a study on modernization of plant and financial
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A STUDY ON MODERNIZATION OF PLANT AND FINANCIAL
ANALYSIS OF THE COMPANY.
A project submitted in
partial fulfillment of the requirementfor 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
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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
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INTERNATIONAL SCHOOL OF BUSINESS AND RESEARCH.
ELECTRONIC CITY, BANGALORE-
Certified that this project report titled A STUDY ON FINANCIALPERFORMANCE 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
GUIDEDIRECTORPG STUDIES
Assessed By
INTERNAL EXAMINER EXTERNAL EXAMINER
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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, IndustrialCeramics 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.
http://www.murugappa.com/http://www.murugappa.com/http://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.murugappa.com/http://www.murugappa.com/ -
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. 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 best-
known 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
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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.
Business Group
Gross
Sales
Rs.
Billion
Fertilisers / Pesticides 38.00
Bicycles / Engineering / Chains / MetalFormed Products 19.33
Abrasives / Ceramics / Electrominerals 9.86
Financial Services 14.72
Sugar / Nutraceuticals / Bio Products 6.81
Others (Plantations / Sanitaryware /Constructions, etc)
7.10
Total 95.82
Abrasives & Allied Products
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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.
http://www.cumi-murugappa.com/abrasives/http://www.cumi-murugappa.com/abrasives/http://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/silicon_carbide_macro.htmlhttp://www.cumi-murugappa.com/emd/silicon_carbide_macro.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/emd/silicon_carbide_macro.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/abrasives/ -
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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 abrasivesare automobile, engineering, cutting
tools, refractoriness, ceramics tile, glass and steel.
The characteristics of abrasives industry are as follows:
http://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.html -
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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
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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,
http://www.cumi-murugappa.com/abrasiveshttp://www.cumi-murugappa.com/abrasiveshttp://www.cumi-murugappa.com/abrasives-division.htmlhttp://www.cumi-murugappa.com/abrasives-division.htmlhttp://www.cumi-murugappa.com/abrasives-division.htmlhttp://www.cumi-murugappa.com/abrasives -
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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
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Jingri - CUMI, Yanjiao, China Wendt India, Hosur
Products
Super Abrasives
Inputs
Chemicals, Base oil Electrical Parts
Plants
Chennai, India Bangalore, India Prince Edward Island, Canada
Products
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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.
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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.
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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 kilncapacity 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 theexisting 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
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ACTIVITY DEPARTMENT AREA
WEIGHING
MIXING
MOULDING
DRYINGMOULDING 2670M
LOADING
KILN FIRING
UNLOADINGFIRING 1530M
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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 grindingwheels.
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.
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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 externalair 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
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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.
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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.
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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 whichmanufactures 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
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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
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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.
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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.
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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.
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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:
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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
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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.
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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
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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 1998-
2003.
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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
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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, longterm average tendency. It is not necessary that the increase ordecrease 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.
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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
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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
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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 PresidentHR
Company Secretary:
S. Dhanvanth Kumar.
Auditors:
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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 CURRENT ASSET CURRENT LIABILITIES RATIO
2003-2004 1355.16 447.33 3.02
2004-2005 1411.04 475.92 2.96
2005-2006 1733.71 646.45 2.68
2006-2007 2228.35 857.42 2.59
2007-2008 2898.31 1030.9 2.81
2.1.1 Current Ratio Trend
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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 LIQUID ASSETS LIQUID LIABILITIES RATIO
2003-2004 967.8 447.33 2.17
2004-2005 959.08 475.92 2.02
2005-2006 1219.3 646 1.89
2006-2007 1489.67 857.42 1.74
2007-2008 1952.74 1030.9 1.90
2.1.2. LIQUID RATIOS TREND
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3
3.1
2003-20042004-20052005-20062006-20072007-2008
RATIO
RATIO
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INTERPRETATION:
The above table inferred that the company has equal proportion in 2006.
The company Liquid Ratiois dissatisfactory. The Liquid Ratiotrends have gone down at every
year.
