INTRODUCTION

INTRODUCTION TO FINANCIAL MANAGEMENT Financial management is a process of identification, accumulation, analysis, preparation, interpretation and communication of financial information to plan, evaluate, and control business firms. Financial management is the specialized function of general management, which, is relates to the procurement of finance, and its effective utilization for the achievement of the goal of the organization. MEANING: Financial Management is an organizational activity that is concerned with the management of financial resources. In common parlance is described as providing monetary resources at the time they are required. But financial management covers the mobilization and effective utilization of funds. DEFINITIONS: 1. Financial Management is defined as that business activity which is concerned with the acquisition and conservation of capital funds in meeting the financial needs and overall ob!ectives of business enterprises" #. WHEELER.

Business finance can be broadly defined as the activity concerned with the planning, raising, controlling and administrating the funds used in the business". - GUTHMANN AND DOUGALL.

$. Finance Management is concerned with the efficient use of an economic resources, namely capital funds".

important

- SOLOMON.

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Financial

management

is

an

area

of

financial

decision

ma&ing

harmonizing individual motives and enterprises goals". -WESTON & BRIG NATURE AND SCOPE OF FINANCIAL MANAGEMENT & IMPORTANCE: Financial management is a branch of business management, which is associated with future planning, 'rganization, co(ordination and control. Financial management provides a sound base to all managerial decisions.

)roduction, research and development decisions are based on financial management.

Financial management is a scientific and analytical analysis.

In the process of decision ma&ing and financial analysis modern mathematical techniques are used. Managing a firm is both science and an art.

*n analysis of the various definitions mentioned above ma&e it clear that financial management is concerned with the proper management of funds &eeping in view the enterprise ob!ectives.

+he financial manager should loo& after that the funds are procured in a manner that the ris& and cost consideration are properly balanced and there is optimum utilization of funds.

Investment e!"s"#n:+his relates, to investment in capital assets and current assets. ,valuating of different capital investment proposals and selection of the best, &eeping in view the overall ob!ectives of enterprise. Investment in current assets depends upon the credit and inventory policy of the business. -redit policy depends upon the production, prices of raw materials and availability of funds etc. D"v" en e!"s"#n: -

.etermining of dividend policy is an important tas&. +he dividend decision involves what percentage of profits to be paid to the share holders. * number of factors effecting the dividend decision such as mar&et price of the share, earnings, ta/ position etc. OB$ECTI%ES OF FINANCIAL MANAGEMENT Financial decisions can be ma&e &eeping in view the basic ob!ective of ma/imization of owner0s economic welfare. It can be achieved through two widely accepted criteria. PROFIT MA&IMISATION +he efficiency of the firm is measured through the volume of profits earned by it. It means ma/imizing the rupee income of the firm. )rofit ma/imization ob!ective may be started in terms of return on investment or profit ( to ( sales ratios. +his would help in profitable utilization of society0s economic resources, since the financial manager is responsible for the efficient utilization of resources, increasing of revenues, controlling costs, Minimizing ris&s. WEALTH MA&IMISATION 1ealth ma/imization ob!ective is a widely recognized criterion with which the performance of business enterprise is evalued. +he word "wealth" refers to the net present worth of the firm. +he net present worth is the difference between gross present worth and the amount of capital investment required to achieve the benefits.

2ross present worth represents the present value of e/pected cash flows 3benefits4 discounted at a rate. IMPORTANCE OF FINANCIAL MANAGEMENT Finance is very essential for the smooth running of the business. It has been rightly termed as universal lubricant, which &eeps the enterprise dynamic. It is indispensable in any organization as it helps in5 314 Financial planning and successful promotion of an enterprise5 3#4 *cquisition of funds as and when required at the minimum possible cost5 3$4 )roper use and allocation of funds5 3%4 +a&ing sound financial decisions5 364 Improving the profitability through financial controls5 374 Increasing the wealth of the investors and the nation5 and 384 )romoting and mobilizing individual and corporate savings.

O'(e!t"ves #) F"n*n!"*+ M*n*,ement:

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+he financial management is generally concerned with procurement, allocation and control of financial resources of a concern. +he ob!ectives can be( 1. +o ensure regular and adequate supply of funds to the concern. #. +o ensure adequate returns to the shareholders which will depend upon the earning capacity, mar&et price of the share, e/pectations of the shareholders9

$. +o ensure optimum funds utilization. 'nce the funds are procured, they should be utilized in ma/imum possible way at least cost. %. +o ensure safety on investment, i.e., funds should be invested in safe ventures so that adequate rate of return can be achieved.

6. +o plan a sound capital structure(+here should be sound and fair composition of capital so that a balance is maintained between debt and equity capital.

CAPITAL BUDGETING
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* capital budgeting decisions may be defined as the firm0s decision to invest its current funds most effectively : efficiently in the long(term assets, in anticipation of an e/pected flow of benefits over a series of years. +he long(term assets are those that affect the firm0s operations beyond the one year period. +he firm0s investment decisions would generally includes e/pansion, acquisition modernization and replacement of long term assets. ;ale of a division or business is also an investment decision. .ecision li&e the change in the methods of sales distribution, or an advertisement campaign or research and development program have long (term implications for the firm0s e/penditure and benefits, and therefore they should also be evaluated as investment decisions. -apital budgeting has its going in the natural recourse and infrastructures sectors. +he current demand for infrastructures and capital investments is being fueled by deregulation in the FMCG" 3Fast Moving -onsumer 2oods4, telecommunication, : transportation sectors, by the globalization of product mar&ets and the needs from manufacturing scale, and by the privatization of government owned entities in developed countries : developing. -apital investments, representing the growing edge of a business, are deemed to be very important +hree inter(related factors<( +he influence of firm growth in the long term consequences li&e capital investment decisions have considerable impact on what the firm can do in future. +hey affect the ris& of the firm, it is difficult to reverse capital investment decisions because the mar&et for used capital investment in ill organized or most of the capital equipments bought by a firm to meet its specific requirements. -apital investment decisions involve substantial outlays.

-apital budgeting is the process of ma&ing investment decisions in capital e/penditures. * capital e/penditure may be defined as an e/penditure the benefits of which are e/pected to be received over a period of time e/ceeding one year. +he main characteristic of a capital e/penditure is that the e/penditure is incurred at one point of time whereas benefits of the e/penditure are realized at different points of time in future. In simple language we may say that a capital e/penditure is an e/penditure incurred for acquiring or improving or improving the fi/ed assets, the benefits of which are e/pected to be received over a number of years in future. +his pro!ect presents two versions of heuristic algorithm to solve a model of capital budgeting problems in a decentralized multidivisional firm involving no more than two e/changes of information between headquarters and divisions. =ead quarters ma&e an allocation of funds to each division based upon its cash demand and its potential growth rate. ,ach division determines which pro!ects to accept. +hen, an additional iteration is performed to define the solution +o ta&e up a new pro!ect, involves a capital investment decision and it is the top management0s duty to ma&e a situation and feasibility analysis of that particular pro!ect and means of financing and implementing it financing is a rapidly e/panding field, which focuses not on the credit status of a company, but on cash flows that will be generated by a specific pro!ect +he capital budgeting decisions procedure basically involves the evaluation of the desirability of an investment proposal. It is obvious that the firm must have a systematic procedure for ma&ing capital budgeting decisions. +he procedure for ma&ing capital budgeting decisions must be consistent with ob!ective of wealth ma/imization. In view of the significance of capital budgeting decisions, the procedure must consist of step by step analysis of the data to bridging the gap in the organization. +he capital program is generally financed by borrowing money usually through the sales of bonds. +his differs from the company0s e/penses budget, which
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covers day(to(day operating e/penditures : is financed by company0s ta/es and other revenues along with other companies in the industry. +he capital budgeting strategy presents the goals, policy constraints, assumptions the organization0s capital needs over the ne/t 1> years. +he document also provides the anticipated sources of financing, and the implications of the strategy, including any possible economic, social and environmental effects. *fter a public hearing and a report by the organization planning commission or board of directors, the final version of the strategy is released with the e/ecutive budget in every year. +he strategy presents capital pro!ects in broad categories that reflect organization0s agency goals. +here are various ways the organization records the progress of capital pro!ects. In general, they measure financial transaction, spending and obligation, rather than what most department come about the status of wor& on a particular pro!ect. *lthough information is publicly available on annual capital spending by budget line, no information is currently made publicly available that provides detailed pro!ect level information on the status of capital pro!ects. FACTORS FOR CAPITAL BUDGETING -ost of acquisition of permanent asset as land and building, plant and machinery, goodwill, etc. -ost of addition, e/pansion, Improvement or alteration in the fi/ed assets.

-ost of replacement of permanent assets.

?esearch and development pro!ect cost, etc.

DEFINITIONS OF CAPITAL BUDGETING -apital budgeting is a long term planning for ma&ing and financing proposed capital outlays" - T.H#-n,-een

* budget is an estimate of future needs arranged according to at an orderly basis covering some or all the activities of an enterprise for a definite period of time" - Ge#-,e R. Te--. Budget as a financial and or quantitative statement prepared to a definite period of time, of the policy to be pursued during that period for the purpose of attaining a given ob!ective" - ICMA/ L#n #n

SIGNIFICANCE OF CAPITAL BUDGETING -apital budgeting decisions deserve to be treated in a different manner as there are conceptual problems involved which necessarily ma&es the decision process more comple/, while this ma&es things more difficult for the decision process ma&er, it also ma&es the problem more challenging. +here are several practical reasons for placing greater emphasis on capital e/penditure decisions. +hese are 0. LONG TERM PERIOD:+he consequences of capital e/penditure decisions e/tended far into future. +he scope of current manufacturing activities of a organization is governed largely by capital e/penditures in the past. Ai&ewise, current capital e/penditures decision provides the frame wor& for future activities. -apital investment decisions have an enormous bearing on the basic character of a organization. 1. IRRE%ESIBILIT2:+he mar&ets are used for capital equipment in general is ill(organized. Further, for some types of capital equipment, custom made to meet specific requirements, the mar&et may virtually be non(e/istent.

