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OF FOODS AND INNS LTD, CHITTOOR´ Project Report
Submitted in partial fulfillment of the requirement For the award of the Degree Of
MASTER OF BUSINESS ADMINISTRATION
(JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY)
Reg. No.: 07751E0054 Under the guidance of
Mrs.T. HIMABINDU, M.F.M.,
Assistant Professor, Dept of M.B.A.
SREENIVASA INSTITUTE OF TEHNOLOGY AND MANAGEMENT STUDIES (Affiliated To Jawaharlal Nehru Technological University, Hyderabad) #74, Thimma Samudram, Bangalore ±Tirupati Bye-Pass Road Chittoor ± 517 128 2007-2009
Sreenivasa Institute of Technology and Management Studies
(Affiliated to Jawaharlal Nehru Technological University, Hyd) Murukambattu, CHITTOOR ± 517 127
This is to certify that the project report entitled ³A STUDY ON FUNDS FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR.ana´ submitted by Mr.N. MANJUNTH(07751E0054) in partial fulfillment of the requirement for the award of the degree of ³Master of Business Administration´ under JNTU, Hyderabad, is a record of independent work under taken by him/her during the academic year 2008-2009. This project report has not been submitted earlier either in part or whole for the award of any other degree/diploma of any university.
PROJECT GUIDE Mrs. T. HIMABINDU, M.F.M. Department of MBA
DIRECTOR Dr .S.E.V.SUBRAMANYAM, M.B.A, PhD., Department of MBA
I, N. Manjunath declare that the study conducted on ³A STUDY OF FUNDS FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR´ is submitted by me to the department of business management, Sreenivasa Institute of Technology And Management Studies (JNTU), is of my own and is not submitted to any university or published at any time before.
N.MANJUNATH Reg. No.: 07751E0054
I am very much grateful to FOODS & INNS LTD for allowing me to carry out my project work. I am thankful to D.S.N.MURTHY (Financial Manager) for giving me the permission to do my project work in Foods & inns Ltd. I would like to thank our principal Dr. T. SAIRAMA M.E., PhD, for his valuable guidance and enthusiasm shown to me. I owe a special thanks to our Head of the Department, SUBRAHMANYAM, M.B.A., PhD I would like to express my deep gratitude to my guide BINDU, M.F.M, for her guidance and motivation. Prof.S.E.V.
Mrs. T. HIMA
(N.MANJUNATH) Reg. No.: 07751E0054
STATEMENT OF THE PROBLEM
Funds flow statement summarizes for a particular period the resources made available to finance the activities of an enterprise and the uses to which such resources have been put. Funds flow statement is based on accrual concept of profit. The Company prepares a statement of funds flow to cater Purchase of fixed assets and investments, redemption of debentures and preference shares and repayment of loans, payment of dividend, payment of tax, and increase in working capital. It is the responsibility of the organization to maintain a standard level of funds flow neither excess or deficit.
Management of funds is an important aspect of financial management. Management of funds acts as the primary concern whether it may be in a business undertaking or in an educational institution. Financial management, which is simply meant dealing with management of money matters.
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¶. summary of financial operations. cost and control. It is a statement showing sources and uses of funds for a period of time. 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. 5. PROCUREMENT OF FUNDS 1. statement of changes in financial position. 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. The term flow of funds means transfer of economic and values from one asset of equity to another. Financial management constitutes risk. 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. sources and uses of funds. movement of working capital statement movement of funds statement. Funds flow statement is called by various names such as sources and application of funds. where got. 3. where came in and where gone out statement. it is said to be an application or outflow of funds.According to Phillippatus. "Financial management is concerned with the managerial decisions that result in the acquisition and financing of short term and long term credits for the firm". 2. 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. where gone statement. Funds procured from different sources have different characteristics in terms of risk. cost and control. funds received and . 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. 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´. 4. As funds can be obtained from different sources so procurement of funds is considered as an important problem of business concerns.
