A

PROJECT REPORT
ON

“ANALYTICAL STUDY OF FINANCIAL STATEMENT THROUGH

CASH FLOW STATEMENT OF ICICI BANK LTD.”

Submitted To
The Rashtrasant Tukdoji Maharaj Nagpur University,
In The Partial Fulfillment Of The requirement for the award of degree
of Master in Business Administration (MBA)

Submitted By
ANAM FAROOQUI

Guided By

PROF. NIDHI BISEN

G.H.RAISONI INSTITUTE OF MANAGEMENT & RESEARCH

KHAPERKHEDA, NAGPUR
2018-20
 G.H.RAISONI INSTITUTE OF MANAGEMENT & RESEARCH
BabuBhai Colony, Prince Lawn, Chincholi, Khaperkheda, Nagpur-441102 (INDIA)
Ph. no. : +91-712-6617181 Fax: +91-712-6630782
Email: ghrimrkha@raisoni.net Web: http://www.ghrimrn.raisoni.net

CERTIFICATE

This is to certify that ANAM FAROOQUI, a Student of the Master of

Business Administration (MBA) Course Specialization in Finance &
Marketing, For Academic Session 2018-20, G. H. Raisoni Institute of
Management & Research, Khaperkheda, Nagpur
His project titled “ANALYTICAL STUDY OF FINANCIAL
STATEMENT THROUGH CASH FLOW STATEMENT OF ICICI
BANK LTD.”. Which is in partial fulfillment of the requirement for the
above course, is being forwarded to Rashtrasant Tukdoji Maharaj Nagpur
University.

PROF. NIDHI BISEN Dr. MEENA RAJESH

Project Guide Principal

 DECLARATION

I ANAM FAROOQUI, hereby declare that with the exception of

suggestions and guidance received from my guide Dr. VIJAY
GONDANE, this project work titled “ANALYTICAL STUDY OF
FINANCIAL STATEMENT THROUGH CASH FLOW STATEMENT
OF ICICI BANK LTD.”. is my own hard work. This project as one,
which is substantially the same as this, has not been submitted by me
for any other examination of this university or any other University.

Place: - Nagpur ANAM FAROOQUI

Date :- (GHRIMR)
 ACKNOWLEDGEMENT

It is my pleasure to place on record my sincere gratitude towards my

guide CMA, DR. JYOTI MAHAJAN, who spent her precious time
providing continuous ideas and expert guidance to my project work. It was
her direction and encouragement at every moment and step that motivated
me to steer the research work confidently and successfully.

I am also grateful to Principal Dr. Meena Rajesh for her

Encouragement, morale support and the valuable guidance. I am indebted to
my work successfully. I am also thankful to all those who have directly or
indirectly helped me for this project work.

Place: - Nagpur ANAM FAROOQUI

Date :- (GHRIMR)
 UNDERTAKING

I, ANAM FAROOQUI hereby undertake that the project work entitled

“ANALYTICAL STUDY OF FINANCIAL STATEMENT THROUGH
CASH FLOW STATEMENT OF ICICI BANK LTD.” Nagpur Is My
Own Work and to the best of my knowledge and beliefs is not submitted to
any university for any degree.

Place: - Nagpur ANAM FAROOQUI

Date :- (GHRIMR)
 INDEX

SR NO. CHAPTER NAME PAGE NO.

1 Introduction

2 Company Profile

3 Objectives & Limitations

4 Research Methodology

5 Data Analysis & Interpretation

6 Finding & Suggestions

7 Conclusion

8 Bibliography

9 Annexure
INTRODUCTION
 INTRODUCTION

Cash is the basic input needed to keep the operations of the business going on a
continuing basis; it is also the final output expected to be realized by selling the product
manufactured by the manufacturing unit. Cash is the both the beginning and the end of the
business operations.
Sometimes, it so happens that a business unit earns sufficient profit, but in spite of
this it is not able to pay its liabilities when the become due. Therefore, a business should
be always try to keep sufficient cash, neither more nor less because shortage of cash will
threaten the firms liquidity and solvency, whereas excessive cash will not be fruitful
utilized, will simply remain ideal and affect the profitability of a concern. Effective cash
management, therefore, implies a proper balancing between the two conflicting objectives
of liquidity
The management of cash also assumes importance because it is difficult to predict
cash inflows and outflows accurately and there is no perfect coincidence between the
inflows and outflows of cash giving rise to either cash outflows exceeding inflows or cash
inflows exceeding outflows. Cash flow statement is one important tool of cash
management because it throws light on cash inflows and cash outflows of a particular
period.
Meaning of Cash Flow Statement
A funds flow statement based on working capital is very useful in long-range
financial planning but this statement may conceal or exclude too much. This is so because
it does not take into considerations the movements among the individual current assets and
current liabilities i.e. it shows net change in working capital. Moreover, this statement
treats increases in receivables, inventories and prepaid expenses and decreases in accounts
payable, outstanding expenses and bank over draft as equivalent to decrease in cash.
Likewise, decreases in receivables, inventories and prepaid expenses and increases in
creditors, bills payable, outstanding expenses and bank overdraft are treated as equivalent
to increases in cash. This is not a correct treatment because this items do not decrease cash
or make cash available. Sundry creditors, bills payable, outstanding expenses become
payable in the next period. Similarly, inventories and receivable make cash available in the
next period. It is quite possible that there may be sufficient working capital as revealed by
the funds flow statement and still the company may be unable to meet its current liabilities
as and when they fall due. It may be due to an accumulation of inventories and an increase
in trade debtors caused by a slow down in collections. In such a situation, a cash flow
statement is more useful because it gives detailed information to the management about the
sources of cash inflows and outflows. A cash flow statement can be defined as a statement
which summarizes sources of cash inflows and uses of cash outflows of a firm during a
particular period of time, say a month or a year. Such a statement can be prepaid from the
data made available from comparative balance sheet, profit and loss account and additional
information. This statement reports cash receipts and payments classified according to
entities major activities operating, investing and financing during the period a format that
reconciles the begging and ending cash balances. It reports a net cash inflow or net cash
outflow for each activity and for the overall business. It also reports from where cash has
come and how it has been spent.

