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CONTENTS

chapter Particulars Page


number
Certificate

Declaration

Acknowledgement

Executive summary

1 Introduction

2 Research Methodology

3 Review of Literature

4 Results and Discussion

5 Suggestions and Conclusion

Reference

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INTRODUCTION

FINANCE
Finance is the process of commission of accumulated funds to productive use. Finance
helps to direct flow of economic activity and facilitates its smooth operation. Finance is the agent
that produces this result. There are many definitions for finance among them the best was of
Howard And Upton defines finance as “The administrative areas or assets of organization
which have to do with management of flow of cash so that the possible and at the same time
meet its obligations as they become due”. Finance is concerned with the task of providing funds
to the enterprises on the item that is most favorable toward the attainment of the organization
foals objects. The function finance is merely furnishing funds to the organization. Finance has a
boarder meaning and it covers financing planning, forecasting of cash receipts and disbursement,
rising of funds, use and allocation of funds and financial control.
Financial Management
Financial management is the managerial activity; which is concerned with planning and
controlling of the firm’s financial resources. The subject of finance management is of immense
interest both to academician and practicing managers.
The practicing managers All interested in this subject become the most crucial decision of the
firm All those which results to the finance and on understanding of theory of finance
management provides them conceptual analysis insights to make these decision skill fully.
Definitions Of Financial Management
1. “Financial management is concerned with the efficient use of an important resource namely,
capital funds” .-EZRA SOLOMAN.
2. “Financial management is concerned with the efficient managerial decisions that result in the
acquisition and financing of long term and short term credits for the firm. “PHILLIPPATU’’
INVENTORY MANAGEMENT:
Inventory management is the supervision of non-capitalized assets (inventory) and stock
items. Inventory management is a complex process, particularly for larger organizations, but the
basics are essentially the same regardless of the organization's size or type. In inventory
management, goods are delivered into the receiving area of a warehouse in the form of raw
materials or components and are put into stock areas or shelves.

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Compared to larger organizations with more physical space, in smaller companies, the
goods may go directly to the stock area instead of a receiving location, and if the business is
a wholesale distributor, the goods may be finished products rather than raw materials or
components. The goods are then pulled from the stock areas and moved to production facilities
where they are made into finished goods. The finished goods may be returned to stock areas
where they are held prior to shipment, or they may be shipped directly to customers.
Inventory management uses a variety of data to keep track of the goods as they move
through the process, including lot numbers, serial numbers, cost of goods, quantity of goods and
the dates when they move through the process.
Inventory management techniques:
Inventory management uses several methodologies to keep the right amount of goods
on hand to fulfill customer demand and operate profitably. This task is particularly complex
when organizations need to deal with thousands of stock keeping units (SKUs) that can span
multiple warehouses. The methodologies include:

 Stock review, which is the simplest inventory management methodology and is generally
more appealing to smaller businesses. Stock review involves a regular analysis of stock on
hand versus projected future needs. It primarily uses manual effort, although there can be
automated stock review to define a minimum stock level that then enables regular inventory
inspections and reordering of supplies to meet the minimum levels. Stock review can provide
a measure of control over the inventory management process, but it can be labor-intensive
and prone to errors.

 Just-in-time (JIT) methodology, in which products arrive as they are ordered by customers,
and which is based on analyzing customer behavior. This approach involves researching
buying patterns, seasonal demand and location-based factors that present an accurate picture
of what goods are needed at certain times and places. The advantage of JIT is that customer
demand can be met without needing to keep quantities of products on hand, but the risks
include misreading the market demand or having distribution problems with suppliers, which
can lead to out-of-stock issues.

 ABC analysis methodology, which classifies inventory into three categories that represent
the inventory values and cost significance of the goods. Category A represents high-value
and low-quantity goods, category B represents moderate-value and moderate-quantity goods,

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and category C represents low-value and high-quantity goods. Each category can be managed
separately by an inventory management system, and it's important to know which items are
the best sellers in order to keep quantities of buffer stock on hand. For example, more
expensive category A items may take longer to sell, but they may not need to be kept in large
quantities. One of the advantages of ABC analysis is that it provides better control over high-
value goods, but a disadvantage is that it can require a considerable amount of resources to
continually analyze the inventory levels of all the categories.

Inventory control is the area of inventory management that is concerned with minimizing the
total cost of inventory, while maximizing the ability to provide customers with products in a
timely manner. In some countries, the two terms are used as synonyms.

Brief Introduction About Exports Industry:


India contributes 6.3% of the total global aquaculture production and ranks 2nd after
China. The Indian Fisheries Industry, valued at about USD 15 billion, has emerged as a
significant high-value contributor and key enabler of diversified Indian agriculture. The industry
is also one of the substantial foreign exchange earners and accounted for 2% of the total export
earnings of India in the last four years (FY14 – FY17; refers to the period April 1 to March 31).

During FY17, the marine exports reached an all-time-high with an export value of
5.78 billion USD (compared with 4.69 billion USD in FY16) on the back of robust demand for
frozen shrimps in the international market. In the marine export basket, frozen shrimps export

has the lion’s share, contributing 65% of the total value of marine export in FY17. Indian
seafood, especially frozen shrimps, has gained popularity in the USA (accounting for 30 % in
terms of USD in FY17), South East Asian countries (30%) and European Union (18 %), and over
the last decade, it has enabled the sector to grow at a rapid pace.

The cultured shrimp production has grown with the introduction of the Vannamei
variety of shrimps in the commercial production, displacing the sales of the other major shrimp
species, especially the Black tiger which is more prone to viruses. Although India has a huge
marine wealth and a strong position in the global fisheries trade, the sector has been marred with
few challenges with respect to domestic market value chain, stringent regulatory approvals and
quality confirmations. The report provides an insight into the growth drivers that helped the

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seafood processing industry achieve significant size in the global market, the key challenges
plaguing the industry, the supply chain dynamics, and also provides an impact analysis of recent
development in the regulatory and global political environment.

Growth drivers of shrimp culture in India Huge marine wealth India possesses
abundant and varied resources both in marine and inland sectors which facilitate development of
aquaculture business. The country has a long coastline of 8129 km in addition to vast inland
water resources and hence offers scope for large exploitation of marine wealth. Rapid
commercialization of Vannamei shrimps The aquaculture sector of India witnessed a boom with
the introduction of White leg shrimps (Litopenaeus Vannamei; also known as Penaeus
Vannamei) in 2004. Over the past decade, production and export of Vannamei shrimps has
outpaced the native species such as the Black Tiger which was the dominant farmed species until
2003.

The dominant place that Black Tiger held in global shrimp farm production was due to a
number of factors, including their rapid growth rate, large harvest size and relatively high market
price. However, the growing importance of Vannamei variety is attributed to the favorable
characteristics of their commercial production in the form of higher adaptability to the
production environment (tolerance to varied temperature, salinity, etc.), superior disease
resistance capability, higher growth rate, ease of breeding and relatively higher demand in the
global market. The value of exported frozen shrimps slowed by -0.2% from $19 billion in 2014
to $18.99 billion during 2018. Year over year, exports for frozen shrimps decreased by -7.3%
from 2017 to 2018. In contrast exports of fresh, salted and smoked shrimps fell precipitously

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from $522.7 million for 2014 to $35.7 million in 2018. There are six different Harmonized
Tariff System (HTS) codes for shrimps and prawns: 030613 and 030617 for frozen seawater
shrimps and prawns; 030616 for frozen freshwater shrimps and prawns; 030623 and 030627 for
fresh, salted or smoked seawater shrimps and prawns; and 030626 for fresh, salted or smoked
freshwater shrimps and prawns.

Frozen Shrimp Exports by Country (Seawater)


Frozen seawater shrimps generated $17.2 billion in export sales during 2018, up by 2.8% from
$16.7 billion in 2014 but down by -6.5% from 2017 to 2018. Below are the 15 countries that sold
the highest dollar value worth of globally exported frozen seawater shrimps:
1. India: US$4.4 billion (25.4% of exported frozen seawater shrimps)
2. Ecuador: $2.9 billion (17%)
3. Vietnam: $1.9 billion (10.8%)
4. Indonesia: $1.3 billion (7.8%)
5. Argentina: $1.3 billion (7.6%)
6. Thailand: $694.3 million (4%)
7. China: $680.9 million (4%)
8. Bangladesh: $377.7 million (2.2%)
9. Mexico: $359.4 million (2.1%)
10. Spain: $347.5 million (22%)
11. Netherlands: $302.6 million (1.76%)
12. Belgium: $249.4 million (1.5%)
13. Peru: $219.5 million (1.3%)
14. Malaysia: $189 million (1.1%)
15. Honduras: $186.4 million (1.1%)
By value, the listed 15 countries shipped 89.6% of all exported frozen seawater shrimps
in 2018. Among the above countries, the fastest-growing frozen seawater shrimps exporters
since 2014 were: Argentina (up 71.2%), Ecuador (up 50.6%), Peru (up 35%) and Mexico (up
33.6%).
Those countries that posted declines in their exported frozen seawater shrimps sales were led
by: China (down -49.5%), Malaysia (down -48.1%), Honduras (down -38.2%) and Vietnam
(down -25%).

