A

TRAINING REPORT
ON

Cash Flow
With Reference to
EME TECHNOLOGIES, MOHALI

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENT OF THE AWARD OF THE

DEGREE OF MASTER OF BUSINESS ADMINISTRATION

(Session 2017-2019)

UNDER THE GUIDANCE: SUBMITTED BY:

Ms. Malwika Tuli Sumit

Assistant Professor BU2017PGMB098
School of Management

SCHOOL OF MANAGEMENT
BAHRA UNIVERSITY, WAKNAGHAT, SHIMLA HILLS

1
CERTIFICATE

2
 CERTIFICATE
Under my guidance and supervision. To the best of my knowledge and belief the
work presently was not been submitted earlier for degree of Master of Business
Administration or any other degree or diploma.

Date: - / /
Place: -

3
 DECLARATION
I undersigned Mr. Sumit (MBA-II) here by state that this research report entitled
“A Project Report on Cash Flow with special reference to “EME Technologies,
Mohali” is genuine and bonafied work prepared by me under the guidance of The
empirical findings in this report are based on data collected by myself. The matter
presented in this report is not copied from any source.

I understand that, any such copy is liable for punishment in any

way the institute authorities deem to be fit.

Date: / /

Place:

4
 Acknowledgment
This research project bears the imprint of many persons cooperation & it gives me
great pleasure to egress my heartiest gratitude towards them.

First of all I would like to own my sincere gratitude to the honorable for giving
me an opportunity to undergo this summer training and project work.

I am deeply thankful to for her constant encouragement, unending support and

valuable guidance.

I sincerely thank the Management of EME Technologies, Mohali for giving me

an opportunity to work on this project & providing with all the necessary information.

I am sincerely thankful to & Staff Members of EME Technologies for their

wholehearted support & help during my training period.

Lastly I would like to convey my reverential salutations to my parents and

friends for their unending support.

Date: / /

Place:

5
 CHAPTER: 1

INTRODUCTION ABOUT COMPANY

6
1.1 Introduction

EME Technologies, locateed at Mohali is one of the leading software company at Mohali. It was the
researcher’s privilege that she could complete hers summer internship there and learn about their
recruitment process.
When the required number and kind of manpower is determined by the firm, the role of management
is to find places where they require that manpower and how many out of them are available. The
management also finds the different ways of attracting the probable human resource towards the
organization before the process of selecting them for the job.

This entire process is known as recruitment. Recruitment is not employment, but it is a part of
employment. Recruitment is also not selection, but an activity carried out before selection of
candidates takes place. To speak in the technical context, the process of recruitment is carried out
before the function of selection and comprises of only finding the sources of probable employees,
developing those sources and arousing interest in them to apply for the job vacancies in the firm.

EME Technologies a software company is managed by a team of dedicated, committed and highly
qualified software & hardware professional.The company is fortunate enough to have been associated
with expert and experienced faculty in the fields of Software, Hardware and
WebTechnologies,Embedded System, PCB Designing,Networking,Autocad,automationandmanymore.
One of the areas of our specializations is Project study, analysis, development and its live
implementation.The computer faculty in our computer institute has hands-on experience in software
development and has a proven track record in training and guiding the students.

They takeintensive care from the very first step of selecting the Project titleand encouraging the
student to venture a distinct project, involve themselves in the Project by putting their own effort, time
and subject to write programs to execute the same.
In case of any problems, the faculty in-charge willingly guides the student and helps them in
successfully executing the Project.Faculty give their support 24/7 toclient.

7
The institute’s objectives is to empower the future computer Professionals by providing them decent
work atmosphere, individual attention, creating confidence in them by encouraging them take-up the
Project on their own, right from selection of topic until its implementation, facilitating its submission,
under the supervision and guidance of experienced and expert faculty.EME delivers an integrated
portfolio of solutions and services reflecting a broad range of technology and business practices.

1.1.2 EME-Overview
The “EME Technologies”, is located in Mohali in 7 Phase and in Chandigarh.
EMETECHNOLOGIES are Offshore Outsourcing Consultantswith a leading edge technology focus
on deliveringthe best and most cost-effective solutions to their clients in various areas of web
development services and solutions.

The team at EME Technologies consists of over 30 highly skilled professionals associated with
Information Technology. EMETechnologies delivers total solutions for software development and
maintenance needs, serving companies from the smallest of start-ups to the largest of the Global 2000.
We specialize in offshore software development and web applications.

