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OF FOODS AND INNS LTD, CHITTOOR´ Project Report
Submitted in partial fulfillment of the requirement For the award of the Degree Of
MASTER OF BUSINESS ADMINISTRATION
(JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY)
Reg. No.: 07751E0054 Under the guidance of
Mrs.T. HIMABINDU, M.F.M.,
Assistant Professor, Dept of M.B.A.
SREENIVASA INSTITUTE OF TEHNOLOGY AND MANAGEMENT STUDIES (Affiliated To Jawaharlal Nehru Technological University, Hyderabad) #74, Thimma Samudram, Bangalore ±Tirupati Bye-Pass Road Chittoor ± 517 128 2007-2009
Sreenivasa Institute of Technology and Management Studies
(Affiliated to Jawaharlal Nehru Technological University, Hyd) Murukambattu, CHITTOOR ± 517 127
This is to certify that the project report entitled ³A STUDY ON FUNDS FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR.ana´ submitted by Mr.N. MANJUNTH(07751E0054) in partial fulfillment of the requirement for the award of the degree of ³Master of Business Administration´ under JNTU, Hyderabad, is a record of independent work under taken by him/her during the academic year 2008-2009. This project report has not been submitted earlier either in part or whole for the award of any other degree/diploma of any university.
PROJECT GUIDE Mrs. T. HIMABINDU, M.F.M. Department of MBA
DIRECTOR Dr .S.E.V.SUBRAMANYAM, M.B.A, PhD., Department of MBA
I, N. Manjunath declare that the study conducted on ³A STUDY OF FUNDS FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR´ is submitted by me to the department of business management, Sreenivasa Institute of Technology And Management Studies (JNTU), is of my own and is not submitted to any university or published at any time before.
N.MANJUNATH Reg. No.: 07751E0054
I am very much grateful to FOODS & INNS LTD for allowing me to carry out my project work. I am thankful to D.S.N.MURTHY (Financial Manager) for giving me the permission to do my project work in Foods & inns Ltd. I would like to thank our principal Dr. T. SAIRAMA M.E., PhD, for his valuable guidance and enthusiasm shown to me. I owe a special thanks to our Head of the Department, SUBRAHMANYAM, M.B.A., PhD I would like to express my deep gratitude to my guide BINDU, M.F.M, for her guidance and motivation. Prof.S.E.V.
Mrs. T. HIMA
(N.MANJUNATH) Reg. No.: 07751E0054
STATEMENT OF THE PROBLEM
Funds flow statement summarizes for a particular period the resources made available to finance the activities of an enterprise and the uses to which such resources have been put. Funds flow statement is based on accrual concept of profit. The Company prepares a statement of funds flow to cater Purchase of fixed assets and investments, redemption of debentures and preference shares and repayment of loans, payment of dividend, payment of tax, and increase in working capital. It is the responsibility of the organization to maintain a standard level of funds flow neither excess or deficit.
Management of funds is an important aspect of financial management. Management of funds acts as the primary concern whether it may be in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
5. sources and uses of funds. If the effect of transaction results in the increase of funds it is called source of funds and if it results in the decrease of funds it is known as an applications of funds the term flow of funds refers to the movement of funds in the working capital it is said to be a source or inflow of funds and if it results in the decrease of working capital. MEANING AND DEFINITION OF FUNDS FLOW STATEMENT Funds flow statement is a method by which we study changes in the financial position in the business enterprise between beginning and ending financial statement dates. Financial management constitutes risk. funds received and . Funds procured from different sources have different characteristics in terms of risk. statement of changes in financial position. cost and control.According to Phillippatus. From the cost point of view equity capital is most expensive source of funds as dividend expectations of shareholders are normally higher than prevalent interest rates. where gone statement. movement of working capital statement movement of funds statement. PROCUREMENT OF FUNDS 1. where came in and where gone out statement. 3. Funds flow statement is called by various names such as sources and application of funds. Funds issued by the issue of equity shares are the best from risk point of view for the company as there is no question of repayment of equity capital except when the company is under liquidation. 4. The cost of funds should be at minimum for a proper balancing of risk and control MEANING AND CONCEPT OF µFLOW OF FUNDS¶ The term µflow means movement and includes both µinflow¶ and µoutflow¶. Flow of funds is said to have taken place when any transaction makes changes in the amount of funds available before happening of the transaction. it is said to be an application or outflow of funds. "Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm". 2. It is a statement showing sources and uses of funds for a period of time. where got. cost and control. The term flow of funds means transfer of economic and values from one asset of equity to another. summary of financial operations. ³A statement of sources and applications of funds is a technical device designed to analyze the changes in the financial condition of a business enterprise between two dates´. As funds can be obtained from different sources so procurement of funds is considered as an important problem of business concerns.
