STUDY ON WORKING CAPITAL APPRAISAL ATJAMMU & KASHMIR BANK LTD

Research Report submitted to Entrepreneurship Development Institute of India in partial fulfillment of the requirements for the award of

Post Graduate Diploma in Business Management

Submitted by: KARAN KUMAR MODI Register No.: 12AJEPG1027

Under the guidance of Dr. PREMALATHA U M Professor Jain College Bangalore

Entrepreneurship Development Institute of India Ahmedabad 2013

DECLARATION
I hereby declare that the research entitled Study on Working Capital appraisal at Jammu & Kashmir Bank Ltd submitted to Entrepreneurship Development Institute of India in partial fulfillment of the requirements for the award of PGDBM is a record of independent research work carried out by me under the supervision and guidance of Dr.Premalatha U M, Professor, Jain College, Bangalore. This work has not formed the basis for the award of any Degree and has not been submitted previously to any other College/University.

Bangalore January, 2014 KARAN KUMAR MODI

Dr.Premalatha U M Professor Jain College Bangalore

CERTIFICATE
I certify that this research entitled Study on Working Capital appraisal at Jammu & Kashmir Bank Ltd submitted to Entrepreneurship Development Institute of India in partial fulfillment of the requirements for the award of PGDBM is a record of independent research work carried out by Mr. Karan Kumar Modi under my supervision and guidance. This work has not formed the basis for the award of any Degree and has not been submitted previously to any other College/University.

Bangalore January, 2014

Dr.Premalatha U M Research Mentor

ACKNOWLEDGEMENT
The contentment of completing this project would be incomplete without expressing my heartfelt gratitude to Mr. Shakeel Rehman, Senior Executive in J&K BANK and Dr.Premalatha U M, Jain College, Bangalore, for giving me an opportunity to work on this extremely interesting project of learning and development department of Finance, which was a great learning experience for me.

KARAN KUMAR MODI

EXECUTIVE SUMMARY

This study is regarding Working Capital appraisal at Jammu & Kashmir Bank Ltd and its management regarding their previous records of working capital and necessary steps taken by them to overcome this problem. Author have studied on the working capital with reference to Jammu & Kashmir Bank Ltd.& observed that working capital is very much important for the bank. The findings which author gained after completing study on working capital inthe company is able to meet their day to day expenses by allocating the sufficient amount of money towards the current assets and to increase their turnover by providing better facility to the customer which helps the company to increase their top line. After doing this study, the objective gained was to know whether the management is constantly concerned about the overall profitability of the company (or) not. From the study of working capital author have learned that the overall operational efficiency and performance is depend upon the proper utilization of working capital in the organization. Working Capital helps to interpret the financial position of company whether it is appropriate (or) not and the management is constantly concerned about the overall profitability of the company (or) not.

TABLE OF CONTENTS
CONTENT List of Tables PAGE NO. i.

.NO

List of Graphs INTRODUCTION Working Capital Concept of Working Capital Constituents of Current Assets Net Working Capital = Current Assets Current Liabilities. Constituents of Current Liabilities Classification of Working Capital Importance or Advantage of Adequate Working Capital Excess or Inadequate Working Capital Disadvantages of Inadequate Working Capital Factors Determining the Working Capital Requirements Management of Working Capital Working Capital Analysis COMPANY PROFILE

ii. 10-21

22-35

Introduction Mission Values Organizational Hierarchy Brief Profile Of Directors Financial Products Micro-Finance Market Share & Position Of The Company In The Industry Analyst Report Covering J&K Banks Share

RESEARCH METHODOLOGY Statement Of The Problem Objectives Of The Research Research Methods Data Collection Scope Of the Research Limitation Of The Research DATA ANALYSIS Total Current Asset Total Sales Sundry Debtors Stocks Of Raw Material Stocks Of Semi-Finished Goods Stocks Of Finished Goods Cash & Bank Balance Debtors Period (Days) Creditors Period (Days) Operating Cycle Current Ratio FINDINGS RECOMMENDATION & CONCLUSION BIBLIOGRAPHY

36-38

39-49

50 51-52

LIST OF TABLES
S.NO 1 2 3 4 5 6 7 8 9 10 11 LIST OF TABLE Total Current Asset Total Sales Sundry Debtors Stocks Of Raw Material Stocks Of Semi-Finished Goods Stocks Of Finished Goods. Cash & Bank Balance Debtors Period (Days) Creditors Period (Days) Working Cycle Current Ratio PAGE NO. 39 40 41 42 43 44 45 46 47 48 49

LIST OF GRAPHS
S.NO 1 2 3 4 5 6 7 8 9 10 11 LIST OF GRAPH Total Current Asset Total Sales Sundry Debtors Stocks Of Raw Material Stocks Of Semi-Finished Goods Stocks Of Finished Goods Cash & Bank Balance Debtors Period (Days) Creditors Period (Days) Working Cycle Current Ratio PAGE NO. 39 40 41 42 43 44 45 46 47 48 49

INTRODUCTION
1.1. WORKING CAPITAL - Meaning of Working Capital:

Working Capital is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Along with fixed assets such as P&M, working capital is considered a part of operating capital. Gross working capital equals to current assets.Net working capital is calculated as current assets minus current liabilities. It is a derivation of working capital that is commonly used in valuation techniques such as discounted cash flows. Capital required for a business can be classified under two main categories via, 1) 2) Fixed Capital Working Capital

Every business needs funds for two purposes i.e. for its establishment and to carry out its day- to-day operations. Long terms funds are required to create production facilities through purchase of fixed assets such as P&M, land, building, furniture, etc. Investments in these assets represent that part of firms capital which is blocked on permanent or fixed basis and is called fixed capital. Funds are also needed for short-term purposes for the purchase of raw material, payment of wages and other day to- day expenses etc.

These funds are known as working capital. In simple words, working capital refers to that part of the firms capital which is required for financing short term or current assets such as cash, marketable securities, debtors & inventories. Funds, thus, invested in current assets keep revolving fast and are being constantly converted into cash and these cash flows out again in exchange for other current assets. Hence, it is also known as revolving or circulating capital or short term capital. 1.2. CONCEPT OF WORKING CAPITAL

There are two concepts of working capital: 1. 2. Gross working capital Net working capital

The gross working capital is the capital invested in the total current assets of the enterprise. Current assets are those Assets which can be converted into cash within a short period, normally one accounting year. 1.3. 1) 2) 3) 4) 5) a. CONSTITUENTS OF CURRENT ASSETS Cash in hand and cash at bank Bills receivables Sundry debtors Short term loans and advances Inventories of stock as: Raw material

b. c. d.

