Acknowledgement

I am sincerely grateful to those people who made their way out in helping me to accomplish my project. At beginning I was very skeptical about how to lead my project through was helped unanimously by many persons throughout my project days. At first, my sincere thanks to Mrs. Devyani Ingale , SIOM ,Pune. I take this opportunity as privilege to articulate my deep sense of gratefulness to the Managing Director Mr. Vijay M. Gandhi, and the staff of the M-Tech Innovations Ltd., Pune for their timely help and positive encouragement. My sincere gratitude to Mr. Avinash Saraf, Account/Finance Head, M-Tech Innovation Ltd for his training that helped me in learning much about the Finance methodology. Also I am grateful to Mr.Arvind Lande for his overall support throughout my training program. Lastly I would like to thank my institution management for their effort in providing us this opportunity to get a firsthand experience of corporate world. I am also grateful to my friend Mr. Satish Chaudhari who gave me reference to get a chance to work in M-Tech Innovation Ltd. Place: Pune Date: Pradeep P. Sonawane.

CHAPTER I Introduction
1.1.1 Introduction to Study:
The ultimate objective of financial statements is to provide maximum detailed information about the organization to the public. The financial statements like Profit & Loss A/C and Balance Sheet fulfill this objective very well. The Profit & Loss A/c shows the change in the owners equity as a result of productive and trade activities during the period. The Balance Sheet, on the other hand, portrays the financial position of the undertaking, the asset side indicating the deployment of resources in various assets and the liability side showing manner in which these resources were obtained. The information supplied by these statements sometimes may not be adequate. In some cases the Profit & Loss A/c of a firm may reveal that it has earned sufficient profits and the Balance Sheet may indicate sound solvency position but even then the concern may not be able to distribute the profit in cash or carry out its normal operations due to shortage of cash. Under such circumstances, the owner or manager of the concern, unless he is wellversed in accounting, will not be able to understand the exact reasons for this cash shortage despite the huge profit and sound financial strength. In such a situation, tools of financial analysis called Funds Flow Analysis & Cash Flow Analysis reveals the exact movement of funds and cash and explains the situation well.

1.2 Objectives of the Study:

The purpose of preparing Funds flow and Cash Flow is to determine shortage or excesses in cash. To study the existing pattern of Funds flow and Cash Flow management in the organization. To reveal the importance of Funds flow and Cash Flow to the organization. Understand the types of transactions that result in cash flows from operating, investing & financing activities. To know the financial soundness of the company.

1.4 Scope of Study:

The scope of study is concerned with1. Industrial Overview. 2. Current status of the industry with special emphasis on electronic manufacturing industry 3. Study includes Analysis of Financial Statements through Funds Flow & Cash Flow. 4. Study is based on data collected through primary & secondary modes of data collection.
5. Concerned study is undertaken in M-tech Innovation Ltd, Pune for the period of 60

Days.

CHAPTER II Company Profile

We at M-Tech believe that Product Development and Innovation, holds key for our success. From being a manufacturer of Labels, Dials and Stickers two decades back, we are today one of the leading manufacturer in the country for Membrane Switches. An ultra-modern card manufacturing facility was commissioned in 1997 for Security Cards manufacturing. Today we are able to offer our customers Smart Cards, Reader and Card based applications. Along with that we have diversified into Health Sector. We have full fledged Healthcare Division which caters to the segment of Oral Dental Care. It is thus purely our people, the technology and our production which has been the key behind our success. We are recipient of several National and International Quality Awards. That itself speaks of our capability to deliver quality products. To speak of we are having an impressive list of multinational and domestic client who prefer to keep us their partners in quality, price and delivery. Nature Of Business:- Supplier, Manufacturer. Number of Employee:- 101 to 500 People. Turnover:- US$ 1-10 Million (Rs.4-40 Crore Approx.) Major Markets:- Indian Subcontinent, East Asia, Middle East And South East Asia. Address:- P-1/2, Rajiv Gandhi Infotech Park, Phase I, Near Cognizant, Hinjewadi, Pune, Maharashtra-411057, India.

Mission

Growing with People & Technology.

Vision

Towards Global Corporation Offering best Value To Our Stakeholders.

Quality Policy
We are committed to manufacture world class products by using latest technology with ecofriendly and reliable processes. We shall achieve customer satisfaction by offering high standards of service and being responsive to their changing needs and expectations. Our focus shall be on continual improvement, creativity and innovation through the involvement and development of our human resources by upgrading skills.

History Of Company:
1988 : Company was set up in 1988 as M/s. Mahavir Printers, for the printing of Letter Heads and Visiting Cards. 1990 : Manufacturing of Plastic Labels for the Electronic Industry 1993 : Separate Division for Membrane Switches and Panels 1995 : Introduction of polyurethane coated Emblems logos 1997 : Setting up of the Security Cards Division, manufacturing PVC cards for varied applications. 1999 : A major product innovation in the form of for flexible speaker grills for the TV Industry and Prepaid Scratch Cards for mobile phones. 2000 : Chip / RFID cards, Readers including complete applications for Smart Cards based applications with inhouse R & D facilities.. 2002 : Healthcare Division opened with products under brand name of "Dr. Flosser" the same is a popular in the new generation product in Dental Care. 2002 : Started the production of Inmould components. 2003 : Launches Herboral product 2004 : Launches "Hexoral" Allopathic Mouthwash. 2005 : Manufacturing & Supply of RFID Tags 2006 : Lanuches Dental Material - Dr. Alginate, Dr. Sparkles, Dr. Dentoseal & Dr. Dentofill 2010 : Visa Certification.

Address:
Corporate office : (Unit - II) P - 1/2 Rajiv Gandhi Infotech Park, PHASE- I Near Cognizant, Hinjewadi, Pune 411057 Pune 411057 (India ) Phone : +91 - 20 - 020-22932020 / 2025 / 2080 /4880 Fax : +91 - 020-22933139 Website : www.m-techindia.com Email : info@m-techindia.com

Factory Office : (Unit - I ) 33 KM Stone, Pune - Satara Highway, Before Nasrapur Turn, Gat No. 79, Village Kelawade, Tal. - Bhor, Pune. India. Phone : +91 - 2113 - 272 273. Telefax : +91 - 2113 - 272 856

Different Products Profile Of M-Tech:

1. UNIT 1

Domed Label(Bubble Stickers).

Graphic Overlays & Stickers.

Automotive Dials

In Mold Decoration.

Membrane Switches.

2. UNIT 2 1) Cards

ATM/ Master Visa Cards.

ID Membership Cards.

Prepaid Scratch Cards.

