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A STUDY ON MODERNIZATION OF PLANT AND FINANCIAL

ANALYSIS OF THE COMPANY.


A project submitted in partial fulfillment of the requirement for the degree of

MASTER OF BUSINESS ADMINISTRATION


Specializing in

FINANCE AND HUMAN RESOURCE MANAGEMENT


to the

UNIVERSITY OF ANNAMALAI IN COLLABARATION WITH BHARTI RESOURCE


by

ASRA SULTHANA.B

INTERNATIONAL SCHOOL OF BUSINESS AND RESEARCH COLLEGE

DEPARTMENT OF FINANCE, ELECTRONIC CITY, BANGALORE MARCH- 2009

DECLARATION

I, ASRA SULTANA.B Reg, No: 531M8075F00277 a bonafide student of Department of Management Studies, INTERNATIONAL SCHOOL OF BUSSINESS AND RESEARCH IN COLLABORATION OF BHARTI RESOURCES, Bangalore would like to declare that the project entitled, A STUDY ON FINANCIAL PERFORMANCE ANALYSIS AND MODERNIZATION OF PLANT WITH SPECIAL REFERANCE TO CARBORUNDUM UNVERSAL LIMITED,HOSUR. In partial fulfillment of Master of Business Administration course of the Annamalai University is my original work.

SIGNATURE

INTERNATIONAL SCHOOL OF BUSINESS AND RESEARCH. ELECTRONIC CITY, BANGALORECertified that this project report titled A STUDY ON FINANCIAL PERFORMANCE ANALYSIS AND MODERNIZATION OF PLANT WITH SPECIAL REFERANCE TO CARBORUNDUM UNVERSAL

LIMITED,HOSUR is the bonafied work of Ms.ASRA SULTHANA.B A who carried out the research under my supervision. Certificate further, that to the best knowledge the work reported herein does not form part of any other project report or dissertation on the basis of which a degree or award was conferred on an earlier occasion on this or any other candidate.

HEAD OF THE DEPARTMENT GUIDE DIRECTOR PG STUDIES Assessed By INTERNAL EXAMINER EXTERNAL EXAMINER

1.2.1COMPANY PROFILE: CUMI was founded in 1954 as a tripartite collaboration between the Murugappa Group, The Carborundum Co., USA and the Universal Grinding Wheel Co. Ltd., U.K. The company pioneered the manufacture of Coated Abrasives and Bonded Abrasives in India in addition to the manufacture of Super Refractories, Electro Minerals, Industrial Ceramics and Ceramic Fibres. Today the company's range of over 20,000 different varieties of abrasives, refractory products and electrominerals are manufactured in ten locations across various parts of the country. With state-of-the art facilities and strategic alliances with global partners, CUMI has achieved a reputation for quality and innovation.CUMI is one of the five manufacturers in the world with fully integrated operations that include mining, fusioning, wind and hydro power stations, manufacturing, marketing and distribution. Almost all of CUMI's ten manufacturing facilities have received the ISO 9001:2000 accreditation for quality standards. A well connected marketing and distribution network of offices and warehouses in India and abroad, ensure that service to customers is given prime importance. CUMI's constant innovation and product upgradation, through in-house R&D and strategic alliances with global leaders in grinding technology, have not only ensured it market leadership in India and abroad, but also international recognition as a manufacturer of quality abrasives and a provider of total grinding solutions. CUMI's products are being exported to 43 countries spread across North America, Europe, Australia, South Africa and Asia.

The business has its origins in 1900, when Dewan Bahadur A M Murugappa

Chettiar established a money-lending and banking business in Burma (now Myanmar), which then spread to Malaysia, Sri Lanka, Indonesia and Vietnam. A century down the line, it has withstood enormous vicissitudes (including strategically moving its assets back to India and restarting from scratch in the '30s, before the Japanese invasion in World War II) to become one of the country's biggest industrial houses. The group is a market leader in India across a spectrum of products like fertilisers, abrasives, automotive chains, car door frames and steel tubes and also has a significant presence in sugar and financial services. Neemazal, a neem-based organic pesticide, is the market leader in bio-pesticides. Some of the country's bestknown brands like BSA and Hercules in bicycles, Parrys Spirulina and Parrys Beta Carotene in nutraceuticals, Parrys Pure in sugar, Carborundum and Ajax in abrasives, Gromor and Paramfos in fertilisers, and many more come from the Murugappa Group. Its companies have tie-ups with BorgWarner of the USA, Wendt of Germany, Morgan Crucible of the UK, Mitsui Sumitomo Insurance of Japan, DBS Bank of Singapore, S.A. of Spain, the China Engineering and Exploration Bureau of China, Foskor of South Africa, Group Chimique Tunisien of Tunisia, Cerdak Pty. of South Africa and Cargill International SA of Geneva. It has registered 43 international patents for its research and development innovations The group has grown consistently through its decisive and visionary response to changing times. Its pioneering efforts, steadfast commitment to ethical business practices and its dogged pursuit of new areas to extend its business acumen have brought in its wake several prestigious national and international awards. Social

commitment has always been the cornerstone of the group's ethos and it has been at the forefront of eco-conservation, public health, and education in the communities where its companies operate. It runs several educational and health care institutions on charitable lines. Besides, the group runs a research and development centre for rural development, the Sri AMM Murugappa Chettiar Research Centre (MCRC), which has been designing simple, cost-effective technologies for local artisans. The group is also the first business group in Asia to have been awarded the 'IMD Distinguished Family Business Award' by the internationally renowned Management Development Institute located in Lausanne, Switzerland. Gross Sales Rs. Billion 38.00 19.33 9.86 14.72 6.81 7.10 95.82

Business Group Fertilisers / Pesticides Bicycles / Engineering / Chains / Metal Formed Products Abrasives / Ceramics / Electrominerals Financial Services Sugar / Nutraceuticals / Bio Products Others (Plantations / Sanitaryware / Constructions, etc) Total

Abrasives & Allied Products

An abrasives is a hard, tough and wear resistant substance for grinding and polishing operations. Manufactured through a complex and high technology process, these abrasives are used in metal removal, cutting and finishing operations in almost all industries. Coated Abrasives Bonded Abrasives Super Abrasives Synthetic Diamonds Allied Products Coated Abrasives These are manufactured by depositing grains over a backing material like cloth, paper or fibre. Depending on the requirement of the customer, the backing material and type of grains will vary. There are various types of grains like sintered aluminium oxide, silicon carbide, zircon, emery and flint. The grains are of varied sizes referred as 'grits' and their sizes also vary from grit 12 to grit 2000. The backing on which these grains are coated will vary depending on the industry and application to which the coated abrasives are supplied. Initially, the grains are deposited over adhesive rich backing materials and jumbos of coated abrasives (up to 1000 metres) are manufactured. Then, depending on customer order/usage, these jumbos are converted into various shapes like sheets, belts, rolls, discs and flap wheels. The geometry of the product also differs from each other based on application equipment.

Coated abrasives are used in light polishing applications in automobile, auto ancillaries, white goods, hand and power tools, sanitary ware, furniture, fabrication and construction industry.