Work in process Stores and spares Finished goods

6. Temporary investment of surplus funds 7. Prepaid expenses 8. Accrued incomes 9. Marketable securities 1.4. NET WORKING CAPITAL = CURRENT ASSETS CURRENT

LIABILITIES Net working capital can be positive or negative. When the current asset exceeds the current liabilities, more are the current assets. Current liabilities are those liabilities, which are intended to be paid in the ordinary course of business within a short period of time normally one accounting year out of the current assets or the income business. 1.5. CONSTITUENTS OF CURRENT LIABILITIES 1. 2. 3. 4. 5. Accrued or outstanding expenses Short term loans, advances and deposits Dividends payable Bank overdraft Provision for taxation, if it does not amount to application of profit

6. 7.

Bills payable Sundry creditors

The gross working capital concept is financial or going concern concept whereas net working capital is an accounting concept of working capital. Both the concepts have their own merits. The gross concept is sometimes preferred to the concept of working capital for the following reasons: 1. It enables the enterprise to provide correct amount of working capital at

correct time. 2. Every management is more interested in total current assets with which it

has to operate then the source from where it is made available. 3. It take into consideration of the fact every increase in the funds of the

enterprise would increase its working capital. 4. This concept is also useful in determining the rate of return on investments

in working capital. The net working capital concept, however, is also important for following reasons: It is qualitative concept, which indicates the firms ability to meet to its

operating expenses and short-term liabilities. It indicates the margin of protection available to the short term creditors. It is an indicator of the financial soundness of enterprises.

It suggests the need of financing a part of working capital requirement out

of the permanent sources of funds. 1.6CLASSIFICATION OF WORKING CAPITAL Working capital may be classified in two ways: O On the basis of concept.

OOn the basis of time. On the basis of concept, working capital can be classified as gross working capital and net working capital. On the basis of time, working capital may be classified as:

1.7. PERMANENT OR FIXED WORKING CAPITAL Permanent or fixed working capital is the minimum amount which is required to ensure effective utilization of fixed facilities and for maintaining the circulation of current assets. Every firm has to maintain a minimum level of raw material, workin-process, finished goods and cash balance. This minimum level of current assets is called permanent or fixed working capital as this part of working is permanently blocked in current assets. As the business grow the requirements of working capital also increases due to increase in current assets. 1.8. TEMPORARY OR VARIABLE WORKING CAPITAL Temporary or variable working capital is the amount of working capital which is required to meet the seasonal demands and some special exigencies. Variable

working capital can further be classified as seasonal working capital and special working capital. The capital required to meet the seasonal need of the enterprise is called seasonal working capital. Special working capital is that part of working capital which is required to meet special exigencies such as launching of extensive marketing for conducting research, etc. Temporary working capital differs from permanent working capital in the sense that is required for short periods and cannot be permanently employed gainfully in the business. 1.9. IMPORTANCE OR ADVANTAGE OF ADEQUATE WORKING CAPITAL Solvency of the business: Adequate working capital helps in maintaining the solvency of the business by providing uninterrupted of production. Goodwill: Sufficient amount of working capital enables a firm to make prompt payments and makes and maintain the goodwill.. loans: Adequate working capital leads to high solvency and credit standing can arrange loans from banks and other on easy and favorable terms. Cash Discounts: Adequate working capital also enables a concern to avail cash discounts on the purchases and hence reduces cost. Regular Supply of Raw Material: Sufficient working capital ensures regular supply of raw material and continuous production. Regular Payment of Salaries, Wages and Other Day to Day

Commitments: It leads to the satisfaction of the employees and raises the

morale of its employees, increases their efficiency, reduces wastage and costs and enhances production and profits. If a firm is having adequate working capital then it can exploit the favorable market conditions such as purchasing its requirements in bulk when the prices are lower and holdings its inventories for higher prices. : A concern can face the situation during the depression. Quick and Regular Return on Investments: Sufficient working capital enables a concern to pay quick and regular of dividends to its investors and gains confidence of the investors and can raise more funds in future. High Morale: Adequate working capital brings an environment of securities, confidence, high morale which results in overall efficiency in a business. 1.10. EXCESS OR WORKING CAPITAL INADEQUATE Every business concern should have adequate amount of working capital to run its business operations. It should have neither redundant or excess working capital nor inadequate nor shortages of working capital. Both excess as well as short working capital positions are bad for any business. However, it is the inadequate working capital which is more dangerous from the point of view of the firm.

1.11. DISADVANTAGES OF REDUNDANT OR EXCESSIVE WORKING CAPITAL 1. Excessive working capital means ideal funds which earn no profit for the firm and business cannot earn the required rate of return on its investments. 2. Redundant working capital leads to unnecessary purchasing and accumulation of inventories. 3. Excessive working capital implies excessive debtors and defective credit policy which causes higher incidence of bad debts. 4. It may reduce the overall efficiency of the business. 5. If a firm is having excessive working capital then the relations with banks and other financial institution may not be maintained. 6. Due to lower rate of return on investments, the values of shares may also fall. 7. The redundant working capital gives rise to speculative transactions 1.12. DISADVANTAGES OF INADEQUATE WORKING CAPITAL Every business needs some amounts of working capital. The need for working capital arises due to the time gap between production and realization of cash from sales. There is an operating cycle involved in sales and realization of cash. There are time gaps in purchase of raw material and production; production and sales; and realization of cash. Thus working capital is needed for the following purposes: For the purpose of raw material, components and spares.

 To pay wages and salaries To incur day-to-day expenses and overload costs such as office expenses. To meet the selling costs as packing, advertising, etc. To provide credit facilities to the customer. To maintain the inventories of the raw material, work-in-progress, stores and

spares and finished stock. For studying the need of working capital in a business, one has to study the business under varying circumstances such as a new concern requires a lot of funds to meet its initial requirements such as promotion and formation etc. These expenses are called preliminary expenses and are capitalized. The amount needed for working capital depends upon the size of the company and ambitions of its promoters. Greater the size of the business unit, generally larger will be the requirements of the working capital. The requirement of the working capital goes on increasing with the growth and expensing of the business till it gains maturity. At maturity the amount of working capital required is called normal working capital. There are others factors also influence the need of working capital in a business. 1.13. FACTORS DETERMINING THE WORKING CAPITAL REQUIREMENTS 1. NATURE OF BUSINESS: The requirements of working is very limited in

public utility undertakings such as electricity, water supply and railways because they offer cash sale only and supply services not products, and no funds are tied up in inventories and receivables. On the other hand the trading and financial

firms requires less investment in fixed assets but have to invest large amount of working capital along with fixed investments. 2. SIZE OF THE BUSINESS: Greater the size of the business, greater is the requirement of working capital. 3. PRODUCTION POLICY: If the policy is to keep production steady by

accumulating inventories it will require higher working capital. 4. LENGTH OF PRDUCTION CYCLE: The longer the manufacturing time the raw material and other supplies have to be carried for a longer time in the process with progressive increment of labor and service costs before the final product is obtained. So working capital is directly proportional to the length of the manufacturing process. 5. SEASONALS VARIATIONS: Generally, during the busy season, a firm

requires larger working capital than in slack season. 6. WORKING CAPITAL CYCLE: The speed with which the working cycle

completes one cycle determines the requirements of working capital. Longer the cycle larger is the requirement of working capital. DEBTORS CASH GOODS FINISHED

RAW MATERIAL

WORK IN PROGRESS

7.

