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AN ANALYSIS OF FINANCIAL OPERATIONS OF UNIROYAL MARINE EXPORTS LTD, VENGALAM, CALICUT

PROJECT REPORT Submitted In Partial Fulfillment of the Requirements for the Award of the Degree of MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted by

Under the Guidance of

DEPARTMENT OF MBA, JAWAHARLAL COLLEGE OF ENGINEERING AND TECHNOLOGY, LAKKIDI, OTTAPPALAM September - 2011

OBJECTIVES OF THE STUDY


To study the profitability and liquidity of the firm To analyze the changes in working capital during the period To compare financial performance of different periods

SCOPE OF THE STUDY The scope of the study includes an analytical study of financial operations with regards to UME LTD. It is necessary to analyze financial performance to understand more about profitability and financial position of the business. This study will give an exact picture of the company and will help the management to take managerial decisions. It can also be used for the purpose of comparative study of the similar industries.

RESEARCH METHODOLOGY Research simply means searching for knowledge. Research Comprises Defining And Redefining Problems, Formulating Hypothesis Or Suggested Solutions; Collecting, Organizing & Evaluating Data; Making Deductions And Reaching Conclusions; And At Last Carefully Testing The Conclusions To Determine Whether They Fit The Formulating Hypothesis CLIFFORD WOODY Methodology can be the analysis of the principles of methods, rules, and postulates employed by a discipline, the systematic study of methods that are, can

be, or have been applied within a discipline. It depends on the objectives of the study. RESEARCH PROBLEM The research problem in this study is to analyze the financial operations of UNIROYAL MARINE EXPORTS LIMITED.

RESEARCH DESIGN The research use facts or information area by available to analysis and evaluate material, so it is descriptive and is more of the analytical in nature. The study is primarily based on the internal records and the annual reports of the company. PERIOD OF STUDY The study period consist of 5 years. ie, the financial statements of the year ending March 2007 to March 2011. DATA COLLECTION PRIMARY DATA Data directly collected by the researcher, with respect to problem under study, is known as primary data. Primary data is also the first hand data collected by the researcher for the immediate purpose of the study. It is collected through unstructured interviews with officers of the company SECONDARY DATA Secondary data are statistics that already exists. It collects from the following Company Reports and Records

Journals and Books Internet TOOLS AND TECHNIQUE USED Ratio Analysis Comparative Statement Analysis Statement of Changes in Working Capital LIMITATIONS OF THE STUDY
Lack of adequate time for study

3.1

INDUSTRY PROFILE

India with a large wart line of 8129 km of exclusive economic zone and 1.2 million hectors of brackish water bodies, offers vast potential for development of fisheries. Against an estimated potential of 3.9 million tons are tapped. MARINE FISHERIES IN INDIA The fisheries sector occupies a unique status in the national economy and provides employment opportunities and food and nutritional security in the last 50 years. The growth in marine fisheries sector has been rather slow during the nineties when compared to the previous decades. The geographic base of Indian marine fisheries has 8118 km. coastline, 2.02 million sq. km of Executive Economic Zone (EEZ) including 0.5 million sq. km of continental shelf and 3937 fishing villages. There are 1896 traditional fish landing centres, 33 minor fishing harbours and 6 major fishing harbours which serve as bases for about 2,08,000 traditional non-motorized craft 55,000 small scale beach- landing craft fitted with outboard motors, 51250 mechanized craft (mainly bottom trawlers and purse-seiners) and 180 deep sea fishing vessels and out of which 80 are in operation. The post-harvest infrastructure consists of freezing plans, canning plants, ice making plants, fish meal plants, cold storage and peeling sheds which together cater to a sizable, labour force of one million people engaged in fishing and another 0.8 million in post harvest operations. A large number of scientists, technocrats and other organized categories of personnel are involved in research, education, technology development and administration in marine fisheries. The estimated first value of the marine fish landings in the year 2000 was Rs. 10,200 core. There is a lucrative and organized sea food export trade with the value of the export exceeding Rs. 6300 core.

A large number of fin fish and shell fish stock principally consisting of sardines, Bombay- duck, ribbonfish Indian mackerel, coastal tunas, ser fishes, pealed and non-pealed shrimps, stompatopoda, croakers, threadfin breams, silver bellies and carangids trevallies, leather jackets, scads and horse mackerel are exploited using different craft and gear combinations. Marine fisheries within the territorial waters are the subject of maritime states whereas fisheries beyond this limit within the EEZ fall in the jurisdiction of central government besides playing an advisory role also provides funding support to the state/ union territories for implementation of central sector and Centrally Supported Schemes. The policy initiates are required not only for making marine fisheries sustainable and responsible, but also globally competitive so that Indian producers stand to gain in international markets. The global scenario with respect to marine fisheries is rapidly changing with major developments in harvesting and processing technology and consequent expansion of global markets for fish and fishery products. The ministry of agriculture has been paying due attention in the past decade to the development of deep sea fishery in the country. The declaration of EEZ in 1976 facilitated exploration, exploration and utilisation of marine living resources in the sea around India extending to 200 nautical miles, thereby giving the nation immense opportunities and challenges to harvest the resources and to manage them on sound scientific basis. The past three decades have witnessed rapid initiatives by the govt and private agencies in the marine fisheries sector of the country. On realisation that most of the deep sea fishery resources beyond the conventional fishing limit and fishing capability of the indigenous craft can be gainfully exploited only if the upgraded and sophisticated vessels of adequate size and capabilities are inducted into the fishery and mobilization of capital and expertise indigenously to achieve this was found difficult in short span of time, the Govt addressed this issue in 1981 Charter Policy.