Usefulness of Cash Flow Statement

Cash Flow Statement is very useful to the management for short term
planning due to the following reasons:-

(i) Predict future cash flows. This statement is often use as an

indicator of the amount, timing and certainty of future cash flows on the basis of
what happened in the past. This approach is better than accrual basis data
presented by profit and loss account and balance sheet.

(ii) Determine the ability to pay dividends and other commitments.

This statement indicates the sources and uses of cash under operating, investing
and financing activities, helps share holders to know whether the business can
make the payment of amount of dividends on their investments in shares and
creditors to receive interest and principal amount in time.
 (iii) Show the relationship of net income to changes in the business
cash. Generally there is direct relation between net income and cash. I net income
leads to increase in cash and wise versa. But there may be a situation where a
company’s net income is high but decrease in cash balance and increase in cash
balance when net income is low. Every user is interested to know the reasons or
difference between the net income and net cash provided by operations. The net
income generally tells the progress of the business while cash flow relates to the
liquidity of business. The uses or helped to assess the reliability of net profit with
the help of this statement.

(iv) Efficiency in Cash Management. This statement is very useful to

the management in evaluating financial policies and cash position. It will help the
management to make the reliable cash flow projections for the immediate future
and will tell surplus or deficiency of cash so that management may be able to make
plan for investment of surplus cash or to tap the sources where from the deficiency
is to be met. Thus it is an important financial tool for the management as it helps
in the efficient cash management.

(v) Discloses Movement of Cash. Previous year cash flow statement

when compared with the budget of that year will indicate as to what extent the
resources of the enterprise were raised and applied. Actual results when compared
with the original forecast may highlight the trend of the movement of cash that
may otherwise remain undetected,

(vi) Discloses Success or Failure of Cash Planning.

A Comparison of projected Cash flow Statement with the actual Cash flow
Statement will reveal the success or failure of cash planning and incase of failure,
necessary remedial steps can be taken to improve the position. It also provides
better measure for inter period and inter firm comparison.
 (vii) Evaluate Management Decision. This statement, by providing
information relating to companies investing and financial activities, gives the
investors and creditors about cash flow information which help them evaluate
management decisions.

(viii) Enhances the Comparability of Report. It enhance the

comparability of the reporting of operating performances by different enterprises,
because it eliminates the effect of using different accounting treatments for the
same transactions and events.

Limitations of Cash Flow Statement

Inspite of various uses of Cash Flow Statement, it has the following

limitations:

1. Cash Flow Statement gives the main items of inflow and outflow of
cash only and does not show the liquidity position of the company.

2. This statement is not a substitute of income statement which shows

both cash and non cash items. Therefore, net cash flow does not necessarily mean
net income of the business.

Definitions

The following terms are used in this Statement with the meanings specified:

(i) Cash comprises cash on hand and demand deposits with banks.

(ii) Cash equivalents are short term, highly liquid investments that are
readily convertible into known amounts of cash and which are subject to an
insignificant risk of changes in value.
 (iii) Cash flows are inflows and outflows of cash and cash equivalents.

(iv) Operating activities are the principal revenue-producing activities of

the enterprise and other activities that are not investing or financing activities.

(v) Investing activities are the acquisition and disposal of long-term assets
and other investments not included in cash equivalents.

(vi) Financing activities are activities that result in changes in the size and
composition of the owners’ capital (including preference share capital in the case of a
company) and borrowings of the enterprise.

(vii) Cash and Cash Equivalents Cash equivalents are held for the
purpose of meeting short-term cash commitments rather than for investment or
other purposes. For an investment to qualify as a cash equivalent, it must be
readily convertible to a known amount of cash and be subject to an insignificant
risk of changes in value. Therefore, an investment normally qualifies as a cash
equivalent only when it has a short maturity of, say, three months or less from the
date of acquisition. Investments in shares are excluded from cash equivalents
unless they are, in substance, cash equivalents; for example, preference shares of a
company acquired shortly before their specified redemption date (provided there is
only an insignificant risk of failure of the company to repay the amount at
maturity).Cash flows exclude movements between items that constitute cash or
cash equivalents because these components are part of the cash management of an
enterprise rather than part of its operating, investing and financing activities. Cash
management includes the investment of excess cash in cash equivalents.
CLASSIFICATION OF CASH FLOWS

(i) Cash Flows from Operating Activities

The amount of cash flows arising from operating activities is a key indicator of
the extent to which the operations of the enterprise have generated sufficient cash flows to
maintain the operating capability of the enterprise, pay dividends, repay loans and make
new investments without recourse to external sources of financing. Information about
the specific components of historical operating cash flows is useful, in conjunction
with other information, in forecasting future operating cash flows.

