A STUDY ON FINANCIAL STATEMENT ANALYSIS IN TENSILE PRO PIPES

MANUFACTURING INUDUSTRY AT TRICHY

CHAPTER-I

INTRODUCTION

Financial statements are formal record of the financial activities of a business, person
or other entity and provide an overview of a business or person’s financial condition in both
short and long term. They give an accurate picture of a company’s condition and operating
results in a condensed form. Financial statements are used as a management tool primarily by
company executive and investor’s in assessing the overall position and operating results of
the company.

Analysis and Interpretation of financial statements help in determining the liquidity

position, long term solvency, financial viability and profitability of a firm. Ratio analysis
shows whether the company is improving or deteriorating in past years. Moreover,
comparison of different aspects of all the firms can be done effectively with this. It helps the
clients to decide in which firm the risk is less or in which one they should invest so that
maximum benefit can be earned.

Industries are capital intensive; hence a lot of money is invested in it. So before
investing in companies one has to carefully study its financial condition and worthiness. An
attempt has been carried out in this project to analyze and interpret the financial statements of
a company.

Financial statements are records that provide an indication of the organization’s

financial status. It quantitatively describes the financial health of the company. It helps in the
evaluation of company’s prospects and risks for the purpose of making business decisions.
The objective of financial statements is to provide information about the financial position,
Statement and changes in financial position of an enterprise that is useful to a wide range of
users in making economic decisions. Financial statements should be understandable, relevant,
reliable and comparable.

They give an accurate picture of a company’s condition and operating results in a

condensed form. Reported assets, liabilities and equity are directly related to an
organization's financial position whereas reported income and expenses are directly related to
an organization's financial Statement. Analysis and interpretation of financial statements
helps in determining the liquidity position, long term solvency, financial viability,
profitability and soundness of a firm. There are four basic types of financial statements:
balance sheet, income statements, cash flow statements, and statements of retained earnings.

The analysis of financial statement is a process of evaluating the relationship between

component parts of financial statement to obtain a better understanding of firm financial
position. Analysis is a process of critically examining the accounting information given in
financial statements. For the purpose of analysis, individual items are studied; their
interrelationship with other related figures is established.

Thus analysis of financial statement refer to treatment of information contain in

financial statement in a way so as to afford a full diagnosis of the profitably and financial
position of the firm concern.

FINANCIAL STATEMENTS

Financial statements (or financial reports) are formal records of the financial activities
of a business, person, or other entity. Financial statements provide an overview of a business
or person's financial condition in both short and long term. All the relevant financial
information of a business enterprise, presented in a structured manner and in a form easy to
understand is called the financial statements.

The analysis of financial statement is a process of evaluating the relationship between

component parts of financial statement to obtain a better understanding of firm financial
position.

A complete set of financial statement comprises:

 A statement of financial position as at the end of the period:

 A statement of comprehensive income for the period;
 A statement of changes in equity for the period:
 A statement of cash flow for the period.
 Notes of Account comprising a summary of significant accounting policies and other
explanatory information.
THERE ARE FOUR BASIC FINANCIAL STATEMENTS:

1. Balance sheet:
It is also referred to as statement of financial position or condition, reports on a
company's assets, liabilities, and ownership equity as of a given point in time. The
Balance Sheet shows the health of a business from day one to the date on the
balance sheet.
2. Income statement
It is also referred to as Profit and Loss statement (or "P&L"), reports on a
company's income, expenses, and profits over a period of time. Profit & Loss
account provide information on the operation of the enterprise. These include sale
and the various expenses incurred during the processing state.
The income statement shows a presentation of the sales, the main expenses and
the resulting net income over the period. Net income is based on accounting
principles which gives guidance/rules on when to recognize revenues and
expenses, whereas cash from operating activities, obviously is cash based.
3. Statement of Retained Earnings:
It explains the changes in a company's retained earnings over the reporting period.
The statement of retained earnings shows the breakdown of retained earnings. Net
income for the year is added to the beginning of year balance, and dividends are
subtracted. This results in the end of year balance for retained earnings.
4. Cash Flow Statement
It reports on a company's cash flow activities; particularly it’s operating,
investing and financing activities. The statement of cash flows the ins and outs of
cash during the reporting period. The statement of cash flows takes aspects of the
income statement and balance sheet and kind of crams them together to show cash
sources and uses for the period.
FINANCIAL STATEMENT ANALYSIS:

Financial analysis is the process of examining a company’s Statement in the context

of its industry and economic environment in order to arrive at a decision or environment. For
this purpose, financial reports are one of the most important sources of information available
to a financial analyst. Furthermore, the analyst also uses information contained in the notes to
financial statements and supplementary information (such as management discussion). It is
important that an analyst have a strong understanding of each of these sources of information.

Financial Statement Analysis is a method of reviewing and analyzing a company’s

accounting reports (financial statements) in order to gauge its past, present or projected future
Statement. This process of reviewing the financial statements allows for better economic
decision making.

Globally, publicly listed companies are required by law to file their financial
statements with the relevant authorities. For example, publicly listed firms in America are
required to submit their financial statements to the Securities and Exchange Commission
(SEC). Firms are also obligated to provide their financial statements in the annual report that
they share with their stakeholders. As financial statements are prepared in order to meet
requirements, the second step in the process is to analyze them effectively so that future
profitability and cash flows can be forecasted.

Therefore, the main purpose of financial statement analysis is to utilize information

about the past Statement of the company in order to predict how it will fare in the future.
Another important purpose of the analysis of financial statements is to identify potential
problem areas and troubleshoot those.

FINANCIAL STATEMENT USERS

There are different users of financial statement analysis. These can be classified into
internal and external users. Internal users refer to the management of the company who
analyzes financial statements in order to make decisions related to the operations of the
company. On the other hand, external users do not necessarily belong to the company but still
hold some sort of financial interest. These include owners, investors, creditors, government,
employees, customers, and the general public. These users are elaborated on below:
1. Management

The managers of the company use their financial statement analysis to make
intelligent decisions about their Statement. For instance, they may gauge cost per distribution
channel, or how much cash they have left, from their accounting reports and make decisions
from these analysis results.

2. Owners

Small business owners need financial information from their operations to determine
whether the business is profitable. It helps in making decisions like whether to continue
operating the business, whether to improve business strategies or whether to give up on the
business altogether.

3. Investors

People who have purchased stock or shares in a company need financial information
to analyze the way the company is performing. They use financial statement analysis to
determine what to do with their investments in the company. So depending on how the
company is doing, they will hold onto their stock, sell it or buy more.

4. Creditors

Creditors are interested in knowing if a company will be able to honor its payments as
they become due. They use cash flow analysis of the company’s accounting records to
measure the company’s liquidity, or its ability to make short-term payments.

5. Government

Governing and regulating bodies of the state look at financial statement analysis to
determine how the economy is performing in general so they can plan their financial and
industrial policies. Tax authorities also analyze a company’s statements to calculate the tax
burden that the company has to pay.
6. Employees

Employees need to know if their employment is secure and if there is a possibility of a

pay raise. They want to be abreast of their company’s profitability and stability. Employees
may also be interested in knowing the company’s financial position to see whether there may
be plans for expansion and hence, career prospects for them

7. Customers

Customers need to know about the ability of the company to service its clients into the
future. The need to know about the company’s stability of operations is heightened if the
customer (i.e. a distributor or procurer of specialized products) is dependent wholly on the
company for its supplies.

8. General Public

Anyone in the general public, like students, analysts and researchers, may be
interested in using a company’s financial statement analysis. They may wish to evaluate the
effects of the firm on the environment, or the economy or even the local community. For
instance, if the company is running corporate social responsibility programs for improving
the community, the public may want to be aware of the future operations of the company.

METHODS OF FINANCIAL STATEMENT ANALYSIS

There are two main methods of analyzing financial statements: horizontal or trend
analysis, and vertical analysis. These are explained below along with the advantages and
disadvantages of each method.

HORIZONTAL ANALYSIS

Horizontal analysis is the comparison of financial information of a company with

historical financial information of the same company over a number of reporting periods. It
could also be based on the ratios derived from the financial information over the same time
span. The main purpose is to see if the numbers are high or low in comparison to past
records, which may be used to investigate any causes for concern. For example, certain
expenditures that are high currently, but were well under budget in previous years may cause
the management to investigate the cause for the rise in costs; it may be due to switching
suppliers or using better quality raw material.

This method of analysis is simply grouping together all information, sorting them by
time period: weeks, months or years. The numbers in each period can also be shown as a
percentage of the numbers expressed in the baseline (earliest/starting) year. The amount
given to the baseline year is usually 100%. This analysis is also called dynamic analysis or
trend analysis.

ADVANTAGES AND DISADVANTAGES OF HORIZONTAL ANALYSIS

When the analysis is conducted for all financial statements at the same time, the
complete impact of operational activities can be seen on the company’s financial condition
during the period under review. This is a clear advantage of using horizontal analysis as the
company can review its Statement in comparison to the previous periods and gauge how it’s
doing based on past results.

A disadvantage of horizontal analysis is that the aggregated information expressed in

the financial statements may have changed over time and therefore will cause variances to
creep up when account balances are compared across periods.

Horizontal analysis can also be used to misrepresent results. It can be manipulated to

show comparisons across periods which would make the results appear stellar for the
company. For instance, if the profits for this month are only compared with those of last
month, they may appear outstanding but that may not be the case if compared with the same
month the previous year. Using consistent comparison periods can address this problem.

VERTICAL ANALYSIS

Vertical analysis is conducted on financial statements for a single time period only.
Each item in the statement is shown as a base figure of another item in the statement, for a
given time period, usually for year. Typically, this analysis means that every item on an
income and loss statement is expressed as a percentage of gross sales, while every item on a
balance sheet is expressed as a percentage of total assets held by the firm.
 Vertical analysis is also called static analysis because it is carried out for a single time
period.

ADVANTAGES AND DISADVANTAGES OF VERTICAL ANALYSIS

Vertical analysis only requires financial statements for a single reporting period. It is
useful for inter-firm or inter-departmental comparisons of Statement as one can see relative
proportions of account balances, no matter the size of the business or department.

Because basic vertical analysis is constricted by using a single time period, it has the
disadvantage of losing out on comparison across different time periods to gauge Statement.
This can be addressed by using it in conjunction with timeline analysis, which shows what
changes have occurred in the financial accounts over time, such as a comparative analysis
over a three-year period. For instance, if the cost of sales comes out to be only 30 percent of
sales each year in the past, but this year the percentage comes out to be 45 percent, it would
be a cause for concern.

IMPORTANCE OF ANALYSIS OF FINANCIAL STATEMENT

Financial statement is prepared at a certain point of time according to established

convention. These statements are prepared to suit the requirement of the proprietor. For
measuring the financial soundness, efficiency, profitability and future prospects of the
concern, it is necessary to analyze the financial statement. Following purposes are served by
the Financial analysis: -

Help in Evaluating the operational efficiency of the Concern:- It is necessary to

analyze the financial statement for matching the total expenses incurred in manufacturing,
Advertising, selling and distribution of the finished goods and total financial expanses of the
current year comparing with the total expanses of the previous year and evaluate the
managerial efficiency of concern.

Help in Evaluating the short and long term financial position:- It is necessary to
analyze the financial statement for comparing the current assets and current liabilities to
evaluate the short term and long term financial soundness.
 Help in calculating the profitability:- It is necessary to analyze the financial statement
to know the gross profit and net profit.

Help in indicating the trend of achievements:- Analysis of financial statement helps

in comparing the Financial position of previous year and also compare various expenses,
purchases and sales growth, gross and net profit. Cost of goods sold, total value of assets and
liabilities can be compare easily with the help of Analysis of financial statement.

Forecasting, budgeting and deciding future line of action:-The potential growth of the
business can be predicts by the analysis of financial statement which helps in deciding future
line of action. Comparisons of actual performance with target show all the shortcomings.

OBJECTIVES OF THE STUDY

Financial statement is helpful in assessing the financial position and profitability of

the concern. Keeping in the view of accounting ratio the accountant should calculate the ratio
in appropriate form as early as possible for presentation for management for managerial
decisions.
Following are the main objectives of analysis of financial statements: -
 To evaluate the business in terms of profit in present and future.
 To evaluate the efficiency of various parts or department of the business.
 To evaluate the short term and long term solvency of business for distributing profit to
the trade creditor and debenture holders.
 To evaluate the chances of growth of business in the future by preparing budgets and
forecasting.
 To evaluate the operational efficiency of one firm with another firm by study the
comparative statements.
 To evaluate the financial and economical stability of the business.
 To evaluate the actual meaning and consequence of financial data.
 To evaluate the long-term liquidity of the fund of the business.
COMPANY PROFILE & INDUSTRY PROFILE

COMPANY PROFILE

As India’s leading manufacturer of energy efficient submersible pumps, we are

well-known in our industry. We create our products for a number of sectors including
agricultural, industrial, domestic and horticultural. The industry Founder: H.
Narendrasamy, Managing Director: N.Prabhakaran

However, this wasn’t always the case. Since our humble beginnings back in
1992, we have worked hard to get to where we are today and have had to embrace every
opportunity that has come our way. Luckily, a combination of passion, grit and
determination signifies that our business has not only grown, it has truly flourished.
And now, we are proud to be able to say that we have achieved our number one goal –
to be the very best at what we do. The company working employees in 180,

Submersible pumps might not be everyone’s idea of excitement, but for us they
are just that. In 1992 we decided we wanted Tensile Pro Pipesto become an
internationally-known name in the manufacture of stainless steel submersible pumps
and motors. And do you know what? We did it. More recently, we have also branched
out into SIVA -powered pumps and we’re enjoying watching that part of the business
grow too.

