STATEMENT OF THE PROBLEM

The Fixed Assets Management is the Traditional Financial statement of a

business enterprise. While they do furnish useful Financial Data regarding its
operations, a serious limitation of these statements is that they do not provide
information regarding changes in the firms financial position during a
particular period of time.
. !ave long"term sources been ade#uate to finance fixed assets purchase$
%. Does the firm posses ade#uate Fixed Assets$
&. !as the li#uidity position of the firm improved$
'. Does the firm meet their re#uirements$
INTRODUCTION TO FIXED ASSETS
Fixed assets
Those assets (hich are ac#uired and held permanently in the business and are used for
the purpose of earning profits are called fixed assets. )and and buildings, plant and
machinery, motor vans, furniture and fixtures are some examples of these assets.
Fixed assets are ac#uired for use in the business for earning revenues so they are
sho(n at their boo* values and at their current reali+able values. ,ut (hen the business unit
is not a going concern and is to be li#uidated, current reali+able value of fixed assets become
relevant. A fundamental concept of accounting, closely related to the going concern concept,
is cost concept of accounting. According to this concept, a fixed asset is recorded in the boo*s
at the price paid to ac#uire it and that this cost is the basis for all subse#uent accounting for
the asset. This concept does not mean that the fixed asset (ill al(ays be sho(n at cost but it
means that cost becomes basis For all future accounting for the fixed asset. Asset is recorded
at cost at the time of its purchase but is systematically reduced in its value by charging
depreciation. The mar*et value of a fixed asset may change (ith the passage of time, but for
accounting purpose it continues to be sho(n in the boo*s at its boo* value, i.e., the cost at
(hich it (as purchased minus depreciation provided up"to"date.
The cost concept has the advantage of bringing ob-ectivity in the accounts. .alue
of fixed assets given in the balance sheet is not influenced by the personal bias or -udgment
of those (ho furnish such statements. /n the absence of cost concept assets (ill be sho(n at
their mar*et values, (hich (ill depend on the sub-ective vie(s of persons (ho furnish
financial statements.
The effects of inflation are more pronounced in case of fixed assets. 0nder the cost
concept of accounting, depreciation calculated on the basis of historical costs of old assets is
usually lo(er than that of those calculated at current value or replacement value. 0nder the
cost concept of accounting depreciation is calculated on the original cost of the fixed asset
(ith the result that only an amount e#uivalent to the original cost of the fixed asset is
available for its replacement (hen its life is over.
,ut the replacement cost of the asset (ill be more than the original cost on account of
inflation so that the replacement provision made by (ay of depreciation charge on the
original cost (ill be insufficient for the purpose. This explains the need for charging
depreciation on current value and sho(ing the fixed assets at the current values.
Fixed assets are valued at cost less a reasonable depreciation (ritten off and any
fluctuation in their mar*et price is ignored because they are not meant for resale in the
mar*et. The utility of such assets is not in the least affected by their mar*et value being high
or lo(1 so any fluctuation in their mar*et price is not cared for. Thus, so far as business unit is
a going concern, fixed assets are valued at cost less a reasonable depreciation (ritten off to
date, but (hen a business unit is not a going concern and is to be li#uidated, current realisable
value of fixed assets becomes relevant.
2ut of fixed assets, land is an exception to the principle of valuation of fixed asset at
cost, less a reasonable depreciation (ritten off. )and is usually valued at the price at (hich it
(as purchased including registration charges and bro*erage paid. Depreciation is usually not
provided on the land because it is not sub-ected to depletion in value by its use. The value of
the land usually increases (ith the passage of time because of its limited availability so there
is no need of any provision for depreciation in case of land.
Need for valatio! of Fixed Assets
.aluation of fixed assets is important in order to have fair measure of profit or loss
and financial position of the concern.
Fixed assets are meant for use for many years. The value of these assets decreases
(ith their use or (ith time or for other reasons. A portion of fixed assets reduced by use is
converted into cash though charging depreciation. For correct measurement of income proper
measurement of depreciation is essential, as depreciation constitutes a part of the total cost of
production.
E"ALUATION TECHNI#UES
This section discusses the important evaluation techni#ues for capital budgeting. The
methods of appraising capital expenditure proposal can be classified into t(o broad
categories.
. Traditional Techni#ues3Methods
%. Time"ad-usted Methods
$% Traditio!al Te&'!i(es
This category includes the follo(ing.
i. Average rate of return method and
ii. 4ay bac* period method
i% Avera)e rate of retr!
The Average rate of return method of evaluating proposed capital expenditure is also
*no(n as the Accounting rate of return method. /t is based up on accounting information
rather than cash flo(s. There are a number of alternative methods for calculating A55. The
most common usage of the A55 expresses it as follo(s.
A55 6 Average annual profits after taxes x77
Average investment over the life of the pro-ect
ii% Pa* Ba&+ Met'od
The 4ay bac* method is the second Traditional method of capital
budgeting. This method ans(ers the #uestion8 !o( many years (ill it ta*e for the cash
benefits to pay the original cost of an investment, normally disregarding salvage value$ 9ash
benefits here represent 9FAT ignoring interest payment. Thus, the paybac* method measures
the no of year re#uired for the 9FAT to pay bac* the original outlay re#uired in an investment
proposal.
4ay ,ac* Method 6 /nvestment
9onstant annual cash flo(
,% Ti-e . ad/sted Te&'!i(es
This category includes the follo(ing.
:i; <et present value method
:ii; /nternal rate of return method
:iii; 4rofitability index method
i% Net 0rese!t vale -et'od
<4. may be described as the summation of the present values of cash proceeds
:9FAT; in each year minus the summation of present values of the net cash outflo(s in each
year. =ymbolically, the <4. for pro-ects having conventional cash flo(s
<4. 69.F

> 9.F
%
"""""" 9.F
n
:>/;

:>/;
%
:>/;
n
ii% I!ter!al Rate of Retr! Met'od
The second Time"Ad-usted Method for appraising capital investment decisions is the
internal rate of return method. This techni#ue is also *no(n as yield on investment, marginal
productivity of capital on time?ad-usted rate of return and so on. This method also considers
the time value of money by discounting the cash streams.
/556 r " 4,"DFr
DFrl"DFrh
iii% Profita1ilit* I!dex Met'od
The another time"ad-usted capital budgeting techni#ue is profitability index or
benefit"cost ratio. /t is similar to the <4. approach. The profitability index measures the
present value of the returns the per rupee invested, (hile the <4. is based on the difference
bet(een the present value of future cash flo(s and the present value of cash outlays.
4/ 6 4resent value of cash inflo(s
4resent value of cash outflo(s
MANA2EMENT OF FIXED ASSETS
The selection of various assets re#uired to creating the desired production
facilities and the decision as regards determination of the level of fixed assets is
primarily the tas* of the production people. !o(ever there are certain financial
considerations also involved in the same. As the decision relating to fixed assets
involve huge funds for a long period of time and are generally of irreversible
nature affecting the long term profitability of a concern, an unsound investment
decision may prove to be fatal to the every existence of the organi+ation. Thus
management of fixed assets is of vital importance to any organi+ation.
T'e 0ro&ess of fixed assets -a!a)e-e!t i!volves3
. =election of most (orthy pro-ects or alternative of fixed assets
%. Arranging the re#uisite funds3capital for the same.
Ho4ever so-e i-0orta!t as0e&ts of fixed assets -a!a)e-e!t are
i% The first important consideration to be *ept in the mind is to ac#uire only
that much amount of fixed assets (hich (ill be -ust sufficient to ensure
smooth and efficient running of business. !o(ever in some cases it may
be economical to buy certain assets in a lot si+e.
ii% Another important consideration to be *ept in mind is the possible
increase in demand of the firms products necessitating expansion of its
activities. !ence a firm should have that much amount of fixed assets
(hich could ad-ust to the increased demand.
iii% The third aspect of fixed assets management is that firm must ensure
buffer stoc*s of certain essentials e#uipments to ensure un"interrupted
production in the event of emergencies. =ome times there may be a brea*
do(n in some of the e#uipments or services affecting the entire
production. /t is al(ays better to have some alternative arrangement to
deal (ith such situations. ,ut at the same time the cost of carrying such
buffer stoc*s should also be evaluated.
iv% The fourth aspect of management of fixed assets is to consider the cost of
capital to be invested.
Pri!&i0les of Fixed Assets Ma!a)e-e!t
The main ob-ective of fixed assets management is to ma*e sound
investment in the fixed assets such as land, building, machinery etc.
T'e follo4i!) are t'e -ai! 0ri!&i0les i! -a!a)i!) fixed assets3
. =election of most appropriate and suitable fixed assets.
%. Financing and ac#uisition of fixed assets.
&. =ound depreciation policy.
'. 4roper accounting of fixed assets.
@. 4eriodical appraisal of fixed assets.
IMPORTANCE OF RATIO ANAL5SIS
The ratio analysis is the most important po(erful tool of the financial
analysis. With the help of ratios the follo(ing can be determined.
. The efficiency (ith (hich the firm is utili+ing its assets.
%. The ability of the firm to meet its current obligation.
&. The extent to (hich the firm has used its long term solvency by
borro(ing funds.
The ratio analysis (ill reveal the financial condition of the company more
reliably (hen trends in ratios overtime are analy+ed. 5atios at a point of time
can mislead the analyst, because they may be high or lo( for some exceptional
circumstance at that point of time. An impressive present financial position may
really be over time, (hile a (ea* position may be improving at rapid rate
overtime.
Fixed Assets Ratios

