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SHRIRAM RAGHAVENDRA MACS

CHAPTER 1

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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.
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DEFINITION OF FINANCE
According to Khan and Jain, Finance is the art and science of managing money
According to Oxford dictionary, the word finance connotes management of money.
Websters Ninth New Collegiate Dictionary defines finance as the Science on study
of the management of funds and the management of fund as the system that includes
the circulation of money, the granting of credit, the making of investments, and the
provision of banking facilities.
DEFINITION OF BUSINESS FINANCE
According to the Wheeler, Business finance is that business activity which concerns
with the acquisition and conversation of capital funds in meeting financial needs and
overall objectives of a business enterprise.
According to the Guthumann and Dougall, Business finance can broadly be defined
as the activity concerned with planning, raising, controlling, administering of the
funds used in the business.
In the words of Parhter and Wert, Business finance deals primarily with raising,
administering and disbursing funds by privately owned business units operating in
nonfinancial fields of industry.
Corporate finance is concerned with budgeting, financial forecasting, cash
management, credit administration, investment analysis and fund procurement of the
business concern and the business concern needs to adopt modern technology and
application suitable to the global environment.
According to the Encyclopedia of Social Sciences, Corporation finance deals with
the financial problems of corporate enterprises. These problems include the financial
aspects of the promotion of new enterprises and their administration during early
development, the accounting problems connected with the distinction between capital
and income, the administrative questions created by growth and expansion, and
finally, the financial adjustments required for the bolstering up or rehabilitation of a
corporation which has come into financial difficulties.

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TYPES OF FINANCE
Finance is one of the important and integral part of business concerns, hence, it plays
a major role in every part of the business activities. It is used in all the area of the
activities under the different names.
Finance can be classified into two major parts:
Types of Finance
Private
includes

the

Business

or

Finance,

which

Individual,

Firms,

Corporate

Financial

activities
meet

to
the

requirements.

Public Finance which concerns with revenue and disbursement of Government


such as Central Government, State Government and Semi-Government
Financial matters.

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DEFINITION OF FINANCIAL MANAGEMENT


Financial management is an integral part of overall management. It is concerned with
the duties of the financial managers in the business firm.
The term financial management has been defined by Solomon, It is concerned with
the efficient use of an important economic resource namely, capital funds.
The most popular and acceptable definition of financial management as given by S.C.
Kuchal is that Financial Management deals with procurement of funds and their
effective utilization in the business.
Howard and Upton : Financial management as an application of general managerial
principles to the area of financial decision-making.
Weston and Brigham : Financial management is an area of financial decisionmaking, harmonizing individual motives and enterprise goals.
Joshep and Massie : Financial management is the operational activity of a business
that is responsible for obtaining and effectively utilizing the funds necessary for
efficient operations.
Thus, Financial Management is mainly concerned with the effective funds
management in the business. In simple words, Financial Management as practiced by
business firms can be called as Corporation Finance or Business Finance.
OBJECTIVES OF FINANCIAL MANAGEMENT
Effective procurement and efficient use of finance lead to proper utilization of the
finance by the business concern. It is the essential part of the financial manager.
Hence, the financial manager must determine the basic objectives of the financial
management. Objectives of Financial Management may be broadly divided into two
parts such as:
1. Profit maximization
2. Wealth maximization.

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Objectives of Financial Management

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.