Here at Tensile Pro Pipes we pride ourselves in being seen as pioneers in the
manufacture of 100% submersible stainless steel pumps and motors. Competition in this
field is fierce and we are competing against a number of globally-renowned businesses.
However, it is our use of high-tech processes and innovative designs, all the hallmarks
of Siva pumps, which has set us apart from the rest. It is both our forward-thinking
ethos and attention to detail that has helped us work our way up to become world class.

Being in this position – a global pioneer of such innovative technology – means

that Tensile Pro Pipesis able to focus on the things that really matter; that is producing
the highest quality, most energy efficient pumps possible. In fact, the Bureau of Energy
Efficiency (BEE) has awarded Tensile Pro Pipes with 5-SIVA ratings for more than 260
of our pump models. Not bad going, if we do say so ourselves!

Our pumps are not only energy efficient, but also long-lasting and very easy to
maintain
 Because we have been able to put quality hand-in-hand with energy efficiency
Tensile Pro Pipes is at the forefront of the global pump industry. In short, we are able to
offer our customers some of the best pumping solutions available in the world today

MISSION
 Tensile pro pipes industry’s current line of products, services and systems are
submersible, mono block and domestic pumps and motors for handling liquids,
particularly water for agriculture, domestic and industrial uses and other
applications like sewerage and sludge And Others.
 Tensile Pro Pipes industry is committed to achieve growth and aims for a 15%
annual compounded increase in sales turnover and remain financially sound.
 Tensile Pro Pipes industry has its own state of the art foundry and intends to
continuously modernize manufacturing facilities to make it as one of the best in
the world.
 Tensile Pro Pipes industry serves customers in agriculture, domestic and
industrial segments and has plans to expand product range to cover
infrastructure and marine segments.
 Tensile Pro Pipes industry has wide market presence in India. It further intends
to cover 80 % of potential markets and develop markets in untapped territories
and territories where its presence is weak ’.
 The company has products are exported to over 80 countries and has plans to
develop export market further. The company has intends to build brand image
further, as a quality supplier of products and services.
 Provide superior customer value and become one of the best customer value
providers in the country. The company has proposes to benchmark its products,
services and systems with best in class Company in India.
 The company has believes in ethical practices and is conscious of its
responsibility towards society and government. SPI believes that human
resource is an asset. It shall constantly endeavor to develop human resources,
simultaneously optimizing interests of all stake holders.
VISION
 The company wants to be within first five companies in the country in its
current line of business and proposes to expand its scope to cover other liquid
handling products, services and systems.
 The company aims to provide higher customer value and wants to become one
of the best customer value providers in similar industry in the country.
 The company would optimize satisfaction for all its stake holders and also
practice best organizational values

GOALS

In the long term the goal is to provide farmers in developing countries with
access to this technology so that they can increase their income and at the same time
increase food production.

The Tensile Pro Pipes is presently marketed in Kenya and field tested in
Ethiopia, Nepal, Honduras, Zambia and Burkina Faso. The field test experiences will be
fed back into the design to improve the product.

ACTIVITIES

 Refine the design

 Supervise the production in India
 Follow up on the field trials in Ethiopia, Nepal, Honduras, Zambia and Burkina
Faso.

BUDGET

 Liberty foundation: three grants with a total value of €101.000 have supported
the design phase of the Tensile Pro Pipes pump and the elaboration of a business
plan to introduce this pump on the Ethiopian market.
 IDE Powering Agriculture grant, €100.000 for 2014 and €50.000 for 2015.
  Powering Agriculture II, through Future pump UK a further €70.000 is expected
over the period 2016-2018.

INDUSTRY PROFILE

INTRODUCTION TO THE ORGANIZATION

The Tensile Pro Pipes has been developed to provide smallholder farmers with
an affordable and sustainable way to bring water to their fields. The Tensile Pro Pipes
panel captures the sunlight and converts it into electricity which drives the pump. The
pump comes in a suction version (up to 7m) and a deepest version up to 20m.
The capacity on a clear day is maximum 13 m3/day when lifting from 4m and 4
m3/day when lifting from 20m. The capacity can be increased by adding a second
Tensile Pro Pipes panel. Assuming a crop requirement of 5l/m2.day, this capacity is
enough to serve a field of 2500 m2 and 800 m2 respectively. Future pump ltd(UK) is
the company that manufactures and markets the pump with technical support from
PRACTICA.

A Tensile Pro Pipes has been developed and tested that is affordable,
economically viable and suits the needs of smallholder farmers in developing countries.
The pump is currently produced by Future pump India ltd at a rate of 100 pumps per
month. The intention is to ramp up production to 10.000 units per year by 2017. Please
contact Future pump Ltd for distribution enquiries.

The Mangalore Electricity Supply Company (Mescom) may initiate a project to

install Tensile Pro Pipes sets used by farmers.

As an initial step, one pump set will be introduced in Kanchinadka area and if it
yields result, the project may be upgraded to supply potable water to people in
Padubidri. Each Tensile Pro Pipesset costs Rs 7.5 lakh and some fear that the farmers
may find it costly.

The response to siva mission has not been very encouraging in Karnataka. A
Mescom official was quoted by the media saying that the company is planning to
introduce Tensile Pro Pipes pump-sets for irrigation in the coming days. There should
be good support from the government by providing subsidies and loan facilities to
farmers to buy these pump sets, Umesh Nayak, a farmer in Padubidri, said.

PV water system to solve problems of agricultural water conservancy and desert

control

With agricultural farmland decrease, the desert area continues to expand, the
extreme arid climate impact on food production, solving water supply has become the
root of problem of agriculture.

Compared with the traditional diesel pump and electric pump irrigation, Tensile
Pro Pipes pump has great advantage. It will become the main way of agricultural
irrigation in the future, has a wide application prospect.

WHAT A TENSILE PRO PIPES WATER PUMPING SYSTEM IS

A Tensile Pro Pipes water pumping system mainly consists of array, water
pump inverter and 3 phase AC pump, easy for use. In order to reduce the construction
and operation cost, to improve the reliability of the system, the system rejects storage
battery which could cause serious pollution to environment, storing water instead of
electricity, reduces the construction cost and maintenance cost.

Who we are

Shenzhen Tensile Pro Pipestech Renewable Energy Co.,Ltd is a professional

Tensile Pro Pipes pumping system and Tensile Pro Pipesgrid-connected system
manufacturer, handling R&D, production as well as sales. Dr. Xuzhen, our CTO (chief
technology officer), helped the government to design and create a Tensile Pro
Pipeswater pumping system for highway desertification protection in Hade district of
Xinjiang province in 2001. The system has been running steadily more than 10 years
already. The successful experience has proved that our system can completely meet the
requirements of forest creating along the highway in the desert, but without any
pollution

What we have done

Project 1

Project Location: Bangladesh

Project Name: PS5500 Tensile Pro Pipeswater pumping system for farmland irrigation

Solution: The system utilizes 8.9KW PV panel to power a 5.5KW AC submersible

pump with a Siva Pumpstech 7.5KW Tensile Pro Pipespump inverter for control and
conversion. The pump draws water from 10 meters underground, and water flow
reaches 800-1000m3 per day.

Economy Benefit: The system generates 16020 kWh of power every year. During its
25-year lifespan, the system will save coal 150.6 tons; reduce carbon emission 66.3
tons, sulfur dioxide3 tons, dust 2.3 tons and lime ash 39.2 tons.

Project 2
Project Location: Changjiang City, Hainan Province, China

Project Name: PS5500 Tensile Pro Pipes Pumping System for Farmland Irrigation

Project Introduction:

Yangliu village is located in Changjiang City, Hainan Province, and with

482241M2 plough area. Farmers rely on electricity for irrigation until now. Melons,
vegetables and peanuts are the main crops there. In 2010, Hainan government highly
appreciated and advocates green and low carbon agriculture, mainly on irrigation water
conservation. Therefore, the first set of Tensile Pro Pipes irrigation system is installed.

Solution:

Tensile Pro Pipes pumping system consists of a Tensile Pro Pipes array,
Tensile Pro Pipes pumping inverter and a three-phase AC pump. The Tensile Pro Pipes
array is composed of many Tensile Pro Pipes cells panels connected in series and in
parallel, converting irradiation from sunlight to electrical energy. The pumping inverter
controls and regulates pumping operation and converts DC to drive AC pumps. The AC
pump is driven by a 3-phase induction motor, draws water from well, rivers or lakes,
stores in tank or uses for irrigation directly. Utilizing Tensile Pro Pipes PS5500 Tensile
Pro Pipes pumping system, The pump draws water from 15 meters underground. Daily
water output of the system is up to 360M3.

Economy Benefit:

The system generates 15330 kWh electricity annually. In its 25-year long
application, the system is able to save standard coal up to 144 tons, reduce emission of
carbon dioxide, sulfur dioxide, soot and ash by 63 tons, 2.8tons, 2.16 tons and 37.44
tons respectively. This system was driven by Tensile Pro Pipes energy and works
automatically. It is environmental friendly to Hainan Island. “Low-Carbon Agriculture
for Islands” is the first in the world, SIVA ted from Hainan Island. The application sets
a new ground for low-carbon economy.

INTRODUCTION TO THE INDUSTRY

INDIAN PUMPS INDUSTRY

Indian Pump Industry has more than 500 manufacturers with worker strength of
over 30,000 producing 1 million pumps valued at Rs.12 billion. During the period
1978-94 pump industry has maintained an average growth of 15% p.a. The pump
manufacturers are able to meet 84% of the domestic market demand and export pumps
worth Rs.2 billion in 1997-98. It services all sectors of the Indian Industry viz.
Agriculture, Public Health Engineering, Water supply, Chemical and process industries,
Refinery and Petrochemical, Paper, Steel, Mining, Power Generation, Food Processing
pharmaceutical, Sewage and Effluent treatment etc.

Pumps account for 30% of the power consumption in the country. Thus,
efficient operation of pump system can yield substantial savings. The industrial Pump-
motor system is a major determinant of cost of production in the industry by way of
capital investment and running cost. Not only the pump and drive selected for optimal
performance, but pump-motor system as a whole should be efficient and reliable and
reliable.

The company has therefore, commissioned Techno-market survey on industrial

pumps and motor systems. Selection of pump-motor system would differ from one
industry to another due to changes in application parameters, process parameters and
liquid characteristics. Hence, it will not be practical to cover all industries in a single
study. In this study Municipal Wastewater Treatment industry is taken as the focus
industry.

Different pump technologies are available for transporting liquids under

different operating conditions in the industry. The centrifugal pump technology, which
works on a simple principle cover 85% of industrial applications. The high velocity
head imparted to the liquid by rotation of impeller is converted into pressure due to
increasing passage area of the volute.
End suction pump:

Made in both horizontal as well as vertical execution, this type of pumps have
advantage of being simple, low cost and compact and is generally the first choice of
designer. Such pumps are manufactured to ISO:2858 for application in chemical and
process industry and for refinery service pumps are made as per API 610 specifications.

Self-Priming Centrifugal Pumps:

Pump casing is of unique design. Liquid is retained in it, which at the time of
works as the intake for the impeller and pump is primed. The pump is used for dirty
water, emptying pits and employed in situation where suction lift conditions are there. It
has the advantage of avoiding foot valves – often a source of problems. Pumps fitted
with open impeller are used in mining and construction industry and de-watering duty.
The disadvantage is its higher cost and lower efficiency.

Split Casing Pumps:

The Pump body is split in two half along the upper half of the body to be
removed for carrying out maintenance to the rotating parts without disturbing suction or
discharge line. The pump has distinct advantage of ease of maintenance and is used for
water supply services (for fire fighting, cooling water, raw water, cooling tower
supply), mine de-watering and as bilge and ballast pump.

Multi-Stage Centrifugal Pump:

In this pump, series of impellers are mounted on a common shaft. The liquid
moves from one impeller to another with a volute or diffuser following each impeller
such that the head increases progressively. The pump may be split axially or radically
and has 2 to 15 stages. Pumps are used for pumping mine water from mine to surface
level, boiler feed duty, high pressure booster systems, reverse osmosis etc.

