³A STUDY ON FUNDS FLOW ANALYSIS

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)

By

N.MANJUNATH
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

CERTIFICATE
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

DECLARATION

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.

PLACE: DATE:

N.MANJUNATH Reg. No.: 07751E0054

ACKNOWLEDGEMENT
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.

FINANCIAL MANAGEMENT

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.

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

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

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

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

Statements of sources and application of funds. d.Provision against current assets Inventories or stocks such as a. USES. . 3. 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. 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. c. An increase in current liabilities decreases working capital and. 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. 4. 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. A decrease in current in current increases working capital. A decrease in current assets decreases working capital. 2. 2. b. An increase in current assets increases working capital. Statement or Schedule of changes in working capital funds.

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

Total_______ Applications: a) Payment of share capital b) Repayment of institutional loans. Trading profit or funds from operations. Issue of share capital B. Issue of Debenture C. Institutional Loans D. c) Redemption of debentures d) Purchase of Investment and other fixed assets. . Sale of Investment and other fixed assets E.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.

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.56 million metric tons in 2003. India is well positioned to capitalize on this opportunity with a very large national production of mangos.4% of mango production during this time frame. as well as globally.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 from 2001 indicated that India exported 3. During the five±year period from 1998±2002. including leading varieties like Alphonso. but also imported 2. mango is a preferred fresh fruit within the Indian domestic market.7 thousand metric tons of mango pulp. Moreover. . Despite this large mango production. the consumption growth for mangos in the United States and Europe has average 10±15% per year during the last 5 years. Data from 1995 indicated that India exported 37. India is a minor exporter of mango and mango products at this time.2 thousand metric tons of mango juice. or only about 0. exports of fresh mangos from India averaged approximately 42. The total market value of Indian mango and mango pulp represents 25% of the value of agricultural and processed food products exported by India. Collectively. This accounts for 41% of the estimated worldwide mango production of 25. these observations indicate that. Data on exports of Indian mango pulp and juice products are more limited. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand.2 thousand metric tons of mango juice. Collectively. Mango is in strong demand within the worldwide retail sector. Additionally.

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

notable results are beginning to show in the form on increasing contributions from partnership members. only 1% of the total mango production in India is exported. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market. Thiagarajan. GOALS OF INDIA MANGO MARKET DEVELOPMENT Currently. Dr.MANGO PULP INDUSTRY HOPES o o o o o Mango pulp production to reach 75. 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. 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.000 tones Farmers have to go to Bangalore. One reason contributing to this poor export performance is that overseas buyers have stricter standards than are currently accepted within the Indian domestic market. just over one year from project start-up. as there is no testing facility in Krishnagiri Farmers are not getting fair price. together with our two India-based coordinators.000 hectares in Krishna Giri district Mango pulp processed annually is 50. 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. MSU/PFID-F&V. now. o PFID partnerships can assist mango growers and processors in developing an "India" brand image for fresh mango and processed mango products that meet .000 tones by 2010 Mango is raised in 36. 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.

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

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

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

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. INITIATIVES SPAN THE FOLLOWING DISCIPLINES .Mizzen. spread over an area of 15 acres. This place has been earmarked to host Integrated Food Complex of International standards. The plant has one of the India's single largest fruit processing lines -10 TPH ripen fruit processing with Aseptic Packaging. The facility currently has a tropical fruit Puree / Concentrate processing plant and the pack house for preparing the Fresh Fruits & Vegetables.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. Italy to produce natural fruit pulps & concentrates.

PURE & CONCENTRATE FACILITY . 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. EFFICIENT PLANT LAYOUT o Minimal drop in power and steam transfer. allowing a closer control on quality and operations. o Utility lines are routed outside the plant to keep the interiors free from dust accumulation. 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 PLC operated equipments for better control over monitoring and operations with supervisory units. 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 High speed advanced Mono block aseptic filling machine supplied by SIG Mizzen. o Two-stage sterilization to retain the natural flavor and aroma. o Straight-line process flow design to maintain the hygiene‡ and control in respective areas. o Two stage washing of fruits to ensure HACCP quality requirement.

