Funds Flow Statement

FUNDS FLOW STATEMENT
INTRODUCTION
The basic financial statements i.e., the Balance Sheet and Profit & Loss A/c or
Income Statement of business reveals the net effect of various transactions on
operational and financial position of the company. The balance sheet gives a
summary of the assets & liabilities of an undertaking at a particular point of time.
There are many transactions that take place in an undertaking and which do
not operate Profit & Loss A/c. Thus another statement has to be prepared to show
the change in Assets & Liabilities from the end of one period of time to the end of
another period of time. The statement is called a statement of changes in financial
position or a Funds Flow Statement.
The Funds Flow Statement is a statement which shown the movement of
funds and is a report of financial operations of business undertaking. In simple
words it is a statement of source and application of funds.
MEANING & CONCEPT OF FUNDS

The term Fund has been defined and interpreted differing by different
experts. Broadly the term fund refers to all the financial resource of the company on
the other extreme fund has been understood as cash only. The most acceptance
meaning of the fund is working capital.
Working Capital is excess of current assents over current liability. The
term fund has a variety of meaning.
A) CASH FUND OR NARROW SENSE
In a narrow sense, funds mean only cash. Cash flow statement portrays net
effect of various business transactions cash into account receipts & disbursement of
cash.
The concept of preparing funds from statement is not accepted, as there are
many such transactions that do not affect cash but represent the flow of fund.
For Ex:
Purchase of furniture on credit does not affect cash but there is flow of fund.
B) CAPITAL FUND (or) BROADER SENSE
Here funds means all financial resources used in business, whether in the
form of men, money, material, machine & others.
C). NET WORKING CAPITAL (or) POPULAR SENSE
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Networking capital means differences between current assets & liabilities. A

fund generally refers to cash or cash equipment or to working capital.
In any business we cannot under estimate the flow of funds from two
operations. The business runs with funds but the organization knows how to flow of
funds.
The Funds Flow Statement is concerned with sources and applications of
organization.
Statement of changes in working capital shows the increase or decrease in
the working capital.
Funds from Operations statement shows how much funds from operations.
Funds Flow Statement

In every concern, the funds flow in form different sources and similarly funds
are invested in various sources of investment. It is continuous process. The study
and control of this funds-flow process (i.e., the uses and sources of funds) is the
main objective of financial management to assess the soundness and the solvency
of the enterprise.
The funds-flow-statement is a report on financial operations changes, flow
or movements during the period. It is a statement which shows the sources an
application of funds or it shows how the activities of a business are financed in a
particulate period. In other words, such a statement shows how the financial
resources have been used during a particular period of time. It is, thus, a historical
statement showing sources and application of funds between the two dates
designed especially to analyses the changes in the financial conditions of an
enterprise. In the words of Fouke, it isA statement of Sources and Application of Funds is a technical device
designed to analyses the changes in the financial condition of business
enterprises between two dates.
Funds Flow Statement is not an income statement. Income statement shows
the items of income and expenditure of a particular period, but the Funds flow
statement is an operating statement as it summaries the financial activities for a
period of time. It covers all movements that involve an actual exchange of assets.
Various titles are used for this statement such as 'Statement of sources and
Application of Funds', 'Summary of Financial operations,' 'Changes in Financial
Position', 'Fund received and Disbursed', 'Funds Generated and Expended', Changes
in Working Capital, Statement of Fund' etc. Title of Funds Flow Statement has
been modified from time to time. Really it is very difficult to find a short time for
such statement which carries much to the readers regarding its contents and
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functions.
A new interpretation of the term 'funds, has now been adopted as to include
assets or financial resourceful which do not flow through the working capital
accounts. It seems to be the most suitable meaning fort the term 'funds' but the
most commonly used interpretation of the term 'funds' is 'working capital'
Distinction Between funds Flow Statement and Balance

Sheet
There is also a difference between meaning, purpose and importance of
Funds Flow Statement and Balance Sheet although both are prepared with the same
accounting data.
A summary of main points of differences between these two is give below:a) Balance sheet is a statement showing the financial position of the concern on
a particular date. The asset side portrays the development of resources in
various types of properties a liabilities side indicates the manner in which
these resources are obtained. It shows all assets and liabilities whether
current or fixed, tangible or intangible etc., while Funds Flow Statement
shows the changes in current assets an current liabilities during a particular
period of time.
b) Balance Sheet shows the total financial position on a particular date and in
this way, it is of a historical nature and therefore, its utility is very limited for
the management. On the other hand, Funds Flow Statement is a comparative
statement of assets and liabilities and depicts the changes in working capital
during the period of two Balance sheets.
c) Funds Flow Statement is an analysis and control device for the management.
Management can ensure the long term on the short term solvency of the firm
by studying the internal funds flow cycles. It is a modern technique of
knowing the inflows and outflows of funds during a particular period. Balance
Sheet represents the balance of various assets and liabilities and does not
present analysis of any kind.
d) There are two views of h financial position of the firm-long term a short-term.
Short-term financial position means the technical solvency of the firm in the
near future while on the other hand, long-term financial position means future
financial structure of the firm. Both are inter-relate but there is a differences
in their analysis. The short-term view of the financial position of the firm ca
not is had from the Balance Sheet.
Distinction between funds flow statement and cash flow

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statement
We have fully explained the meaning and importance of both the statementsFunds Flow a Cash Flow statements.
A distinction between these two statements may be briefed as under:(I) Funds Flow Statement am concerned with all items constituting funds
(Working Capital) for the business while Cash Flow Statement deals only with
cash transactions. In other words, a transaction affecting working capital
other than cash will affect Funds statement, and not the Cash Flow
Statement.
(ii) In Funds Flow Statement, net increase or decrease in working capital is
recorded while in Cash Flow Statement; individual item involving cash is
taken into account.
(iii) Funds Flow statement is started with the opening cash balance and
closed with the closing cash balance records only cash transactions.
(iv) Cash Flow Statement is started with the opening cash balance and
closed with ht closing cash balance while there a no opening or closing
balances in Funds Flow Statement.
A fund flow statement, better known as a cash flow statement, is an
important document in the accounting world. A fund flow statement shows a
company's inflows and outflows of funds. It is used to show investors, stakeholders
or owners where the company's money came from and where it went.
RULE
The flow of funds occurs when a transaction changes on one hand a noncurrent A/c and on the other a current A/c and Vice-versa. According to working
capital concept of funds the term Flow o Funds return to movement of funds in
working capital.
If any transaction results in increase in working capital.It is said to be a
source or inflow of funds and if it results in decrease of working capital, it is said
to be application or out flow of funds.
CURRENT ASSETS
Current Assets are those assets, which in the ordinary course of business can
be or will be converted into cash within a short period of normally one accounting
year.
CURRENT LIABILITIES
Current liabilities are those liabilities which are intended to be paid in
ordinary course of business with in short period of normally one accounting year out
of the current assets or the income of the business.
Differences between current liabilities & current assets

CURRENT LIABILITIES
CURRENT ASSETS
1. Bills Payable
1. Cash in Hand
2. Sundry Creditors
2. Cash at Bank
3. Accrued or O/s Expenses
3. Bills Receivable
4. Dividends Payable
4. Sundry Debtors or A/cs receivable
5. Bank Overdraft
5. Short term loans & advances
6. Short term loans, advances &

deposits
6. Short term investment
7. Provision for taxation.
7. Inventories or stock
8. Proposed Dividend
8. Prepaid Expenses
9. Accrued incomes.
MEANING & DEFINITION OF FUNDS FLOW STATEMENT

Funds Flow Statement is a method by which we study changes in the financial
position of business enterprise beginning & ending financial statement dates. It is a
statement showing sources & uses of funds for a period of time.
FOUIKE DEFINES
A statement of sources & application of funds is technical devices designed
to analyses the changes in the financial condition of business enterprise between
two dates
ANTHONY DEFINES
The Funds Flow Statement describes the sources from which additional
funds were derived and the use to which these sources were put.
NEED AND IMPORTENCE OF STUDY

Many business owners disregard the importance of Funds flow statements
because they unwittingly believe that their current financial standing can be
construed from other financial reports and projections. Unfortunately, however, a
Funds flow statement is necessary to adequately assess the incoming and outgoing
flow of Funds and other resources in a business.
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Not only will a business owner with a Funds flow system be more aware of his
or her financial standing, but it will also help investors to make educated decisions
on future investments. A business with regular and reliable Funds flow statements
shows more economic solvency, and is more attractive to investors.
A Funds flow statement documents the incoming and outgoing Funds in plain
terms. Future sales and sales made for credit (unless they have been paid off) are
not included in the funds flow statement, and most of the data will come from core
operations. Payables and receivables should be expressly defined, as should
depreciation of product value and inventory that has not yet been moved.
This will allow a business owner to compare past periods with the current
financial standing and determine whether your receivables have increased or
decreased.
This can also help to track your investments next to your receivables and
payables. Are your investments increasing or decreasing in value? And has your
inventory moved at a steady pace? New or expanding businesses can expect to see
a decrease in Funds flow, but this doesnt mean that the business is going under.
More stables businesses should see a steadily increase in Funds flow over a period
of several months or years.
There are typically five different sections in a Funds flow statement, though
large businesses might have more complex Funds flow systems as required.
OBJECTIVES OF THE STUDY