At EME Technologies a talented group of designers and interface engineers are masters at
effectively conveying a consistent corporate message and brand while concentrating on ensuring a
pleasant and useful user experience. They help in effectively market the company by utilizing their
skills in web strategy, creative interface design, corporate branding and logo design, online marketing
strategy and copywriting.

1.1.3 Vertical practices

1.1.3.1 Service Practices

The various types of services that are offered by this company are as follows

1.1.3.1.1. Custom web applications

1.1.3.1.2. Web designing
1.1.3.1.3. Complete e-business solutions
1.1.3.1.4. Ecommerce business
1.1.3.1.5. SEO Service
1.1.3.1.6. Web Data Mining
1.1.3.1.7. Training and Consulting Services for the Development of Embedded
Systems

1.3.1.1.1. Custom application development

It is meant for designing a software that has been designed and programmed for a specific
function/need. Custom application development is capable of producing practically any
feature you may desire for your site.

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 EME TECHNOLOGIES provide total flexibility in terms of Custom application
development - the process is essentially "Client Driven". It is important to remember that a
well-designed database should provide the end product that is tailored to meet both your
professional and practical business needs and therefore serve its intended purpose

1.3.1.1.2. Web Designing

EME TECHNOLOGIES has a team of experienced multi media and web designers for
professional web site designing who work closely with our programming team to integrate the
various components with a consistent look and feel that represents your corporate brand image.
We know the importance of a "first web impression" in web site design and our experienced
team will advise you on how best to take advantage of changing trends and expectations

1.3.1.1.3. Complete e-business solutions

EME Technologies ' Complete e-business solutions offer a powerful combination of design
and technology. This comprehensive set of online e-commerce technology is designed to help
you make the most of your new or existing business. Their complete e-business solutions will
help you increase your sales and improve your bottom line.

1.3.1.1.4. E-commerce business development

Their shopping cart solutions are all you need to be a successful online store. Meet any
growing e- commerce requirements with our shopping cart solutions for all sectors of the
market. With the advent of technology, business has increased manifold.

If you are not updating your business in accordance to the changing scenario then a realization
factor might follow showing your performance during the past time. There cannot be any short
cut to success for your retail business. All you can do is to provide best offer to your customers
by using Ecommerce solutions.

1.3.1.1.5. Search Engine Optimization Firm

It offers the facility of Optimizing and Positioning of your website in the Major Search
Engines. They initiate the SEO Service process by determining the Keyword/Phrase that best
describe your Website/Business. Then they build META Tags, for the few search engines that
still use these.

The placement and maintenance of your website is monitored through out the year. This
becomes even more important whenever the search engines changes their specifications.
Maintenance is an extremely important aspect of a quality web site, not just for the benefit of
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 search engines, but also for overall accuracy of your company's information.

1.3.1.1.6. Web Data mining

It is a proven technology for advanced analysis that detects key patterns and trends. But the
time-consuming complexity of preparing Web data with the business context necessary for
data mining has hampered its use in Web analysis—until now. EMETechnologies creates,
maintains, and runs Internet robots that retrieve data from the Web. The robots feed extractors
that pick out useful information and can deliver it to you in a format for processing and
analysis.

1.3.1.1.7. Training and Consulting Services for the Development of Embedded Systems

EME Technologies is pioneer in Establishing Embedded systems in Chandigarh. Our expertise

covers several microcontroller architectures and their development tool chains. In addition we
focus on topics such as time-to-market, quality improvement , complete PCB Designing and
embedded applications using Atmel MCS51,Atmel AVR,Microchip PICcontroller, NXP
ARM,Arduino and Raspberry pi Our training and consulting services include prototyping and
customized software and hardware developments.Training, consulting or prototyping services
include applications on technologies from Atmel , microchip , NXP , Maxim etc.

Embedded Systems Development involve Microcontroller families, these Microcontroller

families require programming in Embedded C language.

EME is providing embedded system Development services and Training in Embedded

systems, Robotics, VLSI,AUTOCAD since 2010.

