Vaibhav Final Project[1]
-
Upload
sandeeprathod350 -
Category
Documents
-
view
217 -
download
0
Transcript of Vaibhav Final Project[1]
-
8/6/2019 Vaibhav Final Project[1]
1/47
1 | P a g e
1. INTRODUCTION
This chapter cover s with the introduct ion to Work ing cap ital
manageme nt, mea nin g, importa nce, scope of study, l iterature rev iew,
object ives of study, met hodology adopted, a nd Prof ile of t he compa ny.
1.1 . INTRODUCTION
Th e term work ing Cap ital refer s to t he amou nt of cap ital w hich is
read ily ava ilable to t he orga nization for its day-today operat ion. Th e work in g
cap ital is differe nce betwee n resource s in cash or ea sily co nvert i ble to ca sh
(Curre nt a sset) a nd orga niz ational comm itme nt for w hich cash will soon be
requ ired (curre nt l iab ilities).
Work ing cap ital in business is just like blood in the huma n body.Work ing cap ital play s same role in the fu nctionin g of a n orga nization. L ike
heart, get s blood a nd c irculate same in the huma n body, in work ing cap ital;
funds are ge nerated a nd c irculated in the bu sin ess. Opt imum a nd approx imate
moveme nt of Work ing cap ital is extremely nece ssary to co ntinue bu siness. A s
and w hen this circulat ion stop s, it become s lifele ss and t hen it ca n hardy
pro s per a nd surv ive. It is becau se t his rea son the work ing cap ital is k nows as
C irculat ion Cap ital, a s it circulate in the bu siness like blood in the huma n
body.
-
8/6/2019 Vaibhav Final Project[1]
2/47
2 | P a g e
1.1.1. What It Is:
Work i g cap ital i money ava ilable to a compa ny f or day- to-day
o per ations.
The f or mula f or work ing cap ital is: Curr ent Assets - Curr ent
Liabilities
How It Works/Example:
Her e is some ba lance sheet inf or mation about XYZ Compa ny:
Cash Rs.600000 Account Payable Rs.300000
MarketableSecurities
R s.100000 Acc r ued Expe nses R s.200000
Account Receivable R s.400000 Notes Payab le R s.50000
Inventory R s.500000 Curr ent Por tion Long-
Te r m Deb t R s.100000
T otal Current Asset R s.1600000 Total Curr ent Liabilities R s.650000
Using the w ork ing cap ital f or mula a nd the inf or mation above, we ca n
calculate that XYZ Compa ny's work ing cap ital is: R s.160 ,0000 - R s.65 ,0000 =
R s.95 ,0000
1.1. 2. Why It Matters:
Work ing cap ital is a comm on mea sur e of a c ompa ny's liquidity,eff iciency, a nd over all hea lth. Becau se it include s cash, inventor y, acc ounts
r eceivable, acc ounts payab le, the p or tion of deb t due w ithin one yea r , and
other shor t-ter m acc ounts, a c ompa ny's work ing cap ital r ef lects the r esults of a
host of compa ny ac tivities, including inventor y ma nageme nt, deb t
ma nageme nt, r evenue c ollection, and payme nts to suppliers.
-
8/6/2019 Vaibhav Final Project[1]
3/47
3 | P a g e
Positive w ork ing cap ital gener ally indicates that a compa ny is able to
pay off its shor t-ter m liab ilities almost immed iately. Nega tive w ork ing cap ital
gener ally indicates a compa ny is unable to do so. Th is is why a nalysts ar e
sensitive to decr eases in work ing cap ital; they sugge st a c ompa ny is bec omingover lever aged, is str uggling to maintain or grow sales, is pay ing bills too
quick ly, or is collecting r ece ivab les too slowly. Incr eases in work ing cap ital,
on the other hand, sugge st the o ppos ite. The r e a r e sever al way s to eva luate a
compa ny's work ing cap ital fur ther , including ca lculating the inventor y-
turno ver r atio, the r eceivab les r atio, day s payab le, the cu rr ent r atio, and the
quick r atio. One of the m ost signif icant uses of w ork ing cap ital is inventor y.
The longer inventor y sits on the shelf or in the wa r ehouse, the longer the
compa ny's work ing cap ital is tied up .
When not managed ca r efully, bu sinesses can grow them selves out of
cash by need ing m or e w ork ing cap ital to fulf ill expa nsion plans than they ca n
gener ate in their curr ent state. Th is usually occu rs whe n a compa ny ha s used
cash to pay f or ever ything, r ather than seek ing f inancing that would smooth
out the payme nts and ma k e ca sh ava ilable f or other uses. As a r esult, w ork ing
cap ital shor tage s cau se ma ny bu siness es to fail eve n though they may ac tua lly
turn a prof it. The m ost eff icient compa nies invest exce ss work ing cap ital wisely to avoid these situations.
Analysts comm only p oint out that the leve l and timing of a c ompa ny's
cash f lows ar e wha t r eally de ter mine whe ther a compa ny is able to pay its
liab ilities whe n due . The w ork ing-cap ital f or mula assume s that a compa ny
r eally w ould liquidate its curr ent assets to pay cu rr ent liab ilities, wh ich is not
alway s r ealistic cons ider ing some ca sh is alway s needed to mee t pay roll
o bligations and ma intain o per ations. Fur ther , the w ork ing-cap ital f or mula
assume s that acc ounts r ece ivab le a r e r ead ily ava ilab le f or collection, wh ichmay not be the ca se f or ma ny compa nies.
It is also impor tant to understand that the timing of asset pur cha ses,
payme nt and c ollection policies, the lik elihood that a compa ny will wr ite off
some pa st-due r ece ivab les, and eve n cap ital-r aising eff or ts can gener ate
diffe r ent work ing cap ital need s f or similar compa nies. Equally impor tant is
-
8/6/2019 Vaibhav Final Project[1]
4/47
4 | P a g e
that work ing cap ital need s var y f rom industr y to industr y, e s pec ially
cons ider ing how d iffe r ent industr ies depe nd on expe nsive e qui pme nt, use
diffe r ent r eve nue acc ounting me thods, and app roach other industr y-s pec if ic
matters. Finding way s to smooth out cash payme nts in or der to k eep w ork ingcap ital stable is par ticular ly d iff icult f or manufac tur ers and other compa nies
that r equir e a lot of up-f ron t costs. For these r easons , compa r ison of w ork ing
cap ital is gener ally m ost mea ningful am ong compa nies within the same
industr y, a nd the def inition of a "h igh" or "low" r atio should be made w ithin
this context.
1.2. Importance of Working Capital Management
Work ing Capital manageme nt is ver y impor tant in modern business. Business men should be ab le to guide the accu r ate r equir eme nt of w ork ing
cap ital and should be quick enough to r aise the r equir ed fu nds to f inance the
work ing cap ital need s.
Work ing Capital is also called a s net curr ent assets. All or gani ation
should ca rr y the ma nageme nt of w ork ing capital in one f or m or the other.
Eff icient work ing cap ital manageme nt is impor tant f rom the liquidity a s well
as prof itability p oint of v iew. Poor manageme nt of w ork ing cap ital mea ns that
the fu nd a r e unnecessar ily tied up in idle a sset hence r educ ing the ability to
invest in produc tive a sset such a s plant and mach iner y so affec ting the
prof itab ility
The study of w ork ing cap ital manageme nt r equir es s pec ial attention f or
the eff icient work ing a nd sur viva l of a bu siness. It has ther ef or e bee n o bser ved
that the shor tage of w ork ing cap ital lead s to the fa ilur e of bu siness.
1.3. Management of Working Capital in India
y Indian cor por ates seem to have ade quate a nd satisfac tor y leve l of
work ing cap ital as r ef lected in their liquidity r atios. The f or eign
controlled c ompa nies ar e p laced in a be tter pos ition r elative to the
domestic c ompa nies.
-
8/6/2019 Vaibhav Final Project[1]
5/47
5 | P a g e
y The r e a r e wide inter -industr y va r iations in the liquidity r atios of the
cor por ate enter pr ises. With the excep tion of sugar , a ll other industr y
groups have safe a nd satisfactor y liquidity position
y The ma jor ity of Indian compa nies maintains r elatively lower
Cash/Ba nk ba lances. Ma rk etable secur ities ar e ye t to emer ge a s a
po pular mea ns of ca sh ma nageme nt. The exce ss cash is deployed to
r etir e shor t-ter m deb t/in shor t-ter m ba nk dep osits
y In s pite of the notable dec line over the yea rs, inventor y cons titutes a
si eab le pa r t of the total curr ent assets of the I ndian cor por ates. The
most impor tant o b jective of inventor y ma nageme nt in India is avoid
loss of production/sales. The p o pular control tech niques ar e AB C,
FSN a nd SDE a nd inventor y turno ver r atio and compa r ison with
compe titors ar e widely used to assess the pe r f or ma nce of inventor y
ma nageme nt.
y Deb tors /r ece ivab le a lso constitutes a signif icant component of cu rr ent
assets. Growth in sales is the m ost impor tant o b jective of cr edit
policy a nd the o pe n cr edit with app roval if exceed s a s pec if ied limit is
the m ost favour ed p olicy. It is comm on pr actice to pr epar e aging
schedu le of deb tors to assess the f inancial hea lth of the cu stomers
bef or e gr anting cr edit and m onitor ing pu r poses. To s peed up
collection, the c or por ates offe r cash d iscount. The ma jor ity of the
compa nies also cha r ge pe nal inter est
y Acc ounts payab le a nd shor t-ter m loans/adva nces ar e the ma jor
components of cu rr ent liab ilities
y The length of the o per ating cyc le is the m ost widely use me thod to
deter mine w ork ing cap ital need. The w ork ing cap ital f inancing policy
is based on the w ork ing cap ital f inancing policy is based on the
-
8/6/2019 Vaibhav Final Project[1]
6/47
6 | P a g e
matching app roach . The ma jor ity of the c ompa nies have occa sionally
expe r ienced w ork ing cap ital shor tage due ma inly to exce ss inventor y
accumu lation and poor debt collection.
