anirban final project

7/28/2019 Anirban Final Project

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INVENTORY MANAGEMENT AT RELIANCE FRESH

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BANGALORE INSTITUTE OF MANAGEMENT STUDIES

CHAPTER- 1


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INTRODUCTION

In financial parlance, inventory is defined as the sum of the value of raw materials, fuel and

lubricants, spare parts and semi-processed materials and finished goods stock at any given point

of time. The operational definition of inventory would be: the amount of raw materials, fuel and

lubricants, spare parts and semi-processed materials to be stocked for the smooth running of the

plant.

Since these resources are idle when kept in the stores, inventory is defined as an idle resource of

any kind having an economic value.

Inventories are maintained basically for the operational smoothness which they can affect by

uncoupling successive stages of production, whereas the monetary value of inventory serves as a

guide to indicate the size of the investment made to achieve this operational convenience. The

material management department is expected to provide this operational with a minimum

possible investment in inventories. The objectives of inventory operational and financial,

needless to say, are conflicting. The material department is involved in both stocks outs as well

as large investment in inventories. The solution lies in exercising a selective inventory controland application of inventory control techniques.

1.1 MEANING OF INVENTORY

The term Inventory refers to the stock of raw materials, spare parts and finished products held

by a business firms. It is aggregate quantity of materials, resources and goods that are idle at a

given point of time. The resources may be of any type; for example men, materials, machines or

money, when the resources involved in materials or goods in any stage of completion, inventory

referred to as stocks. Hence, inventory refers to the stocks that a business firm keeps to meet its

future requirement of production and sales.


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Inventory of an Industrial undertaking consists of:

Stocks of raw materials to be consumed in the production of goods for sale.

Work-in-progress (i.e. stock of semi-finished goods) in the process of production of

finished goods for sale.

Stock of finished goods held for sale in the ordinary course of business.

Maintenance of stores and spares parts or production supplies.

Consumable supplies.

1.2 DEFINITION OF INVENTORY:

The term Inventory has been defined by several authors. The most popular of them are The termInventory includes Raw-materials, in process, finished packaging, spares and other stocked in

order to meet an unexpected demand or distribution in the further.

1.3 IMPORTANCE OF INVENTORY:

Inventories constitute the largest component of current assets in many organizations. Poor

Management of inventories therefore may result in business failures. A stock-out creates an

unproductive situation for the organization. In case of a manufacturing organization, (in stock

out ability to supply an item from inventory) could, in extreme cases, bring production process to

a half. Conversely, if a firm carries excessive inventories, the added carrying cost may represent

the difference between profit and loss. Efficient inventory control therefore, can significantly

contribute to the overall profit-position of the organization.


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1.4 OBJECTIVES, NEEDS&BENEFITS OF CARRYING OR HOLDING INVENTORY:

Purchase, production and sale are not one continuous activity. There are separate

activities. So, basically there is the need to carry inventory so that the functions of

purchase, production and sale can precede it their own optimum pace or speed.

Large purchases of raw materials or finished good may be to take advantage of the

discounts offered on bulk purchases. Bulk purchases; naturally result in holding of

inventories.

Large orders may be placed for goods to cut down the ordering costs the cost of

checking, handling and payments involved in small orders, large orders, naturally results

in taking advantage of price factor.

Holding of sufficient inventories of raw materials or finished goods becomes necessary in

times of scarcity to prevent stoppage of production or business.

Production of components in large batches will be helpful to reduce the set-up cost. This

(i.e.; the production of components in large batches) would naturally, result in holding of

large stocks of components.

Vital spares and tools are required to be kept in stock so as to avoid long spells of

production due to non-availability of important spare parts or tools. Holding goods in the process of production (i.e.; work-in-process) is a technological

necessity. It depends mainly on the length of manufacturing process.

Sufficient stocks of finished goods are required to be held to meet the demands of the

customers, which may be uneven.


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1.5 CLASSIFICATION OF INVENTORY

CLASSIFICATION OFINVENTORY

ANTICIPATIONINVENTORY

FLUCTUATION

INVENTORY

LOT-SIZE INVENTORY

MOVEMENT INVENTORY

PRODUCTIONINVENTORY

IN-PROCESS INVENTORY

M.R.O. INVENTORY

FINISHED GOODINVENTORY


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1.6 TYPES OF INVENTORIES

ANTICIPATION INVENTORIES

Such inventories carried to meet predictable changes in demand. In case of seasonal

variations in the availability of some raw materials, it is convenient and also economical to build

up stocks were consumption pattern may be reasonably uniform and predicted.

FLUCTUATION INVENTORIES

Demand fluctuates overtime and it is not possible to predict it accurately. Business firmsmaintain reserve stocks to meet unexpected demand and thereby to avoid the risk of losing sales.

These safety stocks are known as Fluctuation Inventories. There is a time gap between

production and use of certain products. The goods produced in one season are held in stock for

sale and used throughout the year. When the availability of raw-material is seasonal, bulk stock

are purchased for used throughout the year.

LOT-SIZE INVENTORIES

In order to keep costs of buying, receipt, inspection, transport and handling charges low, large

quantities are brought for immediate need. It is a common practice to buy some raw material in

large quantities in order to avail quantity of discounts.

MOVEMENT OR TRANSIT OR TRANSPORTATION INVENTORIES

Raw material and finished goods one place to another, some amount of inventory is always in

transit. Longer the transportation period, greater is the amount of transport and inventories. The

average amount can be determined mathematically:

I = S x T


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Where; S = the average rate of sales (say, weekly average)

T = transit time required to move from one stage to another in a week

I = the movement of inventory needed

PRODUCTION INVENTORIES

Raw materials and other supplies, parts and components which enter into the product during the

production process and generally from part of the product.

IN-PROCESS INVENTORIES

Semi-finished, work-in-progress and partly finished products formed at various stages of

production.

M.R.O. INVENTORIES:

Maintenance, repairs and operating supplies which are consumed during the production process

and generally do not from part of the product itself (e.g.:- oils & lubricants, machinery & plants,

soaps etc.)

FINISHED GOODS INVENTORIES:

Completed finished products ready for sale.

Major Dangers of Over Investments in Inventory:

Blocking of firms funds in inventory.

Excessive carrying costs.

Risk of liquidity.


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The excessive level of inventories consumes the funds of the firm, which cannot be used for any

other purpose. The carrying costs such as the cost of storage, handling, insurance, recording and

inspection also increase in proportion to the volume of inventory. An excessive inventory carriedfrom a long period brings down the liquidity of the firm.