The main ob-ective of providing this chapter is -ust to bring out certain
ratios regarding to fixed assets and to provide satisfactory norms thereon to
9hittoor co"operative sugars limited. !ence, the (ide coverage of ratio analysis
not discussed and maintained for 9.9.=.).
9ertain ratios provided for 99=) (ill enhance the efficiency and
effectiveness of fixed assets management in the firm. The (orthiness and un
(orthiness in the utili+ation of fixed assets should be *no(n through the
analysis of these ratios in the 99=). These ratios (ill act as a yardstic* to the
company in the prospective year and hence the need arises to maintain these
ratios for 99=).
<ormally a ratio is Athe indicated #uotient of t(o mathematical
expressions or the relationship bet(een t(o or more things.
T'e follo4i!) are t'e differe!t ratios3
. Fixed assets to <et (orth ratio
%. Fixed assets ratio
&. Fixed assets turnover ratio
'. Fixed assets to Funded debt ratio
@. Fixed assets to Total capital ratio
B. Fixed assets to <et(or*ing capital ratio
C. Fixed assets to 9urrent assets ratio.
PROFILE OF SU2AR INDUSTR5
=ugar cane is one of the important crops for the /ndian farmer. =ugar and
Daggery are the main products that (e get from =ugarcane. 2ther products such
as ,iogases for industrial use, Molasses for distillery, filter ca*e. Mud as an
organic manure and green leaves (ith tops for cattle feed are also available as
by"products, because of its multi uses =ugarcane has played crucial role in
/ndian economy (ith 5s %7777 cores turnover and (idth '@7 sugar mills
providing assistance to '@ million sugarcane farmers and % million =ugarcane
farmers and % million (or*men directly and indirectly.
/n A.4. sugar industry is an important Agro"based industry, occupying the
second position next to text tile industry. The annual cultivated area is about
.EE lac* hectares (ith a yield of 'E.'@ lac*s of tones during EB"EC. At
present, there are &B sugar factories in the state and @7F of them are in co"
operative sector. The co"operative sugar units in the states have been suffering
due to lac* of ade#uate cane irrigation facilities, (or*ing capital, by"product
utili+ation, excessive employment etc.
The sugar industries (hich provide direct employment to about & lac*s
persons of sugar cane follo(ed by ,re+il G 9uba. =ugar cane existed in /ndia
from &777 ,.9 the centre place of origin of sugar cane regarded as <ortheastern
/ndia, from sugar cane seems to have been to 9hina and other places by early
travelers and no mans bet(een H77 and C77 ,.9. later. /t (as penetrated to
4hilippines, De(a and other places. Actually the (ord sugar derived from a
=ans*rit (ord As'a+raI.
/ndia (as the (orlds largest producer of sugar cane occupies a very pride
place in the (orld. /n /ndia, the cultivation of sugar cane is 7,777 miles tones.
The average yield, being @B tones per acre of total cultivating land is occupied
by sugar cane cultivation. =ugarcane is gro(n in almost all part of /ndia, except
in colder regions and extreme <orth Dammu Jashmir, !imachal 4radesh.
Area (ise distribution of sugar industry in A.4
=.no =ector <o.of
industries
9ostal
Area
5ayalaseema Telangana
9o"
operative
H % ' %
% 4ublic
sector
C @
& 4rivate
sector
H %
Total &B % C H
List of Co6o0erative s)ar fa&tories i! A%P%
. The 9hittoor 9o"operative sugars ltd, 9hittoor.
%. The 9hodavaram 9o"operative sugars ltd, 9hodavaram.
&. The Ana*apalle 9o"operative sugars ltd, Ana*apalle.
'. The Kti*uppa*a 9o"operative agricultural of industrial society ltd,
Kthi*uppa*a.
@. =ir .i-ayarama La-apathi 9o"operative sugars ltd.
B. The Amadavalasa 9o"operative agricultural industrial society ltd,
=ri*a*ulam.
C. The West Lodavari 9o"operative sugars ltd, Kluru.
H. 4ala*ollu 9o"operative agricultural G industrial society ltd., 4ala*ollu.
E. The Thandara 9o"operative sugars )td, .isha*hapatnam.
7.<i+amabad 9o"operative sugars ltd., <i+amabad.
.=ir .en*ates(ara 9o"operative sugars ltd., 5enigunta.
%.The 9uddapah 9o"operative sugars ltd., 9hannur.
&.the <andyal 9o"operative sugars ltd., 4onnapuram,
'.The Jovur 9o"operative sugars ltd., <ellore.
@.<agar-una 9o"operative sugars mills ltd., Lur+ala.
B.<amapaneni .en*ata 5ao 9o"operative sugars ltd., !anuman -unction.
C.=rihanuman 9o"operative sugars ltd., !anuman -unction.
H.4alair 9o"operative sugars ltd., Ammagudem.
S)ar i!dstr* !atre
Seaso!alit*
The industry is seasonal, (ith the season starting in <ov and continuing
till April3May, sugar cane is available during these B"C months and crushing also
ta*es place during these months.
Li&e!si!) s*ste-
To protect sugar ? producing units and ensure a sufficient #uantity of ra(
material :sugar cane;, licensing system (as introduced. 0nder this system, each
unit had a command area from (here the sugarcane (as produced.
The licensing system presently in place is also trying to encourage the
setting up of ne( units by providing them (ith sops and other benefits.
PROFILE OF THE C%C%S%LIMITED
Brief data of T'e C'ittoor Co6O0erative S)ars Li-ited
. <ame of the firm 3 The 9hittoor 9o"2perative =ugars )td,
9hittoor, A.4.
%. )ocation and address 3 9hittoor 9o"2perative =ugars )td, 9hittoor.
&. Date of registration 3 %%"7H"E@@.
'. Date of commencement
of business 3 %%"7H"EB&.
@. The installed capacity
of the enterprise 3 777 metric tones3day.
/. First stage 3 H.@7 lac* from gro(ers
//. =econd stage 3 %@.77 lac* from =tate Lovernment
///. Third stage 3 E@.77 lac* from term loans
Total 3 %H.@7 lac*.