RATE OF STOCK TURNOVER: There is an inverse co-relationship between

the question of working capital and the velocity or speed with which the sales are affected. A firm having a high rate of stock turnover will needs lower amount of working capital as compared to a firm having a low rate of turnover. 8. CREDIT POLICY: A concern that purchases its requirements on credit and

sales its product / services on cash requires lesser amount of working capital and vice-versa. 9. BUSINESS CYCLE: In period of boom, when the business is prosperous,

there is need for larger amount of working capital due to rise in sales, rise in prices, optimistic expansion of business, etc. On the contrary in time of depression, the business contracts, sales decline, difficulties are faced in collection from debtor and the firm may have a large amount of working capital. 10. RATE OF GROWTH OF BUSINESS: In faster growing concern, the company might require large amount of working capital. 1.14. MANAGEMENT OF WORKING CAPITAL Management of working capital is concerned with the problem that arises in attempting to manage the current assets, current liabilities. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i.e. it is neither adequate nor excessive as both the situations are bad for any firm. There should be no shortage of funds and also no working capital should be ideal. WORKING CAPITAL MANAGEMENT POLICES of a firm has a great effect on its probability, liquidity and structural health of the organization. So working capital management is three dimensional in nature as:

1.

It concerned with the formulation of policies with regard to profitability,

liquidity and risk. 2. It is concerned with the decision about the composition and level of current

assets. 3. It is concerned with the decision about the composition and level of current

liabilities. 1.15. WORKING CAPITAL ANALYSIS It is a known fact that working capital is the life blood and the center of a business. Adequate amount of working capital is very much essential for the smooth running of the business. And the most important part is the efficient management of working capital in right time. The liquidity position of the firm is totally effected by the management of working capital. So, a study of changes in the uses and sources of working capital is necessary to evaluate the efficiency with which the working capital is employed in a business. This involves the need of working capital analysis. The analysis of working capital can be conducted through a number of devices, such as: 1. 2. 3. Ratio analysis. Fund flow analysis. Budgeting.

1.

RATIO ANALYSIS

A ratio is a simple arithmetical expression, i.e. one number to another. The technique of ratio analysis can be employed for measuring short-term liquidity or working capital position of a firm. The following ratios can be calculated for these purposes: 1. Current ratio 2. Quick ratio 3. Absolute liquid ratio 4. Inventory turnover 5. Receivables turnover 6. Payable turnover ratio 7. Working capital turnover ratio 8. Working capital leverage 2. FUND FLOW ANALYSIS

Fund flow analysis is a technical device designated to study the source from which additional funds were derived and the use to which these sources were put. The fund flow analysis consists of: a. b. Preparing schedule of changes of working capital Statement of sources and application of fund.

It is an effective management tool to study the changes in financial position (working capital) business enterprise between beginning and ending of the financial dates.

3.

WORKING CAPITAL BUDGET

A budget is a financial and / or quantitative expression of business plans and polices to be pursued in the future period time. Working capital budget as a part of the total budgeting process of a business is prepared estimating future long term and short term working capital needs and sources to finance them, and then comparing the budgeted figures with actual performance for calculating the variances, if any, so that corrective actions may be taken in future. The objective working capital budget is to ensure availability of funds as and needed, and to ensure effective utilization of these resources. The successful implementation of working capital budget involves the preparing of separate budget for each element of working capital, such as, cash, inventories and receivables etc.

COMPANY PROFILE
THE JAMMU AND KASHMIR BANK LTD 2.1. INTRODUCTION Founded Headquarters No. of Locations Industry Employees 1938 Jammu & Kashmir, India > 500 branches/offices Financial, Commercial banks 6833

The Jammu & Kashmir Bank is the first of its nature and composition as a State owned bank in the country. The Corporate Social Responsibility (CSR) if the J&K Bank seeks to recognize obligations towards society and aims to integrate the CSR ideals into its mission for optimizing both business and social performance. It stresses on promoting work life balance, give attention to social and environmental concerns. The CSR is not just recognized as promulgating the Banks own values and principles of philanthropy but also the values and principles of all those who have a stake in it or are affected by its operations.The State government besides contributing half of the issued capital also appointed the bank as bankers for general banking and treasury business of the State government. In its formative years, the bank had to coup up several serious problems, particularly around the time of independence, when two of its branches at

Muzaffarabad and Mirpur fell to the other side in 1947.However, the State government came with assistance of Rs.6.00 lacks to meet the claims. Following the extension of Central laws to the State of Jammu & Kashmir, the Bank was defined as a government companies Act 1956. To overcome this crisis, the Maharaja of the State, Maharaja Hari Singh, conceived the idea to establish a bank to help people of the State to come out of the economic backwardness. The scheme of forming the bank was formulated by an eminent banker sir Sorabji N.Pochkanwala, the Managing Director of Central Bank of India. The outcome of the efforts of Sir Sorabji resulted in the establishment of the Jammu & Kashmir Bank Limited on October 1; 1938 and the Bank formally commenced its business on July 4, and 1939. The bank opened its first branch at Residency Road, Srinagar. Encouraged by the support of public, it opened its another branch at Jammu. By 1946, the number of branches of the bank went up to 12. BRANDS IDENTITY

The new identity for J&K Bank is a visual representation of the Bank's philosophy and business strategy. The three colored squares represent the regions of Jammu, Kashmir and Ladakh. The counter-form created by the interaction of the

squares is a falcon with outstretched wings - a symbol of power and empowerment. The synergy between the three regions propels the bank towards new horizons. Green signifies growth and renewal, blue conveys stability and unity, and red represents energy and power. All these attributes are integrated and assimilated in the white counter-form. 2.2.MISSION Our mission is two-fold: To provide the people of J&K international quality financial service and solutions and to be a super-specialist bank in the rest of the country. The two together will make us the most profitable Bank in the country. 2.3. VISSION To catalyze economic transformation and capitalize on growth. Our vision is to engender and catalyze economic transformation of J&K and capitalize from the growth induced financial prosperity thus engineered. The Bank aspires to make J&K the most prosperous state in the country, by helping create a new financial architecture for the J&K economy, at the center of which will be the J&K Bank. 2.5.ORGANISATIONAL HIERARCHY & BOARD OF DIRECTORS

Brief Profile of Directors 1. MUSHTAQ AHMAD: Having joined the Bank in 1972 as Probationary Officer (PO), Mr. Mushtaq Ahmad has a distinguishing career of 36 years as a prudent banker. His personal

progression has been a vital and contributing element of the unfolding success story of J&K Bank since more than three decades. Before his retirement as Executive Director of the Bank in February 2008, he held some of the most significant positions in the bank and discharged all his duties with honesty and distinctive vision. This person makes an ideal blend of specialized knowledge and practical experience in almost all the critical fields of contemporary banking, which include Credit/Risk Management, Strategy and Business Development, Assets & Liability Management, Human Resource Development, Investments, Treasury, Forex operations, International Banking, Insurance etc. As a leading banker, he commands huge respect for his prudence, esteem for his discipline and affection for his leadership skills in the Bank as well as the industry. As a top executive, Mushtaq Ahmad lays great emphasis on talent search, human resources development, skill enhancement, besides team building. 2. SUDHANSHU PANDEY, IAS:

Mr. Sudhanshu Pandey, IAS, is Commissioner Secretary to Government, Finance Department, J&K, and Govt. A post graduate in Life Science (Botany) with specialization in Environmental Management and Ecology (Gold Medal), University of Allahabad, MBA in Financial Management; Business Management and Financial Management, Institute of Management, Ahmadabad, Reforms in

Government, Indian Institute of Management, Bangalore and Decentralized Industrial Development, Japan 3. ARNAB ROY:

Mr. Arnab Roy, the Regional Director, Reserve Bank of India is a holder of Masters Degrees in Arts and also Business Administration (MBA). He has more than 27 years of valuable experience serving the Reserve Bank in various capacities, prominent being General Manager, Issue Department and DBS. He has also been associated for a short while with Banking Ombudsman and is presently the Regional Director of J&K State. 4. VIKRANT KUTHIALA:Mr. Vikrant Kuthiala is B.com (Hons) from Hindu College, Delhi University. He is a prominent Businessman from Jammu with interests in steel manufacturing and hydel projects. He is also representing on the committees of various academic and professional organizations, prominent being the Regional Advisory Committee of Central Excise & Customs, J&K, Chamber of Commerce & Industry, Jammu and J&K State Committee of Federation of Industries of India, New Delhi. He is also a Member of India Islamic Cultural Centre, New Delhi and INTACH, J&K Chapter, Jammu. 5. PROF. NISAR ALI: Prof. Nisar Ali is a Ph.D. in Economics from Osmania University, Hyderabad. He is a Professor from Post-Graduate Department of Economics, University of Kashmir. 6. A. M. MATTO:Mr. A. M. Matto is a Graduate in Commerce and World Explorer. He is a high silhouette Businessman having his interests in the

manufacture and export of Kashmir Handicrafts. He has made significant contribution to commerce industry by being associated with it in the capacity of President and other prominent positions. Mr. A. M. Matto has had a long association with the Bank as Director, during which he has made valuable contribution to the Institution with his rich and varied experiences. 7. RAKESH KUMAR GUPTA: Mr. R.K. Gupta, aged 47 years, is a professional Chartered Accountant with 25 years standing possessing skill in Finance, Taxation, Auditing and Corporate Legal Affairs. He started his professional career with M/s Gupta & Associates in January 1986 and heads this renowned rm of Chartered Accountants since then. Mr. Gupta remained in Executive Committee of the Jammu & Kashmir Branch of the Institute of Chartered Accountants of India for three terms from 1991-1994; 1994-1998 and 2006-2009. During these three terms he represented the Branch as its Treasurer, Secretary, Vice-Chairman and Chairman. Mr. Gupta has been member of Tax Payers Committee of this Region. 8. NIHAL GARWARE:Mr. Nihal Chandra Kant Garware is a holder of Bachelor of Arts Degree (U.S.A.) and the scion of well-known Industrialist family of India the Garware. Mr. Nihal Chandra KantGarware is at present Head of the Legal Department and Liaison Department in some of the Garware Companies. He has been a Director in various companies in the Garware Group, where his responsibilities have ranged from Production, Sales, Legal, and Liaison to Finance. He is Advisor to outside Companies like Ama Pvt. Ltd., D. Y. Patil Group and Sharad Pawar International School.

2.6. FINANCIAL PRODUCTS LOAN PRODUCTS: INSURANCE POLICIES TRANSACTIONS LOAN PRODUCTS: PERSONAL LOAN With the changing times, the luxuries of yesteryears have become basic necessities of today ensuring that you dont miss out living a quality for yourselves and your family. Our whole suite of personal finance products helps you in owning all basic necessities of life and proudly so be it having your own sweet home, renovating and refurbishing it with items like: TV, refrigerator, washing machine etc. or bring a proud owner of a stylish car, they have a loan product for every such need. 2.7. CONSUMPTION LOAN Eligibility: Permanent employees of central/state Govt., public sector

undertakings, autonomous bodies, institutions, having at least 3 years of active remaining services. Amount of Loan: Maximum Rs.7.00 Lakh or 30 times gross monthly salary Gross deductions including installments of the proposed loan not exceed 60% of the gross income. Margin: Nil

Repayment period: The loan along with interest would be repayable in 84 monthly

installments beginning one month after the disbursement of the loan. 2.8. HOME LOAN

Eligibility: Professionals and self-employed like Doctors, engineers, chartered accounts, advocated with minimum standing of 3 years. Employees of Govt. / semi-governments departments, public sector undertakings with minimum 3 years service. Purpose: Purchase with construction of house/flat

renovation/additions/alterations of existing house, purchase of land. Margin: For construction/purchase of house: 15% For renovation: 25%

Repayment period: Up to 20 years including 9 months moratorium by equal monthly installments. Rate of interest: Repayment Period Floating ROI Up to Above Fixed ROI Up to Above

2 Lakh 5 years 5 to 10 years 10 to15 years Above 15 years 11.5% 11.75% 12.75% 13%

2 Lakh 13.25% 14% 14.25% 14.75%

2 Lakh 12% 13% 13% 13%

2 Lakh 14.25% 15% 15% 15%

2.9.

CAR LOAN

Eligibility: Employees of Govt. /semi-Government departments, autonomous bodies, public sector undertakings, individual, firms, limited companies having a minimum 5 years active service. Security: Hypothecation of vehicle, third party guarantee of one person,

Quantum of Finance: Maximum 10 Lakh. Margin: 20% of the cost of the vehicle. Repayment: 7 years in equal monthly installments

Rate of Interest: 12 % up to 4 Lakh 13.5 % above 4 Lakh 2.10. EDUCATION LOAN

For bright students with a good academic background and pursuing graduation/post-graduation courses in Science/Arts/Commerce, Medicine, Surgery, Hotel Management, Design, Architecture, Biochemistry, Veterinary Science, ICWA, CA, CFA, Computer Certificate Courses/leading to Diploma/Degree, MCA, MBA, MS etc.

