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Funds Flow Analysis
INTRODUCTION
Finance is the lifeblood of every business activity without which the wheels of
modern business organization system cannot be greased. Finance management is
managerial activity, which is concerned with planning and controlling of the firm's
financial Resources. Finance is a scarce resource and it has to be managed efficiency
for the successful functioning of any company. Several companies have come to grief
mainly because of inefficient management of finance, in spite of other favorable
conditions.
The funds flow statement is a statement which shows the movement of funds
and is a report of financial operations of the business undertaking. It indicates various
means by which funds were obtained during a particular period and the ways in which
these funds where employed. In simple words it is a statement of sources and
applications of funds.
The funds flow is designed to analyze the changers in the financial condition
of a company between two periods. This statement will highlights the sources from
which funds are received and the uses to which these have been put and it enables to
know with reasons the basic causes of changes in net working capital. This statement
is also termed as Statement of changes in the financial position on working capital
base
Funds flow statement is an important tool and is widely used in the hands of
financial analysts and managers for analyzing the financial management of a
company. Funds keep on moving in a business, which itself based on going concern
concept. In a narrow sense, it means inflow and out flow of cash only and a flow
statement prepared on this basis is called as "cash flow statement". Such a statement
enumerates net effects of the various business transactions on cash and takes into
account receipts and disbursement of cash. In a broader sense, the term fund refers to
money values in whatever form it may exists
VCR Institute of Management Studies, Chittoor
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Funds Flow Analysis
Definition:
"A statement of sources and Application of Funds is a technical device
designed to analyze the changes in the financial condition of a business enterprise
between two dates".
-
R. A. Foulk
Funds Flow Statement as statement either prospective or retrospectives

setting out the sources and application of funds of an enterprise. The purpose of
statement is to indicate clearly the requirement of funds.
-
I.C.W.A
The funds flow analysis describes the sources from which additional funds
were derived and the uses to which these funds were put.
-
Robert Anthony
In simple, the funds flow statement is a statement of sources and application of

funds. In short, it is a technical device designed to high light the change in the
financial condition of a business enterprise between tow Balance Sheets.
Funds flow statement is widely used by the financial analyst and credit
granting institution and financial managers in performance of their jobs. It has
become a useful tool in their analytical kit. This is because the financial statement like
income statement and balance sheet have limited role to perform.
Income statement measures flows restricted to transaction that pertain to
rendering of goods and services to customers. The balance sheet is merely a static
statement's these statements do not sharply focus those major financial transactions,
which have behind the balance sheet changes.
General Rule:
The flow of funds occurs when a transaction changes on the one hand a noncurrent account and vice versa.
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Funds Flow Analysis

1.
A current asset and a fixed asset.
2.
A fixed asset and a current liability.
3.
A current asset and a fixed liability. A fixed liability and a current liability.
Different names of funds Flow Statement:
A statement of sources and Uses of funds.
A statement of Sources and Application of funds.
Where got and where gone Statement.
Inflow and out flow of funds statement.
Main purpose of funds Flow Statement:
To help to understand the changes in assets and which are not evident
Financial statements or I the income statement.
To inform on to how the loans to the business has been used.
To point out the financial strengths and weakness of the business.
To help in planning sound dividend policy.
Procedure for preparing a Funds Flow Statement:

The preparation of funds flow statement consists of 2 parts.
Statement or schedule of changes in working capital.
Statement of sources and Applications of funds.
Statement or Schedule of changes in Working Capital:

Working capital means the excess of current assets over current liabilities.
Statement of changes in working capital is proposed to show the changes in the
working capital between two balance sheets data. This statement is prepared with the
help of current assets and current liabilities derived from two balance sheets.
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Funds Flow Analysis

Working Capital = Current Assets Current Liabilities
While preparing a schedule of changes in working capital, it should be note that
a)
Increase in Current Assets, Increases the Working Capital.
b)
Decrease in Current assets, Decreases the Working Capital.
c)
Increase in Current Liabilities, Decreases the working capital.
d)
Decrease in Current Liabilities, Increases the Working Capital.
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Funds Flow Analysis
INDUSTRY PROFILE
OVERVIEW OF FOOD PROCESSING INDUSTRY
The food processing industry plays a vital role in the diversification and
commercialization of agriculture by ensuring value addition to agricultural produce,
generating employment, enhancing the income of farmers and creating markets for
export of agro foods. In short, the food processing industry provides linkages and
synergies between the industrial and agricultural sector. Change in lifestyle and food
consumption patterns and increase in the disposable income are some of the key
growth drivers for the industry.
FRUITS AND VEGETABLE PROCESSING

The total installed capacity of fruits and vegetables processing industry has
increased from 1.1 mn tones in January 1993 to 2.5 mn tones in January 2007. The
processing of fruits and vegetables is estimated to be around 2.2% of the total
production in the country.
MEAT and POULTRY PROCESSING

In meat and poultry processing sector, poultry meat is one of the fastest
growing animal proteins in India. Through 1991-2005, the estimated production was
1.5 mn tones, which has grown at a CAGR of 13%. Per capita consumption has grown
from 870 grams in 2000 to about 1.68 kg in 2005 and is expected to grow to 2 kg in
2009.
PULP and PULP PRODUCTS

India is the largest Pulp producing country in the world. According to the
Annual Report FY07 of Ministry of Food Processing Industries of India, Indian
production stands at 91 mn tones, having grown at a CAGR of 4%. Approximately 70
mn rural Indian households, primarily, small and marginal farmers and landless
laborers, are engaged in the business of Pulp production.
Marine Products
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Funds Flow Analysis

The country has a long coast line of over 8000 kms, 50600 sq kms of
continental shelf area and 2.2 mn kms of exclusive Economic Zone. Of the total value
of exports, 63.5% is contributed by frozen shrimps.
Among all, the US is the largest importer of Indian marine products,
contributing to 13% in quantity and 30% in value of total exports, as per the Ministry
of Food Processing Industries.
Grain Processing
Milling of rice, wheat and pulses form a part of the grain processing industry.
India is self reliant in grain production. It is the second largest rice producer in the
world, with a 20% share in the global production. Every year, India produces about
200 mn tones of different food grains. All major grains, such as paddy, wheat, maize,
barley, millets like jowar (great millet), bajra (pearl millet) and ragi (finger millet) are
produced in the country.
Alcoholic Beverages
India is the third largest market for alcoholic beverages in the world. The
demand for beers and spirits is estimated to be around 373 mn cases, according to the
Annual Report FY07 of Ministry of Food Processing Industries of India. The
alcoholic beverages industry provides considerable employment opportunities in the
agro processing industry.
Consumer Food Industry
Consumer food industries include packaged / convenience food aerated soft
drink and packaged drinking water. Packaged food consists of ready-to-eat and readyto-cook products, pastas, breads, cakes, pastries, biscuits, rice flakes, bun rolls,
noodles etc. As per the Ministry of Food Processing Industries, bread and biscuits
constitute the largest segment of consumer food with the production of about 4 mn
tones p.a. Of the total production of bread, 40% is produced in the organized sector
and the remaining in the unorganized sector. In production of biscuits, the organized
sector produces about 80% of the total production.
Policy Initiatives
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Funds Flow Analysis

The Government has undertaken several policy measures and initiatives. Some
initiatives can be named as follows:
Most of the processed food items have been exempted from the purview of licensing
under the Industries (Development and Regulation) Act, 1951.

In order to ease the availability of finance, the industry is included in the list of
priority sector.
Excise duty levied on the ready-to-eat products, instant food mixes, aerated drinks
and fruits and vegetables processing units is reduced.

Foreign equity up to 100% for most of the processed items except for alcoholic
beverages and those reserved for the small-scale units.

A large number of foreign collaborations have been approved.
Excise Duty of 16% on dairy machinery has been fully waived off and excise duty on
meat, poultry and fish products has been reduced from 16% to 8%.
Future Outlook
India has the potential of being the biggest producer within the food and
agricultural sector. In this respect, the country is endowed with a large production
base for a variety of food crops due to its varied agro-climatic conditions. The
Government of India under the Ministry of Food Processing Industries has adopted a
Vision 2015 which envisages:
Trebling the size of the processed food sector

Increasing level of processing of perishables from 6% to 20%
Value addition to increase from 20% to 35%
Share in global food trade to increase from 1.5% to 3%
The areas identified to develop the food processing industries in India are -
establishing mega food parks, modernization of abattoirs, cold chain/value addition

and preservation infrastructure, upgrading safety and quality of street food and
establishment / up gradation of quality control laboratories.
Policy reforms in the food processing sector are already in their advanced
phase, and have prompted several corporate like Reliance, ITC, Bhatia and Godrej to
invest in this sector. The growth in food processing industries would not only help in
the growth of agricultural sector, but also in the growth of these segments that may
have remained marginalized for a long time.
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Funds Flow Analysis

Cluster Insights
Cluster Insights are aimed at highlighting the performance and expectations of
the small and medium enterprises operating in the food processing sector in the
Kolkata cluster. The sample considered for this analysis are the food processing firms
profiled in this publication; the variables considered for analysis include operational
structure, business practices, and future plans.
Key characteristics of the Kolkata food processing cluster
Average revenue growth of the food processing companies in the last two years was
around 24%.
24% of the companies possessed quality certifications such as ISO 9000: 2000 and
others.
55% of the companies were involved in exports.
41% of the profiled companies generated more than 50% of their total revenue from
the international market

