A

SUMMER TRAINING PROJECT REPORT

on

Understanding the activity of Finance and Accounts Departmentof

SANDHAR AUTOMOTIVE,
GURUGRAM.

Submitted for partial fulfillment of requirement for the award of degree

Of
Master of Business Administration
Of
Chandigarh Business School of Administration
Landran(Mohali)
Session 2017-2019

By
Ayush Sharma
1723506
MBA III semester

Under the supervision of

Mrs. Parinita Malhotra

Assistant Professor, Chandigarh Business School of Administration

1
DECLARATION

I hereby declare that the project report titled “Understanding the activity of finance and
account department” submitted for the Degree of Master of Business Administration , is my
original work and the project report has not formed the basis for the award of any degree,
diploma, associate-ship, fellowship or similar other titles. It has not been submitted to any
other University or Institution for the award of any degree or diploma.

(Signature of Student)

Ayush Sharma
Chandigarh Business School of Administration

Date:
Place: Mohali

2
CERTIFIACATE BY COMPANY

3
CERTIFICATE BY GUIDE
It is certified that MrAyush Sharma is a student of Chandigarh Business School of
Administration,Landran. His University Roll No. is 1723506. He has completed his project
work titled “Understanding the activity of finance and account department” of company
under my guidance. This project fulfills the requirement of the curriculum prescribed by
Chandigarh Business School Administration, Landran for the said course.

I recommend this project work for evaluation and consideration for the award of degree to the
student.

Supervisor’s Signature:

Supervisor’s Name: Mrs. Parinita Malhotra

Supervisor Designation: Assistant Professor, Chandigarh Business School of
Administration.

4
ACKNOWLEDGEMENT

Iam feeling a great sense of satisfaction by producing research. This is based on practical
summer training at Sandhar Automotive Company, Gurgaon. This time and space I express
heartfelt gratitude and acknowledge to those who helped me in the completion of training as
well as encoring the documentation of thesis.

My college “CHANDIGARH GROUP OF COLLEGE” a power house of my all energy

and effort which has given me an opportunity to work and learn at prestigious organization
that is SANDHAR AUTOMOTIVE COMPANY. I am acknowledging all my sincere
gratitude to my college.

Certainly this project would not have been done without driving the valuable ideas from
various resources.

Here I want to acknowledge my sincere gratitude to my summer training On the job\ training
Head Mr. Apoorva Jain ( Manager finance and account department)SandharAutomative
Company , Gurgaon for providing professional, target oriented, and practical corporate
habitat. His directions and guidance are truly worthwhile in all business environments. As he
is a hard task master with a very caring attitude, routed us to bring business as well as learn
how to bring business. He also helped me in the documentation of my project thesis.

I would like to thank Mr. Apoorva Jain ( Manager finance and account department)for
giving me all informational support on a daily basis. Their knowledge and experience make
me able to work there and achieve all targets.
And my thanks also go to all the employees of SandharAutomativeCompany , Gurgaon who
directly or indirectly extended their valuable support to this endeavor.

Ayush Sharma

5
TABLE OF CONTENT

CONTENT PAGE NO.

6
CHAPTER – 1

INTRODUCTION

7
 Summer Training – An Introduction:

Introduction of Topic:

The activities expected from a finance department cover a wide range from basic bookkeep-
ing  to providing information to assisting managers in making strategic decisions.  What to
expect from your finance department will depend largely on factors such as how much in-
volvement the owner/manager has in the organization.

At the base level, your bookkeeper will be responsible for all the day-to-day transactional ac-
counting for the business.  This will include the tracking of all transactions and the manage-
ment of any government reporting. In very small owner-managed businesses, this role is of-
ten filled by a family member with accounting experience. An outside accounting firm is usu-
ally used for annual financial statements and returns. In larger organizations this role will ex-
tend right through to preparing the financial statements with an external auditor engaged for
assurance purposes.

The finance department is also responsible for management of the organization’s cashflow
and ensuring there are enough funds available to meet the day-to-day payments.  This area
also encompasses the credit and collections policies for the company’s customers, to ensure
the organization is paid on time, and that there is a payment policy for the company’s suppli-
ers.  In most organizations there will be some form of forecast prepared on a regular basis to
systematically calculate the ongoing cash needs.

Where there are cash needs beyond the day to day working capital, the finance department is
responsible for advising and sourcing longer term financing.  Financing may be obtained
though bank or private lender debt or, in applicable firms, share issues to private investors.  If
the organization is ready to target angel investors or venture capitalists the finance depart-
ment will be key in preparing the documents required for these presentations and may work
with outside consultants on a company valuation.  In larger firms considering public share of-
ferings the finance department will assist with the preparation of the offering documents but
will likely also use outside consultants to advise on this complicated process.

With the must-do’s taken care of, the finance department can now start to contribute to the
management and improvement of the operations by measuring and reporting regularly on key
numbers crucial to the success of the organization.  Management accounting information is
information that managers can use to monitor the operations and decide where further atten-
tion may be required.  It will likely includesome non-financial information and should be
communicated to managers in a way that is easy to understand.  In smaller owner-managed
businesses this resource, though extremely important, is often overlooked or ignored.