10
CHAPTER 2 INTRODUCTION OF TOPIC

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ABOUT THE TOPIC

CASH FLOW: Cash follow mean inflow and outflow of cash. Cash flow is the
movement of money into or out of a business, project, or financial product. It is usually
measured during a specified, limited period of time. Measurement of cash flow can be used
for calculating other parameters that give information on a company's value and situation.
Cash flow can be used, for example, for calculating parameters: it discloses cash movements
over the period. A cash flow statement is a financial report that describes the sources
of a company's cash and how that cash was spent over a specified time period. It does
not include non-cash items such as depreciation. This makes it useful for determining
the short-term viability of a company, particularly its ability to pay bills. Because the
management of cash flow is so crucial for businesses and small businesses in
particular, most analysts recommend that an entrepreneur study a cash flow statement
at least every quarter.

It should be noted that cash flow statement deals with the flow of cash fund but
not consider movement of cash bank balance and cash equivalent.

Cash fund: As per (AS-3) issued by the ICWA of India, the term cash includes:

(i) Cash in hand

(ii) Demand deposited with bank

Accounting standard 3 (AS-3) cash flow statement

The 'applicability' paragraphs of AS 3 stand modified as under:

"The following is the text of the revised Accounting Standard (AS) 3, 'Cash Flow
Statements', issued by the Council of the Institute of Chartered Accountants of India.
This Standard supersedes Accounting Standard (AS) 3, 'Changes in Financial Position',
issued in June, 1981. In the initial years, this accounting standard will be
recommendatory in character. During this period, this standard is recommended for use

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by companies listed on a recognised stock exchange and other commercial, industrial and
business enterprises in the public and private sectors.

Accounting Standard (AS) 3, 'Cash Flow Statements' (revised 1997), issued by the
Council of the Institute of Chartered Accountants of India, comes into effect in respect of
accounting periods commencing on or after 1-4-1997. This Standard supersedes
Accounting Standard (AS) 3, 'Changes in Financial Position', issued in June 1981. This
Standard is mandatory in nature in respect of accounting periods commencing on or after
1-4-20041 for the enterprises which fall in any one or more of the following categories,
at any time during the accounting period:

i. Enterprises whose equity or debt securities are listed whether in India or outside
India.
ii. Enterprises which are in the process of listing their equity or debt securities as
evidenced by the board of directors' resolution in this regard.
iii. Banks including co-operative banks.
iv. Financial institutions.
v. Enterprises carrying on insurance business.
vi. All commercial, industrial and business reporting enterprises, whose turnover for
the immediately preceding accounting period on the basis of audited financial
statements exceeds Rs. 50 crores, Turnover does not include 'other income'.
vii. All commercial, industrial and business reporting enterprises having borrowings,
including public deposits, in excess of Rs. 10 crores at any time during the
accounting period.
viii. Holding and subsidiary enterprises of any one of the above at any time during the
accounting period.

The enterprises which do not fall in any of the above categories are encouraged, but are
not required, to apply this Standard.

Where an enterprise has been covered in any one or more of the above categories and
subsequently, ceases to be so covered, the enterprise will not qualify for exemption from
application of this Standard, until the enterprise ceases to be covered in any of the above
categories for two consecutive years.

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 Where an enterprise has previously qualified for exemption from application of this
Standard (being not covered by any of the above categories) but no longer qualifies for
exemption in the current accounting period, this Standard becomes applicable from the
current period. However, the corresponding previous period figures need not be
disclosed.

An enterprise, which, pursuant to the above provisions, does not present a cash flow
statement, should disclose the fact.
The following is the text of the Accounting Standard."

The above modifications come into effect in respect of accounting periods commencing
on or after 1-4-2004. Accordingly, the announcement issued by the Council titled as
'Accounting Standard (AS) 3, Cash Flow Statements Made Mandatory', published in the
December 2000 issue of the Institute's Journal (page 65) stands withdrawn in respect of
accounting periods commencing on or after 1-4-2004.

Classification of cash flow

Accountant standard (AS-3) requires that cash flow statement should cash flow during the
period classification by operating, investing and financing activities.

Operating activities

Operating activities are the principle activities of the enterprise. An accounting item
indicating the money a company brings in from ongoing, regular business activities, such as
manufacturing and selling goods or providing a service. Cash flow from operating activities
does not include long-term capital or investment costs. It does include earnings before
interest and taxes plus depreciation minus taxes.

Also called operating cash flow or net cash from operating activities, it can be calculated as
follows.

Cash Flow from Operating Activities = EBIT + Depreciation – Taxes

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Some examples of cash flow from operating activities are:

1. Cash receipts from the sale of the goods and the rendering of services usually
from a major share of cash inflows.
2. Cash receipts from royalties fees, commission and other revenues.
3. Cash payment of supplier for goods and services, such as payment of expenses
like lighting and power, rent, insurance etc.
4. Cash payment of the wages and salary to the employees.