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Fresh, Salted or Smoked Shrimp Exports by Country (Freshwater)

Exports of freshwater fresh, salted or smoked freshwater shrimps were valued at $1.9
million for 2018, down -98.2% since 2014 but up by 1,308% from 2017 to 2018.
Below are the 4 countries that exported the highest dollar value worth of fresh, salted or smoked
freshwater shrimps.
1. Mozambique: US$1.9 million (98.1% of exported fresh, salted or smoked freshwater
shrimps)
2. Vietnam: $25,000 (1.3%)
3. Suriname: $10,000 (0.5%)
4. Guyana: $1,000 (0.1%)
By value, the listed 4 countries shipped 100% of all exported fresh, salted or smoked freshwater
shrimps in 2018.The fastest-growing shipper of fresh, salted or smoked freshwater shrimps since
2014 was Mozambique via its 15.3% value gain. The leading decliner was Guyana, down -87.5%
since 2014.
Brief Introduction About Ananda Exports:
Over the past few decades, Ananda Group has been successful in applying the innovative
vision of our founder in bringing on consistent quality in our products. This commitment
to quality is built on a solid base of our esteemed customers, both domestic and overseas.
Our greatest asset is the trust our customers bestow on us.
While quality and customer satisfaction is the key to any successful business,
it is not as simple as we talk about. Sheer hard work and dedicated customer service
which the Group has been investing over these years have enabled us to expand our
businesses from agriculture to aquaculture, food processing, and to a multitude of diverse
enterprises.

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Ananda Group founder Sri. Ananda Raju's vision and passion to establish the
business of Rice Milling in the Godawari region of Andhra Pradesh was first of its kind
to produce and sell Quality Rice to all corners of India. At the heart of Ananda Group
Business Empire, is the Family. This joint family has perfected in the Agri and Aqua
business with integration to provide the best results at any stage of business. All the
members of Ananda Group have a common motto, Changing Horizons, Creating
Opportunities.

Ananda Group is a conglomerate of Agro based industries producing


quality Rice, Poultry, Fish, Shrimp and Prawn for Indian and International customers
from Bhimavaram, coastal city in the state of Andhra Pradesh. An efficient and well -
managed company, now forays into new ventures keeping in tune with changing scenario
in the world including India. Ananda Group has India’s First Integrated Shrimp,
Prawn and Fisheries unit which are well renowned having 2 Shrimp, 2 Prawn & 1 Multi
Species Fish Hatchery (for Red Tilapia, Pangasius & Indian Major Carps), 100 hectares
of grow-out for Shrimp & 100 hectares for Fish, 3 Modern Processing Plants with EU &
USFDA approved facilities; Floating & Sinking Fish Feed & Shrimp Feed Manufacturing
with distribution network across the country. The Ministry of Food Processing, Govt. of
India has already awarded license to the Group for constructing the Best Aqua Processing
infrastructure facilities in India showcasing the integration of Fish & Shrimps under the
Mega Food Park scheme. This is the First of its kind in India.
The Group's Chairman, Mr. U. K. V. Raju is the visionary behind these ventures, a well -
known dynamic personality in India. Mr. Raju has rendered valuable service to the Agro

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Industries because of his rich experience in the business, which enabled him to be
important members in decision making in both Government and Private institutions. He
has bagged the Pioneer Award presented at an International Conference in India for
establishing the First Commercial Prawn Hatchery in India, way back in 1993 and
running it most successfully till date. Mr. Raju is the only member from fisheries sector
nominated by Govt. of Andhra Pradesh (A.P.) for the task force on VISION - 2020 .
Products:
Leading Exporter of
 Dried Fish,
 Fish Frys,
 Fishes,
 Calla Lily
 Luna One Fish
Natural Food Products:
Our product range includes a wide range of
 Pea, Chilli,
 Fresh Vegetables
 Pulses.
Providing you the best range of
 Shrimp and Prawns
 Prawn with effective & timely delivery.
Other products:
Exporter of a wide range of products which include
 Vannamei Feed Brochure,
 Lobster,
 Prawns Fish,
 Prawns Food
 Fish And Shrimp Feed.

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OBJECTIVES OF THE STUDY:

 To determine and maintain optimum level of inventory management in ANANDA


EXPORTS LTD .
 To find out the reasons for the problems and to evaluate possible ways for resolving the
problems.
 To minimize the firm's investment in inventories and to maximize profits.
 TO analyze how inventory is maintained in ANANDA EXPORTS LTD .
 TO access the diary industry in Krishna district and the establishment in ANANDA
EXPORTS LTD .
 TO ensure better services to the customer
 To study and analyze the various categories of inventory items in ANANDA EXPORTS
LTD .

NEED FOR THE STUDY:


The present study is a part and parcel in MBA curriculum, after completion of 1st year
during the summer I have undergone project work at this juncture I have decided to do my
project in finance area for that the present topic has been selected. It is my duty to fulfill the
curriculum which will helps us to new look inside of the learning that has been processed or
taken into consideration therefore, as per the norms and regulations of the ADIKAVI
NANNAYA UNIVERSITY. I have opted to do research project according to my interest in the
field of Finance the main reason behind for choosing this topic is to get an in depth of study of
the inventory management
 To study the usage of inventory management in the present day market.

 To know the various inventory control techniques of the company basing on their

financial data.

 To notice the different interpretations of various ratios in the business entity.

 To understand the firm’s liquidity position basing on the current ratios and to make

suggestions to it.

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LIMITATIONS OF THE STUDY

 The time given to complete this project is very limited,

 The study is based on accounting information.

 The analysis is made from the information given by the organization.

 The study was conducted with limited data available and analysis was done

accordingly.

 The complexity and confidentiality of various operations is also a limitation to this


study

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CHAPTER-2

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RESEARCH METHODOLOGY

RESEARCH:
Research is defined as a careful consideration of study regarding a particular concern or a
problem using scientific methods. According to the American sociologist Earl Robert Babbie,
“Research is a systematic inquiry to describe, explain, predict and control the observed
phenomenon. Research involves inductive and deductive methods.”
Inductive research methods are used to analyze the observed phenomenon whereas,
deductive methods are used to verify the observed phenomenon. Inductive approaches are
associated with qualitative research and deductive methods are more commonly associated
with quantitative research.
One of the most important aspects of research is the statistics associated with it,
conclusion or result. It is about the “thought” that goes behind the research. Research is
conducted with a purpose to understand:
 What do organizations or businesses really want to find out?
 What are the processes that need to be followed to chase the idea?
 What are the arguments that need to be built around a concept?
 What is the evidence that will be required that people believe in the idea or concept?
Characteristics of Research
1. A systematic approach is followed in research. Rules and procedures are an integral part of
research that set the objective of a research process. Researchers need to practice ethics and code
of conduct while making observations or drawing conclusions.
2. Research is based on logical reasoning and involves both inductive and deductive methods.
3. The data or knowledge that is derived is in real time, actual observations in the natural
settings.
4. There is an in-depth analysis of all the data collected from research so that there are no
anomalies associated with it.
5. Research creates a path for generating new questions. More research opportunity can be
generated from existing research.
6. Research is analytical in nature. It makes use of all the available data so that there is no
ambiguity in inference.

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7. Accuracy is one of the important character of research, the information that is obtained while
conducting the research should be accurate and true to its nature. For example, research
conducted in a controlled environment like a laboratory. Here accuracy is measured of
instruments used, calibrations, and the final result of the experiment.
Basic Research:
Basic research is mostly conducted to enhance knowledge. It covers fundamental
aspects of research. The main motivation of this research is knowledge expansion. It is a non-
commercial research and doesn’t facilitate in creating or inventing anything. For example, an
experiment is a good example of basic research.
Applied Research:
Applied research focuses on analyzing and solving real-life problems. This type of research
refers to the study that helps solve practical problems using scientific methods. This research
plays an important role in solving issues that impact the overall well-being of humans. For
example, finding a specific cure for a disease.
Problem Oriented Research:
As the name suggests, problem-oriented research is conducted to understand the exact
nature of the problem to find out relevant solutions. The term “problem” refers to having issues
or two thoughts while making any decisions.
For e.g Revenue of a car company has decreased by 12% in the last year. The following could be
the probable causes: There is no optimum production, poor quality of a product, no advertising,
economic conditions etc.
Problem Solving Research:
This type of research is conducted by companies to understand and resolve their own
problems. The problem-solving research uses applied research to find solutions to the existing
problems.

Qualitative Research:
Qualitative research is a process that is about inquiry, that helps in-depth understanding of
the problems or issues in their natural settings. This is a non- statistical research method.

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Methodology is an intensive and purposeful search for knowledge and for the understanding
of social and physical phenomenon. It is the method for the discovery of true values in a scientific
way. There are two sources of data,

 Primary Sources and


 Secondary Sources

Primary Data:
The data which is collected at first hand for the purpose of the study is known as primary data.

Primary data which is collected through interaction with the assistant financial manager of KCP
company.

Primary sources:

It is also called as first handed information; the data is collected through the observation in the
organization and interview with officials. By asking question with the accounts and other persons in the
financial department. Apart from these some information is collected through the seminars, which were
held by ANANDA company.
Secondary Data:
The data which is corrected by some one previously is called secondary Data. It is already available in
the form of internal records of the company and other publications.
Secondary sources:
The secondary data have been collected through the various books, magazines, broachers &
websites

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CHAPTER- 3

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REVIEW OF LITERATURE:
INVENTORY MANAGEMENT PRACTICES
The Inventory Management Practices on the following heads:
1. Organization for Inventory Management.
2. Purchasing
3. Receiving and Inspection of Materials.
4. Stores Management
5. Inventory Control System.