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Unfavorable Arguments for Profit Maximization
The following important points are against the objectives of profit maximization:
(i) Profit maximization leads to exploiting workers and consumers.
(ii) Profit maximization creates immoral practices such as corrupt practice, unfair
trade practice, etc.
(iii) Profit maximization objectives leads to inequalities among the sake holders such
as customers, suppliers, public shareholders, etc.
Drawbacks of Profit Maximization
Profit maximization objective consists of certain drawback also:
(i) It is vague: In this objective, profit is not defined precisely or correctly. It creates
some unnecessary opinion regarding earning habits of the business concern.
(ii) It ignores the time value of money: Profit maximization does not consider the
time value of money or the net present value of the cash inflow. It leads certain
differences between the actual cash inflow and net present cash flow during a
particular period.
(iii) It ignores risk: Profit maximization does not consider risk of the business
concern. Risks may be internal or external which will affect the overall operation of
the business concern.
Wealth Maximization
Wealth maximization is one of the modern approaches, which involves latest
innovations and improvements in the field of the business concern. The term wealth
means shareholder wealth or the wealth of the persons those who are involved in the
business concern. Wealth maximization is also known as value maximization or net
present worth maximization. This objective is an universally accepted concept in the
field of business.
Favourable Arguments for Wealth Maximization
(i) Wealth maximization is superior to the profit maximization because the main aim
of the business concern under this concept is to improve the value or wealth of the
shareholders.

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(ii) Wealth maximization considers the comparison of the value to cost associated
with the business concern. Total value detected from the total cost incurred for the
business operation. It provides extract value of the business concern.
(iii) Wealth maximization considers both time and risk of the business concern.
(iv) Wealth maximization provides efficient allocation of resources.
(v) It ensures the economic interest of the society.
Unfavourable Arguments for Wealth Maximization
(i) Wealth maximization leads to prescriptive idea of the business concern but it may
not be suitable to present day business activities.
(ii) Wealth maximization is nothing, it is also profit maximization, it is the indirect
name of the profit maximization.
(iii) Wealth maximization creates ownership-management controversy.
(iv) Management alone enjoy certain benefits.
(v) The ultimate aim of the wealth maximization objectives is to maximize the profit.
(vi) Wealth maximization can be activated only with the help of the profitable position
of the business concern.
APPROACHES TO FINANCIAL MANAGEMENT
Financial management approach measures the scope of the financial management in
various fields, which include the essential part of the finance. Financial management
is not a revolutionary concept but an evolutionary. The definition and scope of
financial management has been changed from one period to another period and
applied various innovations. Theoretical points of view, financial management
approach may be broadly divided into two major parts.

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Traditional Approach
Traditional approach is the initial stage of financial management, which was followed,
in the early part of during the year 1920 to 1950. This approach is based on the past
experience and the traditionally accepted methods. Main part of the traditional
approach is rising of funds for the business concern. Traditional approach consists of
the following important area.
Arrangement of funds from lending body.
Arrangement of funds through various financial instruments.
Finding out the various sources of funds.

Objectives of financial management;


The financial management is generally concerned with procurement, allocation and
control of financial resources of a concern. The objectives can be1) To ensure regular and adequate supply of funds to the concern.
2) To ensure adequate returns to the shareholders which will depend upon the
earning capacity, market price of the share, expectations of the shareholders?
3) To ensure optimum funds utilization. Once the funds are procured, they should
be utilized in maximum possible way at lest cost.
4) To ensure safety on investment, i.e., funds should be invested in safe ventures
so that adequate rate of return can e achieved.
To plan a sound capital structure-There should e sound and fair composition of capital
so that a balance is maintained between debt and equity capital.

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FUNCTIONS OF FINANCE MANAGER
Finance function is one of the major parts of business organization, which involves
the permanent, and continuous process of the business concern. Finance is one of the
interrelated functions which deal with personal function, marketing function,
production function and research and development activities of the business concern.
At present, every business concern concentrates more on the field of finance because,
it is a very emerging part which reflects the entire operational and profit ability
position of the concern. Deciding the proper financial function is the essential and
ultimate goal of the business organization. Finance manager is one of the important
role players in the field of finance function. He must have entire knowledge in the
area of accounting, finance, economics and management. His position is highly
critical and analytical to solve various problems related to finance. A person who
deals finance related activities may be called finance manager.
Finance manager performs the following major functions:
1. Forecasting Financial Requirements
It is the primary function of the Finance Manager. He is responsible to estimate the
financial requirement of the business concern. He should estimate, how much
finances required to acquire fixed assets and forecast the amount needed to meet the
working capital requirements in future.
2. Acquiring Necessary Capital
After deciding the financial requirement, the finance manager should concentrate how
the finance is mobilized and where it will be available. It is also highly critical in
nature.
3. Investment Decision
The finance manager must carefully select best investment alternatives and consider
the reasonable and stable return from the investment. He must be well versedin the
field of capital budgeting techniques to determine the effective utilization of
investment. The finance manager must concentrate to principles of safety, liquidity
and profitability while investing capital.
4. Cash Management
Present days cash management plays a major role in the area of finance because
proper cash management is not only essential for effective utilization of cash but it
also helps to meet the short-term liquidity position of the concern.
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5. Interrelation with Other Departments
Finance manager deals with various functional departments such as marketing,
production, personel, system, research, development, etc. Finance manager should
have sound knowledge not only in finance related area but also well versed in other
areas. He must maintain a good relationship with all the functional departments of the
business organization..

