A STUDY ON

FINANCIAL STATEMENT ANALYSIS

WITH REFERENCE TO
BHPV LTD

A project report in the area of Finance submitted to Andhra University,
Visakhapatnam.
Fulfillment for te !"!r# of #e$ree of
MBA
BY
S%DHANAN&AYA RAO
MRP' COLLE'E(VI)IANA'ARAM%
UNDER THE ESTEEMED 'UIDANCE OF
*IRAN *UMAR
MRP' COLLE'E( VI)IANA'ARAM

CERTIFICATE
This is to certify that S.!A"A"#A$A %A& , student of '(A)Finance*
in the epartment of 'ana+ement Studies at '%,- .&//0-0,
Andhra University durin+ the academic year 1232 4 1231 has under+one
the project 5ork on A STU$ &" FU" F6&7 STAT0'0"TS in
(!,V , Visakhapatnam under my supervision and had fu8fi88ed the
re9uirements concernin+ the project 5ork.
VISA*HAPATNAM *%SRINIVASA RAO(
DATE+ m!n!$er,fin!n-e.


DECLARATION
6,S.!A"A"#A$A %A& Student of '(A,)Finance*, is hereby dec8are that
the project report submitted by me to the !ead of the 'ana+ement
Studies A STU$ &" A"A/$S6S &F FU"S F/&7 STAT0'0"T in
(!,V, V6S!A:A,AT"A' in partia8 fu8fi88ment of the re9uirement for
the 'AST0% &F (US6"0SS A'6"6ST%AT6&" is a record of a
bonafied research carried out by me under the +uidance of ;;;. , 6
hereby dec8are that this project is my o5n and is prepared basin+
upon the data and information +athered durin+ a period of T7& months.
6 further dec8are that this project is a +enuine bonafied 5ork
done by me and is not submitted to any other university pub8ished any
time before.

)S.!A"A"#A$A %A&*
,/A.0< V6S!A:A,AT"A'
AT0<
AC*NOWLED'EMENT
6 take this opportunity to e=press my deepest +ratitude to
Sri;;;;; , my project +uide > motivator for he8pin+ me in carryin+
out this project.
6 am thankfu8 to ;;;;;;;;;;;. for +ivin+ me permission to do
my project.
6 am thankfu8 to ;;;;;;;;;;;. ept of 'ana+ement studies,
Andhra University, V6S!A:A,AT"A' for his va8uab8e +uidance in the
project and a8so my educationa8 career.
6 5ou8d 8ike to e=press my sincere thanks to Shri :. SRINIVASA RAO,
F6.7A6, 'ana+er, Finance, (!,V for +ivin+ me he8pfu8 information to
undertake this study.
)S.!A"A"#A$A %A&*
CONTENTS
CHAPTER /+ INTRODUCTION
CHAPTER 0+ COMPANY PROFILE 1 INDUSTRY PROFILE
CHAPTER 2+ THEORITICAL FRAME WOR*
CHAPTER 3+ ANALYSIS AND INTERPRETATION
CHAPTER 4+ SU''ESTIONS 1 BIBLIO'RAPHY

i. CHAPTER 1: INTRODUCTION
a. Introduction
b. Need for the study
c. Objectives of the study
d. Scope of the study
e. Methodology
f. Liitations
INT!O"#CTION TO T$E TO%IC
FINANCIAL MANAGEMENT
Financial management is managerial activity which is concerned with
the planning and controlling of firms financial resorces! It was a "ranch
of economics till #$%& and as a separate discipline it was of recent
origin! 'till it has no ni(e "ody of )nowledge of its own and draws
heavily from economics for its theoretical concepts even today! Theory of
financial management provides conceptal and analytical insights to
ma)e decisions relating to the financial aspects of organi*ation s)illflly!
"efinitions of financial anageent&
+Financial management is concerned with the efficient se of an
important resorce namely, capital fnds-! .E/0A '1L1MAN
+Financial management is concerned with the managerial decisions
that reslt in the ac(isition and financing of long2term and short2
term credits for the firm-! . 34ILLI33AT5'!
+Financial management is that "siness activity which is concerned
with the ac(isition and conservation of capital fnds in meeting
financial needs and overall o"6ectives of a "siness enterprise-! .
74EELE0

These definitions we can nderstand the fnctions of the financial
management! Those are procrement of fnds and effective tili*ation
and part of these fnctions se different techni(es!
O'(ECTI)ES O* *IN+NCI+L M+N+,EMENT
8ite o"viosly, the o"6ective of the firm shold "e the ma9imi*ation of
its vale of the shareholders! The price of shares in the mar)et indicates
the vale of the firm! Factors li)e investment, financing and dividend
e9ercise an inflence on the mar)et price of the shares! The main
o"6ectives of financial management can "e said as:
%!O*IT M+-IMI.+TION
The o"6ective of every organi*ation is profit ma9imi*ation! 3rofit
Ma9imi*ation means ma9imi*ing the rpee income of firms!
3rofit is considered as the most appropriate measre of a firms
performance!
/E+LT$ M+-IMI.+TION
It is a long 2 term o"6ective! 7ealth ma9imi*ation is nothing "t
increasing the wealth of the shareholders "y way of contri"ting to the
net worth of the shareholders!
For attaining these a"ove said o"6ectives financial manager ma)es crcial
decisions relating to investment in different pro6ects, dividend
decisions , de"t e(ity mi9 decisions, sorce of finance, analysis of ratios
and wor)ing capital management!
*#N"S *LO/ ST+TEMENTS +N+L0SIS
Fnd flow analysis is the analysis of flow of fnd from crrent asset to
fi9ed asset or crrent asset to long term lia"ilities or vice2 versa! First of
all, we ma)e fnd flow statement and then stdy its case and effect
deeply and try to find many important facts and information which can "e
sed in "siness! It can also solve following pro"lems!
Fnd flow statement is made "y ta)ing two period "alance sheets and if
we stdy it then we can find that it may possi"le that we are sing net
profit for prchasing fi9ed assets! 'tatement of changing in wor)ing
capital can also show net decrease in wor)ing capital!
INT!O"#CTION +'O#T '$%) LT"
;43< was esta"lished in the year #$== at <isa)hapatnam, Andhra
3radesh as a 3"lic 'ector 5nderta)ing nder the >epartment of 4eavy
indstry ?>4I@ to manfactre and spply cstom "ilt process plant
e(ipments for Core 'ector Indstries li)e Fertili*ers, 1il 0efineries,
3etrochemicals, 'teel 3lants, Nclear, 'pace, >efence and 3ower 'ectors
with the technical colla"oration of 'A1>A E9port, C*echoslova)ia! The
Company is located on N42B near to Airport, 0ailway 'tation and 'ea
3ort in <isa)hapatnam, Andhra 3radesh! The Company is spread over a
total area of C%= Acres!
;43< is a premier 1rgani*ation speciali*ing in design, fa"rication,
spply and erection of 4eat E9changers, Colmns, 'torage 'pheres,
0eactors and 'trippers, Mltilayer <essels 0eactor 0egenerator 3ac)age,
Air 'eparation 3lants, 3rge Gas 0ecovery 5nits, 19ygen 3lants,
Nitrogen 3lants, 4ydrogen 3lants, 'lphr 0ecovery 5nits, Crde
'ta"ili*ation 5nits, Monded 'torage 'ystems, Compact 4eat
E9changers, 1n ;oard 19ygen generating system etc!, to 1il 0efineries,
Fertili*er 3lants, 'teel 3lants, >efence sector etc!, and has "een
contri"ting to the Nation "ilding dring the past for decades! The
Company has good potential to cater to the growing needs envisaged in
3ower, 1il and Gas, Nclear, >efence and other strategic sectors in
ftre! Also, ;43< is highly repted for the 8ality and relia"ility of its
prodcts and possesses several National D International 8ality
accreditations "esides I'1 $&&#:E&&& certification!
;43< started prodction in the year #$F#2FE with a trnover of 6st
0s!#!$B Crs and crossed 0s!C&& Crs in the year #$$=2$F! The Company
contri"ted more than 0s! =B& Crs to the national e9che(er dring the
past E& years!
;43< is the largest fa"ricator of process e(ipment in India for the
petrolem, fertili*er, chemical and allied indstries! It is a s"sidiary of a
navaratna Central 3"lic 'ector Enterprise . 'harat $eavy Electrical
Liited and is managed "y an atonomos separate "oard of directors!
'itated in the city of destiny of <isa)hapatnam on the western see coast
of the >eccan platea, ;43< is accessi"le "y road, rail, sea and is well
connected to all metropolitan cities "y air!
;43< has "een selected for stdy !The topic selected is 1+ study of 2
*unds flo3 Stateent4 with reference to ;43<!
The importance of the stdy 1*unds flo3 Stateents 4 in ;43<
prespposes that one very important reason for which p"lic sector
enterprises in India have sffered financial strains or earned low level of
profits, may relate to the in efficient management!
4ad these enterprises managed the over all financial operations in an
efficient manner they wold have generated resorces towards economic
growth throgh proper financial decision ma)ing! The stdy has great
significant "enefits to varios parties that are directly or indirectly
interact with the company!
It is "eneficial to top management of the company "y providing clear
pictre regarding important aspects li)e li(idity, leverage activity and
profita"ility!
NEED FOR THE STUDY
;43< has emerged as one of the leading heavy engineering indstries
after its incorporation, in the year #$== to manfactre cstom "ilt
capital e(ipment re(ired "y the process indstries li)e fertili*ers,
petrochemicals D chemical indstries!
After its commissioning D commencement of prodction, the
company has "een continosly pdating its technologies, "y
entering into colla"orations with renowned companies li)e MGs
')oda, C*echoslova)ia, MGs! ;'L, >elas2 France, 4CG2Netherlands,
4ahn D Clay25'A etc!
Mammoth Engineering capa"ilities D e9cellent designing networ) D
manfactring facilities, high degree of cstomer confidence, with sond
wor) cltre are some of the vital factors involved in achieving
continos growth in ;43< e9perienced in design of colmns, mlti
layer vessels , heat e9changers, Li(id o9ygen D nitrogen nit,
evaporation plants, digesters , monded vessels ,'lphr recovery nit,
gas dehydration, desalters, heater treaters, crde sta"ili*ations nit,
storage vessels etc!, "ac)ed "y technology a"sorption D adoption from
the world leaders!
4owever in the early E&&&s, the financial performance of the indstry
went nder great strain, de to a com"ination of adverse factors, which
got "nched year "y year! 'ince E&&# steep rise in e9or"itant interest
costs, increased inflation, glo"al competition, Government policy etc
frther aggravated the sitation!
4owever, from the year E&&%, the company started showing positive
signs in the operations and stared earning profits! The main reason for
this development is the decision of the Government to delin) the
company from ;HNL, Allaha"ad and ma)e it part of 4eavy Electrical
E(ipment Conglomerate ;4EL! The year 5667 can be said as RE-
BIRTH year for '$%).
;4EL, from the date of ta)ing over ;43< in E&&%, started to loo) after
)ey areas li)e tili*ation of plant capacity to the fllest e9tent, attention
on financial discipline, 40 related pro"lems, Cape9 etc! From the year
E&&% the company re2started its "siness with new loo), strategies,
diversification and once again started gaining cstomer confidence,
there"y earning positive financial figres and on the way of regaining
past glory!
The importance of the stdy, *unds *lo3 Stateent +nalysis in ;43<,
<isa)hapatnam prespposes that one very important reasons for which
3"lic sector Enterprises in India have sffered financial strains in the
late %&s and in $&s or earned low Level of profit may relate to the
misconstring of the financial aspects! 4ad these Enterprises managed the
overall finance operations in an efficient manner, they wold have
generated resorces for its growth as well as economic growth!
OBJECTIVES OF THE STUDY
Fnds Flow 'tatement is an an analytical tool in the hands of financial
manager! The "asic prpose of this statement is to indicate on historical
"asis the changes in the wor)ing capital i!e!, where fnds came from and
were there are sed dring a given period!
This stdy of ;43< LT> has "een nderta)en to evalate the over all
efficiency of the organi*ation "y esta"lishing the following o"6ectives!
#! To 6dge the financial position, i!e! the short term li(idity position
and the long term solvency!
E! To measre the operational efficiency!
C! To determine the profita"ility trends!
I! To asses the components of the wor)ing capital management
B! To determine the flctations cased de to them!
=! To give appropriate sggestions this may "e of some importance to
the firm in improving its performance!
F! To stdy the profile of the company!
SCOPE OF THE STUDY
The scope of the stdy is connected to one of the )ey areas of finance i!e!
Analysis D Interpretation of Fnds flow G Financial 'tatements! The
stdy appraises the companyJs meeting the re(irements for the process
indstries in the core sector sch as fertili*er, oil refineries, chemicals etc!
MET$O"OLO,0 O* T$E ST#"0
The analysis of the pro6ect was "ased on the availa"le information! Any
information a"ot the topic is called the data! The data was gathered from
varios sorces i!e!, 3rimary and 'econdary sorces!
Type of "ata&
3rimary >ata
'econdary >ata
%riary "ata& Any information that is collected afresh and for the first
time is called 3rimary data !The primary data happen to "e original
in character! The Information is gathered from concerned employees!
The employees and manager of the financial department have provided
the information needed for the stdy!
Secondary "ata& Information which has already "een collected "y
some"ody else or some other agency with definite prpose and which has
already "een processed is called secondary data! The secondary data for
the stdy have "een gathered from the "alance sheets, profit and loss
acconts annal reports and other "oo)s and manals of the ;43< LT>!
The following data was collected from the company
#! Annal reports!
E! Financial reports!
C! Acconting reports!
I! In2hose maga*ines!
B! >epartmental manals and
=! 3"lic Enterprise srvey reports!
LIMIT+TIONS O* T$E ST#"0
Every stdy is condcted nder certain limitations! The stdy relates only
to financial data and other areas are not ta)en into
consideration! The stdy is carried ot only for a period of E
month! It was not possi"le to get cent percent correct
information! The research was made according to the
information availa"le from related departments and throgh
annal reports p"lished! The sent stdy covers only for a
period of five years! 'o the analysis will "e made on this "asis!

