INTRODUCTION

INVENTORY MANAGEMENT
“Inventory management” means planning, procurement, holding, accounting, and
distribution of materials. In India, inventories make up about 60% of current assets, with even
higher percentages in industries using agricultural raw materials. This means a significant
portion of working capital is tied up in inventory.

Effective inventory management is essential to prevent losses from leakage, theft, and waste.
Neglecting this aspect can jeopardize long-term profitability. Reducing excessive inventories
positively impacts a company’s profitability.

The financial manager acts as a watchdog over functional areas, particularly in inventory
management. The primary challenge is to maintain an adequate supply of inventory within a
defined financial investment to align with established demand distribution patterns.

Inventory inherently incurs costs, and it can be challenging to see the value gained from these
expenses. Effective inventory management encompasses various activities necessary for
acquisition, storage, sale, and disposal. This subject requires the attention of top-level
management, influencing decisions made by planning and executive personnel.

The study of inventory management is essential for organizations across industries to optimize
operations, reduce costs, and improve customer satisfaction. Inventory often represents a
significant portion of a company's investment. Efficient management ensures that capital is not
unnecessarily tied up in excess stock, reducing carrying costs and improving cash flow. It
minimizes costs related to stockouts, overstocking, obsolescence, and wastage, directly
contributing to higher profitability.

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 NEED FOR THE STUDY

 Helps minimize holding and ordering costs, enhancing profitability.

 Ensures products are available to meet customer demand, improving satisfaction.
 Addresses supply chain uncertainties and reduces stockouts or excess inventory.
 Streamlines production processes by maintaining optimal inventory levels.
 informed decision-making, helping companies stay ahead in the market.

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 OBJECTIVES OF THE STUDY

 To assess and optimize holding, ordering, and stockout costs.

 To enhance accuracy in predicting customer demand for better inventory alignment.
 To identify and implement effective methods like Just-in-Time (JIT), ABC analysis, and
Economic Order Quantity (EOQ).
 To maintain optimal inventory levels that prevent lost sales and excess carrying costs.
 To streamline processes related to inventory handling, storage, and replenishment.

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 SCOPE OF THE STUDY

The current study focuses on inventory management at CCL Products India Ltd. It examines
the composition of raw materials, work-in-process, and finished goods within total inventory,
while also exploring various inventory management techniques utilized by the company. The
scope includes ABC analysis over four financial years, providing insights into high-value items
and highlighting the importance of procurement and maintaining a strong supply of "A" class
items. Additionally, the study analyses investment in inventory during this period, culminating
in an in-depth analysis of the company's inventory control system.

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 METHODOLOGY OF THE STUDY

Primary Data:

The primary data for this study is collected from the purchase, stores, production, and sales
departments. This data provides insights into inventory management processes and practices
within CCL Products India Ltd.

Secondary Data:
Secondary data was obtained from interviews with officers, managers, and supervisors at
CCL Products India Ltd., using non-structured schedules to gather essential information.
Additionally, secondary data was collected from the company’s manuals and office records
related to production, marketing, personnel, and financial status

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 LIMITATIONS OF THE STUDY

1. The reliability of the findings depends on the information provided by the officials.

2. Time constraints make it challenging to delve deeply into the organization's details.

3. The study relies entirely on information from the stores, purchase, production, and sales
departments.

4. The coverage is limited to the five-year period from 2018-19 to 2022-23 due to time
constraints.

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 PROFILE OF COFFEE INDUSTRY IN INDIA

TOP EXPORTS DESTINATION

India exports coffee to more than 50 countries, with its largest importers being Italy, Germany,
Belgium, and the Russian Federation, which together account for approximately 45% of total
exports. Among these, Italy stands out as the leading market, contributing 20% to India's bean
coffee exports.

The Middle East shows a high demand for Arabica coffee, a preference rooted in its historical
ties to the Arabia region. During 2019–20, Indian coffee preparations worth approximately
$141 million were imported by countries such as Russia, Poland, the US, Turkey, and Malaysia.
Additionally, Japan's government commitment to purchase all coffee produced in Manipur is
expected to boost mass-scale production in areas like Chandel, Litan, and Non matching Hills,
previously considered unsuitable for coffee cultivation.

GOVERNMENT INITIATIVES

The Government of India has initiated a subsidy program for farmers, offering between $2,500
and $3,500 per hectare for coffee cultivation in traditional areas. Various schemes provide
additional support for water augmentation, equipment, marketing, and promotion. Through
Coffee Development Programmes (CDP), the government is fostering coffee cultivation in
non-traditional growing regions, including Andhra Pradesh, Odisha, Maharashtra, the
northeastern states, and the Andaman and Nicobar Islands, in line with the national tribal
development policy. Moreover, diverse export promotion initiatives facilitate transit and freight
solutions.

Export Promotion scheme Providing Export incentive

The scheme aims to maximize export earnings by increasing the market share of value-added
and high-value differentiated coffees in key international markets. The government offers an

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export incentive of Rs. 2 per kg for high-value green coffee exports to premium markets,
including the USA, Canada, Japan, Australia, New Zealand, South Korea, Finland, and
Norway. Additionally, there is an incentive of Rs. 3 per kg for exporting value-added coffees
in retail consumer packs branded as "India Brand." This incentive is calculated based on the
green coffee utilized, with a maximum rate of 2.6 kg for instant/soluble coffee and 1.19 kg for
roasted coffee seeds and R&G coffees. The "Coffee Market" research report for 2023 offers a
comprehensive analysis of the industry, categorized by types (Roast & Ground Coffee, Instant
Coffee, Others), applications (Cafes, Foodservice, Supermarket/Hypermarket, Convenience
Stores, Specialist Retailers), and regions. It highlights current trends, emerging opportunities,
potential risks, and key drivers influencing market growth. Focusing on the market's
Compound Annual Growth Rate (CAGR), the report provides valuable insights into historical
and anticipated performance. This resource equips businesses with a holistic overview of
market dynamics, a thorough SWOT analysis, and a strategic roadmap to help companies
navigate their future with confidence and success.

Who is the largest manufacturers of Coffee Market worldwide?

1. Dutch Bros Inc.
2. The Coca-Cola Company
3. Luigi Lavazza S.p.A.
4. Jacobs Douwe Egberts
5. Strauss Coffee Ltd.
6. Tata Consumer Products

Market share

Coffee market analysis

In 2023, the coffee market size is projected to be USD 126.17 billion and is anticipated to grow
to USD 158.89 billion by 2028, reflecting a CAGR of 4.72% over the period (2023–2028).
This growth is fuelled by rising demand for certified coffee products, the expanding popularity
of single-serve coffee brewing systems, and continuous innovations introduced by leading

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industry players. In developed economies, some consumers are shifting from instant coffee to
premium coffee due to quality and flavor preferences. Instant coffee, once viewed as a high-
end product, is losing appeal among younger consumers, altering market dynamics.

