SUMMER TRAINING PROJECT REPORT

ON
WORKING CAPITAL MANAGEMENT IN
BANARAS BEADS LTD.

For the partial fulfillment of the requirement of Degree of

MASTER OF BUSINESS ADMINISTRATION

(2012-2013)

From UTTAR PRADESH TECHNICAL UNIVERSITY, LUCKNOW

Submitted to:- Submitted by:

Mrs. Shweta Singh Aditya Kumar
Director M.B.A. IIIrd SEM.
Roll No.1118070003

M P Institute of Management & Computer

Application
Bhagatua, Varanasi
 Declaration
I hereby declare that the information presented in this dissertation report is correct to

the best of my knowledge. This report has not been published anywhere else. This

report is a part of my course curriculum and the main objective of this is to know the

“Working Capital Management”

Aditya Kumar
MPIMCA (Varanasi)
 Preface
I am heartily delighted that I have got the opportunity to do my summer training in the
company BANARAS BEADS LTD. which has been promoted by Mr. Ashok Kumar
Gupta (Chairman & Managing Director) on the topic “Working Capital Management
in Banaras Beads Ltd.” under the guidance of Mr. Jai Singh (Manager Accounts).

Summer training is an integral part of my academic curriculum. During the training I

got an opportunity to understand the practical aspects of theory. Training makes the
concept clearer.

This project report is outcome of the summer training that I have undergone at
Banaras Beads Limited for the partial fulfillment of Masters of Business
Administration.

The topic allotted to me by the company is “Working Capital Management in

Banaras Beads Ltd.”.

In this report I have tried to provide all the necessary information related to the topic
and also provide the latest trends which are happening in a day to day life in this
industry which serves as a base for predicting the future of the Beads Industries.

I have used very simple and easy language in this project report so that it can be
easily understood by the reader.

I have tried to my best to make a good report. However no one can claim perfection in
it entirely.

So I apologize for the discrepancy, if any, crept in. Preparation of project requires
perseverance, initiatives, proper guidance and direction. So it’s mandatory to take the
aid of various departments.
 ACKNOWLEDGEMENT

This is very difficult to fulfill all necessary requirement of the project but I
have tried my best to make a good and complete project. This would not
have been possible without the help of the following people to whom I am
highly obliged.
I am thankful to all the employees of BANARAS BEAD LTD, providing
me the opportunity to learn from their systematic approach of
accomplishing the work. I am very grateful to its employees especially the
Account Department for providing all the assistance, I needed and the
congenial working environment they provided me during my summer
training, they were so helpful that I never felt that I am doing training. I am
really grateful to them for all their help and guidance extended to me.
I take this opportunity to express my gratitude to all of them that is
more ways helped me to accomplish this challenging project in
Banaras Beads Ltd.. No amount of written expression is sufficient to
show my deepest sense of gratitude to them.
I would like to express my sincere thanks to the faculty member, summer
training in charge and my Lecturer Krishna Nand Tiwari, Varanasi who
gave me this opportunity to undertake summer training and helping me out
to do this project.
I am also thankful to my project guide Mr. Jai Singh (Manager Accounts)
for his keen interest, constructive criticism, persistent encouragement who
throughout the training and while preparing the project helped me a lot.
I am also thankful to my family and friends for their cooperation in the
project and valuable suggestions and creative ideas which helped me a lot
in making this project up to a standard mark.
I also want to express my gratitude to all those persons directly or
indirectly helped me in my summer training.
Last but not the least I would like to thank to the Almighty whom we call
“GOD” without whom nothing is possible in this world.

Aditya Kumar
MBA (FINANCE)
MPIMCA
Varanasi (U.P)
 Content
Chapter -1
Section-1
 Industry Profile
o An overview (Industrial Profile) 1
o Background (Company Profile) 4
o Existing System 5
o Vision, Mission ,Objective, Strategies, Brand essence 28
o Organization Structure & Management 32
o Board of Director 33
o SWOT Analysis 34
o Growth in Installed capacity 35
o Growth in Production 36
o Growth in Sales 37
o Growth in Human Resources 38
o Future plans 39
Section-2
o Financial Analysis 39
o Formulation of problem for the project report 48
Green Page
o Project on working capital management 48

Chapter – 2
 Research Methodology of the project 87
o Objective of the project 88
o Scope of the study 88
 o Period of study 88
o Method of study – whether universe or sample 88
o Source of information 89
o Statistical tools and techniques 89
o Limitation of the study 89
o Significance of the study 90
 To the company
 To the consumer
 To the Government
 To the Academicians
Chapter - 3
ANALYSIS OF DATA
a) Working capital management in Banaras Beads Ltd. 48

b) Analysis of Data & Interpretation

i) Cash Management in Banaras Beads Ltd.

iii) Inventory management in Banaras Beads Ltd.

iv) Loans & Advances in Banaras Beads Ltd.

v) Current Liabilities in Banaras Beads Ltd.

vi) Working Capital Cycle in Banaras Beads Ltd.

o Preparation of Tables and interpretation

o Preparation of charts and diagram and interpretation

Chapter - 4
 Finding and Observations 91
 Conclusion 92
 Suggestion 94
 Bibliography 95
 Glossary 95
 Annexure 96
 INDUSTRY PROFILE

What are Beads used for? The most obvious application of Beads which automatically springs to

mind is that they may be strung together to form a necklace, or may be made into any other form of

ornament. In a sense this is true. Decorating the human body has always been their most important

use. However, this is not the only part of the story.

Beads serve us in many ways which differ from culture to culture. Further, they tell about how other

people think and act. Certain instances of how Beads are used may strike you as a strange or far

removed from our lives. For some people, the whole point of collecting Beads is getting to know

other people in other places through one of their most intimate and personal belongings.

Special decorative Beads

The primary purpose of Beads is to be decorative. Many people put them on their animals and more

recently their cars and trucks, in their homes or on any number of other objects. Beaded curtains,

Beaded Lamp shades, Beaded Dresses and Beaded Toys, are just a few ways Beads enliven the

artifacts of our lives. Most of these Beads are almost universal and can fit into any decorative

scheme of things, but others are made for particular purposes. Beads made for specific uses are

commonly in any collection, and their names and functions should be understood.

Beads, found first, have been dated back to the time of the emergence of the Homo-sapiens, nearly

35,000 BC. The early beads were found made from animal bones and teeth. Beads used as cultural

objects came into existence between 33,000 to 12,000 years ago. By 1500 BC with the advent of

metal tools, beads made out of Semi- precious stone like agate came in use. Bead ornaments, like

necklaces, made out of agate, gold and silver were discovered at the royal tombs which dated back to

2600 BC to 2100 BC.

During this time period, many places, around the world like western Asia, Mesopotamia, Egypt, the

Indus Valley, Afghanistan, Crete, Mycenae and Cyprus, Iran etc. developed and used beads made

out of bone, stone, metal, ivory. Beads further evolved during the Roman Empire, between the

periods of 100 BC to 400 AD. Glass beads seemed to have come into existence during this period at

factories in Syria, Egypt, Italy, Switzerland, the Rhineland, France and England. Also during this

period, wherever the Romans went, they brought glass bead for the purpose of trade which were

produced in large numbers, in numerous colors, patterns and using complex techniques. These beads

were exchanged at places like Scandinavia, the Far East and south like China, Korea, Iran, Syria,

Mali and Eastern Ethiopia as Roman made glass beads have been found at these places. During the

first century BC with the advent of the blow pipe, the techniques in glass bead making were

revolutionized, giving great forms and decorative styles.

 COMPANY PROFILE

Background

M/s Banaras Beads Ltd. (A Govt. Recognized export trading house) established in the year 1940

is a pioneer in the field of glass beads industry of India. Today it is one of the largest

Exporters of glass beads holding 80% of market share of India’s glass beads exports. In recognition

of its distinctive role the company has earned several laurels and awards for consecutive years

from national and international bodies like chemical & allied products /carpets/silk &

handicrafts export promotion councils (India). The company has won president of India award for

excellence exports in July 1997.

The Company is an Export house recognized by government of India, ministry of commerce and

industries. The main Business is Export of handicrafts like glass beads, necklaces etc. as well as

carpets and other related items.

The company manufactures and exports quality products of glass beads, necklaces, imitation

jewellery, tasbee, fashion accessories & wide range of handicrafts items etc. Keeping in view the

requirements of international market, company has setup a manufacturing unit at Tandia

near Varanasi where imported exclusive machineries are installed with Czech technical

knowledge for manufacturing of glass buttons, chattons & cobushons of international

standards. With new range of its quality products , the company is geared up to meet the

challenge of tomorrow with its spotless track record of providing entire satisfaction to the

customers and paying prompt attention for their requirements.

Banaras Beads’ core objective is competency, concentration and centre of attraction to customers. It

believes in the entire satisfaction of the customer rather than pushing its products, sells or idea. It

approach is customer centric and is flexible enough to work according to the customer beads.

It believes in long term relationship Business rather than one time Business with its customers.

Historical background -: Banaras Beads manufacturing company was established in 1940.

Later it was incorporated as a private limited company on 10 th April 1980. subsequently it became a
deemed public limited company by virtue of section 43(A) (I) of the Companies ACT, 1956 and
obtained a certificate with a changed name “Banaras Beads Limited” and on 26 th October , 1994 the
company was converted into a Public Company.

The company initially commenced its operation with manufacturing of glass beads and imitation
jewelry and then diversified into wooden products, various silks products; hand knotted woolen
carpets and druggets, handicrafts and leather garments and accessories. The glass beads and carpet
division functions from the work site located at Industrial Estate, Varanasi and later with Expansion
of the carpet division, the company acquired land and constructed a full-fledged workshop at Tandia,
to carry out the finishing activities of carpet division.
The company’s export turnover during 1989-1990 was approx 92.5 Million but during the current
fiscal year it has reached up to mark of about 235 million.
The Varanasi unit is manufacturing glass beads, Necklaces, Earring, Tasbees, Fashion
accessories ,Hand-Knotted, Woolen carpet, Silk, Artificial Silk, Hand tufted Indo-Nepalese Carpet
and Druggets. The company has over 30 associate manufacturing of Handicrafts, Silk Fabrics,
Scarves & Brocade, Sarees etc. working under its technical expertise and quality control.
In last ten years, the company has grown every year & today is one of the biggest in the trade. The

young work force with its creative input & focused work is a great asset and is a prime reason for

consistent growth of company. By nature, Banaras Beads Limited is born leader.

Actively engaged right from order procurement to quality of production and dispatch the company

has in bred system and competence to handle challenging assignments. The company is located in

holy environs of Varanasi city, India.

The company is well-equipped with state of the art automatic machines. Banaras Beads limited had

recently installed quality software, which links all their departments & helps in working on critical

dates and follow ups. The company’s manufacturing process & its quality control measures are in

full compliance of society norms & standards.

In brief, the company is ready for the upcoming global challenges and to register remarkable rapid

growth.

Existing System

BBL has implemented software which should help them in managing everything in fingertips

of all its employees.

Basically their work starts from marketing section where they are having many groups who

are having their allotted country/regions to work on, although they can take orders from

others country too but preferably they have to concentrate on their allotted countries. Marketing

groups usually have a marketing head their assistant and their operators, and complete group

usually allotted a target in terms of order values and/or new customer and/or commodity/product

group, the value of target can be allotted separate for each currency\region. When marketing

personnel takes order, operator of marketing group prepares sales contract and supervisor checks the

same and authorizes the order to be forwarded to customers. Then they send contract to customer

by fax or mail and after that customer signs contract and return us by fax or mail. All these

information they use to store with order.

If case item is going to be manufacture then they prepare Job Card/Production Card, in case of item

is going to be purchased a purchase order is to be issued to individual party and in case of

item is coming from stock then an indent is going to be raised. In all cases items might be not the

same as required in order like suppose in order a red color 10 mm item in S polish is required but in

stock a plain item of red color 10 mm is there then they will issue the item from stock but some

compulsory instruction issued for processing on that item. So that after final/last processing item will

match exactly as per required in order. After every Processing/Job work we usually check Quality of

the items and differentiate them in Ok, Half rate, Shortage, Wastage, Rejected and Scrap item

and according to this if item required in order is going to be short quantity then a reverse

information must be followed up to production department that this much quantity must be reissued

for production or purchase or stock.

After final product received from procurement department, its packing starts and some times

packing is as per our standard packing but mostly packing is as per customer requirement. After this

they generate packing slip case no. wise with net. wt. and gross wt. after which they generate

invoice, challan and other documents that usually required in case of export as well as local

sale. Along with this they are having some customers where we usually generate invoice but

materials are on consignment basis and if item is not sold on certain duration then we have to take

back them and provide them highest selling item as per their sales. For this type of customers

they have to enter daily sales item wise in our system and they have to keep eyes on what item is fast

moving and what item is not selling there so that either they can issue a discount scheme for that

counter/place or they have to take back that item. And other reports will also be required which are

usually in practice for retail sales or export sales. For all these stock movement that finally generates

revenue for them that is the main motive of any profit making organization they usually take

advantages that government provide to their industry like Advance License, Drawback or other

schemes that can generate revenue either by lower price purchase or by import/purchase against
export against some declaration of by default. So since so many schemes are there to avail this

type of revenue and we are using all of them for our organization. .

Marketing Module

Banaras Beads Limited Marketing team divides in no. of groups.

Every group has Manager/Asst. Manager/ Operators

Every group is assigned targets revenue wise/group of products wise.

Every group assigned few countries for marketing.

If any group deals with the country which is belongs from another group then after deal/order

confirmation, the parent group some times handover the deal to concern group.

Sales / Marketing Reports

1 Sales Contract Report

2 Manufacturing Order Report

3 Working Sheets Report

4 Production Card Report

Countries Report

5 And many more report as per attached Documents

Production Module

After receiving Working sheet from Marketing Department production department is active and

starts its process. At first they divide their work in three parts.

1. Stock Check.

2. Job Work and

3. Sales and Purchase Method.

Stock Check:-

Here item wise they check stock, how much we have in store, how much we are going to give

vendor for job work and how much we will purchase finished/semi finished items from

vendor through purchase order. Check store quantity and mention into working sheet it can be

mentioned in such a way so that we can accumulate quantity from different location of stores of

BBL unit/stores.

Job Work:-

Balance (after filling stock quantity) quantity distributed in two branches job work and

purchase. In job work we issue raw material to vendor and give contract for finished/semi-

finished product with due date via bead issue slip, and make entry into job card/production

card. Quantity variance 10-20% is acceptable, when we get materials from job work. We can assign

many vendors to one job and one vendor too many jobs. We also issue mold, chimta etc. to

vendor for job work on returnable basis. Along with this, sometimes we also issue Silver foil to

job worker and charge the same too from them, and due to government restrictions we issue

purchase order too to some of job workers.

Sales and Purchase Method:-

For some of registered vendors of job work we issue purchase order too. To provide them

materials, we sale glass to them via challan, so their production rate/price will be higher than the

other unregistered vendors.

Production Report:-

 Production Card Report

 Purchase Order Report

 Challan Report
  Glass Issue Report

 Bead Receipt Report

 Issue slip Report

 Glass Bead Ledger Report

 Glass Bead statements Report

 And many more report as per attached formats

After receiving finished/semi finished items through above sources, we send most of items

for different process to washing department. After going through all process all finished/semi-

finished items received in store department where they initially check quality of items and

then OK quantity goes to packing department. After that they make green card to complete the

quantity according to sales contract order.

Washing Department:-

Here they do numbers of processes according to customer’s requirement, washing, policing, matting

etc. After every step we usually don’t have for QC but after 2-3 processing, we usually go for QC.

