FINANCIAL ACCOUNTING ANALYSIS

AT
ANDHRA PRADESH MINERAL DEVELOPMENT CORPORATION LIMITED

MANGAMPET, KADAPA DIST.

PROJECT REPORT
SUBMITTED TO

GITAM Institute of Management,Visakhapatnam

In the partial fulfillment of the

Requirement for the award of the degree of

BACHELOR OF BUSINESS ADMINISTRATION

BY

Devaki Machineni
(Regd No: 121813701046)
Under the guidance of
Dr.P.GIRI BABU

GITAM INSTITUTE OF MANAGEMENT,VISAKHAPATNAM

(Accredited by NAAC with A+ Grade, Gandhi Nagar campus,

Rushikonda, Visakhapatnam -530045)

 CERTIFICATE BY GUIDE

This is to certify that the project titled “FINANCIAL STATEMENT ANALYSIS is an

academic work done by “DEVAKI MACHINENI” submitted in the partial fulfillment of the
requirement for the award of the degree of “Bachelors in Business Administration” from
“GITAM INSTITUTE OF MANAGEMENT, VISAKHAPATNAM.” under my guidance
and direction.

To the best of my knowledge and belief the data and information presented by him / her in the
project has not been submitted earlier elsewhere.

DATE:

(Dr. P.GIRI BABU)

 DECLARATION
This is bearing DEVAKI MACHINENI, Reg No:121813701046, a student of
BBA in GITAM INSTITUTE OF MANAGEMENT, Accredited by NAAC , Gandhi Nagar
campus, Visakhapatnam, here by declare that this Project Report entitled “A STUDY ON
FINANCIAL STATEMENT AT ANDHRA PRADESH MINERAL DEVELOPMENT
CORPORATION LIMITED” MANGAMPET,KADAPA DIST, under the guidance of
Dr.P.GIRI BABU, it is a bonafied work done by me in partial fulfilment for the award of
degree in bachelor of business administration.

I further declare that this project work is a result of my own effort and
has not been submitted to any other university or institution for the award of any degree
/certificate or published any time before.

Signature of the student

(DEVAKI MACHINENI)
REG.NO:121813701046

4
 ACKNOWLEDGEMENT
A project work at under graduate level is a golden opportunity for learning and self-
development.I consider myself very lucky and honoured to have so many wonderful people
lead me through in completion of this project.

I wish to expresss my indebted gratitude and special thanks to

P.Kedharnath Reddy(GM),APMDC Ltd., Mangampet” for allowing me to carry out my
project work at their esteemed organization and to my external guide
C.PeriyaSwamy(Assistant Manager F&A),for his valuable suggestions and the support
extended.

I feel it a great privilege to express my sincere gratitude to project guide

Lahari,for her valuable guidance, numerate suggestions, keen interest and constant support
throughout the project.

I offer my deep sense of gratitude to my guide Dr.P.GIRI BABU and

Dr.N.Lalitha, Programme co-ordinator,BBA(MA),GIM,Visakhapatnam, for her moral support
to do the project work.

My sincere thanks to Head of the department, Department of BBA,

GITAM Institute of Management, Visakhapatnam, who has initiated and guided all the way
for the successful completion of the project report.

I gratefully acknowledge the management of GITAM Institute of

Management who has provided good faculty, infrastructure to cherish the career advancement.

I would like to thank the faculty members, parents and friends who are
directly or indirectly involved in the execution of my project.

( DEVAKI MACHINENI)
REG NO: 121813701046

5
 REPORT
CHAPTER NAME PAGE.NO
CHAPTER.NO
1.1 Introduction on Accounting
1.2 Need/Significance of study
1.3 Objectives of study
CHAPTER-1 1.4 Scope of study
1.5 Research design
1.6 Data collection method
1.7 Limitations of study

Theoretical Framework
2.1 Financial statement related topics
(a)Financial Statement Analysis
(b)Types of financial statement analysis
CHAPTER-2 (c)Procedure of financial analysis
(d)Tools of financial analysis
(e)Comparative balance sheet
(f)Comparative Income Statement
(g)Trend Analysis
(h)Common size statement
(i)Comparative Balance sheet analysis
(j)Common size income statement

