Introduction to Finance

The term nature as applied to financial management refers to its function, scope & objectives. Financial management, as an academic discipline, has undergone fundamental changes in its evolution it was treated synonymously with the raising of funds. In the current literature pertaining to financial management. A broader scope so as to include, in addition to procurement of funds efficient use of resources is universally recognize.

Importance Of Finance In Modern World

Finance helps business enterprisers & management in getting over their business problems & accomplishing their width maximization good, Knowledge of finance & its tools & techniques provide strong & soled bases for making decision in all business matters. One such very important matter pertains to investment. In the area of investment, an entrepreneur has to decide as to What Capital expenditures should the enterprise make, what volume of funds should be committed & how should funds be allocated as among different investment outlets. Another problem which the management has to resolve is related with designing such pattern as may be helpful in maximizing or gaining per share & so also the market value of shares. This involves examination in depth. Of some of the important issues such as from that sources are funds available? To what extent are funds available from this sources? What is the expected cost of future financing given sources of funds should be tapped and to what extent?

Finance and related disciplines

Financial managing as an integral part of overall management , is not a totally indipendent area.it draws heavily on related disciplines and fields of study, such as economics, accounting, marketing, production etc. FINANCE & ECONOMICS: The relevance of economics to financial management can be described in the light of the two broad areas of economics :macro economics and micro economics. Macro economics is concerned with the institutional structure of the banking system, money , and capital markets, financial intermediaries, monetory, credit and fiscal policies dealing with,and controlling level of, activity within an economy. Micro economics deals with he economics decision of individuals and organizations. It concerns itself with the determination of optimal operating strategies. FINANCE & ACCOUNTING The relationship between finance and accounting, conceptually speaking, has two dimensions: 1.they are closely related to the extent that accounting is an important input in financial decision making; And 2.there are key differences in view points between them.

DEFINATION OF FINANCIAL MANAGEMENT

1. 2. financial management is the operation activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation. business finance deals primarily with raising administering and disburing funds by privately owned business units operating in non financial fields of industry . Finance management is an area of business management devoted to a judicious used of capital and a careful selection of sourceful of capital in order to enable a business firm to move in the direction of reaching its goods.

3.

SCOPE OF FINANCE MANAGEMENT

The approach to the scope and function of financial management is divided into three broad categories. (A) Traditional approach In the traditional approach the scope of the finance function was treated in the narrow sense of procurement of funds by corporate enterprise to meet their financing needs.
1. The traditional arrangement in the financial institution of the capital market. 2. The financial instrument through which funds are raised from the capital

markets. 3. The legal and accounting relationship between a firm and its sources of funds. The traditional approach evolved during the 1920s and 1930s but has how been discarded as it suffers from serious limitations. The weakness of the traditional approach falls in to this category.
4. Those relating to the treatment of various to emphasis attached to them. 5. Those relating to the basic conceptual and analytical 6. Frame work of the definition and the scope of the finance function.

(B) EXTENCIVE APPROACH: At the other extreme is another approach, which conceders that finance is concerned with cash only and that since nearly very business transition involves cash directly is concerned with very thing that take place in the conduct of business. This approach is too broad too be meaning full because if we accept this approaches the financial manager required to go I to detail of every business acting be it concerned with purchasing, production, marketing, personnel research and other associated activity.

MODERN APPROACH:
In the modern approach the finance function covers both acquisition of funds well as their allocation. The investment Decision: Short term or current which in the normal course of business are convertible in value, usually within a year i.e. working capital management.
5

Capital budgeting The most crucial financial decision for a firm is relies to selection of are assets or investment proposal or course of action whose benefits are likely to be available in future over the lifetime of the project. Working capital management It is concerned with the management of current assets. It is an important and integral part of financial management as short from survival is pre-requisite for long term success. one aspect of working capital management is the trade off between profitability and risk.

2. Financial decision
Financing decision is concerned with the financing mix or capital structure refers to the proportion of debt and equity capital. There are two aspacts of financing decision.

Theory of capital structure:Which shows the theoretical relationship between the employment of debt and return of shoulder?
2. Dividend policy Decisions

The third major decision of financial management id the decision relating to the dividend policy. Two alternatives are available in dealing with the profit of a firm. They can be distributed o the share holders in the it self. The decision has to which course should be followed depends largely on a significant element in the dividend decision i.e. the dividend pay net ratio, that is what proportion of net profiles should be paid out to the share holders. Thus, we may conclude that His modern approach involves the solution of three major decisions. This decision when jointly taken makes financial decision making optimal.

CONCEPT OF BUSINESS FINANCE

Literally speaking the term `business finance` connects finance of business activities. Thus, in order to develop the meaning of business finance explanation of two terms business and finance are inescapable. In common parlance the word `business` is used to denote merchandising, the operation of some sort of shop store, large or small. It is however, giving too narrow a meaning to the word. Business must be under stood to embrace every human activity usually activated by the profit motives where by mans wants are supplied. Thus, lumbering, mining, merchandising, manufacturing, trading, transportation, shipping, building and many other activities or business that helps to supply material wants. The practice of law, medicine, dentistry and teaching, accounting nursing and entertaining represents activities that supply distressed services. Dictionary meaning of the term `finance` is the application of skill or cares to the manipulation the use and the control of money .however ,it would not be in fitness of things to place to heavy reliance on the dictionary meaning because the word finance has a marvellous ability to evoke different concept in the mind of difference persons.

SCOPE OF BUSINESS FINANCE

In order to understand more clearly the meaning of business finance it is worth while to high light the scope of business finance .At the outset, it may be pointed at that business finance is concerned with the finance of profit making organization only and is an important segment of private finance. Finance is such one fact of broader economic activity of mobilizing saving and directing them in investment finance includes both public and private finance. Public finance is the study of principle and practices pertaining to the actuation of funds, meeting the requirements of government bodies and administration of these funds by the government country to this, private finance concerns with producing money for private organization and management of the money by individual voluntary associations and corporations. Private finance therefore, comprises personal finance, business.

