A STUDY ON

Working capital management

WITH REFERENCE TO

Coramondel fertilizers limited Kakinada.

A Project Report Submitted in the partial fulfillment for the A ard of the !e"ree of
Submitted b#

S.Somannadora
( eg No! "#$%&'###&&(
$nder the "uidance of

%r&'& (A)A *RISHNA + %(A Facult# in mana"ement ,tudie,

)AST* O+ ,US-N*SS AD)-N-ST AT-ON AD-TYA -NST-TUT* O+ ./ STUD-*S+

A!( road+ ,urampalem+ E&-&+ .//0 1 2/&

AD-TYA -NST-TUT* O+../.STUD-*S D*.A T)*NT O+ ,US-N*SS )ANA/*)*NT (Approved By Aicte, Affiliated To AU) Adit0a Nagar1 AD, oad1 SU A).A2*)3%44&45

C* T-+-CAT*

Thi, i, to certif# that the project entitled 3WO K-N/ CA.-TA2 )ANA/*)*NT6 i, the bonafide or' done b# %r& *&(A)A *RISHNA+ %(A

durin" the period .//012/ in partial fulfillment of the re4uirement for the a ard of the !e"ree of )AST* O+ ,US-N*SS AD)-N-ST AT-ON -N AD-TYA

-NST-TUT* O+ ../. STUD-*S affiliated to AU.

. O7*CT /U-D*! )r. K. ,A2A K -S8NA Facult# in mana"ement ,tudie,

8*AD O+ T8* D*.A T)*NTO+ ),A )r. 7.NA/*ND A KU)A

D*C2A AT-ON

here

b#

declare

that ith

the

project to

or'

entitled

9WO K-N/

CA.-TA2 2TD:

)ANA/*)*NT6

reference

CO O)AND*2

+* T-2-S* S

KAK-NADA i, ori"inall# prepared and ,ubmitted b# me to AND8 A UN-;* S-TY1 5ISA*HAPATNA% in partial fulfillment of the re4uirement, for the a ard of the de"ree of )AST* O+ ,US-N*SS AD)-N-ST AT-ON. The empirical findin", in the report

are ba,ed on the data collected b# me hile preparin" thi, project& It ha, not been ,ubmitted to an# other uni6er,it# or publication at an# time before&

.2AC*!

S.SO)ANNADO A

DAT*! "#$%&'###&&(

( egd.No.

AC*NOW)E!%ENT
I wish to thank Sri J.NAGENDRA KUMAR, HEAD OF THE DEPARTMENT OF MANAGEMENT STUDIES IN ADITYA INSTITUTE OF P.G STUDIES for his val a!l" s ##ort in $oin% this #ro&"'t.

I thank () #ro&"'t % i$"* Mr. K. BALA KRISHNA, MBA +"'t r"r in Mana%"("nt St $i"s for #rovi$in% (" his val a!l" % i$an'" an$ ",#"rtis" in s ''"ssf l 'o(#l"tion of this #ro&"'t.

I think () #ro&"'t ",t"rnal % i$"

Mr.

E. kesava
who shows infinit"

reddy. Mana%"r -finan'".* /.I.+

#ati"n'" an$ #"rs"v"ran'" in t"a'hin%* s %%"stin% r"("$i"s for th" #ro!l"(s "n'o nt"r"$ in () #ro&"'t an$ in answ"rin% all () 0 "stions. I also ",t"n$ () thanks to () fri"n$s for th"ir 'oo#"ration $ rin% () "ntir" #ro&"'t #"rio$.

S.SO MANNADORA

CONT*NTS C8A.T* '!

Introduction Scope of the ,tud# Objecti6e, of the ,tud# %ethodolo"# )imitation,

C8A.T* "!
Indu,tr# profile

C8A.T* 4!
Compan# profile&

C8A.T* &!
Theoretical Frame Wor'

C8A.T* %!
!ata Anal#,i, and Interpretation

C8A.T* <!
Findin", Su""e,tion, Conclu,ion

,-,2-O/ A.8Y

ANN*=U *

CHAPTER-1
-ntrod>ction Need for t?e st>d0 O@AectiBes )et?odolog0 2imitations

-NT ODUCT-ON
Financial %ana"ement i, that mana"erial acti6it#+ hich i, concerned hich

the 3plannin"7 and 3controllin"7 of the firm8, financial re,ource,& The financial mana"ement ,tudie, about the proce,, of procurin" and optimum utili9ation of financial re,ource, ith a 6ie to ma:imi9e the 6alue of the firm there b# the 6alue of the o ner, i&e&+ e4uit# ,hareholder,& Finance i, life of blood of an# bu,ine,, and hold, the 'e# to all the bu,ine,, a, ell a, ;human acti6itie,8& The "o6ernment al,o treat, a, a ,i"n and health# indicator to control and mea,ure it, ,tep,& Finance pla#, the role in e6er# economic ,ituation here there i, a pre,ent or future pa#ment of mone#& Financial mana"ement i, broadl# concerned ith the ac4ui,ition and u,e of fund, b# a bu,ine,, firm,& The ,cope of financial mana"ement can be defined in term, of follo in" 4ue,tion,<

2& Ho lar"e ,hould be the firm and ho fa,t ,hould it "ro = .& What ,hould be compo,ition on firm8, a,,et,= >& What ,hould be the compo,ition of firm8, financin"=

+inance and ot?er )anagement +>nctions!3

There e:i,t, an in,eparable relation,hip bet een finance on the one hand and production mar'etin" and other function, on almo,t all 'ind, of bu,ine,, acti6ite,+ directl# or indirectl#+ in6ol6e the ac4ui,ition and the u,e of fund,& Finance function, call of ,'illful plannin"+ control and e:ecution of a firm8, acti6itie,& Thu,+ hile

performin" the Finance %ana"er ,hould ,tri6e to ma:imi9e the mar'et 6alue of ,hare&

+inance Decisions!3
Decision >nder finance f>nction incl>des!
2& In6e,tment !eci,ion,& .& Finance !eci,ion,& >& !i6idend !eci,ion, ?& )i4uidit# !eci,ion&

-N;*ST)*NT D*C-S-ON!3
In6e,tment deci,ion in6ol6e, the careful ,election of profitable in6e,tment propo,al,+ allocation of fund, to the in6e,tment propo,al, ith a 6ie to obtain the

net pre,ent 6alue of the future earnin", of compan# and to ma:imi9e it, 6alue& In6e,tment deci,ion in6ol6e, the deci,ion of allocation of capital to lon" term a,,et, @capital bud"etin" deci,ion,A and ,hort term a,,et, @mana"ement of or'in"

capitalA t o important a,pect, of the in6e,tment deci,ion, are e6aluation of the pro,pecti6e profitabilit# of ne in6e,tment,& The mea,urement of cut1off rate a"ain,t in6e,tment, could be compared& In6e,tment

that the pro,pecti6e return of ne

deci,ion in6ol6e, ri,'+ becau,e of uncertain future in6e,tment propo,al, ,hould+ therefore be e6aluated in term, of both e:pected return and ri,'&

+-NANC* D*C-S-ON!3
Finance function include, here+ here and ho to ac4uire fund, to meet the

firm in6e,tment, need, determinin" the propo,ition of e4uit# and debt i&e&+ Capital Structure of the firm& Once optimum capital ,tructure i, de,i"ned finance mana"er rai,e, the appropriate amount throu"h the be,t a6ailable ,ource,& In thi, area+ one mu,t be concentrated on debt e4uit# mi:+ the ad6anta"e, and di,ad6anta"e, of ha6in" debt component in capital mi:+ impact of ta:ation and depreciation on earnin" per ,hare etc&

D-;-D*ND D*C-S-ON!3
!i6idend deci,ion i, here the financial mana"er mu,t decide hether the

firm ,hould di,tribute all profit, or di,tribute a portion and retain the balance& The optimum di6idend polic# i, that hich ma:imi9e, the mar'et 6alue of the ,hare,& For thi, determination of optimum di6idend pa#ment rate i, e,,ential the pa#ment return i, e4ui6alent to the percenta"e of di6idend, to earnin" a6ailable to ,hareholder,&

2-CU-D-TY D*C-S-ON!3
Finance deci,ion i, "enerall# affected b# current a,,et, mana"ement+ ,o current a,,et, ,hould be mana"ed efficientl# for ,afe"uardin" the firm a"ain,t the dama"e, of lac' of li4uidit#& The main aim of deci,ion i, that to en,ure that neither more i, in6e,ted in current a,,et, nor it ,hould ha6e in,ufficient in6e,tment in current a,,et,&

D*+-N-T-ON O+ CO .O AT-ON +-NANC*D+-NANC* )ANA/*)*NT!3

3Accordin" to Wheeler+ (u,ine,, Finance a, 3that bu,ine,, acti6it# concerned hich i,

ith ac4ui,ition and con,er6ation of capital fund, in meetin" the financial

need, and o6erall objecti6e, of bu,ine,, enterpri,e&7 Accordin" to Enc#clopedia of ,ocial ,cience, 3Corporation Finance i, dealin" ith financial problem, of Corporate Enterpri,e,7&

W?at is +ertilizers!3
A"riculture i, an important economic acti6it# and ,er6e, a, a bac' bone for economic de6elopment of a de6elopin" countr# li'e India& A"riculture i, a 6er# 6ital ,ector of India8, econom#& Ti account, for >.B of the countr#8, -!P+ pro6ide, emplo#ment to CDB of the or' force and earn, .EB of India8, forei"n e:chan"e&

A"riculture i, helpful in acceleratin" the "ro th and impro6in" the econom# of the people& Therefore+ "ro th of a"riculture i, an indicator of health of the o6erall econom#& The mo,t important factor that contribute, to the "ro th of a"riculture i, the u,e of fertili9er,& India ,oil ha, been depleted of the e,,ential nutrient, re4uired for the health# "ro th and de,ired #ield of crop,& The,e ,carce nutrient,+ hich help in

pro6idin" nitro"en+ pho,phoru,+ calcium and iron nece,,ar# for the health# "ro th of the crop& %an# indu,trie, in the compan# al,o depend on a"ricultural output+ ,er6e, a, ra material, for their plant,& hich

Hence fertili9er indu,tr# ha, been ,elected for ,tud#& Coromandel fertili9er i, ,tandin" out po,ition of the re,t& It pla#, a major role b# contributin" around 2>&CEB of the total production of fertili9er in India& %oreo6er+ total arable land bein" limited+ the onl# a# out for the future i, to increa,e #ield throu"h judiciou, application of ell po,itioned to help the countr# addre,, thi,

fertili9er, and pe,ticide,& CF) i, challen"e&

Coromandel i, an enterpri,e that contribute, it, product, to ard, de6elopment of a"riculture& The compan#8, ambience and "ood ill ha, attracted me to ,elect the compan#& The compan# ha, different department, li'e Finance+ %ar'etin"+ and %anufacturin" etc& I ha6e done m# project in finance department of Coromandel Fertili9er, )imited&

NEED FOR THE STUDY

The proce,, of ma# ,tud# focu,e, mainl# on the anal#,i, of financial ratio, and or'in" capital fund, flo ,tatement+ ca,h flo ,tatement and in Coromandel

Fertili9er, )imited& The ,tud# ha, 6ariou, benefit, to 6ariou, partie, directl# @orA indirectl# and ha, "reat ,i"nificance& Thi, ,tud# "i6e, me a practical in,i"ht into the or"ani9ation, acti6itie, and enable, me to 'no the practical problem, and ,olution, in Coromandel

Fertili9er, )imited main the area of Financial %ana"ement& It i, beneficial to top %ana"ement of the compan# b# pro6idin" cr#,tal clear picture of 6ariou, a,pect, @contributin" for coA i&e&+ Financial po,ition etc&+ The ,tud# i, al,o beneficial to emplo#ee, and offer, moti6ation b# ,ho in" 6ariou, acti6itie, contributin" for compan# "ro th& The in6e,tor, ho are intere,ted in the compan#8, ,hare, ill al,o "et benefit, b# "oin" throu"h the ,tud# and can ea,il# ta'e a deci,ion not in the compan# ,hare,& It i, helpful in financial a, it focu,e, on dail# ca,h flo , mana"ement and fund, flo mana"ement in the or"ani9ation& Finance plan, are central hether to in6e,t or

in,trument, for directin" and co1ordination the financial effort&

O,7*CT-;*S O+ T8* STUDY

The pre,ent ,tud# coromandel fertili9er, )imited&+ 'a'inada ha, been underta'en to e6aluate the or'in" capital mana"ement of the or"ani9ation b# e,tabli,hin" the

follo in" objecti6e,& To 'no about fertili9er indu,tr# in India and bu,ine,, acti6itie, of

coromandel fertili9er, )imited& To re6ie limited& To find out of ratio,& To e:amine about caucu, for chan"e, in or'in" capital from time to time& To 'no the percenta"e of in6e,tment in each component of current a,,et,& To mea,ure, the performance of ca,h+ bill, recei6able, and in6entor#& To find out the ,ource, of or'in" capital finance of the compan#& To "i6er ,u""e,tion, to compan# re"ardin" the performance of capital& or'in" or'in" capital po,ition of the compan# throu"h financial the pro"re,, and or"ani9ation efficienc# of coromandel fertili9er,

)*T8ODO2O/Y
T?e data collected for t?e st>d0 is of tEo t0pes!

