EXECUTIVE SUMMARY

I work out my study on Cash Management in the Reliance Infrastructure Ltd,

Mumbai. The importance of Cash management in any industrial concern cannot be
overstressed. Under the present inflationary condition, management of Cash is
perhaps more important than even management of profit and this requires greatest
attention and efforts of the finance manager. It needs vigilant attention as each of its
components require different types of treatment and it throws constant attention on
exercise of skill and judgment, awareness of economic trend etc, due to urgency and
complicacy the vital importance of Cash.
The anti-inflationary measure taken up by the Government, creating a tight
money condition has placed working capital in the most challenging zone of
management and it requires a unique skill for its management. Today, the problem of
managing Cash has got the recognition of separate entity, so its study and
management is of major importance to both internal and external analyst to judge the
current position of the business concerns. Hence, the present study entitled “An
Analysis on Cash Management” has been taken up.

1
 1.1 INTRODUCTION
Cash is the important current asset for the operations of the business. Cash is
the basic input needed to keep the business running on a continuous basis; it is also
the ultimate output expected to be realized by selling the service or product
manufactured by the firm. The firm should keep sufficient cash, neither more nor
less. Cash shortage will disrupt the firm’s manufacturing operations while excessive
cash will simply remain idle, without contributing anything towards the firm’s
profitability. Thus, a major function of the financial manager is to maintain a sound
cash position.
Cash is the money which a firm can disburse immediately without any
restriction. The term cash includes coins, currency and cheques held by the firm, and
balances in its bank accounts. Sometimes near-cash items, such as marketable
securities or bank times deposits, are also included in cash. The basic characteristic of
near-cash assets is that they can readily be converted into cash. Generally, when a
firm has excess cash, it invests it in marketable securities. This kind of investment
contributes some profit to the firm.

Cash management is a marketing term for certain services offered

primarily to larger business customers. It may be used to describe all bank accounts

(such as checking accounts) provided to businesses of a certain size, but it is more

often used to describe specific services such as cash concentration, zero balance

accounting, and automated clearing house facilities. Sometimes, private bank

customers are given cash management services.

Cash Management Services Generally offered

The following is a list of services generally offered by banks and utilized by larger
businesses and corporations:

 Account Reconcilement Services: Balancing a checkbook can be a difficult

process for a very large business, since it issues so many checks it can take a
lot of human monitoring to understand which checks have not cleared and

2
 therefore what the company's true balance is. To address this, banks have
developed a system which allows companies to upload a list of all the checks
that they issue on a daily basis, so that at the end of the month the bank
statement will show not only which checks have cleared, but also which have
not. More recently, banks have used this system to prevent checks from being
fraudulently cashed if they are not on the list, a process known as positive pay.

 Advanced Web Services: Most banks have an Internet-based system which is

more advanced than the one available to consumers. This enables managers to

create and authorize special internal logon credentials, allowing employees to

send wires and access other cash management features normally not found on

the consumer web site.

 Armored Car Services: Large retailers who collect a great deal of cash may

have the bank pick this cash up via an armored car company, instead of asking

its employees to deposit the cash.

 Automated Clearing House: services are usually offered by the cash

management division of a bank. The Automated Clearing House is an

electronic system used to transfer funds between banks. Companies use this to

pay others, especially employees (this is how direct deposit works). Certain

companies also use it to collect funds from customers (this is generally how

automatic payment plans work). This system is criticized by some consumer

advocacy groups, because under this system banks assume that the company

initiating the debit is correct until proven otherwise.

 Balance Reporting Services: Corporate clients who actively manage their

cash balances usually subscribe to secure web-based reporting of their account

and transaction information at their lead bank. These sophisticated

3
 compilations of banking activity may include balances in foreign currencies,

as well as those at other banks. They include information on cash positions as

well as 'float' (e.g., checks in the process of collection). Finally, they offer

transaction-specific details on all forms of payment activity, including

deposits, checks, and wire transfers in and out, ACH (automated clearinghouse

debits and credits), investments, etc.

 Cash Concentration Services: Large or national chain retailers often are in

areas where their primary bank does not have branches. Therefore, they open

bank accounts at various local banks in the area. To prevent funds in these

accounts from being idle and not earning sufficient interest, many of these

companies have an agreement set with their primary bank, whereby their

primary bank uses the Automated Clearing House to electronically "pull" the

money from these banks into a single interest-bearing bank account.

 Lockbox services: Often companies (such as utilities) which receive a large

number of payments via checks in the mail have the bank set up a post office

box for them, open their mail, and deposit any checks found. This is referred

to as a "lockbox" service.

 Positive Pay: Positive pay is a service whereby the company electronically

shares its check register of all written checks with the bank. The bank

therefore will only pay checks listed in that register, with exactly the same

specifications as listed in the register (amount, payee, serial number, etc.).

This system dramatically reduces check fraud.

4
 Sweep Accounts: are typically offered by the cash management division of a

bank. Under this system, excess funds from a company's bank accounts are

automatically moved into a money market mutual fund overnight, and then

moved back the next morning. This allows them to earn interest overnight.

This is the primary use of money market mutual funds.

 Zero Balance Accounting: can be thought of as somewhat of a hack.

Companies with large numbers of stores or locations can very often be

confused if all those stores are depositing into a single bank account.

Traditionally, it would be impossible to know which deposits were from which

stores without seeking to view images of those deposits. To help correct this

problem, banks developed a system where each store is given their own bank

account, but all the money deposited into the individual store accounts are

automatically moved or swept into the company's main bank account. This

allows the company to look at individual statements for each store. U.S. banks

are almost all converting their systems so that companies can tell which store

made a particular deposit, even if these deposits are all deposited into a single

account. Therefore, zero balance accounting is being used less frequently.

 Wire Transfer: A wire transfer is an electronic transfer of funds. Wire

transfers can be done by a simple bank account transfer, or by a transfer of

cash at a cash office. Bank wire transfers are often the most expedient method

for transferring funds between bank accounts. A bank wire transfer is a

message to the receiving bank requesting them to effect payment in

accordance with the instructions given. The message also includes settlement

5
 instructions. The actual wire transfer itself is virtually instantaneous, requiring

no longer for transmission than a telephone call.

 Controlled Disbursement: This is another product offered by banks under

Cash Management Services. The bank provides a daily report, typically early

in the day, that provides the amount of disbursements that will be charged to

the customer's account. This early knowledge of daily funds requirement

allows the customer to invest any surplus in intraday investment opportunities,

typically money market investments. This is different from delayed

disbursements, where payments are issued through a remote branch of a bank

and customer is able to delay the payment due to increased float time.