Problem of Inadequate Inventories:

1) Inadequate raw materials and work-in-progress will result in stoppage of production.

2) If the finished goods inventories are sufficient to meet the demands of the customers

regularly, the customers may shift to other competitors, which will amount to a

permanent loss to the firm. An effective inventory management should avoid both these

extreme situations namely over investment and under investment in inventories.

Norms for Inventory:

The norms (limits) for inventory could be set by either the top management, or the materials

management department. The top management usually sets monetary limits for investment in

inventories. The materials department then has to allocate this investment to the various items

and ensure the smooth operation of the company. It would be worthwhile if the inventory norms

are set by the management by objectives concept. This concept accepts the top management

to set the inventory norms in consultation with the materials department. The norms thus evolved

should be specific and quantified. The achievement of the targets set is the responsibility of the

material department. In the setting up of the norms, the involvement of persons who are directly

responsible for maintaining the inventories is very desirable. Other departments involved in

setting the norms are finance, production, marketing and materials control. The norms of

inventory should be converted to specifically spell out parameters like the number of stock outs

permitted, the sales to inventory ratio and inventory to consumption ratio.


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1.7 MEANING OF INVENTORY MANAGEMENT:

Inventory Management covers a much wider field. The inventory management is concerned with

the entire range of functions which affects the flow, conservation and utilization, the quality and

the cost of materials. It is that aspect which is concerned with the activities involved in the

acquisition and storage of all materials directly and indirectly employed in the production of the

finished products. These activities include material planning, programming, functions such as

customer service requirements, production scheduling, purchasing, traffic etc. Viewed in that

perspective, inventory management is broad in scope and affects a great number of activities in

organisation. Because of these numerous inter relationships, inventory management stresses the

need for integrated information flow and decision making, as it relates to inventory policies and

overall systems.Inventory control on the other hand, is defined in a narrower sense than

inventory management and pertains primarily to the administration of established policies,

systems and procedures. For example, the actual step taken to maintain the stock levels or stock

records refers to inventory control.

Factory Influencing Inventory Management & Control:

Several factors influence inventory management and control. The principal effects of these

factors are reflected most strongly in the levels of inventory and the degree of control planned in

the Inventory Control System. The factor includes type of product, type of manufacture, volume

of output and others.

Type of Product:

Among the factors influencing inventory management and control, the type of product is

fundamental. If the materials used in the manufacture of the product have a high unit value.

When purchased, a much closer control is usually in order. If the material used in the product is

in a short supply or is auctioned by the government, this may influence the purchase of this

material and stock maintained.


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The manufacture of standard products as compared to custom-made items still influences

inventories. Materials needed to manufacture a standard product are easy to obtain and a close

control on the stock is not necessary. Material required to product made-to-order items needsstrict control to ensure that no items are cost in the process of manufacture. Such materials and

tools are of special and expensive type and a loss of any small part will hold up the production.

Type of Manufacture:

Besides type of product, Type of Manufactures also influences inventory management and

control. Where continuous manufacture is employed at the rate of production is the key factor.

Here inventory control is of major important ad in reality controls the production of the product.

The economic advantage in this type of manufacture is the uninterrupted operation of the

machines and assembly lines in the plant. Intermittent manufacture, on the other hand permits

greater flexibility in the control of material.

Volume:

The Volume of product to be made as represented by the rate production of may have little effect

on the complexity of the inventory problems. On the other hand, the manufacture of a large

number of sarees involves the planning and control of thousands of inventory. Both the inventory

problem and the difficulty of controlling production increase in difficulty with the number of

component parts of the product and not with the quantity of products to be made.


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The other factors are:-

The objectives of the company as they relate to inventories and the level of service to be

provided to customers.

The qualifications of staff personnel who will design and co-ordinate the implementation of the

system.

The capabilities of personnel who will be responsible for managing the system on a continuing

basis.

The nature and size of inventories and their relationship to the other functions in the company,

such as manufacturing, finance, marketing etc.

The capability of present and future data processing equipment.

The potential savings that might be anticipated from improved control of inventories.

The current, or potential, availability of data that can be used in controlling inventories.

The present method for controlling inventories and for making inventory decisions.

The degree of commitment by management personnel to the development of more effective

inventory management system and the results anticipate from such a system.


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1.8 INVENTORY VALUATION METHODS:

First-in, First-out (FIFO) :

Under FIFO, the cost of goods sold is based upon the cost of material bought earliest in the

period, while the cost of inventory is based upon the cost of material bought later in the year.

This results in inventory being valued close to current replacement cost. During periods of

inflation, the use of FIFO will result in the lowest estimate of cost of goods sold among the three

approaches, and the highest net income.

Last-in, First-out (LIFO) :

Under LIFO, the cost of goods sold is based upon the cost of material bought towards the end of

the period, resulting in costs that closely approximate current costs. The inventory, however, is

valued on the basis of the cost of materials bought earlier in the year. During periods of inflation,

the use of LIFO will result in the highest estimate of cost of goods sold among the three

approaches, and the lowest net income.

Weighted Average :

Under the weighted average approach, both inventory and the cost of goods sold are based upon

the average cost of all units currently in stock at the time of reporting. When inventory turns over

rapidly this approach will more closely resemble FIFO than LIFO.

Average :

Under the average approach, both inventory and the cost of goods sold are based upon the

average cost of all units received in stock.


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1.9 BENEFITS OF INVENTORY MANAGEMAENT & CONTROL:

Proper management and control of inventories will result in the following benefits to an

organization:

Inventory control ensures an adequate supply of materials, stores, etc., minimises stock-outs and

shortages, and avoids costly interruptions in operations.

It keeps down investment in inventories, inventory carrying costs and obsolescence losses to the

minimum.

It facilitates economical purchasing through the measurement of requirements on the basis of

recorded experience.

It eliminates duplication in ordering or in replenishing stocks by centralising the source from

which purchase requisitions emanate.

It permits a better utilization of avoidable stocks by facilitating interdepartmental transfers within

the company.

It provides a check against the loss of materials through carelessness or pilferage.

It facilitates cost accounting activities by producing a means for allocating material cost to

products, departments or other operating accounts.

It enables management to make cost and consumption comparisons between operations and

consumptions comparisons between operations and periods.

It serves as a mean for identifying and disposal of inactive and obsolete items of stores.

Perpetual inventory values provide consistent and reliable basis for preparing financialstatements.


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1.10 PROCESS OF INVENTORY MANAGEMENT AND CONTROL:

As mentioned earlier, Inventory Management and Control refers to the planning for optimum

quantities of materials at all stages in the production cycle and evolving technique, which would

ensure the availability of planned inventories.

