complete topic funds flow analysis at zauri cement
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INTRODUCTION
A funds flow statement is a technical device designed to analyze, the changes
in the financial condition of a business enterprise between two years. It is also called as a
‘statement of sources and applications of funds . The funds flow statement is becoming
popular with the management because it not only helps them in analyzing financial
operations, providing basis for comparison with budgets, and serving as a tool of
communication, but also explains the financial consequences of such operations suchas
the reason why the company is experiencing difficulty in making payments to creditors or
why the bank balance is getting thinner.
There is a general recognition in industry and business and among professional
accounting bodies that financial statements should provide relevant information which
sub serves the multiple objectives of shareholders, investors, creditors, customers and the
public and which enable them to arrive at rational economic decisions. Normally what the
shareholders look for in these statements is an account of the stewardship of the firm and
the amount which may be expected as dividend. Potential investors look upon funds flow
statements as the source of there realistic view of the value of a company’s shares in
terms of an expected futures stream of distribution and judge the efficiency of the
management accordingly.
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YEAR EVENTS 1967 - The Company was incorporated on 12th May. It was promoted
by Birla Gwalior (P) Ltd., and Armour & Co., Chicago, U.S.A. The Company
manufacture fertilisers and allied products.
1968 - A fresh collaboration agreement was signed with the United States Steel
Corporation on 1st November, under which the scope of the project was enhanced to
include the manufacture of compound fertilisers (28:28:0) as well.
1977 - 160 No. of equity shares subscribed for by the signatories to the Memorandum of
Association and 55,57,340 No. of equity shares subscribed for in cash by the institutional
promoters of the Company (United State Steel Corporation - 37,72,500; Sutlej Cotton
Mills - 10,00,000 Pilani Investment Corporation - 2,00,000 Birla Education Trust -
1,80,000; Century Spg. & Mfg. Co. 1,50,000; Gwalior Rayon Silk Mfg. Co. 1,10,000;
Birla Bombay Pvt. Ltd. - 70,000; and Jiyajeerao Cotton Mills - 40,000).
- 4,12,500 Pref. Shares and 68,70,000 No. of Equity shares issued through prospectus in
May 1970. Out of the issue, 9,14,964 No. of equity shares reserved for foreign
collaborators (7,27,500 for United States Steel Corpn., and 1,87,464 for Armour & Co.,
U.S.A.) for allotment against plant and machinery and technical know-how, etc.; 37,536
No. of equity shares issued to Armour & Co., against cash subscription; 33,30,000 No. of
equity shares issued to foreign financial institutions (23,92,500 to International Financial
Corpn. Washington; 7,50,000 to Bank of America, N.Y. and 1,87,500 to First
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International Finance Corpn. Chicago) against cash subscription; 125 Pref. and 5,000 No.
of equity shares issued for Communidade of Sancoale of Goa. The balance of 4,12,375
Pref. and 25,82,500 No. of equity shares offered for public subscription. The Pref. shares
are redeemable on or after 8th July, 1982 after giving 3 months' notice.
1984 - A letter of intent was received to set up a fertiliser complex comprising of an
ammonia plant and an urea plant with capacities of 1,350 tonnes and 2,250 tonnes per
day respectively based on off-shore gas at Sawai Madhopur, Rajasthan. For this purpose,
the Company promoted a new Company under the name and style of Aravali Fetilisers
Ltd.
1985 - AFL was incorporated on 7th May, 1985 and the Certificate of Commencement of
Business was obtained on 18th July. Due to the new guidelines fixed by the Government,
the original contract with Snamprogetti SPA had to be re-negotiated. Rate of Pref.
dividend raised to 15% effective from 11.7.1985 and redemption date extended to
10.7.1992/95. 10,310 Pref. shares belonging to dissenting shareholders redeemed.1986 -
The Company issued 5,00,000 - 15% redeemable non-convertible debentures of Rs 100
each on private placement basis to Army Group Insurance Fund. These debentures are
redeemable at a premium of Rs 5 per debenture at the expiry of 7th year from the date of
allotment.1989 - Application for financial assistance for the cement project was
submitted to IDBI. Our
3
Company Our History
Strong foundations for a company of strength.
Zuari entered the Cement business in 1994 to operate the Texmaco Cement Plant. In
1995, Texmaco’s 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 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
.
- The Company entered into an agreement with Texmaco Ltd for running and operating
their Cement unit at Yerraguntla, Andhra Pradesh effective 1st January, 1994.
1994 - The Company formed a wholly owned subsidiary in the name of Zuari Leasing &
Finance Corporation Ltd.
- The Company set up a joint venture in the name of Zuari Seeds Ltd., with Institute of
Field & Vegetable Crops & KOP Investments, Cyprus (IFVC) on 50:50 basis for
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production and marketing of hybrid seeds.
- 7,00,000 Shares allotted on private placement basis.
1995 - The Company commenced marketing of single super phosphate under the brand
name "Jai Kisaan Superphos" making the existing range of products most comprehensive.
- "Bioneem" an eco friendly neem based pesticide launched during January.
- Two hybrid seeds of sunflower were developed with Institute of Field and Vegetable
cups and KOP Investments.
Argon recovering plant was commissioned on 9th May, and registered 51% capacity.
1996 - The Capacity utilisation of Ammonia, Urea, NPX and DAP plants was maintained
at higher levels.
- With view to energy saving, the company undertook to remove pneumatic instruments
in a phased manner to be replaced by microprocessor based control systems. In the
cement divisions, fluxo was replaced by air lift pump and elevator & belt combination for
transport of cement from mill out let to cement silo.
- The Company undertook to expand the existing di ammonium phosphate plant from 500
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to 1100 tpa at a cost of Rs 18.67 crores based on technology supplied by Grand Parroise
(GP) of France. Also expansion of its NPK plant was undertaken to increase the capacity
from 500 to 1100 tap at a cost of Rs 46.18 crores based on technology from Grand
Parroise of France.
- Approval was received from requisite authorities for amalgamation of Indian Furniture
Products Ltd. (IFP) with the company IFP is an EOU with facilities to manufacture ready
to assemble furniture at Kakalur, Tamil Nadu.
- IFP had entered into a technical & financial collaboration agreement with M/s. Seribo
France, one of the pioneers in manufacturing and marketing reading to assemble
furniture.
- Subject to necessary approvals being obtained the company proposed to issue 26252800
rights equity shares in prop. 1:1.
- Pref. shares redeemed. Authorised equity capital increased.
1997 - To ensure the smooth and continuous production of NPK/DAP plants, the
company has decided to set up additional captive power capacity and placed an order
with M/s. Wartsila NSD, Finland for supply and erection of 6 MW DG set at a total cost
of Rs 8.86 crores.
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- 131,15,210 rights shares issued in prop. 1:1. 31,98,368 shares issued to erstwhile Indian
Furniture Products Ltd. on its amalgamation with the Company.
1998 - With effect from 12th February, the name of Company was changed to Zuari
Industries Ltd. from Zuari Agro Chemicals Ltd to represent all the activities of the
company.
- For the first time among Indian corporates, Zuari Leasing and Finance Corporation, a
subsidiary of Zuari Industries of the K K Birla group, has disclosed in its balance sheet
that it has paid Rs.15.69 lakh as tax to the Income-Tax Department under the Voluntary
Disclosure of Income Scheme (VDIS).
- Zuari Industries Ltd. said that its operations have been affected because of a strike by
contract labourers in its packing and despatch section at its fertiliser division in Goa.
- Gautier India Ltd, a 50:50 joint venture between Groupe Seribo, France and Zuari
Industries Ltd, will launch an exclusive range of entertainment furniture in India.
1999 - Zuari Industries, the K.K. Birla group company, is tying up with Groupe Seribo of
France to forge a 50:50 joint venture which will market state-of-the art furniture products
manufactured at its Chennai factory.
- The company undertook further expansion of complex fertiliser capacities to 3.30 lakh
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tonnes per annum from 1.50 lakh tonnes per annum at Rs. 41.70 crores and installation of
captive power generation facilities.
- Leading the race is Gautier India Ltd, a furniture manufacturing company set up by
Zuari Industries Ltd, belonging to the KK Birla Group, in collaboration with Groupe
Seribo of France.
- Zuari Industries was able to present the record of its transactions, the faster was the
collection process from the government.
- The company also has interests in furniture and cement manufacturing. For fertilizers
the company has tied up with Grand Parroise of France to improve quality of its products
like Urea, Ammonia, and Diammonium Phosphate (DAP).
2000
The Italcementi Group and Zuari Industries Ltd (ZIL) have reached an agreement to
create a 50:50 joint venture company, which will take over the cement activities of ZIL.
The Company proposes to enter into a joint venture agreement with Ciments Francais and
Italcementi Group company for carrying on the cement business as a separate joint
venture company.The Company has signed an agreement with Italcementi Spa, Italy on
2nd August, for carrying on its cement business as a joint venture.
Indian Furniture Products, a division of Zuari Industries of the K K Birla group, has
launched its Zuari furniture range in Bangalore.
2001
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The cement division of Rs 4000 crore KK Birla group company Zuari Industries, has
been hived off into a separate company called Zuari Cement Ltd.The Company is signing
an MoU for acquiring 76 per cent stake in Greentech Seeds International Pvt. Ltd.
Bangalore, which is in the business of production and marketing of hybrid seeds of
vegetables and other crops. The Company has acquired themajority stake in GreenTech
Seeds International Pvt Ltd. and GSIPL has become the subsidiary of the company.
