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WORKING CAPITAL MANAGEMENT KBD SUGARS&DISTILLERIES LTD

INTRODUCTION

Finance is the lifeblood of every business activity without which the wheels of modern

business organization system cannot be greased. Finance management is managerial activity,

which is concerned with planning and controlling of the firm's financial Resources. Finance is a

scarce resource and it has to be managed efficiency for the successful functioning of any

company. Several companies have come to grief mainly because of inefficient management of

finance, in spite of other favorable conditions

The term working capital is defined as the capital which is needed for day to day

operations in a business concern such as purchase of raw material, for meeting daily expenditure

on salaries, wages, rents, advertisements etc. Working capital management is concerned with a

problem that arises in attempting to manage the current assets, the current liabilities and inter-

relationship that exist between them.

Working capital is the amount of funds. Which business concerns to finance its day-to-

day operations it can be regards as that proportion of company’s total capital which is employed

in short term operation.Previously the business was confined to the national level only. Now

therefore sufficient working capital management is necessary to sustain sales activity.

Technically this refers to as the operating cycle.

DEFINITIONS

Financial management is the operation activity of a business that is responsible for

obtaining and effectively utilizing the funds necessary for efficient operations.

- Joseph and Massie

Financial Management is the application of the planning and control functions to the

finance function. - Archer

Financial management is an area of financial decision making, harmonizing individual

motives and goals. - Weston and Brigham

V.C.R INSTITUTE OF MANAGEMENT STUDIES




Scope of Finance Management

Firms create manufacturing capacities for production for goods; some provide services to

customers. They sell their goods or services to earn profits. They raise funds to acquire

manufacturing and other facilities. Thus, the three most important activities of a business firm

are:

Production

Marketing

Finance

A firm secures whatever capital it needs and employees it (finance activity) in activities that

generate returns on invested capital (production and marketing activities). A business firm thus

is an entity that engages in activities to perform the functions of finance, production and





marketing. The raising of capital funds and using them for generating returns to the supplies of

funds is called the finance function of the firm.

WORKING CAPITAL

INTRODUCTION TO WORKING CAPITAL:

Companies that manage their working capital will have relatively strong profit and there

share holders have been rewarded with capital appreciation despite an over all trend of declining share

prices. Others especially, commodity produces and companies whose procures and companies whose

products take cyclic demand have floundered.

Many a times, the main causes of the failure of business enterprise have been found to be

shortages of current assets and their mishandling. Inside amount working capital is a serious handicap in

business where as fixed capital investment generate products companies competent and administration of

current assets sales the problems of under utilization of capacitance.

A firm contains input to make a finished product, which is sold to make a profit. These

sales proceed are re-invested to make such products and generate for the profits. The problem is, there is

a lag between the time a finished product is ready and the time its sales, proceeds are realized. If a

company waited till there products come ii, its plant and machinery would lie this time lag, every

business activity make funds. This is its working capital, the rational for the superior valuation. Since

there is its working capital, the rational for the superior valuation. Since there is a cost associated with

working capital, a company that can generate more revenues form a special amount, working capital than

other, will eventually be more profitable, better cash flows.





DEFINTION:

“The sum of the current assets is the working capital of a business”.

- MILL

“Any acquisition of funds which increase the current assets, increased working capital, for there

are one and the same”.

- BONNEVILLE & DEWEY

“Working capital has ordinarily been defined as the excess of current assets over current

liabilities”.

- C.W.GERSTEN BERG

“The interaction between current assets and current liabilities is, there fore the main theme of the

theory if working management”





WORKING CAPITAL CYCLE

The working capital cycle can be defined as :

The period of time which elapses between the point at which cash begins to be expended on the

production of a product and the collection of cash from a customer.

The diagram below illustrates the working capital for a manufacturing firm. The upper portion of

the diagram above shows in a simplified from the chain of events in a manufacturing firm. Each of boxes

in the upper part of the diagram can be seen as a tank through which funds flow. These tanks, which are

concerned with day-to-day activities, have funds constantly following into and out of them.

The chain starts with the firm buying raw materials on credit. In due course this stock will be

used in production, work will be carried out on the stock, and it will become part of the firms work-in-

progress(WIP).

Work will continue on the WIP until eventually emerges as the finished product. As production

progress, labour costs and overheads will need to be met of course at some stage trade creditors will need

to be paid. When the finished goods are sold on credit, debtors are increased. They will eventually pay, so

that cash will be injected into the firm.

• The business will have to make payments to government for taxation.

• Fixed assets will be purchased and sold.





• Lesser of fixed assets will be paid their rent

• Share holders (existing of new) may provide new funds in the form of cash

•

Some shares may be redeemed for cash

• Dividends may be paid

WORKING CAPITAL

One of the most important areas in the day-to-day management of the firm is the management of

working capital. Working capital management is the functional area of finance that covers all the current

accounts of the firm. It is concerned with the management of the level of individual current assets as well

as the management of total working capital. Procurement of funds is firstly concerned for financing

working capital requirement of the firm and secondly for financing working capital requirement of the

firm and secondly for financing fixed assets.

MEANING AND CONCEPT OF WORKING CAPITAL

Working capital refers to the funds invested in current assets, i.e., investment in stocks, sundry

debtor’s cash and other current assets. Current assets are essential to use fixed assets profitably. For

example, a machine cannot be used without raw material. The investment on the purchase of raw material

is identified as working capital. It is obvious that a certain amounts of funds is always tied up in raw-

material inventories, work-in-progress, finished goods, consumable stores, sundry debtors and day to day

cash requirements. However, the businessman also enjoys credit facilities from his supply raw material

on credit. Similarly, a businessman not pays immediately for various expenses. For instance, the laborers

are paid only periodically. Therefore, a certain amount of funds is automatically available to finance the

current assets requirements. However, the requirements for current assets are usually greater than the





amount of funds payable through current liabilities. In other words the current assets are to be kept at a

higher level than the current liabilities.

Working capital = Current assets – Current Liabilities

CONCEPT OF WORKING CAPITAL

1. From the point of view of concept the term working capital can be used in two different ways:

Gross Working Capital:

The gross working capital refers to investment in all the current assets taken together. The total of

investments in all current assets is known as “Gross working Capital”.

Net working Capital:

The term net working capital refers to excess of total current liabilities. It may be noted that the

current liabilities refers to these liabilities which are payable within a period after 1 year.

2. From the point of view of time, the term working capital can be divided into two categories:

Permanent working capital:

It also refers to the hardcore working capital. It is that minimum level of investment in the

current assets that is carried by the business at all times to carry our minimum level of its activities.

Temporary Working Capital:





It refers to that part of total working capital which is required by a business over and above

permanent working capital. It is also called variable working capital.