2.1.3. ABSOLUTE LIQUID RATIO
Absolute Liquid Ratio = Absolute Liquid Assets / Liquid Liabilities
(Rs. In million)
YEAR ABSOLUTE LIQUID ASSETS LIQUID LIABILITIES RATIO
2003-2004 1.245 447.33 0.00278318
2004-2005 1348.25 475.92 2.83293411
2005-2006 1587.91 646.45 2.45635393
2006-2007 1955.09 857.42 2.28020107
2007-2008 2728.6 1030.9 2.64681346
2.1.3. ABSOLUTE LIQUID RATIOTREND
0
0.5
1
1.5
2
2.5
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
RATIO
RATIO
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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 RATIOSProprietary Ratio
Proprietary Ratio = Total Shareholders Fund / Total Assets
(Rs. In million)YEAR TOTAL SHAREHOLDERS FUND TOTAL ASSETS RATIO2003-2004 1715.19 2252.8 0.76
2004-2005 1191.96 2534.05 0.79
2005-2006 2374.16 3410.12 0.69
2006-2007 2739.73 4720.84 0.58
2007-2008 3518.75 6144.62 0.57
2.1.4. SOLVENCY RATIOSTREND
0
0.5
1
1.5
2
2.5
3
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
RATIO
RATIO
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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 NET FIXED ASSETS PROPRIETARY FUND RATIO2003-2004 882.53 1715.19 0.51
2004-2005 1092.62 1991.96 0.55
2005-2006 1251.46 2374.16 0.53
2006-2007 2103.17 2739.73 0.77
2007-2008 2640.41 3518.75 0.75
2.1.5. FIXED ASSET TO PROPRIETARY FUND RATIOTREND
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio
Ratio
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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 CURRENT ASSETS PROPRIETARY FUND RATIO2003-2004 1355.16 1715.19 0.79
2004-2005 1411.04 1991.96 0.71
2005-2006 1733.71 2374.16 0.73
2006-2007 2228.35 2739.73 0.81
2007-2008 2898.31 3518.75 0.82
2.1.6. CURRENT ASSET TO PROPRIETARY FUND RATIO TREND
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio
Ratio
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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 INVENTORY CURRENT ASSETS RATIO2003-2004 967.80 1355.16 0.40
2004-2005 451.96 959.08 0.47
2005-2006 51.41 1219.3 0.42
2006-2007 738.68 1489.67 0.49
2007-2008 945.57 1952.74 0.48
2.1.7. INVENTORY TO CURRENT ASSET RATIO TREND
0.640.66
0.68
0.7
0.72
0.74
0.76
0.780.8
0.82
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio
Ratio
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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 LONG TERM DEBT SHAREHOLDERS FUND RATIO2003-2004 403.97 1715 0.23
2004-2005 405.88 1991.96 0.20
2005-2006 723.40 2374.16 0.30
2006-2007 1814.51 2739.73 0.66
2007-2008 3010.04 3518.75 0.86
2.1.7. DEBT EQUITY RATIO TREND
00.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio
Ratio
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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 RATIOSNET PROFIT RATIO
NET PROFIT RATIO = NET PROFIT/NET SALES*100
(Rs. In million)
YEAR NET PROFIT NET SALES PERCENTAGE2003-2004 317.17 2748.35 11.54%
2004-2005 384.24 3112.83 12.34%
2005-2006 766.13 3721.53 20.59%
2006-2007 586.61 4645.56 12.63%
2007-2008 971.70 5830.10 16.67%
2.1.8. PROFITABILITY RATIOS TREND
00.1
0.2
0.3
0.4
0.5
0.6
0.70.8
0.9
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
Ratio
Ratio
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INTERPRETATION:
The above table shows net profit ratio of the firm. The net profit ratio
changeevery 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 ASSETSRETURN ON TOTAL ASSETS=RETURN/TOTAL ASSET*100
(Rs. In million)
YEAR RETURN TOTAL ASSETS PERCENTAGE2003-2004 317.17 2705.05 11.73%
2004-2005 384.24 3012.34 12.76%
2005-2006 766.13 3920.89 19.54%
2006-2007 586.61 5618.20 10.44%
2007-2008 971.70 7842.30 12.39%
2.1.9. RETURN ON TOTAL ASSETS TREND
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
RATIO
RATIO
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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 RETURNRETURN ON SHAREHOLDERS RETURN = RETURN/SHAREHOLDERS
FUND*100
(Rs. In million)
YEAR RETURN SHARE HOLDERS
FUND
PERCENTAGE
2003-2004 317.17 1715.19 18.49%
2004-2005 384.24 1991.96 19.29%
2005-2006 766.13 2374.16 32.27%
2006-2007 586.61 2739.73 21.41%
2007-2008 971.70 3518.75 27.15%
2.1.10. RETURN ON SHAREHOLDERS RETURN TREND
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
20.00%
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
RATIO
RATIO
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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.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2003-2004 2004-2005 2005-2006 2006-2007 2007-2008
RATIO
RATIO
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2.2.1COMPARITIVE BALANCESHEET
Column1 Column2 Column3 Column4 Column5
particulars 2007 2008 increase/decrease in
amount
increase/decrease in
percentage
assets:
fixed assets
net block 2103.2 2640.41 537.24 25.544
capital work in progress 389.32 605.9 216.58 55.630
investments 897.36 1697.68 800.32 89.186
total fixed assets(a) 3389.9 4943.99 1554.14 45.846
current assets:
inventories 738.68 945.57 206.89 28.008
sundry debtors 937.43 1322.86 385.43 41.115Cash & bank balances 273.26 169.71 -103.55 -37.894
Loans & advances 278.98 460.17 181.19 64.947
total current assets(b) 2228.4 2898.31 669.96 30.065
total assets (a+b=c) 5618.2 7842.3 2224.1 39.587
liabilities:
current liability 693.59 815.71 122.12 17.606
provisions 163.83 215.19 51.36 31.349
total current
liabilities(d)
857.42 1030.9 173.48 20.232
long term liability:
secured loans 1797 2267.27 470.25 26.168
un secured loans 726.93 726.93
long term lease liability 17.49 15.84 -1.65 -9.433
deferred tax liability 206.54 282.61 76.07 36.830
total long term
liability(e)
2021.1 3292.65 1271.6 62.917
Capita l& reserves:
share capital 186.71 186.71 0 0
Reserves & surplus 2553 3332.04 779.02 30.513
share holders fund(f) 2739.7 3518.75 779.02 28.434
total liability&capital(h) 5618.2 7842.3 2224.1 39.587
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2.2.2COMPARITIVE BALANCESHEETColumn1 Column2 Column3 Column4 Column5
particulars 2006 2007 increase/decrease in
amount
increase/decrease in
percentage
assets:
fixed assets
net block 1251.46 2103.17 851.71 68.057
capital work in progress 424.95 389.32 -35.63 -8.384
investments 510.77 897.36 386.59 75.687
total fixed assets(a) 2187.18 3389.85 1202.67 54.987
current assets:
inventories 514.41 738.68 224.27 43.597
sundry debtors 824.9 937.43 112.53 13.641
Cash & bank balances 145.8 273.26 127.46 87.421
Loans & advances 248.6 278.98 30.38 12.220
total current assets(b) 1733.71 2228.35 494.64 28.530
total assets (a+b=c) 3920.89 5618.2 1697.31 43.288