Cash flows from operating activities are primarily derived from the principal
revenue-producing activities of the enterprise. Therefore, they generally result
from the transactions and other events that enter into the determination of net profit or
loss. Examples of cash flows from operating activities are:

(a) Cash receipts from the sale of goods and the rendering of services;

(b) Cash receipts from royalties, fees, commissions and other revenue;

(c) Cash payments to suppliers for goods and services;

(d) Cash payments to and on behalf of employees;

(e) Cash receipts and cash payments of an insurance enterprise for premiums
and claims, annuities and other policy benefits;

(f) Cash payments or refunds of income taxes unless they can be specifically
identified with financing and investing activities; and

(g) Cash receipts and payments relating to futures contracts, forward contracts,
option contracts and swap contracts when the contracts are held for dealing or trading
purposes.

Some transactions, such as the sale of an item of plant, may give rise to a gain or
loss which is included in the determination of net profit or loss. However, the cash flows
relating to such transactions are cash flows from investing activities.

An enterprise may hold securities and loans for dealing or trading purposes, in
which case they are similar to inventory acquired specifically for resale. Therefore, cash
flows arising from the purchase and sale of dealing or trading securities are classified as
operating activities. Similarly, cash advances and loans made by financial enterprises are
usually classified as operating activities since they relate to the main revenue-producing
activity of that enterprise.

(ii) Cash Flows from Investing Activities

The separate disclosure of cash flows arising from investing activities is important
because the cash flows represent the extent to which expenditures have been made for
resources intended to generate future income and cash flows. Examples of cash flows
arising from investing activities are:

(a) Cash payments to acquire fixed assets (including intangibles). These

payments include those relating to capitalized research and development costs and self-
constructed fixed assets;

(b) Cash receipts from disposal of fixed assets (including intangibles);

(c) Cash payments to acquire shares, warrants or debt instruments of other

enterprises and interests in joint ventures (other than payments for those instruments
considered to be cash equivalents and those held for dealing or trading purposes);

(d) Cash receipts from disposal of shares, warrants or debt instruments of

other enterprises and interests in joint ventures (other than receipts from those
instruments considered to be cash equivalents and those held for dealing or trading
purposes);

(e) Cash advances and loans made to third parties (other than advances and
loans made by a financial enterprise);

(f) Cash receipts from the repayment of advances and loans made to third
parties (other than advances and loans of a financial enterprise);

(g) Cash payments for futures contracts, forward contracts, option contracts
and swap contracts except when the contracts are held for dealing or trading purposes, or
the payments are classified as financing activities; and

(h) Cash receipts from futures contracts, forward contracts, option contracts
and swap contracts except when the contracts are held for dealing or trading purposes, or
the receipts are classified as financing activities.

When a contract is accounted for as a hedge of an identifiable position, the cash flows
of the contract are classified in the same manner as the cash flows of the position being
hedged.

Financing Activities

The separate disclosure of cash flows arising from financing activities is important
because it is useful in predicting claims on future cash flows by providers of funds (both
capital and borrowings) to the enterprise. Examples of cash flows arising from
financing activities are:

(a) Cash proceeds from issuing shares or other similar instruments;

 (b) Cash proceeds from issuing debentures, loans, notes, bonds, and other
short or long term borrowings;
(c) Cash repayments of amounts borrowed.
(d) Cash payments to redeem preference shares and

(e) Payment of dividend.

Preparation 0f cash flow statement

An organization should prepare a cash flow statement according to according to

Account standard-3. The following basic information are required for the preparation for
the cash flow statement:
(1) Comparative Balance Sheets. Balance sheets at the beginning and at the end of
the accounting period are required to indicate to indicate the amount of changes
that have taken place in assets and liabilities and capital.
(2) Profit and loss account. This account of the current period enables to determine
the amount of cash provided by or used in operating activities during the
accounting period after making adjustments for non cash current assets and
current liabilities.
(3) Additional data. In addition to the above statements, additional data are collected
to determine how cash has been provided or used e.g. sale or purchase of asset for
cash.

