A

PROJECT REPORT

ON FINANCIAL ANALYSIS

OF

ASIAN FOOD INDUSTRIES

Importers, Exporters of All Kind Of Food stuff & Manufacturers
of All Kinds of Spices

-: PREPARED BY:-
Mitul. D. Shah
Enrol. No. 4740900308

-: GUIDED BY:-
MAYANK MEHTA
NEHA PANCHAL
TAPAN SHAH
 PREFACE

As a management student of M.B.A. I have visited “ASIAN FOOD

INDUSTRIES” Dabhan Ta. Nadiad as a part of my study the report is the direct
out come of the visit conducted by me.

We learn theoretical portion. It may not be enough for the students of

M.B.A. and therefore practical training is useful. It is very true that, “Experience is
the best teacher”. This sentence is true in every field, so summer internship is
arranging by the college to enhance the skill, attitude and abilities. I have also
expressed those industrial training a great opportunity which has provided me a
great satisfaction where I had given all the possible information regarding
FINANCIAL MANAGEMENT.
 ACKNOWLEDGEMENT

I should feel my self lucky that I got the great opportunity to have the
practical training at “ASIAN FOOD INDUSTRIES“ permitting me. I am very
thankful to the staff as provided us information.

I am also very much thankful to our honorable directed Mr. Manish

Amin for function of our studies which proved very helpful in our practical studies.

I express my sincere thanks to Mr. Ajay Kumarlal Tahelayani, without

whose permission and support this report will not have been in existence.

I am extremely very thankful to Mr. Mayank Mehta (Chief accountant)

who had encouraging and helping us in preparing the project report and I also
thankful to Ms. Neha Panchal (Proprietor assistant).

Lastly I would like to thank my friends for their marvel support.

Shah Mitul D.
INTRODUCTION OF

THE

COMPANY

ASIAN FOOD INDUSTRIES

 A successful organization is a combination of an efficient management
and latest technology. Asian Food Industry strongly believes that third and most
important element in this combination is a product that is nurtured from the finest.

Asian Food Industries started 30 years back with a traditional grinding

mill. It grew steadily to own up a successful market share in the domestic market.

We are located at every heart or centre of spices Gujarat. This means

that we procure the best raw material from the market as well as the farmers in
order to develop quality products for their consumer at most competitive rates.

OFFICE ADDRESS
Chanaky Building,
B/H, Sales India,
Ashram Road,
Gujarat. (India)

FACTORY ADDRESS
N.H… No.8 Opp.ESCORT TRACTORS,
At Post, Dabhan,
Ta. Nadiad,
Dist. Kheda-387320,
Gujarat. (India)
 ARAB & INDIA SPICES [L.L.C]

Feeling the pulse of every customer’s requirement. That is what has

taken ARAB & INDIA SPICES [L.L.C] ahead of its competition.

Establishment in 1986, ARAB & INDIA SPICES was one of the first
millers of various kinds of pulses in the whole of Middle East region. Though
starting modesty with per day production of 4 mt, today the company has
surpassed production capacities of more that 12,000 mt per month and its annual
turnover exceeds Us $ 125 million.

Currently, the company imports raw pulses from most of the major
pulses producing countries like Myanmar, Australia, Canada, U.S.A., China and
India and specialized in MASOOR DAL ( red spilt lentils ), CHANA DAL,
MOONG DAL & URAD DAL ( washed split ) located within every region in
UAE with offices in Dubai, Sharjah & Ajman. They also have offices in Doha,
Oman, & India. They also cater to needs of selected customers in UK, USA,
CANADA, AUSTRALIA, and FAR EAST.

AJMAN
ARAB & INDIA SPICES,
P.O BOX 17799 AJMAN,
UAE.

DUBAI
ARAB & INDIA SPICES,
P.O BOX 28203 AJMAN,
UAE.
COMPANY
PROFILE
NAME OF COMPANY
Asian Food Industries
ADDRESS
ASIAN FOOD INDUSTRIES,
N.H No. 8,
OPP ESCORT TRACTOR,
AT, DABHAN,
TA. NADIAD,
DIST. KHEDA-387320,
GUJARAT (INDIA)

PARTNERS OF COMPANY
Mr. Kumarlal Meghraj Tahelyani
Mrs. Radhaben Kumarbhai Tahelyani
Mr. Ajay Kumarbhai Tahelyani
Mr. Harish Kumarbhai Tahelyani

AUDITOR
Mr. Chetan Shah (C.A)

PROPRIETOR ASSISTANT
Ms. Neha Panchal

TYPE OF COMPANY
Partnership firm

HISTORY:-
 Asian Food Industries is a partnership firm is established in January
1999. There are other two firms in the group
(1) INDIAN FOOD INDUSTRIES
(2) SPICES INDIA EXPORTS

Asian Food Industries is a main firm and mainly

exporting spices and food stuff the others two firms are trading locally and
conducting export activities.

