Professional Documents
Culture Documents
LIMITATIONS
The analysis made on the basis of secondary data.
The availability of date is only is pertaining to five years.
It is a major constraint for this project.
The project duration i.e. 45 days is also a constraint to give realistic
interpretations.
This analysis has done based on the information provided by the bank. If any
mistakes published in this reports, the same information has taken into
consideration.
This project is not a basis for further research.
INDUSTRY PROFILE
HISTORY OF INDIAN CEMENT INDUSTRY
industry in varying areas, which will make it global. With liberalization policies of Indian
Government.
The industry is posed for a high growth rates in nineties and the installed capacity
is expected to cross 100 million tonnes and production 90 million tonnes by 2003 AD.
The industry has fabulous scope for exporting its product to countries like the U.S.A.,
U.K, Bangladesh, Nepal and other several countries. But there are not enough wagons to
transport cement for shipment.
Cement The product:
The natural cement is obtained by burning and crushing the stones containing
clayey, carbonate of lime and stone amount of carbonate of magnesia. The natural cement
is brown in color and its best variety is known as ROMAN CEMENT. It sets very
quickly after addition of water. It was in the eighteenth century that the most important
advances in the development of cement were which finally led to the invention of
Portland cement.
In 1756, John Smeaton showed that hydraulic lime which can resist the action of
water can be obtained nit only from hard lime stone but from a limestone which contain
substantial proportion of clayey. In 1796, Joseph Parker found that modules of
argillaceous limestone made excellent hydraulic cement when burned in the usual
manner. After burning the product was reduced to a powder, this started the natural
cement industry.
The artificial cement is obtained by burning at a very high temperature a mixture
of calcareous and argillaceous material. The mixture of ingredients should be intimate
and they should be in correct proportion. The calcined product is known as clinker. A
small quantity of gypsum is added to clinker and it is then pulverized into very fine
powder, which is known as cement.
Percent
62
Range
62-67
Silica(SiO2)
22
17-25
Alumina(Al2O3)
3-8
3-4
3-4
Magnesia(MgO)
1-3
Sulphur (S)
1-3
Alkalies
0.2-1
51 Nos
Cement plant
99Nos
Installed Capacity
64.8mt
Rs.10,000 Crores
Total Manpower
chose Ramco to confer the Award for Best efforts of an Industrial Unit in the year 1994
as well as in1998. Ramco also has to its credit the National Award (Shri S.R. Rangta
Award for Social Awareness) for the year 1995- 1996, for the Best Rural Development
Efforts made for Best Workers Welfare Ramco got the first Prize for Mine Environment
and pollution Control for year 1999 too, for the 3rd year in succession in July, 2001
Ramco annexed the Vana Mithra Award from the Government of Andhra Pradesh.
Quality conscious and progressive in its outlook, RAMCO CEMENT is an
OHSAS 08001 Company and also joined the select brand of ISO9001-2000 Companies.
History
The first unit was installed at Basanthnagar with a capacity of 2.5 lacks TPA
(tonnes per annum) incorporating humble supervision, preheated system, during the year
1969.
The second unit followed suit with added a capacity of 2 lack TPA in 1971.
The plant was further expanded to 9 lack by adding 2.5 lack tonnes in August,
1978, 1.13 lack tonnes in January, 1981 and .87 lack tonnes in September, 1981.
Power
A Singareni colliery makes the supply of coal for this industry and the power was
obtained form AP TRANSCO. The power demand for the factory is about 21MW. Ramco
has got 2 diesel generator sets of 4MW each installed in the year 1987.
Ramco cement now has a 15KW captive power plant to facilitate for uninterrupted
power supply for manufactured of cement.
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COMPANY PROFILE
The Ramco Cements Limited (Formerly Madras Cements Ltd): In the 1950s,
investment in Cement Industry was not attractive due to price controls and the massive
investments required. Only those entrepreneurs who were not profit-minded but cared for
the country's development came forward to invest in the Cement Industry.
When Shri. Manubai Shah, Central Minister for Industries in late fifties came to Madras
to meet the Industrialists, he called upon Shri P A C Ramasamy Raja and requested him
to start a cement factory in TN. This was readily accepted by Shri PACR and this marked
the birth of The Ramco Cements Limited (Formerly Madras Cements Ltd) in 1961.