MEANINIG OF INVENTORY:
Every enterprise needs inventory for smooth running of its activities; it serves as a link
between the recognition of a need and its fulfillment the greater the time leg. The higher the
requirements of inventory, the unforeseen fluctuations in demand and supply of goods also
necessitate the need for inventory. It also serves as a cushion for future prices fluctuations. The
simple meaning of inventory is "stock of goods" or "list of goods" the word inventory is
understood differently by various authors. In accounting language it means stock of finished
goods only, for a manufacturing concern it includes raw-materials, work-in-progress, finished
goods etc
Inventories constitute the most significant part of current assets. Many companies
maintain 60% of current assets as inventories. Because of the large size of the inventories
maintained by the firms, a considerable amount of funds is required to be committed to them. It
is therefore absolutely imperative to manage inventories efficiently in order to avoid unnecessary
investment. A firm neglecting the management of inventories will be failed in its long run
profitability and may fail ultimately. It is possible for a company to reduce its levels of
inventories to a considerable degree with in the range of 10 to 20% without any adverse effect by
using simple inventory planning and control techniques. The reduction in excess inventories has
a favorable impact on the profitability of the firm.
OBJECTIVES OF INVENTORY MANAGEMENT:
1. Minimize investment in inventories in order to maximize profits.
2. In order to minimize carrying costs and ordering costs of inventory. To minimize
obsolescence in stores.
3. To avoid excess and inadequate stocks.

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4. To provide check against losses of materials.

NATURE OF INVENTORIES:
Inventories are the stock of the product a company is manufacturing for sale and
components that make up the product. The various forms in which inventories may exist in a
manufacturing company are:-
1. Raw materials
2. Work-in-progress
3. Finished goods
RAW MATERIALS
Raw materials are those basic inputs that are converted into finished product through the
manufacturing process. Raw materials inventories are those units, which have been purchased
and stored for future productions. A company should maintain adequate stock of a continuous
supply to the factors for an uninterrupted production. If it is not possible for a company to
produce raw materials whenever needed, a time lag exists between demand for materials and its
supply also there will be some uncertainty on procuring raw materials in time on many
occasions.
The procurement of materials is delayed because of uncertain factors like strike, transport,
disruption or short supply. Therefore the firm should maintain sufficient stock of raw materials at
a given time to streamline production. Other factors which may necessitate purchasing and
holding raw materials are quantity discounts and anticipated price increase. The firm may
purchase large quantities of raw materials than needed for the desired production and sales levels
to obtain quantity discounts of bulk purchasing. At times the firm would like to accumulate raw
materials in anticipation of price rise.
WORK IN PROGRESS
The inventories are semi-finished products. They represent products that need more work
before they become finished products for sale. Work in progress inventory builds up because of
production cycle. Production cycle is the time span between introduction of raw-materials and
mergence of finished products at the completion of production cycle. Till, production cycle
completes, stock of work in progress has to be maintained. Efficient firms constantly try to make
production cycles smaller by improving their production techniques.

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FINISHED GOODS
Finished goods are the completely manufactured products, which are for sale. Stocks of raw
materials and work in progress facilitate production, while stock of finished goods is required for
smooth marketing operations. Stock of finished goods has to hold because production and sales
are not instantaneous. A firm cannot produce immediately when customers demand goods.
Therefore to supply finished goods on a regular basis, their stock has to be maintained for sudden
demand from customers. In case the firm sales are seasonal in nature, substantial finished goods
should be kept to meet the peak demand. Failure to supply products to customers would mean
loss to firm's sales to competitors.
The level of finished goods inventories would depend upon the co-ordination between sales
and production as well as on production time. The levels of three kinds of inventories for a firm
depend on the nature of business.
A manufacturing firm will have substantially high levels of three kinds of inventories while a
retail or wholesale firm will have a very high level of finished goods inventories and no raw
materials or work in progress inventories. Within manufacturing firms there will be differences.
Large Engineering companies produce long production cycle, products therefore they carry large
inventories on the other hand, and inventories of a consumer product will not be large because of
short production cycle and fast turnover. Firms also maintain a fourth kind of inventory called
supplies. Supplies include office and plant cleaning materials like soap brooms, oil, fuel, light,
bulbs, etc. these materials do not directly enter production, but are necessary for production
process.
INVENTORY DECISIONS
In an inventory control situation, there are three basic questions to be answered. They are:
 How much to order? That is to say, what is the optimal quantity of an item that should be
ordered whenever an order is placed?
 When should the order be placed?
 How much safety stock should be kept? Thus, what quantity of an item in excess of the
expected requirements should be held as buffer stock in anticipation of the variations in
its demand and/or the time involved in acquiring fresh supplies.

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INVENTORY COSTS:
In determining optimal inventory policy, the criterion most often is the cost function. The
classical inventory analysis identifies four major cost components. Depending on the structure of
an inventory situation, some or all of these are included in the objective function.
PURCHASE COSTS:
This refers to nominal cost of inventory. It is the purchase price for the items that are bought
outside sources, and the production cost if the items are produced within the organization. This
may be constant per unit, or it may vary as the quantity purchased/ produced increases or
decreases. Quite often, situation is found when it may be stipulated that, for example the unit
price is rest 20 for an order unto 100 units and rest 19.50 if the order is for more than 100 units.
ORDERING COSTS/ SET-UP COSTS:-
This category of costs is associated with the acquisition or ordering of inventory. Firms have
to place orders with suppliers to replenish inventory of raw materials. It includes costs associated
with the processing and chasing of the purchase order, transformation, inspection for quality,
expediting overdue orders and so on.
The parallel of the ordering cost when units are produced within the organization and the cost
of acquiring materials consists of clerical costs and costs of stationery. It is therefore called a set-
up cost. The ordering cost is likely and taken to be independent of the order size. Therefore the
unit ordering/setup cost declines as the purchase order/ production run increases in size. Ordering
costs are costs involved in:
1. Preparing a purchase order
2. Receiving, inspecting and recording the goods received to ensure both quantity & qty.
CARRYING COSTS:
They are involved in maintaining or carrying the inventory. It represents the cost that is
associated with storing an item in inventory. Carrying costs are also known as holding cost or the
storage cost. The main components of this category of carrying costs are
1. Storage cost i.e. tax, depreciation and maintenance of the building, utilities etc.
2. Insurance of inventory against fire and theft
3. Deterioration in inventory because of pilferage, fire, technical obsolescence, style
obsolescence etc.
4. Serving costs such as labour for handling inventory, clerical and accounting costs.

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The opportunity cost of funds consists of expenses in raising funds (interest of capital) to
finance the acquisition of inventory. It funds were not locked up in inventory they would have
earned a return. This is the opportunity cost of funds or the financial cost. The carrying cost and
the inventory size are positively related and move in same direction. If the level of inventory
increases, the carrying costs also increased and vice-versa.
STOCK OUT COSTS:
Stock out cost means the cost associated with not serving the customers. Stock outs imply
shortages. If the stock out is internal (i.e. in the production system) it would imply that some
production is lost, resulting in idle time for men and machines, or that the work is delayed which
might attract some penalty. While if the stock out is external, it would result in a loss of potential
sales and /or loss of customer goodwill. A shortage can evoke different reactions from
customers.
TYPES OF INVENTORY VALUATION:
VED ANALYSIS:
In VED analysis, the items are classified on the basis of their criticality to the production
process or other service. In the VED classification of materials, V stands for Vital items without
which the production process would come to a standstill. E in the system denotes Essential items
whose stock out would adversely affect the efficiency of the production system.
Although the system would not altogether stop for want of these items, yet their
nonavailability might cause temporary losses in, or dislocation of production. The D items are
the Desirable items which are required but do not immediately cause a loss to production. The
VED analysis is done mainly in respect of spare parts.
HML ANALYSIS:
This is similar to the ABC analysis except that, in this analysis, the items are classified on the
basis of unit value rather than usage value. The item are classified accordingly as their cost per
unit is H-high, M-medium and L-low. This type of Analysis is useful for keeping control over
materials consumption at their department levels.
SDE ANALYSIS:
This uses the criterion of the availability of the items. In this analysis S-stands for scarce
items which are short in supply, D-refers to the difficult items meaning the items that might

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available in indigenous market but cannot procured easily, While E represents easily available
items even from local markets.
S-OS ANALYSIS
S-OS analysis is based on the nature of supplies, wherein S represents the seasonal items and
Os represents the off seasonal items. This classification of items is done with the aim of
determining proper procurement of strategies.
FSN ANALYSIS
Based on the consumption pattern of the items, the FSN classification calls for classification
of items, as F-Fast Moving, S-Slow Moving and N-Non Moving goods. This 'speed'
classification helps in the arrangement of stocks in the stores and in determining the distribution
and handling patterns.
XYZ ANALYSIS
XYZ analysis is based on the closing inventory value of different items. Items, whose
inventory values are high, are classed as X-items while those with low investment in them are
termed as Z- items. Other items are the Y-items whose inventory value is neither too high nor too
low.
It can be easily visualized that the several types of analysis discussed are not mutually
exclusive. They can be, and often are, used jointly to ensure better control over materials. For
example ABC and XYZ analysis may be combined to classify and control depending on whether
the items are AX, BY, CZ, AY of and so on. Similarly XYZ - FSN combine classification
exercise will help in timely prevention of obsolescence.
PURCHASING:
 INTRODUCTION:
The scarcity of raw materials has practicality put the people in purchasing department in a
very tight position. The purchasing department can be in a better position. As of today there are
four different groups of buyers, viz, a) Consumers, b) Middle men, c) Government agencies and
d) Manufacturers. In fact the whole economy is dependent on this group for survival. The second
group comprises such as money collection of traders as wholesalers, retailers, and distributors
who buy not for their own consumption, but to sell to others. The fourth category of purchases
includes manufacturers who convert raw materials, components, consumables and packing