E&&=2E&&F
E&&F2E&&%
E&&%2E&&$
E&&$2E&#&
E&#&2E&##
IN"#ST!0 %!O*ILE
;43< is a s"sidiary of ;4EL ?;harat 4eavy Electricals Ltd@, navaratna
Central 3"lic 'ector Enterprise and 4eavy Electrical E(ipment
Conglomerate!
M+!8ET %!O*ILE:2
In addition to ;43< legacy prodcts sch as process plants, com"stion
systems, "oilers, cryogenic e(ipments for refineries, fertili*er plants,
steel pants etc, with the ta)eover of the company "y ;4EL, the company
diversified into manfactring e(ipments re(ired for power generation
plants in and a"road!

C#STOME! %!O*ILE:2
;43<' clientele incldes2 3"lic, 3rivate, Co2operative 'ector
organi*ations in almost all the core sector of economy sch as all the
fertili*er plants, petrolem refineries and steel plants in India and a"road!
Now, with the diversification all ma6or power plants in India! 1ther ma6or
cstomers are from paper, chemicals, defence, space sectors!
COM%ETITO! %!O*ILE:2
In the area of process plant: LDT, G0 Engg , Lloyds steel, I'GEC,
Kohn Thomson, Godre6 etc
In the area of cryogenics: ICC3, IN1L, 'hanghais o9ygen, LDT,
Linde, <K5, Essar, LIN>E, Air
prodcts, Ao"e, 4itachi, 413M, 3ra9air
In the area of com"stion system: I'GEC, ;a"coc) Therma9, Igniflid
"oilers, A;L LDT ATI, Therma9 etc
C OM%+N0 %!O*ILE
4EA> 1FFICE:2 <isa)hapatnam, Andhra 3radesh!
;0ANC4 1FFICE: 2 Mm"ai, Chennai, New >elhi
;harat 4eavy 3lates and <essels Ltd, it is a p"lic limited Company! It is
a 6o" orderG shop prodction indstry! According to cstomer
specifications and re(irements it prodces varios prodcts! Fore seeing
the contrys need for fa"ricating e(ipment of an e9clsive Factory with
the main o"6ect of redcing dependence on foreign sppliers and "ecome
self sfficient orselves! Ths the "irth of ;43< in the year #$== to meet
the demands of process e(ipment for core indstry li)e Fertili*ers,
petrochemicals, petrolem and other chemical indstries initially! ;43<
sing different types of materials manfactred and spplied several "ilt
e(ipments sch as pressre vessels, heat e9changers, colmns, internal
trays etc! After e9ecting some important orders, ;43< LT> gained fll
confidence of cstomers which cleared the way to enter the line of
cryogenic field, plp coo)ing plant, evaporation plant and indstrial
"oilers on a total trn)ey "asis which of later years helped in
agmenting trnover of the company and increasing profita"ility!
INT!O"#CTION +'O#T '$%) LT"&
In the li"erali*ed economy of India and in the era of glo"ali*ation a
company mst rethin) its "siness mission and all fnctional strategies!
In these days companies find themselves competing in a race where the
road signs and rles )eep days when it was +"siness as sal-
companies cold scceed only "y having innovative ideas com"ined with
"y effective financial management!
Therefore, it is not srprising that todays winning companies are
those which foresee the ftre and manage the finance effectively! 1ne
can manage finance effectively "y managing wor)ing capital, capital
strctre and ta)ing decision on capital "dgeting! 5ltimately, finance is
at its "est a"ot vale adding, developing new prodcts and raising the
worlds standards of living! The heavy engineering indstry is a ma6or
strength of any economy! These heavy engineering indstries which
prodce capital goods are the most modern of the entire indstrial grop!
In India these heavy engineering indstries occpy a crcial role in its
economic development in view of the hge investment as well as the
critical importance to nation! These indstries are mostly confined to the
p"lic sector only! ;43< Ltd! is the largest fa"ricator of process
e(ipment in India for the petrolem, chemical and allied indstries! It is
flly owned "y the government of India and is managed "y an
atonomos "oard of directors! 'itated in the City of destiny of
<isa)hapatnam on the western see coast of the >eccan 3latea, ;43<
is accessi"le "y road, rail, sea and is well connected to all metropolitan
cities "y air!
;43<, <isa)hapatnam is a p"lic sector nderta)ing ;43< has "een
selected for the stdy! The topic selected is 1+ study on *inancial
Stateents +nalysis4.
;harat 4eavy plates D <essels Ltd!, started off in #$== as flly owned
Government Company for >esign, Manfactre D 'pply of capital
e(ipment re(ired for process indstries in the core sector sch as
fertili*ers, oil refineries D petrochemicals etc! 'ri >! 'an6eevayya laid the
fondation stone, the then Minister of Indstry on %
th
Kan #$=F in
<isa)hapatnam!
It comes nder the prview of the >epartment of 4eavy
Indstry, Ministry of Indstry! 7ith the technical colla"oration of
'A1>A E9port Company of C*echoslova)ia in the year #$=%, it got
e9pertise and gidance for esta"lishing the pro6ect and for the >esign D
manfactre of varios process e(ipments! ;43< "ecame a flly owned
s"sidiary of ;harat 4eavy Electricals Ltd!
Li-en5e# in5t!lle# -!6!-it7 i5 020/8MT% Te initi!l -!6it!l
outl!7 i5 R5%/9%4 -rore5% Te 6ro#u-t mi: in-lu#e#
e!t e:-!n$er5( -olumn5( !n# 6re55ure ;e55el5(
Stor!$e ;e55el5( 6i6in$ et-% Durin$ te 7e!r of it
-ommer-i!l 6ro#u-tion i%e% /<9/=/<90 te turno;er
"!5 >u5t R5 4 l!?5% In /<<@=<9 it !5 re-or#e# on
turno;er of R5 0<<<A l!?5 i%e% !ll time i$% L!5t Fi;e
7e!r 6erform!n-e i5 6ro#u-e# ere un#er%
PROFITEERING YEARS FOR BHPV
After a series of continos loss years, ;43< for the first fine in its
history, in #$F$2%& has witnessed several significant events "oth on
financial as well as prodction fronts! ;43< for the first time in its years
of commercial prodction attained a "rea)2even level with a marginal
profit of 0s CC!&$ la)hs as against a net loss of 0s #E$ la)hs pro6ected at
the "eginning of the year! >ring #$%&2%# the company for the second
consective year, earned a net profit ?after ta9@ 0s I%!E# la)hs from its
operations! This year ;43< Ltd operations inclded manfactring of
very critical and sophisticated e(ipment to core indstries! Again in
#$%#2%E the company operations reslted in a net profit of 0s =&!#$ la)hs
as against a "dgeted loss of 0s E&G2 la)hs! Ma6or pending interest on
loan from G1I was cleared in this year! >ring #$%E2%C ;43< reached
#&&M target prodction and reslted in a net profit of 0s #&C!F# la)hs as
against the "dgeted loss of 0s $B la)hs! 7ith prestigios wor) orders
from <isa)hapatnam steel plant for spply of air and gas separation
plants ;43< crossed a target prodction and its operations reslted in a
net profit of 0s BFB la)hs!
The year #$%=2%F is treated to "e the dar) year for ;43<! 'ince its
entrance into threshold of profit arena, it cold not achieve its set motto
of "eyond "illion "arriers! 'in)ing of a ship carrying "l) of raw material
and components slac)ening demand for process e(ipment etc, reslted
in a short fall in prodction and hence company sffered a loss of 0s #F&
la)hs again in #$%F2%% ;43<s pro6ects were sccessflly fa"ricated
and its profits too) an pward trend and its operations reslted in 3AT of
0s E$& la)hs! It was e9pected to emerge an increasing trend in the profits
of ;43< for the year #$%%2%$! After #$%F2%% profits are in decreasing
trend! It got a loss of 0s B$& la)hs dring #$$B2$=! Amidst tight li(idity
conditions the company has made a net profit of 0s #!C# crores?"efore
ta9@ and 0s # crore after ta9 dring #$$F2$%, 0s #!EC crores 3;T! >etails
of trnover, profita"ility for the period from #$$F2$% to E&&B2&= are as
follows in E&&=2&F got a net loss of CIF&,in E&&F2&% it has a net loss of
B=&B! >ring E&&%2&$ the company earned a net profit of 0s $=C= La)hs
"ecase of e9traordinary income attained!?the company need not to pay
loan amont to government of India@

