INTRODUCTION The receivables represent a claim of the firm against its customer which is expected to be realised in near future

.Its concludes Sundry debtors and bills receivables and constitutes a significant portion of working capital. It is created when firm sell goods or services to its customers not on cash but on credit. Thus receivables are a type of loan granted by the seller to the buyer to facilitate the service of buying and selling. It is a service provided by the seller to the buyer without the motive of earning profit on it. Sundry debtor management may be defined as collection of steps and procedures required to properly weight costs and benefits with credit policy. It consists of matching the cost of increasing sales (particularly credit sales) with the benefits arising out of this increased sale with the objective of maximising the return on investment of the firms. The basic objective s of management of Sundry debtors is to optimize the return on investment on this asset. In the words of Balton, the objectives of management of Sundry debtor is to promote sales and profits until that point is reached where the
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return on investment in further funding of debtors is less than the cost of fund raised to finance that additional credit. The Basic decision to be taken regarding sundry debtors is to decide how much credit is to be extended to a customer and on what terms and conditions. This is credit policy. Credit policy is defined as the set a parameters and principles that govern the extension of credit to the customers.

OBJECTIVE OF THE STUDY To make an analysis of credit pattern of the organisation To make control over receivables To prepare ageing schedule for a controlling measures To give suggestions for most economic pattern of

receivables

LIMITATIONS OF THE STUDY The inexperience makes the study less precise than professionals. The tools used for analysis are limited. In depth analysis could not be done due to time constraint. It is very difficult to predict the price movement of security because of market risk is associated with it.

REVIEW OF LITERATURE The receivables represent a claim of the firm against its customer which is expected to be realised in near future .Its concludes Sundry debtors and bills receivables and constitutes a significant portion of working capital. It is created when firm sell goods or services to its customers not on cash but on credit. Thus receivables are a type of loan granted by the seller to the buyer to facilitate the service of buying and selling. It is a service provided by the seller to the buyer without the motive of earning profit on it. Sundry debtor management may be defined as collection of steps and procedures required to properly weight costs and benefits with credit policy. It consists of matching the cost of increasing sales (particularly credit sales) with the benefits arising out of this increased sale with the objective of maximising the return on investment of the firms. The basic objective s of management of Sundry debtors is to optimize the return on investment on this asset. In the words of Balton, the objectives of management of Sundry debtor is to promote sales and profits until that point is reached where the
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return on investment in further funding of debtors is less than the cost of fund raised to finance that additional credit.

Need and Importance of Management of sundry debtor Management of sundry debtor is an important issue and has to be dealt tactfully. The amount blocked in Sundry debtors should be optimum. Neither too large nor too small. If the amount blocked in sundry debtors is large: I. II. III. IV. Working capital requirement will be high Interest charges will be high Bad debts will be large Cost of collection of the debt will be high

If the amount blocked in sundry debtors is small: I. II. Sales will be lower Loss of customers

Thu management of sundry debtors requires effective policies and proper execution of such policies.

Aspect of management of sundry debtors The various aspect of management of sundry debtors is as follows: a) Credit Policy b) Credit Analysis c) Control of receivables. Credit Policy The Basic decision to be taken regarding sundry debtors is to decide how much credit is to be extended to a customer and on what terms and conditions. This is credit policy. Credit policy is defined as the set a parameters and principles that govern the extension of credit to the customers. Objective of credit policy: i. ii. iii. To increase the sales and the market share. To face the market competition. To increase the profit.

Decisions taken under credit policy: i. ii. Credit standard. Credit period.
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iii. iv.

Cash discount. Discount period

Credit Standard: Credit standard are the principles which govern the selection of customers for credit sales. The standard set should be moderate neither too rigorous which may hamper growth of sales not too liniment which may increase the bad debt. The standard set should be such which balances the benefit of additional sales (revenue) against the cost of increasing bad debt (cost) Credit Period: Credit period refers to the length of time. The buyer is allowed to pay for the purchases made. There is no hard and fast rule regarding the credit period and it may differ from customer to customers .Generally the credit period various from 3 to 15 to 60 days. The credit period allowed may be of longer or shorter & duration. A longer credit period will definitely increase the revenue by increasing sales volume. However longer credit period will also lead to blocking of working capital, increase in debt collection cost and also increased bad debt loss. Thus if the revenue earned by increasing the credit period is
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more than the additional cost then the credit period could be elongated otherwise not. The optimum credit period would be where the additional revenue equates the additional cost. Cash Discount: Cash discount are generally offered to the buyers (debtors)to induce them to make prompt payment. Cash discount releases the fund tied up in receivables .Different discount rates are offered for different period e.g.: 5% discount if paid immediately 3% discount if paid within a week 2% discount if paid within a 10 days However every cash discount involves cost. The firm should compare the earning resulting from discount allowed and the cost of discount .In no way should be the cost of discount more than the earning or receivables released by allowing discount

Discount Period: If the management feels that funds tied up with debtors can be further released by extending the credit period it may do so. But it has its pros and cons. Although it may lead to release of funds which the firms believed to be bad debt, yet it may increase the cost of collection by delay of collection. Thus, discount period should be extended keeping in mind to balance the additional revenue earned with the additional cost of collection.

Credit Analysis:

After drawing up the credit policy, a firm has to evaluate the credit worthiness of the individual customers and also the possibility of bad debt. Credit analysis determines the degree of risk associated with, the capacity of the customers to borrow and his ability and willingness to pay. For this firm has to ascertain the credit rating of prospective customers. Credit Rating: Credit Rating is to rate the various debtors to seek credit facility.
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Credit rating implies taking decisions regarding individual debtors as to ascertain the quantum of credit and the credit period. This would further involve: i. ii. Collection of information about the debtors. Decision tree analysis of credit granting.