Operating activity

The owners or managers of the business use the initial funds to buy equipment or
other assets they need to run the business. In other words, they invest it. The purchase
of property, plant, equipment, and other productive assets is classified as an investing
activity. Sometimes a company has enough cash of its own that it can lend money to
another enterprise. This, too, would be classified as an investing activity. Generally,
any item that would be classified on the balance sheet as a long-term asset would be a
candidate for classification as an investing activity.

Financing activities

Now the company can start doing business. It has procured the funds and purchased
the equipment and other assets it needs to operate. It starts to sell merchandise or
services and make payments for rent, supplies, taxes, and all of the other costs of
doing business. All of the cash inflows and outflows associated with doing the work
for which the company was established would be classified as an operating activity.
In general, if an activity appears on the company's income statement, it is a candidate
for the operating section of the cash flow statement.

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METHODS OF PREPARING THE CASH FLOW STATEMENT

In November 1987, the Financial Accounting Standards Board (FASB) issued a "Statement of
Financial Accounting Standards" which required businesses to issue a statement of cash flow
rather than a statement of changes in financial position. There are two methods for preparing
and presenting this statement, the direct method and the indirect method. The FASB
encourages, but does not require, the use of the direct method for reporting. The two methods
of reporting affect the presentation of the operating section only. The investing and financing
sections are presented in the same way regardless of presentation methods.

1. Direct Method

The direct method, also called the income statement method, reports major classes of operating
cash receipts and payments. Using this method of preparing cash statement starts with money
received and then subtracts money spent, to calculate net cash flow. Depreciation is excluded
altogether because, although it is an expense that affects net profits, it is not money spent or
received.

2. Indirect Method

This method, also called the reconciliation method, focuses on net income and the net cash
flow from operations. Using this method one starts with net income, adds back depreciation,
then calculates changes in balance sheet items. The end result is the same net cash flow
produced by the direct method. The indirect method adds depreciation into the equation
because it started with net profits, from which depreciation was subtracted as an expense.

Regardless of whether the direct or the indirect method is used, the operating section of
the cash flow statement ends with net cash provided (used) by operating activities. This is the
most important line item on the cash flow statement. A company has to generate enough cash
from operations to sustain its business activity. If a company continually needs to borrow or
obtain additional investor capitalization to survive, the company's long-term existence is in
jeopardy.

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FINANCING AND INVESTING SECTIONS
The cash flows, in and out, resulting from financing and investing activities are listed in the
same way whether the direct or indirect method of presentation is employed.

CASH FLOWS FROM INVESTING

The major line items in this section of the cash flow statement are as follows:

Capital Expenditures. This figure represents money spent on items that last a long time such
as property, plant, and equipment. When capital spending increases, it often means the
company is expanding.

Investment Proceeds. Companies will often take some of their excess cash and invest it in an
effort to get a better return than they could in a savings account or money market fund. This
figure shows how much the company has made or lost on these investments.

Purchases or Sales of Businesses. This figure includes any money the company made from
buying or selling subsidiary businesses and will sometimes appear in the cash flows from
operating activities section, rather than here.

CASH FLOWS FROM FINANCING

The major line items in this section of the cash flow statement include such things as:

Dividends Paid. This figure is the total dollar amount the company paid out in dividends over
the specified time period.

Issuance/Purchase of Common Stock. This is an important number because it indicates how a

company is financing its activities. New, rapidly growing companies will often issue new
stock and dilutes the value of existing shares in so doing. This practice does, however, give
company cash for expansion. Later, when the company is more established it will be in a
position to buy back its own stock and in this way increase the value of existing shares.

Issuance/Repayments of Debt. This number tells you whether the company has borrowed
money during the period or repaid money it previously borrowed. Borrowing is the main
alternative to issuing stock as a way for companies to raise capital.

