Académique Documents
Professionnel Documents
Culture Documents
OF
FOODS AND INNS LTD, CHITTOOR”
Project Report
Submitted in partial fulfillment of the requirement
For the award of the Degree
Of
MASTER OF BUSINESS ADMINISTRATION
(JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY)
By
N.MANJUNATH
Reg. No.: 07751E0054
Under the guidance of
Mrs.T. HIMABINDU, M.F.M.,
Assistant Professor, Dept of M.B.A.
SREENIVASA INSTITUTE OF TEHNOLOGY
AND MANAGEMENT STUDIES
(Affiliated To Jawaharlal Nehru Technological University, Hyderabad)
#74, Thimma Samudram, Bangalore –Tirupati Bye-Pass Road
Chittoor – 517 128
2007-2009
Sreenivasa Institute of Technology
and
Management Studies
(Affiliated to Jawaharlal Nehru Technological University, Hyd)
Murukambattu,
CHITTOOR – 517 127
CERTIFICATE
This is to certify that the project report entitled “A STUDY ON FUNDS
FLOW ANALYSIS OF FOODS & INNS LTD, CHITTOOR.ana” submitted by Mr.N.
MANJUNTH(07751E0054) in partial fulfillment of the requirement for the award of the degree
of “Master of Business Administration” under JNTU, Hyderabad, is a record of independent
work under taken by him/her during the academic year 2008-2009. This project report has not
been submitted earlier either in part or whole for the award of any other degree/diploma of any
university.
PROJECT GUIDE DIRECTOR
Mrs. T. HIMABINDU, M.F.M. Dr .S.E.V.SUBRAMANYAM, M.B.A, PhD.,
Department of MBA Department of MBA
DECLARATION
I, N. Manjunath declare that the study conducted on “A STUDY OF FUNDS FLOW
ANALYSIS OF FOODS & INNS LTD, CHITTOOR” is submitted by me to the department of
business management, Sreenivasa Institute of Technology And Management Studies (JNTU),
is of my own and is not submitted to any university or published at any time before.
PLACE:
DATE:
N.MANJUNATH
Reg. No.: 07751E0054
ACKNOWLEDGEMENT
I am very much grateful to FOODS & INNS LTD for allowing me to carry out my
project work. I am thankful to D.S.N.MURTHY (Financial Manager) for giving me the
permission to do my project work in Foods & inns Ltd.
I would like to thank our principal Dr. T. SAIRAMA M.E., PhD, for his valuable guidance
and enthusiasm shown to me.
I owe a special thanks to our Head of the Department, Prof.S.E.V.
SUBRAHMANYAM, M.B.A., PhD
I would like to express my deep gratitude to my guide Mrs. T. HIMA
BINDU, M.F.M, for her guidance and motivation.
(N.MANJUNATH)
Reg. No.: 07751E0054
STATEMENT OF THE PROBLEM
Funds flow statement summarizes for a particular period the resources made available to
finance the activities of an enterprise and the uses to which such resources have been put.
Funds flow statement is based on accrual concept of profit. The Company prepares a
statement of funds flow to cater Purchase of fixed assets and investments, redemption of
debentures and preference shares and repayment of loans, payment of dividend, payment of tax,
and increase in working capital.
It is the responsibility of the organization to maintain a standard level of funds flow neither
excess or deficit.
PROCUREMENT OF FUNDS
Funds flow statement is a method by which we study changes in the financial position in the
business enterprise between beginning and ending financial statement dates. It is a statement
showing sources and uses of funds for a period of time.
“A statement of sources and applications of funds is a technical device designed to analyze
the changes in the financial condition of a business enterprise between two dates”.
Funds flow statement is called by various names such as sources and application of funds;
statement of changes in financial position, sources and uses of funds, summary of financial
operations, where came in and where gone out statement, where got, where gone statement;
movement of working capital statement movement of funds statement, funds received and
disbursed statement; funds generated and expended statement, funds statement etc.
3. It is not an original statement but simply, arrangement of data given in the financial
statements.
