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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.


The importance of Cash management in any industrial concern cannot be

overstressed. Under the present inflationary condition, management of Cash is perhaps more
important than even management of profit and this requires greatest attention and efforts of
the finance manager. It needs vigilant attention as each of its components require different
types of treatment and it throws constant attention on exercise of skill and judgment,
awareness of economic trend etc, due to urgency and complicacy the vital importance of

The anti-inflationary measure taken up by the Government, creating a tight money

condition has placed working capital in the most challenging zone of management and it
requires a unique skill for its management. Today, the problem of managing Cash has got the
recognition of separate entity, so its study and management is of major importance to both
internal and external analyst to judge the current position of the business concerns. Hence, the
present study entitled “An Analysis on Cash Management” has been taken up.


 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



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”


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.


 Primary Sources
1. Data are collected through personal interviews and discussion with Finance-
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.


 Cash flow statement

 Trend analysis
 Ratio analysis.


 It helps to take short term financial decision.

 It indicates the cash requirement needed for plant or equipment expansion
 To find strategies for efficient management of cash.
 It helps to arrange needed funds on the most favourable terms.
 It helps to meet routine cash requirement to finance the transaction.
 It reveals the liquidity position of the firm by highlighting the various sources
of cash and its uses.


 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






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.

Other leading cities in stock market operations

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
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

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

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

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.

Indian Stock Exchanges - An Umbrella Growth

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

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 Pattern of the Indian Stock Market

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.

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

 OTCEI has widely dispersed trading mechanism across the country which provides
greater liquidity and lesser risk of intermediary charges.

 Greater transparency and accuracy of prices is obtained due to the screen-based

scripless trading.

 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.

 Faster settlement and transfer process compared to other exchanges.

 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.

National Stock Exchange (NSE)

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.

Trading at NSE can be classified under two broad categories:

(a) Wholesale debt market and

(b) Capital market.

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.

There are two kinds of players in NSE:

(a) trading members and

(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.

 Delays in communication, late payments and the malpractice’s prevailing in the

traditional trading mechanism can be done away with greater operational efficiency
and informational transparency in the stock market operations, with the support of
total computerized network.

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.


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

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.

Why Economic Planning for India?

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.

In India, capital is scarce; and unemployment and disguised unemployment is prevalent.

Thus, where capital was being scarce and labour being abundant, providing useful
employment opportunities to an increasing labour force is a difficult exercise. Only a
centralized planning model can solve this macro problem of India.

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
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.

Planning History of India

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.

Objectives of Indian Planning

The Planning Commission was set up the following Directive principles :

 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.

 To make such interim or auxiliary recommendations as appear to it to be appropriate

either for facilitating the discharge of the duties assigned to it or on a consideration of
the prevailing economic conditions, current policies, measures and development
programs; or on an examination of such specific problems as may be referred to it for
advice by Central or State Governments.

The long-term general objectives of Indian Planning are as follows:

 Increasing National Income
 Reducing inequalities in the distribution of income and wealth
 Elimination of poverty
 Providing additional employment; and
 Alleviating bottlenecks in the areas of : agricultural production, manufacturing
capacity for producer’s goods and balance of payments.
Economic growth, as the primary objective has remained in focus in all Five Year Plans.
Approximately, economic growth has been targeted at a rate of five per cent per annum. High
priority to economic growth in Indian Plans looks very much justified in view of long period
of stagnation during the British rule


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.
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

Mr. Sonjoy Chatterjee,
Executive Director

Management ICICI Prudential Asset Management Company(AMC)

Mr.Nimesh Shah- Managing Director & CEO
Mr. B Ramakrishna - Executive Vice President
Mr. Raghav Iyengar - Executive Vice President & Head – Retail & Institutional Business
Mr. Hemant Agarwal - Head - Operations
Mr. Rahul Rai - Head – Real Estate Business ICICI Prudential Asset Management Company

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.


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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.

Flexible Rider Options

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.

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.


 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
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,
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
 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'
 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
 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.
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.
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.
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)

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.




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.