17
The cash flow statement is the newest of the three fundamental financial statements prepared
by most companies and required to be filed with the Securities and Exchange Commission
by all publicly traded companies. Most of the components it presents are also reported,
although often in a different format, in one of the other statements, either the Income
Statement or the Balance Sheet. Nonetheless, it offers the manager, investor, lender, and
supplier of a company a view into how it is doing in meeting its short-term obligations,
regardless of whether or not the company is generating income

TREATMENT OF OTHER ITEMS

i. Interest and dividend

a) In case of financing enterprise, cash flow from interest paid and interest
dividend received should be treated as cash flow from operating activities.
Dividend paid should be classified as cash flow from financing activity.
b) In the case of other enterprises, cash flows arising from interest and dividend
paid should be classified as cash flows from financing activities while interest
and dividend should be classified as cash inflow from financing activity.

Net profit is adjusted for non operating expenses and income for
calculating operating profit as shown below:

Net profit xxx

Add: non operating expenses xxx
Less: non-operating income xxx
Net operating profit xxx

IMPORTANT TERMS

1. Income tax: cash flow arising from income tax should be classified as flows from
operating activities unless they can be specialised identified financing and investing
activity. For example: capital gain tax on sale of land can be identified with investing

18
 activities and therefore in the cash flow statement, it should be shown as outflow from
investing activity.
2. Extra ordinary items: the cash flow associated with extra ordinary items should be
classified as arising from operating, investing and financing as appropriate and
separately disclosed. For example: legal claim cost of winning a law suit or lottery,
receipt of claim from an insurance company etc.
3. Non-cash transactions: there are certain transactions which do not include any cash
out flow although they affect the capital and the assets of the enterprise; they are
excluded from cash flow for obvious reason. Examples of non cash transaction are:
a) Acquisition of asset by issuing shares or debentures.
b) Conversion of non-convertible debentures into shares.
c) Acquisition of fixed asset like machinery on credit

PREPARATION OF CASH FLOW STATEMENT

Preparation of cash flow statement of EME Technologies is similar to fund flow statement. In
fact the basic
difference arises from the definition of fund. In fund flow statement, Fund mean ‘net working
capital’ while in cash flow statement it means ‘cash’ AS-3 has not prescribed any specific
format for cash flow statement but SEBI has approved cash flow statement to be prepared in
the following form

Performa of cash flow statements

1.Cash flow from operating activities

Before tax and extra ordinary items
Adjustment for:

Depreciation
Interest income
Dividend income
Interest expense
Foreign exchange loss
Operating profit before changing in working capital
Adjusted capital before working capital
Cost generation from or used in operation before tax

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Income tax paid
Cash flow before extra ordinary items
Net cash from (or used in ) operating activities
2. cash from investment activity
Purchase of fixed assets
Proceeds of sale of fixed assets
Interest and dividend received activity
Net cash from (or used) in investment activities

3.Cash flow from financing activities

Proceeds from issue of shares/debenture
Proceeds from long term borrowing
Repayment of long term borrowing
Interest paid
Dividend paid
Net cash from (or used in) financing activities
Net increase or decrease in cash and cash equivalent
Cash and cash equivalent at the beginning of the year
Cash and cash equivalent at the end of the period

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OBJECTIVE AND USES OF CASH FLOW STATEMENT

Useful in cash planning: a cash flow statement is very useful to

the management in by providing a basic to evaluate the ability of a company to
generate cash. A cash flow statement is prepared on an estimated basis for the next
accounting periods enable the management to know how much cash can be
generated internally and how much it should arrange from outside. Such estimated
amounts are used for preparing a cash budget.
Assesses cash from operating activity: cash flow statement
provides information about cash generated from operation of EME Technologies. It
provides explanation for the difference net profit and cash from operation. Cash
provided by operating activity is very important to assess the cash generated by
internal sources.

Payment of dividend: Decision to pay the dividend cannot be based on the

net profit only availability of profit in the form of the cash is also important
for distribution disbursement. Thus, cash provided by operating activities
assume importance for declaration of dividend.

Cash from investing and financing activities: a cash flow statement

not provide information only about cash by operating activity but also by non-
operating activities under two heads, namely investing activities and financing
activities. This helps to explain the overall liquidity position of the enterprise and its
ability to meet its cash commitment.

Explain reason for surplus or shortage of cash: a business may have made
profit and yet running short of cash. Similarly a business may have suffered a loss
and still has sufficient cash in bank. A cash flow statement discloses reason for such
increases or decreases of cash balance.

