A STUDY ON CASH MANAGEMENT

CHAPTER-I

INTRODUCTION

"Cash, like the blood stream in the human body, gives vitality and strength to a
business enterprises." Though cash hold the smallest portion of total current assets.
However, "Cash is both the beginning and end of working capital cycle - cash,
inventories, receivables and cash." it is the cash, which keeps the business going.
Hence, every enterprises has to hold necessary cash for its existence. Moreover,
"Steady and healthy circulation of cash throughout the entire business operations is the
basis of business solvency." Now-a-days non-availability and high cost of money have
created a serious problem for industry. Nevertheless, cash like any other asset of a
company is treated as a tool of profit." Further, "today the emphasis is on the right
amount of cash, at the right time, at the right place and at the right cost." In the words
of R.R. Bari, "Maintenance of surplus cash by a company unless there are special
reasons for doing so, is regarded as a bad sigh of cash management." As, "holding of
cash balance has an implicit cost in the form of its opportunity cost."
Cash may be interpreted under two concepts. In narrow sense, "Cash is very important
business asset, but although coin and paper currency can be inspected and handled, the
major part of the cash of most enterprises is in the form of bank checking accounts,
which represent claims to money rather than tangible property." While in broader
sense, "Cash consists of legal tender, cheques, bank drafts, money orders and demand
deposits in banks. In general, nothing should be considered unrestricted cash unless it is
available to the management for disbursement of any nature.

" Thus, from the above quotations we may conclude that in narrow sense cash means
cash in hand and at bank but in wider sense, it is the deposit in banks, currency,
cheques, bank draft etc. in addition to cash in hand and at bank. "Cash management
includes management of marketable securities also, because in modern terminology
money comprises marketable securities and actual cash in hand or in bank."
The concept of cash management is not new and it has acquired a greater significance
in the modern world of business due to change that took place in the conduct of
business and ever increasing difficulties and the cost of borrowing." Apart from the fact
that it is the most liquid current assets, cash is the common denominator to which all
current assets can be reduced because the other current assets i.e. receivables and
inventory get eventually converted into cash. This underlines the significance of cash
management

BACKGROUND OF STUDY

The term cash management refers to the management of cash resource in such a way
that generally accepted business objectives could be achieved. In this context, the
objectives of a firm can be unified as bringing about consistency between maximum
possible profitability and liquidity of a firm. Cash management may be defined as the
ability of a management in recognizing the problems related with cash which may come
across in future course of action, finding appropriate solution to curb such problems if
they arise, and finally delegating these solutions to the competent authority for carrying
them out The choice between liquidity and profitability creates a state of confusion. It
is cash management that can provide solution. Cash management may be regarded as
an art that assists in establishing equilibrium between liquidityand profitability to
ensure undisturbed functioning of a firm towards attaining its business objectives.

Cash itself is not capable of generating any sort of income on its own. It rather is the
prime requirement of income generating sources and functions. Thus, a firm should go
for minimum possible balance of cash, yet maintaining its adequacy for the obvious
reason of firm's solvency. Cash management deals with maintaining sufficient quantity
of cash in such a way that the quantity denotes the lowest adequate cash figure to meet
business obligations. Cash management involves managing cash flows (into and out of
the firm), within the firm and the cash balances held by a concern at a point of time.
The words, 'managing cash and the cash balances' as specified above does not mean
optimization of cash and near cash items but also point towards providing a protective
shield to the business obligations. "Cash management is concerned with minimizing
unproductive cash balances, investing temporarily excess cash advantageously and to
make the best possible arrangement for meeting planned and unexpected demands on
the firms cash.
NEED OF THE STUDY

Availability of External Cash

Determinable Variations of Cash Needs
Contingency Cash Requirement
Maximizing Cash Receipts
Minimizing Cash Disbursements
Maximizing Cash Utilization
Concentration Banking
Local Box System
Reviewing Credit Procedures
Minimizing Credit Period
STATEMENT OF THE PROBLEM:

Efficient management of Cash is a success of any business. It has a bearing on

the credit worthiness, liquidity, solvency and profitability. Cash Management is mainly
concerned with the proper management of Cash flow in various department of the
industries.

The Cash Management department must see whether the risk, cost and flow
control. Consideration is properly balanced in a given situation. The Cash management
has to be managed properly or profitability adversely affected due to locking up of
costly funds unnecessarily. On the other hand of the Cash Management is inadequate
the company will become illiquid and consequently may not have ability to meet its
current obligation.

RESEARCH METHODOLOGY OF STUDY

The research design used in this project is Analytical in nature, which the
researcher has to use facts or information already available, and analysis. These to use
facts or information already available, and analysis these to make a critical evaluation
of the performance of the industry.
This study is based on the data about for a detailed study of its Cash Management,
documents and system ratios and finally to recognize and determine the positions of the
company.

RESEARCH DESIGN:
 The research approach used for the study is descriptive. The form of the study is
on the financial statement analysis in general and specific to the cash position. The project
attempts to understand the tolls offered by institutions today that make this possible. Both side
of the services of collections as well as payments have sought to be examined with an
emphasis on how these products have developed and offered by industry.

METHOD OF DATA COLLECTION

SOURCE OF DATA

Data that has been collected from first-hand-experience is known as Source data.
Source data has not been published yet and is more reliable, authentic andobjective.
Source data has not been changed or altered by human beings, thereforexits validity is
greater than secondary data.

SECONDARY DATA

Data collected from a source that has already been published in any form is calledas
secondary data. The review of literature in any research is based on secondarydata.
Mostly from books, journals and periodicals.
SCOPE OF THE STUDY

It helps to take short term financial decision.

It indicates the cash requirement needed for plant and equipment expansion
programme.
It reveals the liquidity position of the firm by highlighting the various sources of
cash and its uses.
To find strategies for efficient management of cash.

OBJECTIVES OF STUDY

To determine the overall performance of cash in the concern.

To know the credit worthiness of the concern.
To assess the liquidity and short term solvency position of the firm.
To understand the relationship maintained with the trade creditors and the
debtors of the firm.
To identify the basic forces influencing the cash management of the firm.

PERIOD OF THE STUDY:

The study was carried out in SIVA PUMPS INDIA PVT

LTD,COIMBATORE in the field of cash management for the period of 2011 to 2016.
LIMITATIONS OF THE STUDY

As central purchase office, purchase raw material and central marketing yarn
make sales. Information that is so more detailed cannot be received about these.
Cash from debtors a collected by the corporate office through commission
agents. So efforts for collection of debtors cannot be clearly known from SIVA PUMPS
INDIA PVT LTDs, COIMBATORE.
Investment of funds are also made by corporate office, so it becomes difficult to
know that how much investment is made in different ways for continuous availability
of funds.

AREA OF THE STUDY:

The Area of the study was conducted by theSIVA PUMPS INDIA PVT LTD,
COIMBATORE.

CHAPTER SCHEME:

CHAPTERIZATION I: Deals with Introduction

CHAPTERIZATION II: Deals with Review of literature
CHAPTERIZATION III: Deals with Company profile
CHAPTERIZATION IV: Deals with Data Analysis and Interpretation
CHAPTERIZATION V: Deals with Finding Suggestion and Conclusion
 CHAPTER-II

REVIEW OF LITERATURE

Richard A. Lancioni& Keith Howard-1978 in their study considers the

inventorymanagement as an extremely important function to any business, the
inadequacies in control can result in serious problems. If inventories are managed in an
inefficient manner, it is likely to result in delays in production, dissatisfied customers,
or curtailment of working capital.

Mohammad Morshedur Rahman-2011, says that the textiles Industry plays a

vital role in thesocio-economic development of Bangladesh, but the profitability of this
industry is not satisfactory. He studied whether the profitability is affected by Working
Capital Management.Ratio Analysis, Correlation Matrix and Regression Analysis have
been used in his study to show Profitability, Working Capital position, correlation
between them and the impact of Working Capital on Profitability respectively. Annual
Reports and official records as well as primary data collected through questionnaire
were the sources of data. His study observed that profitability and Working Capital
Management position of the Textiles Industry are not satisfactory which revealed that
Correlation exists between Working Capital Management and Profitability. His study
also shows that Working Capital Management has a positive impact on Profitability.

Md. Mazedul Islam, Adnan Maroof Khan and Md. Monirul Islam-2013, In
their study theyhave mentioned that the importance of the textile industry in the
economy of Bangladesh is very high. The garments manufacturing sector earned $19
billion in the year to June 2012, one of the impoverished nation's biggest industries.
Currently the textile industry in Bangladesh is facing great challenges in its growth rate.
The major reasons for these challenges can be the global recession, unfavorable trade
policies, internal security concerns, the high cost of production due to increase in the
energy costs, different safety issues specially fire, etc. With an in-depth investigation
they found that the Bangladesh textile industry can be brought on top winning track if
government and others individuals takes serious actions in removing or normalizing the
above mentioned hurdles. Additionally, the government should provide subsidy to the
textile industry, minimize the internal dispute among the exporters, withdraw the
withholding and sales taxes etc. Purchasing new machinery or enhancing the quality of
the existing machinery and introducing new technology can also be very useful in
increasing the research and development (R and D) related activities that in the modern
era are very important for increasing the industrial growth of a country.

Shahid Ali-2011, He has studied the association between working capital

management and theprofitability of textile firms in Pakistan. Efficiency of working
capital management is reflected by three variables, cash conversion efficiency, days
operating cycle and days of working capital. We use return on assets, economic value
added, return on equity, and profit margin on sales as proxies for profitability. A
balanced panel dataset covering 160 textile firms for the period 2000 05 is analyzed
and he estimates an ordinary least squares model and a fixed effect model. Return on
assets is found to be significantly and negatively related to average days receivable,
positively related to average days in inventory, and significantly and negatively related
to average days payable. Also, return on assets has a significant positive correlation
with the cash conversion cycle, which would suggest that a longer cash conversion
cycle is more profitable in the textiles business. The findings of the regression analysis
show that average days in inventory, average days receivable, and average days
payable have a significant economic impact on return on assets. The findings of the
fixed effect model reveal that average days in inventory and average days receivable
both have a significant impact on return on assets.
MehrunisaSajjad and KhuramShahzad Bukhari - The study done in Pakistan
presents an in-depth analysis of how cash management, inventory management and
trade credit management practices affects the Working Capital Management in a local
spinning, weaving and composite units' setting and the way they impact the firm's
profitability. They observed that with relatively poor cash management and inventory
management practices, textile companies have remarkably better trade credit
management arrangements. Larger companies have superior cash management,
inventory management and trade credit management as compared to medium and
smaller units. Due to absence of inventory control systems in majority of the firms with
no effective re-ordering techniques, there appears a serious need to review and
strengthen the inventory management policies andbased on revised inventory controls
an appropriate re-ordering system should be designed. Textile companies are
remarkably better at trade credit management and most of the companies have special
mechanisms to expedite collections and cheques. Putting it together, larger spinning,
weaving and composite units have superior working capital management practices as
compared to the smaller and medium textile units (spinning, weaving and
composite).The dilemma of the industry is the mindset of managers always relying on
past experience and traditional judgment. A very few have adopted the sophisticated
techniques for cash management, inventory management and trade credit management.
All components have a significant impact on earnings per share and EBIT of the
respective organization as illustrated by linear regression analysis with cash
management having the strongest impact and are found to be critical decisive in the
success or failure of a textile firm. Their research findings are likely to be beneficial for
the corporate decision makers of the textile industry, financial institutions and policy
makers in Pakistan in order to execute the most favorable strategies to support
industrial growth.