Collection of information about the debtors: The various sources of information are: 1. Past Records: Past records of existing customers proves to be a valuables source of information to find out the credit risk involved . 2. Sale mans Report: Very often the firms depends and decide the credit worthiness of a customers on the basis of the sales man report .The sales mans ascertain the potential of the customers and reports accordingly. 3. Bank References: Sometimes the banks provide the required information about the customer and decision is taken after analysing such information. 4. Trade References: Information about the customer is also collected from the persons referred by the customers himself .Such persons giving relevant information about the customers are the trade references. 5. Credit Bureau Reports: useful and authentic credit information is also provided by credit bureaus of specific industries.
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6. Published Financial Reports: The Financial reports i.e. balance sheet profit & loss A/c and others when examined can give valuable information about credit worthiness of a customer. 7. List of Government Suppliers: If a customers name appears in the list of government approved supplies in agencies like DGS & D or any other reputed agency is proves the credit worthiness of the customers. 8. Decision tree analysis of credit granting: Once all the credit information about the customers (both existing and prospective)is gathered ,it has to be thoroughly analysed to arrive at a decision relating to: i. ii. Whether or not to grant credit. If credit is to be granted on what terms and conditions. The five C of credit which provides a frame work for evaluating a customer are: a) Character b) Capacity c) Capital d) Collateral e) Condition

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These characteristics throw light on credit worthiness of a customer. Step by step analysis of information may be done as under:
Payment History

Good

No Information

Bad

Accept

Detailed analysis of Risk

Reject

Low

Medium

High

Accept

Credit Agency Information

Reject

Accept

Satisfactory

Doubtful

Reject

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Credit Analysis

Where a customers credit standing is favourable or unfavourable it is easy to accept or reject the customer. Problem arises when customers are marginally credit worthy. In such a situation attempt is made to balance the potential profitability against the potential loss from default. If the relative chances of recovering the dues can be decided it can form a

probability distribution of payment or default.

Controlling measures of receivables

The final stage of management of sundry debtor is to control the receivables means collection of dues from the customers. Once the credit policy has been developed and credit granted accordingly, the next step is to control the receivables. For this a collection policy is formulated. Collection policy: The firm determines the optimum amount that it should spend on collection of debtors, and likewise a collection policy is formulated. This credit policy aims at timely collection of debts which ensures that bad debt losses are reduced to a minimum.

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However it should be kept in mind that collection policy should aim at dues without annoying the customers. A goods & effective collection policy lays down the following: Before debt becoming due: To remind the customer a few days in advance about the due date and the payment. After expiring of due date: I. To request the customer either: a) by telephone or b) Personally or c) Personally visiting the customer II. To take the help of collection agencies if personal requests are not adhered to. III. To take legal action against the customers. Sometimes, the firm charges interest on overdue balances. The rate of interest in such cases should be decided in advance and should be in writing. All these efforts endeavour to speed up the slow paying customers and reduce the possibility of bad debt.

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Monitoring of Receivables

In order to control receivables, the firm should keep regular check on them through an efficient monitoring system. A wash should be kept on the credit policy and the credit worthiness of a customer. A number of measures are available which are as follows: I. II. III. Computation of average age of receivables Ageing schedule Collection programme.

i.

Computation of average age of receivables: Average age of receivable means the average collection period. Such an average priors is calculated by dividing the average receivables by amount of credit sales per day i.e. Average Receivables= Average collection period/credit sales per day Benefits: average collection period gives an idea

(i)

As to how many days credit sales remains uncollected, and

(ii) About the trend of total receivables (ii) Ageing Schedule: The ageing schedule classifies the outstanding

receivables at given point of time into different age groups together with
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percentages of total receivables that fall in each group. For e.g. the receivables of a firms having a normal credit period of 20 days may be classified as follows

Age group (Number of days) Less than 20 days 21-35 days 36-50 days 50 days and above

% of total outstanding receivables 60% 20% 10% 10%

The age group represents the number of days or week the receivable become outstanding .The equally of a receivable can be judged by looking at the age of receivable. The older the receivable the lower the quality and higher the chances of default.

Benefits of ageing schedule: 1. It provides a kind of an early warning proclaiming: (a) Deterioration of equality of receivables. (b) Where to apply the corrective action. 2. It helps an analysing collection policy, procedure etc. By

comparing the present period

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ageing schedule with past period ageing schedule. 3. attention. 4. It helps to recognise increase& slumps in sales (iii) Collection Matrix: The collection matrix presents the pattern It directly points out those customers which require special

of collections associated with credit sales. From the collection pattern a firm can judge whether: (i) The collection is improving or (ii) The collection is stable or (iii) The collection is deteriorating It also helps in projecting the monthly receipts for each collection period.

Cost of maintaining receivables

The following constitutes the cost of maintaining receivables. I. Cost of financing: This includes the cost of interest and the opportunity cost of self owned capital is the case the capital is blocked in sundry debtor for a long period.

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II.

Administrative Cost: These are the costs which are incurred to maintain the record of credit customers both before and after the sales.

III.

Delinquency cost: if there is a delay in payment by a customer additional cost have to be incurred such as cost on reminders. Phone calls, legal notice etc. These costs are termed as delinquency cost.

IV.

Cost of default by customers: These are actually the amount of bad i.e. receivables becoming partly or wholly unrealisable and becoming a cost to the firm.

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INDUSTRY PROFILE Water is the most important necessity for life. The drinking-water needs for individuals vary depending on the climate, physical activity and the body culture. But for average consumers it is estimated to be about two to four litres per day. The growing number of cases of water borne diseases, increasing water pollution, increasing urbanization, increasing scarcity of pure and safe water etc. has made the bottled water business just like other consumer items. Scarcity of potable and wholesome water at railway stations, tourists spots, and role of tourism corp. etc. has also added to the growth. Indians currently spending about $330m a year on bottled water, analysts estimate. The packaged water market constitutes 15 per cent of the overall packaged beverage industry, which has annual sales of at least $2.6bn, Deepak Jolly, a spokesperson for Coca-Cola India said. Almost all the major international and national brands water bottles are available in Indian market right from the malls to railway stations, bus stations, grocery stores and even at panwala's shop. Before few years bottle water. was considered as the rich people's choice, but now it is penetrated even in rural areas. The growth and status of

