Introduction To Finance:: A Study On Funds Management

A Study on Funds Management INTRODUCTION TO FINANCE:
Finance is regarded as the LIFE BLOOD OF A BUSINESS ENTERPRISE. This is because in the modern money-oriented economy finance is one of the basic foundations of all kinds of economic activities. It is the master key, which provides access to all the sources for being employed in manufacturing and merchandising activities. It has rightly been said that business needs money, only when it is properly managed. Hence, efficient management of every business enterprise is closely linked with efficient management of every business enterprise is closely linked with efficient management of its finances. Finance is defined as study of money management. It is often descri bed as a part of the nervous system of a business. In its overall sense, finance embraces many areas other than corporation finance, money, banking, and credit of various types and classes. Considered as whole, finance may be said to be the circulating system of this economy body making possible the needed co-operation between any units of activity. The dimensions of finance have undergone phenomenal transformation during the last few decades. Until the recent past, finance was considered as an economic activity, concerned with procurement of funds for business purpose and the financial managers was considered the keepers of books of accounts and providers of capital needed by the enterprise. However, the financial managers are now become an integral part of the enterprise and are involved in the problems of decisions pertaining to the management of the asset of the enterprise.
FINANCE FUNCTION:
Finance function is the important of all business functions. It remains a focus of all activities. It is not possible to substitute or eliminate this function because the business will close down in the absence of finance. The need for money is continuous. It starts with setting up the enterprise and remains at all the times. The development and expansion of business rather needs more commitment of funds. The fund will have to be raised from various sources. The sources will be selected in relation to implications attached with them. The success of finance function will depend upon its planning. The receiving of money is not enough, its utilization is more important. The money once received will have to be returned
IFIM COLLEGE BANGALORE
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A Study on Funds Management
Also. If its use is proper then its return will be easy otherwise it will create difficulties for repayment. The management should have an idea of using the money profitability. It may be easy to raise funds but it may be difficult to repay them. The inflows and outflows of funds should be properly matched.
OBJECTIVES OF FINANCE FUNCTION ARE:

Mobilization of resources for the economy. Channelizing the money in productive activities. Generating income or profit. Creating assets for the use of masses. Contribution to the activities of promotion of the economy. A number of approaches are associated with the finance function The first approach to finance function is related to the providing of funds needed by a business on most suitable terms. This approach confines this function only to raising of funds. The utilization of funds is considered out of the purview of the finance manager. It is felt that decisions regarding the application of funds are taken somewhere else in the organization. However, institutions and instruments for raising funds are a part of finance function. This function is wider than merely finding out sources of funds. Another approach relates finance function to cash. Every transaction in business is directly or indirectly connected with cash. This approach implies that finance function is not that board is implied by this approach. Third approach to this function envisages the raising of funds and their effective utilization. Finance function does not stop only by finding out sources and raising enough funds. Their proper utilization is also under its purview. The cost of raising funds and the return from their use should be compared. The funds should be able to
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Give more returns than the cost involved in procuring them. The utilization of funds involves decision making. So finance function covers financial planning, rising of funds, allocation of funds, financial control, etc. The aim of finance function is to arrange as much funds for the business as required from time to time. This function has the following aims.
1. Acquiring sufficient funds:

The aim of finance function is to assess the financial needs an enterprise and then finding out suitable sources for raising them. The sources should be commensurate with the needs of the business. If funds are needed for longer periods then long term sources like share capital, debentures, term loans may be explored. A concern with longer gestation period should rely more on owners funds instead of interest bearing securities because profits may not be there for some years.
2. Proper utilization of funds:

Though raising of funds is important but their effective utilization is more important. The funds should be used in such a way that maximum benefit is derived from them. The return from there should be more than their cost. It should be ensured that funds do not remain idle at any point of time. The funds committed to various operations should be effectively utilized. Those projects should be preferred which are beneficial to the business.
3. Increasing profitability:
The planning and control of finance function aims at increasing profitability of the concern. It is true that money generates money. To increase profitability, sufficient funds will have to be invested. Finance function should be so planned that the concern neither suffers from inadequacy of funds nor wastes more funds then required. A proper control should also be exercised so that scarce resources are not fulfilled away on uneconomical operations. The cost of acquiring funds also influences profitability of the business. If the cost of raising funds is more, the profitability will go down. Finance function also requires matching of cost and return from funds.
4. Maximizing concerns value:

Finance function also aims at maximizing the value of the firm. It is generally said that a concerns value is linked with its profitability. Even though profitability influences a firms value but it is not all. Besides profit, the type of sources used for raising funds, the cost of funds, the conditions of money market, the demand for products are some other considerations which also influence a firms value.
FUND FLOW ANALYSIS:

The fund flow analysis is taken is undertaken to highlight changes in the financial condition of a business concern over a period of time. The FUNDS FLOW STATEMENT is a statement, which shows the movement of funds on the report of the financial operations of the business undertaking. It indicates various means by which funds were during the particular period and the ways in which these funds were employed. In simple words, it is a statement of sources and application of funds. This statement is derived from an analysis of the changes that have occurred in the assets and liabilities items between the two balance sheets dates. With the help of the statement, an analyst can judge the liquidity position of the board, and the spending and financing habits of the management. In several instances, a board has a fairly good earning record, yet it may experience a shortage of liquid resources, which may often impel it towards liquidation. Contrary to this, despite low profits, a board may be placed comfortably with respect to working capital. Furthermore, the funds flow statement provides an insight in to financing pattern of an enterprise. An analysis of the major sources of funds in the past reveals what portion of the growth was financed by internal resources and what portion of external resources. It shows weather the board has been expanding its scale of business by building up additional plant
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and equipments or by increasing its sales, or whether it is involved in purely routine affairs of distributing dividends and redeeming long-term debts.
FUNDS:
In a narrow sense, fund means cash only. In border sense, it refers to money values in whatever form it may exist. In a popular sense, it means working capital, i.e., the excess of current assets over current liabilities.
FLOW OF FUNDS:
The term flow means movement and includes both inflow and outflow. The term flow of funds means transfer of economic values from one asset of equity to another. The flow of funds occur when a transaction changes on the one hand a non-current account and on the other on the other a current account and vice-versa. Flow of funds is said to have taken place when any transaction makes changes in the amount of funds available before happening of the transaction. If the effect of transaction in the increase of funds, it is called a source of funds and if it results in the decrease of funds, it is known as an application of funds.
FUNDS FLOW STATEMENT:

In every concern, the funds flow in from different sources and similarly funds are invested in various source of investment. It is a continuous process. The study and control of this funds flow process (i.e., the uses of sources of funds) is the main objective of financial management to assess the soundness and the solvency of the enterprise. The funds-flow statement is a report on financial operation changes, flow of movements during the period. It is a statement which shows the sources and application of funds or how its shows the activities of a business or finances in a particular period. In other words, such a statement shows how the financial resources have been used during a particular period of time. It is thus a historical statement showing sources and applications of funds between the two dates designed especially to analyze the changes in the financial conditions of an enterprise.
In the words of FOULKE, it is A statement of sources and application of funds is a technical device designed to analyze the changes in the financial condition of a business enterprises between two dates.
SOURCES OF FUNDS:
Transaction that increase working capital are sources of funds of them are 1. Funds from operations. 2. Funds from issues of share capital. 3. Funds from issue of debentures, acceptance of public deposits and other long-term loans. 4. Sales of fixed assets.
APPLICATION OF FUNDS:
The following are application of funds 1. LOSS FROM OPERATION: loss from operations either decreases the current assets or increases the current liabilities or in other words reduces the funds. It may either be shown as application of funds statement or as a reduction in sources of funds. 2. PURCHASES OF FIXED ASSETS: If any fixed asset like building,
machinery, furniture, or investment is purchased, it will reduces the current assets [cash] without any corresponding decrease in current liability it is thus an application of funds. 3. REPAYMENT OF LOANS: Redemption of debentures or preference share capital. Any such repayment including the payment of premium on redemption of debentures or preference shares is an application of funds because it reduces the current assets.
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4. PAYMENT OF DIVIDEND: Payment of dividend [and not proposed dividend] is an application of fund 5. OTHER APPLICTIONS: Any loss such as embezzlement, compensation, donations etc. Involving cash is an application of funds.
Increase in working capital: Increase in working capital [as per schedule of changes in working capital] represents investment in current assets hence it is an application of funds. In other words, the excess of sources over application of funds is increase in working capital.
IMPORTANCE OF FUND FLOW STATEMENT

Fund flow statement is analytical tool in the hands of financial manager. The basic purpose of this statement is to indicate an historical basis the changes in working capital i.e., where funds come from and were there are used during a given period. The utility of fund floe statement can be measured on the basis of its contribution to the financial management. It generally serves the following purpose they are given below 1. Analysis of financial position: The basic purpose of preparing the statement is to have a rich into financial operations of the concerns. It analyses how the funds were obtained and used in the past. In the sense, it is a valuable tool for the finance manager for analyzing the past and future plans of the firm and their impact on the liquidity. He can reduce the reasons for imbalances in uses of funds in the past to take necessary corrective actions. In analyzing the financial position of the firm, the fund floe statement answers such question as Why were the net current assets of the firm down, though the net income was up or vice versa? How was it possible to distribute the dividends in absence of or in excess of current income for the period/ How was the sale proceeds of plants and machinery used?

