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WORKING CAPITAL MANAGEMENT LTD
KBD SUGARS&DISTILLERIES
INTRODUCTION
Finance is the lifeblood of every business activity without which the wheels of modern business organization system cannot be greased. Finance management is managerial activity, which is concerned with planning and controlling of the firm's financial Resources. Finance is a scarce resource and it has to be managed efficiency for the successful functioning of any company. Several companies have come to grief mainly because of inefficient management of finance, in spite of other favorable conditions The term working capital is defined as the capital which is needed for day to day operations in a business concern such as purchase of raw material, for meeting daily expenditure on salaries, wages, rents, advertisements etc. Working capital management is concerned with a problem that arises in attempting to manage the current assets, the current liabilities and interrelationship that exist between them. Working capital is the amount of funds. Which business concerns to finance its day-today operations it can be regards as that proportion of companys total capital which is employed in short term operation.Previously the business was confined to the national level only. Now therefore sufficient working capital management is necessary to sustain sales activity. Technically this refers to as the operating cycle.
DEFINITIONS
Financial management is the operation activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations. - Joseph and Massie Financial Management is the application of the planning and control functions to the finance function. - Archer
Financial management is an area of financial decision making, harmonizing individual motives and goals. - Weston and Brigham
V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 1
Scope of Finance Management
Firms create manufacturing capacities for production for goods; some provide services to customers. They sell their goods or services to earn profits. They raise funds to acquire manufacturing and other facilities. Thus, the three most important activities of a business firm are: Production Marketing Finance
A firm secures whatever capital it needs and employees it (finance activity) in activities that generate returns on invested capital (production and marketing activities). A business firm thus is an entity that engages in activities to perform the functions of finance, production and
marketing. The raising of capital funds and using them for generating returns to the supplies of funds is called the finance function of the firm.
WORKING CAPITAL
INTRODUCTION TO WORKING CAPITAL:
Companies that manage their working capital will have relatively strong profit and there share holders have been rewarded with capital appreciation despite an over all trend of declining share prices. Others especially, commodity produces and companies whose procures and companies whose products take cyclic demand have floundered. Many a times, the main causes of the failure of business enterprise have been found to be shortages of current assets and their mishandling. Inside amount working capital is a serious handicap in business where as fixed capital investment generate products companies competent and administration of current assets sales the problems of under utilization of capacitance. A firm contains input to make a finished product, which is sold to make a profit. These sales proceed are re-invested to make such products and generate for the profits. The problem is, there is a lag between the time a finished product is ready and the time its sales, proceeds are realized. If a company waited till there products come ii, its plant and machinery would lie this time lag, every business activity make funds. This is its working capital, the rational for the superior valuation. Since there is its working capital, the rational for the superior valuation. Since there is a cost associated with working capital, a company that can generate more revenues form a special amount, working capital than other, will eventually be more profitable, better cash flows.
DEFINTION:
The sum of the current assets is the working capital of a business. - MILL Any acquisition of funds which increase the current assets, increased working capital, for there are one and the same. BONNEVILLE & DEWEY
Working capital has ordinarily been defined as the excess of current assets over current liabilities. C.W.GERSTEN BERG
The interaction between current assets and current liabilities is, there fore the main theme of the theory if working management
WORKING CAPITAL CYCLE

The working capital cycle can be defined as : The period of time which elapses between the point at which cash begins to be expended on the production of a product and the collection of cash from a customer. The diagram below illustrates the working capital for a manufacturing firm. The upper portion of the diagram above shows in a simplified from the chain of events in a manufacturing firm. Each of boxes in the upper part of the diagram can be seen as a tank through which funds flow. These tanks, which are concerned with day-to-day activities, have funds constantly following into and out of them. The chain starts with the firm buying raw materials on credit. In due course this stock will be used in production, work will be carried out on the stock, and it will become part of the firms work-inprogress(WIP). Work will continue on the WIP until eventually emerges as the finished product. As production progress, labour costs and overheads will need to be met of course at some stage trade creditors will need to be paid. When the finished goods are sold on credit, debtors are increased. They will eventually pay, so that cash will be injected into the firm. The business will have to make payments to government for taxation. Fixed assets will be purchased and sold.

Lesser of fixed assets will be paid their rent
Share holders (existing of new) may provide new funds in the form of cash Some shares may be redeemed for cash Dividends may be paid
WORKING CAPITAL
One of the most important areas in the day-to-day management of the firm is the management of working capital. Working capital management is the functional area of finance that covers all the current accounts of the firm. It is concerned with the management of the level of individual current assets as well as the management of total working capital. Procurement of funds is firstly concerned for financing working capital requirement of the firm and secondly for financing working capital requirement of the firm and secondly for financing fixed assets. MEANING AND CONCEPT OF WORKING CAPITAL Working capital refers to the funds invested in current assets, i.e., investment in stocks, sundry debtors cash and other current assets. Current assets are essential to use fixed assets profitably. For example, a machine cannot be used without raw material. The investment on the purchase of raw material is identified as working capital. It is obvious that a certain amounts of funds is always tied up in rawmaterial inventories, work-in-progress, finished goods, consumable stores, sundry debtors and day to day cash requirements. However, the businessman also enjoys credit facilities from his supply raw material on credit. Similarly, a businessman not pays immediately for various expenses. For instance, the laborers are paid only periodically. Therefore, a certain amount of funds is automatically available to finance the current assets requirements. However, the requirements for current assets are usually greater than the
amount of funds payable through current liabilities. In other words the current assets are to be kept at a higher level than the current liabilities. Working capital = Current assets Current Liabilities
CONCEPT OF WORKING CAPITAL

