A

STUDY
ON
CASH MANAGEMENT
AT
INDIA BULLS SECURITIES LTD
Submitted
By
KANDUKURI SRI VAMSI
H.T.NO: 1415-18-672-066
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE
OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

PENDEKANTI INSTITUTE OF MANAGEMENT
IBRAHIMBAGH
(Affiliated to Osmania University)
2018-2020
 INTRODUCTION

There are a couple of old sayings in business. One is, "Cash is king." Another is, "Happiness
is a positive cash flow." Surveys are conducted constantly of failed businesses. Most failed
businesses, up to 60%, say that all or most of their failure was due to cash flow problems.
Businesses have to have as their guide another old saying. Nothing matters more than cash.
Making a profit is nice, cash flow is necessary. Cash management is the key to business
success.

Start-up businesses often find themselves short of cash right off the mark. Existing businesses
can find ways to survive if they can find ways to generate cash. Cash is the single most
important element of survival for a small business. Small businesses often say that an
inability to control cash is their single biggest problem.

Just like an individual or a family, companies need cash cushion to rely on. This gives them
security in unstable times. It also gives them an opportunity to take advantage of strategic
investments or take advantage of opportunities to reduce costs. Small businesses also have to
focus on the concept of free cash flow in order to establish that cash cushion.

Duncan Connor, of Company.com talks about how companies used their cash flow to remain
successful during the recession, "It's a simple case of managing how much flows in or out of
your business and when. Successful businesses managed their expenses, maximized margins,
and built their customer base."

In financial accounting, a cash flow statement, also known as statement of cash flows or
funds flow statement, is a financial statement that shows how changes in balance sheet
accounts and income affect cash and cash equivalents, and breaks the analysis down to
operating, investing, and financing activities. Essentially, the cash flow statement is
concerned with the flow of cash in and cash out of the business. The statement captures both
the current operating results and the accompanying changes in the balance sheetAs an
analytical tool, the statement of cash flows is useful in determining the short-term viability of
a company, particularly its ability to pay bills. International Accounting Standard 7 (IAS 7) is
the International Accounting Standard that deals with cash flow statements.
People and groups interested in management include:

 Accounting personnel, who need to know whether the organization will be able to
cover payroll and other immediate expenses
 Potential lenders or creditors, who want a clear picture of a company's ability to repay
 Potential investors, who need to judge whether the company is financially sound
 Potential employees or contractors, who need to know whether the company will be
able to afford compensation
 Shareholders of the business.

1.2 Purpose:

The management was previously known as the flow of cash in the statement. The cash flow
statement reflects a firm's liquidity.

The balance sheet is a snapshot of a firm's financial resources and obligations at a single
point in time, and the income statement summarizes a firm's financial transactions over an
interval of time. These two financial statements reflect the accrual basis accounting used by
firms to match revenues with the expenses associated with generating those revenues. The
cash flow statement includes only inflows and outflows of cash and cash equivalents; it
excludes transactions that do not directly affect cash receipts and payments. These noncash
transactions include depreciation or write-offs on bad debts or credit losses to name a few.
The cash flow statement is a cash basis report on three types of financial activities: operating
activities, investing activities, and financing activities. Noncash activities are usually reported
in footnotes.

The cash flow statement is intended to provide information on a firm's liquidity and solvency
and its ability to change cash flows in future circumstances

1. provide additional information for evaluating changes in assets, liabilities and equity
2. improve the comparability of different firms' operating performance by eliminating
the effects of different accounting methods
3. indicate the amount, timing and probability of future cash flows
The cash flow statement has been adopted as a standard financial statement because it
eliminates allocations, which might be derived from different accounting methods, such as
various timeframes for depreciating fixed assets.
LITERATURE REVIEW

 Dittmar, J. mahrt-Smith and H. Servaes (2017) made a study on International

Corporate Governance and Corporate Cash holdings. In this study they selected 11000
companies from 45 countries. They found strong support for agency explanations for
cash holdings. The result of the study showed that companies in countries where
corporate governance is weak hold significantly more cash. Other factors like
investment opportunities and information asymmetries, which affect the cash holding
previously, did not expert much influence on the level of cash holdings of firms with
weak shareholder protection.

