Chapter 1 Profile of the Company

Chapter-1: Profile of the Firm/Company

Mahindra & Mahindra Limited (BSE: 500520) is the flagship company of the Mahindra Group, a multinational conglomerate based in Mumbai, India. The company was set up in 1945 in Ludhiana as Mahindra & Mohammed by brothers K.C. Mahindra and J.C. Mahindra and Malik Ghulam Mohammed. After India gained independence and Pakistan was formed, Mohammed immigrated to Pakistan where he became the nation's first finance minister. The company changed its name to Mahindra & Mahindra in 1948.

History
Mahindra & Mahindra was set up as a steel trading company in 1945. It soon expanded into manufacturing general-purpose utility vehicles, starting with assembly under license of the iconic Willys Jeep in India. Soon established as the Jeep manufacturers of India, M&M later branched out into the manufacture of light commercial vehicles (LCVs) and agricultural tractors. Today, M&M is the leader in the utility vehicle segment in India with its flagship UV Scorpio and enjoys a growing global market presence in both the automotive and tractor businesses. Over the past few years, M&M has expanded into new industries and geographies. They entered into the two-wheeler segment by taking over Kinetic Motors in India. M&M also has controlling stake in REVA Electric Car Company and acquired South Korea's SsangYong Motor Company in 2011.

PRODUCTS OF MAHINDRA

MAHINDRA SCORPIO

The Mahindra Scorpio is an SUV manufactured by Mahindra & Mahindra Limited, the flagship company of the Indian Mahindra Group. It was the first SUV from the company built for the global market. The Scorpio has been successfully accepted in international markets across the globe, and will shortly be launched in the United States.

Sales During 2012 Mahindra & Mahindra, Indias leading SUV manufacturer, today announced that its iconic SUV, Mahindra Scorpio, achieved yet another milestone when it recorded its highest ever annual sales since inception, with sales of 50,844 units during FY 2011-12

as against 43,451units during FY 2010-11, the Mighty Muscular Scorpio registered a growth of 17 percent. Profit during 2012 The maker of Scorpio and XUV500 utility vehicles posted 20% growth in stand maker of Scorpio and XUV500 utility vehicles posted 20% growth in standalone profit after tax for the first quarter ending June 2012 at Rs 725.6 crore compared to Rs 604.3 crore for the same period last year.

MAHINDRA RENAULT The Mahindra Renault Logan is a spacious wide body sedan built in association with Renault - the leading automobile manufacturer worldwide. It is a built around Renault's leading space optimization' design. Mahindra (Sedan) The Mahindra Renault with its petrol and diesel variants targets the upper middle class consumer with Mahindra cars ranging between rupees five and seven lakhs. Mahindra Renault variants include:

Sales And Profit

French car manufacturers, Renault Group have announced that their group revenues were down 13.3% to 8,447 million during the third quarter of 2012. Automotive revenues too fell 14.4% to 7,928 million while Renault Group sales were down 5.8% at 596,063 units.The company has lowered its delivery targets for 2012 following sales in third quarter falling 13%. Sales fell to 8.45 billion euros from July to September while the auto division saw revenues drop 14% to 7.93 billion. This has resulted in the group's full year volume falling short of last year's levels.

MAHINDRA BOLERO (SUV) Popular Mahindra SUV car prices range from Mahindra cars at a bit above rupees five lakhs to Mahindra cars at a bit below rupees ten lakhs. The Mahindra Bolero is Mahindra's leading presentation in the utility vehicle segment. It comes with a brand new style and time tested performance. The Mahindra Bolero lives up to its reputation of being a tough vehicle. Mahindra (SUV) The Mahindra Bolero with its diesel variants targets the middle class consumer with Mahindra SUVs at on-road prices ranging between rupees five and seven lakhs.

According to a press release by the leading automaker of India, the company sold 1,00,686 units of Bolero in the last financial year as compared to 83,112 units in FY 2010-11. This is the highest ever annual sales experienced by Mahindra since the launch of its major sport utility vehicle Bolero. Moreover in March the superbly smashing SUV Bolero registered its highest-ever monthly sales with 10,026 units.

