A Study on Modernization of Plant and Financial

7/31/2019 A Study on Modernization of Plant and Financial

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A STUDY ON MODERNIZATION OF PLANT AND FINANCIAL

ANALYSIS OF THE COMPANY.

A project submitted in

partial fulfillment of the requirementfor the degree of

MASTER OF BUSINESS ADMINISTRATION

Specializing in

FINANCE AND HUMAN RESOURCE MANAGEMENT

to the

UNIVERSITY OF ANNAMALAI IN COLLABARATION WITH BHARTI

RESOURCE

by

ASRA SULTHANA.B

INTERNATIONAL SCHOOL OF BUSINESS AND RESEARCH COLLEGE

DEPARTMENT OF FINANCE,

ELECTRONIC CITY, BANGALORE -

MARCH- 2009


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DECLARATION

I, ASRA SULTANA.B Reg, No: 531M8075F00277 a bonafide student of Department of

Management Studies, INTERNATIONAL SCHOOL OF BUSSINESS AND RESEARCH IN

COLLABORATION OF BHARTI RESOURCES, Bangalore would like to declare that the project

entitled, A STUDY ON FINANCIAL PERFORMANCE ANALYSIS AND MODERNIZATION OF

PLANT WITH SPECIAL REFERANCE TO CARBORUNDUM UNVERSAL LIMITED,HOSUR. In

partial fulfillment of Master of Business Administration course of the Annamalai University is

my original work.

SIGNATURE


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INTERNATIONAL SCHOOL OF BUSINESS AND RESEARCH.

ELECTRONIC CITY, BANGALORE-

Certified that this project report titled A STUDY ON FINANCIALPERFORMANCE ANALYSIS AND MODERNIZATION OF PLANT WITH

SPECIAL REFERANCE TO CARBORUNDUM UNVERSAL

LIMITED,HOSUR is the bonafied work of Ms.ASRA SULTHANA.B A who

carried out the research under my supervision. Certificate further, that to the best

knowledge the work reported herein does not form part of any other project report

or dissertation on the basis of which a degree or award was conferred on an earlier

occasion on this or any other candidate.

HEAD OF THE DEPARTMENT

GUIDEDIRECTORPG STUDIES

Assessed By

INTERNAL EXAMINER EXTERNAL EXAMINER


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1.2.1COMPANY PROFILE:

CUMI was founded in 1954 as a tripartite collaboration between the Murugappa

Group, The Carborundum Co., USA and the Universal Grinding Wheel Co. Ltd.,

U.K.

The company pioneered the manufacture of Coated Abrasives and Bonded

Abrasives in India in addition to the manufacture of Super Refractories, Electro

Minerals, IndustrialCeramics and Ceramic Fibres. Today the company's range of

over 20,000 different varieties of abrasives, refractory products and electro-

minerals are manufactured in ten locations across various parts of the country.

With state-of-the art facilities and strategic alliances with global partners, CUMI

has achieved a reputation for quality and innovation.CUMI is one of the five

manufacturers in the world with fully integrated operations that include mining,

fusioning, wind and hydro power stations, manufacturing, marketing and

distribution.

Almost all of CUMI's ten manufacturing facilities have received the ISO

9001:2000 accreditation for quality standards. A well connected marketing and

distribution network of offices and warehouses in India and abroad, ensure that

service to customers is given prime importance.

CUMI's constant innovation and product upgradation, through in-house R&D and

strategic alliances with global leaders in grinding technology, have not only

ensured it market leadership in India and abroad, but also international recognition

as a manufacturer of quality abrasives and a provider of total grinding solutions.

CUMI's products are being exported to 43 countries spread across North America,

Europe, Australia, South Africa and Asia.
http://www.murugappa.com/http://www.murugappa.com/http://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/ceramics/sr/index.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.murugappa.com/http://www.murugappa.com/


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. The business has its origins in 1900, when Dewan Bahadur A M Murugappa

Chettiar established a money-lending and banking business in Burma (now

Myanmar), which then spread to Malaysia, Sri Lanka, Indonesia and Vietnam. A

century down the line, it has withstood enormous vicissitudes (including

strategically moving its assets back to India and restarting from scratch in the '30s,

before the Japanese invasion in World War II) to become one of the country's

biggest industrial houses.

The group is a market leader in India across a spectrum of products like fertilisers,

abrasives, automotive chains, car door frames and steel tubes and also has a

significant presence in sugar and financial services. Neemazal, a neem-based

organic pesticide, is the market leader in bio-pesticides. Some of the country's best-

known brands like BSA and Hercules in bicycles, Parrys Spirulina and Parrys Beta

Carotene in nutraceuticals, Parrys Pure in sugar, Carborundum and Ajax in

abrasives, Gromor and Paramfos in fertilisers, and many more come from the

Murugappa Group.

Its companies have tie-ups with BorgWarner of the USA, Wendt of Germany,

Morgan Crucible of the UK, Mitsui Sumitomo Insurance of Japan, DBS Bank of

Singapore, S.A. of Spain, the China Engineering and Exploration Bureau of China,

Foskor of South Africa, Group Chimique Tunisien of Tunisia, Cerdak Pty. of

South Africa and Cargill International SA of Geneva. It has registered 43

international patents for its research and development innovations

The group has grown consistently through its decisive and visionary response to

changing times. Its pioneering efforts, steadfast commitment to ethical business

practices and its dogged pursuit of new areas to extend its business acumen have

brought in its wake several prestigious national and international awards. Social


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commitment has always been the cornerstone of the group's ethos and it has been

at the forefront of eco-conservation, public health, and education in the

communities where its companies operate. It runs several educational and health

care institutions on charitable lines. Besides, the group runs a research and

development centre for rural development, the Sri AMM Murugappa Chettiar

Research Centre (MCRC), which has been designing simple, cost-effective

technologies for local artisans.

The group is also the first business group in Asia to have been awarded the 'IMD

Distinguished Family Business Award' by the internationally renowned

Management Development Institute located in Lausanne, Switzerland.

Business Group

Gross

Sales

Rs.

Billion

Fertilisers / Pesticides 38.00

Bicycles / Engineering / Chains / MetalFormed Products 19.33

Abrasives / Ceramics / Electrominerals 9.86

Financial Services 14.72

Sugar / Nutraceuticals / Bio Products 6.81

Others (Plantations / Sanitaryware /Constructions, etc)

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Total 95.82

Abrasives & Allied Products


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An abrasives is a hard, tough and wear resistant substance for grinding and

polishing operations. Manufactured through a complex and high technology

process, these abrasives are used in metal removal, cutting and finishing operations

in almost all industries.

Coated Abrasives

Bonded Abrasives

Super Abrasives

Synthetic Diamonds

Allied Products

Coated Abrasives

These are manufactured by depositing grains over a backing material like cloth,

paper or fibre. Depending on the requirement of the customer, the backing material

and type of grains will vary. There are various types of grains like sintered

aluminium oxide,silicon carbide, zircon, emery and flint. The grains are of varied

sizes referred as 'grits' and their sizes also vary from grit 12 to grit 2000. The

backing on which these grains are coated will vary depending on the industry and

application to which the coated abrasives are supplied.

