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INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

Introduction to inventory m n !ement


Financial management is the managerial activity which is concern with the planning and controlling of the firms financial resources. Though it was a branch of economics till 1890 as a separate activity or discipline. It is of recent origin still it as no uni ue body of !nowledge of its own. "nd draws heavily on economics for its theoretical concepts even today. The sub#ect of financial management is of immense to both academician and practicing managers. It is of great interest to academicians the sub#ect is still developing and there are still certain areas when controversies e$ist for which unanimous solutions have been reached as yet. In financial management the wor!ing capital management plays a ma#or role. The wor!ing capital management will be effectively managed by inventory management. In my present chapter the inventory management will be discussed in these topics% importance of inventory management% nature of inventories% need to hold inventories% cost of holding inventories% other characteristics of inventory situations% types of inventory% economic order uantity% techni ues of inventory management.

Me nin! o" inventory m n !ement


Inventory management means safeguarding the company property in the form of inventories and maintaining it at the optimum level% considering the operating re uirements and financial resources of the business. Inventory management emphasi&es control over purchases% storage% consumption of materials and determining the optimum level for each item of investments.

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Im&ort nce o" Inventory M n !ement Inventory management is concerned with !eeping enough products on hand to avoid running out while at the same time maintaining a small enough inventory balance to allow for a reasonable return on investment. 'roper inventory management is important to the financial health of the corporation( being out of stoc! forces customers turn to competitors or results in a loss of sales. )$cessive level of inventory however% results in large carrying costs% including the cost of capital tied up in inventory warehouse fees% insurance etc. " ma#or problem with managing inventory is that the demand for a corporations product is to a degree uncertain. The supply of the raw materials used in its production process is also somewhat uncertain. In addition the corporations own production contains some degree of uncertainty due to possible e uipment brea!downs and labor difficulties. *ecause of these possibilities% inventory acts as a shoc! absorber between product demand and product supply. If product demand is greater than e$pected% inventory can be depleted with out losing sales until production can be stepped up enough to select the une$pected demand. +owever inventory is difficult to manage because it crosses so many lines of responsibility. The purchasing manager is responsible for supplies of raw material and would li!e to avoid shortages and to purchases in bul! order ta!e advantages of uantity discounts. The production manager is responsible for uninterrupted production and wants to have enough raw materials and wor! in process% inventory on hand to avoid disruption in the production process. The mar!eting manager is responsible for selling the product and wants to minimi&e the chances of running out of inventory. The financial manager is concerned about achieving an appropriate overall rate of return. Funds invested in an inventory are idle and do not earn a return.

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N ture o" Inventorie' Inventories are stoc! of the product a company is manufacturing for sale and components that ma!e up the product. The various forms in which inventories that e$ist in manufacturing company are ,aw materials -or!.in.process Finished goods R ( m teri )' These are those basic inputs that are converted into finished product through the manufacturing process. ,aw materials inventories are those units which have been purchased and stored for future production. *or+,in,&roce'' These inventories are semi.manufacture products. They represent products that need more wor! before they became finished for sale. -ini'.ed !ood' These inventories are those completely manufactured products which are ready for sale. /toc!s of raw materials and wor!.in.process facilitate production while stoc! of finished goods is re uired for smooth mar!eting operations. Thus% inventories serve as lin! between the production and consumption of goods. Need to .o)d inventorie'

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0aintaining of inventories involves trying up the companies and incurrence of storage and handling cost. There are three general motives for holding inventories.

Tr n' ction motive It emphasi&es the need to maintaining inventories to facilitate smooth production and sales operation.

$rec ution ry motive It necessitates the holding of inventories to guard against ris! of unpredictable changes in demand and supply force and other factors. S&ecu) tive inventorie' It influences the decision to increase or reduce inventory level to ta!e advantage of price fluctuations. The firm should always avoid a situation of over investment or under investment in inventories. The ma#or dangers of over investment in inventories are i. 1nnecessary tie up of the funds and loss of profits. ii. )$cessive carrying cost. iii. The ris! of li uidity. The conse uences of under investment in inventories are i. 'roduction hold.ups ii. Failure to meet delivery commitments. Inade uate raw materials. iii. -or!.in.process will result in fre uent in production interrupts.

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INVENTORY MANAGEMENT LTD "n efficient inventory management should

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)nsure a continuous supply of raw materials to facilitate uninterrupted production. 0aintain sufficient supply of raw materials in periods of short supply and anticipate price changes. 0aintain sufficient finished goods inventory for smooth sales operation and efficient customer service. 0inimi&e the transportation cost on time. 2ontrol investment in inventories and !eep it at an optimum level %o't o" .o)din! inventorie' The determination of inventory cost is essentially an income measurement problem% a means where by there is rational orderly% systematic interpretation of the effect on the economic progress of the company of e$penditures involved ac uiring goods or in maintaining and operating productive facilities. "bility to uantify and develop rigorous models of most managerial problems is dependent on the determination behavior of relevant costs. The practical application of such models is also dependent on ability to obtain the cost data. ,elevant inventory costs which change with level of inventory are listed below. Orderin! co't' )very order is placed for stoc! replenishment% certain cost are involved. The ordering cost may vary% dependent upon type item. This cost of ordering includes 'aper wor! cost% typing and dispatching order. Follow.up costs the follow.up re uired ensure timely supplies include the travel cost for purchases follow.up% telephone tele$ and postal bills. 2ost involved in receiving the order inception% chec!ing and handling to the stores. "ny set up cost of machines if charged by supplier% either directly indicated in uotations or assessed thought uotations for various uantities.
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The salaries and wages to the purchase department are relevant for consideration if the purchasing function is carried out at the same level with e$isting staff.

There are certain costs that remain the same regardless of the si&e of the lot purchased or re uisitioned. This would be retailer ordering from the distributor% from the distributor ordering from a factory warehouse% for the factory warehouse ordering a new production run from the factory% and for the factory ordering raw materials from vendors. These !inds of costs are called preparation or set up costs. If we are ordering to replenish supplies at one stoc! point from another stoc! point% our interest is in the incremental clerical costs of preparing orders% following these orders. )$pediting them when necessary% etc% a large segment of the total cost of the ordering function is fi$ed% regardless of the number orders issued. )ven then it may be difficult determined satisfactorily the incremental cost% which results from one more order. 3uantity discounts and handling and transport cost are other factors% which vary lot si&es. 'reparation cost are the incremental costs of planning production% writing production orders% setting machines and controlling the flow orders through the factory. 0aterial handling cost in the plant have an effect on production lot si&es in much the same way that freight costs may effect purchase lot si&es. *esides the preparation costs of production% there are some other production costs% which have a direct bearing on inventory models% however. and separation costs. % rryin! co't' 2arrying costs constitutes all the costs of holding items in inventory for a given period of time. They are e$pressed either in rupees per period or as percentage of the inventory value per period.
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These are over time

premiums and the incremental cost of changing production levels% such as hiring% training%

INVENTORY MANAGEMENT LTD 2omponents of these costs include the following /torage and handling cost. 4bsolescence and deterioration costs Insurance Ta$es

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The cost of the funds invested in inventories /torage and handling costs include the cost of warehouse space. 4bsolescence costs represent the decline in inventory value caused by style changes that ma!e the e$isting product less salcable. 5eterioration costs represent the decline in value caused by changes in the physical uality of the inventory such as spoilage and brea!age. "nother element of carrying cost is the cost of insuring the inventory against losses due to theft% fire and natural disaster. In addition% a company must pay any personal property ta$es re uired by local and state government on the value of its inventories. 6i!e ordering costs% inventory.carrying costs contain both fi$ed and variable components. 0ost carrying costs vary with inventory level% but a certain portion of them. such as warehouse rent and depreciation on inventory handling e uipment. are relatively fi$ed over the short run% inventory model such as )43 model treat the entire carrying cost as variable. Stoc+ out co't' /toc!s out costs are incurred when ever a business is unable to fill orders because the demand for an item is greater than the amount currently available in inventory. -hen a stoc! out in raw materials occur% for e$ample% stoc! out costs include the e$penses of placing special orders 7bac! ordering8 and delays. " stoc! out in wor! in progress inventory results in additional costs of rescheduling and speeding production with in the plant% and it also may result in reduce production costs if wor! stoppages occur. Final% a stoc! out in finished goods
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inventory may result in the immediate loss of profits of customers decide to purchase the product from the competitor and in potential long.term losses if customers decide to order from other companies in the future.

Ot.er c. r cteri'tic' o" inventory 'itu tion' *esides the various types of costs involved% there are other characteristics of the situation that vary among types of inventory and must be captured if the decision model is to be an accurate representation of the physical circumstances. Le d time' 4btaining inventory usually re uires a lag from the initiation of the process until the inventory starts to arrive. This lead.time may be a few minutes or it may be many months% and depends in part on whether the firm is producing goods for its inventory or is ordering these goods from another firm. To produce goods for its own use% the firm must schedule% set up and ad#ust manufacturing e uipment. Source' nd )eve)' o" ri'+ 1ncertainties play a significant role in inventory situations. 1ncertainties usually involve lead times and demand times and demand levels% but situations where other variables are uncertain also occur. -here are substantial uncertainties and where the costs of stoc! out are important /trategies for addressing ris! must be formulated9 St tic ver'u' dyn mic &ro/)em' Inventory problems are usually divided into two types based on the characteristics of the goods involved. In static inventory problems% the goods have one.period life( there can be carrying over of goods from one period to the ne$t. Inventory situations where decisions involve the number of news papers to print% the number of greeting cards to purchase or the number of calendars to produce are static inventory problems. completely over time.
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In dynamic inventory

problems% the goods have value beyond the initial period( they do not lose their value

INVENTORY MANAGEMENT LTD

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Re&)eni'.ment r te 4nce goods start to be received from a vendor or from the firms own production processes% there are differences among goods in the rate at which they are received. /mall orders from vendors are li!ely to by receive all at once. For e$ample% assume that a firm has placed in order for 10 cases of paper towels. For such a small order the rate of replenishment is infinite( the firms inventories well go up 10 cases in a very short time as the goods are uic!ly unloaded. For large order from vendors% or for inventory produced with in the firm% the replenishment rate may be slower. Ty&e' o" inventory Inventories can be classified into five basic types on the basis of their production. These various types of inventories cannot be identified and segregated within the organi&ation. These five types are 01 M n !ement inventory They are needed because of the time re uired to move stoc!s from one place to another place. 21 Lot 'i3e Inventorie' These are as a result of buying materials in uantities larger than the immediate re uirement% with a view to minimi&ing cost of transportation% buying% receipt and handling and to obtaining uantity discount.

