PURPOSE OF THE STUDY

To Know The Financial Position Of Hafed Ltd.

To Know Company Has The Strengths To Fulfill its Obligations.

Find Out Strengths & Weakness Of Hafed.

Growth Rate of Hafed.

Know The Liquidity Position Of Hafed.

Know The Operation Efficiency Of Hafed.

Know the Over All Profitability of Hafed.

METHODOLOGY

The research involved extensive & intensive study of HAFED in this project report a sincere effort has been made to study the financial statement analysis of the company. During this study, I studied the financial position & performance of the company. At last, I have given interpretation & conclusion of the study.

DATA COLLECTION

The whole of my study is based on secondary data of HAFED. I have not taken any primary data for my study because primary data would not have been helpful to my study. During the tenure of my study I have taken help of the following secondary data:

Annual report of HAFED ltd. Annual audit report of HAFED ltd. Balance sheet of two years. P/L account of HAFE

STATISTICAL TOOL ACCOUNTING RATIOS

ACKNOWLEDGEMENT

The satisfaction & euphoria that accompanies the successful completion of any task would be incomplete without mentioning the name of the people who made it possible whose constant guidance & encouragement crown all efforts with success.

I am deeply indebted to all people who guided, inspired & helped me in the successful completion of this project. I owe a debt of gratitude to all of them, who were so generous with this time & expertise.

I am highly intended & extremely thankful to Dr. NN Sharma, COORDINATOR, who as my external guide was a constant source of inspiration & encouragement to me. The strong interest evinced by them has helped me in dealing with the problems I faced during the course of project work. I express my profound sense of gratitude to them for timely help & cooperation in completing the project.

I am indebted to S.K. GUPTA, G.M (F&A), HAFED, for allowing me to do this project on HAFED. I am grateful to them for sparing their valuable time and sharing the important details of their company which become base for completion of this project.

I am grateful to CA AMIT GAUR (DGM), Mr. VASU DEV GARG (AGM) and Mr. ANIL KUMAR (ACCOUNTANT) HAFED, under whose guidance the present study was conducted. They gave valuable suggestions, generous help at every juncture through exchange of ideas, views on study and corrections during all phases of the project, without which the efforts could not have been completed successfully. They devoted considerable time in providing me guidance at every stage of the project.

I am thankful to all other staff at HAFED who has shown tremendous cooperation and support throughout the stay at HAFED.

EXECUTIVE SUMMARY

Financial statements provide summarized view of the financial position and operation of the company. Therefore, now a day it is necessary to all companies to know as well as to show the financial soundness i.e. position and operation of company to their stakeholders. It is also necessary to company to know their financial position and operation of the company. In this report I made an effort to know the financial position of the HAFED LTD by using the annual report of the company.

The financial analysis of this report will show the strengths and weakness of HAFED. Financial analysis will help the company to take decisions. Thus we can say that, financial analysis is a starting point for making plans using any sophisticated forecasting & planning.

Company overview

Sector- Govt. sector

Chairman- Capt.Chattar Singh

MANAGING DIRECTOR- A.K Yadav

No. of employees-

Hafed website- www.hafed.gov.in

Deals with- live stock nutrition & consumer products

Major activities of Hafed-

Supply of agricultural inputs fertilizers, pesticides, certified seeds etc. Procurement / purchase of food grains e.g. wheat, barley, gram, processing of

paddy, oil seeds etc...

Hafed is a state level apex organization in the cooperative sector in Haryana, it came into existence on 1st Nov 1996 with formation of Haryana as a separate state, with an annual turnover of more than 8000 crores engaged in other activities, in manufacturing & marketing of famous products known for their excellent quality & purity namely Hafed basmati rice, non basmati rice & their variants, Hafed kachchi ghani mustard oil (Agmark Grade-1), refined soya bean oil, refined cottonseed oil, Hafed desi wheat & its Atta, Hafed sugar, Hafed turmeric powder etc. plan to broad base & strength its distribution & marketing network by appointing distributors in the state.

