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INTRODUCTION OF THE STUDY Introduction To Financial Management

Financial management is the Managerial activity which is concerned with planning and controlling of the firms financial resources. Through it was a branch of economics till 1890, as a separate activity or discipline it is of recent Origin. Still, it has no unique body of knowledge of its own, and draws heavily on economics for its Historical concepts today. 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 related to the finance, and an understanding of the theory of financial management provides them with conceptual and analytical insights to make those decisions skillfully.

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2. FINANCE FUNCTIONS: Although, it may be difficult to separate the finance functions from production, marketing and other functions, yet the functions themselves can be readily identified. The functions of raising funds, investing them in assets and distributing returns earned from assets to share holders are respectively known as financing, investment and dividend decisions. While performing these functions, a firm attempts to balance cash inflows and outflows. This is called liquidity and we may add it to the list of important finance decisions or functions. Finance functions or decisions include: Investment or long-term assets-mix Decision. Financing or capital mix decisions. Dividend or profit allocation decision. Liquidity or short-term asset-mix decision.

A firm performs finance functions simultaneously and continuously in the normal course of the business. They do not necessarily occur in a sequence. Finance functions call for skilful planning, control and execution of a firms activities.

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INVESTMENT DECISION: Investment decision or capital budgeting involves the decision of allocation of capital or commitment of funds to long-term assets that would yield benefits in future. Two important assets of investment decision are:

a) The evaluation of prospective return on new investments and b) The measurement of a cut-off rate against the prospective (profitability) return of new investments should be compared. These investment decisions involves risk. So the financial Managers evaluate the investment proposals in terms of both return and risk.

FINANCING DECISION: Financing decision is the second important function to be performed by the financial manager. Broadly, he or she must decide when, where and how to acquire funds to meet the firms investment needs. The central issue before him or her is to determine the proportion of equity and debt. The mix of debt-equity is known as firms capital structure. The financial manager must strive to obtain the best financing mix or the optimum capital structure for his or her firm. Once the manager is able to determine the best combination of debt and equity, he or she must raise the appropriate amount through the best available sources.
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DIVIDEND DECISION: Dividend decision is the major financial decision. The financial manager must decide whether the firm should distribute all profits, or retain them, or distribute a portion, and retain the balance. The dividend policy should be determined in terms of its impact on the shareholders value. The optimum dividend policy is one that maximizes the market value of firms share. If the shareholders are not different to the firms dividend policy, the financial manager must determine the optimum dividend-pay-out ratio. The pay out ratio is equal to the percentage of dividends to earnings available to share holders. The financial manager should also consider the questions of dividend stability, bonus shares and cash dividend in practice.

LIQUIDITY DECISION: Current assets management that affects a firms liquidity is yet another important finance function, in addition to the management of long-term assets. Current assets should be managed efficiently for safeguarding the firm against the dangers of illiquidity and solvency. If the firm does not invest sufficient funds in current assets, it may become illiquid. But it would lose profitability, as idle current assets would not earn anything. In order to ensure that neither insufficient nor unnecessary funds are invested in current assets, the financial
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manager should develop sound techniques of managing current assets. He or she should estimate firms needs for current assets and make sure that funds would be made available when needed. So we may conclude that these finance functions may affect the size, growth, profitability and risk of the firm, ultimately the value of the firm.

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SCOPE OF THE STUDY:The study has been conducted to understand the position of the industry and various functional areas of the company and their operations. The study mainly focuses on Funds flow anylasis of the company. NEED FOR THE STUDY:The basic need is to complete a project work for the partial fulfillment of my Masters degree. With this need the search started for the topic that was appealing and that would make most of my skills and abilities. The project work is carried out by me in Foods, Fats and Fertilizers Limited, Tadepalligudem and the aim of project is to analyze the Funds flow anylasis of the company. The Funds flow anylasis has emerged as the principal technique of the Analysis of Financial Statements. The Funds flow anylasis can be used with other measures to fully evaluate the operational effiency and also provide a standard of comparison at a point of time and allows comparisons with other firms .It can be used to analyze financial position to identify the trends, shift in trends or other factors. For the purpose of the study FFF Ltd is chosen. It necessary to identify the financial strengths and weaknesses of FFF Ltd by establishing relationship between different items of reference. The present study is entitled Financial Performance of Foods, Fats and Fertilizers Ltd by using Funds flow anylasis this study is made with special emphasis on financial position by using Funds flow anylasis .

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The retained profit in the year 2004-2005 is decreased when compared to the years 2003-2004 and 2002-2003. The company is involved in more projects which needed gestation period. The main reduction in the commodity trading. Considering the financial background of the company the retained profits increased from the years 2002-2003 to 2003-2004. The profit in year 2001-2002 is more when compared to other, this is because depreciation, profit before tax, profit after tax and provision of taxes are more when compared to other years. Interest and provision for dividend and tax are less when compared to other and thus detained profits are more in the year 2002.

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Objectives of the study: The main objective of the study is to study the overall financial position of the company from 2006-2010. To study the financial performance of the company. To study the sources and applications to the cash. To offer suggestions for improvement in the relevant aspects. To find out the financial stability of the firm. To know how effectively the company is using its resources. To measure the extent to which the company has been financing its needs through borrowing. To study about the profile of the oil industry and the FOODS,FACTS AND FERTILISERS Ltd. Company profile. To make an overall view on theoretical approach of cash flow and funds flow statements.

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Methodology: The data used for preparing this report is through 2 sources. 1. primary data. 2.secondary data. Primary data: Primary data was collected on the basis of personal observations discussions and through interviews. Secondary data: Secondary data has been collected by referring to various annualreports and records / documents of the company. a)Annual Reports: These are one of the important sources of information in collecting secondary data. By referring the previous annual reports, the financial position of the company and its requirement of funds for ratio analysis has been arrived. b) Records & Documents: These consists of 1. Balance sheet 2. Profit / Loss account.

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Limitations of the study: The time given to complete this project is very limited, The study is based on accounting information. The analysis is made from the information given by the organization. The study was conducted with limited data available and analysis was done accordingly. The complexity and confidentiality of various operations is also a limitation to this study.

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CHAPTER II

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INDUSTRY PROFILE

INTRODUCTION

In the Indian context, the term Vegetable Oils is almost synonymous with Edible Oils and land is not used as cooking media. However it is important to keep this distinction in mind not all Vegetable Oils are Edible - Some including caster oil are mostly non-edible and some of the edible oils like Ground Nut and Coconut are finding increasing industrial applications as in cosmetic, soap making etc. By virtue if theyre high nutritive content, Edible oils from a major source of nutrition. The fatty acids in Edible Oils are required by the body as a vehicle for carrying vitamins, provide oil cakes, which are by-product of the oil extraction process, are important source of animal nutrition. These can be processed in to Edible flavors, which are rich in proteins. Oil seeds occupy an important position as the agriculture map pf and rank second after food grains as a farm commodity crop. India accounts for a tenth of the world out put of Vegetable Oils and fats. It is the largest produces of Ground Nut, rapeseed, mustard and sesame, second in respect of castor seeds, third in coconut, fourth in cotton seed and fifth in line seed. Our country has a highly developed oil based industry. Providing gainful employment to nearly 15 million persons besides another half a million engaged in milling and processing units. It is essential a food-oil industry accounting for four fifths of the total supply of Vegetable Oils. Soap paints and varnish industries from the bulk of non-food applications.

In spite of their national importance, production of food grains has been suffering a negative growth rate all these years. Only during the first plan period, the Targets set for 12 | P a g e

production were realized after this no impressive achievement was recorded. The main contributory factors are two fold, first only marginal land, in rain fed areas is being used for their cultivation resulting inevitable in low productivity, second agriculture in India is still subject to the vagaries of monsoon which makes for erratic production. It is little wonder therefore that the annual rate; of growth of oil-seed production for the decade 1965-1976 was a mere 1.2 percent while that of oil seed productivity, an equally dismal one percent. Viewed in the global context, India has the dubious distinction of having the highest acreage under oil seeds and recording the highest output, and yet showing the lowest yield, at 736 kg. Indias yield per hectare is lower than that of Nigeria (1615.38 Kg) U.S.A. (91474.58 Kg), Argentina (1153.49 Kg.) and China (1148.55 kg.) The following table would give picture of Indians placing in the world settings. For the year 1980-81, target for oil-seed production had been fixed at 11 million tones, actual production however lagged behind, with; provisional estimates Placed at 10.2 million tones. Production of live major oil seeds viz./ groundnut, rare seed mustard, sesame, line seed and castor seed and is estimated to be around 90 lakes tones, which is about 13 percent higher than the previous years production. Production estimates of groundnut at 57 lake tones however show decline of 70,000 tones. At 2 lack tones castor seed production has also registered a decrease of 30,000 tones. Rapeseed, sesame and line seed have however, registered increase over the previous years production levels.

