CONTENTS

Topic Page. No

CHAPTER-1 01-09

 Need for the study

 Objectives of the study
 Scope of the study
 Research methodology
 Limitations of the study

CHAPTER-2 10- 23
INDUSTRY PROFILE

CHAPTER-3 24-41
COMPANY PROFILE

CHAPTER-4 42-54
THEORITICAL FRAMEWORK

CHAPTER-5 55-69
DATA ANALYSIS AND INTERPRETATION

CHAPTER-6 70-72
FINDINGS

SUGGESTIONS

CONCLUSION

BIBLIOGRAPHY

ANNEXURE

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INTRODUCTION

INTRODUCTION
Management funds is an important aspects of financial management .management of
funds acts as the primary concern weather it may be in a business undertaking or in an
educational institution. Financial management which is simply ment dealing with
management of money matters.
Meaning of financial Management
By financial management means efficient use of economic resource namely
capital funds. According to phillippatus,” Financial management is concerned with the
manage trial decision that results in the acquisition and financing of short term and
long term credits for the firm”.

So the analysis simply states two main aspects of financial management like
procurement of funds and an effective use of funds to active business objective.

Methods of financial statement analysis:

A firm communicates financial information to the user through financial

statements and reports .Financial statements contains summarized information of the
firm’s financial affairs, organized systematically. They are the mean to present the
firm’s financial situation to the users. Preparation of the financial statements is the
responsibility of top the management

 Funds flow statement

 Cash flow statement
 Comparative statement
 Common size statement
 Ratio analysis
 Trend analysis

Funds flow analysis:

The purpose of measuring trading performance, operational efficiency, profitability
and financial position of a concern revealed by Trading, Profit and Loss Account and

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Balance Sheet. These financial statements are prepared to find out the Gross Profit or
Gross Loss, Net Profit or Net Loss and financial soundness of a firm a whole for a
particular period of time. from the management point of view, the usefulness of
information provided by these income statements functions effectively and efficiently.
In the true sense they do not disclose the nature of all transactions. Management,
Creditors and Investors etc. want to determine or evaluate the sources and application
of funds employed by the firm for the future course of action. Based on these
backgrounds, it is essential to analysis the movement of assets, liabilities, funds from
operations and capital between the components of two year financial statements. The
analysis of financial statements helps to the management by providing additional
information in a meaningful manner.
Funds Flow Statement mainly discloses information concerning financing and
investing activities of business concern and the consequent changes in its financial
position for a period. This statement helps the owners and creditors to judge the funds
from various sources and effectively utilizing them for various productive uses
without effecting device to analysis the changes in the financial condition of a
business enterprise between two accounting dates. It is not mandatory on the part of
business concerns to prepare a Funds Flow Statement. But for their benefit they have
to prepare a Funds Flow Statement in addition to Income Statement and balance sheet.

MEANING OF FUND

The term "Fund" refers to Cash, to Cash Equivalents or to Working Capital and all
financial resources which are used in business. These total resources of a concern are
in the form of men, materials, money, plant and equipments and others. In a broader
meaning the word "Fund" refers to Working Capital. The Working Capital indicates
the difference between current assets and current liabilities. The term working capital
may be :

(a) Gross Working Capital and

(b) Net Working Capital.
"Gross Working Capital" represents total of all Current Assets.
"Net Working Capital" refers to excess of Current Assets over Current Liabilities.
DEFINITIONS:
Robert N. Anthony: “The funds flow statement describes the sources
from which additional funds derived and the uses to which these funds were put”.

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Foulke: “A statement of sources and application of funds is a technical
device designed to analysis the changes in the financial condition of business
enterprises between two dates”.

FLOW OF FUNDS:

The term "Flow of Funds" refers to changes or movement of funds or changes

in working capital in the normal course of business transactions. The changes in
working capital may be in the form of inflow of working capital or outflow of
working capital. In other words, any increase or decrease in working capital when the
transactions take place is called as "Flow of Funds." If the components of working
capital results in increase of the fund, it is known as Inflow of Fund or Sources of
Fund. Similarly, if the components of working capital effects in decreasing the
financial position it is treated as Outflow of Fund. Funds flow statement is otherwise
known as.
1. Statement of source of application of funds.

2. Statement of source and use of funds.

3. Statement of financial changes in position.

4. Where-got and where-gone statement.

NO FLOW OF FUNDS
Some transactions may not make any movement or changes in the fund position.
Such transactions are involved within the business concern. Like the transaction
which involves both between current assets and current liabilities and between non-
current assets and non-current liabilities and hence do not result in the flow of funds.
For example, conversion of shares in to debenture. Such transaction involves between
non-current account only and this activity does not effect in increase or decrease of
the working capital position.

PRINCIPAL SOURCES OF FUNDS

1. Issue of share and debentures.
2. Long and medium-term borrowings.

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3. Sale of fixed assets and long term investments.
4. Funds from operations or trading income.
5. Non-Trading income such as income from investment, gifts damages awarded in
legal actions etc.

POSSIBLE USES OF FUNDS

1. Redemption of shares debentures.

2. Repayment of long and medium-term loans.
3. Purchase of fixed assets and long-term investment.
4. Funds lost in operations or trading losses.
5. Non-trading losses such as loss of cash by embezzlement fines etc.

NEED OF THE STUDY

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Fund flow analysis is a key for interpretation of financial statement. It helps
to and analyzes the financial position of the Organization, whose ultimate aim is
increase or decrease of the Assets and Liabilities in Organization. And shows the
relationship among various aspects in such a way that it allows drawing conclusion
about the performance, strength and weakness of the Organization. Finally analyze
how to utilize the Funds of Organization.

OBJECTIVE OF THE STUDY

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 To study the Funds flow Statement in the Andhra sugars Limited and give
appropriate suggestion to improve financial position.
 To study the Overall financial position
 To study the change in working capital
 To study the profitability position
 To Examine the sources and application of funds management

SCOPE OF THE STUDY

 The scope of study is confined only five year i.e. from 2012-2017.

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 The study took in to account the data pertaining to the entire organization.

 The ‘Funds Flow Statement’ shows the movement of Funds and it is a report
of the financial operations of the business undertaking.

 It indicates various means by which funds were obtained during a particular

period and ways in. which these Funds were employed.

 The funds flow statements helps the financial manager in having a detailed
analysis and understanding of changes in the distribution of funds between
two balance sheets.

 Funds flow statement is not a substitute of an Income Statement or a Balance

Sheet. It provides only additional information regarding the changes in the
working capital.

 It cannot reveal continuous changes. Changes in cash are more relevant for
financial management than the working capital.

LIMITATIONS OF THE STUDY

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 Though the project work has been completed successfully, a few limitations
are observed however, proper care has been taken to overcome to impact of
limitations on the study.

 The scope for gathering data is very less. This is due to the fact that researcher
is vocational trainees.

 During the project period most of the staff members are busy with auditing
and other works. So, they could not afford give full information.

 Some of the information was not available due to the confidential nature.

 Since officials, Executives and others were busy. The study was primarily
focused on secondary data.

RESEARCH & METHODOLOGY

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The study has been conducted in The Andhra sugars ltd to examine Funds flow
analysis in order to change in working capital and shows difference between Sources
and Applications. The study has been undertaken in the Accounting & Finance
departments of The Andhra sugars ltd.

Primary Data:

The primary data is collected by discussions with the functional managers,

officers, staff and other members of The Andhra sugars ltd.
Secondary Data:

The secondary data from The Andhra sugars ltd for the year 2012-2017 used in this
study. These have been taken from secondary sources like company reports, balance
sheets. Editing, classification, and tabulation of the financial data which are collected
from the above mentioned sources, have been as per requirement of the study

INDUSTRY PROFILE

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In an era where there is a need for inclusive growth, the sugar industry

is amongst the few industries that have successfully contributed to the rural

economy. It has done so by commercially utilizing the rural resources to meet

the large domestic demand for sugar and by generating surplus energy to

meet the increasing energy needs of India. The Indian Sugar Industry, the

second largest in the world after Brazil, is all set to be a key player in this win-

win scenario. The Rs. 250 billion sugar industry has about 650 sugar mills in

India with an aggregate installed capacity of 18 million tons. India is the

largest consumer of sugar in the world. The advantage with Indian Sugar

Industry is that it enjoys a two-fold business opportunity both in Indian as well

as the global market. Besides sugar production, the industry has also

diversified into manufacturing of by-products like molasses for alcohol,

ethanol and chemical industries, biogases for paper industry and also has the

potential to generate over 9700 mw of power from biogases. Every 100 tons

of sugarcane crushed on an average gives 11 tons of sugar, 4 tons of

molasses, 28 tons of biogases and 3 tons of Press Mud. Combinations of all

these ancillary ventures/activities immensely contribute towards the

productivity and profitability for the industry thereby presenting a highly

prospective opportunity for investments in this promising field. Sugar Industry

in India is well developed with a consumer base of more than billions of

people. It is also the second largest producer of sugar in the world. There is

around 45 millions of sugar cane growers in India and a larger portion of rural

labourers in the country largely rely upon this industry.

