Made By:

Sagar Phul Shruti Kashyap Deepshikha Yadav Lincy Kurian Tingle Thomas

FUND FLOW STATEMENT

A Fund Flow Statement is a statement which shows the inflow and outflow of funds between two dates of a balance sheet. So, it is known as the statement of changes in financial position. Balance sheet shows the financial position and inflow and outflow of funds that affect it. In company level business, it is very necessary to prepare fund flow statement to know what the sources are and what are the applications of funds between two dates of balance sheet. Generally, it is prepared after getting two years balance sheet.

OBJECTIVES OF FUNDS FLOW STATEMENT

An

analysis of the flow of liquid funds can be very useful in making decisions concerning liquidity. full understanding of a businesss affairs requires the identification of the changes or movements in the assets, liabilities and capital for the year, and the resultant effect on the liquid resources. A profit and loss account and balance sheet does not specifically disclose this information.

 To

show the manner in which the operations have been financed, and how the financial resources have been used. They provide useful guide to creditors & lenders. Various ways to improve the networking capital position can be decided. If focuses attention on resources available for capital investment. It is useful in deciding how fixed assets should be financed. It is useful in planning the retirement of debt.

 An Income Statement Is A Companys Financial Statement That Indicates How The Revenue Is Transformed Into The Net Income

 Helps The Investors & Creditors Determine The Past As Well As Future Financial Performance Of An Enterprise Displays The Revenues Recognized For A Specific Period & The Cost/Expenses Charged Against These Revenues

Relevant Items That Cannot Be Reliably Measured Are Not Reported Example: Brand Equity & Loyalty Some Numbers Depend On Judgement & Estimates Example: Depreciation Expenses (which depends on estimated useful life)

FUNDS FLOW STATEMENT

INCOME STATEMENT

Deals With Financial Resources Required For Running Business Activities A Funds Flow Statement Matches The Funds Raised & Funds Applied During A Particular Period

Discloses The Results Of The Business Activities

It Matches The Incomes Of A Period With The Expenditure Of That Period

SOURCES AND APPLICATIONS OF FUNDS

It is necessary to find the sources and applications of finance for preparing a funds flow statement.

SOURCES OF FINANCE:Can be both internal and external sources.

Funds from operations is the only internal source of finance. However certain adjustments are required in the figure of net profit for finding out the real funds from operations.

ADD THE FOLLOWING ITEMS AS THEY DONT RESULT IN

OUTFLOW OF FUNDS.

1. DEPRECIATION ON FIXED ASSETS. 2. PRELIMINARY EXPENSES ON GOODWILL, ETC. WRITTEN OFF. 3. CONTRIBUTION TO DEBENTURE REDEMPTION FUND,
TRANSFER TO GENERAL RESERVE, ETC. IF ALREADY DEDUCTED

BEFORE ARRIVING AT THE FIGURE OF NET PROFIT.

4. PROVISION FOR TAXATION AND PROPOSED DIVIDEND. BUT

TAX OR DIVIDENDS ACTUALLY PAID AND INTERIM DIVIDEND PAID ARE TAKEN AS APPLICATION OF FUNDS.

5. LOSS ON SALE OF FIXED ASSETS.

DEDUCT THE FOLLOWING ITEMS AS THEY DO NOT INCREASE FUNDS1. PROFIT ON SALE OF FIXED ASSETS SINCE THE FULL SALE
PROCEEDS ARE TAKEN AS A SEPARATE SOURCE OF FUNDS AND INCLUSION HERE WILL RESULT IN DUPLICATION.

2. PROFIT ON REVALUATION OF FIXED ASSETS. 3. NON OPERATING INCOMES SUCH AS DIVIDENDS RECEIVED OR ACCRUED DIVIDEND, REFUND OF INCOME TAX, RENT RECEIVED OR ACCRUED RENT. THOUGH THEY INCREASE FUNDS, THEY ARE NON OPERATING INCOMES, SO WILL BE SHOWN UNDER SEPARATE HEADS AS SOURCES OF FUNDS IN THE FFS.

1. FUNDS FROM LONG TERM LOANS. ..SUCH AS DEBENTURES, BORROWINGS FROM FINANCIAL
INSTITUTIONS INCREASE THE WORKING CAPITAL AND THEREFORE, THERE WILL BE FLOW OF FUNDS UNLESS THE DEBENTURES HAVE BEEN ISSUED IN CONSIDERATION OF SOME FIXED ASSETS.

2. SALE OF FIXED ASSETS. SALE OF LAND, BUILDINGS, LONG TERM INVESTMENTS WILL RESULT IN GENERATION OF FUNDS. 3.FUNDS FROM INCREASE IN SHARE CAPITAL. ISSUE OF SHARES FOR CASH OR FOR ANY OTHER CURRENT ASSET RESULTS IN INCREASE IN WORKING CAPITAL.