Slurry Pump:

This pump handles solids suspended in liquid in slurry form. The major concern
in pumping slurry is the abrasive wear of pump components exposed to the liquid.
Selection of best material for pump components to resist wear or to be isolate from the
abrasive media is vital. Rubber-lined or hard metal End-suction pump are used. Pumps
are deployed to handle mine slurries, fly ash slurry, mill scale, sand and gravel slurry,
ceramic slurry etc.

Vertical Column Sump Pump:

It is an end-suction pump in vertical orientation with the impeller submerged

below the liquid. Such pumps are inexpensive as compared to self-priming pumps and
simple to operate and maintain with added advantage of not requiring a mechanical
seal. It is used to pump out variety of waste liquids from underground pits/sumps in
different industries.

Vertical Turbine Pump:

This is a multi stage pump in vertical execution in which the motor is installed at
the surface level while the pump is located inside the liquid. The diffuser bowls are
located in line with the impeller rather than outside of them as is the case in horizontal
multi stage pump. The pump is used to handle large volume of raw water in drinking
water and irrigation schemes, raw water intake in Thermal power plants, paper plants
and fertilizer plants.

Positive displacement pumps have a positive sealing line formed between the pump
elements and the liquid is displaced along this sealing line by movement of the pumping
element. The pumping element may have reciprocating or radial motion. Different
pumps working on this principle are;

Plunger / Piston Pump:

Plunger or Piston reciprocates inside a cylindrical liner to displace liquid from

suction to discharge port. Piston pumps may be single acting or double acting. Pump
with single piston is called Simplex; with Two pistons – Duplex and with three pistons
– Triplex. In Plunger pump, the reciprocating member is plunger but it is single acting
only.
 Such pumps are used for metering services and high-pressure application.
Variation of output is achieved by adjusting the stroke length of the pump. High-
pressure piston pump is used in oil producing sector, construction industry and cleaning
application. Large pressure pulsation necessitates use of pulsation dampener.

Diaphragm Pump:

The back and forth flexing of a diaphragm causes the liquid to flow into and out
of the pump. The diaphragm may be moved mechanically or may be actuated by
compressed air or hydraulic fluid. Check valves are provided at inlet and outlet port.
These pumps are self-priming, seal-less, can run ‘dry’, and handle solids with liquids.
Mechanically actuated Pumps are used for metering service, having accuracy of +/- 1%.
Air operated diaphragm pump are used to handle sewage, slurries and other corrosive
liquids. Pump produces pressure pulsation requiring use of dampener and has lower
efficiency.

Eccentric Screw Pumps:

A single-helix metallic rotor rotates inside double helix polymer stator. The
rotor forms sealing line along its pitch length and liquid is carried in the cavity between
the stator and the rotor. Pump can handle solids and viscous or sticky liquids. It has a
gentle pumping action and has no valves that may get jammed. It is used to handle a
variety of viscous liquids and abrasive slurries. The pump should not be run ‘dry’.

Twin Screw Pumps:

Two screws intermesh with each other and rotate inside a pump casing. The
liquid is transported between flank of the screw and the pump casing. The pump is used
to handle the different fuel oils and other viscous liquids but cannot handle suspended
oils. Its capability to run in ‘dry’ condition makes it ideal for unloading service.

Triple Screw Pump:

 This pump has a central screw driven by the prime mover while the other 2
screws are run by the center screw. Pumping action is similar to Twin screw pump.
These pumps have higher efficiency and high pressure developing capability with added
advantage of being compact. It is used for boiler fuel feeding application; power source
for hydraulic lifts and in centralized lubrication system in large steel mills. The
limitation of the pump is its incapability to handle solids and it cannot run ‘dry’.

Sliding Vane Pump:

Vanes slide in the slots cut length wise in rotor and the rotor is inside an
eccentrically shaped casing, which acts like a cam. Pumps are self-priming, of simple
construction and have feature of self-compensation for wear on the vanes. Pumps are
employed for handling oil in lubrication service or as power packs for low pressure
hydraulic motors. Pumps are unable to handle suspended solids, corrosive liquids and
highly viscose media.

Gear Pump:

The Gear Pump has two meshing gears rotating inside a casing. Liquid is carried
between gear teeth and the casing and displaced as the teeth mesh. The pump is,
economical, pulsation free and quiet in operation. External as well as Internal gear
configurations are possible. Pumps are used for handling LDO, lube oil, fuel oil, paints,
viscose and other clean viscous liquids. Pump cannot handle suspended solids and
cannot run dry.

Lobe Pump:

Pump has one or more lobes that rotate at slow speed inside the casing to
displace the liquid. The wide spaces between the lobes and the slow speed make it ideal
for handling fragile solids and shear-sensitive liquids. Pump output is subject to
pressure pulsation and high amount of slip with low viscosity liquids. Pumps are
employed to handle food products and pharmaceutical formulations.

Archimedean screw Pumps:

This pump has an inclined screw conveyor shaft rotating within a close fitting
open type cylindrical conduit. The helical screw blades force the liquid along the
inclined conduit. These pumps are used in sewage treatment industry for transfer of
sludge.

Peristaltic Pump:

It has roller or cam attached to rotor, which squeezes the tube as it passes across
it, drawing the liquid in the tube and delivering it to the discharge side. The pump is
seal-less and rotating element is not exposed to the liquid. Pump is used where high
order of cleanliness and hygiene is essential; like pumping of human blood/plasma,
other medical and bio-medical applications.

The capacity and pressure range as well as material options of different types of
pumps described above is summarized in Annexure I. Table 5.3 & 5.4 compare total
lifetime cost of different pumps for two typical applications in Sewage treatment
industry.

Presently, the Indian market for centrifugal pump for industrial application is
estimated to be Rs.65 million growing at a annual rate of 8%. The awareness level
amongst user industries regarding application of positive displacement pump is lower as
compared to centrifugal pump technology. This is also depicted by the fact that in India
share of positive displacement pump in the domestic market is approximately 10%
which in international market is approximately 20%. Market for positive displacement
pump in India is valued at Rs.1.2 million. Piston / Plunger Pump has the largest share in
this market followed by Screw pumps and Gear pumps.

While there are different pump technologies from which the plant designer has
to select the pump, it is very important that correct selection is done for the type of
pump, material of construction, shaft sealing and size of pump.

There are various parameters which influence pump selection.

Application Parameters

 Capacity
 Pressure
 Temperature
  Suction conditions or NPSHA
 Point of installation of pump

Liquid Parameters

 Chemical characteristics
 Specific Gravity
 Suspended solids and abrasion due to nature and size of solids
 Viscosity and flow characteristics.

Process Parameters

o Hygienic duty
o Inline cleaning
o Gentle handling of sheer sensitive liquid
o Maintenance in place

Preliminary step for selecting a pump with estimation of capacity and

differential head. Depending upon application, liquid and process parameters described
above, type of pump is selected. This requires matching of different operating
parameters with pump characteristics. Table 3.1 indicates type of pump to be used for
commonly encountered liquids in different industries.

Having decided the type of pump to be used, pump sizing is done. Usually,
pump manufacturer does the Pump sizing from the sizes available in his production
programme. For centrifugal pump, care is taken to select a pump size in which the duty
point is close to the best efficiency point of the pump.

For positive displacement pump, the limitation on pump speed is considered

based on parameters of viscosity, abrasion or NPSHA. The pump size, which gives the
desired capacity within the above speed limit, is selected.

In both, Centrifugal as well as Positive displacement pump, the material of

construction is determined by the chemical and abrasion characteristics of the liquid
being handled at the pumping temperature. Appendix 1 lists variety of liquids and
suitable material of construction options. Shaft sealing option is finalized in
consultation with Packing / Seal manufacturer considering above factors.

AC induction motors are the most widely used prime mover for industrial
pumps. AC induction motors of different construction and mounting configuration are
available. The motors can be foot, flange or wall mounted. Different motor enclosures
are:

 Drip proof motor

 Explosion proof motor
 Flame proof motor
 Vertical motor
 Two speed motor

Submersible motor

It is important that motor is selected in a proper manner for long life

and efficient operation. Different parameters which are important for selection of motor
are:

 Power required by the pump

 Pump speed
 Nature of SIVA ting (Closed Valve / Open Valve)
 Work condition like voltage and frequency of AC supply, presence of vapour /
gas chemicals where motor is to be installed.
 Efficiency
 Temperature

Presently, selection of motor for driving the pumps is carried out with
involvement of consultation 15% of cases pertaining to new projects. In 45% of cases,
pump set complete with motor is procured from pump manufacturers while the balance
purchases involve procurement of motor by the user organizations.

Indian manufacturers are producing motors of all types, which are comparable
to those in the international market. Abroad, development of high efficiency motors has
helped reduce energy losses in the motor. Energy efficient motors cost 15% to 30%
higher than comparable standard motors but depending upon the application, the higher
initial cost can be recovered by savings in the cost of energy.

Variable speed drive is used for pump having variation in discharge rate and
provides power saving. Different types of variable speed drives are available, viz. Pulse
Width Modulated inverter, Eddy current or slip coupling drive, Switched Reluctance
Drive etc. Variable frequency drives are proven to be advantageous due to their higher
efficiency, capability to integrate with drive control software.

Variable speed drive can regulate pump flow by consuming lesser energy in
comparison to conventional method of using throttling valve on Pump discharge line.
Savings in Power cost due to energy conservation by use of Variable speed drives can
pay back the additional investment in cost of drive in a short span of time.

Installation of variable speed drive requires that the site is well ventilated, free
from corrosive fumes and radio frequency interference. Multiple pumps can be run by
operating a single drive or individual drive with each pump can be installed.

In India, use of variable speed drive with pumps is limited at present due to:

 High cost of variable frequency drive

 Misconception among engineers that such drives are sophisticated equipment
requiring trained personnel for installation and operation
 Poor energy conservation efforts and
 Ignoring possible opportunity of power conservation in pumps of lower HP
rating.

Abroad, favorable experience of variable speed drive for power conservation in

high HP equipment has led to development of micro drives. These are low cost drives
for lower power rating pumps.

The pump and motor have to be matched for optimal performance. The torque-
speed characteristics of the motor and pump should be matched to ensure availability of
as well as running torque for the pump. The moment of inertia for the pump motor
system has to be considered to determine the acceleration time for the motor to attain
full speed. The torque of the motor is influenced by method adopted to the motor
provides higher toque in comparison to star to delta.

The pump and motor are connected through flexible coupling which transmits
the power. The coupling while transmitting power, takes the load of axial misalignment.
Different types of flexible couplings available in India include tyre type coupling, pin
and bush coupling, gear type coupling, spider coupling, spacer coupling etc.

Certain pumps are complete with motor like Submersible Pumps. The pump is
close coupled with a motor, which is designed to operate while submerged in the liquid
to be pumped. The motor is filled with oil and separated from the pumped liquid by a
mechanical seal. This motor may be coupled to multi stage centrifugal pump or non-
clog centrifugal pump for handling raw water, drinking water or sewage / effluents
respectively.

The shaft sealing is often a cause of concern to plant designers particularly when
the liquid being handled is highly obnoxious / toxic or hazardous. Seal-less pumps have
been developed to cater to the requirement of this market segment.

There are two types.

Magnetic Drive Pump:

The mechanically driven pump has no physical coupling provided between

pump shaft and the drive motor. Instead, a magnetic drives is used. The impeller of the
pump is supported on plain bearing inside the isolation shell which also houses the
inner rotor or flux receiving ring. Outside the isolation shell, an outer magnetic ring is
rotated by the prime mover. Magnetic flux passes through the air gap in isolation shell
to the inner rotor which follows the rotation of the outer rotor.

Canned Motor Pump:

Pump and motor is an integral construction and there is no shaft seal. The pump
section is identical to a conventional centrifugal pump. The motir is a 2 or 4 pole
induction motor having stator and rotor canned within corrosion resistant non-magnetic
liner and sleeve. The entire outside of the motor is enclosed in a secondary leakage
containment shell. Primary protection is provided by corrosion resistant liners which are
seam welded and assure that pumped liqued does not contact stator windings.

Seal-less pumps are used in nuclear power plants, refrigerant pumping, high
temperature liquid handling, pumping of hazardous chemicals.

Consultants and pump manufacturers perceive that 28% of users can effectively
and independently select pump. Related to operation and maintenance of pump-motor
system, the percentage of users in similar category is much higher (71% and 90%).
Consultants have elaborate vender registration and evaluation procedure. In the bid
evaluation process, different technical parameters are compared by Consultants. Some
of the consultants apply price loading for higher power consumption to lay emphasis on
pump-motor system efficiency and equate pumps having higher running cost with those
having lower running cost. However for spares consumption, no such equalization
procedure is presently being adopted for bid evaluation.