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INVENTORY MANAGEMENT LTD 41 -)uctu tion Inventorie'

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These are carried to ensure ready suppliers to consumer even when these are irregular and unpredictable fluctuations in their demand . 51 Antici& tion inventorie' These are usually maintained to meet a predictable but changing pattern of future demand. 61 %yc)e Inventorie' These result from managements attempt to minimi&e the total cost of carrying and ordering inventory. They arise from ordering in batches or lots% rather from needed basis. Inventories can be further classified into production inventories maintenance repair and operation 70,48 inventories% in.process inventories and finished goods inventories. 'roduction inventory consists of raw materials parts and components which are used in the production process forming parts of the final product. 0aintenance% repair and operation supplies which are used in the production of goods or services but do not become part of the product. In.process inventories are semi.finished materials% parts and assemblies found at various stages in the production operation. Finished goods inventory consists of completed products ready for sale.

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210 INDUSTRIAL $RO-ILE /ugarcane is one of the important crop for the I:5I": F",0),. /ugar ;#aggery are the main products that we get from /ugarcane% other products are baggage for industrial use li!e 0olasses for 5istillery% Filter 2a!e% 0ud%4rganic 0anure ; green leaves with tops for cattle feed are also available as by products% because of its multi uses sugarcane has played crucial feed role in Indian economy with ,s. <0%000 2ores T1,:4=), ; -IT+ >?0 /1@", 0I66/ ',4=I5I:@ assistance to >? million sugarcane farmer and < million wor!men directly and indirectly. In ".' sugar industry is an important "gro.based industry% occupying the second position ne$t to te$tile industry. The annual cultivated area is about 1.99 la!h hectares with a yield of 1>9.>? lac!s of tons during 9A.9B. "t present% there are CA sugar factories in the state and ?0D of them are in co.operative sector. The co.operative sugar units in the states have been suffering due to lac! of ade uate cane irrigation facilities% wor!ing capital% by.product utili&ation% e$cessive employment etc.%E. In "' sugar industry is an important agro based industry occupying the /)24:5 position ne$t to te$tile industry. The annual cultivated area is about 1.99 6"F+/ hectares with a yield of 1>9.>? 6"F+/ of tones during 199A.199B. "t present there are CA sugar factories in the state and ?0D of them are in co.operative sector. "ctually the wor! sugar derived from a /ans!rit word G/+"F,"H. India was the worlds largest producer of sugar cane occupies a very pride place in the world. In India% the cultivation of sugar cane is 10000 miles tons. The average yield% being ?A tons per acre of total land is occupied by sugar cane cultivation. /ugarcane is grown in almost all part of India% e$pect in colder regions and e$treme north Iammu ; Fashmir% +imachal'radesh.

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212 %OM$ANY $RO-ILE INTRODUTION KARNATAKA BE*ARIES DISTILLERIES SUGARS AND INDUSTRIES LIMITED $RO-ILE The irrigation in chittoor district mostly depends on open wells. ,echarge of water in the wells depends in ground water level and rainfall. +owever% rainfall depends in monsoon which is uncertain. The soils in district are almost suitable fir sugarcane cultivation. The formers also having good !nowledge of growing sugarcane. In good olden days% total uantity of sugarcane produced in the district was converted as #aggery by ganugas 7bulloc! crushers8 and power crushers. The #aggery ma!ing was very difficult to the small farmers due to lac! of crushers and unfavorable prices. The big farmers also faced difficulty to crush the cane for long period. The #aggery made in the district was brought to the chittoor and pa!ala which are the mar!et places with railway transpiration. There was lit of e$ploitation of farmers by the #aggery mundi owners by advancing the money with high interest rates% commission and also not properly weightment. The price fluctuation created by the traders was also a reason for poor reali&ation% but there was no other choice to the formers.

NAME LO%ATION AND ADDRESS

7 7

K1B1D SUGARS AND DISTILLERIES MUDI$A$ANA$ALLI 8VILLAGE9 SUGALIMITTA 8$OST9

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$UNGANUR : 60; 25; %#ITTOOR 8DT9< A1$

214 BRIE- #ISTORY ABOUT T#E %OM$ANY The company was originally incorporated on 1Ath day of 4ctober% 198> under the name of /,)) T)61@1 /1@",/ 6I0IT)5. /ubse uently the name of the company was changed to /,)) ="::I /1@",/ ":5 I:51/T,)/ 6I0IT)5 on the ? th day of "pril% 1990. "gain subse uently the name of the company was changed to F*5 /1@",/ ; 5I/TI66),I)/ 6T5 on the 1st march% <00?. The company was initially promoted by /ri T. /urya 2handra rao% managing director and /ri /. @o!ul( e$ecutive directors commence its commercial production from 01 st Iuly% 199<. In the initial years if performance of the company was much below the brea! even levels. 5ue to poor performance% the company accumulated substantial cash loses and also defaulted in meeting the terms loan comities "IFIs. In these circumstances% the promoters have inducted /ri 5.F. "udi!esavulu as a co.promoter in order to facilitate the company to meet the cost overrun of the pro#ect and also provide for the short fall in the margins for wor!ing capital. /ri @o!ul has since come out of the board and left the company.

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215 MAIN OB=E%TS O- T#E %OM$ANY /ellers% 5istributors% /uper /toc!ists and Traders of /ugars and its derivatives% molasses biases and all materials and substances arising as *y products and waste products as manufacture of sugar.

To carry in the business as manufacturers% producers% brewers% *lenders% dealerJs distillers% stoc! lists and traders of rectified spirit% ethyl. "lcohol% gasohol% acetic acid% acetone anhydride% vinyl acetate% polymers% plastics% polyvinyl chloride% li uors and all products made there from.

To carry on the business as manufacturers% producers% pac!ers% 5ealers% stoc! lists and traders of furfural% bul! drugs% pharmaceutical and medical preparations% made out of *y.products of sugar or their derivatives.

To carry in the business as manufacturers% dealers% distributors% stoc! lists and traders of biogases pulp% paper pulp and pulp made out agricultural ,esidues or other fibrous materials% paper% newsprint% paper boards% mill boards% stew boards% cites paper of all !inds% paper bags% febrile bo$escartons% corrugate containers% wrapping and pac!ing materials.

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To carry on the business as planters% growers% cultivators% farmers and producers of sugarcane% sugar beet. To generate electrical power by conventional% non. conventional methods% including coal% gas 6ignite. naphtha oil % bio.mass% biogases% waste thermal solar% hydel% geo. hyderl% minor tidal waves any to promote% own ac uire% construct% establish% maintain% improve% manage operate% alter carry on% control. Ta!e in hire K lease% power plants% cogeneration plants% energy conversion pro#ects power houses% transmissions and distribution system for generation% transmission and supply of electrical energy to the state electricity board% state govt.% appropriate authorities% agricultural% household industrial% commercial% and any other consumer for industrial purpose in Indian and else where specified by the state K central govt. local authority in state electricity board and any other competent authorities by entering into necessary agreements.

$RESENT BOARD O- DIRE%TORS

NAME SRI1D1K1AUDIKESAVULU SRI1D1A1SRINIVAS SRI1L1SURYA %#ANDRA ROA SRI1N1V1VARADA RA=ULU SRI1RAMA%#ANDRAIA# M1G1G1NAIDU SRI1$1L1SAN=EEVA REDDY

DESIGNATION %#AIRMAN & MANAGING DIRE%TOR DIRE%TOR DIRE%TOR DIRE%TOR DIRE%TOR DIRE%TOR DIRE%TOR 8Nominee "or IREDA9

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216 $RODU%TION $RO%ESS -hite plantation sugar manufacturing from sugarcane is a continuous process involving several stages vi&.% clarification% concentrating% and crystalli&ation and oaring. In order to e$tract #uice from cane% the practice is to crush the cane in a random of a C.roller mill. In order to e$tract as much #uices possible% water is added to the crushed mass% which further dilutes whatever left over #uice. This e$tracted #uice is termed as Gmi$ed #uiceH. This will be in the both diluted and undiluted form. This mi$ed #uice is weighted in a weighing scale and sent for processing. The weighted mi$ed #uice is heated in G#uice heatersH in <stages. In the first stage and heating the #uice is heated from about C?c.B0c. This heated #uice is mi$ed with mil! of lime and sulphur.dio$ide% in a vessel% which are called Gclarifying agentsH. In the second stage of heating which is heated from about B0c.10Cc.

