A STUDY ON

“CASH FLOW STATMENT”

(WITH SPECIAL REFERENCE TO TULASI SEEDS PVT. LTD., ARANDALPET,
GUNTUR)

A PROJECT REPORT SUBMITTED TO JAWAHARLAL NEHRU

TECHNOLOGICAL UNIVERSITY, KAKINADA IN PARTIAL FULFILMENT OF
THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION

Submitted by
M.MEGA SAI LAKSHMI
REGD. NO.: 17BJ1E00D4

Under the Guidance of

Mr. Chaluvadi BVL Sudheer
MBA., (Ph.D)
Assistant Professor
 DEPARTMENT OF MANAGEMENT STUDIES
ST. MARY’S GROUP OF INSTITUTIONS GUNTUR
[Approved by AICTE & Affiliated to JNTU Kakinada,
Accredited by NAAC]
Chebrolu [V& M], Guntur-522212, A.P.

2017 - 2019
 ST. MARY’S GROUP OF INSTITUTIONS GUNTUR
DEPARTMENT OF MANAGEMENT STUDIES

CERTIFICATE
This is to certify that the project report entitled “A STUDY ON CASH
FLOW STATEMENTS”, with special reference to “TULASI SEEDS PVT.
LTD., ARANDALPET, GUNTUR” is being submitted by M Mega Sai
Lakshmi, Regd. No. 17BJ1E00D4 in partial fulfillment for the award of
Master of Business Administration in the department of Management
Studies has been carried out by her under my guidance and supervision.

Head of the Dept. Project Guide

External Examiner Principal

 DECLARATION

I hereby declare that this project work entitled “A STUDY ON CASH

FLOW STATEMENTS”, with special reference to “TULASI SEEDS PVT.
LTD., SANGADIGUNTA, GUNTUR” submitted to JNT University, Kakinada
by me under the guidance of Mr. Chaluvadi BVL Sudheer MBA., (Ph.D) , Assistant
Professor, Dept. of Management Studies. It is for partial fulfillment of the
requirements for the award of Degree of Master of Business Administration. It is
entirely based on my own study is being submitted for the first time and it has not
been submitted to any other university or institution for any degree or diploma.

(M.Mega Sai Lakhmi)

17BJ1E00D4
 ACKNOWLEDGEMENTS
I have taken efforts in this project however it would not have been
possible without the kind support and help of many. I would like to
extend my sincere thanks to all of them.

I would like to express my special gratitude and sincere thanks to

our Founder and Correspondent Rev. Dr. K.V.K. Rao, our Beloved
Director & Principal Dr. B. Penchaliaiah, and Head of the Dept. for
their valuable and constructive suggestion during the planning and
development of this project work.

I take this opportunity to express my profound gratitude to my

project guide Mr. Chaluvadi BVL Sudheer for his valuable guidance
and cooperation throughout the project work. I am obliged to all other
faculty members who helped me directly and indirectly for the successful
completion of my project work.

I also express my gratitude and heartfelt thanks to my company

guide Mr. K. Chalapathi Rao, “Tulasi Seeds Pvt. Ltd., Arandalpet,
Guntur," who spared his valuable time and all sorts of support for this
project work.

Last but not the least I am grateful to my parents and friends who
supported and encouraged me for the completion of this project work.

M. Mega Sai
Lakshmi
 Table of Contents
Chapter No. Chapter Name Page No.

Introduction
 Need for the Study
 Scope of the Study
Chapter - I 01 – 09
 Objectives of the Study
 Research Methodology
 Limitations of the Study

Industry Profile
Chapter - II & 10 – 26
Company Profile
Chapter - III Theoretical Framework 27 – 53

