INTRODUCTION OF THE STUDY

Financial Management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. Though it was a branch of economics till 1890 as a separate or discipline it is of recent origin. Financial Management is concerned with the duties of the finance manager in a business firm. He performs such varied tasks as budgeting, financial forecasting, cash management, credit administration, investment analysis and funds procurement. The recent trend towards globalization of business activity has created new demands and opportunities in managerial finance. Financial statements are prepared and presented for the external users of accounting information. As these statements are used by investors and financial analysts to examine the firms performance in order to make investment decisions, they should be prepared very carefully and contain as much investment decisions, they should be prepared very carefully and contain as much information as possible. Preparation of the financial statement is the responsibility of top management. The financial statements are generally prepared from the accounting records maintained by the firm. Financial performance is an important aspect which influences the long term stability, profitability and liquidity of an organization. Usually, financial ratios are said to be the parameters of the financial performance. The Evaluation of financial performance had been taken up for the study with EMAMI LIMITED as the project. Analysis of Financial performances are of greater assistance in locating the weak spots at the Emami limited eventhough the overall performance may be satisfactory. This further helps in

 Financial forecasting and planning.  Communicate the strength and financial standing of the Emami limited.  For effective control of business.

ROLE OF FINANCE Finance is the life blood and the nerve center of the business, just as circulation of blood is essential in the human body for maintaining life; finance is very essential to smooth running of the business. It has been rightly termed as universal lubricant that keeps the enterprise dynamic. No business, whether big, medium or small can be started without an adequate amount of finance. Right from the very beginning, i.e conceiving an idea to the business, finance is needed to promote or establish the business, acquire fixed assets, make investigations such as market surveys, etc..Developproduct, keep men and machine at work, encourages management to make progress and create values. Even an existing concern may require further finance for making improvement or expanding the business. Thus the importance of finance cant be overemphasized and the subject of the business finance has become at most important both to academicians and practicing managers.

INDUSTRY PROFILE

Indian Railways , abbreviated as IR , is the state-owned railway company of India, which owns and operates most of the country's rail transport. It is overseen by the Ministry of Railways of the Government. Indian Railways has more than 64,015 kilometers (39,777 mi) of track and 6,909 stations. It has the world's fourth largest railway network after that of the United States, Russia and China. The railways traverse the length and breadth of the country and carry over 20 million passengers and 2 million tons of freight daily. It is one of the world's largest commercial or utility employers, with more than 1.6 million employees. As to rolling stock, IR owns over 200,000 (freight) wagons, 50,000 coaches and 8,000 locomotives. Railways were first introduced to India in 1853. By 1947, the year of India's independence, there were forty-two rail systems. In 1951 the systems were nationalized as one unit, becoming one of the largest networks in the world. IR operates both long distance and suburban rail systems on a multi-gauge network of broad, meter and narrow gauges. It also owns locomotive and coach production facilities. Initially, the Indian railways were both designed and built by the British, during their colonial rule of the subcontinent.

Organizational structure Indian Railways is a department owned and controlled by the Government of India, via the Ministry of Railways. As of December 2010, the Railway Ministry is headed by Mamata Banerjee, the Union Minister for Railways, and assisted by two ministers of State for Railways. Indian Railways is administered by the Railway Board, which has a financial commissioner, five members and a chairman

Railway zones Indian Railways is divided into zones, which are further sub-divided into divisions. The number of zones in Indian Railways increased from six to eight in 1951, nine in 1952, and finally 17 in 2010. Each zonal railway is made up of a certain number of divisions, each having a divisional headquarters. There are a total of sixty-seven divisions. The Delhi Metro is being built and operated by the Delhi Metro Rail Corporation Limited (DMRC). The Government of India and the Government of Delhi jointly set up a company called the Delhi Metro Rail Corporation (DMRC) on March 5, 1995 with E. Sreedharan as the managing director. He is Padma Vibhushan awardee (Second highest honor) by Government of India. It is no way connected to Indian Railways. Each of the seventeen zones, Including Kolkata Metro, is headed by a General Manager (GM) who reports directly to the Railway Board. The zones are further divided into divisions under the control of Divisional Railway Managers (DRM). The divisional officers of engineering, mechanical, electrical, signal and telecommunication, accounts, personnel, operating, commercial and safety branches report to the respective Divisional Manager and are in charge of operation and maintenance of assets. Further down the hierarchy tree are the Station Masters who control individual stations and the train movement through the track territory under their stations' administration

Recruitment and training With approximately 1.6 million employees, Indian Railways is the country's single largest employer. Staff are classified into gazetted (Group A and B) and non-gazetted (Group C and D) employees. The recruitment of Group Agazetted employees is carried out by the Union Public Service Commission through exams conducted by it. The recruitment to Group 'C' and 'D' employees on the Indian Railways is done through 19 Railway Recruitment Boards which are controlled by the Railway Recruitment Control Board (RRCB). The training of all cadres is entrusted and shared between six centralized training institutes.

Subsidiaries Indian Railways manufactures much of its rolling stock and heavy engineering components at its six manufacturing plants, called Production Units, which are managed directly by the ministry. As with most developing economies, the main reason for this was the policy of import substitution of expensive technology related products when the general state of the national engineering industry was immature. Each of these six production units is headed by a General Manager, who also reports directly to the Railway Board. There exist independent organizations under the control of the Railway Board for electrification, modernization and research and design, each of which is headed by a General Manager. A number of Public Sector Undertakings, which perform railway-related functions ranging from consultancy to ticketing, are also under the administrative control of the Ministry of railways.

