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INTRODUCTION

Cash plays a very important role in the entire economic life a business. A firm needs cash to make payments to its suppliers to incur day-to-day expenses and to pay salaries, wages, interest and dividend etcinfract what blood is to a human body, cash is to a business enterprise. It is very essential for a business to maintain an adequate of cash. But many times a concern operates profitably and yet it becomes very difficult to pay taxes and dividend. Ample cash balances provides better solutions for a meeting this difficulty. Information about the cash flows of an enterprise is useful in providing users of financial statements with a basis to asses the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to utilize those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an enterprise to generate cash and cash equivalents and the timing and certainty of their generation. An attempt has been made to known the flow of cash and its effects on the entire organization in this study.

CASH FLOW ANALYSIS MEANING OF CASH FLOW STATEMENT:Cash Flow statement is a statement which describes the inflows (sources) and out flows (uses) of cash and cash equivalents in an enterprise during a specified period of time. Such a statement enumerates net effects of the various business transactions on cash and its equivalents and takes in to account receipts and disbursements of cash. A cash flow statement summary the cases of changes cash position of business enterprise between dates of two balance sheets. According to AS- 3 (Revised), an enterprise should prepare a cash flow statement and should present it for each period for which financial statements are prepared. The terms cash, cash equivalents and cash flows are used in this statement with the following meanings.

1) 2)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short term, highly liquid investments that are readily convertible in to known amounts of cash and which are subject To an insignificant risk of changes in value.

3)

Cash equivalents are held for the purpose of meeting short-term cash Commitments rather than for investment or other purpose. For investments to quality as cash equivalent, it must be readily convertible to a known amount of cash equivalent; it must be readily convertible to a known amount of cash and be subject to an insignificant risk of change risk of change in value. There fore, an investment normally qualifies as a cash equivalent only when it has a short maturity, of say, three months or less from the date of acquisition. Investments in Shares are excluded from cash equivalents unless they are. In substance, cash equivalents: for example, preference shares of a company acquired shortly before their specified 40redemption date (provided there is only an insignificant risk of failure of the company to repay the amount at maturity).

4)

Cash flows are inflows and out flows of cash and cash Equivalents. Flow of cash is to have taken place when any transaction Makes changes in the amount of cash and cash equivalents available before happening of the transaction. If is called an inflow (source) and if it results in the decrease of total cash, it is known as out flow (use) of cash.

PURPOSE OF CASH FLOW STATEMENT:The Cash Flow statement of cash flow explains that change the period in cash and cash equivalents. Cash equivalents are short term highly liquid investments. Such as treasury bills, commercial papers and money market funds. These investments are readily convertible to know amounts of cash and are so near their maturity that there is little risk of change in values from fluctuating interest rates. The statement of cash flow provides information that is not readily apparent by looking at just balance sheet useful in selected cases. Then net income does give an accurate reflection of a company performance.

A cash flow statement is prepared from the given balance sheets and other additional information. The statement of cash flows portrays the sources from which cash moves out of the concern and the uses to which cash in put on, thus cash moves out of the concern. The net effect of such cash movement is shown as net cash flows, which is added or deducted to the opening balance of cash to give closing balance of cash. The cash flow statement is superior to funds flow statement as it is particularly useful to assess the cash of a firm. This cash flow statement is very useful to the management in budgeting cash requirement. Thus, the causes of change in cash are determined by analyzing the changes in all excepting cash. Cash flows are into 3 categories Operating, Investing, and Financing in normal circumstance a company has positive cash flow operations and negative cash from investing activities is positive of negative typically on how fast a company is growing.

NEED FOR CASH FLOW STATEMENT: The Financial Accounting Standard Board, U.S.A, has emphasized the need for cash flow statement as, Financial reporting should provide information to help present and potential investors and creditors and other users in assessing the amounts, timing and uncertainty of prospective cash receipts from dividends or interest and prospective cash receipts from dividends or interest and proceeds from the sales, redemption or maturity of securities or loans. The prospects for those cash receipts are affected by an enterprises ability to generate enough cash to meet the obligations when due and its other operating needs, to reinvest in operations and to pay cash dividends. In June 1995 the securities and exchange board of India amended clause 32 of the listing agreement requiring every listed company to give along with the balance sheet and profit and loss account, a cash flow statement prepared in the prescribed format, showing separately cash flows from operating activities, investing activities and financing activities. Recognizing the importance of cash flow statement, the Institute of Charted Accounts of India issued. AS-3 Revised: Cash flow statements in MARCH, 1997. THE revised accounting standard supersedes AS-3 changes in Financial Position, issued in June 1981.

DEFINITION:3

Cash flow statement may be defined as a statement, generally prepared annually, which shows the sources and uses of cash during that period. It measures the changed in the financial position of a firm on cash inflows and uses of cash outflows of the firm during a particular period of time.

THE OBJECTIVES OF THE CASH FLOW STATEMENT: Information about the cash flows of an enterprise is useful in providing Users of financial statements with a basis to asses the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprises to utilize those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an enterprise to generate cash and cash equivalents and the certainty of their generation. The statement deals with the provision of information about the historical changes in cash and cash equivalents of an enterprise by means of cash flow statement which classified cash flows during the period from operating, investing and financing activities.

CLASSIFICATION OF CASH FLOWS: According to AS-3 (Revised), the cash flow statement should report Cash flows during the period classified by operating, investing and financing activities. Thus, cash flows are classified in to three main categories.

Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities

CASH FLOWS FORM OPERATING ACTIVITIES: Operating activities are the principal revenue producing activities of the enterprise and activities that are not investing or financing activities.

The amount of cash flows arising from operating activities is a key indicator of the extent to which the operation of the enterprise have generated sufficient cash flows to maintain the operation capability of the enterprise, pay dividends, repay loans, and make new investments
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without recourse to external sources of financing. With other information, in forecasting future operating cash flows. Cash flows from operating activities are primarily derived from the principal revenueproducing activities of the enterprise. Therefore, they generally result from the transaction and other events that enter into the determination of net profit or loss.

EXAMPLE OF CASH FLOWS FROM OPRETING ACTIVITIES ARE: Cash receipts from the sale of goods and the rendering of services Cash receipts from royalties, fees, commission, and other revenue Cash payments to suppliers of goods and services Cash payments to and on behalf of employees Cash receipts and cash payments of an insurance enterprise for premiums and claims, annuities and other policy benefits Cash payments of refunds of income taxes unless they can be specifically identified with financing and investing activities Cash receipts and payments relating to futures contracts, forward contracts, option contracts, and swap contracts, when the contracts are held for dealing or trading purposes. Some transaction, such as the sale of an item of plant, may give rise to A gain or loss which is included in the determination of net profit of loss. However, the cash flows relating to such transaction are cash flows from investing activities. CASH RECEIPTS FROM Sale of goods and service Sale of trading Securities Interest revenue and dividend revenue CASH PAYMENT FROM Inventory purchase Wages & Salaries, Taxes Interest Expenses Other Expenses purchases of trading securities

CASH FLOWS FROM INVESTING ACTIVITIES: Investing activities are the acquisition and disposal of long-term assets other investments not included in cash equivalents. The separate disclosures of Cash flows have been made for resources intended to generate future income and ash flows.
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EXAMPLE

OF

CASH

FLOWS

ARISING

FROM

INVESTING

ACTIVITES IS: Cash payments to acquire fixed assets. These payments include those to relating capitalized research & development costs and self constructed fixed assets. Cash receipts from disposal of fixed assets (including intangibles); Cash payments to acquire shares, warrants, or debt instruments of other enterprises and interests in joint ventures (other than payments for those instruments considered to be cash equivalents and those held for dealing purpose); Cash receipts from disposal of shares, warrants, or debt instruments of other enterprises and interests in joint venture Cash advances and loans made to third parties Cash receipts from the repayment of advances and loans made to third parties Cash payments for futures contracts, forward contracts, option contracts, and swap contracts except when the contracts are held for dealing or trading purpose, or the payments are classified as financing activities.

CASH RECEIPTS FROM Sale of plant assets Sale of business segment Sale of non- trading securities Collection of pre-plan loan entities

CASH PAYMENT FROM Purchases of plant assets Purchases of non-trading Securities Making loans to others

CASH FLOWS FROM FINANCING ACTIVITES: Financing activities are activities that result in changes in the size and Composition of the owners capital and borrowing of enterprise. The separate disclosure of cash flows arising from financing activities is important because it is useful in predicting claims on future cash flows by providers of funds to the enterprise.

CASH RECEIPTS FROM Insurance of stock Borrowing

CASH PAYMENT FROM Cash dividends Repayment of loans Re purchase of stock

Special items:
In addition to the general classification of 3types of cash flows AS-3 provides for the treatment of cash flows of certain special as under. Foreign Currency Cash Flows. Extraordinary items. Interest and dividend.
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Taxes on income. Investment in subsidiaries, associates and joint ventures. Acquisition and disposal of subsidiaries and other business units. Non- cash transaction. Components of cash and cash equivalents. Other disclosures.