1. From the point of view of concept the term working capital can be used in two different ways:
Gross Working Capital: The gross working capital refers to investment in all the current assets taken together. The total of investments in all current assets is known as Gross working Capital. Net working Capital: The term net working capital refers to excess of total current liabilities. It may be noted that the current liabilities refers to these liabilities which are payable within a period after 1 year. 2. From the point of view of time, the term working capital can be divided into two categories: Permanent working capital: It also refers to the hardcore working capital. It is that minimum level of investment in the current assets that is carried by the business at all times to carry our minimum level of its activities. Temporary Working Capital:
It refers to that part of total working capital which is required by a business over and above permanent working capital. It is also called variable working capital.
INDUSTRY PROFILE
Sugarcane is one of the important crop for the INDIAN FARMER. Sugar & jigger are the main products that we get from sugarcane other products baggase for industrial use molasses for distillery, filter cake, mudas an organic manure & green leaves with tops for cattle feed are also available as by products, because of its multi uses sugarcane has played crucial feed role in Indian economy with Rs.20,000 Cores TURNOVER & WITH 450 SUGAR MILLS PROVIDING assistance to 45 million sugarcane farmer and 2 million workmen directly and indirectly. In AP sugar industry is an important agro based industry occupying the SECOND position next to textile industry. The annual cultivated area is about 1.99 LAKHS hectares with a yield of 149.45 LAKHS of tones during 1996-1997. At present there are 36 sugar factories in the state and 50% of them are in co-operative sector. Actually the work sugar derived from a Sanskrit word SHAKRA. Sugar Industry in India is well developed with a consumer base of more than billions of people. It is also the second largest producer of sugar in the world. There are around 45 million of sugar cane growers in India and a larger portion of rural labourers in the country largely rely upon this industry. Sugar Industry is one of the agricultural based industry. In India it is the second largest agricultural industry after textile industry
History
The discovery of sugarcane, from which sugar as it is known today, is derived, dates back unknown thousands of years. It is thought to have originated in New Guinea, and was spread along routes to Southeast Asia and India. The process known for creating sugar, by pressing out the juice and then boiling it into crystals, was developed in India around 500 BC. Its cultivation was not introduced into Europe until the middle-ages, when it was brought to Spain by Arabs. Columbus took the plant, dearly held, to the West Indies, where it began to thrive in a most favorable climate. It was not until the eighteenth century that sugarcane cultivation was began in the United States, where it was planted in the southern climate of New Orleans. The very first refinery was built in New York City around 1690; the industry was established by the 1830s. Earlier attempts to create a successful industry in the U.S. did not fare well; from the late 1830s, when the first factory was built. Until 1872, sugar factories closed down almost as quickly as they had opened. It was 1872 before a factory, built in California, was finally able to successfully produce sugar in a profitable manner. At the end of that century, more than thirty factories were in operation in the U.S. The history of sugar industry in India begins in 1903 when a sugar factory was set up in Bihar and U.P each. In 1932 there were 32 factories operating in the country. In India, the cultivation of sugarcane is 10,000 miles tones. The average yield being 56 tones per acre of total cultivating land is occupied by sugarcane cultivation. Sugarcane is grown in almost all part of India, except in colder regions and extreme North Jammu& Kashmir, Himachal Pradesh. The industry has developed at a fast rate in Maharashtra, Andhra Pradesh, Karnataka and Tamil Nadu. In India U.P leads other States in Sugarcane production, followed by T.N and Maharashtra. Sugar comes under the Essential Commodities Act. Ipso facto, there has been control on all facets of the sugar trade. The licensing regime that regulates the installed capacity, the minimum support price for cane, the reservation of can area for mills and the control over price and movement of sugar as well its byproduct molasses, have all triggered a situation totally out of sync with market realities.
The Central Government will allot monthly sales sugar quota for each factory based on the stock available in the concerned factory Go down. The Central Government removed the controls imposed under the Essential Commodities Act, 1955 on stocking and movement and requiring licensing of dealers in respect of specified commodities with effect from 14 th March, 2002 vide Government of Indias Notification No. GSR 104(E), dated 15 th February, 2002. With the coming into effect of the above order any dealer may freely by, stock, sell, transport, distribute, dispose, acquire, use or consume any quantity of wheat, paddy/rice, coarse grains, sugar, edible oil seeds and edible oil and shall not require a permit or license therefore under any order issued under the Essential Commodities Act, 1955. Area wise distribution of sugar industry in A.P.
The list of Co-operative Sugar factories in A.P.

1. The co-operative K.B.D Sugars & Distilleries ltd.. 2. The Chodavaram Co-operative sugars ltd, Chodavaram. 3. The Anakapalle Co-operative sugars ltd, Anakapalle. 4. The Etikuppaka Co-operative agricultural of industrial society ltd, Ethikuppaka. 5. Sir Vijayarama Gajapathi Co-operative sugars ltd. 6. The Amadavalasa Co-operative agricultural industrial society ltd, Srikakulam. 7. The West Godavari Co-operative sugars ltd, Eluru. 8. Palakollu Co-operative agricultural & industrial society ltd, Palakollu. 9. The Thandara Co-operative sugars ltd, Visakapatnam. 10.Nizamabad Co-operative sugars ltd, Nizamabad. 11. Sir Venkateswara Cooperative sugars ltd, Renigunta. 12. The Cuddapah Co-operative sugars ltd, Chennur.
13. The Nandyal Co-operative sugars ltd, Ponnapuram. 14. The Kovur Co-operative sugars ltd, Nellore. 15. Nagarjuna Co-operative sugars mills ltd, Gurzala. 16. Nampaneni Venkata Rao Co-operative sugars ltd, Hanuman Junction. 17. Sri Hanuman Co-operative sugars ltd, Hanuman Junction.
Sugar production in states

The following table shows level of sugar production (in lakh tonnes) in India states
State Uttar Pradesh Maharashtra Karnataka Tamilnadu Andhra Pradesh Gujarat Haryana Uttaranchal Punjab Bihar Madhya Pradesh Other
2006-07 56.74 60.64 13.68 19.04 11.88 10.28 5.99 4.59 5.11 4.51 0.85 1.91
2007-08 40.08 31.99 10.57 11.9 8.81 10.77 5.86 3.93 3.88 2.27 0.94 5.09
2008-09 60.32 42.29 15 9.84 9.75 8.32 4.03 3.82 3.87 2.75 1.85 6.58
The sugar production in the states largely depends upon monsoon .from 1998-03 good monsoon resulted a larger production of sugar in the country
COMPANY PROFILE
KARNATAKA BREAWARIES DISTILLERIES SUGARS
The irrigation in Chittoor district mostly depends on open wells. Recharge of water in the wells depends in ground water level and rainfall. However, rainfall depends in monsoon which is uncertain. The soils in district are almost suitable for sugarcane cultivation. The formers also having good knowledge of growing Sugarcane. In good olden days, total quantity if sugarcane produce in the district was converted as jaggery by gangues (Bullock Crushers) and power crushers. The jaggery making was very difficult to the small farmers due to lack of crusher and unfavorable prices. The big farmers also faced difficulty to crush the cane for long period. The jaggery made in the district was brought to the Chittoor and Pakala which are market places with railway transportation. There was list of exploitation of farmers by the jaggery mundi owners by advancing the money with high interest rates, commission and also not properly weighment. The price fluctuation created by the traders was also a reason for poor realization, but there was no other choice to the farmers.
NAME Location and Address
:KBD SUGARS AND DISTILLERIES LTD, : MUDIPAPANAPALLI, (village) SUGALIMITTA POST,
PUNGANUR MANDAL 517247, CHITTOOR DIST., A.P.
BRIEF HISTORY ABOUT THE COMPANY:

The company was originally incorporated on 16 th day of October, 1984 under the of SREE TELUGU SUGARS LIMITED. Subsequently the name of the company was changed to SREE VANI SUGARS AND INDUSTRIES LIMITED on the 5th day of April, 1990. Again subsequently the name of the company was changed to KARNATAKA BREAWARIES DISTILLERS SUGARS LIMITED on the 1st March, 2005. The company was initially promoted by Sri. T. Suryachandra Rao, Managing Director and Sri S. Gokul, Executive Director commences its commercial production from 01st July, 1992. In the initially years if performance of the company was much below the break event levels. Due to poor performance, the company accumulated substantial cash loses and also defaulted in meeting the terms load comities to AIFIs.In these circumstances, the promoters have inducted Sri D. K. Audhikesavulu as a co-promoter in order to facilitate the company to meet. The cost overrun of the project and also provide for the short fall in the margins for working capital. Sri S. Gokul has since come out the board and left the company.
MAIN OBJECTS OF THE COMPANY

