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1.1 INTRODUCTION L
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In financial strength and profitability of any firm, we study

about the financial statement of the firm. The financial statements are the end

product of the financial accounting process. The financial statement is nothing

but the financial information presented in concise and capsule from, and the

financial information relating to the financial position of the firm. The financial

statement is prepared by the-

To communicate with different parties about the financial

position of the firm. To analyze the operation and performance of the firm for

future planning.

The profitability statement is prepared on the three basic

considerations with different ratio which shows the strength of the firm.

➢ The Balance sheet

➢ The Income Statement

➢ Statement of Appropriation of profitability ratio on assets or investment.

Ratio analysis is a widely-used tool of financial analysis. It can

be used to compare the risk and return relationship of films of different size. It

is defined as the systematic use of ratio to interpret the financial statements so

that the strength and weakness of a firm as well as its historical performance

and current financial condition can be determined.

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Every finance manager is involved in financial decisionL
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making and financial planning. In order to taking right decision at the right

time on the basis of different ratio.

The strength and Profitability of the any firm in based on the

Balance Sheet, Income Statement of appropriation of profit. Balance Sheet is

regarded as the most signification and basic financial statement of any firm.

The Balance sheet is prepared by a firm to present a summary of

financial position at a given point of time. It presented the assets of the firm (i.e.

obligation towards outsiders) and contribution of the owners of the firm.

The Income statement, also known as the statement of Earning,

summarizes of the revenues and expense of the firm for an accounting of source

of income and expenses.

The Income statement of flow report as against the Balance Sheet

which is a stock report or status report.

The company Act 1956 does not provide that the IS of a

company shall given true and fair view of profit or loss of the company during

the financial year. The Income statement include revenues, Expenses and net

profit or loss.

1.2 PAPER INDUSTRY


Economic stability of nation depends on the strong industrial base it

enjoys. The Indian economy is on a new growth path with buoyancy in capital
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markets, positive growth in GDP, strong forex reserves and remarkableL
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growth in industrial sector. The future prospects of Industrial sector as a

whole looks promising as outlays on mega projects in Paper & power sectors

are contemplated in unprecedented manner. India is going to be a base for

expansion of capacity of many industries by many multinationals and others

with lower costs & higher scope for increasing exports to neighboring countries.

History of Indian paper Industry

Paper industry in India is the 15th largest paper industry in the world. It

provides employment to nearly 1.5 million people and contributes Rs 25 billion

to the government's kitty. The government regards the paper industry as one of

the 35 high priority industries of the country. Paper industry is primarily

dependent upon forest-based raw materials. The first paper mill in India was set

up at Sreerampur, West Bengal, in the year 1812. It was based on grasses and

jute as raw material. Large scale mechanized technology of papermaking was

introduced in India in early 1905. Since then the raw material for the paper

industry underwent a number of changes and over a period of time, besides

wood and bamboo, other non-conventional raw materials have been developed

for use in the papermaking. The Indian pulp and paper industry at present is

very well developed and established. Now, the paper industry is categorized as

forest-based, agro-based and others (waste paper, secondary fibre, bast fibers

and market pulp).

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In 1951, there were 17 paper mills, and today there are about 515 unitsL
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engaged in the manufacture of paper and paperboards and newsprint in India.

The pulp & paper industries in India have been categorized into large-scale

and small-scale. Those paper industries, which have capacity above 24,000

tonnes per annum are designated as large-scale paper industries. India is self-

sufficient in manufacture of most varieties of paper and paperboards. Import is

confined only to certain specialty papers. To meet part of its raw material needs

the industry has to rely on imported wood pulp and waste paper.

Indian paper industry has been de-licensed under the Industries (Development

& Regulation) Act, 1951 with effect from 17th July, 1997. The interested

entrepreneurs are now required to file an Industrial Entrepreneurs'

Memorandum (IEM) with the Secretariat for Industrial Assistance (SIA) for

setting up a new paper unit or substantial expansion of the existing unit in

permissible locations. Foreign Direct Investment (FDI) up to 100% is allowed

on automatic route on all activities except those requiring industrial licenses

where prior governmental approval is required.

Growth of paper industry in India has been constrained due to high cost of

production caused by inadequate availability and high cost of raw materials,

power cost and concentration of mills in one particular area. Government has

taken several policy measures to remove the bottlenecks of availability of raw

materials and infrastructure development. For example, to overcome short

supply of raw materials, duty on pulp and waste paper and wood logs/chips has

been reduced.
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Following measures need to be taken to make Indian paper industryL
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more competitive:

• Improvements of key ports, roads and railways and communication

facilities.

• Revision of forest policy is required for wood based paper industry so

that plantation can be raised by industry, cooperatives of farmers, and

state government. Degraded forest land should be made available to the

industry for raising plantations.

• Import duty on waste paper should be reduced.

• Duty free imports of new & second hand machinery/equipment should be

allowed for technology up gradation.

NEED OF RATIO ANALYSIS:

It’s a tool which enable the lender or banker to arrive at the following factors :

➢ Liquidity Position.

➢ Profitability.

➢ Solvency.

➢ Financial Stability.

➢ Quality of the Management.

Safety and security of the loans and advances to be already been provided.

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Which ratio will each of these group be interested in?

In this page you should complete the table below (you can do this

by printing it out). In the left hand column there is a list of interest group one by

one. Our job is complete the right hand column by giving two or three example

of ratio when you have filled gaps you will appreciate that it gives us some

ideas about the ratio that each of the users we have identified would be as

follows

Return on capital
investor employed
Gearing
Lender ratio
Profitability
Manager ratio
Owners of company and other Return on capital
institution employed
Supplier and other
trade creditor Liquidity

Customers Profitability
Government and other
agencies Profitability
Local This could be long and
community interesting list

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Financial Possibly all L
analysis ratio
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Environmental Expenditure on anti-
group pollution measures
Depends on the nature of
Researchers the study

THEORATICAL BACKGROUND OF STUDY

INTRODUCTION

Ratio implies arithmetical relationship between two related figures.

Ratio analysis as a technique for interpretation of financial statement and deal

with computation of various ratio by grouping various figures and/or

information appearing in the financial statements.

According to accountant’s handbook by Wixon, Kell & Bedford, a ratio is

expression of the quantitative relationship between two number.

INTERPRETAION:

The interpersonal of the ratio is an important factor through calculation

of ratio is also important but it is only a clerical task where as interpretation

needs skill, intelligence and foresightedness.

The objective of ratio analysis may not be fulfilled unless the

calculated ratios can be compared with some yardsticks. The interpretation of

ratio can be made in the following ways:

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The ratio of one organization may be compared with the ratio of the L
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same organization for various years.

The interpretation of the ratio can be made by following ways,

 Single absolute ratio.

 Group of ratio.

 Historical ratio.

 Project ratio.

 Inter-firm comparison.

ROLE:

The ratio analysis is used by the manager for the decision making,

financial forecasting and planning, communication, co-ordination and effective

control.

Ratio analysis will be useful to the investor in making up his mind

whether present financial position of a concern warrant further invest or not .

Ratio analysis helps in appraising the firm in term of their profitability and

performance individually. It can be also being done in relation to other firm. It

helps the planning and controlling part of the organization.