The society has a separate Finance Department. =et of Finance
Department is as follo(s8


The irrigation in 9hittoor district mostly depends on open (ells, recharge
of (ater in the (ells depends on ground (ater level and rainfall. !o(ever,
rainfall depends on monsoon, (hich is uncertain. The soils in the district are
almost suitable for sugarcane. /n the good olden days, total #uantity of
sugarcane produced in the district (as commenced as Daggery by ganugas
:bulloc* crushers; and po(er crushers. The Daggery ma*ing (as very difficult
9hief Kngineer
9hief 9hemist
Deputy Kngineer
M.D
2ffice
Administration
Accounts 2fficer
9ane 2fficer
Technical
so the small farmers due to lac* of crushers and unfavorable prices. The big
farmers also faced difficulty to crush the cane for a long period.
The Daggery ma*e in the district (as brought to the 9hittoor G 4a*ala,
(hich are the mar*et places (ith rail(ay transportation. There (as a lot of
exploitation of farmers by the Daggery mundi o(ners by advancing the money
(ith high interest rates, commission and also not (ith po(er (eighing. The
price fluctuation created by the traders (as also a reason for poor reali+ation,
but there (as no other choice to the farmers.
Evalatio! of t'e fa&tor*
0nder the above circumstances, the farmers and leaders of the district felt
the need for the establishing a factory in 9o"operative sector to enable
sugarcane farmers to gets good returns. The 9hittoor 9o"operative sugar ltd.,
9hittoor is the first Agro"based ma-or industry in 5ayalaseema area1 it (as first
registered on %%"7H"@@ under the A49= Act. /ts area of operation comprises of
E% villages in % mandals. Factory is located along 9udalore" Jurnool
<ational !igh(ay no H, & *ms to(ards Jurnool from 9hittoor to(n. /t 2(ns
H@.EB acres of land. /t (as first commissioned on H.7.EB& (ith a licensed
and installed capacity of lo( tones cane crushing per day.
During EC' its cane crushing capacity has been expanded to B77 tones
per day. =ince EHE, Moderni+ation is being done in phases. 4resently factory is
(or*ing at an average cane crushing of H77"%777 tones per day.
CAPITAL STRUCTURE
2riginal pro-ect cost (as 5s%H.@7 lac*s it has been founded from
follo(ing sources.
5s. )a*hs
/ =hare capital from
:a; 9ane gro(er members H.@7
:b; =tate Lovernment %@.77
// )oans
:a; /F9/,, <e( Delhi C@.77
:b; )/9/, ,ombay %7.77
"""""""""""
Total %H.@7
""""""""""""
/// 9apital outlay
:a; )and %.&H
:b; ,uildings @.E7
:c; 4lant G Machinery 7E.&'
:D; 2ther assets @.CC
:e; 4re. 9o" operative exp '.77
:f; .ehicles 7.EB
"""""""""""""""
Total %H.@7
"""""""""""""""
/. 4resent value of assets as on &.7&.%77C
:a; )and 'EC.E
:b; ,uildings '%&.H@
:c; 4lant G Machinery @@.C7
:d; 2ther assets &'.C&
:e; Transport vehicles E.E'
""""""""""""""
Total %&.'
"""""""""""""""
Membership share capital <o 5s.lac*s
:a; Members &''H H@.@C
=tate Lovernment 7%H.''
"""""""""" """""""""""""
Total &''E &E'.7
"""""""""" """"""""""""
:b; <5DG<5FD of members %&.BE
:c; Accumulated loss on &"7&"7&
:As per proforma of accounts; &HE.'E
7or+i!) &a0ital arra!)e-e!ts
0nder sugar cane control order :EBB;of Lovernment of /ndia,
cane price is payable (ith in the ' days from the date of purchase (here
as sugar produced and released for sale monthly over a period of B to H
months. More than C7F of cost of production is covered by sugar to
comply (ith statutory provision in regard to payment of sugar cane price
(ith in ' days. Kither to financing ban*s i.e., :District 9o"operative
9entral ,an*; have been allo(ing loan ME7F of levy sugar value and H
on open mar*et sugar value. First time for this EEE"%777 season,
<A,A5D have laid do(n, in their ne( credit policy guide lines, to
compute and allo( pledge loan an sugar stoc*s restricting to statutory
minimum cane price notified by Lovernment of /ndia.
With thin ne( guide line, through huge sugar stoc*s (ith abundant
loan dra(ing po(er are available, factory cant dra( loan to pay state
advised cane price to gro(ers. The =M4 notified by Lovernment (ould
not cover even cultivations costs. The difference bet(een state advisory
prices is about 5s.%@7 per M.T. To receive the difference amount of cane
price cane suppliers have to (ait till the entire sugar stoc*s are sold
(hich (ould ta*e about B to H months
This particular condition introduced first time this season is to be (ith
dra(n oilier (ised cane gro(ers (ould go in for cultivation of alternate
crops as the =M4 (ould not cover even cultivation costs. This issue is
ta*en up by state Lovernment (ith <A,A5D and Ministry of Finance,
Lovernment of /ndia.
MODERNISATION
During the year EE&"E' factory has planed to increase its cane
crushing capacity from B77 tcd to %@77 tcd in phase, as a part of the
program, under
st
phase, factory has spent 5s &'.H7 lac* and carried out
/ phase moderni+ation. During EEC purchase of a ne( & MW po(er
turbine has been finali+ed. /t is commissioned during this EEE"%777 cane
crushing season. The ne( po(er turbine and altering electrical and civil
(or*s put together is 5s B7 lac*. At a cost of about the E7 lac*,
installation of T5F system to mills modification of a boilers to increase
the capacity and modification of return biogases carrier are
executed3being executed to achieve a daily cane crushing of %%77 tones
cane.
7A2E STRUTURE
a. The (ages of the (or*ers are covered by A=ugar Wage
,oardI recommendations at AAll /ndia levelI.
b. The minimum monthly (age of uns*illed (or*ers at starting
of the time scale is 5s &,E7.
c. =ugar season is re"opened from
st
2ct to &7
th
=ep next year,
generally cane crushing operating one commenced during &
(ee* of nov and continued up to end of April of next year.
From May"2ct is off season.
Ca!e Develo0-e!t a!d I!&e!tives To Ca!e Cro4ers
:A; There is separate Agricultural Wing in factory headed by a 9hief
Agriculture 2fficer. Total area of operation is divided into &B field
mens (or* is supervised by H Agricultural 2fficers.
:,; Follo(ing are developmental activities being implemented
a. Arrange soil testing at factorys soil laboratory.
b. A supply of improved verities of seed in consultations (ith
regional agricultural research stations.
c. Arrange educational tours, to selected cane suppliers, (ithin
and out side the state.


