Tirumal Milk Products - Completed

Funds flow statement
A Project report on funds flow statement of Tirumala Milk pvt. Ltd

Project Work Submitted in partial fulfillment of the requirements for the award of the degree of
BACHELORS OF COMMERCE (COMPUTER APPLICATIONS)
SRI VENKATESWARA UNIVERSITY
By
NAME OF THE STUDENT Reg. No
1. T.Kumar Raja 0216104524
2. T.Bharat 0216104525
3. V.Bhuvaneswari 0216104526
4. Y.Devi Priya 0216104527
5. Y.Meena 0216104528
6. Y.Harika 0216104529
Under the esteemed guidance of

M.Arun Kumar, MCA
DEPARTMENT OF COMPUTERS
SRI SRINIVASA DEGREE COLLEGE

(Affiliated TO SV University)
#11-49/1,Jubli Hills, Newpet,Chandragiri-517101
2015-2018
DECLARATION
We hereby declare that the project Report entitled “A Project Report on funds flow
statement of Tirumala pvt. Ltd ” , is an original and independent work submitted by us

to S V University, Tirupathi, under the guidance of M.Arun Kumar, Lecturer in Computer
Science, Sri Srinivasa Degree College, Kothapet, Chandragiri for the degree of
BACHELORS OF COMMERCE ( COMPUTER APPLICATIONS) . This project work
has not been submitted earlier for the award of any other degree /diploma of any University.
Place: Chandragiri
Date:
T.Kumar Raja
T.Bharat
V.Bhuvaneswari
Y.Devi Priya
Y.Meena
Y.Harika
ACKNOWLEDGEMENT
It is our pleasure to acknowledge our independent to those persons who have extended their
support and co-operation in completing and preparing our project report.
We express my sincere thanks to our faculty coordinator, M.Arun Kumar, for her valuable,
timely and patient guidance in completing this task. We never forget her valuable advises and
continuous encouragement during the course of my study in this college.
We are very much thankful to our beloved Principal Sri R.Madhavaiah, M.Sc for his
valuable advises and continuous encouragement during the course of my study in this college.
We would like to place on record my gratitude to our beloved Chairman Sri. R.Madhavaiah
for his love and affection and meticulous care during our studies at this institute.
T.Kumar Raja
T.Bharat
V.Bhuvaneswari
Y.Devi Priya
Y.Meena
Y.Harika
CERTIFICATE
This is to certify that the project report titled “A Project Report on funds flow
statement of tirumala pvt. Ltd” Submitted to Sri Srinivasa Degree College,
Chandragiri is a bonafide record work done by the students bearing Hall Ticket
Nos: 0216104524-29 under my supervision for the partial fulfillment of
requirements for the award of degree Bachelor in Commerce (Computer
Applications) during 2017-18 academic year.
Signature
M.Arun Kumar
Lecturer in Computers
Date:
Place:
Head, Computers, SSDC

TABLE OF CONTENTS
SNO TOPIC PGNO

1 INTRODUCTION 6-9
2 REVIEW OF LITERATURE 10-18

INDUSTRY PROFILE 19-23
3
4 COMPANY PROFILE 24-33
5 PRODUCT PROFILE 34-41
6 SCOPE AND OBJECTIVES OF THE STUDY 42-43
7 RESEARCH METHODOLOGY 44-47

8 ANALYSIS AND INTERPRETATION 48-69
9 FINDINGS 70-71
10 SUGGESTIONS 72-72
11 CONCLUSION 73-78
12 BIBLOGRAPHY 79-79
INTRODUCTION OF FINANCE
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.
Financial management is that managerial activity which is concerned with the
planning and control of the firm’s financial resources. It was a branch of economics till 1890,
and as a separate discipline, it is of recent origin. Still it has no unique body of knowledge of
its own, and draws heavily on economics for its theoretical concepts even today.
The subject of financial management is of immense interest to both

academicians and practicing manager. It is of great interest to academicians because the
subject is still developing, and there are still certain areas where controversies exist for which
no unanimous solution has been reached as yet.
MEANING OF FINANCIAL MANAGEMENT
From the various definitions of the term business given above, it can be
concluded that the term business. Finance mainly involves, rising of funds, and their effective
utilization keeping in view the overall objective of the firm.
DEFINITION
1. Financial management is concerned with the efficient use of important economic

sources namely “capital funds”. “Solomon”
2. ‘Financial management is the application of the planning and control function to the
finance function’. ”Howard and Upton”
3. "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
4. “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
NATURE OF FINANCE
Financial statement are prepared for the purpose of presenting a periodical review
or report by management and deal with the state of investment in business and real achieved
during the period under review.
From this is clear that financial statements are affected by three things.
1. Recorded Facts
2. Accounting Conventions
3. Personal Judgment
SCOPE OF FINANCE
What is finance? What are a firm’s financial activities? How are they related to the
firm’s other activities? Firms create manufacturing capacities for production of goods. Some
provide services to customers. They sell their goods or services to earn profit. They raise
funds to acquire manufacturing and other facilities. Thus the three most important activities
of a business firm are:
1. Production
2. Marketing
3. Finance
FINANCE FUNCTIONS
The finance functions from the production marketing and other functions but function
themselves can be readily identified. The function of raising funds, investment them in asset
and distributing returns earned form assets from assets to shareholders are respectively
know as finance decision, investment decision and dividend decisions.
INVESTMENT DECISION
A firm investment decisions involve capital expenditures. They, therefore, referred as capital
budgeting decision.
 long-term assets:
Which yield a return over a period of time in future?
 Short _ term or current assets:

Define as those which in the normal course of business are convertible into cash without
dimension in value, usually within a year are
FINANCIAL DECISION
Financial function is a second important function to be performed by the financial

manager. Broadly he or she must decide when. Where from and how to acquire funds to meet
the firm’s investment needs.
DIVIDEND DECISION
Dividend decision is the third major financial decision. The financial manager must
decide whether the firm should distribute all profits or retain them, of distribution a period
and retain the balance.
LIQUIDITY DECISION
Investment in current assets affects the firm profitability and liquidity. Current assets
management that affects a firm’s liquidity is yet another important finance function. Current
assets should be managed efficiently of safe guarding the against the risk of liquidity.
INTRODUCTION
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 were
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 basis”.
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".
REVIEW OF LITERATURE
Funds means working capital this working capital represents the difference between
current assets, current liabilities. All flows of funds pass through working capital. This
means that every transaction has an effect on the firm’s working capital position.
1. An illustrates this as follows.

2. An increase in profits increases the cash balance and hence working capital.
3. An increase in long term liability or any decrease in fixed assets increase the cash
balance and hence working capital.
Therefore the funds flow statement shows the movement of funds into or out of the
current assets account of the firm.
The movement of funds has two aspects:
 Sources of funds
 Applications of funds
The former supply funds to the Working capital and enhances its position. On the
other hand, the latter consume funds and erode the Working capital position.
SOURCES OF FUNDS:
SALE OF FIXED ASSETS:
The sale value of fixed assets including if any is a one of the Sources of funds. Such
profits have been included in the sale value. They are not included in the profit figures. The
reason being that this would lie to double counting.
SALE OF SHARES:
The full amount collected from the issue of shares is treated as source of funds. This
means that the amount of premium discount if any is taken into account for this purpose.
LONG TERM BORROWINGS:
Longs raise including any premium or net of discount are considered as source of
funds. However loans in form of supplies or services of a non current nature do not
constitute source of funds.
FUNDS FROM OPERATIONS:

The most important sources of funds are profit from its operations. Profit from
operations means the net profit after taxes plus the non-cash expenses.
USES OF FUNDS:
PURCHASES OF FIXED ASSETS:
Acquisition of fixed assets causes an outflow of funds from the working capital pool.
While beginning this effect to the funds flow statement doubts counting must be avoided.
REPAYMENT OF CAPITAL:
A company redeems the redeemable preference shares. Moreover equity shares can
also be paid back as per the procedures laid down in the Indian companies Act, 1956
MAKE UP OF SHARES:
If the firm is operating at a loss, an outflow of funds will be there to the extent of net
loss minus the non-cash expenses like depreciation. Acquisition of investments and payment
of dividend.
The outflow of funds takes place on account of acquisition of long term investments
and payment of cash dividend.
Significance of Funds Flow Statement:
1. Useful in decision making.