HA,Mwansele, FJ,Sichona, RRJ,Akarro-2011, They examined inventory

situation at UrafikiTextile Mills Co Ltd in Dar-es-Salaam, Tanzania and tried to
develop the Economic Order Quantity (EOQ) model that will be used to determine
number of units of an item to order at a time and the re-order point (r), that is the level
to which stocks of items are allowed to fall before ordering other items, for raw
materials. The resulting EOQ for each raw material is compared to the actual ordered
quantities so as to see whether there is any relationship between them in operational
cost reduction. Their study used cross section secondary data from Urafiki. They used
normal distribution test to compare operational cost reduction. The use of Excel was
made to find EOQ and the re-order point. Their result shows that the relationship
between the EOQs and the ordered quantities at Urafiki in terms of operational cost
reduction was significant. Therefore, it is recommended that in order to manage
inventory effectively, Urafiki needs to employ inventory control methods such as the
EOQ model to obtain reasonable ordered quantities for its raw materials.

Dr.T.S Devaraja-2011, India is the worlds 2ndlargest producer of textiles and

garments afterChina. It is the worlds third largest producer of cottonafter China and
the USAand the second largest cotton consumer after China. The Indian textile
industry is as diverse and complex as country itself and it combines with equal
equanimity this immense diversity into a cohesive whole. The fundamental strength of
this industry flows from its strong production base of wide range of fibres / yarns from
natural fibers like cotton, jute, silk and wool to synthetic /man-made fibres like
polyester, viscose, nylon and acrylic. The growth pattern of the Indian textile industry
in the last decade has been considerably more than the previous decades, primarily on
account of liberalization of trade and economic policies initiated by the Government in
the 1990s. The relative ease of setting up clothing companies, coupled with the
prevalence of developed-country protectionism in this sector, has led to an unparalleled
diversity of garment exporters in the third world. Apparel is an ideal industry for
examining the dynamics of buyer-driven value chains.

Donald S. Allen-1995, His study support the anecdotal evidence that inventory
managementmethods in the United States have changed significantly over the past
decade or two, which is evident in the reduced business inventory-to-sales ratio, driven
almost entirely by lower inventories of work-in-process, and materials and supplies
rather than finished goods. The impact of these changes in inventory management
techniques on business cycles is ambiguous. All other things being equal, inventory
management innovations should reduce the probability of unintended accumulation.
But as long as firms overestimate or underestimate future demand, inventory cycles will
persist. And if cutbacks in production are required to reduce inventory thenthe resulting
reduction in income could result in lower demand and further inventory buildup.
Inventory management innovations are not a panacea for all the business cycles. In the
long run these innovations in Inventory management can contribute to a faster response
of production to changes in demand. It can in turn reduce the boom-bust cycle in the
economy.
 Donald S. Allen-1997, The common assumption is that firms use inventories to
smoothproduction. Like his previous research based on aggregate data, his research at
the level of individual companies fails to confirm this hypothesis, although select firms
showed evidence of seasonal smoothing. But the results do confirm the stylized
empirical regularity that production varies more than sales, both at the firm level and in
the aggregate. One possible explanation of the failure to confirm smoothing is that
increased demand prompts firms to raise their inventory targets levels; thus planned
inventory increases are positively correlated with sales. Unplanned inventory changes,
which would reflect the buffer stock motivation, are negatively correlated with sales but
insufficient to make the variance of production less than that of sales. In the buffer
stock test of the correlation between changes in sales and changes in inventory, most
firms showed negative correlations. This finding is consistent with the idea that
inventories act as a buffer stock to unexpected changes in sales. The negative
correlation between changes in sales and changes in inventory may be a better test of
whether buffer stock movement is prompted by random demand in the presence of
partial adjustment and serially correlated demand. Thus result also seems to suggest
that many industries may be making partial adjustments in their inventories.

Ian M.Taplin-2006 found while studying the EU textile and clothing industry,
that clothingproves more robust in retaining an employment presence than the more
capital-intense textile sector. This is surprising since labor intense industry is expected
to suffer more from intensified global competition than capital intense ones. Job losses
continue in both sectors but firms are innovating in restructuring practices to remain
competitive and responsive to buyer pressure. Technological innovation and the pursuit
of niche markets plus increased outsourcing are key responses. Thus among all the
pressures they leave no scope for internal inefficiencies within the firm.

CHAPTER-III
 INDUSTRY PROFILE

INTRODUCTION TO THE ORGANIZATION

The Siva pumps has been developed to provide smallholder farmers with an
affordable and sustainable way to bring water to their fields. The Siva Pumps panel
captures the sunlight and converts it into electricity which drives the pump. The
pump comes in a suction version (up to 7m) and a deepset version up to 20m.
The capacity on a clear day is maximum 13 m3/day when lifting from 4m and 4
m3/day when lifting from 20m. The capacity can be increased by adding a second
Siva Pumps panel. Assuming a crop requirement of 5l/m2.day, this capacity is
enough to serve a field of 2500 m2 and 800 m2 respectively. Future pump ltd(UK)
is the company that manufactures and markets the pump with technical support
from PRACTICA.

GOALS

In the long term the goal is to provide farmers in developing countries with
access to this technology so that they can increase their income and at the same
time increase food production.

The Siva Pumps is presently marketed in Kenya and field tested in Ethiopia,
Nepal, Honduras, Zambia and Burkina Faso. The field test experiences will be fed
back into the design to improve the product.

ACTIVITIES

Refine the design

Supervise the production in India
Follow up on the field trials in Ethiopia, Nepal, Honduras, Zambia and Burkina
Faso.

BUDGET
 Liberty foundation: three grants with a total value of 101.000 have supported
the design phase of the Siva Pumps pump and the elaboration of a business plan to
introduce this pump on the Ethiopian market.
IDE Powering Agriculture grant, 100.000 for 2014 and 50.000 for 2015.
Powering Agriculture II, through Futurepump UK a further 70.000 is expected
over the period 2016-2018.

A siva pump has been developed and tested that is affordable, economically
viable and suits the needs of smallholder farmers in developing countries. The
pump is currently produced by Future pump India ltd at a rate of 100 pumps per
month. The intention is to ramp up production to 10.000 units per year by 2017.
Please contact Future pump Ltd for distribution enquiries.

The Mangalore Electricity Supply Company (Mescom) may initiate a project

to install siva pump sets used by farmers.

As an initial step, one pump set will be introduced in Kanchinadka area and
if it yields result, the project may be upgraded to supply potable water to people in
Padubidri. Each siva pump set costs Rs 7.5 lakh and some fear that the farmers
may find it costly.

The response to siva mission has not been very encouraging in Karnataka. A
Mescom official was quoted by the media saying that the company is planning to
introduce Siva Pumps pump-sets for irrigation in the coming days. There should be
good support from the government by providing subsidies and loan facilities to
farmers to buy these pump sets, UmeshNayak, a farmer in Padubidri, said.

PV water system to solve problems of agricultural water conservancy and

desert control

With agricultural farmland decrease, the desert area continues to expand, the
extreme arid climate impact on food production, solving water supply has become
the root of problem of agriculture.
 Compared with the traditional diesel pump and electric pump irrigation, Siva
Pumps pump has great advantage. It will become the main way of agricultural
irrigation in the future, has a wide application prospect.

What a Siva Pumps water pumping system is

A Siva Pumps water pumping system mainly consists of array, water

pump inverter and 3 phase AC pump, easy for use. In order to reduce the
construction and operation cost, to improve the reliability of the system, the system
rejects storage battery which could cause serious pollution to environment, storing
water instead of electricity, reduces the construction cost and maintenance cost.

Who we are

Shenzhen Siva Pumps tech Renewable Energy Co.,Ltd is a professional

Siva Pumps pumping system and Siva Pumps grid-connected system manufacturer,
handling R&D, production as well as sales. Dr. Xuzhen, our CTO (chief
technology officer), helped the government to design and create a Siva Pumps
water pumping system for highway desertification protection in Hade district of
Xinjiang province in 2001. The system has been running steadily more than 10
years already. The successful experience has proved that our system can
completely meet the requirements of forest creating along the highway in the
desert, but without any pollution.

What we have done

Project 1
Project Location: Bangladesh

Project Name: PS5500 Siva Pumps water pumping system for farmland irrigation

Solution: The system utilizes 8.9KW PV panel to power a 5.5KW AC submersible

pump with a Siva Pumpstech 7.5KW Siva Pumps pump inverter for control and
conversion. The pump draws water from 10 meters underground, and water flow
reaches 800-1000m3 per day.

Economy Benefit: The system generates 16020 kWh of power every

year. During its 25-year lifespan, the system will save coal 150.6 tons; reduce
carbon emission 66.3 tons, sulfur dioxide3 tons, dust 2.3 tons and lime ash 39.2
tons.

Project 2

Project Location:Changjiang City, Hainan Province, China

Project Name:PS5500 Siva Pumps Pumping System for Farmland Irrigation

Project Introduction:

Yangliu village is located in Changjiang City, Hainan Province, and with

482241M2 plough area. Farmers rely on electricity for irrigation until now.
Melons, vegetables and peanuts are the main crops there. In 2010, Hainan
government highly appreciated and advocates green and low carbon agriculture,
mainly on irrigation water conservation. Therefore, the first set of Siva Pumps
irrigation system is installed.

Solution:

Siva Pumps pumping system consists of a Siva Pumps array, Siva Pumps
pumping inverter and a three-phase AC pump. The Siva Pumps array is composed
of many Siva Pumps cells panels connected in series and in parallel, converting
irradiation from sunlight to electrical energy. The pumping inverter controls and
regulates pumping operation and converts DC to drive AC pumps. The AC pump
is driven by a 3-phase induction motor, draws water from well, rivers or lakes,
stores in tank or uses for irrigation directly. Utilizing Siva Pumps PS5500 Siva
Pumps pumping system, The pump draws water from 15 meters underground.
Daily water output of the system is up to 360M3.

Economy Benefit:

The system generates 15330 kWh electricity annually. In its 25-year long
application, the system is able to save standard coal up to 144 tons, reduce
emission of carbon dioxide, sulfur dioxide, soot and ash by 63 tons, 2.8tons, 2.16
tons and 37.44 tons respectively. This system was driven by Siva Pumps energy
and works automatically. It is environmental friendly to Hainan Island. Low-
Carbon Agriculture for Islands is the first in the world, SIVA ted from Hainan
Island. The application sets a new ground for low-carbon economy.

INTRODUCTION TO THE INDUSTRY

INDIAN PUMPS INDUSTRY

 Indian Pump Industry has more than 500 manufacturers with worker
strength of over 30,000 producing 1 million pumps valued at Rs.12 billion. During
the period 1978-94 pump industry has maintained an average growth of 15% p.a.
The pump manufacturers are able to meet 84% of the domestic market demand and
export pumps worth Rs.2 billion in 1997-98. It services all sectors of the Indian
Industry viz. Agriculture, Public Health Engineering, Water supply, Chemical and
process industries, Refinery and Petrochemical, Paper, Steel, Mining, Power
Generation, Food Processing pharmaceutical, Sewage and Effluent treatment etc.

Pumps account for 30% of the power consumption in the country. Thus,
efficient operation of pump system can yield substantial savings. The industrial
Pump-motor system is a major determinant of cost of production in the industry by
way of capital investment and running cost. Not only the pump and drive selected
for optimal performance, but pump-motor system as a whole should be efficient
and reliable and reliable.

TIFAC has therefore, commissioned Techno-market survey on industrial

pumps and motor systems. Selection of pump-motor system would differ from one
industry to another due to changes in application parameters, process parameters
and liquid characteristics. Hence, it will not be practical to cover all industries in a
single study. In this study Municipal Wastewater Treatment industry is taken as the
focus industry.

Different pump technologies are available for transporting liquids under

different operating conditions in the industry. The centrifugal pump technology,
which works on a simple principle cover 85% of industrial applications. The high
velocity head imparted to the liquid by rotation of impeller is converted into
pressure due to increasing passage area of the volute.