General Information
BOARD OF DIRECTORS
Mr. Kumar Mangalam Birla (Chairman) Mrs. Rajashree Birla Mr. M.L. Apte Mr. M.C. Bagrodia Mr. B.V. Bhargava Mr. R.C Bhargava Mr. Y.P. Gupta Mr. Cyril Shroff Mr. S.G. Subrahmanyan

kp P%
Mr. D.P. Mandelia

CHIEF FINANCIAL OFFICER

Mr. D.D. Rathi

COMPANY SECRETARY
Mr. Ashok Malu

AUDITORS
M/s G.P. Kapadia & Co., Mumbai M/s Lodha & Co. New Delhi

REGISTERED OFFICE
GRASIM INDUSTRIES LIMITED Birlagram, Nagda 456 331 (M.P)

10

DIRECTORS REPORT
PARTICULAR
Gross turnover Gross profit Less : depreciation Profit before exceptional item & tax expenses Exceptional items Surplus on pre payment of sales tax loan Profit before tax & diminution Provision for permanent diminution in the value of investment & loans Profit before tax Tx expenses Profit after tax Add :Debenture redemption reserve written back Investment allowance reserve written back Balance brought forward from previous year Surplus available for appropriation Appropriation General reserve Propose dividend Corporate tax on dividend Balance transfer to balance sheet 850.0 128.3 16.5 790.2 700.0 146.7 20.9 815.3 42.0 8.3 955.4 6.9 0.1 790.2 1077.3 1077.3 (298.0) 779.3 34.3 1395.7 (92.0) 1303.7 (418.0) 885.7 2003 2004 6130.0 1321.5 273.1 1048.4 2004 2005 7201.1 1645.9 284.5 1361.4

1785.0

1682.9

1785.0

1682.9

Your company has posted a commendable for the year ended 31st march, 2005.turnover, Gross profit and Net profit have been, indeed, impressive. Capacity utilization optimizing efficiencies and aggressive marketing of value added product have taken your company to this performance. All of your companys business have given gratifying results. The VSF business performance has been noteworthy. Production at 247,952 tons was a significant 12%higher over that of the previous year. Sales volume raises marginally due to the increased availability of cotton during the year. Realization grew by 9% at Rs 79,008 per ton, in line with the 11

international ternd, leading to higher operating profit. DIVIDEND Your Board has recommended a dividend of Rs 16 per share(last year Rs 14) and seeks your approval for the same. The total outgo of the dividend to be paid to the share holder will be Rs 167.3 crores(inclusive of Corporate Tax on Dividend @ 14.025% ) as against Rs 145.1 crores paid in the previous year. DEBENTURE AND TERM LOAN Your company has raised log term Foreign Currency loans aggregating USD 50 million (Rs 221 crores ) and Rupee loan of Rs 30 crores. The funds were utilized to meet the requirement of capital expenditure and for general corporate purposes. Your company has repaid debenture aggregating Rs. 74 crores. Your company repurchased its own debenture aggregating Rs.135 crores , and these have been extinguished in the books.

HUMAN RESOURCES
During the year ,the Organisational Health Survey , which is the barometer of happiness at index in the Group , was conducted .The result have been encouraging and confirm that we are by and large on right track as far as people processes and systems are concerned.

DIRECTORS
Mr. D.D.Rathi was appointed as a Whole Time Director of the company for a period of 3 years from 1st August , 2004 to 31st July 2007. Mrs. Raashree Birla , Mr. B.V.Bhargava and Mr. S.G.Subrahmanyan retire from office by rotation and being eligible , offer themselves for reappointment . a brief resume, expertise and details of other directorships of these directors are attached along with the Notice of the ensuing Annual General Meeting.

DELISTING OF EQUITY SHARES

In accordance with the approval granted by the shareholders, the Company. Has got its equity shares delisted from the Stock Exchange ay Indore and Kolkata . The Company s Equity Shares hall contiune to be listed on the Stock Exchange , Mumbai (BSE) and the Natoinal Stock Exchange of India Ltd. (NSE), which has nationwide trading reach.

Directors wish to thank Central and State Grovernment , Banks, Financial institutions, Share holder and business associates for there continued co-operation and support. For and on behalf of the Borad KUMAR MANGALAM BIRLA 12

Mumbai , 29th April ,2005

chairaman

AUDITORS REPORT

TO THE MEMBERS OF GRASIM INDUSTRIES LIMITED We have audited the attached the balance sheet of Grasim Industries Limited, as at 31st march, 2005 and also the profit and loss account and the cash flow account for the year ended on that date annexed thereto. This financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on this financial statement based on our audit. We conducted our audit in accordance with auditing standard generally accepted in India. Those standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit include examining , on a test basis, evidence supporting the amount and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made
13

by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion . As required by companies (auditors report) order. 2003(the order) issued by the central govt. of India in terms of sub- section 4A of section 227 of companies act, 1956, on the matters specified in the paragraphs 4 and 5 of the shade order, we further report that : In our opinion, the company has an internal audit system commensurate with the size of the company and nature of its business The company has not defaulted in repayments of any dues to financial institution or banks or debenture holder On the basis of records made available to us, the company has created securities in respect of debenture issued / outstanding during year The company has not raised any money through a public issue during a year.

Place : Mumbai Dated : 29th April, 2005

For G.P.Kapadia & co. Chartered Accountants NIMESH BHAMANI Partner (Membership no. 30547)

14

15

RATIO ANALYSIS
Financial analysis is the process of identifying the financial strengths and weakness of the firm by properly establishing relationship between the items of the Balance Sheet & Profit & Loss Account. Financial analysis can be undertaken by the management of the firm, or by the parties outside the firm owners, creditors, investors & others. The nature of analysis will differ depending on the purpose of the analysis. Management of the firm would be interested in every aspect of the financial analysis. It is their overall responsibility to see that the resources of the firm are used most effectively and efficiently and that the firms financial condition is sound. Ratio analysis is a powerful tool of Financial Analysis. A ratio is defined as The indicated quotient of two mathematical expressions and as The relationship between two or more thing. In financial analysis a ratio is used as a benchmark for evaluating the financial positions and performance of the firm. The rationale of ratio analysis lies in the fact that it makes relations information comparable. A single figure by itself has no meaning but when represented in terms of a related figure, it yields significant inferences.

