1.

1 INTRODUCTION
In terms of organizations, cash management could be the actual handling of cash. This could also mean bringing the cash to the banking institution. ON a personal level, a cash management system would help an individual with complete money management. It would involve the expenses, etc. The corporate process of collecting, managing and (short-term) investing cash. A key component of ensuring a company's financial stability and solvency. Frequently corporate treasurers or a business manager is responsible for overall cash management. Successful cash management involves not only avoiding insolvency (and therefore bankruptcy), but also reducing days in account receivables (AR), increasing collection rates, selecting appropriate short-term investment vehicles, and increasing days cash on hand all in order to improve a company's overall financial profitability. Successfully managing cash is an essential skill for small business developers because they typically have less access to affordable credit and have a significant amount of upfront costs they need to manage while waiting for receivables. Wisely managing cash enables a company to meet unexpected expenses in addition to handling regularly-occurring events like payroll.

CASH MANAGEMENT
DEFINITION: The ability or strategy a company uses to ensure that it collects all cash owed to it. For example, cash management may involve contracting a debt collection service to retrieve what is owed by a customer, or, more simply, it may involve depositing cash into a lock box to ensure that it is not stolen.

MEANING: It refers to the efficient management of cash in a business in order to put the cash to work more quickly and to keep the cash in applications that produce income, such as the use of lock boxes for payments.

GOOD CASH MANAGEMENT

Knowing when, where, and how your cash needs will occur, Knowing what the best sources are for meeting additional cash needs; and, Being prepared to meet these needs when they occur, by keeping good relationships with bankers and other creditors. The starting point for avoiding a cash crisis is to develop a cash flow projection. Smart business owners know how to develop both short-term (weekly, monthly) cash flow projections to help them manage daily cash, and long-term (annual, 3-5 year) cash flow projections to help them develop the necessary capital strategy to meet their business needs. They also prepare and use historical cash flow statements to gain an understanding about where all the money went.

CASH MANAGEMENT SOLUTIONS OFFERED IN INDIA

Account reconciliation services. Positive pay. Balance reporting services. Lockbox.

CASH MANAGEMENT IN INDIA

Products offered by banks under collections (paper and electronic): Local cheque collections. High value (0 Day clearing). Magnetic ink character recognition (MICR) (three day clearing of cheques). Outstation cheque collections.

Cheques drawn on branch locations: Cheques drawn on correspondent bank locations. Cheques drawn on coordinator locations. House cheque collections. Outside network cheque collections. Cash collections. ECS-Debit. Post dated cheque collections. Invoice collections. Capital market collections.

Products offered by banks under payments (paper and electronic): Demand drafts/bankers cheques. Customer cheques. Locally payable. Payable at par. RTGS/NEFT/ECS. Cash disbursement. Payments within bank. Capital market payments. Cash Management in India.

1.2 SCOPE OF THE STUDY

The scope of the study is confined to the analysis of Liquidity and Solvency position of the company. The study is focused on cash position in VIJAY HEMANT FINANCE & ESTATES LIMITED. The study helps to find out the utilization of cash. The cash flow statement of VIJAY HEMANT FINANCE & ESTATES LIMITED is analyzed. The financial analysis may help the company to take appropriate financial decision in the future.

1.3 IMPORTANCE OF THE STUDY

The importance of the study is to know the strength and weakness of VIJAY HEMANT FINANCE & ESTATES LIMITED. The study helps in the efficiency of cash position of the company. To provide a quick and effective Management. The importance of the study facilitates the fastest realization of funds. The study helps in observing and maintaining relationship with other companies.

1.4 OBJECTIVES OF THE STUDY

Primary objective: An analytical study on Cash Management in VIJAY HEMANT FINANCE & ESTATES LIMITED. Secondary objectives: To determine the overall performance of cash in the concern. To know the credit worthiness of the concern. To assess the liquidity and solvency position of the firm. To understand the relationship maintained with the trade creditors and the debtors of the firm. To identify the basic forces influencing the cash management of the firm.

1.5 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done. So the research methodology not only talks about the research methods but also considers the logic behind the method used in the context of the research study. Type of Data: The study basically used the secondary data, secondary data means that data that are already available. Here the data was obtained from the publication of the financial statement in the companys Annual reports. Source of Data: The main source are annual reports of the company for the period 2005 to 2010. The source of data includes the Balance Sheet and Profit & Loss A/C, Auditors report and various schedules provided by the companys financial department. Financial Tools: 1. Ratio Analysis. a) Current ratio b) Liquid ratio or Acid test ratio c) Cash position ratio or Absolute Liquidity ratio d) Cash to Current Assets ratio e) Fixed Assets to Current Assets ratio f) Cash to Shareholders Fund ratio g) Proprietary ratio 2. Cash Flow Statement.

1.6 LIMITATIONS OF THE STUDY

As the study is conducted in a short period, the study may not be detailed in all aspects. The study is conducted with the available data gathered from the Annual reports of VIJAY HEMANT FINANCE & ESTATES LIMITED. To draw meaningful inferences information on dispersion of data of various firms is required which is not available. The data is secondary in nature being the records and statements, which experience its own limitations in preparations. The study is conducted in only one branch.