Four steps are involved in the process, they are:-

Determination of optimum inventory levels and procedures of their review and adjustments.

Determination of degree of control that is required for the best results.

Planning and design of the inventory control system.

Planning of the inventory control organization

1) OPTIMUM INVENTORY LEVELS:

Determination of inventory that an organization should hold is a significant but difficult task.

Too much of inventory result in locking up of working capital accompanied by increased

carrying costs (but reducing ordering costs). Excess inventories, however guarantee

uninterrupted supply of materials and components, to meet production schedules and finished

goods to meet customers demand. Too less of inventory releases working capital for alternative

uses and induces carrying costs (increases ordering costs). But there is risk of stock-out costs.

All these and other related factors must be considered to determine a level of inventory, which an

organization should hold. An interesting aspect is that the level of inventories is not static. What

is the optimum level today may not be so tomorrow. Hence, inventory management must plan

for the review of the stock often


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2) DEGREE OF CONTROL:

The second aspect of inventory management is to decide just how much control is needed to

realise the objectives of inventory management. The difficulty is best overcome by classification

of inventory on the basis of value, popularly called ABC, VED, FSN analysis and other methods

is useful in deciding the degree of control. More importance should be given not only to

produces of high value items but also to items of high consumption.

3 ) PLANNING AND DESIGN OF THE INVENTORY SYSTEM:

An inventory system provides the organizational structure and the operating policies for

maintaining and controlling goods to be inventoried. The system is responsible for ordering and

receipt of goods, timing the order placement, and keeping track of what has been ordered, how

much, and from then. Further, the system must provide follow up to enable the answering of

such questions as:

Has the vendor received the order? Has it been shipped? Are the items correct? Are the

procedures established for reordering or returning undesirable merchandise?

4) ORGANIZATIONAL ARRANGEMENT:

The last aspect of inventory management and control is to determine an organization structure to

handle inventory. Organizationally speaking, inventory control function is assigned to materials

management or production planning and control.

Attaching inventory control to material management activity is feasible in organizations were

integrated material management is in practice. There is a strong justification for such an

arrangement as inventory control is part of material activity and all material functions must be

integrated into one group.


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Assigning inventory control function to production planning and control however has

advantages. Production planning and control department will be in a better position to plan its

production schedule with the knowledge of inventory under its control. Besides, the productionplanning and control department will be able to issue timely requisitions for replenishment of

stocks used in the production operation. And logically speaking it is the production department

which is the user of inventories, and the same department must be held responsible for

controlling them.

Actually the nature of a firms production operation, its product, and the type of market in which

it operates determine the preference for assigning inventory function to production. An

engineering oriented company producing specialised technical products on a job-shop basis

might well choose to emphasize production, considerations as long as analysis of total cost

justifies such a decision. Hence, inventory may report to the production division. On the other

hand, a mass producer of electronic motors light will find itself in just the opposite situation and

be compelled by relative cost consideration to integrate inventory control with purchasing.

Whatever the consideration, it may be pointed out that any inventory control system is not once

set goes automatic type but needs to be reset from time to time as the conditions such as leadtime, consumption pattern etc., keep changing.

1.11 INVENTORY CONTROL TECHNIQUES/TOOLS:

Inventory control techniques are employed by the inventory control organization within the

framework of inventory models. Inventory control techniques represent the operational aspect of

inventory management and help realise the objectives of inventory management and control.

Several techniques of inventory control are is use and it depends on the convenience of the firm

to adopt any of the techniques. What should be stressed, however, is the need to cover all items

of inventory and all stages, i.e. from the stage of receipt from suppliers to the stage of their use.


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INVENTORY CONTROL TECHNIQUES:

ABC Classification

HML Classification

VED Classification

SDE Classification

FSN Classification

Level Setting

Two Bin System

Materials Requirement Planning

Physical Verification of Stock

Just-In-Time Technique


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ALWAYS BETTER CONTROL (ABC) CLASSIFICATION:

One of the widely used techniques for control of inventories is ABC Analysis. The objectives of

ABC control is to vary the expenses associated with maintaining appropriate control according to

the potential savings associated with a proper level of such control.

ABC analysis consists of the classification of the materials into categories A, B and C on the

basis of their value. Items of high value and comparatively less in number are included in A

category. Generally, they constitute about 70% of the total value and about 15% of the total

number. Items of low value, be large in number are included in C category. Generally, they

account for above 10% of the total value and about 60% of the total number. Items of moderate

value and moderate in numbers are included in B category. They account about 20% of the

total value and 25% of the total number.

Items of A category are subject to strict with regard to purchase storage and use. Items of B

category are subject to moderate control. Items of C category are not subject to much control.

The objective of this analysis is to reduce the investment on inventory, the cost of inventory

control, and also loss of inventory.

HIGH, MEDIUM & LOW (HML) CLASSIFICATION:

The high medium and low classification follows the same procedure as adopted in ABC

classification. Only difference is in HML classification unit value is the criterion and not the

consumption value. The items of inventory should be listed in descending order of unit value and

it is up to the management to fix limits for the three categories.

For example: - The management may decide that all units with unit value of Rs.2000 and above

will be H items, Rs.1000 to 2000 M items and less than Rs.1000 L items.The HML analysis

is useful for keeping control over consumption at department levels, for deciding frequency of

physical verification, and for controlling purchases.


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VITAL, ESSENTIAL & DESIRABLE (VED) CLASSIFICATION:

While in ABC classification inventories are classified on the basis of their consumption value

and in HML analysis unit value is the basis, critically of inventories is the basis for vital,

essential and desirable categorisation.

The VED analysis is done to determine the critically of an item and its effect on production and

other services. It is specially used for classification of spare parts. If a part is vital it is given V

classification, if it is essential it is given E classification and if it is not so essential, the part is

given D classification. For V items a large stock of inventory is generally maintained, while

for D items minimum stock is enough.

SCARE, DIFFICULT AND EASY TO OBTAIN (SDE):

The SDE analysis is based upon the availability of items and is very use full in the context of

scarcity of supply. In this analysis, S refers to Scares items, generally imported, and those

which are in short supply D refers to difficult items which are available indigenously but are

difficult items to procure. Items, which have to come from distant places or for reliable suppliers

are difficult to come by, fall into D category. E refers to items which are easy to acquire and

which are available in the local markets.

The SED classification based on problem faced in procurement is vital to lead time analysis and

is deciding o purchasing strategies.