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These clarifying agents combined with various impurities to form Lprecipitation and the precipitations are allowed to settle down leaving Lclear #uice. The #uice retention time is about Chours. The clear #uice is further boiled in a set of tubular vessels !nown as Levaporators. This concentrated #uice is now called syrup which contains A0D solids% by weight. It contains several coloring matters% which have to be eliminated by neutrali&ed before the final stage of concentration. For this process the syrup is Lsulfated again with /4< gas. This clarification process is !nown as Ldouble sulphitation. This sulfate syrup is sent to Lpan floor where the final stages of boiling is the first stage where syrup other high purity materials are boiled to build up what is called as Lmassecuite i.e.% mi$ture of sugar crystals and molasses. 0assecuite is sub#ected to cooling in crystalli&es from where it is ta!en Lcentrifuging I.e.% method used to separate sugar crystals are nothing but pure Lsource and the dried graded and bagged. The molasses obtained are ta!en bac! for the subse uent stages of boiling. In the second stage the massecuite 7that is centrifuged8 is cured again continuous in centrifugal machines which leads to sugar. In the third stage 0assecuite is built.up with low purity materials and boiled heavily and then this massecuite is cooled much longer when compared to the other < massecuites in order to allow ma$imum e$haustion of source content. The sugar obtained is mi$ed with water and L0ango is prepared. The molasses obtained in final molasses from which no further e$haustion of sugar is possible is out for storage. 21> SALES The government of India% commission of "ndhra 'radesh% controls sugar sales of F*5 sugars and 5istilleries 6imited. /o there is no as such pro#ected sales target. 21; MAN$O*ER

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The F*5 sugars unit has wor!ers strength of >?0 and staff of about 90.the unit also has few +ousing 2olonies accommodating few of his wor!ers. 21? $OLLUTION %ONTROL The company has installed the re uired e uipment to prevent water and air pollution as per the standards laid by the "' pollution 2ontrol *oard. :ecessary steps have also been ta!en such as plantation of trees% sapling and seedlings in and around factory area and in the colony% to protect the environment ecology. 21@ RESEAR%# AND DEVELO$MENT The company has been attempting cultivation of various varieties of sugarcane in the notified area to identify the variety% which is more suitable to the e$isting agro.climatic conditions% continuous effort are also being made in this direction to grow sugarcane variety which gives higher sugarcane yield and higher recovery in the notified area.

210A DE$ARTMENTATION 01 *ARE #OUSE M In the department the field product is brought and prepared for dispatch. 21 ENGINEERING DE$ARTMENT. In this department spare part are made and old parts are repaired. 41 %ANING DE$ARTMENTS. In this department account is maintained for the amount of raw material brought in by the framers to the factory to the factory premises. 51Re'e rc. nd t.e Deve)o&ment.

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The functions of this department are inspection and testing. It ensures uality from input finished product. ?. $LANNING DE$ARTMENT, 'lanning department is lin!ed with mar!eting and technical department. This department plans all the specifications% finali&e the rates and prepare purchase order as and when re uired. A. MARKETING DE$ARTMENT. This department is the bac!bone of the entire company. It loo!s after the mar!eting aspects of the company. B. A%%OUNTS AND -INAN%E DE$ARTMENT . This department loo!s after the companys financial aspects and ma!es the wages and salaries of staff and wor!ers. ?1 #UMAN RESOUR%ES DEVELO$MENT. This department is reasonable for formulating% implementing% administering% monitoring and reviewing periodically the personal and +,5 policies and practices considered conductive to the overall development of the employees as well as the organi&ation.

ORGANISATION %#ART OKBD SUGARS AND DISTILLERIES LIMITED

V$ MARK ETING

V$ V$ R&D DE$ART -INAN%IAL DE$ART

%EO V$ V$ MIS DE$ART A%%OUNTS DE$ART

V$ ENGIN EERING

V$ #R

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DE$AR T MENT

MENT

MENT

MENT

MENT

DE$ART DE$ART MENT MENT

3 REVIEW OF LITERATURE Inventory 0anagement is concerned with !eeping enough product on hand to avoid running out while at the same time maintaining a small enough inventory balance to allow for a reasonable return on investment. 'roper inventory management is important to the financial health of the corporation. )$cessive level of inventory% results in large inventory carrying cost% including the cost of capital tied up in inventory warehouse fees% insurance etc.

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Inventory is needed for the definite consumption demand of materials% and to ta!e care of the uncertainty involved in the usage or availability of the materials. /ome times other authors described as the Gdecoupling functionH of the inventory of materials is maintained at the different stages of production. The inventory ta!ing care of the normal consumption re uirements i.e.% Gdepending upon the average consumption rates and average lead times for procurementKmanufacture of the material% inventories are !ept at the appropriate timesH is called the Gnormal inventoryH and the inventory ta!ing care of Ga production process% however continuous it maybe% is bound to have some interruptions( it may also have imbalances in the consumption and production rates of the materials at different stages. These interruptions and imbalances ma!e it necessary to !eep stoc!s of inventory between the different stages of the operationsH the aspect of this uncertainty is called the Gsafety stoc!H or Gbuffer stoc!H of inventory

Tec.niBue' o" inventory m n !ement 09 AB% n )y'e'


The "*2 method is an analytical method of stoc! control which aims at concentrating efforts on those items where attention is needed most. It is based on the premise that a small number of the items in inventory may typically represent the bul! money value of the total materials used in production process. -hile a relatively large number of

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items may represent a small portion of the money value of stores used and that small number of items should be sub#ect to the greatest degree of continuous control. 1nder this system% the materials stoc!ed may be classified into a number of categories according to their importance i.e.% their value and fre uency of replenishment during a period. The first category% we may call it the group of L" items% may consist of only a small percentage of total items handled but its combined value may be a large portion of the total stoc! value. The second category% naming it as group of L* items% may be relatively less important. In the third category consisting of L2 items% all the remaining items of stoc! may be included which are uite large in numberbut their value is not high. % te!orie' o" AB% n )y'i' In "*2 analysis the items are classified in three main categories based on their respective consumption value. 1. 2ategory L" itemsN The items% which are most costly and valuable% are classified as L" nearly 10D of the total number of items stored will account for B0D of total value of all items stoc!ed. <. 2ategory L* itemsN The items having average consumption value are classified as L* nearly<0D of total number of items will account for <0D of total value. /tatistical sampling is general useful to control them. C. 2ategory L2 itemsN The items having low consumption value are put in category G2H nearly B0D of total number as items will account for 10D total value. @enerally these items are slow and non.moving items in the stores% which are fre uently used for production process but with more uality. 29 VED c) ''i"ic tion This analysis is based on criticality of inventory% it is used to determine the criticality of the item and its effect on production and other services .it is specially used for classification of spare parts. If a part is vital% it is given = classification. if essential %then it is given ) classification and if it is not essential the part is given 5 classification for =

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items% a large stoc! of inventory is generally maintained %these item have immediate effect on production more attention paid for this items 3) E%ONOMI% ORDER CUANTITY The economic order uantity is that inventory level% which minimi&es the total of ordering cost and carrying costs. It is the uestion% how much to order the uantity when inventory is replenished. If the firm is buying raw materials% the It may be solved through )43. %OST O- #OLDING INVENTORIES The determination of inventory costs is essentially an income measurement problem% a means whereby there is a rational% orderly% systematic interpretation of the effect on the economic progress of the company of e$penditures involved in ac uiring goods or in maintaining and operating productive facilitates. "bility to uantify and develop rigors models of most managerial problems is dependent on the determination of the behavior of relevant costs. The practical application of such models is also dependent on ability to obtain the cost data. ,elevant inventory costs which change with the level of inventory are listed below. uestion is to purchase the uantity of( each replenishment and if it has to plan for production run% it is how much production to schedule.

Orderin! co't7 )very timer an order is placed for stoc! replenishment% certain costs are involved. The ordering cost may vary% dependent upon the type of item. +owever% an estimate of ordering cost can be obtained for a given range of items.

1. 'aper wor! costs% typing and dispatching an order.


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<. Follow Mup costs.the follow.up re uired to ensure timely to ensure timely supplies include the travel cost for purchase followOup% telephone% tele$ and postal bills. C. 2ost involved in receiving the order inspection% chec!ing and handling to the stores. >. "ny set up cost of machines if charged by the supplier% either directly indicated in uotations or assessed through uotations for various uantities. ?. The salaries wages to the purchase department are relevant for consideration if the purchasing function is carried out at the same decreases significantly% obviously a proportional amount of personnel will be transferred to other departments. % rryin! %o't'7 2arrying costs constitute all the costs of holing items in inventory for a given period of time. They are e$pressed either in rupees per unit per period or as a percentage of the inventory value per period. 2omponents of this cost include the following. 1. Stor !e nd # nd)in! co't': It includes the cost of warehouse space. <. O/'o)e'cence nd deterior tion co't':4bsolescence costsH represent the decline in inventory value caused by technological or style changes that ma!e the e$isting product less salable. G5eterioration costsH represent the decline in value caused by changes in the physical uality of the inventory% such as spoilage and brea!age. C. In'ur nceN The inventory against losses due to the theft% fire% and natural disaster. >. T De'7 " company must pay any Gpersonal property ta$es and business ta$esH re uired by local and state governments on the value of its inventory. ?. T.e co't o" "und' inve'ted in inventorie' : It is measured by the Gre uired rate of returnH on these funds. *ecause inventory investments are li!ely to be of Gaverage ris!H the overall weighted cost of capital should be used to measure the cost of these funds. A. Stor !e nd # nd)in! co't'N It includes the cost of warehouse space. B. O/'o)e'cence nd deterior tion co't':4bsolescence costsH represent the decline in inventory value caused by technological or style changes that ma!e the e$isting product less salable. G5eterioration costsH represent the decline in value caused by changes in the physical uality of the inventory% such as spoilage and brea!age. 8. In'ur nceN The inventory against losses due to the theft% fire% and natural disaster.

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" company must pay any Gpersonal property ta$es and business ta$esH

re uired by local and state governments on the value of its inventory. 10. T.e co't o" "und' inve'ted in inventorie' : It is measured by theH re uired rate of returnH on these funds. *ecause inventory investments are li!ely to be of Gaverage ris!H the overall weighted cost of capital should be used to measure the cost of these funds.

