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A PROJECT REPORT ON

CASH MANAGEMENT
AT

KIRLOSKAR ELECTRICALS LTD, MYSORE


Submitted in partial fulfillment of the Requirement for the Award of Masters Degree in Business Administration. Submitted By: SRIPRIYA.T.K ROLL.NO:10780010
INTERNAL GUIDE EXTERNAL GUIDE

PROF.MANOHARAN, Lecturer,Dos in management ,SOMANI College,Mysore

MISS.PRIYA Finance Executive, KIRLOSKAR ELECTRICALS LTD

SUBMITTED TO

KARNATAKA STATE

OPEN UNIVERSITY

MANASAGANGOTRI,MYSORE 2012-13

DECLARATION
I Mrs sripriya.T.K, hereby declare that this Project Report entitled

CASH MANAGEMENT submitted by me to the Department of Business


Management, for Karnataka state open university,mysore , is a bonofied work undertaken by me and it is not submitted to any other University or Institution for the award of any degree diploma / certificate or published any time before.

Signature of the Student

KARNATAKA STATE

OPEN UNIVERSITY

Manasagangotri, Mysore-570006,

Department of Commerce and Management

Date:.

PROJECT CERTIFICATE
This is to certify that Mrs sripriya.T.K bearing the register Number 10780010 has successfully completed the project work on CASH MANAGEMENT, AT KIRLOSKAR ELECTRICALS LTD., under the guidance of SRI MANOHARAN(internal) and Miss priya (external). The project report is submitted to the Karnataka State Open University in partial fulfillment of the requirements for the award of Masters of Business Administration (MBA) during 2012. Prof. Jagadeesha Chairman Departments of studies & Research in Management

KARNATAKA STATE

OPEN UNIVERSITY

Manasagangotri, Mysore-570006,

Department of Commerce and Management

Date:.

GUIDE CERTIFICATE
This is to certify that Smt SRIPRIYA bearing the register number 10780010 has successfully completed the project work on CASH MANAGEMENT, AT KIRLOSKAR ELECTRICALS, LTD Under my guidance and supervision.

GUIDE SIGNATURE

ACKNOWLEDGEMENT

At the outset I would like to thank the Management of KIRLOSKAR GROUP for the wholehearted co-operation and guidance extended by them, which made my summer training project possible. I would like to thank Mr. SUSHANTH KUMAR JAIN (Chief

Financial Officer), MS. PRIYA (EXTERNAL GUIDE), and Mrs. Kiran Chopra ( Chief Secretary & System Manager) for providing me this opportunity to carry out the project. I am very grateful to my project guide Mr.pulak( Finance Department) KIRLOSKAR Limited for his support and suggestions, which led to the completion of this project. I would also like to thank Mr. MANOHARAN.M.N , INTERNAL GUIDE and my family members and other staff members for their support and cooperation.

SUPRIYA.T.K

STUDENT DECLARATION
I MRS. SRIPRIYA.T.K, student of Masters in Business Administration FROM KARNATAKA STATE OPEN UNIVERSITY,MYSORE hereby declare that the bonofied work entitled Study of Cash Management With special reference to, KIRLOSKAR Group (KG) submitted in fulfillment of the training; is my original work and is not submitted for the award for any other degree, fellowship or similar title or prize.for any university/diploma.

SRIPRIYA.T.K

EXECUTIVE SUMMARY

If the development capital is what establishes a business, cash flow is what keeps it going. One of the most common downfalls of business is unexpectedly high running cost. What is important is not just the size of operating costs, but the cash flow-that is when money has to be paid out in relation to the stream of income arriving in. Thus cash flow management is of prime importance. KIRLOSKAR Ltd. is the holding company of the KIRLOSKAR Group. Post restructuring, agri - machinery or tractors have become the focus area of operations. Other business i.e. two- wheelers, IT, Telecom, construction equipment, are controlled through subsidiaries and joint venture. Post hive off of its pistons business to a joint venture with a foreign collaborator, Escorts is focusing on its core competence of tractors. Escorts have strong hands in house engineering skills, a wide distribution/service network and brand franchise. The project is small attempt to study the cash management in KIRLOSKAR group. Added to this fact that mechanization level in India is currently very low as compared to the world standards.To analyze the performance, published balance sheets of Escorts Limited, CASH FLOW STATEMENTS are been used. This project report is based on financial data up to 2011-12 only. The financial year for KIRLOSKAR is from 01/10/20XX to 31/09/20XX. KIRLOSKAR is maintaining the following records which is indicative of its professional approach:

Maintaining proper set of accounting records. Maintaining an accurate cash book with bank statement Daily cash inflow & cash outflow. Marking regular forecast of cash requirement based upon planed sales volume. Ageing of debts/credits with comparisons to previous month

TABLE OF CONTENTS
OBJECTIVE COMPANYS PROFILE MISSION QUALITY POLICY BACKGROUND OF THE BUSINESS SUBSIDERIES BANKERS

CASH MANAGEMENT INTRODUCTION CASH FLOW MANAGEMENT CASH

MANAGEMENT SYSTEM IMPORTANCE OF CASH MANAGEMENT CASH MANAGEMENT STRATEGIES CASH OUTFLOW CASH INFLOW CASH FLOW STATEMENT IMPORTANCE DAILY CASH FLOW REPORT CASH BUDGET BANK RECONCILIATION

CASH RATIOS RECEIVABLES MANAGEMENT PAYABLE MANAGEMENT RECOMMENDATIONS LIMITATIONS BIBLIOGRAPHY ANNEXURES

OBJECTIVES

It is well known fact that we remember 20% of what we hear, we remember 40% of what we see but we remember 75% of what we do. Undergoing M.B.A is the first step to prepare myself as a manager and visualize the ever-dynamic business world and my main objective while taking up the training was to familiarize myself with the working of the finance department of KIRLOSKAR ELECTRIC LTD To present study in KIRLOSKAR ELECTRIC LTD machinery group mainly focus on the following : Resources of cash inflow of the company. Cash flow factors which have effect of cash inflow. Cash flow statement in the company. Cash flow management in the company

COMPANYS PROFILE

ABOUT KIRLOSKAR

We are the leading manufacturers of Electrical and Electronic Equipments in India. Kirloskar Electric Company offers more than 70 products under 8 product groups catering to core sectors of the economy like Power Generation, Transmission and Distribution, Industry, Transportation, Renewable Energy etc. The Kirloskar Electric Company Network of 10 manufacturing locations, 34 sales offices spread across the country, wide network of spares dealers and service centers and hundreds of dealers enables the company to efficiently serve the customers and advise on suitable products,systems and services at competitive rates. The high levels of quality and reliability of products is due to the emphasis on Design, Engineering and Manufacturing to international standards by acquiring and adapting best technologies from leading companies along with technology developed in house. Kirloskar Electric has

Installed base of 2.6 million motors in Petrochemicals, Refineries, Steel, Aluminum, Fertilizer, Cement plants,Agro based industries, etc.