FAST-MOVING, SLOW-MOVING & NON-MOVING (FSN):

FSN stands for fast-moving, slow-moving and non-moving. Here classification is base on the

pattern of issues from stores and useful in controlling obsolescence. To carry out FSN analysis,

the date of receipt or the last date of issue whichever is later, is taken to determine the number of

months, which have moved since the last transaction. The items are usually grouped in periods of

12 months.


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FSN analysis is helpful in identifying active items, which need to be moved regularly, and

surplus items, which have to be examined further. Non-material moving items may be examined

further and their disposal can be considered.

LEVEL SETTING:

Setting up of inventory levels, such as Maximum level, Minimum level, Re-order level, Danger

level and Average stock level. The above level are calculated when a storekeeper should place an

indent for fresh stock and also to avoid over stocking of any material, at the same time to ensure

follow up sufficient materials to production process. The main purpose of fixing the levels is to

control the investment on inventories.

MINIMUM LEVEL:

This is the limit below which the stock should not be allowed to fall. It is fixed on the basis of

average consumption and average lead time required to measure the item. The main purpose of

fixing this level is to ensure adequate check for continuous production and sales.

MINIMUM LEVEL = RE-ORDER LEVEL(NORMAL CONSUMPTION INTO

NORMAL RE-ORDER PERIOD)


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MAXIMUM LEVEL:

This is the limit or level beyond which the stock of an item should not exceed. This level is fixed

for avoiding over stocking of materials and its associated risks.

MAXIMUM LEVEL = RE-ORDER LEVEL + RE-ORDER QUANTITY (EOQ)

(MINIMUM CONSUMPTION x MINIMUM RE-ORDER PERIOD)

RE-ORDER LEVEL:

It is the point fixed between maximum and minimum level at which the storekeeper has to

initiate action to obtain fresh supplies of materials.

This point will usually be slightly higher than the minimum stock to cover such emergencies is

abnormal usage or un-expected delay in supply. Re-ordering level depend on lead time, rate of

consumption and economic order quantity.

RE-ORDER LEVEL = MAXIMUM CONSUMPTION x MAXIMUM

RE-ORDER PRIEOD


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DANGER LEVEL:

It is the level below the minimum level. When the stock reaches this danger level urgent action

for purchases is necessary. As normal lead time is not available it is necessary to resort to

unorthodox purchase procedure resulting in higher purchase cost.

DANGER LEVEL = MINIMUM CONSUMPTION x EMERGENCY

RE-ORDER PERIOD

AVERAGE STOCK LEVEL:

=

ECONOMIC ORDERING QUANTITY (EOQ):

It can be described as the basic how much to buy model. It is shortened to EOQ and is theoldest and widely known inventory model. It dates back to 1915. The purpose of using EOQ

model is to find that particular quantity of order which minimizes total inventory costs. EOQ is

the technique which solves the problem of the materials manager. EOQ is the order size at which

the total cost, comprising ordering cost and plus carrying cost, is the least. EOQ will be fixed at a

level where the total of ordering costs will be minimum.

EOQ can be calculated by a mathematical formula:

=


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Where: A refers to annual consumption in units

O refers to ordering cost per order

C refers to carrying cost per unit per annum

TWO-BIN SYSTEM:

It is mainly adopted to control C group inventories. In the two bin system, stock of each item is

separated into two bins. One bin contains stock, just enough to last from the date of placing a

new order until it is received in inventory. The other bin contains a certain quantity of stock thatwill be sufficient to satisfy probable demand during the period of replenishment. Stock first

issued from the 1st

bin. When the 1st

bin is empty an order of replenishment is made and the

stock in the 2nd

bin is utilized until the ordered material is received.

MATERIAL REQUIREMENT PLANNING:

It is fairly recent technique, which has been introduced to control inventories; it is based on

computer technology, material requirement planning mainly helps in ensuring arrival of

materials exactly when it is needed for production. At the same time it reduces the length of time

materials are held in inventory. Material requirement plans and control goods on order and helps

in determining when and what specific materials will be needed to meet the previously planned

production schedules.


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PHYSICAL VERIFICATION OF STOCKS:

Under this system of stock verification, materials are verified on a continuous basis. The

verification is undertaken in such a way that all materials in the store room get checked up at

least 2 or 3 times a year. The selected items of materials are counted at frequent intervals and

compared with the bin card and stores ledger. With the help of the bin card and stores ledger one

can determine the goods received, issued and stock on hand at any time. Any difference between

book entries and items of material denote discrepancies.

ANNUAL STOCK VERIFICATION:

Under this system, all the materials kept in the stores are verified once in a year. The stock

verification is undertaken at the end of the financial year. Stock verification under this system is

undertaken by the storekeeper. During the period if annual stock taking no material is issued or

received. An advance notice is served to all the heads of the departments concerned regarding

stock verification and the staffs of the store-keeping department is assigned duties for the

purpose of verification. Arrangements are made to disposal of materials which are incapable of

being used. Reports are prepared for excessive and shortage of stocks.

JUST-IN-TIME (JIT):

The concept JIT means that virtually no inventories are held at any stage of production and that

exact number of units is brought to each successive stages of production at the right time. It is

also called Zero Inventories.

The concept JIT was started in the Motto Machi plant of Toyota in Japan, when the system hasbeen perfected and results achieved. The plant has a long time of trucks waiting outside with full

loads of automobile parts for the assembly line. As soon as one truck comes out from one end of

the plant, another truck gets inside. There is no warehouse for the parts. In India, the Maruti

Udyog Ltd. has adopted JIT.


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1.12 USE OF BIN CARDS & STORES LEDGER:

BIN CARD:

Bin is a place, rack or cupboard where materials are stored. Each bin shall have a card to show

the position of stock in the bin. It is known as Bin card. A bin card gives bin number,

description, code number of materials and different levels of materials. It is ruled in columns to

depict stock received; goods received note number, materials issue, materials requisition number,

balance of stock on and remarks. The bin card thus indicates ready stock position of an item at

any moment. Entries are made usually by stores personnel.

STORES LEDGER:

Stores ledger contains the same columns, which a bin card has, but in addition the amount

columns for pricing receipts and issues of materials are provided. Stores ledger shows, at any

time, the value on hand. The ledger is maintained in stores as well as cost office to provide a

cross check on the stores personnel. Entries in stores ledger are supported by goods received

note, material requisition etc.


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CHAPTER- 2


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2.1 RESEARCH DESIGN

Research design is the arrangement of conditions for collection and analysis of data in a manner

that aims to combine relevance to research purpose with economy in procedure.