3. SUBSTANCIAL OUTLA2:-apital e/penditure usually involves substantial outlays. *n integrated steel plant, for e/ample, involves an outlay of several thousand millions. -apital costs tend to increase with advanced technology. NEED OF CAPITAL BUDGETING +he importance of capital budgeting can be well understood from the fact that unsound investment decision may prove to be fatal to the very e/istence of the concern. +he need, significance or importance of capital budgeting arises mainly due to the following Aarge investments Aong(term commitment of funds Irreversible nature Aong(term effect on profitability .ifficulties of investment decisions Cational importance

FEATURES OF CAPITAL BUDGETING PROCESS )otentiality large anticipated benefits. * relative high degree of ris&.

* relative long time period between the initial outlay and anticipated returns.

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OB$ECTI%ES FOR CAPITAL BUDGETING It determines the capital pro!ects on which wor& can be started during the budget period after ta&ing into account their urgency and the e/pected rate of return on each pro!ect. It estimates the e/penditure that would have to be incurred on capital pro!ects approved by the management together with the sources from which the required funds would be obtained.

It restricts the capital e/penditure on pro!ects with in authorized limit

4INDS OF CAPITAL BUDGETING -apital budgeting refers to the total process of generating, evaluating, selecting and following up an capital e/penditure alternatives. +he firm allocates or budgets financial recourses to new investment proposals. Basically, the firm may be confronted with three types of capital budgeting decisions<( +he accept or re!ect decision, +he mutually e/clusive choice decisions, and +he capital rationing decision

T2PES OF CAPITAL BUDETING DECISIONS -apital budgeting decisions are of paramount importance in financial decision ma&ing. In first place they affect the profitability of the firm. +hey also have a bearing on the competitive position of the firm because they relate to fi/ed assets. +he fi/ed assets are true goods than can ultimately be sold for(profit. 2enerally the capital budgeting of investment decision includes addition, disposition, modification, and replacement of fi/ed assets.

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05 E&PANSION OF E&ISTING BUSINESS:* company may add capacity to its e/isting product lines to e/pand e/isting operations. For e/ample Bharathi soap wor&s 3B;14 may increase its plant capacity to manufacture more detergents soaps : powder. expansion. 15 E&PANSION OF NEW BUSINESS:* Firm may e/pand its activities in a new business e/pansion of a new business requires investment and new &ind of production activating with in the firm. If pac&ing manufacturing company invests in a new plant and machinery to produce ball bearings, which the firm has not manufactured before, this represents e/pansion of new business or unrelated diversification. ;ometimes accompany acquires e/isting firms to e/pand its business. 35 REPLACEMENT AND MODERANI6ATION:+he main ob!ective of modernization and replacement is to improve operating efficiency reduce costs. -ost savings will reflect in the increased profits, but the firm0s revenue may remain unchanged. *ssets become outdated and absolute with technological changes. +he firm must decide to replace those with new assets that operate more economically. ?eplacement decisions help to introduce more efficient and economical assets and therefore, are also called cost(reduction investments.
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It is an example of related

=owever replacement decisions that involve substantial modernization and technological improvements e/pand revenues as well as reduce costs. Det another useful way to classify investments is as follows< Mutually e/clusive investments Independent investments -ontingent investments CAPITAL BUDGETING PROCESS +he preparation of the capital budget is a process that lasts many months and is intended to ta&e into account neighborhood and bough needs as well as organization wide. +he process begin in the fall, when each of the segment holds public hearings, each community board submits a statements of its capital priorities for the ne/t fiscal year to the managing director and appropriate borough chairmen. +he capital budgeting process involves @ steps e/plained in diagrammatic : theoretic as follows< DIAGRAMATIC REPRESENTATION OF CAPITAL BUDGETING PROCESS:

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05 IDENTIFICATION OF IN%ESTMENT PROPOSALS +he capital budgeting process begins with the identification of investment proposals. +he investment proposals may originate from the top management or from any officer of the organization. +he department head analyses the various proposals in the light of the corporate strategies and submit the suitable proposal to the capital budgeting committee in case of large organizations concerned with process of long(term investment proposals. 15 SCREEN PROPOSALS +he e/penditure planning committee screens the various proposals received from different departments in different angles to ensure that these are in selection criteria of the organization and also do not lead to department imbalances. 35 E%ALUATION OF %ARIOUS PROPOSALS +he ne/t steps in capital budgeting process in to evaluate the probability of various probability the independent proposals are those which do not complete with one another and the same way be either accepted or re!ected on the basic of a minimum return on investment required. 75 FI&ING PRIORITIES *fter evaluating various proposals, the unprofitable or uneconomic proposals may be re!ected straight away. But it may not be possible for the organization to invest immediately in all the acceptable proposals due to limitations of funds. =ence, it is very essential to ran& the various proposals and to establish priorities after considering urgency, ris& : profitability involved the criteria. 85 FINAL APPRO%AL )roposals meeting the evaluation and other criteria are finally approved to be included in the capital e/penditure budget. =owever proposals involving smaller investment may be decided at the lower levels for e/peditious action. +he capital e/penditure budget lay down the amount of estimated e/penditure to be incurred on fi/ed assets during the budget period.

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95 IMPLEMENTING PROPOSALS:)reparation of a capital e/penditure budgeting : incorporation of a particular proposals in the budget does not itself authorize to go with implementation of the pro!ect. * request for authority to spend the amount should be made to be the capital e/penditure committee which may li&e to review the profitability of the pro!ect in changed circumstances. In the implementation of the pro!ects networ&s techniques such as ),?+ : -)M are applied for pro!ect management. :5 PERFORMANCE RE%IEW:In this stage the process of capital budgeting is the evaluation of he performance of the pro!ect. +he evaluation is made through post completion audit by way of comparison of actual e/penditure on the pro!ect with the budgeted one, and also by comparing the actual return from the investment with the anticipated return. +he unfavorable variances if any should be loo&ed into and the causes the same be identified so that identified so that corrective action may be ta&en in future. ;5 FEEDBAC4:+he last step in the capital budgeting process is feedbac& from employee involved in the organization. If any consequences are there the process come to 1st step of the process.

GUIDELINE FOR CAPITAL BUDGETING +here are many guidelines for capital budgeting process either it is long(term or short( term plan. +he ma!or points are< Ceed and ob!ectives of owner ;ize of mar&et in terms of e/isting : proposed product lines and anticipated growth of the mar&et share ;ize of e/isting plants : plans for new plant sites and plant ,conomic conditions which may affect the firm0s operations and

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 Business and financial ris& associated with the replacement : e/isting assets of the purchases of new assets. DIFFICULTIES OF CAPITAL BUDGETING 1hile capital e/penditure decisions are e/tremely important, they also pose difficulties which stem from three principal sources< Identifying : measuring the costs : benefits of a capital e/penditure proposal tends to be difficult +here is great deal of uncertainty for capital e/penditure decision which involves cost : benefits that e/tend far into the future It is impossible to predict e/actly what will happen in the future +he time period creates some problems in estimating discount rates : establishing equivalences LIMITATIONS OF CAPITAL BUDGETING -apital budgeting techniques suffer from the following limitations< *ll the techniques of capital budgeting presume that various investment proposals under consideration are mutually e/clusive which may not practically be true in some particular circumstances. +he techniques of capital budgeting require estimation of future cash inflows and outflows. +he future is always uncertain and the data collected for future may not be e/act. 'bliviously the results based upon wrong data may not be good. +here are certain factors li&e morale of the employees, goodwill of the firm, etc., which cannot be correctly quantified but which other wise substantially influence the capital decision. Ergency is another limitation in the evaluation of capital investment decisions. Encertainty and ris& pose the biggest limitation to the techniques of capital budgeting.

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COMMITTEE

IN

CAPITAL BUDGETING

SIMILARITIES BUDGETING %ALUATION 'nce a potential capital &

BETWEEN SECURIT2

CAPITAL

budgeting pro!ect has been

identified, its evaluation involves the same steps that are used in security analysis< First, the cost of the pro!ect must be determined. +his is similar to finding the price that must be paid for stoc& or bond. Ce/t, management estimates the e/pected cash flows from the pro!ect, including the salvage value of the asset at the end of its e/pected life. +his is similar to estimating the future dividend or interest payment stream on a stoc& or bond, along with the stoc&s e/pected sales price or the bond0s maturity value +hird, the ris&iness of the pro!ected cash flows must be estimated.+his requires information about the probability distribution of the cash flows. 2iven the pro!ect0s ris&iness, management determines the cost of capital at which the cash flows should be discounted.

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 Ce/t, the e/pected cash flows are inflows are put on a present value basis to obtain an estimate of the asset0s value. +his is equivalent to finding the process value of stoc&0s e/pected future dividends.

Finally, the present value of e/pected cash inflows is compared with the required outlay. If the )F of the cash flows e/ceeds the cost, the pro!ect should be accepted. 'therwise, it should be re!ected.

