A STUDY ON

FUNDS FLOW STATEMENT

WITH REFERENCE TO
NAGARJUNA FERTILIZERS AND CHEMICALS LTD
KAKINADA
A project report submitted to
ADIKAVI NANNAYA UNIVERISTY, KAKINADA
in partial fulfillment for the requirement of the award of the degree
of
MASTETR OF BUSINESS ADMINISTRATION
Submitted by
(Affiliated to Adikavi Nannayya University)
KAKINADA
2017- 2019

ACKNOWLEDGMENT

I take this opportunity to express my gratitude to

Sri. P. HARE RAM (G.M), HPD, (TRAINNING), Smt. S. SUDHA

RANI Sr. DGM (FINANCE), for giving me the privilege to undergo

project work on “A STUDY ON FUNDS FLOW STATEMENT” in

NFCL.”

I would like to express my sincere thanks to SRI B. Srinivas,

Asst. Manager (TRAINING) AND SRI. G.V.L.N BAPI RAJU

(FINANCE), of NFCL, who guided me throughout tenure of this

project, work in innumerable ways. In the presentation of this

report I recall with a sincere gratitude to each of those who have

been a source of immense help and inspiration during the process

of my project work.

I wish to take this opportunity to express myself my deepest

sense of gratitude to my project guide, Mr. P.MANI KUMAR, P.V.R.

TRUST PG COLLEGE, KAKINADA for his guidance to me on

successfully bringing this project.

DECLARATION
I hereby declare that this project entitled “FUNDS FLOW

STATEMENT “with reference to “NAGARJUNA FERTILIZERS AND

CHEMICALS LTD KAKINADA” is the original work done by me and

submitted to ADIKAVI NANNAYYA UNIVERSITY, KAKINADA in

partial fulfillment of the requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION of P.V.R TRUST PG

COLLEGE, KAKINADA. The empirical findings in the report are

based on the data collected by me while preparing this project. It

has not been submitted to any other university or publication

anytime.

Place:

Date: (B. DEEVENA)

Regd. NO: 1781609006

CONTENTS

CHAPTER-I

 INTRODUCTION
  SCOPE OF THE STUDY

 SIGNIFICANCE OF THE STUDY

 OBJECTIVES

 METHODOLOGY

 LIMITATIONS

CHAPTER-II

 INDUSTRY PROFILE

CHAPTER-III

 COMPANY PROFILE

CHAPTER-IV

 THEORETICAL FRAMEWORK

CHAPTER-V

 ANALSIS & INTERPRETATIONS

CHAPTER-VI

 FINDINGS

 SUGGESTIONS

 CONCLUSIO
  BIBLOGRAPHY

Chapter-1
INTRODUCTION

Finance is regarded as “THE LIFE BLOOD OF BUSINESS

ENTERPRISE”. Finance function has become so important that it

has given birth to financial management as a separate subject. So,

this subject is acquiring universal applicability. Financial

Management is that managerial activity which is concerned with the

planning and controlling of the firm’s financial resources. As a

separate activity or discipline is of recent origin it was a branch of

economics till 1890. Still today it has no unique knowledge of its

own, and it draws heavily on economy for its theoretical concepts.

The subject of financial management is of immense interest to

both academicians and practicing managers. It is of great interest

to academicians because the subject is still developing, and there

are still certain areas where controversies exist for which no

unanimous solutions have been reached as yet. Practicing

Managers are interested in this subject because among the most

crucial decisions of the firm are those which relate to finance and

an understanding of the theory of financial management provides

them with conceptual and analytical insights.

Scope of Finance Management:

Firms create manufacturing capacities for production for

goods; some provide services to customers. They sell their goods or

services to earn profits. They raise funds to acquire manufacturing

and other facilities. Thus, the three most important activities of a

business firm are:

 Production

 Marketing

 Finance

A firm secures whatever capital it needs and employees it

(finance activity) in activities that generate returns on invested

capital (production and marketing activities). A business firm thus

is an entity that engages in activities to perform the functions of

finance, production and marketing. The raising of capital funds

and using them for generating returns to the supplies of funds is

called the finance function of the firm.

FUNCTION OF FINANCIAL MANAGEMENT:

Two significant contribution to the development of modern

theory of financial management are:

 Theory of Portfolio Management developed by Harry Markowitz

in 1950, which deals with portfolio selection with risky

investment. This theory uses statistical concepts to quantify

the risk-return characteristics of holding a group/portfolio of

securities, investment or assets.

 The theory of Leverage and Valuation of Fire developed by

Modigliani and Miller in 1958. They have shown by

introducing analytical approach as to how the financial

decision making in any firm be oriented towards maximization

of the value of the firm and the maximization of the

shareholders wealth.

Type of Financial Actions:

 The Financial Management of trading or manufacturing firms

 Financial Management of Financial Institutions.
 Financial activities relating to investment activities.
International Finance:
Public Finance:
Functions are broadly classified into three groups. Those
relating to resource allocation, those covering the financing of these
investments and these determining how much cash are taken out
and how much reinvested.

 Investment decision
 Financing decision
 Dividend decision
 Liquidity decision

I) Investment Decision:
Firms have scarce resources that must be allocated among
competitive uses. The financial management provides a frame work
for firms to take these decisions wisely. The investment decisions
include not only those that create revenues and profits (e.g.
introducing a new product line) but also those that save money.
So, the investment decisions are the decisions relating to
assets composition of the firm. Assets can be classified into fixed
assets and current assets, and therefore the investment decisions
can also be bifurcated into Capital Budgeting decisions and the
Working Capital Management.

The Capital Budgeting decisions are more crucial for any firm.
A finance manager may be asked to decide about.
Which asset should be purchased out of different alternative
options;
1. To buy an asset or to get it on lease;
2. To produce a part of the final product or to procure it from
some other supplier;
3. To buy or not another firm as a running concern;
4. Proposal of merger of other group firms to avail the synergies
of consolidation.
Working Capital Management, on the other hand, deals with

the Management of current assets of the firm. Though the current

assets do not contribute directly to the earnings, yet their existence

is necessitated for the proper, efficient and optimum utilization of

fixed assets. There are dangers of both the excessive working capital
as well as the shortage of working capital. A finance manager has

to ensure sufficient and adequate working capital to the firm.

II Financing Decisions:

As firms make decisions concerning where to invest these

resources, they have also to decide two they should raise resources.

There are two main sources of finance for any firm, the

shareholders funds and the borrowed funds. The borrowed funds

are always repayable and require payment of a committed cost in

the form of interest on a periodic basis. The borrowed funds are

relatively cheaper but always entail risk

The risk is known as the financial risk i.e., the risk of

insolvency due to non-payment of interest or non-repayment of

capital amount. The shareholders fund is the main source of funds

to any firm.

This may comprise of the equity share capital, preference

share capital and the accumulated profits. Firms usually adopt a

policy of employing both the borrowed funds as well as the

shareholders funds to finance their activities. The employment of

these sources in combination is also known as financial

management.
III) Dividend Decisions:

Another major area of the decision marking by a finance

manager is known as the Dividend decisions which deal with the

appropriation of after tax profits. These profits are available to be

distributed among the shareholders or can be retained by the firm

for reinvestment within the firm. The profits which are not

distributed are impliedly retained in the firm. Al firms whether

small or big, have to decide how much of the profits should be

reinvested back in the business and how much should be taken out

in form of dividends i.e., return on capital. On one hand, paying

out more to the owners may help satisfying their expectations; on

the other hand, doing so has other implications as a business that

reinvests less will tend to grow slower.

 Reinvestment opportunities available to the firm,

 The opportunity rate of the shareholders.

The Identification of the relevant groups:

The various groups which may have stakes in the financial

decisions making of a firm and therefore required to be3 considered

while taking financial decisions are:

  The shareholders

 The debt investors,

 The employees,

 The customer and the suppliers,

 The public,

 The Government, and

 The Management

Objective of the Financial Decision Making

The following two are often considered as the objectives of the

financial management.

 The maximization of the profits of the firm, and

 The maximization of the shareholders wealth

Maximization of the Profits of the firm:

For any business firm, the maximization of the profits is often

considered as the implied objective and therefore it is natural to

retain the maximization of profit as the goal of the financial also.

The profit maximization as the objective of financial

management has a built in favour for its choice. The profit is

regarded as yard stick for the economic efficiency of any form. If all

business firm of the society are working towards profit

maximization then the economic resources of the society as a whole

would have been most efficiently, economically and profitably used.

The profit maximization by one firm and if targeted by all, will

ensure the maximization of the welfare of the society. So, the profit

maximization as objective of financial management will result

inefficient allocation of resources not only from the point of view of

the firm but also for the society as such.

 It ignores the risk.

 The profit maximization concentrates on the profitability only

and ignores the financing aspect of that decision and the risk

associated with that financing.

 It ignores the timings of costs and returns and thereby ignores

the time value of money

 The profit maximization as an objective is vague and

ambiguous.

 The profit maximization may widen the gap between the

perception of the management and that of the shareholders.

  The profit maximization borrows the concept of profit from the

field of accounting and thus tends to concentrate on the

immediate effect of a financial decisions as reflected in the

increase in the profit of that year or in near future.

Maximization of Shareholder Wealth:

This objective is generally expressed in term of maximization

of the value of a share of a firm. It is necessary to know and

determine as to how the maximization of shareholders wealth is to

be measured.

The measure of wealth which is used in financial management

is the concept of economic value. The economic value is defined as

the present value of the future cash flows generated by a decision,

discounted as appropriate rate of discount which reflects the degree

of associated risk. This measure of economic value is based on

cash flows rather than profit. The economic value concept is

objective in its approach and also takes into account the timing of

cash flows and the level of risk through the discounting process.