I!&e!tives 0aid to 2ro4ers
a. @7F 7f actual cane transport charges up to '7*ms distance are
=ubsidi+ed.
b. 9ane transport charges beyond '7*ms are subsidi+ed 77F.
c. 2ver and above state advised cane price, an incentive price of one
%@ 4er MT is paid to improved varieties supplied to factory.
d. Fertili+ers are supplied on loan, free of interest.
e. 4esticides G Feticides are supplied at subsidi+ed rates.
f. At 3% *g per tone of sugar cane supplied for cane crushing, sugar
is =upplied =ub-ect to minimum of %7*gs and maximum of
%7*gs at subsidi+ed rates.
7elfare s&'e-es to &a!e )ro4ers
a; A Jalyanamandapam is constructed in factorys premises (ith
5s.@B.@ lac*s. 9ontribution from cane supply members. 5s.'%77 per
day is charged as rent from cane supply members and employed.
5s.C&@7 per day are charged from non members.
b; @77% cane supply members are covered under Danata personal
accident policy for a period of % year commencing from Dan EH.
Family of any deceased number covered under this policy gets 5s
77777 as compensations @7F of premium i.e., 5s &.@ lac*s is
subsidi+ed by factory.
c; @77% cane supply numbers are covered under ADanarogya ,hima
4olicyI. 5eimbursement charges up to a maximum of 5s @777 per
year is expended under this scheme @7F of premium i.e., 5s %.7@
lac*s is subsidi+ed by factory.
Ma!a)e-e!t3
At present the elected board has assumed charged on 7B.7'.%777 the
present ,oard of directors as detailed belo(.
4resident
,oard of directors '
Kmployees director
"""""""""
Total B
"""""""""
C'ief exe&tive 8 f!&tio!i!) of varios de0art-e!ts3
a9 9hief Kxecutive of the society is M.D. having a seat on the ,oard
19 There are five ma-or Departments.
a. Administrative
b. Kngineering
c. Manufacturing
d. Agriculture
e. Accounts G Finance.
&9 All aspects of accounting, sugar cane (eightiest and laboratory analysis
reports are computeri+ed during EHE"E7 for better cane regulation,
(ireless system (as also introduced during EHE. At all H division !ead
Nuarters and at a Administrative 2ffice (ireless stations and sets are
installed.
d9 All policy matters are dedicated by ,oard3person"in"change.
e9 Ca!e 0ri&e3
,efore commencement of sugar cane crushing season,
Lovernment of /ndia notifies statutory minimum cane price
payable by each sugar factory. This is also to be paid (ithin '
days from the date of purchase. 2ver and above the statutory
minimum cane price payable by each sugar factory. This =A4 is
being paid by us. We have crushed cane for the season EEE"%777
is %,H%,%7%.@E% mts (ith an average recovery E.7&H.
f9 S)ar3
2ut of total sugar production of each season, &7F shall
be delivered to Lovernment nominees for public distribution system at
notified levy price for every season Lovernment of /ndia notified levy
sugar price application to each sugar factory. Kvery month
Lovernment of /ndia releases the #uantity of levy sugar and open
mar*et sugar to be sold during each month. 2pen mar*et sugar is sold
an tender systems and is delivered against payment of cost plus duties.
)9 Molasses3
Molasses is a by product in the course of manufacturing
of sugar from EE& Dune molasses price are de" controlled. Molasses is
sold by inviting tenders on all /ndia basis by publishing tender notice.
'9 E!)i!eeri!) a!d Ma!fa&tri!) De0art-e!ts3
During off season Kngineering and Manufacturing
Department attend to over hauling and preventing maintenance and *eep
ready the plant for cane crushing. During the season factory (or*s round
the cloc* in three shifts.
i9 Ca!e de0art-e!t3
9ane department is provided (ith sufficient Kxecutive
=taff. They collect cane supply offers, from cane gro(ers, offers are
being accepted members @ years supply average tie up arrangement (ith
factory. 2ne month before commencement of cane crushing. 4repares
maturity survey is conducted by dra(ing cane samples from agreement
cane fields they are analy+ed in factorys laboratory, based on the
analysis, cane supply numbers permits are issued to cane supply number
limiting to factorys daily cane crushing capacity. Factory provides B7 to
H7 !ired )orries to needy gro(ers. @7F of transport charges up to '7 *m
distance are subsidi+ed by factory. Transport charges beyond '7 *m are
subsidi+ed 77F.
/9 Liaiso! far-3
Factory is having a sugar cane liaison farm in an extent
'.H7 hec. Factory brings improved varieties from sugar cane research
stations multiplies in its farm and supplies seed to gro(ers.
+9 Total stre!)t' of esta1lis'-e!t is No% of 4or+ers
. 4ermanent :non seasonal; %@
%. =easonal permanent %%&
&. 9onsolidate (ages :seasonal; %&'
'. Daily (ages :<M5; %H&
""""""""""""
Total E@@
""""""""""""
I!vest-e!t o! Fixed Assets
The 9apital expenditure proposals are ascertained by the Lovernment of
A.4. prior. A.4. prior to this accounts officer of the accounts departments has to
prepare ,udget of the concerns :Through department heads;.
,oard of Directors :,2D=;3Director of sugar are authori+ed to decide
investment on fixed assets.
There is no limit fixed on the si+e of the investment on fixed assets the
concern is having machinerys (orth 9rore also. =ome times in purchase of
large assets the procedure is resolutions are *ept before M.D or Director of
sugar if they feel to have the resolutions passed then it is *ept and ma*es it
accepted in ,oard meeting.
<o officers of the underta*ing exceeded the authori+ed limits of the fixed
assets.
,ased on the need and necessity of the firm is made. The M.D. :or;
director of sugar is approved it.
<o special techni#ues have been adopted for evaluating investment
proposals on the fixed assets. According to the decisions of the ,oard various
investment proposals are made on the fixed assets.
,ased on tender system G state level purchase co decisions fixed assets
are purchased.
Tenders are scrutini+ed based on the vie(ing companys past
performance, #uotations made and standard of the asset.
The method of depreciation is straight" line method and based on /.T act.
Depreciation rates for the different assets are fixed at different rates li*e on
machinerys 7F
2n loose"tools MBF, some assets dont carry depreciation.
<o depreciation has been maintained for 5eserve Fund.
CASH MANA2EMENT
a. <o separate organi+ation for cash management is maintained in the
society.
b. Ma-or things in the concern are the sugar cane. The sugar cane is
seasonal crop and of course this is treated as main important thing
for the firm. Tenders are inviting in the purchasing the cane. ,ased
on the availability of the sugar cane (or*ing capital re#uirements
are made.
c. Tender procedures are adopted for this purpose.
d. )i#uidity #uestion doesnt arise because the society deals almost
all each and every transaction through ,an*, DDs G 9he#ues.
e. <o policy has been follo(ed regarding optimal cash balance in the
society.
f. Wor*ing capital re#uirements are mainly from the sugar cane
gro(ers.
g. Through unsecured short" term loans over drafts short"term loans
are raised.
h. 9ash credit limits doesnt arise.
i. The head of the department regulates cash balance
-. Ade#uacy of cash schedule doesnt arise
*. There is no cash (ere =urplus3in ade#uacy of cash balances in the
society
I!ve!tor* Ma!a)e-e!t
There is no #uestion of selling up of the 2rgani+ation for the maintenance
of materials G store .usually store *eepers loo*s after the maintenance of the
materials % stores of the concern.
0sually at the very beginning of the season sugarcane is purchased in
bul* ./f needed further purchase is made by inventing tenders and #uotations
.0sually purchasing 9ommittee goes for the lo(er tender for the purchase of
sugarcane.
T'e Me-1ers of t'e Pr&'asi!) Co--ittee
9hairman, M.D, Accounts officers, other % members selected by Director
of sugar
The role of purchasing committee is usually meets ' times in a year i.e.
for every & months according to need and urgency of the firm. The role of 4.9
usually has a vital essence in the finical of pending indents .the 4.9 examines
the various #uotations made by gro(ers and selected those tenders, (hich are
beneficial to the concern.
T'e Met'ods of Pr&'asi!) are
o 2pen tender, according to urgency direct purchase
o <o delegation is made to lo(er level employees in case of
purchase
o There is no particulars policy made regarding the value of stoc*
limits (hatever it may be li*e
o 5a( materials ,(or* in progress ,supplies and construction
materials ,stores and spares ,pac*ing ,materials ,process materials
and other materials if any .as agreement are made *eeping in vie(
our needs .so there is no limits raises.
T'e Ra4 Material Re(ire-e!ts are Esti-ated
9hief 9hemists and =tores manager, ra( materials are purchased in bul*.
,y means of factories contract )orries on by 4rivate )orries ra( materials
are transported
A ra( materials for the society is sugar cane usually 9hief Kngineer
estimates the ra( materials agreement is ma*ing increase of purchase of ra(
materials
T'e 1asis for esti-ati!) ra4 -aterial re(ire-e!ts is
=ugar cane is seasonal crop so this (ill be usually estimated by 9AL2
:9hief Agricultural 2fficer;. !o( much production of sugar cane is there in the
state$ The 9hief 9hemist and 9hief Kngineer prepare a statement in
re#uirement of ra( materials of the concern and purchase it thought direct
method a ma*ing tenders.
2nce in year the purchase (as made i.e. before starting of the season ra(
materials are purchased. There fore the ra( materials for the (hole year
purchased once.
T'e s0are 0ails re(ire-e!ts are esti-ate 1* C'ief E!)i!eer
o ,ased on the re#uests of the Departmental heads spare pails
re#uirements are fulfilled.
o =tore *eeper stores and spares control inventory classification and
codification techni#ues has been adopted
o ,y classification and codification the inventory of the concern are
made good and gives maximum output to the concern
o Oes, there is over stoc*ing of and a spare in the society .the cause
for over stoc*ing is.
o !uge purchases (ith out consumption though over stoc*ing is
there it is *ept as dead stoc* in the stores but it can be used in the
production and it is not treated as (aste stoc*.
o For e.g. if lime is @773" per bag before & months it (ill be
purchased and stored. After & months if its price (ent up to H773"
per bag then the stored one is dead stoc* it can be used in the
production of sugar it is not treated as (aste.
o The materials are purchased on both credit and cash
o /f small payment to be made it (ill be paid immediately.
o /f larger amounts they can be paid according to the financial
position of the concern.
o
Bills:Re&eiva1les Ma!a)e-e!t
,ills35eceivables arise only (hen the product is sold on credit basis i.e.,
(hen credit sales ta*e place bills come to the sho(. ,ut the society sells the
sugar on cash and D.D. sale of sugar is made doesnt arise. =ociety directly sells
the sugar to the Lovernment sometimes.
Profita1ilit* -a!a)e-e!t
"arious products of the society
o =ugar, molasses, press mud contains sulphur used as fertili+ers.
o The nature of the mar*et is competitive
o The si+e of the mar*et is national
T'e &lose &o-0etitors are
o =... =ugar factory in 5enigunta, .ani =ugars in 4unganur
o .ellore =ugar factory and Mayura =ugars in ,.<. Jandriga.