2.1 COMPANY PROFILE

VIJAY HEMANT FINANCE & ESTATES LIMITED, a non banking finance company registered with reserve bank India (RBI) incorporated in 1985 has been going the business of financing for automobiles. The company is promoted by MR.H.PRAKASH CHAND CHORDIA who has got 50 years of rich experience in the field of finance and assisted by his two sons MR.P.VIJAY CHODRIA and P.HEMANT CHORDIA both of whom also have got more than 25 years of experience in financial services sector. Apart from these three the Board of Directors also has got MR.R.NATARAJAN, a retired IAS MR.UGAMRAJ MOOTHA and MR.R.SHANTHILAL CHORDIA who are also very experienced and knowledgeable. The company is listed in Madras stock exchange. The company has a man power of 26 very well experienced personnel. The company has the patronage of about 1000 depositors who have invested nearly 4.27 corers The company has approximately 1500 customers, all in TamilNadu, who are LCV/ HCV OPERATPRS. The company has the full fledged money changing license authorized by RBI. The company has obtained clean chit form RBI, which has been carrying out regular inspections.

SERVICES OFFERED BY THE COMPANY

o Hypothecation of auto mobiles. o Deposits. o Shares.

Hypothecation of auto mobiles: VIJAY HEMANT FINANCE AND ESTATES LIMITED is providing loan to the automobiles. The majority of their investment is in the field of automobiles. Their collect interests as a principle amount form their customers. These are the following fields they Eleas in providing loans. Two wheelers. Cars and lorry. Deposits: On the other side this limited raise income through investing in various shares of other companies as on 31st march 2008 the outstanding amount of public deposit was RS 407.02 lacks as against RS 376.69 lacks in the previous year. Since this company capital adequacy norms as prescribed by reserve bank of India have exceeded more than 15% this company is entitled to accept deposits form without credit rating up to 1.5 times of net owned funds of RS 482.82 lack, which works out to RS 724.23 lacks or 10 crore whichever is less as on 31st march 2008, 69 deposits totaling to RS 17.47 lacks matured for payment and was neither claimed nor renewed, of which 16 deposits amounting to RS6.44 lacks were renewed/ repaid as on date and necessary follow up action is being taken to obtain the depositors instructions to ensure the repayment. Shares: Share are been classified of two type it is public share and authority share. But this company deals only with the authority shares. This authority share is entirely in the hands of managing directors and board of directors. The Vijay hemant finance and estates limited following area investing their investment in shares and dividend. Sundaram finance limited. Kothari sugars and chemicals limited. Southern India depository services. TamilNadu GVT loan and inds. Invest corpn2011. Sardar sarvovar Narmada nigam ltd.

10

CORPORATE GOVERNANCE
Pursuant to the circular of securities and exchange board of India, the madras stock exchange limited has incorporated a clause 45 in the listing agreement on corporate governance with regard to composition of board of directors, audit committee, remuneration of directors, board meeting procedures, management discussion and analysis about the business, Redressal of shareholders grievances and their services. According to the schedule of implementation forwarded by m /s. madras stock exchange limited, the companies whose paid-up share capital is Rs. 3crore and above is requested to comply with the clause 45 of the listing agreement. Since the capital of your company is only Rs.2.49 crore, compliance of clause 45 of listing agreement does not arise. The company has sought with clarification from the stock exchange.

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MEMORANDUM OF ASSOCIATION
The name of the company is VIJAY HEMANT FINANCE AND ESTATES LIMITED. The registered office of the company will be situated in the state of TamilNadu. The main objects for which the company will be established are; (a) To carry on the business of financiers, that is to say , to lend money either with or without security and to such person or persons , firms ,association, companies and bobbies corporate and upon such terms and conditions as the company thinks fit, but the company shall not do banking business as defined in the Banking Regulations Act, 1948. (b) To carry on the business or real estate, developers and agents and inter alia, to purchase for investment or resale and to traffic in land and house or other property of any tenure and any interest therein, and to create, sell and deal in free hold and leasehold ground rents, and to make advances upon the security of land or house or property or any interest therein and generally to deal in traffic by way of sale exchange or otherwise with land and house property, and to develop and turn to account any in particular by laying out and preparing the same for the building purpose, constructing, altering pulling down decorating maintaining, furnishing, fitting up and improving buildings, any by advancing money to and entering into contracts and arrangements, of all kinds with builder, tenants and others. (c) To draw make accept, enclose, discount execute cheques and issue bills of exchange, government of India and other promissory notes, chatter parties, bills of landing, warrants, debentures and other negotiable or transferrable instrument or securities.

12

TO INSURE THE PROPERTY OF THE COMPANY: (a) To sub-let all or any contract from time to time and upon such term and conditions as may be thought expedient. (b) To distribute any of the property of the company among the members in specie but so that no distribution amounting to a reduction in capital be made without sanction of the court as required by the Companies Act, 1956. (c) To open current or deposit accounts with any bank or bankers and to pay money into draw money from such accounts. (d) To borrow and incur debts for the conduct of any business of the company or to purchase or hire goods, material or machinery on credit or otherwise for the purpose of the company. (e) To subscribe for, absolutely or conditionally, purchase or otherwise acquire and to invest in shares, stocks and securities or obligations of any other company.

