Professional Documents
Culture Documents
CHAPTER 1
Page 1
INTRODCUTION
INTRODUCTION ABOUT FINANCIAL MANAGEMENT
Financial management means planning, organizing, directing and controlling the
financial activities such as procurement and utilization of funds of the enterprise. It
means applying general management principles to financial resources of the
enterprise.
Financial management is that specialized activity which is responsible of the business
and, therefore, it includes financial planning, financial administration and financial
control.
Business concern needs finance to meet their requirements in the economic world.
Any kind of business activity depends on the finance. Hence, it is called as lifeblood
of business organization. Whether the business concerns are big or small, they need
finance to fulfil their business activities.
In the modern world, all the activities are concerned with the economic activities and
very particular to earning profit through any venture or activities. The entire business
activities are directly related with making profit. (According to the economics concept
of factors of production, rent given to landlord, wage given to labour, interest given to
capital and profit given to shareholders or proprietors), a business concern needs
finance to meet all the requirements. Hence finance may be called as capital,
investment, fund etc., but each term is having different meanings and unique
characters. Increasing the profit is the main aim of any kind of economic activity.
MEANING OF FINANCE
Finance may be defined as the art and science of managing money. It includes
financial service and financial instruments. Finance also is referred as the provision of
money at the time when it is needed. Finance function is the procurement of funds and
their effective utilization in business concerns.
The concept of finance includes capital, funds, money, and amount. But each word is
having unique meaning. Studying and understanding the concept of finance become
an important part of the business concern.
Sumourya institute of managment
Page 2
Page 3
Page 4
the
Business
or
Finance,
which
Individual,
Firms,
Corporate
Financial
activities
meet
to
the
requirements.
Page 5
Page 6
Profit Maximization
Main aim of any kind of economic activity is earning profit. A business concern is
also functioning mainly for the purpose of earning profit. Profit is the measuring
techniques to understand the business efficiency of the concern. Profit maximization
is also the traditional and narrow approach, which aims at, maximizes the profit of the
concern. Profit maximization consists of the following important features.
1. Profit maximization is also called as cashing per share maximization. It leads to
maximize the business operation for profit maximization.
2. Ultimate aim of the business concern is earning profit, hence, it considers all the
possible ways to increase the profitability of the concern.
3. Profit is the parameter of measuring the efficiency of the business concern. So it
shows the entire position of the business concern.
4. Profit maximization objectives help to reduce the risk of the business.
Favourable Arguments for Profit Maximization
The following important points are in support of the profit maximization objectives of
the business concern:
(i) Main aim is earning profit.
(ii) Profit is the parameter of the business operation.
(iii) Profit reduces risk of the business concern.
(iv) Profit is the main source of finance.
(v) Profitability meets the social needs also.
Page 7
Page 8
Page 9
Page 10
Page 11
Page 12
Page 13
Scope/elements:
1. Investment decisions includes investment in fixed assets (called as capital
budgeting). Investment in current assets is also a part of investment decisions
called as working capital decisions.
2. Financial decisions-they relate to the raising of finance from various resources
which will depend upon decision on type of source, period of financing, cost
of financing and the returns thereby...
3. Dividend decision- The finance manager has to take decision with regards to
the net profit distribution. Net profits are generally divided into two:
a) Dividend for shareholders- Dividend and the rate of it has to e decided.
Retained profits-Amount of retained profits has to be finalized which will depend
upon expansion and diversification plans of the enterprise
Page 14
Page 15
Page 16
Page 17
RESEARCH DESIGN
RESEARCH DESIGN
Research was initiated by examining the secondary data to gain insight
into the problem. By analyzing the secondary data the study aim is to explore the
short comings of the present system and primary data will help to validate the analysis
of secondary data besides on unrevealing the areas which calls for improvement.
RESEARCH METHODOLOGY
The study is based on primary and secondary data. The secondary data are
those which have already been collected by someone else and which have already
been passed through the statistical process
Page 18
LIMITATIONS OF STUDY
Potential for increasing the vertical concentration in existing villages.
High level of client drop out leading to high average member promotion
costs.
Lack of adequate levels of awareness amongst member on equity and
saving withdrawal issue.
Marginally increasing tendency for absenteeism in group meeting
Low capital adequacy.
Secondary data collection from internet and magazines.
Cross-section data will be collected pertaining to previous accounting
years.