Asia (excluding Middle East) is the most preferred export destination.
On an average, the companies operated at a capacity utilization of around 87%.
59% of the companies were established prior to 1990. Around 38% and 3% of the
companies were established between1990-2000 and post 2000 respectively.
Ownership Pattern
The ownership pattern of food processing companies was inclined more
towards public limited companies.
Around 60% of the public limited companies fall in the Rs 10 100 mn turnover
bracket.
Private limited companies in the Kolkata cluster recorded an average revenue growth
of 25% in the last two years.
Sub Segment
Most of the companies in the Packaged / convenience foods segment fall in
the turnover bracket of Rs 10 100 mn, followed by Pulp and Pulp products segment.
60% of the companies in packaged / convenience foods segment were

involved in exports.
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Funds Flow Analysis
Companies dealing in Pulp and Pulp products operated at an average of 87%

of their installed capacity.
Turnover Bracket
25% of the companies in the turnover bracket of Rs 10 100 mn earned more

than 50% of their revenue from the overseas market.
The companies in the turnover bracket of Rs 100 - 250 mn operated at an

average of 88% of capacity utilization.
Growth and Future Plans
The food processing companies in Kolkata cluster expect an average revenue

growth of 33% in the next two years.
Notably, 17% of the profiled companies are expecting more than 50% revenue
growth in the next two years.
Most of the companies have envisaged future plans. The plans range from
capacity expansion and modernization, to enter into new markets and
diversification. For instance, 40% of the companies are planning to tap new
markets while 30% are willing to expand the plant capacity.
Cluster benefits and hindrances

Marketing initiatives, quality up gradation and funding from the financial
institutions were the dominant benefits derived by the companies operating in the
cluster.
Changing face of the Indian food processing industry
While India's food processing industry features an array of products like fruit
and vegetables, meat and poultry, Pulp and Pulp products; other consumer product
groups like confectionary, chocolates and cocoa products, soya-based products,
mineral water and high protein food also falls under its purview. As per the figures
given by the National Committee on Food Processing and Regulatory Affairs, the
food processing sector received investments worth USD 144 million between 2007
and 2008, as against USD 5.7 million in the previous year. During April 2008 January 2009, the sector received USD 760 million worth of investments.
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Funds Flow Analysis

The Food Processing Industry: In Retrospect With an aim to streamline the meat
and poultry processing industry in India, the government has launched the National
Meat and Poultry Processing Board (NMPPB) in New Delhi on February 2009. The
new board will have 19 members and will address issues related to the production of
clean and hygienic meat and meat products. The board will also go a long way in
helping the rural economy through employment generation. Further, NMPPB will
work towards raising domestic standards in meat and poultry processing to
international levels, developing uniform and effective meat quality testing systems
and addressing environmental pollution issues arising out of the conditions, which is
now prevalent in the meat industry. The cabinet had given the approval for the board's
set up, with an outlay of Rs 14.64 crore (Rs 146.4 million)
Setting up Mega Food Parks
Similarly a sum of Rs 3,700 crore has been assured in order to set up 10 mega
food parks in the first phase of the 11th five-year Plan. This includes Rs 2,500 croreinvestment from individual units, Rs 700 crore from special purpose vehicles (SPVs)
and the Centre contributing Rs 500 crore. A total of 30 mega food parks are expected
to be set up during the 11th Plan. Each food park is expected to have 30 units, which
are collectively expected to attract Rs 250 crore. The SPV, which will require an
investment of Rs 120 crore, will include the government's contribution of Rs 50 crore.
Hence, each park will attract an investment of Rs 370 crore. Apart from private
entities, government agencies are also allowed to be part of the SPV.
The parks will be set up in Chittoor (AP), Chikmagalur (Karnataka),
Dharmapuri (Tamil Nadu), Pune (Maharashtra), Jalandhar (Punjab), Jangipur (West
Bengal), Rai Bareilly (Uttar Pradesh), Haridwar (Uttarakhand), Nalbari (Assam) and
Ranchi (Jharkhand). Private partners, who have taken part in the SPV, include
Patanjali Ayurved of Ramdev fame in Uttarakhand, Shrei Infrastructure in West
Bengal, Unity Infra in Punjab and Chordia Food Products in Maharashtra. For the
SPV to be approved, it should have a minimum of five members, out of which one
should be from the food processing industry.
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Funds Flow Analysis

Some staggering facts
India has 184 million hectares of cultivable land and the country produces 90
million tones of Pulp (highest in the world), 150 million tones of fruit and vegetables
(second largest), 485 million livestock (largest in the world), 204 million tones food
grain (third largest), 6.3 tones fish (third largest), 489 million poultry and 45,200
million eggs. In spite of having a vast production base, the processing level is low two per cent in fruits and vegetables, 26 per cent for marine products, six per cent for
poultry and 20 per cent for buffalo meat. With only 1.5 per cent share of India's export
of processed food in global trade; there lies immense potential for investment and
development in this sector.
Indian Grape Processing Board
In early 2009, the government launched the Indian Grape Processing Board
(IGPB) in Pune, Maharashtra. This board will provide a platform for the advocacy of
the Indian wine sector. The board's major objectives are to formulate a vision and
action plan for the Indian wine sector's growth including research and development
for quality up gradation in new technologies/processes; to collaborate and advise
wine-grape growers, the wine processing industry, central and state governments on
commercial, regulatory and technical issues related to the Indian wine sector,
including best practices in viticulture; to increase farmers' income and employment
generation, with a particular focus on rural areas; to encourage cluster farming,
contract farming and farm diversification; to bring the benefits of value addition to the
farming community and farmers fetching remunerative prices for their produce;
coordinating with premier Research and Development (RandD) institutes in order to
identify and develop appropriate root-stock and wine varieties of grapes suited for
different geo-climatic regions of India.
Research and Development
In August 2009, Sahai said that the government was planning to formulate a
separate policy for India's food processing industry and develop RandD activities in
the sector. The minister addressed this topic at a workshop on 'New Perspectives in
Research and Development in the Food Processing Sector,' jointly organized by the
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Funds Flow Analysis

ministry and the Federation of Indian Chambers of Commerce and Industry (FICCI).
The proposed new policy would lay special emphasis on PPP for giving a commercial
orientation to RandD activities in this sector. The ministry intends to chart out a
roadmap for scaling up RandD activities in the sector. It will also focus on technical
capacity building for research with the ultimate aim of increasing the processing of
perishables from the 2007 - 08 level of 10 per cent to 20 per cent by 2015 and raise
value addition (of agricultural produce) from 25 per cent to 35 per cent.
Acceptance and Future
Food service industry professionals opine that the product expectations have
increased from institutional clients, suppliers and retailers, especially with regards to
the new technology that augments itself within the food processing sector. Food
service players find it relatively easier to gain ground, now, within the market, thanks
to the spurt of trade shows and exhibitions, which showcase the latest offerings within
the FandB sector. "I believe there is a paradigm shift in the way end consumers and
the industry perceives the food processing industry. For example, we have observed
that people are willing to accept processed frozen foods now. A few institutional
players have also changed/modified their style of operations, food preparation and
service to match the prerequisites of processed food. One cannot rely on the seasonal
availability of certain exotic fruits and vegetables, hence, frozen foods serve as the
most ideal option for such requirements," explained, Hrishikesh Bhatjiwale, Vice
President - Sales and Marketing, Tastee Choice.
Absence of a market strategy, inadequate export infrastructure and unstable
supply base are giving Indian mango growers a run for their money, more Soils,
Nutrition, and Fertilizer in the international markets where the Indian king of fruits is
still to take its place. While India produces over 11m metric tones of mangoes
annually around 63% of world produce, its export share is just 0.11%. However,
APEDA has identified UK, Germany, the Holland, France, Italy and Belgium for
mango exports and plans aggressive marketing strategies there. APEDA is making all
efforts to make available latest packaging and processing technology for our produce
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Funds Flow Analysis

India is one of the largest producers of Tropical fruits in the world and has
established the image in the international market. Due to its own advantages in
climatic conditions, India can produce wide variety of fruits and vegetables.
Unfortunately, the processing technologies and storage facilities, available are still
primitive and enough importance has not been accorded for this industry, which has
tremendous growth potential. Only recently, both the central and state governments
have realized the importance and taken steps through wide variety of measures for the
growth of the industry. Andhra Pradesh, where the plant is coming up, is known for
variety of quality fruits particularly for Mango, Papaya, Guava, etc.,
With the support of Govt. bodies, many small-scale industries (overall
capacity of upto 1000M.Tons of fruit pulp by canning process) have been established
since 1970 by leading formers and fruit traders for processing the tropical fruits. In
the early 1970s India started exporting this tropical fruit products to Gulf countries.
However, could not able to meet advanced international market requirements to enter
into Europe and American countries due to inferior product quality. Even the response
in the GULF countries has not seen the potential growth year by year due to quality
related issues. From the year 1995, Indian manufacturers realized on the technological
gap in meeting the international standards when compared with competitive producers
of same products from North America, Peru, Brazil and Egypt. Necessary steps were
then initiated in establishing the new technologies called Aseptic Fruit Pulp to
compete in international markets. Nevertheless, today there are many small scale
industries producing low quality fruit pulps (canned pulp) and struggling to approach
advanced international markets. Though, the successful organizations like Foods and
Inns, Clean foodsetc could establish Aseptic process with latest technologies at that
point of time, the plants have not been designed completely to meet international
standards.
Mango, the most important fruit of India, is grown in an area of 1.23 million
ha with an annual production of 10.99 million tonnes, which accounts for 57.18 per
cent of the total world production. This paper presents information on area and
production, cultivars, hybrids and clone, agro techniques, disorders, insect pests and
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Funds Flow Analysis

diseases, harvest and postharvest management, export, problems and prospects of
growing mango in India.
Top producers of Mangoes, Mango grafts,