How were the debts retired? What became to the proceeds of plant of share issue or debenture issue? How was the increase in the working capital financed? Where did the profits go? Though it is not an easy job to find the definite answer to such question because funds derived from a particular source are rarely used for a particular purpose. However, certain useful assumptions can often be made and reasonable conclusions are usually not difficult to arrive at. 2. Evaluation of the firms financing: One important use of the statement is that it evaluates the firm financing capacity. The analysis of sources of funds reveals of the firms financed its development in projects in the past i.e., from internal sources or from external sources. It also reveals the rate of growth of the firm. 3. An instrument for allocation of resources: In modern large scale business available funds are always short for expansion programs and there is always a problem of allocation of resources. It is therefore a need of evolving an order of priorities for putting through their expansion programs which are faced accordingly and funds have to be arranged as different phases of programs get in to their stride. The amount of funds to be available for this project shall be estimated from finance with the help of fund flow statement. This prevents the business from becoming a helpless victim of unplanned action. 4. A tool of communication to outside world: Fund flow statement helps in gathering the financial statement of business. It gives an insight into the evolution of the present financial position and gives answer to the problem where have our resources been moving? in the present world of credit financing, it provides useful information to bankers, creditors, financers, government etc regarding amount of loan required and its purpose, the term of repayment and sources of repayment of loan etc. the financial manager gains a confidence born out of a study of fund flow statement.
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5. Future guide: An analysis of fund flow statement of several years certain valuable information for the financial manager for planning the future financial requirements of the firm and their nature too i.e., short-term, long-term or midterm. The management can formulate its financial policies based on information gathered from the analysis of such statement. Financial manager can rearrange the firms financing more effectively on the basis of such information along with the expected changes in trade payables and the various accruals. In this way it guides the management in arranging its financing more effectively.
LIMITATION OF FUND FLOW STATEMENT:

The fund flow statement has a number of uses however; it has certain limitations also which are listed below It has been remembered that fund flow statements is not a substitute of an income statement or a balance sheet. It provides only some addition as regards changes in working capital. It cannot reveal continuous changes. It is not an original statement but simply re-arrangement of data given in the financial statements. It is essentially historic in nature and projected fund flow statement cannot be prepared with much accuracy. Changes in cash are more important and relevant for financial management than the working capital.
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RESEARCH DESIGN
TITLE OF THE STUDY

"A STUDY ON THE FUND MANAGEMENT WITH REFERNECE TO KARNATAKA SOAPS AND DETERGENTS LIMITED
STATEMENT OF THE PROBLEM:

Funds management is one of the crucial function of the top level management which will influence the profitability and financial position of the company so there is lot of problems involved in the managing of funds of the company, this study is an attempt to understand the sources and deployment of funds by the Karnataka soaps and detergents ltd and evaluate its operating efficiency, also there is a need for research on funds management. Analysis of funds management performance is one of the major requirements for planning because owners, management, creditors, prospective investors, and employees are involved in the decision making process. Government and financial institutions require it, as they are interested to know the financial soundness of the company. This underlines the importance of funds management analysis and the current study is conducted to investigate into funds management to evaluate the performance and profitability of Karnataka Soaps and Detergents Ltd.
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OBJECTIVES OF THE STUDY:

Following are the objectives of analyzing the Funds management: To evaluate the statement of sources and application of funds of KS & DL over the past five years. To analyze present and future earning capacity of profitability of KS&DL, To understand the short-term and long term solvency of KS&DL for the benefit of the debenture holders and trade creditors. To evaluate financial stability of KS&DL. To study the income and expenditure of KS & DL. To evaluate operational efficiency of KS&DL as a whole and of its various parts or departments.
SCOPE OF THE STUDY:

The scope of the study covers evaluating the Funds management by analyzing the financial statement of Karnataka Soaps and Detergent Limited which was collected from the present record and from discussion with the companys accountant. The study aims at analyzing the comparative balance sheet of Karnataka Soaps and Detergent Limited over last five years and interpreting how working capital is managed and also the different ratios and suggesting remedies for better performance.
This Study gives the information about financial aspects of KS&DL from 2009 to 2012. This study was done in the time duration of 4 weeks from the information provided by concerned officials of KS&DL.
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RESEARCH METHODOGY
The purpose of methodology is to describe the process involved in research work. This includes the overall research design, data collection method, the field survey and the analysis of data
RESEARCH DESIGN
A research design is a logically and systematic plan prepared for directing a research study. It specifies the objectives of the study, the methodology and the techniques to be adopted for achieving the objectives. It constitutes the blue print for the collection, measurement and analysis of data It is an outline that specifies the sources and the types of information relevant to the research question. It is a blue print specifying the methods to be adopted for gathering and analysis the data. It should facilitate in obtaining required information. It should suit to the availability of resources and time.
TYPE OF STUDY
The research is made in a descriptive way of study. The financial statements are analyzed through various tools of financial statements analyses. Analytical method of study is done by following the trend analysis relating to the source and deployment of funds which helps to analyze financial statement of the company. The analysis is done by the trend series and certain financial ratios.
SOURCES OF DATA
The source of data collected for this study could be broadly classified in two categories.
1. PRIMARY DATA:
The tools used for primary data collections are purely based on personal enquiry with the executives and staff of the entire department including finance department for

collecting data about the company. The enquiry was done in order to achieve and collect much information to make the project more effective.
2. SECONDARY DATA:
The secondary data has been collected from various published sources like journals, magazines etc. It is also obtained from published sources like annual reports, company profile, books of accounts, other relevant text book etc.
PLAN OF ANALYSIS
The data collected from the secondary sources have to be processed & interpreted systematically it includes such as: Interpretation of the study for 5years. Application of ratio analysis for the period of the study Identification of the changes in the working capital with the increase or decrease of
the amount in the balance sheet of 5 years. Calculation of various ratios reflecting the current ratio, quick ratio, cash ratio,
inventory turnover ratio, creditors turnover ratio, average payment period, working capital ratio etc..
LIMITATION OF THE STUDY

Study of funds management is limited to the information gathered through the enquiry and discussions with the company officials and executives. The period of study was very less. Inter firm and Intra firm comparison is not possible. Analysis of the study was dependent on the information provided by the organization. The study is done only on the basis of financial statement of 5years only.
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A Study on Funds Management CHAPTER SCHEME

I. INTRODUCTION: This chapter includes introduction to finance and fund flow statements and importance of funds.
II.
RESEARCH DESIGN: Introduction, meaning, definition of research design. Nature/essential of a good research design. It also includes Title of the project, statement of the problem, objective of the study, research technique, sampling design, methods of data collection, tools of data collection, plan of analysis, limitations of the study, chapter scheme.
III.
COMPANY PROFILE: This chapter gives us the profile of KS&DL. It provides details regarding KS&DL, nature of its activities, organizational structure, functional departments, its vision and mission, business operations, product profile, market status, competitors, a brief SWOT analysis and future prospects for the growth of KS&DL.
IV.
DATA ANALYSIS AND INTERPRETATION: This chapter focuses upon the data which is collected to know the funds management of KS & DL through the comparative balance sheet. This chapter also shows various ratios like current ratio, liquidity ratio, turnover ratios and the liquidity position of KS&DL.
V.
SUMMARY OF FINDINGS SUGGESTIONS AND CONCLUSION: This chapter of the study includes the findings of the overall study at KS&DL on basis of data analysis and the conclusion which is online with objectives of the research.
VI.
BIBILIOGRAPHY, APPENDICES AND ANNEXURES:
This chapter includes the bibliography of the study and balance sheet of the organization.
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A Study on Funds Management PROFILE OF THE COMPANY INTRODUCTION TO SOAP INDUSTRY:

Soap is one of the commodities which have become an indispensable part of the life of modern world. Since it is non durable consumer goods, there is a large market for it. The whole soap industry is experiencing changes due to innumerable reasons such as government relations environment and energy problems increase in cost of raw material etc. The changing technology and ever existing desire by the individual and the organization to produce a better product at a more economical rate has also acted as catalyst for the dynamic process of change. More and more soap manufactures are trying to capture a commanding market share by introducing new products. The soap industry in India faces a cut throat competition with multinational companies dominate the market. T h e y a r e a l s o f a c i n g s e v e r e t h r e a t f r o m dynamic and enterprising new entrance especially during 1991-92.If we look back into the history of soaps & detergents, mankind knew about soaps nearly 2000 years back i.e. in 70 A.D. when Mr. Elder accidentally discovered the soap, when r o a s t e d m e a t o v e r f l o w e d o n t h e g l o w i n a s h e s . T h i s l u m p l i k e p r o d u c t w a s s o a p & h a d foaming & cleansing character. In 1192 A.D. the first commercial batch of soaps was made &marketed by M/s Bristol soap market in London, from there in 1662A.D. the first patent for making soap was taken in London. The world consumption of soap in 1884A.D. was said to be 2 lakh tonnes p.a. Soap manufacturing was started in North America. Some American companies with well known names were started 200 years ago. During middle age soap was made at various places in Italy, France, England & other countries. France became famous & many small factories were established there.
In India the first soap industry was established by North West soap company in1897 at Meerut following the swadeshi movement. From 1905 onwards few more factories were setup. They are, Mysore government soap factory at Bangalore Godrej soap at Bombay Bengal chemicals Tata oil mills 1930 lever brothers comp
THE INDIAN SOAP INDUSTRY SCENARIO:

The Indian soap industry has long been dominated by hand full of companies such as: 1. Hindustan levers limited 2. Tata oil mills (taken over by HLL) 3. Godrej soaps private limited.