CHAPTER-3 3.1 Industry profile

3.2 Company profile

CHAPTER-4 4.1 Analysis of study

CHAPTER-5 5.1 Findings

5.2 Suggestions
5.3 Conclusions
Bibliography

Annexure

6
CHAPTER-1
1.1 INTRODUCTION ON ACCOUNTING
Accounting is a process of identifying, measuring, recording and
communicating the required information relating to the economic events of an
organisation to the interested users of such information.
Accounting is identified with a system of recording of
business transactions that creates economic information about business enterprises
to facilitate decision making.
The function of accounting is to provide quantitative
information, primarily financial in nature, about economic entities, that is intended
to be useful in making decisions.

“The art of keeping a permanent record of business transactions is Book

Keeping.”

A business undertakes number of transactions. It depends upon the

size of a business entity. Every day business transactions may be around
hundred/thousands. It becomes necessary to record these business transactions in
detail and in a systematic manner. Recording transactions in a books of accounts
in a systematic manner called Book Keeping.

“The art of recording, classifying, summarising, analysing and interpreting

the business transactions systematically and communicating business results
to interested users is accounting.

7
 The accounting process

Accounting links decision

Economic Communicating
makers with economic
activities and with the results accounting
events
of their decisions. information

Decision maker(internal
and external users)

Fig: Accounting process

Branches and objectives of Accounting
Financial Accounting
It is concerned with recording the transactions of financial character, summarising
and interpreting them and communicating the results to the users. It ascertains
profit earned or loss incurred during a period and the financial position as on the
date when the accounting period ends.

Cost Accounting
It analyses the expenditure so as to ascertain the cost of various products
manufactured by the firm and fix the prices. It also helps in controlling the costs
and providing necessary costing information to management for decision making.

Management Accounting
It is concerned with generating information relating to funds, cost and profits etc.
This enables the management in decision making. Basically, it is meant to assist
the management in taking rational policy decisions and to evaluate the impact of
its decisions and actions and the performance of various departments.

8
Tax Accounting
This branch of accounting has grown in response to the difficult tax laws such as
relating to income tax, sales tax, etc. An accountant is required to be fully aware
of various tax legislations.

Social Accounting
This branch of accounting is also known as social reporting or social responsibility
accounting. It discloses the social benefits created and the costs incurred by the
enterprise.

Human resource Accounting

It is concerned with human resource of an enterprise. Accounting methods are
applied to evaluate the human resources in money terms. It is, therefore, an
accounting for the people of the organisation.

National resource Accounting

It means the accounting for the resources of the nation as a whole such as water
resources, mining, forests etc. It is generally not concerned with the accounting of
individual business entities and is not based on generally accepted accounting
principles.

9
1.2 NEED/SIGNIFICANCE OF STUDY
 To know the financial conditions of the APMDC LTD
 To know the profitability position of the APMDC
 To know operating efficiency of the firm
 To evaluate the profit and loss account & balance sheet
 To identify the trends and relationships between financial statement items.
 To determine the relative strength and performance of the company being
analysed.

10
1.3. OBJECTIVES OF STUDY
 The overall objective of the study is determine APMDC company
financial position.
 To know the change in accounting figure.
 To compare growth revenue and expenditure.
 To sustain the strength and weakness of the APMDC.
 To analyse the long term solvency position for 2015-2018 of
APMDC.
 To analyse the liquidity position of the APMDC for the period of
2013-2018.

11
1.4. SCOPE OF STUDY
 The scope of the present study is the analysis of financial performance of
APMDC LTD by adopting comparative financial statement analysis,
common size statement analysis and financial ratios.
 The APMDC LTD overall performance is simplify and managed act as a
externally performed and supported from beginning to end.
 The study of financial statement analysis is confined only to the APMDC
LTD.
 The concept of financial statement analysis measuring the liquidity and
profitability performance.
 The purpose of the project is to analyse the past and present performance of
the company.

