A STUDY ON

RATIO ANALYSIS AT
AMARARAJA BATTERIES LIMITED (ARBL)

A PROJECT REPORT

Submitted in partial fulfillment of the

requirement for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the Guidance of

S.SUJATHA M.B.A., M.Phil
ASSISTANT PROFESSOR OF MANAGEMENT STUDIES
SRM UNIVERSITY

By
SUNEEL.R
(Reg.No.35080623)

DEPARTMENT OF BUSINESS ADMINISTRATION

SRM UNIVERSITY
YEAR-2010

SCHOOL OF MANAGEMENT
Page 1
SRM UNIVERSITY




Page 2

SRM Nagar, Kattankulathur-603203
Phone: 044-27452270, 27417777, Fax: 044-27453903
E-hod@mba.srmuniv.ac.in, website:www.srmuniv.ac.in
________________________________________________________________________


BONAFIDE CERTIFICATE

Certified that this project report titled A STUDY ON RATIO ANALYSIS AT
AMARARAJA BATTERIES LIMITED is the bonafide work of Mr.R.SUNEEL who carried
out the research under my supervision.

Certified further, that to the best of my knowledge the work reported here in does not form
part of any other Project report or dissertation on the basis of which a degree or award was
conferred on an earlier occasion on this or any other candidate.





Signature of the supervisor Signature of the HOD

DECLARATION

Page S

I hereby declare that the Project Report entitled A STUDY ON RATIO
ANALYSIS AT AMARARAJA BATTERIES LIMITED(ARBL) is a record of independent
research work submitted by me to SRM University, Chennai, for developing the real time
experience as well as award the degree of Master of Business Administration and has been carried
out during the period of my study at SRM UNIVERSITY, Chennai, Under the guidance of
S.SUJATHA, Department of MBA.





PLACE: Chennai (R.SUNEEL)

ACKNOWLEDGEMENT

I would like to express deepest gratitude and thanks to the Dr.JAYASREE SURESH, Head of
the Department for her valuable support in doing this project. She has been a source of
encouragement and guidance in all our endeavors.



Page 4

I would like to sincerely acknowledge thanks to Sri C.Ramachandra raju, Finance
Manager of Amararaja Batteries limited, Mr.C.Ravi Costing Manager of Amararaja Batteries
Limited for their moral support during the research work.
I express our profound thanks to S.SUJATHA project guide, for her consistent
encouragement and invaluable suggestion in completing this project, without his effort the
completion of this project would be practically impossible.

It gives me great pleasure to acknowledge my indebtedness to my family Members for
their substantial moral support and encouragement in my studies.

I would like to extend my sincere thanks to My Dearest Friends and also my classmates
for their unnerving support in the completion of the work.

( R. SUNEEL)

TABLEOFCONTENTS

Chapters TitleandTopics PageNo

1 INTRODUCTION
Introduction

12

2
OBJECTIVES&METHODOLOGY
Needofstudy
Scopeofstudy

4
5



Page S

Objectivesofstudy
ReviewofLiterature
ResearchMethodology
Limitationsofstudy
6
719
20
21
3 COMPANYPROFILE

2229
4 DATAANALYSISANDINTERPRETATION
3060
5 FINDINGS&SUGGESTIONS
Findings
Suggestions
Conclusion

62
63
64

6
Annexure
BIBLOGRAPHY
6571
72

LISTOFTABLES
SI .NO PARTCULARS PAGE.NO
1
2
3
4
5
6
7
8
9
CURRENT RATIO
QUICK RATIO
CASH RATIO
NETWORKING CAPITAL RATIO
DEBT RATIO
DEBT EQUITY RATIO
INTEREST COVERAGE RATIO
TOTAL LIABILITIES RATIO
INVENTORY TURNOVER RATIO
31
33
35
36
37
39
41
42
43



Page 6

10
11
12
13
14
15
16
17
18
19
20
21
22
DEBTORS TURNOVER RATIO
FIXED ASSET TURNOVER RATIO
CURRENT ASSET TURNOVER RATIO
TOTAL ASSET TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO
NET ASSET TURNOVER RATIO
CAPITAL TURNOVER RATIO
CREDITOR TURNOVER RATIO
GROSS PROFIT
NET PROFIT
OPERITING EXPENCES RATIO
RETURN ON INVESTMENT
RETURN ON EQUITY SHARE HOLDER FUND
45
46
48
49
50
51
52
53
54
56
57
59
60

LISTOFCHARTS
SI .NO PARTCULARS PAGE.NO
1
2
3
4
5
6
7
8
9
10
11
12
CURRENT RATIO
QUICK RATIO
CASH RATIO
NETWORKING CAPITAL RATIO
DEBT RATIO
DEBT EQUITY RATIO
INTEREST COVERAGE RATIO
TOTAL LIABILITIES RATIO
INVENTORY TURNOVER RATIO
DEBTORS TURNOVER RATIO
FIXED ASSET TURNOVER RATIO
CURRENT ASSET TURNOVER RATIO
32
34
35
36
38
40
41
42
44
45
47
48



13
14
15
16
17
18
19
20
21
22
TOTAL ASSET TURNOVER RATIO
WORKING CAPITAL TURNOVER RATIO
NET ASSET TURNOVER RATIO
CAPITAL TURNOVER RATIO
CREDITOR TURNOVER RATIO
GROSS PROFIT
NET PROFIT
OPERITING EXPENCES RATIO
RETURN ON INVESTMENT
RETURN ON EQUITY SHARE HOLDER FUND
49
50
51
52
53
55
56
58
59
60

Page 7

INTRODUCTION
ABOUTRATIOANALYSIS
The ratio analysis is the most powerful tool of financial analysis. Several ratios calculated
from the accounting data can be grouped into various classes according to financial activity or
function to be evaluated.
DEFINITION:
The indicate quotient of two mathematical expressions and as The relationship
between two or more things. It evaluates the financial position and performance of the firm.
As started in the beginning many diverse groups of people are interested in analyzing
financial information to indicate the operating and financial efficiency and growth of firm. These
people use ratios to determine those financial characteristics of firm in which they interested with
the help of ratios one can determine.
Page 8
The ability of the firm to meet its current obligations.

INTRODUCTION



The extent to which the firm has used its long-term solvency by borrowing funds.
The efficiency with which the firm is utilizing its assets in generating the sales revenue.
The overall operating efficiency and performance of firm.
The information contained in these statements is used by management, creditors,
investors and others to form judgment about the operating performance and financial
position of firm. Uses of financial statement can get further insight about financial strength
and weakness of the firm if they properly analyze information reported in these statements.
Management should be particularly interested in knowing financial strength of the firm to
make their best use and to be able to spot out financial weaknesses of the firm to take
suitable corrective actions. The further plans firm should be laid down in new of the firms
financial strength and weaknesses. Thus financial analysis is the starting point for making
plans before using any sophisticated forecasting and planning procedures. Understanding the
past is a prerequisite for anticipating the future.

Page 9

Need of study
Scope of study
Objectives



Page 1u

NEED OF THE STUDY

The prevalent educational system providing the placement training at an industry being a
part of the curriculum has helped in comparison of theoretical knowledge with practical system. It
has led to note the convergences and divergence between theory and practice.

The study enables us to have access to various facts of the organization. It helps in
understanding the needs for the importance and advantage of materials in the organization, the
study also helps to exposure our minds to the integrated materials management the various
procedures, methods and technique adopted by the organization. The study provides knowledge
about how the theoretical aspects are put in the organization in terms of described below

To pay wages and salaries.
For the purchase of raw materials, spares and components parts.
To incur day-to-day expenses.
To meet selling costs such as packing, advertising.
To provide credit facilities to customers.
To maintain inventories and raw materials, work-in-progress and finished stock.

Page 11

Scopeofthestudy

The scope of the study is limited to collecting financial data published in the annual
reports of the company every year. The analysis is done to suggest the possible solutions. The
study is carried out for 4 years (2006 10).
Using the ratio analysis, firms past, present and future performance can be analyzed and
this study has been divided as short term analysis and long term analysis. The firm should
generate enough profits not only to meet the expectations of owner, but also to expansion
activities.

Page 12

OBJECTIVESOFSTUDY

1. To study and analyze the financial position of the Company through ratio analysis.
2. To suggest measures for improving the financial performance of organization.
3. To analyze the profitability position of the company.
4. To assess the return on investment.
5. To analyze the asset turnover ratio.
6. To determine the solvency position of company.
7. To suggest measures for effective and efficient usage of inventory.

Page 1S

REVIEWOFLITERATURE

FINANCIALANALYSIS
Financial analysis is the process of identifying the financial strengths and weakness of the firm.
It is done by establishing relationships between the items of financial statements viz., balance
sheet and profit and loss account. Financial analysis can be undertaken by management of the firm,
viz., owners, creditors, investors and others.
Objectivesofthefinancialanalysis

Analysis of financial statements may be made for a particular purpose in view.

1. To find out the financial stability and soundness of the business enterprise.
2. To assess and evaluate the earning capacity of the business
3. To estimate and evaluate the fixed assets, stock etc., of the concern.
4. To estimate and determine the possibilities of future growth of business.
5. To assess and evaluate the firms capacity and ability to repay short and long term loans
Partiesinterestedinfinancialanalysis
The users of financial analysis can be divided into two broad groups.
Internalusers
1. Financial executives
2. Top management
Externalusers
1. Investors
2. Creditor.
3. Workers
4. Customers
5. Government
6. Public
7. Researchers

Page 14

Significanceoffinancialanalysis
Financial analysis serves the following purpose:
Toknowtheoperationalefficiencyofthebusiness:
The financial analysis enables the management to find out the overall efficiency of the firm. This will
enable the management to locate the weak Spots of the business and take necessary remedial action.
Helpfulinmeasuringthesolvencyofthefirm:
The financial analysis helps the decision makers in taking appropriate decisions for strengthening the
short-term as well as long-term solvency of the firm.

Comparisonofpastandpresentresults:
Financial statements of the previous years can be compared and the trend regarding various
expenses, purchases, sales, gross profit and net profit can be ascertained.