Sugar Industry is one of the agricultural based industries. In India it is

the second largest agricultural industry after. Sugar is one of the oldest

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commodities in the world and traces its origin in 4th century AD in India and

China.

In those days sugar was manufactured only from sugarcane. But both

countries lost their initiatives to the European, American and Oceanic

countries, as the eighteenth century witnessed the development of new

technology to manufacture sugar from sugar beet. However, India is presently

a dominant player in the global sugar industry along with Brazil in terms of

production. Given the growing sugar production and the structural changes

witnessed in Indian sugar industry, India is all set continue its domination at

the global level. The status of Indian sugar industry has been compared with

the rest of the world in terms of raw material availability, crushing period, size

of the sugar mill, production cost and prices in the report. The advantages that

Indian sugar mills have over others in cost terms have been emphasized too.

Indian sugar industry is highly fragmented with organized and

unorganized players. The unorganized players mainly produce Gur and

Khandari, the less refined forms of sugar. The government had a controlling

grip over the industry, which has slowly yet steadily given way to liberalization.

The report provides comprehensive analysis about the structure of Indian

sugar industry by explaining the above facets. Besides the classification of

sugar products and by- products like molasses, their uses too have been

extensively covered. The production sugarcane is cyclical in nature.

Hence the sugar production is also cyclical as it depends on the

sugarcane production in the country. The report provides extensive

information on the production of sugarcane, sugar and other sweeteners in

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the country in the recent years along with trends and analysis. This also

includes a discussion about existing capacities in the country, trends in

capacity additions, imports and production of by-products of sugar (molasses

and cogeneration of power).

The report features a detailed demand analysis discussing the actual

demand for sugar and other sweeteners, gur and khandari and their per

capita consumption in India. This includes a trend analysis in demand in

various regions of the country. The role of exports in the sugar industry has

also been discussed. The report gives an exhaustive cost analysis along with

the pricing practices. Dual Pricing System is adopted in the Indian sugar

industry, which includes sugar price in Public distribution system and the free

sale sugar price. An analysis has been provided on the relationship between

Indian and international sugar prices. As the industry is a fragmented one,

even leading players do not control more than 4 percent market in India.

However, the situation is changing and player’s off late are striving to increase

their market share either by acquiring smaller mills or by going for green field

capacity additions. Another notable trend is the shift from Gur and Khandsari

to sugar in the rural areas. This should further increase the per capita

consumption of sugar in India (currently around 15.6 kg). Besides the Indian

urban market is slowly moving towards branded sugar. The potential in this

segment seems to be very high. These trends along with the other trends like

increase in the production of by-products have been captured in detail.

The market shares of the leading players and financials of following

players are given in the report.

 Balrampur chini mills ltd,

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 Bajaj Hindustan Ltd,

 Andhra sugars ltd,

 Thiru Arooran Sugars Ltd and

 Dhampur sugar ltd

The major revenue drivers like change in the government’s policies and

increasing per capita consumption have been comprehensively pictured in the

report. The reports end with outlook for the sugar industry both at the Indian

and international level. Globally, in most of the key geographies like Brazil and

Thailand, regulations have a significant influence on the sugar sector.

Perishable nature of cane, small farm landholdings and the need to influence

domestic prices; all have been the drivers for regulations. In India, too, sugar

is highly regulated. Since 1993, the regulatory environment has considerably

eased, but sugar still continues to be an essential commodity under the

Essential Commodity Act. There are regulations across the entire value chain

land demarcation, sugarcane price, sugarcane procurement, sugar production

and sale of sugar by mills in domestic and international markets.

However, fundamental changes in the consumer profile and the

demonstrated ability of the sector to continuously ensure availability of sugar

for domestic consumption has diluted the need for sugar to be considered as

an essential commodity.

According to a recently conducted nationwide survey, nearly 75 percent

of the total non-levy sugar is consumed by industrial, small business and high

income household segments. Further, even for a low income household, 10

percent increase in sugar price would result in less than 1 percent increase in

the 3 monthly food expenses. Madras School of Economics (MSE) has also

raised the need to reassess the weight age of sugar in the wholesale price

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index (WPI). As per MSE, the share of expenditure within a basket of

consumption and investment goods can be used as an indicator for assessing

the suitability of WPI weights. While the current weight for sugar and Gur is

3.68 percent, MSE suggests that the appropriate weight for sugar should be

2.02 percent as per the current basis of WPI calculation that excludes

services. MSE further suggests that services should be included in the WPI 5

calculation, and in that case the appropriate weight for sugar would be 1.04

percent.

While the sector grows in stature and continues to play a key role in the

economy, it is expected to face some significant challenges. There is lack of

alignment between sugarcane and sugar prices. As a result, it leads to cane

payment arrears and induces cyclicality. The arrears typically result in the

eventual need for government support packages, while the pronounced

cyclicality destabilizes the sector revenues.

The average sugarcane yields have also, at best, stagnated, and the

average recovery is amongst the lowest in comparison with key sugar

producing nations. Large sugar inventory exposure and sugar price volatility

also results in high sugar price risk for the sector. In the past ten years, on an

average basis, even the large listed sugar firms have struggled to generate

Return on Invested Capital (ROIC) over and above their cost of capital.

This is primarily due to high mandated 6 fixed cane prices and volatile

sugar prices. Business perspective: How realistic are the opportunities?

Which of the opportunities are high on priority? How can experiences of other

sugar producing countries be leveraged? What are the required business

imperatives? What should be the regulatory environment to facilitate

realization of the opportunities?

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Regulatory Perspective: What are the regulatory modifications required?

What are the key learning’s from regulatory changes in key sugar

geographies? What are the potential risks involved in undertaking the

modifications? What are the appropriate macroeconomic conditions,

prerequisites and risk mitigation steps? What should be the implementation

plan?

Shared Vision: The sugar industry's shared vision is a reflection of the

aspirations of key stakeholders: farmers, millers, consumers and the

government. The sector has a vision for achieving high economic growth,

minimizing risks, enhancing farmer miller relationships, meeting growing

domestic demand and contributing to the nation's food and energy needs. The

shared vision provides the direction for the 2017 sector roadmap.

Business Roadmap 2017: Business Roadmap 2017 aims at transforming the

sector to unlock its potential by realizing the key opportunities by 2017.

Transformation opportunities are critical for achieving the vision, and are also

largely untapped.

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COMPANY PROFILE

Andhra Sugars is engaged in manufacturing and marketing of sugar.

Incorporated in 1947, the company also has business interest in area of

organic and inorganic chemicals, edible and non-edible vegetable oils and

non-conventional power generation. The Andhra Pradesh-based company

has manufacturing facilities located at Tanuku, Kovvur, Guntur, Taduvai,

Saggonda and Bhimadole. Andhra Sugars is primarily focused on

manufacturing of sugar and chemicals with power generation. After acquiring

Jawharlal Nehru Pharmacity, Visakhapatnam, the company has forayed into

the pharmaceutical sector and is engaged in manufacturing Aspirin. The

company’s Aspirin plant has received USFDA approval and EDQM (European

Directorate for Quality Medicines) certification. It exports to countries like

USA, Mexico, Bangladesh, Romania, Bulgaria and Spain. Andhra Sugars has

associate companies namely Sree Akkamamba Textiles manufacturing

various grades of cotton yarn, polyster cotton blended yarn and viscose cotton

blended yarn; and Andhra Petrochemicals produces Oxo-Alcohols.

Products

Sugar-Andhra Sugars has sugar manufacturing capacity of 5000 TCD

capacity plant at Sugar Unit-I, Tanuku, a 2500 TCD capacity plant at Sugar

Unit-II, Taduvai and a 2000 TCD capacity plant at Sugar Unit-III, Bhimadole.

The company produces 30 KL per day of industrial alcohol from molasses.

industrial alcohol is raw material for the ethanol (absolute alcohol), acetic acid,

acetic anhydride and ethyl acetate.

Chemicals- The Company’s inorganic chemical plant located at Kovvur and

Saggonda manufactures chlor-alkali products such as caustic soda, chlorine,

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sulphuric acid and other allied chemicals. These products have applications in

area of paper, aluminium, soaps and detergents, paints and host of other

industries. The company has production capacity 400 TPD of caustic soda.

While producing these chemicals, it generates by-products which are capable

of producing chemicals like hydro chloric acid and sulphur trioxide. hydro

chloric acid is used in producing chlorosulphonic acid.

Power- The Company has forayed into power generation through investing in

equity capital of Andhra Pradesh Gas Power Corporation (APGPCL).