Initially, the grains are deposited over adhesive rich backing materials and jumbos

of coated abrasives (up to 1000 metres) are manufactured. Then, depending on

customer order/usage, these jumbos are converted into various shapes like sheets,

belts, rolls, discs and flap wheels. The geometry of the product also differs from

each other based on application equipment.

Coated abrasives are used in light polishing applications in automobile, auto

ancillaries, white goods, hand and power tools, sanitary ware, furniture, fabrication

and construction industry.
http://www.cumi-murugappa.com/abrasives/http://www.cumi-murugappa.com/abrasives/http://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/silicon_carbide_macro.htmlhttp://www.cumi-murugappa.com/emd/silicon_carbide_macro.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/coated_abrasives.htmlhttp://www.cumi-murugappa.com/emd/silicon_carbide_macro.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/emd/sintered_alumina.htmlhttp://www.cumi-murugappa.com/abrasives/


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Bonded Abrasives

These are divided into vitrified, resinoid and rubber products and manufactured by

mixing grains with bonding material, moulding them to shape and then subjecting

the output to firing or baking in high temperature and finishing the same to desired

dimensions. The composition of the product depends on the type of grains and type

of bonding materials used. Sizes will vary between 10 mm to 1200 mm with

thickness ranging from 1 mm to 650 mm. Bonded abrasives are mostly in the form

of wheels but also in other shapes such as segments, sticks etc. Bonded abrasives

for internal purposes classified as Standard Products (i.e. those products which are

made to standard dimensions, grit sizes, shapes and grain / bond composition).

These are sold largely through the distribution channel. Non Standard Products are

those products which are made to exact requirements of customers. CUMI's

product range boasts of over 20,000 varieties of abrasives.

Bonded Abrasives are used in diverse applications like floor polishing, fabrication,

polishing, off-hand tool grinding and precision grinding of diverse products like

crank shaft, balls and razor blade across a wide spectrum of industries ranging

from automobile, construction, fabrication, steel, bearing etc.

Diamond and cubic boron nitride (CBN) are known as Super abrasives. Wheels

and tools made with these abrasives are used in high end applications . CUMI is

present in this segment, through its joint venture Wendt India Ltd., Bangalore,

India and also Jingri-CUMI Super Hard Materials Company Ltd., Yanjiao, China,

The major user industries for super abrasivesare automobile, engineering, cutting

tools, refractoriness, ceramics tile, glass and steel.

The characteristics of abrasives industry are as follows:
http://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/super_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.htmlhttp://www.cumi-murugappa.com/abrasives/bonded_abrasives.html


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Diverse industrial applications

Perceivably low threats from substitute products

Adequate raw material availability

Application engineering support to users

The key success factors are quality, cost, delivery and application engineering.

Key inputs are abrasive grains (a large portion of which is captively procured)

electricity, processed cloth, paper and resins.

The global abrasives industry is about USD 13 billion. The major players are Saint

Gobain, Tyrolit, Winterthur, Sia Abrasives and 3M. Till last year, CUMI was

primarily an Indian player. The acquisition of Volzhsky Abrasive Works, Russia

and the establishment of the Joint Venture viz. Jingri-CUMI Super Hard Materials

Co. Limited in China has given CUMI a strong presence in the Russian markets

and also a sound base for increasing its global penetration.

In India, CUMI is the market leader. Apart from CUMI, Grindwell Norton Ltd.

(part of the Saint Gobain group) is a major player in the domestic industry. 3M

specializes in coated abrasives. In addition, John Oakey & Mohan and SAK

abrasives, are the other abrasives manufacturers of significance in India. The

Indian market is also served by several small players operating in specific product

lines and also imports. While high-end imports are certain specialty products from

Europe, the low end ones are 'price only' products from China.

Synthetic Diamonds


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This is one among the hardest man-made materials. It is used in processing of

brittle-hard metal and non-metal material, widely applied in machinery,

metallurgy, geology, building material, petroleum and electronic fields, etc.

CUMI's joint venture in China is one of the leading Synthetic Diamond

manufacturing companies in China. With an installed capacity of nearly 120

million carat of Diamonds, this units caters to customers located across Europe, the

United States, South-east Asia apart from India.

Allied Products

Metal Working Fluids

Apart from abrasives, CUMI also manufactures metal working fluids for grinding

applications. In the metal working process, the right combination of machine,

cutting tool and metalworking fluid is required to produce an acceptable part.

Therefore this product line is a logical extension of CUMI's abrasives.

Power Tools

CUMI recently launched a range of power tools used in metal working,

construction, wood working and interior decoration. Abrasives are used as

accessories in power tools. The Company's strong brand image and well

established marketing network provide good synergies for this product line with

abrasives.

Murugappa Group

The Murugappa Group, headquartered at Chennai, India, is a USD 2.4 billion (Rs

96 billion) conglomerate with interests in engineering, abrasives, fertilisers,
http://www.cumi-murugappa.com/abrasiveshttp://www.cumi-murugappa.com/abrasiveshttp://www.cumi-murugappa.com/abrasives-division.htmlhttp://www.cumi-murugappa.com/abrasives-division.htmlhttp://www.cumi-murugappa.com/abrasives-division.htmlhttp://www.cumi-murugappa.com/abrasives


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finance, bio-products and plantations. It has 29 companies under its umbrella, of

which six are listed and actively traded on the National Stock Exchange and the

Bombay Stock Exchange. Together, they have over 32,000 employees.

PRODUCTS PROFILE

Inputs

Grains Resins Cloth Power

Products

Coated Abrasives

User Industries

Industrial Diamonds - Captive

Plants


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Jingri - CUMI, Yanjiao, China Wendt India, Hosur

Products

Super Abrasives

Inputs

Chemicals, Base oil Electrical Parts

Plants

Chennai, India Bangalore, India Prince Edward Island, Canada

Products


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CUMI's products are being exported to 43 countries spread across North

America, Europe, Australia, South Africa and Asia.

CUMIS CORPORATE GOVERENANCE:

CUMIs should become a great company that in internationally recognize

for high quality and consistency of products and services in the consistency of

products and services in the field and of material sciences.

Every employee has an equally important role to play in CUMI and we shall

realize our goal through the strengths and commitment people.

CUMI shall be an organization, which encourages initiatives, and innovation

emphasizes individual development and important quality of life.

Futures bring changes and we in CUMI shall influence the shape of the

future with confidence.


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CUMI GROWTH AND HIGHLIGHTS:

The group is also the first and only business group in Asia to have been awarded the IMD

DISTINGUISHED FAMILY BUSINESS AWARD by the internationally famous Management

Development institute located in the Lau same, Switzerland.

The companys range of over 20,000 different varieties of abrasives, refectory

products and Electro minerals are matched by very few companies world wide.

Almost all CUMIs ten Manufacturing facilities have received the ISO9002

accreditation for quality standard.

CUMI is the first to produce bonded and coated abrasives in the country.

Largest integrated Manufacturer of abrasives in Asia.

Only Electro cast refractory plant in India.

Wide range of electro Minerals.

First to produce ceramic fibre in India.

High Tech Plasma coating.

Foreign Exchange earnings are Rs.3006 in Lakhs.

Foreign Exchange outgo is Rs.1307 in Lakhs.

The abrasives division was awarded the third place in private sector category

for the All India award instituted by the Institute of Cost and Work Accountants of

India for Excellence in cost Management for 2003-2004. Company has also

received the India Manufacturing Excellence Award for Managing Growth

through change Institute by frust and Sullivan.