To carry in the business as manufacturers, produces, processors, sellers, distributors, stock lists and traders of sugars and its derivatives, molasses biases and all materials and substances arising as products and wastes products out of and in the course of manufacture of sugar. To carry in the business as manufacturers, producers, brewers, blenders, dealers distillers, stock lists and traders of rectified spirit, ethyl alcohol, gasohol, acetic acid, acetones anhydride, vinyl acetate polymers, plastics, polyvinyl chloride, liquors and all products made there from. To carry on the business as manufacturers, producers, packers, dealers, stock lists and traders of furfural, bulk drugs, pharmaceutical and medical preparations, made out of byproducts of sugar or their derivatives. To carry in the business as manufacturers, dealers, distributors, stock lists and traders of biogases pulp, paper pulp and pulp made out agricultural residues or other fibrous materials, paper, newsprints, paperboards, millboards, starboards, cites paper of kinds, paper bags, febrile boxes, cartons, corrugate containers, wrapping and packing materials. To carry on the business as planters, growers, cultivators, farmers and producers of sugarcane, sugar beet. To generate electrical power by conventional, non-conventional methods, including coal, gas lignite, naphtha oil, bio-mass, bio-gases, waste thermal solar, hydel, geo-hydel, mino tidal waves any to promote, own acquire erect, construct, establish, maintain, improve
manage, operate, alter carry on, control. Take in hire / lease, power plants, cogeneration plants, energy conversion projects power houses, transmissions and distribution system for generation, transmission and supply of electrical energy to the state electricity board, state govt., appropriate authorities, agricultural, household industrial, commercial, and any other consumer for industrial purpose in Indian and else where specified by the state / central govt. local authority in state electricity board and any other competent authorities by entering into necessary agreements.
PRESENT BOARD OF DIRECTORS
NAME SRI D.K AUDIKESAVULU
DESIGNATION CHAIRMAN DIRECTOR AND MANAGING
SRI K.M SRINIVASULU
DIRECTOR
SRI T.J. INDRA PRAKASH
VICE PRESIDENT
In this company at present there is Chairman, Managing Director and Six Directors.
PRODUCTION PROCESS
While plantations, sugar manufacturing from Sugarcane is a continuous process involving several stages viz. Clarification, Concentration, Crystallization and Oaring. In order to extract juice from cane, the practice is to crush the cane in a random of a 3rller miller. In order to extract as mush juices possible, water is adder to the crushed mass, which further dilutes whatever left over juice. This extracted juice is termed as mixed juice. Will be in both diluted and undiluted form. This mixed juice is weighted in a weighing scale and sent for processing. The weighted mixed juice is heated in juice Heaters in 2 stages. In the first stage and heating the juice is heated from about 35c -70c. This heated juice is mixed with milk of lime and sulphr-di-oxide, in a vessel, which are called clarifying agents.In the second stage of heating which is heated from about70c-103c. These clarifying agenys combined with various impurities to from precipitation and the precipitation is allowed to settle down leaving clear juice. The juice retention time is about 3 hours. The clear juice is further boiled in a set of vessels known as evaporators. This concentrated juices now called Syrup which contains 60% solids, by weight. It contains several coloring matters, which have to be eliminated neutralized before the final stage of concentration. For this process the syrup is sulfated again with SO2 gas. This clarifications
process is known as double sulphitation. This surface syrup of sent to pan floor where the final stages of boiling of the first stage where syrup other high purity materials are boiled to build up what is called as Massecuite i.e., mixture of sugar crystals and molasses. Massecuite is subjected to cooling in crystallizes from where it is taken for centrifuging i.e., method used to separate sugar crystals are nothing but pure source and the dried graded and bagged. The molasses obtained are taken back for the subsequent stages of boiling. In the second stage the Mesecuite (that is centrifuged) is cured again continuous in centrifugal machines which leads to sugar. In the third stage Massecuite is built-up with low purity materials and boiled heavily and then this Messecuite is cooled much longer when compared to the other 2 Messecuite in order to allow maximum exhaustion of source content. The sugar obtained is mixed with water and Mango is prepared. The molasses obtained in final molasses from which no further exhaustion of sugar is possible is out for storage.
SALES
The government of India, commission of Andhra Pradesh, controls sales of KBD sugars and Distilleries Limited. So there is no as such projected sales target.
MANPOWER
The KBD Sugars unit has workers strength of 450 and staff of about 90. The unit also has few Hosing colonies accommodating few of his his workers.
POLLUTION CONTROL
The company has installed the required equipment to prevent water and air pollution control air pollution as per the standards laid down by the AP pollution Control Board. Necessary steps have also bee taken such as plantation of trees, saplings and seeding in and around factory area and in the colony, to protect the environment ecology.
FINANCE
Availability of finances that is the cash and bank credit effects the working capital requirements of KBD sugars & distilleries Ltd. to considerable extent.
RESEARCH AND DEVELOPMENT

The company has beep attempting cultivation of various varieties of sugarcane in the notified area to identify the variety, which is more suitable to the existing agro-climatic conditions, Continuous efforts. Are also being made in this direction to grow sugarcane variety which gives higher sugarcane yield and higher recovery in the notified area.
DEPARTMENTATION
1. Warehouse in this departments the field product is brought and prepared for dispatch 2. Engineering department in this department spare part is made and old parts are repaired. 3. Caning department - in this departments account is maintained for the amount of raw material brought in by the farmers to the factory premises. 4. Research and development department - the functions of this department are inspection and testing. It ensures quality from input finished product. 5. Planning department - Planning department is linked with marketing and technical department. This department plans all the specifications, finalize the rates and prepare purchase orders as and when required. 6. Marketing department this department is the backbone of the entire company, it looks after the marketing aspects of the company. 7. Accounts and finance department this department looks after the companys financial aspects and makes the wages and salaries of staff and workers.
8. Human resources development - this department is responsible for formulation, implementing, monitoring and reviewing periodically the personal and HRD policies and practices considered conductive to the overall development of the employees as well as the organization.
ORGANIZATION
STRUCTURE
Chairman
Board of directors
Managing directors
Executive directors
VP Finance
VP Personal
VP Marketing
VP
Production
Staff
Staff
Staff
Staff
OBJECTIVES OF THE STUDY

The following are the objectives of the present study. Primary Objective: To ascertain the efficiency of accounts receivable and accounts payables of K B D Sugars & Distilleries Limited. To analyze the working capital position of K B D Sugar & Distilleries industries limited.
Secondary Objective: To offer suggestions regarding working capital of the concern. To study the financial position of the company
The sources of working capital may be said to fall in four categories Trade credit Bank credit Current provision of non-bank short term borrowings Long terms sources comparing equity capital and long-term borrowing
SCOPE OF THE STUDY

Financial management is that the managerial activity is concerned with the planning and controlling of the firms financial resource. The subject of financial is of immense interest to both academician and practicing managements. It is of great interest of academicians because the subject is still developing and there are still certain areas where controlling exists for which no unanimous solutions have been researches as yet. The present study aims at the following: Highlighting the necessity of current assets and current liabilities. Explain the principles of current assets, investment and financing. Focus on the proper mix of short term financing for current assets. Emphasis the need and goal of establishing a sound credit policy. Suggest the need of monitoring receivables. Highlights the need for holding cash. Discuss the techniques of preparing cash budget. Focus on the management of cash collecting and disbursement. Highlight the need for holding cash.
IMPORTANCE OF THE STUDY

Investment is fixed assets only is not sufficient to run the business. Therefore working capital or investment in current assets is a must for the purchase of raw materials and for meeting the dayto-day expenditure on salaries, wages, rents etc. The main advantages of adequate working capital are as follows: If proper cash balance is maintained a Company can avail the advantage of cash discounts by paying cash for the purchase of raw materials in the discount period, which results in reducing the cost of production. Adequate working capital creates a sense of security, confidence and loyalty not only throughout the business itself but also its customers, creditors and business associates. A firm ca raise funds from the market, purchase of goods on credit and borrow short term funds from banks etc. If investors and borrowers are confident that they will get their due interest and payment of principle in time. Certain contingencies like financial crises due to heavy losses; business oscillation etc. can be easily overcome, if the company maintains adequate working capital. A continuous supply of raw material, research programs, innovation and technical developments and expansion programs can successfully be carried out if working capital is maintained in the business. It will increase the production efficiency, which in turn increase the efficiency and morale of the employees, lower the cost and create image in the community.
LIMITATIONS OF THE STUDY

