Professional Documents
Culture Documents
INTRODUCTION
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CASH MANAGEMENT
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.
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OBJECTIVES OF THE STUDY
Primary Objective:
• To analyze the cash management of ICICI BANK LTD.
Secondary Objective:
• To find out the liquidity position of the concern through ratio analysis.
• To study the growth of ICICI BANK LTD.. in terms of cash flow statement.
• To make suggestion and recommendation to improve the cash position of ICICI
BANK LTD..
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RESEARCH METHODOLOGY
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”
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.
DATA COLLECTION
Primary Sources
1. Data are collected through personal interviews and discussion with Finance-
Executive.
2. Data are collected through personal interviews and discussion with Material
Planning- Deputy 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.
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8.1 SCOPE OF THE STUDY
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LIMITATIONS OF THE STUDY
The study is restricted only to ICICI BANK LTD... Being a case study, the findings
cannot be generalized.
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
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CHAPTER-II
INDUSTRY PROFILE
&
COMPANY PROFILE
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Evolution
Indian Stock Markets are one of the oldest in Asia. Its history dates back to nearly 200 years
ago. The earliest records of security dealings in India are meager and obscure. The East India
Company was the dominant institution in those days and business in its loan securities used
to be transacted towards the close of the eighteenth century.
By 1830's business on corporate stocks and shares in Bank and Cotton presses took place in
Bombay. Though the trading list was broader in 1839, there were only half a dozen brokers
recognized by banks and merchants during 1840 and 1850.
The 1850's witnessed a rapid development of commercial enterprise and brokerage business
attracted many men into the field and by 1860 the number of brokers increased into 60.
In 1860-61 the American Civil War broke out and cotton supply from United States of Europe
was stopped; thus, the 'Share Mania' in India begun. The number of brokers increased to
about 200 to 250. However, at the end of the American Civil War, in 1865, a disastrous slump
began (for example, Bank of Bombay Share which had touched Rs 2850 could only be sold at
Rs. 87).
At the end of the American Civil War, the brokers who thrived out of Civil War in 1874,
found a place in a street (now appropriately called as Dalal Street) where they would
conveniently assemble and transact business. In 1887, they formally established in Bombay,
the "Native Share and Stock Brokers' Association" (which is alternatively known as " The
Stock Exchange "). In 1895, the Stock Exchange acquired a premise in the same street and it
was inaugurated in 1899. Thus, the Stock Exchange at Bombay was consolidated.
Ahmadabad gained importance next to Bombay with respect to cotton textile industry. After
1880, many mills originated from Ahmadabad and rapidly forged ahead. As new mills were
floated, the need for a Stock Exchange at Ahmadabad was realized and in 1894 the brokers
formed "The Ahmadabad Share and Stock Brokers' Association".
What the cotton textile industry was to Bombay and Ahmadabad, the jute industry was to
Calcutta. Also tea and coal industries were the other major industrial groups in Calcutta. After
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the Share Mania in 1861-65, in the 1870's there was a sharp boom in jute shares, which was
followed by a boom in tea shares in the 1880's and 1890's; and a coal boom between 1904
and 1908. On June 1908, some leading brokers formed "The Calcutta Stock Exchange
Association".
In the beginning of the twentieth century, the industrial revolution was on the way in India
with the Swadeshi Movement; and with the inauguration of the Tata Iron and Steel Company
Limited in 1907, an important stage in industrial advancement under Indian enterprise was
reached.
Indian cotton and jute textiles, steel, sugar, paper and flour mills and all companies generally
enjoyed phenomenal prosperity, due to the First World War.
In 1920, the then demure city of Madras had the maiden thrill of a stock exchange
functioning in its midst, under the name and style of "The Madras Stock Exchange" with 100
members. However, when boom faded, the number of members stood reduced from 100 to 3,
by 1923, and so it went out of existence.
In 1935, the stock market activity improved, especially in South India where there was a
rapid increase in the number of textile mills and many plantation companies were floated. In
1937, a stock exchange was once again organized in Madras - Madras Stock Exchange
Association (Pvt) Limited. (In 1957 the name was changed to Madras Stock Exchange
Limited).
Lahore Stock Exchange was formed in 1934 and it had a brief life. It was merged with the
Punjab Stock Exchange Limited, which was incorporated in 1936.
The Second World War broke out in 1939. It gave a sharp boom which was followed by a
slump. But, in 1943, the situation changed radically, when India was fully mobilized as a
supply base.
On account of the restrictive controls on cotton, bullion, seeds and other commodities, those
dealing in them found in the stock market as the only outlet for their activities. They were
anxious to join the trade and their number was swelled by numerous others. Many new
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associations were constituted for the purpose and Stock Exchanges in all parts of the country
were floated.
The Uttar Pradesh Stock Exchange Limited (1940), Nagpur Stock Exchange Limited (1940)
and Hyderabad Stock Exchange Limited (1944) were incorporated.
In Delhi two stock exchanges - Delhi Stock and Share Brokers' Association Limited and the
Delhi Stocks and Shares Exchange Limited - were floated and later in June 1947,
amalgamated into the Delhi Stock Exchnage Association Limited.
Trading in Indian stock exchanges are limited to listed securities of public limited companies.
They are broadly divided into two categories, namely, specified securities (forward list) and
non-specified securities (cash list). Equity shares of dividend paying, growth-oriented
companies with a paid-up capital of atleast Rs.50 million and a market capitalization of
atleast Rs.100 million and having more than 20,000 shareholders are, normally, put in the
specified group and the balance in non-specified group.
Two types of transactions can be carried out on the Indian stock exchanges: (a) spot delivery
transactions "for delivery and payment within the time or on the date stipulated when
entering into the contract which shall not be more than 14 days following the date of the
contract" : and (b) forward transactions "delivery and payment can be extended by further
period of 14 days each so that the overall period does not exceed 90 days from the date of the
contract". The latter is permitted only in the case of specified shares. The brokers who carry
over the outstandings pay carry over charges (cantango or backwardation) which are usually
determined by the rates of interest prevailing.
A member broker in an Indian stock exchange can act as an agent, buy and sell securities for
his clients on a commission basis and also can act as a trader or dealer as a principal, buy and
sell securities on his own account and risk, in contrast with the practice prevailing on New
York and London Stock Exchanges, where a member can act as a jobber or a broker only.
The nature of trading on Indian Stock Exchanges are that of age old conventional style of
face-to-face trading with bids and offers being made by open outcry. However, there is a
great amount of effort to modernize the Indian stock exchanges in the very recent times.
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Over The Counter Exchange of India (OTCEI)
The traditional trading mechanism prevailed in the Indian stock markets gave way to many
functional inefficiencies, such as, absence of liquidity, lack of transparency, unduly long
settlement periods and benami transactions, which affected the small investors to a great
extent. To provide improved services to investors, the country's first ringless, scripless,
electronic stock exchange - OTCEI - was created in 1992 by country's premier financial
institutions - Unit Trust of India, Industrial Credit and Investment Corporation of India,
Industrial Development Bank of India, SBI Capital Markets, Industrial Finance Corporation
of India, General Insurance Corporation and its subsidiaries and CanBank Financial Services.
Trading at OTCEI is done over the centres spread across the country. Securities traded on the
OTCEI are classified into:
Listed Securities - The shares and debentures of the companies listed on the OTC can
be bought or sold at any OTC counter all over the country and they should not be
listed anywhere else
Permitted Securities - Certain shares and debentures listed on other exchanges and
units of mutual funds are allowed to be traded
Initiated debentures - Any equity holding atleast one lakh debentures of a particular
scrip can offer them for trading on the OTC.
OTC has a unique feature of trading compared to other traditional exchanges. That is,
certificates of listed securities and initiated debentures are not traded at OTC. The original
certificate will be safely with the custodian. But, a counter receipt is generated out at the
counter which substitutes the share certificate and is used for all transactions.