Eligibility: Should have secured admission to professional/technical courses in domestic/foreign universities/institutions through entrance

test/selection process. Margin: Up to 5 Lakh: Nil Above 5 Lakh i) Studies in India: ii) Studies Abroad: Repayment: 15 5%

Moratorium: Course period + one year or Six months after getting Job whichever is earlier? The loan is to be repaid in 5 to 7 years after moratorium period. Rate of Interest: 2.5 to 5 Lakh 5 to 10 Lakh 10 to 20 Lakh 11.5% 12.5% 14.5%

2.11. J&K BANK DASTKAR FINANCE J&K Bank in its endeavor to promote trade industry and to preserve the traditional arts and crafts of the state devised a scheme aimed at the financial needs of the artisan community aptly called JK Bank Dastkaar Finance. The scheme provides easy and soft credit to craftsmen engaged in the trade and helps them to set up their own ventures, weeding out the middlemen responsible for their exploitation. Keeping in view the specific production cycle associated with this trade, the loan comprises of a term loan and working capital components. Repayment of the bank finance: To make the credit hassle free, no Collateral /third party guarantee is required. The product has been designed on the banks philosophy of confidence based lending as opposed to collateral based lending. There is no requirement of any collateral security under this product. Bare minimum with only two documents to be executed for disbursement of the loan. In order to increase the reach of this product the database of the weavers/

artisans available with various trade associations is being utilized besides identification of people by concerned branches of the bank. 2.12. JK BANK ZAFRAN FINANCE SCHEME Kashmiri Saffron the most expensive spice in the world has a unique aroma and flavor. It is considered worlds best because of its scientifically proven superior quality, hence commanding a price much higher than the saffron from any other part of the world. Saffron is extensively used for culinary and coloring purposes. Besides, because of its medicinal qualities, it is an important ingredient for both traditional (Ayurveda and Unani) and allopathic medicines. Its demand in the markets, both domestic and international, is growing. Saffron is a nicheeconomy, involving hundreds of Kashmiri families. Still, the recent decline in saffron production is going to affect this segment of state economy. In 2003-04, around 6.98 metric tons of saffron was exported while as the exports declined to 5.19 metric tons in 2004-05. 2.13. AGRICULTURE AND ALLIED FINANCE Agriculture is the mainstay of our economy but unfortunately being financed mainly from outside of the banking sector. Our rural finance strategy envisages extending the frontier of formal finance ton incorporate agriculture along with other rural economies on principles of sustainability, efficiency and significant outrage. Rate of Interest: Up to .50 Lakh: 12.5% 50 to 2.00 Lakh: 13.5%

2.00 to 5.00 Lakh: 14.0% 5.00 to 20.00 Lakh: 14.5% 2.14. J K BANKS ALL - PURPOSE AGRI-TERM LOAN The product aptly named as All-Purpose Agri-Term Loan has been designed in a way that lays special emphasis on small and marginal farmers and provide sufficient and, more importantly, timely finances to the farmers engaged in all types of agricultural and allied activities. The product aims to cater to the needs of small farmers within very little land holdings in the rural and semi-urban areas of the state. The product is given to the people engaged in any kind agriculture and allied activities. Horticulture, Sericulture, Animal Husbandry, Plantation and Fisheries can be financed through this product. The objective has been to provide easy finance to needy farmers through regular channels of finance and to wean them away from the exploitative circle created by the non-banking intermediaries. For that purpose, the product has been devised in such a way that hitherto un-banked customers get an easy access to banking services through simple and affordable documentation process. A maximum credit of Rs 1.00 Lakh, depending upon the Agri-activity to be financed is provided but multiple activities can also be considered for finance. The product is offered at affordable interest rates. Rate of Interest: Up to .50 Lakh: 13.0%

Above .50 Lakh 2.15. BUSINESS LOAN

14.0%

Right fromfinancing the contractors, providing credit to transporters, funding the working capital of shopkeepers, providing financial solution to business men to corporate, SME and infrastructure finance, our regular loan products cater to all kinds of business of industrial activities in the state and rest of country. Rate of Interest: Up to .50 Lakh: .50 to 2.00 Lakh 2.00 to 5.00 Lakh 13.0% 14.0% 14.5%

5.00 to 20.00 Lakh 15.0%

2.16. MICRO-FINANCE J&K Bank is working on empowering people and demonstrating that people with lesser means can be reached profitably. For us, at J&K Bank, empowerment is the process of enhancing the capacity of individuals or groups make choices and to transform those choices into desired actions and outcomes.

One of the many of such products is our craft development loan which caters to the needs of our highly talented and skilled artisans engaged in Wood Craving, Paper Mache, Namdasazi, Copper Smithy, Willow Wicker and Kangri making etc. Likewise all our other such products have been designed keeping in view the seasonal and craft specific requirements. 2.17. INSURANCE POLICIES METLIFE INDIA INSURANCE MetLife India Insurance Company Limited (MetLife) is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M.Pallonji and Co. Private Limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers more than 600 locations through its bank partners and company-owned offices. MetLife has more than32,000 Financial Advisors, who help customers achieve peace of mind across the length of the country. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States with over 140 years of experience and relationships with more than 90 of the top one hundred FORTUNE 500 companies. The MetLife companies offer life insurance, annuities, automobile and home insurance, retail banking and other

financial services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutes. The bank is also Corporate Agent of MetLife and is marketing its products through its strong branch network .TAX PRODUCTS AND PLANNING(TAX SAVER TERM DEPOSIT SCHEME Purpose To enable our customersto place long term deposits to earn higher rate of interest and also to avail the tax benefits under section 80C of Income Tax Act, 1961.

Eligibility Single holder type deposits: Resident assesse for himself / herself as an individual or in the capacity of the Karta of the Hindu undivided family. Joint holder type deposits: Joint accounts may be open in the name of two adults or in the name of an adult and a minor.

Amount of Deposit Minimum: Rs. 1,000 and in multiples thereof. Maximum: Rs. 1, 00,000 in a year.

Type of Account Option 1(TSTDS-1): Interest applied on quarterly basis. Payable in cash or credited to depositors account every quarter during the term of the deposit. Option 2(TSTDS-2): Interest applies on monthly basis. Payable in cash or credited to depositors account. Option 3(TSTDS-3): Compound rate of interest on the deposit paid along with the principal at the time of maturity.

Term of Deposit 5-10 years

Premature Withdrawal Not allowed before the expiry of five years from the date of its receipt.

Loan/Overdraft Facility Not allowed. Rate of Interest Maturity Period 7 days to 30 days 31 days to 45 days 46 days to 90 days 91 days to 180 days 181 days to less than 1 year 1 years to less than 3 years 3 years to less than 5 years 5 years to 10 years
o

Interest Rates Per Annum 4.50% 5.00% 7.00% 7.75% 8.50% 9.00% 8.75% 8.25%

The above rates are applicable for fresh deposits and renewal of maturing deposits for amounts less than Rs 1.00 Crores. Domestic Term Deposits of Senior Citizens of over 60 years of age shall continue to earn 0.50 % additional rate across all maturities.

DELUXE SAVINGS ACCOUNT Features and Benefits Minimum AQB of Rs. 5000/Free cash withdrawals at branch (up to 15 per month). No limit on cash withdrawal using withdrawal form. Free International Gold Debit Card issued with an ATM withdrawal limit of Rs. 1 lac/day and PoS transactions limit of Rs.1.5 lacs. Nomination facility available. Free e-banking facility.