Looking forward, the finance department will work with managers to prepare the organiza-
tion’s budgets and forecasts, and to report back on the progress against these throughout the
year.  This information can be used to plan staffing levels, asset purchases and expansions
and cash needs, before they become necessary.  Some organizations often ‘plan’ by the seat

8
of their pants, while organizations know it is important to have some idea of where you want
to go before you start going there.

Finally, the finance department should be called upon to provide information to assist man-
agers in making key strategic decisions, such as which markets or projects to pursue or the
payback periods for large capital purchases.  The finance department can often contribute an
objective perspective based on special financial assessment techniques.

In summary, some organizations know the finance department should be considered a re-
source to assist managers in the running of the business.  With the growing popularity of out-
sourced finance departments, it is possible for even small businesses to have access to all of
the benefits of a full finance department, through part time professionals, at a fraction of the
cost of employing a full time finance department.

9
CHAPTER-2

COMPANY PROFILE

10
Company Profile

Sandhar Technologies Limited was incorporated as a private limited company with the name
`Sandhar Locking Devices Private Limited' on October 19 1987 at New Delhi India. The
name of the Company was subsequently changed to `Sandhar Locking Devices Limited' on
conversion to a public limited company on September 21 1992. Subsequently the name of the
Company was changed from `Sandhar Locking Devices Limited' to `Sandhar Technologies
Limited'(STL) on November 11 2005. Subsequent changes to the name of the Company to
`Sandhar Locking Devices Limited' and `Sandhar Technologies Limited' were undertaken to
align the name of the Company with the nature of business of the Company and upon
conversion of the Company from a private limited company to a public limited company.
STL is a customer centric component supplier primarily catering to automotive OEMs and
largely focused on safety and security systems of vehicles with a pan India presence and a
growing international footprint. The Company is a leader in the two-wheeler locking systems
market and the commercial vehicle rear view market in India and is one of the two largest
companies catering to the commercial vehicle locking systems market and the two-wheeler
rear view market in India. It is also one of the two largest manufacturers of operator cabins in
India along with being the largest player in the excavator cabins market. The company's
business involves designing and manufacturing a diverse range of automotive components
parts and systems driven by technology process people and governance. Presently STL
manufactures 21 categories of products including such product categories that are
manufactured through its Subsidiaries and Joint Ventures which cater to different industry
segments. The Portfolio comprises various categories of products including safety and
security systems such as lock assemblies mirror assemblies operator cabins for off-highway
vehicles aluminium spools spindles and hubs. The Company also manufactures other product
categories including wheel assemblies handle bar assemblies brake panel assemblies sheet
metal components such as fuel filler caps fuel cock assembly step pillions tools dies moulds
other aluminium components crane and tractor parts plastic and painted parts such as door
handles (inner and outer) panels for televisions and cabinets for air conditioners. STL
manufactures products from 29 manufacturing facilities across eight states in India two
manufacturing facilities in Spain and one manufacturing facility in Mexico. Further it is in
the process of commissioning eight manufacturing facilities in India. This apart it also has an
overseas assembly and packaging centre located in Poland. Further through SCID the
research and development activities are undertaken at Gurugram Haryana. These facilities are
located in key auto-clusters in the northern southern and western parts of India and most of
the facilities are in close proximity to the plants of the OEM customers. Apart from allowing
the company to optimise delivery to its customers the proximity of these facilities to the
plants of the OEM customers also facilitates greater interaction with customers thereby
enabling the company to respond to their requirements in a timely manner.Incorporated on
October 19 1987 STL commenced operations as a supplier to Hero (formerly Hero Honda
Motors Limited) for sheet metal components. The Company is promoted by a first-generation
entrepreneur JayantDavar Co-Chairman and Managing Director of the Company who has 30
years of experience in the OEM component manufacturing industry. The Company is also led
by a qualified management team that has substantial industry operational and financial
experience supported by a skilled work force.On 11/12/2017 the company filed Draft Red.

11
Herring Prospectus and on 13/03/2018 filed Red Herring Prospectus with SEBI for raising
Rs. 512.48 cr. The Issue dates were from 19/03/2018 to 21/03/2018 with Price Band of Rs.
327 to Rs. 332. The Issue got subscribed 6.12 times leading to its Issue Price being fixed at
Rs. 332. The Shares got listed in BSE and NSE on 02/04/2018 at Rs. 345.00 which is 3.92%
above Issue Price.
From our humble beginnings in Gurgaon, India, we have grown to 34 manufacturing plants in
India and across the globe with an employee base exceeding 7,700 people.

The spirit of everything we do as an automotive company is defined by our ability to

collaborate seamlessly across borders, different cultural backgrounds and diverse capabilities.
We believe the challenges facing our industry today needs special collaborations that improve
our ability to meet and exceed customer expectations.

