MS-100 SYNOPSIS OF THE PROJECT PROPOSAL

TITLE: A DETAILED STUDY & ANALYSIS ON WORKING CAPITAL MANAGEMENT FOR M/S KIA MOTORS LLC, MUSCAT, SULTANATE OF OMAN

1. RATIONALE OF THE STUDY:

1.1 Working capital managementWorking capital management is concerned with problems arising while managing current assets, current liabilities and the inter relationship that exist between them.The term current assets refers to those assets which in ordinary course of business can beturned in to cash within one year without undergoing a diminution in their value and without disrupting the operation of the firm. The major current assets are cash, marketable securities, account receivable and inventory. Current liabilities are those liabilities which are intended at their inception to be paid in ordinary course of business, within a year, out of the current assets or earnings of the concern. The basic current liabilities are account payable, bill payable, bank over-draft, and outstanding expenses.

The goal of working capital management is to manage the firm’s current assets and current liabilities in such way that the satisfactory level of working capital is mentioned. The current assets should be large enough to cover its current liabilities in order to ensure a reasonable margin of the safety.

1.2 Working capital cycle

“Working capital cycle implies the continuing flow from cash to suppliers, suppliers to inventories, further to accounts receivables and back to cash”. Thus working capital cycle involves the following steps:

-Conversion of cash to finished goods i.e. Vehicles, Spare Parts & Service

-Finished goods to accounts receivables

-Accounts receivables to Cash

Fig-1.WORKING CAPITAL CYCLE

1.3 Gross working capital and Net working capital

Gross working capital refers to the firm’s investment in current assets. Current assets are the assets which can be convert in to cash within year includes cash, short term securities, debtors, bills receivable and inventory.Net working capital refers to the excess of current assets over current liabilities. Net working capital could be positive or negative. Efficient working capital management requires that the firm should operate with some amount of net working capital depending upon several factors such as nature of the business, production cycle etc. Net working capital plays a crucial role because cash outflows and inflows do not coincide, also its very difficult to predict cash inflows, although cash outflows are predictable. “The more predictable the cash inflows are, the less net working capital is required”

1.4 Types of working capital

1. Permanent working capital To carry on a business in an efficient manner, certain level of working capital is necessary on a continuous and uninterrupted basis which is termed as permanent working capital. This need arises due to the operating cycle. i.e., to bridge the gap between the operating cycles, permanent working capital is very necessary

2. Temporary working capitalAny amount over and above permanent working capital is termed as temporary or variable or fluctuating working capital. This portion of the working capital is required to meet the fluctuating demand arising out of change in production, sales or seasonal fluctuations etc

Cash

Finished goods-Vehicles,Parts &

Service

Accounts receivables

Fig 2 - Permanent and temporary working capital

1.5 Determinants of working capital

1. Nature of the business2. Production cycle3. Business cycle4. Production policy5. Credit policy6. Growth and expansion7. Availability of raw materials8. Profit level9. Level of taxes and government policies10. Dividend policy11. Depreciation policy12. Price level changes13. Operational efficiency

2. Objectives of the study

Study of the working capital management is very important. Unless the working capital is planned, managed and monitored effectively, company cannot earn profits and increase its turnover, Also it helps in removing bottlenecks, With this primary objective of the study. Other main objectives include:

-To examine the effectiveness of working capital management polices with the help of accounting ratio

-To ascertain the optimal level of Permanent and temporary working capital required for the company to ensure profitability

-To study liquidity position of the company by taking various measurements.

-To compare and analyze various components of working capital management such as Accounts receivables, accounts payables, inventory position, credit management, etc

-To make suggestions for policy makers for effective management of working capital.

-To study the Operating and cash cycle of the company

3. Research Design

6.1 Sources of data

Primary data – primary data is collected directly from the original sources. It includes collecting data through study & observation, interviews, mailing, experimentation, simulation and projection methods

Secondary data: secondary data are not originally collected but rather obtained from published or unpublished sources such as journals, magazines, news papers, internet etc

6.2 Data collection

-Primary data is collected by interviewing the HOD’s/SR.EXECUTIVE of various departments and concerned staffs of the finance department, also through observation

-Secondary data is collected from various reports / annual reports, documents charts, management information systems, published articles etc. Mainly the secondary data is collected from the 2 years annual report of the company supported by the reports of the competitors to enable comparison

The analysis of the information gathered has been made on the basis of the clarifications sought during the personal discussions with the concerned people and observations during the personal visits to the important areas o services.

6.3 Research methodology

Research methodology is a systematic and logical study of an issue or problem through scientific method. It’s the process of systematically obtaining accurate answers to significant pertinent questions by the use of scientific method gathering and interpreting information.

