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.

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

This fact . 2. Changes in cash are more important and relevant for financial management than the working capital. It should be remembered that a funds flow statement is not a substitute of an income statement or a balance sheet. We can easily realize the impact of profit & loss account if we remember that revenue is an inflow of assets (or outflow of liabilities) and expenses are an out flow of assets (or inflows of liabilities). arrangement of data given in the financial statements. Net profit can also be computed by comparing the balance sheet at beginning and the end of the period. 4.disbursed statement. It can not reveal continuous changes. 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. Generally. 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. 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. It is not an original statement but simply. how ever it has certain limitations also which are listed below: 1. LIMITATIONS OF FUNDS FLOW STATEMENT The funds flow statement has a number of uses. 3. funds generated and expended statement. funds statement etc. the profit and loss account is prepared to compute net profit.

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

f. b.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. e. h. 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. c. d.

2. Statements of sources and application of funds. Statement or Schedule of changes in working capital funds. c. A decrease in current assets decreases working capital. Raw materials Work in process Stores and spares Finished goods Provision for taxation if it does not amount to appropriation of profits. b. 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.Provision against current assets Inventories or stocks such as a. d. Working capital = Current assets ± Current liabilities 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. An increase in current assets increases working capital. 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. An increase in current liabilities decreases working capital and. 4. 2. USES. . 3.

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 knowing the overall credit worthiness of a firm. It acts as a future guide. It helps in the formation of realistic dividend policy. 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.

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

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. Moreover. India has the potential to create a long±term global market position and to capitalize on the fast growth of mango as a preferred ingredient for the natural package food industry.4 thousand metric tons. including leading varieties like Alphonso. Collectively.2 thousand metric tons of mango juice. mango is a preferred fresh fruit within the Indian domestic market. This accounts for 41% of the estimated worldwide mango production of 25.7 thousand metric tons of mango pulp.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.4% of mango production during this time frame. as well as globally. or only about 0. Despite this large mango production. Collectively. these observations indicate that. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand. Mango is in strong demand within the worldwide retail sector. India is a minor exporter of mango and mango products at this time. The total market value of Indian mango and mango pulp represents 25% of the value of agricultural and processed food products exported by India. Additionally. India is well positioned to capitalize on this opportunity with a very large national production of mangos. but also imported 2. . exports of fresh mangos from India averaged approximately 42. During the five±year period from 1998±2002.56 million metric tons in 2003. Data from 1995 indicated that India exported 37. Data from 2001 indicated that India exported 3.2 thousand metric tons of mango juice.

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

MSU/PFID-F&V. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market.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. only 1% of the total mango production in India is exported.MANGO PULP INDUSTRY HOPES o o o o o Mango pulp production to reach 75. 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. just over one year from project start-up. together with our two India-based coordinators.000 tones Farmers have to go to Bangalore. notable results are beginning to show in the form on increasing contributions from partnership members. 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. as there is no testing facility in Krishnagiri Farmers are not getting fair price. 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. Thiagarajan. 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. GOALS OF INDIA MANGO MARKET DEVELOPMENT Currently. 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.000 tones by 2010 Mango is raised in 36. now.

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

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

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


CUTTING EDGE TECHNOLOGY FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic filling line of SIG. 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. spread over an area of 15 acres.Mizzen. INITIATIVES SPAN THE FOLLOWING DISCIPLINES . The plant has one of the India's single largest fruit processing lines -10 TPH ripen fruit processing with Aseptic Packaging. Italy to produce natural fruit pulps & concentrates.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.

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

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

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

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

4. OBJECTIVES 1. From various financial management next books. To understand flow of funds in current or non-current accounts. 3. 5. 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 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. .5. To find out the sources from which additional funds were derived and the use to which their sources were put.

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.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 . It is an essential tool for the financial analysts and is of primary importance to the financial management. 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. Now a days it is being widely used by the financial analyst credit granting institutions and financial managers.

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

26.000 26.500 10.851 1.865 2.51.30.L) 17.C TOTAL 7.12.293 1.500 (C.990 2.29.98.A): Inventories S.558 8.714 Increase in W.60.288 7.67.658 34.22.L): Current Liabilities Provisions 12.85.354 5.293 25.97.793 2.11.858 74.915 56.A Current Liabilities(C.773 3.31.207 Total C.24.STATEMENT OF CHANGES IN WORKING CAPITAL Particulars 2004 2005 Effect on Working Capital Increase Decrease Current Assets(C.714 25.507 25.858 9.561 4.668 12.058 .707 62.L Net Working Capital(W.37.AC.62.debtors Cash & bank b/s Loans & Advances Investment Total C.

963 10.586 ---- Amount 5. As a result the funds flow statements.54.507 13.593 Interpretation: Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance.675 Purchase of Fixed Asset 53.968 FUNDS FLOW STATEMENT FOR THE YEAR 2005 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. differed tax asset and liabilities.07. the main sources of funds are secured and unsecured loans.56.3 Particulars 2005 2006 Effect on Working .22. The firm utilizing this fund for the purchasing of fixed assets.39. In the particular year the current assets are increased then the current liabilities.12.086 7.TABLE NO: 4.19.341 Increase in Working Capital 4. The financial position of FOODS AND INNS LTD in this particular year is good STATEMENT OF CHANGES IN WORKING CAPITAL TABLE 4.