This statement is prepared in three stages as given below :

1. Net profit before taxation and extra ordinary items.
2. Cash flows from operating, investing and financing activities.
3. Cash flow statement
These are discussed one by one
1. Net profit before taxation and extraordinary items. This will not be equal to the net
profit as reported in the profit and loss account. It is so because of taxation and certain
non operating items (e.g., loss or profit on sale of fixed assets, dividend received or paid,
amount transferred to general, provision for taxation, fictitious assets written of f etc.)
charged to the profit and loss account . Tax paid and non-operating items are adjusted to
the figure of profit or loss in order to get the net profit before taxation and extraordinary
items.
2. Cash flows from operating, investing and financing activities. Net profit before
taxation and extraordinary items is further adjusted with reference to depreciation in
order to get the figure of operating profit before working capital changes. This figure is
further adjusted for changes in current assets (except cash)/bank balance), current
liabilities and tax paid deducted to get the amount of net cash provided or used by
operating activities. All the increases in current assets except cash and decreases in
current liabilities decrease cash. It is so because increase in debtors takes place as current
sales are greater than cash collections; inventories increase when the current cost of
goods purchased is more than the current cost of goods sold leading to reduction in cash.
Increase in prepaid expenses reduces cash from operations because more cash is paid
than is required for their current services. Likewise, decrease in current liabilities
reduces cash from operations because decrease in current liabilities takes place when they
are paid in cash. Similarly all decreases in current assets except cash and increases in
current liabilities increase cash from operations. Creditors would increase because current
purchases are more than the cash paid to them during the current period. Decrease in
prepaid expenses indicates that less payment has been made for services than are
currently used, i.e., some cash has been saved causing an increase in cash from
operations.
Changes in fixed assets and fixed liabilities have not been adjusted as these are
shown separately in the cash flow statement. It is so because current assets (i.e., debtors
as a result of credit sales, inventories as a result of purchases and sales and prepaid
expenses caused by operating expenses) and current liabilities (i.e., creditors because of
credit purchases and outstanding expenses caused by non-payment of some of the
expenses of the current period) are directly related to operations.
Reporting Cash Flows from Operating Activities.

An enterprise should report cash flows from operating activities using either:

(a) the direct method, whereby major classes of gross cash receipts and gross cash
payments are disclosed; or

(b) the indirect method, whereby net profit or loss is adjusted for the effects of
transactions of a non-cash nature, any deferrals or accruals of past or future
operating cash receipts or payments, and items of income or expense
associated with investing or financing cash flows.

The direct method provides information which may be useful in estimating

future cash flows and which is not available under the indirect method and is,
therefore, considered more appropriate than the indirect method. Under the direct
method, information about major classes of gross cash receipts and gross cash
payments may be obtained either:

(a) from the accounting records of the enterprise; or

(b) by adjusting sales, cost of sales (interest and similar income and interest expense
and similar charges for a financial enterprise) and other items in the
statement of profit and loss for:

i) changes during the period in inventories and operating receivables and

payables;

ii) other non-cash items; and

iii) other items for which the cash effects are investing or financing cash
flows

Under the indirect method, the net cash flow from operating activities is
determined by adjusting net profit or loss for the effects of:

(a) changes during the period in inventories and operating receivables and payables;
 (b) non-cash items such as depreciation, provisions, deferred taxes, and unrealized
foreign exchange gains and losses; and

(c) all other items for which the cash effects are investing or financing cash flows.

Alternatively, the net cash flow from operating activities may be presented under the
indirect method by showing the operating revenues and expenses excluding non-cash
items disclosed in the statement of profit and loss and the changes during the period in
inventories and operating receivables and payables.

Reporting Cash Flows from Investing and Financing Activities

An enterprise should report separately major classes of gross cash receipts and
gross cash payments arising from investing and financing activities, except to the extent
that cash flows described in paragraphs 22 and 24 are reported on a net basis.

Reporting Cash Flows on a Net Basis

Cash flows arising from the following operating, investing or financing

activities may be reported on a net basis:

(a) cash receipts and payments on behalf of customers when the cash flows reflect
the activities of the customer rather than those of the enterprise; and

(b) cash receipts and payments for items in which the turnover is quick, the
amounts are large, and the maturities are short.

Examples of cash receipts and payments referred to in paragraph 22(a) are:

(a) the acceptance and repayment of demand deposits by a bank;

(b) funds held for customers by an investment enterprise; and

c) rents collected on behalf of, and paid over to, the owners of properties
Examples of cash receipts and payments referred to in paragraph 22(b) are advances made
for, and the repayments of:

(a) principal amounts relating to credit card customers;

(b) the purchase and sale of investments; and

(c) other short-term borrowings, for example, those which have a maturity period
of three months or less.

Cash flows arising from each of the following activities of a financial enterprise may be
reported on a net basis:

(a) cash receipts and payments for the acceptance and repayment of deposits with
a fixed maturity date;

(b) the placement of deposits with and withdrawal of deposits from other financial
enterprises; and
cash advances and loans made to customers and the repayment of those advances and
loans

Special items

1 Foreign Currency Cash Flows

Cash flows arising from transactions in a foreign currency should be recorded in an

enterprise’s reporting currency by applying to the foreign currency amount the exchange rate
between the reporting currency and the foreign currency at the date of the cash flow. A
rate that approximates the actual rate may be used if the result is substantially the same as
would arise if the rates at the dates of the cash flows were used. The effect of changes in
exchange rates on cash and cash equivalents held in a foreign currency should be reported as
a separate part of the reconciliation of the changes in cash and cash equivalents during the
period.
Cash flows denominated in foreign currency are reported in a manner
consistent with Accounting Standard (AS) 11, Accounting for the Effects of
Changes in Foreign Exchange Rates4. This permits the use of an exchange rate that
approximates the actual rate. For example, a weighted average exchange rate for a period
may be used for recording foreign currency transactions.