The central Government therefore took various measures to increase production of oil seeds. A centrally sponsored scheme for an intensive oil seed development programmed was operated in 14 states with a coverage target 40.6 lakes hectors under a liberalized pattern of central, assistance. However actual coverage was only 36 lake hectares and the short fall was attributed to serve 13 | P a g e

Brought conditions in several states during the kharrif season. Short falls in production persisted in the oil year 1981-82 as well. As a result, domestic industry could not meet the consumption needs respect of edible oils. The total edible and supplies from indigenous sources were estimated at about 30 lake tones in 198182 (which however higher than the previous years levels of 25 lakes tones). The gap of 10 lake tones had to be filled only through imports. Consequently, the state-trading corporation was asked to import a million tones of Edible Oils during the oil year 1981-82. The allotment of imported Edible Oils was also pruned in a bid to ensure more supplies through fair price shops. The trend of imports in expected to continue in the year to come despite the best efforts of the union agriculture ministry to raise oil seed output. The genera-based international trade center has projected import f 13 million tones of Vegetable Oils in 1985. As for exports, it is anticipated that India would export 15 Lake Tones of oil equivalent of hand picked-selected groundnut, other nuts and castor oil by 1985. The composition of our exports is expected to under go a change palm oil and products (palm oil and FBD palm oil) will in further account for an increasing share of Indian exports soybean oil and rapeseed oil will continue to be imported through their combined share may fall to about one third of the total imports refined rapeseeds oil could be the cheep oil for the liquid market while soybean oil is expected to the supplied to the vanaspathi industry. Regarding production of oils, an increase in the production of solvent extracted oils such as rice bran oil tree oils in lightly to occur the ITC reports says that the country could make significant investments in view of its resource for this oil and the demand for Edible Oils. The report has also forecast a rise in the de oiling of ground nuts cake and other sun cakes the country could also produce 4.5 lakes of tones seed oil per year.

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PROFILE OF THE OIL INDUSTRY: The power and strength of the company depends on how strong and secure it is on the food front. In trying to achieve this goal, the oil seed scenario in the country has undergone a substantial charge during the post few years. The country is moving away from a situation of scarcity and huge import bills to one of self-sufficiency and possibly even export of vegetable oils. India ranks high among the oil seeds producing countries in the world with perhaps the larges number of commercial varieties of oil seeds such as ground not, rape and mustard, sesame, kardi seed, nigerseed, soya beans, sunflower seeds, linseed, castor seed, copra, cotton seed and a number of minor seeds of tree origin oil seeds takes their place, as the second largest agricultural crop, next only to food grains. The cultivation of oil seeds in India is spread over various states with a distinct regional pattern covering about 19 to 20 million hectares, which accounts for about 11 percent of the total land under cultivation in the country. In India where fats of animal origin such as fish oil are seldom used as cooking media. The term vegetable oils is used as a synonym for edible oils. However it needs to be recommended that there are, on the one hand vegetables oils such as castor, groundnut and coconut oils, which are finding increasing. Industrial applications such as in cosmetics, soap making etc edible oils are a major source of nutrition for the people in the country. Oil cakes that are by-products of the oil extraction process are an important source of animal nutrition. They can also be processed in to protein rich edible. India has a highly developed oil based industry employing more than 15millon persons. However it remains essentially food oil. Industry accounting for a much as 83% of the total supply of vegetable oil in the country. The major non-food users of oil are soap, paint and vanish industries. Faced with major demand for their conventional products, FMCG majors have been planning their hopes on branded staple foods to deliver rapid top line extension. 15 | P a g e

Negative growth in the oils and fats business has been instruments in restraining top line growth for the FMCG. PRODUCTS: Broadly edible oil or fat products can be categorized as fallows. a. Vegetable refined oil b. Hydrogenated oil c. Bakery fats Expelled ground oil of good quality can be directly consumed. It can also be refined to have higher purity other oils such as soya has to be refined to make them edible. Vanaspathi is obtained by hydrogenation of edible oil. It is used as a suitable for ghee by some segments of sources and also for making sweets, snacks including biscuits, cakes etc CONSUMER AWARENESS AND PENETRATION: Among FMCG products, edible oils has one of the highest penetration of 98% in urban as well as in rural areas penetration of all these 3 cooking medium is very high at 99.8% in urban areas as well as rural areas. Vanaspathi penetration averages 17.4% at all India level, significantly higher at 28.8% in urban areas and 13% in rural areas. It is highest in medium size towns of 0.5-1mm population of 34.3% in metros and towns. In metros refined edible oil is a relatively popular cooking medium. The per capita vegetables oil consumption in the country was 7.6kg p.a in 1997-98, significantly lower than 8.5 kg p.a during 1996-97.

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CONSUMER HABITS AND PRACTICES: Edible oil is one form or other is consumed is almost every household, and Indian food habits show a strong preference for fried vegetables and several other fixed snacks. Traditionally the north and west have been milk surplus regions in the country. This has led to surplus ghee production in these areas and higher ghee consumption. The lower ends of the society which can not afford ghee consume vanaspathi. Sweet meat makers in the unorganized sector, particularly in the north represent one of the largest user segments for vanaspathi. In the south there has been abundant availability of edible oils, namely coconut oil, ground nut oil, sunflower oil etc. This had led to different consumer habits southern consumer prefer refined oil cooking medium as compared to ghee or vanaspathi. Similarly the eastern region, which is milk deficient, has preference for vegetable oil as cooking medium. There are also regional and cultural differences in the type of edible oil used for cooking. For instance kerala uses more of coconut oil for cooking. Sesame oil is widely used in the north, mustard oil in the north and east while there is an over whelming preference for groundnut oil is in the west. Most consumers, especially in the rural areas buy edible oil in loose form. Where as in large metros loose oil is scarcely available as retailers find it difficult to handle the same. In medium sized towns, loose as well as branded oil is available. In the last few years popularity of branded oil has been increasing particularly with the introduction of low cost poly packs with the government ordering compulsory packaging of edible oil in the wake of dropsy deaths in the country due to use of adulterated mustard oil, the wage of branded oils is expected to witness phenomenal growth.

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India accounts for 9.3% of world oil seed production. It has the worlds fourth largest edible oil economy. In 1999, India ranked as the worlds largest importer of edible oils, displacing china. The bulk of edible oil, India imports under the open general license is RBD palmolein of Malaysian and Indonesian origin. India is one of the worlds leading producer of oil seeds and oil, contributing to 9.3% world oil seed production. It produces the largest number of commercial varieties of oil seeds over nearly 28.4 million hectares of land. The major edible oils produced in India are ground nut, rapeseed, soya, cottonseed, sesame seed, castor seed, sunflower seed, etc. Groundnut was the most widely consumed and traded edible oil determining edible oil economics, but is now being displaced by others. India is the worlds second largest production of groundnut, next only to china. The govt. has set up a technology mission on oil seeds, to increase production of other oil seeds and oil and to reduce dependence on imports. The strategy followed was to Increase productivity with better inputs and practices Increase area under oil seed crop Encourage winter oil seed crops. This led to a sharp increase in oil seed production driven mainly by rapeseed, sunflower, castor seed and soya. India is today the worlds third largest producer of rapeseed and cottonseed and the largest producer of caster seed. India has approximately 300 edible oil refining units, 60-70% of which are in the small scale unlike the bigger refiners, the smaller one are unable to important huge quantities of crude either low capacity or lack of financial resources, and may be forced to close down or sell out to the bigger ones in the fore cable future. Another major problem is the low capacity utilization. The installed capacity of oil mills is around 36 million tones annually, but capacity utilization is only 40% solvent extraction plants shows only 33% capacity utilization of vegetable oil refineries 40% utilization. 18 | P a g e

The import of refined palm oil was put under OGC (Open general license) in March 1994. Other edible oils were put under OGC in April 1995 when an item is brought under OGC, it means that the item can be imported without seeking any approval. Originally there was no discrimination between refined and non-refined edible oil as far as import duty was concerned. The duty on both was 65% duty was then slashed to 30% for both then to 20% in 1996 and 15 % in the 1999-2000 budgets. In most parts of the world, import duty on the oil seeds is lower than that on oils. But in India, it is higher 40%. That is why no import of oil seeds (or) oil-bearing material has taken place in India. The industry wants the duty to be lowered from the present 40% to 50%. Edible oil prices in the Indian market have crashed owe to large imports by multinational trading houses. The edible oil industry is one sector in India that will see considerable reform in the foreseeable future. Major players in refined edible oils in the organizational sector are the ITC Agrotech, Marico Industries, Ahmed mills, Godrej foods. HLL and NDDB. The market is highly fragmented among various brands. Sundrop refined Sunflower oil brand with around 13l market share/ ITC Agrotechs other edible oil brands include Real Gold mustard oil, Crystal refined oil and Sudan unrefined mustard oil. Sweekar sunflower oil marketed by marica has an 8.2% share and saffola has 7.5% market share other leading edible oil brands include NDDBs Dhara rape seed oil. Godrej foods (Godrej cooklite sunflower) with 11% market share, HLLs flora with 2.5% market share (6% in sunflower oil segment) and Postman with around 8% market share.

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The vanaspathi HLLs Dalda is the oldest and largest brand with close to 36% market share. Its brand extension Dalda manpasand was launched in 1996. In Feb 98, HLL launched another brand variant dalda feel light. Other major vanaspathi manufacturers are Wipro, Amrit Vanaspathi, IVP, Madhusudan industries Rasui and Pioneer Agro.