PROFITABILITY RATIO
Company should earn profit to survive and grow for a long period of time. Profit is the difference between revenue and expenses over a period of time (usually one year). Profit is the ultimate output of a

16

company and it will have no future if it fails to make sufficient profits. Therefore a financial manager should continuously evaluate the efficiency of the company in terms of profits. Profitability ratios are calculated to measure the operating efficiency of the company. Apart from the creditors, both short-term and long-term, also interested in the financial soundness of a firm are the owners and management of the firm is naturally eager to measure its operating efficiently. Similarly, the owners invest their funds in the expectation of reasonable returns. The operating efficiency of a firm and its ability to ensure adequate returns to its shareholders depends ultimately on the profits earned by it. The profitability of a firm can be measured by its profitability ratios. Profitability ratios can be determined on the basis of either sales or investments. PROFITABILITY RATIOS RELATED TO SALES These ratios are based on the premise that a firm should earn sufficient profit on each rupee of sales. If adequate profits are not earned on sales, there will be difficulty in meeting the operating expenses and no returns will be available to the owners. These ratios consist of:

Gross Profit Ratio. Net Profit Ratio. Operating Ratio. Expense Ratio. Stock Turnover Ratio.

GROSS PROFIT RATIO

Gross profit is the result of the relationship between prices, sales, volume and costs. Change in the gross profit can be brought about by changes in any of these factors. A high gross profit ratio to sales is a sign of good management as it implies that the cost of production of the firm is relatively low. A relatively low gross margin is definitely a danger signal, warranting a careful and detailed analysis of the factors responsible for it. FORMULA: (SALES COST OF GOODS SOLD) * 100 / NET SALES

17

Net Sales = COGS = Gross Profit =

Sales Sale of Scrap. (Raw material + Manufacturing exp.) Increase / Decrease in stock. Sales COGS.

Gross Profit ratio of 2004-05 :

Gross Profit ratio = 2165.36 * 100/6229.26 = 34.76

The Gross Profit ratio of Grasim industries Ltd. is as follows: Years Gross Profit Net Sales Percentage 2002-03 1616.54 4606.20 35.09 % 2003-04 2709.83 5213.21 51.98 % 2004-05 2165.36 6229.26 34.76 %

Interpretation The Gross Profit ratio of Company in the year 200203 is 35.09% and in year 2003-04 is 51.98% and in year 2004-05 is 34.76%. Which shows management efficiency of the company. In the year 2003-04 it is increasing which is favourable for the company but in the year 2004-05 it is decreasing which is unfavourable for the company

NET PROFIT RATIO

Net Profit Margin is also known as net margin. This measures the relationship between net profits and sales of the firm. Depending on the concept of net profits employed, the ration can be computed. The net profit margin is an indicative of managements ability to operate the business with sufficient not only to recover from revenues of the period, the cost or merchandise or services, the expenses of operating the business and the cost of borrowed funds, but also to leave a margin of reasonable compensation to the owners for providing their capital at risk. The ratio of net profit (after interest and tax) to sales essentially expresses the cost price effectiveness of the operation. FORMULA: PROFIT AFTER TAX / NET SALES * 100

18

Net Sales: Sales Sale of Scrap. Net Profit ratio of 2004-05: Net Profit ratio = 885.71*100/6229.26 = 14.21% The Net Profit ratio of Grasim industries Ltd. is as follows: Years PAT Net Sales Percentage 2002-03 367.58 4606.20 7.98% 2003-04 779.26 5213.21 14.95% 2004-05 885.71 6229.26 14.21%

Interpretation The Net Profit ratio of Company in the year 200203 is 7.98% and in year 2003-04 is 14.95% and in year 2004-05 is 14.21%. Which shows management efficiency of the company. In the year 2003-04 it is increasing which is favourable for the company but in the year 2004-05 it is decreasing which is unfavourable for the company

OPERATING RATIO
Operating Ratio is the ratio that shows relationship between Costs of good sold plus operating expenses and Net sales. It shows the efficiency of the management. The higher the ratio the less will be the margin available to the owners of the company. FORMULA = COGS + OPERATING EXP*100 / NET SALES Net Sales = Sales (Income from Dividend + Income from Services + Income from Rent) COGS = (Raw material + Manufacturing exp.) Increase / Decrease in stock Operating Exp = Administration exp + Selling exp + Financial exp Operating Profit ratio of 2004-05

19

Operating Profit ratio = 4063.9 + 1530.67 *100/ 6229.26 = 96.86% The Operating Profit ratio of Grasim industries Ltd. is as follows: Years COGS OPERATING EXP NET SALE PERCENTAGE 2002-03 2989.66 1530.67 4606.20 98.13% 2003-04 2503.38 1647.41 5213.38 79.61% 2004-05 4063.9 1963.9 6229.26 96.76%

Interpretation The Operating ratio of Company in the year 200203 is 98.13% and in year 2003-04 is 79.61% and in year 2004-05 is 96.76%. Which shows management efficiency of the company. In the year 2003-04 it is high which is unfavourable for the company but in the year 2003-04 it is low which is favourable for the company but in the year 2004-05 it is high which is unfavourable for the company

20

EXPENSES RATIO
Another profitability ratio related to the sales is the expenses ratio. It is compared by dividing expenses by sales. The term Expense Includes. 1. 2. 3. 4. Cost of good sold. Administrative expenses. Selling and distribution expenses. Financial expenses but excludes taxes, dividends, and extraordinary losses due to theft of goods, goods destroyed by fire and so on.

The expense ratio is closely related to profit margin, gross as well as net. The expense ratio is thus important for analysing the profitability of a firm. As a working proportion, a low ratio as favourable, while a high one is unfavourable. FORMULA: TOTAL EXPENSES * 100 / NET SALES Total Expenses = Expenses excluding Depreciation. The Expenses ratio of Grasim industries Ltd. is as follows: Years Total Expense Net Sales Percentage 2002-03 819.10 4606.20 17.78% 2003-04 8825.46 5213.21 15.83% 2004-05 938.46 6229.26 15.06%

Interpretation The Expenses ratio of Company in the year 200203 is 17.78% and in year 2003-04 is 15.83% and in year 2004-05 is 15.06%. Which shows management efficiency of the company. It is decreasing every year which favourable for the company.

