CHAPTER – 1

INTRODUCTION
INTRODUCTION

The correlation between the current assets and current liabilities is working capital
management. The company should manage the current assets and current liabilities in a proper
manner because to help the firm to bring the firm in the satisfactory level, otherwise company
become insolvent and bankruptcy. It will helpful to maintain the safety in the firm. Banks
provide finance to the working capital management other than the trade credit, bank credit is
the next best source. The industry must have some amount as working capital for daily activity.
This concept will helpful to know the existence of the firm in the business world. If the industry
is not in a position to earn income, then it will difficult to run the business in the longer period
of time.

INDUSTRY PROFILE

The basic theme of the pharmaceutical industry is to distribute, develop and research to give
good physical condition to the people in the area. They gave the permission for working in
brand medications as well as medical devices. The industry following many rules and
regulations related to testing, safety, efficiency and selling of medical products.

Initial days the pharmaceutical company faced many problems but now it is one of the
successful industries in the world. Pharmaceutical products are used to treat, cure and prevent
different types of diseases. Pharmaceutical products are used in the medical diagnosis and
preventing diseases. It is very useful to prevent the diseases if the medicines are taken according
to the doctor’s suggestion

Some medical products suggested by the doctors are not there within the locality because it is
given on license basis to a particular physician. Nonprescription medical products are the
products where the medical shops will give to consumers without the suggestion from the
doctors.

1
PHARMACEUTICAL INDUSTRY IN INDIA

“The employment opportunities are more in pharmaceutical industry. Medicines are available
at affordable prices. Essential drugs are used to prepare medical product at affordable prices.
Before 1970 there are no pharmaceutical industry and after that medicines are prepared to meet
the needs of almost 95% countries pharmaceutical industry. The pharmaceutical industry got
good position related to different field i.e. quality, medicines etc, different kinds of products
are available in the countries. The industry providing many job opportunities to thousands of
people. The growth of the firm is depending on many factors such as employees, good worth
etc. Pharmaceutical industry will helpful for providing high level products at correct time in
correct place. It supplies many products within the short period of time. The government gave
many supports to the drug firm for producing quality medicines.

The main purpose for the industry development: -

➢ Profit can be generated from the Indian Pharmaceutical industry and it fulfills the
demand in the world.
➢ The production cost is very less compared to other country.
➢ Expenses related to research and development is very low.
➢ It has very innovative and scientific.
➢ Various medicines have been invented in the national laboratories

BACKGROUND OF THE COMPANY:

Established as a firm in 1998, the company developed as esteem in selling herbal products
outside the nation. They have established themselves as one of the leading companies in this
trade. Started as a single company 15 years ago. Prakruti has now grown into a group of
companies and the group is further growing with its diversification program.

Prakruti Products Pvt. Ltd was incorporated in Navagadde, Agsoor, Ankola, Uttara Kannada
district of Karnataka State in 2006 under the companies Act of 1956 promoted by Mr.

2
Raghavendra Shetty. The industry is ISO 9001:2008 witness firm and it is helpful to produce
the firm in different countries.

The company enlarge activities to standardized Phytochemicals, Formulations, Natural Color’s

and Certified Organic products. Prakruti Products mainly concentrate on Herbal extracts like
Garcinia cambogia, Boswellia, Ashwagandha, Green tea etc. There is prolong achievement in
the industry.

Expansion is not the only aim but along with it also goes the effort to improve the wide range
of products, processes and services, in line with the modern trends. The extraction plants with
over 200 tons raw herbs per month capacity is fully GMP certified. The R & D and QC wings
are constantly upgraded. Organic products of the company have also gained ISO, NPOP, NOP
and USDA certification.

Prakruti Products Pvt Ltd is one of the largest honey processing industry in Southern India.
They export herbal products to countries like USA, Canada, Italy, Brazil, Russia etc. The
industry got very good feedback from the customers after distributing good products within
and outside India.

The recognition of its outstanding performance, the company has won the prestigious Indian
National Award for Small Scale Entrepreneur in 2005 and 2010.

Prakruti Products Pvt Ltd always assures its existing esteemed group of worldwide consumers
which includes healthcare product manufactures the best extracts and phytochemicals from
nature’s pharmacy and with the same promise it welcomes and owes to serve every prospective
new customer.

PRKARUTI GROUP OF COMPNIES

Prakruti Products Pvt. Ltd is producing and selling herbal products within the nation and
outside the nation. The group is catering both OTC and prescribed ayurvedic medicine market.
Groups facilities are GMP certified and are following ISO certified processes.

PRAKRUTI PRODUCTS, the flagship company of the group started with souring the raw
materials and initially got extraction done through third party plants on contract basis. During
the year 2000, the company started its own manufacturing facilitates, which is now GMP
certified.

3
The Company PRAKRUTI REMEDIES PVT.LTD another venture of Prakruti group has
forayed into ayurvedic formulations catering to both OTC and prescription categories.
Companies manufacturing and research facilities are GMP certified and meet all safety and
other norms. They concentrate more on the progress of ayurvedic drug.

For advertising the medical products many colleges, hospitals have been constructed. The
company founded in 1998. The firm covers the necessities of many nations i.e. within and
outside the nation. The industry is having their own equipment to transform raw materials into
perfect products.

COMPANY’S VISION, MISSION AND QUALITY: -

COMPANY’S VISION

“Greening Global Healthcare”

COMPANY’S MISSION

Prakruti Products continuously extracts, purifies and delivers herbal products in the world to
do the medical material greener, safer, cheaper with greatest care and concern through
continuous research and development as per market development.

Quality Objectives: -

➢ Enhance customer satisfaction.

➢ Upgrade employee skill.
➢ Efficient utilization of resources.
➢ Continuous improvement in all process.
➢ Safe working environment.

4
PRODUCT PROFILE: -

Herbal extract, phytochemicals, organic products and cultivation are done by the company year
around. The products are based on agriculture inputs. Company is maintaining export potential
of manufactured products at a reasonable level throughout the year. The company has various
equipment which are used for production.

➢ Garcinia plant
➢ Sesame plant
➢ Curcumin plant
➢ Boiler SS316
➢ Evaporator
➢ Drier
➢ Milling

NATURAL COLORS

➢ Arnett seed extract

➢ Beetroot juice powder
➢ Caesalpiniaceae extract
➢ Marigold extract
➢ Paprika oleoresin

5
 CHAPTER-2

CONCEPTUAL BACKGROUND AND LITERATURE REVIEW

BACKGROUND OF THE STUDY:

Aim of making the decision about the finance aspect is to increase the shareholder’s income so
it will gain sufficient amount of profit. The profit is depending upon the sales. Selling the
product should be successful in order to earn profits in the firm. But sales do not instantly
covert into cash. it will helpful to transform amount to stock, stock to receivables and
receivables to amount. This concept will helpful to make research about different element
related to industries financial action.

