CHAPTER ndash I

11 INTRODUCTION OF THE STUDY

FINANCIAL STATEMENT

A financial statement is an organized collection of data according to logical and

consistent accounting procedures Its purpose is to convey an understanding of some

financial aspects of a business firm It may show a position at a moment of time as in the

case of a balance sheet or may reveal a series of activities over a given period of time as

in the case of an income statement

Thus the term financial statement generally refers to the basis statements

i) The income statement

ii) The balance sheet

iii) A statement of retained earnings

iv) A statement of charge in financial position in addition to the above two

statement

FINANCIAL ANALYSIS

Financial analysis is performed by professionals who prepare reports using ratios

that make use of information taken from financial statements and other reports These

reports are usually presented to top management as one of their bases in making business

decisions Financial analysts can also use percentage analysis which involves reducing a

series of figures as a percentage of some base amount For example a group of items can

be expressed as a percentage of net income

When proportionate changes in the same figure over a given time period expressed

as a percentage is known as horizontal analysis Vertical or common-size analysis

reduces all items on a statement to a ldquocommon sizerdquo as a percentage of some base value

which assists in comparability with other companies of different sizes As a result all

Income Statement items are divided by Sales and all Balance Sheet items are divided by

Total Assets

1

Another method is comparative analysis This provides a better way to

determine trends Comparative analysis presents the same information for two or more

time periods and is presented side-by-side to allow for easy analysis

MEANING OF FINANCIAL ANALYSIS

It is the process of identifying the financial strength and weakness of a firm from

the available accounting data and financial statement The analysis is done by properly

establishing the relationship between the items of balance sheet and profit and loss

account the first task of financial analyst is to determine the information relevant to the

decision under consideration from the total information contained in the financial

statement

IMPORTANCE OF FINANCIAL STATEMENT ANALYSIS

1) RECORDING PAST DATA

All financial statements are essentially historically historical documents They tell

what has happened during a particular period of time However most users of financial

statements are concerned about what will happen in the future Stockholders are

concerned with future earnings and dividends Creditors are concerned with the

companys future ability to repay its debts Managers are concerned with the companys

ability to finance future expansion Despite the fact that financial statements are historical

documents they can still provide valuable information bearing on all of these concerns

2) CAREFUL SELECTION

Financial statement analysis involves careful selection of data from financial

statements for the primary purpose of forecasting the financial health of the company

This is accomplished by examining trends in key financial data comparing financial data

across companies and analyzing key financial ratios

3) CONCERNED WITH RATIOS

2

Managers are also widely concerned with the financial ratios First the ratios

provide indicators of how well the company and its business units are performing Some

of these ratios would ordinarily be used in a balanced scorecard approach The specific

ratios selected depend on the companys strategy

4) VALUABLE IN USE

Comparison of one company with another can provide valuable clues about the

financial health of an organization Unfortunately differences in accounting methods

between companies sometime makes it difficult to compare the companies financial

data Some times enough data are presented in foot notes to the financial statements to

restate data to a comparable basis

5) HELPS TO RAISE QUESTIONS

They raise may questions but they rarely answer any question by themselves In

addition to ratios other sources of data should be analyzed in order to make judgments

about the future of an organization They analyst should look at industry trends

technological changes changes in consumer tastes changes in broad economic factors

and changes with in the firm

APPLICABILITY OF FINANCIAL ANALYSIS

I TO MANAGEMENT

1) HELPFUL TO FRAME STRATEGY

Financial Analysis helps to analyze the problem and to frame the certain

strategies in order to solve them Most of the organizations are following the financial

strategy but it will differ according to its nature its aim to reduce the problem not to

eliminate the problem fully

2) REDUCES THE PERFORMANCE GAP

3

In every organization the performance gap for instance if in one year

performance will be high and in another year the performance will be low By

following the proper financial strategy the position can e analyzed easily

3) IMPROVE THE PERFORMANCE

Financial Analysis helps to improve the performance and to make the

performance further more better Financial analysis helps to fill the gap amp to act as a

preventive force for the problem Financial analysis predict the expenses and incomes

of the organization

4) FACILITATE THE PLANNING

Financial Analysis helps to plan for the future and make the company in to

the action according to the action In Financial Analysis various tools can be used

such as Ratio analysis comparative income statement and balance sheet etc

5) PREDICT THE EXPENSES AND INCOME

Financial Analysis helps to predict the expenses and income and plan

according to that Financial Analysis makes the management to reduce the expenses

and to earn the income According to the management take the few steps to increase

the performance

6) SOLVE THE PROBLEM

Financial Analysis help to predict the problem on the side of

management and investors and helps to reduce the problem Based on the problem

certain strategies are introduced Not only the management but also for the customers

and investors problem will not be increased

II TO SHARE HOLDERS

4

1) CLEAR IDEA ABOUT THE COMPANY

Financial Analysis gives the clear cut idea about the company by

specifying assets and liabilities of the concern Financial Analysis makes the

investors to think about their future and plan according to that Some times it act as a

preventive force

2) HELPS TO TAKE DECISION

By seeing the company balance sheet the general public can take decision

based on the balance sheet Some times it enables the shareholders to create the

willing ness among themselves

3) HELPS TO EARN MORE RETURNS

Financial Analysis enables the public to earn more returns For instance

when the public investing profit making company they will get additional dividends

More and more the company gets the profit the share holder will get the additional

dividends based on that

4) ENABLES BETTER UNDERSTANDING

Financial Analysis enables the public for better understanding of the

expenses and income of the concern By this public can get the clear outline about

the company and take the decision according to that

5) FIT A PROPER SOLUTION

Financial Analysis fit a proper solution to the problem of the investors For

instance if the investors need to earn more returns means they can buy the shares of

the profit making company and more returns

This studying contain following analysis

1) comparative analysis statement

2) Net Working Capital

5

3) Ratio analysis

4) Trend analysis

5) Cash Flow Statement

6) Common Size Statement

1) Comparative financial statement

Comparative financial statement is those statements which have been designed

in a way so as to provide time perspective to the consideration of various elements of

financial position embodied in such statements In these statements figures for two or

more periods are placed side by side to facilitate comparison But the

income statement and balance sheet can be prepared in the form of comparative financial

statement

i) Comparative income statement

The income statement discloses net profit or net loss on account of operations

A comparative income statement will show the absolute figures for two or more periods

The absolute change from one period to another and if desired The change in terms of

percentages Since the figures for two or more periods are shown side by side the reader

can quickly ascertain whether sales have increased or decreased whether cost of sales has

increased or decreased etc

ii) Comparative balance sheet

Comparative balance sheet as on two or more different dates can be used for

comparing assets and liabilities and finding out any increase or decrease in those items

Thus while in a single balance sheet the emphasis is on present position it is on change

in the comparative balance sheet Such a balance sheet is very useful in studying the

trends in an enterprise

2) Net Working Capital Analysis

Normally working capital refers to difference between current assets and current

liabilities of the business concern

6

Current Assets are cash bank debtors bills receivable stock prepaid

expenses advances and short term investments

Current Liabilities are sundry creditors bills payable bank overdrafts

outstanding expenses provisions proposed dividends

Net working capital statement or schedule changes in working capital is

prepared to disclose net changes in working capital

3) Ratio analysis

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information but

when expressed as a relative to some other figure it may definitely provide some

significant information the relationship between two or more accounting figuregroups is

called a financial ratio helps to express the relationship between two accounting figures

in such a way that users can draw conclusions about the performance strengths and

weakness of a firm

4) TREND ANALYSIS

Trend analysis is an important tool of horizontal financial analysis This

method plays a vital role to making a comparative study of financial statements of

several periods Trend analysis is carried out by calculating trend ratio () amp plotting the

accounting data on graph sheet

5) CASH FLOW STATEMENT

7

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

Managers are also widely concerned with the financial ratios First the ratios

provide indicators of how well the company and its business units are performing Some

of these ratios would ordinarily be used in a balanced scorecard approach The specific

ratios selected depend on the companys strategy

4) VALUABLE IN USE

Comparison of one company with another can provide valuable clues about the

financial health of an organization Unfortunately differences in accounting methods

between companies sometime makes it difficult to compare the companies financial

data Some times enough data are presented in foot notes to the financial statements to

restate data to a comparable basis

5) HELPS TO RAISE QUESTIONS

They raise may questions but they rarely answer any question by themselves In

addition to ratios other sources of data should be analyzed in order to make judgments

about the future of an organization They analyst should look at industry trends

technological changes changes in consumer tastes changes in broad economic factors

and changes with in the firm

APPLICABILITY OF FINANCIAL ANALYSIS

I TO MANAGEMENT

1) HELPFUL TO FRAME STRATEGY

Financial Analysis helps to analyze the problem and to frame the certain

strategies in order to solve them Most of the organizations are following the financial

strategy but it will differ according to its nature its aim to reduce the problem not to

eliminate the problem fully

2) REDUCES THE PERFORMANCE GAP

3

In every organization the performance gap for instance if in one year

performance will be high and in another year the performance will be low By

following the proper financial strategy the position can e analyzed easily

3) IMPROVE THE PERFORMANCE

Financial Analysis helps to improve the performance and to make the

performance further more better Financial analysis helps to fill the gap amp to act as a

preventive force for the problem Financial analysis predict the expenses and incomes

of the organization

4) FACILITATE THE PLANNING

Financial Analysis helps to plan for the future and make the company in to

the action according to the action In Financial Analysis various tools can be used

such as Ratio analysis comparative income statement and balance sheet etc

5) PREDICT THE EXPENSES AND INCOME

Financial Analysis helps to predict the expenses and income and plan

according to that Financial Analysis makes the management to reduce the expenses

and to earn the income According to the management take the few steps to increase

the performance

6) SOLVE THE PROBLEM

Financial Analysis help to predict the problem on the side of

management and investors and helps to reduce the problem Based on the problem

certain strategies are introduced Not only the management but also for the customers

and investors problem will not be increased

II TO SHARE HOLDERS

4

1) CLEAR IDEA ABOUT THE COMPANY

Financial Analysis gives the clear cut idea about the company by

specifying assets and liabilities of the concern Financial Analysis makes the

investors to think about their future and plan according to that Some times it act as a

preventive force

2) HELPS TO TAKE DECISION

By seeing the company balance sheet the general public can take decision

based on the balance sheet Some times it enables the shareholders to create the

willing ness among themselves

3) HELPS TO EARN MORE RETURNS

Financial Analysis enables the public to earn more returns For instance

when the public investing profit making company they will get additional dividends

More and more the company gets the profit the share holder will get the additional

dividends based on that

4) ENABLES BETTER UNDERSTANDING

Financial Analysis enables the public for better understanding of the

expenses and income of the concern By this public can get the clear outline about

the company and take the decision according to that

5) FIT A PROPER SOLUTION

Financial Analysis fit a proper solution to the problem of the investors For

instance if the investors need to earn more returns means they can buy the shares of

the profit making company and more returns

This studying contain following analysis

1) comparative analysis statement

2) Net Working Capital

5

3) Ratio analysis

4) Trend analysis

5) Cash Flow Statement

6) Common Size Statement

1) Comparative financial statement

Comparative financial statement is those statements which have been designed

in a way so as to provide time perspective to the consideration of various elements of

financial position embodied in such statements In these statements figures for two or

more periods are placed side by side to facilitate comparison But the

income statement and balance sheet can be prepared in the form of comparative financial

statement

i) Comparative income statement

The income statement discloses net profit or net loss on account of operations

A comparative income statement will show the absolute figures for two or more periods

The absolute change from one period to another and if desired The change in terms of

percentages Since the figures for two or more periods are shown side by side the reader

can quickly ascertain whether sales have increased or decreased whether cost of sales has

increased or decreased etc

ii) Comparative balance sheet

Comparative balance sheet as on two or more different dates can be used for

comparing assets and liabilities and finding out any increase or decrease in those items

Thus while in a single balance sheet the emphasis is on present position it is on change

in the comparative balance sheet Such a balance sheet is very useful in studying the

trends in an enterprise

2) Net Working Capital Analysis

Normally working capital refers to difference between current assets and current

liabilities of the business concern

6

Current Assets are cash bank debtors bills receivable stock prepaid

expenses advances and short term investments

Current Liabilities are sundry creditors bills payable bank overdrafts

outstanding expenses provisions proposed dividends

Net working capital statement or schedule changes in working capital is

prepared to disclose net changes in working capital

3) Ratio analysis

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information but

when expressed as a relative to some other figure it may definitely provide some

significant information the relationship between two or more accounting figuregroups is

called a financial ratio helps to express the relationship between two accounting figures

in such a way that users can draw conclusions about the performance strengths and

weakness of a firm

4) TREND ANALYSIS

Trend analysis is an important tool of horizontal financial analysis This

method plays a vital role to making a comparative study of financial statements of

several periods Trend analysis is carried out by calculating trend ratio () amp plotting the

accounting data on graph sheet

5) CASH FLOW STATEMENT

7

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

In every organization the performance gap for instance if in one year

performance will be high and in another year the performance will be low By

following the proper financial strategy the position can e analyzed easily

3) IMPROVE THE PERFORMANCE

Financial Analysis helps to improve the performance and to make the

performance further more better Financial analysis helps to fill the gap amp to act as a

preventive force for the problem Financial analysis predict the expenses and incomes

of the organization

4) FACILITATE THE PLANNING

Financial Analysis helps to plan for the future and make the company in to

the action according to the action In Financial Analysis various tools can be used

such as Ratio analysis comparative income statement and balance sheet etc

5) PREDICT THE EXPENSES AND INCOME

Financial Analysis helps to predict the expenses and income and plan

according to that Financial Analysis makes the management to reduce the expenses

and to earn the income According to the management take the few steps to increase

the performance

6) SOLVE THE PROBLEM

Financial Analysis help to predict the problem on the side of

management and investors and helps to reduce the problem Based on the problem

certain strategies are introduced Not only the management but also for the customers

and investors problem will not be increased

II TO SHARE HOLDERS

4

1) CLEAR IDEA ABOUT THE COMPANY

Financial Analysis gives the clear cut idea about the company by

specifying assets and liabilities of the concern Financial Analysis makes the

investors to think about their future and plan according to that Some times it act as a

preventive force

2) HELPS TO TAKE DECISION

By seeing the company balance sheet the general public can take decision

based on the balance sheet Some times it enables the shareholders to create the

willing ness among themselves

3) HELPS TO EARN MORE RETURNS

Financial Analysis enables the public to earn more returns For instance

when the public investing profit making company they will get additional dividends

More and more the company gets the profit the share holder will get the additional

dividends based on that

4) ENABLES BETTER UNDERSTANDING

Financial Analysis enables the public for better understanding of the

expenses and income of the concern By this public can get the clear outline about

the company and take the decision according to that

5) FIT A PROPER SOLUTION

Financial Analysis fit a proper solution to the problem of the investors For

instance if the investors need to earn more returns means they can buy the shares of

the profit making company and more returns

This studying contain following analysis

1) comparative analysis statement

2) Net Working Capital

5

3) Ratio analysis

4) Trend analysis

5) Cash Flow Statement

6) Common Size Statement

1) Comparative financial statement

Comparative financial statement is those statements which have been designed

in a way so as to provide time perspective to the consideration of various elements of

financial position embodied in such statements In these statements figures for two or

more periods are placed side by side to facilitate comparison But the

income statement and balance sheet can be prepared in the form of comparative financial

statement

i) Comparative income statement

The income statement discloses net profit or net loss on account of operations

A comparative income statement will show the absolute figures for two or more periods

The absolute change from one period to another and if desired The change in terms of

percentages Since the figures for two or more periods are shown side by side the reader

can quickly ascertain whether sales have increased or decreased whether cost of sales has

increased or decreased etc

ii) Comparative balance sheet

Comparative balance sheet as on two or more different dates can be used for

comparing assets and liabilities and finding out any increase or decrease in those items

