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Made By:

Sagar Phul

Shruti Kashyap

Deepshikha Yadav

Lincy Kurian

Tingle Thomas

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A Fund Flow Statement is a statement which showsthe inflow and outflow of funds between two dates of a

balance sheet. So, it is known as the statement of changes

in financial position.

Balance sheet shows the financial position and inflow and

outflow of funds that affect it.

In company level business, it is very necessary to prepare

fund flow statement to know what the sources are and

what are the applications of funds between two dates of

balance sheet.

Generally, it is prepared after getting two years balance

sheet.

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An analysis of the flow of liquid funds can be very useful

in making decisions concerning liquidity.

A full understanding of a businesss affairs requires the

identification of the changes or movements in the assets,

liabilities and capital for the year, and the resultant effect

on the liquid resources. A profit and loss account and

balance sheet does not specifically disclose this

information.

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To show the manner in which the operations have been

financed, and how the financial resources have been used.

They provide useful guide to creditors & lenders.

Various ways to improve the networking capital position can

be decided. If focuses attention on resources available for capital

investment.

It is useful in deciding how fixed assets should be financed.

It is useful in planning the retirement of debt.

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An Income Statement Is A CompanysFinancial Statement That Indicates HowThe Revenue Is Transformed Into The NetIncome

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Helps The Investors & Creditors Determine

The Past As Well As Future Financial

Performance Of An Enterprise

Displays The Revenues Recognized For ASpecific Period & The Cost/Expenses Charged

Against These Revenues

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Relevant Items That Cannot Be ReliablyMeasured Are Not Reported

Example: Brand Equity & Loyalty

Some Numbers Depend On Judgement &

EstimatesExample: Depreciation Expenses (whichdepends on estimated useful life)

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Deals With FinancialResources Required ForRunning BusinessActivities

A Funds Flow StatementMatches The FundsRaised & Funds AppliedDuring A ParticularPeriod

Discloses The ResultsOf The Business

Activities

It Matches The

Incomes Of A Period

With The Expenditure

Of That Period

FUNDS FLOW STATEMENT INCOME STATEMENT

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SOURCES AND APPLICATIONS OF

FUNDS

It is necessary to find the sources and applications of

finance for preparing a funds flow statement.

SOURCES OF FINANCE:-

Can be both internal and external sources.

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Funds from operations is the only internal source of

finance.

However certain adjustments are required in the figureof net profit for finding out the real funds from

operations.

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ADDTHEFOLLOWINGITEMSASTHEYDONTRESULTIN

OUTFLOWOFFUNDS.

1. DEPRECIATIONONFIXEDASSETS.

2. PRELIMINARYEXPENSESONGOODWILL, ETC. WRITTENOFF.

3. CONTRIBUTIONTODEBENTUREREDEMPTIONFUND,

TRANSFERTOGENERALRESERVE, ETC. IFALREADYDEDUCTED

BEFOREARRIVINGATTHEFIGUREOFNETPROFIT.

4. PROVISIONFORTAXATIONANDPROPOSEDDIVIDEND. BUT

TAXORDIVIDENDSACTUALLYPAIDANDINTERIMDIVIDEND

PAID ARETAKENASAPPLICATIONOFFUNDS.

5. LOSSONSALEOFFIXEDASSETS.

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DEDUCTTHEFOLLOWINGITEMSASTHEYDONOTINCREASE

FUNDS-

1. PROFITONSALEOFFIXEDASSETSSINCETHEFULLSALE

PROCEEDSARETAKENASASEPARATESOURCEOFFUNDSAND

INCLUSIONHEREWILLRESULTINDUPLICATION.

2. PROFITONREVALUATIONOF FIXEDASSETS.

3. NONOPERATINGINCOMESSUCHASDIVIDENDS RECEIVED

ORACCRUEDDIVIDEND, REFUNDOF INCOMETAX, RENT

RECEIVEDORACCRUEDRENT. THOUGHTHEYINCREASEFUNDS,THEYARENONOPERATINGINCOMES, SOWILLBESHOWN

UNDERSEPARATEHEADSASSOURCESOFFUNDSINTHE FFS.

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1.FUNDSFROMLONGTERMLOANS.

..SUCHASDEBENTURES, BORROWINGSFROMFINANCIALINSTITUTIONSINCREASETHEWORKINGCAPITALAND

THEREFORE, THEREWILLBEFLOWOFFUNDSUNLESSTHE

DEBENTURESHAVEBEENISSUEDINCONSIDERATIONOF SOME

FIXEDASSETS.

2. SALEOFFIXEDASSETS.

SALEOFLAND, BUILDINGS, LONGTERMINVESTMENTSWILL

RESULTINGENERATIONOFFUNDS.

3.FUNDSFROMINCREASEINSHARECAPITAL.

ISSUEOFSHARESFORCASHORFORANYOTHERCURRENT

ASSETRESULTSININCREASEINWORKINGCAPITAL.

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THEUSESTOWHICHFUNDSAREPUTARECALLED

APPLICATIONSOFFUNDS.