An extensive analysis was not possible in short span of time. The information is collected only from the secondary data. Analysis is based on the historical datas available and doesnt guarantee future performance. I have been selected for the study of the project. The project duration is Limited period i.e. 2 months only. The data collected has been limited only 6 years financial Annual Reports. The information used is primarily from historical annual reports that are available to the public. The financial statements relating to 5 accounting years are taken up for the study. But detailed analysis could not be carried for the project work because of the limited time span. The interpretation from the analysis of financial statements is based on quantitative information only. Qualitative factors are not considered for the analysis.
RESEARCH METHODOLOGY
Source of Data The data required for this project is collected from the following sources for the period between 2004-05 to 2008-09. Primary Data Information collected from internal guide and finance manager. The primary data was collected mainly with the interactions and discussions with the company's Executives. Secondary Data Most of the calculations are made on the financial statement of the company and the company provided financial statements for 5 years. Some of the information recording to the theoretical aspects were collected by referring standards texts and through internet. 1.Referring standards texts, 2.reference books 3.and Internet collected some of the information regarding to the theoretical aspects.
REVIEW OF LITERATURE
AN INTRODUCTION TO WORKING CAPITAL MANAGEMENT INTRODUCTION
Capital required for a business can be classified as following. Fixed capital Working capital
Long term funds are required to create production facilities though purchase of fixed assets such as plants and machinery, land, building, furniture etc. investing in these assets represent that part of firms capital, which is blotched on a permanent or fixed capital
Fund needed for short term purpose for a purchase of raw material, payment of wages and other day-to-day expenses etc.
these funds are known as working capital, simple working capital refers to that part of the firms capital which is required for financing short-term or current assets such as cash, marketable securities, debtors and inventories.
Working capital is also known as revaluing or circulating capital or short term capital.According to subbing, working capital is the amount of funds necessary to cover the cost of operating the enterprise.One of the important aspects of companys financial management is the management of working capital.
Working capital management refers to the management of current assets, namely cash, marketable securities, stock, i.e., inventories and debtors and current liabilities like bills payable, sundry creditors, bank over draft, outstanding expenses, etc., although the management of current assets is similar to that of fixed assets. Yet it differs to some extent from the management of fixed assets in three important ways. First, in managing fixed assets time is very important, consequently, discounting and compounding aspects of time element play a significant role in capital.
The level of fixed assets cannot be adjusted in the short-term although the level of both current and fixed assets depending upon the production and sales and it is possible to
adjust the level of current assets depending upon the current level of activity of the firm.Second larger holding of current assets especially strengthen budgeting and a minor one in the management of current assets.firms liquidity position and reduces briskness it also reduces the overall profitability in firm of idle investment in current assets no doubt increase the profitability but at the some reduces the liquidity which may results in financial embarrassment. Stock out cost of pocket expenses defending the suit.
Third the level of fixed as well as current depends upon expected sales, but it is only current assets, which can be adjusted with sales fluctuation in short run.
There is an unavoidable need to manage working capital efficiently. Hence it forms an important function of finance manager, working capital management.
Requirement much of the finance managers time. Represent a sizable proportion of companys total investment in assets. Determine at a glance, the liquidity and solvency position of the company to outside creditors.
CLASSIFICATION OR KINDS OF WORKING CAPITAL
Kinds of working capital
On the basis concept
On the basis of time
Gross working capital or Temporary
Networking capital
Permanent or fixed working

or Fluctuating or Variable working capital
On the basis of Concept

Gross working capital
In border sense the term working capital refers to the gross working capital and represents the amount of funds in current assets. Thus gross working capital is the capital invested in total current assets of the enterprise. Thus GWC = Total of current assets.
NET WORKING CAPITAL

In narrow sense, the term working capital refers to the net working capital. Net working capital is the excess of current assets over current liabilities. Thus NWC = Current assets - Current liabilities. To conclude it may be said that both gross and net concept of working capital may be suitable only for proprietary from of organizations such as sold trade or partnership firms. But gross concept is suitable to the company from of organization where there is a divorce between ownership, management and control.
On the basis of time

Permanent or Fixed working capital
Permanent or fixed working capital is the minimum amount which is required to ensured effective utilization of fixed facilities and for maintaining the circulation of current assets for example a firm as to maintain a minimum level of raw materials, work in-process, finished goods and cash balances, this can further classified in to Regular working capital Reserve working capital
Regular fixed working capital required to ensure circulation of current assets from cash to inventories to receivables and from receivables to cash and so on. Reserve fixed working capital is the excess amount over the requirement for regular working capital, which may be provided for contingencies that may arise at unstated periods such as strikes, rise in prices, depression etc.
Amount of Working capital Fixed Temporary
Time Fig 1: Permanent working capital is stable or fixed over time. While temporary of variable working capital fluctuates.
Temporary or Variable working capital

Temporary working capital is the amount working capital, which is required to meet the seasonal demand and some special exigencies, this can classified as Seasonal working capital Special working capital
The capital required to meet to seasonal needs of the enterprise is called seasonal working capital.
Seasonal working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing campaigns foe conducting research etc.
Amount of Working capital Fixed Temporary
Time
Fig: 2 FIG 2: Temporary working capital is also increasing with passage of time due to expansion of business but even it doesnt fluctuate as variable working capital with some time increases and some time increases & decreases
Objectives of working capital

The need of working capital cannot be over emphasized. Every business needs some amount of working capital arises due to the time gap between production and realizations of cash from sales. Following are some of the objects
For the purpose of raw materials, components, spares etc. To pay wages and salaries. To incur day-to-day expenses and over head costs such as fuel, power and office expenses etc. To meet the selling costs as packing, advertisement etc. To maintain the inventories of raw materials, works-in-progress, stores and finished stocks. The amount needed as well in a new concern depends primarily upon its size and the ambitions of its promoters, greater the size of the business unto, generally larger will be the requirements of working capital the amount of working capital goes on increasing with the growth and expansion of business still it attains maturity.
Issues in working capital management

Working capital management refers to the administration of all aspects of current assets, namely cash, marketable securities, debtors and stock and current liabilities. The financial manager must determine levels and composition of current assets. He must see the right sources aspects of working capital are The working capital management require much of the financial managers time. Investment working capital represents a log portion of the total investment in assets. Critically working capital represents a large portion of the total investment in assets. Growth the need for working capital is directly related to the firms growth. Financial manager have to spend much of their time to the daily internal operations, relating to current assets and current liabilities of the firm. As the larger portion of financial managers time is
devoted to working capital problems, it is necessary to manage working capital in the best possible way to get the maximum benefits. Investment in current assets represents a very significant potion of total of the investment in assets. So financial manager should pay special attention to the management of current assets on a continuing basis. Action should be taken to curtail unnecessary investment in current assets. Working capital management is critical for all firms, but particularly for small firms. Further, the role of current liabilities and current assets is for more significant incase of small firms, as unlike for large firm, they face difficulties in rising ling-term finances. There is direct relationship between a firms growth and its working capital need. The financial manager should be aware such needs and finance them quickly. Continuous growth in sales may require additional investment in fixed assets.
Determinants of working capital

It may thus be concluded that all precautions should taken fir effective and efficient management of working capital.A large number of factors, each having a different importance, influence working capital needs of firms. Also, the importance of factors changes for a firm over time. Therefore, an analysis of relevant should be made in order to determine total investment in working capital. The following are the factors which generally influence the working capital requirements of the firm. Nature and size of business Manufacturing cycle Business fluctuation Production policy Availability of credit Growth and expansion activities

Profit margin and profit appropriation Operating efficiency Price level changes
Sources of working capital

The sources of working capital may be said to fall in four categories Trade credit Bank credit Current provision of non-bank short term borrowings Long terms sources comparing equity capital and long-term borrowing
They can also be classified as follows.