Coffee market trend

This section highlights major trends shaping the coffee market, according to our research
experts:

Surge in Demand for Certified Coffee Products

In recent years, consumers have become increasingly aware of product sourcing and
manufacturing processes, particularly for food and beverage items like coffee. As a result, there
is a growing demand for certified coffee products, as consumers seek to ensure the credibility
of their purchases.

Growing conditions

All coffee grown in India is cultivated in shade, typically with two tiers of shade, and is often
intercropped with spices such as cardamom, cinnamon, clove, and nutmeg, which enhance the
coffee's aroma through the intercropping, storage, and handling processes.

Arabica coffee, known for its premium quality, grows at altitudes between 1,000 m (3,300 ft)
and 1,500 m (4,900 ft) above sea level, while Robusta, which is of lower quality but more
resilient to environmental conditions, is grown at altitudes of 500 m (1,600 ft) to 1,000 m (3,300
ft). Both varieties thrive in well-drained soil rich in organic matter with a slightly acidic pH of
6.0–6.5.

Cobras on an Indian coffee plantation

Coffee diseases

Coffee plants in India face several diseases, primarily caused by fungal growth. The most
significant threat is the fungus Hemileia vastatin, which lives within the leaf tissue and has no
known effective cure. Another major disease is the coffee root rot, particularly severe during
the rainy season, especially in Karnataka. This condition is caused by Pellicularia Kole rota,

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which causes leaves to turn black due to a gelatinous film. This leads to the dropping of leaves
and coffee berries. Additionally, snakes, like cobras, can pose a nuisance to coffee plantations
in India.

Processing

In India, coffee processing is done using two main methods: dry processing and wet
processing.

Dry processing is the traditional method that involves sun-drying the coffee cherries, favoured
for its flavour characteristics.

Wet processing, on the other hand, involves fermenting and washing the beans, leading to
improved yields. In this method, the beans are also cleaned to separate defective seeds.

Varieties
n Coorg, along the Cauvery River, four main coffee cultivars are prominent in
India: Kent, S.795, Cauvery, and Selection 9.

 S.795: Released in the 1940s, this variety is a cross between Kent and S.288, known
for its balanced cup and subtle mocha flavor; it is the most commonly planted Arabica
in India and Southeast Asia.

 Cauvery: Also known as Catimor, this cultivar is a hybrid between Catura and Hybrid
de Timor.

 Selection 9: An award-winning variety derived from a cross between Tafa

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PROFILE OF CCL PRODUCTS INDIA LIMITED

Overview of Coffee Industry

India's coffee industry is worth $808 million and is expected to grow at a compound annual
growth rate (CAGR) of 8.9% between 2020 and 2025. As the seventh-largest coffee producer
in the world, India recorded a total production value of $1.04 billion during the 2021-22 period.
Over 70% of the coffee produced in the country is exported, with an export value of $610
million in FY23 (up until September 2022).

Competitors

Nescafe

Founded in 1938, Nescafé is a Swiss coffee brand renowned worldwide and recognized as the
leading coffee brand in India. Its diverse product range includes instant coffee, ground coffee,
and coffee pods, with popular varieties such as Nescafé Classic, Nescafé Sunrise, and Nescafé
Gold.

Catering to coffee enthusiasts of all ages, Nescafé is highly regarded in India for its extensive
selection, consistent quality, and affordability.

Bru

Established in 1968, Bru is a prominent Indian coffee brand, recognized as the second-largest
coffee brand in the country and among the most popular choices for coffee enthusiasts in India.

Bru's primary product lineup includes instant coffee, ground coffee, and coffee pods. Its most
popular products are Bru Instant, Bru Gold, and Bru Select.

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The brand targets coffee enthusiasts of all ages. Bru is recognized as one of the top coffee
brands in India due to its diverse range of products, high quality, and affordable prices.

Tata coffee

Founded in 1922, Tata Coffee is one of India's oldest and most widely recognized coffee brands.
It holds the distinction of being the world's largest integrated coffee plantation company.
Tata Coffee’s product range includes instant coffee, ground coffee, and coffee pods. Some of
its most popular products are Tata Coffee Grand, Tata Gold, and Tata Select.
With a broad target audience, Tata Coffee appeals to people of all ages who enjoy coffee. The
brand is regarded as one of India’s top coffee brands due to its long-standing legacy, high
quality, and affordable pricing.

Awards

 CCL Products (India) Ltd. received the "Export Performance Award for EOUs in
Andhra Pradesh" from the Chief Minister of Andhra Pradesh.
 The company was also awarded the "Export Performance Award" by the Union
Minister of State for Commerce and Industry.
 In 2009, CCL Products (India) Ltd. received the prestigious Bharat Ratna Dr. M.
Visvesvaraya Industrial Award for Best Export Performance.
 In January 2003, the company was granted the ISO 9001:2000 – Quality Management
System Certificate by American Quality Assessors (AQA) International, accredited by
the American National Accreditation Program for Registrars of Quality Systems
(ANSI-RAB). This certification was later upgraded to ISO 9001:2008 – Quality
Management System Certificate in November 2010.
 In January 2004, CCL Products received approval from Food Cert. BV-Netherlands-
FSS-Food Safety System, ensuring compliance with the Dutch National Board of
Experts' HACCP (Hazard Analysis and Critical Control Point) standards. This
certification covers the company's operations, including the procurement of green
coffee, storage, processing of instant soluble coffee (cleaning, roasting, extraction,
drying, agglomeration, and storage), as well as packing, storage of packed products,
and dispatch

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Vision

"To produce and supply superior-quality products with exceptional customer service,
ultimately growing as a market leader in the dairy industry."

Mission

CCL Products India Ltd. is committed to consistently marketing high-quality products at

competitive prices, providing value to business partners, and delivering exceptional
customer service while upholding the highest standards of business ethics.

CCL offers its customers specialty products backed by the following certifications:

1. Organic Certification
Organic coffee is produced using sustainable management practices that help conserve and
enhance soil structure, resilience, and fertility. These practices rely solely on non-synthetic
nutrients and plant protection methods.
While many producers grow coffee without synthetic agrochemicals, this passive approach
alone does not qualify the product as organic
CCL Products is equipped to provide certified organic coffee through accreditation from
recognized certification agencies.

2. Fair Trade Certification

The Fair-Trade organization ensures that farmers and workers receive fair wages and
prices while addressing the challenges faced by coffee farmers in developing countries. By
offering fair pricing, Fair Trade promotes the overall development of coffee farmers and
their families, particularly in regions across Africa and Latin America.
The core principles of Fair Trade include:
(a) Ensuring fair income and pricing for farmers and workers.
(b) Promoting ethical consumption, allowing consumers to support products that do not
explore it farmers and workers.