EOC "or n item i' rrived on t.e "o))o(in! ''um&tion' 01 5emand is continuous at a constant rate. 21 The process continues infinity. 41 :o constraints are imposed on uantities ordered% storage capacity% budget etc.% 51 ,eplenishment is instantaneous. 61 "ll costs are time invariant. >1 1nits are not available. )43 for an item is arrived by the following formula

)43P

< Q AD Q Co CH

-here
)43Peconomic order uantity 2oPcost of ordering an order "5P annual consumption of an item 2+Pcost of carrying one unitKyear

59 #ML c) ''i"ic tion The high .and medium and low 7+068 classification follows the same procedure as is adopted in "*2 classification. 4nly difference is that in +06% the classification unit value is the criterion and not the annual consumption value. The item of inventory should be listed to the descending order of unit value and it is up to the management to fi$ limits for the three categories. For e$ample% the the management may decided that all units with unit value of ,s.<000 and above will be + items% ,s 1000 to <000 0 items and less than ,s. 1000% l
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items. The +06 analyses is useful for !eeping control over consumption at department levels for deciding the fre uency of physical % and for controlling purchases. 69 SDE c) ''i"ic tion The /5) classification is based upon the availability of items and is very useful in the conte$t of scarcity of supply. In this analysis% / refers to scarce items% generally imported% and those which are in short. 5 refers to difficult items% which are available indigenously but are difficult items to procure. Items which have to comeform distance places or for which reliable suppliers are difficult to come by% fall in to 5 category. ) refers to items which are easy to ac uire and which are available in the local strategies The /5) classification. *ased on problems faced in procurement% is vital to the lead. time analyses and in deciding on purchases strategies. >9 MINIMUM,MAEIMUM TE%#NICUE The minimum Mma$imum system is often used in connection with manual inventory control system. The minimum uantity is established in the same way as any re. order point. The ma$imum is the minimum uantity plus the optimum lot Msi&e. In practice% a re uisition is initiated when% a withdrawal reduces the inventory below the minimum level% and the order uantity is the ma$imum minus the inventory status after the withdrawal. If the final withdrawal reduce the stoc! the stoc! substantially below the minimum level% the order uantity will be higher than the calculated )43. The effectiveness of a minimum system is determined by the method and precision with which the minimum and ma$imum parameters are established

;9 T*O BIN SYSTEM 4ne of the oldest systems of inventory control is the two.bin system% which is mainly adopted to control 2 group inventories. In the two Mbin system. /toc! of each item is separated in to two bins. 4ne bin contained stoc!( #ust enough to last from the date a new order is placed until it is received in inventory. The other bin contains a uantity of stoc!. )nough to satisfy probable demand during the period of replenishment.to start with % the

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stoc! is issued from the first bin. -hen the first bin is empty% an order for replenishment is placed% and the stoc! in the second bin is utili&ed until the order material is received /uch a method is appropriate to ideal conditions in which the rate of consumption is fairly constant and for items. The lead.time of which is fairly established and regular "lthough the system itself possesses a high degree of automacy% in practice% we need to allow for variation in the rate of consumption as well as lead.time. +owever% for such a system% the most desirable uantity to re.order is the )43. /ince the uantity to re.order is fi$ed in advance% intiation of replenishment action can be delegated to the lower staff and there is need to ta!e physical count of inventory levels.

510 STATEMENT O- T#E $ROBLEM

This is a study on the Inventory 0anagement and =aluation. " ma#or problem with managing inventory is that the demand for corporations products is to degree of uncertainty. The statement of the inventory management is concerned with !eeping enough products on
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hand avoid running out while at the same time maintaining as small enough inventory balance to allow for a reasonable return on investment. Inventory is difficult to manage because it crosses so many lines of responsibility. The supply of the raw materials used in its production process is also some what uncertain. In addition the corporations on production contain some degree of uncertainty due to possible e uipment brea!downs and labour difficulties1

512 OB=E%TIVE O- T#E STUDY


To classify the raw material for the better control To recommend proper inventory management To suggest suitable measures to improve the inventory management system

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To study the effective utili&ation of inventory To maintained large si&e of inventory of raw materials and wor! in process for efficient and smooth production and finished goods for uninterrupted sales operation To maintain a minimum investment in inventory to ma$imi&e profitability To study which item is having the high percentage of usage in the processing of finished goods.

To study the ma#or raw materials being used in chittoor co. operative sugar limited

514 LIMITATIONS O- T#E STUDY

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The information used primarily from historical annual reports available to the public and same does not indicate the current situation of the firm. 5etailed analysis could not be carried for the pro#ect wor! because of the limited time span. /ince financial matters are sensitive in nature the same could not be ac uired easily The study is based on the data given by the finance department which has its own limitations. The information is collected only the secondary data "n e$tensive analysis was not possible is short of time The study may not be detailed in all respect

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515 RESEAR%# DESIGN


The Term research design is defined as Gthe ways and methods that are followed in analy&ing the data availableH In the above statement it is uite clear that in order to find out the actual position of the company the various methods of analysis should be made. The data collected from the company is analy&ed through the following methods. D t %o))ection For this research wor! the data were collected from primary source as well as secondary source. 9 $rim ry 'ource 'rimary data was collected from personal interview and through observation and direct contact in finance deportment

/9 Second ry 'ource /econdary data was collected from Iournals% 2ompany broachers and Internet% and annual reports.

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516 St ti'tic ) too)'


%orre) tion met.od
1sing the correlation analysis we can find whether there is any relationship between the variables. 2orrelation and regression analysis show how to determine the nature and strength of the relationship between variables. The correlation analysis is used to determine the degree of the relationship between the variables. 2orrelation formulaN RST ............. : ,P ................................................ U RS < . R7S8 <
.............. ...........

. 7RS8 7RT8

U RT < . R7T8 < :

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51> NEED -OR T#E STUDY To reduce the wastage To avoid shortage of material To avoid lac! of material To manage inventory effectively To meet une$pected demands of material

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51; S%O$E O- T#E STUDY


The present study aims at the following +ighlight the need for and nature of inventory. 1nderline need for investing in current assets and elaborate the concept of inventory management. Focus on the need for analy&ing investment in inventory. 5iscuss the process of managing inventory.

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D t

n )y'i' & inter&ret tion

AB% ANALYSIS ON T#E YEAR 2AA;,2AA? CTY VALUE


1.A A B> 1>9 B> 9B 1C0 C9 <1 CB8.B? A?

ITEMS
6ime /ulpher 5esclant /ugarin /odium he$meter /eed slary 2olourrepitint "ntifoam agent oil Idrosulpet soda 0agnofloc! =iscosity reducer

CTY
>?800 ?90A 1A? B< 9? A9 >< 81 1?0 8 1>

VALUE
BC<80 C?>CA 1<<10 10B<8 B0C0 AA9C ?>A0 C1?9 C1?0 C0C0 910

F
>?.>9 <1.99 B.?B ?.A? >.CA >.1? C.C89 1.9A 1.9?? 1.88 0.?A

%UMLATIVEF
>?.>9 AB.>8 B?.0? 81.B 8A.0A 90.<1 9C.?9 9?.?? 9B.?1> 99.>> 100.00

AB% ANALYSIS
" " * * * 2 2 2 2 2 2

TABLE 6101 S#O*ING T#E AB% ANALYSIS -OR MATERIAL & %OM$ONENTS
/ :4 1 < C "*2 ":"6T/I/ " * 2 T4T"6 < C A

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7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

%#ART 610 S#O*ING T#E AB% ANALYSIS

A B C ANALYSIS
7 6 5 4 3 2 1 0 A B CATEGORY C

IN-EREN%E "bove table showing the details for stores differential that material are classified in " * 2. "bove <1.99D material given ". than above the >.CAD to below <1.99D material value is *. than below >.CAD material adding value is 2.

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AB% ANALYSIS ON T#E YEAR 2AA?,2AA@ CTY VALUE


1.A A B? 1?0 B? 9B 1>0 C80 <1 C9 AA

ITEM
6ime /ulpher 5esclant /ugarin /odium he$meter /eed slary 2olourrepitint magnofloc! Idrosulpet soda "ntifoam agent oil =iscosity reducer

CTY
??A00 10AB? <00 80 10? B? >? 10 1A0 8C 1?

VALUE
8989A0 A>0?0 1?00 1<000 B8B? B<B? AC00 C800 CCA0 C<CB 990

F
>1.B C0.1 B.0> ?.A> C.B1 C.>< <.9A 1.8 1.A 1.?< 0.?1

%UMLATIVEF
>1.B B1.8 B8.8> 8>.>8 88.19 91.A1 9>.?B 9A.CB 9B.9B 99.>9 100

AB% ANALYSIS
" " * * * * 2 2 2 2 2

TABLE 512 S#O*ING T#E AB% ANALYSIS -OR MATERIAL & %OM$ONENTS / :4 1 < C "*2 ":"6T/I/ " * 2 T4T"6 < > ?

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

%#ART 612 S#O*ING T#E AB% ANALYSIS


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A B C ANALLYSIS
6 5 4 3 2 1 0 A B CATEGORY C

IN-EREN%E "bove table showing the details for stores differential that material are classified in " * 2. "bove C0.1 D material given ". than above the C.><D to below C0.1D material value is *. than below C.><D material adding value is 2.

