FIXED ASSETS TURN-OVER RATIO

Concept:- This ratio establishes the relationship between net sales

and the total fixed assets of the company. This ratio is useful inmeasuring the efficiency with which the fixed assets are being utilizedin the business.

Formula:-

Fixed assetsTurn-over

Ratio:-

Net Sales

Net Fixed Assets

Computation:-


Net sales 1162.33 1230.87 1344.33

Net Fixed assets 665.44 610.04 622.12Ratio 1.747 times 2.01 times 2.16 times

Analysis:-

i. The fixed assets turn-over ratio of the company is increasing but withthe very low margin.

ii. This shows that the efficiency of utilizing fixed assets of the companyis increasing. So we can say that this is a satisfactory situation for thecompany.

iii. So the company can still increase the efficiency of utilizing the totalfixed assets.


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TOTAL ASSETS TURN-OVER RATIO


and the total assets of the company. This ratio is useful in measuringthe efficiency with which the total assets are being utilized in thebusiness.

Formula:-

Total assetsTurn-over

Ratio:-

Net Sales

Net Total Assets

Computation:-


Net sales 1162.33 1230.87 1344.33

Net total assets 665.36 610.04 622.12Ratio 1.226 times 2.01 times 2.16 times

Analysis:-

i. The total assets turn-over ratio of the company is increasing.ii. This shows that the efficiency of the company has improved and also

the efficiency of management has improved. So the company is ableto increase the return on total assets of the company.

iii.

This ratio also shows that the company is generating nearly 1 Rs. ofsales for every 1 Rs. of total assets of the company.

iv. This ratio is satisfactory but the company can still increase the amountof sales.


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NET WORTH TURN-OVER RATIO


and the total net worth of the company. This ratio is useful inmeasuring the efficiency with which the net worth of share holder isbeing utilized in the business.

Formula:-

Net WorthTurn-over

Ratio:-

Net Sales

Total Net Worth

Computation:-


Net sales 1162.33 1230.87 1344.33

Total net worth 470.37 574.89 651.72Ratio 2.489 times 2.14 times 2.06 times

Analysis:-

i. The net worth turn-over ratio of the company is stable.ii. This shows the efficiency of the company of employing net worth of

the share holders in the business is also stable but the company has totry to increase the efficiency of utilizing the net worth.


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DEBTORS TURN-OVER RATIO]

Concept:- This ratio suggests the number of times the amount ofcredit sales is collected during the year

Formula:-

Debtors Turn-

over Ratio:-

Net Sales

Debtors + Bills Receivables

Computation:-


Net sales 1162.33 1230.87 1344.33

Debtors + B/R 77.45 94.22 131.17Ratio 15.001 times 13.06 times 10.25 times

Analysis:-i. The debtors turn-over ratio of the company is fluctuating.

ii. The debtors turn-over ratio of the company is quit satisfactory. Thecompany can provide more credit to the customers so that sales can be

increased but the company has to keep in mind that this should not beresulted into the bad debt.


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AWARDS & ACHIEVEMENTS :

The company has got the following awards :

o The factory Rajashree polyfil, Bharuch has been conferredNATIONAL SAFETY AWARD FOR ACCIDENT FREE YEAR -

2005 from National Safety Council.

o

The company has got GUJARAT STATE SAFTY AWARD formaintaining lowest Disability Injury Index (DII) for fifth consecutiveyears in 2006.


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SOCIAL RESPONSIBILITIES :

The social responsibility contains social welfare of people. Society

plays a very important role in the development of the organization. So theorganization also has some responsibilities towards the development ofthe society which is known as Corporate Social Responsibility. Associety is the key consumer of the product as well as it provides withvarious resources which are very essential for the growth of the unit. Theorganization is responsible for the development of the society as well asto provide various goods and services at fair prices, creating employmentopportunity to the society. So that means there can not be the same set ofresponsibilities applicable to all countries in all times. These would be

determined in each case by the consumers, religions, traditions. andhabits of the society.

Century Enka Ltd has adopted the environment friendly technologyin current and new operations at all production units. They initiated themeasures for conservative use of water & energy. They celebrate theenvironment day in the presence of Gujarat Pollution Control Boardsofficials by tree plantation. They organize the HIV/AIDS awarenessprogram with the help of National Aids Research Institute at Pune plant.

They provide free health check up to the village children and also spacersthe Pulse Polio Program in near by areas of Bharuch plant.


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HUMAN RESOURCE ANALYSIS :

Human Resource plays a very important role in the development of

an organization. Human Resource can make or mar the growth of anorganization. The selection of the men power should be done in a mannerwhich is in accordance with the need of an organization.

The company firmly believes that success of any organizationlargely depends up on the availability of HUMAN CAPITAL within theorganization. In the rapidly changing business environment, globalcompetition and optimum use of human capital has become the core

subject of any business. In this company the capabilities of work men areassessed through interviews by various committees and some of them arerewarded for their loyal efforts. The company at bottom level focuses onincreasing productivity and multi skilling by continuing the process ofappreciating good work men through systematic assessment program.The company at middle level focuses on the enrichment of job profile,job rotation and enhancing capacities to undertake diversifiedassignments. The company at top level focuses on business opportunitiesto remain ahead both in competition & technology.

The company has recognized the importance of safety, healthyworking condition and clean environment. They provide extensivetraining to work men on communication during emergency. They have

also provided fire fighting training to 150 working persons at the factory.So we can say that the proper care of employees has been taking in theorganization.


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CONCLUSION

The company CENTURY ENKA was Established in year 1965. The

company is a joint venture of B.K. Birla group and Accordis group ofNetherland.

It produces Nylon & Polyester Filament Yarns, POY, JumboBeams, Speciality Yarns, Industrial or Fibre grade Chips, Industrial Yarns &Tyre Cord Fabrics.

CEL is having installed capacity of 1,10,000 tons/annum of NylonChips & Polyester Chips with 12,000 tons/annum of Industrial Filament orTyre Cord Fabric.

The Indian Textile Industry is now growing at a high pace and thegovernment is also taking initiatives for the development of textile industry.So the company can take the advantage of those initiatives and become oneof the major players of Indian Textile Industry.

CEL has good sales and profit. It became very beneficial to the textileindustry and also its shareholder. The financial project of Century Enka Ltd.is a good experience for me. It has broadened my financial knowledge ofdata analyses and ratios.


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BIBLIOGRAPHY :

Annual Reports of CENTURY ENKA LTD for the year 2009 -

10 & 2010-11. www.google.com

www.ask.com www.centuryenka.com

www.moneycontrol.com
http://www.google.com/http://www.google.com/http://www.ask.com/http://www.ask.com/http://www.centuryenka.com/http://www.centuryenka.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.centuryenka.com/http://www.ask.com/http://www.google.com/


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