1.3 BASIC TERMS


RATIO ANALYSIS:

Ratio analysis is the process of determining and interpreting

numerical relationship between figures of the financial statement. Ratio analysis

is the common sited form of capital management. The technique of ratio

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analysis is used for measuring the short-term liquidity or working capitalL
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position of a firm.

The ratio to be calculated are as follows

FINANCIAL OPERATING COMPOSITE


RATIO RATIO RATIO
1.fixed Assets
1.Currency Ratio 1.Gross Profit Ratio Turnover ratio
2.Quick Assets 2.Return on total
Ratio 2.Operating Ratio Resource Ratio
3.Return on Own
3. Proprietary Ratio 3.Expences Ratio fund ratio
4.Earning Per Share
4.Debt Equity Ratio 4.Net Profit Ratio Ratio
5.Stock Turnover 5.Debtor's Turnover
Ratio Ratio

WORKING CAPITAL MANAGEMENT


(The Concept and Meaning)
Introduction:

Fixed capital and working capital are two main categories of

capital required in the business. Current asset is required for the short-term

financing where as fixed assets is required for the long-term financing.

The management of fixed assets different from current assets in

three different ways, i.e.

a) Time is an important factor in managing fixed assets; consequently,

discount and compounding techniques play a significant role in capital

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budgeting, whereas in current assets these are the minor factor. L
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b) The large holding of current assets, especially cash, strengthens the

firm’s liquidity position, reduces the risk, but also reduces the overall

profitability. Thus a risk-return trade off is involved in holding current

assets.

c) The level of fixed as well as current assets depends upon expected sales,

but current assets can be adjusted with the sales fluctuation in the short-

run.

Thus, the firm has greater degree of flexibility in managing current assets.

In business, funds are needed for two purpose:

1. For the establishment.

2. For its day-to-day operation.

1. Fixed Capital:

Long-term fund are needed to create production facilities and this

can be done by purchase of fixed assets, like plant and machinery, land,

building, furniture and fixture, etc. investment in these assets represent the

blocked part of firm’s capital on a fixed or permanent basis and so called as

Fixed Capital.

2. Working Capital:

Working capital includes the current assets and current

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liabilities areas of the balance sheet. The alternative name of it is ”NetL
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current assets”. Finding adequate fund for running the business unit at the

maximum possible capacity is another aspect of financial management,

known as management of working capital. The important of working capital

may be judged by the sharing pattern between current assets and fixed assets.

OBJECTIVE:

The objective is to minimize the amount of working capital

employed financing the current assets. This will lead to an improvement in the

“Return On Capital Employed”.

Its important stems fro two reasons:-

1. Investment in current assets represents substantial portion of total

investment.

2. Investment in current assets and the level of current liabilities have to be

geared quickly to change in sales

SOURCES OF WORKING CAPITAL:-

1. Fund from business operation.

2. Sales of fixed assets.

3. Issues of share capital.

4. Short term borrowings.

Kinds of Working Capital:-

○ On the Basis of Concept.

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○ On the Basis of Time. L
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DIAGRAMATIC REPRESENTATION

BASED ON CONCEPT

There are mainly two concepts of working capital:


○ Gross working capital.
○ Net working capital.

GROSS WORKING CAPITAL:

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Gross working capital is a capital invested in the current assets of theL
enterprise. Current assets are those assets, which in ordinary course of businessT
can be converted into cash within a short period, normally one accounting year.

CONSTITUENT OF CURRENT ASSETS:


○ Cash in hand
○ Bills receivable
○ Sundry debtors
○ Short term securities
○ Inventories

NETWORKING CAPITAL
Net working capital refers to the difference between current assets and current
liabilities
Net working capital = current assets – current liabilities

Constituents of current liabilities


○ Bills payable
○ Sundry creditors
○ Short term loans
○ Bank overdrafts
○ Outstanding expenses
Net working capital either be positive or negative, when current assets

exceed current liabilities it is positive and when reversed it is

negative.

BASED ON TIME.

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○ Permanent working capital L
○ Temporary working capital T

PERMANENT WORKING CAPITAL

It is the minimum level of current assets, which is continuously required to

ensure effective utilization of fixed facilities and for maintaining the circulation

of current assets.

For example: every company has to maintain a minimum level of raw material,

work in progress, finished goods, cash balance

TEMPORARY WORKING CAPITAL

The extra working capital needed to support the change in production and sales

activities called temporary working capital. It is required to meet seasonal

demand and some special exigencies. For example: Launching the extensive

marketing campaigns for conducting research.

FACTORES DETERMINING

THE WORKING CAPITAL REQUIREMENTS


The working capital management of a concern depends upon a large

number of factors such as nature of business, length of the production cycle etc.

each having a different importance and influence of individual factors change

over the time. However, some important factors are outlined as below.

➢ Nature of a business
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➢ Demand of business T

➢ Cash requirement

➢ Inventory turnover

➢ Business cycle

➢ Credit policy market condition

➢ Activity of firm

2.1 TITLE OF STUDY:


The title of my project is “A Study on, FINANCIAL STRENGTH AND

PROFITABILITY of BILT GRAPHICS PRODUCT LTD, BALLARPUR”

2.2 STATEMENT OF THE PROBLEM:


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Financial statements are prepared for the purposes of presenting a L
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periodical report by the management and deal with the state of investment in

business and result achieved during the period under review. Financial

statement is an important tool used in the apex management to recognize the

pros & cons of the company. Financial statements are affected by three things

i.e. recorded facts, accounting conventions and personal judgments. The result

derive from these financial statements are used to compare its performance with

its competitors. Adequate attention should be given while analyzing the income

statement and balance sheet of the company. Emphasis should be given on tools

& techniques of financial analysis. An effective financial statement concentrates

more on the tools & techniques of financial analysis.

2.3 OBJECTIVE OF THE STUDY

➢ To study in general the Financial profitability and strength in BGPPL,


Ballarpur.

➢ To study the horizontal perspectives of BGPPL paper industries.

➢ To know how Financial statement and profitability is being managed.


➢ To find out the soundness of BGPPL in managing the long term
solvency.

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➢ To evaluate the different ratio of BGPPL this shows the liquidityT
position of the company.

➢ To study the management of working capital with an in depth analysis


of its different component.

2.4 NEED FOR THE STUDY


BILT Graphics Paper Product LTD. is a multi-product Paper-

manufacturing unit with varying cycle time for each product. The capital

required by each department in a large organization like BGPPL depends on the

product target for that.

A particular year, invites the need for an effective Financial Strength and

Profitability. Monitoring the duration of the operation cycle is an important

aspect of Financial Strength and Profitability. Control for an effective

management. BGPPL is now on its turn round path and needs to cut cost and

increase its revenue; therefore it must have to keep close check on the day to

day expenses to get maximum utilization out of it. Some prominent issues

should always be taken into account are:

1. The duration of raw material stage depends on the regularity of supply,

transactions time, degree of perish ability, price ability, price fluctuations,

and economics of bulk purchases.

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2. The duration of the work-in-progress stage depends on length of theL
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manufacturing cycle, consistency in capacity utilization in different

stages and efficient coordination of various inputs.

3. The duration at debtor’s stage depends on the credit period granted,

discount offered for prompt payments and efficiency of collection efforts.

Thus a detailed study regarding the Financial Strength And Profitability.