64.851 13.A Current Liabilities(C.716 84.63.L) Increase in W.60.72.915 1.43.685 4.943 42.06.Capital Increase Current Assets(C.248 28.140 12.97.820 36.773 8.31.81.L): Current Liabilities Provisions Total C.30.354 2.94.534 2.84.772 15.38.248 616. Inventories S.82.601 12.C) (C.310 87.534 28.82.938 4.43.017 49.27.A-C.166 Total C.558 Decrease Investment 2.debtors Cash & bank b/s Loans & Advances 12.52.050 25.918 .248 2.29.658 16.L Net Working Capital(W.65.418 7.90.714 28.

57.72.534 3.70.748 2.4 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 1.82.856 Increase in Working Capital 2.88.989 Interpretation: .91.70.385 1.19.989 3.01.FUNDS FLOW STATEMENT FOR THE YEAR 2006 TABLE NO : Capital W-I-P 11.000 ---- Applications Amount Purchase of Fixed Asset 94. 2.AC.29.75.716 31.39.L) Increase in W.77.011 1.088 18.024 Net Working Capital(W.49.55. As a result the funds flow statements. Cash & bank b/s Loans & Advances Investment Total C.963 9.918 13. differed tax liabilities.28.671 the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.20.C 12.84.248 31.685 3.485 31.32.166 44.726 12.793 28. the main soureces of funds are secured and unsecured loans.90.14.27. 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.733 6.38.733 42.011 FUNDS FLOW STATEMENT FOR THE YEAR 2007 .L): Current Liabilities Provisions Total C.5 Particulars 2006 2007 Effect on Working Capital Increase Decrease Current Assets(C.97.61.C) (C. 2.485 In the particular year the current assets are increased then the current liabilities.222 2.805 8.84.772 16.608 2.571 13.310 10.A): Inventories S.A Current Liabilities(C. STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 4.938 14.180 1.

As a result the funds flow statements. 19.71.268 5.213 Interpretation: Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance.11.911 the main sources of funds are secured and unsecured loans.180 .75. In the particular year the current assets are increased then the current liabilities.000 3.311 50.TABLE NO: 4.77.12.A): Inventories S. differed tax liabilities.783 Increase in Working Capital 4.939 Cash & bank b/s Loans & Advances Investment 16.51.6 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 2.132 77.250 8.616 Capital W-I-P 74.778 ------- Applications Amount Purchase of Fixed Asset 5.84. 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. 8.156 3.838 57.130 96.884 8.98.

86.82.7 FUNDS FLOW STATEMENT FOR THE YEAR 2008 TABLE NO: Decrease in Working Capital 31.41.571 6.222 19.32.C Increase in Working Capital -------- 31.538 decrease in W.214 Total C.085 Secured &Unsecured Loans 8.93.752 31.196 1.18.733 29.482 13.55.L): Current Liabilities Provisions 44.733 31.86.734 Applications Purchase of Fixed Asset Amount 3.74.704 2.AC.Total C. STATEMENT OF CHANGES IN WORKING CAPITAL TABLE NO: Net Working Capital(W.48.793 .80.22.433 Deferred Tax Liability 11.A Current Liabilities(C.526 49.86.C) (C.061 9.510 2.8 Sources Amount Reserves & Surplus 2.

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

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

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

71.01.894 1.406 1.870 3.812 48.385 2.99.709) 3.581 1.51.925 1.651 44.297 29.922 ( 4.718 93.471 (4.863 5.595 3.033 68.562 (1.18.974 29.10.636 45.640 4.43.168 4.204 52.96.868 2.308 48.045 55.351 53.838 39.955) 16.754 95.571) 2.461 2.01.020 54.326 2.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 61.161 (+)Operating income Operating profit (-)Non-operating expenses (+)Non-operating income Profit / loss before tax (-)Provision for tax Profit / loss after tax (1.92.097 35.48.384 1.537) 7.65.258 97.528 1.82.811 1.57.574 .37.142 31.825 1.35.29.

499 .86.85.330 47.275 assets Capital work in progress TOTAL FA 3.804 3.668 12.665 75.311 TOTAL CA 2.47.261 8.33.490 10.685 34.911 27.939 Loans & advances 40.156 Sundry debtors 4.75.042 20.257 26.85.716 8.Deffered tax assets 2.685 16.024 19.64.661 Cash&bank balances 35. provisions: 2.968 47.841 32.19.571 61.354 2.658 16.060 6.02.000 62.450 expenditure TOTAL ASSETS(1+2+3+4+5) LIABILITIES: 6.81.685 26.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: 12.Invesments 4.915 1.44.Currentassets loans&advances Inventories Sheet of Foods and Inns ltd.Current liabilities.62.865 2.95.405 2.938 14.977 94.044

98.153 1.918 3.704 62.Current liabilities Provisions TOTAL CL 7.772 9.348 69.19.214 1.33.431 19.616 29.95.200 14.924 48.851 13.510 8.200 21.Share holders funds: Share capital Reserves & surplus TOTAL 9.222 19.PANDY .963 62.98.60.Deffered tax liabilities TOTAL LIABILITIES(6+7+8+9) 7.96.145 1.81. Financial Management I.94.93.608 3.304 27.500 10.78.85. 1.028 44.76.056 33.05.Loan funds: Secured loans Unsecured loans TOTAL 8.60.160 19.22.688 37.429 24.34.798 22.75.310 18.55.571 6.293 12.499 BIBLIOGRAPHY The following books and websites have been referred by me during my project work.19.23.500 87.12.200 16.571 95.54.M. 47.58.71.

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

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