Future trends may change. No forecasting is done due to non availability of data for
time series analysis
Page 19
CHAPTER 2
INDUSTRY PROFILE
Page 20
INDUSTRY PROFILE
INTRODUCTION:
Co-operatives include non-profit community organization and business that
are owned and managed by the people who use its services _a consumer cooperative)
or by the people who work there (a worker cooperative) or by the people who live
there (a housing cooperative), hybrids such as worker cooperatives that are also
consumer cooperative or credit unions, multi-stakeholder cooperatives such as those
that bring together civil society and local actors to deliver community needs, and
second and third tier cooperatives whose members are other cooperatives.
Cooperative is an autonomous association of persons who voluntarily
cooperate for their mutual, social, economic, and cultural benefit.
Cooperation dates back as far as human beings have been organizing for
mutual benefits and trading with the external communities.
In the final year of the 20th century, cooperatives banded together to establish a
number of social enterprise agencies which have moved to adopt the multistakeholder cooperative model
Capital and the trap report that cooperatives tend to have a longer life then
other types of enterprise, and thus a higher level of entrepreneurial sustainability.
For each Industrial cooperative have been organized with two objectives
namely social and economic upliftment of the people below the poverty line. The
most important social objective is to safeguard the interest of the poorest section
against exploitative trends and to pave way for diffusions and dispersal of wealth. The
economic objectives of these societies are to create employment opportunities for the
people by increasing the production and productivity of the units and to inculcate
capability and acceleration in the field of Trade and Industries.
Industrial Cooperatives, a wing of the Department of Industries and Commerce, plays
a vital role
In providing gainful employment to the people in general and women
in particular through production type Industrial Cooperative Societies.
Page 21
Deputy
Deputy Director
Asst. Director
Asst. Director of
Director (IC)
(IC) Marketing
(IC) (Coir)
General ICE
(Costing Cell)
Section
Asst. director
Asst. Director of
Asst. Director
(IC)
Industries and
(IC) Marketing
Marketing
Commerce (IC)
(Matches)
ICS
ICB / ICA
ICM
ICF ICN ICC / ICH
Organization chart in respect of Industrial Cooperative Wing at the Districts.
Sumourya institute of managment
C CELL
Page 22
virudhunagar)
Special Officer
Any Indian, above 18 years of age with sound mind can become a
member of the society
Apex IndI.Coop>society is Rs.800/(G.O.Ms.No. 147 /Coop. Food and consumer protection Department
dt.17.5.2002)
Period stipulated:
Sumourya institute of managment
Page 23
1) To register a society; Within a period of one hundred and twenty days from
the date of receipt of application
2) To refuse registration ; Within a period of 120 days from the date of receipt
of application
3) Admission as a member Within sixty days from the date of to a society
receipt of application
4) Expulsion any member can be expelled with resolution of the G.B.after
giving opportunity to the member
5) Period within witch a Within a period of three months from society shall
commence working the date of its registration
6) Period within which to be registered Within 120 days amendment of bylaw
7) Preferring appeal u/s 152 (3) within 60 days from the date of communication
of the order.
8) Preferring revision U/S 153(1) Within 90 days from the date of
communication of the order
9) Winding up affairs of the society
a) if the society not commenced working within one year
b) Ceased to work, cessation of primary activity for at least 2 years.
Page 24
Beginnings
The cooperative society began in Europe in the 19th century, primarily in
Britain and France, although The Shore Porters Society claims to be one of the
worlds first cooperatives, being established in Aberdeen in 1498 (although it has
since Demutualized to become a private partnership). The industrial revolution and
the increasing mechanization of the economy transformed society and threatened the
livelihoods of many workers. The concurrent labour and social movements and the
issues they attempted to address describe the climate at the time.
Page 25
Page 26
CHAPTER 3
ORGANIZATIONAL PROFILE
Page 27
Organizational Background:
Shriram Raghavendra Thrift and Credit Mutually Aided Cooperative Society
Limited (Shriram raghavendra MACS)-registered under the 1995 MACS act of
Andhra Pradesh Government- was set up in April 2010 to provide timely and
superior financial services and support to rural and poor promoters of a leading
MFL in India-Society for Helping, A wakening of rural poor through Education
(SHERE), kurnool-with the aim of promoting a financial institution totally owned
and managed by employees.
At present Shriram raghavendra MACS, which is focused only on microfinance
activities, has a six-member board consisting of one woman members of the MACS
and two other members shareholder members from each ranch on their board.
