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INTRODUCTION

Cash Flow Statement

A cash flow statement is a financial statement that shows a company's incoming and
outgoing money (sources and uses of cash) during a time period (often annually or quarterly). The
statement shows how changes in balance sheet and income accounts affected cash and cash
equivalents, and breaks the analysis down according to operating, investing, and financing
activities. As an analytical tool, the statement of cash flows is useful in determining the short-term
viability of a company, particularly its ability to pay bills

Purpose:
The cash flow statement is intended to

• provide information on a firm's liquidity and solvency and its ability to change cash flows
in future circumstances

• provide additional information for evaluating changes in assets, liabilities and equity

• improve the comparability of different firms' operating performance by eliminating the

effects of different accounting methods

• indicate the amount, timing and probability of future cash flows

Objective:

Information about the cash flows of an enterprise is useful in providing users of financial
statements with a basis to assess the ability of the enterprise to generate cash and cash equivalents
and the needs of the enterprise to utilize those cash flows. The economic decisions that are taken
by users require an evaluation of the ability of an enterprise to generate cash and cash equivalents
and the timing and certainty of their generation.

The Statement deals with the provision of information about the historical changes in
cash and cash equivalents of an enterprise by means of a cash flow statement which classifies cash
flows during the period from operating, investing and financing activities.

Scope:

1. An enterprise should prepare a cash flow statement and should present it for each period for
which financial statements are presented.

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2. Users of an enterprise's financial statements are interested in how the enterprise generates and
uses cash and cash equivalents. This is the case regardless of the nature of the enterprise's activities
and irrespective of whether cash can be viewed as the product of the enterprise, as may be the case
with a financial enterprise. Enterprises need cash for essentially the same reasons, however
different their principal revenue-producing activities might be. They need cash to conduct their
operations, to pay their obligations, and to provide returns to their investors.

Benefits of Cash Flow Information:

1. A cash flow statement, when used in conjunction with the other financial statements, provides
information that enables users to evaluate the changes in net assets of an enterprise, its financial
structure (including its liquidity and solvency) and its ability to affect the amounts and timing of
cash flows in order to adapt to changing circumstances and opportunities. Cash flow information is
useful in assessing the ability of the enterprise to generate cash and cash equivalents and enables
users to develop models to assess and compare the present value of the future cash flows of
different enterprises. It also enhances the comparability of the reporting of operating performance
by different enterprises because it eliminates the effects of using different accounting treatments
for the same transactions and events.

2. Historical cash flow information is often used as an indicator of the amount, timing and certainty
of future cash flows. It is also useful in checking the accuracy of past assessments of future cash
flows and in examining the relationship between profitability and net cash flow and the impact of
changing prices.

Who Should Prepare:

The cash flow statement shall be prepared in accordance with the Accounting Standard on ‘Cash
Flow Statement - (AS-3)’ issued by the Institute of Chartered Accountants of India.

AS-3 is mandatory for the following enterprises in respect of accounting periods commencing on
or after April 1, 2004.

1. Enterprises whose equity or debt securities are listed on a recognised stock exchange in India or
outside, and enterprises that are in process of issuing equity or debt securities that will be so listed
as evidenced by the Board of Director’s resolution in this regard.

2. Banks including co-operative banks.

3. Financial institutions.

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4. Enterprises carrying on insurance business.

5. All other commercial, industrial and business enterprises whose turnover (i.e., excluding other
income) for the immediately preceding accounting period

6. Holding and subsidiary enterprises of any of the above at any time during the accounting period.

Definitions of Important Terms:

Cash comprises cash on hand and demand deposits with banks.

Cash equivalents are short term, highly liquid investments that are readily convertible into known
amounts of cash and which are subject to an insignificant risk of changes in value.

Cash flows are inflows and outflows of cash and cash equivalents.

Operating activities are the principal revenue-producing activities of the enterprise and other
activities that are not investing or financing activities.

Investing activities are the acquisition and disposal of long-term assets and other investments not
included in cash equivalents.

Financing activities are activities that result in changes in the size and composition of the owners’
capital (including preference share capital in the case of a company) and borrowings of the
enterprise.

Cash and Cash Equivalents

1. Cash equivalents are held for the purpose of meeting short-term cash commitments rather than
for investment or other purposes. For an investment to qualify as a cash equivalent, it must be
readily convertible to a known amount of cash and be subject to an insignificant risk of changes in
value. Therefore, an investment normally qualifies as a cash equivalent only when it has a short
maturity of, say, three months or less from the date of acquisition. Investments in shares are
excluded from cash equivalents unless they are, in substance, cash equivalents; for example,
preference shares of a company acquired shortly before their specified redemption date (provided
there is only an insignificant risk of failure of the company to repay the amount at maturity).

2. Cash flows exclude movements between items that constitute cash or cash equivalents because
these components are part of the cash management of an enterprise rather than part of its operating,
investing and financing activities. Cash management includes the investment of excess cash in
cash equivalents.

Operating Activities:
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1. The amount of cash flows arising from operating activities is a key indicator of the extent to
which the operations of the enterprise have generated sufficient cash flows to maintain the
operating capability of the enterprise, pay dividends, repay loans and make new investments
without recourse to external sources of financing. Information about the specific components of
historical operating cash flows is useful, in conjunction with other information, in forecasting
future operating cash flows.

2. Cash flows from operating activities are primarily derived from the principal revenue-producing
activities of the enterprise. Therefore, they generally result from the transactions and other events
that enter into the determination of net profit or loss. Examples of cash flows from operating
activities are:

• Cash receipts from the sale of goods and the rendering of services;
• Cash receipts from royalties, fees, commissions and other revenue;
• Cash payments to suppliers for goods and services;
• Cash payments to and on behalf of employees;
• Cash receipts and cash payments of an insurance enterprise for premiums and claims,
annuities and other policy benefits;
• Cash payments or refunds of income taxes unless they can be specifically identified with
financing and investing activities; and
3. Some transactions, such as the sale of an item of plant, may give rise to a gain or loss which is
included in the determination of net profit or loss. However, the cash flows relating to such
transactions are cash flows from investing activities.

4. An enterprise may hold securities and loans for dealing or trading purposes, in which case they
are similar to inventory acquired specifically for resale. Therefore, cash flows arising from the
purchase and sale of dealing or trading securities are classified as operating activities. Similarly,
cash advances and loans made by financial enterprises are usually classified as operating activities
since they relate to the main revenue-producing activity of that enterprise.

Investing Activities:

The separate disclosure of cash flows arising from investing activities is important because the
cash flows represent the extent to which expenditures have been made for resources intended to
generate future income and cash flows. Examples of cash flows arising from investing activities
are:

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• Cash payments to acquire fixed assets (including intangibles). These payments include
those relating to capitalised research and development costs and self-constructed fixed
assets;

• Cash receipts from disposal of fixed assets (including intangibles);

• Cash payments to acquire shares, warrants or debt instruments of other enterprises and
interests in joint ventures (other than payments for those instruments considered to be cash
equivalents and those held for dealing or trading purposes);

• Cash receipts from disposal of shares, warrants or debt instruments of other enterprises and
interests in joint ventures (other than receipts from those instruments considered to be cash
equivalents and those held for dealing or trading purposes);

• Cash advances and loans made to third parties (other than advances and loans made by a
financial enterprise);

• Cash receipts from the repayment of advances and loans made to third parties (other than
advances and loans of a financial enterprise);

Financing Activities:

The separate disclosure of cash flows arising from financing activities is

important because it is useful in predicting claims on future cash flows by providers of funds (both
capital and borrowings) to the enterprise. Examples of cash flows arising from financing activities
are:

• Cash proceeds from issuing shares or other similar instruments;

• Cash proceeds from issuing debentures, loans, notes, bonds, and other short or long-term
borrowings; and

• Cash repayments of amounts borrowed.

• Payment of dividend.

• Payment of interest.

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Inflow of cash:

Cash flows into the business from different activities, when receipts are more than payments,
receipt from sale of property and securities, from issue of shares and bonds, i.e., Operating,
Investing, and Financing Activities, there is a quick look at it.

Outflow of Cash:

The cash flows out of the business when expenditures are more than receipts, when a property is
acquired or purchased, when debs are paid, and while paying dividend. These are categorized as
Operating, Investing, and Financing

Activities

Cash flow is the movement of money into or out of a business, project, or financial product. It is
usually measured during a specified, finite period. Measurement of cash flow can be used for
calculating other parameters that give information on a company's value and situation. Cash flow
can be used, for example, for calculating parameters:

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• To determine a project's rate of return or value. The time of cash flows into and out of
projects are used as inputs in financial models such as internal rate of return and net present
value.

• To determine problems with a business's liquidity. Being profitable does not necessarily
mean being liquid. A company can fail because of a shortage of cash even while profitable.

• As an alternative measure of a business's profits when it is believed that accrual, accounting

concepts do not represent economic realities. For example, a company may be notionally
profitable but generating little operational cash (as may be the case for a company that
barters its products rather than selling for cash). In such a case, the company may be
deriving additional operating cash by issuing shares or raising additional debt finance.

• Cash flow can be used to evaluate the 'quality' of income generated by accrual accounting.
When net income is composed of large non-cash items, it is considered low quality.

• To evaluate the risks within a financial product, e.g. matching cash requirements,
evaluating default risk, re-investment requirements, etc.

Cash flow is a generic term used differently depending on the context. Users may define it for their
own purposes. It can refer to actual past flows or projected future flows. It can refer to the total of
all flows involved or a subset of those flows. Subset terms include net cash flow, operating cash
flow and free cash flow.

Statement of cash flow in a business's financials

The (total) net cash flow of a company over a period (typically a quarter or a full year) is equal to
the change in cash balance over this period: positive if the cash balance increases (more cash
becomes available), negative if the cash balance decreases. The total net cash flow is the sum of
cash flows that are classified in three areas:

• Operational cash flows: Cash received or expended as a result of the company's internal
business activities. It includes cash earnings plus changes to working capital. Over the
medium term this must be net positive if the company is to remain solvent.

• Investment cash flows: Cash received from the sale of long-life assets, or spent on capital
expenditure (investments, acquisitions and long-life assets).

• Financing cash flows: Cash received from the issue of debt and equity, or paid out as
dividends, share repurchases or debt repayments.

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A cash flow statement is one of the most important financial statements for a project or
business. The statement can be as simple as a one-page analysis or may involve several schedules
that feed information into a central statement.

A cash flow statement is a listing of the flows of cash into and out of the business or
project. Think of it as your checking account at the bank. Deposits are the cash inflow and
withdrawals (checks) are the cash outflows. The balance in your checking account is your net cash
flow at a specific point in time.

A cash flow statement is a listing of cash flows that occurred during the past
accounting period. A projection of future flows of cash is called a cash flow budget. You can think
of a cash flow budget as a projection of the future deposits and withdrawals to your checking
account.

A cash flow statement is not only concerned with the amount of the cash flows but also
the timing of the flows. Many cash flows are constructed with multiple time periods. For example,
it may list monthly cash inflows and outflows over a year’s time. It not only projects the cash
balance remaining at the end of the year but also the cash balance for each month.

Working capital is an important part of a cash flow analysis. It is defined as the amount
of money needed to facilitate business operations and transactions, and is calculated as current
assets (cash or near cash assets) less current liabilities (liabilities due during the upcoming
accounting period). Computing the amount of working capital gives you a quick analysis of the
liquidity of the business over the future accounting period. If working capital appears to be
sufficient, developing a cash flow budget may be not critical. But if working capital appears to be
insufficient, a cash flow budget may highlight liquidity problems that may occur during the
coming year.

Most statements are constructed so that you can identify each individual inflow or
outflow item with a place for a description of the item.

In financial accounting, a cash flow statement, also known as statement of cash flows
or funds flow statement, is a financial statement that shows how changes in balance sheet accounts
and income affect cash and cash equivalents, and breaks the analysis down to operating, investing,
and financing activities. Essentially, the cash flow statement is concerned with the flow of cash in
and cash out of the business. The statement captures both the current operating results and the
accompanying changes in the balance sheet. As an analytical tool, the statement of cash flows is
useful in determining the short-term viability of a company, particularly its ability to pay bills.

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International Accounting Standard 7 (IAS 7), is the International Accounting Standard that deals
with cash flow statements.

People and groups interested in cash flow statements include:

• Accounting personnel, who need to know whether the organization will be able to cover
payroll and other immediate expenses

• Potential lenders or creditors, who want a clear picture of a company's ability to repay

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

• Potential employees or contractors, who need to know whether the company will be able to
afford compensation

• Shareholders of the business.

The cash flow statement was previously known as the flow of Cash statement. The cash flow
statement reflects a firm's liquidity.