In the case of permitted securities, the system is similar to a traditional stock exchange. The
difference is that the delivery and payment procedure will be completed within 14 days.
Compared to the traditional Exchanges, OTC Exchange network has the following
advantages:
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OTCEI has widely dispersed trading mechanism across the country which provides
greater liquidity and lesser risk of intermediary charges.
Since the exact price of the transaction is shown on the computer screen, the investor
gets to know the exact price at which s/he is trading.
In the case of an OTC issue (new issue), the allotment procedure is completed in a
month and trading commences after a month of the issue closure, whereas it takes a
longer period for the same with respect to other exchanges.
Thus, with the superior trading mechanism coupled with information transparency investors
are gradually becoming aware of the manifold advantages of the OTCEI.
With the liberalization of the Indian economy, it was found inevitable to lift the Indian stock
market trading system on par with the international standards. On the basis of the
recommendations of high powered Pherwani Committee, the National Stock Exchange was
incorporated in 1992 by Industrial Development Bank of India, Industrial Credit and
Investment Corporation of India, Industrial Finance Corporation of India, all Insurance
Corporations, selected commercial banks and others.
Wholesale debt market operations are similar to money market operations - institutions and
corporate bodies enter into high value transactions in financial instruments such as
government securities, treasury bills, public sector unit bonds, commercial paper, certificate
of deposit, etc.
(b) participants.
Recognized members of NSE are called trading members who trade on behalf of themselves
and their clients. Participants include trading members and large players like banks who take
direct settlement responsibility.
Trading at NSE takes place through a fully automated screen-based trading mechanism which
adopts the principle of an order-driven market. Trading members can stay at their offices and
execute the trading, since they are linked through a communication network. The prices at
which the buyer and seller are willing to transact will appear on the screen. When the prices
match the transaction will be completed and a confirmation slip will be printed at the office
of the trading member.
NSE has several advantages over the traditional trading exchanges. They are as follows:
NSE brings an integrated stock market trading network across the nation.
Investors can trade at the same price from anywhere in the country since inter-market
operations are streamlined coupled with the countrywide access to the securities.
Unless stock markets provide professionalized service, small investors and foreign investors
will not be interested in capital market operations. And capital market being one of the major
source of long-term finance for industrial projects, India cannot afford to damage the capital
market path. In this regard NSE gains vital importance in the Indian capital market system.
Preamble
Often, in the economic literature we find the terms ‘development’ and ‘growth’ are used
interchangeably. However, there is a difference. Economic growth refers to the sustained
increase in per capita or total income, while the term economic development implies
sustained structural change, including all the complex effects of economic growth. In other
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words, growth is associated with free enterprise, where as development requires some sort of
control and regulation of the forces affecting development. Thus, economic development is a
process and growth is a phenomenon.
Economic planning is very critical for a nation, especially a developing country like India to
take the country in the path of economic development to attain economic growth.
One of the major objective of planning in India is to increase the rate of economic
development, implying that increasing the rate of capital formation by raising the levels of
income, saving and investment. However, increasing the rate of capital formation in India is
beset with a number of difficulties. People are poverty ridden. Their capacity to save is
extremely low due to low levels of income and high propensity to consume. Therefor, the rate
of investment is low which leads to capital deficiency and low productivity. Low productivity
means low income and the vicious circle continues. Thus, to break this vicious economic
circle, planning is inevitable for India.
The market mechanism works imperfectly in developing nations due to the ignorance and
unfamiliarity with it. Therefore, to improve and strengthen market mechanism planning is
very vital. In India, a large portion of the economy is non-monitised; the product, factors of
production, money and capital markets is not organized properly. Thus the prevailing price
mechanism fails to bring about adjustments between aggregate demand and supply of goods
and services. Thus, to improve the economy, market imperfections has to be removed;
available resources has to be mobilized and utilized efficiently; and structural rigidities has to
be overcome. These can be attained only through planning.
Further, in a country like India where agricultural dependence is very high, one cannot ignore
this segment in the process of economic development. Therefore, an economic development
model has to consider a balanced approach to link both agriculture and industry and lead for a
paralleled growth. Not to mention, both agriculture and industry cannot develop without
adequate infrastructural facilities which only the state can provide and this is possible only
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through a well carved out planning strategy. The government’s role in providing
infrastructure is unavoidable due to the fact that the role of private sector in infrastructural
development of India is very minimal since these infrastructure projects are considered as
unprofitable by the private sector.
Further, India is a clear case of income disparity. Thus, it is the duty of the state to reduce the
prevailing income inequalities. This is possible only through planning.
The development of planning in India began prior to the first Five Year Plan of independent
India, long before independence even. The idea of central directions of resources to overcome
persistent poverty gradually, because one of the main policies advocated by nationalists early
in the century. The Congress Party worked out a program for economic advancement during
the 1920’s, and 1930’s and by the 1938 they formed a National Planning Committee under
the chairmanship of future Prime Minister Nehru. The Committee had little time to do
anything but prepare programs and reports before the Second World War which put an end to
it. But it was already more than an academic exercise remote from administration.
Provisional government had been elected in 1938, and the Congress Party leaders held
positions of responsibility. After the war, the Interim government of the pre-independence
years appointed an Advisory Planning Board. The Board produced a number of somewhat
disconnected Plans itself. But, more important in the long run, it recommended the
appointment of a Planning Commission.
The Planning Commission did not start work properly until 1950. During the first three years
of independent India, the state and economy scarcely had a stable structure at all, while
millions of refugees crossed the newly established borders of India and Pakistan, and while
ex-princely states (over 500 of them) were being merged into India or Pakistan. The Planning
Commission as it now exists, was not set up until the new India had adopted its Constitution
in January 1950.
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To make an assessment of the material, capital and human resources of the country,
including technical personnel, and investigate the possibilities of augmenting such of
these resources as are found to be deficient in relation to the nation’s requirement.
To formulate a plan for the most effective and balanced use of the country’s resources.
Having determined the priorities, to define the stages in which the plan should be
carried out, and propose the allocation of resources for the completion of each stage.
To indicate the factors which are tending to retard economic development, and
determine the conditions which, in view of the current social and political situation,
should be established for the successful execution of the Plan.
To determine the nature of the machinery this will be necessary for securing the
successful implementation of each stage of Plan in all its aspects.
To appraise from time to time the progress achieved in the execution of each stage of
the Plan and recommend the adjustments of policy and measures that such appraisals
may show to be necessary.
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COMPANY PROFILE
ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI
Bank, India’s second largest commercial bank & a well-known and trusted name in the
financial services in India, & Prudential Plc, one of the United Kingdom’s largest players in
the financial services sectors.
In a span of over 18 years since inception and just over 13 years of the Joint Venture, the
company has forged a position of preeminence as one of the largest Asset Management
Company’s in the country, contributing significantly towards the growth of the Indian mutual
fund industry.
The company manages significant Mutual Fund Assets under Management (AUM), in
addition to our Portfolio Management Services (PMS) and International Advisory Mandates
for clients across international markets in asset classes like Debt, Equity and Real Estate with
primary focus on risk adjusted returns.
As an Asset Management Company, we have over 18 years of experience and are currently
managing a comprehensive range of schemes of more than 46 Mutual fund schemes and a
wide range of PMS Products for our investors spread across the country. We service this
investor base with our own branch network of around 168 branches and a distribution reach
of over 42,000 channel partners.
ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47 billion (US$ 93
billion) at March 31, 2012 and profit after tax Rs. 64.65 billion (US$ 1,271 million) for the
year ended March 31, 2012. The Bank has a network of 2,890 branches and 10,021 ATMs in
India, and has a presence in 19 countries, including India.
ICICI Bank offers a wide range of banking products and financial services to corporate and
retail customers through a variety of delivery channels and through its specialised
subsidiaries in the areas of investment banking, life and non-life insurance, venture capital
and asset management.