COST EFFECTI%E ANAL2SIS In the cost effectiveness analysis the pro!ect selection or technological choice, only costs of two or more alternatives choices are considering treating the benefits as identical. +his approach is used when the acquisition of how to minimize the costs for underta&ing an activity at a given discount rates in case the benefits and operating costs are given, one can minimize the capital cost to obtain given discount. PRO$ECT PLANNING +he planning of a pro!ect is a technically pre(determined set of inter related activities involving the effective use of given material, human, technological and financial resources over a given period of time. 1hich in association with other development pro!ects result in the achievement of certain predetermined ob!ectives such as the production of specified goods and services. )ro!ect planning is spread over a period of time and is not a one shot activity. +he important stages in the life of a pro!ect are< It0s identification It0s initial formulation It0s evaluation It0s final formulation It0s implementation
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 It0s completion and operation +he time ta&en for the entire process is the gestation period of the pro!ect. +he process of identification of a pro!ect begins when we are seriously trying to overcome certain problems. +hey may be non(utilization to overcome available funds. )lant capacity, e/pansion etc, CONTENTS OF THE PRO$ECT REPORT ?aw material Mar&et and mar&eting ;ite of pro!ect )ro!ect engineering dealing with technical aspects of the pro!ect Aocation and layout of the pro!ect building Building )roduction capacity 1or& schedule

CRITERIA FOR CAPITAL BUDGETING: )otentially, there is a wide array of criteria for selecting pro!ects. ;ome shareholders may want the firm to select pro!ects that will show immediate surges in cash flow, others may want to emphasize long(term growth with little importance on short(term performance viewed in this way, it would be quite difficult to satisfy the differing interests of all the shareholders. Fortunately, there is a solution.

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CAPITAL BUDGETING TECHNI<UES

NON =*5

DCF CRITERA P*.'*!> ?e-"# :+he paybac& period is one of the most popular and widely recognized

traditional methods of evaluation investment proposals. )aybac& period is the number of years required to recover the original cash outlay invested in a pro!ect. If the pro!ect generates constant annual cash flows, the paybac& period can be computed by dividing cash outlay by the annual cash inflows.
Co G Initial investment

- G *nnual cash inflows

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In the case of un equal cash inflows, the paybac& )aybac& period G

Initial investment Co *nnual cash inflows C

period can be found out by adding up the cash inflow until the total is equal to the initial cash outlay. ='5 A!!#@nt"n, R*te #) Ret@-n =ARR5 +he accounting rate of return 3*??4 also &nown as the return on investment 3?'I4 uses accounting information, as revealed by financial statements, to measure to profitability of an investment. +he accounting rate of return is the ratio of the average after +a/ profit divided by the average investment. +he average investment would be equal to half of the original investment if it were depreciated constantly. * ? ? G *verage investment 1>> DCF CRITERIA =*5 Net P-esent v*+@e =NP%5 +he C)F present value 3C)F4 method is the classic method of evaluating the investment proposals. If is a .-F technique that e/plicitly recognizes the time value at different time periods differ in value and comparable only when their equipment present values H are found out. C.).F G
n

*verage Income

-1 -# -$ + -n + + + ......... C> # $ 31 + &4 31 + &4 31 + &4 31 + &4 n

C)F G 1here

31 + k 4
i =>

C1

Co

C)F G Cet present value

C fi G -ash flows occurring at time

& G +he discount rate n G life of the pro!ect in years

C> G -ash outlay

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='5 Inte-n*+ R*te #) Ret@-n =IRR5 +he internal rate of return 3I??4 method is another discounted cash flow technique which ta&es account of the magnitude and thing of cash flows, other terms used to describe the I?? method are yield on an investment, marginal efficiency of capital, rate of return over cost, time H ad!usted rate of internal return and soon. C)F G 1here
- fi G -ash flows occurring at different point of time

31 + & 4
i =>

-fi

;F + 131 + & 4 n

& G the discount rate n G life of the pro!ect in year

-> G -ash out lay

;F : 1- G ;alvage value and wor&ing capital at the end of the n years. I?? G A I 1here A G Aower discount rate at which C)F is positive = G =igher discount rate at which C)F is negative * G C)F at lower discount rate, A B G C)F at higher discount rate, =
* 3 = A4 3a b 4

##

=C5 P-#)"t*'"+"t. "n eA =PI5 Det another time H ad!usted method of evaluating the investment proposals is the benefit H cost 3BJ-.4 ratio or profitability inde/ 3)I4 )rofitability inde/ is the ratio of the present valued of cash inflows, at the required rate of return, to the initial cash out of the investment.

)I = )F of -ash outlay

)F of -ash flow

1here )F G )resent Falue CRITERIAN TABLE In the evaluation process or capital budgeting techniques there will be a criteria to accept or re!ect the pro!ect. +he criteria will be e/pressed as<

-riterionJMethod )ay Bac& )eriod 3)B)4 *ccounting ?ate of ?eturn 3*??4 Cet )resent Falue 3C)F4 Internal ?ate of ?eturn 3I??4 )rofitability inde/ 3)I4

*ccept K+arget )eriod L +arget ?ate L> L-ost 'f -apital

?e!ect L+arget )eriod K +arget ?ate K > K-ost 'f -apital

Indifferent G+arget period G+arget rate G> Gcost of capital

L1

K1

G1

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RESEARCH METHODOLOG2
NEED OF THE STUD2: +o ;tudy the proposal for e/pansion or creating additional capacities +o ma&e financial analysis of various proposals regarding capital investment so as choose the best out of the many alternative proposals +o have a personal e/posure by visiting oraganisation for many times.

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OB$ECTI%ES OF THE STUD2 +o present theoretical framewor& relating to capital budgeting. +o study the financial aspects for future e/pansion of B=*?*+=I ;'*) 1'?M;" +o &now the process of pro!ect evolution followed by B=*?*+=I ;'*) 1'?M;". +o &now the importance of capital budgeting techniques in appraising a pro!ect. +o summaries and offer suggestions for the better investment proposals in B=*?*+=I ;'*) 1'?M;".

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SCOPE OF THE STUD2 B=*?*+=I ;'*) 1'?M;" is a growing concern. -apital budgeting is more or less a continuous process and it is carried out by different functional areas of management such as production, mar&eting, chemical engineering, financial management etc. all the relevant functional departments play a crucial role in the capital budgeting decision process. ;tudy of this type is useful to management, employees, suppliers, and society ;tudy of this type is useful to research scholars to conduct in(depth research ;tudy of this type is useful to the similar organization is assessing their financial performance ;tudy of this type is useful to ma&e competitors to ma&e necessary steps to improve the capital budgeting

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RESEARCH METHODOLOG2 Methodology is a systematic processes of collecting information in order to analyze and verify a phenomenon. +he collection of data is two principle sources. +hey are discussed as< I. )rimary data II. ;econdary data PRIMAR2 DATA:+he primary data needed for the study is gathered through interview with concerned officers and staff, either individually or collectively, sum of the information has been verified or supplemented with personal observation conducting personal interviews with concerned officers of finance department of B=*?*+=I ;'*) 1'?M;". SECONDAR2 DATA:+he secondary data needed for the study was collected from published sources such as, pamphlets of annual reports, returns and internal records, reference from te/t boo&s and !ournal management. Further data needed for the study was collected from<( -ollection of required data from annual records of 1'?M;". ?eference from te/t boo&s and !ournals relating to financial management. B=*?*+=I ;'*)

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DIAGRAMITIC REPRESENTATION OF RESEARCH METHODOLOG2

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LIMITATIONS OF THE STUD2

+he following are the limitations of the study< ;ince the procedure and policies of the company will not allow to disclose confidential financial information, the pro!ect has to be completed with the available data given to us. +he period of study that is @ wee&s is not enough to conduct study of the pro!ect. +he study is carried basing on the information and documents provided by the organization and based on the interaction with the various employees of the respective departments.

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INDUSTR2 PROFILE
*fter e/panding at a snail0s pace, the mar&et for personal wash products appears to have come to grinding halt in #>>1. *fter posting modest single digit growth in 1BB8(#>>> figures for the first seven months suggest that mar&et for detergent soaps has actually shrun&. ,stimates about the e/tent of declines in mar&et size vary, =industan liver, which straddles. +he category with 7>N mar&et share by value, say the mar&et shrun& by %.6N in value terms in the first half of #>>1. +he Indian ;oap and .etergent Manufactures *ssociation, puts the decline at 1N. 'ther industry sources suggest that the e/tent of .e(growth" in the first eight months of #>>6 could be as high as 8N. DE%ELOPMENT OF THE DETERGENT INDUSTR2 *lthough the start of the synthetic detergent industry is not shrouded in the veils of history as were the beginnings of the soap industry, it is nevertheless not easy to pinpoint e/actly when the detergent industry, as such, came into being. +he primary problem is to decide e/actly what is being referred to as a synthetic detergent. +he term itself leads to confusion. In IC.I* the words surfactant or syndic are being used, whilst in ,urope the term Oten sideO 3for tension(active material4 is coming into fashion. But if the shrin&ing mar&et size suggest that Indian consumers are actually been cutting bac& on their use of detergent soaps, this is not really the case. In volume terms, the mar&et for detergent soaps has continued to show a growth of 1>N in the first eight months of #>>6 +he ma!or players have certainly managed to sell more detergent soaps by volume but price competition in the segment and slew of promotional campaigns have

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reduced the effective realization per unit sold. +his has probably neutralized the gains from volume e/pansion. DEFINITIONS Many definitions of synthetic detergent have been proposed, all of which are very wide. +he -ommit International de .rives +ension *ctins has after several years of deliberation agreed on the following definitions< Dete-,ent< Means the formulation of which is specially devised to promote the development of detergency. Note: * detergent is a formulation comprising essential constituents 3surface active agents4 and subsidiary constituents 3builders, boosters, fillers and au/iliaries4. S@-)*!e A!t"ve A,ent: -hemical compound which, when dissolved or dispersed in a liquid is preferentially absorbed at an interface, giving rise to a number of physic(chemical or chemical properties of practical interest. +he molecule of the compound includes at least one group with an affinity for mar&edly polar surfaces, ensuring in most cases solubilization in water, and a group which has little affinity for water. Note: -ompositions in general are usually mi/tures of such compounds. Am?B"?B"+"! P-# @!t< )roduct comprising in its molecule, at the same time one or more hydrophilic groups and one or more hydrophobic groups. Note: surface active agents are amphiphilic products. S2NTHETIC DETERGENTS +he term Psynthetic detergentP is used throughout this article, for a material which cleans 3or is used for cleaning4, but in this definition soap is not included. ,ven so, this is still a wide definition, because, of course, it can refer to the active ingredient, or the solid, liquid, paste or powder compounded from this active matter. =owever, this should not lead to confusion, as the industry itself as yet ma&es no distinction in terminology between the basic material and the ready(for(use product.