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Indian Bottled Industry in comparison with Western or Asian market, India is far behind in terms of quantum, infrastructure, professionalism and standards implementation. The per capita consumption of mineral water in India is a mere 0.5-liter compared to 111 liter in Europe and 45liter in USA. Also As per UN study conducted in 122 countries, in connection with water quality, India's number was dismal 120. In comparison to global standards India's bottled water segment is largely unregulated. Former President Dr. A.P.J. Abdul Kalam has urged youngsters on July 17, 2010 to be aware of water conservation techniques to avoid grave water crisis in Future."It is so sad that today, people are forced to buy water in plastic bottles. I am told that bottled water industry is worth nearly 10000 crore rupees and even big companies like the Coke and Pepsi are involved in this bottling of water and making money. So, it is imperative that we ought to save water," he added. Do not be surprise if today's bottles water industry becomes next Oil industry by 2025. Bottled Water Industry in India Water Shortage and Health Awareness Driving Bottled Water Consumption in India. The Indian market is estimated at about Rs 1,000
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Crore and is growing at whopping rate of 40 per cent. By 2010, it will reach Rs 4,000 -5,000 Crore with 33 per cent market for natural mineral water. According to a national-level study, there are more than 200 bottled water brands in India and among them nearly 80 per cent are local brands. In fact, making bottled water is today a cottage industry in the country. Leave alone the metros, where a bottled-water manufacturer can be found even in a one-room shop, in every medium and small city and even some prosperous rural areas there are bottled water

manufacturers. While India ranks in the top 10 largest bottled water consumers in the world, its per capita per annum consumption of bottled water is estimated to be five litres which is comparatively lower than the global average of 24 litres. Today it is one of India's fastest growing industrial sectors. Between 1999 and 2004, the Indian bottled water market grew at a compound annual growth rate (CAGR) of 25 per cent the highest in the world. The total annual bottled water consumption in India had tripled to 5 billion liters in 2004 from 1.5 billion liters in 1999. Global consumption of bottled water was nearing 200 billion liters in 2006.

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COMPANY PROFILE Aiswarya Beverages is a private company incorporated in 2000 with its plant at Thiruvalla in Pathanamthitta District of Kerala. The company was promoted by Aby Mathew, an NRI from UAE. The companys registered office is located at Kerala.The Company bottles and sells natural mineral water under the brand name Classic, sources its water directly from an underground aquifer located about 130 metres below the earth's surface. The company started its commercial production in April 2000. The company now proposes to expand its retail distribution network by appointing consignee and distributors agents in various parts of the country. The companys existing clientele includes 5 Star Hotels, Airlines, Embassies etc, and tie-ups with A category retail outlets, modern retail (malls), multiplexes, hypermarts, fine-dine restaurants are also in the offing. The brand Classic, enjoys an aspirational equity amongst consumers and has the potential of truly becoming an international and iconic brand, it is this potential that the new management proposes to unlock through brand building and enhanced distribution.
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Product range of the company includes: The companys principal activity is to manufacture packaged natural mineral water with in-house facilities to manufacture PET bottles and caps. It markets its products under the brand name Classic natural

mineral water is available in four pack sizes namely,25 ltr, 2 ltr, 1.5 ltr, 1 ltr. Awards/Achievements

The company and the product enjoy the certification of various authorities like HACCP, BIS and ISI in India.

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MCKINSEYS 7S FRAMEWORK According to Mc Kinseys model , a companys strategy is only one of the seven elements in Japanese Management by Richard Pascal and Anthony Athos in 1981. They had been looking at how Japanese industry had been successful , at the same time Tom Peters and Robert Walterman were exploring what made a

company excellent. The 7S model was born at a meeting of the four authors in 1978. .

Figure: Mckinseys 7S Frame Work Model

The above figure show Mckinseys 7S work model. The first three elements Strategies, System and Structure are considered as the

hardware of the business. The next four elements Style, Staff, Skills and
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Shared Values

are called as the Softwares of successes. The interdependent factors which are

McKinseys 7S model involves seven

categorized as either hard or soft elements.

The Mc Kinseys 7S model involves seven interdependent factors which are categorized as either hard or soft elements. The hard elements are Strategy, Structure, and Systems and the soft elements are shared values, Skill, Style and Staff. Hard elements are easier to define or identify and management can directly influence them: These are strategy statements; organization charts and reporting lines; and formal processes and IT systems. Soft elements, on the other hand, can be more difficult to describe, and are less tangible and more influenced by culture. However, these soft elements are as the hard elements if the organization is going to be successful. Therefore it is much more difficult to plan or to influence the characteristics of the soft elements. Although soft factors are below the surface, they can have a great impact of the heard strategies system of the organization.

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Structure Structure is the organizational chart and associated information that shows who reports to whom and how tasks are both divided up and integrated. In other words, structures describe the hierarchy of authority and accountability in an organization, the way the organization's units relate to each other: centralized, functional divisions (top-down); decentralized (the trend in larger organizations); matrix, network, holding, etc. These relationships are frequently diagrammed in Organizational charts. Most organizations use some mix of structures pyramidal, matrix or networked ones - to accomplish their goals. Business need to be organized in a specific form of shape that is generally referred to as organizational structure. Organizations are structured in a variety of ways, dependent on their objectives and culture. The structure of the company often dictates the way it operates and performs. Traditionally the businesses have been structured in a hierarchical way with several divisions and departments, each responsible for a specific task such as human resources management, production or marketing. Many layers of management controlled the operations, with each answerable to the upper layer of management. Although this is still the most widely used organizational structure, the recent trend is increasingly towards a flat structure where the work is
27

done in teams of specialists rather than fixed departments. The idea is to make the organization more flexible and devolve the power by empowering the employees and eliminate the middle management layers. Organizational structure refers to the way that an organization arranges people and jobs so that its work can be performed and its goals can be met. When a work group is very small and face-to-face communication is frequent, formal structure may be unnecessary, but in a larger organization decisions have to be made about the delegation of various tasks. Thus, procedures are established that assign responsibilities for various functions. It is these decisions that determine the organizational structure. In an organization of any size or complexity, employees' responsibilities typically are defined by what they do, who they report to, and for managers, who reports to them. Over time these definitions are assigned to positions in the organization rather than to specific individuals. The relationships among these positions are illustrated graphically in an organizational chart (see Figures 1a and 1b). The best organizational structure for any organization depends on many factors including the work it does; its size in terms of employees, revenue, and the geographic dispersion of its facilities; and the range of its businesses (the degree to which it is diversified across markets).

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There are multiple structural variations that organizations can take on, but there are a few basic principles that apply and a small number of common patterns. The following sections explain these patterns and provide the historical context from which some of them arose. The first section addresses organizational structure in the twentieth century. The second section provides additional details of traditional, verticallyarranged organizational structures. This is followed by descriptions of several alternate organizational structures including those arranged by product, function, and geographical or product markets. Next is a discussion of combination structures, or matrix organizations. The discussion concludes by addressing emerging and potential future organizational structures. Strategy Strategy includes purpose, mission, objectives, goals and policies. According to Peter Ducker Strategic management is not a box of an action Plan based on the actual or probable plans of others tricks or a bundle of techniques. It is analytical thinking and commitment of

resources to action. An action Plan based on the actual or probable plans of others. The set of decisions and actions that result in the formulation and implementation of plans designed to achieve a companys objectives.