Eligibility A person in his/her name. More than one person in their joint names. Minor through parents/guardian. Literate minors over 10 years of age.

Documentation Application form Photograph of depositor/s(2 copies) Documents as per KYC Norms. Pan Card or Form 60 or 61. Any other related document applicable to Minors, etc.

GLOBAL ACCESS CARD Salient Features Pin Based Maestro / Cirrus Debit Card Provides online access to savings or current account.

Accepted at all domestic as well as International Master Card, Maestro, Cirrus Enabled ATMs and Point of Sale locations. Accepted at National Finance Switch (NFS) ATMs.

NRE SAVINGSACCOUNT A deposit plan that provides standard banking facilities such as Cheque book, provision for nomination and remittance facilities and also allows repatriation of entire funds. Features Account can be opened through instruments such as Demand Drafts, Wire transfers etc. in freely convertible countries. Account can also be opened bytendering Foreign Currency Notes, Travelers Cheque, etc. during your personal visit to India. Local Rupee Cheques (drawn in India) etc. & cash In Rupees cannot be deposited in this account. The account can be opened jointly with other NRIs. Minimum deposit od Rs.1000 and Average Quarterly Balance of Rs.2500 only. Entire fund including interest are fully repairable. Offers remittance facilities through RTGS and NEFT within India and through SWIFT to outside India. Nomination facility available. Personal Cheque Book Facility with cheques payable on all anywhere branches of the bank. Interest payable at half yearly basis (September & March). The principal and interest earned is fully tax exempted.

Add-on Features Internet banking facility for viewing account statements and fund transfer. Free Global Access Debit Card to account holder or for his assigned holder.

Account operations allowed through Letter of Mandate or POA holder in India. Safe Deposit Locker facility available. Free monthly statements over e-mail.

2.18. TRANSACTIONS SUPPORT SERVICES Technology application has remained the thrust area of the Bank for last many years with an objective to offer state of the art world class banking facilities to its customers. The Bank has continued to leverage information technology as a strategic tool for its business operations, to gain competitive edge in customer service as well as improve productivity and efficiency. The Banks IT strategy emphasizes enhanced level of customer service through 24x7 availability, multi-channel banking and cost efficiency through optimal use of electronic channels, wider market reach and opportunities for cross-selling. The Banks focus is on harnessing technology for integrating diverse products and services. Keeping this in view, the Bank continued to widen the scope of multiple delivery channels such as ATM installations, Core Banking, Internet Banking and SMS Banking at more and more centers.

CORE BANKING Power to access and operate your accounts across our Core Banking branch network. The facilities include cash deposit, cash withdrawal, transfer transactions, remittances, account statements and collections.

THIRD PARTY SERVICES Mutual Funds

J&K Bank has entered into tie-ups with reputed Asset Management Companies for distribution of Mutual fund products. Mutual Fund industry is one of the fastest growing segments in financial services in India. Over the years, banks in India have emerged as the biggest distributors of financial products. This has helped the banks to capture and retain their huge client base and simultaneously adding a steady stream of fee based income. Mutual Fund have become an attractive proposition for investors in the current context and for J&K Bank, it will be a good investment option to have in our product portfolio. Moreover the branch can augment its fee based income the Bank aims to match to industry standards. The AMCs with which the Bank has entered into an arrangement are: UTI, Kotak and Reliance Mutual fund. The Bank shall undertake distribution of their current schemes as well as NFO(New Fund Offer) as and when the AMC comes up with the same.

Insurance Services Life Insurance MetLife India Insurance Company Limited is an affiliate of MetLife, Inc. and was incorporated as a joint venture between MetLife International Holdings, Inc., The Jammu and Kashmir Bank, M.Pallonji and Co.private limited and other private investors. MetLife is one of the fastest growing life insurance companies in the country. It serves its customers by offering a range of innovative products to individuals and group customers at more than 600 locations through its bank partners and company-owned offices. MetLife, Inc., through its affiliates, reaches more than 70 million customers in the Americas, Asia Pacific and Europe. Affiliated companies, outside of India, include the number one life insurer in the United States.

Insurance Services Non Life Insurance

The bank has entered into an alliance with Bajaj Allianz to distribute their non-life products. These products are available at all branches of the bank across India.

Remittance Services The bank has a tie-up with Western Union Financial Services Inc., an international leader in money transfer services through its primary agent SITA, a division of Kuoni Travels India Pvt. to provide inbound money transfer services to customer across the country. As a result of this association, people in general and J&K bank customers in particular are availing the facility of receiving money from their relatives and friends abroad using the Western Union Money Transfer Service. Our bank also has an arrangement with Reliance Capital Travel mate to provide inbound money transfer services to customers across the country.

Cash Management Service Real Time Gross Settlement (RTGS) RTGS is applicable for payouts in excess of Rs.2,00,000. Smooth, safe and fastest mode of transferring money across the banks in India. RBIs RTGS guidelines require the beneficiary bank to credit the beneficiarys account or return the funds, with a maximum time of two hours. RTGS is an effective collection s mechanism as funds across the country can be made to or received from across the country on a same-day basis. Over 34,000+ bank branches participate in RTGS. Efficient working capital management by enabling negotiation of better terms with suppliers and by facilitating speedy collection of funds.

National Electronic Fund Transfer(NEFT)

RBIs NEFT guidelines mandate the beneficiary bank to credit the beneficiarys account or return the funds, within the same day for transactions processed before a stipulated cut-off time. There is no floor or cap on the amount of transfer in NEFT, means you can transfer from an account as small as one rupee to any amount. Efficient mechanism from outstation payments and collections. Payments can be made to or received from across the country on the same day. Reduces chances of frauds typically associated with paper-based payments.

2.19. Market Share & Position of the Company in the Industry SR.NO. PARTICULARS NO OF SHARES TOTAL % TO CAPITAL 53.17

PHYSICAL ELECTRONIC SHARES GOVERNMENT OF 0 J&K INDIAN FUNDS MUTUAL 0

25775266

25775266

1851177

1851177

3.82

3 4 5

INSURANCE COMPANIES BANKS

0 0

215608 13691 269769

215608 13691 271269

0.44 0.03 0.56

NON RESIDENT 1500 INDIANS FOREIGN INVESTORS INST. 0

13140659

13140659

27.11

BODIES CORPORATES RESIDENT INDIVIDUALS CLEARING MEMBERS TOTAL

17394

1813111

1830505

3.78

1744557

3510370

5254927

10.84

0 1763451

124700 46714351

124700 48477802

0.26 100.00

2.20. ANALYST REPORT COVERING J&K BANKS SHARE Company Name Analyst Name Phone No. Dated

+91 44 Abhinesh Vijayaraj, Spark Capital Advisors (I) Pvt 43440006, Jyoti Kumar 28-Nov-13 Ltd 43440033, Varma, Navin Babu 43440165 Credit Suisse Ashish Gupta + 91 22 25-Nov-13 67773895