(a) To know the operational efficiency of Zuari cements Ltd
(b) To study & prepare Funds Flow Statements.
(c) To analyze the movement of funds between the dates of two balance
sheets in period of study 2010-2014.
(d) To identify the changes in the elements of focus and uses of working
capital in between above mentioned year.
(e) To improve the financial performance of the company.
RESEARCH METHODOLOGY
PRIMARY DATA
The present study is mainly based on primary and secondary sources of Data
collection. The primary data was directly collected by observations, Interviews
questionnaire etc.
SECONDARY DATA
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The secondary data was collected form already published sources such as
annual reports, returns and internal records.
THE DATA COLLECTION INCLUDES
a. Data collected from annual reports of Zuari cements Ltd.
b. Reference form textbooks relating to financial management.
RESEARCH TOOLS:
Tools of Analysis
Various statistical tools such as percentages averages were used to process
the date, of effectiveness of funds flow in organization & management in Zuari
cements Ltd.
Research Design:
Data Sources
Analytical Study
: Secondary Data
SCOPE OF THE STUDY

Financial analysis consists of ratio analysis and funds flow analysis. To know
funds flow from one to one, as the time available is very li8mite3d and the subjects
are very vast, the study is continued to overall financial condition of a firm. This
study is to know working capital increase or decrease funds from operation, sources
and application of funds of M/S Zara cements Ltd.
Financial analysis consists of funds flow analysis. To know funds flow from one
to one, as the time available is very limited and study is continued to overall
financial condition of a firm. The study to know working capital increase or
decrease, funds from operation, source and application of funds
LIMITATIONS OF THE STUDY:

The study is only pertaining to Zuari cements Ltd.
(a) The period of study is of 5 years and the performance evaluation is

also limited to 5 years.
(b) The study is purely based on the data available the form of annual
reports...
(c) Analysis is only means and not an end itself; different people interpret
the same analysis in different ways.
(d) The overall financial performance is taken into consideration without

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taking into account the minute values or individual values.
ORGANIZATION OF THE STUDY

Organization of the study deals with the arrangement of the entire study
Chapter-I:
It Deals with need and Importance, Object of the study and scope of the
study and also the methodology of the study and limitations of the study.
Chapter-II:
Present frame work regarding research design of the study
Explore a Study on funds flow Statement in Zuari cements Ltd, Hyderabad.
Chapter-III:
The profile of the company:
It explains the total process of organization and also the history including the
future in the organization
Chapter-IV:
Data Analysis and Interpretation:
It explains the total Practical analysis of our raw data given by the
organization with the help of formulas and theorys.
Chapter-V:
Highlight summary of findings and conclusions
INDUSTRY PROFILE
Cement industry in India
Introduction
The Indian cement industry is directly related to the country's infrastructure
sector and thus its growth is paramount in determining the development of the
country. With a current production capacity of around 366 million tons (MT), India is
the second largest producer of cement in the world and fueled by growth in the
infrastructure sector, the capacity is expected to increase to around 550 MT by
FY20.
India has a lot of potential for development in the infrastructure and
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construction sector and the cement sector is expected to largely benefit from it.
Some of the recent major government initiatives such as development of 100 smart
cities are expected to provide a major boost to the sector.
Expecting such developments in the country and aided by suitable
government foreign policies, several foreign players such as the likes of Lafarge,
Holmic and Vicar have invested in the country in the recent past. Another factor
which aids the growth of this sector is the ready availability of the raw materials for
making cement, such as limestone and coal.
Market Size
According to data released by the Department of Industrial Policy and
Promotion (DIPP), cement and gypsum products attracted foreign direct investment
(FDI) worth US$ 2,984.29 million between April 2000 and September 2014.
In India, the housing sector is the biggest demand driver of cement,
accounting for about 67 per cent of the total consumption. The other major
consumers of cement include infrastructure at 13 per cent, commercial construction
at 11 per cent and industrial construction at nine per cent.
To meet the rise in demand, cement companies are expected to add 56 MT
capacities over the next three years. The cement capacity in India may register a
growth of eight per cent by next year end to 395 MT from the current level of 366
MT. It may increase further to 421 MT by the end of 2017. The country's per capita
consumption stands at around 190 kg.
A total of 188 large cement plants together account for 97 per cent of the
total installed capacity in the country, while 365 small plants account for the rest.
Of these large cement plants, 77 are located in the states of Andhra Pradesh,
Rajasthan and Tamil Nadu. The Indian cement industry is dominated by a few
companies. The top 20 cement companies account for almost 70 per cent of the
total cement production of the country.
Investments
On the back of growing demands, due to increased construction and
infrastructural activities, the cement sector in India has seen many investments and
developments in recent times. Some of them are as follows:
Lafarge and Holmic plans to request for the European Commission's approval
for their possible merger. The two companies had earlier unveiled plans in
April 2014 to create the world's biggest cement group with US$ 44 billion in
yearly sales.
JSW cement plans to enter the Kerala market to cash in on the construction
frenzy in the state. JSW is presently building three million tons per annum
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(MTPA) capacity plant at Chitrapur in Karnataka to add to the current 5.4

MTPA capacity in South India.
Zuari Cement through its subsidiary Gulbarga Cement Limited (GCL) plans to
set up a 3.23 MT cement plant in Gulbarga, Karnataka. The company along
with the cement plant is setting up a 50 MW captive power plant in the
region.
Malabar Cements plans to set up an automated cement handling and bagging

unit as well as raw materials import facility in the Kochi port. Malabar
Cements has projected a minimum throughput of 300,000 tons per annum
which can be extendable up to 600,000 tons per annum, apart from
intermediate products and raw materials such as clinker, limestone and coal.
Reliance Cement Company (RCC), a subsidiary of Reliance Infrastructure, has

entered into the cement market of Bihar where the demand for the building
material is on the rise due to a realty boom. RCC presently has plants with
total installed capacity of 5.8 MTPA.
Government Initiatives
In the 12th Five-year Plan, the government plans to increase investment in
infrastructure to the tune of US$ 1 trillion and increase the industry's capacity to
150 MT.
The Cement Corporation of India (CCI) was incorporated by the Government of
India in 1965 to achieve self-sufficiency in cement production in the country.
Currently, CCI has 10 units spread over eight states in India.
In order to help the private sector companies thrive in the industry, the
government has been approving their investment schemes. Some such initiatives
by the government in the recent past are as follows:
The Andhra Pradesh State Investment Promotion Board (SIPB) has approved
proposals worth Rs 9,200 core (US$ 1.48 billion) including three cement
plants and concessions to Hero Monocarp project. The total capacity of these
three cement plants is likely to be about 12 MT per annum and the plants are
expected to generate employment for nearly 4,000 people directly and a few
thousands more indirectly.
India has joined hands with Switzerland to reduce energy consumption and
develop newer methods in the country for more efficient cement production,
which will help India meet its rising demand for cement in the infrastructure
sector.
The Government of India has decided to adopt cement instead of bitumen for
the construction of all new road projects on the grounds that cement is more
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durable and cheaper to maintain than bitumen in the long run.

Road Ahead
With the Government of India providing a boost to the infrastructure and
various housing projects coming up in urban as well as rural areas, the cement
sector has enough scope for development in the future.
Market Size
The Indian cement sector is expected to witness positive growth in the
coming years, with demand set to increase at a CAGR of more than 8 per cent in the
period FY 2013-14 to FY 2015-16, according to the latest report titled Indian
Cement Industry Outlook 2016 by market research consulting firm RNCOS. The
report further observed that Indias southern region is creating the maximum
demand for cement, which is expected to increase more in future.
The cement and gypsum products sector has attracted foreign direct
investments (FDI) worth US$ 2,656.29 million in the period April 2000August 2013,
according to data published by the Department of Industrial Policy and Promotion
(DIPP).
Investments
Prism Cement Ltd has become the first Indian company to get the Quality
Council of India's (QCI) certification for its ready-mix concrete (RMC) plant in
Kochi, Kerala. The company received the certification from Institute for
Certification and Quality Mark (ICQM), a leading Italian certification body
authorized to oversee QCI compliance.
UltraTech Cement, an Adyta Birla Group Company, has acquired the 4.8
million tons per annum (MTPA) Gujarat unit of Jayvee Cement Corp for Rs
3,800 core (US$ 595.61 million).
ACC Ltd plans to invest Rs 3,000 core (US$ 470.22 million) to expand its
capacity by nearly 4 MT a year in three eastern region states, over the next
three years.
Reliance Cements Co Put Ltd will set up a 3 MTPA grinding unit at an

estimated cost of Rs 600 crore (US$ 94.04 million). The unit is likely to come
up at Raghunathpur in Perugia, West Bengal.
Reliance Cement Co, a special purpose vehicle (SPV) of Reliance