MAHINDRA XYLO

The Mahindra XYLO is perhaps the first vehicle in the country which has been completely engineered around the customer. The powerful 2.49 litre mEagle CRDe engine is fuel-efficient and delivers 112 bhp, allowing you to literally fly from 0-60 kmph in just 5.8 seconds. Moreover, the Mahindra XYLO offers class-defining lavish space all around such that even a 6ft tall person can stretch in comfort on the 3rd row seat. The XYLO offers an extraordinary level of luxurious comfort at a very cost-effective price for prospective sedan buyers.

Sales During 2012 Having sold more than 90,000 Xylo (MUVs) since its launch in 2001, taking its market share in the this segment to 27 percent, Mahindra & Mahindra Ltd. Expects to cross the 100,000 mark in sales before the current financial year.

Profit During 2012 The maker of Mahindra Xylo utility vehicles posted 20% growth in standalone profit after tax for the first quarter ending June 2012 at Rs 850.6 crore compared to Rs 700.3 crore for the same period last year.

ANNUAL REPORT 2011-2012

(Rs. in crores) 2012 Gross Income Less: Excise Duty on Sales Net Income Profit before Depreciation, Finance Costs, Exceptional items and Taxation Less: Depreciation and Amortisation Profit before Finance Costs, Exceptional items and Taxation Less: Finance Costs Profit before Exceptional items and Taxation Add: Exceptional items Profit before Taxation Less: Provision for Tax-Current Tax (including MAT credit entitlement) Less: Provision for Tax-Deferred Tax (Net) Profit for the year Balance of profit for earlier years Add/(Less): Transfer from/(to) Debenture Redemption Reserve (Net) Profits available for appropriation Less: General Reserve Proposed Dividends Income-tax on Proposed Dividend Balance carried forward 34,820 2,501 32,319 4,237 576 3,661 163 3,498 108 3,606 538 189 2,879 6,209 (14) 9,074 300 768 101 7,905 2011 25,989 2,095 23,894 3,888 414 3,474 72 3,402 118 3,520 762 96 2,662 4,588 36 7,286 275 706 96 6,209

Table 1: Annual Report Of Mahinra & Mahindra For The Year 2011-2012

1. Name of the organization Mahindra Reva Electric Vehicles Private Limited, formerly known as the Reva Electric Car Company. It is one of the first companies to introduce electric vehicles worldwide. The company's flagship REVAi is the world's best selling electric vehicle so far. The company has been acquired by Indian conglomerate Mahindra & Mahindra in May 2010. 2. Address of the organization No. 122 E, Bommasandra Industrial Area opp. Hosur Road, Bangalore - 560099. 3. Telephone no. of the organization 080-40724200 4. Email id and website of the organisation Email id - rrp@mahindrareva.com, Website - www.mahindrareva.com 5. The nature of the organisation Today Reva has one of the largest deployed fleets of electric cars in the global market and the accumulated data from more than 100 million km of user experience. The companys electric vehicle platforms ,technologies and regional vehicle assembly are offered under license. A new factory with a capacity of 30,000 units per year is scheduled for completion end 2011. Electric Car Business is exporting to 24 countries.

6. Vision and Mission of the organisation Mahindra Revas vision is to change the way we drive by creating zero emission vehicles. 7. The projects being handled by the company The following projects are being handled by the company.

Table 2 : The Projects and their features being handled by the Company at present.

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8. Size of the organisation Today Reva has one of the largest deployed fleets of electric cars in the global market with 300 Employees and the accumulated data from more than 100 million km of user experience. The companys electric vehicle platforms, technologies and regional vehicle assembly are offered under license. A new factory with a capacity of 30,000 units per year is scheduled for completion end this year i.e. 2011. 9. Organisational Structure of the organisation

Figure 1 : The Organisational Structure of the Mahindra Reva.

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10. Market Shares and Position of the Firm Not applicable as company enjoys monopoly in market.