Functions of financial management:


Estimation of capital requirements
Determination of capital composition
Choice of sources of funds
Investment of funds
Disposal of surplus
Management of cash
Financial controls

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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

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OBJECTIVES OF THE STUDY


To understand about the cooperative society in the market
To study how does a cooperative society creates the risk or position
To study different sources of finance available with the firm for its operations
To know the total value of the firm
To compare one fund to another funds within the cooperative society of
Shriram raghavendra MACS
To gain a practical experience in the industry and to understand their work
culture

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NEED FOR THE STUDY


Knowing the relationship between capital structure and value of a firm
To analyze the reason for low stock prices of the company
Studying relationship between Deposits and loans
To assess the impact of alternative plans on return on equity
It creates a large extent towards development economy of the nation
Interest paid is tax deductible, which lowers debts effective cost

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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.

COLLECTION OF THE DATA


PRIMARY DATA
The information gather from the organization is said to be as primary data in
the study, which shows that they were the main source of Primary data.
SECONDARY DATA
It was collected from internal sources. The secondary data was collected on
the basis of organizational file, official records, manuals, newspapers, magazines,
management books, preserved information from the company or its website.

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

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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

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CHAPTER 2
INDUSTRY PROFILE

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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.

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In eliminating the exploitation of workers by middlemen through labor
contract cooperative societies.
In arranging for market for the products of rural artisans through
Handicrafts Cooperative Societies.
In providing infrastructural facilities including developed industrial
sites or sheds to the small scale and tiny sector entrepreneurs through
Industrial Cooperative Estate.
In nutshell Industrial Cooperative Societies ensure marketing of the finished products
of the members, advantages of large scale economics to the members and mutual help
among the members with cardinal principal.
ORGANISATION CHART IN RESPECT OF INDUSTRIAL COOPERATIVE
WING AT THE OFFICE OF THE INDUSTRIES COMMISSIONER AND
DIRECTOR OF INDUTRIES AND COMMERCE
Industries commissioner & Director of industries & Commerce

Additional Commissioner of Industries and commerce;

Joint Director of Industries and Commerce


(Coir & Industrial cooperatives)

Deputy

Deputy Director

Asst. Director

Asst. Director of

Director (IC)

(IC) Marketing

(IC) (Coir)

ind & Commerce

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.
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Joint Director (Tea) Connor

Deputy Director (Chennai/

Special Officers / Managing Directors

virudhunagar)
Special Officer

To start an Industrial Cooperative society:


General Manager
District Industrial Centre
(In the Districts other than Chennai and Nilgiris)
In NilgirisThe J.D. (IC) (Tea), Church Road,
Coonoor.
In Chennai_
The D.D. (IC)
CTAL Building Guindy
Chennai-32
Procedures:

To present the scheme / project to the District Officer

Any Indian, above 18 years of age with sound mind can become a
member of the society

There should be a minimum of 25 members to from a society with a


common objective

Fees for registering a primary IndI.Coop. society is Rs.200/- a central


IndI.Coop.society is Rs.400/-

Apex IndI.Coop>society is Rs.800/(G.O.Ms.No. 147 /Coop. Food and consumer protection Department
dt.17.5.2002)

Period stipulated:
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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.