Concern for Investors: On the night of September 3, 1962, while the whole city slept,
PAC Ramasamy Raja lay on his bed in the Madras General Hospital, seriously ill. As all
his near and dear watched with tears in their eyes, PAC Ramasamy Raja summoned his
son Ramasubrahmaneya Rajha to his bedside. "There is no more hope", he whispered,
"You should take care of everything from now. My main concern is for The Ramco
Cements Limited (Formerly Madras Cements Ltd).
I have taken a lot of money as shares from well-wishers and I have not paid them
back any dividends as yet. This has to be taken care of immediately". Those were his last
words.
PACR's Dream Come True: PACR's last wish was dutifully fulfilled by the present
Chairman Shri.P.R.Ramasubrahmaneya Rajah. Today, The Ramco Cements Limited
(Formerly Madras Cements Ltd) is not only one of the most respected cement companies
in the country but also leads in giving the best return to the investors. With a cement
capacity of 15.5 millions tons per annum, the company is the fifth largest producer of
cement in India. It is also one of the largest wind energy producers in the country with a
capacity of 159.185 MW.
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Birth of Cement Plants: The first plant of RCL at Ramasamy Raja Nagar, near
Virudhunagar in Tamil Nadu, commenced its production in 1962 with a capacity of 200
tonnes, using wet process. In 70s, the plant switched over to more efficient dry process. A
second kiln was also added to bring the total capacity to 15 lakh tons per annum.
The second venture of RCL is its Jayanthipuram plant near Vijayawada in A.P., set up in
1987. The 36.50 lakh ton per annum plant employs the latest state-of-the-art technology.
The third venture of RCL is at Alathiyur in TN. It was set up in 1997 and expanded by
addition of another line in 2001. The 30.50 lakh tons per annum plant is the most modern
plant in the country.
Ariyalur plant started operations in 2009 with a capacity of 2 MTPA. It is well-equipped
with modern quality control systems.Currently Line 2 of the plant with a capacity of
another 2 MTPA was commissioned in 2012.
Other Ventures: In 2000, RCL acquired Gokul Cements situated in Mathod in
Karnataka whose capacity is 2.90 lakh tons per annum. Being an eco-friendly company,
RCL set up the Ramco Windfarm in 1993 at Muppandal in TN. This was followed by
wind farms in Poolavadi near Coimbatore in 1995, Oothumalai in 2005 and in Mathod the combined capacity of the wind farms is about 159 MW.
In the year 1999, RCL commissioned the most sophisticated Ready Mix Concrete Plant
in Medavakkam in South Chennai. In 2002, a state-of-art Dry Mortar plant was
commissioned near Sriperumpudur, Tamilnadu which manufactures dry mortar, cement
based putty and tile fix compound.
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Management
The Ramco Cements Limited (Formerly Madras Cements Ltd) is managed by a Board of
Directors comprising of eminent personalities as its members. The Chairman of the board
is Shri P.R.Ramasubrahmaneya Rajha, under whose dynamic leadership the company has
grown into a massive organization. The company board brings together a team of
business, administrative, financial and cement technology professionals who provide
guidance and direction to the company's operations in a competitive business
environment. The Ramco Cements Limited (Formerly Madras Cements Ltd) has been a
pioneer in adopting corporate governance practices comparable to the best in the country.
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Our Founder
Birth of a Visionary : On April 24, 1894, when a son was born to Pusapati Chinniah
Raja, there was great jubilation in the family. Chinnaiah Raja believed that the child was
born with the blessings of the Lord of Rameswaram, and named the child Ramasamy
Raja. Little did anyone imagine that the infant was to one day change the face of
Rajapalayam, a panoramic town on the foothills of the Western Ghats in South Tamil
Nadu. Ramasamy Raja, known as PACR, was only 27 years old when his father died and
all the onerous responsibilities of the family were thrust upon his young shoulders.
Businessman turned into Industrialist: Ramasamy Raja was looking for something
more enterprising than the family business. He therefore became an agent for Harvey
Mills of Madurai. This move changed Ramasamy Raja's life. He realized the potential of
his own lands. Instead of sending the cotton to Madurai to be converted into yarn, he
realized that the same could be done in Rajapalayam itself. He concluded that
Rajapalayam, which was otherwise a very backward area with very little job
opportunities, would be vastly benefited by setting up a mill.
