SUMMER TRAINING PROJECT REPORT

ON

CASH FLOW STATEMENT

AT
ESCORTS PVT. LTD.

(SUBMITED AS REQUIREMENT FOR PARTIAL FULFILLMENT FOR DEGREE OF MBA AT

MAHARISHI DAYANAND UNVERCITY)

(SESSION :- 2014-16)

SUBMITED TO: SUBMITED BY:

Controller of Examination ANKIT
M.D.U, (Rohtak) MBA 3rd Sem
Reg. No. ………..

ARAVALI COLLEGE OF ENGINEERING & MANAGEMENT

FARIDABAD
M.D. University Rohtak
 ACKNOWLEGEMENT

Learning and acquiring knowledge has no boundaries. It has one resource that newer gets
exhausted, the more you preach, the better it gets and the more it lives down through
ages.From the day since man set his foot on earth, learning process had begun and is still
evolving making life happier and memorable.One can only lead a person to things he
needs to know,but newer can teach him how to learn. Experience through failures and
hardship makes a man perfect.
I extend heartiest thanks to MS. GUNJAN CHAWLA who initiated this intresting project.
She helped me to solve all the difficulties confronted at various stages.

(ANKIT)
 DECLARATION

I ANKIT, MBA 3rd sem Hereby declare that the project entitled “CASH FLOW
STATEMENT” is an Original Work done by me under the guidance of Ms. GUNJAN
CHAWLA in Aravali college of engineering & Management Faridabad in the partial
fulfillment of the requirement of the award of the degree of Master of Business
Administration from Maharshi Dayanand university,Rohtak and the same has not been
submitted to any other institute for the award of any other degree.

(ANKIT)
 Faculty Guide Certificate

This is to certify that ANKIT is a bonafied student of MBA 3rd sem during session
2014-16.The research project report entitled “CASH FLOW STATEMENT” has been
prepared under the guidence of Ms. GUNJAN CHAWLA partial fullfilment of Master of
Business Administrator from M.D.University Rohtak (HR).

Under the Guidence of:-

Ms. GUNJAN CHAWLA

 PREFACE

Summer training is an essential part of any professional study. It introduces the student to
the real world in which he is going to step in after his professional studies. Summer
training introduces the student to the industry and tells him/ her about the job aspects in
the near future when he is about to leave the college for a job.

In the field of management apart from the theoretical knowledge practical knowledge is
also an essential part, because it helps the student to gain knowledge of the ongoing
changes required in the industry.

Therefore industrial training should be imposed after the IInd semester of M.B.A degree to
the shaping the student and accustom him/her to the industry.

I got an opportunity to work with Escorts Ltd.Under the guidance of

their most superior staffs.

(ANKIT)
Index
SERIAL TOPIC
NO.
Company profile
Corporate In formation
Vision of ESCORTS
Mission of ESCORTS

Review of Litretaure

Research methdology
Objective
Methods of analysis
Limitations

Data analysis
Findings of study

Recommendations

Conclusion

Annexure
Balance sheet
Profit & Loss A/C

Bibliography
List of books
Websites
Chapter #1

COMPANY
PROFILE
 COMPANY PROFILE

The Escorts Group, is among India's leading engineering conglomerates operating in the
high growth sectors of agri-machinery, construction & material handling equipment,
railway equipment and auto components.

Having pioneered farm mechanization in the country, Escorts has played a pivotal role
in the agricultural growth of India for over five decades. One of the leading tractor
manufacturers of the country, Escorts offers a comprehensive range of tractors, more
than 45 variants starting from 25 to 80 HP. Escort, Farmtrac and Powertrac are the
widely accepted and preferred brands of tractors from the house of Escorts.

A leading material handling and construction equipment manufacturer, we manufacture

and market a diverse range of equipment like cranes, loaders, vibratory rollers and
forklifts. Escorts today is the world's largest Pick 'n' Carry Hydraulic Mobile Crane
manufacturer.

Escorts has been a major player in the railway equipment business in India for nearly
five decades. Our product offering includes brakes, couplers, shock absorbers, rail
fastening systems, composite brake blocks and vulcanized rubber parts.

In the auto components segment, Escorts is a leading manufacturer of auto suspension

products including shock absorbers and telescopic front forks. Over the years, with
continuous development and improvement in manufacturing technology and design,
new reliable products have been introduced.

The Escort Group has also been operating in the ITES and financial services sectors.
Throughout the evolution of Escorts, technology has always been its greatest ally for
growth. In the over six decades of our inception, Escorts has been much more than just
being one of India's largest engineering companies. It has been a harbinger of new
technology, a prime mover on the industrial front, at every stage introducing products
and technologies that helped take the country forward in key growth areas. Over a
million tractors and over 16,000 construction and material handling equipment that have
rolled out from the facilities of Escorts, complemented by a highly satisfied customer
base, are testimony to the manufacturing excellence of Escorts. Following the globally
accepted best manufacturing practices with relentless focus on research and
development, Escorts is today in the league of premier corporate entities in India.

Technological and business collaboration with world leaders over the years, Globally
competitive indigenous engineering capabilities, over 1600 sales and service outlets and
footprints in over 40 countries have been instrumental in making Escorts the Indian
multinational. At a time when the world is looking at India as an outsourcing
destination, Escorts is rightly placed to be the dependable outsourcing partner of world's
leading engineering corporations looking at outsourcing manufacture of engines,
transmissions, gears, hydraulics, implements and attachments to tractors, and shock
absorbers for heavy trailers and armored tanks.

In today's Global Market Place, Escorts is fast on the path of an internal transformation,
which will help it to be a key driver of manufacturing excellence in the global arena. For
this we are going beyond just adhering to prevailing norms, we are setting our own
standards and relentlessly pursuing them to achieve our desired benchmarks of
excellence.
 INDIAN TRACTOR INDUSTRY
INTRODUCTION

India is predominantly an agricultural country.70% of the population lives in villages

and villagers depends upon agriculture for their bread and butter. Since Indian valley

civilization, agriculture is the main source of income but at that time the agriculture was

manual work. Before independence Indian agriculture was in very bad situation. But

since 1947, when India became independent, the farmers also became independent. They

had seen many ups and downs in their income. After independence in five-year plans,

first priority was assigned to agriculture government tried best to improve the industry

but a systematic planned approach for development started in 1950, since than irrigation

was recognized as key factor for agriculture. Education and research were also taken as

a major initiative.

In over six decades of the inception, Escorts has been much more than just being one of

India's largest engineering companies. It has been a prime mover on the industrial front

introducing products and technologies and taking the country forward in key areas.

All these developments made mechanization mandatory for agriculture and imports of

tractors began. Acceptance of mechanization was slow, in fifty’s the use of tractor was

very low. Green Revolution was the result of tractor was barely 10000 in 1970. The

industry was producing around 25000 to 30000 tractors. Today, India is the largest

tractor market estimating 2185000 tractors per annum with the annual growth of 12.3.
Today the tractor industry is of about 5000 crores.

With the 12% of arable land, today India has 4.7% of the world’s tractor. India splits

tractors largely into four categories i.e. 20-30hp, 31-40hp, 41-50hp, 51& above. 21-30hp

and 31-40hp ranges into together are nearly 76%.

