Submitted in partial fulfillment of the requirement For the award of the Degree Of



Reg. No.: 07751E0054 Under the guidance of

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.




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

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.

4. it is said to be an application or outflow of funds. cost and control. 3. 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. 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.According to Phillippatus. sources and uses of funds. The term flow of funds means transfer of economic and values from one asset of equity to another. statement of changes in financial position. 2. where got. It is a statement showing sources and uses of funds for a period of time. PROCUREMENT OF FUNDS 1. movement of working capital statement movement of funds statement. Funds flow statement is called by various names such as sources and application of funds. 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. As funds can be obtained from different sources so procurement of funds is considered as an important problem of business concerns. 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. where came in and where gone out statement. "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". summary of financial operations. 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. funds received and . Funds procured from different sources have different characteristics in terms of risk. where gone statement. Financial management constitutes risk. 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´. cost and control. 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¶. 5.

how ever it has certain limitations also which are listed below: 1. funds statement etc. 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. Net profit can also be computed by comparing the balance sheet at beginning and the end of the period. 2.disbursed statement. 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 should be remembered that a funds flow statement is not a substitute of an income statement or a balance sheet. arrangement of data given in the financial statements. LIMITATIONS OF FUNDS FLOW STATEMENT The funds flow statement has a number of uses. the profit and loss account is prepared to compute net profit. It is essential historic in nature and projected funds flow statement cannot be prepared 5. It provides only some additional information as regards changes in working capital. It can not reveal continuous changes. It is not an original statement but simply. 4. Generally. 3. 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). This fact . Changes in cash are more important and relevant for financial management than the working capital.

The profit and loss account is a ³score board´ of the firms performance during a period of time. the difference in beginning and ending owner¶s equity is the net profit (or net loss). It indicates the financial condition or the state of affairs of a business at a particular moment of time. 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. as measured by its resources and obligations. 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. The earning capacity and potential of a firm are reflected by its profit and loss account. as a starting point. Thus. 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 . Net profit (or net loss) for a period is equal to the change in owner¶s equity during that period. Since the profit and loss account reflects the results of operations for a period of time. The generally accepted convention is to show one year events in the profit and loss account.emphasizes the role of the profit and loss account as a link between consecutive statements of financial position. However. 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. BALANCE SHEET Balance sheet is the most significant financial statement. It is a flow statement. the balance sheet reveals the firms financial position on specific date. liabilities and owners equity for a business firm as on a specific date. Thus. The balance sheet is a stock or status statement as it shows assets. liabilities and owners equity at a point of time. In the language of accounting balance sheet communicates information about assets. creditors. It provides a snapshot of the financial position of the firm at the firms accounting period.

e. h.Profit & loss account Capital reserve Capital redemption reserve Provision for depreciation against fixed assets Appropriate of profits a. 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. d. c. 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 . g.

An increase in current assets increases working capital. Statements of sources and application of funds. A decrease in current assets decreases working capital. 2. SIGNIFICANCE AND IMPORTANCE OF FUNDS FLOW STATEMENT y It helps in the analysis of financial operations. . Broadly speaking the preparation of a funds flow statement consists of two parts: 1. 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. Working capital = Current assets ± Current liabilities 1. Raw materials Work in process Stores and spares Finished goods Provision for taxation if it does not amount to appropriation of profits. Statement or Schedule of changes in working capital funds. An increase in current liabilities decreases working capital and. 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.Provision against current assets Inventories or stocks such as a. 2. USES. 4. d. c. A decrease in current in current increases working capital. b. 3.

It helps in a appraising the use of working capital. It acts as a future guide. It helps in the proper allocation of resources. 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 knowing the overall credit worthiness of a firm.y y y y y y It throws light on many perplexing questions of general interest. It helps in the formation of realistic dividend policy.

Institutional Loans D. Trading profit or funds from operations. Sale of Investment and other fixed assets E. Issue of share capital B. Issue of Debenture C. c) Redemption of debentures d) Purchase of Investment and other fixed assets.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.