Profit Maximization Versus Wealth Maximization:

The objective of profit maximization measures the performance

of a firm by a looking at its total profit. The objective of

maximization of the shareholders wealth is operational and

objective in its approach.

A firm that wishes to maximize the profits may opt to pay no

dividend and to reinvest the retained earnings, whereas a firm that

wishes to maximize the shareholders wealth may pay regular

dividends

THE CHANGING ROLE OF FINANCIAL MANAGEMENT:

Many changes in the contemporary world, financial

management has undergone significant changes over the years.

The financial management has a very limited role in business

enterprise. Finance Manger is responsible only for maintaining

financial records, preparing reports of the company’s status,

performance and arranging funds recorded by company so that it

would meet its obligations in time.

Financial Manager as a matter of act was regarded as

specializes officers in the company concerned only with

administering sources of funds, he has called upon only when the

company experimental the problem relates the financial managers

to locate the suitable sources for funds and additional funds. The

emphasis on decision making has continued in recent years.

First there was been increased belief the cost of capital

producer the required accurate measurement of the cost of capital.

Secondly, capital has been in short supplies the old interest in

the ways of raising funds.

Thirdly, there was has been a continued managerial activity

that has led to revealed interests in takeovers.

Fourthly, accelerated progress in transportation and

communication has brought the countries of the world close

together

They in turn have stimulated interest in the international

finance.

IMPORTANCE OF FINANCIAL MANGEMENT:

Finance Management is of greater importance on the present

corporate world. It is a science of money, which permits the

authorizes to go further.
SIGNIFICANCE OF FINANCIAL MANAGEMENT CAN BE
SUMMARISED AS:

It assists in the assessment of financial needs of industry large

or small and indicates the internal and external resources for

meeting them. It assesses the efficiency and effectiveness of the

financial institution in mobilizing individual or corporate science. It

also prescribes various means for such mobilization of savings into

desirable investment channels.

It assists the management while investing the funds in

profitable projects by analyzing the viability of that project through

capital budgeting techniques. It permits the management to

safeguard against the interest of shareholders by properly utilizing

the funds procured from different sources and it also regulates and

controls the funds to get maximize use.

SCOPE OF THE STUDY

The present study is intended cover a period of

5years from 2006 to 2009-10 for examining the cash
management receivable management manages the short-term
investment and also investor’s management for the purpose of
working capital management in NFCL plant at Kakinada.

Working capital management policies have a great

effect on firms profitability, liquidity and it’s structural health.
A financial manager therefore checks out appropriate working
capital, so as to ensure higher profitability proper liquidity and
sound structural health of the organization. In order to
achieve this objective the financial manager as to perform
basically following two functions.

Estimating the amount of working capital.

Source from which these funds have to arises.

This project Is based on the study of working capital

management & includes estimation of the amount of working
capital requirements and also analyzing the sources from
which these have to be raised.
SIGNIFICANCE OF STUDY

 This study is important for understanding the management of

working capital in NFCL it gives information on the basis of
analysis about percentage of investment in each current asset
cause for changes in working capital from different sources
amount of working capital required.

 The firm’s trade creditors are interest in the firm ability to

meet their claim over a short period of time. So they required
the evaluation of the firm’s liquidity position.

 The suppliers of the long-term debt on the other hand of

concerned with the long-term resolutions and survival. They
analyses the firm profitability over time.

OBJECTIVES

 This study attempts to examine the growth and performance of

the industry.

 To study the efficiency with which the firm is utilizing its

various assets in generating sales.

 To study the extent to which the firm has used its long-term
solvency by borrowing funds.
  This study is made to know whether the current assets and
current liabilities are properly managed.

 To review the structure, original growth and performance of

NFCL during the study period.

 To give a brief description of the finance department and

conceptual frame work of the working capital management in
NFCL.

 To determine the requirement of working capital to the firm.

METHODOLOGY OF THE STUDY

This study is made through two sources.

METHODS

PRIMARY DATA SECONDARY DATA

  Primary Data:

The primary data comprises information collected during

discussions with Heads of Departments and from the meeting

with officials and staff.

 Secondary Data:

The secondary data has been collected from information

through Annual Reports, Public Report, Bulletins and other Printed

Materials supplied by the Company.

In the present study 1/4th of the total information is from

primary data and the rest is from the secondary data.

LIMITATIONS

 The study has to be made ideal conditional but every study

has some limitations those are.

 This study is limited of the company NFCL only.

 This analysis should not be applied to all the firms in the

same industry.
 The time factor of 6 weeks is also a limiting factor for an
induct study.

 The analysis is prepared on the basis of company reports

where some information is kept confidential by the company
and hence total analysis was not possible.

 The ratios are calculated on the basis of past data of five years
and they cannot be takes as future indicators.
Chapter-2
INDUSTRY PROFILE

India has been predominantly considered as an agricultural

dependent economy. Agriculture plays a very dominant role as
more than one-fourth of our GDP come from this sector. Nearly
70% of population depends on the agriculture for their lively-hood.
The basic need for an agricultural dependant economy is fertilizers
and urea is one of the main fertilizers. India is the second largest
manufacturing country in the world.

All fertilizers consist if three main ingredients.

Nitrogen—(N) -- which promotes general plant growth

Phosphorous—(P) -- which promotes flowering

Potassium – (K) – which promotes strong roots.

The ingredients are mixed in various combinations because

plants have different needs.

The combinations are indicated by a three number code:

1. The first number is the percent of nitrogen (N)

2. The second number is the percent of phosphorus (P)
 3. The third number is the percent of potassium (K)
About Fertilizer:

Fertilizer is simply, plant food. Just like the human body

needs vitamins and minerals, plants need nutrients in order to
grow. Plants need large amounts of three nutrients – nitrogen,
phosphorus, and potassium. These are commonly referred to as
macronutrients. Fertilizer makers take those three nutrients from
nature and put them into soluble forms that plants can easily use.

There are a number of other nutrients plants need in

small amounts. These are referred to as the minor nutrients, or
micronutrients. These many nutrients are typically produced
separately, but end up being mixed together in varying amounts to
match the needs of a particular crop. The analysis found on each
bag or bulk shipment of fertilizer tells the farmer or consumer the
amount of nutrients being supplied. States have a system of laws
and regulations that ensure the fertilizer is properly labeled and
delivers the amount for nutrients stated on the bag.

Our world would be vastly different without commercial

fertilizers. Following World War II, new technologies allowed for the
rapid expansion of fertilizer production. Coupled with growing food
demand and the development of higher-yielding crop varieties,
fertilizer helped fuel the Green Revolution. Today, the abundance of
food we enjoy is just one way fertilizers help enrich the world
around us.
 While fertilizers provide many important benefits that are
necessary for our way of life, the improper use of fertilizers can
harm our environment. We’ve used the most recent developments
in science to study our products and make sure safety comes first.

FERTILIZER:

Fuel for growing plants just like humans and animals, plants
need adequate water, sufficient food, and protection from diseases
and pests to be healthy. Commercially produced fertilizers give
growing plants the nutrients they crave in the form they can most
readily absorb and use: nitrogen (N), available phosphate (P) and
soluble potash (K), Elements needed in smaller amounts, or
micronutrients, include iron (Fe), zinc (Zn), copper (Cu) and boron
(B).

Each crop year, certain amounts of these nutrients are

depleted and must be returned to the soil to maintain fertility and
ensure continued, healthy future crops. Scientists project that the
earth’s soil contains less than 20 percent of the organic plant
nutrients needed to meet our current food production needs.
Therefore, through the scientific application of manufactured
fertilizers, farmers are meeting the challenge of the future, today.

Another component of plant DNA is phosphate, which helps

plants to use water efficiently. It also helps to promote root growth
and improves the quality of grain and accelerates its ripening. And
potassium, commonly called potash, is important because it is
necessary for photosynthesis, which is the production,
transportation and accumulation of sugars in the plant. Potash
makes plants hardy and helps them to withstand the stress of
drought and fight off disease.

Fertilizer Types:

Because every crop is different and the soils and weather

conditions crops are grown in vary dramatically around the world,
commercial fertilizers, which are manufactured from natural
sources, come in many formulations.

Combining air with hydrogen using natural gas as the

feedstock makes ammonia, the building block for nitrogen
fertilizers. Ammoniated phosphates, which include mono
ammonium phosphate (MAP) and ammonium phosphate (DAP), are
made by reacting ammonia with phosphoric acid. Muriate of
potash, also called potassium chloride, is made from mine ores that
have been processed to remove naturally occurring salts.

Ammonium nitrate is a solid fertilizer containing

approximately 34 percent nitrogen that is water soluble and used in
various fertilizer solutions. Aqua ammonia is another nitrogen-
based fertilizer made by combining ammonia with water. It
contains up to 25 percent nitrogen and is either applied directly to
the soil or is used to manufacture phosphate fertilizers.
 Nitrogen solutions are water solutions of ammonia,
ammonium nitrate and, sometimes, urea, a solid fertilizer
containing approximately 45 percent nitrogen, and other soluble
compounds of nitrogen. Nitrogen solutions are used in ammoniating
super phosphate, the manufacture of complete fertilizer and for
direct injection into the soil. They vary in composition and nitrogen
content and are sometimes applied under pressure.

NITROGEN (N):

Nitrogen is a part of all plant proteins and is a component of

DNA and RNA – the “blueprints” for genetic characteristics. It is
necessary for plant growth and chlorophyll production. Nitrogen is
the building b lock for many fertilizers. Where does N come from?
Nitrogen is present in vast quantities in the air, making up about
78 percent of the atmosphere. Nitrogen from the air is combined
with natural gas in a complex chemical process to make ammonia.