Bonded Abrasives These are divided into vitrified, resinoid and rubber products and manufactured by mixing grains with bonding material, moulding them to shape and then subjecting the output to firing or baking in high temperature and finishing the same to desired dimensions. The composition of the product depends on the type of grains and type of bonding materials used. Sizes will vary between 10 mm to 1200 mm with thickness ranging from 1 mm to 650 mm. Bonded abrasives are mostly in the form of wheels but also in other shapes such as segments, sticks etc. Bonded abrasives for internal purposes classified as Standard Products (i.e. those products which are made to standard dimensions, grit sizes, shapes and grain / bond composition). These are sold largely through the distribution channel. Non Standard Products are those products which are made to exact requirements of customers. CUMI's product range boasts of over 20,000 varieties of abrasives. Bonded Abrasives are used in diverse applications like floor polishing, fabrication, polishing, off-hand tool grinding and precision grinding of diverse products like crank shaft, balls and razor blade across a wide spectrum of industries ranging from automobile, construction, fabrication, steel, bearing etc. Diamond and cubic boron nitride (CBN) are known as Super abrasives. Wheels and tools made with these abrasives are used in high end applications . CUMI is present in this segment, through its joint venture Wendt India Ltd., Bangalore, India and also Jingri-CUMI Super Hard Materials Company Ltd., Yanjiao, China, The major user industries for super abrasives are automobile, engineering, cutting tools, refractoriness, ceramics tile, glass and steel. The characteristics of abrasives industry are as follows:

Diverse industrial applications Perceivably low threats from substitute products Adequate raw material availability Application engineering support to users

The key success factors are quality, cost, delivery and application engineering. Key inputs are abrasive grains (a large portion of which is captively procured) electricity, processed cloth, paper and resins. The global abrasives industry is about USD 13 billion. The major players are Saint Gobain, Tyrolit, Winterthur, Sia Abrasives and 3M. Till last year, CUMI was primarily an Indian player. The acquisition of Volzhsky Abrasive Works, Russia and the establishment of the Joint Venture viz. Jingri-CUMI Super Hard Materials Co. Limited in China has given CUMI a strong presence in the Russian markets and also a sound base for increasing its global penetration. In India, CUMI is the market leader. Apart from CUMI, Grindwell Norton Ltd. (part of the Saint Gobain group) is a major player in the domestic industry. 3M specializes in coated abrasives. In addition, John Oakey & Mohan and SAK abrasives, are the other abrasives manufacturers of significance in India. The Indian market is also served by several small players operating in specific product lines and also imports. While high-end imports are certain specialty products from Europe, the low end ones are 'price only' products from China.

Synthetic Diamonds

This is one among the hardest man-made materials. It is used in processing of brittle-hard metal and non-metal material, widely applied in machinery, metallurgy, geology, building material, petroleum and electronic fields, etc. CUMI's joint venture in China is one of the leading Synthetic Diamond manufacturing companies in China. With an installed capacity of nearly 120 million carat of Diamonds, this units caters to customers located across Europe, the United States, South-east Asia apart from India. Allied Products Metal Working Fluids Apart from abrasives, CUMI also manufactures metal working fluids for grinding applications. In the metal working process, the right combination of machine, cutting tool and metalworking fluid is required to produce an acceptable part. Therefore this product line is a logical extension of CUMI's abrasives. Power Tools CUMI recently launched a range of power tools used in metal working, construction, wood working and interior decoration. Abrasives are used as accessories in power tools. The Company's strong brand image and well established marketing network provide good synergies for this product line with abrasives.

Murugappa Group The Murugappa Group, headquartered at Chennai, India, is a USD 2.4 billion (Rs 96 billion) conglomerate with interests in engineering, abrasives, fertilisers,

finance, bio-products and plantations. It has 29 companies under its umbrella, of which six are listed and actively traded on the National Stock Exchange and the Bombay Stock Exchange. Together, they have over 32,000 employees. PRODUCTS PROFILE
Inputs

Grains

Resins

Cloth

Power

Products

Coated Abrasives

User Industries

Industrial Diamonds - Captive Plants

Jingri - CUMI, Yanjiao, China Products

Wendt India, Hosur

Super Abrasives

Inputs

Chemicals, Base oil Plants

Electrical Parts

Chennai, India Products

Bangalore, India

Prince Edward Island, Canada

INCEPTION OF THE ORGANISATION: The company pioneered the manufacture of Coated and Bonded Abrasive in India in addition to the manufacture of Super Refractories, Electro Minerals, Industrial Ceramics and Ceramic Fibres. Today the company's range of over 20,000 different varieties of abrasives, refractory products and electro-minerals are manufactured in ten locations across various parts of the country. With state-of-the art facilities and strategic alliances with global partners, CUMI has achieved a reputation for quality and innovation.CUMI is one of the five manufacturers in the world with fully integrated operations that include mining, fusioning, wind and hydro power stations, manufacturing, marketing and distribution. Almost all of CUMI's ten manufacturing facilities have received the ISO 9001:2000 accreditation for quality standards. A well connected marketing and distribution network of offices and warehouses in India and abroad, ensure that service to customers is given prime importance. CUMI's constant innovation and product upgradation, through in-house R&D and strategic alliances with global leaders in grinding technology, have not only ensured it market leadership in India and abroad, but also international recognition as a manufacturer of quality abrasives and a provider of total grinding solutions.

CUMI's products are being exported to 43 countries spread across North America, Europe, Australia, South Africa and Asia. CUMIS CORPORATE GOVERENANCE: CUMIs should become a great company that in internationally recognize for high quality and consistency of products and services in the consistency of products and services in the field and of material sciences. Every employee has an equally important role to play in CUMI and we shall realize our goal through the strengths and commitment people. CUMI shall be an organization, which encourages initiatives, and innovation emphasizes individual development and important quality of life. Futures bring changes and we in CUMI shall influence the shape of the future with confidence.

CUMI GROWTH AND HIGHLIGHTS:


The group is also the first and only business group in Asia to have been awarded the IMD DISTINGUISHED FAMILY BUSINESS AWARD by the internationally famous Management Development institute located in the Lau same, Switzerland.

The companys range of over 20,000 different varieties of abrasives, refectory products and Electro minerals are matched by very few companies world wide. Almost all CUMIs ten Manufacturing facilities have received the ISO9002 accreditation for quality standard.

CUMI is the first to produce bonded and coated abrasives in the country. Largest integrated Manufacturer of abrasives in Asia. Only Electro cast refractory plant in India. Wide range of electro Minerals. First to produce ceramic fibre in India. High Tech Plasma coating. Foreign Exchange earnings are Rs.3006 in Lakhs. Foreign Exchange outgo is Rs.1307 in Lakhs. The abrasives division was awarded the third place in private sector category for the All India award instituted by the Institute of Cost and Work Accountants of India for Excellence in cost Management for 2003-2004. Company has also received the India Manufacturing Excellence Award for Managing Growth through change Institute by frust and Sullivan.

ANALYSIS OF BATCH KILN AND TUNNEL KILN Batch kiln disadvantages The fuel consumption of batch kiln is very high. The average consumption of fuel per ton is 400 lts against the tunnel kiln fuel consumption of 250 its per ton. The company decided to install new technology called tunnel kiln. The tunnel kiln capacity is 180 tons per month to reduce the power and fuel cost. Tunnel kiln is fuel efficient with lower power consumption compared to batch kiln. Now, the power and fuel prices are going up very often and it increases the cost of manufacturing to a great extent. Power and fuel cost alone is 12%of the manufacturing cost today against 7 to 8% two years back. The tunnel kiln requires an area of 63m 11m and the company had planned to install it in the existing finishing area which demands some modification in the existing building and relocation of some machineries. By, utilizing this opportunity to convert the existing virtual, modular operation to actual modular layout and improve the efficiency of the whole operation.