The performance of pump-motor system in the Indian industry is influenced

by a number of parameters related to application aspects, operational aspects,
maintenance aspects and other aspects as follows:

Application Aspects

o Selection based on insufficient data

o Inadequate data on duty condition with user.
o Actual duty parameters differing from design duty point due to safety
margins built in.
o Selection of pump/Motor by Stockiest or dealer.
o Mismatch of Pump and drive characteristic.
o User voluntarily decides on a cheaper pump compromising operational
efficiency and service life.

Operational Aspects
 o Improper installation of Pump-Motor system.
o Misuse / abuse of pump by user due to exigencies or ignorance
o Violation of instructions, DO’S and DON’T’S by user due to ignorance
or insufficient training.
o Absence of Pump-motor performance Monitoring System.
o Absence of Failure analysis system.

Maintenance Aspects

o Inefficient preventive maintenance

o Improper gland tightening
o Use of spurious spares
o Inadequate training for Maintenance of Pumps – more in case of Positive
displacement pumps
o Predictive techniques like Vibration analysis not used.

Other Aspects

o Procurement of Pump-Motor system on initial cost basis.

o No validation of quoted pump performance parameters prior to its
delivery and installation
o Poor awareness of energy costs and energy conservation measures at
lower levels in the organization.

The above practices need to be corrected to optimise performance of pump-motor

system.

 Are invariably involved for detailed engineering and selection of pump-motor

system.
 In foreign countries, the trend is towards use of submersible pumps for sewage
handling.
  There is significant variation in volume of inflow of wastewater. In India, this
variation is taken care of by operating one or more pumps depending on the
volume of liquid to be handled. The trend abroad is to use pumps with variable
speed drive resulting in substantial power saving.
 There is no monitoring and measurement of performance of pump motor system
after commissioning of sewage treatment plant in India. Abroad, sophisticated
systems connected through modern to centralised computer are used to monitor
the efficiency of pump-motor system and generate important data.
 Use of non-clog centrifugal pumps, require construction of dry well for pump
installation involving sizeable construction cost. Use of Submersible pump
technology can eliminate this cost & offer additional advantage of lower
maintenance, easy installation and accessibility of pump.
 The pump-motor system consumes significant part of the total power employed
for running sewage treatment plant.
Specific to sewage handling, different design modifications are carried out to
major components like casing, impeller, wear plates and rings, shaft and bearing
assemblies etc. Further, the material of construction for sewage pump is selected in a
manner to provide longer useful life and reliability. Pumping of sludge in sewage
treatment plant, pose challenge due to varying flow characteristics of the sludge.
Digested sludge exhibit poor flow characteristics and pump losses are much higher.
Plunger and progressive cavity pumps are used for dense sludge. For dosing of
flocculent and other chemicals for chemical treatment of the effluent, Piston or
Diaphragm pumps are employed.

Technology development in Indian pump industry has taken place by way of

technical collaboration with foreign manufacturers or through reverse engineering
practices to produce pumps benchmarked against available products in the market of
Indian or foreign origin. Indian pump industry is able to meet pump requirements of
95% of applications. The manufacturing capability includes pump of very high capacity
and in variety of materials.

However, there is still room for improvement. The response of consultant and
pump users rate imported pump better than Indian product on various counts like
proven design, wider material options, better finish, better interchangeability,
compliance to ISO 9000 quality assurance system and R&D back up. Further, the
foreign manufacturers have extensive data base built over a long period of operation in
the world market and supplemented by in-house trials.

RECOMMENDATIONS, ACTION PLAN AND IMPLEMENTATION

Pump manufacturers should focus on application of new materials for

manufacturing Pumps with better performance, in terms of efficiency as well as
reliability. In the international market, variety of high performance alloys and Non-
metallic pumps are offered. For corrosive duties, Plastic materials and for abrasive
liquids, Ceramic coating or pumps in ceramic construction have proved successful.

Pump manufacturers in co-ordination with Regional Research Laboratories /

Defence Laboratories / Material Science Laboratories for developing pumps in non-
conventional materials.

Gear Pumps manufacturers should develop High precision Spinning pump,

which are being imported at present and are required in large nos. by Man Made Fibre
Industry Apart from design, manufacturers to focus on manufacturing aspects to
achieve close tolerances for high metering accuracy.

Gear Pump Manufacturers to work on this development and take assistance for
machining from Tool rooms established with German collaborations.

Use of submersible pumps in sewage industry should be increased. This

decision can be taken where new pumping stations are being planned or replacement of
existing pumps is contemplated.
Sewage Board/Municipal Corporation – Drainage/Sewage Treatment Department

Peristaltic Pump is not manufactured in India. Although manufacturing of this

type of pump is not tricky, the material of hose or tube has to be such that it can
withstand repetitive cyclic stresses for long service life. In long-term perspective,
efforts to develop this pump should be directed towards solving this problem. In the
short run, import of tube and manufacture of other components to produce it in India
can be initiated.

Pump manufacturer or other industrialist can venture into production based on

feasibility study.

Awareness of applicability of Positive Displacement pumps has been found to

be low due to which centrifugal pump is preferred by users. Most positive displacement
pump manufacturers in the country are small/medium scale units. Joint efforts should be
undertaken by them to increase awareness as well as train users for their product range.
Application Engineering support provided to users by some manufacturers like Roto
Pumps Ltd., has received good response and helped in increased usage of Positive
displacement pump.

Manufacturers of Positive Displacement Pumps to plan promotional measures and

provide application engineering assistance.

Positive displacement pumps are manufactured and tested as per proprietary

standards. Some of the consultants conduct testing of pumps as per API 676.
Comprehensive standards & guidelines for PD Pumps should be published.

Presently Magnetic Drive pumps are available indigenously through one or two
manufacturers only. These manufacturers have collaboration with foreign
manufacturers. This technology holds promise in future and indigenous capability
should be built in this field. At first, pumps operating at normal temperatures may be
developed by utilising experience of eddy current drive manufacturers.

Canned Motor pumps are being manufactured in the country by only one
manufacturer at present. More manufacturers should enter this field. Since cost and time
required for development of technology would be high, route of technical collaboration
with foreign manufacturers may be explored.
 Development of high efficiency motors should be undertaken by Indian motor
industry. For development of better grade of steel for stampings to reduce losses, help
from material research laboratories and steel industry can be taken.

The user industries should re-evaluate the duty parameters for pumps installed in
their plant. In a big process plant, such an exercise will be costly as well as time
consuming. It is suggested that based on annual power consumption of the Pumps,
an ABC analysis may be applied. Top 10% of Pumps (by number), that consume
maximum power on annual basis, should be taken up in the first phase for energy
conservation exercise. Wherever feasible, pump and motor should be modified to
operate close to their best efficiency point.

User Industries to undertake such exercise in association with Pump

manufacturers to optimise performance of existing Pump-Motor systems.

Awareness regarding incorporation of Variable speed drive with Pump should

be accelerated. Suitable duty concessions to reduce price of Variable speed drives may
be considered. Pumping applications, where variations in load characteristic are known
to occur should be identified. All new procurements of pump for such applications
should include variable speed drives. Wherever, Pumps for such applications are
operating with fixed speed motors, a time bound plan for incorporating the variable
speed drive has to be drawn up.

Variable speed drive manufacturers to take the lead for canvassing use of VSD.
User Industries to undertake the exercise in association with Pump manufacturers to
identify potential applications for using variable speed drive. Govt. of India to consider
duty concessions for Variable speed drive manufacturers.

User industry should adopt predictive techniques like vibration anlaysis for pre-
empting pump-motor system breakdown. Further, use of spurious spares should be
avoided to achieve better efficiency and higher service life of Pump-Motor system.
Maintenance wing of user industries should undertake this exercise.

Presently the procurement procedure of many users lays emphasis on purchase

price. Appropriate weight age for technological factors should be incorporated for
technological factors should be incorporated. Total Life Cycle criteria should be used
for bid evaluation so that Pump-Motor efficiency, Spares consumption, reliability etc.
of different makes of pumps are properly assessed and compared.

USER INDUSTRIES AND CONSULTANTS TO MODIFY EXISTING BID

EVALUATION PROCESS.

Government of India has made it mandatory for Limited companies to declare

Energy conservation measures undertaken by the company in their annual financial
statements. This has put Energy conservation measures in the agenda of top
management level. However, it has to pervade down to all levels.

Lastly, the Pump industry has to change the old mindset of focussing on domestic
market only. Many investments that may not look lucrative enough in Indian context
may be rewarding on International scale. Larger quantities in World market can help
reduce costs due to economies of scale for Plastic pumps. Exposure of operating in
world market will lead to benchmarking with competing products resulting in design
and quality improvements.
ORGANIZATIONAL CHART
 CHAPTER II

REVIEW OF LITERATURE

FINANCIAL ACCOUNTING:

Financial accounting is the process of systematic recording of the business transactions in the
various books of accounts maintained by the organization with the ultimate intention of
preparing the financial statement there from. These financial statements are basically in two
forms. One, profitability statement which indicates the result of operations carried out by the
organization during a given period of time and second balance sheet which indicates the state
of affairs of the organization at any given point of time in terms of its assets and liabilities.

 Main purpose of financial accounting is to ascertain profit or loss and to indicate

financial position of an enterprise.
 Two fundamental statements of financial accounting are income and expenditure
statement and balance sheet.
 The profit and loss account or income and expenditure account is prepared for a
particular period to find out the profitability of the firm and balance sheet is prepared
on a particular date to determine the financial position of the firm.
 Financial accounting summaries transactions taking place during a period with the
objective of preparing the financial statement.

FINANCIAL STATEMENT ANALYSIS

Financial Statement analysis is the process of identifying the financial strengths and
weaknesses of the firm by properly establishing the relationship between the items of balance
sheet and profit and loss account.

It also helps in short-term and long-term forecasting and growth can be identified
with the help of financial Statement analysis.
 The dictionary meaning of ‘analysis’ is to resolve or separate a thing in to its element
or components parts for tracing their relation to the things as whole and to each other.

FINANCIAL STATEMENTS

‘FINANCIAL STATEMENT’ refers to formal ad original statements prepared by a

business concern to disclose its financial information

According to John. N.Meyer, “The financial statement provides summary of accounts

of a business enterprise, the balance sheet reflecting assets, liabilities and capital as on a
certain date and the income statement showing the result of operation during a certain period”

The financial statements are prepared with a view to depict the financial position of
the concern. They are based on the recorded facts and are usually expressed in monetary
terms. The financial statement are prepared periodically that is generally for the accounting
period

The term financial statement has been widely used to represent two statements prepared
by accountants at the end of specific period. They are :

 Profit and loss a/c or income statement

 Balance sheet or statement of financial position

LIMITATION OF FINANCIAL STATEMENT:

 Information shown in financial statement is not precise since it is based on practical

experience and the conventions and rules developed therefore
 Financial statements do not always disclose the correct financial position of the
business concern as they are influenced by the personal opinions, judgement,
subjective view and whims of accountant of each concern
 Balance sheet of a concern is a statics document it disclose the financial position of a
concern on a particular date.
 Information disclosed by profit& loss a/c may not be the real profit as many items
shown in the profit & loss a/c may not the real
 Financial statements are dumb, because they speak themselves. The statements
require further detailed analysis and interpretation.
  Financial statement of the one period may not be comparable.
 Financial statement does not disclose the contribution of man towards the efficiency
of the business.

ANALYSIS AND INTERPRETATION OF FINANCIAL STATEMENT

The various tools of financial statement are used for decision-making process. The
financial statement becomes a tool for future planning and forecasting. The analysis of these
statements involves their division according to similar groups and arranged in desired form.
The interpretation involves the explanation of financial facts in a simplifier’s manner

OBJECTIVES OF ANALYSIS AND INTERPRETATION:

The users of financial statement have definite objectives to analysis and interpret
.Therefore; there are variations in the objectives of interpretation by various classes of
people. However, there are certain specific and common objectives which are listed below:

 To interpret the profitability and efficiency of various business activities with the help
of profit and loss account;
 To measure managerial efficiency of the firm;
 To ascertain earning capacity in future period;
 To measure short-term and long -term solvency of the business;
 To determine future positional of the concern;
 To measure utilization of various assets during the period;
 To compare operational efficiency of similar concerns engaged in the same industry

Type of Analysis:

The process of financial statement analysis is of different types. The process of

analysis is classified on the basis of information used and ‘modus operandi’ of analysis. The
classification is as under:

Financial statement analysis

On the basis of information on basis of ‘modus operandi’ of

Used: analysis:
(a) External analysis (a) Horizontal analysis

(b) Internal analysis (b) Vertical analysis

LIMITATIONS OF FINANCIAL STATEMENT ANALYSIS

Financial statement analysis is a very important device but it has Certain limitation which are
to be kept in mind. Following are the limitations of financial statement analysis.

1. Based on past data:

The nature of financial statements is historical. Past cannot be the index of future estimation,
forecasting, budgeting and planning.

2. Financial statement analysis cannot be a substitute for judgment :

Analysis is tools which can be utilized usefully by an expert may lead to erroneous
conclusion by unskilled analysis. Thus the result analysis cannot be considered as judgment
or conclusion

3. Reliability of figures:

The accuracy and reliability of analysis depends on reliability of figures derived from
financial statement.

