Document From Prince

A STUDY ON
FUNDS FLOW STATEMENTS

WITH REFERENCE TO
LINERS INDIA PVT.LTD, VIJAYAWADA

A project report submitted in partial fulfilment of the
requirement for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
SUBMITTED BY
PATHA SUMEN
(REG.NO.21AR1E0005) Under
the guidance of
Mr. G.VENKATA RAO

M.COM, MBA
Associate Professor
DEPARTMENT OF MANAGEMENT STUDIES SAI

TIRUMALA NVR ENGINEERING COLLEGE
(Affiliated to J NT U Kakinada, Approved by AICTE, NEW DELHI)
ISO 9001: 2015 Certified Institution, Accredited by NAAC
JONNALAGADDA, NARASARAOPET, GUNTUR DT - 522601
SAI TIRUMALA NVR ENGINEERING COLLEGE
Affiliated to J NT U Kakinada, Approved by AICTE, NEW DELHI) ISO
9001: 2015 Certified Institution, Accredited by NAAC
JONNALAGADDA, NARASARAOPET, GUNTUR DT- 522601
DEPARTMENT OF MANAGEMENT STUDIES
CERTIFICATE
This is to certify that the project report entitled “A STUDY ON FUNDS

FLOW STATEMENTS with reference to LINERS INDIA PVT.LTD,
VIJAYAWADA” is a genuine and Bonafede work composed by PATHA SUMEN
(21AR1E0005) under my guidance and submitted in partial fulfilment of the
requirements for the award of the degree of the MASTER OF
BUSINESS ADMINISTRATION by J N T University, Kakinada, Andhra Pradesh.
Project Guide Head of the Department
Mr. G.VENKATA RAO M.Com, MBA Mr. G.VENKATA RAO M.Com, MBA
Associate Professor Associate Professor
Dec.25.2022
This is to certify that Mr. PATHA SUMEN, Regd. No: 21AR1E0005 Student
of MASTER OF BUSINESS ADMINISTRATION course of SAI
TIRUMALA ENGINEERING COLLEGE, Jonnalagadda, Narasaraopet, Guntur
Dist-522601. He had undergone project work in our organization for 10.11.2022
to 10.12.20.22 in the relevant field of
“A STUDY ON TRAINING AND DEVELOPMANT WITH REFERENCE TO
LINERS INDIA LIMITED MANAGEMENT,”
During the period of training in our organization we found that he is Sincere and hardworking
and his conduct is good.
We wish him all success in his future endeavour’s
For Liners india Limited
GANESH SUBRAMANYAM
External Examiner
DECLARATION
I hereby declare that the project report entitled “A STUDY ON FUNDS FLOW
STATEMENTS WITH REFERENCE TO LINERS INDIA PVT.LTD,
VIJAYAWADA,” has been prepared by me as a part of the requirement of the MASTER
OF BUSINESS ADMINISTRATION, under the guidance of Mr.
G.VENKATA RAO, Department of Management studies SAI TIRUMALA NVR
ENGINEERING COLLEGE, Narasaraopet, affiliated to J N T University, Kakinada.
This is my original work and the results embodied in this project work have not been
submitted to any other university or institution for the award of any degree as per my
knowledge and belief.
PLACE :Narasaraopet DATE

:
(PATHA SUMEN)
Regd.No.21AR1E0005
ACKNOWLEDGEMENT
I express my deep sense of gratitude to Dr.NALABOTU

VENKATARAO GARU, BVSc, Chairman of SAI TIRUMALA NVR
ENGINEERING COLLEGE Narasaraopet, for creating excellent academic
atmosphere and providing good infrastructural facilities to us.
My sincere thanks to Dr.B.V.RAMA MOHANA RAO, B.Tech(ECE).,
M.Tech(IIT KGP), Ph.D (IIT KGP), Principal of SAI TIRUMALA NVR ENGINEERING
COLLEGE for giving me permission to do this project.
I take much pleasure to express my deep sense of gratitude and thankfulness to
Head of the Department Mr. G.VENKATA RAO, M.Com,MBA Assoc professor SAI
TIRUMALA NVR ENGINEERING COLLEGE, Narasaraopet.
I take much pleasure to express my deep sense of gratitude and thankfulness
to my internal guide Mr.G.VENKATA RAO M.COM, MBA
Assoc.Professor, SAI TIRUMALA NVR ENGINEERING COLLEGE, for the
great support given by him during my Project Work.
I would like to extent my sincere thanks to General Manager in LINERS

INDIA PVT.LTD, VIJAYAWADA project guide, who helped me a lot in
completion of my project work and who gave me an opportunity to do this project
in their organization.
My sincere thanks to all the staff member of Department of
Management Studies, SAI TIRUMALA NVR ENGINEERING COLLEGE, for
their consistent guidance in completion of my project work.
PATHA SUMEN
Regd.No.21AR1E0005
ORIGINALITY REPORT
CONTENTS
CHAPTER-1 01-09
 Introduction 01
 Objectives of the study 04
 Need of the study 05
 Scope of the study 06
 Methodology of the study 07
 Limitations of the study 09
CHAPTER-2 10-42
 Industry Profile
&
 Company Profile
CHAPTER-3 43-63
 Theoretical framework
CHAPTER-4 64-86
 Data Analysis and Interpretation
CHAPTER-5 87-90
 Findings
 Suggestions
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CHAPTER -1 INTRODUCTION INTRODUCTION
An analysis of financial statement is important aid to financial analysis. The focus of

financial analysis is on key figures in the financial statements and the significant relationship
that exists between them.
Page 1
Sai Tirumala NVR Engineering College
The analysis of a financial statement is the process of evaluating the relationship
between component parts of financial statements to obtain a better understanding of the firms’
position and performance.
How ever, the basic limitations of the traditional financial statements can price the
balance sheet and the profit and loss a/c i.e., they do not give all the information related to the
financial operations of a firm. Therefore, the financial statements provide a view of the
financial position and operations of a firm thus. They not only indicate the present position
they also indicate the causes leading up to large extent.
The financial statement, i.e., the balance sheet and profit and loss a/c or Income
statement of business, reveal the net effects of the various transactions on the operations and
financial position of the company. The balance sheet gives a summary of the assets and
liabilities of an undertaking at a particular point of time. It reveals the financial status of the
company. The assets side of balance sheet shows the deployment of resources of an
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undertaking while the liabilities sided indicates its obligations i.e., the manner in which these
resources were obtained the profit and loss account reflects of the business operations for a
period of time. It contains a summary of expenses incurred and the revenues realized in an
accounting period. Both these statements provide the essential basic information on the
financial activities of a business, but their usefulness is limited for analysis and planning
purpose. The balance sheet gives a static view of the resources (liabilities) of a business and
the uses (assets) to which these resources have been put at a certain point of time. It does not
disclose the causes for changes in the assets and liabilities between two different points of
time.
The profit and loss a/c, in a general way, indicates the resources provided by operations.
But there are many transactions that take place in an undertaking and which do not operate
though profit and loss a/c. thus, another statement has been prepared to show the changes in
Sai Tirumala NVR Engineering College Page 2

the assets and liabilities from the end of one period of time to the end of another period of time.
The statement is called a statement of changes in financial position or a funds flow statement.
The funds flow statement is a statement, which shows the movement of funds and is a
report of the financial operations of the business undertaking. It indicates various means by
which funds were obtained during a particular period and the ways in which these funds were
employed. In simply words it is a statement of source and application of funds.
“A statement prospective or retrospective, setting out the sources and applications of

the funds of an enterprise. The purpose of the statement is to indicate clearly the requirement
of funds and how they are proposed to be raised and the efficient utilization and application of
the same”
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OBJECTIVES OF THE STUDY
To present a theoretical framework relating to funds flow analysis.
 The main objective of the study is to analyze the financial information of the Liners
India Limited.
 To evaluate the liquidity position of Liners India Limited
 To understand the operating efficiency of Liners India Limited.
 To determine the financial status of the company and analyze them.
 To make pertinent suggestions for the effective management of funds flow analysis of
Liners India Limite
NEED OF THE STUDY
The main need of the study is to analyses the financial information of the Liners India
Limited.
 To find out the liquidity or short term solvency of the Liners India Limited.
 To allow the relationship among various aspects in such a way that it allows drawing conclusion
about the performance, strengths and weaknesses of the company.
 To know the short term servicing ability of the company.

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SCOPE OF THE STUDY
This study is useful to the management, owners, investors, government, employees, suppliers
and society.
 This study is useful to the research scholars who conduct in depth research.
 This study is useful to the similar organizations in assessing their financial information.
 This study provides on insight into the various aspects of financial statement analysis
.Hence the company can make the necessary changes in the policies relating to it.
 This study is also useful to competitors to take necessary. Steps to improve the financial
performance of the organization.

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REASERCH METHODOLOGY
Definition:
The process used to collect information and data for the purpose of making business
decisions. The methodology may include publication research, interviews, surveys and other
research techniques, and could include both present and historical information.
Methodology is a systematic process of collecting information in order

to analyze and verifies a phenomenon.
Diagrammatic Representation of Research Methodology

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The collection of data is two principle sources. They are discussed as

 Primary data
 Secondary data
 Primary Data:-
The primary data needed for the study is gathered through interview
with concerned officers and staff, either individually or collectively, sum of the information
has been verified or supplemented with personal observation conducting personal interviews
with concerned officers of finance department of “Liners India Limited”.

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 Secondary Data:-
The secondary data needed for the study was collected from published
sources such as, pamphlets of annual reports, returns and internal records, reference from text books
and journal management.
Further data needed for the study was collected from:-
Collection of required data from annual records of the company.