PHOSPHOURUS/PHOSPHATE (P):

Phosphorus as a nutrient is sometimes most valuable to

plants when put near the seed for early plant health and root
growth. Plant root uptake is dependent on an adequate supply of
soil P. Phosphorus is relatively insoluble in water. The water in
most soils must replace all of the P in the soil water 2 to 3 times
each day to meet the crop’s demand for P. Phosphorus compounds
help in directing where energy will be used. Phosphorus
compounds are needed in plant photosynthesis to “repackage” and
transfer energy. Phosphate is also a component of DNA, so it is one
of the building blocks of genes and Chromosomes. Phosphorus is
involved in seed germination and helps plants to use water
efficiently. Where does P come from? Phosphorus occurs in natural
geological deposits. Deposits can be found in the U.S. and other
parts of the world.

Potassium/Potash (K):

Potassium protects plants against stresses. Potassium

protects plants from cold winter temperatures and helps them to
resist invasion by pests such as weeds and insects. Potassium
stops wilting, helps roots stay in one place and assists in
transferring food. Potassium is a regulator. It activates plant
enzymes and ensures the plant uses water efficiently. Potassium is
also responsible for making sure the food you buy is fresh. Where
does K come from? The element potassium is seventh in order of
abundance in the Earth’s crust.

Through long-term natural processes K filters into the oceans

and seas. Over time, these bodies of water evaporate, leaving
behind mineral deposits. Although some of these deposits are
covered with several thousands of feet of earth, it is mined as
potash or potassium chloride. Potash ore may be used without
complex chemical conversion; just some processing is necessary to
remove impurities such as common salt.
FOOD FOR THE GROWING WORLD

Industry at a glance:

Since 1883 the industry has worked to promote the advances

in the development and application of fertilizers that have helped to
feed a hungry world. The revolutionary concept of plant nutrition
was born from the discovery of the biological role of chemical
elements in plant nutrition and the need to feed a growing
population concentrated away from the farm in the rising industrial
centers of the world.

Because of modern fertilizers, world food production since

1960 has more than doubled, keeping pace with the population
explosion. Today, the fertilizer industry is poised to help produce
the food that will be needed to feed the world’s projected 9 billion
people in 2025.

The fertilizer industry is essentially concerned with the

provision of three major plant nutrients – nitrogen (N), phosphorous
(P) and potassium (K) – in plant available form. Each nutrient is
responsible for different aspects of plant growth and health.

Fertilizers:

Regulated for quality and safety like other manufactured

goods, fertilizers are regulated for quality and safety at the federal
and state levels. Every state in the country, plus Puerto Rico, has
its own fertilizer regulatory program, usually administered by the
state department of agriculture.

State Regulation:

State regulation is concerned with consumer protection,

labeling, the protection of human health and the environment, and
the proper handling and application of fertilizers. Fertilizers are
regulated at the state level because soil conditions vary dramatically
from state to state across the country. For example, the rocky, thin
soils of New England are vastly different from the deep, rich black
soils of the Midwest Corn Belt. A different level of fertilizer
nutrients in the soil, different crops (potatoes versus corn, for
instance) and different weather and cropping patterns require state-
specific regulation.

Where Science and safety come first the modern commercial

fertilizer industry was founded on the revolutionary scientific
discovery in the last part of the 18th century that chemical elements
play a direct role in plant nutrition. This initial concept was
supported by direct scientific experiment and opened the way for
industrial-scale manufacturing of fertilizers of all types in the 19 th
century, beginning with super phosphate in 1843. This was
followed by ammonium sulphate, sodium nitrate and, finally, in the
first two decades of the 20th century, the manufacturing of synthetic
nitrogen fertilizers directly from atmospheric nitrogen.
Assessing Fertilizer Safety:

Fertilizer research and development historically have been

focused on maximizing economic crop yields from given rates of
nutrient application. Since the advent of the modern environmental
movement in the 1960s, research has also been concerned with
minimizing potentially adverse human health and environmental
effects from fertilizer manufacture and application.

As part of its continuing commitment to safety, in 1996.the

Fertilizer Institute initiated a comprehensive safety assessment
project to determine the risks, if any, of metals in fertilizer. Small
amounts of metals are found in phosphate and potash fertilizers
due to their presence in the mined ore bodies. In addition to
phosphate and potash products, some micronutrient fertilizers.
Which come from both mined ores and recycled wastes, also
contain metals.

Fertilizers Enrich our World:

Improvements in agricultural efficiency through research and

technology increase food output while protecting the environment
and enriching our world in numerous ways.

Fertilizers feed the growing world. As the world’s population

continues to climb toward an estimated 8.5 billion in 2040, experts
estimate that food production must increase more than two percent
annually to even maintain current diets. Commercial fertilizers will
be key in the fight to feed the growing world.
 Fertilizers protect the environment. The efficient use of
fertilizer also helps to conserve the natural environment. With
fertilizers and modern high yield farming practices, more food is
produced per acre each year, so land may be conserved. Fertilizers,
used properly, help to prevent the widespread loss of habitat that
results from wasteful “slash and burn” low-yield farming, which is a major
global environmental threat.
Chapter-3

COMPANY PROFILE
THE NAGARJUNA GROUP

Our founder Sri K.V.K. Raju (28.11.1928 – 16.06.1993) laid

the foundation of the Nagarjuna Group in 1974 with an investment
of Rs. 50 millions. He was a visionary and a professional
technocrat entrepreneur who realized the importance of Core
Sectors to an economy like ours. He has guided the group with his
philosophy

SERVING SOCIETY THROUGH INDUSTRY:

Nagarjuna Fertilizers and Chemicals Limited (NFCL) is the first

gas based fertilizer factory in South India. The plant is based on
the latest fertilizer technology from M/s. Snamprogetti, Italy for
Urea process with an installed capacity of 1500 Mt/day for each
unit. The ammonia process is based on technology from M/s.
Haldor Topsoe, Denmark with an installed capacity of 900 MT/day
per each unit.

The feed stock for unit – I is natural gas and feed stock for
Unit – II is NG/Naphtha. The current consumption of natural gas is
2.15 million standard cubic meters per day and 500 MT of Naphtha
per day. The natural gas is being received through pipe lines from
Tatipaka situated 92Kms away from the factory and is marketed by
M/s Gas Authority of India Limited. Naphtha is being supplied by
M/s HPCL. The water requirement of 6.0 Million Gallons/day is
received from Samalkot Summer Reservoir through two pipelines.

Finance:

The total cost of the existing complex is Rs. 2156crores (Rs.

1186crores for Unit-I and Rs. 970crores for Unit – II). This consists
of loan of Rs. 1,162crores (Rs. 515crores for Unit-I and Rs.
647crores for Unit – II) sanctioned by IDBI, IFCI, ICICI, UTI, LIC,
GIC and also Banks. The foreign exchange component of Rs.
781.07 cores was met by the Indian Financial Institutions like IDBI,
IFCI & ICICI and also by Italian Buyers credit.

LIVING IN HARMONY WITH NATURE – NFCL’S CONTRIBUTION

TO ECOLOGY:

Environmental protection is an avowed corporate philosophy

and the plant is built on the principle of zero-effluent discharge and
is totally eco-friendly. NFCL’s aim is to maintain ecological
harmony, which is NATURE’S INVALUABLE AND BEAUTIFUL
GIFT TO MANKIND.

Man can live in harmony with the environment only when

mankind is guided by respect for the Mother Earth and all living
things. Nagarjuna Fertilizers and Chemicals Limited believe that
Industry should exist in harmony with nature. In pursuance of the
corporate vision, and as a humble contribution to the Mother
Nature, the complete ecological system in and around the factory
has been changed by establishing a K.V.K.RAJU
SUNDARAVANAMU in an area of 747 acres surrounding the
Complex.

The entire area has been covered with 4, 50,000 plants

consisting of 170 species, transforming a once highly saline marshy
area devoid of any vegetation into a lush green arboreal park. The
establishment of 1 KM wide KVK Sundaravanam is an integral part
of overall natural ecological system consisting of eleven water
bodies for fish, habitat for animal life and sanctuary for both
indigenous as well as migratory birds with the factory nestled in the
most natural and idyllic surroundings created with dedication.

An integrated Environmental Management Plan (EMP) has

been incorporated in the basic design itself to ensure strict
adherence to International Standards. The investment on pollution
control equipment in the Plant is close to Rs. 110crores of capital
investment and recurring expenditure of Rs. 6crores being spent
annually for operating and maintaining the equipment.

MAIN FEATURES OF ECO-SYSTEM:

A forestation:

740 acres of area has been planted with 4.5lakh saplings of

170 species. Weak areas have been planted with selected species
based on criteria like tolerance to salinity; availability from local
sources and their ability survive with least maintenance. A full-
fledged nursery with mist chamber and sprinkler irrigation system
has been developed for supply of plants to a forestation
programmed.

Animal Enclosures:

A deer park with spotted deer has been set up in an area of six
hectares with chain-link fence on all sides. Separate enclosures for
birds, rabbits and certain other animals are made available. Some
of these animals like jungle cat, fox, jackals, mongooses, squirrels,
bats, snakes, and turtles are also beilet out freely in this eco-system
as a part of our animal conservation programme.

Use of Treated Effluent:

The total treated effluent generated from the factory is being

utilized through a network of over 17 KM of PVC pipeline for
sustenance of the eco-system to show the purity levels of the
effluents and the technological efficiency of the plant equipment.