Infrastructure Ltd, is commissioning its first 5 MTPA plant in Madhya Pradesh.
The project has been implemented at a cost of approximately Rs 3,000 crore
(US$ 470.22 million).
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Zuari Cement plans to set up a cement grinding unit at Audi (Amerada) and
Shingadgaon villages in Sholapur, Maharashtra. The new unit will have a
production capacity of 1 MTPA and is expected to be operational by the
second quarter of 2015.
JSW Steel has acquired Heidelberg Cement India's 0.6 MTPA cement grinding
facility in Raged, Maharashtra, for an undisclosed amount.
Government Initiatives
Giving impetus to the market, the Indian government plans to roll out publicprivate partnership (PPP) projects worth Rs 1 trillion (US$ 15.67 billion) over the
next six months. The Principal Secretary in the Prime Minister's Office (PMO) will
monitor these projects.
Also, the steering group appointed by Dr Man Mohan Singh, Prime Minister of
India, to accelerate infrastructure investments, has set deadlines for the awarding
of projects such as Mumbai rail corridor and Navy Mumbai Airport, among others.
The Goa State Pollution Control Board (GSPCB) has signed a memorandum of
understanding (Moue) with Vasavdatta Cement, a company with its plant in
Karnataka. The firm would use the plastic waste collected by the state agencies and
village panchayats from Goa as fuel for its manufacturing plant.
Road Ahead
The globally-competitive cement industry in India continues to witness
positive trends such as cost control, continuous technology up gradation and
increased construction activities.
Furthermore, major cement manufacturers in India are progressively using
other alternatives such as bioenergy as fuel for their kilns. This is not only helping to
bring down production costs of cement companies, but is also proving effective in
reducing emissions.
With the ever-increasing industrial activities, real estate, construction and
infrastructure, in addition to the various Special Economic Zones (SEZs) being
developed across the country, there is a demand for cement.
It is estimated that the country requires about US$ 1 trillion in the period FY
2012-13 to FY 2016-17 to fund infrastructure such as ports, airports and highways
to boost growth, which promises a good scope for the cement industry.
The 4th Annual India Cement Sector Business Sentiment Survey is nearly out
and the India Construction & Building Materials Journal provides the opportunity of
an exclusive look at the surveys results before their sharing with the wider
audiences. We are glad to be able to present here some of the survey highlights and
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provide our readers with before-hand data regarding the views and expectations of
cement industry professionals.
Continues to be the name of the game for the Indian cement industry a
function of long-term trends as well as human nature. But on a closer look, the
survey shows that the optimism only runs skin deep and that it has already been
eroded by an increasing percentage of industry members who feel dissatisfied with
the overall performance of the field last year.
For instance, the percentage of those who believe the industry performed
well dropped from 43 percent in 2012 to 26 percent in 2013, while the number of
respondents who believe the industry performed poorly almost tripled from 8
percent last year to 22 percent in 2013. Regarding the future evolution of the
industry, survey participants continue to be on the optimistic side and hope for a
somewhat better or much better performance compared to the last 6 months.
China tackles pollution and overcapacity

2013 has been the year that China's central planners took action against
cement production overcapacity and pollution. Consolidation plans for the industry
followed falling profits for cement producers in 2012. However, record air pollution
levels in Beijing in early 2013 shut the city down, raised public awareness and gave
the government a strong lever to encourage further industry consolidation through
environmental controls. By the middle of year profits of major producers were up
but production was also up. Finally in December 2013, China started to launch its
emissions trading schemes (ETS), led by Guangdong province, to create what will be
the second largest carbon market in the world after the EU ETS.
India faces a sticky wicket
Meanwhile, the world's second largest cement producing country has faced
poor profits and growth for cement producers blamed on paltry demand, piddling
prices and proliferating production costs. Compounding that, the Indian Rupee fell to
a historic low relative to the US Dollar in mid-2013, further putting pressure on input
costs. Holcim reacted to all of this by releasing plans to simplify its presence in the
country between Holmic India, Abuja and ACC.
Sub-Saharan Africa draws up the battle lines
Competition in sub-Saharan Africa is set to intensify when Nigeria's Denote
Cement opens its first cement plant in South Africa in early 2014. It is the first time
Africa's two largest cement producers, Denote and South Africa's PPC, will produce
cement in the same country. Future clashes will follow across the region as each
producer increasingly advances toward the other.
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The Kingdom needs cement... and workers

Saudi Arabian infrastructure demands have created all sorts of reverberations
across the Middle Eastern cement industry and beyond as the nation pushes on to
build its six 'economic' cities amongst other projects. Back in April 2013 King
Abdullah bin Abdul-Aziz Al Saud of Saudi Arabia issued an edict ordering the import
of 10Mt of cement. Then some producers started to report production line
shutdowns in the autumn of 2013 as they buckled under the pressure, although
they consoled themselves with solid profit rises. Now, cement sales have fallen
following a government crackdown on migrant workers that has hit the construction
sector.
Competition concerns in Europe
Europe may be slowly emerging from the economic gloom but anti-trust
regulators have remained vigilant. An asset swap between CEMEX and Holmic over
units in the Czech Republic, Germany and Spain has received attention from the
European Commission. In the UK the Competition Commission has decreed that
further action is required for the cement sector following the creation of new player
Hope Construction Materials in 2012. Lafarge Tarmac may now have to sell another
one of its UK cement plants to increase more competition into the market.
Elsewhere in Europe, Belgium regulators took action in September 2013 and this
week we report on Polish action against cartel-like activity.
Don't forget South-East Asia, Brazil or Russia!
Growth continues to dominate these regions and major sporting tournaments
are on the way in Brazil and Russia, further adding to local cement demand.
Votorantim may have cancelled its US$4.8bn initial public offering in August 2013
but it is still has the highest cement production capacity in Brazil. Finally, Indonesia
may not have had any 'marquee' style story to sum up 2013 but it continues to
regularly announce cement plant builds. In July 2013 the Indonesian Cement
Association announced that cement sales growth had fallen to 'just' 7.5% for the
first half of 2013.
In the most general sense of the word, cement is a binder, a substance which
sets and hardens independently, and can bind other materials together. The word
"cement" traces to the Romans, who used the term "opus caementicium" to
describe masonry which resembled concrete and was made from crushed rock with
burnt lime as binder. The volcanic ash and pulverized brick additives which were
added to the burnt lime to obtain a hydraulic binder were later referred to as
cementum, cemented, cement and cement. Cements used in construction are
characterized as hydraulic or non-hydraulic.
The most important use of cement is the production of mortar and concrete
the bonding of natural or artificial aggregates to form a strong building material
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which is durable in the face of normal environmental effects.

Concrete should not be confused with cement because the term cement
refers only to the dry powder substance used to bind the aggregate materials of
concrete. Upon the addition of water and/or additives the cement mixture is referred
to as concrete, especially if aggregates have been added.
It is uncertain where it was first discovered that a combination of hydrated
non-hydraulic lime and a pozzolan produces a hydraulic mixture (see also:
Pozzolanic reaction), but concrete made from such mixtures was first used on a
large scale by engineers. They used both natural pozzolans (tress or pumice) and
artificial pozzolans (ground brick or pottery) in these concretes. Many excellent
examples of structures made from these concretes are still standing, notably the
huge monolithic dome of the Pantheon in Rome and the massive Baths of Caracalla.
The vast system of Roman aqueducts also made extensive use of hydraulic cement.
The use of structural concrete disappeared in medieval Europe, although weak
pozzolanic concretes continued to be used as a core fill in stone walls and columns.
Modern cement
Modern hydraulic cements began to be developed from the start of the
Industrial Revolution (around 1800), driven by three main needs:
Hydraulic renders for finishing brick buildings in wet climates
Hydraulic mortars for masonry construction of harbor works etc, in contact with sea
water.
Development of strong concretes.
In Britain particularly, good quality building stone became ever more
expensive during a period of rapid growth, and it became a common practice to
construct prestige buildings from the new industrial bricks, and to finish them with a
stucco to imitate stone. Hydraulic lines were favored for this, but the need for a fast
set time encouraged the development of new cements. Most famous was Parker's
"Roman cement." This was developed by James Parker in the 1780s, and finally
patented in 1796. It was, in fact, nothing like any material used by the Romans, but
wasNatural cement" made by burning sectarian - nodules that are found in certain
clay deposits, and that contain both clay minerals and calcium carbonate. The burnt
nodules were ground to a fine powder. This product, made into a mortar with sand,
set in 515 minutes. The success of "Roman Cement" led other manufacturers to
develop rival products by burning artificial mixtures of clay and chalk.
John Seaton made an important contribution to the development of cements
when he was planning the construction of the third Eddy stone Lighthouse (1755-9)
in the English Channel. He needed a hydraulic mortar that would set and develop
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some strength in the twelve hour period between successive high tides. He
performed an exhaustive market research on the available hydraulic lines, visiting
their production sites, and noted that the "hydraulicity" of the lime was directly
related to the clay content of the limestone from which it was made. Seaton was a
civil engineer by profession, and took the idea no further. Apparently unaware of
Seatons work, the same principle was identified by Louis Vicar in the first decade of
the nineteenth century. Vicar went on to devise a method of combining chalk and
clay into an intimate mixture, and, burning this, producedartificial cement" in 1817.
James Frost, working in Britain, produced what he called "British cement" in a similar
manner around the same time, but did not obtain a patent until 1822. In 1824,
Joseph Aspin patented a similar material, which he called Portland cement, because
the render made from it was in color similar to the prestigious Portland stone.
All the above products could not compete with lime/pozzolan concretes
because of fast-setting (giving insufficient time for placement) and low early
strengths (requiring a delay of many weeks before formwork could be removed).
Hydraulic lines, "natural" cements and "artificial" cements all rely upon their belie
content for strength development. Belie develops strength slowly. Because they
were burned at temperatures below 1250 C, they contained no elite, which is
responsible for early strength in modern cements. The first cement to consistently
contain elite was made by Joseph Aspins son William in the early 1840s. This was
what we call today "modern" Portland cement. Because of the air of mystery with
which William Aspin surrounded his product, others (e.g. Vicar and I C Johnson) have
claimed precedence in this invention, but recent analysis of both his concrete and
raw cement have shown that William Aspins product made at North fleet, Kent was
a true elite-based cement. However, Aspins methods were "rule-of-thumb": Vicar is
responsible for establishing the chemical basis of these cements, and Johnson
established the importance of sintering the mix in the kiln.
William Aspins innovation was counter-intuitive for manufacturers of
"artificial cements", because they required more lime in the mix (a problem for his
father), because they required a much higher kiln temperature (and therefore more
fuel) and because the resulting clinker was very hard and rapidly wore down the
millstones which were the only available grinding technology of the time.
Manufacturing costs were therefore considerably higher, but the product set
reasonably slowly and developed strength quickly, thus opening up a market for use
in concrete. The use of concrete in construction grew rapidly from 1850 onwards,
and was soon the dominant use for cements. Thus Portland cement began its
predominant role. It is made from water and sand
Types of modern cement
Portland cement
Cement is made by heating limestone (calcium carbonate), with small
17
quantities of other materials (such as clay) to 1450C in a kiln, in a process known