$ISTO!0 O* '$%)
0'?INLAA4'@
"escription
5696:99
566;:96 5667:6; 566<:67 566=:6< 566>:6=
I
GT1 ?Net of E9cise
>ty@
#E=I&!%I
%=F%!$& %EI#!%E #F#II!=% #B=%I!I$ #&C$E!%F
II <ale Added ? I2 II@
B%C=!%F
CBBB!IE #$F%!I& IB%=!== =%&#!=% II=C!F&
III Gross Margin?3;>IT@
CBC!&#
2%$C!E% 2%FCI!#$ 2I&$I!EC E%CE!#B 2#%!EF
I< Gross 3rofit?3;IT@
EIC!&$
2#&#$!&% 2$B%E!I% 2IEI&!C= E=B%!C% 2#$I!#$
< E9tra 1rdinary Income
FFI!FF
&!&& EC&&%!E%
&!&&
&!&& &!&&
<I
3rofit "efore Ta9
?3;T@
%FF!FE
2FB&!$$ $=$E!$C
2BB%%!%&
2CI=$!%F 2F#CF!$&
<II Income Ta9
&!#=
#&%!F& BF!I#
#=!&B
&!&& &!&&
<III 3rofit after Ta9 ?3AT@
%FF!B=
2%B$!=$ $=CB!BE 2B=&I!%B 2CI=$!%F 2F#CF!$&
Licensed to start constrction of plant at <isa)hapatnam in #$==, ;43<
confronted many o"stacles sch as water pro"lems, fre(ent power cts
"oth at initial stage as well as at the time when constrction was going
on! In spite of all those o"stacles the civil and strctral wor) was
completed to a ma6or e9tent "y the end of C#
st
March#$=F!The licensed
and installed capacity is ECE#& MT! The initial capital otlay "eing
0s!#F!B crores! Later after Completion of installation wor) ;43< had
received orders for the #
st
time from MG' ;1AA01 steel plant and
Fertili*er Corporation of India ltd!, for fa"rication and spply of
e(ipment! The factory at initial stages had sffered a loss in fa"rication
and delivery of e(ipment to cstomers de to delay in the procrement
of re(ired raw material! The factory was schedled to go into prodction
initially in Kly #$=F, "t de to "ac)log of some ncompleted
constrction wor) the Company went into commercial prodction only in
#$F#! 'ir A!C!3anth then the Minister of 'tate for steel and heavy
engineering inagrated the initial prodction in #$F& where some
prodction facilities had already "een esta"lished "y installation of
fa"ricating machinery li)e "ending rolls, welding e(ipment etc! >ring
the first year prodction, the company has incrred a loss of 0s EF!IF
la)hs mainly de to incidence of fi9ed e9penditre apportion2a"le to
3rodction li)e esta"lishment depreciation etc! The same loss position
was contined till #$F% 2 #$F$! The continos losses pt ;43< far from
profiteering companies!
In #$F$2%& ;43< has witnessed several significant events "oth on
financial as well as prodction fronts! ;43< for the first time in its years
of commercial prodction attained a "rea)2even level with a marginal
profit of 0s CC!&$ la)hs as against a net loss of 0s #E$ la)hs pro6ected at
the "eginning of the year! >ring #$%&2%# the company for the second
consective year, earned a net 3rofit ?after ta9@ 0s I%!E# la)hs from its
operations! This year ;43< Ltd operations inclded manfactring of
very critical and sophisticated e(ipment to core indstries! Again in
#$%#2%E the company operations reslted in a net profit of 0s =&!#$ la)hs
as against a "dgeted loss of 0s E&G2 la)hs! Ma6or pending interest on
loan from G1I was cleared in this year! >ring #$%E2%C ;43< reached
#&&M target prodction and reslted in a net profit of 0s#&C!F# la)hs as
against the "dgeted loss of 0s $B la)hs! 7ith prestigios wor) orders
from <isa)hapatnam steel plant for spply of air and gas separation
plants ;43< crossed a target prodction and its operations reslted in a
net profit of 0s BFB la)hs! Again in #$%F2%% ;43<s pro6ects were
sccessflly fa"ricated and its profits too) an pward trend and its
operations reslted in 3AT of 0s E$& la)hs! It was e9pected to emerge an
increasing trend in the profits of ;43< for the year #$%%2%$!
4owever, de to changes in the economy with entry of glo"al players in
#$$&s, increased private sector competition, introdction of L'TA
concept "y cstomers and Governments policy towards 3'5 i!e!
implementation of <0' and proposals for disinvestment, the Company
has sffered hge losses in E&&E2&C and E&&C2&I! ;y virte of this, entire
net worth of the company got eroded! This reslted for reference of the
company to ;IF0 in Agst E&&I!
<arios revival proposals tried after E&&I for reha"ilitation of the
company throgh otright sale, merging with other 3'5s, stand alone
revival etc! 4owever, de to change in Government policy after E&&B and
considering the potential of ;43<, G1I has finally made the company as
s"sidiary of ;4EL, a Navaratna 3'5!
+N O)E!)IE/ O* TO% M+N+,EMENT :
From May E&&% the company "ecame s"sidiary of ;4EL! At Corporate
level the companys affairs are managed "y the ;oard consist of fll time
Managing >irector and CM>, ;4EL as the chairman of the "oard! In
addition, # E9 officio >irector from >4I ?administrative ministry@ D E
fnctional >irectors also constitte the ;oard!

Technology D Mar)et Isses:
The present plant D machinery D infrastrctre tili*ing "y the company
is of C& years old and have "een flly depreciated! At present the
internal lead time is high when compare to competitors! 'imilarly in the
areas of engineering the lead time re(ired for design and drawings is to
"e redced which re(ires implementation of sophisticated process
design software!
+s per rehabilitation schee approved by ,OI? '$EL 3ill invest !s
5@9 crores for oderniAation of the plant in the years 5699:95 to
569@:9B.
%roduct "iversification
The company has nderta)en several E3C contracts on E3CGL'TA "asis
at varios locations in India and a"road! The Company 0D> >epartment
has developed technology for manfactre of compact 4eat E9changer
for the light Com"at Aircraft ?LCA@ nder the fnding "y Aeronatical
>evelopment Agency ?A>A@! '$%) no3 3ith the technology
acCuired fro '$EL D$olding CopanyE? diversified into po3er
plant eCuipent? naely $!S, 'oilers? "earators etc.
!evival and Turnaround of the copany&
On 09.05.2008, the company was formally taen o!er "y BHE#, a
na!aratna $%&, as per the re!'!al scheme sanct'one( "y )OI.
The salient features of revival schee are as belo3.
?As per the Govt! of India, Ministry of 4eavy Indstries D 3"lic
Enterprises, >epartment of 4eavy Indstry, letter F!No! # ?##@ G E&&I .
3E ?I<@ >ated &F!&B!E&&%@
#! G1I will waive and write off loan and interest amonting to
0s!I#B!=# Crs!
E! G1I to provide garantee amonting to 0s!EB& Crs to ena"le
;43< to raise "onds from the domestic mar)et s"6ect to the
conditions as intimated vide this office letter of even no! dated
E$!&I!E&&%
C! The entire paid p capital of ;43< to the tne of 0s! CC!F$ Crs
wold "e transferred to ;4EL at a notional vale of 0e! #G2!
I! ;4EL will ta)eover "oth the assets and lia"ilities ?inclding
contingent lia"ilities@ of ;43< as a going concern!
B! The ta)eover will entail the following concessions from the
=! Government of Andhra 3radesh:
a@ Transfer of title of land measring C%=!FC acres in possession of
;43< as gift along with waiver of registration and stamp dty!
"@ 7aiver of 'ales Ta9 arrears amonting to 0s!IE!#= Crs
c@ 7aiver of NALA Ta9 of 0s!IC la)h and
d@ 7aiver of des towards 7ater Ta9, 3roperty Ta9, and <acant
Land Ta9 of 0s!C!$= Crs!
F! The consortim of ;an)ers has agreed for 1ne2Time2'ettlement
;4EL may ta)e timely advantage of the offer!
%! ;4EL will infse at least 0s!CI Crs as additional E(ity Capital
and ade(ate fnds for p2gradation of manfactring facilities,
Cape9 and 7or)ing Capital!
$! ;4EL will ta)e over ;43< with all its employees!
#&!>4I will assist ;4EL in settling the dispted demands relating to
e9cise, cstoms, income2ta9 etc!, on a case to case "asis!
##!;4EL will ta)e2over ;43< as its s"sidiary and ta)e all possi"le
steps for its revival! The matter regarding reconstittion of the
;oard of >irectors is nder consideration of the competent athority!
The Sanctioned !ehabilitation:cu:TaFe:over Schee&
The 0evival 'cheme envisages ta)e2over of ;harat 4eavy 3late
and <essels Limited ?;43<@, a Government of India Enterprise and
'"sidiary of ;harat Hantra Nigam Limited ?nder The Ministry of
4eavy Indstries and 3"lic Enterprises@ "y ;harat 4eavy Electricals
Limited ?;4EL@, a Government of India Enterprise ?also nder the
Ministry of 4eavy Indstries and 3"lic Enterprises@ as its s"sidiary! As
per the scheme, the entire nderta)ing of ;43< shall "e transferred to
;4EL as its s"sidiary!