Apart from sale of consumer products, Hafed has also been in the business of manufacturing & supplying the quality cattle feed products to its customers well tested high quality pesticides/insecticides both in powder & solution form to the farmers through its large chain distributors.

VISION OF THE COMPANY

To continually enrich its leadership position as an agri-business cooperative of Haryana.

MISSION OF THE COMPANY

To serve the economic interest of farmers of Haryana by providing viable & efficient support in agriculture production, marketing & Agri processing.

PRODUCTS OF HAFEDS

OBJECTIVES OF THE STUDY

Main objective is to study the different ratios used in Hafed.

To know the Hafed financial performance based on ratios.

To find out companies efficiency based on past and present profitability ratios.

To study the liquidity position of the company.

To improve the future performance by analyzing its financial statements.

SCOPE OF THE STUDY

The scope of the study is conducted is only for the organizational level. It is done through balance sheet of company. For a period 2012-13, 2013-14.

INTRODUCTION

In our present day economy, finance is defined as the provision of money at the time when it is required. Every enterprise whether big or small, needs finance to carry its operations & to achieve its targets. In fact, finance is so indispensable today that it is rightly said to be the lifeblood of an enterprise without adequate finance no enterprise can possibly accomplish its objectives.

When we observed the financial statement comprising the balance sheet and profit and loss account is that they do not give all the information related to financial operations of firm, they can provide some extremely information to the extent that balance sheet shows financial position on a particular date in terms of structure of assets, liabilities and owners equity and profit and loss account shows the result of operations during the year. Thus the financial statements will provide a summarized view of the firm. Therefore in order to learn about the firm the careful examination of a valuable reports and statements through financial analysis or ratio is required.

MEANING AND DEFINITION

“Financial analysis” is the process of identifying the financial strength and weakness of the firm by properly establishing the relationship between the items of the balance sheet and profit and loss account.

In other words, financial analysis is the process of evaluating the relationship between components of financial statements.

PERFORMANCE SINCE 2008-09

FINANCIAL YEAR TURNOVER IN CRORES NET PROFIT

2008-09 3092.00 33.782009-10 4253.55 43.452010-11 5489.00 40.802011-12 4690.74 41.042012-13 7120.37 43.382013-14

2008-09 2009-10 2010-11 2011-12 2012-13 2013-140.00

1000.002000.003000.004000.005000.006000.007000.008000.00

Turnover

Turnover

2008-09 2009-10 2010-11 2011-12 2012-13 2013-1405

101520253035404550

Net Profit

Net Profit

SOURCES OF FUNDS

1. CAPITAL

The share capital of Hafed as on 31.3.2014 is Rs. 16.14 crore and it includes Government equity of Rs.18.75 lac.

2. RESERVE AND SURPLUS

The reserve & surplus of the federation increased from Rs397.50 crore (as on 31.03.2008) to Rs 718.99 crore (as on 31.03.2012). Year wise position of reserve & surplus of the last five years is as under:

2008 2009 2010 2011 2012 2013 20140.00

100.00200.00300.00400.00500.00600.00700.00800.00900.00

RESERVE & SURPLUS

RESERVE & SURPLUS

YEAR ENDING AMOUNT (in crores)

31.3.2008 397.50

31.3.2009 579.3831.3.2010 631.9031.3.2011 676.7931.3.2012 718.9931.3.2013 764.47

INVESTMENTS

Investments of the federation in various cooperatives and other institutions increased to Rs.137.55 crore (as on 31.3.2013). Hafed has invested in the equity in the of IFFCO, KRIBHO, NAFED, IPL, NCMSL, ACE DERIVATIVES & Commodity exchange ltd., cooperative sugar mill, Gohana and cooperative sugar mill, Sirsa etc..

2008 2009 2010 2011 2012 2013105.00

110.00

115.00

120.00

125.00

130.00

135.00

140.00

INVESTMENTS

INVESTMENTS

YEAR ENDING AMOUNT (in crores)31.3.2008 116.6031.3.2009 116.6031.3.2010 117.6131.3.2011 133.9231.3.2012 137.7231.3.2013 137.55

PROCUREMENT

Wheat procurement on support price. Procurement of Bajra on support price.