Supplied over 15000 MVA of transformers operating in T&D network upto 100MVA 220kV Class for Utilities, Captive and Industrial users.

Supplied Traction Electrics,Powercar Generators and Batteries to the Indian Railways.

Kirloskar Electric is organized around 3 business sectors:


Power Generation. Industrial Equipments. Power Equipments. This enables Kirloskar Electric Company to have a strong customer orientation, to be sensitive to the needs and respond quickly to the changes in the market. Kirloskar Electric Company's vision is to become a world-class engineering enterprise, committed to enhancing stakeholder value. The company is striving to give shape to its aspirations and fulfill the expectations of the country to become a global player. The greatest strength of Kirloskar Electric Company is its highly skilled and committed 3,000 employees. Every employee is given an equal opportunity to develop himself and grow in his career. Continuous training and retraining, career planning, a positive work culture and participative style of management have engendered development of a committed and motivated workforce setting new benchmarks in terms of productivity, quality and responsiveness

VISION AND MISSION The Power of Now is the energy of opportunities that come to us disguised as challenges. The Power of Now at Kirloskar Electric is the dynamics of making opportunities work as by meeting client's tough specifications of cost competitiveness, quality and reliability.

At Kirloskar Electric, we bank on The Power of Now.

HISTORY
FOUNDERS

Late Shri Laxmanrao K. Kirloskar Founder, Kirloskar Brothers LTD. & the Kirloskar Group of Companies Late Shri Laxmanrao Kashinath Kirloskar created the Kirloskar legacy. He pioneered the engineering equipment industry in India, through timeless principles of hard work, determination, and family values. His youngest son, Late Shri Ravi .L. Kirloskar followed in his footsteps when leading Kirloskar Electric Company LTD.

Late Shri Ravi L. Kirloskar Founder, Kirloskar Electric Company Limited Late Shri Ravi .L. Kirloskar was the youngest son of Late Shri Laxmanrao and Late Smt Radhabhai Kirloskar. He began his professional career at Kirloskar Brothers; designing and building India's first electric motor. His knowledge, forward thinking, support, and guidance transformed Kirloskar Electric Company into the world renowned company it is today. Late Shri Ravi .L. Kirloskar was a man who was the epitome of his name. Throughout his time at Kirloskar Electric, he illuminated the company, his colleagues, and employees with his knowledge, intelligence, foresight, and calm demeanour. He was a symbol of immense strength and character to his employees. All who worked at Kirloskar Electric Company looked up to him as a father, friend, and guide. Quality was always on his mind; and his keen knowledge, foresight, and quality excellence made Kirloskar Electric Company the successful conglomerate it is today. Late Shri Ravi .L. Kirloskar's vision was simple. He wanted Kirloskar Electric Company to be recognized as a symbol of quality, not only in India, but the entire world.

Late Shri Ravi .L. Kirloskar had the unique ability to use the past to analyse and interpret the future. He always thought decades ahead in terms of his work and their results. He was the inspiration behind Kirloskar Electric Company introducing the Pielstick Engine and the Thyristor Converter in India. When the invention of the thyristor drive gave new life to DC motors in 1964, Late Shri Ravi .L. Kirloskar was quick to grasp the opportunity. He began a collaboration with Thorn EMI Automation LTD. to give Kirloskar Electric Company a head start in the market. Today, Kirloskar Electric Company controls a large share of the DC motor market. Late Shri Ravi .L. Kirloskar visualised the future of the electrical industry. He regarded quality excellence as one with self respect and pride. He introduced new product lines and set up new manufacturing plants around the country. His efforts helped Kirloskar Electric Company to become the first Indian electrical company to export electrical equipment, and set up the Indo Malaysia Joint Venture Company in Malaysia in 1971. Late Shri Ravi .L. Kirloskar also realized that electronics would play a major role in India's future. He finalized agreements with Electroheating LTD., London, and Thorn Automation LTD. to manufacture drives. His foresight and advice for any situation would always be absolutely right. Kirloskar Electric Company equipment was exported to over 20 countries including U.S.A., U.K., Canada and Australia. Late Shri Ravi .L. Kirloskar wanted the quality of all Indian products to be on par with international standards. His mind was constantly thinking of new and better ideas. He visualized the future of the electrical industry and made his plans accordingly. In 1948, Late Shri Ravi .L. Kirloskar and Late Mr. N.W. Gurjar started the Indian

Electrical Association to promote the growth of the industry and to represent it's interests. Late Shri Ravi .L. Kirloskar was closely associated with the Indian Standards Association. He framed the first draft for the ISI Standard 325 for electric motors. His policy was closely associated with the Indian Government's Five Year Plans, especially in the context of electrical industry. It was Late Shri Ravi Kirloskar's efforts that led to the Karnataka Electricity Board setting up three mini-hydro power plants in the state. Late Shri Ravi .L. Kirloskar also founded the Indian Association for Quality and Reliability in 1972. Today, Kirloskar Electric Company is one of the largest and respected engineering and manufacturing companies in India, with a turnover of Rs. 8.41 billion. The company is known for its quality and reliable products in India and around the world. The Kirloskar Electric Company Network is spread over 10 manufacturing locations, 35 Indian sales offices, and 4 overseas sales offices in Michigan, USA; Sharjah, UAE; Singapore, and Malaysia. MILESTONES 1 Consigning India's Contribution to the God Particle Superconducting magnets manufactured by Kirloskar Electric Company in collaboration with ANTEC, Spain, have been used in the Large Hadron Collider, which discovered the God Particle. 2

India's first satellite tracked AC Generators designed by Kirloskar Electric were used for the tracking system used on India's first satellite. Kirloskar Electric Company also took care of intricate details including transient loading and transient voltage regulation performance. 3 Missile test fired Kirloskar Electric Company played a key role in building the entire power supply unit for perfecting the performance requirement of India's first indigenous built missile. Kirloskar Electric Company's AC Generators were customized for arduous duty. 4 India explores Antarctica India was the first developing country to join the Antarctica explorations. The Antarctic task team carried custom designed AC Generators, developed by Kirloskar Electric Company that worked perfectly in sub zero temperatures. 5 Rajdhani flagged off Indian Railways worked with Kirloskar Electric Company specialists to design reliable AC Generators that would release the heat, dust, smoke and the acceleration of the bogies for proper function, greater speed, comfort, and increased safety. 6

Stealth ship launched On April 18, 2003, India launched its first indigenously designed stealth ship. The ship had four Kirloskar Electric Company 1000kW AC Generators, which were supplied by Kirloskar Electric Company. The generators were a result of Kirloskar Electric Company's close association with the Indian Navy. 7 Survival in Leh Kirloskar Electric Company AC Generators passed rigorous tests conducted by Defence experts. The tests proved that Kirloskar Electric Company AC Generators could function without problems at Leh, the highest inhabited town in India. For this reason, Kirloskar Electric Company remains the most preferred supplier for Defence establishments.