In BGPPL is to be done to consider the effectiveness of Financial Strength And

Profitability, identify the shortcoming in management and to suggest for

improvement in working capital management.

2.5 SCOPE OF THE STUDY:

1. It helps to find out the liquidity position of the company.

2. It helps to reveal the stock position of the company.

3. It guides the external factors about the various drawbacks in the company.

4. It simplifies the understanding of financial statement.

5. It helps to analyze the future prospects of the company.

2.6 LIMITATIONS OF STUDY

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Though the project would be completed successfully a fewL
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limitations are expected.

➢ As BILT is multi product manufacturing unit, the cycle time of

each product varies and it could be a problem to study the

FINANCIAL STRENGTH AND PROFITABILITY in a limited

duration of 1 month.

➢ And analysis of sub topics is limited to some extensions.

➢ Since the procedures and policies of the company do not allow

disclosing of all financial information the project has to be

completed with great effort to get an insight into FINANCIAL

STRENGTH AND PROFITABILITY in BILT.

2.7 RESEARCH METHODOLOGY

Research is an academic activities and such the term should be used in a

technical sense. According to Clifford Woody “Research comprises defining

and redefining problems, formulating hypothesis or suggested solution,

collecting, organizing and evaluating data; making deduction and reaching

conclusions; and at last carefully testing the conclusions to determine whether

they fit the formulating hypothesis.”

OBJECTIVE OF RESEARCH:

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The research study has its own specific purpose, we may think ofL
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research objective as falling into a number of following board groupings:

I. To gain the familiarity with a phenomenon or to achieve new

insight into it.

II. To portray accurately the characteristics of a particular individual,

situation or a group.

III.To determine the frequency with which something occurs or with

which it is associated with something else.

IV.To test the hypothesis of a casual relationship between variable.

SOURCE AND METHODS OF DATA COLLECTION


A. Primary Data:-

It is the data collected for ones own research purpose. In my

Project the Primary source of Data used are-

1. According policies:-

The Accounting policies help me lot in getting all the accounting

concepts clear. It was also useful in understanding the accounting procedures.

2. Formal discussion:-

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I got a lot of opportunities to get into formal discussion with theL
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project guide in the company.

3. Observation:-

One of the methods that I used to collect the data was the

observation, the careful observation of company’s overall activities and

functioning gave me good insight into the topic under study.

B. Secondary Data:-

In my project, I took secondary Data from the books, internet,

company sites, memorandum of settlement and company's document.

Research Design:-

The design chosen for this study is a descriptive research design.

The rationale behind using such description research design is to study the ratio

analysis and working capital management for which the source are balance

sheet and case transaction summary.

TOOL USED:-

 RATIO ANALYSIS

Current ratio, liquid ratio, inventory ratio, Working

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Capital ratio, Inventory turnover ratio, Inventory conversion period, andL
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graphs have been used as devices for analyzing the performance of working

capital management of BGPPL Ltd.

 WORKING CAPITAL MANAGEMENT

Fixed capital and Working capital are the two main categories of

capital required in the business. Current assets are required for the short-term

financing. Working capital includes the current assets and current liabilities

areas of the balance sheet.

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3.1 INCEPTION: T

The Company was incorporated on 26th April 1945, at Nagpur. A company

is wholly owned by the Karamchand Thapar. The prime objective of company

manufactures all kinds of paper and allied products, Vanaspati, Chemicals, and

soaps. The Company uses the trade name Three Aces for paper and

Wisdom for stationery. The role of the corporation was to act as a catalyst for

growth of entrepreneurs and augment industrialization of the state.

1st October 1975, the name of the company was change from the Ballarpur

Paper & Straw Board Mills, Ltd., to Ballarpur Industries Ltd. The caustic

soda/chlorine plant was commissioned on 30th May. Industrial license was

received for increasing the capacity of the caustic soda/chlorine plant from 100

to 150 tons per day 61,48,131.5 bonus equity shares were issued in prop. 1:1.

In 1978, The BILT Middle East (Private) Ltd. Dubai, was incorporated on 10th

March, as a joint venture in Dubai in collaboration with a prominent

organization in the United Arab Emirates (UAE). The activities of this

company are trading in goods imported from India and elsewhere and

promotion of industries in the UAE. A joint venture company under the name

and style of Ballarpur Palm Oil Sdn. Bhd. was incorporated in Malaysia a palm

oil refining unit for setting up of a physical refining capacity of 200 MT per day

and a fractionation capacity of 200 MT per day of palm oil at a total cost of M
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million. The company was to provide technical and managerial know-howL
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for the project.

The Company's proposal to establish a hydro-electric station at

Dandeli with an installed capacity of about 60 MW was approved by Karnataka

Government and a No Objection Certificate was also received from Karnataka

State Electricity Board. The Company introduced 100% pure refined corn oil

under the brand name Cornola.

In 1987, The paper division was adversely affected due to closure of the

Ballarpur unit for about 37 days owing to labour problems.

In 1988, The Company launched Executive Bond, a new brand of writing


paper.
- The company introduced a 1Kg. pouch pack under the brand name of Gopal.

In 1989

- J G Glass Ltd., was amalgamated with the company.

- It was proposed to install one DG set of 11 KW at Karwar unit.

In 1990,
- A pulp mill with a capacity of 250 TPD, incorporating chlorine-di-oxide

bleaching was commissioned. A new pulp mill was proposed to be set up at the

Shree Gopal Unit.

- Production and sales in term of volume declined as one of the units was

partly shut down for a major re-build as a part of a modernization programmed.

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- With a view to entering the packaging paper segment, the Company set upL
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a project at Ashti, Gadchiroli, Maharashtra for the manufacture of 35,000

tonnes per annum of extensive sack kraft.

- English Indian Clays Ltd., Janpath Investments & Holding Ltd., Jg

Moulds Ltd., A G Glass Ltd., Krebs & Cie (India) Ltd., & Toscana

Shoes Ltd., are subsidiaries of the company.

In 1991,

- Paper sacks under the brand name BILT pack were launched.

- The Company's leather division undertook backward integration for

establishing a tannery as well as facilities to make full shoes soles and lasts. All

efforts were made for technical and financial agreements with some of the top

names in Europe.

- The furnaces at the Pune and Rishikesh plants were rebuilt thereby adding an

energy efficient edge to bottle manufacturing operations.

In 1992,

- The captive caustic soda and chlorine plants in Ballarpur & Yamnanagar

were fully assimilated leading to savings over 15%. Production of caustic soda

declined due to power cuts, water shortage and labour unrest for 26 days in

Kaiwar Unit. Rainfall affected Singach salt works.

In 1993,

- The Company proposed to install a new pulp mill at Shreegopal to

reduce dependence on imported pulp.

- The Company successfully launched refined sunflower oil under the


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brand name `Prime Life'. L
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In 1994,
- The Company introduced indigenously developed dicalcium phosphate

which received good market response. The Company proposed to set up a plant

at Khavda to produce 3000 MT of liquid bromine which was scheduled to be

commissioned in February 1996. It was also proposed to establish a marine

chemicals complex at Khavda.

In 1995,

- The Company increased the pulp capacity from 300 TPD to 320 TPD and
further proposed to increase to 350 TPD. A new pulp mill with a capacity of
150 TPD was being installed at unit Shree Gopal.
- The Company was successful in accessing new markets in Korea, Taiwan and

it was proposed to develop in house facilities for production of several bromine

derivalues for the international market.