SEGMENT OF TRACTORS ACCORDING TO HP WISE

Tractor Range 2011-12 2012-13 2013-14 2014-15

20-30 HP 24% 22% 17% 10%
31-40 HP 51% 50% 54% 55%
41-50 HP 19% 20% 22% 25%
50&above 6% 8% 7% 10%

Demand for big hp segment is increasing as per the table shown. In the budget of 2011-

12, the central government has given subsidy of Rs. 30000 per tractor. The subsidy was

for the user of low up segment tractors (for small farmers). The government wants to

increase the usage of tractor for higher agriculture production. In the budget of

year2012-13, the finance minister Mr. Yashwant Sinha has levied 8% excise duty on the

imports. This was to save the Indian tractor industry form the slow down of economy

and the East Asian Crises. According to economic survey of 2013-14 the production of

agriculture has dropped by 205%. Until 2014-15 small tractor (below 25hp) were

exempted fro the excise in bid to encourage small farmers. Because in India, almost

65% of farmers has less than 4 acres of arable land.

According to business India, due to the Mahindra & Mahindra and Swaraj tractors

would be benefited about Rs. 10000 to Rs.12000 per tractor as compared to others,

which imports parts from abroad. The compound average growth rate during last six

years has been around 15%. The level of tractorization is high in Punjab & Haryana at

around 95&74 tractors per thousand hectares respectively. The tractor demand is driven
by agriculture Products, Interest Rates, Total

Agricultural Credit, Total Irrigation Facilities and Crop Pattern. Among them, credit is

strongly correlated with the tractor sale. Nearly 80% of the tractor’s sale is through

credit.

Financial Pattern:

As stated above that 80% of the tractor is financed through credit rates essentially

through commercial banks, regional banks, rural banks and state level land development

banks. The credit worthiness of the farmer is ascertained to have minimum holding of 6

areas of cultivated land to be eligible for loan. However bank can provide a loan on

smaller landholding subject to farmer establishing his credit worthiness. The credit

inflow since financial year 2013 is increasing support from NSBARD. This has already

allocated 2000 crores from current year.

HISTORICAL BACKGROUND:

Indian agricultural in the fifties followed age bound tradition and was considered

backward. The country did not produce enough food grain to feed its 36 crores

population and famines were recurrent features. Import of food grains became necessary

to meet the short fall in domestic production, there by causing a drain on scare foreign

exchange resources. It therefore became imperative to high priority to the development

of agriculture.
First phase of development (2013-14,2014-15):

Farm mechanism made a small beginning in the first five year PLAN. Tractors were

imported for introduction is isolated pockets. However acceptance of mechanization was

a slow process due to lack of awareness about its economic usefulness and versatility.

The decade 1960 saw green revolution both increase in production and productivity with

the parallel emphasis on industry. The birth of Indian tractor industry took place in

1959-60 when

import was restricted & five manufacturing units were set up in private sector all with collaboration. It

was in this background that production of tractors in the country in 1960.

NAME COLLABORATION YEAR OF

COMMENCEMENT
M/S EICHER TRACTORS LTD. WEST GERMANY 1959
M/S HINDUSTAN TRACTORS CZECHOSLOVAKIA 1963

LTD.
M/S TRACTORS & FARM, U.K. 1963

EQUIPMENT LTD.(TAFE)
M/S ESCORTS LTD. POLAND 1964
M/S INTERNATIONAL U.K. 1965

TTACTORS CO. OF INDIA

LTS LATER RENAMED AS

MAHINDRA & MAHINDRA

The total indigenous production of tractors by 1965 was just 6000. The real spurt in
mechanization of agriculture came in the introduction of high yielding variety (HYV) of

seeds in 1966-67 and their enthusiastic adoption by farmers, particularly in the wheat

growing northern region. With the successful introduction and acceptance these high

quality seeds there was a upspring in the demand of tractors in 1967 and demand started

multiplying at an annual rate of almost 50% (1967:1800-1970:33000).A natural

consequent of sharp upsurge and consequent shortage was heavy price premium on

tractors : Recognizing the situation , imports of tractors were liberalized and over and

above the domestic production of 20000 in 1970 3000 tractors were imported.

Second phase of development (1968-1980):

Since the pace of indigenous five tractors manufacturing units already set up far below

expectation, the Government decided to provide diligence to the tractor industry in 1968

and invites new entrepreneurs. Benefiting from this forward-loo

king policy six more units came in during 1971-1974. These were:

NAME COLLABORTION YEAR OF

COMMENCEMENT
M/S ESCORTS TRACTORS U.K. 1971

LTD.
M/S HMT LTD. CZECHOSLIVAKIA 1971
M/S KIRLOSKAR TRACTORS WEST GERMANY 1974

LTD.
M/S PUNJAB TRACTORS INDIGENOUS 1974

LTD.
M/S HARSHA TARCTORS USSR 1975

LTD.

Not withstanding the above progress on the setting up to new units. Tractor industry ran

into difficulties from 1969 onwards and by 1972 domestic tractor production stagnated

at a level of 20000units primarily due to continuing of imports of tractors. Problem was

further compounded by the oil crisis in 1973-74 and the resultant economic crisis and
inflationary pressures, which persisted till middle of 1975.

The tractor market started slowly pocking up from 1975 (31000tractors) because of

relative price stability , govt. directives of the commercial banks increase rural lending

expansion of rural branches of commercial banks good monsoons which resulted in

bumper harvests and accelerated

pace of extension of irrigation facilities . This trend continued throughout the late

seventies and by 1979-80 yearly market off take had risen to a level of 62000tractors.

Third phase of development (1980-86):

The buoyancy in the tractor market experienced in the late seventies continued tell 1981-82 when 78000

tractors were sold. The encouraging trend led to the setting up of more for the manufacture of tractors

during 1981-86. These units were:

NAME COLLABORATION YEAR OF

COMMENCEMENT
M/S AUTO TRACTORS LTD. U.K. 1981
M/S PRATAP STEEL INDIGENOUS 1983

ROLLING MILL LTD.

M/S VST TRACTORS LTD. JAPAN 1986

However, the sale of tractors plummeted to a low level of 66000 tractors in the year

1982-83 in the wake of severe credit squeeze imposed by reserve bank of India.

The demand for tractors again picked up when the credit squeeze was eased and a sale

of 80000units was recorded in the year 1984-85 for next year. Tractor industry stagnated

causing closure of five manufacturing units as detailed below

NAME YEAR OF CLOSURE

PINE TRACTORS LTD. 1983

HARSHA TRACTORS LTD. 1987

AUTO TRACTORS LTD. 1987

KISLOSKAR TRACTOR LTD. 1991

PRALAP STEEL ROLLING MILLS 1996

(HARYANA TRACTORS LTD.)

Fourth phase of development(1987 onwards):

In the year 1987-88 the country saw a severe drought situation. This was a difficult

period and it widely anticipated that crop yield would be severely affected. Under such a

situation it was necessary to have provisions for supply of power, to perform farm

operation, at proper time in order to fully exploit the limited moisture content left in soil.

The versatility in the tractor became evident as this vehicle was used for pumping out

underground water in this background tractor industry showed a remarkable growth

during this period and all time high sale of 90000 tractors was recorded in the drought

year (1987-88).Fourth phase of development

The growth trend appears to be continuing with relaxation of tractor financing norms, except for a 2 year

slack period due to general economic slowdown and political turmoil. In fiscal 1997-98 tractors sales

refaced an all time high record of 250000.This impressive growth has influenced 3 more players, as listed

below, to enter the market

NAME COLLABORATION YEAR OF

COMMENCEMENT
INTERNATIONAL TRACTORS INDIGENOUS 1997

LTD.
BAJAJ TEMPO LTD. INDIGENOUS 1997
NEW HALLAND TRACTORS ITALY 1998

(INDIA) PVT. LTD.