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Selfless Service to People: He carried out his responsibilities very efficiently and soon
the people of Rajapalayam put him on a pedestal and respected him for his selfless
service to the people. He was Chairman of Rajapalayam Municipality from 1941 to 1947.
It was he who made Rajapalayam what it is today. Ramasamy Raja wanted to try his hand
at business. He started off with a chain of provision shops and hardware shops. Along
with his nephew, he started a transport corporation with five buses.
Birth of the first Ramco Venture: He visited Britain and other European countries to
see first hand the working of the mills. There, he had the chance to meet many business
magnates. He returned to India full of ideas. After returning to Rajapalayam, he put his
plans into action. To start the yarn mill, he found that he needed Rs.5 lakhs, which in
1936 was a huge sum. It was considered a Herculean task to raise such a big capital. But
the determined Raja was not deterred. He decided to make the people "Shareholders".
Rajapalayam Mills Ltd: Thanks to his illustrious background and his own reputation, he
got the required capital ready, in next to no time. On September 05, 1938, the then State
Minister for Labour, V.V.Giri, inaugurated the mill and Rajapalayam Mills Ltd
commenced operations. There was no looking back for Ramasamy Raja after this. The
Mill was a grand success. He followed this up with other successful ventures. He started
The Ramaraju Surgical Cotton Mills Ltd along with his son-in-law Rama Raju.
The Ramco Cements Limited (Formerly Madras Cements Ltd): At that time, Cement
was not considered as a favorable venture due to price controls. Shri. Manubai Shah,
Central Minister for Industries, called upon Ramasamy Raja and appealed to him to start
a cement factory. This was how The Ramco Cements Limited (Formerly Madras Cements
Ltd) came into being in 1961. Ramasamy Raja needed Rs.1 crore as capital. The State
Government for the first time in the history of India invested Rs.10 lakhs, an indication of
the total trust and implicit faith the Government had in him.
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Concern for Shareholders and Workers: Ramasamy Raja had the well-being of the
people upper-most in his mind. He was very particular that the funds of his shareholders
be utilized usefully. He showed high concern for his workers. The famous trade unionist
G Ramanujam once said, "In the case of Ramasamy Raja's companies, the workers are
always thinking of the growth of the company, the Raja always has the well being of the
workers and their families uppermost in his mind."
Service to humanity: For Ramasamy Raja, religion and charity were part and parcel of
his life. He realized that it was only education which could erase poverty and the pitiable
condition of the people. He formed a trust and started various schools, colleges and
polytechnics which today educate over 7000 students. He also started hospitals for the
benefit of the people.
Realizing the dream of PACR: The Ramco Empire continued to expand under the
leadership of PACR's son, the present Group Chairman, Shri P R Ramasubrahmaneya
Rajha, who is fulfilling the vision of PACR. Crossing the frontiers of Rajapalayam in
PACR's time, the Ramco Group assumed national prominence. With the young guard
now involved in the Group's activities, the process of globalization is on and the Group is
taking the big leap onto the international horizon.
Ramco Concrete
Ramco Concrete - For Structural Concrete Applications:
High performance Concrete based on customers requirements is made in the RMC unit.
Concrete with various permutations based on concrete grades, workability and site
conditions are available.
16
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blocks, solid blocks, paving blocks, fly ash bricks and other precast items. To ensure the
productivity and quality of precast blocks, a separate line meant for manufacturing the
specialized cement has been installed at our plants.
19
Jayanthipuram Plant was also the first in the cement industry to install the online
Continuous Ambient Air Quality Monitoring Station (CAAQM) and to
interlink/upload the online data with the Andhra Pradesh Pollution Control Board
(APPCB) website.
20
21
Assets are classified as: (1) current assets and (2) fixed (long term) assets.
Current assets sometimes called liquid assets are those of a firm which are either
held in the form of cash within the accounting period are of one-year duration. Current
assets include cash, tradable (marketable) securities, and debtors (accounts receivables)
and stock of raw material, work-in process and finished goods.
Fixed assets are long-term in nature; they are held for periods longer than the
accounting period. They include tangible fixed assets like land, building, machinery,
equipment, furniture etc. Intangible fixed assets represent the firms rights and include
patents, copyrights franchises, trademarks, trade names and goodwill.