1. Internal Sources a) Retained earnings b) Depreciation 2. External Sources a) Share b) Loans c) Trade creditors d) Debenture e) Deposits from public
Need for working capital

The need for working capital to run day-to-day activities cannot be over emphasized. Firm should aim at maximizing the wealth of its share holders.
A firm should earn sufficient return from its operation. Earnings a study amount of profit require successful sales activity. The firms have to invest enough funds in current assets for generating sales.
There is always an Operating cycle, involved in the convert ion of sales into of sales into cash. By doing the study on WORKING CAPITAL. We know the liquidity position of the firm.
To know the efficiency of company in utilizing the WORKING CAPITAL in business. It is useful to organization to take steps towards managing of WORKING CAPITAL if need be.
Operating Cycle
Operating cycle is the time duration required to convert sales, after the conversion of resources into inventories into cash. The operating cycle of a manufacturing company involves three phases. Acquisition of resources such as raw material, labor, power and fuel etc. Manufacturing of the product which include conversion of raw material into work-inprogress into finished goods. Sales of the product either cash or credit. Credit sales create account receivable collection. The firm is required to invest in current assets for smooth, uninterrupted functioning. It needs to maintain liquidity to purchase raw materials and pay expenses such as wages, salaries and other manufacturing, administrating and selling expenses as there is hardly a matching between cash inflows and outflows. Stocks of raw material and work-in-progress are kept to ensure smooth production and to guard against non-availability of raw material and other
components. The firm holds stock of finished goods to meet the demands of customers on continuous basis and sudden demand from some customer. The length of the operating cycle of manufacturing firm is the sum of 1) Inventory conversion period (ICP) 2) Debtors conversion period (DCP) Inventory conversion period is the total time needed for producing and selling the product. The debtors conversion period is the time required to collect the outstanding amount from the customer. The total of ICP and DCP is referred to as the gross operating cycle (GOC). i.e. GOC = ICP + DCP
A firm acquired resources on credit and all temporary postpones payment of the creation expenses. The payable deferral period (PDP) is the length of time the firm is able to defer payment on various resources purchased. The differences between GROSS OPERATING CYCLE and PAYABLE
DEFERALE PERIOD IS NET WORKING CAPITAL.

GOC PDP = NWC In other words it refers to the sales after the conversion of cash into raw material, raw material into work-in-progress, work-in-progress into finished goods, finished goods into receivable and finally from receivable into cash. This may be diagrammatically explained as in the figure given below. The operating cycle can be measured as follows: RMCP Raw material conversion period WIPCP work-in-progress conversion period FGP Finished goods conversion period SDCP Sundry debtors conversion period SCCP Sundry creditors conversion period
Operating cycle = RMCP + WIPCP + FGCP + SDCP SCPP
Purchases
Payment
Credit Sale
Collection
RMCP+WIPCP+FGCP Inventory Conversion Period Period Receivable Conversion
Payables Cycle
Net Operating
Gross Operating Cycle
Material conversion period (RMCP)
Raw material inventory * 360 Raw material conversion
Work-in-progress conversion period (WIPCP) =
Work-in-progress inventory * 360 Cost of products
Finished goods conversion period (FGCP )
Finished goods inventory * 360 Cost of goods soled Debtors * 360
V.C.R INSTITUTE OF MANAGEMENT STUDIES Credit Page sales37 at

cost

Debtors conversion period (DCP) =
Creditors *
Payable deferral period (PDP)
360 Credit
OPERATING CYCLE
purchases
OPERATING CYCLE = RMCP + WIPCP + FGCP + SDCP SCPP
RMCP Raw material conversion period WIPCP work-in-progress conversion period FGP Finished goods conversion period SDCP Sundry debtors conversion period SCCP Sundry creditors conversion period
WORKING CAPITAL CYCLE/OPERATING CYCLE
cash
Debtors & Receivables
Raw materials
Finished goods
Work-in progress
Analysis of working capital

Overall review
The goal of working capital of management is to manage firms of current assets and current liabilities in such a way that a satisfactory level of working capital is maintained. This is so because if the firm cannot maintain a satisfactory level it will be forced into bankruptcy. The current assets should be large enough to cover its current liabilities in order to ensure a
reasonable margin of safety. Each of current assets must manages efficiently in order to maintain the illiquidity of the firm, whiled not keeping too high level of any one of them. The interaction between assets and current liabilities is, therefore the main theme of working managements.
Accessing working capital requirement

Working capital management is the life blood and controlling never center of a business. No business can successfully run without an adequate amount of working capital. To avoid the storage of working capital at a once, an estimate of working capital requirements should be made in advance so that arrangements can be made procure adequate working capital but estimation of working capital requirements is not an easy and large factors how to be have to be taken into consideration while an estimate of working capital requirements: Total cost incurred on material wage overheads. The length of time for which raw material is to remain in stores before they are issued for production. The length of production cycle of work-in-progress is the time taken for conversion for production. The length of sale cycle during which finished goods is too kept waiting for sales. The average period of credit allowed customers. The amount of cash required to pay day-to-day expense of the business. The average of each cash required making advance payment, if any The average credit period expected to be allowed by suppliers.
Time lag in the payment of wages and other expenses. From the total amount blocked in current assets estimated on the basic of the first even item given above the total of current liabilities that is the last two items is deducted to find out the requirement of working capital in order to provide for contingencies, some extra amount generally calculated as a fixed percentage of working capital can be aided as margin of study.
Operational definitions of the concepts A. WORKING CAPITAL: working capital may be regarded as that proportion of a
firms total capital, which is employed in financing its day-to-day operations. It is the amount of funds, which affirm holds, in the form of current assents to meet its current liabilities.
B.
NET WORKING CAPITAL (NWC): net working capital is the difference between
current assets and current liabilities.
C. GROSS WORKING CAPITAL (GWC): gross working capital refers to the

firms total investment in current assets.
D. CURRENT ASSETS: current assets are those assets which can be converted in to
diminution in value of or disrupting operational cycle. They include cash, shortterm securities debtors, bill receivable and stock (inventory).
E. CURRENT LIABILITIES: current liabilities are those claims of outsides that are
expected to mature for payment within an accounting year they include creditors, bills payable and out standing expenses that are the short-term sources.
F. CASH: cash is the money the firm can disburse immediately without any
restriction. It includes coins, currency, cheque held by the firm and balance in bank
accounts. Some times mare cash items such as marketable securities or bank time deposits are also included in cash. The basic characteristics of near cash assets are that they readily convertible into cash.
G. RECEIVABLES: A firm may grant credit to project its sales from the competitors
and to attract potential customers to buy its products at favorable terms. When the firm sells its products services on trade credit, it creates receivable which the firm is expects to collect in near future.
H. INVENTORIES: Inventory refers to stock of goods or products of the company. It

may be in the form of raw material, work-in-progress and finished goods.
DATA ANALYSIS & INTERPRETATION

