Cash Flow Statement@ NCL

FINANCIAL MANAGEMENT
INTRODUCTION
Finance is called The science of money. It studies the principles and the
methods of obtaining control of money from those who have saved it, and of
administering it by those into whose control it passes. Finance is a branch of
Economics till 1890. Economics is defined as study of the efficient use of scarce
resources. The decisions made by business firm in production, marketing,
finance and personnel matters form the subject matters of economics. Finance is
the process of conversion of accumulated funds to productive use. It is so
intermingled with other economic forces that there is difficulty in appreciating
the role it plays.
MEANING AND DEFINITION OF FINANCE:

Howard and Uptron in their book Introduction to Business Finance
defined finance as that administrative area or set of administrative function in
an organization which relate with the arrangement of cash credit so that the
organization may have the means to carry out its objectives as satisfactorily as
possible.
In simple terms finance is defined as the activity concerned with the
planning, raising, controlling and administering of the funds used in the
business. Thus, finance is the activity concerned with the raising and
administering of funds used in business.
MEANING AND DEFINITION OF FINANCIAL MANAGEMENT:
Financial management is managerial activity which is concerned with the
planning and controlling of the firms financial resources. An entity whose
income exceeds its expenditure can lend or invest the excess income. On the
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other hand, an entity whose income is less than its expenditure can lend or
invest the excess income. On the other hand, an entity whose income is less than
its expenditure can raise capital by borrowing or selling equity claims,
decreasing its expenses, or increasing its income. The lender can find a
borrower, a financial intermediary such as a bank, or buy notes or bonds in the
bond market. The lender receives interest, the borrower pays a higher interest
than the lender receives, and the financial intermediary earns the difference for
arranging the loan.
Finance is used by individuals (personal finance), by governments
(public finance), by businesses (corporate finance) and by a wide variety of
other organizations, including schools and non-profit organizations. In general,
the goals of each of the above activities are achieved through the use of
appropriate financial instruments and methodologies, with consideration to their
institutional setting. Finance is one of the most important aspects of business
management and includes decisions related to the use and acquisition of funds
for the enterprise.
DEFINITIONS:
Howard and Upton define financial management as an application of
general managerial principles to the area of financial decision-making.
Weston and Brig hem define financial management as an area of
financial decision making, harmonizing individual motives and enterprise goal.
Financial management is concerned with the efficient use of an
important economic resource, namely capital funds
Solomon Ezra & J. John Pringle.
Financial management is the operational activity of a business that is

responsible for obtaining and effectively utilizing the funds necessary for
efficient business operations
- J.L. Massie.
Financial Management is concerned with managerial decisions that
result in the acquisition and financing of long-term and short-term credits of the
firm. As such it deals with the situations that require selection of specific assets
(or combination of assets), the selection of specific liability (or combination of
liabilities) as well as the problem of size and growth of an enterprise. The
analysis of these decisions is based on the expected inflows and outflows of
funds and their effects upon managerial objectives.
Phillippatus.
NATURE OF FINANCIAL MANAGEMENT:

The nature of financial management refers to its relationship with related
disciplines like economics and accounting and other subject matters. The area of
financial management has undergone tremendous changes over time as regards
its scope and functions. The financeFunction assumes a lot of significance in the
modern days in view of the increased size of business operations and the
growing complexities associated thereto.
OBJECTIVES OF FINANCIAL MANAGEMENT:

Efficient financial management requires the existence of some objectives
or goals because judgment as to whether or not a financial decision is efficient
must be made in the light of some objective. Although various objectives are
possible we assume two objectives of financial managements. These are:
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I.
II.
Profit Maximization
Wealth Maximization.
I. Profit Maximization:
It has traditionally been argued that the objective of a company is to earn
profit; hence the objective of financial management is also profit maximization.
This implies that the finance manager has to make his decisions in a manner so
that the profits of the concern are maximized. Each alternative, therefore, is to
be seen as to whether or not it gives maximum profit.
However profit maximization cannot be the sole objective of a company.
It is at best a limited objective. If profit is given undue importance, a number of
problems can arise. There are The term profit is Vague. It does not clarify what exactly it means. It
conveys a different meaning to different people. For example, profit may
be in short term or long term period; it may be total profit or rate of profit
etc.
Profit maximization has to be attempted with a realization of risks
involved.
Profit Maximization as an objective does not take into account the time
pattern of returns.
Profit Maximization as an objective is too narrow.
II. Wealth Maximization:

The readers would appreciate that a company, which has profit
maximization as its objective, may adopt policies yielding exorbitant profits in
the short run which are unhealthy for the growth, survival and overall interests
of the business. A company may not undertake planned and prescribed shutdowns of the plant for maintenance, etc. for simply to maximize its profits in the
short run. If this reduces the life of a plant say by five years, the company is
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ignoring maintenance only at its own peril although it may have greater profits
in the short run. Hence, it is commonly agreed that the objective of a firm
should be to maximize its value or wealth.
According to Van Horne value of firm is represented by the market price
of the company common stock. Normally, this value is a function of two
factors:
a) The likely rate of earnings per share of the company: and
b) The capitalization rate.
SCOPE AND SIGNIFICANCE OF FINANCIAL MANAGEMENT:
Financial Management is essential in all types of organization wherever
the funds are involved, whether profit oriented or non-profit oriented, in a
centrally planned economy and also in a capitalist set-up. It is a must for private
and public enterprises. If Financial Management of a company is bad, there is a
danger of liquidation, even when the company makes high profits.
Financial Management optimizes the output from the given input of
funds. It attempts to use funds in the most productive manner. If proper
financial management techniques are used, most of the enterprises can reduce
their capital employed and improve their return on investment.
The strength of the finance function determines the strength of other
functions since production, marketing etc., are possible only with sound
financial management. Financial Management plays crucial role in making the
best use of resources.
Financial Management today covers the entire gamut of activities and
functions given below. The head of finance is considered to be important ally of
the CEO in most organizations and performs a strategic role. His responsibilities
include:
Estimating the total requirements of funds for a given period.
Raising funds through various sources, both national and international,
keeping in Mind
the cost effectiveness.
Investing the funds in both long term as well as short term capital needs.
Funding day-to-day working capital requirements of business.
Collecting on time from debtors and paying to creditors on time.
Managing funds and treasury operations.
Ensuring a satisfactory return to all the stake holders.
Paying interest on borrowings.
Repaying lenders on due dates.
Maximizing the wealth of the shareholders over the long term.
Interfacing with the capital markets.
Awareness to all the latest developments in the financial markets.
Increasing the firms competitive financial strength in the market
Adhering to the requirements of corporate governance.
ROLE OF FINANCIAL MANAGEMENT:

To participate in the process of putting funds to work within the business
and to control their productivity; and
To identify the need for funds and select sources from which they may be
obtained. The functions of financial management may be classified on the
basis of liquidity, profitability and management.
1. LIQUIDITY:
Liquidity is ascertained on the basis of three important considerations:
Forecasting cash flows, that is matching the inflows against cash

outflows;
Raising funds, that is financial management will have to ascertain the
sources from which funds may be raised and the time when these funds
are needed;
Managing the of internal funds, that is keeping its accounts, with a
number of Banks to ensure a high degree of liquidity with minimum
external borrowing.
1. PROFITABILITY:
While ascertaining profitability, the following factors are taken into account:
Cost control: expenditure in the different operational areas of an
enterprise can be analyzed with the help of an appropriate cost accounting
system to enable the financial manager to bring costs under control.
Pricing: Pricing is of great significance in the companys marketing
effort, image and sales level. The formulation of pricing policies should
lead to profitability, keeping, of course, the image of the organization
intact.
Forecasting Future Profits: Expected profits are determined and
evaluated. Profit levels have to be forecast from time to time in order to
strengthen the organization.
Measuring Cost of Capital: Each source of funds has a different cost of
capital which must be measured because cost of capital is linked with
profitability of an enterprise.
2. MANAGEMENT:
The financial manager will have to keep assets intact, for assets are
resources which enable a firm to conduct its business. Asset management has
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assumed in important role in financial management. It is also necessary for the

financial manager to ensure that sufficient funds are available for smooth
conduct of the business. In this connection, it may be pointed out that
management of funds has both liquidity and profitability aspects. Financial
management is concerned with the many responsibilities which are thrust on it
by a business failures, financial failures do positively lead to business failures.
The responsibility of financial management is enhanced because of this
peculiar situation. Financial management may be divided into two road area of
responsibilities, which are not by any means independent of each other. Each,
however, may be regarded as a different kind of responsibility; and each
necessitates very different considerations. These two areas are:
The management of long-term funds, which is associated with plans for
development and expansion and which involves land, buildings,
machinery, equipment, transport facilities, research project, and so on;
The management of short-term funds, which is associated with the overall
cycle of activities of an enterprise. These are the needs which may be
described, as working capital needs.
FUNCATIONS OF FINANCIAL MANAGEMENT:

The modern approach to the financial management is concerned with the
solution of major problems like investment financing and dividend decisions of
the financial operations of a business enterprise. Thus, the functions of financial
management can be broadly classified into three major decisions, namely:
(1) Investment decisions,

(2) Financing decisions,
(3) Dividend decisions.