4. Recent entrants include Colgate Palmolive Ltd, Proctor & Gamble Ltd, Nirma Soap works, Wipro Ltd etc. The Indian soap industry continued to flourish very well until 1967-68, but began to stagnate & soon it started to recover & experienced a short upswing in 1974. This increase in demand can be attributed due to; 1. Growth of population. 2 . In c o m e & c o n s u m p t i o n i n c r e a s e . 3. Increase in urbanization. 4 . G r o w t h i n d e gr e e o f p e r s o n a l h yg i e n e .
Soap manufacturers are classified as 1. Organized. 2. Unorganized.
PRESENT STATUS:
Market scenario:
India is the ideal market for cleaning products. Hindustan liver, which towers over the cleaning business, sells in all over the cleaning business but the tiniest of Indian settlements. The 7.4 lakhs tons per annum soap market in India in crawling along at 4%The hope lies in raising Rupee worth, the potential for which is high because the Indian soap market is pseudo in nature & it is amazingly complex being segmented not only on the basis of price benefits, but even a range of emotions within that outlining framework.
PROBLEMS OF SOAP & DETERGENT INDUSTRY:

Soap industry faces some problems in case of raw materials. The major ingredients are s o a p a s h , l i n e a r a l k yl , b e n z e n e & s o d i u m . T r i p o l i p h o s p h a t e p o s e s n u m b e r o f s e r i o u s problems in terms of availability. The demand supply gap for vegetable oil is 1.5 to 2 lakh tons & is met through imports. In recent times, caustic soda and soap ashes in the cheaper varieties of soaps are quite high.
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A Study on Funds Management COMPANY PROFILE THE FOUNDERS OF MYSORE SANDAL SOAP:
Sir M. Visvesvaraya
Nalwadi krishnaraja Wodeyar
Sri S. G. Shastri HISTORY OF KARNATAKA SOAPS AND DETERGENTS LIMITED:
India is rich land of forest, ivory, silk, sandal, precious gems are magical charms of centuries. The most enchanting perfumes of the world got their exotic smell with a twist of sandal. The worlds richest sandalwood resource is from isolated stretch of forests land in south India in Karnataka. The origin of sandalwood and its oil in Karnataka, which is used in making of Mysore sandal soaps, is well known as fragrant ambassador of India and sandal wood oil is in fact known as LIQUID GOLD.

By the inspiration of his highness Maharaja of Mysore late Jayachamarajendra wodeyar, the trading of sandalwood logs started which was exported to Europe and new destinations, but with commencement of First World War faced severe crisis on the business of sandalwood. This situation gave arise to start of an industry, which produces value added products i.e., of sandalwood oil. His highness maharaja of Mysore created this situation as an opportunity by sowing the seed of the government sandalwood oil factory, which is present Karnataka soaps and detergents Ltd. The project was shaped with the engineering skills and expertise of the top level. Sir M.Visvesvarya, the great engineer who was the man behind the project. Government soap Factory in Bangalore was established by the Maharaja of Mysore Nalwadi Krishna raja Wodeyar and Diwan Sir M. Visvesvaraya during the year 1916. The soap making process was perfected under the stewardship of eminent scientist Shri S. G. Shastri. The sandalwood Oil Division in Mysore was established during the year 1916 and Sandalwood Oil Division at Shimoga was established during the year 1944. Karnataka soaps and detergents limited [KS&DL] a Government of Karnataka undertaking is involved in the extraction of sandalwood oil and in the manufacture of soaps, Detergents, Incense sticks and sandal Talc, having over 9 decades of experience in this field. KS&DL today is one of the largest producers of sandalwood oil and sandal soap in the world, with a turnover of Rs.125crs. The sandal soaps of KS&DL have a definite niche in the soap market with the oldest known perfumery material sandalwood as its main ingredient. Sandal Soaps of KS&DL are probably the only soap in the world with pure natural sandalwood oil. KS&DL is the true inheritor of Indias golden sandalwood legacy, the sandalwood oil which is also known as Liquid Gold. Sandal wood oil is recommended in ancient ayurvedic texts for skin care, has excellent antiseptic properties and soothes prickly heat and other skin rashes too. This is the reason why soaps made out of sandalwood oil are used all over the world for nourishing and softening the skin. It was the availability of sandal wood oil, which became a reason to set up a soap factory.
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A Study on Funds Management RENAMING:

On 1st October 1980, the Government Soap Factory was renamed as Karnataka Soaps and Detergent Limited by integrating sandal oil factories at Mysore, Shimoga and Bangalore. The Company was registered as a public limited company. Today Company produces varieties of products in the toilet soaps, detergent, agarbathies and Cosmetics.
TRADEMARK OF KS & DL:
THE SHARABHA The carving on the cover is the Sharabha, the trademark of KS & DL. The Sharabha is a mythological creation from the PURANAS which has a body of a lion and head of elephant, which embodies the combined virtues of wisdom and strength. It is adopted as an official emblem of KS& DL to symbolize the philosophy of the company. The Sharabha thus symbolized a power that removes imperfections and impurities. The Maharaja of Mysore adopted it as his official emblem and soon took its pride of place as the symbol of government soap factory of qualities that reflects a standard of excellence of Karnataka soaps & detergent Ltd.
SLOGAN:
NATURAL PRODUCTS WITH EXOTIC FRAGRANCES KS &DL has a long tradition of maintaining the highest quality standard, right from the selection of raw materials to processing and packing of the end product. The reasons why its products are much in demand globally and are exported regularly to UAE, Bahrain, Saudi Arabia, Kuwait, Qatar, South America. The entire toilet soaps of KS & DL are made from raw materials of vegetable origin and are totally free from animal fats.
A Study on Funds Management VISION STATEMENT:

Keeping pace with globalization, global trends and the states policy for technology in every aspect of governance. Ensuring global presence of Mysore Sandal products while leveraging its unique strengths to take advantage of the current technology scenario by intelligent and selective diversification. Further, ensure Karnatakas pre-eminent status as a proponent and provider of technology services to the world, nation, other states public and private sectors. Making all out efforts to achieve reasonable profits. Most importantly to earn the invaluable foreign exchange, both to the state and to the country.
MISSION STATEMENT:
To serve the National economy. To attain self-reliance. To promote purity & quality products To maintain the Brand loyalty of its customers. To build upon the reputation of Mysore sandal soap based on pure sandal oil.
OBJECTIVES OF KS & DL:

To attain self reliance. To promote and uphold its image as symbol of traditional products To promote purity and quality products and thus enhance age old charm of Sandalwood Oil. To build upon the reputation of Mysore Sandal soap based on pure sandal oil. To maintain the brand loyalty of its customer. To supply the products mentioned above at most reasonable and competitive rate.
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A Study on Funds Management POLICY OF KS&DL:

Seek purchase of goods and services from environment responsible suppliers. Communicate its environment policy and best practices to all its employees implications. Set targets and monitor progress through internal and external audits. Strive to design and develop products, which have friendly environmental impact during manufacturing. Reuse and recycle materials wherever possible and minimize energy consumption and waste.
COMPETITORS OF KS&DL PRODUCT AND SERVICES:

KS&DL is facing cut-throat competition in national and international market. Some of its main competitors are 1. M/S. Hindustan Unilever Ltd 2. M/S. Godrej Soaps Private Ltd 3. M/S. Proctor& Gamble 4. M/S. Wipro 5. M/S. Nirma Soaps Private Ltd 6. M/S. Jyothi Laboratories
DEPARTMENTS OF KS&DL:
1. Human Resources and Administration 2. Production Department 3. Marketing Department

4. Finance\Accounts Department 5. Research & Development Department 6. Stores Department 7. Welfare Department 8. Maintenance Department 9. Materials Department 10. Management Information System Department
AN ISO-9001 AND ISO-14001 COMPANY:

KS & DL with a tradition of excellence of over eight decades is committed to customer delight, through total quality management and continuous improvement through
the involvement of all employees. KS&DL has got ISO 9002 certificate. The Company got itself upgraded to ISO-9001-2004, Quality Systems in the year 2004-05 The company is located in the heart of the Bangalore city. The management of the company took a decision to get the ISO-14001 and become model to other public sector for the techniques used and also to other Government units to spread the message of maintenance of environment. ISO-14001 and ISO-9001 will facilitate to improve the corporate brands in the global market and it will help the company to improve the profits, year after year on long-term basis. The environment management system adopted in the company through this motive as follows: Conservation of energy Conservation of Surrounding Conservation of resources
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PRESENT STATUS OF THE COMPANY