Reference from text books and journals relating to financial management.
LIMITATIONS OF THE STUDY

 The funds flow statement does not clearly discuss the operating investing, financing activities of
funds
 Since the current year was not completed it was not possible to compare the current year
information with the previous information.
 Some of the information was with registered office of the company due to some statutory
requirements so it became difficult to get the overall information of the company.
 Since we are new to the company, company refused to provide its financial information.
 The funds flow contains historical information. This in formation is useful; but an investor
should be concerned more about the present and future.
 The funds flow does not clearly discuss the financial position of the company

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CHAPTER -2 INDUSTRY PROFILE

&
COMPANY PROFILE INDUSTRY PROFILE
Automobile Industry
The Indian automotive industry has witnessed an extraordinary boom in recent

years, owing to the improvement in living standards of the middle class, and a significant
increase in their disposable incomes. The size of the Indian automotive industry is estimated
between US$ 120.09 billion and US$ 155.12 billion by 2016. The industry is expected to touch
the 10 million mark, to which the Commercial Vehicle Segment will be a major contributor.
Industry experts attach the Indian Automobile sales growth at a compounded annual growth
rate of 12.24 per cent 17,376,624 vehicles - by 2015.
On the picture of the Indian economy, auto industry occupies a prominent

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place. Due to its deep forward and backward linkages with several key segments of the economy,
automotive industry has a strong multiplier effect and is capable of being the driver of economic growth.
A sound transportation system plays a pivotal role in the country's rapid economic and industrial
development. The well-developed Indian automotive industry ably fulfils this catalytic role by
producing a wide variety of vehicles passenger cars, light, medium and heavy commercial vehicles,
multi-utility vehicles such as jeeps, scooters, motorcycles, mopeds, three wheelers, tractors etc. The
domestic market share is shown below
Domestic Market Share for 2019-20
The automotive sector is one of the core industries of the Indian economy,
whose prospect is reflective of the economic resilience of the country. Continuous economic
liberalization over the years by the government of India has resulted in making India as one of
the prime business destination for many global automotive players. The automotive sector in
India is growing at around 18 per cent per annum.

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Automobile Industry was de licensed in July 1991 with the announcement of

the New Industrial Policy. The passenger car industry was, however, de licensed in 1993. No
industrial licensed is required for setting up of any unit for manufacture of automobiles expects
in some special cases. The norms for Foreign Investment and import of technology have also
been progressively liberalized over the years for manufacture of vehicles including passenger
cars in order to make this sector globally competitive.
At present 100% Foreign Direct Investment (FDI) is permissible under

automatic route in this sector including passenger car segment. The import of
technology/technological up gradation on the royalty payment of 5% without any duration
limit and lump sum payment of USD 2 million is also allowed under automatic route in this
sector with the gradual liberalization of the automobile sector since 1991, the number of
manufacturing facilities in India has grown progressively. At present there are 15.7%
manufacturers based on passenger cars & multi utility vehicles, 4.66% manufacturers based
on commercial vehicles, 2.95% of 3 wheelers and 77.32
The automotive industry has already attained a turnover of Rs. 1, 65,000 Crore
(34 billion USD). The industry provides direct and indirect employment to 1.31 Crore people.

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The contribution of the automotive industry to GDP is 22% in 2012. The industry is also making a
contribution of 13% to the fund of indirect taxes of the Government.
Production of Passenger Vehicles crossed 3 million units growing only and 4.7
percent Commercial Vehicles grew 20 percent to 9 lakhs while the Two-Wheelers market exceeded 15
million units in sales growing 16 percent
Advantage India
1. India holds huge potential in the automobile sector including the automobile component sector
owing to its technological, cost and manpower advantage.
2. India has a well-developed, globally competitive Auto Ancillary Industry and established
automobile testing and R&D centers.
3. The country enjoys natural advantage and is among the lowest cost producers of steel in the world.
4. India is the world’s second largest manufacturer of two wheelers.
5. India is fifth largest manufacturer of commercial vehicles.

6. India is fifth largest manufacture of tractors in the world.
7. India is tenth largest passenger car market in Asia. 8. World’s largest manufacturer of two
wheelers is located in India.
Auto Components Industry
The Indian auto components industry has an estimated production of

785.753units with US$ 43.3 billion with 13% growth. The spiraling demand from domestic
and international auto companies has seen this sector emerging as one of the fastest growing
manufacturing sectors in India and globally. In tandem with the industry trends, the Indian
component sector has shown great advances in recent years in terms of growth, spread,
absorption of new technologies and flexibility.
Indian auto component industry has seen major growth with the arrival of

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world vehicle manufacturers from Japan, Korea, US and Europe. Today, India is emerging as one
of the key auto components center in Asia and is expected to play a significant role in the global
automotive supply chain in the near future.
The Auto Component industry is today considered as the sunrise industry

with huge growth prospects. The potential of this sector has been amply highlighted in the
Automotive Mission Plan drawn up by the Ministry of Heavy Industries & Public Enterprises.
The estimated auto components production turnover is 530 billion and the actual production
is 2063 billion.

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Indian Auto Components Production Turnover
Today, the auto-component industry has emerged as a highly competitive

segment of the manufacturing sector. Indian auto component industry is wide (over 651 firms
in the organized sector producing practically all parts and more than 10,000 firms in small
unorganized sector, in iterated format) and has been one of the fastest growing segments of
auto industry. During the year 2020-21, the Auto Component Industry continued its high
growth path and emerged as one of the fastest growing sector in Indian Engineering Industry
by clocking 21% growth in output during the year.

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Auto Component exports grow by 31 percent to USD 6.9 billion in 2020-21

from USD 5.2 billion in the year before. Imports continued to grow at 25 percent, exceeding USD
10.5 billion compared to USD 8.5 billion in the previous year.
It supports industries like automobiles, machine tools, steel, aluminum,

rubber, plastics, electrical, electronics, forgings and machining. India has also emerged as an
outsourcing hub for auto parts for international companies such as Ford, General Motors,
Daimler Chrysler, Fiat, Volkswagen, and Toyota.
As Global OEMs/Tier 1 companies have identified India as a Leading

Competitive country for sourcing auto components for their global production, Indian auto
component industry export scenario is changing very fast and auto component industry’s
export growth was 15% in 2020-21.

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Auto Components Exports and Imports-in rupees
The developments in the Indian auto component industry can be traced to trade liberalization
during the 1990’s that resulted in an influx of multinational automotive companies like ford,
general motors, Hyundai, Mercedes-Benz, Peugeot and Volvo into
India. The entry of these foreign auto companies during the early 90’s changed quality standards and
impacted the complexity of the parts required by OEMs.
Consumers reacted favorably to the expanded set of offerings and

consequently the demand for cars in India surged. For example, the sale of foreign brand cars
grew from almost nothing before the entry of Hyundai in 1997 to 15% of the car market in the
year 1998-99 to more than 28% of the car market in 2018-19.
The auto market, consisting of passenger vehicles, commercial vehicles, two

wheelers, three wheelers and tractors, expanded from a sales level of 3.3 million vehicles
(417,762 passengers vehicles alone) in the year 2016-17, to nearly 6.8 million vehicles
(900,752 passenger vehicles) during 2020-21.

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The Indian auto component industry responded to these challenges by adding
capacity and modernizing existing plants. The total sales volume of auto components has increased
47% in the year 2015.
Many firms entered into technical collaboration and equity partnership global
tier-one suppliers. Global tier-one suppliers like Delphi and Visteon set manufacturing units
in India. During this period, there was significant growth in multinational companies ($1
billion in 2020-21, as against $0.27 billion in 1997 exports are still very compared to annual
global auto component sales, which was $730 billion, they are a significant share of the sales
( approximately 10-12%) components firms. So the online sales also increasing
Before Marathi, the auto component industry was characterized by low volumes, high
fragmentation, negligible auto machine and consequently poor quality. This was simply
because the automobile industry did not have any volumes worth talking about. Marathi
challenged all that (in the process, Indian car producers in the first year itself by making 22,500
vehicles) for the first time the Indian market hand volumes worth speaking of a product that
was exportable and proper systems.

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They key of course is the export-worthiness of the Marathi 800, Zen,
something total alien to the industry before. So as Marathi grew crossing the 1, 00,000 mark by
20142015, the component industry boomed in tandem.
In the meantime, other Japanese majors like Honda, Yamaha, Toyota and
Mitsubishi also flagged off two-wheelers and light commercial vehicles production. This
paved the way for foreign collaborations in the component sector, and till date some Japanese
alliances have been struck. Marathi itself floated joint ventures (JVs) and has as many as 375
vendors.
That was just the first step in the process of Indian component marks producing
globally competitive products. To maintain their viability, ancillary had little choice but to focus on
export markets, and step up quality.
This is evident in the spate of ISO 9000- certifications those component

makers began to receive. Of the roughly 651 companies in this sector, at least 324 have bagged ISO
9000 certification, something no other industry can boast of.
The step up process has not ended with the Japanese innovation. Gradually
manufacturers from all parts of the world are making a beeline for India.
Component makers are now exposed to different, more complex and advanced
development processes. Earlier, they were dealing with just one culture, one standard
Japanese. Today we have the Koreans, the Americans, the Europeans and the French coming
with their global suppliers in to the country.
Ford, for instance, is flagging off the ford ACG (Automotive component
group) and general motors’ have brought in Delhi. Toyota too, is creating a Toyota village
around its manufacturing unit in the south, as is Hyundai, which will house all its ancillary
suppliers in an industrial park.
Investments
In order to keep up with the growing demand, several auto makers have started investing heavily in
various segments of the industry during the last few months. The industry has attracted Foreign Direct

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Investment (FDI) worth US$ 14.32 billion during the period April 2000 to December 2015, according to
data released by Department of Industrial Policy and Promotion (DIPP).
Some of the major investments and developments in the automobile sector in India are as follows:
• MV Agusta, the Italy-based premium motorcycle manufacturer, has entered India

through an exclusive partnership with Pune-based Kinetic group with the launch of
three luxury bikes, which will be sold through the ‘Motoroyale’ chain in Pune.
• Sweden-based electric vehicle maker Clean Motion plans to invest US$ 10 million in
India over the next three years in order to expand operations including setting up of an
assembly unit for its Zbee three-wheelers in the country.
• Isuzu Motors, the Japan-based utility vehicle manufacturer, has inaugurated its
greenfield manufacturing unit in SriCity, Andhra Pradesh, at a cost of fcRs 3,000 crore
(US$ 450.94 million).
• Japanese two-wheeler manufacturer Honda Motorcycle and Scooter India (HMSI) has
opened its fourth and world’s largest scooter plant in Gujarat, set up to initially produce
600,000 scooters per annum to be scaled up to 1.2 million scooters per annum by
mid2016.
• American car maker Ford has unveiled its iconic Ford Mustang in India and will make
its debut in second quarter of FY2016 within the price band of Rs 45 lakh (US$ 66,146)
and Rs 50 lakh (US$ 73,496) in the Indian market.
• Nissan Motor Co. Ltd is in discussion with Government of India to bring electric and
hybrid technologies to India as the government plans to reduce air pollution caused by
vehicles.