Helpsinmeasuringtheprofitability:

Financial statements show the gross profit, & net profit.
Interfirmcomparison:
The financial analysis makes it easy to make inter-firm comparison. This comparison can also be made for
various time periods.

BankruptcyandFailure:
Financial statement analysis is significant tool in predicting the bankruptcy and the failure of the business
enterprise. Financial statement analysis accomplishes this through the evaluation of the solvency position.

Helpsinforecasting:

The financial analysis will help in assessing future development by making forecasts and preparing
budgets.

Page 1S

METHODSOFANALYSIS:
A financial analyst can adopt the following tools for analysis of the financial statements. These are
also termed as methods of financial analysis.
A. Comparative statement analysis
B. Common-size statement analysis
C. Trend analysis
D. Funds flow analysis
E. Ratio analysis
NATUREOFRATIOANALYSIS
Ratio Analysis is a powerful tool of financial analysis. A ratio is defined as "the indicated quotient
of mathematical expression" and as "the relationship between two or more things". A ratio is used as
benchmark for evaluating the financial position and performance of the firm. The relationship between
two accounting figures, expressed mathematically, is known as a financial ratio. Ratio helps to
summarizes large quantities of financial data and to make qualitative judgment about the firm's financial
performance.
The persons interested in the analysis of financial statements can be grouped under three head
owners (or) investors who are desired primarily a basis for estimating earning capacity. Creditors who are
concerned primarily with Liquidity and ability to pay interest and redeem loan within a specified period.
Management is interested in evolving analytical tools that will measure costs, efficiency, liquidity and
profitability with a view to make intelligent decisions.
STANDARDSOFCOMPARISON
The ratio analysis involves comparison for an useful interpretation of the financial statements. A
single ratio in itself does not indicate favorable or unfavorable condition. It should be compared with
some standard. Standards of comparison are:
1. Past Ratios
2. Competitor's Ratios
3. Industry Ratios
4. Projected Ratios



Page 16

PastRatios:Ratios calculated from the past financial statements of the same firm.
Competitor'sRatios: Ratios of some selected firms, especially the most progressive and successful
competitor at the same point in time.
IndustryRatios:Ratios of the industry to which the firm belongs.
ProjectedRatios:Ratios developed using the projected financial statements of the same firm.

TIMESERIESANALYSIS
The easiest way to evaluate the performance of a firm is to compare its present ratios with past
ratios. When financial ratios over a period of time are compared, it is known as the time series analysis or
trend analysis. It gives an indication of the direction of change and reflects whether the firm's financial
performance has improved, deteriorated or remind constant over time.
CROSSSECTIONALANALYSIS
Another way to comparison is to compare ratios of one firm with some selected firms in the
industry at the same point in time. This kind of comparison is known as the cross-sectional analysis. It is
more useful to compare the firm's ratios with ratios of a few carefully selected competitors, who have
similar operations.
INDUSTRYANALYSIS
To determine the financial conditions and performance of a firm. Its ratio may be compared with
average ratios of the industry of which the firm is a member. This type of analysis is known as industry
analysis and also it helps to ascertain the financial standing and capability of the firm & other firms in the
industry. Industry ratios are important standards in view of the fact that each industry has its
characteristics which influence the financial and operating relationships.

TYPESOFRATIOS
Management is interested in evaluating every aspect of firm's performance. In view of the requirement of
the various users of ratios, we may classify them into following four important categories:
1. Liquidity Ratio
2. Leverage Ratio
3. Activity Ratio
4. Profitability Ratio

3.1LiquidityRatio
It is essential for a firm to be able to meet its obligations as they become due. Liquidity Ratios
help in establishing a relationship between cast and other current assets to current obligations to provide a
quick measure of liquidity. A firm should ensure that it does not suffer from lack of liquidity and also that
it does not have excess liquidity. A very high degree of liquidity is also bad, idle assets earn nothing. The
firm's funds will be unnecessarily tied up in current assets. Therefore it is necessary to strike a proper
balance between high liquidity. Liquidity ratios can be divided into three types:
3.1.1 Current Ratio
3.1.2 Quick Ratio
3.1.3 Cash Ratio
3.1.1CurrentRatio
Current ratio is an acceptable measure of firms short-term solvency Current assets includes cash
within a year, such as marketable securities, debtors and inventors. Prepaid expenses are also included in
current assets as they represent the payments that will not made by the firm in future. All obligations
maturing within a year are included in current liabilities. These include creditors, bills payable, accrued
expenses, short-term bank loan, income-tax liability in the current year.
The current ratio is a measure of the firm's short term solvency. It indicated the availability of
current assets in rupees for every one rupee of current liability. A current ratio of 2:1 is considered
satisfactory. The higher the current ratio, the greater the margin of safety; the larger the amount of current
assets in relation to current liabilities, the more the firm's ability to meet its obligations. It is a cured -and
-quick measure of the firm's liquidity.
Current ratio is calculated by dividing current assets and current liabilities.

3.1.2QuickRatio
Quick Ratio establishes a relationship between quick or liquid assets and current liabilities. An
asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value.
Cash is the most liquid asset, other assets that are considered to be relatively liquid asset and included in
quick assets are debtors and bills receivables and marketable securities (temporary quoted investments).
Page 17

Current Assets
Current Ratio = ________________
Current Liabilities



Inventories are converted to be liquid. Inventories normally require some time for realizing into
cash; their value also has a tendency to fluctuate. The quick ratio is found out by dividing quick assets by
current liabilities.

Generally, a quick ratio of 1:1 is considered to represent a satisfactory current financial condition.
Quick ratio is a more penetrating test of liquidity than the current ratio, yet it should be used cautiously. A
company with a high value of quick ratio can suffer from the shortage of funds if it has slow- paying,
doubtful and long duration outstanding debtors. A low quick ratio may really be prospering and paying its
current obligation in time.

3.1.3CashRatio
Cash is the most liquid asset; a financial analyst may examine Cash Ratio and its equivalent
current liabilities. Cash and Bank balances and short-term marketable securities are the most liquid assets
of a firm, financial analyst stays look at cash ratio. Trade investment is marketable securities of equivalent
of cash. If the company carries a small amount of cash, there is nothing to be worried about the lack of
cash if the company has reserves borrowing power. Cash Ratio is perhaps the most stringent Measure of
liquidity. Indeed, one can argue that it is overly stringent. Lack of immediate cash may not matter if the
firm stretch its payments or borrow money at short notice.

3.2LEVERAGERATIOS
Financial leverage refers to the use of debt finance while debt capital is a cheaper source of
finance: it is also a riskier source of finance. It helps in assessing the risk arising from the use of debt
capital. Two types of ratios are commonly used to analyze financial leverage.
1. Structural Ratios &
Page 18
2. Coverage ratios.

Current assets - Inventories
Quick Ratio = _________________________
Current Liabilities
Cash and bank balances + Current Investment
Cash Ratio= --------------------------------------------------------------------
Current Liabilities




Structural Ratios are based on the proportions of debt and equity in the financial structure of firm.
Coverage Ratios shows the relationship between Debt Servicing, Commitments and the sources
for meeting these burdens.
The short-term creditors like bankers and suppliers of raw material are more concerned with the
firm's current debt-paying ability. On the other hand, long-term creditors like debenture holders, financial
institutions are more concerned with the firm's long-term financial strength. To judge the long-term
financial position of firm, financial leverage ratios are calculated. These ratios indicated mix of funds
provided by owners and lenders.
There should be an appropriate mix of Debt and owner's equity in financing the firm's assets. The
process of magnifying the shareholder's return through the use of Debt is called "financial leverage" or
"financial gearing" or "trading on equity". Leverage Ratios are calculated to measure the financial risk
and the firm's ability of using Debt to share holder's advantage.

Leverage Ratios can be divided into five types.

3.2.1 Debt equity ratio.
3.2.2 Debt ratio.
3.2.3 Interest coverage ratio
3.2.4 Proprietary ratio.
3.2.5 Capital gearing ratio
3.2.1Debtequityratio
It indicates the relationship describing the lenders contribution for each rupee of the owner's
contribution is called debt-equity ratio. Debt equity ratio is directly computed by dividing total debt by
net worth. Lower the debt-equity ratio, higher the degree of protection. A debt-equity ratio of 2:1 is
considered ideal. The debt consists of all short term as well as long-term and equity consists of net worth
plus preference capital plus Deferred Tax Liability.

Page 19

Long term Debts
Debt Equity Ratio = ----------------------
Share holder funds (Equities)

3.2.2Debtratio
Several debt ratios may used to analyze the long-term solvency of a firm. The firm may be
interested in knowing the proportion of the interest-bearing debt in the capital structure. It may, therefore,
compute debt ratio by dividing total total debt by capital employed on net assets. Total debt will include
short and long-term borrowings from financial institutions, debentures/bonds, deferred payment
arrangements for buying equipments, bank borrowings, public deposits and any other interest-bearing
loan. Capital employed will include total debt net worth.

3.2.3InterestCoverageRatio
The interest coverage ratio or the time interest earned is used to test the firms debt servicing
capacity. The interest coverage ratio is computed by dividing earnings before interest and taxes by interest
charges. The interest coverage ratio shows the number of times the interest charges are covered by funds
that are ordinarily available for their payment. We can calculate the interest average ratio as earnings
before depreciation, interest and taxes divided by interest.

3.2.4Proprietaryratio
The total shareholder's fund is compared with the total tangible assets of the company. This ratio
indicates the general financial strength of concern. It is a test of the soundness of financial structure of the
concern. The ratio is of great significance to creditors since it enables them to find out the proportion of
share holders funds in the total investment of business.

Page 2u

Debt
Debt Ratio = ----------
Equity
EBIT
Interest Coverage ratio = ---------------
Interest
Net worth
Proprietary Ratio = -------------------------------------- x 100
Total tangible assets



3.2.5Capitalgearingratio:
This ratio makes an analysis of capital structure of firm. The ratio shows relationship between
equity share capital and the fixed cost bearing i.e., preference share capital and debentures.