The entire paid2p capital of 0s CC!F$ Crs wold "e
transferred to ;4EL at a nominal vale of 0e #G2 ! ;4EL will ta)e2over
"oth assets and lia"ilities ?inclding contingent lia"ilities@ of ;43< as a
going concern! ;4EL will ta)e2over ;43< with all its employees!
;4EL will infse at least 0s CI Crs as additional E(ity Capital and
ade(ate fnds for p2gradation of manfactring facilities, CA3EL and
wor)ing capital! A"ove cited +'anctioned 0eha"ilitation.over2'cheme-
has "een fond accepta"le to all the employees and secred creditors!
+bove schee 3as approved by 'I*! in October 5696!
Synergy of 'usiness bet3een '$EL and '$%)&
In addition to improvement in present "siness of ;43<, the ta)e2over
"y ;4EL will have the following advantages:
Managerial and mar)eting spport from ;4EL!
>iversification into 4igh 3ressre 3ower ;oilers!
Technological 'pport for new prodcts!
Financial 'pport for p . gradation of manfactring
facilities, Cape9 and 7or)ing Capital 0e(irements!
Ensred flow of new orders!
'ynergy "etween the two organi*ations in view of similarity of
prodctsGtechnologies!
;siness advantage de to e9cellent ;rand Image of ;4EL!
*actors for revival of '$%) through taFeover by '$EL&
;4EL on its part has wor)ed ot the via"ility of the ;43< ta)eover,
ta)ing into consideration the points:
;4EL to enhance the capa"ilities D capacities of ;43< to "ild pon its
strengths in the e9isting "siness of spplying process e(ipment to
sectors li)e 1il, 3etrochemicals, Fertili*ers etc! In addition, ;4EL plans
to enhance ;43<s capa"ilities D capacities in the area of indstrial
"oilers, heat e9changers, condensers etc!In capital investment of 0s! ECB
Crs is envisaged for the p2gradation of re(ired facilities! E9pected
growth in the mar)et for ;43<s prodcts , especially in process
e(ipment and cryogenics! As per Indstry analysis, orders worth 0s!
#F&& Crs per annm are e9pected in the ne9t five years from oil
0efineries and 3etrochemical pro6ects to flow to the engineering D
fa"rication indstry!
7ith a mar)et share of ;43< of #BM . #%M in the past in this segment,
;43< can "ecome more confident in addressing this mar)et overcoming
its financial constraints "y participating in some of the tenders with
;4EL spport! As sch, ;43<s financial wea)ness wold "e mitigated
once its restrctring is completed and ;4EL ta)es over its fnctioning!
The Captive 3ower 3ro6ects ?C33@ and Indstrial "oilers mar)et segment
is e9pected to grow from arond 0s! #%&& Crs in E&&F2&% to an estimated
level of 0s! EI&& Crs in ne9t five years "ased on pro6ected #E M
indstrial growth in the coming years! ;43< can target a share of EBM .
C&M of this mar)et, provided mar)et e9pectations on delivery and price
are flfilled! Crrently, the Trichy nit of ;4EL is constrained in
targeting the indstrial "oilers mar)et de to heavy load of "oiler
orders from the tility segment! In this regard, ;43< can "e developed
as a dedicated center for indstrial "oilers "y ;4EL! The sales trnover
from this segment has "een pro6ected to reach to level of 0s, %&& Crs "y
the fifth year after fnctional ta)e over "y ;4EL, "ased on factors li)e
increased volme, "etter financial capa"ilities leading to lower
wor)ing capital "orrowing costs etc!
;43<: AN 1<E0<I E7 !
#! INT01>5CTI1N
Incorporation of the Company : #$==
3rimary 1"6ective :
!
Technical Colla"oration provided "y : 'A1>A,
C*echoslova)ia!
Commencement of Constrction : #$=%
Completion of Constrction : #$F#
Commencement of 3rodction : #$F#
Initial 3ro6ect Cost : 0s! #F!B crores
Initial 3rodct Mi9 : 4eat E9changers,
colmns, 3ressre vessels,
Technological
'trctres, 3iping
Installed Capacity : EC, E#& M!T!
Trnover for the year E&&$2#& : 0s! #&I crores
E! 0E'150CE'
301>5CTI1N FACILTIE'
Factory Area : #$F Acres
Total Covered Area : $&,&&& s(! Meters
Covered area of 3rodction 'hops : B=,&&& s(! Meters
3ower 0e(irement : C,&&& A7 from
A3'E;
To manfactre cstom "ilt
Capital E(ipment for the
process of Indstries sch as
Fertili*ers, 3etrochemicals,
3etrolem 0efineries, Chemicals
etc!
No! of Ancillary 5nits : Arond a >o*en
IM310TANT MAC4INE0H
The ma9imm crane lifting capacity is #E& tones, "t loads p to EB&
tones can "e lifted with improvisation! Ma9imm 0olling capacity is
=&mm in cold condition and #F&mm in hot condition! ;43< has the
largest heat treatment frnace in India, the si*e "eing Meters width, B!B
meters height and C=!B meters long! 1ne more frnace of E&& Ton
capacity and #Bmtrs! ;ogie length has "een added! 1ther critical
e(ipment availa"le with ;43< are >eep >rawing 4ydralic 3ress of
#=&&T capacity 'ingle 'pindle CNC >eep hole >rilling Machine with
Gn >rilling attachment and ENos! CNC drilling machines which can
employ conventional drills! Another CNC >eep hole drilling machine has
"een installed recently "y 4MT!A nm"er of 7elding 0otators of
capacity p to EB& Tones! 7elding e(ipment sch as manal Arc, '"
merged Arc, TIG, MIG, 3lasma inclding the latest high prodctive
welding e(ipment sch tne head s"merged arc welding, and ;i2
cathode TIG welding !T"e fining Machine!A nm"er of vertical and
hori*ontal "oring machines with a ma9imm capacity of B meters dia and
E&&mm spindle dia respectively! >ifferent types of Non2destrction
Testing E(ipment! 7ell e(ipped 3hysical and Chemical La"oratories!
Metrology section etc! 4CL 'per2Mini Compter, Two Mini compters
B= CA> Machines and ##% 3ersonal compters!
EM3L1HEE 7ELFA0E AMENITIE'
Township Area 2 #B# Acres
No! of 8arters 2 ##$E
E& "ed 4ospital
3rotected 7ater 'pply
5ndergrond drainage system
English medim school with C;'E 'ylla"s
Telg medim school with A3 'tate 'ylla"s
'pecial school for mentally handicapped children!
<ocational training centre for mentally handicapped
Commnity center for cltral activities D sports . open air theatre
facilities
Aalyana Mandapam!
;y a"sor"ing )now2how from varios world renowned colla"orators,
;43< pgraded its stats from a mere fa"ricator of process e(ipment to
that of an engineering company of international repte!
301KECT' 1F NATI1NAL IM310TANCE ELEC5TE>G5N>E0
ELEC5TI1N
'!N1! C5'T1ME0 301KECTGE85I3MENT
#! I1CL, 3anipat 4ydro crac)er reactors2CNos
E! I1CL, 3anipat 0eactor, 0egenerator D 1ffice
Cham"er
C! I1CL, 3anipat 0eformer D 740 3ac)age
I! I1CL, Mm"ai #B& MT Capacity L3C "llets
B! I1CL, Chennai 'phere
=! ;1AA0> 'TEEL
3LANT, ;o)aro
Argon 0ecovery nit
F! N0L, Nmaligarh Air Fin coolersG'' Clad <essels,
'pheres etc!
%! 43CL, <isa)hapatnam C>5 4eater with A34
'ystemG<>5 4eater
$! 43CL, <0E3 . II
<isa)hapatnam
CladGC' ColmnsGC' heat
E9changers etc
#&! 43CL, <isa)hapatnam Co2"oiler
##! 43CL, <isa)hapatnam 0evamping of B&T34 oil D gas
fired "oiler
#E! 43CL, Mm"ai B& T34 ;oiler
#C! ;3CL, Mm"ai Nitrogen 3lant
#I! 4yndai 4eavy
Indstries, New >elhi
Cryo Nitrogen plant
#B! 'pace application centre,
Ahmeda"ad
B&Bm >ia thermal vacs system
#=! TEC4NIM1NT IC;
LT>! Mm"ai
Nitrogen plant
#F! 1'7AL C4EMI
FE0TILI/E0 LT>2
3aradeep
7aste 4eat L3 "oilers
As a part of total (ality management program, ;43< has ac(ired I'1
$&&# certification dring the year #$$C2$I, particlarly to "oost p its
e9ports and to "e competitive in the international mar)et!
0e2certification of I'1 $&&# has "een o"tained in 'eptem"er,
#$$=!
In recognition of high standards of or (ality, confederation of
Indian indstry ?CII@, 'othern 0egion, A3 presented the 8ality
Award!
0E'EA0C4 D >E<EL13MENT
0esearch D >evelopment department was esta"lished in #$FB and is well
e(ipped with high tech e(ipment to cater to Applies 0esearch and
3rodct >evelopment! 0D> has developed #C= 3ro6ects so far! 'ome of
the prodcts commerciali*ed inclde:
Titanim Anodes
Titanim Air ;ottles
Cryogenic <ats
Individal 8ic) Free*ing 5nit
'per Inslated 3iping!
'per Inslated Cryogenic 'torage tan)s
>!M! 7ater 3lants
A prestigios order for >evelopment of 4eat E9changers for Light
Com"at Aircraft ?LCA@ 3hase2II has "een received from Aeronatical
>evelopment Agency, ;angalore!
'ome of the Awards received for e9cellence in 0D> inclde:
CI' Award for 0D> achievement in #$$E2$C!
ANCILLA0I'ATI1N
;43< has developed some ancillary indstries in its vicinity to cater to
its re(irements! Apart from offering sfficient wor) load to these
indstrial nits, ;43< has "een assigning wor) to a nm"er of small
sector indstries! ;43< provides material, transportation and inspection
services to the Ancillaries to help them rise to its (ality re(irements!
30E'ENT 'T0ENGT4'
Financial, Managerial, Technical "ac)2p and spport of Navaratna
3'5, ;4EL
E9cellent >esign D Engineering capa"ilities!
'tate .of .the . Art Manfactring facilities!
Accomplished image as a spplier of 8ality 3rodcts in the
domestic and international mar)ets!
4igh degree of cstomer confidence!
Technological tie2p arrangements!
7ell trained and (alified wor) force and Engineers!
'ond wor) cltre D harmonios Indstrial 0elations!
E9tensive compteri*ation!
Capa"ility to spply 3ro6ects D 'ystems on trn)ey "asis!
3ro6ect Management ')ills!
3LAN' D 'T0ATEGIE'
To grow as an Engineering, 3rocrement and Constrction
Company!
To enlarge E9port ;siness!
To resort to e9tensive compteri*ation and Atomation for
redction of cycle time, improvement of (ality and redcing
costs!
To forge strategic "siness alliances with International Companies
to derive technological and mar)eting advantages!
To strive for continos pdating of technologies to "e on par with
International Companies!
To focs on 4man 0esorces >evelopment!
To change the wor) cltre to "e compati"le with mar)et demands!
C1N'T0AINT'
Non compteri*ation G No E03
4igh average age of employees G no e9ective recritment since
#$$%
7or)ing capital constraints
0eplacementGpdating of machinery
COL#MNS
!E*INI!IES
COM'#STION S0STEM
T!#N80 %+8+,ES
C$+%TE! III
T$EO!ITIC+L *!+ME /O!8 O* T$E ST#"0
Meaning
Generally a fnd is interpreted as wor)ing capital! Ths, fnds flow is
change in wor)ing capital! 4ence, the changes in wor)ing capital is
called as flow, the flow may "e inflow or otflow! The term wor)ing
capital has two concepts, gross wor)ing capital and net wor)ing capital!
Gross wor)ing capital is the total of all crrent assets, whereas net
wor)ing capital is the e9cess of crrent assets over crrent lia"ilities!
Fnd flow statement is prepared and interpreted on the "asis of net
wor)ing capital concept! Fnds flow statement measres and presents in
an analytical manner the smmari*ed version of the nmeros flows of
fnds for a specified period!
Iportance of funds flo3 stateent
Fnds flow statement is an important toolN it helps in the planning,
deployment and controlling of fnds year after year! The following are
the "enefits of fnds flow statement! It provides a detailed analysis and
nderstanding of changes "etween two "alance sheet dates! It shows the
fnd mo"ili*ation and canali*ation! It helps to ta)e fnd pro6ections for
the ftre! It is a sefl techni(e to measre the (antm fnds needs for
efficient operation of a firm!
The "asic prpose of preparing the statement is to have a rich into the
financial operations of the concern! It analyses how the fnds were
o"tained and sed in the past! In this sens, it is a vala"le tool for the
finance manager for analy*ing the past and ftre plans of the firm and
their impact on the li(idity!