3. Rainforest Alliance Certification

The Rainforest Alliance Certification is awarded by an independent third party, ensuring
that certified products meet a strict set of ecological, economic, and social criteria. This
certification guarantees consumers that the products they purchase are produced using
sustainable practices.
The Rainforest Alliance certification is a comprehensive process that promotes and ensures
continuous improvement in agriculture and forestry.

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CONTINENTAL SPÉCIALE

Continental Speciale’s a 100% pure, granulated, soluble instant coffee made from carefully
selected plantation Arabica and washed Robusta beans. Expertly blended to perfection, it
delivers complete satisfaction instantly.

Nutritional Information Approx.

Value per 100g
Energy 352
(Kcal)
Carbohydrates (g) 69
Protein (g) 19
Fat (g) 0

Nutritional Information
Approx. Value per 100g
energy (kcal) 354

carbohydrates (g) 70

protein (g) 14

fat (g) 2

CONTINENTAL PREMIUM

Continental Premium is a distinctive blend of carefully selected plantation Arabica coffee

beans, expertly processed to perfection for an instantly satisfying aroma and taste. Its unique
flavour lingers long after consumption.

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CCL offers coffee in 50g, 100g, and 200g jars. These jars, along with their caps, can be
customized in various shapes and materials as per customer requirements. Customization
options include printing or embossing labels, designs, or logos. Available jar shapes include
round, square, and rectangular, with further customization possible. Additionally, CCL
provides shrink sleeve labelling solutions.

The jars can be packed in corrugated boxes for container loading or shrink-wrapped on trays
and palletized as per customer requirements.

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 Pouches/Sachets

CCL Products offers coffee in sachets and pouches of various sizes, ranging from 1g to 1kg,
with customized artwork, labels, and logos as per customer requirements .

Available Sizes:

1g, 5g, 8g, 10g, 25g, 50g, 100g, 200g, and 1kg.

In addition to these standard sizes, CCL can further customize sachet and pouch dimensions to
meet specific customer needs. The packaged sachets and pouches are then packed in corrugated
boxes and either loaded directly into containers or palletized, based on customer requirements.

Bag-in-box

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These bag-in-boxes are further packed in corrugated boxes and either loaded directly into
containers or palletized as required.

Drums

CCL Products supplies freeze-concentrated liquid coffee in drums, loaded in refrigerated

containers as per customer requirements.

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Diagram of production processes

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Process of Description

Green coffee beans are sampled, classified, and stored in a naturally ventilated
facility to maintain moisture levels between 9% and 11%. Cleaning
machines remove impurities like fabric, dust, and stones. The cleaned and sized
coffee is then stored in silos.

(sorting and cleaning)

(Roasting and grinding)

Green coffee beans are batch-weighed and loaded into roasters, where the roasting process is
regulated by hot air circulation and colour monitoring. Once roasted, the beans undergo
quenching via water injection and are cooled using air. Subsequently, they are ground to a
size of 2-3 mm using specialized grinders to ensure optimal extraction. (roasting / grinder
machines)

Ground coffee is weighed and loaded into a battery of seven extractors. Purified hot water at
180°C passes through under controlled counter-current conditions. After extraction, the spent
grounds are removed, and the extractors are refilled.

(Extraction and clarification)

Freshly ground coffee is brewed sequentially, after which the liquid product is split into two
components. The first volatile aroma extract is captured and stored separately.

to remove fines before storage and concentration. drying, preserving the aroma. The extract
from deeper extraction of soluble coffee solids is clarified

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Spray drying

After extraction and clarification, the product in liquid form is combined with flavour and
then undergoes filtration. It is then pumped through a positive pump to the Plate Heat
Exchanger (PHE). The outlet of the PHE directs the product to a high-pressure pump and
suction spray system.

When the fine particles produced from the spray system come into contact with hot air, the
water content evaporates.

Freeze Drying

instead of spray drying, freeze drying can be used after the extraction and clarification stage
to better retain the inherent characteristics of the coffee, including its aroma and taste profile.
This method preserves the most "coffee flavour" but involves a more intricate process.

approximately -40°C, causing the water and coffee components to form ice crystals. Next,
sublimation—a process that converts ice directly into vapor without passing through the
liquid phase—is used to remove the ice. This leaves behind dry, freeze-dried coffee granules,
which are collected into storage containers and prepared for packaging.

Freeze Concentrated Liquid Coffee

Modern freeze concentration techniques incorporate a crystallization stage, wherein a fraction

of the water is transformed into solid ice crystals through refrigeration. These ice crystals are
then separated using devices such as filters, centrifuges, or wash columns.

The primary benefit of freeze concentration technology lies in its ability to preserve product
quality, which is ensured by:

1. Operating at sub-zero temperatures.

2. Utilizing a closed-system design that prevents vapor/liquid loss.

3. Maintaining the integrity of aromas and essential components.

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Board members

Mr. Challa Rajendra Prasad

Chairman & Managing Director

Mr. Challa Rajendra Prasad is an Engineer, Technocrat, and Entrepreneur with over 25 years
of industrial experience and more than 20 years of expertise in the international coffee
industry. He founded CCL Products (formerly known as M/s. Continental Coffee Ltd.) in
1995.

Recognized as a pioneer in the field, Mr. Prasad was the first entrepreneur in India to
introduce Indian soluble coffee to global hard currency markets.

He was also the Promoter and Managing Director of Asian Coffee Ltd., established in 1989,
which was the first Indian non-multinational company engaged in the production of instant
coffee.

Mr. Prasad has previously been associated with coffee projects in Singapore and Dunstable,
UK. Recognized for his contributions to the coffee industry, he served as a Member of the
Coffee Board of India, appointed by the Ministry of Commerce, for three consecutive terms
(1990–1999) and as a Special Invitee in 2004. In 2009, he was reappointed for a three-year
term.

He also holds directorships in multiple companies across diverse industries.

Mr. C. Srishant
Executive Director

A law graduate from NALSAR University of Law, Hyderabad, Mr. Srishant also holds a
Diploma in Information Technology Laws from the Asian School of Cyber Laws.

Mr. Jonathan T. Feuer

Director

A businessman by profession, Mr. Feuer is the President of LMZ Soluble Coffee

Incorporated, a New York-based importer and manufacturer’s representative specializing in
soluble coffee. He joined the firm in 1977 and has served as President and CEO since 1990.

Mr. Jonathan T. Feuer

Director

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With over 30 years of experience in the coffee industry, Mr. Feuer has been a member of key
trade associations, including the Green Coffee Association of New York, the Pacific Coast
Coffee Association, the Tea and Coffee Association of Canada, and the National Coffee
Association (NCA) of the USA. He has held various leadership roles within these
organizations and served as a Director of the NCA for 15 years, including as Treasurer and
Chairman (2008–2010).