4. It is essential historic in nature and projected funds flow statement cannot be prepared
5. Changes in cash are more important and relevant for financial management than the
working capital.
Generally, the profit and loss account is prepared to compute net profit. Net profit can also be
computed by comparing the balance sheet at beginning and the end of the period. This fact
emphasizes the role of the profit and loss account as a link between consecutive statements of
financial position. Net profit (or net loss) for a period is equal to the change in owner’s equity
during that period. Thus, as a starting point, the difference in beginning and ending owner’s
equity is the net profit (or net loss).
Balance sheet is considered as a very significant statement by bankers and other lenders
because it indicates the firm’s financial solvency and liquidity, as measured by its resources and
obligations. However, creditors, particularly bankers and financial analysis in India have recently
started paying more attention to the firm’s earning capacity as a measure of its financial strength.
The earning capacity and potential of a firm are reflected by its profit and loss account. The
profit and loss account is a “score board” of the firms performance during a period of time. The
generally accepted convention is to show one year events in the profit and loss account. Since the
profit and loss account reflects the results of operations for a period of time. It is a flow
statement.
BALANCE SHEET
Balance sheet is the most significant financial statement. It indicates the financial condition
or the state of affairs of a business at a particular moment of time. More especially balance sheet
contains information about resources and obligations of a business entity and about its owner’s
interests in the business at a particular point of time. Thus, the balance sheet reveals the firms
financial position on specific date. In the language of accounting balance sheet communicates
information about assets, liabilities and owners equity for a business firm as on a specific date. It
provides a snapshot of the financial position of the firm at the firms accounting period. The
balance sheet is a stock or status statement as it shows assets, liabilities and owners equity at a
point of time.
a. Raw materials
b. Work in process
c. Stores and spares
d. Finished goods
Provision for taxation if it does not amount to Prepaid expenses
appropriation of profits.
Sundry creditors
Outstanding expenses
Bank overdraft
Short-term advance
Dividend payable
Proposed dividends*
Provision for taxation*
Working Capital
Total (CA-CL)
current
Net increase or decrease in
working capital
Sources: Rs
Total_______
Applications:
c) Redemption of debentures
e) Non-trading payments
Total_______
INDUSTRIAL PROFILE
BACKGROUND OF MANGO INDUSTRY
The lack of mango market development globally opens a large untapped opportunity for
India to make an organized entry in the fresh mango and mango pulp market. India is well
positioned to capitalize on this opportunity with a very large national production of mangos,
including leading varieties like Alphonso. India has the potential to create a long–term global
market position and to capitalize on the fast growth of mango as a preferred ingredient for the
natural package food industry.
Additionally, mango is a preferred fresh fruit within the Indian domestic market, as well as
globally. Mango is in strong demand within the worldwide retail sector. The total market value
of Indian mango and mango pulp represents 25% of the value of agricultural and processed food
products exported by India. Moreover, the consumption growth for mangos in the United States
and Europe has average 10–15% per year during the last 5 years. Collectively, these factors
indicate a strong opportunity to position Indian mango and mango products to meet a growing
international demand.
This accounts for 41% of the estimated worldwide mango production of 25.56 million metric
tons in 2003. Despite this large mango production, India is a minor exporter of mango and
mango products at this time. During the five–year period from 1998–2002, exports of fresh
mangos from India averaged approximately 42.4 thousand metric tons, or only about 0.4% of
mango production during this time frame. Data on exports of Indian mango pulp and juice
products are more limited. Data from 1995 indicated that India exported 37.7 thousand metric
tons of mango pulp.
Data from 2001 indicated that India exported 3.2 thousand metric tons of mango juice, but also
imported 2.2 thousand metric tons of mango juice. Collectively, these observations indicate that,
despite being by far the world’s largest mango producer, India exports less than 1% of its mango
crop as fresh mangos or processed mango products. These observations with mango are
consistent with aggregate data available on Indian fruit and vegetable exports.
