A SUMMER INTERNSHIP

REPORT ON

FINANCIAL STATEMENT
ANALYSIS
OF

FOOD CORPORATION OF
INDIA

SUBMITTED BYASHIRBAD MAJHI

College of IT & Management Education
Roll No - 1506107020
INTERNAL GUIDE
EXTERNAL GUIDE

Dr. Shakti Ranjan Mohapatra

Mukherjee
Principal, CIME.
Manager(ACCOUNTS)

Mr. A.
ASST General

CERTIFICATE FROM THE ORGANISATION

This is to certify that ASHIRBAD MAJHI, student of College

of IT & Management Education, Mancheswar Industrial
Estate, Bhubaneswar has completed his internship report
on the topic of ---FINANCIAL STATEMENT ANALYSIS & has
submitted his report in partial fulfilment of Master in
Business Administration(MBA). He has worked under my
guidance & direction.

Date:
Manager(ACCOUNTS)

Mr. A. Mukherjee
ASST General

CERTIFICATE FROM THE FACULTY

GUIDE

This is to certify that ASHIRBAD MAJHI, student of College

of IT & Management Education, Mancheswar Industrial
Estate, Bhubaneswar has completed his internship report
on the topic of ---FINANCIAL STATEMENT ANALYSIS & has
submitted his report in partial fulfilment of Master in
Business Administration(MBA). He has worked under my
guidance & direction.

Date:
Ranjan Mohapatra

Dr. Shakti
(INTERNAL GUIDE)

DECLARATION
I hereby declare that I have worked on the project- FINANCIAL
STATEMENT ANALYSIS from 06.06.2016 to 05.07.2016 in partial
fulfilment of the requirements for the award of the degree of
Master in Business Administration in College of IT &
Management Education, Bhubaneswar.
All the information that has been collected, analyzed &
documented is authentic possession to me. I would like to
categorically mention that the work here has neither been
purchased nor acquired by any other unfair means. The data &
information existing in the report are accurate & up to date to
the current data, to the best of my knowledge. However, for the
purpose of the project, information already compiled in many
sources has been utilised. All the information in the project
report is true representation of what I have experienced during
the project.

All care has been taken to keep this report flawless and I
sincerely regret if any unintended discrepancies are found in the
report.

ASHIRBAD MAJHI

ACKNOWLEDGEMENT
This project is an authenticated work on Summer Training Project at Food
Corporation of India, RO, BBSR. I would like to thank all the people, who
extended their immense help to complete my project. I would like to
express my gratitude to Mr. A. Mukherjee, ASST General
Manager(ACCOUNTS), FCI, who spent his valuable time to discuss about
the project & his continuous co-operation helped to get on with the
project on a full swing without much hassles.

I would also like to thank Dr. Shakti Ranjan Mohaptra (Faculty Guide) for
his valuable advice and guidance during my project completion. I also
thank to all staff members of the accounts department for helping me to
complete the summer internship program.

Finally, an honourable mention goes to my family & friends for their

understandings and supports on me in completing this project. Without
help of the particular that mentioned above, I would face many difficulties
while doing this project.

TABLE OF CONTENTS
CHAPTER 1: Introduction of the project
Objective of the study
Scope & relevance of the study
CHAPTER 2: ORGANISATION PROFILE

FCI overview
FCI mission, vision, procurement
Organisational structure
PDS
SWOT Analysis

CHAPTER 3: Theoretical Aspects of study

Finance
Meaning & concepts of FSA
Objectives & Types of FA

In this project the benchmark practices has been

assessed. The project studies the FINANCIAL
STATEMENT ANALYSIS OF FCI. The project gives a
detail description of the operational & financial
efficiency of FCI. It covers the analysis of the current
assets & current liabilities used in the organisation.
The project entitled- FINANCIAL STATEMENT
ANALYSIS in FOOD CORPORATION OF INDIA (FCI) is
an attempt to understand & analyse the Financial
statements at FCI. This project includes all the
Parties interested in FSA
Procedure of FSA
Methods of FS

CHAPTER 4: Analytical aspects of the study

Annual Reports
Balance Sheet
Profit & loss A/c
Cash Flow statement
Funds flow statement

CHAPTER 5: Findings & suggestion

Conclusion & BIbliography

OBJECTIVE OF THE STUDY

To have an organisational overview about FCI.
To know the present operational effectiveness of FCI.
To analyse the financial statement ratios.
To simplify the large amount of financial data for
methodical analysis.
To gain expertise in analysing in analysing the
financial data & information practically.

