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TABLE OF CONTENTS

CHAPTER

TITLE

PAGE NO

INTRODUCTION

1- 12

1.1 Introduction

1.2 Need and Importance of the Study

1.3 Objectives of the Study

13

1.4 Scope of the Study

13

1.5 Research Methodology

13

1.6 Limitations of the Study

14

1.7 Organizational Study

14

Literature Survey & Literature Review

16 - 43

Company Profile

44 - 48

Data Analysis And Interpretation

49 68

Findings And Conclusions

69 70

Bibliography

71

CHAPTER 1
INTRODUCTION

1.1 INTRODUCTION
FUNDS FLOW STATEMENT:
The basic financial statement i.e., the balance sheet and profit and loss account
(or) income statement of the business, reveal the net effect of the various
transaction on the operational and financial position of the assets and liabilities of
an undertaking at particular point of time. It reveals the financial status of the
company. The assets side of a balance sheet shows of the deployment of
resources of an undertaking while the liabilities side indicates its obligation i.e.,
the manner in which these resources were obtained.
The profit and loss account reflects the results of the business operations for a
period of time. It contains a summary expenses incurred and the revenue
realized in an accounting period. Both these statement provide the essential
basis information on the financial activities of a business. The balance sheet give
a static view of the resource(liabilities) of a business and uses(assets) to which
these resources have been put at a certain point of time. It does not disclose the
close for changes in the assets and liabilities between two different points of time.
The profit and loss account, in a general way, indicates the resources an
undertaking and which do not operate through profit and loss account. Thus
another statement has to prepare to show the change in 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

way to which these funds were employed. In simple words, it is a statement of


sources and applications of funds.

MEANING AND CONCEPT OF FLOW OF FUNDS:


The term Flow means movement and includes both inflow and outflow the
term flow of funds means transfer economic values from one asset equity to
another flow funds is said to have taken place when any transaction of the
transaction.
If the effect of transaction result in the increase of funds, it is called a source of
funds and if it results in the decrease of funds, it is known as application of funds.
Further, in case the transaction does not change funds. It is said to have not
resulted in the flow of funds. According to the working capital concept of funds,
the term flow of funds refers to the movement of funds in the working capital. If
any transaction result in the increase in working capital it is said to be a source or
inflow of funds and it result in decrease of working capital, it is said to be an
application or out flow funds.
In simple language funds move when a transaction effects,
i)

A current assets and a fixed assets or,

ii)

A fixed and a current liability,

iii)

A current asset and a fixed liability,

iv)

A fixed liability and current liability. And funds do not move when the
transaction effects fixed assets and fixed liability or current assets and
current liabilities.

1.2 NEED AND IMPORTANCE


Funds Flow Statement is an important financial tool, which analyze the changes
in financial position of a firm showing the sources and applications of its funds. It
provides useful information about the firms operating, financing and investing
activities during a particular period. The following points highlight the importance
of Funds Flow Statement.
1) Funds Flow Statement helps in identifying the change in level of
current assets investment and current liabilities financing.
2) Funds Flow Statement helps in analyzing the changes in working
capital level of a firm.
3) Funds Flow Statement shows the relationship of net income to the
changes in funds from business operation.
4) Funds Flow Statement report about past fund flow as an aid to predict
future funds flow.
5) Funds Flow Statement helps in determining the firms ability to pay
interest and dividend, and pay debt when they become due.
6) Funds Flow Statement shows the firms ability to generate long term
financing to satisfy the investment in long term assets.
7) Funds Flow Statement helps in identifying the factor responsible for
changes in assets, liabilities and owners equity at two balance sheet
date.

1.3 OBJECTIVES
1) To analyze the changes in assets and liabilities from the end of one
period of the time to the end of another period of time.
2) To know various needs for which funds were obtained during a particular
period based in which these funds were employed.
3) To understand flow of funds in current or non current accounts.
4) To find out the sources form which additional funds were derived and the
use to which their sources were put.
5) To indicated the relationship between profits from operations, distribution
of dividends and rising of new capital or term loans.
6) To point out the financial strengths and weaknesses of the business.
7) To inform as to how the loans to the business have been used.

1.4 RESEARCH METHODOLOGY


Research methodology is a detailed study of the subject which uses a set of
methods to perform the research methodology is a framework of the methods
and procedures carried on for acquiring information needed. It is a blue print
according to which research is conducted
The data is of two types:
1) PRIMARY DATA
2) SECONDARY DATA
PRIMARY DATA:
Primary data has been collected from the people of the organization which is
also called first hand data. The data collected from primary source includes
project guides, approaching the financial department heads, the self help
groups, the branch manager and few employees of the company

SECONDARY DATA:
The secondary data was collected from published and unpublished manuals,
records, broachers, files etc., of the organization. The secondary information was
collected from the company manuals and office records pertaining to production,
financial position and welfare activities.

1.5 SCOPE
Funds Flow Statement is a Technical Device to analyze the changes in the
financial condition of the business enterprise between two dates. This funds
flow statement is a statement which indicates various means by which the funds
have been obtained during a certain period and the ways to which these funds
have been used during the period.
The term funds used here means working capital that is the excess of current
assets over current liabilities. It is an essential tool for the financial analysts and
is of primary importance to the financial management.
1) The present study focuses as sources of funds and applications of funds
for a period of time.
2) The study is confirmed to find out the changes in the financial position of
the Mind Links Pvt Ltd between the beginning and the ending financial
date.
3) This Funds Flow Statement is a statement which indicates various means
by which the funds have been obtained during a certain period.
4) The basic purpose of funds flow statement is to reveal the changes in the
working capital on the two balancing dates.
5) It helps in the analysis of financial operations.
6) It helps in the formation of realistic dividend policy.

1.6 LIMITATIONS
1) It should remember that a Fund Flow Statement is not a substitute of an
income statement or a balance sheet.
2) It provides only some additional information as regards in working capital.
As such it must be remembered that funds flow statement is not a
substitute of the income statement.
3) It cannot reveal continuous changes.
4) The study based on the available annual reports and internal information
only.
5) It provides information about changes in the working capital only and
ignores information about changes in cash, which are more relevant and
important than working capital.
6) It is prepared taking into consideration only funds items and non funds
items are ignored. As such, it is complete and unscientific.
7) Time constraint is another limitation for the study because the study is
limited to 45Days.
8) The information is mostly depends upon the secondary data.

1.7 ORGANIZATIONAL STUDY


Organization of the study deals with the arrangement of the entire study. The
entire work is organized in order to facilitate easy identification of 5 chapters.
CHAPTER-1:
This refers with the introduction part which involves a brief introduction of Funds
Flow Statement, the need and importances of study, objectives of the study,
research methodology, Scope, limitations and structure of the study.
CHAPTER-2:
Chapter 2 deals with literature review. 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 is a statement of sources and applications of funds.
CHAPTER-3:
Chapter 3 deals with company profile. MiNd LiNks IT R&D Labs Pvt. Ltd. Is a
software engineering services company in the business of providing Information
Technology based solutions to various business entities operating in different
segment of the company.
CHAPTER-4:
Chapter 4 deals with the analysis and interpretations. The employees in company
general felt that the work culture in the company is good.
CHAPTER-5:
This covers with the conclusion of the study and suggestions. The end of the
report consists of bibliography.