STOCK TURNOVER RATIO

21

The number of times the average stock is turned over during the year is known as stock turnover. It is computed by dividing the cost of goods sold by the average stock in business. Average stock the average of opening and closing stock of the year. If however, the monthly figure of the stock are available, the average monthly stock will give this ratio will be computed ratio. This ratio signifies that the average stock is turned over during the year. The stock turnover ratio is
thus important for analysing the stock turning capacity of a firm. If figure for cost of goods sold are not given then the ratio can be calculated on the basis of sales. FORMULA: COST OF SALES / AVG STOCK COST OF SALES = SALES AVG STOAK = OPENING STOCK + CLOSING STOCK /2 Stock Turnover ratio of 2004-05 Stock Turnover ratio = 6229.26 / 162.09 = 38.4 times The Stock Turnover ratio of Grasim industries Ltd. is as follows: Years SALES Avg Stock Times 2002-03 4606.20 146.61 31.4 2003-04 5213.21 114.82 45.40 2004-05 6229.26 162.09 38.4

Interpretation The Stock Turnover ratio of Company in the year 200203 is 31.4times and in year 2003-04 is 45.40times and in year 2004-05 is 38.4times. Which shows management efficiency of the company. It is decreasing from 2003-04 to 2004-05 year. Which unfavourable for the company . The company should increase sales so that stock turnover ratio also increase.

Balance sheet ratio

Current ratio Liquid ratio

22

 Quick ratio Propriety ratio Debt equity ratio Gearing ratio Long term debts to fixed assets

23

CURRENT RATIO
The current ratio of the firm measures its short term solvency, that is, its ability to meet short term obligations, as a measure of short term / current financial liquidity. The higher the ratio, the larger is the amount of rupees available per rupee of current liability, the more is the firms ability to meet current obligations and the greater is the safety of funds of short term creditors. It is expressed in times. FORMULA: CURRENT ASSETS (CA) / CURRENT LIABILITY (CL) Current assets: Cash & Bank balance + Stock + Debtors + B/R + Prepaid expenses + Loans & Advances.

Current liabilities: Creditors + B/P + Bank OD + Unclaimed Dividend + Provision for Taxation.

Calculation of current ratio of 2004-05

Current ratio :1853.93/1108.30 = 1.672:1 The Current ratio of Grasim industries Ltd. is as follows: Years CA CL Times 2002-03 1495.61 882.87 1.694:1 2003-04 1496.01 946.37 1.580:1 2004-05 1853.93 1108.30 1.672:1

Interpretation The Current ratio of Company in the year 200203 is 1.694:1 and in year 2003-04 is 1.580:1 It is decreasing which is not good for the company. In year 2004-05 is 1.672:1 which is better than 2003-04 but it is less than 2002-03

LIQUID RATIO

24

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 liabilities. Liquid assets are obtained by deducting stock in trade from current assets. Stock is not treated as a liquid assets because it cannot be readily converted in to cash as and when required. The current ratio of a business does not reflect the true liquid position if its current assets consist largely of stock in trade.
FORMULA: CURRENT ASSETS / CURRENT LIABILITIES Current assets = Current Assets Stock Current liabilities = Current Liabilities Bank Overdraft Liquid ratio of year 2004-05: Liquid ratio= 1573.33/1108.30 = 1.41:1 The Liquid ratio of Grasim industries Ltd. is as follows: Years Current Assets Current liabilities Times 2002-03 1306.02 882.87 1.47:1 2003-04 1339.27 946.37 1.41:1 2004-05 1573.33 1108.30 1.41:1

Interpretation The Liquid ratio of Company in the year 200203 is 1.47:1 and in year 2003-04 is 1.41:1 It is constant which is not good for the company but in the year 2004-05 it is also 1.41:1 which shows that companys cash & bank balance is not increasing the company should make enough effort to increase their liquidity.

QUICK RATIO
The measure of absolute liquidity may be obtained by comparing only cash and bank balances as well as readily marketable securities with liquid assets. This is a very exacting standard and liquidity and it is satisfactory if the ratio is 0.5:1. It is computed by dividing the value of quick assets by liquid assets. It is rigorous measure of a firms ability to service short term liabilities. It is expressed in times.

25

FORMULA: QUICK ASSETS / LIQUID LIABILITIES Quick assets = Current Assets Inventories. Liquid liabilities = Current Liabilities Quick ratio of year 2004-05: Quick ratio= 86.70/1108.30 = 0.07:1 The Quick ratio of Grasim industries Ltd. is as follows: Years Quick Assets CL Times 2002-03 110.11 882.87 0.12:1 2003-04 227.48 946.37 0.24:1 2004-05 86.70 1108.30 0.07:1

Interpretation The Quick ratio of Company in the year 200203 is 0.12:1 and in year 2003-04 is 0.24:1 It is increasing which is good for the company but in the year 2004-05 is 0.07:1 which shows that companys cash & bank balance is gradually decreasing which is not good for the company.

PROPRIETARY RATIO The ratio shows the proportion of proprietor fund to the total assets employed in the business. The proprietor fund or shareholder equity consist of share capital and reserves &surplus.
. FORMULA: OWNERS FUND / TOTAL ASSETS Owners fund = Share Capital + Res&Sur + M/S Exp P&L a/c(Dr) Total assets = Fixed assets + Inv + Current assets

26

Proprietary ratio of year 2004-05: Proprietary ratio= 91.67/8030.93 = 1.41:1 The Quick ratio of Grasim industries Ltd. is as follows: Years Owners fund Total assets Times 2002-03 91.69 6536.69 1.40:1 2003-04 91.67 7232.36 1.26:1 2004-05 91.67 8030.93 1.14:1

Interpretation The Proprietary ratio of Company in the year 200203 is 1.40:1 and in year 2003-04 is 1.26:1 It is decreasing which is not good for the company and in the year 2004-05 is 1.14:1 which shows that companys finance position is not for the company.

DEBT EQUITY RATIO

The ratio is another form of proprietary ratio establishes relationship between the outside long term liabilities and owners fund. It shows the proportion of funds provided by long term creditors and that provided by long term creditors and that provided by shareholders or proprietors. A higher ratio means that outside creditors has larger claim than owner of the business. If this ratio is lower, it is not profitable from the viewpoint of equity shareholders, as benefit of trading on equity is not availed of. FORMULA: LONG TERM LIABILITIES / OWNERS FUND * 100 OWNERS FUND = EXCLUDING PREFERENCE SHARE CAPITAL LONG TERM LIABILITIES : SECURED LOANS + UNSECURED LOANS Debt equity ratio of 2004-05 : Debt equity ratio = 1974.81/4328.35*100 = 45.62 %

27

The Debt Equity ratio of Grasim industries Ltd. is as follows: Years Long term lia. Owners fund Percentage 2002-03 2040.29 2977.29 68.52 % 2003-04 2036.89 3610.83 56.41 % 2004-05 1974.81 4328.35 45.62 %

Interpretation The Debt Equity ratio of Company in the year 200203 is 68.52% and in year 2003-04 is 56.41% and in year 2004-05 is 45.62% It is good for the firms because Debt Equity is one type of debtors so It is decreasing every year which is good sign for the company.