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Strategic intent is the leveraging of a firms internal resources, capabilities and core competencies to accomplish the firms vision, mission and objectives in a competitive environment. Characteristics of Strategic Decisions require large amounts of the firms resources often affect the firms long-term prosperity, usually have multifunctional or multi-business consequences, Require considering the firms external environment. Strategy is the plan of action an organization prepares in response to, or anticipation of, changes in its external environment. It deals with essentially three questions. Where the organization is at this moment in time, where the organization wants to be in a particular length of time, How to get there. To recognize the responsibilities as corporate senior citizens to faster progress , to promote general welfare of the society, to provide an environment to the staff to grow and advance to prosperity and thus provide a sense of belonging . We will exceed customer expectations through reliable product with timely delivery , cost effective solution with an added assurance of prompt service. All company got different strategy. The authors describe strategy as the plan or course of action in allocating resources to achieve identified goals over time. Aiswarya Beverages mission is to We will exceed customer expectations through reliable product, on time delivery,
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cost effective solution with an added assurance of prompt service. The quality policy of Aiswarya Beverages is to have a set of satisfied internal customers, business associates, and society through excellence in quality products and services and also to achieve safe working conditions and Eco friendly environment through continuous improvement in the technology and man power skills. Its strategy is to be committed to the state of the technology, environmental protection, and safely to operations, social commitment and employee relations. Systems System in the 7-S frame work referred to on the all the rules, regulations and procedures both formal and internal that compliments the organization structure in other words, it is the equaling of the term infrastructure often changes in strategy implemented with some changes in system rather than in organizations structure. System refers to the rules and procedures- both formal and informal. System complements the organizational structure. They are similar to the term infrastructure used in the earlier section. The daily activities and procedures that staff members engage in to get the job done. System includes procedure, planning and control systems, costing and capital budgeting, recruitment, training and development, planning

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and budgeting, and performance evolution.

Formal and informal

procedures that support the strategy and structure (systems are more powerful than they are given credit). These processes are normally strictly followed and are designed to achieve maximum effectiveness. Increasingly, the organizations are simplifying and modernizing their process by innovation and use of new technology to make the decisionmaking process quicker. According to Wikipedia system is a set of detailed methods, procedures, and routines established or formulated to carry out a specific activity, perform a duty, or solve a problem. Manic bag have its own system in the organization by giving online test drive option for the local customers. Company follows a particular process for recruitment that is by inviting application form for the job. These processes are normally strictly followed and are designed to achieve maximum effectiveness. Increasingly, the organizations are simplifying and modernizing their process by innovation and use of new technology to make the decisionmaking process quicker. Systems define the flow of activities involved in the daily operation of business, including its core processes and its support systems. They refer to the procedures, processes and routines that are used to manage the organization and characterize how important work is to be done.

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The procedures, processes and routines that characterize how the work should be done: financial systems; recruiting, promotion and performance appraisal systems; information systems. The flow of activities involved in the daily operation of a business including its core process and its support systems. In Aiswarya Beverages, there is a formal flow of communication in two ways i.e., a top level to bottom level and bottom to top. Style/ Culture Style is one of the seven levels for manager can use to bring about organization change. The style of an organization, according to the McKinsey framework, becomes evident though the patterns of actions taken by member of the top management team over a period of time. The McKinsey framework considers Style as more than the style of top management. "Style" refers to the cultural style of the organization, how key managers behave in achieving the organization's goals, how managers collectively spend their time and attention, and how they use symbolic behavior. How management acts is more important that what management says. Culture remains an important consideration in the implementation of any strategy in the organization. the culture of the organization, consisting of two components they are organizational
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culture and management styles. style is a way in which something is said, done, expressed, or performed. How the managers in organizations use style to bring about change all organizations have their own distinct culture and management style. It includes the dominant values, beliefs and norms which develop over time and become relatively enduring features of the organizational life. It entails the way managers interact

with the employees and the way they spend their time. The businesses have traditionally been influenced by the military style of management and culture where strict adherence to the upper management and procedures was expected from the lower rank employees. However, there have been extensive efforts in the past couple of decades to change to culture to a more open, innovative and friendly environment with fewer hierarchies and smaller chain of command. An instrument used by the ancient I writing on tablets covered with wax, having one of its ends sharp, and the other blunt, and somewhat expanded, for the purpose of making erasures by smoothing the wax. Organizational reporting relationship conveys the style. In Aiswarya Beverages Managers spend time interacting with various employees in various departments and the participation of workers in management is considered vital. Workers are represented by their trade union for the purpose of healthy negotiation with management
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and women employees are equal opportunity to be part to management through women welfare association. Skill "Skills" refer to the dominant distinctive capabilities and

competencies of the personnel or of the organization as a whole. Skill are one of the most crucial attributes or capabilities or strength of an organization. The term skill includes those characteristics or distinctive competence which most people use to describe a company. Staff includes the people/human resource management - processes used to develop managers, specialization processes, way of shaping basic values of management cadre, ways of introducing young recruits to the company, ways of helping to manage the careers of employees. Organizations are made up of humans and its the people who make the real difference to the success of the organization in the increasingly knowledge based society. Skills refer to the fact that, employees have the skills needed to carry out the company strategies. Skills of the employees are improved by giving necessary training to them. Different organization has different set of skilled employees depending on the nature of business carried. The workers in production department are skilled in all technical aspect of production process. Informal working environment created in the

35

organization is a means of bring out the hidden talents and initiative of workers. Skills refer to crucial attributes or capabilities of an organization. They are used to describe that which is found most in the organization. Skills are developed over a period of time and are a result of the interactions of number of factors. These factors could be personal, top management, structure, system, etc. Hence when a strategic decision is too made. It is necessary to build new skills. A skill refers to the fact that employees have the skills needed to carry out the firms strategies. Skill full employees are the asset of any organization. Skills of employees may be giving necessary training to them. Aiswarya Beverages has combination of skilled as well as the unskilled labors. Managers like production, quality manager, accounts manager are highly skilled in the area of their discipline. Accounting and financial manager is knowledgeable regarding taxes, duties,

transportation charges etc. Overall the employees are skilled and both on the job and off the job is provided as per the requirements.