Asian Food Industries is registered SPICE

BOARD, COFFEE BOARD, TOBACCO BOARD, DIRECTORATE GENERAL
OF FOREIGN TRADE, AGRICULTURAL & PROCESSED FOOD PRODUCTS
EXPORT DEVELOPMENTAUTHORITY, FEDERATION OF INDIAN
EXPORT ORGANIZATION, SHELLAC, etc.

Firm mainly deals in chilly, chilly powder, turmeric powder,

tarmind, coriander, coriander powder, cumin seeds, ajwan, fenugreet, groundnut,
mustard seed, pulses, and 100 other items.

The customers are spread over the world in countries like UAE,
USA, UK, and Australia, Singapore, Arabian countries, etc.

The main partners are:-

 (1) Mr. Kumarlal Meghraj Tahelyani born in Nadiad Mr. Kumarlal has
started his business career at the age of 18 years only and he is now a
business tycoon in spices business. He has established these firms in
1999 after dissolution of his family business. He has also established
manufacturing as well as trading business in U.A.E. He is a mentor of his
family business.

(2) Mr. Harishbhai Kumarlal Tahelyani is a young energetic personality

handling the business firm in the name of Arab & India spices ltd., at
U.A.E. which is also a part of family business.

(3) Mr. Ajaybhai Kumarlal Tahelyani aged 30 years is also another young
asset of Kumarlal Meghraj family. He is handling the business
successfully from Nadiad to many other countries. He is in the business
since last 12 years.

Organizational structure
Every organisation made up of more than one person will need some form of
organisational structure. An organisational chart shows the way in which the chain
of command works within the organisation.

The way in which a company is organised can be illustrated for a packaging

company. The company will be owned by shareholders that choose directors to
look after their interests. The directors then appoint managers to run the business
on a day-to-day basis. In the company structure outlined above:
The Managing Director has the major responsibility for running of the company,
including setting company targets and keeping an eye on all departments.

The Distribution Manager is responsible for controlling the movement of goods in

and out of the warehouse, supervising drivers and overseeing the transport of
goods to and from the firm.

The Production Manager is responsible for keeping a continuous supply of work

flowing to all production staff and also for organising manpower to meet the
customers' orders.

The Sales Manager is responsible for making contact with customers and obtaining
orders from those contacts.

The Company Accountant controls all the financial dealings of the company and is
responsible for producing management accounts and financial reports.

Structures
 Other organisations will have different structures. For example most organisations
will have a marketing department responsible for market research and marketing
planning. A customer services department will look after customer requirements. A
human resources department will be responsible for recruitment and selection of
new employees, employee motivation and a range of other people focused
activities. In addition there will be a number of cross-functional areas such as
administration and Information Technology departments that service the functional
areas of the company. These departments will provide back up support and
training.

Organisations are structured in different ways:

1. by function as described above

2. by regional area - a geographical structure e.g. with a marketing

manager North, marketing manager South etc

3. by product e.g. marketing manager crisps, marketing manager drinks, etc

4. into work teams, etc.

Reporting in organisations often takes place down the line. An employee might be
accountable to a supervisor, who is accountable to a junior manager, who is then
accountable to a senior manager - communication and instructions can then be
passed down the line.

Bankers:-
 Bank of Baroda
 Bank of India
 I.C.I.C.I bank ltd.
 Indian bank
 Oriental bank of commerce
 State bank of India

Reasons For Selecting This Location

The location of company in the state of

Gujarat is consider as the center of spices, and has enabled it to avail the advantage
of procuring the best raw material directly from the market as well as the farmers
in order to deliver quality products to its consumers’ at most competitive rates.

ASIAN FOOD INDUSTRIES,

N.H No. 8,
OPP ESCORT TRACTOR,
AT, DABHAN,
TA. NADIAD,
DIST. KHEDA-387320,
GUJARAT (INDIA)

Infrastructure
 A successful organization is a combination of an efficient management and
latest technology to ensure this the production unit of company is well equipped
with latest machinery like individual spices grinding machines, automatic sieves,
sortex cleaning plant, ETO sterilizers etc. which is handled by skilled and
experienced staff completed set up for manual cleaning is also included to deliver
best quality product to its clients.

Measures Of Quality Control

To meet the customer concerns of food safety,

company have a fully equipped laboratory managed by skilled personnel who
continuously monitor and analyze the quality of the products right from the
procurement stage to the final dispatch of the products.

Quality Standards

All the products of Asian Food Industries are processed in most

hygienic conditions and environment.

For Asian Food Industries, quality is not an end but a journey.

It is imbibed in every product or service. A better quality of product and service
will never imply a higher a price as quality is a way of living for Asian Food
Industries.

Asian Food Industries believes in

“WHO ELSE CAN DEFINE OUR QUALITY STANDARDS IF NOT OUR
PROSPECTORS: OUR CLIENTS.”

With Asian food industries vast experience is this business, a

network of experienced and selected suppliers have been developed to ensure that
all of them follow the same principles and philosophy to quality as Asian Food
Industries do.

All consignments are examined by independent and reputed

laboratories for a full quality assurance to every client.

PROCEDURE:-

Asian Food Industries deals two procedures.