4. the profit and loss account is prepared to compute net profit. It can not reveal continuous changes. It is essential historic in nature and projected funds flow statement cannot be prepared 5. This fact . The profit & loss account is a link between the balance sheet at the beginning of the period and the balance sheet at the end of the period. funds statement etc. 2. RELATIONSHIP BETWEEN BALANCE SHEET AN AND PROFIT & LOSS ACCOUNT The balance sheet and the profit & loss account are not two separate and independent statement but they are related to each other. funds generated and expended statement. It provides only some additional information as regards changes in working capital. LIMITATIONS OF FUNDS FLOW STATEMENT The funds flow statement has a number of uses. Generally.disbursed statement. It is not an original statement but simply. 3. how ever it has certain limitations also which are listed below: 1. Net profit can also be computed by comparing the balance sheet at beginning and the end of the period. It should be remembered that a funds flow statement is not a substitute of an income statement or a balance sheet. We can easily realize the impact of profit & loss account if we remember that revenue is an inflow of assets (or outflow of liabilities) and expenses are an out flow of assets (or inflows of liabilities). Changes in cash are more important and relevant for financial management than the working capital. arrangement of data given in the financial statements.
It indicates the financial condition or the state of affairs of a business at a particular moment of time. It is a flow statement. BALANCE SHEET Balance sheet is the most significant financial statement. The generally accepted convention is to show one year events in the profit and loss account. particularly bankers and financial analysis in India have recently started paying more attention to the firm¶s earning capacity as a measure of its financial strength. PROFIT AND LOSS ACCOUNT Balance sheet is considered as a very significant statement by bankers and other lenders because it indicates the firm¶s financial solvency and liquidity. However. Since the profit and loss account reflects the results of operations for a period of time. The earning capacity and potential of a firm are reflected by its profit and loss account. The profit and loss account is a ³score board´ of the firms performance during a period of time. Thus. as measured by its resources and obligations. Thus. liabilities and owners equity at a point of time. The balance sheet is a stock or status statement as it shows assets. liabilities and owners equity for a business firm as on a specific date. creditors. LIST OF NON CURRENT OR PERMANENT CAPITAL ACCOUNTS Non-current or permanent liabilities Equity share capital Preference share capital Redeemable preference share capital Debenture Long term loans Share premium account Share forfeited account Non-current or permanent assets Goodwill Land Building Plant & Machinery Furniture & fittings Trade Marks Patent rights . It provides a snapshot of the financial position of the firm at the firms accounting period. In the language of accounting balance sheet communicates information about assets. the difference in beginning and ending owner¶s equity is the net profit (or net loss). as a starting point.emphasizes the role of the profit and loss account as a link between consecutive statements of financial position. Net profit (or net loss) for a period is equal to the change in owner¶s equity during that period. More especially balance sheet contains information about resources and obligations of a business entity and about its owner¶s interests in the business at a particular point of time. the balance sheet reveals the firms financial position on specific date.
h. c. g. b. advances and deposits Current assets Cash in hand Cash at bank Bills receivable Sundry debtors or accounts receivable Short-term loans and advances Temporary or marketable investments . d. General reserve Dividend equalization fund Insurance fund Compensation fund Sinking fund Investment fluctuation fund Provision for taxation Proposed dividend Long-term investment Debit balance of Profit & loss account Discount on issue of shares Discount on issue of debentures Preliminary Expenses Other differed expenses LIST OF CURRENT OR WORKING CAPITAL ACCOUNTS Current liabilities Bills payable Sundry creditors or accounts payable Accrued or outstand expenses Dividends payable Bank overdraft Short term loans. f.Profit & loss account Capital reserve Capital redemption reserve Provision for depreciation against fixed assets Appropriate of profits a. e.
Provision against current assets Inventories or stocks such as a. A decrease in current assets decreases working capital. Statements of sources and application of funds. 4. USES. c. Working capital = Current assets ± Current liabilities 1. 2. SIGNIFICANCE AND IMPORTANCE OF FUNDS FLOW STATEMENT y It helps in the analysis of financial operations. An increase in current liabilities decreases working capital and. Broadly speaking the preparation of a funds flow statement consists of two parts: 1. 2. Raw materials Work in process Stores and spares Finished goods Provision for taxation if it does not amount to appropriation of profits. hence the funds flow statement is prepared by comparing two balance sheets and with the help of such other information derived from the accounts as may be needed. A decrease in current in current increases working capital. d. Statement or Schedule of changes in working capital funds. b. 3. . Proposed dividend(may be current/non-current liability) Prepaid expenses Accrued incomes PROCEDURE FOR PREPARING A FUNDS FLOW SATEMENT Funds flow statement is a method by which we study changes in the financial position of a business enterprise beginning and ending financial statements dates. An increase in current assets increases working capital.
It acts as a future guide. STATEMENT OF SCHEDULE OF CHANGES IN WORKING CAPITAL PARTICULARS PREVIOUS CURRENT EFFECT ON WORKING YEAR YEAR CAPITAL INCREASE DECREASE CURRENT ASSETS Cash in hand Cash at Bank Bills receivable Sundry Debtors Temporary investments Stocks/Inventories Prepaid expenses Accrued Incomes Total Current Assets CURRENT LIABILITIES Bills payable Sundry creditors Outstanding expenses Bank overdraft . It helps in the formation of realistic dividend policy. It helps knowing the overall credit worthiness of a firm. It helps in a appraising the use of working capital. It helps in the proper allocation of resources.y y y y y y It throws light on many perplexing questions of general interest.