It provides only some additional information as regards changes in working capital. 3. the profit and loss account is prepared to compute net profit. 2. 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. It can not reveal continuous changes. Net profit can also be computed by comparing the balance sheet at beginning and the end of the period. 4. how ever it has certain limitations also which are listed below: 1.disbursed statement. It is not an original statement but simply. 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. Generally. arrangement of data given in the financial statements. 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. It is essential historic in nature and projected funds flow statement cannot be prepared 5. funds generated and expended statement. This fact . Changes in cash are more important and relevant for financial management than the working capital. funds statement etc.
It provides a snapshot of the financial position of the firm at the firms accounting period. liabilities and owners equity for a business firm as on a specific date. the difference in beginning and ending owner¶s equity is the net profit (or net loss).emphasizes the role of the profit and loss account as a link between consecutive statements of financial position. The generally accepted convention is to show one year events in the profit and loss account. However. The earning capacity and potential of a firm are reflected by its profit and loss account. Thus. as a starting point. The balance sheet is a stock or status statement as it shows assets. liabilities and owners equity at a point of time. Since the profit and loss account reflects the results of operations for a period of time. Net profit (or net loss) for a period is equal to the change in owner¶s equity during that period. In the language of accounting balance sheet communicates information about assets. It indicates the financial condition or the state of affairs of a business at a particular moment of time. 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 . 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. as measured by its resources and obligations. Thus. 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. 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. creditors. the balance sheet reveals the firms financial position on specific date. BALANCE SHEET Balance sheet is the most significant financial statement. The profit and loss account is a ³score board´ of the firms performance during a period of time. It is a flow statement.
g. h. f. b. c. e. d. 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.Profit & loss account Capital reserve Capital redemption reserve Provision for depreciation against fixed assets Appropriate of profits a.
Statement or Schedule of changes in working capital funds. d. A decrease in current in current increases working capital. SIGNIFICANCE AND IMPORTANCE OF FUNDS FLOW STATEMENT y It helps in the analysis of financial operations. Statements of sources and application of funds. An increase in current assets increases working capital. USES. 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. Broadly speaking the preparation of a funds flow statement consists of two parts: 1. An increase in current liabilities decreases working capital and.Provision against current assets Inventories or stocks such as a. Working capital = Current assets ± Current liabilities 1. . 4. 3. Proposed dividend(may be current/non-current liability) Prepaid expenses Accrued incomes PROCEDURE FOR PREPARING A FUNDS FLOW SATEMENT Funds flow statement is a method by which we study changes in the financial position of a business enterprise beginning and ending financial statements dates. A decrease in current assets decreases working capital. b. Raw materials Work in process Stores and spares Finished goods Provision for taxation if it does not amount to appropriation of profits. c. 2. 2.
It acts as a future guide. It helps in the proper allocation of resources.y y y y y y It throws light on many perplexing questions of general interest. It helps in a appraising the use of working capital. It helps in the formation of realistic dividend policy. STATEMENT OF SCHEDULE OF CHANGES IN WORKING CAPITAL PARTICULARS PREVIOUS CURRENT EFFECT ON WORKING YEAR YEAR CAPITAL INCREASE DECREASE CURRENT ASSETS Cash in hand Cash at Bank Bills receivable Sundry Debtors Temporary investments Stocks/Inventories Prepaid expenses Accrued Incomes Total Current Assets CURRENT LIABILITIES Bills payable Sundry creditors Outstanding expenses Bank overdraft . It helps knowing the overall credit worthiness of a firm.
Issue of Debenture C.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. Issue of share capital B. Trading profit or funds from operations. c) Redemption of debentures d) Purchase of Investment and other fixed assets. Total_______ Applications: a) Payment of share capital b) Repayment of institutional loans. . Institutional Loans D. Sale of Investment and other fixed assets E.