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History of the Cooperative movement


The history of the cooperative movement concerns the origins and history of
cooperatives. Although cooperative arrangements, such as mutual insurance, and
principles of cooperation existed long before, the cooperative movement began with
the application of cooperative principles to business organization.

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.

The first document consumer cooperative was founded in 1769, in a barely


furnished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack
of oatmeal into john Walker`s whitewashed front room and began selling the
contents at a discount, forming, the Fenwick Weaver` Society.
In the decades that followed, several cooperatives or cooperative societies
formed including Lennox town Friendly Victualling Society, founded in 1812.
By 1830, there were several hundred co-operatives. Some were initially
successful, but most cooperative founded in the early 19th century hah failed by
1840.However, Lockhurst lane

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Industrial co-operative Society (founded in 1832 and now Heart of England
Co-operative Society), and Galashiels and Hawick Co-operative Societies (1839 or
earlier, merged with the Co-operative group) still trade today.
It was not until 1844 when the Rochdale Society of Equitable Pioneers
established the `Rochdale Principles` on which they ran their cooperative, that the
basis for development and growth of the modern cooperative movement was
established.
Financially, credit unions were invented in Germany in the mid-19 th century,
first by Franz Hermann schulze-Delitzsch (1852, urban), then by Friedrich Wilhelm
Raiffeisen (1864, rural). While Schulze-Delitzsch is chronologically earlier,
Raiffeisen has proven more influential over time-see history of credit unions. In
Britain, the friendly society, building society, and mutual saving bank were earlier
forms of similar institutions.

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CHAPTER 3
ORGANIZATIONAL PROFILE

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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.

LONE FUNDS FLOW


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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.

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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.

Human resource quality and management

Accounting and MIS

Tracking system for overdues

Financial planning and control systems Decision


making

Quality of clients/member groups

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.

Credit performance and asset quality

Mobilization of funds

Asset, liability and equity composition

Sustainability and profitability

As assets manager we believe:

Clearly defined products for every investment need.

Managing investors money like we would our own.

Backing product performance with on-time, committed


investor service

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We have institution two committees that have been charged with the responsibility
of monitoring to fund policies, among other things.
The internal investment committee approves names for investment revising daily act
portfolio and participating in setting objectives and strategies for funds
The investment policy committee sets investment restrictions and monitors periodical
performance.

BOARD OF DIRECTORS:
Directors

Chairman

Names

O.Prabhakar reddy
K.Muralidhar rao
K.V.Ram Mohan reddy

Director

B.Venkata subba reddy


M.Eswaaiah
.E.Krishna veni

Manager

P.Vekatanatha reddy

Employees in marketing

Four members

Employees in staff

Five members

Other employees

Thirteen members

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Advantage of owning equity funds:


This substantially higher return for your money compared to other investment
options.

Growth fund
Potential return

index fund
Balanced fund

Risk

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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

The main characteristics of each of these channels are:


Career Agents: Career Agents are full-time commissioned sales personnel
holding an agency contract. They are generally considered to be independent
contractors. Consequently an insurance company can exercise control only
over the activities of the agent, which are specified in his contract. Despite this
limitation on control, career agents with suitable training, supervision and
motivation can be highly productive and cost effective. Moreover their level of
customer service is usually very high due to the renewal commissions, policy
persistency bonuses, or other customer service-related awards paid to them.
Many insurance companies, however avoid this channel, believing that agents
might oversell out of their interest in quantity and not quality. Such problems
with career agents usually arise, not due to the nature of this channel, but
rather due to the use of improperly designed remuneration and/or incentive
packages.
Direct Response: In this channel no salesperson visits the customer to induce
a sale and no face-to-face contact between consumer and seller occurs. The
consumer purchases products directly by responding to the company's
advertisement, mailing or telephone offers. This channel can be used for
simple packaged products, which can be easily understood by the consumer
without explanation.

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Advertisements: This very popular medium among the entire medium any
person can see this advertisement of the products and buy the product from
nearest branch.