Hear we use chemicals and other raw materials we want their consumption register too, currently it

is not maintained.

Guthai Department:-

After washing department, if required some items move to guthai/stinging department. Here as per

customer’s requirement, they send items to vendor for stringing, it can be in a different

merging form like we issue materials in Kg and we receive items in kg as well as dzs,

groos etc. In guthai department issue through challan and receipt process is there as we follow

for vendor as we do in job work for bead mfg.

Packing Department:-

After received items from vendors, all items move to packing department for header, bar

code, tagging, packing etc. after that we make packing slip and send to marketing department.
Marketing department here match the items according to sales contract with the packing slip and

make check list and send to export/documentation department. Here more than one order can be

merged for one shipment or one order can be sending in more than one shipment.

Export /Documentation Department

After received packing list and check list document, export department prepare invoice &

challan and other relevant documents for shipment. Here different reports they make which we

have in hard copy. They are pre shipment, post shipment and finally BRC to close the order.

Export/Documentation Department Report:-

 Check List Report

 Packing List Report

 Document Details Report

 Party Wise Advance Detail Report

 Challan Report

 Invoice Report

 Draw Back (Declaration) Report

 Form SDF Report

 Export Value Declaration Report

 Shipping Instructions Report

 Bank Intimation Report

 Shipping Advice Bill Report

 GSP Certificate Report

 Certificate of Origin Report

 Certificates of Export and Realization Report

  Special Custom Invoice Report (only for USA)

 Single Country Declaration Report (USA/Canada)

 DL/LC/DA Report

 bill of exchange Report

 Application Performa for Certification Report

 Export Bill Register (Year wise)

 Drawback Report (Agent/customer/Air/sea/port wise)

 And many more report as per attached formats

Purchase Department

Purchase department running in two different departments. They usually production related

material purchase through guthai department head. And 2nd which is not related to production item

purchase order make through marketing department person.

Here every purchase done through purchase order and follow the standard format we have

taken in hard copy. But they can receive quantity with 10%-20% variance.10%-20% variance is ok.

If BBL can check such type of variance then we will able to give more exacta figure in

report.

Finance Department

User wanted to work in ERP same like TALLY. Only one report format is providing by finance

department. As discussion with finance user they want addition, modification and deletion provision

in voucher, but in the software point of view such type of provisions are not allowed in

approved voucher.

Stores Department

Stores department is divided into different location and they are managing to store finished goods as

well as raw materials stock too.

Over here stock must be received against some indent at some places we have to generate.
Payroll

Payroll is simply making here but returns submit for more than one unit merge with single

report. All most working procedure is same as the ERP procedure. Related to payroll all type of

report is available in the ERP.

Payroll Reports

 BIO-DATA Report

 Balance Leave Report

 Salary Register Report

 Statement of P.F Report

 Salary statements (TADIA Unit)

 Salary Slip form No-Report format

 Return of contribution Report

 Bonus Statement Report

 Form No-3A Format

 Form 6A Formats

 P.F Statement Month wise Report

 Group Gratuity Report

Profile of Mr. Ashok Kumar Gupta (In pursuance of Clause 49 of listing agreement):
Name : Shri Ashok Kumar Gupta
Father’s Name : Late Shri Kanhaiyalal Gupta
Date of birth : July 7, 1948
Qualification & Experience:
Mr. Gupta is Science Graduate from Banaras Hindu University. Mr. Gupta possess the experience of

more than 40 years in the business of Glass Beads, handicrafts, imitation Jewelry, necklace, carpets

and other related items. He has traveled worldwide extensively in business capacity. He is director of

the company since incorporation and has also been associated with various charitable institutions

including Managing Trustee of Ram Gulam Kanhaiya Lal Charitable Trust.

DIRECTORSHIP OF OTHER COMPANIES:

i) M/s BBL Beads Limited.

ii) M/S Banaras Beads Leasing & Finance (P) Ltd.

iii) M/s Mangalam Hospitality India Limited.

PARTICULARS OF EMPLOYEES:
The company did not have any employee covered by the provisions of Section 217(2A) of the

Companies Act’ 1956.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND

FOREIGN EXCHANGE EARNING AND OUTGO:
Information as per Section 217 (1) (e) of the Companies Act, 1956 read with Companies (disclosure

of particulars in the Report of Board of Directors) Rules, 1988 are furnished as under:

a) Conservation of Energy:
The operations of the Company involve low energy consumption, Suitable arrangement and it

is conscious to conserve energy wherever possible.

b) Technological Absorption:
 The Company has its own technological inputs for its products, developed in house with the

efforts of experienced staffs and the same have been upgraded from time to time. However

presently company has no collaboration arrangement with any foreign organization.

c) Foreign Exchange Earning and Outgo:

The foreign exchange earnings of the Company during the financial year has been Rs 2120.41

lacs from Exports of Glass Beads, Hand knotted Carpets, Handicrafts and other items. The

foreign Exchange Outflow during the year has been Rs.339.04 lacs for the import of materials,

foreign traveling expenses and other sales promotional activities.

SEGMENT:

a) Primary Segments –

The Company was having its commercial activity at Varanasi and Delhi. Therefore the company had

identified two geographical segments which were taken as primary reportable segments. The Delhi

Branch is now closed w.e.f. 05.09.2007 and now the company has its commercial activity at

Varanasi only. Hence separate segment wise reporting is now not required.

b) Secondary Segments :
The secondary segment reporting is based on business segments. Company’s main business is

export of Handicraft items like Glass Beads; Necklaces etc. all those items form just one

Segment. The sell of miner items such as carpets is less them 10% of total sales. Hence separate

segment wise reporting is not required.

OUTLOOK

As per international market trend the recession may continue in further years. In these circumstances

to increase turnover of the company, the management of the company has decided to carry Retail
Business under the Trade name and style De-Lemon through Retail Counters, Shop, Stores,

Franchise and in any other mode in India and abroad.

RISK_&_CONCERNS:
Presently the main business of the Company is Exports business, hence any further change in duty

draw back, DEPB and Exchange Rate policies would have a direct affect on the profitability of the

Company. In Retail Business there is lot of direct expenditures and legal formalities. But the

Directors are hopeful to manage the things and any adverse situation by better management abilities.

HUMAN RESOURCES & INDUSTRIAL RELATIONS:

The Industrial Relations were very cordial throughout the year. Measures for safety of employees,

training, welfare and development continued to receive top priorities by:-

 To enhance commitment of employees by recognizing and rewarding high performance.

 To build and sustain learning organization of competent world class professionals

COMPANY’S_PHILOSOPHY:

The Company’s philosophy on Corporate Governance is to maintain high level of transparency

and accountability in the functioning of the Company and its relationship with suppliers, buyers,

employees, bankers and proper regulatory compliances.

BOARD OF DIRECTORS:

The Board of Directors comprises of four Members and is responsible for Management of the

Company’s business. The Board’s role, function responsibility, accountability and number of

other Directorship and Chairmanship / Membership of Committees of each Director in various

other Companies are as follows:

 NAME OF Category NUMBER OF OTHER
DIRECTOR DIRECTORSHIPS AND
COMMITTEE
MEMBER/CHAIRMANSHIP
Other Committee Committee
Directorship Membership Chairmansh
ip
1. Shri Ashok Kumar Chairman &
Managing 3 1 1
Gupta
Director
2. Shri Ashok Kumar
Non-Executive 3 2 1
Kapoor
3. Shri Praveen Singh Non-Executive NIL 2 1
4. Shri Tanmay Deva Non-Executive 1 2 NIL

COMMITTEE FOR THE SHAREHOLDERS:

a) SHARE TRANSFER COMMITTEE:
The Committee met twenty times during the year 2008-2009 and approved or rejected
demat(s) / transfer (physical) of shares request, details given below. The Minutes of the share
transfer committee were laid before the Board of Directors of the Company for their
ratification and they have ratified from time to time.

Particulars
Physical Transmission For For
Transfer Demat Remat
No. of shares received 304260 0 4663 100

No. of shares accepted 304260 0 4663 100

No. of shares rejected due to 0 0 0 0
signature difference /
incomplete transfer deeds /
DRF forms

b) SHAREHOLDER / INVESTORS’ GRIEVANCE COMMITTEE:

 In terms of Clause 49 of the Listing Agreement with the Stock Exchanges, the Board of

Directors of the Company has constituted an Investor Grievance Committee comprising of

three Non-executive Directors viz. Shri Praveen Singh, Chairman, Shri Ashok Kumar

Kapoor and Shri Tanmay Deva, as its members, specifically to look into the redressal of

Grievances / Complaints of Shareholders and investors such as Transfer of Shares non-

receipt of Balance Sheet, etc. The meetings of said Committee were held on 24 th April’ 2008,

31st July 2008, 17th October, 2008 & 29th January, 2009.

The Board has designated Shri R.K. Singh, Company Secretary as the Compliance officer.

The total Numbers of queries received and replied to the satisfaction of the shareholders

during the year were 5 and no issue was pending for redressal as on 31st March, 2008.

The Company has done all compliances timely. No penalties, strictures have been imposed on

the Company by Stock Exchanges or SEBI or any statutory authority on any matter related to

capital markets during the year. The National Stock Exchange & Mumbai Stock Exchange has

suspended the shares of the Company w.e.f. 21.02.2001 and 17.02.2003 respectively, due to non-

compliance of Clause 41 of the Listing Agreements on that time. Now Company is complying all

the directives and have made request with both the stock exchanges to withdraw the suspension.

SHAREHOLDERS INFORMATION:

2. Financial Calendar 2008-09 : (F.Y. 01/04/2008 to 31/03/2009)

:

4. Dividend payment : NIL

5. Listing on Stock Exchanges : U.P. Stock Exchange, Kanpur

Bombay Stock Exchange- (Suspended)
National Stock Exchange -(Suspended)

6. Listing Fees : Fees paid for BSE, NSE and U.P Stock
Exchange
7. Stock Code with BSE : 526849

8. Demat ISIN Number in NSDL : INE655B01011

 9. Registered Office : A-1, Industrial Estate, Varanasi

10. Location of the Plant : A-1, A-5, Industrial Estate and G.T.
Road, Tandia, Varanasi

11. Electronic Registrars : Mas Services Limited

T-34, 2nd Floor, Okhla Industrial Area,
Phase - II,
New Delhi - 110 020
Ph:- 26387281/82/83
Fax:- 26387384
email:- info@masserv.com
website : www.masserv.com

12. Shareholders' Correspondence : Share Transfer in physical form and all

other correspondence / communications
regarding Duplicate Share Certificates,
Dividends, change of Address, etc. may
be addressed to the Company Secretary
at the Registered office of the Company
at
A-1, Industrial Estate,
Varanasi -221 106 (UP)

13. Compliance Officer : Sri R.K. Singh, Company Secretary

rksingh@banarasbead.com
14. Designated Exclusive E-mail for : bbl.investor@banarasbead.com
investor service

The company has requested Ahmedabad Stock Exchange, Kolkata Stock Exchange & Delhi
Stock Exchange to de-list our shares as the same are not being traded at there.
.
(ii) DISTRIBUTION OF SHAREHOLDINGS AS ON 31st MARCH’ 2009 :

Particular No. of % of share Number of % of share

Shareholde holders Share held holders
r
001 – 500 6706 96.03 757751 11.42
501 – 1000 156 2.23 104349 1.57
1001 – 2000 46 0.66 66650 1.00
2001 – 3000 22 0.32 55000 0.83
3001 – 4000 16 0.23 54580 0.82
4001 – 5000 6 0.09 27270 0.41
5001 – 10000 14 0.20 100080 1.51
10001 – above 17 0.24 5470542 82.43
6983 100.00 6636222 100.00

(iii) CATEGORY WISE SHARE HOLDING AS ON 31.03.2009:

 The category wise share holding of Members of the Company as on 31.03.2009 is as under –

Category No. of % of the

Shares Held Shares held
1- Promoters / Associates / Directors 3841522 57.89
2- Other Bodies Corporate / Mutual Fund 229636 3.46
3- Trust 1072000 16.15
4- NRI NIL NIL
5- Indian Public 1493064 22.50
Total - 6636222 100.00

(iv) DEMATERIALIZATION OF SHARES:

The equity shares of the Company are being traded compulsorily in dematerialized form

w.e.f. 26th March, 2001 and as on 31 st March, 2009 total number of 794306 equity shares

representing 11.97 % of the Equity Share Capital have been dematerialized.

OUR AIMS ARE:-

 Customer desire

 Customer delight

 Customer service

Corporate policy

“Quality is an asset which may be offered to the potential customer of the product or service. It

means fitness for the intended purpose in all aspects of the Company’s activities. It is the Company’s

policy to manufacture and Export goods which comply with the customer’s needs and designer’s

specifications. The Company will strive to meet the needs of its customer through a continuous

process of quality improvement.”

“The quality system is designed to ensure the maintenance of product quality standards

through the evaluation, inspection and verification of process at all stages of manufacturing.”
 “Compliance with the provisions and objectives of the manual are mandatory for all employee of

the Company. All employees are responsible for all quality improvement. Education and training are

vital to the quality improvement process.”

Mode of Marketing in BBL:-

 International trade fair and exhibitions.

 Personal visit to customer.

 Internet commerce.

Product profile:-

Product offered range:

GLASS BEADED FASHION JEWELLERY LIKE NECKLASES, EAR RINGS, BARCELETS,

ANKELETS, HAIR ACCESSORIES RINGS, FASHION ACCESSORIES LIKE BELTS,

POUCHES, VANITY BAGS, CLIPS, HANGINGS, MOBILE POUCHES AND

ACCESSORIES ETC.

i. Glass Beads -: The Glass Beads industry in India is in existence for last 400 years

with its manufacturing centres concentrated in Varanasi, Aligarh of the total production

of glass beads in India nearly 40% is exported and the rest 60% is consumed locally.
Again out of local consumptions, 50% goes for exports by using them in garment,

jewellery, decorative items etc. Thus hardly 10% of glass beads produced in the country is

consumed locally.

A pearl in a shell inspires BBL to be pioneer in beads manufacturing. Today BBL has

largest and unique beads range in quality and designs. The company has new a collection

of more then 1, 50,000 kinds of beads. We do mainly with glass beads but also with beads

made of Bone, Shell, Horn, Silver, Terra cotta and & Ceramics. In the new range, the

company is manufacturing glass buttons, Chattons and Cobushons.

BBL is one of the major Indian exporters of glass beads and during 1995-1997 the volume

of export by the company constituted over 80% of the total export from the company.

Since 1988-89 the company’s turnover from this division has been registering an average

growth rate of about 117%

Types of Beads:-

 Bone and horn beads o Lamp work beads

 Chevron beads o Lead crystal beads

 Ethnic beads, including stone o Lucite beads

Bead
o Millefiori beads
 Faux natural beads
o Pressed glass beads
 Fire-polished beads
o Seed beads
 Furnace glass beads
o Tagua beads
 Fusible beads
o Trade beads or Slave beads

ii. Handicrafts -: -: India is known for its handicrafts all over the world. For-

encasing this image BBL is also dealing in stuffed leather animal belts, art wares,

statues, candle stand, ceramic stands, ceramic and wooden toys, Christmas
 decorative items, cooper and wares, tobacco pipes, jewelry box etc. They keep with

updated design/style.

iii. Carpets -: India is a well known name in field of carpet. Keeping this

thing in mind, BBL has entered in the field of carpet and year after year

secured a sound position in international market and contributing in raising

foreign exchange. Indian hand–woven woolen carpets, Abusan carpets, Silk

and art silk carpets of Jaipur and Kashmir origin. Indo–Nepalese and Indo–

Tibetan 30 coins 4 ply /3 ply Durries. Hand tufted carpets and druggists. A

ready stock of assorted design / sizes of carpets, rugs, mats and druggist are

available at Varanasi.