Awareness Programme:

As a part of NFCL’s sincere endeavor to bring awareness about

the benefits of cleaner environment on the general standards of life,
company has started “GREENING THE ROADS” of Kakinada in
Phases. As a part of this programme, flowering trees were planted
on either side of the 4 km length of roads from Bhanugudi Junction
to Nagamallithota and from Nagamallithota to NFCL. This
Programis being extended to further areas in phases.

VALUES STATEMENT OF NFCL COMMITMENT:

We the Associates of NFCL are committed to

continuously evoking customer delight through constant
review and monitoring and delivering proactive value added
solutions. We are also committed to strive for satisfaction of
all stakeholders in a balanced manner through sustainable
growth and profitability

Excellence:

We shall continuously strive for Excellence in all dimensions of

the Company through teamwork, creativity and other means.
Ethics:

We shall strive for wholesome business relationships by

adhering to the principles of trusteeship, fair play and transparency
in all our dealings that we shall practice a work cultural, which is
performance driven and conducive to in proving discipline,
accountability and depth of character, team spirit and honesty in
all our personal and professional relationships.

We shall build a learning organization where creativity,

innovation, entrepreneurship and knowledge sharing are
encouraged and fostered actively.

Concern:

We consciously recognize that the development of associates is

inextricably linked to the sustainable growth and profitability of the
organization. Therefore, mutual care and concern between the
associates and the organization shall be our abiding value.

NFCL’S VISION STATEMENT SERVING SOCIETY THROUGH

INDUSTRY:

“For close to two decades, we at NFCL have predominantly

been in the business of manufacturing and marketing Urea, a

segment of the plant Nutrition business space. Given our

cumulated experience and strengths in understanding the farmer,

the agriculture, various initiatives taken in the past, the exposure of

Indian agriculture to global economy and therefore the need for

Indian farmers to be globally competitive, have realized the need to

provide innovative and comprehensive Plant Nutrition

Solutions.“The leadership we refer to in our Vision Statement is in

terms of providing innovative and creative solutions.”

NFCL’S MISSION STATEMENT:

We shall:

- Pioneer transformation in the approach to plant nutrition

- Deliver holistic plant nutrition solutions to the farmers
- Be the most preferred organization to be associated with

Pioneer transformation in the approach to plant nutrition we

shall develop crop, site and stage specific wholesome plant nutrition
solutions. NFCL shall focus on all necessary initiatives towards this
– be it manufacturing technology, regulatory, logistics and using a
mix of several sciences and skills. The most preferred organization
to be associated with in the process of providing these solutions,
NFCL shall delight all the stakeholders – employees, investors,
suppliers, customers and society at large. The stakeholders would
prefer to be associated with us not only for the higher value we
offer, but also shall cherish their relationship with us due to the
way we deal with them – with full commitment, responsibility and
accountability.
EMPLOYEE FOCUS:

NFCL’s aim to have the most satisfied employee base by the

turn of the century through its commitment to Personal and
professional development of the individual.

 Rewarding teamwork, innovation and quality behavior

 Through job satisfaction
 Creating and sustaining a close-knit family culture wherein
every individual experience a sense of belonging.

Marketing:

NFCL is operating in Andhra Pradesh, Orissa, West Bengal,

Maharashtra, Karnataka, Pondicherry (Yanam territory). A
professional team, with a wide range of products, that include Urea,
traded fertilizers (DAP, MOP, Complex fertilizers), Micro-nutrients,
Pesticides, Organic fertilizers and Bio-Pesticides, has taken NFCL
very close to the farmers and made NAGARJUNA a household name
among the farming community

Keeping pace with the changes in agricultural practices NFCL

has developed organic-fertilizers and bio-pesticides with support
from NARDI. A new concept in fertilizers i.e., Customized Fertilizer
Granules (CFGs) has been developed and the product is in trials.

NFCL’s Development activities focus on imparting training to

farmers and dealers on the latest package of practices in various
crop sand technology transfers. Training programs are carried out
both on campus at KVK, Kakinada and off-campus at villages and
towns. A Well-equipped and trained development tem organizes the
programs using audio-visual vans, jeeps, slide projectors and
literature on products and crops, etc. State Governments,
Agriculture Universities and the farming community as a whole
have acknowledged the effectiveness of development programs being
carried out by NFCL.

PERFORMANCE HIGHLIGHTS

SALES NET
TURNOVER PROFIT
YEAR PRODUCTION SALES
INCLUDING AFTER
SUBSIDY TAX

Ammonia Urea MFG Urea (Rs. (Rs.

(MT) (MT) (MT) Crores) Crores)

2009-10 756815 1324054 1310856.05 1815.24 31.712584

2010-11 772585 1354490 1338302 2213.43 22.49

2011-12 782861 1378162 1397101.35 2383.89 32.41

2012-13 846533 1482103 1505484.65 2009.68 66.37

2013-14 942487 1655042 1665961 300.68 117.35

2014-15 891126 1562703 1558782 4986.75 135.95

2015-16 892441 1565802 1663211 5477.62 83.84

2016-17 814416 1428062 1411100 3444.51 -235.56

CUSTOMER FOCUS:

In recognition that business is based on quality and integrity,

NFCL’s aim to have the most satisfied customer base by enhancing
farmer productivity through forward integration on the one hand,
and through catering to industrial needs on the other. Unto this
end, NFCL shall:

 Produce high quality products that give value for money

 Offer, both products and services

 Innovate to satisfy the real needs of customers

 Engage in fair, open and ethical practices.

SHAREHOLDER FOCUS:

NFCL aim to keep its shareholders satisfied by:

 Delivering the best long-term return on investment amongst all

companies in the Indian agri-business industry.

 Continuous growth and excellence in business performance.

AWARDS AND HONOURS:

 British Safety Council’s National Safety Award for the five

consecutive years, 1994, 1995, 1996, 1997 & 1998 and also for

the year 2000

 Merit Award for 1997 and 1998 by Royal Society for the

Prevention of Accident (RSPA)

 “Best Workers” Welfare (including Family Planning) effort by an

Industrial or Commercial Unit in the State” for the year 1997-98

by Andhra Pradesh Chambers of Commerce & Industry

(FAPCCI)

 Achieved 84% in OH & S – Audit conducted by British Safety

Council, U.K. in January 2000.

 Best School Industry Linkage Award 2000 by NCERT – an

Autonomous Organization of Government of India – December

2000.

 Best Environmental Management Plan – 2000-01 in Vizag Zone

by Andhra Pradesh Pollution Control Board, Visakhapatnam.

 National Safety award for 2000-01 from British Safety Council,

U.K.

 Best Environmental Improvement Effort by Industries located in

the State in 2000-2001 from Federation of A.P. Chamber of

Commerce and Industry, Andhra Pradesh.

 Bronze Award for Occupational Safety for the year 2001 by Royal

Society for the Prevention of Accident (ROSPA), UK

 Commendation Trophy jointly given by National Safety Council,

A.P. Chapter & Director of Factories, A.P. for Implementing

OHSAS 18001 in March 2001.

 ‘Environmental Protection Award’ in Nitrogenous Fertilizer plants

category for the year 2001-02 from Fertilizer Association of

India, New Delhi.

 “Perfect Record” in Occupational Safety/Health Award Program

for operating two million employee hours without occupational

injury or illness for the period from 10.10.01 to 13.11.02 from

National Safety Council (NSC) of USA.

 Genentech environment excellence silver award for the year 2008

under fertilizer category awarded by greentech foundation, New

Delhi.

 Fertilizers association of India (FAI) Environmental protection

award in the nitro fertilizer plants category for the year 2007-08.

.
OTHER GROUP COMPANY / INSTITUTION:

Nagarjuna Investors Services Limited

Nagarjuna Agric hem Limited
Nagarjuna Palma India Limited
Nagarjuna Agricultural Research & Development Institute
KVK Raju International Leadership Academy
Nagarjuna power Corporation Limited
Nagarjuna Haifa India Limited
Nagarjuna Oil Corporation Limited
Bijam Biosciences Limited
Nagarjuna Foundation
Jai Prakash engineering and steel company limited
Kakinada fertilizers limited
FUTURE PLANS OF THE COMPANY:

1) To improve the capacity utilization and energy efficiency

through technology up gradation.

2) Switching over to 100% natural gas as raw material instead

of Naphtha in Ammonia plant II

3) To continue to improve environmental performance under the

framework of ISO 14000 – EMS.

4) To achieve British Safety convenience sword of honor in

safety management.

5) To enhance the standards in the present quality management

system (ISO 9002) by adopting the ISO 9001-2000 revision.

6) To enhance the standard in the present quality management

system (ISO 9002) by adopting the ISO 9001-2000 revision.

7) To widen the scope and offer technical services to various

external agencies including over as a excitement.

Diversification:
 Nagarjuna Group is on the threshold of major growth phase.
Nagarjuna’ aim is not just to meet the challenges of change, but to
be the leaders in all the businesses that we are in namely, Agri
Inputs/Outputs, Energy Sector and Refinery. Nagarjuna Group will
thus have significant presence in the core sectors of the economy,
which will have a multiplier effect on the industrial and socio-
economic development of the country.

Nagarjuna Fertilizers and Chemicals Limited (NFCL) has

sought the Center’s permission to expand the existing production
capacity of urea from 12lakh metric tons per annum to 17lakh
tones per annum, reports Business Standard.

NFCL is also undertaking several activities for the development

of the surrounding villages by providing free medical, educational
and drinking water facilities besides supporting the mentally-
retarded children.