Guavas, 2010-11
Country
India
Production in
millions of tons
~ 13.6
People's Republic of China

Thailand
Indonesia
Mexico
Pakistan
Brazil
World total
Key ~ 2011 data
4.2
2.5
2.2
~ 1.9
~ 1.8
~ 1.2
34.9
India ranks second, next only to China, with a production of 47 million tonnes
from an area of 4.13 million ha during the year 2011 and accounting for 8.04 per cent
of the total area under fruits in the world (51.36 mill ha) and 9.34 per cent of the total
world fruit production (503.28 million tonnes). However, Banana, orange grapes and
apple were the major fruits of the world accounting for 14.45, 13.23, 13.01, 12.36 per
cent of total world fruit production. Mango accounted for only 3.11 of the total area
under the fruits and 2.15 per cent of the total world fruit production. The total
production of mango in the word was 26.11 million tonnes out of which India alone
produced 10.02 million tonnes, accounting for 38.38 per cent and ranked first. The
total area production of mango in the world was 26.574 million tonnes from an area of
3.69 million ha out of which India alone accounted for 40.64 per cent in terms of
production and 43.36 per cent in terms of occupied area, making it the largest
producer of mangoes in the world. China, Thailand, Mexico, Pakistan, Indonesia,
Philippines and Brazil were other important mango producers accounting for 13.48,
6.40, 5.65, 4.10, 3.79,3.64 and 3.20 per cent of the total world mango production,
respectively. Amongst the commercial producers of mango, the highest productivity
of mango was found to be in Brazil, followed by Pakistan, Mexico and China. Highest
productivity of mango was observed in Cape Verde Is. (45.00 MT/ha), followed by
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Funds Flow Analysis

Samoa (40.00 MT/ha), Guatemala (26.75 MT/ha), Palestine (25.00 mt/ha), Peru
(22.76 MT/ha) and Israel (20.00 Mt/ha). However, the productivity was lower in the
countries producing mangoes commercially. Amongst the commercial producers of
mangoes, the Brazil had highest productivity viz. 12.50 Mt/ha followed by Pakistan
(10.37 MT/ha), Mexico (8.65 Mt/ha) and China (8.56 Mt/ha). The productivity in
India was only 6.75 MT/ha, which was considerably lower vis a-vis other countries of
the world. Concerted efforts are to be made to increase the productivity of mango to
meet national standards and increase its availability for the domestic as well as export
market.
Area, Production and productivity of mango in major mango producing
countries of the world during 2011
Sl.
No.
Area
Countries
Mill. ha
Production
Prop.
(Mill.
Prop.
(%)
tons)
(%)
Productivity
MT/ha
India
1.6
43.36
10.8
40.64
6.75
China
0.419
11.35
3.582
13.48
8.56
International Markets for Indian Mango

Asian producers find it easier to expand sales to the European Union.
Europes acceptance of different varieties is greater, because of a large demand from
Asian immigrant groups. Phytosanitary restrictions are less stringent. Transportation
costs are not as big a factor in exporting mangoes to the European Union as in
exporting to the United States market: for example, India and Pakistan are able to
compete with non-Asian suppliers to the European Union, whereas proximity gives
Mexico and Haiti a clear advantage in supplying to the United States market.
Fifty-four percent of European Union imports enter during the periods May to
July and November to December, with peak imports in June. French imports reach
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Funds Flow Analysis

peak in April and May, whereas United Kingdom imports are concentrated during the
May to July. German imports are spread more evenly throughout the year. Of the top
suppliers, Brazil provided chiefly during the period November to December, the
United States during June to October, South Africa during January to April and
Venezuela during April to July. Pakistan supplies the majority of its exports to the
European Union during June and July; Indian exports take place mainly during the
month of May. Although a lions share of Indian mango goes to the Gulf countries,
efforts are being made to exploit
European, American and Asian markets. About 13,000 MT of Alphonso
variety is exported to Middle East, UK and Netherlands every year.
The different products of mango which are exported include mango chutney,
pickles, jam, squash, pulp, juice, nectar and slices. These are being exported to U.K.,
U.S.A., Kuwait and Russia. Besides these, the fresh mangoes are being exported to
Bangladesh, Bahrain, France, Kuwait, Malaysia, Nepal, Singapore and U.K.
Hyderabad, March 31: Despite an expected low production of mangoes this
year, the total exports of mangos from Andhra Pradesh is likely to see a 100 per cent
jump over last year. Unlike last year, due to adoption of better pest management
techniques and awareness of qualitative produce, the mango growers from the state
are hoping for better price realization from other countries during this season.
"Last year, the total production of mangoes was about 32 lakh tonnes with
instances of three times of flowering during the season. This led to good production
but this year the output is expected to fall by about one-third over last yearand#8217;s
production," according to sources. "But low volume in production will not reflect on
the exports," said APEDA officials. However, it is too early to predict on exports. The
production is based on the rate of flowering and climatic conditions during harvest
period, they said. The reasons...
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Funds Flow Analysis
MANGO PRODUCING STATES IN INDIA
STATE/UT'S
ANDAMAN NICOBAR
ANDHRA PRADESH
ASSAM
BIHAR
CHANDIGARH
CHHATISHGARH
D and N HAVELI
GOA
GUJARAT
HARYANA
HIMACHAL PRADESH
JAMMU and KASHMIR
JHARKHAND
KARNATAKA
MANGO
Area (ha)
Prod.(Mt)
0.30
2.60
480.40
4058.30
4.60
46.50
146.00
995.90
0.00
0.40
43.30
191.80
1.20
12.50
4.60
7.60
121.50
856.70
9.10
64.60
38.70
24.00
10.70
12.10
15.10
254.30
153.80
1694.00
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Funds Flow Analysis

KERALA
MADHYA PRADESH
MAHARASHTRA
NAGALAND
ORRISA
PONDICHERRY
PUNJAB
RAJASTHAN
TAMIL NADU
TRIPURA
UTTAR PRADESH
UTTRANCHAL
WEST BENGAL
TOTAL
63.80
14.20
474.50
0.30
177.60
0.40
6.40
5.90
132.70
4.30
276.40
38.40
88.10
2312.30
373.20
127.80
597.00
0.40
577.50
6.80
93.50
93.00
636.30
13.20
3588.00
120.80
578.00
15026.80
COMPANY PROFILE
History of Food and Inns Pvt. Ltd.
The division combines people with vast experience in agric-trading with
the FOODS AND INNS (P) Ltd Groups credibility to justify its premier standing
in the trading arena. The division was set up in 1967 and since then has handled a
wide range of products - such as Sesame Seeds, Processed Fruits, Food grains,
Aqua etc.
FOODS AND INNS (P) Ltd began its fruit processing operations in early
70s.However fruit processing operations have been given a special thrust since the
last season with an emphasis on developing strategic partnerships across the value
chain especially fruit procurement and processing. FOODS AND INNS (P) Ltd has
established it's presence as a reliable and competitive exporter to Coca Cola, USA,
Western Europe, Far East, Middle East etc.
Background of Food and Inns Pvt. Ltd
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Funds Flow Analysis

Situated at Chittoor in Andhra Pradesh, the mango belt in India, FOOD
AND INNS (P) Ltd (FIL) is a 100% Export Oriented Unit (EOU) processing
Tropical Fruit Purees, Concentrates and Fresh Fruits FOOD AND INNS Ltd was
started keeping in mind the local farming community wealth. The farming
community is an integral part and forms the backbone of the organization. In its
effort to be a forerunner in the chosen areas of business in terms of best practices
in quality and technology, FIL plans to benefit armors, the industry and the nation
in a phased manner.
FOODS AND INNS Ltd believes in empowering farmers by providing
technical assistance from research institutes in the food industry to support the
farmers in achieving better quality and higher yields by developing the gardening
and harvesting techniques. Further to educating farmers with latest horticultural
techniques, FOODS AND INNS LTD is encouraging farmers to mobilize the fruits
directly to the factory, thereby minimizing the fruit handling damages and high value
realizations. The first phase has been completed, by setting up of state-of-the-art
fruit processing plant to produce natural tropical fruit puree and concentrates.
Board of Directors
S. No
Name of the Director
Field Marshal Sam Manekshaw - M.C.
Chairman
Mr.Utsav Dhupelia
Director
Mr. D.B. Engineer
Solicitor
Mr.Raymond Simkins
Foreign Director
Mr.C.M.Maniar
Solicitor
Mr. D.D. Trivedi
Ex. IIM Professor
Mr. M. B. Dalal
Director
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Funds Flow Analysis