Issues related to working capital

Finance manager should go through right resources and he should pay the debt in the proper
time. The finance manager should consider many things in working capital. They are as follows

➢ Time
➢ Investment
➢ criticality

NATURE OF THE BUSINESS CARRIED: -

“PRAKRUTI PRODUCTS PVT LTD” is a research-oriented business venture engaged in the

manufacture and supply of standardized herbal extracts. It manufactures different herbal
extracts like Boswellia and selacia extract etc. It exporting their products to foreign country
such as Germany, Italy, Australia, America etc. It has the responsibility to look for new
customers and review the detail on receipt of customers’ orders. They have responsibility to
ensure customer satisfaction and deliver product on time. The company is having good
underbuilding facilities and selling the good worth products. The company is having different
uniform for separate level employees. The staffs are highly educated.

6
LITERATURE REVIEW

Literature review is the process that one should study the previous research on a particular
subject and give brief explanation about their review. The literature review should contain
introduction body and content. Literature review need not be containing articles and that has
been written on your subject because it is too broad.

Fathin Safiah, Dr. Ismail Nizam (2015)

The main object in study is make research about the WCM will influence on profits in the firm..
Past there are many financial problems occurred that has been forcing the firm. No proper
management will occur business failure. Because of limited information the company is run
out of cash. The impact of WCM is crucial in every firm.

Dr..Navena Nesa Kumari, Dr. M. Victor Louis Anthuvan (2017)

According to him the company should minimize the capital in assets and it is helpful to
minimize the finance cost and increase the amount for the expanding the projects. Liquidity
risk will happen when the current asset level is high. The industries are encouraged to attract
more investment in order to meet the difficulties in manufacturing industries.

Asghar ali and Syed Atif Ali(2012)

According to Asghar ali the industry has taken the good decision i.e. working capital
management. It includes current assets, current liabilities, inventory items etc. Generally, there
is positive impact of the concept on the profit of the firm. In the revenue sector, they were very
sensitive to replace the level of earning and less sensitive to changes in the firm size. The firm
should have required working capital to conduct day today activities smoothly otherwise firm
will forced produce below their optimal scale level.

7
Emmanuel Oseifuah, University of Venda(2018)

Many researches on the working capital management and industries achievement were
conducted during unbalanced periods. Regression technique used to find out the liquidity
position in the company. More use estimating liquidity and short-term financing during the
difficulty in finance had a good effect on profitability. The research differentiates between the
account’s receivables and profitability during the time of crucial and non-crucial period. The
regression and correlation had an undesirable connection between the account’s receivables
and profits during non-crucial period. The firm is not able to decrease the working capital in
the crucial time.

Waqar-ul-Hassan and Mohsin Zubair, (2017)

The company must concentrate to maintain industries position in financial terms. The basic
necessity of managing capital is to reduce the investment in working capital. It will helpful to
good effect on company’s profitability. More investment in short term financing will lead to
decrease in the firm’s profitability. Delay in cash outflows will lead to grow the organization
in the long term. The study will useful for the organization to increase their effectiveness by
maintaining their working capital.

Dr M. Vishwanathan, Dr. A. Palaniswamy(2016)

The main theme of the researcher is to make examine the company’s strong and weak point
and to estimate the status of the company. The research was done by using only 10 years’ data.
They observed the impact of the capital on the gain in the industry and used many statistical
tools like mean, median, mode, correlation, regression etc. to set the connection between the
capital and profits of industry.

Rejaul Karim , Md.Abdullah AI-Mamun(2017)

The research has been done on effect WCM usefulness on gain in the industry between most
competitive firms. For this research they have used 10 years’ data and statistical tools like
correlation, t-test etc. The main aim is to make differentiate between 2 leading companies. The
concept has good effect on profits. The difficulties of working capital management have
considered as one of the critical tasks.

8
Rakibu Islam, Mohammad Emdad Hossain(2018)

According to him the concept is to improve the functioning on profitability of firm. Financial
head finding for the good direction to use the elements to improve the income in the firm. The
study found an undesirable connection of the WCM and gain in the firm. There are some
limitations in the research i.e. available data and time is limited. The upcoming study will be
done by taking the data for 4 times in a year to get the outcome more accurate.

Twahirwa Egide, Dr.Tobias Olweny(2016)

The reason for the research to measure industries activities. More stock will helpful for the
company to create its worth and it is possible only if the company reduces its expenses. Proper
maintenance of assets and liabilities will helpful to make neutral between profit and risk that
helps the firm to run the firm properly. Every company should do hard work to raise assets than
liabilities.

Tanveer Bagh, Muhammad Imran Nazir (2016)

The main object of the study was to evaluate the effect of WCM on industries activity. The
manager can adopt innovative ideas to increase the activities in the company. The researcher
has taken the data of 50 different industries. Correlation and regression method have been used
by the researcher. It shows an undesirable connection between 2 variables. The industries
earning per share is not significant so it shows undesirable effect on the industry.

Kazi Tashkin Huda2015)

The firm’s ambition is to raise the income and the finance head should have proper decision
taking capacity. The company used annual report for accumulating secondary data. In this firm
the company is having good connection of WCM and industries financial transactions.
Financial head deal with the more assets which cause risk and also raises the investment. Hence
the finance head should maintain the investment in order to manage the risk and also use the
assets in the proper way. It shows that capital used for day to day activities will changes in
different industries because of the company’s activities.

9
Md. Amir Sharif, Md. Rafiul Islam(2018)

Research was done to present the link between WCM and profit in the industry. It was very
necessary element to raise profitability status in industry. It has powerful effect on profit and
risk in the industry. The researchers discovered that there was undesirable connection between
Return on Assets and number of days in the stock etc. Finance head has the ability to make
gain for their business by dealing with the money and investing money in several elements.

Nguyen Hai Quang (2017)

The research has been done by using industries annual statement. The research declared that
there is contrary effect on number of inventory days outstanding and number of sales
outstanding. The element of the airlines annual statement will have an impact on the activities
of the industry. The company should have the capacity to regain the amount in sale and it will
helpful to decline the money and increase the company’s performance. The company should
have the good relationship with the spare parts providers to reduce to pay the amount in
advance.

Rahimah Mohamed Yunos, Farha Abdol Ghapar (2018)

Working capital means the money needed for day today activities. Several industries have
invested major portion of the money on stock. The net working capital is must to bring
improvement in the company. The company invest more money on net working capital.
Sufficient amount of capital will useful for the growth of the company and insufficient amount
will lead to close the industry in the short term. It will helpful to find out two types of decision
i.e. to make the investment decision proper and set the level of activities and select the methods
of investment for financing. The organization should identify clear approaches concerning
different component of working capital.