Locomotives Indian railways uses a number of different Diesel and Electric locomotives, Steam locomotives were once very common but are now only used on heritage routes.

Technical details Indian railways uses four gauges, the 1,676mm broad gauge which is wider than the 1,435mm standard gauge; the 1,000mm meter gauge; and two narrow gauges, 762 mm (2 ft 6 in) and 610 mm (2 ft) . Track sections are rated for speeds ranging from 75 to 160 km/h. The total length of track used by Indian Railways was about 111,600 km (69,300 mi) while the total route length of the network was 64,061 km (39,806 mi) on 31 March 2010. About 31% of the route-kilometre and 46% of the total track kilometre was electrified on 31 March 2010. Broad gauge is the predominant gauge used by Indian Railways. Indian broad gauge1,676 mm (5 ft 6 in)is the most widely used gauge in India with 96,851 km of track length (86.8% of

entire track length of all the gauges) and 52,500 km of route-kilometre (81.95% of entire routekilometre of all the gauges) on 31 March 2010. In some regions with less traffic, the meter gauge (1,000mm) is common, although the Unigauge project is in progress to convert all tracks to broad gauge. The metre gauge had 11,676 km of track length (10.5% of entire track length of all the gauges) and 9,000 km of route-kilometre (14.04% of entire route-kilometre of all the gauges) on 31 March 2010. The Narrow gauges are present on a few routes, lying in hilly terrains and in some erstwhile private railways (on cost considerations), which are usually difficult to convert to broad gauge. Narrow gauges had a total of 2,500 route-kilometers on 31 March 2010. The Kalka-Shimla Railway, the Nilgiri Mountain Railway and the Darjeeling Himalayan Railway are three notable hill lines that use narrow gauge. Those three will not be converted under the Unigauge project. The share of broad gauge in the total route-kilometre has been steadily rising, increasing from 47% (25,258 route-km) in 1951 to more than 83% in 2010 whereas the share of meter gauge has declined from 45% (24,185 route-km) to less than 13% in the same period and the share of narrow gauges has decreased from 8% to 3%. However, the total route-kilometre has increased by only 18% (by just 10,000 km from 53,596 route-km in 1951) in the last 60 years. This compares very poorly with Chinese railways, which increased from about 27,000 route-km at the end of second world war to about 90,000 route-km in 2010, an increase of more than threefold. More than 28,000 route-km (34% of the total route-km) of Chinese railway is electrified compared to only about 20,059 route-km of Indian railways. This is an indication of the poor state of Indian railways where the funds allocated to new railway lines are meagre, construction of new uneconomic railway lines are taken up due to political interference without ensuring availability of funds and the projects incur huge cost and time overruns due to poor projectmanagement and paucity of funds. Sleepers (ties) used are made of prestressed concrete, or steel or cast iron posts, though teak sleepers are still in use on few older lines. The prestressed concrete sleeper is in wide use today. Metal sleepers were extensively used before the advent of concrete sleepers. Indian Railways divides the country into four zones on the basis of the range of

track temperature. The greatest temperature variations occur in Rajasthan, where the difference may exceed 70C. Traction As of March 2010, 20,059 km of the total 64,215 km route length is electrified. Since 1960, almost all electrified sections on IR use 25,000 V AC traction through overhead catenary delivery. A major exception is the entire Mumbai section, which uses 1,500 V DC. And is currently undergoing change to the 25,000 V AC systems. Another exception is the Kolkata Metro, which uses 750 V DC delivered through a third rail. Traction voltages are changed at two places close to Mumbai. Central Railway trains passing through Igatpuri switch from AC to DC using a neutral section that may be switched to either voltage while the locomotives are decoupled and swapped. Western Railway trains switch power on the fly, in a section between Virar (DC) and Vaitarna (AC), where the train continues with its own momentum for about 30 m through an electrified section of catenary called a dead zone. All electric engines and EMUs operating in this section are the necessary AC/DC dual system type (classified "WCAM" by Indian Railways).

Services Passenger Indian Railways operates about 9,000 passenger trains and transports 20 million passengers daily across twenty-eight states and two union territories. Sikkim and Meghalaya are the only states not connected by rail. A standard passenger train consists of eighteen coaches, but popular trains can have up to 26 coaches. Coaches are designed to accommodate anywhere from 18 to 108 passengers, but during the holiday seasons and/or on busy routes, more passengers may travel in unreserved coaches. Most regular trains have coaches connected through vestibules. However, 'unreserved coaches' are not connected with the rest of the train via any vestibule.

Reservation against cancellation service is a provision for shared berth in case the travel ticket is not confirmed. The last timetabled passenger service running under steam locomotive power ended in 2000, in Gujarat. All current passenger service is provided using electric or diesel locomotives, except for the rack section of the Nilgiri Mountain Railway (NMR) which still relies on Swiss-built X class steamers to do the job.