2. Decisions relating to financing.
3. Decisions on capitalization.
4. Reasons for financial difficulties
5. Useful as control device
6. Useful to the external prices
Depreciation as a source of funds:
Depreciation refers to a decline in the value assets because of uses and / or

depreciation. “Depreciation” refers to the physical change as result of depreciation.
Obsolescence is the decline in value owing to the actual decreasing in the amount of asset,
such as the reduction the quality of cost in a mine timber in the forest, etc., deterioration and
obsolescence therefore any both occur even when an asset is not used. The Depreciation is
used in a limited sense to denote in loss in the value of an asset due to its use of enjoyment.
Broadly speaking, it a money cost or loss due to exhaustion or its usefulness.
FUND FLOW PATTERN DIAGRAMETIC APPROACH
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.
However financial analyst must know the purpose for which the loan was unitized
and the sources from which it has rises. This will help him in making a better estimate about
the company's financial position and polices.
General Rule:
The flow of funds occurs when a transaction changes on the one hand a non-current
account and vice versa.
1) A fixed asset and a current liability.
2) A current asset and a fixed liability.
3) A fixed liability and a current liability.
Uses-of Funds Flow Analysis:

 It helps in the analysis of financial operations.
 It throws light on many perplexing question of general interest.
 It helps in the formation of a realistic dividend policy.
 It helps in the proper allocation of resources.
 It acts as a future guide.
1) DISCLOSURE OF OVERALL VARIATION ONLY:
The funds flows statement shows overall change in working capital and not the variations in
individual items, including on most significant item cash, constituting the working capital.
2) MANIPULATION BY MANAGERS
Since non monitory assets such as inventories are included in working capital the
management may manipulate the net change in working capital and the resources of
funds from operation of applying any of the widely varying methods of inventory
valuation most suited to it.
3) GROUPING OF HETEROGENEOUS ITEMS
The concept of the working capital bundles monetary and non -monetary current
asset, together. Consequently it includes widely dice gent items such as cash,
receivables, inventories, prepayments etc and hence lacks homogeneity. Particularly,
stock of standard product ready for sale, May reasonable is treated as liquid resources,
but often a large part of the inventory represents work in progress throughout the
various stages of production. This is not proper to refer to inventories of repayments
as "funds".
Advantages of the Funds Flow Statement:
 It provides information about how funds are obtained and how they are put to actual
use.
 It registers changes in the flow of funds during a given period of time.
 It is supplementary to the conventional financial statements.
 It indicates how funds are generated from the different financial resources of a
corporation and how the reservoir of its assets is created. In other words it depicts
changes in the financial structure of the corporation.
 It is an important tool in the hands of the financial manger in the process of decision
making.
 It determines the financial consequences of business operations. It explains why in

spite of making profits a corporation is illiquid position.
 Indicates how funds are generated from the different financial resources of a
corporation and how the reservoir of its assets is created. In other words it depicts
changes in the financial structure of the corporation.
 It is an important tool in the hands of the financial manger in the process of decision
making.
 It determines the financial consequences of business operations. It explains why in
spite of making profits a corporation is illiquid position.
 It enables the financial manager to obtain answers to a number of questions regarding
the amount of loan requirements the purposes for which it may be required the terms
of repayment the source of repayment etc.
 It may enable the financial manger to allocate resources to productive investments.
 It is closely related to the normal business decision making process accounting
statements balance sheets and income statements and is related to a time span.
 It any enable the management to take decisions on planning a dividend policy on
challenge out a programmed of the financial re-organization.
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. .
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.
Working Capital = Current Assets – Current Liabilities
While preparing a schedule of changes in working capital, it should be note that-
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.
1. CURRENT RATIO:
Current ratio, include cash and those assets, which can be converted into cash within a
year, such as marketable securities, debtors and inventories.
Current liabilities include creditors, bills payable, accrued expenses, short term bank
loan, income tax liability and long term debt maturing in current year.
2. QUICK RATIO:
This ratio establishes a relationship between quick, or liquid, assets and current
liabilities. An asset is liquid if it can be converted into cash immediately reasonably soon
without a loss of value. Chas is the most liquid and included in quick assets are book debts
and marketable securities. Inventories normally require some time for realizing into cash. The
quick ratio is found out by dividing quick assets by current liabilities.
3. ABSOLUTE LIQUID / CASH RATIO:
It is suggested that it would be useful, for the management if the liquidity measure
also takes into account reserve borrowing power. As the firm’s real debt paying ability
depends not only on cash resources available with it but also on its capacity on its capacity on
borrow from the market at short notice. Absolute liquid assets include cash in hand and at
bank and marketable securities or temporary investments.
4. NET WORKING CAPITAL RATIO:
Working capital of a concern is directly related to sales, the current assets like
debtors, bills receivable, cash stock etc. Change within the increase of decrease in sales.
PROFORMA OF STATEMENT OF CHANGES IN WORKING

CAPITAL:
Particulars . . Changes in
working capital
Increase Decrease
( ) ( )
Current assets (CA)
Inventories : …….. ……..
Raw material …….. ……..
Consumable stores …….. ……..
Finished goods …….. ……..
Sundry debtors …….. ……..
Cash in hand …….. ……..
Balance with bank …….. ……..
Other current assets: …….. ……..
Deposits …….. ……..
Income tax (advance …….. ……..
tax)
Sales tax …….. ……..
Total Current …….. ……..

assets
Current liabilities
Trade creditors …….. ……..
Dealers deposits …….. ……..
Expenses payable ……… ……..
Total current …….. ……..

liabilities
Working Capital ……..

(current assets –
current liabilities)
Net Increase / *** ……..
decrease working
capital
******** ******** ******** ********
Statement of sources and application of funds:
Funds flow statement is a statement, which indicates various sources for which funds
have been obtained during a chain period and the uses or applications to which these funds
have been put during that period.
 Sources of funds
 Application of Funds.
Statement of sources and Applications:
Particulars Amount ( ) Particulars Amount ( )