Currently it produces 7 MW co-gen power generated at Sugar Unit II, 70 Ton

Boiler, 8.9 MW Turbine at Sugar Unit I and 2.025 MW Wind Power at

Ramagiri.

Subsidiaries

Andhra Farm Chemicals Corporation manufactures Hydrazine Hydrate. This

chemical has applications in drug intermediates and thermal power stations.

Based at Kovvur, the company is largest manufacturer of Hydrazine Hydrate

(300 TPA) in India. JOCIL is engaged in producing fatty acids, glycerine and

soaps with manufacturing capacity of 67,500 TPA, 1,800 TPA and 25,000 TPA

respectively. Based at Dokiparru, the company also has captive power plant

with 6 MV capacities.

Outlook

The company is planning to set up a 120 MW coal-based power plant

atSaggonda.

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Company History - Andhra Sugars Ltd

 1947 - Incorporation in 1947 at Tanuka, Andhra Pradesh.

 1966 - The Caustic Soda & Chlorine Plant achieved more than 100%

capacity utilisation.
 1967 - On 15th February, 2, 00,000 right equity shares issued at par in

the proportion 2:7.

 1970 - 7, 19,853 bonus equity shares issued in the prop. 4:5.
 1972 - 4, 05,183 Equity shares issued. 30,000 II Pref. shares allotted

on 5th October.
 1973 - The caustic soda unit II with a capacity of 70 tonnes per day

was commissioned on 28th September.

 1974 - 405183 Equity Shares issued. - 12, 14,910 bonus equity shares

issued in prop. 3:5.

 1976 - 1, 05,660 equity shares issued at par to IFCI on conversion of

loans on 20.1.1976.
 1978 - 1, 06,000 equity shares issued on conversion of 20% of the loan

by the financial institutions.

 1981 - 20, 70,852 bonus equity shares issued in the prop. 3:5. 1983 -

The Sugar & Chemical Machinary Division entered into an agreement

with Reva Enviro Systems (Pvt.) Ltd., Nagpur for Bicardi's waste water

treatment system and for the generation of methane from the

Company's distillery spent wash. Subsequently, a pollution control-

cum-energy saving project was taken up as per the suggestions of the

Pollution Control Board.

 1984 - Due to acute shortage of alcohol in the State, the Company was

not allotted any alcohol. The plant was, therefore, shut down from

September 1994.
 1985 - Subsequently With the availability of alcohol, the operations

(Acetic Acid plant) were restarted. - The first barch of 500kgs. of

propellant grade MMH was delivered to ISRO.

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 1986 - The Company concluded an agreement with ONGC for supply

of natural gas for a quantity of 16,000 M [3] per day for Tanuku plant

and 6,000 M[3] per day for Kovvur plant for their boilers.
- The company was approved as a selling agent for marketing

HEL-CES Monitoring system.

- In November the Company issued 4, 00,000 - 15% non-

convertible debentures of Rs. 100 each on private placement

basis to UTI, LIC, GIC and its subsidiaries. These debentures

are redeemable at a premium of 5% at the end, of 7th, 8th and

9th year.
 1987 - The commercial plant for the manufacture of UDMH/MMH was

set up. ONGC commenced supply of natural gas to Tanuku units with

effect from 18th July. The industrial licence for the manufacture of any

higher capacity of 66,000 tonnes per annum of superphosphate was

approved. A letter of intent was received for the manufacture of oleum

20% to a capacity of 3,300 tonnes per annum within the existing

licensed capacity of sulphuric acid.

 1989 - The Company installed in June, two 2270 KVA `SKODA' D. G.

sets to meet power shortage. The Company was also allotted 10 MW

power by A. P. Gas Power Corporation Ltd. (APGPCL) from its gas

based power project.

- In accordance with the suggestion by State Bank of India,

Hyderabad the operating agency of Board for Industrial &

Finance Reconstruction (BIFR) Jayalakshmi Cotton & Oil

Products Ltd. Guntur amalgamation with the company. BIFR's

sanctioned the agreement.

 1990 - 55, 22,272 bonus equity shares issued in prop. 1:1, 2,52,000

equity shares allotted without payment in cash to members of

Jayalakshmi Cotton & Oil Products Ltd, on its meger.

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 1991 - The Scheme of Amalgamation was approved by BIFR by its

order on 21st February. As per the Scheme, 2,52,000 equity shares of

Rs. 10 each of the Company were issued to members of JCOP in the

proportion of 2:5 shares of Rs. 10 of the Company for every share of

Rs 100 each held in JCOP.

 1993 - 112, 96,544 bonus equity shares allotted in ratio 1:1. 1994 - The

Company received letter of intent from Government to set up a 2,500

TCD sugar plant at Buttayagudem in West Godavari district.

 The Company issued 45, 20,000 non-convertible debentures of Rs 250

each along with detachable tradable warrants on right basis to the

existing shareholders.
 1996 - The Caustic Soda & Chlorine Units achieved more than 100%

Capacity utilisation.

 A new chemical complex was being set up at Saygonda village for

manufacture of 33,000 TPA of caustic soda lye, 19,000 TPA of chlorine,

10,000 tonnes of hydrochloric acid and 50 tonnes of hydrogen gas per

annum.
 Another sulphuric acid plant of 250 TPD and chlorosulphonic acid plant

of 100 TPD was also being set up at the new chemical complex.
 1997-The second sugar factory of the Tanuku-based Andhra Sugars at

Taduvai village in West Godavari district began commercial production.

The factory was set up at a cost of Rs.60 crore with a crushing capacity

of 2 500 tonnes a day.

- 45, 20,000 equity shares (prem. Rs 25 per share) issued on

conversions of detachable trade warrants.

 1998 -Crisil has downgraded the rating assigned to the non-convertible

debenture issue of Andhra Sugars Ltd (ASL) from A+ to A-.

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 1999 - As in the previous season the Sugar Unit at Taduvai is entitled

for 100% Free Sugar sale.

- Performance of Chemical Units at Kovvur and Tanuku was

satisfactory. Sulphuric Acid Unit achieved more than 100%

capacity utilisation.
- The Company commenced work on Year 2000 (Y2k)

compliance. The effect of Y2K on Data processing Software,

Hardware, Operating Systems, and Process Control Systems

has been evaluated and the systems likely to be affected are

identified.
 2002-Life Insurance Corporation of India as on 31-Aug-2002 holds

22,73,444 equity shares amounting to 8.39% paid-up equity capital of

the company.
 2003--Completes 55 years of existence without any strike or unrest by

employees
 -Offered Rs 36 crore for West Godavari Cooperative Sugars Ltd
 2004 -Andhra Sugars Ltd (ASL) and Krebs Bio Chemicals (KBC) have

entered into sale and purchase agreement with the loss-making co-

operative units of West Godavari Cooperative Sugar Factory Ltd and

NVR Cooperative Sugar Factory Ltd in Bhimadolu in West Godavari

and Jampani in Guntur district

 2005- Andhra Sugars Ltd has registered a growth of 18.29 per cent in

turnover and 56.01 per cent in net profit for the third quarter ended

December 2004 of the current fiscal.

 2006- Andhra Sugars Ltd reports net profit Rs 69.54 crore (Rs 43.82

crore), yielding an EPS of Rs 21.96 (Rs 18.09) on an equity of Rs

27.11 crore.
- Andhra Sugars Ltd recommended a Dividend of 75%
 2007- Andhra Sugars Board recommends dividend f 60% on Equity

Shares of the Company for the year ending March 31, 2007
 2008- Andhra Sugars Board recommends dividend of 50% for the year

2007-08.

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 2009- Andhra Sugars Board recommends Dividend of Rs 6/- per share

for the year 2008-09.

 2010- Andhra Sugars - Board recommends Dividend of Rs. 5/- per

share on Equity Shares of the Company for the year ending March 31,

2010
 2011- Dr. B.B.Ramaiah has been appointed as chairman & Managing

Director of the Company with effect from 1st November, 2011

 2012- Shri P. Narendranath Chowdary has been appointed as

Managing Director of the Company with effect from 1st April, 2012
- He Andhra Sugars Ltd recommended a Dividend of Rs.7/- per

share on Equity Shares of the Company for the year ending

March 31, 2012.

 2013 - Andhra Sugars Ltd has informed BSE that the Board of

Directors of the Company at its meeting held on May 27, 2013, inter

alia, has recommended a Dividend of Rs. 6/- per share on Equity

Shares of the Company for the year ending March 31, 2013 for the

approval of the Shareholders at the ensuing 66th Annual General

Meeting of the Company.

 2014 - The Andhra Sugars Limited has informed the Exchange that

consequent upon the sad demise of Director Dr. Alapaty Appa Rao

there has been a change in the composition of Board of Directors.