The balance sheet is a snapshot of a firm's financial resources and obligations at a single point in
time, and the income statement summarizes a firm's financial transactions over an interval of time.
These two financial statements reflect the accrual basis accounting used by firms to match
revenues with the expenses associated with generating those revenues. The cash flow statement
includes only inflows and outflows of cash and cash equivalents; it excludes transactions that do
not directly affect cash receipts and payments. These non-cash transactions include depreciation or
write-offs on bad debts or credit losses to name a few. The cash flow statement is a cash basis
report on three types of financial activities: operating activities, investing activities, and financing
activities. Non-cash activities are usually reported in footnotes.

The cash flow statement is intended to

• provide information on a firm's liquidity and solvency and its ability to change cash flows
in future circumstances

• provide additional information for evaluating changes in assets, liabilities and equity

• improve the comparability of different firms' operating performance by eliminating the

effects of different accounting methods

• indicate the amount, timing and probability of future cash flows

The cash flow statement has been adopted as a standard financial statement because it
eliminates allocations, which might be derived from different accounting methods, such as various
timeframes for depreciating fixed assets

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The cash flow statement is partitioned into three segments, namely: 1) cash flow
resulting from operating activities; 2) cash flow resulting from investing activities; and 3) cash
flow resulting from financing activities.

The money coming into the business is called cash inflow, and money going out from the business
is called cash outflow.

Operating activities

Operating activities include the production, sales and delivery of the company's
product as well as collecting payment from its customers. This could include purchasing raw
materials, building inventory, advertising, and shipping the product.

Operating cash flows include:

• Receipts from the sale of goods or services

• Receipts for the sale of loans, debt or equity instruments in a trading portfolio

• Interest received on loans

• Payments to suppliers for goods and services.

• Payments to employees or on behalf of employees

• Interest payments

• buying Merchandise

Items, which are added, back to [or subtracted from, as appropriate, the net income figure (which is
found on the Income Statement) to arrive at cash flows from operations generally include

• Depreciation (loss of tangible asset value over time)

• Deferred tax

• Amortization (loss of intangible asset value over time)

• Any gains or losses associated with the sale of a non-current asset, because associated cash
flows do not belong in the operating section.(unrealized gains/losses are also added back
from the income statement)

Investing activities

Examples of investing activities are

• Purchase or Sale of an asset (assets can be land, building, equipment, marketable securities,
etc.)

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• Loans made to suppliers or received from customers

• Payments related to mergers and acquisitions.

• Dividends Received.

Financing activities

Financing activities include the inflow of cash from investors such as banks and shareholders, as
well as the outflow of cash to shareholders as dividends as the company generates income. Other
activities which impact the long-term liabilities and equity of the company are also listed in the
financing activities section of the cash flow statement.

• Proceeds from issuing short-term or long-term debt

• Payments of dividends

• Payments for repurchase of company shares

• Repayment of debt principal, including capital leases

• For non-profit organizations, receipts of donor-restricted cash that is limited to long-term

purposes

Items under the financing activities section include:

• Dividends paid

• Sale or repurchase of the company's stock

• Net borrowings

• Payment of dividend tax

The cash flow statement’s primary purpose is to provide information regarding a

company’s cash receipts and cash payments. The statement complements the income statement and
balance sheet. It is important to note — cash flow is not the same as net income. Cash flow is the
movement of money into and out of your company, and it can be affected by several noncash
transactions.

The cash flow statement became a requirement for publicly traded companies
in 1987. There are various rules governing how information is reported on cash flow statements, as
determined by generally accepted accounting principles (GAAP). While your business may not be
a public company, a cash flow statement is still important to measure and track the flow of cash
into and out of your business

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NEED FOR THE STUDY

The basic need is to complete a project work for the partial fulfillment of my
master’s degree. With this need, the search started for the topic that was appealing and that
would make most of my skills and abilities.

I carry out the project work in Arqube industry (india) ltd project is to analyze the cash
flow position of the company.

The cash flow analysis has emerged as the principal technique of the analysis of
financial statement. The cash flow analysis can be used with other measure to fully evaluate the
operational efficiency and also provide a standard of comparison at a point of time and allows
comparison with other firms. It can be used to analyze financial position to identify the trends,
shift in trends or other factors.

For the purpose of the study, is chosen. It is necessary to identify the financial
strengths and weakness of Arqube industry (india) ltd by establishing relationship between
different items of reference.

The present study is entitled financial performance of Arqube industry (india) ltd by
using cash flow analysis. This study is made with special emphasis on financial position by
using cash flow analysis.

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SCOPE OF THE STUDY

The project is covered of cash flows of Arqube industry (india) ltd drawn from Annual
Reports of the company.

The subject matter is limited to cash flows it analyses and its performance but not any other
areas of accounting, corporate, marketing and financial matter

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OBJECTIVES OF THE STUDY

The main objective of the study is to study the overall financial position of the company from.

• To study the financial performance of the company.

• To offer suggestions for improvement in the relevant aspects.

• To find out the financial stability of the firm.

• To know how effectively the company is using its resources.

• To measure the extent to which the company has been financing its needs through
borrowing.

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METHODOLOGY OF THE STUDY

The data used for preparing this report is through 2 sources

1. Primary data

2. Secondary data

Primary Data:

Primary data was collected based on personal observations discussions and through interviews.

Secondary Data:

Secondary data has been collected by referring to various annual reports and
records/documents of the company.

Annual reports:

These are one of the important sources of information in collecting secondary data. By
referring the previous annual reports, the financial position of the company and its requirement
of funds for financial analysis have been arrived.

Record & Documents:

These consist of

1. Balance sheet

2. Profit / Loss account.

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LIMITATIONS OF THE STUDY

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

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CHAPTERISATION

The project has been organized into five chapters.

The First Chapter introduces the concept of watershed, Implementation of watersheds in India and
Andhra Pradesh, objectives, methodology and chapterisation.

The Second Chapter presents the appropriate Review of literature.

The Third Chapter describes the profile of Industry and Company

The Fourth Chapterpresents the analysis of the data

The Fifth Chapter presents the Findings, Suggestions and Conclusions

CHAPTER II

REVIEW OF LITERATURE

Introduction:

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The format of a review of literature may vary from discipline to discipline and
from assignment to assignment. A review may be a self-contained unit an end in itself or as preface
to and rationale for engaging in primary research. A review is a required part of grant and research
proposals and often a chapter in thesis and dissertations.

The purpose of a review is to analyze critically a segment of a published body

of knowledge through summary, classification, and comparison of prior research studies, reviews
of literature, and theoretical articles. The main objective to achieve in the literature review is
developing knowledge and understanding of the previous work or activity in regard to the topic
being researched. The literature review also addresses the importance and need to inform the
investigator as to the main findings, trends, area of debate or controversy, area of neglect and
suggestions research. 2 There are hundred books and papers about cash flow and accrual
accounting but there are few books and papers about both the topic together. In this chapter,
researcher has tried to collect data from research papers, theses and books related to this study. The
goal of this chapter is to collect the literature review by considering the key theoretical issues
related to the research proposal. That means using accrual accounting and cash flow data in
predicting future cash flow and to present models of cash flow prediction. This chapter constitutes
of two parts viz. review of literature and research gap. The first part is related to review of
literature and second part is based on the critical evaluation of review and research gap.

Ball and Brown et al (1968):

They have searched the relationship between accounting earnings and

stock price and suggested that earning have an implication for future cash flows of companies.

Ashton et al (1974):

Suggested that accounting information from financial statements is useful in

predicting future cash flow of a company. Consequently, the usefulness of accounting information
has been investigated in terms of their ability to predict future cash flows.

FASB (1978):

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The important of cash flow prediction is supported by statement of accounting

standard. Both the Financial Accounting Standard Board (FASB) and the International Accounting
Standard Committee (IASC) provided a fundamental guideline for preparing and presenting
financial statements, that the objective of reporting financial statements is to provide financial
information for users to predict the amount, timing and uncertainty of the future cash flow of a
company. The primary objective of accounting data is to provide information to help present and
potential investors; creditors and other things like assess the amount, timing and uncertainty of
prospective net cash inflows to the related enterprise.

Khumawwala, Polhemus and liao(1980)

Developed prediction models of future cash flow by using the Box- Jenkins methodology and
compared the model with other five models. The competitive models are as below: Naïve models:
aptew of the value of cash flows at first, second, third, And fourteenth quarters. Their study
focused on the airline industry, using quarterly data for the period 1965 to 1976 obtained from the
Air Carrier Financial Statistics. The sample contained twenty-nine firms. The prediction models
were built for individual firms and each category of operation.

Gombola and Ketz (1983)

Discussed many new cash flow ratios in recent professional business literature or used in financial
statements in countries were the Chapter II: Review of Literature 24 cash flow statement is
mandatory. To date, no comprehensive set of cash flow ratios has been agreed upon for the
evaluation of the cash flow statement. Different users may employ different financial ratios even
when used for the same purpose. When different financial ratios are employed, comparison of
results is made will be an unduly complexes.

Greenberg, Johnson and Ramesh (1986)

Claims that earnings are better factor for predicting future cash flows than cash flows. Many
researchers had searched the ability of earnings and cash flows to predict future cash flows such as
the flowing assertion: provided evidence supporting FASB s statement regarding the importance of
earning, They search on their studies to test empirically whether current earning is better for
predicting future cash flow or current cash flows. They selected 157 industrial companies from the
Composted database for the period from1963 to 1982 which was used in their study. The operating
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cash flow variable used in this study which was approximated by indirectly adjusting earning for
non cash items and changes in current assets and current liabilities (excluding the current portion
of long term debt). The average or liner relationship between each company’s current cash flow
and its previous cash flow and the average liner relationship between each company’s current cash
flow and its previous earnings were estimated by using ordinary least- squares regression. Not only
models of one year’s data but also multiyear data, including two and three years were examined.
They reported that current earning have the ability to predict future cash flows better than current
cash flows for each lag period of one to five years and for each multi lagged period of two or three
years.

Gombola et al. (1987)

discussed the balance sheet represents different assets owned by an enterprise and shows the
method in which acquisition at the end of fiscal period but source of them related to those items
during the period not clearer, and profit in income statement has not any effect on increase in cash.
Moreover, the profitability and financing issues are reported separately on income statements and
balance sheet respectively. This causes misleading and confusing result to users.

Zega (1988)

Represented cash flow statement is a replacement of fund flow statement for two reasons. First, it
gives solutions to the argument of the definition of funds and objective of represent the fund flow
statement. According to him, fund flow statement shows ideal information for investors and other
financial statement user with respect to use of the form of fund.

Bernard and Stober et al (1989)

argued that earning suffers from flexible accounting techniques, subjective judgment and
manipulative practices, therefore, the statements of financial data from accrual accounting
information process may be misleading, making earning a less reliable measure of a firms
performance.

Murdoch and Krause (1990)

Addressed the terms in their question1, conclusion supported the assertion of FASB that earnings
are a better predictor than Chapter II: Review of Literature 29 cash flow from operations. In
answer to question 2, they found that the current component of earnings included in the
measurement of working capital was a better predictor than the non current component included in

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measuring earnings. Finally, they concluded that the accuracy prediction of the model can be
improved by utilizing of data of a long period.

Neil et al (1991)

Forecasting cash flow is a responsibility needed in different economic decision, because cash flow
plays an important role of whole decision making of every party such as security analysts, creditors
and managers. Overall, financial managers and decision makers predict the demand cash flow of
companies because they expect that current cash flow affect on future cash flows.

Climo, Lawson and Lee (1992)

Suggested with respect to the importance of cash flow prediction, some academics have advocated
revealing cash flow forecasts in order to assist investors and analysts to predict future dividend
streams. They suggested that cash flow forecasts should be compared with actual cash flow in
order to provide more useful information for investment decisions.

Nurngber (1993)

Recognized cash flow on cash flow statement should be with three factors of activities for any
enterprise such as recognized by (FAS), No. 95 and (IAS7). These can be a cash flow operation
activity and investing and financing activities. The classification for cash flow statement is driven
from finance theory.

Sylvestre and urbanic (1994)

Used financial ratios can be for predict financial variables and to evaluate relative performance
such as predicting bankruptcy, stock prices and the probability of loan defaults Ratios are
developed to help users of financial statements to compare the performances of companies on year
to year basis and across companies.

Plewa and friedlod (1995)

Provided cash flow prediction can help companies to know about cash position and make its
expenditures need for such factor for acquisitions and payment of expenses. Therefore, difference
between future cash flow and actual cash flow is necessary for analyzing for understanding and
measuring a firm’s performance.