CHAPTER 2
LITERATURE SURVEY
&
LITERATURE REVIEW

LITERATURE SURVEY
Survey-1:
Title: Funds flows into tax effective OEICs and Australian based funds has held
up well.
Source: Traders Magazine

The latest Good Returns' survey of tax-effective offshore funds shows that funds
flow into UK-based Open-Ended Investment Companies held up well in the
September quarter compared to the rest of the industry.
Net funds flow (applications minus redemptions) for the quarter was $24.3 mill,
exactly the same figure as it was in June quarter.
While funds flow was positive the total amount of money invested in the sector
took a hit from poor fund performance with net assets under management
growing just 8% to $86.3 mill in the quarter.

These figures compare well with a very flat quarter for mainstream managed fund
sector.
According to researchers Fund Source the New Zealand domiciled funds had net
funds flows of $69.1 mill, which made it the worst quarter for the industry since
June 2010
It says the September quarter figure was down 81% on the $354 mill figure
recorded for the previous quarter this year.
The second part of the Good Returns' survey covers money invested into taxeffective Australian-based funds.
There are three confirmed funds in this area, including Money Managers First
Step Mortgage fund, which is run by NZ Funds Management, and two Frank
Russell Funds (international shares and international bonds) which are market as
ANZ's Ascent investment programmer.
First Step continued to attract significant volumes of new investment, with a net
funds flow of $39 mill, taking it to $219 mill net assets under management.

Although there are only three funds included in this part of the survey, it is
understood that other Australian based funds are being operated by managers,
and quite a few managers are looking at establishing funds offshore to get
around issues of paying tax on capital gains.
Although there are concerns that these funds could lose their tax-advantage if
the Government adopts the risk free return model (RFRM) advocated by the
McLeod tax review, that is unlikely to happen soon.
Under such a scheme investors would have to pay tax on the amount of money
they have invested at the start of the year no matter what happens during the
year.
This means that in a situation where markets are declining in value investors
would be paying tax although their funds are making losses.

SURVEY-2:
Title- Funds Flow Model and Production Management
SourceFUNDS & FLOWSElements crossing the boundaries classified in:
Funds: elements entering and leaving the process, providing certain
Services over a certain period;
Example: workers in shoes production
Flows: elements either entering (as input) or leaving (as output) the
Process Ex.: Input flows: energy and leather in shoes production;
Output flows: shoes and waste generated in the shoes production
Process.
strong connections between the analysis of idleness
reduction for processes in line and some issues addressed by
production (and inventory ) management.
The fund-flow model is:
Not suited for:
1) General equilibrium analysis;
2) Analysis of reciprocal influences between economic sectors;
3) Analysis of optimal patterns of utilization of fixed capital.

Suited for:
1) Analysis of organizational aspects of production processes;
2) Analysis of inter-relations between production scale, organization and
Costs;
3) Analysis of process innovations and their effects on costs:
a) A new category: time-saving innovation;
b) Bottlenecks;
c) Temporal coordination.

LITERATURE REVIEW
MEANING AND OBJECTIVES OF FUNDS FLOW STATEMENT:
The basic financial statement i.e., the balance sheet and profit and loss account (or)
income statement of the business, reveal the net effect of the various transaction on the
operational and financial position of the assets and liabilities of an undertaking at
particular point of time. It reveals the financial status of the company.
The assets side of a balance sheet shows of the deployment of resources of an
undertaking while the liabilities side indicates its obligation i.e., the manner in which
these resources were obtained. The profit and loss account reflects the results of the
business operations for a period of time. It contains a summary expenses incurred and the
revenue realized in a accounting period. Both these statement provide the essential basis
information on the financial activities of a business. The balance sheet give a static view
of the resource(liabilities) of a business and uses(assets) to which these resources have
been put at a certain point of time. It does not disclose the close for changes in the assets
and liabilities between two different points of time.
The profit and loss account, in a general way, indicates the resources an undertaking and
which do not operate through profit and loss account. Thus another statement has to
prepare to show the change in 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 way to which these
funds were employed. In simple words, it is a statement of sources and applications of
funds.

CONCEPT OF FLOW OF FUNDS:


The term Flow means movement and includes both inflow and outflow the term
flow of funds means transfer economic values from one asset equity to another flow
funds is said to have taken place when any transaction of the transaction.
If the effect of transaction result in the increase of funds, it is called a source of funds and
if it results in the decrease of funds, it is known as application of funds. Further, in case
the transaction does not change funds. It is said to have not resulted in the flow of funds.
According to the working capital concept of funds, the term flow of funds refers to the
movement of funds in the working capital. If any transaction result in the increase in
working capital it is said to be a source or inflow of funds and it result in decrease of
working capital, it is said to be an application or out flow funds.
In simple language funds move when a transaction effects,
v)

A current assets and a fixed assets or,

vi)

A fixed and a current liability,

vii)

A current asset and a fixed liability,

viii)

A fixed liability and current liability. And funds do not move when the
transaction effects fixed assets and fixed liability or current assets and current
liabilities.

Kenneth midgley and Ronald G.Burns define the term Funds as one used in the sense of
spending power, it refers to the value embedded in assets. According to Bonneville and
Dewey Funds constitute the prime importance in sharing and operating any business

enterprise. In ordinary parlance funds mean cash only, but it has got several different
concepts as mentioned below. Funds may mean:

Cash only

Net working capital i.e., current assets less current liabilities.

Total resources and total funds.

Internal resources only.

Net worth i.e., owners equity capital plus reserves.

CURRENT AND NON CURRENT ACCOUNTS


To understand flow of funds it is essential to classify various accounts and balance sheet
items current and non current categories. Current accounts can either current assets or
current liabilities. Current assets are those assets which in the ordinary course of business
can be or will be converted into cash with in a short period of normally one accounting
year.
Current liabilities are those liabilities which are intended to be paid in the ordinary
course of business with in a short period or normally one accounting year out of the
current assets or the income of the business.
The following is the list of current or working capital accounts
List of current or working capital

Current Liabilities

Current Assets

1. Bills payable

1. Cash in hand

2. Sundry creditors or account payable

2.Cash at bank

3. Accrued or outstanding expenses

3. Bills receivable

4. Dividends payable

4.Sundry debtors or account


receivable

5. Bank overdraft

5.Short term loans and advance

6. Short term loan advances and deposits

6.Temporary or marketable
investments

7. Provision against current assets

8.Provision for taxation, if it does

7.Inventories or stock such as


[a] Raw materials
[b] Work in progress
[c]Stores and spare
[d] Finished goods
not

8.prepaid expenses

amount to appropriation of profits


9.Proposed dividends (may be current

9.accurued income

non- current Liability)

List of non Current (or) Permanent Capita Accounts:


Non- current or permanent liabilities

Non current or permanent assets

Good will

Land

Building

Equity share capital

.
2

Preference share capital

.
3

Redeemable preference share


capital

Debentures

Plant and Machinery

Furniture and Fittings

Trade Marks

Patent Rights

Long term investment

Debit balance of profit and

.
5

Long term loan

.
6

Share premium account

.
7

Share forfeited account

.
8

Profit and loss account (balance of

profit i.e., credit Balance)


9

Capital reserve

loss account

10.