Primar# !ata Secondar# !ata

Primar# data i, obtained from official, of finance and other !epartment,& The primar# data i, obtained throu"h di,cu,,ion, and contact, coromandel fertili9er, )imited and a"ricultural department The ,econdar# data i, obtained from the annual report, and the Other document, maintained b# the compan#& The information i, collected from the printed and publi,hed financial ,tatement, of the compan#& In the ,tud# ma:imum part of the data i, obtained from Secondar# data that i, annual report, etc&+ and the re,t i, from primar# data& The information ha, been collected from 6ariou, other boo', and ha, been modified& ith the official, of

2-)-TAT-ONS O+ T8* STUDY

E6er# ,tud# i, conducted under ,ome limitation,& Some of the limitation, of the ,tud# are a, follo ,& The ,cope for "atherin" data i, 6er# le,,F thi, i, due to the fact that 6ocational trainee,& !urin" the project period mo,t of the ,taff member, are bu,# and other or',& So the# could not afford "i6e full information& Some of the information a, not a6ailable due to the confidential matter,& Since official,+ e:ecuti6e, and other, focu,ed on ,econdar# data& Compari,on of Coriander8, performance ith other or"ani9ation, a, not ere not ere bu,# the ,tud# a, primaril# ith auditin" e are

po,,ible ,ince the financial ,tatement, of other or"ani9ation, a6ailable& !uration of time i, al,o a limitation&

CHAPTER-

T?e scenario +ertilizer -nd>str0 in -ndia

-NT ODUCT-ON TO +* T-2-F* -NDUST Y<

FERTILIZER INDUSTRY AT NATI NAL LE!EL"
Fertili9er, are of immen,e 6alue to man& The# help the "ro th of a"riculture production& India i, primaril# an a"ricultural or an a"ro ba,ed countr#& Hence+ it pro6ide, an immen,e role in pro6idin" ,upport to million, of people of the countr#& The u,e of fertili9er, enable, the plant to increa,e the crop production b# ab,orbin" "reater amount of nutrient, pre,ent in the ,oil& Hence+ the fertili9er, ,ector i, one of the 6ital ,ector, in the econom# of the countr#& Of late+ a lar"e number of pri6ate and public ,ector fertili9er plant, ha6e come up in the countr#& The,e plant, en"a"e them,el6e, in the production of ,e6eral ,imple and comple: fertili9er, ,uch a, urea+ ammonium pho,phate and other comple: nitro"enou, and pho,phate fertili9er,+ hich pla# a ,trate"ic role in caterin" to the need, of the 6ariou, ,ector, of the ,ociet#& Some of the major fertili9er, ma'in" companie, are Na"arjuna Fertili9er, and chemical, )td&+ Coromondel Fertili9er, )td&+ are the major Pho,phoric plant, in the countr#& In fact+ all the other fertili9er Na"arjuna Fertili9er, and Chemical, )td&+ Coromandel Fertili9er, )td&+ are the major Pho,phoric plant, in the countr#& In fact+ all the other fertili9er plant, in the countr# are either nitro"enou, or Pota,h ba,ed&

)*AN-N/ AND *SS*NT-A2 *2*)*NTS!

Fertili9er i, defined a, 3an# material+ or"anic or inor"anic+ natural or ,#nthetic+ "ro th& A fertili9er containin" t o or more nutrient, and durin" the production, of hich+ chemical reaction ta'e, place i, called 3Compound or Comple: Fertili9er7& Primar# hich ,upplie, one or more of the chemical element, re4uired for the plant

nutrient, Nitro"en @NA+ Pho,phoru, @P .ODA and Pota,h @*.OA are normall# ,upplied throu"h chemical fertili9er,&

8-STO Y O+ -ND-AN +* T-2-F* -NDUST Y!

The fir,t fertili9er factor# in India bone, a, e,tabli,hed at Ranipet+ Tamil Nadu b# a, follo ed b# !harma,ri The fir,t production of a, follo ed in 2G?2 b#

EI! Parr# )td&+ in 2GGC to produce ,uper pho,phate from the acidulation of cru,hed ith an annual capacit# of C+?// ton,& Thi, %aorajrji Chemical Compan# Factor# at Ambernath in %ahara,tra in 2G.? and !C% at !elhi in 2GC?+ both produced an# Super Pho,phate& nitro"enou, fertili9er, 6i9&+ Ammonium Sulphate Tata Iron and Steel Compan# at Ham,hedpur& Thi, a, in 2GG> a, a b#1product in the

production of ,mall 4ualitie, of Ammonium Sulphate at (ela"ula+ %#,ore& The acute ,horta"e of food immediatel# after the Second World War nece,,itated a fre,h loo' at the #ield, a#, of increa,in" production of food "rain, in the countr#& In thi, proce,,+ the need, for fertili9er, a, an e,,ential input for increa,ed ere reali9ed& A, a re,ult the -o6ernment of India ,tarted a fertili9er plant in Sindri& India a, the fourth lar"e, producer of Nitro"enou, fertili9er, in the orld& It a, ran'ed 0th in the pho,phate fertili9er,&

O2*

O+

+* T-2-F* S

-N

A/ -CU2TU S

W-T8

*+* *NC* TO -ND-AN A/ -CU2TU *!

A"riculture i, a 6er# 6ital ,ector of India8, econom#& It account, for >.B of the countrie, -!P+ pro6ide, emplo#ment to CDB of the o6erall econom#& fertili9er,& The de6elopment of fertili9er indu,tr# in India ha, been ,#non#mou, rapidl# "ro in" a"riculture& About D/B of the increa,e in crop producti6it# in recent time, can be credited to the u,e of fertili9er,& ith or' force and earn, .EB of the India8, forei"n e:chan"e& -ro th of a"riculture i, an indicator of health of the The mo,t important factor that contribute, to the "ro th of a"riculture i, the u,e of fertili9er,& The follo in" point, hi"hli"ht, the need, for

 India ha, different 'ind, of ,oil, and a"ro1climatic re"ion,& Centurie, of croppin" and inade4uate manure ha6e left the Indian ,oil lar"el# depleted of plant nutrient,& To ad6i,e and educate the farmer, about the u,e of fertili9er, and en,ure the ,uppl# of 4ualitati6e product,+ a number of ,oil te,tin" laboratorie, ha6e been ,et up& The,e helped the farmer, in judiciou, u,e of fertili9er,& The con,umption of fertili9er, i, directl# related to the a6ailabilit# of ,ub,oil and ,urface ater for irri"ation and on the 6a"arie, of the eather& The con,umption of fertili9er, i, not e6enl# di,tributed& The imbalance ha, to be remo6ed to brin" about the optimum u,a"e of fertili9er,& The India economic "ro th lar"el# depend, on a"riculture& Health of the fertili9er indicate, the trend of economic upturn andIor rece,,ion& Earlier+ the "o6ernment u,ed to fi: the ,ellin" price, of fertili9er, pro6idin" for di,tributor8, mar"in, In 2GEE+ the -o6ernment introduced a retention price ,cheme for nitro"enou, fertili9er,+ hich a, la"er e:tended to other fertili9er,& To ma'e ade4uate 4ualit# of fertili9er, a6ailable to farmer, in time+ -o6ernment al,o "a6e a frei"ht ,ub,id#+ fertili9er, to the bloc' head 4uarter,& !ue to ample mi,handlin" political interference+ -o6ernment "a6e up all tho,e plan, and "a6e permi,,ion, for decontrol of Pho,phate and Pota,,ium fertili9er, to the bloc' head4uarter,& hich co6ered the mo6ement of

. *S*NT T *NDS!
!urin" the 0th plant in 2GG.1G0+ production came 6er# clo,e to 2//B capacit# utili9ation in ,pite of the problem, of ,ic'ne,, and ra material con,traint,& There ould ha6e been no ,hortfall in production durin" the 0 th plan but for the failure of planned capacit# addition of ,e6en la'h tone, for nitro"en and . la'h tone, for pho,phate due to feed ,toc' ,uppl# con,traint, @natural "a,A

In ca,e of pho,phate fertili9er hich depend, holl# on imported ra material onl# a ,mall capacit# addition a, included in the 0th plan ith the adoption of pipe1 reactor technolo"# in the e:i,tin" plan, to enable them to achie6e a production increa,e of .D1>/B& Thi, did not help the unit, becau,e of the polic# chan"e, in 2GG. re,ultin" in decontrol of pho,phate fertili9er,& The major objecti6e of Gth plan @2GGE1.//.A ,trate"# i, to frame lon" term feed ,toc' and price policie, for fertili9er, and the ,tead# taperin" off of ,ub,idie,& It al,o aim, to encoura"e inflo of fre,h in6e,tment, and brin" about an increa,e in fertili9er con,umption& To reali9e optimum application+ the lar"e price di,parit# bet een the different nutrient, to rel# optimum application, Infra,tructure fertili9er, and port handlin" of imported nutrient,& The lac' of coherent fertili9er polic# made difficult b# the political uncertaintie, created b# coalition compul,ion at the Centre+ i, tellin" on the health of thi, 6ital indu,tr#+ throu"h production i,e it ha, a better #ear in 2GGE1G0 than in the i,e pre6iou, #ear& Thi, underlined the need for the comprehen,i6e fertili9er polic#& A, a re,pon,e to thi,+ a hi"h po er committee recommended ,crappin" of unit balanced application b# farmer,& The pricin" methodolo"# retention price cum ,ub,idie, ,cheme for both urea and comple: fertili9er, to facilitate a, ba,ed on lon"1ran"e a, mar"inal co,t principle to enhance production efficienc#& Thi, pricin" formula al,o propo,ed to increa,e ne in6e,tment, and efficient u,e of feed,toc'& Fertili9er A,,ociation of India elcomed the ,u""e,tion, to brin" the price ill al,o ha6e to be corrected& ill ha6e to be ,tren"thened to en,ure ,mooth rail mo6ement of

!AP and other comple: fertili9er, in line ith the ,ellin" price or urea to minimi9e in balance in price ration and promote balance fertili9er u,e& Ha6in" become the >rdlar"e,t producer+ India8, production of plant nutrient, durin" 2GGE1G0 re"i,tered "ro th of 2E and 2C percent& The major factor re,pon,ible for impro6e production a, the impro6ement in the feed,toc' ,uppl# po,ition&

2*/A2 -).2-CAT-ONS!

In order to enforce di,cipline amon" the fertili9er manufacturer,+ "o6ernment introduced number of le"i,lati6e mea,ure, for ,uppl# of ,tandard fertili9er, to the ultimate con,umer,&

ESSENTIAL # $$ DITIES A#T, %&''(E#A)

Thi, a, enacted b# Parliament on 21?1DD to re"ulate the production+ ,uppl#

di,tribution+ trade and commerce of e,,ential commoditie, in India+ Fertili9er defined a, one of the e,,ential commoditie,& FERTILIZER $ !E$ENT # NTR L RDER, %&() Thi, a, promul"ated under Sec1> or ECA to en,ure e4uitable di,tribution of

fertili9er, in different part, of the countr#+ mo6ement of fertili9er, from one ,tate to another i, po,,ible hen authori9ed b# Central or State -o6ernment&

FERTILIZER # NTR L RDER, %&*'(F# )

With a 6ie to en,ure that the 4ualit# of fertili9er, i, chec'ed at

manufacturin" ,ta"e+ ,tatutor# pro6i,ion, ha6e been made in the FCO that each manufacturer ha, certain minimum te,tin" facilitie, in their factor#& The production of ,tandard 4ualit# of fertili9er, alone doe, not en,ure but the fertili9er, are deli6ered in the ,ame chemical and ph#,ical condition dul# protectin" the nutrient content,& %o,t of fertili9er, bein" h#"ro,cope in nature+ their 4ualit# "et, deteriorated if the# are not properl# pac'ed+ ,tored and di,tributed&

STANDA D O+ W*-/8TS G )*ASU *S (.ACK*D CO))OD-T-*S( U2*S1 'H55

$nder Section 10> of the Act+ e6er# pac'a"e ,hall bear thereon a label ,ecurel# affi:ed& A definite plan and con,picuou, declaration made in accordance ith the pro6i,ion, of the chapter in re,pect of name+ addre,,+ net 4uantit#+ month and #ear of manufacture+ common or "enetic name of the commodit# unit ,ale price etc&

SU,S-D-*S TO +* T-2-F* S -NDUST -*S -N -ND-A!