In the past, other services have been offered the usefulness of which has diminished

with the rise of the Internet. For example, companies could have daily faxes of their

most recent transactions or be sent CD-ROMs of images of their cashed checks.

Cash management aims at evolving strategies for dealing with various facets of cash

management. These facets include the following:

 Optimum Utilization of Operating Cash

Implementation of a sound cash management program is based on rapid

generation, efficient utilization and effective conversation of its cash resources. Cash

flow is a circle. The quantum and speed of the flow can be regulated through prudent

financial planning facilitating the running of business with the minimum cash balance.

This can be achieved by making a proper analysis of operative cash flow cycle along

with efficient management of working capital.

 Cash Forecasting

6
 Cash forecasting is backbone of cash planning. It forewarns a business

regarding expected cash problems, which it may encounter, thus assisting it to

regulate further cash flow movements. Due to lack of cash planning results in

spasmodic cash flows.

 Cash Management Techniques:

Every business is interested in accelerating its cash collections and

decelerating cash payments so as to exploit its scarce cash resources to the maximum.

There are techniques in the cash management which a business to achieve this

objective.

 Liquidity Analysis:

The importance of liquidity in a business cannot be over emphasized. If one

does the autopsies of the businesses that failed, he would find that the major reason

for the failure was their inability to remain liquid. Liquidity has an intimate

relationship with efficient utilization of cash. It helps in the attainment of optimum

level of liquidity.

 Profitable Deployment of Surplus Funds

Due to non-synchronization of ash inflows and cash outflows the surplus cash

may arise at certain points of time. If this cash surplus is deployed judiciously cash

management will itself become a profit centre. However, much depends on the

quantum of cash surplus and acceptability of market for its short-term investments.

 Economical Borrowings

Another product of non-synchronization of cash inflows and cash outflows is

emergence of deficits at various points of time. A business has to raise funds to the

7
extent and for the period of deficits. The raising of funds at minimum cost is one of

the important facets of cash management.

 Cash flow analysis

The cash flow analysis is done with the help of cash flow statement. A cash
flow statement is a statement depicting changes in cash position from one period to
another. It is an important planning tool. Cash flow statement gives a clear picture of
the source of cash, the uses of cash and the net changes in cash. The primary purpose
of cash flow statement is to show that as to where from the cash to be acquired and
where to use them.
Utility of cash flow analysis
A Cash flow analysis is an important financial tool for the management. Its
chief advantages are as follows.
1. Helps in efficient cash management
Cash flow analysis helps in evaluating financial policies and cash position.
Cash is the basis for all operation and hence a projected cash flow statement will
enable the management to plan and co-ordinate the financial operations properly. The
management can know how much cash is needed from which source it will be
derived, how much can be generated, how much can be utilized.
2. Helps in internal financial management
Cash flow analysis information about funds, which will be available from
operations. This will helps the management in repayment of long-term debt, dividend
policies etc.,
3. Discloses the movements of Cash
Cash flow statement discloses the complete picture of cash movement. The
increase in and decrease of cash and the reasons therefore can be known. It discloses
the reasons for low cash balance in spite of heavy operation profits on for heavy cash
balance in spite of low profits.
4. Discloses success or failure of cash planning
The extent of success or failure of cash planning be known by comparing the
projected cash flow statement with the actual cash flow statement and necessary
remedial measures can be taken.

8
Purpose of Cash Management

Cash management is the stewardship or proper use of an entity’s cash

resources. It serves as the means to keep an organization functioning by making the
best use of cash or liquid resources of the organization.

The function of cash management at the U.S. Treasury is threefold:

1. To eliminate idle cash balances. Every dollar held as cash rather than used to
augment revenues or decrease expenditures represents a lost opportunity. Funds that
are not needed to cover expected transactions can be used to buy back outstanding
debt (and cease a flow of funds out of the Treasury for interest payments) or can be
invested to generate a flow of funds into the Treasury’s account. Minimizing idle cash
balances requires accurate information about expected receipts and likely
disbursements.

2. To deposit collections timely. Having funds in-hand is better than having accounts
receivable. The cash is easier to convert immediately into value or goods. A
receivable, an item to be converted in the future, often is subject to a transaction delay
or a depreciation of value. Once funds are due to the Government, they should be
converted to cash-in-hand immediately and deposited in the Treasury's account as
soon as possible.

3. To properly time disbursements. Some payments must be made on a specified or

legal date, such as Social Security payments. For such payments, there is no cash
management decision. For other payments, such as vendor payments, discretion in
timing is possible. Government vendors face the same cash management needs as the
Government. They want to accelerate collections. One way vendors can do this is to
offer discount terms for timely payment for goods sold.

9
 1.2 INDUSTRY PROFILE
The electricity sector in India had an installed capacity of 223.625 GW as of
April 2013 the world's fifth largest. Captive power plants generate an additional
34.444 GW. Non Renewable Power Plants constitute 87.55% of the installed capacity
and 12.45% of Renewable Capacity. 
In terms of fuel, coal-fired plants account for 57% of India's installed
electricity capacity, compared to South Africa's 92%; China's 77%; and Australia's
76%. After coal, renewal hydropower accounts for 19%, renewable energy for 12%
and natural gas for about 9%. As of January 2012, one report found the per capita
total consumption in India to be 778 kWh.
The electricity sector in India is predominantly controlled by the Government
of India's public sector undertakings (PSUs). Major PSUs involved in the generation
of electricity, several state-level corporations, such as Maharashtra State Electricity
Board (MSEB) are also involved in the generation of electricity. The interstate
distribution is managed by the state electricity board (SEB) and private companies .In
2010, the five largest power companies in India, by installed capacity, in decreasing
order, were the state-owned NTPC, state-owned NHPC, followed by three privately
owned companies: Tata Power, Reliance Power and Adani Power. The PowerGrid
Corporation of India is responsible for the inter-state transmission of electricity and
the development of national grid.
Generation
In India's effort to add electricity generation capacity over 2009–2011, both
central government and state government owned power companies have repeatedly
failed to add the capacity targets because of issues with procurement of equipment
and poor project management. Private companies have delivered better results.
Thermal Power
Installed thermal power capacity
The installed capacity of Thermal Power in India, as of 31 October 2012, was
140206.18 MW which is 66.99% of total installed capacity.
 Current installed base of Coal Based Thermal Power is 120,103.38 MW which
comes to 57.38% of total installed base.
 Current installed base of Gas Based Thermal Power is 18,903.05 MW which is
9.03% of total installed capacity.

