Narendra

INTRODUCTION
FINANCIAL MANAGEMENT
Management of funds is an important aspect of Financial Management.
Management of funds act as the primary concern whether it may be in a
business undertaking or in an educational institution. Financial Management,
which is simply meant dealing with Management of money matters.
Meaning of Financial Management:
By Financial Management we mean efficient use of economic resources
namely capital funds. According to Phillippatus, Financial Management is
concerned with the Manage trial decisions that results in the acquisition and
financing of short term and long term credits for the firm.
So the analysis simply states two main aspects of Financial
Management like procurement of funds and an effective use of funds to active
business objectives.
Procurement of Funds:
As funds can be obtained from different sources so procurement of
funds is considered as an important problem of business concerns. Funds
procured from different sources have different characteristics in terms of risk,
cost and control.
Funds issued by the issue of equity shares are the best from risk point of
view for the company as there is no question of repayment of equality capital
except when the company is under liquidation.
From the cost point of view equity capital is most expensive source of
funds as dividend expectations of shareholders are normally higher than
prevalent interest rates.
Financial management constitutes risk, cost and control. The cost of
funds should be at minimum for a proper balancing of risk and control.
Utilization of Funds:
Effective utilization of funds as an important aspect of Financial
Management avoids the situations where funds are either kept idle or proper
uses are not being made. Funds procured involve a certain cost of dividend
decisions we also consider this. So it is crucial to employ the funds properly
and profitably by many factors like general economic outlook, outlook of
particular company, technical factors and even mass psychology. Normally
this value is a function of two factors as given below.
The anticipated rate of earning per share of the company.
The capitalization rate.

The likely rate of earning per shares (EPS) depends upon the assessment
as to how profitably a company is growing to operate in the future.
Methods of financial Management;

In the field of financing there are various methods to procure funds.
Funds may be obtained from:
Long term sources.
Short term sources.
Long term funds may be availed by owners that are share Holders,
lenders by issuing debentures, from financial institutions, banks and public at

large short term funds may be availed from commercial banks, public deposits,
etc.
Financial leverage or trading on equity is and important method by
which a finance manager may increase the return to common share holders. At
the same time of evaluating capital expenditure projects methods like average
rate of returns, pay back, internal rate of returns, net present value and
profitability index are used.
A firm can increase its profitability without affecting its liquidity by on
efficient utilization of the current resources at the disposal of the firm. A firm
can increase its profitability.
FUNCTIONS OF FINANCIAL MANAGEMENT
Financial management in the modern sense of the term can be broken
down into three major decisions as functions of finance they are
1. Investment Decisions:
This relates to the selection of assets in which the funds should be
invested by a firm. The assets selection decision of a firm is of two types.
1. Capital budgeting.
2. Working capital management.
2. Financing decisions:
The second major decision involved in financial management is the
financing decision. It is concerned with the financing mix, capital structure,
cost of capital etc. The financing decision covers two interrelated aspects.
A.
Capital structure theory and
B.
Capital structure decision.

3. Dividend policy decisions:
The third major decision of financial management is the decision
relating to the dividend policy. It is concerned with the decision of whether the
profit of a firm can be distributed to the shareholders in the form of dividends
or they can be retained in the business.
MEANING OF FINANCIAL STATEMENT ANALYSIS:
A firm communicates financial information to the users through financial
statements and reports. Financial statements contain summarized information
of the firms financial affairs, organized systematically. They are the means to
present the firms financial situation to the users. Preparation of the financial
statements is the responsibility of top the management.
Funds flow statement.
Cash flow statement.
Comparative statement.
Common size statement.
Ratio analysis.
Trend analysis.
FUNDS FLOW STATEMENT:

The Funds flow statement is a statement, which shows the movement of
funds and is a report of the financial operation of the business under taking. It
indicates various means by which funds were obtained during a particular
period and the ways in which these funds were employed.
DEFINITIONS OF FUNDS FLOW STATEMENTS:

Robert N. Anthony: The funds flow statement desorbed the sources
from which additional funds derived and the uses to which these funds were
put
SOURCES OF FUNDS:
Funds from operations.
Issue of share capital.
Issue of debentures.
Rising of loans.
Sale of fixed assets.
Sale of investments.
Decrease in working capital.
APPLICATIONS OF FUNDS
Funds lost operations.
Redemption preference shares.
Redemption debentures.
Purchase of fixed assets.
Purchase of long term investment.
Drawings.
Payment of taxes.
Payment of dividends
VISION & MISSION:Our mission is to produce the best seed to cater the needs of Indian farmers.
Our commitment to quality in the seed industry has won laurels at the National
level and helped us to grow faster in the cotton seed market. The ever growing
demand for quality and cost effectiveness has kept us on our toes to be always
ahead in the race towards success. With over 18 years of experience and with
an ISO 9001 : 2008 accreditation, we are marching ahead to be the leader in
cotton seed production. The strength of our company lies in the constant
patronage from all our Indian farming community.
- T. R. Prabhu, Chairman
Scheme of the Presentation
The study is presented in six chapters. The first chapter is an
Introduction and objectives of the study, and importance of the study, scope of
the study, and methodology of the study, limitations of the study, and scheme
of presentation
The second chapter is an industry profile TSP Ltd and company profile on TSP
Ltd.
The third chapter is theoretical frame work .
The fourth chapter data analysis and interpretation.
The fifth chapter findings and suggestions and conclusion bibliography.
NEED FOR THE STUDY

Fund flow& Cash flow analysis is a key for interpretation of financial
statement.
It is also significant because funds flow& cash flow help the analysis to have a
deep feed into the date in the statement.
Figures in their absolute forms shown in financial statements are neither
significant nor able to be compared since they are basically dumb.
Funds flow and cash flow analysis is used to diagnose the financial health of
the concern in vital, strong, weak and good, generally funds flow and cash flow
analysis represents the figures containing the condensed report of the position,
development and problems of the concern.
They are also facilitated the work of gaining the financial health of the
concern.
Totally, funds flow and cash flow analysis is used as a tool for financial
analysis is used as a tool for financial analysis and interpretation
OBJECTIVES OF THE STUDY

The following objectives have been formulated to make in the study.
a.
To assess the Working Capital position of the company from 2007-2008

to 2012-2013.
b.
To identify sources and uses of the funds of the company from 20072008 to 2012-2013.
c.
To examine the sources and applications of the funds through cash basis
from. 2007-2008 to 2012-2013.
d.
To offer suggestions for improvement of financial position of TULASI

SEEDS PVT LIMITED. .
e.
To evaluate the reason for changes in working capital of the company.
f.
To evaluate about the reasons for success of the organization.
SCOPE OF THE STUDY

The study has been conducted to understand the position of the organization
and its functional areas and operations and industry.
The study mainly focuses on funds flows of the company.
The time given to complete this project is not sufficient that is 45 days only.
METHODOLOGY OF THE STUDY

The systematic and scientific study of any research work the
methodology is very important, because it deals with the choice of selecting
the sample, research work design, data to be collected and the technique to be
used for the collection and analysis of data.
I. Primary Data:
Most of the information is collected from internal interview and
discussions with various officials in the finance department and concerned
executives of other departments.
II. Secondary Data:
Secondary data means data that are already available i.e., they refer to
the data, which have already been collected and analyzed by some one else.
Secondary data may either be published data or unpublished data. Usually
published data are available in.
The study completely depends upon the secondary data.
Annual reports.
News papers.
Trade journals.
Reference Books.
Company websites.
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LIMITATIONS OF THE STUDY

1. The report of Funds Flow and Cash Flow Analysis in Tulasi Seeds Pvt. Ltd.,
was done from past balance sheets, financial sheets, financial statements etc.,
as this Seeds factory is one of the diversified activities of the whole Tulasi
Seeds Pvt. Ltd., being a division by its nature, it maintains all records &
operations relating to their units only.
2. The accounting system is such that the registered office account is maintained
in this factory and all the financial operations are carried on either by debiting
(or) crediting the registered office account.
3. The Tulasi Seeds Pvt. Ltd registered office provides working capital every year
according to the requirements of their seeds unit. The working capital
requirements are largely influenced by the payment to the supplies of seeds and
wages to the employees recruited during the production season.
4. In addition to that, the factory raises funds from financial institutions and
commercial banks by hypothecating seeds blocks on behalf of the Tulasi Seeds
Pvt. Ltd registered office. These amounts are used to supplement working
capital provided by registered office in manufacturing seeds during the season.
5. In the tight of the above facts, it is not possible for an analysis to prepare the
funds flow and cash flow statements indicating the financial position of the
com
6. The project period is very limited 6weeks.
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INDUSTRY PROFILE
The prospects of the seed industry would require changes in Government
policy, facilitating its development and removing controls and restrictions. In
brief seed industry requires a simple policy and legislation.
Historically, the importance of seed has been recognized since the vedic
times for increasing food production and quality. However organized
production and supply of quality seed at the national level started in 1963 as a
consequence of the introduction of hybrid technology during 1961- 65.
GROWTH:
The release of high yield dwarf varieties of wheat and rice by the mid
1960s gave further impetus to the growth of seed industry. This period also saw
the constitution of the Seed Review Team, enactment of Seeds Act, 1996 for
regulating the quality of seed and formation of the National Commission of
Agriculture.
This was the period in which the private sector took significant steps into the
seed business.
The 1980s witnessed two more important developments viz., granting of
permission to MRTP/FERA companies for investment in the seed sector in
1987 and the introduction of NEW POLICY on seed development in 1988.
The new policy on seed development while helping liberalize import of
vegetable and flower seeds in general and seeds of other crops in a restricted
manner encouraged global seed companies to enter the seed business of India
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CURRENT STATUS
To supply the seeds necessary for the five hundred thousand Indian
villages is a big problem. Storage, transportation and timely distribution of
pure seed form village to village calls for careful organization within the State
Department of Agriculture and the willing cooperation of farmers.
Indians seed industry has grown in size and level of performance over
the past four decades. It represents a blend of private and public sector
companies / corporations. The private sector comprises approximately 140
seed companies, which includes national, global, regional and other seed
producing and/or selling companies.
The industry has made impressive strides from a modest beginning in 1962-63
to over 5 lakh hectares in seed production in 1995-96. The quantum of seed
distributed also grew from 14 lakh to 70 lakh quintals during this period.
On the inputs supply the certified quality seeds distribution touched a new
high of one million tones during the year 2000 2001. It was 0.91 million
tones the previous year.
CHALLENGES
Use of new techniques requires dissemination and training for their
beneficial use. To achieve these goal radical changes will be required in the
existing extension systems. In many cases entirely new approaches for
dissemination of knowledge will be required. These will have to be constant
learning and up gradation of skills to enable transmission of knowledge to the
user.
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To realization of the prospects of the industry will also changes in the

