INDEX

Uncluttered / Pure MIS is our USP since the product is entirely through HDFCs own network.

Pricing
The pricing of the product is competitive but the volume driven and depend on the location, type of the facility and amount of individual instruments.

Special Features

Exclusive CMS Cells at collection centers. Large network of collection center (Metro / Urban / Semi Urban / Rural) spread throughout the country linked up through VSATs / Leased lines. The collection network currently covers 320 locations, being expanded on a continuous basis, based on clients requirements.

Uncleared funds facility. Mid-day credit from high value centers to selected clients. Option of pooling at any fully computerized branch of the bank. No correspondent arrangement, collection are handled exclusively through our own network and hence cost effective.

Facility for courier pick-up of instrument from client local office. Centralized dedicated client support desk at CMS center, Mumbai for single point reconciliation support, prompt attention to your queries.

Scope for unlimited expansion of collection network though SBI branches.

List of Collection Centre:

Sr.
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

LOACATION
DEORIA BAREILLY VARANASI FAIZABAD JABALPUR GONDA ALLAHABAD GORAKHPUR LUCKNOW KANPUR JHANSI PATNA SULTANPUR BANDA RAMPUR AZAMGARH MOTIHARI MUZAFFARPUR GWALIOR BAHRAICH REWA

C.M.S. Charge
LOCATION Kanpur Lucknow New delhi Allhabad Bareilli Patna Azamgarh C.M.S.charges(Paisa per 1000) Nil Nil Nil Nil Nil Nil 0.45
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Bairach Banda Deoria Faizabad Gonda Gaya Gorakhpur Jhansi Mirzapur Muzzaffarpur Sultanpur Varanasi Jabalpur Rampur Gwalior Katni Motihari

0.45 0.45 0.45 0.45 0.45 Nil Nil Nil 0 .45 Nil 0.45 Nil Nil 0.45 Nil Nil 0.45

NOTE: if any location neither H.D.F.C. BANK NOR CO-ORDINATOR & instrument collected &cleared through by correspondent bank then C.M.S. CHARGES WILL BE APPLY RS.2PER THOUSAND.

Types of Instruments

1. General clearing 2. local clearing 3. On branch clearing 4. Other branch clearing

Offers by H.D.F.C.
Guaranteed transfer of collection proceed on the same day the funds are cleared at CMS collection center located all over the country to the central account of corporate at a designated pooling center. No accounts need to be maintained at the collection centers. Day-end-Balance sweep of balance in operative account maintained at CMS centers to facilitate local disbursement. Transfer of Day-end-Balance in collection accounts maintained at various CMS centers to main account. Customize credit to clients account at Mid-day and end-of-the-Day. Customize MIS on collection across the country, including forecast of expected credit, through E-Mail on the same day. Centralized Reconciliation Statement.

Benefits to Birla Corporation

Centralized Control of cash Cost Reduction Enhanced Liquidity Interchange of Information between treasury & operating units Reduced excess cash balance Cash forecasting & scheduling Effective control over disbursement Efficient Financial Management

H.D.F.C. HANDLES COLLECTION

Collection of instrument tendered at various CMS collection center. Depending on the clearing practices prevailing at the various center (i.e. Day-0, Day-1, Day-2), credit is offered, as mandated, to the clients main account at the pooling center the same day as cleared. Instrument can be deposited at the collection centers either by the dealers/distributors/representatives or through couriers as per the arrangement. Client is not required to open any account at the center from which the facility is availed. Collection of instrument is High Value Clearing / MICR clearing, drawn on local branch and drawn on other local HDFC branches.

Disbursements (Debit Transfers)

Debit balances in operating accounts, where withdrawals are permitted up to a prefixed daylight limit, maintained at CMS centers transferred to the main account at the end of the day. The facility dispenses the use of allocated limits and thereby ensures better control, for the client, over debits.

Customized MIS
Daily presentation / credit / return reports provided to the representative / dealer at the local center. Daily location-wise / product-wise presentation / credit / return report provided to the corporate office through E-Mail. Customized weekly / fortnight / monthly consolidated reports in soft-form, compatible with the client accounting system, through E-Mail / Floppy / CD-ROM as required, for easier and speedier reconciliation. Daily credit forecast report though E-Mail. Uncluttered / Pure MIS is our USP since the product is entirely through HDFCs own network.