Procurement /purchase of mustard seed.

Purchase of sunflower over seed.

Procurement/purchase of paddy.

INPUTS

Fertilizers Certified seeds

Pesticides

Marketing

PROCESSING

Hafed oil mills, Rawari Hafed oil mills, Hafed cattle feed plant, Rohtak Hafed turmeric plant Hafed sugar mill

RATIO ANALYSIS/ ACCOUNTING RATIO

A Ratio is defined as the indicated quotient of two mathematically expression & as the relationship between two or more things.

In financial analysis, a ratio is used as benchmark for evaluating the financial position and performance of a firm.

RATIO ANALYSIS

It is defined as systematic use of ratio to interpret the financial statements so that strength and weakness of firm as well as historical performance and current financial condition can be determined

A Ratio is an aid to management in making decisions. The ratio is discriminately and wisely interpreted be useful tool of financial analysis.

ADVANTAGES OF RATIO ANALYSIS

Simplifies financial statements

Facilitates interfirm comparison

Make intrafirm comparison possible

Helps in planning

Liquidity position

Long term solvency

DISADVANTAGES OF RATIO ANALYSIS

If companies ignores the impact of inflation or price level changes in the financial statements or if financial statements are based on historical costs. Then it becomes limitation of ratio analysis. Another problem is it depends upon the quality of financial statements. For example if there are no transparency/ disclosure of real things in the statements it becomes problem to analyst. But now days it doesn’t hold well because every company has to disclose its information according to accounting standard, in the annual reports.

THE HARYANA STATE COOPERATIVE SUPPLY AND MARKETING

FEDERATION LIMITED

BALANCE SHEET

LIABILITIES 2013 2014 ASSETS 2013 2014

SHARE CAPITAL 18,22,08,027 FIXED ASSETS 5,74,22,35,466RESERVE & SURPLUS 7,64,46,89,346 INVESTMENTS 1,37,55,78,246NET PROFIT 43,38,69,884 DETORS & OTHER

RECOVERABLES5,39,56,52,154

LONG TERM BORROWINGS

40,53,23,350 CLOSING STOCK 52,32,68,20,748

CURRENT LIABILITIES

57,14,65,65,058 LOANS & ADVANCES

8,45,67,814

PROVIOSIONS 21,36,02,827 FIXED DEPOSITS 1,96,25,317CASH & BANK 15,91,38,962

TOTAL 66,02,62,58,492 TOTAL 66,02,62,58,492

LIQUIDITY RATIOS

PARTICULAR CURRENT ASSETS

CURRENT LIABILITIES

RATIO

2012-13 57722472904 57146565058 1.012013-14

1. CURRENT RATIO= CURRENT ASSESTS/ CURRENT

The ratio is an indicator of firm’s commitment to meet its short term liabilities. Higher the ratio, better the coverage, 2:1 is treat as standard ratio. Higher the current ratio the larger the amount of rupees available per rupee of current liability and greater the safety of short term creditors. Thus current ratio represents the short term liquidity “Buffer”.

2. FINANCIAL LEVERAGE=TOTAL ASSETS/SHAREHOLDERS EQUITY

PARTICULAR TOTAL ASSETS SHAREHOLDERS EQUITY

RATIO

2012-13 66026258492 82607672572013-14

2. NET WORKING CAPITAL RATIO= NET WORKING CAPITAL/ NET ASSETS

PARTICULAR NET WORKING CAPITAL NET ASSETS RATIO2012-132013-14

ACTIVITY RATIOS

1. INVENTORY TURNOVER RATIO = COST OF GOODS SOLD/AVERAGE INVENTORY

PARTICULAR COGS AVERAGE INVENTORY

RATIO

2012-132013-14

2. DEBTORS TURNOVER RATIO= SALES/TOTAL DEBTORS

PARTICULAR SALES TOTAL DEBTORS RATIO2012-13 71203740619 5395652154 13.192013-14

Debtors constitute an important constituent of current assets and therefore the quality of debtors to great extent determines that firm’s liquidity.

Higher the debtor’s turnover ratio is better, since it indicate that debts are being collected more promptly.

