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a)

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CONSOLIDATED FINANCIAL STATEMENT

MEANING
Consolidated financial statements are the "Financial statements of a
group in which the assets, liabilities, equity, income, expenses and cash
flows of the parent (company) and its subsidiaries are presented as those
of a single economic entity", according to International Accounting
Standard 27 "Consolidated and separate financial statements", and
International Financial Reporting Standard 10 "Consolidated financial
statements

Definition
Data such as credit card numbers, credit ratings, account balances, and
other monetary facts about a person or organization that are used in
billing, credit assessment, loan transactions, and other financial activities.
Financial information must be processed in order for business to be
conducted, but it must also be carefully handled by businesses in order to
ensure security for customers and to avoid thlitigation and bad publicity
that can stem from negligent or improper use.

purpose of consolidated financial statements

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The purpose of consolidated financial statements is to present, primarily

for the benefit of the owners and creditors of the parent, the results of
operations and the financial position of a parent and all its subsidiaries as if
the consolidated group were a single economic entity.

FINANCIAL REPORTING
The Financial Accounting Standards Board, in its Statements of
Financial Accounting Concepts, asserted that financial reporting includes
not only financial statements but also other means of communicating
information that relates, directly or indirectly, to the information provided
by the accounting system. Financial reporting is the process of
communicating financial accounting information about an enterprise to its
external users. Financial statements provide information useful in
investment and credit decisions and in assessing cash flow prospects.
They provide information about an enterprise's resources, claims to those
resources, and changes in the resources.
Financial reporting is a broad concept encompassing financial statements,
notes to financial statements and parenthetical 'disclosures, supplementary

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information (such as changing prices), and other means of financial

reporting (such as management discussions and analysis, and letters to
stockholders). Financial reporting is but one source of information needed
by those who make economic decisions about business enterprises.
Financial reporting focuses primarily on providing information about
assets, liabilities, sales, and earnings. Information about earnings based on
accrual accounting usually provides a better indication of an enterprise's
present and continuing ability to generate positive cash flows than that
provided by cash receipts and payments. Accrual accounting is an
accounting method that reports sales and expenses when they occur,
instead of when the actual cash transactions to take place.

MAJOR OF CONSOLIDATED FINANCIAL

STATEMENTS
The basic financial statements of businesses include the (1) balance sheet
(or statement of financial position), (2) income statement, (3) cash flow
statement, (4) the retained earnings statement, and (5) statement of
changes in owner's equity. The balance sheet lists all the assets, liabilities,
and owner's or stockholders' equity (the difference between assets and
liabilities), of a company as of a specific date. Hence, the balance sheet is
essentially a still picture of a company's financial position (see Figure 1).
The income statement, on the other hand, is similar to a moving picture of

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a company's operations during a given period. The income statement

presents a summary of the revenues, gains, expenses, losses, and net
income or net loss of an entity for a specific period (see Figure 2).
The cash flow statement summarizes a business's cash receipts and cash
payments relating to its operating, investing, and financing activities
during a particular period (see Figure 3). Whereas the income statement
reports a company's financial activities on an accrual basis, the cash flow
statement reports this information on a cash basis.
Because retained earnings represent a company's earnings since it was
founded minus any money deducted or distributed to the owners of the
company, the statement of retained earnings reports a company's overall
earnings. A statement of retained earnings presents the changes in retained
earnings for a designated accounting period. Filed by corporations, this
financial statement reconciles the balance of the retained earnings account
as follows:
Retained earnings, January 1, 1997 $100,000
Net Income for 1997 $85,000
Minus: Dividends for 1997 $65,000
Net Increase in Retained Earnings 20,000

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Ending retained earnings, December 31, 1997 $120,000

A statement of changes in owner's equity is the equivalent financial
statement for sole proprietorships when a company is owned by a single
person. This financial statement reports a company's growth or loss in
equity during a designated period. The statement follows the same format
as the statement of retained earnings, except for items pertaining only to
corporations.
For an item to be recognized in the financial statements, it should meet
four fundamental recognition criteria, subject to cost-benefit constraint
and a materiality threshold. These criteria are:

Definitions: The item meets the definition of an element of

financial statements.

Materiality: It has a significant attribute measurable in units of

money with sufficient reliability.

Relevance: The information about it is capable of making a

difference in user decisions pertaining to a company's value and its
financial management.

Reliability: The information is representational, faithful, verifiable,

and neutral.