 Andhra Sugars Ltd has now informed BSE that the Board of Directors

of the Company at its meeting held on May 26, 2014 have

recommended a dividend of Rs. 5/- per share on Equity Shares of the

Company for the year ending March 31, 2014.

 2015 - Andhra Sugars Ltd has informed BSE that the Board of

Directors of the Company at its meeting held on May 26, 2015, has

recommended a Dividend of Rs. 3/- per share on Equity Shares of the

Company for the year ending March 31, 2015 for the approval of the

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Shareholders at the ensuing 68th Annual General Meeting of the

Company to be held on September 26, 2015.

ORGANIZATIONAL SET UP

Chairman: He shall preside over all the meeting of the board and general

body, he shall be responsible for bringing all policy matters before board and

the general body and shall see the effective implementation of the resolutions

passed by the said bodies. In his absence vice chairman will preside over the

board and general body.

Managing Director: The Managing Director is the Chief Executive of the

sugar factory. He looks after each and every thing that is going on the factory.

He is the key of the organization. His responsibility is tremendous. Millions

Of Rs May be made or lost by his decisions.

The MD formulates the factory policy in cane procurement,

manufacturing factory operation purchases and sales. For the consideration

of board of directors and when approved ensures their executive through

directors of departmental heads. He values and comments of schemes and

suggestions coming from department heads for guidance to board of

directors. He shall be fully informed about the factory over all activates and

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must instructed and guide departmental heads in their work. He is

accountable to chairman and board of directors. He shall be competent to

make all purchases and incurred expenditure up to 15,000 for capital

expenditure and Rs. 25,000/- under revenue expenditure at a time.

Depending on the government policy he shall arrange sale of sugar.

Departments: The organization has 5 departments. The department heads

are accountable to managing director co-ordinates all the activities of the 5

departments.

The departments of the organizations are as follows:

1. Administrative department

2. Accounts department

3. Agricultural department

4. Engineering department

5. Manufacturing department

Administrative Department: This Department is headed by the

administrative officer. He is next to managing director. He shall exercise such

powers and perform such as may be interested to him from time to time by the

managing director. Under the administrative officer there 7 departments which

are directly responsible to him. They are secretarial department, general

administration, sales, purchase, stores go down, and time office and security

department.

In addition to the above activities he also looks welfare and medical

care of the employees. The department also develops good relations

between management and trade unions.

24
The department is the backbone of the whole organization. In the

absence of both the managing director Administrator officer the board shall

make necessary arrangements with the approval of the register for the

conduct of the business of the society during their absence.

Accounts Department: The Accounts Department is headed by chief

accounts officer. He is responsible for his department. The department is

divided into 3 areas i.e. 1) General Accounts 2) Stores Account 3) Cane

Accounts.

His duty involves preparations of balance sheets and correspondence

with their investors, merchants, banks, financial institutions etc., he has to

maintain up to date all account books of the factory and balance sheets, cost

reports, financial statement, share reports, periodical budgets, cash flow

statement and all income tax returns and formalities. He has to attend all

work relating to money transaction advice management through the managing

director and the financial implications of any of any scheme of expenditure.

Agricultural Department: This is headed by the Chief Agricultural Officer.

The duties of the chief agricultural officer can by divided into distinct spheres.

a) Cane Development
b) Cane procurement

There are 5 asst. agricultural officer and 16 fields’ men working

under the guidance of the chief agricultural officer. The duties and

responsible of the fields officer and agricultural officer to develop sugar cane

and to draw cane uniformly. They have to build up proper records such as

cane register, area under sugarcane variety etc., and to inspect the cane plots

25
regularly and also to meet the cane growers and issue proper instructions to

them.

Engineering Department: This department is headed by the Chief Engineer.

The plant and machinery of the factory are under the control of chief engineer.

He formulates the techniques of current and economic crushing of sugar

cane. Shunting to the machinery and equipment correlated with the variety of

cane quality. He is responsibility for keeping day to day check on milling,

boiler and power house, performance and power consumption and various

sections of the factory personally direct repairs, overhauling and erection of

major equipments. He periodically reviews engineering stores stock position

and furnishes indents for purchase for his departments. Civil section,

turbines, boilers, mill house, electrical and the main parts of the engineering

section such as rehabilitation modernization, lay out, and replacement, labour

and staff policy to management and ensures that all factory regulations and

scrupulously concerned and compelled with the al concerned

Manufacturing Department: This department his helped by chief chemist, he

is responsible for overall operation of sugar manufacturing side of the factory

form juice to final bagging of sugar. The department is to see the food quality

of the sugar production. He has to co-ordinate the work of manufacturing

department with that of the engineering and cane department.

26
ORGANISATIONAL STRUCTURE

MANAGING DIRECTOR

COMMERCIAL PRODUCTION ADMINISTRATIVE

KEY EXECUTIVES

S.No Name Designation

1 Chairman
B B Ramaiah

3 Managing Director
P Narendranath Chowdary

27
2 Company Secretary
M Palachandra

4 Executive Director
P S R V K Ranga Rao

5 Joint Managing Director

M Narendranath

6 Joint Managing Director

M Thimmaraja

7 Joint Managing Director

P Achuta Ramayya

8 A V Rama Rao Non Executive & Independent Director

9 P Kotaiah Non Executive & Independent Director

10 V S Raju Non Executive & Independent Director

11 Anumolu Ramakrishna Non Executive & Independent Director

12 P A Chowdary Non Executive & Independent Director

13 Non Executive & Independent Director

G Ramanujam

14 A Ranga Rao Non Executive & Independent Director

Finance and Accounts Department

The main function, of financial department is to arrange the

funds for salaries and wages for the employees and daily wages, to arrange

payment to the sugarcane growers for the purchase of other considering

goods, oils, chemicals, spare parts of the machinery and they have to receive

sale proceeds by way of selling products.

Finance Department Chart:

Accounting Department
↓

Manager

28
↓

Finance and Accounts

↓

Assistant Manager Finance and Accountants

↓

Assistant Accounts Officer

↓

Clerks

COMPETITORS

Sales Current Change P/E Market 52-Week

Company
(Rs.Million) Price (%) Ratio Cap.(Rs.Million) High/Low

Grasim
56035.00 3604.50 1.85 41.90 325031.22 3755/2432
Industries

Aditya Birla
80203.50 1663.05 4.04 42.50 208050.62 1667/1030
Nuvo

Max India 9959.18 353.80 3.85 54.93 90793.83 373/169

3M India 17423.43 6277.60 4.02 121.73 67985.26 6500/3000

DCM Shriram 60815.40 231.90 3.02 11.10 36559.87 249/51

Delta Corp 1170.45 90.45 2.49 31.37 20277.34 128/59

29
Balmer Lawrie &
26266.28 601.90 1.53 11.49 16896.61 644/287
Co

Kesoram
50809.10 144.05 2.31 0.00 15455.43 155/57
Industries

Andrew Yule 3111.52 30.30 4.84 43.26 9425.40 31/10

Andhra Sugars 8320.03 146.00 0.55 7.19 3935.95 160/86

Binani Inds 1792.82 129.60 2.45 9.08 3743.95 160/63

Oswal Agro Mills459.15 15.49 2.92 15.70 2020.23 20/10

Gillanders
9467.98 74.95 2.04 0.00 1567.60 86/52
Arbuthnot

Aadhaar
1337.52 0.78 -1.27 498.42 1241.07 1/0
Ventures Ind

Crest Ventures 92.80 55.15 4.95 72.73 912.79 62/25

FE India 8500.97 14.40 -3.36 2.17 122.15 40/8

Balaj Inds Corp 680.25 1.65 0.00 4.34 87.09 0/0

Shree Metalloys 421.85 0.00 0.00 57.63 80.68 23/7

BNR Udyog 33.54 15.50 -1.27 6.93 47.10 18/10

Sarthak Inds 1104.68 0.00 0.00 0.00 34.29 11/5

Sheetal Bio -
NA 0.16 0.00 0.00 22.40 0/0
Agro

Platinum
4794.87 0.11 0.00 46.75 14.96 0/0
Corporation

Punctual
NA 0.00 0.00 2.81 10.00 0/0
Trading

30
PRODUCTS

Sugars Alcohol & Alco Chemicals

 Grade M31  Industrial Alcohol

 Ethanol
 Grade S31  Acetic Acid
 Acetic Anhydride
 Ethyl Acetate

Aspirin Chloro Alkali

 Aspirin IP  Caustic Soda Lye

 Acetyl Salicylicacid ph. Eur.  Caustic Soda Flakes
 Aspirin BP  Caustic Potash Lye
 Aspirin USP  Caustic Potash Flakes
 Aspirin Starch Granules  Potassium Carbonate
 Pure Salicylic Acid
(Powder / Granules)
 Salicylic Acid (Tech.)
 Liquid Chlorine
 Sodium Salicylate (Tech.)
 Hydrochloric Acid
 Hydrochloric Acid (CP Grade)
 Sodium Hypochlorite
 Hydrogen Gas
 Poly Aluminium Chloride
(Liquid)

Sulphuric Acid Super Phosphate

 Sulphuric Acid  Single Super Phosphate

THEORITICAL FRAME WORK

31
MEANING OF FLOW OF FUNDS:

The term flow means movement & includes both ‘inflow’ & ‘outflow’. The
term flow of funds means transfer of economic values from one asset of equity to
another. Flow of funds is said to have taken place when any transaction makes
changes in amount of funds available before happening of transactions. If the effect
of transaction results in increase of funds. It is called a “source of funds” and it is
results in decrease of funds, it is known as an application of funds.