2002
Zuari Maroc Phosphates becomes subsidiary of Zuari Industries -Paradeep Phosphates
becomes a subsidiary of Zuari Industries. AF Ferguson & Co (AFF) has withdrawn as
auditor for Zuari Industries Ltd. 2003 -Board approved the issue of Cumulative
Redeemable Preference Shares aggregating to Rs 1000 million instead of Rs 2000 million
approved earlier. The Zuari Cement unit near Yerraguntla in Cudappah district was
closed down by the management due to labour unrest
2010
Zuari Industries Ltd has entered into Joint Venture Agreement with Israel Chemicals Ltd
for establishment of water soluble NPK Fertiliser Plant with an initial capacity of 10,000
tonnes per year. Zuari Industries Ltd has appointed Mr. J N Godbole as an Additional
Director of the Company with effect from August 01, 2010.
2009
Zuari Industries Ltd has informed that the Board of Directors of the Company at its
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meeting held on May 15, 2009, has appointed Mrs. Jyotsna Poddar as Additional Director
of the Company with immediate effect. Zuari Industries Ltd has informed that the
Company has entered into a Gas Transmission Agreement with GAIL (India) Ltd on May
26, 2009 for transportation of gas to Company's plant at Zuarinagar, Goa for use as
fuel/feed stock. Zuari Industries Ltd has informed that the Board of Directors of the
Company at its meeting held on July 21, 2009 has appointed Air Chief Marshal (Retd.)
Mr. S P Tyagi as Additional Director of the Company with immediate effect.
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MEANING OF FUNDS Fund
According to the dictionary meaning of the term “Funds” implies an accumulation
or deposit of resources from which supplies are may be drawn a more or less permanent
store or supply. It is also defined as available pecuniary resources but these two meanings
are abroad in nature and apt to macro level planning and control. A number of definitions
of the term ‘fund’ have been given.
Some people call ‘fund’ as ‘cash’. But it is seen in practice that the current assets
are constantly circulating through cash account in business operations and many
transactions affect flow of cash at least later or sooner.
The term ‘flow’ means movement and includes both ‘inflow’ and ‘out
flow’. The term ‘flow of funds’ means transfer of economic values from one asset of
equality to another. Flow of funds is said top have taken place when any transaction
makes changes in the amount of funds available before happening of the transaction.
OBJECTIVE OF STUDY:
1) Helpful in planning.
2) Helpful in organizing.
3) Helpful in interpreting financial information.
4) Helpful in making decision
5) Report to management.
NEED FOR STUDY
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1. To study the financial statements of The ZAURI CEMENT Financial Services limited for the 4 years.
2. To analyze how The ZAURI CEMENT Financial Services is utilizing its resources.
3. To analyze the changes in assets and liabilities from the end of one period of the
time to the end of another period of time
4. To find out the sources from which additional funds were derived and the use to
which their sources were put.
SCOPE OF THE STUDY
The present study focuses as sources funds and application of funds for a period of
time. The study is confirmed to find out the changes in the financial position of The
ZAURI CEMENT Financial Services Limited between the beginning and ending
financial Year.It is a technical device designed to analyze the changes in the financial
condition of the business enterprises between two dates.
This funds flow statement is a statement which indicates various means by which
the funds have been obtained during a certain period and the ways to which these funds
have been used during the period.
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RESEARCH METHODOLOGY
Research is a process in which the researcher wishes to find out the end result for a
given problem and thus the solution helps in the future course of action. Redman and
Mory defines research as a “systematized effort to gain new knowledge”.
Research Design
A research design is the arrangement of conditions for collection and analysis of
data in a manner that aims to combine relevance to the research purpose with company in
procedure. In fact, the research design is the conceptual structure within which research
is conducted; it constitutes the blue print for the collection, measurement and analysis of
data.
Sources of Data:
The data was collected through primary and secondary sources.
Primary Data:
First hand information was collected using the direct personal interview.
Interaction with guide to understand the general & specific aspects regarding
utilization of resources.
Secondary Data:
Annual reports collected from the M/S ZAURI CEMENT Ltd., Tadpatri.
Period of study:
The analyze presented in the study are “Annual Reports” of M/S
PENNACEMENT, TADPATRI from 2004-2005 to 2010-2008
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LIMITATIONS
It should remember that a funds flow statement is not a substitute of an income
statement or a balance sheet. It provides only some additional information as
regards changes in working capital
The study based on the available annual reports and internal information of
Pennas cement Financial Services Ltd only.
It cannot reveal continuous changes.
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LITERARY REVIEW
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PARTIES INTERESTED IN FINANCIAL ANALYSIS
There are different parties interested in the financial analysis of these statements.
But their aim and objective of the analysis differ significantly. The users of the financial
statements can be divided into tow broad groups:
(a) Internal users
(b) External Users.
Internal Users:
Financial Executives:
The first party interested in the financial statement analysis is the Finance
Department of the company itself. This analysis helps the Financial Manager to have a
deep insight into the financial condition of the enterprise.
Top Management:
The Top Management of the concern is also interested in the analysis of financial
statements. It helps them in reaching conclusion on the following:
Is the firm in a position to meet its current obligations?
What sources of long-term finance are employed by the firm?
How efficiently does the firm use its assets?
Are the earnings of the firm adequate? etc.,
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External Users:
Investors:
Those who are interested in buying the shares of a company are naturally
interested in the financial statements to know how safe the investment already made is
and how safe the proposed investment will be.
Creditors:
Lenders are interested to know whether their loan, principal and interested will be
paid when due. Suppliers and other creditors are also interested to know the ability of the
firm to pay their dues in time.
Workers:
In our country, workers are entitled to payment of bonus which depends on the
size of profit earned. Hence, they would like to be satisfied that the bonus being paid to
them is correct.
Customers:
They are also concerned with the stability and profitability of the enterprise. They
may be interested in knowing the financial strength of the company to take further
decisions relating to purchase of goods.
Government: Financial analysis helps government in knowing the role and status of
industry in general and companies in particular in framing Macro-Economic policies.
Researches:
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The financial statements, being a mirror of business conditions, are of great interest
to scholars understanding research in Accounting theory as well as business affairs and
practices.
Significance of Financial Analysis:
Analysis of financial statement is carried out to measure the enterprise’s liquidity,
profitability, solvency and other indicators to assess its operating efficiency, financial
position and performance. Financial analysis serves the following purpose:
To know the operational efficiency of the business.
Helpful in measuring the solvency of the firm.
Helpful in comparison of past and present results.
Helps in measuring the profitability.
It is more helpful in inter-firm comparison.
Helps in judging the solvency of the undertaking.
Types of analysis:
Two types of analysis are undertaken to interpret the position of an enterprise.
They are:
Vertical Analysis
Horizontal Analysis
The Companies Act, 1956 permit the companies to present the financial
statements in vertical as well as horizontal form.
Vertical Analysis:
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It is the analysis of relationship as between different individual components for a
given period of time. Comparison of current assets to current liabilities or comparison of
debt to equity for one point of time is the examples of vertical analysis. It can be made in
the following ways.
By preparation of common size statements of the two similar units.
By preparing common size statement of different years of the same
business.
Horizontal Analysis:
It is the analysis of changes in different components the financial statements over
different periods with the help of a series of statements. Study of trends in debt or share
capital or their relationship over the past ten years period or study of profitability trends
for a period of five years or ten years are examples of horizontal analysis. It comprises:
Comparison of the financial statements of different years of the same
business unit.
Comparison of financial statement of a particular year of different
business units.
Methods of Analysis:
A financial analyst can adopt the following tools for analysis of the financial
statements. These are also termed as Methods of Financial Analysis.
Comparative Statement Analysis.
Common-size Statement Analysis.
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Trend Analysis.
Funds flow Analysis.
Cash flow Analysis.
Ratio Analysis.
Comparative Statement Analysis:
Comparative financial statements are those statements which are designed to
provide time perspective to the consideration of various elements of financial position
embodied in such statements. In these statements figures for two or more periods are
shown side by side to facilitate comparison. Both the income statement and balance sheet
can be prepared in the form of comparative financial statements.
Common-size Statement Analysis:
Common-size statement is a financial tool of studying key changes and trends in
financial position of a company. In common-size statement, each item is stated as
percentage of the total of which that item is a part, each percentage exhibits the relation
of the individual item to its respective total. Therefore, the common-size percentage
method represents a type of ratio analysis. That is why this statement is also designated as
“component percentage” or “100 percent statement”. Preparation of the common-size
statement involves two steps:
State the total of the statement as 100 percent.
Compute the ratio of each item to the total in the statement
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There are tow types of common-size statements, viz., common-size income
Statement and Balance Sheet.
Trend Analysis:
Trend analysis depicts behavior of the ratios over a period of time and the trends
in the operation of the enterprise. The trend figures are index figures giving a bird’s eye
view of the comparative data by presenting it over a period of time. This is horizontal
analysis of financial statement, often called as Pyramid Method of Ratio Analysis – a
guide to yearly changes.
Under this form of analysis, generally financial ratios are studied for a specified
number of years. It is a dynamic analysis depicting the changes over a stated period. The
working of trend analysis involves the following three steps:
Selection of the base year.
Assignment of an index number of 100 to each item of the base year.
Calculation of percentage relationship that each item bears to the same
item in the base year
Ratio Analysis:
Ratio Analysis is powerful tool of financial analysis. The relationship between
two accounting figures, expressed mathematically, it is known as a financial ratio. In
financial analysis, a ratio is used as a benchmark for evaluating financial position and
performance of a firm. Ratios help to summarize large quantities of financial data and to
make qualitative judgment about the firm’s financial performance.
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Several ratios, calculated from the accounting data, can be grouped into various
classes according to financial activity or function to be evaluated. In view of the
requirements of the various users of ratios.
We may classify them into the following categories:
Liquidity Ratios.
Leverage Ratios.
Activity Ratios.
Profitability ratios.