Financial Report Standard (FRS) (Revised 1996)

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Represented requires reporting entities within its scope to prepare a cash flow statement in the
manner set out in the FRS. Cash flows are increases or decreases in amounts of cash, and cash is
cash in hand and deposits repayable on demand at any qualifying institution less overdrafts from
any qualifying institution repayable on demand. In the past, companies had to show fund flow
statement that continues resources and uses of funds. These funds can categorize in to three types
such as, 1) cash 2) working capital and 3) all resources. Fund shows on fund statements are
reported as working capital that evaluated as current asset minus current liabilities, while funds
presented on cash flow statements refer to cash.

Ingram and Lee (1997)

Indicated that cash flow and income together are useful for evaluation of growth and growth
prospects with implications for the value and survival of business.

Supriyadi (1998)

Studied in the case of Asian countries and the ability of accounting information to predict future
cash flows of Indonesian firms. Regression analysis was used to construct prediction models.
Earnings, cash flows and accounting information were derived from financial statements. The
analysis was performed on both specific firm and pooled cross sectional year data.

Trotman and Gibbins (1998)

Examined the cost of property, plant and equipment will be written down to expenses called
depreciation based on the period of useful life of them and the methods used. Realization is the
process of changing non cash resources and rights into money. This concept involves sales of
assets for cash or claims of cash. For example, gains from sales are identified as revenues and
losses are identified as expenses.

Obryan, Quirin and Berry (1999)

Discovered many of capital market based research studies have increased, to investigate the
usefulness of cash flow data in decision making.

John Wileyand Sons (2000)

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Discovered operating activities in every company are the main activities and include revenue
producing and other activities that are not investing and financing activities. Investing activities
include the acquisition and disposal of long term assets and other investment except short term
investments. Financing activities constitute changing of result in the size and composition of the
equity capital and the borrowing of the enterprises. The accrual accounting is a basic accounting
assumption dealing with the accounting process of recognizing the effects of financial transactions
in the period in which events occur, rather than focusing only on cash receipts or payment.

Gallinger (2000)

Evaluated, cash flow from operations activity can be evaluating the quality of profits on income
statements. The difference between net cash flow from operation and net profit is the helpful in
interpreting the quality of earning. A large difference between net profits and cash flow from
operation will reflect a low quality of profits- perhaps net income has increased without an
increase in cash flows from operations. This may result from increases in sales on credit causing
increases in accounting receivable, indicating that the company may have a cash collection
problem in the future.

Tiron Tudor Assoc. Alexandra Mutiu. ( 2001)

Improved under the accrual method, transactions are counted when the order is made, the item is
delivered, or the services occur, regardless of when the money for them (receivables) Chapter II:
Review of Literature 46 is actually received or paid. In other words, income is counted when the
sale occurs, and expenses are counted when received the goods or services. .

Plewa and Friedlob (2002)

Measured cash flow ratios could be a better measurement for the firms performance than financial
ratios from income statements and balance sheets, because cash flows from operations as a main
component of the ratios, excluding the effect of non cash flow items such as depreciation expenses
and gain or loss on the sale of operating assets.

Government Accounting Standard Advisory Board (2003)

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Suggested by accrual accounting data, Governments will be better positioned to assess their
financial performance and financial position and these data can help in preparing the position of
assets and liabilities of the Government, which is not possible under other systems

Fleming (2004)

Suggested that the cash flow on revenue ratio and the debt coverage ratio are considered in
analytical procedures to detect financial statement fraud.

Porntip Chotkunakitti (2005)

measured the success of a firm can be measurement by its ability to generate cash, reporting of
cash flow receipts and receipts and payments has timing and matching problems that cause cash
flow to be a noisy measure of firm performance. Since under the continuing entity assumption,
companies are assumed to operate without discontinuing, in order measuring their performance the
companies need to slice time into small segments and report their progress for each specific period
of recording. Companies which record only cash transactions would have problems when the
transaction involves more than one period of recording. This is because companies usually deal
with credit transaction; the report will not show the cost at the time the business purchased the
assets. The incomplete information would give an inaccurate measurement of the firm’s
performance.

Leonie Jooste (2006)

Found that in the cash flow sufficiency ratio showed that the SA industries had enough cash to pay
primary obligations whereas the USA industries did not. Furthermore, at the levels of cash
generated by SA industries the investments in assets and dividend payouts were more than for US
industries. The cash flow generated by assets used in South Africa is also more than that of the US
but US industries retire long-term debt in shorter period than SA industries.

Larry N. Langemeier Danny Klinefelter and Dean Mccorkle (2007)

Reported data for estimating of cash flow may come from historical records. Such as, tax returns,
and other applicable information you may have. A cash flow forecasting is made periodically-
monthly- bimonthly, quarterly or every year (yearly) and this type of cash flow forecasting are
used on a monthly basis. The annual forecasting columns have to fill in first, and then only annual
forecasting may be allocated to the various months.

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Yoder (2007)

Compared out-of-sample prediction accuracy of regression models for one-year-ahead CFO. His
results indicate that a model including shortterm accrual components outperforms models using
only current CFO as a predictor, but only if the independent variables are aggregated over three
years. Our study differs from the two mentioned as we use firm-specific estimates, which we
expect to produce significantly lower prediction errors. We also test explicitly whether accruals
contribute more to cash flow prediction as we aggregate the dependent variable and include market
value of equity as our proxy for the highest level of aggregation. Andrew.

Saeedi and Ghaderi (2007)

Examined the predictive power of book value, net profit, operating cash flow and investment as
representative of accounting information related to market value of firms. Their results showed that
book value and accounting profit were more related items and considering cash flow (operating
and investment) could not increase explanatory power of models significantly. Final results of
incomplete cycles usually can be reliably measured at some point of substantial completion (for
example, at the time of sale, usually meaning delivery) or sometimes earlier in the cycle (for
example, as work proceeds on certain long-term construction-type contracts), so it is usually not
necessary to delay recognition until the point of full completion (for example, until the receivables
have been collected and warranty obligations have been satisfied)

Lambert et al. (2007)

Suggested that firms with more precise information about future cash flows have lower
conditional co variances with the market, and as a consequence, lower conditional betas and lower
expected returns. Overall, the following two-step link is suggested by the estimation risk literature:
1. firms with higher information quality have lower forward-looking betas; 2. lower forward-
looking betas lead to lower cost of equity. Note that the forward-looking betas cannot be directly
estimated from the past return realizations.

Gavin Cassar and Ken. S. Cavuzzo and Christopher. D. Ittner (2008)

Suggested accrual accounting data is an important tool in application of new public management
(NPM). Since it could provide a more comprehensive figure of activities than cash accounting and
contribute to improve internal management by providing full cost information. Most accountants
agree the accrual accounting data and it is a significant position in the private sector financial
reporting. By default, accrual accounting has been used for preparing the financial report of the

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private sector companies. They find a little evidence that accrual accounting data has reduced the
likelihood of loan denial after controlling for other factors previously found to be associated with
small business loan decisions. These results are robust to controlling self selection in the decision
to apply for loan and endogeneity in the choice to use accrual accounting.

Ali Rkein (2008)

Worked in accrual accounting and public sector and his conclusion was, the northern territory
Government introduced on accrual framework for its accounting, budgeting and reporting into its
public sector with the intention that this framework would lead to an improved performance and
accountability. Framework has been developed in private sector and introduced in public sectors as
Governments started to take a more commercial direction by subjecting public services to
competition and market principle. The study does not mention cash flow and its future prediction
in private and public company sectors but my study focuses in accrual accounting and predicting
future cash flow in reality. I have tried to accommodate those subjects together.

Maria Ogneva (2008)

Found out document that accrual quality is inversely related to the cost of equity capital. However,
found no association between accrual quality and future stock returns and conclude that there is no
evidence that the stock market prices accrual quality. The researcher hypothesize that Maria
Ogneva result arises because poor accrual quality firms experience negative cash flow shocks in
the future, which results in negative returns that offset the higher expected returns for such firms.
Consistent with this prediction, researcher find a significant negative association between realized
returns and accrual quality after controlling for cash flow shocks, either by including proxies for
future cash flow shocks in asset pricing regressions or by using an accrual quality measure that is
less correlated with future cash flow shocks. This result is robust to properly specified and standard
asset pricing tests. Overall, this paper adds to the growing literature suggesting that accrual quality
is linked to the cost of capital.

Brochet et al (2008)

Examined to predict future cash flows and the role of cash components and accounting accrual of
profit. They predicted future operating cash flows as well as market value of equity as dependent
variables and found that on average accruals relative to current operating cash flows improve
prediction of future cash flows. They also reviewed determinants of predictive power of accruals to
predict future cash flows and found that the probability of contribution of positive accruals was
more in predicting future cash flows, contribution of accruals in cash flow volatility increased and
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it is reduced in domain of discretionary accruals and special items. Whatever has been researched
about stock returns and value of firm have been mainly variables that shareholders noticed them
and seen from this perspective. While a variable such as operating cash flow that is calculated
based on accounting information to variables such as accruals that are more based on company
policies, is less dependent on management policies and in this respect is largely immune of
management interference and manipulations. Therefore, this study is trying to determine how
much pricing of stock is affected by specific accounting information such as operating cash flow.
In other words, the relationship between operating cash flow as independent variable and stock
price as dependent variable is determined to define that whether dependent variable can be
explained by independent variables.

Dana Hollie and C. S. Agnes Cheng (2008)

Evaluated six cash flow components (which parallel the direct method of the cash flow statement):
cash flows related to sales, cost of goods sold, operating expenses, interest, taxes, and other.
Consistent with our predictions, they find that the cash flow components from various operating
activities persist differentially. They find that cash related to sales, cost of goods sold, operating
expenses and interest persists a great deal into future cash flows; cash related to other has lower
persistence; and cash related to taxes has no persistence. They then incorporate accrual
components into our persistence regression model and find that the persistence of cash flow
components are generally higher than those of accruals; however, accrual components do enhance
model performance.

Abdul Khan and Stephen Mayes (2009)

Measured macro fiscal level, the important of accrual accounting data for macroeconomic policy
arise from the fact that measures assets and liabilities that are relevant to the overall stance of fiscal
policy and fiscal sustainability, but which are not measured by cash accounting. In particular,
whereas cash accounting measures only conventional debt, accrual accounting measures other
quest- debt liabilities such as accounts payable for the receipt of goods and services and
employee’s liabilities. So, accrual accounting data provides a broader measure of the burden of
Government financial commitments than the cash accounting.

Keanes Clothing (2009)

Worked maintaining adequate cash flow is vital essential for the accomplishment of a business.
An important element for business planning is the preparation of a cash flow forecasting. Cash

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forecast is an estimate or prediction in this case of the likely cash inflows and cash out flow over a
period of time like any forecast for the established company

Hossein Panahlan and Mehdi (2009)

Evaluated relationship between stock returns and two representative performance measures
means, operating income and cash flow from operation. They are clear in their documents and
there are no relationship between operating income and cash from operations with stock returns.
This was clear after investigated thesis variables. The reason of this result can be difference
existing between net incomes and operating income (gain and loss) or effect of the news and
rumors on IRAN burse. Therefore, they investigated the relationship between operating income
and cash from operation with stock return simultaneously; accrual items dominate cash from
operations in terms of the relationship with stock return.

Sandra Cohen (2009)

Compared accrual accounting information with that of cash accounting in terms of revenues,
expenses and financial result in other to quantify their relationship. As cash method in the Greek
public sector still constitute main basis for performance assessment and resource allocation
decisions. The researcher wants to understand whether they eventually reflect a fair proxy of
accrual measures that are deemed more suitable for these purposes. Empirical finding shows
approximately 70% of accrual accounting revenues (expenses) figures can be explained on the
basis of cash based revenues (expenses) as well as specific municipality socioeconomic factors.

Linda M. Nichols (2009)

Found out whether teaching the indirect or direct method of explaining the difference between
accrual operating income and cash flow from operations is more effective in helping students
understand the concept of accrual versus cash accounting. One expects that because business
students are accustomed to using accrual based financial statements, they will understand cash
flows better when presented with the indirect method which starts with accrual based income and
adjust it to be on a cash basis.

Khodadadi et al (2009)

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Investigated the ability of cash and accruals accounting information of profit in prediction of
future cash flows of listed companies in Tehran Stock Exchange. The investigated sample of that
study was selected among non-financial firms listed in Tehran Stock Exchange whose financial
statements were available in the period 2001-2006. The results of their study showed that variables
of past cash flows and accrual components of past earnings had ability to predict future cash flows.
The results of testing their models indicated that the addition of accrual components of earnings
into cash flows increased the predictive power of this model.