11. Present Owners and Members of the Board of the Company Mr. Anand Mahindra has got 55.2% stake and rest with Maini Group. Board of Members. Anand Mahindra - Vice Chairman of Mahindra & Mahindra and Managing Director of Mahindra & Mahindra Chetan Maini - Deputy Chairman and Chief of Technology & Strategy Lon Bell Ph.D.- Co-Founder and Vice Chairman H. Leonard Ph.D. Pawan Goenka S. Maini Suresh Talwar 12. Source of data Collection Secondary Data: Secondary data is data collected by someone other than the user. Common
sources of secondary data for social science include censuses, surveys, organizational records and data collected through qualitative methodologies or qualitative research. Primary data, by contrast, are collected by the investigator conducting the research.

Reports Internally document

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Chapter 2 SWOT Analysis of the Company.

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Chapter-2: SWOT Analysis of the Company.

Conducting a SWOT analysis will help the entrepreneur to clearly identify his own strengths and weaknesses as well as opportunities and threats in the environment. Threats in the environment can arise from competition, technical breakthroughs, change in government policies etc. he might posses certain unique skills or abilities, which along with his knowledge and experience can provide him a cutting edge. The SWOT analysis is an extremely useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. One can use SWOT analysis for business planning, strategic planning, competitor evaluation, marketing, business and product development and research reports. A SWOT analysis is a subjective assessment of data which is organized by the format into a logical order that helps understanding, presentation, discussion, and decision making. SWOT analysis can be used for all sorts of decision making and the template enable proactive thinking, rather than relying on habitual or instinctive reactions. The SWOT analysis template is normally presented as a rigid, compressing four section, one for each of the headings.

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Strengths 1. As against a petrol car, the REVA can halve your commuting costs for the month. 2. REVA is fully automatic. No gears or clutch, Perfect if youre uncomfortable with the idea of wrestling with gears. 3. Making it a zero emissions vehicle on the road. 4. Doesnt make noise while operation. 5. REVA motor emits no more than a barely audible hum. Even at top speed. 6. REVA is the best selling electric Vehicle so far in the whole world. 7. REVA has a turning radius of just 3.5 meters. Which means you can carve your way through city traffic just as easily as you can park. 8. REVA is as easy to charge as your mobile phone. 9. REVA is also available in different colors.

Figure 2 : The various colors in which Mahindra Reva is produced by the company.

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Weakness 1. REVA only travels 80 km when fully charged.So.it cannot be used for long journeys. 2. First car buyers, Travel requirement of more than 45 km a day. 3. Top Gear has, on several instances, tried to destroy the Reva or make fun of it for its poor speed, bad battery life and overall design and safety. 4. Reva has less Capacity so only two adults and two children can be accompanied at once.

Figure 3 : The size of the Mahindra Reva is very small.

Opportunity 1. Reva has a monopoly over the market. 2. Reva is the sole supplier of the electrical car in the market.

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3. The rise in Rate of Petrol is leading to increase in the cars demand. So it has possibility to increase the profit by increasing the sale. Threats 1. Reva is the sole supplier in the market, it has a threat from new companies which are trying to enter the market of electrical Car. 2. There is no restriction for Entry and Exit of firms. 3. Reva has some weakness, so there are chances that some other company enters the market by introducing a better Product or Electrical Car in the Market. USP (Unique Selling Practices) 1. Reva does not invest much in advertisements because it has monopoly over the market in production of electrical Cars. 2. Reva sometimes carries out small promotional event so that people are aware about the Electrical Car Reva 3. But it always tries to modify its products by changing its design and color so that more customers get attracted towards it. 4. The Reva has introduced REVA NXR in a Car Exhibition in 2010.It is going to introduce it in the market very soon.

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Figure 4 : The next model of the Reva, which has been named Reva NXR. The Frankfurt Motor Show also saw the unveiling of a show car known as the NXG. Production is scheduled for 2013. The NXG will also feature REVA's patented drivetrain technology and the REVive system. The two-seater sports car is expected to stand out for performance and speed.

Figure 5 : The next generation of Reva, which has been named Reva NXG.

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STRENGTH 1) REVA is as easy to charge as your mobile phone. 2) It is the best selling electric Vehicle so far in the whole world 3) Doesnt make noise while operation

WEAKNESS 1) REVA only travels 80 km when fully charged. So.it can be used for long journeys. 2) First car buyers, Travel requirement of more than 45 km a day. 3) It has less Capacity so only two adults and two children can be accompanied ot once.