A former Director of Asian Coffee Ltd. (now Tata Coffee Ltd.), Mr. Feuer has been on the
Board of CCL Products (India) Ltd. since 1994 and is one of the company’s Foreign
Collaborators. He has also served as a Director in various charitable organizations.

Mr. Feuer travels extensively across South America, Southeast Asia, Europe, and India for the
soluble coffee business.

Mr. Zafar Saifullah

Chairman – Audit Committee & Member – Investor Grievances & Remuneration
Committees

A distinguished member of the Indian Administrative Service, Mr. Zafar Saifullah held the
prestigious position of Cabinet Secretary to the Government of India. Throughout his career,
he served in key roles across various government bodies, state governments, and public
sector undertakings, including:

 Special Assistant to the Minister for Industrial Development, Government of India

 Advisor to the Governor of Haryana

 Development Commissioner & Additional Chief Secretary, Government of Karnataka

 Chairman, Mumbai Port Trust

 Managing Director, Trade Fair Authority of India (now ITPO)

 Secretary, Rural Development & Cooperation Department, Government of Karnataka

 Mr. Vipin K. Singal

Director
 A businessman by profession, Mr. Singal holds a degree in Agricultural Engineering
from Punjab Agricultural University.

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Theoretical Framework
Meaning of Inventory Management:
Inventory Management involves the planning, procurement, holding, accounting, and
distribution of materials. In India, inventories constitute approximately 60% of current assets,
with even higher percentages in sectors reliant on agricultural raw materials. A substantial
amount of working capital is tied up in inventory, making effective management essential to
prevent losses from leakage, theft, and wastage. Poor inventory management can adversely
affect profitability and long-term business sustainability. Reducing excessive inventory can
significantly enhance profitability, and financial managers play a crucial role in ensuring that
supply levels match distribution and demand patterns.

Inventory Management Costs

Holding inventory incurs various costs, which may not provide immediate value. Effective
inventory management includes actions related to acquisition, storage, sales, disposal, and
utilization. Given its impact on financial performance, inventory management requires the
attention of top-level management, where planning and executive personnel are vital in
decision-making.

Objectives of Inventory Management

Effective inventory management seeks to balance conflicting needs, optimizing both

efficiency and profitability. Key objectives include:

 Meeting product demand through organized production and sales.

 Controlling inventory investment and maintaining optimal levels.

 Minimizing excess inventory.

 Preventing delivery delays.

 Leveraging price fluctuations.

 Capitalizing on quality discounts.

Key Aspects of Inventory Management

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Types of Inventories

Inventory represents idle resources with economic value, including:

 Raw Materials: Input for production.

 Work-in-Progress (WIP): Partially completed goods.

 Finished Goods: Products ready for sale.

 Consumables: Items used in production but not included in the final product.

 Bought-out Components: External pre-manufactured parts.

 Packing Materials: Used for packaging products.

 Spare Parts: Components for machinery maintenance.

Influencing Factors in Inventory Management

Internal Factors:

 Production Technology: Efficiency and methods used.

 Criticality of Items: Importance of specific materials.

External Factors:

 Lead Time: Time taken for processes and deliveries.

 Vendor Relations: Quality of supplier relationships.

 Material Availability: Consistency of raw material supply.

 Government Policy: Regulations affecting procurement.

Work-in-Progress (WIP) and Finished Goods

Work-in-Progress (WIP): Serves as a buffer in production, ensuring a smooth workflow amid

variations in production rates.

Finished Goods: Represents complete products ready for customers, acting as a buffer
between production and marketing, ensuring consistent supply to meet customer demands.

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Effective inventory management involves:

1. Maintaining a steady supply of standardized raw materials.

2. Maximizing purchasing concessions and cost savings.

3. Verifying specifications and quality of received materials.

4. Establishing ordering schedules and procedures.

5. Implementing efficient processes for inventory receipt, issuance, storage, and

transaction recording.

Costs of Holding Inventory

Types of Inventory Costs:

 Inventory Cost: Total cost of purchasing and maintaining inventory.

 Carrying Cost: Expenses linked to holding inventory.

 Ordering Cost: Costs associated with placing and receiving inventory orders.

 Stockout Cost: Costs of running out of inventory, leading to lost sales.

 Ordering, Shipping, and Receiving Costs: Related procurement and transportation

expenses.

Benefits of Purchasing
When purchasing raw materials and other goods is not directly tied to production or sales,
firms can take advantage of several key benefits:

1. Bulk Purchasing Discounts: Companies can procure larger quantities than

immediately necessary for production or sales levels. This enables access to discounts
available for bulk purchases, ultimately reducing overall procurement costs.

2. Lower Ordering Costs: By minimizing the number of acquisition transactions,

firms can significantly decrease ordering costs. Fewer orders mean less administrative
effort and logistics involved in the purchasing process.

3. Hedging Against Price Increases: Firms can also buy in anticipation of

announced price increases, which can lead to a decrease in overall production costs.

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Benefits of Production and Sales

Finished Goods Inventory plays a crucial role in decoupling production from sales. This
separation allows production rates to differ from sales rates, offering significant advantages,
especially for firms with seasonal sales patterns.

Benefits of Production

 Adjusting Production Rates: During peak sales seasons, a firm may need to ramp up
production, while during off-seasons, production can be slowed down. Companies can
either produce at a rate that meets actual demand, which may disrupt production
scheduling, or maintain continuous production throughout the year by building up
inventory for seasonal demand. The latter ensures steady production without
interruptions.

Inventory Control

The primary objective of production activities is the timely manufacture of desired products
at specified quality and quantity with minimal costs. Managers must focus on:

1. Maintaining stable operations.

2. Providing adequate service to customers.

3. Keeping stock and equipment investments reasonable.

Inventory Control Approach

A well-structured inventory control system involves three levels of planning:

 Long-range Planning: Strategic decisions regarding capital allocation for facilities

and overall inventory investment.

 Intermediate Planning: Policies and general plans that guide short-term operational
scheduling.

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  Short-term Scheduling: Day-to-day management of inventory levels to
accommodate actual demand fluctuations.

An integrated control system is crucial for production efficiency, effectively assigning work
to facilities and personnel while ensuring a smooth flow of materials.

Factors Influencing Inventory

Inventory levels are dynamic and influenced by a range of internal and external factors:

Internal Factors

 Accurate Demand Forecasting: Vital for predicting material needs and ensuring
timely availability.

External Factors

 Supply Lead Times: The duration required for suppliers to deliver orders.

 Environmental Conditions: Factors like weather impacting transportation and

storage.

Relevant Inventory Costs

Maintaining optimal inventory levels is critical, as both excessive and insufficient stock can
lead to financial inefficiencies.

 Ordering Cost (U): Expenses incurred each time an order is placed and received.

 Inventory Holding Cost (I): Costs associated with storing and maintaining inventory
over time.