Pricing
The pricing of the product is competitive but the volume driven and depend on the location, type of the facility and amount of individual instruments.

Special Features
Exclusive CMS Cells at collection centers. Large network of collection center (Metro / Urban / Semi Urban / Rural) spread throughout the country linked up through VSATs / Leased lines. The collection network currently covers 320 locations, being expanded on a continuous basis, based on clients requirements. Uncleared funds facility. Mid-day credit from high value centers to selected clients. Option of pooling at any fully computerized branch of the bank. No correspondent arrangement, collection are handled exclusively through our own network and hence cost effective. Facility for courier pick-up of instrument from client local office. Centralized dedicated client support desk at CMS center, Mumbai for single point reconciliation support, prompt attention to your queries. Scope for unlimited expansion of collection network though SBI branches.

DATA ANALYSIS
Overview
First of all understand the problem of a company one should analyze the process in which problem lies. So first of all we will study the supply chain or logistics part in accordance with sales of Birla corporation and then we will study the inflow of funds from outside the company to within the company after the sale of cement. 4.1 Flow diagram of Sales of Cement from BCL to its Distributor and inflow of funds from distributor to BCL through CMS

Main Branch Mumbai HDFC at Delhi HDFC at Panna

Satna Cement Division

Depot Patna

Depot Delhi

Distributor A

Distributor B

Distributor C

Distributor D

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In the above given diagram first of all manufacturing and packaging of cement is done in Satna Cement unit of Birla Corporation Ltd, than that cement is transferred from Satna cement works to respective depot through rail or road routes as per convenience. Then whomsoever distributor want to purchase cement from these depot has to be registered at these depot and they have to give some required deposit at these depots. Then whenever these distributor need their required amount of cement has to make payment in advance. If distributor does not belong to that particular city at which the depot is located then only DDs are accepted from those distribution and other local distributor can make the payment through local bank cheques. Now these cheques and DDs are collected at different depot level and deposited in local H.D.F.C. under CMS for clearance. Then if the cheques / DDs are cleared amount is transferred from these local banks to H.D.F.C. main branch Mumbai and unpaid cheques / DDs are returned back and depots are intimated for not cleared cheques / DDs.

Problem Definition and Details

In an industry mobilization of funds is very much important, that also when funds run in millions or rupees. Every company want to complete its working capital lifecycle as fast as it can, so to do that they make credit purchase from these suppliers whereas they takes advances from there customers. Taking credit from there suppliers whereas they takes advances from there customers. Talking credit from supplier does create a problem but making a customer payment in advance as he also a businessman creates problem areas. From customer point of view he would also like take to take some credit from the company but as per BCLs rule cement is only supplied after the payment is made. So taking advance from customer makes him to find the loopholes of the company so he can take advantage and make some delays in payments. Due to which following problem arises.

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Problem Statement 1
Some times when distributor have to make payment in advance and they dont have sufficient funds, they draws the cheques of required amount and deposit it with depot and get the supply of cement. When these cheques are sent for clearance they become unpaid and return back from the bank. Thus we intimate the distributor to make the repayment of unpaid cheques, in between these procedures distributor get their credit time.

Methodology Adopted
First of all analyze this problem we have to understand the accounting procedures which are followed by particular depot. Flow Diagram

Distributor present cheques to depot

Cheque is recorded in bank voucher slip at depots and collected

Cheques are attached with pay in slip of CMS and sent to bank for clearance

Unpaid cheques are returned back No

Clearanc e at HDFC

Yes

Amount is transferred to main branch Mumbai for further processing

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Therefore to verify that whether a distributor is making repetitive false payment, we have to go though a vouching process in which we have to analyze the bank voucher slips and that how many times a distributor cheques are getting unpaid. If the same distributor cheques are getting unpaid then a report is prepared with all the documents and is sent to depots for further proceedings. Then the distributor is penalized on that amount and he has to pay interest on that amount. But the amount of interest is not a proper solution because that amount runs in few hundreds whereas the amount blocked i.e. working capital runs in lacs. So different measures are taken to avoid those circumstances.

Problem Statement 2
When a distributor blocks fund the amounts in lacks but when the funds being blocked by the banks the amount are in crores. As discussed earlier Birla corporation funds are mobilized through HDFCs product CMS. So to have a further discussion first of all we should study the flow of funds at CMS.

Methodology Adopted:
First of all to analyze this problem we have to understand the accounting procedures which are followed at those particular depots.

