*

* Management Information System (MIS) is

prevailing in the present business world since it is a powerful computer-based system that can generate useful and meaningful business managerial accounting and MIS reports on the entire financial situation of a company along with performance and other historical records for comparative analysis. * MIS reports enhance the decision-making capabilities to a large extent as managers are equipped with up-to-date disseminated information.

1. 2.

Defining standards and setting up guidelines: MIS reports accounting help in preparing company procedures and guidelines Facilitating informed decision-making: Accounts and finance MIS reports in the hands of the top management can do wonders in boosting their decision-making capabilities. Keeping a check on discrepancies: Constant monitoring of a companys financial situation with the help of best MIS reports for company facilitates in bridging the gap between planned call to action and the actual situation. Ensuring record-keeping of all transactions: All transactions can be suitably tracked using MIS reports services. The transactions can range from routine ones, that can help suitable monitoring of the same, to the top managerial ones needed for major decision making and analyzing the trends of various periods.

3.

4.

* Certificate of Financial Statements by the management * Corporate Governance report * Fixed Asset Register * Inventory Analysis * Secretarial Compliance Report * Non-Income Report * Bank Reconciliation Statement * Management Discussion and Analysis * Statement of Owners Equity * Debtor Analysis * Creditor Analysis

Mainly used for corporate governance

It is a certification from the top management that they have reviewed the financial and cash statements. They take the full responsibility of the internal control and are not in any fraudulent or illegal practice

Annexure 3 Certificate by Chief Executive Officer (CEO) and Chief Financial Officer (CFO) We, Rajiv Bajaj, Managing Director and Kevin Dsa, President (Finance) of Bajaj Auto Limited, certify: 1. That we have reviewed the financial statements for the year ended 31 March 2012 and that to the best of our knowledge and belief; These statements do not contain any materially untrue statement nor omit any material fact nor contain statements that might be misleading, and These statements present a true and fair view of the Companys affairs and are in compliance with the existing accounting standards, applicable laws and regulations.

2. That there are, to the best of our knowledge and belief, no transactions entered into by the Company during the year, which are fraudulent, illegal or violative of the Companys code of conduct;

3. That we accept responsibility for establishing and maintaining internal controls, we have evaluated the effectiveness of the internal control systems of the Company and we have disclosed to the auditors and the audit committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps that we have taken or propose to take to rectify the identified deficiencies; and
4. That we have informed the auditors and the audit committee of i. significant changes in internal control during the year;

ii. significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

iii. instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Companys internal control system. Rajiv Bajaj Kevin Dsa Managing Director President (Finance)

* Corporate Governance essentially is the system by which

companies are directed and controlled by the management in the best interest of the stakeholders and others. * Corporate Governance Report has been mandated by the SEBI through stock exchanges via the listing agreement for the listed companies. * A Corporate governance Report is a mandatory document for a Company that is listed in the Stock market or one that wishes to be listed in the stock market. * It is a mandatory section to be included in a companies annual reports according to clause 49 section vi. (i).

1. A brief statement on companys philosophy on code of governance.

2. Board of Directors: a. Composition and category of directors, for example, promoter, executive, nonexecutive, independent nonexecutive, nominee director, which institution represented as lender or as equity investor. b. Attendance of each director at the Board meetings and the last AGM. c. Number of other Boards or Board Committees in which he/she is a member or Chairperson. d. Number of Board meetings held, dates on which held.

3. Audit Committee: i. Brief description of terms of reference ii. Composition, name of members and Chairperson iii. Meetings and attendance during the year

4. Remuneration Committee: i. Brief description of terms of reference ii. Composition, name of members and Chairperson iii. Attendance during the year iv. Remuneration policy v. Details of remuneration to all the directors, as per format in main report.