liabilities:
current liability 446.2 693.59 247.39 55.443
provisions 200.25 163.83 -36.42 -18.187
total current liabilities(d) 646.45 857.42 210.97 32.635
long term liability:
secured loans 652.11 1797.02 1144.91 175.570
un secured loans 60.55 -60.55
long term lease liability 10.74 17.49 6.75 62.849
deferred tax liability 176.88 206.54 29.66 16.768
total long term liability(e) 900.28 2021.05 1120.77 124.491
Capital & reserves:
share capital 186.71 186.71 0 0
Reserves & surplus 2187.45 2553.02 365.57 16.712
share holders fund(f) 2374.16 2739.73 365.57 15.397
Total liability& capital(h) 3920.89 5618.2 1697.31 43.288
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2.2.3COMPARITIVE BALANCESHEETparticulars 2005 2006 increase/decrease in
amount
increase/decrease in
percentage
assets:
fixed assets
net block 1092.62 1251.46 158.84 14.537
capital work in progress 30.39 424.95 394.56 1298.321
investments 478.29 510.77 32.48 6.790
total fixed assets(a) 1601.3 2187.18 585.88 36.587
current assets:
inventories 451.96 514.41 62.45 13.817
sundry debtors 678.42 824.9 146.48 21.591
Cash & bank balances 62.79 145.8 83.01 132.202Loans & advances 217.87 248.6 30.73 14.104
total current assets(b) 1411.04 1733.71 322.67 22.867
total assets (a+b=c) 3012.34 3920.89 908.55 30.160
liabilities:
current liability 369.48 446.2 76.72 20.764
provisions 106.44 200.25 93.81 88.134
total current
liabilities(d)
475.92 646.45 170.53 35.831
long term liability:
secured loans 275.92 652.11 376.19 136.340
un secured loans 119.02 60.55 -58.47
long term lease liability 10.94 10.74 -0.2 -1.828
deferred tax liability 138.58 176.88 38.3 27.637
total long term
liability(e)
544.46 900.28 355.82 65.352
capital& reserves:
share capital 93.35 186.71 93.36 100.010
Reserves & surplus 1898.61 2187.45 288.84 15.213
share holders fund(f) 1991.96 2374.16 382.2 19.187
Total liability
&capital(h)
3012.34 3920.89 908.55 30.160
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2.2.4COMPARITIVE BALANCESHEETparticulars 2004 2005 increase/decrease in
amount
increase/decrease in
percentage
assets:
fixed assets
net block 882.5
3
1092.
62
210.09 23.805
capital work in
progress
15.11 30.39 15.28 101.125
investments 452.2
5
478.2
9S
26.04 5.757
total fixed assets(a) 1349.
89
1601.
3
251.41 18.624
current assets:
inventories 387.3
6
451.9
6
64.6 16.676
sundry debtors 665.9
8
678.4
2
12.44 1.867
Cash & bank
balances
110.1
6
62.79 -47.37 -43.001
Loans & advances 191.6
6
217.8
7
26.21 13.675
total current
assets(b)
1355.
16
1411.
04
55.88 4.123
total assets (a+b=c) 2705.
05
3012.
34
307.29 11.359
liabilities:
current liability 315.6
9
369.4
8
53.79 17.038
provisions 131.6
4
106.4
4
-25.2 -19.143
total current
liabilities(d)
447.3
3
475.9
2
28.59 6.391
long term liability:
secured loans 395.7
8
275.9
2
-119.86 -30.284
un secured loans 119.0
2
119.02
long term lease
liability
8.19 10.94 2.75 33.577
deferred tax liability 138.5 138.5 0.02 0.014
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6 8
total long termliability(e)
542.53
544.46
1.93 0.355
Capital & reserves:
share capital 93.35 93.35 0 0Reserves & surplus 1621.
84
1898.
61
276.77 17.065
share holders
fund(f)
1715.
19
1991.
96
276.77 16.136
total liability
capital(h)
2705.
05
3012.