Sources of funds Application of

funds
Funds from ……………… Funds costs in ………………

trading factitively operations
or
Operating profit
Repayment of
……………… ……………….
Issue of shares and debentures
debentures ………………
Receipts of ………………
Reduction in share
dividend and
……………… Capital
Interest
Sales Proceeds of
Non-current asset ……………… Interest and ………………
dividend paid
Long – term
[Payment of Long
Borrowings ………………
term loans.
Decrease in
working Capital
Increase in
working capital
……………… ………………
INDUSTRY PROFILE
THE MARKET OF MILK INDUSTRY IN INDIA:
A beginning in organized milk heading was made in India with in India with the
establishment of the “military dairy forms” (oldest is Allahabad, 1989), the salient features of
the market of milk industry so far have been,
 Handing of milk in co-operative milk union (oldest “Allahabad” 1913) established all
over the country on a small scale in the early stages.
 Long distance of refrigerator rail transport of milk from Amul to Mumbai since 1955.
 Pasteurization and bulling on a large scale for organized distribution on a large scale
for organized distribution was started as
array(1950)world(1961),Calcutta(haringhattor7959),Delhi(1959), Chennai(1965)etc.,
 Establishment of milk plant under the 5 year plant for dairy development all over India
these were taken up with the dual object of increasing the national level of milk
consumption and ensuring better return to the primary milk producer their maim was to
produce mare better and cheaper milk
Indian Dairy Industry 2014 Report
Beyond Milk: Value Added Dairy Products to boost up profits
The time has arrived for dairy players to skim the cream out of the milk business.
Rising consumption coupled with better margins in the value added dairy products (VADPs)
are driving the dairy players to get into the growth and higher profitable trajectory. Change in
demographics and rapid urbanization have resulted into manifold surge in the demand for
VADPs.
Milk products such as curd which were largely home products are currently available under
various brands. Due to convenience, health benefits and increased consumerism, milk
derivatives like buttermilk, low fat yogurt and flavored milk are nowadays part of regular
consumption.
The traditional way
Further, there was minimal involvement of private players in the industry as approximately
80% of the retail price of the liquid milk went back to the farmers leading to low operating
margins (4-5%). This was despite the consistent upsurge in the retail prices of the liquid milk.
Consequently, the dairy companies were left with insufficient internal funds to plough back
into the operations for adoption of modern technologies or development of milk variants.
The above reasons coupled with factors such as evolving tastes and preferences, higher
affordability, etc, lead to the entities venturing into the VADP segment for better profitability.
Going the creamy way
Over the past decade, significant transformation took place in the Indian demographic space
which led to heightened consumer interest in VADPs. This shift in the dynamics of the
industry proved beneficial for the manufacturers since margins in VADPs are more than
double the margins in the liquid milk segment. The profitability in liquid milk space ranges
from 4-5%, whereas the profitability in VADPs ranges from12% to 18%, attracting private
participation in the industry.
As per the industry estimates, the share of VADP in the milk and milk derivatives segment is
growing currently at around 25% every year and is expected to grow at the same rate until
2019-20.
Product innovations are likely to accelerate India’s dairy market which is anticipated to
improve industry margins by attaining greater scale, higher capacity use and an increasing
contribution from new milk variants. Further, the development of processing and packaging
technology along with improvement in retail and cold storage infrastructure has increased the
shelf life of dairy products.
The growth trajectory
As per NDDB, the Indian dairy industry is all set to experience high growth rates in the next
eight years with demand likely to reach 200 million tonnes by 2022 from 132 million tonnes
in 2013. Presently, only 20% of the milk production comes from the organized sector
comprising co-operatives and private dairies. The paramount factors driving the growth in the
dairy sector include rising disposable incomes, advent of nuclear families and fast/instant
food gaining ground in India. Other factors such as structural changes in food habits,
expansion of fast food chains and popularity of pizzas and pastas aided the usage of milk
variants of mozzarella cheese, processed cheese and flavored milk etc.
Increasing participation from the private sector
Consumer preference towards VADPs is taking forward the dairy sector. Besides brown-
field/ green-field expansion, global dairy companies too are venturing into milk derivatives
business in this part of the world.
The most recent one is the 100% acquisition of Tirumala Milk Products Pvt Ltd by Groupe
Lactalis SA, France, one of the largest dairy players in the world. Another French dairy major
Danone has also increased its presence in the Indian dairy sector with slew of product
launches such as flavored curd, yoghurt etc.
Other investments include Nestle India’s acquisition of 26% stake in Indocon Agro and
Allied Activities Pvt Ltd and Hatsun Agro Products Ltd acquiring 100% stake in Jyothi Dairy
Pvt Ltd. Companies such as Parag Milk Foods Pvt Ltd, Prabhat Dairy Pvt Ltd have
augmented their capacities in the recent past to meet the increased demand of milk products.
Drawing investors’ attention
India consumption story and diversification by dairy players into VADPs are drawing
interests of investors which have led to surge in the PE deals.
The prominent deals include investment by IDFC and Motilal Oswal in Parag Milk Food Pvt
Ltd, Rabobank group and India Agribusiness Fund in Prabhat Dairy Pvt Ltd, IFC into
Modern Dairies Ltd and Blackriver Investment in Dolda Dairy Ltd.
In one of the most recent investments, Fidelity Growth Partners, India, along with
participation of the existing social venture investor, Aavishkaar, have invested in Odisha-
based Milk Mantra Dairy Pvt Ltd. Recent deals in the sector are the indication that the
investors perceive value in the deals and see growth prospects in the Indian dairy space.
Right product mix likely to have a positive impact on the credit profile of dairy companies
Traditionally, the credit risk profile of dairy companies was characterized by low profitability
and moderate liquidity. The dairy companies rated by CARE are largely in the BBB or BB
category (refer the graph below) primarily on account of moderate solvency profile.
However, Mother Dairy Fruit And Vegetable Private Ltd, Co-operatives associated with
Gujarat Cooperative Milk Marketing Federation and some private dairies are in the ‘AA’ and
‘A’ rating category on account of their superior procurement and marketing channels and
high share of VADPs in product portfolio. During FY14, the credit profile of CARE rated
dairy companies have broadly remained stable.
As on June 30th, 15
The entities with the right product mix of liquid milk and VADPs are expected to have better
profitability and solvency parameters. Consequently, there is a high possibility of
improvement in the credit profiles of such companies given the robust milk procurement and
distribution system.
COMPANY PROFILE
Tirumala Milk Products Pvt Ltd is a professionally managed company engaged in the
manufacture of wide range of dairy products.
stablished in 1998, Tirumala Milk Products (P) Ltd. Is one of the fastest growing
private sector enterprises in India E with a team of dedicated professionals? The company has
one of the most modern and versatile plants in the Indian daily industry with state of the art
technology.
Tirumala Milk Products Pvt Ltd. Products meet stringent quality of the market for
dairy products. Tirumala Milk Products Pvt Ltd. Is presently implementing an expansion
programmed and proposes to launch now products in the near feature.
Presently Tirumala market is present in Andhra Pradesh, Karnataka, and Tamilnadu.

The company handles 7 lack liters of milk per day in the packing stations and dairy plant.
This is the single largest plant in the state of Andhra Pradesh.
Companies registered office is located at Narasaraopet, Gudur District and corporate

Office is located at Ameerpet, Hyderabad.
Tirumala Milk Products (P) Ltd sells a rich varied offering of nutritious, tasty and
healthy food products under well known brand. Taste, health convenience reliability for
consumers are key characteristics. Milk comes from cattle herd that receive the best care
along with healthy and notorious diet in the form of quality feed to ensure that they produce
wholesome, high quality milk.
The major contributors to the success of Tirumala Milk Products (P) Ltd are
» Milk procurement network.
» Superior sales and marketing process.
» Strategic, technological and infrastructural advantages.
» Efficient human investment
The company has the advantages of procurement of quality buffalo and cow milk
through a strong network of chilling centers spread across states of Andhra Pradesh,
Tamilnadu, and Karnataka, strong roods in local markets and first had knowledge of the local
culture business intelligence and technical expertise that is applied to serve our consumers.
The market of milk industry in India:
A beginning in organized milk heading was made in India with in India with the
establishment of the “military dairy forms” (oldest is Allahabad, 1989), the salient features of
the market of milk industry so far have been
 Handing of milk in co-operative milk union (oldest “Allahabad” 1913) established all
over the country on a small scale in the early stages.
 Long distance of refrigerator rail transport of milk from Amul to Mumbai since 1955.
 Pasteurization and bulling on a large scale for organized distribution on a large scale
for organized distribution was started
asarray(1950)world(1961),Calcutta(haringhattor7959),Delhi(1959), Chennai(1965)etc.
 Establishment of milk plant under the 5 year plant for dairy development all over India
these were taken up with the dual object of increasing the national level of milk
consumption and ensuring better return to the primary milk producer their maim was
to produce mare better and cheaper milk.
Actual expenditure of the milk industry in India’s first three cove year plans
Table-I:
Plan period Expenditure
Five year plan(1957-55) Rs7.8crores
Five year plan(1956-61) Rs.12crores
Five year plan(1961-66) Rs.36.6crores
Natural of the business (manufacturing and service):
Tirumala Milk products (P) Ltd is a milk refinery industry situated at Pasupatturu
(Vill), Palamaner. Its operation is restricted to Bangalore, Kolar and Chittoor dist.
The business work under a team of dedicated professionals set up where the raw milk
procured at village level and processed in respective district dairies and the produced is sold
to the metropolitan market.
It is service oriented it’s mainly of concerned with production of milk and milk
products such as ghee, butter milk etc.
Vision:
A vision reflects management’s aspirations for the organization and its business, providing
panoramic view of “where we are going” and giving specific about its future business plans.
It spells out long term business purpose and moulds organizational identity.
Vision of Tirumala Milk Products (P) Ltd:
“To produce and supply superior quality products with exceptional customer service
to eventually grow as market leader in dairy industry”.
Mission:
A mission is an enduring statement of purpose that distinguishes one business from

other similar firms. A mission statement identifies the scope of firms operations in product an
market terms.
Mission of Tirumala Milk Products (P) Ltd:
Vision of Tirumala Milk Products (P) Ltd. Will constantly strive to market quality
products at competitive prices provide value to the business partners, all the while delivering
exceptional customers services with the highest regard for business ethics.
Safety Measures Followed By the Company:
Ensuring the safety of daily foods is a responsibility of the dairy industry, dairy
farmers and dairy professors. Milk and other dairy products are among the safest and most
highly regulated foods in the world.
The company has established a various and far-reaching food safety program that
ensures that the milk and dairy products you and your family enjoy remain pure and
wholesome.
The company has well maintained laboratories in all plants. Technically qualified
staff tests the milk and milk products. Quality assurance programs are implemented at every
stage to ensure quality of milk and milk products
Commitments of Tirumala Milk Products (P) Ltd:
 To serve one customers with better products and higher quality services than is available
from any other dairy company at present.
 To continue the tradition as a trusted dairy by managing sustainable. Profitable and

environmental practices both within the company and our community.
 To achieve longevity by adapting to our customers changing needs and market trends.
 To invest in the abilities opportunities. And team work of the employees thus igniting
passion, commitment, and success.
 To produce products of international quality with acceptance from overseas clientele.