T'e 0ri&i!) 0ra&ti&e follo4ed 1* t'e e!ter0rise is
9ompetitive pricing in case of sugar
4rices based on Lovernment a(ard in case of cane
The enterprise products are price correctly
The Lovernment for the fixation of prices of the products has fixed
no guideline.
4rofit notice is the primary ob-ective in the fixation of the prices.
The enterprise adopting the system for profit planning and control.
Profit tar)et is deter-i!ed 1*
o Minimi+ing the cost of production to achieve more profits
T'e de0art-e!t i!volved i! t'e 0rofit 0la!!i!) is
A&&o!ts de0art-e!t
o For achieving the profit the management has been revie(ing on
cost of production.
o To get good recovery in sugar fre#uent enlightment program has
been done (ith numbers by agricultural experts and receive
instructions to the head of the institution.
OB;ECTI"ES
T'e follo4i!) are t'e o1/e&tives of t'e std* of I!ve!tor* &o!trol3
. To study the various sources of Fixed Assets in the 9hittoor 9o"operative
=ugars )td for %77&"%77C.
%. To study the Fixed Assets management in A9o"operative =ugars
)imited<= (ith specific reference to
Management of )and and ,uildings.
Management of 4lant and Machinery.
Management of Motor vans, Furniture etc.
>% To study the li#uidity position of The 9hittoor 9o"operative =ugars
)td for %77&"%77C.
'. To identify the problems regarding to Fixed Assets Management in
9o"operative =ugars )imited and give possible suggestion for better
management.
?% To study ho( to ma*e decisions regarding to Fixed Assets in The
9hittoor 9o"operative =ugars )td for %77&"%77C.
SCOPE OF STUD5
The current study underta*en for the purpose of analy+ing Fixed Assets
Management of the 9hittoor 9o"operative =ugars )imited, (hich is situated at
9hittoor, Andhra 4radesh.
The study concentrates on various techni#ues involved in maintaining an
optimum level of Fixed Assets that involves maintaining of )and and ,uildings,
4lant and Machinery etc.
RESEARCH METHODOLO25
The main aim of this study is to *no( the Fixed Assets Management (ith
respect to 9hittoor 9o"operative =ugars )td.
5esearch is a careful investigation or en#uiry especially through search
for ne( facts in any branch of *no(ledge.
. DATA COLLECTION8
The re#uired data for this study has been collected from =econdary sources
of information. This information has been gathered from A9o"operative =ugars
ltdI through personal intervie( and personal verification of the company reports
and financial statements.
%. PLAN OF ANAL5SIS8
The entire Fixed Assets Management in A9o"operative =ugars )imite has
been analy+ed in detail and the information gathered and analy+ed by using the
appropriate tools such as ratio analysis and graphs. /t is a #uantitative analysis
of the Fixed Assets Management. The study has been used to generate some of
the the recommendations to the company at times of crisis.
LIMITATIONS OF THE STUD5
The follo(ing are the limitations of a study8
. The study is limited to only a particular company, i.e. The 9hittoor 9o"
2perative =ugars )imited.
%. /t is difficult to analy+e the overall information regarding the company
because the analysis based for a specified period.
&. The result of the study depend upon the information furnished by the
secondary source
'. The Lovernment and economic policies affecting the industry are not
ta*en into consideration.
@. The Fixed Assets Management of AThe 9hittoor 9o"operative =ugars ltdI
is studied only for a period of ' years, from %77%"7&to %77B " 7C.
CHAPTARISATION
T'e Std* is Divided i!to Ei)'t C'a0ters
CHAPTER6I8 Discuss (ith
=tatement of the 4roblem
<eed for =tudy
CHAPTER6II8 Discuss (ith
/ntroduction to the Fixed Assets
CHAPTER6III8 Discuss (ith
4rofile of =ugar /ndustry
CHAPTER6I"8 Discuss (ith
4rofile of the 9hittoor 9o"operative =ugars )td
CHAPTER6"8 Discuss (ith
/nvestment on Fixed Assets
9ash Management
/nventory Management
CHAPTER6"I8 Discuss (ith
5esearch Design G Methodology
2b-ectives of the =tudy
=cope of the =tudy
9ollection of Data
Analysis of Data
Kvaluation Techni#ues
)imitations of the =tudy
CHAPTER6"II8 Discuss (ith
Findings G =uggestions
CHAPTER6"III8 Discuss (ith
,ibliography