Types of passenger services Trains are classified by their average speed. A faster train has fewer stops ("halts") than a slower one and usually caters to long-distance travel. Rank 1 Train Duronto Expresses Description These are the non-stop point to point rail services (except for operational stops) introduced for the first time in 2009. These trains connects the metros and major state capitals of India and are faster than Rajdhani Expresses. The Duronto services consists of classes of accommodation namely first AC, two-tier AC, three-tier AC, AC 3 Tier Economy, Sleeper Class,General Class. 2 Rajdhani Expresses These are all air-conditioned trains linking major cities to New Delhi. The Rajdhanis have high priority and are one of the fastest trains in India, travelling at about 140 km/h (87 mph). There are only a few stops on a Rajdhani route. 3 Shatabdi and Jan Shatabdi Expresses 4 GaribRath The Shatabdi trains are AC intercity seater-type trains. JanShatabdi trains consists of both AC and non-AC classes. Fully air conditioned trains, designed for those who cannot afford to travel in the expensive Shatabti and Rajdhani Expresses,

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GaribRath means "Chariot of the Poor". The maximum speed is 130 km/h. 5 Superfast Mail/Express These are trains that have an average speed greater than 55 km/h (34 mph). Tickets for these trains have an additional super-fast surcharge. 6 Mail/Express These are the most common kind of trains in India. They have more stops than their super-fast counterparts, but they stop only at relatively important intermediate stations. 7 These are slow trains that stop at most stations along the route and are the cheapest trains. The entire train consists of the Generaltype compartments. Trains that operate in urban areas, usually stop at all stations.

Passenger and Fast Passenger

Suburban trains

Suburban rail Many cities have their own dedicated suburban networks to cater to commuters. Currently, suburban networks operate in Mumbai, Chennai, Kolkata, Delhi, Hyderabad, Ahmedabad, Pune and Lucknow-Kanpur. Hyderabad, Pune and Lucknow-Kanpur do not have dedicated suburban tracks but share the tracks with long distance trains. New Delhi, Kolkata, and Chennai have their own metro networks, namely the New Delhi Metro, the Kolkata Metro,and the Chennai MRTS, with dedicated tracks mostly laid on a flyover. Suburban trains that handle commuter traffic are mostly electric multiple units. They usually have nine coaches or sometimes twelve to handle rush hour traffic. One unit of an EMU train
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consists of one power car and two general coaches. Thus a nine coach EMU is made up of three units having one power car at each end and one at the middle. The rakes in Mumbai run on direct current, while those elsewhere use alternating current. A standard coach is designed to accommodate 96 seated passengers, but the actual number of passengers can easily double or triple with standees during rush hour.

Accommodation classes Several long trains are composed of two to three classes of travel, such as a 1st and 2nd classes which have different pricing systems for various amenities. The 1st Class refers to coaches with separate cabins, coaches can be air-conditioned or non-air-conditioned. Further, other AC classes can have 2 or 3 tier berths, with higher prices for the former, 3-tier non-AC coaches or 2nd class seating coaches, which are popular among passengers going on shorter journeys. In air-conditioned sleeper classes passengers are provided with sheets, pillows and blankets. Meals and refreshments are provided, to all the passengers of reserved classes, either through the on-board pantry service or through special catering arrangements in trains without pantry car. Unreserved coach passengers have options of purchasing from licensed vendors either on board or on the platform of intermediate stops. The amenities depend on the popularity and length of the route. Lavatories are communal and feature both the Indian style as well as the Western style.

Train Numbering Effective December 20, 2010, the railways will deploy a 5 digit numbering system instead of the 4 digit system. The need is due to the fact that the Indian Railways runs 10,000 trains daily. Only a prefix of the digit 1 will be added to the four-digit numbers of the existing trains to make the transition smoother. The special trains run to clear festivals and holiday rush shall have the prefix of 0 (zero)

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Notable trains and achievements There are two UNESCO World Heritage Sites on IR the ChatrapatiShivaji Terminus and the Mountain railways of India. The latter is not contiguous, but actually consists of three separate railway lines located in different parts of India:
  

The Darjeeling Himalayan Railway, a narrow gauge railway in West Bengal. The Nilgiri Mountain Railway, a metre gauge railway in the Nilgiri Hills in Tamil Nadu The Kalka-Shimla Railway, a narrow gauge railway in the Shivalik mountains in Himachal Pradesh.

The Maharaha Railways , a narrow gauge line of just 0.6m width from Gwalior to Sheopur of 198 km. in length is world's longest narrow gauge railway line is in the UNESCO world heritage tentative list.

The Neral-MatheranRailway , a narrow gauge railway connecting Matheran is also a historic line.

The Palace on Wheels is a specially designed train, frequently hauled by a steam locomotive, for promoting tourism in Rajasthan. On the same lines, the Maharashtra government introduced the Deccan Odyssey covering various tourist destinations inMaharashtra and Goa, and was followed by the Government of Karnataka which introduced the Golden Chariot train connecting popular tourist destinations in Karnataka and Goa. However, neither of them has been able to enjoy the popular success of the Palace on Wheels. The Samjhauta Express is a train that runs between India and Pakistan. However, hostilities between the two nations in 2001 saw the line being closed. It was reopened when the hostilities subsided in 2004. Another train connecting Khokhrapar(Pakistan) and Munabao (India) is the Thar Express that restarted operations on February 18, 2006; it was earlier closed down after the 1965 Indo-Pak war. In 2003 the Kalka Shimla Railway was featured in the Guinness Book of World Records for offering the steepest rise in altitude in the space of 96 kilometre. The Lifeline Express is a special train popularly known as the "Hospital-on-Wheels" which provides healthcare to the rural areas. This train has a carriage that serves as an operating room, a second one which serves as a storeroom and an additional two that serve as a patient ward. The