AWARDS

Best Innovative product for Digital drive by IEEMA at the Elecrama exhibition

National award for R&D from the Department of Scientific & Industrial Research, Ministry of Science & Technology, India

Quality must go beyond standard tests and procedures. It must be equated with self respect and personal pride. - Late Shri Ravi L. Kirloskar

Quality Policy The quality policy of Kirloskar Electric Company shall be to design, manufacture and market, at competitive prices, products of such quality which results in customer satisfaction, quality reputation and market leadership.

Market products and services that exceed the customer needs and expectations.

Operate reliable processes and manage them through trained personnel and effective Quality Management Systems.

Drive continuous improvement of all business processes towards and intended goal.

CERTIFICATIONS We are proud to be the first electrical engineering company to get ISO 9001 certification in India. Kirloskar Electric Company is also the first electrical equipment manufacturing company in India to be awarded certification for providing the 'CE' Mark for our products.

ISO 9001 - 2008 QMS Certification

Bureau Veritas Quality International (BVQI) Bureau Veritas Quality International (BVQI) has certified the Quality Management System of Kirloskar Electric Company. We are also first in electrical industry to obtain ISO 9001-2008 certification by BVQI.

The ISO 9001-2008 certificates awarded to : Kirloskar Electric Company Bangalore, Hubli, Mysore, Tumkur

KEMA Certification 'KEMA' registered quality B.V. Netherlands, notified authority have tested our products with respect to low voltage directive, EMC (Electromagnetic) directive and MD (Machinery) directive. Confirmative Europeenne (CE) 'CE' stands for 'CONFIRMATIVE EUROPEENNE' and conformity to European standards meeting basic requirements of Safety, Health, Environment & Protection (SHEC). Kirloskar Electric Company is entitled to provide 'CE Marking' for AC motors, AC generators, and DC machines. 'CE' marking allows the product un-registered legal access to the European market. Certification for AC Motors Safety Manual We design and manufacture our products according to the standards of

ISO (International Organizational for Standardization) IEC (International Electro technical Commission) BIS (Bureau of Indian Standards) BSI (British Standards Institution) JEMA (Japan Electrical Manufacturers Association)

PRODUCTS Kirloskar Electric Designs, Manufactures, Markets and Services Rotating machines, dedicated to control of the Motive force for operation of Industrial machinery, Power Generation and control equipment for T & D Industry. Kirloskar has always been known for creating unique solutions for any kind of customized applications relating to Industrial Power and Electrical Control Equipment. Kirloskar motors have been used by millions of Users from the past 62 years for all kinds of motive applications.The Generators have been used for production of Electricity in areas away from the transmission system and supplement in times of power cuts and outages when coupled with Engines either Diesel or other fuels. Its full range of High and Medium voltage Transformers are designed to transport and distribute electricity from the power plant to the end user. The switchgear range is designed for control and protection from hazards of unintentional contact with Electricity. The Drives are designed to control the power of prime movers (Motors) for any process for efficiency.

Management Name A S Lakshmanan Anil Kumar Bhandari Anuj Pattanaik Berthold Groeneveld D Devender Singh Kamlesh Gandhi Meena Kirloskar P Y Mahajan P Y Mahajan Ram J Shahaney S N Agarwal Sarosh J Ghandy V P Mahendra Vijay R Kirloskar Vijay R Kirloskar Vinayak N Bapat

Designation Director Director Deputy Managing Director Director Nominee Chairman Director Director Vice President (Legal) & Co. Secretary Secretary Additional Director Director Director Director CEO Chairman & Managing Director CFO & Vice President

BANKERS
IDBI BANK. ABN AMRO BANK N.V. BANK OF BARODA. CITIBANK, N.A. DEUTSCHE BANK AG. HONGKONG & SHANGHAI BANKING CORPORATION LIMITED. HDFC BANK LIMITED. PUNJAB NATIONAL BANK.

STATE BANK OF INDIA. STATE BANK OF TRAVANCORE.

CASH MANAGEMENT

INTRODUCTION
Cash is the important current asset for the operation of the business. Cash is a medium of exchange to purchase the goods and services and to discharge the liabilities. Cash is the basic input needed to keep the business running on a continuous basis; it is also the ultimate output expected to be realized by selling the service or product manufactured by the firm. The firm should keep sufficient cash, neither more nor less. Cash shortage will disrupt the firms manufacturing operations while excessive cash will simply remain idle, without contributing anything towards the firms profitability. Thus a major function of the financial manager is to maintain a sound cash position. Cash is the money which a firm can disburse immediately without any restriction. The term cash includes coins, currency and cheques held by the firm, and balances in its bank accounts. Sometimes near cash terms, such as marketable securities or bank time deposits, are also included in cash. The basic characteristic of near cash asset is that they can readily be converted into cash. Generally, when a firm has excess cash, it invests it in marketable securities. This kind of investment contributes some profit to the firm.

"Cash Management" =) Cash management is a broad term that refers to the collection, concentration, and disbursement of cash. It encompasses a company's level of liquidity, its management of cash balance, and its short-term investment strategies. In some ways, managing cash flow is the most important job of business managers. If at any time a company fails to pay an obligation when it is due because of the lack of cash, the company is insolvent. Insolvency is the primary reason firms go bankrupt. Obviously, the prospect of such a dire consequence should compel companies to manage their cash with care. Moreover, efficient cash management means more than just preventing bankruptcy. It improves the profitability and reduces the risk to which the firm is exposed. Objective of cash management 1) To make Payment According to Payment Schedule:Firm needs cash to meet its routine expenses including wages, salary, taxes etc. Following are main advantages of adequate casha)To prevent firm from being insolvent. b)The relation of firm with bank does not deteriorate. c)Contingencies can be met easily. d)It helps firm to maintain good relations with suppliers. (2) To minimise Cash Balance:The second objective of cash management is to minimise cash balance. Excessive amount of cash balance helps in quicker payments, but excessive cash may remain unused & reduces profitability of business. Contrarily, when cash available with firm is less, firm is unable to pay its liabilities in time. Therefore optimum level of cash should be maintain.

CASH FLOW MANAGEMENT


Cash flow management is a process of monitoring, analyzing, and adjusting ones business cash flows. The most important aspect of cash flow management is avoiding extended cash shortages, caused by having too great a gap between cash inflows and outflows. Therefore, one needs to perform a cash flow analysis on a regular basis, and use cash flow forecasting so that one can take the steps necessary to head off cash flow problems. Cash management involves the efficient collection, disbursement and temporary investment of cash. The treasurer department of a company is usually responsible for the firms cash management system. A cash budget, instrumental in the process, tell us how much cash we likely to have it, and for how long.