10
  Current installed base of Oil Based Thermal Power is 1,199.75 MW which is
0.57% of total installed capacity.
The state of Maharashtra is the largest producer of thermal power in the country.
Hydro power 
India is one of the pioneering countries in establishing hydro-electric
power plants. The power plants at Darjeeling and Shimsha (Shivanasamudra) were
established in 1898 and 1902 respectively and are among the first in Asia.
The present installed capacity as of 31 October 2012 is approximately 39,291.40 MW
which is 18.77% of total electricity generation in India. The public sector has a
predominant share of 97% in this sector. .
Nuclear power 
As of 2011, India had 4.8 GW of installed electricity generation capacity using
nuclear fuels. India's Nuclear plants generated 32455 million units or 3.75% of total
electricity produced in India. India's share of nuclear power plant generation capacity
is just 1.2% of worldwide nuclear power production capacity, making it the 15th
largest nuclear power producer.
Renewable energy
Renewable energy in India is a sector that is still in its infancy.
As of December 2011, India had an installed capacity of about 22.4 GW of renewal
technologies-based electricity, about 12% of its total.  Renewable energy projects in
India are regulated and championed by the central government's Ministry of New and
Renewable Energy
Transmission
Transmission of electricity is defined as bulk transfer of power over a long
distance at high voltage, generally of 132kV and above. In India bulk transmission
has increased from 3,708ckm in 1950 to more than 165,000ckm today (as stated by
Power Grid Corporation of India). The entire country has been divided into five
regions for transmission systems, namely, Northern Region, North Eastern Region,
Eastern Region, Southern Region and Western Region. The Interconnected
transmission system within each region is also called the regional grid.
While the predominant technology for electricity transmission and distribution has
been Alternating Current (AC) technology, High Voltage Direct Current (HVDC)
technology has also been used for interconnection of all regional grids across the
country and for bulk transmission of power over long distances.

11
Distribution
Apart from an extensive transmission system network has developed to
transmit the power from generating station to the grid substations, a vast network of
sub transmission in distribution system has also come up for utilization of the power
by the ultimate consumers. As the T&D loss was not able to capture all the losses in
the net work, concept of Aggregate Technical and Commercial (AT&C) loss was
introduced. AT&C loss captures technical as well as commercial losses in the network
and is a true indicator of total losses in the system. High technical losses in the system
are primarily due to inadequate investments over the years for system improvement
works, which has resulted in unplanned extensions of the distribution lines,
overloading of the system elements like transformers and conductors, and lack of
adequate reactive power support.
The commercial losses are mainly due to low metering efficiency, theft &
pilferages. This may be eliminated by improving metering efficiency, proper energy
accounting & auditing and improved billing & collection efficiency. Fixing of
accountability of the personnel / feeder managers may help considerably in reduction
of AT&C loss. India's network losses exceeded 32% in 2010 including non-technical
losses, compared to world average of less than 15%. Both technical and non-technical
factors contribute to these losses, but quantifying their proportions is difficult. But the
Government pegs the national T&D losses at around 24% for the year 2011 & has set
a target of reducing it to 17.1% by 2017 & to 14.1% by 2022.

Subsidies and Funding of power infrastructure

Several state governments in India provide electricity at subsidized rates or
even free to some sections. This includes for use in agriculture and for consumption
by backward classes. The subsidies are mainly as cross-subsidization, with the other
users such as industries and private consumers paying the deficit caused by the
subsidized charges collected. Such measures have resulted in many of the state
electricity boards becoming financially weak.
India's Ministry of Power administers Rural Electrification Corporation
Limited and Power Finance Corporation Limited. These are central government
owned public sector enterprises provide loans and guarantees for public and private
electricity sector infrastructure projects in India.
Regulatory Authority - Role played by MERC

12
 India's central government and state governments jointly regulate electricity
sector in India. The Maharashtra Electricity Regulatory Commission (MERC) is the
State power sector regulator in Maharashtra. The Commission is recognized under
Section 82 of the Electricity Act, 2003, which assigns the following broad
responsibilities on the Commission:
 Safeguarding interests of the consumers and protect the financial viability of
the electricity utilities
 Tariff determination
 Promotion of competition, economy and efficiency in activities of the
electricity industry
 Ensuring optimum investments for efficient development of electricity sector
In addition to the responsibilities outlined above, there are certain points on which
special emphasis is laid. Those points are as follows:
1. Power procurement regulation and Intra-State Transmission System Development
 To regulate electricity purchase and procurement process of distribution
licensees, including the price at which electricity shall be procured from the
generating companies or licensees, or from other sources.
 Fixation of trading margin for intra-state electricity traders.
 Facilitate intra-State transmission and wheeling of electricity.
2. Licensing
 Issue licenses to persons seeking to act as transmission licensees, distribution
licensees, and electricity traders.
 Monitor enforcement of license conditions
3. Promotion of non-conventional energy generation
 Promote co-generation and generation of electricity from renewable sources of
energy
4. Setting ‘Performance of Standards’
 Specify and enforce standards with respect to quality, continuity and reliability
of service by Licensees, including setting time limits for service connection requests,
handling and disposal of various complaints filed by the consumers with the utilities,
etc.
The Commission provides a forum where all stakeholders — utilities, citizens, or
consumers — can take their grievances to be resolved consultatively and amicably,
through a transparent process.

13
The Commission conducts public hearings on Utilities’ ARR/APR submissions/Tariff
proposals and other issues of stakeholders’ concern. These hearings provide
consumers with an opportunity to voice their concerns as much as they provide a
forum for the utilities to present their case. Utilities are also directed by the
Commission to provide satisfactory responses to concerns expressed by the public
during these hearings.

The role of Distribution Licensee

Under Electricity Act, 2003, a Distribution Licensee (e.g. Reliance Energy) is
an organization which is authorized to operate and maintain a distribution system for
supplying electricity to the consumers in his jurisdiction.
A Distribution License is granted by the State Electricity Regulatory Commission
(e.g. MERC) in accordance with the appropriate licensing Regulations notified by the
Commission under Electricity Act, 2003. However, the Distribution Licensee is not
required to seek license to undertake trading in electricity.
Under the Electricity Act, the broad responsibility areas of the Distribution Licensee,
subject to the regulations applied by the Commission under various provisions of
Electricity Act 2003, cover:
 Development and maintenance of an efficient, coordinated and economical
distribution system in his area of supply
 To supply electricity on request to the premises in his area of supply, after
receiving application from the owner occupier of the premises
 Establishment of a forum for redressal of grievances of the consumers
 To recover charges for electricity supplied and seek a reasonable security as
approved by the Commission
 To meet the ‘Standards of Performance’ set by the Commission
 To furnish information related to his regulated business to the Commission, in
accordance with the relevant regulations issued by the Commission from time to time
 To comply with all relevant Acts, regulations and other conditions specified
by the State Regulator.