SWOT OPPORTUNITY 1) Reva has a monopoly over the market. 2) It is the sole supplier of the electrical car in the market. 3) The rise in Rate of Petrol is leading to increase in the cars demand THREATS . 1) Reva is the sole supplier in the market, it has a threat from new companies which are trying to enter the market of electrical Car. 2) There is no restriction for Entry and Exit of firms. 3) Reva has some weakness, so there are chances that some other company enters the market by introducing a m better Product or Electrical Car in the Market.

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Chapter 3 Analysis of Financial Reports of the Company

Chapter-3: Analysis of Financial Reports of the Company

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The term "accounting ratios" is used to describe significant relationship between figures shown on a balance sheet, in a profit and loss account, in a budgetary control system or in any other part of accounting organization. Accounting ratios thus shows the relationship between accounting data. Ratio Analysis is a study of relationship among various financial factors in Business. Ratios can be found out by dividing one number by another number. Ratios show how one number is related to another. It may be expressed in the form of co-efficient, percentage, proportion, or rate. For example the current assets and current liabilities of a business on a particular date are $200,000 and $100,000 respectively. The ratio of current assets and current liabilities could be expressed as 2 (i.e. 200,000 / 100,000) or 200 percent or it can be expressed as 2:1 i.e., the current assets are two times the current liabilities. Ratio sometimes is expressed in the form of rate. For instance, the ratio between two numerical facts, usually over a period of time, e.g. stock turnover is three times a year.

Calculation of Ratios

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A) Liquidity Ratios (Short-Term Solvency)

1. Current Ratios Current Ratio is a relationship of Current Assets to Current Liabilities and is computed to assess the short term financial position of the enterprise. This ratio is also known as "working capital ratio". It means Current Ratio is an indicator of the enterprises ability to meet its short-term obligations. It is generally accepted that Current Assets should be two times the Current Liabilities.

Current Assets Current Ratio = Current Liabilities

Current Assets = Cash and Bank Balance + Debtors + Bills Receivable + Stock + Marketable Securities + Prepaid Expenses + Advance Payments. Current Liabilities = Creditor + Bills Payable + Bank Overdraft + Short-Term Loans + Outstanding Expenses + Provision for Tax + Unclaimed Dividend.

2011

2012

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6317.09 ___________ 7295.55 = 0.86

8302.37 ___________ 8767.00 = 0.94

0.94 0.92 0.9 R atios 0.88 0.86 0.84 0.82 201 0-11 20 11-12 Y ear C urrent R atio

Figure 7 : The graph for Current Ratio.

Interpretation : The Current Ratio for the year 2010-11 is 0.86 and the Current Ratio for the year 2011-12 is 0.94 which is less than the ideal ratio i.e. 2:1 which indicates lack of liquidity and shortage of working capital.

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2. Liquid ratios Liquid Ratio is a relationship of liquid assets with current liabilities and is computed to assess the short term liquidity of the enterprise in the correct firm. The Ratio is also known as Liquidity Ratio or Quick Ratio or Acid Test Ratio. Liquid Assets put against the Current Liabilities give the Liquid Ratio. Liquid Assets are the Assets which are either in the form Cash or Cash Equivalent.

Liquid Assets Liquid Ratio = Current Liabilities

Liquid Assets = Current Assets (Stock + Prepaid Expenses) Current Assets = Cash and Bank Balance + Debtors + Bills Receivable + Stock + Marketable Securities + Prepaid Expenses + Advance Payments. Current Liabilities = Creditor + Bills Payable + Bank Overdraft + Short-Term Loans + Outstanding Expenses + Provision for Tax + Unclaimed Dividend. 2011 4622.88
= =

2012 5943.98

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7295.55 = 0.63 =

8767.00 0.67

0.6 7 0.6 6 0.6 5 R atios 0.6 4 0.6 3 0.6 2 0.6 1 L iquid R atio

2010 -11

2 011-12 Y ear

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Figure 8: The graph for Liquidity Ratio.

Interpretation : The Liquid Ratio for the year 2010-11 is 0.63 and the Liquid Ratio for the year 2011-12 is 0.67. The ideal quick ratio should be 1 : 1 But in this case the ratio is less than the ideal ratio . Hence, the short- term financial position cannot be said to be satisfactory.