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• Global auto major Ford plans to manufacture in India two families of engines by 2017,
a 2.2 litre diesel engine codenamed Panther, and a 1.2 litre petrol engine codenamed
Dragon, which are expected to power 270,000 Ford vehicles globally.
• The world’s largest air bag suppliers Autoliv Inc, Takata Corp, TRW Automotive Inc
and Toyoda Gosei Co are setting up plants and increasing capacity in India.
• General Motors plans to invest US$ 1 billion in India by 2020, mainly to increase the
capacity at the Talegaon plant in Maharashtra from 130,000 units a year to 220,000 by
2025.
• US-based car maker Chrysler has planned to invest Rs 3,500 crore (US$ 513.5 million)
in Maharashtra, to manufacture Jeep Grand Cherokee model.
• Mercedes Benz has decided to manufacture the GLA entry SUV in India. The company
has doubled its India assembly capacity to 20,000 units per annum.
• Germany-based luxury car maker Bayerische Motoren Werke AG’s (BMW) local unit
has announced to procure components from seven India-based auto parts makers.
• Mahindra Two Wheelers Limited (MTWL) acquired 51 per cent shares in France- based
Peugeot Motorcycles (PMTC).
Government Initiatives
The Government of India encourages foreign investment in the automobile sector and allows 100 per
cent FDI under the automatic route.
Some of the major initiatives taken by the Government of India are:
• Mr Nitin Gadkari, Minister of Road Transport, Highways & Shipping has announced
plans to set up a separate independent Department for Transport, comprising of experts

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from the automobile sector to resolve issues such as those related to fuel technology,
motor body specifications and fuel emissions, apart from exports.
• Government of India aims to make automobiles manufacturing the main driver of
‘Make in India’ initiative, as it expects passenger vehicles market to triple to 9.4 million units
by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-26.
• In the Union budget of 2020-21, the Government has announced to provide credit of Rs
850,000 crore (US$ 124.71 billion) to farmers, which is expected to boost the tractors
segment sales.
• The Government plans to promote eco-friendly cars in the country i.e. CNG based
vehicle, hybrid vehicle, and electric vehicle and also made mandatory of 5 per cent
ethanol blending in petrol.
• The government has formulated a Scheme for Faster Adoption and Manufacturing of
Electric and Hybrid Vehicles in India, under the National Electric Mobility Mission
2020 to encourage the progressive induction of reliable, affordable and efficient electric
and hybrid vehicles in the country.
• The Automobile Mission Plan (AMP) for the period 2006–2016, designed by the
government is aimed at accelerating and sustaining growth in this sector. Also, the
wellestablished Regulatory Framework under the Ministry of Shipping, Road Transport
and Highways, plays a part in providing a boost to this sector.
Production
The industry produced a total 23,960,940 vehicles including passenger vehicles, commercial
vehicles, three wheelers, two wheelers and quadricycle in April-March 2016 as against
23,358,047 in April-March 2015, registering a marginal growth of 2.58 percent over the same
period last year. Domestic Sales

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The sales of Passenger Vehicles grew by 7.24 percent in April-March 2016 over the same period
last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicles and Vans grew by
7.87 percent, 6.25 percent and 3.58 percent respectively during April-March 2016 over the
same period last year.
The overall Commercial Vehicles segment registered a growth of 11.51 percent in April- March
2016 as compared to the same period last year. Medium & Heavy Commercial Vehicles
(M&HCVs) registered a growth at 29.91 percent and Light Commercial Vehicles grew
marginally by 0.30 percent during April-March 2016 over the same period last year.
Three Wheelers sales grew by 1.03 percent in April-March 2016 over the same period last year.
Passenger Carrier sales grew by 2.11 per cent & Goods Carrier sales declined by (-) 3.62
percent respectively in April-March 2016 over April-March 2015.
Two Wheelers sales registered a growth at 3.01 percent during April-March 2016 over
AprilMarch 2015. Within the Two Wheelers segment, Scooters grew by 11.79 percent while
Motorcycles and Mopeds dropped by (-) 0.24 percent and (-) 3.32 percent respectively in
AprilMarch 2016 over April-March 2015.
Exports
In April-March 2016, overall automobile exports grew by 1.91 percent. Passenger Vehicles,
Commercial Vehicles, Three Wheelers and Two Wheelers registered a growth of 5.24 percent,
16.97 percent (-) 0.78 percent and 0.97 percent respectively in April-March 2016 over April-
March 2015.
Automobile Domestic Sales Trends
Category 2010-11 2016-17 2017-18 2018-19 2019-20 2020-21
Passenger Vehicles 25,01,542 26,29,839 26,65,015 25,03,509 26,01,236 27,89,678

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Commercial iVehicles 6,84,905 8,09,499 7,93,211 6,32,851 6,14,948 6,85,704
Three Wheelers 5,26,024 5,13,281 5,38,290 4,80,085 5,32,626 5,38,092
Two iWheelers i1,17,68,910 i1,34,09,150 1,37,97,185 1,48,06,778 1,59,75,561 1,64,55,911
Grand iTotal 1,54,81,381 1,73,61,769 1,77,93,701 1,84,23,223 1,97,24,371 2,04,69,385
Gross Turnover of the Automobile Manufacturers in India (In USD Million)
i
2010-11 2016-17 2017-18 2018-19 2019-20 2020-21
43,296 58,583 66,264 67,607 55,212 58,909
(USD iConversion iRate) 47 46 47 50 60 61

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Future Prospectus
It is estimated that by 2020-21 the total production of the auto component

industry would be $75 billion with exports accounting for $15 billion, 20% of the total domestic
production. The demand for auto components in the same year expected to cross $80 billion.
Domestic Indian companies have developed strong manufacturing capabilities
that have helped them till now in keeping cost low and quality under control.
As volume increases, Indian components manufactures will have to scale up their

operations and future improves quality, cost and delivery performance to global standards
demanded by customers, it added.
Over 70% of the auto component companies in India are SMEs. Government
support for R&D/new product development is critical.
It also asked for eliminating of customs duty on alloy steel, aluminum alloy
and secondary aluminum alloy.
COMPANY PROFILE

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INTRODUCTION
Liners India Limited is an ISO/TS 16949 2002 certified company established

in1974 at Vijayawada. In the past, the company commenced operations in 1964 as a distributor
of automobile spare parts under the name of Jai Motors. Manufacturing operations started
under the name of Liners India in 1974 and in 2007 - Jai Motors merged with Liners India.
The founders of LIL are N.S.Mani and L.A.Srinivasan
The company is currently one of the largest international manufacturers of

centrifugally cast cylinder liners. They are the market leader in manufacturing centrifugally
cast cylinder 1 diesel automotive engines. It produces 100+ models of cylinder liners in Grey
and ductile ranging from 50mm to 150mm diameter bore size – and length from
150mm – 300 mm. They are the suppliers to manufacturers of engines worldwide. Today
LINERS INDIA LTD is the suppliers to the manufacturers of heavy, medium and light
commercial vehicles, agricultural tractors and diesel engines worldwide.
THE GROWTH STORY OF THE COMPANY
1. Jai Motors started its humble trading operations and later diversified into a
manufacturing facility, Liners India at Vijayawada, which is QS 9000 as well as ISO /TS 16949
2009 certified.
2. A second plant of Liners India was commissioned in Rudrapur in 2007 and a dedicated
facility was created for supporting Ashok Leyland Pant Nagar. Liners India is a primary vendor
for Ashok Leyland.
3. Plant 3 was commissioned in 2012 at Jaggiapet in Andhra Pradesh as part of our

expansion program where a dedicated machining facility has been set up for finishing
operations.
VISION
• To be the best auto component manufacturer meeting international standards. MISSION

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• To be a global player in auto component business catering to leading automobile
manufacturers.
THEIR MAIN PURPOSE
• Service to Customers
• Highest standards of work with passion, commitment, integrity, enthusiasm & confidence
• Undiluted attention to quality of product
• Continuous efforts to improve, strive for high standards with strong, lean organization
• Belief in enduring and long lasting relationships CORPORATE PHILOSOPHY OF LIL
• Treat Customers, Principals and Employees as equal partners in progress

• Deal only in products that give Customers full value for their money
• Transparency in all dealings and with strict financial discipline
QUALITY POLICY
It is the policy of LINERS INDIA LIMITED to ensure CUSTOMER

SATISFACTION by providing quality products at competitive prices on time and to support continuous
improvements in process control.
INFRA STRUCTURE
• 6500 Sq.meters of built in-area, with state of the art production facilities, located at
Vijayawada, Andhra Pradesh • 2000 KVA stand – by generators

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• Dedicated ancillaries
• Good marketing network
PRODUCTS
1. Manufacturing Division
• cylinder liners
2. Trading Division
Some of them are pistons, rings, pins, engine valves, fuel injection nozzles,
single cylinder pumps & injectors; cam bushes/oil pump bushes, water pump assemblies, and
tapper/ball/cylindrical/spherical roller bearings, automotive pipes, oil seals, fan belts, fuel/oil air filters,
tractor spares, rubber components, head light assemblies, spark plugs and glow plugs, shock absorbers
Liners India trading division JAI now operates various SBUs each specializing in a core area
which are
• Jai Motors (Division of Liners India Ltd.)