3.3ACTIVITYRATIOS
Turnover ratios also referred to as activity ratios or asset management ratios, measure how
efficiently the assets are employed by a firm. These ratios are based on the relationship between the level
of activity, represented by sales or cost of goods sold and levels of various assets. The improvement
turnover ratios are inventory turnover, average collection period, receivable turn over, fixed assets
turnover and total assets turnover.
Activity ratios are employed to evaluate the efficiency with which the firm manages and utilize its assets.
These ratios are also called turnover ratios because they indicate the speed with which assets are being
converted or turned over into sales. Activity ratios thus involve a relationship between sales and assets. A
proper balance between sales and assets generally reflects that asset utilization.
Activityratiosaredividedintofourtypes:
3.3.1 Total capital turnover ratio
3.3.2 Working capital turnover ratio
3.3.3 Fixed assets turnover ratio
3.3.4 Stock turnover ratio
3.3.1Totalcapitalturnoverratio:This ratio expresses relationship between the amounts invested
in this assets and the resulting in terms of sales. This is calculated by dividing the net sales by total sales.
The higher ratio means better utilization and vice-versa.
Some analysts like to compute the total assets turnover in addition to or instead of net assets
turnover. This ratio shows the firm's ability in generating sales from all financial resources committed to
total assets.

Page 21

Equity capital
Capital gearing ratio = -----------------------------------------------
P.S capital +Debentures +Loans
Sales
Total assets turnover = ----------------------------
Capital employed.



3.3.2 Working capital turnover ratio: This ratio measures the relationship between working
capital and sales. The ratio shows the number of times the working capital results in sales. Working
capital as usual is the excess of current assets over current liabilities. The following formula is used to
measure the ratio:

3.3.3 Fixed asset turnover ratio: The firm may which to know its efficiency of utilizing fixed
assets and current assets separately. The use of depreciated value of fixed assets in computing the fixed
assets turnover may render comparison of firm's performance over period or with other firms.
The ratio is supposed to measure the efficiency with which fixed assets employed a high ratio
indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient use of assets.
However, in interpreting this ratio, one caution should be borne in mind, when the fixed assets of firm are
old and substantially depreciated, the fixed assets turnover ratio tends to be high because the denominator
of ratio is very low

3.3.4Stockturnoverratio
Stock turnover ratio indicates the efficiency of firm in producing and selling its product. It is
calculated by dividing the cost of goods sold by the average stock. It measures how fast the inventory is
moving through the firm and generating sales.
The stock turnover ratio reflects the efficiency of inventory management. The higher the ratio,
the more efficient the management of inventories and vice versa .However, this may not always be true.
A high inventory turnover may be caused by a low level of inventory which may result if frequent stock
outs and loss of sales and customer goodwill.

Page 22

Sales
Working capital turnover ratio = -------------------------------
Working capital
Net sales
Fixed asset turnover ratio = -------------------------
Fixed assets
Cost of goods sold
Stock turnover ratio = ------------------------------
Average stock
Opening stock + Closing stock
Average stock = --------------------------------------------
2




Page 2S

3.4PROFITABILITYRATIOS
A company should earn profits to survive and grow over a long period of time. Profits are
essential but it would be wrong to assume that every action initiated by management of a company should
be aimed at maximizing profits. Profit is the difference between revenues and expenses over a period of
time.
Profit is the ultimate 'output' of a company and it will have no future if it fails to make sufficient
profits. The financial manager should continuously evaluate the efficiency of company in terms of profits.
The profitability ratios are calculated to measure the operating efficiency of company. Creditors want to
get interest and repayment of principal regularly. Owners want to get a required rate of return on their
investment.
Generally, two major types of profitability ratios are calculated:
Profitability in relation to sales
Profitability in relation to investment

ProfitabilityRatioscanbedividedintosixtypes:
3.4.1 Gross profit ratio
3.4.2 Operating profit ratio
3.4.3 Net profit ratio
3.4.4 Return on investment
3.4.5 Earns per share
3.4.6 Operating expenses ratio
3.4.1Grossprofitratio
First profitability ratio in relation to sales is the gross profit margin the gross profit margin
reflects.
The efficiency with which management produces each unit of product. This ratio indicates the
average spread between the cost of goods sold and the sales revenue. A high gross profit margin is a sign
of good management. A gross margin ratio may increase due to any of following factors: higher sales
prices cost of goods sold remaining constant, lower cost of goods sold, sales prices remaining constant. A
low gross profit margin may reflect higher cost of goods sold due to firm's inability to purchase raw
materials at favorable terms, inefficient utilization of plant and machinery resulting in higher cost of
production or due to fall in prices in market.



This ratio shows the margin left after meeting manufacturing costs. It measures the efficiency of
production as well as pricing. To analyze the factors underlying the variation in gross profit margin, the
proportion of various elements of cost (Labor, materials and manufacturing overheads) to sale may
studied in detail.

3.4.2Operatingprofitratio
This ratio expresses the relationship between operating profit and sales. It is worked out by
dividing operating profit by net sales. With the help of this ratio, one can judge the managerial efficiency
which may not be reflected in the net profit ratio.

3.4.3Netprofitratio
Net profit is obtained when operating expenses, interest and taxes are subtracted from the gross
profit. Net profit margin ratio established a relationship between net profit and sales and indicates
management's efficiency in manufacturing, administering and selling products.
This ratio also indicates the firm's capacity to withstand adverse economic conditions. A firm with
a high net margin ratio would be in an advantageous position to survive in the face of falling selling
prices, rising costs of production or declining demand for product
This ratio shows the earning left for share holders as a percentage of net sales. It measures
overall efficiency of production, administration, selling, financing. Pricing and tax management. Jointly
considered, the gross and net profit margin ratios provide a valuable understanding of the cost and profit
structure of the firm and enable the analyst to identify the sources of business efficiency / inefficiency.

Page 24

Gross profit
Gross profit ratio = ------------------------x 100
Net sales
Operating profit
Operating profit ratio = ---------------------------x 100
Net sales
Net Profit
Net Profit Ratio = --------------------------- x 100
Net sales



3.4.4Returnoninvestment:This is one of the most important profitability ratios. It indicates the
relation of net profit with capital employed in business. Net profit for calculating return of investment
will mean the net profit before interest, tax, and dividend. Capital employed means long term funds.

3.4.5Earningspershare
This ratio is computed by earning available to equity share holders by the total amount of equity
share outstanding. It reveals the amount of period earnings after taxes which occur to each equity share.
This ratio is an important index because it indicates whether the wealth of each share holder on a per
share basis as changed over the period.

3.4.6Operatingexpensesratio
It explains the changes in the profit margin ratio. A higher operating expenses ratio is unfavorable
since it will leave a small amount of operating income to meet interest, dividends. Operating expenses
ratio is a yardstick of operating efficiency, but it should be used cautiously. It is affected by a number of
factors such as external uncontrollable factors, internal factors. This ratio is computed by dividing
operating expenses by sales. Operating expenses equal cost of goods sold plus selling expenses and
general administrative expenses by sales.

Page 2S

E.B.I.T
Return on investment = ---------------------------------------- x 100
Capital employed
Net profit
Earnings per share = ------------------------------------ x 100
Number of equity shares
Operating expenses
Operating expenses ratio = ----------------------------- x 100
Sales



Page 26

ResearchMethodology
ResearchDesign
In view of the objects of the study listed above an exploratory research design has been
adopted. Exploratory research is one which is largely interprets and already available information
and it lays particular emphasis on analysis and interpretation of the existing and available
information.
To know the financial status of the company.
To know the credit worthiness of the company.
To offer suggestions based on research finding.

DataCollectionMethods
PrimaryData
Information collected from internal guide and finance manager. Primary data is first hand
information.
SecondaryData
Company balance sheet and profit and loss account. secondary data is second hand
information.
DataCollectionTools
To analyze the data acquire from the secondary sources Ratio AnalysisThe scope of the
study is defined below in terms of concepts adopted and period under focus.
First the study of Ratio Analysis is confined only to the Amarraja Batteries Limited.
Secondly the study is based on the annual reports of the company for a period of 4 years
from 2006-07 to 2009-10 the reason for restricting the study to this period is due time constraint.

LIMITATIONS



Page 27

The study was limited to only four years Financial Data.
The study is purely based on secondary data which were taken primarily from
Published annual reports of Amararaja batteries Ltd.,
There is no set industry standard for comparison and hence the inference is made
on general standards.
The ratio is calculated from past financial statements and these are not indicators of
future.
The study is based on only on the past records.
Non availability of required data to analysis the performance.
The short span of the time provided also one of limitations.

Page 28

Company profile



Page 29

COMPANYPROFILE
Amara Raja Batteries (ARBL) incorporated under the companies Act, 1956 in 13
th

February 1985, and converted into public Limited Company on 6
th
September 1990.
The chairman and Managing Director of the company is Sri Gala Ramachandra Naidu,
ARBL is a first company in India, which manufactures Values regulated Lead Acid (VRLA)
Batteries. The main objectives of the company are a manufacturing of good quality of Sealed
Maintenance Free (SMF) acid batteries. The company is setting up to Rs.1, 920 lakhs plant is in
185 acres in Karakambadi village, Renigunta Mandal. The project site is notified under B
category.
The company has the clear-cut policy of direct selling without any intermediate. So they
have set up six branches and are operated by corporate operations office located in Chennai. The
company has virtual monopoly in higher A.H.(Amp Hour) rating Market its product VRLA . It is
also having the facility for industrial and automotive batteries.
Amara Raja is 5 S Company and its aim are to improve the work place environment by
using 5S techniques which is A systematic and rational approach to workplace organization and
methodical house keeping with a sense of purpose, consisting of the following five elements

CULTURE AND ENVIRONMENT
Amara Raja is putting a number of HRD initiatives to foster a spirit of togetherness and a
culture of meritocracy. Involving employees at all levels in building organizational
support plans and in evolving our vision for the organization.
ARBL encourages initiative and growth of young talent allows the organization to develop
innovation solution and ideas.
Benchmark pollution control measures, energy conversation measures, waste reduction
schemes, massive green belt development programs, employee health monitoring and
industrial safety programs have helped ARBL to take further environment management
program.
Amara Raja has now targeted to secure the ISO 14001 certification.




Page Su

QUALITY POLICY

ARBLs main aim is to achieve customer satisfaction through the collective
commitment of employees in design; manufacture and marketing of reliable power systems,
batteries, allied products and services.

