INTRODUCTION

Asset Liability Management (ALM) is a strategic approach of managing the balance sheet
dynamics in such a way that the net earnings are maximized. This approach is concerned with
management of net interest margin to ensure that its level and riskiness are compatible with the
risk return objectives of the bank.

If one has to define Asset and Liability management without going into detail about its
need and utility, it can be defined as simply “management of money” which carries value and
can change its shape very quickly and has an ability to come back to its original shape with or
without an additional growth. The art of proper management of healthy money is ASSET AND
LIABILITY MANAGEMENT (ALM).

The Liberalization measures initiated in the country resulted in revolutionary changes in

the Banking sector. There was a shift in the policy approach of banks from the traditionally
administered market regime to a free market driven regime. This has put pressure on the earning
capacity of co-operative banks, which forced them to foray into new operational areas thereby
exposing themselves to new risks.

As major part of funds at the disposal of banks come from outside sources, the bank
management are concerned about RISK arising out of shrinkage in the value of asset, and
managing such risks became critically important to them. Although co-operative banks are able
to mobilize deposits, major portions of it are high cost fixed deposits. Maturities of these fixed
deposits were not properly matched with the maturities of assets created out of them. The tool
called ASSET AND LIABILITY MANAGEMENT provides a better solution for this.

ASSET LIABILITY MANAGEMENT (ALM) is a portfolio management of assets and

liability of an organization. This is a method of matching various assets with liabilities on the
basis of expected rates of return and expected maturity patter

1
BACKGROUND OF STUDY
Heritage food has gained attention and recognition by locals as a cultural identity and by tourists
as a new food experience. Two important intrinsic quality attributes of heritage food encompass
safety and authenticity. As heritage food dishes are prepared in foodservice establishment, it
entails requirements on ensuring safety and authenticity of heritage food.

SCOPE OF THE STUDY:

• The scope of the study is limited to collecting financial data published in Annual reports
of the company every year.
• In this study the analysis based upon the ratios to know asset and liability management
under Heritage.
• A study of Ratio analysis involves an examination of long term as well as short term
sources of a company
• The topic is selected to analysis the factors that affect the future EPS of a company based
on fundamentals of the company.
• Scope of the study is limited.
• Comparative statement.

2
OBJECTIVES OF THE STUDY
• To Study the Financial Position of a Company and Financial Statements through Ratio
Analysis.
• To Analyze Co-relation between various Assets and Liabilities through P&L Account
and Balance sheet.
• To Examine feasibility of Present system of managing working capital.
• To Evaluate some suggestions to the management based on the information studied.
• To summarize the problems involved in maintaining and managing Assets and Liabilities.

3
NEED OF THE STUDY:
• The need of the study is to concentrates on the growth and performance of HERITAGE
• To calculate the growth and performance by using asset and liability management
• To know the management of nonperforming assets.
• To have the practical knowledge of Asset and Liability management of a company
• The findings of the study can be used as Secondary Data for various future study
purposes.

4
RESEARCH METHODOLOGY
The study of ALM Management is based on two factors.
1 Primary data collection.
2. Secondary data collection

PRIMARY DATA COLLECTION:

The sources of primary data were
• The Chief Manager – ALM cell
• Department Sr. manager financing & Accounting
• System manager-ALM cell
Gathering the information from other managers and other officials of the bank

SECONDARY DATA COLLECTION:

Collected from books regarding Banking, journal, and management containing relevant
information about ALM and Other main sources were
• Annual report of the HERITAGE
• Published report of the bank
• RBI guidelines for ALM.

5
 LIMITATION OF THE STUDY:

• This subject is based on past data of Heritage.

• The study is mainly based on secondary data.

• Sufficient training programs should be arranged to make employee positive response to

budgetary activities.

• The study is limited up to the date and information provided by Heritage foods India ltd
and its annual reports.

• The accuracy and correctness of ratios are totally dependent upon the reliability of the
data contained in financial statements on the basis of which ratios are calculated.