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Batch kiln disadvantages

The fuel consumption of batch kiln is very high. The average consumption of fuel

per ton is 400 lts against the tunnel kiln fuel consumption of 250 its per ton.

The company decided to install new technology called tunnel kiln. The tunnel kilncapacity is 180 tons per month to reduce the power and fuel cost. Tunnel kiln is

fuel efficient with lower power consumption compared to batch kiln.

Now, the power and fuel prices are going up very often and it increases the cost

of manufacturing to a great extent. Power and fuel cost alone is 12%of the

manufacturing cost today against 7 to 8% two years back.

The tunnel kiln requires an area of 63m 11m and the company had planned to

install it in the existing finishing area which demands some modification in theexisting building and relocation of some machineries.

By, utilizing this opportunity to convert the existing virtual, modular operation to

actual modular layout and improve the efficiency of the whole operation.

PRESENT SCENARIO OF THE PRODUCT PRODUCE BY CUMI

The cumi company has 3 modules in verified and their product ranges are;

M1-5 to8 dia product.

M2-9 to 20dia product.

M3-below 5 dia product.

PROCESS INVOLVED IN MANUFACTURING VIRTIFIED PRODUCTS ARE


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ACTIVITY DEPARTMENT AREA

WEIGHING

MIXING

MOULDING

DRYINGMOULDING 2670M

LOADING

KILN FIRING

UNLOADINGFIRING 1530M


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FEATURE OF TUNNEL KILN

The following design features are incorporated into the dragon and Tc

modular tunnel kiln design to ensure uniform and efficient firing grindingwheels.

Modular kiln construction

The kiln will be designed in modular sidewall sections and fully assembled

in house to insure a reduction in field assembly time and minimize

interruption of existing operation. These sections will be complete with all

burners, gas and air piping to each burner. Plus zone headers installed to

facilitate erection.all electrical equipment will be installed and wired so,

modules can easily be connected. The sidewall modules will be complete

with all refractoriesinstalled.pre-fabricating sections allows for in house

inspection before shipment ensuring a top quality product.

INSULATION BRICK AND CERAMIC FIBRE LINING

A low mass brick and ceramic fibre kiln lining will permit the kiln to be

shutdown or started up in 24 hours or less without damage to the kiln

lining, also the low thermal mass lining allows for rapid adjustments to the

temperature curve.


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FLAT ROOF AND ROOF CONTROLS JETS IN THE PREHEAT AND COOLING

ZONE

The flat roof keeps the longitudinal gas flow down in the load minimizing

crown drift.pressirized roof jet increases the flow of hot crown gases down

through the load, making the best use of the available heat and improves

top to bottom temperature uniformity. The main zone roof will be arched.

DIRECT FIRING WITH HIGH VELOCITY BURNERS

THE high velocity burners entrain ware space gases creating a

recalculating action which increases the rute of heat transfer to the

product and improve temperature uniformity, making faster firing cycles

possible. These burners will use pre heated combustion air from the

cooling zone.

BURNERS THROUGHOUT THE LENGTH OF THE PREHEAT ZONE

THESE burners can be used to shape and control the time temperature

curve according to the product requirement. these burners will use pre

heated combustion air from the cooling zone.

CLEAN FIRING CONDITIONS

For reasons of cleanliness all the combustion air piping from the externalair header to the burners and arch nozzles will be made of corrosion

resistant materials and a gas filter will be provided and dust filters to

further ensure cleanliness.

A TOTALLY INTEGRATED COMPUTER PROCESS MANAGEMENT SYSTEM

This system allows precise automatic control of kiln temperature and

pressures display and records kiln data, a monitor fuel consumption and

annunciates critical kiln components.

KILN STRUCTURE


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THE KILN WILL BE DESIGNED WITH A THICK STEEL cross member that set

on the foundation pad.the roof panels will be constructed with expanded

metal.the exterior and interior surface of the kiln shell will be painted to

inhibit rust and or corrosion the kiln sidewall sections will be bolted

together in the field.

The lining will be divided into sections to conform with the prefabricated

sections.the bench of the kiln at the base of the sidewall will be

constructed of lightheight refractory units.

The roof will be constructed using a hot face refractory suspended bricks

backed up using ceramic fibre in pre heat and cooling zones with an arched

roof in the main zone.

The lining of the sidewalls will consists of an insulating brick hot face with

ceramic fibre material backing.thermocouples and pressure reading

openings are provided in the roof and side wall.


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CHAPTER I

INTRODUCTION:

Finance has aptly been called The Science of Money It studies the principles and

the methods of obtaining control of money from those who have saved it, and of

administering it by those into whose control it passes.

Finance is the process of conversion of accumulated funds to productive use

Finance may be defined as that administrative are or set of administrative

functions in an organization which dealt with the arrangement of cash and credit so

that the organization may have the means to carry out its objective as satisfactory

as possible.

Financial management is the managerial activity which is concerned with

the Planning and controlling of the firms financial sources.

Financial performance is the process of identifying the financial strength and

weakness of the firm by properly establishing relationship between the items of the

balance sheets and the profit and loss account.

The basis for financial planning, analysis & decision-making is the financial

information predict, compare and evaluate the firms earning ability.

In the financial statements (or) accounting reports is contained of company

financial information.


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The status of investments in the business.

The results achieved during a period under review.

Changes in Financial position statement of uses:

It has an analytical value as well as it is an important tool.

It gives a clear picture of the causes of changes in the companys

working capital (or) cash flow position.

Which they have been financed from the internal & external sources.

Nature:

The data taken from accounting records it may be income statement

(or) Annual reports. Financial books are not depicted. (eg) Fixed

Assets are shown at cost irrespective of their Market.

Certain accounting principles & Concepts, conventions are followed

in the preparation of financial statement.

It has an important bearing on the financial statements. (eg) stock

valuation depends on the personal judgment

Carborundum Universal limited, is a subsidiary of Murugappa group whichmanufactures abrasives. This project was done in Carborundum Universal, Bonded

division, Hour. Finance is the life-blood of the every business industrial. Without

finance neither any business can be started not successfully run. Provision of

sufficient funds at the required time is the key of success of a concern. As a matter


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of fact, finance may be said to be the circulation system of the economic body,

making possible the needed co-operation between the many units of activity. In an

organism composed of a myriad of separate enterprises, each working for its own

ends but simultaneously making a contribution to the system as a whole, some

force is necessary to bring about direction and co-ordination. Something must

direct the flow of economic activity and facilitate its smooth operation. Finance is

the agent that produces this result.

Finance may be defined as the provision of money at the time when it is required.

Finance money refers to the management flow of money through an organization.

It concern with the application of skills in the manipulation, use and control of

money. Different authorities have interpreted the term finance differently.

Finance is the process of conversion of accumulated funds to productive use. It is

so intermingled with other economic forces that there is difficulty in appreciating

the role it plays. Finance may be defined as the administrative area or set the

administrative functions in an organization which related with the arrangement of

cash and credit so that the organization may heir the means to carryout its objective

as satisfactory as possible. The main objectives comprise financial planning,

raising the need funds, financial analysis and control.