government policy, which would facilitate the development of the Indian
Agriculture and seed industry. The policy must aim at governing greater selfdiscipline and removing controls and restrictions which inhibit growth and
development.
ROLE OF THE GOVERNMENT
To achieve self-sufficiency in the production through planned
programmes, the distribution of quality seed was rightly considered as a key
factor by the government. The far-sighted and liberal policies of Government
of India has always laid emphasis to build a sound seed industry in the country
and has supported both public and private sector organizations to develop and
to meet the increasing seed demand and also to produce surplus stocks require
for export.
To support expanded activities the National Seed Programme was
launched with the financial assistance of the World Bank (International Bank
for Reconstruction and Development). In order to make available the right
quality of seed to the Indian farmers in adequate quantities and at reasonable
price in time, the Government of India took various steps including
promulgation of Seed Act during 1996 which became operative throughout
the country from October 1969.
The main objective of the Act is to produce quality seed of different
crop varieties under a system of seed certification and testing is voluntary but
the farmers have recognized the importance of quality seed to get higher
production with limited resources available at their end.
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High yielding varieties are being released for cultivation in quick

succession by various Agricultural Universities and ICAR institutions through
massive research project and Screening of planting materials. Steps have been
taken during early 1984 to bring seeds within the purview of the Essential
Commodities Act to strengthen the regulation of seed quality and to economies
production at desired levels.
PROBLEMS
Many problems are being faced by the seed industries and farmers for
many years. A number of Multi national corporations have stepped into our
agricultural country to gain control over the seeds and their distribution.
Recently, a new variety of seeds have entered the country. This created many
new problems for the seed industries and farmers.
Generally, a seed may be used either as a food material or as a seed for
another crop. But now, the life in the seed is being taken out for making it to be
used only as a food material and not as a seed for another crop. These types of
seeds are called genetic change or genetic engineering seeds. For example, BT
cotton seed. The farmers are made to purchase those seeds which are
manufactured by the corporation for their crops.
Once the farmers or industries have used these types of seeds, they face many
problems. They have to use only those pesticides which are produces by those
associations for protecting their crops from the pests, diseases etc. Those would
wide Associations use that type of formula itself while making the seed.
15
The seed industries in India are facing a big problem with the entering
the world wide organizations into the country. Also the production is down
grading. In 1992, the
Experiments conducted by the Monsanto scientist in Portfolio show that
these has been approximately 11.5 percent decrease in the production of cotton.
SEED INDUSTRY IN GLOBAL PERSPECTIVE
The population has been growing at a faster rate in the country. To
increase
the
production
accordingly
an
All
India
Co-coordinated
organization has been established in 1951 with the assistance of Rockefeller

Foundation which belongs to America. As a part of this project, it produced
new seeds of maize in 1961 and cotton seeds in 1971.
With a view that the State Governments are unable to meet the demand
for seeds correctly, two associations have been established with the help of
Rockefeller Foundation. They are National Seed Association 1963 and State
Farm Corporation of India, 1969. Due to the Development Programme
Which came into existence in 1988, many multi-national corporations have
stepped into the seed production.
At present there are more than 700 multinational corporations in India
doing seed business directly or indirectly. 19 multinational companies have
made an agreement with the Indian seed Industries and have been enjoying the
leadership in the seed market. Monsanto, an American Multinational
corporation, has acquired one-fourth part of the MICO seeds industry, one of
the biggest seed industries in India. The acquisition value given by the
Monsanto Corporation is more than 17 times the real value.
SEED INDUSTRY IN INDIA
16
Indians seed industry has grown in size and level of performance over
the past four decades. India stands in the 8 th position all over the world in the
production of different variety of crops. Again in each crop there are thousands
of varieties.
To coordinate the seeds research centres and private organizations in
the country and to support the expanded activities, the National Seed
Programme was launched in 1967 with the financial assistance of the World
Bank. In 1960 many private organizations have participated in the production
of seeds.
MICO Seeds Private Limited, Mumbai
Monsanto Holdings Private Limited, Mumbai
Namdhari Seeds Private Limited, Bangalore
National Seeds Corporation Limited, New DelhRallis India Limited, New

Delhi
Sungro seeds Limited, Delhi
Cargill Hybrids Private Limited, New Delhi
Pioneer India Limited, Kolkota
Proagro Seeds Private limited, Chennai
Sasys Seeds Private Limited, Bangalore
Sinjent India Limited, Pune
SEED INDUSTRY IN ANDHRA PRADESH
17
In Andhra Pradesh the seed industries are many in number. Though

Andhra Pradesh is one among the states in India who have been producing
different varieties of crops, it does not have the major seed industries in it when
compared to other states. Many seed industries have formed recently in the
state. Also the state is growing industrially and there is sample scope and
potential for the entry and success of new industries.
The crop producing seasons are different for different states. In Andhra
Pradesh, the crop producing season starts from June and ends with the month
of September. Generally the rain fed crop in situated in the state. Irrigated crop
may not have better results when compared. The stock to be sold by the seed
industries is kept ready during the starting of the year as the period during
which the demand will be more fall between March ad August. The industries
in the state start the crop again the month June Itself. The seed industries in the
state market with other states which form the boundaries of it. The selling
period for those states will vary.
The following are some of the seed industries in Andhra Pradesh.
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Indo American Hybrid Seeds (India) Pvt. Ltd., Hyderabad
Seed Works India Limited, Hyderabad
Mourya Agri Tech, Hyderabad
Sriram Bioseed Genetics India Ltd., Hyderabad
Nath Seeds Limited, Hyderabad
Jk Seeds Limited, Secunderabad
Nujiveedu Seeds, Limited, Hyderabad
Tulasai Seeds Private Limited, Guntur
Venus Crane Seeds Pvt, Ltd, Guntur
Tammareddy Seeds, Vijayawada
Gopikrishna Seeds, Mahaboobnagar.
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TULASI SEEDS PRIVATE LIMITED PROFILE

Tulasi Seeds Private Limited was incorporated on 15 th May, 1992 under
the proprietorship of Sri Tulasi Ram Chandra Prabhu. TSPL is one among
the industries which are being run under the same management.
Coastal Packaging was the first industry started by them in the year
1977. Later on Chaitanya Packaging Private Limited and Chandra
Transport Agency were started in 1988. After that White Gold Chits &
Finance came into existence. This institution holds 50 percent of total number
of shares of Tulasi Seeds Private Limited.
The company was started with an initial investment of Rs. 2 lakhs. In
the initial stage, it has no processing plant. In the year 1994, it has set up a
processing plant equipped with full machinery. Thirty acres of land is being
cultivated under the ownership of the company. The company has arranged
their own laboratory in the current financial year. Previously they had no such
facility and they had faced expensive testing.
The company proprietor, Sir Tulasi Ramachandra Prabhu, had received
Best Management Award in 1994 from the hands of Former Chief
Minister, Mr. Kotla
Vijaya Bhaskar Reddy. Again in this year, he received Parisramika Vijetha
2002 a ward from the Minister of Industries, Mr. Kotagiri Vidyadhar. The
company is being run under his efficient management is such a way that it is no
only to pave its way but also able to earn some surplus to meet the needs of
growth and expansion.
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OBJECTIVES OF TULASI SEEDS PRIVATE LLIMITED:

The main objective of the company is to provide pure quality and
certified seeds to the farmers and to protect them purchasing the duplicate
seeds.
The farmers are made to purchase the duplicate seeds for their crops by
some of the big corporations whose main objective is to earn profit and not the
well being of the farmers and the crop production.
Once the farmers have used those duplicate seeds, they face many
problems. They have to use only those pesticides which are produced by those
corporations alone for protecting their crops form the pests, diseases, etc.
The crop production will also be decreased by the use of those seeds.
Tulasi seeds private limited processes and supplies pure quality seeds and help
the farmers to increase the production.
LOCATION OF THE COMPANY:
The processing Plant and Research Farm are at Ameenabad. They
are located at Dokiparru in Medikonduru mandal of Guntur district in the state
of Andhra Pradesh. It is only 15 Km from Guntur and is on Guntur
Narasaraopet highway. It is well connected by both rail and road transportation.
It is only 45km from Vijawada which is industrially located.
The registered office named TULASI HOUSE is located at 4th lane of
Arundelpet in Guntur. It is nearer to the Railway station. The zonal office is
situated at Hyderabad. The Branch office is situated at Nagpur in the state of
Maharastra.
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Board of the directors
Tulasi
Ramachandra
Prabhu
Chairman
T. Yogish
Chandra
Managing
Director
Dr. P.
Chandrasekhar
Executive
Director
REGISTERED OFFICE:M/s TULASI SEEDS PVT. LTD.,