6
 REVIEW OF LITERATURE
The Basel II Norms (2004) is focused on International standards for the amount of capital to be
maintained by the Banks as a safe guard against various risks they come across in the banking
business

The Basel II proposed setting up rigorous risk and capital management requirements designed to
ensure that a bank holds capital reserves appropriate to the risk the bank exposes itself to through
its leading and investment practices.It infers that the greater risk to which the bank is exposed ,
the greater the amount of capital the bank needs to hold to ensure solvency and stability .

Gardner and Mills (1991) discussed the principles of asset liability management as a part of
banks strategic planning and as a response to the changing environment in prudential supervision
, ecommerce and new tax teraties .

Haslem et al(1999) used canonical analysis and the interpretive framework of asset or liability
management in order to identify and interpret the foreign and domestic balance sheet strategies
of large U.S. banks in the contest of crisis in leading to LDCs.In their study it was revealed that
the least profitable very large banks have the largest propotion of foreign loans , but they focus
on asset/liability matching strategies.

Charumathi (2008) in her study on interest rate risk management concluded that balancesheet
risks include interest rate and liquidity risk .

Vaidhya and shahi (2001) studies asset liability management. they suggested in particular that
interest rate risk and liquidity risk are two key inputs in business planning process of banks .

Rajan and Nallari (2004) used canonical analysis to examine asset liability management in
Heritage in the period 1992-2004 . according to this study their associates had the beat asset
liability management in the period 2992-2004

7
Milir Venkatesh and Bhargav (2008) focused on price matching and maintaining spreads taking
one step a head , the Heritage focus on integrated balance sheet management where all the
relevant factors which affect an appropriate balancesheet composition deserve consideration .
therefore , various components of balancesheet are analysed keeping in view the strength of
Heritage .

Dash and Patahak (2011) proposed a linear model for asset liability assessment of Heritage .

A Bharath Vajan, K.P. Tooyamani, Vignesh. A (20017), in their article “A Study on Asset
liability Management” then objective of this. study is to study. the asset liability management
system and to compare the asset and liability variance, to study the impact of ALM .

Prof.kKanhaiyalSingh (2013), “ asset liability management: A Dynamic Approach”. There are

series efforts by companies to minimalize the asset liability disparity since the implementation of
guidelines in 1997. Companies have prepared tolerable follow up and monitoring and
preparations at unlike level.

Dr.B Charumati(2008), “Asset liability Management in Industry with special reference to interest
rate risk management” . discoveries this examination is ALM idea however in vogue since 1997,
it's characteristic complexities in acquiring precise auspicious data from the gross course level
makes the banks in not getting its full favorable position. The modernized condition has helped
the banks to accomplish the target of MIS gin the territory of gathering of exact and opportune
information required for hazard the executives.
Dr. K.Prince Poul Antony, J Manimegalai (2014-18), “A Study on Asset Liability Management”,
It became the primary focus in the sector, with all the banks trying to maximize performance and
reduce their exposure to risk. Asset-liability management is the essential tool for risk
management.

Rauch ET AL(2010), “ An Effect of ALM on the liquidity risk”, A study the determinants of
liquidity risk and effort to recognize the determinants of liquidity creation ,their results emphasis

8
that the most important determinants are macroeconomic variables and monitory policy, while
not showing a important relationship between liquidity creation and bank exact variables such as
size and performance.

Ronald J Ryan, CFA(2013), “The Evolution of ALM” , the major objective of this study is the
most of the US institution with Assets to advance is to fund some sort of liability, As is the care
with the, and so forth. As a result ALM should be the investment focus and resource for selecting
the core collection.

Kanjana E N (2007), “An Assessment. Asset and Liability Management”, competence

profitability and enlargement of scheduled commercial bank in India. Tested whether the
establishment expenses was major expenses and out of total expenses which is met by company
is more due to more number of employees. In her empirical study the learning factor and
expenses factor which are controllable and noncontrollable by the Company.

P.Sheela,hTejaswinixBastray(2009-2014), “Asset-Liability Management-A Comparative Study

of at Public and Private Sector”, through the study it was job served that both the banks were
exposed to interest rate risk throughout the study period. To fill the short term liquidity gap,
banks resort to market barrowing that higher rate of interest which was them cause in the
reduction of interest margin and profitability of the Bank.