THE USES TO WHICH FUNDS ARE PUT ARE CALLED APPLICATIONS OF FUNDS. 1. PURCHASE OF FIXED ASSETS. 2. PAYMENT OF DIVIDENDS. 3. PAYMENT OF FIXED LIABILITIES. 4. PAYMENT OF TAX LIABILITY.

STATEMENT OF CHANGES IN FINANCIAL POSITION

Extension of Funds Flow Statement. Gives detailed as well as accurate information about the changes in the financial position of the company as compared to the changes in financial positions as shown by the traditional fund flow statement.

DEFINITIONS

A statement disclosing changes in the firms total financial resources. A statement which summarises for the period the resources are made available to finance the activities of an enterprise and the uses to which such resources have been put.

THE STATEMENT OF CHANGES IN FINANCIAL POSITION MAY INVOLVE :

Changes in the firms cash position. Changes in the firms working capital position. Changes in the firms total financial resources position.

IMPORTANCE
The information provided can be compared with the cash budget to assist in the prediction of future cash flow. The quality of income can be better assessed because estimates are not included in the SCFP and it is easier to see what was received and what was spent. The possibility of expanding or reducing operating capacity can be addressed by analyzing the funds provided by operations. The financial flexibility and liquidity of the company can be analyzed.

FORMAT OF FUNDS FLOW STATEMENT

SOURCES
Funds from operations Issue of share capital Issue of debentures Long-term loans Sale of fixed assets Dividend received Non-trading income **Decrease in working capital (balancing figure)

APPLICATIONS
Loss from applications Redemption of preference shares Redemption of debentures Repayment of long-term loans Dividend paid Purchase of fixed assets Payment of dividend/tax *Increase in working capital (balancing figure)

ISSUE OF SHARES

SALE OF FIXED ASSETS

LONG TERM BORROWINGS

OPERATIONAL PROFIT

FUNDS
REDEMPTION OF PREF. SHARES PURCHASE OF FIXED ASSETS PAYMENT OF LONG TERM LOANS OPERATION AL LOSS PAYMENT OF TAX/ DIVIDEND

CASE STUDY
ON

TATA MOTORS

About the company.

Tata Motors Limited is Indias largest automobile company, with consolidated revenues of Rs.1,23,133 crores (USD 27 billion) in 201011. It is the leader in commercial vehicles in each segment, and among the top three in passenger vehicles with winning products in the compact, midsize car and utility vehicle segments. The Company is

the world's fourth largest truck manufacturer, and the world's third
largest bus manufacturer.

The Company's over 25,000 employees are guided by the vision to

be "best in the manner in which we operate, best in the products we deliver, and best in our value system and ethics."

Some Achievements
In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which India and the world have been looking forward to. The Tata Nano has been subsequently launched, as planned, in India in March 2009. A development, which signifies a first for the global automobile industry, the Nano brings the

comfort and safety of a car within the reach of thousands of families.

In May 2009, Tata Motors ushered in a new era in the Indian automobile industry, in keeping with its pioneering tradition, by unveiling its new range of world standard trucks called Prima. In their power, speed, carrying capacity, operating economy and trims, they will introduce new benchmarks in India and match the best in the world in performance at a lower life-cycle cost.

And More
Tata Motors is equally focused on environment-friendly technologies in emissions and alternative fuels. It has developed electric and hybrid vehicles both for personal and public transportation. Tata Motors is committed to improving the quality of life of communities by working on four thrust areas employability, education, health and environment. The activities touch the lives of more than a million citizens. The

Company's support on education and employability is focused on youth and

women. In health, our intervention is in both preventive and curative healthcare. The goal of environment protection is achieved through tree plantation, conserving water and creating new water bodies and, last but not the least, by introducing appropriate technologies in our vehicles and operations for constantly enhancing environment care. With the foundation of its rich heritage, Tata Motors today is etching a refulgent

future.

FUNDS FLOW STATEMENT of Tata Motors

For the year ending 31st March,2011 SOURCES OF FUNDS 1. Funds generated from operations A. Profit after tax B. Depreciation (including Lease Equalization) C. Provision / (Reversal) for diminution in value of investments (net) D. Net deferred tax charge E. Credit for Dividend Distribution Tax of Subsidiary Companies F. Exchange gain (net) on Long term Foreign currency monetary items deferred consequent to amendment to AS-11 1,811.82 1,356.26 34.00 2,240.08 1,029.36 61.05 2010-11 2009-10

376.30 161.69

589.46 (325.81)

SOURCES OF FUNDS G. Marked to Market Exchange loss on Forward contracts transferred to Hedging Reserve Account on adoption of principles of hedge accounting under AS30 TOTAL 2. Proceeds from Rights issue of Ordinary shares and A Ordinary shares 3. Proceeds from issue of Global Depository Shares 4. Proceeds from QIP issue 5. Proceeds from FCCN, Warrants and Convertible Debentures converted into Ordinary Shares and premium thereon 6. (a) Decrease in Working Capital (b) Decrease in Finance receivables