Firms obligations are called liabilities. Liabilities represent debts payable in
future by the firm to its lenders and creditors. They represent economic obligations to
pay cash or pay cash or to provide goods services in some future period. Examples of
liabilities are creditors, bills payable, wages, salaries payable, taxes payable, bonds,
debentures, borrowings from banks and financial institutions, public deposits etc
Liabilities are of two types: (1) current liabilities; and (2) long-term (fixed)
Liabilities. Current liabilities are debts payable within an accounting period. Current
assets are converted into cash to pay current liabilities. Long-term liabilities are the
obligations or debts payable in a period of time greater than the accounting period. Longterm liabilities include debentures, bonds, and secured long-term loans from financial
institutions. The financial interest of the owners are called owners equity or simply
Equity. The owners interest is residual in nature, reflecting the excess of the firms
assets over its liabilities. As liabilities are the claims of outside parties, equity represents
owners equity has two parts (a) paid-up share capital and (b) reserves and surplus. Paidup share capital is the amount of funds directly contributed by the shareholders through
purchase of shares. Reserves and surplus or obtained earning are undistributed profits.
Paid up share capital and reserves and surplus together are called net worth.
22
Revenues
(expenses) which are incidental or indirect to the main operations of the firm are called
non-operating revenues (expenses).
MEANING OF FINANCIAL STATEMENTS
Financial statements at least refer to the two statements which are
prepared by a business concern at the end of the year. These are
1. Income statement or trading and profit and loss account which is prepared by
business concern in order to know the profit earned and loss sustained during a
specified period.
2. Position statement or Balance sheet which is prepared by a business concern on a
particular date in order to know its financial position. Concern on a particular dare
in order to know its financial position.
23
To these statements are added the statement of Retained Earnings and some other
statements such as (Funds flow statement, Cash flow statement etc) and schedules of
fixed assets, investments, current assets etc to give a full the package of financial
statements.
Statement of Retained Earnings (When prepared separately ) or profit and loss
appropriation account shows the utilization of profits of the company i.e., dividend
declared, amount transferred to general reserve or any other reserve as shows in this
account.
Funds flow statement summarizes the changes in working capital in a specified
period and indicates the various sources and applications of funds. Cash flow statement
gives the various items of inflow and outflow of cash. Various schedules of fixed assets,
investments, current assets etc, are prepared by companies to show as to how the figures
shown in the balance sheet have been arrived at.
NATURE OF FINANCIAL STATEMENTS
Financial statements are prepared for the purpose of presenting a periodical review
or report by the management and deal with the state of investment in business and result
achieved during the period under review. They reflect a combination of recorded facts,
accounting conventions and personal judgments. From this it is clear that financial
statements are affected by three things i.e. recorded facts, accounting conventions and
personal judgments.
IMPORTANCE OF FINANCIAL STATEMENTS
The information given in the financial statement is very useful to a number of
parties as given below:
1. OWNERS: Owners provide funds for the operation of business and they want to
know whether their funds are being properly utilized or not.
statement prepared from time to time to satisfy their curiosity.
24
The financial
accounting control so that cost of production may be reduced with the resultant of
the prices of goods they buy.
8. MANAGERS: Management is the art of getting things done through others. This
requires that the subordinates are doing work properly. Financial statements are an
aid in this respect because they serve manager in appraising the performance of the
25
subordinates by comparing the actual results with the standards established and
identifying the deviations, if any and taking remedial measures to remove
deviations.
MEANING OG ANALYSIS OF FINANCIAL STATEMENTS
Analysis is the process of critically examining in details accounting information
given in the financial statements. For the purpose of analysis, individual items are
studied their interrelationship with other related figures established, the data is sometimes
rearranged to have better understanding of the information with the help different
techniques or tools for the purpose. In the words of MYNR, financial statement analysis
is largely a study of relationship among the various financial factors in a business as
disclosed by a single set of statements and a study of the trend of these factors as shown
in a series of statements.
MEANING OF INTERPRETATION
Analysis and interpretation are closely related.
without analysis and with interpretation analysis has no value. In the words KENNDY
AND MEMULLAR, The analysis and interpretation of financial statements data so that
a forecast may be made of the prospects for future earning, ability to pay interest and debt
maturities (both current and long-term) and profitability of a sound dividend policy.