Short-term advance Dividend payable Proposed dividends* Provision for taxation* Total current liabilities Working Capital (CA-CL) Net increase or decrease in working capital * May or may not be a current liability PROFORMA OF A FUDS FLOW STATEMENT Statement of Sources and Application of Funds Sources: Rs A. Total_______ Applications: a) Payment of share capital b) Repayment of institutional loans. Issue of Debenture C. Institutional Loans D. Issue of share capital B. . Sale of Investment and other fixed assets E. Trading profit or funds from operations. c) Redemption of debentures d) Purchase of Investment and other fixed assets.
Additionally. including leading varieties like Alphonso. India is a minor exporter of mango and mango products at this time.2 thousand metric tons of mango juice. Mango is in strong demand within the worldwide retail sector. mango is a preferred fresh fruit within the Indian domestic market. India is well positioned to capitalize on this opportunity with a very large national production of mangos. exports of fresh mangos from India averaged approximately 42. Collectively. Collectively. Despite this large mango production. as well as globally.7 thousand metric tons of mango pulp. or only about 0.2 thousand metric tons of mango juice.56 million metric tons in 2003. Data from 2001 indicated that India exported 3. The total market value of Indian mango and mango pulp represents 25% of the value of agricultural and processed food products exported by India. . This accounts for 41% of the estimated worldwide mango production of 25. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand. Data from 1995 indicated that India exported 37. these observations indicate that. Moreover. During the five±year period from 1998±2002.4% of mango production during this time frame. but also imported 2.e) Non-trading payments Total_______ INDUSTRIAL PROFILE BACKGROUND OF MANGO INDUSTRY The lack of mango market development globally opens a large untapped opportunity for India to make an organized entry in the fresh mango and mango pulp market. Data on exports of Indian mango pulp and juice products are more limited. the consumption growth for mangos in the United States and Europe has average 10±15% per year during the last 5 years. India has the potential to create a long±term global market position and to capitalize on the fast growth of mango as a preferred ingredient for the natural package food industry.4 thousand metric tons.
and Indian government organizations.despite being by far the world¶s largest mango producer. (Sources: India Ministry of Food Processing Industries and Rambo bank Report). among others. Ultimately. as well as employment of certification systems. Within the value chain. and logistics management. improved packing and grading facilities. This report concludes that it is imperative to streamline the mango supply chain in order to reduce wastage and raw material costs. and development the farmer base at commercial and social levels. pesticide use in accordance with regulations. PFID²F&V partnerships will also help identify and facilitate resources necessary for enhancing the mango supplychain such as cold storage facilities. Education and training in Good Agricultural Practices and other sanitary standards. and a more efficient supply chain. PFID²F&V is working to strengthen the small and medium mango grower base by providing capacity building at all levels. export organizations. increase farmer incomes. testing facilities. these steps will help stabilize prices. A recent report from the Indian Ministry of Food Processing Industries further details the overly complex supply chain and its contribution to costs and post±harvest losses. INDIA MANGO & MANGO PULP INDUSTRY DEVELOPMENT Through partnerships with mango growers. processors. Numerous stakeholders in India have expressed concern that this overly complex value chain is a hindrance to effective marketing of Indian mangos and mango products. . Associated with this inefficient aggregation process is the application of numerous commissions as fresh agricultural products trade hands. One barrier to efficient development of the Indian mango industry is an exceedingly complex supply chain. will lead to better yields. a number of buyers and other aggregators operate at local Minds and APMC to assemble larger lots from the many small producers in any given region. India exports less than 1% of its mango crop as fresh mangos or processed mango products. Furthermore. These observations with mango are consistent with aggregate data available on Indian fruit and vegetable exports. A further approach will target reduction of waste in the fresh mango chain by developing high±value mango products and enhancing processing capacity for the domestic market.
o PFID partnerships can assist mango growers and processors in developing an "India" brand image for fresh mango and processed mango products that meet . MSU/PFID-F&V. as there is no testing facility in Krishnagiri Farmers are not getting fair price. notable results are beginning to show in the form on increasing contributions from partnership members.000 tones Farmers have to go to Bangalore. just over one year from project start-up. only 1% of the total mango production in India is exported. Thiagarajan. now.000 tones by 2010 Mango is raised in 36.MANGO PULP INDUSTRY HOPES o o o o o Mango pulp production to reach 75. Dr. o PFID partnerships in India can facilitate the development of a distribution network in European and other countries where the value realizations for mango and mango pulp are the highest. One reason contributing to this poor export performance is that overseas buyers have stricter standards than are currently accepted within the Indian domestic market.000 hectares in Krishna Giri district Mango pulp processed annually is 50. o PFID²F&V will partner with relevant Indian organizations in establishing a global image for the Indian mango starting with the establishment of quality standards and Good Agricultural Practices (GAPs) standards for India. GOALS OF INDIA MANGO MARKET DEVELOPMENT Currently. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market. together with our two India-based coordinators. recently met with the Agricultural Product Export Development Authority (APEDA) as well as the Federation of Indian Chambers of Commerce (FICCI) and the National Institute of Marketing Boards (NIAM) to follow up on each of their commitments to promote the Indian Mango Industry. even if there is a rise in prices in global market MANGO MARKET DEVELOPMENT PFID-F&V India has continued to forge and strengthen public and private partnerships to the point that.