4. Different interpretation:

Result of the analysis may be interpreted differently by different user

5. Change in accounting methods:

Analysis will be effective if the figures taken from financial statements comparable. If there
are frequent change in accounting policies and method, figures of different periods will be
different and comparable.

6. Price level change:

The ever rising inflation erodes the value of money in the present day economic situation,
which reduces the validity of analysis.

7. Limitations of the tools of analysis:

Different techniques of analysis are used by an analyst. These tools are suitable for
different type of analysis. Application of a particular tool or technique depends on the skill
and expertise of the analyst. If an unsuitable technique is used, it give misleading result. It
may lead to wrong conclusions and prove harmful to the business concern.

METHODS OF ANALYSIS AND INTERPRETATION

The analysis and interpretation of financial statement is used to determine the financial
position and result of operation as well. The following are the tools that are used for
analyzing the financial position of the company:

 Ratio Analysis
 Comparative balance sheet
 Common size balance sheet
 Trend analysis

RATIO ANALYSIS

Ratio analysis is an important and age-old technique. It is a powerful tool of financial

Analysis. It is defined as “The indicated quotient of two mathematical expressions” and as
“the relationship between two or more things” .Systematic use of ratio is to interpret the
financial statement so that the strength and weakness of a firm as well as its historical
Statement and current financial condition can be determined.

A ratio is only comparison of the numerator with the denominator .The term ratio
refers to the numerical or quantitative relationship between two figures. Thus, ratio is the
relationship between two figures and obtained by dividing a former by the latter. Ratios are
designed show how one number is related to another.

The data given in the financial statements are in absolute form and are dumb and are
unable to communicate anything. Ratios are relative form of financial data and are very
useful technique to check upon the efficiency of a firm. Some ratios indicate the trend or
progress or downfall of the firm.

In the view of the requirements of the various users of ratio, it is divided in to the
following important categories.

 1. Liquidity ratios
 2. Activity ratios
 3. Profitability ratios
 4. Earnings ratios

LIQUIDITY RATIOS:

Liquidity ratios measure the ability of the firm to meet it’s a current obligation. In
fact, analysis of liquidity needs the preparation of cash budgets and cash and fund flow
statements; but liquidity ratios, by establishing a relationship between cash and other current
asset to current obligations provide a quick measure of liquidity.

A firm should ensure that it does not suffer From lack or liquidity, and it does not
have excess liquidity .the failure of the company to meet its obligations due to its lack of
liquidity, will result in a poor creditworthiness, loss of creditor’s confidence, or even in legal
tangles resulting in the closure of the company a very high degree of liquidity is also bad idle
assets earn nothing. The firms fund will be unnecessarily tied up in current assets. Therefore
it is necessary to strike a proper balance between high liquidity and lack of liquidity.

ACTIVITY RATIO OR TURNOVER RATIO:

Activity Ratio highlights the activity and the operational efficiency of the business
concern. The better managements of asserts the larger the amount of sales. Activity ratio
measures the relationship between the sales and the assets. Turnover ratios are employed to
evaluate the efficiency with which the firm manages and utilize s its assets. Their ratio
indicates the speed with which assets are brought converted as turn over into sales.
PROFITABILITY RATIOS:

Profitability reflects the final result of the business operations. Profit earning is
considered essential for the survival of the business. There are two types of profitability ratios
profit margin ratio and the rate of return ratios. Profit margin ratio shows the relationship
between profit and sales.

Popular profit margin ratios are gross profit margin and net profit margin ratio. Rate
of return ratio reflects between profit and investment. The important rates of return measures
are rate of return on total assets and rate in equity.

EARNINGS RATIOS:

Earnings are income to the shareholders of the share invested by them. Hence the
earnings ratio will be useful to the investors to the value of the shares that is been holding by
them

COMPARATIVE BALANCE SHEET:

The comparative balance sheet is helpful in analysing and evaluating the financial
position of the firm over a period of years. The comparative balance sheet analyse is the
study of the trend of the same items, group of items, and computed items in two or more
balance sheet of the same business enterprise on different dates.

The changes in periodic balance sheet items reflect the conduct of a business. The
changes can be observed by comparison of the balance sheet at the beginning and at the end
of the period and these changes can help in forming an opinion about the progress of an
enterprise

COMMON SIZE BALANCE SHEET:

Financial statements when read in absolute figure are not easily understandable. They
are even miss leading. Each items of asset is converted in to percentage to total asset and each
item of capital and liabilities is expressed to total liability and capital fund. Thus the whole
balance sheet is converted in to percentage form i.e., every individual item stated as a
percentage of total 100.such converted balance sheet is known as common size balance sheet.
The percentage so calculated can be easily compared with the corresponding percentages in
some other period.

TREND ANALYSIS:

The ‘trend’ signifies a tendency and as such the review and appraisal of tendency in
accounting variables are nothing but the trend analysis. Trend analysis is carried out by
calculating trend ratio. Trend analysis is significant for forecasting and budgeting. Trend
analysis discloses the change in financial and the operating data between specific periods.

CHAPTER III

RESEARCH METHODOLOGY

RESEARCH DESIGN:

The research approach used for the study is descriptive. The form of the study is on the
financial statement analysis in general and specific to the cash position.

DATA COLLECTION

PRIMARY DATA:

The primary data is collected from the personnel interview.

SECONDARY DATA:

The study has been made using secondary data, which are obtained from annual reports and
statements of accounts. The study is period for the annual reports and statements of accounts
extended form the year 2011-12 to 2015-16.

ANALYTICAL TOOLS FOR THE STUDY:

The researcher for the purpose of analysis and interpretation of the following tools have been need

 RATIO ANALYSIS

PERIOD OF STUDY:
 The study includes 5 years (2011-12 to 2015-16) financial rates of the firms. The study was
conducted for 1 month’s period.

SCOPE OF THE STUDY

The scope of the study to find out the financial Statement of the TENSILE PRO PIPES
MANUFACTURING INUDUSTRY AT TRICHY last five years

 The sincere attempt has been made to include all the aspect relating to the study

 for this purpose of analysis financial Statement of the company has done from the
last four year published financial statement and all the aspects the researcher should
be included in the report

NEED FOR THE STUDY:

 Financial Statement analysis is an important tool for measuring the

financial Statement of any company.
 The main aspect of financial management is working capital management and it
should be done on day-to-day basis.
 Hence the company permits me to do in the area of finance. This study helps to
review the financial Statement of the company.

LIMITATIONS OF THE STUDY:

 It is Suffering from the limitations of financial statements

 There is Absence of standard universally accepted terminology in financial
analysis
 Price level changes is ignored in financial analysis
 Quantity aspect is ignored in financial analysis
 Financial analysis provides misleading result in absence of absolute data

CHAPTERIZATION SCHEME

 Chapter I deal with the introduction, company profile, and industry profile
  Chapter II deals with the review of literature
 Chapter III deals with the research methodology
 Chapter IV deals with the data analysis and interpretation
 Chapter V deals with the finding, suggestion, and conclusion

CHAPTER IV
DATA ANALYSIS AND INTERPRETATION

INTRODUCTION OF THE TOPIC

MEANING OF FINANCIAL STATEMENTS
Financial statements refer to such statements which contains financial information about
an enterprise. They report profitability and the financial position of the business at the end of
accounting period. The team financial statement includes at least two statements which the
accountant prepares at the end of an accounting period. The two statements are: -

 The Balance Sheet

 Profit And Loss Account

They provide some extremely useful information to the extent that balance Sheet mirrors
the financial position on a particular date in terms of the structure of assets, liabilities and
owners equity, and so on and the Profit And Loss account shows the results of operations
during a certain period of time in terms of the revenues obtained and the cost incurred during
the year. Thus the financial statement provides a summarized view of financial positions and
operations of a firm.

MEANING OF FINANCIAL ANALYSIS

1. The term financial analysis is also known as ‘analysis and interpretation of financial
statements’ refers to the process of determining financial strength and weakness of the
firm by establishing strategic relationship between the items of the Balance Sheet,
Profit and Loss account and other operative data.
2. The first task of financial analysis is to select the information relevant to the decision
under consideration to the total information contained in the financial statement. The
 second step is to arrange the information in a way to highlight significant relationship.
The final step is interpretation and drawing of inference and conclusions. Financial
statement is the process of selection, relation and evaluation.

FEATURES OF FINANCIAL ANALYSIS

 To present a complex data contained in the financial statement in simple and
understandable form.
 To classify the items contained in the financial statement in convenient and rational
groups
 To make comparison between various groups to draw various conclusions.

PURPOSE OF ANALYSIS OF FINANCIAL STATEMENTS

 To know the earning capacity or profitability.
 To know the solvency.
 To know the financial strengths.
 To know the capability of payment of interest & dividends.
 To make comparative study with other firms.
 To know the trend of business.
 To know the efficiency of mgt.
 To provide useful information to mgt.

PROCEDURE OF FINANCIAL STATEMENT ANALYSIS

The following procedure is adopted for the analysis and interpretation of financial
statements:-
 The analyst should acquaint himself with principles and postulated of accounting. He
should know the plans and policies of the management so that he may be able to find
out whether these plans are properly executed or not.
 The extent of analysis should be determined so that the sphere of work may be
decided. If the aim is find out. Earning capacity of the enterprise then analysis of
income statement will be undertaken. On the other hand, if financial position is to be
studied then balance sheet analysis will be necessary.
  The financial data be given in statement should be recognized and rearranged. It will
involve the grouping similar data under same heads. Breaking down of individual
components of statement according to nature. The data is reduced to a standard form.
 A relationship is established among financial statements with the help of tools &
techniques of analysis such as ratios, trends, common size, fund flow etc.
 The information is interpreted in a simple and understandable way. The significance
and utility of financial data is explained for help in decision making.
 The conclusions drawn from interpretation are presented to the management in the
form of reports.

TYPES OF FINANCIAL ANALYSIS

There are different ways of analysis the financial statements:

1. On The Basis Of Process Of Analysis

a) Horizontal Analysis: This is used when the financial statement of a number of years
are to be analyzed. Such analysis indicates the trends and the increase or decrease in
various items not only in absolute figures but also in percentage form. This analysis
indicates the strengths and weaknesses of the firm. This analysis is also called as
dynamic analysis because it also shows the trend of the business.

b) Vertical Analysis : This is used when financial statements of a particular year or on a

particular date are analyzed. For this type of analysis we generally use common size
statements and the ratio analysis. It involves a study of quantitative relationship
among various items of balance sheet and profit and loss account. This type of
analysis is static analysis because this is based on the financial results of one year.
Vertical analysis is useful when we have to compare the performance of different
departments of the same company.

c) Among these two types of analysis, horizontal analysis is more useful because it
brings out more clearly the trends of working of a firm. This gives us more concrete
bases for future planning.
 2. On The Basis Of Information Available
a) Internal Analysis: This analysis is based on the information available to the business
firm only .Hence internal analysis is made by the management. Internal analysis is
more reliable and helpful for financial decisions.

b) External Analysis: This analysis is made on the basis of published statements,

reports and information’s. This analysis is made by external parties such as creditors,
investors, industry’s, financial analysis etc. external analysis is less reliable in
comparison to internal analysis because of limited and often incomplete information.
3. On The Basis Of Number Of Firms
a) Inter-Firm Analysis: When financial analysis of two or more companies or firms are
analyzed and compared over a number of accounting periods, it is called inter-firm
analysis.

b) Intra -Firm Analysis: intra-firm analysis is concerned with the analysis of financial
performance of different units or departments or segments of the same enterprise or company.
Similarly when financial statements of two or more years of the same firm are analyzed and
compared it is also called as intra-firm analysis.

4. On The Basis Of Objectives

a) Accounting Analysis: Accounting analysis is analysis of past financial performance

and involves examining how generally accepted accounting principles and conventions have
been applied in arriving at the values of assets, liabilities, revenues and expenses.

b) Prospective Analysis: Prospective analysis involves developing forecasted financial

statements keeping in view the changes that are likely to shape and affect the business given
the assumptions about these changes and the limitation of the forecasting technique used.
This is quite complicated analysis.
METHODS/TOOLS OF FINANCIAL ANALYSIS
A number of methods can be used for the purpose of analysis of financial statements.
These are also termed as techniques or tools of financial analysis. Out of these, and enterprise
can choose those techniques which are suitable to its requirements. The principal techniques
of financial analysis are:-

a. Comparative financial statements

b. Common-size statements
c. Trend analysis
d. Ratio analysis
e. Funds flow analysis
f. Cash flow analysis
g. Breakeven point analysis

a. Comparative Financial Statements:

When financial statements figures for two or more years are placed side-side to
facilitate comparison, these are called ‘comparative Financial Statements’. Such statements
not only show the absolute figures of various years but also provide for columns to indicate to
increase or decrease in these figures from one year to another. In addition, these statements
may also show the change from one year to another on percentage form. Such cooperative
statements are of great value in forming the opinion regarding the progress of the enterprise.