Unrealized gains and losses arising from changes in foreign exchange rates are not
cash flows. However, the effect of exchange rate changes on cash and cash equivalents
held or due in a foreign currency is reported in the cash flow statement in order to
reconcile cash and cash equivalents at the beginning and the end of the period. This
amount is presented separately from cash flows from operating, investing and
financing activities and includes the differences, if any, had those cash flows been
reported at the end-of-period exchange rates

2 Extraordinary Items

The cash flows associated with extraordinary items should be classified as arising from
operating, investing or financing activities as appropriate and separately disclosed.

The cash flows associated with extraordinary items are disclosed separately as
arising from operating, investing or financing activities in the cash flow statement, to
enable users to understand their nature and effect on the present and future cash flows of
the enterprise. These disclosures are in addition to the separate disclosures of the nature and
amount of extraordinary items required by Accounting Standard (AS) 5, Net Profit or
Loss for the Period, Prior Period Items and Changes in Accounting Policies

3 Interest and Dividends

Cash flows from interest and dividends received and paid should each be disclosed
separately. Cash flows arising from interest paid and interest and dividends received in
the case of a financial enterprise should be classified as cash flows arising from
operating activities. In the case of other enterprises, cash flows arising from interest paid
should be classified as cash flows from financing activities while interest and
dividends received should be classified as cash flows from investing activities.
Dividends paid should be classified as cash flows from financing activities.

The total amount of interest paid during the period is disclosed in the cash flow
statement whether it has been recognized as an expense in the statement of profit and
loss or capitalized in accordance with Accounting Standard (AS) 10, Accounting for
Fixed Assets.

Interest paid and interest and dividends received are usually classified as
operating cash flows for a financial enterprise. However, there is no consensus
on the classification of these cash flows for other enterprises. Some argue that
interest paid and interest and dividends received may be classified as operating
cash flows because they enter into the determination of net profit or loss.
However, it is more appropriate that interest paid and interest and dividends
received are classified as financing cash flows and investing cash flows
respectively, because they are cost of obtaining financial resources or returns on
investments.

Some argue that dividends paid may be classified as a component of cash flows from
operating activities in order to assist users to determine the ability of an enterprise to pay
dividends out of operating cash flows. However, it is considered more appropriate that
dividends paid should be classified as cash flows from financing activities because they
are cost of obtaining financial resources.

4 Taxes on Income

Cash flows arising from taxes on income should be separately disclosed and
should be classified as cash flows from operating activities unless they can be specifically
identified with financing and investing activities.

Taxes on income arise on transactions that give rise to cash flows that are classified as
operating, investing or financing activities in a cash flow statement. While tax expense
may be readily identifiable with investing or financing activities, the related tax cash
flows are often impracticable to identify and may arise in a different period from the
cash flows of the underlying transactions. Therefore, taxes paid are usually classified as
cash flows from operating activities. However, when it is practicable to identify the tax
cash flow with an individual transaction that gives rise to cash flows that are classified as
investing or financing activities, the tax cash flow is classified as an investing or
financing activity as appropriate. When tax cash flow are allocated over more than one
class of activity, the total amount of taxes paid is disclosed

5. Investments in Subsidiaries, Associates and Joint Ventures

When accounting for an investment in an associate or a subsidiary or a joint

venture, an investor restricts its reporting in the cash flow statement to the cash flows
between itself and the investee/joint venture, for example, cash flows relating to
dividends and advances.

6 Acquisitions and Disposals of Subsidiaries and Other Business Units

The aggregate cash flows arising from acquisitions and from disposals of
subsidiaries or other business units should be presented separately and classified as
investing activities.

An enterprise should disclose, in aggregate, in respect of both acquisition and

disposal of subsidiaries or other business units during the period each of the following:

(a) the total purchase or disposal consideration; and

(b) the portion of the purchase or disposal consideration discharged by means of

cash and cash equivalents.

The separate presentation of the cash flow effects of acquisitions and disposals of
subsidiaries and other business units as single line items helps to distinguish those cash
flows from other cash flows. The cash flow effects of disposals are not deducted from
those of acquisitions.
 7 Non-cash Transactions

Investing and financing transactions that do not require the use of cash or cash
equivalents should be excluded from a cash flow statement. Such transactions should be
disclosed elsewhere in the financial statements in a way that provides all the relevant
information about these investing and financing activities

Many investing and financing activities do not have a direct impact on current cash flows
although they do affect the capital and asset structure of an enterprise. The exclusion of
non-cash transactions from the cash flow statement is consistent with the objective of a
cash flow statement as these items do not involve cash flows in the current period.
Examples of non-cash transactions are:

(a) the acquisition of assets by assuming directly related liabilities;

(b) the acquisition of an enterprise by means of issue of shares; and

(c) the conversion of debt to equity.

Components of Cash and Cash Equivalents

An enterprise should disclose the components of cash and cash equivalents

and should present a reconciliation of the amounts in its cash flow statement with
the equivalent items reported in the balance sheet.