The functions of financial management are briefly discussed as under:
1. INVESTMENT DECISION: The investment decision is concerned

with the selection of assets in which funds will be invested by a firm. The assets
of a business firm include long term assets (fixed assets) and short term assets
(current assets). Long term assets will yield a return over a period of time in
future whereas short term assets are those assets which are easily convertible
into cash within an accounting period i.e. a year. The long investment decision
is known as capital budgeting and the short term investment decision is
identified as working capital management. Capital Budgeting may be defined as
long-term planning for making and financing proposed capital outlay.
In other words Capital Budgeting means the long-range planning of
allocation of funds among the various investment proposals. Another important
element of capital budgeting decision is the analysis of risk and uncertainty.
Since, the return on the investment proposals can be derived for a longer time in
future, the capital budgeting decision should be evaluated in relation to the risk
associated with it.
On the other hand, the financial manager is also responsible for the
efficient management of current assets i.e. working capital management.
Working capital constitutes an integral part of financial management. The
financial manager has to determine the degree of liquidity that a firm should
possess. There is a conflict between profitability and liquidity of a firm.
Working capital management refers to a Trade-off between liquidity (Risk) and
Profitability. Insufficiency of funds in current assets results liquidity and
possessing of excessive funds in current assets reduces profits. Hence, the
finance manager must achieve a proper trade-off between liquidity and
profitability. In order to achieve this objective, the financial manager must equip
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himself with sound techniques managing the current assets like cash,
receivables and inventories etc.
2. FINANCING DECISION:
The second important decision is financing decision. The financing
decision is concerned with capital-mix, (financing-mix) or capital structure of a
firm. The term capital structure refers to the proportion of debt capital and
equity share capital. Financing decision of a firm relates to the financing-mix.
This must be decided taking into account the cost of capital, risk and return to
the shareholders. Employment of debt capital implies a higher return to the
shareholders and also the financial risk. There is a conflict between return and
risk in the financing decisions of a firm. So, the financial manager has to bring a
trade-off between risk and return by maintaining a proper balance between debt
capital and equity share capital. On the other hand, it is also the responsibility of
the financial manager to determine an appropriate capital structure.
3. DIVIDEND DECISION:
The third major decision is the dividend policy decision. Dividend policy
decisions are concerned with the distribution of profits of a firm to the
shareholders. How much of the profits should be paid as dividend? i.e. dividend
pay-out ratio. The decision will depend upon the preferences of the shareholder,
investment opportunities available within the firm and the opportunities for
future expansion of the firm. The dividend payout ratio is to be determined in
the light of the objectives of maximizing the market value of the share.
CASH FLOW STATEMENT

The basic financial statements i.e. the balance sheets profit and loss account or
income statement of business reveal the net effect of various transactions on the
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operational and financial position of the company. The balance of assets and
liabilities of an undertaking at a particular point of time. It reveals the financial
states of the company. The assets side of a balance sheet shows the deployment
of resources of an undertaking while the liabilities side indicates its obligations
i.e. the manner in which these resources were obtained. The profit and loss
account reflects of the business operation for a period of time.
A cash flow statement is statement of changes in cash position between
beginning and end of the period. It is statement which summarizes the sources
from which cash payments are made during a particular period of time, say
months or a year. In other words, a cash flow statement shows the various of
cash flows and uses of cash outflows and uses of cash outflow during a period
thus explaining the changes in cash position of the business.
Cash flow statement is prepared from the given balance sheets and other
additional information. The statement of cash flows portrays the sources from
which cash moves out of the concern and the uses to which cash is put on, thus
cash moves out of the concern.
The net effect of such cash movement is shown as net cash flows, which is
added or deducted to the opening balance of cash to give closing balance of
cash. The cash flow statement is superior to funds flow statement as it is
particularly useful to management, credit grantors, investors and others to assess
the cash position of firm. This cash flow statement us very useful to the
management in budgeting cash requirement. Thus the cause of changes in cash
is determined by analyzing the changes in all accounts expecting cash.
CLASSIFICATION OF CASH FLOWS

operating activities
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investing activities
financing activities
OPERATING ACTIVITIES:
Operating activities are the principal revenue activities of the enterprise. Cash
flows from these activities result from transactions and other events that enter in
to the determination of net profit or loss.
Example
Cash receipts from the sale of goods and the rendering of services usually
forms a major share of cash flow
Cash receipts from royalties fees, commission and other revenues
Cash payment of wages and salaries to employees etc.,,
INVESTING ACTIVITES:
These are the acquisitions and disposal of long-term assets (such as plant,
machinery, furniture, land and building) and other investments not included in
cash equivalents.
Example
Cash receipts from disposal of fixed assets
Cash payments to acquire shares- debentures of other enterprise
Cash payments to acquire fixed assets etc.,,
FINANCING ACTIVITES:
These are the activities that result in changes in the size and composition of the
owners capital and borrowings of the enterprise.
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Example
Cash receipts from issue of shares and debentures
Cash receipts from loans raised etc.,
NEED FOR THE STUDY:

No firm can be maintained without inventory management, but the
requirement of inventory differs from firm to firm.
13
Inventory management is needed to every business enterprise because it

indicates liquidity position of the firm.
The problem of inventory management is one of the maintenance, with in
a financial investment, an adequate supply of goods to meet an expected
supply of demand pattern.
Moreover inventory can be one of the indicators of the management
effectiveness on the material management front.
Inventories in Indian industries constitute more than 60% of the current
assets.
NCL LTD is a manufacturing unit with varying with machinery based
product is being produced.
The requirement of capital for each department is very high in an
organization like NCL LTD Therefore, I have undertaken my study in this
organization to understand the requirement of capital and its effective
allocation of resources in financial analysis.
SCOPE OF THE STUDY

The study titled Cash Flow Statement in NCL LTD includes all areas
which involve inventory related activities not only materials department,
it is concerned with purchasing and finance functional also. Inventory
represents major current assets in a manufacturing concern. Inventory is
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necessary for the operation of the production. Sale process of the firm
with a minimum of dislocations. A stock of both raw materials and
working progress is required to ensure that required items are available
when needed. Finished goods inventory must be available to provide a
buffer stock that will enable the firm to satisfy sales demand as it arises.
The study is longitudinal. I consider annual reports for a period of five
years. The present study is an attempt to the Finance Analysis of an NCL
LTD from 2010-2011 to 2014-2015.
The present study on finance analysis is typically devoted to evaluate the
past, current and projected performance of NCL LTD
The study is concerned with the analysis of financial statements such as
balance sheet and profit and loss account of NCL LTD
The present study on finance analysis discloses the position of NCL LTD with
the liquidity view point, solvency view and profitability view point.
OBJECTIVES OF THE STUDY

The primary objective of the study is to judge the financial health and to
determine and interpret the liquidity solvency and profitability position of NCL
LTD, HYDERABAD Analysis of the study also attempts to assess the efficiency
and performance of NCL LTD, HYDERABAD
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To know the earning capacity or profitability of NCL LTD, HYDERABAD To

conduct a quantitative analysis of information in a companys financial
statements.
To determine the financial condition and performance of NCL LTD,
HYDERABAD for the fast five years 2010-2015
To evaluate the financial condition and performance of NCL LTD,
HYDERABAD
To measure
the
solvency
of
the
NCL LTD,
HYDERABAD.
To suggest necessary measures for improving the financial performance.
To study the inventory system at NCL LTD.
To determine and maintain optimum level of inventory management in
Andhra Pradesh Heavy Machinery Engineering Ltd.
To find out reasons for the problems and to evaluate possible ways for
resolving the problem.
To minimize the firms investment in inventories and to maximize profits.
To study and analyze the various categories of inventory items in NCL
LTD.
To offer suggestions for better inventory management in the organization.
METHODOLOGY OF THE STUDY

DATA COLLECTION:
The date can be collected in two forms
1. Primary Data.
2. Secondary Data.
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Area of study:
The study has been conducted at NCL LTD, HYDERABAD.
Research Design:
It is a basic guide line for researchers study. My study involves finance analysis
of NCL LTD, HYDERABAD I have adopted descriptive research design.
Sources of Data:
The data required for the study is collected through primary and secondary
sources.
Primary Data:
The primary Data is also called as first in hand data. But it is not
applicable for the study of financial management.
Secondary Data:
The study in entirely based on the data obtained from the officers,
managers, and staff of NCL LTD.
Managers and supervisors of the organization have also been interviewed
to elicit necessary information on the basis of non-structured schedules.
LIMITATIONS OF THE STUDY:

The reliability of the study depends upon the information furnished by the
officials.
The time for the study is limited to 4 weeks only.
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The study is entirely based on the information given by the stores

department, purchase department, production department and sales
department of NCL LTD.
The study is mostly dependent on the secondary data. Hence, the findings
of the study are based on the accuracy of the data collected from
secondary sources.
The analysis is usually based on historical information and thus indicates
the past performance, which may not always be an indicator of the future
performance.
The difference in definition of items in balance sheet and income
statement make interpretation of ratios very difficult.
The study is concerned in short period, due to which the study may not
detailed in all aspects.
The financial data collected for the study is only from the annual reports
of NCL LTD.
INDUSTRY PROFILE
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CEMENT INDUSTRY IN INDIA

The INDIAN CEMENT INDUSTRY is the fourth largest in the world
and by 2010; it expects to be next to China. With a total of 54 million tons
during 1993 from both large and mini plants. Cement consumption in India is
equal to that of wheat. Innumerable technological development has been taken
place in cement production. The wet kilns of seven - ties were replaced by dry
kilns, reducing fuel cost of 30%. Further improvement in the thermal efficiency
was obtained by installation of preheats and further by addition of
precalcinators.
Finally computerization and quality control of raw material in
optimal usage of fuel and power.
CEMENT INDUSRY ANDHRA IN PRADESH
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Andhra Pradesh, a south Indian state has a hug reserve of limestone and
these are being exploit by major plants. Limestone the prime raw material for
cement industry is available inexhaustible quantities in Andhra Pradesh. Raw
material required for cement manufacture is coal, bauxite, gypsum and fly ash
are available in Andhra Pradesh. One fourth of the total cement grade reserves
of the country are from Andhra Pradesh.
REGION WISE CAPACITY PRODUCTION

The manufacturing of cement requires weight-loosing materials like
limestone, clay and gypsum. The industry has the tendency to be attracted at
point of minimum transportation costs in relation to raw materials.74% of the
total raw material reserves are mainly in states of ANDHRA PRADESH,
MADHYA PRADESH and RAJASTHAN contributes 54.7% of total capacity.
FORECAST OF CEMENT DEMAND

The Indian institute of management has forecasted a minimum demand
of 84-81 million tons and a maximum demand of 107.5 million tons by 200002. The corresponding forecasts by the National Council Of Applied Economic
Research are 93.89 million tons respectively. If economic growth shows further
accelerates, the demand for the cement could be even higher than the projected
levels.
REVENUE FOR GOVERNMENT THROUGHT CEMENT

INDUSTRY
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Cement is a major contribution to the exchequer. The excise revenue

during 1996-97 is at 2,500 crores. Duty on integrated plant is Rs.350 tons
while it is Rs.200 per mini plant.
MAJOR AND MINI CEMENT PLANTS