STATEMENT OF CHANGES IN WORKING CAPITAL 2006-2007
PARTICALERS
As on 31-32006
As on 31-32007
Increase in capital
Decrease in capital
CURRENT ASSETS: INVENTORIES SUNDRY DETORS CASH &BANK BALANCE LOAN & ADVANCE
175447569 8068939 2214356 74538394
303238111 8256619 2907579 89584621
12779542 187680 693223 15045227
TOTAL CURRENT LIABILITIES: LIABILITIES TOTAL WORKING CAPITAL DECREASE IN WORKING CAPITAL TOTAL
260268258 113584355 113584355 146684903
403986930 362236043 362236043 41750887 104934016
104934016 143716672
248651688 104935016 -
146684903
146684903
143716672
Source: completed from annual reports of KBD sugars LTD
Interpretation: The working capital decreased from 104934016 by comparing 2006 and
2007. In this year the company has not in a good level of net working capital providing the extremely not good liquidity position of the firm.
PARTICALERS CURRENT ASSETS: INVENTORIES SUNDRY DETORS CASH &BANK BALANCE LOAN & ADVANCE TOTAL CURRENT LIABILITIES:
31-03-2007
31-03-2008
INCREASE in capital 72438781 160143 2159732 61379882 -
DECREASE in capital -
303238111 8256619 2907579 89584621 403986930
375676892 8416762 5067311 150964503 540125469

LIABILITIES 362236043 362236043 41750887 31230935
467143647 467143647 72981812 -
104907604 31230935
TOTAL
WORKING CAPITAL
INCREASE IN WORKING CAPITAL

TOTAL
72981822
72981822
136138538
136138538
Source: completed from annual reports of KBD sugars LTD Interpretation: The working capital decreased from 31230935 by comparing 2007 and 2008. In this year the company has fairly a good level of net working capital providing the extremely good liquidity position of the firm.
PARTICALERS CURRENT ASSETS: INVENTORIES SUNDRY DETORS CASH &BANK BALANCE LOAN & ADVANCE TOTAL CURRENT LIABILITIES: LIABILITIES
AS ON 31-3-2008
AS O N 31-3-2009
Increase in capital
Decrease in capital
375676892 8416762 5067311 150964503 540125469 467143647 467143647 72981821 -
156306246 7348982 8755709 145766518 318177455 257973323 257973323 60204132 12777690
3688398 -
219370646 1067780 5197985
209170324
TOTAL
WORKING CAPITAL
DECREASE IN WORKING CAPITAL

TOTAL
12777690
72981821
72981822
225636411
225636411
Interpretation: The working capital decreased from 12777690 by comparing 2008 and 2009. In this year the company has fairly a good level of net working capital providing the extremely good liquidity position of the firm.
Increase
Decrease in capital
Particulars Assets Current Assets Inventary Sunry Detors Cash and Bank Balances Loand and Advances Total(1) Liabilities Current Liabilities Total(2) working Capital Increase in Working Capital Total
31-3-2009
31-3-2010
in capital
156306246 7348982 8755709 145766518 318177455 257973323 257973323 60204132 31121884 91326016
136429420 8062874 3903005 145443323 293838622 202512606 202512606 91326016
19876826 713892 4852704 323195
55460717
91326016
56174609
31121884 56174609
Interpretation The working capital increased from 31121884 by comparing 2008 and 2009. In this year the company has fairly a good level of net working capital providing the extremely good liquidity position of the firm.
OVERALL CHANGES IN WORKING CPAITAL STATEMENT Year 2006-2007 2007-2008 Increase 31230934
Decrease 104934016 -

2008-2009 2009-2010
31121884
12777689 -
DATA ANALYSIS & INTERPRETATION

CURRENT RATIO
Current Ratio=Current Assets/Current Liabilities
TABLE
-I
Year 2005-06 2006-07 2007-08 2008-09 2009-10
current Assets 260269258 403986930 540125469 318177455 293838622
Current Liabilities 113584355 362236043 467143647 257973323 202512606
Liquid Ratio 2.29 1.11 1.15 1.23 1.45
Source: Annual Publication reports of KBD Sugars.

INTERPRETATION
During the period 2005-06 the current ratio of the company was 2.29 which is quite high compared to the ideal ratio. In the next two periods, there has been a marginal fall of current ratios 1.11, 1.15, 1.23 & 1.45 during 2006-07, 2007-2008, 2008-2009 & 2009-2010 which indicates the depletion of working capital condition of the company.
LIQUID RATIO
Liquid Ratio=Liquid Assets/Current Liabilities TABLE - II
Year 2005-06 2006-07 2007-08
Liquid Assets 84821689 100748819 164448577
Current Liabilities 113584355 362236043
Liquid Ratio 0.74 0.27
467143647 0.35

2008-09 2009-10 161871209 157409202
257973323 0.62 202512606 0.77
Source: Annual Publication reports of KBD Sugars & distilleries ltd.
INTERPRETATION
During the period 2005-06 the liquid ratio of the company was 1.74:1 and 2006-07 the liquid of the company 0.27:1 and 2007-08 it was 0.35:1 and shows a decreasing trend and during the period 2007-08 the ratio was 0.62:1. And 2009-10 it was 0.77.
WORKING CAPITAL TURNOVER RATIO Working capital Turnover Ratio=Net Sales/Working Capital TABLE III

Year Net Sales
Current Liabilities
Working capital Turnover Ratio 1.54 7.67 6.10 6.68 3.33
2005-06 2006-07 2007-08 2008-09 2009-10
225910943 320594420 445877236 402189924 304828634
146684904 41750887 72981822 60204132 91326016
Source: Annual Publication reports of SVSIL
INTERPRETAION During the year 2005-06 the working capital ratio is 1.54 and during the period the following period 2006-07, 2007-08, 2008-09, 2009-10 are 7.67, 6.10, 6.68, 3.33 times. Which indicates in the year 2008-09 the working capital was very effectively utilized in sales of firm, But in the current year the ratio has been decreased.
FINDINGS
Operating of the KBD sugar and industries Ltd. indicates their operating profile increasing year after year except in period 2005-2007 where the profit declaims marginally. Other income not only income from investment but also sales of weight wastage those arouse during the production.
We may observe from the movement of account receivable that table share of debtors in total assets have decline since 2006-07 and 2007-08 this is also reviles that KBD sugar and industries Ltd. as done will in the management of account receivables.
Generally inventory holding is the largest of all current assets. In the period 2005-06 to 2008-09 current assets comparison , 68.61, 48.75, 67.41, 75.06 and 69.55 inventory. But in the year 2008-09 is 69.55 thus we can say that KBD sugars and industries Ltd. managing there inventory receivable reasonably some what better position.
Movement of account payable show an increasing trend. This indicates company is able to generate credit liberal terms and generate revenue yet other cost.
Weighted operating cycle analysis helps in estimating the amount of funds that are required for the various stages of cycles it is a method of estimating working capital requirement WOC for KBD sugars and industries Ltd. the year 2006-07 was only 29.53 of the year 2005-06.
The current ratio represents a margin of safety for creditors the higher the current ratio the greater the margin of safety. The larger amount of current asset in relation to current liabilities, the more firms ability to meet its current obligations. KBD sugars and industries Ltd. current ratios shows a satisfactory level in order all the years, the standard is being maintained that of 2:1. The debit equity ratio of KBD sugars and industries Ltd. is high in the initial years. This led to borrowings of find on very restrictive terms. But over the course of time they paid back its debit to bring the ratio under favorable conditions.
PAT and PBT were declining.
The Gross profit performance of the company indicates that a significant proportion of sales revenue is available to the company in the form of gross profit. Consequently the net profit performance of the company is not on par with gross profit ratio. It indicates lack of control over indirect expenses of the business.
The inventory holdings period can also shown a good performance because early realized as a finished good. The practice of working capital management is some what satisfactory, though not of up to the mark because there was decrease in working capital during the year 2005-06 to 2006-07 and 2007-08 in the current financial year the investment in the current liabilities declaimed, as an effect the net working capital was decreases in 2008-09 and 2009-010. This is due to high investment in inventories and finished goods and has been maintaining low cash balances.
SUGGESTIONS
The company must try to maintain an optimum level of inventory and develop this strategy for investing excess cash balances.
The company should improve the profits by reducing indirect expenses.
KBD sugars and industries Ltd. should develop an optimum credit policy.
KBD sugars and industries Ltd. determine maximum rate of cash discount they can give to the customers.
KBD sugars and industries Ltd. by changing the credit period can see the effect on their profitability.
CONCLUSION
1) The current ratio of KBD SUGARS & DISTILLERS is very low for last three years. 2) Capital amount is blocked in the inventory sugar of longer period partially due to policies of government and partially associated with tender quotations. 3) Cash to net working capital ratio is decreasing year to year. 4) Quick ratio of the KBD SUGRS & DISTILLERS is continually decreasing 5) The debtors turnover ratio indicates the rate of which cash is generated by turnover of debtors the debtors turn over ratio 2005-06 to2009-10are increased The high value of DTR was more efficient in management of credit. Therefore we conclude that there is being good debtors turnover ratio maintained by KBD Sugars. 6. The net working capital is decreased year to year in KBD SUGARS & DISTILLERS 7.Working capital turnover is changing from year to year. Hence, networking capital is not used efficiently.
KBD SUGARS & DISTILLERIES LIMITED SUGAR DIVISION BLANCE SHEET AS ON 31ST MARCH-2006 DESCRIPTION
SCH TOTAL TOTAL