In view of the variety of cash management practices, an enterprise discloses the

policy which it adopts in determining the composition of cash and cash equivalents.

The effect of any change in the policy for determining components of cash and
cash equivalents is reported in accordance with Accounting Standard (AS) 5, Net
Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.
Other Disclosures

An enterprise should disclose, together with a commentary by management, the

amount of significant cash and cash equivalent balances held by the enterprise that are not
available for use by it.

There are various circumstances in which cash and cash equivalent balances held
by an enterprise are not available for use by it. Examples include cash and cash
equivalent balances held by a branch of the enterprise that operates in a country where
exchange controls or other legal restrictions apply as a result of which the balances are
not available for use by the enterprise.

Additional information may be relevant to users in understanding the financial

position and liquidity of an enterprise. Disclosure of this information, together
with a commentary by management, is encouraged and may include:

(a) the amount of undrawn borrowing facilities that may be available for future
operating activities and to settle capital commitments, indicating any
restrictions on the use of these facilities; and

(b) the aggregate amount of cash flows that represent increases in operating
capacity separately from those cash flows that are required to maintain
operating capacity.

The separate disclosure of cash flows that represent increases in operating

capacity and cash flows that are required to maintain operating capacity is useful in
enabling the user to determine whether the enterprise is investing adequately in the
maintenance of its operating capacity. An enterprise that does not invest adequately in the
maintenance of its operating capacity may be prejudicing future profitability for the sake
of current liquidity and distributions to owners.
COMPANY PROFILE
 COMPANY PROFILE

ICICI Bank (Industrial Credit and Investment Corporation of India) is

an Indian multinational banking and financial services company headquartered
in Mumbai, Maharashtra, India, with its registered office in Vadodara. In 2014, it was the
second largest bank in India in terms of assets and third in term of market capitalisation.
It offers a wide range of banking products and financial services for corporate and retail
customers through a variety of delivery channels and specialised subsidiaries in the areas
of investment banking, life, non-life insurance, venture capital and asset management.
The bank has a network of 4,450 branches and 14,404 ATMs in India, and has a presence
in 19 countries including India.

The bank has subsidiaries in the United Kingdom and Canada; branches in United
States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar, Oman, Dubai International
Finance Centre, China and South Africa;  and representative offices in United Arab
Emirates, Bangladesh, Malaysia and Indonesia. The company's UK subsidiary has also
established branches in Belgium and Germany.

HISTORY
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian
financial institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI
Bank was reduced to 46% through a public offering of shares in India in fiscal 1998, an
equity offering in the form of ADRs listed on the NYSE in fiscal 2000, ICICI Bank's
acquisition of Bank of Madura Limited in an all-stock amalgamation in fiscal 2001, and
secondary market sales by ICICI to institutional investors in fiscal 2001 and fiscal 2002.
ICICI was formed in 1955 at the initiative of the World Bank, the Government of India
and representatives of Indian industry. The principal objective was to create a
development financial institution for providing medium-term and long-term project
financing to Indian businesses.
 
In the 1990s, ICICI transformed its business from a development financial
institution offering only project finance to a diversified financial services group offering a
wide variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and the
first bank or financial institution from non-Japan Asia to be listed on the NYSE.
 
After consideration of various corporate structuring alternatives in the context of the
emerging competitive scenario in the Indian banking industry, and the move towards
universal banking, the managements of ICICI and ICICI Bank formed the view that the
merger of ICICI with ICICI Bank would be the optimal strategic alternative for both
entities, and would create the optimal legal structure for the ICICI group's universal
banking strategy. The merger would enhance value for ICICI shareholders through the
merged entity's access to low-cost deposits, greater opportunities for earning fee-based
income and the ability to participate in the payments system and provide transaction-
banking services. The merger would enhance value for ICICI Bank shareholders through
a large capital base and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business segments, higher market
share in various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries.
 
In October 2001, the Boards of Directors of ICICI and ICICI Bank approved the merger
of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI Personal
Financial Services Limited and ICICI Capital Services Limited, with ICICI Bank. The
merger was approved by shareholders of ICICI and ICICI Bank in January 2002, by the
High Court of Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature
at Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger, the
ICICI group's financing and banking operations, both wholesale and retail, have been
integrated in a single entity.
ACQUISITIONS :-

 1996: SCICI Ltd. A diversified financial institution with headquarters in Mumbai[

 1997: ITC Classic Finance. incorporated in 1986, ITC Classic was a non-bank
financial firm that engaged in hire, purchase, and leasing operations. At the time of
being acquired, ITC Classic had eight offices, 26 outlets, and 700 brokers.
 1998: Anagram(ENAGRAM) Finance. Anagram had built up a network of some
50 branches in Gujarat, Rajasthan, and Maharashtra that were primarily engaged in
retail financing of cars and trucks. It also had some 250,000 depositors.
 2001: Bank of Madurai
 2002: The Darjeeling and Shimla branches of Grindlays Bank
 2005: Investitsionno-Kreditny Bank (IKB), a Russian bank 
 2007: Sangli Bank. Sangli Bank was a private sector unlisted bank, founded in
1916, and 30% owned by the Bahte family. Its headquarters were in Sangli
inMaharashtra, and it had 198 branches. It had 158 in Maharashtra and 31
in Karnataka, and others in Gujarat, Andhra Pradesh, Tamil Nadu, Goa, and Delhi. Its
branches were relatively evenly split between metropolitan areas and rural or semi-
urban areas.
 2010: The Bank of Rajasthan (BOR) was acquired by the ICICI Bank in 2010
for ₹30 billion (US$450 million). RBI was critical of BOR's promoters not reducing
their holdings in the company. BOR has since been merged with ICICI Bank.