TYPES OF FINANCIAL STATEMENT ANALYSIS
Different types of financial statements analysis can be made on the basis of
1. The nature of the analysis and the material used by him.
2. The objectives of the analysis.
3. The Modus operandi of the analysis.
These are discussed one by one.
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27
Such statement
enumerates net effects of the various business transactions on cash and takes
into account receipts and disbursement of cash.
IN A BORDER SENCE: The term funds refers to money values in whatever
form in may exits, here funds means all financial resources, used in business
whether in the form of men, material, money, machinery and others.
IN A POPULOAR SENCE: The term funds means working capital, i.e. the
excess of current over current liabilities. The working capital concept of funds
has emerged due to the fact that total resources are invested partly in fixed
assets in the form of capital and kept in form of liquid or near liquid form as
working capital.
29
And funds do not move when the transaction affects fixed assets and fixed liabilities or
current assets and current liabilities.
CURRENT AND NON-CURRENT ASSETS
To understand flow of funds, it is essential to classify various accounts and balance
sheet items into current and noncurrent categories.
Current accounts can either be current assets or current liabilities. Current assets
are those assets which in the ordinary course of business can be or will be
converted into cash in a short period of normally one accounting year.
Current liabilities which are intended to be paid in the ordinary courses of
business with in a short period of normally one accounting year out of the current
assets or the income of the business.
The following is list of current working capital accounts
List of current or working capital accounts
Current liabilities
Current assets
1. Bills payable.
1. Cash in hand.
2. Sundry creditors (or) account
2. Cash at bank.
payable.
3. Accrued (or) outstanding expenses.
3. Bills Receivable.
4. Dividends payable.
4. Short tern (or) Account Receivable.
5. Bank over drafts.
5. Short term loans & Advances.
6. Short term loans advances &
6. Temporary
(or)
Marketable
deposits.
investment.
7. Provision against current assets.
7. Inventories or stock such as
a) Raw material.
b) Working process
8. Provision for taxation, if it does not
c) Stores and pares.
amount to Appropriation of profit.
d) Finished goods.
9. Proposed dividend (may be a current
31
8. Prepaid expenses.
Determine whether the account in valued in the transaction are current or noncurrent
If the both account in valued are non current i.e. either permanent assets or
permanent liabilities, it does not result in the flow of funds.
If both the account invalid are non-current.
If he accounts in valued are such that one is a current account while the other is a
non-current account i.e. current assets and permanent and fixed assets or current
liabilities and fixed assets or current liability and permanent liability & fixed
assets or current liability & permanent liability then it result in the flow of funds.
DIAGRAMS DEPICTING FLOW OF FUNDS
32
Flow of Funds
No
When
(or)
Yes
Both
Non
current
current
a/c
and
Are in valued
valued
FLOW OF FUNDS
Current
Current Assets
No
Liabilities
Yes
Yes
Yes
Current Assets
Current Assets
No
Hence funds flow statement is not competitor to financial statements. The funds
statement provides additional information as regards changes in working capital, derived
from financial statements at two point of time. It is a tool of management for financial
analysis and helps in making decisions
1.
Income statement
It does not reveal the inflow and
is
complementary
to
income
34
Balance sheet
1. It is a statement of financial position
dynamic nature.
in nature.
management in making
decisions.
decisions.
preparing
funds
flow
4. No such of changes in
working capital is required. Rather
profit & loss account is prepared.
statement.
Significant and importance of funds flow statement
A funds flow statement is an essential tool for the financial tool for the financial
analysis and is of primary importance to the financial management. Now a days it is
being widely used by the financial analysis, credit granting institution and financial
manages. The basic purpose of funds flow statement is to reveal the changes in the
working capital on the two balance sheets data.
35
It also describes the sources from which additional working capital has been
financed and the uses to which working capital has been applied. Such a statement is
particularly useful in assessing the growth of the firm. It resulting financial needs and in
determining the best way of financial these needs. These significance or importance of
funds flow statement can be well followed one can plan the intermediate and long term
financing of the firm.
USES OF FUNDS FLOW STATEMENT
Helps in analysis of financial statement.
Throes light or preplanning questions.
Helps in formulation of dividend policy.
Helps in the proper allocation of resources.
Acts as a future guide.
Helps appraising the use of working capital.
Helps knowing the credit worthless.
LIMITATIONS OF FUNDS FLOW STATEMENT
The funds flow statement has a number of users; however, it has creation
limitations also, which are listed below.