The Kakinada facility of Nagarjuna Fertilizers and Chemicals

Limited (NFCL), has achieved a record Urea production of 113.1%,
producing a total of 13.79lakh Metric Ton of Urea during 2005-06.
The Plant has repeated this phenomenal feat, producing Urea more
than its capacity, for the consecutive second year. NFCL produces
Urea in two units. While the Unit one Produced 7,03,645 Metric
Ton, unit two also surpassed its capacity by producing 6,75,571
Metric Ton making this phenomenal feat repeated during 2005-06
too. Total capacity of the plant is 11, 94,600 Metric Ton. The Plant
also has achieved this record production at a very optimal
utilization of energy of 5.662MKcal/MT of Urea against

Internal target of 5.67 McCall/MT, which is already much lower

than the standard Fertilizer Industry Coordination Committee’s
(FICC) norm of 5.712 MK cal/MT. NFCL has one more reason to
celebrate that full production of Urea i.e., 13.79lakh Metric Ton has
been dispatched to the farmers. Along with the production, NFCL
has also done well in sales and distribution wings.

NFCL WINS GAS CONSERVATION AWARD FROM GAIL:

Fertilizer facility of Nagarjuna Fertilizers and Chemicals
Limited in Kakinada has been selected for the ‘Award for
Excellence in Natural Gas Conservation’ in the ‘Fertilizers
Sector’ category for its outstanding contribution to natural gas
conservation in the country during 2004-05.

This annual award has been instituted by Gas Authority of

India Limited (GAIL) as recognition of the excellent work done by
the organizations in Gas Conservation. GAIL has been conducting
a nation-wide Natural Gas Conservation Program , meant to spread
the word of conservation of this precious natural resource. All the
natural gas using industries like power, fertilizer, steel, sponge iron,
transport, glass, ceramic and petrochemicals would be considered
for this award.
 This is the 4th achievement of NFCL for it’s excellence in
different departments during 2005. These include 5 star rating in
O.H & S Audit from British Safety Council, UK. Commendation
Award in “Leadership and Excellence Awards in Safety, Health &
Environment (SHE) 2004”, by Confederation of Indian Industry,

Southern Region, Chennai. Re-certification for ISO 9001:2000

by Bureau Verities Quality International (BVAI) for quality
management systems. And NFCL also received Environment
Protection Award from Fertilizers Association of India.

NFCL wins the prestigious Environment Protection Award from

the Fertilizer Association of India

Nagarjuna Fertilizers and Chemicals Limited (NFCL) the

flagship company of the Nagarjuna Group has won the prestigious
FAI (Fertilizer Association of India) Environment Protection Award
in the Nitrogenous fertilizer plants category for the year 2004-05.
NFCL had won the same award for 2001-02 also. Going much
beyond the statutory requirements of law for environment
protection, NFCL has implemented a comprehensive protection plan
in its plant at Kakinada. NFCL has been widely acknowledged for
its Commitment to the betterment of Environment and this award
further adds to the long list of recognition.

NFCL has also won two more awards from FAI. A video
film titled “The Sugarcane” produced by NFCL was adjudged
Runner-up in the Annual Video Film Competition by FAI for the
year 2004-05. The video film has been developed with the objective
to transfer technology and to enhance the yield of sugarcane
farmers in Andhra Pradesh. For NFCL, this is the second
consecutive year of winning in this category. An article titled “From
Products to Solutions – Exploring Opportunities” published in the
September 2005 issue of the Indian Journal of Fertilizers was
awarded the Second prize in the category of Shriram Award for Best
article in Marketing.

Bureau Verities Quality International (BVQI) awards re-

certification of ISO 9001:2000 for Nagarjuna Fertilizers and
Chemicals Limited.

Nagarjuna Fertilizers and Chemicals Limited (NFCL) have been

re-certified of ISO 9001:2000 by Bureau Verities Quality
International (BVQI), for its Quality Management Systems. The
Flagship Company of the Nagarjuna Group has already been an ISO
9001:2000 organization since 1995. This re-certification, which is
valid up to February 2008, is only an extension of recognition for
company’s excellent quality management systems.

BVQI team has done the re-certification audit during February

at NFCL plant Kakinada. After conducting audit in Plant
Operations and Area Marketing Offices BVQI sent a certificate to
NFCL in which it mentioned “Quality Management System of the
Nagarjuna Fertilizers and Chemicals Limited has been audited and
found to be in accordance with the requirements of the standards
ISO 9001:2000”.

BVQI is today the most widely recognized certification body in

the world, offering solutions in the key strategic fields of companies
operations: Quality, Health and Safety, Environment and Social
Responsibility. It is recognized by more than 30 national and
international accreditation bodies across the world to deliver ISO
9001 certification.

Nagarjuna Fertilizers and Chemicals Limited Awarded the

prestigious 5 star Rating by the British Safety Council, U.K:

Nagarjuna Fertilizers and Chemicals Limited (NFCL), the

flagship company of the Nagarjuna Group has been awarded the
highly coveted 5 star rating by the British Safety Council, U.K. After
a detailed Health and Safety Management System Audit conducted
during the month of January 2005, the British Safety Council has
awarded an ‘Excellent’ rating (Score of 92.39%) to NFCL’s
manufacturing facility at Kakinada. The audit covered eight areas
of NFCL’s management systems leading to best practices, Fire
Control Systems, Measurement and Control Systems, Workplace
implementation, Verification, Best practice and Continuous
improvement.

The British Safety Council (BSC) is one of the world’s leading

occupational health, safety and environmental organizations.
BSC’s Five Star Health and Safety Management System Audit is a
benchmark for best practices. It provides a detailed examination of
the organization’s current practices, and gives a comprehensive
report and plan for implementing, monitoring and achieving
continuous improvement. It is based on the Business excellence
Model and goes beyond HS (G) 65 and OHSAS 18001 to measure
how far an organization has gone towards achieving best practice.

Information Technology & Communications Department,

Government of Andhra Pradesh signs MoU with IKisan Limited

To provide agriculture related information and services through

Rajiv Internet Village Centers / (RSDPs/Rural eSeva Centers)

In its efforts towards Grameen Vikas aimed at alleviating rural

poverty and ensuring agricultural development, the Information
Technology & Communications Department, Government of Andhra
Pradesh today signed a MoU with Ikisan Limited to provide
agricultural related information and services to the vast farming
community of the state through Rajiv Internet Village Centers
(RSDPs/Rural eSeva Centers).

The Information Technology and Communications Department

has already set up 1200 kiosks spreading across the state under
the Rural Service Delivery Point Project (RSDP) in rural areas to
serve as centers of e-commerce and information dissemination.
Ikisan Limited has partnered with the Information Technology &
Communications Department to provide agriculture information
software and services in these kiosks. The modules will be in
Telugu and voice enabled addressing the needs of rural population
comprising mainly of farmers. The kiosk operators will be provided
training by Ikisan Limited enabling them to effectively utilize the
software and other applications for the benefit of agriculturists.

Ikisan Limited is a pioneer in Agri-Portals in India. A

Nagarjuna Group initiative, Ikisan.com is a comprehensive Agri
Portal addressing the Information, knowledge and business
requirements of various players in the Agri arena viz., Farmers,
Trade Channel partners and Agri Input/output companies.
Leveraging Information Technology and extensive field presence,
Ikisan is positioned as an Information/Output companies.
Leveraging Information Technology and extensive field presence,
Ikisan is positioned as an Information/Knowledge exchange and an
e-Marketplace. An integrated agriculture group, Nagarjuna has
core competencies in the fields of plant nutrition, plant protection,
and irrigation and farm services.

Our Values:

Deliver solutions that will please our customers deliver returns that
motivate out investors take actions that strengthen us and inspire
the best in others (by setting an example in relationship, integrity,
honesty, humility and hard work).
 By understanding the deep and fundamental needs of our
people, our customers our Investors and our Ecosystem (Alliances,
Community and Environment).

The Group:
Founded in 1973 by Shri K.V.K. Raju with a modest
investment of US$ 23 million, the Nagarjuna Group Today is a
prominent industrial house in India with an asset base of US$ 2.5
billion.

1974: Birth of a business group that pioneered several core

sector enterprises in the coming decades. Starting with
manufacturing steel, Nagarjuna Steels Limited was launched.

1985: With focus on agriculture input business started plant

nutrition business with Nagarjuna Fertilizers and Chemicals
Limited

1992: Forayed into the Crop Protection Business with

Investments in Pesticide Formulations manufacturing followed by
Technical Grade Manufacturing in the year 1994.

1994: Micro irrigation business started to address the

irrigation problems of farmers living in water and energy scarce
regions.

1995: Ventured into Energy Sector. Entered into power

generation by setting up Nagarjuna Power Corporation Limited
 1997: Entered into petroleum by setting up Nagarjuna Oil
Corporation Limited.

Consolidating its core activities, today the Group’s major operations cover Agri and Energy sectors.