1.4. EXPER T REVIEW
1.4. A.1. PARASHURAMAN (2004)
The a r ticle h ighlights the c oncep t, policy of w ork ing cap ital,
component of a nd fac tor affec ting w ork ing cap ital of Lup ins labor ator ies Ltd.
dur ing the last seve n years and identif ied wh ich fac tor ar e r es pons i ble f or the
improveme nt of w ork ing cap ital of the c ompa ny. In this ar ticle eff or t has bee n
made to analyze the w ork ing cap ital manageme nt of Lup ins Lab L td. dur ing
the pe r iod of 1996 -2002. The eff icient ma nageme nt of w ork ing cap ital is
impor tant f rom the p oint of view of liquidity a nd prof itab ility. Poor
ma nageme nt of w ork ing cap ital mea ns the fu nds ar e unnecessar ily tied up idle
assets hence r educ ing liquidity a nd a lso r educ ing the ab ility to invest in
productive a ssets such a s plant and mach iner y, so affec ting the p rof itability.
For assessing the pe r f or ma nce of w ork ing cap ital position, the tech nique of
r atio analysis has bee n made .
1.4.A.1. SUDARSHAN REDDY, C. REDDY, MPHAN REDDY (2003)
Deb tors occupy a n impor tant position in the str uctur e of cu rr ent asset
of a f ir m. They a r e the outcome of r ap id g rowth of tr ade c r edit gr anted by f ir m
to their customer. It is cons ider ed a s mark eting tool acting a s a b r idge f or the
moveme nt of the g oods through p roduc tion stage s to customers. This ar ticle
aims at eva luation the pe r f or mance of the deb tors manageme nt of the pape r
industr y in Andhr a P r ade sh. Authors has selected seven samp le mills f or the
pur pose of study c over ing the ten years per iod c omme ncing f rom 1989 -1999.
For this pur pose, the a nalysis of tr ends in sales and deb tors size, turno ver ,
collection per iod a nd ag ing of r ece ivab les has bee n carr ied out.
Author concluded that the samp le mills ado pted li ber al cr edit policy,
which had a fav or ab le effec t on sales. The size of tr ade deb tors as a pe r centage
of cu rr ent assets had show dec lined tr end. But the c ollection per iod of deb tors
slowly incr eased in all the m ills. The incr eased deb tors collection per iod wa s
-
8/6/2019 Vaibhav Final Project[1]
7/47
7 | P a g e
an indication of slackness in collection eff or ts of the m ills. So authors ha s
sugge sted that in or der to r educe the c ollection per iod, the c ollection and
f ollow up eff or t of tr ade deb tors shall be r ationalized a nd the slackness should
all together be r emoved . Aga in schedu le of over due shall be p r epar ed not onlyf or the six m onths per iod bu t also f or the d iffe r ent time pe r iods, says two
months, nine m onths and twelve m onths.
1.4. B. FIXED ASSE T MANAGEMEN T
1.4. B.1. P. K. NARAYAN (2006)
With the he l p of the p ro per asset manageme nt tech nique the c ompa ny
can incr ease the p rof itability a nd wa stage s, becau se the mach iner y wh ich is
used f or the p roduc tion of g ood a r e a lso the a ssets of the c ompa ny. Hence the
Fixed a ssets ma nageme nt is of ver y much impor tance.
The p osition of the cu rr ent assets is totally depe nds on the
per f or mance of the f ixed a sset which a r e pr esently w ork ing in the p lant. The se
f ixed a ssets add cap ital to the e ntir e w ork ing cap ital of the c ompa ny. If the
plant is ab le to produce its max imum level than ther e w ill be eff icient f low of
cap ital in the f or m of prof it. So compa ny should tr y to o btain its max imum
Akolal by p ro per manageme nt of its f ixed a sset also.
1.4. B.1. ICWA INDIA (2006)
The institute of ICWA says that the Work ing cap ital manageme nt is
the fu nctional ar ea of f inance that covers all the cu rr ent acc ounts of the f ir m. It
is concerned w ith ma nageme nt of the level of individua l curr ent assets as well
as the ma nageme nt of total work ing. Work ing cap ital manageme nt involves
the r elationshi p be twee n a f ir m's shor t-ter m a ssets and its shor t-ter m liabilities.
The A kolal of w ork ing cap ital manageme nt is to ensur e that a f ir m is able to
continue its o per ations. The ma nageme nt of work ing cap ital involves
ma naging inventor ies, acc ounts r eceivab le and payab le, a nd ca sh.
The pe r fec t wor ld does not r equir es or concentr ates about curr ent
assets or curr ent liab ilities becau se ther e w ould not be u ncer tainty, no
tr ansaction costs, inf or mation sear ch c osts, schedu ling c osts or produc tion and
technology c ons tr aints. The r e a r e tr ansaction cos ts f or pur cha sing or selling
-
8/6/2019 Vaibhav Final Project[1]
8/47
8 | P a g e
goods or secur ities. The r e a r e f ixed a s well as var iab le costs associated w ith
producing goods.
1.4. B.2. SUBRAMANAM (2006)
1. Management of working capital
Guided by the ab ove c r iter ia, ma nageme nt will use a c ombination of
policies and tech niques f or the ma nageme nt of w ork ing cap ital. The se policies
aim a t manag ing the cu rr ent assets and the shor t ter m f inancing, such that cash
f lows and r eturns ar e accep table.
2. Cash management :
Ide ntify the ca sh ba lance wh ich a llows f or the bu siness to mee t day to
day expe nses, bu t r educe s cash holding costs.
3. Inventory management :
Ide ntify the level of inventor y wh ich a llows f or uninterr upted
production but r educe s the investment in r aw ma ter ials - a nd minimizes
r eor der ing c osts - a nd he nce incr eases cash f low; see Supp ly cha in
ma nageme nt, Ju st In Time.
4. Debtors management:
Identify the app ro pr iate cr edit policy, i.e. cr edit ter ms which w ill
attr act customers, such that any impac t on cash f lows and the ca sh c onversion
cyc le w ill be off set by incr eased r eve nue.
5. Short term financing:
Ide ntify the app ro pr iate sour ce of f inancing, g iven the ca sh c onvers ion
cyc le: the inventor y is idea lly f inanced by c r edit gr anted by the supplier ;
howeve r , it may be necessar y to utilize a ba nk loan or to "conver t debtors to
cash" through "fac tor ing".
-
8/6/2019 Vaibhav Final Project[1]
9/47
9 | P a g e
1.4. B.3. ENCYCLOPEDIA (2007)
Working capital management:
Dec isions r elating to work ing cap ital and shor t ter m f inancing a r e
r eferr ed to as work ing cap ital manageme nt. The se involve ma naging the
r elationshi p betwee n a f ir m's shor t-ter m a ssets and its shor t-ter m liabilities.
The fu nction of Work ing cap ital manageme nt is to ensur e that the f ir m is able
to continue its o per ations and that it has suff icient cash f low to satisfy b oth
matur ing shor t-ter m deb t and upc oming o per ational expe nses.
Decision criteria
One mea sur e of ca sh f low is provided by the ca sh convers ion cyc le -
the net numbe r of day s f rom the outlay of ca sh f or r aw ma ter ial to r ece iving
payme nt f rom the cu stomer. As a ma nageme nt tool, this metr ic ma k es explicit
the inter -r elatedness of dec isions r elating to inventor ies, acc ounts r ece ivab le
and payab le, a nd ca sh. Becau se this numbe r effec tively corr es ponds to the
time that the f ir m's cash is tied up in o per ations and unava ilab le f or other
activities, ma nageme nt gener ally a ims at a low net count.
1.4. B.3. MAJUMDAR (2007)
The impor tance of hav ing w ork ing cap ital is best understood a s 'costs
expe nded bef or e payme nt r ece ived f or goods/ser vice p rovided to the cu stomer.
Ther ef or e, no cap ital mea ns no produce a nd no customers, wh ich mea ns no
cap ital...
Work ing cap ital has thr ee ca tegor ies to ba lance :
1. Stock Costing:
Raw ma ter ials, work in progr ess f inished stock and 'b ough t in' item s
ar e va lued a t the ' lower of c ost or net r ealizab le va lue, ba sically, only the c ost
of the r aw ma ter ials can be added to curr ent assets.
-
8/6/2019 Vaibhav Final Project[1]
10/47
10 | P a g e
2. Debtors:
The total am ount due to compa ny by cu stomers that you have supplied
cr edit to.
3. Cash:
All cash in hand or at the ba nk that is 'ava ilab le' f or compa ny to use.
The am ount of w ork ing cap ital in a bu siness is an impor tant fac tor whe n
assess ing r isk. The r atio, known as the 'cu rr ent r atio', is Curr ent Assets divided
by Curr ent Liabilities and is used to assess the ab ility of the bu siness to mee t
curr ent/shor t ter m liab ilities, this mea ns has the c ompa ny enough ca sh a nd
stock to pay immed iate suppliers, bills and staff lack of it.
1.5. NEED OF WORKING CAPI T AL
1. Ther e is a positive c orr elation betwee n the sale of the p roduc t of the f ir and
the cu rr ent asset. An incr ease in the sale of the p roduct r equir es a
corr es ponding incr ease in curr ent assets. It is ther ef or e indis pe nsable to
ma nage the cu rr ent assets pro per ly a nd eff iciently.
2. Mor e than half of the total cap ital of the f ir m is gener ally invested in assets.
It mea ns less than half of the cap ital is block ed in f ixed a ssets. We pay due
attention to the ma nageme nt f ixed a ssets through the cap ital budge ting
process. Ma nageme nt of the w ork ing cap ital too, ther ef or e, a ttr acts the
attention of the ma nageme nt.