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AB% ANALYSIS ON T#E YEAR 2AA@,2A0A CTY VALUE


B? 1.A A.< C80 1?0 BB.? C9.? 98 1?0 << AA

ITEM
5esclant 6ime /ulpher magnofloc! /ugarin /odium he$meter "ntifoam agent oil /eed slary 2olourrepitint Idrosulpet soda =iscosity reducer

CTY
>?0A 8??00 1?AB? B< 1A00 <BB >90 1?C 9A C<0 >0

VALUE
CCB9?0 1CA8<< 9B18? <BCA0 <>000 <1>AB.? 19C?? 1>99> 1<>80 B0>0 <A>0

F
>8.0A 19.? 1C.1 C.9 C.? C.1? <.8 <.? 1.9 1.< 0.C9

%UMLATIVEF
>8.0A AB.?A 80.AA 8>.?A 88.0A 91.<1 9>.01 9A.?1 98.>1 99.A1 100

AB% ANALYSIS
" " * * * 2 2 2 2 2 2

TABLE 614 S#O*ING T#E AB% ANALYSIS -OR MATERIAL & %OM$ONENTS

/ :4 1 < C

"*2 ":"6T/I/ " * 2

T4T"6 < C A

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

%#ART 614 S#O*ING T#E AB% ANALYSIS

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A B C ANALYSIS
7 6 5 4 3 2 1 0 A B CATEGORY C

IN-EREN%E "bove table showing the details for stores differential that material are classified in " * 2. "bove 19.?D material given ". than above the C.1?D to below 19.?D material value is *. than below C.1?D material adding value is 2

AB% ANALYSIS ON T#E YEAR 2A0A,2A00


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ITEM 5esclant 6ime /ulpher /eed slary /odium he$meter /ugarin Idrosulpet soda magnofloc! 2olourrepitint "ntifoam agent oil =iscosity reducer

CTY 990> C910?0 AB1?0 18?0 19?0 9?0 ?0?0 <80 B?0 1C10 A00

CTY VALUE BB.9A<> 1.A?BA A.?>C 98 BA.? 1?? <C C8A 1<9 >0.0B8A A?

VALUE BB<1C9.A A>8<0>.? >C9CA<.? 181C00 1>91B? 1>B<?0 11A1?0 108080 9AB?0 ?<?0<.9 C900

F <8.1 <C.?B 1?.9B A.A ?.>< ?.C? >.<< C.9C C.?< 1.91 1.>1

%UMULATIVE F <8.1 ?1.? AB.>B B>.0B B9.>9 8>.8> 89.0A 9<.<9 9A.?1 98.>< 100

AB% ANALYSIS " " " * * * * 2 2 2 2

TABLE 615 S#O*ING T#E AB% ANALYSIS -OR MATERIAL & %OM$ONENTS / :4 1 < C "*2 ":"6T/I/ " * 2 T4T"6 C > >

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

%#ART 615 S#O*ING T#E AB% ANALYSIS

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A B C ANALYSIS
5 4 3 2 1 0 A B CATEGORY C

IN-EREN%E "bove table showing the details for stores differential that material are classified in " * 2. "bove 1?.9BD material given ". than above the C.9CD to below 1?.9BD material value is *. than below C.9CD material adding value is 2.

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AB% ANALYSIS ON T#E YEAR 2A00,2A02


CTY VALUE B? 1.AAC> A.?A 1?< BB.? 99 AB <> 1C0 C9.B C8? AB% ANALYSIS " " * * * * 2 2 2 2 2

ITEM 5esclant 6ime /ulpher /ugarin /odium he$meter /eed slary =iscosity reducer Idrosulpet soda 2olourrepitint "ntifoam agent oil magnofloc!

CTY 1800? ??>?<0 A9>A0 1900 1B00 1C<? 1>00 C?A? ACC 18<9 1CA

VALUE 1C?0CB? 9<<C88.A >??A?B.A <88800 1C1B?0 1C11B? 9C800 8??A0 8<<90 B<A11.C ?<CA0

F CA.8< <?.1? 1<.>< B.8B C.?9 C.?B <.?? <.CC <.<> 1.9B 1.>C

%UMULATIVE F CA.8< A1.9B B>.<A 8<.<A 8?.8? 89.>< 91.91 9>.C 9A.?> 98.?8 100

TABLE 616 S#O*ING T#E AB% ANALYSIS -OR MATERIAL & %OM$ONENTS / :4 1 < C "*2 ":"6T/I/ " * 2 T4T"6 < > ?

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

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%#ART 616 S#O*ING T#E AB% ANALYSIS

A B C ANALYSIS
6 5 4 3 2 1 0 A B CATEGORY C

IN-EREN%E "bove table showing the details for stores differential that material are classified in " * 2. "bove <?.1?D material given ". than above the C.?BD to below<?.1? D material value is *. than below C.?BD material adding value is 2.

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#i!. nd medium nd )o( c) ''i"ic tion


To classification on the raw material in the bases of the uantity value above 100 ,s is high and ?0 to 100 are medium and below ?0 are low
T#E %LASSI-I%ATION #IG# AND MEDIUM AND LO* ON T#E YEAR 2AA@,2A0A

ITEM
5esclant 6ime /ulpher magnofloc! /ugarin /odium he$meter "ntifoam agent oil /eed slary 2olourrepitint Idrosulpet soda =iscosity reducer

CTY
>?0A 8??00 1?AB? B< 1A00 <BB >90 1?C 9A C<0 >0

CTY VALUE
B? 1.A A.< C80 1?0 BB.? C9.? 98 1?0 << AA

VALUE
CCB9?0 1CA8<< 9B18? <BCA0 <>000 <1>AB.? 19C?? 1>99> 1<>80 B0>0 <A>0

%LASSI-I%ATION
0 6 6 + + 0 6 0 + 6 0

TABLE 61> S#O*ING MATERIALS &%OM$ONENTS S NO 1 # M L %LASSI-I%ATION + TOTAL C

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< C

0 6

> >

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9 %#ART 51> S#O*ING T#E # ML %LASSI-I%ATION

H M L CLASSIFICATION
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 H M L

IN-EREN%E The above table showing the detailed for stores material differentiation the material classified in high and medium and low the above uantity value is 100,s is high classification and above ?0,s to 100,s is medium and below ?0,s is low her high classification of material is low consumption and low classification of materials is high consumption and medium classification of raw material is consumption is medium

T#E %LASSI-I%ATION #IG# AND MEDIUM AND LO* ON T#E YEAR 2A0A,2A00

ITEM
5esclant

CTY
>?0A

CTY VALUE
B?

VALUE
CCB9?0

%LASSI-I%ATION
0

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INVENTORY MANAGEMENT LTD


6ime /ulpher 0agnofloc! /ugarin /odium he$meter "ntifoam agent oil /eed slary 2olourrepitint Idrosulpet soda =iscosity reducer 8??00 1?AB? B< 1A00 <BB >90 1?C 9A C<0 >0 1.A A.< C80 1?0 BB.? C9.? 98 1?0 << AA

KBD SUGARS & DISTILLERIES

1CA8<< 9B18? <BCA0 <>000 <1>AB.? 19C?? 1>99> 1<>80 B0>0 <A>0

6 6 + + 0 6 0 + 6 0

TABLE 61; S#O*ING MATERIALS &%OM$ONENTS S NO 1 < C # M L %LASSI-I%ATION + 0 6 TOTAL C > >

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

%#ART 61; S#O*ING T#E # ML %LASSI-I%ATION

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H M L CLASSIFICATION
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 H M L

IN-EREN%E The above table showing the detailed for stores material differentiation the material classified in high and medium and low the above uantity value is 100,s is high classification and above ?0,s to 100,s is medium and below ?0,s is low her high classification of material is low consumption and low classification of materials is high consumption and medium classification of raw material is consumption is medium

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T#E %LASSI-I%ATION #IG# AND MEDIUM AND LO* ON T#E YEAR 2A00,2A02

ITEM
5esclant 6ime /ulpher magnofloc! /ugarin /odium he$meter "ntifoam agent oil /eed slary 2olourrepitint Idrosulpet soda =iscosity reducer

CTY
>?0A 8??00 1?AB? B< 1A00 <BB >90 1?C 9A C<0 >0

CTY VALUE
B? 1.A A.< C80 1?0 BB.? C9.? 98 1?0 << AA

VALUE
CCB9?0 1CA8<< 9B18? <BCA0 <>000 <1>AB.? 19C?? 1>99> 1<>80 B0>0 <A>0

%LASSI-I%ATION
0 6 6 + + 0 6 0 + 6 0

TABLE 61? S#O*ING MATERIALS &%OM$ONENTS / :4 1 < C + 0 6 26"//IFI2"TI4: + 0 6 T4T"6 C > >

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

CHART 5.8 S#O*ING T#E # ML %LASSI-I%ATION

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H M L CLASSIFICATION
4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 H M L

IN-EREN%E The above table showing the detailed for stores material differentiation the material classified in high and medium and low the above uantity value is 100,s is high classification and above ?0,s to 100,s is medium and below ?0,s is low her high classification of material is low consumption and low classification of materials is high consumption and medium classification of raw material is consumption is medium

TABLE 61@ S#O*ING INVENTORY TURNOVER RATIOS7

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It denotes the speed at which the inventory will be converted into sales% thereby contributing for the profits of the concern. -hen all other factors remain constant% greater the turnover of inventory more will be efficiency of its management. This ratio is calculated as followsN

Inventory Turnover !t"o =

Cost of GoodsSold Aver!#eSto$% &elddur"n#t&e'er"od

1 %OST O- GOODS SOLD


1A%8<%>>%<<0 C%<A%1A%B0B 11%?<%>A%CB? <?%B?%>A%899 C8%10%9B%>?8 >>%C8%A8%C<0

YEAR
<00?.<00A <00A.<00B <00B.<008 <008.<009 <009.<010 <010.<011

AVERAGE STO%K
<C%>1%>B%888 1C%B?%9B%9B9 8%C0%A?%>CB 18%<>%A>%9<B <A%><%10%>01 <A%?B%0?%>CB

RATIO IN F
0.B1 0.<C 1.C8 1.>1 1.>> 1.AB

7Source'7 nnu ) re&ort' o" t.e KBDSDL9

%#ART 61@ S#O*ING T#E INVENTORY TURN OVER RATIO

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

INVENTORY TURNOVER RATIO 1.( 1.6 1.4 1.2 1 0.( 0.6 0.4 0.2 0 2006)2007 2007)200( 200()200* 200*)2010 2010)2011 2011)2012 YEARS

IN-ERN%E7 , The inventory turnover ratio indicates the efficiency of the firm in producing and selling its products. " low inventory turnover implies e$cessive inventory levels than re uired for production. The company have high ratio of inventory e$cept in the <00C.0> i.e. 0.<C it is not good. That is all stoc! stored in gowdons.