 Direct trading
 Factory trading

Direct Trading:-

In direct trading both purchase and sales orders are going parallel.
Both purchase and sales price vary everyday. So the price list also fluctuates
(sometimes price list is to be prepared 3to4 times a day). On one side owner
inquires the price of items and on other side selling price list is made. According to
the estimation of requirement owner makes the purchase order. But do not provide
marking(branding) to the supplier. On other hand marketing department brings the
export (sales) order. After the order is received marking is given to the supplier.
Supplier according to order fills the container ad directly send to the port and also
send sample to the main office once the container reaches the port company’s CHA
breaks the seal of the container and sends sample to main office. The samples are
matched and if quality is good the container is accepted or otherwise rejected. The
goods are checked by the custom people on the port fumigation is done if required,
Central Excise checking is done if requried, spice board is informed for checking if
requried. If everything is ok, the container is closed with firms seal or excise seal
whichever is applicable and is loaded in ship bill of lading is received by export
department. Once bill of lading is received post-shipment documents are sent to
buyers’ bank. Then tracking is done by export department to see where the ship has
reached and to see ETD, ETA etc. and our buyer is informed accordingly. When
buyer receives the post shipment document from bank after paying the sales
amount in the bank after receiving the payment the transaction is completed.

FACTORY STUFFING:-
 The purchasing is made by the owner.Once the goods are packed export
house is informed. If the goods are chilly powder, curry powder, garam masala
powder, turmeric powder. It is mandatory to get spice board clearance. So export
department informs spice board executives of (Inspectorate Griffith India Pvt.
Ltd) Spice board comes in factory and takes the sample and seals the rest of the
finished goods of that particular order. And after the result are declared and are in
favor of firm. The container is called by the export department person, and all the
process of fumigation, custom and excise if required. Then the container is loaded
and sealed under self-sealing or excise sealing whichever is applicable and is sent
to port to firms CHA for loading purpose. And after the container is loaded in the
ship the process is same according to direct trading.
 COMPANY
PRODUCTS

DESCRIPTION (Ground spices )

 Amchur powder
 Black pepper powder
 Black salt powder
 Cardamom powder
 Chilly crushed
 Chilly powder gondal
 Chilly powder kashmiri
 Chilly powder reshampatti
 Chilly white powder
 Cinnamon powder
 Cloves powder
 Coriander powder
 Coriander-cumin powder
 Cumin powder
 Curry powder
 Fennel powder
 Fenugreek powder
 Ganthoda powder
 Garam masala powder
 Garlic powder
 Ginger powder (desi)
 Ginger powder (kali cut)
 Javentary powder
 Methi kuria
 Mustard powder
 Nutmeg powder
 Papad khar
 Pav bhaji masala
 Pickle masala
 Rai kuria
 Red chilly powder (ex. Hot)
 Turmeric powder
 White pepper powder

DESCRIPTION (whole spices)

 Sesame seeds brown

 Sesame seeds black
 Amchur slices
 Takaria
 Dhana dal yellow
 White pepper
 Whole
 Sesame seeds roasted
 Charoli
 Ajwian seed
 Bay leaves
 Black cardamom
 Black pepper whole
 Cardamom seeds 8MM
 Charmagaj
 Chilly whole round
 Chilly whole wlostem
 Cinnamon stick flat
 Citric acid
 Cloves
 Coriander whole
 Cumin seeds
 Dhana dal roasted
 Dill seeds
 Fennel seeds
 Shah jeeru
 Kalonji
 Kokum lunavla
 Kokum phool
 Fennel seeds lucknowee
 Javentari whole
 Methi seeds
 Mustard seeds
 Nutmeg whole
 Poppy seeds
 Red chilly whole (w/o stem)
 Red chilly whole round
 DESCRIPTION (miscellaneous)

 Wheat whole
 Wheat cracked
 Dalia whole
 Dalia split
 Sabudana
 Jowar
 Bajri
 Chana with skin
 Basmati mumra
 Kolapuri mumra
 Surti mumr
 Poha thick
 Poha thin
 Poha nylon

DESCRIPTION (Flours)

 Moong flour (green)

 Moong flour (white)
 Corn flour
 Cream of rice/ Rava idli flour
 Laddu besan
 Chappati flour
 Sooji fine
 Rajagra flour
 Singoda flour
 Maida flour
 Bajra flour
 Wheat flour
 Jowar flour
 Handwa flour
 Mathia flour
 Dhokla flour
 Kodri flour

DESCRIPTION (Mukhwas)

 Gujarati mukhwas
 Manpasand mukhwas
 Pan masala mukhwas
 Poona special mukhwas
 Rangoli mukhwas

DESCRIPTION (miscellaneous)

 Fatakdi
 Chana mahabaleshwari
 Himaj black
 Fennel seeds sugar coated
 Edible gum (gundar)
 Phoa makai
 Bhel mumra special
 Daria salted

DESCRIPTION (Dals)

 Chora dal
 Green chana
 Muth beans
 Red chori
 Toor dal (dry)
 Toor dal (oily)
 Val dal
 Val whole
 Vatana yellow
 FINANCIAL
DEPARTMENT

FINANCIAL DEPARTMENT

Financial management is in many ways an integral part of the jobs of

manager. However, we can list out the following important functional areas of
modern management, which are the responsibility of financial managers are
dispersed throughout the organization.
 fD
O
y
F
s
fi
P
v
e
d
u
b
k
W
g
ilm
c
rp
C
n
o
ti
x
ta
& Functional areas of financial management
Functional areas of financial management:

The two key financial officers of the firm are the treasure and the controller.