Fertili9er ,ub,id# i, one of the important ,ub,ide, related to a"riculture ,ector in India& The other major ,ub,idie, are food ,ub,idie, electricit# and canal ater

,ub,id#& Fertili9er and food ,ub,idie, e:plicitl# appear in the union bud"et+ the po er and ,ub,idie, are implicitl# ,ub,idie, ari,in" on account of lo er u,er char"ed reco6ered from the con,umer, than the a6era"e co,t a,,ociated ith the,e input,&

CHAPTER-3
Compan0 profile

CO O)AND*2 +* T-2-F* S 2-)-T*D

-NT ODUCT-ON!
The "o6ernment of Andhra Prade,h in it, endea6or, to ,er6e the farmin" up of !i1Ammonium pho,phate @!APA plant, in the ,tate& The pho,phoric fertili9er, project of coromandel fertili9er, @CF)A i, located at 'a'inada on the ea,t coa,t of India& -ro th project of con,umption of pho,phoric fertili9er,& The !AP plant of coromandal fertili9er, i, one of the planned pho,phoric unit#& Coromandel fertili9er, @CF)A a, incorporated on 2E th !ecember+ 2G02 ith

it, re"i,tered office at Secunderabad& The compan# became public limited on >2,t Au"u,t+ 2G0? it !i,trict annum& -FC) became part of the %uru"appa -roup in Hul# .//> after coromandel fertili9er, @CF)A ac4uired the .CB ,ta'e of -o6ernment of Andhra Prade,h in the proce,, of di,in6e,tment,& IFFCO+ the other major ,hareholder and co1promoter of the compan# di6e,ted it, ,hareholdin" in fa6our of CF) on 2. th April .//E& With thi, -FC) ha, become a ,ub,idiar# of CF)+ capital& Note! 3-FC)7 ha, mer"ed in 3CF)7 ,o it, increa,ed their "ro th in that particular #ear @.//E1.//0A& hich hold, currentl# E?&G.B of the ,hare a, further a"reed to ,et up the plant at 'a'inada+ in Ea,t -oda6ari

ith an initial outla# of R,&22? crore, and a capacit# of >&// la'h %TS per

C+2 ;-S-ON!
To be a leader in the pho,phatic indu,tr#+ producin" hi"h 4ualit# fertili9er, at lo co,t and "i6in" ,ati,faction to all ,ta'e holder,&

C+2 )-S-ON!
To enhance the pro,perit# of the farmer throu"h ,uppl# of 4ualit# farm input, and related ,er6ice, to en,ure 6alue for mone#& Farmer, hile promotin" the economic intere,t of ,hareholder, in line ith the

national prioritie,& In con,ideration of the promotional role pla#ed b# IFFCO+ ,o lon" a, IFFICO8S the le"al and beneficial o ner of not le,, than EG+E/+/// i,,ued and full# paid up e4uit# ,hare, of CF)+ i&e&+ the IFFCO ,hare, IFFCO ,hall+ a, it,

Option!
aA Ha6e a ri"ht to a ,hare in the mar'in" of CF)8S annual production if !APINP* up to a ma:imum of .DB of the e:i,tin" annual production of CF)+ pro6ided that ,uch ,ale, ,hall be on term, and condition, decided b# the board, of director, of CF) @The boardA hich term, and condition, not be le,, ad6anta"eou, than tho,e offered to an# of other CF)8S mar'eter,Idi,tributor, bA -et !APINP* fertili9er, manufactured in CF)8S plant @the plantA unto .DB of the e:i,tin" annual production capacit# of the plant b# ,uppl#in" ra material, at IFFCO8S co,t+ and on pa#ment of con6er,ion char"e, to CF) to be mutuall# determined on a ,imilar ba,i, a, a"reed bet een IFFICO and CF) in the pa,t&

The financial in,titution li'e I!(I+ ICICI JIFCI and a con,ortium of commercial ban', financed the project b# financin" of lon"1term loan, @Thu,+ CF) ha, ,etup a !ia1Ammonium pho,phate @!AOA plant, annum at 'a'inada& The plant ha6in" been e:panded from time to time+ the in,talled capacit# ha, been brou"ht to 0&>. la'h %TS per annum+ product,& CF) into production in !ecember+ 2G0E it, 2/0 core !AP plant a modern and a ,ophi,ticated fertili9er, plant it produce, 4ualit# "ranular !AP confirmin" the hi"he,t international ,tandard,& !AP i, compile fertili9er, and the ra li4uid ammonia and pho,phoric Acid& material, re4uired for production are ith capabilit# to produce ide ran"e of ith a capacit# of > la'h per

CO).ANY AT /2ANC*
Compan# < CORO%AN!E) FERTI)IKERS )I%ITE! 2Eth !ecember+ 2G02 -o6ernment of Andhra Prade,h+ IFFCO 20<?C</ >/////%%T

Lear of incorporation< Promoter <

Fertili9er Trade <

Annual production of !AP< Capital Co,t < 2/0 <

%ean, of Finance

>/B E4uit#+ E/B (orro ed Capital pho,phoric Acid Ammonia $rea Filler $tilitie, Water Po er (a",

%ajor Ra %aterial, <

%ar'etin" Territoritie,

Andhra Prade,h+ %ahara,htra %adh#a Prade,h+ $ttar Prade,h+ (ihar+

*arnata'a+ We,t (en"al Tran,portation < Fertili9er, Pe,ticide, < < Rail E/B+ Road >/B& $rea+ %OP+ SOP+ AS+ SK+ Car& %onochrotopho,+ Munolpho,+ Edho,ulphon+ Carbonda,in Re"i,tered office < 35ani Nila#am7 D/+ ,eda,tian Road Sec>ndera@ad 3%44##4 (an'er, < State (an' of India+ State (an' of H#derabad Andhra (an'+ Indu,trial !e6elopment (an' of India Factor# < (each Road *a'inada 1 D>>//2

,OA D O+ D- *CTO S
Chairman !irector, < < %r& A& 5ella"an %r& *& (ala,ubramaniam %r& N& ,rini6a,an %r& (&5&R& %ohan Redd# %r& Santho,h Redd# Alternati6e !irector < %r& Ra'e,h *apur Pre,ident and hole Time !irector < %r& Ra6i Chandra %r& *& A& Nair @up to >/1?1.//EA Compan# ,ecretar# < %r& P& 5aradarajan @lehalA

*C*NT C8AN/*S -N C+2!

Sale, of ,hare, of -o6ernment of Andhra Prade,h< The "o6ernment of Andhra Prade,h ha6e in6ited upon bid,+ b# a# of notice,

publi,hed in the ne , paper, on 2/&/D&.//>+ for ,ale of it, 0.+0/+///I1 E4uit# ,hare, of R,&2/I1each& Con,e4uent upon the di,in6e,tment, of -o6ernment of Andhra Prade,h @-OAPA of it, ,hareholdin" in fa6our of %I, coromanel fertili9er, @CF)A+ a con,e4uential chan"e in the mana"ement of the compan#& Ta'in" into con,ideration the chan"e, ,hareholder,& A"reement ha, been entered into b# and bet een %I, CF) and %I, Indian Farmer Fertili9er, Co1operati6e )imited @IFFCOA on .Dth Hul# .//>& The,e chan"e, nece,,itated certain amendment, to the article, of A,,ociation of the compan#+ hich re4uire the appro6al of the ,hareholder, b# a# of a ,pecial

re,olution a, re4uired under ,ection >2 of the companie, Act+ 2GDC&

.2ANT CA.AC-TY SU,S*CU*NT TO *=.ANS-ON!

CF) 8, plant capacit# i, no enhanced to 0+>.+/// %T, per annum in term, of the compan#8, re"ular "rade !AP production Sub,e4uent to completion of up "radation in both train, ith pipe reactor&

.* +O )ANC* . O+-2*S!
+rod,ctio-"
There ha, been remar'able "ro th in the production of the compan# in term, of production and turno6er durin" the #ear under re6ie a, compared to the

performance of the compan# durin" the pre6iou, compan# achie6ed a production of 0/C0/E%TS of fertili9er, con,i,tin" of E?/C2>%TS of !AP and CC2G? %TS of

comple:e,& Thi, #ear a, a"ain,t the pre6iou, production of E?.E22%TS con,i,tin" of 2D/?2G2 %TS in production

$ar.eti-/"
The ,ale, performance, of the compan# durin" the #ear under re6ie had been 4uite ,ati,factor# in ,pite of ,tiff competition and increa,e in dome,tic a6ailabilit# of !AP& The cumulati6e ,ale, of Pho,phate Fertili9er, of the compan# ith E0/2D.%TS a, a"ain,t the pre6iou, #ear, ,ale, of E>C0/C%TS& !urin" the #ear compan# ,old total ,ale, E0/2D. %TS con,i,tin" of DGC2?2%TS of !AP 0/C0? other comple:e, and 2/>>.E are traded product,&

DISTRIBUTI N NET 0 R1
Compan# mar'etin" operatin" are performed and the product di,tribution

i, carried out throu"h ,i: maim, ,tate, namel#<

Andhra Prade,h %adh#a Prade,h $ttar Prade,h %ahara,thra (ihar and We,t (en"al

*/-ONA2 O++-C*S!
The re"ional officer, are at< (hopal

Na"pur )uc'no

+-NANC*!
!urin" the 2GGG1./// compan# "et "ood profit i&e&+ 220>GG i, the -ro,, profit after deletion of the ta: i, DE?&?? thi, i, the net profit of CF)& !urin" the .///1/2 compan# ha, incurred lo,e, for cau,e of ,tiff competition i, ,ale, ,o compan# ,ale, decrea,e and it i, effect on to increa,e the e:penditure& !urin" the #ear .//21/. compan# had al,o increa,e in lo,,e,& (ut the lo,, i, not been much more than pre6iou, #ear& A"ain from .//>1/? compan# i, in "ood po,ition in turno6er& In the #ear compan# "et "ood profit and a"ain "et "ood ,tabilit# po,ition financiall#

SA2*S O+ +* T-2-F* S AND CUANT-TY DU -N/ T8* 2AST +-;* Y*A S<
Pro6i,ion for income Lear Income E:penditure Profit of the #ear E?DDG&?/ 0G>..&G2 ./.>&G> 2/.0&/0 .DG2&ED ?./>&?2 Ta: /&// 1 1 1 )o,, 2>C.&?/ 2/.0&/0 2E/G&.0 .C2/&// ProfitI

/>1/? E.D>D&?E /?1/D G/>D/&GG

/D1/C 2.22?C&// 220DD?&.D /C1/E 2D.DC?&?. 2?0>C.&/2

/E1/0 20/>D>&0. 2E.G2?&00

E?>0&G?

?G.0&G?

2AND ACCU-S-T-ON!
CF) ha, ac4uired >22&.acre, of land from the -o6ernment of Andhra Prade,h and other pri6ate o ner,& Out of thi, area+ around 2// acre, i, co6ered b# plant& About ?D acre, are in Rail a# ,idin" and the remainin" i, the lo 1l#in" area& -reen belt i, de6eloped around one *ilometer radiu, of !AP unit per ecolo"ical and en6ironmental population control&

.OW* AND WAT*

Po er i, ,upplied from APSE( rid to the 2>. *5 ,ub1,tation of CF) and di,tribute at refined 6olta"e, to the con,umer, ith in the plant&+ Water i, ,upplied from Artha'atla ith in the pro:imit# of 0 *&% and treated ater i, ,upplied to the con,umer, at different location ith plant&

O,7*CT-;* O+ CO A)AND*2 +* T-2-F* S 2-)-T*D!

T 0ARDS NATI N
To conduct profitable and pro"re,,i6e fertili9er, product, di,tribution and other related a"ricultural input bu,ine,, of the ealth of the nation&

T 0ARDS IN!EST RS
To pro6ide "ood return on capital to "enerate internal re,ource, for "ro th e:pectation and di6er,ification of indu,tr# and pro"re,, a"ricultural production&

T 0ARDS DISTRIBUT RS"

To promote ,ound commercial policie, and competiti6e mar'etin" effort, in ,er6in" cu,tomer,&

-).O TANT +UNCT-ONS O+ .2ANT ACCOUNTS !EPART%ENT!