as calcinations, whereby a molecule of carbon dioxide is liberated from the calcium
carbonate to form calcium oxide, or lime, which is then blended with the other
materials that have been included in the mix . The resulting hard substance, called
'clinker', is then ground with a small amount of gypsum into a powder to make
'Ordinary Portland Cement', the most commonly used type of cement (often referred
to as OPC).
Portland cement is a basic ingredient of concrete, mortar and most nonspecialty grout. The most common use for Portland cement is in the production of
concrete. Concrete is a composite material consisting of aggregate (gravel and
sand), cement, and water. As a construction material, concrete can be cast in
almost any shape desired, and once hardened, can become a structural (load
bearing) element. Portland cement may be gray or white.
Portland cement blends
These are often available as inter-ground mixtures from cement
manufacturers, but similar formulations are often also mixed from the ground
components at the concrete mixing plant.
Portland blast furnace cement contains up to 70% ground granulated blast
furnace slag, with the rest Portland clinker and a little gypsum. All compositions
produce high ultimate strength, but as slag content is increased, early strength is
reduced, while sulfate resistance increases and heat evolution diminishes. Used as
an economic alternative to Portland sulfate-resisting and low-heat cements.
Portland flash cement contains up to 30% fly ash. The fly ash is pozzolanic, so
that ultimate strength is maintained. Because fly ash addition allows lower concrete
water content, early strength can also be maintained. Where good quality cheap fly
ash is available, this can be an economic alternative to ordinary Portland cement.
Portland pozzolan cement includes fly ash cement, since fly ash is a pozzolan,
but also includes cements made from other natural or artificial pozzolans. In
countries where volcanic ashes are available (e.g. Italy, Chile, Mexico, and the
Philippines) these cements are often the most common form in use.
Portland silica fumes cement. Addition of silica fume can yield exceptionally high
strengths, and cements containing 5-20% silica fume are occasionally produced.
However, silica fume is more usually added to Portland cement at the concrete
mixer.
Masonry cements are used for preparing bricklaying mortars and stuccos, and
must not be used in concrete. They are usually complex proprietary formulations
containing Portland clinker and a number of other ingredients that may include
limestone, hydrated lime, air entertainers, retarders, water proofers and coloring
18
agents. They are formulated to yield workable mortars that allow rapid and
consistent masonry work. Subtle variations of Masonry cement in the US are Plastic
Cements and Stucco Cements. These are designed to produce controlled bond with
masonry blocks.
Expansive cements contain, in addition to Portland clinker, expansive clinkers
(usually sulfoaluminate clinkers), and are designed to offset the effects of drying
shrinkage that is normally encountered with hydraulic cements. This allows large
floor slabs (up to 60 m square) to be prepared without contraction joints.
White blended cements may be made using white clinker and white
supplementary materials such as high-purity met kaolin.
Colored cements are used for decorative purposes. In some standards, the
addition of pigments to produce "colored Portland cement" is allowed. In other
standards (e.g. ASTM), pigments are not allowed constituents of Portland cement,
and colored cements are sold as "blended hydraulic cements".
Very finely ground cements are made from mixtures of cement with sand or with
slag or other pozzolan type minerals which are extremely finely ground together.
Such cements can have the same physical characteristics as normal cement but
with 50% less cement particularly due to their increased surface area for the
chemical reaction. Even with intensive grinding they can use up to 50% less energy
to fabricate than ordinary Portland cements.
Non-Portland hydraulic cements
Pozzuoli-lime cements. Mixtures of ground pozzolan and lime are the cements
used by the Romans, and are to be found in Roman structures still standing (e.g. the
Pantheon in Rome). They develop strength slowly, but their ultimate strength can be
very high. The hydration products that produce strength are essentially the same as
those produced by Portland cement.
Slag-lime cements. Ground granulated blast furnace slag is not hydraulic on its
own, but is "activated" by addition of alkalis, most economically using lime. They
are similar to pozzolan lime cements in their properties. Only granulated slag (i.e.
water-quenched, glassy slag) is effective as a cement component.
Super sulfated cements. These contain about 80% ground granulated blast
furnace slag, 15% gypsum or anhydrite and a little Portland clinker or lime as an
activator. They produce strength by formation of ettringite, with strength growth
similar to a slow Portland cement. They exhibit good resistance to aggressive
agents, including sulfate.
Calcium aluminates cements are hydraulic cements made primarily from
limestone and bauxite. The active ingredients are monocalcium aluminates CaAl 2O4
19
(CA Al2O3 or CA in Cement chemist notation, CCN) and magenta Ca12Al14O33 (12 CA
7 Al2O3, or C12A7 in CCN). Strength forms by hydration to calcium aluminates
hydrates. They are well-adapted for use in refractory (high-temperature resistant)
concretes, e.g. for furnace linings.
Calcium sulfoaluminate cements are made from clinkers that include ye'elimite
(Ca4 (AlO2)6SO4 or C4A3 in Cement chemist's notation) as a primary phase. They are
used in expansive cements, in ultra-high early strength cements, and in "lowenergy" cements. Hydration produces ettringite, and specialized physical properties
(such as expansion or rapid reaction) are obtained by adjustment of the availability
of calcium and sulfate ions. Their use as a low-energy alternative to Portland
cement has been pioneered in China, where several million tons per year are
produced. Energy requirements are lower because of the lower kiln temperatures
required for reaction, and the lower amount of limestone (which must be
endothermic ally decarbonizes) in the mix. In addition, the lower limestone content
and lower fuel consumption leads to a CO 2 emission around half that associated
with Portland clinker. However, SO2 emissions are usually significantly higher.
"Natural" Cements correspond to certain cements of the pre-Portland era,
produced by burning argillaceous limestone at moderate temperatures. The level of
clay components in the limestone (around 30-35%) is such that large amounts of
belie (the low-early strength, high-late strength mineral in Portland cement) are
formed without the formation of excessive amounts of free lime. As with any natural
material, such cements have highly variable properties.
Geopolymer cements are made from mixtures of water-soluble alkali metal
silicates and aluminosilicate mineral powders such as fly ash and met kaolin.
20
COMPANY PROFILE
Italcementi Group History

Founded in 1864, Italcementi was quoted for the first time on the stock
markets, at the Milan Stock Exchange, in 1925, under the name of Societal
Bergamasca per la Fabrication del Cement e Della Calve Idraulica and has been
operating since 1927 under the name of Italcementi Spa.
Zuari Cement is part of the Italcementi Group, the fifth largest cement
producer in the world and the biggest in the Mediterranean region. With net sales
over 6 billion Euros in 2009 and a capacity of 70 million tones. Italcementi Group
combines the expertise, know-how and culture of a number of companies from more
than 22 countries in 4 continents. This includes an industrial network of 63 cement
plants, 15 grinding centers, 5 terminals, 134 aggregates quarries and 613 concrete
batching units. In India, with its inherent strengths, Italcementi Group's Zuari
Cement is committed to give the building industry cement that is truly
international.
A commitment to customer satisfaction has seen Zuari Cement grow from
a modest 0.5 million ton capacity in 1995 to 3.5 million ton today. Zuari Cement is in
the process of increasing this capacity to 6 million ton by 2009 through setting up of
a new 5500 ton per day clinker line at Yerraguntla and a grinding center at Chennai.
A captive power plant with a capacity of 43 MW has already been set up at the
Company's cement manufacturing facility at Sitapuram.
With a 6% market share in the south Indian cement market and sales of
about Euro 188 million in 2009, Zuari Cement has chalked out ambitious plans for
the future. This includes strengthening its presence in the Maharashtra, Orissa and
West Bengal markets. While technology is just one of its strengths, there are many
other factors that contribute equally to Zuari's success. These include a high-level
organization and decentralized quality assurance teams to guarantee the full
compliance with the customers' expectations.
Our History
Strong foundations for a company of strength.
Zuari entered the Cement business in 1994 to operate the Texaco Cement
Plant. In 1995, Texacos Plant at Yerraguntla was taken over by Zuari and a Cement
Division was formed. The fledging unit came into its own in the year 2001 when
21
Zuari Industries entered into a Joint Venture with the Italcementi Group, the 5th
largest producer of Cement in the world, Zuari Cement Limited was born. Zuari
Cement took over Sri Vishnu Cement Limited in 2002. Today, the Company is
amongst the topmost cement produces in South India.
Zuari and Italcementi. The strength of two
Zuari Cement is one of the leading cement producers in South India. A fully
owned subsidiary of the Euro 6 billion Italcementi Group, Commitment to customer
satisfaction has seen Zuari Cement grow from a modest 0.5 million ton capacity in
1995 to 3.5 million tones today. And earned a place among the most reliable
cement producers in the country.
Thanks to a careful plan of investments and take-overs of other cement
producers, the company expanded, quickly reaching a strong position on the market
and becoming the leading cement manufacturer in Italy.
After several acquisitions abroad, in 1992 Italic ementi achieved important
international status with its take-over of Cements Franois, one of the main global
cement producers.
In 1997 Italic cement consolidated its verticalisation strategy with the
acquisition of Calcestruzzi, thus becoming Italian leader in the ready-mixed concrete
sector.
In March 1997, all the international companies of the Group gathered under
one single corporate identity.
Since 1998 Italcementi Group has been pursuing its internationalization
strategy by acquiring new cement works in Bulgaria, Kazakhstan, Thailand,
Morocco, India, Egypt and the United States.
Our Management:
While professional management and quality workforce ensure superior
results, the role played by the core management should not be discounted. With
their vision and experience, they make sure that Zuari Cement moves in the right
direction. Towards becoming one among the leading cement producers in India.
Nabila Francis
Managing Director
Carlo Forgone
Director Technical
Sunnier Ly
22
Chief Financial Officer