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The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in
United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International
Finance Centre and representative offices in United Arab Emirates, China, South Africa,
Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches
in Belgium and Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National
Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on
the New York Stock Exchange (NYSE).
Corporate Profile
ICICI Bank is India's second-largest bank with total assets of Rs. 3,562.28 billion (US$ 77
billion) as on December 31, 20013.
Board Members
Mr. K. V. Kamath, Chairman
Mr. Sridar Iyengar
Mr. Homi R. Khusrokhan
Mr. Lakshmi N. Mittal
Mr. Narendra Murkumbi
Dr. Anup K. Pujari
Mr. Anupam Puri
Mr. M.S. Ramachandran
Mr. M.K. Sharma
Mr. V. Sridar
Prof. Marti G. Subrahmanyam
Mr. V. Prem Watsa
Ms. Chanda D. Kochhar,
Managing Director & CEO
Mr. Sandeep Bakhshi,
Deputy Managing Director
Mr. N. S. Kannan,
Executive Director & CFO
Mr. K. Ramkumar,
Executive Director
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Mr. Sonjoy Chatterjee,
Executive Director
Mr. K. V. Kamath is a mechanical engineer and did his management studies from the Indian
Institute of Management, Ahmedabad. He joined ICICI in 1971 and worked in the areas of
project finance, leasing, resources and corporate planning. In 1988, he joined the Asian
Development Bank and spent several years in south-east Asia before returning to ICICI as its
Managing Director & CEO in 1996. He became Managing Director & CEO of ICICI Bank in
2002 following the merger of ICICI with ICICI Bank. Under his leadership, the ICICI Group
transformed itself into a diversified, technology-driven financial services group, that has
leadership positions across banking, insurance and asset management in India, and an
international presence. He retired as Managing Director & CEO in April 2009, and took up
the position of non-executive Chairman of ICICI Bank effective May 1, 2009. He was the
President of the Confederation of Indian Industry (CII) for 2008-09. He was awarded the
Padma Bhushan by the President of India in May 2008. He was conferred the Lifetime
Achievement Awards at the Financial Express Best Bank Awards 2008 and the NDTV Profit
Business Leadership Awards 2008; was named 'Businessman of the Year' by Forbes Asia and
The Economic Times' 'Business Leader of the Year' in 2007; Business Standard's "Banker of
the Year" and CNBC-TV18's "Outstanding Business Leader of the Year" in 2006; Business
India's "Businessman of the Year" in 2005; and CNBC's "Asian Business Leader of the Year"
in 2001. He has been conferred with an honorary PhD by the Banaras Hindu University. He is
a member of the Board of the Institute of International Finance, a Director on the Board of
Infosys Technologies and a member of the Board of Governors of the Indian Institute of
Management, Ahmedabad.
Products
ICICI Pru LifeStage Wealth II is a unit linked insurance plan that offers multiple choices to
decide how your savings would be invested based on your risk appetite. UIN - 105L118V02
ICICI Pru LifeTime Premier is a comprehensive savings plan that offers you a choice of
portfolio strategies for your savings and at the same time secures you against uncertainties of
life. UIN - 105L112V02
ICICI Pru Pinnacle Super is a unit linked insurance plan that gives you the advantage of
varying exposure to equities with downside protection, so that your investments are protected
in financially volatile times. UIN - 105L121V03
ICICI Pru Elite Life is a unit linked insurance plan that offers you multiple choices on how
to invest your savings along with an insurance cover.UIN - 105L125V02
ICICI Pru Elite Wealth is a unit linked insurance plan that offers you the greatest value for
your hard earned savings. Also, you get rewarded with Loyalty Additions from the sixth year
onwards to maximize the return on your investments. UIN - 105L126V02
ICICI Pru Guaranteed Savings Insurance Plan is a limited pay endowment product that
allows you to enjoy the benefits of a long term savings plan ensuring that you and your
family are free of any financial worries. UIN - 105N114V02
ICICI Pru Future Secure is a participating endowment life insurance plan that helps you
save for specific goals in the future, while providing protection for your family from financial
distress in case of your untimely demise. Thus the dual benefit of savings and protection it
helps you ensure a secure future for your loved ones. UIN - 105N117V01
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ICICI Pru Whole Life provides you with a unique double advantage of savings and
protection that not only allows you to meet your goals but also seeks to ensure that your dear
ones will continue to live their lives in comfort without financial worries in case of
unforeseen eventuality. UIN - 105N116V01
ICICI Pru Save 'n' Protect is plan for those who want to accumulate funds on a regular
basis while enjoying insurance protection. UIN - 105N004V02
ICICI Pru CashBak is a single policy that combines the triple benefit of protection, savings
& periodic liquidity. UIN - 105N005V02
Protection Solutions
ICICI Pru iCare is a term insurance plan that you can buy online at your convenience at
their home in a simple manner. UIN - 105N122V01
ICICI Pru Pure Protect is a flexible and affordable term product, with which you can
ensure your life and provide total security for your family in case of an unfortunate event.
UIN - 105N084V01
ICICI Pru LifeGuard is a protection plan, which offers life cover at low cost. It is available
in 2 options –level term assurance with return of premium & single premium. UIN -
105N006V02
Child Plans
ICICI Pru SmartKid Regular Premium is an endowment regular premium life insurance
plan which comes with a unique Payer Waiver Benefit (PWB). This benefit ensures that in
case of death of the parent, the company pays all future premiums on behalf of the parent.
This means that the child gets money at important stages of his/her student life and education
never suffers due to lack of funds.UIN No - 105N014V02
ICICI Pru SmartKid Premier is a ULIP plan which ensures your child’s education
continues even if you are not around. In this Plan you need to invest premiums regularly over
a period of time and the returns that you get will depend on the performance of the
underlying fund performance. UIN - 105L120V01
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Retirement Solutions
ICICI Pru Immediate Annuity is a single premium annuity product that guarantees income
for life at the time of retirement. It offers the benefit of 5 payout options. UIN - 105N009V06
Health Solutions
ICICI Pru Hospital Care II is a family floater plan covering your spouse and children. This
fixed benefit hospitalisation and surgical plan complements your existing coverage by
offering payouts over and above any health plan you have, thus availing best possible medical
treatment, without having to bother about the cost of the treatment or quality of care. UIN -
105N108V01
ICICI Pru Crisis Cover is a product that will provide long-term coverage against 35 critical
illnesses, total and permanent disability, and death. UIN - 105N072V01
ICICI Pru Health Saver is a whole of life comprehensive health insurance policy which
provides a hospitalisation cover for you and your family and reimburses all other medical
expenses not covered in the hospitalisation benefit by building a health fund for you and your
family. UIN - 105L087V01
ICICI Prudential also offers Group Insurance Solutions for companies seeking to enhance
benefits to their employees.
Group Gratuity Plan: ICICI Prudential Life's group gratuity plan helps employers fund
their statutory gratuity obligation in a scientific manner and also avail of tax benefits as
applicable to approved gratuity funds.
Group Leave encashment Plan: ICICI Prudential Life’s Group offers a market linked and
traditional leave encashment plan designed to aid the employer to build a fund to meet their
future leave encashment liability. The contributions made will be invested as per the chosen
investment plans and will be available for payment of the benefit when it falls due.
Additionally, the product also provides for term cover for all the employees covered under
the policy. UIN - 105L079V01
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Group Term Insurance Plan: ICICI Prudential Life's flexible group term is a one-year
renewable life insurance policy that enables you to provide every member of your team with
an affordable life cover.
Group Term in lieu of EDLI Scheme: ICICI Prudential's Group Insurance Scheme in lieu
of EDLI has been certified by the Employee Provident Fund Organization (EPFO) as a
superior product that provides greater insurance benefits than the cover offered by EPFO.