Mr. Utsav Dhupelia
, a Chartered Accountant from U.K., looking after the
routine affairs of the company, is the brain and brawl for taking the companys
turnover from Rs.5Crores (USD1.1 MIO) to Rs.70Crores (USD 16 MIO) giving the
status of government recognized EXPORT HOUSE.
With the back up of technical and managerial support staff, the state of art
technology implementation, innovative R and D and Lab facilities, the doyen
guidance of Mr. Utsav coupled with the contribution of other directors, the company
is poised for a steady and continuous growth graph moving upwards in all Para
meters.
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Funds Flow Analysis
Market Presence
European Union
United States of America
Canada
Australia
Middle East including Iran and North Africa
Japan and South Korea
Share of Countries Market
Country Name
Market Share
Europe
55%
North America and Middle East
25%
USA and Canada
10%
Japan and South Korea
10%
Facility
FOODS AND INNS Ltd processing facility is located in Chittoor, spread
over an area of 15 acres. This place has been earmarked to host Integrated Food
Complex of International standards. The facility currently has a tropical fruit Puree /
Concentrate processing plant and the pack house for preparing the Fresh Fruits and
Vegetables.
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Funds Flow Analysis
Cutting Edge Technology

FOODS AND INNS (P) Ltd plant is equipped with state-of-the-art fruit
puree processing aseptic filling line of SIG- Mizzen, Italy to produce natural fruit
pulps and concentrates. The plant has one of the India's single largest fruit
processing lines -10 TPH ripen fruit processing with Aseptic Packaging.
Initiatives Span the Following Disciplines
PLC operated equipments for better control over monitoring and

operations with supervisory units.
Two stage washing of fruits to ensure HACCP quality requirement.
Two-stage sterilization to retain the natural flavor and aroma.
High speed advanced Mono block aseptic filling machine supplied by

SIG Mizzen.
Integrated Enterprise Resources Planning system is in place to automate

business processes and provide data for analysis and reporting, allowing
a closer control on quality and operations.
Efficient Plant Layout
Minimal drop in power and steam transfer.
Straight-line process flow design to maintain the hygiene and control in

respective areas.
Special food grade self-leveling epoxy flooring to maintain optimum

hygienic conditions.
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Funds Flow Analysis
Curved corners and food grade epoxy painted walls to avoid dust
accumulation and to facilitate easy washing.
Advanced high raise insulated roofing with double layer GI Sheeting

with air extractors to maintain temperature inside the plant.
Utility lines are routed outside the plant to keep the interiors free from
dust accumulation.
Valuable Industrial Expertise

FOOD AND INNS (P) Ltd is backed with strong support and service from its
team of highly qualified technical personnel and domain experts with perceptive
knowledge and skill. Powered by priceless hands-on experience these professionals
are upgrading themselves continuously to identify and introduce improved and
innovative product offerings that would delight customers worldwide and comply
with the leading global quality standards.
Pure and Concentrate Facility

The fruit processing aseptic line is from SIG-Mazzini of Italy. The line has a
capacity to process 10 metric tones per hour ripened fruits. The processing line is
fully integrated and controlled by PLC.
Pack House
FOODS AND INNS (P) Ltd has a set up a Fresh fruit and Vegetable
processing facility from Grief, Spain. Fresh fruits including mangoes, bananas are
processed along with tropical vegetables like Okra, Egg plant, Lemon, Bitter gourd
etc. The facility also holds ripening chambers, pre cooling chambers and cold
storage to handle fresh fruits and vegetables.
Vapor Heat Treatment

To enable Fresh Mango exports to countries like Japan and Korea, FOOD
AND INNS (P) Ltd has commissioned the VHT facility. This ensures irradiation of
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Funds Flow Analysis

the fruit flies in the fresh fruit. FOOD AND INNS (P) Ltd is the first private
organization to set up this facility in the country.
Water Management
Water is an essential and precious natural resource. It is a natures gift.
Without water there is no life on the earth. It is as important to the fruit processing
industry as to the living being. But, water is becoming scarce year by year due to
increase n its consumption in industries and agriculture sectors and indiscriminate
use /wastage by human beings, therefore, it needs a integratedand scientific approach
for its management to use it so that undesirable wastage is avoided which helps us to
save water for right utilization .
Stage of Use Of Water To The Best Effect In Our Factory

Our main source of water is bore wells. The water is potable. Water from all
bore wells is collected in a sump. From there it is pumped to over head tank to supply
to various locations of use. To manage appropriately and conserve the water, we are
taking following steps at various locations of its use:
Fruit Washing
The water is re-circulated after filtration up to it becomes dirty. This water is
chl0rinated to control the contamination by continuous dosing of chlorine in the
washing tub.
Steam Generation
Water for boiler feeding is treated in water softener to reduce the hardness.
The steam condensate of evaporator is recycled to boiler to save water and energy as
condensate will have high temperature.
The Best Effect in Our Factory
Steam condensate from other heating equipments and Vapour condensate from
pulp concentration is collected in a tank to use in crate and floor cleaning.
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Funds Flow Analysis
Floor and equipments are cleaned by compressed water jet to conserve the
water.
Treated effluent is used for civil construction and gardening.
Flow meters are installed at location of major use to have control over water
utilization.
UV sterilizer is installed on main line of water, which feed to processing to

sanitize the water.
The water to be used for blending in product is treated in r o plant.
Drinking water is passed through zero-b filter.
Waste Management
Our factory is equipped with aerobic effluent treatment plant of 250kl
capacity. Effluent from all locations of water use is collected through inter connected
drains in ET plant. It is aerated here and transferred to settlement tank for
sedimentation of solid particles. The treated effluent is sent to oxidation pond. From
pond, water is used for gardening and civil construction. The sludge is transferred to
drying bed. The dried sludge is used as manure in our garden. The main feature of our
company is that no effluent treated or untreated is released in public drains and
therefore, does not pose any danger to surrounding environment and public.
Solid Waste Management
Seeds of fruits
Stem ends and skin/peel of fruits and vegetables
Pumice-consists of fibbers and embedded pulp.
Spoiled fruits and vegetables
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Funds Flow Analysis

The seeds and peels of good fruits are passed second time through a pulped to
remove the remaining pulpy portion. The pulp extracted so and pumice are mixed and
given an enzymatic treatment and centrifuge to remove the extraneous materials so
that pulp can be used for making concentrate. This helps in improving the recovery
out of fruits.
Certifications Of International Quality Standards

FIL's quality and business objectives are designed to challenge the
organization through continual improvement and a zeal for results. At FIL quality
determines not only the end product but processes and operations at all levels. The
company's laboratory is equipped with the latest testing facilities to perform all
necessary tests. Frequent and stringent quality checks are carried out for Physical,
Chemical, Organoleptic and Microbial parameters and immediate corrective
measures are carried out on detection of variance in parameters, assuring a high
quality end product. As a mandatory procedure, all finished products are analyzed
with extreme care before clearance by FIL's quality assurance staff.
Our Certifications Include
HACCP (Food Safety Certification) by TUV, Germany
ISO 9001:2000 (Quality Management System) by TUV, Germany
Kosher by Star-K, USA
Sure Global Fair (SGF)
Halal Certification
Mango Pulp Industry Hopes

Mango pulp production to reach 75,000 tones by 2010
Mango is raised in 36,000 hectares in chittoor district
Mango pulp processed annually is 50,000 tones
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Funds Flow Analysis

Farmers have to go to Bangalore, as there is no testing facility in Chittoor
Farmers are not getting fair price, even if there is a rise in prices in global
market
Customer Focus
Loyalty and a strong relationship in business are built out of years of
experience in a particular industry. FOODS AND INNS (P) Ltd expertise in the
business and its contacts with Agents\Brokers, Blender-bottlers, End User, Offshore logistical service providers has made the supply chain process extremely
competitive.
Given our renewed emphasis on this product line we are strengthening
relationships in key markets across the buyer spectrum, understanding unique
requirements and delivering value to select global customers.
PRODUCT PROFILE
Fruit Products
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Funds Flow Analysis
Alphonso
Totapuri
Guava
Papaya
Products Of Vegetables
Fruit Seasons
Jan Feb
Mar
Apr
May
June
July
Aug
Sept Oct Nov
Dec
Mango
Papaya
Guava
NEED FOR THE STUDY

The sources of funds for a business could be from both the long term and short
term. Any business to survive and growth in the competitive market, funds are needed
not only to meet its long-term financial needs but also short-term requirements. The
long-Term sources comprising of share capital, long term debt inclusive of debentures
etc., while the short term sources comprises of the short term loans, working capital
collection from commercial banks, loans from the call money market and among
these fall the sales which has two phases the cash sales and the credit sales.
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Funds Flow Analysis

The study is aimed at analyzing the financial position of Food and Inns P. Ltd., and
also identifying the inflow and outflows of funds i.e., source and application of funds.
This study will evaluate the way of the firms financial condition how effectively the
funds are mobilized and utilized in the company for the financial year ending 31.3.07,
31.3.08 and 31.3.09. 31.03.10This study will thus help the company in maintaining
better financial performance, which is followed by a blend of findings and
suggestions.
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Funds Flow Analysis
OBJECTIVES OF THE STUDY