USES AND SIGNIFICANCE OF CASH FLOW STATEMNT: Cash flow statement is of vital importance to the financial management. It is an essential tool of financial analysis for short- term planning. The chief advantages of cash flow statement are as follows: 1) Since a cash flow statement can base on the cash basis of accounting, it is very useful in the evaluation of cash position of a firm. 2) Projected cash flow statement can be prepared in order to know the future cash position of a concern so as to enable a firm to plan and coordinate its financial operations properly. By preparing this statement, a firm can come to know as to how much cash will be generated in to the firm and how much cash will be needed to make various payments and hence the firm can well plan to arrange for the future requirements of cash. 3) A comparison of the historical and projected cash flow statements can be made so as to find the variations and deficiency of otherwise in the performance so as to enable the firm to take immediate and effective action. 4) A series of intra- firm cash flow statements reveals whether the firms liquidity is improving or deteriorating over a period of time and in comparison to other firms over a given period of time.
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5)

Cash flow statement helps in planning the repayment of loans, replacement of fixed assets and other similar long term planning of cash. It also significant for capital budgeting decisions.

6)

Cash flow analysis in more useful and appropriate than funds flow analysis for short term financial analysis as in very short period it is cash which is more relevant then the working capital for forecasting the ability of the firm to meet its immediate obligations.

7)

Cash flow statement prepared according to AS-3 (Revised) is more suitable for making comparisons than the funds flow statement as there is no standard format used for the same.

8)

Cash flow statement provides information of all activities classified under operating, investing and financing activities, the funds statement even when prepared on cash basis, did not disclose cash flows from such activities separately, and thus, cash flow statement is more useful than the funds statement.

PROCEDURE FOR PREPARING A CASH FLOW STATEMENT: Cash flow statement in not a substitute of income statement, i.e., a profit and loss account, and a balance sheet. It provides additional information and explains the reasons in cash and cash equivalents, derived from financial statement at to points of time. The producer for preparing a cash flow statement is different from the procedure followed in respect of profit and loss account and balance sheet. It is prepared with the help of financial statements. The basic information required for the preparation of cash flow statement is obtained from the following three sources: Comparative balance sheets at two points of time, i.e., in the beginning and at the end of the accounting period. Income statement of the current accounting period or the profit and loss account. Some selected additional data to extract the hidden transactions. The preparation of cash flow statement involves the following steps
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Step

1: - Compute the net increase or decrease in cash and cash equivalents by making a

comparison of these accounting given in the comparative balance sheets. Step 2: - Calculate the net cash flow provided operating activities by analyzing the profit and

loss account balance sheet and additional information. There are two methods of converting net income in to net cash flows from operating activities. Step 3: - Calculate the net cash flow from investing activities.

Step 4: - Calculate the net cash flow from financing activities. Step 5: - Prepare a formal cash flow statement highlighting the net cash flow from operating investing and financing activities separately. Step 6: - Make an aggregate of cash flows from the three activities and ensure that the total net cash flow is equal to the net increase or decrease in cash and Cash equivalents as calculated in step 1. Step 7: - Report significant non-cash transactions that did not involve cash or cash equivalents in a separate schedule to the cash flow statement.

LIMITATIONS OF CASH FLOW STATEMENT: Despite a number of uses, cash flow statements suffer from the following Limitations: As cash flow statement is based on cash basis of accounting, it ignores the basic Some people feel that as working capital is a wider concept of funds, a funds flow Cash flow statement is not suitable for judging the profitability of a firm as non- cash

accounting concept of accrual basis. statement provides a more complete picture than cash flow statement. charges are ignored while calculating cash flows from operating activities.

PREPARATION OF CASH FLOW STATEMENT:An organization should prepare a cash flow statement according to AS-3 the following basic information are required for the preparation of cash flow statement.
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1. Comparative balance Sheet:At the beginning and at the end of the accounting period are required to indicate the amount of changes that have taken place in assets. Liabilities and capital.

2. Profit and loss account:This account of the current period enables to determine the amount of cash provided by or used in operating activities during the accounting period after making adjustments for non cash current assets and current liabilities.

3. Additional Data:In addition to the above statement additional data are collected to determine how cash has been provided or used.

This statement is period in 3 stages as given below:


Net profit before taxation and extraordinary items. Cash flow from operating, investing and financing activities. Cash flow statement.

1. Net profit before taxation and extraordinary items:


This will not be equal to the net profit as reported in the profit & loss accounting. It is so because of taxation and certain non-operating items changed to the profit & loss account tax paid and non-operating items are adjusted to the figure of profit & loss in order to get the net profit before taxation and extraordinary items.

2. Cash flow from Operating, Investing and Financing Activities:


Net profit before taxation and extraordinary items is further adjustment with reference to depreciation in order to get the figure of operating profit before working capital changes. This figure is further adjusted for changes in current assets, and liabilities to get the amount of cash flow effects of investing activity, change in property plant and equipment as well as in long term. Investments may indicate that cash has either been spent or has been received.
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Analyze the short term and long-term debt and the stock holders, equity accounts to determine the cash flows effects of any financing transaction. These Transactions include borrowing or repaying debt issuing or buying back stock and paying dividends. Make sure that total net cash flow from operating. Investing and financing activities is equal to the net increase and decrease then cash flows by classified all cash inflow and outflows according to operating, investing and financing activities. The following extracts from the balance sheet of a company will give a more detailed and clear concept of term cash flows. FIXED ASSETS Good will Building Plant Furniture Long term investment Share capital Redeemable preference shares Loan on mortgage Reserves and surplus General Reserve Profit and loss account Debentures Long term loans Non flow of funds CURRENT ASSETS Sundry debtors Bills receivables Investors Prepaid Expenses Cash balances CURRENT LIABILITIES Sundry Creditors Bills Payable Bank Over Draft Outstanding Expenses Total Current Liabilities LONG TERM LIABILITIES

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Total current assets

Difference between Funds & Cash flow statements

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SPECIMENS CASH FLOW STATEMENT FOR THE END OF THE YEAR


CASH FLOW STATEMENT FOR THE END OF THE YEAR PARTICULARS AMOUNT (in AMOUNT (in Rs.) Rs.) Basis of difference Funds flows statement Cash flow statement CASHFLOW FROM OPERATING ACTIVITIES Net Profit before taxation and extraordinary items xxx It is based on a wider concept It is based on a narrower 1. ADD:-Basic of concept. of funds. concept of funds. Adjustment for Depreciation xxx Miscellaneous Expanses xxx xxx Operating Profit before WorkingIt is based on accrual basic of Capital Changes xxx It is based on cash basic of ADD:2. Basis of accounting. accounting. Increase in Current Liabilities xxx accounting. Decrease in Current Assets xxx LESS:Schedule of changes in Increase in Current Assets xxx Decrease in Current Liabilities working capital is prepared to No such schedule of changing xxx xxx Cash generatedchanges in Activities(A) xxxx 3. Schedule of from Operatingshow the change in current working capital is prepared. CASHFLOW FROM INVESTING ACTIVITIES working capital. assets & current liabilities. ADD:Sale of fixed Asset sale of the Investment Purchase of The Assets Purchase of The Investments Fund flow statement reveals Interest/Dividend Received on Investment the sources & applications of Tax paid on Interest on Investment funds; the net Cash generated from Investing Activities(B) difference CASHFLOW FROM FINANCINGbetween sources & ACTIVITIES ADD:applications of funds Issue of share capital include Share Premium 4. Method of preparing. Issue of Debentures, Bonds and Preference shareincrease or represents net capital Interest paid on Debt decrees in working capital. Dividend paid on Share Capital Cash generated from Financing Activities(C) Net Increase/Decrease in Cash/Cash Equivalent(A+B+C) ADD:It is usefully in planning Cash at the beginning of the year intermediate & long-term Cash at the end of the year 5. Basis of usefulness. financing. xxx xxx xxx It isxxx prepared by classifying xxx all cash in flows & out flows xxx xxx in terms of operating, xxxx investing & financing actives. The xxx difference represents net xxx the net increase or decrees in xxx cash & cash equivalents. xxx xxx xxxx xxxx It is more usefully for shortxxx term analysis & cash planning xxxx of business.