2& Reve-,e a-d capital 2,d/et3 4o-itori-/ a-d co-trolli-/"
Learl# bud"et acti6it# ,tart, durin" the month, of No6ember+ !ecember and department i,e re6enue bud"et re4uirement ill be recei6ed b# plant account and ill be ill be

after 6erification and di,cu,,ion, con,olidated and

ith indi6idual department the ,ame

ill be ,ent to corporate finance The data ,ent b# plant

further ,crutini9ed and corporate finance

ill prepared re6enue bud"et of the

compan# after con,iderin" the bud"et re4uirement, of ma'in" and corporate office& Similarl# capital bud"et, of plant ill be prepared under the head, 6i9&+ impro6in"

producti6it#+ ,tatutor# and ,afet# re4uirement, and operational and maintenance ba,e, 5E! anal#,i,& (oth capital and re6enue bud"et, ill be put up board durin" Februar#I%arch ill be recei6ed b# plant ill be ,ent to

after their 'ind appro6al& Appro6ed bud"eted copie, account,+ hich

ill be di6ided into departmental bud"et and

indi6idual department, of their u,e& All the e:penditure propo,ed are monitored and controlled a, per the appro6ed bud"et& ". ARRAN5E$ENT

F FINAN#IAL # N#URREN#ES:

(a,ed on the appro6ed bud"et indentin" department prepare, a purcha,e re4ui,ition and material department initiate, the procurement proce,, b# floatin" en4uire, in pre,, if 6alue e:ceed, R,&2/&// la'h,+ minimum fi6e en4uirie, if the 6alue in pre,, i, more than R,&2 la'h and minimum three en4uire, in ca,e the 6alue i, le,, than R,&22 la'h material department ill be en4uire, and a 4uotation comparati6e

,tatement @MCSA ill be prepared to identif# the )2 part# and a purcha,e other ill be placed on the part# a, per recommendation of the indent, and appro6al of the -% an# de6iation from the procedure, re4uire, the prior appro6al of the competent authorit# ith ju,tification,& Propo,al before final appro6al Finance concurrence for the propo,al ill be come to finance for concurrence& ill be "i6en after 6erif#in" the bud"et

pro6i,ion+ purcha,e procedure+ dele"ation of po er and other "uide line, i,,ued in thi, re"ard&

>& $a-a/e4e-t I-for4atio- Sy3te4"

Preparation of monthl# co,t ,heet of !AP and NP* if produced durin" that month& Preparation of 6ariance to find out the rate+ u,a"e+ 6olume and e:penditure 6ariance, for ta'in" correcti6e action+ bud"et commitment report, department i,e all other date a, re4uired b# corporati6e finance from time to time&

?. I-3,ra-ce:
Obtainin" the in,urance co6era"e for ra material, ,oc',+ fini,hed product in ,oil and ba" a"in" plant + tran,mit in,urance+ ,hip in,urance+ fi:ed a,,et, in,urance

etc& arran"ement of rene al + for the e:pirin" policie, and follo up for claim ,ettlement,&

D. I4port of 3pare etc:

E,tabli,hment of forei"n letter, of credit for import of ,pare, a, per re4uirement of indenter&

C& Ra6 $aterial Acco,-ti-/:

%onthl# pho,phoric Acid+ ammonia+ $rea+ Water+ )AHS ba", etc&+ con,umption fi"ure, ill be arran"ed b# !AP and off ,ite, !epartment to account, ill be boo'ed in the

department and the monthl# con,umption after 6erification "eneral led"er a, per the ei"hted a6era"e co,t of ra

material, price, ,tore, led"e

@PS)A& Import pa#ment are handled at corporate office and after pa#ment the ,ame i, tran,ferred to plant in rupee,+ a, i,,ue in PS)& hich ill be ta'en a, receipt+ a, con,umption i, ta'en

E. Arra-/e4e-t of pay4e-t to creditor3 for 3,pplie3, 6or.i-/ a-d pro7ect38

After receipt, and acceptance of the indented at ,tore, material recei6ed report @%RRA ill be prepared and ori"inal ill be ,ent to account,& The ,ame ill be 6alued a, per in6oice and purcha,e order& Supplie, bill are proce,,ed a, per the purcha,e order and %RR and re"i,ter of ,undr# creditor, pa#ment ill be finali9ed for arran"in" the or' order and the contract

or' and project, bill, are proce,,ed a, per the

and pa#ment ill be arran"ed&

0. +riced Store3 led/er (ST RES)"

Store, department

ill enter the 4uantit# part of the %RR and account,

ill

feed the 6alue for the ,ame& %aterial, I,,ued 6oucher @%I5A

ill be entered into the

pac'a"e b# ,tore for e6er# i,,ue a, per the re4uirement of indenter+ indicatin" the 4uantitie, 6alue of %I5S are arri6ed on the ba,i, of ei"hted a6era"e co,t method b# identif#in" the material code& The PS) ill be proce,,ed monthl# once for both ,tore, ,ituated at 'a'inada and 6i,a'hapatnam and compute H5 i, "enerated b# debitin" the con,umption and creditin" the ,oc',& There are appro:imatel# 2D// item, in the PS) and thi, ill be reconciled ith -eneral )ed"er& Non Nmo6in" item, ill be informed to concerned department for ta'in" nece,,ar# action& (in card balance, and PS) balance, are 6erified monthl# to confirm that there are 6ariation, and if an# 6ariation, identified the ,ame ill be reconciled&

9. E3ta2li394e-t of pay Roll3"

Appro:imatel# around ??/ emplo#ee, are or'in" in *a'inada plant, and

5i,a'hapatnam& All the e,tabli,hment pa#ment, and ,alarie, for the emplo#ee, are arran"ed from the plant ,ubmi,,ion of IT!S return, to ,tatutor# authoritie,8 pa#ment, for other ,tatutor# deduction, are complied&

10. #a39 a-d Ba-."

Plant account, i, ha6in" total or'in" capital ,ub limit, of R,&.GD la'h, in

the ban' 6i9& ,tate (an' of India R,&..D la'h,+ (an' of India R,&D/ la'h and Andhra (an' R,&./ la'h& Fund, are tran,ferred from Corporati6e official to plant ba,ed on the

re4uirement& %onthl# ban' reconciliation of the plant account, ill be prepared& Ca,h credit intere,t debit, ill be 6erified before accountin" the ,ame+ liai,on ith ban'+

preparation of dail# ca,h flo ,tatement etc&

11. A,dit"
Plant accountant i, re,pon,ible for attendin" the follo in"<Statutor# Auditor,< Statutor# Audit b# ,tatutor# auditor,+ appointed b# ,hareholder, at A-% and the# ill continue to hold the office till the completion of ne:t A-%&

Ta: A,ditor3"
Ta: auditor, are appointed b# (oard of !irector, and after the Ta: audit the auditor, ill "i6e the report,+ hich ill be ,ubmitted ton income Ta: Authoritie,

alon" ith return of income of the compan#&

#o3t A,dit:
(a,ed on the recommendation of the (oard+ -o6ernment auditor, and after completion of report the auditor )a (oard ith a cop# to the compan#& ill appoint the co,t

ill ,ubmit the ,ame to compan#

I-ter-al A,ditor3"
The internal auditor, ill conduct periodical audit,+ and replie, ill be arran"ed for their findin",&

CO A)ANDA2 +* T-2-F* S 2-)-T*D AWA DS!

ISO 2?//2 certificate, recei6ed b# CF) for it, en6ironment mana"ement ,#,tem&

Occupation health and ,afet# mana"ement ,#,tem certificate under OSHAS1 20//2&

-o6ernment of Andhra Prade,h labor !epartment N%a# !a# A ard .//E for (e,t %ana"ement&

ISO G//2 certificate recei6ed for 4ualit# mana"ement ,#,tem& FAPCCI A ard recei6ed for out,tandin" contribution of CF) for ,ocial elfare&

FAI a ard for impro6ement in o6erall performance for the #ear .//?1/D&

CHAPTER4
T?eoretical frame Eork

WO K-N/ CA.-TA2 )ANA/*)*NT

-NT ODUCT-ON!
Fund, are re4uired for t o ba,ic purpo,e, in an# or"ani9ation& Fir,tl#+ fund, are re4uired to create producti6e capacitie,& To purcha,e fi:ed a,,et, and ,econdl#+ to finance a part of the da# to da# runnin" of the bu,ine,, Which i, other or' i, the 3WOR*IN- CAPITA)7 Wor'in" capital mana"ement i, an inte"rated part of o6erall Corporate mana"ement& The finance mana"er ha, to carr# out the finance Function, in the face of ri,' and certain the fact that ca,h flo , cannot be Predicted ma'e, the job difficult& ith an# certaint#+

$ea-i-/"
or'in" capital mean, Current A,,et,< ca,h+ (ill,+ Recei6able,+ ,toc' etc&+ @1A Current liabilitie,& %ana"ement of current a,,et, i, more important than

mana"ement of fi:ed a,,et,& A, thi, i, problem relatin" to deci,ion ma'in" re"ardin" in6e,tment in 6ariou, current a,,et, ith an objecti6e of marinatin" li4uidit# of fund, ,o that all pa#ment, can be made on due date& The capital of re4uired for fi:ed a,,et, and or'in" capital+ hich i, for routine pa#ment& The need, for capital of bu,ine,,

are al a#, for t o purpo,e& @aAFor e,tabli,hin" a bu,ine,, unit and @bAAnd for pa#ment for routine e:pen,e,

A) L N5 ;TER$ FUNDS
)on"1term fund, are needed for the purcha,e of fi:ed a,,et,< )and and

(uildin"+ plant, J%achiner#+ Furniture etc& In6e,tment in ,uch a,,et, repre,ent, a, a part of corporate capital+ capital& hich i, bloc'ed on a Permanent ba,ic 'no n a, fi:ed

B) L N5 ;TER$ FUNDS
Short Nterm fund, are fund, needed for pa#ment of Ra of %aterial+ pa#ment or'in"

a"e, and other dail# e:penditure& The,e ,hort term Fund, are 'no n a,

capital+

Defi-itio-"
3Wor'in" capital i, the amount of fund, nece,,ar# to co6er the operatin" the enterpri,e7& S?>@in Wor'in" capital mana"ement i, concerned ith the problem that ari,e in co,t of

attemptin" to< mana"in" the current a,,et,& The current liabilitie, and interrelation,hip that e:i,t, bet een them thu, it i, al,o 'no n a, 3Current A,,et, %ana"ement7& The interaction bet een current a,,et, and current liabilitie, i, therefore+ the main theme of the theor# of Wor'in" Capital %ana"ement& The term, current a,,et, refer toF tho,e a,,et,+ cour,e of bu,ine,, can be turned into ca,h hich are in the ordinar#

ithin one #ear& The %ajor current a,,et,

are ca,h+ %ar'etable+ ,ecuritie,+ Account,+ Recei6able, and In6entor#& Current )iabilitie, are tho,e claim, of out,ider,+ hich are e:pected to nature of pa#ment

ithin an accountin" #ear and include creditor, <bill, Pa#able, and ban' O&!& and out ,tandin" e:pen,e,& Wor'in" capital i, often cla,,ified a, "ro,, or'in" capital and net or'in"

capitalF -ro,, or'in" and net or'in" capital& -ro,, of all current a,,et,& Net

Wor'in" Capital i, the ,um

or'in" capital i, the difference bet een the total current or'in" capital i, referred to

a,,et, and total current liabilitie,& (ut "enerall#+ Net ,impl# a,

or'in" capital& Net Wor'in" capital can be defined a, part of current+

hich are financed ith lon"1term, fund,& The ta,' of the financial mana"ement in mana"in" or'in" capital efficientl#

i, to en,ure ,ufficient li4uidit# in the operation, of the enterpri,e& The li4uidit# of bu,ine,, firm i, mea,ured b# it abilit# to ,ati,f# ,hort N term obli"ation, a, the# become due& The three ba,ic mea,ure, ,o+ far firm, o6er
2& The Current Ratio .& The Acid N Te,t Ratio and >& Net or'in" capital&

all li4uidit# are<

CO).ON*NTS O+ WO K-N/ CA.-TA2 AND T8*-).O TANC*!

The component, of or'in" capital can be broadl# cate"ori9ed Into t o the# are 2A Current A,,et,+ .A Current )iabilitie,& Current A,,et, refer, to tho,e a,,et, can be turned into ca,h and ithin one #ear hich in ordinar# cour,e of (u,ine,,

ithout under "oin" an# !iminution in 6alue

ithout di,ruptin" the operation, of the firm,& The follo in" are the important

current A,,et,< Ca,h Account, Recei6able& %ar'et Securitie,& In6entorie,&

CU
#a39"

*NT ASS*TS!

Ca,h i, the crucial component of the

or'in" capital of a Concern& Ca,h i,

li'e blood,tream in the human bod# "i6e, ,tren"th to a (u,ine,, unit& Without it+ the firm i, not able to procure the other re,ource, That are needed to continue the operation, of the bu,ine,, unit& %ana"ement Ha, a dut# to ,ee that the firm it mana"e, ha, ,ufficient ca,h balance at all Time, to meet the da#1to1da# re4uirement,&

$otive3 of <oldi-/ #a39 2& The rea,on, for holdin" ca,h can be cla,,ified into three Cate"orie, namel#F
Tran,action moti6e i, the need for ca,h balance to conduct the da#1 to 1da# operation, of the bu,ine,,&

.& Precautionar# moti6e i, the need for ca,h to meet une:pected circum,tance, a, ca,h inflo , and out flo , are ,ome hat unpredictable& The le,, predictable the firm8, ca,h flo , the lar"er the ca,h balance, held& >& Speculati6e moti6e relate to holdin" ca,h to enable the firm to ta'e ad6anta"e of an# bu#in" opportunitie, b# and lar"e bu,ine,, firm, do not indul"e in

,peculation,& Therefore+ the primar# moti6e, to hold ca,h are the tran,action, and precautionar# moti6e&

Acco,-t3 receiva2le3"
Recei6able and current a,,et, repre,entin" amount o ed to the firm a, re,ult of the ,ale, of "ood, or ,er6ice, on credit in the ordinar# cour,e of bu,ine,,& Thi, term i, al,o applicable to ,ub,idiarie, and ,upplier, of ra e4uipment,& The in6e,tment of fund, in recei6able, i, no e:ception& The "oal, of maintainin" recei6able, are a, follo ,F material, ,tore,+ ,pare and

%8 I-crea3e i- 3ale3"
Credit i, con,idered to be the bac' done of modern bu,ine,,& To increa,e ,ale,+ "ood, are ,old to cu,tomer, on credit ho are not illin" to pa# ca,h hen the# purcha,e "ood,& Where there i, acute competition it ma# be nece,,ar# for a firm to e:tend lar"er credit to it, cu,tomer, and e,tabli,h credit Policie, ,imilar to the police, of competition&

=8 I-crea3e i- profit3"
If the direct objecti6e, of maintainin" recei6able, i, to ha6e increa,ed 6olume of ,ale,+ an indirect object i, that the additional ,ale, ill lead to hi"her Profit,&

)A K*TA,2* S*CU -T-*S!

