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Finance is treated as life blood of an enterprise.

Finance is required to start a business, to purchase raw materials, to pay bills, any wages and for every activity of a business enterprise. The term finance was interrupted to mean the procurement of funds by corporate enterprises to meet the financing needs. The term procurements were used in a bread sense include the whole gamut of raising the funds externally. Meaning of finance Finance is one of the major elements, which activates the economy. Finance is the lifeblood of economic activity. system directly contributes to the growth of the economy. system calls for the effective performance of financial instruments and financial markets. Importance of finance: Ensure that there are adequate funds available to acquire the resources needed to help the organization to achieve its objectives. Ensure costs are controlled. Ensure adequate cash flow Establish and control profitability levels. One of the major roles of the finance department is to identify appropriate financial information prior to communicating this information to managers and decision makers in order that they may make informed judgments and decisions. Finance also prepares financial documents and final accounts for managers to use and for reporting purposes (AGM etc.) Meaning of management In the present day industrial world, management has become universal. The principles of management are being applied not only for managing business concerns, but also to manage various other service sector institutions like hospitals, educational institutions, etc. It is in this context both finance and management functions gained substantial significance in the industry. overall growth of the A well-knit financial An efficient financial institutions, financial

Meaning of financial management


Financial management is the specialized functions directly associated with the top management. The significance of this function is not only seen in the Line but also in the capacity of Staff in the overall administration of a company. It has been defined differently by different experts in the field. Some of the important definitions are:

Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operation
By Joseph and Massie

Financial management is an area of financial decision making, harmonizing individual motives and enterprise goals
By Weston and Brigham

PART -A
INTRODUCTION TO INDUSTRY

INDUSTRY PROFILE
Soap is one of the commodities which have become an indispensable part of the life of modern world. Since it is non durable consumer goods, there is a large market for it. The whole soap industry is experiencing changes due to innumerable reasons such as government relations environment and energy problems increase in cost of raw material etc. The changing technology and ever existing desire by the individual and the organization to produce a better product at a more economical rate has also acted as catalyst for the dynamic process of change. More and more soap manufactures are trying to capture a commanding market share by introducing new products. The soap industry in India faces a cut throat competition with multinational companies dominate the market. They are also facing severe threat from dynamic and enterprising new entrance especially during 1991-92. If we look back into the history of soaps & detergents, mankind knew about soaps nearly 2000 years back i.e. in 70 A.D. when Mr. Elder accidentally discovered the soap, when roasted meat over flowed on the glow in ashes. This lump like product was soap & had foaming & cleansing character. In 1192 A.D. the first commercial batch of soaps was made & marketed by M/s Bristol soap market in London, from there in 1662A.D. the first patent for making soap was taken in London. The world consumption of soap in 1884A.D. was said to be 2lakh tonnes p.a.

HISTORY OF THE SOAP


Soap manufacturing was started in North America. Some American companies with well known names were started 200 years ago. During middle age soap was made at various places in Italy, France, England & other countries. France became famous & many small factories were established there. In India the first soap industry was established by North West soap company in1897 at Meerut following the swadeshi movement. From 1905 onwards few more factories were setup. They are, Mysore soap factory at Bangalore Godrej soap at Bombay Bengal chemicals Tata oil mills 1930 lever brothers company

THE INDIAN SOAP INDUSTRY SCENARIO


The Indian soap industry has long been dominated by hand full of companies such as: 1. Hindustan levers limited. 2. Tata oil mills (taken over by HLL) 3. Godrej soaps private limited. The Indian soap industry continued to flourish very well until 1967-68, but began to stagnate & soon it started to recover & experienced a short upswing in 1974. This increase in demand can be attributed due to;
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1. Growth of population. 2. Income & consumption increase. 3. Increase in urbanization. 4. Growth in degree of personal hygiene. Soap manufacture has 2 classifications, organized and unorganized sectors. KSDL comes under organized sector.

PRESENT STATUS Market scenario:


India is the ideal market for cleaning products. Hindustan liver, which towers over the cleaning business, sells in all over the cleaning business but the tiniest of Indian settlements. The 7.4lakhs tons per annum soap market in India in crawling along at 4% The hope lies in raising Rupee worth, the potential for which is high because the Indian soap market is pseudo in nature & it is amazingly complex being segmented not only on the basis of price benefits, but even a range of emotions within that outlining framework.

PROBLEMS OF SOAP INDUSTRY


Soap industry faces some problems in case of raw materials. The major ingredients are soap ash, linear alkyl, benzene& sodium. Tripoli phosphate poses number of serious problems in terms of availability. The demand supply gap for vegetable oil is 1.5 to 2 lakh tons & is met through imports. In recent times, caustic soda and soap ashes in the cheaper varieties of soaps are quite high.