 Understocking Cost (KU): Costs from having insufficient inventory to meet demand.

 Overstocking Cost (KO): Costs associated with holding excess inventory.

Cost per Purchase Order:

Cost per Purchase Order=Total Costs Associated with OrderingTotal Number of OrdersCost
per Purchase Order=Total Number of OrdersTotal Costs Associated with Ordering

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Inventory Holding Costs

These costs encompass:

 Interest Rate: The opportunity cost of capital tied up in inventory.

 Obsolescence Cost: Costs resulting from inventory becoming outdated or unusable.

 Overhead Costs: Expenses for storage space, utilities, and handling.

 Insurance Costs: Protecting inventory against damage or loss.

Understocking Costs (KU)

Costs incurred from failing to meet demand due to insufficient inventory lead to:

 Production losses from material shortages.

 Lost sales and potential loss of customers.

 Damage to goodwill and customer relationships.

Service Level

The service level represents the probability of meeting customer demand from available
inventory and balances risks and costs related to understocking and overstocking. It is
calculated as:

Service Level=KUKU+KOService Level=KU+KOKU

Inventory Control Techniques

Employing various techniques to manage and control inventory effectively is essential:

 ABC Analysis: Value-based categorization of inventory items.

 EOQ Analysis: Determines the optimal order quantity to minimize costs.

 HML Analysis: Categorization based on unit price.

 FSN Analysis: Based on consumption rate.

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ABC Analysis (Always Better Control)

Prioritizes inventory control efforts by categorizing items based on their value contribution,
following the Pareto Principle (80/20 rule).

 Category A: High-value items (60-70% of total value, 10-15% of items) requiring

tight control.

 Category B: Medium-value items (20-25% of total value) requiring moderate control.

 Category C: Low-value items (10-15% of total value, 60-70% of items) requiring

simpler control measures.

Steps in ABC Analysis:

1. Calculate Item Value: Multiply the quantity of each item by its unit price.

2. Arrange in Descending Order: Sort by value from highest to lowest.

3. Calculate Running Totals and Percentages: Determine cumulative value and item
counts.

4. Categorize Items: Assign categories based on thresholds.

EOQ Analysis (Economic Order Quantity)

EOQ helps determine the optimal inventory quantity to minimize total costs:

EOQ=2DSHEOQ=H2DS

Where:

 DD = Annual Demand

 SS = Ordering Cost per order

 HH = Holding Cost per unit per year

Additional Inventory Management Strategies

Other Techniques

 HML Analysis: Categorizes based on unit cost.

29
  FSN Analysis: Classifies inventory based on consumption rates (Fast, Slow, Non-
Moving).

Purchasing

The initial stage of materials management involves acquiring goods and services from
suppliers.

Objectives of Purchasing:

 Procure satisfactory quality materials.

 Control quantities purchased.

 Negotiate favourable supplier terms (price, delivery, etc.).

 Ensure proper utilization of purchased materials.

 Coordinate effectively with other departments.

 Maintain positive supplier relationships.

 Identify new potential suppliers.

Stores Control

Involves managing materials from receipt to issuance, ensuring protection from damage and
unauthorized removal.

Key Duties:

 Receiving materials.

 Issuing materials accurately and promptly.

 Protecting materials during storage.

30
 DATA ANALYSIS AND INTERPRETATION
TABLE NO. 1 EOQ Economic Order Quality

Year Annual Ordering Cost Carrying Cost EOQ

Consumption

2019-2020 1742.23 35610.31 738.34 409.95

2020-2021 1614.94 36415.97 625.64 433.46

2021-2022 2220.62 31938.34 823.35 415.06

2022-2023 3368.72 43201.71 892.38 571.12

2023-2024 4215.63 35868.31 718.23 648.89

45000
40000
35000
30000 2019-2020
25000
2020-2021
20000
2021-2022
15000
2022-2023
10000
5000 2023-2024
0
Annual Carrying Cost
Consumption

INTERPRETATION
Economic Order Quantity (EOQ) for CCL Products India Ltd:
 20
 22-23: Highest at 648.892018-19: Lowest at 409.95Trends: 2018-19 (409.95), 2019-
20 (433.46), 2020-21 (415.06), 2021-22 (571.12), 2022-23 (648.89)

31
 RE-ORDER Level
Reorder level= Maximum usage X Maximum delivery time
TABLE NO.2

Year Max Usage Max Delivery Time Re-Order Level

(Days)
2019-2020 1750 12 35,000

2020-2021 1620 15 24,300

2021-2022 2230 17 37,910

2022-2023 3380 19 64,220

2023-2024 4280 20 85,600

90000
80000
70000
60000
50000 2019-2020
40000
30000 2020-2021
20000 2021-2022
10000 2022-2023
0
Max Max Re-Order 2023-2024
Usage Delivery Level
Time
(Days)

INTERPRETATION: Re-order Level for CCL Products India Ltd:

 Highest (2022-23): 85600
 Lowest (2019-20): 24300

32
 MINIMUM LEVEL .
Minimum Level = Re-Order Level-[Normal Usage *Avg Delivery Time]

TABLE NO.3
Year Reorder Normal Avg Delivery Time Minimum
Level Usage (Days) Level

2019-2020 35,000 1,720 10 17,800

2020-2021 24,300 1,585 13 3,695

2021-2022 37,910 2,137 15 5,855

2022-2023 64,220 3,315 15 14,495

2023-2024 85,600 4,215 16 18,160

90,000
80,000
70,000
60,000
50,000 2019-2020
40,000
30,000 2020-2021
20,000 2021-2022
10,000
0 2022-2023
Reorder Avg 2023-2024
Level Delivery
Time
(Days)

INTERPRETATION
Minimum Level for CCL Products India Ltd:
 Highest (2022-23): 18160
 Lowest (2019-20): 3695

33
 SIZE OF INVENTORY
Size of inventory analysis for the period 2019-20 to 2023-24
TABLE NO.4

Year Inventory (₹) Current Assets (₹) Size (%)

2019-2020 12,24,84,659.45 2,59,08,5700.30 47.27%
2020-2021 11,25,61,048.50 23,34,60,275.60 48.21%
2021-2022 10,60,57,502.80 23,95,57,366.91 44.27%
2022-2023 14,42,27,283.90 27,77,73,454.45 51.92%
2023-2024 12,97,30,906.47 29,69,44,628.10 43.68%
SIZE OF INVENTORY ANALYSIS FOR THE PERIOD 2019-2024

30,00,00,000
25,00,00,000
20,00,00,000 2019-2020
15,00,00,000 2020-2021
2021-2022
10,00,00,000
2022-2023
5,00,00,000
2023-2024
0
Inventory Size (%)
(?)

INTERPRETATION:
Inventory as a Key Current Asset (2018-2023):
Inventory averaged ~50% of total current assets, highlighting its significance.