The term “FUND” has a variety of meanings. There are people who take it
synonymous to cash and to them there is no difference between a Funds Flow
Statement and a Cash Flow Statement. While others include marketable securities
beside cash in the definition of the term funds. The International Accounting standard
No. 7 on statement of changes in financial position also recognizes the absence of
single, generally accepted definition of term. According to the standard, “The term
fund generally refers to cash and cash equivalents or to working capital”.

These statements can be classified into two:

INCOME STATEMENT

The income statement or the Profit & Loss account is a document

which indicates the extent of success achieved by a business in earning
profits.

It reports the result of business activities and indicates the reasons

for the Profitability or lack thereof.

The income statement does not highlight the changes in the

financial position of a business it does not reveal the inflows and out
flowing of funds in business during a particular period.

32
RULE
The flow of funds occurs when a transaction changes on one hand a non-
current A/c and on the other a current A/c and Vice-versa. According to working
capital concept of funds the term “Flow o Funds” return to movement of funds in
working capital.

If any transaction results in increase in working capital. It is said to be a

“source” or “inflow of funds” and if it results in decrease of working capital, it is said
to be “application” or “out flow of funds”.

CURRENT ASSETS
Current Assets are those assets, which in the ordinary course of business can
be or will be converted into cash within a short period of normally one accounting
year.

CURRENT LIABILITIES
Current liabilities are those liabilities which are intended to be paid in ordinary
course of business with in short period of normally one accounting year out of the
current assets or the income of the business.

FUNDS FLOW STATEMENT:

Introduction:
The Funds flow statement is a statement, which shows the movement of funds
and is a report of the financial operation of the business under taking. It indicates
various means by which funds were obtained during a particular period and the ways
in which these funds were employed.

33
Definition of fund flow statement:
Fund flow statement is a statement which shows the inflow and out flow of
funds between two dates of balance sheet. So, it is known as the statement of changes
in financial position. We all know that balance sheet shows our financial position and
inflow and outflow of fund affects it. So, in company level business, it is very
necessary to prepare fund flow statement to know what the sources are and what are
applications of fund between two dates of balance sheet. Generally, it is prepare after
getting two year balance sheet.

According to Prof. Anthony, “The funds flow statement describes the sources
from which additional funds were derived and the use of which these funds were put.”

Objectives of Fund Flow Statement:

 To ascertain the funds generated from operations. It reveals the sources of
funds and their applications.
 It acts as an instrument of planning and control.
 It is prepared based on the financial statements of two consecutive
years.
 It takes into account funds available not only from trading operations but also
from other sources like issue of share etc.
 Preparation of the statement is not a statutory obligation.
 It can be prepared as and when management wants it.

Importance of Funds Flow Statement:

 Helps in analysis of financial operations.

 Helps in formulation of realistic dividend policy.

34
 Helps in proper allocation of resources.

 It acts as a future guide.

 Helps in appraising the use of working capital.

 It helps knowing the overall creditworthiness of a firm.

 It throws light on many questions of general interest.

Advantages of Funds Flow Statement:

Funds flow statement is prepared to show changes in the assets, liabilities and
equity between two balance sheet dates, it is also called statement of sources and uses
of funds. Let’s look at some of the advantages of preparing funds flow statement –

 Funds flow statement reveals the net result of operations done by the
company during the year.
 In addition to the balance sheet, it serves as an additional reference for many
interested parties like creditors, suppliers, government etc… to look into
financial position of the company.
 It shows how the funds were raised from various sources and also how those
funds were put to use in the business, therefore it is a great tool for
management when it wants to know about where and from funds were raised
and also how those funds got utilized into the business.
 It reveals the causes for the changes in liabilities and assets between the two
balance sheet dates therefore providing a detailed analysis of the balance
sheet of the company.
 Funds flow statement helps the management in deciding its future
course of plans and also it acts as a control tool for the management.

Funds flow statement should not be looked alone rather it should be

used along with balance sheet in order judge the financial position of the
company in a better way.

Disadvantages of Funds Flow Statement:

35
Funds flow statement has many advantages; however it has some
disadvantages or limitations also. Let’s look at some of the limitations of funds flow
statement –
 Funds flow statement has to be used along with balance sheet and profit and
loss account, it cannot be used alone.
 It does not reveal the cash position of the company, and that is why company
has to prepare cash flow statement in addition to funds flow statement.
 Funds flow statement merely rearranges the data which is there in the books
of account and therefore it lacks originality. In simple words it presents the
data in the financial statements in systematic way and therefore many
companies tend to avoid preparing funds flow statements.
 Funds flow statement is basically historic in nature, that is it indicates what
happened in the past and it does not communicate anything about the future,
only estimates can be made based on the past data and therefore it cannot be
used the management for taking decision related to future.

List of current or working capital accounts

Current Liabilities Current Assets

1. Bills payable 1. Cash in hand.

2. Sundry creditors or accounts 2. Cash at bank.

payable accrued or outstanding
expenses

3. Dividend payable Bank over 3. Bills receivable.

draft.

36
4. Short-term loans advances 4. Sundry debtors or accounts receivable.
&deposits.

5. Provision against current 5. Short term loans & advances

assets.

6. Provision for taxation, if it 6. Temporary or Marketable investments.

does not amount to appropriation of
profits.

7. Proposed dividend (may be a 7. Inventories or stocks Such as

current or non-current liability).

1. raw material

2. work in process

3. stores & spares

4. finished goods

8. Prepaid expenses

9. Accrued incomes

37
List of non-current or permanent capital accounts

Non-current or permanent Noncurrent or permanent assets

liabilities

1. Equity share capital 1. Goodwill

2. Preference share capital 2. Land

3. Redeemable preference share 3. Building

capital

4. Debentures 4. Plant & machinery

5. Long term loans 5. Furniture & fitting

6. Share premium Account 6. Trade marks

7. Share premium account 7. Patent rights

8. Share forfeited account 8. Long-term investment

9. Profit & loss account (balance 9. Debit balance of profit and loss account
of profit, i.e., credit balance)

10. Capital reserve 10. Discount on issue of shares

11. Capital redemption reserve 11. Discount on issue of debentures

12. Provision for depreciation 12. Preliminary Expenses

against fixed assets

1. general reserve 13. Other deferred expenses

2. dividend equalization fund

13. Insurance fund

14. Compensation fund

15. Sinking fund

16. Investment Fluctuation fund

17. Provision for Taxation

18. Proposed dividend

38
PROCEDURE FOR PREPARING A FUNDS FLOW STATEMENT:

The funds flow statement is prepared by comparing two balance sheets and
with the help of such other information derived from the accounts as may be needed.
The preparation of a funds flow statement consists of two parts:

1. Statement or schedule of changes in working capital.

2. Statement of sources and application of funds.

1. 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 prepared to show the changes in the
working capital between the two balance sheet dates. This statement is prepare with
the help of current assets and current liabilities derived from the two balance sheets

As, Working Capital = Current Assets – Current Liabilities

i) An increase in current assets increases the working capital.

ii) A decrease in current assets decreases the working capital.
iii) An increase in current liabilities decreases the working capital.
iv) A decrease in current liabilities increases the working capital.

A typical for statement or schedule of changes in working capital is as follows

39
1. Statement of changes in Working Capital

Effect in working capital

Particulars Previous year Current Year Increase Decrease

Current Assets

Cash in hand xxx xxx

Cash at bank xxx xxx

Bills Receivable xxx xxx

Sundry Debtors xxx xxx

Temporary Investments xxx xxx

Stock or Inventories xxx xxx

Prepaid Expenses xxx xxx

Accrued Incomes xxx xxx

Total Current Assets xxx xxx

Current Liabilities

Bills Payable xxx xxx

Sundry Creditors xxx xxx

Outstanding Expenses xxx xxx

Bank Overdraft xxx xxx

Short term advances xxx xxx

Dividend Payable xxx xxx

Proposed Dividend * xxx xxx

Provision for Taxation * xxx xxx

Total Current Liabilities xxx xxx xxx Xxx

Working Capital (CA - CL) xxx Xxx

Net Increase / Decrease in Working

Capital xxx xxx xxx Xxx

* May or may not be a current liability.