INDUSTRY PROFILE

Sugarcane is one of the important crop for the INDIAN FARMER. Sugar & jigger are the

main products that we get from sugarcane other products baggase for industrial use molasses for

distillery, filter cake, mudas an organic manure & green leaves with tops for cattle feed are also

available as by products, because of its multi uses sugarcane has played crucial feed role in

Indian economy with Rs.20,000 Cores TURNOVER & WITH 450 SUGAR MILLS

PROVIDING assistance to 45 million sugarcane farmer and 2 million workmen directly and

indirectly.

In AP sugar industry is an important agro based industry occupying the SECOND

position next to textile industry. The annual cultivated area is about 1.99 LAKHS hectares with a

yield of 149.45 LAKHS of tones during 1996-1997. At present there are 36 sugar factories in the

state and 50% of them are in co-operative sector. Actually the work sugar derived from a

Sanskrit word “SHAKRA”.

Sugar Industry in India is well developed with a consumer base of more than billions of

people. It is also the second largest producer of sugar in the world. There are around 45 million

of sugar cane growers in India and a larger portion of rural labourers in the country largely rely

upon this industry. Sugar Industry is one of the agricultural based industry. In India it is the

second largest agricultural industry after textile industry





History

The discovery of sugarcane, from which sugar as it is known today, is derived, dates back

unknown thousands of years. It is thought to have originated in New Guinea, and was spreadalong routes to Southeast Asia and India. The process known for creating sugar, by pressing out

the juice and then boiling it into crystals, was developed in India around 500 BC.

Its cultivation was not introduced into Europe until the middle-ages, when it was brought

to Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to

thrive in a most favorable climate. It was not until the eighteenth century that sugarcane

cultivation was began in the United States, where it was planted in the southern climate of New

Orleans. The very first refinery was built in New York City around 1690; the industry was

established by the 1830s. Earlier attempts to create a successful industry in the U.S. did not fare

well; from the late 1830s, when the first factory was built. Until 1872, sugar factories closed

down almost as quickly as they had opened. It was 1872 before a factory, built in California, was

finally able to successfully produce sugar in a profitable manner. At the end of that century, more

than thirty factories were in operation in the U.S.

The history of sugar industry in India begins in 1903 when a sugar factory was set up in

Bihar and U.P each. In 1932 there were 32 factories operating in the country. In India, the

cultivation of sugarcane is 10,000 miles tones. The average yield being 56 tones per acre of total

cultivating land is occupied by sugarcane cultivation. Sugarcane is grown in almost all part of

India, except in colder regions and extreme North Jammu& Kashmir, Himachal Pradesh. The

industry has developed at a fast rate in Maharashtra, Andhra Pradesh, Karnataka and Tamil

Nadu. In India U.P leads other States in Sugarcane production, followed by T.N and

Maharashtra.

Sugar comes under the Essential Commodities Act. Ipso facto, there has been control on

all facets of the sugar trade. The licensing regime that regulates the installed capacity, the

minimum support price for cane, the reservation of can area for mills and the control over price

and movement of sugar as well its byproduct molasses, have all triggered a situation totally out

of sync with market realities.





The Central Government will allot monthly sales sugar quota for each factory based on

the stock available in the concerned factory Go down. The Central Government removed the

controls imposed under the Essential Commodities Act, 1955 on stocking and movement and

requiring licensing of dealers in respect of specified commodities with effect from 14 th March,

2002 vide

Government of India’s Notification No. GSR 104(E), dated 15 th February, 2002. With

the coming into effect of the above order any dealer may freely by, stock, sell, transport,

distribute, dispose, acquire, use or consume any quantity of wheat, paddy/rice, coarse grains,

sugar, edible oil seeds and edible oil and shall not require a permit or license therefore under any

order issued under the Essential Commodities Act, 1955.

Area wise distribution of sugar industry in A.P.

The list of Co-operative Sugar factories in A.P.

1. The co-operative K.B.D Sugars & Distilleries ltd..

2. The Chodavaram Co-operative sugars ltd, Chodavaram.

3. The Anakapalle Co-operative sugars ltd, Anakapalle.

4. The Etikuppaka Co-operative agricultural of industrial society ltd, Ethikuppaka.

5. Sir Vijayarama Gajapathi Co-operative sugars ltd.

6. The Amadavalasa Co-operative agricultural industrial society ltd, Srikakulam.

7. The West Godavari Co-operative sugars ltd, Eluru.

8. Palakollu Co-operative agricultural & industrial society ltd, Palakollu.

9. The Thandara Co-operative sugars ltd, Visakapatnam.

10.Nizamabad Co-operative sugars ltd, Nizamabad.

11. Sir Venkateswara Cooperative sugars ltd, Renigunta.

12. The Cuddapah Co-operative sugars ltd, Chennur.





13. The Nandyal Co-operative sugars ltd, Ponnapuram.

14. The Kovur Co-operative sugars ltd, Nellore.

15. Nagarjuna Co-operative sugars mills ltd, Gurzala.

16. Nampaneni Venkata Rao Co-operative sugars ltd, Hanuman Junction.

17. Sri Hanuman Co-operative sugars ltd, Hanuman Junction.

Sugar production in states

The following table shows level of sugar production (in lakh tonnes) in India states

State 2006-07 2007-08 2008-09

Uttar Pradesh 56.74 40.08 60.32

Maharashtra 60.64 31.99 42.29

Karnataka 13.68 10.57 15

Tamilnadu 19.04 11.9 9.84

Andhra Pradesh 11.88 8.81 9.75Gujarat 10.28 10.77 8.32

Haryana 5.99 5.86 4.03

Uttaranchal 4.59 3.93 3.82

Punjab 5.11 3.88 3.87

Bihar 4.51 2.27 2.75

Madhya Pradesh 0.85 0.94 1.85

Other 1.91 5.09 6.58

The sugar production in the states largely depends upon monsoon .from 1998-03 good monsoonresulted a larger production of sugar in the country





COMPANY PROFILE

KARNATAKA BREAWARIES DISTILLERIES SUGARS

The irrigation in Chittoor district mostly depends on open wells. Recharge of water in the

wells depends in ground water level and rainfall. However, rainfall depends in monsoon which is

uncertain. The soils in district are almost suitable for sugarcane cultivation. The formers also

having good knowledge of growing Sugarcane. In good olden days, total quantity if sugarcane

produce in the district was converted as jaggery by gangues (Bullock Crushers) and power

crushers. The jaggery making was very difficult to the small farmers due to lack of crusher and

unfavorable prices. The big farmers also faced difficulty to crush the cane for long period.

The jaggery made in the district was brought to the Chittoor and Pakala which are

market places with railway transportation. There was list of exploitation of farmers by the

jaggery mundi owners by advancing the money with high interest rates, commission and also not

properly weighment. The price fluctuation created by the traders was also a reason for poor

realization, but there was no other choice to the farmers.

NAME :KBD SUGARS AND DISTILLERIES LTD,

Location and Address : MUDIPAPANAPALLI, (village)

SUGALIMITTA POST,





PUNGANUR MANDAL – 517247,

CHITTOOR DIST., A.P.