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Staff People are main asset of the organization. Organization performance is mainly depends upon individuals performances who are working in the organization. So Staffing plays important role by employ right person in right job. Staffing is the process of acquiring human resources for the organization and assuring that they have the potential to contribute to the achievements of the organizations goals. "Staff" refers to the number and types of personnel within the organization and how companies develop employees and shape basic values. Brawn and Moberly define staffing as This implies that it includes two fundamentally different processes. Staffs includes the people/human resource management processes used to develop managers, socialization processes, and way of shaping basic values of management cadre, ways of introducing young recruits to the company, ways of helping to manage the careers of employees. Organizations are made up of humans and it's the people who make the real difference to the success of the organization in the increasingly knowledge-based society. The importance of human resources has thus got the central position in the strategy of the organization, away from the traditional model of capital and land. It is also important for the organization to
37

instill confidence among the employees about their future in the organization and future career growth as an incentive for hard work. All leading organizations put emphasis on hiring the best staff, providing them with rigorous training and mentoring support, and pushing their staff to limits in achieving professional excellence, and this forms the basis of these organizations strategy and competitive advantage over their competitors. It is also important for the organization to instill confidence among the employees about their future in the organization and future career growth as an incentive for hard work organizations are made up of humans and it is the people who make the real difference to the success of the organization in the increasingly knowledge-based society. Staff are the human resources working in an organization they are responsible for carrying out various activities of the organization effectively and efficiently. They are responsible for carrying out various activities of the firm effectively and efficiently. In Aiswarya Beverages 547 staff members are working in the firm. In that 32 managerial, 147 are executives, 103 are operators, 1 engineering trainee, 6 Diploma trainee, 218 are technical , 39 are apprentice trainees , 1 for temporary staff. They are very flexible, dynamic and energetic and always willing to adapt to changes and align towards the strategic goal of the company.

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Shared Values Shared values the centre case of the framework give raise to a certain spirit among organizational members regarding who we are and where we are headed the spirit permeating in the organization in term is reflected in the values, attitudes and philosophy it its members the corporate values define the ideas and belief which guide the organizational operation they lay down the foundation of the organization management philosophy and give raise to a particular culture. The super-coordinated goal is analogous to the organizations purpose. It is a set of values and aspirations going beyond the formal statement of corporate objectives. They can be considered as fundamental ideas around which a business is built. Hence, they represent the main values of the organization. They can also provide the broad notions of future direction. The organizations with low values and common goals often find their employees following their own personal goals that may be different or even in conflict with those of the organization or their fellow colleagues. Under these goals of the company, vision and mission are specified to the employees. This may be to make money or to achieve excellence in a particular field. These values and common goals keep the

39

employees working towards a common destination as a coherent team and are important to keep the team spirit alive. Shared values are commonly held beliefs, mindsets, and assumptions that shape how an organization behaves its corporate culture. Shared values are what engender trust. They are an interconnecting center of the 7Ss model. Values are the identity by which a company is known throughout its business areas, what the organization stands for and what it believes in, it central beliefs and attitudes. These values must be explicitly stated as both corporate objectives and individual values. At Aiswarya Beverages each individual department have specific goals and objectives within the broad framework of its Vision and Mission. They act as the framework for achievement of organization objectives and goals efficiently and effectively. They are also bound to follow policies and procedures governed by the state government. All members of the organization share some common fundamental ideas or guiding concepts around which the business is built. It must be simple, usually stated at abstract level, have great meaning inside the organization even though outsiders may not see or understand them.

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RESEARCH METHODOLOGY
1. TITLE OF THE STUDY

Credit Policy
2. PERIOD OF THE STUDY The period of study started from 2007 to 2011. 3. OBJECTIVE OF THE STUDY

To make an analysis of credit pattern of the organisation To make control over receivables To prepare ageing schedule for a controlling measures To give suggestions for most economic pattern of

receivables 4. SCOPE OF THE STUDY The study tries to analyses the financial position of the company. The study provides some suggestions and recommendation for the further improvement of the financial position LIMITATIONS OF THE STUDY The inexperience makes the study less precise than professionals. The tools used for analysis are limited. In depth analysis could not be done due to time constraint. It is very difficult to predict the price movement of security because of market risk is associated with it.
41

6. DATA COLLECTION Data place a very important role in any research program. Source of data are of two types, Primary and Secondary. The data is used in the study were collected from the published annual report of relevant period of the company. The major source is secondary as mentioned. Secondary data have been collected from different records of the company, standing rules, annual reports, web sites and various other publications, Reference from books, periodicals and newspapers have also been extensively used. 7. ANALYTICAL TOOLS I Computation of average age of receivables II Ageing schedule III Collection programme

42

DATA ANALYSIS AND INTERPRETATION

PROPOSED CREDIT POLICY OF THE COMPANY Proposal 1 Present factor Sales Credit Period Proposal = Around 70 Lakhs =25 days =Increasing credit period and increasing sales

Present variable cost =70% sale Fixed Cost =800000 per annum

Expected per tax ratio investment 30%

Total days in a year

=360

43

Table 1 Table showing the proposal

Proposal Policy I II III IV

Credit Average collection Expected period(days) 30 40 50 60

annual

Sales(Rs in lakhs) 75 80 85 90

44

Table 2 Table showing evaluation of proposed credit policy at present level

Present Particulars 25 days ( RS in lakhs)

(A) Average collection period (days) 70 (B) Variable cost (70% of A) (C) Contribution (A-B) (D) Fixed Cost (E) Profit (C-D) (F) increase in profit compare to present profit (G) Required return on additional investment (H) Incremental profit(F-G) 49 21 8 13

Interpretation At present the company make a profit of 13 lakhs

45

Table 3 Table showing evaluation of proposed credit policy at 30 days Particulars 30 days ( RS in lakhs) (A) Average collection period (B) Variable cost(70% of A) (C) Contribution (A-B) (D) Fixed Cost (E) Profit (C-D) (F) increase in profit compare to present profit (G) Required return on additional 0.32 1.18 1.50 75 52.50 22.50 8 14.50

investment (H) Incremental profit(F-G)

Interpretation With the collection period of 30 days it earn a profit of 11.50 lakhs and increase in profit compared to present level is 1.50 lakhs and Incremental profit at 1.18 lakh

46

Table 4 Table showing evaluation of proposed credit policy at 40 days

Particulars

40 days( RS in lakhs)

(A) Average collection period (B) Variable cost(70% of A) (C) Contribution (A-B) (D) Fixed Cost (E) Profit (C-D) (F) increase in profit compare to present profit (G) Required return on additional investment (H) Incremental profit(F-G) Interpretation

80 56 24 8 16

1.5

0.63 0.87

With the collection period of 40 days it earn a profit of 13 lakhs and increase in profit compared to present level is 1.5 lakhs and Incremental profit at 0.87 lakh.