- The Company set up the power division to meet 100% of its requirements.

The company negotiated for awarding contract with respect to Barsinagar

Lignite Mining-cum-Power project in Rajasthan & Khaparkheda, Thermal

Power Project in Maharashtra.

In 1996,

- Technical collaborations were also approved for manufacture of Aniline with

Rhone Poulenc of France, for Nitrobenzene with J.Meissner of West Germany

and for basic engineering and pollution control equipment with Specichim of

France.

In 1997,
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- The company lacked the necessary technology and was dependent uponL
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its collaborators.

- Thapar Power Group, an arm of the leading Ballarpur Industries, which

entered into an agreement five year ago with the Himachal Pradesh Government

to generate electricity through its Uhl-3 hydro power project.

- Phoenix Pulp and Paper Company (PPPC) is a joint venture between

European Overseas Development Corporation (EODC) and Ballarpur Industries

Limited (BILT) with the latter holding around 13 per cent in PPPC.

- The company set up a bromine capacity to derive the benefits from the

brine left over after the extraction of caustic soda.

In 1998,

- The joint venture BILT-Owens was in the non-core business of

glass.

- Ballarpur Industries Ltd., (BILT), the flagship company of the L M Thapar

Group, is all set to divest minority stake in its 100 percent subsidiary, The

Golden Green Company.

- BILT had set up the division in 1992 at a capital investment of Rs 47 Cr to

manufacture construction materials like blocks, pre-cast reinforced slabs and

wall panels.

In 1999,

- Ballarpur Industries Ltd. (BILT) is exploring the possibility of collaboration

with Swedish company `Tumba Bruk' for manufacturing papers used in paring

of currency notes.
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- BILT has entered into technical agreements with a South Korean and a L
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Japanese company for manufacturing coated and lightweight coated paper.

In 2000,
- Duff & Phelps Credit Rating India (DCR) has assinged a D1 (very high

certainty of timely payment) rating to the Rs 15 crore short term debt

programme of Ballarpur Industries.

- The Company will be allotting three equity shares of Rs 10 each to the

shareholders of APR for every 10 equity shares of Rs 10 each of APR held by

them.

- The Board of Ballarpur Industries is being expanded from 12 to 15.

- Mr. Narottam Sahgal has resigned from the Directorship of the company

w.e.f. 15th September.

In 2001,

- Crisil has assigned `AA+' (SO) (structured obligation) to the Rs150- crore

structured debt obligation issue of the company.

- The Company has signed a memorandum of understanding with Sinar MAS

India for acquiring equity stake in the company.

- The Company has appointed Mr. Gautam Thapar, Managing Director, as the

Vice-Chairman and Managing Director of the company.

- Ballarpur Industries Ltd (BILT) will shortly finalize an equity issue, which

has received the board's in-principle approval.


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- The Board of Directors of Ballarpur Industries Ltd has noted the change inL
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nomination by Unit Trust of India on the Board of Directors of the company.

Mr. R K Ahooja has been nominated by UTI on the Board of Directors of the

company in place of Mr. K G Vassal.

In 2002,

-The Board of Directors of Ballarpur Industries has changed the designation of

Mr. R R Vederah, a Whole time Director, from Director &COO to Deputy

Managing Director with immediate effect.

-R R Vederah designated as Deputy M D of BILT.

In 2003,
-The board of BILT has approved the proposal to divest the investments of

Janpath Investments and Holding Ltd.

-BILT counter is recording a heavy trade in stock market and the players in the

market are keen on buying the company stock.

In 2004,

-Starlight International Holdings Ltd. acquires 10,000,000 shares of Ballarpur

Industries Ltd. amounting to 6.16% of total capital of the company

3.2 OBJECTIVE OF THE ORGANIZATION:

a) Strategic Goal: The long-term goal of the national policy is that India should

have a modern and efficient paper industry of world standards, catering to

diversified paper demand. The focus of the policy would therefore be to achieve

global competitiveness not only in terms of cost, quality and product-mix but

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also in terms of global benchmarks of efficiency and productivity. This willL
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require indigenous production of over 100 million tones (m T) per annum by

2019-20 from the 2004-05 level of 38 m T. This implies a compounded

annual

growth 7.3% per annum.

b) The above strategic goal is justified on the ground that steel consumption in

the world, around 500 m T in 2004, is expected to grow at 3.0 percent per

annum1 to reach 1,000 m T in 2015, compared to 2 percent per annum in the

past fifteen years. China will continue to have a dominant share of the world

steel demand. At home, the Indian growth rate of steel production over the past

fifteen years was 7.0 percent per annum. The projected growth rate of 7.3

percent per annum in India compares well with the projected national income

growth rate of 7-8 percent per annum, given an income elasticity of steel

consumption of around 1.

c) In terms of consumption of PAPER, defined as production plus imports

minus exports, the present equation is 38+2-4 = 36 m T in 2004-05. Table 1

gives the equation for 2019-20 and the projected compounded annual growth

rates for production, imports, exports and consumption.

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3.3 BOARD OF DIRECTORS

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S.No Name Designation L
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1 Mr.Gautam Thapar Chairman / Chair Person

2 Mr.Ashish Guha Director

3 Mr.Shardul S Shroff Director

4 Mr.R K Ahooja Director

5 Mr.Sanjay Labroo Director

6 Dr.Pramath Raj Sinha Director

7 Mr.A S Dulat Director

8 Mr.B Hariharan Group Director

9 Mr.R R Vederah Managing Director

10 Mr.A P Singh Nominee Director

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Mr. Gautam Thapar, Chairman/Chair Person

Mr. R R Vederah – Managing Director

Mr. B Hariharan – Group Director (Finance)

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Mr. A P Singh – Nominee of LIC

Mr. R K Ahooja, Director

Mr. Sanjay Labroo, Dector

Mr. Shardul S Shroff,Director

Mr A S Dulat, Director
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Dr. Pramath Raj Sinha, Director

Mr. Ashish Guha, Director

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3.4 ORGANIZATIONAL CHART

3.5 BUSINESS OPERATION


There was a phenomenal growth of Paper industry during the last

two decades particularly after partial decontrol affected by the Govt. of India

since 1980. The installed capacity in the country rose from 15 million tonnes in

1980 to 110 million tonnes in the year 2000. Due to paper increase in the cost of

Wood ,Bamboo, Electricity, and other inputs, it was all the most essential to go

for the modernization by adopting the new dry – process technology in place of

the existing wet-process to make the product competitive in term of quality and

price .

The modernization of the existing plant in the wet-process

technology was thought of in the year 1999. BILT obtained required project

finance from IDBI, SBI, IFCI under the World Bank Line of credit. In order to

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part-finance the ongoing modernization, equity share of Rs 25 crores wasL
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infused by UTI during the year 1996.