Financial analysis is the processes of identifying the financial strengths and
weaknesses of the firm by properly establishing relationships between the items of
financial statements viz., Balance sheet and profit and loss account, financial analysis can
be undertaken by management of the firm or by parties outside the firm, Viz., Owners,
Creditors, Investors and others.
Users of Financial Analysis:
Financial analysis is the process of identifying the financial strengths and
weakness of the firm by properly establishing relationship between the items of the
Balance Sheet and the Profit and Loss Account financial analysis can be under taken by
management of the firm of by parties outside the firm viz., Owners, Creditors, Investors
and others. The nature of analysis will differ depending on the purposes of the analyst.
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Trade creditors:
Trade creditors are invested in firm’s ability to meet the climes over very short
period of time. Their analysis therefore, confine to the revolution of the firm’s liquidity
position.
Suppliers of long term debt:
On the other hands are concerned with the firm’s long – term solvency and
survival. They analyze the firm’s profitability over time its ability to generate cash to be
able to pay interest and repay principle and the relationship between various courses of
funds.
Investors:
Who have invested their money in the firms shares are must be concerned about
the firm’s earnings. They restore more confidence in those firms. That show study
growth in earnings as such they concentrate analyzing the firms present and future
profitability.
Management:
Management of the firm would be invested in every aspect of the financial
analysis. It is their over all responsibility to see that the resources of the firms are used
most effectively and efficiently and that the firms financial condition is sound.
Funds Flow Analysis:
Significant technique of financial analysis is ‘FUNDS FLOW ANALYSIS’. It is
designed to highlight changes in the financial condition of a business concern between
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concern between two points of time which generally conform to beginning and ending
financial statement dates.
Thus, Funds Flow Statement is a report which summarizes
the events taking between the two accounting periods. It spells out the sources from
which funds were derived and the uses to which these funds were put. This statement is
essentially derived from an analysis of which these have occurred in assets and liabilities
items between two balance sheet dates. In this statement, only the net changes are shown
so that the outcome of a transaction upon the financial condition of a business enterprise
reflected more sharply.
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MEANING AND CONCEPT OF FUNDS
Fund: According to the dictionary meaning of the term “Funds” implies an
accumulation or deposit of resources from which supplies are may be drawn a more or
less permanent store or supply. It is also defined as available pecuniary resources but
these two meanings are abroad in nature and apt to macro level planning and control. A
number of definitions of the term ‘fund’ have been given.
Some people call ‘fund’ as ‘cash’. But it is seen in practice that the current assets
are constantly circulating through cash account in business operations and many
transactions affect flow of cash at least later or sooner.
For example, the sale of goods on credit increases in accounts payable rather than
in an immediate cash flow. Similarly, certain expenses may result in a current liability
since they might not have been paid immediately. In other words, it may be said that any
current assets and current liability has its impact on working capital (as working capital is
the difference of current assets and current liabilities) rather than cash. Therefore there is
another view about meaning of ‘fund’ that it means ‘working capital’.
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The term funds have been defined in a number of ways.
In a Narrow Sense:
It means cash only and a funds flow statement prepared on this is called a cash flow
statement. Such a statement enumerates net effects of the various business transactions on
cash and takes into account receipts and disbursements of cash.
In Broader sense:
The term Funds refers to money values in whatever from it may exist here Funds
means all means all financial resources used in business whatever in the firm of men,
material, money, machinery and others.
In a Popular Sense:
The term Funds means working capital i.e., the excess of current assets over current
liabilities. The working capital concept of funds has emerged due to fact that total
resource of a business are invested partly in fixed assets in the form of fixed capital and
partly kept in firm of liquid of near liquid form as 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 much important the flow of
funds is.
The Funds Flow Statement is concerned with sources and applications of
organization.
Statement of changes in working capital shows the increase or decrease in working
capital.
“Funds from Operation” statement shows how much funds from operations
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IMPORTANCE OF FUNDS FLOW ANALYSIS:
The importance of funds Flow analysis and ratio analysis in all undertakings
needs no emphasis.
How is it managed? What are the practices adopted? What are the problems
faced?
This study is an attempt to answer the questions. This is considered to M/S.
ZAURI CEMENT LIMITED, TADPATRI.
Funds Flow Statement, Income Statement and Balance Sheet:
Funds Flow Statement is not a substitute of an income statement i.e., a Profit and
Loss Account, and a Balance Sheet. The Profit and Loss Account is a document, which
indicates the extent of success achieved by a business in earning profits.
A balance sheet is a statement of financial position or status of business on given
date. It is prepared at end of accounting period. The balance sheet depicts various
resources of an understanding and the deployment of these resources in various assets on
a particular date. As it indicates the financial condition on a particular date, it is static in
nature; while funds flow statement is a dynamic one.
Funds Flow Statement tells us many financial facts, which a balance sheet cannot
tell. Balance sheet does not disclose the cause for change in the assets and liabilities
between two different points of time. Again, while balance sheet is the end result of all
accounting operations for a period of time? The funds flow statement provides additional
information as regard changes in working capital derived from financial statements at two
points of time. It is a tool of management for financial analysis and helps in making
decisions.
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1. It helps in the Analysis of Financial operations:
The financial statements reveal the net effect of various transactions on the
operational and financial position of the concern. The balance sheet gives a static view of
the resource of a business and these have been put at a certain point of time. But it does
not disclose the causes for changes in the assets and liabilities between two different
points of time. The funds flow statements explains cause for such changes and also effect
these changes on the liability position of the company. Some times concern may operate
profitability and yet its cash position may become more and worse. The funds flow
statement gives a clear answer to such a situation explaining what happened to the profits
firm.
2. It throws light on May perplex Questions of general interest:
Why were the net current assets lesser in spite of higher profits and
vise versa?
Why more dividends could not be declared in spite of available
profits?
How was it possible to distribute more dividends than the present
earnings?
What happened to the profit and where it has gone?
What happened to the proceeds of sales of fixed assets, issue of shares,
debentures, etc?
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3. It helps in the Formation of Business of Realistic Dividend Policy:
Sometimes a firm has sufficient profits available for distributing as dividend but
yet may not be available to distribute for cash resources. In such cases a funds flow
statement helps in the information of a realistic dividend policy.
4. It helps in the proper Allocation of Resources:
The resources of a concern are always limited and it wants to make the best use of
these resources. A project funds flow statement constructed for the future helps in making
managerial decisions. The firm can plan the development of its resources and allocate
them many various applications.
5. It Acts as a Future Guide:
A projected funds flow statement also acts as a guide for future to the
management. The management can come to know the various problems it ids going to
face in near future for want of funds. The firms future needs of funds can arrange to
finance these needs more effectively and avoid future problems.
6. It helps in appraising the use of Working Capital:
A funds flow statement helps in explaining the management has its working
capital and also suggest way the management has used its working capital position of the
firm.
7. It helps knowing the Overall credit Worthiness of a firm:
The financial institution and banks such as state financial institutions, industrial
development corporation of India, Industrial Development Bank of India etc., all ask for
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funds flow statement constructed for a number of years before granting loans to know the
credit worthiness and paying capacity of firm. Hence a firm is seeking assistance from
these institutions has to know alternate but to prepare functional statement.
LIMITATIONS OF FUNDS FLOW STATEMENT
The Funds Flow Statement has a number of uses: however, it has certain
limitations also, which are listed below.
It should remember that a Funds Flow Statement is not a substitute of
an income statement or a balance sheet. It provides only some
additional information as regards chances in working capital.
It cannot reveal continuous changes.
It is not an original statement but simply is arrangement of date given
in the financial statements.
It is essentially historic in nature and project funds flow statement
cannot be prepared with much accuracy.
Changes in cash are more important and relevant for financial
management than the working capital.
Business transactions and flow of funds:
It may be noted at this stage of analysis that for the purpose of funds flow
statement, the items of balance sheet are classified into two broad categories viz.,Items of
current accounts and Items of non-current accounts.
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Current account Items
Current assets Current liabilities
Cash in hand Bills payable
Cash at bank (including fixed deposits) Trade or sundry creditors
Bills receivable Outstanding expences
Trade or sundry debtors Cash credit/bank overdraft
Inventory-Raw-materials, work in-
progress, Finished Goods, Stores,etc
Short-term loans
Prepaid expenses Income received in advance
Outstanding incomes Long-term loans (or part) which fall due
for repayment within a year
Short-term loans and advances
Temporary investments, etc
Provision for doubtful debts and discount
on debtors
31
Non-current Account Items
Non-current assets Non-current liabilities
Land and Buildings Equity share capital
Plant and Machinery and vehicles Preference share capital
Furniture and fittings Debentures
Goodwill Reserves and surplus
Patents, trade marks, copy rights,
preliminary expenses and profit and loss
account(deficiency),etc
Long –term loans
The word ‘fund’ is to denote working capital. Funds flow there fore refers to the
changes in the fund (i.e., working capital) by the transactions – operational, financial and
investment, though the effect of all the transactions on the funds are considered, it should
be remembered here that not all the transactions cause the flow of funds .
Transactions Affecting Flow of Funds:
Increase in current assets but not any increase in current liabilities.
Decrease in current assets but not any decrease in current liabilities.
Increase in current liabilities but not any increase in current assets.
Decrease in current liabilities but not any decrease in current assets.
32
Transactions not Affecting Flow of Funds:
(CHANGE IN WORKING CAPITAL)
Transactions which make conversions of one current into another
current assets.
Transactions which make conversions of one current liability into
another current liability.
Transactions which bring increase or decrease in current assets
causing a corresponding increase or decrease in current liabilities by
the same amount.
Funds Flow Statement:
The Funds Flow Statement is also known as “FUNDS FLOW ANALYSIS”.
There are several names for this statement; some are
Statement of sources and applications of funds.
Statement of inflow and outflow of funds.
Statement of Fund Supplied and Applied.
Statement of Resources provided and Applied.