CAPITAL GEARING RATIO This ratio express the proportion of preference capital and ordinary capital. In other words it is the ratio of fixed dividend bearing capital to ordinary capital. The higher this ratio i.e. the greater the proportion of preference capital and debenture to ordinary capital, the capital structure of the company is said to be highly geared. In such cases the ordinary share of the company will be speculative because due to small increase in profit the ration of return on ordinary capital will increase substantially. The ratio is another form of proprietary ratio establishes relationship between the
outside long term liabilities and owners fund. It shows the proportion of funds provided by long term creditors and that provided by long term creditors and that provided by shareholders or proprietors. A higher ratio means that outside creditors has larger claim than owner of the business. If this ratio is lower, it is not profitable from the viewpoint of equity shareholders, as benefit of trading on equity is not availed of. FORMULA: FIXED CHARGE BEARING CAPITAL / EQUITY SHARE CAPITAL Fixed charge bearing capital = Pref Share capital + Deb + Long term lia Equity Share Capital = Share capital Capital gearing ratio of 2004-05 :

28

Capital gearing ratio = 1534.02 / 91.67 = 16.73:1

The Capital greaing ratio of Grasim industries Ltd. is as follows: Years Fixed charge bearing capital Eq Share Capital Times 2002-03 1595.86 91.67 17.40:1 2003-04 1422.80 91.67 15.52:1 2004-05 1534.02 91.67 16.73:1

Interpretation The Capital gearing ratio of Company in the year 200203 is 17.40:1 and in year 2003-04 is 15.52:1 and in year 2004-05 is 16:73:1 .

LONG TERM FUND TO FIXED ASSETS RATIO Normally the fixed assets of business must be purchased out of fixed assets only, which includes share capital ,reserve and long term liabilities. This ratio there fore shows the relationship between fixed capital and fixed assets. The ratio must be 1: 1 or more i.e. the fixed capital must be more than fixed assets or must at least be equal to fixed assets. If fixed capital is less than fixed assets , it would mean that short term fund have been used in purchasing fixed. when these short term obligation mature, the business would be put to trouble and may be compelled to dispose of its fixed assets at a considerable loss to business.
FORMULA: LONG TERM LIABILITIES / FIXED ASSETS * 100 LONG TERM LIABILITIES : SECURED LOANS + UNSECURED LOANS

Long term fund to fixed assets ratio of 2004-05 : Long term fund to fixed assets ratio = 4328.35/3194.81*100 = 135.4%

The Long term fund to fixed assets ratio of Grasim industries Ltd. is as follows:

29

Years Long term lia. Fixed assets Percentage

2002-03 2040.12 3245.03 62.8%

2003-04 3610.83 3195.70 112.9%

2004-05 4328.35 3194.81 135.4%

Interpretation The Long term fund to fixed assets ratio of Company in the year 200203 is 62.8%% and in year 2003-04 is 112.9% and in year 2004-05 is 135.4% It is good for the firms because fixed capital high more favourable it is good sign for the company.

30

Composite ratio

Return on investment :o Return on capital employed o Return on share holder fund o Return on equity share holder fund Debtors turn over ( Debtors ratio ) Creditors turn over ( creditors ratio ) Fixed assets turn over ratio Total assets turn over Debt service ratio

31

RETURN ON CAPITAL EMPLOYED (ROCE)

Here the profits are related to the total capital employed. The term capital employed refers to long-term funds supplied by the creditors and owners of the firm. The capital employed basis provides the test of profitability related to the source of long term funds. A comparison of this ratio with similar firms, with the industry average and over time would provide sufficient insight into how efficiently the ling term funds of the owners and creditors are being used. The higher the ratio, the more efficient is the use if capital employed. FORMULA: PBIT / TOTAL CAPITAL EMPLOYED * 100 Capital Employed = Share Capital + Borrowed Capital + Reserve & Surplus. Return on Capital Employed ratio of 2004-05 Return on Capital Employed ratio = 1442.47*100/5767.35 = 25.01% The Return on Capital Employed of Grasim industries Ltd. is as follows: Years PBIT Total CE Percentage 2002-03 658.46 4478.15 14.705% 2003-04 1248.67 4938.61 25.28% 2004-05 1442.47 5767.35 25.01%

Interpretation The Return on Capital Employed ratio of Company in the year 200203 is 14.70%% and in year 2003-04 is 25.28% and in year 2004-05 is 25.01% It is shows the over all profitability of the business high more favourable it is good sign for the company.

32

RETURN ON SHAREHOLDERS FUND

While there is no doubt that the preference shareholder are also owners of the firm, the real owners are the equity shareholder who bear all the risk, participate in the management and are entitled to all the profits remaining after the outside claims including preference dividends are met in full. The profitability of a firm from the owners point of view should, therefore, in the fitness of thing be assessed in terms of return to the shareholders. This is the single most important ratio to judge whether the firm has earned a satisfactory return for its equity-shareholders or not. FORMULA: PAT / SHAREHOLDERS FUND * 100 Return on Shareholders Fund of 2004-05 Return on Shareholders Fund = 885.71*100/4328.35 = 20.46% The Return on Shareholders Fund of Grasim industries Ltd. is as follows: Years PAT Net Worth Percentage 2002-03 367.58 2977.29 12.34% 2003-04 779.26 3610.83 21.58% 2004-05 885.71 4328.35 20.46%

Interpretation The Return on Shareholder Fund of Company in the year 200203 is 12.34% and in year 2003-04 is 21.58% and in year 2004-05 is 20.46%. In the year 2002-03 it is low which is favourable for the company but in the year 2003-04 it is high which is unfavourable for the company but in the year 2004-05 it is lower than 2003-04 which is favourable for the company but company should try to make it lower.