1. PURCHASEOFFIXEDASSETS.

2. PAYMENTOFDIVIDENDS.

3. PAYMENTOFFIXEDLIABILITIES.

4. PAYMENTOFTAXLIABILITY.

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STATEMENT OF CHANGES IN FINANCIAL

POSITION

Extension ofFunds Flow Statement.

Gives detailed as well as accurate information about

the changes in the financial position of the company

as compared to the changes in financial positions as

shown by the traditional fund flow statement.

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DEFINITIONS

A statement disclosing changes in the firms total

financial resources.

A statement which summarises for the period theresources are made available to finance the

activities of an enterprise and the uses to which

such resources have been put.

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THE STATEMENT OF CHANGES IN FINANCIALPOSITION MAY INVOLVE :

Changes in the firms cash position.

Changes in the firms working capital position. Changes in the firms total financial resources position.

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IMPORTANCE

The information provided can be compared withthe cash budget to assist in the prediction of future

cash flow.

The quality of income can be better assessed

because estimates are not included in the SCFPand it is easier to see what was received and what

was spent.

The possibility of expanding or reducing operating

capacity can be addressed by analyzing the fundsprovided by operations.

The financial flexibility and liquidity of the company

can be analyzed.

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FORMAT OF FUNDS FLOW STATEMENT

Funds from operations

Issue of share capital

Issue of debentures

Long-term loans

Sale of fixed assets

Dividend received

Non-trading income

**Decrease in working

capital (balancing figure)

Loss from applications

Redemption of preference

shares Redemption of debentures

Repayment of long-term

loans

Dividend paid Purchase of fixed assets

Payment of dividend/tax

*Increase in working capital

(balancing figure)

SOURCES APPLICATIONS

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ISSUE OF

SHARES

PAYMENTOF LONG

TERM

LOANS

PAYMENT

OF TAX/

DIVIDEND

OPERATIONAL LOSS

PURCHASEOF FIXED

ASSETS

REDEMPTION

OF PREF.SHARES

SALE OF

FIXEDASSETS

LONG TERM

BORROWINGS

OPERATIONAL

PROFIT

FUNDS

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CASE STUDYON

TATAMOTORS

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About the company.

Tata Motors Limited is Indias largest automobile company, with

consolidated revenues of Rs.1,23,133 crores (USD 27 billion) in 2010-

11. It is the leader in commercial vehicles in each segment, and

among the top three in passenger vehicles with winning products in

the compact, midsize car and utility vehicle segments. The Company is

the world's fourth largest truck manufacturer, and the world's third

largest bus manufacturer.

The Company's over 25,000 employees are guided by the vision to

be "best in the manner in which we operate, best in the products we

deliver, and best in our value system and ethics."

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Some Achievements

In January 2008, Tata Motors unveiled its People's Car, the Tata Nano, which

India and the world have been looking forward to. The Tata Nano has been

subsequently launched, as planned, in India in March 2009. A development,

which signifies a first for the global automobile industry, the Nano brings the

comfort and safety of a car within the reach of thousands of families.

In May 2009, Tata Motors ushered in a new era in the Indian automobile

industry, in keeping with its pioneering tradition, by unveiling its new range of

world standard trucks called Prima. In their power, speed, carrying capacity,

operating economy and trims, they will introduce new benchmarks in India and

match the best in the world in performance at a lower life-cycle cost.

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And MoreTata Motors is equally focused on environment-friendly technologies in

emissions and alternative fuels. It has developed electric and hybrid vehicles

both for personal and public transportation.

Tata Motors is committed to improving the quality of life of communities by

working on four thrust areas employability, education, health and

environment. The activities touch the lives of more than a million citizens. The

Company's support on education and employability is focused on youth and

women. In health, our intervention is in both preventive and curative healthcare.

The goal of environment protection is achieved through tree plantation,

conserving water and creating new water bodies and, last but not the least, byintroducing appropriate technologies in our vehicles and operations for

constantly enhancing environment care.

With the foundation of its rich heritage, Tata Motors today is etching a refulgent

future.

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SOURCES OF FUNDS 2010-11 2009-10

1. Funds generated from operations

A. Profit after tax 1,811.82 2,240.08

B. Depreciation (including Lease

Equalization)

1,356.26 1,029.36

C. Provision / (Reversal) for diminution in

value of investments (net)

34.00 61.05

D. Net deferred tax charge 376.30 589.46

E. Credit for Dividend Distribution Tax of

Subsidiary Companies

- -

F. Exchange gain (net) on Long term

Foreign currency monetary

items deferred consequent to

amendment to AS-11

161.69 (325.81)

FUNDS FLOW STATEMENT of Tata MotorsFor the year ending 31stMarch,2011

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G. Marked to Market Exchange loss on

Forward contracts transferred

to Hedging Reserve Account on adoption of

principles of hedge

accounting under AS30

- 132.57

TOTAL 3,740.07 3,726.71

2. Proceeds from Rights issue of Ordinaryshares and A Ordinary shares

- -

3. Proceeds from issue of Global Depository

Shares

- 1,794.19

4. Proceeds from QIP issue 3,351.01 -

5. Proceeds from FCCN, Warrants andConvertible Debentures

converted into Ordinary Shares and premium

thereon

1,493.32 1,555.76

6. (a) Decrease in Working Capital

(b) Decrease in Finance receivables

-

366.41

2,145.94

1,393.58

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7. Increase in Borrowings

(net of repayments)