12
1.5 RESEARCH DESIGN:
LIQUIDITY RATIOS
S.NO RATIOS FORMULAS
1 current ratio current assets/current liabilities
2 Quick ratio liquid assets/current liabilities
3 Absolute liquid ratio Absolute liquid assets/current liabilities

PROFITABILITY RATIOS:
S.NO RATIOS FORMULAS
1 Gross profit ratio Gross profit/net sales x 100
2 Operating cost ratio operating cost/net sales x 100
3 Operating profit ratio Operating profit/net sales x 100
4 Net profit ratio Operating profit/net sales x 100

WORKING CAPITAL RATIOS:

S.NO RATIOS FORMULAS
1 Inventory ratio Net sales/Inventory
2 Debtors turnover ratio Total sales/account receivables
3 Credits turnover ratio Net credit purchases/ Average accounts
payable

13
1.6. DATA COLLECTION METHOD
Sources of Data Collection:
 Primary Data
 Secondary Data
PRIMARY DATA:
Primary data refers to the first-hand information that is collected for questionnaire
and personal interviews. The questionnaire is the main instrument used to collect
primary data. The questionnaires designed to collect the information about and its
effect on programs of the organization. The data which has been obtained by the
researcher directly from the respondents for specific research work.
SECONDARY DATA:
Secondary data refers to that data which is already in existence and someone has
obtained for specific purpose but reutilize by the researcher. The data of various
financial parameters have been obtained from the annual reports of the companies
directly from the official web sites of the company or stock exchange website. The
data may be either published data or unpublished data. Usually secondary data is
available in books, magazines, journals, reports etc.,

14
1.7.LIMITATIONS OF THE STUDY
 The analysis was made with the help of secondary data collected from the
company.
 Financial analysis is based on only monetary information and non-monetary
factors are ignored.
 The financial statement are prepared on the basis of going concern concept it
doesn’t give exact position.
 It is affected by the price level changes.

15
CHAPTER-2
THEORETICAL FRAMEWORK
(a)FINANCIAL STATEMENT:
“Financial statement analysis is largely a study of relationship among the various
financial factors in a business as disclosed a single set-of-statement study and a
study of the trend these factors as shown in a series of statements.
The term financial statement 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
balance sheet profit and loss account and other operative data, “Analysis Financial
Statement”.

“It is a process if evaluation the relationship between components parts of a

financial statement to obtain a better understanding of a firm’s position and
performance”.

According to “METCALF AND TITARD”.

Analysis is useless without interpretation and interpretation without analysis is
difficult or even impossible. Most of the authors have used the term analysis only
to cover the meaning of both analysis and interpretation, as the objective of
analysis is to study the relationship between various items of financial statements
by interpretation.
The purpose of financial statement analysis is to
diagnose the information contained in financial statements so as to judge the
profitability and financial soundness of the firm.

(b)TYPES OF FINANCIAL STATEMENT:

We can classify various types of financial analysis into different categories
depending upon the

 On the basis of material used

(a)EXTERNAL ANALYSIS
(b)INTERNAL ANALYSIS

16
  On the basis of modus operandi
(a)HORIZONTAL ANALYSIS
(b)VERTICAL ANALYSIS
(a) EXTERNAL ANALYSIS:
This analysis is done by outsiders who do not have access to the
detailed internal accounting records of the business firm. These outsiders include
investors, potential investors, creditors, government agencies, credit agencies, and
the general public.
(b) INTERNAL ANALYSIS:
The analysis is conducted by persons who have access to the
detailed internal accounting records of a business firm is also known as internal
analysis. Such as analysis can, therefore, be performed by executives and
employees of the organisation as well as government agencies which have
statutory powers vested in them.
Financial analysis for managerial purposes is the internal type
of analysis that can be effected depending upon the purpose to be achieved.