+ 91 22 Anand Rathi Shares and Stock Clyton Fernandes 66266744, 17-May-13 Brokers Ltd and Kaitav Shah 66266545 Edelweiss Securities Limited + 91 22 Raj Gala, Sandeep 40866137, 17-May-13 Bhandari 40865630

BOB Capital Markets Ltd

Jisha Nair

+ 91 22 14-Feb-13 61389377

Credit Suisse

91 22 Ashish Gupta and 67773895, 05-Feb-13 Prashant Kumar 67773942

91 22 Anand Rathi Shares and Stock Clyton Fernandes 66266744, 05-Feb-13 Brokers Ltd and Kaitav Shah 66266545 ICICI Securities Limited Kajal Gandhi, 91 22 Vasant Lohiya and 31-Dec-12 40840404 Jaymin Trivedi 91 22 Raj Gala, Sandeep 40866137, 02-Nov-12 Bhandari 40865630

Edelweiss Securities Limited

91 22 Hatim Broachwala Karvy Stock Broking Limited 61844329, 01-Nov-12 and Paresh Jain 61844324 Karvy Stock Broking Limited 91 22 Hatim Broachwala 61844329, 12-Oct-12 and Paresh Jain 61844324 91 22 66322236, 03-Oct- 12 66322242 91 22 33201323 28-Sep-12

Adarsh Prabhudas Lilladher Pvt. Ltd. Parasrampuria and Parul Gulati Reliance Securities Ltd Jimit S. Doshi

Edelweiss Securities Limited Elara Securities Private Limited (India)

91 Raj Gala, Sandeep 22 40886137, 08-Aug-12 Bhandari 22 40885630 Mona Khetan 91 22 40626814 11-July-12

CLSA Asia Pacific Markets

Aashish Agarwal, 91 Prakhar Sharma, 2266505075, Akshat Agarwal 2266505058,

15-May-12

2266505065 02233201323

Reliance Securities Ltd

Jimit S Doshi

24-Feb-12

CLSA Asia Pacific Markets

91 Aashish Agarwal, 2266505075, Prakhar Sharma, 2266505058, Akshat Agarwal 2266505065 2266505065

01-Aug-11

Finquest Securities (P) Ltd

91 22 Amandeep Goraya, 40002669, 18-May-11 Chintan Mewar 40002665 91 22 Ashish Gupta, 67773895, Anish Tawakley, 16-May-11 67773747, Deepak Ramineedi 67773942 91 Aashish Agarwal, 2266505075, Prakhar Sharma 2266505058 17-Mar-11

Credit Suisse

CLSA Asia Pacific Markets

Finquest Securities (P) Ltd

91 22 Amandeep Goraya, 40002669, 91 02-Feb-11 Chintan Mewar 22 40002665 91 22 Vikash Mundhra / 40317183, 22 01-Feb-11 Dhaval Gala 40317131 Yogendra Singh 91 22 01-Feb-11 43003825

Batlivala & Karani

Fortune Group

CLSA Asia Pacific Markets

91 22 Aashish Agarwal, 66505075, 91 01-Feb-11 Prakhar Sharma 22 66505058 91 22 Alpesh Mehta, 39825415, 91 31-Jan-11 Abhishek Agarwal 22 39825414

Motilal Oswal Securities Ltd

Kotak Institutional Equities

91 22 M B Mahesh, 66341231, 91 31-Jan-11 Manish Karwa 22 66341350 91 22 Ashish Gupta, 67773895, 91 Anish Tawakley, 22 67773747, 31-Jan-11 Deepak Ramineedi 91 22 67773942 Yogendra Singh 91 22 31-Jan-11 43003825 91 22 12-Jan-11 43003824

Credit Suisse

Fortune Group Fortune Equity (India) Ltd Batlivala & Karani Brokers

Yogendra Singh

91 22 Vikash Mundhra / 40317183, 26-Oct-10 Dhaval Gala 022 40317131 91 22 Alpesh Mehta / 39825415, 25-Oct-10 Abhishek Agarwal 022 39825414 M B Mahesh Manish Karwa Dinesh Shukla / 91-2266341231, 1350 17-May-10

Motilal Oswal Securities Ltd

Kotak Institutional Equities

Finquest Securities (P) Ltd

91 22 17-Aug-09 40002669

CLSA

91 22 Aashish Agarwal / 66505076 / 01-Jun-09 Prakhar Sharma 91 22 66505058 Aashish Agarwal Chinmay Desai 91-2266505075 91-2240002670 04-Aug-08 30-Oct-07

CLSA Finquest Securities(P) Ltd

Finquest Securities(P) Ltd CLSA Kotak Securities Ltd.

Chinmay Desai Aashish Agarwal Saday Sinha Saday Sinha Chinmay Desai Ashish Gupta Dipankar Choudhury Ashish Gupta Sejal Doshi Punit Srivastava

91-2240002670 91-2266505075 91-2266341440 91-2266341440 91-2240002670 91-2256505075 91-2256377231 91-2256505075 91-2256684380 91-2256311035 91-2256575200

31-Jul-07 31-Jul-07 23-Jan-07 10-Oct-06 10-Oct-06 26-Sep-06 17-Oct-05 04-Jul-05 30-Jun-05 10-May-04 08-Jan-04

Kotak Securities Ltd Finquest Securities(P) Ltd CLSA ICICI Securities CLSA Angel Broking Ltd Enam Securities

Motilal Oswal Securities Ltd. Rajat Rajgarhia

RESEARCH METHODOLOGY
3.1. STATEMENT OF THE STUDY

The study conducted on working capital at Jammu & Kashmir bankdeals with the analysis of all working capital aspects of the bank. This project is taken to improve the working cycle of the company and help them to reduce the working capital requirements. 3.2. OBJECTIVES OF THE STUDY

Working capital is the most widely used and powerful technique of Financial Analysis. The main objective of the present study is to know the financial condition of the company. To know the overall operational efficiency and financial performance. To interpret the financial position of company. To assess the long term financial viability of company. To know whether the management is constantly concerned about the overall profitability of the company (or) not. To identify the importance of working capital for investors and other Stockholders. 3.3. SCOPE OF STUDY

The scope of the study is confined to detail analysis of working capital management in THE JAMMU AND KASHMIR BANK LTD 3.4. METHODOLOGY

For the purpose of the study necessary information has been collected through primary and secondary sources.

3.5.

PRIMARY DATA

The primary data are those which are collected a fresh and for the first time,And thus happened to be original in character. Primary data include the Information collected from the officials and existing company throughDiscussions. 3.6. SECONDARY DATA

The secondary data, on the other hand are those which have already been collected by someone else and which have already been passed though the statically process.The secondary data include the information from the company annual reportswhich include financial statement like balance sheet and income statements. And such other information from text books of financial management, journals and magazine has also been collected. 3.7. Limitations of the Study

The study conducted and done is analytical, subject to the following limitations 1) The study is mainly carried out based on the secondary data provided in the financial statements. 2) This study is based on the historical data and information provided in the annual reports therefore it may not be a future indicator. 3) Time: The time allotted for the project has been only around 2 months.