Capital redemption reserve

10.

Discount on issue of shares

11.

Provision for depreciation


Against fixed assets

11.

Discount on issue of
debentures

Funds flow statement is the statement of sources and application of funds. It is also
called as funds where got and where gone statement Almond Coleman observed.
The funds statement in a statement summarizing the signification financial changes
which have occurred between the beginning and the end of companys accounting
period.
There are 4 steps involving in preparation of funds flow statement
a.

Ascertain the funds from operation

b.

Preparation of statement of changes.

c.

Computation of any missing figures as to profit or loss on Sale of

d.

fixed assets and the amount of deprecation on fixed assets etc.,

e.

Finally preparation of funds flow statement.


Foulke defines this statement as:

A statement of source and appreciation of funds in technical device designed to


analysis the changes in the financial condition of a business enterprise between two
dates
In the words of Anthony the funds flow statement describes the sources from which
additional funds were derived and the use to which these sources were put.
F.C.W.A. in glossary of management accounting terms defined funds flow statement
as a statement either prospectus or prospectus 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.
Thus funds statement in a statement which indicates various means by which the
funds have been obtained during a certain period and the Ways to which these funds have
been used during that period. The term funds used here means working capital i.e., excess
of current assets over current liabilities.

OBJECTIVES OF FUNDS FLOW STATEMENT:


1) To analyze the changes in assets and liabilities from the end of one period of
the time to the end of another period of time.
2) To know various needs for which funds were obtained during a particular
period based in which these funds were employed.
3) To understand flow of funds in current or non current accounts.
4) To find out the sources form which additional funds were derived and the use
to which their sources were put.

ADVANTAGES AND DISADVANTAGES OF FUNDS FLOW


STATEMENT:
ADVANTAGES:
1) Helps in the evaluation of alternative finance and investments plan.

2) Managements of various companies are able to review their budget with the
aid of fund flow statement.
3) Investors are able to measure as to how the company has utilized the funds
supplied by them and its financial strengths with the aid of funds statement.
4) Helps in the planning process of a company.
5) It is an effective tool in the allocation of resources.
6) It explains the relationship between the changes in the working capital and net
profits.

DISADVANTAGES:
1) It should remember that a Fund Flow Statement is not a substitute of an income
statement or a balance sheet.
2) It provides only some additional information as regards in working capital. As
such it must be remembered that funds flow statement is not a substitute of the
income statement.
3) It cannot reveal continuous changes.
4) It provides information about changes in the working capital only and ignores
information about changes in cash, which are more relevant and important than
working capital.
5) It is prepared taking into consideration only funds items and non funds items
are ignored. As such, it is complete and unscientific.

SOURCES OF FUNDS FOR FUNDS FLOW STATEMENT:


Where an account of an accounting transaction, there is an increase in Fund (working
capital) we say that there is an inflow or source of fund.
There will be an inflow, when, on account of transaction, there is

A decrease in the value of non- current asset.


(or)

An increase in the value of non- current liability.

The main sources of funds are:


1) Funds from operations.
2) Issue of equity/preference shares.
3) Raising long term loan.
4) Sale of fixed asset.
5) Sale of debentures.
6) Non trading receipts.

IMPORTANCE OF FUNDS FLOW STATEMENT:


A funds flow statement is an essential tool for the financial analysis and is of primary
importance to the financial management. Now a days, it is being widely used y the
financial analysis, credit granting institutions and financial managers. The basic purpose
of a funds flow statement is to reveal the changes in working capital on the two balance
sheets dates. It also describes the sources from which additional working capital has been
financial and the uses to which working capital has been applied such a statement is
particularly useful in assessing the growth of the firm its resulting financing theses needs.
By making use of projected funds flow statement, the management can come to
know the adequacy or inadequacy working capital even in advance. One can plan the
intermediate and long-term financial of the firm, repayment of long term debts,
expansion of the business, allocation of resources, etc., the significance or importance of
a funds flow statement can be were followed from its various uses given below:

(1) 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 give a static view of the resources
of 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 assets and liabilities between two
different point of time. The funds flow statement explains causes for such changes and
also the effect of these changes no the liquidity position of the company.

Sometimes a concern may operate profitably and yet its cash position may become
more and more course. The funds flow statement give a clear answer to such a situation
explaining what has happened to the profit of the firm.

(2)

It throws light on many perplexing questions of general interest:

Which otherwise may be difficult to be answered, such as:


a) Why were the net current assets lesser in spite of higher profits and vice verse.
b) Why more dividends could not be declared in spite of available Profit?
c) How was it possible to distribute more dividends than the present earning?
d) What happened to the net profit? Where did they go?
e) What happened to the proceeds of sale of fixed assets or issue of Shares,
debentures etc.

(3)

It helps in the formation of a realistic dividend policy:

Sometimes a firm has sufficient profit available for distribution as dividend but yet it
may not be advisable to distribute dividend for lack of liquid or cash resources. In such
causes, a funds flow statement helps in the formation of a realistic dividend policy.

(4)

It helps in the proper allocation of resources:

The resources of a concern are always limited and it works to make the best use of these
resources. A projected funds flow statement constructed for the future help in making
managerial decision. The firm can plan the deployment of its resources and allocate them
among various applications.

(5) It acts as a future guide:


A project 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 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 problem.

(6) It helps in appraising the use of working capital


A funds flow statement helps in explaining how efficiently the management has used its
working capital and also suggests way to improve working capital position of them firm.

(7)It helps knowing the overall credit worthiness of a firm:


The financial institutions and banks such as state financial institutions, industrial
development corporation, industrial finance 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 statement.

APPLICATIONS OF FUNDS FOR FUNDS FLOW STATEMENT:


Where an account of accounting transaction, there is a decrease in fund (working capital)
we say that there is an outflow/ application of fund.
There will an outflow, when, on account of the transaction, there is.

A decrease in the value of non-current liability.


(or)

An increase in the value of non-current asset.


The main applications of funds are:
1) Funds used in operations- loss.
2) Purchase of fixed assets/investment.
3) Redemption of preference shares.
4) Redemption of debentures.
5) Repayment of long-term loans.
6) Non-trading payments.