Parties interested in financial statement analysis of EME Technologies

The analysis of financial figures contained in the company's profit and loss account and balance
sheet by employing appropriate technique is known a financial statement analysis. Financial
statement analysis is useful to different parties to obtain the required information about the
organization. Following are the parties interested in financial statement analysis.
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1. Shareholders
Shareholders are interested in financial statement analysis to know the profitability of the
organization. Profitability shows the growth potentiality of an organization and safety of
investment of shareholders.
2. Investors and Lenders

Investors and lenders are interested to know the solvency position of an organization. They
analyze the financial statement position to know about the safety of their investment and
ability to pay interest and repayment of principle amount on due date.
3. Creditors
Creditors are interested in analyzing the financial statements of EME Technologies in order to
know the short term liquidity position of an organization. Creditors analyse the financial
statement to know either the organization is unable to pay the amount of short term liabilities
on due date.
4. Management
Management of EME Technologies is interested to analyze the financial statement for
measuring the effectiveness of its policies and decisions. It analyze the financial statements
to know short term and long term solvency position, profitability, liquidity position and
return on investment from the business.

5. Government
Government is interested to analyze the financial position in determining the amount of tax
liability of EME Technologies. It also helps for formulating effective plans and policies for
economic growth.

6. Purchaser of the business

Any person who is interested to buy a going concern analyse the financial statement to
determine its real value. It makes an assessment of the financial and operating strength and
weakness of the business.

7. Other interested group

Financial statement analysis is also important for many others. For example worker’s and
trader union, etc.

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TREND PERCENTAGE ANALYSIS
The next important tools of analysis are trend percentage which plays significant role in
analyzing the financial stature of the enterprise through base years’ performance ratio
computation. This not only reveals the trend movement of the financial performance of the
enterprise but also highlights the strengths and weaknesses of the enterprise
The following ratio is being used to compute the trend percentage

Current year
= -------------- X 100
Base year

This trend ratio is being computed for every component for many numbers of years which not
only facilitates comparison but also guides the firm to understand the trend path of the firm.

23
 CHAPTER: 3

RESEARCH DESIGN

24
2.7 RESEARCH DESIGN:

The research design is the conceptual structure which research is conducted. It

constitutes the blue print for the collection, measurement and analysis of data. A research
design in the basic plan, which guide collection and analysis of the data. A research design
framework, which specifies the type of information to collect the sources of data collection
procedure. Data was collected form primary and secondary sources.

Research design adopted for study

Explorative research is used in the study:-

Study of secondary information i.e., annual report of the company

2.8 RESEARCH DESIGN METHODOLOGY

Primary and Secondary data of EME Technologies are collected to achieve the objective of the
project, towards this
direction personal interview with the representative will be undertaken. Data will also be
gathered from Questionnaire distributed amongst executive in various departments for
survey.

Sampling Method

Primary Data

These are obtained from interaction with the department executives, from department
manual and other publication of company.

Secondary Data

These d a t a f o r EME Technologies are obtained from annual reports, magazines, website and
reports of the company
.Also data and information will be collected from academic journals and other papers
presented at conventions related to the topic.

Sampling Size : 5 years financial statements

PLAN OF ANALYSIS

Data collected from all the available sources will be tabulate, collated, and interpreted duly
supported with charts, tables, graphs etc. Whenever necessary data collected will be subjected
to such authenticity test as deemed necessary.

25
No effect will be spread in ensuring a complete of detail study, given the limitation to the
study. Based on the findings on the study and the resultant conclusion, recommendations will
be offered.

METHOD OF ANALYSIS:

Analyse the effectiveness with the help of annual report of the EME
Technologies
. Own observation of various practices followed by the company.

2.9 TOOLS USED:

The tools and technique is used for the analysing the data of EME Technologies, which include
table, bar-chart
and simple percentage method have been used for the purpose of analysis and presentation.
For the data analysis the subsequent interpretation has been interpreted.

26
 CHAPTER: 4

ANALYSIS AND INTERPRETATION

27
TABLE: 4.1
Table showing net profit of EME Technologies before tax and prior period item
(000’)

Years Net profit before tax & prior period Trends %

items
2010-11 3915833 100%

2011-12 7323530 187%

2012-13 4346656 111%

2013-14 1622700 41%

2014-15 1712000 44%

Analysis:
From the following table it can be seen that the company’s net profit in trend is the year
2010-11 was 100% and it had increased in 2011-12 by 187% and after that there was
decreased in profit gradually in 2012-13 it became 111%, in 2013-14 it was 41%, and it has
decreases and became 44% in year 2014-15.