At the heart of everything is our long tradition of commitment to quality. We are proud that
our commitment to high standards is certified.
ISO/TS 16949  I  ISO 14001  I  OHSAS 18001  I  ISO 9001
 
We are dedicated to creating a climate where the individual, perspectives and diversity are
valued. We demonstrate this commitment every day with our comprehensive environment
and social responsibility endeavors, talent management and recognition programs and renew-
able energy solutions. The goal is enhancing the company and the quality of life of our stake-
holders to consistently meet the demanding and unique needs of our customers.

Vision of Sandhar:
To be the Most Preferred Choice of Global Stakeholders.

Mission of Sandhar:
To be the leading player in Global Markets with fully satisfied Stakeholder,maintaining cost
effectiveness through innovative technologyand optimum utilization of talent and resources.

Values:

S pirit of Accomplishment
A ppropriate Attitude
N ever Dying Passion for Excellence
D ynamic
H onest
A ccountable
R eliable

12
History Of Company

The Indian auto-components industry has experienced healthy growth over the last few years.
Some of the factors attributable to this include: a buoyant end-user market, improved con-
sumer sentiment and return of adequate liquidity in the financial system. The auto-component
industry of India has expanded by 14.3 per cent because of strong growth in the after-market
sales to reach at a level of Rs 2.92 lakh crore (US$ 43.55 billion) in FY 2015-16. The indus-
try is further expected to grow to US$ 47-49 billion in FY18.
The auto-components industry accounts for 2.3 per cent of India’s Gross Domestic Product
(GDP) and employs as many as 1.5 million people directly and indirectly each. A stable gov-
ernment framework, increased purchasing power, large domestic market, and an ever increas-
ing development in infrastructure have made India a favourable destination for investment.

Market Size:

The Indian auto-components industry can be broadly classified into the organised and unor-
ganised sectors. The organised sector caters to the Original Equipment Manufacturers
(OEMs) and consists of high-value precision instruments while the unorganised sector com-
prises low-valued products and caters mostly to the aftermarket category.
The total value of India’s automotive exports stood at Rs 73,128 crore (US$ 10.9 billion) in
2016-17 as compared Rs 70,916 crore ($10.8 billion) in the year 2015-16. This has been
driven by strong growth in the domestic market and increasing globalisation (including ex-
ports) of several Indian suppliers. Auto-component exports from India are expected to grow
7-9 per cent in FY18, backed by stronger global growth and higher exports to emerging na-
tions. Growth is further expected to accelerate to 8-10 per cent in FY19 due to pick up in
global scenario.&

The Indian automotive aftermarket is expected to reach Rs 75,705 crore (US$ 13 billion) by
the year 2019-20, according to the Automotive Component Manufacturers Association of In-
dia (ACMA). These estimates are in sync with the targets of the Automotive Mission Plan
(AMP) 2016-26.
According to the Automotive Component Manufacturers Association of India (ACMA), the
Indian auto-components industry is expected to register a turnover of US$ 100 billion by
2020 backed by strong exports ranging between US$ 80- US$ 100 billion by 2026, from the
current US$ 11.2 billion.

Investments:

The Foreign Direct Investment (FDI) inflows into the Indian automobile industry during the
period April 2000 – December 2017 were recorded at US$ 18.41 billion, as per data by the
Department of Industrial Policy and Promotion (DIPP).
Some of the recent investments made/planned in the Indian auto components sector are as
follows:

 In April 2018, MothersonSumi Systems signed a deal to acquire Reydel Automotive for
US$ 201 million. The acquisition will help the company to enter new geographies and get
new customer portfolios.

13
  Schaeffler India, the Indian arm of Germany’s automotive and industrial parts maker,
is planning to invest Rs 300 crore (US$ 46.66 million) per annum over FY18-19.
 Setcor Automotive is going to invest Rs 250 crore (US$ 38.62 million) over the next
two to three years for capacity expansion and modernisation.

Government Initiatives:

 The Government of India’s Automotive Mission Plan (AMP) 2006–2016 has come a
long way in ensuring growth for the sector. Indian Automobile industry is expected to
achieve a turnover of $300 billion by the year 2026 and will grow at a rate of CAGR
15 per cent from its current revenue of $74 billion.
 Government has drafted Automotive Mission Plan (AMP) 2016-26 which will help
the automobile industry to grow and will benefit Indian economy in the following
ways:-
 Contribution of auto industry in the country’s GDP will rise to 13 per cent, currently
which is less than 10 per cent
 More than 100 million jobs will be created in the economy
 Companies will invest around US $80 billion as a part of their capital expenditure.
 End of life Policy will be implemented for old vehicles.

Production:

 The industry produced a total 29,075,605 vehicles including Passenger Vehicles,

Commercial Vehicles, Three Wheelers, Two Wheelers and Quadricycle in April-
March 2018 as against 25,330,967 in April-March 2017, registering a growth of 14.78
percent over the same period last year.

Domestic Sales:

 The sale of Passenger Vehicles grew by 7.89 percent in April-March 2018 over the
same period last year. Within the Passenger Vehicles, Passenger Cars, Utility Vehicle
and Vans grew by 3.33 percent, 20.97 percent and 5.78 percent respectively in April-
March 2018 over the same period last year.