Chapter - IV Data Analysis and Interpretation 54 – 65

Findings, Suggestions &
Chapter - V 66 – 68
Conclusions
Bibliography 69

Annexure Profit and Loss & Balance Sheets i-v

Chapter – I
 INTRODUCTION
Finance may be defined as the art and science of managing money. The
major areas of finance are:
(i) Financial Services and
(ii) Managerial Finance/Corporate Finance/Financial Management.
While finance services is concerned with the design and delivery of
advice and financial products to individuals, businesses and governments
within the areas of banking and related institutions, personal financial
planning, investments, real estate, insurance and so on, financial
management is concerned with the duties of the financial managers in the
business firm. Financial managers actively manage the financial affairs of any
type of business, namely, financial and non-financial, private and public, large
and small, profit seeking and not-for-profit.
They perform such varied tasks as budgeting, financial forecasting,
cash management, credit administration, investment analysis, funds
management and so on. In recent years, the changing regulatory and
economic environments coupled with the globalization of business activities
have increased the complexity as well as the importance of the financial
managers duties. As a result, the financial management function as become
more demanding and complex.
Management of funds is an important aspect of financial management.
Management of funds acts as the primary concern whether it may be in a
business undertaking or in an educational institution. Financial management,
which is simply meant dealing with management of money matters.
Financial Management
Management of funds is an important aspect of Financial Management.
Management of funds act as the primary concern whether it may be in a
business undertaking or in an educational institution. Financial
Management, which is simply meant dealing with Management of money
matters.
Meaning of Financial Management
By Financial Management we mean efficient use of economic resources
namely capital funds. According to Phillippatus, “Financial Management is
concerned with the Manage trial decisions that results in the acquisition and
financing of short term and long term credits for the firm”.
So the analysis simply states two main aspects of Financial
Management like procurement of funds and an effective use of funds to active
business objective. So the analysis simply states two main aspects of
Financial Management like procurement of funds and an effective use of
funds to active business objectives.
Methods of Financial Management
In the field of financing there are various methods to procure funds.
Funds may be obtained from:
 Long Term Sources.
 Short Term Sources.
Long term funds may be availed by owners that are share Holders,
lenders by issuing debentures, from financial institutions, banks and public at
large short term funds may be availed from commercial banks, public
deposits, etc.
Financial leverage or trading on equity is and important method by
which a finance manager may increase the return to common share holders.
At the same time of evaluating capital expenditure projects methods like
average rate of returns, pay back, internal rate of returns, net present value
and profitability index are used.
A firm can increase its profitability without affecting its liquidity by on
efficient utilization of the current resources at the disposal of the firm. A firm
can increase its profitability.
Scope of Financial Management
Financial management provides a conceptual and analytical frame
work for financial decision making. The finance function covers both
acquisition of funds as well as their allocations. Thus, apart from the issues
involved in acquiring external funds, the main concern of financial
management is the efficient and wise allocation of funds to various uses.
Defined in a broad sense, it is viewed as an integral part of over all
management.
The financial management framework ia an analytical way of viewing
the financial problems of a firm. The contents of this approach are: what is
the total volume of funds an enterprise should commit? What specific assets
should an enterprise acquire? How should the funds required be financed?
Alternatively, the principal contents of the modern approach to financial
management can be said to be:
1. Hoe large should an enterprise be, and how fast should it grow?
2. In what form should it old assets?
3. What should be the composition of its liabilities?
The three questions posed above cover between them the major
financial problems of a firm. In other words, the financial management,
according to the new approach, is concerned with the solution of three major
problems relating to the financial operations of a firm, corresponding to the
three questions of investments, financing and dividend decisions.
Functions of Financial Management
Financial management in the modern sense of the term can be broken
down into three major decisions as functions of finance they are
Investment Decisions
This relates to the selection of assets in which the funds should be
invested by a firm. The assets selection decision of a firm is of two types.
(i) Capital Budgeting.
(ii) Working Capital Management.
Capital Budgeting
Capital budgeting is probably the most crucial financial decision of a
firm. It relates to the selection of an asset or investment proposal or course of
action whose benefits are likely to be available in future over the lifetime of
the project. The long-term assets can be either new or old/existing ones. The
first aspects of the capital budgeting decision relates to the choice of the new
assets out of the alternative available or the reallocation of capital when an
existing asset fails to justify the funds committed. The second element of the
capital budgeting decision is the analysis of risk and uncertainty. Since the
benefits from the investments proposals extend into the future, their accrual
is uncertain. Finally, the evaluation of the worth of a long-term project
implies a certain norm or standard against which the benefits are to be judge.
The requisite norm is known by different names such as cut-off rate, required
rate, minimum rate of return and so on. The standard is broadly expressed in
terms of the cost of capital. The concept and measurement of the cost of
capital is, thus another major aspect of capital budgeting decision. In brief,
the main elements of capital budgeting decisions are:
(i) the long-term assets and their composition,
(ii) the business risk complexion of the firm, and
(iii) the concept and measurement of the cost of capital.
Working Capital Management
Working capital management is concerned with the
management of current assets. It is an important and integral part of financial
management as short-term survival is a prerequisite for long term success.
One aspect of the working capital management is the trade-off between
profitability and risk (liquidity). There is a conflict between profitability and
liquidity. The management of working capital has two basic ingredients: (i)
an overview of working capital management as a whole and (ii) efficient
management of the individual current assets such as cash, receivables and
inventory.
Financing Decisions:
The second major decision involved in financial management is the
financing decision. The investment decision is broadly concerned with the
asset-mix or the composition of the assets of a firm. The concept the
financing decision is with the financing-mix or capital structure or leverage.
The terms capital structure refers to the proportion of debt (fixed-interest
source of financing) and equity capital (variable-dividend securities/sources
of funds). The financing decisions of a firm relates to the proportion of these
sources to finance the investments requirements. There are two aspects of
the financing decisions: first, the theory of capital structure which shows the
theoretical relationship between the employment of debt and the return to
the shareholders. The use of debt implies a higher return to the shareholders
also the financial risk. A proper balance between debt and equity to ensure a
trade-off between risk and return to the shareholders is necessary. A capital
structure with a reasonable proportion of debt and equity capital is called the
optimum capital structure. Thus, one dimension of the financing decision
whether there is an optimum capital structure and in what proportion should
funds be raised to maximize the return to the shareholders? The second
aspect of the financial decision is the determination of an appropriate capital
structure, given the fact of a particular case.
It is concerned with the financing mix, capital structure, cost of capital
etc. The financing decision covers two interrelated aspects.
A. Capital structure Theory and
B. Capital Structure Decision.
Dividend Policy Decisions
The third major decision of financial management is the decision
relating to the dividend policy. The dividend decision should be analyzed to
the financing decision of a firm. Two alternatives are available in dealing with
the profits of a firm: (i) they can be retained in the business itself. The
decision as to which course should be followed depends largely on a
significant element in the dividend decision, the dividend-payout ratio, that is
, what proportion of net profits should be paid out to the shareholders. The
final decision will depends upon the preference of the shareholders and
investment opportunities available within the firm. The second major aspect
of the dividend decision is the factors determining dividend policy of a firm in
practice. It is concerned with the decision of whether the profit of a firm can
be distributed to the shareholders in the form of dividends or they can be
retained in the business.
Key Activities of the Financial Manager
The primary activities of a financial manager are:
(i) performing financial analysis and planning,
(ii) making investment decisions and
(iii) making financing decisions.
(i) Performing Financial Analysis and Planning
The concern of financial analysis and planning is with
 Transforming financial data into a form that can be used to monitor
financial condition,
 Evaluating the need for increased (reduced) productive capacity and
 Determining the additional/reduced financing required.
Although this activity relies heavily on accrual-based financial
statements, its underlying objective is to assess cash flows and develop plans
to ensure adequate cash flows to support achievement of the firm’s goals.
(ii) Making Investment Decisions
Investment decisions determine both the mix and the type of assets
help by a firm. The mix refers to the amount of current assets and fixed assets
consistent with the mix, the financial manager must determine and maintain
certain optimal level of each type of current assets. He should also decide the
best fixed assets to acquire and when existing fixed assets need to be
modified/replaced/liquidated. The success of a firm in achieving its goals
depends on these decisions.
(iii) Making Financing Decision:
Financing decisions involve two major areas: first, the most
appropriate mix of short-term and long-term financial; second, the best
individual short-term or long-term source of financing at a given point of
time. Many of these decisions are dictated by necessity, but some requires an
in-depth analysis of the available financing alternatives, their costs and their
long-term implications.
Role of Financial Managers
The role of a financial manager can be discussed under the following heads:
 Nature of work
 Working conditions
 Employment
 Training, other qualifications and Advancement
 Job outlook
 Earnings
 Related occupations
Let us discuss each of these in a detailed manner.
Nature of Work:
Almost every firm, government agency and organization has one or
more financial managers who oversee the preparation of financial reports,
direct investment activities, and implement cash management strategies.
As computers are increasingly used to record and organize data, many
financial managers are spending more time developing strategies and
implementing the long-term goals of their organization.
The duties of financial managers vary with their specific titles, which
include controller, treasurer or finance officer, credit manager, cash manager,
and risk and insurance manager. Controllers direct the preparation of
financial reports that summarize and forecast the organization’s financial
position, such as income statements, balance sheets, and analyses of future
earnings or expenses. Regulatory authorities also in charge of preparing
special reports require controllers. Often controllers oversee the accounting,
audit, and budget departments. Treasures and finance officers direct the
organizations financial goals, objectives, and budgets. They oversee the
investment of funds and manage associated risks, supervise cash
management activities, execute capital-raising strategies to support a firm’s
expansion, and deal with mergers and acquisitions. Credit managers oversee
the firm’s issuance of credit. They establish credit-rating criteria, determine
credit ceilings, and monitor the collections of past-due accounts. Managers
specializing in international finance develop financial and accounting
systems for the banking transactions of multinational organizations.
Cash managers monitor and control the flow of cash receipts and
disbursements to meet the business and investment needs of the firm. For
example, cash flow projections are needed to determine whether loans must
be obtained to meet cash requirements or whether surplus cash should be
invested in interest- bearing instruments.
Risk and insurance managers oversee programs to minimize risks and
losses that might arise from financial transactions and business operations
undertaken by the institution. They also manage the organization’s insurance
budget.
Financial institutions, such as commercial banks, savings and loan
associations, credit unions, and mortgage and finance companies, as lending,
trusts, mortgages, and investments, or programs, including sales, operations,
or electronic financial services. These managers may be required to solicit
business, authorized loans, and direct the investment of funds, always
adhering to state laws and regulations.
Branch managers of financial institutions administer and manage all of
the functions of a branch office, which may include hiring personnel,
approving loans and lines of credit, establishing a rapport with the
community to attract business, and assisting customers with account
problems. Financial managers who work for financial institutions must keep
abreast of the rapidly growing array of financial services and products.
In addition to the general duties described above, all financial
managers perform tasks unique to their organization or industry. For
example, government financial managers must be experts on the government
appropriations and budgeting processes, whereas healthcare financing.
Moreover, financial managers must be aware of special tax laws and
regulations that affect their industry.
Financial managers play an increasingly important role in mergers and
considerations and in global expansion and related financing. These areas
require extensive, specialized knowledge on the part of the financial manager
to reduce risks and maximize profit. Financial managers increasingly are
hired on a temporary basis to advise senior managers on these and other
matters. In fact, some small firms contract out all accounting and financial
functions too.
The role of the financial manager, particularly in business, is changing
in response to technological advances that have significantly reduced the
amount of time it takes to produce financial reports. Financial managers now
perform more data analysis and use it to offer senior managers ideas on how
to maximize profits. They often work on teams, acting as business advisors to
top management. Financial managers need to keep abreast of the latest
computer technology in order to increase the efficiency of their firm’s
financial operations.
Working Conditions
Financial managers work in comfortable office, often close to top
managers and to departments that develop the financial data these managers
need. They typically have direct access to state-of-the-art computer systems
and information services.
 Financial managers commonly work long hours, often up to 50 or 60
per week. They generally are required to attend meetings of financial and
economic associations and may travel to visit subsidiary firms or to meet
customers.
Employment
While the vast majority is employed in private industry, nearly 1 in 10
works for the different branches of government. In addition, although they
can found in every industry, approximately 1 out of 4 are employed by
insurance and finance establishments, such as banks, savings institutions,
finance companies, credit unions.
Training, Other Qualifications and Advancement
A bachelor’s degree in finance, accounting, economies, or business
administration is the minimum academic preparation for financial managers.
However, many employers now seek graduates with a master’s degree,
preferably in business administration, economics, finance, or risk
management.
These academic programs develop analytical skills and provide
knowledge of the latest financial analysis methods and technology.
Experience may be more important than formal education for some
financial manager positions notably, branch managers in banks. Banks
typically fill branch manager positions by promoting experienced loan
officers and other professionals who excel at their jobs. Other financial
managers may enter the profession through formal management training
programs offered by the company.
Continuing education is vital for financial managers, who must cope
with the growing complexity of global trade, changes in state laws and
regulations, and the proliferation of new and complex financial instruments.
Firms often provide opportunities for workers to broaden their knowledge
and skills by encouraging employees to take graduate courses at colleges and
universities or attend conferences related to their specialty. Financial
management, banking, and credit union associations, often in cooperation
with colleges and universities, sponsor numerous national and local training
programs.
Persons enrolled prepare extensively at home and then attend
sessions on subjects such as accounting management, budget management,
corporate cash management, financial analysis, international banking, and
information systems. Many firms pay all or part of the costs for employees
who successfully complete courses. Although experience, ability, and
leadership are emphasized for promotion, this type of special study may
accelerate advancement.
In some cases, financial managers also may broaden their skills and
exhibits their competency by attaining professional certification. There are
many different associations that offer professional certification programs.
For example, the association for investment management and research
confers the chartered financial analyst designation on investment
professionals who have a bachelor’s degree, pass three sequential
examinations, and meet work experience requirements.
The association for financial professionals (AFP) confers the certified
cash manager credential to those who pass a computer-based exam and have
a minimum of 2years of relevant experience. The institute of management
accountants offers a certified in financial management designation to
members with a BA and at least 2 years of work experience who pass the
institute’s four-part examination and fulfill continuing education
requirements. Also, financial managers who specialize in accounting may
earn the certified public accountant (CPA) or certified management
accountant (CMA) designations.
Candidates for financial management positions need a broad range of
skills. Interpersonal skills are important because these jobs involve managing
people and working as part of a team to solve problems.
 Financial managers must have excellent communication skills to
explain complex financial data. Because financial managers work extensively
with various departments in their firm, a broad overview of the business
solvers, applying their analytical skills to business. They must be comfortable
with the latest computer technology. As financial operations increasingly are
affected by the global economy, financial managers must have knowledge of
international finance. Proficiency in a foreign language also may be
important.
Because financial management is critical for efficient business
operations, well-trained, experienced financial managers who display a
strong grasp of the operations of various departments within their
organization are prime candidates for promotion to top management
positions.
Job Outlook
Some companies may hire financial managers on a temporary basis, to
see the organization through a short-term crisis or to offer suggestions for
boosting profits. Other companies may contract out all accounting and
financial operations. Even in these cases, however, financial managers may
be needed to oversee the contracts.
Computer technology has reduced the time and staff required to
produce financial reports. As a result, forecasting earnings, profits, and costs,
and generating ideas and creative ways to increase profitability will become
a major role of corporate financial manager. Financial managers who are
familiar with computer software that can assist them in this role will be
needed.
Earnings:
The association for financial professionals’ 16 th annual compensation
survey showed that financial officers’ average total compensation in 2006,
including bonuses and deferred compensation, was $261,800.
Related occupations
Financial managers combine formal education with experience in one
or more areas of finance, such as asset management, lending, credit
operations, securities investment, or insurance risk and loss control. Workers
in other occupations requiring similar training and skills include accountants
and auditors; insurance underwriters; loan counselors and officers;
securities, commodities, and financial services sales agents; and real estate
brokers and sales agents.
Need for the Study
Fund flow& Cash flow analysis is a key for interpretation of financial
statement. It is also significant because funds flow& cash flow help the
analysis to have a deep feed into the date in the statement. Figures in their
absolute forms shown in financial statements are neither significant nor able
to be compared since they are basically dumb.
Funds flow and cash flow analysis is used to diagnose the financial