Products & Services 

Personal Banking
 Deposits
 Loans
 Cards
 Investments
 Insurance
 Demat Services
 Wealth Management
NRI Banking
 Money Transfer
 Bank Accounts
 Investments
 Property Solutions
 Insurance
 Loans
Business Banking
 Corporate Net Banking
 Cash Management
 Trade Services
 FXOnline
 SME Services
 Online Taxes
 Custodial Services
OBJECTIVES OF THE STUDY
 OBJECTIVES OF THE STUDY

 To analyze the Cash flow statement in ICICI.

 To study the cash management of ICICI.
 To know the sources of Cash inflow and cash outlets.
 To study the cash flow statement for investors.
 To study the Cash flow from Operating Activities.
SCOPE OF THE STUDY
 SCOPE OF THE STUDY

 Time: The time allotted for the project has been only around 2 months.
 The study could be done only for the past 5 years. (2015 to 2019)
 Finance: Due to limited financial resources as in depth research could not be
undertaken.
 The face value of the figures given in the balance sheet was used for the project.
HYPOTHESIS
 HYPOTHESIS

H0 :- There is no significant difference between the trends of Investing activities of the

ICICI.
H1 :- There is significant difference between the trends of Operating activities of the
ICICI.
RESEARCH METHODOLOGY
 RESEARCH METHODOLOGY

1} RESEARCH METHODOLOGY
Research methodology is an important tool in any research work. It acts as
guideline and road in completion of research. It is scientific search for data and
information on as particular topic research is search for knowledge.
Research methodology is a way to systematically solve the research problem. It
may be understood as a science of studying now research is done systematically. In that
various steps, those are generally adopted by a researcher in studying his problem along
with the logic behind them. It is important for research to know not only the research
method but also know methodology.
DEFINITION :-

“The procedures by which researcher goes about their work of describing, explaining
and predicting phenomenon are called methodology. Methods comprise the procedures
used for generating, collecting and evaluating data. All this means that it is necessary for
the researcher to design his methodology for his problem as the same may differ from
problem to problem”.
TYPES OF RESEARCH
Primary Research Vs Secondary Research
Conducting primary research occurs when a company is gathering
information directly for themselves. This type of research is often conducted through the
medium of questionnaires, observations and interviews. This method can often be very
useful to companies because the results are specific to that particular business. The
findings can also be regarded as being reliable and accurate because the company have
conducted the research independently. 
Secondary research differs from primary research because it involves a
company using research that has been conducted by someone else. For example, an
organisation may use findings through a relevant journal, website or newspaper article. 
Basic / Fundamental Research Vs Applied Research
Basic research whether in business or any other field has as its basic goal, to
expand one's knowledge. Basic questions such as, How can we increase production and
save money at the same time, might be a question for business. If, we increase
production, we also increase the cost of payroll by hiring additional production
employees. How can this save money? Curiosity lies at the heart of all business and it is
this curiosity,
Applied research is solutions designed from basic research information , aimed at
the solution of business problems within the company. The goal of applied research is
change for the better, improvements in business management and practice aimed at
improving the human condition.
 Qualitative Research Vs Quantitative Research
Qualitative research, is merely explained in words and descriptions of what the
studies found. For example, if the researcher found that they found the people in debt to
be very funny, care-free, friendly individuals, Quantitative research is of course, the
complete opposite, and again, the clue is in the name. It is called quantitative research
because it works with numbers, quantities and statistics.
DATA COLLECTION
 DATA COLLECTION

Data taken for the study purpose fall in two category.

 Primary Data
 Secondary Data

PRIMARY DATA
For this study primary data are collected by the first time through
• Observation

• Interview
SECONDARY DATA
For this study Secondary data are collected by the different books, journals,
documents and reports. In this research I have collected primary data from the company
finance manager.

THROUGH INTERVIEW
It is done to know internal view of a person. It is a process of data collection
which includes face to face interaction and secondary data has been used a lot in this
research as all the interpretations have been done with the help of yearly reports.
DATA ANALYSIS & INTERPRETATION
 DATA ANALYSIS & INTERPRETATION

NET CASH FLOW

Year Increase/(decrease) in Corore

2019 6974.09
2018 121.57
2017 5467.56
2016 12393.75
2015 11056.83

1056.83

6974.09

2019
2018
2017
12393.75 2016
121.57 2015

5467.56

INTERPRETATION :-
Net cash & cash equivalents is the total of the means A is known as operating
activity, B is known as investing activity & C is known as financing activity. Cash and
cash equivalents consist of cash on hand and balance with banks, and investments in
money-market instruments. Cash and cash equivalents included in the cash flow
statement. Net cash balance in Year 2015, 2016, 2017, 2018 is increase and Year 2019
cash balance is decrease because investing activity decrease.
OPERATING ACTIVITIES
The amount of cash flows arising from operating activities is a key indicator of the extent
to which the operations of the enterprise have generated sufficient cash flows to maintain
the operating capability of the enterprise, pay dividends, repay loans and make new
investments without recourse to external sources of financing. Cash flows from operating
activities are primarily derived from the principal revenue-producing activity of the
enterprises.