To assess the inflow and outflow of the Organization.
To study and analyze the changes those have taken place in the financial
position of the company.
To analyze the funds flow operations.
To identify sources and applications of the funds.
To find out operating efficiency of the organization.
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Funds Flow Analysis
SCOPE OF THE STUDY

The scope of the study covers the previous five years financial reports of the
company.
An extensive study is done on the investment made FOOD AND INNS
PVT LIMITED on its funds flow statements and its adequacy, and the
factors determining that investment.
The study concentrates on the liquidity position of the firm and the brief
study.
The technique used by the firm of the management of its current assets and
sources though which the finance of the funds flow statement in availed
for the firm.
The study covers all the financial information of the firm.
LIMITATIONS OF THE STUDY

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Funds Flow Analysis

The funds flow analysis of the organization fully depends upon the secondary
data. The primary data were used only to throw light on the company's history and
growth. Thus the following are the main limitations of the study.
These statements were over all reports (2005, 2006, 2007, 2008.2009).
Hence it is a postmortem analysis of the financial statement.
The figures taken from the financial statement like profits and loss
accounts and balance sheets were historical in nature.
Time value of money is not being considered.
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Funds Flow Analysis
RESEARCH METHODOLOGY
Research Design
To analyze the working capital, trends and for the purpose of ratio analysis,
Financial Analysis has to be carried out. Financial analysis is the analysis and
interpretation of financial statements and a proper financial analysis can give the users
better insight about financial strengths and weakness of the firm. Financial analysis is
the starting point for making plans, before using any sophisticated forecasting and
planning procedure.
For the purpose first the required information has to be collected like for ratio
analysis and owing capital management analysis, income statements, trading and
profit and loss accounts, balance sheet, funds flow statement, etc. are to be collected
the, the data in the statements is to be properly organized and arranged and then
relationship is established between financial statements and finally conclusions are
drawn from the interpreted information and presented in the form of reports.
Research Methodology
Research involves getting tools, ideas from texts, journals, books, records,
Websites. The collection of data is an important aspect of Research.
The sources of information fall under two categories.
Internal Sources
Every company keeps certain records such as accounts, records, reports, etc.
These records provide sample information for research.
External Sources
When internal records are insufficient and required information is not available
the organization the organization depends on eternal sources.
The external sources of data are:
Primary Data
Secondary Data
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Funds Flow Analysis

Primary Data
The data collected for a purpose in original and for the first time is known as
primary data. The data collected by the researcher himself to study a particular
problem.
The primary data of the study is collected through interaction and discussion with the
officials and the staff at FOODS AND INNS, CHITTOOR.
Secondary Data
The data which is collected from the published sources that is for the first time
is called secondary data.
The secondary data for the study is collected from the annual reports of
FOODS AND INNS from 2006 to 2009.
Data Analysis
Data analysis is done by implementing various tools like fund flow analysis,
trend analysis, etc.
REVIEW OF LITERATURE
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Funds Flow Analysis
MEANING OF FUNDS FLOW STATEMENT

The basis for financial planning, analysis and decision-making is the counting
reports.
Two basics financial statements prepared for the purpose of external
reporting to owners, investors and creditors are; balance sheet \annual report
\statement of financial position and profit and loss account \income statement)
THE BALANCE SHEET
The Balance sheet shows the financial condition or the state of affairs of a firm
at a particular point of time. More specifically the Balance sheet contains detailed
information about the firms Assets and Liabilities. Assets represents economic
resources possessed by the firm while the liabilities are the amounts payable by the
firm. The Balance sheet gives concise summary of firm resources and obligations and
measures the firms liquidity and solvency.
PROFIT AND LOSS ACCOUNTS
The profit and Loss A\c shows the profitability of the firm by giving details
about income and expenses. It is simply income and expenditure account. Revenues
are benefits, which customers contribute to the firm in exchange of goods and
services. The cost of economics resources used in providing goods and services to the
customer are called expenses. Profit and Loss Account provides a concise summary of
firms revenues and expenses during the period of time and measures its profitability.
The above two statements provide useful information regarding the operations
of the firm. They fail to explain the financial data required for financing and investing
decisions by the management i e causes for changes in Assets and Liabilities and
Owners equities. They do not indicate the movement of funds between Sources and
uses from the end of the period to the end of next periods. It is therefore, necessary to
prepare an additional called Funds Flow Statements to overcome the above
difficulties.
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Funds Flow Analysis

FUNDS FLOW STATEMENTS
The statement showing the sources and Application of the funds known as
Funds Flow Statement. It is a condensed report of the how the financial resources
have been used during the periods covered by the statement as it summarizes the
financial activities for period of time.
NEED AND IMPORTANCE OF FUNDS FLOW STATEMENT

ANALYSIS OF FINANCIAL OPERATION
A Funds Flow Statement shows how the resources have been obtained and the
uses to which they are put.
The funds statements determining the financial consequences of business
operation. It also useful ion guiding whether the firm has expanded at too fast rate and
whether financing is strained, it also point out to the effectiveness with which the
management has handled working during the period under review.
EVALUATION OF THE FIRMS
This statement can consist the financial manager in planning intermediate and
long-term finance for obtaining sources in the further and determining how they are to
be used. That is analysis of the major sources of funds in the past reveals what
positions of the firms growth was financed internally and what position externally.
COMPARISON WITH THE BUDGET
The statement defines the past flow of funds and gives insight in to the
evolution of the present situation. It provides certain useful information about the
firms. Financial policies to the outside world like bankers, government, etc;
Funds Flow statement is becoming popular with; the management because it
helps to explain why in spite of earning sizable amount of profits, the company is
experiencing difficulty in making payments to creditors, the rate of dividend on
equity; shares can not be increased and the bank balance is getting thinner.
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Funds Flow Analysis

The Funds flow Statements has an analytical value and is an important
planning tool. It helps in guiding the destiny of the business by enabling the
executives to visualize the movements of funds that constantly takes place.
This statement also helpful in working capital requirements. It highlights the
future need for funds and provides sample time to work out suitable arrangements.
The funds flow statement shows what portion externally.
The analysis of funds flow statement for the future is externally available to
the executive in planning the intermediate and long term financing of the firm.
USES OF FUNDS FLOW STATEMENT
It helps in the analysis of financial operations of the company.
It reveals the financing and investing policies followed by the company.
It answers many un answered questions of general interests.
It helps in proper allocation of resources.
It is an important management tool for the financial planning.
It helps in knowing the overall credit worth users of the firm.
Procedure for Preparing Funds Flow Statement
The Fund Flow Statement consists of the following
1. Preparation of statement of changes in Working Capital.
2. Calculation of Funds / (loss) From operations.
3. Finding out the hidden transactions or changes in non-current assets and noncurrent liabilities.
4. Preparation of statement showing Sources and Application of Funds.
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Funds Flow Analysis

Statement of Changes of Working Capital
The increase or decrease in Working Capital can be calculated by preparing
the schedule of changes in working capital.
Working Capital represents the excess of current assets over current liabilities.
Several items of all current assets and current liabilities are the components of
Working Capital. In order to ascertain the Working Capital at the beginning and at the
end of the period and to measure the increase or decrease therein it is necessary to
prepare a Statements or Schedule of Changes Working Capital.
particulars
Previous year
Current
Effect on Working Capital
year
A. Current assets
Rs.
Rs.
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
XXXX
advances
XXXX
XXXX
A. Total current Assets
XXXX
XXXX
XXXX
XXXX
Cash in hand
Cash at bank
Sundry debtors
Increase
Rs.
Decrease
Rs.
Loans and
B.Current liabilities
Bills payable
Income tax payable
Bank OD
Provisions
Trade creditors
TOTAL
XXX
XXXX
While preparing a schedule of changes in Working Capital it should be noted

that:
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Funds Flow Analysis

1. (a) An increase in Current Assets increase in Working Capital.
(b) A decrease in Current Assets decrease in Working Capital.
(c) A increase in Current Liabilities decrease in Working Capital
(d) A decrease in Current Liabilities increase in Working Capital.
(e) An increase in Current Assets and increase in Current Liabilities does not
affect Working Capital.
(f) A decrease in Current Assets and decrease in Current Liability does not affect
Working Capital.
(g) Changes in fixed (no-current) assets and fixed (non-current) liabilities affect
working capital.
2. The changes in all current assets and current liabilities are merged into one
figure only either an increase or decrease in working capital over the period
for which funds statements has been prepared. If the working capital at the
end of the period is more than the working capital at the beginning thereof.
3.
The difference is expressed as increase in working capital. On the other

hand, if the working capital at the end of the period is less than at the
commencement, the difference is called decrease in working capital.
Working Capital = Current Assets Current Liabilities