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

RATIO

INVENTORY MANAGEMENT LTD

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TABLE 610A S#O*ING T#E RA* MATERIAL TO INVENTORY TURNOVER RATIO

R ( m teri ) to inventory r tio G r ( m teri )' H inventory


YEAR <00B.08 <008.09 <00910 <010.11 <011.1< <01C.1> RA* MATERIALS <0>B>.< <0>B>.< <0>B>.< <0>B>.< <0>B>.< <0>B>.< INVENTORY <19AA<80C.B 9A8>9B>0.<B 1100>C1?9.00 C0>A>1>>9.? <81?8<198.C CC<CC8C80 R tio in F 0.009C<0B>1 0.0<11>01B 0.018A0?A09 0.00AB<0B?C 0.00B<B11<B 0.00A1A0A>9

Source'7 nnu ) re&ort' o" t.e KBDSDL9 %#ART 610A S#O*ING RA* MATERIAL IN TO INVENTORY RATIO

RAW MATERIAL TO INVENTORY RATIO 0.025 0.02 PERCENTAGE 0.015 0.01 0.005 0
200()0* 200*)10 2010)11 2011)12 2012)13 2013)14

YEARS IN-REN%E From the analysis of above data it is infers that the raw material uantum is constant is each and every year. *ut the D of raw material to inventory a little up and down movements in each and every year. 5ue to changes in variable e$penditure in production point

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TABLE 6100 S#O*ING DAYS IS INVENTORY The number of days inventory is also !nows as average inventory period and inventory holding period. " high number of days inventory indicates that there is a lach of demand for the product being sold. " low day in inventory ratio may indicated that the company is not !eeping enough stoc! on hand to meet demands

Num/er o" d y inventory G 4>6d y' H inventory turnover r tio


T /)e '.o(in! t.e inventory turn over d y' %OSTOGOODS SOLD 1A8<>><<0 C<A1AB0B 11?<>ACB? <?B?>A899 C8109B>?8 >>C8A8C<0 AVERAGE INVENTORY <C>1>B888 1CB?9B9B9 8C0A?>CB 18<>A>9<B <A><10>01 <A?B0?>CB RATIO IN F 0.B1 0.<C 1.C8 1.>1 1.>> 1.AB TURNOVER DAYS ?C A8 B9 11< 1?0 1C?

YEAR

<00B.08 <008.09 <00910 <010.11 <011.1< <01C.1>

Source'7 nnu ) re&ort' o" t.e KBDSDL9

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%#ART 6100 S#O*ING T#E INVENTORY IN DAY V I INVENTORY TURNOVER DAYS 200 DAYS 150 100 50 0 200()0* 200*)10 2010)11 2011)122012)13 2013)14 YEARS

IN-EREN%E The inventory turn over ratio trend over a period for si$ years was anallly&ed and it was found the inventory turn over ratio has fluctuated every year. "nd has increased in the following year from <00Cto <00B this shows that an idle turnover ratio was maintained and this is considered as positive indicator of operating efficiency and good from the point of the view of li uidity. The average inventory turn over days will come around days 99.?

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TABLE 6102 S#O*ING T#E INVENTORY TO %URREN ASSET TURNOVER RATIO

Inventory to current r tio G inventory H current ''et'


YEAR INVENORY
21*662(03.70 *6(4*740.27 11004315*.00 30464144*.50 2(15(21*(.30 C1><<8B<9.9

<00B.08 <008.09 <00910 <010.11 <011.1< <01C.1>

%URRENT ASSETS <<A8A8?11 11>?B999C 1C1888A1A C1C8A>100 C01C?CC?C CC<CC8C80

RATIO IN F 9A.8< 8>.?C 8C.> 9B.1 9C.>> 9>.A

Source'7 nnu ) re&ort' o" t.e KBDSDL9 %#ART 6102 S#O*ING T#E INVENTORY TO %URRENT RATIO INVENTORY TO CURRENT TURNOVER RATIO 100 *5 *0 (5 (0 75 200()0* 200*)10 2010)11 2011)12 2012)13 12013)14 YEARS

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PERCENTAGE

INVENTORY MANAGEMENT LTD IN-EREN%E

KBD SUGARS & DISTILLERIES

From the analysis of inventory to current assets ratio it is infers that the ratio of inventory to current assets is <010 is% <011% and <01<. ,espectively it is increased is inventory position in current assets
TABLE 6104 S#O*ING T#E INVENTORY TO -IEED ASSETS TURNOVER RATIO

Inventory to "iDed ''et' r tio G inventory H "iDed ''et'


YEAR INVENORY
21*662(03.70 *6(4*740.27 11004315*.00 30464144*.50 2(15(21*(.30 C1><<8B<9.9

<00B.08 <008.09 <00910 <010.11 <011.1< <01C.1>

-IEED ASSETS 11??A1A1C 11??A1A1C 11?9??11B 118CCA8BB 1<8AB9><C 1C00AAAB<

RATIO IN F 190.1 8>.>9 9>.9 <?B.> <18.8 <>1.?

Source'7 nnu ) re&ort' o" t.e KBDSDL9 %#ART 6104 S#O*ING T#E INVENTOY TO -IEED ASSETS RATIO

INVENTORY TO FIXED ASSETS RATIO 300 250 200 150 100 PERCENTAGE 50 0 200()0* 200*)10 2010)11 2011)12 2012)13 2013)14 YEARS
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IN-EREN%E

From the analysis of above data it is infers that the ratio of inventory to fi$ed assets it is decreasing from <009 to <010 in <011 it increased to <?B.>D in <011 is decreased to <18.8D and in <01< it is increased to <>1.?D
TABLE 6105 -INDING T#E %O RELATIONS#I$ BET*EN $UR%#ASES AND SALES

YEAR

SALES <01>8A?BC.CA 1C0?1B>CA 9A9<0C9> 1<>A<9A?A CA90?9?19 C?9BCA?<A

$UR%#ASES 11B?8<91C 118<9<>C1 109AB<C>< 1>BCA89<1 C>?ABC<AB <90?BC?AB

<00B.08 <008.09 <00910 <010.11 <011.1< <01C.1>

AIM To determine whether there is co. relationship between purchases of raw material and sales. SALES IN %ROSS <0.1>8 1C.0? 09.9< 1<.>A CA.90 C?.9B RSP119.>> $UR%#ASES IN %ROSS 11.B? 11.8< 10.9A 1>.BC C>.A? <9.0? RTP1<<.9A

YEAR

E2 >0?.A 1B0.C0 98.>0 1??.<? 1CA1.A1 1<9C.8> R7S8<PC>8>.C?

Y2 1C8.0A 1C9.B1 1<0.1< <1A.9B 1<00.A? 8>C.90

EY <CA.A> 1?>.<? 10.08 18C.?C 1<B8.?8 10>>.9<

<00B.08 <008.09 <00910 <010.11 <011.1< <01C.1>


:PA

R7T8<P<A?9.AA RSTP<908.008

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

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-ORMULA
RST ............. : ,P ................................................ U RS < . R7S8 <U RT < . R7T8 <
.............. ...........

. 7RS8 7RT8

<908.8 M 7119.>8 711<.9A8 ..................... A , P .................................................................... U C>8>.C? M 7119.>>8 < U <A?9.>1. 711<.1A8< ........... A A?9.C? , P ................. BC>.? , P 0.89 %ON%LUSION
SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

.......... A

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

There is high positive co. relation between sales and purchases of raw material

>10 -INDINGS
From the above analysis it is found that the inventory turnover ratio going on increasing from <00>.0? is 0.<CD to in <008.09 is 1.ABD% it leads to the gross profit ratio going on decreasing "s analysis of the above data it is found that the inventory to current assets ratio is <00>%us 9A.8<D in <00? is 8>.?CD % in <00A is 8C.>D %in <00B is 9B.1D% in <008 is 98.>>D and is <009 is 9>.AD "s analysis of the above date it is found that the ratio of inventory to fi$ed assets in <00> is 190.1D % in <00? is 8C.>9D% in <00A is 9>.9D % in <00B is <?B.>D % in <008 is <18.8D and in <009 is <>1.?D From high and medium and low classification method mainly three raw material items were classified high but it is utili&ation has is lees % remaining four materials were classified as both medium and low classification but low classification items are consumption is very high. The inventory turnover ratio indicates that conversion of the inventory of the cash is very fast through the study. It is increasing trend. The inventory tern over ratio has been increasing for the year <00?.0A to <00B.08 /how it is shows the effective and efficiency of the company inventory management system 6ime and sulper is having the high percentage usage in process of finished goods The ma#or raw material being used in chittoor co.operative sugar ltd are lime and sulpher and descalnt
SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

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The purchase of raw material are having highly positive correlation sales of finished goods

>12 SUGGESTIONS
I suggested that % there is increasing in the inventory turnover ratio% so it control its cost of production point for the en#oying of high @ross profit ratio I suggested that% the organi&ation may have to control cost% for increasing raw material to inventory ratio I suggested that the organi&ation may have too increase gradually the ratio of inventory to fi$ed asset I suggested that% the organi&ation may have to maintain sufficient portion of cash in current assets% becosCe is high ratio of inventory to current assets From the study " * 2 analysis of raw material the company was good show the company may be use these method for the their proper utili&ation and control of raw material Inventory should be given in accordance the change of technology ,egular feedbac! should be ta!en from the inventory management Implementation of the inventory should be emphasi&ed ,egular inventory must be further updating and modification The finance department has to maintain the same procedure to develop inventory management The company has to concentrate on research and development so that it can use the inventory efficiently and reduce wastages may has to

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2ompany it should strive for Ggetting the right goods to the place at the right time for the least costH.