22
materials for use in industrial establishments where saleable products are produced. The subject
of purchasing is discussed here as it applies to the buying, made by manufacturers.
 DEFINITION:
In its narrow sense, the term "purchasing" refers merely to the act of buying an item at a
price. This very narrow concept of purchasing has been gradually widened during the last 70
days.
According to Alford and Beatty "Purchasing" is the procuring of materials, supplies,
machines, tools and services required for equipment, maintenance and operation of a
manufacturing plant".
According to Walters, purchasing function means "The procurement by purchase of the
proper materials machines, equipment and supplies for stores used in the manufacture. Of a
product adapted to marketing in the proper quality and quantity at the proper time and at the
lowest price, consistent with quality desired".
According to Wasting, Fine and Zen "Purchasing is a managerial activity that goes beyond
the simple act of buying. It includes research and development for the proper selection of
materials and sources, follow-up to ensure timely delivery; inspection to ensure both quantity
andquality ; to control receiving , sore keeping and accounting operations related to purchases".
 IMPORTANCE OF PURCHASING:-
 Purchasing function provides materials to the factory without which wheels of machines
cannot move.
 A one percent saving in material cost is equivalent to a 10% increase in turnover.
Efficient buying can achieve this.
 Purchasing manager is the custodian of his firm's purse as he spends more than 50% of
his company earnings on purchases.
 Increasing proportion of one's requirements, are now brought instead of being made as
was the practice in the earlier days. Buying therefore assumes significance.
 Purchasing can contribute to import substitution and save foreign exchange.
 Purchasing is the main factor in the timely execution of industrial projects.
 Materials management organizations that exist now have evolved out of purchasing
departments.
 Other factors like:-

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• Postwar shortages
• Cyclical swings of surpluses and shortages and the first rising materials costs.
• Heavy competition.
• Growing worldwide markets have contributed to the importance of purchasing.
 OBJECTIVES OF PURCHASING:
It may be emphasized that some of the functions are the sole responsibility of the purchasing
department, some are shared with order departments and the remaining are the responsibilities in
which the purchasing department has considerable interest.
 RESPONSIBILITIES DELEGATED TO THE PURCHASING FUNCTION:-
1. Obtaining prices
2. Selecting vendors
3. Awarding purchase orders
4. Following up on delivery promises
5. Adjusting and settling complaints
6. Selecting and training of purchasing personnel
7. Vendor relations
METHODS OF PURCHASING:
There are number of methods used by different purchase departments. The methods used
depend on the classification of products in the production system, policy of the organization and
behaviour of the market.
FOLLOWING ARE SOME POPULAR METHODS OF PURCHASING:
 Purchasing according to requirement.
 Purchasing for some definite future period.
 Market purchasing
 Speculative purchasing
 Contract purchasing
 schedule purchasing
1. PURCHASING ACCORDING TO REQUIREMENT:
In this case the order is placed only when there is some need for the product. This method is
appropriate for those items which are not of regular and common use in the production process.
These items are generally not stored in inventories. In such cases the purchasing department

24
should keep a record of reliable and trustworthy suppliers who were sincere to the organizations
in past.
2. PURCHASING FOR SOME DEFINITE FUTURE PERIOD:
This method of purchasing is generally used for those items which are regularly consumed
but the consumption is comparatively low and the price changes for these items are not much.
3. MARKET PURCHASING:
The policy of making the purchases at the time when fluctuations in price of the items
provide advantage to the purchaser is known as market purchasing. This method provides
procurement at lower price and saving in purchase expenses. This method is useful in situations
where major price variations are prominent. Here the purchasing may not relate with the
production needs and if the assessment of price fluctuations is wrong then the organization may
suffer losses.
4. SPECULATIVE PURCHASING:
Here excessive purchases are made when market is low for the item with the hope of earning
profit by selling the items purchased in excess at a higher price. This procedure is most suitable
in the case of staple commodities.
5. CONTRACT PURCHASING:
Here the purchase department enters into agreement with various suppliers to supply the
items at some future period or periodically. In the words of Alford and Beatty, "all purchasing is
contract but the term 'contract purchasing' is applied to that special contract which calls for
deferred delivery over a period of time". According to Spiegel “the purchasing under contact is
usually formal for the needed material, the delivery of which is frequently spread over a period
of time". The organization tries to enter into the contract when prices are comparatively low.
Here the supply is ensured per scheduled requirements as well as there is protection against
frequent price fluctuations.
6. SCHEDULED PURCHASING:
It is a scientific method of purchasing. The purchasing is scheduled according to
requirements of various departments of the organizations. Vendors know in advance about the
future demand of the purchaser.

25
STEPS IN PURCHASING PROCEDURE:
1. Various departments are requested to send their requirements on a proper requisition
form this authorizes the purchase department to procure the requisitioned items i.e. to
issue purchase order.
2. Purchasing department consolidates the requirements from various departments to know
the total requirement for each item.
3. Market exploration is made to locate the goods and services of desired quality and
quantity at reasonable price.
4. Potential suppliers are identified from catalogues, quotations and past records.
5. Purchase order in specified form is prepared and sent to the approved suppliers purchase
order establishing a contractual relationship between buyer and seller.
6. After some time of placing the order, follow up process starts to get quick delivery of the
items. The follow up of procedures implies acceptance of the order and promise to supply
the items on desired date.
7. The items are received by the purchasing department at the time of delivery and the items
received and compared with purchase order.
8. The checking of the delivered goods is done with regard to prices charged and quoted.
9. Approval of the invoice.
10. To ascertain the quality and quantity of the items.

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ORGANIZATION OF PURCHASE DEPARTMENT:
The composition of purchase department varies according to the size of the enterprise, its
comparative significance towards procurement and the capability of the purchase personnel. In
organization engaged in Procurement of smaller range of items but from limited number of
suppliers the purchase officer is attached to controller of accounts. In organization with job or
batch system of production, purchasing becomes a complicated exercise and needs regular and
through co-ordination with production department. In such cases the purchase manager is
directly attached to production manager. The size of the purchasing department on the nature of
products manufactured by the organizations, sizes of production runs and type of the
manufacturing system.
 RECEIVING AND INSPECTION OF MATERIALS:
RECEIVING MATERIALS:
 INTRODUCTION:
Receivable management refers to the decisions a business makes regarding its overall credit
and collection politics and the evaluation of individual credit applicants. In formulating an
optional credit policy, finance manager must analyze the marginal benefits and costs associated
with changes in credit standards, credit terms, collection efforts etc. Receivable management
proves for a firm, both, an asset and a problem.
 MEANING:
Receiving is an important control point in the material control system. It is sometimes
considered that receiving is a routine clerical work where the materials shipped by the supplies
are received, unpacked, checked and compared with the purchasing and material management,
stated that, "any problem or error in specific purchase transaction should come to light during the
receiving operation". If the problem (shortage in quantity, damaged material, wrong item shipped
etc.) is the detected and corrected during the receiving operation, the cost of to correct the
mistake later is much higher. Many hours are frequently spent in determining what really
happened and rectifying the situation. Hours are required to correct the error that could have
been corrected at the receiving station in minutes.

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RECEIVING PROCEDURE:-
The receiving involves much of the paper work and it varies from firm to firm. However
the key issues involved in the receiving function are commodity described in the following
standard procedure.
The receiving division unloads the goods at the delivery bay and verifies the condition of
the consignment to satisfy that it is not received in a damaged condition. The receiving clerk
opens the consignment and verifies the contents with the packing slip and the purchase order.
The details are recorded in the separate report, which is popularly known as "the goods received
note or GR note". The goods received note is an important document because it is the only
document with the firm which signifies the details of the materialist has received.
INSPECTION OF MATERIALS: ? MEANING AND DEFINITION
Inspection is the process of examining an object for identification or checking it for
verification of quality and quantity in any of its characteristics. It is an important tool for
ascertaining and controlling the quality of a product. In the words of Alford and Beatty
"Inspection is the art of applying tests. Preferably by the aid of measuring appliances to observe
whether a given item or product is within the specified limits of variability or not". According to
Sprigged and Ransburg "Inspection is the process of measuring the qualities of a product or
services in terms of established standard". The standards can be in terms of strength, hardness,
shape etc.
The purpose of inspection is to items are produced within the specified items of
variability. Inspection in list broadest sense is the art of comparing materials, product or
performances with established standards. By means of inspection one can take a decision to
accept are reject certain item. The items are accepted if these conform to the given specifications
otherwise rejected.
FUNCTIONS OF INSPECTION:
The following are some important functions of inspection:
1. Maintenance of specified standards of the quality of products.
2. Devising means for conducting inspection at lower cost.
3. Segregating spoilt work, which may be salvaged by recuperation.
4. Maintaining inspection equipment in good condition.
5. Detection of defects at source to reduce scraps and defective work.

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6. Reporting source of manufacturing troubles to management

 OBJECTIVES OF INSPECTION
Fundamental objectives of inspection are:
1. To safeguard the quality of the finished products by comparing raw-materials,
workmanship and final product with some set standards. It prevents further work being
done on semi-finished product already detected as spoiled.
2. The defective items are located and the factors responsible for this discrepancy in the
quality of the product are then identified to take corrective measures. This results in
enhancing the prestige and confidence of the organization in the eyes of the customer.
This results in enhancing the prestige and confidence of the organizations in the eyes of
the consumer.
3. The reduction in the risk and possibility of items not accepted by consumer saves the
producer as well as the consumer from losses if any and also reduces the cost of
production.
4. To detect sources of weakness and troubles in the finished product and thus check the
work of designers.
 Essential steps for Inspection
There are five main steps in inspection:
1. Characteristics about which the quality of the items is to be inspected should be carefully
established.
2. A decision regarding when and where the inspection should take place is to be taken.
3. To find that how many items are to be inspected i.e. 100% or sampling inspection. Here
the level of accuracy desired and the nature of the production process are taken into
consideration.