Cash management is also important because it is difficult to predict cash flows

accurately, particularly the inflows, and there is no prefect coincidence between the inflows
and outflows of cash. During some periods, cash outflows will exceed cash inflows, because
payments for taxes, dividends, or seasonal inventory build up. At other times, cash inflow
will be more than cash payments because there may be large cash sales and debtors may be
realized in large sums promptly. Further, cash management is significant because cash
constitutes the smallest portion of the total current assets, yet management’s considerable
time is devoted in managing it. In recent past, a number of innovations have been done in
cash management techniques. An obvious aim of the firm these days is to manage its cash
affairs in such a way as to keep cash balance at a minimum level and to invest the surplus
cash in profitable investment opportunities.

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.


The firm’s need to hold cash may be attributed to the following three motives:
 The transactions motive
 The precautionary motive
 The speculative motive
The transactions motive requires a firm to hold cash to conduct its business in the
ordinary course. The firm needs cash primarily to make payments for purchases, wages and
salaries, other operating expenses, taxes, dividends etc. The need to hold cash would not
arise if there were perfect synchronization between cash receipts and cash payments, i.e.,
enough cash is received when the payment has to be made. But cash receipts and payments
are not perfectly synchronized. For those periods, when cash payments exceed cash receipts,

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.

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.

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.


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.
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.

2. Money market rates:

If money will bring a low return a firm may choose not to invest it. Since the loss or
profit is small, it may not be worth the trouble to make the loan. On the other hand, if interest
rates are very high, every extra rupee will be invested.
3. Variation in cash flows:
Some firms experience wide fluctuation in cash flows as a routine matter. A firm with
steady cash flows can maintain a fairly uniform cash balance.
4. Compensating balance:
If a firm has borrowed money from a bank, the loan agreement may require the firm to
maintain a minimum balance of cash in its accounts. This is called compensating balance. In
effect this requires the firm to use the services of bank a guaranteed deposit on which it pays
no interest. The interest free deposit is the bank’s compensation for its advice and assistance.

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.


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.

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.
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.
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.


a) Stretching Accounts Payable

A firm should pay its accounts payables as late as possible without damaging its credit
standing. It should, however, take advantages of the cash discount available on prompt

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.

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.

d) Playing the float

The amount of cheques issued by the firm but not paid for by the bank is referred to as
the “payment float”. The differences between “payment float” and “collection float” are the
net float. So, if a firm enjoys a positive “net float”, it may issue cheques even if it means
having an ever drown account in its books. Such an action is referred to as “playing the
float”, within limits a firm can play this game reasonably safely.
Thus management of cash becomes essential and it should be seen to, that neither
excessive nor inadequate cash balances are maintained.


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.


A Cash flow analysis is an important financial tool for the management. Its chief
advantages are as follows.

1. Helps in efficient cash management

Cash flow analysis helps in evaluating financial policies and cash position. Cash is
the basis for all operation and hence a projected cash flow statement will enable the
management to plan and co-ordinate the financial operations properly. The management can
know how much cash is needed from which source it will be derived, how much can be
generated, how much can be utilized.

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.,

3. Discloses the movements of Cash

Cash flow statement discloses the complete picture of cash movement. The increase
in and decrease of cash and the reasons therefore can be known. It discloses the reasons for
low cash balance in spite of heavy operation profits on for heavy cash balance in spite of low
4. Discloses success or failure of cash planning
The extent of success or failure of cash planning be known by comparing the
projected cash flow statement with the actual cash flow statement and necessary remedial
measures can be taken.
One of the primary responsibilities of the financial manager is to maintain a sound
liquidity position of the firm so that the dues are settled in time. The firm needs cash to
purchase raw materials and pay wages and other expenses as well as for paying dividend,
interest and taxes. The test of liquidity is the availability of cash to meet the firm’s
obligations when they become due.
A firm maintains the operating cash balance for transaction purposes. It may also
carry additional cash as a buffer or safety stock. The amount of cash balance will depend on
the risk-return trade-off. If the firm maintains small cash balance, its liquidity position
weakens, but its profitability improves as the released funds can be invested in profitable
opportunities (marketable securities). When the firm needs cash, it can sell its keeps high
cash balance, it will have a strong liquidity position but its profitability will be low. The
potential profit foregone on holding large cash balance is an opportunity cost to the firm. The
firm should maintain optimum – just to enough, neither too much nor too little – cash
balance. How to determine the optimum cash balance if cash flows are predictable and if
they are not predictable.
Optimum cash balance under certainty
The Baumol model of cash management provides a formal approach for determining a
firm’s optimum cash balance under certainty. It considers cash management similar to an