Thus while in a single balance sheet the emphasis is on present position it is on change

in the comparative balance sheet Such a balance sheet is very useful in studying the

trends in an enterprise

2) Net Working Capital Analysis

Normally working capital refers to difference between current assets and current

liabilities of the business concern

6

Current Assets are cash bank debtors bills receivable stock prepaid

expenses advances and short term investments

Current Liabilities are sundry creditors bills payable bank overdrafts

outstanding expenses provisions proposed dividends

Net working capital statement or schedule changes in working capital is

prepared to disclose net changes in working capital

3) Ratio analysis

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information but

when expressed as a relative to some other figure it may definitely provide some

significant information the relationship between two or more accounting figuregroups is

called a financial ratio helps to express the relationship between two accounting figures

in such a way that users can draw conclusions about the performance strengths and

weakness of a firm

4) TREND ANALYSIS

Trend analysis is an important tool of horizontal financial analysis This

method plays a vital role to making a comparative study of financial statements of

several periods Trend analysis is carried out by calculating trend ratio () amp plotting the

accounting data on graph sheet

5) CASH FLOW STATEMENT

7

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

1) CLEAR IDEA ABOUT THE COMPANY

Financial Analysis gives the clear cut idea about the company by

specifying assets and liabilities of the concern Financial Analysis makes the

investors to think about their future and plan according to that Some times it act as a

preventive force

2) HELPS TO TAKE DECISION

By seeing the company balance sheet the general public can take decision

based on the balance sheet Some times it enables the shareholders to create the

willing ness among themselves

3) HELPS TO EARN MORE RETURNS

Financial Analysis enables the public to earn more returns For instance

when the public investing profit making company they will get additional dividends

More and more the company gets the profit the share holder will get the additional

dividends based on that

4) ENABLES BETTER UNDERSTANDING

Financial Analysis enables the public for better understanding of the

expenses and income of the concern By this public can get the clear outline about

the company and take the decision according to that

5) FIT A PROPER SOLUTION

Financial Analysis fit a proper solution to the problem of the investors For

instance if the investors need to earn more returns means they can buy the shares of

the profit making company and more returns

This studying contain following analysis

1) comparative analysis statement

2) Net Working Capital

5

3) Ratio analysis

4) Trend analysis

5) Cash Flow Statement

6) Common Size Statement

1) Comparative financial statement

Comparative financial statement is those statements which have been designed

in a way so as to provide time perspective to the consideration of various elements of

financial position embodied in such statements In these statements figures for two or

more periods are placed side by side to facilitate comparison But the

income statement and balance sheet can be prepared in the form of comparative financial

statement

i) Comparative income statement

The income statement discloses net profit or net loss on account of operations

A comparative income statement will show the absolute figures for two or more periods

The absolute change from one period to another and if desired The change in terms of

percentages Since the figures for two or more periods are shown side by side the reader

can quickly ascertain whether sales have increased or decreased whether cost of sales has

increased or decreased etc

ii) Comparative balance sheet

Comparative balance sheet as on two or more different dates can be used for

comparing assets and liabilities and finding out any increase or decrease in those items

Thus while in a single balance sheet the emphasis is on present position it is on change

in the comparative balance sheet Such a balance sheet is very useful in studying the

trends in an enterprise

2) Net Working Capital Analysis

Normally working capital refers to difference between current assets and current

liabilities of the business concern

6

Current Assets are cash bank debtors bills receivable stock prepaid

expenses advances and short term investments

Current Liabilities are sundry creditors bills payable bank overdrafts

outstanding expenses provisions proposed dividends

Net working capital statement or schedule changes in working capital is

prepared to disclose net changes in working capital

3) Ratio analysis

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information but

when expressed as a relative to some other figure it may definitely provide some

significant information the relationship between two or more accounting figuregroups is

called a financial ratio helps to express the relationship between two accounting figures

in such a way that users can draw conclusions about the performance strengths and

weakness of a firm

4) TREND ANALYSIS

Trend analysis is an important tool of horizontal financial analysis This

method plays a vital role to making a comparative study of financial statements of

several periods Trend analysis is carried out by calculating trend ratio () amp plotting the

accounting data on graph sheet

5) CASH FLOW STATEMENT

7

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

3) Ratio analysis

4) Trend analysis

5) Cash Flow Statement

6) Common Size Statement

1) Comparative financial statement

Comparative financial statement is those statements which have been designed

in a way so as to provide time perspective to the consideration of various elements of

financial position embodied in such statements In these statements figures for two or

more periods are placed side by side to facilitate comparison But the

income statement and balance sheet can be prepared in the form of comparative financial

statement

i) Comparative income statement

The income statement discloses net profit or net loss on account of operations

A comparative income statement will show the absolute figures for two or more periods

The absolute change from one period to another and if desired The change in terms of

percentages Since the figures for two or more periods are shown side by side the reader

can quickly ascertain whether sales have increased or decreased whether cost of sales has

increased or decreased etc

ii) Comparative balance sheet

Comparative balance sheet as on two or more different dates can be used for

comparing assets and liabilities and finding out any increase or decrease in those items

Thus while in a single balance sheet the emphasis is on present position it is on change

in the comparative balance sheet Such a balance sheet is very useful in studying the

trends in an enterprise

2) Net Working Capital Analysis

Normally working capital refers to difference between current assets and current

liabilities of the business concern

6

Current Assets are cash bank debtors bills receivable stock prepaid

expenses advances and short term investments

Current Liabilities are sundry creditors bills payable bank overdrafts

outstanding expenses provisions proposed dividends

Net working capital statement or schedule changes in working capital is

prepared to disclose net changes in working capital

3) Ratio analysis

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information but

when expressed as a relative to some other figure it may definitely provide some

significant information the relationship between two or more accounting figuregroups is

called a financial ratio helps to express the relationship between two accounting figures

in such a way that users can draw conclusions about the performance strengths and

weakness of a firm

4) TREND ANALYSIS

Trend analysis is an important tool of horizontal financial analysis This

method plays a vital role to making a comparative study of financial statements of

several periods Trend analysis is carried out by calculating trend ratio () amp plotting the

accounting data on graph sheet

5) CASH FLOW STATEMENT

7

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

Current Assets are cash bank debtors bills receivable stock prepaid

expenses advances and short term investments

Current Liabilities are sundry creditors bills payable bank overdrafts

outstanding expenses provisions proposed dividends

Net working capital statement or schedule changes in working capital is

prepared to disclose net changes in working capital

3) Ratio analysis

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information but

when expressed as a relative to some other figure it may definitely provide some

significant information the relationship between two or more accounting figuregroups is

called a financial ratio helps to express the relationship between two accounting figures

in such a way that users can draw conclusions about the performance strengths and

weakness of a firm

4) TREND ANALYSIS

Trend analysis is an important tool of horizontal financial analysis This

method plays a vital role to making a comparative study of financial statements of

several periods Trend analysis is carried out by calculating trend ratio () amp plotting the

accounting data on graph sheet

5) CASH FLOW STATEMENT

7

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

In financial accounting a cash flow statement also known as statement of cash

flows or funds flow statement is a financial statement that shows how changes in balance

sheet accounts and income affect cash and cash equivalents and breaks the analysis down

to operating investing and financing activities Essentially the cash flow statement is

concerned with the flow of cash in and cash out of the business The statement captures

both the current operating results and the accompanying changes in the balance sheet[1]

As an analytical tool the statement of cash flows is useful in determining the short-term

viability of a company particularly its ability to pay bills International Accounting

Standard 7 (IAS 7) is the Indian Accounting Standard that deals with cash flow

statements

6) COMMON SIZE STATEMENT

A financial statement that has variables expressed in percentages rather than in

dollar amounts For example items on an income statement are shown as a percentage of

revenue or sales and balance sheet entries are displayed as a percentage of total assets

Common-size statements are used primarily for comparative purposes so that firms of

various sizes can be equated Also called one hundred percent statement

ADVANTAGES OF FINANCIAL STATEMENT ANALYSIS

1) Financial statement analysis of firms presents you an intuition on how

the corporation is conducting its program For stockholders who are interested in

finding out whether the management is properly utilizing the corporationrsquos resources

to create shareholder wealth a financial analysis of a corporation will be able to

help investors come to proper decision

2) Viability of a project can be found out through a financial statement

analysis which can be performed by financial analysts employed by the firm Projects

that would bring in the maximum amount of revenues over the course of time over

similar projects are recommended by financial analysts to the management

8

3) Expected returns from projects are provided by financial analysts to the

management Analysts employed by the business can also give the management

suggestions on whether to issue new stocks or borrow money to fund new projects

4) Financial analysts will recommend whether a new project should be undertaken

or invest the money somewhere else essentially performing capital budgeting

decisions

5) Financial analysts who advice to their employers on what stocks might be a

good buy these recommendations are usually private and only available within

the company A corporationrsquos stock price can be affected based on a financial analyst

recommendations as these recommendations are used by stockholders to determine

whether it is a good investment

DISADVANTAGES OF FINANCIAL ANALYSIS

1) There are three main financial statements investors analyze They are the

balance sheet income statement and the cash flow statement The balance sheet is a

snapshot in time It shows all the assets owned and liabilities owed for a company

2) It also shows the amount of equity or ownership that is paid for by investors

The income statement looks at the entire year It starts with revenues and then

deducts expenses for net income

3) The cash flow statement shows where the cash is really coming by breaking

down cash flow into cash from operations investing and financing There are

advantages and disadvantages to analyzing financial statements for investment

decisions

4) While financial statements are good for the data needed to conduct a thorough

ratio analysis they are based on the accrual system of accounting which is not

market based This is both an advantage and a disadvantage

9

12COMPANY PROFILE

COMPANY PROFILE

ldquoTO BE IN BUSINESS ONE HAS TO DO BEYOND BUSINESShelliphelliphelliprdquo

Every economy needs a thought leader to sensitize its citizen to issues trend

opportunities and to stimulate them towards positive action For over 40 years the SPIC

group has been doing just that It has shown countless Indian the way to better life by

engaging in business which held immense potential not only for the company but also the

country and the common good

In the early days of independences when most of India moved on two wheels of

bicycle and manufacturing sector was still in its infancy The group started manufacturing

Lambert scooter in collaboration with innocent Italy bringing in a revolution and

changed the face of urban transport in the country

It is believed the business philosophy that ldquoA business venture is worthwhile only

if it serves the interest of common manrdquo

SPIC played a pivotal role in ushering the Green Revolution at critical moment

when India was looking for self sufficiency in food It contributed to the growth of

Nationlsquos core sector of agriculture

As the group consolidated its principal business of fertilizer it has also successful

diversified in to following

- Chemical

- Petrochemical

- Bio-technology

- Agri-business

SPIC with its overpowering sense of vision a focus on building infrastructure a

culture of innovation sprit of partnership and the most important of all the human touch

has changed the lives of million

ldquoSUCCESS COMES TO THOSE WHO DRE TO DREAMhelliphellip

10

A Tribute to the Founder

Late DRMA CHIDAMBARAMrsquos dream of contributing to the growth of the

Nations core sector - agriculture and improving the life of the farmer resulted in the

creation of a vibrant organization ndash SOTHERN PETROCHEMICAL INDUSTRIES

CORPORATION LIMITED (SPIC) in 1969 He set up a giant fertilizers complex at

Tuticorin and as its founder Chairman he put SPIC firmly on the path to becoming a

leader in fertilizer business The Rs5000 core (US $ 1 billion) SPIC Group with a

shareholders base of over 90000 has emerged as a front ranking industrial conglomerate

in India This is so courtesy its professional management led by Chairman and

comprising Spicrsquos Working Directors

Present chairman emeritus Dr AC Muthiah son of Dr MA Chidambaram who had

chartered the grouprsquos growth propelled it into becoming a leading industrial

conglomerate in India and a major player in agriculture the nationrsquos core sector with

significant presence also in chemicals petrochemicals Agri-business amp life-sciences

DrACMuthiah is a member of the Tamil Nadu planning commission

representing the industry(2012) He is presently the chairman of the Indian institute of

management (IIM)-Kozhikode He was the president of the federation of Indian chambers

of Indian chambers of commerce amp industry (FICCI) in its platinum jubilee year (2003)

DrACMuthiah is keen sports enthusiast

He was the president of the board of control for cricket in India (BCCI) during

1999-2000 He was also a member of the executive board of the international cricket

club London during the above period

Ashwin C Muthiah son of Dr AC Muthiah took over as chairman of SPIC

Limited on 16th November 2011 With his vast experience and business acumen the

group is on its way to attaining greater glory under his leadership

11

SPIC was incorporated on 18TH December in the year 1969 as a joint sector by

DrMA Chidambaram (Founder-Chairman SPIC) and associated and Tamilnadu

industrial Development Corporation Limited (TIDCO) a state development institute for

manufacturing Nitrogenous and phosphoric fertilizers Presently the company renowned

brands are

Urea

Di-ammonium phosphate(DAP)

Complex fertilizers 2020013

Gypsum

Sulphuric acid

Phosphoric acid

Aluminum fluoride

Vision

To attain leadership in fertilizers Petrochemical Biotechnology through and change

management

Mission

To achieve corporate excellence in our business by offering quality products and services

created and made available by an empowered workforce that is guided by durable values

reflecting an abiding concern for stake holderrsquos interest

12

Technology and Capacity

Plant Product capacity(MTPA)

Technical collaboration

Urea 660400 TOYO ENGINEERING CORPORATION JAPAN

Complex fertilizers

660100 HITACHI ZOSEN JAPAN KREBSFRANCE

Ammonia 35200 DAVY McKEYUK

Sulphuric acid 192000 HITACHI ZOSEN JAPAN Phosphoric acid 112000 HITACHI ZOSEN JAPANAluminum fluoride

3500 ALSEA ALUSSUISSESWITZERLAND

OTHER INTEREST

SPICrsquos Associate Companies

Tamilnadu Petroproducts Limited

Tamilnadu Petroproducts Limited (TPL) a corporate star was born in the year 1984 with

the objective of setting up a 50000 MTA Linear Alkyl Benzene (LAB) project TPL has

since imprinted winning hall marks successively over the years in Corporate India and

the Petrochemical Industry in Particular Over more than a decade TPL grew in strength

thinking differently harnessing the resources by laying a fundamental platform for

financial strength and responding to customers innovatively by bringing in new products

and services

TPL has surged ahead with laurels for a challenging amp promising future carrying the

business commitment of the parameters Ms SPIC Limited who have diverse interest in

fertilizers petrochemicals and other services and Tamilnadu Industrial Development

Corporation Limited (TIDCO)a state Govt enterprise With prime interest in promoting

industries in the State of Tamilnadu SPIC its boasts of a turnover close to US $800

billion and has been the principal force in TPL achieving corporate leadership in

detergent business

13

The LAB plant is located in the Manali Industrial Belt25 KMS away from Chennai City

The various infrastructure facilities at Manali The advantages of a metropolitan city hi-

tech communication interface and cosmopolitan culture synergies with the vision of

promoters business plans

TPL continues to march ahead excellent track record and its achievements in a short time

frame stand out distinctly propelled by continuous up gradation of technology Quality

human resource and utmost customer satisfaction TPLrsquos total turnover for 2010 was

Rs97469 crores and it increased in 2011 to Rs118462 crores

Manali Petrochemicals Limited (MPL)

Manali Petrochemicals Ltd(MPL) is a leader in the production and marketing of

Propylene Oxide Propylene Glycols and Polysols in India Located at Manali in Chennai

India MPL is engaged in the manufacturer of the above Petrochemical products The

company operates two grass root production facilities at Manali to manufacture

Propylene Oxide(PO)Propylene Glycol(PG) and Polysols It markets its Polysols with

Isocyanates sourced indigenously as well as imported from Japan and China and the pre-

polymers produced at MPL in meeting the demand of polyurethane industry in India

MPL Total turnover of 2010 is Rs42125 crores and its was increased 2011 is Rs49763

crores

SPEL Semi Conductor Limited (SPEL)

SPEL Semi Conductor is Indias first amp only Semiconductor IC Assembly amp Test facility

SPEL pioneered the Outsourced Semiconductor Assembly amp Test Services (OSAT)

market in india and continues to steadily do so SPEL is a trusted amp Strategic contract

manufacturing partner for many of the worlds leading Semiconductor companies

14

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

12COMPANY PROFILE

COMPANY PROFILE

ldquoTO BE IN BUSINESS ONE HAS TO DO BEYOND BUSINESShelliphelliphelliprdquo

Every economy needs a thought leader to sensitize its citizen to issues trend

opportunities and to stimulate them towards positive action For over 40 years the SPIC

group has been doing just that It has shown countless Indian the way to better life by

engaging in business which held immense potential not only for the company but also the

country and the common good

In the early days of independences when most of India moved on two wheels of

bicycle and manufacturing sector was still in its infancy The group started manufacturing

Lambert scooter in collaboration with innocent Italy bringing in a revolution and

changed the face of urban transport in the country

It is believed the business philosophy that ldquoA business venture is worthwhile only

if it serves the interest of common manrdquo

SPIC played a pivotal role in ushering the Green Revolution at critical moment

when India was looking for self sufficiency in food It contributed to the growth of