2 thousand metric tons of mango juice. or only about 0.7 thousand metric tons of mango pulp. India is well positioned to capitalize on this opportunity with a very large national production of mangos. India is a minor exporter of mango and mango products at this time. Despite this large mango production. Data from 2001 indicated that India exported 3. Additionally.2 thousand metric tons of mango juice.4 thousand metric tons. but also imported 2. During the five±year period from 1998±2002. as well as globally. Moreover.4% of mango production during this time frame.56 million metric tons in 2003. these observations indicate that. these factors indicate a strong opportunity to position Indian mango and mango products to meet a growing international demand. Collectively. including leading varieties like Alphonso. exports of fresh mangos from India averaged approximately 42. mango is a preferred fresh fruit within the Indian domestic market. Mango is in strong demand within the worldwide retail sector.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. The total market value of Indian mango and mango pulp represents 25% of the value of agricultural and processed food products exported by India. 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. 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. This accounts for 41% of the estimated worldwide mango production of 25. . Collectively. Data on exports of Indian mango pulp and juice products are more limited.
This report concludes that it is imperative to streamline the mango supply chain in order to reduce wastage and raw material costs. 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 a more efficient supply chain. One barrier to efficient development of the Indian mango industry is an exceedingly complex supply chain. increase farmer incomes. Furthermore. these steps will help stabilize prices. processors. among others. export organizations. . Ultimately. and development the farmer base at commercial and social levels. and Indian government organizations. (Sources: India Ministry of Food Processing Industries and Rambo bank Report). PFID²F&V partnerships will also help identify and facilitate resources necessary for enhancing the mango supplychain such as cold storage facilities. Education and training in Good Agricultural Practices and other sanitary standards. 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. Associated with this inefficient aggregation process is the application of numerous commissions as fresh agricultural products trade hands. and logistics management. These observations with mango are consistent with aggregate data available on Indian fruit and vegetable exports. India exports less than 1% of its mango crop as fresh mangos or processed mango products.despite being by far the world¶s largest mango producer. INDIA MANGO & MANGO PULP INDUSTRY DEVELOPMENT Through partnerships with mango growers. PFID²F&V is working to strengthen the small and medium mango grower base by providing capacity building at all levels. 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. will lead to better yields. as well as employment of certification systems. improved packing and grading facilities. 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. Within the value chain. pesticide use in accordance with regulations. testing facilities.
now. 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. MSU/PFID-F&V.000 hectares in Krishna Giri district Mango pulp processed annually is 50. Thiagarajan. PFID²F&V will facilitate the development and implementation of quality and safety standards which will meet the demands of the export market. o PFID partnerships can assist mango growers and processors in developing an "India" brand image for fresh mango and processed mango products that meet . Dr. 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. together with our two India-based coordinators. just over one year from project start-up.000 tones by 2010 Mango is raised in 36.MANGO PULP INDUSTRY HOPES o o o o o Mango pulp production to reach 75. 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. as there is no testing facility in Krishnagiri Farmers are not getting fair price. One reason contributing to this poor export performance is that overseas buyers have stricter standards than are currently accepted within the Indian domestic market. 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.000 tones Farmers have to go to Bangalore. GOALS OF INDIA MANGO MARKET DEVELOPMENT Currently. only 1% of the total mango production in India is exported. notable results are beginning to show in the form on increasing contributions from partnership members.
The division was set up in 1967 and since then has handled a wide range of products . grain processing and other consumer product groups like confectionery. The government has accorded it a high priority. India's food processing sector covers a wide range of products fruit and vegetables. Far East. 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. PFID India liaisons can easily adapt this approach to the further development of other fruit and vegetable products in India. Middle East etc. alcoholic beverages. with a number of fiscal relief¶s and incentives. plantation. high protein foods etc. FOOD PROCESSING Food processing involves any type of value addition to agricultural or horticultural produce and also includes processes such as grading. mineral water. to encourage commercialization and value addition to agricultural produce. consumption. FOODS AND INNS Ltd began its fruit processing operations in early 70s. Processed Fruits etc. BACKGROUND OF FOOD AND INNS Ltd . export and growth prospects. The food processing industry provides vital linkages and synergies between industry and agriculture. . for minimizing pre/post harvest wastage. milk and milk products. and packaging which enhance shelf life of food products.consumer preferences. o After demonstrated success in developing a strengthening the market development of mangoes.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. Soya-based products. The Food Processing Industry sector in India is one of the largest in terms of production. meat and poultry. Western Europe. USA. sorting. FOODS AND INNS Ltd has established it's presence as a reliable and competitive exporter to Coca Cola. COMPANY PROFILE HISTORY OF FOOD AND INNS Ltd. The predominant mango varieties grown in India make this product unique in country and abroad.such as Sesame Seeds. fisheries. generating employment and export growth. chocolates and cocoa products.