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

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. Given our renewed emphasis on this product line we are strengthening relationships in key markets across the buyer spectrum. End User. Expansion in 4th Aseptic manufacturing capacity. GERMANY o ISO 9001:2000 (QUALITY MANAGEMENT SYSTEM) BY TUV. 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. Thrust of exports. 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. FOODS AND INNS Ltd expertise in the business and its contacts with Agents\Brokers. Use of IT as a tool to further Business goals. o STEAM GENERATION Water for boiler feeding is treated in water softener to reduce the hardness. OUR CERTIFICATIONS INCLUDE o HACCP (FOOD SAFETY CERTIFICATION) BY TUV. . Blender-bottlers. understanding unique requirements and delivering value to select global customers. FUTURE PLANS y y y y Development of the Indian market for foods and inns.o FRUIT WASHING The water is re-circulated after filtration up to it becomes dirty.

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

5. OBJECTIVES 1. 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. . To find out the sources from which additional funds were derived and the use to which their sources were put. 3. To understand flow of funds in current or non-current accounts. To know various needs for which funds were obtained during a particular period based in which these funds where employed. 4.5.

The basic purpose of the funds flow statement is to reveal the changes in the . Now a days it is being widely used by the financial analyst credit granting institutions and financial managers. 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.SCOPE OF THE STUDY The present study focuses as sources of funds and application of funds for a period of time. 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. 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.

It helps in appraising the use of working capital and finally it acts as future guide. It provides only some additional information as regards changes in working capital 3. 2. It helps in the formation of realistic dividend policy. 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 .working capital on the two balance sheet dates. It helps in the analysis of financial operations. It helps in the proper allocation of resources. LIMITATIONS 1. It cannot reveal continuous changes. 4.

858 9.507 7.22.AC.11.668 12.73.74.85.66.293 62.288 7.000 9.C TOTAL 7.12.622 12.714 25.48.89.89.53.43.58.C) (C.51.39.48.98.37.24.76.08.L): Current Liabilities Provisions 7.43.06.30.80.27.293 1.665 2.207 25.67.06.16.558 8.714 9.714 Increase in W.31.200 26.16.500 10.29.00.19.64.485 74.L Net Working Capital(W.915 56.A): Inventories S.60.565 Total C.658 34.561 4.62.990 2.31.53.93.97.debtors Cash & bank b/s Loans & Advances Investment Total C.058 .293 25.58.22.95.707 36.73.793 12.02.A Current Liabilities(C.87.67.26.507 25.02.773 3.12.L) 17.81.48.354 5.85.858 7.12.61.STATEMENT OF CHANGES IN WORKING CAPITAL Particulars 2004 2005 Effect on Working Capital Increase Decrease Current Assets(C.13.851 1.91.66.500 87.865 2.

12.060 53.086 7.39.507 13.593 13.81.90.TABLE NO: 4.2 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Deferred Tax Assets Capital W-I-P Decrease in Working Capital Amount Applications 2.41.54.25. the main sources of funds are secured and unsecured loans.586 ---- Amount 5.41.54.56.07. differed tax asset and liabilities.73.02.593 Interpretation: Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance.19.675 Purchase of Fixed Asset 27.22.341 Increase in Working Capital 4.3 Particulars 2005 2006 Effect on Working . 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 75.1 FUNDS FLOW STATEMENT FOR THE YEAR 2005 TABLE NO: 4. As a result the funds flow statements. The firm utilizing this fund for the purchasing of fixed assets.963 10.

11.772 15.64.21.28.918 2.12.12.Capital Increase Current Assets(C.601 .L): Current Liabilities Provisions Total C.95.773 8.43.82.685 4.716 84.82.31.310 87.95.601 61.39.565 42.43.A): Inventories S.16.30.418 7.97.76.06.140 12.534 28.60.A Current Liabilities(C.94.49.293 12.248 2.81.714 28.43.27.61.055 59.82.53.248 28.32.72.C 9.65.166 Total C.608 10.865 2.050 25.48.95.L) Increase in W.915 1.53.02.938 4.29.97.52.558 1.58.36.38.943 1.L Net Working Capital(W.017 49.63.66.534 2.31.07.A-C.30.30.280 Decrease Investment 2.84.82.89.70.248 616.851 13.354 12.33.debtors Cash & bank b/s Loans & Advances 12.70.66.90.82.39.C) (C.658 16.820 36.38.