=tatement sho(ing the changes in the Fixed Assets of the 9hittoor 9o"operative
=ugars )td for the year %77%"7& To %77&"7'.
4articulars %77&
5s
%77'
5s
9hanges
in Fixed
Assets 5s
Factory ,uildings
Factory .ehicles
Factory Mixing 4lant
)and
<on"Factory ,uilding
<on"5esident ,uilding
4lant and Machinery
FM4 ,uilding
FM4 Lodo(n ? /
FM4 Lodo(n ? //
Furniture and Fittings
<e( Administrative ,uilding
Kffluent Treatment 4lant
Mollasses Tan*
%EHBCE&
HH%CE
'&%H'
''CHC7
7HC'%@
'B7H
7'7'%BBH
'HH%H
@'''%
&E7@&
C7H&''
@C%%&@
&HBC
%C'%'@
%EHBCE&
HH%CE
'&%H'
''CHC7
7HC'%@
'B7H
7'7'%BBH
'HH%H
@'''%
&E7@&
C7H&''
@C%%&@
&HBC
%C'%'@
"
"
"
"
"
"
"
"
"
"
"
"
"
"
9ompound Wall :,uilding;
Total
H&&@7%
@@BB&
H&&@7%
@@BB&
"
"
=tatement sho(ing the changes in the Fixed Assets of the 9hittoor 9o"operative
=ugars )td for the year %77&"7' To %77'"7@.
4articulars %77'
5s
%77@
5s
9hanges in
Fixed
Assets 5s
Factory ,uildings
Factory .ehicles
Factory Mixing 4lant
)and
<on"Factory ,uilding
<on"5esident ,uilding
4lant and Machinery
FM4 ,uilding
FM4 Lodo(n ? /
FM4 Lodo(n ? //
Furniture and Fittings
<e( Administrative ,uilding
Kffluent Treatment 4lant
%EHBCE&
HH%CE
'&%H'
''CHC7
7HC'%@
'B7H
7'7'%BBH
'HH%H
@'''%
&E7@&
C7H&''
@C%%&@
&HBC
%EHBCE&
HH%CE
'&%H'
''CHC7
7HC'%@
'B7H
7''&BC%
'HH%H
@'''%
&E7@&
C7H&''
@C%%&@
&HBC
"
"
"
"
"
"
&E&@7'
"
"
"
"
"
"
Mollasses Tan*
9ompound Wall :,uilding;
Total
%C'%'@
H&&@7%
@@BB&
%C'%'@
H&&@7%
@E@@C
"
"
&E&@7'
=tatement sho(ing the changes in the Fixed Assets of the 9hittoor 9o"operative
=ugars )td for the year %77'"7@ To %77@"7B.
4articulars %77@
5s
%77B
5s
9hanges in
Fixed
Assets 5s
Factory ,uildings
Factory .ehicles
Factory Mixing 4lant
)and
<on"Factory ,uilding
<on"5esident ,uilding
4lant and Machinery
FM4 ,uilding
FM4 Lodo(n ? /
FM4 Lodo(n ? //
Furniture and Fittings
<e( Administrative ,uilding
Kffluent Treatment 4lant
Mollasses Tan*
9ompound Wall :,uilding;
%EHBCE&
HH%CE
'&%H'
''CHC7
7HC'%@
'B7H
7''&BC%
'HH%H
@'''%
&E7@&
C7H&''
@C%%&@
&HBC
%C'%'@
H&&@7%
&7'7B
%HBBCE
'&%H'
''CHC7
7HC'%@
'B7H
7B%E@%%B
'HH%H
@'''%
&E7@&
C7H&''
@C%%&@
&HBC
%C'%'@
H&&@7%
@'&&
'BH'77
"
"
"
"
H@E7@'
"
"
"
"
"
"
"
"
Total
@E@@C H&&BHCC %&HCB7
=tatement sho(ing the changes in the Fixed Assets of the 9hittoor 9o"operative
=ugars )td for the year %77@"7B To %77B"7C.
4articulars %77B
5s
%77C
5s
9hanges in
Fixed
Assets 5s
Factory ,uildings
Factory .ehicles
Factory Mixing 4lant
)and
<on"Factory ,uilding
<on"5esident ,uilding
4lant and Machinery
FM4 ,uilding
FM4 Lodo(n ? /
FM4 Lodo(n ? //
&7'7B
%HBBCE
'&%H'
''CHC7
7HC'%@
'B7H
7B%E@%%B
'HH%H
@'''%
&E7@&
&7'7B
&&BCE
'&%H'
''CHC7
7HC'%@
'B7H
7B%E@%%B
'HH%H
@'''%
&E7@&
"
'@777
"
"
"
"
"
"
"
"
Furniture and Fittings
<e( Administrative ,uilding
Kffluent Treatment 4lant
Mollasses Tan*
9ompound Wall :,uilding;
Total
C7H&''
@C%%&@
&HBC
%C'%'@
H&&@7%
H&&BHCC
C7H&''
@C%%&@
&HBC
%C'%'@
H&&@7%
H&HEHE
"
"
"
"
"
'@777
FIXED ASSETS TO NET 7ORTH RATIO
The 5atio establishes the relationship bet(een Fixed Assets and =hare
holders funds. The 5atio can be calculated as follo(s.
6 Fixed Assets
=hareholders fund
=hareholders fund6=hare capital> 5eserves> =urplus
The 5atio indicates the extent to (hich =hare holders funds are sun*
into the Fixed Assets. /f the 5atio is more than it implies that o(ners funds
Are more than the total Fixed Assets. When the ratio is less than it implies
That the o(ners funds are not sufficient to finance Fixed Assets.

Ta1le6$3 Fixed Assets to <et (orth ratio of 9hittoor co"operative sugars
)imited for the year %77%"7& to %77B"7C.

OKA5 F/PKD A==KT= =!A5K!2)DK5=
F0<D
5AT/2
%77%"7& ,@@,B,B& &B,7%,BC,E'' 7.&%
%77&"7' ,@@,B,B& &B,EB,'7,%' 7.&
%77'"7@ ,@E,@@,C &C,7@,H&,@'& 7.&
%77@"7B ,H&,&B,HCC &C,'7,B,B7 7.&
%77B"7C ,H&,H,EHE ',7@,%,'E% 7.%E
Sor&e 3 T'e P1lis'ed Bala!&e s'eet of C%C%S%Li-ited
INTERPRETATION:
The ratio is less than 1 in all the 5 years .It implies that the
owners fund is not sufficient to finance fixed assets and the firm has to depends on
outsiders to finance Fixed Assets. In the first years it to be 0.32 and the next three
years it is decreased to 0.31
FIXED ASSETS RATIO
The ratio establishes the relationship bet(een Fixed Assets and
Total long term funds.
6 Fixed Assets
Total long term funds
)ong term funds 6 =hare holders funds > )ong term borro(ings
Lenerally the Fixed Assets should be e#ual to the total long term
Funds, say the ratio should be 77F. /n case the Fixed Assets exceeds the
Total long term funds it implies that the firm has financed a part of the Fixed
Assets out of (or*ing capital (hich is not a good financial policy. /f the total
)ong term funds are more than the Fixed Assets, it means that the part of the
(or*ing capital re#uirements is met out of long term funds of the firm.
Ta1le ,3 Fixed Assets ratio of 9hittoor 9o ? operative sugars )imited

For the years %77%"7%& to %77B"7C.
OKA5 F/PKD A==KT= )2<L TK5M
F0<D=
5AT/2
%77%"7& ,@@,B,B& B%,'C,%7,BE7 7.H
%77&"7' ,@@,B,B& B%,%%,C@,@E 7.E
%77'"7@ ,@E,@@,C B&,&H,@B,HB' 7.H
%77@"7B ,H&,&B,HCC B',7,&@,HH 7.H
%77B"7C ,H&,H,EHE B','B,&@,HH 7.H