The objectives of the study were

(a) to find out the financial goals structure and the relative significance of the

financial goals pursued by companies in India and

(b) to examine if a companys financial performance was related to the goal

structure it follows. A questionnaire was sent to each company listed in the

Investors Guide of the Economic Times. Sixty one questionnaires were received

back, of which fifty seven were found useable for analysis. The information about


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the actual financial performance for 42 of these companies, for which complete

data were available, was obtained form the Bombay Stock Exchange Official

Directory. An analysis of the relationship between the goals pursued by them and

their actual performance was conducted using dummy variable regression analysis

method. The results of the study are: Companies in India follow multiple financial

goals. Out of the total respondent companies, only 2.4 per cent inter-alia consider

maximization of market value per share in he financial decision-making. From the

overall rank ordering of the financial goals the following four goals could be

isolated as more prevalent in practice: An international comparison of financial

goals reveals that two goals viz. maximizing the growth in sales and ensuring that

funds are available are significantly related with the actual financial performance

of the companies.

1.1.1 NEED OF THE STUDY:

To identify the financial strengths and weakness of the

organization. And helps to the current year financial position

and control the expenditure.

Highlights the utility of financial ratios in credit analysis and

competitive analysis as well as in determining the financial

capability of the firm.

To compare the current financial position with previous years.


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To preparing the financial budget for the upcoming years.

To Emphasis the need and utility of preparing a comprehensive

statement of financial position.

1.1.2 SCOPE OF THE STUDY:

To making reserves for growth and expansion of the organization

and helps to Top management to makes financial planning and

strategy.

Insuring maximum operational efficiency by efficient and effective

utilization of funds.

It provides opportunities to further investment decision, planning,

and controlling of firms financial resources.


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It helps to administrative the allocation of funds; budgetary control

and maintenance of are liquidity level.

It involves comparison for a useful interpretation of the optimum

level financial statements.

It provides insight into the growth or decline of the sale or profit

over the years.

1.1.3 OBJECTIVE OF THE STUDY:

PRIMARY OBJECTIVE:

A STUDY ON FINANCIAL PERFORMANCE ANALYSIS WITH SPECIAL

REFERANCE TO CARBORUNDUM UNVERSAL LIMITED HOUSER.

SECONDARY OBJECTIVE:

To find out the financial stability of a business concern.


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To analyses the liquidity / leverage position of the company to

identify whether the company is able to meet their short term

obligations.

To analysis the profitability position of the company.

To analysis the effective utilization of fund.

To analysis the financial health of the company.

1.1.4 RESEARCH DESIGN:

METHODOLOGY

Since the study is confined to a particular company namely

Carborundum Universal Limited. An analytical study method is followed in the

study. In the methodology contains the type of research, type of data, sources of

data and period of this study and tools for analysis also given in these following

lines:


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1) TYPE OF RESEARCH

Since the study is confined to particular company. The analytical

method is followed in this study.

2) TYPE OF DATA

This study is based on secondary data. The secondary data refers to those

data which are already available in the firm internal records. For the study,

secondary data were collected from the magazine, company records and from the

company website.

3) SOURCE OF DATA

This study is manly based on the secondary data which is collected from

audited Profit & loss account and balance sheet of the company.

4) PERIOD OF THE STUDY

The study covers a period of 5 year starting from 2003 to 2007.

5) SAMPLING

Out of 54 annual reports I have taken last 5 years annual report.

6) TOOLS USED IN ANALYSIS

Statistical Tools:

Correlation

Accounting Tools:

Ratio analysis

Comparative financial statement

Common size statement

Fund flow statement


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1.1.5 LIMITATION OF THE STUDY

The implementation of the suggestions requires more expert advice.

Competitive natures of organization prevent revealing of confidential details.

Short period of study of 2 months.


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1.2 REVIEW OF LITERATURE

American institute of certified public accounts

"Financial statements are prepared of presenting a periodical review or

report by the management and deal with the status of the investment in the

business and the results achieved during the period under review".

Uma maheswari, Financial management


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Financial statements analysis is largely a study of relationships among the

various financial factors in a business, as disclosed by a single set of statement a

study of these factors as shown in a series at statements

Lawrence C. Rhyne (Banking & Finance Journal)

The relationship between financial performance and characteristics of

corporate planning systems was investigated / Planning systems that combined an

external focus with a long-term perspective were found to be associated with

superior 10 year local return to stockholders. A lagged relationship between such

systems and 4 - year average annual returns to investors also was identified.

The impact at comprehensive planning on financial performance is a study

conducted by D.Robely wood, and it was published in the Academy an

management Journal.

This Paper examines the relationship between formal planning procedures

and financial performance examined for a sample as large U.S Banks. If was found

that the sample banks that engaged incomprehensive long range planning

significantly out performed those that had no formal planning system. They also

out performance a randomly selected control group.

Dr. D. RAghirpatta reddy P. Kameswari

The management account August- 2004 page No.638

Working capital management practices in Pharma industry. The Cipla limited has

been selected for case study of working Capital management in the period 1998-

2003.


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The current ratio, quick ratio, net working capital position and the

working capital turnover ratio of Cipla have been found to be with in our slightly

fluctuating around the Indian Pharmaceutical industry standards indicating an over

all efficiency in the management of the company's working capital

ACCRUAL RATIOS

Liquidity

Quick ratio

= current assets less inventories / current liabilities

Defensive interval measure

= current assets less inventories / daily expenditures to operations

Net working capital to total asset

Capital Adequacy

Total liabilities / sales

Long-term debt to equity

times interest earned earnings before interest and taxes plus depreciation /

interest

Profitability

return (after interest and taxes) on equity

net income / common equity

return on total assets

operating margin / sales

Efficiency (turnover ratios)

inventory turnover period

average inventory / cost of goods sold

accounts receivable turnover period

receivables / sales

CORRELATION


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The relationship of quantitative nature. The appropriate statistical tool for

discovering and measuring the relationship and expressing it in brief formula is

known as correlation.

CROXTON AND COWDEN

According to the statistician A.M.Tuttle,

Correlation is an analysis of the co variation between two or more

variables.

Concept of correlation

Correlation is a statistical tool which studies the relationship between two

variables, and correlation analysis involves various methods and techniques used

for studying and measuring the extent of the relationship between two variables.

The correlation expresses rates between the groups of items but bot between

the individual items. The relationship between the two variables in not functional.

MEANING :

SECULAR TREND OR TREND:

Secular trend is the general tendency of the time series data to increase or decrease

or stagnate during a long period of time an upward tendency is usually observed in

time series relating to population, production and sales, prices, income money in

circulation while a downward medical sciences, illiteracy,etc thus trend is either

upward or downward. It should be clearly understood that trend is the general,

smooth, longterm average tendency. It is not necessary that the increase ordecrease should be in the same direction throughout the given period. With the

help of a long term trend, it is possible to determine and present the direction of

change.


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Total commitment of the management in implementing an effective

quality management system.

Continual technological development to fulfill changing needs of the

customer

Total employee involvement for continuous improvement.

Enhancing employee competence through education and training

Building mutually beneficial relationship with suppliers

The companies designed manufacture and delivered productivity and

provide service that result in total customer satisfaction.

The company implemented quality system in line with ISO 9000

service of standard through all our people

The company strives from technological superiority system in purist

of market leadership through continuous improvement.

The company will work constantly with the vendors to ensure quality

inputs.