Current Assets
The expression current assets denotes those assets, which are continually on
the move. Since they are constantly in motion, they are also known as the circulating
capital of the business. These assets can or will be converted into cash during a
complete operating cycle of the business. Current Assets include.
a. Stock-in-trade or inventories
b. Debtors
c. Payments in advance or prepaid expenses
d. Stores
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Funds Flow Analysis

e. Bills receivable
f. Cash at bank
g. Cash in hand
h. Work-in-progress, etc.
Current Liabilities:
Current liabilities are those liabilities, which are to be paid in the near future, i.e.,
during a complete operating cycle of the business. Such liabilities include:
a. Trade Creditors
b. Accrued or outstanding expenses
c. Bills Payable
d. Income-tax payable
e. Dividends declared
f. Bank overdraft.
Note:- Some experts are of the opinion that as bank overdraft has a tendency to
become more or less permanent source of financing, and hence it need not be included
among current liabilities.
Statement of Sources and Application of Funds
1. Funds from Operations
It is an internal source of funds. Funds from operations are to be calculated as
per the method stated above.
2. Funds from long-term loans
Long-term loans such as debentures, borrowings from financial institutions
will increase the working capital and therefore, there will be inflow of funds.
However, if the debentures have been issued in consideration of some fixed assets,
there will be no inflow of funds.
3. Sale of fixed assets
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Funds Flow Analysis

Sale of land, buildings, and long-term investments will result in generation of
funds.
4. Funds from increase in share capital
Issue of shares for cash or for any other current asset or in discharge of current
liability is another sources of funds. However, shares allotted in consideration of
some fixed assets will not result in funds. However, it is recommended that such
purchase of fixed assets as well as issue of securities to pay for them be revealed in
Funds Flow Statement.
5. Decrease in Working Capital
Decrease in working capital is the result of decrease in current asset or
increase in current liabilities. In both the cases inflow of funds takes place. Suppose
stock, a current asset reduces from Rs.15,000 to Rs.12,000 the decrease of Rs.3,000 is
assumed to be due to the disposal of stock which undoubtedly brings funds into the
business. In the same way, increase in current liabilities mean lesser payment, so
retaining funds is also a source.
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Funds Flow Analysis
Funds Flow Statement
Sources
Rs.
Applications of Funds
Rs.
Issue of Shares
xxx
Redemption of Redeemable
xxx
Preference Shares
Issue of Debentures
xxx
Redemption of Debentures
xxx
Long term
xxx
Payment of Other Long-term loans
xxx
Borrowings
xxx
Purchase of Fixed Assets
xxx
Sale of Fixed Assets
xxx
Operating Loss
xxx
Operating Profit
xxx
Payment of Dividends taxes, etc.
xxx
Decrease in Working
xxx
Increase in Working Capital (*)
Capital
xxxx
xxxx
(*) Only one will be there.
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Funds Flow Analysis
DATA ANALYSIS AND INTERPRETATION

STATEMENT SHOWING CHANGES IN WORKING CAPITAL OF
FOODSandINNS LTD FROM 2006-07 and 2007-08
Particulars
2006-07
2007-08
Increase
Decrease
Inventories
332,233,960
371,247,722
39,013,762
-------
Sundry Debtors
722,483,822
808,181,529
85,697,707
-------
Cash and Bank balances
143,559,640
219,098,209
7,558,659
---- --
Loan and Advances
804,005,122
102,194,526
217,089,404
------
Total Current Assets (A)
2002282544
2419622076
Liabilities
735,857,902
698,440,243
Provisions
386,040,967
553,386,010
112,189,863
1,243,129,253
Net working Capital (A-B)
880,383,675
1,176,492,823
Increase in Working Capital
296,109,148
CURRENT ASSETS
------
CURRENT LIABILITIES
and PROVISIONS
Total Current Liabilities

(B)
TOTAL
1,176,492,823 1 176,492,823
37,417,659
----- ---
-------167,345,043
296,109,148
314,451,140
314,451,140
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Funds Flow Analysis

INTERPRETATION:
Current assets: (2006 -07 to 2007 -08)
Inventory is increased.
Sundry debtors are increased.
Cash and bank balances are increased.
Loans and advances are increased.
As per our report totally current assets is increased.

Current liabilities: (2006 -07 to 2007-08)
Current liabilities are increased.
Provisions are increased.
As per our report totally current liabilities are increased.
COMPARISION:
Current assets of 2006 -07 more than current liabilities of 2006 -07.
Current assets of 2007 -08 more than current liabilities of 2007-08.
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Funds Flow Analysis
STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS FOR

THE YEAR ENDING AT 31STMARCH 2006.
SOURCES
AMOUNT
APPLICATIONS
Issue of shares
20,799,300 Re pay of Un-Secured
Secured Loans
142,596,183 Loans Purchase of Fixed
Differed Tax liability
AMOUNT
1,151,273 assets Purchase of

Investments
338,938,224
1,590,197,890
152,967,291
36,539,650
Work In Progress
Funds from
2,250,205,447 Increase in working capital
296,109,148
operation:
2,414,752,203
2,414,752,203
INTERPRETATION:
It is evident from the above table that the total flows during the period
from 2005- 06 amounts Rs. 2,414,752,203. In the total funds 1% of funds were
received through share capital, 6% of funds received through the securing loans
and the remaining 93% of funds received from funds from operation.
Regarding application of the funds the 66% were invested in fixed assets
i.e. purchase of fixed assets, 6%of funds were invested in Investments I.e.
purchase of investments, 14% funds were used to re- pay the un-secured loans,
2% were used in capital work in progress and remaining 12% were utilized for
working capital.
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Funds Flow Analysis

FOODS and INNS LTD FROM 2007-08 and 2008-09
PARTICULARS
2007-08
2008-09
INCREASE
DECREASE
CURRENT ASSETS:
Inventories
371,247,722
457,180,349
85,932,627
-------
Sundry Debtors
835,144,733
890,363,906
55,219,173
-------
219,098,299
364,394,283
145,295,984
-------
Loans and Advances
994,131,322
1,835,560,490
841,429,168
-------
TOTAL CURRENT
ASSETS: (A)
2,419,622,076
3,547,499,028
Liabilities
698,440,243
1,009,874,344
-------
311,434,131
Provisions
553,386,010
893,076,142
-------
339,690,132
TOTAL CURRENT
LIABILITIES: (B)
1,251,826,253
1,902,950,486
-------
-------
working capital (a-b)
1,167,795,823
1,644,548,542
-------
-------
CURRENT
LIABILITIES and
PROVISIONS:
Net working capital

TOTAL
476,752,719
1,644,548,542
------1,644,548,542
1,135,123,883
476,752,479
1,135,123,883
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Funds Flow Analysis

INTERPRETATION:

COMPARISION:
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Funds Flow Analysis
STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS

FOR THE YEAR ENDING-AT 31st MARCH 2007.
SOURCES
Issue of shares
AMOUNT
APPLICATIONS
90,000,000 Re - pay of loans:
14,541,818 Secured
Un-secured
Funds from operation:
AMOUNT
351,256,362
188,575,000
Purchase of Fixed assets
3,890,424,233
Purchase of Investments
1,667,282,201
6,557,239,535 Work In Progress

Increase in working capital
6,661,781,353
87,490,838
476,752,719
6,661,781,353
INTERPRETATION:
It is evident from the above table that the total flows during the period from
2006- 07 amounts Rs. 6,661,781,353. In the total funds 1.4% of funds were received
through share capital, 0.2% of funds received through the differed tax liability and the
remaining 98.4% of funds received from funds from operation.
Regarding application of the funds the 58% were invested in fixed assets i.e.
purchase of fixed assets, 25%of funds were invested in Investments I.e. purchase of
investments, 6% funds were used to re- pay the secured loans, 3% were used to re pay of un secured loans, 1% were used in capital work in progress and remaining 7%
were utilized for working capital.
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Funds Flow Analysis

FOODS andINNS LTD FROM 2008-09 and 2009-10
PARTICULARS
2008-09
2009-10
INCREASE
DECREASE
CURRENT ASSETS:
Inventories
457,180,349
551,945,670
94,765,321
-------
Sundry Debtors
890,363,906
978,920,391
88,556,485
-------
364,394,283
644,035,217
279,640,934
-------
Loans and Advances
1,835,560,490
1,847,079,300
11,518,810
-------
TOTAL CURRENT
ASSETS: (A)
3,547,499,028
4,021,980,578
Liabilities
1,009,874,344
1,254,576,474
-------
244,702,130
Provisions
893,076,142
912,057,630
-------
18,981,488
TOTAL CURRENT
LIABILITIES: (B)
1,902,950,486
2,166,634,104
-------
-------
working capital (a-b)
1,644,548,542
1,855,346,474
-------
-------
-------
-------
CURRENT LIABILITIES
and PROVISIONS:
Net working capital

TOTAL
210,797,932
1,855,346,474
1,855,346,474
532,359,479
210,797,932
532,359,479
Page
Funds Flow Analysis
Interpretation:

As per our report totally current liabilities are increased
COMPARISION:
Current assets of 2008 -09more than current liabilities of 2008 -09.
Page
Funds Flow Analysis

STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS FOR THE
YEAR ENDING AT 31ST MARCH 2008.
SOURCES
Issue of shares
AMOUNT
APPLICATIONS
10,399,650 Purchase of Fixed assets
AMOUNT
4,592,187,940
499,649,066
Loans and Advances:

Secured
589,904,165 Work In Progress
Un - Secured
24,186,000 Increase in working capital
20,443,681
296,055,890
210,797,932
4,953,757,332
5,598,690,828
5,598,690,828
Interpretation:
2007-08 amounts Rs. 5,598,690,828. In the total funds 0.2% received from issue of
shares, 11% funds were received through secured loans, 0.5% of funds received
through the unsecured loans, 0.3% were received through differed tax liability and the
remaining 88% of funds received from funds from operation.
purchase of fixed assets, 9% were invested in Investments i.e. purchase of
investments, 5% were utilized for capital work in progress and remaining 4% of funds
were utilized for working capital.
Page
Funds Flow Analysis

FOODS and INNS LTD FROM 2009-10 and 2010-11
Particulars
2009-10
2010-11
Increase
790,890,463
238,944,793
Sundry Debtors
978,920,391 1,261,586,026
282,665,635
644,035,217 1,045,572,862
401,537,645
Loan and Advances
1,847,079,300 2,721,098,393
874,019,093
4,021,980,578 5,819,147,744
Decrease
CURRENT ASSETS
Inventories
551,945,5,670
-------------------
CURRENT LIABILITIES
and PROVISIONS
liabilities
1,254,576,474 1,402,934,365
-------
148,357,891
912,057,630 1,404,755,444
-------
492,697,814
2,166,634,104 2,807,689,809
-------
-------
1,855,346,474
3,011,457,935
-------
-------
1,156,111,461
-------
-------
b) Provisions
Total Current Liabilities (B)
TOTAL
3,011,457,935
3,011,457,935 1,872,190,8 10
1,156,111,461
1,872,190,810
Page
Funds Flow Analysis
INTERPRETATION:

COMPARISION:
Page
Funds Flow Analysis

STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS FOR THE
YEAR ENDING AT 31ST MARCH 2009.
SOURCES
Issue of shares
Secured loans
AMOUNT
147,571,185
APPLICATIONS
AMOUNT
Un- Secured loan paid
9,902,000
1,624,446,444
Purchase of Fixed assets
5,911,720,852
19,061,407
3,830,506,625
9,400,899,786
Work In Progress Increase
283,737,884
in working capital
1,156,111,461
11,191,978,822
11,191,978,822
INTERPRETATION:
2008-09 amounts Rs. 11,191,978,822. In the total funds 1.3% received from issue of
shares, 14.50% funds were received through secured loans, 0.2% was received
through differed tax liability and the remaining 84% of funds received from funds
from operation.
purchase of fixed assets, 34% were invested in Investments i.e. purchase of
investments, 3% were utilized for capital work in progress and remaining 10% of
funds were utilized for working capital.
Page
Funds Flow Analysis

FOODS and INNS LTDFROM 2010-11 and 2011-12
(In Millions)
Particulars
2010-11
2011-12
Increase
Decrease
CURRENT ASSETS
Inventories
790.9
1,088.4
297.5
-------
Sundry Debtors
1,261.6
1,607.4
345.8
-------
1,045.6
655.9
Loan and Advances
2,721.1
3,704.8
5819.2
7056.5
liabilities
1,402.9
1,536.8
-------
133.9
Provisions
1,404.8
1,501.0
-------
96.2
Total Current Liabilities (B)
2807.7
3037.8
-------
-------
3011.5
4018.7
-------
-------
1007.2
------983.7
389.7
-------
CURRENT LIABILITIES
and PROVISIONS
TOTAL
4018.7
------4018.7
-------
1007.2
1627
1627
Page
Funds Flow Analysis

INTERPRETATION:
Cash and bank balances are decreased.
As per our report totally current assets is increased only Loans and Advances
are decreased.
COMPARISION:
Page
Funds Flow Analysis
STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS FOR

THE YEAR ENDING AT 31ST MARCH 2010.
SOURCES
AMOUNT
APPLICATIONS
Issue of shares
15.5 Un- Secured loan paid
Secured loans
1443.5 Purchase of Fixed assets
36.9 Work In Progress
Sale of Investments
794.3 Increase in working
7345 Capital
9635.2
AMOUNT
5.1
6943.1
1679.8
1007.2
9635.2
INTERPRETATION:
2009-10 amounts Rs. 9635.2 Millions. In the total funds 0.2% received from issue of
shares, 15% funds were received through secured loans, 0.4% was received through
differed tax liability, 8.2% was received from sale of Investments and the remaining
76.2% of funds received from funds from operation.
purchase of fixed assets, 17.5% were utilized for capital work in progress and
remaining 10.5% of funds were utilized for working capital.
Page
Funds Flow Analysis

THE STATEMENT SHOWING THE WORKING CAPITAL FROM 2008-12
Year
Increase
Decrease
2007-08
482,827,009
-------
2008-09
296,109,148
-------
2009-10
476,752,719
-------
2010-11
210,797,932
-------
2011-12
1,156,111,461
-------
Changes in working capital in chart form:

CHANGES IN WORKING CAPITAL
1,400,000,000
1,156,111,461
1,200,000,000
1,000,000,000
800,000,000
600,000,000
482,827,009
400,000,000
476,752,719
296,109,148
210,797,932
200,000,000
0
2007-08
2008-09
2009-10
2010-11
2011-12
Year
INTERPRETATION:
The above diagram clearly shows that the net working capital of the Foods and
Inns Ltd showing an increase with a decreasing trend. As the net working capital for
the year 2007-08 is 482,827,009 after 2007-08 the net working capital of the firm was
decreasing at a 4400.02, 296,109,148, after it increased to 476,752,719. Again for
next year 2010-11 the net working capital. Decreased to 210,797,932. For 2011-12 the
net working capital increased very highly to 1,156,111,461.
The Statement of showing funds from Operations from 2008-20012

Page
Funds Flow Analysis
Year
Funds from Operations
Funds lost in Operations
2007-08
1,446,490,556
-------
2008-09
2,250,205,447
-------
2009-10
6,557,239,535
-------
2010-11
4,953,757,332
-------
2011-12
9,400,899,786
-------
Statement of Funds flow in the form of chart:
STATEMENT OF FUNDS FLOW

10,000,000,000
9,400,899,786
9,000,000,000
8,000,000,000
6,557,239,535
7,000,000,000
6,000,000,000
4,953,757,332
5,000,000,000
4,000,000,000
3,000,000,000
2,250,205,447
2,000,000,000 1,446,490,556
1,000,000,000
0
2007-08
2008-09
2009-10
2010-11
2011-12
Year
INTERPRETATION:
The above diagram clearly shows that Foods andInns Ltd funds from
operations from 2007-2012. From above we can know that funds from operation are
constantly increasing. In 2007 1,446,490,556/- were cam through funds from
operations this amount is every year increased in organization the funds from
operations amount at 2011-12 were 9,400,899,786/-.
Page
Funds Flow Analysis
FINDINGS
In 2007-2008 the Organization again majorly funds received through
Operation activities only. In this year Foods and Inns Ltd received 98%
through funds from operations.
In 2007-2008 the Organization utilizes the funds through purchase of fixed assets. In
this period Foods and Inns Ltd spent 58% of funds for purchase of fixed assets and
25% of funds for purchase of investments.
In 2008-2009 the Organization once again major funds were received from
Operations only. In this financial year Foods and Inns Ltd received nearly 88%
funds from Operational activities.
In 2008-2009 the Organization utilizes the major funds to Purchase of fixed assets. In
this period Foods and Inns Ltd spent nearly 82% funds to purchase of fixed assets.
In 2009-2010 the Organization majorly funds received from Operational
activities. In this financial year Foods and Inns Ltd received 84% of funds
through Operational activities and 14.5% were received from Secured loans.
In 2009-2010 the Organization majorly utilizes its funds for the purchase of fixed
assets and Investments. In this period Foods and Inns Ltd spent 53% of funds for
purchase of fixed assets and 34% funds are utilizes to purchase of Investments.
From 2008-2012 the Organizations working capital positions are satisfactory

at now.
Page
Funds Flow Analysis
SUGGESTIONS
From 2008-2012 between this 5 years period the Organizations over all
financial position are good. But between this 5 years, Year - Year the amounts
having some un-certainty i.e. in 2007-08 increase in working capital amount
was 482,827,009 but in next year 2008-09 the increase decrease to
296,109,148. So management need to take a steps avoid this type of
uncertainty.
Foods and Inns Ltd mainly and majority of funds are receiving from Operation
activities only.
Foods and Inns Ltd needs to increase the share capital from this it invite the
funds from public.
Foods and Inns Ltd., needs to increase income from investment activities.
Page
Funds Flow Analysis
CONCLUSION
It can be concluded that funds flow performance of the Organization is
reasonably satisfactory. In certain area the Organization has to focus more.
Foods and Inns Ltd is a Service Oriented Organization. In this Service motive
also the Organization are getting good financial results.
Page
Funds Flow Analysis
BIBLIOGRAPHY
James C.Vann Home Financial Management, 9th edition Prentice - Hall of
India Private Limited, New Delhi, 1994.
Pandey I.M., Financial Management, 7th Edition, Vikas Publishing House Pvt.
Ltd., New Delhi, 1995.
Maheswari S.N., Financial Management, 4th Edition, Sultan Chand and Sons,
New Delhi. 1997.
Man Mohan and Goyal S.N., Principles of Management Accountings 6th
Edition, Sathiya Bhavan, Agra, 1998.
Prasanna Chandra, Financial Management, 3rd Edition, Tata Mc.Graw-Hill
Publishing Co., Ltd., New delhi, 1984.
Website:
www.foodsandinns.com
www.google.com
FOODS and INNS LTD BALANCE SHEET FOR THE YEAR ENDED 2006-07
Page
Funds Flow Analysis