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train travels around the country, staying at a location for about two months before moving elsewhere. Among the famous locomotives, the Fairy Queen is the oldest operating locomotive in the world today, though it is operated only for specials between Delhi and Alwar. John Bull, a locomotive older than Fairy Queen, operated in 1981 commemorating its 150th anniversary. Kharagpur railway station also has the distinction of being the world's longest railway platform at 1,072 m (3,517 ft). The Ghum station along the Darjeeling Toy Train route is the second highest railway station in the world to be reached by a steam locomotive. The MumbaiPune Deccan Queen has the oldest running dining car in IR. The Himsagar Express, between Kanyakumari and Jammu Tawi, has the longest run in terms of distance and time on Indian Railways network. It covers 3,745 km (2,327 mi) in about 74 hours and 55 minutes. The Bhopal Shatabdi Express is the fastest train in India today having a maximum speed of 150 km/h (93 mph) on the FaridabadAgra section. The fastest speed attained by any train is 184 km/h (114 mph) in 2000 during test runs. The Rajdhani Express and Shatabdi Express are the superfast, fully air-conditioned trains that give the unique opportunity of experiencing Indian Railways at its best. In July 2009, a new nonstop train service called Duronto Express was announced by the railway minister Mamata Banerjee.

Fares and ticketing Fares on the Indian Railways across categories are among the cheapest in the world. In the past few years, despite a recessionary environment, the Indian Railways have not raised fares on any class of service. On the contrary, there has been a minor dip in fares in some categories. Ticketing services are available at all major and minor railway stations across India. In 2003, Indian Railways launched online ticketing services through the IRCTC website. Apart from Etickets, passengers can also book I-tickets that are basically regular printed tickets, except that they are booked online and delivered by post. According to comScore, the Indian Railways website was the top visited Indian travel site in April 2010, with 7.7 million visitors.

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Tourism IRCTC takes care of the tourism operations of the Indian Railways. The Indian Railways operates several luxury trains such as Palace on Wheels, Golden Chariot, Royal Orient Express and Deccan Odyssey; that cater mostly to foreign tourists. For domestic tourists too, there are several packages available that cover various important tourist and pilgrimage destinations across India.

Freight IR carries a huge variety of goods ranging from mineral ores, fertilizers and petrochemicals, agricultural produce, iron & steel, multimodal traffic and others. Ports and major urban areas have their own dedicated freight lines and yards. Many important freight stops have dedicated platforms and independent lines. Indian Railways makes 70% of its revenues and most of its profits from the freight sector, and uses these profits to cross-subsidise the loss-making passenger sector. However, competition from trucks which offer cheaper rates has seen a decrease in freight traffic in recent years. Since the 1990s, Indian Railways has switched from small consignments to larger container movement which has helped speed up its operations. Most of its freight earnings come from such rakes carrying bulk goods such as coal, cement, food grains and iron ore. Indian Railways also transports vehicles over long distances. Trucks that carry goods to a particular location are hauled back by trains saving the trucking company on unnecessary fuel expenses. Refrigerated vans are also available in many areas. The "Green Van" is a special type used to transport fresh food and vegetables. Recently Indian Railways introduced the special 'Container Rajdhani' or CONRAJ, for high priority freight. The highest speed notched up for a freight train is 100 kilometres per hour (62 mph) for a 4,700 metric tonne load. Recent changes have sought to boost the earnings from freight. A privatization scheme was introduced recently to improve the performance of freight trains. Companies are being allowed to run their own container trains. The first length of an 11,000-kilometre (6,800 mi) freight corridor linking India's biggest cities has recently been approved. The railways has increased load limits for the system's 225,000 freight wagons by 11%, legalizing something that was already
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happening. Due to increase in manufacturing transport in India that was augmented by the increase in fuel cost, transportation by rail became advantageous financially. New measures such as speeding up the turnaround times have added some 24% to freight revenues. Dedicated Freight Corridor Under the Eleventh Five Year Plan of India(20072012), Ministry of Railways is constructing a new Dedicated Freight Corridor (DFC) covering about 2762 route km long two routes - the Eastern Corridor from Ludhiana to Sone Nagar and the Western Corridor from Jawaharlal Nehru Port at NhavaSheva, Mumbai to Tughlakabad/Dadri along with interlinking of two corridors at Dadri. Upgrading of transportation technology, increase in productivity and reduction in unit transportation cost are the focus areas for the project. According to initial estimates, the project would cost 20,500 crore (US$4.4 billion). A new company, "Dedicated Freight Corridor Corporation of India Limited(DFCCIL)", designated as a `special purpose vehicle`, has been created to undertake planning & development, mobilization of financial resources and construction, maintenance and operation of the Dedicated Freight Corridors. DFCCIL has been registered as a company under the Companies Act 1956 on 30 October 2006.

Rail budget and finances The Railway Budget deals with planned infrastructure expenditure on the railways as well as with the operating revenue and expenditure for the upcoming fiscal years, the public elements of which are usually the induction and improvement of existing trains and routes, planned investment in new and existing infrastructure elements, and the tariff for freight and passenger travel. The Parliament discusses the policies and allocations proposed in the budget. The budget needs to be passed by a simple majority in the LokSabha (Lower House). The comments of the RajyaSabha (Upper House) are non-binding. Indian Railways is subject to the same audit control as other government revenue and expenditures. Based on anticipated traffic and the projected tariff, requirement of resources for capital and revenue expenditure of railways is worked out. While the revenue expenditure is met entirely by railways itself, the shortfall in the capital (plan) expenditure is met partly from borrowings (raised by Indian Railway Finance