ON THE BASIS OF MODUS OPERANDI:

(a)HORIZONTAL ANALYSIS:
Horizontal analysis refers to the comparison of financial data of a company
for several years. The figures for this type of analysis are presented horizontally
over a number of columns. The figures of the various years are compared with
standard or base year. A base year is a year chosen as beginning point. This type
of analysis is also called ‘Dynamic Analysis’ as it is based on the data from year
to year rather than on data of any one year.
(b)VERTICAL ANALYSIS:
Vertical analysis refers to the study of relationship of the various
items in the financial statements of one accounting period. In this type of analysis
the figures from financial statement of a year are compared with a base selected
from the same year’s statement. It is also known as ‘Static Analysis.’ Common

17
size financial statements and financial ratios are the two tools employed in vertical
analysis.
(C ) PROCEDURE OF FINANCIAL ANALYSIS:
Broadly there are three steps involved in the analysis of financial
statement. These are
1. SELECTION
2. CLASSIFICATION
3. INTERPRETATION
The first step involves selection information relevant to the purpose
of analysis of financial statement.
The second involved is the methodical classification of the data.
The third step includes drawing of interferences and conclusions.
(d) TOOLS OF FINANCIAL ANALYSIS:
Financial statements are essential tools used to analyse a company’s
performance. Management utilizes several techniques to determine to determine a
company’s financial condition and make decisions regarding improvements.
The following methods of analysis are generally used

 Comparative statement analysis

 Trend analysis
 Common size statement analysis
 Fund flow analysis
 Cash flow analysis
 Ratio analysis
 Cost-volume-profit analysis
(e)COMPARATIVE BALANCE SHEET:
A comparative statement is a document that compares a particular
financial statement with prior period statements or with the same financial report
generated by another company. Analysts and business managers use the income
statement, balance sheet and cash flow statement for comparative purposes. The
process reveals trends in the financials and compares one company’s performance
with another business.

18
 Comparative financial statements are the
complete set of financial statements that an entity issues, revealing information for
more than one reporting period. The financial statements that may be included in
this package are:
 The income statement(showing results for multiple periods)
 The balance sheet(showing the financial position of the entity as of more
than one balance sheet date)
 The statement of cash flows(showing the cash flows for more than one
period)
(f)COMPARATIVE INCOME STATEMENT:
The income statement, or profit and loss statement,
shows sales minus expenses. The top line is the total amount earned in sales before
subtracting any expenses. Then, business expenses are listed and deducted until
this reach the bottom line, or net profit.
Comparative income statement will consist of two or three
columns of amounts appearing to the right of the account titles or descriptions.
(g)TREND ANALYSIS:
Trend analysis evaluates an organisation’s financial information
over a period of time. Periods may be measured in months, quarters, or years,
depending on the circumstances. The goal is to calculate and analyse the amount
change and percent change from one period to the next.
A month trend analysis looks at how a business
performs from one month to the next. If the business is growing one month to the
next, the assumption is that the business has a positive trend. But this approach
can be misleading and often gives a weak foundation for your assumptions.
A year-over-year trend compares a website’s performance over similar
time periods.

(h)COMMON SIZE STATEMENT:

A common-size financial statement is displays line items as a
percentage of one selected or common figure. Creating common-size financial

19
statements makes it easier to analyse a company over time and compare it with its
peers. Using common-size financial statements helps investor’s spot trends that a
raw financial statement may not uncover.
(i)COMMON SIZE BALANCE SHEET:
The common figure for a common-size balance sheet analysis
is total assets. Based on the accounting equation, this also equals total liabilities
and shareholders’ equity, making either term interchangeable in the analysis. It is
also possible to use total liabilities to indicate where a company’s obligations lie
and whether it is being conservative or risky in managing its debts.
(j)COMMON SIZE INCOME STATEMENT:
The common figure for an income statement is total top-line
sales. This is actually the same analysis as calculating a company’s margins. For
instance, a net profit margin is simply net income divided by sales, which also
happens to be a common-size analysis. The same goes for calculating gross and
operating margins. The common size method is appealing for research intensive
companies, for example, because theyvtend to focus on research and
development(R&D) and what it represents as a percent of total sales.

20
Chapter-3
3.1. industry profile

Mining industry is playing a vital role in the growth and development of our
national economy. Without minerals from mining there is no progress to other industries.
Minerals are valuable natural resources as they form the basic raw materials for most of the
industrial products. Minerals, natural substances got from the earth by mining are the
backbone of the other industries.