3. In eme r gency ( non-ava ilability of fu nds etc.) f ixed a ssets can be ac quir ed
on lease bu t ther e is no alternative f or curr ent assets. Investment in curr ent
assets, i.e., inventor y or r eceivab les can in no way av oided
4. Work ing cap ital-need s ar e m or e of ten f inanced through outside sour ces so
it is necessar y to utilize then in the be st way p oss i ble.
-
8/6/2019 Vaibhav Final Project[1]
11/47
11 | P a g e
5. The ma nageme nt of w ork ing cap ital is mor e impor tant f or units becau se the
scar cely r ely on long ter m cap ital mark et and have a n easy acce ss to shor t ter m
f inancial sour ces i.e. tr ade c r edit, shor t ter m ba nk loan etc.
6. In the m odern system app roach to manageme nt, the o per ation of the f ir m
ar e viewed a s a total thr eat is an integr ated system. In this sense it is not
poss i ble to study one segme nt of the f ir m individua lly or leave it our
completely. Hence a n over all look on the ma nageme nt of w ork ing cap ital is
necessar y.
1.6. FAC T ORS AFFEC T ING WORKING CAPI T AL
1.6.1. Nature of business
In some bu siness or ganizations, the sales ar e m ostly on cash ba sis and
the o per ating cyc le is ver y shor t. In these concerns , the w ork ing cap ital
r equir eme nt is compa r atively less. Mostly ser vice g iving c ompa nies come in
this categor y. In manufac tur ing c oncern, u sua lly the o per ating is ver y long and
a f ir m ha s to give c r edit to customers f or improving sales. In such ca ses, the
work ing cap ital r equir eme nt is mor e.
1.6.2. Production Policy
Work ing cap ital r equir eme nt also f luctuate acc or ding to the p roduc tion
policy. Some p roduc ts have a seasonal dema nd bu t in or der to eliminate the
f luctuations in work ing cap ital. The ma nufac tur er plans the p roduc tion in a
steady f low throughout the yea r. Th is policy w ill eve n out the f luctuations in
work ing cap ital.
1.6.3.
Market ConditionsDue to compe tition in the ma rk et, the dema nd f or work ing cap ital
f luctuate in a compe titive e nviron ment, a bu siness f ir m ha s to give li ber al
cr edit to customers. Similar ly it will have to maintain a lar ge inventor y of
f inished g oods to ser vice the cu stomers promptly. In this situation. Lar ger
am ount of w ork ing cap ital will be r equir ed. On the other hand. When a f ir m is
-
8/6/2019 Vaibhav Final Project[1]
12/47
12 | P a g e
in sellers mark et, it can manage w ith a smaller amount of w ork ing cap ital
becau se sales can be made on cash ba sis and ther e w ill be no need to maintain
lar ge inventor y of f inished g oods becau se cu stomers can be ser viced w ith
delay .
1.6.4. Seasonal fluctuations
A f ir m wh ich is produc ing p roduc ts with seasonal dema nds r equir es
mor e w ork ing cap ital dur ing pea k seasons while the dema nd f or work ing
cap ital will go down dur ing slack seasons.
1.6.5. Growth and expansion activities
The w ork ing cap ital need s of the f ir m incr ease a s it grows in ter m of
sales or f ixed a ssets. A G rowing f ir m may need to invest funds in f ixed a ssets.
A G rowing f ir m may need to invest funds in f ixed a ssets in or der to sustain its
growth of production and sales. Th is will in turn incr ease investments in
curr ent assets while w ill r esult in incr ease in work ing cap ital need s.
1.6.6. Operating efficiency
The o per ating eff iciency of the f ir m r elates to the o ptimum u tilization
of r esour ces at minimum c ost. The f ir m w ill be effec tively contr i buting to its
work ing cap ital if it is eff icient in controlling o per ating costs. The w ork ing
cap ital is better utilized a nd ca sh cyc le is r educed wh ich dec r eases work ing
cap ital need s.
1.6.7. Sales growth
As the sales grow, the w ork ing cap ital need s also go up. Actua lly it is
ver y d iff icult to estab lish a n exac t pro por tion of incr ease in sales. Adva nce
planning of w ork ing cap ital bec omes essential becau se cu rr ent assets will have
to be emp loyed eve n bef or e growth in sales tak es place . Once sales incr easing,
they mu st be sustained. For this a f ir m w ill have to expa nd its production
fac ilities which w ill r equir e m or e investment in f ixed a ssets. Th is will in turn
-
8/6/2019 Vaibhav Final Project[1]
13/47
13 | P a g e
r esult in mor e r equir eme nt of cu rr ent assets which w ill incr ease work ing
cap ital need s.
1.6.8. Dividend policy
A c ompa ny ha s to pay d ividends in cash a s per compa ny ac t 1956. if ali ber al policy is f ollowed f or payme nt of d ividends, m or e w ork ing cap ital will
be r equir ed. The need s f or work ing cap ital will be substantially r educed if
dividend policy is cons er vative.
1.6.9. Credit policy
The w ork ing cap ital r equir eme nt of a f ir m depe nds to a g r eat extent on
the c r edit policy f ollowed by a f ir m f or its debtors. A li ber al cr edit policy
f ollowed by a f ir m w ill r esult in huge fu nds block ed I n debtors which w ill
enhance the need f or work ing cap ital. The situation will be fu r ther deter ior ated
if the c ollection procedu r e is also slack. If a li ber al cr edit policy is f ollowed
without inquir ing into the c r edit wor thiness of cu stomers, ther e ca n be
pro blem of r ecover y in futur e wh ich w ill fur ther push up the w ork ing cap ital
r equir eme nts.
The need f or work ing cap ital is also affec ted by the c r edit policy
f ollowed by the f ir ms cr editors. If the c r editors ar e r eady to supply ma ter ials
and goods on li ber al cr edit work ing cap ital r equir eme nt ar e substantially
r educed . On the other hand, if pu r cha sed a r e ma inly f or cash, w ork ing cap ital
need s go up. While p lanning the w ork ing cap ital due a ttention should be g iven
towar ds the cr edit policies f ollowed by the f ir m a nd its cr editors.
1.7. SEED INDUS T RY A T A GLANCE
Seed is the m ost cr itica l & fu ndame ntal in put f or ach ieving sustained
agr icultur al growth. The role of seed sector is not only to ensur e the timely
supply of ade quate qua ntity of quality seed to far mers but also to ach ieve
var ietal diversity to suit agro-climatic z ones.
Mor e than 65% of the p o pulation of Maha r ashtr a depe nds on
agr icultur e f or livelihood. Th ough the state is r ichly endowed w ith d iverse
-
8/6/2019 Vaibhav Final Project[1]
14/47
14 | P a g e
agro-climatic a nd soil conditions, near ly 85% of the cu ltivab le land is under
r ain-fed c onditions. He nce to double the f ood p roduction by 2 011 , mu lti
pron ged eff or ts have to be made to enhance the ag r icultur al produc tivity a nd
the m ost cr ucial of them the w or ds of em inent Agr icultur e Expe r t &Chair man, H igh-leve l comm ittee on Agr icultur e of Maha r ashtr a, D r. M. S.
Swam i Nathan, is "to ensur e incr eased supply of quality seed & p lanting
mater ial"
Imp roveme nt of seed r eplaceme nt r atio (SRR ), incor por ation of pe st &
disease r esistance through c onventional as well as genetic e ngineer ing
methods and R&D eff or ts to r es pond to r egion s pec if ic va r ietal r equir eme nts
to improve the y ield sustainability a r e the ma jor cha llenges to the seed
industr y. The seed industr y ha s shown impr ess ive pe r f or mance a nd ha s gear ed
up to tak e up to tak e cha llenge of ag r icultur al productivity. Glo ba lization and
economic li ber alization has provided the app ro pr iate c limate f or exce llence
through c ompe titiveness.
1.7.1 S T RUC T URE OF SEED SEC T OR Although the I ndian seed ma rk et is one of the lar gest, it is almost
exclusively supplied by loca lly p roduced seed s. Far mers r etain seed of ma jor
f ood cro ps (whea t, r ice, sor ghum, m illet, corn , and pu lses) and comme r cial
cro ps f or many yea rs, and the lar gest volume of seed tr ade involves loca l
excha nges of estab lished self-pollinating va r ieties. The seed r eplaceme nt r ate
in most cro ps is ver y low, w ith the excep tion of cotton and some vege tables.
The u se of hyb r id seed s is mostly conf ined to cotton, and to some ex tent to
corn , millet, sunf lower , and few vege tables. Howeve r , awa r eness about the
high y ield a nd quality of produce f rom hyb r id seed s, attr acting fa r mers to
switch over to hybr ids, is growing. The I ndian seed industr y used to bedominated by pub lic sector seed c ompa nies. Howeve r , f ollowing the ea sing of
government r egulations and the impleme ntation of a new seed p olicy in 1988 ,
the p r ivate sector seed c ompa nies have star ted p laying a ma jor role in seed
deve lo pme nt and ma rk eting. Mor e r ece ntly, the g overnments decision to
emb r ace b iotech nology a s a mea ns of ach ieving f ood secur ity ha s attr acted
-
8/6/2019 Vaibhav Final Project[1]
15/47
15 | P a g e
sever al lead ing b iotech nology-f ocused mu ltinational seed c ompa nies to India.
The c omposition of the seed industr y, by v olume of turno ver , ha s r epor tedly
r eached a r atio of 60:40 betwee n the p r ivate and pub lic sectors.