TREASURE:-

The responsibility of treasure is to

 Obtain finance
 Banking relationship
 Cash management
 Credit administration

The responsibility of finance manager at Asian Food Industries is that of the

treasure officer. The financing of AIT is done by the banks named.

 Indian Bank
 Oriental Bank of commerce
 State Bank of India

Financing are of two types:

 Fund Based activities
 Non Fund Based activities

And some of the types of the credit they include are

Fund Based

 Over draft
 Packing credit etc.

Non Fund based

 Bank guarante
 Letter of credit etc.
 FINANCIAL
ANALYSIS

(1) Result Of
Operation
 Result Of Operation

SALES

2008-2009 1,30,65,40,732.73
 2009-2010 1,64,80,67,101.95

NET PROFIT

2008-2009 1,45,73,502.39
2009-2010 4,51,64,471.32

TOTAL ASSET

2008-2009 9,72,09,894.57
2009-2010 82,65,99,123.35

TOTAL CAPITAL

2008-2009 19,92,54,301.48
2009-2010 17,58,12,111.38

FINANCIAL HIGHLIGHTS

SALES

2008-2009 1,30,65,40,732.73
2009-2010 1,64,80,67,101.95
 1800000000

1600000000

1400000000

1200000000

1000000000

800000000
SALES
600000000

400000000

200000000

0
2008-2009 2009-2010

NET PROFIT

2008-2009 1,45,73,502.39
2009-2010 4,51,64,471.32
50000000

45000000

40000000

35000000

30000000

25000000

20000000 NET PROFIT

15000000

10000000

5000000

0
2008-2009 2009-2010

TOTAL ASSET
 2008-2009 9,72,09,894.57
2009-2010 82,65,99,123.35

900000000

800000000

700000000

600000000

500000000

400000000
TOTAL ASSET
300000000

200000000

100000000

0
2008-2009 2009-2010
TOTAL CAPITAL

2008-2009 19,92,54,301.48
2009-2010 17,58,12,111.38

205000000

200000000

195000000

190000000

185000000

180000000
Column2
175000000

170000000

165000000

160000000
2008-2009 2009-2010
 RATIO
ANALYSIS

Meaning:
 Ratio shows the relationship between two or more variable. For example
in order to obtain the rate of return on paid up capital, the net profit of the business
is divided by the paid up share capital the figure obtained is the ratio. If the same is
multiplied by 100, a percentage rate of return on paid up capital is obtained.

IMPORTANCE

Ratio is very important concept in financial analysis. Which are as follow.

 PROFITABILITY:
Useful information about the trend of profitability is
available from profitability ratios. The gross profit ratio, net profit ratio & ratio of
return on investment give good idea of the profitability of business. On the basis of
these ratios, investors get an idea about the overall efficiency of business, the
managements gets an idea about the efficiency of managers and bank as well as
other creditors draw useful conclusions about repaying capacity of the borrowers.

 LIQUIDITY:
Infect, the use of ratios was made initially to ascertain the
Liquidity for business. The current ratio, liquid ratio & quick ratio will tell
whether the business will be able to meet its current liability as and When they
mature. Banks and other lenders will be able to conclude from these ratios whether
the firms will be able to pay regularly the interest and loan installments.

 EFFICIENCY:
The turnover ratios are excellent to measure the Efficiency of
managers. For example, the stock turnover will indicate how efficiently the
collection department will work and asset turnover show the efficiency with which
the assets are used in business all such ratios related to sales present a good picture
of the success or otherwise of the business.

 INTER FIRM COMPARISION:

 The absolute ratios of the firm are not of much use,
unless they are compared with similar ratios of the other firms belonging to the
same industry. This is interring firm comparision, which shows the strength and
weakness of the firm as compared to other firms and will indicate corrective
measures.

 INDICATE TREND:
The ratios of the last three to five years will indicate the trend
in the respective fields. For e.g. the current ratio of the firm is lower than the
industry average but if the ratios of last five years show an improving trend, it is an
encouragement trend.

 USEFUL FOR BUDGETARY CONTROL:

Regular budgetary reports are prepared
in a business where the system of budgetary control is in use. If various ratios are
presented in those reports; it will give a fairly idea about various aspects of
financial position.