DATA ANALYSIS

4.1. Table showing total Current asset Year 2010 2011 2012 Amount (cr) 221.23 323.60 347.29

4.1. Graph showing total current asset

Current asset
400 350 300 250 200 150 100 50 0 2010 2011 2012 Current asset

Inference: From the above graph it can be seen that the company is able to meet their day to day expenses by allocating the sufficient amount of money towards the current assets. 4.2. Table showing total sales Year 2010 2011 2012 Amount (cr) 581.96 838.13 1296.45

4.2. Graph showing total sales

Total sales
1400 1200 1000 800 600 400 200 0 2010 2011 2012 Total sales

Inference: From the above graph it can be seen that the company is able to increase their turnover by providing better facility to the customer who helps the company to increase their top line.

4.3. Table showing sundry debtors

Year 2010 2011 2012

Amount (cr) 9.47 28.35 1.23

4.3. Graph showing Sundry debtors

sundry debtors
30 25 20 15 10 5 0 2010 2011 2012

sundry debtors

Inference:

The above graph is showing that the companys sundry debtor is keep changing every year. This condition is not healthy for the company.

4.4. Table showing stocks of Raw material

Year 2010 2011 2012

Amount (cr) 75.75 85.15 97.34

4.4. Graph showing stocks of raw material

Raw material
120 100 80 60 40 20 0 2010 2011 2012

Raw material

Inference: From the above graph it can be easily identify that the Company have sufficient amount of raw material was blocked as an inventory.

4.5. Table showing stocks of semi-finished goods

Year 2010 2011 2012

Amount (cr) 15.50 18.75 19.25

4.5. Graph showing semi-finished goods

semi-finished goods
25

20

15 semi-finished goods 10

0 2010 2011 2012

Inference:

From the above graph it can be easily identify that the companys semi-finished goods is in increasing order. This shows that company is fulfilling customers needs & requirements.

4.6. Table showing stocks of finished goods

Year 2010 2011 2012

Amount (cr) 90.80 146.24 188.56

4.6. Graph showing finished goods

Finished goods
200 180 160 140 120 100 80 60 40 20 0 2010 2011 2012 Finished goods

Inference:

The above graph is showing that the companys finished goods are doing well. This states that the company is giving loans, accepting deposits & providing other services like lockers etc.

4.7. Table showing Cash & Bank balance

Year 2010 2011 2012

Amount (cr) 7.22 5.40 5.91

4.7. Graph showing Cash & Bank balance

Cash & Bank balance

8 7 6 5 4 3 2 1 0 2010 2011 2012 Cash & Bank balance

Inference:

The above graph states that the most of the money of the company is blocked in the long term investments rather than the short term.

4.8. Table showing Debtors period (days)

Year 2010 2011 2012

Amount 20 29 10

4.8. Graph showing Debtors period (days)

Debtors period (days)

35 30 25 20 15 10 5 0 2010 2011 2012 Debtors period (days)

Inference:

The above graph states that the debtors period is not constant. They dont have proper time frame to collect money from their debtors which is not good for the company in long term.

4.9. Table showing Creditors period (days)

Year 2010 2011 2012

Amount 37 64 31

4.9. Graph showing Creditors period (days)

Creditors period (days)

70 60 50 40 30 20 10 0 2010 2011 2012 Creditors period (days)

Inference:

The above graph states that the company is doing well with its credit policies. But in the year of 2012 the company is not doing so well they should increase their credit period.

4.10. Table showing Operating cycle

Year 2010 2011 2012

Amount (days) 105 80 72

4.10. Graph showing Operating cycle

Operating cycle
120 100 80 60 40 20 0 2010 2011 2012

Working cycle

Inference:

The above graph states that the operating cycle of the company is doing as good as its in the decreasing order which is reducing the working capital requirements.

4.11. Table showing Current ratio

Year 2010 2011 2012

Amount (times) 1.41 1.29 1.39

4.11. Graph showing Current ratio

Current ratio
1.42 1.4 1.38 1.36 1.34 1.32 1.3 1.28 1.26 1.24 1.22 2010 2011 2012 Current ratio

Inference: The above graph states that the current ratio of the company is not good because its less than 2.

FINDINGS
The company is able to meet their day to day expenses by allocating the sufficient amount of money towards the current assets. The company is able to increase their turnover by providing better facility to the customer which helps the company to increase their top line. The companys sundry debtor is changing every year. This condition is not healthy for the company. The company has sufficient amount of raw material was blocked as an inventory. The companys semi-finished goods are in increasing order. This shows that company is fulfilling customers needs & requirements. The companys finished goods are doing well. This states that the company is giving loans, accepting deposits & providing other services like lockers etc. The company is blocked in the long term investments rather than the short term. The debtors period is keep fluctuating. They dont have proper time frame to collect money from their debtors which is not good for the company in long term. The company is doing well with its credit policies. But in the year of 2012 the company is not doing so well they should increase their credit period. The working cycle of the company is doing as good as it is in the decreasing order which is reducing the working capital requirements. The current ratio of the company is not good because its less than 2.

CONCLUSION
Working capital management analysis is an in-depth analysis. Coverages the entire financial management with refers to integrated. The JAMMU AND KASHMIR BANK LTD is company, which give preference to the common mans privilege. Hence, it is on integrated approach and constant measure may be adopted for better managerial performance. Working capital analysis, its criteria is distinctive work while and commendable technique in postulating the financial behavior of business enterprise.

RECOMMENDATIONS

1. The bank has got a great image particularly in India. So it should take such initiatives so as to make the country a self-sustained and financially independent.

2. The drive should be started by the bank to restore the sick industries in the country; it will help the bank as well as generate employment opportunities for the youth.

3. The Bank should help to make business activities safe in the society by providing schemes which are least risky. 4. The Banks current relations with their debtors are not looking too good which might be a problem in the future. 5. The long-term policies of the Bank is doing very good but the short-term policies are not performing that well which can lead to a downfall of the bank.

BIBLIOGRAPHY
The official site is www.jkbank.net http://www.jkbank.net/customerHousingLoans.php http://www.jkbank.net/customerPersonalLoans.php http://www.jkbank.net/customerEducationalLoans.php http://www.jkbank.net/customerAutoLoans.php http://www.jkbank.net/customerAgriLoans.php http://www.jkbank.net/customerCraftLoans.php http://www.jkbank.net/investorShare.php http://www.jkbank.net/supportServices.php http://www.jkbank.net/thirdPartyServices.php http://www.jkbank.net/cashMS.php http://www.jkbank.net/history.php http://www.jkbank.net/board.php http://www.jkbank.net/newwid.php http://www.jkbank.net/csr.php

 Working capital management by P.V Kulkarni, 13th Revised Edition and published by Himalaya Publishing House Private Ltd.