1.7.2. CURREN T ST AT US OF SEED INDUS T RY
Indias seed industr y ha s grown in size a nd leve l of per f or mance over
the pa st f our decade s. Both p r ivate a nd pub lic sector compa nies/cor por ations
ar e involved w ith the p roduction of seed . The pub lic sector component
compr ises two centr al cor por ations, v iz. National Seed Cor por ation (NS C) and
State Fa r m Cor por ation of India (SF CI) and 13 S tate Seed Cor por ations. The
pr ivate sector compr ises around 150 seed c ompa nies, wh ich include national
and mu ltinational compa nies and other seed p roduc ing/selling c ompa nies. The
industr y ha s made impr ess ive str ides f rom a m odest beginning in seed
production in 1962 63 to over 5 lak h hec tar es by 1995 96. The quantum of
seed p roduced a nd sold ha s gone up by f ive times f rom 14 lak h quintals to 70
lak h quintals dur ing the c orr es ponding per iod7. In 1990 91 the a r ea p lanted
with bough t seed wa s about 10.35%. The total bough t seed in 1990 91 was
estimated a t around 5.91 lak h tonnes valued a t R s 679.80 cror es (tab les 1 and
2). This seed c omp onent in 1990 91 compr ised of p ro pr ietar y hyb r ids, pub lic-
br ed hyb r ids and o pe n-pollinated va r ieties. In ter ms of quantity a nd va lue,
seed of o pe n-pollinated va r ieties was the lar gest f ollowed in or der by pub lic
hybr ids and p ro pr ietar y hyb r ids. Seed of a nd pu lses. It is seen that the quantity
in saved seed s signif icantly r educed in 1998 99 compa r ed to 1990 91 in case
of oilseed s and f i br es whe r eas it incr eased in cer eals and p otato.
1.7.3. Private Sector Seed Companies
Easing of government r egulations in the late 1980s s purr ed e nor mous
deve lo pme nt within the seed industr y by a ttr acting sever al f or eign seed
compa nies to India. While some of them ( lik e Car gill) enter ed through joint
ventur e pa r tnershi ps with Indian seed c ompa nies, some others alr eady had a
pr esence in India through aff iliate compa nies (lik e H industan Leve r). They
-
8/6/2019 Vaibhav Final Project[1]
16/47
16 | P a g e
identif ied p otential cro ps f or hybr idization and star ted r esear ch a nd
deve lo pme nt activities. Typ ica lly they c oncentr ated on hybr ids, ma inly corn ,
cotton, sunf lower , vege tables, and f lowers (m or e r ecently on r ice), and they
now acc ount f or a ma jor shar e of comme r cial production of these seed s in India. The ba sic r eason f or the p r ivate sectors f ocus on these cro ps is that it
involves low p roduc tion volume a nd h igher mar gins. Concomitantly, they had
little inter est in deve lo ping self-pollinated c ro ps, wh ich involve h igh v olume
and low ma r gin and a r e m or e pron e to pir acy in the ab sence of a n effec tive
Plant Va r iety P rotection r egime in India. Fur ther mor e, ther e is no signif icant
government inter vention in the p r icing of these hyb r ids, and the I ndian seed
r egulations per mit mark eting of tr uthfu lly labe led seed s. Curr ently, some 500
hybr ids of f ield c ro ps and vege tables ar e be ing ma rk eted, a s tr uthfu lly labe ledseed s, mostly by p r ivate seed c ompa nies. The p r ivate seed sector now
compr ises some twenty or so lar ge p laye rs (with sales turno ver exceed ing rs.
200 million) , sever al med ium c ompa nies (sales turn over betwee n rs. 200
million and 20 million), and a lar ge numbe r of small, unor ganized p laye rs
(sales turno ver less tha n R s. 20 million) with loca l pr esence. The p r ivate seed
industr y is now u nder going a tr ansition f ollowing the I ndian governments
f ocus on biotech nology r esear ch, a s a mea ns of incr easing ag r icultur al
production and a lso dr iven by tr ends in the d ome stic a nd w or ld seed ma rk et.
Intensifying international compe tition, incr easing R&D c osts, and the
complexity of biotech nology have lead to incr eased c onso lidation of the
Indian seed industr y w ith sever al of the lar ge a nd med ium c ompa nies mer ging
or being tak en over by mu ltinational seed c ompa nies. Most lar ge mu ltinational
seed c ompa nies now have their pr esence in India (e ither as a joint ventur e or
with 100 per cent equity) with their main f ocus on biotech nology. The se
include M onsanto, Baye r Cro pSc ience, Sy ngenta, Adva nta, H icks-Mu se-Ta te,
Eme r gent Ge netics, Dow Ag ro, Bioseed Ge netics International Inc., T ok ita
Seed Co, and Nu nhems Zade n BV. Another fac tor attr acting international seed
compa nies to India is the c ountr ys var ied ag roclimatic c onditions and
abundant sk illed a nd unsk illed labor , as seed p roduction, pa r ticular ly hyb r id
seed p roduction, is highly labor intensive. Pr ivate seed p roduc tion is lar gely
-
8/6/2019 Vaibhav Final Project[1]
17/47
17 | P a g e
center ed a round Ba ngalor e f or vege table c ro ps and Hyde r abad f or f ield c ro ps,
par ticular ly c ottons eed s.
1.7.4. Public-Private Sector Cooperation
Coo per ation betwee n pr ivate sector seed c ompa nies and pub licr esear ch institutes under ICAR, SAU s, and the I nternational Cro p Resear ch
Institute f or Sem i-Ar id T ro pics (ICRISAT ), suppor ted by the Consultative
Group on International Agr icultur al Resear ch ( CGIAR ), is growing. Public
sector br eede r seed s ar e ava ilab le f r ee of cha r ge to pr ivate seed c ompa nies
with no str ings attached . The AI CT a nnual works ho ps provide ve nues to
pr ivate sector seed c ompa nies to assess wha t is ava ilab le with pub lic r esear ch
institutes. Under the c onsor tium m odel with I CRISAT, p r ivate compa nies
can jointly fu nd r esear ch that r esults in publicly ava ilable pa r ental lines, wh ich
they of ten cross with in-house ge netics to produce p ro pr ietar y hyb r ids.
ICRISAT r ece ntly introduced a live-in campu s f or pr ivate sector r esear chers to
use the institutions fac ilities and expe r tise. ICRISAT is f ocusing m or e on
pr ivate sector par tnershi ps f or funding r easons and a lso becau se of pr ivate
compa nies effec tiveness in getting the r esear ch r esult out to far mers.
ICRISAT is curr ently r eviewing its policy of k eep ing a ll r esear ch in the pub lic
domain and is cons ider ing licensing/royalties/exc lusive r ights. Pr iva te
compa nies can
also fully fu nd r esear ch a t SAU s f or exc lusive r ights on the r esults and/or hir e
professors as consultants, a lthough the deg r ee of c oo per ation var ies f rom state
to state.
-
8/6/2019 Vaibhav Final Project[1]
18/47
18 | P a g e
OBJEC T IVES OF T HE S T UDY
The p ro ject f or ms a ve r y v ital as pec t dur ing the cu rr iculum of Ma sters
Deg r ee in Business Adm inistr ation. Its impor tance lies in the fac t that this
pro ject gives the student f irst ever exposur e to the or ganization. Th is pro ject
cer tainly g ives an over view ab out the or ganization, its var ious depa r tments
and their functions.
The ba sic o b jectives of the p ro ject ar e to know ac tua l work ing of MSS CL, its
histor y, ma nageme nt philoso phy and over all work ing of the f inance
depa r tment.
1. To know level of inventor y H oldings at Mahabee j limited A kola p lant.
2. To understand the policy of holding the Cash a nd Ba nk ba lances at plant.
3. To study the c omposition of cu rr ent assets and Liabilities.
4. To f ind out the ac tua l per f or mance of the a sset at Mahabee j Akola p lant.
-
8/6/2019 Vaibhav Final Project[1]
19/47
19 | P a g e
3. RESEARCH ME T HODOLOGY
3.1. What is Research?Resear ch is any or ganized e nquir y ca rr ied out to provide inf or mation
f or solving p ro blems. Re sear ch is a systema tic e nquir y that provides
inf or mation to guide dec isions. Mor e s pec if ically, it is a process of
deter mining, ac quir ing, a nalyzing a nd synthesizing, a nd d isseminating
r eleva nt data, inf or mation and insights to dec ision ma k ers in way s that
mo bilize the or ganization to tak e app ro pr iate ac tions that, in turn, max imize
business per f or mance.
3.2. Research Design
Resear ch De sign involves the de scr i ptive study. It analyzes the
f inancial r esour ces and f inancial position of the MSS CL, whe r ein the pa st
pro ject data a nd f inancial stateme nts ar e be ing used to know the w ork ing
cap ital position of the c ompa ny.
3.3. Scope of the Study The sco pe of study w ill include the a nalysis of the w ork ing cap ital
ma nageme nt of the c ompa ny a nd to analyze the w ork ing cap ital need s.
Mor eover , the study a lso includes the Ra tio Analysis that will hel p in studying
the w ork ing cap ital position f or the cu rr ent yea rs and the p r eced ing yea rs.
Funds Flow A nalysis is an effec tive ma nageme nt tool to study cha nges in the
f inancial position (work ing cap ital) of a bu siness enter pr ise be twee n beg inning
and e nding f inancial stateme nts dates. The a nalysis of w ork ing cap ital ca n also
be ca lculated through Budge ting.
3.4. Sources of Data for Data Collection
The study that is conducted be ing de scr i ptive one the r esear ch sour ce of
data u sed is of two types:
Pr imar y Da ta
-
8/6/2019 Vaibhav Final Project[1]
20/47
20 | P a g e
S eco ndary Data
3 .4.1. Pr i ry Data-
The data collected at f ir st hand e ither by t he re searc her or by someo ne
else e s pec ially for t he purpo se for t he study. S ince it is a de scr i pt ive re searc h design the pr imary informat ion is collected t hroug h discussi on with the
manager s of t he MSS CL, staff member s, etc.
Th e informat ion needed for co nduct ing t his study is collected t hroug h
Per sonal I nterv iewing. This met hod is best for t he de scr i pt ive re searc h
design. Moreover, it helps to clar ify t he doubt s immed iately by co nduct ing
discussion with the expert s, compa ny aut hor ities and staff member s.