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INDUSTRY PROFILE SUGAR INDUSTRY SCENARIO:INDIA is the fourth major sugar producing country in the world. The first three being in RUSSIN, BRAZIL and CUBA in that order sugar industry Occupies an important place among organized industries in India. It ranks third largest industry in terms of its contribution to the net value added by manufacturing and employment for 25 million cultivators of sugar cane. Various agencies of distributive trade and thorough subsidiary industries such as confectionery. It is also and important source excise duty for the central govt .Three is now 420 sugar factories in INDIA, with total installed capacity Of 15 million tons; against this 400 factories were in operation of which 120 were in the private sectors, 60 in the public sector and 220 in the cooperative sector. In India before independence co-operative sugar were established and the First cooperative sugar factory being the co-operative sugar factory at ETIKOPPAKA IN ANDHRA PREDESH. The Govt. encouraged the co-operative sector in the sugar industry in the fifties and new series of Co-Operative sugar factories started in the fifties. At present the co-operative sector consists of 50%f the factories in India, and account for more than 50% of total sugar production. At present these are 18 sugar factories under cooperative sector and 7 in private sector. Regarding sugar can price the govt. of India fixes the minimum sugarcane price linked to recovery of ado payment due to hinge cost of cane cultivation linked to recovery of 8.5% the concerned state govt. recommended to pay another adhoc payment due to high cost of cane cultivation linked to a recovery of 8.5%. The Factories are liable to pay an extra amount of 2/- per each point of recovery percentage per each ton of sugar cane, if the recovery of sugar reaches above 8.5%.

SUGARABROAD:World sugar production will jump 7% in the season that began in October mainly because of increased output in Brazil and India, the U.S.D.A Said, world production will be
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155.2 million tonnes, up 10.5 million tonnes, from a year earlier and up 6 million tonnes from the may forecast. Consumption is forecast at 146 million tonnes, up 3.2 Million tonnes, the USDA Said, with each countrys Output up 4 million tonnes from the previous year.

BRAZIL:
Exports of Brazil to the Arab countries broke a new record in October they generated US $730.6 million, an increase of 57% when compared to the same month last year. The product the most influenced the performance in the month was sugar sales of the commodity to the Arabs generated US $325.5 million, present growth of almost 170%when compared to last year. The Brazilian sugar is taking over more and more space that was supplied by EU sugar.

THAILAND:The cabinet recently announced a pre harvest sugarcane price for the2007-08 milling year at 800 baths per tone. The return for sugar production and distribution was set at 342.86 baths per tone of sugarcane crushed. The Cane and sugar board said the price in almost same as it was last season. GUATEMALA:All sugar for he domestic market is sold through a distribution company owned by the sugar industry; Asazgua, and association that represents sugar Millers, handles all marketing of sugar for export. The monopoly power. Exercised by these organizations enables the industry to maintain domestic Sugar prices well above world market levels. Guatemala exports 1to 1.3million

COLOMBIA:Colombia operates a price band system on sugar imports where by a Variable duty (equal to 120% of the difference between the world price and fixed reference price) is imposed in addition to the basic duty. COUNTRYWISE SUGAR REVIEW: NOVEMBER 2006

SUGAR TECHNOLOGY
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CHANGES IN SUGAR PRODUCTION DECOMPOSING IRON COMPLEXES WITH OPTIMUMLIME:ABSTRACT:SUGARCANE, labour and capital are the well-known common on inputs for the production of sugar. Output of sugar behaves in response to some Increase in one particular input or all inputs. Assuming that the amount of Factors of production (output) will depend exclusively on change in technology by decomposition of unidentified iron complexes applying electrolytic Clarification using optimized lime does from cane juice during sugar manufacturing. The iron content was deposited at cathode after decomposition of iron content was deposited at cathode after decomposition of iron complexes. As a result percentage of sucrose as well as purity (output) show increasing pattern, which can be treated as increasing returns to the scale of a sugar industry.

INTRODUCTION:Indias highest production had been 20.14million tonnes in the year 2002-03 when the area under cultivation was about 4.4million hectares and a sugar Recovery of 10.36% on cane. The government said it would liberalize sugar Exports encouraged by prospects of a good domestic crop and from global prices food minister said as a first step the government will allow a state trading firm to export up to 300,000 tonnes of sugar meet demand from Pakistan and other importing countries in the region. At the moment, the government permits experts by mills, which had imported raw sugar duty free in the last two years with and obligation to sell it overseas with in a stipulated timeperiod. But the industry has been urging the Government to permit all mills to sell overseas to take advantage of strong Global prices, a booming export market and high domestic production. Indias sugar production during crop year ending in September is expected to be around 18.5million tonnes; up from 13million tonnes last year an industry official has forecast production would rise to 22million tonnes in2007-08. The country annually consumes about 18million tonnes of sugar. The Industry confident of boosting white.
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MARKET REVIEW:MARKET REVIEW FOR THE MONTH OF NOVEMBER, 2007:Declining trend continued in various wholesale sugar markets of the country during November, 2008.price eased by Rs80/-to Rs100/- a quintal on increased supply and lack of demand. His government of India released a free Sale quantity of 12lakh tonnes for the month of December as against 11lakhTonnes during the corresponding period last year. Sugar price also declined in the wake of new arrivals in the market. Weekend Wholesale prices of sugar & Sugar are given here under.

PRICES OF SUGAR AND GUR FOR THE MONTH OF NOV2008


MARKET SUGAR 31st OCTOBER 7th NOVEMBER 15th NOVEMBER 22nd NOVEMBER 30th NOVEMBER

DELHI MUMBAI KOLKATTA CHENNAI

2500 2350 2525 2350 2510 2500 2350 2300

2525 2350 2500 2335 2545 2525 2350 2250

2500 2335 2500 2350 2525 2350 2375 2310

2500 2580 2525 2350 2500 2335 2525 2350

2800 2535 2500 2335 2575 2580 2500 2335

WORLD SUGAR OUTLOOK:WORLD SUGAR BALANCE:According to F.O. Lights first estimate of world sugar balance 2007-08.World sugar production in 2008-09 is expected at 160.01 Million Metric Tons Raw Value (MRTV) or 8.35 million MRTV higher than in 2007-08. World sugar Consumption in 2008-09 is expected to rise by 2.88 MRTV to 148.26MillionMRTV. Imports in 2006-07 are estimated at about 48.09 million mrtv,3.88 million MRTV lower than in the last year while exports are estimated at51.36 million MRTV, 2.32 million MRTV lower than in the last season. The current season is expected to close with a stock of 72.64 million MRTV or 8.45 million MRTV higher than the
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closing stock last year. The stocks amount to 48.99% of the estimated consumption, while last year it was 44.14%.

U.S SUGAR BALANCE:According to the last estimate of USDA, sugar production in the U.S in2008-09 is expected at 8.52 million short tons raw value, or 1, 12 million strive higher than 7.40 million strive produced in 2007-08. Including opening stock of1.76 million strive and imports of 2.21 million strive, the total supply is expected at 12.49 million strive; as against 12.17 million strive in 2007-08. Total (including export) in 2007-08 is estimated at 10.62 million strive as against 10.41 million in 2006-07. Stock at the end of 2008-09 is estimated at 1.87 million strive as against1.76 million strive at the end so 2008-2009. Stocks to use ratio in 2009-10 is expected at 17.6% compared with 16.9 in 2008-09.

SUGAR & HEALTH SWEET REMINDER:The current festive season always induces a certain degree or anxiety in me. I must confess that this anxiety is caused on account of my sweet tooth. Much as would like to think of my self as some one who has in general a very responsible attitude towards the consumption of sweets? This is the one time of the year when I do tend to over indulge. Any way what lingers now is the post feasting guilt my only consolation, if it can be called that is the fact most of us are guilty of the same misdemeanour to which I have just confessed.

WHY SHOULD ONE FEE GUILTY AND ALSO WORRY ABOUT CONSUMING SUGAR?
Actually it is the excessive consumption of sugar that is not desirable. Small amounts of sugar can be consumed without too much fuss. The who recommends that we limit our intake of refined sugar to 5-10 percent of our daily calorie requirement. This means that on a 2000 calorie diet-which the average recommended dietary allowance we can consume about 200 calories of sugar (10 tea spoons)

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Remember the following simple rule about many things in life also applies over here: most things in excess are harmful or not desirable. In the case of our diet, excessive consumption of calories, beyond the 2000 limit, is not good whether they come from fat, proteins or from sugar. All excessive in taken get stored as fat in the body. According to a recent issue of the New England journal of medicine, regular weighing is the single most important tool to keep your weight under Check. It is always better to catch the small increases in weight can guide you Towards making minor but daily adjustments in your diet so the situation doesnt never get really out of your control.

CO-PRODUCTS:REEP: EASING THE WAY FOR FINANCING OF RENEWABLES


The renewable energy and energy efficiency partnership (REEP), Has Launched the Renewable Energy Exchange (Asia) private ltd. In Singapore With the support of the development finance arm of the German Government, DEG, REEEP is an active, global public-private partner ship that structures Policy and regulatory initiatives for clean energy, and facilitates financing for Energy projects. It has often been observed that while project developers and investors find it difficult to identify sources of finance, bankers find it difficult to identify Bankable projects. All this will now be pass, with the introduction of REEEPS new exchange programmed. The renewable energy Exchange would act as a central point of contact through which a professionally prepared and monitored project portfolio would-Be provided to an active group of investors.

