Addendum A.

77

IProject Illustration 4 j
f rom the following Balance Sheet of Dabu r Indi a Limited and add itional information, prepare
Cash Flow Statement and required accounting ratios to assess short-term financial position. Also intr rpret
the result thereof:

Oabur India Umlted

DaburTower, Kaushambl, Sahlbabad, Ghaziabad - 201 010 (U.P.), India
Tel: 0120 - 39412S2S, 3982000, Fax: 0120 - 4374935, Website: www.dabur.com
(t in Lakh)
Particulars Note No. 31st March, 31st March,
2022 (f ) 2021 (')
I, EQUITY ANO LIABILITIES
1. Shareholders' Funds
(a) Share Capital 17,565 17,438
(b) Reserves and Surplus 1 2,1 2,258 1,72,796
2. Non-Current L11bllitits
(a) Deferred Tax Liabilities (Net) 5,035 4,264
(b) Long-term Provisions 4,279 4,014
3. Current U1blliti1s
(a} Short-term Borrowings 12,913 4,429
(b) Trade Payables 75,664 70,467
(c) Other Current Liabilities 17,022 14,730
(d) Short-term Provisions 2 345 287
Total 3,45,081 2,88,425

II. A.SSETS
1. Non-current Assets
(a) Property, Plant and Equipment and Intangible Assets:

(i) Property, Plant and Equipment 66,243 64,226

2,009 l,139
(Ii) Intangible Assets
1,222 1,673
(iii) Capital Work-In-Progress
1,16,945 31,720
(b) Non<urrent Investments
1,230 1,485
(c) Long-term Loans and Advances
200
(d) Other Non-current Assets
2. Current Assets
37,117 56,367
(a) Current Investments
55,060 SS,820
(b) Inventories
33,879 32,312
(c) Trade Receivables
12,394 29,747
(d) Cash and Cash Equivalents
ll.408 8,462
(e) Short-term Loans and Advances
7,374 5,474
(f) Other current Assets
3,45,081 2.88,425
Total - ------
 A.78 Doobie EAtry Book Keeping-CBSE Xrll
Notes to Accounts (till lJikhJ
Jq it MMCh, I J,lls;t M;m:h,
1
w2u t1 ! 2ar21 m
1. ReNaws and Surplus
General P.eteNe 56,)501 39.294
S&Arplus, u.., Batanct in StJ.tement of Profit & Loss J,Si,908 1,H,51l'2
Total
2. Shott-term ProvtsioM
PrO'mionForTax
345,-~
2, 12,2$,B 1,,72,796

AddilitmaJ /reformation:
1. Proposed Dividend for the year ended 31st March, 2022 wast 19,959 Lakh and for the year ended
31st March, 2021 t 23,755 Lakh.
2. Dq,rtdiztwn (l1f.t/ Amorti.s.alion: 31st March, 2022
~ in Lakh)
Depredatwo on Tangible Fixed Assets 6,219
Amortisation of Intangiole Fixed Assets 378
Total 6,597
3. Other lnamr~ Includes:
Interest J.noome 10,T.:,9
Gain (Profit) on Sale of Assets 52
Total 10,811
4. Loss on Sale oi Tangiole Assets is t 78 Lakh.
5. Gain {Profit) cm Sale of Fu:ed As.sets is f 52 Lakh.
6. Other Expenses include interest payment on Long-term Borrowings f 514 Lakh.
7. Sale of Fixed Assets (Tangible) during the year is f 1,493 Lakh.
8. Other Current Assets romprises of Dividend Receivable on Investments.
Project Solution
About the Project
Assessment about its ability to meet short-term financial obligations as and when they become due for
payment for Liquidity Ratios, u., Current Ratio and Quick Ratio have been computed.
Cash Flow Statement of Dabur India limited is to be prepared as per Accounting Standard-3. Also, the
company's results are to be interpreted.
The data, i.e., BaJance Sheet as at 31st March, 2022 and additional information of Dabur India Limited,
is provided.
The project has been planned and executed as follows:
1. Redrafting of Balance Sheet of Dabur India Limited for the purpose of Cash Bow Statement
2 Cash Flow Statement of Dabur India Limited is prepared as per AS-3 (Revised) for the year ended
31st Match, 'JJJD. is prepared following the lnd.irect Method for romputing Ca.sh Row from Operating
Activities. The company has ~ payment for Tangible and Intangible Assets and also on aocnm.t of
Income Tax and Dividend. Open Memorandum Fixed Assets Acrount to cakw.ate the purchase of ~
3. Cash Flow Statement prepared is analysed and observations are made.
4. Bat diagram js pre-pared to show Cash Flow from (or used in) O~ratir.g, [nvestin.g and
Fimmdnl( Activities.
------------------------~---.....---...,-- -----
Addendum A.79
Redrafted Balance Sheet of Dabur India Limited for the purpose o f Cash Flow Statement:

D1bur lndl1 Umlted

. OaburTower, Kaushambl, Sahlbabad, Ghaziabad- 201 010 (U.P.), India
Tel. 0120- 39412525. 3982000, Fax: 0120- 4374935, Website: www.dabur.com
(f U\
. Lakh)
-Paftla,llars Note No. 31st March, 31st March,
2022 (f) 2021 (t)
- I. EQUITY AND UABILmES
1, Shanholdffl' Funds
(a) Share Capital 17,565 17,,438
(b) Reserves and Surpfus 1 2.17,293 1,n,060
2. Non-Current LlabHities
Long-term Provisions 4,279 4,014

3. Current Llabilities
12,913 4,429
(a) Short·teml Borrowings
75,664 70,467
(b) Trade Payables
17,022 14,730
(c) Other Current Liabilities
2 34S 287
(d} Short-tenn Provisions
3,45,081 2,88,425
Total
II. ASSETS
1. Non-Current Assets
(a) Pro~rty, Plant and Equipment and Intangible Assets:
66,243 64,226
(ij Property, Plant and Equipment
2,009 1,139
(ii) Intangible Assets
1,222 1,673
(iii) Capital Work-In-Progress
1,16,945 31,720
(b) Non-current Investments
1,230 1,485
(cl Long-term Loans and Advances
(d) Other Non-current Assets
200 -
2. Current Assets 56,367
37,117
{a) Current Investments 55,820
55,060
(b) Inventories 33,879 32,312
{c) Trade Receivables
12,394 29,747
(d) Cash and Cash Equivalents
11 ,408 8,462
(el Short-term Loans and Advances 7,374 5,474
(fl Other Current Assets 3,45,081 2.88,425
Tot,I

Clarification:
As per the CBSE Guidelines, accounting treatment of the Deferred Tax Liabilities/Assets (Net) is not
10 be evaluated, otherwise also it is a part of Shareholders' Funds and it is a book entry and not an
actual Liability/Asset. It is an entry passed by debiting/crediting Surplus, i.e., Balance in Statement of
Profit & Loss.
~('Jlce, Balance Sheet has been redrafted where Deferred Tax Liability is added back to Surplus, i.e.,

alance in Statement of Profit & Loss.

 ◄

A.80 Double Entry Book r..eepmg-CBSE X1l

~Notesto A«s,Mrrts
PaticU1afl
31st March,
2022 ({)
I :3 l st March,
202l {t)

1, RtitJ MS and Su,plm

General Reserve
56,350 I , 9,294

SUrplus, Le., Salanc.em Statement of Prom &il.oss 1,55.908 1,33,502

Add: OeferredTax-Uibiflhes (~t)Transferred 5,035 1,60,943 4.,264 1.37,766

Teal
2. Short-tMm Promiofts
2.17,293
--- -
1,77/:HJ

ProvisJon For Tax 345 187

Analytical Tools Used

Analytical tools used for analysis are:
1. Accounting Ratios (,~., Liquidity Ratios), and

2. Cash Flow Statement.

f or anaJysing the financial data of the company.

Computatio n, Analysis and Comments

1. COMPUTATION OF LIQUIDITY RATIO

Particulars 31.st March, 2021 {~) 31st March, 2022 (' )

(,) CIJrrenr RaUo:

Current AsseWCurrent Liabilities '1,88, 18~ 89,913 = t 2.09 : 1 t 1,57,23~ 1,05,944 =' 1.48 : 1
~1 QuK.kRario:
Quick Assets/Current UabflitLes '1,32,362/t 89,913 = f U7 : 1 't 1,02, 172/f 1,05,944 =~ 0.96 : 1

2. CASH FLOW STATEMENT for the year ended 31st March, 2022 ~in Lakh)
Partlculars f or the year
ended 31st
March, 2022
A. Cash Flow from Operating ,A dlvltiu
aosJng Balance of Surplus, I.e., Balance In Statement of Profit & Loss 1,60,943
Less: Opening Balance of Surplus, l e., Balance In Statement of Profit & Loss 1,37,766 23,177
Add: Transferred to General Reserve 17,056
PrOVJslon for Tax 345
Dividend Paid (Proposed for the year ended 31st March, 2021) 23,755
Net Profit t>.fort Tu and ExtraordJruiry Items 64,333
Md: Non•cosh/Non-operollng Expenses:
Depreciation and Amortisation 6;597
Long-term Provisions 26S
Loss on Sale of Fixed Assets 78
flnance Cost (Jnterest on long-term Borrowings)
514t' 7,-454
-
7l,787
►