To accomplish above, ARBL focus on

Establishing superior specifications for our products and processes.
Employing state-of-the-art technologies and robust design principles.
Striving for continuous improvements in process and product quality.
Implementing methods and techniques to monitor quality levels.
Providing prompt after sales service.

RESEARCH & DEVELOPMENT
Specific areas in which the company carries out R&D are;
New product development.
Process technology up gradation.
Application engineering for new market place.
Quality improvement.
Benefits derived as a result of above R&D,
Developed 4v/200 AH batteries.
Design optimization of higher AH batteries for DOT application.
Design optimization of batteries 92v/1285 AH for TL/AC-Railway application.
Formation cycle optimization results in reduced duration and rejection.
Chemist curing cycle optimization.
Manufacture of automobile battery for four-wheeler vehicles.




Page S1

FUTURE PLAN OF ACTION
Commercialization of motorcycle batteries.
Development of new range high integrity VRLA cell design.
Establishment of product for new application segment.
Studies on paste additives to enhance the battery performance.
In-depth evaluation of metal surface treatment chemical to reduce the process cycle time.
Validating alternative grades of propylene to conserve energy and to improve productivity.
MILE STONES
YEAR Mile stone
1997 100 crores turnover
1997 ISO-9001 Accreditation
1999 S-9000 Accreditation
2002 SO-14001 Certification

AWARDS
The spirit of Excellence- Awarded by academy of fine arts, Tirupati.
Best Entrepreneur of the year 1998-awarded by Hyderabad Management
Association.
Industrial Economist Business Excellence Award 1991- Awarded by the industrial
Economist, Chennai.
Excellence Award-by institution of economic studies (ES), New Delhi.
Udyog Rattan Award- by institution of economic studies, New Delhi.
QI CERTIFICATE 2002 - By FORD Company




Page S2

AMARA RAJA GROUP OF COMPANIES
AMARA RAJA POWER SYSTEMS PRIVATE Ltd. (ARPSL), Karakambadi,
Tirupati.
MANGAL PRECISION PRODUCTS PRIVATE Ltd1. (MPPL1), Karakambadi,
Tirupati.
MANGAL PRECISION PRODUCTS PRIVATE Ltd2. (MPPL2), Petamitta, Chittoor.
AMARA RAJA ELECTRONICS PRIVATE LIMITED (AREPL), Dighavamgham,
Chittoor.
GALLA FOODS PRIVATE LIMITED (GFPL), Puthalapattu Mandal, Chittoor.
This ratio is calculated by dividing sales in to current assets. This ratio expressed the
number of times current assets are being turn over in stated period. This ratio shows how well
the current assets are being used in business. The higher ratio is showing that better utilization
of the current assets another a low ratio indicated that current assets are not being efficiently
utilized.
INDUSTRIAL BATTERY DIVISION (IBD)
Amara Raja has become the benchmark in the manufacturer of industrial batteries. India is
one of the largest and fastest growth markets for industrial batteries in the world. Amara Raja is
leading in the front, with an 80% market share is stand by VRAL batteries point of view. It is also
having the facility for production plastic components.
ARBL id the first company in India to manufacture VRLA (SMF) Batteries. The initial
investment of the company has Rs.1920 lakhs; the total land is around 18 acres in Karambadi
village, Renigunta Mandal. The project site is notified under B category.
Capacity
The capacity per the year 2005-2006 of IBD is 3, 70,000 cells per annum.
Products
Amara Raja being the first entrant in this industry and has the privilege of pioneering VRLA
technology in India.
Amara Raja has established itself as a reliable supplier of high quality products to major
segments like Telecom, Railways and power.

2. PLATE PREPARATION
Using lead oxide production in earlier stage positive and negative paste is prepared with
addition of sulphuric acid and water. These pastes are applied to respective grids using industrial
fasting machines.



Page SS

3. CALL ASSEMBLY
Here positive and negative grids are separated by a sheet of fibreglass mat bush bars are
welded and as assembled into a jar or container to form battery cells. Then these cells are
assembled according to the customers specification into battery sets or systems.
4. FORMATION
In this process cells are filled with the electrolyte (surphuric acid) and then the set is
charged and discharged repeatedly, after final charging the battery comes out ready to be used.
Competitors
The Major competitors for Amara Raja Batteries are Exude industries Ltd, and GNB.
AUTOMOTIVE BATTERY DIVISION (ABD)
ARBL has inaugurated its new automotive plant at Karakambadi in Tirupati on September
24
th
, 2001. This plan is a part of the most completely integrated battery manufacturing facility in
India with all critical components, including plastics sourced in-house from existing facilities on
site. In this project, Amara Rajas strategic alliance partners Johnson Control Inc., of USA have
closely worked technology and plant engineering. It is also having the facility for producing
plastic components required for automotive batteries.
Capacity
With an existing production capacity of 5 lakhs units of automotive batteries, the new
Greenfield plant will now be able to produce 1 million batteries per annum. This is the first phase
in the enhancement of Amara Rajas production capacity, for this the company has invested Rs.45
crores and the next phase, at an additional cost of Rs.25 crores, for this the production capacity
will be increase to 2 million units and the company has estimated to complete around 3 years,
after that ARBL will become the single largest battery of manufacturer in Asia. The fiscal year
2005-2006s capacity Of ABD is 2.2 million numbers of batteries per year.

Products
The products of ABD are
Amaron Hi-way
Amaron Harvest
Amaron shield
Amaron Highlife
The plastic products of ABD arejars and jar covers.





Page S4

Customers
ARBL has prestigious OEM (Original Equipment Manufacture) clients like FORD,
GENERAL MOTORS, DAEWOO MOTORS, MERCEDES BENZ, DAIMLER CHRYSLER,
MARUTI UDYOG LTD., premier Auto Ltd., and recent acquired a preference supplier alliance
with ASHOK LEYLAND, HINDUSTAN MOTORS, TELCO, MAHINDRA & MAHINDRA and
SWARAJ MAZDA.
COMPETITORS
EXIDE
PRESTOLITE
AMCO.
MAJOR USERS

1. RAILWAYS
Train lighting air conditioning, diesel engine starting, signaling systems, control
systems, emergency breaking systems, and telecommunications.
2. TELECOMMUNICATION
Central office power plants, microwave repeaters station, RAX in public building,
emergency lighting system at airports, fire alarm system etc.,
3. POWER SYSTEMS
Switch gear control systems, powerhouse control systems, rural street lighting etc.
4. UPS SYSTEM
Back up power to computers in progress control systems in industry etc.
5. TRACTION
Forklift trucks, earth moving machinery, mining locomotives and road vehicles etc.

6. PETROCHEMICALS
Offshare and noshore oil exploration lighting systems, security systems etc.
7. DEFENCE
Defence communication, aircraft and helicopter ground starting, stationary and mobile
diesel engine starting etc.







Page SS

PRODUCTION PROCESS
The process for the production of lead acid batteries consists essentially of five operations
described below
1. GRID CASTING
In the process grids to hold the active materials are made. Battery grids are produced using
microprocessor-casting machines with patented alloys. Different sizes of moulds are used to get
the required size of grids.
2. PLATE PREPARATION
Using lead oxide production in earlier stage positive and negative paste is prepared with
addition of sulphuric acid and water. These pastes are applied to respective grids using industrial
fasting machines.
3. CALL ASSEMBLY
Here positive and negative grids are separated by a sheet of fibreglass mat bush bars are
welded and as assembled into a jar or container to form battery cells. Then these cells are
assembled according to the customers specification into battery sets or systems.
4. FORMATION
In this process cells are filled with the electrolyte (surphuric acid) and then the set is
charged and discharged repeatedly, after final charging the battery comes out ready to be used.
5. TESTING & INSPECTION
Testing the battery is discharged to the customer it is tested for quality specifications.

Page S6

Data analysis &
Interpretation



DATAANALYSISANDINTERPRETATIONS

4.1LIQUIDITYRATIOS

4.1.1 CURRENT RATIO

The ratio between all current assets and all current liabilities; another way of expressing
liquidity. It is a measure of the firms short-term solvency. It indicates the availability of current
assets in rupees for every one rupee of current liability. A ratio of greater than one means that the
firm has more current assets than current claims against them.

Table4.1.1Currentratio

S.No Year

CURRENTASSETS
CURRENT
LIABILITIES
CURRENTRATIO
1.
200607

1,612,642,497

638,958,266 2.52
2.
200708

2,280,704,176 1,181,003,846 1.93

3.
200809

3,500,193,294 1,312,272,610 2.67

4.
200910

5,975,961,025 2,020,744,952 2.96

Page S7

Current Assets
Current ratio = -----------------------------------------
Current Liabilities

Interpre
decreas
the year
in the y

0
0.5
1
1.5
2
2.5
3

etation:
The standar
sed to 1.93 d
r 2009 and
year 2008. S
0
5
1
5
2
5
3
2006
2.5

rd norm for
during the y
it has incre
So the ratio
607
52
Gr
r current rat
year 2007 an
eased to 2.9
was satisfa
200708
1.93



aph4.1.1C
tio is 2:1. D
nd increase
6 in the yea
actory.
200
2
Currentratio
uring the ye
d to 2.67 in
ar 2010. Th
0809
2.67
o
ear 2006 th
n 2008 and i
he ratio abo
200910
2.96

Page
e ratio is 2.
it is increas
ove was stan

e S8
52 and it ha
sed to 2.67 i
ndard excep



as
in
pt

4.1.2.Quickratio

Quick ratio establishes a relationship between quick, or liquid, assets and current liabilities. An
asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value.

Table4.1.2QuickRatio

S.NO

Year

QUICKASSETS CURRENTLIABILITIES QUICKRATIO

1

1
200607

1,171,683,584 638,958,266 1.83

2

200708

1,708,741,955 1,181,003,846 1.45

3.