2. Statement of Sources and Application of Funds

40
Funds flow statement is a statement which indicates various sources from
which funds (working capital) have been obtained during a certain period and the uses
applications to which these funds have been put during that period. Generally, the
statement is prepared in tow formats.

i) Report Form

ii) Form or an Account form or Self Balancing Type.

41
Specimen of Report Form of Funds Flow Statement

Particulars Amount (Rs.)

Sources of Funds

Funds from Operations xxx

Issue of Share Capital xxx

Raising of Long term Loans xxx

Receipts from Partly Paid Share Called-up xxx

Sales of Non Current (Fixed) Assets xxx

Non Trading Receipts (Dividend Received….) xxx

Sale of Investment (long term) xxx

Decrease in Working Capital xxx

(as per schedule of changes in working capital) xxx

Total xxx

Applications of Funds

Funds Lost in Operations xxx

Redemption of Preference Share Capital xxx

Redemption of Debentures xxx

Repayment of Long term Loans xxx

Purchase of Non Current (Fixed) Assets xxx

Purchase of Long term Investment xxx

Non Trading Payments xxx

Payment of Dividend * xxx

Payment of Tax * xxx

Increase in Working Capital xxx

(as per schedule of changes in working capital) xxx

Total xxx

42
Form or an Account Form or Self Balancing Type Funds Flow
Statement

Amount
Sources (Rs.) Applications Amount (Rs.)

Funds from
Operations xxx Funds Lost in Operations xxx

Issue of Share Redemption of Preference

Capital xxx Share Capital xxx

Issue of Debentures xxx Redemption of Debentures xxx

Raising of Long Repayment of Long term

term Loans xxx Loans xxx

Receipts from Partly

paid shares, called Purchase of Non Current
up xxx (Fixed) Assets xxx

Non trading Purchase of Long term

Receipts (Dividend) xxx Investments xxx

Sale of Long term

Investment xxx Non trading Payments xxx

Net Decrease in
Working Capital xxx Payment of Dividends * xxx

Payment of Taxes* xxx

Net Increase in Working

Capital Xxx

xxx Xxx

*Note

Payment of dividend and tax will appear as an application of funds only when
these items are appropriations of profits and not current liabilities.

Basically there are two methods of calculating Funds from

Operations

43
a) The first method is to prepare the profit and loss account a fresh by
taking into consideration only fund and operational terms which involve funds
and are related to the normal operations of the business.
b) The second method (which is generally used) is to proceed from the
figure of net profit and net loss as arrived at from the profit and loss account
already prepared.
Funds from Operations by this method can be calculated as under

Funds from Operations can also be calculated by preparing adjusted P&L

44
DATA ANALYSIS AND INTERPRETATION

STATEMENT OF CHANGES IN WORKING CAPITAL

For the year 2012-2013

Particulars 2011 2012 Changes in working capital

(Rs) (Rs) Increase Decrease

Current Assets:

Inventories 143,18,24,825 135,93,30,982 ---- 7,24,93,843

Sundry debtors 11, 21, 33,122 10, 80, 11,642 ----- 41,21,480

Cash and bank balances 5,02,62,789 6,81,47,393 1,78,84,604 ----

Other current assets 10,21,849 15,13,709 4,91,860 ----

Loans and advances 38,99,83,272 46,65,45,285 7,65,62,013 ----

Total current assets 198,52,25,857 200,35,49,011

Current liabilities and

Provisions:

Liabilities 101,65,48,666 85,25,17,150 16,40,31,516 ----

Provisions 84,36,782 1,24,02,990 ---- 39,66,208

Total current liabilities

And provisions 102,49,85,448 86,49,20,140

Net working capital:

(C.A-C.L) 96,02,40,409 113,86,28,871

Decrease in working

Capital 17,83,88,462 17,83,88,462

TOTAL 113,86,28,871 113,86,28,871 25,89,69,993 25,89,69,993

45
FUND FLOW STAMENT

(For the year 2012-2013)

(Statement of sources & Applications of Funds)

Sources Amount in Rs Application Amount in Rs

Profit from Business 93,49,32,515 Redemption of shares at _

Operations par(Discount/premium)

Redemption of debentures
_
Issue of share capital at
---
par(Discount/Premium)
Payment of unsecured loans 2,50,73,000

Payment of secures loans 1,49,42,845

Issue of Debentures
Provision for tax & dividend 30,44,55,338
---
(Discount/Premium)
Purchase of fixed assets 56,57,18,65
Sales of other fixed
Purchase of investment 13,62,06,281
3,45,73,641
assets

Dividend received 13,69,077

Deferred tax liabilities 7,55,20,888

104,63,96,121 104,63,96,121

46
SOURCES AMOUNT
profit from business operations 934932515
sales of other fixed assets 34573641
Dividend received 1369077
Deferred tax liabilities 75520888

Particulars 2013 2014 Changes in working capital

(Rs) (Rs) Increase Decrease

Current Assets:

Inventories 135,93,30,982 132,75,07,945 ---- 3,18,23,037

Sundry debtors 10,80,11,642 11,45,09,441 64,97,799 ----

Cash and bank balances 6,81,47,393 17,67,30,095 10,85,82,702 ----

Other current assets 15,13,709 28,08,246 12,94,537 ----

Loans and advances 46,65,45,285 14,02,58,734 ---- 32,62,86,551

Total current assets 200,35,49,011 176,18,14,461

Interpretation:
Current liabilities and
In the year 2012-2013 the profits from business operations is Rs934932515,
Provisions:
sales of other fixed assets is Rs34573641, The amount of dividend received is
Liabilities 85,25,17,150 116,87,78,350 ---- 31,62,61,200
Rs1369077 and deferred tax liability is 75520888.
Provisions 1,24,02,990 1,56,15,751 --- 32,12,761

Total current liabilities

And provisions 86,49,20,140 118,43,94,101

Net working capital:

(C.A-C.L) STATEMENT OF CHANGES

113,86,28,871 IN WORKING CAPITAL
57,74,20,360

Decrease in working For the year 2013-2014

Capital 56,12,08,511 56,12,08,511

47
TOTAL 113,86,28,871 113,86,28,871 67,75,83,549 67,75,83,549
48
FUND FLOW STAMENT

(For the year 2013-2014)

(Statement of sources & Applications of Funds)

Sources Amount in Rs Application Amount in Rs

Profit from Business 14,94,68,510 Redemption of shares at ---

Operations par(Discount/premium)
---
Issue of share capital at Redemption of debentures ---
par(Discount/Premium)
Payment of unsecured loans 3,97,00,000
---
Issue of Debentures
Payment of secures loans 8,78,,72,802
(Discount/Premium)
Provision for tax & dividend 12,92,87,304
Sales of other fixed 76,16,243
Purchase of fixed assets 23,33,14,409
assets
Purchase of investment 8,85,39,586
Dividend received 36,76,768

Deferred tax liabilities 4,49,43,218

Decreasing working 24,36,98,372

capital

Sale of investment 12,93,10,990

57,87,14,101 57,87,14,101

49
SOURCES AMOUNT
Profit from business operations 149468510
Sales of other fixed assets 7616243
Dividend received 3676768
Deferred tax liabilities 44943218
Decreasing working capital 243698372
Sale of investment 129310990

Interpretation:
In the year 2013-2014 the profit from business operations is Rs149468510,
sales of other fixed assets are Rs7616243, The amount of dividend received
isRs3676768, deferred tax liability is Rs 44943218, Decreasing working capital is
Rs243698372 and sale of investment is Rs129310990.