- 3,460.35

8. Decrease in short term deposits with banks - -

TOTAL 8,950.81 14,076.53

APPLICATION OF FUNDS 2010-11 2009-10

9. Capital Expenditure (net) 2,396.29 2,873.33

10. Investments made (net of sales) 321.31 9,429.82

11. Payment of Redemption Premium on

NCD

71.96 -

12. Increase in short term deposits with banks 804.66 490.67

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APPLICATION OF FUNDS 2010-11 2009-10

13. (a) Increase in Working Capital

(b) Increase in Finance receivables

3,000.57

-

-

-

14. Dividends (including tax thereon) 1,467.03 991.94

15. Miscellaneous Expenditure (to the extent

not written off or adjusted)

and utilization of Securities Premium

Account

193.20 290.77

TOTAL 8,950.81 14,076.53

BALANCE SHEET

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WHAT THE COMPANY OWNED COMPANY

COMPANY TATAMOTORS

GROUP

TATAMOTOR

S

GROUP

As at

March 31,

2011

As at

March 31,

2010

As at

March 31,

2011

As at

March 31,

2010

1. NET FIXED ASSETS 17,475.63 16,436.04 43,493.12 38,506.33

2. GOODWILL - - 3,584.79 3,422.87

3. INVESTMENTS 22,624.21 22,336.90 2,544.26 2,219.12

4. DEFERRED TAX ASSETS (NET) - - 632.34 425.97

5. FOREIGN CURRENCY

MONETARY ITEM TRANSLATION

DIFFERENCE ACCOUNT (NET)

- 161.69 - -

6. NET CURRENT ASSETS (2,164.63) (5,865.98) 4,051.10 724.81

7. TOTAL ASSETS (NET) 37,935.21 33,068.65 54,305.61 45,299.10

BALANCE SHEET

WHAT THE COMPANY OWED COMPANY COMPANY TATA TATA

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WHAT THE COMPANY OWED COMPANY COMPANY TATAMOTORS

GROUP

TATAMOTOR

SGROUP

As at

March 31,2011

As at

March 31,2010

As at

March 31,2011

As at

March31,

2010

1. LOANS 15,898.75 16,594.54 32,791.41 35,108.36

2. NET WORTH 20,013.30 14,965.47 19,171.47 8,206.48

3. MINORITY INTEREST - - 246.60 213.51

4. FOREIGN CURRENCY

MONETARY ITEM TRANSLATION

DIFFERENCE ACCOUNT (NET)

- - - 191.15

5. DEFERRED TAX LIABILITY

(NET)

2,023.16 2,023.16 2,096.13 1,579.60

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PROFIT AND LOSS ACCOUNT

COMPANY2010-2011

COMPANY2009-2010

TATAMOTORS

GROUP2010-2011

TATAMOTOR

SGROUP2009-2010

1. INCOME

SALE OF PRODUCTS AND OTHERINCOME FROM OPERATIONS

52,135.97 38,364.10127,419.6

2

95,567.42

LESS : EXCISE DUTY 4,095.51 2,771.05 4,286.32 3,048.17

48,040.46 35,593.05 123,133.30

92,519.25

DIVIDEND AND OTHER INCOME 183.26 1,853.45 89.61 1,793.12

48,223.72 37,446.50 123,222.9

1

94,312.37

COMPANY COMPAN TATA TATA

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COMPANY2010-2011

COMPANY2009-2010

TATAMOTORS

GROUP2010-2011

TATAMOTORS

GROUP2009-2010

EMPLOYEE COST 2,294.02 1,836.13 9,342.67 8,751.77

PRODUCT DEVELOPMENT

EXPENDITURE

106.17 144.03 962.49 498.20

DEPRECIATION /

AMORTISATION

1,360.77 1,033.87 4,655.51 3,887.13

INTEREST AND DISCOUNTING

CHARGES

1,143.99 1,103.84 2,045.42 2,239.71

EXCEPTIONAL ITEMS - LOSS /

(GAIN)

147.12 920.45 (231.01) 259.60

TOTAL EXPENDITURE 46,027.20 34,616.96 112,785.74 90,789.73

3. PROFIT BEFORE TAX 2,196.52 2,829.54 10,437.17 3,522.64

4. TAX EXPENSE (384.70) (589.46) (1,216.38) (1,005.75)

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COMPANY2010-2011

COMPANY2009-2010

TATAMOTORS

GROUP2010-2011

TATAMOTOR

SGROUP2009-2010

5. PROFIT AFTER TAX 1,811.82 2,240.08 9,220.79 2,516.89

6. SHARE OF MINORITY

INTEREST

(48.52) (30.33)

7. SHARE OF PROFIT / (LOSS)

IN RESPECT OF INVESTENTSIN

ASSOCIATE COMPANIES

101.35 84.50

8. PROFIT FOR THE YEAR 1,811.82 2,240.08 9,273.62 2,571.06

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Thank

You !!!

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