Many major plants and mini plants are present. Mainly three plants are
under public sector and all other private sectors like Raasi cement,coromandal
cements, for the country as a whole, the demand and supply will be balanced as
the infrastructure constraints of power and transportation, coal shortages shows
no signs of easing. These will lead to lower capacity utilization. The over
demand growth rate is expected to be in the region of 8.5 to 9.5%.
There is no cheap alternative to cement and construction in and
indispensable activity for growth, the producers can afford to pass on at least a
part of these cost increases. The companies in north and east will feel the heat
while those in the west will perform at an average. The south based companies
will be the best performance.
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With the govt. continuing its thrust on infrastructure development,

improving economic activity and housing units the long-term output for the
industry remains positive. Andhra Pradesh scope for mini plants to come up in
large numbers.
Two advantages of mini plants are:
1 Capacity cost per ton of output is low and
2 They can be located in inaccessible access.
MAJOR CEMENTS PLANTS IN ANDHRA PRADESH
PLANT
LOCATION
CAPACITY
RAASI CEMENT
VADAPALLI
17,00,000
ANDHRA PRADESH
VISAKHAPATNAM
5,00,000
CORAMANDEL
DURGAPUR
YERRAGUNTALA
5,00,000
10,00,000
MADRAS CEMENT
JAYANTHIPURAM
12,00,000
PRIYADARSHINI
RAMAPURAM
6,00,000
PANYAN CEMENTS
CEMENT NAGAR
5,31,000
TEXMACO
YERRAGUNTALA
22,00,000
ORIENT
DEVAPUR
4,50,000
KCP
MACHERLA
2,54,000
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TABLE 2.1
MINI CEMENT PLANTS IN ANDHRA PRADESH
PLANT
LOCATION
CAPACITY
NAGARJUNA
MATTAMPALLI
2,16,000
HEMADRI CEMENT
VEDADRI
2,50,000
SAGAR CEMENT
MATTAMPALLI
3,00,000
DECCAN CEMENT
HUZURNAGAR
3,00,000
KAKATIYA CEMENT
DONDAPADU
3,00,000
COROMANDEL
RAMAPURAM
1,20,000
TABLE 2.2
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PRODUCT DESCRIPION
The product is a complex of tangible and intangible attributes,
including
packing,
color, price,
manufacturers,
prestige
of
retailers,
manufacturers and services which buyer may accept as offering satisfaction of

wants and needs.
A product is simply a set of physical and chemical attributes assembled
in recognized form.
TYPES OF CEMENT
There are mainly eight varieties of cement. They vary from each other
in chemical composition and other properties. They are
1
2
3
4
5
6
7
8
Ordinary Portland cement

Portland slag cement
Portland pozzoland cement
Rapid hardening Portland cement
High alumina cement
Oil well cement
White cement
Acid resistant cement
ORDINARY PORTLAND CEMENT
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This is a mixture of limestone, marble, chalk etc., i.e., calcareous &

argillaceous i.e. clay, shale to which other materials like silica, alumna or iron
ore are added. They are burnt at a clinkering temperature and the resulting
clinker is the ground. After burning, only gypsum or air entering agent is added.
PORTLAND SLAG CEMENT

A fine mixture of Portland cement clinker and granulated blast furnace
slag makes Portland cement. The clinker for this form is manufactured in same
manner as for the Portland ordinary cement. The granulated blast furnace slag is
non-metallic product obtained by rapidly chilling or dipping in water, steam or
air. The molten slag tapped from the blast furnace of steel plant. The slag
constituent should be less than 25% or more than 65% of the Portland slag
cement to comply with the requirements. Its special properties make it highly
suitable for marine structure, for structure involving large masses of concrete
such as dams, bridges, for municipals works such foundations and roads.
PORTLAND POZZOLONA CEMENT

This is manufactured in two ways. Either by grinding together Portland
cement clinker and pozzolona such as burnt clay uniformly bending Portland
cement and fine pozzolona used varies 10-25% by weight of cement.
RAPID HARDNING PORTLAND CEMENT

It contains a higher percentage of Tricalcium silicate and secondly it is
more finely grind than ordinary Portland cement. It can attain just in 3 days,
which is attaining in 7 days by OPC. The cement is used is when a structure is
required to carry loads earlier than that would be possible. For example roads,
air fields etc.
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HIGH ALUMINA CEMENT

The major ingredient in this type cement is hydraulic calcium
aluminates. It hardens very rapidly in one day, which takes 28 days by OPC. It
is not recommended for structural used, though it has a high resistance to
chemical attack for sea water and sulphate bearing soils. It makes a good
refractory concrete when used with crush bricks.
OIL WELL CEMENT

This is a special kind of cement for using drilling of oil wells in the
space between the space between the steel liming tubes and the well walls. It
sets slowly in order to give sufficient time reach the large depth of the oil wells.
It also develops strength rapidly and remains stable al high temperature.
WHITE CEMENT
It is primarily used for decorative purpose and in manufacturing of ties.
The raw material is of maximum iron oxide. A variety of colors can be obtained
by the addition of pigments.
ACID RESISTENT CEMENT

With a predominant base of silicates it is characterized by a quick set,
good mechanical strength and a high resistance to most acids, organic chemical,
mineral oils and greases. It is used for binding and joining acid proof bricks and
tiles and in construction of acid resistant industrial floorings.
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CHANGING STRUCTURE OF THE INDIAN CEMENT

INDUSRY
The structural transformation in the Indian cement industry had started
much before when the government started loosening the grip over it by gradual
decontrolling measures. This has transformed the domestic market for cement
from a state driven one to a market driven one in a very short period of less than
10 years. In the early 1980s government was it largest single customer with a
share of 50%in total domestic consumption of cement.
But, by early 1990s its share has fallen to around 20%. Today, it is even
smaller than to the drastic fall in governments capital expenditure. But this loss
of a major customer has not dithered the growth of this industry. In fact, with a
production of 87MT, India is the fourth largest producer after China, Japan and
U.S.A the industry has not only eliminated the need for cement imports but is
also growing as an exporter.
QUALITY
Six strong benefits that make Zuari 43, 53 grade, Vishnu premium and
Vishnu shakti the ideal cement
Higher compressive
Better soundness
Lesser consumption of cement for M-20 concrete grade and above.
Faster deshuttering of form work.
Reduced construction time.
CEMENT PRODUCTION PROCESS
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1 Quarry:
Typically limestone, marl and clays as well as other materials
containing the required proportion of the calcium, silicon, aluminum, and
iron oxides are extracted using drilling and blasting techniques.

Crusher: The quarried material is then reduced in size by compression
and/or impact in various mechanical crushers. Crushers rock is reduced in
size from 120cm to between 1.2 and 8cm. drying of raw material may
also be necessary for efficient crushing and pre-blending.

Conveyor: Raw material is then transported from the quarry using
conveyors, rail wagons or other suitable logistics solutions specific to the
cement plant.
4 Mixing bed:
The crushed limestone and clay is homogenized by
stacking and reclaiming in a long layered stockpile. This material is then
ready for milling and drying in the kiln.

Raw mill: the raw material are milled and dried in a roller mill. Heavy
roller are held over a rotating table and the course material is milled unit
it is fine enough to be carried by air to a homogenizing silo.

Filter: Bag filters comprise filters of either woven fabric or needle felts
to remove particles from kiln exhaust. The exhaust gas from many kilns
is used for drying raw materials, thus improving the energy efficiency of
the plant.
7 Presenters:
Cyclone presenters enable the raw material of cement
production to be preheated before entry into the kiln. This increases the
energy efficiency of the kiln as the material is 20-40% claimed at the
point of entry into the kiln.
8 Kiln: The kiln is designed to maximize the efficiency of the at transfer
from fuel burning to the raw material. In the preheated tower the raw
materials are heated rapidly to a temperature of about 1000 0 C, where the
limestone forms burnt lime in the rotating kiln, the temperature teaches
up to 20000 C, at this high temperature, minerals fuse together to form
predominately calcium silicate crystals cement clinker.
28
9 Cooler: The molten cement clinker is then cooled as rapidly as possible.

The ambient air used to cool the clinker is then fed into the kiln as
combustion air ensuring high utilization of the heat produced.
10 Clinker silo: clinker may be either stored on site in preparation for
grinding to form cement, or transported to other sites.
11 Cement mill: Finish milling is the grinding together of cement clinker,
with around 5%of natural or synthetic gypsum. Other cementations
materials such as slag, flash or other pozzolans may also be incorporated
into the final cement power.
12 Logistics: Final cement may be transported pre-bagged or as a bulk
powder. The method of transport selected varies according to location
and may include transport via truck, rail or ship.
ENERGY CONSERVATION PROJECTS

1. ESP Dust transport system: Investment: Rs150 lakhs
Savings: 0.43 KWH/ MT of clinker
2. cement storage silo vent fan(bag filter)
Investment: Rs. 0.45 Lakhs
Savings: 0.3 KWH/ MT of clicker
29
High efficiency fan incorporated in place of cold conventional fan.

3. R.M. silo vent fan
Savings: 0.264 KWH/ MT
High efficiency fan incorporated in place of cold conventional fan.
4. Fly ash handling system
Investment: Rs. 65 Lakhs
Savings: 0.2.6 KWH/ MT
Fly ash handling system incorporated with latest solid flow feeder
5. Clinker Breaker Delta- Delta starter
The motor is 75KW and it was running with less load (below
50%).The same KW motor is necessary for critical load conditions (cooler jam).
Hence we are arranged Delta star Delta sector. It will works on motor load
conditions, like when there is a load it automatically changes to delta
connection, and when there is no load it will come back to star connection only.
6. Raw mill vent fans:
High efficiency fan incorporated in place of old conventional fan.
30
7. Cement mill vent fans

High efficiency fan incorporated in place of old conventional fan.
8. Coal miller separator
9. Cooler Modification to CIS MFR
Savings: 0.42 KWH/ MT of clicker
Other projects implemented in our plants.
Transfer point dust collecting arrangements.