Nationlsquos core sector of agriculture

As the group consolidated its principal business of fertilizer it has also successful

diversified in to following

- Chemical

- Petrochemical

- Bio-technology

- Agri-business

SPIC with its overpowering sense of vision a focus on building infrastructure a

culture of innovation sprit of partnership and the most important of all the human touch

has changed the lives of million

ldquoSUCCESS COMES TO THOSE WHO DRE TO DREAMhelliphellip

10

A Tribute to the Founder

Late DRMA CHIDAMBARAMrsquos dream of contributing to the growth of the

Nations core sector - agriculture and improving the life of the farmer resulted in the

creation of a vibrant organization ndash SOTHERN PETROCHEMICAL INDUSTRIES

CORPORATION LIMITED (SPIC) in 1969 He set up a giant fertilizers complex at

Tuticorin and as its founder Chairman he put SPIC firmly on the path to becoming a

leader in fertilizer business The Rs5000 core (US $ 1 billion) SPIC Group with a

shareholders base of over 90000 has emerged as a front ranking industrial conglomerate

in India This is so courtesy its professional management led by Chairman and

comprising Spicrsquos Working Directors

Present chairman emeritus Dr AC Muthiah son of Dr MA Chidambaram who had

chartered the grouprsquos growth propelled it into becoming a leading industrial

conglomerate in India and a major player in agriculture the nationrsquos core sector with

significant presence also in chemicals petrochemicals Agri-business amp life-sciences

DrACMuthiah is a member of the Tamil Nadu planning commission

representing the industry(2012) He is presently the chairman of the Indian institute of

management (IIM)-Kozhikode He was the president of the federation of Indian chambers

of Indian chambers of commerce amp industry (FICCI) in its platinum jubilee year (2003)

DrACMuthiah is keen sports enthusiast

He was the president of the board of control for cricket in India (BCCI) during

1999-2000 He was also a member of the executive board of the international cricket

club London during the above period

Ashwin C Muthiah son of Dr AC Muthiah took over as chairman of SPIC

Limited on 16th November 2011 With his vast experience and business acumen the

group is on its way to attaining greater glory under his leadership

11

SPIC was incorporated on 18TH December in the year 1969 as a joint sector by

DrMA Chidambaram (Founder-Chairman SPIC) and associated and Tamilnadu

industrial Development Corporation Limited (TIDCO) a state development institute for

manufacturing Nitrogenous and phosphoric fertilizers Presently the company renowned

brands are

Urea

Di-ammonium phosphate(DAP)

Complex fertilizers 2020013

Gypsum

Sulphuric acid

Phosphoric acid

Aluminum fluoride

Vision

To attain leadership in fertilizers Petrochemical Biotechnology through and change

management

Mission

To achieve corporate excellence in our business by offering quality products and services

created and made available by an empowered workforce that is guided by durable values

reflecting an abiding concern for stake holderrsquos interest

12

Technology and Capacity

Plant Product capacity(MTPA)

Technical collaboration

Urea 660400 TOYO ENGINEERING CORPORATION JAPAN

Complex fertilizers

660100 HITACHI ZOSEN JAPAN KREBSFRANCE

Ammonia 35200 DAVY McKEYUK

Sulphuric acid 192000 HITACHI ZOSEN JAPAN Phosphoric acid 112000 HITACHI ZOSEN JAPANAluminum fluoride

3500 ALSEA ALUSSUISSESWITZERLAND

OTHER INTEREST

SPICrsquos Associate Companies

Tamilnadu Petroproducts Limited

Tamilnadu Petroproducts Limited (TPL) a corporate star was born in the year 1984 with

the objective of setting up a 50000 MTA Linear Alkyl Benzene (LAB) project TPL has

since imprinted winning hall marks successively over the years in Corporate India and

the Petrochemical Industry in Particular Over more than a decade TPL grew in strength

thinking differently harnessing the resources by laying a fundamental platform for

financial strength and responding to customers innovatively by bringing in new products

and services

TPL has surged ahead with laurels for a challenging amp promising future carrying the

business commitment of the parameters Ms SPIC Limited who have diverse interest in

fertilizers petrochemicals and other services and Tamilnadu Industrial Development

Corporation Limited (TIDCO)a state Govt enterprise With prime interest in promoting

industries in the State of Tamilnadu SPIC its boasts of a turnover close to US $800

billion and has been the principal force in TPL achieving corporate leadership in

detergent business

13

The LAB plant is located in the Manali Industrial Belt25 KMS away from Chennai City

The various infrastructure facilities at Manali The advantages of a metropolitan city hi-

tech communication interface and cosmopolitan culture synergies with the vision of

promoters business plans

TPL continues to march ahead excellent track record and its achievements in a short time

frame stand out distinctly propelled by continuous up gradation of technology Quality

human resource and utmost customer satisfaction TPLrsquos total turnover for 2010 was

Rs97469 crores and it increased in 2011 to Rs118462 crores

Manali Petrochemicals Limited (MPL)

Manali Petrochemicals Ltd(MPL) is a leader in the production and marketing of

Propylene Oxide Propylene Glycols and Polysols in India Located at Manali in Chennai

India MPL is engaged in the manufacturer of the above Petrochemical products The

company operates two grass root production facilities at Manali to manufacture

Propylene Oxide(PO)Propylene Glycol(PG) and Polysols It markets its Polysols with

Isocyanates sourced indigenously as well as imported from Japan and China and the pre-

polymers produced at MPL in meeting the demand of polyurethane industry in India

MPL Total turnover of 2010 is Rs42125 crores and its was increased 2011 is Rs49763

crores

SPEL Semi Conductor Limited (SPEL)

SPEL Semi Conductor is Indias first amp only Semiconductor IC Assembly amp Test facility

SPEL pioneered the Outsourced Semiconductor Assembly amp Test Services (OSAT)

market in india and continues to steadily do so SPEL is a trusted amp Strategic contract

manufacturing partner for many of the worlds leading Semiconductor companies

14

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

A Tribute to the Founder

Late DRMA CHIDAMBARAMrsquos dream of contributing to the growth of the

Nations core sector - agriculture and improving the life of the farmer resulted in the

creation of a vibrant organization ndash SOTHERN PETROCHEMICAL INDUSTRIES

CORPORATION LIMITED (SPIC) in 1969 He set up a giant fertilizers complex at

Tuticorin and as its founder Chairman he put SPIC firmly on the path to becoming a

leader in fertilizer business The Rs5000 core (US $ 1 billion) SPIC Group with a

shareholders base of over 90000 has emerged as a front ranking industrial conglomerate

in India This is so courtesy its professional management led by Chairman and

comprising Spicrsquos Working Directors

Present chairman emeritus Dr AC Muthiah son of Dr MA Chidambaram who had

chartered the grouprsquos growth propelled it into becoming a leading industrial

conglomerate in India and a major player in agriculture the nationrsquos core sector with

significant presence also in chemicals petrochemicals Agri-business amp life-sciences

DrACMuthiah is a member of the Tamil Nadu planning commission

representing the industry(2012) He is presently the chairman of the Indian institute of

management (IIM)-Kozhikode He was the president of the federation of Indian chambers

of Indian chambers of commerce amp industry (FICCI) in its platinum jubilee year (2003)

DrACMuthiah is keen sports enthusiast

He was the president of the board of control for cricket in India (BCCI) during

1999-2000 He was also a member of the executive board of the international cricket

club London during the above period

Ashwin C Muthiah son of Dr AC Muthiah took over as chairman of SPIC

Limited on 16th November 2011 With his vast experience and business acumen the

group is on its way to attaining greater glory under his leadership

11

SPIC was incorporated on 18TH December in the year 1969 as a joint sector by

DrMA Chidambaram (Founder-Chairman SPIC) and associated and Tamilnadu

industrial Development Corporation Limited (TIDCO) a state development institute for

manufacturing Nitrogenous and phosphoric fertilizers Presently the company renowned

brands are

Urea

Di-ammonium phosphate(DAP)

Complex fertilizers 2020013

Gypsum

Sulphuric acid

Phosphoric acid

Aluminum fluoride

Vision

To attain leadership in fertilizers Petrochemical Biotechnology through and change

management

Mission

To achieve corporate excellence in our business by offering quality products and services

created and made available by an empowered workforce that is guided by durable values

reflecting an abiding concern for stake holderrsquos interest

12

Technology and Capacity

Plant Product capacity(MTPA)

Technical collaboration

Urea 660400 TOYO ENGINEERING CORPORATION JAPAN

Complex fertilizers

660100 HITACHI ZOSEN JAPAN KREBSFRANCE

Ammonia 35200 DAVY McKEYUK

Sulphuric acid 192000 HITACHI ZOSEN JAPAN Phosphoric acid 112000 HITACHI ZOSEN JAPANAluminum fluoride

3500 ALSEA ALUSSUISSESWITZERLAND

OTHER INTEREST

SPICrsquos Associate Companies

Tamilnadu Petroproducts Limited

Tamilnadu Petroproducts Limited (TPL) a corporate star was born in the year 1984 with

the objective of setting up a 50000 MTA Linear Alkyl Benzene (LAB) project TPL has

since imprinted winning hall marks successively over the years in Corporate India and

the Petrochemical Industry in Particular Over more than a decade TPL grew in strength

thinking differently harnessing the resources by laying a fundamental platform for

financial strength and responding to customers innovatively by bringing in new products

and services

TPL has surged ahead with laurels for a challenging amp promising future carrying the

business commitment of the parameters Ms SPIC Limited who have diverse interest in

fertilizers petrochemicals and other services and Tamilnadu Industrial Development

Corporation Limited (TIDCO)a state Govt enterprise With prime interest in promoting

industries in the State of Tamilnadu SPIC its boasts of a turnover close to US $800

billion and has been the principal force in TPL achieving corporate leadership in

detergent business

13

The LAB plant is located in the Manali Industrial Belt25 KMS away from Chennai City

The various infrastructure facilities at Manali The advantages of a metropolitan city hi-

tech communication interface and cosmopolitan culture synergies with the vision of

promoters business plans

TPL continues to march ahead excellent track record and its achievements in a short time

frame stand out distinctly propelled by continuous up gradation of technology Quality

human resource and utmost customer satisfaction TPLrsquos total turnover for 2010 was

Rs97469 crores and it increased in 2011 to Rs118462 crores

Manali Petrochemicals Limited (MPL)

Manali Petrochemicals Ltd(MPL) is a leader in the production and marketing of

Propylene Oxide Propylene Glycols and Polysols in India Located at Manali in Chennai

India MPL is engaged in the manufacturer of the above Petrochemical products The

company operates two grass root production facilities at Manali to manufacture

Propylene Oxide(PO)Propylene Glycol(PG) and Polysols It markets its Polysols with

Isocyanates sourced indigenously as well as imported from Japan and China and the pre-

polymers produced at MPL in meeting the demand of polyurethane industry in India

MPL Total turnover of 2010 is Rs42125 crores and its was increased 2011 is Rs49763

crores

SPEL Semi Conductor Limited (SPEL)

SPEL Semi Conductor is Indias first amp only Semiconductor IC Assembly amp Test facility

SPEL pioneered the Outsourced Semiconductor Assembly amp Test Services (OSAT)

market in india and continues to steadily do so SPEL is a trusted amp Strategic contract

manufacturing partner for many of the worlds leading Semiconductor companies

14

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

SPIC was incorporated on 18TH December in the year 1969 as a joint sector by

DrMA Chidambaram (Founder-Chairman SPIC) and associated and Tamilnadu

industrial Development Corporation Limited (TIDCO) a state development institute for

manufacturing Nitrogenous and phosphoric fertilizers Presently the company renowned

brands are

Urea

Di-ammonium phosphate(DAP)

Complex fertilizers 2020013

Gypsum

Sulphuric acid

Phosphoric acid

Aluminum fluoride

Vision

To attain leadership in fertilizers Petrochemical Biotechnology through and change

management

Mission

To achieve corporate excellence in our business by offering quality products and services

created and made available by an empowered workforce that is guided by durable values

reflecting an abiding concern for stake holderrsquos interest

12

Technology and Capacity

Plant Product capacity(MTPA)

Technical collaboration

Urea 660400 TOYO ENGINEERING CORPORATION JAPAN

Complex fertilizers

660100 HITACHI ZOSEN JAPAN KREBSFRANCE

Ammonia 35200 DAVY McKEYUK

Sulphuric acid 192000 HITACHI ZOSEN JAPAN Phosphoric acid 112000 HITACHI ZOSEN JAPANAluminum fluoride

3500 ALSEA ALUSSUISSESWITZERLAND

OTHER INTEREST

SPICrsquos Associate Companies

Tamilnadu Petroproducts Limited

Tamilnadu Petroproducts Limited (TPL) a corporate star was born in the year 1984 with

the objective of setting up a 50000 MTA Linear Alkyl Benzene (LAB) project TPL has

since imprinted winning hall marks successively over the years in Corporate India and

the Petrochemical Industry in Particular Over more than a decade TPL grew in strength

thinking differently harnessing the resources by laying a fundamental platform for

financial strength and responding to customers innovatively by bringing in new products

and services

TPL has surged ahead with laurels for a challenging amp promising future carrying the

business commitment of the parameters Ms SPIC Limited who have diverse interest in

fertilizers petrochemicals and other services and Tamilnadu Industrial Development

Corporation Limited (TIDCO)a state Govt enterprise With prime interest in promoting

industries in the State of Tamilnadu SPIC its boasts of a turnover close to US $800

billion and has been the principal force in TPL achieving corporate leadership in

detergent business

13

The LAB plant is located in the Manali Industrial Belt25 KMS away from Chennai City

The various infrastructure facilities at Manali The advantages of a metropolitan city hi-

tech communication interface and cosmopolitan culture synergies with the vision of

promoters business plans

TPL continues to march ahead excellent track record and its achievements in a short time

frame stand out distinctly propelled by continuous up gradation of technology Quality

human resource and utmost customer satisfaction TPLrsquos total turnover for 2010 was

Rs97469 crores and it increased in 2011 to Rs118462 crores

Manali Petrochemicals Limited (MPL)

Manali Petrochemicals Ltd(MPL) is a leader in the production and marketing of

Propylene Oxide Propylene Glycols and Polysols in India Located at Manali in Chennai

India MPL is engaged in the manufacturer of the above Petrochemical products The

company operates two grass root production facilities at Manali to manufacture

Propylene Oxide(PO)Propylene Glycol(PG) and Polysols It markets its Polysols with

Isocyanates sourced indigenously as well as imported from Japan and China and the pre-

polymers produced at MPL in meeting the demand of polyurethane industry in India

MPL Total turnover of 2010 is Rs42125 crores and its was increased 2011 is Rs49763

crores

SPEL Semi Conductor Limited (SPEL)

SPEL Semi Conductor is Indias first amp only Semiconductor IC Assembly amp Test facility

SPEL pioneered the Outsourced Semiconductor Assembly amp Test Services (OSAT)

market in india and continues to steadily do so SPEL is a trusted amp Strategic contract

manufacturing partner for many of the worlds leading Semiconductor companies

14

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

Technology and Capacity

Plant Product capacity(MTPA)

Technical collaboration

Urea 660400 TOYO ENGINEERING CORPORATION JAPAN

Complex fertilizers

660100 HITACHI ZOSEN JAPAN KREBSFRANCE

Ammonia 35200 DAVY McKEYUK

Sulphuric acid 192000 HITACHI ZOSEN JAPAN Phosphoric acid 112000 HITACHI ZOSEN JAPANAluminum fluoride

3500 ALSEA ALUSSUISSESWITZERLAND

OTHER INTEREST

SPICrsquos Associate Companies

Tamilnadu Petroproducts Limited

Tamilnadu Petroproducts Limited (TPL) a corporate star was born in the year 1984 with

the objective of setting up a 50000 MTA Linear Alkyl Benzene (LAB) project TPL has

since imprinted winning hall marks successively over the years in Corporate India and

the Petrochemical Industry in Particular Over more than a decade TPL grew in strength

thinking differently harnessing the resources by laying a fundamental platform for

financial strength and responding to customers innovatively by bringing in new products

and services

TPL has surged ahead with laurels for a challenging amp promising future carrying the

business commitment of the parameters Ms SPIC Limited who have diverse interest in

fertilizers petrochemicals and other services and Tamilnadu Industrial Development

Corporation Limited (TIDCO)a state Govt enterprise With prime interest in promoting

industries in the State of Tamilnadu SPIC its boasts of a turnover close to US $800

billion and has been the principal force in TPL achieving corporate leadership in

detergent business

13

The LAB plant is located in the Manali Industrial Belt25 KMS away from Chennai City

The various infrastructure facilities at Manali The advantages of a metropolitan city hi-

tech communication interface and cosmopolitan culture synergies with the vision of

promoters business plans

TPL continues to march ahead excellent track record and its achievements in a short time

frame stand out distinctly propelled by continuous up gradation of technology Quality

human resource and utmost customer satisfaction TPLrsquos total turnover for 2010 was