 The overall Commercial Vehicles segment grew by 19.94 percent in April-March

2018 as compared to the same period last year. Medium & Heavy Commercial Vehi-
cles (M&HCVs) grew by 12.48 percent and Light Commercial Vehicles grew by
25.42 percent in April-March 2018 over the same period last year.

 Three Wheelers sales grew by 24.19 percent in April- March 2018 over the same pe-
riod last year. Within the Three Wheelers, Passenger Carrier & Goods Carrier sales
registered a growth of 28.65 percent and 7.83 percent respectively in April-March
2018 over April-March 2017.

14
 
 Two Wheelers sales registered a growth at 14.80 percent in April-March 2018 over
April-March 2017. Within the Two Wheelers segment, Scooters and Motorcycles
grew by 19.90 percent and 13.69 percent respectively, while Mopeds declined by (-)
3.48 percent in April-March 2018 over April-March 2017.

Exports:
 
 In April-March 2018, overall automobile exports increased by 16.12 percent. Two and
Three Wheelers Segments registered a growth of 20.29 percent and 40.13 percent re-
spectively, while Passenger Vehicles and Commercial Vehicles declined by (-)1.51
percent and (-) 10.53 percent respectively in April-March 2018 over the same period
last year.

15
The details of the key management personnel, other than the Executive Directors, as of the date of
this Draft Red Herring Prospectus, are as follows:
Mr. Niraj Hans :, aged 46 years, is the Chief Operating Officer of the Automotives Division of our
Company. He holds a Diploma course in Production Engineering from Govt. Polytechnic, Jhajjar and a
B Tech in Mechanical Engineering from Indian Institute of Engineers, Kolkata and Post Graduate
Diploma in Business Management from IMT Ghaziabad. He joined our Company on January 2, 2012.
Prior to joining our Company, he was associated with Fiat Partecipazioni India Private Limited. He
has 25 years of work experience in the area of automobile manufacturing. He is currently
responsible for the Automotives and Relay division our Company. The gross remuneration paid to
him during fiscal 2015 was `4.97 million.
Mr. D K Ashok aged 60 years, is an advisor to our Company and is responsible for the Automach
division of our Company. He retired as ‘Chief Operating Officer of the Automach division’ in Fiscal
2016. He is a Master in Science from Bengaluru University and holds a Master’s Degree in Business
Administration and Post Graduate Diploma in Business Management from Bhavan’s College
Bengaluru. He joined our Company on October 20, 2004. Prior to joining our Company, he was
associated with Kar Mobiles Limited. He has 38 years of work experience in the area of automobile
manufacturing. He is currently responsible for the Automach vertical of our Company. The gross
remuneration paid to him during fiscal 2015 was `5.61 million.
Mr. Juan Vilar, aged 46 years, is the Managing Director of ST Barcelona. He holds a Postgraduate
Diploma in General Management Program from Open University of Catalonia (UOC). He joined
TECFISA in the year 1996. In 2007, our Company acquired assets of TECFISA in ST Barcelona and
since then he has been associated with ST Barcelona. He has 22 years of work experience in the area
of automobile manufacturing. The gross remuneration paid to him during fiscal 2015 was
€101,745.24.

Mr. Yatendra Singh Chauhan, aged 50 years, is the Chief Operating Officer of the Sheet Metals &
Toolings division of our Company. He holds a Diploma in Tools and Mould Making from Institute of
Tool Room Training, PG Diploma in Material Management from Annamalai University and B. Tech
(Mechanical) from CMJ University, Meghalaya. He joined our Company on May 1, 2009. Prior to
joining our Company, he was associated with Minda Furukawa Electric Private Limited. He has 28

16
years of work experience in the area of automobile manufacturing. He is currently responsible for
Sheet Metals & Tooling division of our Company. The gross remuneration paid to him during fiscal
2015 was `4.82 million.
Mr. Ram Karan Malik, aged 54 years, is the Deputy Chief Operating Officer – Honda Cars Division of
our Company. He holds a Diploma in Tool & Die Maker from TRTC (Tool Room & Training Centre). He
has previously been associated with Minda HUF Limited. He has 31 years of work experience in the
area of automobile manufacturing. He joined our company on November 29, 1999. He is currently
responsible for the HSCI Division of our Company. He received a gross remuneration of ` 4.81 million
in fiscal 2015.
Mr. Chandan Sengupta, aged 53 years, is the Senior Vice President - Human Resources of our
Company. He is a Bachelor of Commerce from University of Delhi and also holds a Post Graduate
Diploma in Personnel Management and Industrial Management from IPMIR, Delhi. He joined our
Company on February 18, 2008. Prior to joining our Company, he was associated with B C Jindal
Group. He has over 30 years of work experience in the area of human resource management. He is
currently responsible for management of Human Resources in our Company. The gross
remuneration paid to him during fiscal 2015 was `4.87 million.
Mr. Rajeev Bhattacharya, aged 55 years, is the Senior Vice President – Central Procurement Division
of our Company. He holds a Bachelor’s Degree in Mechanical Engineering from Harcourt Butler
Technological Institute, Kanpur. He joined our Company on April 14, 2014. Prior to joining our
Company, he was associated with Premium Transmission Limited. He has over 35 years of work
experience in the area of automobile manufacturing. He is currently responsible for the Central
Procurement division of the Company. The gross remuneration paid to him during fiscal 2015 was
`3.96 million.

