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INTRODUCTION

Financial Management is largely concerned with financing, dividend and investment


decision of the firm with some overall goal in the mind. Financial management is that
managerial activity which is concerned with the planning and controlling of the firm’s
financial resources. As a separate activity or discipline it is of origin it was branch of
economics till 1890. Still today it has no unique of knowledge of its own, and it
draws he heavily on economics for its theoretical concepts.

The subjects of financial management are of immense interest of both academicians


and practicing managers. It is of great interest to academicians because the subject is
still developing and there are still certain areas where controversies exit for which no
unanimous solution have been reached yet. Practicing managers are interested in the
subject because among the crucial decisions of the firms are those which relates to
finance and an understanding of the theory of financial management provides them
with conceptual analytical insights to make those decisions skillfully.
NEED OF THE STUDY

The main need of the study is to analyze the financial information of the K.C.P Sugar and

Industries Corporation Limited Vuyyuru.

1 Whether or not funds should be invested in long term project such as

setting of an industry, purchase plant and machinery etc.

2 Analyze the proposal for expansion creating additional capacities.

3 To decide the replacement of permanent assets such as building and equipments.

4 To make financial analysis of various proposal regarding capital investment so as to

choose the best out of many alternative proposal .

5 For any organization, investment on financing decision is critical. As they are involved in

the procurement and disbursement of funds on various projects.


SCOPE OF THE STUDY

The present study is undertaken with an intention that it would be helpful in assessing the
Capital Budgeting position in the organization and to make recommendations for the
improvement of the Capital Budgeting requirements of KCP sugar Ltd. The Study also
highlights the present scenario of the Sugar Industry in the global market as a whole and the
contribution of KCP Sugar Ltd in the Indian Market & State Market in Particular. The Study
includes various aspects regarding the future plans and diversification activities of
KCP Sugars Ltd; in Directors Report. Thus a good deal of ground is covered in the study,
including the trends of various components of Capital Budgeting, so as to find the effect of
each component on Capital Budgeting decision.
OBJECTIVES OF THE STUDY

The main objective of the study is to analyze the financial information of the
K.C.P Sugar and Industries Corporation Limited , Vuyyuru.

1 To determine the capital project during budget period.

2 To estimate the expenditure incurred on capital budget approved by management.

3 To understand the various methods of capital budgeting practiced.

4 To highlight the importance of capital budgeting / capital investment decision in an

enterprise engaged in manufacturing activity.

5 To find out the scope for the future investment.


METHODOLOGY OF THE STUDY:

The study of capital budgeting in K.C.P. sugar & industries corporation Ltd. has been carried
out of studying the company's project reports, budget and revenue estimates. The study can
be broadly divided into two phases.

(1) Primary data.

(2) Secondary data.

Primary data:

The data which is collected at first hand for the purpose of the study is Known as
primary data.

Primary data which is collected through interaction with the assistant Financial
Manager of Amara Raja Power System.

Secondary data:

The data which is collected by someone previously is called as Secondary data. It is


already available in the form of internal records of the company and other publications.

 Collecting relevant Annual Report.


 Analyzing the collected data.
 Drafting the report.
 Updating the final report.
 Collecting the general information about capital budgeting from various standard text
books.
LIMITATIONS OF THE STUDY

Through this study of the Capital Budgeting position in K.C.P.Sugar & I.C. Ltd., the
sources of funds have affected a lot due to major fluctuation in the Capital Budgeting
decision.

1) The analysis made on the basis of secondary data

2) The availability of data is only pertaining to four years is one of the constraints.

3) As there is more dependency is secondary data realistic conclusion may not be


possible to be made.

4) Even though there are no if indicates for analyzing the financial performance the
study includes about liquidity position.

5) There may be approximations

6) The study was carried in K.C.P.Sugar & I.C. Ltd., for a period of 5 weeks.