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Corporation) and the rest from Budgetary support from the Central Government. Indian Railways pays dividend to the Central Government for the capital invested by the Central Government. As per the Separation Convention (on the recommendations of the Acworth Committee), 1924, the Railway Budget is presented to the Parliament by the Union Railway Minister, two days prior to the General Budget, usually around 26 February. Though the Railway Budget is separately presented to the Parliament, the figures relating to the receipt and expenditure of the Railways are also shown in the General Budget, since they are a part and parcel of the total receipts and expenditure of the Government of India. This document serves as a balance sheet of operations of the Railways during the previous year and lists out plans for expansion for the current year. The formation of policy and overall control of the railways is vested in Railway Board, comprising the Chairman, the Financial Commissioner and other functional members of Traffic, Engineering, Mechanical, Electrical and Staff departments. Indian Railways, which a few years ago was operating at a loss, has, in recent years, been generating positive cash flows and been meeting its dividend obligations to the government, with (unaudited) operating profits going up substantially. The railway reported a cash surplus of 900 crore (US$195.3 million) in 2005, 14,000 crore (US$3 billion) in 2006, 20,000 crore (US$4.3 billion) in 2007 and 25,000 crore (US$5.4 billion) for the 2007-2008 fiscal year. Its operating ratio improved to 76% while, in the last four years, its plan size increased from 13,000 crore (US$2.8 billion) to 30,000 crore (US$6.5 billion). The proposed investment for the 2008-2009 fiscal year is 37,500 crore (US$8.1 billion), 21% more than for the previous fiscal year. Budget Estimates-2008 for Freight, Passenger, Sundry other Earnings and other Coaching Earnings have been kept at 52,700 crore (US$11.4 billion), 21,681 crore (US$4.7 billion), 5,000 crore (US$1.1 billion) and 2,420 crore (US$525.1 million) respectively. Maintaining an overall double digit growth, Gross Traffic Earnings have been projected as 93,159 crore in 200910 (19.1 billion USD at current rate), exceeding the revised estimates for the current fiscal by 10,766 crore (US$2.3 billion). Around 20% of the passenger revenue is earned from the upper class segments of the passenger segment (the airconditioned classes).

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The Sixth Pay Commission was constituted by the Government of India in 2005 to review the pay structure of government employees, and submitted its recommendations in April 2008. Based on its recommendations, the salaries of all Railways officers and staff were to be revised with retrospective effect w.e.f. January 1, 2006, resulting in an expenditure of over 13,000 crore (US$2.8 billion) in 2008-09 and 14,000 crore (US$3 billion) in 200910. Consequently, staff costs have risen from 44% of ordinary working expenses to 52%.[42] Issues Many railway stations are in gross disrepair, dirty, outdated and overcrowded, especially when compared to stations in developed countries. Sometimes passengers are seen on trains hanging out windows and even on the roof creating safety problems. The interior of many train compartments are poorly maintained from rust, dirt and common wear and tear. Given the political infighting, corruption and inefficiencies, it is understandable that there are overcrowding, cleanliness and other maintenance issues. Although accidents such as derailment and collisions are less common in recent times, many are run over by trains, especially in crowded areas. Indian Railways have accepted the fact that given the size of operations, eliminating accidents is an unrealistic goal, and at best they can only minimize the accident rate. Human error is the primary cause, leading to 83% of all train accidents in India. While accident rates are low - 0.55 accidents per million train kilometre, the absolute number of people killed is high because of the large number of people making use of the network. While strengthening and modernisation of railway infrastructure is in progress, much of the network still uses old signalling and has antiquated bridges Lack of funds is a major constraint for speedy modernisation of the network, which is further hampered by diversion of funds meant for infrastructure to lower-prioritised purposes due to political compulsions. In order to solve this problem, the Ministry of Railways in 2001 created a non-lapsible safety fund of 17,000 crore (US$3.7 billion) exclusively for the renewal of overaged tracks, bridges, rolling stock and signalling gear. In 2003, the Ministry also prepared a Corporate Safety Plan for the next ten years with the objective of realising a vision of an accident-free and casualty-free railway system. The plan, with an outlay of 31,835 crore (US$6.9 billion), also envisaged development of appropriate technology for higher level of safety in train operation.

