Siddheswar Co-operative Bank Ltd, Bijapur

SIDDHESWAR CO-OPERATIVE BANK LTD, BIJAPUR

INTRUDUCTION

Co-operative societies are the forms business organization.

They are formed all over the world. It is voluntary association of

person for mutual benefit and its aims are accomplished of

through self help and collective efforts.

Co-operative organization is mutual help i.e. each for all

and all for each. Thus poor formers may from co-operative

credit societies to get cheap credit facilities and protect

themselves against the exploration of money lenders. Small

producer may from co-operative marketing societies the

exploration of traders.

The idea behind a co-operative society is that an isolated

and power less man in association with others can lift himself as

well others out of weakness into strength co-operative (i.e. work

together) for working out (i.e. solving) your economic problems

is the theory of co-operation.

Working capital is life blood business activities. It is also

regarded as the heart of business. If it becomes weak, the

business can hardly prosper and survive.


DEFINITION & MEANING OF CO-OPERATIVE

SOCIETY

According to Indian co-operative which societies which has

its objective the promotion of the interest of its members in

accordance co-operative principle.

H.calvert Co-operative is defined as “a form of organization where in

persons voluntarily associate together as human beings on the

basis of equality for the promotion of the economic interestof

themselves.

FEATURES OF CO-OPERATIVE SOCIETY

1) Voluntary association:- A co-operative society is totally

based on voluntary membership. Person having a common

interest can join together to form as association.

2) Association of persons: - A co-operative society is as

association of persons & not capital. Individuals join a co-

operative as human beings & not as capitalization.


3) Open membership:- Membership of a co-operative society

is open to all adults irrespective of caste, class, religion etc.

4) Service motive:- Unlike other forms of business

organization, the primary objective of any co-operative society

is to provide service to its members and not for earning

maximum profits. “Service, not profit”.

5) Equity of distribution of profit: - In co-operative society,

society are not distributed as dividend among the members. A

small portion of profit, generally 9% of profits. 10% of profit is

used for the general welfare of the locality in which the society

is working.

6) Corporate status & state control: - A co-operative society

may be registered but most of the co-operative societies are

registered. A co-operative society enjoys certain privileges.

Such as exemption from the payment of income tax, stamp duty

& registration.

ESTABLISHMENT OF A CO-OPERATIVE SOCIETY

In India formation and registration of co-operative

societies is governed by the provision of Indian co-operative

society act of 1912 or the state co-operative act enforce in

various state.


For the formation of a co-operative society there should

at list ten members who are bound together bound by a common

bound ( i.e. belonging to the same locality, class or occupation

and having common and economic need). These members are

(promoters) should submit an application for registration to the

register of co-operative societies of the state in which the

society’s office is to be located.

The application for registration should state that

Name & address of organization.

Its function area.

Its name & objectives.

Liability & span of the capital use.

Rules & condition for the persons who want be members

and other liabilities.

Points to be considered while forming of co-operative

society

A) Apex is the union bank of the co-operative society.

B) Financial year of the bank start from april 1st of every year

and end on 31st march.


C) An application pf registration of co-operative society must

contain all the information of Indian co-operative societies Act

1912 or state co-operative society enforce in various state.

D) Five copies of the rules and regulation of co-operative

society should be attached with the application.

E) If all the application of the group are male then there number

should be less then ten.

F) All the application should be having more than 18 years age

& all applicant should not belonging to same family.

G) The person who are submitting the application must have a

co-operative group & represent all of them & he should be given

all the rights of signing.

WHO CAN BE THE MEMBER OF CO-OPERATIVE SOCIETY

The member should not be of minor (not less than 18 years).

The member should not be of unsound mind.

He should not be engaged in any illegal activities forbidden by the the law.

ADMINISTRATION OF CO-OPERATIVESOCIETIES

The management of co-operative societies is entrusted to a

committee knows as “ Managing committee”. The members of


the managing committee are elected directly by the members of

the co-operative society at the “Annual general meeting”.

Generally a co-operative society has the following office

bearers.

President

Vice president

Secretary

Treasurer

The general body of the members lays down the broad

objectives and the police of he society.