S.SURESH
Vice President HR & IR
Appotiment of Director
Zuari Industries Ltd has informed BSE that the Board of Directors at its
meeting held on January 21, 2011 have appointed Mr. Suresh Krishnan, as
Additional Director of the Company.
With an annual production capacity of approximately 70 million tons of cement,
Italcementi Group is the worlds fifth largest cement producer.
The Parent Company, Italcementi Spa., is one of Italys 10 largest industrial
companies and is included in S&P/MIB Index of the Italian Stock Exchange.
Italcementi Groups companies combine the expertise, knowhow and
cultures of 22 countries in 4 Continents boasting an industrial network of 63
cement plants, 13 grinding centers, 5 terminals, 125 aggregates quarries
and 614 concrete batching units.
In 2009 the Group had sales amounting to almost 6 billion Euros.
Italcementi, founded in 1864, achieved important international status with
the take-over of Cements Franois in 1992.
Following a period of re-organization and integration that culminates in the
adoption of a single corporate identity for all Group subsidiaries, the newly-born
Italcementi Group began to diversify geographically through a series of acquisitions
in emerging countries such as Bulgaria, Morocco, Kazakhstan, Thailand and India, as
well as operating in North America. As part of the plan to further enhances its
presence in the Mediterranean area, in 2005 the Group boosted its investments in
Egypt becoming the market leader.
In 2007 Italcementi acquired full control of the activities in India and signed
an agreement to strengthen its position in Kazakhstan while, in 2008, it further
strengthened its presence in Asia and the Middle East through the operations in
China, Kuwait, Saudi Arabia. In 2009 the Group signed a joint venture in Libya to
build a 4 million tons/year
As a member of the World Business Council for Sustainable Development
(WBCSD) Italcementi Group has signed the Cement Sustainability Initiatives Agenda
for Action, the first formal commitment that binds a number of world cement
industry leaders to an action plan that aims at satisfying present-day needs at the
same time as safeguarding the requirements of future generations.
To further confirm its commitment on these issues, the Group has taken over
23
the co-Chairmanship of the Cement Sustainability Initiative for the period 20072008.
Our Products
Cement for every kind of task
Zuari Cement manufactures and distributes its own main product lines of
cement .We aim to optimize production across all of our markets, providing a
complete solution for customer's needs at the lowest possible cost, an approach we
call strategic integration of activities.
Cement is made from a mixture of 80 percent limestone and 20 percent
additives. These are crushed and ground to provide the "raw meal, a pale, flour-like
powder. Heated to around 1450 C (2642 F) in rotating kilns, the meal undergoes
complex chemical changes and is transformed into clinker. Fine-grinding the clinker
together with a small quantity of gypsum produces cement. Adding other
constituents at this stage produces cements for specialized uses.
Blended Cements
Zuari Blended Cement the eco-friendly, user-friendly cement
Zuari Blended Cement has been developed in response to todays need for
environment-friendly products that are cost-effective, durable and have minimal byproducts.
Durability is a very important property in concrete. And durability here means
concrete that ensures the long life span of structures like homes and residences
that are lifetime investments. Since distress of concrete and early failure of
structures is a common phenomenon, research over a period of time helped develop
various remedial measures that improved durability and cost economics. One of
them being blended Portland cement, with complementary pozzolanic and
cementations materials like fly ash, blast furnace slag, etc. And Zuari Blended
Cement is a fine example of it.
Our Products
Portland cement
Zuari OPC is high quality cement prepared from the finest raw material.
Owing to optimum water demand, it contributes to a very low co-efficient of
permeability of the concrete prepared. This improves the density of the concrete
matrix and increases the durability of the concrete. Zuari OPC is high performance
cement far exceeding the coal requirement of BIS.
It is this very durability that translates into long - lasting residential and
commercial constructions of a wide variety.
24
Zuaris edge
With these unique advantages, Zuari Cement comes to you in two grades - 43
Grade OPC and 53 Grade OPC.
Zuari OPC is high quality cement prepared from the finest raw material.
Owing to optimum water demand, it contributes to a very low co-efficient of
permeability of the concrete prepared. This improves the density of the concrete
matrix and increases the durability of the concrete. Zuari OPC is high performance
cement far exceeding the coal requirement of BIS.
It is this very durability that translates into long - lasting residential and
commercial constructions of a wide variety.
Zuari 43 & 53 Grade Ordinary Portland cement (OPC) - Strong cements
for long-lasting constructions.
Higher compressive strength
Better soundness
Lesser consumption of cement for M-20 grade concrete and above
Faster DE shuttering of form work
Reduced construction time
Primo Concrete Cement - Concrete Redefined
Primo - The success story In 2008 Zuari Cement launched its high-strength
cement under the brand name 'Primo Concrete Cement' in Bangalore City.
'Primo' improves the density of the concrete matrix and increases the durability of
the concrete, making it an immediate hit among construction and infrastructure
projects undertaken in and around Bangalore. Recently Primo was also launched in
Kochi and Chennai. An extensive marketing and distribution network across south
India concretes Zuari Cement's success story.
New products, on the line of the extremely successful 'Primo' launch, will
play a significant role in key markets.
Primo Concrete Cement - Concrete Redefined
Primo concrete cement is high quality cement prepared from the finest raw
material. Owing to optimum water demand, it contributes to a very low co-efficient
of permeability of the concrete prepared. This improves the density of the concrete
matrix and increases the durability of the concrete. Primo is a high performance
cement far exceeding the coal requirement of IS 12269-1987. It is this very
durability that translates into long-lasting residential and commercial constructions
25
of a wide variety, such as dams, canals, highways, roads and flyovers.
Higher compressive strength
Better soundness
Lesser consumption of cement for M-20 Concrete grade
and above
Faster DE shuttering of form work
Reduced construction time
Italcementi Group
Italcementi Group at a glance
With an annual production capacity of approximately 70 million tons of
cement, Italcementi Group is the worlds fifth largest cement producer.
The Parent Company, Italcementi Spa., is one of Italys 10 largest industrial
companies and is included in FTSE/MIB Index of the Italian Stock Exchange.
Italcementi Groups companies combine the expertise, knowhow and
cultures of 22 countries in 4 Continents boasting an industrial network of 59 cement
plants, 15 grinding centers, 5 terminals, 373 concrete batching units and 92
aggregates quarries.
In 2009 the Group had sales amounting to over 5 billion Euros.
Italcementi, founded in 1864, achieved important international status with
the take-over of Cements Franois in 1992
Following a period of re-organization and integration that culminates
in the adoption of a single corporate identity for all Group subsidiaries, the newlyborn Italcementi Group began to diversify geographically through a series of
acquisitions in emerging countries such as Bulgaria, Morocco, Kazakhstan, Thailand
and India, as well as operating in North America. As part of the plan to further
enhance its presence in the Mediterranean area, in 2005 the Group boosted its
investments in Egypt becoming the market leader
In 2006 Italcementi acquired full control of the activities in India and signed
an agreement to strengthen its position in Kazakhstan while, in 2007, it further
strengthened its presence in Asia and the Middle East through the operations in
China, Kuwait, Saudi Arabia.
As a member of the World Business Council for Sustainable Development
(WBCSD) Italcementi Group has signed the Cement Sustainability Initiatives Agenda
for Action, the first formal commitment that binds a number of world cement
industry leaders to an action plan that aims at satisfying present-day needs at the
26
same time as safeguarding the requirements of future generations.

To further confirm its commitment on these issues, the Group has taken over the coChairmanship of the Cement Sustainability Initiative for the period 2011-2012.
Moreover, Italcementi has been included in The Sustainability Yearbook 2012 the
most comprehensive publication on corporate sustainability released yearly by SAM
(Sustainable Asset Management).

INTRODUCTION
The basic financial statements i.e., the Balance Sheet and Profit & Loss A/c or
Income Statement of business reveals the net effect of various transactions on
operational and financial position of the company. The balance sheet gives a
summary of the assets & liabilities of an undertaking at a particular point of time.
There are many transactions that take place in an undertaking and which do
not operate Profit & Loss A/c. Thus another statement has to be prepared to show
the change in Assets & Liabilities from the end of one period of time to the end of
another period of time. The statement is called a statement of changes in financial
position or a Funds Flow Statement.
The Funds Flow Statement is a statement which shown the movement of
funds and is a report of financial operations of business undertaking. In simple
words it is a statement of source and application of funds.
MEANING & CONCEPT OF FUNDS

The term Fund has been defined and interpreted differing by different
experts. Broadly the term fund refers to all the financial resource of the company on
the other extreme fund has been understood as cash only. The most acceptance
meaning of the fund is working capital.
Working Capital is excess of current assents over current liability. The
term fund has a variety of meaning.
A) CASH FUND OR NARROW SENSE
In a narrow sense, funds mean only cash. Cash flow statement portrays net
effect of various business transactions cash into account receipts & disbursement of
cash.
The concept of preparing funds from statement is not accepted, as there are
many such transactions that do not affect cash but represent the flow of fund.
For Ex:
27
Purchase of furniture on credit does not affect cash but there is flow of fund.
B) CAPITAL FUND (or) BROADER SENSE
Here funds means all financial resources used in business, whether in the
form of men, money, material, machine & others.
C). NET WORKING CAPITAL (or) POPULAR SENSE
Networking capital means differences between current assets & liabilities. A
fund generally refers to cash or cash equipment or to working capital.
In any business we cannot under estimate the flow of funds from two
operations. The business runs with funds but the organization knows how to flow of
funds.
The Funds Flow Statement is concerned with sources and applications of
organization.
Statement of changes in working capital shows the increase or decrease in
the working capital.
Funds from Operations statement shows how much funds from operations.