S.Prabhakar, Dr.S.Mathivannan, J.Ashok Kumar(2017), “ Asset and Liability Management – A

Comparative study on GapeAnalysis”. Objective of they study is to compare the sensitive Asset
and Liabilities of public sector.

G.Papaioannou:, IvaPetrova (2000), “SovereignhRisk andsAsset andvLiability Management

Conceptual Issues(SRALM),Country practices towards managing financial risks on a
sovereignbalance sheet continued to evolve. Each crisis period ,and its legacy on sovereign
balance sheet, reforms the need for strengthening financial risk management. This paper
discusses some salient features embedded in current generation of sovereign asset and liability

9
management (SALM) approaches, including objectives, definition of relevant assets and
liabilities, and methodologies used in optimal SALM outcomes.
Travis L Jones(2002), “ Integrating Asset-Liability Risk Management with Portfolio
Optimization for individual investors”. A majority of private client practitioners relay on mean
variance optimization(MVO), rules of thumb, org model portfolios for making asset allocation
recommendation . Considerations for income levels and other constraints figure into the typical
approach .
Ashok Kumar (2009), “A Relative Study of a Public and private sector”, this study explains how
the financial performance of the organization. ALM has been affected by the financial
deregulation of the economy. The main objective of the experiential study is to access the
financial performance depending on the organization. Assets and Liabilities Management how
they perform in the market, more important for the investors to invest of the practical
organization.
Dash & Pathak(2011), “Effect of ALM on companies profitability in Indian financial market”. In
this article found that a best assets and liabilities management had8a strong short term liquidity
position, but with lower profitability ,while private sector had a comfortable short term liquidity
position balancing profitability . It shows the short terminally reach the organization objectives
and goals. It depending upon ALM.
S.P.Joshi & Dr. R.V.Sontakay(2017), “Review paper on Asset Liability Management in
company’s System”. The paper review the milestone research work in asset and liability
management of company’s. An study carried out in fall referred papers show that ALM plays a
crucial role in banking system. Every bank must have an appropriate ALCO Committee to look
upon the risk associated with each step
DasAbhiman(1996), “Structural changes, Asset and liability is match”. This paper attempted to
identify an explore the relationships and structural changes including hedging behaviour between
Assets and Liabilities of the cross section of the scheduled company’s in India into different
point of time marking pre and post liberalization phrase of company’s reforms.

A.W. Rajwade(2002), “Issues in Asset Liability Management”. India says that historically banks
have not paid much attention to the topic of management interest rate mainly because all interest

10
rates were regulated by then central bank .As for as commercial banks are considered,
particularly the larger Indian public sector banks, them principle source of mismatch is their
holding of fixed income securities as part of statutory liquidity portfolio.
Gary P Moynihan & Prasad, Purushotham (2002), “A decision support system for Asset
Liability Management”. This paper discussed the development of a decision support system for
asset liability management in financial institutions. The system utilizes historical data develop
algorithms can forecast the amounts of this assets and liabilities.
Md. Salim Uddin, and Anamol Haque (2003-2014), “The cost and Management”. There is no
underlying fact to ignore the assets and liability policy to ensure profitability and long term
sustainability of financial institutions in any economy. The study has been conducted to
investigate the impacts of ALMS policy on the profitability of sample working. To identify the
relationship among the variables.
MihirkDash, K.A.Venkatesh,Bhargav.B.D , “An Analysis of Assets-Liability Management”.
Maturity-gap analysis has a wide range of focus, only as a situation analysis tool, but also a
planning tool. Banks need to maintain the maturity gap as low as possible in order to avoid any
liquidity exposure .This would necessarily mean that outflow in different maturity buckets need
to be funded from the inflows in the same bucket