TULASI HOUSE ; 6-4-6;
Arundalpet: 4/5,
GUNTUR 522 002
ANDHRA PRADESH
Ph: 0863 2224947
ZONAL OFFICE:D.No. 16-2-705/5/8;

Near Rice Mills;
Malakpet:
HYDERABAD 500 036. (A.P)
Ph: 040 4550348
BRANCH OFFICE :A 2; Bapuji Phase Aparment;

Trimurthi Nagar,
NAGPUR 22;
MAHARASTRA
Ph: 233074
22
T. Krishna
Chaitanya
Director
ABOUT TULASI SEEDS PVT. LTD
FINANCIAL OBLIGATIONS:
No expenditure was incurred during the year in foreign currency.
The contingent liabilities at the end of the year were nil.
The amount de by the company to SSI units was nil
The company has paid the interest and commissions regularly to the respective
parties.
FUTURE OUTLOOK
The company has introduced own branded seeds in the local market
along with the partial introduction of them in the states of Maharastra, Madya
Pradesh and Karnataka. It has made good progress in the previous year from
the own hybrids of cottonseeds and established its own good will in the market.
The company is confident of achieving better results in the current
financial year in view of the improving market conditions and the companys
strategically developed network in various areas. It has been taking all
necessary steps for improving quality of the products and services.
23
RESEARCH AND DEVELOPMENT (R&D) AND TECHNOLOGY

ABSORPTION :
Specific are in which R& D carried out by the company.
Development of own hybrid seed.
Benefits derived as a result of the above R & D.
Improved quality improved productivity and process efficiencies.
Expenditure on R & D.
Rs. 3,49,108 spent under own research and development programme during the
year.
Technology absorption during the year under review is nil.
TSPL ACCOUNTING POLICIES:Accounting convention:In Tulasi Seeds Pvt. Ltd., the financial statements are prepared on historical
cost conventions and in accordance with generally accepted accounting
principles and the provisions of the Companies Act, 1956.
Fixed Assets:In TSPL, fixed assets are stated at cost of acquisition less accumulated
depreciation.
24
Depreciation:In TSPL, Depreciation is provided in accounts of Straight-Line method at the

rates and in the number specified in Schedule XIV of the Companies Act
1956.
Investments:Long term investments in TSPL are stated at cost and income thereon are
accounted for on accrual. Provision towards decline in the value of long term
investments is made only when such decline is other than temporary.
Inventories:Value of Inventories are made as under:Raw materials and finished goods are valued at cost or net realizable value
whichever in lower.
Stores and spares at cost.
Sales in TSPL:Sales are inclusive of Excise duty, packing charges and sales tax.
Interest and Discount:Interest payable and receivable and discounts payable and receivable are taken
into account while preparing financial statements.
25
Preliminary Expenses:Preliminary expenses are amortized over a period of ten years.

Research and Development Expenditure:Revenue expenditure is charged to profit & Loss Account and capital
expenditure is added to the cost of fixed assets in the year in which it is
incurred.
Auditors Fee:The company accounts are audited by M/s V. Rao & Gopi. It pays the auditors
Rs. 10,500/- per year as a remuneration.
FUNCTIONAL AREAS:
MARKETING :The company mainly markets its products from its processing plant at
Ameenabad. The consumers come to the Registered office or to the processing
plant and place their order. the company has its own trucks and vans for the
transportation purposes. It means quick delivery of the materials ordered by the
consumers through these trucks and vans. If any unforeseen demand arises and
orders are placed in plenty, it consults the Chandra Transport Agency for the
delivery of the material ordered.
The prices are fixed basing on its competitors and the variations in
the prices of the goods in the market. Advertising of seeds is done by the
company.
26
The advertisement relating to the company seeds are given in daily

newspapers like VAARTHA and monthly journals like ANNADAATA, etc..
The advertisement and business promotion expenses are included in the selling
and distribution expenses while preparing the financial statements. The
advertisement expenses during the year incurred by the company are less than
the previous year. The packing of the seeds is the last stage in processing. The
packages are kept in corrugated boxes and sent for delivery to consumers.
These packing expenses are included in the sale price.
The distribution is the main function in the marketing of seeds of the
company. It maintains good relations with its dealers, distributors and farmers.
The company conducts and organizes the meetings where the farmers, dealers
and distributors come for the discussions.
This facilitates good understanding between them and finally leads
to the overall development of both the company and the members. The farmers
and dealers directly approach the company and reserve the material they want
to purchase by marking advance payments.
ADMINISTRATION:Recruitment in Tulasi Seeds Pvt Ltd., is done mainly through internal

sources. It has good relations with its employees, workers, farmers dealers and
distributors. Promotion is mainly based on seniority. It maintains farmers guest
house at the processing plant. Programms were also arranged on relevant topics
as Safety, Role of employees, Self- development, Productivity, Human relation,
Health etc.,
27
FINANCIAL:Tulasi seeds private limited use both its own capital and debt to perform
its activities. The company aims at wealthy maximization, rather than earning
more profits. It maintains proper record if every transaction showing full
particulars when wanted.
The company has adequate internal audit system commensurate with the
size and nature of its business. White God Chits and Finance, one of the units
maintained by the same management itself holds 50% shares of the company
having Rs. 10/- face value each.
The parties and employees to whom loans and advances have been given by
the company are repaying the principal amount stipulated.
PRODUCTION:The production profile of Tualsi Seeds Private Limited deals with the
whole issue of processing of various kinds of seeds which includes the
procedure, stockpile, etc., The company processing of cotton seeds take the
major place among all seeds. The different type of seeds which are being
processed by the company are as follows:
Cotton Seeds:
TCHH-1,
SRI TULASI,
LAXMI TULASI,
KRISHNA TULASI,
TCHH 14, SAVITA,
NHH- 44,
PKVHY 2,
H-8,
H-6,
JKHY 1,
MCU 5 (VT)
L 389,
LK 861,
LRA 5166,
SURABHI.
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Chilli Seeds :
KAVYA,
KANCHANAMALA,
AISWARYA,
MADHUBALA,
LCA-2008,
CA- 960
X 235,
S-1
G-4.
Jowar Seeds:CSH 5 and CSH.

Bhendi Seeds:
P.K and ARKA ANAMIKA.
Tomato Seeds:PED,
PR,
PKM,
MARUTHAM, T-21 And
T- 22.
The company has separate section for maintaining seed testing

laboratories, germination testing room, humidity controlled room, etc.
Laboratory oven is used to remove moisture of the seeds; the seeds sometimes
have more moisture than required. For example, cotton seeds have generally
10% moisture.
The seeds are kept in the oven and the fans inside remove the moisture
form the seeds to the extent mentioned on the oven. The programmable
Environment Test Chamber is another device used by the company to know the
volume of generation of seeds. For this, a particular type of paper called
germination paper is used. The seeds are kept on the germination paper and are
kept inside the Environment Test Chamber.
29
The test chamber is kept on at a temperature of 25 degree centigrade

and 90% humidity. The paper is taken out and tested periodically for knowing
the germination power of the seed. There is a germination testing room in the
section which indicates the germination capacity. There will be some shelfs in
the room on which the seeds are kept. The room will be ari-conditioned. A
germination tester attached to the shelf indicates the germination capacity in
percentages.
Finally, a humidity controlled room is maintained by the company. The
room is air-conditioned at the temperature of 30 degree centigrade. Two pipes
will be there in the room. Through one pipe moisture will be going out and
through another pipe outside air will be coming in thus maintaining same
temperature.
The Company has its own Research and Development Programme. The
scientists from their research make the parent seeds which will be stored in the
humidity controlled room. The seeds of the company are given to the growers
to grow the corps in the farms of the company. The crop period will be about
150 to 170 days. After than the crop is taken bye the company from the
farmers.
For cotton crop, it will be kept in a round machine surrounded by
horizontal beams called dust remover machine. It removes the dust from the
crop. Then it is thrown in the ginning machines. The machines perfectly
separate the dust is sold out in the market. The seeds are taken for delinting
process. In this sufficient quantity of acid is poured in the machine along with
the seeds. The machine revolves and the negligible cotton remained will get
burnt. After that seeds which turn into black colour will be dried for one of two
days.
30
The dried seed are taken for grading. For this a machine called Seed
Grader is used for removing dust and for grading. The seeds are poured in the
machine and the dust, whether big or small will be separated through the
screens the machine had. The lifter air control, a part in the machine, separates
the light and damaged seeds. Then the seeds flow into a gravity separator. The
fans beneath identity the light seeds and separated them from good seeds.
These are again examined by the experienced workers to take off the useless
seeds, if any.The seeds examined are then poured into a Crop Protection
machine for chemical processing. These chemicals Gaucho, Cruser & Tata are
mainly used in chemical processing.
31
CONCEPTUAL FRAME WORK