the mango belt in India. In its effort to be a forerunner in the chosen areas of business in terms of best practices in quality and technology. frozen IQF vegetables & frozen Indian snacks like Samosa and Ptras. FOOD AND INNS Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees. . FIL plans to benefit armors. FOODS AND INNS LTD is encouraging farmers to mobilize the fruits directly to the factory. Further to educating farmers with latest horticultural techniques. the industry and the nation in a phased manner. Guava & Papaya Paste. Frozen Frozen fruit purees & IQF chunks.Situated at Chittoor in Andhra Pradesh. Guava & Papaya Institutional packs of mango products. thereby minimizing the fruit handling damages and high value realizations. Concentrates and Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the local farming community wealth. 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. Consumer packs of Indian vegetables & catering packs for mango Chutneys. The farming community is an integral part and forms the backbone of the organization.
5 crores (USD1.B. D. With the back up of technical and managerial support staff. IIM Professor Director Mr. is the brain and brawl for taking the company¶s turnover from Rs. a Chartered Accountant from U.Utsav Dhupelia Mr.1 MIO) to Rs.C.K. Orange. Tomato and beat root. the company is poised for a steady and continuous growth graph moving upwards in all Para meters. Trivedi Mr.M. B. PRODUCTS . Engineer Mr.. Dalal Director Solicitor Foreign Director Solicitor Ex.Maniar Mr. D.160 Crores (USD 16 MIO) giving the status of government recognized EXPORT HOUSE.Raymond Simkins Mr. M.Spray Drying Fruit powder like Mango. the doyen guidance of Mr.D.Utsav coupled with the contribution of other directors. Banana. Utsav Dhupelia .No Name of the Director 1 2 3 4 5 6 Mr. looking after the routine affairs of the company.. the state of art technology implementation. innovative R & D and Lab facilities. BOARD OF DIRECTORS S.
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 .
Italy to produce natural fruit pulps & concentrates. The plant has one of the India's single largest fruit processing lines -10 TPH ripen fruit processing with Aseptic Packaging. This place has been earmarked to host Integrated Food Complex of International standards. CUTTING EDGE TECHNOLOGY FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic filling line of SIG. spread over an area of 15 acres. The facility currently has a tropical fruit Puree / Concentrate processing plant and the pack house for preparing the Fresh Fruits & Vegetables.Mizzen.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 .
o Two stage washing of fruits to ensure HACCP quality requirement. o High speed advanced Mono block aseptic filling machine supplied by SIG Mizzen. o Curved corners and food grade epoxy painted walls to avoid dust accumulation and to facilitate easy washing. o Two-stage sterilization to retain the natural flavor and aroma. allowing a closer control on quality and operations. EFFICIENT PLANT LAYOUT o Minimal drop in power and steam transfer. o Advanced high raise insulated roofing with double layer GI Sheeting with air extractors to maintain temperature inside the plant.o PLC operated equipments for better control over monitoring and operations with supervisory units. o Straight-line process flow design to maintain the hygiene and control in respective areas. PURE & CONCENTRATE FACILITY . o Integrated Enterprise Resources Planning system is in place to automate business processes and provide data for analysis and reporting. o Special food grade self-leveling epoxy flooring to maintain optimum hygienic conditions. 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 Utility lines are routed outside the plant to keep the interiors free from dust accumulation. 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.