Where got and where gone Statement.
33
Funds Flow Statement:
The Funds Flow Statement is also known as “FUNDS FLOW ANALYSIS”.
There are several names for this statement; some are
Statement of sources and applications of funds.
Statement of inflow and outflow of funds.
Statement of Fund Supplied and Applied.
Statement of Resources provided and Applied.
Where got and where gone Statement.
various factors for inflow and outflow of working capital area shown in a statement,
particularly prepared for this purpose, which is known a “Funds Flow Statement.” This
statement reveals the manner in which the financial resources have been generated and
deployed during the accounting period. This statement is also considered as an important
one as the two traditional financial statements as it supplies important information for the
users. In brief it may be said that fund statement focuses on the flow of funds between the
various assets and equity items during the accounting period and on analysis basis this
statement is generally called as “Funds Flow Analysis”.
IMPORTANCE OF FUNDS FLOW STATEMENT:
34
The balance sheet and profit and loss account failed to provide the
information which is provided by Funds Flow statement i.e., changes in
financial position of an enterprise. This statement indicates the changes in
financial position of an enterprise.
This statement indicates the changes which have taken place between the
two accounting dates.
Gives details of sources and uses of funds during given period is of great
help to the users of financial information.
It is also a very useful tool in the hands of management judging the
financial and operating performance of the company.
It also indicates the working capital position which helps the management
in taking policy decisions regarding dividend etc.,
Funds Flow statement helps in answering questions like where the profits
have gone? Why there is imbalance existing between liquidity position
and profitability position of the enterprise? Why is the concern financially
solid in spite of losses?
It helps management to take policy decisions to decide about the
financing policies and capital expenditure programmed for future.
DIFFERENCE BETWEEN
35
FUNDS FLOW STATEMENT AND BALANCESHEET
FUNDS FLOW STATEMENT BALANCE SHEET
1. It is a statement of changes in 1. It is a statement of financial
Financial position and hence is position on a particular date
Dynamic in nature and hence static in nature.
2. It shows the sources and 2. It depicts the assets and
Applications of funds in a funds liabilities at a
Particular period of time. Particular point of time.
3. It is a tool of management for 3. It is not of much help to
Financial analysis and helps in management in making
Making decisions. Decisions.
4. Usually, schedule of changes in 4. No such schedule of
Working capital has to be prepared changes in working
Before preparing funds flow capital is required rather
Statement. Profit & loss account is
Prepared.
DIFFERENCE BETWEEN
36
FUNDS FLOW & CAH FLOW STATEMENT
FUNDS FLOW STATEMENT CASH FLOW STATEMENT
1. It is based on a wider concept 1. It is based on a narrower
of Funds, i.e., working capital. concept of funds i.e., Cash.
2. It is based on accrual basis of 2. It is based on cash basis of
Accounting. Accounting.
3. Schedule of changes in 3. Schedule of changes in
working capital is required working capital is not
to be prepared. required to be prepared.
4. Funds Flow Analysis reveals 4. It is prepared by taking the
the sources and applications opening balance of cash,
of funds the net difference adding to this all the inflows
between sources and application of cash and deducting the
of funds represents net increase outflows of cash from the
or decrease in working capital. total, difference represents
Closing balance of cash.
5. It is useful for long term planning. 5. It is more useful for short
term analysis and cash
Planning.
PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT
37
Funds Flow statement is a method by which we study changes in the financial
position of a business enterprise between beginning and ending financial statements
dates. Hence, the funds flow statement is prepared by comparing two balance sheets and
worth the help of such other information derived form the accounts as may be needed.
Broadly speaking, the preparation of funds flow statement consists of two parts:
Statement of Schedule of Changes in Working Capital
Statement of sources and Application of Funds
1. Statement of Changes in Working Capital:
Working Capital means the excess of current assets over current liabilities.
Statement of Changes in Working Capital Is prepared to show the changes in the working
capital between the two balance sheet dates. This statement is prepared with the help of
Current Assets and Liabilities derived with the help of Current Assets and Current
Liabilities derived from the two balance sheets as:
Working Capital = Current Assets – Current Liabilities.
An increase in Current Assets increase Working Capital
A decrease in Current Assets decrease Working Capital
An increase in Current Liabilities decrease Working Capital
A decrease in current Liabilities increase Working Capital
The changes in all current assets and liabilities are merged into one figure only –
either an increase or decrease in working capital over the period for which funds
statements has been prepared. If the working capital at the end of the period is more than
38
the working capital at the beginning thereof, the difference is expressed as ‘Increase in
working capital’. On the other hand, if the working capital at the end of the period is less
than that at the commencement, the difference is called ‘Decrease in Working Capital’
2. Funds Flow Statement:
Funds flow statement is a final statement. It shows the amount used in a
particular period of time i.e., “Application of Funds” and the how much amount comes
into the organization in a particular period. Finally those application and sources are
balanced.
1) Schedule of changes in Working capital:
PARTICULARS PREVIOUS
YEAR
CURRENT
YEAR
EFFECT ON WORKING
CAPITAL
39
INCREASE DECREASE
CURRENT ASSETS
Inventories
Sundry Debtors
Cash &Bank
Loans& Advances
Total Current Assets(a)
CURRENT LIABILITIES
Current Liabilities
Provisions
Total current liabilities(b)
***
***
***
***
***
***
***
***
**
**
-
-
**
-
**
-
-
**
**
-
**
**
**** ****
***
***
***
***
**** ****
Working Capital (a-b)
Net increase or decrese in
working capital
***
***
***
***
**** **** *** ***
2) Statement of sources and uses of funds:
Sources Amount
Rs
Applications Amount
Rs
40
Funds from operations
Issue of shares and
Debentures
Long-term Loans
Sale of investment, Fixed
assets, etc
Non-trading Income
Decrease in working capital
***
***
***
***
***
***
***
Redemption of preference
shares and debentures
Repayment of loan
Purchase of Investment,
Fixed assets, etc
Non-Trading Expenses
Increase in working capital
***
***
***
***
***
***
Note:* Any one of these will find the place in the statement
+ Any one of these will find the place in the statement
Funds means working capital this working capital represents the difference
between current assets, current liabilities. All flows of funds pass through working
capital. This means that every transaction has an effect on the firms working capital
position.
1. An example illustrates this as follows:-
2. An increase in profits increases the cash balance and hence working
capital,
3. An increase in long term liability or any decrease in fixed assets increase
the cash balance and hence working capital.
Therefore the Funds Flow Statement shows the movement of funds into or out of the
current asset account of the firm.
41
The movement of funds has two aspects:-
Sources of funds.
Uses of funds
The former supply funds to the working capital and enhances its position. On the
other hand, the latter consume funds and erode the working capital position.
SOURCES OF FUND:
Issue of new shares
Issue of debentures
Creation of long term liability
Profit from operation
Issue of new shares:
On comparing the balance sheet of two dates there is an increase in share capital.
It would affect working capital to the extent of current assets. If it does not have any
impact upon fund, it would not be a source of fund. For example, shares issued and
cash/stock/furniture received. Merely only cash and stock will affect the fund as these are
the companies of working capital.
Issue of Debentures:
That amount of issued debentures would be a source of fund which affects
working capital.
Creation of Long term Liabilities:
If loan and mortgaged loan has been taken its increase between two balances
sheet dates would be a source of fund.
Sale of Fixed Assets:
42
Any decrease in fixed assets due to sale of fixed assets is shown in the sources of
fund as it involves cash or other current assets which are the elements of working capital.
Profit from Operations:
It is a source of fund, to be shown on the sources side.
Applications of Funds:
The fund acquired in the business may be used in the following items:
LOSS FROM OPERATION
DISCHARGE OF LIABILITY
REDEMPTION OF DEBENTURES
REDEMPTION OF PREFERENCE SHARES
ADDITION IN ASSETS
Loss from Operations:
Just like profit from operations is a source. Similarly loss from operations is
treated as uses of fund. In fact, incurring of loss means out flow of funds. It may be due
to increase in liabilities or decrease in assets or both.
Discharge of Liability:
Any decrease in long term liability would be the indicator that fund ha gone from
the business liability which may be decreased due to decrease in assets ( payment of
creditors by giving cash of fixed assets to them ) or increase in liability. For example, a
liability is converted into another.
43
Redemption of Debentures:
If the redemption is made through conversion into shares or new debentures, it
does not affect funds. If they are rendered in cash, it would affect fund.
Redemption of Preference Shares:
If these preference shares are rendered by issue of new preference shares or equity
shares or debentures such decrease in preference shares will not be treated as use of fund,
as the flow of fund does not take place in this transaction.
Addition in Assets:
If these assets whether current or fixed are increased, it will be shown in the users
of fund because such increase entails outflow of fund. If there is increase in fixed assets
accompanied either by increase in long term liabilities or increase in share capital, there
will not be outflow of fund. On the other hand, if these fixed asset are accompanied by
decrease in current assets or increase in current liability, there would certainly be out
flow of fund.
44
INTRODUCTION OF PROFILE
45
INTRODUCTION
We are happy to share information on our WTD Mr.
Krishna Srivastava winning an award from the
CMO(Chief Marketing Officer) council Asia ,being
amongst the ‘50 Most talented CMO’s of India. The
prestigious award was presented at an recent event held
at the TAJ Lands, Mumbai .The award recipient was
chosen by a joint think tank from CMO council & CMO
Asia based on a overall ranking on leadership in the
marketing area .
Info on CMO Asia: The CMO Asia is dedicated to
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senior CMOs and brand decision makers across industry segments.
CEMENT INDUSTRY IN INDIA
In India it came to be established during the beginning of 20 th century. In fact the
cement era in India commenced with the establishment of a small cement factory at
WASHERMANPET in 1904 by South India industry Ltd. a company that dates to 1879.