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 balance

C/2 Average


0 T1 T2 T3
Baumol’s model for cash balance

Cost trade-off: Baumol’s model

Optimum Cash Balance under uncertainty:

The Miller-Orr Model
The limitation of the Baumol model is that it does not allow the cash flows to
fluctuate. Firms in practice do not use their cash balance uniformly nor are they able to
predict do not use their cash inflows and outflows. The Miller-Orr model overcomes this
shortcoming and allows for daily cash flow variation. It assumes that net cash flows are
normally distributed with a zero value of mean and a standard deviation. The MO model
provides for two control limits-the upper control limit and the lower control limit as well as a
return point. If the firm’s cash flows fluctuate randomly and hit the upper limit, then it buys
sufficient marketable securities to come back to a normal level of cash balance (the return
point). Similarly, when the firm’s cash flows wander and hit the lower limit, it sells sufficient
marketable securities to bring the cash balance back to the normal level (the return point)


Virginia department of transportation Richmond, Virginia.

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

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

Transportation is restoring fiscal accountability by implementing several budgetary

and financial changes, including adopting a debt management policy and model. Additionally,
they are establishing a methodology to identify statewide transportation priorities and
developing project management policies.

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.

Maintenance is still an area of concern at Transportation. The growing maintenance

requirements and the limited ability to budget on a needs-based approach increases the risk of
inappropriately applied funding. Once the asset management system is fully implemented a
needs-based approach will be possible and Transportation will be able identify and prioritize
maintenance projects.

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

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

It is a Financial Overview for School Administrators is a succinct overview of public

school finance, presenting concepts of importance to both site-based and central-office
leaders. A pragmatic blend of theoretical concepts and factual information provides readers
with an excellent synopsis of public school finance.

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

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.

(Cash Management: A Financial Overview for School Administrators, by Enid Beverley

Jones, Scarecrow Press, Lanham, Md., 2001)




Particulars 2006-2007 2008-2009 2010-2011 2012-2013
Net Profit 621082 1183275 478738 400470
Depreciation during the 1260161 1440184 1620207 1800231
FFO(FLO) 1881243 2623459 2098945 2200701

Sundry debtors 736292 293962
Prepaid Expenses 43200
Sundry creditors 4731130 1710210 10643203
Outstanding liabilities 1009534 91841
Bank O/D 2950464 10801353

Stock 1497634 567073 1755576 1106913
Bank O/D 2950464
Outstanding liabilities 767131 334244
Sundry Debtors 9562393 910746
Sundry Creditors 1699354

CFO(CLO) 9854229 342963 1516020 8950797

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

Sales of Asset 797244

Increase in share 2800000
Total 9868793 1204885 6831363 9014379

Cash outflow from
Purchase of Asset 9776411 6767781 7004825
Decrease in loan 27704 900340 1731144
Decrease in share 200000
Closing balance 64678 104545 63582 278410
Total 9868793 1204885 6831363 9014379


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.


Y = a + bX

Where a = ∑Y ; b = ∑XY
n ∑X2


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

a = 1, 42, 09,108 = 2, 84,182.6


b = 61, 86,505 = 6, 18,650.5


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


YEAR X X2 Debtors XY
(Rs) (Rs)
’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

a = 3, 24, 46,378 = 64, 89,275.6


b = 3, 10, 99,369 = 31, 09,936.9


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

value in 2008 will be about 1, 58, and 19,086.3.

4.3.3 CASH / BANK

Cash / Bank
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

b = 5, 26,593 = 52,659.3


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.


Loans &
YEAR X X2 Advances XY
(Rs) (Rs)
’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

a = 46, 20,354 = 9, 24,070.8


b = 28, 70,104 = 2, 87,010.4



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,



YEAR X X2 Liabilities XY
(Rs) (Rs)
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

a = 3, 89, 21,661 = 77, 84,332.2


b = 2, 93, 86,914 = 29, 38,691.4



The table shows that the company’s current liability will be increased from the every
Current Liabilities value in 2013 will be about 1, 66, 00,406.4.


Current asset
X X2 (Rs) XY

08-09 -2 4 21,27,277 -42,54,554
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

b = 5,08,06,947 = 50,80,694.7

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 is a powerful tool of financial analysis. A Ratio is defined as

“the indicated quotient of two mathematical expressions” and as “the relationship between
two or more things”. In financial analysis, a ratio is used as a benchmark for evaluating the
financial position and performance of a firm.