The popularly used variations of CENTRIFUGAL PUMP TECHNOLOGY are:

End suction pump:

Made in both horizontal as well as vertical execution, these types of pumps

have advantage of being simple, low cost and compact and is generally the first
choice of designer. Such pumps are manufactured to ISO:2858 for application in
chemical and process industry and for refinery service pumps are made as per API
610 specifications.

Self-Priming Centrifugal Pumps:

Pump casing is of unique design. Liquid is retained in it, which at the time of
reSIVA ting, works as the intake for the impeller and pump is primed. The pump is
used for dirty water, emptying pits and employed in situation where suction lift
conditions are there. It has the advantage of avoiding foot valves often a source
of problems. Pumps fitted with open impeller are used in mining and construction
industry and de-watering duty. The disadvantage is its higher cost and lower
efficiency.

Split Casing Pumps:

The Pump body is split in two half along the upper half of the body to be
removed for carrying out maintenance to the rotating parts without disturbing
suction or discharge PUMPSline. The pump has distinct advantage of ease of
maintenance and is used for water supply services (for fire fighting, cooling water,
raw water, cooling tower supply), mine de-watering and as bilge and ballast pump.

Multi-Stage Centrifugal Pump:

In this pump, series of impellers are mounted on a common shaft. The liquid
moves from one impeller to another with a volute or diffuser following each
impeller such that the head increases progressively. The pump may be split axially
or radially and has 2 to 15 stages. Pumps are used for pumping mine water from
mine to surface level, boiler feed duty, high pressure booster systems, reverse
osmosis etc.

Slurry Pump:

This pump handles solids suspended in liquid in slurry form. The major
concern in pumping slurry is the abrasive wear of pump components exposed to
the liquid. Selection of best material for pump components to resist wear or to be
isolate from the abrasive media is vital. Rubber-lined or hard metal End-suction
pump are used. Pumps are deployed to handle mine slurries, fly ash slurry, mill
scale, sand and gravel slurry, ceramic slurry etc.

Vertical Column Sump Pump:

It is an end-suction pump in vertical orientation with the impeller

submerged below the liquid. Such pumps are inexpensive as compared to self-
priming pumps and simple to operate and maintain with added advantage of not
requiring a mechanical seal. It is used to pump out variety of waste liquids from
underground pits/sumps in different industries.

Vertical Turbine Pump:

This is a multi stage pump in vertical execution in which the motor is

installed at the surface level while the pump is located inside the liquid. The
diffuser bowls are located in line with the impeller rather than outside of them as is
the case in horizontal multi stage pump. The pump is used to handle large volume
of raw water in drinking water and irrigation schemes, raw water intake in Thermal
power plants, paper plants and fertilizer plants.

POSITIVE DISPLACEMENT PUMPS have a positive sealing line formed

between the pump elements and the liquid is displaced along this sealing line by
movement of the pumping element. The pumping element may have reciprocating
or radial motion. Different pumps working on this principle are;

Plunger / Piston Pump:

Plunger or Piston reciprocates inside a cylindrical liner to displace liquid

from suction to discharge port. Piston pumps may be single acting or double
acting. Pump with single piston is called Simplex; with Two pistons Duplex and
with three pistons Triplex. In Plunger pump, the reciprocating member is plunger
but it is single acting only.

Such pumps are used for metering services and high-pressure application.
Variation of out put is achieved by adjusting the stroke length of the pump. High-
pressure piston pump is used in oil producing sector, construction industry and
cleaning application. Large pressure pulsation necessitates use of pulsation
dampener.

Diaphragm Pump:

The back and forth flexing of a diaphragm causes the liquid to flow into and
out of the pump. The diaphragm may be moved mechanically or may be actuated
by compressed air or hydraulic fluid. Check valves are provided at inlet and outlet
port. These pumps are self-priming, seal-less, can run dry, and handle solids with
liquids. Mechanically actuated Pumps are used for metering service, having
accuracy of +/- 1%. Air operated diaphragm pump are used to handle sewage,
slurries and other corrosive liquids. Pump produces pressure pulsation requiring
use of dampener and has lower efficiency.

Eccentric Screw Pumps:

A single-helix metallic rotor rotates inside double helix polymer stator. The
rotor forms sealing line along its pitch length and liquid is carried in the cavity
between the stator and the rotor. Pump can handle solids and viscous or sticky
liquids. It has a gentle pumping action and has no valves that may get jammed. It is
used to handle a variety of viscous liquids and abrasive slurries. The pump should
not be run dry.

Twin Screw Pumps:

 Two screws intermesh with each other and rotate inside a pump casing. The
liquid is transported between flank of the screw and the pump casing. The pump is
used to handle the different fuel oils and other viscous liquids but cannot handle
suspended oils. Its capability to run in dry condition makes it ideal for unloading
service.

Triple Screw Pump:

This pump has a central screw driven by the prime mover while the other 2
screws are run by the center screw. Pumping action is similar to Twin screw pump.
These pumps have higher efficiency and high pressure developing capability with
added advantage of being compact. It is used for boiler fuel feeding application;
power source for hydraulic lifts and in centralised lubrication system in large steel
mills. The limitation of the pump is its incapability to handle solids and it cannot
run dry.

Sliding Vane Pump:

Vanes slide in the slots cut length wise in rotor and the rotor is inside an
eccentrically shaped casing, which acts like a cam. Pumps are self-priming, of
simple construction and have feature of self-compensation for wear on the vanes.
Pumps are employed for handling oil in lubrication service or as power packs for
low pressure hydraulic motors. Pumps are unable to handle suspended solids,
corrosive liquids and highly viscose media.

Gear Pump:

The Gear Pump has two meshing gears rotating inside a casing. Liquid is
carried between gear teeth and the casing and displaced as the teeth mesh. The
pump is, economical, pulsation free and quiet in operation. External as well as
Internal gear configurations are possible. Pumps are used for handling LDO, lube
oil, fuel oil, paints, viscose and other clean viscous liquids. Pump cannot handle
suspended solids and cannot run dry.

Lobe Pump:

Pump has one or more lobes that rotate at slow speed inside the casing to
displace the liquid. The wide spaces between the lobes and the slow speed make it
ideal for handling fragile solids and shear-sensitive liquids. Pump output is subject
to pressure pulsation and high amount of slip with low viscosity liquids. Pumps are
employed to handle food products and pharmaceutical formulations.

Archimedean Screw Pumps:

This pump has an inclined screw conveyor shaft rotating within a close
fitting open type cylindrical conduit. The helical screw blades force the liquid
along the inclined conduit. These pumps are used in sewage treatment industry for
transfer of sludge.

Peristaltic Pump:

It has roller or cam attached to rotor, which squeezes the tube as it passes
across it, drawing the liquid in the tube and delivering it to the discharge side. The
pump is seal-less and rotating element is not exposed to the liquid. Pump is used
where high order of cleanliness and hygiene is essential; like pumping of human
blood/plasma, other medical and bio-medical applications.

The capacity and pressure range as well as material options of different

types of pumps described above is summarized in Annexure I. Table 5.3 & 5.4
compare total lifetime cost of different pumps for two typical applications in
Sewage treatment industry.

Presently, the Indian market for centrifugal pump for industrial application is
estimated to be Rs.65 million growing at a annual rate of 8%. The awareness level
amongst user industries regarding application of positive displacement pump is
lower as compared to centrifugal pump technology. This is also depicted by the
fact that in India share of positive displacement pump in the domestic market is
approximately 10% which in international market is approximately 20%. Market
for positive displacement pump in India is valued at Rs.1.2 million. Piston /
Plunger Pump has the largest share in this market followed by Screw pumps and
Gear pumps.

While there are different pump technologies from which the plant designer
has to select the pump, it is very important that correct selection is done for the
type of pump, material of construction, shaft sealing and size of pump.

There are various parameters which influence pump selection.

Application Parameters

Capacity

Pressure

Temperature

Suction conditions or NPSHA

Point of installation of pump

Liquid Parameters

Chemical characteristics

Specific Gravity

Suspended solids and abrasion due to nature and size of solids

Viscosity and flow characteristics.

Process Parameters

Hygienic duty

Inline cleaning
 Gentle handling of sheer sensitive liquid

Maintenance in place

Preliminary step for selecting a pump SIVA ts with estimation of capacity

and differential head. Depending upon application, liquid and process parameters
described above, type of pump is selected. This requires matching of different
operating parameters with pump characteristics. Table 3.1 indicates type of pump
to be used for commonly encountered liquids in different industries.

Having decided the type of pump to be used, pump sizing is done. Usually,
pump manufacturer does the Pump sizing from the sizes available in his production
programme. For centrifugal pump, care is taken to select a pump size in which the
duty point is close to the best efficiency point of the pump.

For positive displacement pump, the limitation on pump speed is considered

based on parameters of viscosity, abrasion or NPSHA. The pump size, which gives
the desired capacity within the above speed limit, is selected.

In both, Centrifugal as well as Positive displacement pump, the material of

construction is determined by the chemical and abrasion characteristics of the
liquid being handled at the pumping temperature. Appendix 1 lists variety of
liquids and suitable material of construction options. Shaft sealing option is
finalised in consultation with Packing / Seal manufacturer considering above
factors.

AC induction motors are the most widely used prime mover for industrial
pumps. AC induction motors of different construction and mounting configuration
are available. The motors can be foot, flange or wall mounted. Different motor
enclosures are:

Drip proof motor

Explosion proof motor

Flame proof motor

 Vertical motor

Two speed motor

Submersible motor

It is important that motor is selected in a proper manner for long life

and efficient operation. Different parameters which are important for selection of
motor are:

Power required by the pump

Pump speed

Nature of SIVA ting (Closed Valve / Open Valve)

Work condition like voltage and frequency of AC supply, presence of

vapour / gas chemicals where motor is to be installed.

Efficiency

Temperature

Presently, selection of motor for driving the pumps is carried out with
involvement of consultation 15% of cases pertaining to new projects. In 45% of
cases, pump set complete with motor is procured from pump manufacturers while
the balance purchases involve procurement of motor by the user organisations.

Indian manufacturers are producing motors of all types, which are

comparable to those in the international market. Abroad, development of high
efficiency motors has helped reduce energy losses in the motor. Energy efficient
motors cost 15% to 30% higher than comparable standard motors but depending
upon the application, the higher initial cost can be recovered by savings in the cost
of energy.

Variable speed drive is used for pump having variation in discharge rate and
provides power saving. Different types of variable speed drives are available, viz.
Pulse Width Modulated inverter, Eddy current or slip coupling drive, Switched
Reluctance Drive etc. Variable frequency drives are proven to be advantageous due
to their higher efficiency, capability to integrate with drive control software.

Variable speed drive can regulate pump flow by consuming lesser energy in
comparison to conventional method of using throttling valve on Pump discharge
line. Savings in Power cost due to energy conservation by use of Variable speed
drives can pay back the additional investment in cost of drive in a short span of
time.

Installation of variable speed drive requires that the site is well ventilated,
free from corrosive fumes and radio frequency interference. Multiple pumps can be
run by operating a single drive or individual drive with each pump can be installed.

In India, use of variable speed drive with pumps is limited at present due to:

High cost of variable frequency drive

Misconception among engineers that such drives are sophisticated

equipment requiring trained personnel for installation and operation

Poor energy conservation efforts and

Ignoring possible opportunity of power conservation in pumps of lower HP

rating.

Abroad, favourbale experience of variable speed drive for power

conservation in high HP equipment has led to development of micro drives. These
are low cost drives for lower power rating pumps.

The pump and motor have to be matched for optimal performance. The
torque-speed characteristics of the motor and pump should be matched to ensure
availability of SIVA ting as well as running torque for the pump. The moment of
inertia for the pump motor system ahs to be considered to determine the
acceleration time for the motor to attain full speed. The SIVA ting torque of the
motor is influenced by method adopted to SIVA t the motor. DOL SIVA ting
provides higher SIVA ting toque in comparison to SIVA delta SIVA ting.