Objectives purpose or significance of comparative financial statements

 To simplify data
 To make inter period/inter-firm comparison
 To indicate the trends
 to enable forecasting
 To indicate the strengths and weaknesses of the firm
 To compare the performance
 To analyze expenses
 To analyze profits
TOOLS FOR COMPARISON OF FINANCIAL STATEMENTS

Comparative financial statement is a tool of financial analysis that depicts change in

each item of the financial statement in both absolute amount and percentage term, taking the
item in preceding accounting period as base.

COMPARISON AND ANALYSIS OF FINANCIAL STATEMENTS MAY BE

CARRIED OUT USING THE FOLLOWING TOOLS:

1. Comparative Balance Sheet :

The comparative balance sheet shows increase and decrease in absolute terms as well as
percentages, in various assets, liabilities and capital. A comparative analysis of balance sheets
of two periods provides information regarding progress of the business firm. The main
purpose of comparative balance sheet is to measure the short- term and long-term solvency
position of the business.

2. Comparative Income Statement :

Comparative income statement is prepared by taking figures of two or more than two
accounting periods, to enable the analyst to have definite knowledge about the progress of the
business. Comparative income statements facilitate the horizontal analysis since each
accounting variable is analyzed horizontally.

COMMON- SIZE STATEMENTS:

Common size statements are such statements in which the items of financial
statements are covered into percentage of common base. In common-size income statement,
by assuming net sales as 100(i.e %) and other individual items are converted as percentage of
this. Similarly, in common –size balance sheet, total assets are assumed to be 100 (i.e %) and
individual assets are expressed as percentage.

OBJECTIVES OF COMMON SIZE STATEMENTS

1. Presenting the change in various items in relation to total assets or total liabilities or
net sales.
 2. Establishing a relationship.
3. Providing a common base for comparison.

TYPES OF COMMON SIZE STATEMENTS

1. Common-Size Balance Sheet :

A common –size balance sheet is a statement in which total of assets or liabilities is assumed
to be equal to 100 and all the figures are expressed as percentage of the total. That is why it is
known as percentage balance sheet.
Common-size balance sheet facilitates the vertical analysis since each item of the Balance
Sheet is analyzed vertically.

2. Common-Size Income Statement:

Common-size income statement is a statement in which the figures of net sales is assumed to
be equal to 100 and all other figures of “profit and loss A/c” are expressed as percentage of
net sales. This statement facilitates the vertical analysis since each accounting variable is
analyzed vertically. One can draw conclusion, regarding the behavior of expenses over period
of time by examining these percentages.

C. TREND ANALYSIS:

Trend percentage are very useful is making comparative study of the financial
statements for a number of years. These indicate the direction of movement over a long time
and help an analyst of financial statements to form an opinion as to whether favorable or
unfavorable tendencies have developed.
This helps in future forecasts of various items. For calculating trend percentages any
year may be taken as the ‘base year’. Each item of beast year is assumed to be equal to 100
and on that basis the percentage of item of each year calculated.
RATIO ANALYSIS:

MEANING:

Absolute figures expressed in financial statements by themselves are meaningfulness.

These figures often do not convey much meaning unless expressed in relation to other
figures. Thus, it can be say that the relationship between two figures, expressed in
arithmetical terms is called a ratio.
“According to R.N. Anthon “A ratio is simply one number expressed in terms
another. It is found by dividing one number into the other.”

TYPES OF RATIOS

1. Proportion or Pure Ratio or Simple ratio.

2. Rate or so many Times.
3. Percentage
4. Fraction.

OBJECTS AND ADVANTAGES OR USES OF RATIO

ANALYSIS

1. Helpful in analysis of financial statements.

2. Simplification of accounting data.
3. Helpful in comparative study.
4. Helpful in locating the weak spots of the business.
5. Helpful in forecasting
6. Estimate about the trend of the business
7. Fixation of ideal standards
8. Effective control
9. Study of financial soundness.
LIMITATION OF RATIO ANALYSIS
1. False accounting data gives false ratios
2. Comparisons not possible of different firms adopt different
3. Accounting policies.
4. Ratio analysis becomes less effective due to price level
5. change
6. Ratios may be misleading in the absence of absolute data.
7. Limited use of a single Ratio.
8. Window-Dressing
9. Lack of proper standards.
10. Ratio alone are not adequate for proper conclusions
11. Effect of personal ability and bias of the analyst.

CLASSIFICATION OF RATIOS

In view of the financial management or according to the tests satisfied,various ratios have
been classified as below:

Liquidity Ratios:
These are the ratios which measure the short-term solvency or financial position of a
firm. These ratios are calculated to comment upon the short-term paying capacity of a
concern or the firm’s ability to meet its current obligations.
Long –Term Solvency and Leverage Ratios: Long-term solvency ratios convey a
firm’s ability to meet the interest cost and repayment schedules of its long-term obligation
e.g. Debit Equity Ratio and Interest Coverage Ration. Leverage Ratios.

Activity Ratios:
Activity ratios are calculated to measure the efficiency with which the resource of a
firm has been employed. These ratios are also called turnover ratios because they indicate the
speed with which assets are being turned over into sales e.g. debtors turnover ratio.
Profitability Ratios:
These ratios measure the results of business operations or overall performance and
effective of the firm e.g. gross profit ratio, operating ratio or capital employed. Generally,
two types of profitability ratios are calculated.
o In relation to Sales, and
o In relation in Investment

FUNCTIONAL CLASSIFICATION IN VIEW OF FINANCIAL MANAGEMENT OR

CLASSIFICATION ACCORDING TO TESTS

Liquidity Ratios Long-term Activity Ratios Profitability Ratios

Solvency and
Leverage Ratios
-Current Ratio Financial Operating Inventory Turnover In Relation to Sales.
-Liquid Ratio Composite Ratio. Gross Profit Ratio.
(Acid) Test or -Debt. Equity Debtors Turnover Operating Ratio.
Quick Ratio. Ratio Ratio Operating Profit
-Absolute liquid or -Debt to Total Fixed Assets Ratio.
-Cash Ratio. Capital Ratio Turnover Ratio Net Profit Ratio.
-Debtors -Interest Total Asset Expenses Ratio
Turnover Ratio Coverage Ratio Turnover Ratio In relation to
-Creditors Turnover -Capital Gearing Working Capital investments
Ratio Ratio Turnover Ratio. Return on
-Inventory Turnover Payables Turnover Investments.
ratio Ratio Return on capital.
Capital Employed Return on Equity
Turnover Ratio Capital.
Return on total
Resources
Earning per share.
Price Earning Ratio.
CASH-FLOW STATEMENT
Cash – flow statement is a statement showing inflows (receipts) and outflows
(payments) of cash during a particular period. In other words, it is summary of sources and
applications of each during a particular span of time.

OBJECTIVES OF CASH FLOW STATEMENT:

1. Useful for Short-Term Financial Planning.

2. Useful in Preparing the Cash Budget.
3. Comparison with the Cash Budget.
4. Study of the Trend of Cash Receipts and Payments.
5. It explains the Deviations of Cash from Earnings.
6. Helpful in Ascertaining Cash Flow from various Separately.
7. Helpful in Making Dividend Decisions.

COMPARATIVE BALANCE SHEET TENSILE PRO PIPES MANUFACTURING

INDUSTRY FROM 2012-2013 TO 2015-2016
(Rs. in crores)
Particulars 2012-2013 2013-2014 2014-2015 2015-2016
Absolute % of Absolute % of Absolute % of Absolute % of
change change change change change change change change
Capital and
liabilities:
Capital 153.08 14 9.51 0.8 213.34 17 0.61 .04
Reserves and 9502.96 80 2097.76 10 21943.61 94 3062.2 7
surplus
Deposits 65264.39 65 65427.02 40 13920.86 6 (26083.23) (11)
Borrowings 4977.41 15 12734.12 33 14392.4 28 1675.26 2.5
Other 3831.71 18 13000.76 51.5 4666.75 12 851.04 2
liabilities and
provisions

Total capital 83729.55 50 93269.17 37 55136.96 16 (20494.12) (5.1)

and liabilities
Assets:

Investments 21060.04 42 19710.45 27.5 20196.5 22 (8396.03) (7.5)

Advances 54757.96 60 49702.49 34 29750.48 15 (7305.23 (3.25)
Fixed assets (57.32) (1.4) (57.3) (1.4) 185.47 5 (307.27) (7.5)
Capital work 51.64 54 41.72 28.2 (189.66) -100 0.00 0.00
in progress
Current assets 7917.23 37 23871.8 81 5194.17 10 (4485.58) (8)
Total assets: 83729.55 50 93269.16 37 55136.96 16 (20494.11) (5.1)

INTERPRETATION
 The capital of industry increased by 14% in 2012-2013, 0.8% in 2013-2014,17% in
2007-08,and .04 % in 2015-2016.This shows that there is fluctuation in the rate of
increase in the capital. In 2012-2013 and 2014-2015 the rate of increase in capital is
more than that of 2014-2015 and 2015-2016 .
 There is a huge fluctuation in the rate of increase in reserves and surplus also. This
shows that industry is effectively utilizing its reserves and surplus.
 In 2012-2013 deposits increase by 65%, in 2013-2014 it increased by 40%, and an
increase of 6% in 2014-2015 in 2015-2016 deposits fall by 11%.this shows that the
industry has replayed its deposits in this year.

 The borrowings are also showing a fluctuating rate of increase in 2015-2016the

borrowings have increased at a very low rate. This shows that industry has repaid a
large amount of borrowings in this year and thereby reducing the dependence on
outside debt.
 The investments are also increasing but with lower rates compared to the preceding
years
 Similarly advances rose by 60% in 2013-2014 , an increase of 34% in 2014-2015
,15% increase in 2014-2015 and finally decreased by 3.25% in 2015-2016

 Three has been a consistent decline in the fixed assets over years. in 2013-2014and
2014-2015 it decreased by 1.4 % ,increased by 5% in 2014-2015 and again decreasing
by 7.5% in 2015-2016 this is mainly due to increase in the rate of depreciation in the
subsequent years.
 A huge fluctuation is revealed from current assets. it increased by 37% in 2012-2013
,rate of increase rose to 80% in 2013-2014and then the it increased at a much lower
 rate i.e at 10%.this shows that the industry is effectively utilizing its working capital.
there is a fall in current assets in 2015-2016 by 8 %.this is mainly due to the
repayment of deposits in the years 2015-2016.

COMPARATIVE INCOME STATEMENT OF TENSILE PRO PIPES

MANUFACTURING INDUSTRY FROM 2012-2013TO 2015-2016
(rs. In crores)
Particulars 2012-2013 2013-2014 2014-2015 2015-2016
Absolute % of Absolute % of Absolute % of Absolute % of
change change change change change chang change change
e
Income:

Operating 5941 46.3 10156 54.1 10676 37 (902.84) (2.3)

income

Expenditure:

Interest 3026.56 46 6761.05 70.4 7125.74 43.5 (758.31) (3)

expended
Operating 1180.36 36 2211.05 49.3 1463.62 22 (1109.07 (14)
expenses
Total 4206.92 43 8972.1 64 8589.36 37.2 (1867.38 (5.9)
expenses )
Operating 1734.67 59 1183.73 25.2 2086.29 35.5 964.54 12.1
profit

Provision 1199.8 126.1 613.58 28.5 1038.78 37.5 1364.14 36

and
contigencies
Net profit for
the year 534.87 27 570.15 22.4 1047.51 34 (399.6) (10)
Extraordinar
y items 0.00 0.00 0.00 0.00 0.00 0.00 (0.58) 0.00
Profit
brought 135.13 254.5 105.22 56 704.83 21 1438.05 144
forward

Total 670 32.55 675.37 25 1752.34 51.4 1037.87 20

profit/(loss):
INTERPRETATION:-

 The net profit shows a fluctuating trend i.e it increased by 27% in 2012-2013 ,22.4%
increase in 2013-2014 ,and increased by 34% in 2014-2015 and finally if falls by
10% in 2015-2016 .this may be due to decline in operating income and increased tax
liability in the year 2015-2016.
 The interest expenses from the period 2011-2016 showed an increasing trend but
decreased in 2015-2016 due to repayment of borrowings.