JOHN DHEER TRACTORLTD. POLAND 2000

HISTORICAL BACKGROUND OF ESCORTS GROUP

Escorts came into being a vision that led two brothers Yudi Nanda and Hari Nanda to

branch out their family’s prospering transport s business and institute ventures that were

to become the foundations of escorts Ltd. Escorts Agents Limited was born at Lahore on

17th October 1944 with Yudi Nanda as Managing Director and Hari Nanda as Chairman.

After the owing to opportunity lying in the Indian village, Escorts (Agricultural

Machinery) Ltd. was launched in 1948 with Yudi Nanda as Director. Tragically Yudi

Nanda died in an accident in 1952. Then Escorts agent Ltd. And Escorts (Agricultural

Machine) Ltd. Was merged in 1953 to create single Escorts agents Pvt Ltd

SOME MILESTONES
1948 Pioneered farm mechanization in the country by launching Escorts Agricultural Machines Ltd. With a franchise

from a U.S. based MINNEAPOLIS MOLINE, WISCONCIN, for marketing tractors, implements, engines and

other equipments.
1958 Started importing MF tractor from Yugoslavia for marketing the same in India.
1960 A manufacturing plant was set up at Faridabad

1965

1965 Got industrial license to manufacture URSUS/ ESCORT tractors.

169

1969 Escorts signed a contract with FORD MOTOR COMPANY to manufacture Ford 3000 model tractors. Escorts
Institute of Farm Mechanization (EIFM) was established at Bangalore. This training Institute is one of its kind.
1971 1st February, the first tractor FORD 3000 rolled out of the factory. The same year the turnover touched the Rs.53

million mark.
1973 Escorts Tractors Limited (ETL) declared a healthy Profit Before Tax of Rs.4.725 million.

1974 Export of 400 tractors to Afghanistan - perhaps the worlds largest ever airlift of such equipment.

1975 Turnover crossed the Rs. 200 million mark for ETL. Profit After Tax Rs. 8.7 million. Maiden dividend of 10%
declared.

1976
1976 FORD 3600, advancement in Farm Mechanization, was launched with fanfare to a tremendous reception. Trial

production of in-plant manufacturing of engine parts (Block & Head).

1977
1977 Escorts Scientific Research Centre marked its beginning at Faridabad by developing its own Engines for E-27

and E-37. Due to constant technology absorption, indigenization level touched 72% for FORD tractors, which

was a result of relentless effort in that direction.

1979 Turnover crossed the Rs. 50 crores mark. In plant facility for machining centre housing and case transmission,

on built-in line concept, installed

1983 Escorts Tractors Limited (ETL) established a state-of-the-art research and development centre to spearhead
newer breakthroughs in Farm Mechanization and to maintain industry leadership. Line concept introduced for

engine block machining.

1984 75000th tractor rolled out. A great occasion for the large family that worked for ETL. Newer challenges and
frontiers were set.

1985 In keeping with the stupendous financial success, Escorts Tractors Limited (ETL) offered its first Bonus Issue
(1:1).
 1987 50hp FORD 3610 was launched, another leap for the Indian Farm Mechanization Industry, the farmers and the
people of the land.

1988
1988 ETL’s annualized turnover crossed Rs. 100 crores. Dividend: 45% for 15 months.
1989 A MOU with CLAAS was signed for manufacturing &

1990- First Public Issue (February’91) over-subscribed four times. Shares listed on Delhi and Bombay Stock Exchanges.

91
1991- The Crop Tiger range of Combine Harvesters was launched by Escorts Claas Ltd.

92
1993 FORD 3620 tractor launched

1996 Disengagement of joint venture collaboration with New Holland and launch of FARMTRAC Tractor.
1997 A Joint Venture with Italian company CARRARO was finalized to establish a company in India for manufacturing

and marketing of transmission and axles.

1998 POWERTRAC series of tractors were launched. A MOU was signed with Long Manufacturing Company, USA for
setting up a Joint Venture in USA.

MoU for Joint Venture with a Polish Company POL-MOT was signed for assembly,
1999
manufacturing and marketing of Farm Machinery.

Divested Escotel Mobile Telecommunications to Idea Cellular

2004 TS16949 certification for Agri Machinery Group.

Divested Escorts Heart Institute and Research Centre (EHIRC) to Fortis Healthcare.

2005
Divested in Carraro India Ltd.

2006

Set up new manufacturing facility in Rudrapur for manufacture of new range of railway
equipment

COLLABORATIONS

Collaboration with international Organization of technological excellence , constant

research to adopt the emerging technology to specify requirement of the market and

belief in the philosophy industrial interdependence have made Escorts today one of the

leading trend steers in India’s New Industrial Culture. Escorts have merged as fraternity

of above 50,000 shareholders, 22,000 employees 4,000 ancillary suppliers and 1, 6000

dealers and stockiest all engaged in a large scale investment and sustained efforts to
meet the ever widening market horizons of technological competence appropriate to

India’s unique changing needs.

Escorts believe in incorporating the finest existing technology to meet Indian consumers

demands by collaborating with the internationally renowned companies prominent

among these are:

IN GERMANY

 GOETZE AG Piston rings and cylinder liners.

 MAHLE GmbH Piston
 CLASS OHG Harvesters Combines
 KNORR BREMSE AG Railway Brake System
 AUGUST BILSTEIN GmbH Absorbers, Hydraulic products,

Pressure and temperature switches,

automatic valves

IN JAPAN

 KAYABA INDUSTRY CO. LTD. Telescopic Front Forks Car

 MIKUNI SHOKO CO. Carburetors for BI-Wheelers

IN U.K.

 J.C.BAMFORD EXCAVATORS JCB Excavators loaders Front end

Loaders, Telescopic handlers

IN U.S.A

 HUGHESNETWORKS SYSTEMS AB Road Construction Machinery

Vibratory Road Rollers

OFFICIAL ADDRESS OF ESCORTS

Registered Office Corporate

Secretariat & Law

Escorts Ltd.
11, Scindia House,
Connaught Circus,
New Delhi-110 001.
Tel. No. 011-23310145
Fax No. 011-23311715
Escorts Ltd.
15/5, Mathura Road,
Faridabad - 121 003
Tel. No. ( 0129 ) 2250222
Fax: ( 0129 ) 2250060
Email Address: corpsect@ndb.vsnl.net.in
Web Site : www.escortsgroup.com

LEADERSHIP TEAM

Mr. Rajan Nanda

Chairman

Mr. Nikhil Nanda

Joint Managing Director

Mr. Rohtash Mal

Executive Director and Chief Executive Officer - Agri Machinery Group

Mr. Manoj Jha

Executive Vice President of Engineering Division

Mr. Kamal Bali

CEO – Escorts Construction Equipment Limited (ECEL)

Mr. G.B. Mathur

Vice President - Law & Company Secretary
Mr. Rakesh Kumar Budhiraja
Group Chief Financial Officer
Mr. Partha Dasgupta
Group Vice President Human Resources and Employee Relations
 LEVELS OF MANAGEMENT

MANAGEMENT

TOP SENIOR MIDDLE JUNIOR

MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT

MANAGING CHIEF GENERAL CHIEF ASSISTANT

DIRECTOR & MANGER(G-8) MANAGER MANAGER(G-2)
CEO(G-11) (G-5)

VICE PRESIDENT GENERAL SENIOR EXECUTIVE(G-

(G-10) MANAGER(G-7) MANAGER(G-4) 1)

ASSOCIATE DEPUTY MANAGER(G-3)

VICE PRESIDENT GENERAL
(G-9) MANAGER(G-6)
 CHAPTER # 2.
REVIEW OF LITERATURE
 INTRODUCTION
MEANING OF FINANCIAL STATEMENTS

The financial statements are nothing but the financial information presented in
concise and capsule form, and are the financial information is the information relating to the
financial position of any firm. The firm prepares the financial statements.