DRAMATIC CHANGE OF FORTUNES:Despite being a large segment of the countrys burgeoning food Processing Industry, the sugar sector is still subject to controls and restrictions. The INDIAN sugar industry is witnessing a dramatic turn of fortunes. Rising production for four successive years since 1999-2000 burgeoning Stock with mills, falling prices and
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squeezed margins have become a thing of The past in a short span of one year. Critically, Indian has transformed itself from being an exporter of sugar to an importer of the sweetener. What led to this sudden change of fortune from a high of 297 million Tonnes in 20012002 and 282 million tonnes in 2002-03, sugarcane output faced a sharp decline to236 million tonnes in 2003-04. Moisture-stress conditions in some of the important cane growing regions including Maharashtra, Tamilnadu, Karnataka, Gujarat and utter Pradesh Resulted in lower crops. Pest infestation (woolly aphid) too affected yields in some. The belief that Indias sugarcane had successfully broken the cyclical nature of production since 1999-2000Was shaken. As a result of lower cane output, production that registered a record201.32 loch tonnes the following season. In addition, as it always happens, Lower output encouraged larger diversion of cane for alternative sweeteners Such as sugar, which enjoyed strong price. The decline of 60 loch tonnes or 30 percent in sugar production resulted in a sharp draw of stocky during 2004-05. A period characterized by 9 percent Growth in overall agricultural production rustling in higher rural incomes and Expansion of demand.

AREA AND PRODUCTOION OF SUGARCANE


MAJOR STATES Uttar Pradesh Tamilnadu Karnataka Andhra Pradesh Gujarat Others 2008-09 20.4 5.8 3.2 2.2 1.8 6.6 2009-10 18.5 6.0 2.8 2.3 2.0 8.2 2010-11 20.3 5.3 1.9 2.0 1.6 6.5

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TOTAL

44.1

43.6

40.0

NEW DIMENSION OF SUGAR GROWTH:Sugar is the second largest Agro based industry in India located in rural Areas. About 50 million farmers, their dependents and a large number of Agricultural labourers are involved in sugarcane cultivation harvesting and ancillary activities, constituting 7.5 percent of the rural population. Besides the Industry provides employment to about 2 million skilled and semi skilled workers A and others employed in ancillary activities mostly from rural areas. The industry not only generates power for blending with petrol. With petrol 453 operating sugar mills in different parts of the country, the industry has been a focal point for socio-economic development of rural areas. India is among the few countries in the world where the sugar industry has diversified into cogeneration and production of fuel ethanol. The Union Government licensed new units with an initial capacity of1, 250 tonnes a day till the 1980s that was subsequently increased to 2,500TCD.

PRODUCTION
MAJOR STATES Uttar Pradesh Tamilnadu Karnataka Andhra Pradesh Gujarat Others 2007-08 118.0 45.1 32.6 18.1 12.5 37.9 2008-09 116.3 37.0 30.0 15.4 14.1 36.0 2009-10 113.0 27.0 19.7 14.6 10.8 35.3

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TOTAL

297.2

281.6

236.2

Production in Million Tonnes

TIGHTENING SUPPLIES:Although the 2009-10 seasons commenced with an inventory of about 80 Lake Tonnes, the market soon took cognizance of the setback to domestic production, inevitable draw down of stocks and tightening supplies. Open market Prices began to climb, notwithstanding government insistence that adequate stock of sugar was available in the country for domestic consumption. It was also clarified that no proposal for import was under consideration of the Government.

PROFILE OF INDIAN SUGAR INDUSTRY

NO. of factories Cane price per tonne No. of cane farmers Sugar production Value of sugar out put Annual tax contribution to exchequer Employment including ancillary activities Fuel Ethanol of 5%blend (value)

453 Rs.18,000cores 50Million 22millon tonnes Rs.27000cores per annum Rs.2700cores 2million people Rs.600cores per annum

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current export of co-generated power (value)

Rs.750cores per annum

GROWTH OF SUGAR INDUSTRY:AVERAGE CAPACITY 1650 Tonnes 2030 Tonnes 3000 Tonnes 3200 Tonnes

YEAR 1980 1990 2000 2003

NO.OF UNITS 299 377 423 453

PIONEERING EFFORT IMPROVES SUGAR QUALITY:Even as the sugar industry is going through a crisis, there is some good News on the quality front. The Kissan Veer Satara Cooperative Sugar Factory, Bhuinj in Maharashtras Satara District initiated and experiment two months ago to improve sugar quality, using a technology developed by Mr. V. M. KULKARNI, Founder-Director of V.M. Biotech.

SAVING IN BAGASSE:The results show that apart from better sugar, there was a saving in Biogases and improvement in stream consumption, crushing and production of bold grain sugar. No additions or changes in machinery are needed for these Experiments, which are based on the concept of using proper chemicals in the Right doses at the right stage. Essentially, the experiments worked on balancing chemistry and this improved the overall efficiency of the factory.
24

PROBLEMS OF SUGAR INDUSTRY


Problems of mounting losses. Fixation of high sugarcane prices by the state govt. The question of minimum economic size. Old machinery. Failure to follow a consistent policy. Low sugar recovery. Completion from cheaper import.

SUGAR LICENSING POLICY:The Govt. of India issues periodically guidelines for licensing new sugar Factories and for expansion of existing sugar factories. The guidelines (announced in July 1990) where designed to give a boost to sugar industry.
1)

Licenses for new factories would be issued subject to the provision that there is

no sugar factory with in radius of 12 km.


2)

The new sugar factories would be licensed for a minimum crushing capacity of

2500 tonnes per day.


3)

New licensed would on the condition that cane prices would be payable on the

basis of sucrose content of the sugarcane.


4)

Preference in licensing is too given to proposals from the co-operative and the

public sector there that from the private sector.


5)

Licenses are to be given liberally for manufacture of the industrial Alcohol

through the conversion of molasses; this is to boost production and export of industrial alcohol.
25

SUGAR DEVELOPMENT FUND:The sugar development fund was setup in 1982. Under the sugar less Act and is funded by transfer of sugar was imposed at the rate of Rs. 14 per quintal on sugar produced by all sugar factories. The fund is utilized for advancing loans on short terms for the revalidation and modernization of sugar industry and for development of sugar cane in the sugar factory area. The sugar development fund makes grants for undertaking research projects for development of sugar industry. The fund is also defraying expenditure for the purpose of building have and Maintenance of buffer stock of sugar with a view to stabilizing its price. The total Allocation created to the fund till 1996 amount to Rs. 1,660/- cores. The fund has so far sanctioned loans amounting to Rs.960/- cores. For sugarcane development and from modernization / rehabilitation of sugar factories. Government sugar industry to study the development and growth of Sugar industry in India Vis--vis other sugar producing countries and suggest Modifications amendments or repeal of any existing laws and controls is order To increase production and efficiency. The govt. of India had constituted a high powered committee under the chairmanship of B.B. Mahajan. The Mahajan Committee submitted its report in April 1998.

MAJOR RECOMMENDATIONS OF COMMITTEE ARE:1) Complete controls of sugar in order to provide level paying field to the Domestic

industry Vis--vis imported sugar.


2) Discontinuation of supply of sugar through the public distribution system (PDS) for

plugging the leakages on account of PDS sugar finding way to Open market. 3) Setting of a sugarcane pricing board to determine every September the Advance price (SMP) for the ensuring crushing season.

26

4) Minimum distance of 15 km. between and existing sugar mill and a new Sugar mill for

which license is to be issued in order to ensure viability of both the mills.


5) Continue of import of sugar under open general license (OGL) in order to product the

consumers against any unusual rise in prices. The sugar industry is essential an Agro industry and therefore it should be centrally located with in the vast area of cane cultivations otherwise it will Increase the cost of transport. It should be established at a place where agronomic conditions favoured to the development of sugar cane plantation and where climatic conditions rainfall, land fertility and irrigation facilities as Such as to ensure burnt supply of sugar cane with high yield. As per the norms of the govt. the industry should have basic infrastructure facilities.

Table 1.1: Private sector in sugar factories in AP: Sl. No 1 2 3 4 5 6 7 8 Industry KCP Sugar& Industries Corporation Limited KCP Sugar& Industries Corporation Limited The Andhra Sugars Limited The Andhra Sugars Limited The Jeypore Sugars Company Limited Sri Saravarya Sugar Mills Limited Deccan Sugar The Kirlampudi Mills Place Vuyyuru Lakshmipuram Tanuku Tadayahi Chagellu Chelluru Samarlakota Pithapuram District Krishna Krishna West Godavari West Godavari East Godavari East Godavari East Godavari East Godavari

Source: Company Records.