METHODOLOGY:
The methodology used in basically explorative type,
where the study has been taken under available financial
data and discussions with the financial department
officials.
SOURCE OF INFORMATION
Data are collected from individuals, officials, guides views
from Head of section, books on the subject, published
report relevant to the subject. Annual reports, files,
brochures provided by the accounts section & company
website.
PERIOD OF THE STUDY
The period of the study which I have selected for my
project is from 2012-13, 2013-14, 2014-15. I have
analysed the Financial statement policies of FOOD
CORPORATION OF INDIA for the last 3 years.

RELEVANCE OF THE STUDY

Financial statement analysis of FCI has always been
relevant to Govt. Of India. The staff of the corporation
always work under the rules & regulations set up by the
organisation which is confined but as the students we are
free to analyse the data as per our knowledge. So the
result shown in the analysis of the reports may be helpful
or relevant to the organisation which can be analysed by
the finance experts of FCI. It is relevant to me also as a
student as it added more expertise & practical dimension

to my studies which will definiteky be helpful for my

future prospects.
SCOPE OF THE STUDY
As there is no best to all technique about the FINANCIAL
STATEMENT analysis, so this study has been as per the
information held in th financial statement of FCI & the
decision prevailing therein thus this analysis is more to
the FCI than if it is applicable to any other organisation.

CHAPTER 2
FOOD CORPORATION OF INDIA PROFILE
FCI Overview
Operation
PDS
SWOT Analysis

HISTORY OF FCI & ESTABLISHMENT

The Food Corporation of India (FCI) was established on 14th
January,1965 under the Food Corporations Act, 1964. FCI is a
Public Sector Undertaking under the Department of Food &
Public Distribution, Ministry of Consumer Affairs, Food & Public
Distribution, and Government of India (GOI). The Corporation is
the main agency, responsible for execution of food policies of
the GoI. The functions of FCI primarily relate to the Purchase,
Storage, Movement, Distribution and Sale of food grains on
behalf of the Government of India.

OBJECTIVES
1. Food Corporations of India is established under the Food
Corporations Act, 1964 for the purpose of trading in food grains
and other foodstuffs and for matters connected therewith and
incidental thereto.
2. Under Section 13 of the said Act the primary duty of the
Corporation is to undertake the Purchase, Storage, Movement,
Transport, Distribution & Sale of Foodgrains & Other Foodstuffs
and
3. Subject as aforesaid, the Corporation may also with the
previous approval of the Central Government, i) Promote by such means, as it thinks fit, the production of
foodgrains and other foodstuffs.
ii) Set up, or assist in the setting up of, rice mills, flour mills and
other undertakings for the processing of food grains and other
foodstuff and
iii) Discharge such other functions as may be prescribed or as
are supplemental, incidental or consequential to any of the it
functions conferred on.

MISSION

Ensuring food security of nation by maintaining

satisfactory level of operational and
buffer stocks of foodgrains.
Distribution of food grains throughout the country for
Public Distribution System.
Effective Price Support Operations for safeguarding the
interest of farmers.

VISION
To play a significant role in India`s success in transforming the
crisis management oriented food security to a stable security
system to ensure availability, accessibility and affordability of
food grains to all people at all time so that no one, nowhere and
at no time go hungry.

VALUES
Sincerity
Teamwork
Speed
Integrity and fairness in all matter
Transparency and without any fear or favour.
Respect for dignity and potential of individuals.
Loyalty and pride in the corporation
ACCOUNTS
It has been provide under section 34 of the Act that the Food
Corporation of India shall maintain proper accounts & prepare
annual statements of Accounts, Profit & Loss account & Balance
Sheet in such form as may be prescribed.