13

ARTICLES OF ASSOCIATION
a) Regulations contained in table A in first schedule of the companies act, 1956, so far as they are not hereby modified or altered shall to this company b) The authorized share capital of the company is 50.00.000/- ( rupees fifty lakhs only) divided into 5.00.000 equity shares of Rs 10/- each c) The member of the directors shall not be less three and not more than twelve and the first directors shall be MR .H .PRAKASCHAND CHORDIA MR .P. VIJAY CHORDIA MR .R. SHANTILAL CHORDIA d) The directors are not required to hold any qualification shares. The directors may elect any of their body as chairman and may determine. The period for which he is to hold office.

14

VIJAY HEMANT FINANCE AND ESTATES LIMITED Organization chart

MANAGING DIRCTOR

JTMANAGING DIRCTOR

JTMANAGING DIRCTOR

GENERAL MANGER

COMPANY SECRETARY

CHENNAI BR.

COIMBAT ORE BR.

TRICHY BR.

MADURAI BR.

a ACCOUNTS EXC

ADMIN EXC

BR MANGER

BR MANGER

BR MANGER

BR MANGER

MKTG EXECUTIVE

MKTG EXECUTIVE ACC EXECUTIVE DEPOSIT EXECUTIVE 15

MKTG EXECUTIVE ACC EXECUTIVE DEPOSIT EXECUTIVE

MKTG EXECUTIVE ACC EXECUTIVE DEPOSIT EXECUTIVE

re ACC EXECUTIVE erfd DEPOSIT EXECUTIVE

2.2 REVIEW OF LITERATURE WEB-BASED CASH MANAGEMENT

Finacle web-based CASH MANAGEMENTsolution enables banks to offer comprehensive cash management services to businesses, ranging from small enterprises to large corporate houses. Built on new-generation industry standard technologies J2EE and .NET, the modular solution provides corporate customers anytime, anywhere access to real-time consolidated information. It manages cash positions and electronically sends and receives funds in a securemanner, within and across borders. The solution is multi-currency enabled and offers multilingual support. It is also designed to support multiple channels including the Internet and mobile, and can be interfaced with disparate host systems and third-party applications.

CORPORATE CASH MANAGEMENT TO BENEFIT FROM ELECTRONIC PAYMENTS

The new electronic payment products and services offer the corporate clients an improved bottom line by helping manage cash requirements. It helps corporate to make the best use of their funds and provides an effective means of managing their financial requirements. Several of the trends in cash flow forecasting favor the use of electronic payment products like RTGS, Electronic Funds Transfer (EFT) and card payments. Improved technology and systems integration makes it more attractive to use electronic payment products because these methods of payment can be incorporated into firm-wide computing systems. The new forecasting techniques also suggest use of electronic payments, because they offer disaggregated revenue and spending data that can easily be categorized and studied.

16

Electronic payments and cards provide control over incoming funds, and allow companies to limit access to these funds to authorized parties. In addition, limiting corporate purchases to electronic payments makes it easier for firms to monitor cash outflows and prevent unauthorized expenditures, because these payments are easier to document and provide an audit trail. From the perspective of a Corporate, the electronic payment systems ensure speed and security of the transaction processing chain, from verification and authorization to clearing and settlement. Also it gives a great deal of freedom from more costly labor, materials, and accounting services that are required in paper-based processing, better management of cash flow, inventory, and financial planning due to swift bank payments. Bank net Fourth Annual Conference on Payment Systems in Mumbai, India on 16 January 2008will discuss on topics like: How innovations in the payments world could shape CASH MANAGEMENT, How can banks and corporate facilitate one another's business, Linking of electronic payment systems like RTGS, EFT, NEFT, SWIFT etc in cash management etc. Bank net will also release results of Bank Customer Survey on Payment Systems at the conference.

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3.1 DATA ANALYSIS & INTERPRETATION

RATIO ANALYSIS INTRODUCTION: Analysis and interpretation of financial statements with the help of ratios is termed as ratio analyses. Ratio analysis was pioneered by Alexander wall who presented a system of ratio analysis in the year 1909. Alexanders contention was that interpretation of financial statements can be easier by establishing quantative relationships between various items of financial statements. MEANING: A ratio is a mathematical relationship between two items expressed in a quantitative form. Ratio analysis is a process of determining and presenting the relationship of items and group of items in the financial statements. DEFINITION: According to Kennedy and McMillan the relationship of an item to another expressed in simple mathematical from is known as a ratio. Modes of expression of Ratios: Ratio may be expressed in any one or more of the flowing ways: a) In proportion: In this type of expression the amounts of items are expressed in a common denominator. b) In rate or times or coefficient: In this type of expression, a quotient obtained by dividing one item by another is taken as unit of expression. c) In percentage: In this type of expression, a quotient obtained by dividing one item by another is multiplied by one hundred to show the relationship in terms of percentage.