3 .4.2 Second a ry Data-
For co nduct ing t he deta iled study of t his top ic it is nece ssary to have
some of t he seco ndary informat ion which is collected from :
o Bala nce S heet of t he MSS CL for la st 3 year s
o CMA report s of MS CCL for la st 3 year s.
o Prof it and Lo ss Accou nt for la st 3 year s.
o J our nals Annual R eport s, 2004, 2005, 2006, 2007, 2008 of MSS CL
Ltd.
o Web site(www.ma habeej.com )
-
8/6/2019 Vaibhav Final Project[1]
21/47
21 | P a g e
LIMI T AT ION OF T HE S T UDY
The effec tive ma nageme nt of w ork ing cap ital is of pr ime impor tance to
the ma nufac tur ing c oncern. Inventor y, acc ount r ece ivab les, acc ounts payab les ar e the impor tant fac tors , wh ich a r e to be c ontrolled a nd ma naged effec tively.
The e ss ence of ba sic r esear ch of that it add r esses itself too mor e fu ndame ntal
questions. Analysis of da ta is done by inter pr etations in var ious f igur es and
tables.
L I M I T A T I O N
y As sti pulated by the u niversity r egulations the study is under tak en f or a
per iod of 60 day s. The pe r iod howeve r is not ade quate to gain through
knowledge .
y It is not poss i ble to o btain some c onf idential da ta f rom the or ganization.
The inter pr etation of the da ta w ould be m or e mea ningfu l with the he l p of
some inf or mation, wh ich c ould not be c ollected due to cer tain r easons.
y Some inf or mation f or pr epar ing the ba lance shee t was given by the
or ganization on the ba sis of their past expe r ience a nd he nce it was diff icult
to understand the ba sis of such p ro jections.
-
8/6/2019 Vaibhav Final Project[1]
22/47
22 | P a g e
COM PA NY P ROFI LE
Maharashtra State Seeds Corporation Limited Mahabeej Bhavan, Krishi Nagar, Akola444 104 (India)
S mbol of Qualit
-
8/6/2019 Vaibhav Final Project[1]
23/47
23 | P a g e
5.1. HIS T ORY OF ORGANIZA T ION
Government of I ndia ha s f or mulated the I ndian Seed s Act, Which wa s
pa ssed by Pa r liame nt in the yea r 1966 , with the pu r pose of r egu lating the
quality of seed s. Under the Wor ld Ba nk funded Na tional Seed s Pro ject (NSP ) the state G overnment wer e a ssisted to set up Seed s cor por ations to produce,
process and d istr i bute quality ce r tif ied seed s to the fa r mers at r easonab le
pr ices. Under the NSP, the inf r astr uctur e of ag r icultur al institutions was also
str engthened to fac ilitate the seed r esear ch a s well as produc tion of br eede r
and f oundation seed . Seed testing labor ator ies and state seed ce r tif ication
age ncies wer e estab lished to ensur e the quality pa r ame ters. Maha r ashtr a wa s
one of the f or er unner states to set up its own State seed c or por ation under the
NSP in the yea r 1976... Thu s emer ged MSS CL on the h or izon of national seed
scenar io.
MSS CL (Maha r ashtr a S tate Seed s Cor por ation Ltd), A kola is a lead ing
Public Sec tor seed c ompa ny of India. MSS CL wa s incor por ated u nder
Compa nies Act, 1956. It is one of the lar gest State seed s cor por ation am ong
all SSCs. Engaged p r imar ily in production, p rocessing a nd ma rk eting of seed s
of m or e than 50 Cro ps & 22 5 Va r ieties & hyb r ids in almost all categor ies i.e.
Cer eals, Pu lses, F i bers, Vege tables, Gr een Ma nur ing a nd F odder cro ps as well
as planting ma ter ial
5.2. IN T RODUC T ION OF MSSCL
MSS CL is well known in the c ountr y f or highest standar ds of quality
& p roduc tivity it has maintained over the yea rs and ha s bee n awa r ded Na tional
productivity Awa r d, a p r estigious Awa r d instituted by Na tional Productivity
Council, f or a r ecor d 12 times till date.
Set up w ith the o b jectives of ma k ing ava ilab le be st quality ce r tif ied
seed s in app ro pr iate quantity a t r ight time a t aff or dab le pr ices to the fa r mers,
MSS CL is now p roduc ing m or e tha n 9 Lac s Qtls. of quality ce r tif ied seed a nd
supplying to the fa r mers living eve n in r emote h inter lands with a p rolif ic
network of m or e than 1400 dea lers that include s pr ivate dea lers as well as
coo per ative Ag r i-in put mark eting societies in Maha r ashtr a a s well as 12 other
-
8/6/2019 Vaibhav Final Project[1]
24/47
24 | P a g e
states all over India. MSS CL P roduce s high quality ce r tif ied, f oundation &
tr uthful seed s of assur ed ge netic a nd phy sica l pur ity, h igh ge r mination and
vigor.
Mark eted u nder the p o pular br and name of "MAHABEEJ" (Mea ning
Gr eat Seed ), MSS CL seed s have bec ome symb ols of quality. Mahabee j seed s
ar e produced in diverse ag ro-climatic r egions under the super vision of
expe r ienced tech nica l work f or ce. From sowing to har vesting a nd process ing
pac k ing to stor age, the seed s ar e scientif ically m onitor ed to ach ieve &
maintain unif or m h igh quality.
MSS CL is located a t Akola in Western Vidar bha, wh ich is known as
the ce nter of seed sector of Maha r ashtr a a nd the seat of ag r icultur al educa tion
in the f or m of Dr. Pan jabr ao Deshmu k h Ag r icultur e U niversity, A kola a lso
houses the head quar ter of state Seed s cer tif ication Age ncy. The cha ir man of
MSS CL is the Sec r etar y (Ag r il) to Government of Maha r ashtr a a nd Ma nag ing
Dir ector is also a senior IAS off icer based a t Akola.
MSS CL ha s 6 Reg ional off ices in Maha r ashtr a v iz. Pune, Tha ne,
Jalgaon, Pa r bha ni, Akola a nd War dha . The r egional head quar ters and a r ea
off ices which a r e located in outside states ar e a t Kurnoo l, AP (S outhern
r egion), Indor e, MP ( Centr al r egion), Ka shi pur , U ttar ancha l (Nor thern r egion) ,
Gandhinaga r , Gu jar at (Western r egion) & K olk ata (Ea stern r egion)
The r e a r e 26 well deve lo ped seed P rocess ing P lants (SPP s) with
scientif ic stor age fac ilities of 4.5 Lac s quintals capac ity, e qui pped with
modern gadge ts & mach iner ies located in var ious par ts of the state, in the
f r inges and hinter lands with view to fac ilitate the seed g rowers.
MSS CL p roduce s high quality ce r tif ied, f oundation & tr uthfu l seed s of
assur ed ge netic a nd phy sica l pur ity w ith h igh ge r mination and a ssur ed v igor.
The seed p roduction progr amme is or ganized through m or e than 50,000 seed
growers in Maha r ashtr a, AP, MP, a nd Gu jar at & U ttar ancha l. The seed
production progr amme is tak en on 60,000 Ha. With the seed g rowers dir ectly
and w ith he l p of or ga nizers.
Standar ds of quality a r e ma intained a t ever y stage v iz. produc tion,
process ing stor age & ma rk ing through scientif ic app roach a nd str ict
-
8/6/2019 Vaibhav Final Project[1]
25/47
25 | P a g e
sur veillance. Dur ing seed p roduc tion progr amme, r igorous concurr ent
ins pec tions ar e done by MSS CL f ield off icers. Apa r t f rom that indepe ndent
and str ict ins pec tions ar e a lso tak en by seed Cer tif ication Age ncy off icers.
Tech nica l guidance is cons istently p rovided to the seed g rowers to maintain quality standar ds in seed p roduction. Any k ind of impu r ity f ound ge ts plugged
dur ing the ins pec tion and the ge netic pu r ity levels ar e ma intained thoro ugh ly.
The seed s passed in the ba sic pa r ame ters ar e only tak en f or process ing. The
processed seed is fur ther tested in the G row out test f or eva luation of the
genetic pu r ity.
The ma rk et shar e of MSS CL is 50 % in ter ms of v olume a nd 3 5 of 40
% in ter ms of Va lue in Maha r ashtr a MSS CL is the u ncha llenged ma rk et leade r
in Soybea n, Wheat, Paddy, G roundnut, Gr am, Ud id Jowar , Ba jr a, Tu r & M oogand ha s ver y good ma rk et shar e in Jute, Dha incha, N otif ied improved &
Hyb r id Cotton & Vege tables.
The turno ver of the MSS CL a s per the 2 004 -2005 f igur e is about
R s.210 Cror es and it is expec ted to cross R s. 235 Cror es mark in the cu rr ent
f inancial year. Th is is one of the excep tional PSU s of Maha r ashtr a, wh ich is
sustaining without any gr ant-in-a id or salar y gr ants f rom S tate G overnment.
Still, MSS CL ha s bee n stur dy a nd prof it mak ing or ganization known f or its
over all profess ionalism & exce llent f inancial manageme nt.
Till 1993, MSS CL wa s dea ling with pub lic br ad notif ied
Hyb r ids/Va r ieties of differ ent cro ps. Howeve r , in or der to fulf ill the
r equir eme nt of fa r mers f or super ior qua lity r esear ch hyb r ids. MSS C Ltd set
up its own full-f ledged R&D u nit with expe r t team of br eede rs. MSS CL ha s
carr ied out own r esear ch a nd ha s come out with some exce llent hybr ids in the
f ield of S or ghum, Pea r l Millet, Ma ize Su nf lower , and Cotton & Vege tables. In
add ition to own R&D, MSS CL ha s po pular ized pub lic br ed notif ied va r ieties
of SAU s (State Ag r icultur al Universities) and Re sear ch institutions of ICAR
(Indian Council of Ag r icultur al Resear ch). MSS CL ha s also enter ed in tie-up
arr angeme nts and r esear ch c ollabor ations with r eputed I nternational
institutions lik e ICRISAT, Hyde r abad & I CGEB, a nd New De lhi.