B) Solvency Ratio (Long-Term Solvency) 1. Debt-equity ratios Debt -Equity is computed to ascertain soundness of the long term financial position of the firm. This ratio is a relation between debt (external equity) and Equity. Debt means longterm loans, i.e., debentures, loans (long-term) from financial Institutions. This ratio is sufficient to assess the soundness of long-term financial position. It also indicates the extent to which the firm depends upon outsiders for its Existence. In other words, it portrays the proportion of total funds acquired by a firm by way of loans.

Debt (long term) Debt-Equity Ratio = Equity (share holder fund)

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Debt = Debentures + Loans and Advances Equity = Equity Share capital + Preference Share Capital + Reserves Fictitious Assets 2011 407.23 ________ 10279.42 2012 400.18 ________ 12104.69

= 0.039

= 0.033

0.0 39 0.0 38 0.0 37 0.0 36 R atios 0.0 35 0.0 34 0.0 33 0.0 32 0.0 31 0 .03 20 1011 2011 12 Y ear D ebt Equity ratio

Figure 9 : The graph for Debt-Equity Ratio.

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Interpretation : The Debt-Equity Ratio for the year 2010-11 is 0.039 and the DebtEquity Ratio for the year 2011-12 is 0.033. So, The Debt-Equity Ratio decreased by 0.006 from last year. Which is less than the ideal ratio 2 : 1 ,which is good for the long term lenders because they are more secure in that case. 2. Proprietary Ratio Proprietary Ratio establishes the relationship between propriters funds and total assets. This Ratio shows the extent to which the Shareholders own the business. The difference between this ratio and 100 represents the ratio of total liabilities to Total Assets. Proprietary Ratio highlights the general financial position of the enterprise. This Ratio is of particular importance to the Creditors.

Proprietors Fund or Shareholders Fund Proprietary Ratio = Total Assets (excluding fictitious Assets)

Proprietors Fund or Shareholders Fund = Equity Total Assets = Fixed Assets + Current Assets Fictitious Assets (Preliminary Expenses, Underwriting Commission, Share issue Expenses, discount on issue of Shares and Debentures)

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2011 10279.42 _____________ 12718.68 = 0.80

2012 12104.69 ___________ 15278.91 = 0.79

0 .8 0.7 98 0.7 96 0.7 94 R atios 0.7 92 0.79 0.7 88 0.7 86 0.7 84 201 0-11 2 011-1 2 Y ear

P roprieta ry R atio

Figure 10 : The graph for Proprietary Ratio.

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Interpretation : The Proprietary Ratio for the year 2010-11 is 0.80 and the Proprietary Ratio for the year 2011-12 is 0.79.A high proprietary ratio will indicate relatively little danger to the creditors, etc. in the event or winding up of the company . A ratio below 50% may be alarming for the creditors since they may have to lose heavily in the event of companys liquidation on account of heavy losses. C) Activity Ratio 1) Debtors Turnover Ratio This ratio indicates the relationship between credit sales and average debtors during the year. Net Credit Sales Debtors Turnover Ratio = Average Debtors + Average B/R

Bills receivable are added in Debtors for the purpose of calculation of this ratio, Average debtors are calculated by adding the debtors and B/R at the beginning of the period as well as at the end of the period and by dividing the total by 2. 2011
23477.53 _____________ 1671.54

2012
31835.20 __________ 1671.54

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=14.04 Times

=19.04

Times

20 18 16 14 12 R atios 10 8 6 4 2 0

D ebtors Turnover R atio

2010-11 Y ear

201 1-12

Figure 11 : The graph for the Debtors Turnover Ratio.

Interpretation:- This ratio indicates the speed with which the amount is collected from debtors. The higher the ratio the better it is, The more quickly the debtors pay, the less the risk from bad debts. A lower debtor turnover ratio will indicate the inefficient credit sales policy of the management.

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2. Working Capital Turnover Ratio Working Capital Turnover Ratio establishes the relationship between working Capital and Sales. It indicates the number of times a unit invested in the Working Capital produces Sales. This Ratio indicates weather the Working Capital has been effectively utilized or not. The Objective of computing the Ratio is to ascertain whether or not Working Capital has been utilized in making Sales. It measures the effective utilization of Working Capital and it also shows the number of times a unit invested in Working Capital produces Sales.