10
 CHAPTER – 3

RESEARCH DESIGN

STATEMENT IN THE PROBLEM

Main importance of the concept arises out of 2 cause

I. The essential part of the capita deposited into current assets.

II. Current assets position may be change according to the changes in the assets.

NEED FOR THE STUDY

This research guided to improve the awareness related to working capital and financial aspects
in the Prakruti Products. It is very useful to know the factors and determinants in the working
capital of the firm.

OBJECTIVES OF THE STUDY

➢ To make research on various components of the concept

➢ To make research on many needs of the concept.
➢ To assess firm’s execution based on annual report.
➢ To ascertain financial ability of the industry.

SCOPE OF THE STUDY

The foremost importance of the concept is to run the business in the short time and on the good
decision that the business is guided. The research is conducted by using different aspects. For
this research previous 5 years’ companies final statement have been used.

11
RESEARCH METHODOLOGY

A study of project becomes completed only when the information is extracted from various
sources are up to the satisfactory keeping this in mind the data collection is made through below
data’s

Primary data:

The data was gathered by discussing with the main head of the finance department Mr. Ullas,
Nagaraj, Salaskar, HR Manoj Nayak and other staff members. Some information has been
collected by the primary data for this study is collected through structured questionnaire with
manager of the Prakruti Products Pvt. Ltd.

Secondary Data:

The data taken from the records internet, journal and last four years balance sheet. The major
sources of these data taken from company prospectus, profit and loss statement, some more
data from text and internet sources.

METHODS OF ANALYSIS:

The data from bank was first analyzed by making a comparative study of the previous 3 year
and inferences were down. The data obtained from the respondents was edited and valid
respondents were retained for the purpose of the analysis involves converting the recorded
observations into descriptive statements and to draw inferences about the perception of NPA
and DRT from the respondents. tabular analysis was carried out statistical tools like graphs,
tables etc. were used for analysis. Finding conclusion and recommendation were derived based
on the analysis of the responses.

Tools for analysis:

➢ Industries financial statement

➢ Graphical statement

12
Limitations of the study

➢ The research mainly depends upon the information which has available in the
organization tools.
➢ It was limited only single organization and no companies are made with the other
similar industries.
➢ The study covers only few aspect of the balance sheet it is restricted to 3 years’ data.
➢ It is difficult to collect information within the short period.
➢ Less time is available to make discussion with the staff members because of their heavy
work.

13
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

Concept of working capital management: -

It refers to investment needed and benefited in every activity in a day. The working capital
mainly includes the property in a firm that are benefitted for the present task. It makes sure the
monetary activities in industry. Following are the concepts,

STATEMENT SHOWING DIFFERENCE IN WORKING CAPITAL: -

This helps to know the high and low in the working capital and to evaluate the 2 years annual
report.

Changes in working capital for the year 2014-15 and 2015-16: -

Table No. 4.1:

Particular’s 2014-15 2015-16

Current Assets (Rs.) (Rs.) Increase in Decrease in

working working capital
capital

Current assets, 43020730 40004896.13 3015833.87

loans and
advances

(a) Total 43020730 40004896.13

current
assets

14
 Current
Liabilities

Current liabilities 20812136 10695608.91 10116527

and provisions

(b) Total current 20812136 10695608.91

liabilities

(a)-(b) Net 22205594 29309287.22

Working Capital

Increase in 7100693.22 7100693.22

working capital

TOTAL 29309287.22 29309287.22 10116527.09 10116527.09

Source: Annual report of the company

Changes in working capital for the year 2015-16 and 2016-17

Table No 4.2

Particulars 2015-16 2016-17

CURRENT (Rs) (Rs) Increase in Decrease in

ASSETS working capital working
capital

Inventories 19004353 23261699.34 4257346.34

Sundry debtor 19422134 31673372.10 12251238.10

Cash and bank 580531 92103.59 488427.41

balance

Other current 997878 953813.97 44064.03

assets

15
Loans and
advances

(a)Total current 40004896 55980989

assets

CURRENT
LIABILITIES

Sundry creditors 8215888 21412762.67 13196874.67

Provisions 827321 873055.37 45734.37

(b)Total current 9043209 22285818.04

liabilities

(a)-(b) Net 30961687 33695170.96

working capital

Increase in 2733483.96 2733483.96

working capital

TOTAL 33695170.96 33695170.96 16508584.44 16508584.44

Source : Annual report of the company

Changes in working capital for the year 2016-17 and 2017-18

Table No.4.3.

Particulars 2016-17 2017-18

CURRENT (Rs.) (Rs.) Increase in Decrease in

ASSETS working capital working capital

Inventories 23261699.34 35054394.66 11792695.32

Sundry debtor 31673372.1 28948775.12 272459698

16
Cash and bank 92103.59 64559.06 27544.53
balances

Other current assets 953813.97 2705383.28

Loans and advances

(a) Total 55980989 66773112.12

current
assets

CURRENT
LIABILITIES

Sundry creditors 21412762.67 35947400.28 14534637.61

Provisions 873055.37 1698734.01 825678.64

Short term 20071453.56 16828298.22 3243155.34

borrowings

(b)Total current 42357271.60 54474432.51

liabilities

(a) – (b) Net 13623717.40 12298679.61

working
capital

Decrease in working 1325037.79 1325037.79

capital

TOTAL 13623717.40 13623717.40 18112457.76 18112457.76

Source : Annual report of the company

17
Changes in working capital for the year 2017-18 and 2018-19 :-

Table no. 4.4:

Particulars 2017-18 2018-19

CURRENT (Rs.) (Rs.) Increase in Decrease in
ASSETS working working
capital capital
Inventories 35054394.66 38112000 3057605.34
Sundry debtor 28948775.12 53602877.95 24654102.83
Cash and bank 64559.06 129382.11 64823.05
balance
Other current 2705383.28 3239946.46 534563.18
assets
Loans and
advances
(a) Total 66773112.12 95084206.52
current
assets
CURRENT
LIABILITIES
Sundry creditors 35947400.28 70184398.49 34236998.21
provisions 1698734 2539798.76 2913980.63
Short term 16828298 18901214.10 2072916.10
borrowing
(b) Total 54474432.28 91625411.35
current
liabilities
(a)-(b) Net 12298679.84 3458795.17
working capital
Decrease in 8839884.67 8839884.67
working capital
TOTAL 12298679.84 12298679.84 39223894.94 39223894.94
Source : Annual report of the company

18
4.5. NET WORKING CAPITAL: -

It is subtraction between assets and liabilities. Good capital shows that the industry having
adequate capital to reach the current needs and wants. Whenever firms’ sales grow the industry
should do more investment in inventory. The finance head should know these aspects in order
improve the industries position.