The managing committee determines the programmers and

procedure of the society. It is accountable to the general body of

the members.

The office bearers are responsible for the conduct of the day-

to-day affairs of the society in accordance with the decision of

the managing committee.


TYPES OF CO-OPERATIVE SOCIETIES

1. Consumer co-operative societies

2. Producers co-operative societies

3. Marketing co-operative societies

4. Forming co-operative societies

5. Housing co-operative societies

6. Other co-operative societies


NEED FOR THE STUDY

The aim need for the organization study is to make

the students acquainted with the practical knowledge about the

overall functioning of the finance department in the

organization.

It gives opportunity to study the human behavior &

also makes one ready to face different situation which normally

would come across while working in different environment.

To understand the behavior, culture of an organization

and to know about the various polices of the organization and its

performance and its future strategies.

PURPOSE OF THE STUDY

The purpose of the study is about the profit & loss of the

bank and also about their share capital, deposit & working

capital of the SHRI SHEDDESHWAR CO-OPERATIVE

BANK

OBJECTIVES OF THE STUDY


The primary objective of the specialization study is to the

students to know the practical applicability of the theoretical

concept into business decision in the organization.

The other objectives of the study are as follows

Details study of finance department.

To understand the aspect of the finance department.

To gain first-hand experience from the organization.

To integrate practical experience from the organization.

To understand the behavior and culture of an

organization

To gain all-round view of financial management

operation.

To analyze the present status and future strategies of the

organization.

Limitations of the study:

1. The names of the borrowers of loans were confidential.

2. The availability of data was limited.


3. The availability of Time was limited

CHAPTER 2

THEROTICAL BACKGROUND


MEANING & DEFINTION OF WORKING CAPITAL

Working capital in simple terms is the amount of funds,

which a company, must have to finance its day to day operation,

it can be registered as part /portion of capital, which is,

employed in short operation. Every organization invents their

funds in two terms of capital namely,

1. Fixed capital

2. Working capital

The amount invest in the asset like plant and machinery,

building, furniture etc, block on permanent basis and is called

Fixed capital organization not only requires Fixed capital, but

also need of fund to meet day o day operations for short term

purpose, such funds is called working capital.

Definition of working capital

Genestenberg

“Working capital means current assets of a company that are

changed in the ordinary course of business, form one to another,

for ex, form cash to inventories to receivable, receivable to

cash”.


Westen & Brigham

“Working capital refers to a investment in short term assets

cash, short term securities accounts receivables and inventories”.

J.Smith

“The sum of the current assets is the working capital of the business.

“WORKING CAPITAL =CURRENT ASSETS- CURRENT LIABILITIES”

COMPONENTS OF WORKING CAPITAL

There are two components of working capital

A. Current Assets

B. Current Liabilities

A.Current Assets An assets is termed as current when it is acquired either for

the purpose of selling or disposing of after taking some required

benefit through the process of manufacturing of which

constantly changes in form and contributes to transaction take

place with the operation of the business although such assets

does continue for long in the same form.

Components of current Assets are as follows

Cash & bank balance


Stock of raw material at cost-work in process and finished

Goods.

Advanced receivable in cash or for value to be received.

Security deposits with electricity board –telephone

department balances with customers.

Deposits under the company scheme.

Prepaid expenses.

Miscellaneous payment of income takes credit certificates.

Excise duty and sales tax recoverable.

Outstanding debts for a period exceeding six months.

CURRENT LIABILITIES

Components of current liabilities are as follows.

Non – refundable non – interest bearing advance against subscription to shares.

Sundry creditors for the goods & expenses. Income tax deducted at sources from contactors. Expenses payable. Amount due to promoter of company. unclaimed dividend. Security deposits. Dealers deposits. Liabilities for bills discounted.


CLASSIFICATION OF WORKING CAPITAL

Working capital

On the basis of concept On the basis of time

Networking capital

Gross networking capital

Permanent working capital

Variable working capital

Seasonal working capital

Special working capital

Initial working capital

Regular working capital


A) on the basics of concepts

a) Net working capital

This is difference between current asset & current

liabilities. Current liabilities are those that are expected to

mature within an accounting year & include creditors, bills

payable & outstanding expenses.