A recent report from the Indian Ministry of Food Processing Industries further details the
overly complex supply chain and its contribution to costs and post–harvest losses. This report
concludes that it is imperative to streamline the mango supply chain in order to reduce wastage
and raw material costs. (Sources: India Ministry of Food Processing Industries and Rambo bank
Report).
Through partnerships with mango growers, processors, export organizations, and Indian
government organizations, among others, PFID—F&V is working to strengthen the small and
medium mango grower base by providing capacity building at all levels.
Education and training in Good Agricultural Practices and other sanitary standards, as well
as employment of certification systems, will lead to better yields, pesticide use in accordance
with regulations, and a more efficient supply chain. PFID—F&V partnerships will also help
identify and facilitate resources necessary for enhancing the mango supplychain such as cold
storage facilities, improved packing and grading facilities, testing facilities, and logistics
management. Furthermore,
A further approach will target reduction of waste in the fresh mango chain by developing
high–value mango products and enhancing processing capacity for the domestic market.
Ultimately, these steps will help stabilize prices, increase farmer incomes, and development the
farmer base at commercial and social levels.
PFID-F&V India has continued to forge and strengthen public and private partnerships to the
point that, now, just over one year from project start-up, notable results are beginning to show in
the form on increasing contributions from partnership members.
Dr. Thiagarajan, MSU/PFID-F&V, together with our two India-based coordinators, recently
met with the Agricultural Product Export Development Authority (APEDA) as well as the
Federation of Indian Chambers of Commerce (FICCI) and the National Institute of Marketing
Boards (NIAM) to follow up on each of their commitments to promote the Indian Mango
Industry.
Currently, only 1% of the total mango production in India is exported. One reason contributing
to this poor export performance is that overseas buyers have stricter standards than are currently
accepted within the Indian domestic market. PFID—F&V will facilitate the development and
implementation of quality and safety standards which will meet the demands of the export
market.
FOOD PROCESSING
Food processing involves any type of value addition to agricultural or horticultural produce
and also includes processes such as grading, sorting, and packaging which enhance shelf life of
food products. The food processing industry provides vital linkages and synergies between
industry and agriculture. The Food Processing Industry sector in India is one of the largest in
terms of production, consumption, export and growth prospects. The government has accorded it
a high priority, with a number of fiscal relief’s and incentives, to encourage commercialization
and value addition to agricultural produce, for minimizing pre/post harvest wastage, generating
employment and export growth. India's food processing sector covers a wide range of products
fruit and vegetables; meat and poultry; milk and milk products, alcoholic beverages, fisheries,
plantation, grain processing and other consumer product groups like confectionery, chocolates
and cocoa products, Soya-based products, mineral water, high protein foods etc.
COMPANY PROFILE
HISTORY OF FOOD AND INNS Ltd.
The division combines people with vast experience in agric-trading with the FOODS AND
INNS Ltd Group’s credibility to justify its premier standing in the trading arena. The division
was set up in 1967 and since then has handled a wide range of products - such as Sesame Seeds,
Processed Fruits etc.
FOODS AND INNS Ltd began its fruit processing operations in early 70s.However fruit
processing operations have been given a special thrust since the last season with an emphasis on
developing strategic partnerships across the value chain especially fruit procurement and
processing. FOODS AND INNS Ltd has established it's presence as a reliable and competitive
exporter to Coca Cola, USA, Western Europe, Far East, Middle East etc.
Situated at Chittoor in Andhra Pradesh, the mango belt in India, FOOD AND INNS Ltd
(FIL) is a 100% Export Oriented Unit (EOU) processing Tropical Fruit Purees, Concentrates and
Fresh Fruits FOOD AND INNS Ltd was started keeping in mind the local farming community
wealth. The farming community is an integral part and forms the backbone of the organization.
In its effort to be a forerunner in the chosen areas of business in terms of best practices in quality
and technology, FIL plans to benefit armors, the industry and the nation in a phased manner.