Thomas. H. Beechy (2010)

Discussed about 3 factors which are: ● The nature and components of full accrual accounting; ●
The relationship between relevance sources and the costs of delivering goods and services; ● The
distinction between private goods and public (collective) goods. About item number one the
researcher says that full accrual accounting is not a single concept and it constitutes several
accounting concepts such as: 1) Accrual accounting 2) expenses recognition 3) inter period
allocation. Every organization should use accrual accounting but applicability of the other two
concepts depends on the nature of the organization. The most of Nonprofit organizations provide
goods are those that can be enjoyed by only a limited number of beneficiaries, their use by some
individuals makes them unavailable to other once the supply is used up. Private goods have a
determinable output and therefore, a measurable cost. Often, on nonprofit organizations that
provide goods and services gets its revenue from one or both of two sources. General revenues
contributed by dues or other membership fees. User’s fees charged for the private goods it delivers.
User fees can be paid by either the user or by someone else on the fees are paid; they are intended
to cover the full cost of providing the services. Therefore, in these situations the expense bias is
appropriate.

Melik Serhat (2010)

Reported construction industry is an important sector that cash flow play an important role for that
because of the most risks sectors due to high level of uncertainties included in the nature of the
construction projects. Hence, a suitable cash planning technique is very important for proper cost
control and systematic cash management while considering the risk and uncertainties of the
construction projects. The purpose of this study is to improve a realistic and cost schedule
integrated cash flow modeling technique by using fuzzy set theory for Chapter II: Review of
Literature 70 including the uncertainties in project cost and schedule resulting from complex and
ambiguous nature of construction works.

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Charles, E. Jordan and Marilyn A. Waldron (2010)

Found that accrual basis measures are better predictors for future cash flows than cash flow basis
measure .So, accrual component basis are better for financial managers and other users of financial
statement for decision making.

Choong Yuel (2011)

Understood, analysts’ cash flow forecasts have become widely available through financial
services. Cash flow information enables practitioners to have a better understand the real operating
performance and financial stability of a company, practically when earning information is noisy
and of low quality.

Hadri Kusuma (2011)

Investigated and assess statements relative of cash flow disclosures as needed by the Australian
Accounting Standard Board (AASB) 1026 statement of cash flow. The information capacity is
estimated in terms of degree of the relationship between cash flow variable and security returns.
After examining the data relative to cash flow the researcher found out two important factors such
as: 1) To examine the capacity of the cash flow component in predicting future cash flow. 2) To
compare the capacity of cash flows and earning in predicting future cash flows. The best result
from hypothesis tests reflecting the second objective show that cash flow have information content
more than that provided by earnings alone and cash flow information have relative content, given
earnings alone. This finding suggests that the cash flow statement and income statement provide
mutually exclusive information and previous study from USA and UK that indicated cash flow
data had less information value than that of conveyed by earnings. This proof may suggest that
data reported in cash flow statement may be original data for decision making, separated from the
income statement.

Nichalas Davis (2011)

Tried for move from the cash basis to accrual basis of accounting in the Australian public sector
(APS). That was an important item of NPM for an improvement planning and an event of
historical significance. In this research the researcher identified key events in these changes and to
analyze them Chapter II: Review of Literature 71 through the theoretical Lens Aobermas (1976)
theory of legitimating. The main discussion of this paper expressed within this paper that accrual
accounting is better device used by different level of Government in Australian public sector APS

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in an attempt to combat the tendencies for economic, rationality and legitimacy difficulties that are
commensurate with welfare state societies such as Australia.

Jenis Cormier (2012)

Mentioned that the finance manager may use the received funds management to voluntary receive
funds forecasting. Put on document of the range of earning management guarantee with Canadian
Initial Public Offerings (IPOs) and study the scope to which firms with best corporate control
systems are less likely to use achieving funds management to obtain their achieving funds
estimates forecasting IPOs prospectus.

Bin Du et al (2012)

Found out that again meet the role of the cash and accrual component of accounting earning in
predicting future cash flow and using out of sample predictions. The researcher understands on
average accruals improve upon current cash flow from operations in predicting future cash flow.
This paper clears that positive accruals are more likely to improve upon current cash flow in
prediction future cash flow. In this paper the researcher has found out the continuity development
of business management depend on good adequate cash flow but not the best profit. Accrual cash
flow prediction can measure adequate liquidity. The paper centralization on cash flow of company
in short time and in this paper researcher clears that MELLRAL network method has better
prediction effect than ARIMA method. However, after short term abnormal data adjustment the
prediction effect has shown some improvement and he can take as a result large amount of cash
flow data have relatively within a company for prediction.

Farzin Rezaei, and Zahra Safari (2013)

Reported determining the effective factors on market value of equity can help shareholders to
make an appropriate decision and allocate economic resources efficiently. Profitability of
companies is one of the most important criteria for investors to assess companies, but relying on
net profit regardless of its constituent items will lead to loss of important and effective information
on decision making and therefore making improper decisions. The present study was carried out in
order to investigate and compare the explanatory power of different components of profit including
operating cash flow OCF, current accruals, and non-current accruals and free cash flow, as well as
to help explain the behavior of abnormal accruals in Tehran Stock Exchange. The results indicate
that information content of cash components of earnings is higher than other components of
earnings and also findings of the research show that division of profit into two components of

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operating cash flow and accruals relative to other profit combinations has a higher explanatory
value.

INDUSTRY PROFILE

CLASSIFICATION OF HAIR GOODS

Hair goods consist of head coverings or hair extensions used for lengthening or adding
fullness to one’s hair by incorporating additional human or synthetic hair. They are worn as
daily wear for beauty and grooming purposes or for functional purposes such as to cover for
hair loss. They are also worn as part of cultural traditions or religious observance, or for
occasions or festivities, such as Halloween. Wigs and access or is can be wide -ranging, and
include full wigs, half wigs, to rupees, doll wigs, braids, bangs and buns. Hair extensions are
hair products for adding length and or fullness to one’s hair by adding human or synthetic hair
through taping in, clipping, fusing or weaving. Wigs and accessories can be made from human hair
or synthetic hair. Hair extensions are made from either human hair or synthetic hair.

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Hair Goods

Chinese Hair European/

Caucasian Hair

Indian Hair Others

Wigs and Hair (such as Indonesian)

Accessories Extensions

Human Hair Wigs and Human Hair

Accessories Extensions Synthetic Protein
Filament Filament

Synthetic Wigs and Synthetic Hair

Accessories Extensions

Human hair goods offer the most natural look and feel. While human hair goods are
generally more costly than their synthetic hair counterparts, with proper care human hair goods
are generally more durable and can last over a year. Human hair goods are generally made
from either Chinese, Indian or European/Caucasian hair.

Synthetic hair is made from non-human materials such as synthetic fibre. It is

less costly than human hair.

GLOBAL HAIR GOODS MARKET

The following table details the major consumer groups of hair goods and their regions.

White

ConsumerGroups AfricanDescent nativeAfrican (Caucasian) Asian

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Majorregions . . . . . . . . NorthAmerica Africa Europe, Asia

North
America

Main purposes . . . . . . . . . As As necessary Fashion Mainly used to

necessities for decoration to make cover hair loss
accessorie
up for
Hair, s especially in
decoration, inherent
Japan.
andfashion deficiencies in
However, an
hair. Africans are
accessories increasing
starting to view
hair goods as number is used as
fashion fashion

goods as well accessories.

The demand for hair goods by consumers of African descent and native African
consumers is relatively inelastic. Both consumer groups tend to have curly and kinky hair
that grows relatively slowly and that is plastered to the scalp. For these customers, wearing
hair goods can save them from the long and extensive process of straightening and
styling their hair, and as a result they tend to make recurring purchases of hairgoods.

For consumers of African descent, mainly in the United States, in many cases hair goods
have become, not just functional solutions for their short natural hair, but an essential
fashion accessory that they use to change their styles and looks quickly and easily.
Consumers of African descent mainly purchase synthetic hair goods of medium or high
quality.

The strong demand for hair goods by native African consumers is driven largely by
their use of wigs and hair accessories as necessary concealment of perceived inherent
deficiencies in their hair constitution. The use of hair goods for fashion purposes is also on
the rise as the economic development in Africa leads tohigher disposable income for
Africans, particularly for African women. Because of their low income levels , African
consumers tend to purchase synthetic hair goods which are of medium to lowquality.

Caucasian consumers have a long history of wearinghair goods. Caucasian consumers

commonly use hair goods for cosmetic reasons or to create a certain fashion image.
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Caucasian consumers of hair goodsare primarily from North America and Europe, and they
generally possess higher income than consumers in other regions. They also pay more
attention to the quality of their hair goods, and thus human hairgoodsareingreaterdemand.

Asians, especially Japanese consumers who form a significant proportion of the Asian
hair goods market, have historically purchased hair goods in order to cover hair loss. In Japan,
more than half of the hair goods consumers use hair goods to hide their alopecia or hair loss.
However, Asians are also increasingly using hair goods as fashion accessories.

Due to the economic recovery in major hair goods markets, hair goods consumers,
particularly those of African descent in NorthAmerica and Africa who have inelastic
demand for hair goods, experienced a growth in disposable income. The global hair
goods market size by revenue rapidly expanded from US$2,487.6 million in 2011 to
US$5,038.7 million in 2016 at a CAGRof 15.2%, according to the Frost &Sullivan Report.
The market size of the hair goods (including wigs and accessoriesand hair extensions)
industry is based on manufacturer revenue. Due to marked-up prices between players of
different industry tiers across the manufacturer, wholesaler, sub distributor, retailer and end
customer levels, the market size by retail price was approximately US$15.4 billion in 2016
up from US$7.6 billion in 2011 at a CAGR of 15.1%, and will reach US$33.2 billion in
2021 with a CAGR of 16.7%, according to the Frost &Sullivan Report.

According to the Frost &Sullivan Report, over the next five years, the global hair
goods market size is likely to reach US$11,010.8 million in 2021 at a CAGR of 16.7%,
driven by global economic growthand the increasing popularity of hair goods as fashion
accessories among consumers in Asia and Africa and consumers of African descent in
North Americaand Europe.

The United States is the largest market for hair goods in the world, accounting for
39.8% of the global market in 2016, according to the Frost &Sullivan Report. Additionally,
the market size of hair goods in the United States grew from US$1,031.2 million in 2011 to
US$1,963.5 million in 2016, representing a CAGR of 13.7%. The majority of hair goods
consumption in the United States is by consumers of African descent whose demand for
hair goods is relatively inelastic and recurring. Consumption by Caucasian consumers
primarily of human hair products, particularly hair extension products, which sell at higher
price points, also contributed to this market growth.

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The market size of hair goods in the United States is projected to continue to
increase in the coming years, according to the Frost &Sullivan Report. This growth is
expected to be driven by the consistently large demand for hair goods from consumers,
especially those of African descent, as well as the increasing popularity of Halloween
celebrations. The market is forecasted to reach US$3,908.8 million in 2021 at a CAGR of
14.6% from 2017 to 2021, according to the Frost &Sullivan Report.

Between 2011 and 2016, the market size by revenue of human hair goods has steadily
increased from US$1,443.2 million to US$3,101.0 million at a CAGR of 16.5%,
according to the Frost &Sullivan Report. This growth was driven principally by the
demand from consumer group sin North America and Europe.

The market for human hair goods is expected to grow as fast as the demand for
synthetic hair goods.With the development of the global economy and rising disposable
income per capita, particularly for consumers of African descent in developed countries,
it is anticipated that consumers will increase consumption of human hair goods due to
human hair’s relative superior quality as compared to synthetic hair goods. The market
size of human hair goods by revenue is forecasted to increase from 2017 to 2021 ata
CAGR of 17.0% and to reach US$6,859 7million in 2021 , according to the Frost &
Sullivan Report

RAW MATERIAL PRICES

The major raw materials in the hair goods market are human hair and synthetic
fibres. The most popular types of human hair are Chinese hair, Indian hair, European hair
and Mongolian hair. Human haircan be characterisedas remyhair, drawn hair or non-
remyhair. Pricing of human hair is determined by length, quality and other parameters.

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Synthetic Fibre Price(Global),2011-2021E

Thousand USS/TON
2

1.5

1
Thousand
0.5 USS/TON

0
2011
2012
2013
2014
2015
2016
2017
2018
2019e
2020e
2021e
Human Hair Price (Global),2011-2021E

USS/KILOGRAM
140
120
100
80
60 USS/KILOGRAM
40
20
0
2011 2012 2013 2014 2015 2016

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Synthetic Fibre
The price of synthetic fibre has a close relationship with the price of oil. From 2011
to2016, in line with the decrease in global crude oil prices, the global synthetic fibre price
decreased from US$1,880 per ton in 2011 to US $940 per ton in 2016, according to the
Frost & Sullivan Report.