4e can dedce the reasons for the im"alances in ses of fnds in
the past an ta)e necessary corrective actions! In analy*ing the financial
position of the firm, the Fnds Flow 'tatement answers to sch (estions
as2
9. 7hy were the net crrent assets of the firm down, thogh the net
income was p or vice versaO
5. 4ow was it possi"le to distri"te dividends in a"sence of or in
e9cess of crrent income for the period O
@. 4ow was the sale proceeds of plant and machinery sed O
B. 4ow was the sale proceeds of plant and machinery sed O
>. 4ow were the de"ts retired O
=. 7hat "ecame to the proceeds of share isse or de"entre isse O
<. 4ow was the increase in wor)ing capital financed O
7. 7here did the profits goO
Thogh it is not an easy 6o" to find the definite answerers to sch
(estions "ecase fnds derived from a particlar sorce re rarely sed
for a particlar prpose! 4owever, certain sefl assmptions can often
"e made and reasona"le conclsions are sally not difficlt to arrive at!
D5E Evaluation of the *irGs *inancing. 1ne important se of the
statement is that it evalates the firmJ financing capacity! The analysis of
sorces of fnds reveals how the firmJs financed its development pro6ects
in the past i!e!, from internal sorces or from e9ternal sorces! It also
reveals the rate of growth of the firm!
?@E +n Instruent for +llocation of !esources. In modern large scale
"siness, availa"le fnds are always short for e9pansion programmes and
there is always a pro"lem of allocation of resorces! It is, therefore, a
need of evolving an order of priorities for ptting throgh their e9pansion
programmes which are phased accordingly, and fnds have to "e
arranged as different phases of programmes get into their stride! The
amont of fnds to "e availa"le for these pro6ects shall "e estimated "y
the finance with the help of Fnds Flow 'tatement! This prevents the
"siness from "ecoming a helpless victim of nplanned action!
DBE + Tool of Counication to Outside /orld. Fnds Flow
'tatement helps in gathering the financial states of ;siness! It gives an
insight into the evoltion of the present financial position and gives
answer to the pro"lem Jwhere have or resorces "een movingJO In the
present world of credit financing, it provides a sefl information to
"an)ers, creditors, financial, it provides a sefl informations and
government etc! regarding amont of loan re(ired, its proposes, the
terms of repayment an sorces for repayment of loan etc! the financial
manager gains a confidence "orn ot of a stdy of Fnds Flow 'tatement!
In fact, it carries information regarding firmJs financial policies to the
otside world!
D>E *uture ,uide. An analysis of Fnds Flow 'tatements of several
years reveals certain vala"le information for the financial manager for
planning the ftre financial re(irements of the firm and their natre too
i!e! 'hort term, long2term or mid term! The management can formlate its
financial policies "ased on information gathered from the analysis of sch
statements! Financial manager can rearrange the firmJs financing more
effectively on the "asis of sch information along with the e9pected
changes in trade p paya"les and the varios accrals! In this way, it
gides the management in arranging its financing more effectively!
*und *lo3 +nalysis
Fnd may "e interpreted in varios ways as
?a@ Cash,
?"@ Total crrent assets,
?c@ Net wor)ing capital,
?d@ Net crrent assets!
For the prpose of fnd flow statement the term means net wor)ing
capital! The flow of fnd will occr in a "siness, when a transaction
reslts in a change i!e!, increase or decrease in the amont of fnd!
According to 0o"ert Anthony the fnds flow statement descri"es the
sorces from which additional fnds were derived and the ses to which
these fnds were pt! In short, it is a technical device designed to
highlight the changes in the financial condition of a "siness enterprise
"etween two "alance sheets!
"ifferent naes of *und:*lo3 Stateent
A Fnds 'tatement
A statement of sorces and ses of fnd
A statement of sorces and application of fnd
7here got and where gone statement
Inflow and otflow of fnd statement
1"6ectives of Fnd Flow 'tatement
The main prposes of FF' are .
To help to nderstand the changes in assets and asset sorces
which are not readily evident in the income statement or financial
statement!
To inform as to how the loans to the "siness have "een sed!
To point ot the financial strengths and wea)nesses of the "siness!
*orat of *und *lo3 Stateent Sources +pplications
Fnd from operation
Fnd lost in operations
Non2trading incomes
Non2operating e9penses
Isse of shares 0edemption of redeema"le preference share
Isse of de"entres
0edemption of de"entres
;orrowing of loans 0epayment of loans
Acceptance of deposits
0epayment of deposits
'ale of fi9ed assets
3rchase of fi9ed assets
'ale of investments ?Long Term@
3rchase of long term investments
>ecrease in wor)ing capital
Increase in wor)ing capital
Steps in preparation of *und *lo3 Stateent.
#! 3reparation of schedle changes in wor)ing capital ?ta)ing crrent
items only@!
E! 3reparation of ad6sted profit and loss accont ?to )now fnd from or
fnd lost in operations@!
C! 3reparation of acconts for non2crrent items ?Ascertain the hidden
information@!
%reparation of the fund flo3 stateent.
There is a plenty of "siness transactions which reslts in flow of fnds
or which case changes in wor)ing capital!
For this prpose, all the "siness transactions classified into ?a@ those
transactions which increase fnds i!e! sorces of fnds ?"@ those
transactions which decrease fnds i!e! application of fnds! Identification
of transactions casing for increase or decrease in fnds is essential for
fnds flow statement analysis! The following transactions do not affect
the flow of fnds! These are
#! Transactions "etween two crrent assets! ?For e9! conversion of
stoc) into cash@
E! Transactions "etween two crrent lia"ilities!
C! Transactions "etween crrent assets and crrent lia"ilities!
I! Transactions "etween two non2crrent or fi9ed assets!
B! Transactions "etween two long2term lia"ilities!
=! Transactions "etween non2crrent assets and long2term lia"ilities!
It is clear from a"ove, transactions "etween a crrent accont ?non2
crrent accont@ and another crrent accont ?non2crrent accont@ does
not affect flow of fnds!
The first three is connected with crrent accontN the last three "elongs to
non2crrent accont! As against this concept, any transaction "etween a
crrent accont and a non2crrent accont affect fnds! These areN
#! Transaction "etween a long term lia"ility and a crrent asset!
E! Transaction "etween a long term lia"ility and a crrent lia"ility!
C! Transaction "etween a non2crrent asset and a crrent asset!
I! Transaction "etween a non2crrent asset and a crrent lia"ility!
Step : 9& %reparation of Schedule of Changes in /orFing Capital
It reveals the difference "etween the crrent assets and lia"ilities!
Increase in crrent assets and decrease in crrent lia"ility will increase
the wor)ing capital amont! At the same time decrease in crrent assets
and increase in crrent lia"ility will decrease the wor)ing capital amont
St!tement or 5-e#ule of -!n$e5 in "or?in$ -!6it!l
??????????????????????????????????????????????????????????????
???????
,articu8ars ,revious year .urrent year 0ffect on
5orkin+ capita8
6ncrease
ecrease
??????????????????????????????????????????????????????????????
???????
Current A55et5
@ .ash in hand
@ (i88s receivab8e
@ Sundry debtors
@ Temporary investments
@ Stocks A inventories
@ ,repaid e=penses
@ Accrued incomes
??????????????????????????????????????????????????????????????
???????
Tota8 current assets
??????????????????????????????????????????????????????????????
???????
??????????????????????????????????????????????????????????????
???????,articu8ars ,revious year .urrent year 0ffect on
5orkin+ capita8
6ncrease
ecrease
??????????????????????????????????????????????????????????????
???????
Current li!Bilitie5
@ (i88s payab8es
@ Sundry creditors
@ (ank overdraft
@ Short term advances
@ ividends payab8es
@ ,rovision for ta=ation
??????????????????????????????????????????????????????????????
???????
Tota8 current /iabi8ities
??????????????????????????????????????????????????????????????
???????
7orkin+ capita8 B .AC ./
Net in-re!5e or #e-re!5e in "or?in$ -!6it!l C
Step 2 5& %reparation of +djusted %HL +ccount 2 to find fund fro
operations
;ecase is the sorce of fnd and will show in fnd flow statements
sorce side! 'o "efore ma)ing fnd flow statement, we mst ma)e
statement showing the fnd from operation!
1peration means "siness activity and fnd from operation means profit
from "siness activity! 'o, yo will easy nderstand that profit from
"siness activity "etween two acconting period mst "e the sorce of
fnd!
St!tement of fun# from o6er!tion5 D A#>u5te# PDL A--ount
??????????????????????????????????????????????????????????????
???????
.8osin+ ba8ance of profit and 8oss account or retained earnin+s
as +iven in the (a8ance sheet
??????????????????????????????????????????????????????????????
???????
ADD+ non Efun# !n# non o6er!tin$ item5 "i- !;e Been !lre!#7
DeBite# to 6rofit !n# lo55 !--ount
3. epreciation
1. AmortiDation of fictitious and intan+ib8e assets
@ +ood5i88
@ patents
@ trade marks
@ pre8iminary e=penses
@ discount on issue of shares
E. Appropriation of retained earnin+ such as
@ Transfer to +enera8 reserve
@ ividend e9ua8iDation fund
@ Transfer to sinkin+ fund
@ .ontin+ency reserve etc.
F. /oss on sa8e of any non current or fi=ed assets such as
@ /oss on sa8e of 8and and bui8din+
@ /oss on sa8e of machinery
@ /oss on sa8e of furniture
@ /oss on sa8e of 8on+ term investments
G. ividends inc8udin+
@ 6nterim dividend
@ ,roposed dividend )6f it is an appropriation of profit and not taken as current
8iabi8ity*
H. ,rovision for ta=ation )if it is not taken as current 8iabi8ity*
I. Any other non fund A non operatin+ items 5hich have been debited to ,A/
account
Tota8 )A*
LESS+ Non EFun# or non o6er!tin$ item5 "i- !;e !lre!#7 Been -re#ite# to
6rofit !n# lo55 !--ount
3. ,rofit or +ain from the sa8e of non current A fi=ed assets such as
@ ,rofit on sa8e of 8and and bui8din+
@ ,rofit on sa8e of p8ant and machinery
@ ,rofit on sa8e of 8on+ term investment etc.
1. Appreciation in the va8ue of fi=ed assets such as increase in the va8ue of 8and if
it has been credited to profit and 8oss account
E. ividends received
F.0=cess provision retransferred to profit and 8oss account or 5ritten back .
G. Any other non operatin+ item 5hich has been credited to profit and 8oss account
H. &penin+ ba8ance of profit and 8oss account or retained earnin+s as +iven in the
ba8ance sheet
???????????????????????????????????????????????????????????????????
????????
Tota8 )(*
???????????????????????????????????????????????????????????????????
????????
Fun#5 re-ei;e# from o6er!tion or Bu5ine55 !-ti;itie5 C tot!l ,A. E Tot!l ,B.
???????????????????????????????????????????????????????????????????
????????
Step 2 @& *unds *lo3 Stateent for the year endingII
+E Source of funds
#!Fnd from operation ? "alance of second step @
E!Isse of shares capital
C!Isse of de"entres
I!0aising of long term loans
B!0eceipts from partly paid shares , called p
=!Amont received from sales of non crrent or fi9ed assets
F!Non trading receipts sch as dividend received
%!'ale of investments ? Long term @
$!>ecrease in wor)ing capital as per schedle of changes in wor)ing
capital
PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
Total
'E +pplications or uses of funds
JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
#! Fnds lost in operations ?;alance negative in second step@
E! 0edemption of preference share capital
C! 0edemption of de"entres
I! 0epayment of long term loans
B! 3rchase of long term loans
=! 3rchase of long term investments
F! Non trading payments
%! 3ayment of ta9
$! 3ayment of dividends
#&! Increase in wor)ing capital ?As per positive "alance of #st step@2
PPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPPP
Total
PROFIT AND LOSS ACCOUNT
De5-ri6tion 08/8=// 088<=/8 088A=8< 0889=8A 088@=89
6 In-ome
Turnover
3EHJI.G
F
32FE3.E
1 KFEJ.FG 3K21J.JH 3K2EH.2H