Research design, stands for advance planning of the methods to be adopted for collecting the

relevant data and the techniques to be used in their analysis. The dissertation work in fact, has a

great bearing on the reliability of the results arrived at end as such constitute the firm foundation

of the entire edifice of the dissertation work. The data regarding company history and profile

are collected through explanatoryresearch design particularly through the study of secondary

source and discussions with the individuals.

The type of research design used in the collection and analysis is Historical Research Design.

2.2 TITLE OF THE STUDY

The title of the dissertation is Inventory management and control in Reliance Fresh.

2.3 STATEMENT OF THE PROBLEM

The Study has been done to analyze proper utilization of inventory resources in the

company for last three years.

Analysis of stock position of the company for three years.

Liquidity of over-storage inventory

Shortage due to under-storage inventory

2.4 OBJECTIVES OF THE STUDY

The main objectives of the study are:

To study the working of inventory control system.

To identify and track all data processing assets in an Inventory System Repository.

To define the process by which assets are identified and maintained in the Inventory

System.


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To find out the degree of relationship between cost control and inventory control.

To study the historical background ofReliance Fresh

To study the competitive environment.

To determine critical evaluation for inventory management and control.

To study the effectiveness of inventory management in todays world.

To know how the stock is taken into account.

To know the methods and procedure for stock replenishment.

To study the materials stored.

To know the purchase of materials.

To study the inventory level.

2.5 DATA COLLECTION METHOD:

Source of data:

Both primary and secondary data are used to obtain the required information.

Source of data can be classified as:

PRIMARY DATA:

Primary data is a data collected through gathering the information from different

department managers and officers of the company to get information about the company

and its activities.

SECONDARY DATA:

Secondary data is a data collected from different published sources.

Collection of data through company annual reports, company manuals and other relevant

documents.

By textbooks, journals& websites.

Collection of data through the literature provided by the company.


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2.6 FIELD WORK:

1. Stores depot: Information regarding the stocking of materials, receipt and issues to

workshops, inventory, and control procedures in various branches inside the department was

obtained.

2. Accounts Department: Rest of the information was obtained from accounts and

marketing department through personal interviews with section officials.

2.7 SCOPE OF THE STUDY

The study enables the company counter the concept of liquidity and enhances the

efficiency of the organization.

From the point view of individual it is a learning experience (knowledge) which

would be helpful in analyzing and understanding financial aspects

2.8 LIMITATIONS OF THE STUDY:

A financial analysis will have always a limited time. This study also has certain limitations. They

are as follows:

o Tools used for analysis are limited.

o The subject study is purely for academic purpose.

o The subject analysis is so vast and therefore analysis and interpretation are

confined to the objectives.

o Risk involved in carrying inventory

o The major risk is that the market value of the specific inventories will be less than

the value at which they were acquired.

o

Certain inventories are obsolescence, whether it is in technology or in consumer

tastes.


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o When demand or usage of inventories is uncertain. The finance managers try to

effect policies that will reduce the average lead time

o

A change in style may cause a retailer to sell dresses at substantially reduced price

2.9 SAMPLING TECHNIQUE:

Random Sampling.

2.10 METHODOLOGY:

o Data: Secondary Data like Inventory reports, Balance sheet, etc.

o Statistical Tools: Tables, Graphs, Charts and other tools will be used.


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CHAPTER- 3


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INDUSTRY PROFILE

Retailing is the combination of activities involved in selling or renting consumer goods and

services directly to ultimate consumers for their personal or household use. In addition to selling,

retailing includes such diverse activities as, buying, advertising, data processing and maintaining

inventory.

According to Kotler: Retailing includes all the activities involved in selling goods or

services to the final consumers for personal, non business use

3.1 Wheel of Retailing:

A better known theory of retailing wheel of retailingproposed by Maclcomb McNair

says,

1. New retailers often enter the market place with low prices, margins, and status. The low

prices are usually the result of some innovative cost-cutting procedures and soon attract

competitors.

2.

With the passage of time, these businesses strive to broaden their customer base and

increase sales. Their operations and facilities increase and become more expensive.

3. They may move to better up market locations, start carrying higher quality products or

add services and ultimately emerge as a high cost price service retailer.

4. By this time newer competitors as low price, low margin, low status emerge and these

competitors too follow the same evolutionary process.

5.

The wheel keeps on turning and department stories, supermarkets, and mass merchandise

went through this cycles.


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3.2 Functions of a Retailer:

Sorting

Manufacturers usually make one or a variety of products and would like to sell their entire

inventory to a few buyers to redu7ce costs. Final consumers, in contrast, prefer a large variety of

goods and services to choose from and usually buy them in small quantities. Retailers are able to

balance the demands of both sides, by collection an assortment of goods from different sources,

buying them in sufficiently large quantities and selling them to consumers in small units.

The above process is referred to as the sorting process. Through this process, retailers undertake

activities and perform functions that add to the value of the products and services sold to the

consumer. Supermarkets in the US offer, on and average, 15,000 different items from 500

companies. Customers are able to choose from a wide range of designs, sizes and brands from

just one location. If each manufacturer had a separate store for its own products, customers

would have to visit several stores to complete their shopping. While all retailers offer an

assortment, they specialize in types of assortment offered and the market to which the offering is

made. Westside provides clothing and accessories, while a chain like Nilgiris specializes in food

and bakery items. Shoppers Stop targets the elite urban class, while Pantaloons is targeted at the

middle class.

Breaking Bulk

Breaking bulk is another function performed by retailing. The word retailing is derived from the

French word retailer, meaning to cut a piece off. To reduce transportation costs, manufacturers

and wholesalers typically ship large cartons of the product, which are then tailored by the

retailers into smaller quantities to meet individual consumption needs.

Holding Stock

Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an

inventory that allows for instant availability of the product to the consumers. It helps to keep

prices stable and enables the manufacturer to regulate production. Consumers can keep a small


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stock of products at home as they know that this can be replenished by the retailer and can save

on inventory carrying costs.

Additional Services

Retailers ease the change in ownership of merchandise by providing services that make it

convenient to buy and use products. Providing product guarantees, after-sales service and dealing

with consumer complaints are some of the services that add value to the actual product at the

retailers end. Retailers also offer credit and hire-purchase facilities to the customers to enable

them to buy a product now and pay for it later. Retailers fill orders, promptly process, deliver and

install products. Salespeople are also employed by retailers to answer queries and provide

additional information about the displayed products. The display itself allows the consumer to

see and test products before actual purchase. Retail essentially completes transactions with

customers.

Channel of Communication

Retailers also act as the channel of communication and information between the wholesalers or

suppliers and the consumers. From advertisements, salespeople and display, shoppers learn about

the characteristics and features of a product or services offered. Manufacturers, in their turn,

learn of sales forecasts, delivery delays, and customer complaints. The manufacturer can then

modify defective or unsatisfactory merchandise and services.

