Professional Documents
Culture Documents
By
Nikhil Paharia
Company Profile
Chandni Textiles Engineering Industries Ltd which was incorporated as a private limited company on
June 17, 1986 became a public limited company on March 06, 1992. Earlier known as Chandni
Engineering, it got its present name on November 30, 2005. The registered office is located at 108/109,
TV Industrial Estate, 52, S.K. Ahire Marg, Worli, 1st Floor, Mumbai-400030.
The company is engaged in the manufacture of yarn and fabrics. The company has its manufacturing
facilities at Daman in the Union Territory of Daman & Diu with installed capacities of 461,000 meters of
woven fabric and 405 MT chenille yarn. It has outsourced manufacturing of velvet fabrics.
The company has prepared Financial Statements complying with the Indian Accounting Standards as
per the Companies Act 2013.
Depreciation on property, plant and equipment other than freehold, is provided on ‘Straight Line
Method’ based on useful life as prescribed under Schedule II of the Companies Act 2013. Intangible
Assets are stated at cost less accumulated amortization and net of impairments, if any. Subsequent to
initial recognition, investment properties are stated at cost less accumulated depreciation and
impairment losses, if any. The Company, based on technical assessment made by management,
depreciates the building over estimated useful lives of 60 years.
In both years it can be seen that cash flow from operating activities is positive so it can use these
sources in investing and financing activity as well. The net cash flow from investing activity is negative
in both years. The cash flow from financing activity is positive in both years. The overall cash flow is
positive in both years and 2020-2021 has increased its overall cash flow by Rs 5138987.
Analysis of inventory valuation
In the company's annual report, it is mentioned clearly that Inventories of materials including stores
and spares and consumables, packing materials, components, work-in-progress, work-in-progress,
and finished goods are valued at a lower of cost and estimated net realizable value, whereas raw
material is valued at cost (first in first out basis) or realizable value whichever is lower. Cost in case of
work in progress is determined on the basis of the actual expenditure attributable to the said work
till the end of the reporting period. The inventories have been physically taken, valued, and certified
by the management. The difference if any in physical stock and books stock has been properly
accounted for in books of accounts.
During the year 2020-21, depreciation and amortization expense of the company has decreased from
Rs. 13403197/- to Rs. 80, 02, 803/- in year 2020-21.
From Cash flow statement it can be observed that there has been decrease in purchase of fixed
assets.
Depreciation are recorded only after completion and installation of the assets basically when
they are ready for use.
Amortization is based over the estimated useful life of assets and these lives are reviewed at the end
of every accounting period.
Analysis of Equity:
There was no issue of shares during both the years.
DIVIDEND: The Company ploughs back the profit to achieve higher growth in coming year; hence the
Board of Directors did not declare any dividend for the financial year 2020-21.
Analysis of Financing Liabilities Including Contingent Liabilities:
Amount of estimated outstanding capital commitment has increased in the year 2020-2021.
Investments properties consist of commercial offices not required presently for own use or
administrative purposes and which are leased to others to earn rentals and/or for capital appreciation.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and impairment
losses, if any.
Liquidity ratios is a key factor in assessing a company's basic financial health. Liquidity
is the amount of cash and easily-convertible-to-cash assets a company owns to
manage its short-term debt obligations. The two most common ratios used to
measure liquidity are the current ratio and the quick ratio.
Current Ratio is equal to current assets divided by current liabilities; this directly
measures the ability of the company to pay back short-term debts and payables with
its liquid assets.
We can analyse the current ratio is slightly more in 2020-21 and the higher the ratio
the better it is. As we have enough cash short -term liabilities.
Quick Ratio, also known as the Acid Test, is a conservative measure of liquidity. This is
because it excludes inventory from assets and also excludes the current part of long-
term debt from liabilities. Thus, it provides a more realistic or practical indication of a
company's ability to manage short-term obligations with cash and assets on hand.
We can observe that quick ratio was more in 2019-20 and it has more quick assets to
pay off the current liabilities.
2. Profitability ratio:
Operating Ratio:
Asset Turnover Ratio measures a company’s ability to generate sales from assets
Inventory Turnover Ratio measures how many times a company’s inventory is sold and replaced
over a given period
4. Solvency Ratio
Debt to Equity ratio (D/E) calculates the weight of total debt and financial liabilities against
shareholders’ equity.
Debt to Equity ratio = Total liabilities / Shareholder’s equity
Debt-to-equity of 0.3-0.6 is considered to be a good ratio. It can be observed that the ratio has
decreased over a year.