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Flow Diagram
Deposit of chequese by Depots at H.D.F.C. local branch

No

Clearanc e at H.D.F.C.

Fund is transferred to H.D.F.C. main branch at Mumbai

Yes

Fund is transferred to respective Division of BCL

In CMS transferred at HDFC cheques/DDs are send for clearance to various banks of which cheques belongs. Every CMS center of HDFC had given a time limit for clearance of amount according to different places. But it happens that cheques are not in that stipulated time which has been prescribed by that bank. Therefore to check whether all the centers of HDFC are clearing the funds in given time period we have reconcile the statement given by the bank for clearance of cheques by looking into the time period taken by clearance of those cheques.

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HDFC Vs SBI REGARDING CMS

Sr HDFC . 1. 2. SBI CMS charges are nil where HDFC CMS charges apply by bank where branch are available. SBI branch are available. HDFC provide the SYSTEM by SBI do not provided the SYSTEM correspondent bank where HDFC where SBI branch not available. 3. 4. branch not available. HDFC SYSTEM time is more than SBI SYSTEM time is less than SBI. HDFC. In CMS report of HDFC with A/c In CMS report of SBI only A/c no. no. & date, Party name and time is & date is mentioned. also mentioned.

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CONCLUSION
Reports For Problem 1
After vouching the bank vouchers few important parties were named as defaulters and after my analysis a report generated was sent to respective depots. As those information were confidential I am not able to present those data and information. Few suggestions that has been given by me in the report are as follows: 1. 2. 3. All the depots must be integrated with an ERP system so as to minimize data redundancy. As the depots maintain there accounts on paper therefore to analyze the accounts was difficult. So all the depots should be computerized. Many of the vouchers were missing as they were transferred from depots to SCW. Computerization can solve this problem as data can be sent electronically through E-Mails. 4. As voucher were hand written due to which there were many errors in cheques numbers in book voucher slips, computerization can solve the problems.

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SUGGESTIONS
Report and Suggestions For Problem 2
By analyzing four months data of CMS i.e. of April, May, June, and September months the following outcomes has been drawn.

1) Here are the amounts for all four months and all the depot transfers: RESULTS Branch Name Interest Bahraich Loss 6347.3 8 Banda 2446.7 4 Basti 1562.8 3 Mozzfarpu r 1274.7 6 9434945 1022.7 6 1176625 3 263.85 1061998 1 2476 9201182 4879876 Location Total 1448733 1 7909313 1020.7 9 97.64 1379060 Interest Loss Location Total 1440933 1 7860116 3835.4 2 199.45 Interest Loss Location Total 2421341 2 1489327 6 1199133 Interest Loss 2055.5 5 6161.9 5 Location Total 2024296 5 6404441 April May June July

2)

From above given figure we can clearly state that there are few branches of H.D.F.C. which are not working properly and specially the Banda, Bahraich &

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Muzzafarpur, so expect these branches all other branches are working properly. We should give them the sorted data so that they can give their clarifications. 3) The interest in month of April, May and June is calculated on 10.75%, whereas due to rise in percentage of interest it has been calculate on 11% in month of September. 4) As all branches are working properly except few and also the calculated amount is very less as compared to transaction amount, so we should not charge interest but should levied only when they do not improvise.

5)

Many small branches like Banda, Deoria, Sultanpur etc has 1 day limit for clearance of Cheques / DDs whereas main branch like New Delhi, Mumbai, Allahabad, Varanasi, Lucknow etc has 2 day limit. So we should ask them to switch to 1 day instead of 2 days so we can reduce the life cycle of working capital by 1 day.

As per above given figures the important part is not the interest but the amount blocked by the bank

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LIMITATIONS
1. AVAILABILITY OF DATA:As an outsider, getting confidential data is not possible, so the data which has been used here for research has taken either from web resources or the approximate figures has been used.

2. RELEVANCY OF THE PROJECT:The study was done only at JRP, while the data that has been taken from web resources are of whole BCL satna, so this might not fully correct.

3. AUTHENCITY OF DATA:Some data & facts have been, considered final just from the word of mouth , so the relevancy of the data may not be there.

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Bibliography Reference Sites: Website www.google.com Internal Data Provided by the Company Data collected from HDFC (Satna) Data collected from SBI (Satna) WWW.satnacement.com.

WWW.birlacorporation.com.

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