After the expiry of five years of operation of this policy, the govt revised the policy to rectify the deficiencies noticed during its operation and to make it more beneficial to the country. Accordingly a revised 1986 Charter Policy envisaged acquisition of vessels by the Indian Companies either through import / construction in India or through joint venture etc. As a result of the above Charter Policy, 97 companies were permitted to operate 311 foreign fishing vessels. Besides augmenting the marine fish production in the country, the policy also facilitated greater inflow of foreign exchange through export of fish caught by these vessels. All these vessels were operating on 100 % EOU basis. The Govt of India subsequently constituted a few Committees to gather inputs on availability of the fishing craft, status of marine fishing resources, issues relating to the various stakeholder groups etc. The marine fishing policy announced by Govt. of India in the past focussed only on the developmental needs o the deep sea sector, leaving aside similar issues pertaining to the coastal sector to the respective marine states/ UTs. Even though substantial assistance was channelized through Central and Centrally Sponsored Schemes in to the state/ UTs for the development of coastal fisheries, non existence of an integrated policy for this sector was found to hamper fulfilment of the national objectives. Therefore in the present policy the Govt seeks to bring the traditional and coastal fisherman also in to the focus together with stakeholders in the deep sea sector so as to achieve harmonized development of marine fishery both in the territorial and extra territorial waters of our

Country. The theme of comprehensive marine fishing policy is enshrined in the National Agriculture policy promulgated by the govt. it is significant that the new policy is being pronounced during the initial years of the X five. A large proportion of coastal fish stocks are exploited, leaving under exploited resources in the deeper seas. Out of about 54000 Mechanized Fishing Vessels (MFVs) below 20m overall (OAL) length, a majority is engaged in

trawling and a sizable percentage operates in the near shore water resulting in pressure on the coastal stocks. However, opportunities exist for pelagic stocks, out of a 1.2 million tonnes about 871000 tonnes are estimated to be in the non oceanic zone. The govt has allowed entry of resource- specific fishing vessels such as tuna long liners, mid- water trawlers, hood and lie, and the like (procured mainly on deferred payment basis) and about 80-85 such vessels are presently operating in deeper water of the Executive Economic Zone (EEZ) to tap the available potential. EXPORT OF MARINE PRODUCTS Export of fish and fishery products India commenced in 1953 with one export of small consignment of frozen shrimp from Cochin, India is the major producing country among the world nation. Out of the total fish production of about 2.5 million tonnes less than 5 % is exported, while the rests sold in domestic market for direct human consumption. The fish freezing in the country is almost entirely export oriented and frozen fishery products contributed 95 % of foreign exchange. Prawn squid and cattle fish constitute important items of the fishery resources of our country. From the economic point of view prawn and cephalopods occupy the top rank as the backbone of sea food export industry of the country.

1.2

COMPANY PROFILE

INTRODUCTION

Uniroyal Marine Exports is an export oriented public limited company. It was incorporated in August 1992 for setting up a modern sea food factory for the processing and export of value added marine products to USA, the European Union and the Far East. The sea food industry was at the time, considered to be one of the 'Sunrise industries with a golden future and an assured export market. The company has build up a good market for its various products in Europe. It is one of the few factors in the country enjoying Green Channel status for export of cooked products in to US and also approved for export of frozen fishery products in to the European Union. UME LTD is one of the well known companies in the field of marine exports. It was formulated as public limited company. The company is located at Vengalam village, near kozhikode. It is very close to the largest fishing harbors in Beypore and Puthiyappa. The Company started as 100 percent export oriented unit and late in 2003 onwards. The company gains the UME status and has been enjoying the Export Promotion Capital Scheme. Their products are well known in the foreign market in the brand name "ROYAL GOLD". They produce and export items according to the order received from abroad.

THE MAIN OBJECTIVES OF COMPANY

As per company's memorandum of association, the main objective of the company is to carry on the business of purchasing, caring, canning, freezing, selling, exporting, and dealing in marine products.

BANKERS

THE FEDERAL BANK LTD, KOZHIKODE-673011 UCO BANK, KOZHIKODE-673001

WEBSITE EMAIL

: :

WWW.UNIROYALMARINE.COM umeltd@eth.net 91-0496-2633783

FAX NUMBER :

BOARD OF DIRECTORS CHAIRMAN MANAGING DIRECTOR DIRECTORS : IYPE MATHEW : ANUSH.K.THOMAS : K.C.THOMAS : V.MOHANLAL : VARGHESE THOMAS : V.T.JOHN : NATH RAM : P.SHRINIVAS CHIEF EXECUTIVE COMPANY SECRETARY : THOMAS.P.KOSHY : V.BALACHANDRAN

THE MAIN MARKETS USA, TAIWAN, JAPAN, ITALY, BELGIUM, GERMANY, FRANCE,

KUWAIT, QATAR CAPITL STRUCTURE The company issued only equity shares at a nominal value of Rs.10/-each. The company went for public issue in august 1993. The company shares are issued at Cochin Stock Exchange, Delhi Stock Exchange and Bombay Stock Exchange. Their authorised share capital was 80, 00, 000 equity shares @ Rs. 10 each Rs. 800, 000, 000 ISSUED / SUBSCRIBED / PAID UP CAPITAL 65, 00, 000 Equity shares @ Rs. 10/- each subscribed and paid up as follows: a. 33, 00, 000 Equity shares issued to public 000 b. 32, 00, 000 Equity shares held by promoters and associates-Rs. 3, 20, 00, 000 Total - Rs. 6, 50, 00, 000 Rs. 3, 30, 00,