Data such as Current assets, liabilities, debtors, creditors, cash balance, inventories etc are collected in the form of “samples” which is the first step in the scientific research. Further, data is analyzed through various statistical tools to effectively solve the problems in the area of working capital management

4. Limitations of the study Following limitations were encountered while preparing this project:- Limited data – only published data - Limited boundary- Limited time frame – short duration of time is provided and thus the study may not be retailed, fully fledged in all the aspects- Financial accounting does not take into account the entire business scenario.

VANDANA BALKRISHNA SALIANPO.BOX. 3168, PC-112, RUWI, POSTAL CODE 112

SULTANATE OF OMANE.MAIL:

I HEREBY DECLARE THAT THE PROJECT REPORT “A DETAILED & ANALYSIS ON WORKING CAPITAL MANAGMENT FOR KIA MOTORS LLC “ SUBMITTED BY ME FOR OBTAINING THE MBA DEGREE IN FINANCIAL MANAGEMENT,IS A RECORD OF RESEARCH DOEN BY ME DURING THE YEAR 2010-11 AND THIS REPORT HAS NOT FORMED THE BASIS FOR THE AWARD OF ANY DEGREE ,DIPLOMA,ASSOCIATESHIP,FELLOWSHIP OR ANY SUCH SIMILAR TITLE TO THE UNDERSIGNED.

ALSO IT IS DECLARED THAT THIS WORK REPRESENTS AN INDEPEDENT WORK DOEN BY THE UNDERSIGNED.

VANDANA BALKRISHNA SALIAN DILIP KUMAR BEHERA(ENROLMENT NO.0890120834) (SUPERVISOR)15TH FEBRUARY ,2011MUSCAT,SULTANATE OF OMAN

DILIP KUMAR BEHERAPO.BOX.129, PC-114

SULTANATE OF OMANE.MAIL : SULU29@REDIFFMAIL.COM

CERTIFICATE

THIS IS TO CERTIFY THAT THE PROJECT REPORT “A DETAILED STUDY & ANALYSIS ON WORKING CAPITAL MANAGEMENT FOR M/S KIA MOTORS LLC” SUBMITTED BY MRS.VANDANA BALKRISHNA SALIAN FOR THE AWARD OF M,B,A DEGREE IN FINANCIAL MANAGEMENT IS A RECORD OF RESEARCH WORK DONE BY HER DURING THE 2010-11 AND THIS REPORT HAS NOT FORMED THE BASIS FOR THE AWARD TO THE CANDIDATE OF ANY DEGREE,DIPLOMA,ASSOCIATESHIP,FELLOWSHIP OR SIMILAR TITLE.

ALSO, CERTIFIED THAT THIS WORK REPRESENTS INDEPENDENT WORK ON THE PART OF THE CANDIDATE.

DILIP KUMAR BEHERA15TH FEBRUARY,2011-02-18MUSCAT,SULTANATE OF OMAN.

ACKNOWLEDGEMENT

I EARNESTLY THANK THE INDIRA GANDHI NATIONAL OPEN UNIVERSITY FOR PROVIDING ME AN OPPORTUNITY TO DO THE PROJECT WORK IN CONNECTION WITH THE MBA PROGRAMME.

I AM SINCERELY VERY THANKFUL TO MR. DILIP KUMAR BEHERA, SR.EXECUTIVE-FINANCE & OTHER CONCERNED SENIOR STAFF IN FINANCE & ACCOUNTS OF M/S SAUD BAHWAN GROUP, MUSCAT, FOR PROVIDING TIMELY SUPPORT AND GUIDANCE AT VARIOUS STAGES DURING THE COURSE OF THIS PROJECT WORK.

I ALSO THANK MY HUSBAND FOR THIER SINCERE SUPPORT AND ENCOURGEMENT PROVIDED DURING THE COURSE OF THE MBA PROGRAMME AND DURING THE PREPARATION OF THIS PROJECT REPORT.

VANDANA BALKRISHNA SALIANMUSCAT15TH FEBRUARY,2011

Curriculum VitaeDilip Kumar Behera

MuscatOman.

GSM: 00968-95528608. Tel.No. 00968-24487187, 24578545

Keen to learn through observation as well as execute & accomplish my duties & responsibility

assigned me with sincerity and integrity in a company where my abilities resourcefulness will

contribute towards accomplishment of company goal and continually improve my competency.

Educational Qualification:

M.Com (Master in Commerce) 2 years regular course from India (1994) Pursuing CMA (Certified Management Accountant)

Computer Skills:

Tally Graduate for Accounting Package – (up to version Tally-7.2) IBM-I series –AS400 Financial System. SAP-DBM (Dealer Business Management) SAP-R/3(ERP) Modules FI/CO.(60 days Training Course ) Oracle-Auto Deal-Ford India Ltd MS Office (Excel, Word etc)

Other Skill:

Written English: Efficiently capable in making correspondences with Financial institutions, Govt and Non-govt agencies, customers etc..