The potential capacity of this plant was only 10,000 metric tones per annum. This was the
46
first attempt of manufacturing Portland cement with cat carious seashells as a principal
raw material. There was sufficient demand for that product, but because of technological
defects and inadequate supply of raw materials, the plant did not operate economically, a
later on collapsed.
India is ranked forth in the world after China, Japan, and USA in cement
production. Yet the per-capital consumption of cement in India however low at 70 to 80
kgs against the world average of around 220kgs
CEMENT INDUSTRY IN ANDHRA PRADESH
Cement was first manufactured in America in the year 1875. In India, in 1914 the
India Cements Company Limited was established a cement factory at Portland. Andhra
Pradesh is the second largest cement production state in India, one third of the limestone
(138crore tones) is available in A.P.I.A.P. the cement production was started in 1936 with
two factories. Of these two factories one is Andhra Cement Company Limited and
another in Krishna Cement Factory. One is on the side of Krishna Cement Factory. One
is on the side of Krishna River and another is in between Krishna and Guntur districts
respectively.
In 1995, one more factory was established at Panyam in Kurnool Dist., named as
Panyam Cement and mineral industries. At the same time one more factory has been
established at Maacherla in Guntur district. At the end of July 1985 the total capital
invested on cement industry was Rs.427.81 lakhs and provided employment for 1262
persons and 19 factories were functioning with a production of 85lakh tones.
47
Capacity, Production and Exports
India today boasts 129 large plants and over 300 mini cement plants with a
capacity of 165 million tones and production of 134 million tones (2004-05).
It ranks second in the world among cement producing countries, with per
capita consumption at 118Kg compared to the world avg. Of around 317. Per capita
consumption is 366 Kg in Thailand, 626 Kg in China, 606 Kg in Malaysia and 1216 Kg
in South Korea. This indicates a huge potential for increase in consumption.
The Cement Corporation of India, which is a central public sector undertaking,
has 10 units. Besides, there are 10 large cement plants owned by various state
Governments. Keeping in view the past trends, a production target of 133 million tons
has been set for the year 2004 – 05. During the Tenth Plan, the Industry is expected to
grow at the rate of 10% per annum and is expected to add capacity of 40 – 52 million
tons.
Mainly through expansion of existing plants and use of more fly ash inthe
production of cement. A part from meeting the domestic demand, the cement Industry
also contributes towards exports. The export of cement and clinker during the last three
years is as under:-
Export of Cement
(In million tons)
Year Cement Clinker Total
2005 – 06 3.47 3.45 6.92
2009 – 07 3.36 5.64 9.00
48
2010 – 08 3.31 4.82 8.13
Overview of the performance of the Cement Sector:
The Indian Cement Industry not only ranks second in the production of
cement in the world but also produces quality cement, which meets global standards.
However, the Industry faces a number of constraints in terms of high cost of power.
High railway tariff; high incidence of state and central levies
and duties; lack of private and public investment in infrastructure projects; poor quality
coal and inadequate growth of related infrastructure like sea and rail transport, ports and
bulk terminals. In order to utilize excess capacity available with the cement Industry, the
Government has identified the following thrust areas for increasing demand for cement:
(i) Housing development programs;
(ii) Promotion of concrete highways and roads;
(iii) Use of ready – mix concrete in large infrastructure projects;
and
(iv) Construction of concrete roads in rural areas under Prime
Ministers Gram Sadak Yolanda.
Technological advancements
49
Indian cement industry is modern and uses latest technology. Only a small
segment of industry is using old technology based on wet and semi-dry process. Efforts
are being made to recover waste heat and success in this area has been significant.
India is also producing different varieties of cement like Ordinary Portland
Cement (OPC), Portland Pozzolana Cement (PPC), Portland Blast Furnace Slag Cement
(PBFS), Oil Well Cement, Rapid Hardening Portland Cement, Sulphate Resisting
Portland Cement, White Cement, etc. Production of these varieties of cement conforms to
the BIS Specifications. It is worth mentioning that some cement plants have set up
dedicated jetties for promoting bulk transportation and export.
Infrastructure – driven demand push
The bulk of cement demand is from housing and commercial development of
which metros account for a significant amount. It is estimated that Mumbai, which
consumes almost six million tones, along with Pune, accounts for 45 percent of
Maharastra’s cement consumption, Bangalore consumes four million tones and Chennai
around 3 million tones, “these are really the growth clusters. Today bulk of the demand is
driven by housing and commercial construction and as infrastructure picks up, for
example, Bangalore international airport, Hyderabad airport and modernization of
Mumbai and Delhi airports.
Another large consumer has been the roads sector. The off take was good when
the NHDP programme was launched but there was a lull last year. “Once again new
50
orders have been placed and in 2009, the industry will pick up. The estimate is that from
roads, sdemand is not more than 4-5 million tones but it makes a difference in the growth
numbers”.
Narrowing demand-supply gap:
The industry has a capacity of 165 million tons and in Jan 2009, dispatches
were at almost 100%. On an overall basis, the industry does not do more than 90-92%
because of constraints such as transport and raw material.
The industry has been adding capacity of 6-7 million per annum by
Brownfield expansion and de-bottlenecking which is expected to partly cater to the
requirement because it is growing by around 20 million tons per annum.
Challenges before the industry:
Energy costs account for half of the cost of production of cement. Last year
saw a 15-16% increase in coal prices and then diesel prices went up pushing up
transportation costs.
Freight problems
The importance of freight for the cement industry cannot be emphasized
enough. While in the last few months’ railways have been steadily losing freight to road
sector they have been confined cement to market-is around Rs.350-400 a ton or Rs.20
and bag that could go as high a Rs.800 for long leads. This would only easy the first level
of sale and additional costs are involved to take it further.
51
Another issue, which will hit the industry hard, is that of logistics and a
Supreme Court judgment on carrying capacity for trucks. Accordingly, a state govt. has
been directed to enforce the discipline that trucks only carry a specified load. “Many
states and already implementing this and there is already an increase in freight rates and
in some cases, it has gone up by 50%. Also, the requirement for trucks to carry the same
freight has nearly doubled and in many places the industry is being forced to move to
railways.”
High taxes
While the railways have had capacity to meet the requirement, it is expected that
in March the commencement of peak season for the procurement of food grains, the
railways would be constrained to provide adequate number of wagons.
So fright rates are up, railways cannot provide wagons and trucks are unlikely to be
viable so there could be a serious dislocation of supplies going forward.According to the
cement manufactures association total taxes and duties on cement come to around Rs.900
a ton or Rs. 45 a bag. “So at a price of Rs.150 a bag in the market, taxes and duties
account for one third. Which is high for such a basic product. This includes excise duty,
sales tax and royalty on limestone.
The importance of limestone can only be underscored as for every ton of cement
produced. 1.5tons of limestone is required. “For limestone, royalty is on a per ton basis at
Rs. 40 whereas for most minerals it is a percentage of the pithead cost. Effectively we are
paying Rs.70 a ton for limestone as royalty. VAT is at 12.5% without any justification
52
and it should be in 4% category, excise is at Rs.408 per ton when it should be around
Rs.200.
Export Advantages
From a modest beginning if 1.6 lacks tons in 1989-90, Indian exports of
cement/clinker have grown rapidly at about 30-40% and this year exports will cross 10
million tons.
Major cement producers – market shares:
Acc -12.8%
Abuja -10.7%
Grasim-10.4%
Ultra tech-9.5%
India cement-6.0%
Jaypee-4.1%
Lafarge-3.2%
Madras-3.2%
Overall, the industry is in a better state today than 2 years ago. “Cement prices
even today are way below global levels. So setting up Greenfield capacities is not
attractive, as prices will not give attractive returns on investment. That is a minor reason
why there is no Greenfield capacity coming up. It has to be born in mind that one third of
the prices is accounted for by taxes and duties and nearly 20-25% by the freight
component. So what produces earn at the factory gate is among the lowest in the world.”
53
This year 2008 has commenced on a good note and in fact, December was a
very good month wit dispatches at 12.5 million tons and January dispatches were in
excess of 13 million tons.
“This means capacity utilization is in the nineties which is healthy and will
actually lead to firming up of prices. It looks like sales could be 137 million a ton for
2010-08(125 million tons in 2009-07) and so far growth has been 10%. There are enough
reasons to believe it will sustain.”
54
COMPANY PROFILE
55
COMPANY PROFILE
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 Italcementi achieved important international
status with its take-over of Ciments Français, one of the main global cement producer.
In 1997 Italcementi 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 internationalisation strategy by
acquiring new cement works in Bulgaria, Kazakhstan, Thailand, Morocco, India, Egypt
and the United States.
Strong foundations for a company of strength.
Zuari entered the Cement business in 1994 to operate the Texmaco Cement Plant. In
1995, Texmaco’s 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 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
56
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 Italcementi Group, Commitment to customer satisfaction has seen Zuari
Cement grow from a modest 0.5 million tonne capacity in 1995 to almost 6 million
tones in 2010,and earned a place among the most reliable cement producers in the
country. Italcementi Group History
enhance phosphorus use efficiency was well received. High quality seeds of various
crops in the brand name "Jaikisaan" was launched.
The Company entered into an agreement with Texmaco Ltd for running and operating
their Cement unit at Yerraguntla, Andhra Pradesh effective 1st January, 1994
.RAW MATERIALS :
Limestone:
Limestone is the major raw material for the cement industry. Limestone
constitutes 60 to 70 percent of the total raw material costs. Nearly 1.5 – 1.6 tons of
limestone is required for producing one ton of cement clinker limestone (calcium
carbonate) is a rock of either sedimentary or metamorphic origin with calcium oxide as
its main constituent. In India limestone occurs mainly as sedimentary rocks and
constitutes 30 percent of the total sedimentary rocks in the country. Cement grade
limestone is available in 21 states in the country. About 65 percent of the cement plants
57
in India uses sedimentary limestone and 20 percent use metamorphic crystalline
limestone. India has 85,980 million tones of cement grade limestone deposits, which is
enough to produce 100 million tones of cement for the next 500 years.