MICROFINANCE OPERATIONS:
Background of microfinance operations
Shriram raghavendra MACS started its credit program with the investment of
Rs 20.00.000 in 2010, with the clear objective of providing high quality financial
services to the rural poor people.
It was presently working in 10 districts in Andhra Pradesh and has an outreach
of 210 members in its microfinance program.
Page 28
1. Loans to Co-op
Members
Lending Institutions
Shriram Raghavendra
MACS
1. Loans to
Members
2. Savings of Co-op
Members
Products:
1. Savings products:
Shriram MACS groups start regular weekly savings from the day of
formation, the amount being pre-decided y the S R MACS management. At present,
each member savings Rs10 per week in all S R MACS centers these savings are
compulsory and are deposited as personal savings that are used by S R MACS for its
leading activities S R MACS pays an interest of 6% on the savings.
2. Lone products:
S R MACS offers several loans products to its members. The loan products is
the general lone that is provided soon after initiation of group activity. This lone
varies in size from cycle starting with Rs 6000 and increasing y Rs 1000 with every
subsequent cycle subject to a cap of Rs 9000. This lone is repayable in 50 weekly
installments and carries an interest rate of Rs 20% flat for this period.
Page 29
Managerial aspects:
S R MACS exhibits an excellent performance on managerial factors with a
grade of +. This is the same as the previous assessment and reflects the consistently
high levels of managerial and systemic strengths that the organization posses.
Infrastructure
Financial performance:
Financial performance grade of S R MACS is good at -. This reflects a
decline from the previous grade of +.The risk assessment of S R Macs on financial
performance can increase significantly.
Mobilization of funds
Page 30
BOARD OF DIRECTORS:
Directors
Chairman
Names
O.Prabhakar reddy
K.Muralidhar rao
K.V.Ram Mohan reddy
Director
Manager
P.Vekatanatha reddy
Employees in marketing
Four members
Employees in staff
Five members
Other employees
Thirteen members
Page 31
Growth fund
Potential return
index fund
Balanced fund
Risk
Page 32
FUNCTIONAL DEPARTMENTS
MARKETING DEPARTMENT
Traditionally, insurance products have been promoted and sold principally through
agency systems in most countries. With new developments in consumer behaviour,
evolution of technology and deregulation, new distribution channels have been
developed successfully and rapidly in recent years.
Shriram Raghavendra make use of various distribution channels:
Career Agents
Advertisements
Direct Response
Internet
Page 33
FINANCE DEPARTMENTS
Something must be direct the how of economic activity and facilities its
smooth operation. Finance is the agent that produces this result. Nature of financial
management refers to its functions, scope and objectives.
Financial management is that managerial activity which is concerned with the
planning and controlling of the firms financial resources. In modern times finance is
the life-blood of the business. No matter, whether the business is big or small
financial is the equally important. The financial resources must proper planned and
control in order to achieve the best out of available. So, financial resources should be
very properly
Generally, financial planning means deciding in advance, the financial
activities are to be carried on to achieve the objective of the firm. In broader sance,
in the words of Walker and Boughn as; financial planning includes the determination
of firms financial objectives, formulating and promulgating financial polices and
developing and procedures.
Financial planning is necessary to achieve both long term and short term
objectives. A sound financial planning includes how much need of funds for both the
terms. Then from where they are to be received and utilized.
Shriram life would evaluated different proposal placed before them and selects
the best out of them. It estimates how much capital is going to be required for various
proposals and how much is the return on the capital employed. The financial manager
lays down the estimate on the capital of cash per week, per month and per year.
CAPITALIZATION
At the time of incorporation of any business, it is the first problem before the
promoters to decide how much capitalization should be made in a business. The
amount of capital of any time should not exceed nor less than the amount required.
So, it is necessary to have proper capitalization for the success of the enterprise. But
Gerstenberg defines it as;
Sumourya institute of managment
Page 34
Page 35
CHAPTER 3
THEORETICAL FRAME WORK
Page 36
Identity:
Cooperatives are typically based on the cooperative values of self-help, selfresponsibility, democracy and equality, equity and solidarity and the seven
cooperative principles:
Voluntary and open membership
Democratic member control
Economic participation by members
Autonomy and independence
Education, training and information
Cooperation among cooperatives
Concern for community
Page 37
Page 38
Page 39
Women in cooperatives:
Since cooperatives are based on values like self-help, democracy, equality, equity, and
solidarity, they can play a particularly strong role in empowering women, especially
in developing countries. Cooperative allows women who might have been isolated
and working individually to and together and create economies of scale as well as
increase their own bargaining power in the market.