Rs97469 crores and it increased in 2011 to Rs118462 crores

Manali Petrochemicals Limited (MPL)

Manali Petrochemicals Ltd(MPL) is a leader in the production and marketing of

Propylene Oxide Propylene Glycols and Polysols in India Located at Manali in Chennai

India MPL is engaged in the manufacturer of the above Petrochemical products The

company operates two grass root production facilities at Manali to manufacture

Propylene Oxide(PO)Propylene Glycol(PG) and Polysols It markets its Polysols with

Isocyanates sourced indigenously as well as imported from Japan and China and the pre-

polymers produced at MPL in meeting the demand of polyurethane industry in India

MPL Total turnover of 2010 is Rs42125 crores and its was increased 2011 is Rs49763

crores

SPEL Semi Conductor Limited (SPEL)

SPEL Semi Conductor is Indias first amp only Semiconductor IC Assembly amp Test facility

SPEL pioneered the Outsourced Semiconductor Assembly amp Test Services (OSAT)

market in india and continues to steadily do so SPEL is a trusted amp Strategic contract

manufacturing partner for many of the worlds leading Semiconductor companies

14

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

The LAB plant is located in the Manali Industrial Belt25 KMS away from Chennai City

The various infrastructure facilities at Manali The advantages of a metropolitan city hi-

tech communication interface and cosmopolitan culture synergies with the vision of

promoters business plans

TPL continues to march ahead excellent track record and its achievements in a short time

frame stand out distinctly propelled by continuous up gradation of technology Quality

human resource and utmost customer satisfaction TPLrsquos total turnover for 2010 was

Rs97469 crores and it increased in 2011 to Rs118462 crores

Manali Petrochemicals Limited (MPL)

Manali Petrochemicals Ltd(MPL) is a leader in the production and marketing of

Propylene Oxide Propylene Glycols and Polysols in India Located at Manali in Chennai

India MPL is engaged in the manufacturer of the above Petrochemical products The

company operates two grass root production facilities at Manali to manufacture

Propylene Oxide(PO)Propylene Glycol(PG) and Polysols It markets its Polysols with

Isocyanates sourced indigenously as well as imported from Japan and China and the pre-

polymers produced at MPL in meeting the demand of polyurethane industry in India

MPL Total turnover of 2010 is Rs42125 crores and its was increased 2011 is Rs49763

crores

SPEL Semi Conductor Limited (SPEL)

SPEL Semi Conductor is Indias first amp only Semiconductor IC Assembly amp Test facility

SPEL pioneered the Outsourced Semiconductor Assembly amp Test Services (OSAT)

market in india and continues to steadily do so SPEL is a trusted amp Strategic contract

manufacturing partner for many of the worlds leading Semiconductor companies

14

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

Established in 1988 and listed on the Bombay Stock Exchange ever since SPEL initially

supplied to the domestic market SPEL soon acquired the expertise to serve the global

market

SPELs Customers are some of the biggest Integrated Device Manufacturers (IDMS) and

fablersquos Companies in the United States and Asia SPEL offers Packaging Technology for

Semiconductors used in diverse end-market applications including Communications

Consumer Electronics and Computing

SPEL provides full turnkey solutions that include Wafer sort Assembly Test and Drop-

shipment services which help Customers accelerate time-to-revenue for their new

products SPEL also offers value added services such as package design Failure Analysis

and Fully Reliability Test Test Program Development amp Product Characterization

With its manufacturing facilities near Chennai SPEL has 600 employees and offers more

than 100k square feet of manufacturing space SPEL is certified for the ISO

90012000ISO 140012004ampTS 169492002 SPEL total turnover for 2010 was

Rs8716 crores and it increased in 2011 to Rs9133 crores

EDAC Engineering Limited (EDAC)

EDAC Engineering Limited is a joint venture Construction Company having its Regd

Office in Chennai incorporated in June 1987 The Company is jointly promoted by Ms

EDAC Universe Ltd Singapore and Ms Southern Petrochemical Industries Corporation

Limited (SPIC)India

EDAC Engineering Limited since inception in 1987 with JV between Jurong

Engineering Limited Singapore and SPIC Limited was known as SPIC JEL Engineering

Construction Limited till 2007

EDAC is a ISO 90012000 certified company for our Quality Management Systems

certified by DET NORSKE VERITAS (DNV) under RVA Scheme the Netherlands

15

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

Its core business is Power Refinery Oil amp Gas and Process Plant Construction We

provide services from Engineering to Operation amp Maintenance under single roof

The Company offers the following services to Power plants Oil amp Gas Refinery

Petrochemical and other Industrial Plants

Engineering

Procurement

Manufacturing Fabrication

Construction

Operation and Maintenance in Refineries Oil amp Gas and Petrochemical plants

EDAC total turnover for 2010 was Rs7065 crores and it increased in 2011 to

Rs735 crores

Tuticorin Alkali Chemicals and Fertilizers Limited (TAC)

The Company manufactures Soda Ash (the only manufacturer in India) by using Japanese

Toyo Soda Dual Process The other products manufactured by the Company are

Ammonium Bicarbonate using the technology developed by in house RampD

SPIC - ACHIEVEMENT

- First to set up a joint venture fertilizer complex at Tuticorin in Tamil Nadu state

India

- Largest naphtha-based single-stream aluminum plant in Asia when

commissioned

- Largest urea plant of its kind in the world when commissioned

- First to introduce black DAP in India

- First to introduce pipe reactor technology to manufacture black DAP - First to

produce aluminum fluoride from waste hydro fluosilic acid

16

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

SPIC - AWARDS

SPIC has bagged several prestigious Awards Some of them are as follow

- National Safety Award for best safety performance 2003

- British Safety Council UK Best technical innovation award 2003-04

- Fertilizer Association of India Best environmental protection award 2003-04

- Fertilizer Association of India Star Award 2003

- National Safety Council Tamil Nadu chapter Certificate of merit for ISO 9001

and ISO 14001 certification

- Indian Chemical Manufacturers Association Commendation certificate for being

among the top importers 2003-04 at Tuticorin Port

- Tuticorin Customs Commissioner ate Best importer award 2003-04 for fertilizer

raw materials

- Tuticorin Port Trust FAI award for Environmental protection(NPNPK plant

category) for the years 2004-05 and 2006-07

- Award of honour - Safety Award 2005 from National Council Tamilnadu

17

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

13 INDUSTRY PROFILE

INDIAN FERTILIZER INDUSTRY

Fertilizer Industry

The Indian fertilizer industry which is the third largest manufacturer of nitrogenous and

phosphatic fertilizers in the world next only to China and USA witnessed good growth during

the period under review At the national level the total consumption of all nutrient based

fertilizers in 2010-11 is estimated at 590 lakh tones compared to 533lakh tones in the previous

year Out of the 16 plant nutrients Nitrogen Phosphorous and Potash (NPK) are the major three

nutrients that contribute more on the productivity The governments aimed at achieving the

maximum self sufficiency in the production of Nitrogenous Fertilizers

O

GOVERNMENT POLICES

Government of India introduced the new Nutrient Based Subsidy (NBS) Policy for

phosphoric fertilizers effective April 1 2010 with a view to deregulate the PampK

fertilizers and move towards free market pricing The salient features of NBS Policies

are

18

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

9192

Average fertilizer subsidy

7683

12375

49234

7571

31108

Urea DAP MOP

1048707 Subsidy is fixed based on the import parity price adjusted for MRP wherein P is based

on DAP N based on Urea and K based on Potash and S based on Sulphur MRP is

deducted from the import parity price to arrive at the Subsidy payable per nutrient

1048707 Under the NBS Policy MRP has been decontrolled

1048707 In line with the new policy the Government has announced the revised

Subsidy rates for N P K and S for the year 2011-12

Sub

2004 2005 2006 2007 2008 2009 20100

200

400

600

800

1000

1200

118 158 184

262 304

1000

500

Subsidy

Regime

Import of Urea DAP and MOP

19

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

The phased decontrol of farm gate prices and introduction of NBS for urea should result

in lower dependence on subsidy as compared with the current dispensation and hence

moderately ease the working capital position of urea manufacturers While a 10 price

increase (from the current level of Rs 5365ton) is expected in FY2012 further increases

in farm gate prices resulting from higher pricing freedom FY2013 onwards would augur

well for the industryrsquos profitability The above move is an extension of gradual reforms

undertaken by GoI in the fertilizer sector beginning with price decontrol and introduction

of NBS for complex (NPK)fertilizers (including DAP) wef 1-April-2010 The extension

of these policies to urea is also expected to establish consistency with the policy for NPK

fertilizers over the medium to long term and hence promote balanced consumption of

fertilizers

The price decontrol for both urea and NPK fertilizers paves the way for a gradual move

towards free market pricing for all fertilizers In this regard it takes comfort from the

20

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

robustness of demand which has remained strong despite the various rounds of price

increases in NPK fertilizers since the April 2010 decontrol (adding up to 25-40 post

decontrol)

Overall we see the phased price decontrol of urea and the introduction of a Nutrient-

based subsidy (NBS) mechanism as a positive step towards market-linked Farm gate

pricing The mechanism would also establish consistency with the policy For NPK

fertilizers thereby promoting balanced nutrient consumption Unlike in the Case of

DAPNPK the raw material price for urea (ie gas) remains relatively stable (on a year-

on-year basis) which along with the relatively stable subsidy levels (till 2014-15) should

bring down the need to revise retail prices frequently This would also result irrelatively

stable profitability for the urea business

21

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

14 OBJECTIVES

PRIMARY OBJECTIVES

To Analyze on financial Statement with reference to Southern PetroChemical Industries

Corporation Limited

SECONDARY OBJECTIVES

To find out the current financial performance

To examine the financial position by calculating the financial ratios

To determine the liquidity position of the concern

To identify the changes in cash flow

To predict the future trend using Trend Analysis

15NEED FOR THE STUDY

Financial Analysis is the powerful mechanism and it helps to ascertain the strength

and weakness of the concern

It makes the organization to move forward and it makes the organization to take the

decision according to the analyzed financial position Various parties interested can

utilize the information provided by the financial statement for the analysis and

interpretation

22

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

Management will ale to take decisions for the creditors for investors for owners

for stock exchange for tax authorities for government It also helps the creditors in

decision making

16 SCOPE OF THE STUDY

It emphasis on the analyzing Financial performance

It highlights the information which is gathered from balance sheet

It helps to find out the liquidity position

It determines the relationship between the numerical figures by computing

accounting ratios

It facilitate to ascertain cash flow from operating and non operating activities

17 LIMITATIONS

Financial Statements do not always disclose the correct financial position of

business concerns as they are influenced by the personal opinions

judgements subjective views of the accountants of each concern

Information disclosed by profit and loss account may not be real profit as many

items shown are not real but they are estimated

Time was one of the main limitations of this study

The analysis was done on the basis of 20052006200820092010 amp 2011 one

year 2007 was left because concern has faced higher risks in 2007 for the

reconstruction purposes the whole year 2007 was skipped

23

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

CHAPTER - II

21 REVIEW OF LITRATURE

1) FINANCIAL STATEMENT ANALYSIS

Book Name Accounting For Management amp Chapter 8

Author Name Dr Wilson

Publisher Sci tech Publication (Pvt) Ltd First Edition 2010

Page no 81

Financial Statements are known as Trading And Profit amp Loss Account and Balance

Sheet It is mandatory for a concern It is compulsory to prepare the financial statements

according to the Companies Act 1956 There is a need for preparing these statements for

the assessment of tax also These statements exhibit the profit position and financial

strength of a company It is useful for the owners creditors and General Public to find

out the Profit position and financial status of the company Sometimes It wont be

sufficient for decision making It facilitate financial planning and decision making

2) FINANCIAL ANALYSIS

Book Name Advanced Accountancy amp Chapter 16

Author Name TSReddy amp Murthy

Publisher Margham Publications SECOND EDITION 2007

Page No 1625

The primary function of accounting is to accumulate accounting data in a manner

that the amount of profit made or loss suffered during a period can be determined The

manner in which the amount of profit or loss has been arrived at is disclosed in the

statement of accounts prepared at the end of the accounting year The various items of

income and expenditure which arose during the accounting period are detailed out therein

24

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

Grouped under significant heads It is also accompanied by a balance sheet exhibiting

assets and liabilities of the business as at the close of the period In addition for showing

the nature of economic activity to which the account pertains the revenue as well as

different sections of manufacturing trading profit amp loss account amp balance sheet are

prepared to give the final results of the business

3) WORKING CAPITAL

SOURCE httpenwikipediaorgwikiWorking_capital

Working capital (abbreviated WC) is a financial metric which represents operating

liquidity available to a business organization or other entity including governmental

entity Along with fixed assets such as plant and equipment working capital is

considered a part of operating capital Net working capital is calculated as current

assets minus current liabilities If current assets are less than current liabilities an entity

has a working capital deficiency also called a working capital deficit

4) RATIO ANALYSIS

SOURCE httpenwikipediaorgwikiratio

It is the most widely used tool since it compares risk and return relationships of

firms from various aspects Ratio analysis is the method or process by which the

relationship of items or group of items in the financial statements are computed It is an

attempt to derive quantitative measures or guides concerning the financial health and

profitability of a business enterprise It can be used both in trend and static analysis

There are several ratios at the disposal of an analyst but the group of ratios he would

prefer depends on the purpose and objectives of analysis

5) Journal Source FINANCIAL ECONOMICS

25

Title CASH FLOW

Publishing Year 1987

Recent research has emphasized the impact of transaction costs on firm leverage

adjustments We recognize that cashflow realizations can provide opportunities to adjust

leverage at relatively low marginal cost We find that a firms cashflow features affect not

only the leverage target but also the speed of adjustment toward that target

Heterogeneity in adjustment speeds is driven by an economically meaningful concept

adjustment costs Accounting for this fact produces adjustment speeds that are

significantly faster than previously estimated in the literature We also analyze how both

financial constraints and market timing variables affect adjustments toward a leverage

target

7) FINANCIAL PLANNING

SOURCE httpenwikipediaorgwikiFinancial_plan

In general usage a financial plan is a series of steps which are carried out or goals

that are accomplished which relate to an individuals or a businesss financial affairs

This often includes a budget which organizes an individuals finances and sometimes

includes a series of steps or specific goals for spending and saving future income This

plan allocates future income to various types of expenses such as rent or utilities and

also reserves some income for short-term and long-term savings A financial plan

sometimes refers to an investment plan which allocates savings to various assets or

projects expected to produce future income such as a new business or product

line shares in an existing business

8) Journal Title FINANCIAL STABILITY

Title Can Central Banks Monetary Policy be Described by a linear Taylor

26

Publication ELSEVIER 2010

The original Taylor rule establishes a simple linear relation between the interest rate

amp the output gap An important extension to this rule is the assumption of a forward ndash

Looking behavior of central banks Now they are assumed to target expected

inflation amp output gap instead of current values of these variables Using a forward ndash

looking monetary policy can indeed be described by a linear Taylor rule or instead

by a non linear rule It also analyses whether that can be augumented with a financial

conditions index containing information from some asset prices amp financial variables

The result indicate that the monetary behaviour of the European central bank amp Bank

of England is best described by a non linear rule but the behaviour of the Federal

Reserve of the United states can be well described by a linear Taylor rule

CHAPTER -III

31 RESEARCH METHODOLOGY

27

RESEARCH METHODOLOGY

Research Methodology refers to a back philosophy of research It is the way to

systematically solve the research problem It shows the details of data which have been

used for the research problem It shows the details of data which have been used for the

research and procedures followed in the study

32RESEARCH DESIGN

The research design is a frame work or blue print for conducting the research

project The research design to be followed by the researcher is descriptive research

design The descriptive research refers when the problem is known but its situation or

circumstances is also known

DESCRIPTIVE RESEARCH

The descriptive research refers when the problem is known but its situation or

circumstances is also known

33DATA COLLECTION METHODS

The term data refers to qualitative or quantitative attributes of variable or set of

variables Data are typically the results of measurements and can be basis of

graphs images or observations of a set of variables

There are two types of data

primary data collection

secondary data collection

Primary data collection

28

Primary data collection involves the collection of data that not already exist

Primary Research is often undertaken after the researcher has gained some insight in to

the issue by collecting secondary data

Secondary data collection

Secondary data means researcher collects the data which is already

exist Researcher reuse and repurpose information as secondary because it is easier and

less expensive to collect However it is less expensive as primary data

The type of data used in this project is secondary data The secondary data about the

company profile and other details were collected from company website

35 STATISTICAL TOOLS

To analyze the data and to interpret the results various tools are applied They are