plantation. Western Europe. . The Food Processing Industry sector in India is one of the largest in terms of production. Soya-based products.However fruit processing operations have been given a special thrust since the last season with an emphasis on developing strategic partnerships across the value chain especially fruit procurement and processing. The division was set up in 1967 and since then has handled a wide range of products . USA. FOODS AND INNS Ltd has established it's presence as a reliable and competitive exporter to Coca Cola. for minimizing pre/post harvest wastage. consumption. BACKGROUND OF FOOD AND INNS Ltd . sorting. Processed Fruits etc. The division combines people with vast experience in agric-trading with the FOODS AND INNS Ltd Group¶s credibility to justify its premier standing in the trading arena. COMPANY PROFILE HISTORY OF FOOD AND INNS Ltd. grain processing and other consumer product groups like confectionery. fisheries. chocolates and cocoa products. The food processing industry provides vital linkages and synergies between industry and agriculture. alcoholic beverages. The predominant mango varieties grown in India make this product unique in country and abroad. with a number of fiscal relief¶s and incentives. PFID India liaisons can easily adapt this approach to the further development of other fruit and vegetable products in India. high protein foods etc. mineral water.such as Sesame Seeds. Middle East etc. FOOD PROCESSING Food processing involves any type of value addition to agricultural or horticultural produce and also includes processes such as grading. India's food processing sector covers a wide range of products fruit and vegetables. and packaging which enhance shelf life of food products. milk and milk products.consumer preferences. generating employment and export growth. o After demonstrated success in developing a strengthening the market development of mangoes. The government has accorded it a high priority. meat and poultry. FOODS AND INNS Ltd began its fruit processing operations in early 70s. Far East. export and growth prospects. to encourage commercialization and value addition to agricultural produce.
the mango belt in India. FOOD AND INNS Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees. In its effort to be a forerunner in the chosen areas of business in terms of best practices in quality and technology. PRINCIPAL MANUFACTURING DIVISIONS AND PRODUCT RANGE DIVISION PRODUCT RANGE Aseptic Canning Purees and concentrates of Mango.Situated at Chittoor in Andhra Pradesh. Concentrates and Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the local farming community wealth. thereby minimizing the fruit handling damages and high value realizations. Guava & Papaya Institutional packs of mango products. Frozen Frozen fruit purees & IQF chunks. FOODS AND INNS LTD is encouraging farmers to mobilize the fruits directly to the factory. Consumer packs of Indian vegetables & catering packs for mango Chutneys. The farming community is an integral part and forms the backbone of the organization. the industry and the nation in a phased manner. FOODS AND INNS Ltd believes in empowering farmers by providing technical assistance from research institutes in the food industry to support the farmers in achieving better quality and higher yields by developing the gardening and harvesting techniques. frozen IQF vegetables & frozen Indian snacks like Samosa and Ptras. Guava & Papaya Paste. FIL plans to benefit armors. Further to educating farmers with latest horticultural techniques. .
IIM Professor Director Mr.B.Spray Drying Fruit powder like Mango. D. the company is poised for a steady and continuous growth graph moving upwards in all Para meters. the doyen guidance of Mr. the state of art technology implementation.K. Engineer Mr. Utsav Dhupelia .Utsav coupled with the contribution of other directors.No Name of the Director 1 2 3 4 5 6 Mr.Raymond Simkins Mr.5 crores (USD1. innovative R & D and Lab facilities..160 Crores (USD 16 MIO) giving the status of government recognized EXPORT HOUSE.. Dalal Director Solicitor Foreign Director Solicitor Ex.D.1 MIO) to Rs. Banana. is the brain and brawl for taking the company¶s turnover from Rs. Trivedi Mr. PRODUCTS .M. M. looking after the routine affairs of the company.Utsav Dhupelia Mr.Maniar Mr. BOARD OF DIRECTORS S. With the back up of technical and managerial support staff. Orange. a Chartered Accountant from U. B. Tomato and beat root. D.C.
PRODUCTS OF FRUITS ALPHONSO TOTAPURI GUAVA PAPAYA PRODUCTS OF VEGETABLES FRUIT SEASONS Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Mango Papaya Guava .