Gross working capital is the amount of funds invested in

the various components of current assets.

b) Gross working capital Gross net working capital refers to the difference

between current assets & current liabilities. This concept

enables the firm to determine how many amount is available at

its disposal for its operational requirements.

B) On the basis of time

a) permanent working capital

Permanent working capital is the permanently locked up in

the circulation of current assets. It covers minimum amount

requested for maintaining the circulation of current assets. It


covers the minimum amount requested for maintaining the

circulation of current assets.

i) Initial working capital

At its inception & during the formative period of its

operations a company must have enough cash to meet its

obligations. The need for initial working capital is for every

company to consolidate its position.

ii) Regular working capital

It refers to the minimum amount of liquid capital required

to keep up the circulation of the capital from the cash

inventories to account receivable and from account receivables

to back again cash. It consists of adequate cash balance on hand

and bank, adequate stock of raw materials and finished goods

and amount of receivables.

b) Variable working capital

It refers to the past of the working capital that changes

with the volume of business it may be divided into classes.

i) Seasonal working capital

The working capital required to meet the seasonal

requirement of the business is seasonal temporary working

capital.

ii) Special working capital


The capital required to meet any special operations such as

experiments with new products or new techniques of production

and making interior advertising campaign ect, is also know as

special working capital.

DETERMINANTS OF WORKING CAPITAL

These are following factors which the extent of the working capital

1) Generally Nature of Business

Public utility concern, like Railways needs less amount of

working capital compared to that of trading or manufacturing

concern.

2) Size of the business unit

Generally the larger the size of the raw material is also

determining the working capital needed by the particular

company.

3) Length of the period of manufacturer

The time taken to convert the raw material is also

determining the working capital needed by the particular

company.

4) Seasonality of operation

A Firm manufacturing fans require more working capital

in summer months compared to that winter month.


5) Production policy

In the labor intensive industries, the working capital

requirements are more, where as in the cases of highly capital-

intensive industries are less.

6) Rapidity of turnover

The faster the sale, the larger will be the turnover and also

the working required will be less compared to that slow

turnover.

7) Terms of purchase and sales

Firm which purchase goods on cash basis, but sells there

goods on credit basis naturally required a larger amount of

working capital compared to that of the firm purchaging goods

on credit basis and selling those on cash basis.

8) Dividend policy

A company following conservative dividend policy needs

little amount of working capital, that the company following

liberal dividend policy.

9) Growth and expansion of business

Growing companies require more working capital than

that of static companies, which do not go for available

opportunities.

10) Market condition


The degree of competition in the market tends to

determine the need of working in the perfect competition has to

have huge amount of working capital.

Chapter III

ABOUT THE BANK BANK History Functions Details of bank register member Details of finance Objectives General organization chart Administrative organization chart Head branches Staff pattern at administrative office


HISTORY

Shri Siddheshwar co-operative Bank was started in

the year 1912 April 22 in he years 1912 under the leadership of

Late Vachana Pitamaha Rao Bahadur Dr. P.G.Halakatti (B.A.,

LLB) and in association of Late Diwan Bahadur Shri S.G.

Deshmukh under co-operative rules for a small business, for the

sake of poor and middle class people, with the amount of Rs.

2500/- Share capital without any deposits started the business. In

the year 1932 with Rs. 20,839 Share capital, Rs 16,821 reserved

fund and other funds, Rs 35,0661/- deposits and Rs 80,200

working capital bank started working with rules. Late after

analyzing the financial position and working procedure, Reserve

bank of the India in the year 1982 granted permission. At

present in the co-operative field siddheshwar bank is one of the

biggest bank. In the end of the year 31/03/10 bank contains Rs.

7.07 crore shares, Rs. 10.24 crore deposits and Rs. 263.48 crore

working capital.

FUNCTIONS

It motivates limited, self service and co-operative feelings.


Through share, Deposits, Loans it reserve money and the

reserved fund are given in the form of loan without any

burden on the people and reserve more amount.