Collectively. but also imported 2. including leading varieties like Alphonso.2 thousand metric tons of mango juice. or only about 0. exports of fresh mangos from India averaged approximately 42. India is a minor exporter of mango and mango products at this time. Moreover. During the five±year period from 1998±2002. Additionally. Despite this large mango production. India is well positioned to capitalize on this opportunity with a very large national production of mangos. the consumption growth for mangos in the United States and Europe has average 10±15% per year during the last 5 years. . Collectively. Data from 2001 indicated that India exported 3. mango is a preferred fresh fruit within the Indian domestic market. Data from 1995 indicated that India exported 37.56 million metric tons in 2003.4 thousand metric tons. 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. Mango is in strong demand within the worldwide retail sector. Data on exports of Indian mango pulp and juice products are more limited. The total market value of Indian mango and mango pulp represents 25% of the value of agricultural and processed food products exported by India. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand.4% of mango production during this time frame. as well as globally. This accounts for 41% of the estimated worldwide mango production of 25.7 thousand metric tons of mango pulp.2 thousand metric tons of mango juice. these observations indicate that.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.

and a more efficient supply chain. improved packing and grading facilities. PFID²F&V partnerships will also help identify and facilitate resources necessary for enhancing the mango supplychain such as cold storage facilities. increase farmer incomes. These observations with mango are consistent with aggregate data available on Indian fruit and vegetable exports. This report concludes that it is imperative to streamline the mango supply chain in order to reduce wastage and raw material costs. among others. One barrier to efficient development of the Indian mango industry is an exceedingly complex supply chain. Within the value chain. INDIA MANGO & MANGO PULP INDUSTRY DEVELOPMENT Through partnerships with mango growers. as well as employment of certification systems. testing facilities. (Sources: India Ministry of Food Processing Industries and Rambo bank Report). Furthermore. . 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. and Indian government organizations. Ultimately. 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. export organizations. will lead to better yields. India exports less than 1% of its mango crop as fresh mangos or processed mango products. processors. Education and training in Good Agricultural Practices and other sanitary standards. 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. 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.despite being by far the world¶s largest mango producer. pesticide use in accordance with regulations. and development the farmer base at commercial and social levels. and logistics management. PFID²F&V is working to strengthen the small and medium mango grower base by providing capacity building at all levels. these steps will help stabilize prices.

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. notable results are beginning to show in the form on increasing contributions from partnership members.000 hectares in Krishna Giri district Mango pulp processed annually is 50.000 tones Farmers have to go to Bangalore. as there is no testing facility in Krishnagiri Farmers are not getting fair price. Thiagarajan. only 1% of the total mango production in India is exported.000 tones by 2010 Mango is raised in 36. 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. 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. together with our two India-based coordinators. One reason contributing to this poor export performance is that overseas buyers have stricter standards than are currently accepted within the Indian domestic market. GOALS OF INDIA MANGO MARKET DEVELOPMENT Currently.MANGO PULP INDUSTRY HOPES o o o o o Mango pulp production to reach 75. o PFID partnerships can assist mango growers and processors in developing an "India" brand image for fresh mango and processed mango products that meet . Dr. MSU/PFID-F&V. now. 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. just over one year from project start-up. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market.

FOODS AND INNS Ltd began its fruit processing operations in early 70s. generating employment and export growth. and packaging which enhance shelf life of food products. Soya-based products. Processed Fruits etc. plantation. o After demonstrated success in developing a strengthening the market development of mangoes. FOOD PROCESSING Food processing involves any type of value addition to agricultural or horticultural produce and also includes processes such as grading. COMPANY PROFILE HISTORY OF FOOD AND INNS Ltd. mineral water. Far East. sorting.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. high protein foods etc. consumption. India's food processing sector covers a wide range of products fruit and vegetables. The government has accorded it a high priority. The division was set up in 1967 and since then has handled a wide range of products .such as Sesame Seeds. milk and milk products. with a number of fiscal relief¶s and incentives. The Food Processing Industry sector in India is one of the largest in terms of production. USA. The food processing industry provides vital linkages and synergies between industry and agriculture.consumer preferences. export and growth prospects. Middle East etc. PFID India liaisons can easily adapt this approach to the further development of other fruit and vegetable products in India. alcoholic beverages. Western Europe. 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. FOODS AND INNS Ltd has established it's presence as a reliable and competitive exporter to Coca Cola. grain processing and other consumer product groups like confectionery. chocolates and cocoa products. The predominant mango varieties grown in India make this product unique in country and abroad. for minimizing pre/post harvest wastage. fisheries. to encourage commercialization and value addition to agricultural produce. BACKGROUND OF FOOD AND INNS Ltd . . meat and poultry.