CASH MANAGEMENT SYSTEM

With timely information reporting a firm can generate significant income by properly managing collections, disbursement cash balance and cash equivalents investment, Collection Disbursement

cash

Cash Equivalents

Control Through Information Report

IMPORTANCE OF CASH MANAGEMENT


Cash management assumes more important than other current assets because cash is the most significant and the least productive asset that a firm holds. It is significant because it is used to pay the firms obligations. However cash is unproductive. Unlike fixed assets or inventories, it does not produce goods for sale. Therefore, the aim of cash management is to maintain adequate control over cash position to keep the firm sufficiently liquid and to excess cash in some profitable way. Cash management is also important because it is difficult to predict cash flow accurately, particularly the inflows and there is no perfect coincidence between the inflows or outflows of cash. During some periods, cash outflows will exceed cash inflows, because payments for taxes, dividends, or seasonal inventory build up. At other times, cash inflows will be more than cash payments because there will be large cash sales and debtors may be realized in large sums promptly. Cash management is significant because cash constitutes the smallest portion of the total current assets, yet managements

considerable time is devoted in managing it.

CASH MANAGEMENT STRATEGIES

The firm should develop appropriate strategies for cash management. The firm should evolve strategies regarding the following four facets of cash management:

Cashplanning cash inflow and outflow should be planned to project cash surplus or deficit for each period for each period of the planning period. Cash budget should be prepared for this purpose.

Managingthecashflows

the flow of cash should be properly managed. The

cash inflows should be accelerated while, as far as possible, the cash outflows should be decelerated.

Optimumcashlevel

the firms should decide about the appropriate

level of cash balances. The cost of excess cash and danger of cash deficiency should be matched to determine the optimum level of cash balances.

Investingsurpluscash

the surplus cash balances should be properly

invested to earn profits. The firm should decide about the division of such cash balance between short-term investment opportunities such as bank deposits, marketable securities, or inter- corporate lending.

CASH OUTFLOW
For cash management, the control of cash outflows, which is directly related to organizational arrangements for budget execution, can pose more difficulties than the control of cash inflows. However, issues related to cash management should not be confused with issues related to the distribution of responsibilities for accounting control and administration of the payment system. The major purpose of controlling cash outflows is to ensure that there will be enough cash until the date payments are due and to minimize the costs of transactions, while keeping cash outflows compatible with cash inflows and fiscal constraints. The first condition for ensuring that cash outflows fit fiscal constraints is good budget preparation and budget implementation covering both cash and obligations. However, during budget implementation, cash outflows must also be regulated through cash plans to smooth cash outflows.

CASH INFLOW

It is necessary to minimize the interval between the time when cash is received and the time it is available for carrying out expenditure programs. Collected revenues need to be processed promptly and made available for use. When tax collection is done by the tax administration offices (or by Treasury offices) the administrative organization of these offices may have to be reviewed and their equipment modernized. Commercial banks by virtue of the banking sector infrastructure are often able to collect revenues more efficiently than tax offices, which should therefore focus instead on tracking taxpayers. When revenues are collected by commercial banks, arrangements must be defined to foster competition and ensure prompt transfer of collected revenues to government accounts. Systems of bank remuneration through float, which consists of authorizing the banks to keep the revenues collected for a few days, present inconveniences. Stringent rules to ensure prompt transfers must be established. Moreover, bank remuneration through fees is more transparent and promotes competitive bidding. An appropriate system of penalties for taxpayers is also an important element in avoiding delays in revenue collection.

CASH FLOW STATEMENT

Meaning: IT IS a summary of firms cash receipts and cash payments during period of time. The purpose of cash flow statement is to report a firms cash inflow and outflows, during a period of time, segregated in to three categories: operating, investing and financing activities. The statement of cash flow explains changes in cash and cash equivalent such as treasure bill and the activities that increase and decrease cash. The cash flow statement may be presented using either a direct method (Which is encouraged by financial accounting standards board) or an Indirect Method (which is likely to be the method followed by good majority of firms). The only difference between the direct and indirect method of presentation concern the reporting of operating activities; the investing and financing activities section would be identical under either method. Under the direct method, operating cash flow reported directly by major classes of operating cash receipts (from customers) and payment (to suppliers and employees). A separate indirect reconciliation of Net income to net cash flow from operating activities must be provided. The reconciliation starts with reported net income and adjusts this figure for non-cash income statement items and related changes in balance sheet items to determine cash provides by operating activities.

Cash flow statement has three activities like as follow:

Operating Activities:- Shows impact of transactions not defined as investigation or financing activities. These cash flows are generally the cash effects or transaction that enter into the determination of net income. Thus, we see items that not all statement users might think of as operating flows-items such as dividends and interest received, as well as interest paid.

Investing Activities:- Shows impact of buying and selling fixed assets or equity securities of other entities.

Financing Activities:- Shows impact of all cash transactions with shareholders and the borrowing and repaying transactions with lenders.

IMPORTANCE
The effects of cash and non-cash investing and financing transaction. A manager can assess the reason for differences between net income and net cash flow from operating activities. It is also helpful for a company to generate future net cash inflows from operations to pay debts, interest and dividends. It gives indication to a companys need for external financing. A cash flow statement is straightforward and easy to Understand. It gives a strong indication of how viable the company will be over time. The extent of success or failure of cash planning can be known by comparing the actual cash statement with the budgeted cash flow statement and remedial measures can be taken. It discloses the volume and the speed at which cash flows in different segments of the business

DAILY CASH FLOW REPORT


The Daily Cash Flow report is prepared with an objective to keep incessant check on the cash flows of the firm, which includes both inflow and outflow cash. The cash flows are planned to project cash surplus or deficit for each period i.e daily, monthly, quarterly, semi-annual & annual basis. The framework of report highlights all the effects, which lead to cash surplus or deficit. It is a measure, which calculates the details of daily transaction in terms of sale and purchase, which further includes the means through which they take place. At kirloskar, the daily cash flow report is designed in a format suiting their requirements .The sales of tractors is their primary goal which includes exports as well. The bills are presented for desired collection from various channels i.e dealers, stockiest, distributors through which the tractors are supplied in the market. Besides tractors they also deal in engines, backend, implements which are included in the category of other receipts. The receipts are other than collections as they arent generated through sales. Next come the payments, which are made in discharge of financial obligation towards various suppliers, bank payments, excise duty, salary & wages etc. Through the various collections, receipts and payment, we are now in a position to derive the surplus or deficit which is the result of above transactions. The surplus balance shows that the collections & receipts are more than payments and vice-a-versa in case of deficit. Though surplus is an indicator of sound financial position and deficits the other way round, but excess surplus is also not considered healthy which has reasons to it like

inventory pile up and so on. The last component of the cash flow report is the outstanding debtors, which is calculated by subtracting billing & collection from opening o/s of debtors in domestic, export and other categories. This way the day to day cash transactions are maintained through the cash flow report which leads to proper functioning of an organizations resources both men & material.