health of the concern in vital, strong, weak and good, generally funds flow
and cash flow analysis represents the figures containing the condensed
report of the position, development and problems of the concern. They are
also facilitated the work of gaining the financial health of the concern.
Totally, funds flow and cash flow analysis is used as a tool for financial
analysis is used as a tool for financial analysis and interpretation.
Scope of the Study
The financial analyst plays a pivotal role in the economy of any
country. They provide necessary instrument and employment to setup
different industries essential for a nation to build strong economy. This
report has been done basically on analysing the theoretical and practical
practices of Financial Analysis & Valuation.
Objectives of the Study
The following objectives have been formulated to make in the study.
 To determine the operation efficiency of the company using ration
analysis.
 To know the changes in financial statement for the past 5 years using
trend analysis.
 To conduct cash flow statement for 2014 – 2018
 To identify the financial strength and weakness of the firm.
Research Methodology
The systematic and scientific study of any research work the
methodology is very important, because it deals with the choice of selecting
the sample, research work design, data to be collected and the technique to
be used for the collection and analysis of data.
I. Primary Data:-
Most of the information is collected from internal interview and
discussions with various officials in the finance department and concerned
executives of other departments.
II. Secondary Data:-
Secondary data means data that are already available i.e., they refer to
the data, which have already been collected and analyzed by someone else.
Secondary data may either be published data or unpublished data. Usually
published data are available in.
The study completely depends upon the secondary data.
 Annual Reports.
 News Papers.
 Trade Journals.
 Reference Books.
 Company Websites.
Limitations of the Study
In spite of having the wholehearted effort, there were some
limitations, which acted as barrier to conduct the program and for doing an
empirical research work, such as:
Time Constraint:
The study is based on the analysis of financial cash flow. But this
allocated time is not enough for a complete and fruitful study.
Lack of Experience:
Due to lack of experience, there is a chance of having some mistake in the
report through best effort has been applied to avoid any kind of mistake.
Secrecy:
Most adequate, exact and updated data have not been available due to
the secrecy of the organisation.
Chapter – II
 INDUSTRY PROFILE
The prospects of the seed industry would require changes in
Government policy, facilitating its development and removing controls and
restrictions. In brief seed industry requires a simple policy and legislation.
Historically, the importance of seed has been recognized since the
Vedic times for increasing food production and quality. However organized
production and supply of quality seed at the national level started in 1963 as
a consequence of the introduction of hybrid technology during 1961- 65.
Growth:
The release of high yield dwarf varieties of wheat and rice by the mid
1960s gave further impetus to the growth of seed industry. This period also
saw the constitution of the Seed Review Team, enactment of Seeds Act, 1996
for regulating the quality of seed and formation of the National Commission
of Agriculture.
This was the period in which the private sector took significant steps
into the seed business. The 1980s witnessed two more important
developments viz., granting of permission to MRTP/FERA companies for
investment in the seed sector in 1987 and the introduction of “NEW POLICY”
on seed development in 1988. The new policy on seed development while
helping liberalize import of vegetable and flower seeds in general and seeds
of other crops in a restricted manner encouraged global seed companies to
enter the seed business of India
Current Status:
To supply the seeds necessary for the five hundred thousand Indian
villages is a big problem. Storage, transportation and timely distribution of
pure seed from village to village calls for careful organization within the State
Department of Agriculture and the willing cooperation of farmers.
Indian’s seed industry has grown in size and level of performance over
the past four decades. It represents a blend of private and public sector
companies / corporations. The private sector comprises approximately 140
seed companies, which includes national, global, regional and other seed
producing and/or selling companies.
The industry has made impressive strides from a modest beginning in
1962-63 to over 5 lakh hectares in seed production in 1995-96. The quantum
of seed distributed also grew from 14 lakh to 70 lakh quintals during this
period. On the inputs supply the certified quality seeds distribution touched a
new high of one million tones during the year 2000 – 2001. It was 0.91
million tons the previous year.
Challenges:
Use of new techniques requires dissemination and training for their
beneficial use. To achieve these goal radical changes will be required in the
existing extension systems. In many cases entirely new approaches for
dissemination of knowledge will be required. These will have to be constant
learning and up gradation of skills to enable transmission of knowledge to
the user.
To realization of the prospects of the industry will also changes in the
government policy, which would facilitate the development of the Indian
Agriculture and seed industry. The policy must aim at governing greater self-
discipline and removing controls and restrictions which inhibit growth and
development.
Role of the Government:
To achieve self-sufficiency in the production through planned
programmes, the distribution of quality seed was rightly considered as a key
factor by the government. The far-sighted and liberal policies of Government
of India has always laid emphasis to build a sound seed industry in the
country and has supported both public and private sector organizations to
develop and to meet the increasing seed demand and also to produce surplus
stocks require for export.
To support expanded activities the “National Seed Programme” was
launched with the financial assistance of the “World Bank” (International
Bank for Reconstruction and Development). In order to make available the
right quality of seed to the Indian farmers in adequate quantities and at
reasonable price in time, the Government of India took various steps
including promulgation of “Seed Act” during 1996 which became operative
throughout the country from October 1969.
The main objective of the Act is to produce quality seed of different
crop varieties under a system of seed certification and testing is voluntary
but the farmers have recognized the importance of quality seed to get higher
production with limited resources available at their end.
High yielding varieties are being released for cultivation in quick
succession by various Agricultural Universities and ICAR institutions through
massive research project and Screening of planting materials. Steps have
been taken during early 1984 to bring seeds within the purview of the
Essential Commodities Act to strengthen the regulation of seed quality and to
economies production at desired levels.
Problems:
Many problems are being faced by the seed industries and farmers for
many years. A number of Multinational corporations have stepped into our
agricultural country to gain control over the seeds and their distribution.
Recently, a new variety of seeds have entered the country. This created many
new problems for the seed industries and farmers.
Generally, a seed may be used either as a food material or as a seed for
another crop. But now, the life in the seed is being taken out for making it to
be used only as a food material and not as a seed for another crop. These
types of seeds are called genetic change or genetic engineering seeds. For
example, BT cotton seed. The farmers are made to purchase those seeds
which are manufactured by the corporation for their crops.
Once the farmers or industries have used these types of seeds, they
face many problems. They have to use only those pesticides which are
produces by those associations for protecting their crops from the pests,
diseases etc. Those would wide Associations use that type of formula itself
while making the seed.
The seed industries in India are facing a big problem with the entering
the world wide organizations into the country. Also the production is down
grading. In 1992, the Experiments conducted by the Monsanto scientist in
Portfolio show that these has been approximately 11.5 percent decrease in
the production of cotton.
Seed Industry in Global Perspective:
The population has been growing at a faster rate in the country. To
increase the production accordingly an “All India Co-coordinated
“organization has been established in 1951 with the assistance of
“Rockefeller Foundation” which belongs to America. As a part of this project,
it produced new seeds of maize in 1961 and cotton seeds in 1971.
Multi-national corporations have stepped into the seed production.
With a view that the State Governments are unable to meet the demand for
seeds correctly, two associations have been established with the help of
Rockefeller Foundation. They are “National Seed Association” 1963 and
“State Farm Corporation of India, 1969. Due to the “Development
Programme” Which came into existence in 1988, many At present there are
more than 700 multinational corporations in India doing seed business
directly or indirectly. 19 multinational companies have made an agreement
with the Indian seed Industries and have been enjoying the leadership in the
seed market. Monsanto, an American Multinational corporation, has acquired
one-fourth part of the MICO seeds industry, one of the biggest seed industries
in India. The acquisition value given by the Monsanto Corporation is more
than 17 times the real value.
Seed Industry in India:
Indian’s seed industry has grown in size and level of performance over
the past four decades. India stands in the 8 th position all over the world in the
production of different variety of crops. Again in each crop there are
thousands of varieties.
To coordinate the seeds research centers and private organizations in
the country and to support the expanded activities, the “National Seed
Programme” was launched in 1967 with the financial assistance of the World
Bank.
In 1960 many private organizations have participated in the
production of seeds. Many seed industries have laid a strong foundation in
the country. Following are some of the major seed industries in India.
 MICO Seeds Private Limited, Mumbai
 Monsanto Holdings Private Limited, Mumbai
 Namdhari Seeds Private Limited, Bangalore
 National Seeds Corporation Limited, New DelhRallis India Limited,
New Delhi
 Sungro seeds Limited, Delhi
 Cargill Hybrids Private Limited, New Delhi
 Pioneer India Limited, Kolkota
 Proagro Seeds Private limited, Chennai
 Sasys Seeds Private Limited, Bangalore
 Sinjent India Limited, Pune.
 Nunhams Seeds Private Limited, Gurgaon.
Seed Industry in Andhra Pradesh:
In Andhra Pradesh the seed industries are many in number. Though
Andhra Pradesh is one among the states in India who have been producing
different varieties of crops, it does not have the major seed industries in it
when compared to other states.
Many seed industries have formed recently in the state. Also the state
is growing industrially and there is sample scope and potential for the entry
and success of new industries.
 The crop producing seasons are different for different states. In
Andhra Pradesh, the crop producing season starts from June and ends with
the month of September. Generally the rain fed crop in situated in the state.
Irrigated crop may not have better results when compared.
The stock to be sold by the seed industries is kept ready during the
starting of the year as the period during which the demand will be more fall
between March and August. The industries in the state start the crop again
the month June Itself. The seed industries in the state market with other
states which form the boundaries of it. The selling period for those states will
vary.
The following are some of the seed industries in Andhra Pradesh.
 Indo American Hybrid Seeds (India) Pvt. Ltd., Hyderabad
 Seed Works India Limited, Hyderabad
 Mourya Agri – Tech, Hyderabad
 Sriram Bioseed Genetics India Ltd., Hyderabad
 Nath Seeds Limited, Hyderabad
 Jk Seeds Limited, Secunderabad
 Nujiveedu Seeds, Limited, Hyderabad
 Tulasai Seeds Private Limited, Guntur
 Venus Crane Seeds Pvt. Ltd., Guntur
 Tammareddy Seeds, Vijayawada
 Gopikrishna Seeds, Mahaboobnagar.
 COMPANY PROFILE
Tulasi Seeds PVT. LTD. Was incorporated on 15th May, 1992 under the
proprietorship of Sri Tulasi Rama Chandra Prabhu. TSPL is the one among the
industries which are being the run under the same management,
Tulasi Seeds Pvt. Ltd.:
It is started in the year 1992. Current year turnover is ₹ 100.00 crores.
Having R&D unit, Green House, Seeds Testing Laboratory, Bio- technology Lab,
100 acres of Farm Land, Research scientists with M.SC.(Agr.) Ph.D, Breeders,
employees 350 regular and 300 seasonal. It is accredited with ISO 9001: 2000.
Coastal Packaging:
A packaging industry manufacturing corrugated boxes started in the year
1977. It is today employing 120 persons. Present turnover is ₹ 6.00 crores and is
accredited with ISO 9001:2000.
Chaitanya Packaging Pvt. Ltd.
It is started in the year 1986 for manufacturing heavy duty export quality
corrugated boxes. The company employed 340 persons as on today and having
turnover of Rs.35.00crores per annum. It is accredited with ISO 9001:2000.
Chandra Transport:
It is started in the year 1980 employing now 60 persons and is having a
fleet of 23 trucks.
Vamsy Trade Links:
It is started in the year 1980 dealing in packing material.
Tulasi Ram Chits Pvt. Ltd.:
It is started in the year 1998. Present auction turnover is ₹ 3.00 crones.
Tulasi Filling Systems:
It is started in the year 2002 for manufacturing office stationary. Now it is
employing 40 persons.
Tulasi Digital Studios:
It is started in the year 2004, for printing of flex & vinyl banners for large
size hoardings with a special focus on quality. Now employees are 60 members.
Turnover is 67.34 lacks.
Tulasi Technosoft Pvt. Ltd:
Started recently, employing 15 members. There is huge Scope for
expansion.
Impact-soft solutions Pvt. Ltd.
It has started recently. It is a placement avenue for software development.
Total group turnover is ₹ 153 crores. Total number of employees is 1000
permanent, 500 persons seasonal.
The company proprietor, Sir Tulasi Ramachandra Prabhu, had received
"Best Management Award" in 1994 from the hands of Former Chief Minister,
Mr. Kotla Vijaya Bhaskar Reddy. Again in this year, he received "Parisramika
Vijetha 2002" award from the Minister of Industries, Mr. Kotagiri Vidyadhar.
Objectives of Tulasi Seeds Private Limited:
The main objective of the company is to provide pure quality and
certified seeds to the farmers and to protect them purchasing the duplicate
seeds.
The farmers are made to purchase the duplicate seeds for their crops
by some of the big corporations whose main objective is to earn profit and
not the well being of the farmers and the crop production.
Once the farmers have used those duplicate seeds, they face many
problems. They have to use only those pesticides which are produced by
those corporations alone for protecting their crops form the pests, diseases,
etc.
The crop production will also be decreased by the use of those seeds.
Tulasi Seeds Private Limited processes and supplies pure qualities seeds and
help the farmers to increase the production.
Location of the Company:
The processing Plant and Research Farm are at Ameenabad. They
are located at Dokiparru in Medikonduru mandal of Guntur district in the
state of Andhra Pradesh. It is only 15 Km from Guntur and is on Guntur –
Narasaraopet highway. It is well connected by both rail and road
transportation. It is only 45 km from Vijawada which is industrially located.
The registered office named “TULASI HOUSE” is located at 4th lane of
Arundelpet in Guntur. It is nearer to the Railway station. The zonal office is
situated at Hyderabad. The Branch office is situated at Nagpur in the state of
Maharastra. About Tulasi Seeds Pvt. Ltd.
Financial Obligations:
 No expenditure was incurred during the year in foreign currency.
 The contingent liabilities at the end of the year were nil.
 The amount de by the company to SSI units was nil
 The company has paid the interest and commissions regularly to the
respective parties.
Future Outlook:
The company has introduced own branded seeds in the local market
along with the partial introduction of them in the states of Maharashtra,
Madhya Pradesh and Karnataka. It has made good progress in the previous
year from the own hybrids of cottonseeds and established its own good will
in the market.
The company is confident of achieving better results in the current
financial year in view of the improving market conditions and the company’s
strategically developed network in various areas. It has been taking all
necessary steps for improving quality of the products and services.
Research and Development and Technology Absorption
 Specific area in which R& D carried out by the company.
 Development of own hybrid seed.
 Benefits derived as a result of the above R & D.
 Improved quality improved productivity and process efficiencies.
 Expenditure on R & D.
 ₹ 3,49,108 spent under own research and development programme
during the year.
 Technology absorption during the year under review is nil.
TSPL Accounting Policies:
Accounting Convention:
In Tulasi Seeds Pvt. Ltd., the financial statements are prepared on
historical cost conventions and in accordance with generally accepted
accounting principles and the provisions of the Companies Act, 1956.
Fixed Assets:
In TSPL, fixed assets are stated at cost of acquisition less accumulated
depreciation.
Depreciation:
In TSPL, Depreciation is provided in accounts of Straight-Line method
at the rates and in the number specified in Schedule XIV of the Companies
Act 1956.
Investments:
Long term investments in TSPL are stated at cost and income thereon
are accounted for on accrual. Provision towards decline in the value of long
term investments is made only when such decline is other than temporary.
Inventories:
Value of Inventories are made as under:- Raw materials and finished
goods are valued at cost or net realizable value whichever in lower. Stores
and spares at cost.
Sales in TSPL:
Sales are inclusive of Excise duty, packing charges and sales tax.
Interest and Discount:
Interest payable and receivable and discounts payable and receivable
are taken into account while preparing financial statements.
Preliminary Expenses:
Preliminary expenses are amortized over a period of ten years.
Research and Development Expenditure:
Revenue expenditure is charged to profit & Loss Account and capital
expenditure is added to the cost of fixed assets in the year in which it is
incurred.
Auditors Fee:
The company accounts are audited by M/s V. Rao & Gopi. It pays the
auditors ₹ 10,500/- per year as a remuneration.
Functional Areas
Marketing
The company mainly markets its products from its processing plant at
Ameenabad. The consumers come to the registered office or to the
processing plant and place their order. The company has its own trucks and
vans for the transportation purposes. It means quick delivery of the materials
ordered by the consumers through these trucks and vans. If any unforeseen
demand arises and orders are placed in plenty, it consults the Chandra
Transport Agency for the delivery of the material ordered. The prices are
fixed basing on its competitors and the variations in the prices of the goods in
the market. Advertising of seeds is done by the company.
The advertisement relating to the company seeds are given in daily
newspapers like ‘VAARTHA’ and monthly journals like ‘ANNADAATA’, etc..
The advertisement and business promotion expenses are included in the
selling and distribution expenses while preparing the financial statements.
The advertisement expenses during the year incurred by the company are
less than the previous year. The packing of the seeds is the last stage in
processing.
The packages are kept in corrugated boxes and sent for delivery to
consumers. These packing expenses are included in the sale price.
The distribution is the main function in the marketing of seeds of the
company. It maintains good relations with its dealers, distributors and
farmers. The company conducts and organizes the meetings where the
farmers, dealers and distributors come for the discussions.
This facilitates good understanding between them and finally leads to
the overall development of both the company and the members. The farmers
and dealers directly approach the company and reserve the material they
want to purchase by marking advance payments.
Administration:
Recruitment in Tulasi Seeds Pvt. Ltd., is done mainly through internal
sources. It has good relations with its employees, workers, farmer’s dealers
and distributors. Promotion is mainly based on seniority. It maintains
farmer’s guest house at the processing plant. Programms were also arranged
on relevant topics as Safety, Role of employees, Self- development,
Productivity, Human relation, Health etc.
Financial:
Tulasi seeds private limited use both its own capital and debt to
perform its activities. The company aims at wealthy maximization, rather
than earning more profits. It maintains proper record if every transaction
showing full particulars when wanted.
The company has adequate internal audit system commensurate with
the size and nature of its business. White God Chits and Finance, one of the
units maintained by the same management itself holds 50% shares.
The company having ₹ 10/- face value each. The parties and
employees to whom loans and advances have been given by the company are
repaying the principal amount stipulated.
Production:
The production profile of Tualsi Seeds Private Limited deals with the
whole issue of processing of various kinds of seeds which includes the
procedure, stockpile, etc., The Company processing of cotton seeds take the
major place among all seeds. The different types of seeds which are being
processed by the company are as follows:
Cotton Seeds:
TCHH - 1 SRI TULASI, LAXMI TULASI KRISHNA TULASI
TCHH – 14, SAVITA, NHH- 44, PKVHY –2,
H-8, H-6, JKHY – 1, MCU – 5 (VT)
L – 389, LK – 861, LRA – 5166, SURABHI.