TREND ANALYSIS
TREND PERCENTAGE TENSILE PRO PIPES MANUFACTURING INDUSTRY
FROM 2011-2016
(Base year 2011-2016) Percentage (%) figures
Particulars 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Deposits 100 165 231 245 219
Advances 100 160 214 247 239
Net profit 100 127 155 207 187
 Trend graph

300

250

200
percentage(%)
DEPOSITS
150 ADVANCES
NET PROFIT
100

50

0
2011-12 2012-13 2013-14 2014-15 2015-16

Years

INTERPRETATION:

 There is a continuous increase in the deposits till the year ending 2014-2015 followed
by a downfall in the year ending 2015-2016 due to repayment of deposits in this year.
 Similarly advances also shows as increasing trend till the year ending 2014-2015
followed by a slight downfall in the year ending 2015-2016.
 There has been a substantial increase in net profit till the year ending 2008.In four
years it has been more than double.The overall performance of the industry is
satisfactory.
RATIO ANALYSIS

CURRENT RATIO:
An indication of a company's ability to meet short-term debt obligations; the higher
the ratio, the more liquid the company is. Current ratio is equal to current assets divided by
current liabilities. If the current assets of a company are more than twice the current
liabilities, then that company is generally considered to have good short-term financial
strength. If current liabilities exceed current assets, then the company may have problems
meeting its short-term obligations.

CURRENT RATIO = CURRENT ASSETS / CURRENT LIABILITY

TABLE 4.1
CURRENT RATIO

Year Current Assets Current Liabilities Current Ratio

(Rs. In crores) (Rs. In crores)
2011-12 21632.56 21396.16 1.01
2012-13 29549.79 25227.88 1.17
2013-14 53421.59 38228.64 1.39
2014-15 58615.76 42895.38 1.36
2015-16 54130.18 43746.43 1.23
CHART 4.1
CURRENT RATIO

Current Ratio
1.4
1.2
1
0.8
ratio

1.39 1.36
0.6 1.17 1.23
1.01 Current Ratio
0.4
0.2
0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
An ideal solvency ratio is 2. The ratio of 2 is considered as a safe margin of solvency
due to the fact that if current assets are reduced to half (i.e.) 1 instead of 2, then also the
creditors will be able to get their payments in full.
But here the current ratio is less than 2 and more than 1 which shows that the industry
has current assets just equal to the current liability which is not satisfactory as the safety
margin is very less or zero. Therefore the industry should keep more current assets so that it
can maintain a satisfactory safety margin.
LIQUID RATIO:

Liquid ratio is also known as ‘Quick’ or ‘Acid Test ‘Ratio. Liquid assets refer to assets which
are quickly convertible into cash. Current Assets other stock and prepaid expenses are
considered as quick assets.

Quick Ratio = Total Quick Assets

Total Current Liabilities

Quick Assets = Total Current Assets – Inventory

TABLE 4.2
LIQUID RATIO

Years Current assets Current liabilities Ratio

2011-12 12929.97 21396.16 0.60
2012-13 17040.22 25227.88 0.67
2013-14 37121.33 38228.64 0.97
2014-15 38041.13 42895.38 0.88
2015-16 29966.56 43746.43 0.68
CHART 4.2
LIQUID RATIO

1 LIQUID RATIO
0.9
0.8
0.7
percentage

0.6
0.5
0.4 Ratio
0.3
0.2
0.1
0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
A quick ratio of 1:1 is considered favorable because for every rupee of current
liability, there is atheist one rupee of liquid assets. A higher value of ratio is considered
favorable. Here this ratio is less than 1 in 2011-2016 it is close to 1 which is not satisfactory.
This means the industry has not managed its funds properly in this particular period.
Therefore industry should rationally utilize its funds to maintain an ideal liquid ratio.
EARNING PER SHARE:
In order to avoid confusion on account of the varied meanings of the term capital employed,
the overall profitability can also be judged by calculating earnings per share with the help of
the following formula:

Earning Per Equity Share = Net Profit after Tax –Prefrence Dividend
No. of Equity shares

The earnings per share of the company help in determining the market price of the
equity shares of the company. A comparison of earning per share of the company with
another will also help in deciding whether the equity share capital is being effectively used or
not. It also helps in estimating the company’s capacity to pay dividend to its equity
shareholders.

TABLE 4.3
EARNING PER SHARE

Net Income Available For No. Of Equity Shares EPS

Year Shareholders (Rs. In crores)
(Rs. In crores)
2011-12 2005.2 73.6716 27.22
2012-13 2540.07 88.9823 28.55
2013-14 3110.22 89.9266 34.59
2014-15 4157.73 111.2687 37.37
2015-16 3758.13 111.325 33.78
CHART 4.3
EARNING PER SHARE

40
EARNING PER SHARE
35 37.37
34.59 33.78
30
25 28.55
27.22
ratio

20
15 Series1

10
5
0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
Earnings per Share is the most commonly used data which reflects the performance
and prospects of the company. It affects the market price of shares. Here the Earning Per
Share is shows a persistent increase till the year 2014-15after that in the year2015-16
Earnings Per share is followed by a downfall due to decline in profits.
DIVIDEND PER SHARE:

It is expressed by dividing dividend paid to equity shareholders by no. of equity

shares. this shows the per share dividend given to equity shareholders. It is very helpful for
potential investors to know the dividend paying capacity of the company. It affects the
market value of the company.
Dividend per Share = Dividend Paid To Equity Shareholders/
No. Of Equity Shares

TABLE 4.4
DIVIDEND PER SHARE

Year Dividend Paid No. Of Equity DPS

(Rs. In crores) Shares
(Rs. In crores)
2011-12 632.96 73.6716 8.59
2012-13 759.33 88.9823 8.53
2013-14 901.17 89.9266 10.02
2014-15 1227.7 111.2687 11.03
2015-16 1224.58 111.325 11
CHART 4.4
DIVIDEND PER SHARE

12 DIVIDEND PER SHARE

10

8
ratiuo

6 11.03 11
10.02 dps
8.59 8.53
4

0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:

Here the Dividend Per Share is increasing year after year except a little decline in
2015-16 otherwise the dividend per share ratio of the industry is quite satisfactory which
shows the industry has a good dividend paying capacity.
NET PROFIT RATIO:

This ratio indicates the Net margin on a sale of Rs.100. It is calculated as follows:
Net Profit Ratio = Net Profit X 100/ Net Sales
This ratio helps in determining the efficiency with which affairs of the business are
being managed. An increase in the ratio over the previous period indicates improvement in
the operational efficiency of the business. The ratio is thus on effective measure to check the
profitability of business.

TABLE 4.5
NET PROFIT RATIO
Year Net Profit Sales Net Profit Ratio
(Rs. In crores) (Rs. In crores)
2011-12 2005.2 9409.9 21.3
2012-13 2540.07 13784.49 18.42
2013-14 3110.22 22994.29 13.52
2014-15 4157.73 30788.34 13.5
2015-16 3758.13 31092.55 12.08
CHART 4.5
NET PROFIT RATIO

net profit ratio

25

20

15
ratio

10 net profit ratio

0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
Although both the sales and net profit have increased during the above period but the
Net Profit Ratio of the industry is declining continuously. This is because of the reason that
net profits have not increased in the same proportion as of the sales.
OPERATING PROFIT RATIO:

This ratio is calculated as follows:

Operating Profit Ratio = Operating Profit X100/ Net Sales

The difference between net profit ratio and net operating profit ratio is that net operating
profit is calculated without considering non-operating expenses and non-operating incomes.
If we deduct this ratio from 100, the result will be operating ratio. Higher operating profit
ratio enables the organization to recoup non-operating expenses out of operating profits and
provide reasonable return.

TABLE 4.6
OPERATING PROFIT RATIO:

Year Operating Profit Sales Operating Profit

(Rs. In crores) (Rs. In crores) Ratio (in %)
2011-12 2956 9409.9 31.41
2012-13 4690.67 13784.49 34.02
2013-14 5874.4 22994.29 25.54
2014-15 7960.69 30788.34 25.85
2015-16 8925.23 31092.55 28.7
CHART 4.6
OPERATING PROFIT RATIO:

operating profit ratio

35
30
25
20
ratio

31.41 34.02
15 25.54 25.85 28.7
10 operating profit ratio
5
0

year

INTERPRETATION:
In the year 2011-12 the operating profit is 31.41% & 34.02% respectively. After that
it has been consistently declined from the year 2014-15 and again gaining momentum in
2016. This may be due to the reason that operating expenses have been increased more as
compared to sales during the above period consequently reducing the operating profits.
Therefore the industry should check on unnecessary operating expenses to correct this
situation and to provide a sufficient return.
RETURN ON NET WORTH:
It measures the profitability of the business in view of the shareholders. It judges the
earning capacity of the company and the adequacy of return on proprietor’s funds.
Shareholders and potential investors are interested in this ratio.

It is calculated as below:
Return on Net Worth = Net Profit after Interest and Tax x 100/ Shareholder’s Funds

TABLE 4.7
RETURN ON NET WORTH:

Year Net Profit After Interest Shareholder's Fund Return On Net

And Tax Worth (in %)
(Rs. In crores) (Rs. In crores)
2011-12 2005.2 12899.97 15.54
2012-13 2540.07 22555.99 11.26
2013-14 3110.22 24663.26 12.61
2014-15 4157.73 46820.21 8.88
2015-16 3758.13 49883.02 7.53
CHART 4.7
RETURN ON NET WORTH:

16 return on net worth

14
12
10
ratio

8 15.54
12.61
6 11.26
8.88 return on net worth
4 7.53
2
0

year

INTERPRETATION:
The net profit after interest and tax have increased slowly till the year 2014-15 followed by a
downfall due to high interest payments, operating expenses and taxation liability.
Consequently the net worth ratio has declined considerably and has reduced to more than half
in the year 2015-16 than it was in 2015-16
RETURN ON CAPITAL EMPLOYED:

It establishes relationship between profit before interest and tax and capital employed.
It indicates the percentage of return on the total capital employed in the business. This ratio is
also known as Return on Investment. It measures the overall efficiency and profitability of
the business in relation to investment made in business. It also shows how efficiently the
resources are used in the business. Comparison of one unit with that of the other or
performance in one year with that of the same unit is possible. It is calculated as below:

TABLE 4.8
RETURN ON CAPITAL EMPLOYED:

Year Net Profit Before Capital Employed Return On Capital

Interest And Tax Employed (in %)
(Rs. In crores) (Rs. In crores)
2011-12 9098.09 146263.25 6.22
2012-13 12694.05 226161.17 5.61
2013-14 20006.54 306429.48 6.52
2014-15 28540.34 356899.69 7.99
2015-16 27842.9 335554.53 8.29
CHART 4.8
RETURN ON CAPITAL EMPLOYED:

return on capital employed

10

6
ratio

7.99 8.29 return on capital

4
6.22 6.52 employed
5.61
2

0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
The above table exhibits the return on capital employed ratio of the industry for last
five years. This ratio measures the earning of the net assets of the business. The ratio was
6.22% in year 2011-12. After that it raised to the tune of 5.61%, 6.52%,7.99% and 8.29% in
year 2011-12 to 2015-16 years respectively. It leads to the conclusion industry rising but
very little proportion of return on capital employed.
DEBT- EQUITY RATIO:

The Debt-Equity ratio is calculated to find out the long-term financial position of the
firm. This ratio indicates the relationship between long-term debts and shareholder’s funds.
The soundness of long-term financial policies of a firm can be determined with the help of
this ratio.
It helps to assess the soundness of long-term financial policies of a business. It also
helps to determine the relative stakes of outsiders and shareholders. Long-term creditors can
assess the security of their funds in a business. it indicates to what extent a firm depends upon
lenders to meet its long-term financial requirements. A low Debt-Equity ratio is considered
better from the point of view of creditors.

TABLE 4.9
DEBT- EQUITY RATIO:

Year Debt Equity Debt Equity Ratio

(Rs. In crores) (Rs. In crores)
2011-12 154759.45 12899.97 11.99
2012-13 228832.96 22555.99 10.14
2013-14 319994.86 24663.26 12.97
2014-15 352974.87 46820.21 7.53
2015-16 329417.94 49883.02 6.6
CHART 4.9
DEBT- EQUITY RATIO:

dept equity ratio

14
12
10
8
ratio

11.99 12.97
6 10.14 dept equity ratio
4 7.53 6.6
2
0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
The ratio shows the extent to which funds have been provided by long-term creditors as
compared to the funds provided by the owners. Here the Debt-Equity ratio for the above
period is always high. This shows that the industry is more relying on outside funds as
compared to internal sources of capital, in its capital structure. From the long-term lenders
point of view this ratio is not satisfactory.
PROPRIETORY RATIO:
It is also called shareholders equity to total equity ratio or net worth to total assets
ratio or equity ratio. It compares the shareholder’s funds to total assets. It is calculated by
dividing shareholder’s funds by total assets.

Proprietary Ratio = Shareholder’s Fund/ Total Assets

It helps to determine the long-term solvency of a company. This ratio measures the
protection available to the creditors. Higher the ratio, lesser is the likelihood of insolvency in
future, as the management has to use lesser debts and vice versa. Thus, this ratio is of great
importance to the creditors.