ORGANISATIONAL STRUCTURE
MANAGING DIRECTOR

GENERAL MANAGER

CHIF ENGI NEER

PRODUCTION MANAGER

ACCOUNTS MANAGER

COMPANY SECRETARY

SHIFT-INCHARGE ASSISTANT SANITATION-INCHARGE

QUALITY CONTROL DEPARTME NT

ASSISTANT

SUPERVISORS

TECHNOLO GISTS

WORKERS ASSISTANTS

SHIPMENT EXICUTIVE

PURCHASE EXECUTIVE

TIME OFFICE-INCHARGE

Fig. 3.2.1

3.3

PRODUCT PROFILE

SHRIMPS PRODUCTS Head-on-shrimps Head-less-shrimps Head-less-shrimps blanched Peeled and undeveined shrimps Peeled and undeveined shrimps Blanched Peeled and cooked shrimps Peeled and deveined shrimps Peeled and deveined shrimps blanched

SQUID PRODUCTS Squid whole Squid whole cleaned Squid tentacles Squid tube Squid rings

Squid ring blanched Squid tentacles blanched Squid ring tentacles

Table No. 3.3.1

CUTTILE FISH PRODUCTS Cuttle fish whole Cuttle fish whole cleaned Cuttle fish tentacles Cuttle fish strips blanched

OCTOPUS PRODUCTS Octopus while gutted Octopus ring blanched Octopus tentacles v-cut blanched

Table No.3.3.2

FROZEN FISH PRODUCTS Ribbon fish Mackerel Sea fish whole Sea fish whole gutted Reef cod whole Reef cod gutted

FROZEN LOBSTER PRODUCTS Deep sea lobster whole Deep sea lobster tails

Table No. 3.3.3 FUNCTIONAL DEPARTMENTS

1. PURCHASE DEPARTMENT The company has a department headed by the purchase manager. The main duty of the purchase manager is the procurement by raw materials which are required for processing. In addition to this the functioning of the peeling sheds, where the pre-processing of materials is taken place are also comes under the direct control of the purchase manager. Purchase agents make direct purchase from direct fisherman. They get commission on the basis of purchase made by them. There are 5 purchase assistants to help the purchase manager in performing his duties. There are shed supervisors to look after the affairs of the peeling sheds. The raw materials required for processing are shrimps and fish. The production manager who gives details of raw material required such variety,

quantity; grade.etc. Purchase is made according to the demand of purchase department.

2. PRODUCTION DEPARTMENT

UME LTD has a separate department for production under the guidance of production manager. It converts input in to output. The company works 24 hours a day. The processing is done in 3 shifts. Each shift is headed by a shift-incharge.1 shift consist of 70 processing girls, 10 male workers and 7 production supervisors. The function of production department includes the following. 1. Grading of materials 2. Processing of materials 3. Packing of processed materials 4. Storage of processed materials The processing of materials is done according to the specification of buyer. Company's previous year's production was 1524 Million Ton.

3. ENGINEERING DEPARTMENT The company has machines and equipments for their functioning. It must be properly maintained and repaired. Otherwise the entire production will be stopped. For this purpose, there is an engineering department headed by a chief engineer. He manages the maintenance function. The main function of this department is to keep the plant and equipment in good working condition. The department works 24 hours a day as per the production shift. It ensures continues supply of power, water, etc.

4. TIME KEEPING DEPARTMENT The office-in-charge is the head of the department. The time officers, drivers, and cleaners, are working under him. The person who enters to the production plant and back from there should report first at the time office. Vehicles are used for transportation of goods are under the supervision of time officer. So it also records the arrival and departure of vehicles which are used for carrying goods.

5. ELECTRONIC DATA PROCESSING DEPARTMENT

Electronic data processing-in-charge is the head of this department. The Uniroyal Marine Export 3imited is not fully computerised. But its 80% of functions are computerised. Finance and share department are fully computerised. Only quality and quantity aspects are entered in the computer in the production department.

6. QUALITY CONTROL DEPARTMENT The quality control manager is the head of this department. The main function of this department is to check the quality after every process. The department conducts various inspection testing. Better quality means reduced cost of repairs, instructions and rework and product warrantees. Increased productivity results in better profits and builds customer loyalty. Quality control is done mainly with intention to prevent the defect in manufacturing so that items may be made right at the first time and not to be

rejected later. In order to achieve this end several activities need to be performed. There must be inspection and control of incoming raw material to ensure that they meet specification; there must be planning and control of manufacturing process to ensure that suitable methods are being used and that equipments are performing satisfactory; there must be in process inspection to ensure that items being fabricated meet specification.

7. STORES DEPARTMENT

After the inspection of purchased materials they have to be taken in to store. FUNCTIONS AND RESPONSIBILITIES OF THE DEPARTMENT Receiving the raw materials. Providing adequate storage preservation of various items. Issuing material against authorized requisition. Carry stock out verification. Entering receipts in various documents.

Stores department is headed by store-in-charge officer. Stores department works 24 hours. The department is divided into 3 sections.

8. FINANCE DEPARTMENT Finance department deals with the costing and accounting activities of enterprise. Financial records reveal the actual profit of business and real financial position. It provides details of fund flow of the organization. In UME LTD, there is one account manager and in each unit they have assistant account managers.

Two basic financial statements are prepared for the purpose of external reporting. a. Balance sheet b. Profit and loss account. These statements are recorded in the company's annual report. For internal management purpose planning and controlling much more information than contained in the public financial statement is to assist in decision making. Export cost includes freight also. The company's technical know-how and preliminary expenses are written off over a period of 10 years.

Capital structure

share capital

loans fund

reserve surplus

equity share capital promoter banker employer public secured loan unsecured loan

9. SHARE DEPARTMENT Share department deals with the further issue of shares, issue of share certificate, call of shares, forfeiture of share, conduct general meeting and declaring dividend as well as keeping necessary books and documents.