%odern bu,ine,, concern, ma'in" practice to in6e,t their ,urplu, ca,h in mar'etable ,ecuritie,& %ar'etable ,ecuritie, are ,hort1term mone# mar'et in,trument, li'e trea,ur# bill,+ 4uoted corporate ,hare+ debenture etc& that con6erted into ca,h hen the ca,h i, needed in the bu,ine,,& %ar'etable ,ecuritie, u,uall# "i6e lo er #ield, then firm, operatin" a,,et,& There are t o rea,on, for mar'etin" in6e,tment in the,e ,ecuritie,& Fir,tl# the,e ,er6e a, ,ub,titute for lar"er ca,h balance+ li4uidation part of the ,ecuritie, to increa,e the ca,h balance hen out flo , e:ceed, ca,h Inflo , Secondl#+ the,e are u,ed a, a temporar# in6e,tment to meet 'no n financial re4uirement of the firm, in near future& The,e al,o ,er6e a, a cu,hion a"ain,t ,ea,onal purcha,ed a, hat can be ea,il#

,oon a, the e:ce,, ca,h in hand ,o that income on e:ce,, ca,h ma# not be lo,t&

-N;*NTO -*S!
In6entorie, repre,ent major current a,,et,& A,,et, in6e,tment in %o,t of the manufacturin" firm, ran"in"+ from perhap, .DB to EDB of there current a,,et,+ dependin" upon the ma"nitude of the firm and the t#pe of indu,tr#& Ade4uate in6entor# i, e,,ential for the production ,ale, proce,, of an enterpri,e a, in,ufficient in6entor# hamper, production and fail, to "reat ,ufficient ,ale,& In6entorie, al,o pro6ide cu,hion hen there are plannin" error,& Further in6entor# bein" an in item or'in" capital lead, to

hich i, 4uite amenable to control+ optimi9ation of the increa,e in profit,&

Profit, can be achie6ed mainl# throu"h the rationali9ation ofin6entor#& It i, therefore+ 4uite natural that in6entor# occupie, the mo,t important place amon" current a,,et,

CU

*NT 2-,-2-T*S<
Current liabilitie, are tho,e liabilitie, hich are their inception, to be paid in

the ordinar# cour,e of bu,ine,,+ ithin a #ear out of current a,,et, or earnin" concern& (I))SPAL()E& (AN* O5ER!RAFT O$TSTNA!IN- EOPENSES

BILLS +AYABLE
Thi, i, current liabilit# hich ari,e, hen a firm ma'e, a credit purcha,e form the 6endor, or ,upplier,&

BAN1 !ER DRAFT"

Thi, al,o come, under the head of current liabilitie,& (an' o6erdraft can

,impl# be defined a, dra in" of amount in e:ce,, form the ban' a"ain,t the a6ailable balance, hich i, to be repaid ,hortl# ith intere,t&

UTSTANDIN5 E>+ENSES:
Thi, include, e:pen,e, out,tandin" for pa#ment and hich are to be meet in the near future&

AD*CUACY O+ WO K-N/ CA.-TA2

Working capital s?o>ld @e adeI>ate for t?e folloEing reasons! It protect, the bu,ine,, from the ad6er,e effect, of ,hrin'a"e in 6alue of current a,,et,&
o

the

It i, po,,ible to pa# all the current obli"ation, promptl# and to ta'e ad6anta"e of ca,h di,count,&

It en,ure, to "reater e:tent the maintenance of a compan#8, credit ,tandin" and pro6ide, for ,uch emer"encie, li'e ,tri'e, flood, etc&

It permit, the carr#in" of in6entorie, at a le6el that bu,ine,, to ,er6e ,ati,factor#&

ould

enable a

It enable, a compan# to e:tent factorable credit term, to cu,tomer,& It enable, a compan# to operate it, bu,ine,, more efficientl# become, there i, no dela# in obtainin" material, etc&+ bu,ine,, of credit difficultie,&

It enable, a bu,ine,, firm to ,moothl#&

ith ,tand in period, of depre,,ion

There ma# be operatin" lo,,e, or decrea,ed retained earnin",& There ma# be e:ce,,i6e non Noperatin" or e:traordinar# lo,,e,& The mana"ement ma# fail to obtain fund, from other ,ource, for purpo,e of e:pan,ion&

There ma# be an un i,e di6idend polic#& Current fund, ma# be in6e,ted in non1current a,,et,& The mana"ement ma# fail to accumulate fund, nece,,ar# for meetin" debenture on maturit#&

There ma# be increa,e in price nece,,itatin" bi""er in6e,tment, in in6entorie, and fi:ed a,,et,&

DAN/* S O+ -NAD*CUAT* WO K-N/ CA.-TA2!

o

It id not po,,ible for it utili9e production facilitie, full# for or'in" capital&

ant of

A compan# ma# not be able to ta'e ad6anta"e of ca,h di,count facilitie,&

The credit N orthine,, of compan# i, li'el# to be jeopardi9ed becau,e of li4uidit#&

A compan# ma# not be able to ta'e ad6anta"e, of profitable bu,ine,, opportunitie,&

The moderni9ation of e4uipment and e6en routine repair, and maintenance facilitie, ma# be difficult to admini,ter&

A compan#

ill not be able to pa# it, di6idend, becau,e of the non N

a6ailabilitie, of fund,&
o

A compan# cannot afford to increa,e it, credit ,ale, and ma# ha6e to re,trict it, acti6itie, to ca,h ,ale, onl#&

A compan# ma# ha6e to borro fund, at e:ce,,i6e rate of intere,t& It, lo li4uidit# ma# head to lo profitabilit# in the ,ame a# a, lo

profitabilit# lead, to lo li4uidit#&

o

)o li4uidit# ould po,iti6el# threaten the ,ol6enc# of the bu,ine,,& A compan# i, con,idered li4uid maturit#& It mu,t be here it i, not able to pa# it, deb, on

ind up ,ection ?>> of the companie, Act+ 2GDC+

upon it, inabilit# to pa# it, debt,&

-SSU*S -NWO K-N/ CA.-TA2 )ANA/*)*NT!

The financial mana"er mu,t determine le6el, and compo,ition of Current a,,et,& He mu,t ,ee that ri"ht re,ource, are tapped to finance current A,,et, and tho,e current liabilitie, are paid in time& There are man# a,pect, of or'in" capital mana"ement can be hich %a'e it an important function of financial mana"er& 2& Time .& In6e,tment

>& Criticall# and ?& -ro th&

TI$E
Wor'in" capital mana"ement re4uire, much of the financial %ana"er8, time&

IN!EST$ENT
Wor'in" capital mana"ement re4uire, a lar"e portion of total in6e,tment in a,,et,&

#RITI#ALLY
Wor'in" capital mana"ement ha, "reat ,i"nificance for all firm, but it I 6er# critical for ,mall firm,&

5R 0T<
The need for or'in" capital i, directl# related to the firm, "ro th&

CONC*.T O+ WO K-N/ CA.-TA2!

The follo in" are the t o main concept, of or'in" capital&
o o

-ro,, or'in" capital Net or'in" capital

5R SS 0 R1IN5 #A+ITAL"
In thi, form or'in" capital refer, needed for current a,,et,& The,e a,,et, can be con6erted in to ca,h ith in a ,hort period in "eneral ith in a #ear&

NET 0 R1IN5 #A+ITAL

It i, a,,ociated ith the e:ce,, of current a,,et, o6er current liabilitie, in other ord current a,,et,F current liabilitie,& Net or'in" capital can be po,iti6e or ne"ati6e& Sometime, current liabilitie, are more than current a,,et,+ i, 'no n a, ne"ati6e net or'in" capital&

+ACTO S D*T* )-N-N/ WO K-N/ CA.-TA2!

Nat,re of i-d,3try"
The compo,ition of an a,,et i, a function of the ,i9e of a bu,ine,, and the indu,tr# to hich it belon",& The nature of the a,,et, depend, on the nature of the

indu,tr# al,o li'e te:tile po er etc+ in6e,tment an a,,et 6arie, from indu,tr# to indu,tr#& Similarl# or'in" capital re4uirement al,o depend upon indu,tr#&

NATURE AND SIZE F BUSINESS"

Wor'in" capital re4uirement of a firm ba,icall# influenced b# the nature of bu,ine,, tradin" and financin" in,titution, ha6e a 6er# le,, in6e,tment in fi:ed a,,et, but re4uire more or'in" capital& Retail ,tore, mu,t carr# lar"e ,toc',& For

manufacturin" indu,tr# and for public utilit# concern, al,o the,e a,,et, mi: 6arie,& So automaticall# the capital need al,o 6er#& So or'in" capital re4uirement 6arie, ith

the nature of bu,ine,,& Similarl# ,i9e of bu,ine,, al,o affect, or'in" capital need,&

)ANU+ACTU -N/ .O2-CY

)an>fact>ring c0cle starts Eit? p>rc?ase of raE material and

Complete, ith the production of fini,hed "ood,& )on"er the manufacturin" c#cle+ lar"e ith the firm8, or'in" capital re4uirement&

BUSINESS FLU#TUATI NS
There ma# be ,ea,onal demand for product,& In tho,e ,ea,on, more capital i, needed to produce more and al,o to meet the demand of The compan# or'in"

the cu,tomer,&

ill al,o ma# face c#clical @(u,ine,, C#clicalA 6ariation& !urin" boom

period,+ compan# ha, to produce more to meet the demand, for thi, it need more mone# to in6e,t it fi:ed a,,et, and al,o in in6entor#+ debtor, etc& ,o re4uirement i, effected b# both of the,e factor,& or'in" capital

+R DU#TI N + LI#Y
The compan#8, production polic# al,o effect, the re4uirement, of the or'in" capital a compan# ma# adopt a ,tead# or con,tant production policie, or the# ma# manufacture more product, durin" particular ,ea,on& If the compan# i, producin" more number of product, i&e&+ more 6ariet# of product, hich ha6e more demand or'in"

accordin" to ,ea,on& So production polic# al,o effect, the re4uirement, of capital need&

FIR$S #REDIT + LI#Y

The firm8, credit polic# affect, the or'in" capital b# influencin" the boo'

debt,& The polic# ,hould be de,i"ned in ,uch a a# the credit ,hould be allo ed for a lon" period and proper follo up ,hould al,o be there other i,e a, e 'no more the mone# loc'ed up ith debt, more there are chan"e, for bad debt,& (oth rea,on,

increa,e the need of or'in" capital&

A;A-2A,-2-TY O+ C *D-T
The or'in" capital re4uirement of a firm are al,o effected b# credit term, ill need le,, or'in" capital if liberal credit term, are

"ranted b# it, creditor, firm

a6ailable to it& Similarl# credit facilit# a6ailable from the ban', al,o affect, the or'in" capital need& A firm+ hich can "et ban' finance ea,il# on fa6orable

condition+ ill operate ith le,, or'in" capital&

/ OWT8 AND *=.ANS-ON ACT-;-T-*S!

The or'in" capital need of the firm increa,e a, it flo , in term, of ,ale, or

fi:ed a,,et,& We can8t determine e:actl# the relation,hip bet een 6olume of ,ale, and or'in" capital need,& In practice current a,,et, ill ha6e to emplo# before "ro th

ta'e, place ,o or'in" capital need i, to be planned for a "ro in" firm 6er# carefull#& If the compan# i, "oin" to e:pan,ion it need, more or'in" capital&

+R FIT +LANNIN5 AND +R FIT A++R +RIATI N"

Firm, differ in their capacit# to "enerate profit from bu,ine,, operation& Thi, ma# be due to compan#8, monopol# po er or 4ualitati6e product or ma# other feature etc+& Or ma# be due to competition& If there i, a hi"her profit mar"in there hi"her contribution to ard, affect, the ill be

or'in" capital& Similarl# profit appropriation al,o ill be left from

or'in" capital& If more di6idend, are declared le,, amount

or'in" capital pool& So di6idend polic# and profit mar"in al,o effect, the

or'in" capital re4uirement,&

+RI#E LA!LE #<AN5ES

The increa,in" ,hift, in price le6el ma'e function, of the financial mana"er difficult& He ,hould anticipate the effect of price le6el chan"e, on re4uirement, of the firm& -enerall# rai,in" price le6el hi"her amount of or'in" capital

ill re4uire a firm to maintain

or'in" capital& Ho e6er+ if a compan# al,o re6i,e, the product,

price hen the,e chan"e, occur+ the effect on or'in" capital hi"h not i, 6er# much&

+ERATIN5 EFFI#IEN#Y
The operatin" efficienc# of the firm relate, toF the minimum utili9ation re,ource, at minimum co,t& The firm ill be effecti6el# contributin" to it, of

or'in"

capital if it i, efficient in controllin" operatin" co,t,& The u,e of impro6ed and pace of ca,h c#cle i, accelerated

or'in" capital i,

ith operatin" efficienc#& (etter

utili9ation of re,ource impro6e, profitabilit# and thu,+ help, in relea,in" the pre,,ure on or'in" capital&

INFLATI N
A, a re,ult of inflation+ ,i9e of or'in" capital i, increa,ed in order to ma'e it ea,ier for a firm to achie6e to better ca,h inflo & Other fact, influencin" the need of or'in" capital are technolo"# chan"e attitude of the mana"ement toF ta'e ri,' etc&+

T8* N**D +O WO K-N/ CA.-TA2!