 Harford, S.A. Mansi and W.F. Maxwell (2016) found in spending hypothesis that
firms with poor corporate governance spend excess cash on acquisition and large
capital expenditures rather than saving it for future purposes. Such step reduced the
value of the firm. In their study, they found no evidence that cash holdings affect
R&D expenditures; they found that cash rich firms with poor shareholders rights
invest less in R&D. The result of their study showed that cash rich firms with poor
corporate governance had lower profitability and valuation.

 M.L. Jose, C. Lancaster and J.C. (2015) Stevens made a study on liquidity
management. In this study they argued that for long-time prospects and healthy
bottom lines of the business needed good liquidity management. They also mentioned
that the cash conversion cycle was a dynamic measure of ongoing liquidity
management. It combined both the balance sheet and income statement data for
measurement. They also argued that there was a significant and negative relation
between profitability and CCC.

 Fungai N Mauchi et al.(2014) conducted a case study on Hunyani Flexible products

for the period 2000 to 2010. In this study they used the judgment sampling procedure.
For this reason a sample of thirty out of fifty employees was chosen which included
ten managers, ten accounts clerks and ten employees etc. The study revealed that
more cash would be tied up in debtors. In this study they argued that the key to
successful cash management lies in tabulating realistic projections, monitoring
 collections and disbursements, establishing effective billing and collection measures
and adhering to budgetary parameters because cash flow would be the problem to the
business organization. They also suggested that cash management was the culture
form part of the strategy of companies and more depended on managers themselves.

 J. B. Baskin(2013) in his study of Corporate Liquidity in Games of Monopoly Power

in 1987 argued that firms with abundant investment opportunities also had an
incentive to hold more cash to maintain their competitive positions. He also showed
that holding excess cash might deter competition in a firm’s product markets.
OBJECTIVES OF THE STUDY:
 To know the Management of cash in the organization INDIA BULLS
SECURITIES LTD.
 To access the efficiency with sources and uses of cash were made by the co
ordinance the present year 2015-2016 to 2018-2019.
 To identify the changes in the elements of focus and uses of working capital in
between above mentioned year.
 To improve the financial performance of the company.

SCOPE OF THE STUDY:

Since it will not be possible to conduct a micro level study of all Stock broking in
Telangana, the study is restricted to INDIA BULLS SECURITIES LTD only.

To know cash flow from one to one, as the time available is very limited and the subjects are
very vast, the study is continued to overall financial condition of a firm. This study is to
know working capital increase or decrease funds from operation, sources and application of
funds of M/S INDIA BULLS SECURITIES LTD.

Financial analysis consists of funds flow analysis. To know cash flow from one to one, as the
time available is very limited and study is continued to overall financial condition of a firm.
The study to know working capital increase or decrease, cash from operation, source and
application of funds
METHODOLOGY OF STUDY:

The following are the main sources of date used for this study which are Collected
and compiled from published and unpublished sources of the Company data. The
published sources are as follows.
1) Management information system published by INDIA BULLS SECURITIES LTD.

2) Status Report on INDIA BULLS SECURITIES LTD.

4) Journals, books and other published reports.

