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.

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

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

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

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

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

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 acts as a future guide. It helps in a appraising the use of working capital.y y y y y y It throws light on many perplexing questions of general interest. It helps in the proper allocation of resources.

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

exports of fresh mangos from India averaged approximately 42. mango is a preferred fresh fruit within the Indian domestic market. but also imported 2. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand. Despite this large mango production.4% of mango production during this time frame. 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. these observations indicate that. or only about 0.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. This accounts for 41% of the estimated worldwide mango production of 25. India is well positioned to capitalize on this opportunity with a very large national production of mangos. Data from 1995 indicated that India exported 37. India is a minor exporter of mango and mango products at this time. 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. Additionally. Moreover. the consumption growth for mangos in the United States and Europe has average 10±15% per year during the last 5 years. Data on exports of Indian mango pulp and juice products are more limited. Collectively.56 million metric tons in 2003.2 thousand metric tons of mango juice. Mango is in strong demand within the worldwide retail sector. Collectively.2 thousand metric tons of mango juice.7 thousand metric tons of mango pulp. as well as globally. .4 thousand metric tons. including leading varieties like Alphonso. During the five±year period from 1998±2002.

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

GOALS OF INDIA MANGO MARKET DEVELOPMENT Currently. Thiagarajan. together with our two India-based coordinators. 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. now.000 tones Farmers have to go to Bangalore.000 tones by 2010 Mango is raised in 36. 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. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market. only 1% of the total mango production in India is exported. just over one year from project start-up.MANGO PULP INDUSTRY HOPES o o o o o Mango pulp production to reach 75.000 hectares in Krishna Giri district Mango pulp processed annually is 50. One reason contributing to this poor export performance is that overseas buyers have stricter standards than are currently accepted within the Indian domestic market. MSU/PFID-F&V. notable results are beginning to show in the form on increasing contributions from partnership members. 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. 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. as there is no testing facility in Krishnagiri Farmers are not getting fair price. 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.

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

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

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


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.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. INITIATIVES SPAN THE FOLLOWING DISCIPLINES . Italy to produce natural fruit pulps & concentrates.Mizzen. spread over an area of 15 acres. CUTTING EDGE TECHNOLOGY FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic filling line of SIG.

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

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

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

. 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.y Setting up of a Central R&D lab. Financial statement of the company.. In this study. We collect through books magazines. newspaper. From financial department of the company retaining to the last 4 years. the secondary data was collected from the company like 1. 4. 3. SECONDRY DATA: Secondary Data are already present one and it is second hand information. 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. 2.

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

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

It helps in the formation of realistic dividend policy. LIMITATIONS 1. It provides only some additional information as regards changes in working capital 3. It helps in the analysis of financial operations.working capital on the two balance sheet dates. It helps in the proper allocation of resources. 4. It cannot reveal continuous changes. 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. It should remember that a funds flow statement is not a substitute of an income statement or a balance sheet.

793 TOTAL 7.19.915 56.565 Total C. 34.87.500 25.67.93.L): Current Liabilities Provisions 7.485 74.293 10.207 25.67.000 9.89.507 25.561 26.11.714 Increase in W.990 2.507 7.668 12.AC.354 25.22.622 OF CHANGES IN WORKING CAPITAL Particulars 2004 2005 Effect on Working Capital Increase Decrease Current Assets(C.37.707 36.288 7.665 2.85.293 8.16.51.A Current Liabilities(C.66.L Net Working Capital(W.73.058 .29.debtors Cash & bank b/s Loans & Advances Investment Total C.43.39.16.C) (C.66.858 9.53.773 1.A): Inventories S.

507 FUNDS FLOW STATEMENT FOR THE YEAR 2005 TABLE NO: 4.54. 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.968 75.341 Increase in Working Capital 4.39. As a result the funds flow statements.22.3 Particulars 2005 2006 Effect on Working .675 Purchase of Fixed Asset 27.593 13.02.963 10.086 7.2 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Deferred Tax Assets Capital W-I-P Decrease in Working Capital Amount Applications 2.060 The firm utilizing this fund for the purchasing of fixed assets.TABLE NO: 4. differed tax asset and liabilities.586 ---- Amount the main sources of funds are secured and unsecured loans.593 Interpretation: Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance.19.54.

418 7.166 Total C.915 1.685 4.30.A): Inventories S. 4.C 28.310 87.64.C) (C.293 12.84.debtors Cash & bank b/s Loans & Advances 12.32.658 16.534 25.38.L): Current Liabilities Provisions Total C.A-C.601 61.52.851 13.81.Capital Increase Current Assets(C.43.97.601 .248 2.30.716 36.017 10.L Net Working Capital(W. Current Liabilities(C.248 616.21.558 1.27.055 59.534 2.248 Decrease Investment 2.140 8.29.L) Increase in W.772 15.70.565 42.

91.72.000 ---- Applications Amount Purchase of Fixed Asset Capital W-I-P Interpretation: .385 1.355 Increase in Working Capital 2.FUNDS FLOW STATEMENT FOR THE YEAR 2006 TABLE NO : 2.856 1.4 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 3.88.