The circles, which stand for the core

values of the organization viz.,
concern, commitment, quality and
integrity towards its stakeholders
viz., customers, employees, investors
and community. The central circle
symbolizes the Sun, the source of
prime energy for the solar system.
The five circles also symbolize the
The new corporate logo of the Nagarjuna five elements of the Universe and the
Group symbolizes a dynamic and value- spirit of continuity.
based organization, actualizing the
The triangle represents the
concept of Trusteeship.
planet Mars. Mars, from time
immemorial has symbolized
prosperity, success and abundance
of energy. The triangle in the logo
represents the upward flow of
perennial energy towards the mission
of the group “Serving Society through
Industry”

WELFARE MEASURES IN NFCL:

It has taken several welfare measures to improve the general
working conditions. They are given below.

o A.C. Facilities

o Drinking Water Facilities

o Lockers given to employees for keeping their belongings

o Annual Medical Examination

o First Aid Boxes at several locations

o Cultural Activities

o Library Facilities

o School for children of NFCL employees

o Employees State Insurance Facilities

o Uniform to all Employees

o Group’s savings linked Insurance Scheme

o Protective wear like helmets

o Transport facilities

o Canteen facilities, Housing Loan facilities

NFCL OBJECTIVES:

 Performance management

 High performance potential

 Individual growth potential

 Belief in Youth

 High Result Orientation

 Law procedure orientation

 Entrepreneurial Development

 Distinct Nagarjuna Group Ethos

 High sense of respect for value of time and money

Harmonious employee relations

 Development of Human Resources on a continuous basis

 Highest importance to human values

 Objectives assessment of individual performance

 Disciplined behavior of all employees

 Belief in system management

 Belief dynamism
  Belief in multi skilled concept

 Continuous monitoring cost control

SWOT ANALYSYS:

1. STRENGHTS:

A broad and modern product range good corporate image especially

in Andhra Pradesh excellent dealer network in most of the other

states open work culture and good working environment qualified

trained and motivated team quality assurance system ISO – 9000

location advantage of plant.

2. WEAKNESSES:

Broad product range is not synergies yet. In adequate information

system and coordination between area offices and lead offices.

Inadequate marketing database/market information. Procedural

bottlenecks some complacency about market retention. Inadequate

reporting systems.

3. THREATS:

Decontrol, Joint ventures, International cartels. No availability of

raw materials in future.

 4. OPPORTUNTIES:

Huge gap between usage outside and inside India. Expansion object

offering double the quantity. New irrigation projects increasing the

demand.
Chapter-4
THEORETICAL FRAMEWORK
FUNDS FLOW STATEMENT:

INTRODUCTION:

The basic financial statement, i.e., the balance sheet and profit
and loss account or income statement of business, reveals the net
effect of the various transactions on the operational and financial
position of the company. The balance sheet gives a summary of the
assets and liability of an undertaking at a particular point of time.
It reveals the financial status of the company. The assets side of a
balance sheet shows the development of resource of an undertaking
while the liabilities side indicates its obligations, i.e., the manner in
which these resources were obtained. The profit and loss account
reflects the results of the business operation for a period of time. It
contains a summary of expenses incurred and the revenue realized
in an accounting period. Both these statements provide the
essential basic information on the financial activities of a business,
but their usefulness is limited for analysis and planning purposes.

The balance sheet gives a static view of the resources

(liabilities) of a business and the uses (assets) to which these
resources have been put at a certain point of time. It does not
disclose the causes for changes in the assets and liabilities between
two different points of time. The profit and loss account in a
general way indicates the resources providing by operations, but
there are many transactions that take place in an undertaking and
which do not operate through profit and loss account. Thus
another statement has to be prepared to show the change in the
assets and liabilities from the end of one period of time to the end of
another period of time. The statement is called a statement of
changes in financial position or a funds flow statement.

The funds flow statement is a statement, which shows the

movement of funds and is a report of the financial operations of the
business undertaking. It indicates various means of which funds
were obtained during a particular period and the ways in which
these funds were employed. In simple words, it is a statement of
sources and applications of funds.

FUNDS DEFINITION

Funds means change in financial resources, arising from

changes in working capital items and from financial and investing
activities of the enterprise, w may involve only non-current items.

The funds flow statement analyses the courses of change in

the firm working capital position. The cash flow statement is
prepared to analysis changes in the flow of cash only. These
statements total financial resources. They do not reveal some
significant items, which do not affect the firms cash on working
capital position, but considerably influence the financial position
and assets mix of the firm, for example, ordinary shares issue ready
to acquire some asset, say land affect the financing and asset mix of
the firm. But funds or cash flow statement will not include this
transaction as it does not involve any changes in financial position
and would disclose this information along with information on cash
or working capital changes.

The statement of changes in financial position is an extension

of the funds flow statement or the cash flow statement. It is more
informative and comprehensive in including the changes in the
firm’s financial position. However, the analysis of changes in the
firm’s cash position on working capital is still very significant.
Therefore, to get better insights, a firm may prepare a
comprehensive all inclusive, statement of changes in financial
position in co-operating changes in the firm’s cash and working
capital position. In the following selections, we illustrate the
preparation and use of the statement of changes in financial
position.

POSITION INVOLVING

 Changes in the firm’s working capital position.

 Changes in the firm’s cash position, and
 Changes in the firm’s total financial resources.
FUNDS FLOW STATEMENT

The statement of changes in financial position are prepared to

determine only the sources and uses of working capital between
dates of two balance sheets, is known as the funds flow statements
working capital is defined as the difference between current assets
and current liabilities. Working capital determines the liquidity
position of the firm. As a historical analysis, the statement of
changes in working capital reveals to management the way in which
working capital was distained and used with the insight
management can prepare the estimates of the working capital flows.
A statement reporting the changes in working capital is useful in
addition to the financial statements. A projected statement of
changes in working capital is immensely useful in the firm’s long
range planning management, for example, wants to anticipate the
working capital flows in order to plan the repayment schedules, its
long-term debt for a fast growth and expansion, a firm needs larger
amount of working capital. Therefore estimates of working capital
on long-term assets are also required to determine whether or not
adequate working capital will be generated to meet the firm’s
expansion, If not the firm can make arrangements in advance to
procure funds from outside to meet its needs.

The working capital flow or fund arises the net effect of a

transaction is to increase or decrease the amount of working capital
normally a firm will have some transactions that will change net
working capital and some that will cause no change in net working
capital. Transactions, which change net working capital, include
most of the items of the profit and loss account and business
events, which simultaneously affects both current and non-current
balance sheet items. On the other hand, transactions, which do not
increase or decrease working capital includes those, which affects
only current accounts or only non-current assets? Let us take an
example to illustrate the concept of the flow of working capital.

Suppose that a company issues ordinary shares for Cash.

Two accounts are involved in this case, current asset and the share
capital account, a current account.

The company receives cash against the owner’s increased

claims. Thus, there occurs a net increase in working capital.

Company purchases machinery for cash, again two accounts,

the cash account, which is current account and the machinery
account, which is non-current asset are affected. The company
acquires fixed assets by paying cash. This has the effect of
decreasing working capital. Some transactions do not change
working capital for example if a company receives cash from its
debtors, it represents increase of cash, a current asset account and
decrease of debtors, again a current asset account. Thus, there will
be no net change in the amount of working capital although the
composition of working capital will be effected.

If the company pays cash to its creditors, two current

accounts will be affected. The cash account being a current
account decreases and the creditor’s account being a current
liability account also decreases. The net effect will be no net change
in the working capital, although the composition of working capital
will change.

Working capital will also not be affected if both the account

involve are non-current. Suppose that the company purchases land
and makes payment by issuing shares to the land owner. Both
account are non-current in nature and do not effect current assets
or current liabilities. Thus working capital will remain unaffected.
Similarly, if the company converts loan or debentures into equity, it
will have no effect on working capital.

In the profit and loss account the revenue items increase cash
or receivables and therefore, increasing working capital, the
expense items reduce cash or create current liabilities and,
therefore decrease working capital, but there are certain items in
the profit and loss account that are not current and thus, they have
no effect on the net flow of working capital. Therefore, in
determining the net flow of working capital from operations, the
amount of depreciations is added to net profit to set right the effect
of depreciation deduction.

We may conclude that a transaction will cause net flow of

working capital only when one of the accounts effected is a current
account and another account is a non-current account. The
concept of working capital flow may be summarized as follows:

 The net working capital increases or decreases when a

transaction involves a current assets and non-current
assets.
 The net working capital remains unaffected when a
transaction involves only current account.
 The net working capital remains unaffected when a
transaction involves only non-current assets.
SOURCES OF WORKING CAPITAL:

The typical sources of working capital are summarized below:

1. Funds from operations.

2. Sale of non-current assets.
 Sale of long-term investments.
 Sale of tangible fixed assets like land, buildings, plant or
equipment.
 Sale of intangible fixed assets like goodwill patents and
copyrights.
 The net working capital increases or decreases when a
transaction involves a current account and a non-current
account.
 The net working capital remains unaffected when a
transaction involves only current account.
 The net working capital remains unaffected when a
transaction involves only non-current assets.
SOURCES OF FUNDS

The typical sources of working capital are summarized below:

1. Funds from operations (adjusted net income)

2. Sale of non-current assets.

 Sale of long-term investments (Share, Bonds, Debentures etc.,)

 Sale of tangible fixed assets like land, buildings, plant or
equipment.
  Sale of intangible fixed assets like goodwill patents and
copyrights.
3. Long term financing
 Long-term borrowing
 Issue of equity and preference shares.
4. Short-term financing such as bank borrowing
In the following paragraphs we explain the measurements of
funds from operation, as it usually involves a number of
adjustments.

FUNDS FROM OPERATIONS:

The major source of working capital is the firm’s net profit

from operations. The ultimate success of a company depends upon
its ability to earn profits. However, the profits and loss account
contains certain items, which do not effect working capital.
Therefore in determining the amount of working capital from
operations, the figure of net profit, as shown in the profit and loss
account, should be adjusted. The expenses items, which do not
involve working capital, should be added to net profit. Let us take
example of depreciation to illustrate the point.