27

Table 1.2: Public Sector in Sugar Factories in AP: Sl.No 1 2 Industry The Nizam Sugars NGS Gayathri Sugars Limited NGS Gayathri Sugars Limited Place Miryalaguda Sadasiva Nagar District Nalgonda Nizampatnam

3 4 5 6 7 8

Sree kialas Chemicals Ganapathi Sugar Industries Limited Sree Vani Sugars and Industries Limited The Nizam Sugars Limited The Nizam Sugars Limited Empee sugars limited

Peern-Voncha Rangareddy Mudipadu Didgi Khairathbad Naidupeta

Khammam Medak Chittoor Medak Rangareddy Nellore

Source: Company Records. Table 1.3: Co-Operative sector in sugar factories in AP: Sl. No 1 Industry The Amudala-Valasa Co-Operative Sugars Limited Place Amudala valasa District Srikakulam

2 3 4

The Chittoor Co-Operative Sugars Limited The Chodavaram Co-Operative Sugars Limited

Chittoor Govada

Chittoor Visakapatnam Visakapatnam

The Etikoppaka Co-Operative agricultural industries Etikoppaka society Limited

5 6 7

The Nagarjuna Co-Operative Sugars Limited The Nandyal Co-Operative Sugars Limited The kovvur Co-Operative Sugar Factory Limited

Gurazala Nadyala Kovvur

Guntur Karnool Nellore

28

8 9 10 11

The NVR Co-Operative Sugars Limited The palais Co-Operative Sugars Limited Sri ASM Co-Operative Sugars Limited The Deccan Sugar Factory

Venuru Ammagudem Pullapalli Hanuman Junction

Guntur Khammam West Godavari Krishna

12 13 14 15 16 17

Sri Venkateswara Sugar factory Sri Vijay Ram Ganapathi Factory The Thondava Co-Operative Sugars Limited West GodavariCo-Operative Sugars Limited The Jaikisan Co-Operative Sugars Limited The Palkol Co-Operative Limited

Renigunta Korukonda Tuni Ghnadola Hazuragar Palkol

Chittoor Vizayanagaram East Godavari West Godavari Karimnagar West Godavari

COMPANY PROFILE PMR SUGAR INDUSTRY LTD.


During the year 2001-02 PMR Sugar Limited was incorporated to Purchase and take over the sick sugar mill namely ---THE PALAIR CO OPERATIVE SUGAR LIMITED Established in 1982. At the time of taking over, The Company has earned net profit in the first year of operations itself. Later the companys name was changed ad PMR SUGAR INDUSTRIES LTD. These company is one of the company in group company of PMR Projects Limited which is having diversified activities of construction of infrastructure projects like Roads, Buildings, Flyovers, Granites, Sugar and allied products. PMR GROUP is working on projects in various core sectors of Nation importance like highways, irrigation, producing the construction materials, power houses, all of which, no need to say are so essential now for the all round infrastructure development of the nation.

PMR GROUP CONSISTS FOLLOWING COMPANIES:29

1) 2) 3)

PMR INFRASTRCTURES LTD PMR GRANITES LTD PMR ENGINEERS LTD MBN ANCHORED EARTH LTD VARALAKXHMI GRANITES PVT LTD PMR SUGAR INDUSTRIES LTD. PMR POWER INDUSTRIES LTD

4) 5)
6)

7)

ABOUT PMR SUGAR INDUSTRIES LTD:


PMR SUGAR INDUSTRIES Ltd was registered on 5th November 2002 which was purchased under privatization scheme with capacity of 1250 tonnes per day. The factory was located at Rajeswarapuram village in Khammam District. The factory consists of 207 villages situated in radius of 35 Kms and the company has 5577 cane farmers. Machucon Sugar and Power Industries is one of the group companies Of PMR

projects limited which is having diversified activities of construction of infrastructure projects like Roads, Bridges, Canals, Buildings, Flyovers, Granites, sugar and allied products. The group turnover is around 600 cores and earning reasonable profits. The present market price of PMR projects Limited share of Rs.2.00/- each is quoting around Rs.300.00/-

THE FOLLOWING IS BOARD OF DIRECTORS OF COMPANY:NAME Sri.N.Satish Sri .N.Krishnaiah Sri .T.Venugopala Rao Sri .K.Srinivasa Rao DESIGNATION Chairmen Executive Director Director Director DIN 00022839 00022778 00070688 00022558

LIST OF SHARE HOLDERS & THEIR SHARE HOLDINGS:-

30

NO.OF Equity NAME NAMA NAGESWARARAO NAMA SATISH NAMA KRISHNAIAH NAMA CHINNAMMA T.VENUGOPALARAO KAMMA SRINIVAS M.SEETARAMAIAH K.LAKSHMAIAH PMR PROJECTED PMR GRANITES LTD TOTAL Shares of Rs.10/-Each 204168 51042 51042 51042 51042 76563 76563 76563 1081500 991664 2711189 Value Rs. 2041680 510420 510420 510420 510420 765630 765630 765630 10815000 9916640 27111890 percentage 7 2 2 2 2 3 3 3 40 36 100

The performance indicators of PMR sugar industries Limited are as follows:DESCRIPTION SALES Net profit Reserves and Surplus Gross Block Net Block Share Capital 2007-08 91.98 0.66 0.66 996.92 947.59 271.12 2008-09 1391.04 34.40 37.22 1054.59 895.42 271.12 2009-10 1523.75 77.49 111.61 1323.20 1050.02 271.12 2010-11 3254.98 240.77 346.30 1606.71 1178.44 271.12

In view of the good demand for the sugar and its attired products like rectified spirit, ENA, ETHANOL etc., the management has decided to undertake modernization/expansion of the existing equipment to enhance the crushing season 2009-10 and further expansion from 2000 TCD to 3500 TCD for the season 2010-11.

31

The company also proposes to setup new projects for the production of alcohol/ethanol from molasses and cereal gains with installed capacity of 65KLPC. The proposed distillery will mainly manufacture RS, ENA and impure Spirit using the available molasses from sugar cane crushing during the seasonal operation; Use of own/procured Molasses as required and use of cereal grains will be made during the off-season operation. Thus the design of distillery ensures optimum utilization of the manufacturing facilities. The company also proposes to setup another new project for the production of power by setting of Co-gen. plant with the installed capacity of 20 M W Using the Begasse available from the sugar plant.

THE ESIMATED OF THE PROJECTS ARE AS FOLLOWS:-

32

DESCRIPTION

SUGAR

DISTLR

CO-GEN

TOTAL

Site development Civil works& Buildings Plant & Machinery Miscellaneous Fixed assets Preliminary pre operative and start-up Expenses Provision for Contingency Margin of working capital Interest during Construction GRAND TOTAL MEANS OF FINANCE Term Loan

48.00 807.00 2814.00 235.00 400.00 128.00 1109.00 --5541.00 SUGAR 3324.00

25.00 675.00 3693.00 300.00 188.00 132.00 251.00 ---5264.00 DISTLR 3159.00

---730.00 7636.00 130.00 254.00 389.00 50.00 --9190.00 CO-GEN 5514.00

73.00 2212.31 14143.00 665.00 842.00 649.66 1410.00 ---19995.00 TOTAL 11997.00

Quasi equity from SDF Equity share Capital from MSL GRAND TOTAL

1662.30 554.10 5541.00

1579.00 526.00 5264.00

2757.00 919.00 9190.00

5998.00 1999.00 19995.00

The company has appointed renowned consultants M/s. Mitcon Constancy Services Limited, Pune for expansion and installation of sugar And Distillery and M/s. Avant-Grade Engineers and Consultants pvt. Ltd., Chennai for co-gen plant.

33

The above project cost has been estimated by them, keeping in view of the prevailing market rates. The above projects are expected to be commissioned by oct. 2008. The company has already finalized the DPR and is in the process of finalization of drawings for the equipment and placement of orders. The company has already placed order for boiler and steam turbines for co-gen plant. To part finance the above projects the company is proposing to apply for term loans form the banks and the financial institutions. The loans are proposed to repay with in 8 years with a moratorium period for 2.5 years from the date of 1st disbursement of the loan. The company is in existence for the last 4 years and earned reasonable profit from the date of its inception of taking over from the Pal air Co-Operative Sugar Ltd.

PRODUCTION SCENARIO:Product Bi-products : : : :

Sugar Beggese Molasses Filter cake

Baggese is used as firewood to run Boilers Molasses is used in the manufacturing of Distillers like Alcohol and spirits, Ethanol etc.,

Filter cake is used as manure for the agriculture.