Activities of Tirumala Milk Products (P) Ltd:
 Procurement of milk and payment of fair price to producers and societies.
 To encourage farmer by providing veterinary service and supply of green fodder.
 Supply of artificial insemination to procedure for good quality of milk
 Conduct vaccination programs to cattle for all the milk supply farmers.
 Provide first aid and medical facilities with n the factory for the employees and also to the
producers for their cattle. They send doctors to check the cattle.
 Supply the good quality cattle food to the producers to the milk.
 Giving financial assistance to the farmers for their requirements.
Competitor’s Information:
The There are 125 competitors from private and government factors. main are
A) Nandini
B) Heritage
C) KCA
D) Shruthi
E) Swastic
F) Gold fiefs
G) Dairy pulse &Arogya etc…
Facility:
 Transportation
 Canteen
 Telephone
 Hospital
Certificates and awards:
In recognition of its efforts and achievement sin the dairy foods industry and in
acknowledgement of all the challenges surmounted. Tirumala Milk Products (P) Ltd has won
many awards and certificates.
More enduring than any public recognition for the company’s contribution is the
satisfaction that the company enjoys by creation a superior product and giving back to the
communities
Tirumala Milk Products (P) Ltd. Is an ISO 9001:2000 certified company. The dairy is
following quality management system and food safety standards.
SWOT ANALYSIS:
SWOT analysis is a tool for auditing an organization and its environment. It is the
first stage of planning and helps marketers to focus on key issues.
SWOT stands for Strengths, weaknesses, Opportunities, and Threats. Strengths and
weaknesses are internal factor. Opportunities and a threats are external factors, with a little
thought, it can help you un-cover opportunities that you are well placed to take advantage of.
And by understanding the weaknesses of your business, you manage and eliminate
threats that would otherwise catch you unawares.
A word of caution, SWOT analysis can be very subjective. Do not rely on SWOT too
much.
STRENGTHS:
Milk and milk products are available at a competitive prices
Ability to maintain uniform quality.

Timely delivery
New technology implemented for production of milk.
Tirumala Milk Products (P) Ltd has very good infrastructure and nature around the
factory.
T.M.P (P) Ltd attends to the complaints of consumers immediately.
Tirumala Milk Products (P) Ltd pays the highest price for the milk collected from farmers
in India and loyalty among customers for the brand.
Raw milk handling needs is up grade in terms of psycho-chemical and micro biological
attributes of the milk collected. The use of clarification and bactofugation in raw milk
processing has improved the quality of the milk products.
It is certified by ISO 9001:2000 certified company.
Durability of products are ranging from 2 to 4 days
WEAKNESS:
High overheads.
Lack of proper advertisement
Weather problems
Leakages
OPPORTUNITIES:
The computer monitories the utilization of utilities such as water, electricity, steam etc
hence, it is possible to adopt efficient cost control measures to attain cost competitiveness.
Product diversification
Market share expansion.
Favorable changes in consumer’s behavior.

Un-aware of the Tirumala brand, therefore the company can undertake aggressive
advertisement.
Cost consumer market and untapped demand for new Tirumala products like Tirumala
FCM, ice-cream and sterilized flavored milk.
THREATS:
Competition from private and government dairy companies.
Un-awareness about the various products of Tirumala among the people.
The competitors are coming with cheap milk products.
Rural population does not have adequate information about Tirumala brand.
Sometimes packaging creates confusion among consumers.
There are 32 competitors to Tirumala products among them the main competitors are
Nandini, Heritage, Arogya, and Swastik.
Structure of the organization:
The organization consists of board of directors at the apex under which the factory
manager other managers work.
The top level management consists following.
1. Managing Director
2. General Manager
A. Asst. Production Manager
B. Quality Controller
C. Administration Manager
D. Manager for Accounts

The middle level management, which assists the top level management is their work,
is as follows:
1. Manager for purchases and manager for sales and distribution to assist manager
for commercials.
2. There is administration manager and manager for stores to assist manager for
utilities.
3. Statistical quality control department and technical supervisors are there to help
technical manager.
4. The manager for finance is assisted by chief accountants and others.

PRESENT BOARD OF DIRECTORS
S.NO: NAMES DESIGNATION
1 Sri D.Brahmanandam Managing Director
2 Sri B.NageswaraRao Director
3 DrN.VenkataRao Director
4 Sri B.Brahma Naidu Director
5 Sri A. Suresh General Manager
6 Sri Purushotham Finance Manager
ORGANIZATION STRUCUTRE
PRODUCT PROFILE
The main plant has modern equipment’s to manufacture milk products like Butter, ghee
and milk powder.
Butter is made from pure Cow and Buffalo fat under hygienically processed through
continuous butter making machine with a capacity of 8 tons per day. Ghee is making from
pure cow and buffalo butter for under supervision of 30 years experienced dairy.
Technologists to retain granulation, color and aroma of ghee with a capacity of tones per
day.
Milk powder is making from fresh cow and buffalo milk and the plant is capable of
producing all types of milk powders with capacity of 15 tons per day.
PRODUCTS
TIRUMALA MILK PRODUCTS (P) LTD. covers the entire spectrum of dairy products
sold in markets. The complete ranges of TIRUMALA MILK PRODUCTS (P) LTD. are
highly nutritious, healthy and bring you a world of goodness.
TIRUMALA MILK PRODUCTS (P) LTD. pasteurizes and packages all fresh dairy
products in technologically superior and hygienic conditions to ensure pure natural freshness.
TIRUMALA MILK PRODUCTS (P) LTD., Handles 6.5 Lakhs Liters of Milk per day in
all their packing Stations and main dairy plant which is the highest in the state of Andhra
Pradesh.
TIRUMALA MILK PRODUCTS (P) LTD. handles milk in the following locations:
PLACING LOCATIONS HANDLING CAPACITY PER DAY

Gudur 4.0 Lakh Litres
Vellala Cheruvu 2.0 Lakh Litres
Bhimadolu 1.0 Lakh Litres
Palamaner 2.0 Lakh Litres
Gungal 4.0 Lakh Liters
PROCUREMENT OF MILK
TIRUMALA MILK PRODUCTS (P) LTD. established 25 Chilling centers in Andhra

Pradesh and 8 chilling centers in Tamilnadu to procure both Cow & Buffalo milk. Best
quality milk is procured and chilled at chilling centers, to retain freshness of milk. The
strength of the TIRUMALA MILK PRODUCTS (P) LTD. is to procure more than 6.0 lakh
liters of milk directly from agents/farmers using state-of-the-art machinery and professionally
trained staff.
PRODUCTION
 TIRUMALA MILK PRODUCTS (P) LTD. has its main dairy plant at Kadivedu with
handling capacity of 4.0 lakhs liters of milk per day from various chilling centers and
local units.
 Main plant processes 3.0 Lakhs liters of milk per day in automatic sachet filling
machines for supply and distribution to Chennai, Tirupati, Nellore, etc… in insulated
puffs.
 There is continuous growth in sale of milk from 50000 liters to 350000 liters with in a
span of one-decade.
 TIRUMALA MILK PRODUCTS (P) LTD. has its own supply chain management,
which is the key to timely distribution.
 At our Palamaner unit processes and supplies 1.00 lakh liters of milk and 20000 liters
of curd to Bangalore city.
 Our Vellalacheruvu & Bhimadolu packing stations processes and supplies 2.0 lakh
liters of milk to Hyderabad, Warangal, Vijayawada. Elure, Guntur and Rajahmundry.
 Our Wadiyaram plant has capacity of 50000 Liters milk to cater to the markets of
Medak, Nizamabad, Adilabad and Karim Nagar Districts of A.P
PRODUCTS
 The Main Plant has modern equipment’s to manufacture milk products like Butter,
Ghee and Milk Powder.
 Butter is made from pure cow & buffalo fat under hygienically processed through
continues butter making machine with a capacity of 8 tons per day.
 Ghee is made from pure cow & buffalo butter under supervision of 30 years
experienced dairy technologists to retain granulation, color and aroma of ghee with a
capacity of 8 tons per day.
 Milk powder is made from fresh cow & buffalo milk and the plant is capable of
producing all type of milk powders with a capacity of 15 tons per day.
 By-Products like Sterilized Flavoured Milk, Lassie, Khova, Milk Cake, Mysore pak,
Paneer.
 Ice creams
PRODUCT PORTFOLIO
We are amongst the leading manufacturers, suppliers, wholesalers and traders of Dairy
Products. These products are processed under the constant surveillance of our team of experts
that uses premium quality buffalo and cow milk. Our products can be availed at market
prices. Following are the products we offer our clients:
CATEGORY PRODUCT RANGE