*
5. Shareholders Committee: i. Name of non-executive director heading the committee ii. Name and designation of compliance officer iii. Number of shareholders complaints received so far iv. Number not solved to the satisfaction of shareholders v. Number of pending complaints 6. General Body meetings: i. Location and time, where last three AGMs held. ii. Whether any special resolutions passed in the previous 3 AGMs iii. Whether any special resolution passed last year through postal ballot details of voting pattern iv. Person who conducted the postal ballot exercise v. Whether any special resolution is proposed to be conducted through postal ballot vi. Procedure for postal ballot

7. Disclosures: i. Disclosures on materially significant related party transactions that may have potential conflict with the interests of company at large. ii. Details of non-compliance by the company, penalties, strictures imposed on the company by Stock Exchange or SEBI or any statutory authority, on any matter related to capital markets, during the last three years. iii. Whistle Blower policy and affirmation that no personnel has been denied access to the audit committee. iv. Details of compliance with mandatory requirements and adoption of the non-mandatory requirements of this clause
8. Means of communication. i. Quarterly results ii. Newspapers wherein results normally published iii. Any website, where displayed iv. Whether it also displays official news releases; and v. The presentations made to institutional investors or to the analysts.

9. General Shareholder information: i. AGM : Date, time and venue ii. Financial year iii. Date of Book closure iv. Dividend Payment Date v. Listing on Stock Exchanges vi. Stock Code vii. Market Price Data : High., Low during each month in last financial year viii. Performance in comparison to broad-based indices such as BSE Sensex, CRISIL index etc. ix. Registrar and Transfer Agents x. Share Transfer System xi. Distribution of shareholding xii. Dematerialization of shares and liquidity xiii. Outstanding GDRs/ADRs/Warrants or any Convertible instruments, conversion date and likely impact on equity xiv. Plant Locations xv. Address for correspondence

Particulars I. Board of Directors (A) Composition of Board (B) Non-executive Directors' compensation & Disclosure (C) Other provisions as to the Board and Committees (D) Code of Conduct II. Audit Committee (A) Qualified & Independent Audit Committee

Clause of Listing Agreement 49 I 49 (IA) 49 (IB)

Compliance Status Yes/No

Remarks

49 (IC) 49 (ID)

49 (IIA) 49 (IIB) 49 (IIC) 49 (IID)

(B) Meeting of Audit Committee (C) Powers of Audit Committee (D) Role of Audit Committee (E) Review of Information by Audit Committee

49 (IIE)

Particulars III. Subsidiary Companies IV. Disclosures (A) Basis of related party transaction (B) Disclosure of Accounting Treatment (C) Board Disclosures (D) Proceeds from public issues, rights issues, Preferential issues etc. (E) Remuneration of Direction (F) Management (G) Shareholders V. CEO/ CFO Certification VI. Report on Corporate Governance VII. Compliance

Clause of Listing Agreement 49 (III) 49 (IV) 49 (IVA) 49 (IV B) 49 (IV C)

Compliance Status Yes/No

Remarks

49 (IV D) 49 (IV E) 49 (IV F) 49 (IV G) 49 (V) 49 (VI) 49 (VII)

*
Sl no. 1 Existing provisions of Proposed amendments Clause 49 Board composition and It is proposed that a provision be Disclosures: added stating that if the nonClause 49.I.A.ii states executive Chairman is a promoter that where the Chairman or is related to promoters or of the Board is a nonpersons occupying management executive director, at least positions at the Board level or at one third of the Board one level below the Board, he should comprise of would not be treated as independent directors and independent director and the in case he is an executive company in such a case, would be director, at least half of required to have 50% independent the Board should comprise directors on its Board. of independent directors. Relation between It is proposed to stipulate that independent companies shall disclose the directors: relation between independent There is no existing directors interest as well as other provision in Clause 49 directors of the company not which speaks about the holding position, in all documents relation amongst where the details of the Board of independent directors. directors are incorporated/ given for information of the public/ shareholders. It may not be possible to mandate a blanket provision that Rationale for the proposed amendments SEBI is in receipt of views / representations that in certain companies the promoters or promoters of the promoter company or their close relatives designate themselves as non-executive Chairman of the listed company and hence, they cannot be considered truly "non-executive" in the sense of the term. Views/representations have been received by SEBI stating that some companies have independent directors who are related to each other. They further state that such practices are only technical compliance and do not uphold the spirit of the clause and hence such persons should not be considered independent.