I.SOURCE S OF FUNDS 1.SHARE HOLDERS FUNDS SHARE CAPITAL 2.RESERVES AND SURPLUS 3.LOAN FUNDS SECURESD LOANS UN SECURED LOANS 4.DIFFERED TAX LIABILITY II.APPLICATIO OF FUNDS 1.FIXED ASSETS GROSS BLOCK LESS: DEPRESATION NET BIOCK CAPITAL WORK IN- PROGRESS 2.CURRENT ASSETS, LOANS AND ADVANCES INVENTORIES SUNDRY DEBTORS CASH AND BANK BALANCE LOAN AND ADVANCES LESS:CURRENT LIABLITIES 3:DIFFERED TAX ASSETS 4:MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTER) MERGER/DEMERGER EXPENS PROFIT AND LOSS ACCOUNT
A B C
13084120 262823490 177589768 134789487 85017925 --------------------673304880 --------------------554213081 254948931 299234150 9096115 175447596 8068939 2214356 74538394 ---------------260269258 113584355 ----------------
308330265
E F G H I
146684904 0 489704 217800007
673304879
KBD SUGARS & DISTILLERIES LIMITED SUGAR DIVISION PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH2006
DESCRIPTION INCOME SALES AND OTHER INCOME INCREASE/DECREASE IN STOCKS
SCH K L
TOTAL 225910943 322344 93221682 319454969
EXPENDITURE CONSUMPTION OF RAMATERIAL MANUFACTURING EXPENSES SALARIES, WAGES & OTHER BENEFITS INTEREST AND FINANCIAL CHARGES DUTIES & TAXES ADMINISTRATION EXPENSES PRELIMINARY AND SHARE ISSUE EXP.WRITTEN OFF DEPRECIATION
M N O P
254504145 19303448 22324127 5268419 0 8218789 0 23697999 333316927 -13861958 0 -13861958 0 0 0 -13861958 203938049 203938049 0.58
LOSS FOR THE YEAR PRIOR PERIOD ITEMS NET PROFIT/LOSS FOR THE YEAR LESS:PROVISIONS FOR TAXATION FRINGE BNENEFIT TAX DEFERRED TAX ASSET NET PROFIT/LOSS AFTER TAX LOSS BROUGHT FORWARD FROM PREVIO LOSS CRRIED TO BALANCE SHEET EARNINGS PER SHARE BASIC & DILUTED
KBD SUGARS & DISTILLERIES LIMITED SUGAR DIVISION BLANCE SHEET AS ON 31ST MARCH-2007
DESCRIPTION
I.SOURCE S OF FUNDS 1.SHARE HOLDERS FUNDS
SCH
TOTAL
TOTAL
SHARE CAPITAL 2.RESERVES AND SURPLUS 3.LOAN FUNDS SECURESD LOANS UN SECURED LOANS 4.DIFFERED TAX LIABILITY
II.APPLICATIO OF FUNDS 1.FIXED ASSETS
A B C
0 -20659974 253408846 105914487 0 338663359
D 562808479 278784199 284024280 12520913 E F G H I J 303238111 8256619 2907579 89584621 403986930 362236043 41750887 296545193
GROSS BLOCK LESS: DEPRESATION NET BIOCK CAPITAL WORK INPROGRESS

2.CURRENT ASSETS, LOANS AND ADVANCES
INVENTORIES SUNDRY DEBTORS CASH AND BANK BALANCE LOAN AND ADVANCES LESS:CURRENT LIABLITIES 3:DIFFERED TAX ASSETS
4:MISCELLANEOUS EXPENDITURE
(TO THE EXTENT NOT WRITTEN OFF OR ADJUSTER) MERGER/DEMERGER EXPENS PROFIT AND LOSS ACCOUNT
367278 338663359
DESCRIPTION INCOME SALES AND OTHER INCOME INCREASE/DECREASE IN STOCKS
SCH
TOTAL
K L
320594420 462360 107701016
428757796
EXPENDITURE CONSUMPTION OF RAMATERIAL MANUFACTURING EXPENSES SALARIES, WAGES & OTHER BENEFITS INTEREST AND FINANCIAL CHARGES DUTIES & TAXES ADMINISTRATION EXPENSES PRELIMINARY AND SHARE ISSUE EXP.WRITTEN OFF DEPRECIATION
M N O P
303164832 40364585 23375833 19326073 29444670 9936508 0 23805268 449417770
PROFIT/LOSS FOR THE YEAR PRIOR PERIOD ITEMS NET PROFIT/LOSS FOR THE YEAR DEFERRED TAX ASSET LOSS BROUGHT FORWARD FROM PREVIOUS YEAR
(20659974) 0 (20659974) 0 0 0
LOSS CARRIED TO BALANCE SHEET 20659974
DESCRIPTION I.SOURCE S OF FUNDS 1.SHARE HOLDERS FUNDS SHARE CAPITAL 2.RESERVES AND SURPLUS 3.LOAN FUNDS SECURESD LOANS UN SECURED LOANS 4.DIFFERED TAX LIABILITY II.APPLICATIO OF FUNDS 1.FIXED ASSETS GROSS BLOCK LESS: DEPRESATION NET BIOCK CAPITAL WORK IN- PROGRESS 2.CURRENT ASSETS, LOANS AND ADVANCES INVENTORIES SUNDRY DEBTORS CASH AND BANK BALANCE LOAN AND ADVANCES LESS:CURRENT LIABLITIES J 3:DIFFERED TAX ASSETS 4:MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTER) MERGER/DEMERGER EXPENS PROFIT AND LOSS ACCOUNT SCH A B C TOTAL TOTAL 0 -78641650 365142945 68289487 0 D 580496620 303241696 277254924 4309183 281564107 354790781
E F G H I
375676892 8416762 5067311 150964503 540125469 467143647
72981822
244852
354790781
KBD SUGARS & DISTILLERIES LIMITED SUGAR DIVISION PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31SMARCH2008
DESCRIPTION INCOME SALES AND OTHER INCOME INCREASE/DECREASE IN STOCKS EXPENDITURE CONSUMPTION OF RAMATERIAL MANUFACTURING EXPENSES SALARIES, WAGES & OTHER BENEFITS INTEREST AND FINANCIAL CHARGES DUTIES & TAXES ADMINISTRATION EXPENSES PRELIMINARY AND SHARE ISSUE EXP.WRITTEN OFF DEPRECIATION LOSS FOR THE YEAR PRIOR PERIOD ITEMS NET PROFIT/LOSS FOR THE YEAR LESS:PROVISIONS FOR TAXATION FRINGE BNENEFIT TAX DEFERRED TAX ASSET NET PROFIT/LOSS AFTER TAX LOSS BROUGHT FORWARD FROM PREVIUS YEAR LOSS CARRIED TO BALANCE SHEET
SC H K L
TOTAL
446392044 74444167 520836212
M N O P Q
391436510 57824840 31625273 36973820 48400517 8759405 0 24457497 599477862 -78641650 0 -78641650 0 0 0 -78641650 78641650