Milk  Toned milk
 Full cream milk
 Standardized milk
Milk products  Butter milk

 Packet curd& cup card
 Milk powder
 Paneer
 Butter
 Basundi
 Sweets
 Ghee tins
 Flavored milk
Ice cream Tirumala manufacturers 80 variants of ice

creams which include Vanilla, Strawberry,
Butterscotch, Chocolate, Choco bar, candies,
Casattas, Matka kulfi etc., to mention a few.
The salient features of these products are as follows:
Super nutritional value

No adulteration & Mouth watering taste
Long shelf life & pure and non-toxic
PRODUCT LIST
FLAVORED MILK
GHEE TINS
SWEETS
BASUNDI
BUTTER
GHEE PACK
PANEER
MILK POWDER
CURD
BUTTER MILK
CHOCO BAR
CHOCOLATE CUP
CANDY
MILK
KULFI
Need of the study

 To help to understand the changes in assets and which are not evident financial
statements or in the income statement.
 To inform on that 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
SCOPE OF THE STUDY
This study refers to only individual enterprise i.e., Tirumala Milk Product (P) Ltd. In
fact, an examination of all components of Current Assets will enable to assess the efficiency
of working capital management as all these components are interrelated.
This study is on Funds Flow position in the company. It is based on schedule of

changes in working capital and funds flow statement:
(1) Schedule of changes in Working capital and
(2) Funds Flow statement.
The scope of two statements is given below:-
(1) Schedule of changes in working capital:
This statement is prepared with Current Liabilities as appearing in the balance sheet
of the Company.
(2) Funds flow statement:
This statement is also prepared with sources of funds & application of funds as
appearing in the balance sheet of the company.
OBJECTIVES OF THE STUDY
• To study the fund flow operations in tirumala milk products(p) ltd.
• To analyse the changes in amount of working capital of the company.
• To identify sources and application of funds.
• To find out the operating efficiency of the organization.

RESEARCH METHODOLOGY
Source of data
The data should be collected through both primary & secondary data.
Primary data would be collected with help of structured questionnaire which would
be given to 100 employees working in M/s Tirumala Milk products ( P ) ltd. Palamaner,
Secondary data would be collected from the book published, articles and through electronic
media.
Sample size
All the 100 employees will be considered as respondents for the study.
Survey design
The survey is based on primary source of data. Three methods of primary data are
selected to conduct the study that is., the questionnaire method, observation method and the
personal interview method. Since the statement in the questioners are schedule were
quantified on a five point scale using like type technique.
 Strongly agree
 Agree
 Average
 Disagree
 Strongly disagree
Methods of sampling
There are many sample methods to collect data. The sampling method used is simple,
random sampling.
Simple random sampling:

According to this method the sample is collected randomly for example taking every
tenth house in a street or taking every fifth employee in the universe is simple random
sampling.
Sources of data
The data has been collected from both primary and secondary sources for the research
work.
Primary data
Questionnaire is used as tool for primary data collection. The assistant general manager
serves as a source of primary data for the research work.
In primary data collection, I followed two methods.
Interview method:
This method comes under primary data. This method involves presentation of oral-
verbal stimuli and reply in terms of oral-verbal responses. This method includes personal
interviews, which are useful in collecting data by asking questions in face-to-face contact to
other person.
Questionnaire Method:
This is also comes under primary data. In this method a questionnaire is sent to the
persons or employees concerned with a request to answer the questions and return the
questionnaire. A questionnaire consists of no. of questions printed or typed in a definite
order. The respondents have to answer the questions on their own.
Questionnaire Design
A structured direct questionnaire has been used to obtain information from workers.
Questionnaire is constructed so that the object is deal to the respondent (non –

disguised) or they can construct so as to disguise the objective. As far as the questionnaire for
this study is concerned this includes direct and structured questionnaire.
1. Open – ended questions:
An open ended question gives the respondent complete freedom to decide the form length
and decide of the form.
2. Closed – end questions:
It contains
a. Dichotomous Questions:
The dichotomous questions has only two answers in the form of “Yes” or “No”,
“True” or “false” etc...
b. Multiple – choice questions:
In the case of multiple-choice question the respondents is offered or more choices. The
personal researchers have exhausted all he possible choice and respondent has to indicate
which one is applicable in the following cases.
Secondary Data:
Secondary data work collected from journals training manual of M/s Tirumala Milk
Products (P) Ltd. and through internet.
Secondary data may either be published or unpublished data. Published data are
available in various publications of the company. This is also collected from the various
books, magazines and newspapers. The sources of the unpublished data are mainly like
diaries, letters, and unpublished biographies and also may be available with scholars and
research workers, trade associations, lab our bureaus and public/private individuals and
organizations.
As compared to secondary data the primary data is factual.
Selection of the Study:
The general manager suggested going for the study on “performance appraisal” in
Tirumala Milk Products [p] Ltd.
Preparation:
In the light of objectives a schedule is basis on the various attitudinal dimensions.
Data Collection:
Investigator followed schedule and the questionnaire method through direct interview to
accumulate data.
Statistical Technique Used:
Percentage analysis method.
Limitations of the study:
1) Study is limited only to M/s Tirumala Milk Products (P) Ltd., Palamaner.
2) The reluctance of the respondents to reveal the personal information has acted as a
limitation factor.
3) The time factor was also as a constraint in gathering data completion of the project.
Plan of the study
The present study entitled “A study on Performance appraisal” with special reference
to Tirumala Milk Products (P) Ltd.
It is classified into following chapters.
CHAPTER-1
COMPANY PROFILE
Introducing of the organization, various, branches of the business. Board of directors,

organization structure competitors’ products and services.
CHAPTER-2
INTRODUCTION
 Meaning
 Definition
 Causes
 Evils
 Measures
It gives an insight o the introduction of the study, importance of performance

appraisal, causes its effects on productivity, evils, performance appraisal policies, measures
to check performance appraisal.
CHAPTER – 3
It provides through study on the subject, statement of problem, scope, objective, study
research methodology, limitations and plan of the study.
CHAPTER – 4
ANALYSIS AND INTERPRETATION
Portrays the collected data being tabulated and analyzed through appropriated
statistical tools and techniques. To draw influences and suggestions.
CHAPTER -5
FINDINGS, SUGGESTIONS AND CONCLUSION
It provides the overview knowledge on the outcomes of the study and conclusion and
on the facts.
ANNEXURE
BIBLIOGRAPHY
LIMITATIONS OF THE STUDY
Limitations of funds Flow Analysis:

 It is essentially historic in nature and projected funds flow statement cannot be

prepared with much accuracy.
 It cannot be reveal continues changes.
 It is not an original statement but simply it is arrangement of data given in the
financial statements.
 The data was collected and analysis only for five years which might be too small a
base to draw accurate conclusions.
 The study is limited only from the financial statements provided by the company to
me.
 Much of literatures regarding the financial activities have not been gathered, because
the company is not ready to disclose its financial secrets. Hence, my study is bound
within these limiting factors
CHAPTER REVIEW
Chapter 1: It indicates to Review of Literature
Chapter 2: It indicates to Profiles
Industry Profile
Company profile
Chapter 3: It indicates to Design of the Study
Need for the Study
Objectives of the Study
Scope of the Study
Research Methodology
Limitations of the Study
Chapter 4: It indicates to Data Analysis & Interpretations
Chapter 5: It indicates to Findings & Suggestions
Chapter 6: It indicates to Conclusion, Bibliography

DATA ANALYSIS AND INTERPRETATION

TABLE 1: STATEMENT OF CHANGES IN WORKING CAPITAL 2011-2012
Particulars 31/3/2011 31/3/2012 Changes in
. . working capital
Increase Decrease
. .
Current Assts
Inventory 5,57,62,138 9,18,21,066 3,60,58,928
Sundry debtors 64,96,711 34,54,410 30,42,301
Cash and bank 36,48,490 45,84,931 9,36,441
Deposits 1,21,11,184 3,27,82,471 2,06,71,287
Loans and advances 96,16,257 1,66,09,002 69,92,745
and prepaid expenses
Total Current 8,76,34,780 14,92,51,880
Assets (a)
Current liabilities
and Provisions
Current liabilities 2,90,82,760 3,69,79,282 78,96,522
Provisions 40,58,402 45,58,958 5,00,556
Total current 3,31,41,162 4,15,38,240

liabilities (b)
Working Capital (a- 5,44,93,618 10,77,13,640
b)
Net Increase 5,32,20,022 5,32,20,022
/decrease working
capital
Total 10,77,13,640 10,77,13,640 6,46,59,401 6,46,59,401
Interpretation:
It is clear from the above table that the current Assets of the company have increased
from Rs87,63,780 in 2011 to Rs14,92,51,880 in 2012 the Current Liabilities of the company
are showing increasing trend it is recorded as Rs.3,31,41,162 in 2011 and increases to
Rs4,15,38,240 in 2012 there is increased in working capital of Rs.5,32,20,022.
TABLE1.1
SHOWS FUNDS FLOW STATEMENT OF 2011-2012
Sources Rs. Applications Rs.
ssssShare Capital 1,00,00,000 Purchase of fixed asset 2,41,62,192