BBL is a leading manufacturer and exporters of the state of the art hand

knotted woolen carpets, specializing as a sumptuous performer in all types

of Persian designs and others in assorted colour and design right from 3/30

to 16/80 quality Abu Shan, Bidjar, kashan designs. Turkish knots in antique

colours in natural vegetables dyes, Indo-Nepalese carpets (7/18 quality) and

Darries of 60 count 5 ply & 30 count 4 ply.

iv. Imitation & Silver jewelry -: As regards finished jewellery we have

more than 50,000 styles including Necklaces, Earrings, Bracelets, Hair-clips,

Belts, Accessories, Appliqués and Pendants etc., which are made of different

types of beads. BBL has a collection of more than 1,50,000 types of beads to

offer and they are being exported to various countries. Beads are made up of

glass , Bone , shell , Horns , mops , Silver , Terracotta , Wood , Ceramics ,

Venation , Chiron’s , Brass and white metal in both bright and antique look.

BBL is also supplying Plastic Trays from 1 to 33 Cavity in various shapes like
 Flower, Half Flower, Heart, Star, Suitcase & also providing Aluminum Boxes,

Blisters, Headers many more Packing items to Wal-Mart, Hobby-Loby,

Michaels, Joans, Cosco etc.

PRODUCT Vs AGE GROUP

Kids Matching
Teens Above 40
Trendy And “Jo Marji” collections
Classic

The main business of the Company is manufacturing and Export of handicrafts like

Glass Beads, Necklaces etc. During the year to increase the turnover, Company has

decided to enter into Retail Business under the Trade name and style De-Lemon to

Sale Company’s products through Retail Counters, Shop, Stores, Franchise and in

any other mode in India and abroad. In this connection company is in process to

open retail counter/ shops all over India under arrangement / agreement with various

local parties and Retail Stores like Total Retail, Mega Mart, Spencer’s, Ebony

Retail Holding, Pantaloon Retail India, Max Hyper Market, Varkey’s Retail,
 Ali Baba Retail, Jasmic Ladies Stores, Alpaonsa, Home Zone, Sab Ka Bazar,

Ceeez Fun Republic, Verizon Plus etc.

World’s largest exporter of glass beads, Banaras beads Ltd was born way back in

1940.From a small unit the company has come a long way with five factories and

networking all over the world with the leadership of Mr. Ashok kumar Gupta and his

son Mr. Siddhartha Gupta, and in this process Banaras beads has captive the hearts of

many women throughout the nation, with its wide products assortment of different

beads and jewellery.

Banaras beads products have positioned in the shelves of international market through

the biggest chain stores all over the world.

An established name in Indian glass bead manufacturing industry.

Years of experience and research prompt Banaras Beads to bring back the good old

days with a modern twist by presenting trendy and fashion jewellery ;collection in

Indian market under the brand name de lemon.

De-Lemon is a unique specialty Retail format where customers do not just buy products

for satisfying a need, they are actually trying to fulfill an emotional and pampering need

of creating a lifestyle/fashion statement or catching up with the prevalent trend in the

market. Quality of the products, praiseworthy service and will-researched customized

catalogue are the basic pillars on which the whole experience stands.

De –Lemon Franchise Plan:-

It has three types of franchise plans:-

1. Company owned franchise operated

2. Franchise owned franchise operated.

3. Franchise owned company operated.

Company owned franchise operated

Here company will purchase or lease a shop and hand over the same to the franchise

to run the business. Franchise has to carry out the interior decoration and the

purchase of all capital equipment and he has to give a deposit to the tune of Rs. 1.0

lakh per100 sq.ft. Company will provide all the goods required for the shop on a

consignment basis and he has to remit the collection on a daily basis to the company

bank account after deducting his commission of 50% on MRP. Company will carry

out all the promotional activities and advertisements to maximize the sale as and

when it is required.

If company is doing the interior also, the commission will be given @ 40% to the

franchise and the balance 10% will be adjusted in the interior cost and once it is

achieved, 50% slab will start.

Franchise owned franchise operated

Here the franchise will be having a show room and company will provide all

infrastructure to start a De-lemon show room. Company will do the interior of the

show- room and supply all the materials required for the shop on a consignment

basis. The franchise will be a commission of 45% on MRP and 5% will be adjusted

in interior cost and once it is covered, the slab of 50% will start. In this case also he

has to give a security deposit of 1.0 lakh per 100 sq ft.

In all the above cases, the responsibility of the stock (moving, non-moving and

defective) will be entirely entrusted with the company and it is the duty of the

company to replenish the stock in every interval and to check the stock on a

monthly basis.

Franchise owned company operated.

The procession of the place will be with the franchise and company will run the

show-room. Company will do the interior decoration and put all the materials

required for the shop. Company will look after the sales and all promotional aspects.

Franchisee has to pay an interest free refundable deposit to the tune of Rs. 1.0 lakh

[er100sq ft area.

Here franchise will be credited with a commission of 35% of the total sale and all

the expenses will be debited to this account and he will be eligible for balance

amount in his account.

Awards and Distinctions-:

Since its inception, The BBL has won many prestigious awards and distinctions

for its high achievements in the field of exports. It has been recognized by

government of India as a “Trading House of country” in the true sense. Some of

main awards and distinctions received by the BBL are:-

 President of India award for excellence in exports in July 1997.

 Chemical and allied for exports promotion council award – 17 occasions.

 CAPEXIL top exports award in SSI section- 2 occasions.

 U.P Government’s award for excellence in exports – 5 occasions.

 IMM- Data marketing man award-1980.

 Federation of small Scale industries award.

 Indian Silk exports promotion council award.

 Top exports award trophy 1993 -1994 from CAPEXIL.

 Exports certificates form Handicrafts exports promotions council.

Social Activities-: BBL is also discharging several responsibilities, the two

important social contributions are:-

 Through Ram Gulam Kanhaiya Lal Charitable trust, The Group is

contributing in a small way to the welfare of the community. Trust is

engages in a number of social activities for the upliftment of the needy. A

vocational training centre for women is being run by the trust at Arya Mahila

College at Varanasi, for importing technical and vocational training.

 The trust is also running a hospital on Naturopathy in the holy town of

Rishikesh on banks of The Ganga River. This hospital has proved to be a

bone for the people of Rishikesh and those of adjourning areas. Many

Pilgrims enjoy benefits from this hospital.

From the above actual information, it is clear that Banaras Bead Ltd. is a pride

of Varanasi. In fact, it is only industry in the private section in Varanasi which

has earned so much distinction on account of the great entrepreneurial spirit

demonstrated by Late- Kanhaiya Lal Gupta and his son Shri Ashok Kumar

Gupta who is presently the main force behind all development activity.
 Vision

"A world class integrated handicraft major, powering India's growth, with
increasing global presence".

Banaras Beads Limited in India has the vision to be the leading World’s largest

manufacturer & exporter of glass beads and therefore it plans to create a new retail

format branded outlet club with the name “De-Lemon” across the country. Banaras

Beads Ltd. plans to spread the De-Lemon unit at various locations. The idea behind

the concept is to showcase the range of Banaras Beads Limited at all the leading

stores, malls in India and abroad.

As a back-room activity, Banaras Beads Ltd. concept also encompasses Periodic

Product Training Programmes to keep counter salespersons on their toes.

MISSION
• “Develop and provide handicraft and related products according to
standards; at competitive prices integrating with innovation and
technologies and contribute towards Arts”

PROFESSIONAL APPROACH -

 As the company deals in handicraft items which is mainly an unorganized sector

but the company's professional approach towards its customers as well as

production & quality inspection is to strengthen in this field.

 To relentlessly pursue the creation of superior shareholder value by exceeding

customer expectations profitably, unleashing employee potential and being a

responsible corporate citizen adhering to its values.

OBJECTIVES

Objectives of organization-:
The main objectives of the Company as set out in the Memorandum of

Association are set out below:-

1- To promote, manufacture, Produce, Process, Develop, Design, Buy, Sale,

Exchange, Alter, Improve, Assemble, Import, Export or Otherwise deal in

all kind of handicrafts inclusive of beads made from glass, wood, brass,

plastic, ivory and block glass, glass rod, glass tubing, glass wares and such

other kinds as may be deemed necessary or Expedient for the company to

undertake and develop.

2- To manufacturer, design, develop, Engineer, process, sell, exchange, alter,

improve, manipulate, prepare, import, export or otherwise deal in any and all

kinds of silicate, sodium and other chemical products or their components.

3- To establish, carry on, extend, alter or develop the business of

manufacturing , buying , selling ,distributing , importing , exporting ,

exchanging , altering , converting or otherwise deal in materials required by

rugs and carpet industry , handicrafts , leather goods , plastic works , brass
 works , fruits , dry fruits , and eatable , silk and every description of clothes

or carrying on forward and ready business from immediate or further order.

4- To carry on the business of exports, in all forms and branches, of

commodities, articles, products and merchandise of any kind or nature

whatsoever and in that connection:-

a) To establish, promote, manage, control and maintain, export house and

branches and sales offices, organizations and facilities in India and

abroad.

b) To undertake, establish, provide, promote, procure and maintain all and

any services and facilities for export and import of goods and merchandise

of every nature and description including market surveys and studies; and

c) To undertake, promote and develop exports and to advise upon all matters

relating to the promotion, development, diversification and rationalization

of exports including the forms and methods relating to production,

packing, storage and marketing of goods.

5- To aim for performance excellence in the diversification business.

6- To embed quality in all systems and processes.

Strategies:

• Production according to standards established for handicraft items.

• Searching new market through handicraft fair organized by different

country by participating.

• Lowering the cost of product so that the manufacturing cost can be cut-

short.
• Providing research facility to the designer wing so that they may innovate

new idea and the organization can adapt the environmental changes in

handicraft s industry.

• Acquiring the recent technology (e.g.:- Computers, CAD-for designing

purpose, Tally-for accounting purposes) and hiring person who are use-to

with that technologies.

• The core competency and concentration and centre of attraction are only

customer, customer and customer. Company believes in the entire satisfaction of

the customer rather than pushing our product, sales or idea. Our approach is

customer oriented and is flexible enough to work according to the customer.

• The company believes in long term relationship business then one time business

with its customers. "OUR AIM IS CUSTOMER DESIRE, CUSTOMER

DELIGHT AND CUSTOMER SERVICE.”

Organization Structure & Management of BBL:-

The company is currently managed by Mr. A. K. Gupta, chairman. Most of

the manufacturing activities are carried out by 10,000 of craftsman in

various ancillaries units of the company. BBL at present has a work force of

nearly 151 peoples to carry out the function of production, making and

administration departments including factory workers.

OVERALL ADMINISTRATION OF THE COMPANY:-

General outlook of the management towards the workers is highly positive. The

relationship between the workers and manager is very good and I observed that the

problem which generally negatively effect the human relation on workers and

management relation of a concern are solved by the lower cadre of officers,

supervisors, immediately employing their personal influence. Most of the workers

are working for a long time in the company and they are having good sense of

commitment to the work. Supervision and general discipline among the workers are

strictly administered.

The administrative section is divided in many parts for prompt

management of the concern. There is a sound coordination among the various

departments. Production and marketing department of clubbed to each other.

Boards of Director
 
Chairman & Managing Director
            

       

Director Marketing Director Personnel Director Production Director Finance

General Manager

           

       

Administration
Personnel Manager HRD Manager Industrial Relation
Manager

   

   

Training &
Appraisal
Development

CMD

Manager Manager Manager Manager

(Production) (Fin, A/c,) (Mrktg) (HR)

Assistant Accountant Accountant (De- Accountant

Manager (BBEL) (Purchase) lemon) (Bank, Cash)
SWOT Analysis:-

Strength:-
 Ability to manufacture all types of beads

 Own manufacturing unit.

 Availability of suitable manpower.

 Access to customer.

 Established Brand

 Export Policy Favorable.

 BBL is a Debt free Company.

 Banaras beads Ltd. company is having a very wide administrative setup.

 Regular participation in International Trade-Fair.

 Constant updating.

 Banaras Beads is one of the fastest growing Export house in India.

 We are single unit in India manufacturing & exporting in Varanasi.

Weaknesses:-
 Traditional technology.

 Lack of professionalism.

 Wastage of raw material during the manufacturing and processing.

 Absence of standard marketing policy.

 More Lead Time

 Inaccurate Marketing Effort.

 Company does not use the advertisement, so customers don’t know about the

products.

Opportunities

 Contemporary Export policy of the Government.

 Global growth in market

 Ability to read of changing, customer performance i.e. demand for wooden

beads, metal beads, stone beads, seashell beads etc..

 Growing domestic demand for artificial jewelling and decoration.

Threats

 Introduction of upgraded technology

 Fast changing customer preference.

 Global trade policy

 Competition from China, Malaysia in Asia and Economy in Europe on the basis

of quality and cost.

 Great recession in the international market, which still prevails.

 China has picked up much share in international market due to their

unbelievable low pricing patters. Thus not only competition has increased but

we are forced to reduce the price further under pressure and offers sell our

products at unremunerative prices.

 Decline in foreign currency rates.

GROWTH IN INSTALLED CAPACITY

• Since all items that handicraft’s industry deals with; falling under cottage

industry, the term licensed and installed capacity are not applicable.

GROWTH IN PRODUCTION
(IN GLASS BEADS & NEC.)
 YEAR (IN KG) (IN DOZEN)

2008-09 14400277 6760.00

2009-10 29433456 22998.67

2010-11 73484633 153779.91

Interpretation:- The trend of the growth in production in both Kg. and

Dozen is significantly high and shows the production and management
efficiency .

GROWTH IN SALES

YEAR SALES (Rs.)

2002-03 6,53,65,156
 2003-04 6,54,84,240

2004-05 14,91,34,844
2005-06 13,97,22,424
2006-07 14,25,28,316
2007-08 29,91,84,635
2008-09 24,98,03,430

2009-10 16,09,25,345
2010-11 23,53,08,705

Interpretation:- The trend shows that the company has significantly

increased its sales volume year by year. The last two years, the sale has a
declining trend because of the global slowdown which has direct impact on
fashion items.
GROWTH INHUMAN RESOURCE
The major employees who are working for the organization are basically on
daily-wages or contract-basis which are on short term basis or fallow work-at-
home procedure, and a very few of them are payroll employee of the BBL.

Years Growth in Human Resource

2007-08 155 employees
2008-09 158 employees
2009-10 150 employees
2010-11 149 employees

Interpretation:- The Trend shows that the no. of employees is decreasing.

This is because of the use of computer based activities and automation.
Although many employees work on the contract basis which are not
covered in the study.

Future Plan-:
 The group is entering into a project to manufacture Chattons,
Coboshons, Faceted cut beads, Glass Beads, Pendent and
Chandeliers with German technology and assistance at Varanasi,
with capital investment of rupees hundred million.

SOME OTHER PROJECTS OF THE COMPANY -:

 Gold and silver studded jewelry units at new places.
 Opening of new export showrooms.
 Sports goods.
 Wax Candles and Decorative.
 Semi- Worsted woolen Yarn manufacturing.
 Woolen system Yarn manufacturing.
 It 100% EQU. Granite and marble processing.
 Consultancy assignment on organization transformation.