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When accountants are unsure of whether to include certain items in

financial reports they follow two constraints to these criteria: a benefit/cost
constraint and the materiality constraint. The benefit/cost constraint asserts
that the cost of collecting, processing, auditing, and communicating the
information will not exceed the benefits to be derived from its use. The
materiality constraint provides a quantitative threshold that defines the
magnitude of an omission or misstatement of accounting information by
its ability to mislead the judgment of a reasonable person relying on it.
In order for financial statements to be useful to analysts, the statements
must provide information that is not only comparable to information in
previous financial statements of a particular company, but also comparable
among various companies. Consequently, accountants must consistently
apply accounting rules when preparing financial statements.
Figure 1: Balance Sheet
General Company Balance Sheet Januray 2, 1999
Items currently reported in financial statements are measured by different
attributes (for example, historical cost, current cost, current market value,
net reliable value, and present value of future cash flows). While historical
cost is the primary method of determining an asset's value, some
accountants use other methods that take inflation into consideration.
According to the historical cost, financial statements contain the cost paid
for items listed at the time they were acquired. Consequently, the historical
cost method does not make allowances for inflation, whereas other
methods consider the current value of items listed.
Notes to financial statements are informative disclosures appended to
financial statements. They provide information concerning such matters as
depreciation and inventory methods used, details of long term debt,
pensions, leases, income taxes, contingent liabilities, method of
consolidation, and other matters. Notes are considered an integral part of
the financial statements. Schedules and parenthetical disclosures are also

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used to present information not provided elsewhere in the financial

statements.
Figure 2: Income Statement
General Company Income Statement
for Period Ending December 31, 1998
Each financial statement has a heading, which gives the name of the
company, the name of the statement, and the date or time covered by the
statement. The information provided in financial statements is primarily
financial in nature and expressed in units of money. The information
relates to a single business enterprise. The information often is the product
of approximations and estimates, rather than exact measurements.
Financial statements typically reflect the financial effects of transactions
and events that have already happened (i.e., historical transactions and
events).
Financial statements presenting economic data for two or more periods are
called comparative statements.
Figure 3: Cash Flow Statement
General Company Cash Flow Statement
for Period Ending December 31, 1988
Comparative financial statements usually give similar reports for the
current period and for one or more preceding periods. They provide
analysts with significant information about trends and relationships over
two or more years. Comparative statements are considerably more
informative than are single-year statements. Comparative statements
emphasize the fact that financial statements for a single accounting period
are only one part of the continuous history of a company.

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Financial statements are usually audited by independent accountants for

the purpose of evaluating the data presented, determining if the financial
statements conform to the rules of accounting, and improving the level of
confidence in the reliability of the statements.

ELEMENTS OF CONSOLIDATED
FINANCIAL STATEMENTS
The Financial Accounting Standards Board (FASB) has defined the
following elements of financial statements of business enterprises: assets,
liabilities, equity, revenues, expenses, gains, losses, investment by owners,
distribution to owners, and comprehensive income. According to the
FASB, the elements of financial statements are the building blocks with
which financial statements are constructedthe broad classes of items
that financial statements comprise. In its "Elements of Financial
Statements of Business Enterprises," the FASB defined the interrelated
elements that are directly related to measuring performance and the
financial position of a business enterprise as follows:

Assets include any items of monetary value owned by a company

with current or probable future economic benefits.

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Comprehensive income is the change in equity (net assets) of an

entity, from transactions and other events and circumstances from
nonowner sources, during a particular period. It includes all
changes in equity during a period except those resulting from
investments by owners and distributions to owners.

Distributions to owners are decreases in net assets of a particular

enterprise resulting from transferring assets, rendering services, or
incurring liabilities to owners. Distributions to owners decrease
ownership interest or equity in an enterprise.

Equity refers to the value of a company after deducting a

company's liabilities from its assets.

Expenses are outflows or payments of assets, or obligations to pay

liabilities, during a period, from delivering or producing goods or
rendering services as well as from carrying out other activities that
constitute part of a business's ongoing or central operation.

Gains are increases in equity (net assets) from peripheral or

incidental transactions of an entity and from all other transactions
and other events and circumstances affecting the entity during a
period, except those that result from revenues or investments by
owner.

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Investments by owners are increases in net assets of a particular

enterprise resulting from transfers to it from other parties of
something of value to obtain or increase ownership interest (or
equity) in it.

Liabilities are current or probable future debts arising from present

obligations of a company to transfer assets or provide services to
other entities in the future as a result of past transactions or events.