Vision statement:

To become an admired company in abrasives and technical ceramics driver by

innovation continuously enhancing take holders wealth.

Mission Statement


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We will be high performance achieving state of Rs 1200 crores by 2010

through continuous important in product processes and people.

NATURE OF BUSINESS

MANUFACTURING DEPARTMENT

The company continues to follow prudent manufacturing practices in order

to lower cost of production and enhance performance on quality and delivery

parameters.

The touch-time concept introduced a few years ago has turned out as a

productivity-enhancing shift. Further, the lean manufacturing practices introduced

last year has helped in reducing WIP, throughput time and increasing on-time

delivery.

A capital expenditure of Rs.184 million was incurred during the year for

enhancing capability to manufacture specialized products and for setting up a new

express line for exports. These investments are targeted at creating application

specific capabilities, based on customer requirements.

The investment in upgrading existing machinery continues to be an area of

focus. The modular experiment with the new, depressed centre wheel line in the

previous year was successful. The company is planning more such investments in

future with a view to retaining its competitive edge.

Quality assurance through TQM and Six-sigma programmes continue to

yield positive results lower rejects and wastages, increased uptime, enhanced

productivity and greater consistency of products. In recognition of the progressive

manufacturing culture at CUMI, Frost and Sullivan presented a special award to


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the company on Growth through change at the Indian Manufacturing Excellence

Awards, 2004.

BOARD OF DIRECTORS

1. Mr. M.M. Murugappan (chairman)

2. Mr. S.N. Talwar (Non-executive & Independent Director)

3. Mr. Subodh kumar (Non-executive & Independent Director)

4. Mr. T.L. Palani kumar (Non-executive & Independent Director)

5. Mr. T.M.M. Nambiar (Non-executive & Independent Director)

6. Mr. A. Vellayan (Promoter & Non-executive Director)

7. Mr. Sridhar Ganesh (Non-executive Director)

8. Mr. Srinivasan (Executive Director)

MANAGEMENT COMMTTEE:

1. K. Srinivasan, Managing Director

2. V. Ramesh,Chief Financial Officer

3. N. Kishore, President

- Abrasives & Technology

4. P. R. Ravi, President

- Ceramics & EMD

5. M. Muthiah, Vice PresidentHR

Company Secretary:

S. Dhanvanth Kumar.

Auditors:


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Deloitte Haskins & Sells, Chennai

BANKERS:

State Bank of Indai

Standard Chartered Bank

Bank of America

IDBI Bank Limited

CHAPTER II

CURRENT RATIO

2.1.1 Current Ratio = Current Asset / Current Liabilities

(Rs. In million)

YEAR CURRENT ASSET CURRENT LIABILITIES RATIO

2003-2004 1355.16 447.33 3.02

2004-2005 1411.04 475.92 2.96

2005-2006 1733.71 646.45 2.68

2006-2007 2228.35 857.42 2.59

2007-2008 2898.31 1030.9 2.81

2.1.1 Current Ratio Trend


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INTERPRETATION:

The above table inferred that the company has equal proportion in 2006.

The company current radio is dissatisfactory. The current radio trends have gone down at every

year.

2.1.2.LIQUID RATIOS

Liquid Ratio = Liquid Assets / Liquid liabilities

(Rs. In million)

YEAR LIQUID ASSETS LIQUID LIABILITIES RATIO

2003-2004 967.8 447.33 2.17

2004-2005 959.08 475.92 2.02

2005-2006 1219.3 646 1.89

2006-2007 1489.67 857.42 1.74

2007-2008 1952.74 1030.9 1.90

2.1.2. LIQUID RATIOS TREND

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3

3.1

2003-20042004-20052005-20062006-20072007-2008

RATIO

RATIO


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INTERPRETATION:


The company Liquid Ratiois dissatisfactory. The Liquid Ratiotrends have gone down at every

year.

2.1.3. ABSOLUTE LIQUID RATIO

Absolute Liquid Ratio = Absolute Liquid Assets / Liquid Liabilities

(Rs. In million)

YEAR ABSOLUTE LIQUID ASSETS LIQUID LIABILITIES RATIO

2003-2004 1.245 447.33 0.00278318

2004-2005 1348.25 475.92 2.83293411

2005-2006 1587.91 646.45 2.45635393

2006-2007 1955.09 857.42 2.28020107

2007-2008 2728.6 1030.9 2.64681346

2.1.3. ABSOLUTE LIQUID RATIOTREND

0

0.5

1

1.5

2

2.5

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RATIO

RATIO


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INTERPRETATION:


The company cash position is dissatisfactory. The cash position trends have gone down at every

year.

2.1.4. SOLVENCY RATIOSProprietary Ratio

Proprietary Ratio = Total Shareholders Fund / Total Assets

(Rs. In million)YEAR TOTAL SHAREHOLDERS FUND TOTAL ASSETS RATIO2003-2004 1715.19 2252.8 0.76

2004-2005 1191.96 2534.05 0.79

2005-2006 2374.16 3410.12 0.69

2006-2007 2739.73 4720.84 0.58

2007-2008 3518.75 6144.62 0.57

2.1.4. SOLVENCY RATIOSTREND

0

0.5

1

1.5

2

2.5

3

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RATIO

RATIO


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INTERPRETATION:

The above table inferred that the company has equal proportion in 2006. The company cash

position is dissatisfactory. The cash position trends have gone down at every year.

2.1.5. FIXED ASSET TO PROPRIETARY FUND RATIO

Fixed Asset to Proprietary Fund = Net Assets / Proprietary fund(Rs. In million)

YEAR NET FIXED ASSETS PROPRIETARY FUND RATIO2003-2004 882.53 1715.19 0.51

2004-2005 1092.62 1991.96 0.55

2005-2006 1251.46 2374.16 0.53

2006-2007 2103.17 2739.73 0.77

2007-2008 2640.41 3518.75 0.75

2.1.5. FIXED ASSET TO PROPRIETARY FUND RATIOTREND

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Ratio

Ratio


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INTERPRETATION:

The above the table shows the proportion of fixed assets to proprietors fund ratio. It is

every year has gone down. The level of fixed assets ratio lower than proprietors fund. But

2006 to 2008 increasing So company fixed assets ratio is this year satisfactory.

2.1.6. CURRENT ASSET TO PROPRIETARY FUND RATIO

Current Asset to Proprietary Fund = Current Assets / Proprietary fund(Rs. In million)

YEAR CURRENT ASSETS PROPRIETARY FUND RATIO2003-2004 1355.16 1715.19 0.79

2004-2005 1411.04 1991.96 0.71

2005-2006 1733.71 2374.16 0.73

2006-2007 2228.35 2739.73 0.81

2007-2008 2898.31 3518.75 0.82

2.1.6. CURRENT ASSET TO PROPRIETARY FUND RATIO TREND

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Ratio

Ratio


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INTERPRETATION:

The above table shows current assets to proprietors fund ratio of the firm.