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.
Arranging short term financing
Negotiating favorable credit terms
Controlling the movement of cash
Administering accounts receivables
Monitoring investment in receivables
32
Decisions concerning the above areas play an important role 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 materialswhich
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.
CONCEPTS 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.
33
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

avoid
two danger points excessive
should
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.
34
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 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.
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.
35
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
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.
36
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.
Funds Flow Statement mainly disclosed information concerning
financing and investing activities of a business concern and the consequent
changes in its financial position of a period. This statement helps the owners
and creditors to judge the financial management with respect to its ability in
generating the funds from various sources and effectively utilizing them for
various productive used without effecting device to analysis the changes in the
mancial condition of a business enterprise between tow accounting dates.
It is not mandatory on the part of Business concerns to prepare a funds
flow Statement. But for their benefit they have to prepare a funds How
Statement in addition to Income Statement and balance sheet.
Definitions
Robert N. Anthony: "The Funds Flow Statement described the sources
from which additional funds derived and the uses to which these funds were
put".
Foulke: "A Statement of sources and application of funds is a technical
device designed to analysis the changes in the financial condition of a business
enterprises between to dates".
Concepts of funds flow statements:
The Funds Flow Statement helps in the analysis of the financial
operations of the business, to know causes for changes in the assets and
liabilities. It serves as an instrument for proper allocation of resources.
37
This is an important tool in the hands of the management for decision

making as well as for future planning and policy. The word 'Funds' has been
defined in number of ways.
In the narrow sense 'Funds means cash only. So that a funds flow statement is
nothing than a cash account. Such cash account or statement enumerates net
effects of the receipts and payments of cash.
In the broader sense 'Funds' refers to money values in whatever form it may
exist. It means all financial resources, used in business whether in the form of
men, material, money, machinery and other elements.
In the popular sense 'Funds' means working capital i.e. the excess of current
assets over current liabilities. There are tow concepts of working capital viz.
gross working capital and net working capital. The concept of gross working
capital refers to the firm's investment in the current assets while net working
capital means excess of current assets over current liabilities. In actual sense,
the working capital means the funds available for conducting the day-today
operations of an enterprise.
Flow of Funds:
The term flow means movement and it includes both 'inflow' and
outflow'. Flow of funds means transfer of economic values form one asset of
equity to another. Flow of funds takes place when any transaction brings a
change in the amount of funds available. When the funds is used in the sense of
working capital, funds flow will mean inflow and outflow of working capital,
When the transaction results in the increase of working capital it is said to be
inflow of funds and when it results in the decrease of working capital. It is said
to be an outflow or application of funds. Funds Flow Statement is otherwise
known as
38
1.
Statement of source or application of funds.
2.
Statement of source and use of funds.
3.
Statement of Financial changes in position
4.
Where - got and where ~ gone statement.

The Flow of Funds occurs when a transaction changes on the one hand a
non-current account and on the other a current account and vice versa.
CURRENT AND NON-CURRENT ACCOUNT:
To understand flow of funds it is essential to classify various accounts
and balance sheet items current and non-current categories.
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 bu
39

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

receivable
5. Bank overdraft
5. Short term loans and advance
6. Short term loans advances and
6.
deposits
investments
7.
Provision
against
current
Temporary
or
marketable
7. Inventories or stocks such as
assets
[a] Raw materials

[b] Work in progress.
[c] Stores and spares.
[d] Finished goods
8. Provision for taxation, if it
8.. Prepaid expenses
does not amount to appropriation

of profits.
9. Proposed dividends (maybe a
9. Accrued incomes
current non-current Liability).
40
List of non-Current (or) Permanent Capital Accounts

Non-current or permanent
Non-current or permanent
1.
2.
3.
liabilities
Equity share capital
Preference share capital
Redeemable
preference
1.
2.
3.
assets
Good will
Land
Building
4.
5.
6.
7.
8.
share capital
Debentures
Long term loans
Share premium account
Share forfeited account
Profit and loss account
4.
5.
6.
7.
8.
Plant and Machinery

Furniture and Fittings
Trade Marks
Patent Rights
Long term investment
9.
Debit balance of profit
(balance of profit ie., credit

9.
Balance).
Capital reserve
10
Capital redemption reserve
10.
and loss account.

Discount
on issue of
11
Provision for depreciation
11
shares
Discount
against fixed assets
12
on
issue
of
debentures
Appropriation of profits
[a] General reserve
12
[b] Dividend equalization

Fund
[c] Insurance Fund
[d] Compensation fund
[e] Sinking fund
[f] Investment fluctuation
fund
[g] Provision for taxation.
[h] Proposed dividend.
41
Other Deferred expenses

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 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.
Ascertain the funds from operations.
b.
Preparation of statement of changes.
42
c.
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 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.
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.
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.
43
Difference Between
Funds flow statement and income statement
Funds Flow statement
Income Statement
It highlights the changes in
1.
It does not reveal the inflows
the financial position of a
and outflows of funds but
business and indicates the
depicts the items of expenses
various means by which
and incomes to arrive all the
funds were obtained during
figure of profit or loss.
a particular period and the

ways to which these funds
were employed.
It
is
complementary
to
44
Income
statement
is
not
Income statement income
prepared
statement
statement.
helps
the
from
funds
flow
revenue
items
are
preparation of funds flow

statement.
While preparing funds flow
3.
statement both capital and

revenue
items
Only
considered.
are
considered.
There is no prescribed
Format
for
preparing
4.
It is prepared in a prescribed
format.
funds flow statement.
Difference between funds flow statement and balance sheet

Funds Flow statement
It is a statement of changes
Balance sheet
1.
It is
a statement of
financial position and hence
financial position on a
in dynamic in nature
particular date and here

is static in nature.
It shows the sources and
2.
It depicts the assets and
uses of funds in a particular
liabilities at a particular
period of time
point of time.
It is tool of management for
3.
It is not of much help to
financial analysis and helps
management in making
in making decisions.
decision.
Usually schedule of changes
4.
45
No such schedule of
in working capital has to be
changes
is
required
prepared before preparing
rather
funds flow statement.
account is prepared.
profit and loss
IMPORTNCE OF FUNDS FLOW STATEMENT

Useful in decision making to the management:
This statement helps to the manager in deciding the make-up
capitalization. Use of funds for new Fixed Assets, Working capital, Dividend
and repayment of debt are made for each of several future years. The Funds
Flow Statement reveals clearly the causes for thefinancial difficulties of the
company.
1) Useful as a control device:
It serve as a control device in that the statement compared with the
budgeted figures will show to what extent the funds were put to use according
to plan. This enables the finance manger to finds out deviation for the planned
course of action and takes remedial steps.
2) Useful to the external parties:
46
The funds statement provides an in sight into the financial operations of

a business enterprise to the external parties so that they can take right decision
for their wealth.
3) Detection of Imbalance and appropriate action:
These analysis spanning several years might reveal a growth in
inventories which is out of proportion with the growth of other asset and sales.
4) Divisional performance appraisal:
When a company has a number of divisions, individual funds statements
Vv'illenable to managements to appraise the performance of divisions in
relations to the funds committed to each division.
5) Evaluation of the firm's financing:

An analysis of the major sources of funds in the past reveals what
proportion of the firm's growth was financed internally and what portion
externally. A funds flow analysis will also tell us whether short-term liabilities
have been used to finance fixed assets and permanent portion of working
capital, in which case, at least in the future, the mix of short term and longterm finance has to be strictly watched over.
6) Planning of future financing:
An analysis of a FFS for the future will reveal the firm's total
prospective need for funds when these needs will arise and how these are to be
financed depending on whether the need is for fixed assets, fluctuating
component of working capital etc. Thus, FFA is a very important analytical tool
in the hands of the financial decision making.
47
48
Limitations of Funds Flow Statements:

The funds flow statement has a number of used, however, it has certain
limitations also which are listed sunder.
1.
This statement is not a substitute to income statement and balance sheet. It

gives an additional information regarding changes in
working capital.
2.
It can not reveal continuous changes,
3.
It is not a original statement, but rearranged statement.
4.
It is historic in nature and a projected funds flow statement cannot be prepared

with much accuracy.
5.
Transactions between current assets and transactions between non - current

assets are completely ignored while preparing the statement.
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.
Broadly speaking the preparation of a funds flow statement consists of
1. Statement of schedule of changes in working capital
2. Statement of sources and application of funds.
49
[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
An increase in current assets increase working capital
ii
A decrease in current assets decreasing working capital.
Iii
An increase in current liabilities decreasing working capital;
iv
A decrease in current liabilities increases working capital
50
Statement (or) schedule of changes in working capital

PROFORMA STATEMENT OF CHANGES IN WORKING CAPITAL
Particulars
Previous
Current
Changes in Working
Year
Year
Capital
Increase
Decrease
CURRENT ASSETS
Inventories
XXX
XXX
---
XXX
Cash/ Bank
XXX
XXX
---
XXX
Bills Receivables
XXX
XXX
XXX
---
Sundry Debtors
XXX
XXX
XXX
---
Loans& Advances
XXX
XXX
---
XXX
Other current assets
XXX
XXX
---
XXX
TOTAL CURRENT ASSETS(A)
XXX
XXX
---
---
Bills Payable
XXX
XXX
XXX
Bank Over Draft
XXX
XXX
---
Sundry Creditors
XXX
XXX
XXX
Standing Expenses
XXX
XXX
---
TOTAL CURRENT LIABILITIES (B) XXX
XXX
Net Working Capital (A-B)
XXX
CURRENT LIABILITIES
XXX
--XXX
--XXX
Increase/ Decrease of Working

Capital
Increase
TOTAL
XXX
51
Decrease
XXX
Decrease
XXX
Increase
XXX
(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.
52
Specimen of report form of fund flows statement

