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CHAPTER-1 INTRODUCTION TO WORKING CAPITAL Working capital is often referred to as lifeblood of an organization of its the mo ney required for

carrying on day today activities of an organization . The management of current assets is similar to that of fixed assets in the sense that in both cases a firm analysis on its return and risk. MEANING AND DEFINITION Working capital management or administration of all aspects of working capital, which manage the firms current assets and current liabilities in such a way that a satisfactory level of working capital is maintained According to Smith working capital management is concerned with the problem that arise in attempting to manage the current assets , current liabilities, and the inter-relationship that exists between them. TYPES OF WORKING CAPITAL: There are two types of working capital. They are: l) ON THE BASIS OF CONCEPT: 1)Gross working capital. 2)Net working capital. 1. Gross working capital: Refers to firms investment in current assets are the asset s, which can be concerned into and with in an accounting year (or operating cycl e) and include cash, short-term securities, debtors (accounts receivables or boo k debts) bills receivable and stock (inventory) Gross working capitals points to the arranging of funds to finan ce current assets . 2) Networking capital: Refers to the difference between current assets and curren t liabilities . Current liabilities are those claims of outsiders, which are exp ected to nature for payment within accounting years and include creditors (accou nt payable). Bills payable and outstanding expenses . Networking capital can be positive or negative. A positive networking capital will arise when current ass ets, exceed current liabilities ans a negative working capital will arise when c urrent liabilities are in exexcess of current assets . ll) ON THE BASIS OF TIME :1)Permanent/fixed/fluctuating working capital 2)Temporary working capital 1) Permanent working capital :The need for current assets arises because of the operating cycle. The operating cycle is continuous process and therefore, the need for the current assets is f elt constantly. But the magnitude of current assets needed is not always a minim um level of current assets , which is continuously required by the firm to carry on its business operations. This minimum level of current assets is referred to as permanent or fixed working capital. Example:- Every firm has to maintain a minimum level of raw materials, work-inprogress, finished goods and cash balance. This minimum level of current assets is called permanent or fixed working capital as this part of capital is permanen tly blocked in current assets. As the business grows, the requirements of perman ent working capital also increase due to the increase in current assets. 2. Temporary working capital :Depending up on the changes in production and sales the need for working capital over and above permanent working capital, will have in mainlined to support th

e peak proceeds of sale and investment in receive may also increase during such periods. On the other hand, investment in raw material, working in progress and finished goods will fall if the market is slack. The extra working capital needed to support the changing production and sales ac tivities is called fluctuating , or variable or temporary working capital . THE NEED OR OBJECTIVES OF WORKING CAPITAL The need for working capital to run day-to-day business activities cannot be ove r emphasized , we will hardly find business firm , which doesnt require any amoun t if working capital indeed, and firm differ in their requirements of the workin g capital. We know that a firm should aim at maximizing the wealth of its share holders. In its endeavor to do so . A firm should earn sufficient return form it s operations . Earning a study amount of profit required successfully sale activ ity . The firm has to invest enough founds in current assets for cash instantane ously . There is always an operation cycle involved in the conversion of sales in to cash. VARIOUS NEEDS OF WORKING CAPITAL IS AS FOLLOWS : To pay wages and salary. It helps to the purchase of raw materials, components and spares. It helps to incur day-to-day- expenses and overhead and costs such as fuel, powe r, and office expenses etc. It also to meet the selling cost as packing, advertising etc . It provides credit facilities to the customer. It help to maintain the inventories of raw material, working progress, stores an d spares and finished stock.

DETERMINATES OF WORKING CAPITAL OR FACTORS AFECTING. The working capital requirement of a firm affected by a number of factors. The various factors, which affect the working capital requ irement of a concern, are as follows: Internal factors External factors Product cycle 1. Business fluctuation 2. Business cycle 2.T0echnological development 3. Credit policy 3. Transport and communication 4. Scale of production 4. import policy 5. Growth and expansion of business 5. Taxation policy 6. Operating efficiency 1. INTERNAL FACTORS 1.NATURE OF BUSINESS :-

The working capital requirements of enterprises are basically related to the conduct of business . Public utilities have certain features whi ch have a bearing on their working capital needs . They do not maintain big inve ntories and have, therefore, probably the least requirement of working capital . On the other hand trading and manufacturing concern required large amount of wo rking capital to maintain a sufficient amount of cash inventories and book debts . 2.PRODUCTION CYCLE :The term production or manufacturing cycle refers to the span b etween the procurement of raw materials and completion of the manufacturing proc ess leading to the production of finished goods . In other words, there is a som e time gap before raw materials become finished goods . Therefore the longer the time span, the larger will be the working capital needed and vice versa . 3. BUSINESS CYCLE :The business fluctuations influence the size of working capital m ainly during updated phase when boom conditions prevail, the need for working ca pital is likely to cover the lag between increases sales and receipt of cash as well as invest in plant and machinery to meet the increased demand . The down sw ing an opposite effect on the level of working capital requirement . 4.CREDIT POLICY :The credit policy relating to sales and purchases also affects the working capi tal .The credit police in influences the requirements of working capital in two ways: Though credit terms granted by the to its customers/buyers of goods credit terms available to the firm form its creditors . A firm , which more credit sales and cash purchase required high working capital than a firm having more credit purc hase and cash sales . 5. SCALE OF PRODUCTION :A concern carrying on activities on a small scale of needs less wo rking capital . On the other hand a concern undertaking activities on large scal e Needs large amount of working capital . 6.GROWTH AND EXPANSION OF BUSINESS :The growth and expansion of business also affect the working capital requirement . When there is growth and expansion in the business of a firm the working capital needs of the firm will also increase . 7.OPERATING EFFICIENCY :The operating efficiency of the management is also important determina te of the level of working capital . A firm enjoying operating efficiency can el iminate wastage and use its resource efficiently and thereby reduce its working capital needs considerably .

EXTERNAL FACTORS 1.BUSINESS FLUCTUATIONS :Business enterprises usually experiences fluctuation in demand f or their products and services because of changes in economic condition . In vie w of this , working capital requirements of these enterprises are affected . Thu s, in the event of economic prosperity , general demand of the goods and service s tends to shoot up . To cope with increased demand and consequently increased p roduction ,the firm will require additional working capital .

2.TECHNOLOGICAL DEVELOPMENTS :Technological developments in the area of production can have sha rp effects on the need for working capital . If a firm switches over to new manu facturing process and installs new equipments with which it is able to cut perio d involved in converting raw materials in to finished goods , permanent working capital requirements of the firm will decrease . 3.TRANSPORT AND COMMUNICATION DEVELOPMENTS :Where the means of transport and communication in a country are no t well developed , industries may need additional funds to maintain big inventor y of raw materials and other accessories which would otherwise not be needed whe re the transport and communications systems are highly developed . 4.IMPORT POLICY :Import policy of the government may also bearing on the levels of wor king capital of the enterprises since they have to arrange funds for importing g oods at specified times . 5.TAXATION POLICY :Working capital needs of business enterprises are affected sharply by taxation policy of the government . In the event of regressive taxation policy o f the government, as it exists today in India, imposing heavy tax burdens on bus iness enterprises leaves very little profits for distribution and relation purpo ses . Chapter -2 INDUSTRY PROFILE Sugarcane is one of important crops for the Indian farmer sugar and jiggery ar e the main products that we get from sugarcane .Other products such as biogases for industrial use, molasses for distillery, filter cane . Mud as organic manure and green leaves whit tops for cattle feed are also available as by product. Be cause of its multi uses sugarcane has played crucial role in Indian economy with Rs.20000crores turnover and width 450 sugar mills providing assistance to 45 mi llion sugarcane farmers and 2 million sugarcane farmers and 2 million workmen di rectly and indirectly. In A.P sugar industry is important agro-based industry ,occupation the second position next to textile industry. The annual cultivated area is about 1.99 lack s hectares with a yield of 149.45 lacks of tone during 96-97. At present, there are 36sugar factories in the state have been suffering due to lack of adequat e cane irrigation facilities , working capital ,by- products utilization ,excess ive employment etc. The sugar industries which provide direct employment to about 3 lacks persons o f sugarcane following by Brazil and Cuba . sugarcane existed in India from 3000B .C . The center place of origin of sugarcane regarded as northeastern India , fr om sugarcane seems to have been to China and other places by early travelers and no mans between 1800 and 1700B.C. later , it was penetrated to Philippines, Jew and other place . Actually the work sugar derived from a Sanskrit word SHAKRA. India as the worlds largest producer of sugarcane occupies a very pride in the wo rld. In India, the cultivation of sugarcane is 10000 miles tones. The average yi eld being 56 tones per acre of total cultivating land is occupied by Sugarcane c ultivation. Sugarcane is grown in almost all part to India, except in colder reg ions and extreme North Jammu and Kashmir, Himachal Pradesh. Area-wise distribution for sugar industry in AP S.no Sector No.of factors