 USEFUL FOR DECISION MAKING:

Ratio guide the management in making some
of the important decision. The liquidity ratios show an unsatisfactory position then
management may decide to get additional liquid funds. Even for capital
expenditure decision, the ratio of return on invetment will guide the management
about the efficiency of various departments. Scan is judged on the basis of their
profitability ratio and efficiency of each department.
 PROFITABILITY RATIO

(1) Gross Profit Ratio:-

It is a ratio expressing relationship between gross profits
earned to net sales. It is auseful indication of the profitability of business.

FORMULA:

Gross Profit Ratio = GROSS PROFIT * 100

NET SALES

2009-2010 = 120265595.22 * 100

1648067101.95

= 7.30%

2008-2009 = 90548622.72 * 100

1306540732.73

= 6.93%
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
GROSS PROFIT
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows percentage of gross profit on sales. The

higher the ratio the higher the profitability of the company. Here the ratio of 2009-
2010 is 7.30% & in 2008-2009 it was 6.93% which is less compare to current year.
So, it is good for the company.
(2) Net Profit Ratio:-

The ratio is valuable for the purpose of ascertaining the overall

profitability of business and show the efficiency or operation of business. It is the
reverse of the operating ratio.

FORMULA:

Net Profit Ratio = Net PROFIT * 100

NET SALES

2009-2010 = 45164471.32 * 100

1648067101.95

= 2.74%

2008-2009 = 14573502.39 * 100

1306540732.73

= 1.12%
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
NET PROFIT
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows percentage of net profit on sales. The higher

the ratio the higher the profitability of the company. Here the ratio of 2009-2010 is
2.74% & in 2008-2009 it was 1.12% which is less compare to current year. So, it is
good for the company.
(3) Operating Expense Ratio:-

It is a ratio showing relationship between costs of goods sold,

operating expense to a net sale. It shows the efficiency of the management. The
higher the ratio the less will be the margin available to proprietors.

FORMULA:

Operating Ratio = COST OF GOODS SOLD + OPERATING

EXPENSES * 100
NET SALES

2009-2010 = 1527801506.73+78222588.81 * 100

1648067101.95

= 97.45%

2008-2009 = 1215992110.01+79098017.57 * 100

1306540732.73

= 99.41%

Where,

COGS = net sales – gross profit

08-09 = 1306540732.73 - 90548622.72
09-010 = 1648067101.95 – 120265595.22
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
OPERATING RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows percentage of operating expenses on sales.

The lower the ratio it is good for the company. Here the ratio of 2009-2010 is
97.45% & in 2008-2009 it was 99.41%. So in current year it is less as compare to
previous year. This is good for company. & it shows good position of company.
(4) Return On Capital Employed Ratio:-
It is an index of profitability of business and it is obtain
by comparing net profit with capital employed the ratio is normally expressed in
the percentage. The more the EBIT in relation to the amount of capital employed
the more efficient the success of company. As the success of the enterprise is
judged with the help of this ratio.

FORMULA:

Return On Capital Employed Ratio = EARNING BEFORE INT

& TAX * 100
CAPITAL EMPLOYED

2009-2010 = 45620811.32 * 100

605251025.14

= 7.54%

2008-2009 = 10205485.26 * 100

491444759.3

= 2.08%
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00% RETURN ON CAPITAL EMPLOYED

RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows the rate of return on capital employed. The

higher the ratio, the higher profitability of the business. Here, the ratio in 2009-
2010 is 7.54% & in 2008-2009 it is 2.08%. So, compare to previous year the ratio
is more in current year, which shows good position of the company.
 LIQUIDITY RATIO

(1) Current Ratio:-

The most widely used ratio shows the proportion of current
assets to current liabilities. It is also knows as working capital ratio as it is measure
of working capital available at a particular time the ratio is obtained by dividing
current asset by the current liabilities. It is measure of short term financial strength
of the business and shows whether the business will be able to meet its current
liabilities as and when they mature.

FORMULA:

Current Ratio = Current Asset

Current Liabilities

2009-2010 = 499736694.15
176183626.89

= 2.84:1

2008-2009 = 332287312.37
1057675135.27

= 3.14:1
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
CURRENT RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows liquid position of the business. The higher

the ratio, the liquid position of the business is better. 2:1 is the ideal ratio. Here, the
ratio in 2009-2010 is 2.84:1 & in 2008-2009 it was 3.14:1.So the ratio in current
year is good as compare to ideal ratio 2:1 but compare to previous year it is less.
This is not good for company.
(2)Liquid Ratio:-

A variant of current ratio is the liquid ratio or quick ratio which is

designed to show the amount of cash available to meet immediate payments. It is
obtained by dividing the liquid assets by liquid liabilities.

FORMULA:

Liquid Ratio = Liquid Asset

Liquid Liabilities

2009-2010 = 321926800.15
176183626.89

= 1.83:1

2008-2009 = 175421812.37
105765135.27

= 1.66:1

Where,
Liquid asset = Current asset – stock
Liquid liabilities = Current liabilities - BOD
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
LIQUID RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows better liquid position of the business. 1:1 is

the ideal ratio. Here, the ratio in 2009-2010 is 1.83:1 & in 2008-2009 it was
1.66:1.So the ratio in current year is good as compare to ideal ratio 1:1 & compares
to previous year it is also more. This is good for company.
(3)Quick Ratio:-

The measure of absolute liquidity may be obtain by comparing

only cash and bank balance as well as readily marketable securities with liquid
liabilities. This is very exactly standard of liquidity and it is satisfactory if the ratio
is 0.5:1. It is computed by the dividing the value of quick assets by liquid
liabilities. It’s also known as acid test ratio & some called it as absolute liquidity
ratio.