Ratio Analysis

Comparative Analysis

Statement of Changes in working Capital

Cash flow analysis

Trend Analysis

RATIO ANALYSIS

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information

COMPARATIVE ANALYSIS

29

Comparative statement analysis helps in bringing out the nature and trend of

current changes affecting the enterprises It helps in comparing various components of

financial statement and finds out the increasing or decreasing in the items The

comparative analysis for the year 2008200920102011 by comparing the base year

2006

STATEMENT OF CHANGES IN WORKING CAPITAL

Statement of Changes in Working Capital helps to find out the changes in the

working capital by comparing current assets amp liabilities of the concern It helps to find

out increase amp decrease of the working capital

CASH FLOW ANALYSIS

Cash flow analysis is the study of the cycle of your business cash inflows and

outflows with the purpose of maintaining an adequate cash flow for your business and to

provide the basis for cash flow management In this research the operating activities

financing activities amp investing activities are segregated

TREND ANALYSIS

Trend analysis is one of the important tool in measuring the financial performance

of a company In this analysis the important items of the financial statements (balance

sheet) for a long period can be taken for trend analysis Trend Analysis is based on 2008

2009 2010 amp 2011 by taking 2006 as base year

CHAPTER ndash IV

30

41 DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS

The data after collection has to be processed and analyzed in accordance with the outline

laid down for the purpose at the time of developing research plan This is essential for a

scientific study amp for ensuring that we have all the relevant data Processing implies

editing coding amp tabulation of collected data so that they are acquiescent to analysis

The term analysis refers to the computation of certain measures along with searching for

patterns Thus ldquoin the process of analysis relationships or differences supporting or conflicting

with original or hypothesis should be subjected to original hypothesis should be subjected to

statistical tests of significance to determine what validity data can be said to indicate any

conclusionsrdquo

INTERPRETATION

Interpretation is essential for the simple reason that the uselessness and utility of

research findings lie in proper interpretation It being considered a basic component of research

process

The term financial analysis and interpretation refer to the process of determining the

financial strengths and weakness of the firm by establishing a strategic relationship between

components of financial statements and other operating data

Financial analysis means implication of financial data by methodological classification

of data given in financial statement Interpretation means explaining the meaning of and

significance of data is so simplified

RATIO ANALYSIS

31

Current Ratio

The ratio of current assets to current liabilities is also called lsquocurrent asset ratiorsquo In

order to measure the short term liquidity or solvency of a concern comparison of current

assets and current liabilities is inevitable

Formula

Current Ratio =Current Assets Current Liabilities

Table411

Year

Current Assets

( Rs In Lakhs)

Current Liabilities

( Rs In Lakhs)Current

Ratio

2005 - 2006 7989451 10030742 080

2006 - 2008 6393423 8618697 074

2008 - 2009 6249087 8384469 075

2009 - 2010 5136828 7929755 065

2010 - 2011 6499048 8486434 077

Note Financial Statement is prepared for 18 months Diagram 411

Current Ratio

08

074

075

065

077

0 02 04 06 08 1

2005 - 2006

2006 -2008

2008 - 2009

2009 - 2010

2010 - 2011

Yea

r

Current Ratio

Current Ratio

INFERENCE

The Current Ratio of the company in 2005 -2006 is 080 in 2006-2008 the Current Ratio

is 074 in 2008 -2009 is 075 in 2009 -2010 is 065 in 2010 -2011 the current ratio is

077 compare to 2009 -2010 the current ratio in 2010 -2011 is increased

Liquid Ratio

32

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

RESEARCH METHODOLOGY

Research Methodology refers to a back philosophy of research It is the way to

systematically solve the research problem It shows the details of data which have been

used for the research problem It shows the details of data which have been used for the

research and procedures followed in the study

32RESEARCH DESIGN

The research design is a frame work or blue print for conducting the research

project The research design to be followed by the researcher is descriptive research

design The descriptive research refers when the problem is known but its situation or

circumstances is also known

DESCRIPTIVE RESEARCH

The descriptive research refers when the problem is known but its situation or

circumstances is also known

33DATA COLLECTION METHODS

The term data refers to qualitative or quantitative attributes of variable or set of

variables Data are typically the results of measurements and can be basis of

graphs images or observations of a set of variables

There are two types of data

primary data collection

secondary data collection

Primary data collection

28

Primary data collection involves the collection of data that not already exist

Primary Research is often undertaken after the researcher has gained some insight in to

the issue by collecting secondary data

Secondary data collection

Secondary data means researcher collects the data which is already

exist Researcher reuse and repurpose information as secondary because it is easier and

less expensive to collect However it is less expensive as primary data

The type of data used in this project is secondary data The secondary data about the

company profile and other details were collected from company website

35 STATISTICAL TOOLS

To analyze the data and to interpret the results various tools are applied They are

Ratio Analysis

Comparative Analysis

Statement of Changes in working Capital

Cash flow analysis

Trend Analysis

RATIO ANALYSIS

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information

COMPARATIVE ANALYSIS

29

Comparative statement analysis helps in bringing out the nature and trend of

current changes affecting the enterprises It helps in comparing various components of

financial statement and finds out the increasing or decreasing in the items The

comparative analysis for the year 2008200920102011 by comparing the base year

2006

STATEMENT OF CHANGES IN WORKING CAPITAL

Statement of Changes in Working Capital helps to find out the changes in the

working capital by comparing current assets amp liabilities of the concern It helps to find

out increase amp decrease of the working capital

CASH FLOW ANALYSIS

Cash flow analysis is the study of the cycle of your business cash inflows and

outflows with the purpose of maintaining an adequate cash flow for your business and to

provide the basis for cash flow management In this research the operating activities

financing activities amp investing activities are segregated

TREND ANALYSIS

Trend analysis is one of the important tool in measuring the financial performance

of a company In this analysis the important items of the financial statements (balance

sheet) for a long period can be taken for trend analysis Trend Analysis is based on 2008

2009 2010 amp 2011 by taking 2006 as base year

CHAPTER ndash IV

30

41 DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS

The data after collection has to be processed and analyzed in accordance with the outline

laid down for the purpose at the time of developing research plan This is essential for a

scientific study amp for ensuring that we have all the relevant data Processing implies

editing coding amp tabulation of collected data so that they are acquiescent to analysis

The term analysis refers to the computation of certain measures along with searching for

patterns Thus ldquoin the process of analysis relationships or differences supporting or conflicting

with original or hypothesis should be subjected to original hypothesis should be subjected to

statistical tests of significance to determine what validity data can be said to indicate any

conclusionsrdquo

INTERPRETATION

Interpretation is essential for the simple reason that the uselessness and utility of

research findings lie in proper interpretation It being considered a basic component of research

process

The term financial analysis and interpretation refer to the process of determining the

financial strengths and weakness of the firm by establishing a strategic relationship between

components of financial statements and other operating data

Financial analysis means implication of financial data by methodological classification

of data given in financial statement Interpretation means explaining the meaning of and

significance of data is so simplified

RATIO ANALYSIS

31

Current Ratio

The ratio of current assets to current liabilities is also called lsquocurrent asset ratiorsquo In

order to measure the short term liquidity or solvency of a concern comparison of current

assets and current liabilities is inevitable

Formula

Current Ratio =Current Assets Current Liabilities

Table411

Year

Current Assets

( Rs In Lakhs)

Current Liabilities

( Rs In Lakhs)Current

Ratio

2005 - 2006 7989451 10030742 080

2006 - 2008 6393423 8618697 074

2008 - 2009 6249087 8384469 075

2009 - 2010 5136828 7929755 065

2010 - 2011 6499048 8486434 077

Note Financial Statement is prepared for 18 months Diagram 411

Current Ratio

08

074

075

065

077

0 02 04 06 08 1

2005 - 2006

2006 -2008

2008 - 2009

2009 - 2010

2010 - 2011

Yea

r

Current Ratio

Current Ratio

INFERENCE

The Current Ratio of the company in 2005 -2006 is 080 in 2006-2008 the Current Ratio

is 074 in 2008 -2009 is 075 in 2009 -2010 is 065 in 2010 -2011 the current ratio is

077 compare to 2009 -2010 the current ratio in 2010 -2011 is increased

Liquid Ratio

32

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Primary data collection involves the collection of data that not already exist

Primary Research is often undertaken after the researcher has gained some insight in to

the issue by collecting secondary data

Secondary data collection

Secondary data means researcher collects the data which is already

exist Researcher reuse and repurpose information as secondary because it is easier and

less expensive to collect However it is less expensive as primary data

The type of data used in this project is secondary data The secondary data about the

company profile and other details were collected from company website

35 STATISTICAL TOOLS

To analyze the data and to interpret the results various tools are applied They are

Ratio Analysis

Comparative Analysis

Statement of Changes in working Capital

Cash flow analysis

Trend Analysis

RATIO ANALYSIS

Ratio analysis is a widely used tool of financial analysis The term ratio in it

refers to the relationship expressed in mathematical terms between two individual figures

or group of figures connected with each other in some logical manner and are selected

from financial statements of the concern The ratio analysis is based on the fact that a

single accounting figure by it self may not communicate any meaningful information

COMPARATIVE ANALYSIS

29

Comparative statement analysis helps in bringing out the nature and trend of

current changes affecting the enterprises It helps in comparing various components of

financial statement and finds out the increasing or decreasing in the items The

comparative analysis for the year 2008200920102011 by comparing the base year

2006

STATEMENT OF CHANGES IN WORKING CAPITAL

Statement of Changes in Working Capital helps to find out the changes in the

working capital by comparing current assets amp liabilities of the concern It helps to find

out increase amp decrease of the working capital

CASH FLOW ANALYSIS

Cash flow analysis is the study of the cycle of your business cash inflows and

outflows with the purpose of maintaining an adequate cash flow for your business and to

provide the basis for cash flow management In this research the operating activities

financing activities amp investing activities are segregated

TREND ANALYSIS

Trend analysis is one of the important tool in measuring the financial performance

of a company In this analysis the important items of the financial statements (balance

sheet) for a long period can be taken for trend analysis Trend Analysis is based on 2008

2009 2010 amp 2011 by taking 2006 as base year

CHAPTER ndash IV

30

41 DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS

The data after collection has to be processed and analyzed in accordance with the outline

laid down for the purpose at the time of developing research plan This is essential for a

scientific study amp for ensuring that we have all the relevant data Processing implies

editing coding amp tabulation of collected data so that they are acquiescent to analysis

The term analysis refers to the computation of certain measures along with searching for

patterns Thus ldquoin the process of analysis relationships or differences supporting or conflicting

with original or hypothesis should be subjected to original hypothesis should be subjected to

statistical tests of significance to determine what validity data can be said to indicate any

conclusionsrdquo

INTERPRETATION

Interpretation is essential for the simple reason that the uselessness and utility of

research findings lie in proper interpretation It being considered a basic component of research

process

The term financial analysis and interpretation refer to the process of determining the

financial strengths and weakness of the firm by establishing a strategic relationship between

components of financial statements and other operating data

Financial analysis means implication of financial data by methodological classification

of data given in financial statement Interpretation means explaining the meaning of and

significance of data is so simplified

RATIO ANALYSIS

31

Current Ratio

The ratio of current assets to current liabilities is also called lsquocurrent asset ratiorsquo In

order to measure the short term liquidity or solvency of a concern comparison of current

assets and current liabilities is inevitable

Formula

Current Ratio =Current Assets Current Liabilities

Table411

Year

Current Assets

( Rs In Lakhs)

Current Liabilities

( Rs In Lakhs)Current

Ratio

2005 - 2006 7989451 10030742 080

2006 - 2008 6393423 8618697 074

2008 - 2009 6249087 8384469 075

2009 - 2010 5136828 7929755 065

2010 - 2011 6499048 8486434 077

Note Financial Statement is prepared for 18 months Diagram 411

Current Ratio

08

074

075

065

077

0 02 04 06 08 1

2005 - 2006

2006 -2008

2008 - 2009

2009 - 2010

2010 - 2011

Yea

r

Current Ratio

Current Ratio

INFERENCE

The Current Ratio of the company in 2005 -2006 is 080 in 2006-2008 the Current Ratio

is 074 in 2008 -2009 is 075 in 2009 -2010 is 065 in 2010 -2011 the current ratio is

077 compare to 2009 -2010 the current ratio in 2010 -2011 is increased

Liquid Ratio

32

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Comparative statement analysis helps in bringing out the nature and trend of

current changes affecting the enterprises It helps in comparing various components of

financial statement and finds out the increasing or decreasing in the items The

comparative analysis for the year 2008200920102011 by comparing the base year

2006

STATEMENT OF CHANGES IN WORKING CAPITAL

Statement of Changes in Working Capital helps to find out the changes in the

working capital by comparing current assets amp liabilities of the concern It helps to find

out increase amp decrease of the working capital

CASH FLOW ANALYSIS

Cash flow analysis is the study of the cycle of your business cash inflows and

outflows with the purpose of maintaining an adequate cash flow for your business and to

provide the basis for cash flow management In this research the operating activities

financing activities amp investing activities are segregated

TREND ANALYSIS

Trend analysis is one of the important tool in measuring the financial performance

of a company In this analysis the important items of the financial statements (balance

sheet) for a long period can be taken for trend analysis Trend Analysis is based on 2008

2009 2010 amp 2011 by taking 2006 as base year

CHAPTER ndash IV

30

41 DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS

The data after collection has to be processed and analyzed in accordance with the outline

laid down for the purpose at the time of developing research plan This is essential for a

scientific study amp for ensuring that we have all the relevant data Processing implies

editing coding amp tabulation of collected data so that they are acquiescent to analysis

The term analysis refers to the computation of certain measures along with searching for

patterns Thus ldquoin the process of analysis relationships or differences supporting or conflicting

with original or hypothesis should be subjected to original hypothesis should be subjected to

statistical tests of significance to determine what validity data can be said to indicate any

conclusionsrdquo

INTERPRETATION

Interpretation is essential for the simple reason that the uselessness and utility of

research findings lie in proper interpretation It being considered a basic component of research

process

The term financial analysis and interpretation refer to the process of determining the

financial strengths and weakness of the firm by establishing a strategic relationship between

components of financial statements and other operating data

Financial analysis means implication of financial data by methodological classification

of data given in financial statement Interpretation means explaining the meaning of and

significance of data is so simplified

RATIO ANALYSIS

31

Current Ratio

The ratio of current assets to current liabilities is also called lsquocurrent asset ratiorsquo In

order to measure the short term liquidity or solvency of a concern comparison of current

assets and current liabilities is inevitable

Formula

Current Ratio =Current Assets Current Liabilities

Table411

Year

Current Assets

( Rs In Lakhs)

Current Liabilities

( Rs In Lakhs)Current

Ratio

2005 - 2006 7989451 10030742 080

2006 - 2008 6393423 8618697 074

2008 - 2009 6249087 8384469 075

2009 - 2010 5136828 7929755 065

2010 - 2011 6499048 8486434 077

Note Financial Statement is prepared for 18 months Diagram 411

Current Ratio

08

074

075

065

077

0 02 04 06 08 1

2005 - 2006

2006 -2008

2008 - 2009

2009 - 2010

2010 - 2011

Yea

r

Current Ratio

Current Ratio

INFERENCE

The Current Ratio of the company in 2005 -2006 is 080 in 2006-2008 the Current Ratio

is 074 in 2008 -2009 is 075 in 2009 -2010 is 065 in 2010 -2011 the current ratio is

077 compare to 2009 -2010 the current ratio in 2010 -2011 is increased

Liquid Ratio

32

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

41 DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS

The data after collection has to be processed and analyzed in accordance with the outline

laid down for the purpose at the time of developing research plan This is essential for a

scientific study amp for ensuring that we have all the relevant data Processing implies

editing coding amp tabulation of collected data so that they are acquiescent to analysis

The term analysis refers to the computation of certain measures along with searching for

patterns Thus ldquoin the process of analysis relationships or differences supporting or conflicting

with original or hypothesis should be subjected to original hypothesis should be subjected to

statistical tests of significance to determine what validity data can be said to indicate any

conclusionsrdquo

INTERPRETATION

Interpretation is essential for the simple reason that the uselessness and utility of

research findings lie in proper interpretation It being considered a basic component of research

process

The term financial analysis and interpretation refer to the process of determining the

financial strengths and weakness of the firm by establishing a strategic relationship between

components of financial statements and other operating data

Financial analysis means implication of financial data by methodological classification

of data given in financial statement Interpretation means explaining the meaning of and

significance of data is so simplified

RATIO ANALYSIS

31

Current Ratio

The ratio of current assets to current liabilities is also called lsquocurrent asset ratiorsquo In

order to measure the short term liquidity or solvency of a concern comparison of current

assets and current liabilities is inevitable

Formula

Current Ratio =Current Assets Current Liabilities

Table411

Year

Current Assets

( Rs In Lakhs)