It reserve funds to the members of bank and the people

dependent on them.

It undertakes work in progress.

It motivates to start business, company and other business

and to fulfill this and to increase is provides possible help.


Details of Bank register member

No & Date 4217. Date 22/04/1912

Date of business started 22/04/1912

The permission of reserve bank DBOD, UBD, KA 322D Date

18/11/1982

Of India sl, no and date

Offices Bijapur, Bagalkot, Belgaum, and

Gulbarga

district. Head office and 11 branch

Details of members 1) ordinary member

2) co-members

Own building and plots Admistration bank, main bank K.C

market branch, College campus branch.

Jorapur peth branch, paschapur peth

branch, hudko colony branch, Indi town

branch & Ashram road these are having

building APMC branch & Basav nagar

are also having buildings

Auditing 1) according to accounting calculation

the RBI, assigned Auditors & audits

according to rules

Auditing from RBI Every year in the end of month march,

According to calculation RBI offcers

Auditing observation Except DD facility everything is

computerized


DETAILS OF FINANCE

1) Share capital

In the last 5 years he amount of share capital

and the number of members and co-members will be as

follows.

Years Numbers Amount

31/03/2006 40,291 6,97,76,975/-

31/03/2007 39,555 7,03,34,000/-

31/03/2008 39,557 7,03,73,950/-

31/03/2009 39,116 7,06,90,325/-

31/03/2010 38,840 7,07,03,100/-

Share Capital members

38,000

38,500

39,000

39,500

40,000

40,500

31/03/2006 31/03/2007 31/03/2008 31/03/2009 31/03/2010

Numbers


2) Funds

From the last 5years the reserve fund and other fund

details are as follows.

Years Reserve Other funds Total

31/03/2006 8,12,71,904.84 23,84,55,912.37 23,84,55,912.37

31/03/2007 8,64,35,187.23 25,17,09,626.37 25,17,09,626.37

31/03/2008 9,08,08,788.00 30,30,60,176.37 30,30,60,176.37

31/03/2009 9,90,81,878.73 31,87,03,446.68 31,87,03,446.68

31/03/2010 10,24,44,490.70 31,98,70,924.68 31,98,70,924.68

3) Working Capital

The Details of the working capital is as follows

Years Amount

31/03/2006 254,55,57,407.75

31/03/2007 216,99,81,701.48

31/03/2008 240,81,26,904.27

31/03/2009 250,74,37,705,73

31/03/2010 263,47,83,752.32


4) Deposit

Bank accepts regular, saving, pigmy and fixed deposits

the details of the deposits in the last 5 years as following. In

the end of the 31/03/2006 &31/03/2007 deposits gets

supposed. In the end of last 3 years i.e 31/03/2008, 31/03/2009

& 31/03/2010 there is an increase and deposits are secured.

Years Amount31/03/2006 2,24,22,65,504.6931/03/2007 1,85,02,61,329.2931/03/2008 1,99,66,76,887.4331/03/2009 2,08,54,52,346.5531/03/2010 2,15,61,25,139.31

5) Outside Borrowings

Form the last few years the situation of outside

borrowing has not raised. The reserve of bank are more.

6) Investments

According to banking Act 1949 section the end of the

year 31/03/2009 RS 6972.57 accordingly reserved invested

investment in these RS 3651.44 are government &

confidential letters.

The inflation & deflation funds created by government

confidential letter. These funds contain RS 30 lakhs.


7) Borrowings

While providing loans more importance is given to

profit. It gives more importance to those forms which are

necessary / important and then grant loans. The details of the

loans provided in last 5 years.

Years Amount 31/03/2006 1,39,01,76,619.0031/03/2007 1,25,23,36,852.9531/03/2008 1,00,00,76,639.8331/03/2009 93,05,37,955.5231/03/2010 77,82,920.00

8) Overdue debts

In the end of the year 31/03/10 over due debts amoun to

Rs. 2819.98 lakhs & the total debts wiil be 37.16 last year its

percentage was 34.05 (It is a irregular loan accounts).