Chilli Seeds:
KAVYA, KANCHANAMALA, AISWARYA,
MADHUBALA, LCA-2006, CA- 960
X – 235, S-1 G-4.

Jowar Seeds:
CSH – 5 and CSH.
Bhendi Seeds:
P.K and ARKA ANAMIKA.
Tomato Seeds:
PED, PR, PKM, MARUTHAM, T-21 and T- 22.
The company has separate section for maintaining seed testing
laboratories, germination testing room, humidity controlled room, etc.
Laboratory oven is used to remove moisture of the seeds; the seeds
sometimes have more moisture than required. For example, cotton seeds
have generally 10% moisture.
The seeds are kept in the oven and the fans inside remove the
moisture from the seeds to the extent mentioned on the oven. The
programmable Environment Test Chamber is another device used by the
company to know the volume of generation of seeds. For this, a particular
type of paper called germination paper is used. The seeds are kept on the
germination paper and are kept inside the Environment Test Chamber.
The test chamber is kept on at a temperature of 25 degree centigrade
and 90% humidity. The paper is taken out and tested periodically for
knowing the germination power of the seed. There is a germination testing
room in the section which indicates the germination capacity. There will be
some shelf is in the room on which the seeds are kept. The room will be ari-
conditioned. A germination tester attached to the shelf indicates the
germination capacity in percentages.
Finally, a humidity controlled room is maintained by the company. The
room is air-conditioned at the temperature of 30 degree centigrade. Two
pipes will be there in the room. Through one pipe moisture will be going out
and through another pipe outside air will be coming in thus maintaining
same temperature.
The Company has its own Research and Development Programme.
The scientists from their research make the parent seeds which will be
stored in the humidity controlled room. The seeds of the company are given
to the growers to grow the corps in the farms of the company. The crop
period will be about 150 to 170 days. After than the crop is taken bye the
company from the farmers.
For cotton crop, it will be kept in a round machine surrounded by
horizontal beams called dust remover machine. It removes the dust from the
crop. Then it is thrown in the ginning machines. The machines perfectly
separate the dust is sold out in the market. The seeds are taken for delinting
process. In this sufficient quantity of acid is poured in the machine along with
the seeds. The machine revolves and the negligible cotton remained will get
burnt. After that seeds which turn into black color will be dried for one of two
days.
The dried seed are taken for grading. For this a machine called Seed
Grader is used for removing dust and for grading. The seeds are poured in
the machine and the dust, whether big or small will be separated through the
screens the machine had. The lifter air control, a part in the machine,
separates the light and damaged seeds. Then the seeds flow into a gravity
separator. The fans beneath identity the light seeds and separated them from
good seeds. These are again examined by the experienced workers to take off
the useless seeds, if any.
The seeds examined are then poured into a Crop Protection machine
for chemical processing. These chemicals Gaucho, Cruser & Tata are mainly
used in chemical processing. The chemical processing of seeds through the
crop protection machine will help to protect the crop from pests and for
quick germination. These seeds are poured in the packing machine.
The seeds processed with different chemicals are packed separately.
Generally, the seeds processed with Gaucho chemicals have more demand.
There will be a PMC machine by the side of the packing machine which
indicates the weight of the packets new weight will be of 500 grams. The
packets are again packed in cardboard boxes and kept ready for delivery.
Agricultural Background:-
 Member in Research and Extension Advisory Counsil, Angrau,
Hyderabad
 Established Tulasi Seeds pvt.ltd. in the year 1992 with a good motive for
serving farming community by supplying high quality hybrid seeds for
getting higher yields.
 Acting as Chairman and Managing Director for Tulasi Seeds Pvt.Ltd.
 Established Tulasi R&D division in 1994 in an area of 200 acres for
developing superior hybrids and OPVs and it has been recognized DSIR
(Dept, of Science and Industrial Research), Ministry of science &
Technology, Govt., of India New Delhi.
 For development of transgenic Bt cotton hybrids, made agreement with
Monsanto Company for the transfer of Bt technology in promising
"Tulasi" cotton research hybrids and built spacious green houses in
 22,000 sq. ft. area for this purpose.
 Several high yielding hybrids have been developed in crops like cotton,
Chilly, Maize, Sybfriwer pearl i Billet, sorghum Bhendi etc.
 State of the Art Biotechnology Laboratory was constructed and acquired
several modern equipments.
 More than 100 post graduate & Ph. D students have been guided and
helped them for doing their project work in Tulasi Biotechnology
Laboratory.
 This year around 10 Lakh farmers have been benefited by using Tulasi
hybrids.
Awards:-
 Government of AP gave ‘BEST SMALL SCALE INDUSTRIAL AWARD' in
1994.
 APSFC awarded' PARISRAMIKA VIJETA' consecutively for 4 years from
2001.
 Ministry of small scale industries, Govt. of India, given `NATIONAL
AWARD'-2003 handed over the award by Dr.A.P.J.AbdulKalam,
president of India on 28-10-2005 for QUALITY PRODUCTS' issued by Sri
Pranab Mukherjee Union Minister for Labor &Factories, Govt. of A.P.
 Chaitanya packaging Pvt. Ltd. Obtained certificate of merit from capexil,
a recognition of export achievement in respect of paper boxes
sponsored by ministry of commerce & industry, Govt.' of India on 1-10-
2007 at New Delhi for the year 2006-2007.
 Federation of Andhra Pradesh Chamber of commerce and industries.
Red Hills, Hyderabad chosen TULASI SEEDS PVT. LTD., for the award of
EXCELLENCE IN RESEARCH & DEVELOPMENT for 2007.
 Shri Tulasi Ramachandra Prabhu was presented the Best Personality
Award, where his Entrepreneurial and Social Responsibility efforts were
recognized. The Award was presented by Oman Minister – Ahmad Al
Kabse on behalf of the Mega Youth Force at Muscat on 02-Mar-2017.
 CASH FLOW STATEMENTS
A cash flow statement is an important indicator of financial health
because it is possible for a company to show profits while not having enough
cash to sustain operations. It is a financial report that shows to the user the
source of a company's cash and how it was spent over a specific period of
time.
A cash flow statement counters the ambiguity regarding a company's
solvency that various accrual accounting measures create. It also categorizes
the sources and uses of cash to provide the reader with an understanding of
the amount of cash a company generates and uses in its operations, as
opposed to the amount of cash provided by sources outside the company,
such as borrowed funds or funds from stockholders.
The cash flow statement also tells the reader how much money was
spent for items that do not appear on the income statement, such as loan
repayments, long-term asset purchases, and payment of cash dividends
(Ryan 2007).
The statement of cash flows, also called the cash flow statement, is
a financial statement that reports lists the inflows and outflows of cash
during an accounting period. In other words, this report shows what
activities generated money and what activities spent money during the
course of the period.
The statement of cash flows is divided into three main sections based
on the activities of company: operating, investing, and financing.
Operating activities consist of the business events that result in the
bottom line of the company. Basically, these are the transactions that a
company is in the business of doing. For example, a retailer sells inventory.
A manufacturer produces products and a dentist provides services.
The cash received and spent to perform these normal business operations is
reported in the operating section.
 Investing activities consist of buying and selling long-term assets and
other investments. You can think of this section as the amount of money a
company invests in its own capital or traditional investments. A good
example is purchasing a company vehicle or selling an available for sale
security.
Financing activities consist of transactions designed to fund the
operations of the company. Cash received from a bank loan, money spent
repaying creditors, and dividends paid to shareholders are all reported in
this section.
The entire point of the cash flows statement is to show how and where
a company is earning and spending its cash. After all, a profitable company
can have cash shortfalls and not be able to pay its bills. Management analyzes
this financial report to understand why there might be a cash deficiency.
External users like investors and creditors look at the statement of cash
flows to analyze trends in where cash is coming from.
Formula:
Net Cash = Net Operating Cash Flow + Net Financing Cash Flow + Net
Investing Cash Flow
Definition of Cash Flow Statement:
A cash flow statement is a statement of changes in the financial
position of a firm on cash basis.
It reveals the net effects of all business transactions of a firm during a
period on cash and explains the reasons of changes in cash position between
two balance sheet dates.
It shows the various sources (i.e., inflows) and applications (i.e.,
outflows) of cash during a particular period and their net impact on the cash
balance.
According to Khan and Jain:
“Cash Flow statements are statements of changes in financial position
prepared on the basis of funds defined as cash or cash equivalents.”
The Institute of Cost and Works Accountants of India defines Cash
Flow statement as “a statement setting out the flow of cash under distinct
heads of sources of funds and their utilisation to determine the
requirements of cash during the given period and to prepare for its
adequate provision”.
Thus, a cash flow statement is a statement which provides a detailed
explanation for the changes in a firm’s cash balance during a particular
period by indicating the firm’s sources and uses of cash and, ultimately, net
impact on cash balance during that period.
Meaning of Cash Flow Statements:
Cash Flow Statement is a statement which describes the inflows
(sources) and outflows (uses) of cash and cash equivalents in an enterprise
during a specified period of time. Such a statement enumerates net effects of
various business transactions on cash and its equivalents and takes into
account receipts and disbursements of cash.
A cash flow statement summarizes the causes of changes in cash
position of a business enterprise between dates of two balance sheets.
According to AS-3 (Revised), an enterprise should prepare a cash flow
Statement and should present it for each period for which financial
statements are prepared.
The terms cash, cash equivalents and cash flows are used in this
statement with the following meanings:
1. Cash comprises cash on hand and demand deposits with banks.
2. 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. 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 change 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).
3. Cash flows are inflows and outflows of cash and cash equivalents. Flow of
cash is said to have taken place when any transaction makes changes in the
amount of cash and cash equivalents available before happening of the
transaction. If the effect of transaction results in the increase of cash and its
equivalents, it is called an inflow (source) and if it results in the decrease of
total cash, it is known as outflow (use) of cash.
Features of Cash Flow Statement:
The features or characteristics of Cash Flow Statement may be
summarised in the following way:
 It is a periodical statement as it covers a particular period of time,
say, month or year.
 It shows movement of cash in between two balance sheet dates.
 It establishes the relationship between net profit and changes in cash
position of the firm.
 It does not involve matching of cost against revenue.
 It shows the sources and application of funds during a particular
period of time.
 It records the changes in fixed assets as well as current assets.
 A projected cash flow statement is referred to as cash budget.
  It is an indicator of cash earning capacity of the firm.
 It reflects clearly how financial position of a firm changes over a
period of time due to its operating activities, investing activities and
financing activities.
Objectives of Cash Flow Statement:
 It shows the cash earning capacity of the firm.
 It indicates different sources from which cash been collected and
various purposes for which cash has been utilised during the year.
 It classifies cash flows during the period from operating, investing
and financing activities.
 It gives answers to various perplexing questions often encountered
by management, such as why the firm is unable to pay dividend
instead of making enough profit? Why is there huge idle cash balance
in spite of loss suffered? Where have the proceeds of sale of fixed
assets gone? etc.
 It helps the management in cash planning and control so that there
are no shortages or surplus of cash at any point of time.
 It evaluates the ability of the firm to meet obligations such as loan
repayment, dividends, taxes etc.
 A prospective investor consults the cash flow statement to ensure
that his investment gets regular returns in future.
 It discloses the reasons for differences among net income, cash
receipts and cash payments.
 It helps the management in taking capital budgeting decisions more
scientifically. 10. It ensures optimum use of funds for the maximum
benefit of the enterprise.
Utility or Importance of Cash Flow Statement:
Cash Flow Statement is useful for short-term planning and control of
cash. A business entity needs sufficient amount of cash to meet its various
obligations in the near future such as payment for purchase of fixed assets,
payment of debts, operating expenses of the business etc.
It helps the financial manager to make a cash flow projection for the
immediate future taking the data relating to cash inflows and cash outflows
from past records. As such, it becomes easy for him to know the cash position
which may either result in a surplus or a deficit one. Thus, cash flow
statement is another important tool of financial analysis for the management.