IMPORT OF EDIBLE OILS: It has not been done away completely, but whenever import is now made is largely a measure of precaution than out of any composition from 1988-89. The edible oils import has been drastically cut down/ In 1996-97, import totaled 3 lakh tones valued at Rs 250 crores during the next 2 years it is expected around the same level. The present import is significant compared to the napping to 19.45 lakh tones imported value at Rs 969 crore in 1997-98. India has signed a memorandum of understanding with Malaysia for an annual import of two lakh tones of palm oil for two years. Besides the country is to receive 50,000 tones of soya been oil from the U.S. as a gift for meeting social objectives. Although in the context of exceptionally large oil seeds production during the current year, there is hardly and need for import, the country may avail the option to import for building a buffer stock to meet the needs of public distribution system during the lean period. EXPORT Export of oil mill, oil seed and minor oils and are expected to gather momentum following the enouncement regarding the full float of rupee on the trade account, according to the sources in the trade. The present export scenario shows that the trade is in a beyond mood of achieving a formidable target, with increased export earning in the current year. This basically enacts from bumper oil seeds output of 215 lakh tones in the offing. This expectation of a bumper crop, moreover has compelled the union ministry of commerce to 20 | P a g e

raise the current years export target for the oil seeds from Rs 1250 crore over Rs 1300 crore. According to the estimates made by the central coordination committee, the exports of oil mills, oil seeds and minor oils during the current year would be more than 3.3 lakh tones with a value of Rs 1362 crore as against 30 lakhs tones with the value of Rs 1043 crore achieved during the year 1996-97 the export of oil meals, oil seeds and minor oil during the period April 1996 to Jan 1998 stood at over 24 lakhs tones valued at more than Rs 1000 crores. CUSTOMER SATISFACTION: Satisfaction is a persons feeling of pleasure (or) disappointment resulting from comparing a products perceived performance in relation to his (or) her expectation. As this definition makes clear satisfaction is a junction of perceived performance and expectations. If the performance falls short of expectation, the customer is dissatisfied. If the performance matches the expectations, the customer is satisfied or delighted. Many companies are aiming for high satisfaction because customers who are just satisfied still find it easy to. When a better offer comes along those who are highly satisfied are much less ready to switch. High satisfaction (or) delight creates an emotional affinity with the brand, not just a rational preference. The request is high customer loyalty.

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CHAPTER III

PROFILE OF THE ORGANIZATION

Foods Fats & Fertilizers Limited

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Introduction:

Foods, Fats and Fertilizers Ltd, Tadepalligudem are a family owned Organization. It is well known as foods, fats. But the West Godavari farmers call it is a Tavudu Factory. This organization is professionally carrying the business activity by the Goenka family. It is having branches in Madras, Bombay, Hyderabad, Kakinada, Calcutta and Baroda. The registered office of Foods, Fats and Fertilizers: P.B.NO-15 Tanuku road Tadepalligudem-534101 West Godavari district Andhra Pradesh. Foods, Fats and Fertilizers Ltd, Tadepalligudem, West Godavari district was conceived in 1959, born in 1960 and were on its fact by 1962. Today foods, fats and fertilizers Ltd has matured into a conglomeration of 20 industrial units spread over 40 acres constantly buzzing with activity and providing employment to over 630 person

MISSION:
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Safety and quality are the wings of our success.

VISION:
To be the number one edible oils and specialty Fats Company in the country targeting to reach 1000 crores people by 2010. PHILOSOPHY OF THE COMPANY: The philosophy of the organization FFF is serving the society through the industry.

OBJECTIVES OF FFF LTD: The main objectives of the organization are: To serve the society through the success in the oil out put. The objective towards the organization include Concern Commitment Integrity Quality

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Foods, Fats and Fertilizers have completed 40 years of existence where it has seen lots of ups and downs. As the company has incorporated its name as Foods, Fats and Fertilizers Ltd, it has given 3F as the brand name to all the products it produces. The wheel of the fortune has turned a full circle for Mr. B.K.Goenka, the architect of Foods, Fats and Fertilizers Ltd. Born and Bred in Burma the Goenka family established and respected in industry and trade. They had a flouring textile business and a large rice mill. The rice bran from Mr. Goenkas mill was avidly sought as animal feed and his observant eyes used to notice thin deposit of oil in the wrapping papers used for sampling could this oil be extracted? What would be its quality? These questions had to wait because in 1942 the Japanese invaded Burma and Mr. Goenka had to abandon his business and return to India. Being an optimist, he transformed the adversity into opportunity by this got and determination. After brief spell in his native land in Rajastan, his restless enterprising zeal brought, Mr. Goenka to madras in 1943 where he is with his brothers, started export of handloom fabrics. In due course he established a large textile business.

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In 1959 Mr. Goenka read in a article by Dr. Raghunath Prasad of central and visited Burma with him to study the relevant technologies though he found that east German technology better, he was not fully satisfied and asked his brother Ms G.S. Goenka who was in Japan to study in detail about the Japanese process and another brother Mr. S.N. Goenka in Europe, to study the process of Hugo of Germany and Dr. Smith of Belgium mean while he concerned searching for an ideal location to set up his industry in India. Technology was selected and Tadepalligudem, the rice bowl of A.P. was finalized as the location for the proposed extraction plant, the first in India to process rice bran. This group associates modesty garments and golden needle apparels in garments and fabrics and Sanyak Udyog in plastic products constantly strengthen their group activities.

A NEW ERA BEGINS:In collaboration with M/S Yoshino seisakusho company Ltd, a renowned engineering house in Japan we leshered in a unique technology for refining high FFA. Rice bran oil to induce large production of rice bran oil by providing diversified outlets and better realization to the solvent extraction plants to achieve the potential production of 0.6 million tones from the present 0.25 million tones and almost nothing in 1960.
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FUNCTIONAL PROFILE:PRODUCTION:VARIOUS PLANTS IN FOODS FATS AND FERTILIZERS LTD:Solvent Extraction:- (Lurgi, West Germany) Installed and commissioned in 1962 with production capacity 2400 tones pa. This plant process exclusively for rice bran. Rice bran is tempered and palletized by the use of hexane, the oil in the bran is extracted. The de oiled bran thus obtained is packed for export. According to the quality of the oil is extracted is used for edible and non-edible purposes. Solvent extraction Plant II:- ( desment, Belgium, India) Installed and commission in 1972 production capacity 36000 tones PA process. In thus plant is similar to plant-I however this plant is equipped with preparatory. Solvent- extraction plant III:Installed and commissioned in 1983 production capacity 45,000 tones pa. ( Fabricated and installed by engineering division of foods, fats and fertilizers Ltd). This plant is also versatile to process various seeds oiled cakes and kernels. It is designed, fabricated by foods, fats and fertilizers Ltd, engineering division short coming of the other plant.

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Its uniqueness is the incorporation of minimize the Hexane loss and facility for low temperature extraction.

Refinery:Installed and commissioned in 1965 production capacity 4500

tones pa. our refinery is equipped with both batch and continuous neutralizes. Refining process consists of benumbing, caustic neutralization, Bleaching and deodorization. Deorderdarised oil is passed through polishing filters and sent to packing section.

Solvent extraction plant(iv):(Fabricated and installed by oil ex India and their engineering division) It was installed and commissioned in 1985 with a production capacity of 45000 tons per annum. These four extraction plants provide variability of operation in oil seeds and oil cakes and at the same time has advantages in marketing. The plants have facilities to process a wide varieties of oil seeds, oil cakes like rice bran, soybean, sunflower, ground nut, rape seed, sesame, mangosal, Niger etc., Due to non-availability of sufficient bran and export-import policies of Indian government, forced the company to stop two solvent plants.

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Fat Splitting plant:Installed and commissioned in 1967 into a production capacity of 4500 tones pa. Oil consists of fatty acids and glycerin. It can be separated from the oil by high pressure splitting under high pressure and temperature, reaction taxes place, slitting the oil into crude fatty acid and sweet water which is the dilute from the glycerin is obtained.

Glycerin plant:UNIT NO: 1 installed and commissioned in 1967 with a production capacity of 300 tons per annum. Sweet water obtains from the fat splitting plant is set to multi effect vacuum evaporators, where it is evaporated into crude glycerin. The crude glycerin is further concentrated, deodorized and bleached to yield refined glycerin.

Hydrogenation plant:-

UNIT NO: 1 commissioned in 1979, UNIT NO 2 in 1982 into a production capacity of 6000 tons per annum. Rice bran oil bounds in unsaturated fatty acids to render this oil suitable for making good quality soaps it has to be hydrogenated for increasing its melting point. Hydrogenated plants consists of cell house,

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compressor room and hydrogenation auto claves. This oil is hydrogenated under high temperature and pressure using a catalyst. To obtain better products for premium soaps this hydrogenated rice bran oil is split and distilled to give hardened distilled fatty acid.

Physical Refinery:Installed in 1986, into production capacity of 9000 tons per annum. This is fabricated by the engineering division of foods, fats and fertilizers Ltd. The conventional process of refining consists of specifying the free fatty acid in the oil by the use of an alga. In physical refining the free fatty acid is directly distilled out under high vacuum and temperature.

Waste oil recovery plant:Installed and commissioned in 1986. In this plant waste oil from present bleaching earth and spent nickel catalyst is recovered.

Vanaspathi Shortening:Production of Vanaspathi shortening high quality bakery fats, margarine from refined oils fractionation. This division produces high quality olives and steering from various edible fats for use in manufacture of chocolate confectionery

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and cosmetics leading manufacturers this yields of activity all over the world are their consumers.

Turnkey Engineering:In collaboration with yashino-seisakush co. Ltd. Japan who has done pioneering work in developing process and technical know how far refining high fat rice bran oil. The engineering division has installed and commissioned five plants into a total project cost of Rs 1.70 millions in south India. India is the second largest producers of rice and has large potentials for crude rice bran oil to be processed and turned into a cooking medium to satisfy their requirements of an immense Indian market. International Trading:Besides the export of the manufactured products, with large ware houses for dry cargo, bulk storage installation for liquid infrastructures at their command and the rich international trading experience of over 40 years. They have set up high standards and achieved substantial growth is international trading of commodities like rice, industrial fats, maize, tapioca, HPS ground nuts, kernels, oils and chemicals, new products like natural foods, cobs, oleoresin and high quality waxes are proposed to be added to their export baskets.

