Professional Documents
Culture Documents
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.
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.
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.
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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.
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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.
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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.
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MANAGING DIRCTOR
JTMANAGING DIRCTOR
JTMANAGING DIRCTOR
GENERAL MANGER
COMPANY SECRETARY
CHENNAI BR.
TRICHY BR.
MADURAI BR.
a ACCOUNTS EXC
ADMIN EXC
BR MANGER
BR MANGER
BR MANGER
BR MANGER
MKTG EXECUTIVE
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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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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
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.
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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
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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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
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.
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
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.
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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
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.
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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
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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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
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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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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5780183.69 15108554.69
4184820.43 9508335.31
116014.84 4025144.21
34838.26 10212004.82
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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
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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
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5606493.00 3362177.00 8968670.00 178134.72 3967499.86 350000.00 229679.00 123900.00 0.00 1302000.84 10340.00 25400.75
826981.00
634162.59
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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.
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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.
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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.
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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.
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31.03.2006
31.03.2005
7 8
9 10
44
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
9 10
67103784.38
57120664.79
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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
9 10
96723459.0286050346.53
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31.03.2009
31.03.2008
3 4
5 10666892.0017761339.00
5656840.00
5351920.00
7 8
9 10
105074300.7996723450.02
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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
9 10
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