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Contact Less Smart Cards

Contact Smart Cards 2) Smart Cards, Readers

CONTACTLESS READER

BIOMETRIC READER

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PIN-PAD BASED READER

POINT OF SALE READERS

3) RFID Tags, Readers And Applications

DESKTOP ANTENNAS

RFID MID RANGE READER

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Esteemed Clients:

Bharat Atomic Research Centre Services

AndaPradesh

technology

Indian Railway

Reliance Communications

LG

Godrej

BEHR
13

Kalyani Bharat Forge

TATA Motors

Wipro

State Bank of India

Bank of India

Le Meridien

Holiday Inn

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Board Of Directors:
Mr. Vijay M. Gandhi

He is the Chief promoter of the company. He started his career by working as a operator in Bajaj Auto Ltd., Pune Assembly line. While working he completed the Diploma in Mechanical engineering from government polytechnic college. In 1989 he started a small unit along with his fellow promoters a firm called Mahavir Industries from the intital work of Printing letterheads and visiting cards, he went on higher milestones of Printed Electronics Business to make the company what it is today. Mr. Gandhi is the Managing Director & Chairman of the company. He is a winner of Dahanukar Award of MCCI in 1997, under his leadership company has won the award for Good Quality System and Practices in their establishment from MCCI - Tata Honeywell award in 1997 also company has won the merit award in 2001 for the product Prepaid Cards. Mr. Rajkumar M. Gandhi

He has completed the Diploma in printing engineering. Mr. R. M. Gandhi is the Executive Director of the comapany and is looking after the material sourcing and production of Membrane Division. Mr. Milind S. Bhagwat

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Mr. Milind S. Bhagwat is a Mechanical Engineer & Embedded Software Engineer, Member of ISHRAE. He is looking after the R&D Division, Smart Card Division and all the Technical Aspects of the company's operations. He has total experience of 25+ years in engineering field. Closely associated with business partners within and outside country. Providing guidance & direction to the technical team of the company to develop Innovative products particularly in latest technology like RFID etc. Mr. Murgesh B. Halvegar

He is the Automobile Engineer. He have developed good team of work round-the-clock 365 days with safety, good environment & understanding changes needed to shop floor in line with global compitition. Mr. Niranjan Nadkarni

Mr. Niranjan Nadkarni has Degree in Mechanical Engineering, Master Degree in Management, Diploma in Business Management, Diploma in Marketing Management & Diploma in PC Software. Also he has the technical qualifications like IQA and RAB Assessor, GM, DaimlerChrysler, Ford Qualified QS 9000 Lead Auditor, VDA 6.1 Qualified Auditor, TUV Cert & TMS Registered Lead Auditor, VETO person for all automotive standards & ISO/TS 16949:2002 Qualified Lead Auditor. Mr. Niranjan Nadkarni is a Member of the Institute of Engineers (Mechanical) & Chartered Engineers (Mechanical). He has total working experience of 20 years. He is currently working as Vice President, Testing Services for TUV Southasia. He has international exposure in countries Germany, France, Italy, Switzerland, UK, USA, South Korea, South Africa, Philippines, China, Singapore, Middle East & Japan. This includes international audits, business meetings, conducting trainings, seminars, conferences etc. 16

Mr. Ramesh Gugale

He is an independent non-executive director of the Company. He is a person with progressive ideas. Nobody could have thought of having "A BANANA TISSUE CULTURE" business Jamkhed with the view to enrich the farmers. But Mr. Ramesh Gugle with his foresight has a developed a huge tissue culture business at Jamkhed. Mr. Ramesh Gugle has vast experience in cloth, tissue culture, medicines, healthcare & electronics. Untiring hardwork, Iron will power, pleasant personality, gentle behavior & devotion made him pride & glory of his business. Mr. Ramesh Gugle believes "A good business is social work" Mr. Vishal Katariya

Mr. Vishal Katariya is an independent non-executive director of the Company. Mr. Vishal Katariya, LL.B., LL.M (UK), LL.M (US), is the Chair-Professor of IPR (Intellectual Property Rights) of Pune University. His dynamic vision and foresight will see a growing awareness of Intellectual Property Rights in industrial and academic circles. Mr. Katariya received his law degree at ILS Law College, Pune. He stood 2nd in the merit ranking in University of Pune and was awarded the coveted DFID scholarship by the British Government, in recognition for his outstanding academic achievements and to study law in the University of Bristol, England. The University of Bristol is one of the most reputed universities of England with excellence to match the fame of Oxford and Cambridge. His master's course in law enabled him to deepen his knowledge in intellectual property law and European law. Mr. Katariya was awarded another scholarship to study masters of law in the United States. His focus of study was on Intellectual property (IP). He studied at Franklin Pierce Law Center to sharpen his Intellectual Property skills and study finer details of patent, trademark and copyright law. Franklin Pierce law Center is one of the premier institutes in the US which imparts Intellectual Property education. WIPO (World Intellectual Property Organization) officials and nominees for patent office from various countries prefer to study IP law at this institute. He worked in the Atlanta office of Holland & Knight LLP, one of the top most law firms in the US. His work in the US enriched his experience and motivated him to come back to India and to start working in the field of Intellectual Property as it was in its infancy.

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MR. Karan Singh

Mr. Karan Singh has been nominated as a director of the company from 24th September, 2007. He is a non-executive director of the Company. Mr. Karan Singh has done his graduation in the year 2002 from Michigan University, USA with specialization in Organizational Science and Engineering. Apart from graduation, he has attained International Baccalaureate Diploma in Singapore from the United World College of South East Asia in 1997. Also, he has completed his Business School Program from Harvard in the year 2004 and has completed the Leadership Program from Indian School of Business. He was one of the speakers in the panel discussion held by Hewlett Packard for its prestigious clients in New Delhi on 17th October, 2006. He is a director of ACG Group. Ms. RAJEE R. Ms. Rajee R. is B.Tech [Electronics] & has also completed her MBA with specialisation in Finance. She is the nominee director of Canbank Venture Capital Fund Limited on the Board of M-Tech Innovations Ltd. w.e.f. 6th September, 2008. She has over 19 years of experience in the Private Equity and Venture Capital business in India with deep and thorough practical knowledge of the industry, extensive knowledge of evaluation and analysis of deals, valuation of enterprises and fund management & expertise in credit (project finance, working capital).

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Why M-Tech:
ISO Certified Company Continuous Upgradation & Innovation Latest Technology Trusted Name Quality Products & Best Services Cost Competitive Products Export Department to Cater Global Requirements Quick Ramp up Capacity for Volume Production Team of Professional & Dedicated Engineers Most Reliable Customers Around The World Strong Team of R&D Development In-house Tooling & Designing Capability.

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CHAPTER III Research Design & Methodology

1.3 Research Methodology:
The term research is composed of two words, re& search. This means to search again. Research is conducted to search for new facts of to modify the existing facts. The obvious function of research is to add new knowledge to the existing store. Research is the pursuit of truth with the help of study, observation, comparison and experiment. It is a careful and exhaustive investigation of a phenomenon with an objective of advancing knowledge. Thus, research plays two major roles viz; 1) It contributes to the general fund of existing knowledge. 2) It helps to solve many complex problems faced by the business and society.

According to Clifford Woody, research is the process which includes defining and refining problems, formulating suggested solutions, collecting, organizing & evaluating data, making deductions & reaching conclusions & at last carefully testing the conclusions to determine whether they fit the formulating the hypothesis.