SOURCES OF WORKING CAPITAL:

1. Adjusted net loss from operations.
2. Purchase of non-current assets.
Purchase of long-term investments like shares, bond,
debentures etc.,
  Purchase of tangible fixed assets like land, buildings,
plant, machinery, equipment etc.,
 Purchase of intangible fixed assets, like goodwill,
payments, copyrights.
 Repayment of long-term debt (debentures or bonds) and
short-term debt (balance boring)
 Redemption of redeemable preference shares.
 Payment of cash dividend.
MEANING AND CONCEPT OF FUNDS

The term funds have been defined in a number of ways.

a. In a narrow sense, it means cash only and a fund flow statement

prepared on this basis is called a cash flow statement prepared
on this basis is called a cash flow statement. Such a statement
enumerates net effects of the various business transactions on
cash and takes into account receipts and disbursements of cash.
B. In a popular sense, the term ‘funds’ means working capital
i.e., the excess of current assets over current liabilities. The
working capital concept of funds has emerged due to the fact that
total resources of a business are invested partly in fixed assets in
the firm of fixed liabilities and partly kept in the form of liquid or
near liquid as working capital.
The narrow concept of funds i.e., cash on working capital
concept fails to reveal the changes in the total financial resources
of a business, some significant items such as purchases of
building in exchange of shares, which do not directly affect cash
on working capital are not revealed from the analysis based on
these concepts. However the concept of funds of working capital
is the most popular one in this chapter and funds flow
statements as a statement of sources and application of funds.

In a broader sense, the term funds refer to many values in

whatever form it may exist. Here funds means all financial
resources used in business whether in the form of men, material,
money, machinery and others.

MEANING AND CONCEPT OF FLOW OF FUNDS:

The term flow means movement and includes both inflow and
outflow. The term flow of funds means transfer of economic
values from one asset of equity to another. Flow of funds is said
to have taken place when any transaction makes changes in the
amount of funds available before happening of the transaction
results in the increase of funds, it is called a sources of funds
and if it results in the decrease of funds it is known as an
application of funds.

Further, in case the transaction does not change funds, it is

said to have not resulted in the flow of funds. According to the
working capital concept of funds, the term flow of funds refers to
the movement of funds in the working capital. If any transaction
results in the increase in working capital, it is said to be a source
 or inflow of funds and if it results in the decrease of working
capital, it is said to be an application of outflow of funds.

RULE:

The flow of funds occurs when a transaction changes on the

one hand and a non-current account and vice-versa. When a
change in a non-current account for example fixed assets, long-
term liabilities reserves and surpluses, fictitious assets etc., is
followed by a change in another non-current account, it does not
amount to flow of funds. This is because of the fact that in such
cases neither the working capital increase nor decreases. Similarly,
when a change in one current account results in change in another
current account it does not affect of funds. Funds move from non-
current to current transactions or vice-versa only. In simple
language funds move when transaction effects.

i) A current asset and a fixed asset or

ii) A fixed asset and a current liabilities
iii) A current asset and a fixed liability or,
iv) A fixed liability and a current liability and funds do not
make when the transaction effects fixed assets and fixed
liability on current asset and current liabilities.
USES, SIGNIFICANCE AND IMPORTANCE OF FUNDS
STATEMENT:

A funds flow statement is an essential tool for the financial

analysis and is of primary importance to the financial management.
Now-a-days, it is being widely used by the financial analysis, credit
granting institutions and financial managers, the basic working
capital on the capital has been applied. Such a statement is
particularly useful in assessing the growth of the firm resulting in
financial needs and in determining the best way of financing these
needs. By making use of projected funds flow statements, the
management capital even in advance one can balance sheet dates.
It also describes the source from which additional working capital
has been financed and the resizes to which working plan the
intermediate and long-term financing of the firm repayment of long-
term debts, expansion of the business allocation of resources etc.,

A TOOL OF COMPANY TO OUTSIDE WORLD

Funds flow statement helps in gathering the financial status of

business. It gives an insight into the evaluation of the present
financial position and gives answer to the problem where here our
resources been giving? It enables the reader to obtain necessary
information on the methods used divided policies followed and
contribution of funds to the growth of the company. In the present
world of credit financing, it provides useful information to bankers,
creditors, financial institutions and Government etc., regarding
amount of loan required its purpose the term of repayment and
sources of loan etc.,

The financial manager gains confidence born out of a study of

funds flow statements. In fact, it carries information regarding
firm’s financial policies to the outside World. In India the financial
institutions such as IFCI, IDBI, ICICI etc., require funds flow
statement to be submitted to them along with application for loan
and other relevant papers.

FUTURE GUIDE:

An analysis of funds flow statements of several years reveal

certain valuable information for the financial manager for planning
the future financial requirements of the firm and their nature too
i.e., short-term, long-term or mid-term. The management can
formulate its financial policies such as dividend policies, analysis of
such statements. Financial manager can rearrange the firm’s
financing more effectively on the basis of such information along
with the expected changes in trade payables and various financial
requirements. In this way, he guides the management in arranging
its financing more effectively.

CONTROL DEVICE:

It serves as a control device in that statement compared with

the budget figures and will show to what extent the funds were
utilized according to plan. On this basis the financial manager can
take remedial steps if there is any deviation.

It is true that funds flow statement is very useful tool in the

hands of management but one should not be very enthusiastic
about the funds statement because it does not introduce the
original evidence of financial status or change but merely
rearranges the data appearing elsewhere in accounts only for
focusing attention to these aspects which are related to the
investigation and stand out in the actual situation as being
materially significant.

Despite this funds statements supplies valuable information to

the management and aid materially in planning for expansion, in
devising divided policies and other major programs. If handed
properly, it disseminates information that is not available
elsewhere. Funds flow statement is a method by which we study
changes in the financial position of a business enterprise between
the data of financial statements at the beginning and at the end.

FUNDS FLOW STATEMENT:

It consists of two parts.

1. Statements of schedule of changes in working capital.

2. Statements of sources and applications of funds.
 Chapter- 5
ANALSIS & INTERPRETATIONS
SPECIMEN OF REPORT FORM FUNDS FLOW STATEMENT

Sources of funds Amount Amount

1. Funds from operations xxx Xxx
2. Sales of non-current assets
3. Issue of share capital1.
4. Issue of debentures
5. Receipt from partly paid shares
6. Non-trading receipts such as dividend
received
7. Sale of Investments
8. Raising of long-term borrowings
9. Decrease in working capital
(As per schedule of changes in working
capital)
Total :
APPLICATION OF FUNDS
1. Funds lost in operation
2. Purchase of non-current assets
3. Payment of dividend
4. Redemption of preference share
capital
5. Redemption of debentures
6. Repayment of long term loans
7. Payment of loans
8. Non-trading payments
9. Purchase of long term investments
10. Increase in working capital
(As per schedule changes in working
capital)
Total :
CHANGES IN WORKING CAPITAL STATEMENT:

For the year ended 31st March 2013 Rs. LAKHS

PARTICULARS 2012 2013 increase Decrease

CURRENT ASSETS
Inventories 7620.13 5776.20 ---- 1843.93
Sundry debtors 22170.64 31124.31 8953.67 ---
Cash& bank 1922.16 6084.00 4161.84 ---
Loans and advances 18163.62 24529.91 6366.29 ---
------------- -------------
TOTAL C.A 49876.55 67514.42
------------- -------------

CURRENT LIABILITIES
Small scale industrial
under takings 40.41 2.99 37.42 ---
Others
Other liabilities 7086.42 12898.27 --- 5811.85
Unclaimed dividend 195.78 180.98 14.80 ---
Deposits 441.83 280.75 161.08 ---
Unclaimed fixed 898.39 1133.90 --- 235.51
deposits 59.98 46.80 13.18 ---
Unclaimed mature 359.15 --- 359.15 ---
debentures 262.87 251.69 11.18 ---
Interest accrued but not
due on loan 30.86 7.19 23.67 ---
Interest accrued on 695.23 5349.25 --- 4654.02
above 13081.85 18209.30. --- 5190.45
Provisions ------------- -------------
Cash credit 23089.77 38361.12
TOTAL C.L ------------- -------------
26786.78 29153.30
A-B (W.C) 2366.52 --- 2366.52
INCREASE IN W.C ------------- ------------- ------------- -------------
29513.30 29153.30 20102.28 20102.28
TOTAL
CHANGES IN WORKING CAPITAL STATEMENT

For the year ended 31st March 2014 Rs. LAKHS

PARTICULARS 2013 2014 increase Decrease

CURRENT ASSETS
Inventories 5776.20 8488.30 2712.10 ---
Sundry debtors 31124.31 31375.61 251.30 ---
Cash& bank 6084.00 1499.95 --- 4584.05
Loans and advances 24529.91 24009.67 --- 520.24
------------- -------------
TOTAL C.A 67514.42 65373.53
------------- -------------

CURRENT LIABILITIES
Small scale industrial
under takings 2.99 0.84 2.15 ---
Others
Other liabilities 12898.27 10898.27 2091.42 ---
Unclaimed dividend 180. 98 206.06 --- 25.08
Deposits 280.75 117.97 162.78 ---
Unclaimed fixed 1133.90 1532.08 --- 398.18
deposits 46.80 35.67 11.13 ---
Unclaimed mature --- --- --- ---
debentures
Interest accrued but not 251.69 7.98 243.71 ---
due on loan
Interest accrued on 7.19 5.87 1.32 ---
above 5349.25 9928.18 --- 4578.93
Provisions 18209.30 30326.70 --- 12117.40
Cash credit ------------- -------------
TOTAL C.L 38361.12 52968.20
------------- -------------
A-B (W.C) 29153.30 12405.33
16747.97 16747.97 ---
DECREASE IN W.C ------------- ------------- ------------- -------------
29153.30 29513.30 22223.88 22223.88
TOTAL
CHANGES IN WORKING CAPITAL STATEMENT