In the e r a of B io-tech nology a nd Ge netic E ngineer ing, MSS CL ha s
emba rk ed on the p rocess of deve lo ping tr ansgenic in cotton and f or that has
-
8/6/2019 Vaibhav Final Project[1]
26/47
26 | P a g e
set up in 2002, a state of ar t Mahabee j Bio-Tech nology Center (MB C) at
Nagpu r with the f inancial ass istance f rom V idar bha Statutor y Deve lo pme nt
Boar d in tech nica l collabor ation with ICGEB, New De lhi, with a long ter m
insect r esistance ma nageme nt str ategy, MB C is endeav or ing to incor por atemulti ple insect r esistant genes in cotton var ieties. MSS CL ha s acquir ed
per mission f rom Depa r tment of B iotech nology, GOI to tak e up r esear ch in the
ar ena of Bt. Cotton.
MSS CL ha s also set up so ph isticated T issue Cultur e Lab or ator y f or
lar ge- scale c omme r cial production of T issue Cultur e Ba nana & sugar cane
plantlets by m icro pro paga tion tech niques. In 2004-2005, MSS CL w ould be
selling 7 .5 Lac s TC Banana plantlets in Banana producing be lts of
Maha r ashtr a, MP & Chattisgar h. Under Re sear ch & Deve lo pme nt Pro ject of mach iner y, MSS CL ha s
designed a nd deve lo ped unique P ollution Fr ee Cotton seed De linting
Tech nology w ith the r esear ch g r ant f rom DSIR & I CAR, New De lhi.
The new tech nology e liminates the u se of sul phu r ic ac id, wh ich is a
ma jor pollutant and fac ilitates non-haza r dous and pollution f r ee de linting of
fuzzy c ottons eed, y ielding ab out 15% enhanceme nt in ger mination and over all
vigor of the c ottonseed thus boosting the p roduc tivity of cotton cro p. This
pro ject has proved to be m ilestone in the TM C (Tech nology M ission on
cotton) launched by G overnment of India a nd a lso f inds mention in the web
site of ICAR & DSIR P lants up to capac ity f rom 0.5 TPH (T ons Per Hour) to
4 TPH have bee n made ava ilable c omme r cially to public & p r ivate sector seed
compa nies. RSS C (Ra jasthan State Seed s cor por ation) & HSD C (Ha r yana
Seed s Deve lo pme nt Cor por ation) or ders ar e u nder execu tion on turnk ey ba sis.
Seve r al pr ivate seed c ompa nies ar e coming f or war d f or plac ing the or ders.
MSS CL ha s divers if ied its activities and a s per t of divers if ication ha s
estab lished Nu rser ies of orn ame nts, f r uit & f lower plants at var ious locations it
has sale counters f or mark eting of these plants in Akola, Nagpu r & Na shik.
The La ndscap ing & Ga r dening consultancy a nd deve lo pme nt work is
under tak en as a new bu siness.
-
8/6/2019 Vaibhav Final Project[1]
27/47
27 | P a g e
5.3 . ORG ANI Z ATION
MSS CL wa s establ ished o n 28t h Apr il 1976 at Akola. Akola wa s a
natural c hoice for t he headquarter a s initially t he seed product ion act ivities had
bee n take n up o n Akola a nd nearby d istr icts i.e. Bulda na, Parb hani & Na nded,
Later o n, the product ion and seed d istr i but ion work has bee n exte nded to all
the d istr icts of Mahara shtra.
Th e aut hor ized share cap ital of MSS CL a s on 31/03/2005 is R s. 10
Crore s divided into equ ity share s of R s.100 eac h. As aga ins t that, t he pa id up
share cap ital of MSS CL is R s. 4.18 Crore s. Th e share s have bee n held by
follow ing categor ies of share holder s;
5.4. BO ARD OF DIR E CTOR S
The pre sent strength of t he Board of D irector s is eleve n. Th e d irector s are
appo inted /nominated u nder t he prov ision contained in Art icle-125 of t he
Art icle of A ssociation of t he compa ny, t he S ecretary to t he GO M; Dept. of
Agr iculture is the ex-off icio Chairma n of t he Board of t he Director s
49%
35%
13%
3%
SHAREHOLDERS
Government of Maharashtra
National SeedsCorporation
Farmers/Seeds Grower
State AgricultureUniiversities
-
8/6/2019 Vaibhav Final Project[1]
28/47
28 | P a g e
WORKING CAPI T AL
Current Asset : (In lacs Rs.)
2007-08 2006-07 2005-06 2004-05 2003-04
Inventories 9277.00 5634.79 5907.20 6754.37 7285.12
Sundry Debtor 614.41 938.09 744.38 365.57 372.64
Cash & BankBalance
6647.53 4260.78 2602.21 1116.03 930.85
Other CurrentAsset 57.56 31.50 7.26 0.06 0.08
Loans &Advances 6181.62 6582.22 5468.66 6837.69 4815.72
Total CurrentAsset (A) 22778.10 17447.38 14729.71 15073.72 13404.40
CurrentLiability
2007-08 2006-07 2005-06 2004-05 2003-04
SundryCreditor
For Seeds 1971.72 1235.68 1188.64 1287.37 1373.57
For
Supplies &Expenses 473.72 538.58 487.13 539.91 440.94
For Other 3167.99 2238.75 2090.34 2263.92 2078.39
UnclaimedDividend
2.88 5.73 8.64 10.77 10.77
AdvanceReceived fromCustumer
5736.72 3732.94 3799.71 4863.08 3612.40
SprinklerGrant (Govt of Mah Rs. 59.21
Cr)
1875.83 1875.84 1864.05 0.00 0.00
SprinklerGrant (Govt of Mah Rs. 24.05Cr)
512.50 606.59 0.00 0.00 0.00
Sub- total :CurrentLiability
13741.40 10234.11 9438.51 8965.05 7516.07
-
8/6/2019 Vaibhav Final Project[1]
29/47
29 | P a g e
PROVISION
For Earn CashEncashment
853.84 728.50 638.18 538.52 449.50
For Taxation 470.00 161.28 0.00 8.52 49.73
For GroupGratuity
64.58 55.29 100.48 72.23 211.17
Sub-total :Provison 1388.42 945.07 738.66 619.27 710.40
Grand Total(B) 15129.80 11179.18 10177.17 9584.32 8226.47
WorkingCapital * 7648.34 6268.20 4552.54 5489.40 5177.94
Ratio # 1.50 : 1 1.56 : 1 1.44 : 1 1.57 : 1 1.62 : 1
y *Working Capital = Total Current Asset(A) Total Current
Liability(B)
y # Current Ratio = Current asset / Current Liability
ANALYSIS / IN T ERPRE T AT ION
MSS CL ma inly depe nds on funds gr anted f rom its own business
o per ation and the w ork ing cap ital r equir eme nt is met by ava iling Cash Cr edit
Limit/Sh or t Te r m L oan f rom va r ious banks. The acc ounts of the Cor por ation
ar e ma intained in all distr ict head off icers in the state a s well as at the off ices
in other states apa r t f rom the head off ice. For maintenance of the acc ounts,
s pec ial app lication sof twar e ha s bee n designed w ith the he l p of in-house
r esour ces and ha s been giving f r uitful r esults.
-
8/6/2019 Vaibhav Final Project[1]
30/47
30 | P a g e
Bank ers
Bank of Maha r ashtr a, A kola (Maha r ashtr a)
1. State Ba nk of India, A kola (Maha r ashtr a)
2. HDF C Bank , A kola (Maha r ashtr a) 3. Ba nk of India, A kola (Maha r ashtr a)
In MSS CL Work ing Capital Re quir eme nt Is Assess ed By
y Fixing the tar get production
y Pr epar ation of Budge t (in r upee s)
Work ing Capital Requir eme nt Ar e Pr epar ed Ta k ing Into Acc ount :
y Actual value of the p r evious two years work ing cap ital.
y Pro jected va lue f or the next two years
6.1 Procedure for procurement of funds:
Mahabee j seed p rocess ing plant app lies a cr edit monitor ing a nd
appr aisal (CMA ) r epor t . The d ocume nt cons ists of histor ical data ab out the
compa ny a nd p rof it and loss acc ount, ba lance sheet, cu rr ent assets curr ent
liab ilities, work ing cap ital assess ment, fu nd f lows etc.. SBI subscr i bes the
max imum w ork ing cap ital limit (up to extent 50Lac s) of the e ntir e w ork ing
cap ital assessed. The other banks of the u nder the ba nk ing a rr angeme nt above
provide the r est of Work ing cap ital limits.
6.2. T ypes of working capital source :
1. Fund ba sed limits : under this sour ce, MSS CL ca n o btain work ing
cap ital f inance by ba nk borro wing in the f or m of ca sh cr edit.
2. Non-fund ba sed limits : MSS CL r ece ives non -fu nd ba sed w ork ingcap ital in the f or m of letter of cr edit or bank guar antee.