FOODS AND INNS Ltd believes in empowering farmers by providing technical
assistance from research institutes in the food industry to support the farmers in achieving better
quality and higher yields by developing the gardening and harvesting techniques. Further to
educating farmers with latest horticultural techniques, FOODS AND INNS LTD is encouraging
farmers to mobilize the fruits directly to the factory, thereby minimizing the fruit handling
damages and high value realizations.
DIVISION PRODUCT RANGE
Aseptic Purees and concentrates of Mango, Guava & Papaya
Canning Institutional packs of mango products, Guava & Papaya Paste.
Consumer packs of Indian vegetables & catering packs for mango Chutneys.
Frozen Frozen fruit purees & IQF chunks, frozen IQF vegetables & frozen Indian
snacks like Samosa and Ptras.
Spray Drying Fruit powder like Mango, Banana, Orange, Tomato and beat root.
BOARD OF DIRECTORS
S.No Name of the Director
4 Mr.C.M.Maniar Solicitor
5 Mr. D.D. Trivedi Ex. IIM Professor
6 Mr. M. B. Dalal Director
Mr. Utsav Dhupelia , a Chartered Accountant from U.K., looking after the routine affairs of
the company, is the brain and brawl for taking the company’s turnover from Rs.5 crores (USD1.1
MIO) to Rs.160 Crores (USD 16 MIO) giving the status of
government recognized EXPORT HOUSE..
With the back up of technical and managerial support staff, the state of art technology
implementation, innovative R & D and Lab facilities, the doyen guidance of Mr.Utsav coupled
with the contribution of other directors, the company is poised for a steady and continuous
growth graph moving upwards in all Para meters.
PRODUCTS
PRODUCTS OF FRUITS
PRODUCTS OF VEGETABLES
FRUIT SEASONS
Market Presence
o European Union
o United States of America
o Canada
o Australia
o Middle East including Iran & North Africa
o Japan & South Korea
FACILITY
FOODS AND INNS Ltd processing facility is located in Chittoor, spread over an area of 15
acres. This place has been earmarked to host Integrated Food Complex of International
standards. The facility currently has a tropical fruit Puree / Concentrate processing plant and the
pack house for preparing the Fresh Fruits & Vegetables.
FOODS AND INNS Ltd plant is equipped with state-of-the-art fruit puree processing aseptic
filling line of SIG- Mizzen, Italy to produce natural fruit pulps & concentrates. The plant has one
of the India's single largest fruit processing lines -10 TPH ripen fruit processing with Aseptic
Packaging.
FOOD AND INNS Ltd is backed with strong support and service from its team of highly
qualified technical personnel and domain experts with perceptive knowledge and skill. Powered
by priceless hands-on experience these professionals are upgrading themselves continuously to
identify and introduce improved and innovative product offerings that would delight customers
worldwide and comply with the leading global quality standards.
The fruit processing aseptic line is from SIG-Mazzini of Italy. The line has a capacity to
process 10 metric tones per hour ripened fruits. The processing line is fully integrated and
controlled by PLC.
PACK HOUSE
FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable processing facility
from Grief, Spain. Fresh fruits including mangoes, bananas are processed along with tropical
vegetables like Okra, Egg plant, Lemon, Bitter gourd etc. The facility also holds ripening
chambers, pre cooling chambers and cold storage to handle fresh fruits and vegetables.
To enable Fresh Mango exports to countries like Japan and Korea, FOOD AND INNS Ltd
has commissioned the VHT facility. This ensures irradiation of the fruit flies in the fresh fruit.
FOOD AND INNS Ltd is the first private organization to set up this facility in the country.
WATER MANAGEMENT
Water is an essential & precious natural resource. It is a nature’s gift. Without water there is
no life on the earth. It is as important to the fruit processing industry as to the living being. But,
water is becoming scarce year by year due to increase n its consumption in industries &
agriculture sectors & indiscriminate use /wastage by human beings, therefore, it needs a
integrated& scientific approach for its management to use it so that undesirable wastage is
avoided which helps us to save water for right utilization .