Channel Financing could cover : Discounting of trade bills drawn by a company & accepted by its dealers/ distributors/ channel partners.

Providing overdraft facility to the dealers/ distributors who have business dealings with large corporate.

OTHER RECEIPTS : An acknowledgment (usually tangible) that payment has been made. The below mentioned are the transactions included in it :

Billdiscounting : it is a major activity with some of the smaller banks. Under this type of lending, bank takes the bill drawn by borrower or his (borrowers) customer and pay him immediately deducting some amount as discount / commission. The bank then present the bill to the

borrowers customer on the due date of the bill and collect the total amount. If the bill is delayed, the borrower or his customer pays the bank a predetermined interest depending upon the terms of the transaction.

The following entries could be passed in the co.s books:

Salesbilldiscounting : Following entries are passed during the sales

Made by the company: Party a/c sales a/c dr. .......... ........... To

(Being sale made on credit)

Bank a/c Bank charges a/c To party a/c

dr. .......... dr. . ..

( being payment recived)

Purchase bill discounting : Following entries are passed in the books purchases made by the company :Purchase a/c To party a/c dr.

( being purchases made)

Party a/c

dr.

To bill discounting supplier a/c

( being paid to party through bank )

Bill discounting supplier a/c To bank a/c

dr. . (

being payment made to bank)

Letter of credit : The LC can also be the source of payment for a transaction, meaning that redeeming the letter of credit will pay an exporter. Letters of credit are used primarily in international trade transactions of significant value, for deals between a supplier in one country and a customer in another. The parties to a letter of credit are usually a beneficiary who is to receive the money, the issuing bank of whom the applicant is a client, and the advising bank of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e.,cannot be amended or canceled without prior agreement of the beneficiary, the issuing bank and the confirming bank. In this 100 % payment is not given to the supplier by the bank due to loss in transition , rejection & shortage . in if loss doesnt occur than 100 % is given to the supplier on the due date.

Packingcredit : when we receive an export order from countries , than we can avail loan from bank at nominal interest as packing credit loan. It provides the exporters with working capital between the time of the receipt of order and the time of shipment to arrange for production or procurement of goods. Pre-shipment finance is of particular importance to small scale manufacturers and exporters who do not possess sufficient financial resources to meet the expenditure involved in the production of goods for export. Pre shipment finance is normally provided by the commercial banks. As in the case of many other advances the bank takes into consideration a number of factors before making the necessary other advances to exporters viz., (1) honesty, integrity and capital of the borrower, (2) exporters experience in the line, (3) security offered, (4) the margin of interest (5) the banks experience about the exporter to ensure that his name does not appear on the caution list of the Reserve Bank. Pre- shipment : when the company receives order Post shipment : when assignment is dispatched from the company. The following entries to be passed in the books for packing credit loan : Party a/c dr.

To export a/c

( being export order received) Bank a/c dr. .

Bank charges a/c dr.

To packing credit loan

( being loan granted by bank )

Bank a/c To party a/c

dr. .

( being payment made to bank)

Pcl a/c To bank a/c

dr.

( being payment of loan made to bank)

Credit note : This note is presented to the other party for the payment to be made by the opposite party. Whereas debit note is given to the company by the other party in case of payment is to be made by the company.

PAYMENTS : It is the transfer of wealth from one party (such as a person or company) to another. A payment is usually made in exchange for the provision of goods, services or both, or to fulfill a legal obligation. The payments at KIRLOSKAR Direct (hundis, LC ), bank payment , excise duty which is lieved on the parts of the tractors, ladt ( local area development tax), sales tax , salary and wages, vrs, spare parts, implements, electricity, overhead, finance charges, capex is the capital expenditure made to purchase the fixed assets or adding value to the existing fixed asset, credit note, corporate loan, loan repayments, interest, wcdl payment, packing credit & bill discounting.

OUTSTANDING : Outstanding debtors are calculated by the following formula

Closing O/S = Opening O/S + Billing - Collection In this, values are calculated for debtors outstanding in different point of time in domestic and overseas sales of tractors & its part.

CASH BUDGET
MEANING A forecast of estimated cash receipts and disbursements for a specified period of time. A cash budget is arrived at through a projection of future cash receipts and cash disbursements of the firm over interval of time, it reveals the timing and amount of expected cash inflows and outflows over the period. With this, the firm will be able to determine its future cash needs, and exercise control over the cash and liquidity of the firm. Though the cash budget may be prepared almost any interval of time, its monthly projection are most common. In short, we can say that cash budget is a forecast of a firms future cash flows arising from collection and disbursement, usually on a monthly basis.. The key to the accuracy of most cash budgets is the sales forecast. This forecast can be either internal or external analysis, in internal approach, sales representatives are asked to project sales for the forthcoming period, We can then consolidate these sales estimates for the product line. The estimates for the various product lines are then combined in to an overall sales estimate for the firm. The basic problem with an internal approach is that it can be too myopic, often significant trends in the economy and in the industry are overlooked. Many companies use an external analysis as well, in external approach economic analysts make forecast of the economy and of industry sales for

several years to come. They may use regression analysis to estimate the association between industry sales and the economy in general. After these basic predictions of business conditions and the industry are made. The next step is to estimate the market share by individual products, price that are likely to prevail and the expected reception of new product. By this way we can prepare an external forecast. For Effective Cash Budget

A firm may be able to delay its capital expenditure or its payment for purchase, Purpose of cash budget should be to determine the timing and magnitude of prospecting financing needs so that the most appropriate method of financing can be arranged, A decision to obtain long term financing should be based on longrange funds requirement. On the basis of cash budget the manager should be able to plan to invest excess funds in cash equivalents.