Current Liabilities

( Rs In Lakhs)Current

Ratio

2005 - 2006 7989451 10030742 080

2006 - 2008 6393423 8618697 074

2008 - 2009 6249087 8384469 075

2009 - 2010 5136828 7929755 065

2010 - 2011 6499048 8486434 077

Note Financial Statement is prepared for 18 months Diagram 411

Current Ratio

08

074

075

065

077

0 02 04 06 08 1

2005 - 2006

2006 -2008

2008 - 2009

2009 - 2010

2010 - 2011

Yea

r

Current Ratio

Current Ratio

INFERENCE

The Current Ratio of the company in 2005 -2006 is 080 in 2006-2008 the Current Ratio

is 074 in 2008 -2009 is 075 in 2009 -2010 is 065 in 2010 -2011 the current ratio is

077 compare to 2009 -2010 the current ratio in 2010 -2011 is increased

Liquid Ratio

32

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Current Ratio

The ratio of current assets to current liabilities is also called lsquocurrent asset ratiorsquo In

order to measure the short term liquidity or solvency of a concern comparison of current

assets and current liabilities is inevitable

Formula

Current Ratio =Current Assets Current Liabilities

Table411

Year

Current Assets

( Rs In Lakhs)

Current Liabilities

( Rs In Lakhs)Current

Ratio

2005 - 2006 7989451 10030742 080

2006 - 2008 6393423 8618697 074

2008 - 2009 6249087 8384469 075

2009 - 2010 5136828 7929755 065

2010 - 2011 6499048 8486434 077

Note Financial Statement is prepared for 18 months Diagram 411

Current Ratio

08

074

075

065

077

0 02 04 06 08 1

2005 - 2006

2006 -2008

2008 - 2009

2009 - 2010

2010 - 2011

Yea

r

Current Ratio

Current Ratio

INFERENCE

The Current Ratio of the company in 2005 -2006 is 080 in 2006-2008 the Current Ratio

is 074 in 2008 -2009 is 075 in 2009 -2010 is 065 in 2010 -2011 the current ratio is

077 compare to 2009 -2010 the current ratio in 2010 -2011 is increased

Liquid Ratio

32

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

The term quick assets or liquid assets refers current assets which can be converted into

cash immediately it comprises all current assets except stock and prepaid expenses it is

determined by dividing quick assets by quick liabilities

Formula

Liquid Ratio = Liquid Assets Current Liabilities

Table 412

Year

Liquid Asset

( Rs In Lacs)

Current Liabilities

( Rs In Lacs) Liquid Ratio 2005 - 2006 124364 10030742 012 2006 - 2008 3139239 8618697 036 2008 - 2009 4081712 8384469 049 2009 - 2010 3645151 7929755 046 2010 - 2011 2784257 8486434 033

Note Financial Statement is prepared for 18 months Diagram412

Liquid Ratio

012

036

049 046

033

0010203040506

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Liq

uid

Rat

io

Liquid Ratio

INFERENCE

The Liquid Ratio in 2005 -2006 is 012 in 2006 -2008 is 036 in 2008 -2009 is 049 in

2009 -2010 is 046 amp in 2010 -2011 is 033 Compare to 2009 -2010 the Liquid Ratio in 2010 -

2011 is increased

Fixed Asset Ratio

33

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

It expresses the relationship between the external equities and internal equities or the

relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of the

long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Fixed Asset Ratio = Fixed assets Long term Funds Table 413

Year Fixed Assets

( Rs In Lakhs)

Long Term Funds ( Rs In Lakhs)

Fixed Asset Ratio

2005 -2006 14537966 1724917 084 2006 -2008 13421437 20994909 064 2008 -2009 12616552 21999463 057 2009 -2010 10771626 16776835 064 2010 -2011 8492246 4656069 182

Note Financial Statement is prepared for 18 monthsDiagram413

084 064 057 064

182

0

05

1

15

2

Fixed Asset Ratio

2005-2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Fixed Asset Ratio

Fixed Asset TurnOver Ratio

INFERENCE The Fixed Asset Ratio in 2005 -2006 is 084 in 2006 -2008 is 064 in 2008-

2009 is 057 in 2009 ndash 2010 is 064 in 2010 -2011 is 182 Thus the Fixed asset ratio is

increased in 2010 -2011 compare to 2009 -2010

Working Capital Turnover Ratio

34

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Working capital turnover ratio indicates the velocity of the utilization of net

working capital This ratio indicates the number of times the working capital is turned

over in the course of a year It is a good measure over ndashtrading and under-trading

Formula

Sales Working Capital

Table 414

Year

Sales

( Rs In Lakhs)

Working Capital

( Rs In Lakhs)

Working Capital

Turnover Ratio

2005 - 2006 3274288 2041291 1604 2006 - 2008 14774987 2225274 664 2008 - 2009 3777881 2135382 177 2009 - 2010 4170651 2792929 149 2010 - 2011 17290241 1987386 870

Note Financial Statement is prepared for 18 months

Diagram 414

1604

664

177 149

87

0

5

10

15

20

Working Capital

2005- 2006

2006- 2008

2008- 2009

2009- 2010

2010- 2011

Year

Working Capital Turnover Ratio

Working Capital Turnover Ratio

INFERENCE In 2005 -2006 working capital turnover ratio is 1604 in 2006 -2008 is 664 in 2008 -2009

Is 177 in 2009 -2010 is 149 in2010 -2011 is 87 Compare to 2009 -2010 the working capital

ratio is increased in 2010 -2011

Debt Equity Ratio

35

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

It expresses the relationship between the external equities and internal equities or

the relationship between borrowed funds and lsquoownersrsquo capital It is a popular measure of

the long-term financial solvency of a firm This relationship is shown by the debt equity

ratio

Formula

Debt Equity Ratio = Total Long term Debts Share Holder Funds

Table 415

YearTotal Long Term Debts ( Rs In Lakhs)

Share Holder Funds ( Rs In Lakhs)

Debt Equity Ratio

2005 -2006 21491425 3581569 6002006 -2008 20994909 3581569 586 2008 -2009 21999463 3581569 614 2009 -2010 16776835 4381569 383 2010 -2011 11864766 4646069 255

Note Financial Statement is prepared for 18 months

Diagram 415

6 586 614

383255

01234567

Debt Equity Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt Equity Ratio

Debt Equity Ratio

INTERFERENCE

The Debt Equity Ratio in 2005 -2006 is 600 in 2006 -2008 is 586 in 2008-2009 is

614 in 2009 -2010 is 383 in 2010 -2011 is 255 compare to 2009 -2010 the debt equity

ratio in 2010 -2011 is decreased

Total Assets Turnover Ratio

36

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

This ratio is an indicator of how the resources of the organization utilized for

increasing the turnover It shows the ratio between the total assets and the net sales of the

company

Formula

Total Assets Turnover Ratio =Sales Total Assets

Table 416

Year

Sales

( Rs In Lakhs)

Total Assets

( Rs In Lakhs) Total Assets Turnover Ratio

2005 ndash 2006 3274288 33313119 098 2006 ndash 2008 14774987 30180201 049 2008 -2009 3777881 24621792 015 2009 - 2010 4170651 18293894 023 2010 - 2011 17290241 1551404 111

Note Financial Statement is prepared for 18 months

Diagram 416

098

049

015 023

111

0

02

0406

08

1

12

Total Asset Turnover Ratio

2005

-2006

2006

-2008

2008

-2009

2009

-2010

2010

-2011

Year

Total Asset Turn Over Ratio

Total Asset Turn OverRatio

INFERENCE

The Total Asset Turnover Ratio in 2005 -2006 is 098 in 2006 -2008 is 049 in 2008

-2009 is 015 amp in 2009 -2010 is 023 in 2010 ndash 2011 is 111 The Total Asset Turnover

Ratio is increased in 2010 -2011 compare to 2009 -2010

Proprietory Ratio

37

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

It expresses the relationship between shareholder funds and total tangible assets The

relationships comes to proprietory ratio

Formula

Share Holder Funds Total Tangible Assets

Table 417

Year

Shareholder Funds

( Rs In Lakhs)

Total Tangible Assets

( Rs In Lakhs) Proprietory Ratio 2005 -2006 3581569 33313169 011 2006 - 2008 3581569 30180201 012 2008 -2009 3581569 24621792 015 2009 - 2010 4381569 18293894 024 2010 -2011 4656069 1555144 030

Note Financial Statement is prepared for 18 months

Diagram 417

011012 015

024

030

000005010015020025030

Properietory Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Proprietory Ratio

Proprietory Ratio

INFERENCE

The propietory Ratio in 2005 -2006 is 011in 2006 -2008 is 012 in 2008 -2009 is 015 in

2009 -2010 in 024in 2010 -2011 is 030 compare to the previous years proprietory ratio is

increased in 2010 -2011

Fixed Asset Turnover Ratio

38

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Fixed Asset Turnover Ratio

21

03903

11

222

0

05

1

15

2

25

2005 - 2006 2006 - 2008 2008 - 2009 2009 - 2010 2010 - 2011

Year

Fixed Asset Ratio

The ratio indicates the extent to which the investments in fixed assets contribute

towards sales If compared with a previous year It indicates whether the investment in

fixed assets has been judious

Formula

Fixed Assets Turnover Ratio = Sales Fixed Assets

Table 418

Year

Net Sales

(Rs In Lakhs)

Fixed Assets

( Rs In Lakhs)Fixed Asset

Ratio 2005 -2006 3274288 14537966 222 2006 -2008 14774987 13421437 110 2008 -2009 3777881 12616552 030 2009 -2010 4170651 10771626 039 2010 -2011 17290241 8250711 210

Note Financial Statement is prepared for 18 months

Diagram 418

INFERENCE

In 2005 -2006 the fixed asset turnover Ratio is 222 in 2006 -2008 is 11 in 2008 -2009

is 03 in 2009 -2010 is 039 in 2010 -2011 is 21 Compare to 2009 -2010 the ratio in 2010 -

2011 is decreased

Capital Turnover Ratio

39

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

The ratio indicates the relation ship between sales and Capital Employed The turnover

ratio occur by calculating this ratio

Formula

Capital Turnover Ratio = Net Sales Capital Employed

Table 419

Note Financial Statement is prepared for 18 months

Diagram 419

145

046

0094 011

055

0

05

1

15

Capital Turn over Ratio

2005-2006

2006-2008

2008-2009

2009-2010

2010-2011

Year

Capital Turnover Ratio

Capital Turnover Ratio

INFERENCE

The Capital Turnover Ratio of the company in 2005 -2006 is 145 in 2006-2008 is

046 In 2008 -2009 is 0094 In 2009 -2010 the ratio is 011 In 2010 -2011 is 055The

Capital Employed Turnover Ratio is increased in 2010 -2011 compare to 2009 -2010

Debts To Total Assets Ratio

40

Year Net Sales( Rs In Lakhs)

Capital Employed

( Rs In Lakhs) Capital Turnover Ratio

2005 - 2006 3274288 22581641 145 2006 - 2008 14774987 31995621 046 2008 - 2009 3777881 40072258 0094 2009 -2010 4170651 36895287 011 2010 -2011 17290241 31419882 055

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

The ratio indicates the relationship between Debt and Total Asset This proportion

occur by this ratio

Formula

Debts To Total Assets Ratio = Total Long Term Debts Total Assets

Table 4110

Year

Total Long Term Debts

( Rs In Lakhs)

Total Assets

( Rs In Lakhs)Debt To Total Assets Ratio

2005 - 2006 21491425 33313169 0652006 - 2008 20994909 30180201 0702008 - 2009 21999463 24621792 0892009 - 2010 16776835 18293894 0922010 - 2011 11864766 1555144 076

Note Financial Statement is prepared for 18 months Diagram 4110

065 07089 092

076

002040608

1

Debt To Total Assets

Ratio

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Debt To Total Assets Ratio

Debt To Total

INFERENCE

The Debt To Total Assets Ratio of the company in 2005 -2006 is 065 the ratio in

2006 -2008 is 070 in 2008 -2009 is 089 in 2009-2010 is 092 in 2010-2011 is 076The

Debt To Total Asset Ratio is decreased in 2010-2011 compare to ratio in 2009 -2010

Interest Coverage Ratio

41

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

The ratio indicates the relation ship between EBIT amp Interest The interest coverage

Ratio occur by calculating this ratio

Formula

Interest Coverage Ratio = EBIT InterestTable 4111

Year

Earnings Before Interest amp Tax

( Rs In Lakhs)

Interest

( Rs In Lakhs)Interest Coverage

Ratio

2005 -2006 -3894764 2991149 -130

2006 -2008 -5641036 3823481 -148

2008 -2009 -7066795 1277431 -553

2009 -2010 -1245657 204951 -608

2010 -2011 819836 255104 321Note Financial Statement is prepared for 18 months

Diagram 4111

Interest Coverage Ratio

321-13

-148

-553-608

-8

-6

-4

-2

0

2

4

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Inte

rest

Cov

erag

e R

atio

INFERENCE

The interest Coverage Ratio in 2005 -2006 is -130in 2006 -2008 is -148 in 2008 -

2009 is -553 In 2009 -2010 is -608 In 2010 -2011 is 321 The Ratio Increased in 2010

-2011 compare to 2009 -2010

Table 421

42

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

COMPARATIVE BALANCE SHEET OF SPIC (2005 -2006)

Particulars2005

(Rs In Lakhs)2006

(Rs In Lakhs)Change

(Rs In Lakhs)Percentag

eCurrent Assets

Inventories 1454148 1574944 120796 830Sundry Debtors 1510108 1695288 18518 1226

Cash amp Bank Balances 41691 39158 -2533 -607Loans amp Advances 1048999 4680061 -5809929 -5539

Total Current Assets 13495937 7989451 -5506486 -4080Fixed Assets 12882014 14537966 1655952 1285Investments 10350736 10785721 434985 420Total Assets 36728687 33313138 -3415549 -930

Current LiabilitiesCurrent Liabilities amp Provisions 7355395 10030742 2675347 3637

Total Current Liabilities 7355395 10030742 2675347 3637Share Holder Funds

Share Capital Advance 1005477 1204482 199005 1979Share Capital 2000 0 -2000 -100

Reserves amp Surplus 10144648 2377082 -7767566 -7657Total Share Holder Funds 11350125 3581564 -7768561 -6844

Loans FundsSecured Loans 17298592 1724917 -49422 -029

Unsecured Loan 4054478 4242255 187777 463Total Loan Funds 2135307 21491425 138355 065

Less Miscellaneous Expenditure 74846 39696 -3515 -4696Less Profit amp Loss Account 3255057 1750902 -1504155 -4621

Total Liabilities 36728687 33313133 -3415554 -930

Note Financial Statement is prepared for 18 months

INFERENCE

The Above table shows The comparative balance sheet of the year 2005 to 2006 is as

follows The share capital of the company has decreased in the year of 2005-06 The

secured loan of the company has decreased in this year by 029 The fixed assets of the

company has increased by 1285 The cash position of the company has decreased The

current liability and provisions of the company is fluctuating year after year

43

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 422

THE COMPARATIVE BALANCE SHEET OF SPIC (2006 -2008)

Note Financial Statement is prepared for 18 monthsINFERENCE The Above table shows the comparative balance sheet of the year 2006 to 2008 is as

follows The share capital of the company has no change The secured loan of the

company has increased in the year 2008 by 2172 The fixed assets of the company has

decreased

44

Particulars2006

(Rs In Lakhs)2008

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Inventories 15749444 1608268 333236 212Sundry Debtors 1695288 1200125 -495163 -2921

Cash amp Bank Balances 39158 1934757 1895599 484090Loans amp Advances 4680061 1650253 -3029808 -6474

Total Current Assets 79894514 6393403 -15960484 -1998Fixed Assets 14537966 13421437 -1116529 -768Investments 10785721 10365341 -42038 -390Total Assets 333131384 30180181 -31329574 -940

Current LiabilitiesCurrent Liabilities amp

Provisions 101039 8618697 -1485203 -1470Total Current

Liabilities 101039 8618697 -1485203 -1470Loans FundsSecured Loan 1724917 20994909 3745739 2172

Unsecured Loan 4169097 4418166 249069 597Total Loan Funds 21418267 25413075 3994808 1865