• To communicate with different parties about the financial position of the firm
(Shareholders, creditors, banks, financial institution, financial analysts, investors
etc. And

• To analyze the operations and performance of the firm for the further
planning.

The basic source, which provides the financial information, is the Annual report of the
company, which is presented by the company to its shareholders at the Annual General
Meeting.

Though the presentation of annual report is a statutory requirement under the

Companies Act 1956, however it is also a medium of communication with the present as well
as prospective investors and creditors of the company.

Clause 43 A of the Listing Agreement (with the stock exchange) requires every
listed company to publish unaudited quarterly results. But it does not mean the non-corporate
firms do not prepare the financial statements. Every firm big or small, prepare the following
financial statements:
The Balance Sheet (BS).

1. The Income Statement (IS).

Two other key financial statements, which are usually prepared by corporate firms, are:

1. Statement of appropriation of profit, and

2. Statement of Change in financial position.

ANALYSIS OF FINANCIAL STATEMENTS (AFS)

Analysis of financial statements refers to the process of the critical examination of the
financial information contained in the financial statements in order to understand and
make decisions regarding the operations of the firm. The AFS is basically a study of the
relationship among various financial fact and figures as given in a set of financial
statements. AFS is the process of establishment and identifying the financial weakness
and strength of the firm. It is indicative of two aspects of a firm i.e. the profitability
and the financial position.
 OBJECTIVES OF AFS

The objectives of the AFS is to understand the information contained in financial

statements with a view to know the weakness and strength of the firm and to make a
forecast about the future prospects of the firm and thereby enabling the financial
analyst to take different decisions regarding the operation of the firm. The objectives
are as follows:
COMMON-SIZE STATEMENTS (CSS)

The CSS represents the relationship of different items of financial statements with some
Common items by expressing each item as a percentage of the common item. In common size
Balance Sheet, each item of the balance sheet is stated as a percentage of the total balance
sheet. The percentages for different items are computed by dividing the absolute amount of
that item by the Common Base and then multiply by 100. The percentage so calculated can
be easily compared with the corresponding percentage in some other period. Thus, the CSS is
useful not only in intra-firm comparison for the same year or free several years.

TREND PERCENTAGE ANALYSYS(TPA)

The TPA is a technique of studying several financial statements over a series of years. In
TPA, the trend percentages are calculated for each item by taking the figure of that item for
some base year as 100. So, the trend percentage is the percentage relationship, which

Each item of different years bears to the same item in the base year. Any year may be Taken
as the base year, but generally the starting / initial year is taken as the base year. So, each
item for base year is taken as 100 and then the same item for other years is Expressed as a
percentage of the base year.
 STATEMENT OF CHANGES IN FINANCIAL POSITION
(SCFP)

Since the BS & IS of a firm are two basic depicting the financial position of a firm at the end
of the year. These two financial statements are called the traditional statements. Both these
statements fail to throw light on changes in assets, liabilities and shareholders wealth during
this year.

BS deals with the financial position gives only the static view of the year- end financial
position and fails to indicate the movement and causes in assets and liabilities during the
year. Similarly, IS show the profit or loss resulting out of the operations of the firm during
the year? This profit or loss in fact to ascertain the sufficiency of resources to declare the
dividend etc. thus, there is a need to prepare another statement (together with the BS & IS)
which may identify the changes in assets, liabilities and the shareholders funds over a given
period.

The SCFP is essentially an explanation of the changes in financial position of a Firm

occasioned by the firm in between two successive BS's. The SCFP draws basic Information
from the BS and IS helps in understanding the change in assets, liabilities and shareholders
worth. The SCFP deals with the flow of funds during the year i.e. the funds coming in and
going out of the firm. It summarizes the sources from where the funds might have been
arranged / procured by the firm and the uses for which the funs might have been used by
the firm during the year.

The SCFP can be prepared as follows

• SCFP (Cash Basis) also known as a Cash Flow Statement
• SCFP (Net Working Capital Basis) Fund Flow Statement
 SCFP (WORKING CAPITAL BASIS):
FUND FLOW STATEMENT
The FFS reports the flows of funds through the firm during the year i.e., it shows the
Sources and uses of working capital between two balance sheet dates. The FFS
attempts to explain the changes in financial position from one BS to the subsequent BS
in terms of the change in the funds or the working capital position of the firm.

The term Working capital (WC) is generally defined as the excess of total current
assets over the total current liabilities. The current Assets (CA) of a firm may include
cash in hand and at bank, stock, debtors, bills, advances etc. and the Current Liabilities
(CL) includes creditors, bills payable, outstanding expenses, provision for tax, short
term liabilities etc. the term WC is a single figure representing the net effect of a
transaction is to increase or decrease the Working Capital by affecting any of the
elements of Current Assets or Current Liabilities. Therefore, the FFS in its standard
form incorporates only those transactions, which affect the Working Capital i. e. those
transactions where in only one of the affected accounted is a current account.

Now a flow of working capital arises when one of the affected accounts is a current
account. From the point of view of current account, the effected on working capital
can examined in the light of the definitions of the term working capital i.e., the excess
of current assets over current liabilities i.e.,

Impliedly change in any of the CA or CL will affect the WC. Simple observation
equation tells that:

• Increase in any of the CA or decrease in any of the CLs will result in increase
in the WC.
• Decrease in any of the CA or increase in any of the CLs will result in decrease
in the WC.
 To find out the relative importance of different components of the financial position
of the firm.

• To identify the reasons for change in the profitability / financial position of the
firm, and

• To assess the short term as well as the long term liquidity position of the
firm.

TECHNIQUES /TOOLS OF THE AFS

AFS can be undertaken by different persons and for different purposes, therefore the
methodology adopted for the AFS may be carrying from one situation to another. However,
the following are some of the common techniques of the AFS:

• Comparative financial statements.

• Common-size financial statements.
• Trend percentage analysis , and
• Ratio Analysis.
 COMPARATIVE FINANCIAL STATEMENTS

In CFS , two or more BS and/or the IS of a firm are presented simultaneously in columnar
form. The Financial data for two or more tears are placed and presented in adjacent columns
and thereby the financial data is provided at times perspective in order to facilitate periodic
comparison. In CFS , the BS and the IS for number of years are presented in condensed
form for year to year comparison and to exhibit the magnitude and direction of changes.

The CFS helps a financial analyst of the firm and in establishing operating and
positional trend of the firm. The CFS may be prepared to show

1. The absolute amount of different items in monetary terms,

2. The amount of periodic changes in monetary terms,
1. The percentages of periodic changes to reveal the proportionate changes.
The CFS can be prepared for both the BS and the IS.
 CORE COMPETENCE OF ESCORTS

Customer # 1

We put customers first in everything we do. We take decisions keeping the customer in
mind.

Challenging Spirit

We strive for excellence in everything we do and in the quality of goods & services we
provide. We work hard to achieve what we commit & achieve results faster than our
competitors and we never give up.

Team-work

We work cohesively with our colleagues as a multi-cultural team built on trust, respect,
understanding & mutual co-operation. Everyone's contribution is equally important for
our success.

Frank & Fair Organization

We are honest, sincere, open minded, fair & transparent in our dealings. We actively
listen to others and participate in healthy & frank discussions to achieve the
organization's goals
A firm undertakes numerous during a year and" most of these transactions during a year and
most of these transactions may affect one or the other current account i.e. most of these
transactions May results in the flow of the WC. Neither is it necessary nor practical to
identify the effect of each and every transaction on the WC. These transactions, instead, are
considered and analyzed in a collective form and then their effect on the WC is identified.