BRIEF HISTORY ABOUT THE COMPANY:

The company was originally incorporated on 16 th day of October, 1984 under the of

SREE TELUGU SUGARS LIMITED. Subsequently the name of the company was changed to

SREE VANI SUGARS AND INDUSTRIES LIMITED on the 5th day of April, 1990. Again

subsequently the name of the company was changed to KARNATAKA BREAWARIES

DISTILLERS SUGARS LIMITED on the 1st March, 2005.

The company was initially promoted by Sri. T. Suryachandra Rao, Managing Director and

Sri S. Gokul, Executive Director commences its commercial production from 01st July, 1992.

In the initially years if performance of the company was much below the break event

levels. Due to poor performance, the company accumulated substantial cash loses and also

defaulted in meeting the terms load comities to

AIFIs.In these circumstances, the promoters have inducted Sri D. K. Audhikesavulu as a

co-promoter in order to facilitate the company to meet.

The cost overrun of the project and also provide for the short fall in the margins for

working capital. Sri S. Gokul has since come out the board and left the company.





MAIN OBJECTS OF THE COMPANY

To carry in the business as manufacturers, produces, processors, sellers, distributors,

stock lists and traders of sugars and its derivatives, molasses biases and all materials and

substances arising as products and wastes products out of and in the course of

manufacture of sugar.

To carry in the business as manufacturers, producers, brewers, blenders, dealer’s

distillers, stock lists and traders of rectified spirit, ethyl alcohol, gasohol, acetic acid,

acetones anhydride, vinyl acetate polymers, plastics, polyvinyl chloride, liquors and all

products made there from.

To carry on the business as manufacturers, producers, packers, dealers, stock lists and

traders of furfural, bulk drugs, pharmaceutical and medical preparations, made out of by-

products of sugar or their derivatives.

To carry in the business as manufacturers, dealers, distributors, stock lists and traders of

biogases pulp, paper pulp and pulp made out agricultural residues or other fibrous

materials, paper, newsprints, paperboards, millboards, starboards, cites paper of kinds,

paper bags, febrile boxes, cartons, corrugate containers, wrapping and packing materials.

To carry on the business as planters, growers, cultivators, farmers and producers of

sugarcane, sugar beet.

To generate electrical power by conventional, non-conventional methods, including coal,

gas lignite, naphtha oil, bio-mass, bio-gases, waste thermal solar, hydel, geo-hydel, mino

tidal waves any to promote, own acquire erect, construct, establish, maintain, improve





manage, operate, alter carry on, control. Take in hire / lease, power plants, cogeneration

plants, energy conversion projects power houses, transmissions and distribution system

for generation, transmission and supply of electrical energy to the state electricity board,

state govt., appropriate authorities, agricultural, household industrial, commercial, and

any other consumer for industrial purpose in Indian and else where specified by the state /

central govt. local authority in state electricity board and any other competent authorities

by entering into necessary agreements.

PRESENT BOARD OF DIRECTORS

In this company at present there is Chairman, Managing Director and Six

Directors.


NAME DESIGNATION

SRI D.K AUDIKESAVULU CHAIRMAN AND MANAGING

DIRECTOR

SRI K.M SRINIVASULU DIRECTOR

SRI T.J. INDRA PRAKASH VICE PRESIDENT




PRODUCTION PROCESS

While plantations, sugar manufacturing from Sugarcane is a continuous process

involving several stages viz. Clarification, Concentration, Crystallization and Oaring.

In order to extract juice from cane, the practice is to crush the cane in a random of a 3-

rller miller. In order to extract as mush juices possible, water is adder to the crushed mass, which

further dilutes whatever left over juice. This extracted juice is termed as “mixed juice”. Will be

in both diluted and undiluted form. This mixed juice is weighted in a weighing scale and sent for

processing.

The weighted mixed juice is heated in ‘juice Heaters’ in 2 stages. In the first stage and

heating the juice is heated from about 35c -70c. This heated juice is mixed with milk of lime and

sulphr-di-oxide, in a vessel, which are called ‘clarifying agents’.In the second stage of heating

which is heated from about70c-103c.

These clarifying agenys combined with various impurities to from ‘precipitation’ and the

precipitation is allowed to settle down leaving ‘clear juice’. The juice retention time is about 3

hours. The clear juice is further boiled in a set of vessels known as ‘evaporators’.

This concentrated juices now called Syrup which contains 60% solids, by weight. It

contains several coloring matters, which have to be eliminated neutralized before the final stage

of ‘concentration’. For this process the syrup is ‘sulfated’ again with SO2 gas. This clarifications





process is known as ‘double sulphitation’. This surface syrup of sent to ‘pan floor’ where the

final stages of boiling of the first stage where syrup other high purity materials are boiled to

build up what is called as ‘Massecuite’ i.e., mixture of sugar crystals and molasses. Massecuite is

subjected to cooling in crystallizes from where it is taken for ‘centrifuging’ i.e., method used to

separate sugar crystals are nothing but pure ‘source’ and the dried graded and bagged. The

molasses obtained are taken back for the subsequent stages of boiling.

In the second stage the Mesecuite (that is centrifuged) is cured again continuous in centrifugal

machines which leads to sugar.

In the third stage Massecuite is built-up with low purity materials and boiled heavily and

then this Messecuite is cooled much longer when compared to the other 2 Messecuite in order toallow maximum exhaustion of source content.

The sugar obtained is mixed with water and ‘Mango’ is prepared. The molasses obtained

in final molasses – from which no further exhaustion of sugar is possible – is out for storage.

SALES

The government of India, commission of Andhra Pradesh, controls sales of KBD sugars

and Distilleries Limited. So there is no as such projected sales target.

MANPOWER

The KBD Sugars unit has workers strength of 450 and staff of about 90. The unit also has

few Hosing colonies accommodating few of his his workers.

POLLUTION CONTROL

The company has installed the required equipment to prevent water and air pollution

control air pollution as per the standards laid down by the AP pollution Control Board.

Necessary steps have also bee taken such as plantation of trees, saplings and seeding in and

around factory area and in the colony, to protect the environment ecology.





FINANCE

Availability of finances that is the cash and bank credit effects the working capital

requirements of KBD sugars & distilleries Ltd. to considerable extent.

RESEARCH AND DEVELOPMENT

The company has beep attempting cultivation of various varieties of sugarcane in the

notified area to identify the variety, which is more suitable to the existing agro-climatic

conditions, Continuous efforts. Are also being made in this direction to grow sugarcane

variety which gives higher sugarcane yield and higher recovery in the notified area.

DEPARTMENTATION

1. Warehouse – in this departments the field product is brought and prepared for

dispatch

2. Engineering department – in this department spare part is made and old parts

are repaired.

3. Caning department - in this departments account is maintained for the amountof raw material brought in by the farmers to the factory premises.