FINANCIAL ANALYSIS OF THE COMPANY

FINANCIAL RESULTS:
2009-2010 2010-2011
(Rs. in lacs) (Rs. in lacs)
TOTAL TURNOVER 2350.18 1609.25
Profit / (Loss) for the year 324.44 (616.08)
Prior Period Expenses 0.00 0.00
Net Profit Before Taxation 324.61 (616.08)
Provision for Taxation (Income Tax & Fringe Benefit tax) 35.58 2.20
Excess Provision of Taxation written back 0.40 4.03
Net Profit after taxation 289.44 (614.25)
Balance of Profit & Loss Account B/F (386.78) 16.89
Deferred Tax Adjustment 28.05 210.58
Balance of Profit & Loss Account C/F (125.38) (386.78)
APPROPRIATIONS
Proposed Dividend NIL NIL
Transfer to General Reserve NIL NIL

FINANCIAL / OPERATIONAL PERFORMANCE:

 2009-2010 2010-2011
(Rs. in lacs) (Rs. in lacs)
TOTAL TURNOVER 2350.18 1609.25
Profit for the year 324.61 (616.08)
Prior Period Expenses 0.00 0.00
Net Profit Before Taxation 324.44 (616.08)
Provision for Taxation (Income Tax & Fringe Benefit tax) 2.05 2.20
Excess Provision of Taxation written back 0.40 4.03
Net Profit after taxation 322.39 (618.27)
Balance of Profit & Loss Account B/F (386.78) 16.89
Deferred Tax Adjustment 28.05 210.58
Balance of Profit & Loss Account C/F (92.03) (386.78)

BANARAS BEADS LIMITED

BALANCE SHEET AS ON 31.3.2009
CURRENT YEAR PREVIOUS YEAR
  SCH   (Rs.)   (Rs.)
I.SOURCES OF FUNDS
SHARE HOLDER'S FUND
SHARE CAPITAL 1 66129720 66129720
RESERVES & SURPLUS 2 222558825 222558825
288688545 288688545
LOAN FUNDS
SECURED LOANS 0 0
UNSECURED LOANS 0 0
TOTAL 288688545 288688545
II.APPLICATION OF FUNDS
FIXED ASSETS 3
GROSS BLOCK 81344205 79394591
LESS DEPRECIATION 49687193 46708414
NET BLOCK 31657012 32686177
CAPITAL WORK IN PROGRESS 92119075 51003654
INVESTMENTS 4 14360739 5767345
CURRENT ASSETS,LOANS & ADVANCES 5
INVENTORIES 67846815 65508531
SUNDRY DEBTORS 10254337 9848436
CASH & BANK BALANCES 39040353 45378397
LOANS & ADVANCES 17157752 23676812
OTHER CURRENT ASSETS 635649 549300
134934906 144961476
LESS CURRENT LIAB. & PROVISIONS
LIABILITIES 6
CURRENT LIABILITIES 22161170 15772696
PROVISIONS 205479 220000
22366649 15992696
NET CURRENT ASSETS 112568258 128968780
MISCELLANEOUS EXPENDITURE 7
(To the extent not written off)
 DEFERRED TAX ASSETS 28779972 31584764
3867
PROFIT & LOSS ACCOUNT 9203488 7825
37983460 70262589
TOTAL 288688545 288688545
Accounting policies & Notes on Accounts 16
In terms of our report of even dated attached
.As per our report of even date
For Kamal Kishore & Co. For and on behalf of the Board of Directors
Chartered Accountants
(K.K. Srivastava) (Ashok Kumar Gupta) (Ashok Kumar Kapoor)
Partner Chairman & Managing Director Director
Place : Varanasi. (Jai Singh) (R.K. Singh)
Date : 30. 07. 2009 Manager (Accounts) Company Secretary

BANARAS BEADS LIMITED

PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31.3.2009
CURRENT PREVIOUS
  SCH   YEAR   YEAR
           
I.INCOME
           
TURNOVER 8   235,018,072   160,925,345
OTHER INCOME 9   20,665,608   21,328,572
           
      255,683,680   182,253,917
         
II.EXPENDITURE          
           
COST OF MATERIAL CONSUMED 10   133,715,819   94,547,518
MANUFACTURING EXPENSES 11   44,382,009   30,066,865
EXPORT & SELLING EXPENSES 12   18,258,323   13,653,019
PERSONNEL EXP. 13   12,378,867   11,592,911
ADMINISTRATIVE EXPENSES 14   7,825,131   9,563,411
REPAIR & MAINTENANCE 15   2,257,055   994,756
BUSINESS SETTLEMENT ACCOUNT     0   78,638,485
DEPRECIATION 3   4,422,160   4,804,605
           
      223,239,365   243,861,570
           
NET PROFIT BEFORE TAXATION     32,444,316   -61,607,653
PROVISION FOR FRINGE BENEFIT TAX     205,479   220,000
PROFIT AFTER TAXATION     32,238,837   -61,827,653
EXCESS PROVISION FOR TAXATION     40,292   402,931
BALANCE OF PROFIT & LOSS B/F     -38,677,825   1,689,245
ADD : ADJUSTMENT FOR DEFFERRED
TAX       -2,804,792    21,057,652

BALANCE OF PROFIT & LOSS ACCOUNT     -9,203,488   -38,677,825

           
           
BALANCE CARRIED TO BALANCE
SHEET     -9,203,488   -38,677,825
           
Accounting policies & Notes on Accounts 16  
In terms of our report of even dated attached  
   
.As per our report of even date  
For and on behalf of the Board of
For Kamal Kishore & Co. Directors
Chartered Accountants  
   
(Ashok Kumar Gupta) (Ashok Kumar
  Kapoor)
Chairman & Managing Director
(K.K. Srivastava) Director
Partner  
   
Place : Varanasi. (Jai Singh) (R.K.Singh)
Company
Date : 05.07.2009 Manager (Accounts) Secretary

Cash Flow Statement For the Year Ended 31st March, 2009
CURRENT YEAR PREVIOUS YEAR
(Rs. in Lacs) (Rs. in Lacs)
(A) Cash Flow from Operating Activities
Net Profit Before Tax and Extraordinary Items 324.44 170.30
Adjustment For :-
Depreciation 44.22 48.05
Profit on Sale of Fixed Assets (2.71) 0.00
Profit/Loss on Sale of Investments 3.53 (4.33)
Interest/Dividend/Lease Rent (39.95) (8.25)
Write off /write back /recoveries of Bad Debts(sundry Balance) 1.91 2.67
Other Non Cash Exp. 0.00   7.00 19.73 -32.13
331.44
138.17
Adjustment For :-
Trade & Other receivables 76.31 752.37
 Inventories (23.37) 204.31
Trade Payable 63.79   116.73 (14.15) 842.53
448.17
Cash Generated From Operations 980.70
Interest Paid 0.00 0
Direct Taxes Paid/Refund Received 19.68   19.68 6.05 6.05
19.68 6.05

Cash Flow Before Extraordinary Items 428.49 974.65

Extraordinary Items-Business Settlement Account 0.00 786.38

Net Cash From Operating Activities (A) 428.49 188.27

(B) Cash Flow From Investing Activities :
Purchase of Fixed Assets (447.44) -430.61
Sale of Fixed Assets/Transfer of Assets 5.08 110.21
Purchase of Investments (747.15) -686.32
Sale of Investments 657.69 861.56
Lease of Investments 0.00 0.00
Lease or Hire Charges 0.00 8.56
Interest Received 37.23 76.14
Dividend Received 2.72 3.55  
(56.9
Net Cash used in investing activities (B) (491.87) (491.87) -56.91 1)
(C) Cash Flow From Financing Activities :
Proceeds from issue of Shares-Reduction in Capital 0.00 0.00 -311.65
Proceeds from long term borrowings 0.00 0.00 0
Dividend Paid 0.00 0
Net Cash used in financing activities (C) 0.00 -311.65 -311.65
TOTAL (A+B+C) (63.38) (180.29)
Net Increase/Decrease in Cash & cash Equivalents -63.38 634.07
Cash & cash Equivalents As at 01.04.2007 453.78 298.79
Cash & cash Equivalents As at 31.03.2009 390.40 453.78
As per our report of even date
For Kamal Kishore & Co. For and on behalf of the Board of Directors
Chartered Accountants
(K.K. Srivastava) (Ashok Kumar Gupta) (Ashok Kumar Kapoor)
Partner Chairman & Managing Director Director

Place : Varanasi. (Jai Singh) (R.K. Singh)

Date : 30. 07. 2009 Manager (Accounts Company Secretary
ACCOUNTING POLICIES AND NOTES ON ACCOUNTS

1. BASIS OF ACCOUNTING:
The accounts have been prepared on the basis of historical cost convention and as

a going concern. Accounting policies not specifically referred to otherwise are

consistent with generally accepted accounting policies. The company generally

follows the mercantile system of accounting recognizing both income and

expenditure on accrual basis.

2. FIXED ASSETS:-

Fixed Assets are stated at cost of acquisition less depreciation.

3. DEPRECIATION:-
Depreciation on fixed assets is provided on written down value method at the rates

specified in Schedule XIV to the Companies Act, 1956 on single shift basis.

4. INVESTMENTS:-
Long Term Investments are shown at cost and fluctuations in the market price of

quoted shares are not provided for. Current Investments are valued at lower of

cost or realizable value and any reduction in realizable value is debited to the

Profit & Loss Account. If realizable value of current investment increases in

subsequent years the increase in value of current investment to the level of the

cost is credited to the Profit & Loss Account.

5. INVENTORIES:-
Basis of valuation

Raw Materials : At average cost

Finished / Semi-finished goods : At cost or market value whichever is

lower

Stores, spare parts : At cost and in appropriate cases charged

to manufacturing expenses in the year of

purchase.

6. FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currency are accounted for in accordance with AS-11

issued by the Institute of Chartered Accountants of India. Transactions in foreign

currencies are recorded at the exchange rates prevailing on the dates of the

transactions. Monetary items denominated in a foreign currency and outstanding

 at the Balance Sheet date are translated at the exchange rate prevailing at the year

end and the difference arising on account of variation in exchange rate is

recognized as income or expense in the year in which they arise. Non-monetary

items denominated in foreign currency are carried at the exchange rate in force at

the date of the transaction.

7. RETIREMENT BENEFITS:
(i) Company's contribution to Provident Fund, Family Pension Fund, ESI etc.

are charged to Profit & Loss Account on accrual basis.

(ii) Liability for gratuity in respect of employees is covered under the Group

Gratuity Policy taken by the company from Life Insurance Corporation of

India. The premium payable under the Policy, are charged to Profit & Loss

Account. The short fall in the Fund, as indicated by the L.I.C. is provided for

by the Company as gratuity liability.

(iii) The leave salary payable in respect of encashable leave is provided for

according to the service rule of the Company. Unavailed leave, which is not

encashable during the continuance of service, is not provided for.

8. Related Party Disclosures:

The Company has identified all related parties and details of transactions are given

below. No provision for doubtful debts or advances is made. Also no amounts

have been written off or written back during the year in respect of debts due from

related parties.
Details of Transactions:

Sl. NAME Nature of Amount of

No. Transaction Value of Outstanding
Transaction Items as on
entered during Balance
the year Sheet
Varanasi  
1 Banaras Beads Exports Ltd Sales 1931687 0
Loans 14998679 0
2 Ashok Kumar Gupta Remuneration 654000 ----
including P.F.

3 Prashant Glass Works (P) Bad debt 191174 0

Ltd W/off
4 Banaras Glass Beads ltd Purchase 8990798 748210(CR)
(earlier known as G.M.
Rangrej Ltd.)
    Sales 12563289
    Bead Polishing 291297
Charges
5 Mathur Vaishya jan Kalyan Loans 625000 750000(DR)
Trust
Donation 900 0

Deferred Taxation

i) In conformity with Accounting Standard-22" issued by The Institute of

Chartered Accountants of India as “Accounting for Taxes on Income", the

Company has provided for deferred tax during the year as under:

2009-2010 2010-2011
Deferred Tax Assets/liability on account of 272618 80035
ii) N o p r o v i s i o n
Depreciation
Deferred Tax Assets on account of Unabsorbed 28507353 31504729
Loss and Depreciation
Net Deferred Tax Assets 28779972 31584764
accumulated unabsorbed loss and depreciation in view of uncertainty of their

allowance by the Tax Authority due to delayed submission of Accounts.

 Earning per share:
Basic and diluted earnings per share are calculated by diverting the net profit for

the year attributable to equity shareholders by the weighted average number by

equity shares. The Company does not have any outstanding diluted potential

equity shares. Consequently the basic and diluted earnings per share remain the

same.

2009-2010

2010-2011

Net Profit attributable to shareholders (Rs.) : 28944173

Loss

Weighted average numbers of equity shares : 6636222

6636222

Basic earnings per share of Rs. 10/- each (Rs.) : 4.36

NIL

11. There are no small scale industrial undertakings to whom the Company owes a sum exceeding

Rs. one lac which is outstanding for more than 30 days during the year.

12. Remuneration to Directors:

Current Year (Rs.)
Previous Year (Rs.)
Chairman & Managing Director
Salaries 6,00,000
6,00,000
Contribution to Provident Fund 54000
72,000
Problem formulation: - The problem related to W.C. management in BANARAS

BEADS LTD. . . .

 Problem of Control of Idle Cash

 Problem of Manufacturing and capital of inventory

  Effective management of the C.L.

PROJECT ON:-

Working capital management in BANARAS BEADS LTD.

Introduction: Working capitals are the fund required for day to day operation of that

firm .it is said to be Blood of on business. The goal of working capital management is to

manage the firm’s current asset and liabilities in which a way that a satisfactory level of

working capital maintained.

The upper portion of the diagram above shows in a simplified form the chain of events
in a manufacturing firm. Each of the boxes in the upper part of the diagram can be seen
as a tank through which funds flow. These tanks, which are concerned with day-to-day
activities, have funds constantly flowing into and out of them.

CONCEPT AND DEFINATION OF WORKING CAPITAL

There are two concepts of working capital:-

Gross Working Capital and Net Working Capital.

The term Gross working capital also referred to as working capital, means the total

current assets. And the capital which includes all the detectable items like expenses and

others.

The term Net working capital can be defined in two ways:

(i) The most common definition of net working capital (NWC) is the difference

between current assets and current liabilities.

(ii) Alternative definition of NWC is that portion of current assets which is financed

with long-term funds.

The task of the financial manager in managing working capital efficiently is to ensure

sufficient liquidity in the operations of the enterprises. The liquidity of a business firm

is measured by its ability to satisfy short-term obligations as they became due. The three

basic measures of a firm’s overall liquidity are:

(i) The current ratio

(ii) The acid test ratio and

(iii) The net working capital.

Net working capital (NWC) as a measure of liquidity is not very useful for comparing

the performance of different firms, but it is quit useful for internal control. The NWC

helps in comparing the liquidity of the same firm over time. For purpose of working

Capital management, therefore WNC can be said to measure the liquidity of the firm. In

other words, the goal of working capital management is to manage the firm’s current

assets and liability in such a way that a satisfactory level of working capital is

maintained.
 Current Assets : Current assets refers to those assets which in the ordinary

course of business can be or will be converted in to cash within one year without under

going a diminution in value disrupting the operations of the firm.

Major current assets:

1. Cash in hand & bank balance

2. Marketable Securities

3. Account Receivables (less provision for bad debts & dis. On debtors)

4. Inventory

 Raw Materials

 Work-in-progress

 Finished Goods

 Stores & spares

5. Loan and Advances

Current Liabilities: Current liabilities are those liabilities which are interred at there

inception to be paid in the ordinary course of business within a year out of the current

assets or earning of the concern.