The mineral industry comprising mining,geology,mineral

processing,metallurgy and materials is characterized by distinctive and special features and
considered as dynamic in nature. The country is heading towards a stage where larger
consumption of mineral will be required to sustain even the minimum growth rate of our
economy.

It is an industry meeting the basic raw materials requirement of various finished

products. It is beyond doubt that the mining industry is fairly big in size encompassing a large
industrial work force. Mining industry in india has a distinction of extremely good record of
safety despite the fact that it is hazardous by it’s very nature and growth in big size ,in terms
of manpower and production in the past. The Nodal safety agency of government of
india(DGMS)records reveal that compared to other neighbouring mineral producing
countries,the accident rate is less.

Mining activity in AP is not an exception even

though it contributes just 11% of total mineral production in the country by way of producing
around 27 million tones of important ores and minerals.

The production of metallic and non-metallic major minerals in the

country is of the order of 242 million tones.More than 3000 operative mines of small and big
are operating in india. The industry is significantly important from the view of export earning
and GDP contribution to national income.

APMDC-an agent of government of AP, guide and partner in exploring mineral

wealth of AP, entrusted with the objective of exploring mineral wealth in a planned and
regulated manner with application of higher technology, value addition and marketing offer
excellent oppurtunities for investors in mineral sector.

BARYTES:

Barytes, which is chemically BaS04, is also known as “Heavy Spar”.Barytes has a

high specific gravity of 4.2-4.6. It is chemically inert and almost insoluble in water. Total
estimated reserves of barites in the country are 87 million tones are located in the state of AP
other than small amounts in Himachal Pradesh and Rajasthan. Barytes mining activity in the
state and in the country was boosted only after the discovery of the deposit in mangampet in

21
kadapa dist. Even almost 95% of the mineral production comes from mangampet. The
mangampet barites deposit is the largest and thickest among the known barites deposits of the
world,having a maximum thickness of 40 meters.

In the view of the featured enumerated, the deposit is indeed unique in the entire
world and it is a rare privilege to have such deposit.

Uses:
 To the oil well drilling industry where it is used as a weighting agent in
drilling fluids.
 Barytes powder is mixed in suitable proportion with colloidal clay like
bentonite and water to form drilling mud.
This mud acts as:
 As a lubricant and cool the drilling bit.
 Imparts an inert coating to the walls of the drill hole.
 Brings the drill cuttings to the surface and
 Counteracts the oil and gas pressure to prevent blow-outs.
The 3 chief products of Barium Minerals are:
 Ground Barytes
 Lithopone Paint
 Barium Chemicals
Mangampet Barytes being grey in colour is used mostly in oil well drilling and
chemical industries. This barites has been divided into four grades namely A,
B, C and D grades depending upon its specific gravity as noted below.

22
 A-Grade Barytes-4.20 specific gravity & above
B-Grade Barytes-4.19-4.10 specific gravity
C-Grade Barytes-4.09-4.00 specific gravity
D-Grade Barytes-Less than 4.00 & upto 3.50 specific gravity
The A Grade barites are being used in oil well drilling and B
grade in chemical units for manufacture of barium carbonate. The C&D grades of
barites are accumulated over a period of time and sold on “as is where is” basis
after calling for tenders.
MINING COMPANIES IN INDIA:
The mining industry in india encompasses exploration of new minerals and mines
and production of mineral resources from the various mines and production of
mineral resources from the various mines and production of mineral resources
from the various mines already in operation. The Indian mining industry both
metallurgy mining and mineral mining. Together they from the backbone of
industrial development in india because they provide the raw materials like coal,
petroleum, steel, copper, aluminium metals like to Indian manufacturers.
Mining has been occurring in india over 6000 years. The
oldest mines are led and zinc deposit in Karnataka, copper deposit in khetri, and
gold deposit in Karnataka.
Products mined in india include a total of 84 mineral
constricting of 4 fuels, 49 non-metallic minerals, and 20 mining minerals.
India’s contribution to mineral production in the world is great,
india is the leading producer of mica in the world and rank in the top ten for
production of chromate, coal, iron ore, bauxite, manganese, and aluminium.
Some Indian firms use service contracts with overseas firms to find
their operations.