Areas

1 2 5 3

Co-operative Public sector Total 25

18 7 13

12 1 5

4 1 7

List of co-operative sugar factories in AP 1.The Chodavaram co-operative sugars Ltd., _ CHODAV ARAM. 2.The Anakapalli co-operative sugars Ltd., _ ANKAPALLI. 3.The Etikoppaka co-operative Agricultural of industrial society Ltd., _ ETIKOPPAKA. 4.Sri Vijayarama Gajapathi co-operative sugars Ltd., SPOK. _VENKONDA. 5.The Amadavalasa co-operative agricultural industrial society Ltd., _SRIKAKU LAM. 6.The West Godavari co-operative sugars Ltd., _ELURE. 7.Palakol co-operative agricultural and industrial society Ltd., _ PALAKOLLU. 8.The Thandra co-operative sugars Ltd., _ VISAKHAPATANAM. 9.Nizamabad co-operative sugars Ltd., _NIZAMABAD. 10.The Chittoor co-operate sugars Ltd., _CHITTOOR. 11.SriVenkateswara co-operative sugars Ltd., _RENIGUNTA. 12.The Cuddapha co-operative sugars Ltd., _CHANNUR. 13.The Nandyal co-operative sugars Ltd., _PONNAPURAM. 14.The Kovur co-operative sugars Ltd., _ NELLORE. 15.Nagarjuna co-operative sugarsLtd., _ GURZALA. 16.Nannapaneni Venkatrao co-operative sugars Ltd., _ HANUMAN JUNCTION 18 .The cuddapah co- operative sugars Ltd., _ PONNAPURAM

2.2

COMPANEY PROFILE

SRI VENKATESWARA CO-OPERATIVE SUGAR FACTORY LTD, was registerd in 6-4-1972 under the Chittoor District in Andhra Pradesh. Its organization in Sri Kalahasti Sa thyavedu Thaluka ,Pnapakam Revenue divisions. 1.Munagalipattu 2.Ithepalli 3.K otala 4.Pullaiahgaripalli 5.Sheshapuram 6.Chinnaramapuram 7.Kondreddicondiga 8.Bheemavaram 9.Agarala and 10.Mammandoor like Ten Revenue villages and in Pu ttir ,Nagiri under these revenue divisions. It is starting cane crushing during 1977-1978. The licensed and installed capaci

ty of the factory was 1250 T.C.D, which was constant during the period of study . The authorized share capital of the company was Rs. 2,18,000 shares Rs.200 eac h the government contributed Rs.10,900 co-operative societies contributed Rs.124 in 1985-86. BACK GROUND : SRI VENKATESWARA CO-OPERATIVE SUGAR LTD . Tirupati was registered in the year 1972. The plant was commissioned on 22-03-1978. The original cost was no over ru n in cost. The installed capacity of the plant was 1250 TCD. Subsequent the so city has tak en up modernization programs with the addition of balancing equipment in the y ear 1994-95 and the plant to crush 1500TCD. The objective of S.V.CO-operative Sugar Factory Ltd is to protect economic inter est of members by encouraging proper development of agricultural industries on co -operative line and through co-operative principles with a special attention to small and marginal farmers . Accordingly the sugar factory was established in 19 78. The S.V Co-operative Sugar factory is locate at a distance of 6 K.M from Renigun ta Railway station and about 17 K.M from the Tirupati Town abutting National Hig h way 27 from Mumbai to Chennai. The sugar cane zone of factory is consisting of 22 madras and spread over in 507 villages . There are about 11,126 members and about 4000 farmers supplying suga rcane . During the crushing season 2002-03 the cane area was 3783 hectors. For t he season 2002-03 the factory entered in to agreement with the cane grower for s upply of 2,19,350s out of whigh the sugar factory crushed only 1,73,614 Mts. Abou t 45000Mts. Of cane was diverted to neighboring private factories. part from the above, the grower divert cane about 1.00 lack Mts. To neighboring private factories i.e.,K.C.P Mayura, Sudalagunta and Prudential sugars Ltd.,Nid ra for every year. Water is drawn from 7 boar well drilled in the factory premis ed. This factory installed effluent treatment facilities as required under the L aw. The total paid up share capital was Rs.2.79 lakhs in 1995-96,Rs.242.40 Lakhs in 1996-97,Rs2.788 in 1997-98,Rs.2.79 crores in 1998-99, Rs1.05 crores in 19992000. During the year 1998-99 the factory has crushed 2,10,273,289Mets of sugar cane i n 157 days working as installed capacity of 1250 tons of cane per day and produc e 1,89,850 quintals of sugars with a yield of 9.02% effort may be to increase th e percentage of recovery to wipe of loss. The factory has crushed 24,35, install ed capacity of 1250 tons of sugars with a yield of 9.03%. The factory arranges the following loans, which are standing against the cane gr owers as on 31-03-2000. 1. Seed loans. 2. Facyory loans. 3. Pesticides loans. 4. R.D.B.loans. 5. Bore well loans. The factory during the year 1996-97 there are 17 Bores accurate without any opp ortunities for many years. To produce loans Rs.84.23 in lakhs during the year 19 96-97 SUGAR INDUSTRY NATURE Seasonality: The industry is seasonal, with the season starting in November and continuing ti

ll April/may, sugarcane is available during these 6-7 months and therefore crush ing also takes place during three months. Licensing system : To protect sugar-producing units and ensure a sufficient quantity of raw materia l(sugarcane), licensing system was introduced. Under this system, each unit had a command area from where the sugarcane was produced. The licensing system presently in place is also trying to encourage the setting up of new unites by providing them with sops and other benefits.

Sri venkateswara Sugars limited has strength of 508 employees consisting: a) Managing Director b) Common Cadre c) Permanent employees d) Seasonal Employees e) N.M.R f) Consolidated Total No. of Employees 2.3 PRODUCT PROFILE : : : : : : 508 : 4 138 114 95 156 1

Sugar Cane: Sugar cane cultivated by growers or promising varieties in terms of sugar conte nt and yield. Cultivation techniques maturity of (decided by the cane personnel) harvested and supplied to the factory in trucks fresh less tops and roots. Truc ks are weighted with cane on weigh Bridge and unloaded on the moving cane carrie r. Mechanical un-loaders do unloading. Again empty truck is weighed to assertion in the weight of cane unloaded. Millings: Provided with a tandem of four mills land each mill is provided with three rolle rs. On the cane carried for cane preparation cane knives driven by motor and fol lowed by a fibrizer driven steam turbine are provided to chop the cane into smal l pieces and fiber to make the milling move efficient and to extract maximum jui ce from the cane. To make this process more effective assured quantity of water is added to mills. After extraction of juices, the waste materials are called ba gasse. Boilers: Provided with 2 nos. of boiler of each water evaporation capacity of 25 Mts . Pe r hour steam at 300 p sig (21 Kgs) . Steam is used for driving the fibrizer, mi lls by turbines and generator power, by steam turbine alternator . For boilers m ain fuel is bagasse. Surpluse bagasse is sold to paper industries.