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1.3.1 Sources of Data:

The collection of data means purposive gathering of information relevant to the subject matter of investigation from the units of population under investigation. Required data for the proposed study was collected by following sources of data collection. 1) Primary Sources 2) Secondary Sources.

1) Primary Sources: The primary data are those which are collected afresh at for the first time and thus, it is original in character. For the concerned study data was collected through enquiry, personal interview and discussion with officers. 2) Secondary Sources: The data collected from the published sources of organization is called secondary data. Secondary sources that were referred for the project work are as under. i) Accounting and Financial Records. ii) Annual Reports of company.
21

iii) Various books of Management & Financial Accounting. iv) Internet and Published Data viz Journals, Magazines of company. These records were readymade but made available with prior permission of management.

1.5 Limitations:
The research was conducted in a limited area. The study done with limited information provided by Finance Department. The company executives were able to valuable time only for a few days in a week. Hence the required information could not be obtained. The respondent may be biased.
The project report is based on the analysis of three years which may not be

sufficient to in some cases.

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CHAPTER IV Introduction Of Topic

Nature of financial StatementsThe Financial Statements are those which are prepared periodically, normally at the end of financial year. All the information recorded in the books of accounts of a business is summarized in these financial statements. There are two important statements. 1. Balance sheet or A position Statement and, 2. Profit and Loss Account or An Income Statement. The Balance Sheet is prepared to show the true and fair position of the business on a particular date. It contains a list of assets and liabilities of a business and the position of the owner of the business. Profit and Loss Account, on the other hand, shows the net result of the business, i.e. net income or loss during a financial year of period. Profit or net income means the increase in owners equity or capital; and loss means decrease in the capital.

Meaning of Financial Analysis:

To analyze is to examine. Therefore, analysis of financial statements means the systematic classification, comparison and examination of the facts and figures as disclosed in these statements in order to have the full diagnosis of the profitability and financial position of the enterprise.
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Profit and Loss Statement indicates the profitability and Balance Sheet discloses the financial position. When the absolute figures in these statements are methodically classified and compared with similar figures of the previous years or with the figures of other firms for proper understanding of the profitability and position of the business, it is known as analysis. Thus, the analysis of the financial statements consists of relationship of facts with figures and to determine whether the working results and financial position are satisfactory or unsatisfactory.

Need for Financial Analysis:

The information disclosed by the financial statement viz- Profit and Loss Account & Balance Sheet may be misleading and misguiding if not arranged in a meaningful way and if not studied, analyzed and interpreted properly. The very purpose of analyzing the financial statements is to locate the areas for further investigation, in order to determine the solvency of the business and to evaluate its profitability. For this purpose, the results as disclosed by the financial statements are treated as mere indicators or signals based on which further examination and investigation are carried out.

Methods of Financial Analysis:

A number of analytical methods and techniques are used in order to simplify or reduce the complex information and to make the financial statements more meaningful. Various methods of financial analysis are listed as under. 1) Comparative Statements. 2) Common-Size Statements. 3) Trend Percentages or Trend Analysis. 4) Fund Flow Analysis & Cash Flow Analysis.

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A) FUNDS FLOW ANALYSIS:

The success of business beside other things depends upon the manner in which its Fund Flow is managed. Thus, Fund Flow is required as the life and blood of business concern. Fund Flow management in simple term is the flow of funds which a company must have to finance its day to day operation. Fund Flow management throws light on adequacy of the firm and also risk of bankruptcy. If firm do not have adequate Cash i.e. it does not invest sufficient funds in current assets, it may become liquid and consequently may not have ability to meet its current as well as long term obligation and thus, invite risk of bankruptcy. It also focuses on key strategy and consideration tradeoff between profitability and liquidity of the firm. The technique of fund flow analysis is widely used by the financial analysts credit grating institution and financial managers in performance of their jobs. It has become a useful tool in their analytical kit. This is because the financial statement i.e. Income Statement and the Balance Sheet have a limited role to perform. Income statement measures fallow restricted to transaction that pertain to rendering of goods or services to customers. The balance sheet is merely a static statement. It is statement of assets and liabilities of the business as on a particular date. It does not sharply focus those major financial transactions which have been behind the balance the sheet changes. One has to draw inferences from the balance sheet of two periods. For example, if the fixed assets worth Rs. 2, 00,000/- are purchased during the current year by raising share capital of Rs. 2, 00,000/- the balance sheet will similarly show a higher capital figure and higher fix assets figure. In case, one compares the current years balance sheet with the previous years balance sheet, then only one can draw an inference that fixed assets were accounting year might not find any place in the balance sheet. For example loan of Rs. 2,
25

00,000/- was raised and paid in the accounting year. The balance sheet will not depict this transaction. However, a financial analyst must know the purpose for which loan was utilized and the source from which it was raised. This will help him in making a better estimate about the companys financial position and policies.

Meaning of Funds:
The word funds has three meanings. In the narrow sense, it refers to cash resources of the business. On the other hand, in boarder sense it includes all the resources used in the business. It covers all the assets and all the liabilities. The entire assets side of the balance sheet shows the application of funds, whereas the entire liability side shows the sources of funds. But while preparing funds flow statement it is preferred to use the term in the intermediate sense, i.e. working capital. The funds thus refers to the net working capital i.e. the difference between current assets and current liabilities.

Benefits of Fund Flow Information:

The information in a fund flow statement statements help investors, creditors, and other to assess the following aspects of the firms financial position. 1. Such statements serve as a mechanism for predicting the ability to generate future fund flows for the investors, creditors and others. 2. This enables managers or management to plan coordinate and control financial operation in an effective manner. 3. It gives an indication of the relationship between profitability and cash generating ability thus of the quality of the profit earned. 4. It furnishes information to the management regarding the entities ability to Pay dividend and meet obligations. 5. Analyst and other users of financial information often, formally or Informally, develop models to assess and compare the present value of the Future Fund Flow of entities. Historical Fund Flow statements could be useful to check the accuracy of past assessment. 6. It is free from manipulation and is not affected by subjective judgments or by accounting policies.
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7. Such a statements dictates situations when a business has made huge profit but has run out money or it has sustained loss but has enough fund availability. 8. The extent of fund generated from operational activity and external finance in order to meet capital, tax, and dividend requirements can be obtained from such statements. 9. It aids in the evaluation of risk, which includes both the expected variability of future return and probability of insolvency or bankruptcy. 10. Such statements reveal the capability of an enterprise to pay its short obligation as and when due to the lenders. 11. A Fund Flow statement in conjunction with a balance sheet provides information on liquidity, viability, and adaptability. The balance sheet is often used to obtain information on liquidity, but the information is rather incomplete for this purpose as the balance sheet is prepared at a particular point in time. 12. It may assists users of financial statements in making judgments on the amounts, timing and degree of certainty of future Fund Flows. 13. This statement provides information that is useful in checking the accuracy of past assessment of future Fund Flows and in examining the relationship between profitability and net Fund Flow and the impact of changing price. 14. This statement is of special importance in assessing future Fund Flows, quality of income operating capability, financial flexibly and liquidity, and information on financing and investing activities. Using Fund Flow s from operating activities from the Fund Flow statements, different ratios such as liquidity, ratio, solvency ratio, and profitability ratios can also be calculated to evaluate an enterprise liquidity, solvency, and profitability