FORMULA:

Quick Ratio = Quick Asset

Liquid Liabilities

2009-2010 = 96560993.11
176183626.89

= 0.55:1

2008-2009 = 10685771.87
105765135.27

= 0.10:1

Where,
Quick asset = Current asset – stock- debtors
Liquid liabilities = Current liabilities - BOD

GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
QUICK RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows whether the company will be paid its

current liabilities immediately or not. 1:1 is the ideal ratio. Here, the ratio in 2009-
2010 is 0.55:1 & in 2008-2009 it was 0.10:1. In 2009-2010 it is near to ideal ratio
as compare to previous year. This is good for company.
 LEVERAGE RATIO

(1) Proprietary Ratio:-

The ratio shows the proportion of proprietor’s funds to the
assets employed. In the business the proprietor’s funds or shareholders equity
consist of share capital and reserve & surplus.

FORMULA:

Proprietary Ratio = Proprietor’s funds

Total Asset

2009-2010 = 175812111.38
826599123.35

= 21.27%

2008-2009 = 199254301.48
597209894.57

= 33.36%
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
PROPRIETORY RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

It shows the proportion of proprietary fund with total real

assets. This ratio indicates unsatisfactory position of the business. Because
proprietary funds are lower than industry average in both the years.
(2)Debt Equity Ratio:-

This ratio is only another form of proprietary ratio and

establishes relationship between the outside long term liabilities and owner’s
funds. It shows the proportion to long term external equities and internal equities
i.e. proportion of funds provided by shareholders or proprietors.

FORMULA:

Debt Equity Ratio = Long term Liabilities

Owner’s fund

2009-2010 = 429438913.76
175812111.38

= 2.44:1

2008-2009 = 292190457.82
199254301.48

= 1.47:1
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
DEBT EQUITY RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows the proportion of long-term liabilities with

owner’s fund. This ratio indicates poor financial position of the business. Because
the company more depends upon to outside liabilities. In 2009-2010 the condition
is poorer as compare to previous year 2008-2009.
(3)Total Debt Equity Ratio:-

This ratio is establishes relationship between the outsider

long term liabilities plus short term liabilities and owner’s funds. It shows the
proportion of total long term external equities and internal equities.

FORMULA:

Total Debt Equity Ratio = Total Debt

Equity

2009-2010 = 605622540.65
175812111.38

= 3.44:1

2008-2009 = 397955593.09
199254301.48

= 1.20:1
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
TOTAL DEBT EQUITY RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows the proportion of long-term liabilities with

owner’s fund. This ratio indicates poor financial position of the business. Because
the company more depends upon to outside liabilities. In 2009-2010 the condition
is poorer as compare to previous year 2008-2009.
(4)Long Term Fund To Fixed Asset:-
This ratio is establishes relationship between the long term fund
& fixed assets. It shows the proportion of long term fund used to purchase fixed
assets. It also show if short term funds have been used in purchasing fixed assets &
proportion of short term obligations firm have.

FORMULA:

Long Term Fund to Fixed Asset = Long Term Funds

Fixed Assets

2009-2010 = 605251025.14
112711684.20

= 5.37:1

2008-2009 = 491444759.3
72876162.20

= 6.74:1
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00% LONG TERM FUND TO FIXED

ASSET
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio shows the relationship of long term funds to

fixed assets. The ratio must be 1:1 or more. Here, the ratio in 2009-2010 is 5.37:1
& in 2008-2009 it was 6.74:1. So, the ratio was good in previous year than the
current year. So, in current year the ratio did not show the good position as
compare to previous year.
 EFFICIENCY RATIO

(1)Stock Turnover Ratio:-

The number of times average stock is turned over during
the year is known as stock turnover ratio. Average stock is average of opening and
closing stock of the year. The higher the ratio more profitable the business would
be & lower turnover indicates low quality of goods which is danger signal for the
management.

FORMULA:

Stock Turnover Ratio = Cost Of goods Sold

Average Stock

2009-2010 = 177809894
164806710.95

= 10.78 times

2008-2009 = 1215992110.01
138452075

= 8.78 times

GRAPH
 900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
STOCK TURNOVER RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio indicates the no. of time the stock was

turnover. Here, the ratio in 2009-2010 is 10.78 times & in 2008-2009 it was 8.78
times which show that in current year the position is good as compare to previous
year.
(2)Fixed Asset Turnover Ratio:-
To ascertain the efficiency and profitability of
business, the total fixed assets are compared to sales. The more the sales in relation
to their amount invested in fixed assets the more efficient is the use of fixed assets.
It indicates higher efficiency. If the sales are less as compared to investment in
fixed assets, it means that fixed assets are not adequately utilized in business.