Net Sales Working Capital Turnover Ratio = Working Capital

Net Sales = Sales (Cash and Credit) Sales Return Working Capital = Current Assets Current Liabilities

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2011 23477.53 _______________ 7295.55-6317.09

23477.53 ______________ 978.46 = 23.99 Times

2012 31835.20 _______________ 8767.00-8302.37

31853.20 ___________ 464.63 = 68.51 Times

70 60 50 40 R atios 30 20 10 0 2010-11 Y ear 2011-1 2 Working C apital R atio

Figure 12: The graph for Working Capital Ratio.

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Interpretation : The Working Capital Turnover Ratio for the year 2010-11 is 20.56 and the Fixed Assets Turnover Ratio the year 2011-12 is 16.17. So, The Ratio has been decreased by 4.39 from last year which is not a good sign for the organisation.

D) Profitability Ratio 1) Earning Per Share Overall Profitability of a company can also be judged by calculating earning per share. In the context, earnings refer to profit available for equity shareholders. This ratio is calculated with the help of the following formula:-

Earning Per Share = Net Profit (after interest tax and dividend on preference share Number of Equity Share 2011 45.33 ____________ 293.62 = 0.15 Times 2012 48.88 _________ 294.52 = 0.16 Times

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0.16 0.1 58 0.1 56 0.1 54 R atios 0.1 52 0.15 0.1 48 0.1 46 0.1 44 2 010 -11 2 011 -12 Y ear Earning Per S hare

Figure 13 : The graph for Earning Per Share. Interpretation : The Earning Per Share for the year 2010-11 is and the Earning Per Share for the year 2011-12 is So, This ratio helps in the determination of the market price of the equity share of the company. The ratio is also helpful in estimating the capacity of the company to declare dividends on equity shares. 2. Net Profit Ratio Net Profit Ratio establishes the relationship between net Profit and Sales. It shows the percentage of net Profit earned on Sales. The Net Profit Ratio is a indicator of overall efficiency of the business. This Ratio helps in determining the Operational efficiency of the Business. A comparison with the industry standard is also an indicator of the efficiency of the Business. Net Profit is calculated by deducting all direct costs, i.e., cost of goods sold and indirect costs.

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Net Profit Net Profit Ratio = Net Sales 100

Net Sales = Sales (Cash and Credit) Sales Return 2011 2662.10 = 23477.53 100 = 31835.20 2012 2878.89 100

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11.33 %

= 9.04%

12 10 8 R atios 6 4 2 0 201 0-11 2011 -12 Y ear Net Profit R atio

Figure 14 : The graph for Net Profit Ratio. Interpretation : The Net Profit Ratio for the year 2010-11 is 11.33 % and the Net Profit Ratio the year 2011-12 is 9.04 %. So, The Net Profit Ratio has been decreased by 2.29 %

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from last year. This ratio measures the rate of net profit earned on sales. It helps in determining the overall efficiency of the business operations. An increase in the ratio over the previous year shows improvement in the overall efficiency and profitability of the business.

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Chapter 4 Lessons Learnt

Chapter-4: Lessons Learnt

In the two months of Summer Internship, the experiences with the trainer Mr. A. Asthana had been great with lot of valuable learning activity taking place. With the classroom 39

training method or coaching method we were given the knowledge about the different electric cars and new techniques. Information and knowledge about different benefits had been taught to us like Mahindra Reva. Irrespective of the heavy work load they took out some time to provide us with useful knowledge.

Experience gained in Mahindra Reva Private Limited. 1. The experience in Mahindra Reva during the summer training gave lot of information about the working conditions in an Organisation. 2. The Mahindra Reva Organisation follows a strict discipline regarding the working hours of the employees, which reaps the employees turnover and they also provide appropriate time for Break.

Practical Knowledge gained during Summer Training. 1. The job done in an Organisation is both challenging and difficult but it can be done easily with the help of hard work and Zeal to perform each and every Task.