DESCRIPTION I.SOURCE S OF FUNDS 1.SHARE HOLDERS FUNDS SHARE CAPITAL 2.RESERVES AND SURPLUS 3.LOAN FUNDS SECURESD LOANS UN SECURED LOANS 4.DIFFERED TAX LIABILITY II.APPLICATIO OF FUNDS 1.FIXED ASSETS GROSS BLOCK LESS: DEPRESATION NET BIOCK CAPITAL WORK IN- PROGRESS 2.CURRENT ASSETS, LOANS AND ADVANCES INVENTORIES SUNDRY DEBTORS CASH AND BANK BALANCE LOAN AND ADVANCES LESS:CURRENT LIABLITIES j 3:DIFFERED TAX ASSETS 4:MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTER) MERGER/DEMERGER EXPENS PROFIT AND LOSS ACCOUNT SCH
TOTAL
TOTAL
A B C
0 -51120343 292832366 110248323 0 615531243 328924963 286606280 5027508 156306246 7348982 8755709 145766518 318177455 257973323 291633788 351960346
E F G H I
60204132
122426 351960346
DESCRIPTION INCOME SALES K LESS:EXCISE DUTY 407989582 27168636 380820947 26118647 -217914213 189025381 SCH TOTAL
OTHER INCOME INCREASE/DECREASE IN STOCKS
EXPENDITURE CONSUMPTION OF RAMATERIAL MANUFACTURING EXPENSES SALARIES, WAGES & OTHER BENEFITS INTEREST AND FINANCIAL CHARGES ADMINISTRATION EXPENSES DEPRECIATION
M N O P Q
103459245 36451713 30698199 34970673 8882627 25683267 240145724
PROFIT/LOSS FOR THE YEAR PRIOR PERIOD ITEMS NET PROFIT/LOSS FOT THE YEAR DEFERRED TAX ASSET LOSS BROUGHT FORWARD FROM PREVIO LOSS CARRIED TO BALANCE SHEET
(51120343) 0 (51120343) 0 0
51120343
DESCRIPTION I.SOURCE S OF FUNDS 1.SHARE HOLDERS FUNDS SHARE CAPITAL 2.RESERVES AND SURPLUS 3.LOAN FUNDS SECURESD LOANS UN SECURED LOANS 4.DIFFERED TAX LIABILITY II.APPLICATIO OF FUNDS 1.FIXED ASSETS GROSS BLOCK LESS: DEPRESATION NET BIOCK CAPITAL WORK IN- PROGRESS 2.CURRENT ASSETS, LOANS AND ADVANCES INVENTORIES SUNDRY DEBTORS CASH AND BANK BALANCE LOAN AND ADVANCES LESS:CURRENT LIABLITIES 3:DIFFERED TAX ASSETS 4:MISCELLANEOUS EXPENDITURE (TO THE EXTENT NOT WRITTEN OFF OR ADJUSTER) MERGER/DEMERGER EXPENS PROFIT AND LOSS ACCOUNT SCH TOTAL TOTAL
A B C
0 -34795778 299428725 111248323 0 375881270
D 616421505 353969816 262451689 22103565 284555254
E F G H I j
136429420 8062874 3903005 145443323 293838622 202512606 91326016
375881270
DESCRIPTION INCOME SALES K LESS:EXCISE DUTY 318263738 13435104 304828634 SCH TOTAL
OTHER INCOME INCREASE/DECREASE IN STOCKS L
3845530 -17942981 290731183
EXPENDITURE CONSUMPTION OF RAMATERIAL MANUFACTURING EXPENSES SALARIES, WAGES & OTHER BENEFITS INTEREST AND FINANCIAL CHARGES ADMINISTRATION EXPENSES DEPRECIATION M N O P Q 210010065 21751958 31254899 26616808 9286666 26606565 325526961 PROFIT/LOSS FOR THE YEAR PRIOR PERIOD ITEMS NET PROFIT/LOSS FOT THE YEAR DEFERRED TAX ASSET LOSS BROUGHT FORWARD FROM PREVIO LOSS CARRIED TO BALANCE SHEET (34795778) 0 (34795778) 0 0
34795778
BIBILOGRAPHY
AUTHOR I.M .PANDEY,
TITLE FINANCIAL MANAGEMENT,
PUBLISHIG PLACE VIKAS PUBLISHING. HOUSE PRIVATE LIMITED
M.Y.KHAN & P.K. JAIN,
FINANCIAL MANAGEMENT
TATA McGraw HILL PUBLISHING COMPANY, LIMITED .
PRASANNA CHANDRA,
FINANCIAL MANAGEMENT,
TATA McGraw HILL PUBLISHING COMPANY LIMITED . HIMALAYA PUBLISHING LIMITED
JAWAHRALAL
FINANCIAL MANAGEMENT
Website: www.workingcapitalindia.com www.kbdsugars.com www.wikipedia.com

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WORKING CAPITAL MANAGEMENT LTD

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 1

WORKING CAPITAL MANAGEMENT LTD

Scope of Finance Management

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 2

WORKING CAPITAL MANAGEMENT LTD

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 3

WORKING CAPITAL MANAGEMENT LTD

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 4

WORKING CAPITAL MANAGEMENT LTD

WORKING CAPITAL CYCLE

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 5

WORKING CAPITAL MANAGEMENT LTD

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 6

WORKING CAPITAL MANAGEMENT LTD

CONCEPT OF WORKING CAPITAL

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 7

WORKING CAPITAL MANAGEMENT LTD

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 8

WORKING CAPITAL MANAGEMENT LTD

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 9

WORKING CAPITAL MANAGEMENT LTD

The list of Co-operative Sugar factories in A.P.

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 10

WORKING CAPITAL MANAGEMENT LTD

Sugar production in states

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 11

WORKING CAPITAL MANAGEMENT LTD

NAME Location and Address

:KBD SUGARS AND DISTILLERIES LTD, : MUDIPAPANAPALLI, (village) SUGALIMITTA POST,

V.C.R INSTITUTE OF MANAGEMENT STUDIES Page 12

WORKING CAPITAL MANAGEMENT LTD

PUNGANUR MANDAL 517247, CHITTOOR DIST., A.P.

BRIEF HISTORY ABOUT THE COMPANY:

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MAIN OBJECTS OF THE COMPANY

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PRESENT BOARD OF DIRECTORS

NAME SRI D.K AUDIKESAVULU

DESIGNATION CHAIRMAN DIRECTOR AND MANAGING

SRI K.M SRINIVASULU

SRI T.J. INDRA PRAKASH

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WORKING CAPITAL MANAGEMENT LTD

RESEARCH AND DEVELOPMENT

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OBJECTIVES OF THE STUDY

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SCOPE OF THE STUDY

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WORKING CAPITAL MANAGEMENT LTD

IMPORTANCE OF THE STUDY