Total reserve
No. of years limestone reserve would last = -------------------------------------
Avg., limestone Consumption
It is quite clear that India’s limestone reserves are adequate for the next several
years. More over new reserves would be discovered every year Limestone is mixed
extensively in India and ranks second in production next to coal mining. Major portion of
limestone mining portion of limestone mining is for cement industry (nearly 75% to
80%) therefore the demand supply situation is quite comfortable.
In India limestone deposits are abundantly found only in Siroly (Rajasthan),
Santna, Belaspur (M.P., wadi (Karnataka), Tadpatri (A.P.) and some places in Gujarat.
Units are generally located in close proximity of limestone deposits in Madhya Pradesh,
Andhra Pradesh, Tamil Nadu, Karnataka, Rajasthan, and Gujarat.
The quality of required for the cement production should have the following
composition.
Lime : 50%
58
Silican : 3%
Aluminium : 4%
Iron oxide : 0.50%
Magnesiam : 0.50%
Loss on Ignition : 42%
Total : 100%
If Magnesia content exceeds 0.4-o.5 percent, the limestone is not suitable for
cement. Similarly, lime content is directly proportional to the clinker and cement quality
and quantity.
Gypsum:
Gypsum is another important required material for cement manufacturing,
constitutes about 5 percent of the weight of the cement. Gypsum is added in required
quantity at the time of grinding of clinker. The clinker and the required amount of the
Gypsum is added to control the setting time of the cement. India possesses resources of
gypsum. Hence its availability is not a concern for the cement manufacture.
Other Raw Materials:
A few other raw materials like Blast furnace slag and fly ash are also required for
the manufacture of the cement. Blast furnace slag is a waste product obtained from iron
smelting furnace whereas fly ash is the left over ash from thermal power station.
59
60
Inputs:
Although limestone is the major raw material for cement industry, the critical raw
material is energy. How well the company uses coal and electricity and how much it costs
will determine the success ratio for cement manufacturers. Major inputs in cement
manufacturing include coal, power and freight.
Coal:
In India coal I am being used as the fuel for the manufacturing of cement. Else
where in the world lignite, nature gas and oil are also used. They are not used in India as
continuous supply of natural gas is not assured used by plants in southern plants ogf
India, like Dalmia Cement, Chettinad cement etc., as a supplement to coal which
compensates the storage for coal in this area. Non cooking coal of lower ash content is
required by cement plants. It should be less than 30%. A useful heat of 4500 kilocalories
per kg of coal. Coal of lower ash enables comparatively lower quality of limestone.
The coal should have volatile matter and high temperature.
Transport of coal is another big issue as many of larger cement plants are located close to
the limestone deposits, which may not have coal deposits nearby.
Power:
Power constitutes about 10% of the total cement production costs. About 3
percent of the total power generated in the country is used by cement industry. The
average consumption of power in the dry process kilns is around 125 units per million
tons of clinker.
61
Freight:
Freight constitutes a very significant part of the cost structure of cement units in
India. On an average freight for transporting finished product alone forms 13.85% of the
cost of production of large cement plants.
The main areas of freight coast for the cement industries are
i. Transporting coal from the coal fields to the cement factories.
ii. Transporting cement from the plants to their markets.
Limestone transport would be even costlier than transporting coal or cement.
Hence cement plants are located in cluster near limestone deposits. Indian railway is
moving up to 60% of the total cement production.
SALIENT FEATURES OF ZAURI CEMENT:
High strength and great durability
A very perceptible saving in costs (up to 20% to 25%) due to low
setting time
Superior quality of the cement resulting in a better overall finest
Stronger bonding with aggregates.
Growth and Performance:
The company has enhanced its capacity from 600 TPD to 8000 TPD over the
period of 10 years. The Existing cement plant was upgraded to 5000 tones capacity per
62
day. The profits for the year 2010-08 are Rs. 92.77 lakhs and sales of Rs. 946.20 lakhs.
The company holds the assets of Rs. 601.92 lakhs. The annual capacity of the company
18,25000 tones.
Competitiveness of Cement Project:
companies – Ultra tech, Andhra Cement, Grasim Cement, Gujarat Ambuja cement,
Parasakthi, Larsen and Tubro,Coramandal cement,Priya Cement, Nagarjuna cement,
Sagar cement ACC Suraksha cement, Zuari cement, and India cement Ltd
TECHNOLOGY ADOPTION AND INNOVATION:
The company has obtained the basic engineering designs and other technical
know-how from M/s. ONADA ENGINEERING and consulting company limited Japan
for the cement plant he technical collaborates are continuously guiding the company for
achieving improved productivity and benefits such as conservation of energy etc., besides
trouble shooting a specific.
Man power:
Based on requirement of individual departments, Head of that department is asked
to give information to man power planning department regarding the number of persons
required. The departmental heads assess their requirements based on the available
departmental job description to ensure role clarity and to avoid role ambiguity. The
Central Personnel Dept. carries out the recruitment process.
The total employees in ZAURI CEMENT are 345 covering all departments.
There are nearly 500 contract labor working every day on casual basis.
63
Raw Materials & Requirement:
Limestone, Iron ore, Bauxite, Gypsum and Coal are the basic raw materials used
in the manufacturing process of cement. The average consumption of various raw
materials is shown in the table.
REQUIREMENT OF RAW MATERIALS
S. No Raw material Tones per day Consumption per tones
of Cement
1 Limestone 2282 1.4 to 1.5
2 Additives 375 0.06 to 0.75
3 Bauxite iron ore 155 1.16 to 0.20
4 Gypsum 85 0.04 to 0.05
5 Product clinker 500 ------
Source: Annual reports of ZAURI CEMENT Limited.,
Note: Due to change in the quality of lime stone and coal, the consumption of additives
has been changed accordingly.
Material Balance:
Limestone + Additives Raw material
Raw material (1.46%) +coal Calcinations clinker
Clinker + Gypsum Ordinary Portland cement
Clinker + Fly ash Pozzoland Portland
Note:Depending upon quality of raw materials the above consumption may value
64
PRODUCT PROFILE:
ZAURI CEMENT manufactures and distributes its own main product lines of
cement. It aims to optimize production across all the marketers, providing a completer
solution for customer’s needs at the lowest possible cost, an approach known as “strategic
Integration of Activities”. Cement is made from a mixture of 80 percent limestone and
20 percent clay. These are crushed and ground to provide the “raw meal”, a pale, flour –
like powder. Heated to around 1450o C (2642o F) rotating kilns, the “meal” undergoes
complex chemical changes and is transformed into clinker. Fine – grinding the clinker
together with a small quality of gypsum produces cement. Adding other constituents at
this stage produces cements for specialized uses.
PRESENTLY THE PLANT PRODUCES THREE TYPES OF PRODUCTS:
Presently the company is manufacturing 43 grade, 53 grade. Ordinary portal
cement port land slag cement, soleplate Resistant with brand name of “PENNA”
ZAURI Suraksha - 53 Grade
ZAURI Power - 53 Grade
ZAURI Super - 43 Grade
ADVANTAGES:
Here are five of the many reasons why ZAURI 53 Grade and 43 Grade cement
edges out its competitors.
High compressive strength
Low heat of hydration
Better soundness
Lesser consumption of cement for M-20 Concreate Grade and above
65
Faster de – shuttering of formed work
Reduced construction time with a superior and wide range of cement
catering to every conceivable building need, ZAURI CEMENT is a
formidable player in the cement market.
Here are just a few reasons why ZAURI CEMENT chosen by millions
of India.
Ideal raw material
Low lime and magnesia content and high proportion of silicates
Greater fineness
Slow initial and fast final setting
66
ANALYSIS & INTERPRETATION
67
STATEMENT OF CHANGES IN WORKING CAPITAL2011-2012
Table-1Particulars 2011
Rs.2012Rs.
Changes in WC Rs.
Increase DecreaseCurrent Assets:
Inventories
Sundry Debtors
Cash &Bank
Loans& Advances
Total Current Assets(a)
Current Liabilities:
Current Liabilities & Provisions
Total current liabilities(b)
Working Capital a-b
Increase in Working Capital
8,88,68,774
11,23,63,109
1,24,33,458
28,17,26,538
11,52,02,941
17,85,50,027
7,27,32,900
59,86,51,897
26334167
66186918
6029925442
316925359
-
- -
- -
18,89,36,012
28,08,09,874
49,53,91,879 96,51,37,765
23,49,02,360 42,38,38,372
23,49,02,360 42,38,38,372
26,04,89,519
28,08,09,874
54,12,99,393
54,12,99,393 54,12,99,393 46,97,45,886 46,97,45,886
68
Table-1
Sources: we have taken this information from ZAURI CEMENT, from 2011-2012
Interpretation:
Comparing the year 2011-2012 the current assets increased by 46,97,45,886
rupees compare the current liabilities 18,89,36,012 as a result working capital increase
28,08,09,874 rupees. There fore short term financial position of The Financial Services
limited is good.
69
Changes In Working Capital
0
200000000
400000000
600000000
800000000
1000000000
1200000000
TotalCurrentAssets
TotalCurrentLiabilities
WorkingCapital
2011
2012
FUNDS FLOW STATEMENT FOR THE YEAR ENDED WITH
31.12.2012
Table-2
Sources
Amount
Rs. Uses
Amount
Rs.