200809

2,578,479,879 1,312,272,610 1.96

4. 200910
4,032,625,321 2,020,744,952 1.99

Page S9

Current Assets Inventories
Quick Ratio = _______________
Current liabilities

Interpre
T
1.83 fro
year 20
standard

0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
etation:
The standard
om 2.45. T
009 and the
d norm so th
200607
d norm for
Then, it decr
en it increa
he ratio was
20070
Gra
the quick r
reased to 1.
ased to 1.99
s satisfactor
08 200

aph4.1.2Qu
ratio is 1:1.
.45 in the y
9 in the yea
ry.
0809

uickRatio
Quick rati
year 2008. A
ar 2010.
200910

io is decrea
And it has
However t

Page
ased in the y
increased to
the ratio wa

e 4u
year 2007 t
o 1.96 in th
as above th



to
he
he

4.1.3.C

S.N

1
2

Interpre
In
quick r
Marketa

Cashratio

NO
1
2
3.
4.

etation:
n all the ab
ratio is 1:2
able Securit
o: The ratio

Year

200607

200708

200809

200910

ove years th
2 the comp
ties.
0
0.05
0.1
0.15
0.2
0.25
0.3

Cash R

between ca
Tabl
CASH
BAL
169,121,
205,212,
256,000,
511,453,
Gra
he absolute
pany is fail
200607
Cas
Ratio = ___
Cu


ash plus ma
e4.1.3Cash
H&BANK
LANCES
,827
,363
,280
,739
aph4.1.3Ca
e quick ratio
led in keep
200708
sh & Bank b
__ ________
urrent liabiliti

arketable sec
hRatio
CU
LIA
638,95
1,181,003
1,312,272
2,020,744
shRatio
o is very low
ping suffici
200809
balances
_____
ies

curities and
URRENT
ABILITIES
8,266
3,846
2,610
4,952
w. The stan
ient Cash
200910

Page
d current liab
S
CAS
0

ndard norm
& Bank B

e 41
bilities.
SH RATIO
0.26
0.17
0.20
0.25
for absolut
Balances an

te
nd


4.1.4
liabilitie

Interpre

2007. F
to 0.61i

NET WOR
es excludin

S.NO

1
2

etation:
Net
From that y
in 2010 but

Net wo
RKING CA
g short-term

Ta
Year

200607
200708

200809

200910

t Working C
year the ratio
condition o

0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
orking capit
APITAL RA
m bank borr

ble4.1.4Ne
NETWOR
CAPIT
973,68
1,099,70
2,187,92
3,955,216
Graph4.1.4
Capital ratio
o increased
of business w

200607
tal ratio =



ATIO: The
rowing is ca
etworkingca
RKING
TAL
84,231 1
00,330 2
20,684 3
6,073 6,5
4Networkin
o is 0.45 in 2
d to 0.50 in
working cap
200708

_____
Ne
difference b
alled net wo
apitalratio
1,935,207,7
2,191,397,0
3,817,892,8
01,134,460
ngcapitalrat
2006 but inc
2008 and fo
pital is not s
200809
Net workin
__________
et assets
between cu
orking capita
NET
CAP
14
06
62
0 0
tio
creased to 0
ollowed in 2
shortage.
200910
ng capital
___

Page
urrent assets
al or net cur
TWORKING
ITALRATIO
0.50
0.50
0.57
.61
0.50 in the n
2009 also a

e 42
s and curren
rrent assets.
G
O

next year i.e

and increase



nt
.
e.,
ed



4.2LEVERAGERATIOS

4.2.1DebtRatio
If the firm may be Interested in knowing the proportion of the interest bearing debt
in the capital structure.

Table4.2.1Debtratio

S.No Year

TOTAL DEBT
TOTAL
DEBT + NET
WORTH
DEBT RATIO
1.
200607

233,058,880 2,039,907,551 0.11

2.
200708

378,672,427 2,391,525,347 0.16

3.
200809

1,407,083,880 3,843,741,557 0.37

4.
200910

3,162,620,560 3,493,635,030 1.10

Page 4S

Total Debt
Debt ratio = -----------------------------------------
Total Debt + Net Worth

Interpre
Th
year 20
increase
conclud
collecti

etation:
his ratio giv
006 it incre
ed to 0.37
de that the
on of debt.
0.
0.4
0.
0.
1.
ves results
eased to 0.
& 1.10 in t
company
0
2
4
6
8
1
2
20060
0.11



Gra
relating to
11 & 0.16
the year 20
s dependen
7 20070
0.16
aph4.2.1De
the capital
in the cor
009& 2010.
nce on deb
08 2008
0.37
ebtratio
structure o
rresponding
From the
bt is increa
09 2009
7
1.1
f a firm. D
g years 200
above in fl
asing. It is
910
1

Page
Debt ratio is
07 & 2008.
luctuating t
not better

e 44
0.08 in th
Again it i
trend we ca
r position i



he
is
an
in



4.2.2Debtequityratio

Debt equity ratio indicates the relationship describing the lenders contribution for each
rupee of the owners contribution is called debt- equity ratio. Debt equity ratio is computed by
dividing Long term Liabilities divided by Equity. Lower debt equity ratio higher the degree of
protection. A debt-equity ratio of 2:1 is considered ideal.

Table4.2.2Debtequityratio

S.No Year

TOTALDEBT
NETWORTH D.E.RATIO
1.
200607

233,058,880 1,806,848,671 0.13

2.
200708

378,672,427 2,012,852,920 0.19

3.
200809

1,407,083,880 2,436,657,677 0.58

4.
200910

3,162,620,560 3,331,014,470 0.95

Page 4S

LONG TERM LIABILITIES
Debt equity ratio = -----------------------------------------
EQUITY

Interpre
Th
theyea
therati
fundis

etation:
heratiogive
r2006and
ohasincre
increasing.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
esresultsre
itincreased
asedto0.5
200607
0.13
Graph
elatingtoth
dto0.13&
58&0.95.W
2007
0.1


4.2.2Debt
hecapitalst
0.19inthe
Wecancon
08 2
9

equityratio
tructureof
year2007
cludethatt
200809
0.58

o
afirm.Deb
and2008.I
thecompan
200910
0.95

Page
btequityra
ntheyear2
nydepends

e 46

tiois0.09i
2009&201
onthedeb



in
10
bt


4.2.3 IN
covered

S.NO

Interpre
94.76 in
year 20
interest

4.2.4TO
NTEREST CO
d by funds th

O Ye
200
200
200
200

etation: Int
n the year 2
009 and it a
ed to invest
OTALLIABIL

I

OVERAGE R
hat are ordi

ear

EB
0607

0708

0809

0910
1

terest cover
2007. But, it
again decre
t the money
LITIESRATI

nterest cov

RATIO: The
inarily avail
Table4
BIT
137,259,58
386,899,73
742,908,74
1,588,690,29
Graph
rage ratio is
t is decrease
ased to 12.2
y in this com
O
0
20
40
60
80
100
20060

erage ratio




ratio shows
lable for the

.2.3Interest
INTERE
83 1
8 13
41 30
99 12
h4.2.3Intere
s 07.56 in th
ed to 28.80
29 in the y
mpany.
07 200708
= ___

s the numbe
eir payment

coveragera
EST
1,448,427
3,435,515
0,924,293
9,308,874
estCoverage
he year 200
in the year
year 2010. I
200809 2
E
__________
Int
er of times
.

atio
I.C.RAT
eratio
06. It is inc
2008 and d
In this posit
200910
EBIT
__________
terest

Page
the interest
IO
94.76
28.80
24.02
12.29
creased auto
decreased to
tion outside

e 47
t charges ar
omatically t
o 24.02 in th
e investors i



re

to
he
is





T

To

S.NO

Interpre
total lia
2009 &

Formu

Total liabilit

otalAssets

O
20
20
20
20

etation:In t
abilities incr
&2010.

ula: Total
Tot
ties: Curren

s:Fixed
Table
Year

00607

00708
00809

00910

the years, 2
reased to 0.4

0
0.1
0.2
0.3
0.4
0.5
0.6
Liabilities
al Assets
nt liabilities

assets+In
4.2.4:Total
TOTAL
LIABILIT
872,017
1,559,676
2,719,356
5,183,,365
Graph4.2
2006072007
006 & 2007
4 and the ra
4.3 ACT


+ Secured
Loans.
nvestments
Liabilitiesra

L
TIES
TO
7,146 2,8
6,273 3,6
6,490 5,2
5,512 8,6
2.4:TotalLia
708200809
7 the total li
atio increase
TIVITY R

& Unsecure
s+Curren
atio
OTALASSET
809,793,132
692,541,508
292,107,128
683,886,037
abilitiesratio
200910
iabilities is 0
ed to 0.5 &
RATIOS

ed
ntassets
S
T.L.RAT
2
8
8
7
o
0.2&0.3 but
0.6 in the c

Page
TIO
0.3
0.4
0.5
0.6

t in the year
orrespondin

e 48

r 2008 the
ng years of

4.3.1Inventoryturnoverratio
It indicates the firm efficiency of the firm in producing and selling its product. It is calculated
by dividing the cost of goods sold by the average inventory.