The company is mainly dependent on southern market. The product availability in retail outlets particularly for Mysore sandal soap is almost comparable to any other similar industries products in the premium segment in the south. Whereas in other parts like Eastern and Northern markets presentations of KS &DL product is relatively poor, which depends on the companys distribution structure, stockiest and field personnel strength. With increased trust on distribution, the company does not foresee any problem to achieve the projected sales through the redistribution package. Further the policy of Indian government also sees the public sector enterprises enter the industry in a large way there by making the products available to the consumers at reasonable prices. Being located in the southern part of the India the government soap factory claims preferential treatment for expansion programme in view of availability of exotic natural sandalwood oil. 1. The company has entered into shampoo, dish wash, detergent bar & room refresher. 2. The company is striving to develop new perfumes for soaps detergents, agarbathies & shampoo. The company wants to improve the existing products in terms of quality.
KS & DL AT GLANCE:
Incorporated name : Karnataka Soaps and Detergents Limited.
Address
: Karnataka Soaps and Detergent Limited, Bangalore Pune highway. Post Box No.5531, Rajajinagar,
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Bangalore-560055. Ph: 080-23377691/22376922/23/24. Email: Mysoresnadal@vsnl.com Website: www.mysoresandal.com
Year of establishment
: 1918
Constitution
: wholly owned by Govt of Karnataka Undertaking.
Management
: Govt of Karnataka nominates/appoints Board of Directors, Chairman & MD.
Renamed Trademark
: 1980 : The trademark is SHARABHA. It is the Body of lion with the head of an elephant It means blending the intelligence of lion And the strength of an elephant.
Production range
: Toilet soaps, bar soaps, detergent cakes Powders, agarbathies, cosmetics, baby Products, sandalwood oil.
Process Known how
: The facility is a pioneer in the Manufactures of various soaps and
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Technology imported from Italy.
Capacity of the unit
: Licensed capacity is 26,000 metric tons Of soaps & 10,000 metric tons of Detergents per annum.
PLANTS
: AT BANGALORE Soap plant Detergent plant Fatty acid AT MYSORE Sandal wood oil Agarbathies AT SHIMOGA Duty paid go down
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PRODUCT PROFILE:
KS&DL is the true inheritor of golden legacy of India. Continuing the tradition of excellence for over eight decades, using only the best East Indian grade Sandalwood oil & Sandalwood soaps in the world. The products produced at KS&DL are the Soaps, Detergents, Agarbathies and Sandalwood oil.
PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL SOAP:

o Mysore Sandal Soap (75gm, 125gm & 150gm) As per weight its available of Rs.10, 20, 25 Respectively. o Mysore Sandal Special Soap Available mostly in 75 grams pack and having sandalwood and almond oil as ingredients.
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o Mysore Sandal Baby Soap This soap is mainly for babies made of ingredients suitable for babies soft and sensitive skin.
o Three-In-One Gift Pack (SJR) 3Tabs
(150gm Each)
o Mysore Sandal Gold Soap
(125gm)
o Mysore Rose Soap
(100gm)
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o Six-In-One Gift Pack- 6Tabs
(150gm Each)
o Mysore Sandal Gold sixes 6 Tabs
(125gm Each)
o Mysore Sandal Soap Bath Tablet Trio 3nos. (150gm Each)
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DETERGENTS:
KS&DL also manufactures high quality detergents applying the latest spray drying technology with well balanced formulation of active matters & other builders; they provide the ultimate washing powder. 1. Sensor Detergent Powder (1kg/2kg)
2. Mysore Detergent Powder (1kg/500gms) 3. Mysore Detergent bar 4. Mysore Detergent Cake (250gms) (125gms/250gms)
AGARBATHIS:
1. Mysore Sandal premium 2. Mysore Rose 3. Suprabath 4. Parijata 5. Venkateshwar 6. Ayyappa 7. Chandhana 8. Mysore sandal 9. Nagachampa 10. Mysore Jasmine 11. Bodhisattva 12. Durga 13. Alif Laila
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SANDALWOOD OIL:
In 5ml, 10ml, 20ml, 100ml, 500ml, 2kg, 5kg, 20kg and 25kg packing.
POWDERS:
1. Mysore Sandal Talk: Cooling & Healing, Fragrant freshness, Net. Wt 20gm, 60gm, 300gm and 1kg. 2. Mysore Sandal Baby Powder: Tender loving care for baby& Mummy. Net wt 100 400gms.
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EXPORTS FROM KS&DL:

1. Middle East Countries. 2. Asian Countries. 3. American Countries. 4. European Countries. 5. Australia and New Zealand. 6. African countries.
COMPETITORS INFORMATION AND THEIR MARKET SHARE

Hindustan Univer Limited Godrej Procter & Gamble KS & DL Others 70% 4% 10% 11% 5%
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INFRASTRUCTURAL FACILITIES
1. Canteen facility 2. library 3. Car parking 4. Waiting room
ACHIEVEMENTS AND AWARDS OF KARNATAKA SOAPS AND DETERGENTS LIMITED:

Government of Karnataka Dept of Industries and commerce State Export Promotion Advisory Board. EXPORT AWARD 1974-75 Detergent plant M/s Chemical Bombay have given 1st price for the year 1980-1981 Geographical Indication GI-2005 ISO 9001-2000 in the year 1999 ISO 14001-2004 in the year 2000
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WORK FLOW MODEL:
SILOS (Silos are closed chambers) Soaps Noodles Container Mixer Simplex Plodder It becomes NOODLES Milling It becomes soap ribbons Duplex plodder cutting Machine cakes are led To stamping machine Wrapping Machine Led through conveyor belt
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FUTURE GROWTH AND PROSPECTUS:

Introduction of anti-bacteria, herbal transparent soap, made out of 33 essential oil based Timely introduction and implementation of market driven decisions. Improvement in existing products Mysore Sandal classic improved & skin conditions. Introduction of sandalwood powder in 50gms, 100gms to meet the growing demand for religious purpose. Introduction of new higher powered detergent powder for institutional sales in bulk packaging. To attain market leadership. Introduction of new trade schemes to increase sales. Aggressive advertisement and publicity as part of sales promotion. Reduction in distribution expenses and cost reduction in all areas. moisturizers
BANKERS:
KARNATAKA SOAPS AND DETERGENTS LIMITED being a huge organization, should possess better banking facilitates to meet the timely requirements of capital of the company & to fulfill the financial obligations of supplies, customers & other personnel having relationship with the company. The Bankers of the company are: STATE BANK OF MYSORE CANARA BANK VIJAYA BANK SYNDICATE BANK
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A Study on Funds Management ORGANISATION CHART OF FINANCE FUNCTION:

The below chart shows the organization structure of KS&DL. It shows the hierarchy in which the authority and responsibility flows at KS&DL. A typical organization chart of finance function of a company is given
Managing Director
General Manager
AGM (Costing)/
AGM (Bills) Junior Officer
Manager
(PR&PF)
Manager
(LS)
AGM
(Accounts)/AGM (CE&C)
Junior Officer
Junior Officer
Sr Assistant
Sr Assistant
Sr Assistant
Jr Assistant
Jr Assistant
Jr Assistant
LEVELS OF ORGANISATION:
The organization of KS&DL consists of 4 levels, they are TOP LEVEL consisting of Board of Directors and Managing Director. SECOND LEVEL consisting of Directors of Finance and Special officers THIRD LEVEL consisting of senior managers, deputy managers and officers. FOURTH LEVEL consisting of clerks, Assistants and Attendees.
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A Study on Funds Management STAFF AND ITS APPLICATIONS

KS & DL has several advantages relating to staff. KS & DL has a dedicated work force of 712 professionals, which share the vision of the KS & DL. Training and development is a continuous process at KS & DL, which has been intensified to tune the staff to the organizational environment requirement. It also hires the qualified technicians and professionals to carry out the project at economical rate.
SWOT ANALYSIS: 1. STRENGTHS:

The Mysore sandal soap contains pure sandal and almond oil. Certified by ISO. Worlds largest production of sandalwood oil. Brand name from decades in soap market. It has very good dealership network in south which ensures that the products reach every customer. Diversified product range helps the company to maintain stability.
2. WEAKNESSESS:
Distribution network is weak in north and east. Absence of television advertisement. High oriented cost due to excessive labor force. Neglecting freshness aspect. Low turnover resulting in low profit.
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A Study on Funds Management 3. OPPORTUNITIES:

Traditional benefits that sandal is good for skin. Skin care is just gaining importance among consumers As a soap attribute. Government support and large production capacity. Advantages of being in the industry for a long time. Existence of vast market and huge demand.
4. THREATS:
There are other competitors such as Rexona, Moti, Santoor etc There is a need for renovation of plant and machinery. Government policy may reduce growth potential. Other sandal soaps in the market. Entry of new multinational in soap business.
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DATA ANALYSIS AND INTERPRETATION
MEANING OF ANALYSIS:
Analysis is the process by which, the whole body of gathered data, facts, figures and ideas, is converted into meaningful and usable information.
MEANING OF INTERPRETATION:
Interpretation refers to the task of drawing inferences from the collected facts after analytical and/or experimental study. In short, it is a search for broader meaning of research findings.
MEANING OF ANALYSIS AND INTERPRETATION:

In the words of Kennedy and Memullar, "The analysis and interpretation of financial statements are an attempt to determine the significance and meaning of the financial statements data so, that a forecast may be made of the prospects for future earnings"
1. COMPARATIVE FUNDFLOW STATEMENTS:

In comparative fund flow statements two or more balance sheets and or the income statement of a firm are presented simultaneously in columnar form. The financial data for two or more years are placed and presented
in adjacent columns and thereby the financial data is provided a times perspective in order to facilitate periodic comparison. In comparative fund flow statements, the balance sheet and the income statements for a number of years are presented in condensed form for year comparison and to exhibit the magnitude and direction of changes.
The comparative fund flow statements may be prepared to show; The absolute amount of different items in monetary forms.