The pump and motor are connected through flexible coupling which
transmits the power. The coupling while transmitting power, takes the load of axial
misalignment. Different types of flexible couplings available in India include tyre
type coupling, pin and bush coupling, gear type coupling, spider coupling, spacer
coupling etc.

Certain pumps are complete with motor like Submersible Pumps. The pump
is close coupled with a motor, which is designed to operate while submerged in the
liquid to be pumped. The motor is filled with oil and separated from the pumped
liquid by a mechanical seal. This motor may be coupled to multi stage centrifugal
pump or non-clog centrifugal pump for handling raw water, drinking water or
sewage / effluents respectively.

The shaft sealing is often a cause of concern to plant designers particularly

when the liquid being handled is highly obnoxious / toxic or hazardous. Seal-less
pumps have been developed to cater to the requirement of this market segment.

There are two types.

Magnetic Drive Pump:

The mechanically driven pump has no physical coupling provided between

pump shaft and the drive motor. Instead, a magnetic drives is used. The impeller of
the pump is supported on plain bearing inside the isolation shell which also houses
the inner rotor or flux receiving ring. Outside the isolation shell, an outer magnetic
ring is rotated by the prime mover. Magnetic flux passes through the air gap in
isolation shell to the inner rotor which follows the rotation of the outer rotor.

Canned Motor Pump:

Pump and motor is an integral construction and there is no shaft seal. The
pump section is identical to a conventional centrifugal pump. The motir is a 2 or 4
pole induction motor having stator and rotor canned within corrosion resistant non-
magnetic liner and sleeve. The entire outside of the motor is enclosed in a
secondary leakage containment shell. Primary protection is provided by corrosion
resistant liners which are seam welded and assure that pumped liqued does not
contact stator windings.

Seal-less pumps are used in nuclear power plants, refrigerant pumping, high
temperature liquid handling, pumping of hazardous chemicals.

Consultants and pump manufacturers perceive that 28% of users can

effectively and independently select pump. Related to operation and maintenance
of pump-motor system, the percentage of users in similar category is much higher
(71% and 90%). Consultants have elaborate vender registration and evaluation
procedure. In the bid evaluation process, different technical parameters are
compared by Consultants. Some of the consultants apply price loading for higher
power consumption to lay emphasis on pump-motor system efficiency and equate
pumps having higher running cost with those having lower running cost. However
for spares consumption, no such equalisation procedure is presently being adopted
for bid evaluation.

The performance of pump-motor system in the Indian industry is

influenced by a number of parameters related to application aspects, operational
aspects, maintenance aspects and other aspects as follows:

Application Aspects

Selection based on insufficient data

Inadequate data on duty condition with user.

Actual duty parameters differing from design duty point due to safety
margins built in.

Selection of pump/Motor by Stockist or dealer.

Mismatch of Pump and drive characteristic.

 User voluntarily decides on a cheaper pump compromising operational
efficiency and service life.

Operational Aspects

Improper installation of Pump-Motor system.

Misuse / abuse of pump by user due to exigencies or ignorance

Violation of instructions, DOS and DONTS by user due to ignorance or

insufficient training.

Absence of Pump-motor performance Monitoring System.

Absence of Failure analysis system.

Maintenance Aspects

Inefficient preventive maintenance

Improper gland tightening

Use of spurious spares

Inadequate training for Maintenance of Pumps more in case of Positive

displacement pumps

Predictive techniques like Vibration analysis not used.

Other Aspects

Procurement of Pump-Motor system on initial cost basis.

No validation of quoted pump performance parameters prior to its delivery

and installation
 Poor awareness of energy costs and energy conservation measures at lower
levels in the organisation.

The above practices need to be corrected to optimise performance of pump-motor

system.

Sewage treatment plant of Ahmedabad and Pune were studied and compared
with case studies of sewage treatment plants of other countries. It was
discovered that:
In Indian plants non-clog centrifugal pumps are being used and consultants
are invariably involved for detailed engineering and selection of pump-
motor system.
In foreign countries, the trend is towards use of submersible pumps for
sewage handling.
There is significant variation in volume of inflow of wastewater. In India,
this variation is taken care of by operating one or more pumps depending on
the volume of liquid to be handled. The trend abroad is to use pumps with
variable speed drive resulting in substantial power saving.
There is no monitoring and measurement of performance of pump motor
system after commissioning of sewage treatment plant in India. Abroad,
sophisticated systems connected through modern to centralised computer are
used to monitor the efficiency of pump-motor system and generate important
data.
Use of non-clog centrifugal pumps, require construction of dry well for
pump installation involving sizeable construction cost. Use of Submersible
pump technology can eliminate this cost & offer additional advantage of
lower maintenance, easy installation and accessibility of pump.
The pump-motor system consumes significant part of the total power
employed for running sewage treatment plant.

Specific to sewage handling, different design modifications are carried out

to major components like casing, impeller, wear plates and rings, shaft and bearing
assemblies etc. Further, the material of construction for sewage pump is selected in
a manner to provide longer useful life and reliability. Pumping of sludge in sewage
treatment plant, pose challenge due to varying flow characteristics of the sludge.
Digested sludge exhibit poor flow characteristics and pump losses are much
higher. Plunger and progressive cavity pumps are used for dense sludge. For
dosing of flocculent and other chemicals for chemical treatment of the effluent,
Piston or Diaphragm pumps are employed.

Technology development in Indian pump industry has taken place by

way of technical collaboration with foreign manufacturers or through reverse
engineering practices to produce pumps benchmarked against available products in
the market of Indian or foreign origin. Indian pump industry is able to meet pump
requirements of 95% of applications. The manufacturing capability includes pump
of very high capacity and in variety of materials.

However, there is still room for improvement. The response of consultant

and pump users rate imported pump better than Indian product on various counts
like proven design, wider material options, better finish, better interchangeability,
compliance to ISO 9000 quality assurance system and R&D back up. Further, the
foreign manufacturers have extensive data base built over a long period of
operation in the world market and supplemented by in-house trials.

Indian pump industry passing through a recession has to rise to the

challenges and opportunities of the world market. Based on the
assessment and evaluation of various technology options and present practices
prevailing in the Indian Industry, following recommendations, action plan and
implementation strategy is suggested:

Recommendations, Action Plan and Implementation

Pump manufacturers should focus on application of new materials for

manufacturing Pumps with better performance, in terms of efficiency as well as
reliability. In the international market, variety of high performance alloys and Non-
metallic pumps are offered. For corrosive duties, Plastic materials and for abrasive
liquids, Ceramic coating or pumps in ceramic construction have proved successful.
 Pump manufacturers in co-ordination with Regional Research
Laboratories / Defence Laboratories / Material Science Laboratories for developing
pumps in non-conventional materials.

Gear Pumps manufacturers should develop High precision Spinning pump,

which are being imported at present and are required in large nos. by Man Made
Fibre Industry Apart from design, manufacturers to focus on manufacturing aspects
to achieve close tolerances for high metering accuracy.

Gear Pump Manufacturers to work on this development and take assistance for
machining from Tool rooms established with German collaborations.

Use of submersible pumps in sewage industry should be increased. This

decision can be taken where new pumping stations are being planned or
replacement of existing pumps is contemplated.

Sewage Board/Municipal Corporation Drainage/Sewage Treatment

Department

Peristaltic Pump is not manufactured in India. Although manufacturing of

this type of pump is not tricky, the material of hose or tube has to be such that it
can withstand repetitive cyclic stresses for long service life. In long-term
perspective, efforts to develop this pump should be directed towards solving this
problem. In the short run, import of tube and manufacture of other components to
produce it in India can be initiated.

Pump manufacturer or other industrialist can venture into production based on

feasibility study.

Awareness of applicability of Positive Displacement pumps has been found

to be low due to which centrifugal pump is preferred by users. Most positive
displacement pump manufacturers in the country are small/medium scale units.
Joint efforts should be undertaken by them to increase awareness as well as train
users for their product range. Application Engineering support provided to users by
some manufacturers like Roto Pumps Ltd., has received good response and helped
in increased usage of Positive displacement pump.

Manufacturers of Positive Displacement Pumps to plan promotional measures and

provide application engineering assistance.

Positive displacement pumps are manufactured and tested as per proprietary

standards. Some of the consultants conduct testing of pumps as per API 676.
Comprehensive standards & guidelines for PD Pumps should be published.

BIS may undertake the work in consultation with Positive Displacement

manufacturers.

Presently Magnetic Drive pumps are available indigenously through one or

two manufacturers only. These manufacturers have collaboration with foreign
manufacturers. This technology holds promise in future and indigenous capability
should be built in this field. At first, pumps operating at normal temperatures may
be developed by utilising experience of eddy current drive manufacturers.

Centrifugal Pump manufacturers to develop Magnetic drive pumps in association

with Eddy Current drive manufacturers for normal temperature and simple liquids.

Canned Motor pumps are being manufactured in the country by only one
manufacturer at present. More manufacturers should enter this field. Since cost and
time required for development of technology would be high, route of technical
collaboration with foreign manufacturers may be explored.

Pump manufacturers or other industrialists should put up facilities after feasibility

study and tie up with foreign manufacturer.
 Development of high efficiency motors should be undertaken by Indian
motor industry. For development of better grade of steel for stampings to reduce
losses, help from material research laboratories and steel industry can be taken.

The motor manufacturers in consultation with IIT and Material Laboratories /

Regional Research Laboratories / Defence Laboratories and help from steel
industry.

A cooperative effort in Research and Development has been initiated in

Coimbatore, where SiTarc (Small Industries Testing and Research Centre) has
been set up to provide services to small units. Based on this expereience, a
cooperative Research & Development organisation for Pumps may be initiated
since majority of Pump manufacturers are in small scale and cannot afford their
own R&D facility.

Indian Pump Manufacturers Association can take the lead role to set up such a
unit in consultation with Si Tarc and Pump and Pump manufacturers.

Whereas many units of organised sector have adopted ISO 9000 Quality
Assurance systems, in the small-scale sector, it needs to be adopted at a fast pace.
This would go a long way in improving quality of pumps of small-scale units and
enable them to enter International market as well.

Indian Pumps Manufacturer Association can canvass amongst it s members

and arrange awareness cum training course in association with Si Tarc or other
Quality Management Consultancy organisations.

The user industries should re-evaluate the duty parameters for pumps
installed in their plant. In a big process plant, such an exercise will be costly as
well as time consuming. It is suggested that based on annual power consumption of
the Pumps, an ABC analysis may be applied. Top 10% of Pumps (by number),
that consume maximum power on annual basis, should be taken up in the first
phase for energy conservation exercise. Wherever feasible, pump and motor should
be modified to operate close to their best efficiency point.
 User Industries to undertake such exercise in association with Pump
manufacturers to optimise performance of existing Pump-Motor systems.

Awareness regarding incorporation of Variable speed drive with Pump

should be accelerated. Suitable duty concessions to reduce price of Variable speed
drives may be considered. Pumping applications, where variations in load
characteristic are known to occur should be identified. All new procurements of
pump for such applications should include variable speed drives. Wherever, Pumps
for such applications are operating with fixed speed motors, a time bound plan for
incorporating the variable speed drive has to be drawn up.

Variable speed drive manufacturers to take the lead for canvassing use of
VSD. User Industries to undertake the exercise in association with Pump
manufacturers to identify potential applications for using variable speed drive.
Govt. of India to consider duty concessions for Variable speed drive
manufacturers.

User industry should adopt predictive techniques like vibration anlaysis for
pre-empting pump-motor system breakdown. Further, use of spurious spares
should be avoided to achieve better efficiency and higher service life of Pump-
Motor system.

Maintenance wing of user industries should undertake this exercise.