Major Current Liabilities:

1. Account Payables

2. Bank overdrafts

3. Accrued & Outstanding Expenses

4. Short-term loans, advances and deposits

5. Dividend payables
Types Of Working Capital: There are two types of working capital:

1. Regular or permanent working capital: Business activity does not come to

an end after the regulation of cash from customers for a company the process is

continuous and hence the need for a regular supply of working capital. However

magnitude of working capital required is not constant but fluctuating. To carry

on business a certain minimum level of working capital is necessary on a

continuous and uninterrupted basis. For all practical purposes, this requirement

has to be met permanently as with other fixed assets. This requirement is

referred to as permanent, regular or fixed working capital.

2. Variable, Seasonal or Special Working capital: Any amount over and above

the permanent level working capital is temporary, fluctuating or variable

working capital. The position of the required working capital is needed to meet

fluctuations in demand consequent upon changes in production and sales as a

result of seasonal changes. The basic distinct between permanent and temporary

working capital is illustrated in fig. given below-

Permanent and Temporary working capital

Strategy/Approaches of Working Capital: There are three approaches of working

capital-
 1. Hedging or Matching Approach – The term ‘hedging’ is often used in the sense
of a risk- reducing investment strategy involving transaction of a simultaneous but
opposing nature so that the effect of the one is likely to counterbalance the effect of
the other.
The hedging approach suggest that long-term funds
should be used to finance the fixed proportion of current assets requirements which are
require in a certain amount for given level of operation and hence, do not very over
time, in a manner similar to the financing fixed assets. The purely temporary
requirements, that is, the seasonal variation over and above the permanent financing
need should be appropriately financed with short-term funds (current liabilities). This
approach therefore, divides the requirement of total funds into permanent and seasonal
components, each being financed by a different source. This has been illustrated in table
given below:

Estimated Total funds Requirements of hypothetical LTD.

Month’s Total funds Permanent Seasonal

Required Requirements Requirement

(1) (2) (3) (4)

January Rs.8500 Rs.6900 Rs.1600

February Rs.8000 Rs.6900 Rs.1100
March Rs.9000 Rs.6900 Rs.2100

According to the hedging approach, the permanent portion of funds required (cal.3)
should be financed with long-term funds and the seasonal portion (cal.4) with short-
term funds. With the approach , the short-term financing requirements (current assets)
would be just equal to two of the short-term financing available (current liabilities).
There would, therefore, be no Net working capital.

Hedging or Matching Approach

2. Conservative Approach: This approach suggests that the estimated requirement of

total funds should be net from long-term sources; the use of short-term funds should
be restricted to only emergency situations on when there is an unexpected outflow of
funds. In the case of Hypothetical Ltd. In above table, the total requirements, including
the entire Rs.9000 needed in March, will be used only to meet contingencies. The
amounts given in column 4 of above table represent the extent to which short-term
financial needs are being financed by long-term funds, the Net working capital.

Conservative Approach

3. Aggressive Approach: This approach suggests that any firm has to use less long-
term funds.
According to this approach long-term funds should not be used
to finance to whole permanent working capital. Some part of permanent working capital
should be

Aggressive-Approach

Determinants of Working Capital:

It is difficult to determine the working capital in
the business for determination of working capital A firm should plan its operations in
such a way that it should have neither too much nor too little working capital. The total
working capital requirement is determined by a wide variety of factors. These factors,
however, affect different enterprises differently. They also vary from time to time. In
general, the following factors are involved in a proper assessment of the quantum of
working capital required.
1. Nature of business:

The working capital requirements of an enterprise are basically related to the conduct of
business. Enterprises fall into some broad categories depending on the nature of their
business The proportion of current assets to total assets measures the relative
requirements of working capital of various industries. Available date in respect of
companies in India confirm the wide variations in the use of working capital by
different enterprises. The percentage of current assets to total assets was found to be the
lowest in hotels, restaurants and eating house (10-20 percent range), while in electricity
generation and supply it was in the range of 20-30 percent. The enterprise in the
tobacco, construction and trading groups had as it to be expected, the highest
components of working capital (80-90 percent range). The other industrial groups fall
between these limits though there are very wide inter-industry variations.

2. Production Cycle: Another factor which has a bearing on the quantum of working
capital is the production cycle. The term ‘production or manufacturing cycle’ refers of
the time involved in the manufacture of goods. It covers the time-span between the
procurement of the raw materials and the completion of the manufacturing process
leading to the production of finished goods. Funds have to be necessarily tied up during
the process of manufacture, necessitating enhanced working capital. The longer the
time-span (i.e. the production cycle), the larger will be tied-up funds and therefore, the
larger in working capital needs and vice-versa.

3. Credit Policy: The credit policies relating to sales and purchases also affected the
working capital in two ways –
A. Through credit terms granted by the firm to its customers buyers of goods.
B. Credit terms available to the firm from its creditors.
The credit sales result in higher book debts. Higher book debts
mean more working capital. On the hand, if liberal credit terms are available from the
supplier of goods, the need working capital is less.
4. Level of Taxes: The first appropriation out profits is payment or provision for tax.
The amount of taxes to be paid is determined by the prevailing tax regulation. The
management has no discretion in this respect. If higher tax rate than that requirement of
working capital higher and vice version
5. Profit Level: Than level of profit earn differ from enterprise to enterprise. Higher
profit margin would improve the prospects of generating more internal funds there by
contributing to the working capital pool and vice version.

6. Growth and Expansion: As a company grows, it is logical to expect that a larger

amount of working capital is required. It is, of course, difficult to determine precisely
the relationship between the growth in the volume of business of the company and the
increase in its working capital. The composition of working capital in a growing
company also shifts with economic circumstances and corporate practices.
7. Price Level Changes: Changes in the price level also affect the requirements of
working capital. Rising prices necessitate the use of more funds for maintaining a
existing level of activity for the same level of current assets, higher cash outlay are
required. The effect of rising price is that a higher amount of working capital is needed.
 ADVANTAGES OF WORKING CAPITAL

1) Cash Discount- If proper cash balance is maintained the business can avail the

advantages of cash discount by paying cash for the purchase of raw materials

and the merchandise. It will result in reducing the cost of production

2) It creates a feeling of security and confidence – Adequate working capital

creates a sense of security, confidence and loyalty not only throughout the

business itself but also among its customer’s creditors and business associates.

3) Sound goodwill and debt capacity - The promptness of payment in business

creates goodwill and increases the debt capacity of business.

4) Easy loans for the banks – An adequate working capital helps the company to

borrow insecure loans from the banks because the access provides a good

security to the insecure loans. Banks favor in generating seasonal loans, if

business has a good credit standing and reputation.

5) Distribution of dividend – If company is sort of working capital it cannot

distribute the good dividend to its shareholders in spite of sufficient profits. On

the contrary if the working capital is sufficient, ample dividend can be declared

and distributed. It increases market value of shares.

6) Exploitation of good opportunities- In case of adequacy of capital in a

concern, good opportunities can be exploited. Company may make off-season

purchase resulting in substantial savings or it can fetch big supply orders

resulting in good profits.

 7) Meeting unseen contingencies – Financial crisis due to heavy losses, business

oscillations etc can easily be overcome if company maintains adequate working

capital.

8) It increases fixed assets efficiency – Adequate working capital increases the

efficiency of fixed assets of the business because of its proper maintenance.

9) High moral- The provision of adequate working capital improves the moral of

the executive because they have an environment of certainty, security and

confidence, which is a great psychological, factor in improving the overall

efficiency of the business and of the person who is at helm of affairs in the

company.

10) Increased Production efficiency – A continuous supply of raw materials

research programmes innovations and technical developments and expansion

programmes can successfully carried out if adequate working capital is maintained

in the business.

11) Maintaining Solvency and containing production – In order to maintain the

solvency of the business, it is necessary that sufficient amount of funds be available

to make all the payments in time and when they are due. Without ample working

capital productions will suffer particularly in the era of cutthroat competition and

business can never flourish in the absence of adequate working capital.

METHODS OF ANALYSIS OF WORKING CAPITAL

The analysis of working capital is a must on many counts. The analysis is of a great
importance to both insiders (management) and outsiders such as creditors, particularly,
short-term creditors are primarily concerned with the analysis of working capital. It is
also a valuable aid to management in measuring the efficiency with which working
capital is employed in the business. Thus, the analysis is an operational necessity for the
management of an enterprise to detect trends and take corrective measures.

In the realm of accounting theory two tools, namely (a) ratio analysis
and ( b ) Funds flow analysis, are available for analysis working capital position of an
enterprise.

(A) RATIO ANALYSIS: The ratios are the most common technique to analyze
current financial position of an enterprise. The ratios are computed on the basis
of figures appearing in t h e balance sheet of a company and the results so obtained
are compared with the norm for these ratios. Various types of ratios are used to
analyze different aspects of working capital. The choice of a ratio depends upon the
nature and purpose of the enquiry. A brief discussion of important ratios, which
are used for analyzing the different aspects such as circulation, liquidity, level and
structure of working capital, is being attempted here

1. LIQUIDITY ASPECT: An analysis of l iq ui di ty aspect of working capital is

essential for both the short-term creditors and the management of a business enterprise.
The short-term creditors get acquainted with the chances of receiving payment in due
date or the margin of safety, which may assure them of eventual payment in full. The
analysis equips the management with the information about the adequacy of
working capital and to the extent of trading. The liquidity aspect has been
analyzed by means of two popular ratios - current and quick ratios.

Current ratio: The ratio of current assets to current liabilities is probably the most
frequently used ratio. Current ratio is sometimes called working capital ratio. This
ratio is considered as an index of solvency of a concern. It shows the extent to which
a fall in value of current assets affects the payment of creditors. In other words, it
indicates the ability of an enterprise to meet its current obligations.

It is often considered as a banker's rule of thumb for measuring liquidity of a

business enterprise.
Years Current Assets Current Liabilities Ratio

2004-2005 28,55,21,192 3,11,29,121 9.17:1

2005-2006 26,24,92,326 4,05,42,333 6.47:1
2006-2007 26,45,96,858 3,18,94,209 8.30:1
2007-2008 14,49,61,476 1,59,92,696 9.06:1
2008-2009 13,49,34,906 2,21,61,170 6.03:1

Interpretation:- An ideal current ratio for a manufacturing company is 2:1 according

to accounting principle which denotes that the C.A. of a business should be at least
twice of C.L.. Current Ration of BBL is more than six times of its C.L. in the year
2008-09. Therefore, it can be said that short-term financial position of the company is
highly satisfactory and is in a position to pay its short-term obligation instantly. In
comparison with last year’s Current Ratio, it shows a declining trend because of the
recession.

Quick Ratio: Another ratio, which measure immediate solvency and supplements
the current ratio is the quick ratio. In computation of this ratio inventory is deducted
from the current assets. The total of quick assets is dividend by current liabilities arrive
at the ratio. The current liabilities used for this purpose do not contain 'provisions'. A
quick ratio of 1:1 is considered to be fairly good for a manufacturing company. Much
reliance cannot be placed on this ratio without going through the composition of
receivables, as receivables are not always liquid.

Years Liquid Assets Current Liabilities Ratio

2004-2005 5,62,53,239 3,11,29,121 1.81:1

2005-2006 7,29,92,528 4,05,42,333 1.80:1
2006-2007 7,66,97,389 3,18,94,209 2.40:1
2007-2008 5,57,76,133 1,59,92,696 3.49:1
2008-2009 4,99,30,339 2,21,61,170 2.23:1

Interpretation:- The short- term financial position of the company BBL with
the rigorous test of liquidity is sound because for every rupee of current
liabilities there is more than two rupees of liquid assets.

2. CIRCULATION OF WORKING CAPITAL

An analysis of the circulation aspect of working capital indicates the efficiency

with which working capital is being utilized in an enterprise. Various turnover ratios
covering each component of current assets have been developed to show the efficiency
in the use of working capital. The higher the turnover of these components, the less
will be the working capital of concern. These ratios may be divided into five
categories such as (a) inventory turnover ratios , (b) cash turnover ratio, (c)
current assets turnover ratio and (d) working capital turnover ratio.

Turnover of Cash: The ratio shows the relationship between the balance of cash
plus other liquid assets and operating costs and expenses. It shows the adequacy of
liquid assets to meet current operating needs. A high turnover of cash indicates an
insufficiency of cash to provide for emergencies. A low turnover of cash shows that
an excess cash balance is lying will the enterprise.

Turnover of Current Assets : This ratio measures the turnover of total current
assets used in business operations. The ratio is obtained by dividing the cost of
goods sold by total current assets. This ratio may be linked with the profitability of
an enterprise. For this purpose to other computations are done. First, net income is
divided into current assets which gives the rate of profit on average current assets.
Second, the rate of profit of current assets is divided by the turnover of current assets
which gives the rate of profit per turnover of current assets. The lower turnover and
profitability of current assets indicate the less utilization of working capital and
reverse is the case with a higher turnover and profitability.

PROFITABILITY RATIOS: A company should earn profits to survive and grow over
a long period of time. Profits are essential, but it would be wrong to assume that every
action initiated by management of company should be aimed at maximizing profits,
irrespective of social consequences. The profitability ratios are calculated to measure the
operating efficiency of the company. Besides management of the company, creditors and
owners are also interested in the company.
Gross Profit Ratio: This ratio expresses relationship between Gross profit
&sales.

Gross profit ratio=

years Gross profit Net sales Ratios

2006-07 22233287 249803430 8.90

2007-08 -61607653 160925345 -38.28

2008-09 32444316 235018072 13.80

Interpretation:- In the year 2007-08 ratio indicates the negative result means in this

year company suffer from losses due to recession demand was reduces. In next year

company recovers their losses & it earns profit i.e. 13.80.

Net Profit Margin: Net profit is obtained when operating expenses, interest and taxes
are subtracted from the gross profit. The net profit margin ratio is measured by dividing
profit after tax by sales.

Net profit margin= profit after tax / sales

Years Net Profit Net Sales Ratio

After Tax

2004-2005 (63,79,548) 14,25,28,316 -4.48:1

2005-2006 2,80,32,155 29,91,84,635 9.37:1
2006-2007 2,12,59,877 24,98,03,430 8.51:1
2007-2008 (6,14,24,722) 16,09,25,345 -38.17:1
2008-2009 3,22,38,837 23,53,08,705 13.70:1

Interpretation: - This ratio measures the rate of net profit earned on sales. It helps in
determining the overall efficiency of business operation. An increase in the ratio in the
year 2005-06 and 2008-09 over the previous year shows improvement in the overall
efficiency and profitability of the business.

In the year 2007-08 shows the abnormal loss because of the settlement of an old dispute
between two groups of shareholders by the Hon’ble Company Law Board.

Proprietory Ratio: It is the ratio of shareholders funds to total assets. It is also

called “Net worth to total assets” ratio or ‘equity ratio’. It serves as a measure of long-
term solvency. Indirectly it measures the amount of capital remains for investment in

other more fluid assets.

Propreitory Ratio=

Years Net worth Total assets Ratios

2006-07 321542810 264596858 1.21

2007-08 88688545 144961476 1.99

2008-09 288688545 134934906 2.14

Interpretation: - Proprietary ratio is treated an indicator of sound financial position

from long-term point of view, because it means that the firm is less dependent on

external sources of finance But on the contrary, the firm is totally dependent on outside

funds. Equity ratio of the company increases frequently every year.

NEED OF WORKING CAPITAL

The need for working capital cannot be overemphasized. The objective of financial
decision making to maximize the share holder’s wealth, it is necessary to generate
sufficient profits.