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+he first synthetic detergents which fall into our definition of the term seem to have been developed by the 2ermans the First 1orld 1ar period to allow fats to be utilized for other purposes. +hese detergents were of the short(chain al&yl naphthalene sulphonate type, made by coupling propyl or butyl alcohols with naphthalene and subsequent sulphonation, and appeared under the general name of Ce&al. +hese products proved to be only fair to moderately good detergents, but good wetting agents and are still being produced in large quantities for use as te/tile au/iliaries. In the late 1B#>0; and early 1B$>0; long(chain alcohols were sulphonated and sold as the neutralized sodium salts without any further additions e/cept for sodium sulphate as an e/tender. In the early 1B$>s long(chain al&yl aryl sulphonates with benzene as the aromatic nucleus, and the al&yl portion made from a &erosene fraction, appeared on the mar&et in the E;*. *gain, these were available as the sodium salts e/tended with sodium sulphate. Both the alcohol sulphates and the al&yl aryl sulphonates were sold as such as cleaning materials, but did not ma&e any appreciable impression on the total mar&et. *t the end of the ;econd 1orld 1ar al&yl aryl sulphonates had almost completely swamped the sales of alcohol sulphates for the limited uses to which they were applied as general cleaning materials, but the alcohol sulphates were ma&ing big inroads into the shampoo field. *n e/ception was +eepol, a secondary alcohol sulphate which remained popular for some years. In common, however, with other chemical developments during this century, progress was not in one direction only. +he limiting factor is always the availability of raw materials in a particular country. -on(currently with the above developments, there were developed, both in 2ermany and the E;*, the lgepon type of compounds of which lgepon(+, the sodium salt of oleyl tauride is an e/ample, and in 2ermany the Mersolates, which are al&ane sulphates. In the Enited Mingdom, +eepol, a secondary olefine sulphate from petrochemical sources, was manufactured in large quantities and is still being produced in ,ngland and 1estern ,urope even to this day.

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,ach of these basic materials has its advantages and disadvantages, but in considering the feasibility of production the following factors must be ta&en into account<

*vailability of raw materials5 ,ase of manufacture5 -ost of raw materials5 -ost of manufacture5 ;uitability of finished product.

1e have purposely placed suitability last, as it is only too true that not always is the best material made available. *s a result of its ease of manufacture and versatility, the al&yl benzene sulphonate very quic&ly gained a foothold in the mar&et, and after the last war the e/isting &eryl benzene was very quic&ly replaced by an al&yl benzene made from propylene tetramer coupled to benzene 3)+ benzene4. +his )+ benzene very quic&ly displaced all other basic detergents and for the period 1B6>(76 considerably more than half the detergents used throughout the world were based on this. S2NTHETIC DETERGENTS PRODUCTION *bout the enormous rise in synthetic detergent production, compiled from figures submitted by the *merican ;oap and .etergent *ssociation and the 2erman firm of =en&el : -ie shows both soap and detergent sales in the E;* for various years to 1B8#. SALES TURNO%ER IN INDIA

$$

INDIA

S#*?

S#*? S*+es 0CCC t#ns 1%1> 1$%> 6@$ 6@8 7#> 6@> 7#> 76>

S.ntBet"! s*+es 0CCC t#ns %.6 766 17%6 %%%@ %7@> %6@> %@6> %B>>

*n Dete-,ent s*+es 3Dear4 1B%> 1B6> 1B7> 1B8# 1B@# 1BB# #>># #>11

GRAPHICAL REPRESENTATION OF SALES TURNO%ER IN INDIA

+hese figures reveal that immediately after the ;econd 1orld 1ar synthetics started ma&ing inroads into the production of soap, which now seems to have settled down to a constant whereas synthetics have increased enormously. By 1B6B although the E; per capita consumption had somewhat leveled out, total production was still rising as shown which has been compiled from the 1B7$

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-ensus of Manufacturers by the Bureau of -ensus of the E; .epartment of -ommerce and from the =en&el figures PRODUCTION OF DETERGENTS IN FIGURES

C#m?*-*t"ve P-# @!t"#n F",@-es )#S.ntBet"! Dete-,ents 0E8C =0CCC t#ns5 0E9C =0CCC t#ns5 0E:1=0CCC t#ns5 0E;1 =0CCC t#ns5 0EE1 =0CCC t#ns5 1CC1 =0CCC t#ns5 1C00 =0CCC t#ns5

D#mest"! ete-,ents =s#+" 5 1#>> 1%#6 #78# $>>> $8@> %#@> %6>>

D#mest"! ete-,ents =+"D@" 5 $6% 97C 0::3 111; 1;:1 31;: 3;;8

GRAPHICAL REPRESENTATION OF PRODUCTION TURNO%ER IN INDIA

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+he broad picture that appears from is that while solid detergents 3among which of course powders are included4 are ma&ing great strides forward, the liquid detergents are increasing at a much faster rate.

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LOW PRICED BRANDS Industry player commonly attribute the de(growth in the soap mar&et to down trading. .etergent soaps are the highest penetrated product with in the FM-2

mar&et, reaching an estimate B6N of the urban and @8N of the rural households. +he fairly high contribution from the rural mar&ets ma&es this category sensitive to the fortune of the agricultural economy.

+he prolonged drought in Corth and 1est of the country 3until #>>>4 and the sharp fall in farm disposable income has probably persuaded low income households to the down trend, that is shift from high to low price brands.

+his is indeed supported by the fact that with in detergent soaps, it is the discount segment 3soaps that cost between 6(1> per 86gms4 that has registered the highest growth rate over the past years. =AA to appear to endorse the phenomenon of down trading. +here has been an inter(spectral shift in the soap mar&et, with

consumer down trading from premium and popular to discount soaps" e/plains the company0s spo&esperson.

=owever Mr. =osherder.M press 2odre! consumer care, begs to differ 1e thin& consumers have already pre(committed their incomes for installments on durables. +he substitution of soap with shampoos for hair wash has also impacted the growth" he said.

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MORE OFFERINGS +his is despite the fact that this usually sleepy category has seen a spate of new players debut new offers in recent times. 'ver the past couple of years, CI?M* has launched a slew of low priced soaps under the banner of CI?M*.

=en&el spi& has made a maiden foray in to the mar&et with a far range of detergent soaps. +he mar&et leader =AA to relaynced several detergent soaps.

WASHING IMPRO%EMENTS *fter the war, when detergents started appearing in appreciable quantities on the retail mar&et, it was noted that white cotton goods were not being washed as white as they should be. +his was e/plained by the fact that although the active material was able to lift the dirt from the cloth it could not &eep it in suspension. =ence small spots of dirt were being re(deposited uniformly over the whole surface area of the cloth while in the wash(tub or machine, thus giving the cloth a grey appearance

BETTER <UALIT2 +he crowded mar&et place has also brought a few benefits to the consumer mar&eters of soap have tried to woo consumers through un graded offerings and better quality soaps. *ided by low input prices, the mar&eters of detergents have increased the content in their brands, to offer better quality soaps at a low price. Industry watchers say the content in some brands has risen from 6>(7>N of earlier to 8>Nof

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late. +herefore, per unit realization an soaps have declined, the mar&eters of soap have actually sacrificed a part of their margins on hi&ing the content.

TOUGH TIMES A HEAD 1ith competitive pressures on the rise and a large number of brands !ostling for consumer attention in sluggish mar&et li&ely to remain a different one for most players. ;maller players such as 2odre! -onsumer and =en&el ;pic have been in a position to report rebust sales growth in the category over the past years despite the bruising competition.

=owever, this is partly due to a relatively small base of comparison. Enless the mar&et e/pands, the frenetic promotional activity may soon tell on the growth rate of players. *nd when it comes to sustaining a high decipel promotional campaign, =AA0s size certainly gives is the where withal to do it.

RURAL RE%I%AL It appears that a genuine boost to the mar&et size for detergent soaps will still have to come from a survival in rural demand.

,vidence from the past does appear to suggest that a sharp rise in rural incomes would have a cascading affect on mar&et in 1BBB, after a year of sluggish growth in 1BB@, demonstrated that a recovery in agricultural output does have on indirect impact on sales volumes of FM-2 products.

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+his year, reports of a good monsoon in the northern : western parts of the country have spar&ed off speculation about a revival in FM-2 growth rates. +he fact these two regions account for 7>N of the demand for FM-2 strengthens this agreement. =owever, it appears to be a bit early in the day to call it revival. For one, while the northern : western regions have received satisfactory rein, southern India has been the victim of very erratic monsoon.

;econd, given that the good monsoon in the current year succeeds two or three consecutive years of drought in some regions, there could be a substantial time tag before higher rural incomes translates into better FM-2 demand.