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 WHERE TO INSPECT:
Inspection may take place right in the processing area or at a separate inspection station. The
choice of location depends on the process flows and on the problems of scheduling the
inspection function which must be treated as yet another operation in the total process. The first
line of defense is worker who can avoid making defects? Then come to inspectors who are
usually trained separately from the workers to obtain benefits of specialization. They are taught
to use gauges, test instruments, micrometers and procedures at which they become increasingly
proficient. Some times inspection tolls cannot be place in the production line. Then the work
may Have to leave the normal flow to go to an inspection. During a production process there are
many stages where inspection can be done. The choice depends mainly on the convenience of the
organization as well as it approaches towards the maintenance of the products quality. In general
inspection can be carried out at following location:
1. Items can be inspected either at vendors place or at the purchases premises.
2. Semi-finished items are inspected during the production process.
3. Inspection of finished products.
4. Post-sales quality evaluation.
 FINAL INSPECTION
The finished products are inspected and tested to verify the quality standards. The items
found to defective are not marked. Thus only items of desired specification go into the hands of
consumer. Naturally there are more chances of scrap in this method of inspection as the rejected
items cannot be corrected at this stage or it may be quite expensive to do so.
 STORES MANAGEMENT:
After inspection the purchased materials are taken to store for preservation, it they are meant
for stock. Non-stock items are directly taken to the assembly lines from the inspection.
Preservation or storage is another aspect of materials management. .
 NATURE OF STORES:
Stores or storage is the function of receiving, storing and issuing materials. It involves the
supervision clearance of incoming supplies, to ensure that they are maintained in good condition,
safety and in readiness for use when required, while they are in storage and issuing them against
authorized requisition. In short, it is connected with the physical handling and well- being of the
stocks. It should be mentioned that, stores is not meant for stocking purchased materials alone.

30
 IMPORTANCE:
Efficient storage of stores yields the following benefits:
1. Ready accessibility of major materials permitting efficient service to users.
2. Efficient space utilization and flexibility of arrangement.
3. A reduced need for materials handling equipment.
4. A minimization of materials deterioration and pilferage.
5. Ease of physical counting.
6. Protecting against waste deterioration, damage and pilferage.
7. Design the buildings physical appearance to create goodwill and to invite business.
 STORAGE SYSTEM:
Choosing the most suitable storage system means dealing with a number of interacting and
often conflicting factors. Inevitably, the degree of mechanization affects layout while the scarcity
of space affects the height to which racking is erected. The need for rapid, intensive order
packing means a need for rapid and easy access to stock.
Fixed location means that, goods of a particular type have a position in the store assigned to
them exclusively. It means that while stock can be found immediately without a complex system
for recording its position there can be considerable waster space, because when stocks of any one
item are low, the space left vacant cannot be filled. The assignment of fixed position to a
particular type of goods is made on any one of the following basis.
1. On the basis of the supplier
2. On the basis of similarity of items.
3. On the basis of the joint issue of the items.
4. On the basis of the size and frequency of use.
METHODS OF VALUATION:
The government of India has given sufficient flexibility for companies to introduce
scientifically developed methods of valuation of their stocks. In order to prevent malpractices, it
has been stipulated that such methods must be studied and approved by the Board of Directors,
and must be followed for a minimum prior of three years. The various methods of valuation
available are given below.
1. First in first out [FIFO]
2. Last-in -first -out [LIFO]

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3. Periodical Simple Average Method
4. Normal cost/ Standard cost method
5. Weighted average method
6. Replacement price method
1. FIFO:
In this case it is assumed that the stores follow the principal that oldest stock issued first
so that stock left out is from the later arrivals. Hence all issues are assumed to have come out
from older stocks. These are valued at old price. The cumulative value of stock out will give the
net value of the existing stock.
2. LIFO:
Here stores are issued from the last stock. This means issues have taken place from later
arrivals. Hence all issued are valued as per the price of the latest arrivals to compute value of
stock left in stores.
3. PERIODICAL SIMPLE AVERAGE:
In this case after each receipt of material, adding the cost of materials in hand with the
cost of materials received and dividing the same by the total number of units calculate the
average cost. This process is repeated every time new items are received. This average cost is
used for computing the value of items issued and value of items remaining in the stock.
NORMAL COST / STANDARD COST METHOD: This method is mostly used for items
manufactured in house. Here the average cost of a certain lot is calculated and used as cost of
items issued. Since this method is used for items manufactured, one can use standard costing
method also for valuation of such stocks.
4. WEIGHTED AVERAGE METHOD:
This method is used when the quantity and prices of items vary widely from each
purchase. In this case, the weighted average price is calculated for each item. This price is used
for computing the value of items and those remaining in stock.
5. REPLACEMENT PRICES METHOD:
This is a modern method developed by George Tarboro. However without application it
is difficult to price each item. This has not yet become popular. FIFO, LIFO and Weighted
Average methods are popular and acceptable to the government tax authorities.

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 INVENTORY CONTROL SYSTEM: ? INTRODUCTION:
Inventory control keeps track of inventories. It is observed that 'too much', 'too little' or badly
balanced inventories are all to be avoided because they cost too much on many counts. To much
leads to undue carrying charges in the form of taxes, insurance, storage, obsolescence and
depreciation and undue proportion of total working capital is invested in them. "Too little"
implies of too frequent ordering, loss of quantity discounts and higher transportation charges. It
may be 'too low' in view of likely shortages in future or future increases the prices or shortfall in
output. Again due to dynamic and unpredictable environmental situation "Too little" at one time
can be very quickly become "Too much in a subsequent period. Similarly inventory purchased at
higher prices remaining unused in stock or uncancelable order represents loss to the
organizations. The balance between 'too much' and 'too low' can be done by means of effective
inventory control. Some of the definitions of inventory control are:
1. Inventory control is a system of ordering based on the maintenance of the stock in store
using reorder rule based on the stock level.
2. Inventory control is the technique of maintaining the size of the inventory at some desired
level keeping in view the best economic interests of an organization.
3. Inventory control is concerned with various items stocked at predetermined level or
within some safe limits.
4. Inventory control is that part of a production program which specifies the material
requirements and schedules the order of work to be done.

 OBJECTIVES OF INVENTORY CONTROL:


Though inventory control may not be treated as an executive function but it is one of the
most important functions in an enterprise. The following are the main objectives of inventory
control:

 PROTECTION AGAINST FLUCTUATIONS IN DEMAND:


The demand foreseen of any product can never be exact or accurate. There is likely to
become difference that too of varying magnitude, in predicted demand and actual demand of the
product. If sufficient items are available in the inventory, then the fluctuations in demand can be
easily adjusted and the organizations can project it from unforeseen economic losses.

33
 BETTER USE OF MEN MACHINES AND MATERIALS:
In manufacturing system producing for stock the production planning can be done with an
object to have optimum use of resources namely men, machines and materials. Here the
resources can remain engaged during slack period of demand and there will be no need of
generating additional resources in the boom periods as then the inventory enlarged in slack
period can utilize. This will lead to uniform and proper utilization of resources available with the
enterprise.

 PROTECTION AGAINST FLUCTUATIONS IN OUTPUT:


Another important function of inventory is to reduce the gap between actual and scheduled
production. In practice, production scheduled cannot be adhered due to a number of reasons e.g.
sudden breakdown in supply of raw-materials, machines, labour strikes etc.
 CONTROL OF STOCK VOLUME:
Inventory control is concerned with the size and the value of goods present in stock. It is
responsible to forecast the value of the stocks on a regular intervals, so that
 Capital invested in inventories does not exceed the funds available for the purpose.
 The amount invested in inventory is correctly recorded in account books.
 Protection against theft is ensured.

1. CONTROL OF STOCK VOLUME:


Stock analysis is done to be sure that it is in balance and that obsolescence and
depreciation are determines the appropriate size of the inventory keeping in view the interest of

2. The production department as well as of the outside customer and side by side holding down
the costs.
Inventory is maintained due to the following reasons.
1. 1 To carry reserves in order to prevent stock outs or cost sales.
2. 2 Never having much of anything on hand.
3. 3 To gain economies in purchases by buying items beyond the desired amount.
4. 4 To maintain reserves in stocks for the period of replenishment.

34
Thus a well formulated inventory policy of an enterprise in likely to ensure smooth and
efficient running of production operation providing optimumUtilization of man, machine and
material. The decision regarding the appropriate size of the inventory is of paramount
significance.
 LIMITATIONS OF INVENTORY CONTROL:
1. The control of inventories is complex because of the many functions it performs. It
should be viewed as a shared responsibility.
2. The objectives of better sales through improved service to customer, reduction in
inventories to reduce size of investment and reducing cost of production by smoother
production operations are conflicting with each other.
METHODS OF INVENTORY CONTROL:
The fundamental purpose of inventory analysis is to keep the stock of items at such level
that there is a balance between the costs which increase or decrease with the size of the
inventory. This needs determination of
i)quantities should be ordered each time and ii) the time at which this order should be placed so
that both inventory carrying costs and the losses arising out of stock-outs are kept at the
minimum. These objectives are accomplished by determining.
i) Economic lot size
ii) Re-order level

 ECONOMIC LOT SIZE:


The amount of material procured or quantity produced during one production run by any
enterprise is known as lot size. The quantity to be ordered, whether from inside sources or from
out agencies depends on a number of factors. The size of inventory depends on lot size. Due to
increase in inventory size expenditure on storage, deterioration etc, is likely to increase whereas
expenditure on setting up plant, procurement of materials etc, will increase.
Thus with lot size, there are two sets of factors having opposite contribution towards the
expenditure i.e. one encourages the lot size and other discourage. The total cost associated with
particular lot size is a combination of expenditures on all these factors. These opposing forces
exhibit an interesting behavior towards total cost. It is observed that the factors whose costs

35
decrease with lot size has a tendency at a faster rate than the rate of increase in cost of those
factors whose costs increase with inventory size.