SUGAR PRODUCTION DETAILS OF PMR SUGARS PROJECTS INDUSTIES:-

34

PARTICULARS 2006-07 CANE CRUSHED(M.T) 1,40,411 SUGAR PRODUCED(QTLS) 1,31,243 60,330 1,44,425 1,56,737 65,436,696 151,856,56 179,956.94 2007-08 2008-09 2009-10

SUGAR SOLD(QTLS) 4,341 STOCK OF SUGAR(QTLS) 1,26,902 72,601 131,420.34 1,01,454 1,14,631 88,749 1,83,171

OBJECTIVES OF THE COMPANY:

Manufacturing of white crystal sugar To promote the agriculturists in that particular area To utilize the harvest of sugar cane in that area Improving the cultivation methods through giving better support to the Formers Issuing loans to members for productive and other similes purposes To encourage self help thrift and co-operations among members To undertake such other activities as are incidental and conductive to The development of sugar cane, sugar and allied industries.

WELFARE MEASURES TO THE EMPLOYES:The following welfare measures are be provided by PMR Sugar for the employees.
35

Providing quarters (as per their category) Shoes for the purpose of safety measures One pair of uniform for every year for every employ If any employees met with the accident the management immediately give the first aid and take the patient to Khammam Govt. Head Quarters hospitals & provide two persons to assist them for during the hospitalization.

As per the order of the labour department i.e. assists commissioner of labour & deputy commissioner & deputy commissioner we have to pay the compensation to the person who met the accident

The factory management has been sanctioned towers the future expenses an amount of 500/- to the person who died artificially of accidentally

Their cases have been recommended to the labour department for the compensation as per the factory act

The management every year has been sanction productivity linked incentive (bonus) to employee for every year depending upon the percentage of the recovery. The labour department has been introduced the filarial fund to the employee and worker

of the factory.

PRODUCTION PROCESS:In the beginning of production process sugar canes are loaded in to a Container, cane carrier carries them in to cane kicker. It helps to maintain a uniform level of sugar canes; cane cutters cut the whole cane in to small pieces and even cut the layer of the cut cane those. Small pieces are sending in to crusher by crushing those small pieces of sugar cane more juice. Will be extracting the mill extract the more juice which goes to process of manufacturing of sugar. There will be 4mills in each mill there are three values. The prepared cane to 1st mill is called primary juice, like wise the primary baggage passes through remaining
36

3 mills either hot water or cold water both are used as maceration water which is used at the 4th mill for extraction of more juice.

Vacuum pans Condensation Water cooling system Cooling, curing and drying Sugar dryers Gardens Molasses weightiest Stream power plant (Boilers) Chimney Miscellaneous items Sugar muter Sugar elevators Diesel generation Final molasses Storage tank Furnace of oil storage tank Baggage elevator

CONTENTS (OR) RAW MATERIALS OF SUGAR: Sugar cane and Chemical


37

LIST OF CHEMICALS WHICH INVOLVES IN THE PRODUCTION PROCESS:

Burnt lime Sulphur (So2) Sodium exhamata phosphate Viscosity reducer Anti scalant Descalant Hydrogen peroxide

LIST OF MECHINERY WHICH INVOLVES IN THE PRODUCTION PROCESS:

Cane carrier Cane kicker Cane levellers Cane cutter Crusher Mills Juice heaters Juice sulphitation tanks Sulphur burner Filter presser Carbonation plant Evaporation plant Syrup treatment plan

ORAGANIZATIONAL CHART OF PMR SUGAR INDUSTRIES LIMITED

38

Gene ral Mana ger

Agric ulture

HR

Fina nce

Engi neeri ng

Civil

Proc ess

Elect rical

Pers onal GL Suga Cane Cane Store r & office Yard s Sales welfa re

Purc hase

Com pute r

Distil lery

HYD Offic e

Suga r lab

R& D CLP

Bio tech

Co2

lab

Myc horhi za

Secu rity

Etha nol

Time

Disp enso ry

Tran sport

IMPORTENCE&NEEDS OF THE STUDY:39

On this statement is an important financial tool for management in efficient short term of the financial planning of the company. In this PMR SUGAR INDUSTRIES LTD. was very important to maintain cash flow statement. These statements help to the management. In making the financing problems of the business much more manageable. Cash flow statement was used to company appraisal of different capital investing projects in order to determine their profitability. It is more useful to the company cash planning and short term analysis. Finally PMR SUGAR INDUSTRIES LTD the cash flow statement was maintained very important.

OBJECTIVES OF THE STUDY: To access information about the cash flows PMR Sugar Industries. To identify Sources to generate cash and cash equivalent and the needs of PMR Sugars Ltd. To show the causes of changes in cash balance from balance sheet dates. To show the factors contributing to the reduction of cash balance in-spite of increasing of profit or decreasing profit. It helps the management for planning the repayment of loans, credit arrangements etc., To know the financial position of the company.

SCOPE OF THE STUDY:40

The scope is limited to the operation of PMR SUGAR INDUSTRIES Ltd. The Given balanced sheets were of last 5 years. The present study is helpful to know the changes in assets and liabilities of PMR SUGAR INDUSTRIES Ltd

PERIOD OF STUDY

This study restricted 5 years from 2006-2007 to 2010-2011. For this study, various items of the financial statements published in annual reports have been considered for drawing conclusions.

METHODOLOGY UNDER STUDY:RESEARCH:


Research is an academic activity and as such the term should be used in a technical sense. According to Clifford woody research comprises defining and redefining problems, formulating Hypothesis or suggested solution; collecting, organizing and evaluating data, making deduction and reaching conclusion; and At last care fully testing the conclusions to determine whether they fit formulating the hypothesis.

DATA COLLECTION METHODS:SECONDARY DATA:The information that is collected for a purpose other than to solve the specific problem under investigation is known as secondary data.

41

The data has been collected from primary as well as secondary source. Primary data has been collected through interaction with company managers. Secondary data has been collected from books, publications web sites, and annual reports.

LIMITATIONS OF THE STUDY: The report of cash flow analysis in PMR sugar industries Ltd. As bone from past balance sheet, financial statements etc., as this sugar factory is one of the diversified activities of the whole PMR sugar limited being a division by its nature, it maintaining all records and operation relating to their units only. The accounting system is such that the registered office account is maintained in this factory and all the financial operations are carried on either by debiting or crediting the registered office account. The PMR Sugar industries Ltd. Registered office provides working capital every year according to the requirements are largely influenced by availability of crop, duration in the payment to the supplies of sugarcane and wages to the employees recruited during the production season.

In addition to that the factory raises funds from financial institutions and commercial banks by hypothecating sugar blocks on behalf of the PMR Sugar industries Ltd., registered office. These amounts are used to supplement working capital provided by registered office in manufacturing sugar during the season. In the light of the above facts, it is not possible for an analyst to prepare the accurate funds flow and cash flow statements in dictating the financial position of the company.

42

CHANGES IN WORKING CAPITAL FOR THE YEAR 2005-2006 TO 2006-2007


Figures in lakhs

Year 2005-06 2006-07 Particulars A. Current Assets 1. Inventory 2. Cash & Bank balances 3. Receivables 4.subsidiry receivables Loans & Advances 1. Advances to employees 2. Advances for purchases 3. Prepaid expenses

Working capital Increase Decrease

(Amount of (Amount of (Amount (Amount of Rs.) Rs.) of Rs.) Rs.) 1,06.057 49.891 701.18 16.78 60.68 12.78 1,44.227 53.265 697.09 11.01 48.23 10.64 38.170 3.374 4.09 5.77 12.45 2.14

Total Current Assets B. Current Liabilities 1.for Sugarcane purchase 2. For expenses Sundry Creditors a. Sundry Creditors b. Security Deposits

947.37 40.593 61.046 22.202 21.659

964.46 46.062 80.965 31.357 23.349 5.469 19.919 9.155 1.609

Total Current Liabilities Networking CapitalIncrease / decrease working capital

1,45.50 801.87

1,81.733 782.77 19.1

19.1

801.87

801.87

60.64

60.64

43

FUNDS FLOW STATEMENT FOR THE YEAR 2006-2007

Source of funds

Application of funds

Issue of shares Capital Loans

7429000 38000

Payment of loan Fixed asset

7955000 5,81,19,086

Reserve & surplus

2,56,90,675

Increase in Working capital

1963400

Differed tax liability Miscellaneous Differed tax Asset Capital W.I.P Funds from Operations

27,07,963 4,25,968 75,060 53,02,586 22943434

Payment of Fixed Deposits

503000

68540486

68540486

44

CASH FLOW STATEMENT FOR THE YEAR 2006-2007


Amount (in Rs.) 37988040 13881000 2525000 3699000 409000 577000 1245000 214000 3817000 337400 546900 1991900 915500 160900

Particulars CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax & extraordinary items Add:Miscellaneous expenses Reserves Surplus Depreciation Operating Profit Before Working Capital changes Add:Decrease In Receivables Decrease In Advances to Employees Decrease In Advances to Purchases Decrease In Prepaid Expenses Less:Increase In Inventory Increase in Cash Bank balances Decrease In Sugar Cane Purchase Decrease In Expenses Decrease In Sundry Creditors Decrease In Security Deposits Cash generated from Operating Activities(A) CASH FLOW FROM INVESTING ACTIVITIES Add:Decrease In Investment Less:Purchase of Fixed Assets Cash generated from Investing Activities(B) CASH FLOW FROM FINANCING ACTIVITIES Add:Issue of Share Capital Increase in Loans Less:Increase in Fixed deposits Repayment of Fixed Deposits Repayment of Loans Cash generated From Financing Activities(C) Net Increase in Cash (A+B+C) Opening Balance Closing Balance

Amount (in Rs.)