27

Fund flow statement and income statement

A fund flow statements differs from an income statement (i.e. Profit and loss account) in several respects 1. A fund flow statement deals with the financial resources required for running the business activities. It explain how were the funds obtained and how were they used, whereas an income Statement discloses the results of the business activities i.e. how much has been earned and how it has been spent. 2. A fund flow statement matches the funds raised and Funds applied during a particular period. The sources and applications of funds may be of capital as well as of revenue. An income statement matches the income of a period with the expenditures of that period which are both of a revenue nature. For example where shares are issued for cash, it becomes a source of funds while preparing a funds flow statements but it is not an item of income for an income statement. 3. Sources of funds are many besides operations such as share capital, debenture sales of fixed assets, etc. an income statement which discloses the results of operation cannot accurately tell about the funds from operation alone because of non fund item (such as depreciation, writing off of fictitious assets, etc.) being include therein. Thus, both income statement and fund flow statement have different function to perform. Modern management need both. One cannot be substituted for the other rather they are complementary to each other.

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Sources & Application of Funds:

The sources of fund can be both internal as well as external.

Internal sources
Funds from operation are the only internal source of funds. However, following adjustments will be required in the figure of net profit for finding out real funds from operation: Add the following items as they do not result in outflow of funds: 1. depreciation on fixed assets 2. Preliminary expenses or goodwill, etc., written off. 3. Contribution to debenture redemption fund, transfer to general reserve, etc., if they have been deducted before arriving at the figure of net profit. 4. Provision for taxation and proposed dividend are usually taken as appropriation of profits only and not current liabilities for the purpose of funds flow statement. Tax or dividends actually paid are taken as application of funds. Similarly, interim dividend paid is shown as an application of funds. All these items will be added back to net profit. If already deducted, to find funds from operations. 5. Loss on sale of fixed assets. Deducted the following times as they do not increase funds :a.Profit on sales of fixed assets since the full sales proceeds are taken as a separate source of funds and inclusion here will result in duplication. b. Profit on revaluation of fixed assets.

c.Non operating income such as dividend received or accrued dividend, refund of income tax, rent received or accrued rent. These item increase funds but they are non operating income. They will be shown under separate heads as sources of funds in the funds flow statement.
29

In case the profit and loss account shows net Loss this should be takes as item which decrease the funds.

External Sources: Funds from long term loan:Long term loans such as debentures borrowing from financial institution will increase the working capital and therefore, there will be flow of funds. However, if the debentures have been issued in consideration of some fixed assets, there will be no flow of funds. Sale of fixed assets:Sale of land building, long term investments will result in generation of funds. Funds from increase in share capital,:Issue of share for cash or for any current assets results in increase in working and hence there will be a flow of funds. Application of Funds: The uses to which funds are put are called application of funds following are some of the purpose for which funds may be used Purchase of fixed assets Purchase of fixed assets such as a land, building, plant, machinery, long term investment, etc., results in decrease of current assets without any decrease in current liabilities. Hence there will be a flow of funds. But in case shares or debenture are issued for acquisition of fixed assets. There will be no flow of fund. Payment of dividends Payment of dividends results in decrease of fixed liability and therefore, it affects funds. Generally, recommendation of directors regarding declaration of dividend (i.e. proposed dividends) is simple taken as an appropriation of profit and not as an item affecting the working capital. Payment of tax liability Provision for taxation is generally taken as an appropriation of profit and not as an application of funds. But if the tax has been paid it will as an application of funds.
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B) CASH FLOW ANALYSIS:

Before studying Cash Flow Statement it is necessary to understand the terms viz; Cash, Cash flow.

Cash:
As per AS3 Cash Flow Statement deals with cash and cash equivalents. Cash includes cash in hand and demand deposits with bank. Cash equivalents refer to short-term liquid investments of an organization which are readily convertible to known amounts of cash and are subject to an insignificant risk of change in value. This cash equivalents include item like Fixed Deposits for 30 days, treasury bills and market instruments.

Cash Flow:
The success of business beside other things depends upon the manner in which its Cash flow is managed. Thus, Cash flow is required as the life and blood of business concern. Cash flow management in simple term is the flow of funds which a company must have to finance its day to day operation. It includes the form near cash asset or even assets a little further from cash but yet in process of moving towards the cash from in short period. It comprises of stock of finished goods, semi-processed items, sundry debtors, cash and short-term investment, if any. Cash flow management throws light on adequacy of the firm and also risk of bankruptcy. If firm do not have adequate Cash i.e. it does not invest sufficient funds in current assets, it may become liquid and consequently may not have ability to meet its current obligation and thus, invite risk of bankruptcy. It also focuses on key strategy and consideration trade-off between profitability and liquidity of the firm. Management of Cash flow gives financial position, profitability and also efficient use of an individual current asset like cash, receivables and inventory.

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Cash Flow Statement:

In financial accounting, a cash flow statement or statement of cash flows is a financial statement that shows how changes in balance sheet and income accounts affect cash and cash equivalents, and breaks the analysis down to operating, investing, and financing activities. As an analytical tool, the statement of cash flows is useful in determining the short-term viability of a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7) is the International Accounting Standard that deals with cash flow statements. The success, growth and survival of every reporting entity depends on its ability to generate or otherwise obtain cash. Cash flow is a concept that everyone understands and with which they can identify. Reported profit is important to users of financial statements, but so too is the cash flow generating potential of an enterprise. What enables an entity to survive is the tangible resource of cash not profit, which is merely one indicator of financial performance. A cash flow statement (CFS) is important to external users, and should be of significant importance internally as well. Cash flow refers to the movement of cash into or out of a business, or project, or financial product. It is usually measured during a specified, finite period of time. Measurement of cash flow can be used.
To determine a project's rate of return or value. The time of cash flows into and out

of projects are used as inputs in financial models such as internal rate of return, and net present value.
To determine problems with a business's liquidity. Being profitable does not

necessarily mean being liquid. A company can fail because of a shortage of cash, even while profitable.