Mr. Sudhir Kumar Rana, aged 54 years, is the Vice President - Operations of our Company. He holds
Diploma in Mechanical Engineering from Gandhi Polytechnic Muzaffarnagar. He joined our Company
on July 02, 2009. Prior to joining our Company, he was associated with Varroc Polymers Private
Limited. He is also an associate member of Institution of Mechanical Engineers (India). He has 29
years of work experience in the area of automobile manufacturing. He is currently responsible for
Plastics & Zinc Casting division of our Company. The gross remuneration paid to him during fiscal
2015 was `4.13 million.

Mr. Gurvinder Jeet Singh, aged 50 years, is the Assistant Vice President – Cabins & Fabrications
division of our Company. He holds a Diploma in Tool & Mould Making from Institute of Tool Room
Training, Uttar Pradesh. He joined our Company on March 07, 2005. Prior to joining our Company,
he was associated with SchefenackerMothersons Limited. He has 25 years of work experience in the
area of automobile manufacturing. He is currently responsible for the Cabins & Fabrications division
of our Company. The gross remuneration paid to him during fiscal 2015 was `3.27 million. Mr. Dilip
Kumar Naik, aged 49 years, is the Associate Vice President - Research & Technology Development of
our Company. He holds a Bachelor’s Degree in Mechanical Engineering from Delhi University and
Master's Degree in Business Administration from Kurukshetra University. He joined our company on
January 15, 2009. Prior to joining our Company, he was associated with Technico Kongsberg
Automotive India Limited. He has 25 years of work experience in the area of automobile
manufacturing. He is currently responsible for the Research & Technology Development division of
our Company. The gross remuneration paid to him during fiscal 2015 was `4.27 million.

17
Promoter of Company

Mr. Jayant Davar

aged 53 years, is the Co-Chairman and Managing Director of our Company. He is a resident Indian
national. For further details, please refer to the chapter “Our Management” on page 174. Mr. Jayant
Davar’s driving license number is DL-0919940124744 and his voter identity card is YRI2443157. We
confirm that the PAN, bank account number and passport number of our Promoter will be submitted
to the Stock Exchanges on which the Equity Shares are proposed to be listed at the time of filing this
Draft Red Herring Prospectus with the Stock Exchanges. Interests of Promoter Our Promoter is
interested in our Company to the extent of his shareholding, dividend received by him on such
shareholding, and the remuneration/ commission and reimbursement of expenses payable to him as
the Managing Director of our Company. Further, Mr. Davar is also director on the board, or is
member, or partner in of some of our Subsidiaries, Associates and Group Companies and may be
deemed to be interested to the extent of the payments made by our Company, if any, to such of our
Subsidiaries, Associates and Group Companies. For details regarding the payments made by our

18
Company to certain Group Companies, please refer to please refer to the chapter “Related Party
Transactions” on page 338. Except as disclosed below, our Promoter confirms that he has no interest
in any property acquired by our Company during the two years immediately preceding the date of
this Draft Red Herring Prospectus or in any transaction in acquisition of land, construction of building
or supply of machinery: Land in Industrial Park, Haridwar, Uttarakhand, admeasuring 35,186 sq. mts
acquired from Haridwar Estates Private Limited, which is our Promoter Group Company, for a total
consideration of `102.30 million of which an amount of `98.47 million has been paid as on date of
this Draft Red Herring Prospectus . The above mentioned paid amount includes an advance for `8.92
million for an area of 5100 sq mts which is still pending for registration in the name in the company.

19
CHAPTER – 3

LITERATURE REVIEW

LITERATURE REVIEW

Md. Diaunul Islam:

The analysis of the Corona group financial statements consists of mixture of steps and pieces
that interrelate and affect each other. No one part of the analysis should be interpreted in
isolation. Short term liquidity impacts profitability; profitability begins with sales, which
relate to the liquidity of assets. The efficiency of asset management influences the cost and

20
availability of credit, which shapes the capital structure. Every aspect of a firm’s financial
condition, performance, and outlook affects the share price. The last step of financial
statement analysis is to integrate the separate pieces into a whole, leading to conclusions
about the business enterprise. The specific conclusions drawn will be affected by the original
objectives established at the initiation of the analytical process.
So there have some weaknesses that act as barriers for being better performance of Corona
Group. If the company can reduced this kind of barriers, company can be successes. So they
can take some action to recover those barriers that is:- Have to can increase sales Company
must follow the chain of command To make effective salary structure Have to reduced short
term loan Have to reduced new store expansion Because if it increase more in a year, the ex-
penses of lease payment are increasing too.

De Loof(2003):

Discussed that most firms had large amount of cash invested in working capital. It can there-
fore be expected that the way in which working capitalism managed will have a significant
impact on profitability of those firms. Using correlation and regression tests he found a sig-
nificant negative relationship between gross income and the number of days, accounts re-
ceivable, inventories and accounts payable of Belgian firms.