Cost of goods sold = Raw materials consumed +payments &benefits to employees +mfr, selling
&admin expenses +duties & taxes

Table4.3.1:Inventoryturnoverratio

S.NO

Year

COSTOFGOODS
SOLD
AVGINVENTORY I.T.RATIO
1

200607

2,228,549,828 374,102,223 5.96

2

200708

3,499,805,230 506,460,567 6.91

O
3
200809

5,324,665,192 746,837,818 7.13

4
200910 9,782,463,974 1,432,524,559 6.83

Page 49

Cost of goods sold

Inventory turnover ratio =_____________________
Average inventory

Interpre
I
year 20
2009. B
year tha

etation:
Inventory tu
007. Then, i
But, it is dec
at is compan
0
1
2
3
4
5
6
7
8
200
urnover rati
it is increas
creased to 6
ny producti
0607
Graph4.3
io is 5.57 ti
ed to 6.91
6.83 in the y
on is also in
200708

.1:Inventor

imes in the
in the year
year 2010.
ncreased. Su
20080

ryturnoverr

year 2006.
r 2008 and
Inventory tu
ubsequently
9 20

ratio
But, it is i
again incre
urn over rat
y sales are a
00910

Page
increased t
ased to 7.13
tio increased
also increase

e Su
o 5.96 in th
3 in the yea
d for year b
ed.



he
ar
by


4.3.2D
Debtor

Sales =

Interpre
times in
&7.25 t

Debtorstu
s turnover i
Gross Sale

S.NO

etation:De
n the year 2
times in the
Debtors
urnoverra
indicates th
es

Year

200607

200708

200809

200910

ebtors turn
007 and inc
years 2009
0
1
2
3
4
5
6
7
8
s turnover r
atio: It is fo
he number o

Table4.3.2
SALE
2,685,43
4,458,29
7,451,03
13,499,86
Graph4.3
nover ratio i
creased to 5
9 &2010.
200607
ratio =



found out by
of times deb
2:Debtorstu
ES
36,096
95,779
32,998 1
67,499 1
.2:Debtorst
is 4.31 time
5.92 times in
200708
S
________
Ave
y dividing th
tors turnov
urnoverratio
AVERAGE
DEBTORS
560,689,88
753,113,33
1,158,032,7
1,862,113,4
turnoverrat
es in the yea
n the year 2
200809
Sales
_________
rage Debto
he credit sal
ver each yea
o
E

D
81
38
67
98
io
ar 2006 and
2008 and it
200910
ors

Page
les by avera
ar.
.T.RATIO
4.79
5.92
6.43
7.25
d it is increa
increased to

e S1
age debtors.

ased to 4.7
o 6.43 time



.
79
es



4.3.3Fixedassetturnoverratio

The ratio is supposed to measure the efficiency with which fixed assets are employed a high ratio
indicates a high degree of efficiency in asset utilization and a low ratio reflects inefficient use of assets.
However, in interpreting this ratio, one caution should be borne in mind. When the fixed assets of the
firm are old and substantially depreciated, the fixed assets turnover ratio tends to be high because the
denominator of the ratio is very low.

Sales = Gross Sales
Netfixedassets:Netblock

Table4.3.3:Fixedassetturnoverratio

S.NO

Year

SALES
NETFIXED
ASSETS
F.A.T.RATIO
1

200607

2,685,436,096 948,631,374 2.83

2

200708
4,458,295,779 1,043,547,559 4.27
3

200809

7,451,032,998 1,568,304,581 4.75

4
200910
13,499,867,499 1,888,508,475 7.15

Page S2

Net Sales
Fixed Asset Turnover Ratio = __________
Net Fixed Asset

Interpre
Fixed a
the year

etation:
assets turn o
r 2008 the r
0
1
2
3
4
5
6
7
8
20062007
over ratio is
ratio is 4.27
Graph4.3.3
200708
2.01 in the
and it cont


3:Fixedasse

200809
year 2006 a
inued up to

etturnover

200910
and it is inc
4.75 and to

ratio

0
creased to 2
o 7.15 in th

Page
.83 in the y
he years 200

e SS
year 2007. I
09&2010.



In


4.3.4C

Interpre

year 20
2.26 in
increasi
Currentas

S.NO

etation:
Current a
007. But, in
n the year
ing.
0.
1.
2.
Curren
ssetturnov

Year

200607

200708

200809

200910
Gra
assets turnov
the year 20
2010. Fro
0
.5
1
.5
2
.5
20060
nt asset tur
verratio

Table4.3.4
SALE
2,685,436
4,458,29
7,451,03
13,499,86
aph4.3.4Cu
ver ratio is
008 the ratio
om above
07 2007
nover ratio


4:Currentas
ES
C
AS
6,096 1,6
95,779 2,2
32,998 3,5
67,499 5,9
urrentassets
1.68 in th
o is increas
we can co
08 2008

o = __
Cu

ssetturnove
URRENT
SSETS
12,642,497
80,704,176
00,193,294
75,961,025
turnoverra
he year 2006
ed to 1.95 a
onclude tha
809 200
Sales
__________
urrent assets

erratio

C.A.T
7
6
4

tio
6 and it is d
and it contin
at current a
0910
______
s

Page
T. RATIO
1.67
1.95
2.12
2.26

decreased to
nuously inc
assets turno

e S4
o 1.67 in th
creased up t
over ratio i



he
to
is



4.3.5T

test of m
required

Total as

Interpre
Tota
to 1.55

Totalasset
This rati
managerial
d in the intere
ssets: Fixed

S.NO
1
2
3
4

etation:
al assets rat
in the year
Total
tsturnove
io ensures w
efficiency a
est of the com
d assets + C

Year
200607
200708
200809
200910
Graph
tio is 0.83 i
2010.It mea
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
200
asset turno
erratio
whether the c
and business
mpany.

Current asset
Table4.3
SALE
2,685,43
4,458,29
7,451,03
13,499,86
4.3.5:Total
n the year 2
ans Total A
0607 20
over ratio =


capital emplo
s performanc
ts + Investm
3.5:Totalass
ES T
36,096 2
95,779 3
32,998 5
67,499 8
assetsturno
2006 and it
Assets is incr
00708 2

____
Ca

oyed has bee
ce. Higher t
ments
etturnover
TOTALASSE
2,809,793,1
3,692,541,5
5,292,107,1
8,683,886,0
overratio
gradually i
reased in ev
200809
Sales
__________
apital emplo

en effectively
total capital
ratio
ETS T.A
32
08
28
37
increased ye
very year.
200910
____
oyed

Page
y used or no
turnover ra
A.T.RATIO
0.96
1.21
1.41
1.55

ear by year

e SS
ot. This is als
atio is alway
and reache



so
ys
ed


4.3.6W

capital t
This rat

S.NO

Interpre

Wor
2007. In
higher t

4.3.7N
Workingca
A firm ma
turnover ind
tio indicates

O Ye
200
200
200
200

etation:
rking capita
n the year 2
the working
Netassett

W

apitalturn
ay also like
dicates for o
s whether or
Ta
ear

0607

2
0708

4
0809

7
0910
13
G
al turnover
2008 increas
g capital turn
turnoverr

Working cap

overratio
to relate ne
one rupee o
r not workin
able4.3.6:W
SALES
2,685,436,09
4,458,295,77
7,451,032,99
3,499,867,4
Graph4.3.6:
ratio is 2.4
sed to 4.05
nover the m
ratio
0
1
2
3
4
5
20060

pital turnov



o
et current as
of sales the c
ng capital h

Workingcapi
NET
A
96 97
79 1,09
98 2,18
499 3,95
:Workingca
41 in the yea
. Again it d
more favorab
07 200708
ver ratio =


sets or net w
company ne
has been effe

italturnover
CURREN
ASSETS
73,684,231
99,700,330
87,920,684
55,216,073
apitalturnov
ar 2006 and
decreased to
ble for the c
200809 2
S
= _________
Workin
working cap
eeds how m
fectively util

rratio
T
W
verratio
d it is incre
o 3.41 in the
company.
200910
Sales
__________
ng capital

Page
pital to sales
many net cur
lized marke
W.C.T. RA
2.76
4.05
3.41
3.41
ased to 2.76
e year 2009
____

e S6
s. Working
rrent assets.
et sales.
TIO
6 in the yea
&2010. Th

ar
he

Net Ass
S.NO

Interpre

2007 an
slightly

4.3.8C
sets: Net Fi
O
20
20
20
20

etation:
Net Asse
nd it is incre
y inc
Capitaltur
ixed Assets
Year

00607

00708
00809

00910

ets turnover
eased to 2.0
creased
rnoverrati
0
0.5
1
1.5
2
2.5
Net Asse
+ Net Curr
Table4.3.
SALES
2,685,436
4,458,295
7,451,032
13,499,867
Graph4.3
20062007
r ratio is 1.1
03 in the yea
to
io
t Turnover

rent Assets

.7:Netasset
S NET
6,096 1,9
5,779 2,1
2,998 3,8
7,499 6,5
3.7:Netass

200708
11 in the ye
ar 2008. An
2.08
r Ratio =
tturnoverra
TASSETS
935,207,714
191,397,006
817,892,862
501,134,460
setturnover

200809
ear 2006 and
nd, it decrea
in
Sales
________
Ne
atio
4 1.39
6 2.03
2 1.95
0 2.08
rratio

200910
d it is incre
ased to 1.95
the
s
___
et Asset

Page
N.A.T.RAT
eased to 1.3
5 in the year
year

e S7
TIO
9 in the yea
r 2009 and
2010



ar
it
0.

S.NO

Interpre

2007 an
. Then,

4.3.9C
The rat
O Y
200
200
200
200

etation:
Capi
nd it is incre
it increased
Creditorst

C

tio obtains b
Year

0607

2
0708

4
0809

7
0910
1

ital turnove
eased to 1.7
d to 2.03 in
turnoverr
0
0.5
1
1.5
2
2.5

Capital turn

by dividing
Table4.
SALES
2,685,436,0
4,458,295,7
7,451,032,9
3,499,867,4
Graph4.3.8
er ratio is 0
78 in the yea
the year 20
ratio
200607

nover ratio



sales with t

3.8:capital

CAPIT
096 2,1
779 2,5
998 3,9
499 6,6
8:capitaltur
.98 in the y
ar 2008 and
10.
200708
= ___


the capital e

turnoverrat
TALEMPLOY
170,834,866
511,537,662
979,834,518
663,141,085
rnoverratio
year 2006 a
d again it is
200809
S
__________
Capital

employed.

tio
YED
6
2
8
5
nd it is incr
increased t
200910
Sales
__________
l Employed

Page
C.T.RAT
1.24
1.78
1.87
2.03

reased 1.24
to 1.87 in th
_

e S8
TIO
4 in the yea
he year 200



ar
09


The ra

S.NO

Interpre

and it i
2009 bu

atio obtaine

O Ye
200
200
200
200

etation:
Credito
is suddenly
ut increased

C

ed by dividi
T
ear

0607

1,4
0708

2
0809

4,0
0910
8,1

ors turnover
decreased
d in the next

0
2
4
6
8
10
12
2

Creditors tu

ng the annu
Table4.3.9:C
PURCHASE
422,358,585
2,244,170,1
086,818,72
125,662,265
Graph4.3.9
r ratio is 6.
to 5.1 in th
t year 2010
4.4P
00607

urnover rat



ual credit pu

Creditorstur
ES
A
CR
5 19
72 44
1 59
5 7,0
9:Creditorst
1 in the yea
he year 2008
to 11.47.
PROFITAB
200708
tio = _____


urchases wit

rnoverratio
AVERAGE
REDITORS
2,242,196
41,904,975
1,059,052
081,427,12
urnoverrati
ar 2006. It i
8 and it sud
ILITYRATI
200809
P
__________
Avge.C

th average a

o
s increased
ddenly incre
IOS
200910
Purchases
________
Creditors

Page
accounts pa
C.T.RATI
7.4
5.1
6.9
11.47

to 7.4 in th
eased to 6.9

e S9
ayable.
O
he year 200
9 in the yea



07
ar

4.4.1Grossprofitratio
This ratio shows that the margin left after meeting manufacturing costs. It measures the
efficiency of production as well as pricing.