1.3 COMPANY PROFILE

About Reliance Group

14
 India is a booming trillion dollar economy; an overwhelmingly young country,
with more than 55 per cent of its population below the age of 30. One of the fastest
growing GDPs in the world, complemented by the energy, dynamism ambition of its
youth, India is truly set to stake its rightful position on the global arena.
The Reliance Group strongly believes that it has a pivotal role to play in shaping the
destiny of our great nation. Through its various consumer-facing businesses, the
group provides a robust platform to every Indian to realize his potential and shape
his/her destiny through its state-of-the art products and services. A seven year old
group that ranks among India’s leading business houses, it has a dominant presence
across a wide array of high-growth consumer-facing businesses ranging from telecom
and financial services to infrastructure, power, entertainment and healthcare, touching
the life of almost every Indian.
Through different companies, the group positively influences the lives of over 241
million customers i.e. one in every 10 young and aspiring Indians – every single day
across 600000 villages and 24,000 towns, It enjoys the unparalleled trust, faith and
confidence of nearly 10 million shareholders, the largest such family in India, perhaps
even in the world! It is one of the largest employers in the country with a young,
highly-trained and motivated 110000 –strong workforce. At the Reliance Group, all
our efforts are focused towards two goals: building a great enterprise for its
stakeholders and a great future for our country.
Reliance Group Companies
Reliance Communication
 Reliance Telecom
 Reliance Communications Infrastructure
 Reliance Globalcom
 Reliance BPO
 Reliance Infratel
 Reliance Digital TV
 Reliance Tech Service
Reliance Capital
 Reliance Capital Asset Management
 Reliance Life Insurance
 Reliance Commercial Finance and Reliance Home Finance
 Reliance Securities

15
  Reliance Money
 Reliance General Insurance
 Reliance Exchange Next
 Indian Commodity Exchange
 Reliance Spot Exchange
 Reliance Equity Advisors
 Reliance Assets Reconstruction
 Reliance Venture Asset Management
 Quant Capital
Reliance Infrastructure Ltd
 Power
 Engineering, Procurement and Construction (EPC)
 Infrastructure
Reliance Power
Reliance Entertainment

Historic background of the Reliance Infrastructure Ltd.

Bombay Suburban Electric Supply Ltd. was established in 1929. Bombay Suburban
Electric Supply Ltd. was granted a license, termed “The Bombay Suburban Electric
License, 1926”, by the Government of Maharashtra under Section 3 of the erstwhile
Indian Electricity Act 1910. The said License was thereafter amended from time to
time. The name of the Company “Bombay Suburban Electricity Supply Ltd.” was
changed to BSES Ltd. On December 23, 1992 and the year was 2002. India was
gearing up to usher-in a new era of development by opening doors to the private
sector. This was the time when we, at Reliance Energy, took over Bombay Suburban
Electric Supply Ltd. (BSES Ltd.) and set this evolution into motion. The name was
again changed to Reliance Energy Ltd. on February24, 2004, and further on 28th
April 2008 was changed to Reliance Infrastructure Ltd.

Basic Information

16
 A key constituent of the Reliance Anil Dhirubhai Ambani Group, India’s third
largest business houses. Reliance Infrastructure Ltd is India’s foremost private sector
utility engaged in the generation, transmission and distribution of electricity. Reliance
Infrastructure Limited, a part of Reliance Group, is India's largest infrastructure
company with total revenues of about Rs. 28,270 core as on March 31, 2011.It ranks
among India’s top listed private companies on all major financial parameters
including assets, sates, and profit and market capitalization.
Reliance Infrastructure Limited is India’s leading utility company having presence
across the value chain of electricity business i.e. Generation, Transmission,
Distribution, EPC and Trading and also the largest infrastructure company by
developing projects in all high growth areas in infrastructure sector i.e. Roads,
Highways, Metro Rails, Airports and Specialty Real Estate.

Product
Reliance Infrastructure Ltd presence spans across three verticals:
• Engineering, Procurement and Construction
EPC offers a single point solution to the execution of power plants including project
engineering, procurement, construction & commissioning for its clients. The world of
tomorrow will feature abundant energy that will spark a million smiles and dreams.
Reliance Infrastructure Ltd EPC division is ushering this energy revolution with
power plant projects. Along with full service project advisory capabilities, Reliance
Infrastructure Ltd manages power plants on a turnkey basis and provides industry
specialist services such as fuel management advice and fiscal advice. The income of
the division was Rs 3609 crore (US$ 809 million) and order book position of over Rs
29,635 crore (US$ 6.6 billion) as on March 31, 2011.
• Energy
Reliance Infrastructure Ltd’s core competency in energy extends to generation,
transmission, distribution and trading. This comprehensive sphere of influence
extends Reliance Infrastructure Ltd’s vision of a highly developed India within
Reliance Infrastructure Ltd’s realms. Reliance Infrastructure Ltd distributes more than
36 billion units of electricity to 30 million consumers in Mumbai, Delhi, Orissa and
Goa across an area that spans 124300 sq. kms and generates 941 MW of electricity
from Reliance Infrastructure Ltd’s power stations. Reliance Infrastructure Ltd’s

17
transmission division is developing 5 transmission projects, with total project outlay
of Rs 7,000 crore.
• Infrastructure
Reliance Infrastructure Ltd has a significant presence in the construction of roads,
metros, airports and real estate. Infrastructure is decidedly the most visible and
important form of development in a nation. Reliance Infrastructure Ltd signifies this
with its 11 road projects of 970 kms worth about Rs 12,000 crore. Reliance
Infrastructure Ltd is currently implementing 3 metro rail projects in Mumbai and
Delhi worth around Rs 16,000 crore (US$ 3.4 billion)

Vision Mission and Values

Vision
To be amongst the most admired and most trusted integrated utility companies in the
world, delivering reliable and quality products and services to all customers at
competitive costs, with international standards of customer care - thereby creating
superior value for all stakeholders.
To be set new benchmarks in standards of corporate performance and governance
through the pursuit of operational and financial excellence, responsible citizenship,
and profitable growth.
Mission - Excellence in Energy
 To attain global best practices and become a world-class utility.
 To provide uninterrupted, affordable, quality, reliable and clean power to
millions of customers.
 To achieve excellence in service, quality, reliability, safety and customer care.
 To earn the trust and confidence of all customers and stakeholders and by
exceeding their expectations, make the company a respected household name.
 To work with vigour, dedication and innovation, towards achieving the
ultimate goal of total customer satisfaction.
 To consistently achieve high growth with the highest levels of productivity.
 To be a technology driven, efficient and financially sound organization.
 To be a responsible corporate citizen, nurturing human values and concern for
society, the environment and above all, people.
 To contribute towards community development and nation building.