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STEPS IN RATIO ANALYSIS: 1) Selection of relevant information 2) Comparison of calculated ratios 3) Interpretation and reporting. ADVANTAGES: The advantages of accounting ratios are as follows: 1. It is a useful device for analyzing the financial statements. 2. It simplifies, summarizes the accounting figures to make it understandable. 3. It helps in financial forecasting. 4. It facilitates interfirm and intrafirm comparisons. SOME OF THE TYPES OF RATIOS: Current ratio. Liquid ratio or Acid test ratio. Cash position ratio or Absolute Liquidity ratio. Cash to Current Assets ratio. Fixed Assets to Current Assets ratio. Cash to Shareholders Fund ratio. Proprietary ratio.

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CURRENT RATIO
Current ratio is used to assess the firms ability to meet its current liabilities. The relationship of current assets to current liabilities is knows as current ratio. Current Ratio=Current Assets / Current Liabilities. The term Current Assets includes cash in hand, cash at bank, sundry debtors, bills receivable, stock and prepaid expenses, short-term investment or marketable securities. The term Current Liability includes bank overdraft, sundry creditors, and bills payable and outstanding expenses.

TABLE 3.1.1
Year Current Assets Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 8,85,15,986.14 10,20,82,348.05 11,19,63,261.53 13,27,78,745.47 14,65,79,179.92 Current Liabilities Rs. Ps. 3,09,19,901.98 3,34,52,364.26 3,46,36,175.16 3,93,79,851.46 4,32,92,708.06 2.862 3.051 3.232 3.371 3.385 Ratios

Source: Secondary Data

INTERPRETATION
The above table shows that Current ratio of the company is gradually increasing from the year 2005-2006 to 2009-2010 i.e., 2.862, 3.051, 3.232, 3.371, 3.385 respectively.

20

3.1.1 CURRENT RATIOS

21

LIQUID RATIO
Liquid ratio is used to assess the firms short term liquidity. The relationship of liquid assets to current liabilities is known as liquid ratio. It is otherwise called as quick ratio or acid test ratio. Liquid Ratio = Liquid Assets / Current Liabilities. Liquid asset means current assets less stock and prepaid expenses.

TABLE 3.1.2
Year Liquid Assets Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 8,49,33,507.14 10,12,59230.00 11,15,34,652.5 13,27,78,745.47 14,65,79,179.92 Current Liabilities Rs. Ps. 3,09,19,901.98 3,34,52,364.26 3,46,36,175.16 3,93,79,851.46 4,32,92,708.06 2.747 3.027 3.220 3.372 3.386 Ratios

Source: Secondary Data

INTERPRETATION
From the above table Quick ratio in the year 2005-2006 is 2.747. The Quick Ratio increased from the year 2005-2006 to 2009-2010. The standard ratio of the company must be 1:1. It shows that the Quick Ratio is satisfactory.

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3.1.2 LIQUID RATIOS

CASH POSITION RATIO

23

Absolute liquid ratio is a modified form of liquid ratio. This relationship of absolute liquid assets to current liabilities is known as absolute liquid ratio. This ratio is also called as Super Quick Ratio. Cash Position Ratio = Absolute Liquid Assets / Current Liabilities. Absolute liquid asset means cash, bank, and short term investments.

TABLE 3.1.3
Year Absolute Liquid Assets Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 62,25,168.79 72,82,863.76 94,64,205.76 86,16,582.75 99,93,365.64 Rs. Ps. 3,09,19,901.98 3,34,52,364.26 3,46,36,175.16 3,93,79,851.46 4,32,92,708.06 0.201 0.218 0.273 0.219 0.231 Current Liabilities Ratios

Source: Secondary Data

INTERPRETATION
The above table shows that the Cash position ratio of the company is gradually increasing from the year 2005-2006 to 2007-2008 and in the year 2008-2009 it is decreased and again it is increased in the year 2009-2010.

3.1.3 CASH POSITION RATIOS

24

CASH TO CURRENT ASSETS RATIO

25

The term cash stands for cash and bank balance. The relationship of cash to current assets is known as cash to current assets ratio. Cash to Current Assets Ratio = Cash / Current Assets.

TABLE 3.1.4
Year Cash Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 16,16,510.64 17,24,205.61 30,32,842.61 32,64,662.75 43,36,525.64 Current Assets Rs. Ps. 8,85,15,986.14 10,20,82,348.05 11,19,63,261.53 13,27,78,745.47 14,65,79,179.92 0.0183 0.0169 0.0271 0.0246 0.0296 Ratios

Source: Secondary Data

INTERPRETATION
In the year 2006-2007 the Ratio is 0.0169when compared to 2007-2008 it has been increased to 0.0271. In the year 2008-2009 the Ratio is 0.0246 when compared to 2009-2010 it has been increased to 0.0296.

26

3.1.4 CASH TO CURRENT ASSETS RATIOS

27

FIXED ASSETS TO CURRENT ASSETS RATIO

The ratio establishes the relationship between fixed assets and current assets. The objective of calculating this ratio is to ascertain the proportion of long-term funds invested in fixed assets. Fixed Assets to Current Assets Ratio = Fixed Assets / Current Assets. Fixed asset means fixed assets less depreciation.