INVENTORY TURNOVER RATIO

34
 Inventory turnover analysis for the period 2019-23
TABLE NO.5
Year Cost of Goods Sold (₹) Avg. Inventory (₹) Ratio (Times)
2019-2020 94,58,42,108.47 9,71,71,096.34 9.73
2020-2021 94,44,43,711.78 9,87,02,221.22 9.56
2021-2022 1,07,13,18,789.81 8,75,09,747.27 12.24
2022-2023 1,17,17,12,926.24 9,74,91,724.38 12.01
2023-2024 1,34,63,89,535.24 10,57,91,845.26 12.72
INVENTORY TURNOVER ANALYSES FOR THE PERIOD 2019-24

90
80
70
60
50 East
40 West
30 North
20
10
0
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

INTERPRETATION
Inventory Turnover Ratio Trend (2018-19 to 2022-23):
The inventory turnover ratio showed a consistent annual increase from 9.7 times to 12.72
times. This positive trend indicates efficient inventory management, leading to a faster
operating cycle and potentially higher profits.

35
 DAYS OF INVENTORY HOLDING
Days of Inventory holding analysis for the period 2019-24
TABLE NO.6
Year No. of Days in Year Inventory Turnover Ratio Period (Days)

2019-2020 365 9.73 38

2020-2021 365 9.56 38.1
2020-2021 365 12.24 30
2021-2022 365 12.01 30
2022-2023 365 11.62 31.41
DAYS OF INVENTORY HOLDING ANALYSIS FOR THE PERIOD 2018-23

400
350
300
250 2018-2019
200 2019-2020
150
2020-2021
100
2021-2022
50
2022-2023
0
No. of Period
Days in (Days)
Year
INTERPRETATION

Inventory Holding Period Trend:

The inventory holding period gradually decreased from 38 to 30 days, inversely related to the
increasing inventory turnover ratio.

36
 RAW MATERIALS TURNOVER
TABLE NO : 7
RAW MATERIALS TURNOVER RATIO RAW MATERIALS TURNOVER RATIO
Year Annual Consumption & Raw Material (₹) Avg. Raw Materials (₹) Turnover Ratio

2018-2019 81,26,14,247.30 1,61,51,486.56 50.3

2019-2020 79,84,91,603.55 1,32,99,869.19 60.03

2020-2021 92,74,42,548.91 1,52,43,622.85 60.84

2021-2022 1,06,38,84,257.24 2,09,43,262.57 50.79

2022-2023 11,42,18,990.86 2,82,94,267.19 40.33

RAW MATERIALS TURNOVER RATIO

1,20,00,00,000
1,00,00,00,000
2018-2019
80,00,00,000 2019-2020
60,00,00,000 2020-2021
40,00,00,000 2021-2022
2022-2023
20,00,00,000
0
Annual Avg. Raw Materials Turnover Ratio
Consumption & (?)
Raw Material (?)

INTERPRETATION
Raw Material Turnover Fluctuation (2018-2023):
Raw material turnover fluctuated over the past 5 years, decreasing significantly from 50.32 in
2018-19 to 40.32 in 2023.

37
 AVERAGE OF RAW MATERIAL INVENTORY:
TABLE NO.8
Year Avg. Raw Purchase of Raw Material No. of Days in Period
Material (₹) (₹) Year (Days)

2018-2019 1,61,51,486.56 81,26,14,247.30 365 7.25

2019-2020 1,32,99,869.19 79,84,91,603.55 365 6.08

2020-2021 1,52,43,622.85 92,74,42,548.91 365 5.99

2021-2022 2,09,43,262.57 1,06,38,84,257.24 365 7.15

2022-2023 2,82,94,267.19 11,42,18,990.86 365 9.13

AVERAGE OF RAW MATERIAL

1,20,00,00,000
1,00,00,00,000
80,00,00,000
60,00,00,000 2018-2019
40,00,00,000 2019-2020
20,00,00,000 2020-2021
2021-2022
0
Avg. Raw No. of 2022-2023
Material Days in
(?) Year

INTERPRETATION
Raw Material Inventory Age Fluctuation: The age of raw material in inventory fluctuated
over the last 5 years, increasing from 7 days in 2018 to 9 days in 2021.

38
 FINISHED GOODS TURNOVER RATIO:
TABLE NO.9

Year Cost of Goods Sold (₹) Finished Goods (₹) Turnover Ratio (Times)
2018-2019 94,58,42,108.47 1,01,21,286.26 9.34
2019-2020 94,44,43,711.78 96,19,1574.18 9.82

2020-2021 1,07,13,18,789.81 78,82,7920.37 13.59

2021-2022 1,17,17,12,926.16 1,16,15,55,28.40 10.08

2022-2023 1,34,63,89,535.24 95,42,81,62.13 14.10

FINISHED GOODS TURNOVER RATIO

1,40,00,00,000
1,20,00,00,000
1,00,00,00,000
80,00,00,000 2018-2019
60,00,00,000 2019-2020
40,00,00,000 2020-2021
2021-2022
20,00,00,000
2022-2023
0
Cost of Finished Turnover
Goods Goods Ratio
Sold (?) (?) (Times)

INTERPRETATION
Finished Goods Turnover Ratio Trend:
The finished goods turnover ratio consistently increased from 9.34 times to 14.10 times
during the study period.

39
 TABLE NO.10
Year Average Stock Total Cost of Goods No. of Days in Period
(₹) Sold (₹) Year (Days)
2018-2019 97,171,096.37 98,42,108.47 365 37.49
2019-2020 98,702,221.22 9,44,711.78 365 38.14
2020-2021 87,509,747.28 1,31,789.81 365 29.81
2021-2022 97,491,724.39 4,07,12,926.16 365 30.36
2022-2023 105,791,845.27 4,63,89,535.24 365 28.68
AVERAGE OF FINISHED GOODS

12,00,00,000
10,00,00,000
8,00,00,000
6,00,00,000 2018-2019
4,00,00,000 2019-2020
2,00,00,000 2020-2021
2021-2022
0
Average No. of 2022-2023
Stock Days in
(?) Year

INTERPRETATION
Average Finished Goods Inventory Turnover:
The average holding period for finished goods gradually decreased from 37 to 28 days during
the study period.

40
 AVERAGE OF COFFEE INVENTORY
TABLE NO.11

Year Average Coffee (₹) Purchase of Coffee (₹) No. of Days in Year Period (Days)

2018-2019 1,880,462.59 687,503,360.03 365 0.99

2019-2020 764,940.90 701,450,127.00 365 0.365

2020-2021 576,316.87 797,274,516.79 365 0.26

2021-2022 614,778.52 907,999,355.00 365 0.255

2022-2023 817,999.90 982,138,444.30 365 0.30

AVERAGE OF COFFEE INVENTORY

1,00,00,00,000
90,00,00,000
80,00,00,000
70,00,00,000
60,00,00,000 2018-2019
50,00,00,000 2019-2020
40,00,00,000 2020-2021
30,00,00,000 2021-2022
20,00,00,000 2022-2023
10,00,00,000
0
Average Coffee Purchase of No. of Days in Period (Days)
(?) Coffee (?) Year

INTERPRETATION
Rapid Raw Coffee Turnover:
Raw coffee moves to the chilling process within one day, indicating minimal inventory
holding.