Sources of Funds
Funds from operations
Rs.
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)
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:
53
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
Rs.
ADD
1.
Non-cash expenses during the year
a. Depreciation
b. Writing off of goodwill, patents, trade marks,
deferred
revenue
expenditure,
Preliminary
expenses etc.
c. Amortization of discount on issue of debentures
or share etc.
2.
Loss on sale of fixed assets,.
3.
Extra-ordinary (or) non recurring losses.
LESS
4.
5.
Profit on sale of fixed assets.
Amortization of share premium or debenture

premium etc.
Funds from operations:
54
Rs.
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
Amount
Particulars
To Interim Dividend
By balance b/d
To Proposed equity
By excess provision
written back
Dividend
To Preference dividend
To Transfer to reserve
To Balance c/d
By income tax
provision not required
Amount
-
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
55
PROFORMA OF FUNDS FLOW STATEMENT

(Statement of Sources & Application of Funds)
Sources
Income from Business
Amount
Applications
XXX
Income from Business
Operations (Profit)
Issue of shares at par(discount/
premium)
XXX
Redemption
Non-trading Income
shares
Redemption of
XXX
at XXX
XXX
Debentures at
par(discount/ premium)
XXX
Payment of Loans
Sales of investment
Sales of Fixed Assets
of
Long term and medium loans

taken
XXX
Operations (Loss)
Issue of Debentures at at
Amount i
Purchase of Investment
XXX
Non-trading Payment
XXX
XXX
XXX
XXX
XXX
Dividends Paid
XXX
XXX
Sources-Application = Increase in Working Capital
Application-Sources = Decrease in Working Capital.
56
XXX
CASH FLOW ANALYSIS

CONCEPT OF FUNDS
The term Funds has different concentration ranging from the narrow
one of Cash to that of All Financial Resources. But the most common
connotations is Working Capital. While one broader concept of All
Financial Resources takes into account all significant transactions relating to
current as well as non-current accounts, the intermediate concentrations,
working capital. Considers only such information, which relate to significant
fluctuations in working capital. When it is used as equivalent to cash, the funds
flow analysis all movements of cash rather than the inflow and outflow of
working capital would be considered. Such movements are depicted in a
statement called cash flow statement.
TYPES OF CASH FLOW
While preparing a cash flow statement, two types of cash flows viz.,
actual cash flow and national cash flow are identified. Actual cash flow refers
to the actual movements of cash into or out of business. Purchase of fixed
assets, borrowing from bank of financial institutions, trading profits and
redemption of debentures are all example of actual cash flows. But national
cash flows result s only in the cash of increase or decrease in current assets.
National cash flow result indirect cash movements into or out of business. For
example, increase in balance of debtors does not result in any actual cash
outflow since it is part of credit sales. But form of material cost, labor cost,
overheads etc., locked up in the goods sold on credit.
57
SOURCES OF CASH
Issue of shares and debentures for cash.
Disposal of fixed assets and investment for cash.
Borrowing form banks and other financial institutions.
Cash from operations or trading profit.
Decrease in current assets.
Increase in current liabilities.
For example, credit sales of goods involve creation of assets in the form
of debtors and bills receivable. When payment is receive (cash inflow) from
the customer, there will be a reduction of current assets (debtors and bills).
Thus decrease in current assets involves cash inflows.For example, purchase of
goods on credit results in creation of current liabilities in the form of creditors
and bills payable. Here it is assumed that the creditors have given a loan cash
(National Cash Inflow), which has been used to acquire the goods.
Applications of Cash Include:
Redemption of shares and debentures by cash
Purchase of fixed assets and investment by cash
Repayment of Loans
Increase in Current assets
Decrease in Current liabilities
58
PREPARATION OF A CASH FLOW STATEMENT

SOURCE
Amount
Opening Balance
APPLICATION
Amount
Cash Outflows
Cash in hand
XXX
Redemption of shares &
Cash at bank
XXX
Debentures
XXX
Purchase of Fixed Assets and
XXX
Investment
XXX
Cash Inflows
Repayment of Loans
XXX
Issue of Shares
Increase in Current Assets
XXX
Decrease in Current Liabilities
XXX
Profit from Business Operations
Issue of Debentures
XXX
Sales of Fixed Assets

Borrowings (Long, Medium&
Payment of tax& dividends

XXX
Short term)
Decrease in Current Assets
XXX
Closing Balance
XXX
Increase in Current Liabilities
Cash in Hand
XXX
Cash at Bank
XXX
XXX
XXX
XXX
XXX
XXX
59
Statement Showing Change in Working Capital during the period

2007-2008
Particulars
2007
(Rs)
2008
(Rs)
changes in working capital

Increase
Decrease
Current assets:
Inventories
Sundry debtors
Loans and advances
143,85,65,711 153,82,60,271 9,96,94,560

--4,80,26,504
7,31,85,488 2,51,58,984
--4,10,91,432
5,30,91,438 1,20,00,006
--24,67,261
12,98,174
--11,69,087
21,15,68,500
20,40,18,611
--75,49,889
Total Current Assets
174,17,19,408 186,98,53,982
Current liabilities and

provisions:
Sundry creditors
Unclaimed liabilities
Advances received against sales
Trade Deposits
Staff security Deposits
Interest assumed but not due on
loans
Provisions
Total Current liabilities &
provisions
Net working capital
(C.A-C.L)
Decrease in working capital

Total
--14,23,54,679 14,23,54,679
--109,77,75,771 109,77,75,771 32,59,19,073 32,59,19,073
38,58,18,027
1,99,09,285
38,06,505
76,700
1,60,000
70,30,18,124
1,62,40,099
26,72,099
76,700
1,45,000
--36,69,186
11,34,406
--1,50,000
5,89,66,341
17,52,06,779
4,50,94,019
14,71,86,849
1,38,72,322
2,80,19,930
64,39,43,637
91,44,32,890
109,77,75,771
95,54,21,092
ADJUSTED PROFIT AND LOSS ACCOUNT
60
---
31,72,00,097
-------------
---
(For the year 2007-2008)

Debit Side
Credit Side
Amount
Amount
Particulars
Particulars
To Depreciation of Fixed
Assets
To Provision for Tax
To Proposed Dividend
5,46,99,743 By Opening balance

--By Gain on Sale of Fixed Assets
--By Gain on Sale of Investments
By Over provision for Taxation
To Goodwill written off

To Loss on Sale of Fixed
---
Assets
To Transfer to General Reserve
To Transfer to Sinking Fund
To Discount on Issue of Shares
-------
& Debentures
To Other Provisions
To Closing Balance
written off(back)
20,83,79,987
-------
----16,61,67,459
By Funds from Business
Operations
22,08,67,202
61
1,24,87,215
22,08,67,202

(Statement of Sources & Applications of Funds)
Amount
Amount
Sources
Profit from Business
Operations
Issue of Share Capital at
Applications
1,24,87,215
Redemption of Shares at
par(Discount/ Premium)
Issue of Debentures(Discount/
---
Par(Discount/ Premium)
Premium)
---
Redemption of Debentures
Payment of Secured Loans
Sale of Buildings
5,45,883
Sale of Other Fixed Assets

Sale of Computers &
4,75,297 Purchase of Fixed Assets:
Furnitures
Unsecured loans
15,73,605 Lands
Sale of Vehicles
Other income received
Sale of Plant & Machinery
Decrease in Working Capital
----7,85,08,616
34,58,750
97,43,016
14,40
31,45,664 Taxes Paid

5,79,10,823 Dividend Paid
1,72,27,464
14,23,54,679
23,57,20,630
,10,248
---
23,57,20,630
CASH FLOW STATEMENT (For the year 2007-2008)

Amount
Sources
Opening balance
Cash& bank
Amount
Applications
4,10,91,432 Decrease in current
62
liabilities
Interest assumed but not
due on loans
1,24,87,215 Unclaimed liabilities
Staff Security Deposits
Advances Received against
Sales
11,69,087
75,49,889 Provisions
Increase in Current
Cash from Business

Operations
Loans Advances
Increase in Current
Liabilities
Sundry creditors
Cash Inflows
Sale of Buildings
Sale of Computers &
Assets
31,72,00,097 Sundry debtors
Inventories
5,45,883 Cash out Flows
4,75,297 Lands
Furnitures
Sale of Vehicles
Sale of Plant & Machinery

31,45,664 Dividend Paid
5,79,10,823
Unsecured loans
1,72,27,464 Closing Balance
Cash& Bank
46,03,76,456
1,38,72,322
36,69,186
15,000
11,34,406
2,80,19,
930
2,51,58,984
9,96,94,560
97,43,016
14,40,1
0,248
--7,85,08,616
34,58,750
5,30,91,438
46,03,76,456
INTERPRETATION:
During the year 2007-08 it shows that there has been decrease in working
capital Rs. 14,23,54,679. This is mainly due to increase in inventories to
Rs.9,96,94,560 and sundry creditors Rs. 2,51,58,984.Lloans and advances
decreased by Rs.75,49,889. This indicates the financial position is satisfactory.
The main source of fund is from income loss from business operation of
Rs.1,24,87,215. The main use of the fund is for payment of unsecured loans by
Rs.34,58,750 lakhs and secured loans Rs.7,85,08,616 and sale of plant and
machinery Rs.1,72,27,464.
63
The total source of cash is Rs.46,03,76,456. The major uses of cash are in
increase in current assets and purchase of fixed assets. The financial position is
satisfactory.
64
Statement Showing Change in Working Capital during the period 2008-2013

Particulars
2008
(Rs)
Current assets:
Inventories
Sundry debtors
Loans and advances
2009
(Rs)