The present study is mainly based on primary and secondary sources of Data
collection. The primary data was directly collected by observations, Interviews
questionnaire etc.
The secondary data was collected from the literate available in libraries and research
studies and annual reports are related to the present study. It includes published and
unpublished literature like books, reports and generally Articles of the INDIA
BULLS SECURITIES LTD.
3.1 Introduction to Indiabulls
Indiabulls is India’s leading Financial and Real Estate Company with a wide presence
throughout India. They ensure convenience and reliability in all their products and services.
Indiabulls has over 640 branches all over India. The customers of Indiabulls are more than
4,50,000 which covers from a wide range of financial services and products from securities,
derivatives trading, depositary services, research & advisory services, consumer secured &
unsecured credit, loan against shares and mortgage & housing finance. The company employs
around 4000 Relationship managers who help the clients to satisfy their customized financial
goals. Indiabulls entered the Real Estate business in the year 2005 with its group of
companies. Large scale projects worth several hundred million dollars are evaluated by them.
Indiabulls Financial Services Ltd is listed on the National Stock Exchange (NSE), Bombay
Stock Exchange (BSE) and Luxembourg Stock Exchange. The market capitalization of
Indiabulls is around USD 2500 million (29thDecember, 2006). Consolidated net worth of the
group is around USD 700 million. Indiabulls and its group companies have attracted USD
500 million of equity capital in Foreign Direct Investment (FDI) since March 2000. Some of
the large shareholders of Indiabulls are the largest financial institutions of the world such as
Fidelity Funds, Goldman Sachs, Merrill Lynch, Morgan Stanley and Farallon Capital.

In middle of 1999, when e-commerce was just about starting in India, Sameer Gehlaut and
his close IIT Delhi friend Rajiv Rattan got together and bought a defunct securities company
with a NSE membership and started offering brokerage services . A Few months later, their
friend Saurabh Mittal also joined them. By December 1999, the company embarked on its
journey to build one of the first online platforms in India for offering internet brokerage
services. In January 2000, the 3 founders incorporated Indiabulls Financial Services and
made it as the flagship company.

In mid 2000, Indiabulls Financial Services received venture capital funding from Mr L.N.
Mittal & Mr Harish Fabiani. In late 2000, Indiabulls Securities, a subsidiary of Indiabulls
Financial Services started offering online brokerage services and simultaneously opened
physical offices across India. By 2003, Indiabulls securities had established a strong pan
India presence and client base through its offices and on the internet.

In September 2004, Indiabulls Financial Services went public with an IPO at Rs 19 a share.
In late 2004, Indiabulls Financial Services started its financing business with consumer loans.
In March 2005, Indiabulls Properties Private Ltd, a subsidiary of Indiabulls Financial
Services, participated in government auction of Jupiter Mills, a defunct 11 acre textile mill
owned by NTC in Lower Parel, Mumbai. Indiabulls Properties private Ltd won the mill in
auction and that purchase started Indiabulls real estate business. A few months later,
Indiabulls Real Estate company pvt ltd bought Elphinstone mill in Lower Parel, another
textile mill auctioned by NTC.

With real estate business gaining size, Indiabulls Financial Services demerged the real estate
business under Indiabulls Real Estate and each shareholder of Indiabulls Financial Services
received additional share of Indiabulls Real Estate through the demerger. Subsequently,
Indiabulls Financial Services also demerged Indiabulls Securities and each shareholder of
Indiabulls Financial Services also received a share of Indiabulls Securities.

In year 2007, Indiabulls Real Estate incorporated a 100% subsidiary, Indiabulls Power, to
build power plants and started work on building Nashik & Amrawati thermal power plants.
Indiabulls Power went public in September 2009.

Today, Indiabulls Group has a networth of Rs 16,796 Crore & has a strong presence in
important sectors like financial services, power & real estate through independently listed
companies and Indiabulls Group continues its journey of building businesses with strong cash
flow.
MANAGEMENT TEAM

Indiabulls Group

 Mr Rajiv Rattan - Vice Chairman

 Mr Saurabh Mittal - Vice Chairman
 Mr Gagan Banga - Group Spokesperson
 Mr Ashok Kacker - Group President

 Mr Saket Bahuguna - Group CLO

 Mr Ashok Sharma - Group CFO
 Mr Ajit Mittal - Group Director
 Mr Gurbans Singh - Group Director
 Mr Tejinderpal Singh Miglani - Group CIO