PRESENT SCENARIO OF THE PRODUCT PRODUCE BY CUMI The cumi company has 3 modules in verified and their product ranges are; M1-5 to8 dia product. M2-9 to 20dia product. M3-below 5 dia product.

PROCESS INVOLVED IN MANUFACTURING VIRTIFIED PRODUCTS ARE

ACTIVITY

DEPARTMENT

AREA

WEIGHING MIXING MOULDING DRYING

MOULDING

2670M

LOADING KILN FIRING FIRING UNLOADING 1530M

FEATURE OF TUNNEL KILN The following design features are incorporated into the dragon and Tc modular tunnel kiln design to ensure uniform and efficient firing grinding wheels.

Modular kiln construction The kiln will be designed in modular sidewall sections and fully assembled in house to insure a reduction in field assembly time and minimize interruption of existing operation. These sections will be complete with all burners, gas and air piping to each burner. Plus zone headers installed to facilitate erection.all electrical equipment will be installed and wired so, modules can easily be connected. The sidewall modules will be complete with all refractoriesinstalled.pre-fabricating sections allows for in house inspection before shipment ensuring a top quality product.

INSULATION BRICK AND CERAMIC FIBRE LINING A low mass brick and ceramic fibre kiln lining will permit the kiln to be shutdown or started up in 24 hours or less without damage to the kiln lining, also the low thermal mass lining allows for rapid adjustments to the temperature curve.

FLAT ROOF AND ROOF CONTROLS JETS IN THE PREHEAT AND COOLING ZONE The flat roof keeps the longitudinal gas flow down in the load minimizing crown drift.pressirized roof jet increases the flow of hot crown gases down through the load, making the best use of the available heat and improves top to bottom temperature uniformity. The main zone roof will be arched. DIRECT FIRING WITH HIGH VELOCITY BURNERS THE high velocity burners entrain ware space gases creating a recalculating action which increases the rute of heat transfer to the product and improve temperature uniformity, making faster firing cycles possible. These burners will use pre heated combustion air from the cooling zone. BURNERS THROUGHOUT THE LENGTH OF THE PREHEAT ZONE THESE burners can be used to shape and control the time temperature curve according to the product requirement. these burners will use pre heated combustion air from the cooling zone. CLEAN FIRING CONDITIONS For reasons of cleanliness all the combustion air piping from the external air header to the burners and arch nozzles will be made of corrosion resistant materials and a gas filter will be provided and dust filters to further ensure cleanliness. A TOTALLY INTEGRATED COMPUTER PROCESS MANAGEMENT SYSTEM This system allows precise automatic control of kiln temperature and pressures display and records kiln data, a monitor fuel consumption and annunciates critical kiln components.

KILN STRUCTURE

THE KILN WILL BE DESIGNED WITH A THICK STEEL cross member that set on the foundation pad.the roof panels will be constructed with expanded metal.the exterior and interior surface of the kiln shell will be painted to inhibit rust and or corrosion the kiln sidewall sections will be bolted together in the field. The lining will be divided into sections to conform with the prefabricated sections.the bench of the kiln at the base of the sidewall will be constructed of lightheight refractory units. The roof will be constructed using a hot face refractory suspended bricks backed up using ceramic fibre in pre heat and cooling zones with an arched roof in the main zone. The lining of the sidewalls will consists of an insulating brick hot face with ceramic fibre material backing.thermocouples and pressure reading openings are provided in the roof and side wall.

CHAPTER I INTRODUCTION:
Finance has aptly been called The Science of Money It studies the principles and the methods of obtaining control of money from those who have saved it, and of administering it by those into whose control it passes.

Finance is the process of conversion of accumulated funds to productive use

Finance may be defined as that administrative are or set of administrative functions in an organization which dealt with the arrangement of cash and credit so that the organization may have the means to carry out its objective as satisfactory as possible. Financial management is the managerial activity which is concerned with the Planning and controlling of the firms financial sources.

Financial performance is the process of identifying the financial strength and weakness of the firm by properly establishing relationship between the items of the balance sheets and the profit and loss account.

The basis for financial planning, analysis & decision-making is the financial information predict, compare and evaluate the firms earning ability.

In the financial statements (or) accounting reports is contained of company financial information.

Three basic financial statements of great significance to owners, management and Investors are balance sheet, profit & loss account & cash flow statement.

MEANING: Financial statement refers to a package of statement such as balance sheet, income statement, fund flow statement, cash flow statement and statement of retained earnings. The balance sheet and income statement are traditional financial statements other statements are prepared to supplement them.

DEFINITION: According to the American Institute of certified public Accounts, Financial statement reflects a combination of recorded facts accounting principles & personal Judgment. The company issue to their shareholders, the annual report is by far the most important. Two types of information are given in this report. 1. Describes the firms operating during the past year and discusses new developments that will affect future operations. 2. There are four basic financial statements Income statement Balance sheet Statement of Re-tined earnings. Fund flow statement

PURPOSE:

The status of investments in the business. The results achieved during a period under review.

Changes in Financial position statement of uses: It has an analytical value as well as it is an important tool. It gives a clear picture of the causes of changes in the companys working capital (or) cash flow position. Which they have been financed from the internal & external sources. Nature: The data taken from accounting records it may be income statement (or) Annual reports. Financial books are not depicted. (eg) Fixed Assets are shown at cost irrespective of their Market. Certain accounting principles & Concepts, conventions are followed in the preparation of financial statement. It has an important bearing on the financial statements. (eg) stock valuation depends on the personal judgment

Carborundum Universal limited, is a subsidiary of Murugappa group which manufactures abrasives. This project was done in Carborundum Universal, Bonded division, Hour. Finance is the life-blood of the every business industrial. Without finance neither any business can be started not successfully run. Provision of sufficient funds at the required time is the key of success of a concern. As a matter

of fact, finance may be said to be the circulation system of the economic body, making possible the needed co-operation between the many units of activity. In an organism composed of a myriad of separate enterprises, each working for its own ends but simultaneously making a contribution to the system as a whole, some force is necessary to bring about direction and co-ordination. Something must direct the flow of economic activity and facilitate its smooth operation. Finance is the agent that produces this result. Finance may be defined as the provision of money at the time when it is required. Finance money refers to the management flow of money through an organization. It concern with the application of skills in the manipulation, use and control of money. Different authorities have interpreted the term finance differently. Finance is the process of conversion of accumulated funds to productive use. It is so intermingled with other economic forces that there is difficulty in appreciating the role it plays. Finance may be defined as the administrative area or set the administrative functions in an organization which related with the arrangement of cash and credit so that the organization may heir the means to carryout its objective as satisfactory as possible. The main objectives comprise financial planning, raising the need funds, financial analysis and control. The objectives of the study were (a) to find out the financial goals structure and the relative significance of the financial goals pursued by companies in India and (b) to examine if a companys financial performance was related to the goal structure it follows. A questionnaire was sent to each company listed in the Investors Guide of the Economic Times. Sixty one questionnaires were received back, of which fifty seven were found useable for analysis. The information about

the actual financial performance for 42 of these companies, for which complete data were available, was obtained form the Bombay Stock Exchange Official Directory. An analysis of the relationship between the goals pursued by them and their actual performance was conducted using dummy variable regression analysis method. The results of the study are: Companies in India follow multiple financial goals. Out of the total respondent companies, only 2.4 per cent inter-alia consider maximization of market value per share in he financial decision-making. From the overall rank ordering of the financial goals the following four goals could be isolated as more prevalent in practice: An international comparison of financial goals reveals that two goals viz. maximizing the growth in sales and ensuring that funds are available are significantly related with the actual financial performance of the companies.