50
STATEMENT OF CHANGES IN WORKING CAPITAL

For the year 2014-2015

Particulars 2014 2015 Changes in working capital

(Rs) (Rs) Increase Decrease

Current Assets:

Inventories 132,75,07,945 126,77,78,839 ---- 5,97,29,106

Sundry debtors 11,45,09,441 6,09,19,428 ---- 5,35,90,013

Cash and bank balances 17,67,30,095 20,84,05,389 3,16,75,294 ----

Other current assets 28,08,246 23,12,881 ---- 4,95,365

Loans and advances 14,02,58,734 20,23,86,069 6,21,27,335 -----

Total current assets 176,18,14,461 174,18,02,606

Current liabilities and

Provisions:

Liabilities 116,87,78,350 73,47,84,951 43,39,93,399 -----

Provisions 1,56,15,751 4,58,02,178 ----- 3,01,86,427

Total current liabilities

And provisions 118,43,94,101 78,05,87,129

Net working capital:

(C.A-C.L) 57,74,20,360 96,12,15,477

Increase in working 8,37,95,117 ---- 38,37,95,117

Capital

TOTAL 96,12,15,477 96,12,15,477 52,77,96,028 52,77,96,028

51
FUND FLOW STAMENT

(For the year 2014-2015)

(Statement of sources & Applications of Funds)

Sources Amount in Rs Application Amount in Rs

Profit from Business 4,19,75,675 Redemption of shares at ---

Operations par(Discount/premium)

Payment of secured loans 24,52,09,679 Redemption of debentures ---

Unsecured loans 40,78,000 Deferred tax liability 33,50,790

Sales of other fixed 34,31,604 Provision for tax & dividend 46,39,99,615

assets Purchase of fixed assets 8,70,94,809

Dividend received 37,80,090 Purchase of investment 11,13,209

Sale of investment 64,08,78,492 Increasing working capital 38,37,95,117

93,08,78,492 93,93,53,540

52
SOURCES AMOUNT
Profit from business operations 41975675
Payment of secured loans 245209679
Unsecured loans 407800

Sales of other fixed assets 3431604

Dividend received 3780090
Sales of investment 640878492

Particulars 2015 2016 Changes in working capital

(Rs) (Rs) Increase Decrease

Current Assets:

Inventories 126,77,78,839 128,45,84,247 1,68,05,408 -----

Sundry debtors 6,09,19,428 3,62,65,260 ---- 2,46,54,168

Cash and bank balances 20,84,05,389 5,78,68,827 ---- 15,05,36,562

Other current assets 23,12,881 18,15,538 ---- 4,97,343

Loans and advances 20,23,86,069 21,44,20,338 1,20,34,269 ----

Total current assets 174,18,02,606 1,59,49,54,210

Current liabilities and

Provisions:

Liabilities
Interpretation: 73,47,84,951 59,53,89,436 13,93,95,515 ----

Provisions 1,56,15,751 4,58,02,178 ----- 3,01,86,427

In the year 2014-2015 the profit from business operations is Rs41975675,
Total current liabilities
payment of secured loans are Rs245209679, unsecured loans are Rs4078000, sales of
And provisions
other fixed assets 78,05,87,129The amount
are Rs3431604, 61,56,81,689
of dividend received is Rs3780090 ,
and sale of investment is Rs640878492.
Net working capital:

(C.A-C.L) 96,12,15,477 97,92,72,512

Increase in working 1,80,57,035 ---- 1,80,57,035

STATEMENT OF CHANGES IN WORKING CAPITAL
Capital
For the year 2015-2016

TOTAL 97,92,72,512 97,92,72,512 19,37,45,108 19,37,45,108

53
54
FUND FLOW STAMENT

(For the year 2015-2016)

(Statement of sources & Applications of Funds)

Sources Amount in Rs Application Amount in Rs

Profit from Business 31,51,64,361 Redemption of shares at ---

Operations par(Discount/premium)

Unsecured loans 5,57,59,000 Redemption of debentures ---

Issue of share capital at --- Payment of secured loans 16,42,09,600

par(Discount/Premium)
Deferred tax liability 1,70,220
Issue of Debentures
--- Provision for tax & 6,67,52,681
(Discount/Premium) dividend

Sales of other fixed Purchase of fixed assets 3,45,84,462

1,86,07,209
assets Purchase of investment 11,25,95,453

Dividend received Increasing working capital 1,80,57,035

68,38,881

39,63,69,451 39,63,69,451

55
SOURCES AMOUNT
Profit from business operations 315164361

Unsecured loans 55759000

Sales of other fixed assets 18607209

Dividend received 6838881

Interpretation:
In the year 2015-2016 the profit from business operations is Rs315164361,
unsecured loans are Rs55759000, sales of other fixed assets are Rs18607209, and the
amount of dividend received is Rs6838881.

56
STATEMENT OF CHANGES IN WORKING CAPITAL

For the year 2016-2017

Particulars 2016 2017 Changes in working capital

(Rs) (Rs) Increase Decrease

Current Assets:

Inventories 128,45,84,247 110,98,19,602 ----- 17,47,64,645

Sundry debtors 3,62,65,260 5,05,57,226 1,42,91,966 ------

Cash and bank balances 5,78,68,827 5,35,11,251 ---- 43,57,576

Other current assets 18,15,538 52,89,046 34,73,508 -------

Loans and advances 21,44,20,338 30,25,24,380 8,81,04,042 --------

Total current assets 1,59,49,54,210 152,17,01,505

Current liabilities and

Provisions:

Liabilities & Provisions 59,53,89,436 57,67,90,627 1,85,98,764

Total current liabilities

And provisions 59,53,89,436 57,67,90,627

Net working capital:

(C.A-C.L) 99,95,64,774 94,49,10,833

Decrease in working 5,46,53,941 5,46,53,941

Capital

TOTAL 99,95,64,774 99,95,64,774 17,91,22,221 17,91,22,221

57
FUND FLOW STAMENT

(For the year 2016-2017)

(Statement of sources & Applications of Funds)

Sources Amount in Rs Application Amount in Rs

Profit from Business Operations 31,48,56,704 Redemption of shares at ---
par(Discount/premium)
Issue of share capital at ---
par(Discount/Premium) Redemption of debentures ---

Issue of Debentures Payment of debentures 35,44,84,462

__
(Discount/Premium) Purchase of fixed assets 16,23,09,600

Unsecured loans 3,33,16,000 Taxes paid 67,86,53,107

Sales of other fixed 1,70,85,000 Purchase of investment 12,74,05,660

assets

decrease in working capital 5,46,53,941

Other income 4,10,25,697

47,09,37,342 47,09,37,342

58
SOURCES AMOUNT
Profit from business operations 314856704
Unsecured loans 33316000
Sales of other fixed assets 17085000
Decrease in working capital 54653941
Other income 41025697

Interpretation:
In the year 2016-2017 the profit from business operations is Rs314856704,
unsecured loans are Rs33316000, sales of other fixed assets are Rs17085000, the
amount of decrease in working capital Rs54653941and other income is Rs41025697.

FINDINGS
59
 It is clear that the table of current ratio that Andhra Sugars Ltd has been
enjoying satisfactory position 2012-2013. It has been observed that the current
ratio is above the bench mark.

 A ratio 1:1 has been suggested as the bench mark for quick ratio. The liquidity
ratio and absolutely liquidity ratio if the company is satisfactory provided the
companies drawing limits with the banks in cash credits accounts etc are
considered, this is because while considering liquidity assets this drawing
right with bank also provided liquidity.

 Debt equity ratio if Andhra Sugars Ltd is highly satisfactory and it is also
maintaining it at consistent rate it is better for the company to continue the
same position.

 The ratio of return on total assets as decreased floutingly there is a negative

return ratio on 2012. Sales and profits the entire profitability ratios ate
satisfactory.

 From the year 2012-2013 the debtor’s turnover ratio in Andhra Sugars Ltd
sugar Ltd is highly satisfactory. This is due to implementation of cash &
carries policy by the company.

60
SUGGESTIONS

 It is advisable to maintain the same growth in sales in future periods.

 By applying the various inventories maintenance methods try to reduce the

level of inventories by which the company will get sufficient financial
resources to repay the huge amount of its sufficient liabilities.

 As the government decides about the price for sugar it would be suggestible to
maintain sufficient cash reserves with the Organization to maintain stability in
its operations if low price is fixed.

 Debt collection performance of the company may further be improved.

 The debtor’s turnover ratio is increasing year by the year and should be
continued.

61
CONCLUSION:

The Andhra sugar’s ltd sources, and applications are maintained very well which
shows a good improvement in liquidity position. The company can maintain and
improve the same type of utilization of funds within the organization. By observing
the sources and applications, it is clear that the company is actively increasing or
standardizing its operations. The operational efficiency of the company was increased.
The company maintains the good working capital. It must be useful to develop the
organization very effectively.

62
BIBLIOGRAPHY

 KHAN&JAIN. P.K “THEORY AND PROBLEMS OF FINANCIAL

MANAGEMENT”. TATA.MC. GRAHIL, NEW DELHI 2004.

 KULKARNI P.V, “FINANCIAL MANAGEMENT”, HIMALAYA

PUBLISHING HOUSE, MUMBAI 1999.

 PANDEY. I.M, “FINANCIAL MANAGEMENT”, VIKAS PUBLISHING

HOUSE PVT.LTD, NEW DELHI, 2005.

 PRASANNA CHANDRA, “FINANCIAL MANAGEMEN”, TATA MC.

GRAWHILL, NEW DELHI, 2002.

 SHARMA R.K, “MANAGEMENT ACCOUNTANCY PRINCIPLESW AND

PRACTISE”, KALYANI PUBLISHERS, NEW DELHI, 1999.