Formula:

Net working capital = Current Assets – Current liabilities

Table No. 4.5

YEAR CURRENT ASSETS CURRENT NET WORKING

(Rs) LIABILITIES (Rs) CAPITAL (Rs)
2014-15 40004896.13 10695608.91 29309287.22
2015-16 55980989 22285818.04 33695170.96
2016-17 327273112 54474432.51 272798679.5
2017-18 95084207 91625411.35 3458795.65
Source: Annual report of the company

Graph No.4.1

NET WORKING CAPITAL

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

CURRENT ASSETS (Rs) CURRENT LIABILITIES (Rs) NET WORKING CAPITAL (Rs)

19
Interpretation:

This chart declares that in the year 2014-15 industry having the net worth of Rs. 29309287.22.
In the year 2015-16 net worth is rising i.e. Rs.33695170.96. In the year 2016-17 the company
has net worth of Rs. 272798679.50. There is rising in the net worth till 2016-17. In the year
2017-18 the company has 3458795.65 net working capital which shows a decreasing trend.

4.6. GROSS WORKING CAPITAL: -

It means total of all the assets in a industry. Assets includes machinery. furniture etc. liabilities
includes a/c payable, bills payable. It gives a small portion of the information about industries
financial position.

Gross working capital = total current assets

Table No. 4.6

YEAR CURRENT ASSETS(Rs.)

2014-15 40004896.13
2015-16 55980989
2016-17 327273112
2017-18 95084207
Source : Annual report of the company

20
Graph No. 4.2

Gross working capital

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
1 2 3 4 5

YEAR CURRENT ASSETS(Rs.)

Interpretation:

In first year i.e. 2014-15 the gross working capital 40004896.13. In the year second year i.e.
2015-16 is slightly increased at Rs.55980989. But in the third year i.e. 2016-17 it rapidly rising
327273112 and in the year 2017-18 it again decreases to 95084207. This shows that gross
working capital fluctuates throughout the year.

RATIO ANALYSIS: -

➢ Current ratio
It means industries capacity to face the short-term consequences. It will useful to know
whether company having enough money to face every day action.

Current ratio= Current assets

Current liabilities

21
Table No. 4.7:

Year Current Assets Current Liabilities Current Ratio

2014-15 40004896.86 10695608.91 3.74
2015-16 55980989.00 22285818.04 2.51
2016-17 66773112.12 544744432.51 1.23
2017-18 95084207.00 91625411.35 1.04
Source : Annual report of the company

Graph No. 4.3

CURRENT RATIO
600000000

500000000

400000000

300000000

200000000

100000000

0
1 2 3 4 5

Year Current Assets Current Liabilities Current Ratio

Interpretation:

The chart shows the decreasing trend in all years. The normal ratio is 2:1 and during
the first 2 years i.e. 2014-15 & 2015-16 the ratio was above 2 and during the next two
years i.e. 2016-17 & 2017-18 it is below 2 which indicates industry is not solvent
enough to cover industries current obligations.

22
 ➢ Quick ratio
It means the industries capacity to utilize cash. It should be more than 1.0 it shows that
industry is able to face every day activity.

Quick assets (current assets -inventory)

Quick ratio = Current liabilities

Table No. 4.8

YEAR QUICK ASSETS CURRENT QUICK RATIO
(Rs) LIABILITIES
2014-15 21000543.13 10695608.91 1.96
2015-16 32719289 22285818.04 1.47
2016-17 31718717.46 54474432.51 .58
2017-18 56972207.00 91625411.35 .62
Source : Annual report of the company

Graph No. 4.4

QUICK RATIO
100000000
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
2014-15 2015-16 2016-17 2017-18

QUICK ASSETS (Rs) CURRENT LIABILITIES QUICK RATIO

23
Interpretation:

In first year i.e. 2014-15 the quick ratio is 1.96. In second year i.e. 2015-16 it decreases
to 1.47. In the third year i.e. 2016-17 this was again decreased to .58 which falls below
the industry level due to decrease in quick assets. But in the year 2017-18 it is slight
increased to .62 respectively. So the firm status was sufficient.

➢ ABSOLUTE LIQUID RATIO

It is used to know the amount needed to face every day action and it also gives
information about the capacity of the company to pay its current debt.

Cash and bank balance

Absolute liquid ratio =

Current Liabilities

Table No. 4.9

YEAR CASH (Rs) CURRENT ABSOLUTE

LIABILITIES LIQUID RATIO
2014-15 580531.90 10695608.91 .054
2015-16 92103.59 22285818.04 .004
2016-17 64559.06 54474432.51 .0011
2017-18 129382.11 91625411.25 .0014
Source : Annual report of the company

24
Graph No.4.5

ABSOLUTE LIQUID RATIO

100000000
90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
2014-15 2015-16 2016-17 2017-18

CASH (Rs) CURRENT LIABILITIES ABSOLUTE LIQUID RATIO

Interpretation:

In the first year i.e. 2014-15 the absolute liquid ratio was .054, & the second year i.e
2015-16 it is .004 and in the year 2016-17 it is .0011 and in the year 2017-18 it further
rise up to .0014. This not only shows that it is decreasing a year also that it is lower the
required ratio. So the status is deficient.

ACTIVITY RATIO: -

➢ Inventory turnover ratio:

It shows stock sales during the relevant period and it is also compared with the sales
and expenses occurred to sell the product.

Inventory turnover ratio = Net sales

Closing inventory

25
Table No: 4.10

YEAR SALES (Rs) INVENTORY INVENTORY

(Rs) TURNOVER
RATIO
2014-15 119693102.32 19004353.00 6.30
2015-16 178478770.52 23261699.34 7.67
2016-17 214933628.22 35054394.66 6.13
2017-18 331401643.68 38112000.00 8.69
Source : Annual report of the company

Graph No. 4.6

INVENTORY TURNOVER RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

SALES (Rs) INVENTORY (Rs) INVENTORY TURNOVER RATIO

Interpretation:

In this chart the first year i.e 2014-15 stock ratio was 6.30 times. After this year i.e.
2015-16 it is raised to 7.67 times and fall down to 6.13 times in 2016-17. It again raised
to 8.69 times in 2017-18 and it was clearly declares that there is subsequent increase in
2 years i.e. 2015-16 and 2016-17. This shows that sales have been fluctuating over the
period.

26
 ➢ DEBTORS /ACCOUNTS RECEIVABLES TURNOVER RATIO:
Debtors turnover ratio = Net Sales
Average Debtors

Table No. : 4.11

YEAR SALES (Rs) AVERAGE RATAIO
DEBTORS
2014-15 119693102.3 19422134.00 6.16
2015-16 178478770.5 31673372.10 5.63
2016-17 214933628.2 28948775.12 7.42
2017-18 331401643.6 53602877.95 6.18
Source :Annual report of the company

Graph No.4.7

DEBTORS TURNOVER RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

SALES (Rs) AVERAGE DEBTORS RATAIO

27
Interpretation:

The DTR was 6.16 times during the first year i.e. 2014-15. It decreased to 5.63 times
during the second year i.e. 2015-16 but further raised to 7.42 times in the third year i.e.
2016-17. and again it reduces to 6.18 times in the 4th year i.e. 2017-18. It is clear that
the ratio is changing. This shows firm is not in position to collect debts rapidly.