PREPARATION OF STATEMENT OF CHANGES IN WORKING


CAPITAL
The schedule of changes in working capital or the statement of changes in working
capital is the statement which shows the changes in the working capital that have
occurred during the current year. This schedule considers only current assets and current
liabilities at the beginning and at the end of the year. This schedule shows either increase
or decrease in the working capital.

The following rules are followed while preparing a schedule of changes in working
capital,
a) An increase in current assets results in increase in working capital.
b) A decrease in current assets results in decrease in working capital.
c) An increase in current liabilities results in decrease in working capital.
d) A decrease in current liabilities results in increase in working capital.

STATEMENT OR SCHEDULE OF CHANGES OF WORKING


CAPITAL:
Particulars

Previous yr

Current yr

Effect on working capital


Increase

Decrease

Current Assets
a) Cash in hand
b) Bills receivable
c) Sundry debtors
d) Temporary investments
e) Stocks/inventories
f) Prepaid expenses
g) Accrued income
Total current assets

xxx

xxx

Current Liabilities
a) Bills payable
b) Sundry creditors
c) Bank overdraft
d) Short term advances
e) Dividends payables
f) Provision for taxation
Total current liabilities
Working capital

xxx

xxx

CA-CL
Net increase or decrease in working capital=
Increase in working capital - Decrease in working capital

PREPARATION OF LEDGER ACCOUNTS FOR NON-CURRENT:


Non-current (or) permanent Liabilities:
1) Equity share capital.
2) Preference share capital.
3) Redeemable preference share capital.
4) Debenture.
5) Long term loans.
6) Share premium account.
7) Share forfeited account.

Non-current (or) permanent Assets:


1) Goodwill.
2) Land.
3) Building.
4) Plant & Machinery.
5) Furniture & Fittings.
6) Trade Marks.
7) Patent Rights.

PREPATION OF STATEMENT OF FUNDS FROM OPERATIONS:


Before making fund flow statement, we must make statement showing the fund from
operation.
Operation means business activity and fund from operation means profit from business
activity. So, you will easy understand that profit from business activity between two
accounting period must be the source of fund.

STATEMENT OF FUNDS FROM OPERATIONS


Closing balance of profit and loss account or retained earnings as given in the Balance
sheet.

Add non-fund and non operating items which have been already
Debited to profit and loss account
a) Depreciation
b) Amortization of fictitious and intangible assets
1. goodwill
2. patents
3.

trade marks

4.

preliminary expenses

5.

discount on issue of shares

c) Appropriation of retained earning such as


Transfer to general reserve
Dividend equalization fund
Transfer to sinking fund

Contingency reserve etc

d) Loss on sale of any non current or fixed assets such as


Loss on sale of land and building

Loss on sale of machinery

Loss on sale of furniture

Loss on sale of long term investment


e) Dividends including
Interim dividend
Proposed dividend
f) Provision for taxation (if it is not taken as current liability)
g) Any other non fund / non operating items which have been debited
to P/L account
Total ( A)

xxxx

Less - Non Fund or non operating items which have already been
credited to profit and loss account
a)Profit or gain from the sale of non current / fixed assets such as

Profit on sale of land and building

Profit on sale of plant and machinery

Profit on sale of long term investment etc.

b) Appreciation in the value of fixed assets such as increase in the value of land if it has
been credited to profit and loss account
c) Dividends received
d) Excess provision retransferred to profit and loss account or written back.
e) Any other non operating item which has been credited to profit and loss account
f) Opening balance of profit and loss account or retained earnings as given in the
balance sheet
Total ( B)
Funds received from operation or business activities = Total ( A) Total ( B).

xxxx

PREPARATION OF FUNDS FLOW STATEMENT


Fund flow statement
A) Source of funds

Amount

1) Fund from operation (balance of second step)


2) Issue of shares capital
3) Issue of debentures
4) Raising of long term loans
5) Receipts from partly paid shares, called up
6) Amount received from sales of non current or fixed assets
7) Non trading receipts such as dividend received
8) Sale of investments (Long term)
9) Decrease in working capital as per schedule of changes in working capital
Total

xxxx

Applications or uses of funds


1) Redemption of preference share capital
2) Redemption of debentures
3) Repayment of long term loans
4) Purchase of long term loans
5) Purchase of long term investments
6) Non trading payments
7) Payment of tax
8) Payment of dividends
9) Increase in working capital (As per positive balance of Ist step)
Total

xxxx

CHAPTER-3
COMPANY PROFILE

COMPANY PROFILE
MiNd LiNks IT R&D Labs Pvt. Ltd. is a software engineering services company in the business of
providing Information technology based solutions to various business entities operating in different
segments of the company.
The Company applies robust and optimal methodologies; state of art technologies with software
engineering skills to domain knowledge in creating information technology based solutions of clients
in the respective domains.
MiNd LiNkS IT R&D Labs keeps abreast with the state of art technologies. Knowledge of the
technologies are carefully analyzed for suitability and appropriately deployed with the solution. The
company has in-depth domain as well as functional knowledge.
MiNd LiNkS IT R&D Labs helps public sector and commercial clients build their organizations by
delivering measurable improvements every time. Whether through enhancing productivity,
improving operational efficiencies or increasing revenue and growing profitability, MiNd LiNkS IT
R&D Labs understands both the immediate and long-term goals that work for todays
organizations. Our proven experience and innovative solutions are designed for one purposeto
give the edge.

Technology Solutions

Data Entry and Data Conversion

Business Consulting

Management Solutions

Strategic Design

Outsourcing

MiNd LiNkS IT R&D Labs growth can be attributed to the company's focus on
quality, consistency, and long-term vision. In order to thrive in an interconnected
economy, the service offerings by MiNd LiNkS IT R&D Labs meet the demands of

an ever-changing business environment. We delivers fresh solutions with


seasoned professional developers and consultants who have one singular focus:
Ensure that everything we do delivers value to our clients and moves their
businesses forward giving them the edge in the demanding business.

VISION
When our clients think of MiNd LiNkS IT R&D Labs, we want them to envision a company that will
give them the edge in their business needs through a combination of professionalism, cooperation,
integrity, and excellence in performance with objective results and high quality. We provide our
customers with the highest levels of service, quality, and efficiency. The enduring and personal
relationships we hold with our clients, gives us the advantage of a loyal, well-established client and
partnership base. We offer the assurance that company needs will be met now and in the future.

MISSION

To be globally recognized as a provider of a trusted, reliable resource to quality Information


Technology (IT) solutions.

To build worldwide partnerships for success.

To give the clients a competitive edge.

To enhance the operational efficiency and financial advantage to clients.

Our Corporate Philosophy is Customization


Give a solution which is an amalgamation of expertise and the clients needs.

VALUES
There are six driving factors behind our corporate philosophy, our day-to-day
operations and ultimately our success. These values guide everything we do,
shape who we are and how our customers, our associates, and our partners
perceive us.