Non performance assets

Loan account treated as non performance account after

90 days of the day of overdue. In the last 5 years the non

performance assets are as follows:

P & L account / net loss


The details of the P & L account & net loss in the las 6

years is as follows:

Year P&L Net Loss

31/03/2006 -821.93lakh 1285.34lakh

31/03/2007 27.80lakh 1257.54 lakh

31/03/2008 155.34 lakh 1102.20 lakh

31/03/2009 60.22 lakh 1102.17 lakh

31/03/2010 337.92 lakh 764.25 lakh


On the basis of possible loss in the property the maximum number of capital (CRAR) Capital Risk Assets Ratio

According to the direction of reserve bank of India the

C.R.A.R of the bank should be maximum 9 from last 6 years he

Ratio of the C.R.A.R will be as follows:

Years %age of CRAR

31/03/2006 4.47

31/03/2007 7.31

31/03/2008 10.69

31/03/2009 12.97

31/03/2010 24.00


Auditing

There is a system of concurrent auditing as well as

statutory auditing by the charted accountant appointed by the

state government.

Branches

There are otally 11 main branches. In which one of he

branch is in Indi town & the rest of 10 are situated in different

areas of Bijapur. Main branch of Bank are in K.C market,

college campus, Joraur peth, paschapur peth, Hudko colony,and

in Indi & Ashram Road, branches are having security Blocks. In

the branch excep Indi, other branches are gaining profit.

Computerized

To provide good service to the members of bank,

Depositors customers in main branch & other branches. And

except D rest other work of banks are done through computers,

On the basis of possible loss in the property the maximum number of capital

40%

22%

18%

12%

8%

31/03/200631/03/200731/03/200831/03/200931/03/2010


OBJECTIVES OF THE BANK

To finance co-operative societies registered and deemed o

have been registered under that co-operative societies Act in

force in the area.

To rise funds for the purpose of financing co-operative

societies, individuals and other and generally to carryon

Banking business.

To develop assist and co-ordinate he work of affiliated

societies.

To act as an balancing center for the surplus funds of such

societies.

To arrange for the supervision and inspection of affiliated

societies.

To one branches, pay office and extension counter and

suitable center and frame rules for their conduct and

working and transact any type of banking business on behalf

of other banks and societies registered under any Act with

the previous approval of the register.

To make advance to individual on the valuable / approved

securities subject to the rules framed by the Board and

approved by the registrar.

To purchase, sell, transfer, pledge Government promissory

notes, bonds, securities, municipal, zilla parishat and port

trust Bonds, debenture guaranteed by government for the


legitimate investment of the surplus funds of the bank or on

behalf of its members or depositors without incurring any

financial responsibility and to do all things incidental to

such business.

To deploy the resource of the bank in profitable avenues

subject o rules framed by Board and approved by the

registrar.

To the ordinary banking business for properly utilizing this

carried on only for such period under such conditions. As

the Register shall prescribe in each case.

To maintain a library of co-operative literatures and

laboratories.

To receive for safe custody securities and ornaments.

To draw, accept, negotiate and sell bills of exchange with

the rules that shall be framed by the board for the purpose.


Organization chart of S.S bank

ANNUAL GENERAL BOARD OF SHARE HOLDERS

BOARD OF DIRECTORS

PRESIDENT (in his absence VICE-PRESIDENT)

GENERAL MANAGER (chief Executive Officer)

Administrative officerHead officeBranches


Administrative officer

Administrative officer

Head office / branches

MANAGER / BRANCH MANAGER

Cash & Valuables

Disbursement of loans

Acceptance of Deposit

General control over the staff

Inward & outward

A.G.M & BOARD MEETINGS/SUB-COMMITTEESS

Legal & PublicRelation

Inspection & funds mnagement & Returns to RBI & co-op Dept

Est & General

Loan Recovery & ARN filling

Exicution of loan A/C through sale officer

Type & Inward & out ward


Staff pattern at Administrative Office

Administration & Establishment:

Deputy General Manager or In-charge of the section & Asst general manager the general manager. To record proceeding and

maintain files of the section.Senior assistant Establishment maintenance

of some files & registers.Junior assistant to assist the junior officer in

disposing off the loan applications and maintain inward & out ward.