SCFP (CASH BASIS) OR

THE CASH FLOW STATEMENT

The CFS attempts to analyze the transactions of the firm in terms of cash i.e., the transactions
generating cash and using cash. The focus in the CFS is on cash rather than on WC. The
sources of cash may be the cash profits earned by the firm, issue of capital for cash, issue of
other securities for cash, borrowings, sale of assets, investment, redemption of debenture or
preference share, repayment of loan, payment of tax, dividend distribution etc. Thus, the
CFS summarizes the cash inflows and outflows.
An analysis of cash flows is useful for short-run planning. A firm needs sufficient cash to
debts maturing in the near future, to pay interest and other expenses and to pay dividends to
shareholders. The firm can make projections of cash flows and outflows for the near future to
determine the availability of cash. This cash balance can be matched with the firm's need for
cash during the period, and accordingly, arrangements can be made the deficit or invest the
surplus cash temporarily. A historical analysis of cash flows provides insight to prepare
reliable cash flow projections for the immediate future.

A statement of changes in financial position on cash basis, commonly known as cash flow
statement, summarizes the causes of changes in cash position between dates of two balance
sheets. It indicates the sources & uses of cash. The cash flow statement is similar to the fund
flow statement except that it focuses attentions on cash instead of working capital (funds).
Thus, this statement analyses change in non-current accounts as well as current accounts
(other than cash) to determine the flow of cash.
 • The CFS is based on the concept on the WC Where as the CFS is based in cash
which is only the element of WC. Thus , the CFS provides details of cash
movements whereas the FFS provides the details of funds movements.

• The CFS considers only the actual movement of cash whereas the FFS considers the
movements of the funds as defined in terms of net working capital.

CASH-FLOW STATEMENT

A cash-flow statement is a statement showing inflows (receipts) and outflows (payments) of

cash during a particular period. In other words, it is a summary of sources and applications of
Cash during a particular span of time. It analyses the reason for changes in balance of cash
between the two balance sheet dates. The term "Cash" here stands for cash and cash
equivalents.

A cash-flow statement includes only those items, which affect cash. As such the cash-flow
statement is called a "statement of changes in financial position - cash basis."

A cash - flow statement can be for the past or can be projected for a future period.

OBJECTS OR USES OF CASH-FLOW STATEMENT

The main objectives behind preparing a cash-flow statement can be laid down as under:-

• USEFUL FOR SHORT-TERM FINANCIAL PLANNING:-

A cash-flow statement provides information for planning the short-term financial needs of the
firm. Since it provides information regarding the sources and utilization of cash during a period,
it become easier for the management to assess whether it will have. Adequate cash to meet day-
to-day expenses and pay the long - term loans and interest .Thereon and whether it has enough
cash to pay for the purchase of fixed assets or not.
  USEFUL FOR PREARING THE CASH BUDGET:-

A cash-flow statement prepared for the future period is helpful in preparing a cash budget. It
informs the management about the future period is helpful in preparing a cash budget. It informs
the management about the surplus or deficit periods of cash, i.e., in which months the payments
will be in excess of receipts. It helps in planning the investment of surplus cash in short-term
investment and to plan short-term credit in advance of deficit periods.

• COMPARISON WITH CASH BUDGET:-

A cash budget is prepared at the commencement of the year, whereas a cash flow Statement is
prepared at the end of the year. A comparison between the two helps in ascertaining the extent to
which the financial resources of the firm have been generated and used according to the plan.
Causes of variances between the figures of two statements can be analyzed and proper
corrective measures may be takes.

• STUDY OF THE TREND OF CASH RECEIPTS AND PAYMENTS:-

A cash-flow statement reveals the speed at which the cash is being generated from debtors, stock
and other current assets the speed at which the current liabilities are being paid. It enables the
management to assess the true position of the cash in future.

• IT EXPLAINS THE DEVIATIONS OF CASH FROM EARNINGS:-

A firm may earn huge profits yet it may have paucity of cash or when it suffered a loss it may
still have plenty of cash . A cash flow statement explains the reasons for it.
  HELPFUL IN ASCERTAINING CASH-FLOW FROM
VARIOUS ACTIBITIES SEPARATELY:-

A cash-flow statement aims at highlighting the cash flow from operating, investing and
financing activities separately. It includes how much cash has been generated or used in these
activities.

• HELPFUL IN MAKING .DIVIDEND DECISIONS:-

Dividend must be paid within 42 days of its declaration. Hence the management takes the help of
cash-flow statement to ascertain the position of cash generated from operating activities, which
can be used for payment of dividend.

IMPORTANCE AND RELEVANCE OF CFS

The CFS has gained importance in view of the fact that there are many managerial Decisions,
which are taken in the light of the cash availability or cash position of the firm.

For example, declaration of dividend by the company requires cash disbursement and Therefore,
the Board of Directors must consider the cash position before proposing a dividend. The CFS
also provides information for the short term financial planning and in particular the short term
cash needs of the firm.

In view of increasing importance and relevance of the CFS, the clause 32 of the Listing
agreement (between a Company and the Stock Exchange where the shares proposed to be listed)
has been amended by the SEBI. As a result, the listed companies in India are now required to
supply a copy of the CFS to each shareholder as a part of Annual Report. As a result, the listed
companies have started a practice of sending a CFS for which the BS has been prepared as
apart of the Annual Report of the company.
 DIFFRENCE BETWEEN CASH - FLOW STATEMENT AND
CASH BUDGET

There is not much difference between cash flow statement and a cash budget. The only
difference is that a cash flow statement is prepared for a past period where as cash budget is
prepared for a future period. Hence, it is of limited use as far as the future periods are
concerned. A cash budget is therefore prepared showing how much cash is likely to be
received and what will be the disbursements during a future period of time. Thus, a cash
budget indicates in which months there will be surplus cash and in which moths there will
be deficiency of cash resources. The management can then take suitable decision to invest
the surplus cash or make arrangement for the deficiency of cash at the required time.

LIQUIDITY

It does not present true picture of the liquidity of the firm the liquidity does not depend
upon cash alone. Liquidity also depends upon those assets, which can be converted into
cash easily.

Exclusion of these assets obstructs the true reporting of the ability of the firm to meet its
liabilities when they become due for payment.

The possibilities of window - dressing is higher in case of cash position in

comparison to the working capital position of the firm.

The cash balance can be easily maneuvered by postponing purchases and other payments
and by rapidly collecting cash from debtors before the balance sheet date. Hence, a fund -
flow statement presents a more realistic picture than a cash flow statement.

Cash flow statement ignores non- cash charges. Hence the true position of the
enterprise cannot be judged by cash flow statement.

It is prepared on cash basis and hence ignores one of the basic concept of accounting, namely
accrual concept.

PROCEDURE OF PREPARING CASH FLOW

STATEMENT:-

The institute of charted accountants of India has issued accounting standards (as)-3 revised, for
preparing a cash flow statement. This accounting standard has been made mandatory in respect
of accounting periods commencing on or after 1st April 2001, for certain enterprises. These
enterprises are:-
• Enterprises whose equity or debt securities are listed on a recognized stock exchange in
India. And enterprise that are in the process of issuing equity or debt securities that will
be listed on a recognized stock exchange in India.
• All other commercial, industrial and business enterprises, whose turnover for accounting
period Rs 50 crores.

As such, the cash flow statement has been prepared according to as -3 revised in this project.