The facility also holds ripening chambers. Spain. water is becoming scarce year by year due to increase n its consumption in industries & agriculture sectors & indiscriminate use /wastage by human beings. Without water there is no life on the earth. The processing line is fully integrated and controlled by PLC. we are taking following steps at various locations of its use: . Egg plant. It is a nature¶s gift. FOOD AND INNS Ltd has commissioned the VHT facility. PACK HOUSE FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing facility from Grief. From there it is pumped to over head tank to supply to various locations of use. 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 . bananas are processed along with tropical vegetables like Okra. therefore. To manage appropriately & conserve the water.The fruit processing aseptic line is from SIG-Mazzini of Italy. This ensures irradiation of the fruit flies in the fresh fruit. WATER MANAGEMENT Water is an essential & precious natural resource. VAPOUR HEAT TREATMENT To enable Fresh Mango exports to countries like Japan and Korea. Water from all bore wells is collected in a sump. But. STAGE OF USE OF WATER TO THE BEST EFFECT IN OUR FACTORY Our main source of water is bore wells. Fresh fruits including mangoes. pre cooling chambers and cold storage to handle fresh fruits and vegetables. Lemon. The line has a capacity to process 10 metric tones per hour ripened fruits. The water is potable. It is as important to the fruit processing industry as to the living being. Bitter gourd etc. FOOD AND INNS Ltd is the first private organization to set up this facility in the country.
Thrust of exports. 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. o STEAM GENERATION Water for boiler feeding is treated in water softener to reduce the hardness. Expansion in 4th Aseptic manufacturing capacity. Off-shore logistical service providers has made the supply chain process extremely competitive. Use of IT as a tool to further Business goals.o FRUIT WASHING The water is re-circulated after filtration up to it becomes dirty. understanding unique requirements and delivering value to select global customers. The steam condensate of evaporator is recycled to boiler to save water & energy as condensate will have high temperature. FUTURE PLANS y y y y Development of the Indian market for foods and inns. GERMANY o ISO 9001:2000 (QUALITY MANAGEMENT SYSTEM) BY TUV. FOODS AND INNS Ltd expertise in the business and its contacts with Agents\Brokers. End User. Given our renewed emphasis on this product line we are strengthening relationships in key markets across the buyer spectrum. . GERMANY o KOSHER BY STAR-K. This water is chl0rinated to control the contamination by continuous dosing of chlorine in the washing tub. OUR CERTIFICATIONS INCLUDE o HACCP (FOOD SAFETY CERTIFICATION) BY TUV.
We collect through books magazines.y Setting up of a Central R&D lab. 2. Company records related to financial management. From financial department of the company retaining to the last 4 years. 4. SECONDRY DATA: Secondary Data are already present one and it is second hand information. . the secondary data was collected from the company like 1. newspaper. Backward integration for improved quality of raw materials using contract farming/ organic cultivation. In this study. 3. journals & websites etc.. Annual reports of the company during 2004-2008. 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. Financial statement of the company.
To know various needs for which funds were obtained during a particular period based in which these funds where employed. 3.5. To understand flow of funds in current or non-current accounts. From various financial management next books. 5. OBJECTIVES 1. To analyze the changes of financial position of Foods and Inns Limited enterprises between two dates. 4. To find out the sources from which additional funds were derived and the use to which their sources were put. . 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.
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. 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. 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.
It helps in the analysis of financial operations.working capital on the two balance sheet dates. LIMITATIONS 1. The study based on the available annual reports and internal information only . It helps in appraising the use of working capital and finally it acts as future guide. 2. 4. It provides only some additional information as regards changes in working capital 3. It helps in the proper allocation of resources. It should remember that a funds flow statement is not a substitute of an income statement or a balance sheet. It cannot reveal continuous changes. It helps in the formation of realistic dividend policy.