534 3.856 1.989 3.000 ---- Applications Amount Purchase of Fixed Asset 94.FUNDS FLOW STATEMENT FOR THE YEAR 2006 TABLE NO : 4.11.88.748 2.19.70.88.01.91.355 Increase in Working Capital 2.989 Interpretation: .70.06.100 Capital W-I-P 11.4 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 1.00.57.19.82.385 1.43.72.

C 12.40.39.72.77.75.28.733 2.16.A Current Liabilities(C.84.84.733 6.44.74.86.90.75.49.758 12.29.47.Comparing the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.011 1.14.31.12.61.92.726 16. 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.28. In the particular year the current assets are increased then the current liabilities.28.911 18.06.485 6.38.L) Increase in W.608 2.95.671 1.86.L Net Working Capital(W.685 42.733 31.97.772 16.310 10.27.571 13.918 13.00.08.024 3.20.685 3.248 31.debtors Cash & bank b/s Loans & Advances Investment Total C.32.82.86.222 2.963 2.98.L): Current Liabilities Provisions Total C.28.07.14. As a result the funds flow statements.938 14.30.85.97.13.38. the main soureces of funds are secured and unsecured loans.78.97.AC.06.89.12.04.716 8.60.12.04.252 9.95.47. differed tax liabilities.82.793 28.805 8.43.36.011 FUNDS FLOW STATEMENT FOR THE YEAR 2007 .166 44.14.55.180 1.86.5 Particulars 2006 2007 Effect on Working Capital Increase Decrease Current Assets(C.000 2.055 2.485 31.526 2. STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 4.97.A): Inventories S.C) (C.088 1.94.

661 2.726 4.06.67.311 50.69. differed tax liabilities.11. the main sources of funds are secured and unsecured loans.130 96.93.616 Capital W-I-P 74.6 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 2.75.debtors Cash & bank b/s Loans & Advances Investment 16.783 Increase in Working Capital 2.61.TABLE NO: 4.268 5.30.51.485 8.A): Inventories S.84.12.04.87.132 77.13.778 ------- Applications Amount Purchase of Fixed Asset 5. 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.81.06.29.84.884 8.89.71.024 19.156 3.32.12.98.33.28.17.00.87.71.47.42.884 Interpretation: Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance. As a result the funds flow statements.77.180 14.911 7.52.685 .08.939 14.838 57.250 8.02.69.685 2. In the particular year the current assets are increased then the current liabilities.47.213 2.41.75.37.44.000 3.

14.14.00.571 6.82.L): Current Liabilities Provisions 44.733 11.48.196 31.46.AC.16.01.98.86.061 9.48.C) (C.196 1.74.55.86.14.00.12.18.27.510 2.7 FUNDS FLOW STATEMENT FOR THE YEAR 2008 TABLE NO: 4.538 decrease in W.14.793 19.14.Total C.92.433 Deferred Tax Liability 34.482 13.20.48.214 Total C.734 Applications Purchase of Fixed Asset Amount 3.91.01.8 Sources Amount Reserves & Surplus 2.732 11.L) 31.48.733 31.22.752 10.222 19.229 Decrease in Working Capital 1.C 1.28.513 Increase in Working Capital -------- 31.64.526 49.734 .93.11.86.A Current Liabilities(C.86.00.66.732 STATEMENT OF CHANGES IN WORKING CAPITAL TABLE NO: 4.085 Secured &Unsecured Loans 8.85.80.704 2.32.196 31.86.90.L Net Working Capital(W.01.86.80.55.86.74.733 29.41.

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

progress rapidly increased by large variation with the amount. y Tax liabilities should also be maintained in a standard manner.6. y Regularly use funds in purchase of fixed asset it make profitability. 7. SUGGESTIONS y The company may increase their share capital it helps to get more strength in financial position. The working capital is increased in 2005 to 2007 with a low variation in the year the working capital will be decreased. The working -in. 8. In 2008 it is decreased. It is to require raising short terms funds to solve the financial problems. the statement shows decreasing working capital in the company. y In 2008. The investment is increased year by year up to 2007. .