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Through R&D new products and value addition to the existing products is being done in a continuous basis for enriching the international trading both quality and volume.

ADMINISTRATION AND ORGANIZATIONAL STRUCTURE Board of Directors:

Sri B.K.Goenka (Chairman and M.D.) G.S.Goenka (whole time Director) S.B.Goneka (whole time Director) Bharat Kumar Goenka (whole time Director) O.P.Goneka Sita Ram Goenka. Sushi Goenka.

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Organizational structure: The General Manager is the main administrating and controlling and head of the FFF ltd. On behalf of the board of directors under him there will be one Deputy (Finance and Administration) five heads of the Departments representing the 3F ltd.

Man Power Position:To continue the day by day operations the company has adopted a systematic manpower poison. 1) Managerial Staff: The managerial staff consists of 75 members and they belong to all departments of the organization. 2) Staff: Staff consists of 100 members. It includes clerical and non-clerical staff. 3) Technical Staff: The technical staff consists of 245 members. It includes plant engineers, plant supervisor, plant operators etc. 4) Bata: Bata otherwise known as piece rated workers, they are 92 in number.

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5) Trainers: Trainers consist of 98 members. Trainers are those persons who take training from the organization. 6) Act apprentices: An act apprentice consists of 20 members. Industrial training colleges send some students to the organization to pursue trainings in different branches.

MARKETING:The FFF ltd has a strong marketing network spread in all the country where it is existed. Various dealers and consignment agents are been appointed every year to increase the network and have a strong command over the market. The company has also increased the size of the basket of the products that are offered to the industrial customers by adding various new products.

FINANCIAL RESULTS:Financial performance: During the years 2008-2009 and 2007-2008, the company was mainly engaged in trading of imported vegetable oils and achieved a turnover of Rs 471.49 crores as compared to Rs 450.50 crores previous year. After that in the year 2009-2010 the turnover is Rs 498.14 crores the increment is due to performance of the company.

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AWARDS:The company received the SEA RICE BRAN OIL award in 2001-2002 from the solvent, extraction association of India. PROJECTS:2000-2001, a terminal at Gopalpur in orissa was commissioned and started marketing imported oils in the linter lands of orissa.2001-2002 palm, solvent, refining and purification of plant. 2002-2003, Balancing of equipment has been by adding a cooling tower to various plants.2003-2004,Complete Deodourisation plant III has been

commissioned with installed capacity of 18000 TPA in order to improve the productivity.

INTERPRETATION OF FINANCIAL RESULTS

Particulars

2007-08 Rs Lakhs Interest, 4294.21

2006-07 in Rs in Lakhs 2826.86

2005-06 Rs in Lakhs 1525.67

2004-05 Rs in Lakhs 1021.95

Profit

before

Depreciation, and Tax Less: interest Depreciation Profit before tax Less: Provision for taxes 1291.69 573.33 2429.19 901.37 1011.70 492.60 1322.56 505.94 643.04 318.56 564.07 206.37 530.56 282.66 208.73 (44.66)

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Profit after tax

1527.82

816.62 186.32 630.30

357.70 118.38 239.32

253.39 57.01 196.38

Less: Provision for dividend 248.41 and tax Retained profit 1279.41

CHAPTER IV
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CONCEPTUAL FRAME WORK

FUNDS FLOW STATEMENT

INTRODUCTION The basic financial statement i.e., the balance sheet and profit and loss account (or) income statement of business, reveal the net effect of the various
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transaction on the operational and financial position of the assets and liabilities of an undertaking at particular point of time. It reveals the financial status of the company. The assets side of a balance sheet shows of the deployment of resources of an undertaking while the liabilities side indicates its obligation i.e., the manner in which these resources were obtained. The profit and loss account reflects the results of the business operations for a period of time. It contains a summary of expenses incurred and the revenues realized in a accounting period. Both these statement provide the essential basic information on the financial activities of a business. The balance sheet give a static view of the resources (liabilities) of a business and uses (assets) to which these resources have been but at a certain point of time. It does not disclose the cause 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 provided 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 prepare 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 statements. The funds flow statement in a statement which shows the movement of funds and is a report of the financial operations of the business undertakings. It indicates various means by which funds were obtained during a particular period and the way to which these funds were employed. In simple words. It is a statement of sources and applications of funds. MEANING AND CONCEPT OF FUNDS: The term funds has been defined in a number of ways.
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a.

In a narrow sense, it means cash only and a funds flow statement prepared on this basic is called a cash flow statement such a statement enumerates net effects of various business transactions in cash and takes into account receipts and disbursements of cash.

b.

Ina broader sense the term funds refers to money values in whatever form it may exist. other. Here funds means all financial resources used in business whether in the form of men, material , money, machinery and

c.

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 business are invested partly in fixed assets in the form of fixed capital and partly kept inform of liquid or hear liquid form as working capital.

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 assets 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. If the effect of transaction results in the increase of funds. It is called a source 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
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said to be a source or inflow of funds and it results in decrease of working capital, it is said to be an application or outflow funds. In simple language funds move when a transaction effects. i. ii. iii. iv. A current assets and a fixed assets, or A fixed and a current liability. A current assets and a fixed liability. A fixed liability and current liability.

And funds do not move when the transaction affects fixed assets and fixed liability or current assets and current liabilities. Kenneth medley and Ronald Gibers define the term funds as one used in the sense of spending power, it refers to the value embedded in assets. According to Bonneville and Dewey funds constitute the prime importance in sharing and operating any business enterprise. In the ordinary parlance. Funds mean cash only, but it has got several different concepts as mentioned below. Funds may mean: a. b. c. d. e. Cash only Net working capital i.e., current assets less current liabilities. Total resources or total funds. Internal resources only. Net worth i.e., owners equity capital plus reserves.

CURRENT AND NON-CURRENT ACCOUNTS: To understand flow of funds it is essential to classify various accounts and balance sheet items current and non-current categories.
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Current accounts can either be current assets or current liabilities. Current assets are those assets which in the ordinary course of business can be or will be converted into cash with in a short period of normally one accounting year. Current liabilities are those liabilities which are intended to be paid in the ordinary course of business with in a short period of normally one accounting year out of the current assets or the income of the business.

FUNDS FLOW STATEMENT The following is the list of current or working capital accounts: List of current or working capital accounts: Current Liabilities Current Assets
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1. Bills payable 1. Cash in hand 2. Sundry creditors or account 2. Cash at bank payable 3. Accrued or outstanding expenses 4. Dividends payable 3. Bills receivable 4. Sundry debtors

or

accounts

receivable 5. Bank overdraft 5. Short term loans and advance 6. Short term loans advances and 6. Temporary or marketable deposits 7. Provision against current assets investments 7. Inventories or stocks such as [a] Raw materials [b] Work in progress. [c] Stores and spares. [d] Finished goods 8. Provision for taxation, if it does 8.. Prepaid expenses not amount to appropriation of profits. 9. Proposed dividends (maybe a 9. Accrued incomes current non-current Liability).

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List of non-Current (or) Permanent Capital Accounts:

Non-current or permanent liabilities 1. Equity share capital 2. Preference share capital 3. Redeemable preference share capital 4. Debentures 5. Long term loans 6. Share premium account 7. Share forfeited account 8. Profit and loss account (balance of 9. 10 11 12 profit ie., credit Balance). Capital reserve Non-current or permanent assets 1. Good will 2. Land 3. Building 4. Plant and Machinery 5. Furniture and Fittings 6. Trade Marks 7. Patent Rights 8. Long term investment 9. Debit balance of profit and loss

account. Capital redemption reserve 10. Discount on issue of shares Provision for depreciation against 11 Discount on issue of debentures fixed assets Appropriation of profits [a] General reserve [b] Dividend equalization Fund [c] Insurance Fund [d] Compensation fund [e] Sinking fund [f] Investment fluctuation fund [g] Provision for taxation. [h] Proposed dividend. 12 Other Deferred expenses

FUNDS FLOW STATEMENT Funds flow statement is the statement of sources and application of funds. It is also called as funds where got and where gone statement Almond Coleman observed. The funds statement in a statement summarizing the significant

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financial changes which have occurred between the beginning and the end of companys accounting period. There are 4 steps involving in preparation of funds flow statement: a. b. c. Ascertain the funds from operations. Preparation of statement of changes. Computation of any missing figures as to profit or loss on Sale of fixed assets purchases or sale of fixed assets and the amount of depreciation on fixed assets etc. d. Finally preparation of funds flow statement.

Foulke defines this statement as: A statement of sources and appreciation of funds in technical device designed to analyse the changes in the financial condition of a business enterprise between two dates In the words of Anthony the funds flow statement describes the sources from which additional funds were derived and the use to which these sources were put. F.C.W.A. in glossary of management accounting terms defined funds flow statement as a statement either prospectus or retrospects, setting out the sources and applications of the funds of an enterprise. The purpose of the statement is to indicate clearly the requirement of funds and how they are proposed to be raised and the efficient utilization and application of the same. Thus funds flow statement in a statement which indicates various means by which the funds have been obtained during a certain period and the ways to which these funds have been used during that period. The term funds used here means working capital i.e., the excess of current assets over current liabilities.