➢ DEBTORS COLLECTION PERIOD:

It shows number of days that the industry took to gather the amount that is given for
trade. If the days is decline it shows good performance of the company.

Debtors collection period = Days in the year

Debtors turnover ratio

Table No: 4.12

YEAR DAYS IN A DEBTORS DEBTORS

YEAR TURNOVER COLLECTIO
RATIO PERIOD
2014-15 365 6.16 55.22
2015-16 365 5.63 64.83
2016-17 365 7.42 49.19
2017-18 365 6.18 59.06
Source : Annual report of the company

28
Graph No.4.8

DEBTORS COLLECTION PERIOD

400
350
300
250
200
150
100
50
0
2014-15 2015-16 2016-17 2017-18

DAYS IN A YEAR DEBTORS TURNOVER RATIO DEBTORS COLLECTIO PERIOD

Interpretation:

There is no much variation in the years. It is 55.22 days in 2014-15 & raised to 64.83
days in 2015-16. In 2016-17 again reduced to 49.19 days. Then again it increased to
59.06 days in 2017-18. It clearly declares that the company position is stable.

➢ CREDITORS /ACCOUNTS PAYABLE TURNOVER RATIO :

It indicates industries capability to give payment to those who will supplies the
products. It is shown in days and indicates that the remaining days the company should
pay to its sellers.

Creditors turnover ratio = Net Purchases

Average turnover ratio

29
Table No: 4.13

YEAR PURCHASES (Rs) TRADE CREDIT

CREDITORS TURNOVER
2014-15 49239435.00 8215888.00 5.99
2015-16 65249102.27 21412762.67 3.05
2016-17 72277579.57 35947400.28 2.01
2017-18 80414703.19 70184398.49 1.14

Graph No.4.9

CREDITORS TURNOVER RATIO

90000000
80000000
70000000
60000000
50000000
40000000
30000000
20000000
10000000
0
2014-15 2015-16 2016-17 2017-18

PURCHASES (Rs) TRADE CREDITORS CREDIT TURNOVER

Interpretation:

The CTR is 5.99 times in 2014-15. After this year i.e. 2015-16 it was 3.04 and in the
year 2016-17 it is reduced to 2.01. finally, in the year 2017-18 it was 1.14 times
respectively. It clearly declares that firm was not able to give sufficient amount to the
creditors.

30
 ➢ CREDITORS PAYMENT PERIOD
Average payment period = Days in the year
Creditors turnover ratio

Table No. 4.14

YEAR DAYS IN A CREDITORS AVERAGE

YEAR TURNOVER PAYMENT
RATIO PERIOD
2014-15 365 5.99 60.90
2015-16 365 3.05 119.78
2016-17 365 2.01 181.53
2017-18 365 1.14 320.18
Source : Annual report of the company

Graph No. 4.10

CREDITORS PAYAMENT PERIOD

400
350
300
250
200
150
100
50
0
1 2 3 4 5

YEAR DAYS IN A YEAR

CREDITORS TURNOVER RATIO AVERAGE PAYMENT PERIOD

Interpretation:

The days were fluctuating over every year. In 2014-15 it is 60.90 days. In the next year
i.e. 2015-16 it was 119.78 days and in 2016-17 it was raised to 181.53 days. At last year
i.e. 2017-18 it was 320.18. it declares payment period was increasing every year.

31
 ➢ WORKING CAPITAL TURNOVER RATIO
Working capital turnover ratio = Net Sales
Net working capital

Table No: 4.15

YEAR SALES (Rs.) NET WORKING WORKING
CAPITAL CAPITAL
TURNOVER
RATIO
2014-15 119693102.3 29309287.22 4.08
2015-16 178478770.5 33695170.96 5.30
2016-17 214933628.2 12298679.61 17.48
2017-18 331401643.6 3458795.65 95.81
Source : Annual report of the company
Graph No. 4.11

WORKING CAPITAL TURNOVER RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

SALES (Rs.) NET WORKING CAPITAL WORKING CAPITAL TURNOVER RATIO

Interpretation:

It was 4.08 times in 2014-15 and but in the year 2015-16 it increases to 5.30 times. In 2016-17
it was again increasing to 17.48. Finally, in 2017-18 it increased to 95.81. There is subsequent
increase from the year 2014 to 2018.

32
OTHER RATIOS:

➢ NET ASSET TURNOVER RATIO

It shows utilization of the assets to produce sales. More net asset shows high capacity
of the industry.
Net asset turnover ratio = Net sales

Total assets

Table No: 4.16

YEAR SALES(Rs.) NET ASSETS (Rs.) ASSET

TURNOVER
RATIO
2014-15 119693102.3 76729744.18 1.56
2015-16 178478770.5 115169112.9 1.55
2016-17 214933628.2 147669151.1 1.46
2017-18 331401643.68 198004070.6 1.67
Source : Annual report of the company

Graph No. 4.12

NET ASSET TURNOVER RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

SALES(Rs.) NET ASSETS (Rs.) ASSET TURNOVER RATIO

33
Interpretation:

In 2014-15 the ratio was 1.56 and then there is slight decrease for two years i.e. 1.55 and 1.46
for the year 2015-16 and 2016-17 respectively. In the last year i.e. 2017-18 it increased to 1.67.
The fluctuation in the ratio is minimal.

➢ CURRENT ASSET TURNOVER RATIO

Current asset turnover ratio = Net sales
Current ratio
Table No: 4.17

YEAR SALES(Rs.) CURRENT CURRENT ASSET

ASSETS (Rs.) TURNOVER RATIO

2014-15 119693102.3 40004896.13 2.99

2015-16 178478770.5 55980989.00 3.19
2016-17 214933628.2 66773112.12 3.22
2017-18 331401643.68 95084207 3.48

Source : Annual report of the company

Graph No. 4.13

CURRENT ASSET TURNOVER RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
1 2 3 4 5

YEAR SALES(Rs.) CURRENT ASSETS (Rs.) CURRENT ASSET TURNOVER RATIO

34
Interpretation:

The ratio was increasing slightly in all years. In first year i.e. 2014-15 it was 2.99. In
the second year i.e. 2015-16 it was 3.19. In the third year i.e. 2016-17 it was 3.22 and
in the fourth year i.e. 2017-18 it was 3.48. There is subsequent increase in the ratio.

➢ FIXED ASSET TURNOVER RATIO

Fixed asset turnover ratio = Net sales
Fixed assets

Table No: 4.18

YEAR SALES(Rs.) FIXED ASSETS FIXED ASSET

(Rs.) TURNOVER
RATIO
2014-15 119693102.3 28954822.05 4.13
2015-16 178478770.5 43978059.92 4.06
2016-17 214933628.2 59707932.97 3.60
2017-18 331401643.68 71931338.76 4.60
Source : Annual report of the company

Graph No. 4.14

FIXED ASSET TURNOVER RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

SALES(Rs.) FIXED ASSETS (Rs.) FIXED ASSET TURNOVER RATIO

35
Interpretation:

It declares decreasing trend over the years. During the first year i.e. 2014-15 it was 4.13. and
subsequent decrease in the 2nd year and 3rd year i.e. 2015-16 and 2016-17 it was 4.06 and 3.60
respectively. During the year 2017-18 it slightly increased to 4.60 respectively.