Addendum A.81
tess: Non~GOSNNon-oPff(Jtmg lnc.omes:
Gain (Profit) on ~ of Axed Auets 52 '
tntetest ·received Ofl Fixed DepQslts T0,759~ _ i0,8H
Op«adnl Profit IMfore Working Captul CIJantes ,
60976
Adjustment of Onc"ase)/decrease In Current As~ts and lnaease/(decrease) in Current Liabifities
Add: tncrtose In CurrentUobilities and Decrease In Currtnt Assets:
Trade Payables 5,197
Other Current Liabilities 2,292
Inventories 760 8,249
69,225
Less: Jncreose in Current Asse~:
Trade Receivables 1,567
Short-term Loans and Advances 2,946
Other Current Assets 1,900 6A13
Cash Generated from Operations 62,812
Ltss: Income Tax (paid) 287
Cash Flow from Operating Activities 62,525
8. Cash Flow from Investing Activities
Purchase of Fixed Assets (Tangible) (9,304)
Purchase of Fixed,Assets {Intangible) (1,248)
Sale of Fixed Assets 1,493
Purchase of Investments (85,225)
Increase in Other Non-currents assets (200)
Decrease in Long-term loans and advances 255
Interest received on fixed deposits 10,759
Cash Used in Investing Activities (83,470)
c. Cash Flow from Finandng Activities
Increase in Short-term Borrowings 8,484
Payment of Dividend (23,755)
Proceeds from Issue of Shares 127
Anance Cost (Interest on Long-term Borrowings) (514)
Cash Used In Anandng Activities (15,658)
O. Net Decrease in Ysh and C.sh Equivalents (A + B + C) (36,603}
Md: Cash and Cash Equivalents in the beginning of the year Cf 56,367 + , 29,747) 86,114
E. Cash and C.sh Equivalents at the end of the year (f' 37,117 + f 12,394) 49,511

Working Notn:

cno,. FIXED ASSETS ACCOUNT (TANGIBLE) Cr.

Particulars . f Particulars ~

To Balanceb!d 64,226 By Loss on Sale of Fixed Assets Ale 78

to Capital Work-in-Progress Ale 451 (Statement of Profit & Loss)
To Gain (Profit) on sale of Fixed Assets A/c 52 By Bank Ale (sale of Fixed Assets) 1,493
(Statement of Profit & Loss) By Depreciation A/c 6,219
To BankNe (Balancing Figure) 9,304 By Balance dd 66,243
_ 74,033 74,033
-
 ----------
OO Ot. RXID ASSm ACCOOHT ONTAl«it8U)
~ f I~ -

to Mar1te bid 1, 139 By A"ffimi5a-ooft Ne

To SinlA!c{~ $tgrr~) J..248 ; By ~ ed d
U81

W fl ltl ~ ~-tH-P'ROGR'BS ACCOUNT Cr.

hltla&n
i ~
1~~
I
'i.> ~ W d 11il3 8)' R,ced~ Al<fT~
~ 8}' B.llance dd
1,613
I 1~
(iv) Cunent ~ ate mduded in Cash and Cash E~iva~f'lts being Maruta~ Securities.

AnaJysu and Comments

1. Cu.nent R.ttio rn the year ended 31st Mardi, 2022 has decreased to 1.48 : l from 2.09 : 1 (previous
year), which fs unsatisf:actory. On other hand,, Quick Ratio of the company was 1.47 : 1 in the
previous }>eM (2021}, w hich was nearly ideal and better. However, it has decreased and reached
to 0.% : 1 in the cunent year (2022). It means the romp-any does not have liquid assets more than
wh at it requires and !his shows efficiency in terms of Cash Management.
2. Cash. ~ t e d from Operations is positive w hich is a positive indication. 1n the near future, the
rompany may not ha""e to rare liquidity problem.
3. ~ in Trade Rerewables is not positive i:ndic.ation. Increase in business may le.ad to increase
in Trade Receh'clbles. However, it should be analysed with the bad debt and debt rollection period
to reach on some conclusion.
4. Decrease in inventory is a positive indication. It shows that inventory is properly utilised, hO\v-ever
this should be further analysed through the Jn\~tory Turnover Ratio.
5. Cash Row from Opaathtg Activities is utilised in investing and financing activities that means bminess
is geneiatistg adequatr cash to finance the purchase of assets as well as payment of loan and Interest.
6. Investment should be checked with return on capital employed.
RESULT Of DffFERENT ACTMTIES Cf in Lakh)

Cash Raw from Operating ActMties 62.525

Cash Used n kMstinQActiwies (83.470)
Cash Used tn Rnancing ActMfies (1 5,658)

1,00,000 '
~=-- - - - - - - - - - - - - - - -
s=
~.ooo ~,--~6=2~
60.000 - + - -
~ 4'0,000 - -

-
~
§.
20.,000 - -
o- -
~ (20,000)-r-- -- - - -- ---' (15,658)
< (40,000) + - - - - - - - - - -1
(60,000) -,..--- - -- - - -
(80,000} - - - - -- - - - -
( 1,00,000) , (83A 70)

Cash·U&ed fn fmestfng Activities Cash Used in Fin ancing Actwitfes

? 83A70 't 15.658 ,
I