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Funds flow statement is called by various names such as sources and application of funds; statement of changes in financial position, sources and uses of duns; summary of financial operation, where came in and where gone out statement, where got, where gone statement, movement of working capital statement, movement of funds statement, funds received and disbursed statement; funds generated and expended statement; sources of increase and application of decrease; funds statement etc. Difference between funds flow statement and income statement. Funds Flow statement Income Statement It highlights the changes in the 1. It does not reveal the inflows and financial position of a business and indicates the various means by which funds were obtained during a particular period and the ways to which these funds were employed. 2. It is complementary to Income 2 statement income statement helps the preparation of funds flow statement. 3. While preparing statement both funds capital flow 3. Only revenue items are considered. and 4. It is prepared in a prescribed format. Income statement is not prepared from funds flow statement. outflows of funds but depicts the items of expenses and incomes to arrive all the figure of profit or loss.

revenue items are considered. 4. There is no prescribed Format for preparing a funds flow statement.

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Difference between funds flow statement and balance sheet Funds Flow statement Income Statement It is a statement of changes 1. It is a statement of financial financial position and hence in position on a particular date

dynamic in nature and here is static in nature. 2. It shows the sources and uses of 2. It depicts the assets and funds in a particular period of liabilities at a particular point time of time. 3. It is tool of management for 3. It is not of much help to financial analysis and helps in management in making making decisions. decision. 4. Usually schedule of changes in 4. No such schedule of changes working capital has to be is required rather profit and loss account is prepared. prepared before preparing funds flow statement.

USES, SIGNIFICANCE STATEMENT:

AND

IMPORTANCE

OF

FUNDS

FLOW

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 purpose of a funds flow statement is to reveal the changes in working capital on the two balance sheets dates. It also describes the sources from which additional working capital has been financial and the uses to which working capital
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has been applied such a statement is particularly useful in assessing the growth of the firm its resulting financing these needs. By making use of projected funds flow statement, the management can come to know the adequacy or inadequacy of working capital even in advance. One can plan the intermediate and long-term financial of the firm, repayment of long-term debts, expansion of the business, allocation of resources, etc., the significance or importance of a funds flow statement can be were followed from its various uses given below: (1) It helps in the analysis of financial operations: The financial statements reveal the net effect of various transactions on the operational and financial position of a concern. The balance sheet gives a static view of the resources of a business and the uses to which these resources have been put at a certain point of time. But it does not disclose the causes for changes in assets and liabilities between two different point of time. the liquidity position of the company. The funds flow statement explains causes for such changes and also the effect of these changes no Sometimes a concern may operate profitably and yet its cash position may become more and more course. The funds flow statement gives a clear answer to such a situation explaining what has happened to the profit of the firm. (2) It throws light on many perplexing questions of general interest:

Which other wise may be difficult to be answered, such as: a. b. c. Why were the net current assets lesser inspite of higher profits and viceverse. Why more dividends could not be declared inspite of available Profit? How was it possible to distribute more dividends than the Present earning?
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d. e.

What happened to the net profit? Where did they go? What happened to the proceeds of sale of fixed assets or issue of Shares, debentures etc?

(3)

It helps in the formation of a realistic dividend policy: Sometime a firm has sufficient profit available for distribution as dividend

but yet it may not be advisable to distribute dividend for lack of liquid or cash resources. In such causes, a funds flow statement helps in the formation of a realistic dividend policy. (4) It helps in the proper allocation of resources: The resources of a concern are always limited and it works to make the best use of these resources. A projected funds flow statement constructed for the future help in making managerial decision. The firm can plan the deployment of its resources and allocate them among various application.

(5)

It acts as a future guide: A project funds flow statement also acts as a guide for future to the

management. The management can come to know the various problems it is going to funds can be projected well in advance and also the timing of these needs. The firm can arrange to finance these needs more effectively and avoid future problem. (6) It helps in appraising the use of working capital:
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A funds flow statement helps in explaining how efficiently the management has used its working capital and also suggests way to improve working capital position of the firm. (7) It helps knowing the overall credit worthiness fo a firm: The financial institutions and banks such as state financial institutions, industrial development corporation, industrial finance corporation of India, industrial development bank of India etc., all ask for funds flow statement constructed for a number of years before granting loans to know the credit worthiness and paying capacity of the firm. Hence, a firm seeking financial assistance from these institutions has no alternative but to prepare funds flow statements.

Limitations of Funds Flow Statement: The funds flow statement has a number of uses; however, it has certain limitations also, which are listed below: 1. It should be remembered that a funds flow statement is not a substitute of an income statement or a balance sheet. 2. It cannot reveal continuous changes.
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It provides only some

additional information as regards changes in working capital.

3. 4. 5.

It is not a original statement but simply a re-arrangement of data given in the financial statement. It is essentially historic in nature and projected funds flow statement cannot be prepared with much accuracy. Changes in cash are more important and relevant for financial management than the working capital.

Procedure for Preparing a Funds Flow Statement: Funds flow statement is a method by which are study changes in financial position of a business enterprise between beginning and ending financial statement dates. Hence, the funds flow statement is prepared by comparing two balance sheets and with the help of such other information derived from the accounts as may be needed. 1. 2. Broadly speaking the preparation of a funds flow statement consists of two parts. Statement of schedule of changes in working capital Statement of sources and application of funds.

(1)

Statement of schedule of changes in working capital. Working capital means the excess of current assets over current liabilities.

Statement of changes in working capital between the two balance sheet dates. This statement is prepared with the help of current assets and current liabilities derived from the two balance sheets. As working capital =current assets current liabilities. So, i. ii. An increase in current assets increase working capital A decrease in current assets decreasing working capital.
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iii. i.

An increase in current liabilities decreasing working capital; A decrease in current liabilities increases working capital

Statement (or) Schedule of Changes in Working Capital

Particulars Previous Year Current Year Effect in working Capital Increase Decrease

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Current Assets Cash in hand Cash at Bank Bills receivable Sundry debtors Temporary investment Stock/inventories Pre-paid expenses Accrued incomes Total current assets Current Liabilities Bills payable Sundry creditors Outstanding expenses Bank over draft Dividend payable Proposed dividends Provision for taxation Total Current liabilities Working capital (CA-CL) Net increase/decrease in Working capital

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(2)

Statement of Sources and Application of Funds Funds flow statement is statement which indicates various sources from

which funds (working capital) have been obtained during a certain period and the uses or applications to which these funds have been put during the period. Generally, this statement is prepared in two formats a. Report firm b. T form or an account form or self balance type.

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Specimen of report form of fund flows statement: Sources of Funds Funds from operations Issue of share capital Issue of debentures Raising of long term loans Receipts from partly paid share, called up Sales of non current (fixed) assets Non-trading receipts such as dividends received Sale of investment (long term) Decrease in working capital (as per schedule of changes in working capital) Total Applications or uses of funds: Funds lost in operations Redemption of preference share capital Redemption of debentures Repayment of long-term loans Purchase of non current (fixed) assets Purchase of long-term investments Non-trading payments Payments of dividends Payment of tax Increase in working capital (as per schedule of changes in working capital Total Funds from Operation:
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Rs.

As a first step it would be convenient if the profit and loss appropriation account is prepared and net profit after tax is ascertained as a balancing figure. Then the funds from operations are worked out as follows: Particulars Net profit after tax ADD: 1. Non-cash expenses during the year [a] [b] Depreciation Writing off of goodwill, patents, trade marks, deferred revenue expenditure, Preliminary expenses etc. [c] 2. 3. 4. 5. Amortization of discount on issue of debentures or share etc. Loss on sale of fixed assets,. Extra-ordinary (or) non recurring losses. Profit on sale of fixed assets. Amortization of share premium or debenture premium etc. Rs. Rs.

LESS:

Funds from operations:

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Funds from operation are a source of fund during period. If it is still a negative balance it is loss from operations and is shown on the side of Application of funds but if it shows a positive it is a source of funds. P & L appropriation account Particulars To Interim Dividend To Proposed equity Dividend To Preference dividend To Transfer to reserve To Balance c/d Amount Particulars By balance b/d By excess provision written back By income tax provision not required By Dividend received By net profit after tax (balancing figure) (transferred from P&L account T form or an account form or self balancing type Amount -

Funds Flow Statement

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(for the year ended.) Sources Funds from operations Issue of share capital Issue of Debentures Raising of long-term loans receipt from partly paid share called up Sales of non current (fixed) Assets. Non trading receipts such as dividends. Sale of long-term investment Net decreasing in working capital Rs Applications Funds lost in operations Redemption of preference Share capital Repayment of long term loans Purchase of non-current (fixed assets) Purchase of long-term Investments Non trading payment. Payment of dividends. Payment of tax. Net increase in working capital Rs

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` WORKING CAPITAL MANAGEMENT

Working capital is the firms holdings of current assets such as Cash , receivables , inventory and marketable securities. Every firm required working capital for its day to day transactions such as purchasing raw material , for meeting salaries , wages , rents , rates , advertising etc. But there is much disagreement among various financial authorities (financial managers , accountants , businessmen and economists ) as to the exact meaning of the term working capital. Significance of working capital : The world in which real firms function is not perfect. It is characterized by the firms considerable uncertainty regarding the demand, market price, quality and availability of its own products and those of suppliers. These real world circumstances introduce problems to the firm must deal. While the firm has many strategies available to address these circumstances, strategies that utilize investment or financing with working capital accounts often offer a substantial advantage over the other techniques. The importance of working capital management is reflected in the fact that financial managers spend a great deal of time in managing current assets and current liabilities like. Arranging short term financing Negotiating favorable credit terms Controlling the movement of cash Administering accounts receivables Monitoring investment in receivables

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Decisions concerning the above areas play an important role in maximizing overall value of the firm. Once decisions concerning these areas are reached, the level of working capital is also determined in active decision sense, but falls out as residual from the decision just made. The management of working capital plays an important role in maintaining the financial health during the normal course of business. This critical role can be enunciated by examining the flow of resources through the firm. By far the major flow is the working capital cycle. This is the loop which starts at the cash and the marketable securities account, goes trough the current account as direct labour and materials which are purchased and use to produce inventory, which in turn is sold and generates accounts receivables, which are finally collected to replenish cash. The major point to notice about this cycle is that the turnover or velocity of resources through this loop is very high related to the other inflows and outflows of the cash account. Concept of working capital: There are two concepts of working capital 1. Gross Working Capital 2. Net Working Capital

Gross Working Capital: Gross working capital, simply called as working capital refers to the firms investment in current assets . Current assets are the assets, which in ordinary course of business can be converted into cash within an accounting year.