33

DEBTOR TURNOVER RATIO

A firm sells goods on cash and on credit. Credit is used as a marketing tool by a number of companies. When a firm extends credit to the customers, debtors are created. Debtors are expected to be converted into cash over a short period and, therefore are included in current liabilities. The liquidity position of the firm depends on the quality of debtors to a great extend. Thus financial analyst apply ratio to judge the quality or liquidity of debtors. Debtor turnover ratio indicates the number of times debtors turnover each year. Generally, the higher the value of debtor turnover the more efficient is the management. FORMULA: DEBTORS + BILLS RECEIVABLES * 360 / NET SALES Debtor Turnover ratio of 2004-05 Debtor Turnover ratio = 522.01 * 360 / 6229.26 = 30.1 Days The Debtor Turnover ratio of Grasim industries Ltd. is as follows: Years Receivables Net Sales DAYS 2002-03 429.65 4606.20 33.5 2003-04 484.63 5213.21 33.4 2004-05 522.01 6229.26 30.1

Interpretation The Debtors turnover of Company in the year 200203 is 33.5 Days and in year 2003-04 is 33.4 Days and in year 2004-05 is 30.1 Days. In the year 2002-03 it was high which is favourable for the company but in the year 2003-04 it is same which is favourable for the company but in the year 2004-05 it is lower than 2003-04 &2002-03 which is unfavourable for the company it tells us that company is recovering its money in number of days .

DEBTORS TURNOVER RATIO

34

FORMULA:

360 / DEBTOR RATIO

Debtor Turnover ratio of 2004-05 Debtor Turnover ratio = 360/ 30.1 = 11.9 TIME The Debtor Turnover ratio of Grasim industries Ltd. is as follows: Years Days Debtors ratio TIMES 2002-03 360 33.5 10.7 2003-04 360 33.4 10.7 2004-05 360 30.1 11.9

CREDITOR RATIO We have seen in above ratio that debtor ratio given us the number of days within which amount due for credit sale is collected. Similarly, the number of days with in which we make payment to our creditors for credit purchase is obtain from creditor velocity.

35

FORMULA: CREDITOR + BILLS PAYABLE * 360 / NET PURCHASE Creditor Turnover ratio of 2004-05 Creditor Turnover ratio = 827.89 * 360 / 1873.05 = 159.1 Days The Creditor Turnover ratio of Grasim industries Ltd. is as follows: Years Creditor Net Purchase DAYS 2002-03 752.49 1175.49 230.3 2003-04 752.49 1372.49 197.2 2004-05 827.89 1873.05 159.1

Interpretation The Creditor turnover of Company in the year 200203 is 230.3 Days and in year 2003-04 is 197.2 Days and in year 2004-05 is 159.1 Days. In the year 2002-03 it was high which is favourable for the company but in the year 2003-04 it is same which is favourable for the company but in the year 2004-05 it is lower than 2003-04 &2002-03 which is unfavourable for the company it tells us that companys payment policy .

36

CREDITOR TURNOVER RATIO

FORMULA:

360 / CREDITOR RATIO

Creditor Turnover ratio of 2004-05 Creditor Turnover ratio = 827.89 * 360 / 1873.05 = 159.1 Days The Creditor Turnover ratio of Grasim industries Ltd. is as follows: Years Days Creditor ratio Times 2002-03 360 230.3 1.56 2003-04 360 197.2 1.82 2004-05 360 159.1 2.26

37

FIXED ASSETS TURNOVER RATIO

Assets are used to generate sales. Therefore, a firm should manage its assets efficiently to maximize sales. The relationship between sales and fixed assets is known as Fixed Assets turnover ratio. FORMULA: NET SALES / NET FIXED ASSETS Fixed Assets Turnover ratio of 2004-05 Fixed Assets Turnover ratio = 6229.26/3194.81 = 1.94:1 The Fixed Assets Turnover ratio of Grasim industries Ltd. is as follows: Years Net Sales Net FA Times Interpretation: This ratio indicates the efficiency with which the companys fixed assets are used and the company has increased its utilization of fixed assets in the year 2004-05 which is a good sign but this should be compared with the industry average so as to be able to determine the actual position. 2002-03 4606.20 3245.03 1.41:1 2003-04 5213.21 3195.70 1.63:1 2004-05 6229.26 3194.81 1.94:1

38

TOTAL ASSETS TURNOVER RATIO

The firm should manage its assets efficiently to maximize its sales as assets are primarily used to generate sales. For this purpose some analyst compute Total Assets ratio. This ratio shows the firms ability in generation sales from all financial resources committed to the total assets. FORMULA: NET SALES / TOTAL ASSETS Total Assets: Fixed Assets + Investments + Current Assets. Total Assets Turnover ratio of 2004-05 Total Assets Turnover ratio = 6229.26/5048.74 = 1.23:1 The Total Assets Turnover ratio of Grasim industries Ltd. is as follows: Years Net Sales Total Assets Times 2002-03 4606.20 4740.62 0.97:1 2003-04 5213.21 4691.71 1.11:1 2004-05 6229.26 5048.74 1.23:1

39

EARNING PER SHARE (EPS)

This ratio measures the profit available to the equity shareholders on a per share basis, that is, the amount that they can get on every share held. Earning per share is a widely used ratio. Although EPS is a measure of profitability of the firm from the owners point of view, should be used cautiously as it does not recognized effect of increase in equity capitals a result of retention of earning. FORMULA: PAT / NUMBER OF EQUITY SHARE Earning per Share of 2004-05 Earning per Share = 885.71/91689485 = 96.60 The Earning per Share of Grasim industries Ltd. is as follows: Years PAT(In Crores) No. of Shares EPS (FV Rs 10 Each) 2001-02 367.58 91689485 40.09 2002-03 779.26 91689485 84.99 2003-04 885.71 91689485 96.60

40

Pie Chart Of Earning Per Share

18% 44% 2002-2003 2003-2004 2004-2005 38%

41

COMMON SIZE STATEMENT

INTRODUCTION
Apart from ratio analysis, another useful way of analysing financial statement is to convert them into common size statement by expressing absolute rupee amounts into percentages. Common size comparative statement prepared for one firm over the years would highlight the relative change in each group of expenses, assets and liabilities. These statements can be equally useful for inter firm comparisons, given the fact that absolute figures of two firms of the same industry are not comparable.

METHOD OF MAKING A COMMON SIZE STATEMENT

Under this method the income statement exhibits each expense item or group of expense items as a percentage of net sales, and net sales taken as 100 per cent. Similarly, each individual asset and liability classification is shown as a percentage of total assets and liabilities respectively. Basically, it involves in converting the figures expressed in absolute rupee amounts in percentages.