Transport and Advertising Functions

Small manufacturers can use retailers to provide assistance with transport, storage, advertising

and pre-payment of merchandise. This also works the other way round in case the number of

retailers is small. The number of functions performed by a particular retailer has a direct relation

to the percentage and volume of sales needed to cover both their costs and profits.


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3.3 COMPANY PROFILE

RELIANCE GROUP

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private

sector enterprise, with businesses in the energy and materials value chain. Group's annual

revenues are in excess of USD 27 billion. The flagship company, Reliance Industries Limited, is

a Fortune Global 500 company and is the largest private sector company in India.

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.

Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical

integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil

and gas exploration and production - to be fully integrated along the materials and energy value

chain.

The Group's activities span exploration and production of oil and gas, petroleum refining and

marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and

retail.

Reliance enjoys global leadership in its businesses, The Group exports products in excess of

USD 15 billion to more than 100 countries in the world. There are more than 25,000 employees

on the rolls of Group Companies. Major Group Companies are Reliance Industries Limited

(including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited) and

Reliance Industrial Infrastructure Limited.


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3.4 FOUNDER PROFILE

"Growth has no limit at Reliance. I keep revising my vision. Only when you can dream It, you can

do it."

Dhirubhai H. AmbaniFounder Chairman Reliance GroupDecember 28, 1932 - July 6, 2002

Dhirubhai Ambani founded Reliance as a textile company and led its evolution as a global leader in thematerials and energy value chain businesses.

BOARD OF DIRECTORS OF RELIANCE INDUSTRIES LIMITED

Nikhil R. MeswaniExecutive Director

Hital R. Meswani

Executive DirectorH.S. Kohli

Executive Director

Mukesh D. Ambani

Chairman & Managing

Director
http://www.ril.com/html/aboutus/board_director.htmlhttp://www.ril.com/html/aboutus/board_director.htmlhttp://www.ril.com/html/aboutus/board_director.html


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3.5 RELIANCE FRESH

APKA FRESH APKA PADAOS ME

Indias Fortune 500 private sector giant, Reliance Industries Ltd, has, in fact, been first off the

blocks by launching its first Reliance Fresh outlets in Hyderabad,

Reliance fresh is the retail chain division of reliance industries of India which is headed by

Mukesh Ambani. Reliance has entered into this segment by opening new retail stores into almost

every metropolitan and regional area of India. Reliance plans to invest rs 25000 crores in thenext 4 years in their retail division and plans to begin retail stores in 784 cities across the

country. The reliance fresh supermarket chain is rils rs 25,000 crore venture and it plans to add

more stores across different g, and eventually have a pan-India footprint by year 2011. The super

marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products

and also will sport a separate enclosure and supply-chain for non-vegetarian products. Besides,

the stores would provide direct employment to 5 lakh young Indians and indirect job

opportunities to a million people, according to the company. The company also has plans to train

students and housewives in customer care and quality services for part-time jobs.

Reliance Fresh will

Forge strong and lasting bonds with millions offarmers and will transform the

Relationship with customers to a new level

Offer unmatched affordability, quality, convenience, service and choice

Offer our customers the widest range of fruit and vegetables at the best prices in

the neighborhood

Provide for the daily needs of our customers by offering staples, grocery and

household products at great prices

Offer consistent high quality, unbeatable freshness and great service so that our

Customers know that we can be trusted every day.


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3.6 PRODUCT PROFILE

S.NO PRODUCT RANGE

1 FRUITS & VEGETABLES

2 STAPLES

3 CONFECTIONARIES & SNACKS

4 PROCESSED FOOD

5 DAIRY PRODUCTS

6 BEVERAGES

7 REFRIGERATED PRODUCTS

8 READY TO EAT ITEMS


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CHAPTER- 4


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TABLE-1

4.1 INVENTORY TURNOVER RATIO

ANALYSIS:

From the table it is clear that the inventory turnover ratio for the year 2008 was 38.10 times and

in the year 2009 it comes to 9.58.in the year 2010 it again decrease in to 7.82 times

Inventory Turnover Ratio:

The inventory turnover or stock turn over, measures how fast the inventory is moving

through and generating sales. It is defined as:

=

YEARINVENTORY TURNOVER

IN TIMES

2007-08 38.10

2008-09 9.58

2009-10 7.82


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GRAPH-1

The graph showing the inventory turnover ratio

INTERPRETATION:

From the above graph it can be inferred that there is marginal decrease in inventory turnover

ratio from 2008 to 2009 and then 2009 to 2010.this indicates that, there is a very low rate ofconversion of stocks in to sales and then in to cash.

0

10

20

30

40

2007-082008-09

2009-10

INVENTORYTURNOVER

YEARS

INVENTORY TURNOVER RATIO

38.1

9.58

7.82


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TABLE-2

4.2 COMPARISION AND ANALYSIS OF INVENTORY RATIO

PARTICULARS 2008 2009 2010

STOCK IN

TARADE65862344 78785327 95864232

STORES AND SPARES

STAPLES 2085643 1987423 3518476

DAIRY

PRODUCTS11475147 17597691 43845621

TOTAL 79423134 98370441 143228329

ANALYSIS:

This table showing the inventory ratio for the year 2008, 2009 and 2010. The inventories include

stock in trade, staples and dairy products. We can observe that, each inventory is increasing year

to year. In the year 2008 total inventory was 79423134 it increased up to 98370441 in the year

2009 And it again increases to 143228329 in the year 2010.


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GRAPH-2

The graph showing the comparison and analysis of inventory ratio

INTERPRETATION:

This graph clearly showing an increasing trend in case of inventories that is in stock in trade,

staples and dairy products. This shows that the company can depend on its credibility in order tofulfill the demand for the products.

0

10000000

20000000

30000000

40000000

50000000

60000000

70000000

80000000

90000000

100000000

STOCK IN TRADE STAPLES DAIRY PRODUCTS

2008

2009

2010


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TABLE-3

4.3 ANNUAL SALES FOR LAST THREE YEARS:

YEARS SALES OF SEEDS (in crore)

2007-08 170

2008-09 70

2009-10 60

ANALYSIS:

The above sales table shows that what rate the Reliance Fresh products are turned over

every year. The sale of the 2007-08 is more as compared to 2009 and 2010. In the year 2008 thesales was high then it decrease in the year 2008-09 and again decrease in the year 2009-10.