For the year ended 31st March 2015Rs. LAKHS

PARTICULARS 2014 2015 increase Decrease

CURRENT ASSETS
Inventories 7494.23 18923.84 11429.61 ---
Sundry debtors 34604.99 29814.36 --- 4790.63
Cash& bank 22040.15 9977.36 12062.14---
Loans and advances 27035.32 25882.99 1152.33 ---
--- 6576.69 6576.69
------------- ------------- ---
TOTAL C.A [A] 91174.69 84598.55
------------- -------------

CURRENT LIABILITIES
Small scale industrial 23.40 71.02 47.62
under takings 27529.33 25176.27 ---
Others 250.06 269.72 19.66 2357.6
Other liabilities
Unclaimed fixed 2031.82 1757.97 273.85
deposits 278.42 12.65 273.16
Interest accrued but not
due on loan

30113.03 27287.62
2825.41
TOTAL C.L
[ B] 61061.66 57310.93 ---
4769.17
A-B (W.C) ------------- -------------
52968.20 81200.25
------------- -------------
TOTAL 12405.33 12251.81
153.52
------------- -------------
12405.33 12405.33 ---
------------- 153.52
29926.44 -------------
29926.44
CHANGES IN WORKING CAPITAL STATEMENT
For the year ended 31st March 2016 in lakhs

PARTICULARS 2015 2016 increase Decrease

CURRENT ASSETS
Inventories 18923.84 7494.23 ---- 11429.61
Sundry debtors 29814.36 34604.99 4790.63 ---
Cash& bank 3119.66 5745.66 2626.00 ---
Loans and advances 27857.20 28775.79 918.59 ---
Other current assets 13717.36 6478.17 ----- 7259.19
------------ ------------ ------------- -----------
TOTAL C.A - - - -
93452.42 83098.83 8335.22 18688.80
------------ ------------ ------------- -----------
CURRENT LIABILITIES - - - -
Small scale industrial
under takings 71.02 23.40 2353.06
Others --- 47.62
Other liabilities 25176.27 27529.33 ----
Unclaimed dividend 269.72 250.06 ---
Deposits 22.70 9.07 273.85 19.66
Unclaimed fixed deposits ----- --- 13.63
Unclaimed mature 1757.97 2031.82 ---- ---
debentures ------ --- --- ---
Interest accrued but not ------ --- --- ---
due on loan ----- --- 1.26
Interest accrued on ---- --- ---
above 3.67 2.40 ----
Provisions ---- ---- ----
Cash credit ------------ ------------
TOTAL C.L - - ----
27314.00 30124.50
A-B (W.C) ------------ ------------ -------------
DECREASE IN W.C - -52973.83 -15080.06 13164.59
66138.42 13164.59
TOTAL ------------ ------------
- -
66138.42 66138.42
CHANGES IN WORKING CAPITAL STATEMENT

For the year ended 31st March 2017Rs. LAKH

PARTICULARS 2016 2017 increase Decrease

CURRENT ASSETS
Inventories 7494.23 5937.72 1556.28
Sundry debtors 34604.99 29816.19 4788.8
Cash& bank 5769.97 6195.91 425.94 ---
Loans and advances 1449.42 11517.12 67.7 ---
Other current asserts 6478.17 --- --- 6478.17
------------- -----------
TOTAL C.A 65796.78 53466.94
------------- -----------
---
CURRENT LIABILITIES
Small scale industrial 23.40 --- 23.40 ---
under takings
Others 27529.33 31458.93 --- 3929.6
Other liabilities 250.06 206.79 43.27 ---
Unclaimed dividend 9.07 1.12 7.95 ---
Deposits --- --- --- ---
Unclaimed fixed deposits 2031.82 2498.86 --- 467.04
Unclaimed mature --- --- --- ---
debentures --- --- --- ---
Interest accrued but not --- --- --- ---
due on loan 278.41 260.11 18.33 ---
Interest accrued on 2.40 0.25 2.15 ---
above ---- --- --- ---
Provisions ------------- ------------
Cash credit 30124.49 34426.06
TOTAL C.L ------------- ------------
35672.29 19040.88
A-B (W.C) 16631.41 16631.41
DECRESE IN W.C ------------- ----------- ------------ ------------
35672.29 35672.29 17720.18 17720.18
TOTAL
INTERPRETATION:

During this year

FUNDS FLOW STATEMENT FOR THE YEAR 2012-13

SOURCE OF Amount APPLICATION OF Amount

FUNDS FUNDS

Funds from Purchase of fixed 143941.44

operation asset
163325.83

Share capital
-----
Decrease secured
17566.72
loans
Increased un
secured loan
548.85
Increase w c
capital 2366.52

163874.68 163874.68

INTERPRETATION:

The above statement shows the sources and applications of

funds during the year 2012-13.This year main sources of funds are
from increased unsecured loans, which are548.85laks and the
application of funds are from mainly depend on the decreased in
the un secured loan17566.72lakhs.
FUNDS FLOW STATEMENT FOR THE YEAR2013-14:

SOURCE OF Amount APPLICATION OF Amount

FUNDS FUNDS

Increase un 508.68 Purchase of fixed 10617.96

secured loans asset

Share capital
----
Decrease secured
14380.6
loans

Decreased
13164.59
working capital

Funds from
operation 10267.06

23940.33 23940.33

INTERPRETATION:

The above statement shows the sources and applications of

funds during the year 2013-14.This year main sources of funds are
from increase secured loans, which areRs508.68laks and the
application of funds are from mainly depend on the decreased
in the secured loans which 14389.6lakhs.
FUNDS FLOW STATEMENT FOR THE YEAR2014-15

SOURCE OF Amount APPLICATION OF Amount

FUNDS FUNDS

Increased in un 681.84 Purchase of fixed 1448.38

secured loans asset

----
Share capital

Decrease secured
4748.31
loans
16747.97
Decreased
working capital Purchase of
investment 837.94

Funds lost in
operation
10395.18

17429.81 17429.81

INTERPRETATION:

The above statement shows the sources and applications of

funds during the year 2014-15.This year main sources of funds are
from increased in unsecured loans, which are 681.84laks and the
application of funds are from mainly depend on the decreased in
the secured loans 4748.31lakhs.
FUNDS FLOW STATEMENT FOR THE YEAR 2015-16

SOURCE OF Amount APPLICATION OF Amount

FUNDS FUNDS

Increased in 34768.88 Purchased of fixed 35579.21

secured loan asset

Share capital Increase working

46520.31 4769.03
capital

Increased un
9479.24
secured loan

135188.62
Funds from
operation

181536.86 181536.86

INTERPRETATION:

The above statement shows the sources and applications of

funds during the year 2015-16. This year main sources of funds
are increased secured loans, which are 5497.79laks.and the
application of funds, are from mainly depend on the decreased in
the purchase of fixed asset13449.19lakhs.
FUNDS FLOW STATEMENT FOR THE YEAR2016-17:

SOURCE OF Amount APPLICATION OF Amount

FUNDS FUNDS
Increased un 4834.03 Purchase of fixed 580.72
secure loans asset

Funds flow from 6636.91

operation

Share capital ---- Decrease secured

loans 38599.7

Decreased 16631.41
working capital

39180.42 39180.42

INTERPRETATION:
The above statement shows the sources and application of
funds during the year 2016-17. This year main sources of funds
are from increased unsecure loans, which are 4834.03laks and the
application of funds are from mainly depend on the decreased in
the secured loans 38599.7lakhs.

.
CHAPTER-06
FINDINGS :

 The company has gained a cheaper financial source then by

decreasing an external component.

 NFCL fix the price of their products according to the

“ESSENTIAL COMMODITY ACT” enacted by the government.

 NFCL occupies dominant role in the Indian fertilizer

industry.

 In order to achieve the goals of the organization has whole

and achievement of performance appraisal technique is very
useful.

 The company lenders have contributed more funds than

owner’s .This is the reason that the company had paid high
inters to the borrowers.

 NFCL Obtained cheaper financial resources than previous

year.
SUGGESTIONS:

 The company can gain more profits if it can get cheaper

financial resources by decreasing its interest components.

 The company should reduce the collection period after sales to

uplift the liquidity condition.

 The company should try to reduce external liabilities, having

to pay high EPS.

 The company should make arrangements of receivables and

cash.

 Out of total working capital the debtors occupies major part.

 Government has to provide some subsides to develop the

company.
 CONCLUSION

The company’s plants continue to operate efficiency and the

fertilizer operation of the company are viable and profitable. The
fertilizer operations of the recoveries are extraordinary items of a
non –recurring nature. The company proposes to improve
profitability by taking measures for better efficiency and
profitability.

Company was maintaining adequate stock of inventory in

order to meet the demand of output. This needs some sort of
improvements. The company can gain more if it can get cheaper
financial resources by decreasing its interest component even
through the company is producing urea at its full capacity the sales
to fixed asset are less than one because the company its capital
intensive industry.

We feel that whole fertilizer will be going for re-

rating, as the profitability of the company will increase in
coming years.
BIBLIOGRAPHY

FINANCIAL MANAGEMENT I.M. PANDEY

FINANCIAL MANAGEMENT SHASHIK K. GUPTHA &

R.K. SHARMA

FINANCIAL MANAGEMENT M.Y.KHAN & P.K. JAIN

FINANCIAL MANAGEMENT PRASANNA CHANDRA

FINANCIAL MANAGEMENT DR. VARMA & AGARWAL

FINANCIAL ANALYSIS NAND KISHORE SHARMA

COMPANY ANNUAL REPORTS 2012- 2017 (6 YEARS)