TABLE 3.1.5
Year Fixed Assets Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2,36,32,629.28 1,73,22,166.00 1,25,15,199.00 86,80,257.00 64,58,493.00 Current Assets Rs. Ps. 8,85,15,986.14 10,20,82,348.05 11,19,63,261.53 13,27,78,745.47 14,65,79,179.92 0.267 0.170 0.112 0.0653 0.0441 Ratios

Source: Secondary Data

INTERPRETATION
In the year 2005-2006 the Ratio is 0.267 and it is gradually decreasing from the year 2006-2007 to 2009-2010 i.e., 0.170, 0.112, 0.0653, 0.0441 respectively.

28

3.1.5 FIXED ASSETS TO CURRENT ASSETS RATIO

29

CASH TO SHAREHOLDERS FUND RATIO

Internal equities refer to shareholders funds or the tangible net worth. Here shareholders refer to only the equity shareholders. Cash to Shareholders Fund Ratio = Cash / Shareholders Fund. Shareholders Funds includes equity share capital, preference share capital, reserves and surplus.

TABLE 3.1.6
Year Cash Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 16,16,510.64 17,24,205.61 30,32,842.61 32,64,662.75 43,36,525.64 Shareholders Fund Rs. Ps. 3,71,50,170.70 3,86,04,232.71 4,04,20,586.78 4,45,56,254.11 4,82,81,691.21 0.0435 0.0447 0.0750 0.0733 0.0898 Ratios

Source: Secondary Data

INTERPRETATION
The above table shows that the Ratio of the company is gradually increasing from the year 2005-2006 to 2007-2008 and a slight decrease in the year 2008-2009.

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3.1.6 CASH TO SHAREHOLDERS FUNDS RATIOS

31

PROPRIETARY RATIO
This ratio shows the relationship between proprietors or shareholders funds and total tangible assets. Proprietary Ratio = Shareholders Funds / Total Tangible Assets. Tangible asset includes all assets except goodwill, preliminary expenses etc.

TABLE 3.1.7
Year Shareholders Funds Rs. Ps. 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 3,71,50,170.70 3,86,04,232.71 4,04,20,586.78 4,45,56,254.11 4,82,81,691.21 Total Tangible Assets Rs. Ps. 2,36,32,629.28 1,73,22,166.00 1,25,15,199.00 8,68,0257.00 64,58,493.00 1.572 2.229 3.229 5.133 7.476 Ratios

Source: Secondary Data

INTERPRETATION
The above table shows that the Proprietary ratio of the company is gradually increasing from the year 2005-2006 to 2009-2010 i.e., 1.572, 2.229, 3.229, 5.133, 7.476 respectively.

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3.1.7 PROPRIETARY RATIOS

33

3.2 CASH FLOW STATEMENT

Meaning: The purpose of cash flow statement is to report a firms cash inflow and outflows, during a period of time, segregated in to three categories: Operating Activities Investing Activities and Financing Activities. The statement of cash flow explains changes in cash and cash equivalent such as treasure bills and the activities that increase and decrease cash. The cash flow statement may be presented using either a direct method (Which is encouraged by financial accounting standards board) or an Indirect Method (which is likely to be the method followed by good majority of firms). CASH FLOW STATEMENThas three activities like as follow: Operating Activities: Shows impact of transactions not defined as investigation or financing activities. These cash flows are generally the cash effects or transaction that enters into the determination of net income. Thus, we see items that not all statement users might think of as Operating flows-items such as dividends and interest received, as well as interest paid. Investing Activities: Shows impact of buying and selling fixed assets or equity securities of other entities. Financing Activities: Shows impact of all cash transactions with shareholders and the borrowing and repaying transactions with lenders.

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IMPORTANCE:
The effects of cash and non-cash investing and financing transaction. A manager can assess the reason for differences between net income and net cash flow from operating activities. It is also helpful for a company to generate future net cash inflows from operations to pay debts, interest and dividends. It gives indication to a companys need for external financing. A cash flow statement is straightforward and easy to understand. It gives a strong indication of how viable the company will be over time. The extent of success or failure of cash planning can be known by comparing the actual cash statement with the budgeted cash flow statement and remedial measures can be taken. It discloses the volume and the speed at which cash flows in different segments of the business.

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STATEMENT OF CASH FLOW for the year 2005-2006

PARTICULARS
(pursuant to listing agreement with stock exchange) (a)cash flow from operating activities Net profit before tax ADD: financial expenses ADDITIONS: Lease equalization Public issue expenses Depreciation Provision for non performing assets Loss on sale of investments Loss on sale of fixed assets DEDUCATIONS: Profit on sale of assets Dividend Income from forex division Operating profit before working capital changes Cash generated from operation Financial expenses Direct taxes paid
4333441.99 3423369.00 7756810.99 (3731666.78) 0.00 (98426.00) 3487397.00 0.00 (950000.00) 6330.00 16216.72 2461517.72 100000.00 (228553.00) 11100.00 1514500.00 0.00 3970.00 25312.26 1426329.26 4994929.01 4333441.99 9328371.00 2005-2006 2004-2005

324634.88 4998880.00 5323514.88

0.00 19666.69 3014960.00 97509.00 0.00 2648048.00

5780183.69 15108554.69

344115.00 92735.43 371413.00 13015.00 20570.00 252.00

4184820.43 9508335.31

93468.12 6330.00 16216.72

116014.84 4025144.21

5556.00 3970.00 25312.26

34838.26 10212004.82

4998880.00 922396.00 5921276.00 4290728.82

Net cash flow operating activities(a)