10. MARKETING DEPARTMENT

Marketing occupies very important role in the company. Because it identifies, anticipates, and satisfies the customer's requirements profitably. Marketing procedure The company receives order from buyers. Orders may be collected either by company or trade agents. These agents collect orders from importers and place the same with exporters. These agents are known as Indent houses; charge a commission on the orders placed by them. In UME, the direct sale is rare. Direct sales can be made through the presentation of products in trade fares, etc.

11. PUBLIC RELATION DEPARTMENT Public relation officer is the head of this department. PRO coordinates the activities of the internal department of marketing, production, quality control, accounting, government or private departments like customs & excise, export inspection agencies, JDGET(Joint Director General of Foreign Trade), shipping lines, SGS, Lloyd's, J.B.Boda, etc for the smooth function of the Export/Import.

ANALYSIS AND INTERPRETATION

LIQUIDITY RATIOS A. CURRENT RATIO Current Ratio= Current Assets Current Liabilities Rs in lakhs Year Current Assets Current Liabilities Current Ratio 2008 2009 2010 2011 2012 Mean 837.164 260.774 3.202

639.87 703.49 880.15 928.44 1033.87 239.06 253.19 256.54 242.14 2.67 2.78 3.43 3.83 312.94 3.3

Ratio
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2007 2008 2.67 2.78

Current Ratio
3.83 3.43 3.3

Current ratio

Year
2009 2010 2011

Inference The current ratio shows an increasing trend from 2008 to 2011. But in 2012 it reduced. The mean current ratio 3.2:1 which is favorable compared to the ideal current ratio 2:1. This shows that the firm is able to meet its short term obligation.

LIQUID / QUICK RATIO Liquid/ Quick Ratio = Quick/Liquid Assets Current liabilities Quick/ liquid Assets = Current Assets- Inventories Rs in lakhs Year Quick Assets Current Liabilities Quick Ratio 2008 142.72 2009 150.6 2010 138.4 2011 2012 Mean

152 262.46

239.06 253.18 256.54 242.14 312.94 0.597 0.595 0.54 0.628 0.84 0.64

Ratio
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2007 2008 0.597 0.595

Quick Ratio
0.84 0.628 0.54 Quick Ratio

Year
2009 2010 2011

Inference From the above table and chart the liquid ratio of the company is decreasing from 0.59 in 2008 to 0.54 in 2010 and it shows an increase trend from 0.63 in 2011 to 0.84 in 2012. The ideal quick ratio is 1:1. Therefore the firm will not be able to pay off its current liabilities when they become due.

ABSOLUTE LIQUID RATIO

Absolute Liquid or Cash Ratio = Absolute Liquid Assets Current Liabilities Absolute Liquid Assets = Quick assets (Debtors + Receivables) Rs in lakhs Year Absolute Liquid Assets Current liabilities Absolute Liquid Ratio 2008 118.2 2009 87.46 2010 36.54 2011 45.27 2012 79.86 Mean

239.06 253.18 256.54 242.14 312.94 0.5 0.35 0.14 0.2 0.25 0.288

Absolute Liquid Ratio


0.6 0.5 0.4 0.3 0.2 0.1 0 2007 2008 2009 2010 2011 0.14
year Ratio

0.5 0.35 0.25 0.2 Absolute Liquid Ratio

Inference

The Absolute Liquid Ratio is decreasing from 0.5 in 2008 to 0.14 in 2010. Then it increases to 0.25 in 2012. This shows the absolute liquid ratio of the firm is harmfully low than the ideal ratio 1:2.

B. PROFITABILITY RATIO GROSS PROFIT RATIO Gross Profit Ratio = (Gross Profit Net Sales)*100 Gross Profit= Net Sales - (cost of goods sold+ Freight)

Year Gross Profit Net Sales Gross Profit Ratio (in %)

2008 294.87 2912.1 8 10.13

2009 306.4 2432. 1 12.6

Rs in lakhs 2010 2011 506.9 2709.6 9 18.71 275.71 1993.7 6 13.83

2012 321.36 2543.2 3 12.64

Mean

13.58 2

Gross Profit Ratio


20 15 10.13 10 5 0 2007 2008 2009 2010 2011 Gross Profit Ratio (in %)
Ratio

18.71 13.83

12.6

12.64

Year

Inference The Gross Profit Ratio has a fluctuating trend. It increases from 10.13% in 2008 to 18.71% in 2010. In 2010 it reaches at highest level and then starts to decrease up to 12.64% in 2011. The mean GP Ratio is 13.58% which is not favorable compared to ideal ratio which is 20%- 25%.

NET PROFIT RATIO Net Profit Ratio = (Net Profit After Tax Net Sales) * 100

Rs in lakhs Year Net Sales Net Profit Net Profit Ratio (in %) 2008 2009 2010 2011 2012 Mean

2912.18 2432.1 2709.69 1993.76 2543.23 -8.05 -0.27 11.33 0.46 11.52 0.43 22.07 1.12 31.48 1.24 0.596

Ratio

Net Profit Ratio


1.12 1.24

1.4

1.2
1 0.8 0.6 0.4 0.2 0 -0.2 -0.4 2007 2008 -0.27 2009 0.46 0.43

Net Profit Ratio(in%)

2010

2011

Year

Inference The Net Profit Ratio is negative in 2008. Then it became positive in 2009. It comes to 1.24 % in 2011. The ratios show a fluctuating trend. The company should increase its sales and reduce cost for increasing the net profit. This is not at a satisfactory level while compared to the ideal N/P Ratio 5 %-10 %.