28
TABLE: 4.2
Table showing adjustment for non operating items of EME Technologies
(000’)

Years Adjustment for non operating items Trends %

2010 9491008 100%

2011 8599611 91%

2012 11395395 120%

2013 11712600 123%

2014 14529800 153%

Analysis
Form the above table we can see that the adjustments for non-operating items from 2010 –
2011. 2010 is the base year and it is 100% and then there is a decrease from 100% to 90% in
the year 2012 and after that there be gradually increased in every year 120% in 2013, 123 %
in 2014 and 153% in 2015.

29
TABLE: 4.3
Table showing operating profit before changes in working capital
(000’)

Years Operating profit before working capital changes Trends %

2010 13406841 100%

2011 15923141 119%

2012 15742050 117%

2013 13335300 99%

2014 16241846 121%

Analysis
The above table gives the information about operating profit before change in working
capital. 2010 is the base year so, it’s 100% and in year 2011 it has been increases to 119%
and in the year it is also showing an increase 0f 17% in the operating profit compare to the
base year. It has been decreased in the year 2013 to 99% and in the year 2014 is more
compare to the previous years.

30
TABLE: 4.4
Table showing Cash generated from operations of EME Technologies
(000’)

Years Cash generated from operations Trends %

2010 1157411 100%

2011 4934877 426%

2012 2567573 222%

2013 2129500 184%

2014 15828000 1367%

Analysis
Cash generated from operation is comparatively higher in the year 2013 and has and it is
showing that company operating profit is in good condition.

In year 2010 base year cash generated from operation is 100% and it has increased to 426%
and then there is a decreased in compare of previous year but its good according to the base
year and every year is good compare to base year.

31
TABLE: 4.5

Table showing tax paid:

(000’)

Years Tax paid Trends %

2010 502288 100%

2011 1189838 237%

2012 1497855 298%

2013 1106200 200%

2014 483200 87%

Analysis:
The above table indicate tax paid during the year2010-2013 by the company and it is
continuously increasing in the year 2010, 2011, and 2012 after there is n decrease in the year
of 2013. The company paid lowest rate of tax in the year 2013 compare to the base year.

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TABLE: 4.6
Table cash flow from operating activates after exceptional items
(000’)

Years Net cash flow from operating activities after Trends %

exceptional items

2010
655123 100%

2011
3745040 572%

2012
1069718 163%

2013
1023300 156%

2014
15395800 2350%

ANALYSIS

It shows that the net cash from operating activity has increased to 572% in the year 2010 and
then there is decrease in the continues 2 years 163% & 156% in 2011 n 2014 respectively and
the highest net cash flow from the operating activity is in 2013 is 2370%.

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TABLE: 4.7

Table showing addition of fixed assets and WIP

(000’)

Years Addition of fixed assets and WIP Trends %

2010 100%
11549886

2011 84%
9960934

2012 69%
7930746

2013 71%
8157900

2014 105%
12164400

ANALYSIS

The above table provide info about the fixed asset purchased by a company during 5 years.
Fixed asset purchase is 84% in 2011, 69% in 2012, 71% in 2013 and 105% in 2014. It is
comparatively more in 2014 than the all years.

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TABLE: 4.8
Table showing interest received
(000)

Years Interest received Trends

2010 129019 100%

2011 157301 122%

2012 87283 68%

2013 36100 28%

2014 35600 27%

Analysis
The above table is showing the interest received by the company during 5 years from 2010-
2014. We can observe that in the 2011 it has increased to 122% and the next year 2012 it has
decreased to 68% and consequently decreasing in the year 2014 28% and in 2014 it is only
27%.

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TABLE: 4.9
Table showing net cash used in investment activities of EME Technologies
(000)

Years Net cash used in investment activities Trends %

2010 11420961 100%

2011 9553633 84%

2012 11108951 97%

2013 8194800 72%

2014 12269200 107%

Analysis
The above table is showing net used in investment activities which is constantly decreasing
every year. 2010 is the base year where investment is 100% from there it is decreasing. In
2011 it became 84%, in 2012 it is 97%, and in 2013 it is 72% and in 2014 it is 107% there is
more used of cash in this year.

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TABLE: 4.10
Table showing receipt from issue of equity share capital
(000’)

Years Receipts from issue of share capital Trends

2010 5000000 100%

2011 5000000 100%

2012 5000000 100%

2013 6250000 125%

2014 4000000 80%

Analysis
The above table provide info about the share capital raised during the period of 2010-2014.
Equity share raised during the year 2010, 2011 and 2012 is 100% there is not any fund raised
by the company during the year. In 2013 25% equity share has been raised by the year 2013
and it has been decrease in the year 2014 to 80%.