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Examples of Current Assets are: Cash and bank balances Short term loans and advances Bills Receivables Sundry Debtors Inventory Prepaid Expenses Accrued Incomes Money Receivable in 12 months The gross working capital concept focuses attention of two aspects of current assets management. a) Optimum investment in current assets and b) Financing of current assets. The consideration of the level of investment in current assets should avoid two danger points excessive and inadequate investment in current arranging funds to finance current assets. When ever a need for working capital funds arises due to the increasing level of business activity or for any other reason arrangement should be made quickly. Net Working Capital: Net working capital refers to the difference between the current assets and current liabilities. Current liabilities are those claims of outsiders, which are accepted, to
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mature for payment with an accounting year and include creditors, bills payable and outstanding expenses. Net Working Capital = Current Assets Current Liabilities Net working capital can be positive or negative. A positive net working capital will arise when current assets exceeds current liabilities. It is a quantitative concept. It . 1. Indicate the liquidity position of the firm and 2. Suggests the extent to which working capital needs may be

financed by permanent sources of funds. Types of working capital: Working capital can be classified into two categories i.e. 1. Permanent working capital 2. Temporary or variable working capital Permanent working capital : It is the minimum amount of investment in all current assets which is required at all times to carry out minimum level of business activities . Tandon Committee has reserved to this type of working capital as Core Current Assets . Characteristics of permanent working capital: Amount of permanent working capital remains in the business in one form or another. It also grows with the size of the business. It is permanently needed for the business, and therefore, it should be financed out of long term funds.
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Variable working capital : The amount of working capital over permanent working capital is known as variable working capital. The amount of such working capital keeps on fluctuating from time to time on the business activities . It may again be subdivided into seasonal working capital and special working capital Seasonal working capital is required to meet the seasonal demands of busy periods occurring at stated intervals on the other hand , special working capital is required to meet extraordinary needs for contingencies. Even like strikes , fire , unexpected competition , rising price tendencies or initiating a big advertisement campaign require such capital.

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CASH FLOW STATEMENT (CFS) In financial accounting a cash flow statement is a financial statement that shows a companys incoming and outgoing money (sources monthly or quarterly). The statement shows how changes in balance sheet and income accounts affected cash and cash equivalents, and breaks the analysis down according to operating, investing and financing activities. As an analytical tool the statement of cash flows is useful in determining the short-term viability of a company y, particularly its ability to pay bills. People and groups interested in cash flow statements include. Accounting personnel, who need to know whether the organization will be able to cover payroll and other immediate expenses. Potential lenders on creditors, who want a clear picture of a companys ability to sound. Potential employees or contractors, who need to know whether the company will be able to afford compensation. Definitions: Cash: Cash comprises cash on hand and demand deposit with banks. Cash equivalents:Cash equivalents are short term, highly liquid investments that are readily convertible in to known amounts of cash and which are subject to an insignificant risk of changes in value. Examples of cash equivalents are treasury bills, commercial paper etc.,
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repay.

Potential investors, who need to judge whether the company is financially

Cash flow: Cash flows are inflows and outflows of cash equivalents. It means the movement of cash in to the organization and movement of cash out of the organization. The difference between the cash inflows and cash out flows is known as net cash flow which can be either net cash in flow or net cash out flow. Classification of cash flows: Operating activities: Operating activities include the production sales and delivery of the companys product as well as collecting payment from its customers. This could include purchasing raw materials, building inventory, advertising and shipping the product. Items which are added back to the net income figure (which is found on the income statement) to arrive at cash flows from operations generally include. Depreciation (loss of tangible asset value over time) Deferred tax Amortization (loss of intangible asset value over time) Any gains or losses associated with an asset sale (unrealized gain/losses are also added back from the income statement)
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Investing Activities: Investing activities focus on the purchase of the long-term assets a company needs in order to make and sell its products, and the selling of any long term assets that are no longer needed by the company. Items under investing activities include: Capital expenditures which purchases (and sales) of property, plant and equipment. Investment: Financing Activities: Financing activities include the inflow of cash from investors such as banks and shareholders, as well as the outflow of cash to shareholders as dividends as the company generates income. Other activities which impact the long-term liabilities and equity of the company are also listed in the financing activities section of the cash flow statement. Items under the financing activities section include: Dividends paid.
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Sale or repurchase of the companys stock. Net borrowings.

BASIC INFORMATION FOR PREPARATION OF CFS The following basic informations are required to prepare a CGF: 1. Comparative BS: The first and the foremost requirement is the comparative BS in the beginning and at the end of the period to find out the changes taking place in different items of the BS. 2. Is for the period under consideration: The IS of the period is also required to find out the cash generated or used in the operation of the firm. 3. Additional Information: Together with BS and IS other relevant information is also required to identify the hidden information, if any. STEP BY STEP PROCEDURE TO PREPARE CFS 1. Calculate the net increase or decrease in cash and cash equivalents: For this purpose the opening balance of total cash and equivalents is compared with the closing balance of cash and equivalents. explains the procedure for this. The net increase/decease as shown here is the figure to be explained by the CFS. The table

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Increase/Decrease in Cash and Cash Equivalent Opening Balance Cash in Hand Cash at Bank Short term Investments Total **** **** **** **** Closing Balance **** **** **** ****

The difference between the totals of opening and closing balance will be the increase or decrease in cash and equivalents during the period. 2. Net cash flow from operating activities: On the basis of the information contained in the comparative Balance Sheets and the IS and the additional information, the net cash flow generated or used by operating activities may be ascertained. 3. Calculating of cash provided by financing and investment Activities: All other items (except current accounts already considered in step 2 above) are analyzed in the light of additional information to find out the resultant cash flow it any. For this purpose, different items and informations are classified into financing activities and investment activities.
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4. Preparation of CFS: On the basis of information collected and calculations made in the above steps, now the CFS can be prepared as per any of the formats given earlier. The net cash flow provided by operating activities plus financing activities plus investment activities is equal to the net change in cash and equivalents (as calculated in step 1). 5. Other items: If there is any other investment or financing transaction (not already covered in step 3 above) that should be disclosed in the CFS e.g. there maybe a purchase of an assets by issue of capital or debenture. This transaction will not find place in the usual CFS but must be disclosed to make the CFS a useful and a meaningful document.

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Pro-forma of cash flow statements

Particulars Cash flows from operating activities Cash receipts from customers Cash paid to Suppliers and employees Cash generated from operations Income tax paid Cash flow before extra-ordinary item + Extra ordinary items Net cash from operating activities Cash flow from investing activities: Purchase of fixed assets Proceeds from sale of equipment Interest received Dividends received Net cash from investing activities Cash flow from financing activities Proceeds from issuance of share capital Procedure from long-term borrowings Repayments of long-term borrowings Interest paid Dividend paid Net cash from operating activities Net increase in cash and cash Equipments

Amount XXX XXX -----XXX (XXX) XXX XXX ------

Rs.

XXX (XXX) XXX XXX XXX -----XXX XXX XXX (XXX) (XXX) XXX -----XXX -----XXX

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Cash and cash equipments at beginning of period Cash and cash equivalents at the end of period Sources and uses of cash: The following are the sources of cash 1. The profitable operations of the firm 2. Decrease in assets (except cash) 3. Increase in liabilities (including debentures or bonds) 4. Sales proceeds from an ordinary preference shares issue The following are the uses of cash: 1. 2. 3. 4. 5. The loss from operations Increase in assets (except cash)

XXX XXX

Decrease in liability (including redemptions of debentures or bonds) Redemptions of redeemable preference shares Cash dividends.

FFS and CFS: The cash flow statement (CFS) is different from the FFS in its approach. The difference between the two can be summarized as follows: 1. The FFS is based on the concept of WC where as, the CFS is based on cash which is only one of the element of working capital (WC). Thus, the CFS
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provides details of cash movements where as the FFS provides the details of funds movements. 2. The CFS considers only the actual movements of cash as FFS considers the movement as the funds on accrual basis.