working capital 18,05,521 Purchase of Investment 20,00,000
Secured Loans 4,70,37,316 Increase in working 5,32,20,022
capital
Funds from operation 2,05,39,377
7,93,82,214 7,93,82,214
Interpretation:
It is event from above table that the table Funds Flow during the period from 2011-
2012 Rs. 7,93,82,214. In this 2011-2012 organization purchased a fixed asset of Rs.
2,41,62,192 and funds from operations are Rs.2,05,39,377
. . working capital
Increase Decrease
. .
Current Assts
Inventory 9,18,21,066 10,90,75,147 1,72,54,081
Sundry debtors 34,54,410 63,58,113 29,03,703
Cash and bank 45,84,931 43,21,650 2,63,281
Deposits 3,27,82,471 2,63,67,433 6,415,038
Loans and advances and 1,66,09,002 2,53,67,448 87,58,446
prepaid expenses
Total Current assets (a) 14,92,51,880 17,14,89,791
Current liabilities and

Provisions
Current liabilities 3,69,79,282 4,32,92,220 63,12,938
Provisions 45,58,958 70,87,149 25,28,191
Total current liabilities (b) 4,15,38,240 5,03,79,369
Working Capital (a-b) 10,77,13,640 12,11,10,422
Net Increase / decrease 1,33,96,782 1,33,96,782

working capital
Total 12,11,10,422 12,11,10,422 2,89,16,230 2,89,16,230
Interpretation:
It is clear from the above table that the current Assets of the company have decreased
from Rs14,92,51,880 in 2012 to Rs17,14,89,791 in 2013 the current Liabilities of the
company are showing increasing trend it is recorded as Rs. 4,15,38,240 in 2012 and
increases to Rs5,03,79,369 in 2013 there is increased in working capital of Rs. 1,33,96,782.
TABLE 2.2
Issue of share capital Increase in working 1,33,96,782

capital
Working progress purchase of fixed asset 1,73,79,427
Secured loans 5,69,47,991 purchase of Investment
unsecured loans working progress 3,88,80,437
Funds from operations 1,27,08,655
6,96,56,646 6,96,56,646
Interpretation:
It is from 2012-2013 Rs.6,96,56,646. In this 2012-2013 organization purchased a

fixed asset of Rs. 1,73,79,427 and funds from operations are Rs.12,70,865.event from above
table that the table Funds Flow during the period
. . working capital
Increase Decrease
. .
Current Assts
Inventory 10,90,75,147 10,07,60,856 83,14,291
Sundry debtors 63,58,113 68,44,432 4,86,319
cash and bank 43,21,650 73,47,643 30,25,993
Deposits 2,63,67,433 3,88,38,401 1,24,70,968
Loans and advances and 2,53,67,448 2,22,84,157 30,83,291
prepaid expenses
Total Current assets (a) 17,14,89,791 17,60,75,489

Provisions
Current liabilities 4,32,92,220 6,02,99,284 1,70,07,064
Provisions 70,87,149 83,49,907 12,62,758
Total current liabilities (b) 5,03,79,369 6,86,49,191
Net Increase / decrease 1,3684,124 1,36,84,124

working capital
Total 12,11,10,422 12,11,10,422 29,667,404 2,96,67,404
Interpretation:
It is clear from the above table that the current Assets of the company have minor
increased from Rs.17,14,89,791 in 2013 to Rs.17,60,75,489 in 2014 the current Liabilities of
the company are showing increase trend it is recorded as Rs.5,03,79,369 in 2013 and
increases to Rs.6,86,49,191 in 2014 there is decreased in working capital of Rs.1,36,84,124
TABLE.3.1

Issue of Share Capital Purchase of fixed asset 6,52,28,504
Working capital 3,42,98,695 Purchase of Investment
Secured Loans 14,73,735
Decrease in working capital 1,36,84,124
Funds from operation 1,57,71,950
6,52,28,504 6,52,28,504
Interpretation:
2014 Rs.6,52,28,504. Organization purchased a fixed asset.
. . working capital
Increase Decrease
. .
Current assts
Inventory 10,07,60,856 25,89,35,801 15,81,74,945
Sundry debtors 68,44,432 2,36,66,599 1,68,22,167
cash and bank 73,47,643 69,90,208 3,57,435
Deposits 3,88,38,401 14,42,73,003 1,05,434,602
Loans and advances and 2,22,84,157 4,80,86,695 2,58,02,538
prepaid expenses
Total Current Assets (a) 17,60,75,489 48,19,52,306

Provisions
Provisions 8349907 19897427 1,15,47,520
Total Current Liabilities 6,86,49,191 17,37,35,231

(b)

working capital
Total 30,82,17,075 30,82,17,075 30,62,34,252 30,62,34,252
Interpretation:
from Rs.17,60,75,489 in 2014 to Rs.48,19,52,306 in 2015 the current Liabilities of the
company are showing decreasing trend it is recorded as 6,86,49,191 in 2014 and decreases to
Rs.17,37,35,231 in 2015 there is increased in working capital of Rs.20,07,90,777.
TABLE 4.1
Share capital 5,89,82,382 Purchase of fixed 11,28,55,781

asset
Secured loans 19,87,47,243 Purchase of 7,20,520
investment
Funds from operation 5,66,90,332 Working capital 52,879
Increase in working 20,07,90,777
capital
31,44,19,957 31,44,19,957
Interpretation:
2015 Rs.31,44,19,957.
TABLE 5:
STATEMENT OF CHANGES IN WORKING CAPITAL 2015-2016
. . working capital
Increase Decrease
. .
Current assts
Inventory 25,89,35,801 27,14,28,799 1,24,92,998
Sundry debtors 2,36,66,599 1,81,13,070 55,53,529
cash and bank 69,90,208 77,87,309 7,97,101
Deposits 14,42,73,003 12,95,69,540 1,47,03,463
Loans and advances and 4,80,86,695 7,23,33,257 2,42,46,562
prepaid expenses
Total Current Assets(a) 48,19,52,306 49,92,31,975

Provisions
Provisions 1,98,97,427 1,84,42,538 14,54,889
Total Current Liabilities (b) 17,37,35,231 20,54,62,123

working capital
Total 30,82,17,075 30,82,17,075 5,34,38,773 5,34,38,773
Interpretation:
from Rs.48,19,52,306 in 2015 to Rs.49,92,31,975 in 2016 the current Liabilities of the
company are showing increasing trend it is recorded as Rs.1,77,35,231 in 2015 and increases
to Rs.20,54,62,123 in 2016 there is decreased in working capital of Rs.1,44,47,223.
TABLE 5.1

Share capital Purchase of fixed asset 6,09,81,402
Decrease in working 1,44,47,223 Working capital in 57,50,246
capital progress
Funds from operation 9,89,94,759 Secured loans 4,66,99,761

Redemption on shares 10,573
11,34,41,982 11,34,41,982
Interpretation:
It is event from above table that the table Funds Flow during the period from
2015-2016 Rs.11,34,41,982.
TYPES OF RATIOS:
Ratios can be grouped into various classes according to financial activity or function
to be evaluated. The parties interested in financial analysis are short & long term creditor.
Owners & Management’s Short-term creditor’s main interest is in the liquidity positions or
the short-term solvency of the firm. Long-term creditors on the other hand are more
interested in the long term solvency and profitability of the firm. Management is interested in
evaluating every aspect of the firm’s performance. They have to protect the interest of all
parties and see that the firm grows profitability. In view of the requirement of the various
users of ratios, the ratios are classified into four important categories.
A. Liquidity ratios
B. Leverage ratios
C. Activity ratios / Turnover ratio
D. Profitability ratio.
1. CURRENT RATIO:
Current ratio, include cash and those assets, which can be converted into cash within a
year, such as marketable securities, debtors and inventories.
Current liabilities include creditors, bills payable, accrued expenses, short term bank
loan, income tax liability and long term debt maturing in current year.
The current ratio is a measure of the firm’s short term solvency. A current ratio of 2
to 1 or more is considered satisfactory. The current ratio represents a margin of safety for
creditors. The higher the current assets are in relation to current liabilities, the more is the
firm’s ability to meet its current obligations.
Firms with less than 2 to 1 current ratio may be doing well, while firms with 2 to 1 or
even higher current ratios may be struggling to meet their obligation. It is a test of quantity,
not quality. The current ratio is a crude and quick measure of the firm’s liquidity.
Current Assets
Current Ratio =
Current liabilities
TABLE – 1:Shows that the calculation of Current Ratio from
2011-2012 to 2015-2016
Current Current
Year Ratio
Assets Liabilities
2011-2012 14,92,51,880 4,15,38,240 3.59
2012-2013 17,14,89,791 5,03,79,369 3.4
2013-2014 17,60,75,489 6,86,49,191 2.57
2014-2015 48,19,52,306 17,37,35,231 2.78
2015-2016 49,92,31,975 20,54,62,123 2.43