• Dealing in Engine Parts
• Jai Agencies (Division of Liners India Ltd)
• Dealing in Non – Engine Parts
• Jai Mahindra Tractors Parts (Division of Liners India Ltd)
• Dealing in Mahindra Genuine Parts
• Jai Genuine Spares (Division of Liners India Ltd0

• Dealing in Hyundai Genuine Car parts
• Jai Automotives (Division of Liners India Ltd)
• Dealing in Bosch Batteries & Lubricants

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PROCESS EXCELLENCE OF LIL
• Lean Manufacturing
• Attention to Quality in all aspects
• Statistical process Quality Control Sampling Techniques – CP and CPK Study
• Pareto Analysis
STRENGTHS OF LIL
• Jai brand equity in the market place

• Group well known for its ethics and integrity in business dealings
• Basic infrastructure and facilities in place
• Financial strength
• Back up manufacturing facility

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MILESTONES OF LIL

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1964 Jai Motors established as a partnership company and commenced Trading
operations.
1974 Liners India commenced Manufacturing Operations in Vijayawada
1984 Liners India converted into a Private Limited company
1998 Supplies commenced to TATA Cummins & Simpson
1999 Approved as Vendor to Federal Mogul
2000 QS 9000 Certified
2003 Received best Global Supplier Award from Federal Mogul Germany
2004 Vendor approval by John Deere India
2005 Exports to Mahle USA and Brazil commenced
2005 ISO Ts 16949 – 2002 Certified
2007 Merger of Jai Motors (Distribution House) with Liners India

(Manufacturing Division)
2007 Foundry capacity expansion at Vijayawada & new </c. shop at Rudrapur
2009 Approved as Vendor and commenced exports to John Deere France.
2010 Commenced supplies to Ashok Leyland, Uttarakhand as OE,
2011 Developed Induction Hardened Liners for US Market
2012 Machining capacity expansion by commissioning of jaggiapet plant

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In addition to this the customers also recognized the company and awarded with
 Federal Mogul - Delivery Excellence Award 2003

 Federal Mogul - Zero Defect Award 2003
MARKET SEGMENTATION OF LIL
 Retailers
 Semi – Wholesalers
 Authorized Vehicle Dealers
 State Transport Undertakings
 Fleet Owners
 Garages / Service Centers
MAJOR CLIENTS OF LIL
• Ashok Leyland
• Tata
• Royal Enfield
• Same
• John Deere
• Mahle
• Hispa cold
• Triumph
• Mahindra
PRODUCT MANUFACTURED
1. Cylinder Liners
Cylinder liner is a cylindrical part to be fitted into an engine block to form a

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cylinder. It is one of the most important functional parts to make up the interior of an engine the
cylinder liner, serving as the inner wall of a cylinder, forms a sliding surface for the piston rings
while retaining the lubricant within.
MAIN FUNCTIONS OF CYLINDER LINERS

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The following are the main functions of cylinder Liners
a. Formation of sliding surface
The cylinder liner, serving as the inner wall of a cylinder, forms a sliding surface for
the piston rings while retaining the lubricant within. The most important functions of cylinder
liners is the excellent characteristic as sliding surface and these four necessary points. a) High
anti – galling properties
b) Less wear on the cylinder liner itself.
c) Less wear on the partner piston ring.
d) Less consumption of lubricant.
b. Heart Transfer
The cylinder liner receives combustion heat through the piston and piston rings and transmits
the heat to the coolant.
c. Compression Gas Sealing
The cylinder liner prevents the compressed gas and combustion gas from escaping
outside. It is necessary that a cylinder liner which is hard to transform by high pressure and
high temperature in the cylinder. A cylinder wall in an engine is under high temperature and
high pressure, with the piston and piston rings sliding at high speeds. In particular, since longer
service life is required of engines for trucks and buses, cast iron cylinders that have excellent
wear – resistant properties are only used for cylinder parts.
2. Cylinder Liners for Aluminum Blocks
Global warming has started to show its adverse effects on the environment. To
improve the fuel efficiency and adhere to latest Euro norms automobile manufacturers are shifting
towards aluminum engines. These engines have as cast cylinder liners with special surface on the
outer diameter commonly referred to as spiny lock or stipple finish.

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To improve rigidity and high thermal conductivity properties of engine blocks,
Liners India has developed different specifications of cylinder liners that have high adherence
to aluminum blocks at the time of die casting by controlling the coarseness of the outer casting
surface with the special coating materials and in-process controls.
3. Grey & Ductile Iron Piston Rings
Liners India has developed materials with special properties in grey and ductile
iron by centrifugal casting process for critical sealing applications. These rings are being
supplied to Automotive, Locomotive, Marine, and Power generation, Aircraft, Aerospace and
Hydrocarbon processing applications. They also supply rough machined rings to ring
manufactures around the world in ductile and grey iron materials.
4. Centrifugal Castings
Centrifugal casting method was developed after the turn of the 20th century to
meet the need for higher standards. Spinning molds generate centrifugal force on molten metal to
position the metal within a mold.
As the molten metal solidifies from the outside in, a casting with dense, close
grain structure is created. As a result of close grain structure the centrifugal process offers
products with better physical properties than castings made using the static casting
method.Proper mold design, mold coatings, mold spinning speeds, pouring speeds, cooling
rates and metal chemistry results in castings with higher yields, fewer impurities and greater
strength.
MANPOWER OF LIL
HUMAN RESOURCE DEPARTMENT 5
ACCOUNTS DEPARTMENT 15

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PRODUCTION DEPARTMENT 400
STORES DEPARTMENT 5
DESPATCH DEPARTMENT 5
PACKING DEPARTMENT 25
QUALITY DEPARTMENT 10
MARKETING DEPARTMENT 30
TOTAL 495
MAJOR EQUIPMENTS OF LIL
• 108 Shaft Mounted Centrifugal Casting Machines
• 1 750KW Dual Track Induction Furnace
• 1 450 KW Dual Track Induction Furnace
• 1 Stabilizing Furnace (Online temp control)
• 116 Lathes
• 16 CNC turning machines
• 13 Center less grinding machines
• 6 Vertical boring machines
• 6 Honing machines

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• 6 Plateau honing machines 3(nagel)
• 3 Cylindrical grinding machines
• 1 Radial drilling machine

FACILITIES INSPECTION & TESTING EQUIPMENT
• Baird Optical emission Spectrometer
• WAS foundry master spectrovac
• Ce meters for Wet analysis
• Sand sieve analyzer
• UNION Metallurgical microscope
• Brinell Hardness tester
• Rockwell hardness Tester
• FES computerized UTM
• Zeiss Contour Graph
• Taylor Hobson Surface
• Roughness Tester
• Talyrond 365 Roundness Tester
FUNCTIONS OF DIFFERENT DEPARTMENTS
• PERSONNEL DEPARTMENT
• HRD DEPARTMENT
• FINANCE DEPARTMENT

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• MATERIAL DEPARTMENT
• PRODUCTION DEPARTMENT
• QUALITY
• MARKETING
• R & D DEPARTMENT
PERSONNEL DEPARTMENT
The department looks after the recruitment of employees, conduction interview,
selection of employees and also preparation of wages chart, payment of provident fund,
payment of ESI, payment of income tax and granting leaves. Also takes care of the
maintenance of standing orders, renewal of trade workers, and renewal of welfare fund.
HRD DEPARTMENT
The department looks after training development program to employees, plan
monthly schedule for training classes, conduct safety awareness program. Explain about savings
plans and human services to employees.
FINANCE DEPARTMENT
The department makes economic plans which are needed to the organization, takes loans from
banks, prepares annual reports and calculates the net profits to send them to the management.
MATERIAL DEPARTMENT
The department purchases raw materials on the parameters like good quality,
on time delivery, credit facility. It ensures the raw material cost variation and plans accordingly.
PRODUCTION DEPARTMENT
The department takes raw materials from the material department and shapes
them in the furnace. The production engineer does 8-10 operations according to the liner drawing
and then sends it to the quality department to check the perfection.

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QUALITY
This department checks the finished products in all parameters as per the
drawing of liner model and then sends it to dispatch section.
MARKETING
Marketing departments sells the products through marketing representatives,
sales offices and distributors. This department gets the orders from the customers through the
representatives, sales offices and distributors. This department sends the senior engineers to check
complaints of the customers. This department provides incentives to sell the product in the market.
R & D DEPARTMENT
The departments develop the schemes according to the customer drawing and
send to the production department. It develops all parameters of the company, makes research
plans to decrease the cost of production and improve the productivity.
• PRODUCTS - MANUFACTURING DIVISION

Centrifugally Cast Cylinder Liners made out of Cast Iron

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MANUFACTURING DIVISION STATE-OF-THE-ART MACHINING
Equipment
116 Shaft Mounted Centrifugal
Casting
Machines
1 800KW Dual Track Induction furnace
1 550KW Dual Track Induction furnace
1 Stabilizing Furnace
(online temp control
)
Major
Temperatures of the die and melt are
monitored before pouring
Chemical composition of every melt (bath) analyzed for adherence to material
specifications
Capacity Melting capacity of 49 MT /day

Range 1.5 Kgs to 20 Kgs
• Cell type layout • Average throughput – 10000 liners/day
• Dedicated flexible machining Major Equipment facility for new developments •
104 Lathes
• Current Operation – 20 hrs/day , • 16 CNC turning machines • 13
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Center less grinding machines
• 12
Vertical boring machines
• 18
Honing
6 days/week machines
• 9 Plateau honing machines ( 6 Nagel)
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• 3 Cylindrical grinding machines Surface finish of 2-3Ra roundnenss value with • 1
Radial drilling machine Cpk value microns of 1.66
• 1 Milling machine Nagel-With auto cycle and automatic size control
• 1 Vertical Turning Lathe to produce liners with 0.005 mm tolerance and
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LMW RIGI 25 CNC Turning VMW Vertical Boring Nagel Plateau
Honing Centre Machine M/C
Turning Centers with Fanuc Boring surface finish parameters Rk, Rpk, Rvk to meet accuracy
of 10 Controls with capability Euro 3 and 4 norms
to microns achieve perpendicularity and
SWOT ANALYSIS STRENGTHS -
• Innovative Culture
• Customer Loyalty
• Brand Name
WEAKNESSES -
• Inefficient work
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• High staff turn over
• Weak management
• Tarnished reputation
OPPORTUNITIES
• Financial leverage
• Innovation
• New products
• International expansion
• New markets
THREATS -
• Bad economy
• Mature markets
• Political risk
• Change in taste
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CHAPTER -3 THEORETICAL FRAMEWORK

THEORETICAL FRAMEWORK
Funds Flow Statement:-
The following are the definitions of funds flow statement.
According to R.N. Anthony:-
"The funds flow statement describes the sources from which additional
funds were derived and the uses to which these funds were put”.
According to R.A. Foulk:-
“A statement of sources and applications of funds is a technical devise

designed to analysis the changes in the financial conditions of a business between two dates”.
According to Big man:-

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“It is a statement which highlights the underlying financial

movements and explains the changes of working capital from one point of time to another”.
Thus funds flow statement is a report which summarizes the events

taking place between the two accounting periods. It spells out the sources from which funds
were derived and the uses to which these funds were put. This statement is essentially derived
from an analysis of the changes that have occurred in assets and liabilities items between two
balances sheet dates. In this statements only the net changes are shows that the outcome of a
transaction as of a series of transactions upon the financial condition of a business enterprise
is reflected more sharply.
Significance (or) Importance of Funds Flow Statement:-
The funds flow statement is an important tool of financial analysis.