AccretionA ecretion
)F-A76,*
C32G.IK
C32G1.3F GJI.IK
HH2.I1
C3EHF.JE
/ess < 0=cise uty JG2.J1 I22.1K IJG.F3 3GFH.22 JKH.HF
'TO ,Net of E:-i5e Dut7.
/0@38%A
3 A@9A%<8 A03/%A0 /9/33%@A /4@A3%3<

66 Dire-t E:6en#iture
%a5 'ateria8 > SubC.ont. H1G1.3I F321.JH FHEJ.JI 321G1.G2 HF1E.3E
0rection 0=penditure 12J.EI IG2.H1 3EHH.EJ 12KK.1G 112I.1K
,o5er > Fue8 EF1.FE 1HJ.J 1GI.2H 13I.1I 1G1.F2
Tota8 66 @A82%<9 4/02%3A @0@2%30 /044A%80 AAA0%A/
666 V!lue A##e# , I= II. 4A2@%A9 2444%30 /<9A%38 34A@%@@ @A8/%@A

6V In#ire-t E:6en#iture
0mp8oyee %emuneration FHH3.12 FEJF.KF H112.HE EE21.KE E2JJ.3I
'anufacturin+ 0=penses F3I.JI 12K.HF FEE.FG F3J.FH GK2.2G
&ther 0=penditure H31.J1 EH2.2J EKG.2H EJG.2K FHG.FG
,rovisions 1EH.2G 3F.FG FE12.GE G22H.2K GG1.3H
/ess< &ther %evenues 444.28 529.32 647.08 442.56 727.30
Tota8 6V 43A2%A@ 333A%98 /89/0%4< A@A8%A< 2<@<%42

V 'ROSS MAR'IN ,PBDIT. 242%8/ =A<2%0A =A923%/< =38<3%02 0A20%/4
V6
6 0,%0.6AT6&" 32J.J1 31G.K2 KFK.1J
3FH.3E
3IE.II
'ROSS PROFIT ,PBIT. 032%8< =/8/<%8A =<4A0%3A =3038%2@ 0@4A%2A
V6 6nterest
L-ovt 2.22 2.22 2.22 FFJ2.H1
&thers 3F2.3F C1HK.2J 332E.HF 32JH.KF 33EF.E3

V6
66 %0 2.22 2.22 1GHE.KI
H21.JI
H21.JI
6M ,rior period Adjustments 2.22 2.22 CHG.EH EG3.EI JJ.HG
M PROFIT ,F. D LOSS ,=. /80%<4 =948%<<
=
/22/4%24 =44AA%A8 =23@<%A9
M6 6nterest A &thers 7aived 2.22
0=tra &rdinary items IIF.II 2.22 1E22K.1K 2.22 2.22
M6
6
"et ,rofit A /oss before Ta=
),(T* KII.I1 CIG2.JJ JHJ1.JE CGGKK.K2 CEFHJ.KI
M6
66 6ncome Ta= 2.3H 32K.I2 GI.F3
3H.2G
2.22
M6
V
Net Profit D Lo55 !fter T!:
,PAT. A99%4@ =A4<%@< <@24%40 =4@83%A4 =23@<%A9
BALANCE SHEET
De5-ri6tion 08/8=// 088<=/8 088A=8< 0889=8A 088@=89
SOURCES OF FUNDS
Share !o8ders Funds EEIJ.IK EEIJ.IK EEIJ.IK EEIJ.IK EEIJ.IK
%eserves > Surp8us 1.23 1.23 1.23 1.23 1.23
Secured /oans 2.22 3KE.33 2.22
13K3G.1
F
13IEF.J
1
UnCSecured /oans
1H2FK.F
2
1HKJI.H
F
1EKEJ.H
K
FE2EE.3
K
F2K1G.3
2
Tot!l
0<328%/
<
283@0%4
3
0900/%3
9
@A028%0
/
@4<3/%A
/
APPLICATION OF FUNDS


Fi=ed Assets )inc8 .apita8
76,* K3GE.FI K2HE.GH IJJJ.FE
IJII.31
IJ11.21
Accumu8ated epreciation II31.GI IH21.HG IFIH.KG HH1K.GG HFKH.2J
Net Fi:e# A55et5 338%<8 3@8%</ 400%4A /23A%49 /324%<2
In;e5tment5 /%2/ /%2/ /%2/ /%2/ /%2/
Current A55et5
6nventory G1GI.2J FGHJ.2H GEFI.K1 FKFI.J2 FGG2.23
ebtors JGGJ.H1 JE12.J3 HFH1.KE JGF3.FH I3FF.GE
.ash I12.JJ 3GHF.2F FF2.HJ GKG.GI 3FHG.1H
/oans K322.2F I13E.2J K22H.IE
332EJ.3
F HGJH.KF
Current A55et5
02@29%9
3
00@@9%/
8
0804A%8
9
0@8/3%8
9
/<94@%@
3
Le55+ Current Li!Bilitie5 1
Pro;
Sundry .reditors 1KFG.E3 E3KE.K2 3K33.J2 33EJ.1J 3333.JI
eposits KHE.3G K2G.EJ KF1.3E I1F.HK H12.I1
Advance from .ustomers GHIH.2I F3HF.H3 FG1E.E1 JEJF.E3 1G22.G1
&ther /iabi8ities KJ32.HK JHEK.I1
3332J.E
G
I31E.KK
HK22.K2
Current Li!Bilitie5
/A0<4%0
/
/99<0%4
0
/A0A@%9
8
/A2A0%/
@
//823%8
/
,rovisions 1I31.1K 132J.GG 3HFJ.EJ 3K2H.J2 1I3.GF
Current Li!Bilitie5 1
Pro;i5ion5
0/889%3
<
/<<80%8
9
/<<2@%8
<
08/A<%8
@
//284%4
4
7orkin+ .apita8 ).AC./* 0@28%04 09@4%82 20/%<A 4A04%8/ A34/%8<
'isc. 0=p. the e=tent not
5ritten off 8%88 8%88 8%88
04@2%A9
2/@@%A3
Accumu8ated /oss
1HEGI.I
E
09024%0
<
0@294%@
8
4A3</%3
4
40AA@%@
3
Tot!l
0<328%/
<
283@0%4
3
0900/%3
9
@A028%0
/
@4<3/%A
/
CASH FLOW STATEMENT
Det!il5 E3.2E.33
E3.2E.3
2
E3.2E.2J E3.2E.2K E3.2E.2I
C!5 Flo" from O6er!tin$
!-ti;itie5
"et ,rofit for the year KII.GH CKGJ.HJ JHEG.G1
C
GH2F.KF CEFHJ.KI
Adjustments for <
epreciation char+e for the
year 32J.J1 31G.K2 KFK.E2 3F1.FH 3EF.GF
A#>u5tment5 for +
6ncrease A ecrease in
inventory CHKK.2E IIK.IH CFJJ.J1 C1JI.KJ JK3.FK
ecrease in /oans >
advances CKKH.JG I3J.H3 E2E1.F3 EKFE.11 JJ3.EJ
6ncrease A ecrease in
ebtors C1EK.I3
C
1IKF.2
G E2IK.HE
C
1EJH.JE 3IE.J2
6ncrease in effered %evenue
0=penditure 2.22 2.22 1GHE.KI H21.JI H3G.JK
6ncrease A ecrease in
/iabi8ities G21.HJ CFJF.3K CJG.FH CJEI.EI CH1K2.GJ
6ncrease A ecrease in
,rovisions H21.IE FH2.3H C3GI.G3 3GEG.EI 3J.IF
Net -!5 flo" from
O6er!tin$ !-ti;itie5 09<%0/
=
0842%4
< /A384%A3
=
2//2%8/ =@A22%32

,urchase of Fi=ed Assets CKJ.J3 CHF.3E C11.E3 CGG.2J C2.1J
6ncrease A ecrease in
investments 2.22 2.22 2.22 2.22 2.22
C!5 flo" from in;e5tin$
!-ti;itie5 =A<%</ =@3%/2 =00%2/ =44%8< =8%0<