Clarification: Juice extracted from sugar cane in mills is weighted in automatic weighing scale . It is preheated in juice heater to 50-750. Then it is limited and sulphieted s imultaneously. Juices will be coagulated from and will not settle .To induce set tings cheaply and abundantly available positive is to be added i.e. namely time in slurry form, also called milk of lime, by using Addition of such alkaline med ium is again brought down to natural pH Medium by bubo ling of sulpher dioxide g as. This gas is produced in sulpher burners and bubbled in preheated juices. By the aid of compressed air passing through sulpher burners . As such a juice is kept at slightly Alkaline medium say 701 to 7.2 The n this treated juice is heated again in other row of juices heaters to 102 C and to send to graver. Graver is abig tank where setting is taking place. Continuo usly, such juices is sent and drawn from it with the detention time of juices of about 330 hours in u tube principles. Evaporation:Ingraver juices will be well settled and will have a golden yellow color of 7.0p H(Neutral). This clear juice will contain more than 85% of water and the remaini ng soiled (Sugar Maximum + a little sugar). Inn evaporators about 75% of water i s removed and made syrup. This consists of one vapor cell and is followed by fou r bodies. Boiling is done under vacuum using exhaust stream from turbines tubes emerging out through tube plates and above this calandria vapor space or shell. Steam circulated through calandria and heating the outer point of juices is brou ght well bellow its origin boiling point. In the vapor cell alone exhaust steam i s admitted in to the calandria produced vapor from the preceding body and this b oiling is called Multi effect boiling and maximum fuel economy. This when juice is emerges out from last body it will be syrup, losing about 75% of water. Vacuum filter:Mud settled in graver is taken in rotary filters to extract juices from it and w aste is called filter cake sent out and used as manure. Extracted juices is agai n mixed juices from mills after weighment taken the path of process along with m ills juices in acylic form.

Sulphitation and syrup: The syrup from evaporator last body is again sulphited to beach to get white sug ar and sent to pan supply tanks. Pans: Pan bodies are similar to evaporators in construction with different design. Mat erials are invidiously boiled in four numbers under vacuum. Then the syrup is fu rther boil in pans. When the super saturation point reaches crystals come out it is again boiled up by addition kept in pan and the rest 2 portions sent to rece ivers. Then again pan is boiled. This process will help growth or crystal as des ired by us. Three boiling are bone A,B,C, These are called massecuites. All these mass cutie s (sugar+molasses) are purged in centrifugals respectively sugar and molasses ar e separated. Pans are boiler on vapor produced form vapor cell. Centrifugals: Such made massecuties are dropped in crystallizers (a storage tank with stirring mechanism). From crystallizes taken in to centrifugal machines and sugar and mo lasses separator. Centrifugal machines contain a basket fitted with mesh and scr een of small opening and will not allow sugar crystals to pass through but only molasses. When one machine in changed with massecuities and spun at 150 RPM mol

asses gets out and collects in a tank. Sugar remains in basket washed and dried by steam. Then dropped on hopper (to and or )shaking medium sugar will get dry w hen flowing and galls on sugar grader (fitted with meshes ) screened and bagged. Bags weighed on p.O scales of 100kgs and sent to go down. Molasses got from a massecuites; sugar and molasses from massescuties and sugar from c massecuites (final) are again boiled in pans in cyclic manner. Molasses g ot fro c massecuites called final molasses is a waste and sent to storage tanks( Raw material for alcohol industries).Sugar is graded in accordance and large i.e .,s-29,s-30. As the demand in the market is for s-30 it the fact.

SOURCES OF WORKING CAPITAL Among the various sources available for financing working capital nee ds finance manager has to select the best suitable source depending on working c apital need of company. Sources : Long term source Short term sources

The need of working capital is increased by raising prices of and products and r elative inputs. On the other hand the government and monetary authorities play t heir own role to curd the malice in periods of inflation . The control measure o ften take the of dear money policy and restriction credit .Financing of addition al working capital in such an amusement becomes a real problem to finance manage r of a concerned unite . Commercial banking play the most significant role in pr oviding working capital finance , particularly in Indians context . In view of m ounting inflation , the R.B.I has taken up certain social measures to check the money supply in the economy . The balancing need has to be managed either by lon g-term borrowings or by issuing equity or by earning sufficient profits and rela ting the same of coping with the additional working capital requirements. The fi rst choice before a finance manager , where banks do not provide a part of addit ional working capital, is too take the long-term sources of fianc. LONG TERM FINANCING :Loans from financial institution the option is normally rules out , because fina ncial institutions do not provide finance for working capital requirements . Fur ther this facility is not available to all companies This option is not practical.

FLOATING OF DEBENTURES :The profitability of a successful floating of debentures seems to be rather mer ging . In Indian capital market , floating of debentures has still to gain popu larly debentures issues of companies in private sector not associated with certa in reputed groups generally failed to attract investors to invest their funds in companies . In this context the mode of raising funds by issuing convertible d ebenture/ bonds is also gaining . ACCEPTING PUBLIC DEPOSITS :The issue of tapping deposits is directly to the image of the company seeking to invite public deposits.

ISSUE OF SHARES :With a view of financing additional capital needs , issue hare could be considered . Many Indian company have still respect of investors in the context low profit margin as dge about company make the success of a capita Issue very

of additional equity s to go ahead to command well as lack of knowle dim .

RAISING FUNDS BY INTERNAL FINANCING :Raising founds from operational profit poses problems for many companies, becaus e price of their end products are controlled and do not permit companies to ea rn profit sufficient requirements to finance additional working assets , still a largely feasible solution lies in increase profitability through cost control a nd cost reduction measures managing the cash operating cycle , rationalizing inv entory stock and so on . PROBLEMS ASSOCIATED WITH EXCCESS & IN ADQUATE WORKING CAPITAL :DANGERS OF EXCESS WORKING CAPITAL : It results in unnecessary accumulation of inventories .Thus the changes of inven tory mishandling , the losses increase . It is an indication of defective credit policy and stock collection period . Excessive working capital makes management compliment , which degenerates in to managerial efficiency . Tendencies of accumulating to make speculative profits grow . This may tend to m ake dividend policy liberal and difficult to cope with in future when the firm i s unable to make speculation profits . DANGERS IN INADEQUATE WORKING CAPITAL :1. It Strategies growth . It becomes difficult to undertake profitable proj ect due to non-availability of the working capital funds . 2. it becomes difficult to implement to operating plans and achieve the fi rms profit target . 3. Operating inefficiencies creep in when it becomes difficult even to mee t day-to-day commitments . 4. Fixed assets are not efficiently utilized for the working capital funds .Thuse , the rate of return on , investment slumps. 5. Paucity of working capital funds renders the firm unable to avail of att ractive credit opportunities etc. 6. The firm losses it reputation when it is not in a position ti turnover short-term obligation . METHOD FOR ESTIMATING WORKING CAPITAL REQUIMENTS Three widely used methods for determining working capital requirements of a fir m are : Percentage of sales method Regression analysis method Operating cycle method 1. PERCENTAGE OF SALES METHOD :In this method, level of working capital requirements is decided on the basis of past experience . The past relationship between sales and working capital is ta ken as a bases for determining the size of working capital requirements for futu re . It is , however , presumed that the relationship between sales and working capital that has existed in the past has been stable. Percentage of sales method is a simple and easily understood method and practica lly used for ascertaining short-term changes in working capital in future. Howev er this method lacks reliability inasmuch as its basic assumption of linear rela tionship between sales and working capital does not hold true in all the cases . As such , this method cannot be recommended for universal application .