Credit Assure With Credit Assure, we offer an innovative and affordable term life
insurance plan that covers loans against the unfortunate event of death, with complete
convenience in application. The scheme is simple and hassle-free. In other words, peace of
mind guaranteed.
ICICI Prudential Life offers flexible riders, which can be added to the basic policy at a
marginal cost, depending on the specific needs of the customer.
Accident & disability benefit: If death occurs as the result of an accident during the term of
the policy, the beneficiary receives an additional amount equal to the rider sum assured under
the policy. If an accident results in total and permanent disability, 10% of rider sum assured
will be paid each year, from the end of the 1st year after the disability date for the remainder
of the base policy term or 10 years, whichever is lesser.
Critical illness benefit: Critical Illness Benefit Rider provides protection against 9 critical
illnesses to the policyholder when attached to the basic plan.
Income Benefit Rider: In case of death of the life assured during the term of the policy,
10% of the rider sum assured is paid annually to the beneficiary, on each policy anniversary
till maturity of the rider. Income Benefit rider is available with Smart Kid Child Plans.
Premiums paid under this rider are eligible for tax benefits under Section 80C.
Waiver of Premium Rider (WOP): On total and permanent disability due to an accident, all
future premiums for both the base policy and rider(s) will be waived till the end of the term of
the rider or death of the life assured, if earlier.
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Waiver of Premium Rider on Critical Illness Rider: This rider waives all your future
premiums of your base policy on occurrence of specified 20 Critical Illnesses. This ensures
that your policy benefits continue as planned.
Awards:
ICICI Bank has been adjudged winner at the Express IT Innovation Award under the
Large Enterprise category.
ICICI Bank wins awards under the categories of 'Most Innovative Bank' and 'Most
Innovative use of Multi-Channel Infrastructure' at the Indian Bank's Association's
BANCON Innovation Awards 2013.
ICICI Bank won the Asian Banking & Finance Retail Banking Award 2013 for the
Online Banking Initiative of the Year
ICICI Bank won an award under the Social Media category at the InformationWeek
EDGE Award
Ms. Chanda Kochhar, MD and CEO has been awarded as the Best CEO - Private
Sector category at the Forbes India Leadership Awards 2013
ICICI Prudential Life Insurance has been pronounced winner in the 2nd Excellence
Awards and Recongnition for Shared Services, 2012. We won the award in the
category - Shared Services in India - Insurance Domain.
These awards have been instituted by All India Management Association (AIMA) &
Delhi Management Association (DMA), in collaboration with Rvalue Consulting as
knowledge partners, to honour,recognize & promote trasformative strategies for
shared services.
Ms. Chanda Kochhar, Managing Director & CEO was awarded the "CNBC Asia India
Business Leader Of The Year Award". She also received the "CNBC Asia's CSR
Award 2011"
For the third year in a row ICICI Bank has won The Asset Triple A Country Awards
for Best Domestic Bank in India
ICICI Bank won the Most Admired Knowledge Enterprises (MAKE) India 2009
Award. ICICI Bank won the first place in "Maximizing Enterprise Intellectual
Capital" category, October 28, 2009
Ms Chanda Kochhar, MD and CEO was awarded with the Indian Business Women
Leadership Award at NDTV Profit Business Leadership Awards , October 26, 2009.
ICICI Bank received two awards in CNBC Awaaz Consumer Awards; one for the
23
most preferred auto loan and the other for most preferred credit Card, on September
30, 2009
Ms. Chanda Kochhar, Managing Director & CEO ranked in the top 20 of the World's
100 Most Powerful Women list compiled by Forbes, August 2009
Financial Express at its FE India's Best Banks Awards, honoured Mr. K.V. Kamath,
Chairman with the Lifetime Achievement Award , July 25, 2009
ICICI Bank won Asset Triple A Investment Awards for the Best Derivative House,
India. In addition ICICI Bank were Highly commended , Local Currency Structured
product, India for 1.5 year ADR GDR linked Range Accrual Note., July 2009
ICICI bank won in three categories at World finance Banking awards on June 16,
2009
o Best NRI Services bank
o Excellence in Private Banking, APAC Region
o Excellence in Remittance Business, APAC Region
ICICI Bank Mobile Banking was adjudged "Best Bank Award for Initiatives in
Mobile Payments and Banking" by IDRBT, on May 18, 2009 in Hyderabad.
ICICI Bank's b2 branchfree banking was adjudged "Best E-Banking Project
Implementation Award 2008" by The Asian Banker, on May 11, 2009 at the China
World Hotel in Beijing.
ICICI Bank bags the "Best bank in SME financing (Private Sector)" at the Dun &
Bradstreet Banking awards 2009.
ICICI Bank NRI services wins the "Excellence in Business Model Innovation Award"
in the eighth Asian Banker Excellence in Retail Financial Services Awards
Programme.
ICICI Bank's Rural Micro Banking and Agri-Business Group wins WOW Event &
Experiential Marketing Award in two categories - "Rural Marketing programme of the
year" and "Small Budget On Ground Promotion of the Year". These awards were
given for Cattle Loan 'Kamdhenu Campaign' and "Talkies on the move campaign'
respectively.
ICICI Bank's Germany Branch has been certified by "Stiftung Warrentest". ICICI
Bank is ranked 2nd amongst 57 savings products across 19 banks
ICICI Bank Germany won the yearly banking test of the investor magazine €uro in
the "call money"category.
The ICICI Bank was awarded the runner's up position in Gartner Business
Intelligence and Excellence Award for Asia Pacific for its Business Intelligence
24
functions.
ICICI Bank's Organisational Excellence Group was recently awarded ISO 9001:2008
certification by TUV Nord. The scope of certification comprised processes around
consulting and capability building on methods of quality & improvements.
ICICI Bank has been awarded the following titles under The Asset Triple A Country
Awards for 2009:
o Best Transaction Bank in India
o Best Trade Finance Bank in India
o Best Cash Management Bank in India
o Best Domestic Custodian in India
ICICI Bank has bagged the Best Cash Management Bank in India award for the
second year in a row. The other awards have been bagged for the third year in a row.
ICICI Bank Canada received the prestigious Canadian Helen Keller Award at the
Canadian Helen Keller Centre's Fifth Annual Luncheon in Toronto. The award was
given to ICICI Bank its long-standing support to this unique training centre for people
who are deaf-blind.
ICICI Foundation for Inclusive Growth (ICICI Foundation) was founded by the ICICI Group
in early 2008 to give focus to its efforts to promote inclusive growth amongst low-income
Indian households.
We believe our fundamental challenge is to create a “just” society – one where everyone has
equal opportunity to develop and grow. Towards this end, ICICI Foundation is committed to
making India’s economic growth more inclusive, allowing every individual to participate in
and benefit from the growth process.
We hold a set of core beliefs and values that defines our pathway towards inclusive growth
and guides our five strategic partnerships.
Vision
Our vision is a world free of poverty in which every individual has the freedom and power to
create and sustain a just society in which to live.
Mission
Our mission is to create and support strong independent organisations which work towards
empowering the poor to participate in and benefit from the Indian growth process.
25
As a key partner in India's economic growth for more than five decades, the ICICI Group
endeavours to promote growth in all sectors of the nation ’s economy. To give focus to its
efforts to promote inclusive growth amongst low-income Indian households, the ICICI Group
founded ICICI Foundation for Inclusive Growth in January 2010.
The foundations of ICICI Group’s approach towards human and social development were
established with the Social Initiatives Group (SIG), a non-profit resource group within ICICI
Bank, in 2000.
ICICI Foundation for Inclusive Growth (ICICI Foundation) has been set up as a public
charitable trust registered at Chennai vide registration of the Trust Deed with the Sub-
Registrar’s Office at Chennai on January 04, 2010.