+hird, farm product prices have dropped sharply in response to built up of surplus grain stoc&s. +herefore, even if a good monsoon translates into agricultural output, there is the question of whether this will actually e/pand or shrin& farm incomes.

+hese factors suggest that it may be premature to ta&e investment e/posures in companies focused on detergent soaps in the hope of revival. If may be better to wait for concrete signs of o pic&up in rural demand, which is certainly some way off. THE SOAP MAR4ET: NOT E&ACTL2 BUILDING 2e*#>>8 #>>@ #>>B %#+@me %,$#,#6%.>> %,%@,1%1.>> %,67,>%>.>> G-#FtB =G5 $.7 $.8 1.@ Re*+"H*t"#n =RsIt#ns5 %7,#$8.>> 6#,166.>> 6$,%%$.>> G-#FtB =G5 1>.6 1#.@ #.6

%>

#>1> #>11

%,81,>>>.>> %,B@,@>>.>>

$.$ %.@

67,#>$.>> 67,$#>.>>

6.# >.#

CARBO&2 METH2L CELLULOSE =CMC5 +he sodium salt of carbo/y methyl cellulose 3-M-4 had been &nown to industry for many years and, in fact, a French patent had been applied for in 1B$7,1 using -M- as an additive to washing materials. =owever, this patent was not developed e/tensively until the ;econd 1orld 1ar, when -M- was used in 2ermany on a moderately large scale, initially as an e/tender for soap which was in short supply, and then as an additive to the synthetic detergents being produced as a wartime substitute for soaps. 1hen intelligence reports on the 2erman industry were published, the use of -M- as an additive to synthetic detergent powders was noted and investigated and it was found that this addition eliminated the redeposit ion problem. BUILDERS: .espite the considerable advances made in the production of the active detergent matter, by the end of the ;econd 1orld 1ar progress in the use of detergents for heavy(duty 3cotton4 washing was still relatively slow, although they had already displaced soaps to a considerable e/tent in the field of fine laundering and dish(washing. +o improve the heavy(duty washing properties, manufacturers turned for analogies to the soap industry. ;oap for cotton washing had for many years been ObuiltO with al&aline materials such as carbonates, silicates, bora/, and orthophosphates. *ll of these singly and in combination were tried with moderate success. -ondensed phosphates had started appearing on the mar&et in increasing quantities and from 1B%8 onwards heavy(duty detergent formulations were introduced, initially with tetra sodium pyrophosphate and then with sodium tripolyphosphate with startling success. 1ith the advent of -M- and tripolyphosphate builders the detergent industry established itself and has never loo&ed bac&. tripolyphosphate in IC.I* are enlightening.
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+he production figures of

%#

PRODUCTION OF SODIUM TRIPOL P!OSP!"T#

2e*1B%8 1B6> 1B6B 1B7% 1B78 1B8> 1B8# 1B8% 1B@% 1BB%

T#ns 1>#,>>> #@>,>>> 8>>,>>> @>,>>>,>>> B6,>>>,>>> 1>B,>>>,>>> B%,>>>,>>> @#,>>>,>>> B>,>>>,>>> 1>>,>>>,>>>

.*+*< +a&en from the IC.I*C .epartment of -ommerce figures

It will be noted that there is a falling off after 1B8>. international shortages of raw materials.

+he reason is a

combination of restrictions on and opposition to the use of phosphates, and also

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EN%IRONMENTAL ISSUES )ropylene tetramer benzene sulphonate held almost undisputed sway as the ma!or ingredient used in washing operations till the early 1B7>s. *round this time it was noted, however, that sewage treatment problems were arising. +he amount of foam on rivers was increasing and where water was being drawn from wells located close to household discharge points, the water tended to foam when coming out of the tap. +his was attributed to the fact that propylene(based al&yl benzene sulphonates are not completely degraded by the bacteria naturally present in effluents, and was further narrowed down to the fact that it is the branched(chain formation of the al&yl benzene which hinders the attac& by the bacteria. =owever, fatty acid sulphates were found to degrade very easily, and since all naturally occurring fatty acids from which fatty alcohols are produced are of the straight(chain variety 3as also are the Qiegier alcohols which started appearing in commercial quantities at about this time4, it seemed possible that a straight(chain al&yl benzene might be degradable.

%%

Methods of test were developed and it was, in fact, proved that linear al&yl benzene is biodegradable. 2ermany introduced legislation prohibiting the discharge of non(biologically degradable material into sewer systems. benzene by Rune 1B76. In the E;* detergent manufacturers agreed voluntarily to switch over from )+ benzene to linear al&yl In the Enited Mingdom a similar type of OgentlemanOs agreementO was entered into. +he change to linear al&yl benzene 3which can be considered as a return to a purified form of the &eryl benzene in use twenty years previously4 gave some rather surprising results. It was found that the detergency in a heavy(duty formulation using linear al&yl benzene sulphonate was appro/imately 1> per cent better than when using )+ benzene sulphonate, solutions of the neutralized sulphonic acid had a lower cloud point, and pastes and slurries had a lower viscosity. +he first two results were obviously advantageous and a lower viscosity in slurries had an advantage when the product was spray(dried to a powder, but when the A*; was sold as a liquid or paste detergent, this lower viscosity had to be overcome as sales appeal was lost. +he manufacture of powders based on A*; posed some problems, however. )owders became stic&y and lost their free(flowing characteristics, whether made by spray( drying or one of the other methods. Mausner and ?ainerO have indicated that the actual isomer distribution of the linear al&ylate has an effect on the stic&iness of the powder, with the #(phenyl isomer giving the greatest tendency to stic&iness and the 6( or 7(phenyl isomer the least. *dditives to overcome this tendency have therefore been developed. +he switch to linear al&yl benzene is not, however, complete. In many parts of the world where the problem of sewage treatment is not serious, the )+ benzene is still being used in ever( growing quantities. *lso the Qiegler alcohols are now competitively priced with the linear al&yl benzenes, and al&ane sulphonates are reappearing. =aving successfully coped with the problem of biodegradation the industry faced a new attac&. It appeared that in certain la&es and ponds algae started reproducing at an unprecedented rate. +his was blamed on the e/tensive use of phosphates which are a food for these organisms, and again the detergent industry became the whipping boy, because tremendous amounts of sodium tripolyphosphate are used and then discharged down the sewer. 3+he term eutrophication, meaning nutrition by chemical means, has been
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applied to this phenomenon.4 It is not clear whether the blame should be ta&en solely by the detergent industry, as concurrently with the increase in the use of detergent phosphates there was an increase in the use of phosphate fertilizers, which also find their way into natural water systems. substitute for sodium tripolyphosphate. +o date a complete replacement has not been found but in the ;candinavian countries particularly, formulations of household powders are beginning to appear with appreciable portions of the phosphate replaced by C+* 3nitrilo triacetic acid4 which is a better sequestering agent than tripolyphosphate but has none of the other properties e/hibited by the phosphate. +here are fears that in time the e/tended use of C+* might bring new problems of this sort, as it contains nitrogen which is again a good fertilizer and nutrient for algae. +he search is still going on for a phosphate substitute. C+* on its own will only partially replace phosphates. * mi/ture of C+* and bora/ has been suggested as a complete replacement but here again the bora/ might produce more problems than the phosphate is alleged to produce. ;ome of the hydro/y(polycarbo/ylic acids not containing nitrogen are also being considered. EN62MES +he biggest single revolutionary trend in the detergent industry in the latter years has been the use of enzyme additives. ,nzymes as aids to washing are not new to the industry. )hotolytic enzymes had been tried as additives to washing powders in 2ermany in the 1B#>s with only moderate success and again in ;witzerland in the 1B$>s. ,nzymes, which can be called organic catalysts, tend to hasten reactions and the photolytic enzymes convert or Obrea& downO proteins wholly or partially into amino acids. +he action is rather slow and the production costs high, but with improved methods of production and purification, strains of enzymes, usually in admi/ture with a proportion of amylase which brea&s down ;tarches, were developed which were relatively fast acting. +hese were added initially to Opre(soa&O detergents and found immediate acceptance in the ,uropean countries where washing habits were such that washing was normally soa&ed for a period prior to the wash proper. =owever, with the big international preoccupation with ecology the detergent industry is searching for an efficient

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Better and better strains of enzymes were developed, with stability to a wider p= spectrum, stability against perborate and quic&er action. In the Enited ;tates detergent manufacturers resisted the incorporation of enzymes into their powders for some years after this type of powder had almost completely swept the board in ,urope but in 1B7@ enzymatic powders started appearing there as well. +he position at present is that enzymatic powders are now holding a large proportion of the household detergent mar&et and formulations appeared made for machine washing. ;ome washing(machine manufacturers are now producing automatic washing machines with a OBioO programme which allows the washing to remain in contact with the detergent solution for an e/tended period of time at a relatively low temperature before beginning the washing and heating cycle. +he future of enzymes is at the moment obscure as the production of enzymatic powders has raised its own problems, and one ;candinavian firm has already decided to withdraw its powder containing other are ta&ing enzymes out of some of their powders while forging ahead with others.