The utility of the funds flow statement items from the fact that it enables management,
shareholders, investors, creditors and other interested in the enterprise to evaluate the uses of
financial policies of the management.
 Decisions Relating To Financing:-
With the people of the funds flow statement the analyst can evaluate
the financing patterns of the enterprise. An analysis of the major sources of funds in the past
reveals what portion of the growth was financed internally and what portion externally. The statement
is also meaningful in judging whether the company has grown at too fast a rate, credit has increased
at relatively higher rate, one would wish to evaluate the consequences of slowness in the trade
payments on the credit standing of the company and its ability to finance in future.
 Decision On Capitalization:-

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The funds flow statement serves as handmaid to the finance manager
in deciding the make up of capitalizations. Estimated uses of funds for new fixed assets
working capital, dividend, and repayment of debt are made for each of several future years.
Estimates are made of the funds to be provided by operations, and the balance must be obtained
by borrowing or issuance of new securities, if the indicated amount of new funds required is
greater than what the finance manager thinks possible to raise, then plans for new fixed assets
acquisition and the dividend policies are re-examined so that the uses of funds can be brought
into balance with the anticipated sources of financing them. In particular funds statements are
very useful in planning intermediate and long term financing.

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
Reveals The Reasons For Financial Difficulties:-
The funds flow statement reveals clearly the cause for the financial
difficulties of the company. The difficulties may be due to improper mix of short and
long term sources, un necessary accumulation of inventory of fixed assets etc., These
can be found out by a careful study of the funds flow statement.
 Useful To the External Parties:-
The outside parties can have a clear knowledge about the financial
policies that the company has persuade. In the light of the information so supplied by the
statement the outsiders can decide whether or not to invest in the enterprise and on what terms
funds have to be invested. The funds statement provides an insight into the financial operations
of a business enterprise an insight immensely valuable to the finance manager in analyzing the
past and future expansion plans of the enterprise and the import of these plans an its liquidity.
He can detect imbalances in the issue of funds and undertake remedial actions.
 Useful As Control Device:-
The funds flow statement also serves as a control device in that the
statement compared with the budgeted figures will show to what extent the funds were put to
use according to plan. This enables the finance managers to find out deviation from the planned
course of action and take remedial steps to correct the deviations.
Thus, the funds statement draws the attention of finance manager to

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
problems which call for detailed analysis and immediate action. In view of these funds flow
statement is becoming more popular with management. Even some bank managers make it
obligatory for the borrowers to furnish a funds statement along with their annual balance sheet
now a days many Indian companies are publishing this statement in their annual reports although
they are not obliged to do so under the companies Act.
It Helps In The Analysis of Financial Operations:-
The financial statements reveal the net effect of various

transactions on the operational and financial position of a concern. The balance sheet gives a
static view of the resources or a business and the uses to which these resources have been put at a
certain point of time. But it does not disclose the causes for changes in the assets and liabilities
between two different points of time.
The funds flow statement explains causes for such changes and
also the effect of these changes on the liquidity position of the company. Sometimes a concern
may operate profitably and yet its cost position may become more and worse. The funds flow
statement gives a clear answer to such a situation explains what has happened to the profit of the firm.
 It shows light on many perplexing question of general interest which otherwise may be
difficult to be answered, such as:
1. Why were the net current assets lesser in spite of higher profits and vice- versa?
2. Why more dividends could not be declared in spite of available profits?
3. How was it possible to distribute more dividends than the present earnings?
4. What happened to the net profit? Where did they go?
5. What happened to the proceeds of sale of fixed assets or issue of shares?
Debentures etc.?
6. What are the sources of the repayment of debt?

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
7. How was the increase in working capital financial and how will it be financed in
future?
It helps the formation of a realistic dividend policy, sometimes a firm has sufficient
profits available for distribution as dividend but yet it may not be advisable to distribute
divided for lack of liquid of cash resources. In such cases, a funds flow statement helps
in the formation of a realistic dividend policy.
 It Helps In The Proper Allocation of Resources: -
The resources of a concern are always limited and it wants to

make the best use of these resources managerial decisions. The firm can plan the deployment
of its resources and allocate them among various applications.
 It Acts As A Future Guide: -
A projected funds flow statement also acts as a guide for future to

the management. The management can come to know the various problems it is going to lace
in near future for want of funds. The firm’s future needs of funds can be projected well in
advance and also the timing of these needs. The firm can arrange to finance these needs more
effectively and avoid future problems.
 It Helps In Appraising The Use of Working Capital: -
A funds flow statement helps in explaining how efficiently the

management has used is working capital and also suggests ways to improve working capital
position of the firm.

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
It Helps Knowing The Overall Credit Worthiness of A Firm: -
The financial institutions and banks such as state financial
institutions, industrial Development Corporation, industrial financial corporation of India,

industrial development bank of India etc., all ask for funds flow statement constructed for a
number of years before granting loans to know the credit worthiness and paying capacity of
the firm. Hence a firm seeking financial assistance from these institutions has no alternative
but to prepare funds flow statements.
Limitations of Funds Flow Statement:-
The funds flow statement has a number of uses; however it has

certain limitations also, which are listed below:
It should be remembered that a funds how statement is not a substitute of an income

statement or a balance sheet. It provides only some additional information as regards
changes in working capital. It cannot reveal continuous changes.
It is not an original statement but simply is arrangement of data given in the financial
statements.
It is essentially historic in nature and projected funs flow statement cannot be prepared
with much accuracy.
Changes in cash are more important and relevant for financial management than the
working capital.

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Cash flow statement: a statement of changes in the financial position of firm on cash basis
is called a cash flow statement.
Rules for Funds Flow Analysis:-
The flow of funds occurs when a transaction changes on the one hand a non current account
and on the other current account and vice-versa.
When a change in a non current account e.g., fixed assets, long term liabilities reserves
and surplus fictitious assets etc, is followed by a change in another non- current
account, it does not amount to flow of funds.
This is because of the fact that in such cases neither the working capital increases nor
decreases. Similarly, when a change in one current account results in a change in anther
current account it does not affect funds. Funds move from non current to current
transactions or vice-versa only.
In simple language funds move when a transaction affects (i) a current assets and a
fixed assets or (ii) a fixed and a current liability or (iii) a current asset and a fixed
liability of (iv) a fixed liability and current liability, and funds so not move when the
transaction affects fixed assets and fixed liability or current assets and current liability.
Financial Statements and Funds Flow Statement:-
Financial statement means the profit and loss account and the balance
sheet. All the organizations more particularly, the company from of organizations is required
to present the annual financial statements every year. The financial statements differ with the
funds flow statement in many ways.
A Funds Flow Statement is a statement measuring the inflows the
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Sai Tirumala NVR Engineering College inflows and outflows of net working capital that
result from any type of business activity between two dates. An Income statement in a statement
measuring the inflows and outflows of net assets of revenue nature that result form rendering goods
on services to customers between two dates.
A Funds Flow Statements has become a useful tool in the hands of
financial analyst. That is being caused the financial statements i.e., Income statement measures
the flows restricted to transaction relating to rendering of goods and services to customers. It
is not capable of any accurate information of the resources from operating unless the income
data is converted into funds data. It does not depict the major financial transactions which have
resulted in changes in Balance Sheet.
Comparison between Funds Flow Statement and Cash Flow Statement:-
The term ‘Funds’ has a variety of meanings. In a narrow sense it

means cash and the statement of changes in the financial position prepared on cash basis is
called a cash flow statement. In the most popular sense, the term ‘funds’ refers to working
capital and a statement of changes in the financial position prepared on tills basis is called a
funds flow statement. A cash flow statement is much similar to a funds flow statement as both
are prepared to summaries the causes of changes in the financial position of a business.
However, following are the main differences between funds and a cash flow statement.
Funds flow statement is based on a wider concept of funds I.e., working capital while
cash flow statement is based in the narrower concept of funds, i.e., cash only, which is
only one element of working capital, the other being debtors stock, temporary
investment, bills receivable etc.
Funds flow statement is based on accrual basis of accounting while cash flow
statements are based on cash basis of accounting. In cash flow statement while
calculating operating profits, adjustments for prepaid and outstanding expenses and
income are made to convert the data from accrual basis to cash basis, but no such
adjustments are required to be made while preparing a funds flow statements.

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Funds flow statement does not reveal changes in current assets and current liabilities,
rather these appear separately in a schedule of changes in working capital. No such
schedule of change in working capital is prepared for a cash flow statement and
changes in all assets and liabilities fixed as well as current, are summarized in the cash
flow statement.
Cash flow statement is prepared by taking the opening balance of cash, adding to this
all the inflow of cash and deducting the outflows of cash from the total. The balance,
i.e., opening balance of cash and inflows of cash minus outflows of cash, is reconciled
with closing balance of cash. No such opening or closing balance appears in a funds
flow statement. The net difference between sources and applications of funds does not
represent cash rather it reveals the net increase or decrease in working capital.
Funds flow statement is useful in planning intermediate and long-term financing while
as cash flow statement is more useful for short-term analysis and cash planning of the
business.
Preparation of Funds Flow Statement:-
In order to prepare funds flow statement, it is necessary to find out
the “Sources and Applications” of funds.
Sources of Funds:-
Funds from Operations:-
A fund from operations is the only internal sources of funds. Some

adjustments are to be made in calculating funds from operations to the net profit given in the
financial statement.

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Performa of Calculation of funds forms operations
Particulars Amount Particulars Amount
By Opening Balance of P&L

To Depreciation xxx A/c xxx
To General Reserve Account xxx By Profit on fixed Assets xxx
To Loss on fixed asset xxx
To Provision for Taxation xxx
To Closing Balance of P&L xxx By Funds from operations xxx

A/c
xxx xxx
The following procedure is to be followed in the calculation of funds from operations.
1. Start with the Net Profit given in the profit and loss account.
2. Add the following items to the net profit as they do not result in outflow of funds.
 Depreciation on fixed assets.
 Preliminary expenses or good will etc., written off.
 Contribution to debenture redemption funds, transfer to general reserve etc., if

they have been deducted before arriving at the figure of net profit.