2. REGRESSION ANALYSIS METHOD : This is a statistical method of determining working capital requirements by esta blishing the average relationship between sales and working capital and its vari ous components in the past year . In this regard the method of least squares is employed and the relationship between sales and working capital is expressed by the equation : 3. OPERATING CYCLE APPROACH :Operating cycle refers to the length of time necessary to complete the following cycle of events . Conversion of cash into inventory . Conversion of inventory into receivable . Conversion of receivable into cash . If the operating cycle is length than the working capital requirement will be m ore on the other hands , if the operating cycle is shorter than the working capi tal requirement will be less. According to this approach, size of working capital requirements of a firm is de termined by multiplying the duration of the operating cycle by cost of operation s. The duration of the operating cycle may be found with the help of the followi ng formula; O=R+W+F+A-P Where , O=Duration of operating cycle R=Duration of raw materials W=Duration of work-in-process F=Duration of finished goods A=Duration of accounts receivable P=Duration of accounts payable Duration of raw materials :If reflects the number of days for which raw materials remain in in ventory before they are issued for production . The following formula can be use d to determine duration of raw materials. Duration of work-in-process :It denotes the number of days required in the work-in-process stage .It may be ascertained with the help of the following formula :

Duration of finished goods :It refers to the number of days for which finished goods remain in in ventory before they are sold .This can be computed by the following formula : Average work-in-process inventory Per day sale of goods F= Duration of accounts payable :It refers to the number of days for which the suppliers of raw mat erials offer credit > This may be measured with the help of the following formul a :

Duration of the accounts receivable :-

It represents the number of days required to collect the accounts rec eivable . This may be calculated as under :

TENDON COMMITTEE REPORT Reserve Bank of India set up a committee under the chairmanship of shri P.L.Tan don in July 1974. The terms of reference of the committee were : To suggest guidelines for commercial bank to follow up and supervise credit from the point of view of ensuring proper end use of funds and keeping a watch on th e safety of advances. To suggest the type of operational data and other information that may be obtai ned by bank periodically from the borrowers and by the reserve bank of India fro m the leading banks . To make suggestion for prescribing inventory norms for the different industries , both in the private and public sectors and indicate the broad criteria for dev iating from these norms . To make recommendations regarding resources for financing the minimum working capital requirements . To suggest criteria regarding satisfactory capital structure and sound financial basis in relation to borrowings . To make recommendations as to whether the existing pattern of financing working capital requirements by cash credit/overdraft system etc., requires to be modifi ed, if so , to suggest suitable modifications.

RECEIVABLES MANAGEMENTS Finished goods sold on credit get converted (from the point of view of the selli ng form) into receivables (book debts) which realized generate cash . The avera ge balance in the receivable account would approximately be average daily credi t sales multiplied by average collection period . OBJECTIVES OF RECEIVABLE MANAGEMENT :The main objectives of receivable management are To obtain the optimum value of sales . To control the cost of credit and keep it at minimum . To reduce the average collection period . ASPECTS OF RECEIVABLE MANAGEMENT : Determining the credit policy . Determining the credit terms.

Evaluating the credit applications. Determining collection policies and methods . Control and analysis of receivables .

DETERMINING CREDIT POLICY :The first decision area of receivable management is determining credi t policy .In developing an optimum credit policy , the financial manager should compare the benefits of credit extension with the cost of credit . The major con siderations in costs are liquidity and opportunity cost . The credit policy of a firm provides the frame work to determine . Whether or not extent to a customer How much credit to extend. INVENTORY MANAGEMENT Inventory management involves the control of assets being produced fo r the purpose of sale in the normal course of companys operations . Inventories i nclude raw material inventory , work-in-progress inventory and finished goods in ventory . The goal of effective inventory management is to minimize the total co sts direct and indirect those are associated with holding inventories . However the importance of inventory depends on the extent or investment inventory . ROLE IN WORKING CAPITAL :Inventories are components of the firms working capital , as such, represent curr ent assets . Some characteristics are important in the broad context of working capital management including . Current assets Level of liquidity Liquidity lags 1) CURRENT ASSETS :It is assumed that inventories will be converted to cash in the cur rent accounting cycle , which is normally , one year . 2) LEVEL OF LIQUIDITY :Inventories are viewed as a source of near cash . At the same time m ost firms hold some slow-moving items that may not be sold for a long time . In this case , the liquidity aspects of inventories become highly important to the manager of working capital . At a minimum, the analyst must recognize that inve ntories are least Liquid of assets . For firms with highly uncertain operating e nvironments , the analyst must discount the liquidity value of inventories signi ficantly . 3) LIUDITY LAGS :Inventories are tied to the firms pool of working capital in a p rocess that involves three specific lags namely . Creation lags . Storage lags . Sale lags. Circulating activity .

CASH MANAGEMENT Cash is the most important factor in financial management . It is also the most important of all the current assets , for the operations of the business. Need for and objective of cash management : Larger cash and bank balances indicating high liquidity position of a company wh ich will result in lower profitability as idle cash fetches .

No return, while the same when invested in the assets of the company will result in profits . The need for holding cash arises from a varity of reason such as : Transaction motive Precautionary motive Speculation motive Lack of proper synchronization between cash inflows & cash outflows 1) Transaction motive :A company is always entering in to transactions with other entiti es , which may cause immediate cash inflows and out flows . So, firms always kee p a certain amount as cash to deal with routine transactions where immediate cas h payment is required . 2) Precautionary motive :A company has to be prepared to meet such contingencies like a sudde n fire may break out , accidents , employees strike etc, to minimize its losses . For this purpose companies generally maintain some amount in the from of cash . 3) Speculation motive :Firms also maintain cash balance in order to take advantage of opportu nities that do not take place in the course of routine business activities . 4) Lack of proper synchronization between cash inflows & cash outflows :In case of reasonably well managed profitable companies , that tota l amount of cash in flows fore the year is usually higher than total amount of c ash out flows . However , the company can have spells of cash deficits and surpl uses mainly due to lack of synchronization between cash inflows and out flows . CRETERIA FOR JUDGING THE EFFICIENCY OF WORKING CAPITAL MANAGEMENT :The efficiency of working capital management can be judged through accounting ratios . The important accounting ratios that could be used for judgi ng the efficiency of working capital management are : Current ratio Quick ratio/ acid ratio/ liquid ratio Cash to current Assets ratio Inventory turnover ratio Working capital turnover ratio CURRENT RATIO :This ratio is a barometer of general measure of liquidity and state o f trading current ratio shows the firms commitment to meet its shot-term liabilit ies .It expresses the relationship between current assets and current liabilitie s . Current assets Current ratio =. Current liabilities Current assets include cash , marketable securities , debtors , Investments , prepaid expenses etc .Current liabilities include creditors , bil ls payable ,accrued expenses ,short-term bank loans and other liabilities that m atured after one year . QUICK RATIO :This ratio is also called as Acid test ratio . Quick ratio is the real i ndex of the liquidity or the short-term solvency of a concern . Quick ratio gene rally expressed as a pure ,i.e., as a promotion between quick assets and quick l iabilities . Quick assets

Quick ratio = Current liabilities Quick assets = current assets stock As assets is liquid if it can be converted into cash immediately or reasonably s oon without a loss of value . Cash is the most liquid assets. Other assets that are considered to be relatively liquid and included in quick assets are debtors, bills receivable and marketable securities. From current assets, we exclude sto ck and prepaid expenses to get quick assets and from current liabilities we excl ude bank overdraft to get quick liabilities Cash to current assets ratio :Cash is important and sensitive current Assets. It is viewed as t he most liquid Assets. When the proportion of cash in current assets is more the n it is said that the company had more liquid. High proportion of cash in curren t assets also indicates the good stock in receivables. This ratio indicates the cash proportion in current assets. Cash and Bank balance Ratio = Current asset INVENTORY TURN OVER RATIO :It is ratio between cost of goods sold and average inventory . It indicates the efficiency with which the inventory is utilized by the firm ,calcu lated as follows : Net sales Inventory turn over ratio = Avera ge inventory Opening stock +closing st ock Average inventory = 2

WORKING CAPITAL TURNOVER RATIO :It is ratio between Net sales and net working capital . It sh ows Efficiency of working capital to generate sales . It is expressed as follow s . Net sales WCT =. Net working capital