The application for registration of the Foundation under section 12AA of the Income tax Act,
1961 (“the Act”) was filed on February 7, 2008 and the application under section 80G of the
Act was filed on February 14, 2008. Subsequently, ICICI Foundation was registered as a
“PUBLIC CHARITABLE TRUST” under Section 12AA of the Act with effect from February
7, 2008. Further, ICICI Foundation received approval under Section 80G(5)(vi) of the Act on
March 19, 2008. This approval is valid in respect of donation received by ICICI Foundation
from February 14, 2008 to March 31, 2009. Accordingly, ICICI Bank and Group Companies
will be eligible to get a deduction under section 80G on donations made during this period.
ICICI Foundation has also obtained its Permanent Account Number (PAN) and Tax deduction
Account Number (TAN).
ICICI Group Corporate Social Responsibility Programmers
Read to Lead
Read to Lead is an initiative of ICICI Bank to facilitate elementary education for
disadvantaged children in the age group of 6-13 years. An amount of Rs.25.00 million has
thus far been disbursed to 100,000 children through 30 NGOs. The balance amount of
Rs.75.00 million is planned to be disbursed during the period 2009-2010.
MITRA (ICICI Fellows Programme)
MITRA is an affiliate of CSO Partners that is focused on addressing the challenge of human
resources for civil society organisations (CSOs). In partnership with CSO Partners and
MITRA, ICICI Foundation proposes to launch an ICICI Fellows Programme. An amount of
Rs.55.00 million has been disbursed to MITRA for developing and launching the programme
over the period 2009-2010.
CARE (Disaster Management Unit)
26
A grant of Rs.5.00 million has been given to CARE in India to enable it to prepare for any
future disasters that may strike and respond immediately with the required relief efforts.
Rang De (Micro Enterprise Development)
Rang De, an affiliate of CSO Partners, has partnered with ICICI Venture to roll out funds for
micro enterprise development in rural and semi-urban locations. The amount of Rs.25.00
million that has been disbursed to them will support micro enterprises to the extent of
Rs.15.00 million and the balance amount of Rs.10.00 million will go towards meeting their
expenses to build the platform.
27
CHAPTER III
REVIEW OF LITERATURE
28
REVIEW OF LITERATURE
Meaning:
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.
Cash management is concerned with the managing of: (i) Cash flows into and out of
the firm, (ii) Cash flows within the firm, and (iii) Cash balances held by the firm at a point of
time by financing deficit or investing surplus cash. It can be represented by a cash
management cycle. Sales generate cash which has to be disbursed out. The surplus cash has
to be invested while deficit this cycle at a minimum cost. At the same time, it also seeks to
achieve liquidity and control. Cash management assumes more importance than other current
assets because cash is the most significant and the least productive asset that a firm’s holds.
It is significant because it is used to pay the firm’s obligations. However, cash is
unproductive. Unlike fixed assets or inventories, it does not produce goods for sale.
Therefore, the aim of cash management is to maintain adequate control over cash position to
keep the firm sufficiently liquid and to use excess cash in some profitable way.
In order to resolve the uncertainty about cash flow prediction and lack of
synchronization between cash receipts and payments, the firm should develop appropriate
strategies for cash management. The firm should evolve strategies for cash management.
The firm should evolve strategies regarding the following four facets of cash management.
Cash planning: Cash inflows and outflows should be planned to project cash surplus
or deficit for each period of the planning period. Cash budget should be prepared for
this purpose.
Managing the cash flows: The firm should decide about the properly managed. The
cash inflows should be accelerated while, as far as possible, the cash outflows should
be decelerated.
Optimum cash level: the firm should decide about the appropriate level of cash
balances. The cost of excess cash and danger of cash deficiency should be matched to
determine the optimum level of cash balances.
Investing surplus cash: The surplus cash balances should be properly invested to
earn profits. The firms should decide about the division of such cash balances
between alternative short-term investment opportunities such as bank deposits,
marketable securities, or inter-corporate lending.
30
the firm should maintain some cash balance to be able to make required payments. For
transactions purpose, a firm may invest its cash in marketable securities. Usually, the firm
will purchase securities whose maturity corresponds with some anticipated payments, such as
dividends or taxes in the future. Notice that the transactions motive mainly refers to holding
cash to meet anticipated payments whose timing is not perfectly matched with cash receipts.
PRECAUTIONARY MOTIVE
The precautionary motive is the need to hold cash to meet contingencies in the future.
It provides a cushion or buffer to withstand some unexpected emergency. The precautionary
amount of cash depends upon the predictability of cash flows. If cash flows can be predicted
with accuracy, less cash will be maintained for an emergency. The amount of precautionary
cash is also influenced by the firm’s ability to borrow at short notice when the need arises.
Stronger the ability of the firm to borrow at short notice, less the need for precautionary
balance. The precautionary balance may be kept in cash and marketable securities.
Marketable securities play an important role here. The amount of cash set aside for
precautionary reasons is not expected to earn anything; the firm should attempt to earn some
profit on it. Such funds should be invested in high-liquid and low-risk marketable securities.
Precautionary balances should, thus, be held more in marketable securities and relatively less
in cash.
SPECULATIVE MOTIVE
The speculative motive relates to the holding of cash for investing in profit-making
opportunity to make profit may arise when the security prices change. The firm will hold
cash, when it is expected that interest rates will rise and security prices will fall. Securities
can be purchased when the interest rate is expected to fall; the firm will benefit by the
subsequent fall in interest rates and increase in security prices. The firm may also speculate
on materials prices. If it is expected that materials prices will fall, the firm can postpone
materials purchasing and make purchases in future when pric4e actually falls. Some firms
may hold cash for speculative purposes. By and large, business firms do not engage in
speculations. Thus, the primary motives to hold cash and marketable securities are: the
transactions and the precautionary motives.
31
CASH PLANNING
Cash flows are inseparable parts of the business operations of firms. A firm needs
cash to invest in inventory, receivable and fixed assets and to make payment for operating
expenses in order to maintain growth in sales and earnings. It is possible that firm may be
making adequate profits, but may suffer from the shortage of cash as its growing needs may
be consuming cash very fast. The ‘poor cash’ position of the firm cash is corrected if its cash
needs are planned in advance. At times, a firm can have excess cash may remain idle. Again,
such excess cash outflows. Such excess cash flows can be anticipated and properly invested
if cash planning is resorted to. Cash planning is a technique to plan and control the use of
cash. It helps to anticipate the future cash flows and needs of the firm and reduces the
possibility of idle cash balances ( which lowers firm’s profitability ) and cash deficits (which
can cause the firm’s failure).
Cash planning protects the financial condition of the firm by developing a projected
cash statement from a forecast of expected cash inflows and outflows for a given period. The
forecasts may be based on the present operations or the anticipated future operations. Cash
plans are very crucial in developing the overall operating plans of the firm.
Cash planning may be done on daily, weekly or monthly basis. The period and
frequency of cash planning generally depends upon the size of the firm and philosophy of
management. Large firms prepare daily and weekly forecasts. Medium-size firms usually
prepare weekly and monthly forecasts. Small firms may not prepare formal cash forecasts
because of the non-availability of information and small-scale operations. But, if the small
firms prepare cash projections, it is done on monthly basis. As a firm grows and business
operations become complex, cash planning becomes inevitable for its continuing success.
OTHER FACTORS THAT AFFECT THE SIZE OF CASH BALANCE
1. Availability of short-term credit:
To avoid holding unnecessary large balances of cash, most firms attempt to make
arrangements at borrow money is case of unexpected needs. With such an agreement, the
firm normally pays interest only during the period that the money is actually used.
The management should, after knowing the cash position by means of the cash
budget, work out the basic strategies to be employed to manage its cash.
CASH CYCLE:
The cash cycle refers to the process by which cash is used to purchase materials from
which are produced goods, which are them sold to customers.