The current asset ratios have gone up every year. The current asset ratio has increased at 0.8in

2007, 0.82 in 2008. So the current Assets Ratio gives the satisfactory level for all years

2.1.7. INVENTORY TO CURRENT ASSET RATIO

Inventory to Current Asset Ratio = Inventory / Current Assets(Rs. In million)

YEAR INVENTORY CURRENT ASSETS RATIO2003-2004 967.80 1355.16 0.40

2004-2005 451.96 959.08 0.47

2005-2006 51.41 1219.3 0.42

2006-2007 738.68 1489.67 0.49

2007-2008 945.57 1952.74 0.48

2.1.7. INVENTORY TO CURRENT ASSET RATIO TREND

0.640.66

0.68

0.7

0.72

0.74

0.76

0.780.8

0.82

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Ratio

Ratio


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INTERPRETATION:

The above table shows Inventory to Current Asset Ratio of the firm. The

inventory current asset ratios have gone up every year. The current asset ratio has increased at

0.45in 2007, 0.5 in 2008. So the current Assets Ratio gives the satisfactory level for all years.

2.1.7. DEBT EQUITY RATIO

Debt Equity Ratio = Long term debt / Shareholders fund(Rs. In million)

YEAR LONG TERM DEBT SHAREHOLDERS FUND RATIO2003-2004 403.97 1715 0.23

2004-2005 405.88 1991.96 0.20

2005-2006 723.40 2374.16 0.30

2006-2007 1814.51 2739.73 0.66

2007-2008 3010.04 3518.75 0.86

2.1.7. DEBT EQUITY RATIO TREND

00.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Ratio

Ratio


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INTERPRETATION:

The above table shows Debt Equity Ratio of the firm. The Debt Equity

Ratio have gone up every year. but 2004-2005 this year decreeing .The current asset ratio has

increased at 0.8in 2007, 0.9 in 2008. So the current Assets Ratio gives the satisfactory level for

all years

2.1.8. PROFITABILITY RATIOSNET PROFIT RATIO

NET PROFIT RATIO = NET PROFIT/NET SALES*100

(Rs. In million)

YEAR NET PROFIT NET SALES PERCENTAGE2003-2004 317.17 2748.35 11.54%

2004-2005 384.24 3112.83 12.34%

2005-2006 766.13 3721.53 20.59%

2006-2007 586.61 4645.56 12.63%

2007-2008 971.70 5830.10 16.67%

2.1.8. PROFITABILITY RATIOS TREND

00.1

0.2

0.3

0.4

0.5

0.6

0.70.8

0.9

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

Ratio

Ratio


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INTERPRETATION:

The above table shows net profit ratio of the firm. The net profit ratio

changeevery year. But current year incrased current asset ratio has increased at 10% to 15%in

2007, 15% to 20% in 2008. So the current Assets Ratio gives the satisfactory level for all years

2.1.9. RETURN ON TOTAL ASSETSRETURN ON TOTAL ASSETS=RETURN/TOTAL ASSET*100

(Rs. In million)

YEAR RETURN TOTAL ASSETS PERCENTAGE2003-2004 317.17 2705.05 11.73%

2004-2005 384.24 3012.34 12.76%

2005-2006 766.13 3920.89 19.54%

2006-2007 586.61 5618.20 10.44%

2007-2008 971.70 7842.30 12.39%

2.1.9. RETURN ON TOTAL ASSETS TREND

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RATIO

RATIO


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INTERPRETATION:

The above table shows return on total assets of the firm. The return on

total assets ratios have decreased . The return on total assets ratio has decreased have gone

down at every year. So company return on total assets ratio is this year satisfactory.

2.1.10. RETURN ON SHAREHOLDERS RETURNRETURN ON SHAREHOLDERS RETURN = RETURN/SHAREHOLDERS

FUND*100

(Rs. In million)

YEAR RETURN SHARE HOLDERS

FUND

PERCENTAGE

2003-2004 317.17 1715.19 18.49%

2004-2005 384.24 1991.96 19.29%

2005-2006 766.13 2374.16 32.27%

2006-2007 586.61 2739.73 21.41%

2007-2008 971.70 3518.75 27.15%

2.1.10. RETURN ON SHAREHOLDERS RETURN TREND

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

20.00%

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RATIO

RATIO


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INTERPRETATION:

The above table shows return shareholders return S of the firm.

The shareholders return on total assets ratios have decreased . The return on shareholders

return has decreased have gone down at every year. So company return on total assets ratio is

this year satisfactory.

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2003-2004 2004-2005 2005-2006 2006-2007 2007-2008

RATIO

RATIO


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2.2.1COMPARITIVE BALANCESHEET

Column1 Column2 Column3 Column4 Column5

particulars 2007 2008 increase/decrease in

amount

increase/decrease in

percentage

assets:

fixed assets

net block 2103.2 2640.41 537.24 25.544

capital work in progress 389.32 605.9 216.58 55.630

investments 897.36 1697.68 800.32 89.186

total fixed assets(a) 3389.9 4943.99 1554.14 45.846

current assets:

inventories 738.68 945.57 206.89 28.008

sundry debtors 937.43 1322.86 385.43 41.115Cash & bank balances 273.26 169.71 -103.55 -37.894

Loans & advances 278.98 460.17 181.19 64.947

total current assets(b) 2228.4 2898.31 669.96 30.065

total assets (a+b=c) 5618.2 7842.3 2224.1 39.587

liabilities:

current liability 693.59 815.71 122.12 17.606

provisions 163.83 215.19 51.36 31.349

total current

liabilities(d)

857.42 1030.9 173.48 20.232

long term liability:

secured loans 1797 2267.27 470.25 26.168

un secured loans 726.93 726.93

long term lease liability 17.49 15.84 -1.65 -9.433

deferred tax liability 206.54 282.61 76.07 36.830

total long term

liability(e)

2021.1 3292.65 1271.6 62.917

Capita l& reserves:

share capital 186.71 186.71 0 0

Reserves & surplus 2553 3332.04 779.02 30.513

share holders fund(f) 2739.7 3518.75 779.02 28.434

total liability&capital(h) 5618.2 7842.3 2224.1 39.587


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2.2.2COMPARITIVE BALANCESHEETColumn1 Column2 Column3 Column4 Column5

particulars 2006 2007 increase/decrease in

amount


percentage

assets:

fixed assets

net block 1251.46 2103.17 851.71 68.057

capital work in progress 424.95 389.32 -35.63 -8.384

investments 510.77 897.36 386.59 75.687


current assets:

inventories 514.41 738.68 224.27 43.597

sundry debtors 824.9 937.43 112.53 13.641

Cash & bank balances 145.8 273.26 127.46 87.421

Loans & advances 248.6 278.98 30.38 12.220


total assets (a+b=c) 3920.89 5618.2 1697.31 43.288

liabilities:


provisions 200.25 163.83 -36.42 -18.187

total current liabilities(d) 646.45 857.42 210.97 32.635


secured loans 652.11 1797.02 1144.91 175.570

un secured loans 60.55 -60.55

long term lease liability 10.74 17.49 6.75 62.849


total long term liability(e) 900.28 2021.05 1120.77 124.491

Capital & reserves:

share capital 186.71 186.71 0 0

Reserves & surplus 2187.45 2553.02 365.57 16.712


Total liability& capital(h) 3920.89 5618.2 1697.31 43.288


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2.2.3COMPARITIVE BALANCESHEETparticulars 2005 2006 increase/decrease in

amount


percentage

assets:

fixed assets

net block 1092.62 1251.46 158.84 14.537

capital work in progress 30.39 424.95 394.56 1298.321

investments 478.29 510.77 32.48 6.790


current assets:

inventories 451.96 514.41 62.45 13.817

sundry debtors 678.42 824.9 146.48 21.591

Cash & bank balances 62.79 145.8 83.01 132.202Loans & advances 217.87 248.6 30.73 14.104


total assets (a+b=c) 3012.34 3920.89 908.55 30.160

liabilities:


provisions 106.44 200.25 93.81 88.134

total current

liabilities(d)

475.92 646.45 170.53 35.831


secured loans 275.92 652.11 376.19 136.340

un secured loans 119.02 60.55 -58.47

long term lease liability 10.94 10.74 -0.2 -1.828


total long term

liability(e)

544.46 900.28 355.82 65.352

capital& reserves:

share capital 93.35 186.71 93.36 100.010

Reserves & surplus 1898.61 2187.45 288.84 15.213


Total liability

&capital(h)

3012.34 3920.89 908.55 30.160


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2.2.4COMPARITIVE BALANCESHEETparticulars 2004 2005 increase/decrease in

amount


percentage

assets:

fixed assets

net block 882.5

3

1092.