42

COMMONSIZE BALANCE SHEET FOR THE YEAR ENDED 31STMARCH 2003

PARTICULARS SOURCES OF FUNDS Shareholders Funds: Share Capital Share Capital Suspense Reserves and Surplus Total LOAN FUNDS Secured Loans Unsecured Loans Documentary bills discounted with banks Total Deffered tax liabilities Total APPLICATION OF FUNDS: Fixed Assets: Gross block Less: Depreciation Net block Capital W/P Total Fixed assets held for disposal Investments: Current Assets, Loans, Advances: Inventories Sundry Debtors Cash & Bank Interest accrued on investment Loans & Advances Total Less: Current Liabilities & Provisions Liabilities Provision Total Net Current Assets Total 31-03-2003 %

91.67 0.02 2885.62 2977.31 1500.86 539.26 35.95 2076.07 625.50 5678.88 5486.12 2330.11 3156.01 89.02 3245.03 25.06 1796.05 539.95 429.65 110.11 415.90 1495.61 752.49 130.38 882.87 612.74 5678.88

1.45 0.0003 50.81 52.42 26.42 9.495 0.633 36.55 11.01 100 96.60 41.03 55.57 1.567 57.14 0.441 31.62 9.508 7.565 1.938 7.323 26.33 13.25 2.295 15.54 10.78 100

43

COMMONSIZE BALANCE SHEET FOR THE YEAR ENDED 31STMARCH 2004

PARTICULARS SOURCES OF FUNDS Shareholders Funds: Share Capital Share Capital Suspense Reserves and Surplus Total LOAN FUNDS Secured Loans Unsecured Loans Documentary bills discounted with banks Total Deferred tax liabilities Total APPLICATION OF FUNDS: Fixed Assets: Gross block Less: Depreciation Net block Capital W/P Total Fixed assets held for disposal Investments: Current Assets, Loans, Advances: Inventories Sundry Debtors Cash & Bank Interest accrued on investment Loans & Advances Total Less: Current Liabilities & Provisions Liabilities Provision Total Net Current Assets Total 31-03-2004 %

91.67 0.02 3519.14 3610.83 1327.80 709.09 28.34 2065.23 632.50 6308.56 5705.53 2588.92 3116.61 79.09 3195.70 22.57 2540.65 459.46 484.63 227.48 324.44 1496.01 752.10 194.27 946.37 549.64 6308.56

1.45 0.0003 55.78 52.23 21.05 11.24 0.449 32.73 10.02 100 90.44 41.03 49.40 1.253 50.65 0.357 40.27 7.283 7.682 3.605 5.142 23.71 11.92 3.079 15.00 8.712 100

44

COMMONSIZE BALANCE SHEET FOR THE YEAR ENDED 31STMARCH 2005

PARTICULARS SOURCES OF FUNDS Shareholders Funds: Share Capital Share Capital Suspense Reserves and Surplus Total LOAN FUNDS Secured Loans Unsecured Loans Documentary bills discounted with banks Total Deferred tax liabilities Total APPLICATION OF FUNDS: Fixed Assets: Gross block Less: Depreciation Net block Capital W/P Total Fixed assets held for disposal Investments: Current Assets, Loans, Advances: Inventories Sundry Debtors Cash & Bank Interest accrued on investment Loans & Advances Total Less: Current Liabilities & Provisions Liabilities Provision Total Net Current Assets Total 31-03-2005 %

91.67 0.02 4236.66 4328.35 1439.02 535.79 33.54 2008.34 599.50 6936.19 5897.04 2848.17 3048.87 145.94 3194.81 13.73 2982.02 678.59 522.01 86.70 1.09 565.54 1853.93 827.89 820.41 1108.30 745.63 6936.19

1.32 0.0002 61.08 62.40 20.75 7.724 0.483 28.95 8.643 100 85.01 41.06 43.95 2.104 46.05 0.197 42.99 9.783 7.525 1.249 0.015 8.153 26.72 1.193 4.042 15.97 10.74 100

COMMONSIZE PROFIT & LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH 2003
(Rs. In crores )

45

PARTICULARS

31-03-2005

46

Net Sales (less of excise duty) Interest and dividend income Other income Increase / Decrease in stock INCOME Raw materials consumed Mfg expenses Purchase of finished and other product Payments to & provision for employ Admn, selling ,distribution & other expenses Interest & Dep.

4606.20 74.54 58.44 (13.75) 4725.43 1175.91 1244.81 17.62 332.24 819.10 422.54 4012.23 713.20 (208.62) 504.58 (192.00) 15.00 40.00 367.58 212.01 929.24 1508.83 91.67 11.75 450.00 955.41 1508.83

100 0.098 1.268 0.299 102.5 25.52 27.02 0.382 7.212 17.78 9.173 87.10 15.48 4.529 10.95 (4.168) 0.325 0.868 7.980 4.602 2.017 32.75 1.990 0.255 9.769 20.74 32.75

TOTAL EXPENDITURE
Profit before tax & exceptional items Profit / (loss) on sale of trade investment

Profit Before Tax

Provision for current tax Deferred tax Tax provision of earlier years written back Profit After Tax Debenture redemption reserve no longer required Inv. Allowance reserve no longer required Balance brought forward from previous year Profit Available for Appropriations APPROPRIATION Proposed dividend Corporate dividend tax General reserve Balance carried to balance sheet

COMMONSIZE PROFIT & LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH 2004
( Rs. In crores )

PARTICULARS Net Sales (less of excise duty) Interest and dividend income Other income Increase / Decrease in stock 47

31-03-2005 5213.21 141.60 58.80 (24.31)

% 100 2.716 1.127 0.466

INCOME Raw materials consumed Mfg expenses Purchase of finished and other product Payments to & provision for employ Admn, selling ,distribution & other expenses Interest & Dep.

5389.30 1372.49 1306.67 50.47 358.90 825.46 426.94 4340.93 1048.37 28.89 1077.26 (219.00) 7.00 779.26 42.04 8.27 955.41 1784.8 128.34 16.44 850.00 790.20 1784.98

103.3 26.32 25.06 0.968 6.884 15.83 8.188 83.26 20.10 0.554 20.66 (5.581) 0.134 14.94 0.806 0.158 18.32 34.23 2.461 0.315 16.30 15.15 34.23

TOTAL EXPENDITURE
Profit before tax & exceptional items Profit / (loss) on sale of trade investment

Profit Before Tax

Provision for current tax Deferred tax Profit After Tax Debenture redemption reserve no longer required Inv. Allowance reserve no longer required Balance brought forward from previous year Profit Available for Appropriations APPROPRIATION Proposed dividend Corporate dividend tax General reserve Balance carried to balance sheet

COMMONSIZE PROFIT & LOSS ACCOUNT FOR YEAR ENDED 31ST MARCH 2005
( Rs. In crores )

PARTICULARS Net Sales (less of excise duty) Interest and dividend income Other income Increase / Decrease in stock INCOME Raw materials consumed Mfg expenses 48

31-03-2005 6229.26 114.75 72.44 100.67 6517.12 1873.05 1498.77

% 100 1.842 1.162 1.616 104.6 30.06 24.06

Purchase of finished and other product Payments to & provision for employ Admn, selling ,distribution & other expenses Interest & Dep.