Sl no. 3

Existing provisions of Proposed amendments Rationale for the proposed Clause 49 amendments Time gap between the It is proposed to stipulate that an SEBI is in receipt of views / resignation /removal of independent director who resigns representations stating that an independent director or is removed from the Board there should be a time limit for and the appointment of shall be replaced by a new the appointment of an another in his place: independent director within a independent director in case There is no existing time-gap of not more than 90 there is a resignation or provision on this issue days from such resignation / removal of an existing one. which speaks about the removal. Without any time limit, time gap for the a company may continue to appointment of an remain non-compliant and may independent director in take a plea that it has not been case there is a able to find an independent resignation or removal of director. an existing one. Entry norms for It is proposed to stipulate that the Views/representations independent directors in minimum age of an independent received by SEBI state that terms of director shall be atleast 21 years. there should be norms for age,qualifications and It may not be possible to stipulate independent directors in terms experience: experience, maximum age or of age, qualifications and There are no existing qualifications for an independent experience. norms for independent director since it would differ from directors in terms of age, company to company based on qualifications and the line of activities it is engaged experience in. Further, the Companies Act does not specify the experience/qualifications/ age limit for a director.

Sl no. Existing provisions of Clause 49 5 Nominee directors as independent directors: As per the provisions of Clause 49.I.A.iv, nominee directors of institutions are considered as independent directors; the word 'institution' has been defined for the purpose.

Proposed amendments

Rationale for the proposed amendments

It is proposed to stipulate that nominee directors would not be considered as independent directors and consequently, the provision which allows nominee directors appointed by institutions to be considered as independent directors may be deleted.

SEBI has received views / representations stating that nominee directors basically represent interest of the institution which has nominated them, be it a lending or investing institution; as such, these directors should not be considered as independent directors. Further, SEBI has taken a view that Government nominees in Government companies would not be treated as independent directors since they have a material pecuniary relationship with the Government as they receive salary and other perks from the Government.

*
*A
Fixed Assets Register (FA Register) is a register which shows all the permanent assets owned by an organization.

Ensures control and misappropriation of funds

Correct valuation of assets which helps in calculation of Depreciation, Tax & Insurance

Compliance with legislation governing corporations, companies, etc.

*
*A
Fixed asset register should contain sufficient information to enable positive identification of assets. in view the concept of materiality, a company may have a policy to capitalize only those assets which cost more than a specified amount. fixed assets comprise of movable & immovable items like land, buildings, vehicles, machinery etc., recording of information may vary from one type of fixed asset to another. Different registers are maintained for different types of fixed

* Keeping

* As

* Hence,
assets.

*
Basic Classifications & information registered:

Equipment & Machinery

Location/area/pl an Government valuation Zoning of the building area Market valuation Improvements Date acquired, and How acquired Ownership, if leased Present use and condition.

Original cost Date of purchase Rate of depreciation Insured amount Vehicle age, Mileage Mechanical problems experienced Regular checkups Accidents

Unique identification number /tag number Date of acquisition Cost Rate of depreciation Insured amount Description Serial number Location Mechanical problems Name of custodian

Land & Buildings

Vehicles

*
* If FAR is not available from earlier days, it can be prepared with the help of old
vouchers. Yes
From the earliest available balance sheet, details about addition of new fixed assets are noted With the help of ledger a/c of the particular asset, trace the voucher nos. & corresponding details are noted

Is old vouchers available

No
Go back to the earliest year for which vouchers available & prepare a register following the same procedure Identify all the assets which were purchased before that year through sale deeds, registration papers etc., Remove all the items which were sold & prepare another register(Leave the details blank when not available) Get attested by the Treasurer stating that it is based on available information & not on accounting records.