INTERNAL AUDIT
During the year, Internal audit was conducted by the internal
audit team in 114 District/Region/Zone/Headquarters/offices and
Audit & physical verification has been undertaken in 308 Depots.
Rs 50.37 crores were recovered at the instance of audit during
the year 2013-14. Total 2508 internal paras and 409 PB paras
were raised.

BUDGET
Under section 26 of the Act, the Food Corporation, before the
commencement of such year, shall prepare statement of
program of its activities and financial estimates in respect
therefore for submission to the Central Govt.

DELEGATION OF POWERS
It has been provided in section 37 of the Act FCI may delegate to
the officers of the corporation such of its powers & function
under the Act, as it may deem necessary.

PROCUREMENT
The Govt. Policy of procurement of food grains has the broad
objectives of ensuring Minimum Support Price to the farmers and
also ensuring availability of food grains to the weaker sections of
the society at affordable rates.

MOVEMENT
Movement of food grains are primarily undertaken by Rail and
Road about 90 % of the food grains are moved by Rail. Road
movements are restricted to hill states like J&K, Himachal
Pradesh, Uttarakhand etc.

PUBLIC DISTRIBUTION SYSTEM

(PDS) is an Indian food security system. Established by the Govt.
Of India under Ministry of consumer affairs, Food, and Public

Distribution and managed jointly with the state govts of India. It

distributes subsidized food and non-food items to the Indias
poor. Major commodities distributed include staple food grains
such as wheat & rice through a network of public distribution
shops(also known as ration shops) established in several states
across the country. Food Corporation of India, a Govt based
corporation, procures and maintains the PDS. It is considered to
be the most important food security network. The average level
of consumption of PDS grains in India is only 1 kg per person per
month. The PDS has been criticised for its urban bias and its
failure to serve the poorer sections of the population effectively.
The central & state govt shared the responsibility of regulating
the PDS. While the central govt is responsible for procurement,
storage, transportation & bulk allocation of food grains, state
governments hold the responsibility for distributing the same to
the consumers through the established network of fair price
shops(FPSs). State govts under PDS scheme each family below
the poverty line is eligible for 35 kg of rice or wheat every
month, while a household above the poverty line is entitled to
15 kg of food grain on a monthly basis. A BPL card holder should
be given 35 kg of food grain & the APL card holder should be
given 15 kg of food grain as per the norms of PDS. The PDS of
India is not without its defects. With a coverage of around 40
crores (BPL) families. Deceitful dealers replace good suppliers
received from FOOD CORPORATION OF INDIA with inferior sock
and sell FCI stock in the black market.
There is no set criterion as to which family is BPL and which is
APL. The non ambiguity gives massive scope for corruption &
fallouts in PDS systems because those who are actually meant
to be benefitted are not able to taste the fruits of PDS.
TO IMPROVE THE SYSTEM OF THE PDS.....
Vigilance squad should be strengthened to detect corruption,
which is an added expenditure for taxpayers.
FCI & other prominent agencies should provide quality food
grains for distribution, which is again an added expenditure &
not full proof

Strength-

SWOT ANALYSIS

The corporation has the strength of high level of infrastructure

like storage capacity, technically qualified man power, proper
financial management, well planned procurement and
preservation policy. The management is committed towards
sound corporate governance in all aspects of operations.

Weakness-

Depleting manpower due to large scale retirements followed by

insufficient induction through direct recruitment is the weakness
of the corporation which may adversely affect its operation.

OpportunitiesThe Govt. Of India has introduced the National Food Security Act,
2013(NFSA). This will enhance the operation of the corporation
due to the higher coverage of the population. With the present
experience of the corporation, it is expected that the corporation
can efficiently meet the enhanced level of operation under
NFSA.

ThreatsProductions of food grains are largely dependent upon the

factors like monsoon, Minimum Support Price etc. There are wide
variation in production which puts a challenge to handle the
level of procurement, storage, movement and distribution of
food grains. Similarly, at the time of low production, the
corporation had to import food grains to meet PDS requirement.
With depleting manpower these manpower these wide variation
in operation puts a threat to manage the situation and All the
function of FCI are controlled including job holders held by Govt.
Of India and now it will control State govt.