TOTAL EXPENDITURE
Profit before tax & exceptional items Surplus on pre payment of sales tax loan Provision for diminution in value of invst& loan

49.02 373.13 938.46 423.33 51155.76 1361.36 34.35 (92.00) 1303.71 (451.00) 33.00 885.71 6.86 0.16 790.20 1682.93 146.68 20.90 700.00 815.35 1682.93

0.786 5.989 15.06 6.795 82.76 21.85 0.551 12983752 20.92 7.240 0.529 14.21 0.110 0.002 12.68 27.01 2.354 0.335 11.23 13.08 27.01

Profit Before Tax

Provision for current tax Deferred tax Profit After Tax Debenture redemption reserve no longer required Inv. Allowance reserve no longer required Balance brought forward from previous year Profit Available for Appropriations APPROPRIATION Proposed dividend Corporate dividend tax General reserve Balance carried to balance sheet

49

CASH FLOW STATEMENT

The Institute of Chartered Accountants of India (ICAI) issued the Accounting Standard (AS-3) (revised) relating to the preparation of cash flow statement (CFS) in 1998. Initially, it was recommendatory in nature, its preparation has been mandatory for accounting periods commencing on or after April 1,2001 for enterprises (I) which have either turnover of more than Rs. 50 crore in a financial year or (II) the shares of which are listed in stock exchange. Information about the cash flows of an enterprise is useful in providing users of financial statements with a basis to assess the ability of the enterprise to generate cash and cash equivalents and the needs of the enterprise to utilize those cash flows. The economic decisions that are taken by users require an evaluation of the ability of an enterprise to generate cash and cash-equivalents and the timing and certainty of decision of their generation. The CFS deals with the provision of information about the historical changes in cash and cash equivalents by means of a cash flow statement which classifies cash flows during the period among:

Operating Activities. Investing Activities. Financing Activities.

A cash flow statement, when used in conjunction with the other financial statements, provides information that enables users to evaluate the changes in net assets of an enterprise, its financial structure(including its liquidity and solvency), and its ability to affect the amounts and timing of cash flows in order to adapt to changing circumstances and opportunities. An analysis of cash flow is useful for short run planning. A firm needs sufficient cash to pay debts maturing in the near future, to pay interest and other expenses and to pay dividends to the shareholders. The firm can make projection of cash inflows and cash outflows to determine the availability of cash. This statement indicates the sources and uses of cash. To put in one sentence, this statement analysis the changes in non current account as well as current accounts to determine the flow of cash.

CASH FLOW STATEMENT

PARTICULAR 2002-2003 2003-2004 2004-2005

50

(A) Cash Flow from Operating Activities (1)Net Profit before tax &exceptional items Adjustment for: Depreciation Provision for Diminution in Value of Investment Interest expenses Interest Income Dividend Income Profit/Loss on sale of Fixed Assets (Net) Profit on sale of Long Tem Investment (Net) Profit on sale of Current Investment (Net) (2) Operating Profit Before working Capital changes Adjustment for :Trade & Other Receivables Inventories Assets held for disposal Trade Payable (3) Cash generated from Operations Diet Taxes Paid (Net) Cash from operating activities before exceptional item Net Cash from Operating Activities (B) Cash Flow from Investing Activities Sale of Fixed assets Purchase of Investment and fixed assets Sale of Investment Investment/Advances in Joint Venture, Subsidiary & Others Net Proceeds from sale of Current Investment Interest Received Dividend Received Net Cash from/(used in) investment activities (C) Cash Flow from Financing Activities Proceeds from borrowings Repayment of borrowings Interest paid Dividends paid Corporate dividend tax Net Cash from/(used in ) financing activities (D)Net increase/(decrease) in Cash & Cash equivalent Cash &Cash equivalent at beginning of the year Cash &Cash equivalent at end of the year (Cash & Cash equivalent represent Cash & Bank balances)

713.20 254.14 6.36 168.41 (39.67) (34.87) 9.52 (6.37) 1070.72 1.91 8.94 1.42 45.41 1128.40 (160.39) 968.01 968.01 5.65 (1223.39) 30.08 (46.52) 6.37 39.68 34.87 (826.28) 597.14 (516.61) (177.74) (82.73) (179.94) (38.21) 148.32 110.11

1048.37 273.06 153.88 (55.28) (87.32) 0.90 (2.76) (1.79) 1330.06 (64.28) 80.49 2.49 30.75 1379.51 (210.28) 1169.26 1169.26 5.65 (1006.07) 53.64 24.74 1.79 55.28 86.32 (796.65) 410.50 (388.73) (173.66) (91.57) (11.75) (255.21) 117.37 110.11 227.48

1361.36 284.57 138.76 (75.38) (39.37) (2.25) (24.90) (3.37) 1646.42 (78.33) (219.13) 1.84 90.96 1441.76 (391.30) 1050.46 1050.46 19.71 (377.16) 666.13 (1294.15) 3.37 74.29 39.37 (868.44) 326.40 (354.13) (150.11) (128.19) (16.77) (322.80) (140.78) 227.48 86.70

51

BIBLIOGRAPHY
I have referred to the following books and websites in making the final project.

ANNUAL REPORTS.

a. Annual Reports of Grasim Industries Limited of the year 2003. b. Annual Reports of Grasim Industries Limited of the year 2004.

REFERENCE BOOKS.

a. Financial Management (I.M.Pandey). b. Financial Management (Khan & Jain). c. Financial Management (B.S.Shah).

SOURCES OF INFORMATION

52

WEBSITES.

a. www.indianinfoline.com b. www.google.com c. www. grasimindustrieslimited.com

Articles.

a. Indian Express Newspaper (Bombay) Ltd.

53