20105000 58093040

2445000 60538040

7769600 52768440

967000 15508000 (-)14541000 (-)14541000

7429000 38000 40000 503000 7955000

7467000

8498000 (-)1031000 37196440 4989100 42185540

45

INFERENCE: In this cash flow statement during the year 2006-2007 analysis of PMR Sugar Industries

limited source shows Net Increase in cash balance of Rs.37196440/ The Net profit of this is year is increased when compared to last year.
The cash generated from operating activities are positive and the balance available from

those activities is 52768440.


The cash generated from Investing activities are Negative and the balance available

from those activities is (-)14541000


The cash generated from Financing activities are Negative and the balance available

from those activities is (-)1031000


These negative balances occur because cash outflows of financing and investing

activities are high compared to cash inflows.

CHANGES IN WORKING CAPITAL FOR THE YEAR 2006-2007 TO 2007-2008


46

Figures in Lakhs Year 2005-06 2006-07 Particulars A. Current Assets 1. Inventory 2. Cash & Bank balances 3. Receivables 4.subsidiry receivables Loans & Advances 1. Advances to employees 2. Advances for purchases 3. Prepaid expenses Working capital Increase Decrease

(Amount of (Amount of (Amount (Amount of Rs.) Rs.) of Rs.) Rs.) 1,44.227 53.265 697.09 11.01 48.23 1.064 1,29.729 1,05.204 442.01 8.82 41.38 1.408 14.498 51.939 245.08 2.19 6.85 0.344

Total Current Assets B. Current Liabilities 1.for Sugarcane purchase 2. For expenses Sundry Creditors a. Sundry Creditors b. Security Deposits

954.85 46.062 809.65 31.357 23.349

728.55 43.943 828.08 25.138 27.101 2.119 18.43 6.219 3.752

Total Current Liabilities Networking CapitalIncrease / decrease working capital

910.42 44.43 151.28

924.26 195.71 151.28

195.71

195.71

52.97

290.8

FUNDS FLOW STATEMENT FOR THE YEAR 2007-2008

47

Source of funds

Application funds

of

Issue of shares Capital

7318000

Capital W.I.P

10157385

Loans

12624000

Purchase of Fixed 8302000 asset

Reserve & surplus

933000

Payment of Fixed 92000 Deposits

Miscellaneous Differed tax Asset Decrease in W.C

270000 .. 22049600 43194600

Funds Lost From Operations

24643215

43194600

CASH FLOW STATEMENT FOR THE YEAR 2007-2008


Amount (in Rs.) 24076532
48

Particulars CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax & extraordinary items

Amount (in Rs.)

Add:Miscellaneous expenses Reserves Surplus Depreciation Operating Profit Before Working Capital changes Add:Decrease In Inventory Decrease In Receivables Decrease In Advances to Employees Decrease In Advances to Purchases Increase In Sugar Cane Purchase Decrease In Sundry Creditors Less:Increase In Prepaid Expenses Increase in Cash Bank balances Decrease In Expenses Decrease In Security Deposits Cash generated from Operating Activities(A) CASH FLOW FROM INVESTING ACTIVITIES Add:Decrease In Investment Less:Purchase of Fixed Assets Cash generated from Investing Activities(B) CASH FLOW FROM FINANCING ACTIVITIES Add:Issue of Share Capital Increase in Loans Less:Increase in Fixed deposits Repayment of Fixed Deposits Cash generated From Financing Activities(C) Net Increase in Cash (A+B+C) Opening Balance Closing Balance

2673000 933000 4625000 1449800 24508000 219000 685000 211900 621900 34400 5193900 1843000 375200

8231000 32307532

27695600 60003132

7446500 52556632

1262000 8302000 (-)7040000 (-)7040000

7318000 12624000 6797000 92000

19942000 6889000 13053000 58569632 42185540 100755172

INFERENCE: In this cash flow statement during the year 2007-2008 analysis of PMR Sugar Industries

limited source shows Net Increase in cash balance of Rs. 58569632/ The Net profit of this is year is Decreased when compared to last year.
49

The cash generated from operating activities are positive and the balance available from

those activities is Rs.52556632/ The cash generated from Investing activities are Negative and the balance available

from those activities is Rs.(-)7040000/ The cash generated from Financing activities are Positive and the balance available

from those activities is Rs.13053000/ This negative balance occurs because cash outflows investing activities are higher than

the cash inflows.


Compared to the previous year utilization of cash balance is good because there is

increase in Net balance of cash.

CHANGES IN WORKING CAPITAL FOR THE YEAR 2007-2008 TO 2008-2009 Figures in Lakhs

50

Year 2006-07 2007-08 Particulars A. Current Assets 1. Inventory 2. Cash & Bank balances 3. Receivables 4.subsidiry receivables Loans & Advances 1. Advances to employees 2. Advances for purchases 3. Prepaid expenses Total Current Assets B. Current Liabilities 1.for milk purchase 2. For expenses Sundry Creditors a. Sundry Creditors b. Security Deposits Total Current Liabilities Networking CapitalIncrease / decrease working capital

Working capital Increase Decrease

(Amount (Amount of (Amount (Amount of of Rs.) Rs.) of Rs.) Rs.) 1297.29 152.04 442.01 14.08 8.82 41.38 2,855.62 439.43 828.08 251.38 271.01 1,789.90 1,065.72 325.00 1536.24 1337.89 399.00 14.19 6.31 80.32 3,373.95 480.25 813.11 403.02 286.85 1,983.23 1,390.72 238.95 285.85 43.01

2.51 38.94

40.82 14.97 151.64 15.84 325.00

1,065.72

1,065.72

606.21

606.21

FUNDS FLOW STATEMENT FOR THE YEAR 2008-2009

51

Source of funds

Application funds

of

Issue of shares Capital

7022000

Increase in W.C

2656700

Loans

37622000

Purchase of Fixed 19687000 asset

Reserve & surplus

806000

Capital W.I.P

174,52,783

Differed tax liability Miscellaneous Differed tax Asset Capital W.I.P Funds from Operations

..

Funds Lost From Operations

5653517

.. .. ..

45450000

45450000

CASH FLOW STATEMENT FOR THE YEAR 2008-2009


Particulars Amount (in Rs.) Amount (in Rs.)
52

CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax & extraordinary items Add:Miscellaneous expenses Reserves Surplus Depreciation Operating Profit Before Working Capital changes Add:Decrease In Receivables Decrease In Advances to Purchases Increase In Expenses Less:Increase In Inventory Increase In Prepaid Expenses Increase in Cash Bank balances Decrease In Sugar Can Purchase Decrease In Sundry Creditors Decrease In Security Deposits Cash generated from Operating Activities(A) CASH FLOW FROM INVESTING ACTIVITIES Less:Increase In Investment Purchase of Fixed Assets Cash generated from Investing Activities(B) CASH FLOW FROM FINANCING ACTIVITIES Add:Issue of Share Capital Increase in Loans Decrease In Fixed Deposits Less:Repayment of Fixed Deposits Cash generated From Financing Activities(C) Net Increase in Cash (A+B+C) Opening Balance Closing Balance

24076532 1831000 806000 2314000 4301000 251000 149700 2389500 3894000 2858500 408200 1516400 158400

4951000 29027532

4701700 33729232

11225000 22504232

1148000 19687000

(-)20835000 20835000

7022000 37622000 2455000 536000

47099000 536000 46563000 48232232 100755172 148987404

INFERENCE: In this cash flow statement during the year 2008-2009 analysis of PMR Sugar Industries

limited source shows Net Increase in cash balance of Rs. 48232232/53

The Net profit of this is year is Decreased when compared to last year.
The cash generated from operating activities are positive and the balance available from

those activities is Rs.52556632/ The cash generated from Investing activities are positive and the balance available from

those activities is Rs.20835000/ The cash generated from Financing activities are Positive and the balance available

from those activities is Rs46563000/ Compared to the previous year utilization of cash balance is good because there is

increase in Net balance of cash. And there is no negative balances like past.