58.200 26.02.714 220.127.116.112 18.104.22.1688 22.214.171.124.714 9.354 5.31.668 126.96.36.199.24.485 74.02.74.37.500 87.29.293 1.A): Inventories S.67.58.C) (C.851 1.48.A Current Liabilities(C.STATEMENT OF CHANGES IN WORKING CAPITAL Particulars 2004 2005 Effect on Working Capital Increase Decrease Current Assets(C.207 25.293 62.43.793 188.8.131.52.98.06.507 25.93.000 9.293 25.658 34.06.31.26.89.507 7.773 3.858 184.108.40.2060 10.990 2.53.AC.220.127.116.111 18.104.22.168.915 56.665 2.058 .L) 17.60.91.L Net Working Capital(W.C TOTAL 7.08.53.73.714 Increase in W.11.12.707 36.565 Total C.288 7.865 2.16.L): Current Liabilities Provisions 22.214.171.124.19.debtors Cash & bank b/s Loans & Advances Investment Total C.126.96.36.1998 9.48.00.89.
188.8.131.528 75.02.41. The firm utilizing this fund for the purchasing of fixed assets.25.1 FUNDS FLOW STATEMENT FOR THE YEAR 2005 TABLE NO: 4.TABLE NO: 4.3 Particulars 2005 2006 Effect on Working .19. the main sources of funds are secured and unsecured loans.593 13.675 Purchase of Fixed Asset 27.507 13.586 ---- Amount 5.07.54.56.90.39.593 Interpretation: Comparing the year 2004 and 2005 the statement of changes in working capital shows the increasing balance.54.22. differed tax asset and liabilities.963 10.81. 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.060 53.2 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Deferred Tax Assets Capital W-I-P Decrease in Working Capital Amount Applications 2.341 Increase in Working Capital 4.086 7. As a result the funds flow statements.
07.06.70.89.27.90.166 Total C.658 16.418 7.39.716 84.C) (C.915 1.773 184.108.40.2064 2.53.C 9.debtors Cash & bank b/s Loans & Advances 12.66.851 13.865 2.293 12.140 12.28.248 220.127.116.11.772 15.A Current Liabilities(C.97.601 .82.52.055 18.104.22.1683 1.43.Capital Increase Current Assets(C.82.310 87.48.565 42.714 28.32.43.A-C.31.918 2.82.248 616.66.685 4.534 22.214.171.124.53.84.601 126.96.36.199.608 10.21.38.L Net Working Capital(W.60.30.558 1.354 12.30.L) Increase in W.938 4.050 25.16.72.L): Current Liabilities Provisions Total C.02.82.017 188.8.131.52.61.248 184.108.40.206.95.280 Decrease Investment 2.A): Inventories S.33.30.820 220.127.116.11.
00.385 1.43.72.FUNDS FLOW STATEMENT FOR THE YEAR 2006 TABLE NO : 4.4 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 1.70.989 Interpretation: .989 3.355 Increase in Working Capital 2.100 Capital W-I-P 11.01.82.70.88.000 ---- Applications Amount Purchase of Fixed Asset 94.748 2.06.88.57.11.91.856 18.104.22.1684 3.
28.43.733 22.214.171.1248 2.47.06.000 126.96.36.199 188.8.131.525 184.108.40.2065 42.07.252 220.127.116.11.14.485 31.90.055 2.00.74.49.82.A Current Liabilities(C.733 2.75.C 12.97.011 FUNDS FLOW STATEMENT FOR THE YEAR 2007 .28. differed tax liabilities.47.793 28.772 16.088 1.08. As a result the funds flow statements.AC.04.963 2.L): Current Liabilities Provisions Total C.32.97.86.L) Increase in W. In the particular year the current assets are increased then the current liabilities.04.C) (C.685 3. the main soureces of funds are secured and unsecured loans.222 18.104.22.168 1.debtors Cash & bank b/s Loans & Advances Investment Total C.22.214.171.1246 2.166 44.938 126.96.36.199.12.758 188.8.131.526 8.918 184.108.40.206.805 8.911 18.A): Inventories S.726 16. STATEMENT OF THE CHANGES IN WORKING CAPITAL TABLE NO: 220.127.116.11.95.61.310 10.06.55.024 18.104.22.168.12.011 1.Comparing the year 2005 and 2006 the statement of changes in working capital shows the increasing balance.97. 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.14.671 1.L Net Working Capital(W.95.571 13.5 Particulars 2006 2007 Effect on Working Capital Increase Decrease Current Assets(C.97.38.733 31.28.27.