➢ WORKING CAPITAL TO TOTAL ASSETS RATIO

Working asset to total asset = Working capital
Total assets

Table No: 4.19

YEAR WORKING TOTAL ASSETS RATIO

CAPITAL (Rs.) (Rs.)
2014-15 29309287.22 76729744.18 .382
2015-16 33695170.96 115169111.90 .292
2016-17 272798679.50 407169150.90 .669
2017-18 3458795.65 198004070.60 .017
Graph No. 4.15

WORKING CAPITAL TO TOTAL ASSET TURNOVER

RATIO
450000000
400000000
350000000
300000000
250000000
200000000
150000000
100000000
50000000
0
2014-15 2015-16 2016-17 2017-18

WORKING CAPITAL (Rs.) TOTAL ASSETS (Rs.) RATIO

36
Interpretation:

It shows that was 38.2% in the first year i.e. 2014-15 but in the year second year i.e.
2015-16 it is decreased to 29.2%. In the third year i.e. 2016-17 it raised to 66.9 %.
During the year 2017-18 .017 percent of the total investment is connected in this ratio
which may be a threat to the company short term solvency.

➢ CASH TO SALES RATIO

Cash to sales ratio = Cash
Sales

Table No: 4.20

YEAR CASH (Rs) SALES (Rs) RATIO

2014-15 580531.00 119693102.3 .00485
2015-16 92103.59 178478770.5 .00052
2016-17 64559.06 214933628.2 .00030
2017-18 129382.11 331401643.68 .00039
Source : Annual report of the company

37
Graph No. 4.16

CASH TO SALES RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

CASH (Rs) SALES (Rs) RATIO

Interpretation:

In the first year i.e. 2014-15 cash sales were .485%. but in the second year i.e. 2015-16
it suddenly reduced .052% and again in the third year i.e. 2016-17 it decreased to .03%.
But in the fourth year i.e. 2017-18 it slightly increased to .039%. This indicates that it
was fluctuating throughout the year.

➢ CASH TO CURRENT ASSETS RATIO

Cash to current assets ratio = Cash
Current assets

Table No: 4.21

YEAR CASH (Rs) CURRENT RATIO

ASSETS (RS)
2014-15 580531 40004896.13 .0145
2015-16 92103.59 55980989.00 .00164
2016-17 64559.06 327273112.00 .00019
2017-18 129382.11 95084207.00 .00136
Source: Annual report of the company

38
Graph No. 4.17

CASH TO CURRENT ASSET RATIO

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2014-15 2015-16 2016-17 2017-18

CASH (Rs) CURRENT ASSETS (RS) RATIO

Interpretation:

The current assets in the first year that is 2014-15 it was 1.45% but in the second year
i.e. 2015-16 it decreased to .164 and again in the third year i.e. 2015-16 it suddenly
reduced to .019. In the fourth year i.e. 2017-18 it slightly raised to .136. Out of the total
investment in current assets only .136% constitutes for cash balance.

39
 CHAPTER – 6

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

FINDINGS: -

➢ There is irregularity in the NWC over the years.

➢ The current ratio of the industry was declining year after year but in the year 2017-
18 it is slight increased to .62.
➢ There is lack in the liquidity status of the company and it is declining over the year.
➢ DTR in industry is varying and in 2016-17 it is highest i.e. 7.42.
➢ The creditors turnover ratios slop downwards over the years i.e. 5.99 to 1.44 from
the year 2014-15 to 2017-18.
➢ The company has maintained average payment period very good and it is growing
faster over the years.
➢ Working capital turnover ratio is increasing from 2014-15 to 2017-18 i.e. 4.08 to
95.81 which is the good rate that the company has maintained.
➢ The net asset turnover ratio is decreasing from 1.56 to 1.46 from the year 2014-15
to 2015-16 later it raised to 1.67.
➢ The fixed turnover ratio is slightly decreasing from 4.13 to 3.6 from the year 2014-
15 to 2016-17 which later had sudden increase of 4.6 in current year.
➢ Cash to current asset has suddenly decreased to .019% in the year 2016-17 from
1.45 year. In 2017-18 it is slightly raised to .136%.
➢ The liquidity status was not well as they do not maintain reasonable cash to pay off
it immediate obligations.
➢ The overall status in company is satisfactory.

SUGGESTIONS: -

➢ The company should take proper measure to raise the performance of working capital
of the industry.
➢ Profit has also decreased this is also not a better indication for the growth in the
industry.
➢ Proper measure should be adopt by the industry for gathering and investing amount
from receivables and decline the debts.

40
 ➢ Creditors turnover ratio is fluctuating. The industry should pay to the supplier timely.
It will helpful for the industry to grow.
➢ The industry should concentrate on its liquidity position.

CONCLUSION: -

The research on the working capital management Prakruti Products Pvt.td. to ascertain the
industries annual status. Financial status of the industry was measured with the help of annual
statement from 2014-15 up to 2017-18. The annual status of the industry is satisfactory.
Inventory turnover ratio has raised and perfect indication for the development of the company.
The liquidity status of the industry was not stable. In this time period they have invested
sufficient funds. Proper measure should be adopted by the firm for not doing additional
investment on the assets. They can be used for the good object. At the end the company going
with the good management.

41
 BIBLIOGRAPHY

BOOKS:

➢ Varma C.R.T, “Financial Management” The Institute of Chartered Accountants of

India”, New Delhi, (2003) p.p 1-66, 86-110.
➢ Bharat Sudindra “Management accounting “ , Excel Books, New Delhi, 2009, p.p 175-
177.
➢ Pandey IM “Financial Management” Vikas Publication, New Delhi, Ninth Edition –
2008 (Fifth Reprint), p.p 577-658.
➢ Bhalla V.K “Financial Management and policy”, Anmol Publications Pvt Ltd., 4th
Edition -2004, New Delhi, P.P 181-209.
➢ RNS Pillai and Bhagavthi “Management Accounting” S. Chand and Company limited,
New Delhi, 4th revised edition, p.p 322-330.