In its effort to be a forerunner in the chosen areas of business in terms of best practices in quality and technology. Concentrates and Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the local farming community wealth. the industry and the nation in a phased manner. thereby minimizing the fruit handling damages and high value realizations. FIL plans to benefit armors. PRINCIPAL MANUFACTURING DIVISIONS AND PRODUCT RANGE DIVISION PRODUCT RANGE Aseptic Canning Purees and concentrates of Mango. FOOD AND INNS Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees. Frozen Frozen fruit purees & IQF chunks. 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. the mango belt in India. Consumer packs of Indian vegetables & catering packs for mango Chutneys. FOODS AND INNS LTD is encouraging farmers to mobilize the fruits directly to the factory.Situated at Chittoor in Andhra Pradesh. Further to educating farmers with latest horticultural techniques. frozen IQF vegetables & frozen Indian snacks like Samosa and Ptras. . Guava & Papaya Paste. The farming community is an integral part and forms the backbone of the organization. Guava & Papaya Institutional packs of mango products.

B.No Name of the Director 1 2 3 4 5 6 Mr..5 crores (USD1.Maniar Mr. looking after the routine affairs of the company. Banana. innovative R & D and Lab facilities. Utsav Dhupelia . the doyen guidance of Mr.K. is the brain and brawl for taking the company¶s turnover from Rs. Engineer Mr.C. Trivedi Mr.Spray Drying Fruit powder like Mango.1 MIO) to Rs.. Dalal Director Solicitor Foreign Director Solicitor Ex.Utsav coupled with the contribution of other directors. With the back up of technical and managerial support staff.160 Crores (USD 16 MIO) giving the status of government recognized EXPORT HOUSE. a Chartered Accountant from U. M.D. IIM Professor Director Mr. Tomato and beat root.M. D.B.Utsav Dhupelia Mr. PRODUCTS . D. the company is poised for a steady and continuous growth graph moving upwards in all Para meters. Orange.Raymond Simkins Mr. the state of art technology implementation. BOARD OF DIRECTORS S.


CUTTING EDGE TECHNOLOGY FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic filling line of SIG.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. This place has been earmarked to host Integrated Food Complex of International standards. The facility currently has a tropical fruit Puree / Concentrate processing plant and the pack house for preparing the Fresh Fruits & Vegetables. 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.Mizzen. Italy to produce natural fruit pulps & concentrates. INITIATIVES SPAN THE FOLLOWING DISCIPLINES .

PURE & CONCENTRATE FACILITY . o Two stage washing of fruits to ensure HACCP quality requirement. o Curved corners and food grade epoxy painted walls to avoid dust accumulation and to facilitate easy washing. o Special food grade self-leveling epoxy flooring to maintain optimum hygienic conditions. 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. 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 Integrated Enterprise Resources Planning system is in place to automate business processes and provide data for analysis and reporting. o Utility lines are routed outside the plant to keep the interiors free from dust accumulation.o PLC operated equipments for better control over monitoring and operations with supervisory units. EFFICIENT PLANT LAYOUT o Minimal drop in power and steam transfer. allowing a closer control on quality and operations. o High speed advanced Mono block aseptic filling machine supplied by SIG Mizzen. o Two-stage sterilization to retain the natural flavor and aroma.