Tally both the results & continue for all the assets

Enter the details to the register & repeat the same procedure for all the years

* Sample_FAR.xlsx

mix combined with the knowledge of the demand for stock/product. * Inventory turnover measures the number of times we sell or turn our average inventory investment. * 2 methods recognized by the Acc. Standards for determining the cost of inventory are:1. FIFO(First In First Out) 2. WAC(Weighted Average Cost)

* Inventory analysis is the process of understanding the stock/product

* Inventory turnover = Cost of goods sold from stock sales during

the past 12 months/Average inventory value during the past 12 months

* Para V of the CORPORATE GOVERNANCE VOLUNTARY

GUIDELINES 2009 states that : * Since the Board has the overarching responsibility of ensuring transparent, ethical and responsible governance of the company, it is important that the Board processes and compliance mechanisms of the company are robust. To ensure this, the companies may get the Secretarial Audit conducted by a competent professional. The Board should give its comments on the Secretarial Audit in its report to the shareholders. * Companies, which do not adopt these guidelines, either fully or partially, are expected to inform their shareholders about the reasons for not adopting these Guidelines. This is in consonance with the popular doctrine of Comply or Explain.

* The Board should give its comments on the Secretarial

Audit in Directors Report as provided in Para V of the Guidelines. * Secretarial Audit is a process to check compliance with the provisions of various laws and rules/regulations/procedures, maintenance of books, records etc., by an independent professional to ensure that the company has complied with the legal and procedural requirements and also followed the due process. * It is essentially a mechanism to monitor compliance with the requirements of stated laws. * Below is a sample secretarial compliance report format :-

* Non Interest / Total Income ratio measures the proportion of bank's total
income that have been generated by non-interest related activities (e.g. fees and commission, trading gains, FOREX activities etc.).

Non-interest income = (Total Income - Interest Income) / Total Income

* The interpretation of this ratio is subject to some controversy. Some

analysts view a high number as good, since it shows that the bank is not dependent on its lending activities to generate a profit. * However others take the opposite view and view a high number as indicating that the bank is dependent on unstable revenues that are not predictable for its profitability. * For example, in the UCO BANK Annual Report, the non interest income = (Total Income - Interest Income) / Total Income =(1559792.66 1463237.15) / 1559792.66) (in lacs) = 0.061902 (in lacs)

*
A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible discrepancies

 Due to the timing difference, omissions and errors made by the bank or the firm itself. The balance of the bank statement and the bank account in the cash book rarely agree. Bank reconciliation statements can be used To explain the reasons for the differences and to identify errors and omissions in both documents, so that corrections can be made as soon as possible.

1.

Uncredited item: They are deposits paid into the bank. These items occurred too close to the cut-off date of the bank statement and so do not appear on the statement. They will appear on the next statement.

2.

Unpresented cheques: They are cheques issued by the firm that have not yet been presented to its bank for payment.

3.

Standing orders: They are standing instructions from the firm to the bank to make regular payments.

4.

Direct debits
They are payments made directly through the bank.

5.
6. 7. 8.

Bank charges
They are charges made by the bank to the company for banking services used.

Dishonored cheques
They are cheques deposited but subsequently returned by the bank due to the failure of the drawer to pay.

Credit transfers / direct credits

They are money received from customers directly through the banking system.

Interest allowed by the bank

They are interest received for deposits or fixed deposits.

1. 2.