In every concern, the funds flow in form different sources and similarly funds
are invested in various sources of investment. It is continuous process. The study
and control of this funds-flow process (i.e., the uses and sources of funds) is the
main objective of financial management to assess the soundness and the solvency
of the enterprise.
The funds-flow-statement is a report on financial operations changes, flow
or movements during the period. It is a statement which shows the sources an
application of funds or it shows how the activities of a business are financed in a
particulate period. In other words, such a statement shows how the financial
resources have been used during a particular period of time. It is, thus, a historical
statement showing sources and application of funds between the two dates
designed especially to analyses the changes in the financial conditions of an
enterprise. In the words of Fouke, it isA statement of Sources and Application of Funds is a technical device
designed to analyses the changes in the financial condition of business
enterprises between two dates.
Funds Flow Statement is not an income statement. Income statement shows
the items of income and expenditure of a particular period, but the Funds flow
statement is an operating statement as it summaries the financial activities for a
28
period of time. It covers all movements that involve an actual exchange of assets.
Various titles are used for this statement such as 'Statement of sources and
Application of Funds', 'Summary of Financial operations,' 'Changes in Financial
Position', 'Fund received and Disbursed', 'Funds Generated and Expended', Changes
in Working Capital, Statement of Fund' etc. Title of Funds Flow Statement has
been modified from time to time. Really it is very difficult to find a short time for
such statement which carries much to the readers regarding its contents and
functions.
A new interpretation of the term 'funds, has now been adopted as to include
assets or financial resourceful which do not flow through the working capital
accounts. It seems to be the most suitable meaning fort the term 'funds' but the
most commonly used interpretation of the term 'funds' is 'working capital'
Distinction Between funds Flow Statement and Balance

Sheet
There is also a difference between meaning, purpose and importance of
Funds Flow Statement and Balance Sheet although both are prepared with the same
accounting data.
A summary of main points of differences between these two is give below:e) Balance sheet is a statement showing the financial position of the concern on
a particular date. The asset side portrays the development of resources in
various types of properties a liabilities side indicates the manner in which
these resources are obtained. It shows all assets and liabilities whether
current or fixed, tangible or intangible etc., while Funds Flow Statement
shows the changes in current assets an current liabilities during a particular
period of time.
f) Balance Sheet shows the total financial position on a particular date and in
this way, it is of a historical nature and therefore, its utility is very limited for
the management. On the other hand, Funds Flow Statement is a comparative
statement of assets and liabilities and depicts the changes in working capital
during the period of two Balance sheets.
g) Funds Flow Statement is an analysis and control device for the management.
Management can ensure the long term on the short term solvency of the firm
by studying the internal funds flow cycles. It is a modern technique of
knowing the inflows and outflows of funds during a particular period. Balance
Sheet represents the balance of various assets and liabilities and does not
present analysis of any kind.
29
h) There are two views of h financial position of the firm-long term a short-term.
Short-term financial position means the technical solvency of the firm in the
near future while on the other hand, long-term financial position means future
financial structure of the firm. Both are inter-relate but there is a differences
in their analysis. The short-term view of the financial position of the firm ca
not is had from the Balance Sheet.
Distinction between funds flow statement and cash flow

statement
We have fully explained the meaning and importance of both the statementsFunds Flow a Cash Flow statements.
A distinction between these two statements may be briefed as under:(I) Funds Flow Statement am concerned with all items constituting funds
(Working Capital) for the business while Cash Flow Statement deals only with
cash transactions. In other words, a transaction affecting working capital
other than cash will affect Funds statement, and not the Cash Flow
Statement.
(ii) In Funds Flow Statement, net increase or decrease in working capital is
recorded while in Cash Flow Statement; individual item involving cash is
taken into account.
(iii) Funds Flow statement is started with the opening cash balance and
closed with the closing cash balance records only cash transactions.
(iv) Cash Flow Statement is started with the opening cash balance and
closed with ht closing cash balance while there a no opening or closing
balances in Funds Flow Statement.
A fund flow statement, better known as a cash flow statement, is an
important document in the accounting world. A fund flow statement shows a
company's inflows and outflows of funds. It is used to show investors, stakeholders
or owners where the company's money came from and where it went.
RULE
The flow of funds occurs when a transaction changes on one hand a noncurrent A/c and on the other a current A/c and Vice-versa. According to working
capital concept of funds the term Flow o Funds return to movement of funds in
working capital.
If any transaction results in increase in working capital.It is said to be a
source or inflow of funds and if it results in decrease of working capital, it is said
30
to be application or out flow of funds.
CURRENT ASSETS
Current Assets are those assets, which in the ordinary course of business can
be or will be converted into cash within a short period of normally one accounting
year.
CURRENT LIABILITIES
Current liabilities are those liabilities which are intended to be paid in
ordinary course of business with in short period of normally one accounting year out
of the current assets or the income of the business.
Differences between current liabilities & current assets

CURRENT LIABILITIES
CURRENT ASSETS
1. Bills Payable
1. Cash in Hand
2. Sundry Creditors
2. Cash at Bank
3. Accrued or O/s Expenses
3. Bills Receivable
4. Dividends Payable
4. Sundry Debtors or A/cs receivable
5. Bank Overdraft
5. Short term loans & advances
6. Short term loans, advances &

deposits
6. Short term investment
7. Provision for taxation.
7. Inventories or stock
8. Proposed Dividend
8. Prepaid Expenses
9. Accrued incomes.
31
MEANING & DEFINITION OF FUNDS FLOW STATEMENT

Funds Flow Statement is a method by which we study changes in the financial
position of business enterprise beginning & ending financial statement dates. It is a
statement showing sources & uses of funds for a period of time.
FOUIKE DEFINES
A statement of sources & application of funds is technical devices designed
to analyses the changes in the financial condition of business enterprise between
two dates
ANTHONY DEFINES
The Funds Flow Statement describes the sources from which additional
funds were derived and the use to which these sources were put.
I.C.W.A IN GLOSSARY OF MANAGEMENT ACCOUNTING

TERMS DEFINES FUNDS FLOW STATEMENT
Funds Flow Statement as a statement either prospective or retrospective

setting out of sources & application of the funds of an enterprise.
The purpose of statement is to indicate clearly the requirement of funds and

how they are proposed to be raised and efficient utilization & application of
the same.
32
Funds Flow statement is called by various names such as sources and

application of funds, statement of changes in financial position, sources and
uses of funds, summary of financial operations, movement of working capital,
movement of funds statement, sources of increase and application of
decrease etc
USES, SIGNIFICANCE AND IMPORTANCE OF FUNDS FLOW STATEMENT

A Funds Flow Statement is an essential tool for the financial analysis and is
of primary importance to financial management. Now a day it is being widening
used by the financial analysis.
The basic purpose of funds flow statement is to reveal the changes in working
capital on 2 balance sheets
DIFFERENCE BETWEEN FUNDS FLOW STATEMENT & CASH FLOW

STATEMENT
33
BASIS OF DIFFERENCE FUNDS FLOW STATEMENT CASH FLOW STATEMENT

1.Basis of concept
It is based on a wider conceptIt is based on a narrower

concept of funds, i.e., cash.
Of funds, i.e., working capital.
2. Basis of Accounting
It is based on accrual basis ofIt is based on cash basis of

accounting
accounting.
3. Schedule of changes in Schedule of changes in

No such Schedule of changes
working capital is prepared toin working
working capital
show the changes in current
Capital is prepared.
assets and
Current liabilities.
4. Method of preparing
Funds flow statement revealsIt is prepared by classifying all

the sources and applications Cash inflows and outflows in
of
terms of operating, investing
and financing activities. The
Funds. The net difference
net difference represents the
between sources and
net Increase or decrease in
applications of funds
Cash and cash equivalents.
represent net increase or
decrease
In working capital.
A5. Basis of usefulness.
It is useful in planning
It is more useful for short-term

analysis and cash planning of
intermediate and long term the business.
Financing.
34
LIMITATIONS OF FUNDS FLOW STATEMENT

The funds flow statement has a number of uses; however, it has certain limitations
also, which are listed below.
1. It should be remembered that a funds flow statement is not a substitute of an
income statement or a balance sheet. It provides only some additions
information as regards charges in working capital.
2. Cannot reveal continuous changes.
3.
It is not an original statement but simply is arrangement of data given
in financial statements.
4. It is essentially historic in nature and projected funds flow statement cannot be
prepared with much accuracy.
5. Change in cash is more important & relevant for financial management than the
working capital.
PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT
Funds flow Statement is a method by which we study changes in financial position
of business enterprise between beginning & ending financial statement dates.
35
Hence the funds flow statement is prepared by comparing two balance sheets and
any of such other information derived from the Accounts as may be needed
The preparation of funds flow statement consists of two parts.
A. Statement or schedule of changes in working capital.
B. Statement of sources & application of fund.
A.) STATEMENT OR SCHEDULE OF CHANGES IN W.C.
Working Capital means the excess of current assets over current

liabilities.
Statement of changes in working capital is prepared to show the

changes in working capital between two balance sheet dates.
This statement is prepared with help of current assets and current

liabilities derived from two balance sheets.
Working capital = Current Assets Current Liabilities
An increase in current assets increases W.C.
A decrease in current assets decreases W.C.
An increase in current liabilities decreased W.C.
A decrease in current liabilities increases W.C.
STATEMENT OF SCHEDULE OF CHANGES IN WORKING CAPITAL
Effect of W.C.
Previ
ous
Year
Current
Year
Cash in Hand
Xx
Xx
xx
Cash at Bank
Xx
Xx
xx
Bills Receivable
Xx
Xx
Particulars
Increa
se
Decre
ase
Current Assets :
36
Xx
Sundry Debtors
Xx
Xx
Xx
Temporary investments
Xx
Xx
xx
Stock / Inventions
Xx
Xx
xx
Prepaid Expenses
Xx
Xx
xx
Accrued Incomes
Xx
Xx
Total Current Assets
Xxx
Xxx
Bills Payable
Xx
xx
Sundry Creditors
Xx
xx
Xx
Outstanding Expenses
Xx
xx
Xx
Bank Overdraft
Xx
xx
xx
Short term Advances
Xx
xx
xx
Dividend Payable
Xx
xx
Xx
Proposed Dividend
Xx
xx
Xx
Provision for Taxation
Xx
xx
Xx
Total Current Liabilities
Xxx
xxx
Working Capital (C.A.