Energy efficient bulbs at officers.
Motor loading optimization.
Monitoring and control on idle running motors like belt conveyors
automatic water level controllers to pump house.
31
COMPANY PROFILE
32
COMPANY PROFILE:
VISION
The vision statement of the Nagarjuna Cements Limited is

to maintain industry and develop complementary products
and services to strengthen our core business of building
products by:
Fulfillment of market needs with cost effective solutions

for enduring and enhanced customer satisfaction.
Striving for excellence in all that we do.
Innovative solutions to create a world class products and
services.
Fore
casting
collective
wisdom
and
committee
of
employees to create, co-operate and group culture and

values they are proud to be part of.
Maintaining equitable balance between development and
environmental needs of the society that we are part of.
33
The first major venture floated by shri.K.Rama Chandra

Raju and associates was a cement plant which came into
production in late 1984. Which a capital cost of 711 lakhs,
subsequently, this part plant has been expanded at various
intervals.
GROUP PHILOSOPHY
Looking into the large need for housing need in our

country to promoters of NCL group, had decided in 1986, after
the success of the cement plant, that all future growth would be
in housing related activities. Towards his end, the first activity
identified was doors and windows systems, which led to the
setting up of NCL seccolor ltd. After the implementation of this
project, the management decided to increase the cement
manufacturing capacity with Japanese collaboration.
TURN OVER
Total installed capacity per year is 3600 tones, and the

total capacity in value per year is rs.4500 cores.
34
CUSTOMERS
The customers of NCL industries limited are like L&T,

Nuclear power Corporation, Eric sons Telecom ltd, Hindustan
Lever ltd, Cromption Greaves ltd, AAI, SAIL, HPCL, Indian Air
Lines, Wipro and many more.
QUALITY POLICY
The quality policy of the organization is that we at NCL

industries limited are committed to supply products with
consistent
continually
competitive
improving
price.
all
We
shall
aspects
of
achieve
our
this
by
business
performances.
MILE STONE
The organization has received an award, which stood as a

mile stone for the organization as, the M.D of the company has
received the best Industries Award in the year 1996.
ACHIEVEMENTS
35
The achievement of the company was to be treated as it

has no accidents were record in the organization. The company
was targeted and achieved the zeros accident based. Up to
now, no accidents were record in the organisation.
DEPARMENTS IN NCL:
There are
various departments in
the organisation,
operating various functions. They are
1. Mines department
2. Transport department
3. Crusher department
4. Raw mill department
5. Coal mill
6. Kiln department
7. Grind mill
8. Time office and welfare
9. Stores and Purchase department
10.
Mechanical maintenance department
11.
Electrical maintenance
12.
Material handling
36
13.
Quality control department
14.
Finance and accounts department
15.
Administration department
1. Mines department
The organisation is handling this department, as this mine

comprises the raw material as it consists of lime stone. This
mines department will looks after the raw material which is
required for the cement.
2. Transport department
This comes as the raw material which is the lime stone or

another like gypsum will be transporting from one place to
another.
3. Crusher department
Here, the raw material will be broken into pieces on

conveyer belt and till it becomes the very small pieces, the
recirculation process will be looked after by this department.
4. Raw material department

37
It is a storage harbour, where the broken pieces were

dumped into different grades and the mixture of lime stone,
bauxite, and iron ore will be stored and this department will
look after this process.
5. Coal mill
For the purpose of burning the raw material, the coal mill
department will look after the quantity and storing of the coal.
6. Kiln department
Using exit gases the raw material and the bauxite, iron will
be burned, and this will looked after by this department.
7. Grind mill
With different proportions of lime stone, bauxite, iron will

be grinded here and this mill will be storing the powder in this
silos.
38
8. Time office and welfare
Regarding the employees entrance and exists and the

shifts management and the welfare of the employees will be
looked after by the department.
9. Stores and purchase department
This department will looks after the storing of the cement

packs and the purchasing of the raw material or any other
purchases and the purchases and sales of the cement will be
done here.
10. Mechanical maintenance department
This department will looks after maintaining the things

which are required for the materials, and the operating section
of the machines will be done here in this department.
11. Electrical maintenance
Regarding the power generation for the machinery and

any short circuits will be maintained by this department and
39
regarding any problem with power will be inspected by this

department.
12. Material handling
This department will look after the storing and keeping the
material of the cement which has to be received and delivered
and packed material will be handled by this department.
13. Quality control department
This department will be inspecting the quality levels and

maintaining the best quality and graded quality of the cement.
This departments duty is to continuously inspect, check and
maintain the quality of the cement which is required.
14. Finance and accounts department
The finance matters of the product, the cost and regarding

price particulars and the maintenance of the cost and price was
to be maintained by this department.
40
15. Administration department
The administration department does the operations of now

all the other departments are performing and the department
will administer the functions and operations which the other
departments has to performed was been described by the
administration department.
Significance of the topic:
Environment, health and safety policy
NCL Industries Limited is committed to achieve Environment,

Health, welfare & Safety (EHWS) Performance through
Compliance with applicable Environmental, Occupational

Health, Welfare and Safety Legislations and Regulations
Providing Safe and Healthy Environment for all employees
in the organisation.
Establishment
of
procedures
to
identify,
implement,
evaluates and monitors EHWS Performance.

Continual improvement of EHWS-Performance through set
objectives and targets.
Periodical review to ensure that the continues to be
relevant to the organization.
41
EHWS training and orientation to all employees as

appropriate
Environment, Health Welfare and Safety are individuals
responsibility.
Every employee of NCL should take this
responsibility.
Every employee of NCL should take this
responsibility upon him, be alert for possible unsafe

situations/environmental hazards at factory and ensure
that these are eliminated.
Employees are recruited based on their qualifications and

experienced if fresher are recruited they are given on the job
training
and
placed
under
close
supervision.
Selected
employees are sent abroad if machine training is necessary.

Contractors
are
selected
based
on
their
commerce to do the job.

WELFARE MESUREMENT IN NCL
STATUTORY MEASURES
Lighting, Ventilation and Temperature:
42
expertise
and
According to section 13 of the factories Act, provision has

to be made for proper lighting, ventilation and temperature. In
NCL sufficient ventilation has been provided on the shop floors
and other production areas. Adequate ventilation maintained by
circulation of fresh air, reasonable temperature is maintained
which depends upon the circumstances.
Shelters, restrooms and lunchrooms:
Every factory employing more than 150 workers must

provide adequate and suitable shelters or rest rooms and a
lunchroom, with provision of drinking water, where workers can
eat meals brought by them. But in case a canteen is
maintained in accordance with the provision of section 46, it
will be regarded as apart of this requirement. Shelters and rest
rooms were found with well developed and a
hygienic canteen
is provided in the company premises.
First Aid Box:
As per section 45 of the factories act, every factory must

provide and maintain first boxes or cupboards equipped with
the prescribed contents. The number of such boxes or
cupboards must not be lees than one for every 150 workers.
43
This provision exists in NCL and they were readily available and
accessible.
Ambulance facility:
As per the section 45 of factories Act ambulance with the

services of a doctor is provided in NCL. In case there are more
than 500 workers, than an ambulance room of the prescribed
size and containing the prescribed equipments is to be
provided under the charge of qualified medical and nursing
staff. In NCL there is a qualified medical doctor with nurses
providing their services round the clock.
Welfare officer:
As per the section 49(!) (2) Of the act lays down the
statutory appointments of a statutory officer in a factory with
more than 500 workers. In NCL the HR department comprises of
welfare wing with welfare officer.
Canteen facility:
44
According to section 46 of Factories Act rules laid down for

the provision of canteen by the occupier in any specified
factory act rules laid down for the provision of canteen by the
occupier in any factory were more than 250 workers were
employed. There is a well-equipped canteen run by others in no
profit no loss basis. Which provides tea, snacks, and lunch to
employees at substantial rates.
Drinking water:
According to section of the factories Act. NCL lays
standards for providing clean and cool drinking water to the
employees in its factory.
Lavatories and urinals:

Section 19 of the factories act, stipulates that for the first
100 workmen, four lavatories are to be provided and for every
subsequent 50 workmen one additional lavatory must be
provided, in NCL urinals and lavatories are cleaned with
disinfections
after
every
shift
and
sanitary
helpers
are
employed for this purpose.

Washing facilities:
Section 42 of the factories act, lays down that every

factory has to provide adequate and suitable washing facilities
separately for the use of male and female workers. In NCL
45
these facilities were not upgraded because they were providing

the quarters in the company premises only, so that they can
easily wash their cloths
in their quarters only, by using the
washing powder provided by the company.
NON-STATUTORY MEASURES
Hospitalization insurance:
In the event of Hospitalization of an exempted workman,
bills for the expenses reimbursable by the insurance company
who will make reimbursements directly to the workmen as per
the terms of the policy.
Uniform:
Two pairs of uniform will be given to the employees in NCL.
Blue dress for worker category, and light yellowish, orange
dress colour for executive category.
Safety shoes:
It is agreed that apart from continuing the existing
practice of annual issues of safety shoes to all the workmen,
company will provide one set of safety shoes once in a year.
And helmets to all permanent and non-permanent workers and
is compulsory for them to wear shoes while reporting for duty.
46
Failure to wear safety shoes will entail denial of admission into

the factory.
Accident leave:
Those who met with accidents, management provides
accident leave including first aid, reference to appropriate
hospitals when necessary, home visits, wherever considered
necessary, course of treatment, tests, hospitalization decision
to accord accident leave issue certificate for resumption of duty
etc shall vest exclusively with factory medical officer.
Medical checkup:
The company will make arrangements for medical checkup
for the workmen based on the following procedure for physical
fitness.
Concept of welfare
The successful of any organization ultimately

depends up on human relations. The absolutely method of
functioning at the whims and financers of an individual or
group wholes no matter in recent times. Any juridical
management should bear in mind that if machine break
down they can rectify, but if human relations break down
they cannot be easily repaired. The directive principles of
state policy in or constitution refer generally for the welfare
of the people. Welfare in Indian industries implies the
47
provision of medical and educational services congenial work

atmosphere etc. the need for providing such services and
facilities arises from social responsibility of industry, a desire
for
upholding
democratic
values
and
concerned
for
employees.
Welfare covers the families of the workers especially in