OPERATING RATIO Operating Ratio = (Operating Cost Net Sales) * 100 Operating Cost = Cost of goods sold + Administration, Selling & financial Expenses

Rs in lakhs Year Net Sales Operating Cost Operating Ratio (in %) 2008 2009 2010 2011 2012 Mean

2912.18 2432.1 2709.69 1993.76 2543.23 2626.6 2191.4 90.19 90.1 2258.8 83.36 1777.9 89.2 2272.1 89.34 88.438

Ratio 92 90 88 86 84 82 80 78

Operating Ratio
90.19 90.1 89.2 89.34

83.36

Operating Ratio (in %)

Year 2007 2008 2009 2010 2011

Inference The ratio decreased to 83.36 % in 2010 and then increased up to 89.34% in 2012. Operating of firm has decreased. Average operating ratio is 88.44 %. The ideal rate is 75%.- 85 %. Therefore it is in good position.

OPERATING PROFIT RATIO Operating Profit Ratio = (Operating Profit Net Sales) * 100 Operating Profit = Net Sales- Operating Cost

Rs in lakhs Year Net Sales Operating Profit Operating Profit Ratio (in %) 2008 285.58 9.8 2009 240.7 9.9 2010 450.89 16.64 2011 215.86 10.83 2012 271.13 10.66 11.566 Mean 2912.18 2432.1 2709.69 1993.76 2543.23

Ratio 18 16 14 12 10 8 6 4 2 0 2007 2008 9.8 9.9

Operating Profit Ratio


16.64

10.83

10.66 Operating Profit Ratio (in %)

Year 2009 2010 2011

Inference Operating Profit Ratio is increased up to 16.64% in 2010 and then started decreasing. The mean rate 11.56 is satisfactory.

Particulars

2007

2008

Increase/ Decrease Rs)

Increase/ Decrease (%)

COMPARATIVE BALANCE SHEET OF UME LTD AS ON MARCH 31, 2007 AND 2008

CAPITAL AND LIABILITIES Share holders Funds Share Capital Reserves and Surpluses Total Long Term Funds Secured Loan Unsecured Loan

64888500 2427842 67316342

64888500 2427842 67316342

0 0 0 2523895.95 -196152 2720047.95 585895.7 825526 1411421.7 1308626.25

0 0 0

30590345.6 28066449.62 18071543.3 17875391.3

-8.25 -1.08 -5.59 2.79 28.36 5.9 -0.94

Total 48661888.9 45941840.92 20995220.4 21581116.05 Current Liabilities 2911108 3736634 Provisions Total 23906328.4 25317750.05 Total ASSETS Fixed Assets Gross Block Less: Depreciation Net block Add: Capital Work In Progress Total Investments Current Assets Loans and Advances Inventory Sundry Debtors Cash and Bank Balances 139884559 138575933

119657047 120069322.4 412274.96 82329671.1 89134314.94 6804643.86 37327376.4 30935007.47 -6392368.9 145000 37472376.4 15000 NILL NILL NILL

0.35 8.26 -17.13 0 0 0

49714541.6 55305052.28 5590510.65 2454942 6313596.5 3858654.5 4429751.96 5009445.16 579693.2 3651649.91 6377208.44 0 1133465.76 1308626.22

11.25 157.18 13.1 -49.43 9.96 0 -4.14 -0.94

Loans and Advances 7387934.87 3736284.96 Total 63987170.5 70364378.9 Deferred Tax Asset 11032784.4 11032784.36 Profit and loss A/C Total 27377228 26243762.24 139884559 138575933

Inference Fixed assets have been reduced by 17.13% during 2008. The current assets have been added by 9.96%. It implies better asset management. Current liabilities increased by 2.79% The general financial structure of company in not good

COMPARATIVE BALANCE SHEET OF UME LTD AS ON MARCH 31, 2008 AND 2009

Particulars CAPITAL AND LIABILITIES Share holders Funds Share Capital Reserves and Surpluses Total Long Term Funds Secured Loan Unsecured Loan Total Current Liabilities Provisions Total Total ASSETS Fixed Assets Gross Block Less: Depreciation Net block Current Assets Loans and Advances Inventory Sundry Debtors Cash and Bank Balances Loans and Advances Total Deferred Tax Asset Profit and loss A/C Total Inference

2008

2009

Increase/ Decrease (Rs)

Increase/ Decrease (%)

64888500 2427842 67316342

64888500 2427842 67316342

0 0 0

0 0 0 6.85 -53.31 -16.56 1.91 -2.01 1.33 -5.25

28066449.62 29988802 1922352.38 17875391.3 8345586.3 -9529805 45941840.92 38334388.3 -7607452.62 21581116.05 21992775.37 411659.32 3736634 3661437 -75197 25317750.05 25654212.37 336462.32 138575933 131304942.7 -7270990.3

120069322.4 120774746.4 89134314.94 95756842.94 30935007.47 25017903.47

705424 6622528 -5917104

0.59 7.43 -19.13

55305052.28 74176969.13 18871916.85 6313596.5 10183955.5 3870359 5009445.16 151372.56 -4858072.6 3736284.96 3503004.95 -233280.01 70364378.9 88015302.14 17650923.24 11032784.36 3547450.61 -7485333.75 26243762.24 14724286.45 11519475.79 138575933 131304942.7 -7270990.3

34.12 61.31 -96.98 -6.24 25.1 -67.85 -43.89 -5.25

During the period there has been a decrease in fixed assets by Rs 5917104 i.e, 19.13 % while the long term liabilities to outsiders have decreased by Rs. 7607452.62 ie, 16.56 %. This indicates the fixed assets have been financed from long term sources.