 Bharath aluminium companies limited

 Bharath petroleum companies limited
 Bombay minerals
 Easel mining and industries limited
 Gas authority of india limited

23
  Hindustan petroleum corporation limited
 Indian oil corporation
 Indian petrochemicals corporation
 Kariganur mineral mining industry
 Kerala minerals and metals
 Naively lignite corporation
 Oil and natural gas corporation
 Reliance industries limited
NEW MINING AFFECTS ENVIRONMENT:

 AIR: Surface mines may produce dust from blasting operations and haul
roads. Mines release methane a greenhouse gas. Smelter operation in
insufficient safeguards in place have the potential to pollute the air with
heavy metals. Sulphur dioxide, and other pollutants.
 WATER: The mining sector uses large quantities of water, through some
mines do reuse much of their water intake. Mining throws supplied-
containing minerals in to the air ,where they oxidized and reacts its water to
from sulphuric acid. This together with various tracle elements impact
ground water, both from the surface and underground mines.
 LAND: The movement of rocks due to mining activities and overburden in
the case of surface returns the rock and overburden to the pit from which
they were extracted. Many copper mines, grex, extract ore that contains less
than copper.
 Health & Safety: Mining operations range from extremely hazardous to
being as safe or as dangerous as any other large scale industrial activity.
In India this sector is facing several challenges which are;

 Massive investment required in the exploration and the up-gradation of

technology.
 Mitigation of environment degradation due to mining
 Adoption of environment friendly technology
 Rehabilitation of closed abandoned mine sites
The government, at both central and state levels, has to address
these issues by formulating appropriate policies and effectively

24
 implementing them for the overall development of the sector which is
environmentally sustainable.
EFFECTS OF MINING ON THE ENVIRONMENT IN INDIA:
The mining industry in india plagued by several environmental
health and safety related problems. Several accidents are taken place in
underground and surface mines like coal and stone of mines in the last few years,
which have killed in the score of mine workers.

3.2COMPANY PROFILE
INTRODUCTION
The Andhra Pradesh Mineral Development Corporation Ltd., was
incorporated on 24th Feb 1961.APMDC LTD. is registered under the companies
Act 1956 with an authorized capital of Rs.50 lakhs with full participation by
government of Andhra Pradesh. The Authorized capital has increased, over time,
to Rs. 10 crores while the paid up capital is Rs.630.62 lakhs.

HISTORICAL PERSPECTIVE:
The Andhra Pradesh Mineral Development Corporation
Limited(APMDC) was incorporated in the year 1961 as a wholly state owned
undertaking of Govt Of Andhra Pradesh, having its registered office at 8-3-945 2nd
floor, Pancom business center, Ameerpet, Hyderabad-500073. It contributes 95%
of the production in the country. APMDC maintains international standards in
barites quality.
The barites deposit at mangampet in kadapa dist is the world’s
single largest deposit containing about 74 million tons of grey barites. The major
applications of barites are for use in oil exploration and manufacture of barium
chemicals. The deposit is 6 well connected by all-weather road and rail to the
nearest major port at Chennai.

25
 The AP government during the year 1978 took a policy decision to
restrict mining at mangampet only under the aegis of a government undertaking
namely APMDC. Accordingly the whole mineral bearing area slowly started
coming into the fold of APMDC and now the entire mineral bearing area is under
control of the government owned company APMDC.
The mangampet barites project is being headed by the
project manager, who in turn is helped regularly by different departmental heads
such as mining, geology. Survey ,accounts, electrical, plant etc. In excavationand
sale of barites. The departmental heads in turn are helped by their subordinate
staff.
The industrial policy of Andhra Pradesh, 1995, envisages
development of mineral industry with private participation and encourage joint
sector operation with APMDC. The role of APMDC is identification of best
technology and attract investment for development of mineral wealth from all over
the world for participation in joint sector for development of certain valuable
minerals like bauxite, heavy mineral beach sands, barites etc.
OBJECTIVES OF THE CORPORATION:

 Development of mineral resources including exploration, exploitation and

benefication.
 Development of mineral industry with private participation.
 Identification of the best technology and investment for development of
mineral resources.
COMPANY VISION:

26
  APMDC providing excellent opportunities in mineral development.
COMPANY MISSION:
 Exploration and exploitation of mineral resources.
 Establishment and promotion of mineral based industries.