The amount of such profits largely depends upon the magnitude of sales. However,
sales do not convert into cash instantaneously. There is always a time gap between of
goods and receipt of cash. Working capital is required for this period in order to sustain
the sales activity. In case adequate working capacity is not available for this period, the
company will not be in a position of sustaining the sales, since it may not be in a
opposition to purchase raw materials, pay wages and other expenses required for
manufacturing the good to be sold. Working capital is required because of the time gap
between the sales and their actual realization in cash. This time gap is technically
termed as operating cycle of the business. In other words, the term cash cycle of
operating cycle refers to the length of time necessary to complete the following cycle of
events.

1. Conversion of cash into raw materials.

2. Conversion of raw materials into work in progress.

3. Conversion of work in progress into finished goods.

4. Conversion of finished goods into receivable and

5. Conversion of receivable into cash.

In symbols it can be expressed as follows:

O = R+W+F+D-C

Where,

O = Time duration of operating cycle

 R = Raw material and storage period

W = Work in progress period

F = Finished goods storage period

D = Debtors collection period and

C = Creditors period

The components of operating cycle can be calculated as follows:

Average stock of raw materials and stores

R = ------------------------------------------------------------
Average raw materials and stores consumption per day

Average work in process inventory

W = -------------------------------------------------
Average cost of production per day

Average finished goods inventory

F = ---------------------------------------------------
Average cost of goods sold per day

Average book debts

D = -------------------------------------------
Average credit sales per day

Average trade creditors

C = --------------------------------------------
Average credit purchase per day
An adequate level of current assets assures a smooth, interrupted sales process, thus
enhancing stock holder wealth maximization.

In this cycle cash is needed to purchase raw materials and convert raw materials into
work in process and then work in process is converted into finished goods. Finished
goods will be sold for cash and credit and ultimately debtors will be realized. The non-
manufacturing firms, such as the wholesalers and retailers will not have the
manufacturing phase. Rather they will have the direct conversion cash into stocks of
finished goods into debtors and then into cash. The operating cycle of service firms may
not have any inventory at all
Due to circulating nature of current assets, working capital is sometimes called

circulation capital.

CASH MANAGEMENT IN BANARAS BEADS LTD.:

Cash or liquidity is a very critical component in any Working Capital Management set-

up its important role many fold in any organization like Banaras Beads Ltd. Where

operation for Beads & other handicrafts generation is a continuous process requiring

fuel (like, Coal, Oil, electricity ) and inventory (glass rods, chemical and consumables

loose tools) and others. The nature of the product insures that it is exported out for sales

The Company also extends loans & advances to its suppliers and employees.

OBJECTIVE OF CASH MANAGEMENT

Cash is the vital component of the working capital of a firm, as every transaction
results either in an inflow or an outflow of cash. The main objectives behind
effective management of cash are:

(a) The precision of cash needed to meet operational requirement.

(b) The provision of reserves liquidity against the forecast outflows and
expected payments of cash and.

(c) Minimum balance of cash to be held with the object of channelizing

otherwise used cash into earning assets. A part of cash required as
compensating balance with the banks.

CASH RATIO :- This ratio has the purpose of assessing the proportion of cash to
current liabilities in the working capital set-up and the trend of the two. In any
working capital structure current liabilities serve to relieve the requirements of the cash.
The effect of rising current liabilities in the structure is to shorten cash holding periods,
and to increase Cash Turnovers. As this is the nature of these two factors in relation to
one another, the trend of this ratio must necessarily be falling one.

Cash Ratio: Since cash is the most liquid assets, a financial analyst may examine
cash ratio and its equivalent to current liabilities. Trade investment or marketable
securities are equivalent of cash therefore they may be included in the computation of
cash ratio.

Cash Ratio= Cash + marketable securities / Current liabilities

CASH RATIO = (CASH & BANK BALANCE )
CURRENT LIABILITIES

Years Cash/Bank Balance Current Liabilities Ratio

2004-2005 3,49,13,038 3,11,29,121 1.12:1

2005-2006 2,98,79,055 4,05,42,333 0.74:1
2006-2007 6,34,07,290 3,18,94,209 1.99:1
2007-2008 4,53,78,397 1,59,92,696 2.84:1
2008-2009 3,90,40,353 2,21,61,170 1.76:1
Interpretation:- The trend registered by this ratio is a rising one over the last three
years of this period. The trends have been a falling one over the first two years of the
period, when the current liabilities had increased by a larger proportion than cash.
This trend stood reversed over the last three years, mainly due to the abnormally
high and rising cash balances and a fluctuating yet slightly rising trend of current
liabilities.
CASH TO GROSS CURRENT ASSETS RATIO :-
This ratio has been used to see
the trend of the level of cash in the total current assets structure of the company on the
strengths of the rising cash balances during the last three years of our period.

Years Cash/Bank Balance Current Assets Ratio

2004-2005 3,49,13,038 28,55,21,192 0.12:1

2005-2006 2,98,79,055 26,24,92,326 0.11:1
2006-2007 6,34,07,290 26,45,96,858 0.24:1
2007-2008 4,53,78,397 14,49,61,476 0.31:1
2008-2009 3,90,40,353 13,49,34,906 0.29:1

Interpretation:- The ratio registers a rising trend which is not healthy for the
proportion of increase of cash in the total current assets structure of the company. I.e.
outfacing the rise of the levels of other current assets. Whereas, Inventory registers a
rising trend due to capacity additions and renovation and modernization and sundry
debtors an increase due to increasing sales, the high balances of cash are by no means a
progressive trend, as idle cash entails excessive losses.
The trend of the ratio cannot be seen as normal because of the contingencies
that have led to abnormally high cash balances during this period.
 CASH TO INVENTORIES RATIO :-
One of the major purposes of cash is to
pay for inventory. The relationship of these two current assets is mutually
complimentary.
However, the trend of the ratio of Cash to Inventory in a business that is
normally expanding and where cash is being effectively managed and controlled,
should be a decreasing one. The trend evidenced is an opposite one throughout the
period and especially during the last three years due to the high cash balance
obtaining there.
Therefore it shows that the cash is not effectively utilized by the company as a
result high closing balances of cash can be observed in these three years.

Years Cash/Bank Balance Inventory Ratio

2004-2005 3,49,13,038 10,03,27,238 0.35:1

2005-2006 2,98,79,055 8,09,39,188 0.37:1
2006-2007 6,34,07,290 8,59,39,395 0.74:1
2007-2008 4,53,78,397 6,55,08,531 0.69:1
2008-2009 3,90,40,353 8,59,39,395 0.45:1
Interpretation:- The ratio registers a rising trend which is healthy for the
proportion of increase of cash in the total inventory structure of the company. Whereas,
Inventory registers a rising trend due to capacity additions and renovation and
modernization and an increase due to increasing sales.

6. CASH TO PROFIT RATIO :-

Profit is an internal source of fund and hence, it tends to reduce the dependence on
external sources for the need of cash. If any business wants to grow and be in a
financially healthy position then this ratio must be a falling one, which shows that net
profits are more than the cash balances, and can also form the basis of rising net profits
every year.
As far as BANARAS BEADS LTD. is concerned it has experienced a rising level
of net profit every year, But this phenomena has been challenged during the last three
years, when due to abnormally high cash balances the Ratio shows a rising trend.
This rising trend of ratio shows excess of cash over profit which definitely has
an unfavorable effect on the Net Profit of the company by reducing its growth
opportunity.
 6. CASH TO PROFIT RATIO (CASH & BANK BALANCE)
PROFIT AFTER TAX

Years Cash/Bank Balance Profit After Tax Ratio

2004-2005 3,49,13,038 (63,79,548) -5.47:1

2005-2006 2,98,79,055 2,80,32,155 1.07:1
2006-2007 6,34,07,290 2,12,59,877 2.98:1
2007-2008 4,53,78,397 (6,14,24,722) -0.74:1
2008-2009 3,90,40,353 3,22,38,837 1.21:1

Interpretation: - The trend shows significant for the internal and external
analysis for decision making. The trend is fluctuating because of the global
slowdown and an internal dispute by the two shareholders.

8. CASH TO NET CURRENT ASSETS RATIO :-

Cash to Net Current Assets Ratio is used to measure the relation of cash to net
current assets. Therefore this ratio is considered with the purpose of estimating the
progression of cash as relieved by the trend of Current Liabilities in the working
capital set-up of the company.
This ratio shows a mixed trend due to abnormally rising level of cash during
the period and the generally rising trend of Current Liabilities with some
fluctuations. The ratio shows a nearly constant movement during the last three
years which indicates a control on the front of Current Assets on the strength of
Current Liabilities.
 The ratio would have had a similar trend even apart from current liabilities,
because in that situation cash to that extent would have been utilized leaving smaller
closing balances.

8. CASH TO NET CURRENT ASSETS RATIO:-

(CASH & BANK BALANCE)
CURRENT ASSETS – CURRENT LIABILITIES

Years Cash/Bank Balance C.A.-C.L. Ratio

2004-2005 3,49,13,038 25,43,92,071 0.14:1

2005-2006 2,98,79,055 22,19,49,993 0.13:1
2006-2007 6,34,07,290 23,27,02,649 0.27:1
2007-2008 4,53,78,397 12,89,68,780 0.35:1
2008-2009 3,90,40,353 11,25,68,257 0.35:1

GRAPH

Interpretation: - The trend shows significant for the internal and external
analysis for decision making. The trend is increasing very significantly during the
years.

CASH TO DEPRECIATION RATIO :-

According to many authorities depreciation is an internal source of fund. In
BANARAS BEADS LTD. the calculation of Depreciation is done on the basis of
STRAIGHT LINE METHOD at the rates as specified in schedule 14 of Companies
Act of 1956.
Depreciation is always charged to expenses. Depreciation affects the working
capital structure in the same way as current liabilities.
It can be observed that the ratio of Depreciation generally follows a rising trend
except for the F.Y (2003-04) when the ratio registers a small fall due to
 Decapitalization of some Plant and Machinery in the older stations of BANARAS
BEADS LTD. where the Renovation and Modernization exercise has been initiated.
The ratio is rising in the last three years of our period which is because of the
abnormally high cash balances during that period

9. CASH TO DEPRECIATION RATIO:-

(CASH & BANK BALANCE)
DEPRECIATION

Years Cash/Bank Balance Depreciation Ratio

2004-2005 3,49,13,038 5,65,17,788 0.14:1

2005-2006 2,98,79,055 5,92,77,336 0.13:1
2006-2007 6,34,07,290 6,38,02,893 0.27:1
2007-2008 4,53,78,397 4,67,08,414 0.35:1
2008-2009 3,90,40,353 4,96,87,193 0.35:1

GRAPH

Interpretation:- According to many authorities depreciation is an

internal source of fund . Depreciation is always charged to
expenses. Depreciation effects the working capital structure in the same
way as current liabilities.
It can be observed that the ratio of Depreciation generally follows a
rising trend.

INVENTORY SYSTEM IN BANARAS BEADS LTD.

An evaluation of performance:
Inventory is a form of working capital but with a difference, it is the least liquid
of the current assets.
 In BANARAS BEADS LTD., due to the nature of its product, the inventory
comprises raw-material, semi-finished or finished goods as is true for many
manufacturing businesses.

Every bead having a unique identity, which is recognize through shape, size, color &

some code assign through sample department but sometimes as per customers

requirement there is some change as per order. Along with mixed items Banaras beads

is having Tray/beaded kits in which no. of cavity are there and every cavity must

be assigned products either by measurement in weight or by no. of pc. or some

times by length if item is in length, sometimes a cavity contains more than one

items and in which some items might be measured in weight and some might be in

length or pcs.

When company export beads, it might be possible to change the description of items

at the time when we prepare invoice for dispatch, due to some

Documentation/customs clearance problem.

OBJECTIVE OF INVENTORY MANAGEMENT

The Inventory Management System covers details on General Principle on service level

BANARAS BEADS LTD. has to maintain optimum level inventory by applying

various inventory control techniques depending on the nature of item with respect to its

value, critically, market availability and other consumption pattern.

Operating guidelines for the function concerned to optimize the inventory.

1. Classification of items for management reporting and fixation of the norm.

2. Elaborate inventory control technique and procedural guidelines for their

application.
 3. Material Planning and indenting, using tools of the above stated techniques or

combination of techniques.

4. Fixation of responsibilities for undertaking various inventory analysis.

5. Review the monitoring Inventory status with respect to norms and level for

various items or category.

6. Spare parts forecasting, planning and budgeting.

INVENTORY MANAGEMENT – A THEORETICAL BASIS

Inventory is very important current assets. The term Inventory refers to the stockpile of

the products a firm is offering for sale and the components that makes up the products.

In other words, inventory is composed of assets that will be sold in future in the normal

course of business operations. The assets which firms stores as inventory in

anticipation of need are (i) raw materials (ii) work – in – process (semi finished goods)

and (iii) finished goods. The raw materials inventory contains items that are purchased

by the firm from other and are converted into finished goods through the manufacturing

(production) process. They are an important input of the final product. The work – in

process inventory consists of items currently being used in the production process.

They are normally semi-finished goods that are at various stages of production in a

multi-stage production process. Finished goods represent final or completed products

which are available for sale. The inventory of such goods consists of items that have

been produced but are yet to be sold.

Inventory represents the second largest asset category for manufacturing companies,

next only to plant and equipment. The proportion of inventory to total assets generally

varies between 15 and 30 per cent.

Decisions relating to inventories are taken primarily by executives in production,

purchasing, and marketing departments. Usually raw material policies are shaped by

purchasing and production executives, work-in-process inventory is influenced by the

decisions production executives, and finished goods inventory policy evolved by

production and marketing executives. Yet, as inventory management has important

financial implications, the financial manger has the responsibility to ensure that

inventories are properly monitored and controlled. He has to emphasize the financial

point of view and initiate programmes with the participation and involvement of other

for effective management of inventories.

Inventory, as a current asset, differ from other current assets because only financial

managers are not involved, Rather, all the functional area, finance, marketing

production and purchasing, are involved.

INVENTORY MAGANEMENT IN BANARAS BEADS LTD.

Inventory management is an area where integrated management approach involving all

functions department is primary requisite unless cooperation is forthcoming from O&M

and user department as and when needed the objective achieving high services level and

at the same time optimizing inventory will be for from achieving the basis need for

achieving objective of optimizing is dedicated all out efforts by all concerned.

GROUPING OF ITEMS FOR REPORTING & CONTROL

With the introduction of computerized Stores Accounting System, all

information/reports can be generated either item wise or by any required group under
the BANARAS BEADS LTD., Materials codification system (MCS). BANARAS

BEADS LTD. has codified the stores & spares under more than thousands main groups

(from 00 to 99). The analysis of reports for all main groups will require handling of a

large volume of data and numerous & bulky reports.

A new dimension in this state of affairs is that along with fast changing technologies &

the completion of life of plant & machinery in the older power station bringing forth the

phase of renovation & modernization.

This has added new items & quantities to the inventory as also rendering considerable

inventory surplus & obsolete. Inventory is sought to be controlled by getting all the

indents screened by a committee for justification in the light of its past consumption

pattern & estimated costs.

The efforts at inventory control have resulted in curtailing the cost sunk in the

inventory.