13.222 2.61.716 8.088 1. As a result the funds flow statements.911 18.C In the particular year the current assets are increased then the current liabilities.571 13.78.A): Inventories S. 2.82.793 differed tax liabilities.98.166 44.28.011 1.86.06.AC.252 9.758 12.310 10.733 31.248 31.685 3. 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.C) (C.82.89.055 Current Liabilities Provisions Total C.06.95.963 2.L) Increase in W.14.60.024 3.12.918 13.733 2.685 42.726 FUNDS FLOW STATEMENT FOR THE YEAR 2007 .805 8.14. STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 4.97.733 6.95.30.A Current Liabilities(C.debtors Cash & bank b/s Loans & Advances Investment Total C.85.38.5 Particulars 2006 2007 Effect on Working Capital Increase Decrease Current Assets(C. 31.671 1.39.L Net Working Capital(W.86.43.04.Comparing the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.000 2. the main soureces of funds are secured and unsecured loans. 14.75.608 2. 5.77.67. In the particular year the current assets are increased then the current liabilities.47.616 Capital W-I-P 74.81.726 4.884 Interpretation: Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance.04.32.28.debtors Cash & bank b/s Loans & Advances Investment ------- Applications Amount Purchase of Fixed Asset 5.47.41. differed tax liabilities.911 7.132 77.69.6 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 14.TABLE NO: 4. As a result the funds flow statements.A): Inventories S.42.84.685 2.884 8.44.156 3.00.685 .98.71.130 96.17.75. the main sources of funds are secured and unsecured loans.024 19.661 2.000 14. 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. 50.213 2.485 8.783 Increase in Working Capital 8.838 57.

16.L) 31.A Current Liabilities(C.90.433 Deferred Tax Liability 49.222 19.86.733 11.C 19.00.8 Sources Amount Reserves & Surplus 2.L Net Working Capital(W. STATEMENT OF CHANGES IN WORKING CAPITAL TABLE NO: 13.C) (C. Total C.513 Increase in Working Capital -------- 31.538 decrease in W.32.L): Current Liabilities Provisions 44.92.061 9.86.229 Decrease in Working Capital 1.14.732 29.704 Applications Purchase of Fixed Asset Amount 3.7 FUNDS FLOW STATEMENT FOR THE YEAR 2008 TABLE NO: 4.085 Secured &Unsecured Loans 8.74.196 2.733 31.734 .14.196 6.Total C.74.AC.14.00.

the main sources of funds are secured and unsecured loans. 3. The financial position of FOODS AND INNS LTD in this particular year is good FINDINGS 1. The company was highly purchased the fixed assets in the year 2005&2007. The differ tax liability is increased in 2005-2006.Interpretation: Comparing the year 2007 and 2008 the statement of changes in working capital shows the decreasing balance. 2. . The working capital is increased year by year except last year. The firm utilizing this fund for the purchasing of fixed assets.Then it fall down. As a result the funds flow statements. It is founded that the company is holding share capital stably.Then in 2006&2008 the company used low funds for purchasing of fixed assets. In the particular year the current assets are decreased then the current liabilities. differed tax liabilities. The company receives the secured and unsecured loans indicate fluctuating position. 4. Apart to this the surplus funds also increased. 5.

y In 2008. .6. It is to require raising short terms funds to solve the financial problems. y Regularly use funds in purchase of fixed asset it make profitability. the statement shows decreasing working capital in the company. y Tax liabilities should also be maintained in a standard manner. The investment is increased year by year up to 2007.progress rapidly increased by large variation with the amount. SUGGESTIONS y The company may increase their share capital it helps to get more strength in financial position. The working -in. 7. 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. 8.

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

62.033 ( 7.313 4.581 ( 2.63.868 9.974 54.588 16.326 52.27.574 .168 30.161 51.384 1.076 1.81.537) 7.73.870 2.99.142 31.96.297 29.863 5.427 2.571) 48.101 3.160 (+)Operating income Operating profit (-)Non-operating expenses (+)Non-operating income Profit / loss before tax (-)Provision for tax Profit / loss after tax (1.39.955) 3.54.792 55.718 1.90.741 1.812 39.80.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 61.13.451 2.754 52.043 4.651 79.385 2.31.925 97.351 53.26.511 1.47.562 (1.

700 47.00.685 77.257 46.044 16.773 8.29.515 40.156 Sundry debtors 3.747 41.56.62.Miscellanious expenditure TOTAL ASSETS(1+2+3+4+5) LIABILITIES: 6.950 2.685 . liabilities.288 7.59.938 14.31.490 8.689 1.51.311 TOTAL CA 2.685 32.90.354 19.977 2.50.067 16.30.042 6.08.055 2.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.Fixed assets Capital work in progress TOTAL FA 3.85.175 61.43.Currentassets loans&advances Inventories 7.665 4.93.865 2.08.Invesments 8.661 Cash&bank balances 47.180 33.75.Deffered tax assets 5.939 Loans & advances 12.88. provisions: 24.Balance Sheet of Foods and Inns ltd.44.28.185 34.293 27.668 12.

499 BIBLIOGRAPHY The following books and websites have been referred by me during my project work.19.222 19.68.304 10.429 15.58.431 2.200 24.20.160 holders funds: Share capital Reserves & surplus TOTAL 9.24.257 30.65.381 12.50.89.Deffered tax liabilities TOTAL LIABILITIES(6+7+8+9) 29.M.616 77.90.185 1.200 6.500 87.851 47.500 10.30.72.Loan funds: Secured loans Unsecured loans TOTAL 3.924 48.89.608 19.Current liabilities Provisions TOTAL CL Financial Management I.028 44.104 18.772 23.22.510 8.998 1.64.056 33.235 37.48.200 1.07.141 3.91.153 1.64.798 1.96.214 18.93.963 95.05.896 3.58.910 62.PANDY .58.348 69.200 34.200 16.918 13.54.98.

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

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