(B) cash flow from investing activities Bank deposit Purchase of fixed assets Sale of fixed assets Sale of investments Purchase of investments Dividend Income from forex division

Net cash from investing activities(b)

(c) cash flow from financing activities Increase(decrease )in bank borrowings Increase(decrease)in long term borrowings Increase(decrease)in deposit from public Increase(decrease)in deposit from body corporate
(3184230.94) 0.00 4667959.00 0.00 1483728.00 213579.00 1472254.38 1685833.38 (6578619.61) 0.00 1751149.00 (1187905.00) 6015375.61) (298317.53) 1770571.91 1472254.38

Net cash from financing activities(c)

Net increase in cash and cash equivalent (a+b+c) Cash and cash equivalent at the beginning of the year Cash and cash equivalent at end of year

36

STATEMENT OF CASH FLOW for the year 2006-2007

PARTICULAR S
(pursuant to listing agreement with stock exchange) (A)cash flow from operating activities Net profit before tax ADD: financial expenses ADDITIONS: Public issue expenses Depreciation Provision for non performing assets Provision for diminution in investments Loss on sale of investments Loss on sale of fixed assets DEDUCTIONS: Writing back of provision for non performing assets Profit on sale of assets Dividend Income from forex division Operating profit before working capital changes Cash generated from operation Financial expenses Direct taxes paid Net cash from operating activities (A) (B) cash flow from investing activities bank deposit Purchase of fixed assets Purchase of investments Sale of fixed assets Sale of investment Dividend Income from forex division Net cash from investing activities (B) (c)cash flow from financing activities Increase(decrease)in bank borrowing Increase(decrease)in deposit from public Payment of dividend Net cash from financing activities Net increase in cash and cash equivalent(A+B+C) Cash& cash equivalents at beginning of the year Cash& cash equivalents at the end of the year
2006-2007 2005-2006

5716490.36 4484636.00 10201126.36 0.00 2428892.00 0.00 0.00 20990.00 2508795.00 4958677.00 15159803.36 20237.00 3246.00 2070.00 22889.52 48442.52 15111360.84 7596007.44 4484636.00 3410397.00 7895033.00 -299025.56 0.00 -139474.00 -3870250.00 8754.00 2976555.00 2070.00 22889.52 -999455.48 6885470.52 -2652967.00 -1704628.00 2527875.52 1229394.48 1685833.38 2915227.86

4994929.01 4333441.99 9328371.00 19666.69 3014960.00 97509.00 0.00 0.00 2648048.00 5780183.69 15108554.69 0.00 93468.12 6330.00 16216.72 116014.84 14992539.85 4025144.21 4333441.99 3429969.00 7756810.99 -3731666.78 0.00 -98426.00 0.00 3487397.00 -950000.00 6330.00 16216.72 2461517.72 -3184230.94 4667959.00 0.00 1483728.06 213579.00 1472254.38 1685833.38

37

STATEMENT OF CASH FLOW for the year 2007-2008

PARTICULARS
(pursuant to listing agreement with stock exchanges) (A)cash flow from operating activities Net profit before tax ADD: financial expenses ADDITIONS: Public issue expenses Depreciation Provision of nonperforming assets Provision for diminution in investments Loss on sale of investments Loss on sale of fixed assets
2007-2008 2006-2007

10408780.33 5606493.00 16015273.33 0.00 1972647.00 0.00 0.00 0.00 2091974.00 4064621.00 20079894.33 98657.69 103040.00 25400.75 134395.44 5001170.14

5716490.36 4484636.00 10201126.36 0.00 2428892.00 0.00 0.00 20990.00 2508795.00 4958677.00 15159803.36 3246.00 2070.00 22889.52 28205.52 7536007.44

DEDUCTIONS: Profit on sale of investment Divided Income from forex division Operating profit before working capital changes Cash generated from operations Financial expenses Income tax/deferred tax provision Net cash from operating activities(A) (B)cash flow from investing activities Bank deposits Purchase of fixed assets Purchase of investments Sale of fixed assets 872705 sale of investments 1178101 divided 2050806 income from forex division (c) cash flow from financing activities Increase (decrease)in bank borrowing Increase(decrease)in deposits form pubic Payment of divided Increase(decrease)in deposits from body corporate Net cash from financing activities(c) Net increase in cash and cash equivalents(A+B+C) Cash & cash equivalent at beginning of the year Cash & cash equivalent at the end of the year

5606493.00 3362177.00 8968670.00 -3967499.86 -350000.00 -229679.00 -123900.00 0.00 1302000.84 10340.00 25400.75 634162.59 -445017.84 5482454.00 -2910936.00 1500000.00 3626500.16 293162.89 -2652967.00 -1704628.00

4484636.00 3410397.00 7895033.00 -299025.56 0.00 -139474.00 -3870250.00 8745.00 2976555.00 2070.00 22889.52 -999455.48 6885470.52 -2652967.00 -1704628.00 0.00 2527875.52 1229394.48 1685833.38 2915227.86