1.1.1 NEED OF THE STUDY: To identify the financial strengths and weakness of the organization. And helps to the current year financial position and control the expenditure. Highlights the utility of financial ratios in credit analysis and competitive analysis as well as in determining the financial capability of the firm. To compare the current financial position with previous years.

To preparing the financial budget for the upcoming years. To Emphasis the need and utility of preparing a comprehensive statement of financial position.

1.1.2 SCOPE OF THE STUDY: To making reserves for growth and expansion of the organization and helps to Top management to makes financial planning and strategy. Insuring maximum operational efficiency by efficient and effective utilization of funds. It provides opportunities to further investment decision, planning, and controlling of firms financial resources.

It helps to administrative the allocation of funds; budgetary control and maintenance of are liquidity level. It involves comparison for a useful interpretation of the optimum level financial statements. It provides insight into the growth or decline of the sale or profit over the years.

1.1.3 OBJECTIVE OF THE STUDY: PRIMARY OBJECTIVE: A STUDY ON FINANCIAL PERFORMANCE ANALYSIS WITH SPECIAL REFERANCE TO CARBORUNDUM UNVERSAL LIMITED HOUSER. SECONDARY OBJECTIVE: To find out the financial stability of a business concern.

To analyses the liquidity / leverage position of the company to identify whether the company is able to meet their short term obligations. To analysis the profitability position of the company. To analysis the effective utilization of fund. To analysis the financial health of the company.

1.1.4 RESEARCH DESIGN:


METHODOLOGY Since the study is confined to a particular company namely Carborundum Universal Limited. An analytical study method is followed in the study. In the methodology contains the type of research, type of data, sources of data and period of this study and tools for analysis also given in these following lines:

1)

TYPE OF RESEARCH

Since the study is confined to particular company. The analytical method is followed in this study. 2) TYPE OF DATA

This study is based on secondary data. The secondary data refers to those data which are already available in the firm internal records. For the study, secondary data were collected from the magazine, company records and from the company website.

3)

SOURCE OF DATA

This study is manly based on the secondary data which is collected from audited Profit & loss account and balance sheet of the company. 4) PERIOD OF THE STUDY The study covers a period of 5 year starting from 2003 to 2007.

5) SAMPLING Out of 54 annual reports I have taken last 5 years annual report. 6) TOOLS USED IN ANALYSIS Statistical Tools: Correlation Accounting Tools: Ratio analysis Comparative financial statement Common size statement Fund flow statement

1.1.5 LIMITATION

OF THE STUDY

The implementation of the suggestions requires more expert advice. Competitive natures of organization prevent revealing of confidential details. Short period of study of 2 months.

1.2 REVIEW OF LITERATURE


American institute of certified public accounts

"Financial statements are prepared of presenting a periodical review or report by the management and deal with the status of the investment in the business and the results achieved during the period under review". Uma maheswari, Financial management

Financial statements analysis is largely a study of relationships among the various financial factors in a business, as disclosed by a single set of statement a study of these factors as shown in a series at statements Lawrence C. Rhyne (Banking & Finance Journal)

The relationship between financial performance and characteristics of corporate planning systems was investigated / Planning systems that combined an external focus with a long-term perspective were found to be associated with superior 10 year local return to stockholders. A lagged relationship between such systems and 4 - year average annual returns to investors also was identified. The impact at comprehensive planning on financial performance is a study conducted by D.Robely wood, and it was published in the Academy an management Journal.

This Paper examines the relationship between formal planning procedures and financial performance examined for a sample as large U.S Banks. If was found that the sample banks that engaged incomprehensive long range planning significantly out performed those that had no formal planning system. They also out performance a randomly selected control group. Dr. D. RAghirpatta reddy P. Kameswari The management account August- 2004 page No.638 Working capital management practices in Pharma industry. The Cipla limited has been selected for case study of working Capital management in the period 19982003.

The current ratio, quick ratio, net working capital position and the working capital turnover ratio of Cipla have been found to be with in our slightly fluctuating around the Indian Pharmaceutical industry standards indicating an over all efficiency in the management of the company's working capital ACCRUAL RATIOS Liquidity Quick ratio = current assets less inventories / current liabilities Defensive interval measure = current assets less inventories / daily expenditures to operations Net working capital to total asset Capital Adequacy Total liabilities / sales Long-term debt to equity times interest earned earnings before interest and taxes plus depreciation / interest Profitability return (after interest and taxes) on equity net income / common equity return on total assets operating margin / sales Efficiency (turnover ratios) inventory turnover period average inventory / cost of goods sold accounts receivable turnover period receivables / sales CORRELATION

The relationship of quantitative nature. The appropriate statistical tool for

discovering and measuring the relationship and expressing it in brief formula is known as correlation. CROXTON AND COWDEN

According to the statistician A.M.Tuttle,


Correlation is an analysis of the co variation between two or more

variables. Concept of correlation Correlation is a statistical tool which studies the relationship between two

variables, and correlation analysis involves various methods and techniques used for studying and measuring the extent of the relationship between two variables. The correlation expresses rates between the groups of items but bot between

the individual items. The relationship between the two variables in not functional. MEANING : SECULAR TREND OR TREND: Secular trend is the general tendency of the time series data to increase or decrease or stagnate during a long period of time an upward tendency is usually observed in time series relating to population, production and sales, prices, income money in circulation while a downward medical sciences, illiteracy,etc thus trend is either upward or downward. It should be clearly understood that trend is the general, smooth, long term average tendency. It is not necessary that the increase or decrease should be in the same direction throughout the given period. With the help of a long term trend, it is possible to determine and present the direction of change.

QUALITY CERTIFICATION Quality Policy We Shall Proactively Meet Customer Expectations By Providing Quality Products And Services.

This Will Be Achieved Through:

Total commitment of the management in implementing an effective quality

management system.

Continual technological development to fulfill changing needs of the

customer.

Total employee involvement for continuous improvement. Enhancing employee competence through education and training Building mutually beneficial relationship with suppliers

QUALITY POLICY:

We shall proactively meet customer expectations by providing quality products and services.

This will be achieved through:

Total commitment of the management in implementing an effective quality management system. Continual technological development to fulfill changing needs of the customer Total employee involvement for continuous improvement. Enhancing employee competence through education and training Building mutually beneficial relationship with suppliers The companies designed manufacture and delivered productivity and provide service that result in total customer satisfaction. The company implemented quality system in line with ISO 9000 service of standard through all our people The company strives from technological superiority system in purist of market leadership through continuous improvement. The company will work constantly with the vendors to ensure quality inputs.

Vision statement:

To become an admired company in abrasives and technical ceramics driver by innovation continuously enhancing take holders wealth.

Mission Statement

We will be high performance achieving state of Rs 1200 crores by 2010 through continuous important in product processes and people.

NATURE OF BUSINESS
MANUFACTURING DEPARTMENT The company continues to follow prudent manufacturing practices in order to lower cost of production and enhance performance on quality and delivery parameters.

The touch-time concept introduced a few years ago has turned out as a productivity-enhancing shift. Further, the lean manufacturing practices introduced last year has helped in reducing WIP, throughput time and increasing on-time delivery. A capital expenditure of Rs.184 million was incurred during the year for enhancing capability to manufacture specialized products and for setting up a new express line for exports. These investments are targeted at creating application specific capabilities, based on customer requirements. The investment in upgrading existing machinery continues to be an area of focus. The modular experiment with the new, depressed centre wheel line in the previous year was successful. The company is planning more such investments in future with a view to retaining its competitive edge. Quality assurance through TQM and Six-sigma programmes continue to yield positive results lower rejects and wastages, increased uptime, enhanced productivity and greater consistency of products. In recognition of the progressive manufacturing culture at CUMI, Frost and Sullivan presented a special award to

the company on Growth through change at the Indian Manufacturing Excellence Awards, 2004.

