The company was incorporated under the Indian Company's Act 1956 on 18th June 1981 as Visaka Asbestos Cement Product ltd and promoted by Dr.G.Vivekananda with investment of Rs 4 crores to set up cement asbestos plant in Medak district of Andhra Pradesh. It has grown in to multiple folds and now has a turnover of Rs 195 crores and asset of about Rs 98 crores by April 2009. In 1991 the company started working on synthetic yarns. Today the company is one of the leading manufacturers in asbestos cement sheets and synthetic yarns. The company is also regular in paying the dividends to their shareholders every year in their annual general meeting. Asbestos cement products industry in India comprises of about 13 players with about 41 manufacturing plants situated in different parts of the country. The products are marketed under their respective brand names mainly through dealers for the retail market and directly for products and government departments. The retail market is expected to grow significantly due to its semantic advantage over the other substitutes in the form of cost fire and heat resistant and durability. Many state governments are encouraging AC sheet to thatched roofs, which will help in the industry due to the continuous innovations, and the bottle necking efforts coupled with penetrative marketing efforts productions and sales are continually growing over the years. The capacity at the Patancheru plant has been increased by 25% during 2001-2002 with appropriate investment in the equipments.
[...] MARKET CONDITIONS: The degree of competition prevailing in the market place has an important bearing on working capital needs when competition is keen, a larger inventory of finished goods is required promptly to serve customers who may not be inclined to wait because other manufacturers are ready to meet their needs. Further, generous credit terms may have to be offered to attract customers in a highly competitive market. Thus, working capital needs tend to be high because of greater investment in finished goods, inventory and accounts receivable. [...]
[...] For the purchase of raw material, components and spares To pay wages and salaries To incur day to day expenses and overhead costs To meet the selling cost as packing, advertising etc To provide credit facility to the customers To maintain the inventories of raw material, work in progress, stores For studying the need of working capital in a business, one has to study the business under varying circumstances such as new concern, as a growing concern and as one, which has attained maturity. [...]
[...] In the spinning division the company has been making study progress on the export front since inception. The company participated in the yarns show held in Chile, Argentina and Brazil during the period 21st July to 1st August 2005 and in Srilanka during the period 6th to 8th December 2005. The response of the company's yarn has been encouraging. The company's export during 2005 and 2006 was Rs 1294 lakhs. The company enjoys export house status. In the expansion unit, the company has installed latest generation high speed twin air-jet spinning machines, which had better measurability to manufacture different varieties of dyed yarn, harrow shades, harrow mileage and other fancy yarn. [...]
[...] Table showing projected net working capital from 2006-07 to 2010-11 Years Working capital 2006-2007 420.83 2007-2008 4715.94 2008-2009 5011.05 2009-2010 5306.15 2010-2011 5601.26 FINDINGS The finding of the study on the financial performance of VISAKA INDUSTRIES LIMITED may be laid as follows. The company's statement of changes in working capital shows increasing trend of working capital. As per company's comparative balance sheet, current assets show increasing trend and current liabilities shows decreasing trend. It shows that company is disposing the liabilities in the later years. [...]
[...] The goal of working capital management is to manage the firm's current assets and current liabilities in such a way that a satisfactory level of working capital is maintained. This is so because if the firm cannot maintain a satisfactory level of working capital, it is likely to become insolvent and may even be forced in to bankruptcy. The current assets should be large enough to cover its current liabilities in order to ensure a reasonable margin of safety. Each of the current assets must be managed efficiently in order to maintain the liquidity if the firm while not keeping too high a level of any of them. [...]
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