CLIENTS' SUCCESS leads us to our success.

PEOPLE are our focus.

TEAMWORK is the cornerstone of our culture.

INTEGRITY guides our work.

ACCOUNTABILITY is the foundation for everything we do.

CHANGE drives us to continue to evolve and grow.

BUSINESS INTELLIGENCE
MiNd LiNkS IT R&D Labs Business Intelligence solutions are designed to
empower organization with information. In today's highly competitive and
dynamic business environment, information is vital to survival.
Organizations spend millions of dollars on business solutions that are designed
to capture data, but little is done to transform this data into meaningful business
information. That's where MiNd LiNkS IT R&D Labs Business Intelligence
solutions come in. Using our proven methodology, we deliver key business
metrics to desktop in a timely fashion, with a format that is both intuitive and
highly interactive.
Our Business Intelligence solutions are designed to give you direct access to the
information that you need, when you need it. This effectively removes IT from the
middle of the information-delivery chain, freeing this critical resource to focus on
other business problems.

BUSINESS CONSULTING
The greatest accomplishments begin with an architect plan. We believe that
MiNd LiNkS IT R&D Labs is the advisor that the company needs most as you
begin to conceptualize the business road map.
Our business consulting is the cohesive mortar that unites our various disciplines.
By focusing on company's strategic objectives, we are able to design, develop,

and implement the solutions that will produce measurable change across the
enterprise.
As the foundation of MiNd LiNkS IT R&D Labs, this business-centric philosophy
permeates our various discipline leaders. Whether a developer or a designer, the
goal of producing custom business solutions is paramount.

FORMING A STRUCTURE
Our skill in analyzing company's internal structure enables MiNd LiNkS IT R&D
Labs to enhance business processes, operational efficiencies and manage or
reduce overall costs. By optimizing supply chain through supplier collaboration
and rationalization we can improve the relationships that support business.

EXTENDING RELATIONSHIP
By helping to orientate leadership direction and formulate operational practices,
MiNd LiNkS IT R&D Labs can also effectively refine how company goes to
market. By improving the ways in which the company deploy their sales force,
manage traditional customer relationships and build an integrated marketing and
communications plan, we can help the craft every touch point between the
company and customers.

BRAND DEVELOPMENT
The company brand is the company promise to the marketplace. It is the
message, quality, personality, and differentiation that make the organization or
product unique. Its company image.
Developing a brand begins with an understanding of the product or company
strengths, positioning within the marketplace, as well as consumer perception.
MiNd LiNkS IT R&D Labs can help out to determine where the brand is and
where it wants to be. Through competitive market analysis, we will expose
company brands key differentiators and recognize marketplace opportunities.

We conduct inquisitive exercises to formulate the language, personality, and tone


of the organization. And by analyzing business objectives, we are able to build a
strategic communication plan that assists in taking company brand to market.
MiNd LiNkS IT R&D Labs experienced consultants will help out visually and
verbally to express company brands identity. Company Logo, trademarks, and
taglines will be designed or redesigned to convey company brand with razorsharp precision. The company identity will also speak through color, text and
photography. MiNd LiNkS IT R&D Labs will provide an identity design system that
ensures consistency while empowering entire organization with that entire
company brand has to offer.
Some organizations already have an established brand presence but are in need
of brand translation as they migrate across various media. By understanding the
strengths, personality, and consumer perceptions of the company brandas well
as identity standardswe are able to effectively translate the company brand
and identity across multiple mediums. In the end, MiNd LiNkS IT R&D Labs will
help out forge the blueprint for implementing the company brand and identity
across various media and differentiate it in competitive marketplaces.

ENTERPRISE APPLICATION INTEGRATION


MiNd LiNkS IT R&D Labs development team is designed to partner with our
clients to address many business critical issues and objectives. MiNd LiNkS IT
R&D Labs knows how to use state-of-the-art technologies to provide targeted,
world-class integration solutions that address unique business needs.

INTEGRATED MARKETING
Successful Integrated Marketing solutions take three key elements in order to
produce value: solid strategy, quality design, and measurability.
Integrated Marketing utilizes a variety of media and channels. It employs
designers that understand these mediums and can translate their designs into

effective communications. MiNd LiNkS IT R&D Labs designers have the


expertise to match visual design with the appropriate language and elements,
essential in improving response rates and reaching near to intended audience.

STRATEGIC PLANNING SOLUTIONS


MiNd LiNkS IT R&D Labs Strategic solutions leverage a proven methodology to
help our clients fundamentally align and leverage technology in order to achieve
enterprise business objectives. We devise these strategies by examining the
current infrastructure, IT organization, business processes, organizational
objectives, and key stakeholders. Then we align technology solutions in a way
that ties these stakeholders to the business systems and processes within the
organization.
Our strategic planning solutions are holistic to provide maximum value.

Strategic Planning Service Features:

Aligns technology infrastructure and initiatives with high-priority business processes and
organizational objectives

Focuses on the needs of the key stakeholders (customers, suppliers, employees) and not
on the limitations of technology.

Provides qualitative and quantitative measures of the success of the strategy or business
continuity plan.

Creates alignment, consensus, and accountability for the prioritized initiatives among
executive leadership and line of business management.

SERVICES
MiNd LiNkS IT R&D Labs delivers wide-ranging and value added services
adopting the unique approach of integrating people, processes and technology.

This approach has allowed our teams to map business requirements to the
technology solution that fit project goals. Our consultants focus on understanding
customer needs to devise design and development strategies to efficiently create
reliable applications, on time and within budget.
Our expertise at strategic, technical, operational and organizational levels help
organizations takes advantage of new business opportunities.
Study and Analysis : Once the problem Ticket issue is received, the Onsite technical team makes
a careful study of the issue and analyzes its complexity.
Estimation: After a thorough analysis the work estimation is made and it is placed before the client
through an offsite support Manager. Based on the estimated time and priority, the issue is then
scheduled to be resolved either by the onsite team or by the offshore team.
Scheduling: Identify the best suitable team member(s) for solving the issue and assign the tasks to
that particular resource(s).
Solution: The assigned team member(s) provides the solution as specified in the given task
document in a scheduled time adhering to the quality standards, he also provides a standard
document describing the work done.
Testing: Test the changed code as per the Maintenance Manual. Update the documentation as
required
Log Maintenance: Logs will be maintained for future use by the offsite as well as offshore team for
all the support issues that have come up.

APPLICATION DEVELOPMENT
With increasing demands, enterprises worldwide are finding it difficult to
implement, and support new applications, while at the same time, maintaining
and upgrading their existing systems. To overcome the situation, companies must
seek to expand development capacity, accelerate time-to-market, and build
flexible distributed delivery models to negotiate risk.