37
 CHAPTER: 5

Findings, suggestion, and conclusion

38
FINDINGS:

The performance of the net profit before tax and the condition in the year 2010 and a
gradual decrease from 2011 and there on.
Adjustment for non-operating items. Indicates that deductions made on net profit
before tax shows continues increase from 2010-2013.
The operating capital changes indicate good performance of company in year 2010,
2011 & 2013. But a slightly poor performance in the year 2010 and 2012.
Cash generated from operation is comparatively higher in the year 2010, and has
increase in priorities thereafter.
The tax paid during the year 2010 till 2012 shows increasing trend where as reduced
in the year 2013.
Net cash inflow from the operating activities shows a good performance in the year
2010, 2012 & 2013 compared to base year 2010.
Interest received on investment shows increase in the year 2010 and after decreasing
trend.
Purchase fixed assets shows that cash outflow for purchasing fixed asset has declined
till and shows an increase in 2013.
The investment sold during the above specified period shows fluctuations of increased
and decreased.
It highlight that there is no cash flow from shares till 2011 from the year 2010 & in
2012 there is inflow of cash & in 2013 there is out flow of fund.
The priorities of raising long term loans secure to high in 2010, 2011 & 2012
compared to 2010 & 2013.
There is cash outflow in the form of redemption of debentures in the year 2010 and
2010 and no effect in the year from 2011-13.
Payment of dividend shows gradual decline in the outflow of cash from 2010 to 2011,
and there is decrease in outflow in 2013.
Cash inflow from financing activities shows fluctuations of EME Technologies. It
is very compare to its

2009.
There is no any inflow of cash in the statement.

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SUGGESTION AND RECOMMENDATION

1. The EME Technologies concentrate on increase in debtors. It has to modify and

improvise its terms and conditions of credit sales. As it may block the inflow of
cash in the irrecoverable bad debts. This turn can improve the company’s operating
profit.
2. Interest received on investment shows continuous decline which in turn may result in

cash inflow from investing activities. Therefore, it is suggested to EME

Technologies to invest amount on purchase of such long-terms investment.

These in turn guaranty highest rate of return.
3. It is also recommended to the EME Technologies to maintain the proportion of
current assets and current liabilities as a result of which there will be increase of working
capital.
4. The company has suggested having a proper systematic utilisation of cash for its
respective proper utilisation of cash inflow from long term sources such as issue of
share capital in rising in long term capital should be used for purchase of long term
assets such as fixed assets and investment.
5. Sale of investment within maturity period has to be avoided as long term investments
would get better benefit rather than sales proceed within short span which also affect
the regular income of interest.
6. The company should proper utilise the cash in the investing and financing activities.
7. Track accounts receivable to identify and avoid slow-paying costumer. Refusing to do
business with slow paying costumer.

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CONCLUSION:

The study on cash flow analysis of EME Technologies was mainly undertaken to
study the inflow & outflow of cash from various financial element in practical condition.
This is an opportunity, which helped me in understanding cash flows and practical
knowledge with respect to a company’s performance.

Cash inflow from operating activities in the form of operating profit before working capital
changes, cash generation from operations and net cash inflow from operation shows great
improvement in 2010 & 2011 compare to the base year. Where it shows reduction value of
cash outflow in the form of bad debts, depreciation, and loss on the sale of assets and tax paid
during the years.

When cash flow from investing activities were analysed it shows cash outflow is due to
heavy purchase of fixed assets and investments from 2009-2012. Interest received is only
inflow of the cash from investment.

Cash flow from financial activities shows inflow of cash in all the year from 2009-2012.
Whereas, inflow gradually decreasing in value from 2009-12. Equity share capital issued,
long term borrowings raised and receipts of unsecured loans are the reason for cash inflow in
financial activities. However payment of financial charges, dividend and CDT are the
outflows noticed in the financial activities.

However, overall cash flow from all the activities shows good inflow of cash in the year
2009, which has decline in 2010. And thereafter it indicates outflow of cash in the year 2011-
and 2012.

To conclude the company’s cash performance in all years seems to be satisfactory except in
the year 2012, as there is decline in the cash equivalent condition of the company in the year
2012 compare to its base year 2010.

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