1. It should be remembered that a funds flow statement is not a substitute of an
income statement or a balance sheet. It provides only some additional information
as regards changes in working capital.
2. It can not reveal continuous changes.
3. It is not an original statement but simply is arrangement of data given in the
financial statement.
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37
Previous
year
Current
year
Current assets:
Cash in hand
Cash at bank
Bills receivable
Sundry debtors
Temporary
Investment
Stock
Prepaid expenses
Accrued incomes
xxx
xxx
xxx
xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Xxx
xxx
Xxx
Xxx
Xxx
Xxx
xxx
Current liabilities:
Bills payable
Sundry creditors
Outstanding expenses
Bank overdraft
Short advantages
38
Decrease
Xxx
xxxx
Dividend payable
Provision for taxation
Xxx
Xxx
xxx
Xxx
Xxx
Xxx
Xxx
Xxx
Rs
39
Source of funds
Funds from operation.
Xxx
Issue of share capital.
Xxx
Raising of long term loans.
Xxx
Receipts from partly paid shares, called up.
Xxx
Sales of non current assets.
Xxx
Non trading receipts, such as dividends received.
Xxx
Sales of investment(long term)
Xxx
Decrease in working capital (as per schedule of change Xxx
in working capital).
Xxx
Total:
Application (or) uses of funds
Xxx
Funds lost in operation.
Xxx
Redemption of debentures.
Xxx
Repayment of long term loans.
Xxx
Purchase of long term investment.
Xxx
Purchase of non current assets.
Xxx
Non trading payments.
Xxx
Payment of dividends.
Xxx
Payment of tax.
Xxx
Increase in working capital.
xxx
Total:
Forms an account form or self balancing type funds flow statements
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Sources
Rs
Funds from operation Issue of Xxx
Applications
Rs
Funds in Operation. Redemption Xxx
Share Capital
xxx
Issue of debentures.
xxx
Redemption
of
xxx
debentures.
Receipts
from
partly
paid Xxx
hares.
assets.
Purchase
assets.
investment.
dividends.
Payment of dividends
Payment of tax
Net decrease
Net
in working
capital
xxx
of
increasing
long
xxx
term Xxx
Xxx
Xxx
in
working Xxx
capital.
Xxx
Total
Xxx
Total
Xxx
xxx
NOTE:- Payment of dividend and tax will appear as an application of funds only when
these items are appropriations of profit and not current liabilities.
YEAR1 YEAR2
41
INCREASE DECREASE
Inventories
xxx
Xxx
xxx
Sunday Debtors
xxx
xxx
xxx
xxx
xxx
xxx
Xxx
xxx
Xxx
xxx
xxx
xxx
xxx
in (+-
(+-
xxx
xxx
xxx
xxsx
Current
Liabilities
(T.S)
Working Capital = (A+B)
Decrease
Increase
working Capital
xxx
Application of funds
42
Amount
Sources of funds
Issue of shares
xxx
Preferences of Shares
xxx
Issue of Debentures
xxx
Redemption of Debentures
xxx
Long
term xxx
Borrowings
xxx
xxx
xxx
Payment of Fixed Assets
Operating profit
xxx
xxx
Decrease in working
Capital
xxx
xxx
TOTAL
TOTAL
xxx
xxx
2010
2011
EFFECT ON WORKING
CAPITAL
INCREASE DECREASE
13,60,13,82
4
40,97,718
8,98,720
2,62,000
2,42,665
14,38,72,92
7
9,39,57,410
153226
388272
2,65,37,258
3,84,172
4,20,56,414
39,44,492
5,10,448
2,39,17,258
1,41,507
12,14,20,338
3,65,77,367
48,460
2,86,89,754
78,87,613 31,982
16,478
3,66,25,827
79,04,091
10,72,47,10
0
11,35,16,247
62,69,147
Net increase in Working
Capital
62,69,147
1,13,51,627
1,13,56,247
5,27,80,501
5,27,80,501
Source of funds
Amount
Application of funds
Amount
(Rs)
Sale
of
factory
buildings
1,66,750
fixtures
Purchase
other
fixed
assets
11,40,902
38,15,939
Decrease in un secured
36,55,878
Surplus
increase
Increase
9,64,002
loans
in
working
capital
secure
loans
in
62,69,147
69,14,784
Total
1,72,16,811
1,72,16,811
INTERPRETATION:-
45
The above calculation that in 2010-2011 total current assets amount to Rs.