There are benefits in building software to improve existing business processes


rather than changing proven procedures in order of work within the constraints of
off-the-shelf applications. MiNd LiNkS IT R&D Labs addresses these issues and
will help you to remain in step with and ahead of your competition by
continuously improving your information technology-based business solutions.
We remain focused on developing the best solution to respond to each client's
individual business needs. Through our advanced consultative approach, MiNd
LiNkS IT R&D Labs assists in clearly defining organizational goals and
determining where the current systems meet these goals, where they fail, and
how they can be improved through our custom applications solutions. Our
experienced team will work on the project from its conceptualization through and
beyond its completion and implementation.
Our focus areas include extranet, intranet, business-to-business, e-commerce
solutions, software, database and other industry applications.
Our Services in these areas are focused on:

Application Development - This includes web based, client/server


application development and enhancements to legacy applications

Migration and Customization - This includes version Upgrade Services,


Database migration, Re-engineering, Functionality upgrades and Porting

Implementation Support - Routine Maintenance and Functional


Enhancements

Development and Testing - Component Development and Unit Testing,


System and Integration testing

Efficient Data Entry and Data Conversion with 100% percent quality.

APPLICATION MAINTAINENCE
MiNd LiNkS IT R&D Labs provides comprehensive software application
maintenance services for medium to large enterprises. Services range from

undertaking maintenance of existing applications to adding new functionality.


Deep experience in understanding and maintaining large applications coupled
with an expertise in new technologies help to not only prolong the life of existing
applications but also infuse fresh blood into the system. A team of dedicated
software engineers are available round the clock both onsite and offsite to handle
all maintenance related issues from defect fixing to adding new products and
functionality.
Application maintenance deals with

Promptly fixing software problems that cause the system to be non-operative or to perform
incorrectly

Implementing changes, improvements, and enhancements to the system.

BUSINESS PROCESS OUTSOURCING


Business Process Outsourcing (BPO) has changed the way the world does
business, and this trend is only likely to accelerate. BPO is quickly emerging as a
key enabler of all high performing organizations. More and more businesses and
governmental leaders-cross industry, organizational size and geography are
turning to BPO to help them elevate their organizations performance.
Through the right mix of business process improvement, labor arbitrage and
technology enhancements, BPO is aimed at reducing cost, increasing service
levels and thus improving the enterprise value of the business processes.
Blending qualified workforce and faster adoption of well-defined business
processes leads to higher productivity gains without compromising on quality.
The availability of cost effective skilled resources - that is well educated and able
to converse in English, well-developed communication infrastructure and
software sector as well as an appropriate time difference with other countries,
help in making India a favorite destination for the BPO industry.

INTERACTION
MiNd LiNkS IT R&D Labs has rich experience in successfully executing large IT
outsourcing projects with well-established Infrastructure. MiNd LiNkS IT R&D
Labs Interactions, the BPO arm of MiNd LiNkS IT R&D Labs Aims about reducing
the operational costs for its Clients by improving the outsourced processes and
increasing their productivity. The strong parentage of MiNd LiNkS IT R&D Labs
provides the right mix of Infrastructure, People and Processes to the clients. The
partnership offers technical expertise coupled with global call center expertise.
To keep pace with today's economic environment, organizations need to focus on
their core competence. The easiest way of doing this is to partner with a service
provider like MiNd LiNkS IT R&D Labs Interactions, who understands the
company business and solves non-core, yet critical business processes.
MiNd LiNkS IT R&D Labs Interactions interest lies in a long-term partnership
addressing all aspects of the outsourcing requirements from clients. MiNd LiNkS
IT R&D Labs Interactions gives the very best in bringing cost efficiency with
quality processes, round-the-clock operations, state-of-the-art infrastructure and
a committed people force. It offers Industry-specific services to customers. For
instance, in the Insurance and Healthcare sector, it addresses Claims
Processing, Policy Issuance, Premium Accounting, etc. It also offers Front Office
services like Contact Centers for Customer Service. It provides Product Support
& Technical Help Desk services as well as Back-Office Processes in the areas of
Accounting, HR and other Transaction Intensive activities.

CALL CENTER SERVICES


Our focus has been to continually find new and better ways to help our clients
make profitable connections with their customers. Whether you need messaging
or answering service, inbound call center services, outbound call center services,

email support and online chat, we can help out to make the most of every
contact.

MEDICAL TRANSCRIPTION
MiNd LiNkS IT R&D Labs Pvt. Ltd. is a trailblazing Medical Transcription Company. MiNd LiNkS IT
R&D Labs has pioneered its medical transcription operations by recruiting young graduates with
background in of various subjects and orienting them by imparting to them six months of
comprehensive training. MiNd LiNkS IT R&D Labs has a handpicked and individually trained
specialized team of personnel who deal with multiple branches of medicine including the following:

Cardiology
Pulmonologists
Gastroenterology
Genitourinary
Obstetrics and Gynecology
Orthopedics
Oncology and Radiology
Psychiatry
ENT
Neurology
The growth of MiNd LiNkS IT R&D Labs in this field is a saga of success, for it has always
endeavored to provide quality transcription services. At present it has more than 20 Medical
Transcribers with an average of 12 months experience in transcription of a variety of medical reports
involving
Clinical Notes
History and Physical
Consultation
Operative Reports
Discharge Summaries

MiNd LiNkS IT R&D Labs offers Quality Transcription Services with Turn-Around
Schedules that match the best in the industry.
MiNd LiNkS IT R&D Labs creates a congenial work atmosphere and provides
and sustains ample resources to its personnel. In addition, all our Medical
Transcribers have
Appropriate education
Training
Experience
Work experience under supervision of a skilled management team
MiNd LiNkS IT R&D Labs has its own in-house, fully equipped facility to train 20
Medical Transcribers at a time. Training at MiNd LiNkS IT R&D Labs facilitates
individuals in the effort to attain international standards in delivering work within
stipulated time.

LEADERSHIP TEAM
The varied and successful business careers of the principals at MiNd LiNkS IT
R&D Labs, combined with seasoned senior management with decades of
experience, have given the company an unprecedented wealth of resources
unique to the con.

CHAPTER-4
DATA ANALYSIS AND
INTERPERTATION

DATA ANALYSIS AND INTERPRETATION


PROCEDURE FOR PREPARING FUNDS FLOW STATEMENT:
Funds flow statement is a method by which are study changes in financial
position of a business enterprise between beginnings and ending financial
statement dates. Hence, the funds flow statement is prepared by comparing two
balance sheets and with the help of such other information derived from the
accounts as may be needed. Broadly speaking the preparation of funds flow
statement consists of two parts.
1. Statement of schedule of changes in working capital
2. Statement of sources and application of funds.

STATEMENT OF CHANGES IN WORKING CAPITAL:


This is prepared by taking ONLY the Current Assets SCHEDULE reveals the
Increase (or) Decrease in Working Capital between the two Balance Sheets of
the Business (i.e.) it takes into account only the CHANGES in the Current
Assets and Current liabilities.