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GRAPH-3

The graph showing the annual sales of last three years

INTERPRETATION:

From the above table the annual sales are clearly shown. In the year 2007-08 sales is Rs 170

crore and the year 2008-09 sales is Rs 70 crore, it is decreased because of low production due to

flood and in the year 2009-10 sales again decreased to 60 because of quality of production

became low.

0

50

100

150

200

2007-082008-09

2009-10

ANNUALSAL

ES

YEARS

ANNUAL SALES TURNOVER RATIO

170

70

60


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TABLE-4

4.4 PURCHASE CHART

YEAR STAPLES DAIRY PRODUCTS

2007-08 2089.53 132.87

2008-09 5053.78 230.14

2009-10 6962.15 550.65


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GRAPH-4

The graph showing the purchase chart

INTERPRETATION:

The above table shows purchases made by Reliance Fresh for last three years. The table

indicates purchases of staples & dairy products. It is clear from the table that, the purchases of

staples is lower in the year 2008. Then it increased in the year 2009 and again increases in the

year 2010. But in case of dairy products it shows increasing order every year. In 2008 it was

132.87, in 2009 it increase up to 230.14 and again in the year 2010 it increased up to 550.65.

0

1000

2000

3000

4000

5000

6000

7000

2007-08 2008-09 2009-10

2089.53

5053.78

6962.15

132.87 230.14550.65

staples dairy products


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TABLE 5

4.5 TURNOVER OF WORK-IN-PROGRESS

WORK IN PROGRESS TURNOVER RATIO:

This ratio obtained by ascertaining cost of production (annual) an average work in

progress during the year. Average work-in-progress is half of opening and closing WIP turnover

ratio is expressed as

=

YEAR RS. IN CRORES

2007-2008 7654

2008-2009 0.77

2009-2010 0.532

ANALYSIS:

The W.I.P turnover ratio has been high in the year 2008 and it decreased in the year 2009 and 2010.


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GRAPH-5

WIP TURNOVER RATIO (in times)

INTERPRETATION:

In the year 2008 to 2010 its work-in-progress turnover ratio has decreased because work-in-

progress is converted into in to finished goods.

0

2000

4000

6000

8000

2007-082008-09

2009-10

WIPT

URNOVER

YEARS

WIP TURNOVER RATIO

7654

0.77

0.532


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TABLE-6

4.6 RAW MATERIALS

YEAR RS. IN CRORES

2007-2008 186.56

2008-2009 49.86

2009-2010 58.28

ANALYSIS:

The stock of raw materials in the 2008 is 175.71, and in the next year i.e. 2009 the companys

raw material decreased and gradually. But in the year year 2010 it again increase up to 56.38.


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GRAPH-6

Graph representing stock raw material for three years

INTERPRETATION

The above graph shows that in 2008 the company has maintained good stock. But in the next

year the loss is reported because of that, the company has not been able to maintain the good

stock i.e., 2009. The stock has been increased in 2010 compared to 2009 which shows the

company maintaining good stock to avoid the shortage of raw material and to avoid wastages.

0

50

100

150

200

2007-082008-09

2009-10

WIPTURN

OVER

YEARS

STOCK OF RAW MATERIAL

186.56

49.86

58.28


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TABLE-7

4.7 WORK-IN-PROGRESS

YEAR RS. IN CRORES

2007-2008 66.98

2008-2009 157.43

2009-2010 192.73

ANALYSIS:

The stock of work in progress has been increased from year to year in

year 2008 it was Rs 66.98(lakhs), and in the year 2009 it was Rs 157.43(lakhs),

and in the year2010 it was Rs 192.73( lakhs).


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GRAPH-7

Graph representing work in progress for three years

INTERPRETATION:

Reliance Fresh has good work force and hence, it will adopt good technology. So it will increase

its work-in-progress and also it is earning good profit (2008 & 2009). There is decrease in the

profit in 2010.

0

50

100

150

200

2007-082008-09

2009-10

WIPTURNOVER

YEARS

WORK IN PROGRESS

66.98

157.43

192.73


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TABLE-8

4.8 STRUCTURE OF INVENTORY AS ON 31ST

MARCH 2010

PARTICULARS

INVENTORY IN 2010

IN FIGURE IN %AGE

STOCK IN TRADE 57869241 82.26%

STORES AND SPARES: STAPLES 2065431 2.84%

DAIRY PRODUCTS 10765421 14.90%

TOTAL 70700093 100%


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GRAPH-8

Graph representing inventory in the year 2009-10

INTERPRETATION

In this graph it is clear that stock in trade occupy high position that is 82% which has a turnover

of Rs. 57869241 where as staples occupy 3% i.e. turnover of Rs 2065431 and dairy products

occupy 15 % that has turnover of Rs 10765421.

82%

3% 15%

INVENTORY IN THE YEAR 2009-10

stock in trade

staples

dairy products


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TABLE-9

4.9 STRUCTURE OF INVENTORY AS ON 31ST MARCH 2009

PARTICULARS

INVENTORY IN 2009

IN FIGURE IN %AGE


STORES AND SPARES:

STAPLES 3718876 2.02

DAIRY PRODUCTS 46885541 20%

TOTAL 145572164 100%


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GRAPH- 9


INTERPRETATION


of Rs. 73923204 where as staples occupy 2% i.e. turnover of Rs 3718876 and dairy productsoccupy 20% that has turnover of Rs. 46885541

78%

2%

20%


stock in trade

staples

dairy products


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TABLE-10

4.10 STRUCTURE OF INVENTORY AS ON 31ST

MARCH 2008

PARTICULARS

INVENTORY IN 2008

IN FIGURE IN %AGE


STORES AND SPARES:

STAPLES 3718876 2.56%

DAIRY PRODUCTS 46885541 32.20%

TOTAL 145572164 100%


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GRAPH-10


INTERPRETATION


of Rs.94967747 where as staples occupy 3% i.e. turnover of Rs 3718876 and dairy products

occupy 32% that has turnover of Rs. 46885541.

65%

3%

32%


stock in trade

staples

diary products


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TABLE-11

4.11 Table showing technique adopted by the organization for inventory

control

CONCEPT ANALYSIS:

ABC: A system of inventory management which divides the inventory into three categories.

1. A: Includes items that involve the largest investment.

2. B: Items requiring the second largest investment.

3. C: Category involving the smallest investment.

Accordingly appropriate inventory control technique can be applied.

JIT: It is a complete reengineering of production process that emphasizes continuous

improvement, quality management, reduced set up times, improved maintenance procedures and

co-operation with suppliers.