14,38,72,927 has been decreased to Rs. 12,14,20,338. The decrease in current
assets amount Rs. 2, 24, 52,589.
Cash and bank balance has lower i.e. from (8,98,720 to 3,88,272) Rs. 6,10,448
loans and advances also increase from 26,20,000 to 2,65,37,258 i.e., Rs
2,39,17,258.
At the same time the current liabilities also decreased from Rs. 3,66,25,827 to Rs.
79,04,091 i.e. Rs. 2,87,21,736.
The net working capital increase during the study period amount to Rs
6,26,99,147. So this is a healthy sign that the company able to manage current
assets and liabilities.
Current Assets:
a) Sundry Debtors
b) Cash and Bank Balances
c) Loans and Advances
d) Other current assets
Total current Assets(A):
Current
Liabilities
&
Provisions:
a) Current Liabilities
b) Other current liabilities
Total Current Liabilities (B)
2011
2012
EFFECT ON WORKING
CAPITAL
Increase
1,53,226
2,88,272
2,65,37,258
9,44,41,582
63,467
14,70,425
3,88,38,127
14,89,79,468
12,14,20,338
18,93,51,487
6,23,100
16,68,991
2,70,29,530
71,30,214
79,04,091
3,41,59,744
11,35,16,247
15,51,91,743
Decrease
89,759
11,82,153
1,23,00,869
54,53,788
2,07,94,430
54,61,223
41,67,55,496
4,16,75,496
Net increase
Capital
Total
in
Working
155191743
155191743
6,80,20,908
47
6,80,20,908
Amount (Rs)
66,21,525
buildings
Increase in un secured
loans
1,14,21,497
Machinery
74,39,073
Surplus
Increase
in
working
4,16,75,496
capital
3,67,77,251
5,97,18,518
Total
INTERPRETATION:-
48
5,97,18,518
The
2012
2013
Capital
INCREASE DECREASE
Current Assets:
a) Inventories
74,48,79,734
6,09,82,074
63,467
65,10,948
64,47,481
14,70,425
1,41,21,860
12,61,435
3,88,38,127
5,99,92,347
2,11,54,220
7,44,89,734
18,93,51,487
6,09,82,074
20,25,89,303
1,35,07,660
2,70,29,530
3,00,94,997
71,30,214
3,41,59,744
1,82,42,364
4,83,37,361
1,54,25,942
b) Sundry Debtors
c) Cash and Bank Balances
1,35,07,660
3,65,467
1,11,12,150
B)
9,39,801
9,39,801
Total
15,51,91,743
15,51,91,743
1,90,98,916
Amount (Rs)
1,90,98,916
Sales
of
buildings
factory
27,33,270 Purchased
of
Furniture & Fixtures
82,932
Decrease
capital
in
working
Increase in un secured
loans
Purchase of
&Machinery
9,39,801
1,38,60,146
Purchase
2,34,68,817 computers
1,25,45,805
Purchase of
fixed assets
of
2,84,216
other
13,48,674
Decrease in secured
loans
1,22,300
Total
plant
24,23,425
3,98,09,993 Total
3,98,09,993
INTERPRETATION:The above calculation that in 2012-2013 total current assets amount to Rs.
189351487 has been increased to Rs. 202589303. The increased in current assets amount
Rs. 13237816.
51
Cash and bank balance has shown higher i.e. from (147425-14121860) Rs.
2651435 loans and advances also increased from 38838127 to 59992347 i.e. Rs.
21154550.
At the same time the current liabilities also increased from Rs. 34159799 to
4833736 i.e. 14177617.
The net working capital decreased during the study period amount to Rs. 939801.
so this is a healthy sigh that the company able to manage current assets and liabilities.