BOARD OF DIRECTORS 1. Mr. M.M. Murugappan (chairman) 2. Mr. S.N. Talwar (Non-executive & Independent Director) 3. Mr. Subodh kumar (Non-executive & Independent Director) 4. Mr. T.L. Palani kumar (Non-executive & Independent Director) 5. Mr. T.M.M. Nambiar (Non-executive & Independent Director) 6. Mr. A. Vellayan (Promoter & Non-executive Director) 7. Mr. Sridhar Ganesh (Non-executive Director) 8. Mr. Srinivasan (Executive Director)

MANAGEMENT COMMTTEE: 1. K. Srinivasan, Managing Director 2. V. Ramesh,Chief Financial Officer 3. N. Kishore, President - Abrasives & Technology 4. P. R. Ravi, President - Ceramics & EMD 5. M. Muthiah, Vice President HR

Company Secretary: S. Dhanvanth Kumar.

Auditors:

Deloitte Haskins & Sells, Chennai

BANKERS: State Bank of Indai Standard Chartered Bank Bank of America IDBI Bank Limited

CHAPTER II
CURRENT RATIO 2.1.1 Current Ratio = Current Asset / Current Liabilities
(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

CURRENT ASSET
1355.16 1411.04 1733.71 2228.35 2898.31

CURRENT LIABILITIES
447.33 475.92 646.45 857.42 1030.9

RATIO
3.02 2.96 2.68 2.59 2.81

2.1.1 Current Ratio Trend

RATIO 3.1 3 2.9 2.8 2.7 2.6 2.5 2.4 2.3 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 RATIO

INTERPRETATION:
The above table inferred that the company has equal proportion in 2006. The company current radio is dissatisfactory. The current radio trends have gone down at every year.

2.1.2. LIQUID RATIOS Liquid Ratio = Liquid Assets / Liquid liabilities


(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

LIQUID ASSETS
967.8 959.08 1219.3 1489.67 1952.74

LIQUID LIABILITIES
447.33 475.92 646 857.42 1030.9

RATIO
2.17 2.02 1.89 1.74 1.90

2.1.2. LIQUID RATIOS TREND

RATIO

2.5 2 1.5 RATIO 1 0.5 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

INTERPRETATION:
The above table inferred that the company has equal proportion in 2006. The company Liquid Ratio is dissatisfactory. The Liquid Ratio trends have gone down at every year.

2.1.3. ABSOLUTE LIQUID RATIO Absolute Liquid Ratio = Absolute Liquid Assets / Liquid Liabilities
(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

ABSOLUTE LIQUID ASSETS


1.245 1348.25 1587.91 1955.09 2728.6

LIQUID LIABILITIES
447.33 475.92 646.45 857.42 1030.9

RATIO
0.00278318 2.83293411 2.45635393 2.28020107 2.64681346

2.1.3. ABSOLUTE LIQUID RATIO TREND

RATIO

3 2.5 2 1.5 1 0.5 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 RATIO

INTERPRETATION:
The above table inferred that the company has equal proportion in 2006. The company cash position is dissatisfactory. The cash position trends have gone down at every year.

2.1.4. SOLVENCY RATIOS

Proprietary Ratio Proprietary Ratio = Total Shareholders Fund / Total Assets


(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

TOTAL SHAREHOLDERS FUND TOTAL ASSETS RATIO


1715.19 1191.96 2374.16 2739.73 3518.75 2252.8 2534.05 3410.12 4720.84 6144.62 0.76 0.79 0.69 0.58 0.57

2.1.4. SOLVENCY RATIOS TREND

Ratio 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio

INTERPRETATION: The above table inferred that the company has equal proportion in 2006. The company cash position is dissatisfactory. The cash position trends have gone down at every year.

2.1.5. FIXED ASSET TO PROPRIETARY FUND RATIO

Fixed Asset to Proprietary Fund = Net Assets / Proprietary fund


(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

NET FIXED ASSETS


882.53 1092.62 1251.46 2103.17 2640.41

PROPRIETARY FUND
1715.19 1991.96 2374.16 2739.73 3518.75

RATIO
0.51 0.55 0.53 0.77 0.75

2.1.5. FIXED ASSET TO PROPRIETARY FUND RATIO TREND

Ratio

0.8 0.7 0.6

0.5
0.4 0.3 0.2 0.1 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio

INTERPRETATION: The above the table shows the proportion of fixed assets to proprietors fund ratio. It is every year has gone down. The level of fixed assets ratio lower than proprietors fund. But 2006 to 2008 increasing So company fixed assets ratio is this year satisfactory.

2.1.6. CURRENT ASSET TO PROPRIETARY FUND RATIO

Current Asset to Proprietary Fund = Current Assets / Proprietary fund


(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

CURRENT ASSETS
1355.16 1411.04 1733.71 2228.35 2898.31

PROPRIETARY FUND
1715.19 1991.96 2374.16 2739.73 3518.75

RATIO
0.79 0.71 0.73 0.81 0.82

2.1.6. CURRENT ASSET TO PROPRIETARY FUND RATIO TREND

Ratio

0.82 0.8 0.78 0.76 0.74 0.72 0.7 0.68 0.66 0.64 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio

INTERPRETATION: The above table shows current assets to proprietors fund ratio of the firm. The current asset ratios have gone up every year. The current asset ratio has increased at 0.8in 2007, 0.82 in 2008. So the current Assets Ratio gives the satisfactory level for all years

2.1.7. INVENTORY TO CURRENT ASSET RATIO

Inventory to Current Asset Ratio = Inventory / Current Assets


(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

INVENTORY
967.80 451.96 51.41 738.68 945.57

CURRENT ASSETS
1355.16 959.08 1219.3 1489.67 1952.74

RATIO
0.40 0.47 0.42 0.49 0.48

2.1.7. INVENTORY TO CURRENT ASSET RATIO TREND

Ratio

0.5 0.45 0.4 0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio

INTERPRETATION: The above table shows Inventory to Current Asset Ratio of the firm. The inventory current asset ratios have gone up every year. The current asset ratio has increased at 0.45in 2007, 0.5 in 2008. So the current Assets Ratio gives the satisfactory level for all years.