34
307.29 11.359
2.2.5COMPARITIVE BALANCESHEET
particulars 2003 2004 increse/decrease in
amount
increse/decrease in
percentageassets:
fixed assets
net block 926.19 882.53 -43.66 -4.713
capital work inprogress
18.57 15.11 -3.46 -18.632
investments 501.97 452.25 -49.72 -9.904
deferred tax asset 31.63
total fixed assets(a) 1478.3
6
1349.8
9
-128.47 -8.690
current assets:
inventories 369.48 387.36 17.88 4.839
sundry debtors 592.37 665.98 73.61 12.426
cash& bank balances 83.56 110.16 26.6 31.833
loans& advances 236.13 191.66 -44.47 -18.832
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2.3.1Common size statement
particulars 2004 percentageAssets:
Fixed assets
net block 882.53 32.625%
capital work in progress 15.11 0.5585%
investments 452.25 16.718%
deferred tax asset
Total fixed assets(a) 1349.89 49.902%
current assets:
inventories 387.36 14.319%
total current
assets(b)
1281.5
4
1355.1
6
73.62 5.744
total assets (a+b=c) 2759.9 2705.0
5
-54.85 -1.987
liabilities:
current liability 275.43 315.69 40.26 14.617
provisions 105.31 131.64 26.33 25.002
total current
liabilities(d)
380.74 447.33 66.59 17.489
long term liability:
secured loans 499.06 395.78 -103.28 -20.694
un secured loans 151.63 -151.63
long term lease
liability
6.96 8.19 1.23 17.672
deferred tax liability 191.12 138.56 -52.56 -27.501
total long term
liability(e)
848.77 542.53 -306.24 -36.080
capital reserves:
share capital 93.35 93.35 0 0
reserves surplus 1437.0
4
1621.8
4
184.8 12.859
share holders fund(f) 1530.3
9
1715.1
9
184.8 12.075
total liability
capital(h)
2759.9 2705.0
5
-54.85 -1.987
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sundry debtors 665.98 24.619%
Cash & bank balances 110.16 4.072%
loans advances 191.66 7.085%
Total current assets(b) 1355.16 50.097%Total assets (a+b=c) 2705.05 100%
Liabilities:
current liability 315.69 11.670%
provisions 131.64 4.866%
Total current liabilities(d) 447.33 16.536%
long term liability:
secured loans 395.78 14.631%
un secured loans 0
long term lease liability 8.19 0.302%
deferred tax liability 138.56 5.122%
total long term liability(e) 542.53 20.056%
capital reserves:
share capital 93.35 3.450%
reserves surplus 1621.84 59.956%
share holders fund(f) 1715.19 63.406%
Total liability capital(h) 2705.05 100%
2.3.2 Common size statement
particulars 2005 percentage
Assets:
fixed assets
net block 1092.62 36.271%
capital work in progress 30.39 1.008%
investments 478.29 15.877%
deferred tax asset 0 0
Total fixed assets(a) 1601.3 53.158%
current assets:
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inventories 451.96 15.003%
sundry debtors 678.42 22.521%
Cash & bank balances 62.79 2.084%
loans advances 217.87 7.232%Total current assets(b) 1411.04 46.841%
Total assets (a+b=c) 3012.34 100%
liabilities:
current liability 369.48 12.265%
provisions 106.44 3.533%
Total current liabilities(d) 475.92 15.799%
long term liability:secured loans 275.92 9.159%
un secured loans 119.02 3.951%
long term lease liability 10.94 0.363%
deferred tax liability 138.58 4.600%
Total long term liability(e) 544.46 18.074%
capital reserves:
share capital 93.35 3.098%
reserves surplus 1898.61 63.027%
share holders fund(f) 1991.96 66.126%Total liability capital(h) 3012.34 100%
2.3.3 Common size statement
particulars 2006 percentage
assets:
fixed assets
net block 1251.46 31.917%
capital work in progress 424.95 10.838%
investments 510.77 13.026%
deferred tax asset 0 0%
Total fixed assets(a) 2187.18 55.782%
current assets:
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inventories 514.41 13.119%
sundry debtors 824.9 21.038%