-
8/6/2019 Vaibhav Final Project[1]
31/47
31 | P a g e
Statement of changes in working capital for the year 2004 -
2005
(figures in Lakhs)
P articulars 2004 2005 Increase Decrease
Current Assets
Inventories 7285.12 6754.37 530.75
Sundry debtors 372.64 365.57 7.07
Cash and bank bal 930.85 1116.03 185.18
Other current assets 0.08 0.06 0.02
Loans and advances 4815.72 6837.69 2021.97
Total current assets 13404.41 15073.72
Current LiabilitiesLiabilities 7516.07 8965.05 1448.98
Provision 710.40 619.27 91.13
Total current liabilities 8226.47 9584.32
Net increase in Working Capital 311.46
Total 2298.28 2298.28
Statement of changes in working capital for the year 2005 -2006(figures in Lakhs)
P articulars 2005 2006 Increase Decrease
Current Assets
Inventories 6754.37 5907.20 847.17
Sundry debtors 365.57 744.38 378.81
Cash and bank bal 1116.03 2602.21 1486.18
Other current assets 0.06 7.26 7.20
Loans and advances 6837.69 5468.66 1369.03
Total current assets 15073.72 14729.71
Current Liabilities
Liabilities 8965.05 9438.51 473.46
Provision 619.27 738.66 119.39
Total current liabilities 9584.32 10177.17
Net decrease in Working Capital 936.86
Total 2809.05 2809.05
-
8/6/2019 Vaibhav Final Project[1]
32/47
32 | P a g e
Statement of changes in working capital for the year 2006-2007
(figures in Lakhs) P articulars 2006 2007 Increase Decrease
Current AssetsInventories 5907.20 5634.79 272.41
Sundry debtors 744.38 938.09 193.71
Cash and bank bal 2602.21 4260.78 1658.57
Other current assets 7.26 31.50 24.24
Loans and advances 5468.66 6582.22 1113.56
Total current assets 14729.71 17447.38
Current Liabilities
Liabilities 9438.51 10234.11 795.60
Provision 738.66 945.07 206.41Total current liabilities 10177.17 11179.18
Net increase in Working Capital 1715.66
Total 2990.08 2990.08
Statement of changes in working capital for the year 2007 -2008(figures in Lakhs)
P articulars 2007 2008 Increase Decrease
Current Assets
Inventories 5634.79 9277.00 3642.21
Sundry debtors 938.09 614.41 323.68
Cash and bank bal 4260.78 6647.53 2386.75
Other current assets 31.50 57.56 26.06
Loans and advances 6582.22 6181.62 400.60
Total current assets 17447.38 22778.12
Current Liabilities
Liabilities 10234.11 13741.36 3507.25Provision 945.07 1388.42 443.35
Total current liabilities 11179.18 15129.78
Net increase in Working Capital 1380.14
Total 6055.02 6055.02
-
8/6/2019 Vaibhav Final Project[1]
33/47
33 | P a g e
Net working capital:
The net work ing cap ital of MSS CL shows an decr easing tr end f rom
2004 -06 and incr easing tr ead f rom 2 006 -07 to 2007-08. It is showing a
positive f igur e af ter that till 2007-08. The ma in r eason f or the dec r easing tr end in the yea rs is due to the
incr easing cr editors year af ter year. If a lso indica tes a wea k cash ba lance to
mee t the liab ilities. The cu rr ent liabilities of the c ompa ny a r e incr easing by
1000 cror es almost ever y yea r. The inability of the c ompa ny to pay the
cr editors is also evident f rom the r educ ing net o per ating cyc le per iod.
The o per ating cyc le pe r iod ha s r educed c ontinuously f rom 120 day s
dur ing 2001 -02 to 90 day s dur ing yea r 2005-06 aga inst decr easing tr ends in
the p r evious years.
The incr ease in work ing cap ital is due to better sales and fu ll capac ity
utilization.
This has r esulted in r educ tion of cost of produc tion. The net work ing
cap ital of MSS CL f or the pa st 5 years is depicted in the table.
YEARSNET WORKING
CAPITAL. (Amount inLakhs Rs.)
CHANGE INPERCENTAGE ( %
)
2004 7648.34 --
2005 6268.20 -18
2006 4552.54 -27
2007 5489.40 21
2008 5177.94 -6
-
8/6/2019 Vaibhav Final Project[1]
34/47
34 | P a g e
I n t erpre tat ion:
Th e above table indicates that work ing cap ital is highest for t he year
2004. The net work ing cap ital has show n a gradual decrea sin g from 2004 t ill
2006. But increa se in the year 2007. S tateme nt of c hanges in work ing cap ital is done in the page s that follow to g ive t he complete p icture of var iat ions in
work ing cap ital.
Cu rren t r at io:
A curre nt rat io of 2 :1 is consi dered to do ideal. Th e rat io is an indicator
of t he f irms comm itme nt to meet its short-term l iab ilities. It indicate s the
rupee s of curre nt assets ava ilable for eac h rupee of curre nt l iab ility. Th e higher
curre nt rat io t he higher fu nds ava ilable for a rupee of curre nt liab ilities. As a
convention rule a curre nt rat io of 2 :1 or more is considered satisfactory.
Th e higher curre nt rat io indicates the higher fu nds ava ilable for a f irm.
200 3.04
2004 .05
200 5.06
2006 .07
2007 .08
7648 .3 4
6268 .2
455 2 .54
5489 .4
5177 .94
NET WORKI NG CA ITAL
-
8/6/2019 Vaibhav Final Project[1]
35/47
35 | P a g e
Cu rren t r at io=c u rren t ass ets /cu rren t liab ili t ies .
YE AR C
RRE NT R ATIO
2003-04 1 63
2004-05 1 57
2005-06 1 45
2006-07 1 56
2007-08 1 51
I n t erpre tat ion:
In MSS CL curre nt rat ios trend overall look l ike decrea sin g expect in
year2005-06.Curre nt rat io slightly decrea sin g shows due to c hanges in the
curre nt asset, it seem s like t hat compa ny do not have e noug h liquidity but
MSS CL is the seasonal industry so its lots of work ing cap ital look block in
operat ing cycle. A nd it good rat io as an seasonal industry.
200 3-04 2004 -05 200 5- 06 2006 -07 2007 -0
1.63
1 .57
1.45
1 .56
1.51
Current Ra t iCurrent Ratio
-
8/6/2019 Vaibhav Final Project[1]
36/47
36 | P a g e
Working capital turn over ratio:
Work ing cap ital turno ver r atio is r atio of sales to net work ing cap ital. It
is indicator of eff iciency of w ork ing cap ital manageme nt. Higher the r atio
gr eater is the eff iciency.
The w ork ing cap ital turno ver r atio has cons tantly incr eased f rom 1998 -
99 to till date. Th is is mainly due to incr eased sales and de lay in payme nt to
cr editors.
Work ing cap ital turn over r atio= net sales / ave r age w ork ing cap ital.
The turn over r atio f or the last 5 acc ounting pe r iods is as shown:
YEAR WORKING CAPITAL TURNOVER RATIO
2003-04 3.62
2004-05 3.83
2005-06 4.94
2006-07 3.90
2007-08 3.77
-
8/6/2019 Vaibhav Final Project[1]
37/47
37 | P a g e
3.623.83
4 .94
3.9 3.77
0
1
2
3
4
5
6
200 3.04 2004 .05 200 5. 06 2006 .07 2007 .08
W o rk in Ca pit a l Tu r no er Ra tio
-
8/6/2019 Vaibhav Final Project[1]
38/47
38 | P a g e
FINDINGS
On completion of the a nalysis and inter pr etation of the da ta it is
impor tant to r eview the va r ious as pec ts of my study of the w ork ing cap ital
ma nageme nt. Keep ing in view the va r ious o bser vations made the ma in f indings of the study a r e listed be low.
Ove r all analysis
1. A ma jor por tion of w ork ing cap ital compr ises of inventor y wh ich is
40.72%, f ollowed by loans & Adva nces at 27.14% and deb tors at
2.70%.
2. The w ork ing cap ital was 7648. 34 in the yea r 2007-08. Th is clear ly
gives a p ictur e that compa ny f inances its work ing cap ital f rom the
loans and adva nces and inventor y ava ilab le in the c ompa ny.
3. Compa nys curr ent r atio and quick r atio have shown a f luctuating tr end
f or the pe r iod under study.
4. Compa ny does not have a ny long- ter m deb ts. Its ma jor sour ce of
r aising fu nd is f rom issued subscr i bed & pa id up shar e cap ital and
r etain earning.
5. The cu rr ent assets f rom a lmost 94.75% of the total assets. The cu rr ent
r atio of the c ompa ny ha s decr eased a s compar ed to last year.
6. The p rof itability of the c ompa ny shows a f luctuating tr end through out
the pe r iod u nder study, bu t the r eturn of cap ital and investment ar e
high, this indica tes that ther e is mor e sco pe f or investment f rom
outsiders.
Inventory Management
7. Inventor y acc ounted f or the lar gest block of w ork ing cap ital in the
compa ny. On an ave r age, inventor y w ork ed out to 40.72% of cu rr ent assets.
8. The c ompu tation of turno ver r atios and ave r age pe r iod holding f or
Inventor y ha s s potlighted that the c ompa ny ha s a r apid turno ver of
stock.
-
8/6/2019 Vaibhav Final Project[1]
39/47
39 | P a g e
9. Closer analysis of inventor y shows that r aw ma ter ials shown a higher
per centage incr ease w ork ing out to mea n of 57.35%. Work in progr ess,
f inished g oods and stor es have shown decr easing tr ends throughout the
per iod under study.
Cash Management
10. Cash in the c ompa ny r epr esents cash in hand, r emittances in tr ansit,
deposits & cu rr ent acc ounts with schedu led ba nks and w ith other banks
in curr ent acc ounts. Out of this, ba nk balance w ith schedu led ba nks in
curr ent acc ount has most of the ca sh ba lance in the c ompa ny f ollowed
by r emittance in tr ansit.
11. The size of ca sh in the c ompa ny ha s shown a incr easing tr end. On
ave r age ca sh w ork ed out to 29.18% of the total curr ent assets.
12. It also indicates that ther e is eff icient cash ma nageme nt as cash is not
r ema ining idle and it is utilized f or the p rof itability of the bu siness.
Accounts Payable
13. The c omputation of turno ver r atios and ave r age payme nt per iod f or
cr editors has shown a good pe r f or mance a nd payme nt to cr editors is
made p romptly.
14. Closer analysis of c r editors shows that on the wh ole the total cr editors
have r egister ed a n incr ease throughout the pe r iod under study eve n
through ther e wa s 39.88% incr ease in cr editors in the cu rr ent year.