 SAFETY OR BUFFER STOCK:


The demand and supply rates can never be assessed exactly. There is bound to be
discrepancy between actual and estimated demand and supply quantities with fair degree of
uncertainty. The organization with a policy of safeguarding interest. Against these uncertainties
maintain the level of inventory at some desired minimum level. This minimum level of inventory
to cover some unforeseen and uncalled for situations is known as safety or Buffer stock available
in inventory when fresh supply arrives. It is presumed that this stock will be able to, cope with
the emergency if and when experienced. Generally, buffer stock is maintained at the desired
level by discontinuous replenishments at varying intervals of time. Factors effecting choice of
Buffer stocks are:
1. Uncertainty in demand.
2. Degree of insurance for any item.
3. Uncertainty in lead time and
4. Size of the batch.
 RE-ORDER LEVEL/POINT:
The concept of re-order point is basically related with lead time demand. The problem is that
demand can never be accurately projected over the lead-time. Once we know the demand in lead
time, re-order level can be easily determined mathematically Re-order Level=Lead Time demand
+ Safety Stock.
 ABC (ALWAYS BETTER CONTROL) ANALYSIS:-
ABC analysis is the selective inventory control technique and this is the first step in the
inventory control process. This is the process in which 1000's of different types of inventories
are classified to determine the type an degree of control required for each. This technique is
based on the assumption that the firm should not exercise the same degree of control on the items
of inventory.
On the basis of unit price and consumption, various inventory items are categorized into
three classes of this analysis:

36
A
B
C
"A" group involves the largest investment and inventory control must be rigorous and
intensive and the most sophisticated inventory control technique should be applied to these
items. Type "A" is of higher cost and highly scarce resource without which the production
process cannot be imagined, which will be very less in quantity when compared to the investor
level.
"A" type of items are only about 10% in number. But account for 75% of the annual
inventory usage value.
"B" group stands mid-way. It deserves less attention than "A" and more than "C". Employing
less sophisticated techniques can also control it. Type "B" is of moderate cost and moderately
important. These are freely available when compared type "A".
"B" type of items are only about 20% in number. . But account for next 50% of the annual
inventory usage value.
"C" group consists of items of inventory, which involve relatively small investments
although the number of items is fairly large. These items deserve minimum attention.
Type "C" items is of lowest cost and less importance when compared to "A" & "B". As these
types of inventories are freely available in the market and can immediately replace or purchase.
"C" types of items are about 70% in number. . But account for next 10% of the annual
inventory usage value.
THE VARIOUS TYPES OF SELECTIVE CONTROLS ON THE BASIS "ABC
ANALYSIS":
CATEGORY "A":
1. Tight control
2. Assess exact requirement
3. Frequent reviews
4. Quantity control
5. Regular and item wise expediting
6. Low safety stocks and order point control
7. Reduced and stabilize lead-time

37
CATEGORY "B":
1. Moderate control
2. Individual postings
3. Assess frequent reviews
4. Less frequent reviews
5. Item wise expediting
6. Medium safety stocks
7. Lead time
8. Stoked at regional or zonal stores
CATEGORY "C":
1. Minimum control
2. Simple checks
3. Estimate appropriate requirements
4. Group postings
5. Infrequent reviews
6. Visual control
7. Limited and periodic expediting
8. Minimum lead-time control
9. Large order size
10. Stocking at point of view.

• STEPS FOR CONDUCTING ABC ANALYSIS ARE:


1. Obtain unit cost of each manufactured or purchased item in inventory.
2. Obtain the usage in units for each item or estimate the usage over a period of time.
3. Obtain the net value of the usage by multiplying unit cost and the usage.
4. Arrange the items in descending order of the usage value.
5. The no. of items and their values are accumulated on a % of total basis.
6. Roughly divide the total list into 3 groups namely A-items of high usage value which
accounts for 70-75%of the usage value of inventories and about 10-15%. In number B-
items of medium usage value which accounts for the next 15-20% of the usage value .

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 WHILE APPLYING THE ABC ANALYSIS, THE FOLLOWING POINTS SHOULD
BE TAKEN INTO CONSIDERATION:
1. Although every part of the item is important for the repair of machine, the items with low
value can be given a loose control.
2. Tight control of the high value stocks must reduce costs sufficiently to more than off set
the increased costs caused by lesser controls on the low value items. When applying the
ABC principle, some high value items, Which will not be required due to being in excess,
should actually be considered for disposal at a worth while price.
3. The ABC analysis in variably involves only items moving items since the annual
consumption value is based on consumption besides unit cost. The items, which are non-
moving, have also been considered separately for retention.
• JUST IN TIME [JIT]:
JIT means that virtually no inventories are held at any stage of production and that the
exact number of units is brought to each successive stages of production at right time. The JIT
concept originated from the Motomachi plant of Toyota in Japan where the system has been
perfected and results achieved. In this concept the plant has a long line of trucks waiting outside
with full loads of automotive parts and components for the assembly line. As soon as one truck
comes out at one end of the plant another gets inside. There is no warehouse for the parts.
The JIT concept assumes certain conditions which are found wanting in our industries. What
required is for its successful implementation all ancillary industries and suppliers of inventory
operate in the vicinity of the main industry to avoid problems of transportation. If the suppliers
are located at considerable distances and there is more than one supplier problems in delivery are
bound to arise. There should be one supplier and the products supplied must be of the best
quality to prevent rejections and consequent delays.

• ORGANIZATION FOR INVENTORY MANAGEMENT:


In a fairly large size production unit we might be holding stocks worth crores of rupees
and their proper accounting, prevention, security and safety is of paramount importance. An
effective and efficient stores management shall help in improving service level. Higher inventory
is another area of concern to management because it affects the working capital. Stores
department in order to discharge its functions effectively, it has to have close interaction and co-

39
ordination with various departments of the organization. The stores department mainly should
have good communication between purchase and production departments.
Without active integration and cooperation of each of the other departments, it is very
difficult to ensure smooth and efficient functioning of the stores department. But a stores
department is dependent on each of them for its day to day operation. The smooth functioning of
either stores department or the main production units is just not possible without interactive
relations. This need has been merely identified by the Krishna District Milk Union stores
department and a lot of negotiations have been taken by stores to have a better working
relationship with of these departments.
The inventory refers to stockpile of the products of the firm offering for sale and various
components that make up these products. The inventory consists of raw-materials, work-in-
progress, finished goods and stores & spare parts.

40
Chapter-4

41
Results And Discussion

SIZE OF INVENTORY:
The size of inventory depends on several factors such as sales volume, capacity of plant,
availability of raw-materials, fluctuations in prices of raw-materials and finished goods, length of
production cycle etc. generally progressive organization inventory levels continuously increase
as increase in sales and production. As already stated the prime objective of inventory
management is to optimize size of inventory so that smooth performance of production and sales
are possible. Increase in size of inventory involves extra cost apart from adversely effecting
profitability and liquidity. The size of networking capital is measured with the help of following
ratio.
Inventory
Size of Inventory = ................................
Total Current Assets
INVENTORY 2014-15
S.NO PRODUCTS AMOUNT
1 Products 11,64,15,812.95
2 Raw materials 6,50,880.70
3 Stores & Packing Materials 1,58,50,112.04
4 Mechanical & Garage Spares 65,46,601.92
5 Feed Raw Materials 47,63,876.31

Total 14,42,27,283.90

INVENTORY 2015-16
S.NO PRODUCTS AMOUNT
1 Products 9,57,12,921.63
2 Raw materials 4,40,075.00
3 Stores & Packing Materials 2,33,09,360.60
4 Mechanical & Garage Spares 52,39,362.62
5 Feed Raw Materials 50,29,186.62
Total 12,97,30,906.50

42
INVENTORY 2016-17
S.NO PRODUCTS AMOUNT
1 Products 13,01,41,326.23
2 Raw materials 4,91,944.00
3 Stores & Packing Materials 1,44,03,819.59
4 Mechanical & Garage Spares 37,97,118.86
5 Feed Raw Materials 47,90,586.09
Total 15,36,24,794.70

INVENTORY 2017-18
S.NO PRODUCTS AMOUNT
1 Products 11,28,39,476.42
2 Raw materials 13,55,364.00
3 Stores & Packing Materials 1,32,24,600.32
4 Mechanical & Garage Spares 42,00,291.38
5 Feed Raw Materials 37,35,576.19
Total 13,53,55,308.30

INVENTORY 20018-19
S.NO PRODUCTS AMOUNT
1 Products 15,22,23,908.00
2 Raw materials 10,42,833.00
3 Stores & Packing Materials 1,78,07,488.78
4 Mechanical & Garage Spares 33,14,434.20
5 Feed Raw Materials 38,75,404.75
Total 17,82,64,068.70