62

210.09 23.805

capital work in

progress

15.11 30.39 15.28 101.125

investments 452.2

5

478.2

9S

26.04 5.757

total fixed assets(a) 1349.

89

1601.

3

251.41 18.624

current assets:

inventories 387.3

6

451.9

6

64.6 16.676

sundry debtors 665.9

8

678.4

2

12.44 1.867

Cash & bank

balances

110.1

6

62.79 -47.37 -43.001

Loans & advances 191.6

6

217.8

7

26.21 13.675

total current

assets(b)

1355.

16

1411.

04

55.88 4.123

total assets (a+b=c) 2705.

05

3012.

34

307.29 11.359

liabilities:

current liability 315.6

9

369.4

8

53.79 17.038

provisions 131.6

4

106.4

4

-25.2 -19.143

total current

liabilities(d)

447.3

3

475.9

2

28.59 6.391


secured loans 395.7

8

275.9

2

-119.86 -30.284

un secured loans 119.0

2

119.02

long term lease

liability

8.19 10.94 2.75 33.577



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6 8

total long termliability(e)

542.53

544.46

1.93 0.355

Capital & reserves:

share capital 93.35 93.35 0 0Reserves & surplus 1621.

84

1898.

61

276.77 17.065

share holders

fund(f)

1715.

19

1991.

96

276.77 16.136

total liability

capital(h)

2705.

05

3012.

34

307.29 11.359

2.2.5COMPARITIVE BALANCESHEET

particulars 2003 2004 increse/decrease in

amount

increse/decrease in

percentageassets:

fixed assets

net block 926.19 882.53 -43.66 -4.713

capital work inprogress

18.57 15.11 -3.46 -18.632

investments 501.97 452.25 -49.72 -9.904

deferred tax asset 31.63

total fixed assets(a) 1478.3

6

1349.8

9

-128.47 -8.690

current assets:

inventories 369.48 387.36 17.88 4.839

sundry debtors 592.37 665.98 73.61 12.426

cash& bank balances 83.56 110.16 26.6 31.833

loans& advances 236.13 191.66 -44.47 -18.832


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2.3.1Common size statement

particulars 2004 percentageAssets:

Fixed assets

net block 882.53 32.625%

capital work in progress 15.11 0.5585%

investments 452.25 16.718%

deferred tax asset

Total fixed assets(a) 1349.89 49.902%

current assets:

inventories 387.36 14.319%

total current

assets(b)

1281.5

4

1355.1

6

73.62 5.744

total assets (a+b=c) 2759.9 2705.0

5

-54.85 -1.987

liabilities:


provisions 105.31 131.64 26.33 25.002

total current

liabilities(d)

380.74 447.33 66.59 17.489


secured loans 499.06 395.78 -103.28 -20.694

un secured loans 151.63 -151.63

long term lease

liability

6.96 8.19 1.23 17.672

deferred tax liability 191.12 138.56 -52.56 -27.501

total long term

liability(e)

848.77 542.53 -306.24 -36.080

capital reserves:

share capital 93.35 93.35 0 0

reserves surplus 1437.0

4

1621.8

4

184.8 12.859

share holders fund(f) 1530.3

9

1715.1

9

184.8 12.075

total liability

capital(h)

2759.9 2705.0

5

-54.85 -1.987


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sundry debtors 665.98 24.619%

Cash & bank balances 110.16 4.072%

loans advances 191.66 7.085%

Total current assets(b) 1355.16 50.097%Total assets (a+b=c) 2705.05 100%

Liabilities:

current liability 315.69 11.670%

provisions 131.64 4.866%

Total current liabilities(d) 447.33 16.536%


secured loans 395.78 14.631%

un secured loans 0

long term lease liability 8.19 0.302%

deferred tax liability 138.56 5.122%

total long term liability(e) 542.53 20.056%

capital reserves:

share capital 93.35 3.450%

reserves surplus 1621.84 59.956%

share holders fund(f) 1715.19 63.406%

Total liability capital(h) 2705.05 100%

2.3.2 Common size statement

particulars 2005 percentage

Assets:

fixed assets

net block 1092.62 36.271%



deferred tax asset 0 0


current assets:


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loans advances 217.87 7.232%Total current assets(b) 1411.04 46.841%

Total assets (a+b=c) 3012.34 100%

liabilities:




long term liability:secured loans 275.92 9.159%

un secured loans 119.02 3.951%



Total long term liability(e) 544.46 18.074%

capital reserves:



share holders fund(f) 1991.96 66.126%Total liability capital(h) 3012.34 100%



assets:

fixed assets

net block 1251.46 31.917%



deferred tax asset 0 0%


current assets:


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cash bank balances 145.8 3.718%

loans advances 248.6 6.340%Total current assets(b) 1733.71 44.217%


liabilities:










capital reserves:




Total liability capital(h) 3920.89 100%



Assets:fixed assets

net block 2103.17 37.4345%





current assets:


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Loans & advances 278.98 4.965%Total current assets(b) 2228.35 39.663%


liabilities:






un secured loans 0 0




Capital & reserves:


Reserves & surplus 2553.02 45.44%share holders fund(f) 2739.73 48.76%

Total liability & capital(h) 5618.2 100%



Assets:fixed assets

net block 2103.17 37.4345%capital work in progress 389.32 6.929%





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Current assets:




Loans & advances 278.98 4.965%

Total current assets(b) 2228.35 39.663%


liabilities:






un secured loans 0 0




Capital & reserves:

share capital 186.71 3.32%Reserves & surplus 2553.02 45.44%




particulars 2008 Percentage

Assets:

fixed assets

net block 2640.41 33.66%capital work in progress 605.9 7.72%


deferred tax asset 0 0Total fixed assets(a) 4943.99 63.04%


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Current assets:




Loans & advances 460.17 5.86%

Total current assets(b) 2898.31 36.95%


liabilities:


provisions 215 2.74%








Capital & reserves:


Reserves & surplus 3332.04 42.48%



2.4.1 TREND ANALYSIS FOR SALES

year Sales(y) Deviafion form2005 X2X X Y

2003-04 2748.35 -2 -5496.70 4

2004-05 3112.83 -1 -3112.83 1

2005-06 3721.53 0 0.00 0

2006-07 4645.56 1 4645.56 12007-08 5830.10 2 11660.20 4


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N=5 y=20058.37 x=0 xy7696.23 x210