21
CHAPTER – 4

RESEARCH METHODOLOGY

RESEARCH DESIGN:

Research is not an isolated activity, but rather seeks to build on previous workas well as
providing new avenues for exploration. The very prerequisite to conduct every study is to
develop a research design or plan. The type of research which have been used for our project
isDescriptiveResearch.

A research method is a systematic plan for conducting research. Sociologists draw on a

variety of both qualitative and quantitative research methods, including experiments, survey
research, participant observation, and secondary data. Quantitative methods aim to classify

22
features, count them, and create statistical models to test hypotheses and explain
observations. Qualitative methods aim for a complete, detailed description of observations,
including the context of events and circumstances.

SECONDARY DATA:
The basic type of research used to prepare this project is descriptive. The study is mainly
based on secondary data which are already collected and available. These include internal
sources within the company and external sources like company annual report , web ,sebi offi-
cial website and periodically published annual report of sandhar group. The study is limited
to 2 financial year i.e. from 2015-16. The data used in this study has taken from the financial
statement and their related schedules .
There are various types of Financial analysis. They are briefly mentioned herein:
External analysis:
The external analysis is done on the basis of published financial statements by those who do
not have access to the accounting information, such as, stockholders, banks, creditors, and the
general public.
Internal Analysis: 
This type of analysis is done by finance and accounting department. The objective of such
analysis is to provide the information to the top management, while assisting in the decision
making process.
Short term Analysis: 
It is concerned with the working capital analysis. It involves the analysis of both current as-
sets and current liabilities, so that the cash position (liquidity) may be determined.

Horizontal Analysis:
The comparative financial statements are an example of horizontal analysis, as it involves
analysis of financial statements for a number of years. Horizontal analysis is also regarded
as Dynamic Analysis.
Vertical Analysis:
It is performed when financial ratios are to be calculated for one year only. It is also called
as static analysis.
An assortment of techniques is employed in analyzing financial statements.They areCompar-
ative Financial Statements, statement of changes in working capital, common size balance
sheets and income statements, trend analysis and ratio analysis.
Comparative Financial Statements:
It is an important method of analysis which is used to make comparison between two finan-
cial statements. Being a technique of horizontal analysis and applicable to both financial
statements, income statement and balance sheet, it provides meaningful information when
compared to the similar data of prior periods. The comparative statement of income state-
ments enables to review the operational performance and to draw conclusions, whereas the
balance sheets, presenting a change in the financial position during the period, show the ef-
fects of operations on the assets and liabilities. Thus, the absolute change from one period to
another may be determined.
Statement of Changes in Working Capital:

23
The objective of this analysis is to extract the information relating to working capital. The
amount of net working capital is determined by deducting the total of current liabilities from
the total of current assets. The statement of changes in working capital provides the informa-
tion in relation to working capital between two financial periods.
Common Size Statements: 
The figures of financial statements are converted to percentages. It is performed by taking the
total balance sheet as 100. The balance sheet items are expressed as the ratio of each asset to
total assets and the ratio of each liability to total liabilities. Thus, it shows the relation of each
component to the whole - Hence, the name common size.
Trend Analysis: 
It is an important tool of horizontal analysis. Under this analysis, ratios of different items of
the financial statements for various periods are calculated and the comparison is made ac-
cordingly. The analysis over the prior years indicates the trend or direction. Trend analysis is
a useful tool to know whether the financial health of a business entity is improving in the
course of time or it is deteriorating.

Ratio Analysis: 
The most popular way to analyze the financial statements is computing ratios. It is an impor-
tant and widely used tool of analysis of financial statements. While developing a meaningful
relationship between the individual items or group of items of balance sheets and income
statements, it highlights the key performance indicators, such as, liquidity, solvency andprof-
itability of a business entity. The tool of ratio analysis performs in a way that it makes the
process of comprehension of financial statements simpler, at the same time, it reveals a lot
about the changes in the financial condition of a business entity.

It must be noted that Financial analysis is a continuous process being applicable to every
business to evaluate its past performance and current financial position. It is useful in various
situations to provide managers the information that is needed for critical decisions. The
process of financial analysis provides the information about the ability of a business entity to
earn income while sustaining both short term and long term growth.

NEED OF THE STUDY:

(a) It helps us to know the reasons for relative changes—either in profitability or in the
financial position as a whole.

(b) It also help to know both the short-term liquidity position vis-a-vis working capital

position; as also the long-term liquidity and solvency position of a firm.

(c) It also highlights the operating efficiency and the present profit-earning capacity of the

firm as a whole.

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(d) High Courts, Supreme Court, Arbitrators also require financial statements to settle various

disputed matters.

(e) Various financial journal (viz. R.B.I. Bulletins), newspapers etc. also require financial

statements for analysing and scrutinizing the financial position of a firm for the readers.

OBJECTIVES OF THE STUDY:

 To  Assess the Past Performance and Current Position:

Past performance is often a good indicator of future performance. Therefore, an

investor or creditor is interested in the trend of past sales, expenses, net income, cast

flow and return on investment. These trends offer a means for judging management’s

past performance and are possible indicators of future performance.