11
 INDUSTRY PROFILE
HISTORY OF INDIAN FOODS INDUSTRY
By stating productions in 1917 the story of Indian Foods is a stage of continuous growth. Foods
is derived from the Latin word “Foodsam”.
Egyptians and Romans found the process of manufacturing Foods. In England during the
first century the hydraulic Foods has become more versatile building material. Later on, Portland
Foods was invented and the invention was usually attributed to Joseph Aspdin of Enland.
India is the world’s 4th largest Foods produced after China, Japan and U.S.A. The South
Industries have produced Foods for the first time in 1904. The company was setup in Chennai
with the installed capacity of 30 tonnes per day. Since then the Foods industry has progressing
leaps and bounds and evolved into the most basic and progressive industry. Till 1950 – 1951, the
capacity of production was only 3.3 million tones. So far annual production and demand have
been growing a pace at roughly 78 million tones with an installed capacity of 87 million tones.
In the remaining two years of 8th plan an additional capacity of 23 million tones will actually
come up.
India is well endowed with Foods grade limestone (90 billion tones ) and coal (190 billion
tones). During the nineties it had a particularly impressive expansion with growth rate of 16
percent.
The strength and vitality of Indian Foods Industry can be gauged by the interest shown and
support give by World Bank, considering the excellent performance of the industry in utilizing
the loans and achieving the objectives and target. The World Bank is examining the feasibility of
providing a third line of credit for further upgrading the industry in varying areas, which will
make it global. With liberalization policies of Indian Government. The industry is posed for a
high growth rates in nineties and the installed capacity is expected to cross 160 million tones and
production 90 million tones by 2003 A.D.

12
Food -The Product:
The natural Foods is obtained by burning and crushing the stones containing clayey, carbonate of
lime and some amount of carbonate of magnesia. The natural Foods is brown in color and its best
variety is known as “ROMAN FOODS”. It sets very quickly after addition of water.
It was in the eighteenth century that the most important advances in the development of
Foods were which finally led to the invention of Portland Foods.
In 1956, John Sematon showed that hydraulic lime which can resist the action of water can
be obtained not only from hard lime stone but from a limestone which contain substantial
proportion of clayey.
In 1996, Joseph Parker found that modules of argillaceous limestone made excellent
hydraulic Foods when burned in the usual manner. After burning the product was reduced to a
powder. This started the natural Foods industry.
The artificial Foods is obtained by burning at a very high temperature a mixture of
calcareous and argillaceous material. The mixture of ingredients should be intimate and they
should be in correct proportion. The calcined product is known as clinker. A small quantity of
gypsum is added to clinker and it is then pulverized into very fine powder, which is known as
Foods.
The common variety of artificial Foods is known as normal setting Foods or ordinary Foods.
A mason Joseph Aspdn of Leeds of England invented this Foods in 1924. He took out a patent
for this Foods called it “PORTLAND FOODS” because it had resemblance in its color after
setting to a variety of sandstone, which is found a abundance in Portland England.
The manufacture of Portland Foods was started in England around 1925. Belgium and
Germany started the same 1955. America started the same in 1972 and India started in 1904. The
first Foods factory installed in Tamilnadu in 1904 by South India limited and then onwards a
number of factories manufacturing Foods were started.

13
Composition of Foods:
The ordinary Foods contains two basic ingredients, namely, argillaceous and calcareous. In
argillaceous materials the clayey predominates and in calcareous materials the calcium carbonate
predominates.
A good chemical analysis of ordinary Foods along with desired range of ingredients.

Ingredients Percent Range

Lime (CaO) 62 62 – 67

Silica (SiO2) 22 19 – 25

Alumina (Al2O3) 5 3–8

Calcium Sulphate (CaSO4) 4 3–4

Iron Oxide (Fe2O3) 3 3–4

Magnesia (MgO) 2 1–3

Sulphur (S) 1 1–3

Alkalies 1 0.2 – 1

Industry Structure and Development:

With a capacity of 175 million tones of large Foods plants, Indian Foods industry is the
fourth largest in the world. However per capita consumption in our country is still at only 160
Kgs against 300 Kgs of developed countries and offers significant potential for growth of Foods
consumption as well as addition to Foods capacity. The recent economic policy announFoods by
the government in respect of housing, roads, power etc., will increase Foods consumption.
Opportunities and Threats
In view of low per capita consumption in India, there is a considerable scope for growth in
Foods consumption and creation of new capacities in coming years.