Increase
Decrease
153,82,60,271 135,29,84,499
7,31,85,488 12,48,86,536
5,30,91,438
5,52,57,959
12,98,174
6,52,331
20,40,18,611
6,04,77,777
186,98,53,982 159,42,59,102
provisions:
Sundry creditors
72,09,04,101
--5,17,01,048
21,66,521
-----
61,22,23,117 10,86,80,984
18,52,75,772
----6,45,843
14,35,40,834
---
Trade Deposits
1,62,40,099
82,88,580
76,700
1,45,000
1,32,78,884
40,39,521
75,500
1,65,000
29,61,215
42,49,059
1,200
---
loans
4,50,94,019
2,03,04,519
2,47,89,500
---
Provisions
14,72,50,425
4,93,34,692
9,79,15,733
---
provisions
Net working capital
93,79,98,924
93,18,55,058
69,94,21,233
89,48,37,869
---
---
(C.A-C.L)
Total
--93,18,55,058
3,70,17,189
93,18,55,058
------20,000
--3,70,17,189
32,94,82,449 32,94,82,449

Debit Side
Credit Side
Amount
Particulars
Assets
Amount
In Rs
Particulars
65
in Rs
16,61,67,459

1,00,00,000 By Gain on Sale of Fixed Assets

2,83,46,263 By Gain on Sale of Investments

Assets
& Debentures
To Other Provisions
To Closing Balance
---
written off(back)
-------
--19,00,00,000
------13,53,68,023
By Profit from Business
Operation
42,54,95,491
25,93,28,032
42,54,95,491

Amount
Sources
Operations
Premium)
Increasing Unsecured loans
Amount
Applications
25,93,28,032
---
--12,62,170
66
----21,29,91,771
Purchase of Fixed Assets:

Sale of Plant and Machinery
Sale of other Fixed Assets
Sale of Computers& Furniture
Sale of Buildings
Sale of Vehicles
4,80,43,518
4,75,296 Purchase of Land
20,75,865
3,18,804
3,70,17,189
6,25,635
11,34,01,996
2,83,46,263
35,53,65,665
35,53,65,665
CASH FLOW STATEMENT

(For the year2008-2009)
Amount
Sources
Amount
Applications
Increase in Current
Assets
Opening Balance
Cash& Bank
Sundry Debtors
5,30,91,438
5,17,01,048
Decrease in Current
Cash from Business

Operations
Liabilities
25,93,28,032
Interest assumed but
Decrease in Current
2,47,89,500
14,35,40,834 not due on loans
Assets
18,52,75,772
29,61,215
67
Loans &Advances
Inventories
Trade Deposits
6,45,843 Provisions
1,200
9,79,15,733
Increase in Current
Liabilities
Sundry Creditors
10,86,80,984
Staff security
Deposits
20,000 Advances Received

against Sales
42,49,059
Cash in Flows
Cash out Flows
Increasing Unsecured
loans
12,62,170
6,25,635
Purchase of Land
Sale of Plant and

Machinery
11,34,01,996
4,80,43,518 Taxes Paid
Sale of other Fixed

Assets
4,75,296
Payment of Secured
Sale of Computers&
Furniture
Other income
21,29,91,771
Loans
11,37,829
68
2,83,46,263
received
Sale of Vehicles
Sale of Buildings
3,18,804
20,75,865 Closing Balance
Cash& Bank
70,09,22,363
5,52,57,959
70,09,22,363
INTERPRETATION:
During the year 2008-09 it shows that there has been decrease in working
capital Rs.3,70,17,189. This is mainly due to decrease sundry creditors
Rs.10,86,80,984.The current assets like debtors and cash balance have been
increased by Rs.5,38,67,569 and Loans &advances are decreased by
Rs.14,35,40,834. This indicates the financial position is satisfactory.
The main source of fund is from income loss from business operation of
Rs.25,93,28,032. The main use of the fund is for payment of secured loans by
Rs.21,29,91,771.There has been increased in unsecured loans by Rs. 12,62,170
lakhs and company sale the plant& machinery Rs. 4,80,43,518.
increase in current assets and purchase of fixed assets. The financial position is
satisfactory.
69

Changes in working
Particulars
Current assets:
Inventories
Sundry debtors
Loans and advances
provisions:
Sundry creditors
2009
(Rs)
2010
(Rs)
capital
Increase
Decrease
135,29,84,499 143,18,24,825 7,88,40,326

12,48,86,536
11,21,33,122
--5,52,57,959
5,02,62,789
--6,52,331
10,21,849
3,69,518
6,04,77,777 38,99,83,272 32,95,05,495
159,42,59,102 198,52,25,857
73,50,00,018
98,06,42,659
---
Trade Deposits
1,32,78,884
47,48,503
75,500
1,65,000
1,59,00,940
17,03,313
75,500
1,45,000
--30,45,190
--20,000
loans
2,03,04,519
1,80,81,254
Provisions
4,92,10,370
33,54,02,259
provisions
Net working capital
82,27,82,794 135,19,50,925
(C.A-C.L)
77,14,76,308
---
70
22,23,265
---
63,32,74,932
13,82,01,376 13,82,01,376
--1,27,53,414
49,95,170
-----
24,56,42,641
26,22,056
--------28,61,91,889
Total
77,14,76,308
71
77,14,76,308
55,22,05,170
55,22,05,170

Debit Side
Credit Side
Amount
Amount
Particulars
Particulars
Assets

---
Assets
--28,16,68,973
---
& Debentures
To Other Provisions
To Closing Balance
----13,11,31,433
written off(back)
13,53,68,023
-------

Operation
79,80,72,428
72
66,27,04,405
79,80,72,428

Amount
Amount
Sources
Applications

Operations
66,27,04,405
--Issue of Debentures(Discount/
Premium)
--Increasing Unsecured loans
Sale of Computers& Furniture
----38,02,35,486
5,58,62,000 Purchase of Fixed Assets:

6,20,49,447 Purchase of Buildings
68,736 Investment
3,90,55,806 Vehicles
13,82,01,376 Taxes Paid
11,90,967
3,30,84,733
31,66,39,172
54,63,038
13,67,64,884
8,50,38,787
Dividend Paid
95,84,17,067
95,84,17,067
CASH FLOW STATEMENT
73
(For the year2009-2010)

Amount
Sources
Opening Balance
Cash& Bank
Amount
Applications
Decrease in Current Liabilities
5,52,57,959
Cash from Business Operations
66,27,04,405 Sales
loans

Sundry Debtors
Increase in Current
1,27,53,414
Liabilities
Sundry Creditors
Loans &Advances
24,56,42,641 Other current assets

Sale of Computers & Furniture
20,000

Increase in Current Assets
Inventories
Provisions
Cash in Flows
Increasing Unsecured loans
30,45,190
22,23,265
28,61,91,889 Cash out Flows

26,22,056 Purchase of Buildings
Purchase of Land
5,58,62,000 Investment
6,20,49,447 Vehicles
4,75,297 Payment of Secured Loans
68,736 Taxes Paid
3,90,55,806 Dividend Paid
Closing Balance
Cash& Bank
142,26,83,650
32,95,05,495
3,69,518
7,88,40,326
11,90,967
3,30,84,733
31,66,39,172
54,63,038
38,02,35,486
13,67,64,884
8,50,38,787
5,02,62,789
142,26,83,650
INTERPRETATION:
The change in working capital in this year has been decreased by Rs.
13,82,01,376. there has been increased by inventories Rs. 7,88,40,326 and
loans& advances by Rs. 32,95,05,495. The sundry creditors have been
increased by Rs. 24,56,42,641and provisions by Rs. 28,61,91,889.
74
The main source of fund is income/profit from business operations i.e. Rs.
66,27,04,405.There has been increased in unsecured loans by Rs. 5,58,62,000
and the company other income received by Rs. 3,90,55,806 and it is used for
paying deffered tax liability. The main use of the funds is purchase of fixed
assets Rs. 35,63,77,910 and the company pay its secured loans by Rs.
38,02,35,486.
The total sources of cash is Rs.142,26,83,650. The major uses of cash are in
increase of current assets such as inventories, other current assets, loans&
advances, purchase of fixed assets and payment of secured loans. The company
uses both internal and external funds to finance its fund requirements.
75

Particulars
2010
(Rs)
Current assets:
Inventories
Sundry debtors
Loans and advances
2011
(Rs)
143,18,24,825 135,93,30,982
11,21,33,122
10,80,11,642
5,02,62,789
6,81,47,393
10,21,849
15,13,709
38,99,83,272 46,65,45,285
198,52,25,857 200,35,49,011
provisions:
Sundry creditors
98,06,42,659
1,59,00,940
17,03,313
75,500
1,45,000
1,93,48,027
1,13,97,166
4,50,175
1,50,000
loans
1,80,81,254
1,37,09,008
33,54,02,259
45,92,00,433
provisions
Net working capital
----1,78,84,604
4,91,860
7,65,62,013
80,74,62,774 17,31,79,885
Trade Deposits
Provisions

Increase
Decrease
--------43,72,246
7,24,93,843
41,21,480
-------
--34,47,087
96,93,853
3,74,675
5,000
---
---
12,37,98,174
27,24,90,608
5,85,56,496
27,24,90,608
135,19,50,925 131,17,17,583
(C.A-C.L)
63,32,74,932
Increase in working capital

Total
5,85,56,496
69,18,31,428
69,18,31,428
69,18,31,428

Debit Side
Credit Side
Amount
Particulars
Amount
Particulars
76
13,11,31,433
Assets


---
Assets
--25,00,00,000
---
& Debentures
To Other Provisions
To Closing Balance
----25,83,05,202
-----
written off(back)
---

Operation
104,76,77,459
91,65,46,026
104,76,77,459

Amount
Amount
Sources
Operations
Issue of
Debentures(Discount/
Premium)
Applications
91,65,46,026
---
---
---
---