-
8/6/2019 Vaibhav Final Project[1]
40/47
40 | P a g e
SWO T ANALYSIS
Strength
1. Since last 3 decade s, MSS CL ha s ve r y g oo d r epu tation a nd
pe r f or ma nce in the Ma rk et of Maha r ashtr a.
2. The r e is Stron g w ing of the r esea r ch a nd deve lo pme nt in the
or ga niza tion
3. The p roduc t of MSS CL is so ld by its br and name .
4. W ell Ne twork of D istr i bu tion.
5. Tech nica l r esea r ch pe rsons in va r ious dime ns ions.
6. C or e c ons ume rs gro up a r e satisf ied .
7. Ti me ly a nd p ro pe r supp ly of the p roduc t.
8. W ide p roduc t r ange ie stron g p roduc t por tf olio
9. Fa r me r give s pr efe r ence to seed of Mahabee j compa ny due to its
r ea son ab le c os t.
Weaknesses
1. Ins uff icient supp ly of seed s at the time of sea son , ma ny time s due to
inade qua te supp ly of seed s f ro m Mahabee j, fa r me rs have to mo ve
on othe r seed s compa nies.
2. Ra te u nde r cu tt ing is mor e due to mor e no. incr ea sing dea lers
whe r ea s the a r ea r ema ins cons tant. so dea lers ge t less er ma r gins.
3. Lac k of app ro pr iate p olicy f or all ma r gins of dea lers.
4. Le ss no. of own plots, depe nde ncy on fa r me rs plot
5. Le ss dem ons tr ations to fa r me rs, so less awa r eness ab out compa ny
lead ing to less compe titive ness.
6. Lac k ing in goo d pub licity of its pro duc ts.
-
8/6/2019 Vaibhav Final Project[1]
41/47
41 | P a g e
7. Ins uff icient ince ntive s f or dea lers .
8. Lac k of ade qua te numbe r of tech nica l f ield staff .
9. Le ss Numbe r of f ield a ss istants.
10. Lac k of f ield w ork. 11. Poor distr i bu tors policy .
Opportunities
1) High ma rk et potential eno ugh sco pe f or expa ns ion due to br and
image .
2) Ar ea u nde r cro ps lik e so ybea n will incr ea se due to low in pu t cos t &
unava ilab ility of p r ev ious yea r seed s wh ich a r e ge ner all y of lo w
qua lity.
3) As agr icu lt ur al tech no logy adva nce s the r e w ill be need to incr ea se
r esea r ch a nd deve lo pme nt in so me va r ieties. r em oving ge r mination
comp laints .imp roving qua lity a s we ll as qua ntity of p roduc tion
4) Incr ea sing numbe r of samp le sowing p lots, dem o plots to ma k e
awa r e the fa r me rs ab out the va r iety a nd its qua lity by mu lt iloca tion
tr ials.
5) Imp ro ving p r esent status of sales pro m otion ac tivities and
adve r tising, g iving m or e empha s is on fa r me rs pa r tici pa tion in the
p o pu lar ity of va r iety.
6) Imp ro ving pac k ag ing to av oid ma l pr ac tice s lik e r em oving of seed s
by bad dea lers.
7) Sc r ee ning of r esea r ch va r ieties of Mahabee j and a r ea w ise
r ec omme nda tions.
8) As pe r the r es p on de nt fa r me rs sugge stions the r e is lar ge c ompe titive
sco pe f or Mahabee j compa ny to deve lo p m or e new ow n va r ieties
wh ich a r e suitab le to fa r me rs need s lik e b old va r iety, m or e r esistant
to ins ec ts, pe sts, disea ses, dwa r f & h igh y ielding va r ieties.
-
8/6/2019 Vaibhav Final Project[1]
42/47
42 | P a g e
T hreats
1) Ma ny time s cro p failur e due to poor clima tic c on ditions , lon g d r y
s pe ll s r ef lec t the sales of p ro duc t.
2) La r ge numbe rs of c ompe t itors and p r ice wa r be twee n them
f luc tua ting ma rk et pr ice s and g lut situa tion.
3) Incr ea sing ba r ga ining P owe r of buye rs.
4) High ma r gin provided by the c ompe titors f or the ir produc ts.
5) Br and name of state seed s cor p or ation (g ove rn me nt) misutilis ed by
othe r pr iva te c ompa nies.
6) Sh or tage of supp ly of seed s due to inade qua te p roduc tion.
7) Th r ea ts f ro m so me dea lers wh o r em ove some qua ntity of seed s
f ro m bag s and add so me othe r mixtur e so tha t fa r me rs tr ust on
compa ny ge ts distur bed .
-
8/6/2019 Vaibhav Final Project[1]
43/47
43 | P a g e
CONCLUSION
The ab ove o bser vation lead s to the c onclusion that ther e is pro per
ma nageme nt of w ork ing cap ital. Sur plus investments have bee n f ound ma inly
in inventor y. Finance to work ing cap ital is provided by way of loans andadva nces and c ompa ny is able to ma nage its work ing cap ital with these
adva nces and he nce ther e is no need of f inance f rom a ny other sour ces.
SUGGES T IONS
Keep ing in view the o bser vation r elating to the study, f ollowing
mea sur e a r e sugge sted wh ich w ould go a long way to improve the
ma nageme nt of w ork ing cap ital in MSS CL.
Acc ounts Rece ivab les
1. The c ollection per iod, wh ich is 60 day s on an ave r age, need to be
lower ed. This calls f or tightening of the c r edit policy.
Cash Ma nageme nt
2. Cash ba lance is showing incr easing tr end, ma nageme nt should a lso
ensur e that ther e is no scar city of fu nd of fu nds. The r e should be some
investment in shor t-ter m secur ity to mee t the eme r gency ca shr equir eme nts.
3. Curr ent and quick r atio of the c ompa ny is also decr easing, eff or ts
should be made to r educe liab ilities curr ent and quick r atio at least 1:1
or gr eater.
4. Eff or ts should be tak en to maintain the ca sh a nd ba nk ba lance a t higher
leve l, to ensur e that ther e should not be a ny shor tage of fu nd a t the
time of eme r gency.
-
8/6/2019 Vaibhav Final Project[1]
44/47
44 | P a g e
PROFI T AND LOSS ACCOUN T (In lacs Rs)
Perticulars 2007-08 2006-07 2005-06 2004-05 2003-04
S es 28814.7 8 244 56.82 22 503 210 36.72 1872 8.22 Oth e Inc e 774. 34 702. 5 930.7 3 940. 53 349.66 Inc e se in Sto ck 3622.79 -19. 88 -1000 -780.59 2272.12
Total Income 33211.91 25139.44 22433.73 21196.66 21350
Pur cha ses 26 523.86 19121.66 17276.91 164 51.83 16 867.01 Con sumption of Pro c.Mat erial
12 50.6 5 124 8.67 1389.27 109 5.26 10 59.56
Pro cess ing Exp enses 1216.7 8 12 87.7 8 1166.24 962. 83 755 .46
Salary & Allowan ces 167 8.22 14 57.80 1387.70 12 56.6 3 1191. 89 Selling & Di stributionExpenses
794.96 813.86 894.1 8 597. 55 469.76
Int eres t & Ban k Charg es 68.16 66.67 95.72 177.49 78.25 Admin. & Oth erExpenses
356.59 345.63 377.04 369.9 5 40 3.86
Pro vision for doudbtfuldebt s
35 .00 75.00 0.00 0.00 0.00
Remission of Sub sidy 0.00 0.00 0.00 0.00 190.9 5 Depr ec iation 130.12 14 5.84 164.92 181.1 3 20 3.46
Total Expenses 32054.34 24562.91 22752.00 21092.67 21220.20
Profit/(Loss) Beforetaxation
1157.57 576.53 -318.25 103.99 129.80
Provision for taxation -470.00 -161.28 0.00 -8.52 -49.73 Fringe Benefit Tax -9.77 -13.02 -13.84 0.00 0.00 Deferred TaxAsset/Liability -33.58 10.56 63.90 -18.39 4.46
Profit After Taxation 644.22 412.79 -268.19 77.08 84.53
-
8/6/2019 Vaibhav Final Project[1]
45/47
-
8/6/2019 Vaibhav Final Project[1]
46/47
46 | P a g e
SHEDULE OF CURREN T LIABILI T IES
2007-08 2006-07 2005-06 2004-05 2003-04
A. CURRENT
LIABILITIES
Sundry Creditors
For Seeds 1971.72 1235.68 1188.64 1287.37 1373.57
For Supplies &Expenses 473.72 538.58 487.13 539.91 440.94
For Others 3167.99 2238.75 2090.34 2263.92 2078.39
Unclaimed Dividend 2.88 5.73 8.64 10.77 10.77
Advance Receivedfrom Customers 5736.72 3732.94 3799.71 4863.08 3612.4
Sprinkler Advance
(Govt of Mah.Rs.59.21 Cr) 1875.83 1875.84 1864.05 0 0
Sprinkler Advance(Govt of Mah.Rs.24.05 Cr)
512.50 606.59 0 0 0
Sub-total : CurrentLiability 13741.36 10234.11 9438.51 8965.05 7516.07
B PROVISIONS
For Earn LeaveEncashment 853.84 728.50 638.18 538.52 449.5
For Taxation 470.00 161.28 0 8.52 49.73
For Group Gratuity 64.58 55.29 100.48 72.23 211.17
Sub-total :Provisions 1388.42 945.07 738.66 619.27 710.40
Grand Total : 15129.78 11179.18 10177.17 9584.32 8226.47
-
8/6/2019 Vaibhav Final Project[1]
47/47
BIBLIOGRAPHY
y Annual Report of MSSCL
y Financial Management Khan & Jain
y Financial Management Dr. N. M. Venchalekar
y Financial Management I. M. P andey
y Expert Review
WEBLIOGRAPHY
y www.mahabeej.com
y WWW.WICKI P EDIA.COM