Inventory is valued by monthly weighted average method & is subject to, some major
analysis such as:-

ABC
XYZ
VED
ICU (Insurance consumables units)
SDE
& Other
FSN

The following are the analysis undertaken:

ABC analysis:-
In ABC analysis items are classified as:-

Class of items Annual usage (Rs.) Remark

A More than Rs. 1 lakh Based on last financial year
usage
B More than Rs. 10000/- upto Rs. -do-
100000/-
C Upto Rs. 10000/- Based on last 3 Years Usage
 for spares & last Year for
other.
D Item not covered by ABC

XYZ analysis:- (Stock value wise) with the items classified as :-

Class of item Annual Usage

X Stock value exceeding Rs. 100,00
Y Stock value between Rs. 10,00 and Rs.
1,00,000
Z Stock value up to Rs. 10,000

For ensuring continuous weeding out of unwanted inventory stock holding

analysis i.e. xyz analysis will be of significant importance. The criteria for declaring an
item as X, Y & Z shall be the same as for ABC items on stock value Consideration
basis.” The frequency of generation of reports for X Y & Z category items shall be
same as that for ABC category. The analysis based on stocks held at the end of every
quarter for X class items, at the end of half year for Y class items and at the end of
financial year for Z class items.

SDE analysis: - (Availability pattern wise, scarce, difficult, and easy with the items
classified as:-

Scarce – Items not available normally, Special efforts are required to locate the source
of such spares.

Difficult Items which are available with difficulty. They have limited sources, lengthy
procurement cycles etc.

Easy Items, which are available, ex- stock in the market.

VED analysis:- (Dispensability/critically pattern wise- vital, essential, desirable) with

item classified

Vital items whose absence even for a short duration will cause a loss of production

Essential Items who’s non- availability can be tolerated for a short while without
affecting the production.

Desirable Items, which are needed for plant equipment but without which the
equipment can run without much effect on its operations.

FSN analysis: (Movement pattern wise-fast, slow and moving) with the items classified
as

Fast Items, which are used at least once in a two year term

Slow Spares used / needed once in a four years term

Non-Moving Items without any movement for the last five years.
ICU analysis (Essential characteristics – wise insurance, consumable, unit replacement)
with the items classified as:

Insurance Items, also called emergency or capital spares, which are mostly function
parts of the machines and their life is very long and in many cases almost the same as
the operating life of the machine. Their failure credibility is very low but their failure
will cause long shutdown of vital equipment or the entire plant.

Consumable Items, which are required for the normal maintenance of the machine and
are consumable in nature.

Unit replacement spares Items where a unit as a whole is to be replaced either on

breakdown or after a specified period of service such defective or used units are
returned to the store after due repair future reuse.

The importance of these analysis and efforts to control inventory can be better
appreciated in the light of fact that carrying costs are 25% of the value of inventory.
The inventories held by BANARAS BEADS LTD. as on 31.03.09 were of
Rs.8,59,39,395.

Inventory Turnover Ratios

The inventory turnover ratios show the extent of use of working funds in different types
of inventory. These ratios include (a) the turnover of raw materials inventory, (b)
the turnover of stores and spares inventory, (c) the turnover of goods in process
inventory, (d) the turnover of finished goods inventory and (e) the turnover of
aggregate inventory.
 Inventory to Current Asset

Inventory to Current Asset = Inventory

Current Asset

Years Inventory Current Assets Ratio

2004-2005 10,03,27,238 28,55,21,192 0.12:1

2005-2006 8,09,39,188 26,24,92,326 0.11:1
2006-2007 85939395 26,45,96,858 0.24:1
2007-2008 65508531 14,49,61,476 0.31:1
2008-2009 67846815 13,49,34,906 0.29:1

Interpretation:-The trend shows that the inventory as a part of current

assets has increased continuously showing the inventory management
effectiveness.
 Inventory to Cash

Inventory to Cash = Inventory

Cash

Years Inventory Cash Ratio

2004-2005 10,03,27,238 3,49,13,038 0.12:1

2005-2006 8,09,39,188 2,98,79,055 0.11:1
2006-2007 85939395 6,34,07,290 0.24:1
2007-2008 65508531 4,53,78,397 0.31:1
2008-2009 67846815 3,90,40,353 0.29:1

Graph 3:-

Interpretation:- This ratio is high; it indicates the efficiency of the management in

converting stock into cash quickly, sound liquidity position and quality of goods

maintained.
 Inventory to Total Asset

Inventory to Total Asset = Inventory

Total Asset

Total Asset = Fixed Asset + Current Asset

Years Inventory Total Assets Ratio

2004-2005 10,03,27,238 28,55,21,192 0.35:1

2005-2006 8,09,39,188 26,24,92,326 0.31:1
2006-2007 85939395 26,45,96,858 0.32:1
2007-2008 65508531 14,49,61,476 0.45:1
2008-2009 67846815 13,49,34,906 0.63:1

Interpretation:- In the year 2006-07 & 2008-09 this ratio is high; it indicates the

efficiency of the management in converting stock into cash quickly, sound liquidity

position and quality of goods maintained. In the year 2007-08 its reduce i.e.2.19 due to

decreasing demand of goods.

Inventory turnover ratio = Cost of goods sold
Average Inventory
Years Cost of Goods Average stock Ratio
Sold

2006-2007 249803430 64631545.5 3.86:1

2007-2008 160925345 73456967 2.19:1
2008-2009 235018072 91158979 2.57:1

Interpretation:- This ratio is designed to measure efficiency of use of inventory. In

other words it measures the efficiency of inventory management.
As all inventory is used to ultimately facilitate sales & carries a cost it
is to be related to the cost of goods sold to measure its efficiency.
Cost of goods sold although a cost also indicates the turnover achieved.
It increases over the year , therefore be natural the cost of goods sold over the period of
5 year follow arising trend except for a slight decrease in the year 04-05.
The average inventory shows controlled level up to the year 04-05 &
increases thereafter due to the exercise of R & M. Being embarked upon in the older
units such as Banaras Beads Ltd.. The ratio likewise registers a generally stable trends
showing stability with a receding trend signifying quite an efficient inventory
management
 LOANS & ADVANCES
The loans and advances form a regular and integral part of the W.C. of the company.

The company has to extend loans and advances to the employee on a regular basis as a

part of their services condition.

In keeping with the trained agency in the market convenience the company has to extent

advances to its contractor and supplier . The advances to contractor specially at the

construction side included mobilization advances which are usually interest pairing all

the payment being before receipt exception as into the inventory are the consideration to

with advances. Loans and advances are the permanent features of a C.A. of W.C.

structure and as such the perfect permanent W.C. a large extent. There are treated are

C.A. because their recovery is in a short term in cash of supplier and contractor and

regular through salary in the cash of employee the loans of advances over our period of

study has been as follows:

 Loans & advances
RATIO:
Total C.A.

Years Loans & Advance Current Assets Ratio

2004-2005 12,89,40,716 28,55,21,192 0.45:1

2005-2006 10,85,60,610 26,24,92,326 0.41:1
2006-2007 10,19,60,075 26,45,96,858 0.39:1
2007-2008 2,36,76,812 14,49,61,476 0.16:1
2008-2009 1,71,57,752 13,49,34,906 0.13:1

INTERPREATION:
Loans & advances to total C.A is the regular permanent nature. Loans and advances can

be estimated from the above trends of the ratio of loans & advances to total C.A..The

trend shows the declining ratio expressing management aggressiveness and efficiency

THE IDEAL CASH CYCLE OF BANARAS BEADS

LTD.
 The cash or working capital cycle of a business should ideally be coterminous with the
financial year. It would be desirable to be shorter than this to be more than one during
the financial years. On the basis of the most favorable holding period & collection
period seen in the cycle computed variously for the years of our period, an ideal cash
cycle could be computed. The ideal cash cycle should have an inventory holding period
of 30 days assuming that the holding period obtaining during the last year of our period
is maintained. The cash holding period should be reduced to 30 days after a credit
period of 30 days only to be allowed to customers. The bills receivables collection
period obtained during the last year of our period (2007-08) was 12 days without the
incidental increment. The incidental increment of the billing cycle of 35 days should be
reduced to 15 days by making the billing period to be 15 days instead of the month.

IDEAL CASH CYCLE OF BANARAS BEADS LTD.

(IN DAYS)

Inventory Holding Period 30

Cash Holding Period 30
Bills Receivables Collection Period 60
Current Liabilities (5+15) (-) 20
100

Inventory Holding
Cash Holding Period
Period
30 Days 30 Days

Bills Receivables
Collection Period

60 Days
RESEARCH METHODOLOGY OF THE PROJECT

Research methodology refers to the methods researcher uses in performing

research operation. In this I have studied the various steps that are generally
adopted by researchers in studying their search problems along with the logic
behind them. When I talk of research methods I also consider the logic behind
the methods.

Working capital management is a significant facet of financial management. Its

importance stems from two reasons

 Investment in current assets represents a substantial portion of total investment.

 Investment in current assets and the level of current liabilities have to be geared
quickly to changes in sales.

The financial managers spend a great deal of time in managing the current assets and
current liabilities. Arranging short term financing, negotiating favorable credit terms,
controlling movement of cash, administering accounts receivables, monitoring the
investment in inventories etc. consume a great deal of time of financial managers.

W. C. is an integral part of the capital structure of any concern and it has to be used in

such a way that maximum output can be expected with the minimum input.
Objective Of the Project

My objectives of doing research on working capital management in Banaras Beads

Ltd. are as follows.

1. Primary Objective –

 Find out the relationship between working capital and profitability.

 Find out the different aspects of working capital.

 Determine the profitability of various component of working capital and their

relation to profitability and sales.

 To examine the trends in working capital.

2. Secondary Objective -

To analyze components of working capital i.e.

 Inventory

 Cash

Scope of the Study

System of W.C. Management of BANARAS BEADS LTD. The scope of this project
covers the beads industries and basically based on the ratios.

Period of study

5 years from 2004-2005 to 2008-2009

Method of Study

 Personal interviews & general discussion with the executives & employees.

 Collection of data from Annual Report of 2004-2005 to 2008-2009

 Study of system of W.C. management of BANARAS BEADS LTD. from

Website – www.banarasbead.com, www.beadsonweb.com,

www.banarasstockoffer.com, www.bblheritage.net
Sources of Information

 Secondary data - Annual Report 2000- 01 to 2008-09

 Manual

 Brochure of Banaras Beads Ltd.

 Booklet of Banaras Beads Ltd.

 Website of www.banarasbead.com

Statistical tools and techniques

 Bar Diagram

 Graphs

 Histogram

 Tabulation

 Percentage

 Ratio

Limitation Of the Study

a) Finding are conditional

b) Data of BBL is available in combined form. Varanasi is the main branch of

BBL but its data is not published separately.

c) It is not possible to cover the total aspect of the Working Capital of BBL within

the short period. So, due to the limitation of time I have tried my best to present

the Working Capital Management and Cash/Bank Management in BBL, as per

availability of material & records.

d) Some officers were hesitating to give the information.

e) The data used in this study has been taken from the Balance sheet & Internet
and are historical.
f) Information or the secondary data required for the study is also limited.
Significance of the study

 To the Company -Company will able to formulated W.C. planning

efficiently & economically. It will make company goodwill in market.

Company will be able to command as well as identifying & exploiting

the market. This may be significant to the Company (BBL) to obtain

managerial efficiency and effectiveness to achieve its future plans or

organizational objectives.

 To the Industry – Industry will have better insight into effective

management of C.A. & C.L. and would able to detain its permanent

W.C. more fruitfully along with a more practical system.

 To the consumer – This study of W.C. Mgt. in BANARAS BEADS

LTD. is significant for consumer because this will help in enhancing

knowledge that how W.C. should be managed and also the relationship

with the companies & to the companies’ profitability.

 To The Government:- Significance to the Government who is the

major intervene is to decides the subsidies and relaxation in rules. Govt.

also can ascertain the problems being faced and the procedure of

taxation.

 To The Academicians etc.:- The Academicians would get insight

to improve the various technique of monitoring and controlling of the

C.A. that are in the operation in company. Academicians would also get

knowledge & the innovative method of W.C. mgt. That hence would

come into practices by the company.

Finding & Observation:

 An ideal current ratio for a manufacturing company is 2:1 according to

accounting principle which denotes that the C.A. of a business should be at
least twice of C.L.. Current Ration of BBL is more than six times of its C.L. in
the year 2008-09. Therefore, it can be said that short-term financial position of
the company is highly satisfactory and is in a position to pay its short-term
obligation instantly. In comparison with last year’s Current Ratio, it shows a
declining trend because of the recession.
 For the last two years Banaras beads Ltd. shows the less liquidity of the inventory. Thus
Banaras beads Ltd. may pay more attention of its liquidity of inventory such that they

may be utilizing more affectively.

 There is an adequate internal control procedure and internal audit system

commensurate with the size of the company and the nature of its business. The

Directors have been making consistent efforts to improve such procedures and

systems keeping in view the needs of business and experience gained.

 Conclusion

 During the year the overall turnover of the Company has increased by 46.22%.

Despite the great recession in International market and fluctuation in rate of

foreign currency. The Directors hope to achieve better turnover of the Company

in next financial year.

 WORKING CAPITAL MANAGEMENT is an important area to be focused so

that short requirement of cash can be fulfilled timely and efficiently.

 The overall operating efficiency of BANARAS BEADS LTD. Ltd. is good as it

has maintained a consistent and stable rise in net profit which shows its financial

soundness.

 Being a private organization BANARAS BEADS LTD. has to follow various

rules and regulations issued by government and there are various constraints in

its working which should be eradicated.

 Decisions related to short term needs should be more effectively implemented to

enjoy more corporate power and the economies of goodwill in the market.

 As a matter of fact all working of the company depends on the efficiency and

devotion of the employees and owner of the company. The company Banaras

beads limited has a good reputations in foreign country. It produces high quality

of products. When it comes to enjoy a good market share then we see that is not

so good because producing the good quality of product is not only the criteria to

capture market. BBL does not enjoy the domestic channel market so it is unable

to ensure proper and timely delivery of their products to customers, as a result

customers do not have faith in it.

 It is a concern which export and sales its products to foreign parties and in

domestic market.
 This organization has hold high position in beads and carpet export trade. This

concern is exercising progress day by day.

 In this firm every department is computerize. Here many advance computer

system packages are available in this company. Very good working facilities are

provided.

 The Company’s products are mainly fashionable items thus its demand is highly

fluctuating with changes in fashion. The management is making extensive efforts

to match with changing fashions and marketing requirement by improving the

quality, cost reduction and also broadening the marketing network.

 The Company is having an adequate internal control system covering all areas

of operations. There is proper safeguard of assets through internal control

system, which prevents any wastage, loss and unauthorized use of any assets.
Suggestion:
 The company should get the glass bead manufacture itself in its

factory instead of getting than produced outside, the will save and in

getting the work done.

 It is also recommended that work and positions should be allotted

and provided to the employees according to their extra and specific

qualifications, aptitude and latent. That will lead the organization “A

STEP AHEAD” of the other competitive organizations.

 The company should try to improve its cash position by

commercializing its bi-product like cash.

 Current assets of the company should be effectively used in due

course of time by the lower level by delegating them more power for
quick decision making.
 Time is major constraint in today’s business, so BBL should ensure

that the products are delivered in time.