Websites

www.google.com

www.andhra sugar ltd.com

63
BALANCE SHEET AS ON 31ST MARCH 2012-2013

SCHEDULE As at 31st As at 31st

March 2012 March 2013
SOURCES OF FUNDS
Shareholder’s funds
Share capital A 11,33,85,050 11,33,85,050
Reserves and surplus B 1,27,84,18,716 90,12,44,947
1,39,18,03,766 1,01,46,29,997
Loan funds
Secured loans C 28,15,50,102 29,64,92,947
Unsecured loans D 21,96,22,000 24,46,95,000
50,11,72,102 54,11,87,947
Deferred tax liability
Deferred tax liability 25,03,97,136 20,99,52,818
Less:- Deferred tax Assets 3,81,11,364 7,31,87,934
21,22,85,772 13,67,64,884
TOTAL 2,10,52,61,640 1,69,25,82,828
APPLICATION OF FUNDS
Fixed assets
Gross block E 1,85,31,65,250 1,32,20,20,234
Less: Depreciation 50,19,41,957 44,14,75,638
Net block 1,35,12,23,923 88,05,44,596
Capital working progress 4,58,43,001 16,43,32,340
1,39,70,66,294 1,04,48,76,936
Investments F 1,63,63,918 1,44,30,960
Current assets, loan and advances
Inventories G 1,35,93,30,982 1,43,18,24,825
Sundry debtors H 10,80,11,642 11,21,33,122
Cash and bank balance I 6,81,47,393 5,02,62,789
Other current assets J 15,13,709 10,21,849
Loans and advances K 46,65,45,285 38,99,83,272
200,35,49,011 1,98,52,25,857
Less: current liabilities 131,17,17,583 1,35,19,50,925
Current liabilities
Provisions
Net current assets 69,18,31,428 63,32,74,932
TOTAL 2,10,52,61,640 1,69,25,82,828

BALANCE SHEET AS ON 31ST MARCH 2013-2014

64
SCHEDULE As at 31st As at 31st
March 2013 March 2014
SOURCES OF FUNDS
Shareholder’s funds
Share capital A 11,33,85,050
Reserves and surplus B 1,27,84,18,716
1,39,18,03,766 1,01,46,29,997
Loan funds
Secured loans C 28,15,50,102 29,64,92,947
Unsecured loans D 21,96,22,000 24,46,95,000
50,11,72,102 54,11,87,947
Deferred tax liability
Deferred tax liability 25,03,97,136 20,99,52,818
Less:- Deferred tax Assets 3,81,11,364 7,31,87,934
21,22,85,772 13,67,64,884
TOTAL 2,10,52,61,640 1,69,25,82,828
APPLICATION OF FUNDS
Fixed assets
Gross block E 1,85,31,65,250 1,32,20,20,234
Less: Depreciation 50,19,41,957 44,14,75,638
Net block 1,35,12,23,923 88,05,44,596
Capital working progress 4,58,43,001 16,43,32,340
1,39,70,66,294 1,04,48,76,936
Investments F 1,63,63,918 1,44,30,960
Current assets, loan and advances
Inventories G 1,35,93,30,982 1,43,18,24,825
Sundry debtors H 10,80,11,642 11,21,33,122
Cash and bank balance I 6,81,47,393 5,02,62,789
Other current assets J 15,13,709 10,21,849
Loans and advances K 46,65,45,285 38,99,83,272
200,35,49,011 1,98,52,25,857
Less: current liabilities 131,17,17,583 1,35,19,50,925
Current liabilities
Provisions
Net current assets 69,18,31,428 63,32,74,932
TOTAL 2,10,52,61,640 1,69,25,82,828

BALANCE SHEET AS ON 31ST MARCH 2014-2015

SCHEDULE As at 31st As at 31st

March 2014 March 2015
SOURCES OF FUNDS
Shareholder’s funds
Share capital A 11,33,85,050 11,33,85,050

65
Reserves and surplus B 1,44,75,96,744 1,27,84,18,716
1,56,09,81,794 1,39,18,03,766
Loan funds
Secured loans C 19,36,77,300 28,15,50,102
Unsecured loans D 17,99,22,000 21,96,22,000
37,35,99,300 50,11,72,102
Deferred tax liability
Deferred tax liability 29,58,16,139 25,03,97,136
Less:- Deferred tax Assets 3,85,87,149 3,81,11,364
25,72,28,990 21,22,85,772
TOTAL 2,19,18,10,084 2,10,52,61,640
APPLICATION OF FUNDS
Fixed assets
Gross block E 2,07,88,63,416 1,85,31,65,250
Less: Depreciation 59,75,83,948 50,19,41,957
Net block 1,48,12,79,468 1,35,12,23,923
Capital working progress 7,28,45,659 4,58,43,001
1,55,41,25,127 1,39,70,66,294
Investments F 12,65,92,017 1,63,63,918
Current assets, loan and advances
Inventories G 1,32,75,07,945 1,35,93,30,982
Sundry debtors H 11,45,09,441 10,80,11,642
Cash and bank balance I 17,67,30,095 6,81,47,393
Other current assets J 28,08,246 15,13,709
Loans and advances K 14,02,58,734 46,65,45,285
1,76,18,14,461 200,35,49,011
Less: current liabilities L 131,17,17,583
Current liabilities 1,16,87,78,350
Provisions 8,19,43,171
Net current assets 51,10,92,940 69,18,31,428
TOTAL 2,19,18,10,084 2,10,52,61,640

BALANCE SHEET AS ON 31ST MARCH 2015-2016

SCHEDULE As at 31st As at 31st

March 2015 March 2016
SOURCES OF FUNDS
Shareholder’s funds
Share capital A 11,33,85,050 11,33,85,050
Reserves and surplus B 145,46,49,267 143,42,19,392
156,80,34,317 154,76,04,442

66
Loan funds
Secured loans C 27,46,77,379 43,88,86,979
Unsecured loans D 23,97,59,000 18,40,00,000
51,44,36,379 62,28,86,979
Deferred tax liability
Deferred tax liability 28,78,93,073 30,13,40,523
Less:- Deferred tax Assets 3,41,85,093 4,74,62,323
25,37,07,980 25,38,78,200
TOTAL 233,61,78,676 242,43,69,621
APPLICATION OF FUNDS
Fixed assets
Gross block E 217,85,03,874 216,25,26,621
Less: Depreciation 79,66,49,926 70,11,93,785
Net block 138,18,53,948 146,13,32,836
Capital working progress 1,40,65,017 1,44,95,594
139,59,18,965 147,58,28,430
Investments F 5,38,45,587 5,36,53,134
Current assets, loan and advances
Inventories G 128,45,84,247 126,77,78,839
Sundry debtors H 3,62,65,260 6,09,19,428
Cash and bank balance I 5,78,68,827 20,84,05,389
Other current assets J 18,15,538 23,12,881
Loans and advances K 21,44,20,338 20,23,86,069
159,49,54,210 174,18,02,606
Less: current liabilities L
Current liabilities 59,53,89,436 73,47,84,951
Provisions 11,31,50,650 11,21,29,598
Net current assets 88,64,14,124 89,48,88,057
TOTAL 233,61,78,674 242,43,69,621

BALANCE SHEET AS ON 31ST MARCH 2016-2017

SCHEDULE As at 31st As at 31st

March 2016 March 2017
SOURCES OF FUNDS
Shareholder’s funds
Share capital A 11,38,85,050 11,33,85,050
Reserves and surplus B 159,25,95,072 144,75,96,744
170,59,80,122 156,09,81,794
Loan funds
Secured loans C 15,08,00,583 27,46,77,379

67
Unsecured loans D 27,30,75,000 23,97,59,000
42,38,75,583 51,44,36,379
Deferred tax liability
Deferred tax liability 27,33,87,498 28,78,93,073
Less:- deferred tax Assets 3,55,22,337 3,41,85,093
23,78,65,161 25,37,07,980
TOTAL 236,77,20,866 233,61,78,676
APPLICATION OF FUNDS
1.Fixed assets
Gross block E 224,42,54,858 217,85,03,874
Less: Deprecation 89,19,10,077 79,66,49,926
Net block 135,23,44,781 138,18,53,948
Capital working progress 1,74,77,285 1,40,65,017
136,98,22,066 139,59,18,965
Investments F 18,95,22,066 5,38,45,587
Current assets, loans and
advances
Inventories G 110,98,19,602 128,45,84,247
Sundry Debtors H 5,05,57,226 3,62,65,260
Cash and bank balances I 5,35,11,251 5,78,68,827
Other current assets J 52,89,046 18,15,538
Loans and advances K 30,25,24,380 21,44,20,338
152,17,01,505 159,49,54,210
Less current liabilities and
provisions L
Liabilities 57,67,90,672 59,53,89,436
Provisions 13,66,05,225 11,31,50,650
Net current assets 80,83,05,608 88,64,14,124
TOTAL 236,77,20,866 233,61,78,674

68