The need for be o6er empha,i9ed amount of capital& Wor'in" capital mana"ement i, to mana"er the firm8, current a,,et, and current liabilitie, in ,uch a a# that ,ati,factor# le6el of or'in" capital i, or'in" capital toF run the da#1to1da# bu,ine,, acti6itie, cannot e ill hardl# find a bu,ine,, firm+ hich doe, not re4uire an#+ or'in"

or'in" capital& Indeed+ firm, differ in their re4uirement, for the

maintained I&e&+ it i, neither in ade4uate nor e:ce,,i6e& The current a,,et, ,hould be ,ufficient enou"h to co6er current liabilitie, in order to maintain a rea,onable ,afet# mar"in& %oreo6er+ different component, of the or'in" capital @,tructureA are bein"

properl# balanced& So a finance mana"er ,hould in6ol6e or'in" capital mana"ement policie, ,o a, to en,ure hi"her profitabilit#+ proper li4uidit# and ,ound ,tructural health of the or"& We 'no that a firm ,hould aim at ma:imum the ealth of it, ,hareholder,& In it, endea6or to do ,o+ a firm ,hould earn ,ufficient return from it, operation& Earnin" a ,tead# amount of profit re4uire ,ucce,,ful ,ale, acti6it#& The firm ha, toF in6e,t enou"h fund, in current a,,et, are need, becau,e ,ale, do not con6ert into ca,h in,tantaneou,l#& There i, al a#, an ,ale, into ca,h& 3operatin" c#cle7 in6ol6ed in the con6er,ion of

T*C8N-CU*S +O ASS*)*NT O+ WO K-N/

CA.-TA2 *CU- *D '8 E3ti4atio- of co4po-e-t3 of 6or.i-/ capital 4et9od3"
Since the or'in" capital i, the e:ce,, of current a,,et, o6er current liabilitie,+ or'in" capital re4uirement, can be made b# e,timatin" the or'in" capital e&"& in6entorie,+ account

an a,,e,,ment of

amount of different con,tituent, of recei6able+ ca,h+ account, pa#able etc&+

=8 +erce-t of 3ale3 4et9od"

Accordin" to thi, method+ on the ba,i, of pa,t e:perience bet een ,ale, and a"e, re4uirement,+ a rate can be determine for e,timatin" the or'in" capital

re4uirement in future& The ba,ic critici,m of thi, method i, that it pre,ume, a linear

relation,hip bet een ,ale, and

or'in" capital+

hich i, not true in all ca,e,+ and thi,

method i, not uni6er,all# acceptable&

)8 perati-/ cycle approac9"

The time bet een purcha,e of in6entor# item, @ra material or merchandi,eA and their con6er,ion into ca,h i, 'no n a, operatin" c#cle or The ,ucce,,i6e e6ent, into or'in" capital c#cle&

hich are t#picall# in6ol6ed in an operatin" c#cle are

in6e,ted in operation, are re1c#cled bac' into ca,h& The c#cle+ of cour,e+ ta'e, ,ome time to complete& The lon"er the period of thi, con6er,ion the lon"er i, operation c#cle& a ,tandard operatin" c#cle ma# be for an# time period but doe, not "enerall# e:ceed a financial #ear& Ob6iou,l#+ the ,horter the operatin" c#cle+ the lar"er ill be

the turno6er of fund, in6e,ted for 6ariou, purpo,e,& The channel, of the in6e,tment are called current a,,et,& Sometime, the a6ailable fund, ma# be in e:ce,, of the need, for in6e,tment in the,e a,,et,+ e&"& in6entor#+ recei6able, and minimum e,,ential ca,h balance& An# ,urplu, ma# be in6e,ted in "o6ernment ,ecuritie, rather than bein" retained a, idle ca,h balance&

+-/U * '<

perati-/ cycle

!E(TORS @Recei6ableA

FINISHE! CASH -OO!S

WOR* PRO-RESS

IN

RAW %ATERIA)

It 4ay 2e 2roadly cla33ified i-to fo,r 3ta/e3"

Ra material and ,tore, ,ta"e& Wor' in proce,, ,ta"e& Fini,hed "ood, ,ta"e&

Recei6able collection ,ta"e&

The duration of the operatin" c#cle for the purpo,e of e,timatin" the or'in" capital re4uirement, i, e4ui6alent to the ,um of the duration of each of the,e ,ta"e, be the credit period allo ed b# the ,upplie, of the firm&

Sy42olically, t9e directio- of 6or.i-/ capital cycle ca- 2e p,t a3:

OC J KWK+KD3C After computin" the period of one operatin" c#cle+ the total number of operatin" c#cle that can be completed durin" the #ear can be completed b# di6idin" 20/da#, ith the number of operatin" da#, in a c#cle& The total operation in a #ear ill "i6en a6era"e amount of

hen di6ided the number of operatin" c#cle in #ear or'in" capital re4uirement&

,*N*+-TS ON -N;*NTO Y )ANA/*)*NT!

In6entorie, enable firm, in the ,hort run to pro6ide at a rate of to ,ell at a rate "rater than production 6ice 6er,a&

Be-efit3 i- p,rc9a3i-/"
In the purcha,in" Ra material, "rater "ood, i, not tied to productionI,ale,& A firm can purcha,e lar"er 4uantitie, that are arranted b# u,a"e in production of the,e

,ale, le6el firm, can purcha,e "ood,+ before anticipated or announced price increa,e,&

Thi,

ill lead to a decline in the co,t of production& In6entor# ,er6ice, a, hed"e

a"ain,t price increa,e a, ell a, ,horta"e of ra material,&

Be-efit3 of prod,ctio-"
Fini,hed "ood, in6entor# ,er6e, to uncouple production and ,ale,&Thi,enable production at a rate different from that of ,ale,& That i, production can be carried on a hi"her or lo er than the ,ale, rate& In brief ,ince in6entor# permit, lead, co,t of production ,chedulin" production can be carried on more efficientl#&

Be-efit3 i- 3ale3"
The maintenance of in6entor# al,o help, a firm to enhance it, ,ale, effort,& A firm ill not be able to meet demand in,tantaneou,l#& There ill be a lar"e dependin" up on production proce,,& If firm ha, in6entor#+ actual ,ale, ill not ha6e to depend

on len"th# manufacturin" proce,,& A related a,pect i, thi, in6entor# ,er6e, a competiti6e mar'etin" tool+ to meet cu,tomer demand,& In6entor# en,ure, the continued patrona"e of cu,tomer,&

atios for eBol>tion of performance of inBentor0 management

Ratio, are the tool, for comparin" 6ariou, a,pect, in material term,+ hich

help, to a,,e,, the ,ituation or e6aluatin" the performance in the firm or department&

% 8I-ve-tory T,r-over ratio"

Thi, ratio i, compari,on bet een co,t of "ood, ,old to that of in6entor# turno6er ratio& Co,t of "ood, ,oldI in6entor#&

=8 I-ve-tory 9oldi-/ period"

Thi, Ratio+ hich #ield, the holdin" period, of in6entor# b# a firm& Thi, i,

,ho n a, IHPPITRI>CD&
If the ITO increa,e, the in6entor#1holdin" period decrea,e, re,ultin" in the reduction of carr#in" co,t a,,ociated ith the in6entor#& (ut the orderin" co,t ould increa,e& If the

in6entorie, turno6er ratio decrea,e, the in6entor# holdin" period increa,e, re,ultin" in the increa,e carr#in" co,t of in6entor#& (ut the orderin" co,t ould decrea,e& So+ ith the help

of abo6e mentioned ratio compari,on can be made ea,il# and e6aluate the performance of

in6entor#&

CHAPTER-5
Data anal0sis and interpretation

STAT*)*NT O+ C8AN/*S -N WO K-N/ CA.-TA2 O+ C+2 for t?e 0ear ended "##43"##&
-Rs .in lakhs.

.artic>lars (A(C>rrent Assets!3 2&In6entorie, .&Sundr# debtor, >&Ca,h J (an' ?&)oan, J Ad6ance, Total C>rrent Assets (,(C>rrent lia@ilities!3 Current liabilitie, Pro6i,ion, Total C>rrent 2ia@ilities Net or'in" capital @A1(A Chan"e in or'in" capital

"##&

"##%

-ncrease

Decrease

2C>D>&EG 2EC/0&G2 .00&?0 22CC?&C2 &$%'4.5H

./?D2&>. 2E../&D. 0>G&00 2?>/.&/E %"$'4.5H

?/GD&D> >00&>G ./?C&C/ .C>E&?C

>/G/E&?2 ./G2&DG 4"HHH.## 2DD2?&EG 2/D.0&?0 "<#&4."5

.C>2.&>? ?D0&20 "<55#.%" .C/?>&.E

?DGD&/E 2C>>&?2

2/D.0&?0

"<#&4."5

'"H<4.&5

'"H<4.&5

-nterpretation!
There ha, been an increa,e of or'in" capital b# R,& 2/D.0&?0 la'h, for the

#ear .//>1.//?& Where the increa,e occurred due to increa,e in in6entor# b# R, ?/GD&D> la'h,& The e:ce,, and to repa# claim, pendin"& or'in" capital, help to meet the bu,ine,, re4uirement,

STAT*)*NT O+ C8AN/*S -N WO K-N/ CA.-TA2 O+ C+2 for t?e 0ear ended "##%3"##< ( s. in lak?s(
.artic>lars (A(C>rrent Assets!3 2&In6entorie, .&Sundr# debtor, >&Ca,h J (an' ?&)oan, J Ad6ance, Total C>rrent Assets (,(C>rrent lia@ilities!3 Current liabilitie, Pro6i,ion, Total C>rrent 2ia@ilities Net or'in" capital (A3,( Chan"e in or'in" capital "<#&4."5 .C>2.&>? ?D0&20 "<55#.%" .C/?>&.E .>2CC&E2 D2D&>. "4<$".#4 ..G.>&/. >2./&.D "<#&4."5 >2./&.D '&&$#.H# '&&$#.H# >2?D&C> DE&2? ./?D2&>. 2E../&D. 0>G&00 2?>/.&/E %"$'4.5H 22D0C&E/ 2./22&E2 ?0G&DD ..D2E&/G &<<#%.#% 0.2D&/. 00C?&C. D./0&02 >D/&>> "##% "##< -ncrease Decrease

-nterpretation!
There ha, been decrea,e of or'in" capital b# R,& >2./&.D la'h, for the #ear

.//?1.//D& The decrea,e in the period .//? and .//D due to the hi"h decrea,e in in6entor# and ,undr# debtor,& The compan# their claim,& a, ,tru""led in the,e #ear, to repa#

STAT*)*NT O+ C8AN/*S -N WO K-N/ CA.-TA2 O+ C+2 for t?e 0ear ended "##<3"##5

.artic>lars (A(C>rrent Assets!3 2&In6entorie, .&Sundr# debtor, >&Ca,h J (an' ?&)oan, J Ad6ance, Total C>rrent Assets (,(C>rrent lia@ilities!3 Current liabilitie, Pro6i,ion, Total C>rrent 2ia@ilities Net or'in" capital (A3,( Chan"e in or'in" capital

"##<

"##5

-ncrease

Decrease

22D0C&E/ 2./22&E2 ?0G&DD ..D2E&/G &<<#%.#%

2G?GE&.0 2.EE.&C? D?.&22 ?.2C/&EG 5&H5".$"

EG2/&D0 EC/&G> D.&DC 2GC?>&E/

.>2CC&E2 D2D&>. "4<$".#4 ..G.>&/. .?EEE&CG &55##.5'

.C>?0&G2 G.>&./ "5"5".'' ?EE//&E2

>20.&./ ?/E&00

.?EEE&CG

&55##.5'

"$4<5.55

"$4<5.55

-nterpretation!
There ha, been an increa,e of or'in" capital b# R,& .?EEE&CG la'h, for the

#ear .//D1.//C& The increa,e in the abo6e period due to increa,e in a,,et, li'e loan, JAd6ance,& The e:ce,, re4uirement,& or'in" capital ha, been helpful to meet the compan#