Chapter 3 METHODOLOGY 3.1 NEED FOR THE STUDY :In order to maintain flows of revenue from operations every firm need certain am ount of current assets. For example cash is required to pay expenses or to meet obligation for service required etc . By a firm on the identical plan inventorie s are required to provide the link between production and sales . similarly acc ounts receivables generate when goods are sold on credit. Need less to maintain cast, bank, debtor receivables, closing stock (including r aw materials, working progress, finished goods) repayment and certain other depo sits and investments which are temporary in nature represents current assets of a firm: 3.2 STATEMENT OF THE PROBLEM :Management of working capital is an important function of finance department of a corporate organization . While managing current assets two important factors t hat are considered is liquidity and profitability . The excess working capital r esults in determination in profits and inadequate working capital results in liq uidity risk . So this study is undertaken to know to what extend the S.V co-oper ative sugars successful in trade- off liquidity and profitability . 3.3SCOPE OF THE STUDY :Decision regarding working capital management is operating in nature and is n ot our time decision ,so the scope of the study is to identify the areas of the control to have better over various components of working capital . An attempt is made to identify the optimum working requirements for S.V Co-opera tive sugars and how can they utilize the inventories , cash and receivables in b etter way 3.4 OBJECTIVE OF THE STUDY:This study is mainly focused to examine the short-time financial viability of S. V co-operative sugar as stated bellow: To study how best the working capital is utilized in the company. To study the short-term liquidity positions of company. To understand working capital management of a company. To study the changes in working capital position of the company . To suggest necessary methods by which future improvement may be Made in its management of working capital . 3.5 COLLECTION OF DATA :Interviewing primary and secondary data have been the sources of data . The study derives its data mainly from primary sources of information from fi nance employee of the company and the major source of secondary data was annual report of S.V Co-operative sugars for years 2003-04,2004-05,2005-06,2006-07,200 7-08 from of balance sheet and profit and loss account of the company . SECONDRY DATA :-

These are sources containing data which have been collected and compile d for another purpose . The secondary sources consists of available compendia an d already compiled statistical statement and reports whose data may be used by r esearches for their studies , e.g., census reports , annual reports and financia l statements of companies , statistical statements, reports of government depart ments , annual reports on currency and finance published by the reserve bank of India, statistical statements relating to co-operatives and regional rural banks , published by the NABARD .

METHODOLOGY OF RESEARCH The study required both primary and secondary data :PRIMARY DATA :Primary data has been collected by interviewing certain executives who were chosen on the basis of their in depth knowledge and experience in the comp any . The interviews in nature are under to gain as much information as possible . SECONDARY DATA :Secondary data was obtained from the past records file and reports of t he organization also from other financial statements . TOOLS FOR ANALYSIS OF WORKING CAPITAL :The quantum of working capital as well as its financing pattern is su bject to constant monitoring and reviews by the financial manager . There are di fferent analytical tools which can help a financial manager in monitoring in vie wing and controlling the working capital . The popularly used tools are : 1. Schedule of changes in working capital 2. Working capital ratios . 3. Ratio analysis 1.SCHEDULE OF CHANGES IN WORKING CAPITAL :Generally working capital refers to the excess of current assets over current liabilities . Management of working capital therefore is con cerned with the problems that arise in attempting to manager the current assets , the current liabilities and the inter relationship that exists between them . It refers to all aspects of administration of both current asset and current lia bilities . The basic goal working capital management is to manage the current assets and cu rrent liabilities of a firm in such a way that a satisfactory level of working c apital is maintained . The policies of working capital management of the organi zation . NET PROFIT :It is the profit earned after changing interest , depreciation but including oth er incomes . RESERVES & SURPLUS :The profit of the corporation that are ploughed back into the business are refer red to as reserves and surplus .

FINANCIAL RATIOS :The relationship between accounting figures expressed mathematically is known as financial ratios .

Chapter 4 DATA ANALYSIS & INTERPRETATION 1.CURRENT RATIO ; Current assets CURRENT RATIO = --------------------------Current liabilities Table No .1 YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 CURRENT ASSETS 337670484.2 166158923.6 181575031.3 304672071.6 289518277.1 CURRENT LIABILITIES 205528515.90 1.64 126824428.8 1.31 134688903.4 1.34 151590770.5 2.00 228296105.2 1.26 RATIO

INFERENCE : In the above table shows the current ratio of five years (2005-2009). The current ratio of Sri Venkateswara co-operative sugar factor Ltd varied from 1.64 to 1.26 with an average of 1.51 during the (2005-2009) study period . The solvency position of Sri Venkateswara co-operative sugar factory Ltd in terms of current ratio was above standard ratio 1:2 for the period . QUICK RATIO: Quick assets QUICK RATIO =-------------------------------Current liabilitie s Quick assets=current assets stock Table no.2 YEAR QUICK ASSETS CURRRENT LIABILITIES RATIO 2005-06 71440924.5 205528515.90 0.34 2006-07 52928595.8 126824428.8 0.41 2007-08 82489480.61 134688903.4 0.61 2008-09 100488237 151590770.5 0.66 2009-10 128382321.9 228296105.2 0.56 Graph no.2 INFERENCE ; In the above table shows the current ratio of five years (2005-2009) . The current ratio of Sri Venkateswara co-operative sugar factor Ltd varied fro m 0.34 to 0.56with an average of 0.51 it was bellow the standard norm of 1:1 fo r the entire period (2005-2009) . It was confirms that the liquidity position of

Sri Venkateswara co-operative sugar factory Ltd in term of quick ratio was les s the standard ratio . 3.CASH TO CURRENT RATIO ; Cash CASH TO CURRENT ASSETS RATIO = ----------------------Current assets Table no .3 YEAR 2004-05 2005-06 2006-07 2007-08 2008-09 CASH CURRENT 14296389.49 1279234.66 8552326.6 869200.99 28237090.15 ASSETS RATIO 337670484.2 166158923.6 181575031.3 304672071.6 289518277.1 0.04 0.007 0.04 0.002 0.09 Graph no .3 INFERENCE : In the above chart shows the current ratio of five years (2004-2008) . The cash to current ratio of Sri Venkateswara co-operative sugar factor Ltd va ried from 0.04 to 0.09 with an average of 0.03. In total current assets the cash is occupied with 2.6 % . It is clearly understood that the cash is occupied wit h percentage of 0.09 in the current year. INVENTORY TURN OVER RATIO ; Net sales INVENTORY TURN OVER RATIO =---------------------------Average inventory Table no .4 YEAR 2005-06 2006-07 2007-08 2008-09 2009-10 NET SALES 226181991 187495977.8 128327910.9 108877708.7 288247771.5 AERAGE INVENTORY 283136602.2 0.79 177550349.2 1.06 98279991.07 1.3 140577313.7 0.77 167631826.4 1.71 RATIO

Graph no 4 INFERENCE ; In the above chart shows the inventories turn over report for the pe riod of five years (2005-2009). The current ratio of Sri Venkateswara co-operati ve sugar factor Ltd staked from 0.79 in 2004 and it was slightly increased to 1 .06 in next . It was slightly increased in next year 2006 it was decreased to 0. 77 in the year 2008 . It was firstly increased to 1.71 in the last year (2008) 5.WORKING CAPITAL TURN OVER RATIO : Sales WORKING CAPITAL TURN OVER RATIO =--------------------------Net working capital Table no .5 YEAR SALES NET WORKING CAPITAL RATIO

2005-06 2006-07 2007-08 2008-09 2009-10

226181991.03 187495977.75 128327916.00 109166283.74 288247771.5

52997426.3 39334494.8 46886127.9 153081301 61222171.9

4.2 4.7 2.7 0.7 4.7

Graph no 5 INFERENCE : In the above table shows working capital turn over of five years (2005-09) .In the year 2005-09 SriVenkateswara co-operative sugar factory Ltd ho lds with efficient working capital after years ratio is declined .This is due to large amount cash and lowest inventory .