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 Provision for taxation and proposed dividend. These may be taken as

appropriations of profits or current liabilities for the purposes of Funds Flow
Statement. Tax or dividends actually paid are taken as applications to funds.
Similarly interim dividend paid is known as an application of funds. All these
items will be added back to net profit if already deducted, to find funds from
operations.  Loss on sale of fixed assets.
3. Deduct the following items from net profit as they do not increase the funds:
 Profit on sale of fixed assets, since the full sale proceeds are taken as a separate
source of funds and conclusion here will result in duplication.  Profit on
revaluation of fixed assets.
 Non-operating incomes such as dividend received or accrued rent. These items

increase funds but they are not operating incomes. They will be shown under
separate heads as “sources” of funds” in the Funds Flow Statement. In case the
profit and loss account shows net loss this should be
taken as an items which decrease the finds.
Statement of Changes in Working Capital:-
The increase or decrease in working capital can be calculated by

preparing the schedule of changes in working capital.
Working capital represents the excess of current assets over current

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liabilities. Several items of all current assets and current liabilities are the components of
working capital. In order to ascertain the working capital at the beginning and at the end of the
period and to measure the increase or decrease therein it is necessary to prepare a statement or
schedule of changes in working capital
Schedule of Changes in Working Capital of the Company for the Year Ended
Particulars Previous Current Effect on working capital

Year(Rs.) Year(Rs.)
Increase (Rs.) Decrease(Rs.)
(A) Current Assets:-
XXX XXX
Stock
XXX XXX
Debtors
XXX XXX
Cash – Bank
XXX XXX
Bills receivable
XXX XXX
Prepaid expenses Total
(A) XXX XXX
(B) Current liabilities:- XXX

Creditors XXX XXX
Bills payable XXX XXX
Outstanding expenses XXX
Total (B)
Working changes:(A-B) XXX XXX

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XXX XXX
Increase/decrease in
Working capital
XXX
Total
XXXX XXXX XXXX XXXX
While preparing a schedule of changes in working capital it should be noted that.
1. An increase in current assets increases working capital;
A decrease in current assets decrease working capital;
An increase in current liabilities decreases working capital;
A decrease in current liabilities increase working capital;
Increases in current asset and increase in current liabilities does not affect working capital.
A decrease in fixed assets and fixed liabilities affects working capital.
2. The changes in all currents assets and current liabilities are merged into one figure
only either an increase or decrease in working capital over the period for which
funds statements has been prepared. If the working capital at the end of the
difference expressed as ‘increase in working capital’. On the other hand, if the
working capital at the end of the period is less than that at the commencement, the
difference is called decrease in working capital.

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Current Assets:-
The expression ‘current assets’ denotes those assets which are

continually on the move since they are constantly in motion, they are also known as the
circulating capital of the business. These assets can or will be converted into cash during a
complete operating cycle of the business. Current assets include;
stock-in-trade or inventories
debtors payments in advance or
prepaid expenses
stores
Bills receivables
Cash at bank
Cash in hand
Work in progress
Current Liabilities:-
Current liabilities are those liabilities which are to be paid in the near future, i.e., during a
complete operating cycle of the business. Such liabilities include;
Trade creditors
Accrued or outstanding expenses.
Bills payable.
Income tax payable
Dividends declared;

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Bank overdraft
Note:-
Some experts are of the opinion that as bank over draft has a
tendency to become more or less a permanent source of financing and hence it need not be
included among current liabilities.
Statement of Sources and Application of Funds:-
 Funds From Operation:-
It is an internal source of funds. Funds from operations are to be

calculated as per the method stated above.
 Funds From Long Term Loans:-
Long term loans such of debentures, borrowing from financial

institutions will increase the working capital and therefore, there will be inflow of funds.
However, if the debentures have been issued in consideration of some fixed assets, there
will be no inflow of funds.
 Sale Of Fixed Assets:-
Sale of land, buildings, and long-term investments will result in

generation of funds.

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 Funds From Increase In Share Capital:-
Issue of shares for cash or for any other current asset or in discharge
of current liability is another source of funds. However, shares allotted in consideration of
some fixed assets will not result in funds. However, it is recommended that such purchase
of fixed assets as well as issue of securities to pay for them be revealed in funds flow
statement.
 Decrease In Working Capital:-
Decrease in working capital is the result of decrease in current asset

or increase in current liabilities. In both the cases inflow of funds takes place. Suppose
stock, a current asset reduce from Rs.15,000 to Rs.12,000 the decrease of Rs.3,000 is
assumed to be due to the disposal of stock which undoubtedly brings funds into the
business. In the fame way, increase in current liabilities means lesser payment, so retaining
funds is also a source.
Performa of Funds flow Statements
Particulars Amount (Rs.)

Sources Of Funds:-
XXX
Issue of shares
XXX
Issue of debentures
XXX
Long term borrowings
XXX
Sale of fixed assets
* Decrease in working capital Total sources XXX
XXX

MBA Programme
Application Of Funds:- Redemption of

redeemable Preference shares XXX
Redemption of debentures XXX
Purchase of fixed assets XXX
Payment of other long term loans XXX
Payment of dividends, taxes, etc XXX
*Increase In Working Capital Total uses Note: XXX
* only one will be there. XXX
XXX
Treatment of Adjustments:-
Some times the factors affecting the funds from operations may not be
given in the problems directly and there may be some hidden information. As such, some of
the transactions have to digger out using the additional information provided as adjustments
to the balance sheet. These items include: a) provision for tax (b) proposed dividends (c) sale
purchase of fixed assets.
 Provision For Tax:-
It is current liability while preparing a funds flow statement, these
are two options available.

• Provision for tax may be taken as a current liability in such a case, when provision
for tax is made the transaction involves profit and loss appropriation account
which is a fixed liability and provision for tax account which is a current liability.

MBA Programme
It will thus decrease the working capital. On payment of tax these will be no
change in working capital because it will in-values one current liability (i.e.,
provision for tax) and the other a current assets (i.e., bank or cash balance).
• Provision for tax may be taken only as an appropriation of profit. It means that,
there will now change in working capital position when provision for tax is made
since it will involve two fixed liabilities, i.e., profit and loss appropriation account
and provision for tax account. However, when tax is paid, it will be taken as
application of funds, because it will when involve
‘Provision for tax account’ which has been taken as a fixed liability and ‘bank’ which
is current assets.
 Proposed dividends:-
Whatever has been said about the “provision for tax is also applicable
to “proposed dividends”. Proposed dividends can also be dealt with in two ways;
• Proposed dividends may be taken current liability since declaration of dividends

by the share holders is simply a formality. Once the dividends are declared in
the general meeting, they will have to be paid within 42 days of theirs
declaration. In case proposed dividends is taken as a current liability it, will
appear as one of the items decreasing working capital in the schedule of changes
in working capital. It will not be shown as an application of funds when
dividend is paid later on.
• Proposed dividends may simply be taken as an appropriation of profits. In such

a case proposed dividend for the current year will be added back to current
year’s profit in order to find out funds from operations if such amount of
dividend has already been charged to profits. Payment of dividend will be
shown an “application of funds”.

MBA Programme
 Sale Or Purchase Of Fixed Assets:-
For arriving at the final figure we have to prepare the asset

account, depreciation account, assets sold as purchased account. This can be illustrated well with
the following extracts of the balance sheet.
• Asset Account (Plant And Machinery Account):-
This is maintained at the cost price. The accounts is debited with the
cost of the machinery as at the beginning of the year (i.e., balance in the machinery
account at the beginning) and with purchases during the year. It is credited with the
cost price of the machinery sold and with cost of the machinery as at the close of the
year (i.e., balance in the machinery account at the end). In the problems either the total
value of purchases during the year may be missing or the cost of the machinery sold
may be missing. The missing figure can be found out by feeding the account with the
available information and balancing it.
• Depreciation Account:-
Depreciation is not source of funds. Source of funds is constituted

by those transactions, where one account belongs to current category and the other is
longs to non-current category. In case of depreciation both items belong to non-current
category, as such it does not make any change in the funds and is not a source of funds.
In support of the answer journal entry regarding depreciation is presented herewith.
Profit and loss account is a non-current liability and fixed assets are
non-current asset. As both of them belong to non-current category, so depreciation is not a
source of funds.

MBA Programme
• Asset Sold Account:-
The purpose of preparing this account is to ascertain the profit or

loss made on sale of the asset. The account is debited with the cost of the assets sold
(transferred from the asset account). It is credited with the accumulated depreciation on the
asset sold (transferred from depreciation account). It is also credited with the money received
on sale of the machinery. The difference between the two sides would be profit (if credit
balance or loss (if debit balance).

MBA Programme
CHAPTER -4 DATA ANALYSIS AND INTERPRETATION

DATA ANALYSIS AND INTERPRETATION Balance
Sheet:-
Balance sheet is the most significant financial statement. It indicates the
financial condition or the state of affairs of a business at a particular moment of time. More
specifically, ‘balance sheet contains information about resources and obligations of a business
entity and about its owners’ interests’ in the business at a particular pint of time.
Thus, the balance sheet of a firm prepared on March 31, 2021 reveals the firm’s financial position
on this specific date. In the language of accounting, balance sheet communicates information about
assets, liabilities and owner’s equity for a business firm as on a specific date.
It provides a snapshot of the financial position of the firm at the close of the firm’s accounting
period.