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As an alternate measure of a business's profits when it is believed that accrual accounting concepts do not represent economic realities. For example, a company may be notionally profitable but generating little operational cash (as may be the case for a company that barters its products rather than selling for cash). In such a case, the company may be deriving additional operating cash by issuing shares, or raising additional debt finance. Cash flow can be used to evaluate the 'quality' of Income generated by accrual accounting. When Net Income is composed of large non-cash items it is considered low quality. To evaluate the risks within a financial product. E.g. matching cash requirements, evaluating default risk, re-investment requirements, etc. Cash flow is one of the most important aspects of running any business large or small. It is one of the single most important reasons why many businesses fail - regardless of how good the business is. Managing cash flow therefore is vitally important in the smooth running, survival and success of a business. This activity will look at what cash flow is, and use some examples to show how cash flow can make the difference between success and failure. Failure in this case means insolvency. If you are insolvent then you are unable to pay your debts. We often use the term 'bankrupt' to describe this but strictly, only an individual can be declared bankrupt. Companies are declared as insolvent. The principle however is the same. Some firms deal with so-called 'personal insolvency' which effectively means bankruptcy so the use of the terms can sometimes be confusing! Business success might not be determined by how many customers you have, the quality of your product, the price or many other things - it might be down to a simple case of managing your cash flows!

Need and Importance:

The Balance Sheet and Profit and Loss Account are the two very important final products of the entire financial accounting process. The balance sheet shows the financial
33

state of affairs of an organization as on a particular date while the profit and loss account shows the profit earned or loss incurred by an organization from its transactions over a period. No doubt, these two statements serve various important purposes but they do not tell the complete story which a financial analyst need to know. The Balance Sheet shows the cash balance as on a particular date. It may show opening and closing cash balance. But does not show the details of cash received during the year and the cash paid during the year. For analysis of financial position of an organization, sometimes this information is essential. This limitation of balance sheet is overcome by cash flow statement. Similarly, the Profit and Loss Account which is another important financial statement shows the book profit earned by a concern. Such profit is calculated after debiting noncash expenditure like depreciation, preliminary expenses written off etc. this book profit is different from cash profit earned by the concern. The financial analyst who is interested in knowing the cash profit has to adjust such book profit for noncash expenses to arrive at cash profit.

Classification of Cash Flow:

Activity Operating Activity Investing Activity Financing Activity Cash Flow Cash Inflow Cash Outflow Cash Inflow Cash Outflow Cash Inflow Cash Outflow Examples Receipts from goods, services, debtors Payments towards goods, services, debtors Receipts from sale of fixed assets/investments Paid for purchase of fixed assets/investments Receipts from fresh shares/debentures/loans Repayment of shares/debentures/loans

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Difference between Funds flow & Cash Flow:

Fund Flow Statement Cash Flow Statement It indicates change in working capital It indicates change in cash position between between the two periods. the two periods. Schedule of changes in working capital is Schedule of changes in working capital is prepared. not necessary. Opening and closing balance of cash are Cash Flow statement starts with opening not taken directly. cash balance & ends with closing balance. Funds from operations are ascertained Cash from Operations is ascertained while while preparing funds flow statement. preparing cash flow statement. It is the managerial tool of financial It is the managerial tool of financial analysis to help long term decisions. analysis to help short term decisions. Inflow of funds does not mean inflow of Inflow of cash however results inflow of cash. funds. Sound funds position does not mean sound Sound cash position however is always cash position. followed by sound position.

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CHAPTER V Data Presentation, Analysis, Interpretation

CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH 2009 SR. NO. I. YEAR ENDED 31.03.2009 (RS.)
27,32,044 85,73,805 2,91,191 3,75,776 2,59,97,807

PARTICULARS
CASH FLOW FROM OPERATING ACTIVITIES: Profit Before Tax Adjustments for: Depreciation MAT Entitlement Deferred Revenue Expenses Written Off Interest Expenses Operating Profit before working capital changes Adjustments for: Decrease/(Increase) in trade & other receivables Decrease/(Increase) in inventories (Decrease)/Increase in trade payables Increase/(Decrease) in Provisions Cash Generated from Operations Taxes paid (FBT)

YEAR ENDED 31.03.2008 (RS)

1,14,78,507 2,11,23,184 0 3,70,603 1,14,39,634

3,52,38,579
3,79,70,623 (86,96,330) (25,36,427) 2,46,61,783 (99,36,514)

3,29,33,421
4,44,11,928 (16,36,335) (25,90,284) 1,85,98,617 58,38,010

34,92,512
4,14,63,135 5,96,129

2,02,10,008
6,46,21,936 27,08,973 6,19,12,963

Net Cash Generated from Operating Activities II.

CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets including capital work in progress Increase in Misc Expenditure Loan Received/ (given) Unsecured Loans Received/(Paid) Repayments/(Receipt) of Capital Subsidy Sales proceeds of Investments

4,08,67,006
(11,19,82,717) (3,40,625) 9,74,86,492 1,22,34,648 (10,00,000) 1,88,900

(13,55,10,571) (11,82,943) 4,22,65,342 31,38,361 0 0

Net Cash used for Investment Activities III.

CASH FLOW FROM FINANCING ACTIVITIES: Receipts from Share Issue (Repayment)/Proceeds from Loan Payment of Dividend & Dividend Distribution Tax Interest paid

(34,13,302)
0 (1,06,86,876) 0 (2,59,97,807)

(9,12,89,811)
3,66,63,800 0 (71,52,380) (1,14,39,634)

Net Cash Generated from Financing Activities

Net Increase/Decrease in Cash & Cash Equivalents Opening Balances of Cash & Cash Equivalents Closing Balances of Cash & Cash Equivalents

(3,66,84,683)
7,69,021 60,12,051 67,81,072

1,80,71,786
(1,13,05,062) 1,73,17,113 60,12,051

36

CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH 2010 SR. NO. I. YEAR ENDED 31.03.2010 (RS)
21,63,222 2,10,16,703 3,38,130 6,87,550 (35,27,415) (9,21,920) 0 3,02,64,266

PARTICULARS
CASH FLOW FROM OPERATING ACTIVITIES: Profit Before Tax Adjustments for: Depreciation MAT Entitlement Deferred Revenue Expenses Written Off Profit on Sale of Assets Interest Received Dividend Received Interest Expenses Operating Profit before working capital changes Adjustments for: Decrease/(Increase) in trade & other receivables Decrease/(Increase) in inventories (Decrease)/Increase in trade payables Increase/(Decrease) in Provisions Cash Generated from Operations Taxes paid(FBT)

YEAR ENDED 31.03.2009 (RS.)

27,32,044 85,73,805 2,91,191 3,75,776 0 (5,14,598) (22,328) 2,59,97,807

4,78,57,313
5,00,20,535 (1,13,27,504) (86,42,488) 39,29,062 64,70,829

3,47,01,653
3,74,33,697 (86,96,330) (25,36,427) 2,46,61,783 (99,36,514)

(95,70,101) Net Cash Generated from Operating Activities II.

CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets including capital work in progress Sale proceeds of Fixed Assets Increase in Misc Expenditure Loan Received/ (given) Interest Received Dividend Received Unsecured Loans Received/(Paid) Repayments/(Receipt) of Capital Subsidy Sales proceeds of Investments 4,04,50,434 3,38,130 4,01,12,304

34,92,512
4,09,26,209 5,96,129

4,03,30,080
(11,19,82,717) 0 (3,40,625) 9,74,86,492 5,14,598 22,328 1,22,34,648 (10,00,000) 1,88,900

(1,79,69,793) 1,05,22,934 (15,58,872) (1,79,13,374) 9,21,920 0 2,55,86,271 0 0

Net Cash used for Investment Activities III.