Lemon. STAGE OF USE OF WATER TO THE BEST EFFECT IN OUR FACTORY Our main source of water is bore wells. Without water there is no life on the earth. The processing line is fully integrated and controlled by PLC. But. To manage appropriately & conserve the water. bananas are processed along with tropical vegetables like Okra. pre cooling chambers and cold storage to handle fresh fruits and vegetables. we are taking following steps at various locations of its use: . From there it is pumped to over head tank to supply to various locations of use. It is a nature¶s gift. therefore. This ensures irradiation of the fruit flies in the fresh fruit. The facility also holds ripening chambers. FOOD AND INNS Ltd is the first private organization to set up this facility in the country. Egg plant. Water from all bore wells is collected in a sump. Bitter gourd etc. The water is potable. 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 . It is as important to the fruit processing industry as to the living being. Fresh fruits including mangoes. The line has a capacity to process 10 metric tones per hour ripened fruits. WATER MANAGEMENT Water is an essential & precious natural resource. water is becoming scarce year by year due to increase n its consumption in industries & agriculture sectors & indiscriminate use /wastage by human beings. FOOD AND INNS Ltd has commissioned the VHT facility. PACK HOUSE FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing facility from Grief.The fruit processing aseptic line is from SIG-Mazzini of Italy. Spain. VAPOUR HEAT TREATMENT To enable Fresh Mango exports to countries like Japan and Korea.

Expansion in 4th Aseptic manufacturing capacity. Off-shore logistical service providers has made the supply chain process extremely competitive. This water is chl0rinated to control the contamination by continuous dosing of chlorine in the washing tub. o STEAM GENERATION Water for boiler feeding is treated in water softener to reduce the hardness. FOODS AND INNS Ltd expertise in the business and its contacts with Agents\Brokers. FUTURE PLANS y y y y Development of the Indian market for foods and inns. Blender-bottlers. GERMANY o ISO 9001:2000 (QUALITY MANAGEMENT SYSTEM) BY TUV. OUR CERTIFICATIONS INCLUDE o HACCP (FOOD SAFETY CERTIFICATION) 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. The steam condensate of evaporator is recycled to boiler to save water & energy as condensate will have high temperature. GERMANY o KOSHER BY STAR-K. . Use of IT as a tool to further Business goals. Thrust of exports.o FRUIT WASHING The water is re-circulated after filtration up to it becomes dirty. Given our renewed emphasis on this product line we are strengthening relationships in key markets across the buyer spectrum. understanding unique requirements and delivering value to select global customers. End User.

Financial statement of the company. We collect through books magazines.y Setting up of a Central R&D lab. 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. journals & websites etc. From financial department of the company retaining to the last 4 years. newspaper. 3. 4. the secondary data was collected from the company like 1. 2.. Backward integration for improved quality of raw materials using contract farming/ organic cultivation. Annual reports of the company during 2004-2008. Company records related to financial management. In this study. . SECONDRY DATA: Secondary Data are already present one and it is second hand information.

To understand flow of funds in current or non-current accounts. 3. 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. 4. . To analyze the changes of financial position of Foods and Inns Limited enterprises between two dates. From various financial management next books. To find out the sources from which additional funds were derived and the use to which their sources were put. OBJECTIVES 1. 5. To know various needs for which funds were obtained during a particular period based in which these funds where employed.5.

It is an essential tool for the financial analysts and is of primary importance to the financial management. 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.SCOPE OF THE STUDY The present study focuses as sources of funds and application of funds for a period of time. It is a technical device designed to analyze the changes in the financial condition of the business enterprises between two dates. The term funds used here means working capital that is the excess of current assets over current liabilities. The basic purpose of the funds flow statement is to reveal the changes in the . 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.

It helps in appraising the use of working capital and finally it acts as future guide.working capital on the two balance sheet dates. It helps in the formation of realistic dividend policy. 4. LIMITATIONS 1. The study based on the available annual reports and internal information only . It cannot reveal continuous changes. It provides only some additional information as regards changes in working capital 3. It helps in the analysis of financial operations. It helps in the proper allocation of resources. 2. It should remember that a funds flow statement is not a substitute of an income statement or a balance sheet.

16.558 8.53.500 87.200 .293 OF CHANGES IN WORKING CAPITAL Particulars 2004 2005 Effect on Working Capital Increase Decrease Current Assets(C.500 10.A): Inventories S. 12.62.707 36.A Current Liabilities(C.L Net Working Capital(W.67.293 25.000 9.L) 17.507 7.293 62.51.714 9.915 56.31.L): Current Liabilities Provisions 7.485 Total C.773 TOTAL 7.67.507 5.858 9.622 12.97.990 2.debtors Cash & bank b/s Loans & Advances Investment Total C.288 25.851 12.C) (C. 7.91.714 25.714 Increase in W.