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

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KBD SUGARS & DISTILLERIES

>14 %ON%LUSION
/ugar Industry needs inventory for smooth running of its activities. It serves as a lin! between production and distribution processes. There is generally a time lag between the recognition of a need and its fulfillment. The unforeseen fluctuations in demand and supply of goods also necessitate the need for inventory. It also provides cushion for future poses fluctuations. The investment in inventories constitutes the cost of significant part of current assetsKwor!ing capital in most of the underta!ings. Thus% it is very essential to have proper control as and when re uired and to minimi&e investment in inventors. The 2hittoor 2o.operative /ugars 6td maintain high closing balances of inventory it leads to over e$penditure so company should control over e$penditure to ma$imi&e profits.

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

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BIBLIOGRA$#Y I. 0. '":5)T 7<00?8% Gfinancial managementH% ninth edition vi!as publishing house pvt ltd. /. :. 0"+)/-",I 7<00A8% Gfinancial and management accountingH% fifth edition% sultan chand and sons% :ew 5elhi. 2. ,. F4T+",I% Gresearch methodology and techni uesH. /econd edition% new "gency international pvt ltd.
*"F),. , .' ; +4- -)66. ".2% Gthe preparation of reportsH% :ew Tor! ,onald press. /.'. @1'T+" 7199?8% Gstatistical methods% Gsultan chand and% co :ew 5elhi.

'.,"001,TT 7<00?8% Gproduction and operation managementH% new agency international pvt ltd.

"+1I" +.6% Geconomic environment of business% macroeconomic analysisG% chand;company ltd% :ew 5elhi% <00?.

7Source'7 nnu ) re&ort' nd 'tore' de& rtment o" t.e KBDSDL9

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*EB SITES
---. @oogle.com ---.Fbd/ugar ltd .com ) mail 2csugarsWrediff.com

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%OM$ARATIVE BALAN%E S#EET OK B D SUGARS AND DISTILLERIES LIMITED -OR T#E YEAR 40H4H2A0A LIABILITIES AMOUNT ASSETS 01S#ARE -UNDS /+",) 2"'IT"6 21RESERVES SUR$LUS 41LOAN -UNDS /)21,)5 64":/ 1:/)21,)5 64":/ 51%URRENT LIABILITIES & #OLDERJS 01-IEED ASSETS :)T *642F <B>>0BB00 2"'IT"6 -4,F I: 1?00000 ',4@,)// 21%URRENT ASSETS<LOANS <>>><1>1C ADVAN%ES 88199AA> I:=):T4,I)/ A08?<8BBB /1:5,T 5)*T4,/ A80A1<CB 2"/+ ; *":F *"6":2)/ 64":/ ; "5=":2)/ 41DE--ERED ASSET 51MIS%ELLANEOUS EE$ 61$RO-IT A%%OUNT & LOSS TAE &

AMOUNT

C<<A8C<98 898C008

88?C098> 100<?08A 1C>1<>00 BC<<<91A >081<11C 0 1189<0<10

TOTAL TOTAL >;>6@AA05 >;>6@AA05

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

$RO-IT & LOSS A%%OUNT -OR T#E YEAR ENDED 40H4H2A0A DES%RI$TION -OR T#E YEAR ENDED 40,4,A@ SUGAR DIVISION IN%OME /"6)/ ; 4T+), I:240) I:2,)"/)K75)2,)"/)8 I: /T42F/ EE$ENDITURE 24:/10'TI4: 4F ,"- 0"T),I"6 0":1F"2T1,I:@ )S'):2)/ /"6",I)/%-"@)/ ; 4T+), *):)FIT/ I:T),)/T ; FI:":2I"6 2+",@)/ 51TI)/ ; T"S)/ "50I:I/T,"TI=) )S'):2)/ ',)6I0I:",T ; /+",) I//1) )S' -,ITT): 4FF 5)',)2I"TI4: 64// F4, T+) T)", ',I4, '),I45 IT)0/ :)T 64// F4, T+) T)", 5)FF),)5 T"S "//)T 64// *,41@+T F4,-",5 F,40 ',)=I41/ T)", 64// 2",,I)5 T4 *"6":2) /+))T )",:I:@/ '), /+",).*"/I2;5I61T) 0A0AA6?A6 0.0C 0;@0542A .0.?8 00?@2A026 .0.?> 18>0<C99 04?64564@ 1<909C11 ><ACC1 1<>8<980 1CBC1?89 10<<?>>1> ?18<109 540422?0 <>18C<B1 0 <>18C<B1 10C>C<<< >0B><B0 <C?8>?08 0?0>>>?2A CB09<?8< ><ACC1 CAAAA<?1 <>0B>810 10AC<8A8> >AC>9>BA 119B>B?< 18CC?B01 <9<189B< ?>BA000 8>>>A11 CC<A<8 1?1BBB1A B99>118 1?9A>B0 1C0?BA8> 0 1<>18> 0 A1?<B19C 199A88B0 199C<1B1 ><<BAA?A ?>BA000 8?A8B9? CC<A<8 <9ACBB8B< .1B0B?<A>> 026>2622? 189>9010 0 0?@5@A0A C1?C<A88< .1B0B?<A>> 0556;524? $O*ER DIVISION TOTAL

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

%OM$ARATIVE BALAN%E S#EET OK B D SUGARS AND DISTILLERIES LIMITED -OR T#E YEAR 40H4H2A00 LIABILITIES 01S#ARE -UNDS /+",) 2"'IT"6 21RESERVES SUR$LUS 41LOAN -UNDS /)21,)5 64":/ 1:/)21,)5 64":/ 51DI--ERED LIABILITY 61%URRENT LIABILITIES 11C?8>C? >?5>>4406 TAE 8?01B9<? & #OLDERJS AMOUNT ASSETS 01-IEED ASSETS :)T *642F 1C08><10 2"'IT"6 <A<8<C>90 ',4@,)// 21%URRENT ASSETS<LOANS 1BB?89BA8 ADVAN%ES 1C>B89>8B I:=):T4,I)/ /1:5,T 5)*T4,/ 2"/+ ; *":F *"6":2)/ 64":/ ; "5=":2)/ 41DE--ERED ASSET 51MIS%ELLANEOUS EE$ 61$RO-IT A%%OUNT "55N 5IFF),):2) *)T-)): "//)T/ ; 6I"*I6ITI)/ 0A2226@0@ TOTAL TOTAL & LOSS <1B80000B >89B0> TAE 0 B>?C8C9> & -4,F I: <99<C>1?0 909A11? AMOUNT

1B?>>B?A9 80A89C9 <<1>C?A

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD ;?>??@245

KBD SUGARS & DISTILLERIES

;?>??@245

K B D SUGARS AND DISTILLERIES LIMITED $RO-IT & LOSS A%%OUNT -OR T#E YEAR ENDED 40H4H2A00 DES%RI$TION -OR T#E YEAR ENDED 40,4,0A SUGAR DIVISION IN%OME /"6)/ ; 4T+), I:240) I:2,)"/)K75)2,)"/)8 I: /T42F/ EE$ENDITURE 24:/10'TI4: 4F ,"- 0"T),I"6 0":1F"2T1,I:@ )S'):2)/ /"6",I)/%-"@)/ ; 4T+), *):)FIT/ I:T),)/T ; FI:":2I"6 2+",@)/ 51TI)/ ; T"S)/ "50I:I/T,"TI=) )S'):2)/ ',)6I0I:",T ; /+",) I//1) )S' -,ITT): 4FF 5)',)2I"TI4: ',4FITK64// F4, T+) T)", ',I4, '),I45 IT)0/ :)T ',4FITK64// F4, T+) T)", 6)//N',4=I/I4:/ F4, T"S"TI4: F,I:@) *):)FIT T"S 5)FF),)5 T"S "//)T 64// *,41@+T F4,-",5 F,40 ',)=I41/ T)", 64// 2",,I)5 T4 *"6":2) /+))T )",:I:@/ '), /+",).*"/I2;5I61T)
SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

$O*ER DIVISION CB9<1?A 0 4;@206> <<9?0BC C80>B<1 AA?>8 1>BC9A0> 0 9C<C8 0 ?<B??C1 2>2;5;06 .<<>8<??9 0 0 .<<>8<??9 0 0 .<<>8<??9 <9BC>9C8 6220;5@; 0.9>

TOTAL

<<<>>11C1 9C<<1A8< 406>>2?04 <?<<090BC 1?>98B<B <<<?B?B9 .9>B118A 0 81<???1 0 18><<>A8 4A;A52202 8A<0A01 8A<0A01 0 0 8A<0A01 1B><0C111 0>66?260A .0.CA

<<A<CC<8B 9C<<1A8< 40@565@>@ <?>?0>1>? 19C0C>>8 <<C<>1<B ?<A8>18 0 8<18B89 0 <CA9B999 44440>@2; .1C8A19?8 0 .1C8A19?8 0 0 0 .1C8A19?8 <0C9C80>9 20;?AAAA; 0.?8