STAT*)*NT O+ C8AN/*S -N WO K-N/ CA.-TA2 O+ C+2 for t?e 0ear ended "##53"##$
( s. -n lak?s(
.artic>lars (A(C>rrent Assets!3 2&In6entorie, .&Sundr# debtor, >&Ca,h J (an' ?&)oan, J Ad6ance, Total C>rrent Assets (,(C>rrent lia@ilities!3 Current liabilitie, Pro6i,ion, Total C>rrent 2ia@ilities Net or'in" capital (A3,( Chan"e in or'in" capital .C>?0&G2 G.>&./ "5"5".'' ?EE//&E2 02D>&G> %%$%&.<& %%$%&.<& H&%$.## H&%$.## .C.C.&20 202?&>G "$#5<.%5 DD0D?&C? 02D>&G> 0C&E> 0G2&2G 2G?GE&.0 2.EE.&C? D?.&22 ?.2C/&EG 5&H5".$" .2EC.&?/ 2.DDE&D. >??&>D ?G.CC&G? $4H4'."' E2/C&2D ..CD&2. .2D&2. 2GE&EC "##5 "##$ -ncrease Decrease

-nterpretation!
There ha, been an increa,e of or'in" capital b# R,& 02D>&G> la'h, for the

#ear .//C1.//E& Where the increa,e occurred due to increa,e in ,undr# loan, J Ad6ance,& The e:ce,, obli"ation,& or'in" capital help, to meet the compan# da# to da#

Statement of c?anges in Eorking capital of cfi for t?e 0ear ended "##$3"##H!
( s. -n lak?s(
.artic>lars (A(C>rrent Assets!3 2&In6entorie, .&Sundr# debtor, >&Ca,h J (an' ?&)oan, J Ad6ance, Total C>rrent Assets (,(C>rrent lia@ilities!3 Current liabilitie, Pro6i,ion, Total C>rrent 2ia@ilities Net or'in" capital (A3,( Chan"e in or'in" capital .C.C.&20 202?&>G "$#5<.%5 DD0D?&C? .>>C/&?0 5H"'%.'" 5H"'%.'" $''&&."5 $''&&."5 E>2GD&00 2/>CD&G2 $4%<'.5H EG.2D&2. .>>C/&?0 ?CG>>&E 0DD2&D. .2EC.&?/ 2.DDE&D. >??&>D ?G.CC&G? $4H4'."' 0C?0C&0> 2/.D0&GD CC>2&C? DG>GG&?G '<"55<.H' C.0E&.G 2/2>.&DD C?E.?&?> ..G0&DE "##$ "##H -ncrease Decrease

-nterpretation!
There ha, been an increa,e of or'in" capital b# R,& .>>C/&?0 la'h, for the

#ear .//E1.//0& Where the increa,e occurred due to increa,e in in6entorie, )oan, J Ad6ance,& The e:ce,, obli"ation,& or'in" capital help, to meet the compan# da# to da#

SO)* AT-OS .* TA-N-N/ TO WO K-N/ CA.-TA2!

2& C>rrent atio ". C>ick atio >& De@tors T>rnoBer atio &. -nBentor0 T>rnoBer atio %. Cas? atio C& Working Capital T>rnoBer atio

CU

*NT AT-O O+ CO O)AND*2 +* T-2-F* S 2-)-T*D1 +O T8* 2AST % Y*A S "##&3"##H

#,rre-t ratio? c,rre-t a33et3 @ c,rre-t lia2ilitie3

Lear

Current A,,et,

Current liabilitie,

Ratio

.//?1.//D

D.02>&EG

.CEE/&D.

2&GE

.//D1.//C

?CC/D&/D

.>C0.&/>

2&GE

.//C1.//E

E?GE.&0.

.E.E.&22

.&ED

.//E1.//0

0>G>2&.2

.0/EC&DE

.&GG

.//01.//G

2C.EEC&G2

0>DC2&EG

2&GD

,A D-A/ A) S8OW-N/ CU

*NT AT-O O+

CO O)ANDA2 +* T-2-F* S 2-)-T*D +O T8* 2AST %Y*A S "##&3"##H

CURRENT RATIO OF COROMANDEL FERTILIZERS LIMITED, FOR THE LAST 5 YEARS 2004-2009
180000 160000 140000 120000 100000 80000 60000 40000 20000 0 52813.79 26770.52 1.97 2004-2005 46605.05 23682.03 1.97 2005-2006 27272.11 2.75 2006-2007 28076.57 2.99 2007-2008 1.95 2008-2009 74972.82 83931.21 83561.79 Current Assets Current liabilities Ratio 162776.91

-nterpretation!
Thi, Ratio e:plain, the relation,hip bet een current a,,et, to current liabilitie,& E6en throu"h current ratio le6el, are increa,in" the# are not up to the ,tandard ratio of .<2&Where companie, our ratio, ith the,e indu,trial ,tandard,& (ut durin" .//C1.//E it, current ratio le6el, cro,,ed the ,tandard ratio hich indicate, that the companie,8 financial po,ition i, 6er# "ood&

CU-CK AT-O O+ CO O)AND*2 +* T-2-F* S 2-)-T*D1 +O T8* 2AST % Y*A S

C>ick Assets C>ick atio J 33333333333333333333333333 C>ick lia@ilities

Lear
.//?1.//D

Muic' A,,et,
>.>C.&?E

Muic' liabilitie,
.CEE/&D.

Ratio
2&.2

.//D1.//C

>D/20&>D

.>C0.&/>

2&?0

.//C1.//E

DD?ED&D?

.E.E.&22

.&/>

.//E1.//0

C.2C0&02

.0/EC&DE

.&.2

.//01.//G

EC.G/&/0

0>DC2&EG

/&G2

,A D-A/ A) S8OW-N/ CU-CK AT-O O+ CO O)ANDA2 +* T-2-F* S 2-)-T*D +O T8* 2AST % Y*A S "##&3"##H

QUICK RATIO OF COROMANDEL FERTILIZERS FOR THE LAST 5 YEARS

90000 80000 70000 60000 50000 35018.35 40000 32362.47 26770.52 23682.03 30000 20000 10000 0 1.21 2004-2005 1.48 2005-2006 27272.11 28076.57 55475.54 62168.81

LIMITED,

83561.79 76290.08

Quick Assets Quick liabilities Ratio

2.03 2006-2007

2.21 2007-2008

0.91 2008-2009

-nterpretation!
Thi, Ratio e:plain, the relation,hip bet een 4uic' A,,et, to current liabilitie,& Thi, Ratio i, al,o called )i4uidit# Ratio& Here+ 4uic' a,,et, mean all current a,,et, e:cept ,toc'+ prepaid e:pen,e,& The indu,trial ,tandard of thi, ratio 2< 2+ the abo6e or'in", ,ho , that the coromandel fertili9er, )imited& Muic' A,,et, polic# i, reached thi, ,tandard for the pa,t #ear,&

D*,TO S TU NO;* AT-O O+ CO O)AND*2 +* T-2-F* S 2-)-T*D1 +O T8* 2AST % Y*A S

"##&3"##H

Sales De@tors T>rnoBer atio J 3333333333333333333 De@tors

Lear Sale, !ebtor, Ratio

.//?1.//D

CD?20&2C

2E../&D.

>&0/

.//D1.//C

E0/C>&.D

2./22&E2

C&D/

.//C1.//E

G/D0E&?.

2.EE.&C?

E&/G

.//E1.//0

2/2C20&E0

2.DDE&D.

0&/G

.//01.//G

.2C0?D&>D

2/.D0&GD

.2&2>

,A D-A/ A) S8OW-N/ D*,TO S TU NO;* AT-O O+ CO O)ANDA2 +* T-2-F* S 2-)-T*D +O T8* 2AST % Y*A S "##&3"##H

DEBTORS TURNOVER RATIO OF COROMANDEL FERTILIZERS LIMITED, FOR THE LAST 5 YEARS 20042009
250000 200000 150000 100000 50000 0 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 65418.16 17220.52 78063.25 12011.71 90587.42 101618.78 Sales ebtors 216845.35

12772.64

12557.52

10258.95

-nterpretation!
Thi, Ratio ,ho , the participation of !ebtor, in Total ,ale,& The more of thi, ratio i, a ,i"n of "ood credit polic#& Accordin" to the abo6e table it i, true that the !ebtor, Turno6er Ratio i, ,ati,factor# le6el& In .//>1/? and it i, continuou,l# increa,ed& We can find a ,li"ht increa,ed in .//D1/C at E&/G and in .//C1/E at 0&/G and in .//E1/0 at .2&2>&It i, in 6er# "ood condition&

-N;*NTO Y TO WO K-N/ CA.-TA2 O+ CO O)AND*2 +* T-2-F* S 2-)-T*D1 +O T8* 2AST % Y*A S "##&3"##H -nBentor0 -nBentor0 to Working capital atio J 3333333333333333333 Working capital

Lear
.//?1.//D .//D1.//C .//C1.//E .//E1.//0 .//01.//G

In6entor#
./?D2&>. 22D0C&E/ 2G?GE&.0 .2EC.&?/ 0C?0C&0>

Wor'in" capital
.C/?>&.E ..G.>&/. ?EE//&G2 DD0D?&C? EG.2D&2.

Ratio
/&EG /&D/ /&?/ /&>G 2&/G

,A D-A/ A) S8OW-N/ -N;*NTO Y TO WO K-N/ CA.-TA2 AT-O O+ CO O)ANDA2 +* T-2-F* S 2-)-T*D +O T8* 2AST % Y*A S "##&3"##H

INVENTORY TOWORKING CA ITAL OF COROMANDEL FERTILIZERS LIMITED, FOR THE LAST 5 YEARS 2004-2009
100000 86486.83 90000 79215.12 80000 70000 55854.64 60000 47700.91 50000 40000 26043.27 22923.02 19497.28 30000 20451.32 21762.4 20000 11586.7 10000 0.79 0.5 0.4 0.39 1.09 0 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

!n"entor# $orkin% ca&ital Ratio

-nterpretation!
In order to a,,ertion, that there i, no o6er ,toc'in" the ratio of in6entor# to or'in" capital ,hould be calculated& Increa,e in 6olume of ,ale, re4uired increa,e in ,i9e of in6entor#& (ut a ,ound financial point of 6ie + in6entor# ,hould not e:ceed amount of or'in" capital& The de,irable ratio i, 2<2&

CAS8 AT-O O+ CO O)AND*2 +* T-2-F* S 2-)-T*D1 +O T8* 2AST % Y*A S Cas? Cas? atio J 3333333333333333333 C>rrent lia@ilities "##&3"##H

Lear
.//?1.//D

Ca,h
0>G&00

Current )iabilitie,
.CEE/&D.

Ratio
/&/>

.//D1.//C

?0G&DD

.>C0.&/>

/&/.

.//C1.//E

D?.&22

.E.E.&22

/&/.

.//E1.//0

>??&>D

.0/EC&DE

/&/2

.//01.//G

CC>2&C?

0>DC2&EG

/&/0

&

,A D-A/ A) S8OW-N/ CAS8 AT-O O+ CO O)ANDA2 +* T-2-F* S 2-)-T*D +O T8* 2AST % Y*A S "##&3"##H

90000 80000 70000 60000 50000 40000 30000 20000 10000 0 26770.52 23682.03 27272.11 28076.57

83561.79

Cas' Current (iabilities Ratio

6631.64 839.88 0.03 489.55 0.02 542.11 0.02 344.35 0.01 2004-2005 2005-2006 2006-2007 2007-2008 0.08 2008-2009

-nterpretation!
The ratio i, al,o called ab,olute li4uidit# ratio& Ho the compan# i,

maintainin" ca,h re,er6e, to meet their da# toda# obli"ation,+ re6ealed b# thi, ratio& Here ca,h mean,+ ca,h in hand and ca,h at ban'& The indu,trial ,tandard of thi, ratio i, /&D<2+ here a, in coromandel fertili9er, )imited the ,ituation i, 4uite different it did not reach the indu,trial ,tandard an# time for the pa,t D #ear, to utili9e ,ome additional benefited li'e ca,h di,count, etc+ the compan# i, needed to maintain ,ome more ca,h re,er6e,&

WO K-N/ CA.-TA2 TU NO;*

AT-O O+CO O)AND*2

+* T-2-F* S 2-)-T*D1 +O T8* 2AST % Y*A S "##&3"##H

Sales Working Capital T>rnoBer atio J 333333333333333333333333333 NetEorking capital

Lear
.//?1.//D

Sale,
CD?20&2C

Net or'in" capital

.C/?>&.E

Ratio
.&D2

.//D1.//C

E0/C>&.D

..G.>&/.

>&?2

.//C1.//E

G/D0E&?.

?EE//&G2

2&G/

.//E1.//0

2/2C20&E0

DD0D?&C?

2&0.

.//01.//G

.2C0?D&>D

EG.2D&2.

.&E?