Funds from operations
Long term loans
Sale of Investments
Decrease in Miscellaneous
expenditure
Increase in Deferred tax liability
12,06,57,250
85,74,96,949
40,02,17,536
14,78,511
3,51,08,965
Increase in Working capital
Purchase of fixed assets
28,08,09,874
113,41,49,337
63,78,87,187 63,78,87,187
Sources: we have taken this information from ZAURI CEMENT, from 2004-2005
Interpretation: The Financial Services limited take huge amount of Long term loans
through funds from operations and Sale of investments. The Financial Services limited
use some of these funds to purchase fixed assets. The Financial Services limited is also
use these funds to Increase working capital.
STATEMENT OF CHANGES IN WORKING CAPITAL2009-2010
70
Table-3Particulars 2009
Rs.2010Rs.
Changes in WC Rs.
Increase DecreaseCurrent Assets:
Inventories
Sundry Debtors
Cash &Bank
Loans& Advances
Total Current Assets(a)
Current Liabilities:
Current Liabilities & Provisions
Total current liabilities(b)
Working Capital a-b
Decrease in Working Capital
11,52,02,941
17,85,50,027
7,27,32,900
59,86,51,897
16,15,83,313
26,56,85,722
4,10,06,192
59,81,54,044
4,63,80,372
8,71,35,695
-
-
-
22,42,86,763
3,17,26,708
4,97,853
32,55,78,269
96,51,37,765 106,64,29,271
42,38,38,372 74,94,16,641
42,38,38,372 74,94,16,641
54,12,99,393 31,70,12,630
22,42,86,763
54,12,99,393 54,12,99,393 35,78,02,830 35,78,02,830
Table-3
71
Sources: we have taken this information from ZAURI CEMENT, from 2009-2010
Interpretation:
Comparing the year 2009-2010 the current assets increased by 10,12,91,506
rupees compare the current liabilities 32,55,78,269 as a result working capital decrease
22,42,86,763 rupees. There fore short term financial position of The Financial Services
limited is not good.
72
Changes in Working Capital
0
200000000
400000000
600000000
800000000
1000000000
1200000000
TotalCurrentAssets
TotalCurrentLiabilities
WorkingCapital
Am
ou
nt
2011
2010
FUNDS FLOW STATEMENT FOR THE YEAR ENDED WITH
31.12.2011
Table-4
Sources
Amount
Rs. Uses
Amount
Rs.
Funds from operations
Long term loans
Decrease in Working capital
Decrease in Miscellaneous
expenditure
Increase in Deferred tax liability
16,01,23,732
15,15,15,878
22,42,86,763
10,76,442
10,08,85,372
Redemption of shares
Purchase of fixed assets
Purchase of Investments
5,40,942
21,69,98,475
42,03,47,770
63,78,87,187 63,78,87,187
Sources: we have taken this information from ZAURI CEMENT, from 2009-2010
Interpretation:
The Financial Services limited take huge amount of Long term loans
through funds from operations and Purchase of investments. The Financial Services
limited use some of these funds to purchase fixed assets. The Financial Services limited
is also use these funds to Decrease working capital.
73
STATEMENT OF CHANGES IN WORKING CAPITAL2010-2011
Table-5Particulars 2010
Rs.2008Rs.
Changes in WCRs.
Increase DecreaseCurrent Assets:
Inventories
Sundry Debtors
Cash & Bank
Loans& Advances
Total Current Assets(a)
Current Liabilities:
Current Liabilities & Provisions
Total current liabilities(b)
Working capital a-b
Increase in working capital
16,15,83,313
26,56,85,722
4,10,06,192
59,81,54,044
21,89,56,216
37,09,00434
11,21,52,347
62,82,93,656
5,73,72,903
10,52,14,712
7,11,46,155
3,01,39,612
-
-
-
-
-
1,11,52,907
25,27,20,475
106,64,29,271 133,03,02,653
74,94,16,641 76,05,69,548
74,94,16,641 76,05,69,548
31,70,12,630
25,27,20,475
56,97,33,105
56,97,33,105 56,97,33,105 26,38,73,382 26,38,73,382
74
Table-5
Sources: we have taken this information from ZAURI CEMENT, from 2010-2008.
Interpretation:
Comparing the year 2010-2008 the current assets increased by 26,38,73,382
rupees compare the current liabilities 1,11,52,907 as a result working capital Increase
75
Changes in Working Capital
0
200000000
400000000
600000000
800000000
1000000000
1200000000
1400000000
TotalCurrentAssets
TotalCurrentLiabilities
WorkingCapital
2010
2008
25,27,20,475 rupees. There fore short term financial position of The Financial Services
limited is good.
FUNDS FLOW STATEMENT FOR THE YEAR ENDED WITH
31.12.2008
Table-6
Sources
Amount
Rs. Uses
Amount
Rs.
Funds from operations
Long term loans
Decrease in Miscellaneous
expenditure
Increase in Differed tax liability
23,51,80,715
27,31,74,976
2,50,800
1,55,69,384
Increase in Working capital
Purchase of fixed assets
Purchase of Investments
25,27,20,475
22,58,55,400
4,56,00,000
52,41,75,875 52,41,75,875
Sources: we have taken this information from ZAURI CEMENT, from 2010-2008.
Interpretation:
The Financial Services limited take huge amount of long term loans through
funds from operations and Purchase of investment. The Financial Services limited use
76
some of these funds to purchase fixed assets. The Financial Services limited is also use
these funds to increase working capital.
STATEMENT OF CHANGES IN WORKING CAPITAL2008-2009
Table-7Particulars 2008
Rs.2009Rs.
Changes in WCRs.
Increase DecreaseCurrent Assets:
Inventories
Sundry Debtors
Cash & Bank
Loans& Advances
Total Current Assets(a)
Current Liabilities:
Current Liabilities & Provisions
Total current Liabilities(b)
Working capital a-b
Decrease in working capital
21,89,56,216
37,09,00434
11,21,52,347
56,39,26,687
35,30,33,377
41,35,39,323
11,86,08,237
56,98,39,851
13,40,77,161
4,26,38,889
64,55,890
59,13,164
-
14,37,44,464
- - -
-
33,28,29,568
126,59,35,684 145,50,20,788
69,62,02,579 102,90,32,147
69,62,02,579 102,90,32,147
56,97,33,105 42,59,88,641
14,37,44,464
56,97,33,105 56,97,33,105 33,28,29,568 33,28,29,568
77
Table-7
Sources: we have taken this information from ZAURI CEMENT, from 2008-2009.
Interpretation: - Comparing the year 2008-2009 the current assets increased by
18,90,85,104 rupees compare the current liabilities 33,28,29,568 as a result working
78
Changes in Working Capital
0
200000000
400000000
600000000
800000000
1000000000
1200000000
1400000000
1600000000
TotalCurrentAssets
TotalCurrentLiabilities
WorkingCapital
2008
2009
capital Decrease 14,37,44,464 rupees. There fore short term financial position of The
Financial Services limited is not good.
FUNDS FLOW STATEMENT FOR THE YEAR ENDED WITH
31.12.2009
Table-8
Sources
Amount
Rs. Uses
Amount
Rs.
Funds from operations
Increase in loans
Decrease in Miscellaneous
expenditure
Decrease in Working capital
Increase in Deffered tax liability
99,81,84,829
118,07,66,087
89,747
14,37,44,464
10,49,68,143
Purchase of fixed assets
Purchase of Investments
Proposed Dividend
225,80,53,270
3,59,00,000
13,38,00,000
242,77,53,270 242,77,53,270
Sources: we have taken this information from ZAURI CEMENT, from 2008-2009.
Interpretation:
79
The Financial Services limited take huge amount of Long term loans through
funds from operations and Purchase of investment. The Financial Services limited use
some of these funds to purchase fixed assets. The Financial Services limited is also use
these funds to Decrease working capital.
FINDINGS:
It is found that The Financial Services limited is holding sufficient share capital.
80
It is inferred that The Financial Services limited is maintaining a minimum Cash
Balances.
.
In 2004-2005 the Working capital of The Financial Services limited is increased
by 28,08,09,874 rupees. In the same period the long term loans of The Financial
Services limited is high because the company get huge amount of funds from
operations and also from decrease in miscellaneous expenditure reserve. The
Financial Services limited uses that fund to redeem the shares and to purchase
fixed assets.
In 2011-2012 the Working capital of The Financial Services limited is decreased
by 22,42,86,763 but the flow of funds is decreased because The Financial
Services limited do not get any funds from decrease of reserves, The Financial
Services limited get funds only from operations and purchase of investment. The
Financial Services limited uses some of those funds to purchase fixed assets.
In 2009-2010 the Working capital of The Financial Services limited is increased
by 25,27,20,475 but the flow of funds is high as compared to previous year
because The Financial Services limited get funds only from operating activities.
The Financial Services limited use some funds to purchase fixed assets.
In 2010-2008 the Working capital of The Financial Services limited is decreased
by 14,37,44,464 but the flow of funds is high as compared to previous year
because The Financial Services limited get funds only from operating activities.
The Financial Services limited use some funds to purchase fixed assets
SUGGESSIONS:
81
It may be suggested that The Financial Services limited should utilize Limited
Funds for the purchase of fixed assets.
If The Financial Services limited spend more money on purchase of fixed assets
& investments it effects the growth of the ZAURI CEMENT company limited.
The company must maintain the sufficient working capital in order to meet the
daily needs of the firm.
The company should increase its investments and its fixed assets.
It has to keep concentration on working capital, expenses, and fixed assets.
It has to decrease its Long term loans (liabilities).
It is better to maintain the same steps which it has followed in 2009-07 to
decrease its liabilities and maintain the profit.
CONCLUSION
82
It can be concluded that funds flow performance of the financial
services limited is good because funds from operations are high in every year but increase
in loans of funds. The Financial services limited utilize some funds to purchase fixed
assets every year the financial services limited do some investment activities to utilize
funds effectively.