CUTTING EDGE TECHNOLOGY FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic filling line of SIG.Mizzen. The facility currently has a tropical fruit Puree / Concentrate processing plant and the pack house for preparing the Fresh Fruits & Vegetables. Italy to produce natural fruit pulps & concentrates. INITIATIVES SPAN THE FOLLOWING DISCIPLINES . The plant has one of the India's single largest fruit processing lines -10 TPH ripen fruit processing with Aseptic Packaging. spread over an area of 15 acres. This place has been earmarked to host Integrated Food Complex of International standards.Market Presence o o o o o o European Union United States of America Canada Australia Middle East including Iran & North Africa Japan & South Korea SAHER OF COUNTRIES MARKET FACILITY FOODS AND INNS Ltd processing facility is located in Chittoor.
EFFICIENT PLANT LAYOUT o Minimal drop in power and steam transfer. o High speed advanced Mono block aseptic filling machine supplied by SIG Mizzen. allowing a closer control on quality and operations. o Integrated Enterprise Resources Planning system is in place to automate business processes and provide data for analysis and reporting. Powered by priceless hands-on experience these professionals are upgrading themselves continuously to identify and introduce improved and innovative product offerings that would delight customers worldwide and comply with the leading global quality standards. o Special food grade self-leveling epoxy flooring to maintain optimum hygienic conditions.o PLC operated equipments for better control over monitoring and operations with supervisory units. o Utility lines are routed outside the plant to keep the interiors free from dust accumulation. o Two stage washing of fruits to ensure HACCP quality requirement. PURE & CONCENTRATE FACILITY . VALUABLE INDUSTRIAL EXPERTISE FOOD AND INNS Ltd is backed with strong support and service from its team of highly qualified technical personnel and domain experts with perceptive knowledge and skill. o Straight-line process flow design to maintain the hygiene and control in respective areas. o Advanced high raise insulated roofing with double layer GI Sheeting with air extractors to maintain temperature inside the plant. o Curved corners and food grade epoxy painted walls to avoid dust accumulation and to facilitate easy washing. o Two-stage sterilization to retain the natural flavor and aroma.
The processing line is fully integrated and controlled by PLC. Spain. To manage appropriately & conserve the water. pre cooling chambers and cold storage to handle fresh fruits and vegetables. bananas are processed along with tropical vegetables like Okra. This ensures irradiation of the fruit flies in the fresh fruit. Egg plant. Without water there is no life on the earth. WATER MANAGEMENT Water is an essential & precious natural resource. PACK HOUSE FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing facility from Grief. The line has a capacity to process 10 metric tones per hour ripened fruits. It is as important to the fruit processing industry as to the living being. Lemon. we are taking following steps at various locations of its use: . FOOD AND INNS Ltd is the first private organization to set up this facility in the country. water is becoming scarce year by year due to increase n its consumption in industries & agriculture sectors & indiscriminate use /wastage by human beings. it needs a integrated& scientific approach for its management to use it so that undesirable wastage is avoided which helps us to save water for right utilization .The fruit processing aseptic line is from SIG-Mazzini of Italy. Bitter gourd etc. VAPOUR HEAT TREATMENT To enable Fresh Mango exports to countries like Japan and Korea. Water from all bore wells is collected in a sump. FOOD AND INNS Ltd has commissioned the VHT facility. Fresh fruits including mangoes. From there it is pumped to over head tank to supply to various locations of use. The water is potable. The facility also holds ripening chambers. But. STAGE OF USE OF WATER TO THE BEST EFFECT IN OUR FACTORY Our main source of water is bore wells. therefore. It is a nature¶s gift.
o FRUIT WASHING The water is re-circulated after filtration up to it becomes dirty. understanding unique requirements and delivering value to select global customers. The steam condensate of evaporator is recycled to boiler to save water & energy as condensate will have high temperature. Off-shore logistical service providers has made the supply chain process extremely competitive. Given our renewed emphasis on this product line we are strengthening relationships in key markets across the buyer spectrum. OUR CERTIFICATIONS INCLUDE o HACCP (FOOD SAFETY CERTIFICATION) BY TUV. End User. Thrust of exports. o STEAM GENERATION Water for boiler feeding is treated in water softener to reduce the hardness. GERMANY o KOSHER BY STAR-K. FOODS AND INNS Ltd expertise in the business and its contacts with Agents\Brokers. . GERMANY o ISO 9001:2000 (QUALITY MANAGEMENT SYSTEM) BY TUV. USA o SURE GLOBAL FAIR (SGF) o HALAL CERTIFICATION CUSTOMER FOCUS Loyalty and a strong relationship in business are built out of years of experience in a particular industry. Blender-bottlers. FUTURE PLANS y y y y Development of the Indian market for foods and inns. This water is chl0rinated to control the contamination by continuous dosing of chlorine in the washing tub. Expansion in 4th Aseptic manufacturing capacity. Use of IT as a tool to further Business goals.
METHODOLGY The data is of two type: y Primary data y Secondary data PRIMARY DATA: Personal interview and discussion was conducted for the collection of data. the secondary data was collected from the company like 1. Annual reports of the company during 2004-2008.. Company records related to financial management.y Setting up of a Central R&D lab. From financial department of the company retaining to the last 4 years. We collect through books magazines. 4. Backward integration for improved quality of raw materials using contract farming/ organic cultivation. In this study. 2. newspaper. journals & websites etc. SECONDRY DATA: Secondary Data are already present one and it is second hand information. 3. . Financial statement of the company.