47

Table 5 Table showing evaluation of proposed credit policy at 50 days

Particulars

50 days (RS in lakhs)

(A) Average collection period (B) Variable cost(70% of A) (C) Contribution (A-B) (D) Fixed Cost (E) Profit (C-D) (F) increase in profit compare to present profit (G) Required investment (H) Incremental profit(F-G) return on additional

85 59.50 25.50 8 17.50

1.50

0.68 0.82

Interpretation With the collection period of 50 days it earn a profit of 17.50 lakhs and increase in profit compared to present level is 1.50 lakhs and Incremental profit at 0.82 lakh.

48

Table 6 Table showing evaluation of proposed credit policy at 60 days Particulars 60days (Rs in lakhs) (A) Average collection period (B) Variable cost(70% of A) (C) Contribution (A-B) (D Fixed Cost (E) Profit (C-D) (F) increase in profit compare to present profit (G) Required investment (H) Incremental profit(F-G) return on additional 0.74 0.76 1.50 90 63 27 8 19

Interpretation With the collection period of 60 days it earn a profit of 19 lakhs and increase in profit compared to present level is 1.50 lakhs and Incremental profit at 0.76 lakhs

49

Table 7 Table showing evaluation of proposed credit policy at a glance (Rs in lakhs) Particulars Present 25 days (A) Average 70 75 80 85 90 I 30 days II 40 days III 50 days IV 60 days

collection period (B) Variable

cost(70% of A) (C) Contribution (A-B) (D) Fixed Cost

49

52.50

56

59.50

63

21 8

22.50 8 14.50

24 8 16

25.50 8 17.50

27 8 19

(E) Profit (C-D) 13 (F) increase in profit compare to profit (G) return additional investment (H) Incremental 1.18 0.87 0.82 0.86 0.32 0.63 0.68 0.74 Required on present 1.50 1.50 1.50 1.50

profit(F-G) Interpretation

With collection period of 30 days as it yield a maximum profit to the company .So the company should adopt credit policy I proposal.
50

Table 8 Table showing investment debtors at 25 days

Particulars

Present 20 days ( Rs in lakhs)

(A) Variable Cost (B) Fixes cost

49 8

(C) Investment in debtor (A+B)

57

Interpretation With 25 days collection period investment debtors is 57 lakhs

51

Table 9 Table showing investment debtors at 30 days

Particulars (A) Variable Cost (B) Fixes cost

30 days ( Rs in lakhs) 52.50 8

(C) Investment in debtor (A+B)

60.50

Interpretation With 30 days collection period investment debtors is 60.50 lakhs

52

Table 10 Table showing investment debtors at 40 days

Particulars

40 days ( Rs in lakhs)

(A) Variable Cost (B) Fixes cost

56 8

(C) Investment in debtor (A+B)

64

Interpretation With 40 days collection period investment debtors is 64 lakhs

53

Table 11 Table showing investment debtors at 50 days

Particulars (A) Variable Cost (B) Fixes cost

50 days ( Rs in lakhs) 59.50 8

(C) Investment in debtor (A+B) Interpretation

67.50

With 50 days collection period investment debtors is 67.50 lakhs

Table 12 Table showing investment debtors at 60 days Particulars (A) Variable Cost (B) Fixes cost 60 days ( Rs in lakhs) 63 8

(C) Investment in debtor (A+B) Interpretation

71

With 60 days collection period investment debtors is 71 lakhs

54

Table 13 Table showing investment in debtor at a glance

Particulars

Present 25 days

30 days

40 days

50 days

60 days

(A) Cost

Variable 49

52.50

56

59.50

63

(B) Fixes cost

(C) Investment 57 in debtor (A+B)

60.50

64

67.50

71

55

Table 14 Table showing debtors turnover at 20 days

Particulars (A)Total days in a year (B)Average collection period (C)Debtors turn over(A/B) 360 days 25

Present 20 days

14.4 days

Interpretation With 20 days collection period debtors turnover is 14.4 days

Table 15 Table showing debtors turnover at 30 days Particulars (A) Total days in a year (B) Average collection period (C) Debtors turn over(A/B) 360 days 30 12 days 30 days

Interpretation With 30 days collection period debtors turnover is 12 days

56

Table 16 Table showing debtors turnover at 40 days

Particulars (A)Total days in a year (B) Average collection period (C) Debtors turn over(A/B)

40 days 360 days 40 9 days

Interpretation With 40 days collection period debtors turnover is 9 days

Table 17 Table showing debtors turnover at 50 days

Particulars (A)Total days in a year (B) Average collection period (C) Debtors turn over(A/B) 360 days 50 7.2 days

50 days

Interpretation With 50 days collection period debtors turnover is 7.2 days

57

Table 18 Table showing debtors turnover at 60 days Particulars (A)Total days in a year (B) Average collection period (C) Debtors turn over(A/B) 360 days 60 6 days 60 days

Interpretation With 60 days collection period debtors turnover is 6 days

58

Table 19 Table showing debtors turnover at a glance Particulars Present 20 days (A)Total days in a year (B)Average 25 collection period (C) Debtors turn over(A/B) 14.4 days 12 days 9 days 7.2 days 6 days 30 40 50 60 360 days 360 days 360 days 360 days 360 days 30 days 40 days 50 days 60 days

59

Table 20 Table showing average investment in debtors at 20 days

Particulars (A)Investment debtor (B) Debtor turnover (C)Additional debtor investment 57 14.4 in 3.17

Present 25 days

Interpretation With 25 days average investment in debtors is 3.95 days Table 21 Table showing average investment in debtors at 30 days Particulars (A)Investment debtor (B) Debtor turnover (C)Additional investment in debtor 60.50 12 5 30 days