83
ANNEXURE
84
ZAURI CEMENT INDUSTRIES LIMITED
BALANCE SHEET AS AT 31.3.2010
Particulars Schedule No. 2009
SOURCES OF FUNDS
Share holder’s Funds:
Share Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liability
Total
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Add: Capital works- in- progress
INVESTMENTS
Current Assets, Loans and Advances
Inventories
Sundry debtors
Cash and Bank Balances
Loans and Advances
Less: Current Liabilities and provisions
Miscellaneous Expenditure(to the extent
not return of or adjusted)
A
B
C
D
E
F
G
H
I
13,43,40,942
89,66,23,798
94,03,76,495
96,39,05,443
24,78,34,769
318,30,81,447
266,23,57,147
55,57,90,567
210,65,66,665
18,15,99,085
228,81,65,665
35,21,99,400
11,52,02,941
17,85,50,027
7,27,32,900
59, 86,51,897
96,51,37,765
42,38,38,372
54,12,99,393
14,16,989
85
Total 318,30,81,4471,447
ZAURI CEMENT INDUSTRIES LIMITED BALANCE SHEET AS AT 31.3.2008
Particulars Schedule No. 2009
SOURCES OF FUNDS
Share holder’s Funds:
Share Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liability
Total
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Add: Capital works- in- progress
INVESTMENTS
Current Assets, Loans and Advances
Inventories
Sundry debtors
Cash and Bank Balances
Loans and Advances
Less: Current Liabilities and provisions
Miscellaneous Expenditure(to the extent
A
B
C
D
E
F
G
H
I
13,38,00,000
105,67,47,530
84,56,73,700
121,84,87,846
34,87,20,141
360,34,29,217
316,89,56,316
67,98,52,280
248,91,04,036
1,60,60,104
250,51,64,140
78,09,11,900
16,15,83,313
26,56,85,722
4,10,06,192
59,81,54,044
106,64,29,271
74,94,16,641
31,70,12,630
3,40,547
86
not return of or adjusted)
Total360,34,29,217,81,447
ZAURI CEMENT INDUSTRIES LIMITED BALANCE SHEET AS AT 31.3.2009
Particulars Schedule No. 2010
SOURCES OF FUNDS
Share holder’s Funds:
Share Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liability
Total
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Add: Capital works- in- progress
INVESTMENTS
Current Assets, Loans and Advances
Inventories
Sundry debtors
Cash and Bank Balances
Loans and Advances
Less: Current Liabilities and provisions
Miscellaneous Expenditure(to the extent
not return of or adjusted)
A
B
C
D
E
F
G
H
I
13,38,00,000
129,19,28,245
92,73,53,942
140,99,82,580
36,42,89,525
412,73,54,292
320,81,62,454
82,53,36,717
238,28,25,737
34,81,93,803
273,10,19,540
82,65,11,900
21,89,56,216
37,09,00,434
11,21,52,347
56,39,26,687
126,59,35,684
69,62,02,579
56,97,33,105
87
Total 89,747
412,73,54,292,81,447
ZAURI CEMENT INDUSTRIES LIMITED BALANCE SHEET AS AT 31.3.2010
Particulars Schedule No. 2008
SOURCES OF FUNDS
Share holder’s Funds:
Share Capital
Reserves and Surplus
Loan Funds
Secured Loans
Unsecured Loans
Deferred Tax Liability
Total
APPLICATION OF FUNDS
Fixed Assets
Gross Block
Less: Depreciation
Net Block
Add: Capital works- in- progress
INVESTMENTS
Current Assets, Loans and Advances
Inventories
Sundry debtors
Cash and Bank Balances
Loans and Advances
Less: Current Liabilities and provisions
Miscellaneous Expenditure(to the extent
A
B
C
D
E
F
G
H
I
13,38,00,000
215,63,13,074
178,57,14,077
173,23,88,532
46,92,57,668
627,74,73,351
398,46,31,393
98,12,21,831
300,34,09,562
198,56,63,248
498,90,72,810
86,24,11,900
35,30,33,377
41,35,39,323
11,86,08,237
56,98,39,851
145,50,20,788
102,90,32,147
42,59,88,641
88
not return of or adjusted)
Total
----
627,74,73,35181,447
ZAURI CEMENT INDUSTRIES LIMITEDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2010
Particulars Schedule No. 2005
INCOME
Sales
(Increase/decrease) in Stock
Total Income
EXPENDITURE
Manufacturing Expenses
Cost of trading goods
Central Excise Duty
Sales Tax
Administrative and Selling Expenses
Interest and Finance Charges
Depreciation
Miscellaneous Expenditure Written off
Total Expenditure
Profit for the year
Provision for taxation
Profit after Tax
Deferred Tax for the year
Fringe Benefit Tax for the year
Prior period expenditure
Profit available for appropriations
Transfer to General Reserve
Proposed Dividend
Tax on Dividend
Profit brought forward from previous
J
K
L
M
E
F
G
I
385,65,72,118
-1,60,57,823
384,05,14,295
153,07,01,345
---
69,86,42,442
55,90,24,763
58,82,88,777
14,43,46,417
11,88,30,197
22,32,340
364,20,66,281
19,84,48,014
152,54,699
18,31,93,315
3,89,50,042
-----------
11,56,849
14,30,86,424
-----------
-----------
------------
89
year
Goodwill on Merger written off
Profit Carried to Balance Sheet
N
56,76,50,645
-1,98,40,834
69,08,96,2351,447
ZAURI CEMENT INDUSTRIES LIMITEDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2008
Particulars Schedule No. 2009
INCOME
Sales
(Increase/decrease) in Stock
Total Income
EXPENDITURE
Manufacturing Expenses
Cost of trading goods
Central Excise Duty
Sales Tax
Administrative and Selling Expenses
Interest and Finance Charges
Depreciation
Miscellaneous Expenditure Written off
Total Expenditure
Profit for the year
Provision for taxation
Profit after Tax
Deferred Tax for the year
Fringe Benefit Tax for the year
Prior period expenditure
Profit available for appropriations
Transfer to General Reserve
Proposed Dividend
Tax on Dividend
J
K
L
M
E
F
G
I
452,87,19779
-98,74,875
451,88,44,904
188,52,41,099
32,67,699
81,46,64,469
62,30,34,491
68,09,34,484
9,96,49,474
12,47,85,177
10,76,442
423,26,53,335
28,61,91,569
2,24,41,139
26,61,91,569
10,08,85,372
-------------
27,41,325
16,01,23,733
-----------
------------
------------
90
Profit brought forward from previous year
Goodwill on Merger written off
Profit Carried to Balance Sheet
N
69,08,96,235
----------
85,10,19,968447
ZAURI CEMENT INDUSTRIES LIMITEDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2009
Particulars Schedule No. 2010
INCOME
Sales
(Increase/decrease) in Stock
Total Income
EXPENDITURE
Manufacturing Expenses
Cost of trading goods
Central Excise Duty
Sales Tax
Administrative and Selling Expenses
Interest and Finance Charges
Depreciation
Miscellaneous Expenditure Written off
Total Expenditure
Profit for the year
Provision for taxation
Profit after Tax
Deferred Tax for the year
Fringe Benefit Tax for the year
Prior period expenditure
Profit available for appropriations
Transfer to General Reserve
Proposed Dividend
Tax on Dividend
J
K
L
M
E
F
G
I
640,97,93,371
2,96,92,824
643,94,86,195
241,01,65,622
67,40,11,176
95,80,88,420
63,36,87,866
118,57,25,154
9,99,66,070
14,54,84,437
2,50,800
610,73,79,545
33,21,06,650
7,51,17,114
25,69,89,536
1,55,69,387
17,33,786
45,05,648
23,51,80,715
-----------
------------
------------
91
Profit brought forward from previous year
Goodwill on Merger written off
Profit Carried to Balance Sheet
N 85,10,19,968
-------------
108,62,00,683
ZAURI CEMENT INDUSTRIES LIMITEDPROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 31.12.2010
Particulars Schedule No. 2008
INCOME
Sales
(Increase/decrease) in Stock
Total Income
EXPENDITURE
Manufacturing Expenses
Cost of trading goods
Central Excise Duty
Sales Tax
Administrative and Selling Expenses
Interest and Finance Charges
Depreciation
Miscellaneous Expenditure Written off
Total Expenditure
Profit for the year
Provision for taxation
Profit after Tax
Deferred Tax for the year
Fringe Benefit Tax for the year
Prior period expenditure
Profit available for appropriations
Transfer to General Reserve
Proposed Dividend
Tax on Dividend
Profit brought forward from previous
J
K
L
M
E
F
G
I
914,46,59,562
3,74,11,258
918,20,70,820
311,40,33,391
5,55,30,769
114,28,05,092
94,83,24,696
197,79,88,742
13,47,58,957
15,59,73,434
89,747
752,95,04,820
165,25,65,992
50,76,18,003
114,49,47,989
10,49,68,144
22,35,543
1,68,20,163
102,09,24,139
15,00,00,000
13,38,00,000
2,27,39,310
92
year
Goodwill on Merger written off
Profit Carried to Balance Sheet
N 108,62,00,683
-----------
180,05,85,512
BIBLIOGRAPHY
Student hand book on cost accounting and financial management by B. Sarvana
Prasad, Edition-5thMay 2009, Page. No. 16.1 to 16.11
Financial Accounting & Finance by K. Rajeshwar Rao, G. Prasad, Edition-1998,
14.1 to 14.6, 15.1 to 15.12
Financial Management Theory & Practice by Prasanna Chandra, Edition-5th 2004,
727 to 758
Financial Management by I.M. Pandey, Edition -4th 2005, Page no 345 to 325
ZAURI CEMENT Annual reports from 2008-2012
http:/www.zuaricement.com
93
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