According to as-3 revised, the cash flow statement summarizes the cash inflows and cash
outflows and the net changes (increase or decrease) in cash and cash equipment resulting from
operating, investing and financing activities of a firm during a period. The following terms are
used for preparing a cash flow statement:

CASH:-

It compares cash in hand and demands with banks.

CASH EQUIVALENTS:-

There are short - term, highly liquid investments that are readily into known amounts of cash
and which present insignificant risk of changes in their values. Normally, an investment will be
termed as cash equivalent only if it has a short maturity period, say three months or less, from the
date of its acquisition. Examples of cash equivalent are treasury bills, commercial papers etc.
Which are purchased with cash that is in excess of immediate needs investment in shares are
excluded from cash equivalents unless they are cash equivalent in reality. For example, the
preference shares of the company, which are purchased shortly before their redemption date will
be included in cash equivalents, provided there is only an insignificant risk of failure of the
company in repaying the amount at the date of the maturity.

CLASSIFICATION OF CASH FLOW:-

According to as -3 (revised), cash flow statement should be presented in a manner that it reports
inflows of cash by classifying them into three categories, namely: operating, investing and
financing activities. Classification of all activities into these activities on the cash and cash
equivalents of the enterprise such information will be helpful in evaluating the relationships
among these three activities are explained as below:

 CASH FLOW FROM OPERATING ACTIVITIES:-

Operating activities are the main revenue generating activities of an enterprise. As such they
include cash flows from those transactions and events, which enter into the ascertainment of
net profit or loss of the enterprise. Examples of cash flows arising operating activities are:

• Cash receipts from the sale of goods and rendering of services;

• Cash receipts from royalties, fees, commissions and other revenue;
• Cash payments to suppliers for goods and services;
• Cash payments to and on behalf of employees;
• Cash receipts and cash payments of an insurance enterprise for premiums and claims,
annuities and other policy benefits;
• Cash receipts and payments relating to future contracts, forward contracts, option
contracts and swap contracts when the contracts are held for dealing or trade purpose and
• Cash payments of refunds of income taxes unless they can be specifically identified with
. financing and investing activities
  CASH FLOW FROM INVESTING ACTIVITIES:-

Investing activities include the purchase and sale of long term assets such as land, building, plant
and machinery etc not held for resale. These activities also include the purchase and sale of such
investment, which are, not including in cash equipments. Cash flow from investing activities
discloses the expenditures incurred for resources intended to generate future income and cash
flows.

Examples cash flow arising from investing activities are;

• Cash payments to acquire fixed assets (including intangible);
• Cash receipts from sale of fixed assets (including intangibles);

• Cash payments to acquire shares ,warrants or debt instruments of other enterprises

(other than receipts for those instruments considered to be cash equivalents);

• Cash receipts from sale of shares, warrants or debt instruments of other enterprises (other
than receipts for those instruments considered to be cash equivalents).

• Cash advances and loans made to third parties. In case of financial enterprises these will
be treated as cash flow from operating activities;

• Cash receipts from the repayment of advances and loans made to third parties. In case of
financial enterprises these will be treated as cash flow from operating activities;

• Cash receipts of insurance claim for property involved in accident; and

• Cash receipts of interest and dividend. In case of financial enterprise these will be treated
cash flow from operating activities;
 CASH FLOW FROM FIANCING ACTIVITIES:-

Financing activities are the activities that result in change in capital and borrowing of the
enterprise.

Examples of cash flows arising from financing activities are:

• Cash receipts from issuing shares or other similar instruments;

• Cash receipts from issuing debentures, loans, bonds and other short term or long term
borrowing;

• Cash repayment of amounts borrowed, buy back of equity shares, redemption of

preference shares, debentures, loans, bonds etc;

• Cash payment of interest and dividend;

 CASH FLOW STATEMENT
(DIRECT METHOD)

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from costumers ****

Cash paid to suppliers and employers (****)
Cash generated from operations ****
Income tax paid (****)
Cash flows from extraordinary item ****
± Extra ordinary items ****
Net cash from operating activities ****

CASH FLOW FROM INVESTING ACTIVITIES:-

Purchase of fixed assets ****
Proceed from sale equipment (****)
Interest received ****
Dividend received (****)
Net cash from investing activities ****

CASH FLOW FROM. FINANCING ACTIVITIES;

Proceeds from insurance of share capital ****

Proceeds from long- term borrowings (****)
Repayment of from long-term borrowings ****
Interest paid ****
Dividend paid (****)
Net cash from financing activities ****
Net increase in cash and cash equivalent ****
Cash and cash equivalents at beginning of period ****
Cash and cash equivalents at end of period ****
 SOME SPECIAL TERMS:-

As - 3 (revised) has been provided for the treatment of some special items as below:

i) INTERSET AND DIVIDEND:-

Cash inflow from interest and dividends and cash outflow on account of interest and
dividends should be disclosed separately. Cash inflow arising from interest and dividends
received should be shown as cash flow from investing activities where as cash outflow
disclosed outflow on account of interest and dividend paid should be shown as cash flow
from financing activity.

ii) TAXES ON INCOME:-

Tax paid on income is a part of cash flow from operating activity. Hence, taxes paid are
shown as a deduction under 'cash flow from operating activity'

iii) EXTRA ORDINARY ITEMS;-

Cash flow relating to extra ordinary items such as bad debts recovered. Claims received from
insurance companies, winning of a lottery or a law etc. Should be disclosed separately as
arising from operating, investing or financing activities. For example, the amount received
for insurance company on account of loss of stock by fire. Earthquake and floods etc. Should
be reported as cash flow from operating activities.

iv) SIGNIFICANT NON - CASH TRANSACTION:-

There are some investing and financing activities, which do not require the use of cash or
cash equivalents. Such non cash activities should be excluded from the cash flow statement.
Examples are; the acquisition of assets by issue of debentures or shares, conversion of
shares into debentures etc. Such significant on non cash transaction should be disclosed
outside the cash flow statement.
 CASH FLOW STATEMENT
(INDIRECT METHOD)

CASH FLOW FROM' OPERARATTNG ACTIVITIES:

Net profit before taxation, and extraordinary item ****

Adjustment for:
Depreciation ****
Foreign exchange loss ****
Interest income ****
Dividend income ****
Interest expense ****
Operating profit before working capital changes ****
Increase in sundry debtors ****
Decrease in inventories ****
Decrease in sundry creditors ****
Cash generated from operations ****
Income tax paid (****)
Cash flow before extraordinary item ****
± Extra - ordinary items ****
Net cash from operating activities

****

CASH FLOW FROM INVESTING ACTIVITIES:

Purchase of fixed assets (****)

Proceeds from sale of equipment ****
Interest received *****
Dividend received (****)
Net cash from investing activities ****
CASH FLOW FROM FINANCING ACTIVITIES:-.

Proceeds from insurance of share capital ****

Proceeds from long - term borrowings ****
Repayments of from long - term borrowings (****)
Interest paid (****)
Dividend paid (****)
Net cash from financing activities ****
Net increase in cash and cash equivalent ****
Cash and cash equivalents at beginning of period ****
Cash and cash equivalent at end of period ****
 CHANGES IN CASH FLOWS

Changes in cash flows can be treated to the following;

1. Net profit will increase the cash flows; these cash flows will be increased further if
there are any non-cash changes (such as depreciation and amortization)

2. Any payment of dividends will decrease the cash flows; as will the repayment of debt;
an issue of share or debt will also increase the cash flows.

3. An increase in non-cash assets will decrease cash flows; increase in current assets and
fixed assets will result in drain on cash flows.