MBA Programme
Balance sheet of Liners India Limited As on
Table
31-03-2016
4.1
Sch.no As on 31-03-2016
I.SOURCE OF FUNDS:-
1) Share holders fund 1 23050000.00
2)Reserves and surplus 48579189.00
3)Secured loans 2 183326618.00
4)Un-secured loans 3 0.00
254955807.00
II. APPLICATION OF FUNDS:- 4
1)Fixed assets:-
148467660.00
Gross block 60839408.00
Less: deprecation 87628252.00
43751833.00
Capital work-in-progress 131380085.00
2610000.00
5
109075147.00
2)Investments
3)Current Assets:- 6358113.00
Inventory 6 4321650.00
Sundry debtors 7 26367433.00
Deposits 8 25367449.00

MBA Programme
Table
Cash and bank balances 9 174104792.00
Loans, advances and prepaid expenses 10
43492221.00
Less: current liabilities and provisions: 7087149.00
Current liabilities
Provisions for expenses 11 50579370.00
12
123525422.00
55300.00
NET CURRENT ASSETS
4) Misc.Expencess to the extent not written off 123580722.00
31-03-2017
4.2
Sch.no As on 31-03-2017
I.SOURCE OF FUNDS:-
1) Share holders fund 1 23050000.00
2)Reserves and surplus 64515839.95
3)Secured loans 2 104256408.06
4)Un-secured loans 3 80543944.00
272366192.01
Page 68
MBA Programme
Table
II. APPLICATION OF FUNDS:-
1)Fixed assets:- 4 243455584.83

Gross block 90598828.16
Less: deprecation 152856756.67

9453137.30
Capital work-in-progress 162309893.97

2610000.00
2)Investments 5
100760856.00
3)Current Assets:- 6844432.02
Inventory 6 7347643.00
Sundry debtors 7 38838401.96
Deposits 8 22284157.78
Cash and bank balances 9 178685491.00
60299284.76
8349907.96
Less: current liabilities and provisions: 11

12 68649192.72
Current liabilities
Provisions for expenses 110036298.00
20000.00
NET CURRENT ASSETS 110056298.00
4) Misc.Expencess to the extent not written off

MBA Programme
Table
31-03-2018
4.3
Sch.no As on 31-03-2018
I.SOURCE OF FUNDS:-
1) Share holders fund 1 82032382
2)Reserves and surplus 121127284
586707261
3 440627226
174915289
265711937
9400258
275112195
Page 70
MBA Programme
Table
3)Secured loans 2 383547595
1)Fixed assets:-
Gross block
Less: deprecation
Capital work-in-progress 3330520
2)Investments 4 0
Differed tax asset 258935801

3)Current Assets:- 23666599
Inventory 6990208
Sundry debtors 5 144273003
Deposits 6 48086695
Cash and bank balances 7 485282826
9
153837804
19897427
Less: current liabilities and provisions: (A)
Current liabilities

MBA Programme
Table
Provisions for expenses 173735231
10
11
311547595
47471
(B)
NET CURRENT ASSETS (A)-(B)
311595066
Page 72
on
Balance
Table
Sheet of Liners India Limited as 31-03-2019
4.4
Sch.no As on 31-03-2019
I.SOURCE OF FUNDS:-
638995492
1)Fixed assets:- 3
554283910
Gross block 227590571
326693339
Less: deprecation 15147071
341840410
Capital work-in-progress
3330520
4 34333
2)Investments
271428799
Inventory 5 129569540

MBA Programme
on

Deposits 7 502596828
Cash and bank balances 8
(A)
187019585
Less: current liabilities and provisions: 18442538
Current liabilities
10 205462123
MBA Programme
Balance
Table
Provisions for expenses 11 297134705
20376
NET CURRENT ASSETS (A)-(B) 297155441

(B)
sheet of Liners India Limited As 31-03-2020

4.5
Sch.no As on 31-03-2020
I.SOURCE OF FUNDS:-

on

882906282
II. APPLICATION OF FUNDS:- 3
1)Fixed assets:-
739924697
Less: deprecation 439017856

62161069
Capital work-in-progress 501178925

3730520
2)Investments 4 107579

Inventory 9927806
Deposits 6 95244304

MBA Programme
on
Balance
Table
194101605
25341237
Current liabilities
11
381711055
16301
NET CURRENT ASSETS (A)-(B)
4) Misc.Expencess to the extent not written off (B) 381727356
sheet of Liners India Limited As 31-03-2021

4.6
Sch.no As on 31-03-2021
I.SOURCE OF FUNDS:-
1724916337

on
1)Fixed assets:- 3 1051402312

Less: deprecation
642857962
149922643
Capital work-in-progress
792780605
3730520
2)Investments 4 107579

Inventory 11240757
MBA Programme
Balance
Table
Deposits 6 325165903
259812204
34391806
Current liabilities

MBA Programme
on
11 932123505
12226
NET CURRENT ASSETS (A)-(B) (B)
4) Misc.Expencess to the extent not written off 932111279

MBA Programme
Schedule of Changes in Working Capital for the Year 2016-17
Table 4.13
Particulars Previous Current year Working Capital

year 2015- 2016-17
16 Increase Decrease
A) Current assets:
1) Inventories 109075147 100760856
8314291
2) Sundry Debtors 6358113 6844432.02 486319.02
3) Cash & Bank balance 26367433 38838401.96 12470968.96
4) Deposits 4321650 7347643 3025993
5) Loans, Advances and 25367449 22284157.78 3083291.22

prepaid expenditures
Total Current Assets 171489792 176075490.80
B) Current Liabilities:
1) Current Liabilities
43492221 60299284.76 16807063.76
2) Provisions for
expenses 7087149 8349907.96 1262758.96
Total Current
Liabilities 50579370 68649192.72

MBA Programme
Net working capital (A-B) 120910422
107426298.10
13484123.90
Decrease in working
capital
120910422 120910422
Total
Adjusted Profit & Loss Account for the Year 2016-17
Table 4.14
Dr Cr
Particulars Amount Amount

Particulars
To Depreciation A/c 90598828.16
By Opening Balance of
Reserves and 48579189
surplus A/c
To Closing Balance of By Funds from
Reserves and surplus operations 106535479.11
A/c 64515839.95
15511466.11 15511466.11
Funds Flow Statement for the Year 2016-17

MBA Programme
Table 4.15
Sources Amount Applications Amount
Raising unsecured 80543944 79070209.94

loans
Payment on secured loans
Funds from
operations 106535479.11 20885171.80
Decrease in working in
progress
Decrease in Purchase of fixed assets 976847492.60
deferred tax assets 876204027.33
Expenditure written 35300.00

off
Decrease in
working capital 13484123.90
1076802874.34 1076802874.34
Interpretation:-
 It is observed from table 4.13 that the decrease in working capital 13484123.90/- in the year
2016-17.

MBA Programme
 The current assets of the company are increased comparing with previous year results.
 The current liabilities of the company are increased comparing the previous results.
 It is observed that from the table 4.14 the company gains funds from the operation to an extent
of 106535479.11/-
 It is observed that from the table 4.14 the company deprecation is 90598828.16/-.
 It is observed that from the 4.14 the company closing balanced of reserves and surplus is
64515839.95/-

MBA Programme
Table 4.16

year 2016-17 2017-18
Increase Decrease
A) Current assets:
1) Inventories 100760856.00 258935801.00
158174945.00
2) Sundry Debtors 6844432.02 23666599.00 16822166.98
3) Cash & Bank balance 38838401.96 144273003.00 105434601.00
4) Deposits 7347643.00 6990208.00 357435.00
5) Loans, Advances and 22284157.78 48086695.00 25802537.22

Total Current Assets 176075490.80 481952306.00
1) Current Liabilities 60299284.76 153837804.00 44461480.76
2) Provisions for
expenses 8349907.96 19897427.00 11547519.04
Total Current
Liabilities 68649192.72 173735231.00
Net working capital (A-B) 107426298.10
308217075.00
200790776.90

MBA Programme
Decrease in working
capital
107426298.10 107426298.10
Total
Adjusted Profit & Loss Account for the Year 2017-18 Dr Cr
Table 4.17
To Depreciation A/c 174915289.00 By Opening Balance of 64515839.95

Reserves and
surplus A/c
Reserves and surplus 121127284.00 231526733.10
A/c operations
296042573.00 296042573.00

Table 4.18
Payment on un secured
Raising in secured 279291187.00 loans 80543944.00
loans
Funds from 231526733.10

operations
Raising of Share Purchase of fixed
holders fund 58982382.00 assets 197171641.20

MBA Programme
200790776.90
Decrease in Decrease in 5061070557.20
working capital investments
Increase in 4568195063.40
miscellaneous
expenses written
off
5338786142.40 5338786142.40
Interpretation:-
 It is observed from table 4.16 that the decrease in working capital 200790776.90/- in the year
2017-18.
of 231526733.10/-

MBA Programme
 It is observed that from the table 4.17 the company closing balanced of reserves and surplus is
121127284.00/-
Table 4.19
Particulars Current year Working Capital
Previous 2018-19 Increase Decrease

year 2017-18
A) Current assets:
1) Inventories 258935801.00 271428799.00
12492998.00
2) Sundry Debtors 23666599.00 18113070.00 5553529.00
3) Cash & Bank balance 144273003 129569540.00 70880101.00
4) Deposits 6990208.00 7787309.00 14703463.00

2) Provisions for 19897427.00 18442538.00 1454889.00

expenses
Total Current 173735231.00 205462123.00

MBA Programme
Liabilities
308217075.00 293769852.00
Net working capital (A-B)
396477023.00 14447223.00
Increase in working
capital
308217075.00 308217075.00
Total
Table 4.20
Dr Cr

Reserves and
surplus A/c
Reserves and surplus 220125849.00
A/c operations 326589136.00
447716420.00 447716420.00
Table 4.21
Payment on secured 46699761.00

Funds from loans
operations 326589136.00

MBA Programme
Raising Share
holders fund 10573.00 Deferred tax assets 34333.00
Increase in working 5746813.00 113656684.00
in progress Purchase of fixed assets
Increase in 224521279.00 Increase in working 396477023.00

investments capital
556867801.00 556867801.00
Interpretation:-
 It is observed from table 4.19 that the increase in working capital 396477023.00/- in the year
2018-19.
 It is observed that from the table 4.20 that the company gains funds from the operation to an
extent of 326589136.00/-
 It is observed that from the table 4.20 the company closing balance of reserves and
surplus is 220125849.00/-
Table 4.22

MBA Programme

year 2018-19 2019-20
Increase Decrease
A) Current assets:
271428799.00 309192143.00 37763344.00
1) Inventories
2) Sundry Debtors 18113070.00 16504157.00 1608913.00
4) Deposits 7787309.00 9927806.00 2140497.00
72333257.00 95244304.00 22911047.00