Banking and funds management

Asst general manager In-charge of the section, control over the Head Office & Branches and activities and investment of funds.

Junior Officer Inspection of Branches and submission of reports. Consolidation of accounts and preparation of statement.

Junior assistants to assist he junior officers, in-charge of Branch inspection.


Loans and Recovery of loans

Assist General Manager In-charge of the section and review the recovery of loan at H.O and Branches

Senior assessment To arrange to file ABN cases and preparation of consolidated statements of loan section.

Junior assessment To assist the senior officer.

Legal & public relation Senior officer To attend the legal cases, staff

Disciplinary action, customers, Deposits and members complaints and grievance.

Sales department

Senior officer As sale officer of the department Junior Assistant To assist the sale officer.Peon Authorized peon of the

department


CHAPTER 4Meaning & Definition of WCMComponentsClassification Factors


MEANING & DEFINTION OF WORKING CAPITAL

Working capital in simple terms is the amount of funds, which a company, must have to finance its day to day operation, it can be registered as part /portion of capital, which is, employed in short operation. Every organization invents their funds in two terms of capital namely, Fixed capital Working capital

The amount invest in the asset like plant and machinery, building, furniture etc, block on permanent basis and is called Fixed capital organization not only requires Fixed capital, but also need of fund to meet day o day operations for short term purpose, such funds is called working capital.

Definition of working capital

Genestenberg

“Working capital means current assets of a company that are changed in the ordinary course of business, form one to another, for ex, form cash to inventories to receivable, receivable to cash”

Westen & Brigham

“Working capital refers to a investment in short term assets cash, short term securities accounts receivables and inventories”.


J.Smith

“The sum of the current assets is the working capital of the business.

“WORKING CAPITAL =CURRENT ASSETS- CURRENT LIABILITIES”

COMPONENTS OF WORKING CAPITAL

There are two components of working capital

A. Current Assets B. Current Liabilities

A. Current Assets An assets is termed as current when it is acquired either for the purpose of selling or disposing of after taking some required benefit through the process of manufacturing of which constantly changes in form and contributes to transaction take place with the operation of the business although such assets does continue for long in the same form.

Components of current Assets are as follows

Cash & bank balance

Stock of raw material at cost-work in process and finished Goods.

Advanced receivable in cash or for value to be received.


Security deposits with electricity board –telephone department balances with customers.

Deposits under the company scheme.

Prepaid expenses.

Miscellaneous payment of income takes credit certificates.

Excise duty and sales tax recoverable.

Outstanding debts for a period exceeding six months.

CURRENT LIABILITIES

Components of current liabilities are as follows.

Non – refundable non – interest bearing advance against subscription to shares.

Sundry creditors for the goods & expenses.

Income tax deducted at sources from contactors.

Expenses payable.

Amount due to promoter of company.

unclaimed dividend.

Security deposits.

Dealers deposits. Liabilities for bills discounted.


DETERMINANTS OF WORKING CAPITAL

THESE ARE FOLLOWING FACTORS WHICH THE EXTENT OF THE WORKING CAPITAL

Generally Nature of Business

Public utility concern, like Railways needs less amount of working capital compared to that of trading or manufacturing concern.

size of the business unit

generally the larger the size of the raw material is also determining the working capital needed by the particular company.

3)length of the period of manufacturer

The time taken to convert the raw material is also determining the working capital needed by the particular company.

4)seasonality of operation a Firm manufacturing fans require more working capital in summer months compared to that winter month.

a. production policy

in the labor intensive industries, the working capital requirements are more, where as in the cases of highly capital-intensive industries are less.


6) rapidity of turnover

The faster the sale, the larger will be the turnover and also the working required will be less compared to that slow turnover.

terms of purchase goods on cash basis, but sells there goods on credit basis naturally required a larger amount of working capital compared to that of the firm purchaging goods on credit basis and selling those on cash basis.

8) dividend policy A company following conservative dividend policy needs little amount of working capital, that the company following liberal dividend policy. 9) Growth and expansion of business Growing companies require more working capital than that of static companies, which do not go for available opportunities.