Page 40
Professional management.
Diversification
Convenient administration
Return potential
Low cost
Liquidity
Transparency
Flexibility
Choice of schemes
Tax benefits
Well regulated
RETURN
INVESTMENT
SECURITIES
FUND MANAGER
Page 41
Page 42
CHAPTER 4
DATA ANALYSIS
&
INTERPRETATION
Page 43
YEARS
DEPOSITS
2008-09
4.76
2009-08
5.80
2010-11
6.05
2011-12
7.41
2012-13
10.07
Loans
2.60
7.36
3.40
9.2
4.73
10.78
5.22
12.63
6.24
16.31
YEARS
DEPOSITS(Y)
XY
X2
2008-09
-2
4.76
-9.52
2009-10
-1
5.80
-5.80
2010-11
6.05
2011-12
7.41
7.41
2012-13
10.07
20.14
TOTAL
X=0
Y=34.09
XY=12.23
X2=10
Page 44
Page 45
Deposits
12
10.07
10
8
6
7.41
5.8
6.05
2009-10
2010-11
DEPOSITS(Y)
4.76
4
2
0
2008-09
2011-12
2012-13
Interpretation:
From the above tables and charts, it has been observed that there is a substantial
increase in the deposits lent by Shriram Raghavendra MACS to the co-operative
society in Kurnool in last FIVE years.
The trend line shows that there is a positive trend of increase in the deposits of
Shriram Raghavendra MACS.
Page 46
LOANS
2.60
2009-10
3.40
2010-11
4.73
2011-12
5.22
2012-13
6.24
Loans(y)
xy
X2
2008-09
2009-10
2010-11
2011-12
2012-13
Total
-2
-1
0
1
2
0
2.60
3.40
4.73
5.22
6.24
22.19
-5.20
-3.40
0
5.22
12.48
9.1
4
1
0
1
4
10
Page 47
y = Na +b x
22.19 = 5(a) + b (0)
22.19 = 5a
5a = 22.19
a = 22.19 / 5
a = 4.438
2. xy = a x + b x2
9.1 = a(0) + b (10)
9.1 = 10b
10b = 9.1
b = 9.1 / 10
b = 0.91
Page 48
LOANS
7
6.24
6
5.22
4.73
5
4
3
Loans(y)
3.4
2.6
2
1
0
2008-09
2009-10
2010-11
2011-12
2012-13
Interpretation:
From the above tables and charts, it has been observed that there is a substantial
increase in the loans lent by Shriram Raghavendra MACS to the co-operative society
in Kurnool in last five years.
The trend line shows that there is a positive trend of increase in the loans of Shriram
Raghavendra MACS.
Page 49
Table
YEARS
the
LOANS&DEPOSITS
7.36
2008-09
&
total
9.2
2009-10
shows
loans
10.78
2010-11
12.63
2011-12
16.31
2012-13
2008-09
-2
2009-10
Loans
xy
X2
7.36
-14.72
-1
9.2
-9.2
2010-11
10.78
2011-12
12.63
12.63
deposits
Page 50
16.31
32.62
Total
56.28
21.33
10
Page 51
Page 52
16.31
16
14
12.63
12
10.78
10
8
Loans deposits
9.2
7.36
6
4
2
0
2008-09
2009-10
2010-11
2011-12
2012-13
Interpretation:
From the above tables and charts, it has been observed that there is a
substantial increase in the deposits and loans lent by Shriram Raghavendra MACS to
the co-operative society in Kurnool in last five years.
The trend line shows that there is a positive trend of increase in the deposits
and loans of Shriram Raghavendra MACS.
Page 53
CHAPTER 5
FINDINGS
SUGGESTIONS
CONCLUSION
Page 54
FINDINGS
Ethical and transparent dealings
Efficient research practices
Shriram Raghavendra MACS has shown rapid as well as consistent growth
in many of its schemes
Shriram Raghavendra MACS has expended its boundaries by its
innovative approach towards research, efficient service quality and share
dedication
Shriram Raghavendra MACS has reached this position due to the efforts
of the marketing and sales team
Shriram Raghavendra MACS offers the clients with the best schemes
which get them the maximum returns and help them y telling them when
to invest in the right type of fund
Due to the outstanding performance Shriram Raghavendra MACS has
been ranked in the top positions by the value research
Page 55
SUGGESTIONS
It is a good way to get involved in this market is by putting your toes in
water.
.