Thus, a statement of changes in cash flows i.e. the cash flow statement classifies all Changes
into one of three categories - operating, investing, or financing activities, Therefore, the
preparation of a statement of changes in cash flows requires classification of changes in
liabilities, shareholders equity, and non-cash assets into one of these categories, although some
items will not fit easily onto one other.
 STEP- BY-STEP PROCEDURE TO PREPARE CFS

1. Calculate the net increase or decrease in cash and cash equivalents:-

For this purpose the opening balance of total cash and cash equivalents is compared with the
closing balance of cash and equivalents.

Increase/decrease in cash and equivalents

Opening balance Closing Balance
Cash in hand **** ****

Cash in bank **** ****

Short-term Investment **** ****

Total **** ****

The difference between the total of opening and closing balance will be increased or
Decreased in cash equivalents during the period. It may be noted that if there are only one or
two of items of cash etc.

2. Net Cash flaw from operating activities:-

The term operating refers to the normal purchase of goods and services. On the basis of the
information contained in the comparative BS s and the IS and the additional Information, the
net cash flow generated or use by the operating activities may be ascertained. The IS prepared
by the firm gives the net profit figure earned by the firm,. On actual basis i.e., all items in the
IS are incorporated on the basis of earned/accrued even.

3. If not resulting in cash movements;-

So the profit or loss as by the IS may not result in increase or decrease in cash balance by the
same amount.
 CHAPTER # 3

RESEARCH

METHODOLOGY
 OBJECTIVES OF THE STUDY

• To find the movement of cash inflow and cash outflow.

• To make the comparison between cash inflow and

• Cash outflow.
• To prepare the Cash Flow Statement.
• To analyze the Balance Sheet of the company in terms of Cash Flow Statement.

• To focus on various activities of the organization in terms of Operating,

Financing, Investment.
 RESEARCH METHODOLOGY:-
RESEARCH DESIGN:

• The study was conducted under well- structured approach.

• The project lasted for 4 weeks and the year 2009 i.e. from 08 July to 12
Aug.2009.

• The questionnaire method & personal interview method was used to collect
the primary data for the study.

The secondary data is collected from Internet & company training material and
many other company materials

SAMPLE DESIGN:

The process of extracting a sample from a population is called sampling

procedure. The selection of sampling procedure to conduct the research
depends upon the nature of the study and the objective to be accomplished.
Judgment sampling technique is adopted to select the respondents in this
study. The sample design included the various departments in the YAMAHA
MOTORS PVT. LTD.
Sources of data

Primary data:

Primary data is the data which is collected by the researcher for the first time
and which was not there. The tools used to collect the data are:-

1) Questionnaire method from the employers in different departments.

 2) Face to Face personal interactions.

Secondary Data

The data already collected is called as secondary data. The relevant information
for this study has been collected from secondary source such as

 Books
 Journal
 Reports
 Publication by the organizational circulation
 Company records
 Business bulletins
 Internet

Secondary data is also collected from various of the internet and intranet. Some
of the website trough which information was gathered was through

WWW.GOOGLE.COM

METHOD OF ANALYSIS

1. Data analysis is done using the following statistical tools wherever

required, in order to extract meaningful information from the collected
data.

o Simple percentage and averages

o Bar diagram

o Cone diagram
 o Pie diagram

2. The collected data from the questionnaire has been put together in the
form of tables.

3. Percentage has been calculated wherever necessary for generalization of

the data.

4. Data analysis and interpretation has been done on the basis of primary
and secondary data.

5. The findings researches have been recorded based on the analysis.

6. The study conducted pertains only to YAMAHA MOTORS INDIA

PVT.LTD.
 HYPOTHESIS

The report is analyzed under the presumption that cash flow position of
YAMAHA MOTORS PVT.LTD. It can be improved and made effective in
terms of cash flows.

In testing the above hypothesis the following aspects will be considered

1. Balance sheet comparisons

2. Presentation of cash flow statement in terms of revised AS-3

LIMITATIONS

The study though conducted to the best of the ability suffers from some
certain limitations. There are:

 The data is secondary one and as such its reliability may be

questioned upon.

 The time availability for the study is less, and as such it hinders thee
progress of the study.

 Senior officials were rarely approachable.

 Websites were not giving comprehensive data.

 Not having face-to-face interaction to get more relevant

information.

 Analysis and interpretation of data was done on the assumption that

the respondents’ information was online

 Information collected was totally subjective.

 The interviews are done during office hours, but could not be done
for the other employees of other .
 CHAPTER # 4.

DATA ANALYSIS

ESCORTS PVT. LTD

CASH FLOW STRATEMENT

Year Ended Year Ended

30.09.2009 30.09.2008
Rs. Crores Rs.
Crores
A, Cash Flow from Operating Activities
Net profit before tax (17.33) 34.44
Adjustment for:
Loss on sale/ Provision for diminution in value of Long Term
Investments & loans to Group Companies 1.89 40.18
Gain on sale of Long Term Investments (1.22) (94.92)
Gain on sale of Asset (0.13) -
Depreciation 44.97 39.55
Misc. Exp./ Assets Write off/ Provisions 8.08 7.50
Interest Expense 72.22 79.99
Dividend Income (0.02) (0.01)
Interest Income (20.82) -

Operating Profit before working capital changes 87.64 106.73

Adjustments for:
Trade and other Receivables (88.17) (120.35)
Inventories 13.79 (46.92)
Trade Payables 67.05 190.46
Miscellaneous Expenditure (7.50) (5.11)

(14.83) 18.08
Cash Generated from Operations 72.81 124.81
Direct Taxes (Paid)/Refunds (17.85) 31.66
Net Cash Flow from operating activities 54.96 156.47

B, Cash Flow from Investing Activities

Purchase of Fixed Assets (30.95) (27.94)

Proceeds from sale of Fixed Assets 0.86 1.77
Movement in Loans and Advances (16.27) (16.44)
Sale of Investments 32.33 114.52
Short Term Deposits with schedule Banks (2.31) (10.48)
Interest Received 20.70 -
Dividend Received 0.02 0.01

Net Cash Flow from Investing activities 4.38 61.44

Proceeds from Share Capital & Securities Premium 114.44 -

Proceeds from Long Term Borrowings 86.60 -
Less : Repayment of Long Term Borrowings (0.54) (78.96)
Proceeds/ (Repayment) from short term borrowings (net) (227.26) -
Interest Paid (77.40) (82.23)

Net Cash used in financing activities (104.16) (161.19)

Net Increase/(Decrease) in Cash and Cash equivalents (44.82) 56.72

Cash and Cash equivalents as at 01.10.2008 105.65 48.93

Cash and Cash equivalents as at 30.09.2009 . 60.83 105.65
 DATA ANALYSIS
ANALYSIS OF CASH FLOW

 From the cash flow statements of the YAMAHA MOTORS PVT.LTD.It can be
analyzed from the two years that the net cash balance of the company has
increased manifold in 30-09-2008 than the year 30-09-2009.
 The net profit in 30-09-2008 is higher than the 30-09-2009, but due to certain
changes there has been increase in the cash balance.
 The interest paid this year is ore of the last year, which implies that thee
company has not repaid his borrowed capital, due to which the interest has got
down.
 The depreciation has increased but it does not affect cash to an extent, as it is a
non-cash item. In the head of working capital there is drastic change in the cash
balance in the form of “Trade and other Receivables; which has affected the cash
balance.
 There is outflow of cash for receivables rather than the inflow in the last year.
So, the net effect is that the cash from operating activities has been decreased
two times from the last year.
 The company has no accumulated losses as at the end of the financial year i.e.
September 31, 2008.
 Provision for taxation has been made in accordance with the requirement of AS-
22 issued by Institute of Charted Accountants of India.
 Pursuant to that, current year deferred tax liability have been charged to profit &
loss account
 In opinion of the board of directors of thee company, the current assets, loans
and advances have a value on realization in the ordinary course of the business at
least equal to the amount stated in the balance sheet and provision for all
liabilities have been made.
  Balance of sundry debtors, creditors, loans and advances are subject to
confirmation by the concerned parties.