 To Predict the Net Income and Growth Prospects:

The financial statement analysis helps in predicting the earning prospects and growth
rates in the earnings which are used by investors while comparing investment alterna-
tives and other users interested in judging the earning potential of business enter-
prises. Investors also consider the risk or uncertainty associated with the expected re-
turn.

 The decision makers are futuristic and are always concerned with the future. Financial

statements which contain information on past performances are analyzed and inter-

preted as a basis for forecasting future rates of return and for assessing risk.

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ANALYSIS OF DATA:

For the analysis of data I have used:

 Accounting ratios

 Common size statement

 Comparative statement

CHAPTER-5
DATA ANALYSIS AND INTERPRETATION

BALANCE SHEET 2015-2016

26
DATA ANALYSIS AND INTERPRETATION

Balance Sheet 2015-16

Balance Sheet 2016-17

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28
ANALYSIS AND INTERPRETATION OF DATA

1.COMMON SIZE STATEMENT:

Particulars 2015(%) 2016(%) 2017(%)

Balance Sheet
Capital 0.02 0.02 0.01
Reserve and surplus 8.80 7.91 5.94
Deposits 82.3 81.68 79.85
Borrowings 3.52 5.23 8.05
Other liabilities 5.33 5.13 8.19
Total liabilities 100 100 100
Cash & bank balances 4.74 5.65 25.81
Investments 52 53.78 41.35
Loans and Advances 39.13 37.03 29.82
Others Assets 4.11 3.52 3.00
Total assets 100 100 100
P&L A/C
Interest Income 97.84 98.57 98.32
Other Income 2.20 1.50 1.68
Total Income 100 100 100
Interest Expenditure 80.53 82.96 81.98
Other Expenditure 19.47 17.04 8.02
Total Expenditure 100 100 100

ANALYSIS OF COMMON SIZE STATEMENT:

BALANCE SHEET:

 In 2017 the capital of the company in terms of % is decreased.

And remains same in 2015 & 2016.
 Reserves & Surplus of the company are declining form 2015 in terms of % as it was
8.8 in 2015 and comes to 7.91 in 2016 and then comes to 5.94 in 2017 .
 Borrowings of the company are increased up to 3%.
 Provisions of the company are also decreased up to extent of 4%.
 Cash and Bank balance , is increased up to 20% , of the company.
 Talking about loans and advances, are also decreased upto 8%.

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 PROFIT AND LOSS ACCOUNT:
 Income from interest is slightly decreased in points.
 Expenditure from interest is also decreased 1%.

1.(a)COMPARATIVE STATEMENT(2015-2016)

Particulars Absolute change % change

Balance Sheet
Capital 6.45 2.97
Reserve and surplus 2323.07 2.92
Deposits 100775.01 13.58
Borrowings 22245.26 70.08
Other liabilities 4945.93 10.28
Total liabilities 130295.72 14.45
Cash & bank balances 15609.53 36.50
Investments 86152.82 18.37
Loans and Advances 29315.42 8.31
Others Assets (782.05) (2.10)
Total assets 130295.72 14.45
P&L A/C
Interest Income 10437.75 13.77
Other Income (418.61) (25.10)
Total Income 10019.14 12.94
Interest Expenditure 9482.55 16.04
Other Expenditure (192.64) (1.35)
Total Expenditure 9286.91 12.69
P&L 729.32 17.09
Other working results
CD Ratio (2.21) (4.64)
Recovery & Performance % (1.97) (2.58)

Gross NPAs 7774.69 0.21

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 Net NPAs 5989.46 22.95
% of gross NPA to total 1.25 12.27
Loans
% of net NPA to net Loans 1.05 13.79
Capital Adequacy Ratio % (2.06) (12.24)
Net Worth (34.84) (0.05)

ANAYSIS OF COMPARATIVE STATEMENT(2015-2016) :

BALANCE SHEET:

 The balance reveals change i.e. absolute change and percentage change, except other
assets all items are changed positively.
 The other items are decresed. There is a change of (782.05) in other assets.
 The cash and company balance is increased 36.5%.
 The increase in loan and advances is of 18.37%.
 There is 70% increase in the borrowings of the company.

PROFIT AND LOSS ACCOUNT:

 The total income is increased to the 12.94%.

 The total expenditure is increased to the 12.69%.
Overall, the % increase of the income is more than the % increase of expenditure
0.35%.

(b)COMPARATIVE STATEMENT (2016-2017):

Particulars Absolute change % change

Balance Sheet
Capital 5.58 2.50
Reserve and surplus 543.46 0.76
Deposits 119861.57 14.22
Borrowings 43162.86 79.94
Other liabilities 6431.01 12.12
Total liabilities 3789.14 35.75
Cash & bank balances 173793.62 16.84
Investments (3631.79) (1.15)
Loans and Advances 200046.45 67.01
Others Assets (22462.55) (5.87)
Total assets (158.48) (0.43)
P&L A/C

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 Interest Income 173793.62 16.84
Other Income 6277.76 7.28
Total Income 328.38 26.30
Interest Expenditure 6606.19 7.55
Other Expenditure 3614.31 5.28
Total Expenditure 3771.25 26.84
P&L 7385.56 8.95
Other working results
CD Ratio (779.42) (15.60)
Recovery & Performance % (279.79) (9.21)
Gross NPAs (7.97) (17.58)
Net NPAs (6.65) (8.96)
% of gross NPA to total Loans 14753.26 33.77
% of net NPA to net Loans 11107.54 34.62
Capital Adequacy Ratio % 4.82 42.16
Net Worth 3.88 44.80

ANALISYS OF COMAPARTIVE STATEMENTS (2016-2017):

BALANCE SHEET:

 There is decrease in cash and company balances to 1.15%.