5) Loans, Advances and
7082020.00
1) Current Liabilities
187019585.00 194101605.00
2) Provisions for
expenses 18442538.00 25341237.00 6898699.00
Total Current
Liabilities 205462123.00 219442842.00

MBA Programme
Net working capital (A-B) 377872956.00
293769852.00
84103104.00
Increase in working
capital
377872956.00 377872956.00
Total

MBA Programme
Table 4.23
Dr Cr

Reserves and
surplus A/c
To Closing Balance of
Reserves and surplus 352852415.00 By Funds from
A/c operations 433633407.00
653759256.00 653759256.00
Table 4.24
111184224.00
Raising secured Differed tax assets 73246.00
loans increase
Funds from 433633407.00 Payment of unsecured 208357808

operations loans
Increase in working 299297471.00

47013998.00 Purchase of fixed assets
in progress
Page 91
MBA Programme
Increase in working
capital 84103104.00
591831629.00 591831629.00
Interpretation:-
2019-20.
 The current liabilities of the company are increased when compared with the previous year
results.
433633407.00/-

MBA Programme
 It is observed that from the table 4.23 the company closing balanced of reserves and surplus is
352852415.00/-
Table 4.25

year 2019-20
2020-21 Increase Decrease
A) Current assets:
1) Inventories 309192143.00 630516341.00
321324198
2) Sundry Debtors 16504157.00 19477152.00 2972995.00
4) Deposits 9927806.00 11240757.00 1312951.00

prepaid expenditures 0
2) Provisions for
expenses 25341237.00 34391806.00

MBA Programme
Total Current 9050569.00
219442842.00 294204010.00
Liabilities
Net working capital (A-B)
377872956.00 928285406.00
Increase in working 550412450.00

capital
Total 928285406.00 928285406.00
Table 4.26

MBA Programme
Dr Cr

Reserves and
surplus A/c
To Closing Balance of 1076019599.00
Reserves and surplus 377469702.00
A/c By Funds from
operations
1428872014.00
1428872014.00
Table 4.27
Raising in secured 677823768.00

loans
Funds from 1076019599.00

operations
213388620.00
Raising Share Payment of loans 1193103496.00
holders fund
MBA Programme

Increase in working
in progress 87761574.00 Purchase of fixed assets 311477615.00
550412450.00
Increase in working
capital
2054993561.00 2054993561.00
Interpretation:-
2020-21.
 The current liabilities of the company are increased when compared with the previous year
results.
 It is observed that from the table 4.26 the company gains funds from the operation to an
extent 1076019599.00/-
 It is observed that from the table 4.26 the company deprecation is 1051402312.0

MBA Programme
 It is observed that from the table 4.26 the company closing balance of reserves and surplus
is 377469702.00/-
 It is observed that from the table 4.27 the company increase in working capital increased to
550412450.00/-
CHAPTER -5
FINDINGS, SUGGESTIONS
&
CONCLUSION
MBA Programme
FINDINGS
 It has been observed the share capital of company is not increasing from 2017-2021.
 The company is having good reserves and surplus position. These are increasing year to year
from 2017-2021.
 The company is taking loans from other sources like banks, financial institutes etc. it is
observed from 2017-2021.

MBA Programme
 It has been observed that the company is investing more on fixed assets from 2017-
2021.
 It has been observed that the company is raising funds from secured and unsecured
loans, sale of fixed assets and funds from operations and it is spending to purchase fixed
asset, redemption of loans and other payments.
 It has been observed that the company made investments in 2016-17 only. Afterwards
till there are no new investments have been made till 2020-21.
 The total increase in current assets of the company has overcome the total increase in
current liabilities from 2017-2021.
 It has been observed that the net working capital was decrease in the year 2016-17
(13484123.90) and the company’s funds from operations is not satisfactory.
 It has been observed that the net working capital was decrease in the year 2017-18
(200790776.90) and the company’s funds from operations are not satisfactory. So, the
company has to increase funds from operations.
SUGGESTIONS
 It has been observed that the share capital of the company is not increasing from 2012
to 2013. This is obstructing the growth of the company. Hence I suggest the company
to increase the share capital.
 It has been observed that the company’s contribution to the fixed assets is gradually
decreasing through out the study. This would be a problem for the company procuring
funds. Hence I suggest the company to focus on this and increase the allocation for
fixed assets.

MBA Programme
 It has been observed that the company has made investments only in 2012. Afterwards
there are no investments at all though all these years. This may affect the reputation of
the company in the public. Hence I advise the company to increase investments and
improve its image.
 It has been observed that the increase in current assets of the company is less than
current liabilities in 2016-17. This shows that the company has less liquidity capacity.
Hence I suggest the company to maintain the current ratio to 2:1 by increasing current
assets or by reducing current liabilities.
 The company is getting favorable funds from operations in all years of the study. This
is due to the excellence in operations. This is a good trend and it should be carefully
maintained.
 It is suggested that the position of the working capital in 2016-17 has decreased. This
will have effect on sources of funds of the company. Hence I advice the company
improve the position of current assets than current liabilities and control the decrease
in working capital.
 It is advised that the position of the working capital in 2017-18 has decreased. This will
have on effect on sources of funds of the company. Hence I advice the company
improve the position of current assets than current liabilities and control the decrease
in working capital.
CONCLUSION
The economic life of any organization depends on some important financial aspects
like profits, expenses. A careful analysis of these areas is very much essential for the success
and survival of these organizations. For this purpose financial statement analysis with the help

MBA Programme
of the technique like ratios, funds flow etc. is to be carried out. A study of this type is very
much useful for many organizations to keep into the different financial aspects and to take
some measures to improve in the above areas.
The company under the study of Liners India Limited, being a unit of the automobile
industry as to carefully watch the trends in the automobile industry as should come forward
with innovative marketing strategies.

MBA Programme
BIBLIOGRAPHY BIBLIOGRAPHY
 I.M.Pandey, Financial Management, Vikas Publishing House, 2003.
 M.Y. Khan and P.K.Jain, Financial Management: Text and Problems, Tata
Mc Graw Hill Publishing Co, 2003.
 S.N.Maheswari, Financial Management, Vikas Publishers, New Delhi, 2003.
 V.K.Bhalla, Financial Management and Policy, Anmol publications Pvt. Ltd.,

New Delhi.
 James C. Van Horne, Financial Management and Policy, Pearson Education,
2004.
 Jean, W.H, Capital Budgeting, International Book Company, Scranton, 1969.
WEBSITES:-
• www.linersindia.com
• www.wekipedia.com
• www.scribd.com
• www.slideshare.com
• wwww.ibef.org

18 %
SIMILARITY INDEX 6% 0% 10% INTERNET SOURCES

PUBLICATIONS STUDENT PAPERS
PRIMARY SOURCES
1 Submitted to Sogang University

Student Paper
<2%
2 Submitted to Institute of Aeronautical
Engineering (IARE)
Student Paper < 1%
3 Submitted to BLDE University

Student Paper
<1%
4 Submitted to Amity University
Student Paper <2%
5 www.slideshare.net
Internet Source <1%
6 dokumen.pub
Internet Source
<2%
www.coursehero.com
7
Internet Source
<1%
8 progressmoney.blogspot.com <1%
Internet Source
9 Submitted to Gulf College Oman <1 %

Student Paper
<1 %
srividyaengg.ac.in
Internet Source
<2 %
www.scribd.com
Internet Source
Submitted to University of Petroleum

and Energy Studies
Student Paper <1 %
13 Submitted to Al Khawarizmi International
College <1 %
Student Paper
14
Submitted to Al-Zahra College for Women <1 %
Student Paper
15 Submitted to Sharda University <2 %

Student Paper
16 Submitted to Higher Education Commission
 Conclusion
Bibliography 91-92

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A STUDY ON

FUNDS FLOW STATEMENTS

LINERS INDIA PVT.LTD, VIJAYAWADA

MASTER OF BUSINESS ADMINISTRATION

Mr. G.VENKATA RAO

DEPARTMENT OF MANAGEMENT STUDIES SAI

DEPARTMENT OF MANAGEMENT STUDIES

This is to certify that the project report entitled “A STUDY ON FUNDS

Project Guide Head of the Department

We wish him all success in his future endeavour’s

For Liners india Limited

PLACE :Narasaraopet DATE

I express my deep sense of gratitude to Dr.NALABOTU

My sincere thanks to Dr.B.V.RAMA MOHANA RAO, B.Tech(ECE).,

I take much pleasure to express my deep sense of gratitude and thankfulness to

I would like to extent my sincere thanks to General Manager in LINERS

CHAPTER -1 INTRODUCTION INTRODUCTION

An analysis of financial statement is important aid to financial analysis. The focus of

Sai Tirumala NVR Engineering College Page 2

“A statement prospective or retrospective, setting out the sources and applications of

OBJECTIVES OF THE STUDY

To present a theoretical framework relating to funds flow analysis.

 To evaluate the liquidity position of Liners India Limited

 To understand the operating efficiency of Liners India Limited.

 To determine the financial status of the company and analyze them.

 To know the short term servicing ability of the company.

Sai Tirumala NVR Engineering College Page 5

SCOPE OF THE STUDY

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Methodology is a systematic process of collecting information in order

Diagrammatic Representation of Research Methodology

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The collection of data is two principle sources. They are discussed as

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Further data needed for the study was collected from:-

Collection of required data from annual records of the company.

LIMITATIONS OF THE STUDY

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CHAPTER -2 INDUSTRY PROFILE

COMPANY PROFILE INDUSTRY PROFILE

The Indian automotive industry has witnessed an extraordinary boom in recent

On the picture of the Indian economy, auto industry occupies a prominent

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Domestic Market Share for 2019-20

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Automobile Industry was de licensed in July 1991 with the announcement of

At present 100% Foreign Direct Investment (FDI) is permissible under

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4. India is the world’s second largest manufacturer of two wheelers.

5. India is fifth largest manufacturer of commercial vehicles.

The Indian auto components industry has an estimated production of

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The Auto Component industry is today considered as the sunrise industry

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Indian Auto Components Production Turnover

Today, the auto-component industry has emerged as a highly competitive

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Auto Component exports grow by 31 percent to USD 6.9 billion in 2020-21

It supports industries like automobiles, machine tools, steel, aluminum,