10) market condition The degree of competition in the market tends to determine the need of working in the perfect competition has to have huge amount of working capital.


Table No-4.1

Current Assets in 2006

particulars Amount percentagecash in hand 17638.18 ------investment 6263.82 64.48loans and advance

18654.36 197.8

total 42556.36 262.28

Interpretation

The above graph which shows overall composition of the highest of loans & advance 197.8%. and the investment is 64.48%.


Table No 4.2

Current Liabilities in 2006

particulars Amount percentageBills for collection

4367.17 -----

Bills payable 6257.28 43.27Other payable 6476.34 3.5Total 17100.79 46.72

0

1000

2000

3000

4000

5000

6000

7000

Bills for collection Bills payable Other payable

amount

percentage

Interpretation The above Graph shows that the bills for collection is 43.27 & the bills payable is 3.50.

Working capital


particulars Amount 1 current assets Cash in hand 17638.18Investment 6263.82Loans and advance 18654.36 (Total assets) 42556.36

2. Current LiabilitiesBills for collection 4367.17Bills payable 6257.28Other payable 6476.34 (Total liabilities) 17100.79

3. Net working capital Current Assets 42556.36Less: Current Liabilities 17100.79 Net Working Capital 25455.57

Table No 4.3



particulars Amount PercentageCash in hand 18346.12Investment 14632.13 20.24

Loans and advance 11364.11 22.33

(Total assets) 44342.5 42.57

Interpretation

The above graph which shows overall composition of current assets is the Investment is 20.24% and loan advances 22.23%.

Table No 4.4



Particulars Amount PercentageBills for collection 7346.11Bills payable 5097.11 30.61Other payable 10228.4 100.27 (Total liabilities) 22671.62 131.27

Interpretation

The above Graph shows that the bills for collection 30.61% and other payable is 100.66%.


Working capital Analysis for the year ending 31-3-2007

Particulars Amount1 Current assetsCash in hand 18346.12Investment 14632.13Loans and advance 11364.11 (Total assets) 44342.5

2 Current LiabilitiesBills for collection 7346.11Bills payable 5097.11Other payable 10228.4 (Total liabilities) 22671.62


Table No 4.5



particulars Amount PercentageCash in hand 18366.52 ---Investment 8340.32 54.58


(Total assets) 35819.96 163.83

Interpretation The above Graph which shows overall composition of current assets is the highest of Loans and advance 109.25% and the investment 54.58%.

Table No 4.6



particulars Amount percentageBills for collection 3332.16Bills payable 4356.18 30.73Other payable 315.99 7.25Total 11728.47 37.98

Interpretation

The above Graph shows that the bills payables 30.73% and other payables 7.25%.


Working capital Analysis for the year ending 31-3-2008

Particulars Amount1 Current assetsCash in hand 18366.52Investment 8340.32Loans and advance 9112.12 (Total assets) 35819.96

2 Current LiabilitiesBills for collection 3332.16Bills payable 4356.18Other payable 4040.19 (Total liabilities) 11728.47


Table No 4.7



particulars Amount PercentageCash in hand 23645.11Investment 15430.22 34.72


(Total assets) 63417.47 73.03

Interpretation

The above Graph shows overall composition of current assets is the highest of Loans and advances 38.31% and investment the 34.72%.

Table No 4.8



Current Liabilities Amount Percentage

Bills for collection 12361.14Bills payable 10452.2 18.26Other payable 15529.49 48.57 (Total liabilities) 38343.09 66.83

Interpretation The above Graph shows that the other payable is 48.57% and the bills payable is 18.26%.


Working Capital Analysis for the year ending 31-03-2009

particulars Amount Cash in hand 23645.11Investment 15430.22Loans and advance 21342.14 (Total assets) 63417.47

2. Current Liabilities AmountBills for collection 12361.14Bills payable 10452.2Other payable 15529.49 (Total liabilities) 38343.09

3. Net working capital Amount Current Assets 63417.47Less: Current Liabilities 38343.9 Net Working Capital 25073.57

Table No 4.9



particulars Amount percentageCash in hand 23645.11Investment 15430.22 2.81Loans and advance 21342.14 0.54 (Total assets) 63417.47 2.621

Interpretation

The above Graph shows overall composition of current assets is the highest of Loans and advances 38.31% and investment the 34.72%.