Gross profit= Net sales-Cost of goods sold
Cost of goods sold= Opening stock+ material consumed+ mfg .exp- closing stock

Table4.4.1:Grossprofitratio

S.NO

Year

GROSSPROFIT SALES G.P.RATIO(%)

1

200607

456,886,268 2,685,436,096 17
2

200708

958,490,549 4,458,295,779 21.5

3

200809

2,126,367,806 7,451,032,998 28.5

4 200910
3,717,403,516 13,499,867,499 27.5

Page 6u

Gross profit
Gross profit margin Ratio = ____________ X100
Net sales

Interpre
F
to 17 %
decreas
activitie

etation:
From the abo
% &21.5%
sed to 27.5
es.
R
0
5
10
15
20
25
30

ove we can
in 2007& 2
% in the y
Ratio

0
5
0
5
0
5
0
2006
Graph

n say that gr
2008 and a
year 2010.
07 2

4.4.1:Gross

ross profit r
again it incr
The comp
200708

sprofitratio
atio is 16.2%
reased to 2
pany is ma
200809

% in the ye
28.5% in th
aintaining p
2009

Page
ear 2006 but
he year 200
proper contr
910

e 61
t it increase
09 and it i
rol on trad



ed
is
de


4.4.2N
conditio
face fall

Interpre

During
because
5.3 in th

4.4.3O
Netprofi
ons. A firm w
ling selling p

S.NO

etation:
the year 20
e of decreas
he year 200
Operating

itratio:Th
with a high
prices, rising

Yea

2006

2007

2008

2009

006 the net

sed in admin
08 and it aga
expenses
8
6
4
2
0
2
4
6
8
200
Net pro
his ratio also
net margin
costs of pro
Ta
ar
607
708
809
910
Graph4.4
profit marg
nistration an
ain increase
ratio
0607 2007

ofit ratio=



o indicates th
ratio would
duction or d

able4.4.2:Ne
PROFITAFT
TAX
86,900,56
238,465,7
470,434,5
9,436,315,
4.2:Netprof

gin is 0.7 it
nd selling e
d to 6.3 in 2
08 200809
Net pro
______
Net sal

he firm's cap
be in an ad
declining dem
etprofitratio
TER
63 2,6
30 4,4
75 7,4
,11 13,4
fitratio
t suddenly i
xpenses. In
2009 and to
200910
ofit
___ X I00
les

pacity to with
dvantageous
mand for the
o
SALES
685,436,096
458,295,779
451,032,998
499,867,499
increased to
n the next ye
o 6.99 in the

Page
h stand adve
position to s
product.
NET
MAR
6 3
9 5
8 6
9 6

o 3.2% in th
ear, it again
e year 2010.

e 62
erse economi
survive in th
PROFIT
GIN(%)
3.2
5.3
6.3
6.99
he year 200
n increased t
.



ic
he
07
to

The Operating expenses ratio explains the changes in the profit margin ratio. A higher operating
expense is unfavorable since it will leave a small amount of operating income to meet interest, dividends.

Page 6S

Operating expenses X 100
Operating expenses ratio= __________________
Sales

Operating expenses =Admin expenses+ Selling expenses

Table4.4.3:Operatingexpensesratio

S.NO

Year

OPERATING
EXPENSES
SALES O.E.RATIO
I
1
200607

376,620,609 2,685,436,096 14.02

2

200708

550,626,756 4,458,295,779 12.35

3

200809

767,790,197 7,451,032,998 10.30

4
200910
1,388,735,777 13,499,867,499 10.30

Graph4.4.3:Operatingexpensesratio

16



Page 64

Interpretation:

Operating expenses ratio is 17.86%of sales in the year 2006 it decreased to 14.02% in
the year 2007 and decreased in 2008 to12.35% and again it decreased in the next year 2009 to
10.30% and continued the same way. Then, it reached 10.30% in the year 2010.

4.4.4ReturnonInvestment
The conventional approach of calculated ROI is to divide PAT by investment.

EBIT
Return on investment(ROI)= _________________
Capital Employed

Table4.4.4:Returnoninvestment
S.NO

Year

EBIT
CAPITAL
EMPLOYED
R.O.I.RATIO
1 200607 137,259,583 2,170,834,866 0.06
2 200708 386,899,738 2,511,537,662 0.15
3 200809 742,908,741 3,979,834,518 0.19
4 200910 1,588,690,299 6,663,141,085 0.24

Graph4.4.4:ReturnonInvestment

Page 6S

0
0.05
0.1
0.15
0.2
0.25
200607 200708 200809 200910

Interpretation:
Return on Investment is very low in all years. But, in the year 2006, it reached to
6.51 due to less earnings.

4.4.6Returnonequityshareholdersfund
The return on equity share holders fund explains about the return of share holders with they
get on their investment.



Page 66

Table4.4.6:Returnonequityshareholder'sfund
S.NO

Year

PROFITAFTER
TAX
NETWORTH R.O.E.RATIO(%)
1 200607 86,900,563 1,806,848,671 4.8
2 200708 238,465,730 2,012,852,920 11.8
3

200809

470,434,575 2,436,657,677 19.3

4 200910 943,631,511 3,331,014,470 28.33

Graph4.4.7:Returnonequityshareholder'sfund
Net profit
Return on equity share holders fund= _________________
Equity share holders fund

0
5
10
15
20
25
30
200607 200708 200809 200910

Interpretation:
Return on equity in the year 2006 is 0.8 and it increased suddenly to 4.8 in the year 2007
and again it increased to 11.8 in the year 2008. Return on Equity of the company is at
satisfactory level and then it increased to 19.3 in 2009 and again increased to 28.33 in 2010 .

Page 67

CHAPTER-5
Findings
Suggestions
Conclusion



Page 68

FINDINGS

Except in the year 2008, the company is maintaining current ratio as 2 and more, standard
which indicates the ability of the firm to meet its current obligations is more. It shows
that the company is strong in working funds management.
The company is maintaining of quick assets more than quick ratio. As the company
having high value of quick ratio. Quick assets would meet all its quick liabilities with out
any difficulty.
The company is failed in keeping sufficient cash & bank balances and marketable
securities.
In above all current assets and liabilities ratios are better that also it is double the
normal position. Observe the absolute & super quick ratio the company cash
performance is down position.

In the year 2006 debt equity ratio is 0.08 (8%) but it is increased to 0.11 (11%) &
0.16(16%) in 2007 and 2008 increased every year. It shows that the company is losing
its condition.
Net working capital ratio is 0.45 in 2006 but also 0.50 in 2007. It is increased very high
but condition of business working capital is not shortage .
Debt Equity ratio is increasing every year. It indicates the company depends on the debt
fund increasing.
Total liabilities ratio is also increasing year by year.
In the year 2006, the interest coverage ratio 7.56 which increased to 94.76 in the year
2007 and high fluctuations in the followed years. In this position, outside investors are
interested to invest their money in this company.
The company is declining of its coverage ratio to serve long term debts.
Inventory turnover also increased for year by year that is company production is also
increased. Subsequently sales are also increased.
The net profit ratio of the company increasing over the study period. Hence the
organization having the good control over the operating expenses.



Page 69

SUGGESTIONS

The company has to increase the profit maximization and has to decrease the operating
expenses.
By considering the profit maximization in the company the earning per share, investment
and working capital also increases. Hence, the outsiders are also interested to invest.
The company should maintain sufficient cash and bank balances; they should invest the
idle cash in marketable securities or short term investments in shares, debentures, bonds
and other securities.
The company must reduce its debtors collection period from 83 & 84 days to 40 days be
adopting credit policy by providing discounts to the debtors.
Return on investment is fluctuates every year. The company has to make efforts in
increasing return on investments by reducing its administration, selling and other
expenses.
The company should increase its interest coverage ratio to serve long term debts.
The net profit of the company is increasing over the study period. Hence the organization
maintaining good control on all trees of expenses.
The dividend per share has observed as raising trend over the study period, hence it may
be suggested Amara Raja Batteries Limited should take key interest to maximize the
share holder wealth by increasing dividend pay out.

Page 7u

Conclusion

Liquidity ratios, both current ratio and quick ratio are showing effectiveness in
liquidity as in all the years current ratio is greater than the standard 2:1 and quick ratio is
greater than the standard 1:1 ratio.

The firm is maintaining a low cash balance and marketable securities which means they
done cash payments.

Debt equity ratio, solvency ratio and interest coverage ratio are showing an average
increase in the long term solvency of the firm.

The proprietary ratio is showing an average increase which means, the shareholders have
contribute more funds to the total assets.


Average payment period of the firm is showing the credit worthiness of the firm to its
suppliers.

Fixed assets turnover ratio is showing that the firm needs lesser investment in fixed assets
to generate sales.

The increasing trend of current assets turnover ratio indicates that the firm needs more
investment in current assets for generating sales.

The gross profit ratio, net profit ratio is showing the increasing trends. The profitability
of the firm the increasing

Operating ratio of the company has observed decreasing trend, hence it may be good
control over the operating expenses.

The interest that has to be paid is very less when compared to the sales. The firm is not
utilizing the debt conservatively.

The firm is retaining much of the earnings (based on dividend payout ratio) .

The company financial performance is very good and also they will increase their
business year by year by expanding their branches.