BANK RECONCILIATION

Bank reconciliation involves comparing the companys record of transactions and balances to the banks record of transactions and balances. The company should go through every transaction in their account and make sure the company and the bank agree on the transaction. Its important to go through the process of bank reconciliation. If the company doesnt, than it is taking few risks. Without bank reconciliation, the company may not have a clear idea of how much cash is available in their accounts. They might bounce Cheques and incur overdraft charges. Without bank reconciliation, the company also expose yourself to risk. People may be stealing from the companys account. If they never look through each transaction, theyll never know about it. If they dont notify the bank quickly enough, they may be out of luck. The same goes for bank mistakes. With regular bank reconciliation the company can find problems quickly and make them go away. Bank reconciliation can be done manually, in excel & theres electronic bank reconciliation as well. Though the manual way for handling companys large bank accounts is not appropiate, it is helpful when there are less transactions. But still it important for any manager to learn it as it is the basic form of doing it. For reconciling the companys record of transaction with the bank

balances , there are three essential requirements : Bank book Bank statement Bank reconciliation statement of preceding month Than the above transactions needs to be tally & unmatched have to be reconciled accordingly. Below is an example of how is it done manually:-

BANK RECOCILIATION STATEMENT AS ON 31.05.12 A/C NO 000381400000156 GL CODE DESCRIPTION


Bal as per bank book AS ON 31.05.12 Opening bal LESS: MAY2012 BALANCE ADD : Amount cr. By us but not dr. by bank LESS : Amount dr. by us but not cr. by bank ADD : Amount cr. By bank but not dr. by us 83382.91 DR. 2726955 CR. 3634103 DR. 3722549 CR. 2832114 DR. -2643572 CR. 3634103 3722549 2832114 41989.68 58106.87

LESS : Amount dr. by bank but not cr. By us 41989.68 Balance as per bank statement

DETAILS OF CHEQUE ISSUED BUT NOT PRESENTED FOR PAYMENT


S.NO 7770 7771 7774 7766 VCH. DT. 22/5/2012 22/5/2012 31/5/2012 12/5/2012 2/4/2012 VCH. NO. 86410 86400 86301 85683 CHQ.NO. pcl loan LIQ. SA/SP/34 B/C&INTT ON BANK CHARGE BANK CHARGE CHQ.AMT. 3565791.98 941 59369.98 4000 4000 3634102.96

DETAILS OF AMOUNT DEPOSITED BUT NOT CREDITED BY BANK


S.NO 7754 7749 7752 7755 7757 VCH. DT. 22/5/2012 1/5/2012 11/5/2012 22/5/2012 26/5/2012 VCH. NO. 155 371 372 156 157 CHQ.NO. Sa/35 33796(bank ch.) 33913(bank ch.) sa/sp/34 tanj/37 CHQ.AMT. 3704227.2 7667 5466 2927.15 2261.15 3722548.5

DETAILS OF AMT. CREDITED BY BANK


S.NO VCH. DT. 19/5/2012 VCH. NO. CHQ.NO. 1390022 CHQ.AMT. 2832113.94 2832113.94

DETAILS OF AMOUNT DEBITED BY BANK


S.NO VCH. DT. 1/5/2012 4/5/2012 4/5/2012 5/5/2012 5/5/2012 8/5/2012 9/5/2012 11/5/2012 12/5/2012 14/5/2012 19/5/2012 19/5/2012 22/5/2012 26/5/2012 VCH. NO. DESCRIPTION 1210003 1240001 1240011 1250005 1250001 1280029 1290007 1180001 132000 1340024 1320001 1390022 560001 1460014 CHQ.AMT. 2206 5515 607.15 2206 2758 607.15 2206 1103 1103 607.15 1103 607.15 20753.93 607.15 41989.68

ANALYSIS ,INTERPRETATION & FINDINGS

CASH RATIOS
MEANING Cash ratios are also important tool of cash control. There are various ratios which explain the efficiency of cash management or vice- versa. They are the acids test ratio, cash ratio, receivables turnover ratio, inventory turnover ratio, cash turnover ratio etc. These are calculated as

LIQUIDITY RATIOS Liquidity ratio measures the ability of the firm to meet its current obligations. It is necessary to strike a proper balance between high liquidity and lack of liquidity. A high degree of liquidity means that a firms fund will be unnecessarily tied up in current assets. Whereas lack of liquidity, implies failure of a company to meet its obligations due to lack of sufficient liquidity. The ratios, which are used for the analysis of Escorts liquidity position in this report, are: Current Ratio Quick Ratio

CURRENTRATIO

Current ratio is calculated by dividing current assets by current liabilities:

Current ratio = CurrentAssets Current Liabilities

2010-11 Current Ratio 1.12

2011-12 1.16

From the above table it can be interpreted that KIRLOSKAR liquidity position is not constant. As a conventional rule a current ratio of 2:1 or more is considered satisfactory because in a worse situation, even if the value of current assets become half, the firm will be able to meet its obligations. Current ratio refers to a margin of safety for creditors therefore higher the current ratio, the greater the margin of safety. QUICKRATIO Quick ratio establishes a relationship between quick or liquid assets and current liabilities. An asset is liquid if it can be converted into cash immediately or reasonably soon without a loss of value. Inventories are considered to be less liquid therefore calculating quick ratio they are deducted from current assets. Quick Ratio = CurrentAssetsinventory Current liabilities

2010-11 Quick Ratio 0.90

2011-12 0.99

KIRLOSKAR quick ratio in the current year has decreased in comparison to previous year, yet it can be considered to be satisfactory, as it is 1:1 times of current liabilities. Although quick ratio is more penetrating test of liquidity than current ratio. Yet it should be used cautiously, as all debtors may not be liquid and cash may be immediately needed to pay operating expenses.

The value of quick ratio is decreasing every year. The satisfactory level of the quick ratio is 1:1. This shows the worse situation of the company. The current liabilities are more than the quick assets.

ACTIVITY RATIOS Activity Ratios are used to evaluate the efficiency with which the firm manages and utilizes its assets. The ratios are called Turnover Ratios as they indicate the speed with which the firm manages and utilizes its assets.Activity ratios, which are used to analyze KIRLOSKAR effectiveness in Asset utilization, are Inventory Turnover Ratio Fixed Assets Turnover Ratio Working Capital Turnover Ratio

Debtors Turnover Ratio Creditors Turnover Ratio

INVENTORY TURNOVER RATIO

It indicates the efficiency of the firm in producing and selling its product. It is calculated by dividing sales by avg. inventory. In a manufacturing company inventory of finished goods is used to calculate inventory turnover.

Inventory Turnover =

Costofgoodssold Avg. Inventory

2010-11 Inventory turnover 14.42

2011-12 15.10

If the company is comfortably meeting the customer needs with 9.73 days inventory of finished goods, all India basis. It is a good achievement for the KIRLOSKAR Limited.

FIXED ASSETS TURNOVER RATIO

A firms ability to produce a large volume of sales for a given amount of net assets is the most important aspect of its operating performance. Unutilized or underutilized assets increase the firms need for costly financing as well as expenses for maintenance and upkeep. Fixed assets turnover is calculated by dividing net sale by net fixed assets.

Fixed Assets Turnover = Sales Fixed Assets

2010-11 F.A.T 2.29

2011-12 2.35

KIRLOSKAR fixed asset turnover have increased in 2010-11. The fixed asset turnover of 2.78 implies that it is producing Rs.2.78 of sales for one rupee of capital employed. The higher the ratio, more it is satisfactory It should be interpreted very cautiously because the denominator of the ratio includes fixed asset net of depreciation. Thus old assets with lower book value may create a misleading impression of high turnover without any improvement in sales

DEBTORS TURNOVER RATIO

Debtors turnover indicates the number of times debtors turnover each year. Higher the value of Debtors turnover, the more efficient is the management of credit. The liquidity position of the firm depends on the quality of the debtors to a great extent.