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

%OM$ARATIVE BALAN%E S#EET OK B D SUGARS AND DISTILLERIES LIMITED -OR T#E YEAR 40H4H2A00 LIABILITIES 01S#ARE -UNDS /+",) 2"'IT"6 21RESERVES SUR$LUS 41LOAN -UNDS /)21,)5 64":/ 1:/)21,)5 64":/ 51DI--ERED LIABILITY 61%URRENT LIABILITIES CA<<CA0>C TAE 0 & #OLDERJS AMOUNT ASSETS 01-IEED ASSETS :)T *642F 0 2"'IT"6 .<0A?99B> ',4@,)// 21%URRENT ASSETS<LOANS <?C>088>A ADVAN%ES 10?91>>8B I:=):T4,I)/ /1:5,T 5)*T4,/ 2"/+ ; *":F *"6":2)/ 64":/ ; "5=":2)/ 41MIS%ELLANEOUS EE$ CAB<B8 89?8>A<0 C0C<C8111 8<?AA19 <90B?B9 & -4,F I: <8>0<><80 1<?<091C AMOUNT

TOTAL TOTAL

;AA?@@5A2

;AA?@5A0

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

K B D SUGARS AND DISTILLERIES LIMITED $RO-IT & LOSS A%%OUNT -OR T#E YEAR ENDED 40H4H2A02 DES%RI$TION -OR T#E YEAR ENDED 40,4,0A SUGAR DIVISION IN%OME /"6)/ ; 4T+), I:240) I:2,)"/)K75)2,)"/)8 I: /T42F/ EE$ENDITURE 24:/10'TI4: 4F ,"- 0"T),I"6 0":1F"2T1,I:@ )S'):2)/ /"6",I)/%-"@)/ ; 4T+), *):)FIT/ I:T),)/T ; FI:":2I"6 2+",@)/ 51TI)/ ; T"S)/ "50I:I/T,"TI=) )S'):2)/ 5)',)2I"TI4: $RO-ITHLOSS -OR T#E YEAR ',I4, '),I45 IT)0/ :)T $RO-ITHLOSS -OR T#E YEAR 5)FF),)5 T"S "//)T 64// *,41@+T F4,-",5 F,40 ',)=I41/ T)", 64// 2",,I)5 T4 *"6":2) /+))T >526404 05245>>0 2A>6@@;5 C01>>8?>? >0CC8?A? <CC00C0< 9>ACABA <9>>>AB0 98?<?1B 18?<9BCB 5424;?A02 7A><?C1C8 0 7A><?C1C8 0 0 1B1A<8B <A0<1 B??C1 98A<C9B 0 8C991 ?<B??C1 0;A4@;6? 71><C>AA18 0 71><C>AA18 0 0 C0C1A>8C< >0CA>?8? <CCB?8CC 19C<A0BC <9>>>AB0 99CA?08 <C80?<A8 55@50;;;A 7<0A?99B>8 0 7<0A?99B>8 0 0 C18<?1A8C 10BB0101A 526@62>@@ <80?09B 0 2?A6A@; C<10?AB80 10BB0101A 52?;6;;@> $O*ER DIVISION TOTAL

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

%OM$ARATIVE BALAN%E S#EET OK B D SUGARS AND DISTILLERIES LIMITED -OR T#E YEAR 40H4H2A02 LIABILITIES AMOUNT ASSETS AMOUNT

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD 01S#ARE #OLDERJS -UNDS /+",) 2"'IT"6 21RESERVES SUR$LUS 41LOAN -UNDS /)21,)5 64":/ 1:/)21,)5 64":/ 51DI--ERED LIABILITY 61%URRENT LIABILITIES "55N 5IFF),):2) *)T-)): "//)T/ ; 6I"*I6ITI)/ ?9998 TAE &

KBD SUGARS & DISTILLERIES

01-IEED ASSETS :)T *642F 0 2"'IT"6 .B8A>1A?0 ',4@,)// 21%URRENT ASSETS<LOANS CA?1><9>? ADVAN%ES A8<89>8B 0 >AB1>CA>B I:=):T4,I)/ /1:5,T 5)*T4,/ 2"/+ ; *":F *"6":2)/ 64":/ ; "5=":2)/ 41MIS%ELLANEOUS EE$ <>>8?< 1?09A>?0C CB?ABA89< 8>BABA< ?0ABC11 & -4,F I: <BB<?>9<> >C0918C

TOTAL TOTAL

?20@4552@

?20@@552;

K B D SUGARS AND DISTILLERIES LIMITED $RO-IT & LOSS A%%OUNT -OR T#E YEAR ENDED 40H4H2A02 DES%RI$TION -OR T#E YEAR ENDED 40,4,0A

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

SUGAR DIVISION IN%OME /"6)/ ; 4T+), I:240) I:2,)"/)K75)2,)"/)8 I: /T42F/ EE$ENDITURE 24:/10'TI4: 4F ,"- 0"T),I"6 0":1F"2T1,I:@ )S'):2)/ /"6",I)/%-"@)/ ; 4T+), *):)FIT/ I:T),)/T ; FI:":2I"6 2+",@)/ 51TI)/ ; T"S)/ "50I:I/T,"TI=) )S'):2)/ 5)',)2I"TI4: $RO-ITHLOSS -OR T#E YEAR ',I4, '),I45 IT)0/ :)T $RO-ITHLOSS -OR T#E YEAR 5)FF),)5 T"S "//)T 64// *,41@+T F4,-",5 F,40 ',)=I41/ T)", 64// 2",,I)5 T4 *"6":2) /+))T ;06>4>54 C91CC>B<> ?BA001A1 C1?>C><0 <818?0BC >8>00?1B 8B?9>0? 1918190C 6?6AA62A4 8;06>4>549 0 8;06>4>549 0 0 >C899BC9< B>>>>1AB 6045506>A

$O*ER DIVISION BC9>A?< 0 ;4@5>62 101B8A <<>AB9 818?C 8B88B>B 0 0 ?<B??9> 055;2>6@ 8;A;?AA;9 0 8;A;?AA;9 0 0 ;A;?AA;

TOTAL

>>AC9<0>> B>>>>1AB 62A?4>202 C91>CA?10 ?B8<>8>0 C1A<?<BC CA9BC8<0 >8>00?1B 8B?9>0? <>>?B>9B 6@@5;;?>2 8;?>50>6A9 0 8;?>50>6A9 0 0 ;?>50>6A

%OM$ARATIVE BALAN%E S#EET OK B D SUGARS AND DISTILLERIES LIMITED -OR T#E YEAR 40H4H2A04
SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD LIABILITIES 01S#ARE -UNDS /+",) 2"'IT"6 21RESERVES SUR$LUS 41LOAN -UNDS /)21,)5 64":/ 1:/)21,)5 64":/ 51DI--ERED LIABILITY 61%URRENT LIABILITIES TAE & #OLDERJS AMOUNT

KBD SUGARS & DISTILLERIES

ASSETS 01-IEED ASSETS :)T *642F 0 2"'IT"6 -4,F I: ',4@,)// 21%URRENT ASSETS<LOANS &

AMOUNT

<8AA0A<80 ?0<B?08

.?11<0C>C

<9<8C<CAA ADVAN%ES 110<>8C<C 0 <?B9BCC<C I:=):T4,I)/ /1:5,T 5)*T4,/ 2"/+ ; *":F *"6":2)/ 64":/ ; "5=":2)/ 41MIS%ELLANEOUS EE$ 1<<><A 1>?AA?18 1?AC0A<>A BC>898< 8B??B09

"55N 5IFF),):2) *)T-)): "//)T/ ; 6I"*I6ITI)/ TOTAL TOTAL

>A@@44>>@

>AA@@44>>@

K B D SUGARS AND DISTILLERIES LIMITED


SRI RAMA KRIS#NA $G %OLLEGE NANDYAL

INVENTORY MANAGEMENT LTD

KBD SUGARS & DISTILLERIES

$RO-IT & LOSS A%%OUNT -OR T#E YEAR ENDED 40H4H2A02 DES%RI$TION -OR T#E YEAR ENDED 40,4,00 SUGAR DIVISION IN%OME /"6)/ 6)//N)S2I/) 51TT 4T+), I:240) I:2,)"/)K75)2,)"/)8 I: /T42F/ EE$ENDITURE 24:/10'TI4: 4F ,"- 0"T),I"6 0":1F"2T1,I:@ )S'):2)/ /"6",I)/%-"@)/ ; 4T+), *):)FIT/ I:T),)/T ; FI:":2I"6 2+",@)/ "50I:I/T,"TI=) )S'):2)/ 5)',)2I"TI4: $RO-ITHLOSS -OR T#E YEAR ',I4, '),I45 IT)0/ :)T $RO-ITHLOSS -OR T#E YEAR 5)FF),)5 T"S "//)T 64// *,41@+T F4,-",5 F,40 ',)=I41/ T)", 64// 2",,I)5 T4 *"6":2) /+))T 55054;65 >@;>6?@ 6002A454 0 10C>?9<>? CA><80AC C0?A><98 <BCBA1A< 88>BB9C <0>0B0?> 22;A?2>06 855054;659 0 855054;659 0 0 <CA?0 1CC901 B?9>?11 C>8C> ?<BA<1C 04A>40A@ 8>@;>6?@9 0 8>@;>6?@9 0 0 10C>?9<>? CA>?1B1C C0A98199 C>9B0ABC 888<A<B <?A8C<AB 25A056;25 86002A4549 0 86002A4549 0 0 >0190C0A< <B1A8ACA 4;5;4552; <A118A>B .<1B91><1C 0?2@4??>0 A08A?<0 0 >A?>62A 0 0 >A?>62A >0B989?8< <B1A8ACA 4?A?2A@5; <A118A>B .<1B91><1C 0?@A264?0 $O*ER DIVISION TOTAL

Source7 nnu ) &u/)i'.ed re&ort' o" KBD 'u! r'

SRI RAMA KRIS#NA $G %OLLEGE NANDYAL