WEBSITE:

➢ http://www.prakruti.com
➢ http://www.academia.edu/documents/in/aproject-report-on-working capital/
➢ http://euroasiapub.org/ijrfm/nov2011/1.pdf
➢ http://www.managementparadise.com/mahmmadramiz2711/documents/4119/wokring
-capital-and-pharmaceutical-industry/

OTHER SOURCES

➢ Annual report of the “PRAKRUTI PRODUCTS PVT LTD.”. 2014-15 TO 2017-18

Reference

1. Fathin Safiah, Dr. Ismail Nizam, “The effect of working capital management on the
profitability of plantation and petroleum sector in Malaysia, International journal of
Accounting and business management, Vo.3(No.2),November 2015,ISSN:2289-4519.
2. Dr. Navena Nesa Kumari, Dr. M. Victor Louis Anthuvan liba, loyola (2017), “A study
on the impact of the working capital management on the profitability of the leading listed
Automobile companies in India (2006-2012)”, International Journal on Scientific
Research and Management(IJSRM), Volume 5, issue 08 , pages 6744-6757.

42
3. Asghar Ali & Syed Atif Ali, The University of Lahore ,Global Journal of Management
and Business research, Volume :12 ,Issue 17, Version 1.0, Year 2012, ISSN:2249-4588
& Print ISSN:0975-5853.
4. Emmanuel Oseifuah, University of Venda, Academy of Entrepreneurship journal,
“Global financial crisis, working capital management and profitability of non-financial
firms listed on the Johannesburg stock exchange”, South Africa, Volume :24, Issue
3,2018.
5. Waqar-ul-Hassan, Mohsin Zubair, Zeeshan Hasnain, Shahbaz Hussain, “Working
capital management among listed companies of Pakistan”, International journal of
research-granthaalayah, 5(2), 80-91.
6. Dr. M. Viswanathan, Dr. A. Palanisamy, Mr. R. Mahesh, “A comparative study on
working capital management of selected pharmaceutical companies in India”,
International Journal of Management and Social sciences, ISSN:2445-2267, Volume 03,
Issue 03(2016).
7. Rejaul Karim, Md. Abdullah AI-Mamun ,Md. Tota Miah, “Relationship between
working capital management efficiency and profitability”, International journal of
Economics, Finance and Management Sciences, Volume 5,No.2 2017,5(2):121-128.
8. Rakibul Islam, Mohammad Emdad Hossain, Mohammad Nazmul Hoq and Md.
Morshedul Alam , “Impact of working capital management on corporate profitability”,
International journal on Economics and Finance, Volume 10, No.9, 2018, ISSN 1916-
971X
9. Twahirwa Egide, Dr.Tobias Olweny, Dr. Mbabazi Mbabazize Peter, “Effect of working
capital management on organizational performance”, International Journal of Thesis
Projects and Dissertations, Volume 4, Issue 2, PP: (143-151), Month: April-June 2016.
10. Tanveer Bagh, Muhammad Imran Nazir, Muhammad Asif Khan, Muhammad Atif
Khan, Sadaf Razzaq, “the impact of working capital management on firms financial
performance”, International journal of economics and financial issue, 2016,6(3), 1097-
1105, ISSN: 2146-4138.
11. Kazi Tashkin Huda, “Working Capital Management and Solvency of the industries in
Bangladesh”, Research Journal of Finance and Accounting, ISSN 2222-1697 (Paper)
ISSN 2222-2847(online), Volume 6, No.10, 2015.
12. Md. Amir Sharif, Md. Rafiul Islam, “Working Capital Management a Measurement
Tool for Profitability”, Journal of Finance and Accounting, Volume No.6, No.1, 2018,
pp.1-10.
43
13. Nguyen Hai Quang, “Impact of Working Capital Management to Business Efficiency
of Association of Asia Pacific Airlines”, International Journal of Mechanical
Engineering and Applications. Special Issue: Transportation Engineering Technology-
part 3. Volume 5, No.4-1, 2017, pp.-13.
14. Rahimah Mohamed Yunos, Farha Abdol Ghapar, Syahrul Ahmar Ahmad and Noraisah
Sungip, “Working Capital Management and its effect on Profitability”, Insight Journal,
Voume.1, No.1, 2018, pp: 71-87.

44
 ANNEXURE

PRAKRUTI PRODUCTS PVT LTD.

BALANCE SHEET AS ON 31ST MARCH 2017-2018

Particulars Note No 31-03-18 31-03-17

Equity shareholders
1. Shareholders fund
a) Share capital 1 4467666000 10000000
b) Reserves and 2 24793296.43 19710502
surplus
2. Share application money - 38874133
pending allotment
3. Non-current liabilities
a) long term liabilities 356669900 23797114
b) deferred tax 3
liabilities(net) 124180700 812970
c) other long term - -
liabilities 4 - -
d) long term provision

4. current liabilities
a) Short term 5 18901214.10 16828298
borrowings 6 70184398.49 35947400
b) Trade payables - - -
c) Other current 7 2539798.76 1698734
liabilities
d) Short term
provisions

45
ASSETS:
1)Non-current assets:
a) Fixed assets: 8
i. Tangible assets 70113988.26 58999412
ii. Intangible assets 1817350.50 1708521
b) Non-current investment 9 30988525.50 20188106
2) current assets:
a) current investment
b) inventory 10 38112000 35054395
c)trade receivables 11 53602877.95 28948775
d)cash and cash equivalent 12 129382.11 64559
e)short term loans and advances 13 3239946.46 2705383
f)other current assets
TOTAL 198004070.78 147669151

TRADING, PROFIT AND LOSS A/C: -

Particulars Note 31-03-17 31-3-18

No.
1. Revenue from operations 14 331401643 214933628
2. Other income 15 6139098.31 1602537
3. Total revenue(1+2) 337540741.99 216536165
4. Expenses
➢ Cost of materials consumed 16 175625034.15 110147540
➢ Purchases of stocks in trade 17 80414703.19 72277580
➢ Changes in inventory of finished goods
work in progress and stock in trade 18 (1349909.85) (13334500)
➢ Employees benefit expenses 6573492 7440414
➢ Finance costs 19 5807982.93 5226551
➢ Depreciation and amortization expenses 20 9158606.00 7259786
➢ Other expenses - 55799205.72 23939122
Total expenses 332029114.14 212956493

46
 PROFIT BEFORE EXCEPTIONAL AND 21
EXTRAORDINARY ITEMS AND TAX
5. (3-4)
6. Exceptional items 5511627.85 3579672
7. Profit before extraordinary item and tax (6-
7)
8. Extra ordinary items 5511627.85 3579672
9. Profit before tax (7-8) -
5511627.85 3579672
10. Tax expenses -
a) Current tax
b) Deferred tax
Profit (loss) for the period from continuing - 428833.00 483824
operations (7-8)
11. Profit and loss from discounting operations
12. Tax expenses of discontinuing operation 5082794.85 3095848
(after tax)
13. (11-12)

14. Profit and loss for the period (11+13) 5082794.85 3095848

47
 BALANCE SHEET AS ON 31ST MARCH 2016-2017

Particulars Note No 31-03-16 31-03-17

Equity shareholders
1. Shareholders fund
c) Share capital 1 10000000 10000000
d) Reserves and surplus 2 11614653 19710502