Current assets loans and advances have gone up by Rs 17650923.24 ie, 25%. There has 4858076, ie, 96.9 %. been a decrease in cash and bank balances by Rs

Current liabilities and provisions have increased Rs 336462, ie, 1.33 %. This shows that the current assets of the company having improvement and there by the liquidity position of the company will increase.

COMPARATIVE BALANCE SHEET OF UME LTD AS ON MARCH 31, 2009 AND 2010

Particulars CAPITAL AND LIABILITIES Share holders Funds Share Capital Reserves and Surpluses Total Long Term Funds Secured Loan Unsecured Loan Total

2009

2010

Increase/ Decrease (Rs)

Increase / Decreas e (%)

64888500 2427842 67316342 29988802 8345586.3 38334388.3 21992775.3 7 3661437 25654212.3 7 131304942. 7

64888500 2427842 67316342 29697846 8940281.3 38638127.3 20494257.2 2 3719265 24213522.2 2 130167991. 5

0 0 0 -290956 594695 303739 1498518.1 5 57828 1440690.1 5 1136951.1 5

0 0 0 -0.97 7.13 0.79

Current Liabilities Provisions

-6.81 1.58

Total

-5.61

Total ASSETS Fixed Assets Gross Block Less: Depreciation

-0.86

120774746. 4 95756842.9 4 25017903.4 7

122885554. 4 101149995. 9 21735558.4 8

Net block Current Assets Loans and Advances

2110808 5393152.9 9 3282344.9 9

1.75 5.63

-13.12

Inventory Sundry Debtors Cash and Bank Balances Loans and Advances Total Deferred Tax Asset

74176969.1 3 10183955.5 151372.56 3503004.95 88015302.1 4 3547450.61 14724286.4 5 131304942. 7

77643577.8 8 10673307 1407078.72 3119844.17 92843807.7 7 3071979.61 12516645.6 6 130167991. 5

Profit and loss A/C

Total

3466608.7 5 489351.5 1255706.1 6 -383160.78 4828505.6 3 -475471 2207640.7 9 1136951.1 5

4.67 4.81 829.5 -10.9 5.5 -13.4

-14.99

-0.86

Inference The comparative balance sheet of company reveals that during the year 2010 there has been a decrease in fixed assets by Rs 3282344.99, ie, 13.12 % and the long term funds have increased by Rs. 303739, ie, 79 %. This means the fixed assets have not been financed from long term sources. A part of working capital has been financed from long term sources. The current assets loans and advances have increased by Rs 4828505 ie, 5.5 %. In that cash and bank balance shows huge increases of Rs 1255706 ie, 829.5 %. Stock and sundry debtors have also increased. Current liabilities and provisions have decreased by Rs.140690 ie, 5.6 %. This indicates improvement in liquidity position of the firm.

COMPARATIVE BALANCE SHEET OF UME LTD AS ON MARCH 31, 2010 AND 2011

Particulars CAPITAL AND LIABILITIES Share holders Funds Share Capital Reserves and Surpluses

2010

2011

Increase/ Decrease (Rs)

Increase/ Decrease (%)

64888500 2427842 67316342

64888500 2427842 67316342

0 0 0 -2431195 -462949 -2894144 6593841.72 486952 7080793.72 4186649.72

0 0 0 -8.18 -5.18 -7.5 32.17 13.09 29.24 3.23

Total Long Term Funds Secured Loan 29697846 27266651 Unsecured Loan 8940281.3 8477332.3 Total 38638127.3 35743983.3 Current Liabilities 20494257.22 27088098.94 3719265 4206217 Provisions Total 24213522.22 31294315.94 Total ASSETS Fixed Assets Gross Block Less: Depreciation Net block Current Assets 130167991.5 134354641.2

122885554.4 126363920.4 101149995.9 105233668.9 21735558.48 21130251.48

3478366 4083673 -605307

2.83 4.04 -2.78

Loans and Advances Inventory Sundry Debtors Cash and Bank Balances Loans and Advances Total Deferred Tax Asset Profit and loss A/C Total

77643577.88 10673307 1407078.72

77141539.7 18259994.9

-502038.18 7586687.9

-0.65 71.1 -75.8 145.05 11.36 -84.73 -25.15 3.23

340605.16 -1066473.56

3119844.17 7645038.27 4525194.1 92843807.77 103387178 10543370.26 3071979.61 469127.87 -2602851.74 12516645.66 9368083.86 -3148561.8 130167991.5 134354641.2 4186649.72

Inference Long term fund reduced by Rs 2894144 ie, 7.5 %. And total current liabilities increased to Rs 7080793.72 ie, 29.24 %. Fixed assets decreased by Rs 605307 ie, 2.78 %. This is mainly due to 4.04 % increase in depreciation during the year. Current assets increased by Rs 10543370.26 ie, 11.36 %. Profit and loss account shows a loss of Rs 3148561.8 or 25.15 %.

COMPARATIVE INCOME STATEMENT OF UME LTD FOR THE YEAR ENDED 31ST DECEMBER 2007 AND 2008 Increase/ Decrease (Rs) Increase/ Decrease (%)

Particulars

2007

2008

Net Sales Less: Cost of Goods Sold Shipping Freight and Expenses

-48008066 239043284.2 196380159.4 42663124.83 22687798.52 16291692.17 -6396106.35 1051165.18 12046.31 1063211.49 -344895.31 1408106.8 37318 1370788.8 -513033.25 1883822.05 -22533 1906355.05 -32450 1938805.05 805339.26 1133465.79

291217816

243209750

-16.48 -17.85 -28.2 3.56 1.8 3.5 -2.11 10.2 0.53 20.1 -7.07 -432.1 -7.99 -265.5 -37.1 -240.7 3.03 -4.14