 All bank balances (debit/credit) have been confirmed by the concerned bank.

Identified from the available information which has been relied upon by the auditors.

 The names of small-scale industrial units to whom outstanding for more than
thirty days within agreed terms.

 The company has 99.96% of shareholders in its subsidiary company named as

ESCORTS PVT. LTD. As at 31-03-2008.
 So the net effect is that the net cash from investing activities has many more
times than the last year, which is negative. Now the company has repaid its long
term borrowing more than the last year, which has decreased the cash balance by
the little amount.
 Balance with the schedule banks under the head current & collection account
amounting to represent funds in transit lying with schedule banks pending
transfer against loan liabilities under the head cash credit & bill discounting.
 CHAPTER#5

FINDING OF SUDY
FINDING OF STUDY

According to cash flow statement of the company, The finding of the study are as
follows:-

 The company has not taken any loans, secured or unsecured

from companies, firms or other parties.

 The company has not accepted any deposit from the public
during the year.

 The company is not a sick industrial company.

 The company has not granted any loan, secured or unsecured

to company, firms or other parties.

 The company has paid the entire long term and short term
borrowing during the year.

 The company has buy back the company’s own share this year .

 The interest paid in 2008 is more than the 2009.

 There is out flow of cash for receivables rather than the

inflows.
 CHAPTER #6

RECOMMENDATIONS
RECOMMENDATIONS
According to cash flow statement of the company, The
suggestions of the study are as follows:-

 The time durations for training program have to increase.

 Buy regular review and consultations develop a career

progression, which is sensitive to performance and
ability.

 Create an environment where by people are trend

developed to enable.

 The to take advantages of opportunities that arise.

 The jab can be redesigned where the work man stay in

what is normally the same job but has elements of it
changed.

 The principle amount must be paid in time, which can be

reducing the interest the out flow.

 The purchase of the fixed asset must be made only when

there is extreme requirement.

 In order to avoid taxes the company should go for more

investment.

 The company’s borrowings should go for more

investment.

 The company should try to reduce the depreciations as

maximum as possible.
CHAPTER#7

CONCLUSION
 CONCLUSION

 The study on competency level of employees at ESCORTS PVT.LTD. gave an

insight about the acceptance of competency mapping by employees.
 The employees at Ymi welcome the introduction of competency mapping in
their organization as they felt it was very much essential in enhancing their
skills and organizational development.
 The organization has provided the recourses guidance and support to facilitate
the introduction of competency level easily and develop the employees in such
a way that they can face any kind of challenge.
 However the level of competency in employees is found to be satisfactory.
Providing proper training, education and guidance to the employees can
enhance the level.
 This study was mainly carried out to find out whether thee competency
mapping being followed by the company is effective till date. If the
competency mapping and fitment to the organization.
 By looking at the graphs and tables it is quite that the employees still are not
up to the level of competent pool, they still have to be trained and made
competent in order to fill the gap. As the organization has just applied the
mapping, it has to see to that it meets all the requirements for competency
mapping.
 Therefore the graphs make it quite clear that, the potential of the employees is
not up to the mark, and i.e. they are not competent enough to meet the
competency-mapping requirement. Hence by further training and counseling
this gap can be closed.
 This report includes the training requirements of employees and it highlights
skills possessed by each employee and skill required. All employees get
training so that skill can be improved and maintain balance between standard
performance with their actual performance to avoid gap.
CHAPTER# 8

ANNEXURE
 ANNEXURE

ESCORTS PVT. LTD.

BALANCE SHEET AS AT 30SEPTEMBER.2009
As At As
At
30.09.2009 30.09.2008
Schedule Rs. Crores Rs.
Crores
SOURCES OF FUNDS
Share Capital 1 83.69
72.23
Reserves & Surplus 2 1,035.28
946.34

Total Shareholders'Funds 1,118.97

1,018.57
Loans
Secured 3 414.04 422.54
Unsecured 4 31.10 445.14 167.83
590.37

Total 1,564.11
1,608.94
APPLICATION OF FUNDS
Fixed Assets
Gross Block 1,436.96 1,401.03
Less: Depreciation/ Amortisation 583.24 534.43

Net Block 853.72 866.60

Capital Work-in-Progress & Capital Advances 13.40 21.47

Total Fixed Assets 5 867.12

888.07
Investments 6 425.13
456.24
Deferred Tax Assets (Net) 90.24
 76.40
Current Assets, Loans & Advances
Current Assets 7
Inventories 158.49 172.49
Sundry Debtors 379.74 292.75
Cash & Bank Balances 173.21 215.72
Other Current Assets 0.43 0.31

711.87 681.27
Loans & Advances 8 215.21 199.44

Total Current Assets, Loans & Advances 927.08 880.

DEDUCT
Current Liabilities & Provisions 9
Current Liabilities 606.65 546.58
Provisions 154.74 162.35

Total Current Liabilities & Provisions 761.39 708.93

Net Current Assets 165.69 171.78

Miscellaneous Expenditure
(to the extent not written off or adjusted) 15.93 16.45

Total 1,564.11 1,608.

ESCORTS PVT. LTD.
PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 30 SEPTEMBER.2009
As At As At
30.09.2009 30.09.2008
Schedule Rs. Crores Rs. Crores

INCOME
Gross Sales 2,108.19 1,785.78
Less: Excise Duty 31.42 35.13
Net Sales 2,076.77 1,750.65
Business Income 10 25.36 37.11
Income from Investments 11 1.24 94.93

Total 2,103.37 1,882.69

EXPENDITURE
Material, Manufacturing & Operating 12 1,588.34 1,337.85
Personnel 13 204.02 158.70
Sales & Administration 14 200.29 177.12
Interest (Net) 15 51.39 69.15
Bank & Finance Charges 17.56 15.80
Depreciation 5 51.65 45.74
Less : Transfer of Depreciation from Revaluation Reserve 6.68 44.97 6.19 39.55

Amortisation of Miscellaneous Expenditure 16 7.55 7.50

2,114.12 1,805.67

PROFIT / (LOSS) BEFORE TAX & EXCEPTIONAL ITEMS (10.75) 77.02

Exceptional Items 17 6.58 42.58

PROFIT / (LOSS) BEFORE TAX (17.33) 34.44

Provision for Taxation
Current Taxation 0.36 10.63
Fringe Benefit Tax 2.59 2.58
Deferred Taxation (13.84) (10.89) 2.23 15.44
PROFIT / (LOSS) AFTER TAX (6.44) 19.00
Balance brought forward (139.02) (169.27)
Transfer from Debenture Redemption Reserve - 11.25
BALANCE CARRIED TO BALANCE SHEET (145.46) (139.02)
BIBLIOGRAPHY
 List of Books.

1. PANDEY I.M. - FINANCIAL MANAGEMANT

2. KHAN M.Y. AND JAIN P.K. -FINANCIAL

MANAGEMANT

3. SMITH K.V. – MANAGEMANT OF WORKING

CAPITAL

3. COMPANY RECORDS

4. JOURNAL

5. REPORTS

WEBLIOGRAPHY

1. www.escortspvtltd.com
2. www.google.com