18
  To promote a work culture that fosters individual growth, team spirit and
creativity to overcome challenges and attain goals.
 To encourage ideas, talent and value systems.
 To uphold the guiding principles of trust, integrity and transparency in all
aspects of interactions and dealings.
Values
We believe that any business conduct can be ethical only when it rests on the nine
core values of Honesty, Integrity, Respect, Fairness, Purposefulness, Trust,
Responsibility, Citizenship and Caring. These values are not to be lost sight of by
anyone at RELIANCE INFRASTRUCTURE LIMITED under any circumstances
irrespective of the goals that are intended to be achieved. To us, means are as
important as the ends.

QUALITY POLICY
 Reliance Energy Limited is committed to be amongst the most admired &
trusted integrated Electric Supply Utility Companies in the world.
 Reliance Energy Limited shall deliver reliable and quality products and
services to all customers at competitive costs, with international standards of
customer care – thereby creating superior value for all stakeholders.
 Reliance Energy Limited is committed to comply with requirements and
continually improve the effectiveness of the Quality Management System as
per ISO 9001:2000.
 Reliance Energy Limited shall set new benchmarks in standards of corporate
performance and governance through the pursuit of operational /
environmental and financial excellence, responsible citizenship, and profitable
growth.

QUALITY OBJECTIVES
The quality objectives of Reliance Energy Limited are to:
 To attain global best practices and become a world-class utility.
 To provide uninterrupted, affordable, quality, reliable and clean power, to
millions of customers.
 To achieve excellence in service, quality, reliability, safety and customer care.

19
  To earn the trust and confidence of all customers and stakeholders, exceeding
their expectations, and make the company a respected household name.
 To work with vigour, dedication and innovation, with total customer
satisfaction as the ultimate goal.
 To consistently achieve high growth with the highest levels of productivity.
 To be a technology driven, efficient and financially sound organization.
 To be a responsible corporate citizen nurturing human values and concern for
society, the environment and nation building.
 To promote a work culture that fosters individual growth, team spirit and
creativity to overcome challenges and attain goals.
 To encourage ideas, talent and value systems.
 To uphold the guiding principles of trust, integrity and transparency in all
aspects of interactions and dealings.

Competitive Analysis
The Supreme Court’s judgment dated July 8, 2008 allows The Tata Power Company
to supply power to any and all consumers in retail in the entire city of Mumbai
(leaving only some central suburbs, being served presently by MSEDCL). This
development has caused competition to emerge in retail supply in the license areas of
BEST and Reliance Infrastructure Ltd. The issue of competition materially impacts
the Business forecasts of Reliance Infrastructure Ltd over the forthcoming MYT
Period.

20
 4 OBJECTIVES OF THE STUDY
 Primary Objective:
 To analyze the cash management of Reliance Infrastructure Ltd.

 Secondary Objective:
• To find out the liquidity position of the concern through ratio analysis.
• To study the growth of Reliance Infrastructure Ltd in terms of cash flow
statement.
• To analyze the cash collection of Reliance Infrastructure Ltd.

21
 4 RESEARCH METHODOLOGY
4.1 RESEARCH
Research is a process in which the researchers wish to find out the end result for a
given problem and thus the solution helps in future course of action. The research has
been defined as “A careful investigation or enquiry especially through search for new
facts in branch of knowledge”

4.2 RESEARCH DESIGN

The research design used in this project is Analytical in nature the procedure using,
which researcher has to use facts or information already available, and analyze these
to make a critical evaluation of the performance.

4.3 DATA COLLECTION

 Primary Sources
1. Data are collected through personal interviews and discussion with
Departmental Finance- Executive.
2. Data are collected through personal interviews and discussion with Sr. Finance
Manager.
 Secondary Sources
1. From the annual reports maintained by the company.
2. Data are collected from the company’s website.
3. Books and journals pertaining to the topic.
4.4 TOOLS USED IN THE ANALYSIS
 Cash flow statement
 Ratio analysis.
 Analysis of Cash Collection
4.5 Period of study
The present study has taken into account Five years viz., 2009-2010 to 2011-2013.

22
5 Data Analysis and Interpretation
5.1 Cash Flow Analysis

5.1.1 Cash flow from Operating Activities:

The fund from operation is also to differ from every year.

In 2009 the cash flow from operating activities reached Rs.892.64 crores

In 2010 cash flow from operating activities was decrease by Rs.6.10.44 crore as there
was increase in inventories, debtors and advance to creditors.

In 2011 it became positive to Rs.1613.06 crores as level of stock of inventories was

reduced, to control outflow of cash.

In 2012 again there were huge stockings of inventories, and advance increase in trade
and others payable, made operating cash flow negative to Rs.446.12 crores.

23
 Cash Flow
2000

1500

1000
cash flow

500
Cash Flow

-500

-1000
2009 2010 2011 2012

Year

Note: All figures in the above paragraph are rounded off to nearest five thousand
crore.

5.1.2 Cash flow from Investing Activities:

The investing out flow of the company is to be increased for year after year.

In 2009 the company made investment of Rs.992.67 crores.

In 2010 it restricted its investment, the net cash flow from investing activity was
positive of Rs. 512.35 crores.

24
In 2011 it further purchased Fixed Assets, which increased its investment to
Rs.2449.58 crores, by issue of shares, and taking Term Loans.

In 2012 it further purchased Fixes Assets, by taking Term Loans which raised its
investment to Rs.3097.45 crores.

Cash Flow
1000

-1000
cash flow

Cash Flow
-2000

-3000

-4000
2009 2010 2011 2012

Year

Note: All Figure in this chart represent out flow of cash. All figures in the above
paragraph are rounded off to nearest thousand crore.

5.1.3 Cash flow from Financing Activities:

In 2009 cash in-flow from financing activities was Rs.263.16 crores

In 2010 as unsecured loans were repaid it reduced the inflow of financing activity to
Rs.1078.98 crores.

In 2011 it reached to Rs.905.76 crores.

In 2012 company raised additional capital, which raised its inflow to Rs.3858.58
crores.

25
 Cash Flow
5000
4000
3000
cash flow

2000
1000 Cash Flow

0
-1000
-2000
2009 2010 2011 2012
Year

Note: All Figure in this chart represent in-flow of cash. All figures in the above
paragraph are rounded off to nearest thousand.

5.1.4 Net Cash Flow Generated:

The cash inflow of the company is to be increased for year after year.