India, where because of strong family ties, workers well being
encompasses
that
their
families.
Labour
welfare
implies
providing better working conditions such as proper lighting,

heat control, cleanliness, and low noise level. Toilet and
drinking water facility, canteen and restrooms.
Labour welfare is the hinge on which the door of

production revolves. Through Labour welfare and production
are two different fields. Yet they are depends on each other. The
concept of Labour welfare in an industry comprises of the well
being of the workers, his family and the community in which he
exists. Labour welfare has to be viewed in the positive and
negative angles. In the former case it consists of provision for
the development of the worker so that he can live economically
sound, socially strong and personally comfortable life. In the
second aspect to undesirable consequences and Labour
problem, which have surfaced in the process of transition.
Welfare measures must eliminate risk uncertainty needed to
draw a faire days wage with out any feeling of guilty. Given the
workers economic constraints probably due to large families,
48
organization should provide facilities as transportation, medical

aid, crches and subsidized food required by the workers.
Unions would like to secure several benefits to maintain

their image. The socio political and legal environment and the
economy as also influenced the role of the union in welfare. The
role in Labour welfare streams for the workers need for welfare
services apart front hose available to them as citizens and
members of the community.
Employers provide amenities to discharge their social

responsibilities raise the employees moral, use the work force
more effectively and reduce the turn over and absenteeism,
benefits such as bonus etc. are bound by length of service, thus
ensuring that an employee remain for certain minimum period
at least. Through paternalism may be out fashioned, many
managers fell while others are convinced, that welfare benefits
not only raise employee moral but make it easy fot the
employers to attract and hire competent personnel. Welfare has
to bui9lt a positive image of the organization and facilities
dealing with the unions.
Labour
welfare
in
economics
has
many
different
definitions and not one of them got universal constant. One

such definition is that: it is a voluntary effort of the employer to
improve the living and working conditions of his employees
49
emphasizes being a fair wage and reasonable welfare work for

better wages and shorter hours. It is clear from its added
pronouncement that the spirit of the age and well being of the
employees. Any type of voluntary service will come the sphere
of labour, provided its aims at aiding the workers to work better
and in more congenial environment.
There were days during the industrial revolutions when

workers were operating under most odious and hideous
conditions. Men, women and children were subjected to hard
and continue work for long hours. Then came the days of
industrialization, the employees who were back Benton the
profits, did not care for the benefits of the workers. But as time
passed, it was realized that to get better production and
productivity and also fascinated skilled workers to the industry,
incentives in the form of labour welfare should be prevalent.
Both the employers and employees were mutually benefited on
introducing welfare schemes. The objectives in introducing the
schemes are to evade the tax payment and simultaneously
building up of cordial relations with the employees. The other
aim
is
also
to
counteract
outside
agencies
effect
employees.
TYPES OF WELFARE FACILITIES
Welfare services broadly classifies in to two categories.
50
the
1.
Statutory welfare.
2.
Non-statutory welfare
Statutory welfare
The statutory welfare comprising the legal provisions in

various pieces of Labour legislations under different laws, like
the factories Act, Plantation Labour Act, Contract Labour, Motor
transport workers Act etc.
1. Canteen facility, if there are more than 150 employees.

2. Facility for occasional rest for workers, who work in
standing positions for long hours.
3. First Aid boxes for every 150 workers and ambulance
facility also.
4. Crche, if more women employees are employed.
5. Educational arrangements.
6. Housing facility for workers and their families.
7. Maternity allowances for female employees.
8. Comfortable, clean, ventilated and well-lighted rest rooms
at every places where motor transport workers are
required to halt at nights.
9. Washing facilities.
10.
Uniforms and shoes should be provided.
11.
Paying compensation to the person who met an
accident while working.

51
12.
Provident fund.
13.
Welfare Officers if more than 500 people are
employed.
NON-STATUTORY WELFARE
The non-statutory welfare includes those activities, which

are undertaken by employers for their workers voluntarily.
Many employers, now a days offers the following facilities
voluntarily:
1. Education to the workers
2. Housing
3. Transportation
4. Recreational facilities
5. Credit societies other facilities.
OBJECTIVIES OF WELFARE BENEFITS

The important objectives are
1. To create and improve sound industrial relations
2. To boost up employee morale
3. To motivate the employees by identifying and satisfying
their unsatisfied needs.
4. To provide security to the employees against social risks
like Old age benefits and maternity benefits.
5. To create a sense of belongingness among employees and
to retain them.
52
SAFETY AT NCL
1. Making strategic choices
2. Development policies, procedures and training systems
3. Organisation for safety
4. Analyses of the causes and occurrence of accidents
5. Implementation of the Programme
53
1. Strategic choices: Some of the strategic choices
Managers must determine the level of protection that

whether minimum level or minimum level of protection.
Managers can decide whether a safety programme will
be formal or informal.
Managers can also be practice in developing procedures
or plans with respect to employee safety.
Managers can decide to use the safety of workers as
marketing tool for the organizations.
2. Safety Policy: Specially, a safety policy must contain a

declaration of the organizations intent and the means by
which the intent is to be realized. As a part of the intent
the statement should emphasize for four fundamental
points.
The Safety of employees and the public is of

paramount importance.
Safety will take precedence over expediency.
Every effort will be made to involve all managers,
supervisors, and employees in the development of
safety procedures.
Safety legislation will be complied in the spirit as well
as the letter of the law.
54
3. Organisation for safety:
The third step in evolving a safety programme is to

constitute an organization for safety.
department members involving.
In that committee all
Safety Committee conducts
safety measures once every three months.
Committee is
recognizing unsafe work place and next committee will give

information about unsafe condition of work to management
Company a point safety specialist to design and handle

the
day
to
day
activities
of
the
safety
programme.
Responsibility of employee safety took the HR department

whose task is to coordinate the activities of all those concerned
with safety
4. Causes of accident:
A) Unsafe acts of person:
1. Operating without clearance, failure to head warning.

2. Operating or working at an unsafe speed.
3. Using unsafe equipment, or using equipment unsafely.
55
4. Making safety devises in operative.

5. Failure to use safe attire or personnel protective devices.
6. Due to negligence of the employee.
7. Over confidence is the main cause.
8. Un awareness of employees.
9. Communication gap.
10.
Not following safety guide lines provided by the
organisation.
b) Unsafe mechanical or physical conditions:
1. Inadequately guarded, guards of improper height strength

mesh etc.
2. Unguarded absence of required.
3. Defective, rough sharp, slippery decayed cracked, etc.
4. Unsafely designed, poorhouse keeping congestion, bolted
exits etc.
5. Inadequately lighted, sources of glare etc.
6. Inadequately ventilated, impure oil source, etc
7. Unsafe process, mechanical, chemical electrical, nuclear
etc
5. Implementing the policy:

For implementation, the safety programme must cover.
Procedure for reporting accidents, hazard, fire protection,

firs aid.
56
Arrangement for instructing workers about safe working

methods and for training employees in safety matters.
Good house keeping requirements covering storage
facilities adequate space for machinery and plant, and
the provisions of gang ways.
Special rules for work done at a height in confined
spaces, on height in confined electrical equipment or
unguarded machinery.
The maintenance of equipments and provisions of proper
inspection and testing arrangements.
General rules on safe working habits.
Special rules for internal transport drivers.
Arrangements
for
checking
new
machinery
and
materials.
The provisions of personal protective equipment, and
rules as to its use.
Suggestions on safety matters.
Evaluation effectiveness of the programme: Company is

adopting organic method for measuring the safety.
These
methods attempt to evaluate how well safety programme is

designed and fulfilled of interest in the case, is the merit of
programmer elements and their level of implementation. The
concede in systematic is with the effects of the programme
designed to serve.
57
58
59
THEORITICAL FRAME WORK
CASH FLOW FROM INVESTING ACTIVITIES:

Investing activities are the acquisition and dispose of long term assets and other investments
not included in each equivalents. The separate disclosure cash flows arising from investing activists is
important because the cash flows represent the extent to which expenditure has been made from
resources intended to generate future income and cash flows.
Examples for the cash flows arising from investing activities are:
(a) Cash payments to acquire fixed assets(including intangibles)
60
These payments including those relating to capitalized research and development costs and
self contracted fixed assets.
(b) Cash payments acquire shares, warrants, or debt instrument of other enterprise and interest in
joint ventures (other than payments for those instruments considered to be cash equivalents
and those held for dealing and trading purpose).
(c) Cash receipts from disposal of fixed assets (including intangibles).
CASH FLOWS FROM FINANCIAL ACTIVITIES:

Financing activities are the activities that results in changes in the size and composition of
owners capital (including preference capital in the case of a company)
Financing activities are the activities that results in changes in size and composition of owners
capital (including preference share capital in the case of a company) and borrowing of the company
the enterprise disclosers of the cash flows arising from financing activities is important because it is
useful in predicting claims on future cash flows by provides of funds (both borrowing and capital) to
the company.
Examples of cash flows arising from financing activities are:
Cash proceeds from issuing of shares or other similar instruments.
Cash proceeds from issuing of debentures, loans, notes, bonds and other short term
borrowings.
Cash repayments of amounts of amounts borrowed such as resumption of debentures, bonds,
preference shares.
LIMITATIONS OF CASH FLOW STATEMENTS:

Despite a number of uses cash flows statements suffers from the following limitations
Cash flow statements is based on cash basis of accounting, it ignores the basic accounting
concept of accrual basis.
61
Some people feel that as working capital is wider concepts of funds, a funds flow statements
provides more complete picture then cash flow statement.
Cash flow statements is not suitable for judging the profitability of the firm as non-cash
charges are ignored while calculating cash flows from operating activities.
CONCEPT OF FUNDS FLOW STATEMENT:

Funds flow statements is a summary from that indicates changes in items of financial position
between two different balance sheet dates showing clearly the different sources and applications of
funds. The major purpose of the financial statements is to provide a detailed presentation to the results
of financial management as distinguish from operated management. With summarizes the financing
and investing activities of the enterprises. The statements shows directly information that renders of
the financial reports could otherwise obtained only by making a finance and information published
balance sheet and statement of income and retained earnings.
Balance sheet is statements of financial position. Whereas funds statements are obviously
statements of. Changes in financial position. Balance sheet shows the status on a day. In contrast
funds statements income statements of retained earnings over a period of time they provided the
explanation of why the balance sheet items have changed. The continental financial statements show
mostly the position of accounting, rather then the financial condition of the business in terms of flow
of funds. However, since all financial events are reflected in the conventional statements. It becomes
easy to unearth trends and promotion by the uses of analytical methods like the funds flow statement.
USES OF FUNDS FLOW STATEMENTS:

By highlighting the change in the distribution of the resources of an undertaken the funds
flow statement enables the financial manager to have a clear prospective of the organization financial
strength and veakness, it provides answers to a number of different questions. The uses of a funds
flow statement may be listed as follows.
First:
62
It explains the financial consequences of business of operation. For example, a business may
be earnings use profits but its liquidity positions would by highly unsatisfactory. The funds flow
statement will explain the causes of such a seemingly in recognizable situation by howing what has
become flow of funds to activities considered more beneficial for the efficient working of the
enterprise and which is very essential for the effective managerial control. When balance sheet
presents distorted picture of an understanding because of a number of non-fund transactions the funds
statement would be an illuminating document.
Secondly,
Debt capital is very essential for increase profitability to any enterprise but the creditor or
lender asks the financial manager a number of question in order to ascertained the credit worthiness
and the funds generating capacity of the organization. Also they would like to know in what way the
management has utilized. The funds in the past and how the funds would be utilized in future. The
funds flow statement by providing the required the information of dues would enables the financial
manager to answer such in a benefit manner.
Thirdly,
it acts as an instrument for allocation of the companies secure resources. A proposal funds
flow statement will help to find out how the management is going to allocate resources for meeting
the future productive programs of the business. When a predicated statement is ties to the capital
budget, it will help manager to maintain the financial health of the organization. Future problems
faced by the firm do not arise all of a sudden. They take time to reach a critical stage and elected by a
number of factors. A protected funds flow statement by providing a prospective far considering the
financial implication of evolving issues would help management reserve the favorite trend.
Lastly
it is test for evaluation of the effectiveness use of working capital of management.
Information on the adequacy of working capital will enable the management to decide what possible
steps its should take for effective use of surplus working capital or incase of in adequate working
capital to make suitable arrangements.
63
IMPORTANCE OF FUNDS FLOW STATEMENTS:

Funds flow analysis is an invaluable analytical tool for a financial manager or a creditor for evaluation
of the emplacement of funds by a firm and in determining the sources for such funds. In addition to studying
past flow by means of funds statement based upon forecasts. Such a statements provides an efficient method to
the financial manager to assess the growth of the firm and it results in financial needs, and to determined
the best way to those need in particular, funds flow analysis is very useful in planning intermediate
and long term financing the traditional package of fund accounts and statements through vary
significant statements as such a limited role to play in financial analysis. The balance sheet is a
statement of assets and liabilities on particular date. Similarly the income statement will show in more
detail only the profit or loss, change in owners equity arising during accounting period as result of the
productive and commercial activities in that period. The main criticism against the balance sheet is
that it is merely a stade statement. In order to as creation such major financial transactions or
movement of financial sources of funds. The balance sheet of two periods shown in a separate
statement. The statement is a variously known a funds flow statements statement of sources and
application of funds when got and where gone statement or simply funds statements.
LIMITATIONS OF THE FUNDS FLOW STATEMENTS:

Despite its multiple managerial uses, the funds flow statements suffers from certain
limitations.
As this statement ignores non-fund items, becomes a crud device compare to the
income statement and balance sheet.
The statement does not reveal shifts among the items making up the current assets and
current liabilities it does not tell whether any loss of working capital has unduly we
can the financial position. Only an examination of the balance sheet the end of the
period will show the under effect of the changes therefore the funds flow statement
cant supplant but only supplement conventional financial statement either in whole or
in part.
The information used for the preparation of the funds flow statements is essential
historical is nature though attempted are made to protect the funds statement for the
future period.
Despite these limitations the information supplied by the funds flow statement is really is
valuable and the management in planning capital expenditure, devising dividend and other
financial policies etc., taken in conjunction with ratio analysis provides a rich source of
information regarding possible managerial uses.
64
DIFFERENCE BETWEEN THE FUNDS FLOW STATEMENTS AND CASH FLOW

STATEMENTS
Cash flow statements
(1) It is based on cash basis on accounting
(2) Cash flow statements are concerned
only with the changes in cash position.
(3) Cash flow statement is based on the
narrow concept of funds that is cash
only which is only one component of
working capital.
(4) No such schedule is prepared in the
case of cash flow statement.
(5) It shows the changes of the opening
cash balance in to the closing cash
balance.
(6) The statements start with the opening
cash and bank balances and at ends
with the closing cash and bank balances
in most of the cases.
(7) It does show the changes in the current
liabilities of the enterprise.
(8) In this case the main source of cash in
flow is considerable to be the sales and
not the net profit of the business.
(9) Cash flow statement as a tool of
financial analysis is more useful to the
management in cash planning and short
term analysis.
Funds flow statements

(1) It is based on accrued basis of accounting.
(2) Funds flow statements is concerned with
changes in working capital position between the
two balance sheets.
(3) funds flow statements is based on a wider
concept of funds, i.e., working capital
(4) A schedule of working capital changes is
prepared in the case of funds flow statements.
(5) It shows the changes of not only cash but
also of other current assets like debtors, stock
etc.
(6) The statement does not start with any
opening of balance of any account and does not
even and with any such closing balance of any
account.
(7) It shows the changes in the current liabilities
like sundry creditors, bills payable etc.
(8) In this case, the profit from operation or the
net profit is considered as a principal source of
fund.
(9) Funds flow statement is use in long term
financial analysis and solvency of the firm.
CASH FLOW ANALYSIS:

CONCEPT OF FUNDS:
65
In the present day business environment, the importance of cash management of the concern
is keenly felt in many firms by the management, it need not emphasized that prudent cash
management result in higher yield on capital invested in the company. The funds flow statement port
race a comprehensive picture of various compositions of working capital. The funds flow analysis is
of immense use in long range planning. The funds flow statement reveals the inflow and out flow of
funds (networking capital). A change in the working capital may be due to changes in noncurrent
working capital, but may be enable to meet its current obligations, namely payment of tax or
dividends etc. therefore in making financial plans for a short period the management is mostly
concerned with the statements are cash flows, which provide more detailed information.
METHODS OF PREPARING CASH FLOW STATEMENTS:

1) SOURCES OF CASH (CASH IN FLOWS)
The sources of cash are classified into two namely:
Activities relating or current operations.
Activities relating to financial activities.
(a) CURRENT OPERATIONS(CASH TRANSACTIONS)
Cash sales, goods services, by products, waste etc.

Cash sales of fixed assets, investment.
Collection from customers debtors or bills receivable
Receipts of rent from assets.
Refund of taxes
Receipts of cash dividends, interest on investment etc.
(b) FINANCIAL ACTIVITIES
Issue of shares for cash.

Issue of debentures for cash.
Issue of bills payable for loans.
Discounting of bills receivables etc.
(1) USES OF CASH( CASH OUTFLOWS):

The cash flows items are classified into two categories, namely
Operational activities
Financial activities
(a) OPERATIONAL ACTIVITIES:
Cash purchases of assets, investment

Cash purchases of raw materials
Cash purchases of wages, and other operating expenses
Cash payment of creditors, bills payable, income tax etc.
(b) FINANCIAL ACTIVITIES
Purchase of fixed assets

Redemptions of preference shares, debentures etc
Repayment of long term loans
Cash expenses on extra ordinary repairs of plant and machinery.
66
PREPARATION OF CASH FLOW STATEMENT: The cash flow statement is to be presented

as per the as-3 of the institute of charted accounts of India (icai). The icai issued as-3 in June, 1981 of
the first time. Later in march, 1997 it revises the standard. The model stipulated in as-3 is the widely
accept model for presentation of cash flow statement. All the listed companies / entities whose
financial year end on March, 1996 and there after will be required to give cash flow statement along
with balance sheet at profit and loss account. The above amendment comes into effect immediately
i.e., w.e.f. 15-2-1996.
PROFORMA OF ADJUSTED PROFIT AND LOSS ACCOUNT:

Amount
(Rs)
Particulars
Amount
(Rs)
To Depreciation & Depletion or

Amortization of Fictions and
Intangible Assets
xxx
By Opening Balance (of P &

La/c)
xxx
Good will, Patents, Trade

marks, Preliminary Expenses, etc.,
By Transfer
provisions
xxx
To Appropriation
Earnings
By Appreciation in the value of

fixed assets
xxx
Particulars
of
Retained
xxx
from
excess
Transfer to General Reserves,

Dividend
Equalization
Fund,
Sinking Fund, etc.,
By Dividends Received
xxx
To Loss on Sales of any Non Current or Fixed Assets
By Profit on sale of fixed or non

current assets
xxx
xxx
By Funds from operations

(balancing figures incase debit
side exceeds credit side)
xxx
To Dividends (Including interim

Dividend)
xxx
To Proposed Dividend (if not taken
as a current liability)
xxx
To Provision for Taxation (if not

taken as a current liability
xxx
To Closing balance (of P& L a/c)
xxx
67
To Funds lost in Operations

(balancing figure incase side
exceeds the debit side)
xxx
Total
xxx
total
xxx
PRESENTATION OF CASH FLOW STATEMENT : While preparing the cash flow statement.
Cash flows from operating activities are presented first, followed by investing activities and then
financing activities.
DIRECT METHOD
Format Of Cash Flow Statement
Particulars
A.
Amount
Amount
Rs
Rs
Cash Flows from Operating Activities

Cash Receipts:
Sales
xxx
Interest Received
xxx
Cash payments for
xxx
Purchases
xxx
Operating Expenses
xxx
Interest payments
xxx
Income taxes
xxx
xxx
xxx
Net Cash Flows from Operating Activities

B.
Cash Flows from Investing Activities
xxx
Sale of Plant Assets
xxx
Sale pf Investments
xxx
Purchase of Plant Assets
xxx
Purchase of Investments
xxx
Net Cash Flow used by Investing Activities
xxx
xxx
68
C.
Cash Flows from Financing Activities
xxx
Repayment of Bonds and Debentures
xxx
Issue of Common Shares
xxx
Dividend paid
xxx
Net cash flows Financing Activities

Net Increase/Decrease in cash
Format Of Cash Flow Statement

Particulars
A.
Amount
Amount
Rs
Rs
Cash Flow from Operating Activities:

xxx
Net Income
Adjustments to Reconcile Net income to Net cash
Provided by Operating Activities:
xxx
Depreciation
xxx
Gain on sale of Investments
xxx
Loss on sale of Plant Asset
xxx
Increase in Current Assets
xxx
Decrease in Current Liabilities
xxx
Net Cash Flows from Operating Activities
xxx
xxx
B. Cash Flow from Investing Activities:
xxx
Sale of Plant Assets
xxx
Sale of Investments
xxx
Purchase of Plant Assets
xxx
Purchase of Investments
xxx
Decrease in Current Assets

Increase in Current Liabilities
xxx
xxx
69
xxx
Net Cash Flows used by Investing Activities
xxx
C. Cash Flows from Financing Activities:

Repayment of Bonds and Debentures
Issue of common shares
Dividends paid
xxx
Net Cash Flows from Financing Activities
Net Increase/Decrease in cash
PERFORMA OF A FUNDS FLOW STATEMENT

Statement of sources and applications of funds
Sources
Income
from
business
Rs
Applications
Xxxx
Income
operations(profit)
Issue
of
shares
of
debentures
from
business
Xxxx
operations(loss)
at
par
Xxxx
(discount/premium)
Issues
Rs
Redemption
of
share
at
Xxxx
Redemption of debentures at par
Xxxx
par(discount/premium)
at
par
Xxxx
(discount/premium)
(discount/premium)
Long term and medium loans taken
Xxxx
Payment of loans
Xxxx
Sale of investments
Xxxx
Purchases of investment
Xxxx
Non-trading income
Xxxx
Non-trading payment
Xxxx
Sale of fixed assets
Xxxx
Dividend paid
Xxxx
Total
Xxxx
Total
xxxx
Sources-applications= increase in working capital.