Indiabulls Financial Services Limited

 Mr Gagan Banga - CEO

 Mr Ashwini Kumar Hooda - DMD

Indiabulls Real Estate Limited

 Mr Vipul Bansal - CEO

 Mr Narendra Gehlaut - Joint MD

Indiabulls Power Limited

 Mr Ranjit Gupta - CEO

 Mr Murali Subramanian - COO

Indiabulls Securities Limited

 Mr Divyesh Shah - CEO

 Mr Vijay Babbar – DMD
India bulls supports Money life Foundation in Empowering Investors

“Moneylife Foundation” in collaboration with Indiabulls, recently organized an ‘Investor,

Empower Yourself’ seminar, which was held at the lush Town & Country Club at New
Gurgaon, in the National Capital Region (NCR), on Saturday, 7th May 2011. This was the
first occasion for Moneylife Foundation to venture into other territories outside Maharashtra.
Indiabulls played a major role in helping this event happen successfully.

The event witnessed over 300 attendees not only from Gurgaon but also from other parts of
National Capital Region (NCR), Delhi, Allahabad, Ludhiana, Chandigarh & other cities from
northern region of India. The venue was fully packed with eager & curious investors.
“Moneylife Foundation” expressed its gratitude towards helpful team of Indiabulls led by Mr.
Gagan Banga, CEO - Indiabulls Financial Services Ltd, for making this event such a huge
success.

The event started with introductory remarks & guidance by Mr. Gagan Banga, CEO -
Indiabulls Financial Services Ltd. Mr. Veeresh Malik, Consulting Editor, Moneylife, Delhi
gave a brief introduction about Moneylife Foundation.Then audience was guided by Sucheta
Dalal, Trustee - Moneylife Foundation and Managing Editor- Moneylife, on How to be Safe
with your money & Debashis Basu, Trustee - Moneylife Foundation and Editor- Moneylife
about How to be smart with your investments. Mr. Sachin Choudhary, Director & Business
Head - Indiabulls Housing Finance Ltd, talked about Do's and Don’ts of Housing Mortgages.
Ms. Sucheta Dalal also explained the importance & procedure of Wills & Nominations.

This event helped people in understanding how to become an aware and empowered investor.
The attendees included both finically literate & new investors. They posted number of
intelligent questions which were adequately answered by all the speakers. Empowering
today’s investors by creating awareness and guiding them in taking wise decisions when it
comes to money or investments was the main objective of ‘Investor, Empower Yourself’
seminar. During the Panel Discussion with the panel members Sucheta Dalal, Debashis Basu
& Sachin Choudhary, quite a few interesting & informative issues regarding Investments
were discussed. Mr. Monu Ratra, National Sales Manager - Indiabulls housing Finance Ltd
gave Vote of Thanks.
This event received many request and suggestions from audience about continuing with such
events all over India so that citizens of India will be more empowered investors & ultimately
nation will benefit from it. There were some requests from audience to telecast further events
live on television & internet so that those who are unable to attend the event will also get the
guidance. The knowledge shared about the investments during the event was well appreciated
by all.

Moneylife Foundation has been instrumental in promoting financial literacy & pro-customer
advocacy in India. Moneylife Foundation has been organizing such events at the Moneylife
Knowledge Centre in Mumbai, and also in various cities across Maharashtra. The Foundation
has completed 15 months of spreading financial literacy & has hosted around 49 speakers and
61 events. Currently, more than 5,000 people are members of the Foundation.

After the seminar, Indiabulls received feedbacks from some attendees congratulating
Indiabulls’ team about the success of seminar. Many of the attendees mentioned that they are
looking forward to such seminars in future.

Indiabulls has been participating in such Corporate Social Activities with many other socially
aware groups and trusts & Indiabulls is committed to continue in doing so in future.