Gross Profit 29486733.25 30537898.43 Add: Miscellaneous Receipts 682398.9 694445.21 Gross Profit and MR Less: Admn and Selling Expenses Less: Depreciation PBIT Less: Interest and Financial Charges Profit for the year Less: Prior Period Adjustment PBT Less: Tax PAT Profit Brought Forward 30169132.15 31232343.64 16365082.21 6985787 6818262.94 7254191.2 -435928.26 281961 -717889.26 87450 -805339.26 16020186.9 7023105 8189051.74 6741157.95 1447893.79 259428 1188465.79 55000 1133465.79

PBIDT 13804049.94 15212156.74

26571888.77 27377228.03

Profit Transferred to balance Sheet 27377228.03 26243762.24

Inference

Net sales decreased by Rs 48008066 or 16.48 %. Cost of goods sold and shipping freight expenses also decreased by Rs 42663124.83 or 17.85 % and Rs 6396106.35 or 28.2 % respectively. The gross profit increased by Rs 1051165.18 or 3.56 %

PBIDT have increased by Rs 1408106.8 or 10.2 %. And PBIT increased by Rs 1370788.8 or 20.1 %.Profit for the year have increased by Rs 1883822.05. PAT also increased by Rs 1938805.05.

COMPARATIVE INCOME STATEMENT OF UME LTD FOR THE YEAR ENDED 31ST DECEMBER 2008 AND 2009

Particulars Net Sales Less: Cost of Goods Sold Shipping Freight and Expenses

Increas e/ Increase/ Decreas Decrease e 2008 2009 (Rs) (%) 27759614 11.41 243209750 270969364 196380159. 202097565. 5 5717406.09 2.91 4 12.69 65.4 -56.23 62.7 -4.68 133.67 -0.11 248.4 26.42 1281.9 167.7 1525.2 14073 916.3 -4.14 -43.89

16291692.1 18359854.0 1 2068161.84 7 19974046.0 30537898.4 7 Gross Profit 3 50511944.5

Add: Miscellaneous Receipts

694445.21 303927.45 -390517.76 31232343.6 50815871.9 19583528.3 5 1 Gross Profit and MR 4 15269131.4 Less: Admn and 4 -751055.46 Selling Expenses 16020186.9 15212156.7 35546740.5 20334583.7 1 7 PBIDT 4 7015097 -8008 Less: Depreciation 7023105 28531643.5 20342591.7 1 7 PBIT 8189051.74 Less: Interest and Financial Charges 6741157.95 8522148.51 1780990.56 18561601.2 20009495 1 Profit for the year 1447893.79 Less: Prior Period Adjustment 259428 694685.46 435257.46 19314809.5 18126343.7 4 5 PBT 1188465.79 Less: Tax 55000 7795333.75 7740333.75 11519475.2 10386009.4 5 6 PAT 1133465.79 Profit(loss) Brought 27377228.0 26243762.2 4 1133465.79 Forward 3 - 11519475.2 Profit Transferred to -

balance Sheet 26243762.2 14724286.9 4 9

Inference There has been an increase in sales by Rs 27759614 or 11.41 %. There is a huge decrease in miscellaneous expenses by Rs 390517.76 or 56.23 %.the cost of goods sold and shipping and freight expenses have increased by 2.91 % and 12.69% respectively. As there is a high increase in sales and miscellaneous receipts there is an increase in gross profit by Rs 19583528.31 or 62.7 5. The operating profit or profit before depreciation interest and tax (PBDIT) has increased by Rs. 20334583.77 or 133.67 %. This is due to increase in sales and control of operating expenses. The profit for the year has shown a high increase of 1282 %. Profit before tax has increased 1536%. There has been a significant increase in tax by Rs. 7740333.75 or 14073 %.hence the profit after tax has increased by 916 % The overall profitability of the company is not satisfactory

COMPARATIVE INCOME STATEMENT OF UME LTD

FOR THE YEAR ENDED 31ST DECEMBER 2009 AND 2010 Increase/ Decrease (Rs) Increase/ Decrease (%) -26.42 -21.67 -25.78 -45.66 124.2 -44.6 5.07 -65.9 -23.12 -76.5 -59.6 -83.7 -93.3 -83.4 -87.2 -80.8 -43.8 -14.99

Particulars

2009

2010

Net Sales Less: Cost of Goods Sold Shipping Freight and Expenses 18359854.01 13625545.24 -4734308.77 Gross Profit 50511944.5 27449223.21 23062721.29 Add: Miscellaneous Receipts 303927.45 681402.68 377475.23 Gross Profit and MR 50815871.95 28130625.89 22685246.06 Less: Admn and Selling Expenses 15269131.44 16043522.07 774390.63 PBIDT 35546740.51 12087103.82 23459636.69 Less: Depreciation 7015097 5393152.99 -1621944.01 PBIT 28531643.51 6693950.83 21837692.68 Less: Interest and Financial Charges 8522148.51 3444349.04 -5077799.47 Profit for the year 20009495 3249601.79 16759893.21 Less: Prior Period Adjustment 694685.46 46490 -648195.46 PBT 19314809.54 3203111.79 16111697.75 Less: Tax 7795333.75 995471 -6799862.75 PAT 11519475.25 2207640.79 -9311834.46 Profit(loss) Brought Forward 26243762.24 14724286.45 11519475.79 Profit Transferred to balance Sheet 14724286.99 12516645.66 2207641.33