The participant has to keep higher margin of safety to ensure transaction
happening without any losses.
How ever these instrument acts as a powerful instrument for knowledge
traders to expose them to the properly calculated and well understood risk in
pursuit of reward i.e. profit.
To improve the awareness of the company various schemes to the investors
with latest technological schemes.
The company should attract more professionals and businessmen as they are
considered to be high net worth individuals.
Create value through customer care services
Make service encounter more informative as word of mouth plays a crucial
role.
The fund should come up with more attractive scheme which would benefits
the investor then just giving them high returns. The fund should also maintain
their existing schemes performance even though it comes out with new
schemes which create confidence to the existing customers.
Page 56
Page 57
CONCLUSION
Horizontal concentration in microfinance programme.Strong emphasis on
credit disciplines Ability to draw on the experience of SHARE in terms of senior
manager and also lessons from the field. Stable and qualified staff resources.
Reasonably strong and disciplined groups. Strong internal, financial control and
planning systems. Strong accounting system. Strong system for tracking overdoes.
Good infrastructure base. Good savings mobilization. Strong performance on
profitability. Excellent portfolio quality. Reasonably diversified portfolio.
The company is going on increasing there profit and decreases the risk to the
costumer for their deposits and loans.
Page 58
BIBLIOGRAPHY
BOOKS:
OUT LOOK MONEY
THE HINDU BUSINESS LINE
BUSINESS WORLD
MONEY TODEY
WBE SITES:
www.moneycontrol.com
www.co-operativesociety.com
www.indianco-operative.com
Page 59
ANNEXURE
Balance sheet as on 31.03.2009
Shriram Raghavendra MACS Ltd., knl.
Capital and Liabilities
Amount
paid up share capital
Add profit B/F from P&L a/c
4,260,900.00
340,100.00
4,601,000.00
OTHER LIABILITIES
Loans from recurring deposits
Loans from fixed deposits
Interest payable on FD`S
Karnataka bank O D A/C
Total
1,420,000.00
40,766,700.00
870,414.00
1,517,450
_____________
49,175,564.00
____________
Assets
Cash on hand
Bank balance
Fixed deposit in ing visya bank
Fixed deposits in Karnataka Bank
Chit investments
Loans advances
Furniture & fixtures
Rent advanced
Directors advances
Computers
Interest receivables on ING FD`S
Member advance
Advance for asset purchases
Advance for chit investment SECAD.br.
TOTAL
549,560.00
2,065,600.00
540,780.00
2,400,000.00
10,315,000.00
26,075,450.00
104,500.00
72,000.00
50,000.00
105,674.00
37,000.00
860,000.00
3,407,550.00
2,592,450.00
______________
49,175,564.00
_______________
Page 60
4,575,000.00
425,000.00
5,000,000.00
OTHER LIABILITIES
Loans from recurring deposits
Loans from fixed deposits
Interest payable on FD`S
Karnataka bank O D A/C
Total
1,645,000.00
50,807,350.00
1,085,650.00
1,285,690.00
_____________
59,823,690.00
____________
Assets
Cash on hand
Bank balance
Fixed deposit in ing visya bank
Fixed deposits in Karnataka Bank
Chit investments
Loans advances
Furniture & fixtures
Rent advanced
Directors advances
Computers
Interest receivables on ING FD`S
Member advance
Advance for asset purchases
Advance for chit investment SECAD.br.
TOTAL
694,690.00
2,639,000.00
594,000.00
2,500,000.00
10,460,000.00
34,036,000.00
104,500.00
72,000.00
50,000.00
118,000.00
40,000.00
1,215,000.00
4,600,500.00
2,700,000.00
______________
59,823,690.00
_______________
Page 61
Amount
4,715,700.00
(532,522.09)
4,183,177.91
OTHER LIABILITIES
Loans from recurring deposits
1,831,100.00
60,557,695.00
1,142,314.00
2,216,525.00
____________
Total
69,912,811.91
____________
Assets
Cash on hand
797,331.00
Bank balance
2,861,601.05
600,000.00
2,500,000.00
Chit investments
10,516,847.00
Loans advances
47,315,242.00
3,000,000.00
104,500.00
Rent advanced
72,000.00
Directors advances
50,000.00
700,000.00
Computers
118,000.00
Members advance
Interest receivables on ING FD`S
1,235,173.00
42,117.86
_____________
TOTAL
Sumourya institute of managment
69,912,811.91
Page 62
Page 63
Page 64