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;
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The total accounting value of all capital regularly employed in business, it
includes owners capital, borrowed capital and any other sources.
Thus term includes;
1. The value of ordinary and preference shares
2. The value of all surplus earned and capital
3. The value of bonds and security still not redeemed
4. The value of long term loans
However the modern view includes short term funds or liabilities under the
firm. It should be properly capitalized.
Shriram Raghavendra issue shares. So, all these terms do apply.
FUND OPTIONS
There are six funds having different proportional investment in equity, debt, market
money and cash. The funds are Preserver, Defender, Balancer, Maximus, Accelerator,
and Tyaseer.

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CHAPTER 3
THEORETICAL FRAME WORK

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THEORETICAL FRAME WORK


A cooperative is a legal entity owned and democratically controlled by its
members. Members often have a close association with the enterprise as producers or
consumers of its products or services, or as its employees.
1. Some members to have a greater share of the control, or
2. Some investors to have a return on their capital that exceeds fix interest,

Neither of which may e allowed under local laws for cooperatives.


Cooperatives offen share their earning with the membership as dividends, which are
divided among the members according to their participation in the enterprise, such as
patronage, instead of according to the value of their capital shareholdings (as is done
y a joint stock company).

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

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Types of cooperative governance:


Retailers cooperative:
A retailer cooperative (known as a secondary or marketing cooperative in
some countries) is an organization which employs economies of scale on behalf of its
members to receive discounts from manufacturers and to pool marketing.
Worker cooperative:
A worker cooperative or producer cooperative is a cooperative, that is owned and
democratilly controlled y its worker=owners There is no outside owners in a pure
workers` cooperative.
Volunteer cooperative:
A volunteer cooperative is a cooperative that is run y and for a network of volunteers,
for the benefit of a defined membership or the general public, to achieve some goal,
depending on the structure.
Social cooperative;
A particularly successful form of multi-stakeholder cooperative is the Italian social
cooperative, of which some 7000 exist. type A social cooperative ring together
providers and beneficiaries of a social service as members. Type social cooperatives
ring together permanent workers and previously unemployed people who wish to
integrate into the labor market.
Consumers` cooperative:
A consumers` cooperative is a business owned by its customers. Employees can also
generally become members; Members vote on major decisions and elect the board of
directors from amongst their own number.

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Business and employment cooperative:
Business and employment cooperatives (BECs) are a subset of worker cooperatives
that represent a new approach to providing support to the creation of new businesses.
New generation cooperative:
New generation cooperatives (NGCs) are an adoption of traditional cooperative
structures to modern, capital intensive industries. They are sometimes described as a
hybrid between traditional co-ops and limited liability companies.

Types and number of cooperatives:


Housing cooperative
Utility cooperative
Agriculture cooperative
Credit unions and cooperative banking
Federal or secondary cooperatives
Cooperative union
Cooperative wholesale society
Cooperative political movements

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.

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Advantages of investing in co-operative society:

Professional management.

Diversification

Convenient administration

Return potential

Low cost

Liquidity

Transparency

Flexibility

Choice of schemes

Tax benefits

Well regulated

Flow chart of investment in Co-operative society:

RETURN

INVESTMENT

SECURITIES

FUND MANAGER

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Frequently used terms:


Net asset value (NAV)

Net asset value:


Net asset value is the market value of the assets of the schemes minus its
liabilities. The par unit net asset value is the number of units outstanding on the
valuation data.

STRUCTURE OF COOPERATIVE SOCIETY

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CHAPTER 4
DATA ANALYSIS
&
INTERPRETATION

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This table shows the deposits lent by shriram raghavendra


MACS for the lest three years:

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

This tale shows the trend calculation of Shriram Raghavendra


MACS of the last three years.