Its main advantages are:

1. Evaluation of Cash Position:
It is very helpful in understanding the cash position of a firm. Since
cash is the basis for carrying on business operations smoothly, the cash flow
statement is very useful in evaluating the current cash position of the
business.
2. Planning and Control:
A projected cash flow statement enables the management to plan
and coordinate the financial operations properly. The financial manager can
know how much cash is needed, from where it will be derived, how much can
be generated internally, and how much could be obtained from outside.
3. Performance Evaluation:
A comparison of actual cash flow statement with the projected cash
flow statement will disclose the failure or success of the management in
managing cash resources. Deviations will indicate the need for corrective
actions.
4. Framing Long-term Planning:
The projected cash flow statement helps financial manager in
exploring the possibility of repayment of long-term debts which depends
upon the availability of cash.
5. Capital Budgeting Decision:
A projected cash flow statement also helps the management in taking
capital budgeting decisions.
6. Liquidity Position:
Liquidity position of a firm refers to its ability to meet short-term
obligations such as payment of wages and other operating expenses etc.
From cash flow statement the financial manager is able to understand how
well the firm is meeting these obligations.
At the same time the ability of the firm in cash earning can be
known from cash flow statement. As a matter of fact, a firm’s profitability is
ultimately dependent upon its cash earning capacity.
Limitations of Cash Flow Statement:
Cash Flow Statement is, no doubt, an important tool of financial
analysis which discloses the complete story of cash management. The
increase in—or decrease of—cash and reasons thereof, can be known,
However, it has its own limitation.
These limitations are:
 Since cash flow statement does not consider non-cash items, it
cannot reveal the actual net income of the business.
 Cash flow statement cannot replace fund flow statement or income
statement. Each of them has a separate function to perform which
cannot be done by the cash flow statement.
 The cash balance as disclosed by the projected cash flow statement
may not represent the real liquid position of the business since it can
be easily influenced by the managerial decisions, by making certain
payments in advance or by post ponding payments.
  It cannot be used for the purpose of comparison over a period of
time. A company is not better off in the current year than the
previous year because its cash flow has increased.
 It is not helpful in measuring the economic efficiency in certain cases
e.g., public utility service where generally heavy capital expenditure
is involved.
 In spite of these limitations, it can be said that cash flow statement is
a useful supplementary instrument. It helps management in knowing
the amount of capital blocked up in a particular segment of the
business.
Cash:
Single most important reasons why many businesses fail regardless of how
good the business is. The physical aspect of cash can be any currency, coins
on hand, bank balances, negotiable money and so forth. Managing cash flow
therefore is vitally important in the soft running, survival and success of a
business (Atrill P. 2004).
The use of some examples has illustrated how cash flow can make the
difference between success and failure. The meaning of failure in this case is
insolvency that is, the company is unable to pay its debts. The term bankrupt
is sometimes used to describe that situation, even though it is only individual
who can be declared bankrupt. But sometimes both terms can be confusing.
Significance of Non-Cash Transactions:
Also known as profitability, non-cash transactions are not included in the
statement of cash flows, but often they need to be disclosed elsewhere in
financial statements. Examples of these types of transactions include:
 Conversion of bonds to stock
 Acquisition of assets by assuming liabilities.
When there are some few of such transaction, it may be fairly
recommended to include them on the same page as the statement of cash
flows but in a separate schedule at the bottom of the statement of cash flows.
Otherwise, the transactions may be reported elsewhere in the financial
statements, clearly referenced to the statement of cash flows. Some other
transactions are generally reported in combination with statement of cash;
these include stock dividends, stock splits, and appropriation of retained
earnings.
Classification of Cash Flows:
According to AS-3 (Revised), the cash flow statement should report
cash flows during the period classified by operating, investing and financing
activities.
Thus, cash flows are classified into three main categories:
 Cash flows from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.

Classifications/Presentation of Cash Flow Statement

Nearly all business transactions completed during the fiscal year
impact cash flow in one way or another, and in summary form they are
factored into the year's cash flow statement. Exactly where on the statement
depends on the nature of the transaction. As noted, the three essential
categories of cash flow are operating activities, investing activities, and
financing activities. The components of each of these will be addressed
separately.
Operating Activities
Operating activities are the fundamental transactions that keep the
business running. Most notably, they include incoming revenue (also known
as net income) from the sale of goods or services and most kinds of outgoing
payments. Cash flow from operating activities doesn't include principal paid
on or received from loans, and only includes transactions that were
completed during the period.
This results in a deferred or prepaid expense. Items such as insurance
premiums that are paid in advance of the coverage period are classified as
prepaid. Sometimes goods or services are received and used by the company
before they are paid for, such as telephone service or merchandise inventory.
These items are called accrued expenses, or payables, and are recognized on
the income statement as an expense before the cash flow occurs. Operating
activities include the production, sales and delivery of the company's product
as well as collecting payment from its customers. This could include
purchasing raw materials, building inventory, advertising, and shipping the
product.
Under IAS 7, Operating Cash Flows Include:
 Receipts from the sale of goods or service
 Receipts for the sale of loans, debt or equity instruments in a trading
portfolio
 Interest received on loans
 Dividends received on equity securities
 Payments to suppliers for goods and services
 Payments to employees or on behalf of employees
  Interest payments (alternatively, this can be reported under
financing activities in IAS 7, and US GAAP)
 Items which are added back to [or subtracted from, as appropriate]
the net income figure (which is found on the Income Statement) to
arrive at cash flows from operations generally include:
 Depreciation (decline in value of assets and, loss of tangible asset
value over time)
 Deferred tax, Amortization (loss of intangible asset value over time)
 Any gains or losses associated with the sale of a non-current asset,
because associated cash flows do not belong in the operating section.
(unrealized gains/losses are also added back from the income
statement
Investing Activities:
Investment activities represent the cash flow from the purchase of
long term assets (such as property and equipment) required to make or sell
goods and services.  Investment activities also include purchases of stocks or
other securities, loans made to other businesses. 
A major issue that potential investors have with the investing activities
section is that the money listed here represents activities paid for in cash. In
other words, it includes only the principal or book value of the investment.
So, if an example of company that wanted to purchase $5 million dollars
worth of equipment with only $1 million cash and $4 million in financing,
only the $1 million will show up under investing activities.
Interest and depreciation are classified as operating cash flow, as are
net gains or losses on investments. Because of these distinctions, cash flow
from investment activities is typically more complex to calculate than that
from other categories.
Examples of investing activities are
 Purchase or Sale of an asset (assets can be land, building, equipment,
marketable securities, etc.)
  Loans made to suppliers or received from customers
Financing Activities
Financing activities consist of transactions affecting a company's
liabilities and shareholder equity. Mainly involving how the company obtains
capital and enhances the value of its stock, they include such things as issuing
bonds, payments on debt, paying dividends, and issuing and buying back
stock.
Financing activities include the inflow of cash from investors such
as banks and shareholders, as well as the outflow of cash to shareholders
as dividends as the company generates income. Other activities which impact
the long-term liabilities and equity of the company are also listed in the
financing activities section of the cash flow statement.
Under IAS 7,
 Proceeds from issuing short-term or long-term debt
 Payments of dividends
 Payments for repurchase of company shares
 Repayment of debt principal, including capital leases
 For non-profit organizations, receipts of donor-restricted cash that is
limited to long-term purposes
 Items under the financing activities section include:
 Dividends paid
 Sale or repurchase of the company's stock
 Net borrowings
 Payment of dividend tax
Disclosure of Non-Cash Activities
Under IAS 7, noncash investing and financing activities are disclosed in
footnotes to the financial statements. Under US General Accepted Accounting
Principles (GAAP), noncash activities may be disclosed in a footnote or within
the cash flow statement itself. Noncash financing activities may include
  Leasing to purchase an asset
 Converting debt to equity
 Exchanging noncash assets or liabilities for other noncash assets or
liabilities
 Issuing shares in exchange for assets
The cash flow statement was previously known as the flow of funds
statement. The cash flow statement reflects a firm's liquidity.
The balance sheet is a snapshot of a firm's financial resources and
obligations at a single point in time, and the income statement summarizes a
firm's financial transactions over an interval of time. These two financial
statements reflect the accrual basis accounting used by firms to match
revenues with the expenses associated with generating those revenues. The
cash flow statement includes only inflows and outflows of cash and cash
equivalents; it excludes transactions that do not directly affect cash receipts
and payments. These noncash transactions include depreciation or write-offs
on bad debts or credit losses to name a few. The cash flow statement is a cash
basis report on three types of financial activities: operating activities,
investing activities, and financing activities. Noncash activities are usually
reported in footnotes.
The cash flow statement is intended to
 provide information on a firm's liquidity and solvency and its ability
to change cash flows in future circumstances
 provide additional information for evaluating changes in assets,
liabilities and equity
 improve the comparability of different firms' operating performance
by eliminating the effects of different accounting methods
 indicate the amount, timing and probability of future cash flows
  the cash flow statement has been adopted as a standard financial
statement because it eliminates allocations, which might be derived
from different accounting methods, such as various timeframes for
depreciating fixed assets.
Cash and Cash Equivalent
 Cash Inflows and Cash Outflows
The concept of cash flow can be broadly divided into two
categories, namely the inflow and outflow. The cash inflow, which
is also known as inward cash flow or just cash flow, is generated as
a result of financing, ventures and sales. The cash outflow which is
also known as onward flow of cash is seen as a result of many
factors such as purchases, investments, salaries and administrative
expenditures. The importance of cash flow statement was realized
in the wake of the 2007 recession cycle. Business organizations
have realized the importance of cash flow analysis, and have
started regular audits of cash outflows as well as inflows. This
study of inflow and outflow tends to play a highly instrumental role
on general financial planning and financial management. Ideally,
during the business cycle, money flows in than flows out. This
allows manager to build up cash balances with which to plug cash
flow gaps, seek expansion and reassure lenders and investors about
the health of their business. A point to note is that income and
expenditure cash flows rarely occur together, with inflows often
filling behind. The aim of this knowledge was to speed up the
inflows and slow down the outflows.
 Cash Inflows Key Elements:
 Payment for goods or services from your customers.
 Receipt of a bank loan.
 Interest on savings and investments.
 Shareholder investments.
  Increased bank overdrafts or loans.
 Cash Outflows Key Elements
 Purchase of stock, raw materials or tools.
 Wages, rents and daily operating expenses.
 Purchase of fixed assets - PCs, machinery, office furniture, etc.
 Loan repayments.
 Dividend payments.
 Income tax, corporation tax, VAT and other taxes.
 Reduced overdraft facilities.
Methods of Preparing Cash Flow Statement:
Cash flow statement can be prepared following ways
Formats for Cash Flow Statement