Table 4.1 SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2005-06 PARTICULARS 2004 2005 Effect of working capital Increase Decrease CURRENT ASSETS : Cash & bank balances 10277102.3 14296389.49 4019287.19 ----Investments 30050.00 43050.00 1300 0 ----Interest Receivable 20616205.74 20026230.18 -----589975.56 Loans and advances 33454794.92 36309018.82 2854223.9 ----Stores stock 14170338.83 11591104.64 -----2579234.1 9 Closing stock 317208363.8 254638455.1 -----62569908.7 Work-in-progress 366550.34 366550.34 ---------Prepaid Expenses 1357978.96 399685.65 -----958293.31 Total current assets-A 397481384.9 337670484.2 -----LIABILITIES : Payables as per Schedule Sundry creditors 151274679.5 11181469.31 191394172.51 14134343.40 ----------40119493 2952874.09 Total current liabilities B 162456148.8 205528515.90 Working capital A-B 235025236.1 132883267.8 Net Decrease in working capital 102883267.8 102883267.8 235025236.1 109769778.9 109769778.9

The net working capital requirement of the company during the year 2006 has increased in 2005 and the net working capital of the company was recorded Rs.13 ,21,41,968.3 and it was been increased to Rs .23,50,25,236.1 in the year 2006 .

Table 4.2 SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2006-07 PARTICULARS 2007 2008 Effect of working capital Increase Decrease CURRENT ASSETS : Cash & bank balances 14296389.49 1279234.66 ---13017154.83 Investments 43050.00 43050.00 ------Interest Receivable 20026230.18 19360932.92 ---665297.26 Loans and advances 36309018.82 31269521.47 ---5039497.35 Stores stock 11591104.64 102939908.53 ---1297196.11 Closing stock 254638455.1 102936419.3 ---151702035.8 Work-in-progress 366550.34 366550.34 -------Prepaid Expenses 399685.65 609306.39 209620.74 ----Total current assets-A 337670484.2 166158923.6 ----LIABILITIES : Payables as per Schedule Sundry creditors 191394172.51 14134343.40 118824875.80 7999552.96 72569296.70 6134790.44 ------Total current liabilities B 205528515.90 126824428.8 Working capital A-B 132141968.3 39334494.8 Net Decrease in working capital 92807473.5 92807473.5 13241968.3 132141968.3 171721181.4 171721181.4 INFERENCE : The net working capital requirements of the company during the ye ar 2008 has been increased in 2007, and the net working capital of the company w as recorded Rs.39334494.8 and it was been increased to Rs.13214196803 in the yea r 2008 .

Table 4.3 SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2007-08 PARTICULARS 2008 2009 Effect of working capital Increase Decrease CURRENT ASSETS : Cash & bank balances 1279234.66

8552326.6 7273091.94 ----Investments 43050.00 30050.00 ---13000 Interest Receivable 19360932.92 18225187.50 ---1135745.42 Loans and advances 31269521.47 55260347.73 23990826.26 ----Stores stock 10293908.53 7643366.69 ---2650541.84 Closing stock 102936419.3 91442184 ---11494235.3 Work-in-progress 366550.34 366550.34 -------Prepaid Expenses 609306.39 55018.39 ----- 554288 Total current assets-A 166158923.6 181575031.3 LIABILITIES : Payables as per Schedule Sundry creditors 118824875.80 7999552.96 126230398.07 8458505.41 ----------7405522.2 458952.45 Total current liabilities B 126824428.8 134688903.4 Working capital A-B 39334494.8 46886127.9 Net Decrease in working capital 7551633.1 7551633.1 46886127.9 46886127.9 31263918.2 3126398.31 INFERENCE ; The net working capital requirement of the company during the year 2008 has been increased in 2009, and net working capital of the company was rec orded rs.39334494.8 and it was been increased to Rs 46886127.9 in the year 2009.

Table 4.4 SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2008-09 PARTICULARS 2008 2009 Effect of working capital Increase Decrease CURRENT ASSETS : Cash & bank balances 8552326.6 869200.99 ---7683125.61 Investments 30050.00 30300.00 250 ----Interest Receivable 18225187.50 24088349.15 5863161.65 ----Loans and advances 55260347.73 51566777.85 ---3693569.88 Stores stock 7643366.69 11444451.59 3801084.9 ----Closing stock 91442184 192739383 101297199 ----Work-in-progress 366550.34 366550.34 ----- ----Prepaid Expenses 55018.39 23567058.68 23512040.29 ----Total current assets-A 181575031.3 304672071.6 LIABILITIES : Payables as per Schedule Sundry creditors 126230398.07 8458505.41 135992269.52

15598500.97 ----9761871.5 7139995.56 Total current liabilities B 134688903.4 151590770.5 Working capital A-B 4686127.9 153081301 Net Decrease in working capital 106195173.1 106195173.1 153081301 153081301 134473735.8 134473735.9 INFERENCE: The net working capital requirement of the company during the yea r 200 has been increased in 2009, and the net working capital of the company wa s recorded Rs.46886127.9 and it was been increased to Rs 153081301 in the year 2010 Table 4.5 SCHEDULE OF CHANGES IN WORKING CAPITAL FOR THE YEAR 2009-10 PARTICULARS 2009 2010 Effect of working capital Increase Decrease CURRENT ASSETS : Cash & bank balances 869200.99 28237090.15 27367889.16 Investments 30300.00 433000.00 13000 Interest Receivable 24088349.15 22462267.16 1626081.99 Loans and advances 51566777.85 56029079.51 4462301.66 . Stores stock 11444451.59 9721367.02 1723084.57 Closing stock 192739383 151414588.2 41324794.8 Work-in-progress 366550.34 366550.34 . Prepaid Expenses 23567058.68 21244034.75 2323023.93 Total current assets-A 304672071.6 289518277.1 . LIABILITIES : Payables as per Schedule Sundry creditors 135992269.52 15598500.97 213969252.99 14326852.30 .. 1271648.67 77976983.4 . Total current liabilities B 151590770.5 228296105.2 Working capital A-B 153081301 61222171.9 Net Decrease in working capital 91859129.1 91859129.1 153081301 153081301 124973968.7 124973968.7 NFERENCE: The net working capital requirement of the company during the year 20 09 has been increased in 2010 , and the net working capital of the company was r ecorded Rs.61222171.9 and it was been increased to Rs.153081301 in the year 2010 .

3.6

LIMITATIONS

It is based on the data supplied by the factory personnel. It is based on consultation , decisions of all concerned officials . Time is the major limitation for the study i.e., study conducted based on the 5 years financial report based on 5 years we cannot determine the over All finan cial position of the company . Due to limitations of time , it was unable to go far a depth a depth study into the subject .

FINDINGS & SUGGETIONS The schedule of changes in working capital decrease in the year 2005-06, 2006 -07, but in the year ,2007-08 has been increased . During the study period current liabilities are more than current assets . The ideal current ratio is 2:1 .The ratio shows that all years below the standar ds except in 2008-09. So it is loss the company as current assets decrease . The ideal Quick ratio is 1:1 . In 2005 and 2010 ratio is bellow the standard the company cannot repay the Current Liabilities with the help of Quick Assets . The liquidity position is not good in the company . The sales have been decreased year by year export 2008 . Due to the inefficiency of the assets . Net working capital turn over ratio has been fluctuating year by year except 200 7 . This ratio indicates the efficient turn over of the company .So the company is inefficient position . Inventory turn over ration was fluctuating year by year which indicates the inef ficient management of inventory .

SUGGESTIONS The company must try to maintenance of proper current assets to possess the shor t term solvency . The cash balances should be improved there by liquidity will be improved and suc h will can good solvency of the company .

Generally an ideal company will try to maintain an average working capital polic y , rather too conservative(or) too aggressive . But the company is highly follo wed the conservative approach . It can be suggested that the company should d evelop an optimum working policy keeping in view of the availability of funds fo r daily operations to get more profits . It is suggested that the company has to increase their sales .