13.130 96.87.29.08.884 Interpretation: Comparing the year 2006 and 2007 the statement of changes in working capital shows the increasing balance.11.6 Sources Reserves & Surplus Deferred Tax Liability Secured &Unsecured Loans Miscellaneous Decrease in Working Capital Amount 2.311 50.28.debtors Cash & bank b/s Loans & Advances Investment 16.84.000 3.213 2.TABLE NO: 4.06.A): Inventories S.939 14. the main sources of funds are secured and unsecured loans.61.180 14.132 77.661 2.00.81.93.156 3.685 .22.214.171.124.838 57.98. As a result the funds flow statements.33.06.024 19.37.02. In the particular year the current assets are increased then the current liabilities.32. differed tax liabilities.71.75.04.783 Increase in Working Capital 2.485 126.96.36.199.188.8.131.52.17.89.726 4.268 5.616 Capital W-I-P 74.685 2.250 8.42.884 184.108.40.2061 7.778 ------- Applications Amount Purchase of Fixed Asset 5.84.67. 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.30.87.
752 10.513 Increase in Working Capital -------- 220.127.116.112 11.L): Current Liabilities Provisions 44.196 31.86.L) 31.196 1.48.01.733 29.41.704 2.482 18.104.22.1683 31.14.AC.433 Deferred Tax Liability 22.214.171.124.48.7 FUNDS FLOW STATEMENT FOR THE YEAR 2008 TABLE NO: 4.48.Total C.196 126.96.36.199.C 1.214 Total C.734 .46.74.55.L Net Working Capital(W.92.55.00.526 49.80.061 9.00.732 STATEMENT OF CHANGES IN WORKING CAPITAL TABLE NO: 188.8.131.52 Decrease in Working Capital 184.108.40.206.A Current Liabilities(C.085 Secured &Unsecured Loans 8.98.793 19.18.222 220.127.116.11.80.48.C) (C.538 decrease in W.510 2.734 Applications Purchase of Fixed Asset Amount 3.01.91.00.66.733 11.64.8 Sources Amount Reserves & Surplus 2.571 6.14.86.01.12.20.90.
The financial position of FOODS AND INNS LTD in this particular year is good FINDINGS 1. The working capital is increased year by year except last year.Then it fall down.Interpretation: Comparing the year 2007 and 2008 the statement of changes in working capital shows the decreasing balance. differed tax liabilities. As a result the funds flow statements. 2. In the particular year the current assets are decreased then the current liabilities. . The firm utilizing this fund for the purchasing of fixed assets. The differ tax liability is increased in 2005-2006. 4. the main sources of funds are secured and unsecured loans. It is founded that the company is holding share capital stably. The company was highly purchased the fixed assets in the year 2005&2007. The company receives the secured and unsecured loans indicate fluctuating position. 5. Apart to this the surplus funds also increased.Then in 2006&2008 the company used low funds for purchasing of fixed assets. 3.
y Tax liabilities should also be maintained in a standard manner. 8. 7. y In 2008.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. .6. y Regularly use funds in purchase of fixed asset it make profitability. The investment is increased year by year up to 2007. It is to require raising short terms funds to solve the financial problems. the statement shows decreasing working capital in the company. The working -in. 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.
And its main sources of funds are deferred tax liability. . 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.P.The over all performance of FOODS &INNS PVT LTD is very good. secured& unsecured loans.I.