The synthetic fibre price is projected to maintain a gentler rate of decrease from
2017 to 2021, after the excess of crude oil production has been absorbed, and is projected
to decline to US$820 per ton in 2021, according to the Frost & Sullivan Report.

Human Hair

Overall, global human hair prices, based solely on weight without regard to hair
length, decreased from US$127.4 per kilogram in 2011 to US$50.1 per kilogram in 2016.
As the export price of human hair from major exporting countries such as India and
Pakistan is expected to continue to decrease, the global human hair price is projected to
continue to decline to US$37.9 per kilogram by 2021, according to the Frost &Sullivan
Report.

MAJOR MARKET DRIVERS

The hair goods market is driven by the following major market factors:

Increasing Demand from Consumers of African Descent

Hair goods are necessities for most women of African descent due to their naturally
curly and kinky hair. Consumption by women of African descent accounts for the majority
of global hair goods consumption. Particularly, consumers of African descent in the United
States and Europe have higher purchasing power than their counterparts in Africa. More
than half of the United States’ hair goods sales comprise sales to consumers of African
descent. As a result, the United States is the largest import and consumption country for
hair goods. According to the Frost &Sullivan Report, the average per capita disposable
income of consumers of African descent in the United States, Europe and Africa has
experienced continuous growth at a CAGR of 2.9%, 2.2% and 8.9% from 2011 to 2016,
respectively. In the near future, the increasing income of consumers of African descent

38
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around the world will very likely translate into a growing demand for hair goods.
According to the Frost &Sullivan Report, when compared with 2011, there was an increase
of approximately 13% to 18% in the percentage of consumers of African descent in the
United States, Africa and Europe in 2016. It is expected that an increasing number of
consumers of African descent, especially those in the United States with higher purchasing
power, will be more willing to accept hair goods as fashion accessories instead of
functional resolution, for their natural hair.

Changing Perception towards Hair Goods in the Asia Market

Asia has the largest fashion consumer base in the world. However, Asian hair goods
consumers account for only a relatively small proportion of total hair goods consumers
largely due to cultural reasons. In the past, the majority of Asian hair goods customers
purchased hair goods to cover hair loss, and most consumers viewed hair goods as a means
to conceal hair loss. According to the Frost &Sullivan Report, around 80%-90% of Asian
hair goods consumers purchased hair goods for functional purposes (such as concealment
of hair loss) in 2011, while the remaining 10%-20% purchased hair goods for non-
functional purposes (such as daily beauty and grooming, special occasions and festivities).
Moreover, hair goods in the past looked distinctively inauthentic due to low production
technology. However, with the rapid development of the hair goods industry, hair goods
offerings have improved to offer a more natural look and feel, making them hardly
distinguishable from real hair without close inspection. Therefore, along with the
increasing purchasing power of Asian consumers, improving production technology of hair
goods as well as the evolving life styles among the people in this region, there is changing
perception towards hair goods in the Asian market in recent years and people tend to spend
more on hair products for non-functional purposes. According to the Frost &Sullivan
Report, around 38% of the hair goods customers in Asia purchased hair products for non-
functional purposes in 2016, and this percentage is expected to further grow in the coming
years.

Increasing Popularity of Halloween Products

Halloween is a very significant event in western countries, and is widely celebrated

in the United States. During this celebration, a significant portion of the western
population will dress up in extravagant costumes and hair goods. Consumers are
generally willing to spend large sums of money on various kinds of costumes to look

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different from the rest. This is an especially common phenomenon in the United States
and in some parts of Europe where people hold festive parades and marches on the streets
that entail large amounts of costumes, masks and hair goods. Therefore, the demand and
sales of hair goods and costumes surge during Halloween. According to the Frost
&Sullivan Report, the global market size of the market for Halloween wear, which
includes costumes, hair goods, masks and other accessories, was approximately US$5.8
billion, by manufacturer revenue, in 2016. Costumes, hair goods, masks and other
accessories accounted for 80.7%, 9.8% and 9.5%, respectively, of the market size in 2016,
according to the Frost &Sullivan Report. The global market size of Halloween wear by
manufacturer revenue expanded at a CAGR of 11.3%, increasing from approximately
US$3.4 billion in 2011 to approximately US$5.8 billion in 2016, according to the Frost
&Sullivan Report. The global market for Halloween wear is expected to grow to
approximately US$12.4 billion by 2021 and will further boost the demand for hair goods,
costumes, masks and other accessories forth is holiday, according to the Frost & Sullivan
Report.

DEVELOPMENT TRENDS
The hair goods market has been characterised by the following development trends:

Rapid Expansion of Synthetic Hair Goods Industry

After the introduction of cheap, mass-produced synthetic hair goods in the last
century, synthetic hair goods have penetrated the previously unexplored middle and low
income consumer groups and gained substantial market share in the past decades. In terms
of quantity, synthetic hair goods account for a larger proportion of hair goods sold globally
due to their low price and variety. In terms of quality, synthetic hair goods are increasingly
natural looking due to technical improvements, making them hardly distinguishable from
human hair products without close inspection. Synthetic hair goods provide a cheaper but
decent substitute for the more expensive human hair goods for customer groups with lower
income.

Continuous Innovation in Manufacturing Techniques and Product Designs

To improve the quality of raw materials, reduce discomfort and enhance the
authenticity and aesthetics of hair goods, especially those made of synthetic fibre,
increasing attention is expected to be paid on innovation in production technology and
product design globally. An increasing number of hair goods manufacturers are
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introducing machinery that enables some of the manufacturing processes such as dyeing,
washing, and weaving to be highly automated. Moreover, technical innovations in
chemicals used in the manufacturing process, such as high-quality conditioners and
detergents, are enabling more manufacturers to preserve the quality of raw materials, such
as delicate human hair. In terms of product design, hair goods with up-to-date fashion
features are increasingly popular, especially for consumers in developed countries, which
in turn will stimulate more hair goods manufacturers to focus on product design of their
products rather than simply meeting customers’ needs, and introduce more higher profit
margin products to the market.

Shift in the Hair Goods Industrial Landscape

Hair goods manufacturing is a labour-intensive industry, thus the rising labourcosts
have forced hair goods manufacturers to shift their production bases to lower labourcost
regions. In China and India, hair goods manufacturers have capitalisedon low labourcosts
and proximity to hair sources to dominate theglobal hair goods manufacturer market. In the
future, however, as the labourcosts in China and India continue to rise with their economic
expansions, the production bases of hair goods will gradually shift to other developing
countries with lower labourcosts and more available land resources such as Bangladesh,
Vietnam andLaos.

ENTRY BARRIERS
The hair goods market is subject to the following entry barriers:

Strong Relationships with Hair Suppliers

Hair goods manufacturers are heavily dependent on human hair and synthetic
fibresuppliers. Therefore, it is important for manufacturers to develop a good relationship
with upstream suppliers in order to secure adequate supplies. However, many existing
manufacturers have already established close relationships with human hair suppliers.
Existing manufacturers tend to form exclusive deals with certainquality suppliers,
depriving new entrants of quality sources of the scarce human hair supply. Moreover, large
human hair goods manufacturers tend to purchase and keep large stocks of human hair,
further keeping new entrants from obtaining large quantities of human hairsupplies.

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Brand Effect
Manufacturers of well-known brands are often associated with better quality and are
considered more trustworthy in terms of product safety and other aspects. Wholesalers and
consumers alike, with limited knowledge of the hair goods industry, tend to choose
reputable hair goods manufacturers. New entrants will find it hard to establish their own
brand and expand their market share. Without relatively strong brand awareness,

New hair goods manufacturers may struggle to find potential customers compared
with the experienced manufacturers. Further more, without industry expertise and client
resources, new market entrants will find it very difficult to gain anedge over the existing
hair goods manufacturers.

Technology
Some existing manufacturers have already researched and developed technology for
producing synthetic fibre such as multi-colour fibre production. New hair goods
manufacturing entrants that do not already possess sufficient technological proficiency
have to procure good quality synthetic fibre from existing manufacturers at higher prices.
In addition to having established technical expertise in the production of hair goods,
existing manufacturers have skilled personnel, with know-how in the hair goods
manufacturing industry, to produce their handmade hair goods. Furthermore, existing
manufacturers can afford to conduct thorough research on the latest developments in
human hair goods production techniques and thereby provide a wider range of products
by utilising advanced knowledge and technology. New entrants would need to either have
professional personnel in manufacturing or sufficient capital investment in developing
new technology in order to effectively compete. Therefore, small market entrants with
little prior experience or weak technical capability will find it difficult to enter the
market.

Cost Control
Hair goods manufacturing involves numerous labour-intensive processes that require
workers and hair specialists. Consequently, labour costs constitute a large proportion of
the production costs. For existing hair goods manufacturers, particularly the large players
and industrial leaders that employ thousands of workers, labour costs can be more easily
managed with economies of scale and better labour management skills. In contrast, small

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manufacturers will generally find it more difficult to control costs and therefore will
achieve smaller profit margins as compared to larger players, which may be an
impediment to rapid expansion to gain market share. For new market entrants, the high
costs involved in the production process serve as asignificant barrier.

COMPETITIVE LANDSCAPE AND OUR ADVANTAGES

The following table sets forth the competitive landscape and the market share of the
top ten global synthetic hair goods manufacturers in terms of revenue in 2016:

Market share of

Ranking global synthetic

No. Enterprises Mainproducts/services hair goods market

1. Competitor A . . Wigs and hair restoration and transplant services 12.6%

2. Competitor B . . Human hair wigs, women’s hair goods, synthetic hair 9.8%

wigs, training wigs and men’s toupees

3. Competitor C . . Synthetic hair extensions, braids and weaves 6.4%

4. Competitor D . . Human hair and synthetic hair goods 5.0%

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Ranking Market share of

global synthetic

No. Enterprises Mainproducts/services hair goods market

5. OurGroup. . . . Full wigs, half wigs, lace wigs, hairpieces and 4.0%

accessories, general braids, special braids, weavings, toupees,

high-end human hair extensions and

Halloween products

Hair weaving, hair bulk, women’s wig, men’s toupees,

6. Competitor E .. 3.2%

women’s hairpieces, training wigs, and hair extensions

7. Competitor F . . Human hair wefts, men and women’s wigs, and 2.6%

Accessories

8. Competitor G . . Synthetic hair full wigs and half wigs 2.5%

9. Competitor H . . Full wigs, half wigs and hair extensions 2.1%

10. Competitor I. . . Hair fibres, hair goods and accessories 1.7%

The following table sets forth the competitive landscape and the market share of the top ten
global hair goods manufacturers in terms of revenue in 2016:

According to the Frost &Sullivan Report, our competitive advantages are our
comprehensive product portfolio, long-term and close relationships with key customers,
deep manufacturing experience and knowledge, robust research and development
capabilities and low production costs due to our strategic location and economies of scale.
For further details of our competitive strengths, see “Business – Our Competitive
Strengths”.

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Market share of

Ranking global hair goods

No. Enterprises Mainproducts/services market

1. Competitor A . . Wigs and hair restoration and transplant services 8.5%

2. Competitor B . . Human hair wigs, women’s hair goods, synthetic hair 5.1%

wigs, training wigs and men’s toupees

3. Competitor C . . Synthetic hair extensions, braids and weaves 2.5%

4. Competitor D . . Human hair and synthetic hair goods 2.4%

5. Competitor E . . Hair weaving, hair bulk, women’s wig, men’s toupees, 2.3%

women’s hairpieces, training wigs, and hair extensions

6. Competitor F . . Human hair wefts, men and women’s wigs, and 2.0%

Accessories

7. Our Group . . . . Full wigs, half wigs, lace wigs, hairpieces and 1.5%

accessories, general braids, special braids, weavings,

toupees, high-end human hair extensions and

Halloween products

Hair fibres, hair goods and accessories

8. Competitor I. . . 1.4%

9. Competitor J. . . Human hair goods 1.4%

10. Competitor H . . Full wigs, half wigs and hair extensions 1.2%

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ABOUT FROST & SULLIVAN

Frost &Sullivan is an independent global consulting firm that was founded in New
York in 1961. It offers industry research and market strategies and provides growth
consulting and corporate training. Its industry coverage includes, among others, industrial
and machinery, industrial automation and electronics, chemicals and materials, consumer
products, and technology. The Frost &Sullivan Report includes information on the global
hair goods market. Frost &Sullivan has conducted detailed primary research that involved
discussing the status of the industry with certain leading industry participants. Frost
&Sullivan has also conducted: (i) secondary research that involved reviewing company
reports, (ii) independent research reports, and (iii) review of data retained on its own
research database. Frost &Sullivan has obtained the figures for the estimated total market
size from historical data analysis plotted against macroeconomic data. Frost &Sullivan
has also considered the above-mentioned industry key drivers.