5.5. 3. OBJECTIVES 1. . To find out the sources from which additional funds were derived and the use to which their sources were put. 4. To know various needs for which funds were obtained during a particular period based in which these funds where employed. To understand flow of funds in current or non-current accounts. To analyze the changes of financial position of Foods and Inns Limited enterprises between two dates. To analyze the changes in assets and liabilities from the end of one period of the time to the end of another period of time 2. From various financial management next books.
This funds flow statement is a statement which indicates various means by which the funds have been obtained during a certain period and the ways to which these funds have been used during the period. The basic purpose of the funds flow statement is to reveal the changes in the . It is a technical device designed to analyze the changes in the financial condition of the business enterprises between two dates. It is an essential tool for the financial analysts and is of primary importance to the financial management.SCOPE OF THE STUDY The present study focuses as sources of funds and application of funds for a period of time. Now a days it is being widely used by the financial analyst credit granting institutions and financial managers. The study is confirmed to find out the changes in the financial position of the Foods and Inns Limited between the beginning and ending financial date. The term funds used here means working capital that is the excess of current assets over current liabilities.
It provides only some additional information as regards changes in working capital 3. It cannot reveal continuous changes. It should remember that a funds flow statement is not a substitute of an income statement or a balance sheet. The study based on the available annual reports and internal information only . It helps in appraising the use of working capital and finally it acts as future guide. 2. 4. LIMITATIONS 1. It helps in the formation of realistic dividend policy. It helps in the analysis of financial operations. It helps in the proper allocation of resources.working capital on the two balance sheet dates.
26.200 26.558 8.714 Increase in W.93.31.714 9.08.89.58.19.debtors Cash & bank b/s Loans & Advances Investment Total C.507 25.C TOTAL 7.12.288 7.668 22.214.171.124.126.96.36.199.48.L Net Working Capital(W.188.8.131.52.000 9.793 184.108.40.2061 1.39.STATEMENT OF CHANGES IN WORKING CAPITAL Particulars 2004 2005 Effect on Working Capital Increase Decrease Current Assets(C.865 2.354 5.73.714 25.707 36.293 62.02.80.22.48.293 1.207 25.76.AC.12.66.500 10.31.915 56.06.L): Current Liabilities Provisions 7.64.990 2.500 87.C) (C.565 Total C.85.622 12.665 2.507 7.058 .73.81.43.A Current Liabilities(C.658 220.127.116.11.51.22.74.A): Inventories S.91.858 18.104.22.168.53.87.02.24.561 4.12.293 25.00.29.97.L) 17.06.858 9.773 22.214.171.1245 74.
54.2 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Deferred Tax Assets Capital W-I-P Decrease in Working Capital Amount Applications 2. the main sources of funds are secured and unsecured loans.968 126.96.36.199.02.060 53.39.593 Interpretation: Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance.41.TABLE NO: 4. differed tax asset and liabilities. The firm utilizing this fund for the purchasing of fixed assets.41. The financial position of FOODS AND INNS LTD in this particular year is good STATEMENT OF CHANGES IN WORKING CAPITAL TABLE 4. In the particular year the current assets are increased then the current liabilities.54.56.1 FUNDS FLOW STATEMENT FOR THE YEAR 2005 TABLE NO: 4.507 13.07.963 10.086 188.8.131.52 Particulars 2005 2006 Effect on Working .22.675 Purchase of Fixed Asset 27.25.586 ---- Amount 5.341 Increase in Working Capital 4.593 13. As a result the funds flow statements.
772 15.055 59.82.534 28.76.43.L Net Working Capital(W.21.658 16.27.773 184.108.40.2060 220.127.116.118 7.84.166 Total C.49.050 25.60.608 10.685 4.53.565 42.07.865 18.104.22.1688 4.95.30.C) (C.22.214.171.1244 2.A-C.52.716 84.558 1.354 12.293 12.601 126.96.36.199.820 36.017 188.8.131.52.02.65.A): Inventories S.38.06.851 184.108.40.206.debtors Cash & bank b/s Loans & Advances 12.29.Capital Increase Current Assets(C.95.L) Increase in W.31.48.915 1.95.248 616.714 28.82.943 220.127.116.11.82.280 Decrease Investment 18.104.22.168.248 22.214.171.1248 2.140 12.601 .43.C 9.A Current Liabilities(C.126.96.36.199.43.66.66.L): Current Liabilities Provisions Total C.248 2.
82.355 Increase in Working Capital 188.8.131.52.70.4 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 1.000 ---- Applications Amount Purchase of Fixed Asset 94.72.856 1.00.88.FUNDS FLOW STATEMENT FOR THE YEAR 2006 TABLE NO : 4.70.989 Interpretation: .100 Capital W-I-P 11.989 3.06.385 1.19.01.43.11.88.748 2.534 3.