The financial position of FOODS AND INNS LTD in this particular year is good STATEMENT OF CHANGES IN WORKING CAPITAL TABLE 4. As a result the funds flow statements.086 7.586 ---- Amount 5.54. In the particular year the current assets are increased then the current liabilities.19.81.1 FUNDS FLOW STATEMENT FOR THE YEAR 2005 TABLE NO: 4.41. the main sources of funds are secured and unsecured loans.07.507 13.060 13.41.TABLE NO: 4.3 Particulars 2005 2006 Effect on Working .54.22.341 Increase in Working Capital 4. differed tax asset and liabilities.963 10.593 Interpretation: Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance. The firm utilizing this fund for the purchasing of fixed assets.675 Purchase of Fixed Asset Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Deferred Tax Assets Capital W-I-P Decrease in Working Capital Amount Applications 75.

248 28.70.943 1.A Current Liabilities(C.280 Decrease Investment 2.658 16.28.140 12.82.L) Increase in W.89.38.166 Total C.82.248 616.601 61.017 36.58.29.A): Inventories S.82.772 15.31.A-C.773 13.534 2.97.716 84.565 Cash & bank b/s Loans & Advances 12.81.418 87.534 9.53.608 59.918 4.601 .Capital Increase Current Assets(C.21.97.354 12.30.L Net Working Capital(W.12.293 12.39.C) (C.33.248 2.865 2.685 4.050 25.48.915 1.L): Current Liabilities Provisions Total C.

385 1.989 2.856 1.4 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 1.100 Capital W-I-P Interpretation: .88.FUNDS FLOW STATEMENT FOR THE YEAR 2006 TABLE NO : 4.01.000 ---- Applications Amount Purchase of Fixed Asset 94.43.355 Increase in Working Capital 2.

As a result the funds flow statements.86.L Net Working Capital(W.805 8.772 6.28.685 3.222 2. In the particular year the current assets are increased then the current liabilities. 2. differed tax liabilities.733 1.77.088 1.248 31.938 14.671 44. the main soureces of funds are secured and unsecured loans.97.86.A Current Liabilities(C. 3.92.31.L) Increase in W.98.14.011 FUNDS FLOW STATEMENT FOR THE YEAR 2007 .47.5 Particulars 2006 2007 Effect on Working Capital Increase Decrease Current Assets(C.97.310 10.L): Current Liabilities Provisions Total C.97.180 1.485 31.733 31.84.debtors Cash & bank b/s Loans & Advances Investment Total C.60.685 42. 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.716 8.Comparing the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.485 6.571 13.38.C) (C.61.72.963 2.758 2.911 18.14.918 12.95.055 2.82.94. STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 9.A): Inventories S. As a result the funds flow statements.08.32.661 2.87.024 19.42.180 14.61.00.debtors Cash & bank b/s Loans & Advances Investment 16.685 2.311 50.6 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 2.130 96. the main sources of funds are secured and unsecured loans.939 14. differed tax liabilities.84. In the particular year the current assets are increased then the current liabilities.47.250 8.268 Capital W-I-P 74.47.41.A): Inventories S.02.52.783 Increase in Working Capital 2.93.685 .726 3.485 8.06.884 Interpretation: Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance.213 3.838 ------- Applications Amount Purchase of Fixed Asset 5.51.132 77.884 8.12. 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.77.TABLE NO: 4.98.