2.1.7. DEBT EQUITY RATIO

Debt Equity Ratio = Long term debt / Shareholders fund


(Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

LONG TERM DEBT


403.97 405.88 723.40 1814.51 3010.04

SHAREHOLDERS FUND
1715 1991.96 2374.16 2739.73 3518.75

RATIO
0.23 0.20 0.30 0.66 0.86

2.1.7. DEBT EQUITY RATIO TREND

Ratio

0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio

INTERPRETATION: The above table shows Debt Equity Ratio of the firm. The Debt Equity Ratio have gone up every year. but 2004-2005 this year decreeing .The current asset ratio has increased at 0.8in 2007, 0.9 in 2008. So the current Assets Ratio gives the satisfactory level for all years

2.1.8. PROFITABILITY RATIOS NET PROFIT RATIO NET PROFIT RATIO = NET PROFIT/NET SALES*100 (Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

NET PROFIT
317.17 384.24 766.13 586.61 971.70

NET SALES
2748.35 3112.83 3721.53 4645.56 5830.10

PERCENTAGE
11.54% 12.34% 20.59% 12.63% 16.67%

2.1.8. PROFITABILITY RATIOS TREND

RATIO

25.00% 20.00% 15.00% RATIO 10.00% 5.00% 0.00% 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

INTERPRETATION: The above table shows net profit ratio of the firm. The net profit ratio change every year. But current year incrased current asset ratio has increased at 10% to 15%in 2007, 15% to 20% in 2008. So the current Assets Ratio gives the satisfactory level for all years

2.1.9. RETURN ON TOTAL ASSETS


RETURN ON TOTAL ASSETS=RETURN/TOTAL ASSET*100 (Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RETURN
317.17 384.24 766.13 586.61 971.70

TOTAL ASSETS
2705.05 3012.34 3920.89 5618.20 7842.30

PERCENTAGE
11.73% 12.76% 19.54% 10.44% 12.39%

2.1.9. RETURN ON TOTAL ASSETS TREND

RATIO

20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 RATIO

INTERPRETATION: The above table shows return on total assets of the firm. The return on total assets ratios have decreased . The return on total assets ratio has decreased have gone down at every year. So company return on total assets ratio is this year satisfactory.

2.1.10. RETURN ON SHAREHOLDERS RETURN


RETURN ON SHAREHOLDERS RETURN = RETURN/SHAREHOLDERS FUND*100 (Rs. In million)

YEAR
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RETURN
317.17 384.24 766.13 586.61 971.70

SHARE HOLDERS FUND


1715.19 1991.96 2374.16 2739.73 3518.75

PERCENTAGE
18.49% 19.29% 32.27% 21.41% 27.15%

2.1.10. RETURN ON SHAREHOLDERS RETURN TREND

RATIO

35.00% 30.00% 25.00% 20.00% RATIO 15.00% 10.00% 5.00% 0.00% 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

INTERPRETATION: The above table shows return shareholders return S of the firm. The shareholders return on total assets ratios have decreased . The return on shareholders return has decreased have gone down at every year. So company return on total assets ratio is this year satisfactory.

2.2.1COMPARITIVE BALANCESHEET
Column1 particulars assets: fixed assets net block capital work in progress investments total fixed assets(a) current assets: inventories sundry debtors Cash & bank balances Loans & advances total current assets(b) total assets (a+b=c) liabilities: current liability provisions total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability total long term liability(e) Capita l& reserves: share capital Reserves & surplus share holders fund(f) total liability&capital(h) Column2 Column3 2007 2008 Column4 increase/decrease in amount Column5 increase/decrease in percentage

2103.2 389.32 897.36 3389.9 738.68 937.43 273.26 278.98 2228.4 5618.2 693.59 163.83 857.42

2640.41 605.9 1697.68 4943.99 945.57 1322.86 169.71 460.17 2898.31 7842.3 815.71 215.19 1030.9

537.24 216.58 800.32 1554.14 206.89 385.43 -103.55 181.19 669.96 2224.1 122.12 51.36 173.48

25.544 55.630 89.186 45.846 28.008 41.115 -37.894 64.947 30.065 39.587 17.606 31.349 20.232

1797 17.49 206.54 2021.1

2267.27 726.93 15.84 282.61 3292.65

470.25 726.93 -1.65 76.07 1271.6

26.168 -9.433 36.830 62.917

186.71 2553 2739.7 5618.2

186.71 3332.04 3518.75 7842.3

0 779.02 779.02 2224.1

0 30.513 28.434 39.587

2.2.2COMPARITIVE BALANCESHEET
Column1 particulars assets: fixed assets net block capital work in progress investments total fixed assets(a) current assets: inventories sundry debtors Cash & bank balances Loans & advances total current assets(b) total assets (a+b=c) liabilities: current liability provisions total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability total long term liability(e) Capital & reserves: share capital Reserves & surplus share holders fund(f) Total liability& capital(h) 186.71 2187.45 2374.16 3920.89 186.71 2553.02 2739.73 5618.2 0 365.57 365.57 1697.31 0 16.712 15.397 43.288 652.11 60.55 10.74 176.88 900.28 17.49 206.54 2021.05 1797.02 1144.91 -60.55 6.75 29.66 1120.77 62.849 16.768 124.491 175.570 Column2 Column3 2006 2007 Column4 increase/decrease in amount Column5 increase/decrease in percentage

1251.46 424.95 510.77 2187.18 514.41 824.9 145.8 248.6 1733.71 3920.89 446.2 200.25 646.45

2103.17 389.32 897.36 3389.85 738.68 937.43 273.26 278.98 2228.35 5618.2 693.59 163.83 857.42

851.71 -35.63 386.59 1202.67 224.27 112.53 127.46 30.38 494.64 1697.31 247.39 -36.42 210.97

68.057 -8.384 75.687 54.987 43.597 13.641 87.421 12.220 28.530 43.288 55.443 -18.187 32.635

2.2.3COMPARITIVE BALANCESHEET
particulars assets: fixed assets net block capital work in progress investments total fixed assets(a) current assets: inventories sundry debtors Cash & bank balances Loans & advances total current assets(b) total assets (a+b=c) liabilities: current liability provisions total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability total long term liability(e) capital& reserves: share capital Reserves & surplus share holders fund(f) Total liability &capital(h) 369.48 106.44 475.92 446.2 200.25 646.45 76.72 93.81 170.53 20.764 88.134 35.831 451.96 678.42 62.79 217.87 1411.04 3012.34 514.41 824.9 145.8 248.6 1733.71 3920.89 62.45 146.48 83.01 30.73 322.67 908.55 13.817 21.591 132.202 14.104 22.867 30.160 1092.62 30.39 478.29 1601.3 1251.46 424.95 510.77 2187.18 158.84 394.56 32.48 585.88 14.537 1298.321 6.790 36.587 2005 2006 increase/decrease in amount increase/decrease in percentage

275.92 119.02 10.94 138.58 544.46

652.11 60.55 10.74 176.88 900.28

376.19 -58.47 -0.2 38.3 355.82

136.340 -1.828 27.637 65.352

93.35 1898.61 1991.96 3012.34

186.71 2187.45 2374.16 3920.89

93.36 288.84 382.2 908.55

100.010 15.213 19.187 30.160

2.2.4COMPARITIVE BALANCESHEET
particulars assets: fixed assets net block capital work in progress investments total fixed assets(a) current assets: inventories sundry debtors Cash & bank balances Loans & advances total current assets(b) total assets (a+b=c) liabilities: current liability provisions total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability 8.19 138.5 315.6 9 131.6 4 447.3 3 395.7 8 369.4 8 106.4 4 475.9 2 275.9 2 119.0 2 10.94 138.5 53.79 -25.2 28.59 17.038 -19.143 6.391 387.3 6 665.9 8 110.1 6 191.6 6 1355. 16 2705. 05 451.9 6 678.4 2 62.79 217.8 7 1411. 04 3012. 34 64.6 12.44 -47.37 26.21 55.88 307.29 16.676 1.867 -43.001 13.675 4.123 11.359 882.5 3 15.11 452.2 5 1349. 89 1092. 62 30.39 478.2 9S 1601. 3 210.09 15.28 26.04 251.41 23.805 101.125 5.757 18.624 2004 2005 increase/decrease in amount increase/decrease in percentage