Our main source of water is bore wells. The water is potable. Water from all bore wells is
collected in a sump. From there it is pumped to over head tank to supply to various locations of
use. To manage appropriately & conserve the water, we are taking following steps at various
locations of its use:
o FRUIT WASHING
The water is re-circulated after filtration up to it becomes dirty. This water is chl0rinated to
control the contamination by continuous dosing of chlorine in the washing tub.
o STEAM GENERATION
Water for boiler feeding is treated in water softener to reduce the hardness. The steam
condensate of evaporator is recycled to boiler to save water & energy as condensate will have
high temperature.
CUSTOMER FOCUS
Loyalty and a strong relationship in business are built out of years of experience in a
particular industry. FOODS AND INNS Ltd expertise in the business and its contacts with
Agents\Brokers, Blender-bottlers, End User, Off-shore logistical service providers has made the
supply chain process extremely competitive. Given our renewed emphasis on this product line
we are strengthening relationships in key markets across the buyer spectrum, understanding
unique requirements and delivering value to select global customers.
FUTURE PLANS
Backward integration for improved quality of raw materials using contract farming/ organic
cultivation.
METHODOLGY
Primary data
Secondary data
PRIMARY DATA:
Personal interview and discussion was conducted for the collection of data.
SECONDRY DATA:
Secondary Data are already present one and it is second hand information. We collect
through books magazines, newspaper, journals & websites etc.,
In this study, the secondary data was collected from the company like
OBJECTIVES
1. To analyze the changes in assets and liabilities from the end of one period of the time to
the end of another period of time
2. To know various needs for which funds were obtained during a particular period based in
which these funds where employed.
4. To find out the sources from which additional funds were derived and the use to which
their sources were put.
5. To analyze the changes of financial position of Foods and Inns Limited enterprises
between two dates.
The present study focuses as sources of funds and application of funds for a period of time.
The study is confirmed to find out the changes in the financial position of the Foods and Inns
Limited between the beginning and ending financial date.
It is a technical device designed to analyze the changes in the financial condition of the
business enterprises between two dates.
This funds flow statement is a statement which indicates various means by which the funds
have been obtained during a certain period and the ways to which these funds have been used
during the period.
The term funds used here means working capital that is the excess of current assets over
current liabilities. It is an essential tool for the financial analysts and is of primary importance to
the financial management.
Now a days it is being widely used by the financial analyst credit granting institutions and
financial managers. The basic purpose of the funds flow statement is to reveal the changes in the
working capital on the two balance sheet dates. It helps in the analysis of financial operations. It
helps in the formation of realistic dividend policy. It helps in the proper allocation of resources.
It helps in appraising the use of working capital and finally it acts as future guide.
LIMITATIONS
1. It should remember that a funds flow statement is not a substitute of an income statement
or a balance sheet.
4. The study based on the available annual reports and internal information only
Sources Amount Applications Amount
Reserves & Surplus 2,56,90,675 Purchase of Fixed Asset 5,81,19,086
Deferred Tax Liability 27,07,963
Secured &Unsecured Loans 10,12,39,341 Increase in Working Capital 7,73,22,507
Miscellaneous 4,25,968
13,54,41,593 13,54,41,593
Interpretation:
Comparing the year 2004 and 2005 the statement of changes in working capital
shows the increasing balance. In the particular year the current assets are increased then the
current liabilities.
As a result the funds flow statements, the main sources of funds are secured and
unsecured loans, differed tax asset and liabilities. The firm utilizing this fund for the purchasing
of fixed assets. The financial position of FOODS AND INNS LTD in this particular year is good
TABLE 4.3
Particulars 2005 2006 Effect on Working
Capital
Increase Decrease
Current Assets(C.A):
Inventories 12,81,66,354 12,97,31,772 15,65,418
TABLE NO : 4.4
Sources Amount Applications Amount
Reserves & Surplus 1,72,91,856
Deferred Tax Liability 1,01,57,385 Purchase of Fixed Asset 94,43,100
Secured &Unsecured Loans 1,11,00,748 Capital W-I-P 11,06,355
Miscellaneous 2,70,000 Increase in Working Capital 2,82,70,534
Decrease in Working Capital ----
3,88,19,989 3,88,19,989
Interpretation:
Comparing the year 2005 and 2006 the statement of changes in working capital shows the
increasing balance. In the particular year the current assets are increased then the current
liabilities.