SRI VENKATESWARA CO-OPERATIVE SUGAR FACTORY LTD.,TIRUPATI TRADING ACCOUNT FOR THE YEAR ENDED 31-03-2006 Si.no 1. Particulars Amount Si.no. Particulars Amount OPENING STOCK 1. SALES : (a)Levy sugar 1,72,79,600.00 (a) Levy sugar 1,65 ,80,877.25 (b)Free sugar 9,20,74,050.00 (b)Free sugar 10,35, 72,142.75 (c)Molasses 659.00 (c)Molasses 8 1,74,891.00 2. Cost of production from mfg. A/c 8,95,77,634.15 2. CLOSING STOCK 3. Trading Expenses as per schedule 4,17,860.75 (a) Levy sugar 53,26,034.00 4. Gross Profit C/D 1,80,64,291.10 (b)Free sugar 7,38,39,000.00 (c)Molasses 9921,150.00 TOTAL 21,74,14,095.00 TOTAL 21,74,14,095.00

SRI VENKATESWARA SUGAR FACTORY LIMITED BALANCE SHEET 2006 LIABILITIES Rs. Rs. 1.Share capital :

ASSETS

a)From Government b)From members c)From Institutions 2.Deposits & borrowings 3.Cashcredit pledge (sugar) 4.Payables as per schedule 5.Sundry creditors as per schedule 6.Reserves : a)Depreciation Reserve b)Gratuity reserve c)Investment Allowance d)Molasses storage fund e)Reserve for bad debts f)Reserve for objected items g)Reserve for overdue interest h)reserve for cane Development i)General Reserve 7.Central subsidy

Total 10,24,05,000.00 82-,29,200.00 1,05,000.00 14,80,45,026.00 6,46,37,183.38 12,62,30,398.07 84,58,505.41 10,84,99,859.40 0 0 0 1,85,06,800.62 4,70,741.93 0 0

15,00,000.00

58,70,38,531.29 1.Cash & balance : a)Cash on hand b)Bank balance as per schedule c)Postage on hand d)Adhesive stamps e)Stock of revenue stamps 2.Share Investments as per Schedule 3.Investment as per schedule 4.Receivable as per schedule 5.Lones & advances as per Schedule 6.Fixed assets : a)Land as per schedule b)Road fencing as per schedule c)Factory buildings as per schedule d)Non factory building as per schedule e)Plant & Machinery as per schedule f)Misc .Assets as per schedule 7.Furniture 8.Other assets as per schedule 9.Stores stock as per schedule 10.Closing stocks : a)Levy sugar b)Free sugar: 2004-05:48,900qts:Rs1510.00/c)Biss sugar: ---:1930qts:Rs.12,00.00/d)Molasses: in Steel tanks 2204.700 Mts@Rs.4,500/11.Work in progress as per schedule 12.Prepaid expenses as per schedule 13.Loss

85,931.75

84,67,298.74 2,098.00 0 0 30,050.00 1,38,65,325.58 1,82,25,187.50 5,52,60,347.73 3,56,861.21 29,94,938.15 54,02,081.15 30,96,464.74 9,31,35,106.70 64,38,657.50 6,43,415.82 24,43,353.81 76,43,366.69 53,26,034.00 7,38,39,000.00 23,16,000.00 99,21,150.00 3,66,550.34 3,66,550.34 27,71,24,385.49 58,70,38,531.29

SRI VENKATESWARA CO-OPERATIVE SUGAR FACTORY LTD ., TIRUPATI TRADIND ACCOUNT FOR THE YEAR ENDED 31-03-2007 Si.no Particulars Amount Si.no Particulars Amount 1 OPENING STOCK 1. SALES a)levy sugar 53,53,001.29 a)levy sugar 79, 85,109.86 b)Free sugar 1,68,06,121.60 b)Free sugar 9,22,9 7,669,38 c)molasses 1,14,64,440.00 c)molasses 85, 94,929.50 2. Cost of production from Mfg. A/c 17,36,85,181.91 2. CLOSING STOCK:

3. Trading Expenses as per Schedule 6,05,367.93 a)levy sugar 1,27,80,819.50 4. Gross Profit C/D 2,22,59,751.65 b)Free sugar 16,15,60,711.18 c)molasses 69,54,624.60 Total 29,01,73,864.39 Total 29,01,73,864.39

SRI VENKATESWARA SUGAR FACTORY LIMITED BALANCE SHEET 2007 LIABILITIES Rs. Rs. 1.Share capital : a)From Government b)From members c)From Institutions 2.Deposits & borrowings 3.Cashcredit pledge (sugar) 4.Payables as per schedule 5.Sundry creditors as per schedule 6.Reserves : a)Depreciation Reserve b)Gratuity reserve c)Investment Allowance d)Molasses storage fund e)Reserve for bad debts f)Reserve for objected items g)Reserve for overdue interest h)reserve for cane Development i)General Reserve 7.Central subsidy

ASSETS

Total 10,24,05,000.00 82-,29,200.00 1,05,000.00 17,76,03,154.64 14,43,14,651.68 17,28,85,234.72 1,38,50,959.98 10,91,70,,422.92 0 0 0 0 1,85,06,800.62 4,70,741.93 0 0 15,00,000.00

74,90,09,128.33 1.Cash & balance : a)Cash on hand b)Bank balance as per schedule c)Postage on hand d)Adhesive stamps e)Stock of revenue stamps 2.Share Investments as per Schedule 3.Investment as per schedule 4.Receivable as per schedule 5.Lones & advances as per Schedule 6.Fixed assets : a)Land as per schedule b)Road fencing as per schedule c)Factory buildings as per schedule d)Non factory building as per schedule e)Plant & Machinery as per schedule f)Misc .Assets as per schedule 7.Furniture 8.Other assets as per schedule 9.Stores stock as per schedule 10.Closing stocks : a)Levy sugar b)Free sugar: 2007-08:2,01,792qts:Rs1222.88/c)Biss sugar:

---:3,665qts:Rs.910.00/d)Molasses: in Steel tanks 2204.700 Mts@Rs.4,500/11.Work in progress as per schedule 12.Prepaid expenses as per schedule 13.Loss 3,11,120.86 2,14,88,619.93 2,556.00 0 0 43,300.00 13,55,728.23 2,42,79,070.06 4,82,08,735.19 3,56,861.21 29,94,938.15 54,02,081.15 30,96,464.74 9,31,35,106.70 64,38,657.50 6,43,415.88 24,45,283.81 1,11,39,507.08 1,27,80,819.87 16,15,60,711.18 61,20,155.50 69,54,624.66 3,66,550.34 -44,808.32 33,99,29,368.73

74,90,09,128.33

SRI VENKATESWARA CO-OPERATIVE SUGAR FACTORY LTD ., TIRUPATI TRADIND ACCOUNT FOR THE YEAR ENDED 31-03-2008 Si.no Particulars Amount Si.no Particulars Amount

OPENING STOCK 1. SALES a)levy sugar 1,27,80,819.87 a)levy sugar 4,84,2 2,875.41 b)Free sugar 16,15,60,711.18 b)Free sugar 21,99,44,278.20 c)molasses 69,54,624.60 c)molasses 1,98,8 0,167.95 2. Cost of production from Mfg. A/c 28,46,26,173.84 2. CLOSING STOCK: 3. Trading Expenses as per Schedule 14,31,685.11 a)levy sugar 0.00 4. Gross Profit C/D -2,06,97,333.91 b)Free sugar 14,74,40,800.00 c)molasses 1,09,69,109.13 Total 44,66,56,680.69 Total 44,66,56,680.69

SRI VENKATESWARA SUGAR FACTORY LIMITED BALANCE SHEET 2008 LIABILITIES Rs. Rs. 1.Share capital : a)From Government b)From members c)From Institutions 2.Deposits & borrowings 3.Cashcredit pledge (sugar) 4.Payables as per schedule 5.Sundry creditors as per schedule 6.Reserves : a)Depreciation Reserve b)Gratuity reserve c)Investment Allowance d)Molasses storage fund e)Reserve for bad debts f)Reserve for objected items g)Reserve for overdue interest h)reserve for cane Development i)General Reserve 7.Central subsidy

ASSETS

Total 10,24,05,000.00 82,29,200.00 1,05,000.00 12,20,59,477.46 24,81,79,819.92 1,71,87,792.92 16,74,37,814.46