38

STATEMENT OF CASH FLOW for the year 2008-2009

Particulars
(pursuant to listing agreement with stock exchange) (A)cash flow from operating activities Net profit before tax ADD: financial expenses ADDITTIONS: Depreciation Provision for non performing assets Provision for diminution in investments Loss on sale of investments Loss on sale of fixed assets Deductions: Writing back of provision for non performing assets Profit on sale of investment Divided Income from forex division Operating profit before working capital changes Cash generated from operations Financial expenses Direct taxes paid Net cash from operating activities(A) (B)cash flow from investing activities Bank deposit Purchase of fixed assets Purchase of investments Sale of fixed assets Sale of investments Divided Income from forex division Net cash from investing activities (C)cash flow from financing activities Increase(decrease)in bank borrowings Increase(decrease)in deposits from public Payment of dividend Increase(decrease)in deposit form body corporate Net cash from financing activities Net increase in cash & cash equivalent (A+B+C) Cash & cash equivalent at beginning of the year Cash & cash equivalent at end of the year 10931255.10 6481952.00 17413207.10 2621509.00 219611.00 0.00 0.00 135963.00 2977083.00 20390290.10 0.00 0.00 9965.00 3682.00 13647.00 20376643.10 10950857.72 1972647.00 0.00 0.00 0.00 2091974.00 4064621.00 20079894.33 2008-2009 2007-2008

10408780.33 5606493.00 16015273.00

98657.69 10340.00 25400.75

64841952.00 4290771.00 10772723.00

134398.44 19945495.89 5001170.14

5606493.00 3362177.00 8968670.00 178134.72 3967499.86 350000.00 229679.00 123900.00 0.00 1302000.84 10340.00 25400.75

0.00 1179835.00 1857920.00 644127.00 1553000.00 9965.00 3682.00

1593125.67 3032288.00 2915047.00 0.00

826981.00

445017.84 5482454.00 2910936.00 1500000.00

634162.59

1710366.67 1061520.39 3208390.75 4269911.14

3626500.16 293162.86 2915227.86 3208390.75

39

4.1 FINDINGS
The Current Assets and the Current Liabilities are increasing gradually from the year 2005-2006 to 2009-2010. The company maintains their Liquid Assets or Quick Assets in a satisfactory level i.e., in the standard ratio 1:1. The Cash position of the company is increasing year by year and the Shareholders are benefited based on the cash position of the firm. The Cash Flow Statement of the company shows the cash equivalents at the beginning of the year and at the end of the year. The Fixed Assets Ratio is gradually decreasing from the year 2006-2010. In the year 2005-2006 the Ratio is 0.267 and it is gradually decreasing from the year 2006-2007 to 2009-2010 i.e., 0.170, 0.112, 0.0653, 0.0441 respectively.

40

4.2 SUGGESTIONS
The companys liquidity position is good. It is suggested that the company manages the idle ratio to meet obligations. Proprietary Ratio focuses the attention on the general. A high proprietary ratio will indicate a relatively little danger to the creditors. A low proprietary ratio indicates greater risk to the creditors since in the event of losses a part of their money may be lost besides loss to the proprietors of the business. A ratio below 50% may be alarming for the creditors since they may have to lose heavily in the event of companys liquidation on account of heavy losses. It is suggested that the company is supposed to look over the Fixed Assets of the company to maintain the position in the financial level.

41

4.3 CONCLUSION
From the analysis on the CASH MANAGEMENT at VIJAY HEMANT FINANCE & ESTATES LIMITED, conclude that the firm aims at the wealth of its Shareholders. The company maintains the cash required to meet out the current liabilities at a normal level that shows the company follows an average policy.

42

BIBLIOGRAPHY
Prof. T.S. Reedy Y. Hari Prasad Reddy, MANAGEMENT ACCOUNTING, Margham Publications. Prof. T.S. Reedy Y. Hari Prasad Reddy, FINANCIAL ACCOUNTING, Margham Publications. WEBSITE: www.vijayhemant.com OTHER THAN WEB: Directors Report. Annual Report.

43

BALANCE SHEET PARTICULARS SCHEDULE

SOURCES OF FUNDS:
SHAREHOLDERS FUNDS CAPITAL 1 RESERVES & SURPLUS 2 38604232.71 LOAN FUNDS SECURED LOANS 3 UNSECURED LOANS 4 41397256.23 TOTAL 80001488.9477063698.87 APPLICATION OF FUNDS FIXED ASSETS 5 GROSS BLOCK DEPRICATION NET BOOK VALUE LEASE ADJU A/C NET BLOCK INVESTMENT 6 CURRENT ASSETS,LOANS & ADVANCES CURRENT ASSETS LOANS & ADVANCES TOTAL102082348.0588515986.14 CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES PROVISIONS 44961683.2639713241.39 NET CURRENT ASSETS MISCELLANEOUS EXPENDITURE

31.03.2006

31.03.2005

24916000.00 24916000.00 13688232.7112234170.70 37150170.70 5557476.23 8741707.17 35839780.0031171821.00 39913528.17

40265780.00 56951426.00 22943614.0032101327.00 17322166.0024850099.00 0.001217469.72 17322166.0023632629.28 5558658.15 4608658.15