385 2.15.043 18.104.22.168.22.214.171.124.588 16.79.894 3.03.57.709) 2.351 126.96.36.199.922 188.8.131.52.258 184.108.40.206 52.58.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 220.127.116.11.34.528 1.08.741 18.104.22.1683 5.37.581 1.13.045 55.01.96.41.076 4.37.574 .22.214.171.124.511 126.96.36.199.62.384 188.8.131.52.184.108.40.2068 220.127.116.11.297 29.406 52.00.451 5.01.92.73.00.27.825 18.104.22.168.22.214.171.1246 48.02.12.811 79.36.870 126.96.36.199.020 188.8.131.52.595 3.636 45.537) 184.108.40.206 35.033 68.92.427 220.127.116.11 18.104.22.1681) 2.838 22.214.171.124.126.96.36.199 188.8.131.52.19.709 1.76.651 184.108.40.206 30.84.925 1.278 220.127.116.112 18.104.22.1682 (1.74.326 2.74.160 3.974 29.754 22.214.171.1245) 3.10.114 (+)Operating income Operating profit (-)Non-operating expenses (+)Non-operating income Profit / loss before tax (-)Provision for tax Profit / loss after tax (126.96.36.199.308 188.8.131.52.47.718 93.76.640 184.108.40.2063 220.127.116.11 31.471 (4.04.313 1.35.02.461 1.96.969 1.176 3.843 (1.34.792 18.104.22.168.14.24.06.798 11.871 2.097 46.
977 94.05.772 16.060 6.09.044 27.180 14.968 22.214.171.124.055 2.74.Invesments 4.12.Fixed assets Capital work in progress TOTAL FA 3.571 41.13.515 40.716 126.96.36.199.38.293 1.74.330 47.354 188.8.131.521 7.938 14.067 184.108.40.206.220.127.116.11.18.104.22.1683 12.Balance Sheet of Foods and Inns ltd.22.214.171.124.75.71.Miscellanious expenditure TOTAL ASSETS(1+2+3+4+5) LIABILITIES: 6.726 4.700 126.96.36.199.59.288 188.8.131.529 .30.405 184.108.40.206.06.30.024 19.08.29.042 20.361 19.90.00.841 32.37.939 Loans & advances 220.127.116.11.50.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: 1.93.661 Cash&bank balances 74.000 18.104.22.1685 22.214.171.124.39.689 26.261 8.07.80.56.827 126.96.36.199.175 61.93.685 95.64.311 TOTAL CA 2.71.450 2.481 27.51.86.02.43.78.804 188.8.131.525 77.29.49.Current liabilities.156 Sundry debtors 4.85.685 69.78.19.08.185 34.668 12. provisions: 184.108.40.2063 8.747 2.28.658 16.44.275 21.257 220.127.116.11.64.61.490 10.53.17.Deffered tax assets 5.865 2.915 18.104.22.168.19.08.950 2.Currentassets loans&advances Inventories 7.
235 37.42.60.Share holders funds: Share capital Reserves & surplus TOTAL 9.200 24.98.515 1.141 22.214.171.124.960 19.896 126.96.36.199.Current liabilities Provisions TOTAL CL 188.8.131.52.M.91.67.000 184.108.40.2064 48.55.145 220.127.116.113 12.998 1. Financial Management I.60.257 30.231 18.104.22.168.06.704 22.214.171.1248 126.96.36.1991 95.72.431 188.8.131.52.184.108.40.206.220.127.116.11 1.200 14.200 18.558 1.398 18.104.22.168.61.629 22.214.171.124.22.185 1.65.500 126.96.36.199.48.056 33.510 188.8.131.52.64.06.160 1.200 16.58.772 184.108.40.2068 220.127.116.11.571 1.PANDY .18.104.22.168.96.68.304 27.54.963 22.214.171.124.75.81.348 126.96.36.1990 188.8.131.529 15.381 4.Loan funds: Secured loans Unsecured loans TOTAL 8.500 10.85.608 2.07.05.58.214 184.108.40.2060 220.127.116.11.499 BIBLIOGRAPHY The following books and websites have been referred by me during my project work.18.104.22.1681 22.214.171.1243 19.51.616 77.Deffered tax liabilities TOTAL LIABILITIES(6+7+8+9) 7.028 44.222 19.571 6.688 3.798 22. 1.310 10.76.60.98.60.104 126.96.36.199.86.95.200 21.22.
KHAN WEB SITES WWW. Financial Management KHAN AND JAIN 3.2.Y. Management Accounting M.COM .GOOGLE.COM WWW.FOODSANDINNS.
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