270969364 199375916.1 71593447.89 202097565.5 158301147.7 43796417.83

Inference

The sales have shown a decrease in 2010 by Rs 71593447.89 or 26.42 %. Miscellaneous receipts have increased by Rs 377475.23 or 124.2 %. Cost of goods sold and shipping and freight charges shows a decrease by Rs 43796417.83 or 21.67 % and Rs 4734308.77 or 25.78 % respectively. The gross profit shows a decrease of 45.66 %. PBDIT or operating profit has decreased by 65.9 %. PBIT also shows a decrease of 76.5 %. Hence the profit for the year has decreased by 83.7 %. The profit after tax or (PAT) of the company has decreased during the year 2010 by Rs 9311834.46 or 80.8 %. The general profitability of company is not favorable during the period

COMPARATIVE INCOME STATEMENT OF UME LTD FOR THE YEAR ENDED 31ST DECEMBER 2010 AND 2011

Particulars Net Sales Less: Cost of Goods Sold Shipping Freight and Expenses Gross Profit Add: Miscellaneous Receipts Gross Profit and MR Less: Admn and Selling Expenses PBIDT Less: Depreciation PBIT Less: Interest and Financial Charges Profit for the year Less: Prior Period Adjustment PBT Less: Tax PAT Profit(loss) Brought Forward Profit Transferred to balance Sheet

2010 199375916.1

Increase/ Increase/ Decrease Decrease 2011 (Rs) (%) 254323223 54947306.88 27.55 29.2 30.68 16.55 -57.97 14.75 -0.38 34.8 -24.3 82.45 94.65 69.5 842.5 58.3 93.03 42.6 -14.99 -25.15

158301147.7 204524036.5 46222888.79 13625545.24 17806060.36 27449223.21 31993126.18 681402.68 28130625.89 286340.52 32279466.7 4180515.12 4543902.97 -395062.16 4148840.81

-60850.78 16043522.07 15982671.29 12087103.82 16296795.41 4209691.59 4083673 -1309479.99 5393152.99 6693950.83 12213122.41 5519171.58 3444349.04 3249601.79 46490 3203111.79 995471 2207640.79 6704763.05 5508359.36 438179.82 5070179.54 1921617.74 3148561.8 3260414.01 2258757.57 391689.82 1867067.75 926146.74 940921.01

14724286.45 12516645.66 -2207640.79 3148561.8 12516645.66 -9368083.86

Inference

Net sales of the company during the year have increased By Rs 54947306.88 or 25.55 %. Gross Profit also has shown an increasing trend. There is an increase of Rs 4543902.97 or 16.55 % in gross profit. The PBIDT have risen by Rs 4209691.59 or 34.8 %. This is due to the decrease in administration and selling expenses by Rs 60850.78 or .38 5. PBIT have increased to 32.45 %. It shows improved profit for the year say Rs 2258757.57.ie, 69.5 %. PAT is Rs 940921.01 or 42.6 %

SCHEDULE OF CHANGES IN WORKING CAPITAL

(FOR THE YEAR ENDED MARCH 31, 2008)

Particulars Current Assets Cash and bank Sundry Debtors Inventory Loans and advances

2007

2008

Increase

Decrease

4429751.96 2454942

5009445.16 6313596.5

579693.2 3858654.5 5590510.65 3651649.91

49714541.63 55305052.28 7387934.87 3736284.96 70364378.9

Total 63987170.46 Current Liabilities and provision Current Liabilities Provision

20995220.35 21581116.05 2911108 3736634

585895.7 825526

Total 23906328.35 25317750.05 Working Capital Net increase in working capital 40080842.11 45046628.85 4965786.74 4965786.74 10028858.35 10028858.35

SCHEDULE OF CHANGES IN WORKING CAPITAL (FOR THE YEAR ENDED MARCH 31, 2009)

Particulars Current Assets Cash and bank Sundry Debtors Inventory Loans and advances Total Current Liabilities and provision Current Liabilities Provision Total Working Capital Net increase in working capital

2008

2009

Increase

Decrease

5009445.16 6313596.5 55305052.2 8 3736284.96 70364378.9

151372.56 10183955.5 74176969.1 3 3503004.95 88015302.1 4 3870359 18871916.8 5

4858072.6

233280.01

21581116.0 5 3736634 25317750.0 5 45046628.8 5 17314460.9 2

21992775.3 7 3661437 25654212.3 7 62361089.7 7 75197

411659.32

22817472.8 5

17314460.9 2 22817472.8 5

SCHEDULE OF CHANGES IN WORKING CAPITAL (FOR THE YEAR ENDED MARCH 31, 2010)

Particulars Current Assets Cash and bank Sundry Debtors Inventory Loans and advances

2009

2010

Increase

Decrease

151372.56 10183955.5

1407078.72 1255706.16 10673307 489351.5

74176969.13 77643577.88 3466608.75 3503004.95 3119844.17 383160.78

Total 88015302.14 92843807.77 Current Liabilities and provision Current Liabilities Provision 21992775.37 20494257.22 1498518.15 3661437 3719265 57828

Total 25654212.37 24213522.22 Working Capital Net increase in working capital 62361089.77 68630285.55 6269195.78 6269195.78 6710184.56 6710184.56

SCHEDULE OF CHANGES IN WORKING CAPITAL (FOR THE YEAR ENDED MARCH 31, 2011)

Particulars Current Assets Cash and bank Sundry Debtors Inventory Loans and advances

2010

2011

Increase

Decrease 1066473.5 6

1407078.72

340605.16 7586687. 9

10673307 18259994.9 77643577.8 8 77141539.7

502038.18 4525194. 1

3119844.17 7645038.27 92843807.7 Total 7 103387178 Current Liabilities and provision 20494257.2 27088098.9 Current Liabilities 2 4 Provision 3719265 4206217 24213522.2 31294315.9 Total 2 4 68630285.5 72092862.0 5 9 Working Capital Net increase in 3462576.54 working capital

6593841.7 2 486952

3462576.5 4 12111882 12111882