90.78.06.44.04.77.75.938 14.13.963 2.28.222 2. differed tax liabilities.184.108.40.206.97.86.733 31.84.088 1.14.36.L Net Working Capital(W.32. As a result the funds flow statements.61.685 3.86. The firm utilizing this fund for the purchasing of fixed assets and capital WIP and the financial position of FOODS AND INNS LTD in this particular year is good.29.733 220.127.116.11.248 18.104.22.1685 22.214.171.124 9.310 10.94.L): Current Liabilities Provisions Total C.55.06.75.08. In the particular year the current assets are increased then the current liabilities.A): Inventories S.74.C 12.758 12.60.011 FUNDS FLOW STATEMENT FOR THE YEAR 2007 .011 1.571 13.Comparing the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.180 1.733 2.608 2.38.716 8.671 1.L) Increase in W.805 8.86.40.07.526 126.96.36.199.43.AC.000 2.055 188.8.131.52.726 16.97.debtors Cash & bank b/s Loans & Advances Investment Total C.772 16.911 184.108.40.206. the main soureces of funds are secured and unsecured loans.82. STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 220.127.116.11 Particulars 2006 2007 Effect on Working Capital Increase Decrease Current Assets(C.72.918 13.C) (C.04.30.166 44.00.793 28.97.024 3.A Current Liabilities(C.92.39.485 6.49.485 31.95.47.
00.311 50.69.29.A): Inventories S.685 2.04.884 Interpretation: Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance.18.104.22.168 3. the main sources of funds are secured and unsecured loans.911 7. The firm utilizing this fund for the purchasing of fixed assets and capital WIP and the financial position of FOODS AND INNS LTD in this particular year is good Particulars 2007 2008 Effect on Working Capital Increase Decrease Current Assets(C.71.11.783 Increase in Working Capital 22.214.171.1248 ------- Applications Amount Purchase of Fixed Asset 126.96.36.199.44.132 77. differed tax liabilities.69.02.838 57.180 14.884 8.47.485 8.616 Capital W-I-P 74.250 8.06.08.89.51.93.debtors Cash & bank b/s Loans & Advances Investment 188.8.131.529 184.108.40.206.06. As a result the funds flow statements.28.TABLE NO: 4.84.268 5.130 96.024 19.213 220.127.116.11.661 2.33.6 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 2.685 .17. In the particular year the current assets are increased then the current liabilities.726 4.67.000 18.104.22.168.84.
433 Deferred Tax Liability 34.98.41.00.14.732 STATEMENT OF CHANGES IN WORKING CAPITAL TABLE NO: 4.734 .L) 22.214.171.124.14.L): Current Liabilities Provisions 126.96.36.1996 49.14.482 13.733 188.8.131.522 10.22.80.66.14.Total C.01.734 Applications Purchase of Fixed Asset Amount 3.229 Decrease in Working Capital 1.32.513 Increase in Working Capital -------- 31.00.793 184.108.40.206.220.127.116.11 18.104.22.168 Sources Amount Reserves & Surplus 2.48.C) (C.C 1.18.L Net Working Capital(W.733 29.538 decrease in W.86.86.196 1.222 19.7 FUNDS FLOW STATEMENT FOR THE YEAR 2008 TABLE NO: 4.01.704 22.214.171.124.214 Total C.A Current Liabilities(C.00.86.11.571 6.90.74.061 9.AC.92.196 126.96.36.199.01.27.085 Secured &Unsecured Loans 8.510 2.733 11.732 11.86.
As a result the funds flow statements. differed tax liabilities. In the particular year the current assets are decreased then the current liabilities. 5. 3. It is founded that the company is holding share capital stably. 4. 2.Interpretation: Comparing the year 2007 and 2008 the statement of changes in working capital shows the decreasing balance. The firm utilizing this fund for the purchasing of fixed assets. The company was highly purchased the fixed assets in the year 2005&2007. The working capital is increased year by year except last year. The company receives the secured and unsecured loans indicate fluctuating position. the main sources of funds are secured and unsecured loans. The differ tax liability is increased in 2005-2006. Apart to this the surplus funds also increased. .Then it fall down. The financial position of FOODS AND INNS LTD in this particular year is good FINDINGS 1.Then in 2006&2008 the company used low funds for purchasing of fixed assets.
y Tax liabilities should also be maintained in a standard manner.6. In 2008 it is decreased. 8. The investment is increased year by year up to 2007. SUGGESTIONS y The company may increase their share capital it helps to get more strength in financial position.progress rapidly increased by large variation with the amount. y Regularly use funds in purchase of fixed asset it make profitability. . It is to require raising short terms funds to solve the financial problems. The working -in. the statement shows decreasing working capital in the company. y In 2008. 7. The working capital is increased in 2005 to 2007 with a low variation in the year the working capital will be decreased.
And its main sources of funds are deferred tax liability.I.CONCLUSION It can be concluded that in FOODS & INNS PRIVATE LTD The working capital in increased year by year except last year.The over all performance of FOODS &INNS PVT LTD is very good. .P. The main applications of funds are purchase of fixed assets & capital W. secured& unsecured loans.