Interpretation With 30 days average investment in debtors is 5 days

60

Table 22 Table showing average investment in debtors at 40 days Particulars (A)Investment debtor (B) Debtor turnover (C)Additional investment in debtor ] Interpretation With 40 days average investment in debtors is 7.11 days 64 9 7.11 40 days

Table 23 Table showing average investment in debtors at 50 days Particulars (A)Investment debtor (B) Debtor turnover (C)Additional debtor investment 67.50 7.20 in 9.38 50 days

Interpretation With 50 days average investment in debtors is 9.38 days

61

Table 24 Table showing average investment in debtors at 60 days

Particulars (A)Investment debtor (B) Debtor turnover (C)Additional investment in debtor 71 6 11.83

60 days

Interpretation With 60 days average investment in debtors is 11.83 days

62

Table 25 Table showing Average investment in debtor at glance. Particulars Present 25 days (A)Investment 57 debtor (B) Debtor 14.4 12 9 7.20 6 60.50 64 67.50 71 30 days 40 days 50 days 60 days

turnover (C)Additional 3.95 investment in debtor 5 7.11 9.38 11.83

63

Table 26 Table showing additional investment in debtor comparing present level

Credit Period

Average in debtor

investment Additional investment in debtor compared to present level

Present 20 days

3.95

30 days

1.05

40 days

7.11

2.11

50 days

9.38

2.27

60 days

11.83

2.45

Interpretation Additional investment in debtor comparing to present level 30 days is 1.05, 40 days is 2.11, 50 days is 2.27, and 60 days is 2.45.

64

Table 27 Table showing return on additional investment @ 25% at a glance

Particulars

Present 20 days

II

III

IV

30 days 40 days

50 days 60 days

(A)Additional investment in debtor compared to present level 1.05 30% 2.11 30% 2.27 30% 2.45 30%

(B) Return on 30% addional investment (C) Retired on

Return addional investment

0.32

0.63

0.68

0.74

65

AGEING SCHEDULE

AGEING SCHEDULE OF THE COMPANY IN CURRENT YEAR OF LAST TWO MONTHS Age group (in weeks) 3 weeks 3 to 5 weeks 5 to 7 weeks Above 7weeks % of outstanding receivable 60% 20% 10% 10% Highly qualified Qualified Bad Default 10% 20% 30% 40% Quality % of default

The total receivables during the last two month is Rs 60000

66

TABLE SHOWING AGEING SCHEDULE OF CURRENT YEAR Age group in weeks 3 weeks 3 to 5 weeks 5 to 7 weeks Above 7weeks Total Outstanding receivable 36000 12000 6000 6000 60000 Highly qualified Qualified Bad Default 3600 2400 1800 2400 10200 Quality % of default

Interpretation The Ageing Schedule show that out of Rs 60000 in debtor defaulted amount comes to Rs 10200 i.e. the percentage of default is 17%

67

AGEING SCHEDULE OF THE COMPANY IN PREVIOUS YEAR OF LAST TWO MONTHS Age group (in weeks) 3 weeks 3 to 5 weeks 5 to 7 weeks Above 7weeks % of outstanding receivable 40% 30% 20% 10% Highly qualified Qualified Bad Default 5% 30% 25% 50% Quality % of default

Total debtor last 2 months 80000

68

TABLE SHOWING AGEING SCHEDULE OF PREVIOUS YEAR OF LAST TWO MONTH Age group (in weeks) 3 weeks 3 to 5 weeks 5 to 7 weeks More than week Total outstanding receivable 32000 24000 16000 8000 80000 Highly qualified Qualified Bad Defaulted 1600 4800 4000 4000 14400 Quality % of default

Interpretation The Ageing Schedule show that out of Rs 80000 in debtor defaulted amount comes to Rs 14400 i.e. the percentage of default is 18% By the companies the Ageing Schedule of last Two years it is clear that % of default in current year is reduce at 1%.That mean s performance in collecting debtor is increased. To maintain this situation more control is exercised in receivables

69

FINDINGS
At present the company make a profit of 13 lakh

With collection period of 30 days as it yield a maximum profit to the company .So the company should adopt credit policy I proposal With the collection period of 40 days it earn a profit of 13 lakhs and increase in profit compared to present level is 1.5 lakhs and Incremental profit at 0.87 lakh.

With the collection period of 50 days it earn a profit of 17.50 lakhs and increase in profit compared to present level is 1.50 lakhs and Incremental profit at 0.82 lakh.

With the collection period of 60 days it earn a profit of 19 lakhs and increase in profit compared to present level is 1.50 lakhs and Incremental profit at 0.76 lakhs With the collection period of 30 days it earn a profit of 11.50 lakhs and increase in profit compared to present level is 1.50 lakhs and Incremental profit at 1.18 lakh With 25 days collection period investment debtors is 57 lakhs

With 30 days collection period investment debtors is 60.50 lakhs

With 40 days collection period investment debtors is 64 lakhs

70

 With 60 days collection period investment debtors is 71 lakhs With 30 days collection period debtors turnover is 12 days With 50 days collection period debtors turnover is 7.2 days With 60 days collection period debtors turnover is 6 days With 30 days average investment in debtors is 5 days With 50 days average investment in debtors is 9.38 days With 60 days average investment in debtors is 11.83 days Additional investment in debtor comparing to present level 30 days is 1.05, 40 days is 2.11, 50 days is 2.27, and 60 days is 2.45.

71

SUGGESTIONS
By analysing different proposed credit policies with collection period of 30 days as it yield a maximum profit to the company .So the company should adopt credit policy I proposal. At present situation the financial position of the company is safe so all steps are taken for maintain the same. Internal auditor is appointed for checking the credit policy of the concern. Proper feedback exercised towards the debtors.

72

CONCLUSION
AISWARYA BEVERAAGES is a manufacturing firm. During this study the researcher analysed the different credit policies of the company and give a suitable suggestion that which credit policy is adopted by the company. We also give information for preparing the ageing schedule of the company for improving the collection pattern of the company. The instruction provide by me is followed by the company. I hope that better improvement is made in collection pattern of the company and they can reduce their defaulting receivables.