3.6 PRODUCT OF THE ORGANISATION:

➢ COTED WOOD FREE PAPER

➢ UNCOTED WOOD FREE PAPER

➢ COPIER

➢ CREAMWOVE(LOW VALUE PRODUCT)

➢ TISSUE & HIGIENE

LICENCED CAPACITY: 6,00,000 MT/Annum

INSTALLED CAPACITY: 7,00,000 MT/Annum

YEAR-WISE ACTUAL PERFORMANCE

(IN LACS MT)

YEAR PRODUCTION DESPATCH

2004-2005 4.46 4.26

2005-2006 5.02 4.90

2006-2007 5.77 5.56

2007-2008 6.33 6.10

2008-2009 6.88 6.54

3.7 COMPETITORS OF THE ORGANISATION


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➢ ITC (INDIAN TOBACCO COMPANY) L
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➢ NAVNIT

➢ SPRING PAPER

➢ VINAYAK PRINTER PVT. LTD.

➢ KAGAZNAGAR PAPER

➢ ANDHRA PAPER COMPANY PVT LTD.

UNITS OF BGPPL IN INDIA:-

UNIT MANUFACTURING PLACE


BALLARPUR PULP AND PAPER MAHARASHTRA

BHIGWAN PULP AND PAPER MAHARASHTRA

SHREE GOPAL PULP AND PAPER HARIYANA

SEWA PAPER ONLY ORISSA

ASHTI PULP ONLY MAHARASHTRA

KAMALAPURAM PULP ONLY ORISSA

UNITS OF BGPPL OUT OF INDIA:-

MANUFACTUR
UNIT ING PLACE
SFI(STATE OF
SABAH, PULP AND MALAYS
MALAYSIA) PAPER IA

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3.8 ACHIVEMENTS, ACCLADES & MILESTONES T
The company has become the first Paper mill in the country to obtain

the one International System Standards certification, ISPO 14001 for Excellence

in Environment Management awarded by Greentech Foundation, New Delhi.

First Price in Excellence in energy Conservation and Management by the

Maharashtra Energy Development Agency, Pune.

REWARD & RECOGNITION:

1. CII- National Award for Excellence in Energy Management in Aug 2008.

2. Safety innovation Award from the institution of Engineers (India) Delhi

state center in Sept 2008.

3. Excellence in Environment Management awarded by Greentech

Foundation, New Delhi 2006-2007, 2007-2008, 2008-2009.

4. Indian Manufacturing Excellence Award in 2006.

5. First price in Energy Conservation by Maharashtra Government, Pune in

2007-2008.

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List of BILT Branches:

BILT has a network of over hundred distributors spread across more than 52
locations across the Indian subcontinent…

BILT’s Distribution Network*

North South
Delhi Chennai
Ludhiana Sivakasi
Amritsar Tirupur
Chandigarh Bangalore
Patiala Hyderabad
Kanpur Kochi
Lucknow Kerala
Meerut Coimbatore
Agra Madurai
Varanasi Secunderabad
Paharanpur Vijaywada
Moradabad Vishakhapatnam
Jammu Ernakulam
Rohtak Pondicherry
Jamunanagar Hubli

West East
Mumbai Calcutta
Ahmedabad Cuttack
Jabalpur Raipur
Goa Patna
Pune Bhagalpur
Nagpur Nepal
Nashik Guwahati
Aurangabad Ranchi

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Indore L
Surat T
Kolhapur

BILT MARKESTING NETWORKS

Corporate Office (Gurgaon)

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• Sales Manufacturing Facilities L
Presence T

FINANCING AND ACCOUNTING WING

In the BGPPL main function of the Finance and Accounts Department is to

look after the treasury management and to render service in financial aspects for

effectively conducting the business of the company. The finance Department

has many sub sections. It has about 55 employees consisting of about 50

executives and 5 non-executives. The entire department is headed by the general

manager. Finance and Accounting Department of BGPPL is divided into several

sections for administrative control and assignment of responsibilities and fixing

of accountability etc. To name a few are:

The following are sections of finance and Account department in RINL.

1. Raw material Accounts

2. Stores Accounting

3. Sales Accounts

4. Pay and PF Accounts

5. Works accounts section

6. Operational Bills Accounts

7. General Accounts Section

8. Cash Section

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9. Loans and Advances L
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10. Corporate Accounts

11. Internal Audit Section

12. Budget Section

13. Costing Section

14. Project Accounts

3.10 FUTURE PROSPECTS:

VISION

Our aspiration is to become a leading creator of Shareholder Value in the

Paper Industry.

To achieve this, we will ENERGISE our people, with a positive culture

that rewards INNOVATION, breeds INITIATIVES and encourages

INTELLIGENT risk taking.

MISSION

To achieve this, we will use the ENERGY of our people, develop and

implement leading edge technologies and draw on both to deliver effective

world-class solutions to our customers.

To consistently outperform expectations and deliver superior value to

both our Customers and Stakeholders

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CORE VALUES
Honesty

To be principled, straight-forward and fair in all dealings.


Integrity

Maintaining the highest standards of professionalism.


Flexibility

Adapting ourselves to always stay a step ahead of change.


Respect for individual

Giving each person room to contribute and grow.


Respect for knowledge

To acquire and apply leading edge expertise in all aspects of our business.
Team performance

The team comes first; none of us is as good as all of us!

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4.1CURRENT RATIO
It measures the short-term financial position of the business concern.

In other word it is company’s ability to meet its short term obligation. It

matches the total current assets of the company against its current

liabilities.

Current Ratio = Current Assets _


Current Liabilities

4.1TABLE SHOWING THE STATUS OF CURRENT


RATIO
Amount in Lakhs

Particular 2006-07 2007-08 2008-09

Total Current Assets Or Gross Working 13,336,45 14,666,98 13,757,08


Capital(A) 1 3 6

Total Current Liabilities(B) 4,371,209 3,564,746 3,715,096

Current Ratio A/B 3.05 4.11 3.7

INFERENCE

As a conventional rule, current ratio of 2:1 or more is considered as

satisfactory. As BILT is having current ratio a bit lowered than the ideal

ratio, it may be interpreted that its liquidity is not sufficient. However,

in 2007-08 it was 4.11.

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4.1 GRAPH SHOWING CURRENT RATIO

ANALYSIS

The current ratio is not the binding parameter, in order to judge the

company’s success. It is just a measure in quantity, but not of quantity,

in 2007-08, current ratio increased, there can be two reasons or either of

it.

A. Increase in current assets.

B. Decrease in current liabilities.

QUICK RATIO (ACID TEST RATIO)

Liquid ratio is worked out to test short-term liquidity of the

company in its correct form. It establishes the relationship between the

quick assets and the current liabilities. We know that an assets is liquid

when it is really converted in to cash without any loss in value.

Quick ratio indicates the ability of the business to meet its

immediate commitments. Quick ratio is a better test of financial

strength than the current ratio as it keeps on consideration to inventory,

which may be very slow moving. It is a supplementary measure of

liquidity and place more emphasis on immediate conversion of assets

into cashes than thus the current ratio.