00.734 .196 13.733 31.L): Current Liabilities Provisions 44.86.C 1.55.793 19.214 Total C.7 FUNDS FLOW STATEMENT FOR THE YEAR 2008 TABLE NO: 4.22.196 Current Liabilities(C.98.733 29.L Net Working Capital(W.733 11.27.732 STATEMENT OF CHANGES IN WORKING CAPITAL TABLE NO: 4.196 31.513 Increase in Working Capital -------- 49.229 Decrease in Working Capital 1.90.752 19.538 decrease in W.Total C.01.061 Applications Purchase of Fixed Asset Amount 3.55.C) (C. Sources Amount Reserves & Surplus 2.433 Deferred Tax Liability 34.92.L) 31.085 Secured &Unsecured Loans 8.510

The working capital is increased year by year except last year. the main sources of funds are secured and unsecured loans. The differ tax liability is increased in 2005-2006. . 2. 5. Apart to this the surplus funds also increased. It is founded that the company is holding share capital stably.Then it fall down. 4. The company receives the secured and unsecured loans indicate fluctuating position. 3. differed tax liabilities. As a result the funds flow statements. The company was highly purchased the fixed assets in the year 2005&2007. The firm utilizing this fund for the purchasing of fixed assets.Interpretation: Comparing the year 2007 and 2008 the statement of changes in working capital shows the decreasing balance. In the particular year the current assets are decreased then the current liabilities. 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.

. SUGGESTIONS y The company may increase their share capital it helps to get more strength in financial position. 8. 7. y Tax liabilities should also be maintained in a standard manner. The working -in. It is to require raising short terms funds to solve the financial problems.progress rapidly increased by large variation with the amount. The working capital is increased in 2005 to 2007 with a low variation in the year the working capital will be decreased. In 2008 it is decreased. y Regularly use funds in purchase of fixed asset it make profitability. The investment is increased year by year up to 2007.6. the statement shows decreasing working capital in the company. y In 2008.

secured& unsecured loans.I.P.CONCLUSION It can be concluded that in FOODS & INNS PRIVATE LTD The working capital in increased year by year except last year. And its main sources of funds are deferred tax liability. . The main applications of funds are purchase of fixed assets & capital W.The over all performance of FOODS &INNS PVT LTD is very good.

168 1.70.709 1.79.741 5.297 1.825 (1.51.571) 2.01.640 5.10.313 68.278 7.92.709) 2.955) 3.718 (1.56.868 29.385 1.71.160 35.871 52.32.427 2.636 1.097 46.142 4.969 54.22.114 (+)Operating income Operating profit (-)Non-operating expenses (+)Non-operating income Profit / loss before tax (-)Provision for tax Profit / loss after tax ( .483 1.35.204 3.754 95.02.870 2.651 44.925 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 61.798 4.471 (4.92.043 4.00.160 16.595 3.351 53.24.161

59.43.658 16.180 14.841 32.98.024 35.661 Cash&bank balances 74.Balance Sheet of Foods and Inns ltd.50.06.938 14.060 34.Deffered tax assets 5.515 40.665 75.405 2.685 95.56.689 46.93.950 2.31.275 21.747 26.354 12.793 12.685 . expenditure TOTAL ASSETS(1+2+3+4+5) LIABILITIES: 6.915 41.293 Loans & advances 12.95.Currentassets loans&advances Inventories 7.716 8.Fixed assets Capital work in progress TOTAL FA 4.330 4.72.175 61.77.968 47.24.911 27.43.000 62.261 8.13.685 77.481 27.042 provisions: 24.311 TOTAL CA 2.17.288 33.75.Current liabilities.773 2.33.055 Sundry debtors 4.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: 1.29.977 94.86.05. 95.58.141 3.160 18.398 34.94.310 10.61.M.89.58.028 1.60.910 12.571 1.960 19.918 13.82.235 37.36.431 2.772 23.500 10.22.558 1.257 1.90.629 47.608 2.76.998 1.Deffered tax liabilities TOTAL LIABILITIES(6+7+8+9) 7.200 87.Share holders funds: Share capital Reserves & surplus TOTAL 3.153 19.61.95.Current liabilities Provisions TOTAL CL .896 48.851 24.963 62.40.330 9.15.200 14.499 BIBLIOGRAPHY The following books and websites have been referred by me during my project work.798 22.42.86. Financial Management I.54.72.Loan funds: Secured loans Unsecured loans TOTAL 8.200 16.76.304 19.200 69.571 6.81.429 15.145 40.

Y.GOOGLE. Management Accounting M.2. Financial Management KHAN AND JAIN 3.FOODSANDINNS.COM .COM WWW.KHAN WEB SITES WWW.

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