0 0 0 0 4,70,741.93 0 0 00.00 15,00,0 1,85,06,800.62

79,60,49,204.43 1.Cash & balance : a)Cash on hand

b)Bank balance as per schedule c)Postage on hand d)Adhesive stamps e)Stock of revenue stamps 2.Share Investments as per Schedule 3.Investment as per schedule 4.Receivable as per schedule 5.Lones & advances as per Schedule 6.Fixed assets : a)Land as per schedule b)Road fencing as per schedule c)Factory buildings as per schedule d)Non factory building as per schedule e)Plant & Machinery as per schedule f)Misc .Assets as per schedule 7.Furniture 8.Other assets as per schedule 9.Stores stock as per schedule 10.Closing stocks : a)Levy sugar b)Free sugar: 2007-08:2,01,792qts:Rs1222.88/c)Biss sugar: ---:3,665qts:Rs.910.00/d)Molasses: in Steel tanks 5865.296 Mts@Rs.1,870/11.Work in progress as per schedule 12.Prepaid expenses as per schedule 13.Loss

57,658.99 3,00,21,060.42 1,961.00 0 0 43,300.00 13,59,223.23 2,25,47,064.07 5,12,87,646.57 3,56,861.21 29,94,938.15 54,02,081.15 30,96,464.74 9,31,35,106.70 64,38,657.50 6,43,451.88

24,45,283.81 1,21,48,408.67 0 14,74,40,800.00 33,50,747.40 1,09,68,109.13 3,66,550.34 2,51,782.75 40,16,92,171.98 79,60,49,204.43

SRI VENKATESWARA CO-OPERATIVE SUGAR FACTORY LTD ., TIRUPATI TRADIND ACCOUNT FOR THE YEAR ENDED 31-03-2009 Si.no Particulars Amount Si.no Particulars Amount 1 OPENING STOCK 1. SALES a)levy sugar 0.00 a)levy sugar 3,22,84,648.76 b)Free sugar 14,74,40,800.00 b)Free sugar 14,18,86,751.00 c)molasses 1,09,68,109.13 c)molasses 2,11,6 8,226.65 2. Cost of production from Mfg. A/c 35,04,90,108.75 2. CLOSING STOCK: 3. Trading Expenses as per Schedule 18,95,117.40 a)levy sugar 0.00 4. Gross Profit C/D -5,83,01,866.93 b)Free sugar 24,67,67,400.96 c)molasses 1,03,85,481.06 Total 45,24,92,328.63 Total 45,24,92,328.43

SRI VENKATESWARA SUGAR FACTORY LIMITED BALANCE SHEET 2009 LIABILITIES Rs.

ASSETS

Rs. 1.Share capital : a)From Government b)From members c)From Institutions 2.Deposits & borrowings 3.Cashcredit pledge (sugar) 4.Payables as per schedule 5.Sundry creditors as per schedule 6.Reserves : a)Depreciation Reserve b)Gratuity reserve c)Investment Allowance d)Molasses storage fund e)Reserve for bad debts f)Reserve for objected items g)Reserve for overdue interest h)reserve for cane Development i)General Reserve 7.Central subsidy

Total 26,27,04,949.71 82,63,4000.00 1,05,000.00 17,02,04,703.75 21,41,12,460.48 20,38,56,321.86 1,77,98,033.07

0 0 0 0 1,85,06,800.62 4,70,741.93

0 0 15,00,000.00

1,00,81,21,043.89 1.Cash & balance : a)Cash on hand b)Bank balance as per schedule c)Postage on hand d)Adhesive stamps e)Stock of revenue stamps 2.Share Investments as per Schedule 3.Investment as per schedule 4.Receivable as per schedule 5.Lones & advances as per Schedule 6.Fixed assets : a)Land as per schedule b)Road fencing as per schedule c)Factory buildings as per schedule d)Non factory building as per schedule e)Plant & Machinery as per schedule f)Misc .Assets as per schedule 7.Furniture 8.Other assets as per schedule 9.Stores stock as per schedule 10.Closing stocks : a)Levy sugar b)Free sugar: 2007-08:2,01,792qts:Rs1222.88/c)Biss sugar: ---:3,665qts:Rs.910.00/d)Molasses: in Steel tanks 5865.296 Mts@Rs.1,870/11.Work in progress as per schedule 12.Prepaid expenses as per schedule 13.Loss

11,22,612.37 2,15,75,138.85

0.00 0 0 43,300.00 31,24,052.23 2,22,47,366.62 5,36,26,415.42 3,56,861.21 29,94,938.15 54,02,081.15 30,96,464.74 9,31,35,106.70 64,38,657.50 6,43,415.88 24,45,283.81 1,67,47,043.84 0 24,67,67,400.96 33,35,150.00 1,03,85,481.06 3,66,550.34 10,27,363.00 51,32,40,450.12

1,00,81,21,043.89

SRI VENKATESWARA CO-OPERATIVE SUGAR FACTORY LTD ., TIRUPATI TRADIND ACCOUNT FOR THE YEAR ENDED 31-03-2010 Si.no Particulars Amount Amount 1 OPENING STOCK 1. SALES a)levy sugar 1,88,72,778.47 ,63,673.15 b)Free sugar 27,31,27,675.00 c)molasses 2,06,67,624.00 Si.no Particulars a)levy sugar 1,25

b)Free sugar 29,41,91,5333.38 c)molasses 2,69

,20,772.00 2. Cost of production from Mfg. A/c 25,56,26,593.20 2. CLOSING STOCK: 3. Trading Expenses as per Schedule 15,20,514.01 a)levy sugar 0.00 4. Gross Profit C/D 8,75,248.85 b)Free sugar 29,11,05,000.00 c)molasses 2,76,09,455.00 Total 65,23,90,433.53 Total 65,23,90,433.53

SRI VENKATESWARA SUGAR FACTORY LIMITED BALANCE SHEET 2010 LIABILITIES Rs. Rs. 1.Share capital : a)From Government b)From members c)From Institutions 2.Deposits & borrowings 3.Cashcredit pledge (sugar) 4.Payables as per schedule 5.Sundry creditors as per schedule 6.Reserves : a)Depreciation Reserve b)Gratuity reserve c)Investment Allowance d)Molasses storage fund e)Reserve for bad debts f)Reserve for objected items g)Reserve for overdue interest h)reserve for cane Development i)General Reserve 7.Central subsidy

ASSETS

Total 26,27,04,949.71 82,63,4000.00 1,05,000.00 21,53,42,221.40 21,68,07,000.13 11,99,92,838.52 2,37,06,608.97 11,14,46,902.17 0 0 0 0 1,85,06,800.62 4,55,403.77 0 0 15,00,000.00

97,88,38,125.29 1.Cash & balance : a)Cash on hand b)Bank balance as per schedule c)Postage on hand d)Adhesive stamps e)Stock of revenue stamps 2.Share Investments as per Schedule 3.Investment as per schedule 4.Receivable as per schedule 5.Lones & advances as per Schedule 6.Fixed assets : a)Land as per schedule b)Road fencing as per schedule c)Factory buildings as per schedule d)Non factory building as per schedule e)Plant & Machinery as per schedule f)Misc .Assets as per schedule 7.Furniture 8.Other assets as per schedule 9.Stores stock as per schedule 10.Closing stocks : a)Levy sugar b)Free sugar: 2008-09:2,1,12,696qts:Rs1213.57/c)Biss sugar: ---:3,682qts:Rs.1,000.00/-

d)Molasses: in Steel tanks 5865.296 Mts@Rs.1,870/11.Work in progress as per schedule 12.Prepaid expenses as per schedule 13.Loss

4,17,492.02 3,33,02,281.32 -745.00 0 0 30,300.00 39,31,517.58 2,12,34,265.41 7,37,38,017.89 3,57,362.21 29,94,938.51 54,02,081.51 30,96,464.74 9,31,35,106.70 64,38,657.50 6,57,631.88 25,01,756.81 1,72,68,902.98 0 29,11,05,000.00 3,38,850.00 2,76,09,455.00 3,66,550.34 3,96,141.42 39,45,20,187.13

97,88,38,125.29 BIBLIOGRAPHY Financial management ---Managerial accounting--IM.PANDEY , Vikas Publishing House Pvt Ltd, New Delhi Maheswari.

Financial management--- Prasanna Chandra , M.C. Graw hill Publishing company Ltd., New Del hi.