FORMULA:

Fixed Asset Turnover Ratio = Sales

Fixed Asset

2009-2010 = 1648067101.95
112711684.20

= 10.78 times

2008-2009 = 1306540732.73
72876162.20

= 17.93 times
GRAPH

2500.00%

2000.00%

1500.00%

1000.00% FIXED ASSET TURNOVER RATIO

500.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

This ratio indicates the efficiency and the profitability of the

business, the more the ratio the more efficient the business is. In 2009-2010 it is
10.78times & in 2008-2009 it was 17.93times which show that in previous year the
position of company was better than current year.

(3)Total Asset Turnover Ratio:-

 To ascertain the efficiency and profitability of
business, the total assets are compared to sales. The more the sales in relation to
their amount invested in total assets, the more efficient is the use of total assets. It
indicates higher efficiency. If the sales are less as compared to investment in total
assets, it means that total assets are not adequately utilized in business.

FORMULA:

Total Asset Turnover Ratio = Sales

Total Asset

2009-2010 = 1648067101.95
826599123.35

= 1.99 times

2008-2009 = 1306540732.73
597209894.57

= 2.19 times

GRAPH
 9

4
TOTAL ASSET TURNOVER RATIO
3

0
2008-2009 2009-2010

INTERPRETATION:-

This ratio indicates the efficiency and the profitability of

the business, the more the ratio the more efficient the business is. In 2009-2010 it
is 1.99times & in 2008-2009 it was 2.19times which show that in previous year the
position of company was better than current year.
(4)Capital Turnover Ratio:-
To ascertain the efficiency and profitability of
business, the total fixed assets are compared to sales. The more the sales in relation
to their amount invested in fixed assets the more efficient is the use of fixed assets.
It indicates higher efficiency. If the sales are less as compared to investment in
fixed assets, it means that fixed assets are not adequately utilized in business.

FORMULA:

Capital Turnover Ratio = Sales

Capital Employed

2009-2010 = 1648067101.95
605251025.14

= 2.72 times

2008-2009 = 1306540732.73
491444759.3

= 2.65 times
GRAPH

900.00%

800.00%

700.00%

600.00%

500.00%

400.00%
CAPITAL TURNOVER RATIO
300.00%

200.00%

100.00%

0.00%
2008-2009 2009-2010

INTERPRETATION:-

It shows the proportion of preference share capital and

debenture with equity share capital. The ratio in 2009-2010 is 2.72 times and in
2008-2009 it was 2.65times. So, in current year the ratio is more than previous year
which is not good for company. It shows worst position of company.
 SWOT
ANALYSIS

SWOT ANALYSIS
 G
W
E
P
O
U
H
S
T
R
IY
N
A
K
WT
S
O
Asian Food Industry has a successful operation of a business unit.
They managed all resources in a strategic manner.

Strategic management considered as a four variable analysis known as

SWOT Analysis. The relationships of such four factors are as under.

STRENGTHS WEAKNESS OPPORTUNITY THREATS

Firm has core High investment in Favorable Quick change in
competence. machines & poor economic customer tastes &
capacity of environment like choices.
utilization. high economic
growth, low
interest rate, low
inflation, good
exports.

Good quality High cost of Favorable political Lower profitability

production. environment. & thus lower
capacity to
generate internal
funds.

Good Research & Lack of proper Favorable

development. management. technological
environment like
quick adoption of
technology, cost -
reduction, quality
improvement.
AUDITORS
REPORT

PART (A)
Name of assessee: - Asian Food Industry

Address: - N.H No.8

Opp. Escort tractors,
At. Dabhan- 387320

Status: - Partnership firm

PART (B)

(1)

(a) The firm has maintained proper records showing full particular including
quantitative details & situation of fixed assets in respect of all its locations.

(b) The fixed assets have been physically verified by the management at all
locations at reasonable intervals. No material discrepancies between book
record and the physical inventories have been notified on such verification.

(2)

(a) The inventories have been physically verified during the year at
reasonable intervals by the management.

(b) In our opinion the procedures of physical verification of inventories

followed by the management are reasonable & adequate in relation to the
size of the firm and the nature of its business.
(c) The firm is maintaining proper record of inventory. The discrepancies
notified on verification between the physical stocks and book forward.
 (3)

(a) The firm has also given the information about the secured loan and
unsecured loan are covered in register maintained.

(4)

(a) In our opinion and according to the information and explanation given to us,
there is an adequate internal control system in the firm. & its natures of
business for purchase of inventories and fixed assets for the sales of goods &
services.

(5)

(a) Based on audit procedure applied by us and according to the information and
explanation provided by the management. We are of the opinion that the
transactions that need to be entered in the registered.

(b) According to the information & explanation given to us the transaction of

sale and purchase made in assurance of contracts or arrangements entered in
the registered.