The amount of periodic changes in monetary terms. The percentage of periodic changes to reveal the proportionate changes. The comparative fund flow statement can be prepared for both balance sheet and the income statement. The analysts are able to draw useful conclusions when figures are given in a comparative position. The figures of sales for a quarter or half year or one year may tell only the present position of sales efforts.
COMPARATIVE BALANCE SHEET:

The comparative balance sheet analysis is the study of the trend of the same items, group of items and computed items in two or more balance sheets of the same business enterprise on different dates. The changes in periodic balance sheet items reflect the conduct of a business. The changes can be observed by comparison of the balance sheet at the beginning of the year and at the end of the year. These changes will help in forming an opinion about the progress of an enterprise. The comparative balance sheet has two columns for the data of columns for the data of original balance sheets. A third column is used to show increase in figures. The fourth and last column may be added for showing percentages of increases or decreases. This statement prepared on two or more different dates can be used for comparing sources of funds under that secured loans, unsecured loans and reserves & surplus. These statements also used to compare fixed and current assets, liabilities & provision and to find out increase/decrease in these items.
Below are the comparative analysis of the balance sheet for the past 5 years: On the bases of those we analyzed the performance of the company and changes in that.
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COMPARITIVE BALANCE SHEET FOR THE YEAR 2008 & 2009

Particulars 1.Sources Of Funds a) Share capital b) Reserve & surplus c) Secured loans d) Unsecured loans Total APPLICATION OF FUNDS 1.Fixed assets a) Gross block b) Net block 2. Investment 3.Deferred tax assets 4. current assets Total Less: current liabilities & provision i) Liabilities Ii) provision Total profit & loss a/c Total As on 31-03-08 As on 31-03-09 Absolute changes % of changes
318221000 39448184 214405674 253853858
318221000 -
0 0 39448184
0 0 100 (6.76) (21.24)
199911435 199911435
(14494239) (5394239)
348447394 635943332 100 760760496 760760496
302808002 60360155 100 700225559 700225559
(45639320) (32341177) 0 (60534937) (60534937)
(13.96) (50.86) 0 (7.95) (7.95)
207051365 88833899 295885264 25572563 43605194
170706357 98239572 268945929 5326504 26492550
(36345008) 94.5673 (26939335) (20246059) (17112644)
(17.55) 10.58 (9.10) (79.17) (39.24)
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INTERPRETATION:
There is decrease in fixed assets in 2008 to 2009 this shows the company is not contributing amount for fixed assets out of profit and the companys liquidity position is not good when compare to 2008 as the company is concentrating on earning profit. The decreased %age of fixed assets is 13.96 and 50.86 in gross and net block respectively.
In the sources of funds secured and unsecured loans are decreasing in the year 2009 as compared to 2008 which is a good sign for the company. Secured loans are decreasing to zero and unsecured loans are decreased by 6.76%. Share capital of the firm remains constant. There are no reserve and surplus with the firm in both the years i.e. 20068& 2009.
o o
There is a decrease in the current assets from 2008 to 2009 with a percent of 7.95 which shows a loss to the company. As seen in current liabilities companies position is good as they are decreasing in the year 2009 as compared to 2008 with a percentage of changes 17.55, which is again good for the company.
In the profit and loss account, in 2008 company had Rs.25572563 of profit which become Rs.5326504 in the year 2009 i.e. 79.17% of change. Overall companys performance is satisfactory but company needs to give attention to some of its major areas like current assets and fixed assets as there is a decrease in current and fixed assets with a percentage change of 13.96 % and 50.86% respectively. There is a decrease in secured and unsecured loans with a percentage change of 100% and 6.76% respectively which is on the benefit side of the company.
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A Study on Funds Management COMPARITIVE BALANCE SHEET FOR THE YEAR 2009 & 2010
Particulars 1.Sources Of Funds e) Share capital f) Reserve & surplus g) Secured loans h) Unsecured loans Total APPLICATION OF FUNDS 1.Fixed assets c) Gross block d) Net block 2. Investment 3.Deferred tax assets 4. current assets Total Less: current liabilities & provision j) Liabilities Ii) provision Total MIS expenses Total
As on 31-03-09
As on 31-03-10
Absolute changes
% of changes
318221000 -
318221000 15070293 16629120
15070293 16629120 (6691599) 53286879
100 0 (34.97) (26.66)
199911435 199911435
129995436 479915849
302808002 60360155 100 700225559 700225559
293406486 58930969 100 816621470 816621470
(10401516) 89722330 116395911 116395911
(3.43) (3.70) 16.62 16.62
170706357 98239572 268945929 21166046 26492550
280039861 128527890 408567751 12931061 479915849
109335504 30288318 139621822 (8234985) (5326504)
17.42 31 52 (422) (100)
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A Study on Funds Management INTERPRETATION:
From the above table again is a decrease in the fixed assets from 2009 to 2010 this shows the company is not contributing amount for fixed assets out of profit. The decreased %age of fixed assets is 3.43 and 3.70 in gross and net block respectively.
In the sources of funds secured and unsecured loans are increasing in the year 2010 as compared to 2009 which is a not a good sign for the company. Secured loans are increased from zero to Rs.16629120 and unsecured loans are increased by 34.97%. Reserve and surplus are also increased by 100% from 2009 to 2010. Share capital of the firm remains constant.
There is an increase in the current assets from 2009 to 2010 with a percent of 16.62 which shows that the companys liquidation position is becoming good.
As seen in current liabilities companys position is not much better as they are increasing in the year 2010 as compared to 2009 with a percentage of changes 17.42, which is again not good for the company. Overall the companys performance is satisfactory as compared to the performance of 2009 as there is a decrease in unsecured loans but increase in secured loans with a percentage change of (34.97)% and 0% respectively. There is an increase in the current assets but decrease in fixed assets with a percentage change of 16.62% and (3.43) which is good on the side of current assets but not good in reference of fixed assets.
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A Study on Funds Management COMPARITIVE BALANCE SHEET FOR THE YEAR 2010- 2011
Particulars
As on 31-03-10
As on 31-03-11
Absolute changes
% of changes
1.Sources Of Funds i) Share capital j) Reserve & surplus k) Secured loans l) Unsecured loans Total APPLICATION OF FUNDS 1.Fixed assets e) Gross block f) Net block 2. Investment 3.Deferred tax assets 4. current assets Total Less: current liabilities & provision k) Liabilities Ii) provision Total MIS expenses Total
318221000 15070293 16629120 129995436 479915849
318221000 136826041 10365536 89995436 555408013
0 121755748 (6263584) (40000000) 75492164
0 807.91 (37.77) (30.66) 15.73
293406486 58930969 100 816621470 816621470
396106154 59055325 30000100 32146548 881689555 881689555
3699668 124356 30000000 32146548 65068085 65068085
1.26 0.21 30000000 100 7.96 7.96
280039861 128527890 408567751 12931061 479915849
308752365 166770640 475523005 28039490 555408013
28712504 38242750 66955254 15108429 75492164
10.25 29.75 16.38 116.83 15.73
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In the sources of funds secured and unsecured loans are decreasing in the year 2011 as compared to 2010 which is a good sign for the company. Secured loans are decreasing by 37.77 and unsecured loans are decreased by 30.66%. Share capital of the firm remains constant. Reserve and surplus are increased with an absolute change of Rs.121755748 the firm in the year 2011.
The above table is showing an increase in the fixed assets from 2010 to 2011 this shows the company is contributing amount for fixed assets out of profit. The increased %age of fixed assets is 1.26 and 0.21 in gross and net block respectively.
o From the above table, in the year 2011 the position of current assets is 88.16 which was 81.66 in 2008 and current liabilities is 30.87 and 28.00 in the year 2011 and 2010 respectively. All this is showing good results for the firm in accordance of current assets but not good in current liabilities position. o In 2009 companys MIS expenses are increasing with a absolute changes of Rs. 15108429 and percent change of 116.83, it means company should control its undesired expenses. Overall the performance of KS&DL is pretty satisfactory, when compare to the year 2010.It indicate that, in both the year 2010-2011 the company has a good liquidity position as theres an increase in the fixed and current assets with a percentage change of 1.26% & 7.96% .The firm position also increasing in the side of sources of funds as there is a decrease in the secured loans with a change of (37.77)% and also decrease in the unsecured loans with (30.66)%.
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Particular 1.Sources Of Funds m) Share capital n) Reserve & surplus o) Secured loans p) Unsecured loans Total APPLICATION OF FUNDS 1.Fixed assets g) Gross block h) Net block 2. Investment 3.Deferred tax assets 4. current assets Total Less: current liabilities & provision l) Liabilities Ii) provision Total profit & loss a/c Total
As on 31-03-11
As on 31-03-12
Absolute changes
% of changes
318221000 136826041 10365536 89995436 555408013
318221000 267719129 107204608 83506504 778420599
0 130893088 96839072 (6488932) 223012586
0 95.66 934.24 (7.21) 40.15
396106154 59055325 30000100 32146548 881689555 881689555
309623620 69775760 100 52504866 1091372587 1091372587
(13517466) 10720435 (30000000) 20358318 179683032 179683032
(4.56) 18.15 (99.99) 63.32 19.70 19.70
308752365 166770640 475523005 28039490 555408013
246650794 204956560 451607354 16374640 778420599
(62101571) 38185920 (23915651) (11664850) 223012586
(20.11) 22.89 (5.02) (41.60) 40.15
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From the table of comparative balance sheet of year 2011-2012 o In the sources of funds secured loans are increasing highly and unsecured loans are decreasing in the year 2012 as compared to 2011 which is a not good for the company. Secured loans are increased by 934.247 and unsecured loans are decreased by (7.21). Reserve and surplus are increased with an absolute change of Rs.130893088 of the firm in year 2010. Share capital of the firm remains constant.
The above table is showing a decrease in the fixed assets from 2009 to 2010 this shows the company is not contributing enough amounts for fixed assets out of profit. The decreased %age of fixed assets is 4.56.
o From the above table, in the year 2012 the position of current assets is 109.13 which was 88.16 in 2011 i.e. theres a increase and current liabilities is 30.87 and 24.66 in the year 2011 and 2012 respectively. All this is showing good results for the firm in both the cases, current assets and current liabilities. Overall the performance of KS&DL is satisfactory but when compared to 2011 its not good enough as there is an increase in secured loans but decrease in unsecured loans with a percentage change of 934.24% and (7.21) % respectively. companys liquidity position is also not satisfactory when compared to the year 2011 as there is a decrease in fixed assets gross block with a change of 4.56% but increase in current assets with a percentage of 19.70%.company`s current liabilities are also decreasing with a absolute changes of Rs.62101571 & percentage change of (20.11) % which is a good sign for the company.
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Particular 1.Sources Of Funds q) Share capital r) Reserve & surplus s) Secured loans t) Unsecured loans Total APPLICATION OF FUNDS 1.Fixed assets i) Gross block j) Net block 2. Investment 3.Deferred tax assets 4. current assets Total Less: current liabilities & provision m) Liabilities Ii) provision Total profit & loss a/c Total
As on 31-03-12
As on 31-03-13
Absolute changes
% of changes
318221000 267719129 107204608 83506504 778420599
318221000 343479146 800922400 83506504 163989804
0 75760017 (27112208) 0 (27112208)
0 28.30 (25.29) 0 (14.22)
309623620 69775760 100 52504866 1091372587 1091372587
327262896 241431939 85830957 100 1239560593 1239560593
1739276 1584079 16055197 0 148188006 148188006
5.69 0.66 23.00 0 13.58 13.58
246650794 204956560 451607354 16374640 778420599
292361773 269166068 561527841 -
45710979 64209508 109920487 16374640
18.53 13.33 24.34 100
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From the above table of 2012-2013 o In the sources of funds secured loans are decreasing and unsecured loans are also decreasing in the year 2013 as compared to 2012 which is good for the company. Secured loans are decreased by 25.29 and unsecured loans are decreased to zero (0). Reserve and surplus are increased with an absolute change of Rs.75760017 in the year 2013. Share capital of the firm remains constant.
The above table is showing an increase in the fixed assets from 2012 to 2013 this shows the company is contributing enough amount for fixed assets out of profit. The increased %age of fixed assets is 5.69.
o In the year 2013 the current assets are increasing with a percentage change of 13.58 and current liabilities are also increasing with a absolute change of Rs. 45710979 and a percentage change of 18-53. The overall performance of the firm is comparatively good in the last year as it has covered all of its unsecured loans and there is a decrease in the percentage of secured loans i.e. 25.29%. Company is also contributing a good amount toward its assets as both of current and fixed assets are increased in the year 2013. So, the companys liquidity position is good and the performance of the organization is also satisfactory.
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TABLE NO: 1 TABLE SHOWING THE CAPITAL FUNDS OF KARNATAKA SOAPS & DETERGENTS LTD DURING THE YEAR 2008 TO 2012
YEARS
CURRENT ASSETS
Current liabilities 26,89,45,929 40,85,67,751 47,55,23,005 45,16,07,354 56,15,27,841
Current Ratio 2.6 1.9 1.8 2.4 2.2
2008-2009 2009-2010 2010-2011 2011-2012 H 2012-2013 Analysis:-
70,02,25,559 81,66,21,470 88,16,89,555 1,09,13,72,587 1,23,95,60,593
From the above table, it can be seen that, there is an increasing trend in the capital fund i.e., Rs 3332.91 lakhs in the year 7097.41 lakhs in the year 2012 2008 to Rs
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GRAPH NO: 1 GRAPH SHOWING THE CAPITAL FUND OF LTD
KARNATAKA SOAPS AND DETERGENTS DURING THE YEAR 2008 TO 2012
9
300 250 250 200 200 150 150 100 100 50 50 0 0
ANALYSIS: A Relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time as and when they become due. On the other hand, a relatively low current ratio represents that the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time without facing difficulties. The ratio equal or near to the rule of thumb is 2:1, i.e. current assets double the current liabilities is considered satisfactory.
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INTERPRETATION: It is inferred that current ratio was up to the standard in the year 2008-09, 2010-11, 201112 due to decrease in inventory and debtors. For the two years it is showing a decreasing trend due to drastic increase in current liabilities.
QUICK RATIO:
It is the ratio that expresses the relationship between quick or liquid assets and quick or liquid liabilities. Any asset is called liquid if it can be converted to cash without loss in value. Cash is the most liquid assets. They include all current assets except inventories or stocks and prepaid expenses since these are not easily available for the payment of current liabilities. It shows a firm's ability to meet current liabilities with its most liquid assets. 1:1 ratio is considered ideal ratio for a concern because it is wise to keep the liquid assets at least equal to the liquid liabilities at all times. Current liabilities include all those liabilities, which should necessarily be paid within a short period of one year. The quick ratio formula is as follows;
QUICK RATIO= QUICK OR LIQUID ASSETS / CURRENT LIABILITIES
Table showing the quick ratio for the last 5 years (in.Rs)
YEARS QUICK ASSETS
QUICK LIABILITIES
QUICK RATIO
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2008-2009 2009-2010 2010-2011 2011-2012 2012-2013 35,90,11,335 46,57,65,747 58,56,76,733 68,39,20,100 72,19,54,754 26,89,45,929 1.334
40,85,67,751 47,55,23,005 45,16,07,354 56,15,27,841
1.140 1.232 1.514 1.285
GRAPH SHOWING QUICK RATIO