4. Research and development department - the functions of this department are

inspection and testing. It ensures quality from input finished product.

5. Planning department - Planning department is linked with marketing and

technical department. This department plans all the specifications, finalize the

rates and prepare purchase orders as and when required.

6. Marketing department – this department is the backbone of the entire

company, it looks after the marketing aspects of the company.

7. Accounts and finance department – this department looks after the company’s

financial aspects and makes the wages and salaries of staff and workers.





8. Human resources development - this department is responsible for formulation,

implementing, monitoring and reviewing periodically the personal and HRD policies and practices considered conductive to the overall development of the employees as well as the

organization.





ORGANIZATION STRUCTURE


Chairman

Board of directors

Executive directors

VP

Finance

VP

Personal

VP

Marketing

Staff Staff Staff Staff

Managing directors

VP

Production




OBJECTIVES OF THE STUDY

The following are the objectives of the present study.

Primary Objective:

To ascertain the efficiency of accounts receivable and accounts payables of K B D

Sugars & Distilleries Limited.

To analyze the working capital position of K B D Sugar & Distilleries industries

limited.

Secondary Objective:

To offer suggestions regarding working capital of the concern.

To study the financial position of the company

The sources of working capital may be said to fall in four categories

Trade credit

Bank credit

Current provision of non-bank short term borrowings

Long terms sources comparing equity capital and long-term borrowing





SCOPE OF THE STUDY

Financial management is that the managerial activity is concerned with the planning and

controlling of the firm’s financial resource. The subject of financial is of immense interest to

both academician and practicing managements. It is of great interest of academicians because the

subject is still developing and there are still certain areas where controlling exists for which no

unanimous solutions have been researches as yet.

The present study aims at the following:

Highlighting the necessity of current assets and current liabilities.

Explain the principles of current assets, investment and financing.

Focus on the proper mix of short term financing for current assets.

Emphasis the need and goal of establishing a sound credit policy.

Suggest the need of monitoring receivables.

Highlights the need for holding cash.

Discuss the techniques of preparing cash budget.

Focus on the management of cash collecting and disbursement.

Highlight the need for holding cash.





IMPORTANCE OF THE STUDY

Investment is fixed assets only is not sufficient to run the business. Therefore working capital or

investment in current assets is a must for the purchase of raw materials and for meeting the day-

to-day expenditure on salaries, wages, rents etc. The main advantages of adequate working

capital are as follows:

If proper cash balance is maintained a Company can avail the advantage of cash

discounts by paying cash for the purchase of raw materials in the discount period, which

results in reducing the cost of production.

Adequate working capital creates a sense of security, confidence and loyalty not only

throughout the business itself but also its customers, creditors and business associates.

A firm ca raise funds from the market, purchase of goods on credit and borrow short –

term funds from banks etc. If investors and borrowers are confident that they will get

their due interest and payment of principle in time.

Certain contingencies like financial crises due to heavy losses; business oscillation etc.

can be easily overcome, if the company maintains adequate working capital.

A continuous supply of raw material, research programs, innovation and technical

developments and expansion programs can successfully be carried out if working capital

is maintained in the business. It will increase the production efficiency, which in turn

increase the efficiency and morale of the employees, lower the cost and create image in

the community.





LIMITATIONS OF THE STUDY

An extensive analysis was not possible in short span of time.

The information is collected only from the secondary data.

Analysis is based on the historical data’s available and doesn’t guarantee future

performance.

I have been selected for the study of the project.

The project duration is Limited period i.e. 2 months only.

The data collected has been limited only 6 years financial Annual Reports.

The information used is primarily from historical annual reports that are available to the

public.

The financial statements relating to 5 accounting years are taken up for the study. But

detailed analysis could not be carried for the project work because of the limited time

span.

The interpretation from the analysis of financial statements is based on quantitative

information only. Qualitative factors are not considered for the analysis.





RESEARCH METHODOLOGY

Source of Data

The data required for this project is collected from the following sources for the period

between 2004-05 to 2008-09.

Primary Data

Information collected from internal guide and finance manager.

The primary data was collected mainly with the interactions and discussions with

the company's Executives.

Secondary Data

Most of the calculations are made on the financial statement of the company and

the company provided financial statements for 5 years.

Some of the information recording to the theoretical aspects were collected by

referring standards texts and through internet.

1.Referring standards texts,

2.reference books

3.and Internet collected some of the information regarding to the theoretical aspects.





REVIEW OF LITERATURE

AN INTRODUCTION TO WORKING CAPITAL MANAGEMENT INTRODUCTION

Capital required for a business can be classified as following.

Fixed capital

Working capital

Long term funds are required to create production facilities though purchase of

fixed assets such as plants and machinery, land, building, furniture etc. investing

in these assets represent that part of firms capital, which is blotched on a

permanent or fixed capital

Fund needed for short term purpose for a purchase of raw material, payment of

wages and other day-to-day expenses etc.

these funds are known as working capital, simple working capital refers to that

part of the firms capital which is required for financing short-term or current

assets such as cash, marketable securities, debtors and inventories.

Working capital is also known as revaluing or circulating capital or short – term

capital.According to subbing, “working capital is the amount of funds necessary

to cover the cost of operating the enterprise”.One of the important aspects of

company’s financial management is the management of working capital.





Working capital management refers to the management of current assets, namely

cash, marketable securities, stock, i.e., inventories and debtors and current

liabilities like bills payable, sundry creditors, bank over draft, outstanding

expenses, etc., although the management of current assets is similar to that of

fixed assets. Yet it differs to some extent from the management of fixed assets in

three important ways.

First, in managing fixed assets time is very important, consequently, discounting

and compounding aspects of time element play a significant role in capital.

The level of fixed assets cannot be adjusted in the short-term although the level of

both current and fixed assets depending upon the production and sales and it is

possible to

adjust the level of current assets depending upon the current level of activity of

the firm.Second larger holding of current assets especially strengthen budgeting

and a minor one in the management of current assets.firm’s liquidity position and

reduces briskness it also reduces the overall profitability in firm of idle investment

in current assets no doubt increase the profitability but at the some reduces the

liquidity which may results in financial embarrassment. Stock out cost of pocket

expenses defending the suit.

Third the level of fixed as well as current depends upon expected sales, but it is

only current assets, which can be adjusted with sales fluctuation in short run.

There is an unavoidable need to manage working capital efficiently. Hence it

forms an important function of finance manager, working capital management.





Requirement much of the finance managers time.

Represent a sizable proportion of company’s total investment in assets.

Determine at a glance, the liquidity and solvency position of the company to

outside creditors.

CLASSIFICATION OR KINDS OF WORKING CAPITAL

On the basis concept On the basis of time

Gross working capital Networking capital Permanent or

or fixed working

Temporary


Kinds of working capital




or

Fluctuating

or

Variable working capital

On the basis of Concept

Gross working capital

In border sense the term working capital refers to the gross working capital and represents the

amount of funds in current assets. Thus gross working capital is the capital invested in total

current assets of the enterprise.