Sor&e 3 T'e P1lis'ed Bala!&e s'eet of C%C%S%Li-ited
INTERPRETATION3
The Fixed assets ratio is 7.H in the year %77%"7& and it is
increased in the next year to 7.E in the year %77&"7'. This ratio is again
decreased to 7.H in the last t(o years. /n all the years the total long term funds
more than the fixed assets, it implies that the part of (or*ing capital
re#uirements is met out of long term funds of the firm.
FIXED ASSETS TURNO"ER RATIO
Fixed Assets Turnover ratio is the relationship bet(een the
=ales and Fixed Assets. This ratio measures the efficiency of a firm in managing
and utili+ing its Fixed Assets. The higher the Turnover ratio the more efficient
in the management and utili+ation of fixed assets and lo(er the ratio indicates
of under utili+ation of fixed assets.
6 =ales 3 cost of goods sold
Total Fixed Assets
Ta1le >3 Fixed assets turnover ratio of 9hittoor co"operative sugars limited for
the years %77%"7& to %77B"%77C.
OKA5 =A)K= F/PKD A==KT= 5AT/2
%77%"7& %7,',HB,@C& ,@@,B,B& .C
%77&"7' &,7@,C,'&B ,@@,B,B& .
%77'"7@ ,&H,C',@'% ,@E,@@,C 7.E
%77@"7B %,&C,E,BB ,H&,&B,HCC .7
%77B"7C %,'E,%H,EC ,H&,H,EHE .
Sor&e 3 T'e P1lis'ed Bala!&e s'eet of C%C%S%Li-ited
INTERPRETATION3
The fixed assets turnover ratio is .C in the year%77%"7&
and it is decreased in the next year to .. /t is continuously decreased for next
t(o years and reached 7.E in the year %77'"7@. !o(ever it is increased in the
year %77B"7C and reached to ..The fixed assets ratio is highest in the year
%77%"7& and %77%"7& (hich indicates the efficiency in utili+ation of fixed assets
by the firm.
FIXED ASSETS TO FUNDED DEBT RATIO
The ratio measures the relationship bet(een the Fixed
Assets and Funded debt. /t is very useful to the long term creditors. The ratio
can be calculated as follo(s.
6 Fixed assets
Funded debt
Funded debt 6 )ong term loans :Debentures > Mortgage loans;

Ta1le @3 Fixed assets to funded debt ratio of 9hittoor co"operative sugars
limited for the years %77%"7& to %77B"7C.
OKA5 F/PKD A==KT= F0<DKD DK,T 5AT/2
%77%"7& ,@@,B,B& %C,7E,',B%E 7.'&
%77&"7' ,@@,B,B& %&,7%,7E,7E 7.@
%77'"7@ ,@E,@@,C %B,CH,B',H% 7.'%
%77@"7B ,H&,&B,HCC %E,@&,%,'C& 7.'
%77B"7C ,H&,H,EHE &7,HC,7@,HB 7.'
Sor&e 3 T'e P1lis'ed Bala!&e s'eet of C%C%S%Li-ited
INTERPRETATION
This ratio is 7.'& in the year %77%"7& and it is increased in
the next year and reached to 7.@7. The ratio is decreased in the last t(o years
and reaching lo(est of 7.' in the year %77B"7C.This ratio may decrease because
of increase in the funded debt.
FIXED ASSETS TO TOTAL CURRENT ASSETS RATIO
The ratio measures the relationship bet(een the Fixed
Assets and 9urrent assets. The ratio can be calculated as follo(s.

6 Total Fixed Assets
Total current assets
Ta1le ?3 Fixed assets to current assets ratio of 9hittoor co"operative sugars
limited for the years %77%"7& to %77B"7C.
OKA5 F/PKD A==KT= 9055K<T
A==KT=
5AT/2
%77%"7& ,@@,B,B& ,H',77,EBH B.%
%77&"7' ,@@,B,B& %,HH,@B,B@@ '
%77'"7@ ,@E,@@,C &,7,H@,'@' &.C
%77@"7B ,H&,&B,HCC &,&B,'7,@H' &.@
%77B"7C ,H&,H,EHE &,@,'7,@H' &.'
Sor&e 3 T'e P1lis'ed Bala!&e s'eet of C%C%S%Li-ited
INTERPRETATION
The ratio is B.% in the year %77%"7& and it is continuously
decreased for next four years and reached to lo(est of &.' in the year %77B"7C.
FIXED ASSETS TO TOTAL CAPITAL RATIO
The ratio measures the relationship bet(een Fixed Assets and
Total 9apital. The ratio can be calculated as follo(s.

6 Total Fixed Assets
Total 9apital
Total 9apital 6 =hare capital > 5eserves > )oans > ,onds
Ta1le A3 Fixed Assets to Total capital ratio of 9hittoor co"operative sugars
limited for the years %77%"7& to %77B"7C.
OKA5 F/PKD A==KT= T2TA)
9A4/TA)
5AT/2
%77%"7& ,@@,B,B& B&,%,&7,@B 7.H
%77&"7' ,@@,B,B& B%,HC,7E,C& 7.H
%77'"7@ ,@E,@@,C B',&H,C&,'B' 7.C
%77@"7B ,H&,&B,HCC BB,E',%%,7C 7.C
%77B"7C ,H&,H,EHE BH,@,B',@7 7.C
Sor&e 3 T'e P1lis'ed Bala!&e s'eet of C%C%S%Li-ited
INTERPRETATION
This ratio may be better up to 7.@7.,ut in all the @ years it
is belo( 7.@7./n The first t(o years the ratio is 7.H and it is decreased to 7.C
in the last t(o years (hich indicates the less ac#uisition of fixed assets.
FIXED ASSETS TO 7ORBIN2 CAPITAL RATIO
The ratio measures the relationship bet(een the
Fixed Assets and <et (or*ing capital. The ratio can be calculated as follo(s.
6 Total Fixed Assets
<et (or*ing capital
<et (or*ing capital 6 9urrent Assets" 9urrent )iability

Ta1le C3 Fixed assets to <et(or*ing capital ratio of 9hittoor co"operative
sugars limited for the year %77%"7& to %77B"7C.
OKA5 F/PKD A==KT= W25J/<L
9A4/TA)
5AT/2
%77%"7& ,@@,B,B& ,%&,7B,'E E.&
%77&"7' ,@@,B,B& CB,B@,EB @
%77'"7@ ,@E,@@,C C',&',B'% @.@
%77@"7B ,H&,&B,HCC BH,H@,%' C.
%77B"7C ,H&,H,EHE B&,H&,'7@ H.@
INTERPRETATON
The ratio is .3 in the year 2002!03 and it is increased to 15 in
the year 2003!0".The ratio will be increased in the next three years and reached the
hi#hest of 1$.5 in the year 200%!0&.
FINDIN2S
/n the overall evaluation of the Fixed Assets Management at each and every aspect,
the follo(ing findings are8
. Fixed Assets 5atio of the 9hittoor 9o"operative =ugar )td is above the =tandard level
in all the @ years from %77%"7& To %77B"7C (hich indicates the good Financial 4olicy.
%. Fixed Assets to <et (orth 5atio of the 9hittoor operative =ugars )td is less then 77F
(hich indicates the 2(ners funds are sufficient to Finance Fixed Assets.
&. Fixed Assets Turnover 5atio of the 9hittoor 9o"operative =ugars )td is highest .C in
the year %77%"7&, (hich the management is efficient in utili+ing the Fixed Assets.
'. Fixed Assets of the 9hittoor 9o"operative =ugars )td is increase in the years%77%,
%77& and %77C.
@. The company sales have been decreased in all the year.
B. The 5eserves and =urplus is al(ays accumulating every year. The company can
capitali+e the reserves and =urplus.