14.28.754 188.8.131.52.Income statement of Foods and Inns Limited for the years 31-3-2004 and 31-3-2008 (Rupees) Particulars Net sales (-)Cost of goods sold Gross profit (-)Operating expenses 31-3-2004 31-3-2005 31-3-2006 31-3-2007 31-3-2008 61.36.168 30.792 184.108.40.206.37.176 3.043 4.74.588 16.73.01.581 1.258 220.127.116.11.18.104.22.1688 22.214.171.124.28.278 126.96.36.199.96.894 3.00.863 5.15.870 2.160 3.160 35.097 46.64.08.843 (188.8.131.52.41.65.969 1.922 184.108.40.206.220.127.116.118 4.39.451 5.161 51.42.326 18.104.22.168.22.214.171.124.92.020 126.96.36.1997 188.8.131.524 .351 184.108.40.206.57.385 2.562 (1.114 (+)Operating income Operating profit (-)Non-operating expenses (+)Non-operating income Profit / loss before tax (-)Provision for tax Profit / loss after tax (1.076 220.127.116.11.56.925 1.39.871 2.55.868 9.12.974 18.104.22.168.528 1.427 2.53.045 22.214.171.124.28.10.571) 2.71.616 48.640 4.811 79.651 44.83.63.00.16.471 (4.03.83.27.37.308 48.142 31.04.101 126.96.36.199.188.8.131.52 52.01.37.35.313 1.709) 2.636 45.798 11.461 1.81.06.825 4.02.955) 3.34.595 3.812 184.108.40.206.220.127.116.111 5.406 52.56.709 1.511 18.104.22.168.02.033 68.537) 22.214.171.124.126.96.36.199.483 188.8.131.524 184.108.40.206.98.88.
185 34.29.911 7.71.977 94.354 12.38.Invesments 4.773 220.127.116.11.08.17.180 14.44.772 16.93.08.62.13.261 18.104.22.1680 22.214.171.1244 3.668 12.12.726 4.490 10.571 126.96.36.1998 47.64.665 75.685 188.8.131.52.175 61.81.275 21.24.63.Balance Sheet of Foods and Inns ltd.53.13.30.044 27.86.042 20.841 32.43.02.747 2.515 40.98.257 46.33.Fixed assets Capital work in progress TOTAL FA 3.47.689 184.108.40.206.95.Miscellanious expenditure TOTAL ASSETS(1+2+3+4+5) LIABILITIES: 6.31.481 27.060 6.50.08.156 Sundry debtors 4.405 220.127.116.11.915 1.658 16.685 77.21.75.06.716 8.Current liabilities.067 18.104.22.1687 33.59.793 12.293 1.938 14.56.93.for the year 31-3-2004 and 31-3-2008 (Rupees) Particulars 31-3-2004 31-3-2005 31-3-2006 31-3-2007 31-3-2008 ASSETS: 1.30.09.29.12.055 22.214.171.124.126.96.36.199.499 .00.311 TOTAL CA 2.024 19. provisions: 24.78.Currentassets loans&advances Inventories 7.77.361 19.05.72.30.188.8.131.520 184.108.40.206.220.127.116.111 Cash&bank balances 74.000 18.104.22.1685 69.Deffered tax assets 22.214.171.124.865 2.939 Loans & advances 12.330 47.950 126.96.36.199.188.8.131.52.36.07.67.49.43.288 7.
22.257 184.108.40.206.104 18.66.05.24.220.127.116.11 18.48.231 25.65.12. 1.06.58.Share holders funds: Share capital Reserves & surplus TOTAL 9.214 18.348 69.22.500 10.36.19.Current liabilities Provisions TOTAL CL 7.60.71.000 18.104.22.1689 BIBLIOGRAPHY The following books and websites have been referred by me during my project work.772 23.65.571 6.94.028 22.214.171.124. Financial Management I.76.798 22.58.960 126.96.36.199.49.200 14.310 10.200 16.200 21.056 188.8.131.523 184.108.40.206.31.41.293 12.515 1.200 220.127.116.11.18.104.22.168.963 62.95.629 47.381 4.368 29.500 87.22.616 77.851 22.214.171.124.126.96.36.199.PANDY .06.13.896 188.8.131.52 1.64.910 184.108.40.206 220.127.116.11.76.918 18.104.22.168.22.214.171.124.56.72.398 34.510 126.96.36.199.188.8.131.52 1.330 184.108.40.206.55.81.998 1.145 40.28.153 1.701 95.571 1.95.36.07.558 1.M.89.608 220.127.116.11.431 2.304 27.704 18.104.22.168.141 3.429 22.214.171.1244 48.20.Deffered tax liabilities TOTAL LIABILITIES(6+7+8+9) 126.96.36.1998 3.222 19.42.Loan funds: Secured loans Unsecured loans TOTAL 8.
Y.2.KHAN WEB SITES WWW.COM WWW.GOOGLE. Financial Management KHAN AND JAIN 3. Management Accounting M.FOODSANDINNS.COM .
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