Thus GWC = Total of current assets.

NET WORKING CAPITAL

In narrow sense, the term working capital refers to the net working capital. Net working capital is

the excess of current assets over current liabilities.

Thus NWC = Current assets - Current liabilities.

To conclude it may be said that both gross and net concept of working capital may be

suitable only for proprietary from of organizations such as sold – trade or partnership firms. But

gross concept is suitable to the company from of organization where there is a divorce between

ownership, management and control.





On the basis of time

Permanent or Fixed working capital

Permanent or fixed working capital is the minimum amount which is required to ensured

effective utilization of fixed facilities and for maintaining the circulation of current assets for

example a firm as to maintain a minimum level of raw materials, work– in-process, finished

goods and cash balances, this can further classified in to

• Regular working capital

• Reserve working capital

Regular fixed working capital required to ensure circulation of current assets from cash toinventories to receivables and from receivables to cash and so on.

Reserve fixed working capital is the excess amount over the requirement for regular working

capital, which may be provided for contingencies that may arise at unstated periods such as

strikes, rise in prices, depression etc.

Amount of

Working capital Temporary

Fixed

Time

Fig 1: Permanent working capital is stable or fixed over time. While temporary of variable

working capital fluctuates.

Temporary or Variable working capital





Temporary working capital is the amount working capital, which is required to meet the seasonal

demand and some special exigencies, this can classified as

Seasonal working capital

Special working capital

The capital required to meet to seasonal needs of the enterprise is called seasonal working

capital.

Seasonal working capital is that part of working capital which is required to meet specialexigencies such as launching of extensive marketing campaigns foe conducting research etc.

Amount of

Working capital Temporary

Fixed

Time

Fig: 2

FIG 2: Temporary working capital is also increasing with passage of time due to expansion of

business but even it doesn’t fluctuate as variable working capital with some time increases and

some time increases & decreases

Objectives of working capital





The need of working capital cannot be over emphasized. Every business needs some amount of

working capital arises due to the time gap between production and realizations of cash from

sales. Following are some of the objects

For the purpose of raw materials, components, spares etc.

To pay wages and salaries.

To incur day-to-day expenses and over head costs such as fuel, power and office

expenses etc.

To meet the selling costs as packing, advertisement etc.

To maintain the inventories of raw materials, works-in-progress, stores and finished

stocks.

The amount needed as well in a new concern depends primarily upon its size and the ambitions

of its promoters, greater the size of the business unto, generally larger will be the requirements of

working capital the amount of working capital goes on increasing with the growth and expansion

of business still it attains maturity.

Issues in working capital management

Working capital management refers to the administration of all aspects of current assets,

namely cash, marketable securities, debtors and stock and current liabilities. The financial

manager must determine levels and composition of current assets. He must see the right sources

aspects of working capital are

The working capital management require much of the financial managers time.

Investment working capital represents a log portion of the total investment in assets.

Critically working capital represents a large portion of the total investment in assets.

Growth the need for working capital is directly related to the firm’s growth.

Financial manager have to spend much of their time to the daily internal operations,

relating to current assets and current liabilities of the firm. As the larger portion of financial

manager’s time is





devoted to working capital problems, it is necessary to manage working capital in the

best possible way to get the maximum benefits.

Investment in current assets represents a very significant potion of total of the investment

in assets. So financial manager should pay special attention to the management of current assets

on a continuing basis. Action should be taken to curtail unnecessary investment in current assets.

Working capital management is critical for all firm’s, but particularly for small firms.

Further, the role of current liabilities and current assets is for more significant incase of small

firms, as unlike for large firm, they face difficulties in rising ling-term finances.

There is direct relationship between a firm’s growth and its working capital need. The

financial manager should be aware such needs and finance them quickly. Continuous growth in

sales may require additional investment in fixed assets.

Determinants of working capital

It may thus be concluded that all precautions should taken fir effective andefficient management of working capital.A large number of factors, each having a different

importance, influence working capital needs of firms. Also, the importance of factors changes for

a firm over time. Therefore, an analysis of relevant should be made in order to determine total

investment in working capital. The following are the factors which generally influence the

working capital requirements of the firm.

Nature and size of business

Manufacturing cycle

Business fluctuation

Production policy

Availability of credit

Growth and expansion activities





Profit margin and profit appropriation

Operating efficiency

Price level changes

Sources of working capital

The sources of working capital may be said to fall in four categories

Trade credit

Bank credit

Current provision of non-bank short term borrowings

Long terms sources comparing equity capital and long-term borrowing

They can also be classified as follows.

1. Internal Sources

a) Retained earnings

b) Depreciation

2. External Sources

a) Share

b) Loans

c) Trade creditors

d) Debenture

e) Deposits from public

Need for working capital

The need for working capital to run day-to-day activities cannot be over

emphasized. Firm should aim at maximizing the wealth of its share holders.





components. The firm holds stock of finished goods to meet the demands of customers on

continuous basis and sudden demand from some customer.

The length of the operating cycle of manufacturing firm is the sum of

1) Inventory conversion period (ICP)

2) Debtors conversion period (DCP)

Inventory conversion period is the total time needed for producing and selling the

product. The debtors conversion period is the time required to collect the outstanding amount

from the customer. The total of ICP and DCP is referred to as the gross operating cycle (GOC).

i.e. GOC = ICP + DCP

A firm acquired resources on credit and all temporary postpones payment of the creation

expenses. The “payable deferral period” (PDP) is the length of time the firm is able to defer

payment on various resources purchased. The differences between GROSS OPERATING

CYCLE and PAYABLE

DEFERALE PERIOD IS NET WORKING CAPITAL.

GOC – PDP = NWC

In other words it refers to the sales after the conversion of cash into raw material, raw

material into work-in-progress, work-in-progress into finished goods, finished goods into

receivable and finally from receivable into cash. This may be diagrammatically explained as in

the figure given below.