(6)

The firm has given details about trading concern, quantitative details of
Principal items of goods traded: -
 Opening stock
 Purchase during the previous year
 Sales during the previous year
 Closing stock
 Shortage excess, if any

(7)
 In case of manufacturing concern give quantitative details of the principal
Items of raw materials, finished products and by products.

(a) RAW MATERIALS:-

 Opening stock
 Purchase during the previous year
 Sales during the previous year
 Closing stock
 Shortage excess, if any
 Consumption during the previous year
 Yield of finish products
 Percentage of yield

(b) FINISHED PRODUCTS / BY PRODUCTS:-

 Opening stock
 Purchase during the previous year
 Sales during the previous year
 Closing stock
 Shortage excess, if any
 Quality manufacturing during the previous year

(8)

Based on audit procedure applied by us and the information & explanation

list books of account are prescribed u/s 44AA are examined.

(9)

Other clauses of the order are not applicable to the firm for the year.
 ACCOUNTING
POLICY

ACCOUNTING POLICY
 Method of accounting:-
The accounts have been prepared on the basis of mercantile
method of accounting.

 Income & expenditure:-

All expenses and income to the extent consider payable and
receivable respectively unless specifically stated to the otherwise are
accounted for an accrual basis.

 Sales & income:-

The sales are recorded when supply of goods takes place in
accordance with the sales and on change of title in the goods and inclusive /
not inclusive of sales tax and excise duty the sales is shown net of the
discount on sales and sales return.
The income of annual maintains contract is recorded on prorate
basis. The incomes from contract activities are shown “The completion of
contract” / “percentage of completion” basis.

 Purchase & expenses:-

The purchases are shown net of sales-tax / purchase tax set off
and gross/net credit of excise modvat.
The major items off the expenses are accounted for on time /
prorate basis and necessary provision for the same are made.

 Fixed assets:-
The fixed assets are stated at the cost and related expense like freight
taken. And other incidental and execution expenses at the written down
value after depreciation.

 Depreciation:-
The depreciation on fixed assets is provided as per the written
down value method.
 Investment:-
The investments are shown at cost and are inclusive of related
expenses.

 Stock:-
Stock is valued at cost price.

 Foreign exchange transaction:-

Transactions arising in foreign currencies during the year are
converted at rates prevailing on the date of transaction or settlement or at the
rates covered by the forward contracts, if any.
All exchange differences arising from conversion are taken
to profit & loss account expects liabilities on purchase of fixed assets &
expenditure towards know how which are capitalized.
The outstand payable & receivables in foreign currency as at
the date balance sheet are restated at the year and exchange rates.

PURCHASE BILL

Firm make purchase in two ways:-

(1) Registered dealer purchase
 (2) Unregistered dealer purchase

 Registered dealer purchase:-

When the firms turnover is more than 10,00,000 firm gets TIN
no. this TIN no. should be both the buyer and seller, when both the party
have this TIN no. firm gets the facility of C form and H form. Firm purchase
the goods by three ways.
Central Sales tax / value added tax:-
Under this type of purchase firm has to pay state wise
central sales tax / value added tax.

 C form:-
C form facility gets from sales tax office. Buyers keeps one copy
with himself and gives one copy to their state sales tax office & one copy
with firm. By producing this copy firm has to pay only 2%cst/ vat +8%
additional tax 4% penalty. From the date of bill within 90 days c form send
to sales tax department.
From 1st April to 30th June
1st June to 30th September
1st October to 30th December
1st January to 31st March

 H form:-
H form facility gets from sales tax office. Under which firm has not
to pay sales tax, because H form shows that goods are for export purpose.
One copy will remain with buyers and one copy will remain with the firm.
One copy will submit to sales tax office. And when the firm fails to produce
H form firm is liable to pay 10% interest as per central government.

 Unregistered dealer purchase:-

When the firm directly purchases from farmers or any other
business person who does not has TIN no. in that case do not have to pay
tax.
CONCLUSION

CONCLUSION
 Asian food industries being one of the most reputed company. It is
now, day by day increasing its production process. The performance of the
company is very good. The firm is also trying to improve almost in all the fields
that are marketing, exporting, foreign trading financial etc.

PROFITABILITY RATIO:-
Gross profit ratio & net profit ratio are low it means
that the firm is not able to earn high profit after tax which is not satisfactory in the
interest of the partners.

LIQUIDITY RATIO:-
The liquidity ratio like current ratio, liquid ratio, and quick
ratio of the company are sufficient and it is satisfactory for the business.

LEVERAGE RATIO:-
The leverage ratio like debt equity ratio are less in both
years, which suggest that the company does not have to depend on outsiders for
borrowing of funds and they do not have fixed obligation of payment to outsiders.

GENERALLY:-
Overall view of all the ratio say that the position financial sector
is quite good and company’s management will have to undertake sufficient
measures to make financial sector compitable.

BIBILIOGRAPHY
Financial Report of Asian Food Industries

Financial year 2007-2008

Financial year 2008-2009
Books
Advanced Accountancy – 5 by Sudhir Prakashan

WEBSITE
www.asianfood.in