In 2009 net cash In-flow reached to Rs 251.01 crores

In 2010 net Cash In-flow was Rs.301.82 crore.

In 2011 in reached to Rs. 371.06 crore

In 2012 in spite of huge Operating deficit of Rs.446.12 crores, it showed a positive

balance of Rs.686.07 crores.

26
 Cash Flow
800

600
cash flow

400
Cash Flow

200

0
2009 2010 2011 2012
Year

Note: All figures in this chart represent net in-flow of cash. All figures in the above
paragraph are rounded off to nearest two hundred crore.

Analysis of Flow of Cash:

As there is constant increase in scale of production, the cash flow from operating
activity is changing from one year to another. As more stock is accumulated for
increasing production, more advance in made to suppliers; the more negative is the
cash flow from operating activities in that year.

The company is constantly making investment in fixed assets to increase output,

investment in shares of other companies, and other activities. It is a good sign of
future growth.

The company is able to finance it operations by getting finance from various financial
institutions, by way of subsidy from government, and by issuing shares of the
company. The company is able to arrange finance from different sources as and when
required at good terms.

There in constantly an upward trend in the net cash flow over the years, in spite of
huge negative flow in operating activities in some of the years. It indicates than the
company is able to cope up with different situations in a good manner in the proper
span of time.

This shows its ability to grow fruitfully in the coming future with proper decisions at
the required time.

27
 5.2 RATIO ANALYSIS

5.2.1 Current Assets to Fixed Assets Ratio

The formula for the ratio is Current Assets

Fixed Assets

Current Assets to Fixed Assets Ratio

Increase/
Decrease
YEAR RATIO

2009 – 10 2.98:1

2010 – 11 2.65:1 -0.33

2011 – 12 2.95:1 0.30

. Inference:

The level of Current Assets can be measured by using this Current Asset to
Fixed Assets Ratio. The level has been fluctuating every year. The level of the
current assets can be measured by relating current assets to fixed assets.

There are three policies:-

1) conservative current assets policy:

28
 CA/FA is higher. It implies greater liquidity and lower risk.

2) aggressive current assets policy:

CA/FA is lower; it implies higher risk and poor liquidity.

3) moderate current assets policy:

CA/FA ratio falls in the middle of conservative and aggressive policies.

2.8

Current Assets to Fixed

Assets Ratio

2.6

2.4
09-'10 10-'11 11-'12

5.2.2 Current Assets to Total Assets Ratio

The formula for the ratio is Current Assets

Total Assets

Current Assets to Total Assets Ratio

Increase/
Decrease
YEAR RATIO

2009 - 10 0.62:1

2010 - 11 0.74:1 0.12

2011 - 12 0.81:1 0.07

Inference:
 The Table shows the Current Assets to Total Assets ratio of the company,
which registered a fluctuating trend throughout the study period. This ratio
varied from 0.62 to 0.81 times during the study. The Current Assets to Total

29
 Assets Ratio implies that RELIANCE INFRASTRUCTURE LTD is
maintaining a considerable level of Current Assets in proportion to Total
Assets. The relative liquidity of the firm’s assets structure is measured by
current to fixed assets or current asset to total asset ratio. The greater this ratio,
the less risky as well as the less profitable will be the firm and vice versa.

0.8

0.6
C urrent Assets to Total
A ssets Ratio
0.4

0.2

0
09-'10 10-'11 11-'12

5.2.3 Inventories to Current Assets Ratio

The formula for the ratio is Inventories

Current Assets

Inventories to Current Assets Ratio

Increase/
Decrease
YEAR RATIO

2009 – 10 0.02:1

2010 – 11 0.02:1

2011 – 12 0.01:1 -0.01

Inference:

30
 From the table it is known that the Inventories to Current Assets Ratio also
register a fluctuating trend during the entire study period.

The average ratio is 0.02 times and thus it is found that the investment in
inventories (being one of the important Current Assets) is kept at the considerable
level.

0.02
0.02
0.02
0.01
0.01
Inventories to Current
0.01
Assets Ratio
0.01
0.01
0
0
0
09-'10 10-'11 11-'12

5.2.4 Sundry Debtors to Current Assets Ratio

The formula for the ratio is Sundry Debtors

Current Assets

Sundry Debtors to Current Assets Ratio

Increase/
Decrease
YEAR RATIO

2009 – 10 0.28:1

2010 – 11 0.30:1 0.02

2011 – 12 0.20:1 -0.10

Inference:

31
 From the table the Sundry Debtors to Current Assets Ratio shows a fluctuating
trend throughout the study period from 2009-10 to 2011-12. Hence it implies the
credit policy followed by RELIANCE INFRASTRUCTURE LTD is aggressive.

0.3

0.25

0.2

Sundry Debtors to Current

0.15 Assets Ratio

0.1

0.05

0
09-'10 10-'11 11-'12

5.2.5 Loans and Advances to Current Assets Ratio

The formula for the ratio is Loans and Advances

Current Assets

Loans and Advances to Current Assets Ratio

Increase/
Decrease
YEAR RATIO

2009 – 10 0.56:1

2010 – 11 0.55:1 -0.01

2011 – 12 0.52:1 -0.03

Inference:

From the table it is noted that the Loans and Advances to Current Assets Ratio
have registered a fluctuating trend.

32
 It implies that half positions of the Current Assets are kept in for Loans and
Advances; thereby it is found that RELIANCE INFRASTRUCTURE LTD value of
Loans and Advances is considerable.

0.56

0.55

0.54

Loans & Advances to

0.53
Current Assets Ratio

0.52

0.51

0.5
09-'10 10-'11 11-'12

5.2.6 Cash to Current Assets Ratio

The formula for the ratio is Cash

Current Assets

Cash to Current Assets Ratio

Increase/
Decrease
YEAR RATIO

2009 – 10 0.03:1

2010 – 11 0.02:1 -0.01

2011 – 12 0.03:1 0.01

Inference:

The table shows the details of Cash to Current Assets Ratio and registered a
fluctuating trend throughout the study period from 2009-10 to 2011-12.

Hence we find that RELIANCE INFRASTRUCTURE LTD had maintained a

moderate level of cash in proportion to Current Assets.

33
 0.03

0.02

Cash to Current Assets Ratio

0.01

0
09-'10 10-'11 11-'12

5.2.7 Cash to Working Capital Ratio

The formula for the ratio is Cash

Working Capital

Cash to Working Capital Ratio

Increase/
Decrease
YEAR RATIO

2009 – 10 0.06:1

2010 – 11 0.16:1 0.10

2011 – 12 0.09:1 -0.07

Inference:

The Cash to Working Capital Ratio registered a fluctuating trend during the
study period this is noted from the table. It was 0.06 times in 2009-10, which sharply
increased to 0.16 times in the next year and later for the following years it is
fluctuating.