PART-B
Introduction to inventory
In financial parlance, inventory is defined as the sum of the value of raw materials, fuels and lubricants, spare parts, maintenance consumables, semi-processed materials and finished goods stock at any given point of time. The operational definition of inventory would be: the amount of raw materials, fuel and lubricants, spare parts and semi-processed materials to be stocked for the smooth running of the plant. Since these resources are idle when kept in stores, inventory is defined as an idle resource of any kind having an economic value. Inventories are maintained basically for the operational smoothness, which they can affect by uncoupling successive stages of production, where as the monetary value of inventory serves as a guide to indicate the size of the investment made to achieve this operational convenience. The materials management department is expected to provide this operational convenience with a minimum possible investment in inventories. The objectives of inventory, operational and financial, needless to say, are conflicting. The materials department is accused of both stock outs as well as large investment in inventories. The solution lies in exercising a selective inventory control and application of inventory control techniques.

Defining Inventory Inventory is an idle stock of physical goods that contain economic value, and are held in various forms by an organization in its custody awaiting packing, processing, transformation, use or sale in a future point of time. Any organization which is into production, trading, sale and service of a product will necessarily hold stock of various physical resources to aid in future consumption and sale. While inventory is a necessary evil of any such business, it may be noted that the organizations hold inventories for various reasons, which include speculative purposes, functional purposes, physical necessities etc.
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From the above definition the following points stand out with reference to inventory: All organizations engaged in production or sale of products hold inventory in one form or other. Inventory can be in complete state or incomplete state. Inventory is held to facilitate future consumption, sale or further processing/value addition. All inventoried resources have economic value and can be considered as assets of the organization.

MEANING AND DEFINATION According to jennies C.P Teal Inventory can be used to refer to the stock on the hand at a particular time of raw materials, goods in process of manufacture, finished products, merchandise purchased of resale, and the like tangible assets which can be seen, measured and counted in connection with financial statements and accounting records, the reference may be to the amount assigned to the stock of goods owned by an enterprise at a particular time. DIFFERENT TYPES OF INVNTORY
Inventory of materials occurs at various stages and departments of an organization. A manufacturing organization holds inventory of raw materials and consumables required for production. It also holds inventory of semi-finished goods at various stages in the plant with various departments. Finished goods inventory is held at plant, FG Stores, distribution centers etc. Further both raw materials and finished goods those that are in transit at various locations also form a part of inventory depending upon who owns the inventory at the particular juncture. Finished goods inventory is held by the organization at various stocking points or with dealers and stockiest until it reaches the market and end customers. Besides Raw materials and finished goods, organizations also hold inventories of spare parts to service the products. Defective products, defective parts and scrap also forms a part of inventory as long as these items are inventoried in the books of the company and have economic value.

TYPES OF INVENTORY BY FUNCTION

INPUT Raw Materials Consumables required for processing. Eg : Fuel, Stationary, Bolts & Nuts etc. required in manufacturing

PROCESS Work In Process Semi Finished Production in various stages, lying with various departments like Production, WIP Stores, QC, Final Assembly, Paint Shop, Packing, Outbound Store etc.

OUTPUT Finished Goods Finished Goods at Distribution Centers through out Supply Chain

Maintenance Items/Consumables Packing Materials Local purchased Items required for production

Production Waste and Finished Scrap transit Rejections Defectives

Goods

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and Finished Goods with Stockiest and Dealers Spare Parts Stocks & Bought Out items Defectives, Rejects and Sales Returns Repaired Parts Stock and &

Sales Promotion Sample Stocks

TYPES OF INVENTORY BASED ON DEMAND AND PATTERN There are two types Independent demand inventory Dependant demand inventory
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Independent Demand
An inventory of an item is said to be falling into the category of independent demand when the demand for such an item is not dependent upon the demand for another item. Finished goods Items, which are ordered by External Customers or manufactured for stock and sale, are called independent demand items. Independent demands for inventories are based on confirmed Customer orders, forecasts, estimates and past historical data.

Dependant Demand
If the demand for inventory of an item is dependent upon another item, such demands are categorized as dependant demand. Raw materials and component inventories are dependent upon the demand for Finished Goods and hence can be called as Dependant demand inventories. Take the example of a Car. The car as finished goods is an held produced and held in inventory as independent demand item, while the raw materials and components used in the manufacture of the Finished Goods - Car derives its demand from the demand for the Car and hence is characterized as dependant demand inventory. PURPOSE OR BENEFITS OF HOLDING INVENTORY Generally speaking there are three main purposes of holding inventories (1) The transaction motive which facilitates continuous production and timely execution of sales orders (2) The precautionary motive which necessitates the holding of inventories for meeting the unpredictable changes in demand land supplies of material (3) The speculative motive which includes keeping inventories for taking advantage of price fluctuations saving in re-ordering costs and quantity discounts etc..