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Reforms and upgrades Outdated communication, safety and signaling equipment, which used to contribute to failures in the system, is being updated with the latest technology. A number of train accidents happened on account of a system of manual signals between stations, so automated signaling is getting a boost at considerable expense. It is felt that this would be required given the gradual increase in train speeds and lengths, that would tend to make accidents more dangerous. In the latest instances of signaling control by means of interlinked stations, failure-detection circuits are provided for each track circuit and signal circuit with notification to the signal control centres in case of problems. Though currently available only in a small subset of the overall IR system, anticollision devices are to be extended to the entire system. Aging colonial-era bridges and centuryold tracks also require regular maintenance and upgrading. The fastest trains of Indian Railways, Rajdhani Express and Shatabadi Express face competition from low-cost airlines since they run at a maximum speed of only 150 kilometres per hour (93 mph). At least six corridors are under consideration for the introduction of high speed bullet trains to India with expert assistance from France and Japan. IR is in the process of upgrading stations, coaches, tracks, services, safety, and security, and streamlining its various software management systems including crew scheduling, freight, and passenger ticketing. Crew members will be able to log in using biometric scanners at kiosks while passengers can avail themselves of online booking. Initially, various upgrade and overhaul work will be performed at more than five hundred stations, some of it by private contract. All metre gauge lines in the country will be converted to broad gauge (see Project Unigauge). New LHB stainless steel coaches, manufactured in India, have been installed in Rajdhani and Shatabdi express trains. These coaches enhance the safety and riding comfort of passengers besides having more carrying capacity, and in time will replace thousands of old model coaches throughout Indian Railways. More durable and conforming polyurethane paint is now being used to enhance the quality of rakes and significantly reduce the cost of repainting. Improved ventilation and illumination are part of the new scheme of things, along with the decision to install air brake systems on all coaches. New manufacturing units are being set up to produce state-of-the-art locomotives and coaches. IR is also expanding its telemedicine network facilities to further give its employees in far-flung and remote areas access to specialized medicine. IR has
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also piloted Internet connectivity on the Mumbai-Ahmedabad Shatabdi Express, powered by Techno Sat Communications It is estimated that modernisation of IR and bringing it up to international standards would require US$280 billion in new upgrades and investment from 2010 to 2020. Sanitation in trains and stations throughout the system is getting more attention with the introduction of eco-friendly, discharge-free, green (or bio-) toilets developed by IIT Kanpur. Updated eco-friendly refrigerant is being used in AC systems while fire detection systems will be installed on trains in a phased manner. New rodent-control and cleanliness procedures are working their way into the many zones of IR. Central Railway's 'Operation Saturday' is gradually making progress, station by station, in the cleanup of its Mumbai division. Augmentation of capacity has also been carried out in order to meet increasing demand. The number of coaches on each train have been increased to 24, from 16, which increased costs by 28% but increased revenues by 78%. The railways were permitted to carry 68 tons per wagon, up from the earlier limit of 54 tons per wagon, thereby cutting costs. The turnaround time for freight wagons was reduced from 7 days to 5 by operating thegoods shed 24X7, electrifying every feeder line (this reduced time spent switching the engine from diesel to electric or from electric to diesel). Reducing the turnaround time meant that the Railways could now load 800 trains daily, instead of 550 trains daily. The minimum tonnage requirements were reduced allowing companies to unload their cargo at multiple stops.

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COMPANY PROFILE:

Started in 1952, the Integral Coach Factory (ICF) is located in Perambur, a suburb of Chennai, India. Its primary products are rail coaches. Most of the coaches manufactured are supplied to the Indian Railways, but it has also manufactured coaches for railway companies in other countries, including Thailand, Burma, Taiwan, Zambia, Philippines, Tanzania, Uganda, Vietnam, Nigeria, Mozambique and Bangladesh. Recently, ICF exported coaches to Angola. It also has got orders worth of Rs. 102 crores from Sri Lanka. The coach factory provides a number of different coaches primarily for the Indian Railways, primarily first and second class coaches, pantry and kitchen cars, luggage and brake vans, self propelled coaches, electric, diesel and mainline electric multiple units (EMU, DMU, MEMU), metro coaches and Diesel Electric Tower Cars (DETC), Accident Relief Medical Vans (ARMV), Inspection Cars (RA), Fuel Test Cars, Track Recording Cars, the latest coaches are for the Deccan Odyssey (a luxury train of the Indian Railways), and coaches for MRVC (world class coaches). History: Schlieren-Zurich (Switzerland). The first Kirloskar 8 centre lathe was installed by the then Railway Minister LalBahadurShastri in the machine shop on 20th Jan 1955. It was inaugurated by the then Prime Minister of India Pandit Jawaharlal Nehru on 2nd October 1955. Thus this great factory, ICF, came into being with K. Sadagopan, as the first Chief Administrative Officer. Dignitaries present on this occasion included LalBahadurShastri, Railway Minister; O.V.Alagesan, Deputy Minister for Railways; K. Kamaraj, Chief Minister of Madras Presidency and U.Huber, Director of the Swiss company for whom this was a proud moment, a witness to the consummation of the efforts of his experts working in collaboration with Indian engineers. Production began in a modest manner in 1955 with the manufacture of seven third class coach shells. Today the coach factory produces more than 1600 coaches of more than 170 varieties. In the year 2007-08, ICF created a milestone by producing 1291 railway passenger coaches, coaches per annum. It employs about 13,000 persons. Nearly 1336 coaches are manufactured every year, and 6 coaches are manufactured per day.

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structure of the organization The Integral Coach Factory consists of two main parts - shell division and the furnishing division. The shell division manufactures the skeleton of the rail coach, while the furnishing division is concerned with the coach interiors and amenities.

SHELL division The coach manufacturing starts from shell division, where the body shell and boggy assembly are done. The body shell assembly is of all welded integrated design and it consist of under frame, side wall , roof, and end wall assemblies. A shell is made of one body, shell fitted on two bogies.

A sheet metal sharp produces all shell metal items required for the manufacture of under frame side wall , end wall , and roof . Assemblies  Main assemblies of assemblies the under frame , side wall , end wall , and roof , to form a tube like shell  Final assembly pending of the shell and fitment of air brake arrangements are done in the final assembly shop.  Bogies are manufacture by assembling the bogie moulter, will states, axel box, spring together.  The body shells fitted on the bogies are dispatched to furnishing division for furnishing work.