 Loans and Advances are also decreased to 5.87%.
 The capital of the company increased to 2.5%.
 The borrowings are also increased to 79.94%.
 The other items are also increased to some extent showing good financial health of the
company.

PROFIT AND LOSS ACCOUNT:

 The total income is increased to 7.55%
 The total expenditure is also increased to 8.95%.
 The % increase of expenditure is more than the % increase of income of the company.
The difference between two is 1.4%.
 The overall net worth of the company is decreased to 2.10%, which shows that finan-
cial health is fluctuating. It should focus on key areas of the company

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1. Accounting Ratios:

(a) NPA Ratio (Non-performing assets Ratio):

The net NPA to loan and advances ratio is used as a measure of the overall quality of
the company’s loan book. An NPA are those assets for which interest is overdue for
more than 90 days.

NPA Ratio = Non-performing Assets/Loans given.

As given in the financial statements, the % of NPA is 8.66 in 2016 and 12.54 in 2017
which is too high. Lower the NPA more it will be beneficial to the company.

(b)Return on Assets (ROA) Ratio:

ROA Ratio is the net income (profits) generated by the company on its total assets
(including fix assets).
The higher the proportion of average earnings assets, the better would be the resulting
returns on total assets.
ROA = net income/total assets*100
Higher the ROA the better would be the management. In 2017 ROA of the company
= 94044.7/1205489.85*100 = 7.80 .

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CHAPTER-6

FINDINGS AND COCLUSION

34
FINDINGS:
As it is analysed that the financial health of the company is not upto the mark. So
bank should take some crucial and remedial steps towards the improvement of the
financial position. As improvement of the company is necessary to retain the
customers and earing high profits.

The company should take following steps to improve the financial position:

Ensure customers pay you on time:

Businesses can run into major problems because of late customer payments. To
reduce the risk of late or non-payment, you should make your credit terms and
conditions obvious from the outset. You should also quickly issue invoices that are
clear and accurate. Using a computerised credit management system will help you to
keep track of customers’ accounts.

 Ensure customers pay you on time:

Selling unwanted assets can be a good way to get some cash and reduce your storage
costs. You could also consider leasing your main assets to help spread the cost over a
longer period.
Putting more effort into marketing doesn't necessarily require spending more money.
For example, using the internet and social media can be a cheaper and smarter way of
getting your message across.

Look for govt. grants:

To cope with changes in your cash flow, you could also consider taking out a
businessLoan. Before you do, it's a good idea to assess your financial needs.

Review Your Goals:

Did you meet all the goals you outlined in your one-year business plan? Business
planning is not a once-a-year event. That’s why it’s pertinent to check your progress
to date and make sure your action items are being met along the way. Implement
quarterly reviews of your company’s strategic goals and targets.

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 CONCLUSION:

IN NUT SHELL,

Financial analysis is the process of evaluating businesses, projects, budgets and other finance-
related entities to determine their performance and suitability. Typically, financial analysis is
used to analyze whether an entity is stable, solvent, liquid or profitable enough to warrant a
monetary investment. When looking at a specific company, a financial analyst conducts
analysis by focusing on the income statement, balance sheet, and cash flow statement.

1.Holding Of Share:

Shareholders are the owners of the company. Time and again, they may have to take
decisions whether they have to continue with the holdings of the company's share or sell them
out. The financial statement analysis is important as it provides meaningful information to the
shareholders in taking such decisions.

2. Decisions And Plans:

The management of the company is responsible for taking decisions and formulating plans
and policies for the future. They, therefore, always need to evaluate its performance
and effectiveness of their action to realise the company's goal in the past. For that purpose,
financial statement analysis is important to the company's management.

3. Extension Of Credit:

The creditors are the providers of loan capital to the company.Therefore they may have to
take decisions as to whether they have to extend their loans to the company and demand for
higher interest rates. The financial statement analysis provides important information to them
for their purpose.

4.Investment Decision:

The prospective investors are those who have surplus capital to invest in some
profitable opportunities. Therefore, they often have to decide whether to invest their capital in
the company's share. The financial statement analysis is important to them because they can
obtain useful information for their investment decision making purpose

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CHAPTER-7

ANNEXURE

BALANCE SHEET
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38
B

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REFERANCES:

https://www.smythecpa.com.

www.sandahr.co.in

https://www.ibef.org

http://www.assignmentpoint.com

https://www.wikipedia.org/

https://investopidea.com

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