To reconcile the Bank statement with the Corrected Cash Books To reconcile the Bank statement with Unadjusted Cash Book

Corrected balance in hand as per Cash Book x

Add Un-presented cheques Wrong credits by the bank x x x x Less Bank deposits not yet entered on Bank Statement x Wrong debits by the bank x x x

1996
Dec 1
3 10 30

Bal b/f
W Lee T Cheung S Sin

2800
1000 2000 1400

1996 Dec 8 20 29 31

K Wong C Kwok M Tang Bal c/f

$ 1600 700 100 4800

Uncredited items

Unpresented cheque

1996
Dec 1 Balance

Dr

Cr

Balance 2800

$
3 Cheque deposit 8 Cheque 76343 10 Cheque deposit 11 Dishonoured cheque 11 Service charges 12 Autopay-rent 20 Cheque 76344 31 Bank interest 31 Credit transfer-commission received 1600

$
1000 2000 3800 2200 4200 2200 2170 1920 1220 50 300 1270 1570

2000 30 250 700

31 Balance

1570

1996
Dec 31 Balance b/f 4800 31 Comm rec 300 31 Bank Int 50

1996
Dec 31 T Cheung Dishonoured cheq. 2000 31 Bank charges 30 31 Rent 250 31 Balance C/F 2870

*
5150 5150 in the cash book Identify the items which have been omitted

Bank Reconciliation Statement as at 31 Dec 1996

$ Corrected balance in hand as per Cash Book Add Un-presented cheques 2870 100 2970

Less

Bank deposits not yet entered on Bank Statement 1570

14

Balance in hand as per Bank Statement

Only adjusted caused by timing difference

* The MD&A requirements are intended to satisfy

three principal objectives:

1.

To provide a narrative explanation of a company's financial statements that enables investors to see the company through the eyes of management; To enhance the overall financial disclosure and provide the context within which financial information should be analyzed; and To provide information about the quality of, and potential variability of, a company's earnings and cash flow, so that investors can ascertain the likelihood that past performance is indicative of future performance.

2. 3.

* Industry Structure & Development * Opportunities and threats * Segment Wise or product wise performance * Outlook * Risks and concerns * Internal Control Systems and their adequacy * Discussion on financial performance with
operational performance

* Material Development in HR

* A statement of owner's equity is one of the main

financial statements that quantify the financial position of an organization's activities at a particular point in time. * Although it may also be commonly known as a statement of shareholder's equity, the purpose is identical. * The statement of owner's equity details the changes to the owner's equity account during the accounting period as the organization issues dividend payments and retains money for use within the organization for investment. * To fully define the statement of owner's equity, you have to reconcile the previous equity balance with withdrawals (or dividend payments), investments and income of the current accounting period

* Refer to the previous statement of owner's

equity to determine the ending balance for the last accounting period. This figure serves as your beginning balance for the current accounting period.

* You need the beginning balance to calculate

the change in the owner's equity account for the current accounting period. This is the first piece of data you need to balance the equity equation

From Balance Sheet

Sundaram Fasteners Limited Statement of Owner's Equity For the Month Ended 31-03-2012

Balance March 31 2011

55,494.96

* Calculate net income by subtracting the

amount of money you spent on expenses to generate revenue from your organization's operations. The basic net income equation is as follows: net income = revenue - expenses

* A more specific net income equation accounts

for capital gains and losses. Capital gains may be an increase in value of your investment. Conversely, a capital loss is a loss of value on your investment. This is another piece of data you need to generate the statement of owner's equity.

Net Income= Revenue- Expenses

Sundaram Fasteners Limited Statement of Owner's Equity For the Month Ended 31-03-2012
Balance March 31 2011 55,494.96 Net Income 11,259.87 Sub Total 66754.83

* Calculate how much money was withdrawn

from the owner's equity account. In general, the owner's equity account is an owner's claim on profits. correlate to low debt levels and may be a sign of the good financial health of an organization. for personal use or as dividend payments may affect the ending equity balance that appears on the statement of owner's equity at the end of the accounting period.