The operating cycle can be measured as follows:

RMCP – Raw material conversion period

WIPCP – work-in-progress conversion period

FGP – Finished goods conversion period

SDCP – Sundry debtors conversion period

SCCP – Sundry creditors conversion period





Operating cycle = RMCP + WIPCP + FGCP + SDCP – SCPP

Material conversion period (RMCP) =

Work-in-progress conversion period (WIPCP) =

Finished goods conversion period (FGCP ) =


Purchases Payment Credit Sale Collection

RMCP+WIPCP+FGCP

Inventory Conversion Period Receivable ConversionPeriod

Payables Net OperatingCycle

Gross Operating Cycle

Raw material inventory *

360

Raw material conversion

Work-in-progress inventory *

360

Cost of products

Finished goods inventory *

360

Cost of goods soled

Debtors * 360

Credit sales at

cost




Debtors conversion period (DCP) =

Payable deferral period (PDP) =

OPERATING CYCLE

OPERATING CYCLE = RMCP + WIPCP + FGCP + SDCP – SCPP

RMCP – Raw material conversion period

WIPCP – work-in-progress conversion period

FGP – Finished goods conversion period

SDCP – Sundry debtors conversion period

SCCP – Sundry creditors conversion period

WORKING CAPITAL CYCLE/OPERATING CYCLE


cash

Creditors *

360

Credit

purchases




Analysis of working capital

Overall review

The goal of working capital of management is to manage firms of current assets and current

liabilities in such a way that a satisfactory level of working capital is maintained. This is so

because if the firm cannot maintain a satisfactory level it will be forced into bankruptcy. The

current assets should be large enough to cover its current liabilities in order to ensure a


Raw materialsDebtors &Receivables

Finished goods Work-in

progress




reasonable margin of safety. Each of current assets must manages efficiently in order to maintain

the illiquidity of the firm, whiled not keeping too high level of any one of them. The interaction

between assets and current liabilities is, therefore the main theme of working managements.

Accessing working capital requirement

Working capital management is the life blood and controlling never center of a business. No

business can successfully run without an adequate amount of working capital. To avoid the

storage of working capital at a once, an estimate of working capital requirements should be made

in advance so that arrangements can be made procure adequate working capital but estimation of

working capital requirements is not an easy and large factors how to be have to be taken into

consideration while an estimate of working capital requirements:-

Total cost incurred on material wage overheads.

The length of time for which raw material is to remain in stores before they are issued

for production.

The length of production cycle of work-in-progress is the time taken for conversion for

production.

The length of sale cycle during which finished goods is too kept waiting for sales.

The average period of credit allowed customers.

The amount of cash required to pay day-to-day expense of the business.

The average of each cash required making advance payment, if any

The average credit period expected to be allowed by suppliers.





Time lag in the payment of wages and other expenses.

From the total amount blocked in current assets estimated on the basic of the first even

item given above the total of current liabilities that is the last two items is deducted to find out

the requirement of working capital in order to provide for contingencies, some extra amount

generally calculated as a fixed percentage of working capital can be aided as margin of study.

Operational definitions of the concepts

A. WORKING CAPITAL: working capital may be regarded as that proportion of a

firm’s total capital, which is employed in financing its day-to-day operations. It is

the amount of funds, which affirm holds, in the form of current assents to meet its

current liabilities.

B. NET WORKING CAPITAL (NWC): net working capital is the difference between

current assets and current liabilities.

C. GROSS WORKING CAPITAL (GWC): gross working capital refers to the

firm’s total investment in current assets.

D. CURRENT ASSETS: current assets are those assets which can be converted in to

diminution in value of or disrupting operational cycle. They include cash, short-

term securities debtors, bill receivable and stock (inventory).

E. CURRENT LIABILITIES: current liabilities are those claims of outsides that are

expected to mature for payment within an accounting year they include creditors,

bills payable and out standing expenses that are the short-term sources.

F. CASH: cash is the money the firm can disburse immediately without any

restriction. It includes coins, currency, cheque held by the firm and balance in bank





accounts. Some times mare cash items such as marketable securities or bank time

deposits are also included in cash. The basic characteristics of near cash assets are

that they readily convertible into cash.

G. RECEIVABLES: A firm may grant credit to project its sales from the competitors

and to attract potential customers to buy its products at favorable terms. When the

firm sells its products services on trade credit, it creates receivable which the firm is

expects to collect in near future.

H. INVENTORIES: Inventory refers to stock of goods or products of the company. It

may be in the form of raw material, work-in-progress and finished goods.

DATA ANALYSIS & INTERPRETATION

STATEMENT OF CHANGES IN WORKING CAPITAL 2006-2007






PARTICALERS As on 31-3-2006

As on 31-3-2007

Increase incapital

Decrease incapital

CURRENT

ASSETS:

INVENTORIES

SUNDRY DETORS

CASH &BANK

BALANCE

LOAN &

ADVANCE

175447569

8068939

2214356

74538394

303238111

8256619

2907579

89584621

12779542

187680

693223

15045227

TOTAL 260268258 403986930 - -

CURRENT

LIABILITIES:

LIABILITIES

113584355 362236043 - 248651688

TOTAL 113584355 362236043 - 104935016

WORKINGCAPITAL

146684903 41750887 - -

DECREASE IN

WORKING

CAPITAL

104934016 104934016

TOTAL 146684903 146684903 143716672 143716672




LIABILITIES 362236043 467143647 - 104907604

TOTAL 362236043 467143647 - -

WORKING CAPITAL 41750887 72981812 - -

INCREASE IN

WORKING

CAPITAL

31230935 - - 31230935

TOTAL 72981822 72981822 136138538 136138538

Source: completed from annual reports of KBD sugars LTD

Interpretation:

The working capital decreased from 31230935 by comparing 2007 and 2008. In this year the

company has fairly a good level of net working capital providing the extremely good liquidity

position of the firm.






Interpretation:

The working capital decreased from 12777690 by comparing 2008 and 2009. In this year the




PARTICALERS

AS ON

31-3-2008

AS O N

31-3-2009

Increase in

capital

Decrease in

capital

CURRENTASSETS:

INVENTORIES

SUNDRY

DETORS

CASH &BANK

BALANCE

LOAN &ADVANCE

375676892

8416762

5067311

150964503

156306246

7348982

8755709

145766518

-

-

3688398

-

219370646

1067780

-

5197985

TOTAL 540125469 318177455

CURRENT

LIABILITIES:

LIABILITIES 467143647 257973323 209170324

TOTAL 467143647 257973323

WORKING

CAPITAL

72981821 60204132

DECREASE IN

WORKING

CAPITAL

- 12777690 12777690

TOTAL 72981821 72981822 225636411 225636411





Particulars 31-3-2009 31-3-2010

Increase

in capital

Decrease in

capital

Assets

Current Assets

Inventary 156306246 136429420 19876826

Sunry Detors 7348982 8062874 713892

Cash and Bank

Balances 8755709 3903005 4852704

Loand and Advances 145766518 145443323 323195

Total(1) 318177455 293838622

LiabilitiesCurrent Liabilities 257973323 202512606 55460717

Total(2) 257973323 202512606

working Capital 6020413291326016

Increase in Working

Capital 31121884 31121884

Total 91326016 91326016 56174609 56174609

Interpretation

The working capital increased from 31121884 by comparing 2008 and 2009. In this year the



OVERALL CHANGES IN WORKING CPAITAL STATEMENT

Year Increase Decrease

2006-2007 - 104934016

2007-2008 31230934 -





2008-2009 - 12777689

2009-2010 31121884 -

DATA ANALYSIS & INTERPRETATION

CURRENT RATIO

Current Ratio=Current Assets/Current Liabilities





TABLE - I

Year current Assets Current Liabilities Liquid Ratio

2005-06 260269258 113584355 2.29

2006-07 403986930 362236043 1.11

2007-08 540125469 467143647 1.15

2008-09 318177455 257973323 1.23

2009-10 293838622 202512606 1.45

Source: Annual Publication reports of KBD Sugars.