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COMPAN2 PROFILE
;?I.*.M*CI-M*F,A, )roprietor of B=*?*+=I ;'*) 1'?M;, came to 2EC+E? in 1B@> with #,>>>J( cash and brought some detergents ca&es cases from -=,CC*I by train and he sold the soaps in ric&shaw by canvassing from door to door. =e got good response in 2untur. +hen he planned to start a factory at 2untur with an initial investment of 76,>>>J( and started business on @(8(1B@1 at )othurivarithota, Maya bazaar, 2untur under the name and style of MJs B=*?*+=I ;'*) 1'?M;. +he industry was registered under small scale industries 3;;I4 unit with district industries centre, 2untur. In the initial stage he runs his factory with 1# wor&ers with manual labor. Aater with his hard wor& he earned and shifted to 2orantla village, 2untur manual in 1B@6. In the factory sri.manic&avel has introduced power mortars in 2untur for the first time. In the initial stage, he ran his factory with 1# wor&ers with manual labour. Aater with his hard wor&, he earned and shifted to ..Co.78JB(1 2orantla village, 2untur Mandal in 1B@6 in his own factory premises with power motors in 2untur for the first time. +he then brand names were Blue .iamond, Bharathi. +he main ob!ective is to sell good quality detergent ca&es to middle class and lower class people with low price. Initially the products were sold at 2untur and )ra&asam .istricts only. But now his hard wor& and maintaining quality, he has got very good mar&et reputation all over *ndhra )radesh by appointing sales agents at different areas. +hrough its good management and organization, it acquired a good position in the detergent industry. %ISION:+o serve county and other related public agencies as the provider of choice for group self(insurance coverages and ris& management services.
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MISSION:. It public agencies, and the people they serve, to be a leader in providing superior, cost(effective is the mission of B=*?*+=I ;'*) 1'?M;, in partnership with Cebras&a counties, other select, innovative and comprehensive coverages and ris& management services to its members through a member(owned and directed program OTHER SOCIAL ACTI%ITES: ;ri *. Manic&avel is most popularized social wor&er and )hilanthropist in 2untur. =e directly and indirectly helped, and helping the needy, li&e missionaries and charity institutions, 'rphanages, home for the aged and mentally challenged persons 3.a&shinya4. =e is also helping through Aions -lub and ?otary -lub5 by conducting free ,ye testing camps, Medical camp, and Blood .onation camps etc. =e has also donated to Catural -alamity funds to all the states in India regularly 32u!arat ,arth Sua&es, *.) -yclone and recently +sunami in *ndhra )radesh and +amilnadu states4. ,very year he has been donating educational funds for boo&s, cloths, fees etc to poor children directly and through Bala Bharathi in 2untur. =e is also interested to participate in the spiritual, cultural and sports activities in the city and entire *) and donating the funds to the organizers WALC FOUNDATION =WELFARE ARTIFICIAL LIMB CENTRE5 ;ri.*.Manic&avel who is the president of the 1*AM F'EC.*+I'C and he is providing monitary support tomthis association to provide freely artificial limbs to the handicapped poor people TAMIL CULTURAL ASSOCIATION ;ri *.Manic&avel is the =on. )resident of +*MIA -EA+E?*A *;;'-I*+I'C. +he association0s main activities are to arrange and promote cultural programs to their association members and social services li&e distributing free Cote

%B

boo&s, Eniforms to the poor students. +his association also contributing the cyclone relief fund to the -hief Minister of *ndhra )radesh NADARGAL MUNNETRA SANGAM ;ri *.Manic&avel, who is the president of the Cadargal Munnetra ;angam 3C*.*? -'MMECI+D4 in *.). +his sangam is running a school in the name and style of M*M*?*R )EBAI- ;-=''A at +adepalli, 2untur .ist.3 *.).4. +his school is providing very good education to the poor student. GROWTH AND E&PANSION OF BHARATHI SOAP WOR4S MJs. B=*?*+=I ;'*) 1'?M; is e/panding their day to day production capacity and supply of goods from time to time. Initially, MJs. Bharathi ;oap 1or&s capital investment is ?s.76,>>>J( but now the investment reached ?s.7%, B@,@18J(, hundred times. 1ith MJs. Bharathi ;oap 1or&s good mar&eting and promotional activities its present turnover reached to ?s.@.81 crores for the year #>>7(#>>8 when compared to ?s.#% la&hs at the initial stage. MJs. B=*?*+=I ;'*) 1'?M; initially manufactured only medium quality products. But now manufacturing Premium and Economy quality products. 1ith the increasing mar&et share and to face the competition, it started introducing new brands by maintaining different styles of pac&ing to suit the desires of the consumers. +he main aim of MJs. B=*?*+=I ;'*) 1'?M; is to supply quality products to its consumers. Suality is more important than profit. It is the &ey for the success of the company. +he company stress upon the quality of the products rather than its profit margins. +he motive earned huge mar&et at all places in *ndhra )radesh WOR4ERS OF BHARATHI SOAP WOR4S *t present 86 wor&ers are at production department and 6 employees at office, # employees at canteen and 1@ employees as motor transport wor&ers. +he company provides complete facilities to its wor&ers and employees. *s it provides complete

6>

assistance and facilities to the employees, wor&ers dedicatedly contributed to increase its mar&et share. +he wor&ing environment brings about a pleasant atmosphere and enables the employees wor& dedicatedly, and also he is providing employment for more than 1>>> families indirectly for mar&eting his products all over *ndhra )radesh. FUTURE PLANNING OF BHARATHI SOAP WOR4S +he company is planning to manufacture and sell quality Blue and +oilet soaps within a short period. TRADING COMPAN2: MIs. ANNAM TRADERS ;ri *.Manic&avel is the Managing partner of ACC*M T?*.,?;. +he above firm was established in the year 1BB>. +he main activities are selling of .etergent ca&es, washing powder, -hemicals, .ates, ;alt and other general goods. +his firm also providing employment directly and indirectly for more than 1>> families. <UALIT2 POLIC2 OF THE COMPAN2 ;atisfying the costumers by providing quality products and services and striving towards continual improvements". <UALIT2 OB$ECTI%ES +o improve sales compares to last year. +o improve the customer satisfaction level. +o reduce the wastage in production process. +o update the &nowledge of the employees. +o continually improve the process.

61

MJs B=*?*+=I ;'*) 1'?M is promoted by a young, dynamic and outstanding person ;ri *. M*CI-M*F,A with his visionable : dynamic leadership, the company has carved a niche for itself in the mar&et.

MJs B=*?*+=I ;'*) 1'?M; was emerged as one among the leading company in the mar&eting segments of its products. Bharathi soap wor&s has grown rapidly since its inception, and today its business operations have spread too many states. +he company had bagged +he Best ,ntrepreneur of the ;tate for the year of #>>6 received on #7th Ran #>>6 and the prestigious award Indira 2andhi ;adbhavana award" in #>>6 received on #1st Cov #>>6. *nd also awarded 2EC+E? .I;+?I-+ B,;+ IC.E;+?I*AI;+".

MJs B=*?*+=I ;'*) 1'?M; is a medium scale organization with a growth rate of more than 1>>N. Bharathi soap wor&s had started as a small scale unit and with in a short span of time has grown into a medium scale, providing employment to more than #>> employees.

CERTIFICATION MJs B=*?*+=I ;'*) 1'?M; is an I;' B>>1<#>>> certified organization and having other certification from MOOD2 "nte-n*t"#n*+ !e-t")"!*t"#n and U4AS quality management certification.

<UALIT2 MAINTENANCE

6#

 +he main aim of MJs. MJs B=*?*+=I ;'*) 1'?M; is to supply quality

products to its consumers, since quality is more important than profit. It is the &ey for the success of the company.
+he company stress upon the quality of the products rather than its profit

margins. +his motive earned huge mar&et at all places in *ndhra )radesh. +he company is strictly adopting quality preference only in purchases of raw materials, as well as delivery of finished goods and they assure customer that they never compromise with quality at all stages. Suality assurance demands a degree of detail in order to be fully implemented at every step. )lanning, for e/ample, could include investigation into the quality of the raw materials used in manufacturing, the actual assembly, or the inspection processes used. +he -hec&ing step could include customer feedbac&, surveys, or other mar&eting vehicles to determine if customer needs are being attended or not. If not, what are the reasons9 *cting could mean a total revision in the manufacturing process in order to correct a technical or cosmetic flaw. -ompetition to provide specialized products and services results in brea&throughs as well as long(term growth and change. Suality assurance verifies that any customer offering, regardless if it is new or evolved is produced and offered with the best possible materials, in the most comprehensive way, with the highest standards. +he goal to e/ceed customer e/pectations in a measurable and accountable process is provided by quality assurance
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6%

PRODUCTS

BRAND NAME

.,+,?2,C+ ;'*);

BAE, .I*M'C. +?I)A,(T 3 TTT 4 BICM* B=*F*CI M*2I2?,,C .I*M'C. +=?,, .I*M'C.0; ;*?,2*M*

.,+,?2,C+ )'1.,?

TTT ;IAF,? F'*M TTT ;IAF,? AIC, TTT =I()'1,? TTT ;IAF,? TTT ;IAF,? AIC

66

PRODUCTION CAPACIT2: )roducts level factory only after through quality chec& in the laboratory BHARATHI SOAP WOR4S-PRODUCTS Ender .I*M'C. brand, ($( types of detergent ca&es are being manufactured, i.e. ( Blue .iamond(1#6gms., and 16> gems. *nd 2reen .iamond of 16>gms only. ;imilarly under +riple(T 3TTT4 brand, (18( types of detergent ca&es are being manufacturing. +hey are< +riple(T More washes 3Mini4 +riple(T more washes 3Medium4 +riple(T More wash +riple(T More wash< $>> gms. +riple(T More wash< $6> gms. +riple(T ,asy wash< 1#6 gms. +riple(T ,asy wash< #6> gms. +riple(T 3 ?ose 4 +riple(T 3 ?ose 4 +riple(T 3 1hite 4 +riple(T )in& ;uper wash +riple(T )in& ;uper wash +riple(T 2old ;uper +riple(T 3TTT4 +riple(T *ction ;oap < #6> gms. +riple(T ?a!a ;oap
67

< 1>> gms. < #>> gms. < 16> gms.