CASH FLOW FROM FINANCING ACTIVITIES: Receipts from Share Issue (Repayment)/Proceeds from Loan Interest paid

(4,10,914)
(8,86,000) (70,39,677) (3,02,64,266)

(28,76,376)
0 (1,06,86,876) (2,59,97,807)

Net Cash Generated from Financing Activities

Net Increase/Decrease in Cash & Cash Equivalents Opening Balances of Cash & Cash Equivalents Closing Balances of Cash & Cash Equivalents

(3,81,89,943)
15,11,447 67,81,072 82,92,519

(3,66,84,683)
7,69,021 60,12,051 67,81,072

CASH FLOW STATEMENT FOR THE YEAR ENDED ON 31ST MARCH 2011 37

SR. NO. I.

PARTICULARS
CASH FLOW FROM OPERATING ACTIVITIES: Profit Before Tax Adjustments for: Depreciation MAT Entitlement Deferred Revenue Expenses Written Off Profit on Sale of Assets Interest Received Interest Expenses Operating Profit before working capital changes Adjustments for: Decrease/(Increase) in trade & other receivables Decrease/(Increase) in inventories (Decrease)/Increase in trade payables Increase/(Decrease) in Provisions Cash Generated from Operations Taxes paid(FBT)

YEAR ENDED 31.03.2011 (RS.)

94,65,502 2,11,81,530 17,56,316 8,54,966 0 (12,38,385) 3,34,02,744

YEAR ENDED 31.03.2010 (RS)

21,63,222 2,10,16,703 3,38,130 6,87,550 (35,27,415) (9,21,920) 3,02,64,266

5,59,57,171
6,54,22,673 (1,52,77,710) (99,52,881) (65,20,846) 68,792

4,78,57,313
5,00,20,535 (1,13,27,504) (86,42,488) 39,29,062 64,70,829

(3,16,82,645)
3,37,40,028 17,56,316

(95,70,101)
4,04,50,434 3,38,130 4,01,12,304 (1,79,69,793) 1,05,22,934 (15,58,872) (1,79,13,374) 9,21,920 2,55,86,271 0 0

Net Cash Generated from Operating Activities II.

CASH FLOW FROM INVESTING ACTIVITIES: Purchase of fixed assets including capital work in progress Sale proceeds of Fixed Assets Increase in Misc Expenditure Loan Received/ (given) Interest Received Unsecured Loans Received/(Paid) Repayments/(Receipt) of Capital Subsidy Sales proceeds of Investments

3,19,83,712
(2,44,22,302) 0 (9,07,574) 3,62,71,508 12,38,385 79,80,000 10,00,000 (5,00,000)

Net Cash used for Investment Activities III.

CASH FLOW FROM FINANCING ACTIVITIES: Receipts from Share Issue (Repayment)/Proceeds from Loan Interest paid

2,06,60,017
0 (1,93,84,388) (3,34,02,744)

(4,10,914)
(8,86,000) (70,39,677) (3,02,64,266)

Net Cash Generated from Financing Activities

Net Increase/Decrease in Cash & Cash Equivalents Opening Balances of Cash & Cash Equivalents Closing Balances of Cash & Cash Equivalents

(5,27,87,132)
(1,43,403) 82,92,519 81,49,116

(3,81,89,943)
15,11,447 67,81,072 82,92,519

Analysis & Interpretation:

38

For the Year 2008-09: The Statement of Changes in Working Capital prepared for year 2007-08 disclose that, there is decreased in working capital by Rs.890544, where as Funds flow Statement reveals that, funds generated from operation during the year were largely used for purchase of fixed assets. During the year the company has taken loans from 11 parties covered in register maintained under section 301 of the Companies Act, 1956. The maximun amount involved during the year was Rs. 48,42,000/-. During this year company has not given any loans secured or unsecured to companies, firms or other parties listed in register. Cash flow Statement prepared for year 2008-09 disclose that, cash inflow in course of operating activities are Rs. 4,08,67,006/-, cash outflow from investing activities is Rs. 34,13,302/- & cash inflow from financing activities is Rs. 3,66,84,683/-. Finally the net cash & cash equivalents from cash flow is Rs. 7,69,021/-. For the Year 2009-10: The Statement of Changes in Working Capital prepared for the year 2009-10 discloses that, there is increase in working capital by Rs. 1,12,80,658/-. The funds flow statement reveals that, funds generated from operations are largely used for payment of dividend & dividend tax & direct tax. Cash flow Statement prepared for year 2008-09 disclose that, cash inflow in course of operating activities are Rs. 4,01,12,304/-, cash outflow from investing activities is Rs. 4,10,914/- & cash inflow from financing activities is Rs. 3,81,89,943/-. Finally the net cash & cash equivalents from cash flow is Rs. 15,11,447/-.

For the Year 2010-11:

39

The Statement of Changes in Working Capital prepared for the year 2010-11 discloses that, there is increase in working capital by Rs. 3,82,08,304/-. The funds flow statement reveals that, funds generated from operations are largely used for payment of dividend & dividend tax & direct tax. Cash flow Statement prepared for year 2010-11 disclose that, cash inflow in course of operating activities are Rs. 3,19,83,712/-, cash outflow from investing activities is Rs. 2,06,60,017/- & cash inflow from financing activities is Rs. 5,27,87,132/-. Finally the net cash & cash equivalents from cash flow is Rs. 1,43,403/-.

CHAPTER VI
40

Finding And Suggestion

Observation & Findings:
1) Company has not raised additional capital from last 3 years, which shows it strong financial position. 2) It is observed that, company raises its funds mostly by means of loans each year, which leads to increased burden of interest.
3) The percentage of interest received is substantially lower than payment of interest

and finance charges. 4) It is observed that, more than 40% of total funds generated from operating activities were utilized for purchase of fixed assets & the remaining funds were used for payment of direct tax & interest & finance charges.
5) Cash flow arising from operating activities is decreased by Rs. 81,28,592/- in

2010-11 as compared to previous year. 6) Cash outflow from investing activities is also increased by Rs.2,02,49,103/- which indicates company is not in sound financial position. 7) Cash flow arising from financing activities is increased by Rs. 1,45,97,189/-, but as a result companys interest and finance charges are also rising.

Suggestions:
41

1) Company should issue Preference Shares also which will help to maintain an optimum & properly leveraged capital structure. 2) It is suggested that company should raise its funds through its internal sources through retention of earnings & ploughing back of profits. 3) Company should adopt a stable & optimum dividend policy as compared to its funds generated. 4) It is suggested that company should pay attention towards cash inflow in course of operating activities, because it is declining year by year. 5) Company should try to reduce its interest and finance charges.