* Higher balances in owner's equity accounts may * Withdrawals from the owner's equity account

Sundaram Fasteners Limited Statement of Owner's Equity For the Month Ended 31-03-2012
Balance March 31 2011 Net Income Sub Total Withdrawals Less

55,494.96 11,259.87 66754.83 3408.85

* Calculate the ending balance for the statement

of owner's equity. Calculate the difference between investment and withdrawals from the owner's equity account. Take this figure and add it to income and the beginning equity balance. See the formula below beginning equity balance +

* Ending equity balance =

income withdrawals

Sundaram Fasteners Limited Statement of Owner's Equity For the Month Ended 31-03-2012
Balance March 31 2011 55,494.96 Net Income 11,259.87 Sub Total 66754.83 Withdrawals 3408.85 Less

Balance March 31 2012 63345.98

*The debtor days ratio focuses on the time

it takes for trade debtors to settle their bills. average) may suggest general problems with debt collection or the financial position of major customers. customer debts is a vital part of cash flow management, so this is a ratio which is very closely watched in many businesses.

*A high figure (more than the industry

*The efficient and timely collection of

Ashok Leyland
Sales (in Rs. Crores) 2011 2010 7244.71 5981.07 Debtors (in Rs. Crores) 1022.06 957.97 Debtor Days 51.4 58.5

Sundaram Fastners

Sales (in Rs. Crores) 2011 362.76

Debtors (in Rs. Crores) 16931.53

Debtor Days 73.71

2010

239.45

12118.08

73.58

* Debtors turnover is found out by dividing

credit sales by average debtors:

Debtors turnover = Credit sales / Average debtors

* Debtors turnover indicates the number of times

debtors turnover each year. efficient the management.

* Generally, higher the higher turnover, the more

* Aged Debtors Analysis produces an analysis of

unpaid invoices, aged by due date. Debts are broken down into different ageing periods.

* These are aged forward to distribute the

outstanding Accounts Receivable balance over forthcoming weeks, months or quarters.

* An aged debtor report details a list of the

customers that owe or will soon owe your company money

* Aged debt analysis reports are typically

created on a six- or eight-column ledger or graph. the status of all money owed, when it is due and if it is overdue.

* They are used to alert company managers of * It helps companies increase their cash flow by
paying debts on the latest date possible.

* This gives companies the ability to hold their

money longer by managing their finances more efficiently.

* Creditor days is a similar ratio to debtor days and it

gives an insight into whether a business is taking full advantage of trade credit available to it.

* This ratio estimates the average time it takes a business

to settle its debts with trade suppliers.

* As an approximation of the amount spent with trade

creditors, the convention is to use cost of sales in the formula which is as follows:

* An example of the calculation is shown below:

2010 Cost of Sales (in Rs) 13465 2011 12680

Trade Payable (in Rs)

Creditor Days

2310
62.6

2225
64.2

* According to the data, the business is taking just over two months * In general a business that wants to maximise its cash flow should
take as long as possible to pay its bills.

before it settles the bills it owes to its suppliers. Creditor days fell slightly from 64.1 days to 62.6 days.

* Ideally, the debtor collection period (as calculated by debtor days)

should be shorter than the creditor payment period (creditor days) but this very much depends on the strength of negotiation power with customers and suppliers.

* Aged Creditors Analysis produces an analysis of unpaid

invoices, aged by due date.

* Creditors are broken down into five ageing periods. * These are aged forward to distribute the outstanding
Accounts Payable balance over forthcoming weeks, months or quarters.

* Creditor Aging Report.xlsx

* Companies are using sophisticated software for

MIS report generation since it improves speed and accuracy. reports from Microsoft Excel.

* It is much more effective than generating * Some of the MIS softwares are :
1. Autocount Accounting

2. MYOB Plus for Windows

3. Peachtree Complete Accounting

* Characterized by its easy-to-learn and integrated

features, AutoCount Accounting helps to streamline your business operation. business and able to perform all types of account transactions, no matter how complicated it is. generated from the software

* It provides strong and stable database for every type of

* The financial statements and many MIS reports can be

* Screenshots of some of the reports that can be
generated is shown in the following slides.