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Formula For Quick Ratio:-

Quick Ratio = Quick OR Liquid Ratio _


Current Liabilities & Provisions

4.2 TABLE SHOWING QUICK RATIO

Particular 2006-2007 2007-2008 2008-2009

Current Assets
investment and fixed
deposits 4007 113 197

Inventory 31,24,171 13,44,596 13,00,003

sundry debtors 35,37,971 18,52,520 20,54,245

cash and bank balance 34,45,820 36,37,830 1,04,107


1,02,98,53
loan and advances 32,24,482 78,31,924 4
1,33,36,4 1,46,66,9 1,37,57,0
Total(A) 51 83 86

Current liabilities
15,59,02
Liabilities 29,89,243 7 14,61,066
1,381,99 20,05,71
22,54,03
Provision 6 9 0
35,64,74 37,15,09
Total(B) 43,71,209 6 6

Total A/B 3.05 4.11 3.7

INFERENCE

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Generally, a ratio of 1:1 is considered to represent a satisfactory current

financial condition. In the year 2007-2008, company shows low quick

company has higher quick ratio. The company shows low quick ratio in

the subsequent year which are equivalent to 1. Therefore the company

has satisfactory quick ratio.

I.2 GRAPH SHOWING QUICK RATIO

ANALYSIS:

In short, for an ideal situation

Inventory= Current liabilities = Current Assets

OR

Current Liabilities < Inventory

Current Liabilities Quick Assets

ABSOLUTE LIQUID RATIO

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This ratio is also known as the super quick ratio or cash ratio or cash

reservoir ratio. This ratio is considering only the absolute liquidity

available for the firm.

Absolute liquid ratio = Absolute liquid Assets

Current Liability

Absolute liquid Assets = Cash @ Bank Balance + Short Term

Securities.

4.3 TABLE SHOWING ABSOLUTE LIQUID RATIO

Amount in Lakhs

PARTICULAR 2006-2007 2007-2008 2008-2009


Absolute Liquid Assets(A) 34,45,820 36,37,830 1,04,107

Total Current Liabilities(B) 43,71,209 35,64,746 37,15,096

Absolute liquid Ratio(A/B) 0.79 1.02 0.030


INFERENCE:-
The ratio has started average growth from there on and is at 0.79

in 2006-07. Further there is increase in the year 2007-08 & 2008-09.

The above data indicates current ratio values excess 2008-2009

higher standard ratio (2:1) this indicates cash poison was satisfactory

for business

4.3 GRAPH SHOWING ABSOLUTE LIQUID RATIO

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INVENTORY TURNOVER RATIO
Every firm has to maintain a certain level of inventory in order

to meet the requirement of the business. Another important liquidity

ratio is the inventory turnover ratio. Inventory turnover has measure of

the number of times the average inventory is sold during the last year. It

is computed by dividing the cost of goods are sold by average inventory

balance.

Inventory turnover ratio also known as stock velocity.

Inventory turnover ratio (I.T.R) indicates the number of times the stock

has been turned over during the period and evaluates the efficiency with

which a firm is able to manage its inventory.

Formula Of Inventory Turnover Ratio:-

Inventory Turnover Ratio = _Net sales_ _


Avg. Inventory

Average Inventory = Opening stock + Closing stock


2
4.4 TABLE SHOWING INVENTORY TURNOVER RATIO

Amount in Lakhs

Particular 2006-2007 2007-2008 2008-2009

Net sales(A) 2,16,23,233 93,49,200 99,93,310

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Avg. 31,24,171 13,44,596 13,00,003
Inventory
(B)
Inventory
Turnover 6.9 7.0 7.69
Ratio
(A/B)

INFERENCE

BILT shows increase since 2008-2009 and has an optimum inventory

turnover ratio. There is no ‘standard inventory turnover ratio’ or ‘rule of

thumb’ for interpreting the inventory turnover ratio. The norms may be

different for different firms depending upon the nature of the business.

4.4 GRAPH SHOWING INVENTORY TURNOVER RATIO

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INVENTORY CONVERSION PERIOD:

The amount of time required to sell the average inventory can be

determined by dividing the inventory turnover ratio in to the number of

days in a year for simplicity, 365 days. It helps in knowing the average

time for clearing the stock.

Inventory Conversion Ratio = No. of days In a Year .


Inventory Turnover Ratio

4.5 TABLE SHOWS INVENTORY CONVERSION

PERIOD

Amount lakhs

PARTICULAR 2006-2007 2007-2008 2008-2009


No. Of days in a 365 365 365
year
Inventory 6.9 7.0 7.69
Turnover Ratio
Inventory 52.90 52.14 47.46
conversion
ratio(365/ITR)

INFERENCE

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The greater the number of times per year the inventory turnover, the

more efficient it is being used. This shows the average time taken for

clearing the stocks.

4.5 GRAPH SHOWS THE INVENTORY CONVERSION PERIOD

INVENTORY TO WORKING CAPITAL RATIO:

This is derived at by dividing the book value of closing

stock of raw materials, finished and semi-finished goods, store and

spare and other inventories by working capital and expressed as

percentage. This ratio appraises management’s judgment in proportion

its working capital to the least liquid segment of that capital. If

investment is too much in the inventory, it not only limits the liquidity

of working capital, it may be indicative of poor judgment in balancing

and stocking also.

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Formula for Inventory to Working Capital:

Inventory to working Capital = Total inventory _


Net Working Capital

4.6 TABLE SHOWS INVENTORY TO WORKING CAPITAL

Amount in Lakhs
Particular 2006-2007 2007-2008 2008-2009
Total
Inventory(A) 31,24,171 13,44,596 13,00,003
Net Working 89,65,242 1,11,02,237 1,00,41,990
Capital(B)
Inventory to
Working 0.35 0.12 0.13
Capital(A/B)
INFERENCE

A higher ratio indicates efficient utilization of working capital and a

low ratio indicates otherwise. But a very high working capital turnover

ratio is not a good situation for any firm and hence care must be taken

while interpreting the ratio.

4.6 GRAPH SHOWING INVENTORY TO WORKING


CAPITAL

RETURN ON ASSETS (ROA) RATIO:-

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Return on assets ratio measures the profitability of the

firm in terms of assets employed in the firm. The ROA is

Calculated by the establishing the relationship between the

profit and the employed to earn that profit.

Formula for Return on Assets ratio:

Return on Assets Ratio = Net Profit After Tax_ x100


Average Total Assets

4.7 TABLE SHOWING RETURN ON ASSETS


Amount In Lakhs

Particular 2006-2007 2007-2008 2008-2009

Net Profit After 36,27,796 30,26,339 36,00,237


Tax(A)

Average Total 3,57,07,392 2,30,03,034 2,33,62,874


Assets(B)

Return On 10.16 13.15 15.41


Assets(A/B)

INFERENCE

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The graph shows BILT is having increasing Return On
Investment ratio which indicates efficient utilization of companies

assets and in the year 2006-2007 it was 10.16 but after this year

company shows consistence increase in their Return on assets ratio.

4.7 GRAPH SHOWING RETURN ON ASSETS

GROSS PROFIT RATIO

This is also known as the gross margin. It is calculated by

dividing gross profit by sales. The gross profit ratio depends upon the

relationship selling price and cost of production including direct

expenses.

Formula for Gross Profit ratio = _Gross Profit__ x 100


Net sales

4.8 TABLE SHOWS GROSS PROFIT RATIO

Amount In Lakhs

Particular 2006-2007 2007-2008 2008-2009

Gross profit 32,36,174 13,72,720 12,53,853


/Loss(A)
Net Sales(B) 2,16,23,233 93,49,200 99,93,310

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Gross Profit 14.97 14.68 12.55
Ratio(A/B)

INFERENCE

In 2008-2009 the Gross profit ratio is negative but before this year

the ratio was positive and increase continuously but in this year the

ratio will declined slowly

4.8 GRAPH SHOWS THE GROSS PROFIT RATIO

NET PROFIT

Net profit ratio establishes relationship between net profit (after tax)

and sales and indicates the efficiency of the management in

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manufacturing, selling administrative and other achievement of the

firm.