Cash cycle=Average age of firm’s inventory
+Days to collect its accounts receivables
-Days to pay its accounts payable.
The cash turnover means the numbers of times firm’s cash is used during each year.
360
Cash turnover = ----------------
Cash cycle
The higher the cash turnover, the less cash the firm requires. The firm should, therefore, try
to maximize the cash turn.
MANAGING COLLECTIONS:
a) Prompt Billing:
By preparing and sending the bills promptly, without a time log between the dispatch
of goods and sending the bills, a firm can ensure earlier remittance.
33
b) Expeditious collection of cheques:
An important aspect of efficient cash management is to process the cheques receives
very promptly.
c) Concentration Banking:
Instead of a single collection center located at the company headquarters, multiple
collection centers are established. The purpose is to shorten the period between the time
customers mail in their payments and the time when the company has use of the funds are
then to a concentration bank – usually a disbursement account.
d) Lock-Box System:
With concentration banking, a collection center receives remittances, processes them and
deposits them in a bank. The purpose is to lock-box system is to eliminate the time between
the receipt of remittances by the company and their deposit in the bank. The company rents a
local post office box and authorizes its bank in each of these cities to pick up remittances in
the box. The bank picks up the mail several times a day and deposits the cheque in the
company’s accounts. The cheques are recorded and cleared for collection. The company
receives a deposits the cheque in the company’s accounts. The cheques are recorded and
cleared for collation. The company receives a deposit slip and a lift of payments. This
procedure frees the company from handling a depositing the cheques.
CONTROL OF DISBURSMENT
b) Centralized Disbursement
One procedure for rightly controlling disbursements is to cenrealise payables in to a
single account, presumably at the company’s headquarters. Such an arrangement would
enable a firm to delay payments and can serve cash for several reasons. Firstly, it increases
transit time. Secondly, if a firm has a centralized bank account, a relatively smaller total cash
balances will be needed.
34
c) Bank Draft
Unlike an ordinary cheque, the draft is not payable on demand. When it is presented
to the issuer’s bank for collection, the bank must present it to the issuer for acceptance. The
funds then are deposited by the issuing firm to cover payments of the draft. But suppliers
prefer cheques. Also, bank imposes a higher service charge to process them since they
require special attention, usually manual.
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.
35
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.,
36
inventory management problem. As such, the firm attempts to minimize the sum of the cost
of holding cash (inventory of cash) and the cost of converting marketable securities to cash.
The baumol’s model makes the following assumptions:
The firm is able to forecast its cash needs with certainty.
The firm’s cash payments occur uniformly over a period of time.
The opportunity cost of holding cash is known and it does not change over time.
The firm will incur the firm sells securities and starts with a converts securities to
cash.
Cash balance
C/2 Average
Time
0 T1 T2 T3
Baumol’s model for cash balance
Our review has found that Transportation has made significant progress or completed
most of the recommendations made in our 2002 special report. Complete implementation of
these changes will take at least four to five years.
Over the last two years, Transportation’s management has started not only
implementing recommendations, but more importantly begun implementing a change in the
corporate and cultural structure of the organization. The success of change with
Transportation will depend on whether a true structural change in organization takes place.
The measure of success will require a substantial long-term commitment by management to
not only making the change, but to prevent backsliding into Transportation’s old approaches.
In some ways, the accomplishments to date are the easy part of change. The harder
part lays ahead in funding and implementing new systems, continuing to make the changes to
get closer to capital budgeting process, and overcoming Transportation’s corporate and
38
cultural structure to improve project management. The success of this effort is highly
dependent on management guidance and direction, and current management has
demonstrated their dedication towards this effort. If any management change occurs, it is
essential that they have the same commitment; otherwise, progress may be negatively
impacted.
Transportation has completed several budgetary and financial changes, including attempts to
make the Six-Year Improvement Program a realistic management tool and reduce the projects
with a deficit status.
However, to ensure accurate matching on cash inflows and outflows, Transportation must
begin estimating the cost of projects by fiscal year. Transportation does not currently have
sufficient controls and processes in place to manage the rate at which they spend funds.
For major projects, Transportation has begun assigning a project management team that
follows a project from its inception to its completion. However, it is still too early in the
process to determine if the policies put into place will provide Transportation with better
project management. However, the actions to date are those considered best practices in both
the private and public for large organizations.
39
3. Ms. Katherine M. Landmann Controller Washington University in St.
Louis Campus.
This final report presents the results of our audit of the cash management procedures
used by Washington University in St. Louis (University) to control the funds paid by the
Payment Management System (PMS) during the three years ended June 30, 2000.
We found that the University did not have adequate policies and procedures in place
to monitor daily cash balances and to precisely calculate interest earned on positive daily cash
balances. In monitoring the daily cash balances, the University did not consider (1)
outstanding checks and (2) overhead costs as incurred. In addition, the University did not use
the appropriate interest rates when calculating the interest remitted to the Federal
government.
We determined that the amount of excess interest remitted by the University was
comparable to the amount of interest that should have been remitted if appropriate procedures
had been used. We believe that this occurrence was a coincidence due to off setting factors in
the University’s calculation of the amount to be remitted.
We are recommending that the University revise its written policies and procedures to
effectively monitor the daily cash balance and to accurately compute the Federal remittance.
We made four specific recommendations for improving the University’s cash management
procedures. The University concurred with two and is still evaluating the third. However,
they did not accept our fourth recommendation. The University’s response is included in its
entirety as Appendix A.
4. Cash Management by Enid Beverly Jones
The economics and politics of education are discussed in the context of human capital
and the role of public education in the United States as an investment in human capital.
Author Enid Jones, who is an associate professor of school finance at Fayetteville State
40
University, stresses the importance of investment in human capital and its necessity for an
educated, productive workforce.
The chapter on adequacy and equity provides an understanding of the two concepts so
frequently debated in school finance. As more states struggle with funding issues, this subject
matter is timely and useful.
Cash Management seems intended for use nationwide with information on basic
school business procedures, including budgeting and financing of school facilities. The use of
lay terminology and relevant examples make the book valuable both in graduate school
classes on educational leadership and in the hands of practicing administrators.
41
CHAPTER IV
DATA ANALYSIS
&
INTERPRETATION
42
DATA ANALYSIS & INTERPRETATION
ADD:
Sundry debtors 736292 293962
Prepaid Expenses 43200
Sundry creditors 4731130 1710210 10643203
Outstanding liabilities 1009534 91841
Bank O/D 2950464 10801353
LESS:
Stock 1497634 567073 1755576 1106913
Bank O/D 2950464
Outstanding liabilities 767131 334244
Sundry Debtors 9562393 910746
Sundry Creditors 1699354
43
4.2 CASH FLOW STATEMENT
Inflow 2006-2007 2008-2009 2010-2011 2012-2013
Opening balance 14564 64678 104545 63582
Cash from operation 9854229 342963 1516020 8950797
Increase in loan funds 2410798
Outflows
Cash outflow from
operation
Purchase of Asset 9776411 6767781 7004825
Decrease in loan 27704 900340 1731144
funds
Decrease in share 200000
capital
Closing balance 64678 104545 63582 278410
Total 9868793 1204885 6831363 9014379
Inference:
This table shows that the cash flow statements of ICICI BANK LTD.. are to be
efficient. The cash inflow of the company is to be increased for year after year. The fund
from operation is also to differ from every year. The company should increase their share
capital from 2006-2007 for Rs. 28, 00,000. Its must be used as efficient for the next year for
decrease their loan amount.