Ratio helps to summarize large quantities of financial data and to make
qualitative judgment about the firm’s financial performance.


4.4.1 Current Assets to Fixed Assets Ratio

The formula for the ratio is Current Assets

Fixed Assets
Current Assets to Fixed Assets Ratio
YEAR Decrease
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.

4.4.2 Current Assets to Total Assets Ratio

The formula for the ratio is Current Assets

Total Assets
Current Assets to Total Assets Ratio

YEAR Decrease

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

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.

4.4.3 Net Working Capital Ratio

The formula for the ratio is Net Working Capital

Net Assets

Net Working Capital Ratio

YEAR Decrease
2008-2009 0.27:1

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

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.

4.3.4 Inventories to Current Assets Ratio

The formula for the ratio is Inventories

Current Assets

Inventories to Current Assets Ratio

YEAR Decrease
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

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.

4.4.5 Sundry Debtors to Current Assets Ratio

The formula for the ratio is Sundry Debtors

Current Assets
Sundry Debtors to Current Assets Ratio

YEAR Decrease

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

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.

4.4.6 Loans and Advances to Current Assets Ratio

The formula for the ratio is Loans and Advances

Current Assets

Loans and Advances to Current Assets Ratio

YEAR Decrease
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

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

4.4.7 Cash to Current Assets Ratio

The formula for the ratio is Cash

Current Assets

Cash to Current Assets Ratio

YEAR Decrease
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

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.

4.4.8 Cash to Working Capital Ratio

The formula for the ratio is Cash

Working Capital
Cash to Working Capital Ratio

YEAR Decrease

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
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.

4.4.9 Cash to Sales Ratio

The formula for the ratio is Cash

Cash to Sales Ratio

Increase /
YEAR Decrease
2008-09 0.0007:1
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

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.

4.4.10 Cash Ratio

The formula for the ratio is Cash

Current liabilities

Cash Ratio

Increase /
YEAR Decrease
2008-09 0.0064:1
2009-10 0.0112:1 0.0048
2010-11 0.0160:1 0.0048
2011-12 0.0044:1 -0.0116
2012-13 0.0221:1 0.0177

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.

4.4.11 Current Ratio

The formula for the ratio is Current Assets

Current liabilities
Current Ratio

Increase /
YEAR Decrease
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
2012-13 1.62: 1 0.35
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.

4.4.12 Liquidity Ratio

The formula for the ratio is Liquid Assets

Current liabilities

Liquidity Ratio

Increase /

Inference: YEAR Decrease

This ratio helps the
2008-09 0.94: 1
management to 2009-10 0.50: 1 -0.44 measure short-
term solvency. The 2010-11 1.07: 1 0.57 ideal liquid ratio is
1:1 2011-12 1.03: 1 -0.04
2012-13 1.24: 1 0.21

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

4.4.13 Super Quick Ratio

The formula for the ratio is Super Quick Assets

Quick liabilities
Super Quick Ratio

Increase /
YEAR Decrease
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
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.

Hence it shows that ICICI BANK LTD.. is able to meet its current obligations

4.4.14 Working Capital Turnover Ratio

The formula for the ratio is sales

Working Capital
Working Capital Turnover

Increase /
YEAR Decrease
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

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.

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.

4.4.15 Inventories Turnover Ratio

The formula for the ratio is Cost of Goods Sold

Average Stock

Inventories Turnover

YEAR Increase /
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

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

4.4.16 Debtors Turnover Ratio

The formula for the ratio is Sales

Sundry Debtors
Debtors Turnover

Increase /
YEAR Decrease
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
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.

4.4.17 Debt Collection Period Ratio

The formula for the ratio is Days in a Month

Sundry Debtors turnover

Debt Collection Period Ratio

Increase /
YEAR Decrease
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
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.

4.4.18 Cash Interval Measure Ratio
The formula for the ratio is Current Assets – Inventories

Avg. Daily Operating Exp.

Cash Interval Measure Ratio

Increase /
YEAR Decrease
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
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.


 The cash management of ICICI BANK LTD..has been working well in the
 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
 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
 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
 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.

 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
 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.


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..


 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.


 www.financeindia.org
 www.fao.org