Frost &Sullivan’s market engineering forecasting methodology integrates several

forecasting techniques with a market engineering measurement-based system. It relies on
the expertise of the analyst team in integrating the critical market elements investigated
during the research phase of the project. These elements include:

• expert-opinion forecasting methodology;

• integration of market drivers and restraints;
• integration with the market challenges;
• integration of the market engineering measurement trends and
• integration of econometric variables.
In compiling and preparing the Frost &Sullivan Report, Frost &Sullivan has adopted the
following assumptions:

• the social, economic and political environment globally is likely to remain

stable in the forecast period and
• there late dindus try key driversare likely to drive the market in the forecast period.

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THE ARQUBE INDUSTRIES(INDIA) LIMITED

Brief History:

Arqube industries (INDIA) Limited is a public incorporated on 21 November 2005. It is

classified as Non-govt company and is registered at Registrar of companies, Vijayawada. Its
authorized share capital is Rs.100,000,000 and its paid up capital is Rs 60,000,000 it is
involved in manufacture of other chemical products

Arqube industries (India) Limited annual general meeting (AGM) was last held on 20th
September 2018 and as per records from Ministry of Corporate affairs (MCA), its balance
sheet was last field on 31 March 2018

Directors of Arqube Industries (India) Limited are Raghu Rama Raju Gokaraju, Pravathi
Gokaraju, Appalaraju indukuri,..

ARQUBE INDUSTRIES (INDIA) LIMITED was established as a partnership firm, M/S

Veena impex in 1999 by Mr.G.Raghu Rama Raju, a management graduate from Tanuku,
West Godavari District of Andhra Pradesh. The partnership firm was converted into a public
limited company (Arqube Indusries (INDIA) Limited) in 2005.We are the only public limited
company listed in B2B portals and we truly belive in transparency and praviding the genuine
information to the customers. The company was originally conceived and established as an
export oriented firm that gave priority to trading in human hair. Over the past nine years the
company has emerged as one of the major exporter of human hair. Over the past nine years,
the company has emerged as one of the major exporters of human hair. In 2005, in
recognition of its services, the company was conferred the STAR EXPORT HOUSE status by
the Government of India. Over the past two years, the company has expanded its scope of
operations and has emerged as an exporter of agricultural commodities.

It is an Indian company that is governed by a specific objective, that is to fulfill the

demand of Indian suppliers in finding buyers and exporters from all across the globe. Our
endeavor is to fill the void for an exclusive organization that would be able to offer an
extensive purchasing service in all spheres of business categories. With a humble beginning,
we began entertaining suppliers from across the country and slowly growing, mingling,
harboring, and customizing ourselves with the changing communication and economic

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realities. Today, ARQUBE has matured itself not only in Asia, but throughout all five
continents of the world. We are able to supply from a high quality grain to an automobile
solenoid; quickly and economically.

It is the largest online business to business marketplace of products which are supplied by
some well-renowned Indian suppliers and product distributors. We aim at helping you to
browse for suppliers by clicking on the product category of your choice. This properly
managed Indian suppliers' directory facilitates your search for premium Indian suppliers.

The listing of suppliers has been grouped according to the different categories of the
products. Suppliers India is meant to provide a bridge between the Indian suppliers and
manufacturers and buyers across the globe.
Despite being spread over every imaginable horizon of business categories, we are not self-
possessed but rather incessantly looking towards the future and preparing us for the tough
road ahead. Pushed by a sanguine impression on our spirit, we are well armed to react and
meet the challenges that the world requirements might bring, and prepare us for a one-stop
business solution for the global business fraternity. Our sincere practice is to provide
exceptional edge in harnessing the latest business opportunities, identifying and locating
regional and international distributors and offer numerous products of zillion categories to
our users.
With an unmatched expertise in data acquisition and online promotion we have now a
database of over 2 million companies and over 2,00,000 product categories, as well as trade
names and brand names. We are continually updating our product lists and also new
company listings are welcomed. We have 1,524 different product categories and sub-
categories. It is well promoted on all major search engines and receives an average of 20.5
million hits per month. We are particular about the accuracy of targeting the market and user
needs and innovative promotional opportunities. In addition, we also provide latest export
and import news and happenings in the global market.

We are a combination of people, product and practice and all of them are of high quality. We
believe in transparency and transcendental ability to reach the heart of buyers. Our prompt
services assist corporation, small and medium business owners, procurement organizations
and many more. We also encourage potential business partners to boost the size and
efficiency of ARQUBE.

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Specialising in the production of the best quality Remy human hair into different styles and
colours to meet your requirements.

Our rigorous manufacturing process ensures quality, durability, and comfort to all our
customers. We have well-developed infrastructure that helps us in meeting the variegated
needs of our clients with proficiency. Fitted with machines of modern technology, we are
able to execute our operations more efficiently and in a cost effective manner.

Companies in this industry operate hair salons and barber shops. Major companies include
Regis, Ratner Companies, and Sport Clips (all based in the US), as well as Frisör Klier
(Germany), Premier Salons (Canada), and Stefan Hair Fashions (Australia).

Key sources of growth for the global hair care industry include expanding middle classes in
developing nations. Shifting cultural norms also drive demand.

The US hair care services industry includes about 80,000 establishments (76,000 beauty
salons; 4,000 barber shops) with combined annual revenue of about $20 billion

A saturated haircare market in South Africa has led to lower revenues in the hair care market
than its other African peers. A highly segmented population with vast income differences
lead to difficulties in product development and marketing. Consumers are looking for styling
products which last longer but are also devoid of harmful chemicals, phasing a number of
products from the market. E-commerce is flourishing because of online availability of
products with all the desired properties..

For 20 years, Raghurama raju has helped customers and partners accelerate growth and
improve their business performance through the power of data and analytics. Our nearly 40
employees around the world are dedicated to this unique purpose, and we are guided by
important values that make us the established leader in commercial data and insight.

Arqube industries (India) Limited Coporate Identification Number is (CIN)

U24247AP2005PLC048110 and its registration number is 48110. Its Email address is
arqube188@gmail.com and its registered address is NO.5/17/1,DUWA VILLAGE,TANUKU
MANDAL WEST GOAVARI DISTRICT , ANDHARAPRADESH.

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COMPANY DETAILS:

Company Name : ARQUBE INDUSTRIES (INDIA) LIMITED

Nature of Business : Manufacturer

Additional Business : Service Provider

Company CEO : APPALARAJA RAJU

Total Number of Employees : 26 to 50 People

Year of Establishment : 1999

Legal Status of Firm : Public Limited Company

Annual Turnover : Rs. 500 – 1000 Crore

CIN : U24247AP2005PLC048110

Company Status : Active

RoC : RoC-VIJAYAWADA

Registration Number : 48110

Company Category : Company Limited by Shares

Company Sub Category : Non-govt company

Class of Company : Public

Date of Incorporation : 21 November 2005

SHARE CAPITAL :

Authorised Capital : rs100,000,000

Paid up Capital : rs60,000,000

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LISTING & ANNUAL COMPILANCE DETAILS :

Listing Status : Unlisted

Date of Last Annual General Meeting : 20 September 2018

Date of Last Balance Sheet : 31 March 2018

DIN DIRECTORNAME DESIGNATION APPOINTMENT

&

DATE

0045389 RAGHU RAMA RAJU MANAGING 01MAY 2015

GOKARAJU DIRECTOR

0045396 PARVATHI GOKARAJU WHOLETIME 01 MAY 2015

DIRECTOR

045402 APPLARAJU INDUKURI WHOLETIME 01 MAY 2015

DIRECTOR

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Sl.N Names, Addresses, Description and Occupation No.of Equity Name, description,
o. of Subscribers Shares Taken address and occupation of
by Each Witness with Signature
Subscribers

GOKARAJU RAGHU RAMA RAJU

1. S/o. Suryanarayana Raju 5,40,000
Flat No.409, Indralock Avenue, ( Five Lakhs
Main Road, Tanuku-534 211, Forty
West Godavari District, (A.P) Thousand only
Date of Birth : 15-08-1966 )
Occupation : Business
-Sd/-
2. GOKARAJU PARVATHI
W/o. Raghu Rama Raju 3,80,000
Flat No.409, Indralock Avenue, ( Three Lakhs
Main Road, Tanuku-534 211, Eighty
West Godavari District, (A.P) Thousand
Date of Birth : 16-02-1976 Only )

No:40 ; Jai Bharat Nagar

Occupation : Business

Company Secretary
Sri. V.Mohana Rao

Nizampet Road

Hyderabad -72
-Sd- S/o.Kondaiah

Kukatpally,
Sd/-

3. GOKARAJU GANAPATHI RAMA

PRABHKARA RAJU
S/o.Suryanarayana Raju 30,000
D.No.1-85, Juvvalapalem Village, ( Thirty
Kalla Mandal, Thousand
West Godavari District, (A.P) Only )
Date of Birth : 09-08-1963
Occupation : Business
-Sd-
4. GOKARAJU BALA THRIPURA SUNDARI
W/o.Ganapathi Rama Prabhakara Raju 10,000
D.No.1-85, Juvvalapalem Village, ( Ten
Kalla Mandal, Thousand
West Godavari District, (A.P) Only)
Date of Birth : 14-07-1971
Occupation : House Wife
-Sd-

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5. INDUKURI APPALA RAJU

S/o.Late Rama Raju 10,000
H.No.12-2-4, Ratna Sai Nagar, ( Ten
Tanuku-534 211, Thousand
West Godavari District (A.P) Only)
Date of Birth:14-07-1956
Occupation : Employee
-Sd-

6. INDUKURI BHAGYA LAKSHMI

W/o.Appala Raju 10,000
H.No.12-2-4, Ratna Sai Nagar, ( Ten

No:40 ; Jai Bharat Nagar

Tanuku-534 211, Thousand

Company Secretary
Sri. V.Mohana Rao
West Godavari District (A.P) Only)

Nizampet Road

Hyderabad -72
S/o.Kondaiah

Kukatpally,
Date of Birth:05-08-1960

Sd/-
Occupation : House wife
-Sd-

7. VEGESNAVENKATA SATYANARAYANA
RAJU 10,000
S/o.Surapa Raju ( Ten
H.No.2-7B, Thousand
Kattasubba rao thota, Only)
Eluru-6,
West Godavari District (A.P)
Date of Birth:09-07-1960
Occupation : Business
-Sd-

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8. VEGESNA SEETHAMAHALAKSHMI
W/o. Satyanarayana Raju 10,000
H.No.2-7B, ( Ten
Kattasubba rao thota, Thousand
Eluru-6, Only)
West Godavari District (A.P)
Date of Birth:06-11-1962
Occupation : House wife
-Sd-

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DATA ANALYSIS AND INTERPRETATION

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2014

PARTICULARS 31.3.2014
`

I. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 26885014

Add/Less: Adjustments for
Depreciation 847229
Financial Costs 8445427
Non-Operating Income (390768)
Profit on sale of asset (261119)
Operating profit before working capital changes 35525783
Add/Less: Adjustments for working capital
Decrease/(Increase) in Inventories (127808821)
Decrease/(Increase) in Trade Receivables 64154105
Decrease/(Increase) in Short-term Loans and advances 197041
Increase/(Decrease) in Other Current liabilities 30299

Cash generated from operations (27901593)

Less: Direct taxes paid 7007950
Net cash used in operating activities (34909543)

II. CASH FLOW FROM INVESTING ACTIVITIES

Investment in fixed assets/works under progress (443495)
Sale of Fixed Assets 18251500
Non-Operating Income 390768

Net cash used in Investing activities 18198773

III. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 31030724
Interest and finance charges (8445427)
Dividend Paid (3000000)
Dividend Tax paid (509850)
Net cash from financing activities 19075447

Net increase in cash and cash equivalents 2364677

Cash and cash equivalents at the beginning of the period 1302290

Cash and cash equivalents at the end of the period 3666967

Net increase/(decrease) in cash and cash equivalents 2364677

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INTREPRETATION:

Cash flow from operating activities:

The net cash flow from operating activities is Rs.279.015lakhs as the net profit of and
before tax and extraordinary items are Rs. 268.8501lakhs which is adjusted for prior period
adjustments, depreciation Rs.844.54, interest Rs.700.79 and tax on income. The operating
before the working capital changes is Rs.355.257lakhs. There is cash outflow because of the
increase in other current assets and loans and advances. There is cash inflow by way of
decrease in current liabilities, and cash credit loans. There is cash outflow because of increase
in provisions. There interest paid during the year Rs.236.467lakhs and the income tax paid
during the year Rs.700.79lakhs. Therefore, the net cash flow from operating activities is
Rs.349.0954lakhs.