Unsecured Loans
1,49,42,845
2,50,73,000
77

4,75,296 Purchase of Fixed Assets:

2,71,58,172
Purchase of Buildings
Purchase of Land
Purchase of Plant&
Machinery
Computers& Furniture
Vehicles
Interim dividend paid
Taxes Paid
Dividend Paid
94,41,79,494
2,67,80,144
1,68,32,770
39,03,47,935
2,57,86,214
1,14,06,930
4,87,82,338
21,22,85,772
11,33,85,050
5,85,56,496
94,41,79,494
78
CASH FLOW STATEMENT (For the year2010-2011)

Amount
Amount
Sources
Opening Balance
Cash& Bank
Cash from Business Operations
Applications
Decrease in Current
5,02,62,789 Liabilities
91,65,46,026 Sundry Creditors
due on loans
Increase in Current

Inventories
Sundry Debtors
Increase in Current Liabilities
Trade Deposits
Advances Received against Sales
Provisions
Cash in Flows
Other Fixed assets
Assets
7,24,93,843 Loans &Advances
41,21,480 Other current assets
17,31,79,885
43,72,246
7,65,62,013
4,91,860
Cash out Flows

34,47,087 Payment of Secured Loans
1,49,42,845
3,74,675
Unsecured Loans
5,000 Purchase of Buildings
2,50,73,000
2,67,80,144

Purchase of Plant &
12,37,98,174 Machinery
Vehicles
2,71,58,172 Tax Paid
4,75,296 Interim Dividend paid
Dividend Paid
Closing Balance
Cash& Bank
120,83,76,395
1,68,32,770
39,03,47,935
2,57,86,214
1,14,06,930
21,22,85,772
4,87,82,338
11,33,85,050
6,81,47,393
120,83,76,395
INTERPRETATION:
13,82,01,376. there has been increased by inventories Rs. 7,88,40,326 and
loans& advances by Rs. 32,95,05,495. The sundry creditors have been
increased by Rs. 24,56,42,641and provisions by Rs. 28,61,91,889.
79
The main source of fund is income/profit from business operations i.e. Rs.
66,27,04,405.There has been increased in unsecured loans by Rs. 5,58,62,000
and the company other income received by Rs. 3,90,55,806 and it is used for
paying deffered tax liability. The main use of the funds is purchase of fixed
assets Rs. 35,63,77,910 and the company pay its secured loans by Rs.
38,02,35,486.
The total sources of cash is Rs.142,26,83,650. The major uses of cash are in
increase of current assets such as inventories, other current assets, loans&
advances, purchase of fixed assets and payment of secured loans. The company
uses both internal and external funds to finance its fund requirements.

Particulars
Current assets:
Inventories
Sundry debtors
2011
(Rs)
2012
(Rs)
135,93,30,982
10,80,11,642
6,81,47,393
15,13,709
80

Increase
Decrease
132,75,07,945
--11,45,09,441
64,97,799
17,67,30,095 10,85,82,702
28,08,246
12,94,537
3,18,23,037
-------
Loans and advances

14,90,35,146
168,60,38,872
14,02,58,734
176,18,14,461
---
87,76,412
80,74,62,774
113,99,92,418
---
33,25,29,644
Trade Deposits
1,93,48,027
1,13,97,166
4,50,175
1,50,000
1,23,35,879
43,30,187
1,23,650
1,10,000
70,12,148
70,66,979
3,26,525
40,000
---------
loans
1,37,09,008
1,18,86,216
18,22,792
---
Provisions
14,16,90,294
8,19,43,171
5,97,47,123
---
provisions
Net working capital
99,42,07,444
125,07,21,521
(C.A-C.L)
69,18,31,428
51,10,92,940
---
---
---
18,07,38,488
provisions:
Sundry creditors

Total
69,18,31,428
8,07,38,488
69,18,31,428 37,31,29,093
--37,31,29,093

Debit Side
Credit Side
Amount
Amount
Particulars
Particulars
Assets

--- written off(back)
---
81
25,83,05,202
-------
Assets
& Debentures
To Other Provisions
To Closing Balance
2,50,00,000
------40,24,83,230
Operation
70,72,60,964
44,89,55,762
70,72,60,964

Amount
Amount
Sources
Applications

Operations
44,89,55,762
---
Premium)
---
Unsecured Loans
----8,78,72,802
3,97,00,000
18,07,38,488 Purchase of Fixed Assets:

Purchase of Land
Purchase of Plant& Machinery
82
5,50,65,361
1,02,93,498
4,86,29,865
17,08,388
Vehicles
Other Fixed assets
Taxes Paid
Dividend Paid
62,96,94,250
Sources
Opening Balance
Cash& Bank
Cash from Business
Operations
Decrease in Current
Assets
Inventories
Loans &Advances
Increase in Current
Liabilities
Sundry Creditors
CASH FLOW STATEMENT

Amount
Applications
Decrease in Current
6,81,47,393 Liabilities
Trade Deposits
44,89,55,762
due on loans
Sales
3,18,23,037 Provisions
87,76,412 Increase in Current
Assets
Sundry Debtors
Other Current Assets
33,25,29,644 Cash out Flows
Unsecured Loans
Purchase of Land
Purchase of Plant&
Machinery
83
20,02,509
7,05,00,312
25,72,28,990
5,66,92,525
62,96,94,250
Amount
70,12,148
3,26,525
18,22,792
40,000
70,66,979
5,97,47,123
64,97,799
12,94,537
8,78,72,802
3,97,00,000
5,50,65,361
1,02,93,498
4,86,29,865
Other Fixed assets

Vehicles
Tax Paid
Dividend Paid
Closing Balance
Cash& Bank
89,02,32,248
7,05,00,312
17,08,388
20,02,509
25,72,28,990
5,66,92,525
17,67,30,095
89,02,32,248
INTERPRETATION:
18,07,38,488. There has been decreased by inventories Rs.3,18,23,037 and
loans& advances Rs. 87,76,412 lakhs. The sundry creditors have been
increased by Rs. 33,25,29,644.
The main sources of fund is income/profit from business operations i.e. Rs.
44,89,55,762. The main use of funds is purchase of fixed assets of Rs.
13,00,56,175 and company pay its unsecured loans and secured loans by Rs.
12,75,72,802.
increase in current assets and purchase of fixed assets and payment of secured,
unsecured loans. The financial position is not satisfactory.
84

Particulars
2012
(Rs)
2013
(Rs)

Increase
Decrease
Current assets:
Inventories
Sundry debtors
Loans and advances
132,75,07,945 126,77,78,839
11,45,09,441
6,09,19,428
17,67,30,095 20,84,05,389
28,08,246
23,12,881
14,02,58,734 20,23,86,069
----3,16,75,294
--6,21,27,335
5,97,29,106
5,35,90,013
--4,95,365
---
176,18,14,461 174,18,02,606
69,56,89,493 44,43,02,925
1,60,56,615
--1,48,01,087
--1,23,300
350
60,000
50,000
--37,20,736
1,04,70,900
-----
1,18,86,216
8,19,43,171
80,54,456
11,21,29,598
--3,01,86,427
125,07,21,521
84,69,14,549
51,10,92,940
89,48,88,057

provisions:
Sundry creditors
Trade Deposits
loans
Provisions
provisions
Net working capital
(C.A-C.L)
113,99,92,418
1,23,35,879
43,30,187
1,23,650
1,10,000
85
38,31,760
---
---
---

Total
38,37,95,
117
89,48,88,057
86
---
---
89,48,88,057 54,19,87,664
38,37,95,117
54,19,87,664

Debit Side
Credit Side
Amount
Amount
Particulars
Particulars
Assets
Assets
& Debentures
To Other Provisions
To Closing Balance

--- written off(back)
40,24,83,230
-------
--81,46,806
------39,91,05,878
Operation
59,85,48,445
87
19,60,65,215
59,85,48,445

Amount
Amount
Sources
Operations
Premium)
Applications
19,60,65,215
----24,52,09,679
Redemption of
Debentures
-----
Increase in Secured loans

Increase in Unsecured loans
40,78,000
Purchase of Fixed Assets:
11,66,516

Sale of Investments
7,29,38,883
Sale of Plant& Machinery
4,50,63,819 Taxes Paid
Sale of Vehicles
Sale of Computers &
Furnitures
Withdrawn

Increasing Working
61,45,898 Capital
1,81,46,806
59,28,52,156
CASH FLOW STATEMENT
88
3,64,66,941
11,58,9
7,573
5,66,92,525
38,37,95,117
59,28,52,156

Amount
Amount
Sources
Applications
Decrease in Current
Liabilities
Opening Balance
Cash& Bank
Cash from Business
Operations
Inventories
Sundry Debtors
Other Current Assets
Increase in Current
Liabilities
Sales
Provisions
Cash Inflows
Increase in Unsecured Loans
Increase in Secured Loans
Sale of Investment
Sale of Plant& Machinery
Sale of Vehicles
Sale of Computers &
Furnitures
Withdrawn
17,67,30,095 Sundry Creditors

19,60,65,215 due on loans
Trade Deposits
5,97,29,106 Staff security Deposits
44,43,02,925
38,31,760
350
50,000
Increase in Current
5,35,90,013 Assets
4,95,365 Loans &Advances
6,21,27,335
Cash out Flows