41
 FINDINGS
 They are checking the stock regularly, and only then placing the order when they
require materials.

 They know the total consumption of raw materials per day/per month and maintain
daily records.

 The plant maintains gate passes for every vehicle.

 The store-in-charge does not have the power to make emergency decisions at the store
level.

 Employees do not have sufficient knowledge of the technology used in the

organization.

 Material was transferred from one unit to another; it is more expensive compared to
carrying costs.

 The current asset value keeps increasing, but... (this sentence seems incomplete).

 They are following the FIFO (First In, First Out) technique to process their inventory
because they produce perishable products.

42
 SUGGESTIONS

 The company should introduce a continuous stock verification system for all
materials.

 The company should give authority to store-in-charge to make emergency decisions at

the store level related to materials.

 The company should conduct special training sessions for employees to improve their
knowledge and introduce new computerized techniques.

 It is better to maintain sufficient stock in every unit to reduce transportation costs.

 The plant should maintain a requisition note for every material.

 The company should take necessary steps to retain labour

43
 CONCLUSION

If your goal is to make your business more profitable, you must increase efficiency and
reduce costs.

As a member of the distribution industry, inventory is your largest investment. Careful

classification of inventory and continuous analysis of these classifications play a vital role in
maintaining costs at efficient levels aligned with your business goals.

Payroll is an immediate expense for your business. The time invested in inventory
management will yield both immediate and long-term benefits by reducing the time
employees spend on repetitive tasks. With increased speed, accuracy, and efficiency, you will
no longer be paying employees to perform tasks that an automated system or dealer can
handle for them.

44
 Author Book Title

I.M. Pandey Financial Management

Khan & Jain Financial Management

S.N. Maheshwari Financial Management

Prasanna Chandra Financial Management

Eugene F. Brigham Financial Management

&
Louis C. GAPENSKI

45
 DATA COLLECTION
BALANCE SHEET AS AN 2019-2020
Liabilities 2018 2019 Assets 2018 2019

AUTHORIZED 10,00,00,000 10,00,00,000 FIXED ASSETS

CAPITAL

Paid-up Capital 32,79,000 39,69,000 Land 18,90,601 18,90,601

Share Suspense 1,25,42,436 1,29,60,164 Building 3,76,58,869 3,84,28,414

General Reserve 32,49,036 39,02,484 Plant & Machinery 8,55,19,177 9,28,53,394

Fund

Deficiency 7,00,898 8,40,932 Furniture 7,65,591 7,65,591

Recoupment Fund

Co-operative 2,33,632 2,80,307 Vehicles 51,34,708 51,83,858

Fund

Price Fluctuation 4,67,266 5,60,616 Cement Cans 55,74,937 34,30,734

Fund

Undistributed 3,005 3,005 Other Assets 1,63,62,019 1,86,55,583

Profit

Surplus of P&L 9,33,497 8,06,058

A/c

GRANTS INVESTMENTS &

DEPOSITS

From NDDB 24,69,69,590 2,46,96,950 Shares in 25,200 25,200

Cooperation

From Other 12,67,702 12,67,702 Deposits with 84,75,270 72,13,865

Agencies Institutions

LOANS CURRENT
ASSETS
Secured Loan Closing Stock 14,42,27,281 12,97,30,904

Cash Credit Loan 6,40,00,000 6,40,00,000 Cash in Hand 14,15,525 20,69,031

(KDCC Bank)

Cash Credit from 2,00,93,425 - Cheques in Transit 26,04,025 32,51,051

NDDB

Unsecured Loan Bank 4,92,45,469 9,98,84,590

From NDDB 2,56,54,103 2,05,95,762 Fixed Deposits 45,81,849 1,13,77,867

46
 From Other 73,01,800 48,91,985 Debtors 69,70,698 4,42,01,029
Agencies

CURRENT Loans & Advances 59,24,710 50,21,726

LIABILITIES

Sundry Creditors 31,35,77,801 2,51,38,039 Prepaid Expenses 10,64,891 14,08,424

For Cement 4,60,62,789 4,39,43,213 Amount Kept in 39,42,888 39,42,888

Purchases Audit Objectives

Outstanding 8,09,65,041 8,28,08,996 Deferred Revenue 2,77,17,232 2,50,44,543

Expenses Expenditure

Reserve for 10,49,31,361 10,95,56,950

Depreciation

Reserve for Audit 39,42,888 39,42,888

DEPOSITS

Fixed Deposits 30,94,231 32,59,001

Reserve Fund 35,66,850 33,10,447

Deposits

Security Deposits 2,33,49,307 2,71,01,010

TOTAL 47,18,39,950 49,43,79,303 TOTAL 47,18,39,950 49,43,79,303

47
 Balance Sheet as on 2020-2021
Liabilities 2020 2021 Assets 2020 2021

AUTHORIZED 10,00,00,000 10,00,00,000 FIXED ASSETS

CAPITAL

Paid-up Capital 4,52,54,000 39,69,000 Land 18,90,601 18,90,601

Share Suspense 1,44,17,894 1,29,60,164 Building 3,87,53,947 3,84,28,414

General 44,66,724 39,02,484 Plant & 10,17,49,781 9,28,53,394

Reserve Fund Machinery

Deficiency 9,61,832 8,40,932 Furniture 8,74,705 7,65,591

Recoupment
Fund

Co-operative 3,20,610 2,80,307 Vehicles 41,66,904 51,83,858

Fund

Price 6,41,222 5,60,616 Cement Cans 34,30,734 -

Fluctuation
Fund
Undistributed 3,005 3,005 Other Assets 3,34,59,141 1,86,55,583
Profit

Surplus of P&L 26,27,247 8,06,058

A/c

GRANTS INVESTMENTS
& DEPOSITS

From NDDB 3,43,57,933 2,46,96,950 Shares in Co- 25,200 25,200

operation

From Other 12,67,702 12,67,702 Deposits with 73,62,075 72,13,865

Agencies Institutions

LOANS CURRENT
ASSETS

Secured Loan Closing Stock 15,36,24,793 12,97,30,904

Cash Credit 6,43,57,933 6,40,00,000 Cash in Hand 14,36,332 20,69,031

Loan (KDCC
Bank)