Page 71

CHAPTER-6
Annexure
Bibliography



Page 72

BALANCESHEETASAT31
st
MARCH2007

Particulars
Schedule
No. As at 31.03.2007 As at 31.03.2006
Rupees Rupees Rupees Rupees
SOURCES OF FUNDS
Shareholders Funds
Share Capital 1 113,875,000 113,875,000
Reserves & Surplus 2 1,692,973,671 1,632,042,302
1,806,848,671 1,745,917,302
Loan Funds
Secured Loans 3 73,665,914 44,945,252
Unsecured Loans 4 159,392,966 103,853,138
233,058,880 148,798,390
Deferred Tax liability 5 130,927,315 145,000,360
Total 2,170,834,866 2,039,716,052

APPLICATION OF FUNDS
Fixed Assets 6
Gross Block 1,672,298,054 1,583,508,897
Less: Depreciation 723,666,680 591,622,548
Net Block 948,631,374 991,886,349
Capital Work-in-Progress 12,892,109 9,514,644
961,523,483 1,001,400,993
Investments 7 235,627,152 208,778,082
Current Assets, Loans &
Advances
Inventories 8 440,958,913 307,245,534
Sundry Debtors 9 649,706,121 471,673,642
Cash & Bank Balances 10 169,121,827 152,292,556
Loans, Advances & Deposits 11 342,929,588 251,402,682
Other Current Assets 12 9,926,048 7,622,683
1,612,642,497 1,190,237,097
Less: Current Liabilities &
Provisions 13
Liabilities 345,042,817 162,283,498
Provisions 293,915,449 198,416,622
638,958,266 360,700,120
Net Current Assets 973,684,231 829,536,977

Misc. Expenditure 14 -- --



Page 7S

Total 2,170,834,866 2,039,716,052









PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2007



Particulars
Schedule
No.
Year Ended on 31.03.07
Rupees
Year Ended on 31.03.06
Rupees
INCOME
Sales 2,368,057,275 1,759,017,304
Other Income 15 63,043,449 41,581,593
Increase / (Decrease) in stocks 16 71,015,819 11,120,770
Total 2,502,116,543 1,811,719,667
Expenditure
Raw Material Consumed 17 1,382,962,610 831,843,012
Payments & Benefits to Employees 18 170,091,901 157,730,759
Mfg., Selling Admn., & Other
Expenses
19 494,265,237 561,985,559
Taxes & Licenses 20 181,230,080 123,834,416
Interest 21 1,448,427 1,754,335
Depreciation 136,307,132 123,052,249
Total 2,366,305,387 1,800,200,330
Profit Before Taxation 135,811,156 11,519,337
Add: Excess provision of Income Tax -- 4,954,943
Less: Tax Provision for earlier years 14,073,045 30,473,038
Provision for Income Tax 59,500,000 33,000,000
Provision for Wealth Tax 3,440,615 --
Add: Excess provision for Dividend
Tax Written Back
43,023

49,721
Profit After Taxation 86,900,563 13,897,597
Profit brought forward
Year from Previous

512,460,202

518,882,390
Profit available for appropriation 599,360,765 532,779,987
Less: Transfer to General Reserve 6,517,542 1,050,000
Proposed Dividend 22,775,000 17,081,250
Dividend Tax 3,194,194 2,188,535
Balance carried to Balance Sheet 566,874,029 512,460,202
Basic Earnings per equity share 7.63 1.22





Page 74










Particulars
Schedule
No. As at 31.03.2009 As at 31.03.2008
Rupees Rupees Rupees Rupees
SOURCES OF FUNDS
Shareholders Funds
Share Capital 1 113,875,000 113,875,000
Reserves & Surplus 2 2,322,782,677 1,898,977,921
2,436,657,677 2,012,852,921
Loan Funds
Secured Loans 3 1,074,874,049 189,001,189
Unsecured Loans 4 332,209,831 216,407,580
1,407,083,880 405,408,769
Deferred Tax liability 5 136,092,961 120,012,315
Total 3,979,834,518 2,538,274,005

APPLICATION OF FUNDS
Fixed Assets 6
Gross Block 2,577,786,073 1,907,116,068
Less: Depreciation 1,009,481,492 863.568,510
Net Block 1,568,304,581 1,043,547,558
Capital Work-in-Progress 61,667,597 48,149,118
1,629,972,178 1,091,696,676
Investments 7 161,941,656 320,140,656
Current Assets, Loans &
Advances
Inventories 8 921,713,415 571,962,221
Sundry Debtors 9 1,459,544,977 856,520,556
Cash & Bank Balances 10 256,000,280 205,212,363
Loans, Advances & Deposits 11 859,824,054 634,750,549
Other Current Assets 12 3,110,568 12,035,439
3,500,193,294 2,280,481,128
Less: Current Liabilities &
Provisions 13
Liabilities 735,304,583 673,895,907
BALANCE SHEET AS AT 31 MARCH 2009



Page 7S

Provisions 576,968,027 480,148,548
1,312,272,610 1,154,044,455
Net Current Assets 2,187,920,684 1,126,436,673

Misc. Expenditure 14 -- --
Total 3,979,834,518 2,538,274,005








PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2009


Particulars
Schedule
No.
Year Ended on 31.03.09
Rupees
Year Ended on 31.03.08
Rupees
INCOME
Sales 5,958,016,404 3,636,709,293
Other Income 15 97,738,804 72,509,746
Increase / (Decrease) in stocks 16 181,845,189 41,637,449
Total 6,237,600,397 3,750,856,488
Expenditure
Purchase Of Finished Goods
Raw Material Consumed

17
1,190,212
3,937,812,454
4,353,496
2,229,601,146
Payments & Benefits to Employees 18 265,997,094 207,269,383
Mfg., Selling Admn., & Other
Expenses
19 1,093,657,443 760,841,717
Taxes & Licenses 20 26,007,989 14,881,894
Interest 21 30,924,293 13,435,515
Depreciation 170,026,464 147,009,114
Total 5,525,615,949 3,377,392,265
Profit Before Taxation 711,984,448 373,464,223
Add: Excess provision of Income Tax -- 10,915,000
Less :Tax Provision for -Current Tax
Including Deferred tax, Earlier
Tax, Wealth tax, Fringe
benefits tax
241,549,873 145,913,493

Profit After Taxation 470,434,575 238,465,730
Profit brought forward
Year from Previous
749,031,694 566,874,029
Profit available for appropriation 1,219,466,269 805,339,759
Less: Transfer to General Reserve 47,043,458 23,846,573
Proposed Dividend 39,856,250 28,468,750
Dividend Tax 6,773,570 3,992,742
Balance carried to Balance Sheet 1,125,792,991 749,031,694



Page 76

Basic Earnings per equity share 41.31 20.94









Particulars
Schedule
No. As at 31.03.2009 As at 31.03.2010
Rupees Rupees Rupees Rupees
SOURCES OF FUNDS
Shareholders Funds
Share Capital 1 113,875,000 113,875,000
Reserves & Surplus 2 2,322,782,677 3,217,139,470
2,436,657,677 3,331,014,470
Loan Funds
Secured Loans 3 1,074,874,049

2,266,545,502
Unsecured Loans 4 332,209,831 896,075,058
1,407,083,880

3,162,620,560
Deferred Tax liability 5 136,092,961 169,506055
Total 3,979,834,518 6,663,141,085

APPLICATION OF FUNDS
Fixed Assets 6
Gross Block 2,577,786,073 3,105,843,108
Less: Depreciation 1,009,481,492

1,217,334,633
Net Block 1,568,304,581 1,888,508,475
Capital Work-in-Progress 61,667,597

657,409,912
1,629,972,178 2,545,918,387
Investments 7 161,941,656 162,006,625
Current Assets, Loans &
Advances
Inventories 8 921,713,415

1,943,335,704
Sundry Debtors 9 1,459,544,977

2,264,682,019
Cash & Bank Balances 10 256,000,280 511,453,739
Loans, Advances & Deposits 11 859,824,054
BALANCE SHEET AS AT 31 MARCH 2010



Page 77

1,248,478,477
Other Current Assets 12 3,110,568 8,011,086
3,500,193,294 5,975,961,025
Less: Current Liabilities &
Provisions 13
Liabilities 735,304,583 1,027,373,819
Provisions 576,968,027 99,371,133
1,312,272,610 2,020,744,952
Net Current Assets 2,187,920,684 3,955,216,073

Misc. Expenditure 14 -- --
Total 3,979,834,518 6,663,141,085






PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2010


Particulars
Schedule
No.
Year Ended on 31.03.09
Rupees
Year Ended on 31.03.10
Rupees
INCOME
Sales 5,958,016,404 10,833,256,904
Other Income 15 97,738,804 256,100,643
Increase / (Decrease) in stocks 16 181,845,189 582,065,982
Total 6,237,600,397 11,671,423,529
Expenditure
Purchase Of Finished Goods
Raw Material Consumed

17
1,190,212
3,937,812,454
6,378,425
7,794,794,675
Payments & Benefits to Employees 18 265,997,094 408,078,078
Mfg., Selling Admn., & Other
Expenses
19 1,093,657,443 1,579,591,221
Taxes & Licenses 20 26,007,989 49,538,561
Interest 21 30,924,293 129,308,874
Depreciation 170,026,464 244,452,070
Total 5,525,615,949 10,212,042,104
Profit Before Taxation 711,984,448 1,459,381,425
Add: Excess provision of Income Tax --
Less :Tax Provision for -Current Tax
Including Deferred tax, Earlier
Tax, Wealth tax, Fringe
benefits tax
241,549,873 523,262,294

Profit After Taxation 470,434,575 943,631,511
Profit brought forward
Year from Previous
749,031,694 1,125,792,991
Profit available for appropriation 1,219,466,269 2,069,424,502



Page 78

Less: Transfer to General Reserve 47,043,458 94,363,151
Proposed Dividend 39,856,250 39,856,250
Dividend Tax 6,773,570 6,773,570
Balance carried to Balance Sheet 1,125,792,991 1,928,431,531
Basic Earnings per equity share 41.31 82.87

BIBLOGRAPHY

1. I.M.Pandey : Financial Management

2. M.Y.Khan & P.K.Jai : Financial Management
3. S.P. Jain & K.L. Narang : Cost & Management accounting
4. K.Rajeswara rao & G. Prasad : Accounting & Finance
5. P.Kulakarni : Financial Management


Web-sites:
www.google.com
www.amaron.co.in

Page 79