,A D-A/ A) S8OW-N/ WO K-N/ CA.-TA2 TU NO;* AT-O O+ CO O)ANDA2 +* T-2-F* S 2-)-T*D +O T8* 2AST % Y*A S "##&3"##H

WORKING CA ITAL TURNOVER RATIO OF COROMANDEL FERTILIZERS LIMITED, FOR THE LAST 5 YEARS 2004-2009
250000 200000 150000 100000 50000 0 65418.16 26043.27 2.51 2004-2005 78063.25 22923.02 3.41 2005-2006 90587.42 47700.91 1.9 2006-2007 101618.78 79215.12 55854.64 1.82 2007-2008 2.74 2008-2009 Sales )et*orkin% ca&ital Ratio 216845.35

-nterpretation
The participation of or'in" capital in total ,ale, i, re6ealed b# thi, ratio& The ratio e:plain, the relation,hip bet een or'in" capital to total ,ale,& The actual ,ituation of coromandel fertili9er, )imited i, 6er# lo from la,t ? #ear,& In the #ear .//>1/? it i, .&D2+ later it increa,e >&?2 in .//?1/D+ later it decrea,ed 2&G/ in .//D1/C+ 2&0. in .//C1/E and .&E? in .//E1/0 hich i, lo amon" all D #ear,&

CHAPTER-6
+indings S>ggestions Concl>sion

+-ND-N/S
Coromandel fertili9er, )imited i, fla" Ship Compan# in ,outh India for producin" comple: fertili9er, e,peciall# !AP @!i1 Ammonia pho,phateA

With reference to the major part of the finance&

or'in" capital ,tud# of coromandel fertili9er, limited+

or'in" capital i, contributed b# ,hort term ,ource, of

It i, ,een that out of total current a,,et,+ in6entor# ,undr# debtor, occup# the major part of a,,et, con,umption&

A, the compan# i, maintainin" better arm, of li4uid current a,,et,+ the 4uic' ratio of compan# i, much ,ati,factor#&

Production the current #ear

a, at all time hi"h at 22&>D la'h tone, compared

to pre6iou, #ear+ recordin" a "ro th of 2/&0Bo6er the pre6iou, #ear&

The a6era"e output of the plant ha, increa,e to E. %T per hour a, a"ain,t to CD mt,& per hour in the pre6iou, #ear+ hich ha, achie6ed throu"h fine tunin"

of e4uipment are de1bottlenec'in" in certain area, of operation,&

The compan# achie6ed a net turno6er of R,&20//&D? corer+ includin" ,ub,id#+ for the #ear .//E1.//0+ repre,entin" a "ro th of 20&?CB o6er the pre6iou, #ear& The profit before ta: and profit after ta: increa,ed b# EC&GEB and 00&0DB re,pecti6el#& O6er the pre6iou, #ear& The EPS WAS R,&2D&?/ a, a"ain,t R,&0&2C in the pre6iou, #ear&

The compan# i, maintainin" ,ufficient ,toc' of in6entor# for ,mooth production proce,,& The ratio i, lo it i, "ood& in pre6iou, #ear+ but from la,t fi6e #ear,

CF) continued to operate the plant at *a'inada and ,tora"e in,tallation at 5i,ha'hapatnam& A, per the en6ironment ,tandard,I re"ulation, pre,cribed b# ,tatutor# authoritie,& CF) ha, been able to control "a,eou, emi,,ion, at *a'inada 5ST ell ithin the pre,cribed&

The mar'et ,hare of CF) !AP a, GBon all India ba,i, and E>Bin A&P The or'in" capital turno6er ratio ,ho , an a6era"e atio hen pre6iou, #ear&

So+ the compan# po,ition ith record to it, current obli"ation, i, ,ati,factor#& So+ o6erall performance ,ho , a increa,e in net the firm i,+ maintainin" a better po,ition in or'in" capital& Thi, ,ho , that

or'in" capital mana"ement& (ut+ it i,

better to increa,e the current a,,et, and to reduce the current liabilitie, or tr# to reduce the current&

SU//*ST-ONS
2& The compan# ,hould e:plore the po,,ibilitie, of financin" the incremental or'in" capital in firm of entit# hich ould reduce hea6# incidence of

intere,t and eliminate the e:tent po,,ible the firm8, intere,t obli"ation& .& It i, ad6i,able to increa,e current a,,et, and reduce co,t of current liabilitie, in order to increa,e it, profit& >& The firm ,hould reduce the co,t of production b# u,in" co,t control techni4ue, and ne in6e,tment& ?& The compan# ,hould e:plore the po,,ibilitie, of cheaper and permanent ,ource, of finance& technolo"# for production in order to increa,e return on

CONC2US-ON
In India econom# a"riculture i, the prime ,ector and it pla#, a dominant role& Nearl# E/B of the population depend, on a"riculture& A fertili9er, i, one of the e,,ential input, for production and it, u,a"e ha, been increa,in" "ro th rate in India& Coriander fertili9er, limited i, a fla",hip compan# in ,outh India and e,peciall# in Andhra Prade,h for the production of comple: fertili9er, !AP8,& The compan# ha, been maintainin" ,ufficient amount of or'in" capital in all the #ear,& The compan#8, o6erall performance i, 6er# "ood& It can increa,e it, ,ale, throu"h credit to face the competitor,& It i, maintainin" the minimum ,toc' le6el,& Finall# the o6erall performance of the compan# %ana"ement& ith re,pect of Wor'in" Capital orth tremendou,

(I()O-RAPHL ANNEO$RE

,-,2-O/ A.8Y

+inancial )anagement

3 -.). .ande0

+inancial )anagement 3 .rasanna C?andra +inancial )anagement 3 S?arma G />pta -ndian -nd>strial S>rBe01 "##& 3 T?e 8ind> Ann>al eports1 )agazines and Ot?er p>@lications 3 Coramandel +ertilizers

0e23ite3"
&cflindia&com &"oo"le&com

A URNALS"
+inancial eLpress ,>siness line

ANNEO$RES
,A2ANC*S8**T AS ON 4'ST )A C81 "##% of C.-.2 2td! @R, in la'h,A

.artic>lars
-. SOU C*S O+ +UNDS
2& Shareholder,8 fund, Share capital Re,er6e, J ,urplu, .& )oan Fund, Secured loan, $n,ecured loan,

Sc?ed>le 4'3#43"##%

( s. -n lak?s(

2 . > ?

>.//&// .G.>&2. 2G/?G&/2 CCC&CE "%$4$.$#

Total --. A..2-CAT-ON O+ +UNDS

2& Fi:ed A,,et,< -ro,, bloc' )e,,< depreciation Net bloc' Capital or' in pro"re,, .& in6e,tment, >&Current a,,et,+ )oan J Ad6ance,< In6entorie, Sundr# debtor,

./DEE&.? 2/0E.&?G H5#&.5%

C /&.E E H5#%.#" 0 ED>&ED G 2C>D>&EG 2/ 2EC/0&G2 22 .00C&?0 22CC?&C2 &$%'4.5H

Ca,h J (an' balance, )oan, J Ad6ance,

2. >/G/E&?2 ./G2&DG >.GGG&// '%%'&.5H 2.C?&20 2>G0&G? @2>?&ECA "%$4$.$#

2ess!
C>rrent 2ia@ilities G Pro6i,ion, Current )iabilitie, Pro6i,ion, Net current A,,et, !eferred Ta: A,,et, )e,,< !eferred Ta: )iabilit#

Total

,A2ANC* S8**T AS ON 4'ST )A C8 "##< of C.-.2 2td!

@R, in la'h,A

.artic>lars
-. SOU C*S O+ +UNDS
2& Shareholder,8 fund, Share capital Re,er6e, J ,urplu, .& )oan Fund, Secured loan, $n,ecured loan, >& differ Ta: )iabilit#

Sc?ed>le

4'3#43"##<

( s. -n lak?s(

2 . > ? 2>

>.//&// >C>0&?D .>/?C&D0 DCD>&>2 2EC/&>0 45"H$.$" D ./DCD&E. 22>0E&DD C 2. E 0 G 2/ H'5$.'5 2/&0C H'$H.#4 ED>&ED 2>2.&EE ./?D2&>. 2E../&D. 22 0>G&00 2?>/.&/E %"$'4.5H

Total --. A..2-CAT-ON O+ +UNDS

2& Fi:ed A,,et,< -ro,, bloc' )e,,< depreciation Net bloc' Capital or' in pro"re,, >& In6e,tment,

!iffered ta: a,,et

>& C>rrent assets1 2oan G AdBances!

In6entorie, Sundr# debtor,

Ca,h J (an' balance, )oan, J Ad6ance, .C>2.&>? ?D0&20 "<55#.%" .C/?>&.E 45"H$.$"

2ess!
C>rrent 2ia@ilities G .roBisions Current )iabilitie, Pro6i,ion, Net current A,,et,

Total

,A2ANC* S8**T AS ON 4'ST )A C8 "##5 of C.-.2 2td!

@R, in la'h,A

.artic>lars
-. SOU C*S O+ +UNDS
2& Shareholder,8 fund, Share capital Re,er6e, J ,urplu, .& )oan Fund, Secured loan, $n,ecured loan, >& !iffer Ta: )iabilit#

Sc?ed>le

4'3#43"##5

( s. -n lak?s(

2 . >

>.//&// ?G0.&0> $'$".$4 .2C?0&DG

? .EGD&0D 2> "&&&&.&& ...>&D? D 4&$%#.$' 2GCGD&EG C 22.D/&?E 2. $&&%.4" E 2>.&2> 0 $%55.&% G ..D>&ED 2/ 2/GC&DG 22 22D0C&E/ 2./22&E2

Total --. A..2-CAT-ON O+ +UNDS

2& Fi:ed A,,et,< -ro,, bloc' )e,,< depreciation Net bloc' Capital or' in pro"re,, .& In6e,tment, !iffered ta: a,,et

>& C>rrent assets1 2oan G AdBances!

In6entorie,

?0G&DD Sundr# debtor, ..D2E&/G

Ca,h J (an' balance, )oan, J Ad6ance,

&<<#%.#% .>2CC&E2

2ess!
C>rrent 2ia@ilities G .roBisions Current )iabilitie, Pro6i,ion, Net current A,,et,

D2D&>. "4<$".#4 ..G.>&/. 4&$%#.$'

Total

,A2ANC* S8**T AS ON 4'ST )A C8 "##$ of C.-.2 2td!

@R, in la'h,A

.artic>lars
-. SOU C*S O+ +UNDS
2& Shareholder,8 fund, Share capital Re,er6e, J ,urplu, .& )oan Fund, Secured loan, $n,ecured loan, >& !iffer Ta: )iabilit#

Sc?ed>le

4'3#43"##$

( s. -n lak?s(

2 . >

>.//&// C0C>&/E '##<4.#5 .D?GE&C. ? 2GD.E&0D 2> &%#"%.&5 2GE2&2C D %5#%H.5# 2GEGG&D0 C 22DC0&?. 2. $"4'.'< E .C.&.0 0 $&H4.&& G ED>&ED 2/ 222&0/ 22 2G?GE&.0 2.EE.&C?

Total --. A..2-CAT-ON O+ +UNDS

2& Fi:ed A,,et,< -ro,, bloc' )e,,< depreciation Net bloc' Capital or' in pro"re,, .& In6e,tment, !iffered ta: a,,et

>& C>rrent assets1 2oan G AdBances!

In6entorie, Sundr# debtor,

D?.&22 ?.2C/&EG

Ca,h J (an' balance, )oan, J Ad6ance,

5&H5".$" .C>?0&G2

2ess!
C>rrent 2ia@ilities G .roBisions Current )iabilitie, Pro6i,ion, Net current A,,et,

G.>&./ "5"5".'' ?EE//&E2 %5#%H.5#

Total

,A2ANC* S8**T AS ON 4'ST )A C81 "##H of C.-.2 ltd!

Sc?ed>le 4'3#43"##H

.artic>lars
-. SOU C*S O+ +UNDS
2

( s. -n lak?s(

2& Shareholder, fund,

Share capital Re,er6e, J ,urplu, .& )oan Fund, Secured loan, $n,ecured loan, >& !iffer ta: liabilit#

.EGE&G? . ECC?D&DC > ? 2. 5H&&4.%# D2..C&CD ?0GE/&0E '##'H5.%" D 0.?C&E2 '$5$$5.54 C 2> 22.DG.&G2

Total --. A..2-CAT-ON O+ +UNDS 2& Fi:ed A,,et,<

@after !ep J Add WIPA E .& In6e,tment, >& !iffer ta: a,,et, 0 G 2/

>D2>>&E2 1

?& C>rrent assets1 2oan G AdBances!

In6entorie, Sundr# debtor, Ca,h J (an' balance, )oan, J Ad6ance,

0C?0C&0> 2/.D0&GD

22

CC>2&C? DG>GG&?G '<"55<.H' E>2GD&00

2ess!

C>rrent 2ia@ilities G .roBisions Current )iabilitie, Pro6i,ion, Net current A,,et,

2/>CD&G2 $4%<'.5H EG.2D&2.

'$5$$5.54

Total