Statement of changes in working capital 2004-2005

Particulars Current Assets:Inventories Sundry Debtors Cash & Bank Other current Assets Loans and Advances Total Current liabilities: Liabilities Provisions Total Working capital Increase in Working capital
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2004 (Rs)

2005(Rs)

Increase

Decrease

43,27,71,837 55,87,58,958 12,59,87,121 36,42,25,932 17,25,45,861 - 19,16,80,071 7,3,2,53,857 3,3,4,344 9,65,64,227 96,71,50,19 7 3,73,85,785 4,77,294 15,31,35,283 92,23,03,18 1 1,42,950 5,65,71,056 3,58,68,072 -

36,24,07,80 8 1,91,80,165 38,15,87,97 3 58,55,62,22 4

32,49,92,501 70,08,921 33,20,01,42 2 59,03,01,75 9

3,74,15,307 1,21,71,244

47,39,535

23,22,87,67 8

23,22,87,678

Funds flow statement for 2004-2005

Sources Shares Reserves Secured loans Unsecured loans Amount Rs. 32,82,650 2,46,11,049 17,12,01,611 94,22,179 20,85,17,48 9 Application Deferred tax Investments Fixed Assets Increase in working capital 20,85,17,489 Amount Rs 77,16,279 3,84,09,810 15,76,51,865 47,39,535

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Interpretations for the year 2004-2005: When the statement of changes in workings capital is analyzed it is evident that there is an increase in inventories, other current Assets and loans and advances. There is a decrease in the cash position. Decrease in sundry debtors may mean that when compared to the previous year i.e., 2003-2004 there are less credit sales. The debtor has been decreased by 52%. When the current liabilities are observed, the liabilities have been paid off to some extent. In this year there is an increase in working capital. Funds flow statement shows that the major source of funds come from the secured and unsecured loans. They constitute of about 86% of total Sources of funds. The other 14% is from shares and reserves. The application of funds mainly consists of changes in working capital. The funds have been utilized for purchasing the fixed assets and investments.

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Statement of changes in working capital 2005-2006

Particulars Current Assets:Inventories Sundry Debtors Cash & Bank Other current Assets Loans and Advances Total Current liabilities: Liabilities Provisions Total Working capital Decrease in Working capital
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2005 (Rs)

2006(Rs)

Increase

Decrease

55,87,58,958 51,94,46,973 17,25,45,861 26,54,05,373 3,73,85,785 4,77,294 5,22,07,212 6,99,643

9,28,59,512 1,48,21,427 2,22,349 -

3,93,11,985

15,31,35,283 10,66,56,431 92,23,03,18 1 94,44,15,63 2

4,64,78,852

32,49,92,501 42,77,45,526 70,08,921 1,53,79,488 33,20,01,42 44,31,25,01 2 59,03,01,75 9 4 50,12,90,61 8

10,27,53,025 83,70,567

8,90,11,141

19,69,14,429 19,69,14,429

Funds flow statement for 2005-2006

Sources Shares Reserves Secured loans Unsecured loans Deferred tax Decrease in working capital 24,16,91,062 24,16,91,062 Amount Rs. 28,84,600 3,25,55,442 8,30,89,936 2,67,54,511 73,95,442 8,90,11,131 Application Investments Fixed Assets Amount Rs 1,61,09,754 22,55,81,308

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Interpretation: In this year there is a decrease in inventories and loans and advances. Decrease in inventories means there is an increase in sales. There is a decrease in inventories by 7%. There is an increase in debtors by 9,28,59,512 which means there are more credit sales in the year. Working capital has been decreased by 8,90,11,141 when compared to the previous year 2004-2005. In this year also the major source of funds came from secured and unsecured Loans it represents about 45.4% of the total sources. The organization has issued additional share in order to raise funds. During the year the funds are mainly used for purchasing the fixed assets and investment. Major parts of funds are mainly used for purchasing fixed assets.

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Statement of changes in working capital 2006-2007

Particulars Current Assets:Inventories Sundry Debtors Cash & Bank Other current Assets Loans and Advances Total Current liabilities: Liabilities Provisions Total Working capital Increase in Working capital 67,90,85,97 6 67,90,85,976 42,77,45,526 1,53,79,488 44,31,25,01 4 50,12,90,61 8 27,91,14,121 80,28,01,131 2,25,24,295 82,53,25,426 78,04,04,739 37,50,55,605 71,44,807 5,22,07,212 6,99,643 10,66,56,431 94,44,15,63 2 7,13,53,331 2,89,561 9,31,00,773 1,60,57,30,16 5 1,91,46,119 4,10,082 1,35,55,658 2006 (Rs) 2007(Rs) Increase Decrease

51,94,46,973 1,17,93,86,830 65,99,39,857 26,54,05,373 26,15,99,670

38,05k703

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Funds flow statement for 2006-2007

Sources Reserves Secured loans Unsecured loans Deferred tax Fixed Assets Amount Rs. 5,83,06,198 10,02,33,880 3,12,40,013 4,46,71,112 5,60,75,667 29,05,26,870 Application Increase in working capital Investments 1,14,12,750 29,05,26,870 Amount Rs 27,91,14,120

Interpretation:

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There is an increase in working capital due to the increase in inventories and cash. There is an increase of more than 55% in inventories. There is a decrease in sundry debtors. Other current assets and loans and advances. The liabilities are increased by 50%. This year also the company has borrowed funds. They are the main sources of funds consisting 35% of the total sources. Next major sources came from sale of fixed assets and researches. The company continued to make investments.

Statement of changes in working capital 2006-2007

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Particulars A) Current Assets inventories sundry debtors Cash & Bank Other current assets Loans & advences Total current assets

Previous Year 2007

Current Year 2008

Effect in working Capital Increase Decrease

117938683 1808705113 629318283 0 261599670 325658869 64059199 71353331 123204267 51850936 289561 316641 27080 93100773 224178076 131077303 160573016 2482062966 5

B) Current Liabilities Sundry creditors Proposed dividends Provision for tax on Distrinutable Units provision for Taxes ( Net on advance payments ) Provision for leave encashment Current liabilities Working capital (CACL) Net increase/decrease in working capital

804207614 1235291362 15925088 21233450 2706469 3608625 2486256 0 9100314 7250699

431083748 5308362 902156 6614058 7250699

825325427 1276484450 780404738 1205578516 425173778 120557851 1205578516 6 425173778 87633280 876332801 1

Funds flow statement for 2007-2008

sources amount Rs application amount Rs
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reserves secured loans unsecured loans deferred tax

119992725 investments 342058433 fixed assets increase in working 27807685 capital 17477605 507336448

27671700 54490971 425173777 507336448

Interpretation: There is an increase in working capital due to the increase in inventories and loans & advances. There is increase of more than 65% in inventories there is also increase in loans and advances more than 71%. There is increase in current liabilities of 65%. And provisions of 51%.
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As far as the firms sources are concerned there are four kinds of aspects. Those are 1) increase in outsiders funds like secured loans and unsecured loans.2) sale of fixed assets. 3) Deferred tax 4.) Increase in reserves. Among these four increases in outsiders funds is the major source. Since it occupies almost 75% in the firms sources. It indicates the firms have the ability to more invest in the firms fixed assets.

CASH FLOW STATEMETN FOR THE YEAR ENDED 31ST MARCH 2005 Cash Flow Statement
( for the year ended ------------)

Foods Fats & Fertilisers limited Rs.

2004-05 Rs.

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` A. Cash Flow From Operating Activities Net profit before tax Depreciation interest (net) loss on sale of assets Excess provision on Quoted securities profit on sale of assets Dividend received provision for leave encashment Operating profit before working capital changes less :adjustments for Working capital changes inventories trade and other receivables trade payables Cash generated from operations Direct taxes paid Net cash from operating activities B. Cash Flow From Investing Activities Purchase of fixed assets increase in capital Works in progress Sales of fixed assets Sale of investments Interest received Dividend received Purchase of investments Net cash from /used in investing activities C. Cash Flow From Financing Activities interest paid increase /(decrease) in long term borrowings increase /(decrease) in unsecured loans issue of equity shares share premium received 9422179 3282650 9847950 -54382227 171201611 -24374410 -172508637 6349134 100000 2721981 11267939 -38428322 -214872315

20872988 28266021 53056066 12532 -81488 -271416 -11267939 97065 69810841 90683829

-125987121 138043760 -38954078

-26897439 63786390 -12847435 50938955

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` Dividend paid tax on dividend Net cash from/ used in financing activities Net increase / decrease in cash and cash equivalents Cash and cash equivalents as at ---------( opening balance ) Cash and cash equivalents as at --------( closing balance ) -10000000 -1306875 128065288 -35868071 73253857 37385785

Interpretation: Cash from operating activities:

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In the present year i.e., 2004-2005. The net profit before tax is 2,08,72,988. It is decreased by 58% compared to 2003-2004. After adjustments cash from operating activities is 6,37,86,390. Cash from investing activities: During the year the cash inflows are lesser than the cash outflows from the investing activities. There is purchase of fixed out and investments and increase in capital works in progress. Cash from financing activities: In the year the cash generated from financing activities is more when compared to the operating and investing activities. This is due to the increase in secured loans and unsecured loans. At the end there is a net decrease in cash & cash equivalents by 3,58,68,072.

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2006 Cash Flow Statement
( for the year ended ------------)

Foods Fats & Fertilisers Limited Rs.

2005-06 Rs.