Reconciles from net income to

Indirect cash income to cash provided
by operating activities.

Reports all cash receipts

Direct and cash payments from
operating activities.
Direct Method
Companies that use the direct method are required, at a minimum, to
report separately the following classes of operating cash receipts and
payments:
 Receipts:
 Cash collected from customers
 Interest and dividends received
 Other operating cash receipts, if any
 Payments:
 Cash paid to employees and suppliers of goods or services (including
suppliers of insurance, advertising, etc.)
 Interest paid
 Income taxes paid
Indirect Method.
The indirect method, by contrast, reports operating cash flow based on
changes in the balance sheet (the distribution of assets and liabilities) from
period to period as they relate to net income. Thus, instead of reporting the
total cash received from customers, an indirect statement only lists the
change in cash received from the previous period. The net cash flow reported
should be the same as in the direct method, but in the indirect method the
level of detail tends to be less.
The key elements of the operating activities section using the indirect
method are as follows:
 Net income
 Depreciation and amortization
 Deferred income taxes
 Interest income
 Change in accounts receivable
 Change in accounts payable
 Cash Flows from Operating Activities
(Indirect Method)
Particulars Amount (₹)
Net profit/Loss before Tax & Extraordinary Items
ADD:
Deductions already made in Statement of Profit and Loss on account
of Non-cash items such as Depreciation, Goodwill to be Written-off
Deductions already made in Statement of Profit and Loss on Account XXXX
of Non-operating items such as Interest.
LESS: XXXX
Additions (incomes) made in Statement of Profit and Loss on Account of
Non-operating items such as Dividend received, Profit on sale of Fixed
Assets. XXXX
Operating Profit before Working Capital Changes
ADD:
Increase in Current Liabilities XXXX
Decrease in Current Assets XXXX
LESS:
Increase in Current Assets XXXX
Decrease in Current Liabilities XXXX
Cash Flows from Operating Activities before Tax and
Extraordinary Items
LESS:
Income Tax Paid XXXX
ADD/LESS: Effects of Extraordinary Items XXXX
Net Cash from Operating Activities XXXXX
DATA ANALYSIS & INTERPRETATION
 Statement Showing Change in Working Capital during the Period
2012 - 13
Particulars 2012 2013 Changes in Working
(₹) (₹) Capital
Increase Decrease
Current Assets:
Inventories 135,29,84,499 143,18,24,825 7,88,40,326 ---
Sundry Debtors 12,48,86,536 11,21,33,122 --- 1,27,53,414
Cash & Bank 5,52,57,959 5,02,62,789 --- 49,95,170
Balances
Other Current 6,52,331 10,21,849 3,69,518 ---
Assets
Loans & Advances 6,04,77,777 38,99,83,272 32,95,05,495 ---
Tot. Current Assets 159,42,59,102 198,52,25,857

Current Liabilities & Provisions:

Sundry Creditors 73,50,00,018 98,06,42,659 --- 24,56,42,641
Unclaimed 1,32,78,884 1,59,00,940 --- 26,22,056
Liabilities
Advances Received 47,48,503 17,03,313 30,45,190 ---
against Sales
Trade Deposits 75,500 75,500 --- ---
Staff Security 1,65,000 1,45,000 20,000 ---
Deposits
Interest Assumed 2,03,04,519 1,80,81,254 22,23,265 ---
but not due on
Loans
Provisions 4,92,10,370 33,54,02,259 --- 28,61,91,889
Total Current 82,27,82,794 135,19,50,925
Liabilities &
Provisions
Net Working Capital 77,14,76,308 63,32,74,932
(CA - CL)
Decrease in --- 13,82,01,376 13,82,01,376
Working Capital
Total 77,14,76,308 77,14,76,308 55,22,05,170 55,22,05,17
0

Interpretation:
The change in working capital in this year has been decreased by ₹
13,82,01,376. There has been increased by inventories ₹ 7,88,40,326 and
loans& advances by ₹ 32,95,05,495. The sundry creditors have been
increased by ₹ 24,56,42,641and provisions by ₹ 28, 61,91,889.
 Adjusted Profit & Loss Account (For the year 2012 - 13 )
Particulars Amount Particulars Amount
In ₹ in ₹
To Depreciation of Fixed 5,68,70,347 By Opening balance 5,22,91,107
Assets
To Provision for Tax 24,33,62,888 By Gain on Sale of ---
Fixed Assets
To Proposed Dividend 8,50,38,787 By Gain on Sale of ---
Investments
To Goodwill written off --- By Over provision ---
for Taxation written
off (back)
To Loss on Sale of Fixed ---
Assets
To Transfer to General 28,16,68,973
Reserve
To Transfer to Sinking ---
Fund
To Discount on Issue of ---
Shares & Debentures
To Other Provisions ---
To Closing Balance 12,88,21,107
By funds from 74,57,81,321
Business Operations
79,80,72,428 79,80,72,42
8

Interpretation:
The main source of fund is income/profit from business operations i.e. ₹
74,57,81,321
 Cash Flow Statement (For the year 2012 - 13)
Cash Flow statement for the Year ended 31st March 2013
Particulars Amount ₹ Amount ₹ Amount ₹
1. Cash Flows from Operating
Activities:
Net profit (as per P&L)
Add: Depreciation of Fixed Assets 7,88,43,326
Provision for tax 5,68,70,347
Proposed dividends 8,50,38,787
Transfer to General Reserve 28,16,68,973 74,57,81,321
Operating Profit before Working
Capital Changes (OPBWCC):
Add: (ICL&DCA) 1,80,41,869
LESS: (ICA&DCL): (72,20,93,545 (704051676)
Net Cash Flows from Operating )
Activities(A) 4,17,29,645
2. Cash Flows from Investing
Activities:
Add: Sale of Building, Sale of Fixed
Assets, Sale of Computers &
Furniture, Sale of Vehicles, Plant & 6,25,93,480
Machinery (37,85,63,185
Less: Purchase of Fixed Assets )
Net Cash Flow from Investing (31,59,69,705
Activities(B): )
3. Cash Flow from Financing
Activities:
Add: Payment of Secured Loans 38,02,35,486
Unsecured Loans 75,40,890
Net Cash Flow from Financing
Activities (C): 38,77,76,376 38,77,76,376
Net Increase in Cash and Cash
Equivalents (A+B+C): 11,35,36,316
Cash and Cash Equivalents at the
Beginning of the Year 135,29,84,499
Cash and Cash Equivalents at the
End of the Year 145,65,20,815
 Statement Showing Change in Working Capital during the Period
2013 – 14
Particulars 2013 2014 Changes in Working Capital
₹ ₹ Increase Decrease
Current Assets:
Inventories 21,95,88,087 26,68,60,982 47,27,2,895 ---
Sundry Debtors 22,05,70,852 43,37,15,019 21,31,44,167 ---
Cash and Bank 28,50,972 12756084 ------ 99,05,112
Balances
Deposits and 24,46,006 24,12,8,575 --- 2,16,82,569
Advances
Prepaid Expenses 35,90,934 45,63,419 9,72,485 ------
Total Current Assets 44,90,46,852 74,20,24,081
Current Liabilities
and Provisions:
Sundry Creditors 48,3,51,627 6,64,55,177 18,1,03,550 ---
Sundry Creditors for 41,5,98,765 2,95,13,450 ---- 1,20,85,314
Expenses
Advances Received 28,57,74,216 51,52,20,060 22,94,45,843 ---
Against Sales
Trade Deposits ------ ------ --- ---
Deposits Received 3,049,966 49,65,000 19,15,034 ---
from Distributors
Rent Deposit 10,000.00 ------ 10,000 ---
Received 40,77,198 21,6,80,725 --- 1,76,03,526
Provisions
Total Current 38,28,61,773 637834413
Liabilities &
Provisions
Net Working Capital 66,1,85,078 10,41,89,668 --- ---
(CA-CL)
Increase in Working 3,80,04,589 --- --- 3,80,04,589
Capital
Total 10,40,89,668 10,40,89,668 51,08,63,975 51,08,63,975
INTERPRETATION:
During the year there has been increase in working capital by ₹
3,80,04,589.47. This has been due to increase in inventories by ₹
47272895.28 and there has been also increased in sundry debtors ₹
213144167.09 chores. The current liabilities and provisions have been
decreased by ₹ 1,76,03,526.67
 Adjusted Profit & Loss Account (For the year 2013 - 14)
Particulars Amount Particulars Amount
in ₹ in ₹
To Depreciation of Fixed 51,02,09,628 By Opening Balance 10,40,02,991
Assets
To Provision for Tax 27,9,73,251 By Gain on Sale of
Fixed Assets ---
To Proposed Dividend By Gain on Sale of
--- Investments ---
To Goodwill Written Off By Over Provision for
--- Taxation Written Off
(back) ---
To Loss on Sale of Fixed 32,692
Assets
To Transfer to General
Reserve ---
To Transfer to Sinking Fund ---
To Discount on Issue of
Shares & Debentures ---
To Other Provisions ---
To Closing Balance 15,12,75,886
By Funds from 56,04,88,466
Business Operations
66,44,91,457 66,44,91,457