RULES FOR SCHEDULES: (IMPACT on Working Capital)


Increase in Current Assets
Increase in Working Capital
Decrease in Current Assets
Decrease in Working Capital
Increase in Current Liabilities Decrease in Working Capital
Decrease in Current Liabilities Increase in Working Capital

PROFORMA- SCHEDULE OF CHANGES IN WORKING CAPITAL:

Particulars

Openin
g

closin
g

Changes in W.C

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

If INCREASE in
CA take in
increases column

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

If INCREASE in
CL take in
decrease column

A. Current Assets
1)
2)
3)
4)
5)
6)
7)
8)

Cash in Hand/ Bank


Marketable Investments
Sundry Debtors
Bills Receivable
Advances (Given)
Accrued Incomes
Pre-paid Expenses
Closing Inventory (Stock)

If DECREASE in
CA take in
decreases column

B. Current LIABILITIES
1)
2)
3)
4)
5)
6)
7)
8)

Sundry Creditors
Bills Payable
Out Standing Expenses
Short Term Loans
Bank Overdraft
Provision for doubtful debts
Provision for Tax(Refer Note)
Proposed Dividends(Refer
Note)

If DECREASE in
CL take in
increase column

TOTAL Increase/ Decrease in W.C

xxxx

xxxx

C. NET Increase/ Decrease in


W.C(Balancing Figure)

xxx

xxx

xxxx

xxxx

FUNDS FLOW STATEMENT:


In the FFS, all the Non-Current Assets & Non-Current Liabilities should be
taken from the OPENING & CLOSING Balance Sheet (Given). The FFS shows
the SOURCES & the APPLICATIONS of funds during the last accounting year.
The FFS can be prepared in two ways- i.e., either in the STATEMENT or
ACCOUNT form.
RULES FOR FFS:
Increase in Non- Current Assets
Funds.

is an APPLICATION of

Decrease in Non- Current Assets

is a SOURCE of Funds.

Increase in Non- Current Liabilities

Decrease in Non- Current Liabilities


Funds.

is a SOURCE of Funds.
is an APPLICATION of

STATEMENT OF SOURCES AND APPLICATIONS OF FUNDS:


SOURCES

Amt

APPLICATIONS

Amt

1) Funds From Operation(FFO)


2) Issue of Eq./ Pref.sh.capital

xxx

1) Funds Lost in
Operation(FLO)
2) Redemption of
Pref.sh.capital
3) Redemption of Debentures
4) Purchase of Fixed Assets
5) Purchase of long term
investments
6) Repayment of L/T loans
7) Payment of Taxes
8) Payment of Dividends
9) Increase in W.C

xxx

xxx
3) Issue of Debentures
xxx
4) Sale of Fixed Assets
5) Sale of long term investments
6) Raising of L/T loans
7) Refund of Taxes
8) Non-Operating Incomes
9) Decrease in W.C

xxx
xxx
xxx
xxx
xxx
xxx

xxxx

xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx

Xxxx

CHANGES IN WORKING CAPITAL POSITION OF MINDLINKS IT R&D LABS


PVT LTD for the year 2008 2009 (Rupees In Lakhs)
Particulars

A) Current Assets
1)Inventories

Previous
year 2008

Current year
2009

Working capital
Increase

Decrease

3792.64

4795.79

1003.15

----

513.17
---418.59

831.12
---439.33

317.95
---20.74

----------

839.99

785.34

----

54.65

22.58

27.03

4.45

----

5586.97

6878.61

1781.98
24.13
43.92
1171.85
207.25
1.77

1754.16
26.04
39.67
1132.17
192.98
2.92

27.82
---4.25
39.68
14.27
----

---1.91
---------1.15

3230.90

3147.94

Net working capital (A-

2356.07

3730.67

B)Increase / Decrease

1374.60

----

3730.67

3730.67

2) Debtors
3)Work in progress
4)Cash and bank
5)Loans and advances
6)Other current assets
A) Total Current Assets
B) Current Liabilities
1) Creditors
2) Cash credit
3)Proposed dividend
4) Other liabilities
5) Provision tax
6) Dividend

Total Current Liabilities


1374.60

in W.C

TOTAL

FUNDS FLOW STATEMENT FOR THE YEAR 2008-2009

1432.31

1432.31

SOURCES

OF

FUNDS
1) Issue of share

AMOUNT

APPLICATION OF

AMOUNT

----

FUNDS
1)Reduction

of

----

of

----

capital

share capital

2)Issueof

----

Debenture
3)Raising

2)Reduction
Debenture

of

new

3)Repayment

loans :-

1149.57

Loans:-

----

* Secured loans

162.20

* Secured loans

----

* Unsecured loans

----

* Unsecured loans

472.24

4)Sale

of

Fixed

Assets

4)Purchased

of

579.20

Fixed Assets

----

5)Purchase

----

Investments

----

6) Decrease in W.C

6)Lossfrom

1374.60

7)Decrease

Operation

44.13

5)Profit

from

Operation
in

Investment

---of

7) Increase in W.C
8)Payment

of

Dividend

TOTAL

INTERPRETATION:

1890.97

1890.97

The funds flow statement of 2008-09 clearly shows that the companys working capital
has increased by Rs 1374.60 lakhs. The sources of the company were achieved from
the following.
1. Funds from operation. 579.20 lakhs.
2. From secured loans.

1149.57 lakhs.

3. From un-secured loans. 162.20 lakhs.

The company spent its sources for the following purposes


1. The company used funds worth Rs 579.20 lakhs for acquisition of fixed assets.
2. For payment of dividend Rs 44.13 lakhs.
Thus, the company depended on secured and un-secured loans in addition to funds
from operation for acquisition of fixed assets and meeting working capital requirement.

CHANGES IN WORKING CAPITAL POSITION OF MINDLINKS IT R&D LABS


PVT LTD for the year 2009 2010 (Rupees In Lakhs)
Particulars

Previous year

Current year

2009

2010

Working capital
Increase

Decrease

A) Current Assets
1)Inventories

4795.79

6307.35

1511.56

----

3)Work in progress

831.12

501.30

----

329.82

4)Cash and bank

----

----

----

----

5)Loansand

439.33

441.10

1.77

----

6)Othercurrent

785.34

869.77

84.43

----

assets

27.03

17.37

----

9.66

6878.61

8136.89

4) Other liabilities

1754.16

1587.31

166.85

----

5) Provision tax

26.04

251.01

----

224.97

6) Dividend

39.67

30.00

9.67

----

1132.17

1112.93

19.24

----

Total Current

192.98

0.65

192.33

----

Liabilities

2.92

3.47

----

0.55

3147.94

2985.37

2) Debtors

advances

A)TotalCurrent
Assets
B) Current
Liabilities
1) Creditors
2) Cash credit
3)Proposed dividend