cash bank balances 145.8 3.718%
loans advances 248.6 6.340%Total current assets(b) 1733.71 44.217%
Total assets (a+b=c) 3920.89 100%
liabilities:
current liability 446.2 11.380%
provisions 200.25 5.107%
Total current liabilities(d) 646.45 16.487%
long term liability:
secured loans 652.11 16.631%
un secured loans 60.55 1.544%
long term lease liability 10.74 0.273%
deferred tax liability 176.88 4.511%
Total long term liability(e) 900.28 22.961%
capital reserves:
share capital 186.71 4.761%
reserves surplus 2187.45 55.789%
share holders fund(f) 2374.16 60.551%
Total liability capital(h) 3920.89 100%
2.3.4 Common size statement
particulars 2007 percentage
Assets:fixed assets
net block 2103.17 37.4345%
capital work in progress 389.32 6.929%
investments 897.36 15.972%
deferred tax asset 0 0
Total fixed assets(a) 3389.85 60.336%
current assets:
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inventories 738.68 13.147%
sundry debtors 937.43 16.685%
Cash & bank balances 273.26 4.863%
Loans & advances 278.98 4.965%Total current assets(b) 2228.35 39.663%
Total assets (a+b=c) 5618.2 100%
liabilities:
current liability 693.59 12.345%
provisions 163.83 2.916%
Total current liabilities(d) 857.42 15.261%
long term liability:
secured loans 1797.02 31.98%
un secured loans 0 0
long term lease liability 17.49 0.31%
deferred tax liability 206.54 3.67%
Total long term liability(e) 2021.05 35.97%
Capital & reserves:
share capital 186.71 3.32%
Reserves & surplus 2553.02 45.44%share holders fund(f) 2739.73 48.76%
Total liability & capital(h) 5618.2 100%
2.3.5 Common size statement
particulars 2007 percentage
Assets:fixed assets
net block 2103.17 37.4345%capital work in progress 389.32 6.929%
investments 897.36 15.972%
deferred tax asset 0 0
Total fixed assets(a) 3389.85 60.336%
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Current assets:
inventories 738.68 13.147%
sundry debtors 937.43 16.685%
Cash & bank balances 273.26 4.863%
Loans & advances 278.98 4.965%
Total current assets(b) 2228.35 39.663%
Total assets (a+b=c) 5618.2 100%
liabilities:
current liability 693.59 12.345%
provisions 163.83 2.916%
Total current liabilities(d) 857.42 15.261%
long term liability:
secured loans 1797.02 31.98%
un secured loans 0 0
long term lease liability 17.49 0.31%
deferred tax liability 206.54 3.67%
Total long term liability(e) 2021.05 35.97%
Capital & reserves:
share capital 186.71 3.32%Reserves & surplus 2553.02 45.44%
share holders fund(f) 2739.73 48.76%
Total liability & capital(h) 5618.2 100%
2.3.6 Common size statement
particulars 2008 Percentage
Assets:
fixed assets
net block 2640.41 33.66%capital work in progress 605.9 7.72%
investments 1697.68 21.64%
deferred tax asset 0 0Total fixed assets(a) 4943.99 63.04%
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Current assets:
inventories 945.57 12.05%
sundry debtors 1322.86 16.86%
Cash & bank balances 169.71 2.16%
Loans & advances 460.17 5.86%
Total current assets(b) 2898.31 36.95%
Total assets (a+b=c) 7842.3 100%
liabilities:
current liability 815.71 10.40%
provisions 215 2.74%
Total current liabilities(d) 1030.71 13.14%
long term liability:
secured loans 2267.27 28.91%
un secured loans 726.93 9.26%
long term lease liability 15.84 0.20%
deferred tax liability 282.61 3.60%
Total long term liability(e) 3292.65 41.98%
Capital & reserves:
share capital 186.71 2.38%
Reserves & surplus 3332.04 42.48%
share holders fund(f) 3518.75 44.86%
Total liability & capital(h) 7842.11 100%
2.4.1 TREND ANALYSIS FOR SALES
year Sales(y) Deviafion form2005 X2X X Y
2003-04 2748.35 -2 -5496.70 4
2004-05 3112.83 -1 -3112.83 1