INTERPRETATION:
The main source of fund is from income/ profit from business operation of
Rs. 56,04,88,466.27
 Cash Flow Statement (For the year 2013 - 14)
Cash Flow statement for the Year ended 31st March 2014
Particulars Amount Amount Amount
₹ ₹ ₹
1. Cash flows from operating
activities:
Net Profit/Loss (as per P&L)
Add: Depreciation of Fixed
Asset 47,27,28,95,528
Provision for Tax 51,02,09,628
Proposed Dividends 2,79,73,251
Loss on Sale of Fixed Assets 32,692 56,04,88,466
Operating Profit before
Working Capital Changes
Add: (ICL&DCA) 27,11,56,997
Less: (ICA&DCL): (291078389) (1,99,21,392)
Net cash flows from operating
activities (A): 54,05,67,074
2.Cash Flows from Investing
Activities:
Add: Sale of Building, Sale of
Fixed Assets, Sale of Computers
& Furniture, Sale of Vehicles,
Plant & Machinery 16,85,25,383
Less: Purchase of Fixed Assets (---------------)
Net Cash Flow from Investing
Activities (B): 16,85,25,383
3.Cash Flow from Financing
Activities:
Add: Payment of Secured Loans 13,14,30,609
Unsecured Loans 5,72,698 13,20,03,308
Net Cash Flow from Financing
Activities (C): 13,20,03,308
Net Increase in Cash and Cash
Equivalents (A+B+C): 84,10,95,767
Cash and Cash Equivalents at
the Beginning of the Year: 21,95,88,087
Cash and Cash Equivalents at
the End of the Year: 106,06,83,848
 Statement Showing Change in Working Capital during the Period
2014 – 15
2014 2015 Changes in Working Capital
Particulars Increase Decrease
₹ ₹
Current Assets:
Inventories 26,68,60,982 43,07,87,633 16,39,26,650 ----
Sundry Debtors 43,37,15,019 89,63,10,138 46,25,95,118 ---
Cash and Bank Balances 12,7,56,084 17,28,258 1,10,27,825 ----
Deposits and Advances 24,1,28,575 24,79,487,00 21,6,49,088 ----
Prepaid Expenses 45,63,419 25,66,736 ---- 19,96,683
Total Current Assets 74,20,24,081 133,38,72,253
Current Liabilities &
Provisions:
Sundry Creditors 66,4,55,177 25,42,91,110 ---- 187835933

Sundry creditors for

expenses 29,51,3450 84,2,21,148 5,47,07,698 ----
Advances received against
sales 51,52,20,060 60,90,40,543 9,38,20,483 ---
Trade Deposits ------ ------ --- ---
Deposits received from
distributors 49,65,000 75,19,224 12,4,84,224 ---
Rent deposit received ---- 10,000 10,000 ---
Provisions 63,78,34,413 1,0007,37,270 362902857 ---
Total Current Liabilities
& Provisions 125,39,88,101 195,58,19,297
Net working capital 51,19,64,019 62,19,47,044 --- ---
(CA-CL)
Increase in working 10,99,8
capital 10,99,83,024 --- --- 3,024
Total 62,19,47,044 62,19,47,044 29,78,18,958 29,78,18,958
INTERPRETATION:
During the year 2014-15 it shows that there has been increase in working
capital ₹ 10,99,83,024.92. This is mainly due to increase in inventories to ₹
16,39,26,650.52 and sundry debtors ₹ 46,25,95,118.43. And increase in
current liabilities and provisions by ₹ 36,29,02,857.48. This indicates the
financial position is in weaker position.
 Adjusted Profit & Loss Account (For the year 2014 - 15)
Amount Amount
Particulars Particulars
₹ ₹
To Depreciation of 17,72,10,982.9
Fixed Assets 13,4,01,282.92By Opening balance 0
By Gain on Sale of
To Provision for Tax 33,4,29,825 Fixed Assets ---
By Gain on Sale of
To Proposed Dividend 1,44,00000.00 Investments ---
By Over provision
To Goodwill written for Taxation written
off --- off (back) --
To Loss on Sale of
Fixed Assets 10,428
To Transfer to General
Reserve ---
To Transfer to Sinking
Fund ---
To Discount on Issue
of Shares &
Debentures ---
To Other Provisions ---
32,81,37,633.4
To Closing Balance 2
21,21,68,186.4
By Funds from 4
Business Operations
38,93,79,169.3 38,93,79,169.3
4 4

INTERPRETATION:
The main source of fund is from income profit from business operation of ₹
21,21,68,186.44
 Cash Flow Statement (For the year 2014 - 15)
Cash Flow statement for the Year ended 31st March 2015
Particulars Amount ₹ Amount ₹ Amount ₹

1. Cash Flows from

Operating Activities:
Net Profit/Loss (as per P&L) 16,39,26,650.52
Add: Depreciation of Fixed
Assets 1,3401,282.92
Provision for tax 33,429,825
Proposed dividends 1,44,00,000
Loss on sale of fixed assets 10,428 21,21,68,186.44
Operating Profit before
Working Capital Changes
(OPBWCC):
Add: (ICL&DCA) 5,259,21,946.29
LESS: (ICA&DCL): (,3,60,06,790.75) (310084844.43)
Net Cash Flows from
Operating Activities (A): (9,79,16,657.99)
2. Cash Flows from
Investing Activities:
Add: Sale of Building, Sale
of Fixed Assets, Sale of
Computers & Furniture, Sale
of Vehicles, Plant & 20,48,91,150.41
Machinery (---------------)
Less: Purchase of Fixed
Assets 20,48,91,150.41
Net Cash Flow from
Investing Activities (B):
3. Cash Flow from
Financing Activities:
Add: Payment of Secured
Loans 30,21,60,59,754.16
Unsecured loans 9,10,16,557 30,70,76,311.16
Net Cash Flow from
Financing Activities(C):
Net Increase in Cash and
Cash Equivalents (A+B+C): 41,40,50,803.58
Cash and Cash Equivalents
at the Beginning of the
Year: 26,68,60,982.68
Cash and Cash Equivalents
at the End of the Year: 68,09,11,786.26
 Statement Showing Change in Working Capital during the Period
2015 – 16
Particulars 2015 2016 Changes in Working
₹ ₹ Capital
Increase Decrease
Current Assets:
Inventories 43,07,87,633 34,78,70,307 ---- 82,9,17,326
Sundry Debtors 89,63,10,138 104,15,95,752 14,52,85,614 ---
Cash and Bank Balances 17,28,258.98 19,47,75,861 19,30,47,602 ---
Deposits and Advances 24,79,487 10,07,902 ---- 14,71,584
Prepaid Expenses 25,66,736 46,43,011 20,76,275 ----
Total Current Assets 133,38,72,253 15,89,8,92,835
Current Liabilities
and Provisions:
Sundry Creditors 25,42,91,110 103045699 ---- 151245411
Sundry Creditors for
Expenses 84,2,21,148 46586295 ---- 37634852
Advances Received
Against Sales 60,90,40,543 871061097 262020554 ---
Trade Deposits ------ ------ ---- ---
Deposits Received from
Distributors 7519224 8634224 1115000 ---
Rent Deposit Received 10000 62483 52483 ---
Provisions 1000737270 1051204671 50467401 ---
Total Current 1955819297 2080594472
Liabilities &
Provisions
Net Working Capital 62,19,47,044 49,07,01,636 --- ---
(CA - CL)
Decrease in Working --- 13,12,45,407 13,12,45,407 ---
Capital
Total 62,19,47,044 62,19,47,044 734842937 734842937
INTERPRETATION:
During the year 2015-16 it shows that there has been decrease in working
capital ₹ 13,12,45,407.74. This is mainly due to decrease in inventories to ₹
8,29,17,326.2. The current assets like debtors and cash balance have been
increased by ₹ 33,83,32,217.16. This indicates the financial position is
satisfactory.
 Adjusted Profit & Loss Account (For the year 2015 - 16)
Amount Amount
Particulars Particulars
₹ ₹
To Depreciation of
Fixed Assets 15,8,07,551By Opening Balance 19,58,31,201
By Gain on Sale of Fixed
To Provision for Tax 49,1,30,046 Assets ---
By Gain on Sale of
To Proposed Dividend 1,44,00000 Investments ---
To Goodwill Written By Over Provision for
off --- Taxation written Off (back) ---
To Loss on Sale of
Fixed Assets 20,780
To Transfer to General
Reserve ---
To Transfer to Sinking
Fund ---
To Discount on Issue of
Shares & Debentures ---
To Other Provisions ---
To Closing Balance 22,34,62,376
By Funds from Business 3,55,89,492
Operations
23,14,20,693 23,14,20,693

INTERPRETATION:
The main source of fund is from income/profit from business operation of ₹
3,55,89,492
 Cash Flow Statement (For the year 2015 - 16)
Cash Flow statement for the Year ended 31st March 2016
Amount Amount Amount
Particulars
₹ ₹ ₹
1. Cash Flows from
Operating Activities:
Net Profit/Loss (as per
P&L) 8,291,326.2
Add: Depreciation of Fixed 1,58,07,551
Assets 4,91,30,046
Provision for tax 1,44,00,000
Proposed dividends 20,780 3,55,89,492
Loss on sale of fixed assets
Operating Profit before
Working Capital Changes
(OPBWCC): 39,80,44,348.47
Add: (ICL&DCA) (33,62,42,153.73 6,18,02,194.74
Less: (ICA&DCL) )
Net Cash Flows from 9,73,91,686.74
Operating Activities (A):
2. Cash Flows from
Investing Activities:
Add: Sale of Building, Sale
of Fixed Assets, Sale of
Computers & Furniture,
Sale of Vehicles, Plant &
Machinery 71,40,40,208.54
Less: Purchase of Fixed
Assets (39,87,85,078.85)
Net Cash Flow from
Investing Activities (B): 31,52,55,129.69
3. Cash Flow from
Financing Activities:
Add: Payment of Secured
Loans 31,79,52,020.43
Unsecured loans 16,41,38,009
Net Cash Flow from
Financing Activities (C): 48,20,90,029.43
Net Increase in Cash and
Cash Equivalents 89,47,36,845.86
(A+B+C):
Cash and Cash
Equivalents at the 17,28,258.98
Beginning of the Year:
Cash and Cash 89,64,65,104.84
Equivalents at the End of
the Year:
 Statement Showing Change in Working Capital during the Period
2016 – 17
2016 2017 Changes in Working Capital
Particulars
(Rs) (Rs) Increase Decrease
Current Assets:
Inventories 34,78,70,307 26,86,42,921 ---- 7,92,27,385
Sundry Debtors 104,15,95,752 132,36,15,071 28,20,19,318 ---
Cash and Bank
Balances 19,47,75,861 19,2,15,800 --- 17,55,60,060
Deposits and
Advances 10,07,903 87,2,85,817 8,62,77,814 ----
Prepaid Expenses 46,43,011 12,05,8,981 74,15,970 ----
Total Current 15,89,8,92,835 171,08,18,592
Assets
Current Liabilities
and Provisions:
Sundry Creditors 10,30,45,699 81763744 ---- 2,12,81,954
Sundry creditors for
expenses 46,5,86,295 63753981 1,71,67,685 ----
Advances Received ---
Against Sales 87,10,61,097 916210625 4,51,49,527
Trade Deposits ------ ------ --- ---
Deposits Received
from Distributors 86,34,224.00 10334113.00 16,99,889 ---
Rent Deposit 62,483 ---- 62,483.00 ---
Received 21,8,14,871 42786295 2,09,71,423 ---
Provisions
Total Current
Liabilities &
Provisions 105,12,04,671 130,11,48,760
Net Working Capital 53,86,88,163.52 40,96,69,831.7 --- ---
(CA-CL) 8
Decrease in
Working Capital ----- 12,90,18,331 12,90,18,331 ----
Total 53,86,88,163 53,86,88,163 58,97,82,444 58,97,82,444
INTERPRETATION:
During the year 2016 - 17 it shows that there has been decrease in working
capital ₹ 12,90,18,331.74. This is mainly due to decrease in inventories to ₹
7,92,27,385.5 and increase in sundry debtors ₹ 28,20,19,318.54. This
indicates the financial position is satisfactory.
 Adjusted Profit & Loss Account (For the year 2016 - 17)
Particulars Amount Particulars Amount
₹ ₹
To Depreciation of Fixed 16,5,46,573 By Opening Balance 34,78,70,307
Assets
To Provision for Tax 5,15,32,001 By Gain on Sale of Fixed
Assets ---
To Proposed Dividend 1,44,00000 By Gain on Sale of
Investments ---
To Goodwill Written Off --- By Over Provision for
Taxation Written Off
(back) ---
To Loss on Sale of Fixed 64,340
Assets
To Transfer to General ---
Reserve
To Transfer to Sinking ---
Fund
To Discount on Issue of ---
Shares & Debentures
To Other Provisions ---
To Closing Balance 42,03,97,825
By Funds from Business
Operations 16,17,12,389
50,95,82,696 50,95,82,696