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Less Miscellaneous

Expenditure 39696 13997 -25699 -6474Less Profit amp Loss

Account 1750902 7419143 5668241 32373Total Current

Liabilities 33313138 30180201 -3132937 -940

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 423 THE COMPARATIVE BALANCE SHEET OF SPIC (2008 ndash 2009)

Particulars

2008(Rs In Lakhs)

2009(Rs In Lakhs)

Change (Rs In Lakhs)

Percentage

Current Assets Inventories 1612746 1206477 -406269 -2519

Sundry Debtors 1200125 527505 -67262 -5605Cash amp Bank Balances 1934757 287723 942473 4871

Loan amp Advances 1645795 1637875 -792 -048Total Current Assets 6393423 6249087 -144336 -226

Fixed Assets 13421437 12616552 -804885 -600Investments 10365341 5756153 -4609188 -4447Total Assets 30180201 24621792 -5558409 -1842

Current LiabilitiesLiabilities 8519245 8245701 -273544 -321Provisions 99452 138768 39316 3953

Total Current Liabilities 8618697 8384469 -234228 -272

Share Holder FundsShare Capital 1204482 1204482 0 0

Reserves amp Surplus 2377087 2377087 0 0Total Share Holder

Funds 3581569 3581569 0 0Loan FundsSecured Loan 20994909 21999463 1004554 478

Unsecured Loan 4418166 5147517 729351 1651Total Loan Funds 25413075 2714698 1733905 682Less Miscellaneous

Expenditure 13997 0 -13997 -100Less Profit amp Loss

Account 7419143 14491226 7072083 9532Total Liabilities 30180201 24621792 -5558409 -1842

INFERENCE

The Above table shows the comparative balance sheet of the year 2008 to 2009 is as

follows The share capital of the company has no changes The secured loan of the company

has increased in this year by 478 The fixed assets of the company has decreased by

600 The cash position of the company has decreased The current liability and

provisions of the company is fluctuating year after year

45

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 424

COMPARATIVE BALANCE SHEET OF SPIC ( 2009 ndash 2010)

Particulars

2009(Rs In Lakhs)

2010(Rs In Lakhs)

Change(Rs In Lakhs)

Percentage

Current AssetsInterest 656 635 -021 -320

Inventories 1206477 1080253 -126224 -1046Sundry Debtors 527505 717139 189634 3595

Cash amp Bank Balances 287723 1826472 -1050758 -3652Loans amp Advances 1637219 1512327 -124892 -763

Total Current Assets 6249087 5136826 -1112261 -1779Fixed Assets 12616552 10771626 -1844926 -1462Investments 5756153 2385442 -3370711 -5856Total Assets 24621792 18293894 -6327898 -2570

Current LiabilitiesLiabilities 8337471 7887003 -450468 -540Provisions 46998 42752 -4246 -903

Total Current Liabilities 8384469 7929755 -454714 -542Share Holder Funds

Share Capital 1204482 1818679 614197 5099Reserves amp Surplus 2377087 256289 185803 782

Total Share Holder Funds 3581569 4381569 8000 2233Loan Funds

Secured Loans 21999463 16776835 -5222628 -2374Unsecured Loans 5147517 4942618 -214899 -417

Total Loan Funds 2714698 21719453 -5437527 -2002Less Profit amp Loss

Account 14491226 15736883 1245657 860

Total Liabilities 24621792 18293894 -6337898 -2573

INFERENCE

The Above table shows the comparative balance sheet of the year 2009 to 2010 is

as follows The share capital of the company has increased in the year of 2010 The secured

loan of the company has increased in this year by 9171 The fixed assets of the company

has increased by 5888 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

46

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 425

THE COMPARATIVE BALANCE SHEET OF SPIC ( 2010 ndash 2011)

Particulars2010

(Rs In Lakhs)2011

(Rs In Lakhs)Change

(Rs In Lakhs) PercentageCurrent Assets

Interest 635 0 -635 -100Inventories 1080253 1681617 601364 5567

Sundry Debtors 717139 1092652 375513 5236Cash amp Bank

Balances 1826472 996473 -829999 -4544Loan amp Advances 1512327 2728306 1215979 8040

Total Current Assets 5136826 6499048 1362222 2651Fixed Assets 10771626 8492246 -227938 -2116Investment 2385442 560146 -1825296 -7652

Total Assets 18293894 1555144 -2742454 -1499Current Liabilities

Liabilities 7613803 8439378 825575 1084Provisions 42752 47056 4304 1007

Total Current Liabilities 7656555 8486434 829879 1084

Share Holder FundsShare Capital 1818679 1787784 -30895 -170

Reserves amp Surplus 256289 2868285 305395 1192Total Share Holder

Funds 4381569 4656069 2745 626Loan FundsSecured Loan 16776835 11846766 -4930069 -2939

Unsecured Loan 5215818 5479218 2634 505Total Loan Funds 21992653 17325984 -4666669 -2122Less Profit amp Loss

Account 15736883 14917047 -819836 -521Total Liabilities 18293894 1555144 -2742454 -1499

INFERENCE

The Above table shows the comparative balance sheet of the year 2010 to 2011 is as

follows The share capital of the company has decreased in the year of 2011 The secured

loan of the company has decreased in this year by -2939 The fixed assets of the company

has increased by -2116 The cash position of the company has decreased The current

liability and provisions of the company is fluctuating year after year

47

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 431 STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2005 -2006

Particulars

2005

(Rs In Lakhs)

2006

(Rs In Lakhs) Increase(Rs In Lakhs)

Decrease (Rs In Lakhs)

Current Assets Inventories 1454148 1574944 120796 Sundry Debtors 1510108 1695288 18518 Cash amp Bank Balances 41691 39158 2533 Loan amp Advances 1048999 4680061 5809929

Total Current Assets (A) 13495937 7989451

Current Liabilities Current Liabilities amp Provisions 7355395 10030742 2675347

Total Current Liabilities (B) 7355395 10030742 2675347

Net Working Capital ( A-B) 6140542 -2041291 305976 8487809 Decrease In Working Capital 8181833 8181833

Total 6140542 6140542 11163156 11163156Note Financial Statement is prepared for 18 months

INFERENCE

From the above table shows that Net Working Capital for the year 2005 amp 2006 is Rs 6140542 amp Rs

(2041292) Thus the Working Capital Of the Concern is decreased in 2006 Compare to the Net Working

Capital In 2005

48

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 432

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2006 -2008

Particulars 2006 (Rs In Lakhs)

2008 (Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1574944 1608288 33344 Sundry Debtors 1695288 1200125 495163 Cash amp Bank Balances 39158 1934757 1895599 Loans amp Advances 4680061 1650253 3029808

Total Current Assets (A) 7989451 6393423 Less Current Liabilities Current Liabilities amp Provisions 101039 8618697 1485203 Total Current Liabilities (B) 101039 8618697 Net Working Capital (A -B) - 2114449 -2225274 3414146 3524971 Decrease In Working Capital 110825 110825 Total -2114449 -2114449 3524971 3524971

Note Financial Statement is prepared for 18 months

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2006 amp 2008 is Rs -

2114449 amp Rs -2225274 Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

49

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 433

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2008 -2009

Particulars2008

(Rs In Lakhs)2009

(Rs In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Inventories 1612746 1206477 406269 Sundry Debtors 1200125 527505 67262 Cash amp Bank Balances 1934757 287723 942473 Loans amp Advances 1645795 1637875 792 Total Current Assets (A) 6393423 6249087 Current Liabilities amp Provisions Liabilities 8519245 8245701 273544 Provisions 99452 138768 39316 Total Current Liabilities (B) 8618697 8384469 Net Working Capital ( A - B) -2225274 -2135382 1216017 1126125 Increase In Working Capital 89892 89892 Total -2135382 -2135382 1216017 1216017

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2008 amp 2009 is Rs (-

2225274) amp Rs (-2135382) Thus it is inferred that the Net Working Capital in 2009 is increased

compare to the Net Working Capital in 2008

50

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 434

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2009-2010

Particulars

2009Rs

(In Lakhs)

2010Rs

(In Lakhs)

Increase

(Rs In Lakhs)

Decrease

(Rs In Lakhs) Current Assets Interest Accrued on Investment 656 635 021 Inventories 1206477 1080253 126224 Sundry Debtors 527505 717139 189634 Cash amp Bank Bank Balances 287723 1826472 1050758 Loan amp Advances 1637219 1512327 124892 Total Current Assets (A) 6249087 5136826 Current Liabiities amp Provisions Liabilities 8337471 7887003 450468 Provisions 46998 42752 4246 Total Current Liabilities (B) 8384469 7929755 Net Working Capital ( A - B) -2135382 -2792929 644348 1301895 Decrease In Working Capital 657547 657547 Total -2135382 -2135382 1301895 1301895

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2009 amp 2010 is Rs

(-2135382) amp Rs (-2792929) Thus it is inferred that the Net Working Capital in 2008 is decreased

compare to the Net Working Capital in 2006

51

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Table 435

STATEMENT SHOWING CHANGES IN WORKING CAPITAL 2010 ndash 2011

Particulars

2010 Rs (In Lakhs)

2011Rs

(In Lakhs) Increase Decrease

Current Assets Interest Accrued On Investments

635 0 635 Inventories 1080253 1681617 601364 Sundry Debtors 717139 1092652 375513 Cash amp Bank Balances 1826472 996473 829999 Loans amp Advances 1512327 2728306 1215979 Total Current Assets (A) 5136826 6499048 Current Liabilities Liabilities 7613803 8439378 825575 Provisions 42752 47056 4304Total Current Liabilities (B) 7656555 8486434 Net Working Capital ( A - B) - 2519729 -1987386 2192856 1660513 Increase In Working Capital 532343 532343 Total -1987386 -1987386 2192856 2192856

INFERENCE

From the Above Table it shows that the Net Working Capital For the year 2010 amp 2011 is Rs(-

2519729) amp Rs (-1987386) Thus it is inferred that the Net Working Capital in 2011 is increased compare

to the Net Working Capital in 2006

CASH FLOW STATEMENT FOR THE YEAR 2005 ndash 2006Table 441

52

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Particulars2006

(Rs In Lakhs)2005

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -3894764 97442 Adjustment Depreciation 825701 422777 Loss On sale of assets -538 22125 Loss On sale of investments -1848 1369 Inventories written off 48164 - Dimuution in the value of investments 44343 - Assets written off 51361 - Miscellaneous expenditure written off 3515 42754 Provision for doubt ful debts ampadvances 119104 238472 Bad debts amp advances written off 778975 - Exchange difference 79597 -108835

interest amp financial charges 3007862 182278

6

Net Gain on restructuring of float rate -

-212542

7 Income from investments -304061 -25135 interest income -16713 4667097 -16451 274435Operating Profit Before Working Capital Charges 772333 371877Adjustments (increase)Decrease in Sundry Debtors -370429 323678 (increase)Decrease in inventories -168961 6989

(increase)Decrease in loans amp advances 203215

-103400

6 (increase)Decrease in Liabilities amp provisions 2111188

1558221

1775013 917783Cash generated from operations 2547346 128966Direct Taxes paid Received 1631 -19909 Payments under voluntary retirement scheme - -65794 NET CASH FROM OPERATING ACTIVITIES 2563656 1203957 B CASH FLOW FROM INVESTING ACTIVITIES Deletions additions to fixed assets -137346 -90498

53

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Particulars 2006 2005 Capital Work in progress advances 16471 30553 Particulars Adjustments for exchange fluctuation 7807 25135 Proceeds from sales of fixed assets 18994 3572 Interest Income 16713 16451 NET CASH FROM INVESTING ACTIVITIES -7098 -14787 C CASH FROM FINANCING ACTIVITIES Repayment of borrowings -560817 -10577 Proceeds From borrowings - 498144 Share Capital Advance - 3951 Dividend Paid -2705 -2106

Interest amp Financial Charges Paid -1995569

-182798

5 -2559091 -1433766 NET CASH FLOW ( A+B+C) -2533 -245596 Cash amp Cash equivalents (opening balance) Cash amp Cash equivalents (closing balance) Disclosure of non cash transaction

write off old subsidies 3695474 -

write off old advances 649431 Restatement of liabilities 488557 Conversion of loan to investment 637906 Investments acquired on amalgamation 159066 Investments made - 2000 Reduction in liability on restructuring Floating Rate

2125427

Exchange (loss)gain on restatement of liability -75685

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the year

54

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

CASH FLOW STATEMENT FOR THE YEAR 2006 - 2008

Table 442

Particulars2008

(Rs In Lakhs)2006

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES Profit loss for the periodyear -5641036 -3894764 Adjustment Depreciation 1259048 825701 Loss On sale of assets 31422 50823 Loss On sale of investments - -1848

Inventories written off - 48143

Dimution in the value of investments 855420 44343

Assets written off - - Provision of non moving inventories 93789 - Miscellaneous expenditure written off 25699 35150 Provision for doubt ful debts ampadvances 377751 119104

Bad debts amp advances written off 21720

778975 Exchange difference 249563 79597 interest amp financial charges 3851147 3007862 Net Gain on restructuring of float rate - - Income from investments -214254 -304061 interest income -27666 -16713

6024513 4667097Operating Profit Before Working Capital Charges 383477 772333Adjustments (increase)Decrease in Sundry Debtors 421169 370429 (increase)Decrease in inventories -127134 168961 (increase)Decrease in loans amp advances 2903877 203215 (increase)Decrease in Liabilities amp provisions 1928367 2111188 1269545 1775013Cash generated from operations 1653022 2547346Direct Taxes paid Received -76239 16310 Payments under voluntary retirement scheme - - NET CASH FROM OPERATING ACTIVITIES 1576783 2563656

55

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

B CASH FLOW FROM INVESTMENT Particulars 2008

(Rs In Lakhs) 2006 (Rs In Lakhs)

Deletions additions to fixed assets including

-217545

137346

Capital Work in progress advances

Adjustments for exchange fluctuation Proceeds from sales of fixed assets 43604 16471 Income from investments 84240 78070 Purchase of investments -435040 - Proceeds from sale of investments - 18994 Interest Income 27666 16451 NET CASH FROM INVESTING ACTIVITIES -497075 -7098 C CASH FROM FINANCING ACTIVITIES Long term borrowings 396358 1523514

Dividend paid -1595 -4398

Deposits Paid -1138 5756

Interest amp Financial Charges Paid -93718 -1196841 -299907 316519 C NET CASH FROM FINANCIAL ACTIVITIES -299907 -316519 NET CASH FLOW ( A+B+C) 942473 1895599 Cash amp Cash equivalents (opening balance)

1934757 39158

Cash amp Cash equivalents (closing balance) 2877230 1934757

Disclosure of non cash transaction

Unpaid interest 1183713

2654306 Exchange loss gain on restatement of FRN Liability -372386 183012 Conversion of subsidy to investment 43490 435040

Note Financial Statement is prepared for 18 months

INFERENCE

From the above Table Net Cash from operating activities in 2005 is 1203957 amp in 2006 is

2563656In 2005 the Net Cash from investing activities is -14787 amp in 2006 the Net cash is -7098The

56

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Net cash from financing Activities in 2005 is -1433766 amp in 2006 is -2559091 Thus it is understood that

The above table shows cash outflow for both the years

CASH FLOW STATEMENT FOR THE YEAR 2008 - 2009

Table 443

Particulars2009

(Rs In Lakhs)2008

(Rs In Lakhs)A CASH FROM OPERATING

ACTIVITIESloss for the period before exceptional item

amp tax -2589492 -4785616Provision for dimunition in the value of

investments 4477303 855420Loss for the year before tax amp after

exceptional item (7066795) -5641036AdjustmentDepreciation 824552 1259048

Loss On sale of assets 58919 -1108

Assets written off 43497 32526Loss On sale of investments -14349 -

Dimunition in the value of investments 4477303 855420Provision for non moving inventories 85322 93789Miscellaneous expenditure written off 13997 25699

Provision for doubt ful debts ampadvances -9828 377751Bad debts amp advances written off 823 21720

Exchange difference 692490 -249563interest amp financial charges 1277431 3851147Income from investments -87980 -214254

interest income -207007 -276667155150 6024513

Operating Profit Before Working Capital Charges 88355 383477

Adjustments (increase)Decrease in Sundry Debtors 693591 38403

(increase)Decrease in inventories 320948 -127133(increase)Decrease in loans amp advances 105386 2797343