TABLE 4.10
PROPRIETORY RATIO:

Years Shareholder's Funds Total Assets Proprietory Ratio

(Rs. In crores) (Rs. In crores)
2011-12 12899.97 167659.4 0.07
2012-13 22555.99 251388.95 0.08
2013-14 24663.26 344658.11 0.07
2014-15 46820.21 399795.07 0.12
2015-16 49883.02 379300.96 0.13
CHART 4.10
PROPRIETORY RATIO:

properties ratio
0.14
0.12
0.1
0.08
ratio

0.12 0.13
0.06 properties ratio
0.04 0.07 0.08 0.07
0.02
0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:

Above table exhibits the proprietary ratio of the industry for last five years . It was 7%
in2011-12, after that was 8% in year 2012-13. Similarly it was once again reduced to 7 % in
the year 2013-14. After 2007 it registered increase and was 12% and 13% in the year 2014-15
and 2015-16 respectively. Hence it leads to the conclusion owners have less than 13% stake
in the total assets of the industry. It is not a good sign as far the long term solvency is
concerned.
FIXED ASSETS TURNOVER RATIO:

It is also called as Sales to Fixed Assets Ratio. It measures the efficient use of fixed
assets. This ratio is a measure of efficient use of fixed assets. it is calculated as:
Fixed Assets Turnover Ratio = Cost of goods sold or Sales/Net Fixed Assets

It measures the efficiency and profit earning capacity of the business. Higher the ratio,
greater is the intensive utilization of fixed assets and a lower ratio shows under utilization of
the fixed assets. This ratio has a special importance for manufacturing concerns where
investment in fixed assets is very high and the profitability is significantly dependent on the
utilization of these assets.

TABLE 4.11
FIXED ASSETS TURNOVER RATIO:

Year Sales Net Fixed Assets Fixed Assets

(Rs. In crores) (Rs. In crores) Turnover Ratio
2011-12 9409.9 4038.04 2.33
2012-13 13784.49 3980.72 3.46
2013-14 22994.29 3923.42 5.86
2014-15 30788.34 4108.89 7.49
2015-16 31092.55 3801.62 8.17
CHART 4.11
FIXED ASSETS TURNOVER RATIO:

fixed asset turn over ratio

10

6
ratio

4 7.49 8.17
5.86
2 3.46
2.33
0
2011-12 2012-13 2013-14 2014-15 2015-16
year

INTERPRETATION:
Here the fixed assets employed in the business shows a decreasing trend except in the
year 2015-16 where fixed assets have again increased. This may be due to increase in rate of
depreciation in subsequent years. Nevertheless, the fixed assets turnover ratio has been
consistently increasing. It indicates that fixed assets have been effectively used in the
business without much additional investment in the period of study and also the capital is not
blocked in fixed assets.
CREDIT-DEPOSIT RATIO:
This ratio is very important to assess the credit performance of the industry. The ratio
shows the relationship between the amounts of deposit generated by the industry has well as
their deployment towards disbursement of loan and advances. Higher credit deposit ratio
shows overall good efficiency and performance of any industrying institution.

Credits
Credit Deposit Ratio   100
Deposits

Credit means disbursement of advances, Deposit mean sum of fixed deposit, Saving
deposit and current deposit.

TABLE 4.12
CREDIT-DEPOSIT RATIO:

Year Advances Deposits Credit Deposit Ratio (in%)

(Rs. In crores) (Rs. In crores)
2011-12 91405.15 99818.78 91
2012-13 146163.11 165083.17 88
2013-14 195865.6 230510.19 84
2014-15 225616.08 244431.05 92
2015-16 218310.85 218347.82 99
CHART 4.12
CREDIT-DEPOSIT RATIO:

credit deposit ratio

100
95
90
ratio

99
85 91 92
88 credit deposit ratio
80 84
75

year

INTERPRETATION:

Above table exhibits credit deposit ratio of the industry during last 5 years. In the year
2005 ratio was 91% and it declined to 88% and 84%in the year 2013-14 and 2014-15
respectively. In the year 2014-15 and 2015-16 ratio was increased to 92% and 99%
respectively. it leads to conclusion that credit performance of the industry is very good.
CASH FLOW STATEMENT OF INDUSTRY
2011-2012 2012-13 2013-14 2014-15 2015-16
Profit before tax 2,527.20 3,096.61 3,648.04 5,056.10 5,116.97
Net cash flow-
9,131.72 4,652.93 23,061.95 -11,631.15 -14,188.149
operating activity
Net cash used in
-3,445.24 -7,893.98 -18,362.67 -17,561.11 3,857.88
investing activity
Net cash used in fin.
-1,227.13 7,350.90 15,414.58 29,964.82 1,625.36
activity
Net inc/dec in cash and
4,459.34 4,110.25 20,081.10 683.55 -8,074.57
equivalent
Cash and equivalent
8,470.63 12,929.97 17,040.22 37,357.58 38,041.13
begin of year
Cash and equivalent
12,929.97 17,040.22 37,121.32 38,041.13 29,966.56
end of year
 CHAPTER V

CONCLUSION
On the basis of various techniques applied for the financial analysis of industry we can arrive
at a conclusion that the financial position and overall performance of the industry is
satisfactory. Though the income of the industry has increased over the period but not in the
same pace as of expenses. But the industry has succeeded in maintaining a reasonable
profitability position.

The industry has succeeded in increasing its share capital also which has increased around
50% in the last 5 years. Individuals are the major shareholders. The major achievement of the
industry has been a tremendous increase in its deposits, which has always been its main
objective. Fixed and current deposits have also shown an increasing trend.

Equity shareholders are also enjoying an increasing trend in the return on their capital.
Though current assets and liabilities (current liquidity) of the industry is not so satisfactory
but industry has succeeded in maintaining a stable solvency position over the years. As far as
the ratio of external and internal equity is concerned, it is clear that industry has been using
more amount of external equity in the form of loans and borrowings than owner’s equity.
Industry’s investments are also showing an increasing trend. Due to increase in advances, the
interest received by the industry from such advances is proving to be the major source of
income for the industry

SUGGESTIONS
 Although the short term liquidity position is quite satisfactory as per revealed by
liquid ratio but the current ratio is below the ideal ratio of 2:1.So the industry should
make efforts to increase its current assets to maintain a safety margin and to maintain
a better liquidity position.
 The profitability of the industry for the period under study is not satisfactory. Profits
are increasing but not with same pace as of the expenditure due to higher reliance on
debt capital in the form of borrowings and loans for financing capital structure.
 So in order to improve profitability, the industry should reduce its dependence on
external equities for meeting capital requirements. Consequently, the interest
expenses will decline and profits will increase which is good for the industry.
Similarly non productive expenses should be curtailed to improve profitability.
 Higher trend of credit deposit ratio reveals that the industry has performed
satisfactorily as regard to granting loans and advances to generate income. It suggests
that the credit performance of industry is good and it is performing its business well
by fulfilling the major objective of granting credit and accepting deposit. So in order
to have more creditability in the market the industry should maintain its credit deposit
ratio.
 Though the industry has been successful in increasing it’s deposits but to further
improve upon such situation it can introduce some new and attractive schemes for
public. Such schemes can be in the form of higher rate of interest and shorter maturity
period for FD’s etc.
 Industry should try to finance more and more projects. Financing will help it to earn
higher amount of profits.

 The industry is having a greater reliance on debt capital. The increasing reliance on
external equities may prove hazardous in the long run. So in order to remedy this
situation industry should increase its focus on internal equities and other sources of
internal financing.
 Industry can also think for improving its day-to -day service to its clients. Such
service can be improved by providing prompt service and showing an attitude of co-
operation to its clients. It will help to give a kind of confidence to the public and build
a better public image.
 To achieve the objective of rural development it should open more and more branches
in different rural areas of the country. It will facilitate in providing help to rural poor
farmers and other living below the poverty line. Industry can appoint commission
agents for different area who can encourage general public to invest in the capital of
the industry and make more deposits in industry .
 The industry should simplify the procedure of advances for quick
disbursement.
 To achieve organizational success a proper independent working atmosphere
should be developed to achieve desired objective more effectively.
  Last but not least, industry should adopt branch automation experiment to
control the operational cost

BIBILOGRAPHY
BOOKS REFERRED:
 Accountancy. R.K. Mittal,A.K.Jain. Financial Management- Theory and Practice.
Shashi.K.Gupta , R.K. Sharma.
 Essentials of Corporate Finance 2nd edition ,Irwin /McGraw-Hill.Ross, S.A.,R.W.
Westerfield and B.D. Jordan.
 Basic Financial Management ,8th edition ,Prentice -Hall,Inc. Scott, D.F., J.D Martin,
J.W. Petty and A.Keown.

INTERNET WEBSITES:

Www.Industry.Com
 Www.Moneycontrol.Com
 WWW.Money.Rediff.Com
 Www.Wikipedia.Org
 Www.Google.Com
 Www.Scribd.Com
 Www.Managementparadise.Com
 ANNEXURE

BALANCE SHEET OF TENSILE PRO PIPES MANUFACTURING INDUSTRY.

(Rs. In crores)
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Capital and
liabilities:
Total share 1086.75 1239.83 1249.34 1462.68 1463.29
capital
Equity share 736.75 889.83 899.34 1112.68 1113.29
capital
Share application 0.02 0.00 0.00 0.00 0.00
money
Preference share 350.00 350.00 350.00 350.00 350.00
capital
Reserves 11813.20 21316.16 23413.92 45357.53 48419.73
Revaluation 0.00 0.00 0.00 0.00 0.00
reserves
Net worth 12899.97 22555.99 24663.26 46820.21 49883.02
Deposits 99818.78 165083.17 230510.19 244431.05 218347.82
Borrowings 33544.50 38521.91 51256.03 65648.43 67323.69
Total debt 146263.25 226161.17 306429.48 356899.69 335554.53
Other liabilities 21396.17 25227.88 38228.64 42895.39 43746.43
and provisions
Total liabilities 167659.42 251388.95 344658.12 399795.08 379300.96

Assets:
Cash and 6344.90 8934.37 18706.88 29377.53 17536.33
balances with rbi
Balances with 6585.07 8105.85 18414.45 8663.60 12430.23
industry’s
,money at call
Advances 91405.15 146163.11 195865.60 225616.08 218310.85
Investments 50487.35 71547.39 91257.84 111454.34 103058.31
Gross block 5525.65 5968.57 6298.56 7036.00 7443.71
Accumulated 1487.61 1987.85 2375.14 2927.11 3642.09
depreciation
Net fixed assets 4038.04 3980.72 3923.42 4108.89 3801.62
Capital work in 96.30 147.94 189.66 0.00 0.00
progress
Other assets 8702.59 12509.57 16300.26 20574.63 24163.62
Total assets 167659.40 251388.95 344658.11 399795.07 379300.96

Contingent 97507.79 119895.78 177054.18 371737.36 803991.92

liabilities
Bills for 9803.67 15025.21 22717.23 29377.55 36678.71
collection
Book value(Rs.) 170.35 249.55 270.37 417.64 445.17
EPS 27.22 28.55 34.59 37.37 33.78
No. of equity 736716094 889823901 899266672 1112687495 1113250642
shares

PROFIT AND LOSS ACCOUNT OF TENSILE PRO PIPES MANUFACTURING

INDUSTRY
(amount In Cores)
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
Income:
Interest earned 9409.90 13784.49 22994.29 30788.34 31092.55
Other income 3416.14 4983.14 5929.17 8810.77 7603.72
Total income 12826.04 18767.63 28923.46 39599.11 38696.27
Expenditure:
Interest expended 6570.89 9597.45 16358.50 23484.24 22725.93
Operating 3299.15 4479.51 6690.56 8154.18 7045.11
expenses
Total expenses 9870.04 14076.96 23049.06 31638.42 29771.04
Operating profit 2956 4690.67 5874.40 7960.69 8925.23
Other provision 428.80 1594.07 2226.36 2904.59 3808.26
and contingencies
Provision for tax 522 556.53 537.82 898.37 1358.84
Net profit 2005.20 2540.07 3110.22 4157.73 3758.13
Extraordinary 0.00 0.00 0.00 0.00 (0.58)
items
Profit b/f 53.09 188.22 293.44 998.27 2436.32

Total 2058.29 2728.29 3403.66 5156.00 6193.87

Preference 0.00 0.00 0.00 0.00 0.00
dividend
Equity dividend 632.96 759.33 901.17 1227.70 1224.58
Corporate 90.10 106.50 153.10 149.67 151.21
dividend tax
Pershare data
Eps(rs.) 27.22 28.55 34.59 37.37 33.78
Equity dividend 85.00 85.00 100.00 110.00 110.00
(%)
Book value(rs) 170.35 249.55 270.37 417.64 445.17
Appropriations
Transfer to 547.00 248.69 1351.12 1342.31 2008.42
statutory reserve
Transfer to other 600.01 1320.34 0.00 0.01 0.01
reserve
Proposed 723.06 865.83 1054.27 1377.37 1375.79
dividend/transfer
to govt
Balance c/f to 188.22 293.44 998.27 2436.32 2809.65
balance sheet
Total 2058.29 2728.30 3403.66 5156.01 6193.87