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

15.798 11.58.297 29.37.10.326 2.39.15.84.65.101 5.65.96.50.258 97.56.651 44.741 5.83.92.01.351 53.63.36.64.74.82.483 39.616 48.71.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 61.451 5.42.37.74.160 35.511 1.47.825 4.21.03.55.90.23.96.537) 7.51.52.045 55.974 29.48.34.39.72.66.020 54.36.161 51.838 4.34.85.571) 2.99.06.471 (4.25.46.73.64.98.78.02.56.709) 2.955) 3.97.81.08.406 52.00.73.98.32.31.04.36.26.812 5.427 2.811 79.92.96.74.308 48.574 .92.894 3.461 1.53.35.043 4.176 3.168 30.28.28.20.92.63.843 (1.29.718 93.871 2.10.51.792 4.75.384 1.24.588 16.097 46.41.54.160 3.63.754 95.385 2.76.02.922 1.84.142 31.14.62.709 1.562 (1.925 1.00.278 7.27.870 2.49.76.868 9.16.81.43.10.114 (+)Operating income Operating profit (-)Non-operating expenses (+)Non-operating income Profit / loss before tax (-)Provision for tax Profit / loss after tax (1.12.70.076 4.39.033 68.79.636 45.66.44.204 52.640 4.80.40.16.313 1.01.13.28.19.24.80.40.37.79.47.17.22.76.35.83.18.88.969 1.35.528 1.863 5.581 1.92.84.595 3.57.

915 1.685 95.21.75.14.668 12.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: 1.64.13.450 2.80.716 8.Fixed assets Capital work in progress TOTAL FA 3.19.661 Cash&bank balances 74.977 94.06.29.30.47.14.51.50.49.47.71.31.85.28.Deffered tax assets 5.175 61.43.61.288 7.95.311 TOTAL CA 2.16.024 19.64.354 12.261 8.67.865 2.185 34.793 12.88.24.773 8.00.93.86.72.827 33.685 77.060 6.571 41.56.38.911 7.12.69.50.Currentassets loans&advances Inventories 7.66.293 1.63.85.98.841 32.Current liabilities. provisions: 24.78.07.50.08.36.17.95.08.12.08.70.939 Loans & advances 12.44.658 16.685 69.39.29.05.16.43.330 47.950 2.53.938 14.38.59.31.37.42.71.Miscellanious expenditure TOTAL ASSETS(1+2+3+4+5) LIABILITIES: 6.77.93.62.97.13.59.33.33.75.Balance Sheet of Foods and Inns ltd.405 2.499 .257 46.81.700 26.43.968 47.95.30.93.02.29.09.044 27.81.74.24.772 16.156 Sundry debtors 4.30.180 14.726 4.98.65.19.90.78.12.481 27.067 35.43.275 21.804 3.Invesments 4.055 2.747 2.665 75.515 40.53.000 62.361 19.44.74.689 26.26.490 10.042 20.

93.33.94.07.60.629 47.22.60.46.55.12.76.141 3.72.918 13.96.20.48.22. 1.963 62.54.78.84.185 1.64.231 25.65.235 37.000 9.95.98.74.Current liabilities Provisions TOTAL CL 7.66.348 69.896 3.60.429 15.500 10.200 18.36.28.64.83.510 8.97.381 4.15.65.214 18.056 33.27.200 21.06.72.Loan funds: Secured loans Unsecured loans TOTAL 8.028 44.64.60.12.310 10.58.41.85.Deffered tax liabilities TOTAL LIABILITIES(6+7+8+9) 7.82.98.61.51.76.22.330 1.71.851 13.17.64.22.36.793 19.924 48.257 30.368 29.304 27.49.58.571 1.91.61.89.68.153 1.34.160 1.90.701 95.95.688 3.558 1.910 3.499 BIBLIOGRAPHY The following books and websites have been referred by me during my project work.PANDY .75.515 1.30.13.21.55.398 34.145 40.Share holders funds: Share capital Reserves & surplus TOTAL 9.571 6.798 22.81.06.05.19.431 2.92.58.222 19.94.960 19.98.42.23.65.616 77.16.200 14.15.90.104 18.50.24.M.56.293 12.36.704 62.31.22.55.54.78.86.22.76.13.65.74.94.19.42. Financial Management I.998 1.40.58.500 87.772 23.608 2.67.200 24.200 16.89.58.

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

Sign up to vote on this title
UsefulNot useful