(increase)Decrease in Liabilities amp provisions 821446 -1374736

298479 1333877Cash generated from operations 386834 1717354

Direct Taxes paid Received -106814 -76239NET CASH FROM OPERATING 279920 1641115

57

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

ACTIVITIES

B CASH FLOW FROM INVESTMENTParticulars 2009

(Rs In Lakhs)2008

(Rs In Lakhs)Deletions additions to fixed assets

includingCapital Work in progress advances

Adjustments for exchange fluctuation -159935 -217545Proceeds from sales of fixed assets 37850 43604

Income from investments 87980 84240Proceeds from sale of investments 189744 -

Interest Income 207007 27666392646

NET CASH FROM INVESTING ACTIVITIES 392646 -62035

C CASH FROM FINANCING ACTIVITIES

Long term Borrowings 396358 1523514Dividend Paid -1595 -4398Deposit paid -1138 -5756

Interest amp Financial Charges Paid -93718 -1196841299907 316519

NET CASH FROM FINANCING ACTIVITIES 299907 316519

NET CASH FLOW ( A+B+C) 942473 -245596Cash amp Cash equivalents (opening balance) 942473 1895599Cash amp Cash equivalents (closing balance) 1934757 39158

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 1183713 2654306

Exchange (loss)gain on restatement of liability -372386 183012

Conversion of subsidy to investment 43490 435040

INFERENCE

From the above Table Net Cash from operating activities in 2008 is 1641115 amp in 2009 is 279920

In 2008 the Net Cash from investing activities is -62035 amp in 2008 the Net cash is362646 The Net cash

from financing Activities in 2008 is 316519 amp in 2008 is299907 Thus the Net Cash flow in 2008 amp

2009 is 1895599 amp 942473 Compare to 2008 the Net Cash flow in 2009 is is decreased

58

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

CASH FLOW STATEMENT FOR THE YEAR 2009 ndash 2010

Table 444

Particulars2009

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -816321 -4785616Add Exceptional item -3060963

Provisional for dimunition in the value of investment -131550

loss on sale of fixed assets 769445Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary companyExcess liability for interest on loans written back

Provision for claims no longer required written backLoss for the year before tax amp after exceptional item

AdjustmentDepreciation 966744 1259048

Loss On sale of assets 198042 -1104

Assets written off -778192 32526Profit On sale of investments 3061620 -

Dimunition in the value of investments -1706540 855420Excess liability for interest on loans written back 7422 93789

Inventories provision write back 7434Miscellaneous Expenditure written off -Miscellaneous expenditure written off -287192 25699

Provision for doubt ful debts ampadvances 102967 377751Bad debts amp advances written off -312322 21720

Exchange difference 25346 -249563interest amp financial charges -375095 3851147Income from investments 88272 -214254

interest income -82972 -27666936519 6024513

Operating Profit Before Working Capital Charges 309138 383477Adjustments

(increase)Decrease in Sundry Debtors -169289 38403(increase)Decrease in inventories 118789 -127133

(increase)Decrease in loans amp advances 108383 2797343(increase)Decrease in Liabilities amp provisions 169198 1374736

227081 1333877

59

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Cash generated from operations -82057 1717354Direct Taxes paid Received -38884 -76239

NET CASH FROM OPERATING ACTIVITIES -120941 279920Particulars 2010

(Rs In Lakhs)2009

(Rs In Lakhs)

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -121584 -217545Proceeds from sales of fixed assets 801789 43604

Income from investments 88272 84240Proceeds from sale of investments 1087281 -

Interest Income 82972 276661938666 -62035

NET CASH FROM INVESTING ACTIVITIES 1938666 -62035

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital 500000 -

Long term Borrowings 3599947 396358Dividend Paid - -1595Deposit paid -365 -1138

Interest amp Financial Charges Paid -22841 -937183123153 299907

NET CASH FROM FINANCING ACTIV ITIES 3123153 299907NET CASH FLOW ( A+B+C) -1305428 -942473

Cash amp Cash equivalents (opening balance) 2877230 1934757Cash balance regrouped from secured loans 254670 -Cash amp Cash equivalents (closing balance) 1826472 2877230

Disclosure of non cash transaction 2877230 1934757Unpaid Interest 182110 1183713

Exchange (loss)gain on restatement of liability 204899 -372366Conversion of subsidy to investment - 43490

INFERENCE

From the above Table Net Cash from operating activities in 2009 is 279920amp in 2010 is-

120941 In 2009 the Net Cash from investing activities is 62035amp in 2010 the Net cash is

1938666The Net cash from financing Activities in 2009 is 299907 amp in 2010 is 3123153

60

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Thus the Net Cash flow in 2009 amp 2010 is -942473amp -1305428 Thus Compare to 2009 the

cash flow in 2010 is decreased

CASH FLOW STATEMENT FOR THE YEAR 2010 ndash 2011

Table 445

Particulars2011

(Rs In Lakhs)2010

(Rs In Lakhs)A CASH FROM OPERATING ACTIVITIES

Loss for the periodyear -238740 -816321Add Exceptional item -

Provisional for dimunition in the value of investment -346319 -3060963

Profit on sale of fixed assets - 131550Profit on sale of investments in a joint venture amp in

a wholly owned subsidiary company 1404895 769445Excess liability for interest on loans written back - 1708540

Provision for claims no longer required written back - 284192Profit Loss for the year before tax amp after

exceptional item 819836 1245657AdjustmentDepreciation 889490 966744

Loss On sale of assets 471436 198042

Impairment of assets 920 02 -Loss On sale of investments -1403195 -778192

Dimunition in the value of investments - 3061620Excess liability for interest on loans written back - -1706540

Provision for non - Inventories 26031 7434Provision for claims no longer required written back - -287192

Provision for doubt ful debts ampadvances 11922 102967Unclaimed Credit balances written back -16570 -181809

Provisions no longer required written back -12034 -130513Bad debts amp advances written off 098 25346

Exchange difference -46251 -375095interest amp financial charges 255104 204951Income from investments -32396 -88272

interest income -38180 -82972197457 936519

Operating Profit Before Working Capital Charges 1017293 309138Adjustments

61

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

(increase)Decrease in Sundry Debtors -382460 169289(increase)Decrease in inventories -634986 118789

(increase)Decrease in loans amp advances 1127526 15042(increase)Decrease in Liabilities amp provisions 919477 169198

1225495 133740Cash generated from operations -208202 175398

Particulars 2011(Rs In Lakhs)

2010(Rs In Lakhs)

Direct Taxes paid Received -2807 -38884NET CASH FROM OPERATING ACTIVITIES -211009 -214282

B CASH FLOW FROM INVESTING ACTIVITIES

Deletions additions to fixed assets includingCapital Work in progress advances

Adjustments for exchange fluctuation -131460 -121564Proceeds from sales of fixed assets 957909 801705

Income from investments 32396 88272Proceeds from sale of investments 3228491 1087281

Interest Income 38181 829724125517 1938666

NET CASH FROM INVESTING ACTIVITIES 4125517 1938666

C CASH FROM FINANCING ACTIVITIESProceed from issue of preference share capital - 5000

Long term Borrowings -4655568 -3599947Deposit paid -627 -365

Interest amp Financial Charges Paid -15930 -228414672125 3123153

NET CASH FROM FINANCING ACTIV ITIES 4672125 3123153NET CASH FLOW ( A+B+C) -757617 -1398769

Cash amp Cash equivalents (opening balance) 1540253 2664352Cash balance regrouped from secured loans - 254670Cash amp Cash equivalents (closing balance) 782636 1540253

Disclosure of non cash transactionUnpaid Interest 239174 182110

Exchange (loss)gain on restatement of liability 17281 204899Conversion of subsidy to investment 274500 300000

INFERENCE

62

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

From the above Table Net Cash from operating activities in 2010 is -214282amp in

2011 is-211009 In 2010 the Net Cash from investing activities is 1938666 amp in 2011 the Net

cash is 4125517The Net cash from financing Activities in 2010 is 3123153amp in 2011 is

4672125 Thus the Net Cash flow in 2009 amp 2010 is -1398769amp -757617 Thus Compare to

2010 the cash flow in 2011 is decreased

TREND ANALYSIS

Trend Analysis helps to make the comparative study amp to analyze the financial performance

for several years It is performed for five years (2006 -2011)

CALCULATION

Trend Analysis Equation

Y=a + b X

Σ y =n a + b ΣX

Σ x y = a Σ X +

b Σ X 2

Table 451

THE SALES OF

SPIC (2006 -2011)

Note Financial Statement is prepared for 18 months

Diagram451 THE SALES OF SPIC (2006 -2011)

63

Year

Sales ( Rs In Lakhs)

2005 - 2006 32947146 2006 - 2008 15057855 2008 - 2009 3919404 2009 - 2010 4212590 2010 - 2011 17333500

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

Sales (Rs In Lakhs)

32947146

15057855

3919404 421259

173335

0

50000

100000

150000

200000

250000

300000

350000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Sale

s (R

s In

Lak

hs)

INFERENCE The Sales Volume in 2006 is Rs32947146 Lakhs Rs 15057855 Lakhs In 2008 Rs

3919404 Lakhs In 2009 Rs 421259 Lakhs In 2010 Rs 173335 In 2011 Compare to

2010 sales increased in 2011

Table 452

PROFIT LOSS OF SPIC ( 2006 -2011)

Year Profit ampLoss(Rs In Lakhs)

2005 - 2006 -3894764

2006 - 2008 -5641036

2008 - 2009 -7066795

2009 - 2010 -1245657 2010 - 2011 819836

Note Financial Statement is prepared for 18 months

Diagram452

64

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

ProfitLoss (Rs In lakhs)

-3894764

-5641036

-7066795

819836

-1245657

-80000

-70000

-60000

-50000

-40000

-30000

-20000

-10000

0

10000

20000

2005 -2006

2006 -2008

2008 -2009

2009 -2010

2010 -2011

Year

Pro

fit

Los

s (R

s In

Lak

hs)

Inference

The Loss has been incurred Rs 3894764 Lakhs In 2006 Rs 5641036Lakhs In 2008 Rs

7066795 Lakhs In 2009Rs 1245657 Lakhs In 2010 amp RS 819836 Lakhs In 2011 The

Loss has been reduced In 2011 compare to the previous years

Table 453 PREDICTED PROFIT LOSS OF SPIC ( 2011 -2016)

Year Profit Loss (Rs In Lakhs) 2011 - 2012 656401 2012 - 2013 162354 2013 - 2014 2590679 2014 - 2015 3557818 2015 - 2016 4524957

Diagram 453

65

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

656401

162354

2590679

35578184524957

05000

100001500020000250003000035000400004500050000

Profit Loss ( Rs In Lakhs)

2011 -2012

2012 -2013

2013 -2014

2014 -2015

2015 -2016

Year

Profit Loss (Rs In Lakhs)

Inference

The Predicted Profit in 2012 is Rs 656401 Lakhs Rs 1623540 in 2013 Rs

2590679 In 2014 Rs 3551818 Lakhs In 2015 Rs 4524957 in 2016 Compare to the

2012 2013 2014 amp 2015 The predicted Profit in 2016 has been increased

CHAPTER ndash V

51 FINDINGS

1) From the analysis the Current Ratio is increased in 2010 -2011 compare to the

previous years Thus The maintainance of Current Assets amp Current Liabilities are good

2) From the above table amp charts it is understood that the Liquid Ratio is increased in 2010 -

2011 compared to the previous years Thus there is a proper maintainance of Liquid Assets and

Current Liabilities

66

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

3) From the above data analysis it is ascertained that the Fixed Asset Ratio is increased in

2010 -2011 Thus there is a proper proportion of fixed asset and long term funds

4) The working Capital Ratio is increased in 2010 -2011 Compare to previous

years Thus there is a increased proportion but there is some deficit in working capital

5) From the above data interpretation it is shown that the debt equity ratio is decreased

because of quick repayment of long term debts

6) From the above analysis it is shown that Total Asset Turn over Ratio is increased in

2010 - 2011 because of the proper utilization of the assets

7) The propietory Ratio is increased in 2010 -2011 compare to the previous years Thus

there is a good proportion of share holder funds and total tangible assets

8) From the above table and charts The fixed Asset Turnover ratio is increased because

the sale of fixed asset was in a good condition in 2010 -2011

9) From the data analysis it is understood that The Capital Employed Turnover Ratio is

increased in 2010 -2011 compare to 2009 -2010

10) It is known from the previous tables that the Debt To Total Assets Ratio of the company

is decreased in the current year Because of the proper proportion of debts and total assets

11) It is understood from the data analysis that Interest Coverage Ratio is increased in the

Current Year because the profit occurs in 2010 -2011

12) It is known that Comparative Balance sheet of the year 2005 -2006 is as follows the

secured loan of the company has decreased in this year y 029The cash position of the

company is decreased Thus the secured loans are repayed quickly

67

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

13) It is understood from the analysis Comparative Balance sheet of the year 2006 -2008 is

as follows the secured loan of the company has increased in this year 2008 by 2172 Thus

there was not a proper repayment of secured loan

14) It is understood from the analysis Comparative Balance sheet of the year 2008 -2009 is as

follows the secured loan of the company has increased in this year 2009 by 478The Cash

position was decreased Thus there was not a proper repayment of secured loan

15) It is known from the data interpretation Comparative Balance sheet of the year 2009 -

2010 is as follows the secured loan of the company has increased in this year 2010 by

9171The Cash position was increased Thus there was not a proper repayment of secured

loan

16) It is known from the data interpretation Comparative Balance sheet of the year 2010 -

2011 is as follows the secured loan of the company has decreased in this year 2011 by -

2939The Cash position was increased Thus there was a proper repayment of secured

loan

17) From the above table shows that Net Working Capital occurs deficit in 2006 due to the increase of

Current liabilities over Current assets

18) From the above Analysis shows that Net Working Capital occurs more deficit in 2008 than

2006 due to the increase of Current liabilities over Current assets in 2008

19) From the above Analysis shows that Net Working Capital occurs less deficit in 2009 compare

to 2008 due to the little bit decrease of Current liabilities over Current assets in 2009 than 2008

20) From the above Data interpretation shows that Net Working Capital occurs more deficit in

2010compare to 2009 due to the increase of Current liabilities over Current assets in 2010

21) From the above Data interpretation shows that Net Working Capital occurs less deficit in 2011

compare to 2010 due to the little bit decrease of Current liabilities over Current assets in 2011

68

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

22) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

23) From the above Data analysis Cash Out flow occurs in 2005 amp 2006 due to the increase of cash

expenses than cash receipts

24) From the above Data analysis Cash inflow occurs in 2006 amp 2008 due to the decrease of

cash expenses than cash receipts

25) From the above Data analysis Cash inflow occurs in 2008 amp 2009 due to the decrease of

cash expenses than cash receipts

26) From the above Data interpretation it is known that Cash outflow occurs in 2009amp 2010

due to the increase of cash expenses than cash receipts

27) From the above Data interpretation it is known that Cash outflow occurs in 2010 amp 2011

due to the increase of cash expenses than cash receipts

28) From the tables and charts the sales is increased in 2011 due to the good sales methodology

29) From the above analysis it is known that loss occurred all the years except in 2011 because it is

a extra ordinary profit

30) From the above tables amp charts it is understood that predicted profit is higher in 2011 than

previous years

69

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

52 SUGGESTIONS amp RECCOMENDATIONS

1) The firm should speed up its sales to earn more profit and should increases its pace of

production

2) The liquidity position can be improved by avoiding more credit transactions

3) The Current Assets is more than Current Liabilities so Current Liabilities has to be

controlled

4) The Expenses has to be reduced since its increase decreases the profit of the company

5) The Capital Turnover can be increased by investment through expansion

70

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

53 CONCLUSION

The Project was done for evaluating the financial statement of Southern Petro

Chemical Industries (SPIC) ndash Chennai gives clear idea about the financial position The

aim of the study to make the executive to access the implications of their decisions

evaluate amp review the performance amp implement corrective decisions by using analysis

The financial position of the company is improved in 2011 -2012 compare to 2010 -

2011 the expenditure is 178634 in 2010 -2011 amp 17562143 the profitamp loss in 2010 -

2011 is -238740 amp 2806 in 2011 -2012 The miscellaneous expenditure is reduced

compare to previous years The concern can reduce the expenditures

71

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

APPENDIX

BIBLOGRAPHY

BOOKS

Arora PN amp Arora S Statistics for Management Sultan Chand Publication

Third Revised Edition 2006

Reddy TS and Murthy Advanced AccountancyMargham Publication Second

Revised Edition 2007

Wilson Accounting For Management Sci Tech Publication (PVT)

Limited First Edition 2010

Kothari CR Research Methodology New Age International Publishing

Limited New Delhi Second Edition

72

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73

WEBSITES

wwwacademon com

wwwwikipediacom

JOURNALS

Financial Economics

Financial Stability

73