PRODUCTS IN APMDC:
 GALAXY GRANITE
 BAUXITE
 BARYTES
 IRON ORE

GALAXY GRANITE:

 This material dark background with golden specks in it.

 It is mainly used for flooring, cladding, kitchen counters and table tops.
 Looks best when it is galaxy, available in both slabs and tiles.

Galaxy granite is a rare and unique occurrence.

27
BAUXITE:

The bauxite reserves in india are placed at 3037 million tons. The
recoverable reserves of bauxite in AP are estimated at 546.30 million tons.
Almost entire quantityis of metallurgical grade.

BARYTES:

Considered to be the world’s single largest deposits of barites, the

mangampet area in kadapa district contains an estimated reserve of 72
million tons. Small and stray deposits are also found in khammam, Kurnool,
kadapa, mahbubnagar and anantapur districts.

28
IRON ORE:
The iron ore deposit(magnetite) near ongole, prakasam district occur as
small detached hillrocks, and are 19 kms, from the east coast. Konijedu-
marlapadu is the single large deposit with 66 million tons of magnetite ore.
The iron ore occurs in the form of banded magnetite quartzite along the hill
ridges. The high quality concentrate from the ore is found to be suitable for
feed as pellets in direct reduction furnaces.

IRON ORE
29
CHAPTER-4
4.1 ANALYSIS STUDY

CASH FLOW STATEMENT FOR THE PERIOD FROM 02.06.14 to 31.03.15

Rupees in Lakhs

For the Period from 02.06.14 to 3.1.03.15

CASH FLOW FROM OPERATING ACTIVITIES:
Profit before taxation 13,422.36
Adjustment for
Depreciation 251.06
Interest on FD, Elec Deposits & Nsc Bonds (8,705.67)
Dividend Income (13.20)
Interest expenses 46.13
Excess Provision written back (2.06)
Govt Grant Amortised (0.19)
Profit on sale of Fixed Assets -
Fixed Assets written off -
Loans & Advances written off -
Operating Profit before working capital changes - 8,423.93
4,998.43
Trade receivables 240.59
Inventories (2,873.47)
Current Liabilities (1,103.54)
Loans & Advances, Deposits 16,152.98
Other Current Assets (0.21)
Trade payables (18,544.80)
Provisions 66.64 (6,061.82)
Transfer to TSMDC (43,586.71)
Taxes paid (6,615.42)
Cash flow from Operating activities (51,265.52)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of Fixed Assets & WIP (420.29)
Dividend received 13.20
Interest on FD, Elec Deposits & NSC Bonds 10,789.09
Investment in Fixed Deposits & NSC 56.89
Sale of Assets 6.41
Cash flow from Investing activities 10,445.29
CASH FLOW FROM FINANCING ACTIVITIES
Loans 1,500.00
Interest expenses (0.92)
Other long Term Liabilities 12,942.05
Cash flow from Financing activities 14,441.13
Net increase/(Decrease) in cash and equivalent (26,379.09)
Cash & Bank balances at beginning of the year 95,493.35
Cash & Bank balances at end of the year 69,114.26
Increase/(Decrease) in cash and equivalent (26,379.09)

Interest on FD, Elec Deposits & Nsc Bonds (8705,66,609)

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Workings
Fixed Assets Reconciliation
(i) Opening Fixed Assets 1809,13,919
(ii) Less: Depreciation (251,05,851)
(iii) Less: WDV of Assets sold (6,40,936)
(iv) Less: Charged to Reserves (55,14,228)
(v) Balance (i-ii-iii-iv) 1496,52,905
(vi) As per balance sheet - Closing Fixed Assets 1916,82,280
Purchase of Assets (vi-v) (420,29,376)