Presently the procurement procedure of many users lays emphasis on

purchase price. Appropriate weightage for technological factors should be
incorporated for technological factors should be incorporated. Total Life Cycle
criteria should be used for bid evaluation so that Pump-Motor efficiency, Spares
consumption, reliability etc. of different makes of pumps are properly assessed and
compared.
User Industries and Consultants to modify existing bid evaluation process.

Pump manufacturers should impart training to actual operators in user

organisation, so that he understands the significance of various parameters
affecting Pump-motor performance. This would ensure proper installation,
operation and maintenance of Pumps, reduce occasions of Pump misuse / abuse
and reduce downtime.Pump manufacturers to organise training modules at work
site / manufacturing unit with the help of user organisations.

Government of India has made it mandatory for Limited companies to

declare Energy conservation measures undertaken by the company in their annual
financial statements. This has put Energy conservation measures in the agenda of
top management level. However, it has to pervade down to all levels.

Lastly, the Pump industry has to change the old mindset of focussing on
domestic market only. Many investments that may not look lucrative enough in
Indian context may be rewarding on International scale. Larger quantities in World
market can help reduce costs due to economies of scale for Plastic pumps.
Exposure of operating in world market will lead to benchmarking with competing
products resulting in design and quality improvements.
 HISTORY OF THE INDUSTRY

Ten years ago, World Pumps put together a brief history of the pump
industry telling the story of pump development since the Egyptians invented the
shadoof in 200BC. We stopped then at 1999, but here we bring the story right up
to date with some of the main industry events of recent times.

Fifty years ago, Trade & Technical Press launched a new magazine to report
on technical developments in pumps. The original title of Pumping was short-lived,
being soon supplanted by the pan-European Pumps, Pompes, Pumpen in 1965 as
the magazine linked up with the fledgling Europump association. Over the next
seventeen years, the pump industry became increasingly international and in 1982,
the publisher decided to mark this trend by re-launching the magazine as World
Pumps.

The thirtieth anniversary year saw Trade & Technical Press acquired by
Elsevier Science Ltd who incorporated the magazine into its Elsevier Advanced
Technology Division. Since then, a number of editorial changes have brought with
them new approaches as the industry matures. There have been reviews of software
and web pages, eventually eclipsed by sheer numbers. An annual International
Buyers Guide has been published since 1997, and is now supplemented by an on-
line version. Since 2003 World Pumps has worked with BPMA on the annual
prestigious Pump Industry Awards. The magazine now features regular
contributions from the Hydraulic Institute, underlining its international credentials.

Man has been using pumps of some type for 4000 years, which makes 50
years a very short time in the history of pumping. Indeed, looking back at the most
significant developments in technology, the last fifty years seem relatively
insignificant. By 1959, all the major pump designs had been introduced and mostly
developed into commercial products. So what has World Pumps been writing
about for the past 50 years?

Driving trends

One trend has been the increasing importance of niche positive displacement
pumps, particularly rotary types. Peristaltic, progressing cavity and rotary lobe
pumps have all risen in profile as their capabilities have been introduced to new
markets by improved communications. Increasing competition has meant that users
have been more inclined to experiment in the search for the ideal pump for difficult
duties.

The trends that have affected all of us have also had their impact on the
pump market. Increased environmental awareness gave a real boost to pumps
without shaft seals. Magnetic drive and canned motor units have thrived and even
produced a hybrid combining the two technologies. Pump shaft sealing has also
changed dramatically. Asbestos in packing is outlawed and today the vast majority
of new pumps are supplied with mechanical seals, often in factory-assembled
cartridge format to avoid the risk of face damage during handling.

Materials have also developed. Sea-water pumps have seen gunmetal and
aluminium bronze replaced by highly alloyed super-austenitic and super-duplex
stainless steels. New non-metals have made possible tiny pumps for human
implant. Ceramics and tungsten/silicon carbide have vastly reduced wear rates in
pumps of all sizes. Even large sub-sea variable speed super-synchronous drive
motors for pumps are now possible.

Overtaken by computers

Electronics and computers have overtaken all our lives and inevitably have
entered the physical world of pumps in the form of variable speed drives (VSD's),
SCADA systems and condition monitoring equipment. Integral VSDs on in-line
pumping units now dominate the building services market. Pump selection
software has speeded up the process of choosing a pump, as well as opening
opportunities in Sales. For the designer, CAD and CFD have reached new heights.
They can now interact but they still have some way to go before they fully replace
personal expertise.

Life cycle costing has become a part of everyday life and has shown that
energy costs usually eclipse all other lifetime costs. Vast savings are frequently
realised by system improvement but appropriate legislation is practically
impossible to formulate. Although pump efficiency improvements give relatively
small returns for large outlays, legislation for raising efficiency now exists in
Korea and China. The European Commission, as part of its Energy Using Products
Directive, has targeted the raising of efficiencies of water pumps. Europump has
been instrumental in assisting the EC in this task and has proposeda method for
eliminating bad performers.

We are all aware that in recent years, discussions about the pump industry
have been dominated by talk of mergers, takeovers and disposals. Indeed, as we
consider the major pump makers of 2009, it is hard to name one which has not
changed markedly since 1959.

Comings and goings

ITT, IDP, Sterling Fluid Systems, Grundfos, Wilo and ABS have changed
almost beyond recognition. Established independent makers like Harland, Flygt,
Worthington and now Weir Pumps have disappeared, whilst newer names like
Textron, Constellation Capital, IDEX, Pentair and Flowserve have arrived on the
scene, continuing the trend for the biggest companies to get bigger.

Other interesting changes include diversification. For example, after more

than 50 years of providing submersible motors to pump makers, Franklin Electric
has pulled the plug and now buys pump companies to produce its own units.

Mind you, it is also interesting to note from the chronology of the pump
industry listed below, that even in the early years of this magazine mergers and
acquisitions were not unknown and ever since there has been a continuous
environment of change.
Global marketplace

Probably the biggest single change in this industry has been the transition
from a local to a global marketplace. Fifty years ago we had only national trade
associations but today the significant impetus in inter-company relations is at
intercontinental level. The Europump Association has grown massively in stature
and effectiveness in its 49 years, and now works in close partnership with the
Hydraulic Institute in the US. This partnership reflects ever closer cooperation
between pump manufacturers' associations, a development that mirrors this
magazine's evolution from national through European to global coverage.

A brief history of the pump industry

2000
Egyptians invent the shadoof
BC

200 Ctesibius invents the reciprocating pump; Archimedean screw pump

BC described (but not invented) by Archimedes

Sliding vane pump invented by Ramelli; Serviere invents the gear

1580
pump

1650 Otto van Guericke invents his piston vacuum pump

1674 Sir Samuel Morland patents the packed plunger pump

1738 Ural hydraulic machinery plant established

1790 Plenty Ltd established

Thomas Simpson establishes his pump business in London Hayward

Tyler established
1830 Screw pump invented by Revillion

1834 Sulzer Brothers founded

1840 Henry R Worthington invents the first direct-acting steam pump

1848 Goulds Pumps founded

1851 John Gwynne patents his centrifugal pump improvements

1853 BornemannPumpen founded

1856 Gilbert Gilkes& Gordon founded

1857 Roper Pump Company founded

Jacob Edson invents the diaphragm pump and founds the Edson
Corporation

1860 David Brown commences business as pattern maker

Allweiler founded

A.S. Cameron invents the first reciprocating steam pump

1862 Lawrence Pumps established; Philipp Hilge founded

1866 Lederle founded

Sigma Lutin founded; Stork Pumpen founded Scanpump founded

1871 KSB established; Southern Cross established in Australia

 George and James Weir set up the partnership that forms the Weir
Group

1872 Weise &Monski, Ochsner, Byron Jackson and Wilo founded

1873 G & J Weir moves to Glasgow

1875 Hodgkin and Neuhaus, forerunner of SPP, founded

1877 Ritz Pumpenfabrik established

Steimel founded; Hodgkin and Neuhaus becomes the Pulsometer

1878
Engineering Company Ltd

1881 HalbergMaschinenbau founded

1883 Holden & Brooke founded

A W Chesterton founded

1888 Kirloskar Brothers Ltd founded

1890 Salmson SIVA ts making pumps in Paris; OsnaPumpen established

1893 UracaPumpenfabrik founded

1894 SeroPumpenfabrik founded

Peroni founded

1896 KSB opens UK subsidiary; DiaPumpen founded

1897 Wirth founded

 Worthington Pump Company and Thomas Simpson amalgamate to
form Worthington Simpson Ltd

1901 Flygt's forerunner Stenberg founded

1903 Rateau founded

1905 Leistritz Company established

1906 Stuart Turner Ltd founded

1907 Mitsubishi Heavy Industries produces its first pump

1909 TristamPumpen and Pumpenfabrik Ernst Vogel founded

Ingersoll-Rand enters the pump business by acquiring the Cameron

Steam Pumps Works

1910 Gilbarco produces its first gasoline pump

DickowPumpen and Hitachi founded

Jens Nielsen builds the first Viking internal gear pump, founding the
1911
Viking Pump Company

1912 Ebara Corporation founded; Duriron (Durco Pumps) founded

1916 Hazleton Pumps founded as Barrett Haentjens and Co.

Worthington Pump & Machinery Corporation acquires Worthington

Simpson Ltd

1917 John Crane founded; Hydraulic Institute established

 Louis Bergeron invented the concrete volute pump and founded
Bergeron S.A.

1918 Scanpump and CCM Sulzer founded

1919 Torishima Pump Mfg Co and Kawamoto Pump Mfg established

1920 BombasItur, WernertPumpen and SIHI established

1921 LaBour founded

1922 Midland Dairy Machines founded

1923 Peerless founded; Pacific Pumps founded

1924 Jung Pumpen established; Leistritz SIVA ts making screw pumps

Rheinhuette SIVA ts pump production

1926 Arai Pump Mfg. Co. founded

1927 Industrial Filter and Pump Mfg Co forerunner founded

EdurPumpenfabrik founded

1928 Girdlestone Pumps founded

1929 Heishin Works, and Houttuin founded

Pleuger pioneers the submersible turbine pump motor

Stenberg and Flygt commence their cooperation

 Ren Moineau receives a doctorate for his thesis which will lead to
1930
the invention of the progressing cavity pump

Ensival SIVA ts selling centrifugal pumps

Reda Pump Company founded

1931 Imo established by Ingestrm and Montelius

VNII Gidromash research and design organization founded in

Moscow

1932 PCM founded; Sarlin Pumps founded; Bran+Luebbe founded

1933 Bush pump invented; Gormann-Rupp established

Robbins & Myers acquires North American license for the Moineau
1936
progressing cavity pump

Mono Pumps Ltd formed to manufacture and distribute Moineau's

pump design in the UK

1937 Sigmund Pumps Ltd (GB) established

1938 Ebsray and Warman International founded

1940 Grindex founded; Dresser acquires Pacific Pumps

1941 British Pump Manufacturers Association founded

Smedegaard Pumps founded

1944 Franklin Electric founded

1945 Grundfos Pumps, Caprari and Flexibox founded

1946 Cornell Pumps, Klaus Union, Totton Pumps founded

1947 HMD Seal/Less Pumps established; Hyundai founded

1948 Abel Pumps launched; Mast Pumpen founded

Stenberg Flygt AB designs the first submersible drainage pump;