Cash flow from investing activities:

There is huge cash outlay by way of purchase of fixed assets of Rs.144.52lakhs.The

cash inflow by way of sale of fixed assets Rs.18.19lakhs. So, the net cash used in investing
activities Rs.126.33lakhs.

Cash flow from financing activities:

There is cash outflow by way of payment of dividends including tax on dividends Rs.-
89.54lakhs. There is cash inflow by way of proceeds from long term and other
borrowingsRs.310. 307lakhs and Cash outflow by way of payment of long-term borrowings
Rs.310.307lakhs.The net cash used in financing activities Rs.339.84lakhs Therefore, the cash
balance cash and cash equivalents during the year 2013-14 from operating, investing, and
financing activities Rs.190.754slaks

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2015

PARTICULARS 31.3.2015
`

I. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 14489482

Add/Less: Adjustments for
Depreciation 836417
Financial Costs 4320593
Non-Operating Income (327501)
Profit on sale of asset (860)
Operating profit before working capital changes 19318131
Add/Less: Adjustments for working capital
Decrease/(Increase) in Inventories 1910181
Decrease/(Increase) in Trade Receivables (64154105)
Decrease/(Increase) in Short-term Loans and advances 10058618
Increase/(Decrease) in Other Current liabilities 290707

Cash generated from operations (32576469)

Less: Direct taxes paid 1925640
Net cash used in operating activities (34502109)

II. CASH FLOW FROM INVESTING ACTIVITIES

Investment in fixed assets/works under progress (17811290)
Sale of Fixed Assets 5000
Non-Operating Income 327501

Net cash used in Investing activities (17478789)

III. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 58687176
Interest and finance charges (4320593)
Dividend Paid (3000000)
Dividend Tax paid (486675)
Net cash from financing activities 50879908

Net increase in cash and cash equivalents (1100990)

Cash and cash equivalents at the beginning of the period 2403280

Cash and cash equivalents at the end of the period 1302290

Net increase/(decrease) in cash and cash equivalents (1100990)

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INTREPRETATION:

Cash flow from operating activities:

The net cash flow from operating activities is Rs.508.799lakhs as the net profit of and
before tax and extraordinary items are Rs. 144.894lakhs what is adjusted for prior period
adjustments, depreciation Rs. 836.417, interest Rs.327.501 and tax on income. The operating
before the working capital changes is Rs. 193.181lakhs. There is cash outflow because of the
increase in other current assets and loans and advances. There is cash inflow by way of
decrease in current liabilities, and cash credit loans. There is cash outflow because of increase
in provisions. There interest paid during the year Rs.844.39lakhs and the income tax paid
during the year Rs.486.67lakhs.Therefore, the net cash flow from operating activities is
Rs.3450.210lakhs.

Cash flow from investing activities:

There is huge cash outlay by way of purchase of fixed assets of Rs.5000.The cash
inflow by way of sale of fixed assets Rs.860. So, the net cash used in investing activities
Rs.4866.75lakhs.

Cash flow from financing activities:

There is cash outflow by way of payment of dividends including tax on dividends

Rs.300.00.00lakhs. There is cash inflow by way of proceeds from long term and other
borrowings Rs.5868.717 and Cash outflow by way of payment of long-term borrowings Rs.-
3049.94lakhs.The net cash used in financing activities Rs.5087.990lakhs.Therefore, the cash
balance cash and cash equivalents during the year 2014-15 from operating, investing, and
financing activities Rs.1931.8131lakhs.

INTREPRETATION:

Cash flow from operating activities:

The net cash flow from operating activities is Rs.482.162lakhs as the net profit of and
before tax and extraordinary items is Rs. 40.830lakhs which is adjusted for prior period
adjustments, depreciation Rs.65.085, interest Rs.574.001 and tax on income. The operating
before the working capital changes is Rs. 561.696lakhs. There is cash outflow because of the
increase in other current assets and loans and advances. There is cash inflow by way of
58
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decrease in current liabilities, and cash credit loans. There is cash outflow because of increase
in provisions. There interest paid during the year Rs.-245.882lakhs and the income tax paid
during the year Rs684.175lakhs.Therefore, the net cash flow from operating activities is
Rs.606.74lakhs.

Cash flow from investing activities:

There is huge cash outlay by way of purchase of fixed assets of Rs.574.001lakhs.The

cash inflow by way of sale of fixed assets Rs366.966.lakhs. So, the net cash used in investing
activities Rs1400.601.lakhs.

Cash flow from financing activities:

There is cash outflow by way of payment of dividends including tax on dividends are
nill. There is cash inflow by way of proceeds from long term and other borrowings and Cash
outflow by way of payment of long-term borrowings Rs.1253.24lakhs.The net cash used in
financing activities Rs.1345.95lakhs.Therefore, the cash balance cash and cash equivalents
during the year 2015-16 from operating, investing, and financing activities Rs.861.64lakhs.

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CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2017

PARTICULARS 31.3.2017
`

CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 26885014

Add/Less: Adjustments for
Depreciation 847229
Financial Costs 8445427
Non-Operating Income (390768)
Profit on sale of asset (261119)
Operating profit before working capital changes 35525783
Add/Less: Adjustments for working capital
Decrease/(Increase) in Inventories (127808821)
Decrease/(Increase) in Trade Receivables 64154105
Decrease/(Increase) in Short-term Loans and advances 197041
Increase/(Decrease) in Other Current liabilities 30299

Cash generated from operations (27901593)

Less: Direct taxes paid 7007950
Net cash used in operating activities (34909543)

CASH FLOW FROM INVESTING ACTIVITIES

Investment in fixed assets/works under progress (443495)
Sale of Fixed Assets 18251500
Non-Operating Income 390768

Net cash used in Investing activities 18198773

ASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings 31030724
Interest and finance charges (8445427)
Dividend Paid (3000000)
Dividend Tax paid (509850)
Net cash from financing activities 19075447

Net increase in cash and cash equivalents 2364677

Cash and cash equivalents at the beginning of the period 1302290

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INTREPRETATION:

Cash flow from operating activities:

The net cash flow from operating activities is Rs.349.9095lakhs as the net profit of
and before tax and extraordinary items is Rs. 268.850akhs which is adjusted for prior period
adjustments, depreciation Rs.847.224 interest Rs.390.768 and tax on income. The operating
before the working capital changes is Rs. 355.255lakhs. There is cash outflow because of the
increase in other current assets and loans and advances. There is cash inflow by way of
decrease in current liabilities, and cash credit loans. There is cash outflow because of increase
in provisions. There interest paid during the year Rs. Rs.509.985lakhs and the income tax
paid during the year Rs. Rs.190.75lakhs .There fore, the net cash flow from operating
activities is Rs.190.754lakhs.

Cash flow from investing activities:

There is huge cash outlay by way of purchase of fixed assets of Rs.179.19lakhs.The

cash inflow by way of sale of fixed assets Rs.4.57lakhs. So, the net cash used in investing
activities Rs.-154.91lakhs.

Cash flow from financing activities:

There is cash outflow by way of payment of dividends including tax on dividends are
nill. There is cash inflow by way of proceeds from long term and other borrowings and Cash
outflow by way of payment of long-term borrowings Rs.1221.57lakhs.The net cash used in
financing activities Rs.906.64lakhs.Therefore, the cash balance cash and cash equivalents
during the year 2016-17 from operating, investing, and financing activities Rs.1192.96lakhs.

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PARTICULARS 31.3.2018
`

I. CASH FLOW FROM OPERATING ACTIVITIES

Net Profit before tax 11827521

Add/Less: Adjustments for
Depreciation 543809
Financial Costs 5217480
Non-Operating Income (613832)

Operating profit before working capital changes 16974978

Add/Less: Adjustments for working capital
Decrease/(Increase) in Inventories 8541557
Decrease/(Increase) in Trade Receivables 19131127
Decrease/(Increase) in Short-term Loans and advances 1920782
Increase/(Decrease) in Other Current Liabilities and Trade payables (24894749)

Cash generated from operations 21673695

Less: Direct taxes paid 3801130
Net cash used in operating activities 17872565

II. CASH FLOW FROM INVESTING ACTIVITIES

Investment in fixed assets/works under progress 0
Sale of Fixed Assets 0
Non-Operating Income 613832

Net cash used in Investing activities 613832

III. CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from borrowings (4375792)
Interest and finance charges (5217480)
Dividend Paid (6000000)
Dividend Tax paid (1221458)
Net cash from financing activities (16814730)

Net increase in cash and cash equivalents 1671667

Cash and cash equivalents at the beginning of the period 1150129

Cash and cash equivalents at the end of the period 2821796

Net increase/(decrease) in cash and cash equivalents 1671667

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INTREPRETATION:

Cash flow from operating activities:

The net cash flow from operating activities is Rs.178.725lakhs as the net profit of and
before tax and extraordinary items is Rs. 1182.752lakhs which is adjusted for prior period
adjustments, depreciation Rs.543.809, and tax on income. The operating before the working
capital changes is Rs. 1697.497lakhs. There is cash outflow because of the increase in other
current assets and loans and advances. There is cash inflow by way of decrease in current
liabilities, and cash credit loans. There is cash outflow because of increase in provisions.
There interest paid during the year Rs.600,000lakhs and the income tax paid during the year
Rs.00lakhs.Therefore, the net cash flow from operating activities is Rs.178.725lakhs.

Cash flow from investing activities:

There is huge cash outlay by way of purchase of fixed assets of Rs.118.275lakhs.The

cash inflow by way of sale of fixed assets Rs.lakhs. So, the net cash used in investing
activities Rs.178.725lakhs.

Cash flow from financing activities:

There is cash outflow by way of payment of dividends including tax on dividends are
nil. There is cash inflow by way of proceeds from long term and other borrowings and Cash
outflow by way of payment of long-term borrowings Rs.4741.66lakhs.The net cash used in
financing activities Rs.268.24lakhs.Therefore, the cash balance cash and cash equivalents
during the year 2017-18 from operating, investing, and financing activities Rs.1397.15lakhs
NET CASH FLOWS OF LAST FIVE YEARS:

YEARS NET CASH FLOW

2013-14 279.015
2014-15 191.018
2015-16 425.286
2016-17 127.808
2017-18 854..755

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Series 1

900
800
700
600
500
Series 1
400
300
200
100
0
2013-14 2014-15 2015-16 2016-17 2017-18

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FINDINGS

• In 2013-14 the net decrease in cash is 279.015 (A+B+C)the cash opening balance is
268.850and cash closing balance is 236.467.In this year the main source of cash is
190.754 i.e. cash flow from financing activities. net cash flow from operating activities is
349.095

• In 2014-15 the net increase in cash is 191.018 (A+B+C) the cash opening balance is
144.894and cash closing balance is 110.099 .In this year the main source of cash is
5089.799i.e. cash flow from financing activities. net cash flow from operating activities is
345.021

• In 2015-16 the net increase in cash is 425.286(A+B+C) the cash opening balance is
408.308 and cash closing balance is 251.683In this year the main source of cash is
366.912 i.e. cash flow from financing activities. net cash flow from operating activities
is482.611

• In 2016-17 the net increase in cash is 127.808 (A+B+C) the cash opening balance is
268.850 and cash closing balance is130.229 .In this year the main source of cash is
190.754i.e. cash flow from financing activities. net cash flow from operating activities is
349.094

• In 2017-18 the net increase in cash is 854.155 (A+B+C) the cash opening balance is
118.275 and cash closing balance is 167.166In this year the main source of cash is
168.147i.e. cash flow from financing activities. net cash flow from operating activities is
178.725

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SUGGESTIONS

• It is suggested to the company overall financial position is satisfactory but also to

concentrate on fixed assets for the better performance
• It recommended to the company should improve cash sales and reduces credit sales.
• It is advised to the company Better to grant to take grants from government as early as
possible.
• It is recommended the company cash inflows and outflows are satisfactory. The
company should try to maintain this level.
• It is suggested to the company should reduce the operating to increase the profitability
of the firm.

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BIBLIOGRAPHY

NAME OF THE BOOK NAME OF THE PUBLISHER

AUTHOR

FINANCIAL MANAGEMENT I.M.PANDEY VIKAS

PUBLISHING

HOUSE PVT.,LTD.,

FINANCIAL MANAGEMENT KHAN & JAIN TATA MC

GRAWHILL

FINANCIAL MANAGEMENT PRASANNA TATA MC

CHANDRA GRAWHILL

OTHER SOURCES:

Annual Reports of Arqube industry(india) ltd.