Tax paid Reconciliation

Amount charged to P&L A/c 4699,03,314
Less: Opening balance of Advance Tax (2068,54,467)
Add: Closing balance of Advance Tax 3984,92,910
Tax paid 6615,41,757

Loans & Advances, Deposits Reconciliation

Increase in short term loans and advances 28581,01,462
Increase in long term loans and advances (14344,42,155)
Increase in Current Tax Asset 1916,38,443
16152,97,750
Reserves & Surplus reconciliation
Transferred to TSMDC
Reserve for bad & doubtful debts 35,31,399
General Reserve 6671,55,369
Profit & Loss Account 36870,01,691
Deferred Tax Liability 9,83,008
Total amount 43586,71,467

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 CHAPTER-5:
5.1.FINDINGS
 In the year 2015-2016 the current assets is double than the current liabilities.
 The analysis of financing of apmdc ltd,the year 2014-2015 is increased by
1.936% at that time the fixed assets are decreased.
 It indicates company increase its application of fund during this year.
 It indicates company clear its liabilities by generating fund for sale of current
liabilities and working capital.
 The ideal ratio of current ratio is 2:1.
 We have observing that over the past few years the company reserves and
surplus is constantly increasing.
 It means that the company performance is well.

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 5.2. suggestions:
 In all above years the working capital is good but in the last year 2017-2018
the working capital is negative.
 In such cases the company should go for long term borrowings to settle the
short term liabilities which will affect the company in the long run if the
performance is not good.
 The company is having another option to sell the investments to pay off the
liabilities.
 The company future plan for expansion seems clear due to increased
investments in fixed assets efficient use of these assets has enabled the
company to observe increased profit.

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 5.3.conclusions:
 The performance of the “ANDHRA PRADESH MINERAL
DEVELOPMENT CORPORATION” Ltd is highly satisfactory in the way of
utilization of funds and allocation of funds, the company reserves and
surplus are increased year by year. So utilize these reserves and surplus for
implementing new technology and equipment’s for collecting the minerals,
the overall performance of the company is satisfactory working capital
turnover decreased in some years so the firm may take steps to improve the
working capital turn over in the forthcoming years.

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 BIBILIOGRAPHY
BOOKS
1. T. Ramachandra, Accounting and financial management, sci tech
publications Pvt Ltd.
2. S.N. Maheswari financial management, sultan chand & sons, New Delhi.
3. R.K. Sharma & shashi K. Gupta financial gouse pvt ltd, New Delhi.
4. Prasanna Chandra, financial management 3rd edition, Tata Mc Graw Hill
publishing co.ltd, New Delhi.

WEBSITES:
 WWW.apmdc.goc.in.
 WWW.wikipedia.com.

ANNUAL REPORTS:
 Company Annual Reports of 2013-2018.


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 ANNEXURE
ANALYSIS OF COMMON SIZE BALANCE SHEET OF APMDC LTD

PARTICULARS YEAR ENDING 31ST 2015% 2016%

MARCH
2015 2016
Source of funds
1.shareholders funds
a)share capital 63062000 63062000
b)reserve surplus 351603441 471792515 84.78 88.203
2.secured loans -
3.deferred govt grants 37235 35002 0.0008 0.006
total 414702676 534889517 100 100
Application of funds
a)fixed assets 30618302 32238587 7.38 6.02
b)investments 15990360 15990360 3.85 2.98
c)deferred tax 11952738
d)current assets
Inventories 17709650 22801070 4.27 4.262
Sundry debtors 128763249 66653866 31.05 12.461
Cash and bank 332817536 539232743 80.25 100.81
Other current assets 12663743 15644347 3.05 2.924
Loans and advances 144069089 218007303 34.74 40.757
(-)current liabilities
liabilites 178323770 198444344 43.00 37.10
provisions 101558221 186157285 24.48 34.804
total 414702676 534889517 100 100

INTERPRETATION:
The percentage of current assets and current liabilities is 2:1. The percentage of
fixed assets is less than the base year. Debtor’s value is decreased. So the
performance of company is good.

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