2005-06 3721.53 0 0.00 0
2006-07 4645.56 1 4645.56 12007-08 5830.10 2 11660.20 4
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N=5 y=20058.37 x=0 xy7696.23 x210
Y= a+bx
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
X2X X Y
2003-04 317.17 -2 -634.34 4
2004-05 384.24 -1 -384.24 12005-06 766.13 0 0.00 0
2006-07 586.61 1 586.61 1
2007-08 971.70 2 1943.4 4
N=5 y=3025.85 x=0 xy=1511.43 x210
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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
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__ 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
year Current
assets (x)
2003-04 1355.16 -570.15 2748.35 -1263.32 1595977 720281.89
2004-05 1411.04 -514.27 3112.83 -898.84 807913.35 462246.452005-06 1733.71 -191.6 3721.53 -290.14 84181.22 55590.822006-07 2228.35 303.4 4645.56 633.89 401816.53 192322.232007-08 2898.31 973.0 5830.10 1818.43 3306687.67 1769332.39
9626.57 0.8 20058.37 0.02 6196576.19 3149773.78
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2.5.2 CORRELATION FOR SHARE HOLDERS
x
X = _____ = 14.06
N 5
= 2.81
__ y
Y = _____ = 9.7
N 5
= 1.94
r = xyV x2* y2
r = 0.1056
0.1056
= 0.1056
0.1113
= 0.949
year Current
assets (x)
2003-04 3.02 0.21 0.0441 2.16 0.22 0.048 0.04622004-05 2.96 0.15 0.0225 2.01 0.07 0.0049 0.01052005-06 2.68 -0.13 0.0169 1.89 -0.05 0.0025 0.00652006-07 2.60 -0.21 0.0441 1.74 -0.20 0.04 0.0422007-08 2.8 -0.01 0.0001 1.90 -.04 0.0016 0.0004
14.06 0.01 0.1277 9.7 0.00 0.097 0.1056
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FINDINGS
AS PER THE BALANCE SHEET FOR THE YEAR ENDED 2007-08
PARTICULARS 2008
REVENUE(A)GROSS SALES 6606
OTHER INCOME 847
PROFITABILITY(B)
PBIT 1541
PBT 1372
PAT 972
PBIT/GROSS SALES(%) 23.3%
PBT/GROSS SALES(%) 20.8%ASSETS EMPLOYED(C)FIXED ASSETS 3218
INVESTMENTS 1698
NET CURRENT ASSETS 1867
TOTAL ASSETS 6783
FIXED ASSETS TURNOVER 2.1
RETURN ON CAPITAL EMPLOYED(%) 22.7%
FUNDS EMPLOYED(D)PAIDUP-CAPITAL 187
RESERVES 3304
NET WORTH 3490
LOANS FUNDS 3010
NET DEFERRED TAX LIABILITY 283
TOTAL FUNDS EMPLOYED 6783
DEBT TO EQUITY RATIO (E) 0.9
INVESTOR PARAMETERSDIVIDEND%(F) 100%
EPS(ON RS .2 FACE VALUE)(G) 10.4
BOOK VALUE 37RETURN ON NET WORTH%(H) 27.8%
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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 507.484978.91
CURRENT LIABILITIES AND PROVISIONS
A.CURRENT LAIBILITIES 1500.99
B.PROVISIONS 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 38.50
BUILDING 1254.55
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PLANT AND MACHINERY 3950.50
FURNITURE AND FIXTURES 106.00
VEHICLES 60.92
VEHICLES TAKEN ON LEASE 24.20
5,434.67
SHARE HOLDERS EQUITY
TOTAL ASSETS (TANGIBLE ASSETS)
=250,000,00054,34,670
=46,000,953
3.FIXED ASSETS TO LONGTERM FUNDS RATIO
FIXED ASSETS
L.T.FUNDS
FIFED ASSETS
1.GOODWILL 510
2.TRADE MARK 1.613.TECHINAL 17.27
4.LAND 128.54
5.BUILDING 1254.556.PLANT AND MACHINERY 3950.50
7.FURNITURE AND FIXTURES 106.00
8.VEHICLES 60.929.VEHICLES TAKEN ON LEASE 24.20
5,548,69
FIXED ASSETSL.T. FUNDS
=5,548,69
1390.22
=3,9912
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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 945,572. SUNDRY DRS 1322.86
3. C/B BALANCES 169.71
LOANS AND ADVANCES 460.172898.31
INVENTORY*100
CURRENT ASSETS
=945,572898.31*100
=32,6248(MILLION)
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6.FIXED ASSETS TURN OVER RATIO
SALESFIXED ASSETS
= 6567.75
4282.04
= 1,53378
7.TOTAL ASSETS TURN OVER RATIO
SALESTOTAL ASSETS
= 6567.75
7180.35
=0.91468
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