< #>> gms. < 1#6 gms. < #6> gms. < $>> gms. < 16> gms. < #>> gms. < 16> gms.

< $6> gms.

+riple(T ?a!a ;oap

< 186 gms.

Ender M*2I- brand, (#( types of detergent ca&es are being manufacturing i.e.( Magic(1#6gms., and Magic(#>>gms.

Ender ;*?,2*M* brand, ($( types of detergent ca&es are being manufacturing, i.e.( ;aregama(16>gms5 ;aregama(#>>gms5 and ;aregama($>>gms.

Ender +?I)A,(T 3 TTT 4 ?EF : +EF brand, (#( types of dish wash bars are being manufacturing, i.e.( +?I)A,(T ?EF : +EF(16>gms5 and +?I)A,(T ?EF : +EF($>>gms. ;imilarly, under +riple(T 3TTT4 brand, detergent powders are being manufacturing. (1$( types of

+hey are< +riple(T ;ilver Foam +riple(T ;ilver Foam +riple(T ;ilver Foam +riple(T ;ilver Foam +riple(T ;ilver Foam +riple(T ;ilver Foam +riple(T powder pouch +riple(T =I()'1,? +riple(T =I()'1,? +riple(T =I()'1,? +riple(T ;ilver line < 116> gms < 1 Mg. < @6> gms. < 66> gms. < #6> gms. < 1#6 gms. < 16 gms. < 1 Mg. < 6>> gms. < #>> gms. < $&gs

68

DETERGENT CA4ES )roduct Came +ype )rice Cet 1eight 'ffer < < < < < BlueCewMagic .etergent-a&e ?s.8.>> #>>2rams 6>NMore

BHA%ANI DETERGENT CA4ES )roduct Came +ype )rice Cet 1eight < < < : Bhavani .etergent-a&e ?s.6.>> 16> 2rams

BIN4A DETERGENT CA4ES )roduct Came +ype )rice Cet 1eight 'ffer < < < < < ;uper)owerBin&a .etergent-a&e ?s.6.>> 16>2rams +riple/ More31ash ;oap4

SAREGAMA DETERGENT CA4ES )roduct Came +ype )rice Cet 1eight

6@

< < < <

Magic;aregama?ich .etergent-a&e ?s.1>.>> $>> 2rams

DETERGENT POWDER ;IAF,? AIC, .,+,?2,C+ )'1.,?< Esage< 1 scoop for buc&et wash and # scoops for machine wash. ;uitable for top loading machines. ;oap for $> minutes before washing. For superior results wash in warm water.

TTT was gives you not !ust whiteness" but also freshness" the power of blue whiteness up your cloths For every wash your clothes loo& and smell as fresh as new )ro @!t N*me +ype )?I-,< Cet 1eight 'ffer : : < : : S"+ve-L"ne Dete-,entP#F e1@>(>> $ Mg. ?s.7>J(worth of )lastic buc&et Free with this pac& .

SIL%ER FOAM DETERGENT POWDER ;coop for buc&et wash and # scoops for machine wash. ;uitable for top loading machines. ;oa& for $> minutes before washing. For superior results wash in warm water. TTT was gives you not !ust whiteness" but also freshness" the power of blue whiteness up your cloths. For every wash your clothes loo& and smell as fresh as new P-# @!t N*me +ype )rice Net We",Bt 'ffer : : : : : ;ilverFoam .etergent)owder ?s.%>.>> 1.#Milograms #>>gms.More1ith+his)ac& 3Free4

6B

HI - POWER DETERGENT POWDER Esage< 1 scoop for buc&et wash and # scoops for machine wash. ;uitable for top loading machines. ;oa& for $> minutes before washing. For superior results wash in warm water. TTT was gives you not !ust whiteness" but also freshness" the power of blue whiteness up your cloths. For every wash your clothes loo& and smell as fresh as new

)roduct Came +ype )rice Cet 1eight 'ffer

< : : : :

=i()ower .etergent)owder ?s.6>.>> 1Mg. #>>gms.MediumMore1ash ;oap free

DISH WASH

&&& RUF AND TUF )roduct N*me +ype )rice Cet 1eight : : : : ?uf:+uf .ish1ashBar ?s.1>.>> $>> grams

7>

TURNO%ER OF THE COMPAN2 2EAR #>>$(#>>% #>>%(#>>6 #>>6(#>>7 #>>7(#>>8 #>>8(#>>@ #>>@(#>>B #>>B(#>1> #>1>(#>11 PRODUCTS .etergents : powder .etergents : powder .etergents : powder .etergents : powder .etergents : powder .etergents : powder .etergents : powder .etergents : powder SALES TURNO%ER=RS5 6#,1@,%B7.#> 8>,81,@8>.>> 77,%>,#1B.>> 88,B1,7B>.7> 1,7>,@6,>61.>8 7,>B,67,1$%.>7 8,#8,7B,@16.$$ @,81,1B,18%.%8

GRAPHICAL REPRESENTATION

71

MJs B=*?*+=I ;'*) 1'?M; initially manufactured only medium products now they are manufacturing )remium, ,conomy quality products. +o face competition by improving mar&et share they introduced different types new brands and pac&ing styles to suit the desires of the consumers. +he main aim of the company is to supply quality products to consumers. Suality is more important than profit. It is the &ey factor for the success of the company. +he company stress upon the quality of the products rather than its profit margins. +his motivational policy to earn huge mar&et share at all places of southern India. CERTIFIED LOGO OF THE COMPAN2

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WOR4ERJS WELFARE *t present there are 87 wor&ers at production department and 6 employees at office, # employees in the canteen and 18 employees as transport wor&ers. +he company provides complete assistance and facilities to the employees, wor&ers dedicatedly contributed to increase its mar&et share. +he wor&ing environment brings about a pleasant atmosphere and enables the employees wor& dedicatedly. *nd also he is providing employment for mare than 1>>> families in directly for mar&eting his products all over southern India.
ORGANI6ATION STRUCTURE

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AWARDS WON B2 THE COMPAN2 +he prestigious awards received by the M*C*2IC2 .I?,-+'? of MJs B=*?*+=I ;'*) 1'?M; are< Best entrepreneur for the year of #>>% received on #7th Ranuary #>>6 from the hands of =umble .istrict -ollector ";*.=B=*F*C *1*?. for the year of #>>6 received on #1st Covember #>>6". SOCIAL ACTI%ITIES: ;?I.*.M*CI-M*F,A, Managing .irector of Bharathi ;oap 1or&s is the =on. )resident of +amil -ultural *ssociation. +he association main activity is to arrange and promote cultural programs to their association members and social services li&e distributing free note boo&s, uniform to the poor students. +his association also contributing the cyclone relief funds to chief minister of various state governments of IC.I*. =e is also president for the Cadargal Munnetra sangam. +his ;angam is runing a school under the name of &umara public school at +adpole manual of 2untur district. +his school is providing good education to poor students who are financially poor. =e is also en!oying one more honorable post as president of 1*A- Foundation 3welfare artificial limb centre4. the handicapped poor people. ;ri.Manic&avel is a most popular social wor&er and philanthropist in 2untur. =e is directly or indirectly helped and helping the needy, li&e missions and charity institutions, orphanages, home for the aged mentally challenged persons. =e is also helping through lions club and rotary club, by conducting free eye testing camps etc. =e has also donated to natural calamity funds to all states in India regularly. ,very year he has been donating educational funds for boo&s, cloths, fees etc to poor children directly through Bala Bharathi in 2untur. =e is also interested to participate in the spiritual, cultural and sports activities in the city and entire *) and donating the funds to the conductors : participants. Ender this foundation he is providing monetary support to this association to providing freely artificial limbs to

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DATA ANAL2SIS & INTERPRETATION

NON DCF CRITERIA PA2 BAC4 PERIOD =PBP5 #) BB*-*tB" S#*? W#->s:)ay bac& period is the number of years required to recover the original cash outlay invested in a pro!ect. 2EAR DEPRECIATION =RS5 #,61,>B8.>> %,#6,7$1.%6 $,B6,86B.>> 7,$>,%6#.>> 11,6B,>1@.76 #7,8@,#$B.>> ##,#B,1%7.88 $%,7@,>%@.@7 CASH IN FLOW =PAT5 =RS5 1,B6,%B6.88 %,6#,68$.66 %,8B,#%$.BB 7,B1,%%8.%B 1%,B>,71>.1B $7,61,B8$.68 %6,%#,$6$.8$ 68,>6,@@>.$8 CASH IN FLOW =RS5 %,%7,6B#.88 @,8@,#>6.>> @,86,>>#.BB 1$,#1,@BB.%B #7,%B,7#@.@% 7$,>>,#1#.68 78,81,6>>.6> B1,8$,$#B.#$ CUMULATI%E CAST IN FLOWS =RS5 %,%7,6B#.88 1$,#%,8B8.88 #1,BB,@>>.87 $6,#1,8>>.#6 71,81,$#B.>B 1,#6,>1,6%1.77 1,1B,8$,>%#.17 #,@%,%7,B81.$B

#>>% #>>6 #>>7 #>>8 #>>@ #>>B #>1> #>11

Initial outlay G %7, >@,@@7 )aybac& period G % +1%,B>,71>.1B G %I>.8#B G %.8$ Months C-"te-"* )#- ev*+@*t"#n:+he paybac& period computed for a pro!ect is less than the paybac& period set by management of the company, it would be accepted. * pro!ect actual paybac& period is more than the determined period by the management, it will be re!ected. De!"s"#n:+he standard paybac& period is set by B=*?*+=I ;'*) 1'?M; for considering the e/pansion pro!ect is si/ years, whereas actual paybac& period is %.8$ months. =ence we accept the pro!ect
76
1>,@8,1@6.86

A%ERAGE RATE OF RETURN =ARR5 #) BB*-*tB" S#*? W#->s:+he accounting rate of return is the ratio of the average after +a/ profit divided by the average investment. 2EAR #>>% #>>6 #>>7 #>>8 #>>@ #>>B #>1> #>11 INCOME 1,B6,%B6.88 %,6#,68$.66 %,8B,#%$.BB 7,B1,%%8.%B 1%,B>,71>.1B $7,61,B8$.68 %6,%#,$6$.8$ 68,>6,@@>.$8
*verage profit

DEPRECIATION #,61,>B8.>> %,#6,7$1.%6 $,B6,86B.>> 7,$>,%6#.>> 11,6B,>1@.76 #7,8@,#$B.>> ##,#B,1%7.88 $%,7@,>%@.@7

CASH IN FLOWS 3(4 66,7>1.#$ #7,B%#.1 @$,%@%.BB 7>,BB6.%B $ $1,6B1.6% B,8$,8$%.68 #$,1$,#>7.B7 ##,$8,@$1.61

*?? G *verage Investment U 1>> *verage profit G

6B,86,1@6.B$ @

G 8, %7,@B@.#% *verage investment G *??