Varisco SIVA ts pump production

1949 HMD supplies its first production magnet-drive pump

1950 BatescrewestabIished; Delasco founded

1951 SaerElettropompe, Tsurumi, NetzschMohnopumpen founded

1952 Lewa and Rovatti founded

1953 Nikkiso established

1954 Orlita and Sta-Rite founded

Bell & Gossett opens its Little Red Schoolhouse training facility

1955 Wilden and DMW Corporation established

Borg-Warner acquires Byron Jackson

1956 Flygt introduces the submersible sewage pump

1957 Richter Chemie-Technik founded

Centrilift founded

1958 Heishin Works becomes Heishin Pump Works Co Ltd

SSP Pumps founded

1959 World Pumps is launched as Pumping

ABS and Calpeda founded

1960 David Brown Pumps division formed

Europump established

1961 Ingersoll-Rand acquires the Aldrich Pump Company

Pulsometer Engineering joins the Booker McConnel Group, which

had already acquired Sigmund Pumps

1962 Acromet commences operations

1964 First edition of the Pumping Manual published

1965 Nigo's Pumps incorporated in India; Warren Rupp founded

Sulzer acquires majority interest in Weise &Monski

Pumping becomes Pumps, Pompes, Pumpen

1966 Crisafulli Pump Company founded; ITT acquires Jabsco

1967 Scienco founded

1968 Johnson Pump International founded

ITT Corporation acquires Flygt

Weir acquires Harland Engineering; Worthington acquires

1969
Worthington-Simpson

Alma Pompe founded; Weir buys Drysdale; Ingersoll-Rand buys

1970
Sigmund Pumps Ltd (GB) in Gateshead, UK

1971 SIHI takes over Halberg; Gvelot group acquires Delasco

Turbosan founded

SeepexSeeberger founded

1973 Crest Pumps Ltd founded

1976 Worthington acquires Sier-Bath Pump Division from Gilbarco

1977 Ingersoll-Rand buys Western Land Roller Irrigation Pumps

Sterling Fluid Systems (TBG) buys Peerless Pump

Thompsons acquires the pump manufacturing operations of Kelly &

1978
Lewis to form Thompsons, Kelly & Lewis

1979 Totton Pumps bought by Wolseley plc

SPP acquires Godiva Fire Pumps

1981 Red Jacket and Hydromatic merge to form Marley Pump

Sterling Fluid Systems takes a half share in SIHI

1982 Pumps, Pompes, Pumpen is relaunched as World Pumps Magazine

Biwater acquires Wallwin Pumps

SPP is subject to a management buy-out

1984 First Texas A&M Pump Users Symposium

SIHI buys the canned motor programme of Bran+Luebbe

1985 Dresser Industries acquires Worthington Pumps

KSB acquires PompesGuinard; Scanpump acquires Pumpex

SIHI buys the pump programme of MAN

Pentair acquires FE Myers; Goulds

Pumps acquires Lowara

SPP acquires Henry Sykes plc

Bedford Pumps launched; BW/IP formed by management buy-out of

1987
Borg-Warner's Industrial Products subsidiary

Weir buys Mather and Platt Machinery; SIHI France buys

Schabaver; Dresser acquires Pleuger Pumps

1988 KSB acquires a majority stake in Georgia Iron Works

 Scanpump acquires PompesLefi; Idex Corporation founded

Weir buys the large pumps business of WH Allen &Gwynnes from

NEI; BW/IP acquires United Centrifugal Pumps

Braithwaite acquires SPP and sells off Godiva Fire Pumps

Elsevier acquires World Pumps; Scanpump acquires ABS; Pearce

1989
Pump Supply founded

TBG acquires SPP Ltd as part of Sterling Fluid Systems

Dresser Industries acquires Mono Pumps Ltd; Ingersoll-Rand

acquires Scienco Ltd

Watson-Marlow bought by Spirax-Sarco

1991 Idex acquires Corken; Baker Hughes acquires Geho

Ingersoll-Rand and Dresser Industries merge their pump businesses

1992
to form Ingersoll Dresser Pumps (IDP)

Warman acquires Girdlestone Pumps

Idex acquires Pulsafeeder and Johnson Pump (UK) Ltd

Weir buys Floway; BW/IP buys ACEC

Ebara establishes state-of-the-art manufacturing plant in Italy

1993 United Dominion acquires Marley Pump

Vogel acquires Ochsner

 Sterling Fluid Systems acquires LaBour

1994 Weir acquires EnviroTechPumpsystems

Warman acquires Barrett Haentjens

Idex acquires Hale Products;

Idex acquires Micropump; BW/IP acquires the Wilson-Snyder

1995
centrifugal pump business from National Oilwell

Durametallic acquires Pacseal and then is bought by Duriron

Hayward Tyler sold by Sterling Fluid Systems, which buys the

1996
remaining half share in SIHI; Grundfos acquires Interdab

Pump Industry Analyst launched

BW/IP acquires Stork Pumps' engineered pumps business

Johnson Pumps International acquires the modular pumps business

Durco and BW/IP merge to form Flowserve Corp.

Idex acquires Blagdon Pumps

Textron acquires Maag Pump Systems

Spirax-Sarco acquires Bredel

Pentair acquires General Signal's Pump Group

Constellation Capital acquires Imo

 David Brown acquires Union Pump Company

Gilbert Gilkes& Gordon buys Wallwin Pumps from Biwater

Textron buys David Brown Union Pumps

Constellation Capital buys Allweiler; Glynwed acquires Friatec;

Sundstrand acquires Ansimag and Masco; Weir buys Schabaver

1999 Hayward Tyler acquires APV Industrial Pumps

Ebara acquires CryoSIVA cryogenic pumps

Howard Anderson buys Pullen Pumps

Sterling Fluid Systems acquires QVF Engineering (Germany)

United Technologies Corp acquires Sundstrand

Textron buys KSB Annecy (France)

Weir Group acquires Warman International (including Girdle stone

Pumps)

United Dominion Industries acquires Bran+Luebbe; Ensival merges

with Moret

2000 Flowserve acquires IDP

ABS acquires CH&E Pumps (USA)

Cat Pumps (UK) buys Ram Pumps

 Grundfos acquires Myson and Sarlin Pumps

Sulzer acquires Ahlstrom Pumps

Watson-Marlow Bredel acquires Alitea (Sweden)

Roper acquires Abel; Blackmer buys Chesterton's System One

pumps

Sulzer (temporarily) decides to leave the pump business; Sundyne

acquires Caster (Italy)

2001 SPX acquires United Dominion Industries

Godwin Pumps of America acquires Godwin Pumps (UK)

Lightnin (of SPX) acquires Plenty Group

Metso acquires Svedala; Idex acquires Versa-Matic

2002 Gorman-Rupp acquires American Machine and Tool

Grundfos takes controlling interest in Chung Suk (Korea)

ITT acquires Svedala Robot (Holland)

Idex acquires Wrightech (USA)

2003 National Oilwell acquires Mono and Corlac (Canada)

Wilo acquires EMU

Weir Engineering Services acquires Allen Gwynnes pump business

 Kirloskar acquires SPP Pumps; KSB acquires controlling share in
BombasItur (Spain)

Howden pumps merge with Orbit in South Africa; Flowserve acquire

2004 Thompsons, Kelly & Lewis; Armstrong Pumps buy Holden Brooke
Pullen, Baric and RMI

Grundfos take control of Philipp Hilge

Dover Resources acquire Almatec

2005 Grundfos takes over Tesla (Italian submersible motor maker)

National Oilwell merges with Varco International

Interpump acquires Hammelmann

Weir acquires PompeGabbioneta (Italy)

Wilo acquires majority holding in Mather & Platt Pumps and Fire
Systems (India)

Grundfos acquires Brisan Turbo (South Africa)

2006 SPX acquires Johnson Pump

Franklin Electric acquires Little Giant Pump

United Components acquire ASC Industries (USA)

Wilo acquires Circulating Pumps (UK)

South Bank UK acquires Hayward Tyler Group

 Sulzer Pumps sells Paco to Grundfos

Pentair acquires Jung Pumpen (Germany)

Lowara buys Mercury submersible motors (Italy)

2007 Sulzer's proposed acquisition of Weir Pumps falls through

Clyde Pumps (part of Clyde Blowers) acquires Weir Pumps

SPX acquires APV

Grundfos acquires Peerless Pump

Wilden Pump acquires Griswold Pump

Franklin Electric acquires Monarch Industries pump division (USA)

Weir Group acquires Multiflo Australia and SPM Flow Control

(USA).

2008 Weir Group acquires CH Warman Pump Group

Franklin Electric acquires Industrias Schneider (Brazil)

Flowserve complete acquisition of Niigata Worthington (Japan)

Dover Corporation acquires Neptune Chemical Pump to join its

Pump Solutions Group (Wilden, Blackmer, Griswold, Almatec)

Weir Group acquires Mesa Manufacturing (USA)

Hamilton Sunstrand acquires Marelli Pumps (Spain)

 Clyde Blowers acquires Textron Fluid and Power division (including
Maag Pump Systems and Union Pumps)

IDEX acquires Richter

Chemie-Technik.

COMPANY PROFILE

As Indias leading manufacturer of energy efficient submersible pumps, we

are well-known in our industry. We create our products for a number of sectors
including agricultural, industrial, domestic and horticultural. The industry
Founder : H. Narendrasamy, Managing director :N.Prabhakaran

However, this wasnt always the case. Since our humble beginnings
back in 1992, we have worked hard to get to where we are today and have had to
embrace every opportunity that has come our way. Luckily, a combination of
passion, grit and determination signifies that our business has not only grown, it
has truly flourished. And now, we are proud to be able to say that we have
achieved our number one goal to be the very best at what we do.

Submersible pumps might not be everyones idea of excitement, but for us

they are just that. In 1992 we decided we wanted Siva Pumps to become an
internationally-known name in the manufacture of stainless steel submersible
pumps and motors. And do you know what? We did it. More recently, we have
also branched out into SIVA -powered pumps and were enjoying watching that
part of the business grow too.
 Here at Siva Pumps we pride ourselves in being seen as pioneers in the
manufacture of 100% submersible stainless steel pumps and motors. Competition
in this field is fierce and we are competing against a number of globally-renowned
businesses. However, it is our use of high-tech processes and innovative designs,
all the hallmarks of Siva pumps, which has set us apart from the rest. It is both our
forward-thinking ethos and attention to detail that has helped us work our way up
to become world class.

Being in this position a global pioneer of such innovative technology

means that Siva Pumps is able to focus on the things that really matter; that is
producing the highest quality, most energy efficient pumps possible. In fact, the
Bureau of Energy Efficiency (BEE) has awarded Siva pumps with 5-SIVA ratings
for more than 260 of our pump models. Not bad going, if we do say so ourselves!

Our pumps are not only energy efficient, but also long-lasting and very easy
to maintain

Because we have been able to put quality hand-in-hand with energy

efficiency Siva pumps is at the forefront of the global pump industry. In short, we
are able to offer our customers some of the best pumping solutions available in the
world today

MISSION
SIVA PUMPS INDUSTRYs current line of products, services and systems
are submersible, mono block and domestic pumps and motors for handling liquids,
particularly water for agriculture, domestic and industrial uses and other
applications like sewerage and sludge and others.
SIVA PUMPS INDUSTRY is committed to achieve growth and aims for a
15% annual compounded increase in sales turnover and remain financially sound.
SIVA PUMPS INDUSTRY has its own state of the art foundry and intends
to continuously modernize manufacturing facilities to make it as one of the best in
the world.
 SIVA PUMPS INDUSTRY serves customers in agriculture, domestic and
industrial segments and has plans to expand product range to cover infrastructure
and marine segments.
SIVA PUMPS INDUSTRY has wide market presence in India. It further
intends to cover 80 % of potential markets and develop markets in untapped
territories and territories where its presence is weak. SIVA PUMPS INDUSTRYs
products are exported to over 80 countries and has plans to develop export market
further. SIVA PUMPS INDUSTRY intends to build brand image further, as a
quality supplier of products and services.
Provide superior customer value and become one of the best customer value
providers in the country. SIVA PUMPS INDUSTRY proposes to benchmark its
products, services and systems with best in class Company in India. It would
achieve this status through product quality, on time delivery, price
competitiveness, total customer solutions, automation through IT applications
across organization including business processes and research, development and
innovation.
SIVA PUMPS INDUSTRY believes in ethical practices and is conscious of its
responsibility towards society and government. SPI believes that human resource is
an asset. It shall constantly endeavor to develop human resources, simultaneously
optimizing interests of all stake holders.
VISION
SIVA PUMPS INDUSTRY wants to be within first five companies in the
country in its current line of business and proposes to expand its scope to cover
other liquid handling products, services and systems.
SIVA PUMPS INDUSTRY aims to provide higher customer value and
wants to become one of the best customer value providers in similar industry in the
country.
SIVA PUMPS INDUSTRY would optimize satisfaction for all its stake holders
and also practice best organizational values
 CHAPTER-IV

DATA ANANLYSIS AND INTERPRETATION

5.1 CASH FLOW STATEMENT:

A cash flow statement is used in conjunction with the other financial statements,
provides information that enables users to evaluate the change in net assets of an
enterprise, its financial structure (including its liquidity and solvency), and its ability to
affect the amounts and timing of cash flow in order to adapt to changing circumstance
and opportunities. Cash flow information is useful in assessing the ability of the
enterprises to generate cash and cash-equivalents and enables users to develop models
to assess and compare the present value of the future cash flows of different enterprises.
It also enhances the comparability of the reporting of operating performance by
different because it eliminates the effects of using different accounting treatments for
the same transactions and events.