C.L.)
Xxx
xxx
Net increase or decrease in

W.C
Xxx
Xx
Current Liabilities :
Xxxx
xx
Xxx
xxxx
xxxx
STATEMENT OF SOURCES & APPLICATION OF FUNDS. :

37
Xxxx
Funds flow statement is a statement, which indicates various sources from which
funds (W.C.) have been obtained during a certain period and uses or applications to
which these funds have been put during that period.
Generally this statement is prepared in two formats.
a) T Form (or) An A/c Form (or) Self Balancing Type
b) Report Form.
a.)
T FORMS AN ACCOUNT FORM

(For the year ended)
Sources
Rs.
Applications
Rs.
Funds from operations
Xx
Funds lost in operations
Xx
Xx
Redemption of preference
share
Xx
Issue of Debentures
Xx
Capital
Xx
Raising of long term loans
Xx
Redemption of debentures
Xx
Sale of non current (fixed)

assets
Xx
Repayment of long term

loan
Xx
Non-trading receipts such

as dividends
Xx
Purchase of long term

investments
Xx
Scale of long term

investments
Xx
Net decrease in working

capital
Xx
Issue of share capital
Non-trading payments
Payment of Dividends
Xx
Xx
Xx
Payment of Tax
Xx
Xx
Net increase in working

capital
Xx
Xxx
Xxx
REPORT FORM OF FUNDS FLOW STATEMENT
38
SOURCES OF FUNDS
Funds from Operation
Xx
Issue of Share Capital
Xx
Xx
Receipts from partly paid shares
Xx
Sale of non-current (fixed) assets
Xx
Non trading receipts, such as dividends
Xx
Sale of investment (long term)
Xx
Decrease in working capital
Xx
Total
Xxx
APPLICATION OR USES OF FUNDS :

Funds lost in operations
Xx
Redemption of preference share capital
Xx
Redemption of debentures
Xx
Repayment of long term loans
Xx
Purchase of non-current (fixed) assets
Xx
Purchase of long term investments
Xx
Non-trading payment
Xx
Payment of dividends
Xx
Payment of tax
Xx
Increase in working capital
Xx
Total
Xxx
There are two methods of calculating funds from operation.

a. Funds from operation.
b.
Adjusted Profit & Loss A/c
FUNDS FROM OPERATION

Closing Balance of Profit & Loss A/c
Xxx
39
Add: Non-fund or Non-operating items Depreciation
Xx
Loss on sale of fixed assets
Xx
Under Writing Commission
Xx
Discount on issue of shares & debentures
Xx
Preliminary exp. Written off
Xx
Deferred revenue expenses
Xx
Goodwill Written off
Xx
Patent or trade mark
Xx
Provision for taxes
Xx
Proposed Dividend
Xx
Transfer to resume
Xx
Provision for doubtful debts.
Xx
Less: Non-operating Income
Xx
Profit / Gain on sale of fixed assets
Xx
Dividend Received
Xx
Dividend Received
Xx
Interest Received on Investments
Xx
Profit on revaluation of assets
Xx
Fund from operations
Xxx
FUNDS FLOW STATEMENT IN ZUARI CEMENT INDUSTRIES LTD

ANALYSIS AND DISCUSSIONS
TABLE-4.1
Composition of current Assets
(All the amounts are in Cr)
Particulars
201011
201112
201213
40
201314
201415
Avg.
Inventory
683.24
901.86
924.97
954.27
1024.
57
Sundry
Debtors
152.2
128.18
240.85
296.64
915.5
7
Cash and
Bank
116.64
198.4
175.43
209.64
234.3
9
934.5
Loans &
Advances
292.65
422.61
674.03
711.34
801.5
1
2902.
14
Other current
Assets
764.04
1549.7
7
1895.8
1987.5
1
Total
2008.7
7
3200.8
2
3911.0
8
4159.4
2258.
84
5234.
88
4488.
91
1733.
44
8455.
96
18515
CHART-4.1
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
The income statement is also called as income statement, it is considered to

41
be the most useful of all financial statements. It prepared by a business concern in

order to know the profit earned and loss sustained during a specified period. It
explains what has happened to a business as a result of operations between two
balance sheet dates. For this purpose it matches the revenues and cost incurred in
the process of earning revenues and shows the net profit earned or loss suffered
during a particular period.
The nature of Income which is a focus of the income statement can be well
understood if business is taken as an organization that uses Input to produce
Output. The output of the goods and services that the business provides to its
customers. The values of these outputs are the goods and services that the
business provides to its customers. The values of these outputs art the amounts
paid by the customers for them. These amounts are called revenues in the
accounting. The inputs are the economic resources used by the business in
providing these goods and services. These are termed expenses in accounting.
TABLE-4.2
STATEMENT OF CHANGES IN WORKING CAPITAL IN YEAR 201011.
RS in
crores
Particulars
2010
2011
Effect of W.C.
Increas Decre
e
ase
Total current Assets
Inventories
683.2
4
939.7
5
Sundry Debtors
224.6
152.2
72.4
Cash and Bank Balances
123.7
3
116.6
4
7.09
Other Current Assets
728.1
1
764.0
4
Loans and Advances
351.8
2
292.6
5
Total
2111.
2265.
42
256.51
35.93
59.17
28
Current Liabilities
1412.
55
1582.
32
169.77
Provisions
470.5
6
674.0
4
203.48
219.47
Total
1883.
11
2256.
39
Net working capital
228.3
9
8.92
Increase\decrease in net working

capital
219.47
CHART-4.2
43
511.91
511.91
3000
2500
2000
1500
1000
500
0
-500
Sources:
we have taken this information from zuari cements from 2010-2011
Interpretation:
The networking capital of Zuari cements Ltd has been decreased to 237.31 Cr
the financial position i.e. the performance of Zuari cements Ltd has increased and
the current assets defects its current liability.
TABLE-4.3
STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE PERIOD
(2010-11)
Rs
44
in crores
Source
Rs.
Application
Rs.
304.74
Funds lost in operation
0.00
100.00

loan loans
2784.09
Sale of non-current (fixed)

assets
290.69

investments
1124.34
Non-trading receipts
0.00
Sale of investment
727.01
237.31
1659.7
5
1659.7
5
Sources: we have taken this nformation from zuari cements from 20102011
CHART-4.3
45
3000
2784.09
2500
2000
1659.75
1659.75
1500
1000
727.01
ln(x) - 32.58
500 304.74f(x) = 416.13290.69
3
4
1 100 2
0
10
0
2
0
3
0
04
-500
237.31
-1000
-1124.34
-1500
Source
Rs.
Application
Rs.
Logarithmic (Rs.)
Analysis:
From the table it is observed that the working capital of company shows
increased trend. The current Asset of the company has increased Rs 237.51 in 20102011 is 2368.01. But the item cash balance showing increasing trend. The current
liabilities of company are decreased in 2010 2011.In the net working capital of
company stood -1124.34 It is increased in 2010-11. The increasing net working capital.
Regarding the application of funds 21.54 % used for investment in fixed assets
and funds used for working capital purpose. Constitute 28.67 % respectively
INTERPRETATION
It is concluded that during the period 2010-11 Increasing gross block and net
increasing in working capital.
TABLE-4.4
STATEMENT OF CHANGES IN WORKING CAPITAL IN 2011-12
Particulars
2011
Rs in crores
2012
Effect of W.C.
Increa Decrea
se
se

46
Inventories
939.7
5
901.8
6
37.89
Sundry Debtors
152.2
128.1
8
24.02
116.6
4
198.4
81.76
764.0
4
1549.
77
785.73
Loans and Advances
292.6
5
422.6
1
129.96
Total
2265.
28
3200.
82
Current Liabilities
1582.
32
1893.
98
311.66
Provisions
674.0
4
1096.
57
422.53
201.40
1253.34
1253.34
Total
2256.
36
2990.
55
Net working capital
8.92
210.3
2
Increase\decrease in net
working capital
201.40
CHART-4.4
47
3500
3000
2500
2000
1500
1000
500
0
-500
Sources: we have taken this information from zuari cements, from 20112012
Interpretation:
The networking capital of Zuari cements has been decreased to 37.27 Cr the
financial position i.e. the performance of Zuari cements Ltd has increased and the
current assets defects its current liability.
TABLE-4.5
(2011-12)
Rs in
crors
48
Source
Rs.
Application
Rs.
305.97
0.00
0.00

loan loans
3151.07

assets
238.27

investments
2018.15
0.00
Sale of investment
625.95
-37.27
1132.
92
1132.9
2
Sources: we have taken this information from zuari cements, from 2011-2012
CHART-4.5
49
4000
3151.07
3000
2000
Source
1000
305.97
1
0
0
10 00
2
-1000
-2000
1132.92
625.95
238.27
2
3
4
5
0
3
04
1132.92
Rs.
Application
Rs.
Logarithmic (Rs.)
5 -37.27
6
-2018.15
-3000
Analysis:
decreased trend. The current Asset of the company has increased Rs 3200.82 in 20112012 is 2008.77. But the item cash balance showing increasing trend. The current
liabilities of company are decreased in 2012 .In the net working capital of company
stood -2018.15. It is decreased in 2011-12. The decreasing net working capital is Rs
37.27
Regarding the application of funds 33.71% used for investment in fixed assets
and funds used for working capital purpose. Constitute 30.77% respectively
INTERPRETATION
It is concluded that during the period 2011-12 Increasing gross block and net
Decreasing in working capital.
TABLE-4.6
Rs in Crors
Particulars
2012
2013