Debtors Turnover = CreditSales Avg. Debtors

2010-11 Debtors Turnover 4.44

2011-12 4.29

KIRLOSKAR debtors turnover is quite lower. The debtors turnover ratio is high at 2010-11 . The ratio is decreasing. Also the debt collection period has its own importance. The debt collection period of KIRLOSKAR was 76 days in 2010-11 but it has increased to 95 days. This does not show the satisfactory level. The shorter the collection period, the better the quality of debtors, since a short collection period implies prompt payment by debtors. A too low collection period is also not necessarily favorable as it may indicate a very restrictive collection and credit policy. Because of the fear of bad debt loses the firm may be selling to those only whose financial conditions are sound and who are very prompt in making the payments.

CREDITOR TURNOVER RATIO

Creditors Turnover = TotalPurchases Creditors

2010-11 Creditors Turnover 3.55

2011-12 3.45

Though the days are very high and apparently appears to substitute right collection, this extended credit has its own drawback like:

High interest inbuilt in cost system. Sub-quality creditors may be accepted. Quality of material may be accepted.

The payment period of KIRLOSKAR Limited is 90 days in 2010-11, which is more reasonable than previous years. This helps to make good quality product and also better relationship with suppliers.

WORKING CAPITAL TURNOVER RATIO

Working capital turnover ratio has its own significance in the business organizations. It shows the efficiency of the firm. How much sale that the company get with the utilization of the limited working capital.

Working Capital Turnover = NetSales Net Working Capital

2010-11 Working.Cap.Turn. 113.45

2011-12 28.30

In the case of working capital turnover ratio KIRLOSKAR is significantly going very downward. This is a very dangerous point of the firm. The company should try to improve it earlier. It shows that the company requires more money to generate sales.

RECEIVABLE MANAGEMENT
The term receivable is defined as debt owed to the firm by customers arising from sales of goods in the ordinary course of business. The sale of goods on credit is an essential part of modern day business. The credit sales are generally made on open account in the sense that there are no formal obligations through a financial instrument. However extension of credit involves risks and cost. Management should weigh the benefits as well as the cost to determine the goal of receivable management. The benefits from receivables are the increased sales and profits anticipated because of more liberal policy. When firm extend trade credit, i.e. invest in receivables, they intend on increase the sales level. The motive of liberal credit policy can be either growth oriented or sales retention. The extension of credit has a major impact on sales, costs and profitability. Other things being equal, a relatively liberal policy and therefore higher investments in receivables will produce larger sales. However the cost will be higher with liberal policies then with more stringent measures. Therefore account receivable management should aim at a trade- of between profit and risk. The costs associated with the extension of credit and account receivables are collection cost capital cost delinquency cost default cost

DECISION AREAS
CREDIT POLICIES The credit policy of a firm provides the framework to determine whether or not to extend credit to a customer and also how much credit to extend. It has two broad dimensions, the first is credit standard and second is the credit analysis. Credit standards represent the basic criteria for the extension of credit to customers. The trade- off with reference to credit standards covers collection costs, average collection period, level of bad debts losses and level of sales. With a relaxed credit standard the collection costs, bad debts expenses and sales goes up and in reverse case vice-versa happens. The second aspect of credit policy is credit analysis. It begins with obtaining credit information of the customers and ends up with the analysis of the obtained credit information. Information can be collected either internally or externally. Internal source of credit information is derived from the records of the firm. The analysis of credit information should cover both qualitative as well as quantitative aspects. The quantitative aspect is based on the available financial statements whereas qualitative aspects cover the quality of management.

CREDIT TERMS The second decision area in accounts receivable management is the credit terms. After the credit standard have been establish and the credit worthiness of the customers is assessed, the management of a firm must determine the terms and conditions on which trade credit will be made

available. Credit terms have three components : credit period, cash discount and cash discount period. Credit period is the duration of time for which trade credit is extended whereas cash discount is the amount by which the over the due amount will be reduced thus benefiting the customer. The credit terms like the credit standard affect the profitability as well as the cost of the firm therefore a firm should determine the credit terms on the basis of cost-benefit trade-off.

COLLECTION POLICIES The collection policies refer to the procedures followed to collect account receivable when after expiry of the credit period they become due. This policy covers two aspects : first is the degree of effort to collect the over due and second is the type of collection efforts.

KIRLOSKAR Limited has a zero debt credit policy. However it is giving the following facilities to its dealers to promote the sales, as liberal credit policy has a direct impact on sales. CHANNEL FINANCE FACILITIES The company arranges these facilities with various bankers for the company dealers to support their cash needs. The goods are sold on credit against hundis. Hundis can be drawn for 50 or 75 or 90 days subject to qualifying criteria of bank.

CREDIT FACILITIES KIRLOSKAR provides thirty days interest free credit to the dealers. For this in respect of all hundis the company bears 30 days interest and the remaining cost of interest, delayed payment charges are borne by the dealers.

PENALTY ON BOUNCING OF HUNDIES / CHEQUES Bouncing of hundis/ cheques drawn in favor of the company is viewed very strongly and usually following actions are taken. Tractor supplies are suspended and restored only after all dues are cleared. All charges debited by the bank such as collection charges, penal interest are debited to the dealer. The bank extending channel financing policy have clearly stated that if a dealer has two or more bouncing he will be black listed and his limit will be withdrawn with immediate effect. Company also makes sales to such dealers only against letter of credit or demand draft.

CASH DISCOUNT ON EARLY PAYMENT Cash discount of 1% is payable on tractors dispatched against funds available in the form of letter of credit or demand draft. Interest is charged/ paid at 12% per annum on outstanding/ credit balance early payment incentive.

PAYABLE MANAGEMENT
Creditors are a vital part of effective cash management and should be managed carefully to enhance the cash position. Purchasing initiates cash outflows and an over-zealous purchasing function can create liquidity problems. A better strategy is to shrink the vendor base radically, then use ones clout to negotiable longer terms with the vendors. Vendor rationalization is a process that can pay off in a big way. Apart from the question that who should authorize purchasing in the company should it be tightly managed or spea among a number of (junior) people? The following comes under good payable management. Purchase quantities should be geared to demand forecasts. Order quantities should be used which takes account of stock holding and purchasing costs. The cost to the company of carrying stock should be clearly defined. A Company should have alternative sources of supply. It should get quotes from Major suppliers and shop around for the best discounts, credit terms and reduce dependence on a single supplier.

RECOMMENDATIONS

LOANS AND ADVANCES Special efforts should be made to analyze loans & advances, which are between 35% to 56% of current assets. This can be classified between production / operation relation related and non-production / operation related. No production related cases might be financed from other sources like debenture etc. and treated separately.