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` A. Cash Flow From Operating Activities Net profit before tax Depreciation interest (net) loss on sale of assets profit on sale of assets asstes written off Dividend received provision for leave encashment Operating profit before working capital changes less :adjustments for Working capital changes inventories trade and other receivables trade payables Cash generated from operations Direct taxes paid Net cash from operating activities B. Cash Flow From Investing Activities Purchase of fixed assets increase in capital Works in progress Sales of fixed assets Sale of investments Interest received Dividend received Purchase of investments Net cash from /used in investing activities C. Cash Flow From Financing Activities interest paid increase /(decrease) in long term borrowings increase /(decrease) in unsecured loans issue of equity shares share premium received Dividend paid tax on dividend 39311985 -49315411 101866649

56407087 31856107 64304282 3441539 -1515867 -9559873 23758 88549946 144957033

91863223 236820256 -8096802 228723454

-175857713 -100442215 12140640 0 2988510 9559873 -16109754 -267720659 -66628765 83089936 26754511 2884600 13419600 -5000000 -701250

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` Net cash from/ used in financing activities Net increase / decrease in cash and cash equivalents Cash and cash equivalents as at ---------( opening balance ) Cash and cash equivalents as at --------( closing balance ) 53818632 14821427 37385785 52207212

Interpretation:. Cash from operating activities:

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When compared to the previous year (2004-2005) the net profit before tax is increased by 63%. After the necessary adjustments the cash from operating activities is 22,87,23,454. It is increased by 72%. When compared to 2004-2005. Cash from investing activities: The organization has increased the use of cash for investing activities during this year by 5,28,48,344. this is due to purchase of fixed assets. Cash from financing activities: Cash from financing activities has been decreased by 7,42,46,656. i.e.,58%

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2007 Cash Flow Statement
( for the year ended ------------)

Foods Fats & Fertilisers Limited

2006-07

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` Rs. A. Cash Flow From Operating Activities Net profit before tax Depreciation interest (net) loss on sale of assets profit on sale of assets assets written off Dividend received provision for leave encashment Operating profit before working capital changes less :adjustments for Working capital changes inventories trade and other receivables trade payables Cash generated from operations Direct taxes paid Net cash from operating activities B. Cash Flow From Investing Activities Purchase of fixed assets increase in capital Works in progress Sales of fixed assets Sale of investments Interest received Dividend received Purchase of investments Net cash from /used in investing activities C. Cash Flow From Financing Activities interest paid increase /(decrease) in long term borrowings increase /(decrease) in unsecured loans Dividend paid tax on dividend Net cash from/ used in financing activities -659939857 32125894 375180792 Rs. 132256042 49259510 101170028 336278 -47520 55223 -664838 75054 150183735 282439777

-252633171 29806606 -20410969 9395637

-283141340 282907496 1981855 100000 4270113 664838 -11512750 -4729788 -105155246 100233880 31240013 -10382265 -1456113 14480269

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` Net increase / decrease in cash and cash equivalents Cash and cash equivalents as at ---------( opening balance ) Cash and cash equivalents as at --------( closing balance ) 19146119 52207212 71253331

Interpretation:

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Cash from operating activities: During this year the net profit before tax has been increased by 57%. The net cash from operating activities has been decreased when compared to 2005-2006. Cash from investing activities: In 2006-2007 the cash was majorly used for purchasing fixed assets. And purchase of investments. There is a source of cash in the form of sale of fixed assets and investments and interest received on loans and advances. Cash from financing activities: The main source of cash came from long term borrowings and unsecured loans. Net cash used in financing activities have been decreased by 73%.

CASH FLOW STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2008 Cash Flow Statement

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`
( for the year ended ------------)

2007-08 Rs. A. Cash Flow From Operating Activities Net profit before tax Depreciation interest (net) loss on sale of assets profit on sale of assets assets written off Dividend received provision for leave encashment Operating profit before working capital changes less :adjustments for Working capital changes inventories trade and other receivables trade payables Cash generated from operations Direct taxes paid Net cash from operating activities B. Cash Flow From Investing Activities Purchase of fixed assets increase in capital Works in progress Sales of fixed assets Sale of investments Interest received Dividend received Purchase of investments Net cash from /used in investing activities C. Cash Flow From Financing Activities interest paid increase /(decrease) in long term borrowings increase /(decrease) in unsecured loans Dividend paid tax on dividend -629318282 -209901035 430615593 187409991 430329581 Rs. 242919590 57333045 129168630 929712 -59135 45848 -8109

-408603724 21725857 -48509383 -26783526

-71040267 -49565238 3206869 691450 10606433 8109 -28363150 -134455794 -140411398 342058431 27807685 -15925088 -2706469

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Net cash from/ used in financing activities Net increase / decrease in cash and cash equivalents Cash and cash equivalents as at ---------( opening balance ) Cash and cash equivalents as at --------( closing balance )

210823161 51850936 71353331 123204267

Interpretation: Cash from operating activities:

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During this year the net profit before tax has been increased by 84%. The net cash from operating activities has been decreased when compared to 2006-2007. Cash from investing activities: In 2007-2008 the cash was majorly used for purchasing fixed assets. And purchase of investments. There is a source of cash in the form of sale of fixed assets and investments and interest received on loans and advances. Cash from financing activities: The main source of cash came from long term borrowings and unsecured loans. The major applications of the cash to interest, dividend payments.

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CHAPTER V

SUMMARY & SUGGITIONS Funds flow statements and cash flow statements is an essential part of overall corporate financial management. It is the art of anticipating and preparing
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for risk and uncertainties and overcoming obstacles. Management should be particularly interested knowing the financial strengths of the firm as well as the weakness of the firm to take suitable corrective decisions. Hence a study has been conducted on the cash flow and funds flow statements with reference to FFF Ltd., Tadepalligudem. The main objectives of the study are to evaluate the cash and funds flow statements. So, Funds flow and cash flow statements are important managerial tools for financial analysis. The FFF Ltd., has a unique place in Indian economy and rural development because of its multiple contributions in terms of employment and provisions of raw materials to other industries. Thats why it is suffered with a problem of over employment. The components of cash flow and funds flow statements have been explained in purview of FFF Ltd., of which the study projects the results regarding the net working capital of cash flow and funds flow statements.

It was suggested that: 1. When there is an increase in debtors there will be a block of money in debtors. So, reduce the credit period. Provide policies to debtors (like discounts).
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2. Investments are very high. So it should be reduced. 3. Cash from operations is very high. So, decrease in the working capital when obtaining loans from banks. 4. net profit is satisfactory 5. Adequate promotional activities should be taken. FINDINGS 1. Increase in working capital in 2004-2005 due to an increase in current assets. 2. There is a decrease in working capital in 2005-2006 due to an increase in liabilities and provisions and decrease in loans and advances. 3. Increase in working capital in 2006-2007, 2007-2008. 4. The net working capital of the company is decreased only in 2005-2006. 5. The reserves have been increased during all the 4 years. 6. The company is using more sources from secured and unsecured loans. 7. There is issue of shares in 2004-2005 and 2005-2006. 8. Cash from operating activities is more. 9. Net profit is increasing.

BIBLIOGRAPHY
FINANCIAL MANAGENENT I M PANDEY
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FINANCIAL MANAGENENT FINANCIAL MANAGENENT FINANCIAL MANAGENENT MAGAZINES: Business world Business week Business India WEBSITES

R P RUSTOGI PRASANNA CHANDRA M Y KHAN

www.fff.co.in www.google.com

ANNUAL REPORTS OF FFF LTMITED 2004-2005 TO 2007-2008

A study on FINANCIAL ANALYSIS THROUGH FUNDS FLOW & CASH FLOW STATEMENT OF FFF Ltd
In partial fulfillment of the requirements for the award of the degree of

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MASTER OF BUSINESS ADMINISTRATION

Submitted by R.V.RAJA SEKHAR (Enrollment No: 07A81E0057)

Under the guidance of Mr.D.Satyanarayana, M.A, M.COM, ICWA

Asst. Professor

SRI VASAVI ENGINEERING COLLEGE

(Affiliated to Jawaharlal Nehru Technological University, Hyderabad)

DEPARTMENT OF MANAGEMENT STUDIES Pedatadepalli, Tadepalligudem, west Godavari 2007-2009

(Affiliated to Jawaharlal Nehru Technological University, Hyderabad) DEPARTMENT OF MANAGEMENT STUDIES

SRI VASAVI ENGINEERING COLLEGE

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CERTIFICATE
This is to certify that the project work titled FIANACIAL ANALYSIS submitted by R.V.RAJA SEKHAR examined and adjudged sufficient as partial fulfillment for the award of the Master of Business Administration, by Jawaharlal Nehru Technological University, Kakinada from SRI VASAVI ENGINEERING COLLEGE, Tadepalligudem.

INTERNAL GUIDE

HEAD Department of Management studies

INTERNAL EXAMINER EXAMINER

EXTERNAL

DECLARATION

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I hereby declare that project report entitled "A STUDY management analysis through cash flow statement in FOODS FATS & FERTILISERS LTD , TADEPALLIGUDEM is original and has been carried out by me towards partial fulfillment for the award of the degree in master business administration submitted to the Department of Commerce & Management Studies, Sri Vasavi Engineering College Tadepalligudem I also declare that this project work is result of my own effort and the findings of the report are based on the information collected by me during this study.

Place: Tadepalligudem Date: (V. RAJASEKHAR RYALY)

ACKNOWLEDGEMENT

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I feel great pleasure to express my gratitude and thanks to all people who played roles for successful completion of my two months field work. I owe my gratitude to Mr. V. KIRAN KUMAR, Asst Professor, and Head of the Department, M.B.A. Sri Vasavi Engineering College, Tadepalligudem for his constant encouragement and for his valuable support throughout the project. I express my deep gratitude to Sri R.V.S.S.S.Prasada Rao, GM (Finance)

and Sri A Srinivasa Rao, Manager (Accounts) and staff of finance dept of FFF Ltd for their prompt help and co-operation for in collecting the information and data during my placement at FFF Ltd.

(V.RAJASEKHAR RYALY)

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INDEX
CHAPTER I INTRODUCTION TO STUDY SCOPE OF THE STUDY NEED OF THE STUDY OBJECTIVES OF THE STUDY METHODOLOGY OF THE STUDY LIMITATIONS OF THE STUDY CHAPTER II CHAPTER III CHAPTER IV CHAPTER V INDUSTRY PROFILE COMPANY PROFILE CONCEPTUAL FRAME WORK SUMMARY & SUGGESTIONS BIBLIOGRAPHY

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