Graph – 1 Shows that the Current Ratio from 2011-12 to 2015-16
Current Ratio
4 3.59
3.4
3.5
3 2.78
2.57 2.43
2.5
2
1.5
1
0.5
0 2011-12 2012-13 2013-14 2014-15 2015-16
2010- 2011- 2012- 2013- 2014-
2011 2012 2013 2014 2015
Interpretation:
The current ratio measures the firm’s short – term solvency. The standard norm for
current ratio is 2:1. During the year 2011 -2012 the ratio is 3.59 and it has decreased to 3.4.
During the year 2012-2013. In the year 2013-2014 it decrease and 2014-2015 increased 2.57
& 2.78 and again decreased to 2.43 in the year 2015-2016. However the ratio was
satisfactory.
2. QUICK RATIO:
This ratio establishes a relationship between quick, or liquid, assets and current
liabilities. An asset is liquid if it can be converted into cash immediately reasonably soon
without a loss of value. Chas is the most liquid and included in quick assets are book debts
and marketable securities. Inventories normally require some time for realizing into cash. The
quick ratio is found out by dividing quick assets by current liabilities.
Generally a quick ratio of 1:1 is considered to represent a satisfactory current

financial condition. A company with a high value of quick ratio can suffer from the shortage
of funds it is has slow paying, doubtful and long-duration outstanding book debts. on the
other hands a company with a low Value of quick ratio may really be prospering and paying
its current obligation in time if it has been turning over its inventories efficiently. The quick
ratio remains can important index of the firm’s liquidity.
Liquid Assets
Quick Ratio =
Current liabilities
Liquid Assets = Current Assets – Inventories
TABLE – 2: Shows that the calculation of Quick Ratio from
2011-2012 to 2015-2016
Year Liquid Assets Current Liabilities Ratio
2011-2012 5,74,30,814 4,15,38,240 1.38
2012-2013 6,24,14,644 5,03,79,369 1.24
2013-2014 7,53,14,633 6,86,49,191 1.09
2014-2015 22,30,16,505 17,37,35,231 1.28
2015-2016 22,78,03,176 20,54,62,123 1.11
Graph – 2 Shows that the Quick Ratio from 2011-12 to 2015-16

Quick Ratio
1.6
1.4 1.38
1.24 1.28
1.2 1.09 1.11
1
0.8
0.6
0.4
0.2
0
2011-12 2012-13 2013-14 2014-15 2015-16
Interpretation:
Quick ratio indicates the extent to which you could pay current liabilities without
relying on the safe on inventory. The standard norm for the Quick Ratio is 1:1. The Quick
Ratio is 1.38 in 2011-2012 and decreased to 1.24 in 2012-2013 and again decreased to 1.09 in
2013-2014. In next year it is increased to 1.28 during the year of 2014-2015 and again
decreased to 1.11 in the year of 2015-2016. However, the ratio was above the standard norm
so the ratio was satisfactory.
3. ABSOLUTE LIQUID / CASH RATIO:

It is suggested that it would be useful, for the management if the liquidity measure
also takes into account reserve borrowing power. As the firm’s real debt paying ability
depends not only on cash resources available with it but also on its capacity on its capacity on
borrow from the market at short notice. Absolute liquid assets include cash in hand and at
bank and marketable securities or temporary investments.
This ratio may be expressed as under:
Absolute liquid Assets

Absolute liquid Ratio =
Current liabilities
TABLE-3: shows that the calculation of Absolute Liquid Ratio from
2011-12 to 2015-16
Year Absolute Current Ratio

Liquid Ratio Liabilities
2011-2012 3,27,82,471 4,15,38,240 0.79
2012-2013 2,63,67,433 5,03,79,369 0.52
2013-2014 3,88,38,401 6,86,49,191 0.56
2014-2015 14,42,73,003 17,37,35,231 0.83
2015-2016 12,95,69,540 20,54,62,123 0.63
Graph – 3 Shows that the Liquid Ratio from 2011-12 to 2015-16

Liquid Ratio
0.9
0.83
0.8 0.79
0.7
0.63
0.56
0.6
0.52
0.5
0.4
0.3
0.2
0.1
0
2011-12
2010-2011
2012-13
2011-2012
2013-14
2012-2013
2014-15
2013-2014
2015-16
2014-2015
Interpretation:
Absolute Liquid Ratio is inferred from the above table that cash ratio is continuously
increasing. So the company maintains cash reserves in the same manner in future also. The
Absolute Liquid Ratio is 0.79 in 2011-2012 and decreased to 0.52 in 2012-2013 and again
increased to 0.58 in 2012-2013. In next year it is increased to 0.83 during the year of 2014-
2015 and again decreased to 0.63 in the year of 2015-2016.
4. NET WORKING CAPITAL RATIO:

Working capital of a concern is directly related to sales, the current assets like
debtors, bills receivable, cash stock etc. Change within the increase of decrease in sales.
The working capital is taken as;
Working Capital = Current Assets –Current Liabilities
Working capital Turnover Ratio indicates velocity of the utilization of Net Working capital;
this ratio indicates number of times the working capital is turned over in the course of year.
This ratio measures the efficiency with which capital is being used by a firm.
Net working capital

This Ratio can be calculated as =
Net assets
TABLE – 4 shows that the calculation of Net Working Capital Ratio from
2011-12 to 2015-16
Year Net working Net Assets Ratio

capital
2011-2012 10,77,13,640 18,55,34,457 0.58
2012-2013 12,11,10,422 25,49,55,806 0.48
2013-2014 10,74,26,298 27,23,66,191 0.4
2014-2015 30,82,17,075 58,67,07,261 0.53
2015-2016 29,37,69,852 63,89,95,492 0.46

Graph – 4 Shows that the Net Working Capital Ratio from 2011-12 to 2015-16
Net Working Capital Ratio

0.7
0.58
0.6
0.53
0.48 0.46
0.5
0.4
0.4
0.3
0.2
0.1
0
2011-12 2012-13 2013-14 2014-15 2015-16
2010-2011 2011-2012 2012-2013 2013-2014 2014-2015
Interpretation:
Net working capital measures the firms potential reservoir of funds it can be related
net assets and the ratio is 0.58 in 2011-2012 and it is decreased to 0.48 & 0.40 in 2012-2013
and 2013-2014. And gradually it is increased to 0.53& 0.46 during the years of 2014-2015
and 2015-2016.
FINDINGS
 The working capital in 2011-2012 has increase by Rs.53,22,022. This was due to
increase in Inventories, Cash & Bank, Deposits, and Loans & Advance and prepaid
expenses.
 In the year 2011-2012 Funds inflow is increased due to issue of capital, working in
progress, secured loans and funds from operations. The outflow of funds is purchases
of fixed assets, purchases of Investment, and Increase in working capital.
 The working capital in 2012-2013 has increase by Rs.1,33,96,789 to compare