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2. Each and Every worker in the organisation is motivated to perform his job perfectly so that it improves the quality of work done in an organisation. 3. With the help of Summer Training. I got an idea about Marketing a product and Strategies used for the Marketing Process. 4. The organisation must take care of the needs of the Customers and satisfy their needs so as to survive in the market. 5. The interaction with Superiors in the Organisation has improved the communication Skills. 6. Got an idea about how an automobile producing Organisation Functions. 7. Got an idea about how to find and interact with the Customers.

Difficulties faced during Summer Training. 1. Working in a big Organisation builds pressure on the employees because a single mistake can lead to million of losses.

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2. There was a lack of time to expose, learn and analyze the environment fully as well as to complete the project. 3. There was a Transportation problem.

Conclusion of Financial Analysis Liquidity Ratio

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The increase in current liabilities is more than the increase in Current Assets as compared to the last year. Since, there is a decrease in the ratio therefore the Organisation may face difficulties in paying the creditors from the Current Assets. The increase in current liabilities is more than the increase in Liquid Assets (due to less Current Assets) from the last year. Since, there is a decrease in the ratio therefore the Organisation may face difficulty in paying liability as there are very less Assets which can be converted into cash as soon as possible. Solvency Ratio The Organisation has sound Long-Term Loans and there is a decrease in the ratio therefore the Debts with the organisation has decreased from the last year and the Equity present with the Organisation has also increased as compared from the last year. The Proprietors Fund and the Total Assets both have increased from the last year and the Total Assets is more than Funds which is a good thing for the creditors of the Company. Activity Ratio The Net Fixed Assets has increased from the last year which has lead to increase in the Net Sales. The Difference between Net fixed Assets and Net Sales is too high which is a good thing.The Working Capital has increased from the last year but it hasnt affected the Net Sales as it should have done as compared to last year.

Profitability Ratio

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The Earning Per Share for the year 2011 has dropped because the increase in is less than the increase in the Net Sales. The Net Profit Ratio for the year 2011 has increased because the increase in Net Profit is more than the increase in the Net Sales introduced.

Advantages of Ratios Analysis: Ratio analysis is an important and age-old technique of financial analysis. The following are some of the advantages / Benefits of ratio analysis: 44

*0 Simplifies financial statements: It simplifies the comprehension of financial statements. Ratios tell the whole story of changes in the financial condition of the business *1 Facilitates inter-firm comparison: It provides data for inter-firm comparison. Ratios highlight the factors associated with successful and unsuccessful firm. They also reveal strong firms and weak firms, overvalued and undervalued firms. *2 Helps in planning: It helps in planning and forecasting. Ratios can assist management, in its basic functions of forecasting. Planning, co-ordination, control and communications. *3 Makes inter-firm comparison possible: Ratios analysis also makes possible comparison of the performance of different divisions of the firm. The ratios are helpful in deciding about their efficiency or otherwise in the past and likely performance in the future. *4 Help in investment decisions: It helps in investment decisions in the case of investors and lending decisions in the case of bankers etc.

Limitations of Ratios Analysis: The ratios analysis is one of the most powerful tools of financial management. Though ratios are simple to calculate and easy to understand, they suffer from serious limitations. *5 Limitations of financial statements: Ratios are based only on the information which has been recorded in the financial statements. Financial statements 45

themselves are subject to several limitations. Thus ratios derived, there from, are also subject to those limitations. For example, non-financial changes though important for the business are not relevant by the financial statements. Financial statements are affected to a very great extent by accounting conventions and concepts. Personal judgment plays a great part in determining the figures for financial statements. *6 Comparative study required: Ratios are useful in judging the efficiency of the business only when they are compared with past results of the business. However, such a comparison only provide glimpse of the past performance and forecasts for future may not prove correct since several other factors like market conditions, management policies, etc. may affect the future operations. *7 Ratios alone are not adequate: Ratios are only indicators, they cannot be taken as final regarding good or bad financial position of the business. Other things have also to be seen. *8 Problems of price level changes: A change in price level can affect the validity of ratios calculated for different time periods. In such a case the ratio analysis may not clearly indicate the trend in solvency and profitability of the company. The financial statements, therefore, be adjusted keeping in view the price level changes if a meaningful comparison is to be made through accounting ratios. *9 Lack of adequate standard: No fixed standard can be laid down for ideal ratios. There are no well accepted standards or rule of thumb for all ratios which can be accepted as norm. It renders interpretation of the ratios difficult.