37,20,736
1,04,70,900 Purchase of Buildings
3,01,86,427 Tax Paid
Dividend Paid
40,78,000
24,52,09,679
7,29,38,883 Closing Balance
11,66,516 Cash& Bank
4,50,63,819
40,37,340
61,45,898
1,81,46,806
92,77,74,798
89
3,64,66,941
11,58,97,573
5,66,92,525
20,84,05,389
92,77,74,798
INTERPRETATION:
During the year 2012-2013 it shows that there has been increase in working
capital Rs. 38,37,95,117. This is mainly due to decrease in inventories to Rs.
5,97,29,106, sundry debtors Rs. 5,35,90,013 and there has been decrease in
other current assets Rs. 4,95,365 lakhs. And increase in current liabilities&
provisions by Rs. 3,01,86,427. This indicates the financial position is in weaker
position.
The main source of fund is from income/Profit from business operation of Rs.
19,60,65,215. There has been increased in secured loans by Rs. 24,52,09,679
and the sale of plant and machinery Rs. 4,50,63,819 and investments Rs.
7,29,38,883. The main applications of a firm is purchase of Buildings Rs.
3,64,66,941 and taxes.
The total source of cash is 92,77,74,798 Rs. The major uses of cash are
purchase of buildings and dividend payments. The financial position is not
satisfactory.
90
COMPARATIVE STUDY
CHANGES IN WORKING CAPITAL DURING THE PERIOD
2007-08 TO 2012-13
Changes in Working
Amount in
Years
Capital
lakhs
2007-08
Decrease
1423.54
2008-09
Decrease
370.17
2009-10
Decrease
1382.01
2010-11
Increase
585.56
2011-12
Decrease
1807.38
2012-13
Increase
3837.95
91
INTERPRETATION:
Comparing the six years data the changes in working capital is in this
year. In the year i.e., 2007-08 working capital decreases to 1423.54 lakhs. The
next year 2008-09 working capital also decreased to Rs 370.17 lakhs. Working
capital has decreased it indicates the current assets are increased and the
current liabilities are decreased. The working capital is increased it indicates
the current assets are decreased and the current liabilities are increased. The
year 2010-11 the working capital is 585.56 lakhs and the financial year 201213 the working capital is also increased. That means the current assets like
inventories are decreased Rs. 597.29lakhs and the sundry creditors also
decreased Rs. 535.90 lakhs. In this year the current liabilities& provisions also
increased Rs. 443.78 lakes.
92
ADJUSTED PROFIT& LOSS ACCOUNT DURING THE PERIOD

2007-08 TO 2012-13
Amount in
Years
Adjusted Profit &Loss a/c
Lakes
Profit from business

2007-08
operation
124.87

2008-09
operation
2593.28

2009-10
operation
6627.04

2010-11
operation
9165.46

2011-12
operation
4489.55

2012-13
operation
1960.65
93
INTERPRETATION:
The Financial position in Tualsi Seeds Pvt. Ltd., in 2007-08 is in good
condition, profit from business operation by Rs. 124.87 lakes. In 2008-09 it is
better condition Rs. 2593.28 lakhs. In the year 2010-11 the profit from business
operations increased Rs.9165.46 lakes. The company leads to better position in
the year 2010-11 financial year. The year 2012-13 the profit has decreased to
Rs. 1960.65 lakes.
94
FUNDS FLOW AND CASH FLOW STATEMENT DURING THE

PERIOD 2013-08 TO 2012-13:
Years
Funds Flow
Cash Flow
Statement
Statement
(Rs in lakhs)
(Rs in lakhs)
2007-08
2357.2
4003.76
2008-09
3553.65
7009.22
2009-10
9584.17
14226.83
2010-11
9441.79
12083.76
2011-12
6296.94
8902.32
2012-13
5928.52
9277.74
95
INTERPRETATION:
During the year from 2007-08 to 2012-13 the company has various
sources of funds and the uses of the funds are done for purchasing of fixed
assets and increasing in the current assets. In the year i.e, 2012-13 the loans
like Unsecured and Secured loans are increased Rs. 2492.87 lakhs.
The cash on the cash flow basis during these years have been used
effectively in purchasing of fixed assets. Therefore the financial position of the
company was in good conditions. In the year 2009-10 the sources of funds
Rs.14, 226.83 lakes. In the year 2012-13 the sources are Rs.9277.74 lashes.
But the financial position of the company was in good condition.
96
FINDINGS
The basic objective of a company is to maximize share holders wealth. This is
possible only when the company earns sufficient profits.
The amount of such profits depends largely upon the magnitude of sales.
There is always time gap between the sale of goods and receipt of cash.
The level of any firm depends upon its efficient management of working
capital.
To ensure higher profitability, liquidity and sound structure health of
organization.
It is essential to use of the sources of funds and cash effectively.
Tthe financial manager should estimate correct amount of working capital and
should be able to determine the correct sources from which funds have to be
raised.
97
SUGGESTIONS
There has been major fluctuations in the working capital,

The current assets and current liabilities and sources of the funds have
effected a lot. So, the firm has to find ways to increase the source of funds.
The relationship between employment and management must be

satisfactory, as
There have been occurred strikes during the years on account of failure of
negotiations.
The company should finance some parts of its current assets with shortterm funds.
It should not depend on long-term funds as they involved higher interest

payments.
Over all the company has an unfavorable working capital position.

However, they have to maintain good working capital.
98
CONCLUSION
After 45 days of my sincere work at is Tulasi Seeds Pvt Ltd
financial average in handling of the financial statement professionalism may be
encourage. The company overall position is satisfactory during my project
work. I had got good experience regarding the Tulasi Seeds Pvt Ltd.
99
BIBLIOGRAPHY
Sl no
TITLE of BOOK
AUTHOR NAME
1.
FINANCIAL
MANAGEMENT
IM PANDAY
2.
FINANCIAL
MANAGEMENT
PRASANNA
CHANRDRA
3.
FINANCIAL
MANAGEMENT
M.Y.KHAN
JAIN
4.
FINANCIAL
MANAGEMENT
FINANCIAL
MANAGEMENT
V.K.BHALLA
6.
FINANCIAL
MANAGEMENT
7.
8.
5.
PUBLISHER
NAME
VIKAS
PUBLISHING
EDITION
TATA
MCGRAW-HILL
EDITION
TATA
MCGRAW-HILL
EDITION
ANMOL
PUBLISHING
HIMALAYA
PUBLICATIONS
SEVENTH
EDITION
SRIVASTAV.RM
HIMALAYA
PUBLICATIONS
2003
FINANCIAL
MANAGEMENT
S.N.MAHESWARI
VIKAS
PUBLICATIONS
2003
COST AND
MANAGEMANT
ACCOUNTING
S.P>JAIN
,K.L,NARANG
KALYANI
PUBLICATIONS
2009
&
SUDARSANA
REDDY
WEBSITES REFERED:
www.tspl.co.in
www.google.com
JOURNALS
ECONOMIC TIMES
TIMES OF INDIA
100
NINTH
EDITION
FIFTH
EDITION
SIXTH
EDITION
FOURTH
EDITION
BUSINESS LINE
101

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INTRODUCTION

The anticipated rate of earning per share of the company.

The capitalization rate.

Methods of financial Management;

Long term sources.

Short term sources.

lenders by issuing debentures, from financial institutions, banks and public at

Capital structure theory and

Capital structure decision.

Funds flow statement.

Cash flow statement.

Common size statement.

FUNDS FLOW STATEMENT:

DEFINITIONS OF FUNDS FLOW STATEMENTS:

Funds from operations.

Issue of share capital.

Sale of fixed assets.

Decrease in working capital.

Funds lost operations.

Redemption preference shares.

Purchase of fixed assets.

Purchase of long term investment.

NEED FOR THE STUDY

OBJECTIVES OF THE STUDY

To assess the Working Capital position of the company from 2007-2008

To offer suggestions for improvement of financial position of TULASI

To evaluate the reason for changes in working capital of the company.

To evaluate about the reasons for success of the organization.

SCOPE OF THE STUDY

METHODOLOGY OF THE STUDY

LIMITATIONS OF THE STUDY

To realization of the prospects of the industry will also changes in the

High yielding varieties are being released for cultivation in quick

organization has been established in 1951 with the assistance of Rockefeller

SEED INDUSTRY IN INDIA

MICO Seeds Private Limited, Mumbai

Monsanto Holdings Private Limited, Mumbai

Namdhari Seeds Private Limited, Bangalore

National Seeds Corporation Limited, New DelhRallis India Limited, New

Sungro seeds Limited, Delhi

Cargill Hybrids Private Limited, New Delhi

Pioneer India Limited, Kolkota

Proagro Seeds Private limited, Chennai

Sasys Seeds Private Limited, Bangalore

Sinjent India Limited, Pune

SEED INDUSTRY IN ANDHRA PRADESH

In Andhra Pradesh the seed industries are many in number. Though

The following are some of the seed industries in Andhra Pradesh.

Indo American Hybrid Seeds (India) Pvt. Ltd., Hyderabad

Seed Works India Limited, Hyderabad

Mourya Agri Tech, Hyderabad

Sriram Bioseed Genetics India Ltd., Hyderabad

Nath Seeds Limited, Hyderabad

Jk Seeds Limited, Secunderabad

Nujiveedu Seeds, Limited, Hyderabad

Tulasai Seeds Private Limited, Guntur

Venus Crane Seeds Pvt, Ltd, Guntur

Tammareddy Seeds, Vijayawada

Gopikrishna Seeds, Mahaboobnagar.

TULASI SEEDS PRIVATE LIMITED PROFILE

OBJECTIVES OF TULASI SEEDS PRIVATE LLIMITED:

Board of the directors

REGISTERED OFFICE:M/s TULASI SEEDS PVT. LTD.,

Ph: 0863 2224947