CASH FLOW STATEMENT (2011-12)

TABLE NO: 4.1

2011- 2012- 2013- 2014- 2015-2016

PARTICULARS 2012 2013 2014 2015
OPENING BALANCES
Cash in Hand 35724 42959 50274 61738 768134
SOURCE OF CASH
Central Excise 2151 779 1295 1372 2417
Secured Loan 3363880 3406134 38428 42254 51374
CASHFROMOPERATION
Net Profit 247341 206964 40377 32741 29572
ADD: Increase in Sundry 495324
Creditors 3363458 3747384 383926 417342
Increase in Other Liabilities 300217 300466 249381 219635 195427
Less Increase in Inventories 7310787 7466168 155381 193472 259741
Increase in Sundry Debtors 2154425 2473039 318614 -49443 -42852
TOTALCASHAVAILABLE 16742259 17600934 19537842 559213 248942
APPLICATION OF CASH
Purchases of Fixed Assets 744630 749327 5437 4697 4267
Loans & Advance 162581 194320 26735 31739 42873
Income Tax 77494 84556 89534 90620 106543
CLOSING BALANCE
Cash in Hand 10375 13964 25984 32423 42673
TOTALAPPLICATION 725476
AVAILABLE 984705 102820 139854 559215

CASH FLOW STATEMENT (2012-13)

TABLE NO-4.2

2011- 2013- 2014- 2015-2016

PARTICULARS 2012 2012-2013 2014 2015
OPENING
BALANCES
Cash in Hand 9560 10456 11863 12423 15973
SOURCE OF
CASH
Income Tax 194320 206000 228521 265084 285484
Sale of Fixed 839652
Assets 726292 749327 783852 800353
CASH FROM
OPERATION
Net Profit 247341 261547 142060 138538 128643
ADD Increase in
Other Liabilities 300466 379275 78809 69524 63984
Decrease in
Inventories 7466168 5698609 1767559 1487536 1287452
LESS Decrease
in Sundry 923765
Creditors 3747384 2470569 1276815 1043686
Increase in
Sundry Debtors 2473039 2651776 1787379 405022 358732
TOTAL CASH
AVAILABLE 15155010 12417103 11873526 4431308 3587352
APPLICATION
OF CASH
Loans & 106358
Advance 194320 206000 237648 116800
Secured Loan 3406134 3135484 2976538 2706500 2363856
Unsecured Loan 1255000 1105000 1054875 150000 137680
Central Excise 779 5313 3753 4534 5846
CLOSING
BALANCE
Cash in Hand 2965 3070 5420 6266 7450
TOTAL
APPLICATION
AVAILABLE 4856233 4451797 4236870 4431300 4687345
CASH FLOW STATEMENT (2013-14)

TABLE NO: 4.3

2013- 2014- 2015-2016

PARTICULARS 2011-2012 2012-2013 2014 2015
OPENING
BALANCES
Cash in Hand 2965 3070 5420 6266 7450
SOURCE OF
CASH
Central Excise 5313 2596 2654 2717 6538
CASH FROM
OPERATION
Net Profit 261547 267548 59990 78349 80450
ADD Increase in
Sundry Creditors 2470569 3553092 1082523 936750 839765
Increase in Other
Liabilities 379275 530420 151145 149845 129845
Decrease in
Inventories 5698609 4378883 1319726 1298654 1198456
LESS Increase in
Sundry Debtors 2651776 4542399 1890623 668770 553870
TOTAL CASH
AVAILABLE 11467089 13274938 704768 677753 504689
APPLICATION
OF CASH
Purchases of
Fixed Assets 726292 991175 894506 264883 354780
Loans & 127456
Advance 206000 332424 328900 126424
Secured Loan 3135484 3088824 2956798 46660 439850
Unsecured Loan 1105000 900000 604500 205000 185670
Income Tax 81906 107401 94500 25495 24987
CLOSING
BALANCE
Cash in Hand 2965 3070 5420 6266 7450
TOTAL
APPLICATION
AVAILABLE 5254682 5419824 4587360 677753 567480
CASH FLOW STATEMENT (2014-15)

TABLE NO-4.4

PARTICULARS 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

OPENING
BALANCES
Cash in Hand 2965 3070 5420 6266 7450
SOURCE OF
CASH
Sale of Fixed
Assets 991175 792972 657839 198203 149790
Unsecured Loan 900000 1200000 1005000 300000 239000
CASH FROM
OPERATION
Net Profit 267546 309347 41801 32870 25478
ADD Increase in
Other Liabilities 530420 531981 15610 13876 12970
Decrease in 256790
Sundry Debtors 4542399 3652395 890004 358006
Decrease in
Inventories 4378883 3950640 428243 354870 244560
LESS Decrease
in Sundry
Creditors 3553092 3258702 294390 1067219 230980
TOTAL CASH
AVAILABLE 15163515 13696037 1187900 1574713 1325600
APPLICATION
OF CASH
Loan & Advance 332424 377608 254780 45184 34870
Unsecured Loan 3088824 15892601 1298760 1499564 1387690
Central Excise 2596 24695 34870 22099 21980
Income Tax 107401 108612 10450 12110 13650
CLOSING
BALANCE
Cash in Hand 5460 2578 4680 6655 7560
TOTAL
APPLICATION
AVAILABLE 3531245 16403516 1648790 1574713 1378690
CASH FLOW STATEMENT (2015-16)

TABLE NO-4.5

2011- 2012- 2013- 2014- 2015-

PARTICULARS 2012 2013 2014 2015 2016

OPENING
BALANCES

Cash in Hand 5460 2578 4680 6655 7560

SOURCE OF CASH
Central Excise 261547 267548 59990 78349 80450

Secured Loan 2470569 3553092 1082523 936750 839765

CASH FROM
OPERATION 379275 530420 151145 149845 129845

Net Profit 5698609 4378883 1319726 1298654 1198456

ADD Increase in Other

Liabilities 569870 531981 735107 203126 196780

Decrease in Sundry
Debtors 3725460 3652395 3596559 55836 45680

LESS Decrease in
Sundry Creditors 3256790 3258702 3250590 81120 75689

Increase in Inventories 347890 3950640 4018625 67985 286673

TOTAL CASH
AVAILABLE 1487650 13317020 13186992 1267800 658156

APPLICATION OF
CASH

Purchases of Fixed 804769

Assets 792972 944278 457890 151306

Loans & Advance 396750 377608 432320 459870 54712

Secured Loan 435700 1163089 1589260 1387690 426171

Income Tax 96780 108612 114142 128760 55300

CLOSING BALANCE

Cash in Hand 30450 28560 25870 23870 20437

TOTAL
APPLICATION
AVAILABLE 2835600 2442281 3080000 768900 658156

5.2 CASH BUDGETING:

A firm is well advised to hold adequate cash balance but should avoid excessive
balances. The firm has, therefore, to assess its need for cash properly. The cash budget
is probably the most important tool in cash management. It is device to help a firm to
plan and control the use of cash. It is a statement showing the estimated cash inflows
and cash outflows over the planning horizon. In the other words, the net cash position
of a firm as it moves from one budgeting sub period to another is highlighted by the
cash budget

TABLE NO 4.7

PARTICULARS 2011-12 2012-13 2013-14 2014-15 2015-16

aOPENING CASH
BALANCE 61738 12423 6266 9291 6655

1631543 1806471 1992924 2052023 2393808

b Receipts 7 0 4 2 2

1609340 1789247 1966463 2025314 2360810

c Payments 7 8 1 9 2

d NET CASH FLOW (b-

c) 222030 172232 264613 267083 329980

e Cumulative Net Cash

Flow 222030 394262 658875 925958 1255938

f (a+e) 283768 406685 665141 935249 1262593

g Minimum Cash Balance

Requirement 100000 100000 100000 100000 100000

SURPLUS RELATION
TO THE MINIMUM

CASHBALANCE
REQUIREMENT(F-G) 183768 306685 565141 835249 1162593

CHART NO 5.1
 CASH REQUIED
120000000
100000000
80000000
60000000
40000000
20000000
0

2011-12 2012-13 2013-14 2014-15 2015-16

INTERPRETATION:

In the above table it clearly determines the availability of the cash balance in the
subsequent year. It will clearly determine the minimum cash balance requirement of the
concern. In the 2015-16 leads to higher need of cash balance 11.62 lakhs. The cash
balance is highly required for the day- to day transaction.

5.3 RATIO ANALYSIS:

An analysis of financial statements based on ratios is known as ratio analysis. Ratio
analysis involves the process of computing determining and resenting the relationship
of items or group of items of financial statements. Ratio analysis is a widely used
tool of financial analysis. It can be used to compare the risk and return relationship of
firms of different sizes. It is defined as the systematic use of ratio to interpret the
financial statements so that the strengths and weaknesses of a firm as well as its
historical performance and current financial condition can be determined. The term
ratio refers to the numerical or quantitative relationship between two items.

5.3.1 NET WORKING CAPITAL:

Net working capital represents the excess of current assets over current liabilities. The
term current assets refers to assets which in the normal course of business get converted
into cash without dimunition in value over a short period ,usually not exceeding one
year or length of operation cycle whichever is more. The greater is the amount of net
working capital, the greater is the liquidity of the firm, accordingly net working capital
is a measure of liquidity, and inadequate working capital is the first sign of financial
problem for a firm.

FORMULA:

NET WORKING CAPITAL = CURRENT ASSETS-CURRENT LIABILITIES.

NET WORKING CAPITAL

TABLE NO-4.8

PARTICULARS 2011-12 2012-13 2013-14 2014-15 2015-16

CURENT ASSETS 99.51 83.56 89.30 76.09 76.35

CURRENT
LIABILITIES 40.47 28.49 40.83 37.90 39.85

NET WORKING
CAPITAL 59.03 55.06 48.47 38.19 36.49

CHART

NET WORKING CAPITAL

99.51
89.3
83.56
76.09 76.35
59.03 55.06
48.47
40.47 40.83 37.938.19 39.8536.49
28.49

2011-12 2012-13 2013-14 2014-15 2015-16

CURENT ASSETS CURRENT LIABILITIES NET WORKING CAPITAL

Interpretation:

This ratio indicates there is lower amount required in the working capital. The higher
amount is in the year 2011-12 at 59.03. It will clearly determine the firm is in liquidly
position but this is reducing gradually. The financial manager should concentrated more
on the working capital as it is not satisfactory.
4.3.2 CURRENT RATIO:

The current ratio is the ratio of total current assets to total current liabilities. Its
calculated by divided current assets by current liabilities.