Rs.53,22,022 in previous year. This was due to increase in Current Assets that is
Inventories, Deposits, and Loans & Advance and prepaid expenses.
 In the year 2012-2013 Funds inflow are Secured loan and funds from operations,
funds outflow are increase in working capital, purchases of fixed assets, and working
in progress.
 The Working capital in 2013-2014 has decrease by Rs.1,36,81,424. This was due to
increase in Current Assets that is Cash & Bank, Deposits, and Debtors. Other
decrease Inventories, Loans and Advance and prepaid expenses.
 In the year 2013-2014 Funds inflow are working progress, secured loans, decease in
working capital and funds from operation. Outflow of funds are purchase of fixed
assets.
 The Working Capital in 2014-2015 has increase by Rs.20,07,90,777. This was due to
increase to Inventory, Sundry Debtors, and Loans & Advances and Prepaid expenses.
 In the year 2014-2015 funds inflow are issue of capital, secured loans and funds from
operations. The outflow of funds is purchase of fixed assets, purchase of investment,
working progress, and increase in working capital.
 The Working Capital in 2015-2016 has decrease by Rs.1,44,47,223. This was due to
decrease in Sundry Debtors, Deposits, Current Liabilities and Provision.
 In the year 2015-2016 funds inflow are decease in working capital and funds from
operation. Funds outflow is purchase of fixed asset, working capital progress, and
secured loans.
SUGGESTIONS
 The current liabilities are on increasing trend, so researchers suggested that to control
the increasing of current liabilities and increasing the current assets for better future
activities of the firm. Does not increase in the same proportion in future.
 The standard current ratio is 2:1. The company’s current ratio is above the standard it
is suggested that the company maintain its current ratio standard norm for better
development of financial sources in future.
 The current assets have increased tremendously, therefore, the researchers advised to
reduce the current assets, if too much is invested on current assets there will be
blockage of funds which could otherwise be utilized for some productive purpose.
 The firm should establish optimum capital structure.
 The company has idle cash balance which may reduce the profitability of the
company. It was suggested that may invest such idle cash in marketable securities.
 Steps should be initiated in order to cut down the expenses of the company which are
found to affect profitability of the company.
 Efficient of assets utilizations for revenue generation is suggested.
 Efforts should be made to improve sales level so as to increase funds from operation.
CONCLUSION
The funds flow statement is a statement, which shows the movement of funds and is a
report to the 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 were
employed.
ANNEXURE
BALANCE SHEET OF TIRUMALA MILK PRODUCT (P) LTD 2011-2012.
2011 2012
I) Sources of Funds
1) Shareholder's Funds
a) Share Capital 1,30,50,000 2,30,50,000
b) Reserves & Surplus 23569934 3,61,05,831
a) Secured Loans 7,93,40,910 1,263,78,626
h) Unsecured Loans
Total 11,59,60,844 18,55,34,457
II) Application of funds
1) Fixed Assets
a) Gross Block 7,11,35,061 11,13,86,856
b) Less: Depreciation 2,50,48,428 4,11,38,031
Net Block 4,60,86,633 7,02,48,825
Capital Work in Progress 66,76,916 48,71,395
Total 5,27,63,549 7,51,20,220
2)Investment 6,10,000 26,10,000
3) Current Assets, Loans and Advances.
a) Inventories 5,57,62,138 9,18,21,066

b) Sundry Debtors 64,96,711 34,54,410
c)Deposits 36,48,490 45,84,931
d) Cash & Bank Balances 1,21,11,184 3,27,82,471
e) Loans and Advances 96,16,257 1,66,09,002
Total 8,76,34,780 14,92,51,880
Less: Current Liabilities & Provisions
a) Current Liabilities 2,90,82,760 3,69,79,282

b) Provisions 40,58,402 45,58,958
total current liabilities 3,31,41,162 4,15,38,240
Net Current Assets 5,44,93,618 10,77,13,640
4) Miscellaneous expenditure (to the extent not written 80,93,677 90,597
off or adjust)
Total 11,59,60,844 18,55,34,457

BALANCE SHEET OF TIRUMALA MILK PRODUCT (P) LTD 2013-2014
2013 2014
I) Sources of Funds
a) Share Capital 2,30,50,000 2,30,50,000
b) Reserves & Surplus 4,85,79,189 6,45,15,839
a) Secured Loans 18,33,26,617 18,48,00,352
h) Unsecured Loans
Total 25,49,55,806 27,23,66,191
1) Fixed Assets
a) Gross Block 14,84,67,660 2,43,4,55,584
Net Block 8,76,28,252 15,28,56,756
Capital Work in Progress 4,37,51,832 94,53,137
Total 13,13,80,084 16,23,09,893
2)Investment 26,10,000 26,10,000
a) Inventories 10,90,75,147 10,07,60,856
b) Sundry Debtors 63,58,113 68,44,432
c)Deposits 43,21,650 73,47,643
e) Loans and Advances 2,53,67,448 2,22,84,157
Total 17,14,89,791 17,60,75,489

b) Provisions 70,87,149 83,49,907
Net Current Assets 121110422 10,74,26,298
4) Miscellaneous expenditure (to the extent not -1,44,700
written off or adjust)
Total 25,49,55,806 27,23,66,191
BALANCE SHEET OF TIRUMALA MILK PRODUCT (P) LTD 2015-2016

2015 2016
I) Sources of Funds
a) Share Capital 8,20,32,382 8,20,21,809
b) Reserves & Surplus 12,11,27,284 22,01,25,849
a) Secured Loans 38,35,47,595 33,68,47,834
h) Unsecured Loans
Total 58,67,07,261 63,89,95,492
1) Fixed Assets
a) Gross Block 44,06,27,226 55,42,83,910
Net Block 26,57,11,937 32,66,93,339
Capital Work in Progress 94,00,258 1,51,47,071
Total 27,51,12,195 34,18,40,410
2)Investment 33,30,520 33,33,953
a) Inventories 25,89,35,801 27,14,28,799
b) Sundry Debtors 2,36,66,599 1,81,13,070
c)Deposits 69,90,208 77,87,309
e) Loans and Advances 4,80,86,695 7,23,33,257
Total 48,19,52,306 49,92,31,975

b) Provisions 1,98,97,427 1,84,42,538
Net Current Assets 30,82,17,075 29,37,69,852
4) Miscellaneous expenditure (to the extent not 47,471 51,277
written off or adjust)
Total 58,67,07,261 63,89,95,492
BIBLIOGRAPHY
REFERENCE:
 I.M.PANDEY, financial management Vikas publishing house ltd, New Delhi1995, 9th
Edition.
 M.Y.KHAN& P.K.JAIN , financial management ,Tata McGraw-hill publishing &co,
ltd, New Delhi,5th Edition.
 PRASANNA CHANDRA, financial management ,Tata McGraw-hill publishing &co,
ltd, New Delhi,7th Edition.
WEB SITE:
http://www.tirumalamilkproducts.com/about.html
http://www.dsir.gov.in/reports/ittp_tedo/agro/AF_Animals_Milk_Dairy_Intro.pdf
http://www.managementparadise.com/mba-projects-download.php
http://www.privco.com/private-company/tirumala-milk-products-p-ltd

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Funds flow statement

A Project report on funds flow statement of Tirumala Milk pvt. Ltd

BACHELORS OF COMMERCE (COMPUTER APPLICATIONS)

SRI VENKATESWARA UNIVERSITY

Under the esteemed guidance of

SRI SRINIVASA DEGREE COLLEGE

statement of Tirumala pvt. Ltd ” , is an original and independent work submitted by us

Head, Computers, SSDC

SNO TOPIC PGNO

2 REVIEW OF LITERATURE 10-18

6 SCOPE AND OBJECTIVES OF THE STUDY 42-43

7 RESEARCH METHODOLOGY 44-47

The subject of financial management is of immense interest to both

MEANING OF FINANCIAL MANAGEMENT

1. Financial management is concerned with the efficient use of important economic

3. "A statement of sources and Application of Funds is a technical device designed to

indicate clearly the requirement of funds.

 Short _ term or current assets:

Financial function is a second important function to be performed by the financial

1. An illustrates this as follows.

The movement of funds has two aspects:

SALE OF FIXED ASSETS:

LONG TERM BORROWINGS:

FUNDS FROM OPERATIONS:

PURCHASES OF FIXED ASSETS:

Significance of Funds Flow Statement:

1. Useful in decision making.

Depreciation refers to a decline in the value assets because of uses and / or

FUND FLOW PATTERN DIAGRAMETIC APPROACH

Uses-of Funds Flow Analysis:

 It determines the financial consequences of business operations. It explains why in

Increase in Current Assets, Increases the Working Capital.

3. ABSOLUTE LIQUID / CASH RATIO:

4. NET WORKING CAPITAL RATIO:

PROFORMA OF STATEMENT OF CHANGES IN WORKING

Total Current …….. ……..

Total current …….. ……..

Working Capital ……..

******** ******** ******** ********

Statement of sources and application of funds:

Statement of sources and Applications:

Particulars Amount ( ) Particulars Amount ( )

Sources of funds Application of

Funds from ……………… Funds costs in ………………

THE MARKET OF MILK INDUSTRY IN INDIA:

Indian Dairy Industry 2014 Report

Beyond Milk: Value Added Dairy Products to boost up profits

The traditional way

Going the creamy way

The growth trajectory

Increasing participation from the private sector

Drawing investors’ attention

Presently Tirumala market is present in Andhra Pradesh, Karnataka, and Tamilnadu.

Companies registered office is located at Narasaraopet, Gudur District and corporate

» Milk procurement network.

» Superior sales and marketing process.

» Strategic, technological and infrastructural advantages.

» Efficient human investment