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

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The two normal equations are:
y = Na + bx
xy = ax + bx2

The trend line equation is Y = a + bx (where origin is 0 & x units = 1)

Calculation of the trend line is:


1. y = Na+bx
34.09 = 5 (a) + b (0)
34.09 = 5a
5a = 34.09
a = 34.09 / 5
a = 6.81
2. xy = a x +b x2
12.23 = a(0) + b (10)
12.23 = 0 + 10b
10b= 12.23
b = 12.23/10
b = 1.22

Calculation of the trend line:


Y = a + bx (where origin is 0 & x units= 1year)
2008-09=6.81+1.22(-2) = 6.81-2.44 = 4.37
2009-10= 6.81+1.22(-1)=6.81-1.22=5.59
2010-11 = 6.81+2.01(0) =6.81
2011-2012 =6.81+2.01(1) =8.82
2012-13 = 6.81+2.01(2) =10.82

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Chart showing the deposits of Shriram Raghavendra MACS of last five


years

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.

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This table shows the loans lent by Shriram Raghavendra


MACS:
YEARS
2008-09

LOANS
2.60

2009-10

3.40

2010-11

4.73

2011-12

5.22

2012-13

6.24

Table shows the trend calculation of the Shriram Raghavendra


MACS
years

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

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The two normal equations are :


1. y=Na + b x
2. xy = a x + b x2
1.

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

The trend line equation is:


Y = a + bx (where origin is 0& x units = 1 year)
2008 09 = 4.438 + 0.91 (-2) = 3.348
200 9 -10 = 4.438 + 0.91 (-1) = 3.528
2010-11 = 4.438 + 0.91 (0) = 4.438
2011-12 = 4.438 + 0.91 (1) = 5.348
2012-13 = 4.438 + 0.91 (2) = 6.258

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Chart showing the loans by Shriram raghavendra MACS

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.

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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

deposits lent by Shriram RaghavendraMACS of the last


five years

Table shows the trend calculation of Shriram Raghavendra for the


last five years:
YEARS

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

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2012-13

16.31

32.62

Total

56.28

21.33

10

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The two normal equations are:


y = Na + b x
56.28 = 5(a) + b (0)
56.28 = 5a
5a = 56.28
a = 56.28 / 5
a= 11.256
xy = ax + bx2
21.33 = a(0) + b(10)
21.33 = 10b
10b = 21.33
b = 21.33/10
b = 2.133

The trend line equation is:


Y = a + bx (where origin is 0& x units = 1)
Y = a + bx
2008-09 = 11.256+2.133(-2) = 6.99
2009-10 = 11.256+2.133(-1) = 9.123
2010-11=11.256+2.133 (0) = 11.256
2011-12 = 11.256+2.133 (1) = 13.389
2012-13 = 11.256+2.133 (2) = 15.522

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This chart shows the loans & deposits of Shriram raghavendra


MACS for the last 5 years:

Loans & deposits


18

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.

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CHAPTER 5
FINDINGS
SUGGESTIONS
CONCLUSION

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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

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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.

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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.

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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

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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

Sumourya institute of managment

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
_______________

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SHRIRAM RAGHAVENDRA MACS

Balance sheet as on 31.03.2010


Shriram Raghavendra MACS Ltd., knl.
Capital and Liabilities
Amount
paid up share capital
Add profit B/F from P&L a/c

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

Sumourya institute of managment

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
_______________

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SHRIRAM RAGHAVENDRA MACS

Shriram Raghavendra MACS Ltd., knl.


Balance sheet as on 31.03.2011
Capital and Liabilities

Amount

paid up share capital

4,715,700.00

Add profit B/F from P&L a/c

(532,522.09)
4,183,177.91

OTHER LIABILITIES
Loans from recurring deposits

1,831,100.00

Loans from fixed deposits

60,557,695.00

Interest payable on FD`S

1,142,314.00

Karnataka bank O D A/C

2,216,525.00
____________

Total

69,912,811.91
____________

Assets
Cash on hand

797,331.00

Bank balance

2,861,601.05

Fixed deposit in ing visya bank

600,000.00

Fixed deposits in Karnataka Bank

2,500,000.00

Chit investments

10,516,847.00

Loans advances

47,315,242.00

Advances for assets purchases


Furniture & fixtures

3,000,000.00
104,500.00

Rent advanced

72,000.00

Directors advances

50,000.00

Advance for chit investments SEC`BAD.br.

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
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