43
CURRENT ASSETS 2014-15

S.NO PRODUCTS AMOUNT

1 Products 11,64,15,812.95

2 Raw materials 6,50,880.70

3 Stores & Packing Materials 1,58,50,112.04

4 Mechanical & Garage Spares 65,46,601.92

5 Feed Raw Materials 47,63,876.31

6 Cash in Hand 14,15,525.25

7 Cash/ Cheque 26,04,025.70

8 Balance with Seheduled Banks 4,92,45,465.57

9 In Fixed Deposits 45,81,849.00

10 Sundry debtors 6,87,09,698.73

11 Advances to Employees 11,01,701.39

12 Advantages to Purchases 48,26,009.91

13 Pre-Paid Expenses/Taxes 10,64,891.00

Total 27,77,73,454.45

44
CURRENT ASSETS 2015-16

S.NO PRODUCTS AMOUNT

1 Products 9,57,12,921.63

2 Raw materials 4,40,075.00

3 Stores & Packing Materials 2,33,09,360.60

4 Mechanical & Garage Spares 52,39,362.62

5 Feed Raw Materials 50,29,186.62

6 Cash in Hand 20,69,031.75

7 Cash/ Cheque 32,51,051.55

8 Balance with Seheduled Banks 9,98,84,590

9 In Fixed Deposits 1,13,77,867.00

10 Sundry debtors 4,42,01,029.07

11 Advances to Employees 8,82,840.45

12 Advantages to Purchases 41,38,886.93

13 Pre-Paid Expenses/Taxes 14,08,424.00

Total 29,69,44,628.10

45
CURRENT ASSETS 2016-17

S.NO PRODUCTS AMOUNT

1 Products 13,01,41,326.23

2 Raw materials 4,91,944.00

3 Stores & Packing Materials 1,44,03,819.59

4 Mechanical & Garage Spares 37,97,118.86

5 Feed Raw Materials 47,90,586.09

6 Cash in Hand 14,36,332.25

7 Cash/ Cheque 77,11,542.90

8 Balance with Seheduled Banks 12,46,40,643.05

9 In Fixed Deposits 89,23,153.00

10 Sundry debtors 3,99,00,770.98

11 Advances to Employees 6,31,743.95

12 Advantages to Purchases 80,32,029.72

13 Pre-Paid Expenses/Taxes 14,19,470.00

Total 34,63,20,480.10

46
CURRENT ASSETS 2017-18

S.NO PRODUCTS AMOUNT

1 Products 11,28,39,476.42

2 Raw materials 13,55,364.00

3 Stores & Packing Materials 1,32,24,600.32

4 Mechanical & Garage Spares 42,00,291.38

5 Feed Raw Materials 37,35,576.19

6 Cash in Hand 16,67,725.50

7 Cash/ Cheque 8,25,790.04

8 Balance with Seheduled Banks 6,87,25,312.00

9 In Fixed Deposits 5,99,58,670.00

10 Sundry debtors 5,57,10,699.98

11 Advances to Employees 5,25,992.80

12 Advantages to Purchases 37,60,327.22

13 Pre-Paid Expenses/Taxes 2,69,743.00

Total 32,67,99,568.80

47
CURRENT ASSETS 2018-19

S.NO PRODUCTS AMOUNT

1 Products 15,22,23,908.00

2 Raw materials 10,42,833.00

3 Stores & Packing Materials 1,78,07,488.78

4 Mechanical & Garage Spares 33,14,434.20

5 Feed Raw Materials 38,75,404.75

6 Cash in Hand 1,07,160.25

7 Cash/ Cheque 14,52,536.51

8 Balance with Seheduled Banks 8,88,55,874.69

9 In Fixed Deposits 8,98,32,804.00

10 Sundry debtors 4,91,66,473.49

11 Advances to Employees 6,82,578.80

12 Advantages to Purchases 30,59,910.56

13 Pre-Paid Expenses/Taxes 6,62,527.00

Total 41,20,83,934.00

Inventory
Size of Inventory = x100
Total Current Assets

48
INVENTORY TURNOVER RATIO:
The lists of all varieties of stocks with the company are treated as stocks. This
relationship expresses the frequency with which average level of inventory is turned over
through operations. If the ratio is high it means that stock is converted into sale as short span of
time. It will lead to good profits for the company. If the inventory is moving quickly then the
short term solvency of the company is also in very good condition. The inventory turnover ratio
can be used as valuable measure of selling efficiency and inventory quality of the company. The
turnover ratio is measured with the help of the following ratio:
Cost of Goods Sold
Inventory Turnover Ratio = ---------------------------
Average Inventory
COST OF GOODS 2014-15

S.NO PARTICULARS AMOUNT


1 Sale of shrimp 83,03,28,496.55
2 Sale of fish 8,46,24,637.92
3 Sale of Bi-Products 45,25,27,825.15
4 By Sale of shells 5,97,30,709.00
5 By Conversion Charges 80,11,555.00
Total 143,52,23,223.62

SALES - GROSS PROFIT

1435223223.62 - 263510297.46 = 1171712926.24

COST OF GOODS 2015-16

S.NO PARTICULARS AMOUNT


1 Sale of shrimp 101,96,33,984.00
2 Sale of fish 6,87,74,625.50
3 Sale of Bi-Products 48,55,22,323.45
4 By Sale of shells 6,03,38,522.25

49
5 By Conversion Charges 31,77,292.00
Total 163,74,46,747.00
SALES - GROSS PROFIT

163,74,46,747.00 - 29,10,57,211.96 = 134,63,89,524.00

COST OF GOODS 2016-17

S.NO PARTICULARS AMOUNT


1 Sale of shrimp 118,22,48,093.25
2 Sale of fish 3,56,32,842.00
3 Sale of Bi-Products 41,04,05,763.00
4 By Sale of shells 7,46,38,750.50
5 By Conversion Charges 1,66,60,011.50
Total 171,95,85,460.00

SALES - GROSS PROFIT


171,95,85,460.00 - 32,65,51,326.36 = 139,30,34,134.19

COST OF GOODS 2017-18

S.NO PARTICULARS AMOUNT


1 Sale of shrimp 142,66,04,822.25
2 Sale of fish 7,34,75,439.00
3 Sale of Bi-Products 49,80,01,850.83
4 By Sale of shells 8,97,79,087.00
5 By Conversion Charges 80,92,315.00
Total 209,59,53,514.00

SALES - GROSS PROFIT

209,59,53,514.00 - 33,67,96,345.76 = 175,91,57,168.00

50
COST OF GOODS 2018-19

S.NO PARTICULARS AMOUNT


1 Sale of shrimp 170,22,53,004.77
2 Sale of fish 4,91,60,591.50
3 Sale of Bi-Products 55,96,05,494.25
4 By Sale of shells 9,07,58,323.50
5 By Conversion Charges 1,17,95,410.00
Total 241,35,72,823.00

SALES - GROSS PROFIT

241,35,72,823.00 - 37,66,54,533.43 = 203,69,18,290.00

Average Inventory 2014-15

Particulars Amount
Opening Stock
Finished Stock 7,71,65,529.12
Raw materials 16,62,391.25
Purchase of Products 1,02,000.00
Total 789,29,920.37
Closing Stock
Finished Stock 11,55,04,647.65
Raw materials 6,50,880.75
Total 116,155,528.40

= Opening Stock + Closing Stock /2

= 97491724.38

51
Average Inventory 2015-16

Particulars Amount
Opening Stock
Finished Stock 11,55,04,647.65
Raw materials 6,50,880.75
Purchase of Products 2,04,97,875.00
Total 136,653,403.40
Closing Stock
Finished Stock 9,49,88,087.13
Raw materials 4,40,075.00
Total 954,28,162.13

= Opening Stock + Closing Stock /2

= 105,791,845.26

Average Inventory 2016-17

Particulars Amount
Opening Stock
Finished Stock 9,49,88,087.13
Raw materials 4,40,075.00
Purchase of Products 2,64,08,847.00
Total 121,837,009.13
Closing Stock
Finished Stock 12,95,52,418.23
Raw materials 4,91,944.00
Total 130,044,362.12

= Opening Stock + Closing Stock /2

= 112,736,262.18

52
Average Inventory 2017-18

Particulars Amount
Opening Stock
Finished Stock 12,95,52,418.23
Raw materials 4,91,944.00
Purchase of Milk Products 5,66,74,464.00
Total 186,718,826.23
Closing Stock
Finished Stock 11,18,43,938.42
Raw materials 13,55,364.00
Total 113,199,302.42

= Opening Stock + Closing Stock /2

= 149,959,064.3
Average Inventory 2018-19

Particulars Amount
Opening Stock
Finished Stock 11,18,43,938.42
Raw materials 13,55,364.00
Purchase of Milk Products 9,25,53,546.00
Total 205,752,848.42
Closing Stock
Finished Stock 15,16,03,116.00
Raw materials 10,42,833.00
Total 152,645,949.00

= Opening Stock + Closing Stock /2

= 179,199,398.7

53
Table 5.2
YEARS COST OF GOODS AVG INVENTORY RATIO(TIMES)

SOLD

2014-15 1171712926.24 97491724.38 12.01

2015-16 1346389535.24 105791845.26 12.72

2016-17 1393034134.19 112736262.18 12.35

2017-18 1759157168 149959,064,3 11.73

2018-19 2036918290 179199398,7 11.36

inventory ratio
13

12.5

12

11.5 inventory ratio

11

10.5
2014-15 2015-16 2016-17 2017-18 2018-19

INTERPRETATION:-
From the above table it is observed that the inventory turnover ratio has decreased every
year. It has increased from 9.56 times to 12.72 times from the year 2005-06 to 2009-10. It is a
test of efficient inventory management. If the company has higher the ratio, the better is the
performance of the company. If the inventory turnover ratio is higher the operating cycle
becomes faster and finally it will lead to higher profits for the company.
DAYS OF INVENTORY HOLDING:
The reciprocal of inventory turnover ratio gives average inventory holding in percentage
term. When the number of days in a year (say 365) is divided by inventory turnover, we obtain

54
days of inventory holdings. The size of the days of inventory holding is measured with the help
of the following ratio:
365
Days of Inventory Holding = ----------------------------
Inventory Turnover Ratio