Two-Bin-Technique:

One to stock the inventory required satisfying the probable demand during the period of

replenishment and the other to stock the inventory required from the date of placement of new

order to the date of receipt of inventory.

Particular Percentage

Always Better Control Technique 50

Just-In-Time Technique 30

Two Bin Technique 20

Total inventory 100


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To start with Reliance Fresh uses inventory from the first bin. After this bin is exhausted

an order for replenishment is placed during which the stock in second bin is utilized, till the

ordered materials takes position.

GRAPH-11

Graph showing technique adopted by the organization for inventory control

INTERPRETATION:

From the above table and graph we can know the techniques adopted by the organization for

inventory control.

The organization is been using the three methods of control which going to give them

optimum utilization. They are ABC, JIT and Two-Bin-Technique. We can see that the

organization is using the ABC method effectively i.e., for up to 50%, they are also using JIT on

the basis of schedule i.e., for up to 30% and also two-bin-technique for up to 20% of inventory.

0

10

20

30

40

50

ABC

TECHNIQUES JIT TECHNIQUESTWO BIN

TECHNIQUES

WIPTURNOVER

YEARS

TECHNIQUES OF INVENTORY CONTROL

50

30

20


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CHAPTER- 5


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5.1 FINDINGS

1. RELIANCE FRESH uses standard norms for Inventory Management for all the materials

as been maintained.

2 Material planning is done based on orders obtained from different customers. The material

requirement plan is processed is to give exact requirements of materials to be produced.

3 Vendors are related based on their performance with respect to delivery, a quality price standard.

4 The received material are inspected as per standard plan is finished products are tested on 100%

basis no material is released is handled properly.

5 Physical verification of high value materials in holding store is conducted in accordance with

predetermined programmers.

6 All material is stored in right condition at respective locations and The Company has items, which

are slowing moving and non-moving, which are disposed off at regular intervals.

7. The scrap obtained in the process is comparatively very low.

8. As the production cycle is very high, and leads to accumulation of WIP, in turn increase the cost,

the company should flow the sub-contracting method where some part of the work is done by

other contracts and only assembling and furnishing of the product is done. This leads to

systematic and distributed work.

9. The production layout may be changed to cellular manufacturing concept. I.e. Raw materials fed

in one end and finished products are received in another end where every step is automatic and

mechanized.

10.FIFO method is being adopted to issue the materials to production department


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5.2 SUGGESTIONS

1. To follow just in time (JIT) technique

The concept of JIT means that virtually no inventories are held at any stage of production

and that exact number of units is bought to each successive stage of production at the

right time is also called zero inventories.

2. It is found that in every ward there is A, B, C items. It is suggested keep the materials a

class items in some ward and C class items in some wards, so that it is easy to keep

attention on every ward according to their importance.

3. Method of analysis;

It is found that ABC analysis is followed to a large extent; hence it is suggested to follow

the different methods.


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CHAPTER- 6


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CONCLUSION

The research topic inventory management and control, has a greater implication on Indian

industries. From the analysis of inventory management and control in Reliance Fresh, it is very

clear that, it has achieved greater importance in production control to a large extent, it also

enhance the arising need of the organization, in respect of inventory management and control.

The inventory management and control in Reliance Fresh is very complex function. The

functions of stores depot, its inventory control technique to achieve the effective production

program, necessitates the importance of inventory management and difficult task in todays

business world in spite of complex function, Reliance Fresh has maintained a very good system

of inventory management and control has achieved great progress in production program year to

year.


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CHAPTER- 7


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BIBLIOGRAPHY

Books

Title Author

1. Financial Management I.M.Pandey

2. Financial Management P.V.Kulkarni

3. Production Management K.Ashwathappa

4. Inventory Control James. L.Lundy

Magazines:

1. Manuals used in the company

2. Annual report for the period 2007-08 , 2008-09 & 2009-10.


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CHAPTER- 8


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ANNEXURE

Schedule As at

31st

march, 2010

(Rs in lakhs)

SOURCES OF FUNDS

Shareholders Funds

Share Capital A 5.0

Loan Funds

Secured Loans B 58.93

Unsecured Loans C 210,028.95

210,087.88

TOTAL 210,092.88

APPLICATION OF FUNDS

Fixed Assets D

Gross Block 71,513.50

Less: Depreciation 11,327.32

Net Block 60,186.18

Capital Work in Progress 52,887.51

113,073.69

Investments E 49.00

Deferred Tax Assets 20,104.73


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Current Assets Loans & Advances

Current Assets F

Inventories 21,467.06

Sundry Debtors 5,221.87

Cash & Bank Balances 1,793.64

28,482.57

Loans & Advances G 21,052.82

49,535.39

Less:

Current Liabilities & Provisions H

Current Liabilities 13.313.34

Provisions 549.78

13,863.12

Net Current Assets 35,672.27

Profit & Loss Account 41,193.19

TOTAL 210,092.88

Schedule As at

31st

march, 2009

(Rs in lakhs)


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SOURCES OF FUNDS

Shareholders Funds

Share Capital A 5.0

Loan Funds

Secured Loans B 109.25

Unsecured Loans C 177,573.42

177,682.67

TOTAL 177,687.67


Fixed Assets D

Gross Block 66,645.73

Less: Depreciation 5923.62

Net Block 60,722.11

Capital Work in Progress 53,931.03

114,653.14

Investments E 49.00

Deferred Tax Assets 11,912.17


Current Assets F


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Sundry Debtors 5536.86

Cash & Bank Balances 736.40

23,666.05

Loans & Advances G 14,720.67

38,386.72

Less:

Current Liabilities & Provisions H

Current Liabilities 14,204.25

Provisions 785.89

14,990.14

Net Current Assets 23,396.58

Profit & Loss Account 27,676.78

TOTAL 177,687.67

Schedule As at

31st

march, 2008

(Rs in lakhs)

SOURCES OF FUNDS

Shareholders Funds


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Share Capital A 5.0

Loan Funds

Secured Loans B

Unsecured Loans C 8970.87

8970.87

TOTAL 8975.87


Fixed Assets D

Gross Block 2570.18

Less: Depreciation 454.00

Net Block 2116.18

Capital Work in Progress 1582.81

3698.99

Deferred Tax Assets 528.83


Current Assets E


Sundry Debtors 1,002.99

Cash & Bank Balances 342.28


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6,321.80

Loans & Advances F 658.91

6980.71

Less:

Current Liabilities & Provisions G

Current Liabilities 3,368.56

Provisions 42.78

3,411.34

Net Current Assets 3569.37

Profit & Loss Account 1178.68

TOTAL 8,975.87

anirban final project

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