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Furnishing division; Aesthetic look comfort and safety are very much essential for pleasant journey. Furnishing division takes care of the above and furnishing the interior portion of the coaches. Furnishes of the coach is done in ten stages, Viz , flooring , wiring , paneling on sidewall, window fixing , partition paneling , plumbing, floor molding, light & fans and seats, berths and racks fixing and buffer height adjustment. Compare plywood, limpet asbestos sheets, pvc sheets, latex cushions, feather touch vinyl cloth, stainless steel, and for lavatory inlays are used to achieve good interior design, best passenger amenities and long life of the coach under tough running conditions. Traditionally, the management of the on-going activities and control of spending have been given priority in the process of the budget formulation and execution. The budget was used for central control over inputs, such as salaries , materials , equipment , and travel expenses , etc . In India, union government and the state government are caught up in a serious financial situation that they are findings it difficult to meet the growing demands for expenditure at the limited resources they are able to raise . they are financially in a very difficult situation to carry out their activities and to implement new programs / schemes/ projects which they want to execute. over the years the government and most state government expenditure has become highly rigid and prone to large , pre committed increases . more than half of the annual budget out lays are transfer payments , interests payments , defenses, internal security , major subsidies , salaries , allowances and pensions , and non plan grants to states account for about 95 percent of nonplan expenditure and 70 percent of total expenditure.

The project deals with the finance department of the shell division of the integral coaching factory

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SCOPE OF STUDY

This study which is done at integral coach factory (ICF) cell division aims at studying the financial performance analysis and the knowledge how cost can be controlled Moreover it also shows a clear picture that how cost can be controlled because ICF being a large concern has many department/shop in it. It also helps us to know how they get funds are being division to various department /shop. The following analysis would help the concentrating on the area to be controlled with respect to various costs thereby increasing their profitability

This study further compares the financial statement to know the relative financial position of the company. Finally, a trend analysis also is carried out to evaluate the trends in financial statements of the company.

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NEED FOR STUDY

While financial advice comes in many forms ( and from many sources ), personal financial planning has a set strategy , involving a thorough review and analysis of ; All aspects of your financial affairs and those psychological factors that impact on your life ,  The preparation of a comprehensive individualized plan to help you achieve financial security in the long term  Market needs. You need proper financial planning more than ever before. it has become more difficult to maximize investment returns in these uncertain economic times . faced with ever changing legislation ,globalization , many more complex financial products/services to choose from , higher and new taxes and a lack of time , it is becoming almost impossible for you to act on your own in creating wealth , protecting assets , business interests and income , choosing the appropriate voluntary or compulsory income instruments and in distributing your estate. The first step for any financial plan is a financial needs analysis. It is the only way to gather information on your current situation , then to identify potential threats to your wealth . in fact , it is so important that it is legislated that any financial adviser must do a needs analysis before presenting any protecting any product or strategy to you.

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OBJECTIVES
PRIMARY OBJECTIVE:

 TO STUDY THE OVERALL FINANCIAL PERFRMANCE OF INTEGRAL COACH FACTORY. SECONDARY OBJECTIVES:

 To study the relationship between different financial variables affecting the solvency, financial and profitability of the company  To compare the financial position of various years of the company  Correlating the working capital with respect to the net worth of the company and studying its impact  To study the allocations of funds in ICF

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REVIEW OF LITERATURE
Review of related concepts and past studies will give a holistic picture and that will in turn help us in analyzing and understanding the current problem in proper perspective. An attempt will be made in this chapter to review the concepts and to define the concepts that will be used in the present study. A review of the past studies would also be made under here. CONCEPTS FINANCE Finance (pronounced /f nnts/ or / fa nnts/) is the science of funds management. The

general areas of finance are business finance, personal finance(private finance), and public finance Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money, risk and how they are interrelated. It also deals with how money is spent and budgeted. One facet of finance is through individuals and business organizations, which deposit money in a bank. The bank then lends the money out to other individuals or corporations for consumption or investment and charges interest on the loans. Loans have become increasingly packaged for resale, meaning that an investor buys the loan (debt) from a bank or directly from a corporation. Bonds are debt instruments sold to investors for organizations such as companies, governments or charities. The investor can then hold the debt and collect the interest or sell the debt on a secondary market. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important as they invest in various forms of debt. Financial assets, known as investments, are financially managed with careful
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attention to financial risk management to control financial risk. Financial instruments allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly traded corporations. Central banks, such as the Federal Reserve System banks in the United States and Bank of England in the United Kingdom, are strong players in public finance, acting as lenders of last resort as well as strong influences on monetary and credit conditions in the economy

FINANCIAL PERFORMANCE A subjective measure of how well a firm can use assets from its primary mode of business and generate revenues. This term is also used as a general measure of a firm's overall financial health over a given period of time, and can be used to compare similar firms across the same industry or to compare industries or sectors in aggregation. There are many different ways to measure financial performance, but all measures should be taken in aggregation. Line items such as revenue from operations, operating income or cash flow from operations can be used, as well as total unit sales. Furthermore, the analyst or investor may wish to look deeper into financial statements and seek out margin growth rates or any declining debt.

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RESEARCH METHODOLOGY
Research is an academic activity. It is an original contribution to the existing stock of knowledge making fear of its advancement; it is a pursuit of trust with the help of study, observation, comparison and experiment, in short, the research for knowledge through objective and systematic method of finding solution to a problem. RESEARCH DESIGN A research design is purely a framework or plan for a study that guides the collection and analysis of data. It is a blue print that is followed in completing a study. Here, an analytical study would be conducted to know the existing inventory system in the company. TYPES OF RESEARCH Descriptive Research Descriptive research includes surveys and fact-finding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs as it exists at present. Analytical research In this type of research the researcher has to use facts or information already available and analyze these to make a critical evaluation of the material. DATA COLLECTION Primary data: Primary data means data that are collected newly by the researcher. Primary data consists of the original information collected for specific purpose. The primary data for this research is collected through a structured questionnaire and observation method.

Secondary Data

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Secondary data means data that are already available. They refer to the data which have already been collected and analyzed by someone else and which have been passed through the statistical process. The information about the company was collected from internet which has been published by the company.