44
4.3 TREND ANALYSIS
Y = a + bX
Where a = ∑Y ; b = ∑XY
n ∑X2
4.3.1 INVENTORIES
Inventories
YEAR X X2 (Rs in lakhs) XY
Y (Rs in lakhs)
’08– ‘09 -2 4 27,76,072 -55,52,144
’09– ‘10 -1 1 12,78,438 -12,78,438
’10– ‘11 0 0 18,45,511 0
’11– ‘12 1 1 36,01,087 36,01,087
’12 – ‘13 2 4 47,08,000 94,16,000
TOTAL 10 1,42,09,108 61,86,505
This table indicates that the volume of inventory has been increased every year. Its
must be increased for the last year 11, 06,913. Inventories value in 2008 will be about
21, 40,134.1
45
4.3.2 SUNDRY DEBTORS
Sundry
YEAR X X2 Debtors XY
(Rs) (Rs)
Y
’08– ‘09 -2 4 20,69,513 -41,39,026
’09– ‘10 -1 1 28,05,805 -28,05,805
’10 – ‘11 0 0 25,11,842 0
’11– ‘12 1 1 1,20,74,236 1,20,74,236
’12– ‘13 2 4 1,29,84,982 2,59,69,964
TOTAL 10 3,24,46,378 3,10,99,369
This table shows that the Sundry Debtors has been more every year. It must be
increased more than 6 times from the beginning of the period of the study. Sundry Debtors
46
4.3.3 CASH / BANK
Cash / Bank
YEAR X X2 (Rs) XY
Y (Rs)
’02– ‘03 -2 4 14,564 -29,128
’03 – ‘04 -1 1 64,679 -64,679
’04 – ‘05 0 0 61,858 0
’05 – ‘06 1 1 63,582 63,582
’06 – ‘07 2 4 2,78,410 5,56,820
TOTAL 10 4,83,093 5,26,593
a = 4, 83,093 = 96,618.6
5
b = 5, 26,593 = 52,659.3
10
Inference:
The cash value of the ICICI BANK LTD.. has been increased and the estimated it
should be decreased for the previous year. Cash value in 2013 will be about 254596.5.
47
Loans &
YEAR X X2 Advances XY
(Rs) (Rs)
Y
’08– ‘09 -2 4 1,00,065 -2,00,130
’09– ‘10 -1 1 8,26,377 -8,26,377
’10 –11 ‘ 0 0 3,60,138 0
’11– ‘12 1 1 27,70,937 27,70,937
’12– ‘13 2 4 5,62,837 11,25,674
TOTAL 10 46,20,354 28,70,104
Inference:
The table indicates that the loans and advances of ICICI BANK LTD. will be reduced
from the year 2012-2013. Loans & Advances value in 2013 will be about 17,
85,102.
48
Current
YEAR X X2 Liabilities XY
(Rs) (Rs)
Y
08-09 -2 4 22,58,576 -45,17,152
09-11 -1 1 57,45,442 -57,45,442
10-11 0 0 38,56,338 0
11-12 1 1 1,44,73,102 1,44,73,102
12-13 2 4 1,25,88,203 2,51,76,406
TOTAL 10 3,89,21,661 2,93,86,914
Inference:
The table shows that the company’s current liability will be increased from the every
year.
Current Liabilities value in 2013 will be about 1, 66, 00,406.4.
Current asset
X X2 (Rs) XY
YEAR Y (Rs)
08-09 -2 4 21,27,277 -42,54,554
49
09-10 -1 1 41,48,921 -41,48,921
10-11 0 0 59,74,933 0
11-12 1 1 1,85,09,842 1,85,09,842
12-13 2 4 2,03,50,240 4,07,00,480
TOTAL 10 5,11,11,213 5,08,06,947
a = 5,11,11,213 = 1,02,22,242.6
5
b = 5,08,06,947 = 50,80,694.7
10
Inference:
This table shows that the current asset of the company will be grown at 9times. When
compared to the beginning of the period of study its must be increased. Current Asset value
in2013will be about 2, 54,64,326.7.
RATIO ANALYSIS:
50
Ratio helps to summarize large quantities of financial data and to make
qualitative judgment about the firm’s financial performance.
Fixed Assets
Current Assets to Fixed Assets Ratio
51
Increase/
YEAR Decrease
RATIO
2008– 09 0.94:1
2009 – 10 0.72:1 -0.22
2010 – 11 1.55:1 0.82
2011 – 12 1.28:1 -0.27
2012– 13 1.62:1 0.34
. 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.
Total Assets
Current Assets to Total Assets Ratio
Increase/
YEAR Decrease
RATIO
52
2008-09 0.26:1
2009-10 0.48:1 0.22
2010-11 0.62:1 0.14
2011-12 0.59:1 -0.03
2012-13 0.59:1
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 0.26 to 0.48 times
during the study. There is no change for last year.
Net Assets
53
2009-2010 0.12:1 - 0.15
2010-2011 0.15:1 0.03
2011-2012 0.21:1 0.06
2012-2013 0.22:1 0.01
Inference:
Net Working Capital is used as a measure of a firm’s liquidity and the firm’s
potential reservoir of funds. It can also be relate to net assets.
The Net Working Capital Ratio from the table shows a fluctuating trend and the
average Net Working Capital Ratio is 0.21 times of Net Working Capital to Net Assets. Hence
it shows that ICICI BANK LTD.. has an average liquidity position.
Current Assets
54
Increase/
YEAR Decrease
RATIO
2008-09 1.30:1
2009-10 0.31:1 -0.99
2010-11 0.31:1
2011-12 0.19:1 -0.12
2012-13 0.23:1 0.04
Inference:
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 0.31 times and thus it is found that the investment in inventories
(being one of the important Current Assets) is kept at the considerable level.
Current Assets
Sundry Debtors to Current Assets Ratio
Increase/
YEAR Decrease
55
RATIO
2008-09 0.97:1
2009-10 0.68:1 -0.29
2010-11 0.42:1 - 0.26
2011-12 0.65:1 0.23
2012-13 0.63:1 -0.02
Inference:
From the table the Sundry Debtors to Current Assets Ratio shows a fluctuating trend
throughout the study period from 2002-03 to 2006-07.
The average ratio is 0.65 times. Hence it implies the credit policy followed by ICICI
BANK LTD.. is moderate.
Current Assets
56
Increase/
YEAR Decrease
RATIO
2008-09 0.02:1
2009-10 0.19:1 0.17
2010-11 0.06:1 -0.13
2011-12 0.15:1 0.09
2012-13 0.02:1 - 0.13
Inference:
From the table it is noted that the Loans and Advances to Current Assets Ratio have
registered a fluctuating trend.
It implies that a quarter positions of the Current Assets are kept in for Loans and
Advances; thereby it is found that ICICI BANK LTD. value of Loans and Advances is
considerable.
Current Assets
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Increase/
YEAR Decrease
RATIO
2008-09 0.006:1
2009-10 0.015:1 0.09
2010-11 0.01:1 -0.14
2011-12 0.003:1 - 0.007
2012-13 0.013:1 0.01
Inference:
The table shows the details of Cash to Current Assets Ratio and registered a
fluctuating trend throughout the study period from 2002-03 to 2006-07.
Hence we find that ICICI BANK LTD. had maintained a moderate level of cash in
proportion to Current Assets.
Working Capital
Cash to Working Capital Ratio
Increase/
YEAR Decrease
RATIO
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2008-09 0.11:1
2009-10 0.04:1 - 0.07
2010-11 0.03:1 - 0.01
2011-12 0.07:1 0.04
2012-13 0.06:1 -0.01
Inference:
The Cash to Working Capital Ratio registered a fluctuating trend during the study
period this is noted from the table. It was 0.11 times in 2004-05, which sharply increased to
0.04 times in the next year and later for the following years it is fluctuating.
Hence it is found that 4% of the Working Capital ratio is managed by using the cash
& bank balance available in the company.
The policy regard financing the Working Capital in KESORAM CEMENT PVT LTD.
can be said as aggressive policy.