Net working capital


(A-

B)Increase/Decreas
e in W.C
3730.67
TOTAL

5151.52

1420.85

5151.52

1420.85

5151.52

1985.85

1985.85

FUNDS FLOW STATEMENT FOR THE YEAR 2009-2010


SOURCES
FUNDS
1)Issue

of

OF
share

AMOUNT

APPLICATION OF

AMOUNT

----

FUNDS
1)Reduction

----

capital

of

share capital

2)Issueof

----

2)Reductionof

Debenture

Debenture

3) Raising of new

3)Repayment

----

loans :-

1499.04

Loans:-

----

* Secured loans

----

* Secured loans

16.21

* Unsecured loans

----

* Unsecured loans

283.87

4)Sale

261.56

4)Purchased

of

Fixed

Assets

of

Fixed Assets

----

5)Profitfrom

----

5)Purchaseof

Operation

----

Investments

----

6) Decrease in W.C

6)Lossfrom

1420.85

7)Decreasein

Operation

39.67

Investment

7) Increase in W.C
8)Payment

of

Dividend

TOTAL

1760.60

1760.60

INTERPRETATION:
The funds flow statement of 2009-2010 clearly shows that the companys working capital
has increased by Rs 1420.85 lakhs. The sources of the company were achieved from
the following.
1. Funds from operation. 261.56 lakhs.
2. From secured loans.

1499.04 lakhs.

The company spent its sources for the following purposes.


1

The company used funds worth Rs 283.87 lakhs for acquisition of fixed assets.

For re-payment of unsecured loans 16.21 lakhs.

For payment of dividend including dividend tax Rs 39.67 lakhs.

In addition to the funds generated from operation the company acquired secured loans
for acquisition of fixed assets, repaying un-secured loans and meeting the increased
need of working capital. The management also proposed payment of dividend of Rs 2.50
per equity share, which let an out flow of funds of Rs 39.67 lakhs including dividend tax.

CHANGES IN WORKING CPITAL POSITION OF MINDLINKS IT R&D LABS


PVT LTD for the year 2010 2011 (Rs. Lakhs)
Particulars

Previous year

Current year

Working capital

Particulars

2009
Previous year

2010
Current year

Working capital

2009

2010
Increase

Decreas
e

A) Current Assets
1)Inventories

6307.35

3966.03

----

2341.32

2) Debtors

501.30

836.39

335.09

----

3)Work in progress

----

----

----

----

4)Cash and bank

441.10

831.71

390.61

----

5)Loansand

869.77

1609.31

739.54

----

advances

17.37

26.35

8.98

----

8136.89

7269.79

6)Othercurrent
assets

A) Total Current
Assets

B) Current

1587.39

3407.65

----

1820.34

Liabilities

251.01

146.98

104.03

----

1) Creditors

30.00

33.84

----

3.84

3)Proposed

1112.93

1430.72

----

317.79

Dividend

0.65

0.65

----

18.06

4)Other liabilities

3.47

21.53

----

----

2985.37

5041.37

5151.52

2228.42

2923.10

----

----

2923.10

5151.52

5151.52

4501.35

4501.35

2)Cash credit

5)Provision tax
6)Dividend

Total Current
Liabilities
Net working capital
(A-B)
Increase/Decrease
in W.C

TOTAL

FUNDS FLOW STATEMENT FOR THE YEAR 2010-2011


Sources of funds

Amount

Application of funds

Amount

1) Issue of share capital

----

1) Reduction of share capital

----

2) Issue of debenture

----

2) Reduction of debenture

----

3) Raising of new loans:-

3) Repayment loans: -

* Secured loans

----

* Secured loans

1035.13

* Unsecured loans

22.25

* Unsecured loans

----

4) Sale of fixed assets

----

4) Purchase of fixed assets

2000.00

5) Profit from operation

118.78

5) Purchase of investment

----

6) Decrease in W.C

2923.10

6) Loss from operation

----

7) Decrease in investment

1.00

7)Increase in W.C

----

8)Payment of dividend

30.00

TOTAL

3065.13

3065.13

INTERPRETATION:
The funds flow statement of 2010-2011 clearly shows that, working capital decreased by
Rs 2923.10 lakhs. The sources of the company were achieved from the following.
1. Funds from operation. 118.78 lakhs.
2. From un-secured loans. 22.25 lakhs.
3. From sale of investments. 1.00 lakhs.
4. From working capital.

2923.10 lakhs

The company spent its sources for the following purposes.


1. The company used funds worth Rs 2000 lakhs for acquisition of fixed assets.

2. For re-payment of secured loans Rs 1035.13 lakhs.


3. For payment of dividend Rs 30.00 lakhs.
Thus, inadequate long-term funds to finance purchase of plant and machinery, repayment of secured loans deteriorated working capital position. also the management
proposed payment of a dividend of Rs 2.50 per equity share for the year 2010-2011 to
absorb Rs 30.00 lakhs.
So liquidity deterioration in 2010-2011 was due to, Deployment of working capital in long
term investment and Repayment of secured loans.

CHAPTER - 5
CONCLUSION & SUGGESTIONS

CONCLUSION

The MiNd LiNks IT R&D Pvt Ltd. Net Working Capital is satisfactory between the
years since it shows increase trends, but after that it is in declining position. The
company had taken Secured Loans in the assessment year 2010-2011. The
company has repayment total Unsecured Loans in the assessment year 20092010.

Equipment required for profits under construction but not installed by end of year
is shown under Capital work in progress. Depreciation is calculated from year to
year. Investments is carried at cost less provisions where ever necessary.

The purchase of fixed assets by the company is up to mark. The company not
raising additional capital share is same.
Better awareness to increase the sale is suggested. Cost cut down mechanics
can be employed and better techniques can be employed.

SUGGESTIONS

1) Most of the years the company is having increase in working capital; this is
due to increase in levels of current assets. This is due to increase in level of
current assets.
Bringing the level of current assets can reduce this increase in working capital.
2) Loans and advances are fluctuating in a disorder. This may be due to disorder
of current assets and current liabilities.
3) Every company should have upper & lower limits which produce reasonable
combination of profitability in management of working capital.
4) The company should not maintain the resources surplus Current Assets &
Current Liabilities. This is not good for the company so maintain the reserves &
supply, increase the Current Assets & Current Liabilities is healthy for the
organization.
5) Funds flow statement has shown twice losses from operations these are
mainly due to heavy increase in current liabilities like creditors and other
liabilities. To avoid this in the coming years it can be suggested to reduce the
level of credit to supplier of raw materials. I.e. to purchase the raw material from
those suppliers who give them at low costs.
7) Cash balances are not maintained properly. They have to be maintained to
meet the day-to-day operations with out fail.
8) To improve the financial health of the company & maximizing

CHAPTER 6
BIBLIOGRAPHY

BIBLIOGRAPHY

BOOKS:
Finance Management by L.M Pandey
Management Accounting by S.P Guptha
Fundamentals of Financial Management by S.N Maheshwari

WEBSITES:
www.mindlinks.org
www.wikipedia.org
www.ffs.com