Table No 4.10



Particulars Amount(Rs in Lakhs)

percentage

Bills for collection 10364.13Bills payable 16460.16 58.81Other payable 7576.13 53.97 (Total liabilities) 34401.4 112.78

Interpretation The above Graph shows that the other payable is 53.97% and the bills payable is 58.81%.


Working Capital Analysis for the Year ending 31-3-2010

particulars Amount 1. Current AssetsCash in hand 23564.12Investment 18643.11Loans and advance 18541.19 (Total assets) 60748.42

2. Current LiabilitiesBills for collection 10364.13Bills payable 16460.16Other payable 7576.13 (Total liabilities) 34401.4


Table No 4.11


S.No

Years Working Capital

Difference Growth Rate

1 2005-06 25455.57 - -2 2006-07 21670.43 3785.14 14.86%3 2007-08 24091.47 2420.57 11.16%4 2008-09 25074.38 982.91 4.07%5 2009-10 26347.2 1272.82 5.08%

Table Showing overall Working Capital for the Year 2006-2010 Graph of overall Working Capital

Interpretation

The above Graph show that overall working capital was increased year by year 2005-06(0%), 2006-07(16.45%), 2007-08(20.90%). But it was decreased in the year 2008-09 is (10.56%) and again increased in 2009-10(30.6%).


Chapter 5Finding & RecommendationConclusionSuggestionBibliography

Findings and Suggestion


Findings

1. Net Operating Profit after Tax of the OTPL Company shows

the good profit in the current year. So, the company has

maintaining good interest in since last two years. And also

company earned handsome profit.

2. Weighted Average Cost of Capital has increased last year to

current year. It shows that cost of capital is maintained properly

in the current year. Because Cost of Equity has remained the

same in these two years, and the overall cost of capital is

distributed equally to share holders.

3. As per calculation of consolidated statement of EVA, EVA

showing positive balance since last two year. So, the OTPL

Company has earned so much of profit for continuously for two

year with tax rate of 35%.

4. Cost of Equity is the same for two year. It showing that no

increased and no decreased in the two years, because, it

maintained a sufficient equity in the company.


CONCLUSION

Economic Value Added can be every company’s most useful metric and decision guide in the new economy. It is equally useful for the management of the tangible and intangible the clicks and bricks, the people and the machines, the labor and the capital. EVA is a new tool in analyzing the company’s financial performance, companies financial performance can be better understood with the help of EVA.

EVA is based also on historical accounting items. This peculiar characteristic of EVA is due to the fact that book value is irrelevant i.e. I can be canceled out in valuation formula of EVA. In periodical performance measurement EVA can however in some shortcomings as accounting rate of return (ROI).

As per my study the company is positive Economic Value Added for the past two year. So, company should satisfy.


Suggestions

1. NOPAT s increasing year to year. Would like to suggest that company should on cost of capital and interest. It automatically Leads Company earns higher profit.

2. WACC has increased in last year to current year. So, the company should continue increasing WACC in coming years also. Because overall cost of Capital is distributed among the share holders.

3. As per Consolidated EVA chart it showing that increased in 2005-06 compared to last year. So, I should be concentrate on the better management of operating Investing Capital.

4. cost of equity has remained same since last two years, So, he company is to redesign its capital structure because increasing cost of equity in up coming years.


BIBLOGRAPHY

Financial Management by books used from which I have taken help for the theory part of the study:

o M.V.Khano I.M.Pandey

I have also used the balance sheet of SHRI SIDDESHWAR CO-OPERATIVE SOCIETY BANK (S.S.B) those are from the year 2007-2008,2008-2009 & 2009-2010.

I have also used the profit & loss of the SHRI SIDDESHWAR CO-OPERATIVE SOCIETY BANK BIJAPUR.

Documents

Siddheswar Co-operative Bank Ltd, Bijapur