CHAPTER VII
42

Conclusion
It can be concluded that M-Tech Innovations ltd, is an upcoming organization. It has succeeded in adopting world class manufacturing standards. Therefore, M-Tech Innovations ltd. has a bright future. It is all set to make the best out of the opportunities that are available to it on account of globalization. Throughout this study researcher has found that company has core team of operations as well as finance. Company has strong financial position, which is apparent from its Funds Flow & Cash Flow Analysis. Company is powering life through smart cards production. The researcher was fortunate to get an opportunity to undergo the internship training project at M-Tech Innovations ltd. The experience will help the researcher in his future career.

CHAPTER VIII
43

BIBLIOGRAPHY
Books:
S.N. MAHESHWARI (FINANCIAL MANAGEMENT). ANNUAL REPORTS. FINANCIAL MANAGEMENT BY PRASANNA CHANDRA. FINANCIAL MANAGEMENT BY KHAN & JAIN.

Web Resources:

www.m-techindia.com

www.Iibef.org.com

ANNEXURE
44

YEAR 2008-09 BALANCE SHEET AS ON 31st MARCH 2009 Sr. No.

I.

Particulars
SOURCES OF FUNDS: SHAREHOLDERS FUNDS:
Share Capital Reserve & Surplus

SCH No.

As on 31.03.2009 (Rs.)

As on 31.03.2008 (Rs.)

1 2 3 4 5

7,08,90,760.00 3,87,99,853.20 24,25,31,968.42 2,08,59,743.78 2,39,87,624.00

7,08,90,760.00 5,09,08,694.38 15,57,32,263.95 86,25,096.00 1,04,51,766.60

LOAN FUNDS:
Secured Loans Unsecured Loans

DEFERRED TAX LIABILITY (NET) II. TOTAL FUNDS APPLICATIONS OF FUNDS: FIXED ASSETS:
Gross Block Less: Depreciation Net Block Capital Work-In-Progress Investment

39,70,69,949.40

29,66,08,580.93

6 7 8 9

41,60,42,512.10 7,98,69,396.10 33,61,73,116.00 3,85,54,613.00 0.00

23,17,50,735.10 7,12,95,591.10 16,04,55,144.00 11,08,63,673.42 1,88,900.00

CURRENT ASSETS,LOAN & ADVANCES

Inventories Sundry Debtors Cash & Bank Balances Loan & Advances

3,16,59,657.00 3,94,60,738.89 67,81,071.83 2,41,03,430.55 10 10,20,04,898.27 7,20,10,939.03 87,62,030.00 2,12,31,929.24 11 11,10,291.16

2,91,23,230.38 3,69,54,730.32 60,12,051.32 1,79,13,110.25 9,00,03,122.27 4,73,49,156.64 1,86,98,544.00 2,39,55,421.63 11,45,441.88

LESS: CURRENT LIABILITIES & PROVISIONS

Current liabilities Provisions

NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) TOTAL FUNDS EMPLOYED

39,70,69,949.40

29,66,08,580.93

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH 2009 45

SR. NO. INCOME

PARTICULARS
Gross Sales Less Returns Domestic Export Sub Total Less: Excise Duty Service Tax Sales Tax Sub Total Net Sales Other Income

SCH NO.
12

YEAR ENDED YEARENDED 31.03.2009 31.03.2009 (RS.) (RS)

24,48,88,893.41 3,55,74,910.14 28,04,63,803.55 1,65,34,659.00 11,57,243.00 1,49,57,121.00 3,26,49,023.00 24,78,14,780.55 90,24,248.12 22,57,20,938.72 5,15,48,758.56 27,72,69,697.28 1,75,07,415.80 2,67,044.00 1,52,90,077.00 3,31,64,536.80 24,41,05,160.48 74,24,138.09

I.

13

TOTAL EXPENDITURE
Cost of Material consumed (Increase)/ decrease in Inventories Cost of Employment Manufacturing Expenses Administrative & Selling Expenses Finance Cost Depreciation Directors Remuneration Auditors Remuneration Deferred Revenue Expenses W/off. 14 15 16 17 18 19 6

25,68,39,028.67
10,68,26,938.18 2,51,731.00 5,00,76,346.82 2,09,05,553.48 3,67,47,489.54 2,67,44,534.71 1,79,58,878.00 35,49,810.00 55,000.00 3,75,775.72

25,15,29,298.57
10,53,93,410.54 (2,57,861.00) 4,66,61,006.59 1,40,88,801.24 3,69,53,808.20 1,26,03,992.37 2,11,23,184.00 30,59,847.00 54,000.00 3,70,602.72

II.

TOTAL SUB TOTAL EXCESS PROVISION IN RESPECT OF EARLIER YEAR WRITTEN BACK PROFIT BEFORE TAX PROVISION FOR TAXATION IV.
Current Tax Deferred Tax MAT Entitlement Credit FRINGE BENEFIT TAX

26,34,92,057.45 (66,53,028.78) 93,85,073.00 27,32,044.22

2,91,191.00 1,35,35,857.40 (2,91,191.00) 3,05,028.00

24,00,50,791.66 1,14,78,506.91 0.00 1,14,78,506.91

20,46,233.00 15,17,723.60 0.00 6,62,740.00

III.

PROFIT AFTER TAX V.

Add: Balance in Profit & Loss Account B/F

1,11,08,841.18
3,10,962.38

72,51,810.31
2,11,532.07

PROFIT AVAILABLE FOR APPROPRIATION

Proposed/Interim Dividend Corporate Dividend Tax Transfer to General Reserve Balance Carried to Balance Sheet

(1,07,97,878.80)
0.00 0.00 0.00 (1,07,97,878.80) 20

74,63,342.38
61,13,406.00 10,38,974.00 0.00 3,10,962.38

VI

NOTES FORMING PART OF ACCOUNTS

YEAR 2009-10
46

BALANCE SHEET AS ON 31st MARCH 2010 Sr. No.

I.

Particulars
SOURCES OF FUNDS: SHAREHOLDERS FUNDS:
Share Capital Reserve & Surplus

SC H No.
1 2 3 4

As on 31.03.2010 (Rs.)
7,00,04,760.00 4,95,91,012.05 22,46,18,594.60 3,78,86,690.00 1,53,59,687.00

As on 31.03.2009 (Rs.)
7,00,04,760.00 3,87,99,853.20 24,25,31,968.42 1,93,40,096.00 2,39,87,624.00

LOAN FUNDS:
Secured Loans Unsecured Loans

DEFERRED TAX LIABILITY (NET) TOTAL FUNDS APPLICATIONS OF FUNDS: FIXED ASSETS:
Gross Block Less: Depreciation Net Block Capital Work-In-Progress Investment 5 6 7 8

39,74,60,743.65

39,55,50,301.62

II.