Table 5.3
Year No of Days in Year Inventory Turnover Period(Days)
Ratio
2014-15 365 12.01 30
2015-16 365 12.72 28.69
2016-17 365 12.35 29.55
2017-18 365 11.73 31.11
2018-19 365 11.36 32.13

Days
33

32

31

30

29 Days

28

27

26
2014-15 2015-16 2016-17 2017-18 2018-19

INTERPRETATION:
From the table the trend of inventory holding period of the company. It is understood that the
days of inventory holding has gradually decreased from 38days to 30 days, because the inventory
turnover ratio and the inventory holding period are interrelated. If the inventory turnover ratio
increases than the days of the inventory holding decreases and vice-versa. It indicates the

55
improvement in the management efficiency in converting their inventories into sales as fast as
possible.
FINDINGS:
1. It is important to study the size of Inventory Management of any enterprise. It decides the
need for best owing attention in the management of this component. In the enterprise
under the study Inventory formed a major percentage of total assets. It varied between the
lowest of 55 percent and the highest of 60 percent to total assets.
2. The composition of current assets is dominated by inventory and receivable in 2001-02
the composition of current assets are dominated by inventory and other current assets.
3. The inventory index and growth rate is so even for instance the annual growth is
negative.
4. The receivable index is highly uneven. In some year it is highly positive and in some year
it is negative. The unevenness is not good.
5. Some of the inventories are ordered on the basis of minimum stock or reorder level.
6. There is no particular method has been followed for valuing the particular type of
inventories

56
Chapter-5

57
SUGGESTIONS:
a. A plan should be drawn to use the surplus milk in some seasons for the
manufacturers of long-lived bi-products.
b. The company should introduce continuous stock verification system for all the
materials.
c. The company should introduce some of the major inventory classification
methods like XYZ analysis and FSN analysis for better control of inventories.
d. The composition of current assets is dominated by inventory and other current
assets in this regard it is advised to the company to maintain a balance among the
different components of current assets.
It is better to start own manufacturing unit for materials like which has monopoly supplier, so
that Ordering Cost and Carrying Costs reduce and can have materials in time

58
CONCLUSION
Here an attempt is made to draw conclusion based on the study of ANANDA EXPORTS Ltd.
The study revealed the following
 The ANANDA EXPORTS Ltd. Have maintain slight standard Inventory levels
 The ANANDA EXPORTS Ltd. EOQ levels was satisfactory.
 The ANANDA EXPORTS Ltd. ABC Analysis was satisfactory
 The ANANDA EXPORTS Ltd. RAW material turnover was satisfactory
 Over all ANANDA EXPORTS Ltd. Financial performance was positive.

59
 BIBILOGRAPHY

S.NO TITLE AUTHOR PUBLISHER YEAR


1. Financial Prasanna TMH New Delhi 2001
Management Chandra
2. Financial Khan & Jain TMH New Delhi 2001
Management
3. Financial V.K.Bhalla ANMOL, New 1998
Management Delhi
4. Production & S.N.Charry TMH New Delhi 2000
operation
Management
5. Production & B.L.Goel Pragathi, New 2001
operation Delhi
Management

OTHER REFERENCES:
1. Manuals of ANANDA EXPORTS.
2. Manuals of Stores Department.
3. Five year Balance sheets

60
Balance sheet as at 31st march 2014

As at 31-03-2013 As at 31-03-2014
Equity and liabilities:
Share holders’ funds:
Share capital 4,42,57,840 2,36,36,840
Reserves and surplus 1,77,25,067 4,25,09,624
2,65,32,773 1,88,72,784
Non current liabilities:
Long term borrowings 15,31,94,961 14,61,13,287
Deferred tax liabilities 10,87,17,961 15,88,100
16,40,66,757 15,77,01,387
Current liabilities:
Short term borrowings 5,04,32,760 7,94,96,518
Trade payables 1,84,92,695 3,34,41,968
Other current liabilities 1,32,75,066 1,04,31,164
Short term provisions 9,48,572 14,25,096
8,31,49,093 12,47,94,746
TOTAL 27,37,48,623 26,36,23,349
Assets:
Non current assets:
Fixed assets 17,48,25,348 16,48,69,629
Long term loans and advances 36,24,057 38,82,624
17,84,49,405 16,87,52,253
Current assets
Inventories 3,97,84,281 3,15,07,937
Trade receivables 4,89,40,208 5,58,03,607
Cash and cash equivalents 18,86,735 38,22,389
Short term loans and advances 46,87,994 37,37,163
Total 9,52,99,218 9,48,71,096
27,37,48,623 26,36,23,349

61
Balance sheet as at 31st march 2015

As at 31-03-2014 As at 31-03-2015
Equity and liabilities:
Share holders’ funds:
Share capital 2,36,36,840 2,52,86,840
Reserves and surplus 4,25,09,624 4,16,50,678
1,88,72,784 1,63,63,838
Non current liabilities:
Long term borrowings 14,61,13,287 17,33,65,142
Deferred tax liabilities 15,88,100 1,18,22,430
15,77,01,387 18,51,87,572
Current liabilities:
Short term borrowings 7,94,96,518 8,35,02,080
Trade payables 3,34,41,968 3,09,85,086
Other current liabilities 1,04,31,164 2,71,85,614
Short term provisions 14,25,096 19,83,974
12,47,94,746 14,36,56,754
TOTAL 26,36,23,349 31,24,80,488
Assets:
Non current assets:
Fixed assets 16,48,69,629 15,99,14,014
Long term loans and advances 38,82,624 43,24,124
16,87,52,253 16,42,38,138
Current assets
Inventories 3,15,07,937 3,67,08,044
Trade receivables 5,58,03,607 10,60,30,230
Cash and cash equivalents 38,22,389 12,44,074
Short term loans and advances 37,37,163 42,60,002
Total 9,48,71,096 14,82,42,350
26,36,23,349 31,24,80,488

62
Balance sheet as at 31st march 2016
As at 31-03-2015 As at 31-03-2016
Equity and liabilities:
Share holders’ funds:
Share capital 2,52,86,840 4,81,15,310
Reserves and surplus 4,16,50,678 3,99,93,899
1,63,63,838 81,21,411
Non current liabilities:
Long term borrowings 17,33,65,142 14,73,07,842
Deferred tax liabilities 1,18,22,430 1,17,22,775
18,51,87,572 15,90,30,617
Current liabilities:
Short term borrowings 8,35,02,080 8,81,45,995
Trade payables 3,09,85,086 4,73,94,679
Other current liabilities 2,71,85,614 4,01,71,110
Short term provision 19,83,974 20,60,595
14,36,56,754 17,77,72,379
TOTAL 31,24,80,488 34,49,24,407
Assets:
Non current assets:
Fixed assets 15,99,14,014 15,80,94,225
Long term loans and advances 43,24,124 52,63,994
16,42,38,138 16,33,58,219
Current assets
Inventories 3,67,08,044 5,69,99,236
Trade receivables 10,60,30,230 11,70,82,611
Cash and cash equivalents 12,44,074 32,24,135
Short term loans and advances 42,60,002 41,60,206
Total 14,82,42,350 18,15,66,188
31,24,80,488 34,49,24,407

63
Balance sheet as at 31st march 2017

As at 31-03-2016 As at 31-03-2017
Equity and liabilities:
Share holders’ funds:
Share capital 4,81,15,310 24,81,15,310
Reserves and surplus 3,99,93,899 1,54,10,479
81,21,411 3,27,04,831
Non current liabilities:
Long term borrowings 14,73,07,842 19,89,93,150
Deferred tax liabilities 1,17,22,775 1,18,03,722
15,90,30,617 21,07,96,872
Current liabilities:
Short term borrowings 8,81,45,995 10,05,09,094
Trade payables 4,73,94,679 4,53,72,339
Other current liabilities 4,01,71,110 1,08,36,734
Short term provision 20,60,595 21,19,782
17,77,72,379 15,88,37,949
TOTAL 34,49,24,407 10,28,39,652
Assets:
Non current assets:
Fixed assets 15,80,94,225 17,98,53,692
Long term loans and advances 52,63,994 53,10,105
16,33,58,219 18,51,63,797
Current assets
Inventories 5,69,99,236 6,16,17,952
Trade receivables 11,70,82,611 14,68,07,389
Cash and cash equivalents 32,24,135 31,96,475
Short term loans and advances 41,60,206 55,54,039
Total 18,15,66,188 21,71,75,855
34,49,24,407 40,23,39,652

64
Balance sheet as at 31st march 2018

As at 31-03-2017 As at 31-03-2018
Equity and liabilities:
Share holders’ funds:
Share capital 24,81,15,310 6,81,15,310
Reserves and surplus 1,54,10,479 2,42,95,462
3,27,04,831 4,38,19,848
Non current liabilities:
Long term borrowings 19,89,93,150 15,63,69,534
Deferred tax liabilities 1,18,03,722 1,11,62,000
21,07,96,872 16,75,31,534
Current liabilities:
Short term borrowings 10,05,09,094 13,45,53,510
Trade payables 4,53,72,339 5,48,10,420
Other current liabilities 1,08,36,734 1,24,73,856
Short term provisions 21,19,782 25,96,187
15,88,37,949 20,44,33,973
TOTAL 10,28,39,652 41,57,85,355
Assets:
Non current assets:
Fixed assets 17,98,53,692 19,15,55,420
Long term loans and advances 53,10,105 43,67,992
18,51,63,797 19,59,23,412
Current assets
Inventories 6,16,17,952 7,40,93,342
Trade receivables 14,68,07,389 13,83,17,550
Cash and cash equivalents 31,96,475 43,40,734
Short term loans and advances 55,54,039 31,10,317
Total 21,71,75,855 21,98,61,943
40,23,39,652 41,57,85,355

65
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