1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2008-09 2009-10 2010-11 quick ratio 2011-12 2012-13 1.33 1.2 1.11 1.2 1.5
ANALYSIS:
A high acid test ratio is an indication that the firm is liquid and has the ability to meet its current or liquid liabilities in time and on the other hand a low quick ratio represents that the firms liquidity position is not good. As a rule of thumb or as a convention quick ratio of 1:1 is considered satisfactory.
INTERPRETATION:
It is inferred that the company has the ability to meet its current liquid liabilities as and when they become due as it has pretty good quick ratio above the normal standard of 1:1.
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ABSOLUTE LIQUIDITY RATIO OR CASH RATIO:

Liquidity of a firm can be viewed from an extremely conservative point of view and the short term liquidity of a company may be measured through cash ratio. Cash ratio or absolute liquid ratio is the ratio which expresses the relationship between liquid assets and quick liabilities. Absolute liquid ratio is the most rigorous ratio to measure the liquidity of the firm. Absolute liquid assets include cash in hand and at bank and marketable securities or temporary investments.
The absolute liquid ratio formula is as follows;
CASH RATIO= ABSOLUTE LIQUID ASSETS / CURRENT LIABILITIES
Table showing the cash ratio for the last 5 years

YEAR ABSOLUTE LIQUID ASSETS 2008-2009 19,57,15,651 CURRENT LIABILITIES 26,89,45,929 0.727
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RATIO

2009-2010 2010-2011 2011-2012 2012-2013 31,23,45,581 33,43,85,423 25,51,32,909 28,53,59,727 40,85,67,751 47,55,23,005 45,16,07,354 56,15,27,841 0.765 0.703 0.565 0.508
GRAPH SHOWING CASH RATIO
0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2008-09 2009-10 2010-11 cash ratio 2011-12 2012-13 0.565 0.508 0.727 0.765 0.703
ANALYSIS:
The acceptable norm for this ratio is 50% or 0.5:1 or 1:2 i.e. Re.1 worth absolute liquid assets are considered adequate to pay Rs.2 worth current liabilities in time as all the creditors are not expected to demand cash at the same time and then cash may also be realized form debtors and investors.
INTERPRETATION:

It is inferred that there was an increasing trend in first four years that is from 20062009. But in the previous year it has decreased to 0.508 which was a result of decrease in cash and bank balance accompanied with increase in creditors where company wont be able to meet its short term financial obligations. So it has to take steps to decrease creditors and also speed up its collection from debtors to improve its cash reserves.
STOCK OR INVENTORY TURNOVER RATIO:

The inventory turnover ratio also known as stock turnover ratio indicates whether inventory has been efficiently used or not. The purpose is to see whether only the required minimum funds have been locked up in inventory. Inventory turnover during the period and evaluates the efficiency with which a firm is able to manage its inventory. It denotes the speed at which the inventory will be converted into sales, thereby contributing for the profits of the concern. Here cost of goods include (opening stock + purchases + manufacturing expenses closing stock or sales - Gross profit) And average stock includes opening stock + closing stock 2 Inventory turnover ratio can be calculated as fallows;
INVENTORY TURNOVER RATIO= SALES / AVERAGE STOCK
Table showing the Stock Turnover Ratio for the last 5 years
YEARS SALES AVERAGE STOCK 2008-2009 98,81,11,423 39,24,94,368 2.518 RATIO
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2009-2010 2010-2011 2011-2012 2012-2013 104,43,74,470 1,28,64,62,008 1,53,37,03,531 16,47,77,47,37 34,60,34,973 32,34,34,273 35,17,32,655 46,25,29,163 3.018 3.978 4.360 3.562
GRAPH SHOWING INVENTORY TURNOVER RATIO

5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 2008-09 2009-10 Inventory turnover ratio 2010-11 2011-12 2012-13 2.518 3.018 4.36 3.978 3.562
ANALYSIS:
Inventory Turnover Ratio measures the velocity of conversion of stock into sales. A high inventory turnover/stock velocity indicates efficient management of inventory because more frequently the stocks are sold; the lesser amount of money is required to finance the inventory. A low inventory turnover indicates over-investment in inventory, dull business, poor quality of goods, stock accumulations, accumulations of obsolete and slow moving goods and
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low profits as compared to total investments. There are no rules of thumb or standard inventory turnover ratio for interpreting the inventory turnover ratio.
INTERPRETATION:
It is inferred that the inventory turnover ratio has been showing an increasing trend from past four years but there was a slight decrease in the previous year, which indicates that there is an efficient management of inventory and stocks are sold out within short span of time which reduces the warehouse cost and avoids the chances of obsolescence of stocks.
DEBTORS OR RECEIVABLE TURNOVER RATIO:

Debtor's turnover ratio indicates the velocity of data collection of firm. In simple words, it indicated the number of times average debtors are turned over during a year. This ratio indicates the speed at which the debtors are converted into cash. Usually a high ratio will be referred to high efficiency in debt collection and a low ratio for lower efficiency. High ratios indicates that debts are collected in short time period (i.e., there is little time gap between sales and payments. The ratio is obtained by dividing the net credit sales by average debtors outstanding during that year. Debtors' turnover ratio can be calculated as follows: DEBTORS TURNOVER RATIO= NET CREDIT SALES / AVERAGE DEBTORS
Table showing the Debtors Turnover Ratio for the last 5 years(in.Rs)
YEARS NET CREDIT SALES 2008-2009 2009-2010 2010-2011 98,81,11,423 1,04,43,74,470 1,28,64,62,008 AVERAGE DEBTORS 7,45,79,779 7,48,55,399 11,36,10,155 13.249 13.95 11.323 RATIO
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2011-2012 2012-2013 1,53,37,03,531 16,47,77,47,37 15,49,38,144 16,80,85,689 9.899 9.803
GRAPH SHOWING DEBTORS TURNOVER RATIO

16 14 12 10 8 6 4 2 0 2008-09 Debtors turnover ratio 2009-10 2010-11 13.249 13.95
11.323 9.899 9.803
2011-12
2012-13
ANALYSIS:
The debtors turnover ratio indicates the number of times the debtors are turned over a year. Generally, the higher the debtors turnover the more efficient is the management of debtors similarly; low debtors turnover implies inefficient management of debtors or sales.
INTERPRETATION:

From the above table, it is seen that KS&DL has increased by almost 50% for the two years to 13.249 and 13.952 respectively. But in the year 2009-2010, 2010-2011 & 2011-12 it has gradually decreased to 11.323, 9.899 & 9.803. It is inferred that it shows a decreasing trend from past three years which is not a good sign for a company. So it has to take steps to manage debtors through prompt collection so that it will be able to sell the goods on credit and there by gaining sales and profit.
CREDITORS OR ACCOUNT RECIEVABLE TURNOVER RATIO:

Debtor's turnover ratio indicates the velocity of data collection of firm. In simple words, it indicated the number of times average debtors are turned over during a year. This ratio indicates the credit facility enjoyed by a firm. It is calculated by taking into account the net purchase and average creditors. Creditors' turnover ratio can be calculated as follows:
CREDITORS TURNOVER RATIO= NET PURCHASE / AVERAGE CREDITORS
Table showing the Creditors Turnover Ratio for the last 5 years (in.Rs)
YEARS NET PURCHASE AVERAGE CREDITORS 2008-2009 2009-2010 2010-2011 2011-2012 36,72,38,387 50,70,94,587 54,14,33,115 80,19,28,342 4,53,54,445 4,75,84,558 7,01,84,312 6,97,71,274 8.09 10.65 07.71 11.49 RATIO
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2012-2013 77,53,83,439 6,44,60,999 12.02
GRAPH SHOWING CREDITORS TURNOVER RATIO

14 12 10.65 10 8.09 8 6 4 2 0 2008-09 7.71 11.49 12.02
Creditors turnover ratio 2009-10 2010-11
2011-12
2012-13
ANALYSIS:
Generally higher the creditors velocity better it is or otherwise lower the creditors velocity less favorable are results.
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INTERPRETATION
From the above table it has seen that KS&DL exhibits high creditors turnover ratio from 2008-09 where it has decreased gradually in the year 2009-10 and increased in 2010-11,201112 to 11.49 and 12.02 respectively.
WORKING CAPITAL TURNOVER RATIO:

Working capital turnover ratio indicates the velocity of the utilization of working capital. This ratio indicates the number of times the working capital is turned over in the course of a year. This measures the efficiency with which the working capital is being used by the firm. A higher ratio indicates efficient utilization of working capital and a low ratio indicates otherwise. Working capital turnover ratio can be calculated as follows:
WORKING CAPITAL TURNOVER RATIO= SALES / NET WORKING CAPITAL
Table showing the Working Capital Turnover Ratio

YEARS SALES NET WORKING CAPITAL 2008-2009 2009-2010 98,81,11,423 1,04,43,74,470 43,12,79,630 40,80,53,719 2.291 2.559 RATIO
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2010-2011 2011-2012 2012-2013 1,28,64,62,008 1,53,37,03,531 16,47,77,47,37 40,61,66,550 63,97,65,233 67,80,32,752 3.167 2.397 2.430
GRAPH SHOWING WORKING CAPITAL TURNOVER RATIO

3.5 3.167 3 2.559 2.5 2 1.5 1 0.5 0 2008-09 2009-10 2010-11 2011-12 2012-13 2.291 2.397 2.43
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ANALYSIS:
A higher working capital ratio indicates efficient utilization of working capital and low ratio indicates otherwise. From the above table, KS&DL working capital turnover ratio in the year 2008-2009 was 2.291 and for next two years it has shown an increasing trend. It increased in the year 2009-2010 to 3.167 and decreased in the year 2010-2011 to 2.397 & 2011-12 to 2.430.
INTERPRETATION: It is inferred that working capital turnover ratio shows an

increasing trend, but it has decreased in the year 2009-2010 & 2010-11 which shows there is inefficient management of working capital in the previous year. The company should take steps to invest in current assets and other short term investment opportunities.
FINDINGS, SUGGESTION AND CONCLUSION INTRODUCTION:

The final stage in the statistical enquiry relates to the interpretation of the data i.e., drawing logical and meaningful conclusion from the condensed data. Interpretation is concerned with establishing relationships within the collected data partially over lapping analysis. Interpretation is essential for the simple reason that the usefulness of research findings lie in proper order. It is through interpretation that the research can well understand the abstract principle, the work beneath its findings it leads to the establishment of explanatory concepts that can serve as a guide for future research studies. Based upon the above consideration this chapter gives a summary of data analyzed in the previous chapter and on the basis of findings appropriate suggestion are given.
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A Study on Funds Management FINDINGS:

On the analysis of the financial statements of the Karnataka soaps and detergents Ltd for the year 2009-2013, the following findings are recorded. 1. In capital fund, share capital is constant from the past 5 years but there is fluctuation in reserves and surplus. Hence the company is mainly dependent on share capital. 2. The fixed assets are increasing respectively throughout the 5 years. 3. The current ratio of the board is good. It shows the good liquidity position about the company. 4. The company has properly allocated its income over the expenditure. Hence there is a surplus over the years. 5. The debt equity ratio indicates the proportionate claims of owners and the outsiders against the company assets. It is found that this ratio is an cushion available to outsiders, to think before investing, but unfavorable from the point of view of the company. 6. It is found that the company prefers to invest in loans and advances. 7. It is found that the company mainly focusing on secured loans to raise the capital.
SUGGESTIONS/RECOMMONDATIONS:
1. The liquidity position is showing relatively more the company can go for reducing the current assets and try to invest it in long term assets or long term revenue earning investments. 2. The company is suggested to have a continuous check of all cash and bank balance. In case if the cash is idle it can be brought to the notice and can be invested in various short term investment opportunities to earn returns. Forecasting of cash should be made to meet requirements of business.
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3. Due to the shortage in cash the company is unable to have adequate inventory reserves which are hampering its optimum production capacity. So the company has to have efficient inventory reserves to increase its production. 4. The company is not able to generate income from other sources due to lack of skills of the investment analyst. So, the company should try improving its investment decisions to generate income from other sources. 5. As a part of recommendation it is advisable if KS&DL diverts a little portion of funds in undertaking expansion activities and ultimately enhancing its sales and profitability. 6. By adopting good planning towards recovery of debt that is by adopting Good Credit policy, Proper assessment of credit worthiness of its debtors, by adopting strict collection measures etc. the company can get into more profitability. 7. It is suggested to control over and under stocking of raw material using technical auditors and maintain a coordination between production processes department and inventory handling department for efficient outcomes. 8. If the company maintains a favorable cash and bank balance it will help in smooth running of business and maintain balanced working capital. 9. There is a surplus over the years and the company should focus on new investments decisions.
CONCLUSION:
The overall performance of the organization is satisfactory, particularly the last two years trading profit is good but the trading profit is fluctuating every year. The company can increase its clientele base by doing certain promotional campaigns such as organizing corporate parties and advertising in a better manner. As a part of the study it can be concluded that the quick ratio overall the year have remains stable which is the good indication for the companys position, since its able to meet its current liabilities. Also the creditors turnover ratio is a good indicator that the company is
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able to meet timely payments and hence is enjoying a good reputation in the market. However as per the debtors position in the balance sheet effective management is required, so that a favorable trend and position can be observed overall the years. Also KSDL should try to have an efficient inventory reserve so that its productivity is increase and hence improve the investment decision and increase the income level from other sources. Last but not the least the company can device a competitive pricing strategy so that it can overcome price related hurdles that it has been facing over the years and hence leads to a successful organization, fulfilling its operational objectives.
BIBLIOGRAPHY:
REFERENCE BOOKS BBM Financial Management
AUTHOR
EDITION
PUBLISHER
Appannaiah Reddy, 1st Edition Satyaprasad
Himalaya Publishing House, Delhi
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Business Research Methods Ramachandra, Chandrasekhar 1st Edition 1st Edition Himalaya Publishing House, Delhi
Management Accounting
M.N. Arora
Himalaya publishing house, Delhi
Annual Reports Journals Internet references Web Sites : www.mysoresandal.co.in www.KSDL.com en.wikipedia.org
PROFIT AND LOSS ACCOUNT (RS.IN LAKHS)
PARTICULARS INCOME(year) Net Sales Other income

AMOUNT 2010 1,04,43,74,47 0 1,90,04,300
AMOUNT 2011 1,28,64,62,00 8 2,09,85,305
AMOUNT 2012 1,53,37,03,53 1 6,06,23,797
AMOUNT 2013 1,64,77,74,73 7 2,22,88,309

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1,06,33,78,77 0 Increase/(-) Decrease in stock 4,73,09,343 1,11,06,88,11 3 EXPENDITURE Materials Consumed (include trading items) Other Expenditure Depreciation 50,70,94,583 55,19,82,573 36,05,016 1,06,26,82,57 3 Operating Profit/Loss Less: Interest and Finance charges PROFIT BEFORE TAX Less: Provision for Taxation Current Tax Fringe Benefit Tax Deferred Tax Asset Dividend Tax PROFIT AFTER TAX Prior period income/(-) Expenditure Proposed dividend Tax of earlier year 52,00,000 23,01,452 3,58,55,694 66,40,886 2,20,99,794 2,03,96,797 Profit/loss brought forward previous year Profit/loss Carried to
1,30,74,47,31 3 2,64,66,726 1,28,09,80,58 7
1,59,43,27,32 8 7,03,74,213 1,66,47,01,54 1
1,67,00,63,04 7 5,32,86,174 1,72,33,49,22 1
54,13,33,115 61,35,25,868 35,77,430 1,15,85,36,41 3 12,24,44,174 45,08,734 11,79,35,440
80,19,28,343 73,44,42,910 39,69,038 1,54,03,40,29 1 12,43,61,250 72,76,261 11,70,89,988
77,53,83,439 79,97,99,905 49,82,474 1,58,01,65,81 8 14,31,83,402 82,97,546 13,48,85,857
4,80,05,540 46,08,734 4,33,57,146
1,80,00,000 70,98,690 3,21,46,548 45,96,941 8,82,39,809 2,70,48,785 1,37,30,643 12,17,55,748 1,50,70,293 13,68,26,041
1,85,00,000 21,28,828 2,03,58,318 11,68,14,478 1,40,78,609 13,08,93,087 13,68,26,041 26,77,19,129
4,80,00,000 89,30,375 87,04,083 9,31,12,149 14,41,082 1,59,11,050 7,57,60,017 26,77,19,129 34,34,79,146

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(53,26,504) 1,50,70,293

Balance sheet
BALACE SHEET AS AT 31ST MARCH Particulars 1.Sources Of Funds u) Share capital v) Reserve & surplus w) Secured loans 2009
(AMOUNT 2010
IN 2011
CRORES) 2012 2013
31.82 -
31.82 1.51 1.66
31.82 13.68 1.04
31.82 26.77 10.72
31.82 34.34 8.00

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x) Unsecured loans Deferred tax liability (Net) 1.Fixed assets Gross block Less depreciation Net block Capital work in progress Total 2. current Assets Loans and Advances Inventories Sundry Debtors Cash and Bank Balance Loans and Advances Investments in gratuity fund Total Less: Current Liabilities and Provision Current Liabilities Provision Net Current Assets (6) Less (7) Miscellaneous Expenditure Total Assets (Net) 17.07 9.82 43.13 2.12 51.81 29.26 11.59 40.81 1.29 47.99 30.88 16.67 40.62 2.80 61.96 24.67 20.50 63.98 1.64 77.84 29.23 26.91 67.80 82.52 19.99 13.00 9.00 3.21 8.35 5.25 8.35 6.14
30.28 24.24 6.03 6.03
29.24 23.35 5.89 5.89
29.61 23.71 5.91 5.91
30.96 23.98 6.98 6.98
32.72 24.14 8.85 8.85
34.12 6.88 19.57 9.44 70.02
35.09 8.09 31.23 7.25 81.66
29.60 14.63 33.43 10.49 88.17
40.75 16.35 25.51 21.53 109.14
51.76 17.29 28.53 21.39 123.95
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Introduction To Finance:: A Study On Funds Management

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A Study on Funds Management INTRODUCTION TO FINANCE:

IFIM COLLEGE BANGALORE

A Study on Funds Management

OBJECTIVES OF FINANCE FUNCTION ARE:

A Study on Funds Management

1. Acquiring sufficient funds:

2. Proper utilization of funds:

A Study on Funds Management

4. Maximizing concerns value:

FUND FLOW ANALYSIS:

IFIM COLLEGE BANGALORE

A Study on Funds Management

FUNDS FLOW STATEMENT:

A Study on Funds Management

IFIM COLLEGE BANGALORE

A Study on Funds Management

IMPORTANCE OF FUND FLOW STATEMENT

A Study on Funds Management

IFIM COLLEGE BANGALORE

A Study on Funds Management

LIMITATION OF FUND FLOW STATEMENT:

IFIM COLLEGE BANGALORE

A Study on Funds Management

TITLE OF THE STUDY

STATEMENT OF THE PROBLEM:

IFIM COLLEGE BANGALORE

A Study on Funds Management

OBJECTIVES OF THE STUDY:

SCOPE OF THE STUDY:

IFIM COLLEGE BANGALORE

A Study on Funds Management

A Study on Funds Management

LIMITATION OF THE STUDY

IFIM COLLEGE BANGALORE

A Study on Funds Management CHAPTER SCHEME

BIBILIOGRAPHY, APPENDICES AND ANNEXURES:

IFIM COLLEGE BANGALORE

A Study on Funds Management PROFILE OF THE COMPANY INTRODUCTION TO SOAP INDUSTRY:

THE INDIAN SOAP INDUSTRY SCENARIO:

A Study on Funds Management

Soap manufacturers are classified as 1. Organized. 2. Unorganized.

PROBLEMS OF SOAP & DETERGENT INDUSTRY:

IFIM COLLEGE BANGALORE

Nalwadi krishnaraja Wodeyar

Sri S. G. Shastri HISTORY OF KARNATAKA SOAPS AND DETERGENTS LIMITED:

A Study on Funds Management

IFIM COLLEGE BANGALORE

A Study on Funds Management RENAMING:

TRADEMARK OF KS & DL:

A Study on Funds Management VISION STATEMENT:

OBJECTIVES OF KS & DL:

IFIM COLLEGE BANGALORE

A Study on Funds Management POLICY OF KS&DL:

COMPETITORS OF KS&DL PRODUCT AND SERVICES:

A Study on Funds Management

AN ISO-9001 AND ISO-14001 COMPANY:

IFIM COLLEGE BANGALORE

A Study on Funds Management

PRESENT STATUS OF THE COMPANY

IFIM COLLEGE BANGALORE

A Study on Funds Management

: wholly owned by Govt of Karnataka Undertaking.

: Govt of Karnataka nominates/appoints Board of Directors, Chairman & MD.