NET CASH FLOW FROM ‘OPERATING ACTIVITIES’ [A]

Year Increase/(decrease) in Crore

2019 37566.92
2018 -46693.30
2017 34192.28
2016 -15971.85
2015 -12922.02

-12922.02

37566.92
-15971.85
2019
2018
2017
2016
34192.28
2015

-46693.3

Analysis:
The amount of cash flows arising from operating activities is a key indicator of
the extent to which the operations of the company have generated sufficient cash flows to
maintain the operating capacity. An enterprise may hold securities and loans for dealing.
The cash flow from activity increase in the year 2015, 2016 & then deceases 2017, 2018,
2019.
Investing activities [B]

The separate disclosure of cash flows arising from investing activities is important
because the cash flow represent the extent to which expenditure has been made for
resources intended to generate future income and cash flows.

NET CASH FLOW FROM INVESTING ACTIVITIES [B]

Year Increase/(decrease) in Corore
2019 -18736.52
2018 -10500.31
2017 -12630.39
2016 -5435.51
2015 -7889.65

-7889.65

-18736.52
-5435.51
2019
2018
2017
2016
2015
-12630.39

-10500.31
Analysis:-
The net cash flow from investing activity show the graph decrease year 2015,
2016, 2017 & then increase the graph year 2018, 2019. Because company cash
investing to addition fixed assets.

FINANCING ACTIVITIES [C]

The separate discloser of cash flows arising from financing activities is

important because it is useful in predicting claims on future cash flows by providers
of funds (both capital and barrowings) to the enterprise.

NET CASH FLOW FROM ‘FINANCING ACTIVITIES’[C]

Year Increase/(decrease) in Corore

2019 23749.74
2018 -6801.29
2017 16930.74
2016 -2773.59
2015 7860.34

7860.34

-2773.59

23749.74 2019
2018
2017
2016
2015
16930.74

-6801.29
Analysis:-
The net cash flow from financing activities shown in year 2015, 2016,
2017, decrease and 2018, 2019 increase.
CONCLUSION
 CONCLUSION

 The current cash position of the company is satisfactory as well future cash
position of the company is very strong as it has almost constant cash balance during
last few years.

 The company short-term financial decisions are also satisfied as they are
taking the unsecured loan and making proper utilization of the fund.

 The does not have poor cash position as every year company earns profits &
applications of cash made by the firm is adequate.

 The utilization of cash is adequate as whenever company found excess cash

they are utilizing in expansion activity & whenever they required cash, it generated
through unsecured loan etc.
SUGGESTIONS
 SUGGESTIONS

 Net cash & Equivalents position is good, but the last Year 2018-19.

 The company should minimize its current asset and use them for production
purpose.

 Company should keep optimal cash balance with it so can make payments of
its liquid liabilities as early as possible and will not get the harms of
unproductively of the cash.
BIBLIOGRAPHY
 BIBLIOGRAPHY

BOOKS

 S.N. Maheshwari, Financial management, Eleventh Edition 2006, Sultan Chaqnd

& Sons, Educational Publishers. New Delhi.
 I.M Pandey, Financial management, Ninth Edition, Vikas publishing house pvt
Ltd.
 M.Y Khan- P.K Jain, Management Accounting, Third edition, Tata Mc Graw-Hill
Publishing co. Ltd.
 B.L. Gupta, Management of Liquidity and Profitability, Arihant Publishing
House, Jaipur.

Websites:-
 www.slidershare.com
 www.icicibank.com
ANNEXURE
 ANNEXURE

ICIC
I Previous Years »
Bank
Cash Flow ------------------- in Rs. Cr. -------------------
  Mar '19 Mar '18 Mar '17 Mar '16 Mar '15

  12 mths 12 mths 12 mths 12 mths 12 mths

Net Profit Before Tax 6974.09 121.57 5467.56 12393.75 11056.83

Net Cash From Operating - - -
37566.92 34192.28
Activities 46693.30 15971.85 12922.02
Net Cash (used in)/from - - -
-5435.51 -7989.65
Investing Activities 18736.52 10500.31 12630.39
Net Cash (used in)/from
4931.34 50400.78 -4628.87 18671.58 28846.00
Financing Activities
Net (decrease)/increase In
23749.74 -6801.29 16930.74 -2773.59 7860.34
Cash and Cash Equivalents
Opening Cash & Cash
43454.89 50256.18 33325.44 36099.03 28238.69
Equivalents
Closing Cash & Cash
67204.64 43454.89 50256.18 33325.44 36099.03
Equivalents