3. AVERAGE COLLECTION PERIOD = DEBTORS/SALES *360

PARTICULAR DEBTORS SALES RATIO2012-13 5395652154 712037406619 27.27

2013-14

This ratio indicates the extent to which the debt has been collected in time. It gives the average debt collection period. The higher the turnover ratio and the shorter is the debt collection period the better is the trade credit management and the better is the liquidity of debtors., as short collection period and high turnover ratio imply prompt on the part of debtors. On the other hand, low turnover ratio and long collection period reflects that

payment by debtors are delayed.

4. NET ASSEST TURNOVER RATIO = SALES / AVERAGE TOTAL ASSETS

A Firms ability to produce large volume of sales of a given amount of net assets is the most important aspects of its operating performance.

Underutilized assets increases the firm’s need for costly financing as well as expenses for maintains and upkeep.

PROFITABILITTY RATIOS

1. GROSS PROFIT RATIO = GROSS PROFIT/NET SALES

PARTICULAR GROSS PROFIT NET SALES RATIO2012-13 7 650005993 71203740619 10.74%

2013-14

PARTICULAR SALES AVERAGE TOTAL ASSETS

RATIO

2012-13 71203740619 66026258492

2013-14

This ratio reflects the efficiency with which management produces each unit of product. This ratio indicates the average speed between the cost of goods sold & sales revenue.

2. NET PROFIT RATIO = NET PROFIT/ NET SALES

This ratio indicates company’s capacity to withstand adverse economic conditions.

3. DEBT EQUITY RATIO = TOTAL LIABILITIES/ SHAREHOLDERS EQUITY

THE HARYANA STATE COOPERATIVE SUPPLY AND MARKETING FEDERATION LIMITED

PARTICULARS 2012-13 2013-14 PARICULARS 2012-13 2013-14TO OPENING STOCK

36,62,83,45,215 BY SALES 71,20,37,40,619

TO PURCHASES 77,52,33,62,797 BY TRADING INCOME 1,18,17,45,126TO PACKING MATERIAL

6,68,61,978 BY CLOSING STOCK 52,32,68,20,748

TO STORES & SPARES

4,28,97,695

TO TRADING & MANUFACTURING

2,80,08,32,815

TO GROSS PROFIT

7,65,00,05,993

TOTAL 1,24,71,23,06,493 TOTAL 1,24,71,23,06,493

PARTICULAR NET PROFIT NET SALES RATIO2012-13 4338 69884 712037406192013-14

PARTICULAR ssTOTAL LIABILITIES

SHAREHOLDERS EQUITY

RATIO

2012-13 66026258492 82607672572013-14

TRADING & MANUFACTURING A/C

THE HARYANA STATE COOPERATIVE SUPPLY AND MARKETING

FEDERATION LIMITED

PROFIT & LOSS A/C

PARTICULARS 2012-13 2013-14 PARTICULARS 2012-13 2013-14TO ADMINISTRATIVE EXP

61,79,11492 BY GROSS PROFIT 7,65,00,05,993

TO OFFICE OVERHEADS

8,24,56,552 BY STORAGE INCOME

1,14,50,30,350

TO FINANCIAL EXPENSES

7,18,18,30,698 BY MISCELLANEOUS INCOME

13,98,06,032

TO SALES OVERHEADS

10,92,82,837

TO DEPRECIATION 32,66,90,912TO PROVISION FOR AUDIT FEES

1,42,00,000

TO PROVISION FOR INCOME TAX

16,86,00,000

TO NET PROFIT 43,38,69,884

TOTAL 8,93,48,42,375 TOTAL 8,93,48,42,375

CONCLUSION

Ratio analysis is defined as systematic use of ratio to interpret the financial statements so that strengths & weakness of firm as well as historical performance & current financial condition can be determined.

The ratio is an add to management in making decisions. The ratio if discriminately & wisely interpreted be useful tool of financial analysis.

According to analysis of ratios of two years, I came to know that the company made a good effort to increase the profit.

Hafed is well known for their quality products & it has maintained a good relation between customers. And it can increase its profit still better by concentrating the above given suggestion.