THEORETICAL EXPLANATION OF FINANCIAL ANALYSIS TOOLS

In business usage the term financial statement analysis and interpretation are applied to almost any kind of detailed inquiry into financial data. It is a technical tool in the hands of financial executives to measures the financial progress. It is an attempt to determine the significance and meaning of the financial statement data so that a forecast can be made on the prospects of future earning ability to pay interest and debt maturity both current as well as long term and to study the probability of a sound dividend policy. The techniques are used to ascertain or measure the performance of the company as a whole.

Review of literature consists of theoretical study of the following sub topics y y y Ratio Analysis Comparative Balance Sheet Analysis Common size Balance Sheet Analysis

RATIO ANALYSIS The ratio analysis is one of the most powerful tools of financial analysis. It is the process of establishing and interpreting various ratios. A financial ratio is the relationship between two accounting figures expressed mathematically. Ratios provide clues to the financial position of a concern. These are the pointers and indicators of financial strength, soundness, position or weakness of an enterprise. One can draw conclusions about the exact financial positions of a concern with the help of ratios.
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Ratio analysis is a process of comparison of one figure against another, which make a ratio, and the appraisal of the ratios to make proper analysis about the strengths and weaknesses of the companys operations. Ratio analysis is extremely helpful in providing valuable insight into a companys financial picture MEANING OF RATIOS Ratios are relationship express in mathematical terms between figures which are connected with each other in some manner. Obviously, no purpose will be served by comparing two sets of figures which are not at all connected with each other. Moreover, absolute figures are also unfit for comparison. Ratios can be expressed in two ways; TIMES

When another divides one value, the unit to express the Quotient is termed as Times. For example, if out of 100 product is Employees 95% is Finishing goods or product ratio can be expressed as follows: 95/100 = 0.95 times. PERCENTAGE If 100 multiply the quotient obtained, the unit of expression is termed as PERCENTAGE. For instance, in the above example, the product ratio as a Percentage of the total number of employees is as follows: 0.95* 100 = 95%

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CLASSIFICATION OF RATIOS: Ratios are classified in several ways. Different approaches are used for classifying ratios. There is no uniformity in classification by experts. They have adopted different standpoints for classifying ratios into various groups. Some of the classifications are discussed below: a) Classification of ratio by statements. Under this method, ratios are classified on the basis of statements from which the information is obtained for calculating the ratios. The only statements that provide information are balance sheet and profit and loss account. b) Classification of ratio by users. Under this classification the ratios are grouped on the basis of the parties who are interested in making use of the ratios. Ratios for management Operating ratio Return on Investment Stock turnover Debtors turnover Debt equity Creditors turnover c) Classification of ratios by purpose/function. Generally ratios are used for the purpose of assessing Profitability, activity or operating efficiency and financial position of Concern. Based on the purpose the ratios are classified as Profitability Ratios for creditors Current ratio Solvency ratio Creditors turnover Fixed assets

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Classifications of ratios Analyzed 1. Short term solvency ratio 2. Profitability ratio 3. Turnover Ratio Short-Term Solvency Ratio: The short-term solvency ratios, which measure the liquidity of the firm and its ability to meet its maturing short-term obligations. Liquidity is defined as the ability to realize value in money, the most liquid of assets. It refers to the ability to pay in cash, the obligations that are due. Profitability Ratio: The purpose of study and analysis of profitability ratios are to help assessing the adequacy of profits earned by the company and also to discover whether profitability is increasing or declining. EPS is one of the most important ratios, which measures the net profit earned per share. EPS is one of the major factors affecting the dividend policy of the firm and the market prices of the company. A steady growth in EPS year after year indicates a good track of profitability. Turnover Ratios: Activity ratios measure how effectively the firm employs its resources. These ratios are also called turnover ratios which involve comparison between the level of sales and investment in various accounts - inventories, debtors, fixed assets, etc., activity ratios are used to measure the speed with which various accounts are converted into sales or cash.

COMPARATIVE BALANCE SHEET ANALYSIS The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. The changes in periodic balance sheet items reflect the conduct of a business. The changes can be observed by comparison of the balance sheet at the beginning and at the end of a period and these changes can help in forming an opinion about the progress of an enterprise.
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Balance sheets as on two or more different dates are used for comparing the assets, liabilities and the net worth of the company. Comparative balance sheet analysis is useful for studying the trends of an undertaking.

Advantages

y y

Comparative statements help the analyst to evaluate the performance of the company. Comparative statements can also be used to compare the performance of the firm with the average performance of the industry between different years.

It helps in identification of the weaknesses of the firm and remedial measures can be done merely when taken accordingly.

COMMON SIZE BALANCE SHEET ANALYSIS: A statement in which balance sheet items are expressed as the ratio of each asset to total assets and the ratio of each liability is expressed as a ratio of total liabilities is called common size balance sheet. The figures are shown as percentages of total assets, total assets and total liabilities. The total assets are taken as 100 and different assets are expressed as a percentage of the total. Similarly, various liabilities are taken as a percentage of total liabilities. These statements are useful in analysis of the performance of the company by analyzing each individual element to the total figure of the statement. These statements will also assist in analyzing the performance over years and also with the figures of the competitive firm in the industry for making analysis of relative efficiency.

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LIMITATION OF THE STUDY

y y the number of years used for analysis is very limited. the study heavily depends on the secondary data and any shortcomings are bound to be reflected. however such data are correct, when those were audited. y any change in the methods or procedures of accounting systems limits the utility of financial statements.

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