SU22ESTIONS
. The company can utili+e the reserves and surplus by either capitali+ing or can invest
the money some (here as investment to get benefit.
%. The company can also increase the share holders fund to Finance Fixed Assets.
&. The company can also improve the good financial policy.
'. They can also improve the effective utili+ation of Fixed Assets to in crease sales.
T!K 9!/TT225 92"24K5AT/.K =0LA5= )/M/TKD,9!/TT225
452F25MA 2F ,A)A<9K =!KKT A= 2< &"&"%77C
)/A,/)/T/K= AM20<T= A==KT= AM20<T=
.=hare 9apital
% Deposits and ,orro(ings
a. Deposits
b. ,orro(ings
&. 2utstanding interest
'. Ad-usting heads due by
'%&B77
&@%7HHC.7
'7@C7%'%%.CB
'BE%H&7.B'
%%EC%E7'.H%
&. 9ash on !and
'. ,alance (ith ban*s
a. 9urrent account
b. =avings account
@. =hare in other 9o ?
operative institutions
E@7H%.EH
&&H7%B@.EH
''BE&C.'&
%%H@@7.77
@. 5eserves
B. 0.D.4
C. Audit Fund
H. 5eserve fund yet to be
invested
%BH77BH&@.7
B'%%B.HH
EBE@.@C
%'C7%.BE
B%HC%&@&&.&%
' Deposits (ith agencies
@ F.D.(ith ban*s
B )oans and advances
C )oans to other facters
H Ad-"head due to
E /nterst receivable
7. .alue of assets
.5evaluation of assets
% .alue of closing stoc*
a.=tores stoc*
b. 4ac*ing material
c. =tationery
d. =ugar
e. =ugar in process
f. Molasses
g. Molasses in process
h.4esticides
i.Fertilisers
-. FM4.ra(material G
feed
&. Deficits
%BC%%@.CC
%@7777.77
&C'HC&.77
777777.77
C@@'77&.&&
H%B'HH.@C
&EE%C&%.B'
E@E&7%C.C&
E''%7B.'
'C7BEB.@7
'7@&%.77
%'BC%HE.
B%EH'B7.E%
BBE77%.HE
H7@EB.B
%7@E'7.77
%7'C'.%7

'CE'&.@%
B%HC%@&&.&%
T!K 9!/TT225 92"24K5AT/.K =0LA5= )/M/TKD,9!/TT225
452F25MA 2F ,A)A<9K =!KKT A= 2< &"&"%77B
)/A,/)/T/K= AM20<T= A==KT= AM20<T=
.=hare 9apital
% Deposits and ,orro(ings
a . Deposits
b. ,orro(ings
&. 2utstanding interest
'. Ad-usting heads due by
@. 5eserves
B. 0.D.4
C. Audit Fund
H. 5eserve fund yet to be
invested
'%BC77
&'%C@H.C%
'7'&'7H7B.%
'E7%'EHH.E7
@'HB77CH.%E
%&BCCC&@.&%
B'%%B.HH
EBE@.@C
%'C7%.BE
B&HC'%E.B@
B. 9ash on !and
C. ,alance (ith ban*s
c. 9urrent account
d. =avings account
H. =hare in other 9o ?
operative institutions
' Deposits (ith agencies
@ F.D.(ith ban*s
B )oans and advances
C )oans to other facters
H Ad-"head due to
E /nterst receivable
7. .alue of assets
.5evaluation of assets
% .alue of closing stoc*
a.=tores stoc*
b. 4ac*ing material
c. =tationery
d. =ugar
e. =ugar in process
f. Molasses
g. Molasses in process
h. FM4.ra(material G
feed
&. Deficits
'%H.H7
&77C@.%&
C%HE''.H&
%%H@@7.77
%BC%%@.CC
%@7777.77
E7HHB&'.'
777777.77
B%%CB&&H.'%
H%B'HH.@C
%EBCH.%%
E@E&7%C.C&
E7%%C'.@
C'@@%@.E@
%H7HE.77
%BCC'B%@C.@
H%E&'EC.'&
H%%%7%H.C&
&7%B&.'@
%7'C'.%7
'CE'&.@%
B&HC'%E.B@
"
T!K 9!/TT225 92"24K5AT/.K =0LA5= )/M/TKD,9!/TT225
452F25MA 2F ,A)A<9K =!KKT A= 2< &"&"%77@
.=hare 9apital
% Deposits and ,orro(ings
a . Deposits
b. ,orro(ings
&. 2utstanding interest
'. Ad-usting heads due by
@. 5eserves
B. 0.D.4
C. Audit Fund
H. 5eserve fund yet to be
invested
'7EB'77
%E%&HHHB.B@
%BB7C&@HC.E@
'7@%@CEH.'7
7C&&'&H.H'
%&%EH%H''.@@
B'%%B.HH
EBE@.@C
%'C7%.BE
'%B&BCEEE.'%
9ash on !and
% ,alance (ith ban*s
a 9urrent account
b =avings account
& =hare in other 9o ?
operative institutions
' Deposits (ith agencies
@ F.D.(ith ban*s
B )oans and advances
C )oans to other facters
H Ad-"head due to
E /nterst receivable
7. .alue of assets
.5evaluation of assets
% .alue of closing stoc*
a.=tores stoc*
b. 4ac*ing material
c. =tationery
d. =ugar
e. =ugar in process
f. Molasses
g. Molasses in process
h. FM4.ra(material G
feed
&. Deficits
HCHE&.7B
HB'H%.BC
EEC@HCC.H%
%%H@@7.77
%C%%@.CC
%C@777.77
B@'@&&.E'
777777.77
@CBB'@H.CC
H%B'HH.@C
%BB'C@7E.%%
E@E&7%C.C&
%77'7&H.B'
@&%&B.''
'&''E.@
CE7@@E''.@%
%B&E''B.B
7EH%@&E.%&
""""""""""
%7'C'.%7
'CE'&.@%
'%B&BCEEE.'%
"
T!K 9!/TT225 92"24K5AT/.K =0LA5= )/M/TKD,9!/TT225
452F25MA 2F T5AD/<L A9920<T F25 T!K OKA5 %77B"7C
Dr 9r
4articulars Amount 4articulars Amount
. 2pening =toc*
a. =ugar
b. Molasses
c. 4esticides
%. Kxpenditure
&.9ost of 4roduction
'. 4esticides purchase

%BC'@ECE%.H7
C@'%'7.CC
B'H7.77
%BBCB7&7.%7
&H7EC'@H.&7
&&7C&B7.77
BHBC&B%.7C
. 9losing =toc*
a. =ugar
b. Molasses
c. Fertili+ers
%. =ales
&. Misc./ncome
%'BC%HE.
BBE77%.HE
%7@E'7.77
&BHH@&@BB.HE
%B7EHCE@.@7
&CBH%CBC.BH
BHBC&B%.7C
T!K 9!/TT225 92"24K5AT/.K =0LA5= )/M/TKD,9!/TT225
452F25MA 2F 452F/T A<D )2== F25 T!K OKA5 %77@"7B
Dr 9r
)oss Amount 4rofit Amount
. /nterest paid
%. Kxpenditure
&. )ast year )oss
'. Lross loss
&EH'7''7.BB
CECH.H
'7@&7&E'.E
&CBH%CBC.BH
@777%&@H@.7B
. /nterest 5eceived
%. Miscelleneous /ncome
&. <et loss
%B%B@.%'
7@B%CB.CB
'EHE'7'&.7B
@777%&@H@.7B
BIBLIO2RAPH5
/.M.4andey, AFinancial ManagementI, vi*as publishing house, <e(
Delhi, ECE.
K...5amanamoorthy, Wor*ing capital Management, /nstitute for financial
management and research, 9hennai, ECB.
Dohn D.!ampton, Financial Decision Ma*ing, 5eston publishing company,
Mumbai,ECB.
=.9.Juchol, Financial Management, 9hitanya publishing house ECC.