INTERPRETATION

During the period 2005-06 the current ratio of the company was 2.29 which is quite high

compared to the ideal ratio. In the next two periods, there has been a marginal fall of current

ratios 1.11, 1.15, 1.23 & 1.45 during 2006-07, 2007-2008, 2008-2009 & 2009-2010 which

indicates the depletion of working capital condition of the company.

LIQUID RATIO

Liquid Ratio=Liquid Assets/Current Liabilities

TABLE - II

Year Liquid Assets Current Liabilities Liquid Ratio

2005-06 84821689 113584355 0.74

2006-07 100748819 362236043 0.27

2007-08 164448577 467143647 0.35





2008-09 161871209 257973323 0.62

2009-10 157409202 202512606 0.77

Source: Annual Publication reports of KBD Sugars & distilleries ltd.

INTERPRETATION





During the period 2005-06 the liquid ratio of the company was 1.74:1 and 2006-07

the liquid of the company 0.27:1 and 2007-08 it was 0.35:1 and shows a decreasing trend and

during the period 2007-08 the ratio was 0.62:1. And 2009-10 it was 0.77.

WORKING CAPITAL TURNOVER RATIO

Working capital Turnover Ratio=Net Sales/Working Capital

TABLE – III






Year Net Sales Current

Liabilities

Working capital

Turnover Ratio

2005-06 225910943 146684904 1.54

2006-07 320594420 41750887 7.67

2007-08 445877236 72981822 6.10

2008-09 402189924 60204132 6.68

2009-10 304828634 91326016 3.33




Source: Annual Publication reports of SVSIL

INTERPRETAION

During the year 2005-06 the working capital ratio is 1.54 and during the period the

following period 2006-07, 2007-08, 2008-09, 2009-10 are 7.67, 6.10, 6.68, 3.33 times. Which

indicates in the year 2008-09 the working capital was very effectively utilized in sales of firm,

But in the current year the ratio has been decreased.





FINDINGS

Operating of the KBD sugar and industries Ltd. indicates their operating profile

increasing year after year except in period 2005-2007 where the profit declaims

marginally. Other income not only income from investment but also sales of weight

wastage those arouse during the production.

We may observe from the movement of account receivable that table share of debtors in

total assets have decline since 2006-07 and 2007-08 this is also reviles that KBD sugar

and industries Ltd. as done will in the management of account receivables.

Generally inventory holding is the largest of all current assets. In the period 2005-06 to

2008-09 current assets comparison , 68.61, 48.75, 67.41, 75.06 and 69.55 inventory. But

in the year 2008-09 is 69.55 thus we can say that KBD sugars and industries Ltd.

managing there inventory receivable reasonably some what better position.

Movement of account payable show an increasing trend. This indicates company is able

to generate credit liberal terms and generate revenue yet other cost.

Weighted operating cycle analysis helps in estimating the amount of funds that are

required for the various stages of cycles it is a method of estimating working capital

requirement WOC for KBD sugars and industries Ltd. the year 2006-07 was only 29.53

of the year 2005-06.





SUGGESTIONS

The company must try to maintain an optimum level of inventory and develop this

strategy for investing excess cash balances.

The company should improve the profits by reducing indirect expenses.

KBD sugars and industries Ltd. should develop an optimum credit policy.

KBD sugars and industries Ltd. determine maximum rate of cash discount they can give

to the customers.

KBD sugars and industries Ltd. by changing the credit period can see the effect on their

profitability.





CONCLUSION

1) The current ratio of KBD SUGARS & DISTILLERS is very low for last three years.

2) Capital amount is blocked in the inventory sugar of longer period partially due to policies of

government and partially associated with tender quotations.

3) Cash to net working capital ratio is decreasing year to year.

4) Quick ratio of the KBD SUGRS & DISTILLERS is continually decreasing

5) The debtor’s turnover ratio indicates the rate of which cash is generated by turnover of debtors

the debtors turn over ratio 2005-06 to2009-10are increased The high value of DTR was more

efficient in management of credit. Therefore we conclude that there is being good debtor’s

turnover ratio maintained by KBD Sugars.

6. The net working capital is decreased year to year in KBD SUGARS & DISTILLERS

7.Working capital turnover is changing from year to year. Hence, networking capital is not used

efficiently.





KBD SUGARS & DISTILLERIES LIMITED – SUGAR DIVISIONBLANCE SHEET AS ON 31ST MARCH-2006

DESCRIPTION SCH TOTAL TOTAL





I.SOURCE S OF FUNDS

1.SHARE HOLDERS FUNDS

SHARE CAPITAL2.RESERVES AND SURPLUS

3.LOAN FUNDS

SECURESD LOANSUN SECURED LOANS

4.DIFFERED TAX LIABILITY

II.APPLICATIO OF FUNDS

1.FIXED ASSETS

GROSS BLOCK

LESS: DEPRESATION

NET BIOCK

CAPITAL WORK IN- PROGRESS

2.CURRENT ASSETS, LOANS ANDADVANCES

INVENTORIES

SUNDRY DEBTORS

CASH AND BANK BALANCE

LOAN AND ADVANCES

LESS:CURRENT LIABLITIES

3:DIFFERED TAX ASSETS

4:MISCELLANEOUS EXPENDITURE(TO THE EXTENT NOT WRITTEN OFF

OR ADJUSTER)