14
 The Foods industry does not appear to have adequately exploited Foods consumption in
rural segment where damaged where damaged growth is possible.
Landed cost of Foods (with import duty) continues to be higher than home market prices but
with reduced import duty, increasing imports, may pose a serious threat to the domestic Foods
industry.
Outlook
The recent change in the budget 2001 – 2002 relating to fiscal incentives for individual
housing and reduction in borrowing cost for this purpose and with the government reaffirmation
to accelerate the reform process, infrastructure development should logically get priority leading
to increase in demand of Foods in coming years. The addition capacity of Foods in the pipeline is
limited and therefore the demand and supply situations is expected to be more favorable and
Foods prices are likely to firm up.

History
The first unit was installed at Basanthnagar with a capacity of 2.5 lack TPA (tones per
annum) incorporating humble supervision, preheated system, during the year 1969.
The second unit followed suit with added a capacity of 2 lack TPA in 1971.
The plant was further expanded to 9 lack by adding 2.5 lack tones in August, 1978, 1.19
lack tones in January, 1981 and 0.87 lack tones in September, 1981.

15
 COMPANY PROFILE
HERITAGE FOODS
One among the industrial giants in the country today, serving the nation on the industrial
front HERITAGE FOODS INDIA LIMITEDhas a chequered and eventful history dating back to
the Twnties when the Industrial House of Birlas acquired it. With only a Textile Mill under it
banner in 1924, it grew from strength to strength and spread its activities to never firlds like
Rayon, Pulp, Transparent paper, Spun pipes and Refractories, Tyres, Oil Mills and Refinery
Extraction.
Looking to the wide gap between demand and supply, of a vital commodity, Foods,
which plays an important role in nation – building the Government of India de – licensed the
Foods Industry in the year 1966 with a view to attract private entrepreneurs to argument the
Foods product Heritage rose to the occasion and decided to set up a few Foods plants in the
country.
The first Foods Plant of Heritage with a capacity of 2.5 lack tones per annum based on
dry process, was established in 1969 at Basanthnagar a backward area in Karimnagar District,
Andhra Pradesh, and christened it Heritage Foods. The second unit followed suit, which added a
capacity of 2.00 lack tones in 1971. The plant was further expanded to 9.00 lack tones by adding
2.5 lack tones in August 1978. 1.17 lack tones in January, 1981 and 0.87 lack tones in
September, 1981.
Heritage Foods has outstanding track record of performance and distinguished itself
among all the Foods factories in India by bagging the coveted National Productivity Award for
two successive years, i.e., in 1985 and 1936, so also the National Awards for Foods Safety for
two year 1985 – 86 and 1986 - 87. Heritage also bagged NCBM’s (National Council for Foods
and Building Materials) National Award for Energy Conservation for the year 1989 – 90.
Heritage got the prestigious State Award “Yajamnya Ratna” & “Best Management
Award” for the year 1989; so also the FAPCCI (Federation of Andhra Pradesh Chamber of
Commerce and Industry) Award for the Best Family planning effort in the State. For the year
1987 – 88, Heritage also got the FAPPCI Award for Best Industrial Promotion / Expansion
effortin the state. In the year 1991 Heritage also got the May day Award of “Best
Management”and “Pandit Jawaharlal Nehru Silver Rolling Trophy.

16
 Welfare and Recreation Facilities
For the purpose of recreation facility 2 auditoriums were provided for playing indoor games,
cultural function and activities like drama, music and dance etc.,
The industry has provided libraries and reading rooms. About 1600 books are available in
the library. All kinds of newspaper, magazines are made available.
Canteen is provided to cater to the needs to the employees for supply snacks, tea, coffee and
meals etc.,
One English medium and one Telugu medium school are provided to meet the educational
requirements.
The company has provided a dispensary with a qualified medical office and paramedical
staff for the benefit of the employees. The employees covered under ESI scheme have to avail
the medical facilities from the ESI hospital.
Competitions in sports and games are conducted every year for August 18, Independence
day and January 26, Republic Day among the employees.

17
 Vision
As a young and progressive company, Heritage’s has accomplished much over the past 70 years
and it’s only the beginning. Our vision is to be recognized as a leader in the convenience store
industry by exceeding our guests’ expectations. Our purpose is to exceed the expectations of our
guests and fellow employees and share the rewards of financial growth. We believe in
M.A.G.I.C., which stands for “making a great impression on our customer (guest).” We achieve
our vision through our MAGIC.