The current assets of a firm, as already stated, represent that asset which can be, in the
ordinary course of business, converted into cash within a short period of time normally
not exceeding one year.

FORMULA:

CURRENT RATIO = CURRENT ASSETS

CURRENT LIABILITIES

CURRENT RATIO

TABLE NO-4.9

2012- 2013- 2014- 2015-

PARTICULARS 2011-12 13 14 15 16

CURRENT ASSETS 99.51 83.56 89.30 76.09 76.35

CURRENT
LIABILITIES 40.47 28.49 40.83 37.90 39.85

CURRENT RATIO 2.45 2.93 2.18 2.00 1.9

CHART
160
140
120
100
80
60 Current ratio

40 Current liabilities
Current assets
20
0
2011-12 2012-13 2013-14 2014-15 2015-16

Interpretation:

The company is highly efficient is short term solvency position. The company should
maintain this current ratio. The concern should concentrate on 2015-16 year current
ratio position.
4.3.3 QUICK TEST RATIO:

The quick test ratio is the ratio between quick current ratio and current liabilities and is
calculated by dividing the quick assets by the current liabilities.

The term quick assets refers to current assets which can be converted into cash
immediately or at a short notice without diminution of value.

FORMULA:

QUICK TEST RATIO = QUICK ASSETS

QUICK LIABILITIES

QUICK TEST RATIO

TABLE NO-4.10

2011- 2012- 2013- 2014-

PARTICULARS 12 13 14 15 2015-16

QUICK
ASSETS 24.85 26.58 45.51 36.59 36.16

QUICK
LIABILTIES 40.47 29.00 40.83 37.90 39.85

ACID TEST
RATIO 0.61 0.93 1.11 0.96

0.90
CHART

2011-12
2015-16

2012-13

2014-15

2013-14

Interpretation:

The liquidity position is not near to the standard ratio. The concern should clearly
determine the various liquidity position of the concern.
4.3.4 INVENTORY TURNOVER RATIO:

It is computed by divided the cost of good sold by the average inventory thus, the cost
of good sold means sales minus gross profit. The average inventory refers to the simple
average of the opening and closing inventory. The ratio indicated how fast inventory is
sold.

FORMULA:

INVENTORY TURNOVER RATIO= COST OF GOOD SOLD

AVERAGE INVENTORY

INVENTORY TURNOVER RATIO

TABLE NO-4.11

2012- 2013- 2014- 2015-

PARTICULARS 2011-12 13 14 15 16

INVENTORY
TURNOVER RATIO 1.16 1.59 2.36 2.81 3.37

COST OF GOOD SOLD 86.04 105.07 118.9 117.05 134.1

AVERAGE INVENTORY 74.00 65.82 50.38 41.65 39.84

CHART

140

120

100

80

60

40

20

0
2011- 2012- 2013- 2014- 2015-
12 13 14 15 16
Inventory TurnOver ratio Cost of good sold Average Inventory

Interpretation:

The inventory turnover is increasing gradually to the period of the year. It will clearly
determine the capacity of the concern
4.3.5 DEBTORS TURNOVER RATIO:

It is determine by dividing the net credit sales by average debtors outstanding during
the year. Thus, net credit sales consist of gross credit sales minus returns, if any, from
customers average debtors is the simple average of debtors (including bills
receivables) at the beginning and at the end of the year.

FORMULA:

DEBTORS TURNOVER RATIO= NET CREDIT SALES

AVERAGE DEBTORS

DEBTORS TURNOVER RATION:

TABLE NO-4.12

2012- 2013- 2014- 2015-

PARTICULARS 2011-12 13 14 15 16

CREDIT SALES 159.8 157.8 155.8 172.62 206.45

AVERAGE
DEBTORS 23.13 25.62 35.97 40.97 36.24

DEBTORS
TURNOVER RATIO 6.90 6.16 4.33 4.21 5.69
CHART

100%
90%
80%
70%
60%
50%
40% Debtors turn over
30% ratio
20% Average debtors
10%
0%
2011-12 2012-13 2013-14 2014-15 2015-16

Interpretation:

The debtors turnover ratio is not in the concert way in the concern. The higher ratio is
in the year 2011-12 is 6.90. The past performance is clearly determining the various
formation of the concern.

4.3.6 CREDITORS TURNOVER RATIO:

It is a ratio between net credit purchase and the average amount of creditors outstanding
during the year. A low turnover ratio reflects liberal credit terms granted by suppliers,
while a high ratio shows that account are to be settled rapidly. The creditors turnover
ratio is an important tool of analysis as a firm can reduce its requirement of current
assets by relying on suppliers credit.

FORMULA:

CREDITORS TURNOVER RATIO= NET CREDIT PURCHASES

AVERAGE CREDITORS

CREDITORS TURNOVER RATIO

TABLE NO-4.13

2011- 2012- 2013- 2014- 2015-

PARTICULARS 12 13 14 15 16

CREDIT PURCHASE 86.0 105.07 118.91 117.05 134.16

AVERAGES
CREDITORS 35.55 31.08 30.11 34.05 32.54

CREDITORS
TURNOVER RATIO 2.42 3.38 3.94 3.43 4.12
CHART

2015-16 2011-12
24% 15%
2012-13 2011-12
19%
2014-15 2012-13
21% 2013-14 2013-14
21%
2014-15
2015-16

Interpretation:

The creditors availability of the concern keeps on decrease in the year. It will clearly
determine in the year 2011-12 2.42.

CHAPTER-V
 FINDINGS

1. The net working capital of the organization is not satisfactory.

2. The current ratio for the four year it is as per the standard norms (2:1) concept for
the year 2015-16 which is 1.9:1. On an average current ratio is formed to be
satisfactory.
3. Quick ratio of the company is not satisfactory as it is not up to the standard
norms Debtor turnover ratio is decline indicates it is not satisfactory.
4. Creditors turnover ratio showing increasing ratio indicates that the company is
enjoying. Its credit facilities to the possible amount.
5. In the year 2015-16 is leads to higher requirement of cash balance 11.62 lakhs.
6. Cash reflects the liquidity position of the concern is reduced in the year 2015-16
0.06 lakhs decreasing cash position indicated that the company is not managing its cash
position satisfactorily.
7. Inventory turnover ratio is found to be not satisfactory as it is maintain low
inventory.
SUGGESTION

The various suggestions are followed after analyzing the main finding of this study.

The cash management of the company is failed to strengthen the cash position so
the company so required to table steps to improve the cash position by concentrating on
receivables, inventories avoiding to much on borrowings.
The company failed to manage the receivable in the normal level because of poor
performance of the collection procedure and inefficient performance related with
managing the receivables.
The inventories play a major role in production. So, the concern should take
measure to maintain the inventories that are required to in order reduce the e cost, and
keep the production flow continuously.
In 2014-15 the net profit is increased compare to the other four year. So the
concern should maintain the same position to improve the net profit.
The cash and bank balance indicate high liquidity position of a company, SIVA
PUMPS INDIA PVT LTDto maintain cash including bank balance is at a optimum
level and it is enough to meet day to day requirement.
CONCLUSION

Analysis and Interpretation of the financial data of Sri SIVA PUMPS INDIA PVT
LTD, ascertain the cash position of the firm. The results explores that the firm is unable
to meet its short term obligations.The concern should reduced the long term loan and
obtain the profit.The concern should take various measures to increase the net profit.
BIBLIOGRAPHY

BOOKS

Khan M.Y and P.K. Jani,Financial Management, New Delhi, Tata Mc Graw Hill,
1992.

Dr.S.N. Maheshwari, Principles of Management Accounting.

Prasanna Chandra, Financial Management Theory and Practice

REFERENCES

Bhutto, N. A., Abbas, G., Rehman, M., & Shah, S. M. M (2011). Relationship of
cash conversion cycle with firm size, working capital approaches and firms
profitability: A case of Pakistani industries. Pakistani Journal of Engineering
Technological Sciences 1(2), 45-64
Ebben, J. J., & Johnson, A. C. (2011). Cash conversion cycle management in
small firms:
Relationships with liquidity, invested capital, and firm performance. Journal of
Small Business and Entrepreneurship, 24(3): 381-396.
Eljelly, A. M. A. (2004). Liquidity-profitability tradeoff: An empirical
investigation in an emerging market. International Journal of Commerce &
Management, 14(2), 48-61.
Falope, O. I., &Ajilore, O. T. (2009). Working capital management and corporate
profitability:
Evidence from panel data analysis of selected quoted companies in Nigeria.
Research Journal of Business Management, 3, 73-84.
Hutchison, P. D., Farris II, M. T., & Anders, S. B. (2007). Cash-to-cash analysis
and management. The CPA Journal, 77(8), 42-47.
 Nyabwanga, R. N., Ojera, P., Lumumba, M., Alphonce, J. O., &Otieno, S.
(2011). Effect of working capital management practices on financial
performance: A study of small scale enterprises in Kisii South District, Kenya.
African Journal of Business Management, 6(18), 5807-5817
Olowe, A. (2008). Financial management: Concepts, financial system and
business finance. Lagos: Brierly Jones Nigeria Limited.

WEBSITE

www.google.com

www.sivapumbs.com

ANNEXURES
BALANCE SHEET IN SIVA PUMPS INDIA PVT LTD
PARTICULARS 2015-16 2014-15 2013-14 2012-13 2011-12

SOURCES OF
FUNDS
SHRI GANESH 52.25 52.25 52.25 52.25 52.25
JI
SHRI LAXMI JI 51.00 51.00 51.00 51.00 51.00

SHARE 19901000. 19901000. 19901000. 19901000. 19901000.

CAPITAL 00 00 00 00 00

RESERVE AND 345519604 29625127. 15253853. 21829192. 20785949.

SURPLUS .82 98 53 29 94

LOAN FUNDS
SECURED 72686105. 88539002. 94535519. 55323395. 54399581.
LOANS 58 13 74 23 72
DEFERED TAX 3383097.0 3449412.0 3080483.0 662332.00 ---------
LIABILITY 0 0 0
UNSECURED 43486673. 46947616. 28872233. 15703501. 14408414.
LOANS 00 00 00 00 70
TOTAL 173976583 188462261 171643192 113419523 109495049
.65 .36 .52 .77 .61
APPLICATION
OF FUNDS
FIXED ASSETS
A: GROSS 178453951 172240571 164888412 126570061 123370584
BLOCK .93 .18 .68 .76 .96
B: less 101561424 90540217. 78663170. 71729938. 64380715.
DEPRICIATION .62 62 62 62 62
C: NET BLOCK 76892527. 81700353. 86225242. 54840123. 58989869.
31 56 06 14 34
D:CURRENT
ASSETS
INVENTORY 43767644. 67853213. 41177224. 21642098. 26940120.
00 00 00 00 00
SUNDRY 37497882. 27508864. 24338099. 30359548. 26994647.
DEBTORS 00 00 04 69 57
CASH IN HAND 6891449.2 3665403.6 2297697.8 3407307.3 6617777.1
& BANK 9 0 8 2 9
LOANS AND 27455698. 42907011. 32127724. 16926496. 11619189.
ADVANCES 27 40 16 21 30
E:CURRENT
LIABILITIES
SUNDRY 12735248. 29094178. 9759461.8 11585162. 19863619.
CREDITORS 22 20 4 05 97
ADVANCE 822054.00 2539050.0 100000.00 100000.00 --------------
FROM 0
CUSTOMERS/D
LRS
PROVISIONS 4971315.0 3539356.0 2483662.9 2072970.0 1812808.7
0 0 0 4 2
(D-E)NET 97084056. 106761907 85417950. 58577318. 50495305.
CURRENT 34 .80 46 13 37
ASSETS
MISCELLANEO --------- --------- -------- 2082.50 9874.90
US EXPENSES
TOTAL 173976583 188462261 171643192 113419523 10945049.
.65 .36 .52 .77 61