Total Experience:

15 years experience in Accounts, Finance & Audit with Automobile, Paints, Service, and

Construction & Electronics Industries.

Work Experience (Abroad): 5 years (Muscat & Nairobi).

Summary Works Experience:

MIS: - Preparation, review & analysis of various MIS Reports( Monthly, weekly & daily basis ) in

areas like Cash flow & Fund flow Statement, Budget & Budget Variance report, profitability

Statement, financial appraisals, Accounts Receivable & Payable Management, Inventory

management as & when required by the management in order to implement and evaluate

various key policy matters of the organization.

Accounts: - Co-coordinating & Monitoring assignments of subordinates relating to day-to-day

works like Invoicing, Posting entries, Preparation of various statutory and general reports,

banking transactions, Scrutiny of Trial Balance, bank reconciliation, Monitoring Branch MIS,

passing of vouchers, Bills etc.

Finance audit- Carry out and execution of audit plans,schedule.review and analysis of

expenditure, cost saving suggestions, clearance of approval, review and analysis of bank ledger,

cash reconciliation, bank reconciliation and various clearing accounts. Clearance of local and

foreign payments. Submission of monthly reports to managements in areas like expenditure

with cost saving suggestion, assurance of internal controls, cash areas etc. Review of forex

transactions, clearing LC payments etc.

Taxation (Income Tax): -Preparation & submission of yearly /quarterly TDS return, Annual

Income tax Return, Computation of Income (Provision for Taxation (MAT), Deferred Tax Liability,

Depreciation chart both companies & Income tax Act) Compilation of books of account for

proceedings, assessment, appeal in income tax scrutiny cases (with legal advisor), Preparation &

Coordinating with auditor for preparation of Tax Audit Report, Notes to Accounts, Abstracts and

other relevant cases.

Finalization of Books of Accounts: - Preparation of financial statement (Balance Sheet, Profit &

Loss a/c, Provisions, Depreciation Chart, Annexure, Notes to Accounts, Computation of Income,

Etc) and its all-relevant matters independently.

Sales Tax: -Preparation & submission of Monthly/Quarterly/Annual sales tax/VAT returns.

Compilation of books of accounts for assessment, appeal and other relevant cases. Liasoning

with sales authorities for issuing various statutory forms and other relevant matters.

Banking: -Monitoring day-to-day banking activities like documentation for issuing Bank

Guarantees (Inward & Outward), foreign remittances, documentation for opening FLC’s etc.

Preparation of various reports related to FLC, Bank Guarantee, Foreign remittances, preparation

of bills of exchanges, making payments to vendors etc. Preparation of CMA Data, SOD (Selective

Operational Data), Monthly stock statement, Monthly working capital analysis, & liasoning and

making correspondences with bankers and financial institution in context of review and

enhancement of working capital proposal, Project Finance, sanction of term loan, etc and

various other financial matters.

Excise, PF etc: - Preparation & Submission of monthly and annual PF return. Preparation of

monthly payroll. Submission of various forms with PF authorities in context of withdrawal

Resignation & admission of employees and other related issues.

Preparation & submission of monthly Excise & Service Tax Return.

Details of Works Experience:

(Present Employment): -

Name of the Organization – SAUD BAHWAN GROUP LLC

Brief History of the Organization – The organization is the sole Automobile Distributor in Oman

for the prestigious brand of vehicles i.e Toyota, Lexus, Ford, Kia, Hino & Man. The company is

having a turnover of USD. 4 billions in the F.Y 2008-09.

Designation - Sr. Executive-Internal Audit (Finance)

Period of Working – Since 1st April, 2007 onwards.

Duties & Responsibilities – Review, analysis & verification of various payments, vouchers &

clearing payments in pre-audit and post-audit concept. Review & Clearing Chairman Approvals

related to various recurring and non-recurring expenditures. Review and preparation of various

reports like cash & Bank reconciliation, scrutiny of general ledger, Bank Guarantees,

Comparative analysis of various revenue expenditure etc. Submission of reports in areas like

cash reconciliation, payments, cost saving suggestion, scrutiny of GL accounts etc.Review of

financial systems in respect of assurance of internal controls are in force to mitigate financial

risk and effectiveness of risk management .Clearing and review of Forex transactions and LC

payments. Making correspondence with internal departments on day to observations in respect

of audit finding on duplication, errors cost saving suggestions etc.