Mission
Staying true to our family roots, Heritage’s keeps people as the most important part of its
business and believes that success is achieved through service to others. The company exists to
give team members meaningful and sustainable employment, to courteously serve our guests
fresh, quality products, and to support our local communities… all with a commitment to provide
the utmost convenience without compromise.

Targets
• implementation of Food Safety Management System throughout the Food Chain
• Enhancing Customer Satisfaction while considering present Needs and future Expectations
• Complying with all applicable Food Safety requirements, including Statutory, Regulatory &
mutually agreed customer requirements related to Food Safety
• Involvement of all employees in the food safety management system by enhancing the
competency of personnel at all levels
• Continual up gradation of technology, systems and services & Ensuring Best Hygiene and
Sanitation Practices
• Making use of Policy as a framework for setting objectives and providing resources to
continually improve the performance and effectiveness of Food Safety Management System
• Communicating our Food Safety Policy to all our Internal & External Interested.

18
 Achievements
• In this foods safety week celebrations, under the auspices of the Director General of Foods
Safety, Heritage’s Basanthnagar limestone Foods won 2 first prizes for environment and
pollution control and safe drilling and blatting and 17 2nd prizes for over all performance,
productivity, operation and maintenance of machines publicity / propaganda etc.,
• This section also bagged the award for Environment Protection in the Godavari River belt,
sponsored by the Godavari Pradushna Pariharna Pariyavarana.
Awards
• Heritage Foods bagged many prestigious awards including national awards for productivity,
technology, conservation and several state awards since 1984. The following are the some of
important awards.
Awards of Heritage
No Year Awards National / State

1 1984 Best family planning effort in the state State

2 1985 – 86 National productivity award National

3 1985 – 86 – 87 Foods safety National

4 1987 – 88 Best industrial promotion / expansion effort State

5 1987 – 89 Productivity award State

6 1988 – 89 Best industrial promoter State

7 1988 – 89 Expansion effort in the state State

Award for contribution given for rural State

8 1988 – 89
economy
9 1989 Best family planning effort State
Yajamanya Ratna & Best Management State
10 1989
Award
11 1988 – 90 Community development programs State

19
12 1988 – 90 Energy conservation National
May Day award of the Government of Andhra State
13 1991
Pradesh for best management
Pandit Jawaharlal Nehru rolling trophy for State
14 1991
best national productivity effort
Indira Gandhi National Award for Excellence State
15 1993
in Industry (Best Management Award)
16 1994 Best industrial rebellion award State
Rural development chief minister State
17 1994 – 95 environmental and mineral conservation
award.
18 1995 Best industrial rebellion award. State
Best effort of an industrial unit to develop State
19 1995 – 96
rural economy
Shri S.R. Rangta award for social awareness National
20 1996
for best rural development efforts.
21 1996 Best workers welfare. State
22 2016 Best family welfare award. State
First prize for mine environment & pollution State
23. 2017
control for the 3rd year in succession.
Vana Mithra award from Andhra Pradesh State
24 2019
Government.

20
 DATA ANALYSIS AND INTERPRETATION

The collected data has been processed using the tools of

• Networking Capital
• Turnover Ratio
• Current Ratio
• Quick Ratio
All these statements for the past five years period (2017-2021).
The above tools access in the interpretation and understanding of the existing scenario of the
Asset Liability Management

21
FINDINGS, SUGGESTIONS AND CONCLUSION

Findings, Suggestions and Conclusion will be explained and concluded in the further studies.

22
 BIBILIOGRAPHY

Title of the Books Author

1. Risk management Gustavson hoyt

2. Management Research magazine P.M. Dileep Kumar

3. India financial system M.Y. Khan

4. Financial risk management T. Rebonato

5. Handwork of Asset liability management A. Adam

6. Financial Management Prasanna Chandra

7. Financial Management P.K. JAIN

8. Financial Management S.N. Maheshwari

9. Financial Management I.M. Pandey

WEB SITES

WWW.heritageindia.com

WWW.HERITAGEAP.IN
WWW.RBI.ORG.COM

WWW.HERITAGEFOOS.IN

WWW.retailindia.com

23