42,35,05,273.82 9,62,03,009.71 32,73,02,264.11 3,73,83,036.45 0.00

41,60,42,512.10 7,98,69,396.10 33,61,73,116.00 3,85,54,613.00 0.00

CURRENT ASSETS,LOAN & ADVANCES

Inventories Sundry Debtors Cash & Bank Balances Loan & Advances

4,03,02,145.00 4,84,38,161.26 82,92,519.16 2,64,53,511.74 9 12,34,86,337.16 7,74,59,648.51 1,52,32,859.00 3,07,93,829.65 10 19,81,613.44

3,16,59,657.00 3,94,60,738.89 67,81,071.83 2,41,03,430.55 10,20,04,898.27 7,35,30,586.81 87,62,030.00 1,97,12,281.46 11,10,291.16

LESS: CURRENT LIABILITIES & PROVISIONS

Current liabilities Provisions

NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) TOTAL FUNDS EMPLOYED

39,74,60,743.65

39,55,50,301.62

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH 2010 47

SR. NO. INCOME I.

PARTICULARS

SCH NO.

YEAR ENDED 31.03.2010 (RS.)

YEAR ENDED 31.03.2009 (RS)

Net Sales Less Returns Domestic Export Net Sales Other Income

10 24,09,40,298.59 3,37,86,544.62 27,47,26,843.21 90,17,604.52 21,22,39,870.41 3,55,74,910.14 24,78,14,780.55 32,52,910.12

11

TOTAL EXPENDITURE
Cost of Material consumed (Increase)/ decrease in Inventories Cost of Employment Manufacturing Expenses Administrative & Selling Expenses Finance Cost Depreciation 12 13 14 15 16 17 5

28,37,44,447.73

25,10,67,690.67
10,10,55,600.18 2,51,731.00 5,36,66,386.82 2,09,05,553.48 3,71,38,035.26 2,67,44,534.71 1,79,58,878.00

II.

12,86,32,311.78 (84,52,975.00) 5,68,47,258.41 2,25,80,876.21 2,88,94,763.39 3,20,62,288.48 2,10,16,702.61

TOTAL SUBTOTAL EXCESS PROVISION IN RESPECT OF EARLIER YEAR WRITTEN BACK PROFIT BEFORE TAX PROVISION FOR TAXATION
Current Tax Deferred Tax MAT Entitlement Credit FRINGE BENEFIT TAX

28,15,81,225.88 2163221.85 0.00 21,63,221.85

25,77,20,719.45 (66,53,028.78) 93,85,073.00 27,32,044.22

III.

IV.

3,38,130.00 (86,27,937.00) (3,38,130.00) 0.00

2,91,191.00 1,35,35,857.40 (2,91,191.00) 3,05,028.00

PROFIT AFTER TAX V.

Add: Balance in Profit & Loss Account B/F

1,07,91,158.85
(1,07,97,878.80)

(1,11,08,841.18)
3,10,962.38

PROFIT AVAILABLE FOR APPROPRIATION

Balance Carried to Balance Sheet Earning per share-Basic

(6,719.95)
(6,719.95) 18

(1,07,97,878.80)
(1,07,97,878.80)

VI

NOTES FORMING PART OF ACCOUNTS

YEAR 2010-2011
48

BALANCE SHEET AS ON 31st MARCH 2011 Sr. No.

I.

Particulars
SOURCES OF FUNDS: SHAREHOLDERS FUNDS:
Share Capital Reserve & Surplus

SCH No.

As on 31.03.2011 (Rs.)
7,00,04,760.00 5,78,30,298.16

As on 31.03.2010 (Rs.)
7,00,04,760.00 4,95,91,012.05

1 2

LOAN FUNDS:
Secured Loans Unsecured Loans

3 4

26,08,90,102.97 2,64,82,302.00 1,75,85,903.00

22,46,18,594.60 3,78,86,690.00 1,53,59,687.00

DEFERRED TAX LIABILITY (NET) II. TOTAL FUNDS APPLICATIONS OF FUNDS: FIXED ASSETS:
Gross Block Less: Depreciation Net Block Capital Work-In-Progress Investment 5 6 7 8

43,27,93,366.13

39,74,60,743.65

44,02,60,746.82 11,73,84,539.71 32,28,76,207.11 4,50,49,865.45 5,00,000.00

423505273.82 96203009.71 327302264.11 37383036.45 0.00

CURRENT ASSETS,LOAN & ADVANCES

Inventories Sundry Debtors Cash & Bank Balances Loan & Advances

5,02,55,026.00 5,88,92,080.47 81,49,116.32 3,12,77,302.04

4,03,02,145.00 4,84,38,161.26 82,92,519.16 2,64,53,511.74

LESS: CURRENT LIABILITIES & PROVISIONS

Current liabilities Provisions

9
7,09,38,802.18 1,53,01,651.00 6,23,33,071.65 20,34,221.92 7,74,59,648.51 1,52,32,859.00 3,07,93,829.65 19,81,613.44

NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE (To the extent not written off or adjusted) TOTAL FUNDS EMPLOYED
10

43,27,93,366.13

39,74,60,743.65

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH 2011 49

SR. NO.

PARTICULARS INCOME
Gross Sales Less Returns Less: Taxes Net Sales Less Returns Domestic Export Net Sales Other Income

SCH NO.

YEAR ENDED 31.03.2011 (RS.)

45,49,81,543.99 5,77,26,385.00 37,16,29,703.71 2,56,25,455.28 39,72,55,158.99 40,47,695.17

YEAR ENDED 31.03.2010 (RS)

30,87,33,479.58 3,40,06,636.37 24,09,40,298.59 3,37,86,544.62 27,47,26,843.21 80,41,950.81

11

I.

12

TOTAL EXPENDITURE
Cost of Material consumed Increase/ decrease in Inventories Cost of Employment Manufacturing Expenses Administrative & Selling Expenses Finance Cost Depreciation 13 14 15 16 17 18 5

40,13,02,854.16

28,27,68,794.02

II.

19,99,39,046.10 82,49,240.00 6,18,17,740.50 3,04,03,588.57 3,40,34,825.93 3,62,11,380.95 2,11,81,530.00

12,86,32,311.78 (84,52,975.00) 5,68,47,258.41 2,25,80,876.21 2,79,19,109.68 3,20,62,288.48 2,10,16,702.61

III.

TOTAL PROFIT BEFORE TAX PROVISION FOR TAXATION

39,18,37,352.05 94,65,502.11

28,06,05,572.17 21,63,221.85

IV.

Current Tax Deferred Tax MAT Entitlement Credit

17,56,316.00 22,26,216.00 (17,56,316.00)

3,38,130.00 (86,27,937.00) (3,38,130.00)

PROFIT AFTER TAX V.

Prior Year adjustments Add: Balance in Profit & Loss Account B/F

72,39,286.11
(6,719.95)

1,07,91,158.85
(1,07,97,878.80)

PROFIT AVAILABLE FOR APPROPRIATION

Balance Carried to Balance Sheet Earning per share-Basic

72,32,566.16
72,32,566.16 Rs.0.78 19

(6,719.95)
(6,719.95) Rs.1.49

VI

NOTES FORMING PART OF ACCOUNTS

TURN OVER:
50

Turnover
5000 Rs.(in Lakhs) 4000 3000 2000 1000 0 2007-08 2008-09 2009-10 2010-11 2515.29 2568.39 3087.33 4549.81

Year

51