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*10

Limited use of single ratios: A single ratio, usually, does not convey much of a sense. To make a better interpretation, a number of ratios have to be calculated which is likely to confuse the analyst than help him in making any good decision.

*11

Personal bias: Ratios are only means of financial analysis and not an end in itself. Ratios have to interpret and different people may interpret the same ratio in different way.

*12

Incomparable: Not only industries differ in their nature, but also the firms of the similar business widely differ in their size and accounting procedures etc. It makes comparison of ratios difficult and misleading.

Bibliography

1. Internal Mahindra Reva Electric Vehicles Private Limited. 2. Websites

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*13 http://www.zigwheels.com/newcars/Mahindra-Reva-Electric-Car-Company .

*14

http://www.scribd.com/doc/25975185/Ratio-Analysis-of-Mahindra-Reva

*15 http://www.mahindra.com/News/Press-Releases/130225419 *16 http://inimish.com/mahindra-reva-i-and-new-models-i-and-nxr/

3. Books *17
T.S. Grewal, Analysis of Financial Statements, Sultan Chand & Sons, New Delhi, 2007.

\ APPENDICES

Balance Sheet
As at 31 march 2011 and 31 march 2012
------------------- in Rs. Cr. ------------------Mar '12

Mar '11

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Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities

294.52 294.52 0 0 11,799.26 10.91 12,104.69 400.18 2,774.04 3,174.22 15,278.91 Mar '12

293.62 293.62 33.97 0 9,974.62 11.18 10,313.39 407.23 1,998.06 2,405.29 12,718.68 Mar '11

Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

8,063.18 3,552.36 4,510.82 922.26 10,310.46 2,358.39 1,988.36 630.57 4,977.32 2,767.19 557.86 8,302.37 0 6,921.73 1,845.27 8,767.00 -464.63 0 15,278.91 2,633.99 205.32

5,849.27 2,841.73 3,007.54 1,364.31 9,325.29 1,694.21 1,354.72 447.62 3,496.55 2,653.52 167.02 6,317.09 0 5,289.67 2,005.88 7,295.55 -978.46 0 12,718.68 2,632.10 174.85

Table 3: The Balance Sheet of Mahindra Reva.

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Profit and Loss Account

for the year ended 31 March 2011 and 31 march 2012
------------------- in Rs. Cr. ------------------Mar '12 Mar '11 Income

50

Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses

34,353.63 2,518.43 31,835.20 574.99 597.33 33,007.52 24,258.94 175.78 1,603.81 125.81 1,811.88 760.05 -73.53 28,662.74 Mar '12 3,769.79 4,344.78 162.75 4,182.03 576.14 0 3,605.89 0 3,605.89 727 2,878.89 4,403.80 0 767.48 101.13 5,890.30 48.88 250 205.32

25,569.55 2,092.02 23,477.53 563.13 202.23 24,242.89 16,604.88 143.93 1,445.56 98.33 1,735.63 261.1 -50.87 20,238.56 Mar '11 3,441.20 4,004.33 70.86 3,933.47 413.86 0 3,519.61 0 3,519.61 857.51 2,662.10 3,633.68 0 706.08 96.56 5,872.47 45.33 230 174.85

Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

Table 4: The Profit and Loss Account of Mahindra Reva

Cash Flow Statement

for the year ended 31 march 2011 and 31 March 2012

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Cash Flow

------------------- in Rs. Cr. ------------------Mar '12 Mar '11 3497.62 2734.95 -1936.54 -306.15 492.26 695.97 1188.23 3402.13 2979.75 -3734.99 -383.72 -1138.96 1753.13 614.17

Net Profit Before Tax Net Cash From Operating Activities Net Cash (used in)/from Investing Activities Net Cash (used in)/from Financing Activities Net (decrease)/increase In Cash and Cash Equivalents Opening Cash & Cash Equivalents Closing Cash & Cash Equivalents

Table 5: The Cash Flow Statement of Mahindra Reva.

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