2. Share application money - -

pending allotment
3. Non-current liabilities
e) long term liabilities 14251550 23797114
f) deferred tax 3 329146
liabilities(net) 812970
g) other long term - -
liabilities 4 -
h) long term provision 1652400

4. current liabilities
e) Short term 5 20071453.56 16828298.22
borrowings 6 21412762.67 35947400.28
f) Trade payables - - -
g) Other current 7 873055.37 1698734.01
liabilities
h) Short term
provisions

48
ASSETS:
1)Non-current assets:
c) Fixed assets: 8
iii. Tangible assets 43387493.42 58999412.47
iv. Intangible assets 590566.50 1708521
d) Non-current investment 9 15210064 20188106
2) current assets:
a) current investment
b) inventory 10 2361699.34 35054395
c)trade receivables 11 31673372.10 28948775.12
d)cash and cash equivalent 12 92103.59 64559.06
e)short term loans and advances 13 953813.97 2705383.28
f)other current assets
TOTAL 11516911.92 147669151

49
 TRADING, PROFIT AND LOSS A/C: -

Particulars Note 31-03-17 31-3-16

No.
1. Revenue from operations 14 178478771 214933628
2. Other income 15 1711586 1602537
3. Total revenue(1+2) 180190357 216536165
4. Expenses
➢ Cost of materials consumed 16 79148538 110147540
➢ Purchases of stocks in trade 17 65249102.27 72277580
➢ Changes in inventory of finished goods
work in progress and stock in trade 18 (866153.47) (13334500)
➢ Employees benefit expenses 5885539 7440414
➢ Finance costs 19 4187801 5226551
➢ Depreciation and amortization expenses 20 -
➢ Other expenses - 15567562 23939122
Total expenses 175873467 212956493

PROFIT BEFORE EXCEPTIONAL 21

AND EXTRAORDINARY ITEMS AND
TAX
5. (3-4) 4316890 3579672
6. Exceptional items
7. Profit before extraordinary item and tax
(6-7) 4316890 3579672
8. Extra ordinary items -
9. Profit before tax (7-8) 4316890 3579672
-
10. Tax expenses
c) Current tax
d) Deferred tax - 260969 483824
Profit (loss) for the period from continuing
operations (7-8)
4055920.81 3095848

50
 11. Profit and loss from discounting
operations
12. Tax expenses of discontinuing operation
(after tax) -
13. (11-12)

14. Profit and loss for the period (11+13) 4055920.81 3095848

BALANCE SHEET AS ON 31ST MARCH 2016-2015

Particulars Note No 31-03-16 31-03-15

Equity shareholders
5. Shareholders fund
e) Share capital 1 10000000 10000000
f) Reserves and surplus 2 11614653 7558732

6. Share application money - -

pending allotment
7. Non-current liabilities
i) long term liabilities 14251550 24530316
j) deferred tax 3 329146 68177
liabilities(net)
k) other long term - -
liabilities 4
l) long term provision 1652400 1652400

8. current liabilities
i) Short term 5 20071453.56
borrowings 6 21412762.67 8215888

51
 j) Trade payables - - -
k) Other current 7 873055.37 827321
liabilities
l) Short term
provisions
ASSETS:
1)Non-current assets:
e) Fixed assets: 8
v. Tangible assets 43387493.42 28262423
vi. Intangible assets 590566.50 692399
f) Non-current investment 9 15210064 7770026
2) current assets:
a) current investment
b) inventory 10 2361699.34 19004353
c)trade receivables 11 31673372.10 19422134
d)cash and cash equivalent 12 92103.59 580531
e)short term loans and advances 13 953813.97 997878
f)other current assets
TOTAL 11516911.92 76729744

52
 TRADING, PROFIT AND LOSS A/C: -

Particulars Note 31-03-16 31-3-15

No.
1. Revenue from operations 14 178478771 120984196
2. Other income 15 1711586 1641025
3. Total revenue(1+2) 180190357 122625221
4. Expenses
➢ Cost of materials consumed 16 79148538 422711052
➢ Purchases of stocks in trade 17 65249102.27 49239435
➢ Changes in inventory of finished goods
work in progress and stock in trade 18 (866153.47) (1490026)
➢ Employees benefit expenses 5885539 4214542
➢ Finance costs 19 4187801 2408641
➢ Depreciation and amortization expenses 20 3408427
➢ Other expenses - 15567562 18271832
Total expenses 175873467 121303955

PROFIT BEFORE EXCEPTIONAL 21

AND EXTRAORDINARY ITEMS AND
TAX
5. (3-4) 4316890 1321266
6. Exceptional items
7. Profit before extraordinary item and tax
(6-7) 4316890 1321266
8. Extra ordinary items
9. Profit before tax (7-8) 4316890 1321266

10. Tax expenses

e) Current tax
f) Deferred tax - 260969 96305
Profit (loss) for the period from continuing
operations (7-8)
4055920.81 1224961

53
 11. Profit and loss from discounting
operations
12. Tax expenses of discontinuing operation
(after tax) -
13. (11-12)

14. Profit and loss for the period (11+13) 4055920.81 122496

BALANCE SHEET AS ON 31ST MARCH 2015-2014

Particular Note No 31-3-15 31-3-14

Equity and
liabilities
1)Share holders fund 1
a) Share capital 2 10000000 10000000
b) Reserves and
surplus 7558732.51 6135771

2) Share application 23876910 10974410

money pending
allotment
Total (A) 41435642051 27110181
3) Loan funds 24530315.76 17578935
a) secured loans 68177.00 -
b) deferred tax 3
liabilities(net)
TOTAL (B) 24598492.76 17578935
Grand total (A+B) 66034135.27 44689116

54
4) Application of
funds
a) fixed assets 4 28954822.05 21699111
b)investments 5 7770026 743511
1)current assets, 6 40004896.13 43020730
loans and advance
Less: current 10695608.91 20812136
liabilities and 7
provisions
Net current assets and 29309287.22 22208594
loans 8
Miscellaneous
expenditure 37900
Total 66034135.27 44689116

55
 Manufacturing, trading, profit and loss A/C: -

Particulars schedule 31-3-15 31-3-14

1) Income 9 119693102.32 112134276
2) Processing 1291094.05 2581383
charges 10 1641025.02 926804
3) Other income
Total (A) 122625221.39 115642463
Expenditure: -
4) Purchase of 11 49239435 53463860
finished
goods 12 53753883.69 46890149
5) Cost of 13 12493568.29 8733473
production 2408641.03 2179390
6) Other 14
expenses 3408427.19 3169996
7) Financial
expenses
8) Depreciation

Total (B) 121303955.20 114436869

Net profit (A-B) 1321266.19 1205595
Less: provision for
deferred tax liability 96305.00 9194.00
for the year
Net profit c/f to 1224961.19 1196401
balance sheet

56
57