Hence it is found that 9% of the Working Capital ratio is managed by using

the cash & bank balance available in the company. The policy regard financing the

34
Working Capital in RELIANCE INFRASTRUCTURE LTD can be said as aggressive
policy.

0.2

0.15

0.1 Cash to Working Capital Ratio

0.05

0
09-'10 10-'11 11-'12

5.2.8 Cash to Sales Ratio

The formula for the ratio is Cash

Sales

Cash to Sales Ratio

Increase /
Decrease
YEAR RATIO

2009 – 10 0.03:1

2010 – 11 0.04:1 -0.01

2011 – 12 0.04:1

Inference:

This is one of the important ratios of controlling cash. A study of cash to sales
ratio will provide a deep insight into the cash balances held in the concerns.

Evident from the table shows Cash to Sales registered a maintaining trend
throughout the study period. The average cash to sales ratio is 0.04 times and which
indicates that only 0.4% of sales has been maintained as cash with the business.

35
 0.04

0.03

0.02 Cash to Sales Ratio

0.01

0
09-'10 10-'11 11-'12

5.2.9 Cash Ratio

The formula for the ratio is Cash

Current liabilities

Cash Ratio

Increase /
Decrease
YEAR RATIO

2009 – 10 0.05:1

2010 – 11 0.03:1 -0.02

2011 – 12 0.05:1 0.02

Inference:

From the table it is noted that the cash position of the RELIANCE
INFRASTRUCTURE LTD is satisfactory.

It is found that the cash required to meet out the current liabilities is
maintained at a normal level. Hence, it shows that RELIANCE INFRASTRUCURE
LTD follows an average policy.

36
 0.05
0.05
0.04
0.04
0.03
0.03 Cash Ratio
0.02
0.02
0.01
0.01
0
09-'10 10-'11 11-'12

5.2.9 Current Ratio

The formula for the ratio is Current Assets

Current liabilities

Current Ratio

Increase /
Decrease
YEAR RATIO

2009 – 10 1.81: 1

2010 – 11 1.17: 1 -0.64

2011 – 12 1.50: 1 0.33

Inference:

This ratio is an indicator of the firm’s commitment to meet its short – term
liabilities.
From the table it is clear that the Current Ratio of RELIANCE
INFRASTRUCTURE LTD has been fluctuating from the starting of the study period,
later for last year it has been decreasing; hence the Current Ratio is quite satisfactory.

Thus the Current Ratio shows that the company has sufficient funds to meet its
short-term obligations.

37
 2

1.5

1 Current Ratio

0.5

0
09-'10 10-'11 11-'12

5.2.10 Liquidity Ratio

The formula for the ratio is Liquid Assets

Current liabilities

Liquidity Ratio

Increase /

Inference: Decrease
YEAR RATIO

This 2009 – 10 1.77: 1 ratio helps the

management to 2010 – 11 1.15: 1 -0.62 measure short-
term solvency. 2011 – 12 1.48: 1 0.33 The ideal
liquid ratio is 1:1From the
table it is clear that
RELIANCE INFRASTRUCTURE LTD liquid ratio is more than the ideal ratio
during the starting of the study period and later in 2009 - 10 it had reduced slightly,
yet for the rest of the period current liabilities were fully secured by liquid assets
because the liquid assets were more than the current liabilities and hence the
company’s liquidity is satisfactory.

38
 2

1.5

1 Liquidity Ratio

0.5

0
09-'10 10-'11 11-'12

5.2.11 Working Capital Turnover Ratio

The formula for the ratio is sales

Working Capital

Working Capital Turnover

Increase /
Decrease
YEAR RATIO

2009 – 10 1.81: 1

2010 – 11 4.01: 1 -2.20

2011 – 12 2.34: 1 1.67

Inference:

This ratio indicates whether Working Capital has been effectively utilized in
making sales or not.

From the table it is noted that Working Capital had some fluctuation in the
middle of the study period, yet the company was able to increase it in the later years.

Hence the turnover indicates that RELIANCE INFRASTRUCTURE LTD had

utilized its Working Capital efficiently and the company can also try to work on this
to get more effective values.

39
 4.5

3.5

2.5
Working Capital turnover
2 Ratio

1.5

0.5

0
09-'10 10-'11 11-'12

5.2.12 Inventories Turnover Ratio

The formula for the ratio is Cost of Goods Sold

Average Stock

Inventories Turnover

YEAR RATIO Increase /

Decrease

2009 – 10 59.45

2010 – 11 59.11 -0.34

2011 – 12 57.88 -1.23

Inference:

This ratio indicates whether investment in inventory is efficiently used or not

and whether the investment is within proper limits.

From the table it is found that the Inventory turnover Ratio of RELIANCE
INFRASTRUCTURE LTD had some fluctuations in the starting of the study period
then it had a growth in it.

Hence the efficiency of inventory control in RELIANCE INFRASTRUCTURE

LTD shows a satisfactory position.

40
59.5

59

58.5

Inventories tor Ratio

58

57.5

57
09-'10 10-'11 11-'12

5.3.13 Debtors Turnover Ratio

The formula for the ratio is Sales

Sundry Debtors

Debtors Turnover

Increase /
Decrease
YEAR RATIO

2009 – 10 2.93: 1

2010 – 11 1.90: 1 -1.03

2011 – 12 3.92: 1 2.02

Inference:

This is one of the techniques employed by the company with regard to the
collection of the receivables through effective management of collection policy with
the help of factoring services. Higher ratio is favorable.
From the table it shows that the Debtors’ turnover Ratio had satisfactory
increase in the starting of the study period. However, in middle of the study period it
had slight fluctuations, the company was able to raise it in the next year. This ratio is
important for calculation of debtor’s collection period.

41
 4

2 Debtors turnover Ratio

0
09-'10 10-'11 11-'12

5.2.14 Debt Collection Period Ratio

The formula for the ratio is Days in a Month

Sundry Debtors turnover

Debt Collection Period Ratio

Increase /
Decrease
YEAR RATIO

2009 – 10 124.52

2010 – 11 192.36 67.84

2011 – 12 93.06 -99.30

Inference:

This ratio indicates the extent to which the debts have been collected in time.
It gives the average debt collection period.

RELIANCE INFRASTRUCTURE LTD use this ratio to find out whether their
borrowers are paying on time. From the table it is found that throughout the study
period the collection period is fluctuating and is within the average. A low ratio may
be an indication of long credit period, or slow realization from debtors.