-119.86 119.02 2.75 0.02

-30.284

33.577 0.014

6 total long term liability(e) Capital & reserves: share capital Reserves & surplus share holders fund(f) total liability capital(h) 542.5 3 93.35 1621. 84 1715. 19 2705. 05

8 544.4 6 93.35 1898. 61 1991. 96 3012. 34 1.93 0.355

0 276.77 276.77 307.29

0 17.065 16.136 11.359

2.2.5COMPARITIVE BALANCESHEET
particulars assets: fixed assets net block capital work in progress investments deferred tax asset total fixed assets(a) current assets: inventories sundry debtors cash& bank balances loans& advances 369.48 387.36 592.37 665.98 83.56 110.16 236.13 191.66 17.88 73.61 26.6 -44.47 4.839 12.426 31.833 -18.832 926.19 882.53 18.57 15.11 -43.66 -3.46 -49.72 -128.47 -4.713 -18.632 -9.904 -8.690 2003 2004 increse/decrease in amount increse/decrease in percentage

501.97 452.25 31.63 1478.3 1349.8 6 9

total current assets(b) total assets (a+b=c) liabilities: current liability provisions total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability total long term liability(e) capital reserves: share capital reserves surplus

1281.5 1355.1 4 6 2759.9 2705.0 5 275.43 315.69 105.31 131.64 380.74 447.33

73.62 -54.85

5.744 -1.987

40.26 26.33 66.59

14.617 25.002 17.489

499.06 395.78 151.63 6.96 8.19

-103.28 -151.63 1.23 -52.56 -306.24

-20.694 17.672 -27.501 -36.080

191.12 138.56 848.77 542.53

93.35

93.35

0 184.8 184.8 -54.85

0 12.859 12.075 -1.987

1437.0 1621.8 4 4 share holders fund(f) 1530.3 1715.1 9 9 2759.9 2705.0 total liability 5 capital(h)

2.3.1Common size statement

particulars
Assets: Fixed assets net block capital work in progress investments deferred tax asset
Total fixed assets(a) current assets:

2004

percentage

882.53 15.11 452.25


1349.89

32.625% 0.5585% 16.718%


49.902%

inventories

387.36

14.319%

sundry debtors Cash & bank balances loans advances Total current assets(b) Total assets (a+b=c) Liabilities: current liability provisions
Total current liabilities(d)

665.98 110.16 191.66 1355.16 2705.05 315.69 131.64


447.33

24.619% 4.072% 7.085% 50.097% 100% 11.670% 4.866%


16.536%

long term liability: secured loans un secured loans long term lease liability deferred tax liability total long term liability(e) capital reserves: share capital reserves surplus
share holders fund(f) Total liability capital(h)

395.78 8.19 138.56 542.53

14.631% 0 0.302% 5.122% 20.056%

93.35
1621.84
1715.19 2705.05

3.450%
59.956%
63.406% 100%

2.3.2 Common size statement particulars Assets: fixed assets net block capital work in progress investments deferred tax asset Total fixed assets(a) current assets:

2005 percentage

1092.62 30.39 478.29 0 1601.3

36.271% 1.008% 15.877% 0 53.158%

inventories sundry debtors Cash & bank balances loans advances Total current assets(b) Total assets (a+b=c) liabilities: current liability provisions Total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability Total long term liability(e) capital reserves: share capital reserves surplus share holders fund(f)
Total liability capital(h)

451.96 678.42 62.79 217.87 1411.04 3012.34 369.48 106.44 475.92 275.92 119.02 10.94 138.58 544.46 93.35 1898.61 1991.96
3012.34

15.003% 22.521% 2.084% 7.232% 46.841% 100% 12.265% 3.533% 15.799% 9.159% 3.951% 0.363% 4.600% 18.074% 3.098% 63.027% 66.126%
100%

2.3.3 Common size statement particulars assets: fixed assets net block capital work in progress investments deferred tax asset Total fixed assets(a) current assets:

2006 percentage

1251.46 424.95 510.77 0 2187.18

31.917% 10.838% 13.026% 0% 55.782%

inventories sundry debtors cash bank balances loans advances Total current assets(b) Total assets (a+b=c) liabilities: current liability provisions Total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability Total long term liability(e) capital reserves: share capital reserves surplus share holders fund(f) Total liability capital(h) 2.3.4 Common size statement

514.41 824.9 145.8 248.6 1733.71 3920.89 446.2 200.25 646.45 652.11 60.55 10.74 176.88 900.28 186.71 2187.45 2374.16 3920.89

13.119% 21.038% 3.718% 6.340% 44.217% 100% 11.380% 5.107% 16.487% 16.631% 1.544% 0.273% 4.511% 22.961% 4.761% 55.789% 60.551% 100%

particulars Assets:
fixed assets net block capital work in progress investments deferred tax asset Total fixed assets(a) current assets:

2007 percentage

2103.17 389.32 897.36 0 3389.85

37.4345% 6.929% 15.972% 0 60.336%

inventories sundry debtors Cash & bank balances Loans & advances Total current assets(b) Total assets (a+b=c) liabilities: current liability provisions Total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability Total long term liability(e) Capital & reserves: share capital Reserves & surplus share holders fund(f) Total liability & capital(h) 2.3.5 Common size statement

738.68 937.43 273.26 278.98 2228.35 5618.2 693.59 163.83 857.42 1797.02 0 17.49 206.54 2021.05 186.71 2553.02 2739.73 5618.2

13.147% 16.685% 4.863% 4.965% 39.663% 100% 12.345% 2.916% 15.261% 31.98% 0 0.31% 3.67% 35.97% 3.32% 45.44% 48.76% 100%

particulars Assets:
fixed assets net block capital work in progress investments deferred tax asset Total fixed assets(a)

2007 percentage

2103.17 389.32 897.36 0 3389.85

37.4345% 6.929% 15.972% 0 60.336%

Current assets: inventories sundry debtors Cash & bank balances Loans & advances Total current assets(b) Total assets (a+b=c) liabilities: current liability provisions Total current liabilities(d) long term liability: secured loans un secured loans long term lease liability deferred tax liability Total long term liability(e) Capital & reserves: share capital Reserves & surplus share holders fund(f) Total liability & capital(h) 2.3.6 Common size statement particulars Assets:

738.68 937.43 273.26 278.98 2228.35 5618.2 693.59 163.83 857.42 1797.02 0 17.49 206.54 2021.05 186.71 2553.02 2739.73 5618.2

13.147% 16.685% 4.863% 4.965% 39.663% 100% 12.345% 2.916% 15.261% 31.98% 0 0.31% 3.67% 35.97% 3.32% 45.44% 48.76% 100%

2008 Percentage

fixed assets net block capital work in progress investments deferred tax asset
Total fixed assets(a)

2640.41 605.9 1697.68 0 4943.99

33.66% 7.72% 21.64% 0 63.04%

Current assets:

inventories sundry debtors Cash & bank balances Loans & advances
Total current assets(b) Total assets (a+b=c)

945.57 1322.86 169.71 460.17 2898.31 7842.3 815.71 215 1030.71 2267.27 726.93 15.84 282.61 3292.65 186.71 3332.04 3518.75 7842.11

12.05% 16.86% 2.16% 5.86% 36.95% 100% 10.40% 2.74% 13.14% 28.91% 9.26% 0.20% 3.60% 41.98% 2.38% 42.48% 44.86% 100%

liabilities: current liability provisions


Total current liabilities(d)

long term liability: secured loans un secured loans long term lease liability deferred tax liability
Total long term liability(e)