Y= a+bx

a=y/n = 20058.37/5

= 4011.67

b=xy/x2= 7696.23/10

=769.62

Estimation for 2003-04 = y = 4011.67 + 769.62(-2) = 2472.43

2004-05 = y = 4011.67 + 769.62(-1) = 3242.05

2005-06 = y = 4011.67 + 769.62(-0) = 4011.67

2006-07 = y = 4011.67 + 769.62 (1) = 4781.29

2007-08 = y = 4011.67 + 769.62 (2) = 5550.91

2008-09 = y = 4011.67 + 769.62 (3) = 6320.53

2.4.2 TREND ANALYSIS FOR PROFIT

year Sales(y) Deviafion form 2005

X2X X Y

2003-04 317.17 -2 -634.34 4

2004-05 384.24 -1 -384.24 12005-06 766.13 0 0.00 0

2006-07 586.61 1 586.61 1

2007-08 971.70 2 1943.4 4

N=5 y=3025.85 x=0 xy=1511.43 x210


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Y= a+bx

a=y/n = 3025.85/5

= 605.17

b=xy/x2= 1511.43/10

=151.14

Estimation for 2003-04 = y = 605.17 + 151.14 (-2) = 302.89

2004-05 = y = 605.17 + 151.14 (-1 = 454.03

2005-06 = y = 605.17 + 151.14 (0) = 605.17

2006-07 = y = 605.17 + 151.14 (1) = 756.31

2007-08 y = 605.17 + 151.14 (2) = 907.45

2008-09= y = 605.17 + 151.14 (3) = 1058.59

2.5.1 CORRELATION FOR CURRENT ASSETS AND DEBTORS


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__ x

X = _____ = 9626.54

N 5

= 1925.31

__ y

Y = _____ = 20058.37

N 5

= 4011.67

r = xy

V x2* y2

r = 3149773.78

= 3149773.78

3212089.82

= 0.98

year Current

assets (x)

2003-04 1355.16 -570.15 2748.35 -1263.32 1595977 720281.89

2004-05 1411.04 -514.27 3112.83 -898.84 807913.35 462246.452005-06 1733.71 -191.6 3721.53 -290.14 84181.22 55590.822006-07 2228.35 303.4 4645.56 633.89 401816.53 192322.232007-08 2898.31 973.0 5830.10 1818.43 3306687.67 1769332.39

9626.57 0.8 20058.37 0.02 6196576.19 3149773.78


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2.5.2 CORRELATION FOR SHARE HOLDERS

x

X = _____ = 14.06

N 5

= 2.81

__ y

Y = _____ = 9.7

N 5

= 1.94

r = xyV x2* y2

r = 0.1056

0.1056

= 0.1056

0.1113

= 0.949

year Current

assets (x)

2003-04 3.02 0.21 0.0441 2.16 0.22 0.048 0.04622004-05 2.96 0.15 0.0225 2.01 0.07 0.0049 0.01052005-06 2.68 -0.13 0.0169 1.89 -0.05 0.0025 0.00652006-07 2.60 -0.21 0.0441 1.74 -0.20 0.04 0.0422007-08 2.8 -0.01 0.0001 1.90 -.04 0.0016 0.0004

14.06 0.01 0.1277 9.7 0.00 0.097 0.1056


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FINDINGS

AS PER THE BALANCE SHEET FOR THE YEAR ENDED 2007-08

PARTICULARS 2008

REVENUE(A)GROSS SALES 6606

OTHER INCOME 847

PROFITABILITY(B)

PBIT 1541

PBT 1372

PAT 972

PBIT/GROSS SALES(%) 23.3%

PBT/GROSS SALES(%) 20.8%ASSETS EMPLOYED(C)FIXED ASSETS 3218

INVESTMENTS 1698

NET CURRENT ASSETS 1867

TOTAL ASSETS 6783

FIXED ASSETS TURNOVER 2.1

RETURN ON CAPITAL EMPLOYED(%) 22.7%

FUNDS EMPLOYED(D)PAIDUP-CAPITAL 187

RESERVES 3304

NET WORTH 3490

LOANS FUNDS 3010

NET DEFERRED TAX LIABILITY 283

TOTAL FUNDS EMPLOYED 6783

DEBT TO EQUITY RATIO (E) 0.9

INVESTOR PARAMETERSDIVIDEND%(F) 100%

EPS(ON RS .2 FACE VALUE)(G) 10.4

BOOK VALUE 37RETURN ON NET WORTH%(H) 27.8%


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RATIO ANALYSIS

1.CURRENT RATIO

CURRENT ASSETS,LOANS AND ADVANCES

A.INVENTORIES 1734.03

B.S.DRS 2261.37

C.CASH AND BANK BALANCES 476.03

D.LOANS AND ADVANCES 507.484978.91

CURRENT LIABILITIES AND PROVISIONS

A.CURRENT LAIBILITIES 1500.99

B.PROVISIONS 215.18

1716.17

CURRENT ASSETS,LOANS AND ADVANCES

CURRENT LIABILITIES AND PROVISIONS

4978.91

1716.91

=2.9011

2.SHARE HOLDERS EQUITY RATIO

(SHARE SHOLDER,S EQUITY 125,000,000 EQUITY SHARES OF 2/-

=250,000,000)

TOTAL ASSETS(TANGIBLE ASSETS)

LAND 38.50

BUILDING 1254.55


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PLANT AND MACHINERY 3950.50

FURNITURE AND FIXTURES 106.00

VEHICLES 60.92

VEHICLES TAKEN ON LEASE 24.20

5,434.67

SHARE HOLDERS EQUITY

TOTAL ASSETS (TANGIBLE ASSETS)

=250,000,00054,34,670

=46,000,953

3.FIXED ASSETS TO LONGTERM FUNDS RATIO

FIXED ASSETS

L.T.FUNDS

FIFED ASSETS

1.GOODWILL 510

2.TRADE MARK 1.613.TECHINAL 17.27

4.LAND 128.54

5.BUILDING 1254.556.PLANT AND MACHINERY 3950.50

7.FURNITURE AND FIXTURES 106.00

8.VEHICLES 60.929.VEHICLES TAKEN ON LEASE 24.20

5,548,69

FIXED ASSETSL.T. FUNDS

=5,548,69

1390.22

=3,9912


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4.INTEREST COVER

PROFIT BEFORE INTEREST ,DEPRECIATION,AND TAX

INTEREST

=1371.84

169.00

=8.11451

5.INVENTORY RATIO

INVENTORY

CURRENT ASSETS*100

INVENTORY=945,57

CURRENT ASSETS

1. INVENTORIES 945,572. SUNDRY DRS 1322.86

3. C/B BALANCES 169.71

LOANS AND ADVANCES 460.172898.31

INVENTORY*100

CURRENT ASSETS

=945,572898.31*100

=32,6248(MILLION)


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6.FIXED ASSETS TURN OVER RATIO

SALESFIXED ASSETS

= 6567.75

4282.04

= 1,53378

7.TOTAL ASSETS TURN OVER RATIO

SALESTOTAL ASSETS

= 6567.75

7180.35

=0.91468

Documents

A Study on Modernization of Plant and Financial