42
200

150

Debt Collection Period

100 Ratio

50

0
09-'10 10-'11 11-'12

5.3 Collection Analysis

5.3.1 Analysis of Total collection Receipts

Collection 2009 2010 2011 2012 2013

43
 Avenues
Drop Boxes 5.17 5.09 4.84 4.15 3.65
Internet 11.98 10.83 11.04 10.33 11.78
REL Counter 66.03 66.88 66.25 67.09 67.16
Bank Branches 14.48 14.36 14.17 13.64 12.56
Cheque By Mail - - - - -
ECS 1.57 1.72 1.68 1.54 1.53
VDS 0.01 0.01 0.01 0.01 0.01
Other Outlets 0.76 1.10 2.01 3.25 3.31
Total 100.00 100.00 100.00 100.00 100.00
Note: Above fig. in percentage.

Inference:
Reliance’s own collection counter where they collect cheques and cash
generates around 65% to 70% combined all collection over a period of time.

So we can see that Reliance own collection centre is the most important avenues to
collection. It also reveals efficiency of reliance collection department.

Internet usage has remain the same for every year, there has no effect of
change in total receipt of collection and also consumer have started using different
mode which are more convenient to them like drop boxes facilities and easy bills
outlets . The usage of Drop boxes and cheque by mail for making bill payment has
decreases significantly over a period of time with decreases in total receipt of
collection, Drop boxes cheque collections has decreased from 5.17% in 2009-10 to
3.65% in 2008-2009.

We can see that usage of easy bill outlets, pay point and suvidha outlets has
increased from 0.76% in 2009 -2010 to 3.31% in 2012-13.

The total bills collected during 2011-2012 and 2012-13 were 22,948,502 and
22,515,029 respectively.

5.3.2 Analysis of Total Amount of Collection

Collection Mode Wise 2012 % 2013 %

Drop Box 24778 4.96 23364 4.46
Internet 39538 7.92 48617 9.28
REL Counter Cash 128321 25.70 141583 27.01
REL Counter Cheques 241765 48.43 246449 47.02

44
 Bank Branches 49450 9.90 47768 9.11
Cheques by Mail 20 0.00 16 0.00
ECS 8523 1.71 9083 1.73
VDS 141 0.03 168 0.03
Easy Bill outlets 3047 0.61 1751 0.33
Pay Point 1855 0.37 3084 0.59
Suvidhaa Outlets 1816 0.36 2247 0.43
Total 499254 100.00 524130 100.00

Inference:
Reliance infrastructure Ltd collects an amount of Rs. 499254 and Rs. 524130
for the year 2011-2012 and 2012-2013 respectively. There has about 73% to 76% of
collection through reliance own counter out of total collection.

Even 45% to 50% of collection is made by Reliance Counter Cheque collection

avenues. This shows efficiency of Reliance Own Cash Collection Department

Internet and other avenues usage has increased year by year. These represent
consumer have started using different mode which are more convenient to them.

Collection
9.90 Mode Wise
7.92 2012

1.71 0.03 0.61 0.37

4.96 0.36
0.00

25.70

48.43

Drop Box Internet REL Counter REL cheques

Bank Branches Cheques by Mail ECS VDS
Easy Bill outlets Pay Point Suvidhaa Outlets

45
 Collection mode wise 2013
9.28
9.11

0.59 0.43
1.73 0.03 0.33 4.46
0.00

27.01

47.02

Drop Box Internet REL Counter REL cheques

Bank Branches Cheques by Mail ECS VDS
Easy Bill outlets Pay Point Suvidhaa Outlets

46
 6. FINDINGS

 The cash management of RELIANCE INFRASTRUCTURE LTD has been

working well in the organization.

 We have seen in spite of deficit in operating cash flow, the company is able
keep a growing trend to its net in-flow of cash which in of good sign. The
financial managers have made good decisions as and when required to
maintain a proper balance in different financial matters.
 The cash inflow and outflow of cash flow statement have a cash balance will
be increased 2 times when compared to last year balance.

 If this increasing profit and cash in-flow trends continue over time then the
company can fulfill its vision well ahead of time.

 Financial reports contain a lot of information. The main objective of financial

analysis is to sort through that information to find useful and relevant data in
analyzing a business. Some ratios help analyze the cooperative’s financial
performance and cash flow analysis.

 There is satisfactory performance of all ratios of Reliance Infrastructure Ltd.

 There are various projects still under process which result in low debt
collection ratio of the company
 There has been decreased in total receipt in collection since the year 2009 due
to open access policy which was allowed by MERC from the year 2009. The
difference between every year show customer change over to other
 There has been increased in total amount of collection since the last year due
to cross subsidy charges levied on the change over consumer.
 There has more focus on bill collection therefore there are various kinds of
avenues provided by Reliance Infrastructure Ltd. For the consumer for
consumption bill collection.

47
 7. CONCLUSION

The Cash Management Analysis done on the financial position of the

company has provided a clear view on the activities of the company. The use of the
ratio analysis, Cash Flow Statement, collection analysis and other accounting and
financial management helped in this study to find out the financial soundness of the
company. After doing the Ratio and Cash-flow Analysis of the company I came to the
conclusion that, since the company is still in its growing stage so there was many ups
and downs in the ratios and flow of cash.

This project was very useful for the judgment of the financial status of
the company from the management point of view. This evaluation proved a great deal
to the management to make a decision on the regulation of the funds to increase the
sales and bring profit to the company.

Before I conclude I wish to convey my thankfulness in regard to the

training given to me in RELIANCE INFRASTRUCTURE LTD. It gave me extreme
satisfaction and practical knowledge of the financial activities carried out in the
company. The kindness, attention, and immense co-operation extended to me buy all
the officials in the company made my project easy and comfortable. Really it was a
very pleasant experience in RELIANCE INFRASTRUCTURE LTD.

48
 8. LIMITATIONS OF THE STUDY

 One of the major limitations of this project is that I couldn’t get the separate
financial data of energy division of Reliance Infrastructure Ltd.
 The study is limited to eight weeks therefore I couldn’t learn much detail
about the project.
 I couldn’t get the data regarding expenditure as real values are confidential.
 The study does not take into account the inflation.
 The study takes into account only the quantitative data and the
qualitative aspects were not taken into account
 Due to the various department of Finance Department, it is difficult
to gather information.

49
 BIBILIOGRAPHY

BOOKS:

 Financial Management by Prasana Chandra.

 M.Y Khan- P.K Jain, Management Accounting, Third edition, Tata Mc
Graw-Hill Publishing co. Ltd

WEBSITE:

 www.rinfra.com
 www.google.com

50