Capital & reserves: share capital Reserves & surplus


share holders fund(f) Total liability & capital(h)

2.4.1 TREND ANALYSIS FOR SALES


year Sales(y) Deviafion form 2005 X XY -2 -1 0 1 2 -5496.70 -3112.83 0.00 4645.56 11660.20 X2 4 1 0 1 4

2003-04 2004-05 2005-06 2006-07 2007-08

2748.35 3112.83 3721.53 4645.56 5830.10

N=5 Y= a+bx

y=20058.37

x=0 xy7696.23

x210

a=y/n = 20058.37/5 = 4011.67 b=xy/x2= 7696.23/10 =769.62 Estimation for 2003-04 = y = 4011.67 + 769.62(-2) = 2472.43 2004-05 = y = 4011.67 + 769.62(-1) = 3242.05 2005-06 = y = 4011.67 + 769.62(-0) = 4011.67 2006-07 = y = 4011.67 + 769.62 (1) = 4781.29 2007-08 = y = 4011.67 + 769.62 (2) = 5550.91 2008-09 = y = 4011.67 + 769.62 (3) = 6320.53

2.4.2 TREND ANALYSIS FOR PROFIT


year Sales(y) Deviafion form 2005 X 2003-04 2004-05 2005-06 2006-07 2007-08 N=5 317.17 384.24 766.13 586.61 971.70 y=3025.85 XY X2 4 1 0 1 4 x210

-2 -634.34 -1 -384.24 0 0.00 1 586.61 2 1943.4 x=0 xy=1511.43

Y= a+bx a=y/n = 3025.85/5 = 605.17 b=xy/x2= 1511.43/10 =151.14 Estimation for 2003-04 = y = 605.17 + 151.14 (-2) = 302.89 2004-05 = y = 605.17 + 151.14 (-1 = 454.03 2005-06 = y = 605.17 + 151.14 (0) = 605.17 2006-07 = y = 605.17 + 151.14 (1) = 756.31 2007-08 y = 605.17 + 151.14 (2) = 907.45 2008-09= y = 605.17 + 151.14 (3) = 1058.59

2.5.1 CORRELATION FOR CURRENT ASSETS AND DEBTORS

year

Current assets (x) 1355.16 1411.04 1733.71 2228.35 2898.31 9626.57 -570.15 -514.27 -191.6 303.4 973.0 0.8 2748.35 3112.83 3721.53 4645.56 5830.10 20058.37 -1263.32 -898.84 -290.14 633.89 1818.43 0.02 1595977 807913.35 84181.22 401816.53 3306687.67 6196576.19 720281.89 462246.45 55590.82 192322.23 1769332.39 3149773.78

2003-04 2004-05 2005-06 2006-07 2007-08

__ x X = _____ = 9626.54 N 5 = 1925.31

__ y Y = _____ = 20058.37 N 5 = 4011.67 r = xy V x2* y2 r= 3149773.78

= 3149773.78 3212089.82 = 0.98

2.5.2 CORRELATION FOR SHARE HOLDERS

year

Current assets (x) 3.02 2.96 2.68 2.60 2.8 14.06 0.21 0.15 -0.13 -0.21 -0.01 0.01 0.0441 0.0225 0.0169 0.0441 0.0001 0.1277 2.16 2.01 1.89 1.74 1.90 9.7 0.22 0.07 -0.05 -0.20 -.04 0.00 0.048 0.0049 0.0025 0.04 0.0016 0.097 0.0462 0.0105 0.0065 0.042 0.0004 0.1056

2003-04 2004-05 2005-06 2006-07 2007-08 x X = _____ N

= 14.06 5 = 2.81

__ y Y = _____ N

9.7 5

= 1.94 r = xy V x2* y2

r = 0.1056 0.1056

= 0.1056 0.1113

= 0.949

FINDINGS AS PER THE BALANCE SHEET FOR THE YEAR ENDED 2007-08 PARTICULARS REVENUE(A) GROSS SALES OTHER INCOME PROFITABILITY(B) PBIT PBT PAT PBIT/GROSS SALES(%) PBT/GROSS SALES(%) ASSETS EMPLOYED(C) FIXED ASSETS INVESTMENTS NET CURRENT ASSETS TOTAL ASSETS FIXED ASSETS TURNOVER RETURN ON CAPITAL EMPLOYED(%) FUNDS EMPLOYED(D) PAID UP-CAPITAL RESERVES NET WORTH LOANS FUNDS NET DEFERRED TAX LIABILITY TOTAL FUNDS EMPLOYED DEBT TO EQUITY RATIO (E) INVESTOR PARAMETERS DIVIDEND%(F) EPS(ON RS .2 FACE VALUE)(G) BOOK VALUE RETURN ON NET WORTH%(H) 2008

6606 847 1541 1372 972 23.3% 20.8% 3218 1698 1867 6783 2.1 22.7% 187 3304 3490 3010 283 6783 0.9 100% 10.4 37 27.8%

RATIO ANALYSIS 1.CURRENT RATIO CURRENT ASSETS,LOANS AND ADVANCES A.INVENTORIES 1734.03 B.S.DRS 2261.37 C.CASH AND BANK BALANCES 476.03 D.LOANS AND ADVANCES 507.48
4978.91 CURRENT LIABILITIES AND PROVISIONS A.CURRENT LAIBILITIES B.PROVISIONS 1500.99 215.18 1716.17

CURRENT ASSETS,LOANS AND ADVANCES

CURRENT LIABILITIES AND PROVISIONS


4978.91 1716.91

=2.9011 2.SHARE HOLDERS EQUITY RATIO (SHARE SHOLDER,S EQUITY 125,000,000 EQUITY SHARES OF 2/=250,000,000) TOTAL ASSETS(TANGIBLE ASSETS) LAND BUILDING 38.50 1254.55

PLANT AND MACHINERY FURNITURE AND FIXTURES VEHICLES VEHICLES TAKEN ON LEASE

3950.50 106.00 60.92 24.20


5,434.67

SHARE HOLDERS EQUITY TOTAL ASSETS (TANGIBLE ASSETS) =250,000,000 54,34,670 =46,000,953 3.FIXED ASSETS TO LONG TERM FUNDS RATIO FIXED ASSETS L.T.FUNDS FIFED ASSETS 1.GOODWILL 2.TRADE MARK 3.TECHINAL 4.LAND 5.BUILDING 6.PLANT AND MACHINERY 7.FURNITURE AND FIXTURES 8.VEHICLES 9.VEHICLES TAKEN ON LEASE 510 1.61 17.27 128.54 1254.55 3950.50 106.00 60.92 24.20 5,548,69

FIXED ASSETS L.T. FUNDS =5,548,69 1390.22 =3,9912

4.INTEREST COVER PROFIT BEFORE INTEREST ,DEPRECIATION,AND TAX

INTEREST
=1371.84

169.00 =8.11451

5.INVENTORY RATIO
INVENTORY CURRENT ASSETS*100 INVENTORY=945,57 CURRENT ASSETS
1. INVENTORIES 2. SUNDRY DRS 3. C/B BALANCES 945,57 1322.86 169.71

LOANS AND ADVANCES

460.17 2898.31

INVENTORY*100 CURRENT ASSETS =945,57

2898.31*100 =32,6248(MILLION)

6.FIXED ASSETS TURN OVER RATIO


SALES FIXED ASSETS = 6567.75 4282.04 = 1,53378

7.TOTAL ASSETS TURN OVER RATIO SALES TOTAL ASSETS = 6567.75 7180.35 =0.91468