INVENTORY Inventory should be reviewed constantly to identify show / dead / obsolete item and then disposed . Optimum level should be revised periodically, keeping in view, distance of suppliers, production lead time of supplier, transport problem if any and reliability of suppliers. This will help to avoid obsolesce and dead inventory.

DEBTORS A study may be conducted if required by experts to pinpoint reason behind KIRLOSKAR high correction period of 95 days in 2010-11 against 50 days of Mahindra & Mahindra. It is due to quality of products, quality of customer, the segment of customers marketing effort,distribution pattern or other reasons.

CREDITORS Though high payout days may be appartenly beneficial for the company. It has it very heavy long term cost like high interest cost, bad credit ratings and shyness of good quality / standard suppliers.

RATIOS The company should try to improve its current situation. The ratios, which are taken in this research to evaluate the companys position, are Current ratio, Quick ratio and Activity ratio. These ratios show the actual position of the company. The Quick ratio is declining since 2001-02 till now. There is a drastic declining in the working capital turnover ratio. This ratio goes to ve position in current year compared to previous. The Debts collection period is 359 days for Exporters. This shows the poor collection policy. The current ratio is 1.12 in 2009-010, which is not upto the ideal ratio. This shows that the current assets are equal to the current liabilities. Not satisfactory. OTHERS More attention must be given to market forecasts can be made and the surplus of inventory is reduced to minimum Company should not follow the competitors only. New products should be produced for the farmers having low income and small holdings. Proper market survey should be carried out. The company should explore the export market to study the present and prospective

demand. Proper inventory plans should be made in order to reduce the carrying cost. New market strategies should be devised from time to time. This is because, even if the tractor is of good quality, the competitors may produce the same product with additional features and at lower prices. Marketing network should be enhanced. Company should also produce more TRANSFORMERS of higher PERFORMANCE. But new developments should be made continuously in order to survive in this competitive world.

LIMITATIONS

Although every effort has been in to collect the relevant information through the sources available, still some relevant information could not be gathered.

Busy Schedule of Concerned Executives: The concerned executives were having very busy schedule because of which they were reluctant to give appointment.

Time: The time duration could not provide ample opportunity to study every detail of working capital management of the company.

Unawareness: Executives were unaware of many terms related to working capital study while asking to them.

Confidential Information: As the company on account of confidential report has not disclosed some figures. Moreover, in some cases separate accounts of division are not separately maintained thereby, leading to restrictions in study.

BIBLIOGRAPHY

BIBLIOGRAPHY
BOOKS

Financial Management- S.K Gupta Management Accountancy-D k Gole Cost and Management Accountancy, S.N.Maheshwari Financial Management And Policy, James C.Van Horne

WORLD WIDE WEB www.economictimes.com www.planware.com www.icraindia.com

Other than Web

M.I.S of the company Annual Reports

ANNEXURES

PROFIT AND LOSS ACCOUNT


Operating income Material consumed Manufacturing expenses Personnel expenses Selling expenses Adminstrative expenses Expenses capitalised Operating profit Other recurring income Adjusted PBDIT Financial expenses Depreciation Other write offs Adjusted PBT Tax charges Adjusted PAT Non recurring items Other non cash adjustments Earnigs before appropriation Equity dividend - Preference dividend Dividend tax Retained earnings

1/10/2010-31/09/2011
2,012.00 1,470.66 47.68 202.63 114.57 69.12 107.34 0.04 107.38 55.93 42.87 8.58 47.13 -38.55 17.56 32.86 -133.59 -133.59 -

1/10/2011-31/09/2012
2,092.04 1,540.01 50.79 204.02 118.63 57.45 121.14 20.85 141.99 89.78 44.97 3.32 3.92 -10.89 14.81 -21.25 -145.46

-C

-R

-145.46

BALANCE SHEET AS ON..


1ST OCT 2010- 30th SEPT 2011 Equity share capital Share application money Preference share capital Reserves & surplus Secured loans Unsecured loans Total Gross block Less : revaluation reserve Less : accumulated depreciation Net block Capital work-in-progress Investments 90.71 645.49 422.63 14.44 1,173.27 1,415.93 466.46 593.41 356.06 14.43 425.79 1st OCT 2011 30TH SEPT 2012 83.69 563.38 414.04 31.10 1,092.21 1,436.96 471.90 583.24 381.82 13.40 425.13 1,325.61 1,069.68 255.93 15.93 1,092.21 493.87 3.31 318.74 907.09 836.94

Current assets, loans & advances 1,131.98 Less : current liabilities & provisions 776.14 Total net current assets 355.84

Miscellaneous expenses not written 11.00 Total 1,163.12

Book value of unquoted494.53 investments Market value of quoted investments 1.98 Contingent liabilities 168.40

Number of equity sharesoutstanding (Lacs)

CASH FLOW STATEMENT


PARTICULAR CASH FLOW FROM OPERATING ACTIVITIES N.P BEFORE TAX Adjustment for: provision for doubtful debts , obsolescence inventory & advances Gain on sale of long term investment Gain on sale of asset Depreciation Assets w/off Interest expense Dividend income Interest income Operating profit before change in w.capital Adjustment for: Trade & receivable Money in escrow account Inventory Trade payable Misc.expenditure Op.profit after change in w.capital Cash generated from operating activities Less-Direct taxes/refunds NET CASH FLOW FROM OPERATING ACTIVITIES CASH FLOW FROM INVESTING ACTIVITIES Purchase of fixed assets Proceeds from sale of fixed. Assets Loss on sale of investment Movement in loan & advances Sale of investment Short term deposits with schedule banks Interest received Dividend received NET CASH FLOW FROM INVESTING ACTIVITIES CASH FLOW FROM FINANCING ACTIVITIES Proceeds from share capital & securities premium Proceeds/repayment from long- term borrowings Less:repayment of long term borrowing Proceed/repayment from short-term borrowing Interest paid MARCH (2011) 26.14 16.36 MARCH (2012) -17.33 1.89 -1.22 -0.13 44..97 8.08 72.22 -0.02 -20.82 87.64 -168.61 13.79 67.05 -7.5 -95.27 -7.63 -17.85 -25.48 0.86 -30.95 -16.27 32.33 -2.31 20.7 0.02 4.38 114.44 80.6 -0.54 -146.82 -77.4

-4.8 42.87 11.64 62.2 0.04 12.93 141.52 -65.36 20.09 -43.68 58.02 -3.21 -34.14 107.38 -6.25 101.13 -7.5 14.26 -30.64 -3.9 -0.66 8.58 3.21 -0.04 16.69 40.32 234.09 -41.68 -46.83 -66.27

NET CASH USED IN FINANCING ACTIVITIES Net increase / decrease in cash & cash equivalents OPENING CASH BALANCE CLOSING CASH BALANCE

-114.46 (30.03 60.83 30.8

-23.72 -44.82 105.65 60.83