73

BIBLIOGRAPHY

BOOKS: Financial Management, K.C. Kapoor, L.R. Maheshwari, Reliance Publication 13th Edition. Financial Accounting, K.G.C. Nair Chandh, Publication 9th Edition. Management Accounting, Khan and Jain, Tata Mc Grow Hill, 3rd Edition. Research Methodology, C.R. Kothari, 2nd Edition, New Age International (P) Ltd.,

REPORT: Annual Report of SD pharmacy, from the financial year 2007 to 2011. WEBSITES: www.receviblemanagement .com

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APPENDIX
BALANCE SHEET AS ON 31-03-2011 A in 0000

SOURCE OF FUNDS Capital Reserves Net worth Secured loans Un secured loans Total Debt Total Liabilities APPLICATION OF FUNDS Gross Block (Less Accum Depreciation) Net Block Capital Work In progress Investments Inventories Sundry Debtors Cash and Bank Balances Total Current Assets Loans and Advances Fixed deposits Total CA, Loans & Advances (Current Liabilities) (Provision) (Total CL & Provision) Net Current Assets Total Assets 273.20 65.62 207.48 19.02 78.49 66.30 103.50 25.39 195.19 89.73 252.73 537.65 70.43 55.74 126.17 411.48 716.47 8.06 644.67 652.73 63.56 0.17 63.63 716.46

75

BALANCE SHEET AS ON 31-03-2010 A in 0000

SOURCE OF FUNDS Capital Reserves Net worth Secured loans Un secured loans Total Debt Total Liabilities APPLICATION OF FUNDS Gross Block (Less Accum Depreciation) Net Block Capital Work In progress Investments Inventories Sundry Debtors Cash and Bank Balances Total Current Assets Loans and Advances Fixed deposits Total CA, Loans & Advances (Current Liabilities) (Provision) (Total CL & Provision) Net Current Assets Total Assets 251.55 53.55 198.10 3.46 17.98 66.46 69.65 29.24 165.35 55.73 91.94 313.02 87.72 45.74 133.46 179.56 399.10 7.29 391.66 398.92 0.00 0.17 0.17 399.09

76

BALANCE SHEET AS ON 31-03-2009 A in 0000

SOURCE OF FUNDS Capital Reserves Net worth Secured loans Un secured loans Total Debt Total Liabilities APPLICATION OF FUNDS Gross Block (Less Accum Depreciation) Net Block Capital Work In progress Investments Inventories Sundry Debtors Cash and Bank Balances Total Current Assets Loans and Advances Fixed deposits Total CA, Loans & Advances (Current Liabilities) (Provision) (Total CL & Provision) Net Current Assets Total Assets 228.27 43.16 185.11 6.11 17.26 42.87 42.39 20.64 105.90 37.16 79.54 222.60 53.56 25.01 78.57 144.03 352.51 7.26 345.06 352.32 0.00 0.17 0.17 352.49

77

BALANCE SHEET AS ON 31-03-2008 A in 0000

SOURCE OF FUNDS Capital Reserves Net worth Secured loans Un secured loans Total Debt Total Liabilities APPLICATION OF FUNDS Gross Block (Less Accum Depreciation) Net Block Capital Work In progress Investments Inventories Sundry Debtors Cash and Bank Balances Total Current Assets Loans and Advances Fixed deposits Total CA, Loans & Advances (Current Liabilities) (Provision) (Total CL & Provision) Net Current Assets Total Assets 217.91 36.50 181.40 9.07 2.31 42.46 25.33 10.60 78.39 41.33 84.85 204.57 45.92 22.07 67.99 136.58 329.37 7.26 321.94 329.20 0.00 0.17 0.17 329.37

78

BALANCE SHEET AS ON 31-03-2007 A in 0000

SOURCE OF FUNDS Capital Reserves Net worth Secured loans Un secured loans Total Debt Total Liabilities APPLICATION OF FUNDS Gross Block (Less Accum Depreciation) Net Block Capital Work In progress Investments Inventories Sundry Debtors Cash and Bank Balances Total Current Assets Loans and Advances Fixed deposits Total CA, Loans & Advances (Current Liabilities) (Provision) (Total CL & Provision) Net Current Assets Total Assets 135.29 29.70 105.59 57.30 1.74 39.65 40.74 13.41 93.88 22.35 63.29 179.52 45.18 5.02 50.24 129.32 293.95 7.26 286.51 293.77 0.0 0.17 0.17 293.95

79

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2011 A in 0000

INCOME Sales Other Income Stock Adjustments Total Income EXPENDITURE Raw Materials Power And Fuel Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Profit Before tax Extra Ordinary items PBT (Post Extra Ord Items) Tax Reported Net profit 309.99 14.39 74.79 0.58 143.63 17.50 560.88 79.87 101.00 0.41 100.59 10.79 89.80 5.09 94.89 15.62 80.27 645.68 21.13 (4.93) 661.88

80

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2010 A in 0000

INCOME Sales Other Income Stock Adjustments Total Income EXPENDITURE Raw Materials Power And Fuel Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Profit Before tax Extra Ordinary items PBT (Post Extra Ord Items) Tax Reported Net profit 332.34 11.76 68.31 0.48 110.74 15.08 538.71 94.36 111.48 0.61 110.87 10.46 100.41 0.84 101.25 21.20 80.05 614.81 17.12 18.26 650.19

81

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2009 A in 0000

INCOME Sales Other Income Stock Adjustments Total Income EXPENDITURE Raw Materials Power And Fuel Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Profit Before tax Extra Ordinary items PBT (Post Extra Ord Items) Tax Reported Net profit 196.39 8.14 43.41 0.66 62.99 9.53 321.12 50.48 57.76 0.37 57.39 6.81 50.58 (0.77) 49.81 9.70 40.11 373.19 7.28 (1.59) 378.88

82

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2008 A in 0000

INCOME Sales Other Income Stock Adjustments Total Income EXPENDITURE Raw Materials Power And Fuel Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Profit Before tax Extra Ordinary items PBT (Post Extra Ord Items) Tax Reported Net profit 190.70 8.61 47.91 2.07 62.97 10.60 322.86 63.91 76.06 0.68 75.38 7.41 67.97 (0.35) 67.62 15.21 52.41 381.43 12.15 5.34 398.92

83

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31-03-2007 A in 0000

INCOME Sales Other Income Stock Adjustments Total Income EXPENDITURE Raw Materials Power And Fuel Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Profit Before tax Extra Ordinary items PBT (Post Extra Ord Items) Tax Reported Net profit 197.02 6.43 40.75 3.62 121.41 10.53 379.76 57.06 64.81 0.18 64.63 6.17 58.46 0.52 58.98 7.37 51.61 423.08 7.75 13.74 444.57

84