MERGER/DEMERGER EXPENS

PROFIT AND LOSS ACCOUNT

A

B

C

E

FG

H

I

J

554213081

254948931

299234150

9096115

175447596

8068939

221435674538394

---------------

--

260269258

113584355

---------------

--

13084120

262823490

177589768

13478948785017925

---------------------

673304880

---------------------

308330265

146684904

0

489704

217800007

673304879

KBD SUGARS & DISTILLERIES LIMITED – SUGAR DIVISION

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH2006






DESCRIPTION SCHTOTAL

INCOME

SALES AND OTHER INCOME

INCREASE/DECREASE IN STOCKS

EXPENDITURE

CONSUMPTION OF RAMATERIAL

MANUFACTURING EXPENSES

SALARIES, WAGES & OTHER

BENEFITSINTEREST AND FINANCIALCHARGES

DUTIES & TAXES

ADMINISTRATION EXPENSES

PRELIMINARY AND SHARE ISSUE

EXP.WRITTEN OFF

DEPRECIATION

LOSS FOR THE YEAR

PRIOR PERIOD ITEMS NET

PROFIT/LOSS FOR THE YEAR

LESS:PROVISIONS FOR TAXATION

FRINGE BNENEFIT TAX

DEFERRED TAX ASSET

NET PROFIT/LOSS AFTER TAXLOSS BROUGHT FORWARD FROM

PREVIO

LOSS CRRIED TO BALANCE SHEET

EARNINGS PER SHARE –BASIC &DILUTED

K

L

M

N

O

P

Q

225910943322344

93221682

319454969

254504145

1930344822324127

5268419

0

8218789

0

23697999

333316927

-13861958

0

-13861958

0

0

0

-13861958

203938049

203938049

0.58





BLANCE SHEET AS ON 31ST MARCH-2007


I.SOURCE S OF FUNDS

1. SHARE HOLDERS FUNDS

SHARE CAPITAL

2.RESERVES AND

SURPLUS

3.LOAN FUNDS

SECURESD LOANS

UN SECURED LOANS

4.DIFFERED TAX

LIABILITY


1.FIXED ASSETS

GROSS BLOCK

LESS: DEPRESATION

NET BIOCK

CAPITAL WORK IN-

PROGRESS

2.CURRENT ASSETS, LOANS

AND ADVANCES

INVENTORIES

SUNDRY DEBTORSCASH AND BANK

BALANCE

LOAN AND ADVANCES

LESS:CURRENT

LIABLITIES

3:DIFFERED TAX ASSETS4:MISCELLANEOUS

EXPENDITURE

(TO THE EXTENT NOT

WRITTEN OFF OR

ADJUSTER)


PROFIT AND LOSS

ACCOUNT

A

B

C

D

E

F

GH

I

J

562808479

278784199

0

-20659974

253408846

105914487

0

338663359

296545193

41750887

367278

284024280

12520913

303238111

8256619

2907579

89584621

403986930

362236043

338663359







DESCRIPTION SCH TOTAL

INCOME

SALES

AND OTHER INCOME


EXPENDITURE


MANUFACTURING EXPENSES


BENEFITS

INTEREST AND FINANCIAL CHARGES

DUTIES & TAXES



EXP.WRITTEN OFFDEPRECIATION




DEFERRED TAX ASSET

LOSS BROUGHT FORWARD FROM

PREVIOUS YEAR

LOSS CARRIED TO BALANCE SHEET

K

L

M

N

O

P

320594420

462360

107701016

428757796

303164832

40364585

23375833

19326073

29444670

9936508

023805268

449417770

(20659974)

0

(20659974)

0

0

0

20659974








DESCRIPTION SCH TOTAL TOTALI.SOURCE S OF FUNDS


SHARE CAPITAL

2.RESERVES AND SURPLUS

3.LOAN FUNDS

SECURESD LOANS

UN SECURED LOANS4.DIFFERED TAX LIABILITY


1.FIXED ASSETS

GROSS BLOCK LESS: DEPRESATION

NET BIOCK


2.CURRENT ASSETS, LOANS AND

ADVANCES

INVENTORIESSUNDRY DEBTORS


LOAN AND ADVANCES



4:MISCELLANEOUS EXPENDITURE

(TO THE EXTENT NOT WRITTEN OFF OR

ADJUSTER)



A

B

C

D

E

FG

H

I

J

580496620

303241696

0

-78641650

365142945

682894870

354790781

281564107

72981822

244852

2772549244309183

375676892

8416762

5067311

150964503

540125469467143647

354790781





PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31SMARCH2008






DESCRIPTION SC

H

TOTAL

INCOME

SALES

AND OTHER INCOME


EXPENDITURE


MANUFACTURING EXPENSESSALARIES, WAGES & OTHER BENEFITS


DUTIES & TAXES



EXP.WRITTEN OFF

DEPRECIATION

LOSS FOR THE YEAR



LESS:PROVISIONS FOR TAXATIONFRINGE BNENEFIT TAX

DEFERRED TAX ASSET

NET PROFIT/LOSS AFTER TAX

LOSS BROUGHT FORWARD FROM PREVIUS

YEAR


K

L

M

NO

P

Q

446392044

74444167

520836212

391436510

5782484031625273

36973820

48400517

8759405

024457497

599477862

-78641650

0-78641650

0

0

0-78641650

78641650






I.SOURCE S OF FUNDS


SHARE CAPITAL


3.LOAN FUNDS

SECURESD LOANS

UN SECURED LOANS



1.FIXED ASSETS

GROSS BLOCK

LESS: DEPRESATION NET BIOCK



AND ADVANCES

INVENTORIES

SUNDRY DEBTORS


LOAN AND ADVANCES



4:MISCELLANEOUS

EXPENDITURE

(TO THE EXTENT NOT WRITTEN

OFF OR ADJUSTER)



A

B

C

D

E

F

G

H

I

j

615531243

328924963

0

-51120343

292832366

110248323

0

351960346

291633788

60204132

122426

286606280

5027508

156306246

7348982

8755709

145766518

318177455

257973323

351960346






DESCRIPTION SCH TOTAL

INCOME

SALES

LESS:EXCISE DUTY

OTHER INCOME


EXPENDITURE

CONSUMPTION OF RAMATERIALMANUFACTURING EXPENSES


BENEFITS


ADMINISTRATION EXPENSESDEPRECIATION



PROFIT/LOSS FOT THE YEAR

DEFERRED TAX ASSET

LOSS BROUGHT FORWARD FROMPREVIO


K

L

M N

O

P

Q

407989582

27168636

380820947

26118647

-217914213

189025381

103459245

36451713

30698199

34970673

8882627

25683267

240145724

(51120343)0

(51120343)

0

0

51120343









I.SOURCE S OF FUNDS


SHARE CAPITAL


3.LOAN FUNDSSECURESD LOANS

UN SECURED LOANS



1.FIXED ASSETS

GROSS BLOCK

LESS: DEPRESATION

NET BIOCK



AND ADVANCES

INVENTORIES

SUNDRY DEBTORSCASH AND BANK BALANCE

LOAN AND ADVANCES



4:MISCELLANEOUS

EXPENDITURE

(TO THE EXTENT NOT WRITTEN

OFF OR ADJUSTER)MERGER/DEMERGER EXPENS


A

B

C

D

E

FG

H

I

j

616421505

353969816

0

-34795778

299428725111248323

0

375881270

284555254

91326016

262451689

22103565

1364294208062874

3903005

145443323

293838622

202512606

375881270




BIBILOGRAPHY

AUTHOR TITLE PUBLISHIG PLACE

I.M .PANDEY, FINANCIAL MANAGEMENT, VIKAS PUBLISHING.

HOUSE PRIVATE LIMITED

M.Y.KHAN & P.K. JAIN, FINANCIAL MANAGEMENT TATA McGraw HILL

PUBLISHING

COMPANY, LIMITED.

PRASANNA CHANDRA, FINANCIAL MANAGEMENT, TATA McGraw HILL

PUBLISHING

COMPANY LIMITED .

JAWAHRALAL FINANCIAL MANAGEMENT HIMALAYA PUBLISHING

LIMITED

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