Application-sources= decrease in working capital
70
PERFORMA OF STATEMENTS OF CHANGES IN WORKING CAPITAL

Effect in working capital
Previous
year
Current
Year
Cash in hand
Xxx
xxx
Cash at bank
Xxx
xxx
Bills Receivable
Xxx
xxx
Sundry Debtors
Xxx
xxx
Temporary Investments
Xxx
xxx
Stock or Inventories
Xxx
xxx
Prepaid Expenses
Xxx
xxx
Accrued Incomes
Xxx
xxx
Total Current Assets
Xxx
xxx
Particulars
Current Assets
71
Increase
Decrease
Current Liabilities
Bills Payable
Xxx
xxx
Sundry Creditors
Xxx
xxx
Outstanding Expenses
Xxx
xxx
Bank Overdraft
Xxx
xxx
Short term advances
Xxx
xxx
Dividend Payable
Xxx
xxx
Proposed Dividend *
Xxx
xxx
Provision for Taxation *
Xxx
xxx
Total Current Liabilities
Xxx
xxx
Working Capital (CA - CL)
Xxx
Net Increase / Decrease in Working

Capital
Xxx
xxx
xxx
xxx
xxx
xxx
xxx
Working capital = current assets- current liabilities; net increase/decrease in working capital.
CURRENT ASSETS:
The term current assets includes cash and other assets that are expect to be convert into cash
or consumed in production of goods or rendering of services in the normal course of business.
However, the best definitions of the term current assets has been given by gray in the following
words. For accounting purpose, the term current assets is used to designate cash and other assets or
resources commonly identified as those, which are reasonable expected to be realized in cash or soled
consumed during the normal operating cycle of the business the board categories of current assets
are:
Cash including fixed deposits with banks.

Accounts receivables, trade debts and bills receivables.
Inventory stock of raw material, work-in-progress, finished goods stores and spare parts.
Advances recoverable the advances given to suppliers of goods and services or deposit with
government or other public authorities, custom, parts authorities, advance income tax.
Prepaid expenses, cost of unexplored services, insurance premium paid in advance.
72
CURRENT LIABILITIES
The term current liabilities is used principally to designated such obligation whose
liquidation is reasonable expected to require the use of assets classified as current assets in the same
balance sheet or the creation of other liabilities or those expected to be satisfied with in relatively
short period of time usually one year. However, these concepts of current liabilities as all obligations
that will require within the coming year of operating cycle whichever is longer. The use does existing
current assets.
The creation of the current liabilities. In other words, the more fact that an amount is due
within a year does not make it current liabilities. For example, debenture due for redemption with in a
year of the balance date will not be taken as a current liability of they are to be paid out of the
proceeds return on account of debentures redemption fund investments. The term current liabilities
also includes amounts sea part or provide for any know liability or which the amount cant be
determined with substantial accuracy called provision rather than liabilities.
The broad categories of current liabilities are:
Accounts payable, bills payable and trade creditors.
Out standing expenses, expenses for with services have been received by the payment have
not been made.
Bank over drafts.
Short-term loans from banks which are payable with in one year from the date of balance
sheet.
Advanced payment received by the business for the service to be rendered or goods to be
supply in future.
NON CURRENT ASSETS

All assets other than current assets come with in the categories of non-current assets. Such
assets includes goodwill, land and buildings, plant, machinery, furniture, long-term investments,
patent rights, trade marks, debit balance of the profit and loss account, discount on issue of shares and
debentures, preliminary expenses etc.
NON-CURRENT LIABILITIES
All liabilities other than current liabilities come with the category of non-current liabilities.
They includes share capital, long term loans, debentures and share premium, credit balances of the
profit and loss account, revenue and capital reserves
73
DATA ANALYSIS AND

INTERPRETATION
74
CASH FLOW STATEMENT AS PER ACCOUNTING STANDARD-3

FOR THE YEAR 2010-11
Description
75
(Rs in lakhs)
Current Year Previous

2011-2010
2010-2009
Year
A) CASHFLOWFROM
OPERATING ACTIVITIES
Net
profit
before
tax
and
extraordinary items
Adjustment for depreciation
Adjustment for interest paid
Adjustment for interest received/
599.98
854.86
17.08
16.15
77.83
61.51
other income
Operating profit before working
(135.40)
(75.02)
559.49
857.50
(136.75)
(137.14)
liabilities and provisions

Cash generated from operations
Interest paid
Interest Received/ other income
Net cash flow operating Activities
Prior period Adjustments (Net)
(240.36)
(201.94)
(49.74)
(20.29)
130.92
(137.57)
Expr(-)
Provisions with drawn
Provision for Taxation
Provision for FBT
Provisions
263.56
360.56
(77.83)
(61.51)
135.40
75.02
321.13
374.07
0.77
13.33
capital changes
Decrease in unsecured loan
Increase in current assets and loans
and advances
Deferred Tax asset
Increase/(Decrease) in current
B)CASH
FLOW FROM
OPERATING
ACTIVITIES
Purchase of fixed Assets
(210.671)
(265.75)
Capital work-in-progress
(7.25)
(1.38)
49.75
20.29
Decrease of Fixed assets
76
Net cash used in investing Activities

C)CASH
FLOW
FROM
FINANCING
ACTIVITIES
Increase/ (Decrease) in loans from banks (42.53)
(20.87)
and institutions
Net Increase in cash &Bank (A+B+C)
Opening balance of cash and bank
(18.45)
(7.65)
1.40
0.15
(62.00)
(25.95)
(54.44)
28.55
(2.58)
1.60
Closing balance of cash and bank
64.91
62.33
INTERPRETATION
77
64.91
Net profit before tax becomes reduced from NBT is 854.86 to 599.98 in
2007-2008.
Here the net cash from operating activities become increased from (1.00)
in to 113.86 in because the activities can be performed in an effective
manner.
Investing activities are the activities it helps to know where the
investment to be made. In this particular year investment becomes raised
from (25.95) in to(62.00)
Cash flow from investing activities are also increased from 28.55 in to
(54.44) in because of long term borrowing.
CASH FLOW STATEMENT AS PER ACCOUNTING STANDARD

FOR THE YEAR 2008-09 ( Rs in lakhs)
78
Description
Current Year
2012-2011
Previous Year 20112010
A) CASH FLOW FROM OPERATING

ACTIVITIES
Net profit before tax and extraordinary

items
599.98
476.71
19.16
17.08
55.76
77.83.
Adjustment for interest received/other

income
(87.08)
Operating profit before working capital changes

Decrease in unsecured loans
Increase / decrease in current assets
&loans &advances
Increase/ Decrease deferred tax asset
Increase/ Decrease (-)in current liabilities
&provisions
cash generated from operations
Interest paid
Interest received / other income
(12.17)
(135.40)
559.49
464.54
(121.46)
(136.75)
264.90
(240.36)
128.80
181.41
(49.74)
130.92
453.66
918.21
(55.75)
87.08
Net cash flow from operating activities
31.33
135.40
79
57.57
321.13
0.77
0
(210.67)
(7.25)
(39.86)
49.75
0
1.08
9.07
(102.00)
(1.40)
(102.98)
(151.50)
(44.10)
2.06
(295.93)
263.56
(77.83)
949.53

Earlier provisions
provision for taxation
Provision for FBT
Provisions
Differed Tax asset (Net)
Transitional gratuity s
Prior period adjustment
CASH FLOW FROM OPERATING
ACTIVITIES
(40.49)
(389.73)
559.75
(207.26)
113.86
(B) CASH FLOW FROM INVESTING

ACTIVITIES
(58.30)
(42.53)
28.53
Decrease of fixed assets

2.75
CASH FLOW FROM INVESTING
ACTIVITIES (B)
(C) CASH FLOW FROM FINANCING
ACTIVITIES
Increase /Decrease (-) in loans from banks
&institutions
Net increase in cash &Bank(A+B+C)
Opening balance of cash &Bank
Closing balance of cash &Bank
(20.87)
(27.03)
62.00
371.92
(54.44)
904.65
62.33
966.98
80
1.40
(2.58)
64.91
62.33
INTERPRETATION
Net profit before tax becomes reduced from NBT is 599.98 to 476.71 in 200809.
Here the net cash flow from operating activities become increased from
113.86 in to 559.75 in.
Net cash used in investing activities are reduced highly from 62.00 in to
(27.03) in
The cash flow from financing activities are become increased highly from
(54.44) in to 316.17 in

(Rs in lakhs)
81
Description
Current Year
2013-2012
Previous Year 20122011
A) CASH FLOW FROM OPERATING

ACTIVITIES

items
476.71
619.711
20.00
19.65
97.21
55.75
Adjustment for interest received/other

income
Operating profit before working capital
changes
0.00

&loans &advances
Increase/ Decrease (-)in current
liabilities &provisions
0.00
(121.46)
(1705.48)
264.90
-----------
128.80
181.41
(1451.01)
----------------------(714.69)
78.40
(4.54)
1.08
9.07
(307.00)
0.00
0.00
0.83
(102.00)
(102.00)
(1.40)
(151.50)
0.00
22.81
(44.10)
2.06
(209.50)
-----------(924.19)
(10.75)
82
74.91
-----------551.62
(144.32)
(0.83)
399.62