Inventories
901.8
50
924.9
Effect of W.C.
Increas
e
Decreas
e
23.11
Sundry Debtors
128.1
8
240.8
5
112.67
198.4
175.4
3
--
22.97
1549.
77
1895.
8
346.03
Loans and Advances
422.6
1
674.0
3
251.42
Total
3200.
82
3911.
08
Current Liabilities
1893.
98
2314.
49
--
420.51
Provisions
1096.
57
1106.
11
--
9.54
--
280.16
733.23
733.23
Total
2990.
55
3420.
6
Net working capital
210.3
2
490.4
8
working capital
280.16
CHART-4.6
51
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Interpretation:
The networking capital of Zuari cements Ltd has been increased to 280.16 Cr
TABLE-4.7
(2012-13)
Rs
in crors
52
Source
Rs.
Application
Rs.
306.87
0.00
0.00

loan loans
3515.83

assets
347.46

investments
1506.71
0.00
Sale of investment
864.31
Decrease in working
capital
490.48
2009.
12
2009.1
2
CHART-4.7
53
4000
3515.83
3000
2009.12
2000
2009.12
Source
Rs.
864.31
1000
490.48
347.46
306.87
4
5
6
1
2
3
0
0
0
04
10 00
2
3
5
6
Application
Rs.
7
Logarithmic (Rs.)
-1000
-2000
-1506.71
Analysis:
increased trend. The current Asset of the company has increased Rs 3911.08 in 20123is 3200.82. But the item cash balance showing increasing trend. The current liabilities
of company are decreased in 2012- 2013..In the net working capital of company stood
3420.60 It is decreased in 2012-13. The decreasing net working capital.
Regarding the application of funds 32.65 % used for investment in fixed assets
and funds used for working capital purpose. Constitute 29.64 % respectively
INTERPRETATION
It is concluded that during the period 2012-13. Increasing gross block and net
TABLE-4.8
Rs in Crors
particulars
2013
2014

Inventories
924.9
54
954.2
Effect of W.C.
Increa
se
Decrea
se
29.3
Sundry Debtors
240.8
5
296.6
4
55.79
175.4
3
209.6
4
34.21
1895.
8
1987.
51
91.71
Loans and Advances
674.0
3
711.3
4
37.31
Total
3911.
08
4159.
4
Current Liabilities
2314.
49
2451.
88
137.39
Provisions
1106.
11
1365.
21
259.1
148.17
Total
3420.
6
3817.
09
Net working capital
490.4
8
342.3
1
working capital
148.17
CHART4
55
396.49
396.49
4500
4000
3500
3000
2500
2000
1500
1000
500
0
Interpretation:
TABLE-4.9
(2013-14)
Rs in
crores
56
Source
Rs.
Application
Rs.
315.54
0.00
0.00

loan loans
3658.87

assets
358.64

investments
-1868.98
0.00
Sale of investment
967.54
Decrease in working
capital
148.17
1789.89
1789.89
CHART-4.9
57
4000
3658.87
3000
1789.89
2000
1789.89
967.54
1000
358.64
315.54
148.17
6
2
3
4
5
1
0
0
0
04
10 00
2
3
5
6
-1000
-2000
Source
Rs.
Application
Rs.
Logarithmic (Rs.)
-1868.98
-3000
Analysis:
From the table it is observed that the working capital of company shows increased
trend. The current Asset of the company has increased Rs 3658.89 in 2013-2014. But
the item cash balance showing increasing trend. The current liabilities of company are
decreased in 2013-2014.In the net working capital of company stood 1789.89 It is
decreased in 2013-14. The decreasing net working capital.
Regarding the application of funds 35.68 % used for investment in fixed assets and
funds used for working capital purpose. Constitute 32.67 % respectively
INTERPRETATION
It is concluded that during the period 2013-14 increasing gross block and net
increasing in working capital
TABLE-4.10
STATEMENT OF CHANGES IN WORKING CAPITAL in 2014-15
Rs in Crores
Particulars
2014
2015

Inventories
954.2
7
58
1024.
57
Effect of W.C.
Increas
e
Decrea
se
70.3
Sundry Debtors
296.6
4
915.5
7
618.93
209.6
4
234.3
9
24.75
1987.
51
2258.
84
271.33
Loans and Advances
711.3
4
801.5
1
90.17
Total
4159.
4
5234.
88
Current Liabilities
2451.
88
3256.
12
804.24
Provisions
1365.
21
1453.
57
88.36
182.88
Total
3817.
09
4709.
69
Net working capital
342.3
1
525.1
9
working capital
182.88
CHART-4.10
59
1075.48
1075.48
6000
5000
4000
3000
2000
1000
0
Sources:
we have taken this information from zuari cements, from 2014-
2015
Interpretation:
TABLE-4.11
STATEMENT OF SOURCES AND APPILICATION OF FUNDS FOR THE
PERIOD (2014-15)
Rs
in crores
60
Source
Rs.
Application
Rs.
315.54
0.00
0.00

loan loans
3984.61

assets
395.67

investments
-2095.28
0.00
Sale of investment
995.24
increase in working capital
182.88
1889.33
1889.33
Sources: we have taken this information from zuari cements, from 20142015.
CHART-4.11
61
5000
3984.61
4000
3000
Source
1889.33
2000
Rs.
Application
1000
0
-1000
Rs.
10
Logarithmic (Rs.)
2
-2000
-2095.28
-3000
Analysis:
From the table it is observed that the working capital of company shows increased
trend. The current Asset of the company has increased Rs 3984.61 in 2013-2014. But
the item cash balance showing increasing trend. The current liabilities of company are
decreased in 2014-2015.In the net working capital of company stood 1889.33 It is
increased in 2014-15. The increasing net working capital.
Regarding the application of funds 39.67 % used for investment in fixed assets and
funds used for working capital purpose. Constitute 35.61 % respectively
INTERPRETATION
It is concluded that during the period 2014-15increasing gross block and net
TABLE-4.12
NET DECREASE IN WORKING CAPITAL
Rs in Lacks
Year
Increase/Decrease
62
Amount
2010-11
Decrease
247.59
2011-12
Increase
210.32
2012-13
Increase
490.48
2013-14
Decrease
148.17
2014-15
Increase
182.88
CHART-4.12
63
NET DECREASE IN WORKING CAPITAL

600
490.48
500
400
300 247.59
AMOUNT IN LAKHS 200
210.32
148.17
182.88
100
0
INTERPRETATION:
From the above analysis we can analyzes that net decrease in working capital in the
year has highest 2011-12 and decreased working capital in 20009-10. And it has
decreased in the year 2012-13 and its moving average working capital in the year
2013-14
FINDINGS
(a) The networking capital of Zuari cements Ltd has been increased to 182.88
Cr the financial position i.e. the performance of Zuari cements Ltd has
increased and the current assets defects its current liability.
(b) The networking capital of Zuari cements has been decreased to 525.19 Cr
64
the financial position i.e. the performance of Zuari cements Ltd has
increased and the current assets defects its current liability.
(c) The networking capital of Zuari cements Ltd has been increased to 445.04
Cr in 2012-2013 the financial position i.e. the performance of Zuari
cements Ltd has increased and the current assets defects its current
liability
(d) In 2009-10 would be decreased by Rs. 24.75 .In the year 2010-11 the working capital
has been increased by Rs. 21.02. In the year 2010-11 the working capital is Rs.
210.32. In 2013-14 Rs.18.28 has increased the working capital.
(e) The current Asset of the company has increased Rs 3984.61 in 2013-2014.
But the item cash balance showing increasing trend. The current liabilities
of company are decreased in 2013-2014.In the net working capital of
company stood 1889.33 It is increased in 2013-14. The increasing net
working capital.
SUGGESTIONS
(a) Net working capital is high; it is suggested to maintain sufficient net working
capital.
(b) Effective inventory management is needed in the company
(c) The firm should increase investment in current assets to create sufficient
securities for the current liabilities
(d) For the improving the financial performance of the company the following
suggestions are made.
(e) In order to reduce the outside borrowings in the company has to acquire. The
capital from equity sources. Keeping in view the debt equity the proportion as
normal.
(f) The liquidity of the company should be improved by maintaining the optimum
65
current assets and liquid assets according to standard norms.

(g) The quantum of the sales generated should be improved impressively in
order to attain higher return on investment.
(h) To improve the financial health of the company and maximizing the time
between the source mobilization and utilization the management must
introduce the new cost saving techniques.
CONCLUSION
The Zuari cements Ltd net working capital is satisfactory between the years since it
shows increasing trend; but after that it is in declining position Profit Margin of Zuari
cements Ltd is decreasing and showing negative profit because there is increase in
the price of copper The Zuari cements Ltd Net Working Capital expenses Improve
position funds should be utilized properly. Better Awareness to increase the sales is
suggested. Cost cut down mechanics can be employed. Better production
technique can be employed.
BIBLOGRAPHY
FINANCIAL MANAGEMENT
- I.M.PANDEY
- PRASANNA CHANDRA
- KHAN & JAIN
ADVANCED MANAGEMENT
- R.K. SHARMA
ANNUAL REPORTS OF ZUARI CEMENTS LTD 2010-2014.
WEB SITES
www.zuari.com
www.italialcement.com
66
www.indiancements.com
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FUNDS FLOW STATEMENT

MEANING & CONCEPT OF FUNDS

Networking capital means differences between current assets & liabilities. A