2013
2014
Effect
capital
Increase
52
on
working
Decrease
Current Assets:Inventories
Sundry Debtors
Cash & Advantages
Loans & Advantages
Other current Assets
Total current Assets (A)
10,95,70,32 15,03,55,335
0
23,74,408
68,02,874
14,56,882
14121860
3,22,56,108
5,99,92,347
86,58,335
41,23,820
1,94,11,221 19,37,83,874
4,37,85,01
5
44,28,466
1,26,64,978
2,77,36,239
4,53,44,51
5
3,27,75,006
5,98,13,506
48,81,795
58,97,969
3,76,56,801
6,57,11,475
Decrease
capital
in
Total
15,69,54,42 12,80,78,399
0
2,88,76,021
2,88,76,021
working
185830441
185830441
73705704
73705704
Particulars
Rs
Particulars
53
Rs
Source of funds
Share holder funds
Reserve & surplus
Unsecured loans
Application of funds
80,000 Purchase
of
fixed
assets
1,68,399
1,68,399 Total
1,68,399
12,761
14,27,57
0
Secured loans
60,098
Differed tax liability
34,093
Preliminary Expenses
1,223
Total
INTERPETATION:-
54
55
STATEMENT OF CHANGING IN WORKING CAPITAL FOR THE YEAR 20142015 OF THE RAMCO CEMENTS LIMITED.
Particulars
2014
2015
EFFECT ON working
Capital
Increase
Decrease
Current Assets:Inventories
15,03,55,335
19,06,69,403
403,14,068
Sundry Debtors
15,46,938
21,33,751
5,86,813
14,56,882
2,57,37,490
2,42,80,608
3,22,56,108
3,59,80,085
37,23,977
94,85,805
11,95,85,076
11,00,99,271
19,51,01,068
37,41,05,885
6,01,40,091
14,93,30,012
58,97,968
87,89,433
6,60,38,008
15,81,19,445
12,90,63,008
21,59,86,440
liabilities
&
Provisions:Current liabilities
Other current liabilities
Total current liabilities
(B)
Working Capital (A-B)
Decrease
in
8,69,23,432
working
8,69,23,432
capital
Total
21,59,86,440
21,59,86,440 17,20,86,122
56
17,20,86,122
Particulars
Sources of FUNDS
Amount (Rs)
Particulars
Amount (Rs)
Application of FUNDS
Secured loans
Unsecured loans
7,056.19
346.8
12,75,569.3
2,606
Expenditure
Total
INTERPETATION:
57
88,407.9
13,74,327.1
The total current assets value for the year 2014-2015 is 195101068. It increased to
37410585 for the year ending 2014-2015.
Cash & Bank balance showed an increase of 24280608. Which is derived from a
sea change in companys cash balances? The cash & Bank balance for the year 20142015are 1456882 and 25733490 respectively.
At the same time the current liabilities also increased from Rs 6603860 to
158119445 i.e. Rs 92081385.
The net working capital increased during the study period amount to Rs.
86923432. So this is a healthy sighs that the company able to manage good liquidity.
(RUPEES IN LAKHS)
Years
2010-2011
-62,69,147
2011-2012
-4,16,75,496
2012-2013
2013-2014
+9,39,801
-2,88,76,021
2014-2015
-8,69,23,432
Chart -1
2011-2012
2012-2013
2013-2014
2014-2015
-20000000
-40000000
-60000000
-80000000
-100000000
INTERPETATION:
The changes in working capital are increase & decrease in every year. It is continuous
increase & decrease of the working capital.
59
(RUPEES IN LAKHS)
Year
2010-2011
1,72,16,811
2011-2012
5,97,18,518
2012-2013
3,98,09,993
1,68,399
21,13,74,327.1
2013-2014
2014-2015
Chart -2
INTERPETATION:
The funds flow statement is 2013 2014 between years amount was increased in yearly.
In 2014 2015 was decreased in present year i.e. Rs. 2,17,709.70 lakhs.
60
FINDINGS
1. In the year 2010-2011 the total source of funds is Rs. 1,70,94,509. The main
source of the fund is secured loans amounted to Rs 69,14,784. Total applications
of funds for the year 2010-2011 are Rs 1,72,16,811. The main application
component is purchase of other fixed assets Rs 11,40,902.
2. In the year 2011-2012 the total source of funds is Rs 5,95,96,218. The main
source of fund is secured loans amounted to Rs 3,67,77,252. Total applications of
funds for the year 2011-2012 are Rs 5,97,18,518.
Total
The main
SUGGESTIONS
62
CONCLUSION
63
BIBILIOGRAPHY
Author
Dr.S.N.Maheshwari
I.M pandey
Edition
Management of accounting
8th edition
Financial management
Financial management
SOURCES:
Company reports.
Web site of a company www.ramco.com
64
6th edition
9th edition