 A section of employees are not contended with the pay and benefits

policy of the organization. The management

should get the feedback and make necessary changes in the policy as

early as possible so that the performer employees can be retained in

the organization.
 BIBLIOGRAPHY
1. BOOKS AND JOURNALS

2. IGNOU TEXT MATERIAL

3. FINANCE MANAGEMENT I.M. PANDEY, S.C. KUCHHAL

4. ANNUAL REPORT OF Banaras Beads Ltd.

5. JOURNAL FOR WORKING CAPITAL OF Banaras Beads Ltd.

6. WEBSITES :-

 www.banarasbead.com,

 www.beadsonweb.com,

 www.banarasstockoffer.com,

 www.bblheritage.net

 www.google.Com

GLOSSARY
 N.P.V. NET PRESENT VALUE

 W.C. WORKING CAPITAL

 C.A. CURRENT ASSET

 C.L. CURRENT LIABILITY

 B.P. BILLS PAYABLE

Annexure
 SCHEDULES TO ACCOUNTS IN RESPECT OF YEAR ENDED 31.3.2009
CURRENT
YEAR PREVIOUS YEAR
SCHEDULE:1
SHARE CAPITAL
AUTHORISED CAPITAL
Authorised
1,20,00,000 Equity Share of Rs. 10/- Each 120000000 120000000
ISSUED, SUBSCRIBED & PAID UP

6636222 Equity Shares(Previous Year 6636222) 66362220 66362220

Of Rs. 10/- Each Fully paid -up
Less : 3116502 Equity Shares cancelled as per order
of Hona'ble Company Law Board dated 4.7.2007
Less :Calls in Arrears 232500 232500

66129720 66129720
SCHEDULE:2
RESERVE AND SURPLUS
Share Premium Account 224765500 224765500
Less : Calls in Arrears 2206675 2206675
222558825 222558825
PROFIT & LOSS ACCOUNT
Balance as per Last Account 0 0
Profit/Loss of the year as Profit & Loss A/c 0 0
Less: Defferred Tax Adjustments 0 0
0 0

Total 222558825 222558825

SCHEDULE 3- OF FIXED ASSETS AS ON 31.3.2009

GROSS BLOCK DE
   
NAME OF ASSETS RATE    
 OPENING UPTO
BALANCE ADDITION DEDUCTION TOTAL 31.3.2007 D/Y
AS ON
    1.4.2007          

LAND 0.00% 8874672 0 5403396 3471276 0

FACTORY
BUILDING 10.00% 46759963 5247950.35 18198310.55 33809603 31653429 1537

FURNITURE &
FIXTURE 18.10% 9660069 638400.00 4227647.71 6070822 6250798 676

PLANT &
MACHINERY 13.91% 18112507 997302 999753 18110057 9732084 1315

ELECTRICAL
EQUIPMENT 13.91% 6105244 0 1327411 4777833 4132087 266

OFFICE
EQUIPMENT 13.91% 1849086 7800 1092311 764576 1602600 22

VEHICLES 25.89% 7883609 0 440990 7442619 4882204 775

COMPUTER 40.00% 4445686 24110 1230339 3239458 3881383 210

FURNACE 100.00% 1708349 0 0 1708349 1668309

TOTAL 105399186 6915562 32920157 79394591 63802893 4804
CAPITAL WORK-IN -
PROGRESS 14858422 63395291 27250059 51003654 0
TOTAL AFTER
W.I.P. 120257608 70310853 60170216 130398245 63802893 4804
 SCHEDULE TO ACCOUNTS IN RESPECT OF YEAR ENDED 31ST MARCH 2009
SCHEDULE 04
INVESTMENT (AT COST)
NO. OF FACE CURRENT PREVIOUS
NAME OF COMPANY SHARES/ VALUE YEAR YEAR
  BONDS   (RUPEES) (RUPEES)
I. (QUOTED)
Equity Shares
State Bank of India 0 0.00 0 500102
(op. 431 nos shares pur.600 nos sold 1031 nos on Rs. 1846168.91
on profit Rs. 365378.71)
Setco Leasing Co Limited 0 0.00 0 99720
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
Gee El Woollen Limited 1000 10.00 10000 10000
Blue Dart Express Limited 0 0.00 0 60000
(op.sold 800 nos shares on Rs. 490655.62 on profit Rs.
430655.62)
Metro Chem Industries Ltd 100 10.00 11000 11000
Pertech Computer Limited 600 10.00 36000 36000
Elbee Services Limited 100 10.00 14000 14000
Kabson Industries Limited 1300 10.00 13000 13000
Bholanath International Ltd 300 10.00 6020 6020
Ideal Carpets Limited 300 10.00 2252 2252
M.P.Telelinks Limited 500 10.00 5000 5000
Rungta Irrigation Limited 600 10.00 36797 36797
Dena Bank 0 0.00 0 12000
(op.sold 400 nos shares on Rs. 27866.64 on profit Rs.
15866.64)
GKB Opthalmics Limited 1000 10.00 35000 35000
Reliance Industries Ltd 100 10.00 300676 496246
(op. 400 nos shares pur.100 nos sold 400 nos on Rs.
701850.80
on profit Rs. 205605.15 Balance 100 nos
shares)
Reliance power Ltd 15 10.00 6750 0
Reliance communication
venture ltd 300 10.00 191684 0
Hindalco Industries Ltd 0 0.00 0 27390
(op.sold 200 nos shares on Rs. 32841.81 on profit Rs.
5451.31)
Hindustan Lever Ltd 0 0.00 0 538686
(op. 2500 nos shares pur.2000 nos sold 4500 nos on Rs. 935239.74
on loss Rs. 18554.29)
ICICI Bank Ltd 0 0.00 0 499326
(op. 600 nos shares pur.1000 nos sold 1600 nos on Rs. 1610528.92
on profit Rs. 225041.66)
Infosys Tech Ltd 200 10.00 434220 434220
ITC Ltd 0 0.00 0 34440
(op.sold 200 nos shares on Rs. 37072.29 on profit Rs.
2631.79)
Bhel 0 0.00 0 0
(op. nil pur.300 nos share sold 300 nos on Rs. 584593/-
on profit of Rs. 79020/-)
Aptech Limited 0 0.00 0 0
(op. nil pur.200 nos share sold 200 nos on Rs.79777.30
on profit of Rs. 2582.85)
Suzlon Energy 0 0.00 0 0
(op. nil pur.300 nos share sold 300 nos on Rs.437717.59
on profit of Rs. 79576.55)

SCHEDULE TO ACCOUNTS IN RESPECT OF YEAR ENDED 31ST MARCH 2009

SCHEDULE 04
INVESTMENT (AT COST)
NO. OF FACE CURRENT PREVIOUS
NAME OF COMPANY SHARES/ VALUE YEAR YEAR
  BONDS   (RUPEES) (RUPEES)
GMR Infra 800 10.00 156894
JP Associates 800 10.00 31781
Neyveli lignit 800 10.00 157952
ONGC Corporation 150 10.00 175922
(op. nil pur.650 nos sold 500 nos on Rs. 459802/-
on profit Rs. 22751.42 Balance 150 nos shares)
II. UNQUOTED
Equity Shares
G.M. Rangrej Limited 112500 10.00 1125000
Gold Star Communication (P) Ltd 0 0.00 0
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
Banaras Manufacturers (P) Ltd 0 0.00 0 231250
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
Banaras Marbles & Granite Ltd 0 0.00 0 2035000
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
Banaras Clothiers (P) Ltd 0 0.00 0 20000
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
BBL Consumer Products (P) Ltd 0 0.00 0 2358600
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
BBL Finance Limited 0 0.00 0 1088530
(share stand trf to Sri. Raj Kumar Gupta in compliance to Hon'ble CLB
order dated 04.07.2007 and 03.08.2007)
Banaras Beads Leas.& Fin. (P) Ltd 12010 100.00 1201000

III. MUTUAL FUND

Franklin Templeton (Daily Dividend) 330506
( Opening Value Rs. 1263220 Invest. Rs.9000000 Less Realised
Rs. 10000000 dividend Recd Rs. 67287)
Franklin Templeton Fixed Horizon Fund- 3 years plan
( Opening Value Rs.Nil Invest. Rs. 5000000 Dividend Recd Rs. 58350)
Franklin Templeton Capital Safity Fund - 5 years plan 1000000
( Opening Value Rs982780 Invest. NIL Add appreciate
in market value Rs. 17220)
Prudential ICICI Liquid Plan (Daily Dividend) 199862
( Opening Value Rs. 3603405 Invest. Rs. 53500000 Less Realised
Rs. 57100000 Dividend Recd Rs. 196457)

TOTAL     5767345
Aggregate Cost of Quoted Investment
(Rs.1910973 ) (Market value
Rs.1356911)

SCHEDULE:5 CURRENT YEAR PREVIOUS YEAR

CURRENT ASSETS, LOANS & ADVANCES

INVENTORIES
(As Taken , Valued as per policy stated in point 5 of Accounting
policies and Certified by the Management,)

Raw Material 1846226 16003351

Finished & Semi Finished
44860613 36787215
Export Merchandise in Transit 720626 2881727
Packing Material 1652302 7895030
Stores & Spares 2151048 1941208
Total 67846815 65508531

SUNDRY DEBTORS
(Unsecured Considered Good by the Management)

Debts Outstanding Above Six Months 955136 688272

Other Debtors 9299201 9160164
Total 10254337 9848436
CASH & BANK BALANCES
Cash in Hand (As certified by the management) 254642 510779
Postage Imprest 11862 14372
WITH SCHEDULED BANKS
In Current Accounts 1837928 4479607
In Fixed Deposit Account 36935921 40373639
Total 39040353 45378397
LOANS AND ADVANCES
(Unsecured ,recoverable in
Cash or in Kind or value to be received)
Considered Good :
Loans & Advances 12989548
Advance Payment for Taxes 8516295
Export Incentive Receivables 2111867
20 DETAILS OF SALES MATERIAL CONSUMED, CAPACITIES & PRODUCTION EXPENDITURE &
EARNING IN FOREIGN EXCHANGE
 UNIT CURRENT YEAR PREVIOUS YEAR
Rs. In
QTY. Rs. In lacs QTY.
  lacs
A) Sales

HANDICRAFTS ITEMS
a) Glass Beads, Neckless & Glass Items Kg. 333005.22 577352.835
Dz. 0 0
Pkt. 0 201
Pcs 849664 1227.45 285166 2106.26

b) Carpets/Drugget & Allied Products Pc. 1268 47.14 652 30.54

c) Other Handicraft items Dz. 13273 15200.36

Mtr. 266162.75 857976
Kg. 140635.519 102463.395
Pcs 4837690 5495980
Pkt. 20 0
SP 1290 0
Kori 0 0
ST 28596 57
Gram 4984 608
Yard 900 334.66 0 361.23

TOTAL 1609.25 2498.03

B) RAW MATERIALS
CONSUMED

Glass Kg 85580.72 52.14 119924.195 99.46

Wollen Yarn Kg 0 0 0 0
Chemicals Kg 0 0 0 0
Misc Raw Materials Kg 71.55 28.16
TOTAL 123.69 127.62

OPENING & CLOSING STOCK

c)FINISHED & SEMI FINISHED
MATERIAL CONSUMED

CLOSING STOCK
HANDICRAFTS ITEMS
a) Glass Beads, Neckless & Glass Items Kg. 149638.362 237.67 61914.438 209.33
Dz. 0 0
Pcs 146313 9.96 208662 16.55
b) Carpets/Drugget & Allied Products Pc. 3211 79.03 4007 109.6

c) Other Handicraft items Dz. 0 0 24542.74 4.04

Mtr. 70762 1.58 366483.4 7.76
Kg. 56362.484 135.9 31880.073 81.21
Pcs 3768802 41.68 6065753 94.2
SP 170 0.66 0
ST 8867 1.13 4580 2.02
Gram 9656.871 1.72 80651.071 31.1
Kori 0 0 0 0
Others 0 0 12200 2.95
Raw Materials 0 203.1
Packing Materials 78.95 21.74
Export Merchandise in Transit 28.82 65.53
Store & Consumable 37.91 10.26
TOTAL 655.01 859.39
OPENING STOCK

HANDICRAFTS ITEMS
a) Glass Beads, Neckless & Glass Items Kg. 61914.438 209.33 144718.506
Dz. 0 0
Pcs 208662 16.55 273695 338.94

b) Carpets/Drugget & Allied Products Pc. 4007 109.6 3883 104.56

c) Other Handicraft items Dz. 24542.74 4.04 34722.59

Mtr. 366483.4 7.76 79446.85
Kg. 31880.073 81.21 4886.38
Pcs 6065753 94.2 6917055
SP 0 785
ST 4580 2.02 898
Gram 80651.071 31.1 9099.23
Kori 0 0 219 105.85
Others 12200 2.95

203.1 187.36
Packing Materials 21.74 8.98
Export Merchandise in Transit 65.53 42.43
Store & Consumable 10.26 21.27
TOTAL 859.39 809.39

c) CAPACITY

Since all items in which the Company is dealing are filing under the clasiffication of Cottege Industries, the terms
licenced and installed capacity are not applicable

d) PRODUCTION

CURRENT
UNIT YEAR PREVIOUS YEAR
VALU
  QTY. E QTY. VALUE

Glass Beads & Necklace Kg. 138137.781 152538.058

Dz. 63646.00 86644.67
Carpet & Druggets Pc. 0 0

e) COMPOSITION OF RAW MATERIAL

CONSUMED

CURRENT
YEAR PREVIOUS YEAR
VALU
% E % VALUE
 Rs. In Rs. In
  Lacs   Lacs

Indigenous 87.88% 108.7 93.26% 119.02

Imported 12.12% 14.99 6.74% 8.60
100.00 123.69 100.00 127.62

f) CIF VALUE OF IMPORTS

i) Raw Materials 44.60 65.70

ii) Stores & Spare Part & Other

g) EXPENDITURE IN FOREIGN
CURRENCY

Export Promotional Tour & Other 22.94 9.51

h) EARNING IN FOREIGN EXCHANGE

Export of Goods (FOB basis) 1308.72 2320.49

Export Frieght & Insurance 52.94 86.03

As per our report of even date

For Kamal Kishore & Co. For and on behalf of the Board of Directors
Chartered Accountants
(Ashok Kumar Gupta) (Ashok Kumar Kapoor)
(K.K. Srivastava) Chairman & Managing Director Director
Partner

Place : Varanasi. (Jai Singh) (R.K. Singh)

Date : 30. 07. 2009 Manager (Accounts) Company Secretary

Abstract of the Balance Sheet as at 31.03.2008 and Company's General Business Profile as per Part IV of Schedule VI (Amended) to the
Companies Act, 1956.

Registration No.
I. Registration details 4984
State Code : 20
Rs. In (1000)
Balance Sheet Date
31.03.2008 31.03.2007

II. Capital raised during the year

Public Issue NIL NIL
Bonus Issue NIL NIL
Rights Issue NIL NIL
Private Placement NIL NIL

III
. Position of Mobilisation and Development of Funds
Total Liabilities 288689 288689
Total Assets 288689 288689

Source of Funds

Paid up Capital 66130 66130

Reserves & Surplus 222559 224248
 Secured Loans 0 0
Unscured Loans NIL NIL
Share Application Money (Pending Allotment) NIL NIL

Application of Funds

Net Fixed Assets 123776 83690

Investments 14360 5767
Net Current Assets 112568 128969
Misc. Expenditure 28780 31585
Accumulated Losses 9203 38678

IV
. Performance of Company
Turnover (Including other Income) 255684 182254
Total Expenditure 223239 243862
Profit (Loss) Before Tax 32444 -61608
Profit (Loss) After Tax 32239 -61828
Earning per share (Rupees) 4.86 Loss
Dividend Rate % NIL NIL

V. Generic Names of Principal Products / Services of

Company (as per monetory terms)

Item Code No. Product Description

(ITC Code)
701810.00 GLASS BEADS
570110.00 WOLLEN CARPETS
999190.00 HANDICRAFTS
711311.00/711319.00 GOLD AND SILVER ORNAMENTS