Salary Drawn – OMR. 1000/- (CTC) equivalent to USD. 2500/-

(Previous Employment):-

Name of the Organization- GOYAL MG GASES PVT.LTD.

Brief History of Organization- The organization was established in Oct 1973 as the manufacturer

of Industrial Gases (Oxygen, Nitrogen, Hydrogen, Helium etc) and presently the company is

having its plants located in various part of the country namely Ghaziabad, Durgapur, Raipur,

Indore, Asansol, Trichy, Madras, Bangalore and the company’s sales turnover was 225 Crores at

the end of the financial year 2005-06.

Designation- Asst. Manager-Finance.

Period of Working-Since Feb-2006 onwards.

Duties & Responsibilities- Looking after Project Finance & Direct Taxation Matter( TDS,

Computation of Income, Income Tax Return and all its relevant matters, compilation of books of

accounts for attending Income Scrutiny cases, etc), Finalization of Account, Finance (Banking

Part), Monitoring and auditing Branch MIS, Preparation of budget& variance Report, cash flow &

fund flow analysis . Handling all accounting maters independently from Books keeping to

finalization of accounts. Monitoring day-to-day activities related to banking, accounts, taxations

etc.

Salary Drawn-(Gross ) - Rs. 28,500/- (P.M)

Name of the Organization :- DuPont Colors Pvt Ltd

Brief History of Organization- The organization was established in Oct 1992 as the sole

distributor of E.I.Dupont Numerous co Inc, USA for North India for the distribution and

marketing of its automotive refinish paint products. It is a trading Unit. It is an ISO 9000

company and the company’s sales turnover was 40 crores at the end of the financial year 2004-

05 .It has 6 branches located in North India at UP, Rajasthan, Haryana & Punjab.

Designation- Deputy Manager-Finance & Accounts

Period of Working-Since Nov-2002 to 31/01/2006.

Duties & Responsibilities- Monitoring and assigning tasks of subordinates for smooth

functioning all accounting systems. Preparation of Daily & Monthly MIS report s as and when

required by the management. Liasoning with financial institutions and Govt bodies like Sales

Tax, Income tax, PF & Excise Authorities regarding returns, assessment, issuance of forms etc.

Handling all accounting maters independently from Books keeping to finalization of accounts.

Key Responsibilities :- Finalization of books of accounts, Sales Tax(return and

assessments),Income tax(return and case study with lawyer),Banking-Funds planning ,CMA,

Monthly working capital report, liasoning, correspondences, etc

Salary Drawn-(Gross ) - Rs. 22,480/- (P.M)

Name of the Organization- NPL MOTORS PVT.LTD

Brief History of Organization-Indus Ford Pvt.Ltd is the authorized dealer of Ford India Ltd for

NCR Territory. It is a trading Unit. During the financial year 2001-02 its sales turnover was Rs.

220 crores.

Designation- Asst. Accounts Officer.

Period of Working-Since May-2000 to Oct-2002.

Duties & Responsibilities-Independently handling works shop unit and directly reporting to

CMD and MD. Monitoring and assigning tasks of subordinates. Preparations of various MIS on

daily, weekly and monthly basis as and when required by the management. Handling all taxation

matter including returns and assessment. Coordinating and liasoning with all statutory bodies

and govt & non-govt agencies in all respect.

Salary Drawn-(Gross ) - Rs. 15,500/- (P.M)

Name of the Organization- CONTINENTAL CONSTRUCTION LTD

Brief History of Organization-It is a group company dealt with multi dimensional functions like

construction, paper mill, shipping, manufacturing float glass etc.

Designation- Accountant.

Period of Working-Since Dec-1994 to April-2000.

Duties & Responsibilities-Handling day to day accounts related to bank reconciliation,

preparation of sales tax return, TDS return, handling day to day cash, posting of entries,

preparation of debtors and creditors aging report etc.

Salary Drawn- (Gross) - Rs. 8000/- (P.M)

Self-Appraisal:

Positive attitude, adventures, self-confidence and enjoys working in a team.

Is known for affectively completing the given responsibility in record time.

Personal Information:

Father’s Name : Sh. Nrusingha Chandra Behera

Date of Birth : 25-02-1972.

Permanent Add. : 129-c, 1st Floor

Sahapur Jat

Asiad Village

New Delhi-49

Hobbies : Reading, playing cricket and volleyball, listing music.

Languages Known : English ,Hindi, Bengali & Oriya (both read & write, speak)

Marital Status : Married

Passport No : E8268115 (Validity-2014)

Driving License : Holding GCC (Omani) Driving license

E-mail : Sulu29@rediffmail.com

Date: - 02/05/2010.

Place: - Muscat.

(Dilip Kumar Behera)