INTERPRETATION:
The main source of fund is from income/profit from business operation of Rs.
16,17,12,389.56
 Cash Flow Statement (For the year 2016 - 17)
Cash Flow statement for the Year ended 31st March 2017
Particulars Amount Amount Amount
₹ ₹ ₹
1. Cash Flows from
Operating Activities:
Net Profit/Loss (as per P&L)
Add: Depreciation of Fixed 79227385.5
Assets
Provision for Tax 16546573.06
Proposed Dividends 51532001
Loss on Sale of Fixed Assets 1,44,00,000
Operating Profit before
Working Capital Changes 64340 16,17,12,389.56
(OPBWCC):
Add: (ICL&DCA)
Less: (ICA&DCL)
Net Cash Flows from 16,42,78,394.94
operating activities (A): (39,69,95,058.01 (16,03,08,44,435.9
) )
7,09,46,363.51

2. Cash Flows from

Investing Activities:
Add: Sale of Building, Sale
of Fixed Assets, Sale of
Computers & Furniture, Sale
of Vehicles, Plant &
Machinery 5,28,28,630.2
Less: Purchase of Fixed
Assets (----------------)
Net Cash Flow from
Investing Activities (B): 5,28,28,630.2
3. Cash Flow from
Financing Activities:
Add: Payment of Secured
Loans 29,24,91,063.75
Unsecured Loans 9,07,86,472
Net Cash Flow from
Financing Activities (C): 38,32,77,535.75
Net Increase in Cash and
Cash Equivalents (A+B+C): 32,62,90,416.04
Cash and Cash Equivalents
at the Beginning of the 1,92,15,800.65
Year:
Cash and Cash Equivalents
at the End of the Year: 38,33,75,603.09
FINDINGS
 It has been observed the share capital of company has not increased
from 2013 to 2017.
 The company is taking loans from other sources like banks, financial
institutes etc.
 It has been observed that the company made investments in 2013 only.
Afterwards till 2017 no new investments have been made.
 The total increase in current assets of the company is more than the
total increase in current liabilities for all the years except in the year
2013.
 It has been observed that the net working capital is increased only for 2
years out of 5 years i.e., 2013 – 2014 & 2014 – 2015 and the company’s
funds from operations were in satisfactory position.
 Funds from operation has been increased in the year 2014-15 when
compared to 2013-14.
 In the financial year 2014 to 2015 the working capital is decreased that
means current assets like inventories are increased.
 In 2014 to 2015 Sundry creditors are decreased ₹ 212.81 lakhs
 The year 2014 to 2015 the profit has been decreased to ₹ 1985.76 lakhs
SUGGESTIONS
 It has been observed that the share capital of the company is not
satisfactory from 2013 to 2017. This is not proper position for the
growth of the company. So, it is suggested that the company have to
concentrate on increase in share capital.
 It has been observed that the company has made investments only in
2013. This may affect the reputation of the company in the public.
Hence, I advised the company should increase its investments and
improve its image.
 Over all the company has an unfavorable working capital position.
However, they have to maintain good working capital.
 The company should finance some parts of its current assets with
short-term funds. It should not depend on long-term funds as they
involved higher interest payments.
 The company is required to increased the inventory level unless it
increases its inventory it cannot raise the funds from various sources.
 The company is also required to increase its working capital.
 The company increase its funds from operations than previous year.
So, it has to maintain in the same level.
 The company to increase its current assets to maintain the working
capital in an efficient way.
 Based on the different situations to improve the income level.
 BIBLIOGRAPHY
Sl. Name of the Book Author Publication Years
No
1 Financial Management I. M. Pandey 9/e, Vikas Publishing 2004
Fundamentals of
Prasanna Tata McGraw Hill, 2003
2
Financial Management Chandra New Delhi.
Financial Management M. Y Khan, P. Tata McGraw Hill, 2003
3
- Text and Problems K. Jain New Delhi.
Financial Accounting Maheshwari Vikas Publishing 2009
S. N. House Private
4
Maheshwari Limited, New Delhi.
S.K
Financial Management James C. Pearson Education 2004
5 and Policy VanHorne

Webliography:
www.TSPL.co.in
www.google.com
www.ercap.org
www.wikipedia.com
www.nwda.gov.in
 TULASI SEEDS PVT LTD BALANCE SHEET
Particulars 2017 2016
I Sources of Funds
1 Shareholders Funds
Share Capital (a) 136,283,720 136,283,720
Reserves and Surplus (b) 381,594,030 274,442,631
Total share holders funds (a+b) 517,877,750 410,726,351
2 Loan funds
Secured loans-term loans (a) 5,836,150 71,459,867
Working capital loans - -
Unsecured Loans (b) 621,864 2,694,146
3 Deferred Tax 2,074,221 2,422,712
Total Liabilities 526,409,985 487,303,076
II Application of Funds
1 Fixed Assets
Gross Block 279,566,991 253,454,066
Less: Depreciation 75,060,802 70,472,516
Net Block 204,506,189 182,981,550
Capital working in progress - 25,793,118
2 Investments 103,000,000 103,000,000
3 Current Assets, Loans & Advances
Inventories 88,469,012 81,915,802
Sundry Debtors 106,562,785 72,587,228
Cash & Bank Balance 16,000,111 13,979,132
Loans & Advances 39,635,493 42,656,908
Other current assets 10,250,207 10,717,846
260,917,608 221,765,916
Less: Current Liabilities & Provision 42,013,811 46,237,509
Net Current Assets 218,903,797 175,528,408
4 Miscellaneous Expenditure - -
Total Assets 526,409,985 487,303,076
 TULASI SEEDS PVT LTD BALANCE SHEET
Particulars 2016 2015
I Sources of Funds
1 Shareholders Funds
Share Capital (a) 136,283,720 136,283,720
Reserves and Surplus (b) 274,442,631 197,430,016
Total share holders funds (a+b) 410,726,351 333,713,736
2 Loan funds
Secured loans-term loans (a) 71,459,867 82,656,316,
Working capital loans - -
Unsecured Loans (b) 2,694,146 7,871,423
3 Deferred Tax 2,422,712 2,464,674
Total Liabilities 487,303,076 426,706,149
II Application of Funds
1 Fixed Assets
Gross Block 253,454,066 239,321,833
Less: Depreciation 70,472,516 56,114,481
Net Block 182,981,550 183,207,352
Capital working in progress 25,793,118 948,141
2 Investments 103,000,000 103,000,000

3 Current Assets, Loans &

Advances
Inventories 81,915,802 106,637,987
Sundry Debtors 72,587,228 47,472,850

Cash & Bank Balance 13,979,132 14,308,458

Loans & Advances 42,656,908 42,511,319
Other current assets 10,717,846 12,111,025
221,765,916 223,041,639
Less: Current Liabilities & 46,237,509 83,490,983
Provision
Net Current Assets 175,528,408 139,550,656
4 Miscellaneous Expenditure - -
Total Assets 487,303,076 426,706,149
TULASI SEEDS PVT LTD BALANCE SHEET
Particulars 2015 2014
I Sources of Funds
1 Shareholders Funds
Share Capital (a) 136,283,720 136,283,720
Reserves and Surplus (b) 197,430,016 129,099,888
Total share holders funds (a+b) 333,713,736 265,383,608
2 Loan funds
Secured loans-term loans (a) 82,656,316, 16,264,817
Working capital loans - 71,883,646
Unsecured Loans (b) 7,871,423 16,800,000
3 Deferred Tax 2,464,674 1,033,443
Total Liabilities 426,706,149 371,365,513
II Application of Funds

1 Fixed Assets
Gross Block 239,321,833 163,312,858
Less: Depreciation 56,114,481 45,736,836
Net Block 183,207,352 117,576,022
Capital working in progress 948,141 28,051,678
2 Investments 103,000,000 103,000,000
3 Current Assets, Loans &
Advances
Inventories 106,637,987 59,458,435
Sundry Debtors 47,472,850 59,493,398
Cash & Bank Balance 14,308,458 12,196,274
Loans & Advances 42,511,319 72,690,618
Other current assets 12,111,025 -
223,041,639 203,838,725
Less: Current Liabilities & 83,490,983 81,102,363
Provision
Net Current Assets 139,550,656 122,736,363
4 Miscellaneous Expenditure - 1,450
Total Assets 426,706,149 371,365,513
TULASI SEEDS PVT LTD BALANCE SHEET
Particulars 2014 2013
I Sources of Funds
1 Shareholders Funds
Share Capital (a) 136,283,720 104,790,000
Reserves and Surplus (b) 129,099,888 61,705,414
Total share holders funds (a+b) 265,383,608 166,495,414
2 Loan funds
Secured loans-term loans (a) 16,264,817 18,111,334
Working capital loans 71,883,646 -
Unsecured Loans (b) 16,800,000 -
3 Deferred Tax 1,033,443 753,014
Total Liabilities 371,365,513 185,359,762
II Application of Funds
1 Fixed Assets
Gross Block 163,312,858 111,993,174
Less: Depreciation 45,736,836 37,664,658
Net Block 117,576,022 74,348,516
Capital working in progress 28,051,678 24,941,425
2 Investments 103,000,000 23,000,000
3 Current Assets, Loans &
Advances
Inventories 59,458,435 12,825,449
Sundry Debtors 59,493,398 17,427,754
Cash & Bank Balance 12,196,274 40,057,643
Loans & Advances 72,690,618 54,090,843
203,838,725 124,401,690
Less: Current Liabilities & 81,102,363 61,334,769
Provision
Net Current Assets 122,736,363 63,066,921
4 Miscellaneous Expenditure 1,450 2900
Total Assets 371,365,513 185,359,762
TULASI SEEDS PVT LTD BALANCE SHEET
Particulars 2013 2012

I Sources of Funds
1 Shareholders Funds
Share Capital (a) 104,790,000 104,790,000
Reserves and Surplus (b) 61,705,414 45,555,542
Total share holders funds (a+b) 166,495,414 150,345,542
2 Loan funds
Secured loans-term loans (a) 18,111,334 15,454,725
Working capital loans -
Unsecured Loans (b) - -
3 Deferred Tax 753,014 545,225
Total Liabilities 185,359,762 166,345,492
II Application of Funds
1 Fixed Assets
Gross Block 111,993,174 100,858,145
Less: Depreciation 37,664,658 34,545,525
Net Block 74,348,516 66,312,620
Capital working in progress 24,941,425 22,669,279
2 Investments 23,000,000 23,000,000
3 Current Assets, Loans &
Advances
Inventories 12,825,449 10,635,348
Sundry Debtors 17,427,754 16,454,213
Cash & Bank Balance 40,057,643 38,876,280
Loans & Advances 54,090,843 52,741,467
124,401,690 118,707,308
Less: Current Liabilities & 61,334,769 59,691,952
Provision
Net Current Assets 63,066,921 59,015,356
4 Miscellaneous Expenditure 2900 3000
Total Assets 185,359,762 166,345,492