%7,>@,@@7 #

G #$, >%,%%$

G #$,>%,%%$ 1>> G >.$#%1 U 1>> G $#.%1

*verage profit 1>> Initial investment
8,%7,@B@.#%

8,%7,@B@.#%

?'I

G %7,>@,@@7 U 1>> G >.17#>6 U 1>> G 17.#1

C-"te-"* )#- ev*+@*t"#n:-

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*ccording to this method *?? is higher than minimum rate of return established by the management are accepted. It re!ect the pro!ect have less *?? than the minimum rate set by the management. De!"s"#n:+he standard *?? set by B=*?*+=I ;'*) 1'?M; management is #6N. +he actual *?? is $#.#$N is higher than the standard *?? set by the management, hence we accept the pro!ect. DCF CRITERIA Net P-esent %*+@e:It is one of .-F technique, C)F should be found out by subtracting the initial cash outlay from the present value of cash inflows. 2EAR #>>% #>>6 #>>7 #>>8 #>>@ #>>B #>1> #>11 CASH INFLOWS %,%7,6B#.88 @,8@,#>6.>> @,86,>>#.BB 1$,#1,@BB.%B #7,%B,7#@.@% 7$,>>,#1#.68 78,81,6>>.6> B1,8$,$#B.#$ DCF =08G5 >.@8> >.867 >.76@ >.68# >.%B8 >.%$# >.$87 >.$#8 T#t*+ C)F G 1, 1B, @1,@1$.B# H %7, >@,@@7 G 8$, 8#,B#8.B# C-"te-"* )#- ev*+@*t"#n:In case of calculated C)F is positive or zero, the pro!ect should be accepted. If the calculated C)F is negative, the pro!ect is re!ected. De!"s"#n:+he pro!ect is accepted due to calculate C)F is positive. INTERNAL RATE OF RETURN =IRR5 :78

PRESENT %ALUE=CDCF5 $,@@,6$6.81 7,7$,B##.B@ 6,86,861.B8 8,67,1#7.@6 1$,17,@76.6$ #8,$%,761.@$ #6,%7,>@%.1B #B,BB,@8%.@7 0/0E/;0/;03.E1

I?? method is another .-F technique which ta&e account of the magnitude : timing of cash flows

2EAR #>>% #>>6 #>>7 #>>8 #>>@ #>>B #>1> #>11

CASH INFLOWS %,%7,6B#.88 @,8@,#>6.>> @,86,>>#.BB 1$,#1,@BB.%B #7,%B,7#@.@% 7$,>>,#1#.68 78,81,6>>.6> B1,8$,$#B.#$

DCF =07G5 >.@88 >.87B >.786 >.6B# >.61B >.%#$ >.%>> >.$61 T#t*+

PRESENT %ALUE $,B1,771.@7 7,86,$$B.76 6,B>,7#8.># 8,@#,67%.@6 1$,86,168.$8 #7,88,78B.B# #8,>@,7>>.#> $#,#>,>%B.17 0/17/10/9;C.C3

7@

2EAR #>>% #>>6 #>>7 #>>8 #>>@ #>>B #>1> #>11

CASH INFLOWS %,%7,6B#.88 @,8@,#>6.>> @,86,>>#.BB 1$,#1,@BB.%B #7,%B,7#@.@% 7$,>>,#1#.68 78,81,6>>.6> B1,8$,$#B.#$

DCF =09G5 >.@7# >.8%$ >.7%1 >.66# >.%87 >.%1> >.$6% >.$>6 T#t*+

PRESENT %ALUE $,@%,B7#.B7 7,6#,6>7.$1 6,7>,@87.B# 8,#B,7@@.@6 1#,71,##$.$$ #6,B6,$@8.16 #$,B8,111.1@ #8,B@,>%@.%1 0/03/;9/8C7.C0

I??

G 1% I 1,#%,#1,7@>.>$ ( 1,1$,@7,6>%.>1 317 1%4 G 1% +

8@,1#,8B%.>$ # 1>,$6,187.>#

1,#%,#1,7@>.>$ ( %7,>@,@@7

G 1%I16.>B

G #B.>B

7B

C-"te-"* )#- ev*+@*t"#n:In this method the pro!ect is accepted when I?? is higher than its cost of capital or cut out rate. If the pro!ect is not accepted when the I?? is less than cost of capital. De!"s"#n:+he pro!ect is accepted because of the calculation I?? is higher than

its cost of capital. +he cost of capital fi/ed by management is #>N, the actual is more than its standard. =ence, the pro!ect is accepted.

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PROFITABILIT2 INDE&:)rofitability inde/ is the ratio of the present valued of cash inflows, at the required rate of return, to the initial cash out of the investment. 2EAR #>>% #>>6 #>>7 #>>8 #>>@ #>>B #>1> #>11 CASH IN FLOW =RS5 %,%7,6B#.88 @,8@,#>6.>> @,86,>>#.BB 1$,#1,@BB.%B #7,%B,7#@.@% 7$,>>,#1#.68 78,81,6>>.6> B1,8$,$#B.#$

)?'FI+*BIAI+D IC.,T 3)I4 G )resent value of cash inflowsJ present value of cash outflows.
#,@%,%7,B81.$B %7,>@,@@7

)I G

G 7.18 C-"te-"* )#- ev*+@*t"#n:* pro!ect can be accepted if its )I inde/ is greater than one. If the )I is less than one we should re!ect the pro!ect. De!"s"#n:)rofitability inde/ of proposed e/pansion pro!ect is found our 7.68 this is more than the )I.

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FINDINGS/ SUGGESTIONS & CONCLUSIONS FINDINGS: +he calculated paybac& period is %years and 8months. But standard paybac& period was si/ years by B=*?*+=I ;'*) 1'?M;" management. +he *?? is fi/ed by B=*?*+=I ;'*) 1'?M;" is #6N. +he actual *?? is $#.#$N and its return on investment is 17.#1N. +he C)F is actually getting 8$, 8#,B#8.B# which is positive. +he I?? is wor&ed for pro!ect is #B.>BN but the e/pected I?? is #>N less than the actual I??. +he )I is getting actual for the e/pansion pro!ect is si/ times more than the investment.

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SUGGESTIONS: It has been suggested that the B=*?*+=I ;'*) 1'?M;" management that the paybac& period is fi/ed for e/pansion pro!ect is 7 years. But the actual is less than the standard. It is advisable to fi/ paybac& period less than standard paybac& period. It is suggesting to B=*?*+=I ;'*) 1'?M;" management that is better to fi/ ?'I is more than the standard ?'I. ;o it is advisable to maintain same in the future also. +he C)F of the pro!ect is positive, it is advisable to select the same type of the pro!ects. +he e/pected cost of capital for the company is #>N where as the actual I?? is wor&ed for the proposal is #B.>BN, so it is available to Bharathi ;oap 1or&s to maintain this in the future also. It is safer to accept proposal the profitability inde/ of Bharathi ;oap 1or&s is 7 times more than its investment. ;o it is advisable to select the same type of pro!ect sin the future also.

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CONCLUSIONS:Based on the study on B=*?*+=I ;'*) 1'?M;" I came to &now that, there are two sides of a pro!ect, via the investment side : the financing side. +he separation principle says that the cash flows associated with these sides should be separated. 1hile estimating the cash inflowing on the investment side do not consider the financing changes li&e interest or dividend. Forecasting the pro!ect cash flows involves numerous estimates : many individuals : departments participate in this e/ercise. +he role of the finance manager is to co(ordinate the efforts of various departments and obtain information from them, ensure that the e/ercise focused on relevant variables, and minimize the biases inherent in cash flow forecasting. In the study I &now that the company is following paybac& period. Based on the analysis of data shows that the company can adopt any criteria to get return on investment in time +he pro!ect * ;+E.D 'C,T)*C;I'C )?'R,-+ +=?'E2= -*)I+*A BE.2,+IC2 IC B=*?*+=I ;'*) 1'?M;" ;tates that the company is in good position. It is suggested to hold the company in the same level. It also reveals that cash flows having ups : downs due to e/pansion of assets simultaneously in depreciation.

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BIBLIOGRAPH2

1. Financial Management #. Financial Management $. Financial Management %. Business ?esearch Methodology

( M.D. Mhan and ).M. Rain (.r. ;.C. Maheshwari ()rasanna -handra (Mo +hari

We' S"tes: www.google.com www.bharathisoapwor&s.com

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