7 8

4021314.61 7266617.60 98061033.4481249368.54

9 10

33452364.26 30919901.98 11509319.008793339.41 48802744.75 19666.69

57120664.79 11 0.00 TOTAL80001488.9477063698.87

44

BALANCE SHEET PARTICULARS SCHEDULE

SOURCES OF FUNDS:
SHAREHOLDERS FUNDS

31.03.2007

31.03.2006

CAPITAL 1 24916000.00 24916000.00 RESERVES & SURPLUS 2 15504586.7813688232.71 40420586.7838604232.71 LOAN FUNDS SECURED LOANS 3 12442946.75 5557476.23 UNSECURED LOANS 4 33186813.0035839780.00 45629759.7541397256.23 TOTAL 86050346.5380001488.94 APPLICATION OF FUNDS FIXED ASSETS 5 GROSS BLOCK 32817370.00 49265780.00 DEPRICATION 22302171.0022943614.00 NET BOOK VALUE 12515199.0017322166.00 NET BLOCK 12515199.0017322166.00 INVESTMENT 6 6431363.15 5558658.15 CURRENT ASSETS,LOANS & ADVANCES CURRENT ASSETS LOANS & ADVANCES TOTAL111963261.53102082348.05 CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES PROVISIONS 44859477.1544961683.26 NET CURRENT ASSETS TOTAL86050346.5380001488.94

7 8

5232348.11 4021314.61 106730913.4298061033.44

9 10

34636175.16 33452364.26 10223301.9911509319.00

67103784.38

57120664.79

45

BALANCE SHEET PARTICULARS SCHEDULE

SOURCES OF FUNDS:
SHAREHOLDERS FUNDS

31.03.2008

31.03.2007

CAPITAL 1 24916000.00 24916000.00 RESERVES & SURPLUS 2 19640254.1115504586.78 44556254.1140420586.78 LOAN FUNDS SECURED LOANS 3 11997928.91 12442946.75 UNSECURED LOANS 4 40169267.0033186813.00 52167195.9145629759.75 TOTAL 96723450.0286050346.53 APPLICATION OF FUNDS FIXED ASSETS 5 GROSS BLOCK 26441595.95 34817370.00 DEPRICATION 17761339.0022302171.00 NET BOOK VALUE 8680256.9512515199.00 NET BLOCK 8680257.0012515199.00 INVESTMENT 6 5351920.00 6431363.15 CURRENT ASSETS,LOANS & ADVANCES CURRENT ASSETS LOANS & ADVANCES TOTAL132778745.47111963261.53 CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES PROVISIONS 50087472.4544859477.15 NET CURRENT ASSETS82691273.0267103784.38 TOTAL

7 8

4148208.75 5232348.11 128630536.72106730913.42

9 10

39379851.46 3436275.16 10707620.9910223301.99

96723459.0286050346.53

46

BALANCE SHEET PARTICULARS SCHEDULE

SOURCES OF FUNDS:
SHAREHOLDERS FUNDS CAPITAL RESERVES & SURPLUS 48281691.2144556254.11 LOAN FUNDS SECURED LOANS UNSECURED LOANS 56792609.5852167195.91 TOTAL 105074300.7996723450.02 APPLICATION OF FUNDS FIXED ASSETS GROSS BLOCK17125385.0026441569.00 DEPRICATION NET BLOCK6458493.008680257.00 INVESTMENT CURRENT ASSETS,LOANS & ADVANCES CURRENT ASSETS LOANS & ADVANCES TOTAL146579179.92132778745.47 CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES PROVISIONS 53620212.1350087472.45 NET CURRENT ASSETS92958967.7982691273.02 TOTAL 1 2

31.03.2009

31.03.2008

24916000.00 24916000.00 23365691.2119640254.11

3 4

13591054.58 11997928.91 43201555.0040169267.00

5 10666892.0017761339.00

5656840.00

5351920.00

7 8

6101741.64 4148208.75 140477438.28128630536.72

9 10

43292708.06 39379851.46 10327504.0710707620.99

105074300.7996723450.02

47

BALANCE SHEET PARTICULARS SCHEDULE

SOURCES OF FUNDS:
SHAREHOLDERS FUNDS

31.03.2010

31.03.2009

CAPITAL 1 24916000.00 24916000.00 RESERVES & SURPLUS 2 28147565.1523365691.21 53063565.1548265691.21 LOAN FUNDS SECURED LOANS 3 12967494.63 13591054.58 UNSECURED LOANS 4 42930712.0043201555.00 55898206.6356792609.58 TOTAL 108961771.78105074300.79 APPLICATION OF FUNDS FIXED ASSETS 5 GROSS BLOCK 16815470.72 17125385.00 DEPRICATION 11599298.0010666892.00 NET BLOCK 5216172.726458493.00 INVESTMENT 6 6676280.00 5656840.00 CURRENT ASSETS,LOANS & ADVANCES CURRENT ASSETS LOANS & ADVANCES TOTAL154773603.82146579179.92 CURRENT LIABILITIES & PROVISIONS CURRENT LIABILITIES PROVISIONS 57704284.76 53620212.13 NET CURRENT ASSETS97069319.06 92958967.79 TOTAL108961771.78105074300.79

7 8

10518535.35 6101741.64 144255068.47140477438.28

9 10

48506297.77 43293708.06 9197986.99 10327504.07

48