Earlier provisions
Provision for FBT
Provisions
Deferred Tax asset (Net)
Transitional gratuity s
ACTIVITIES
ACTIVITIES
117.21
-----------736.32
(58.30)
551.62
-----------(1005.27)
(389.77)
----------615.50
ACTIVITIES (B)
(58.30)
(28.53)
0.00
2.75
----------(27.02)
----------(10.75)
(C) CASH FLOW FROM

FINANCING ACTIVITIES
Increase /Decrease (-) in loans from
banks &institutions
Paid interest
118.24
371.92
(97.21)
(55.75)
21.03
(913.91)
966.98
53.07
83
316.17
(904.65)
62.33
966.98
INTERPRETATION
Net profit before tax becomes raised from 476.71 in to 619.11 in

because of the expenditure of the previous year is low.
Cash flow from operating activities becomes increased from 615.50 in
to (924.19) in
Net cash used in investing activities are reduced from (27.02) to
(10.75).
Cash from financing activities are become reduced from 316.17 in to
21.03

(Rs in lakhs)
84
Description
Current Year
2014-2013
A CASH FLOW FROM OPERATING

ACTIVITIES
Previous Year
2013-2012
822.23`

items
619.11
19.81
20.00
108.24
97.21
117.21
128.05
-----------950.28

changes
-----------736.21
(120.83)
(144.32)

&loans &advances
(749.52)
(1705.48)

Increase/ Decrease (-)in current
liabilities &provisions
(63.55)
(0.83)
308.9
(625.81)
----------
------------------------- -------------324.47
(714.69)
78.40

Earlier provisions
0.00
18.27
(360.00)
0.00

ACTIVITIES
ACTIVITIES
0.00
0.83
(328.49)
22.81
85
(209.50)
(924.19)
(4.02)
(44.21)
(8.81)
(1451.01)
(4.54)
(307.00)
(50.31)
63.55
Provisions
399.62
(10.75)
0.00
0.39

ACTIVITIES (B)
0.00
(52.63)
(10.75)
(C) CASH FLOW FROM

banks &institutions
Paid interest
157.73
(108.24)

118.24
49.49
(7.16)
53.07
45.91
86
(97.21)
21.03
(913.91)
966.98
53.07
INTERPRETATION: (2010-11)
The Net profit before tax become increased from 619.11 in to
822.23 in .
Cash flow from operating activities in is (924.19) to is (4.02) it
reduced.
Cash flow from investing activities became increased from (10.75)

in to (52.63) in Because of purchasing of fixed assets.
Cash flow from financing activities is increased from 21.03 in to

49.49 in .

(Rs in lakhs)
87
Description
Current Year
2015-2014
B CASH FLOW FROM OPERATING

ACTIVITIES
Previous Year
2014-2013
945.76

items
122.29
93.98
822.23
19.81
115.67
108.24
-----------1061.43

changes
Decrease/Increase in long term borrowings
Increase(-) / decrease in long term loans
&advances
128.05
-----------950.28
(120.83)
(217.31)
51.62
Increase(-)/ Decrease in other noncurrent

assets
Increase(-)/ Decrease in current assets
Increase(-)/ Decrease deferred tax asset
Increase(-)/ Decrease in trade payables
Increase(-)/ Decrease in other current
liabilities
Increase(-)/ Decrease in short term
provisions
(18.38)
2.58
(369.82)
(10.97)
110.23
0.49
23.72
(803.72)
(63.55)
(158.67)
(142.16)
(482.03)
-----------
608.93
------------
(625.80)
------------
Net cash flow from operations

579.40
Exceptionals items
107.61
Earlier provisions
0
18.27
Provisions
88
324.48
(323.00)
(360.00)
(50.31)
(63.53)
(204.42)
(328.49)
10.97
ACTIVITIES
ACTIVITIES
----------374.98
(44.21)
(8.81)
(19.00)
(3.67)

ACTIVITIES (B)
----------(9.01)
0.39
0
----------(22.68)
------------(52.63)
(C) CASH FLOW FROM

banks &institutions
Paid interest
(289.45)
(93.38)
(382.83)
(30.53)
45.92
15.39

89
(108.24)
(49.49)
(7.18)
53.09
45.93
INTERPRETATION
The net profit before tax is raised slightly than previous year because of
the sources and applications of the company becomes comparable to each
year
Cash from operating activities are raised from (4.01) in to 374.98
The investing activities are decreased from (52.63) in to (22.68)
The cash from financing activities are increased because of the proceeds
from long term borrowing
The net profit after tax becomes reduced and it leads the company
financial position becomes low and it effects the growth of the company.
90
FINDINGS AND SUGGESTIONS
FINDINGS
91
From the statements available, the cash flow from operating activities
become more unreliable to the company.
Investment on purchase of fixed assets are to be increased.
Differed tax are to be raised year by year which increases the high
investment on operations.
Loan from banks are continuously raise year by year which decreases the
credit worthiness of firm.
Interest on the investment is paid high year by year when compared with
previous year.
The bank cash balances are to be reduced continuously.
Work-in-progress is to be raised it leads to over investment on it.
A ration 1:1 has been suggested as the bench mark for Quick ratio. The
Liquid Ratio and absolute liquidity ratio of the company are satisfactory;
provided the companys drawing Limits with banks in cash credit
accounts etc are considered. This is because while considering the
liquidity assets, these drawings right with bank also provide liquidity.
The following ratios depends upon the sales turnover of the company and
are as follow.
From the year 2010-2012 there is a significant drop in the net profit
position of the company is satisfactory on an overall basis. But negative
in the year 2008, after reduce the losses being increase the sales turn over.
The ratio or return on total assets has decreased there is a negative return
in 2008.
From the years 2010-2011 the debtors turnover ratio in NCL ltd; is
highly satisfactory. This is due it implementation of cash and carry policy
by the company.
The profit after tax is negative in the year 2008. This due to increase in
raw material cost of 75 to 103 crores. There is also increase in small
investment in manufacturing, selling administrative expenses, excise
duty, tax, interest and deprecation.
Though there is increase in sale of products and services the company
overcome the loss in 2010 and present position is satisfactory.
Sales and the profitability ratios are satisfactory.
92
SUGGESTIONS
Investment on short term provisions are high it should be better to control
the limit on these.
Its better to invest the amount rather than the purchase of fixed assets.
Tax is the mandatory but here the tax paid very high to regulate the tax
the company has to reduce the investment on operating activities.
Reserves to be increased for decreasing the taking loan from banks.
93
The payments should be paid before the due date to reduce the interest
amount.
Investments on various activities are lead to reduce the cash&bank
balances, to control those investments it leads better maintaining of the
cash&bank balance
Try to complete the production with low work-in-progress leads to better
financial position of firm.
I would like to give few suggestions to NCL ltd; Suggesting using trendy
machinery with new techniques for good productivity.
Suggesting taking contract with the transportation company up to
requirement, so that we can control cost of production.
Suggesting to conduct training development programs for workers to
providing awareness about new machinery and usage, time management,
and about best utilization resources, company achievements, vision and
mission.
Its performance and working condition is satisfactory from all the
corners.
I suggested to NCL ltd; to improve operational efficiency in production.
The Net Assets of the company are to be efficiently used.
BIBLIOGRAPHY
BOOKS
Management
Financial Management
Financial Management
By . S.K.R. Paul
By . S.N. Maheshwari
By. R.K. Sharma & Gupta
JOURNALS:
94
Business India
Business today
The management account
The economic time
NEWS PAPERS:
Business line
WEBSITES:
www.ncl.com
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FINANCIAL MANAGEMENT

MEANING AND DEFINITION OF FINANCE:

Financial management is the operational activity of a business that is

NATURE OF FINANCIAL MANAGEMENT:

OBJECTIVES OF FINANCIAL MANAGEMENT:

II. Wealth Maximization:

ROLE OF FINANCIAL MANAGEMENT:

Forecasting cash flows, that is matching the inflows against cash

assumed in important role in financial management. It is also necessary for the

FUNCATIONS OF FINANCIAL MANAGEMENT:

(1) Investment decisions,

(3) Dividend decisions.

1. INVESTMENT DECISION: The investment decision is concerned

CASH FLOW STATEMENT

CLASSIFICATION OF CASH FLOWS

NEED FOR THE STUDY:

Inventory management is needed to every business enterprise because it

SCOPE OF THE STUDY

OBJECTIVES OF THE STUDY

To know the earning capacity or profitability of NCL LTD, HYDERABAD To

METHODOLOGY OF THE STUDY

LIMITATIONS OF THE STUDY:

The study is entirely based on the information given by the stores

CEMENT INDUSTRY IN INDIA

Finally computerization and quality control of raw material in

optimal usage of fuel and power.

CEMENT INDUSRY ANDHRA IN PRADESH

REGION WISE CAPACITY PRODUCTION

FORECAST OF CEMENT DEMAND

REVENUE FOR GOVERNMENT THROUGHT CEMENT

Cement is a major contribution to the exchequer. The excise revenue

MAJOR AND MINI CEMENT PLANTS

With the govt. continuing its thrust on infrastructure development,

MAJOR CEMENTS PLANTS IN ANDHRA PRADESH

MINI CEMENT PLANTS IN ANDHRA PRADESH

manufacturers and services which buyer may accept as offering satisfaction of

Ordinary Portland cement

ORDINARY PORTLAND CEMENT

This is a mixture of limestone, marble, chalk etc., i.e., calcareous &

PORTLAND SLAG CEMENT

PORTLAND POZZOLONA CEMENT

RAPID HARDNING PORTLAND CEMENT

HIGH ALUMINA CEMENT

OIL WELL CEMENT

ACID RESISTENT CEMENT

CHANGING STRUCTURE OF THE INDIAN CEMENT

CEMENT PRODUCTION PROCESS

Typically limestone, marl and clays as well as other materials

containing the required proportion of the calcium, silicon, aluminum, and

iron oxides are extracted using drilling and blasting techniques.

also be necessary for efficient crushing and pre-blending.

The crushed limestone and clay is homogenized by

stacking and reclaiming in a long layered stockpile. This material is then

ready for milling and drying in the kiln.

it is fine enough to be carried by air to a homogenizing silo.

Cyclone presenters enable the raw material of cement

9 Cooler: The molten cement clinker is then cooled as rapidly as possible.

ENERGY CONSERVATION PROJECTS

High efficiency fan incorporated in place of cold conventional fan.

7. Cement mill vent fans

Other projects implemented in our plants.

Transfer point dust collecting arrangements.

The vision statement of the Nagarjuna Cements Limited is