Web site

www.google.com

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SUMMARY

The project has been very useful to me because I have learnt how to prepare cash
flow statement and ratio analysis. This has improved my knowledge on financial statements
which is very useful in business and commerce every day. The work I did in this project has
helped me to understand the techniques, applications and usefulness of financial statements to
understand the performance of a particular company on enterprise without much of difficulty
and also understand how to prepare them in future.

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CONCLUSION

Cash flow statement gives us a good view of the liquidity of a company. It tells us how
much cash actually went into and out of the company during a set period of time. A company
can show a net profit and be cash poor. This could be a very early warning sign that serious
problems are developing. Cash from operating activities is the most important part. Form
capital budgeting point of view, cash flows must be based on the incremental cash flows in
order to make the right decision. Further, the investment within an organization as we have
seen might be as a subject for different kinds of alternatives. Therefore, it would be so
valuable if the decision making for investment is clarified in terms incremental cash
flows.

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BALANCE SHEET AS AT 31ST MARCH, 2013

(All Amounts in `)
Figures as at Figures as at
Not
PARTICULARS e the end of the end of
No. current Previous
reporting
reporting period period

A. EQUITY & LIABILITIES

(1) Shareholders' Funds

(a) Share Capital 3 60000000 60000000
(b) Reserves and Surplus 4 79469087 73084063
13308406
139469087 3

(2) Non-Current Liabilities

(a) Deferred tax liability 5 42239 32754

(3) Current Liabilities

(a) Short-term borrowings 6 62046879 3359703
(b) Other Current Liabilities 7 461769 171062
(c) Short-term provisions 8 9162743 8106475
71671391 11637240

14475405
T O T A L: 211182717 7

B. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets 9 50196864 33226131
(b) Other non-current assets 10 26000 26000

50222864 33252131

(2) Current assets

(a) Inventories 11 74625801 76535981
(b) Trade receivables 12 64154105 0
(c) Cash and cash equivalents 13 1302290 2403280
(d) Short-term loans and advances 14 20877657 32562665

11150192
160959853 6

14475405
T O T A L: 211182717 7

1&
Corporate information and Statement of Accounting Policies 2

Table-5.0

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[Type text]

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2014

(All
Amounts in
`)
Figures for Figures for the
Note the
PARTICULARS No. current previous
reporting reporting period
period

1 INCOME FROM OPERATIONS

26340955
(a) Revenue from operations 15 3 288425570
(b) Other Income 16 328361 323281

26373791
4 288748851

2 EXPENSES

23036571
(a) Cost of materials consumed 17 8 280122298
(b) Changes in inventories of finished goods, 18 7553898 -17434256
work-in-progress and Stock-in-Trade
(c) Employee benefits expense 19 3329811 3043229
(d) Finance cost 20 4320593 5376392
(e) Depreciation and amortization expense 9 836417 929245
(f) Other expenses 21 2841996 2439460

24924843
Total expenses 3 274476368

Profit before Tax 14489482 14272483

Tax expense:
Less: (1) Current tax 2833493 2819400
(2) Deferred tax 9485 -70923
(3) Short provision for taxes of earlier years 0 7720
(4) MAT Credits Available 1751630 1800400
4594608 4556597

Net Profit for the period 9894874 9715886

Earning per equity share: Basic 1.65 1.62

Table-5.1

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[Type text]

BALANCE SHEET AS AT 31ST MARCH, 2015

(All Amounts in `)
Figures as at Figures as at
Note the end of the end of
PARTICULARS
No. current Previous
reporting period reporting period

A. EQUITY & LIABILITIES:

(1) Shareholders' Funds

(a) Share Capital 3 60000000 60000000
(b) Reserves and Surplus 4 94034320 79469087
154034320 139469087

(2) Non-Current Liabilities

(a) Deferred tax liability 5 37787 42239

(3) Current Liabilities

(a) Short-term borrowings 6 93077603 62046879
(b) Other Current Liabilities 7 156965 461769
(c) Short-term provisions 8 9019239 9162743
102253807 71671391

T O T A L: 256325914 211182717

B. ASSETS:
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets 9 31802748 50196864
(b) Other non-current assets 10 26000 26000
31828748 50222864

(2) Current assets

(a) Inventories 11 202434622 74625801
(b) Trade receivables 12 0 64154105
(c) Cash and cash equivalents 13 3666967 1302290
(d) Short-term loans and advances 14 18395577 20877657
224497166 160959853

T O T A L: 256325914 211182717

Corporate information and Statement of Accounting 1&

Policies 2

Table-5.2

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[Type text]

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2015

(All Amounts in
`)
Note Figures for the Figures for the

No. current previous

PARTICULARS
reporting reporting period
period

1 INCOME FROM OPERATIONS:

(a) Revenue from operations 15 518090293 263409553

(b) Other Income 16 651887 328361

518742180 263737914

2 E X P E N S E S:

(a) Cost of materials consumed 17 465633178 230365718

(b) Changes in inventories of finished goods 18 9880359 7553897
(c) Employee benefits expense 19 3294696 3329811
(d) Finance cost 20 8445427 4320593
(e) Depreciation and amortization expense 9 847229 836417
(f) Other expenses 21 3756277 2841996

Total expenses 491857166 249248432

Profit before Tax 26885014 14489482

Tax expense:
Less: (1) Current tax 5509389 2833493
(2) Deferred tax 0 9485
(3) MAT Credit Utilization 3341749 1751630
18033876 9894874
Add: (1) Excess provision for Income Tax of earlier
years 36755 0
(2) Deferred tax withdrawn 4452 0
Net Profit for the period 18075083 9894874

Earning per equity share: Basic & Diluted 3.01 1.65

Table-5.4

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[Type text]

BALANCE SHEET AS AT 31ST MARCH, 2016

(All Amounts in `)
As at As at
Note 31st March 31st March
PARTICULARS
No. 2016 2015

A. EQUITY & LIABILITIES:

(1) Shareholders' Funds

(a) Share Capital 3 60000000 60000000
(b) Reserves and Surplus 4 117863370 94034320
177863370 154034320

(2) Non-Current Liabilities

(a) Deferred tax liability 5 0 37787

(3) Current Liabilities

(a) Short-term borrowings 6 75946925 93077603
(b) Trade Payables 24877487 0
(c) Other Current Liabilities 7 134707 156965
(d) Short-term provisions 8 17521765 9019239
118480884 102253807

T O T A L: 296344254 256325914

B. ASSETS:
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets 9 45802513 31802748
(b) Other non-current assets 10 26000 26000
(c) Deferred tax assets (net) 11 35637 0
45864150 31828748

(2) Current assets

(a) Inventories 12 159905974 202434622
(b) Trade receivables 13 69188668 0
(c) Cash and cash equivalents 14 1150129 3666967
(d) Short-term loans and advances 15 20235333 18395577
250480104 224497166

T O T A L: 296344254 256325914

Corporate information and Statement of Accounting

Policies 1&2

Table-5.5

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[Type text]

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2016

(All Amounts
in `)
Note Figures for the Figures for the

PARTICULARS No. year year

ended ended
31.03.2016 31.03.2015

1 INCOME FROM OPERATIONS:

(a) Revenue from operations 16 767482433 518090293

(b) Other Income 17 574001 651887

768056434 518742180

2 E X P E N S E S:

(a) Cost of materials consumed 18 703296483 465633178

(b) Changes in inventories of finished goods 19 0 9880359
(c) Employee benefits expense 20 3428852 3294696
(d) Finance cost 21 16050698 8445427
(e) Depreciation and amortization expense 9 654097 847229
(f) Other expenses 22 3795440 3756277

Total expenses 727225570 491857166

Profit before Tax 40830864 26885014

Tax expense:
Less: (1) Current tax 8401647 5509389
(2) MAT Credit Utilization 5055978 3341749
27373239 18033876
Add: (1) Excess provision for Income Tax of earlier
years 0 36755
(2) Deferred tax withdrawn 73424 4452
Net Profit for the period 27446663 18075083

Earning per equity share: Basic & Diluted 4.57 3.01

Table-5.6

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BALANCE SHEET AS AT 31ST MARCH, 2017

(All Amounts in `)

As at
Note As at
PARTICULARS 31st March, 2017
31st March,
No. 2016

A. EQUITY & LIABILITIES:

(1) Shareholders' Funds

(a) Share Capital 3 60000000 60000000
(b) Reserves and Surplus 4 122268310 117863370
182268310 177863370

(2) Current Liabilities

(a) Short-term borrowings 5 71571133 75946925
(b) Trade Payables 0 24877487
(c) Other Current Liabilities 6 117445 134707
(d) Short-term provisions 7 2373101 17521765
74061679 118480884

T O T A L: 256329989 296344254

B. ASSETS:
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets 8 45258704 45802513
(b) Other non-current assets 9 26000 26000
(c) Deferred tax assets (net) 10 50230 35637
45334934 45864150

(2) Current assets

(a) Inventories 11 151364417 159905974
(b) Trade receivables 12 50057541 69188668
(c) Cash and cash equivalents 13 2821796 1150129
(d) Short-term loans and advances 14 6751301 20235333
210995055 250480104

T O T A L: 256329989 296344254

Corporate information and Statement of Accounting 1&

Policies 2

Table-5.7

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[Type text]

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2017

(All Amounts
in `)

Note Year ended Year ended

PARTICULARS 31.03.2017 31.03.2016
No.

1 INCOME FROM OPERATIONS:

(a) Revenue from operations 15 221003188 767482433

(b) Other Income 16 613832 574001

221617020 768056434

2 E X P E N S E S:

(a) Cost of materials consumed 17 198448936 703296483

(b) Changes in inventories of finished goods 18 0 0
(c) Employee benefits expense 19 3390311 3428852
(d) Finance cost 20 5217480 15008159
(e) Depreciation and amortization expense 8 543809 654097
(f) Other expenses 21 2188963 4837979

Total expenses 209789499 727225570

Profit before Tax 11827521 40830864

Tax expense:
Less: (1) Current tax 2373101 8401647
(2) MAT Credit Utilization 1440165 5055978
(3) Short provision for Income Tax of earlier
years 13179 0
8001076 27373239
Add: (1) Deferred tax withdrawn 14593 73424

Net Profit for the period 8015669 27446663

Earning per equity share: Basic & Diluted 1.34 4.57

Table-5.8

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[Type text]

BALANCE SHEET AS AT 31ST MARCH, 2018

(All Amounts in `)

As at As at
Note
PARTICULARS 31st March, 31st March,
No.
2018 2017

A. EQUITY & LIABILITIES:

(1) Shareholders' Funds

(a) Share Capital 3 60000000 60000000
(b) Reserves and Surplus 4 126276495 122268310
186276495 182268310

(2) Current Liabilities

(a) Short-term borrowings 5 101629669 71571133
(b) Other Current Liabilities 6 128288 117445
(c) Short-term provisions 7 986119 2373101
102744076 74061679

T O T A L: 289020571 256329989

B. ASSETS:
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets 8 44855448 45258704
(b) Other non-current assets 9 16000 16000
(c) Non-Current Investments 10 10000 10000
(d) Deferred tax assets (net) 11 53324 50230
44934772 45334934

(2) Current assets

(a) Inventories 12 222606225 151364417
(b) Trade receivables 13 12582675 50057541
(c) Cash and cash equivalents 14 3821046 2821796
(d) Short-term loans and advances 15 5075853 6751301
244085799 210995055

T O T A L: 289020571 256329989

Corporate information and Statement of Accounting

Policies 1&2

Table-5.9

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[Type text]

STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31ST MARCH, 2018

(All Amounts
in `)
Year
Note Year ended
PARTICULARS ended
No. 31.03.2017
31.03.2018

1 INCOME FROM OPERATIONS:

(a) Revenue from operations 16 114999643 221003188

(b) Other Income 17 583621 613832

115583264 221617020

2 E X P E N S E S:

(a) Cost of materials consumed 18 96543404 198448936

(b) Changes in inventories of finished goods 19 0 0
(c) Employee benefits expense 20 3352278 3390311
(d) Finance cost 21 6510146 5217480
(e) Depreciation and amortization expense 8 460790 543809
(f) Other expenses 22 3149988 2188963

Total expenses 110016606 209789499

Profit before Tax 5566658 11827521

Tax expense:
Less: (1) Current tax 986119 2373101
(2) MAT Credit Utilization 575448 1440165
(3) Short provision for Income Tax of earlier
years 0 13179
4005091 8001076
Add: (1) Deferred tax asset 3094 14593

Net Profit for the period 4008185 8015669

Earning per equity share: Basic & Diluted 0.67 1.34

Table-5.10

79