Losses are decreases in equity (net assets) from peripheral or

incidental transactions of an entity and from all other transactions
and other events and circumstances affecting the entity during a
period, except those that result from expenses or distributions to
owners.

Revenues are sales or other enhancements of assets of a company

or settlement of its liabilities (or a combination of both) during a
period from delivering or producing goods, rendering services, or
other activities that constitute the entity's ongoing major or central
operations.

DISADVANTAGES
Overview

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Consolidating a financial statement is a significant decision,

whether you are an individual or a business looking to bolster your
financial profile. There can be some significant advantages to
consolidating, such as a greater access to credit and interest rates.
But the potential advantages can be easily erased by some of the
pitfalls of consolidation. For this reason, it's important to
understand the potential impact of consolidating before following
through.
Credit Implications
Just as much as consolidation can improve your credit, you can
also lower your credit profile by consolidating with a person or
business with worse credit than your own. Unless both parties have
similar credit profiles, it is likely that one party is taking a hit to
their credit to some degree. This can be minimal depending on the
advantages of other factors, but it could be a significant
impairment to your ability to get lines of credit at good rates. If this
person is a spouse, you may find yourself getting better credit and
interest rates by not consolidating your financial statements and
remaining financially independent.
Shared Information
It is important to trust the individuals involved in your
consolidation. If the financial change is between spouses and

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individuals, it is likely you already trust that person with having

access to your personal financial history and credit information. In
a business situation, though, this can be dangerous -- allowing
untrustworthy individuals access to your business' financial
statements, credit history and other information which can be
mishandled or used to attack your company.

Changed Debt-to-Income Ratio

Different individuals and businesses have different amounts of
debt and income. A healthy debt-to-income is desired, with debts
comprising only a fraction of total earned income. The smaller this
ratio is, the better for both your credit and financial stability.
Because of the multiple ways in which this can affect your
personal finances or a company's financial profile, it is important
that the debt-to-income ratios of all parties be examined. If you are
taking on much more debt at the gain of minimal income -particularly income that does not cover the debt or does not seem
promising -- your party may be at a distinct disadvantage.

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SR.NO
1.

TITAL

PAGE NO

ANNUAL REPORT 2014-2015

CORPORATE INFORMATION

FINANCIAL HIGHLIGHT

STRTEGIC BUSINESS UNIT

29

10 YEARS HIGHLIGHTS
PEOPLE

AND

4
PLANET

PERFORMANCE
CHAIRMANLETTER

MANAGEMENT ANAYSIS

REPORT

ON

CORPORATE

GOVERNANCE
DIRECTORS REPORT

BUSINESS

RESPONSIBILITY

10

REPORT

ON

11

FINANCIAL

12

CONSOLIDATED BALANCESHEET

14

REPORT
AUDITORS

FINACIAL STATEMENT
NOTES

TO

THE

STATEMENT

30

CONSOLIDATED PROFIT & LOSS

15

STATEMENT

CONSOLIDATED
2

STATEMENT
CONSOLIDATED
STATEMENT
MEANING

CASH

FLOW

16

FINANCIAL
DEFINATION

17-18

PURPOSE,FINANCIAL REPORTNG

MAJORS

OF CONSOLIDATED

19-23

FINANCIAL STATEMENT
ELEMENTS OF CONSOLIDATED
FINANCIAL STATEMENT
DISADVANTAGES
CONSOLIDATED
STATEMENT

31

20-26

OF
FINANCIAL

27-29

ANNUAL REPORT OF COMPANY 2014-2015

AND CONSOLIDATED FINANCIAL
STATEMENT

A PROJECT

SUBMITTED AS A PARTIAL REQUIREMENT FOR M.COM.- I

DEGREE

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BY

ARCHANA BALU TAPASE

109

UNDER THE GUIDANCE OF

DR UDAY SHETTY
Associate professor and Head of the Economics
Department

RAMANAND ARYA D.A.V. COLLEGE

BHANDUP (E)
MUMBAI 400 042
September, 2015
Title

of

the

Project

ANNUAL REPORT OF

COMPANY 2014-2015

Name of the Candidate

ARCHANA

TAPASE

33

BALU

Name and Designation of

Dr UDAY SHETTY

the Guide :

Associate
Professorand Head,
Economics
Department

Place of Research

Ramanand Arya

D.A.V. College,
Bhandup (E), Mumbai
-400 042

Date of Submission :

Dated: --/--/2015

Signature of the Student

:

Signature of the Guide

:

Signature of External Examiner

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