Sales
Cash to Sales Ratio
Increase /
YEAR Decrease
RATIO
2008-09 0.0007:1
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2009-10 0.0026:1 0.0019
2010-11 0.0028:1 0.0002
2011-12 0.0069:1 0.0041
2012-13 0.0064:1 - 0.0005
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 fluctuating trend throughout
the study period.
Current liabilities
Cash Ratio
Increase /
YEAR Decrease
RATIO
2008-09 0.0064:1
2009-10 0.0112:1 0.0048
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2010-11 0.0160:1 0.0048
2011-12 0.0044:1 -0.0116
2012-13 0.0221:1 0.0177
Inference:
From the table it is noted that the cash position of the KESORAM CEMENT PVT
LTD. is satisfactory.
It is found that the cash required to meet out the current liabilities is maintained at a
normal level.
Current liabilities
Current Ratio
Increase /
YEAR Decrease
RATIO
2008-09 0.94: 1
2009-10 0.72: 1 -0.22
2010-11 1.55: 1 0.83
2011-12 1.27: 1 -0.28
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2012-13 1.62: 1 0.35
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 KESORAM CEMENT PVT LTD.
has been fluctuating from the starting of the study period, later for last year it has been
increasing; hence the Current Ratio is quite satisfactory.
Thus the Current Ratio shows that the company has sufficient funds to meet its short-
term obligations.
Current liabilities
Liquidity Ratio
Increase /
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From the table it is clear that ICICI BANK LTD.. liquid ratio is more than the ideal ratio
during the starting of the study period and later in 2004 - 05 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.
Quick liabilities
Super Quick Ratio
Increase /
YEAR Decrease
RATIO
2008-09 0.65:1
2009-10 0.32:1 -0.33
2010-11 0.58:1 0.26
2011-12 0.62:1 0.04
2012-13 0.64:1 0.02
Inference:
Super Quick Ratio is the healthy measure of the firm’s liquidity position.
From the table 4.21 it is noted that the liquidity of ICICI BANK LTD.. had a steep slope
in between during the year 2003-04, yet it was able to have a slow increase in the rest of
the study period and able to maintain its position.
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Hence it shows that ICICI BANK LTD.. is able to meet its current obligations
(liabilities).
Working Capital
Working Capital Turnover
Increase /
YEAR Decrease
RATIO
2008-09 12.36: 1
2009-10 17.70: 1 5.34
2010-11 11.55: 1 -25.15
2011-12 31.55: 1 20.00
2012-13 5.45: 1 -26.15
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.
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Hence the turnover indicates that ICICI BANK LTD.. had utilized its Working Capital
efficiently and the company can also try to work on this to get more effective values.
Average Stock
Inventories Turnover
YEAR Increase /
RATIO
Decrease
2008-09 1.36: 1
2009-10 1.02: 1 -0.34
2010-11 1.02: 1 0
2011-12 1.02: 1 0
2012-13 1.53: 1 0.51
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 ICICI BANK 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 ICICI BANK LTD. shows a satisfactory
position.
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4.4.16 Debtors Turnover Ratio
Sundry Debtors
Debtors Turnover
Increase /
YEAR Decrease
RATIO
2008-09 7.84: 1
2009-10 8.54: 1 0.70
2010-11 8.49: 1 -0.05
2011-12 3.30: 1 -5.19
2012-13 3.26: 1 -0.04
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.
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.
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4.4.17 Debt Collection Period Ratio
Increase /
YEAR Decrease
RATIO
2008-09 46.5
2009-10 42.7 -3.8
2010-11 81.29 39.79
2011-12 110.6 29.31
2012-13 111.9 1.3
Inference:
This ratio indicates the extent to which the debts have been colleted in time. It gives
the average debt collection period.
ICICI BANK 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.
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4.4.18 Cash Interval Measure Ratio
The formula for the ratio is Current Assets – Inventories
Increase /
YEAR Decrease
RATIO
2008 – 09 135.14
2009 – 10 104.27 -30.89
2010 – 11 136.44 32.17
2011 – 12 144.72 8.28
2012 – 13 146.13 1.41
Inference:
This ratio examines the firm’s ability to meet its regular cash expenses.
The defensive interval measures the time period for which a firm can operate on the
basis of present liquid assets without resorting to the next year’s revenue.
This ratio of ICICI BANK LTD.., from the table shows that the company can meet its
operating cash requirements within a period of 105 to 146 days without resorting to next
year’s income.
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CHAPTER-V
FIN DING
SUGGESTION
CONCLUSION
BIBLIOGRAPHY
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FINDINDS
The cash management of ICICI BANK LTD..has been working well in the
organization.
The Funds from operations of a company has been increased from year by year.
The cash from operations has been find that it used as efficient.
The cash inflow and outflow of cash flow statement have a cash balance will be
increased 4.2 times when compared to last year balance.
Current Ratio shows that the company has sufficient funds to meet its short-term
obligations.
The company’s Liquidity Ratio shows a satisfactory trend.
Super Quick Ratio shows that ICICI BANK LTD.is able to meet its current
obligations (liabilities)..
The efficiency of inventory control in ICICI BANK LTD..shows a satisfactory
position..
The Cash Ratio shows that the cash required to meet out the current liabilities is
maintained at a normal level hence, it shows that ICICI BANK LTD..follows an average
policy.
Interval Measure Ratio shows that the company can meet its operating cash
requirements within a period of 105 to 146 days without resorting to next year’s income.
The Current Assets to Total Assets Ratio implies that ICICI BANK LTD..is
maintaining a considerable level of Current Assets in proportion to Total Assets.
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The average Cash to Current Assets is maintained at 0.009 times. Hence, it is found
that the company had maintained a moderate level of cash in proportion to Current Assets.
The average ratio of Inventories to Current Assets is 0.46 times and thus it is found
that the investment in inventories.
The average ratio of Sundry Debtors to Current Assets is 0.67 times. Hence it implies
that the credit policy followed by ICICI BANK LTD.. is moderate.
The loans and Advances to Current Assets ratio of the company imply that a quarter
positions of the Current Assets are kept in for loans and advances, which is considerable.
The policy regard financing the Working Capital in ICICI BANK LTD. can be said as
Aggressive policy according to the Cash to Working Capital Ratio.
The average cash to sales ratio is 0.004 times and which indicates that only 0.4% of
sales has been maintained as cash with the business.
ICICI BANK LTD.should try to match their Cash with the sales. In case of surplus
Cash, it should be invested either in securities or should be used to repay borrowings.
The company should try to prepare a proper ageing schedule of debtors. This will help
them to reduce the bad debts and speed up collection efforts.
The company should be prompt in making payments so as to enjoy cash discount
opportunities
The company should determine the optimum cash balance to be kept.
The company followed an aggressive policy of financing working capital should try to
finance 50% of their working capital using long term source and improve their status.
The current Ratio of 2:1 is considered normally satisfactory. ICICI BANK LTD..
should try to improve the current ratio. So it should invest large amount in current
ratio, in order to maintain liquidity and solvency position of the concern.
The company should try to follow a matching policy for financing current Assets (i.e.)
using both long term and short-term sources of finances.
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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, trend
analysis, Cash Flow Statement and other accounting and financial management helped in this
study to find out the financial soundness of the company.
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 ICICI BANK 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 ICICI BANK LTD..
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BIBILIOGRAPHY
BOOKS:
S.N. Maheshwari, Financial management, Eleventh Edition 2006,
Sultan Chaqnd & Sons, Educational Publishers. New Delhi.
I.M Pandey, Financial management, Ninth Edition, Vikas publishing
house pvt Ltd.
M.Y Khan- P.K Jain, Management Accounting, Third edition, Tata Mc
Graw-Hill Publishing co. Ltd
B.L. Gupta, Management of Liquidity and Profitability, Arihant
Publishing House, Jaipur.
WEBSITE:
www.financeindia.org
www.fao.org
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