I. Sources of funds
2007
2006
(1) Share holders funds:

Share capital A
395,186,880
395,186,880
2,071,555,641
1,864,558,995
(a) Secured Loans C
916,261,993
1,118,302,314
(b) Unsecured Loans D
647,625,224
607,106,641
Deferred Tax Liability
534,498,611
Reserves and Surplus B

(2) Loans and Advances:
TOTAL
4,565,128,349
3,985,154,830
A) Gross Block
3,946,247,611
3,600,839,133
B) Less: Depreciation
1,232,187,391
1,061,446,007
Net Block
2,714,060,220
2,539,393,126
4,495,248
67,397,336
909,703,681
917,015,658
A) Inventories
332,233,960
292,610,725
B) Sundry Debtors
722,483,822
682,835,869
C) Cash and Bank Balance
143,559,640
95,180,182
D) Loans and Advances
804,005,122
917.015,658
A) Current Liabilities
735,857,902
654,124,079
B) Provisions
386,040,967
738,083,452
Net Current Assets
880,383,675
397,556,415
56,485,525
77,933,863
II. Application of funds:

Fixed assets:
Capital Work In Progress

Investment
Current assets. Loans and Advances:
Less: Current liabilities:
Miscellaneous Expenditure
TOTAL
4,565,128,349
3,985,154,830
III. Sources of funds
2008
2007
Page
Funds Flow Analysis

Share capital A
415,986,180
395,186,880
2,862,213,464
2,071,555,641
1,058,858,176
916,261,993
308,687,000
647,625,224
535,649,884
534,498,611
5,181,394,704
4,565,128,349
A) Gross Block
4,304,258,110
3,946,247,611
1,427,712,198
1,232,187,391
Net Block
2,876,545,912
2,714,060,220
41,034,904
4,495,248
1,062,670,972
909,703,681
A) Inventories
371,247,722
332,233,960
B) Sundry Debtors
835,144,733
722,483,822
219,098,299
143,559,640
94,131,322
804,005,122
698,440,243
735,857,902
B) Provisions
553,386,010
386,040,967
1,167,795,823
880,383,675
33,347,093
56,485,525

(a) Secured Loans C
TOTAL
IV. Application of Funds:
Fixed assets:

Investment

Less: Current liabilities and provisions:
Net Current Assets

TOTAL
5,181,394,704
4,565,128,349
V. Sources of funds
2009
2008
Share holders funds:
Page
Funds Flow Analysis

Share capital A
505,986,180
415,986,180
6,038,829,049
2,862,213,464
707,601,814
1,058,858,176
120,112,000
308,687,000
550,191,702
535,649,884
TOTAL
7,922,720,745
5,181,394,704
A) Gross Block
5,084,477,000
4,304,258,110
1,682,523,145
1,427,712,198
3,401,953,855
2,876,545,912
128,525,742
41,034,904
2,729,953,179
1,062,670,972
A) Inventories
457,180,349
371,247,722
B) Sundry Debtors
890,363,906
835,144,733
364,394,283
219,098,299
1,835,560,490
94,131,322
1,009,874,344
698,440,243
893,076,142
553,386,010
1,644,548,542
1,167,795,823
17,739,433
33,347,093

Loans and Advances:
VI. APPLICATION OF FUNDS

Fixed assets:
Net Block
Investment

Current Liabilities and Provisions:
B) Provisions
Net Current Assets
TOTAL
7,922,720,745 5,181,394,704
VII. Sources of funds
2010
2009

Share capital A
584,981,080
505,986,180
Page
Funds Flow Analysis

6,948,301,231
6,038,829,049
1,297,505,979
707,601,814
144,298,000
120,112,000
570,635,383
550,191,702
9,545,721,673
7,922,720,745
A) Gross Block
6,011,264,062
5,084,477,000
1,982,877,734
1,682,523,145
Net Block
4,028,386,328
3,401,953,855
424,581,632
128,525,742
3,229,602,239
2,729,953,179
A) Inventories
551,945,670
457,180,349
B) Sundry Debtors
978,920,391
890,363,906
644,035,217
364,394,283
1,847,079,300
1,835,560,490
1,254,576,474
1,009,874,344
912,057,630
893,076,142
1,855,346,474
1,644,548,542
7,805,000
17,739,433

(a) Secured Loans C
TOTAL
VIII. APPLICATION OF FUNDS
Fixed Assets
Investment
(3) Current Assets, Loans and Advances:

(4) Current liabilities and Provisions:
B) Provisions
Net Current Assets
TOTAL
9,545,721,673 7,922,720,745
FOODS and INNS LTD BALANCE SHEET FOR THE YEAR ENDING 2010-11
1. Sources of funds
2011
2010

Share capital A
732,552,265
584,981,080
11,647,820,007
6,948,301,231

Page
Funds Flow Analysis

(a) Secured Loans C
2,921,952,423
1,297,505,979
134,396,000
144,298,000
589,696,790
570,635,383
16,026,417,485
9,545,721,673
A) Gross Block
7,591,784,175
6,011,264,062
2,348,323,005
1,982,877,734
Net Block
5,243,461,170
4,028,386,328
708,319,516
424,581,632
7,060,108,864
3,229,602,239
790,890,463
551,945,670
B) Sundry Debtors
1,261,586,026
978,920,391
1,045,572,862
644,035,217
2,721,098,393
1,847,079,300
1,402,934,365
1,254,576,474
B) Provisions
1,404,755,444
912,057,630
Net Current Assets
3,011,457,935
1,855,346,474
3,070,000
7,805,000
16,026,417,485
9,545,721,673
TOTAL
II. Application of funds:
Fixed Assets:

Investment
Current Assets, Loans and Advances:
A) Inventories
Less: current Liabilities and Provisions
TOTAL
FOODS and INNS LTD BALANCE SHEET FOR THE YEAR ENDING 2011-2012
1. Sources of funds
2012
2011
(1) Share holders fund:

Share capital A
679.5
732.6
13,499.0
11,647.8
4,365.5
2,922.0
(2) Loans and Advance:

(a) Secured Loans C
Page
Funds Flow Analysis

129.3
134.4
626.6
589.7
19,299.8
16,026.4
A) Gross Block
9,406.7
7,591.8
2,779.9
2,348.3
Net Block
6,626.8
5243.5
2,388.1
708.3
Investment
6,265.8
7,060.1
A) Inventories
1,088.4
790.9
B) Sundry Debtors
1,607.4
1,261.6
655.9
1,045.6
3,704.8
2,721.1
1,536.8
1,402.9
B) Provisions
1,501.0
1,404.8
Net Current Assets
4,018.7
3,011.5
0.5
3.1
19,299.8
16,026.4
TOTAL
II. Application of funds
Fixed assets:
Current Assets:

Current Liabilities:
TOTAL
Page

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Funds Flow Analysis

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

Funds Flow Statement as statement either prospective or retrospectives

In simple, the funds flow statement is a statement of sources and application of

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

A current asset and a fixed asset.

A fixed asset and a current liability.

Different names of funds Flow Statement:

A statement of sources and Uses of funds.

A statement of Sources and Application of funds.

Where got and where gone Statement.

Inflow and out flow of funds statement.

Main purpose of funds Flow Statement:

Financial statements or I the income statement.

To inform on to how the loans to the business has been used.

To point out the financial strengths and weakness of the business.

To help in planning sound dividend policy.

Procedure for preparing a Funds Flow Statement:

Statement or schedule of changes in working capital.

Statement of sources and Applications of funds.

Statement or Schedule of changes in Working Capital:

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

Increase in Current Assets, Increases the Working Capital.

Decrease in Current assets, Decreases the Working Capital.

Increase in Current Liabilities, Decreases the working capital.

Decrease in Current Liabilities, Increases the Working Capital.

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

FRUITS AND VEGETABLE PROCESSING

MEAT and POULTRY PROCESSING

PULP and PULP PRODUCTS

Funds Flow Analysis

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

under the Industries (Development and Regulation) Act, 1951.

and fruits and vegetables processing units is reduced.

beverages and those reserved for the small-scale units.

Trebling the size of the processed food sector

establishing mega food parks, modernization of abattoirs, cold chain/value addition

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

the international market

60% of the companies in packaged / convenience foods segment were

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

Companies dealing in Pulp and Pulp products operated at an average of 87%

25% of the companies in the turnover bracket of Rs 10 100 mn earned more

The companies in the turnover bracket of Rs 100 - 250 mn operated at an

Growth and Future Plans

The food processing companies in Kolkata cluster expect an average revenue

Cluster benefits and hindrances

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

VCR Institute of Management Studies, Chittoor

Funds Flow Analysis

VCR Institute of Management Studies, Chittoor