As a result the funds flow statements, the main soureces of funds are secured and unsecured
loans, differed tax liabilities. The firm utilizing this fund for the purchasing of fixed assets and
capital WIP and the financial position of FOODS AND INNS LTD in this particular year is
good.
Sources Amount Applications Amount
Reserves & Surplus 2,71,37,838
Deferred Tax Liability 57,47,268 Purchase of Fixed Asset 5,11,30,616
Secured &Unsecured Loans 5,41,02,778 Capital W-I-P 74,52,783
Miscellaneous ---- Increase in Working Capital 2,84,04,485
Decrease in Working Capital ----
8,69,87,884 8,69,87,884
Interpretation:
Comparing the year 2006 and 2007 the statement of changes in
working capital shows the increasing balance. In the particular year the current assets are
increased then the current liabilities.
As a result the funds flow statements, the main sources of funds are secured
and unsecured loans, differed tax liabilities. The firm utilizing this fund for the purchasing of
fixed assets and capital WIP and the financial position of FOODS AND INNS LTD in this
particular year is good
Sources Amount Applications Amount
Reserves & Surplus 2,74,91,433 Purchase of Fixed Asset 3,32,46,513
Deferred Tax Liability 34,11,085
Secured &Unsecured Loans Increase in Working Capital --------
8,01,93,229
Decrease in Working Capital
1,48,00,196
31,14,86,734 31,14,86,734
Interpretation:
Comparing the year 2007 and 2008 the statement of changes in working
capital shows the decreasing balance. In the particular year the current assets are decreased then
the current liabilities.
As a result the funds flow statements, the main sources of funds are secured
and unsecured loans, differed tax liabilities. The firm utilizing this fund for the purchasing of
fixed assets. The financial position of FOODS AND INNS LTD in this particular year is good
FINDINGS
1. The working capital is increased year by year except last year. Apart to this the surplus
funds also increased.
4. The company was highly purchased the fixed assets in the year 2005&2007.Then in
2006&2008 the company used low funds for purchasing of fixed assets.
5. The company receives the secured and unsecured loans indicate fluctuating position.
6. The working capital is increased in 2005 to 2007 with a low variation in the year the
working capital will be decreased.
7. The working -in- progress rapidly increased by large variation with the amount.
SUGGESTIONS
The company may increase their share capital it helps to get more strength in financial
position.
In 2008, the statement shows decreasing working capital in the company. It is to require
raising short terms funds to solve the financial problems.
Tax liabilities should also be maintained in a standard manner.
Regularly use funds in purchase of fixed asset it make profitability.
CONCLUSION
It can be concluded that in FOODS & INNS PRIVATE LTD The working capital in
increased year by year except last year. And its main sources of funds are deferred tax liability,
secured& unsecured loans. The main applications of funds are purchase of fixed assets & capital
W.I.P.The over all performance of FOODS &INNS PVT LTD is very good.
(Rupees)
Particulars 31-3-2004 31-3-2005 31-3-2006 31-3-2007 31-3-2008
Net sales 61,98,28,811 79,52,51,258 97,41,37,384 1,21,85,00,922 1,46,20,02,142
(-)Cost of goods sold 31,47,24,651 44,44,35,161 51,01,55,033 68,84,37,718 93,40,28,168
(Rupees)
ASSETS:
1.Currentassets loans&advances
BIBLIOGRAPHY
The following books and websites have been referred by me during my project work.
1. Financial Management
I.M.PANDY
2. Financial Management
3. Management Accounting
M.Y.KHAN
WEB SITES
WWW.GOOGLE.COM
WWW.FOODSANDINNS.COM