2010-11 -

2009-10 132.57

3,740.07 3,351.01 1,493.32

3,726.71 1,794.19 1,555.76

366.41

2,145.94 1,393.58

SOURCES OF FUNDS 7. Increase in Borrowings (net of repayments) 8. Decrease in short term deposits with banks TOTAL APPLICATION OF FUNDS 9. Capital Expenditure (net)

2010-11 8,950.81 2010-11 2,396.29

2009-10 3,460.35 14,076.53 2009-10 2,873.33

10. Investments made (net of sales)

11. Payment of Redemption Premium on NCD 12. Increase in short term deposits with banks

321.31
71.96 804.66

9,429.82
490.67

APPLICATION OF FUNDS

2010-11

2009-10

13. (a) Increase in Working Capital (b) Increase in Finance receivables

3,000.57 -

14. Dividends (including tax thereon)

1,467.03

991.94

15. Miscellaneous Expenditure (to the extent not written off or adjusted) and utilization of Securities Premium Account TOTAL

193.20

290.77

8,950.81

14,076.53

BALANCE SHEET
WHAT THE COMPANY OWNED COMPAN Y COMPANY TATA MOTORS GROUP As at March 31, 2010 16,436.04 22,336.90 161.69 As at March 31, 2011 TATA MOTOR S GROUP As at March 31, 2010

As at March 31, 2011 1. NET FIXED ASSETS 2. GOODWILL 3. INVESTMENTS 4. DEFERRED TAX ASSETS (NET) 5. FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE ACCOUNT (NET) 6. NET CURRENT ASSETS 7. TOTAL ASSETS (NET) 17,475.63 22,624.21 -

43,493.12 38,506.33 3,584.79 2,544.26 632.34 3,422.87 2,219.12 425.97 -

(2,164.63) 37,935.21

(5,865.98)

4,051.10

724.81 45,299.10

33,068.65 54,305.61

WHAT THE COMPANY OWED

COMPANY

COMPANY TATA MOTORS GROUP As at March 31, 2010 As at March 31, 2011

TATA MOTOR S GROUP As at March 31, 2010 35,108.3 6 8,206.48 213.51 191.15

As at March 31, 2011

1. LOANS 2. NET WORTH 3. MINORITY INTEREST 4. FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE ACCOUNT (NET)

15,898.75 20,013.30 -

16,594.54 14,965.47 -

32,791.41 19,171.47 246.60 -

5. DEFERRED TAX LIABILITY (NET)

2,023.16

2,023.16

2,096.13

1,579.60

PROFIT AND LOSS ACCOUNT

COMPAN COMPAN TATA Y Y MOTORS 2010-2011 2009GROUP 2010 2010-2011 TATA MOTOR S GROUP 20092010

1. INCOME SALE OF PRODUCTS AND OTHER INCOME FROM OPERATIONS LESS : EXCISE DUTY 52,135.97 38,364.10 127,419.6 2 4,095.51 48,040.46 2,771.05 4,286.32 3,048.17 92,519.25 95,567.42

35,593.05 123,133.3 0

DIVIDEND AND OTHER INCOME

183.26
48,223.72

1,853.45

89.61

1,793.12
94,312.37

37,446.50 123,222.9 1

COMPANY 2010-2011

COMPAN Y 2009-2010

TATA MOTORS GROUP 2010-2011 9,342.67 962.49

TATA MOTORS GROUP 2009-2010 8,751.77 498.20

EMPLOYEE COST PRODUCT DEVELOPMENT EXPENDITURE

2,294.02 106.17

1,836.13 144.03

DEPRECIATION / AMORTISATION
INTEREST AND DISCOUNTING CHARGES EXCEPTIONAL ITEMS - LOSS / (GAIN) TOTAL EXPENDITURE 3. PROFIT BEFORE TAX

1,360.77
1,143.99 147.12 46,027.20 2,196.52

1,033.87
1,103.84 920.45 34,616.96 2,829.54

4,655.51
2,045.42 (231.01) 112,785.74 10,437.17

3,887.13
2,239.71 259.60 90,789.73 3,522.64

4. TAX EXPENSE

(384.70)

(589.46)

(1,216.38)

(1,005.75)

COMPAN Y 20102011

COMPAN Y 20092010

TATA MOTORS GROUP 2010-2011

TATA MOTOR S GROUP 20092010 2,516.89

5. PROFIT AFTER TAX

1,811.82

2,240.08

9,220.79

6. SHARE OF MINORITY INTEREST

(48.52)

(30.33)

7. SHARE OF PROFIT / (LOSS) IN RESPECT OF INVESTENTS IN ASSOCIATE COMPANIES

8. PROFIT FOR THE YEAR 1,811.82 2,240.08

101.35

84.50

9,273.62

2,571.06

Thank You !!!