This ratio also indicates the firms capacity to face adverse

economic condition such as price completion.

Formula for Net Profit ratio = _Net profit_ x 100


Sales

4.9 TABLE SHOWING NET PROFIT RATIO

Amount In Lakhs
PARTICULARS 2006-2007 2007-2008 2008-2009
NET 25,07,674 12,94,478 12,53,853
PROFIT/LOSS(A)
NET SALES 2,16,23,233 93,49,200 99,93,310

NET PROFIT
RATIO(A/B) 11.67 13.45 12.55

INFERENCE

The net profit ratio shows the firm capacity to face adverse economic

situation. The net profit is maximum in year 2007-2008 and last year

down by 0.9%.

4.9 GRAPH SHOWING NET PROFIT RATIO

GRAPH

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Net Profit Ratio

13.45
13.5

13

12.55

12.5

2006-2007
2007-2008
12
11.67 2008-2009

11.5

11

10.5
NET PROFIT RATIO

CASH PROFIT RATIO

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The net profit of a firm affected by the amount/methods of

depreciation charged. Further the depreciation being a non-cash

expense, it is better to calculate cash profit ratio.

Cash Profit Ratio = _Cash Profit_ x 100


Net sales

Cash Profit = Net Profit + Depreciation

4.10 TABLE SHOWING CASH PROFIT RATIO

AMOUNT IN LAKHS

Particular 2006-2007 2007-2008 2008-2009


Net profit(A) 25,07,674 12,94,478 12,53,853

Depreciation(B) 15,49,077 6,33,780 7,69,544

Cash 40,56,751 19,28,258 20,23,397

Profit(A+B)
Net sales (C) 2,16,23,233 93,49,200 99,93,310
Cash Profit

Ratio(A+B/C) 18.76 20.62 20.25

INFERENCE

Cash profit ratio shows the method of depreciation charge of each items

expenses of cash profit and net sales. In the table shows that year 2007-

2008 is having higher cash profit than other years.

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4.10 GRAPH SHOWING CASH PROFIT RATIO

OPERATING PROFIT RATIO:

This refers pure operating profit of the firm. The operating profit

will be less than the GP ratio as the indirect expenses such as the

general and administrative, selling expenses and depreciation charge.

It can help to identify the corrective measures to improve

profitability of the company.

Operating Profit Ratio = _Operating Cost_ x 100


NetSales

4.11 TABLE SHOWING OPERATING PROFIT RATIO


AMOUNT IN LAKHS

Particular 2006-2007 2007-2008 2008-2009

Operating 32,36,174 13,72,720 12,53,853


Profit(A)

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Net Sales(B) 2,16,23,233 93,49,200 99,93,310

Operating 14.97 14.68 12.55


Profit
Ratio(A/B)

INFERENCE

This is ratio of net operating profit to net sales. In all the years it remain

average.

4.11 Graph Showing Operating Profit Ratio

PREPARATORY RATIO OR EQUITY RATIO

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A various to the debt- equity ratio is the proprietary ratio which

will also known as equity ratio or shareholders to total equities ratio or

net worth to total assets ratio.

This ratio can also be represented in percentages of owner

capital to total capital of the firm.

Preparatory Ratio = _Shareholders fund_


Total Assets

1.12 TABLE SHOWING PREPARATORY RATIO OR


EQUITY RATIO
AMOUNT IN LAKHS
Particulars 2006-2007 2007-2008 2008-2009
Shareholders 2,00,04,242 1,26,79,917 1,34,97,722
fund(A)
Total Assets(B) 3,57,07,392 2,30,03,034 2,33,62,874
Debt equity 0.56 0.55 0.58
ratio(A/B)

INFERENCES
The objective of computing this ratio is to find how efficiently the

funds supplied by the equity shareholders have been used. It’s regarded

as a very important measure, because it reflects the productivity of the

ownership (or risk) capital employed in the firm. It is influenced by

several factors, return on investment , debt equity ratio, average cost of

debt funds and tax rate. This ratio indicates the firm’s ability of

generating profit per rupee of equity share holders fund higher the ratio,

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the more efficient the management & utilization of equity shareholders

funds. The return on equity capital has also increased . it is a good sign

for the company.

4.12 GRAPH SHOWING PREPARATORY RATIO OR EQUITY


RATIO

RATIO OF CURRENT ASSETS TO PREPARATORY FUND

The ratio is calculated by the dividing total of current assets

by the amount of share holder’s fund.

It indicates the extent to which proprietors fund are invested in

current assets.

Ratio of current Assets to preparatory funds

= _Current Assets_ _ x 100


Share Holders Fund

4.13 TABLE SHOWING RATIO OF CURRENT ASSETS


RATIO
AMOUNT IN LAKHS
Particulars 2006-2007 2007-2008 2008-2009
Current Assets(A) 13,336,451 14,666,983 13,757,086
Share Holders fund(B) 20,004,242 12,679,917 13,497,722
CA to Preparatory 66.67 115.67 101.92
Ratio(A/B)

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INFERENCE
The highest return on current assets in year 2007-2008 and after this
slowly decreases in the return ratio.

4.13 GRAPH SHOWING RATIO OF CURRENT ASSETS


RATIO

SUMMARY OF FINDINGS

1. As a conventional rule, current ratio of 2:1 or more is considered


as satisfactory. As BILT is having current ratio a bit lowered than
the ideal ratio, it may be interpreted that its liquidity is not
sufficient. However, in 2007-08 it was 4.11.
2. Generally, a ratio of 1:1 is considered to represent a satisfactory
current financial condition. In the year 2007-2008, company
shows low quick company has higher quick ratio. The company
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shows low quick ratio in the subsequent year which are
equivalent to 1. Therefore the company has satisfactory quick
ratio.
3. The ratio has started average growth from there on and is at
0.79 in 2006-07. Further there is increase in the year 2007-08 &
2008-09. The above data indicates current ratio values excess
2008-2009 higher standard ratio (2:1) this indicates cash poison
was satisfactory for business
4. The greater the number of times per year the inventory turnover,
the more efficient it is being used. This shows the average time
taken for clearing the stocks.
5. The greater the number of times per year the inventory turnover,
the more efficient it is being used. This shows the average time
taken for clearing the stocks.
6. A higher ratio indicates efficient utilization of working capital
and a low ratio indicates otherwise. But a very high working
capital turnover ratio is not a good situation for any firm and
hence care must be taken while interpreting the ratio.
7. The graph shows BILT is having increasing Return On
Investment ratio which indicates efficient utilization of
companies assets and in the year 2006-2007 it was 10.16 but after
this year company shows consistence increase in their Return on
assets ratio
8. In 2008-2009 the Gross profit ratio is negative but before this
year the ratio was positive and increase continuously but in this
year the ratio will declined slowly
9. The net profit ratio shows the firm capacity to face adverse
economic situation. The net profit is maximum in year 2007-
2008 and last year down by 0.9%.
10.Cash profit ratio shows the method of depreciation charge of
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each items expenses of cash profit and net sales. In the table
shows that year 2007-2008 is having higher cash profit than other
years.
11. This is ratio of net operating profit to net sales. In all the years it
remain average.
12. The objective of computing this ratio is to find how efficiently
the funds supplied by the equity shareholders have been used. It’s
regarded as a very important measure, because it reflects the
productivity of the ownership (or risk) capital employed in the
firm. It is influenced by several factors, return on investment ,
debt equity ratio, average cost of debt funds and tax rate. This
ratio indicates the firm’s ability of generating profit per rupee of
equity share holders fund higher the ratio, the more efficient the
management & utilization of equity shareholders funds. The
return on equity capital has also increased . it is a good sign for
the company.
13. This ratio shows the numbers of time current assets are being
turned over a stated period. It also shows how well the current
assets are being used in the business in the given years.