48
 Cash Credit 2,00,93,425 - Cheques in 77,11,542 32,51,051
from NDDB Transit

Unsecured Bank 12,46,40,643 9,98,84,590

Loan
From NDDB 1,54,67,771 2,05,95,762 Fixed Deposits 89,23,153 1,13,77,867

From Other 6,73,77,262 48,91,985 Debtors 3,99,00,770 4,42,01,029

Agencies

CURRENT Loans & 86,63,772 50,21,726

LIABILITIES Advances

Sundry 4,03,02,260 2,51,38,039 Prepaid 14,19,470 14,08,424

Creditors Expenses
For Cement 4,80,24,945 4,39,43,213 Amount Kept in 39,42,888 39,42,888
Purchases Audit Objectives

Outstanding 8,13,11,329 8,28,08,996 Deferred 2,32,13,988 2,50,44,543

Expenses Revenue
Expenditure
Reserve for 11,18,70,904 10,95,56,950
Depreciation

Reserve for 39,42,888 39,42,888

Audit
DEPOSITS

Fixed Deposits 29,97,430 32,59,001

Reserve Fund 30,35,749 33,10,447

Deposits

Security 2,86,84,679 2,71,01,010

Deposits
TOTAL 56,27,59,715 49,43,79,303 TOTAL 56,27,59,715 49,43,79,303

49
 Balance Sheet as on 2021-2022
(Amounts in ₹)
Liabilities 2021 2022 Assets 2021 2022
AUTHORIZED 10,00,00,000 10,00,00,000 FIXED ASSETS
CAPITAL
Paid-up Capital 4,98,06,000 4,76,48,000 Land 18,90,601 18,90,601
Share Suspense 1,55,89,590 1,82,30,392 Building 3,99,55,104 3,99,55,104
General 48,25,401 47,29,449 Plant & 12,19,66,306 12,09,57,759
Reserve Fund Machinery
Deficiency 14,99,846 13,55,919 Furniture 11,00,730 10,79,192
Recoupment
Fund
Co-operative 4,99,948 4,51,972 Vehicles 61,51,473 54,40,925
Fund
Price 6,49,532 24,80,295 Cement Cans - -
Fluctuation
Fund
Undistributed 3,005 3,005 Other Assets 2,10,39,694 1,96,65,856
Profit
Surplus of P&L 2,14,76,850 9,56,515
A/c
GRANTS INVESTMENTS
& DEPOSITS
From NDDB 2,46,96,950 2,46,96,950 Shares in Co- 10,25,200 10,25,200
operation
From Other 32,67,702 17,67,702 Deposits with 81,44,941 75,24,799
Agencies Institutions

50
 LOANS CURRENT
ASSETS
Secured Loan Closing Stock 17,82,64,067 13,53,55,307
Cash Credit 6,43,57,933 - Cash in Hand 1,07,160 16,67,725
Loan (KDCC
Bank)
Cash Credit 88,45,370 - Cheques in 14,52,536 8,25,790
from NDDB Transit
Unsecured Loan Bank 8,88,55,874 6,87,25,312
From NDDB 2,05,95,762 - Fixed Deposits 8,98,32,804 5,99,58,670
From Other 48,91,985 - Debtors 4,91,66,473 5,57,10,699
Agencies
CURRENT Loans & 37,42,488 42,86,319
LIABILITIES Advances
Sundry 4,67,73,143 4,82,85,701 Prepaid 6,62,527 2,69,743
Creditors Expenses
For Cement 11,59,46,185 8,84,30,075 Amount Kept in 39,42,888 39,42,888
Purchases Audit Objectives
Outstanding 13,59,90,155 10,72,05,802 Deferred - -
Expenses Revenue
Expenditure
Reserve for 12,81,59,818 11,95,67,034
Depreciation
Reserve for 39,42,888 39,42,888
Audit
DEPOSITS
Fixed Deposits 50,95,797 47,71,736
Reserve Fund 77,64,277 69,92,035
Deposits
Security 3,49,56,191 2,96,33,676
Deposits
TOTAL 61,73,00,875 52,82,81,897 TOTAL 61,73,00,875 52,82,81,897

51
 Balance Sheet as on 2022-2023
(Amounts in ₹)
Liabilities 2022 2023 Assets 2022 2023
AUTHORIZE 10,00,00,00 10,00,00,00 FIXED
D CAPITAL 0 0 ASSETS
Paid-up 4,98,10,000 4,98,06,000 Land 10,25,200 18,90,601
Capital
Share 1,55,89,590 1,55,89,590 Building 3,99,55,104 -
Suspense
General 69,73,087 48,25,402 Plant & 12,19,66,30 12,09,57,75
Reserve Fund Machinery 6 9
Deficiency 1,76,07,483 14,99,846 Furniture 11,00,730 10,79,192
Recoupment
Fund
Co-operative 15,73,791 4,99,989 Vehicles 61,51,473 54,40,925
Fund
Price 27,97,217 6,49,533 Cement Cans - -
Fluctuation
Fund
Undistributed 3,005 3,005 Other Assets 2,10,39,694 1,96,65,856
Profit
Surplus of 2,97,85,849 2,14,76,851
P&L A/c

52
 GRANTS INVESTMEN
TS &
DEPOSITS
From NDDB 2,46,96,950 2,46,96,950 Shares in Co- 10,25,200 10,25,200
operation
From Other 53,03,242 32,67,703 Deposits with 81,44,941 75,24,799
Agencies Institutions
LOANS CURRENT
ASSETS
Secured Loan Closing Stock 17,82,64,06 13,53,55,30
7 7
Cash Credit 61,81,640 - Cash in Hand 8,74,691 1,07,160
Loan (KDCC
Bank)
Cash Credit 10,00,00,00 88,45,370 Cheques in 20,76,568 14,52,537
from NDDB 0 Transit
Unsecured Bank 7,64,48,385 8,88,55,877
Loan
From NDDB 2,05,95,762 - Fixed Deposits 15,72,00,79 8,98,32,804
0
From Other 48,91,985 - Debtors 5,25,27,833 4,91,66,474
Agencies
CURRENT Loans & 1,13,991 6,82,579
LIABILITIES Advances
Sundry 4,95,24,664 4,67,73,143 Prepaid 9,26,720 6,62,527
Creditors Expenses
For Cement 11,20,12,63 11,59,46,18 Amount Kept 39,42,888 39,42,888
Purchases 2 5 in Audit
Objectives
Outstanding 8,76,84,888 13,59,90,15 Deferred - -
Expenses 6 Revenue
Expenditure
Reserve for 13,60,98,66 12,81,59,81
Depreciation 4 9
Reserve for 39,42,888 39,42,889
Audit
DEPOSITS

53
Fixed Deposits 54,38,173 1,07,160
Reserve Fund 83,99,999 14,52,537
Deposits
Security 4,00,02,093 8,88,55,875
Deposits
TOTAL 70,72,55,23 61,73,00,87 TOTAL 70,72,55,23 61,73,00,87
2 5 2 5

54