CHANGES IN WORKING CAPITAL FOR THE YEAR 2008-2009 TO 2009-2010

54

Figures in Lakhs

Particulars A. Current Assets 1. Inventory 2. Cash & Bank balances 3. Receivables 4.subsidiry receivables Loans & Advances 1. Advances to employees 2. Advances for purchases 3. Prepaid expenses Total Current Assets B. Current Liabilities 1.for milk purchase 2. For expenses Sundry Creditors a. Sundry Creditors b. Security Deposits Total Current Liabilities Networking CapitalIncrease / decrease working capital

Year Working capital 20072008-09 Increase Decrease 2008 (Amount (Amount of (Amount (Amount of Rs.) of Rs.) Rs.) of Rs.) 1536.24 1337.89 399.01 6.31 80.32 14.19 3373.96 480.25 813.11 403.02 286.85 1,983.23 1390.73. 1353.55 712.18 557.11158.1 5.26 37.60 2.69 2668.39 884.30 1072.05 482.85 296.34 2732.54 64.15 1326.58 --182.7 625.71 -1.05 42.72 11.5

----

----1326.58.

404.05 258.94 79.83 9.49

1390.73

1390.73

1615.99

1615.99

FUNDS FLOW STATEMENT FOR THE YEAR 2009-2010

55

Source of funds

Amount

Application of funds

Amount

Issue of shares Capital

6206000

Increase W.C

in

Loans

1326000

Purchase of 8094000 Fixed asset Capital W.I.P .

Reserve & surplus

2627000

Differed tax liability

Payment Fixed Deposits

of

5730000

Miscellaneous Differed tax Asset

Capital W.I.P Decrease Capital in Working 5324200 49910800 65394000 65394000

Funds from Operations

CASH FLOW STATEMENT FOR THE YEAR 2009-2010


Amount (in Rs.) Amount (in Rs.)
56

Particulars

CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax & extraordinary items Add:Miscellaneous expenses Reserves Surplus Depreciation Operating Profit Before Working Capital changes Add:Decrease In Inventory Decrease In Advances to Purchases Increase In Prepaid Expenses Decrease In cash & Bank balances Decrease In Advance to Employees Less:Decrease In Expenses Decrease In Sugar Can Purchase Decrease In Sundry Creditors Decrease In Security Deposits Cash generated from Operating Activities(A) CASH FLOW FROM INVESTING ACTIVITIES Add:Decrease In Investment Less:Purchase of Fixed Assets Cash generated from Investing Activities(B) CASH FLOW FROM FINANCING ACTIVITIES Add:Issue of Share Capital Increase in Loans Less:Repayment of Fixed Deposits Decrease of Fixed Deposits Cash generated From Financing Activities(C) Net Increase in Cash (A+B+C) Opening Balance Closing Balance

468544 2321000 2627000 7996000

12944000 13412544

1820700 4272000 105000 6257100 1105000

13465300 26877844

2589400 4040500 798300 94900

7523100 19354744

8452000 8094000

8452000 8094000 358000

6206000 1326000 5730000 1774000

7532000

7504000 28000 19740744 148987404 168728148

INFERENCE: In this cash flow statement during the year 2009-2010 analysis of PMR Sugar Industries

limited source shows Net Increase in cash balance of Rs. 19740744/ The Net profit of this is year is Decreased when compared to last year.
57

The cash generated from operating activities are positive and the balance available from

those activities is Rs.52556632/ The cash generated from Investing activities are positive and the balance available from

those activities is Rs. 358000/ The cash generated from Financing activities are Positive and the balance available

from those activities is Rs. 28000/ Compared to the previous year there is decrease in Net balance of cash. There is no negative balances like past but there is decrease in net balance this is because of the effect of investing and financing activities.

CHANGES IN WORKING CAPITAL FOR THE YEAR 2009-2010 TO 2010-2011 Figures in Lakhs

58

Particulars A. Current Assets 1. Inventory 2. Cash & Bank balances 3. Receivables 4.subsidiry receivables Loans & Advances 1. Advances to employees 2. Advances for purchases 3. Prepaid expenses Total Current Assets B. Current Liabilities 1.for milk purchase 2. For expenses Sundry Creditors a. Sundry Creditors b. Security Deposits Total Current Liabilities Networking CapitalIncrease / decrease working capital

Year Working capital 20082009-10 Increase Decrease 2009 (Amount (Amount of (Amount (Amount of Rs.) of Rs.) Rs.) of Rs.) 1353.55 712.18 557.11 5.26 37.60 2.69 2668.39 884.30 1072.05 482.85 296.34 2732.54 64.15 46.95 1782.6 904.1 491.66 6.8 30.50 6.6 3222.26 1159.4 1359.9 467.73 349.5 3336.5 114.24 429.1 191.9 -1.6 -4 275.1 287.9 15.1 -1204.7 . --65.45 -7.1 ----53.2 125.725

114.24

114.24

1078.97

1078.97

FUNDS FLOW STATEMENT FOR THE YEAR 2010-2011

59

Source of funds

Amount

Application of funds

Amount

Issue of shares Capital Loans

6206000 1326000

Increase W.C

in

Purchase of 8094000 Fixed asset Capital W.I.P .

Reserve & surplus

2627000

Differed tax liability

Payment Fixed Deposits

of

5730000

Miscellaneous Differed tax Asset Capital W.I.P Decrease Capital in

Working 5324200 49910800 65394000 65394000

Funds from Operations

CASH FLOW STATEMENT FOR THE YEAR 2010-2011


Amount (in Rs.) Amount (in Rs.) 468544
60

Particulars CASH FLOW FROM OPERATING ACTIVITIES Net profit before tax & extraordinary items

Add:Miscellaneous expenses Reserves Surplus Depreciation Operating Profit Before Working Capital changes Add:Decrease In Receivables Decrease In Advances to Purchases Increase In Expenses Increase In Sugar Cane Purchase Increase In Sundry Creditors Less:Increase In Inventory Increase In Cash&Bank balances Increase In Advances to Employees Increase In Prepaid Expenses Decrease In Sundry Deposits Cash generated from Operating Activities CASH FLOW FROM INVESTING ACTIVITIES Add:Decrease In Investment Less:Purchase of Fixed Assets Cash generated from Investing Activities CASH FLOW FROM FINANCING ACTIVITIES Add:Issue of Share Capital Increase in Loans Less:Repayment of Fixed Deposits Decrease of Fixed Deposits Cash generated From Financing Activities Net Increase in Cash (A+B+C) Opening Balance Closing Balance

2321000 2627000 7996000 6545000 701000 2870900 2750100 150100 4290100 1910900 106000 4000 530200

12944000 13412544

13017100 26429644

6841200 19588444 8452000 8094000 358000

8452000 8094000

6206000 1326000 5730000 1774000

7532000 7504000 28000 19974444 168728148 368502592

INFERENCE: In this cash flow statement during the year 2010-2011 analysis of PMR Sugar Industries

limited source shows Net Increase in cash balance of Rs. 19974444/ The Net profit of this is year is Decreased when compared to last year.
61

The cash generated from operating activities are positive and the balance available from

those activities is Rs. 19588444/ The cash generated from Investing activities are positive and the balance available from

those activities is Rs. 358000/ The cash generated from Financing activities are Positive and the balance available

from those activities is Rs. 28000/ Compared to the previous year there is increase in Net balance of cash.

There is no change in investing and financing activities but there is change in operating activities.

FINDINGS:

The current assets is decreased on 2005-2010 the company indicates

efficiency in management also it indicates high profitability.

Debts also increased and decrease format to be PMR sugar industry

limited.
62

Changing working capital is decreased format to2006, 2009, 2010 to be

maintained adequate cash balance.

Finally PMR sugar industry was maintain net cash operating activity.

SUGGESTIONS:

S.T. Scenario has been studied it has observed the Indian occupied

fourth position in world sugar industry . MSL has taken over one of the sick unit i.e., PCs, and able to make the

sick unit as a prosperous one.

Cash Flow Statement has been prepared to know about the movement of

cash during 2005-09. It has been observed the MSL is processing unit of sugars required more

liquid assets specifically cash required has immediately company has to pay the amount to formers

From the data analysis it has been maintain find out PMR Sugars Ltd. Is

able to maintain the adequate cash balance of the company 2006-07, 2007-08, 2008-09, and 2009-10. From the study it has been observed that the company has taken sick

unit in to prosperous one, but facing certain problem. To be faced in this company maintain cash balance for the year to year. Form this company has to creates contingents funds for meeting any kind of situation has the company is AGRI based company

In this company was maintaining to the cash balance in very importance

to him. It was very used to the growth of the company.

63

CONCLUSIONS: The financial statement analysis provides a clear picture about the financial position, profitability, liquidity, solvency and the application of financial sources of an organization. The financial management has to formulate wide varieties of plans and polices regarding total assets and total liabilities with respect to movement. The financial management is also called as custodian of financial resources of the investors. Therefore the financial management should take care of all available resources and make them into real and exact application. The financial department works as watch dog. The financial statement analysis acts as a supplier in distribution of all the financial information inputs which are playing a vital role in the managerial decision-making. The organization is the composition of different departments as marketing, human resources, production etc. However the activities of the entire organization are also around the financial department. The financial department is concluded as an important wing in the organization through its distinct nature explained by the financial statement analysis.

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