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RECOMMENDATION & SUGGESTION:

1. Company should not put more effort to increase the efficiency

and return on investment.

2. Company should take effective measure in utilizing current assets

and fixed assets efficiently for better turnover ratio.

3. It should give more return on investment, which will increase the

market value of the company.

4. Fixed assets turnover ratio of the company should be less than

57%. A ratio more than 57% indicates greater risk for the

creditors and it indicates financial weaken of the concern.

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5. The company should try to reduce blocking up of funds in the

inventory and maintain ideal ratio.

6. The management should keep a record of “marks-ups” and “mark

down” so that when trading statement is completed according to

actual figures, the gross profit can be tested for regularity or

otherwise after giving due consideration to such “marks-ups” and

“mark downs”.

As the company is in good position and has maintaining ideal

ratios there was less scope for the researches to suggest the company.

BALANCE SHEET OF BILT

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(Rupees in Lakhs)
as at 30th June 2007 as at 30th June 2008 as at 30th June 2009
SOURCES OF FUNDS :
SHAREHOLDERS' FUNDS:
1,857,26 1,111,23 1,111,23
Share Capital 1 4 4
18,146,9 20,004,2 11,568,6 12,679,9 12,386,4 13,497,7
Reserves and Surplus 1 42 83 17 88 22
LOAN FUNDS :
7,449,01 5,427,83 5,090,40
Secured loans 4 2 2
5,915,63 13,364,6 3,979,10 9,406,93 3,806,03 8,896,43
Unsecured loans 3 47 7 9 7 9
Deferred Tax Liability 2,338,50
( Net ) 3 916,178 9,68,713
35,707,3 23,003,0 23,362,8
Total 29 34 74
APPLICATION OF FUNDS :
FIXED ASSETS :
32,681,9 12,176,7 13,625,4
Gross block 27 57 37
12,851,0 4,537,50 5,137,28
Less: Depreciation 05 4 6
19,830,9 7,639,25 8,488,15
Net Block 22 3 1
1,680,01 1,918,26
Pending Allocation 7 747,504 0
2,252,41 23,763,3 8,985,70 10,428,7
Capital work-in-progress 1 50 598,945 2 22,353 64
2,855,08 2,855,47 2,855,47
INVESTMENTS 1 1 1

CURRENT ASSETS, LOANS &


ADVANCES :
3,124,17 1,3,44,59 1,300,00
Inventories 1 6 3
3,537,97 1,852,52 2,054,24
Sundry debtors 1 0 5
3,445,82 3,637,83
Cash & Bank balances 0 0 104,107
Interest accrued on
investment 4,007 113 197
7,831,92 10,298,5
Loans & Advances 3224,482 4 34
13,336,4 14,666,9 13,757,0
51 83 86
LESS: CURRENT LIABILITIES
& PROVISIONS :
2,989,24 1,559,02 1,461,06
Liabilities 3 7 6
1,381,96 2,005,71 2,254,03
Provisions 6 9 0
4,371,2 3,564,7 3,715,0
09 46 96
8,965,2 11,102, 10,041,
Net Current assets 42 237 990

GARDEN CITY COLLEGE Page 27


PROFIT AND LOSS ACCOUNT OF BILT
PARTICULARS 2006-2007 2007-2008 2008-2009
INCOME
SALES 23,687,558 10,308,904 10,535,678
LESS: EXCISE DUTY 2,064,325 959,704 542,368
NET SALES 21,623,223 9,349,200 9,993,310
OTHER INCOMES 111,232 30,012 49,503
INCREASE/(DECREASE)IN
STOCK -81,736 -98,862 214,020
TOTAL 21,652,729 9,280,350 10,256,833
EXPENDITURES

MANUFACTURING COST 13,482,655 5,878,397 6,475,062


PURCHASES 494,678 359,841 432,620
PERSONAL COST 1,261,601 491,719 617,964
ADMINISTRATION, SELLING &
MISCELLS COST 648,698 201,670 360,631
DEFERRED REVENUE EXP(NET) 110,072 64,095 40,973
INTEREST AND FINANCE COST 869,774 278,128 137,766
DEPRECIATION 1,549,007 633,780 769,544
TOTAL 18,416,555 7,907,630 8,834,560

PROFIT BEFORE TAXATION 3,236,174 1,372,720 1,253,853

PROVISION FOR TAXATION


CURRENT TAX 363,900 480,700 107,185
DEFERRED TAX 346,600 -48,058 52,535
MAT ENTITLEMENT CREDIT -368,400
FRINGE BENEFIT TAX 18,000 14,000 8,700
728,500 78,242 168,420

PROFIT AFTER TAX 2,507,674 1,294,478 1,253,853


ADD BAL B/F (LAST YR) 1,106,544 1,704,639 2,271,384
ADD DEBENTURE REDMPN
RESERVE NO LONGER REQ 13,578 27,222 75,000
AMT AVAILABLE FOR
APPROPRIATION 3,627,796 3,026,339 3,600,237

GARDEN CITY COLLEGE Page 28


Statement of changes in working capital
(Figures in crores)

2006- 2007- 2008-


Particulars 2007 2008 2009

Current Assets
3,124,1 1,3,44,5 1,300,00
Inventories 71 96 3
3,537,9 1,852,52 2,054,24
Sundry debtors 71 0 5
3,445,8 3,637,83
Cash & Bank balances 20 0 104,107
Interest accrued on
investment 4,007 113 197
3,224,4 7,831,92 10,298,5
Loans & Advances 82 4 34
13,336, 14,666,9 13,757,0
Total current assets (a) 451 83 86

Current Liabilities
2,989,24 1,559,0 1,461,0
Liabilities 3 27 66
1,381,96 2,005,7 2,254,0
Provision 6 19 30
4,371, 3,564,7 3,715,0
Total current liabilities (b) 209 46 96

Net Working capital (a-b) 3.05 4.11 3.70

GARDEN CITY COLLEGE Page 29


BIBLIOGRAPHY

Financial management I. M. pandey

Financial management Prasanna Chandra

Financial management D N Chabra

Working capital Management I.M. pandey

Financial Management R.K. Sharma &S.K.Gupta

Financial Management R.P. Rustagi

Annual Reports of BILT Graphics Paper Product Ltd General


Articles and Magazines of BILT.

Website:
www.bilt.com,

www.indianinfoline.com,

www.google.com,weekpedia,

BOOKS:

Survey of Indian industry-

The Hindu

Newspapers: Deccan Chronicle, Hitwaad

GARDEN CITY COLLEGE Page 30