6ncrease in Secured /oans C3KE.33 11.EE
C
13K3G.1F K2.EE 3K2K.GH
6ncrease in Unsecured /oans CKFJ.1F E13K.I C 112K.2K GHGE.IG
F 3J3JE.G2
-&6 /oan 7aiver 11FK2.EE
C!5 flo" from fin!n-in$
!-ti;itie5
=/820%
24
203/%8
9
=
/A40A%3/ 00AA%3/ 93@0%2/
Net in-r% in -!5 !n# -!5
eGui;!lent5 =A32%84
//02%2
4 =/33%AA =A9<%@< @0A%4<
.ash and cash e9uiva8ents
&( 3GHF.2F FF2.HJ GKG.GI 3FHG.1H KEH.HI
.ash and cash e9uiva8ents
.( I12.JJ
3GHF.2
F FF2.HJ GKG.GI 3FHG.1H
De5-ri6tion 08/8=// 088<=/8 088A=8< 0889=8A 088@=89
3
irect e=p as a N of -T&
)net of 0* GE.KE GJ.2E IH.22 IE.1G GH.HE
1
Va8ue added as a N of
-T& )net of 0* FH.3I F2.JI 1F.22 1H.IG FE.EI
E ,(6T as a N of Turnover 1.GK CK.GH C32E.FJ C11.I3 3G.I2
F ,AT as a N of Turnover H.F3 CK.1F 33F.3I CE3.2J C3J.1F
G 6nterest .overa+e %atio 1.G1 E.EE CI.J3 CE.IE 2.G2
H -ross ,rofit %atio N FH.3I F2.JI 1F.22 1H.IG FE.EI
I "et ,rofit %atio N H.JF CJ.J3 33H.J3 CE1.HJ C11.31
K .ost -oods so8d
31EJI.I
G JHJI.JK
3IK1F.E
2
13EKG.2
F
3E21H.3
3
J
"et Sa8es A .apita8
0mp8oyed F.31 1.HJ J.IH 1.EJ 3.GJ
3
2 6nventory A Turnover )days* 3F2 3H2 1E3 JK J1
3
3 .urrent %atio 3.1J 3.1I 3.33 3.F1 3.IJ
3
1 /i9uidity %atio 3.22 3.21 2.K1 3.3G 3.EK
3
E Super Ouick %atio 2.FK 2.FJ 2.FH 2.HE 2.IE
3
F ebt C09uity %atio I.I2 K.23 I.2G 3J.3K 3K.G2
3
G ,ropreitory %atio I.HI I.EF H.FI 1.G3 1.EH
3
H Fi=ed Assets %atio 2.21 2.21 2.21 2.21 2.21
3
I
"o of 09uity Shares P
`3222 EEIJIK EEIJIK EEIJIK EEIJIK EEIJIK
3
K .apita8 Additions KJ.J3 HF.3E 11.E3 GG.32 2.1J
3
J Avera+e 6nventory FJ3E.2K FJGK.FF G2JI.KH FHJK.JH G2F2.IG
1
2 Avera+e ebtors JFF2.1I IKJ3.KI K221.3G KEFE.22 I1E3.FK
1
3 Avera+e .reditors E23F.GH 1FJI.KG 3FIG.H2 331G.HE 33GJ.H1
1
1 Avera+e 7orkin+ .apita8 1HJI.HF 3GFE.G3 E2IE.G2 I3EK.2G H2IJ.IH
1
E Avera+e %a5 'ateria8 EIGF.13 E32J.12 1JIE.HE EH1H.G1 EHG1.EK
1
F Avera+e 7orkCinCpro+ress 3H2F.EE 1323.21 1312.K1 31I1.IJ 31GJ.II
1
G Avera+e Finished -oods E2.EI 331.HF E12.23 EJ3.FF H1E.FI
1
H .apita8 0mp8oyed E2I3.3G E11G.JF KFF.GH I3IE.GK JKKI.21
READY RECONER

Sl P!rti-ul!r5 08/8=// 088<=/8 088A=8< 0889=8A 088@=89
3 Turnover 3EHJI.GF 32FE3.E KFEJ.FG 3K21J.JH 3K2EH.2H
1 -ross Turnover )"et of 0* 31HF2.KF KHIK.J IHFF.2F 3HFKE.JH 3I2FJ.F1
E Va8ue added GHGE.GE EIF2.11 3JIK.F3 EJ1G.JF K3HH.H3
F -ross 'ar+in ),(6T* EGE.23 CKJE.1K C33EHE.FE CFEFG.K1 1EH1.G3
G epreciation 32J.J1 31G.K KFK.1J 3FH.3E 3IE.II
H ,(6T 1FE.2J C323J.2K C31133.I1 CFFJ3.JG 13KK.IF
I )a* 6nterest on -ovt. 8oans 2.22 2.22 2.22 2.22 FFJ2.H1
K )b* 6nterest on &ther 8oans 3F2.3F C1HK.2J 332E.HF 32JH.KF 33EF.E3
J ,rofit before Ta= 321.JG CIG2.JJ JHJ1.JE CGGKK.IJ CEFEH.3J
3
2 ,rofit after ta= KII.GH CKGJ.HJ JHEG.G1
CGH2F.KF
CEFHJ.KI
3
3 -ross (8ock K3GE.FI K2HE.GH IJJJ.FE
IJIH.2K
IJ12.JK
3
1 "et (8ock inc8 .ap 76, FF2.J2 FH2.J3 G11.GK
3EFK.GI
3FEG.JE
3
E .urrent Assets 1EHEI.IF 11HHI.3 121GK.2I
1H23F.2I
1K2F1.3H
3
F .urrent /iabi8ities 3K1JG.13 3IIJ1.G 3K1KH.I2
3KEK1.3I
3JE3J.GE
3
G ,rovisions 1I31.1K 132J.GG 3HFJ.EJ
3K2H.J2
1I3.GF
3
H 7orkin+ .apita8 1HE2.1G 1IHG.2E E13.JK
GK1G.22
KFG3.2J
3
I
/+ term 8oans Q 6nterest
accrued KJF.3I 3J1H.G1 3HJ1.EE
FE2EE.3K
F2K1G.32
3
K
Sh term 8oans Q 6nterest
accrued 1G3GF.1E 1G3GF.1 113FI.EG
13K3G.1G
13IEF.J1
3
J Share .apita8 EEIJ.IK EEIJ.IK EEIJ.IK
EEIJ.IK
EEIJ.IK
1
2 %eserves > Surp8us 1.23 1.23 1.23
1.23
1.23
1
3
.apita8 emp8oyed )"et (8 Q
7.* E2I3.3G E11G.JF KFF.GH
I3IE.GI
JKKI.21
1
1 Accumu8ated /osses 1HEGI.IE 1I1EG.E 1HEIG.H2
GKFJ3.FK
G1KKH.HF
1
E "et 7orth C11JIG.JF C1EKGE.G C11JJE.K3
CGIHIE.GH
CG1HI3.HJ
1
F "umber of of emp8oyees 332J 31G2 3EI2
3FGJ
3G31
1
G Va8ue added per emp8oyee G.32 1.JJ 3.FF
1.HJ
G.F2
1
H Sa8aries, 7a+es > (enefits FHH3.12 FEHI.EH H112.HE
EE21.K1
E2JJ.3I
1
I
Va8ue added per %upee of
5a+es )%s* 3.13 2.KH 2.E1
3.3J
1.HF
1
K .ontribution to 0=che9uer 3IKK.HF 13IH.G1 3KI1.31
1HE3.1K
1K1E.IJ
1
J 0=ports 2 2 2.22
2.22
2.22
E
2 "et ,rofit to "et 7orth N E.K1 CE.H2 F3.J2
CJ.I1
CH.GJ
E
3
Sa8aries > 7a+es to turnover
N EF.2E F3.KI IE.I3
3K.E1
3I.3K
E
1
'at8. Uasa+e to -T& )"et of
0* FJ.FH FG.3G GF.JK
H1.12
EI.HI
E
E Sun debtors to Turnover ) days* 1GG E1H 1K2
3JE
3FG
Statement showing changes in working capital
Particulars
Effecting working capital Increase Decrease
2009-2010 2010-2011
Current Assets
22667.10 23637.74
970.6
!otal current assets
22667.10 23637.74
Current "ia#ilities
19902.07 21007.49
110$.2
!otal current lia#ilities
19902.07 21007.49
%et working capital & 'CA-
C"(
276$.0) 26)0.2$ 1).7*
%et +ecrease in working
capital
1).7*
,un+s flow state-ent
.ources
A-ount
Application
A-ount
./are /ol+er fun+
%ill
0e+e-ption of
secure+ loans
1*).11
Depreciation of
fi1e+ assets
20.01
0e+e-ption of
unsecure+ loans
*9.2
,un+s fro-
operation
*77.$6
%et +ecrease in
working capital
1).7*
10)2.)$ 10)2.)$
+djusted % H L +KC
Particulars A-ount Particulars A-ount
!o2 -iscellaneous e1penses 0.00 34 fun+s fro- operation *77.$6
!o2 accu-ulate+ loss *77.$6
*77.$6 *77.$6
Stateent sho3ing changes in 3orFing capital D!s. In laFhsE
Particulars
Effects of 5orking
capital
Increase Decrease
2009-2010 200* - 09 0s. 0s.
Current Assets 22667.10 202$*.07 209.0)
!otal current assets 22667.10 202$*.07
Current "ia#ilities 19902.07 199)6.09 ).02
-
!otal current lia#ilities 19902.07 199)6.09
%et working capital & 'CA-
C"(
276$.0) )21.9* 2).0$
%et increase in working
capital
2).0$
*und *lo3 Stateent
.ources
A-ount Application A-ount
./are /ol+er fun+
%I"
%et increase in
working capital
0aising of
secure+ loans
1*).11
,un+s loss in
operation
*$9.69
0aising of
unsecure+ loans
)0$7.96
Depreciation of
fi1e+ assets
61.67
))02.76 ))02.76
+djusted % H L +KC
Particulars A-ount Particulars A-ount
!o2 -iscellaneous e1penses
0.00
Accu-ulate+ loss *$9.69
,un+s loss in operation *$9.69
*$9.69 *$9.69
Stateent sho3ing changes in 3orFing capital D!s. In laFhsE
Particulars
Effects of 5orking
capital
Increase Decrease
2007 6 0* 200* - 09 0s. 0s.
Current Assets 2601.07 202$*.07 - $7$6.00
!otal current assets 2601.07 202$*.07
Current "ia#ilities 201*9.06 199)6.09 2$2.97
-
!otal current lia#ilities 201*9.06 199)6.09
%et working capital & 'CA-
C"(
$*2$.01 )21.9* $$0).0)
-
%et +ecrease in working
capital
$$0).0)
*und *lo3 Stateent
.ources
A-ount Application A-ount
./are /ol+er fun+
%I"
0e+e-ption of
secure+ loans
21*1$.2
Depreciation of
fi1e+ assets *2$.99
0e+e-ption of
unsecure+ loans
1919).$0
,un+s fro-
operation
)679.72
%et +ecrease in
working capital $$0).0)
100*.7 100*.7
+djusted % H L +KC
Particulars A-ount Particulars A-ount
!o2 -iscellaneous e1penses 2$6).*7 34 fun+s fro- operation )679.72
!o2 accu-ulate+ loss )211$.*7
)679.72 )679.72
Interpretation
The short term financial position of the company is not at all
satisfactory where as wor)ing capital in E&&F . &%, B%EB!&# is redced to
CE#!$% in the year E&&% . &$, that means the company has to ta)e drastic
steps to increase its li(idity position!
As per operation of fnds we raised a sorce amont of 0s
CI=F$!FE with that we have to settle varios loan acconts or "y some
fi9ed assets as per or fnds flow statement! 'ale of fi9ed assets is not at
all a good sign for a company!
1verall performance of the company is not at all satisfactory in
these ?E&&F . &% to E&&% . &$@ years so the management has to ta)e
action regarding the improvement of short term as well as long term
financial position!
Stateent sho3ing changes in 3orFing capital D!s. In laFhsE
Particulars
Effects of 5orking capital Increase Decrease
2006 6 07 2007 - 0* 0s. 0s.
Current Assets 197$6.6 2601.07 62$7.) -
!otal current assets 197$6.6 2601.07
Current "ia#ilities 11)0$.$$ 201*9.06 - ***).$1
!otal current lia#ilities 11)0$.$$ 201*9.06
%et working capital & 'CA-C"( *$1.09 $*2$.01 2626.0* -
%et +ecrease in working
capital
2626.0*
*und *lo3 Stateent
.ources A-ount Applications A-ount
./are /ol+er fun+ %I" ,un+s lost in operation $001.*
0aising of secure+ loans *0.)2
0aising of unsecure+ loans 220*.0*
Depreciation of fi1e+ asset *7.)6
%et +ecrease in working capital 2626.0*
$001.* $001.*
+djusted % H L +KC
Particulars A-ount Particulars A-ount
!o2 -iscellaneous e1penses 602.97 342 accu-ulate+ loss $60.*1
!o2 fun+s lost in operation $001.*
$60.*1 $60.*1
Interpretation
The short term li(idity position of the company is not at all
satisfactory where as wor)ing capital in E&&= . &F, %IB#!&$ is redced to
B%EB!&# in the year E&&F . &%, that means the company shold ta)e
necessary steps to salvage its wea) li(idity position!
Fnds flow statement shows that we raised application amont of
0s! B&&#!%I which is not a good sign for an enterprise
1verall performance of the company is not at all satisfactory in
these ?E&&= . &F to E&&F . &%@ years so the management has to ta)e
action regarding the improvement of its wea) li(idity position!
Cash *lo3 Stateent
%articulars
+s on @9:6@:5699
Cash flo3 fro operating activities
Net profit for the year
KII.GH
Ad6stments for:

>epreciation charge for the year
32J.J1
Ad6stment for:

IncreaseG >ecrease in inventory
CHKK.2E
>ecrease in loans and advances
CKKH.JG
IncreaseG >ecrease in de"tors
C1EK.I3
Increase in deferred revene e9penditre
2.22
IncreaseG>ecrease in lia"ilities
G21.HJ
IncreaseG>ecrease in provisions
H21.IE
Net cash flo3 fro operating activities
09<%0/
3rchase of fi9ed assets
CKJ.J3
IncreaseG>ecrease in investments
2.22
Cash flo3 fro investing activities
=A<%</
Increase in secred loans
C3KE.33
Increase in nsecred loans
CKFJ.1F
G1I Loan waiver
=/820%24
Cash flo3 fro financing activities
=A32%84
Net increase in cash and cash e(ivalents
3GHF.2F
Cash and cash e(ivalents 1;
I12.JJ
cash *lo3 Stateent
%articulars
+s on @9:6@:5696
Cash flo3 fro operating activities

Net profit for the year
CKGJ.HJ
Ad6stments for:

>epreciation charge for the year
31G.K2
Ad6stment for:

IncreaseG >ecrease in inventory
IIK.IH
>ecrease in loans and advances
I3J.H3
IncreaseG >ecrease in de"tors
C1IKF.2G
Increase in deferred revene e9penditre
2.22
IncreaseG>ecrease in lia"ilities
CFJF.3K
IncreaseG>ecrease in provisions
FH2.3H
Net cash flo3 fro operating activities
=0842%4<
3rchase of fi9ed assets
CHF.3E
IncreaseG>ecrease in investments
2.22
Cash flo3 fro investing activities
=@3%/2
Increase in secred loans
11.EE
Increase in nsecred loans
E13K.IF
G1I Loan waiver

Cash flo3 fro financing activities
203/%89
Net increase in cash and cash e(ivalents
//02%24
Cash and cash e(ivalents 1;
FF2.HJ
Cash and cash e(ivalents C;
3GHF.2F
Cash *lo3 Stateent
%articulars +s on @9:6@:6;
Cash flo3 fro operating activities
Net profit for the year $=CB!BE
Ad6stments for:
>epreciation charge for the year %I%!C&
Ad6stment for:
IncreaseG >ecrease in inventory 2I$$!$E
>ecrease in loans and advances C&CE!I#
IncreaseG >ecrease in de"tors C&F%!=C
Increase in deferred revene e9penditre EB=C!%F
IncreaseG>ecrease in lia"ilities 2$B!I=
IncreaseG>ecrease in provisions 2#BF!B#
Net cash flo3 fro operating activities #%I&B!%I
3rchase of fi9ed assets 2EE!C#
IncreaseG>ecrease in investments &!&&
Cash flo3 fro investing activities 2EE!C#
Increase in secred loans 2E#%#B!EI
Increase in nsecred loans 2#$#$C!B&
G1I Loan waiver EEI%&!CC
Cash flo3 fro financing activities 2#%BE%!I#
Net increase in cash and cash e(ivalents 2#II!%%
Cash and cash e(ivalents 1; B%B!BF
Cash and cash e(ivalents C; II&!=$
%articulars
+s on @9:6@:67
Cash flo3 fro operating activities
Net profit for the year 2B=&I!%I
Ad6stments for:
>epreciation charge for the year #IE!I=
Ad6stment for:
IncreaseG >ecrease in inventory 2E$F!%$
>ecrease in loans and advances C%IC!EE
IncreaseG >ecrease in de"tors 2EC$=!$C
Increase in deferred revene e9penditre =&E!$F
IncreaseG>ecrease in lia"ilities 2$CF!CF
IncreaseG>ecrease in provisions 2#BCB!CF
Net cash flo3 fro operating activities 2C##C!&#
3rchase of fi9ed assets 2BB!&$
IncreaseG>ecrease in investments &!&&
Cash flo3 fro investing activities 2BB!&$
Increase in secred loans %&!CC
Increase in nsecred loans EE&%!&%
G1I Loan waiver &!&&
Cash flo3 fro financing activities EE%%!I#
Net increase in cash and cash e(ivalents 2%F$!=$
Cash and cash e(ivalents 1; #I=B!E=
Cash and cash e(ivalents C; B%B!BF
%articulars +s on @9:6@:6<
Cash flo3 fro operating activities
Net profit for the year 2CI=$!%F
Ad6stments for:
>epreciation charge for the year #CI!BI
Ad6stment for:
IncreaseG >ecrease in inventory $%#!I%
>ecrease in loans and advances $$#!C$
IncreaseG >ecrease in de"tors #FC!$
Increase in deferred revene e9penditre =#B!$%
IncreaseG>ecrease in lia"ilities 2=E%&!B$
IncreaseG>ecrease in provisions #$!FI
Net cash flo3 fro operating activities 2=%CC!IC
3rchase of fi9ed assets 2&!E$
IncreaseG>ecrease in investments &!&&
Cash flo3 fro investing activities 2&!E$
Increase in secred loans #%&%!B=
Increase in nsecred loans B=BC!FB
G1I Loan waiver &!&&
Cash flo3 fro financing activities FI=E!C#
Net increase in cash and cash e(ivalents =E%!B$
Cash and cash e(ivalents 1; %C=!=F
Cash and cash e(ivalents C; #I=B!E=
%articulars +s on @9:6@:6=
Cash flo3 fro operating activities
Net profit for the year 2F#CF!$
Ad6stments for:
>epreciation charge for the year #B#!#I
Ad6stment for:
IncreaseG >ecrease in inventory #I=B!EF
>ecrease in loans and advances 2#%F=!I#
IncreaseG >ecrease in de"tors 2IB!CB
Increase in deferred revene e9penditre B%$!$F
IncreaseG>ecrease in lia"ilities 2#&C%!FI
IncreaseG>ecrease in provisions 2#I&!&E
Net cash flo3 fro operating activities 2%&CE!&I
3rchase of fi9ed assets 2C=!=#
IncreaseG>ecrease in investments !&E
Cash flo3 fro investing activities 2C=!B$
Increase in secred loans IEF!%E
Increase in nsecred loans FBBB!BE
G1I Loan waiver &!&&
Cash flo3 fro financing activities F$%C!CI
Net increase in cash and cash e(ivalents 2%B!E$
Cash and cash e(ivalents 1; $E#!$=
Cash and cash e(ivalents C; %C=!=F
After the li"erali*ation and glo"ali*ation the indstry is facing stiff
competition! Moreover the indstry is characteri*ed "y long cycle times
and as the overheads is soaring steadily! To withstand competition, orders
have to "e delivered mch with in the time than the competitors!
In order to overcome this:
;43< has to maintain some stoc)s of prodction items i!e! raw materials
nli)e the present practice of procring the material after receipt of order
from the cstomers
Team wor) and inter departmental co ordination mst "e elevated to
finish the 6o"s with in the stiplated time "y leaving personal fancies!
It is the responsi"ility to maintain good and relia"le relationship with
vendors to develop relia"ility and worthiness on the organi*ation to honor
or material procrement orders within the specified time!
3rocedre limitations are to "e minimi*ed and allocate responsi"ilities "y
o"serving the )ey factors!
The management and employees shold trst on each other to overcome
this crisis sitation "y performing the entrsted 6o"s properly!
5nnecessary overhead costs are minimi*ed "y planning the activities in a
proper manner "y sing the scientific methods of principles of
management li)e operations research, pro6ect evalation and
management, MI', and secrity analysis and portfolio management!
After the li"erali*ation and glo"ali*ation the indstry is facing stiff
competition! Moreover the indstry is characteri*ed "y long cycle times
and as the overheads is soaring steadily! To withstand competition, orders
have to "e delivered mch with in the time than the competitors!
In order to overcome this:
;43< has to maintain some stoc)s of prodction items i!e! raw materials
nli)e the present practice of procring the material after receipt of order
from the cstomers
Team wor) and inter departmental co ordination mst "e elevated to
finish the 6o"s with in the stiplated time "y leaving personal fancies!
It is the responsi"ility to maintain good and relia"le relationship with
vendors to develop relia"ility and worthiness on the organi*ation to honor
or material procrement orders within the specified time!
3rocedre limitations are to "e minimi*ed and allocate responsi"ilities "y
o"serving the )ey factors!
The management and employees shold trst on each other to overcome
this crisis sitation "y performing the entrsted 6o"s properly!
5nnecessary overhead costs are minimi*ed "y planning the activities in a
proper manner "y sing the scientific methods of principles of
management li)e operations research, pro6ect evalation and
management, MI', and secrity analysis and portfolio management!
Financial analysis "y IM 3andey
Financial management, Apollo 3"lishers
The 4ind Newspaper
Li"rary of ;43<
Financial 'ervices
>! M! Mithani and E! Gordan ?4imalaya 3"lication@
<asant >esai and '! Kain ?4imalaya 3"lications@