RISK AND COSTS OF HOLDING INVENTORIES The holding of inventories involves blocking of a firms funds and incurrence of capital and other costs .It also exposes the firm to certain risks. The various costs and risks involved in holding inventories are below. (1) Capital costs
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(2) (3) (4) (5)

Storage and handling costs Risk of price decline Risk of obsolescence Risk determination in quantity

Inventory management
The most important objective or inventory control is to determine and maintain an optimum level of investment in the inventory. Most companies have now successfully installed one or the other system of inventory planning and control. Inventory management and inventory control must be designed to meet the dictates of the marketplace and support the company's strategic plan. The many change in market demand, new manufacturing technology means many companies need to change their inventory management approach and change the process for inventory control. Despite the many changes that companies go through, the basic principles for accomplishes and techniques are wrapped in new terminology, but the underlying principles for accomplishing good inventory management and inventory activities have not changed. The inventory management system and the inventory control process provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities, and communicate with customers. Inventory management and the activities of inventory control do not make decisions or manage operations; they provide the information to managers who make more accurate and timely decisions to manage their operations. The basic building blocks for the inventory management system and inventory control activities are:Sales forecasting or Demand management Sales and operations planning Production planning Material requirements planning
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Inventory reduction The emphases on each area will vary depending on the company and how it operates, and what requirements are placed on it due to market demands. Each of the areas above will need to be addressed in some form or another to have a successful program of inventory management and inventory control.

Characteristics of inventory management


The holding inventory is risky because of the capital investment and the potential for obsolescence. Investment for inventory cannot be used to obtain other goods or assets that could improve enterprise performance. Funds supporting inventory investment must be borrowed, increasing the firms interest expense. A second form of risk is the possibility that the product will be pilfered or become obsolete. These factors and the relative magnitude of assets that are inventory-related contribute substantially to the riskiness of most enterprises. It is important to understand that the nature and extent of risk vary depending on an enterprises position in the distribution channel.

Importance of inventory management:Inventory management refers to the process of managing the stocks of finished products, semi-finished products and raw materials by a firm. Inventory management, if done properly, can bring down costs and increase and increase the revenue of a firm. How much one should invest in inventory management? The answer to this question depends on the volume and value of inventory as a percentage of the total assets of a firm. The importance of inventory management varies according to industries. For example, an automobile dealer has very high inventories, sometimes as high as 50 percent of the total assets, whereas in the hotel industry it may be as low as 2to 5 percent.

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The process of inventory management is a continuous one and there are various kinds of solutions available. It is advisable to employ specialized staff for inventory management. The inventory management process begins as soon as one has started production and ordered raw materials, semi-finished products or any other thing from a supplier. If you are a retailer, then this process begins as soon you placed your first order with the wholesaler. Once orders have been placed, there is generally a short period of time available to a firm to put an inventory management plan in place before the supplies are delivered. Inventory management helps a firm to decide in advance where these supplies should be stored. If a firm is getting supplies of small-sized goods, it may not be much of a problem to store them, but in the case of large goods, one has to be careful so that the warehousing space is optimally utilized. From invoices to purchase orders, there is lot of paperwork and documentation involved in inventory management. Several software programs are available in market, which help in inventory management. Inventory management provides detailed information on inventory management, inventory management software, supply chain inventory management, inventory management system and more. Inventory management is affiliated with Eprocurement services.

INVENTORY OR MATERIAL CONTROL DFINATION Material control is defined as safeguarding of companys property in the form of materials by proper system of recording and also to maintain them at the optimum level considering operating requirements and financial resources of the business. Significance of inventory control No cost accounting system can become effective without proper and efficient control of materials this is so because quite after materials is the largest single
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element of cost and as such an efficient system of materials control reads significant economy in the total cost of production.

Objectives of inventory control (1) To promote customer service in the face of sale and production fluctuations (2) To handle production variation (3) To make action against expected increase in sale (4) To manufacture goods in economic production run (5) To take advantage of distribution costs (6) To keep storage equipment operational (7) To minimize cost and maximize profits (8) To avoid running out of stocks (9) To keep the inventory within the available storage capacity (10) To control capital investment (11) To maximize sales and share of market

Principles of inventory control (1) There should be coordination and cooperation & cooperation between various departments dealing in materials (2) There should be new central purchasing departments under the control of the competent and expert purchases management (3) There should be proper classification and codification of materials. (4) Materials requirement should be properly planned (5) Perpetual inventory system should be operated (6) Adequate records should be introduced to control materials (7) The storage of all materials should be well planned (8) Purchases of materials should be controlled through budgets

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Inventory control techniques


Inventory control techniques are employed by the inventory control organization within the framework of one of the basic inventory models, viz., fixed order quantity system or fixed order period system. Inventory control techniques represent the operational aspect of inventory management and help realize the objectives of inventory management and control. Several techniques of inventory control are in use and it depends on the convenience of the firm to adopt any of the techniques. What should be stressed, however, is the need to cover all items of the stage of their use.

The techniques most commonly used are the following:1. Always better control (ABC) analysis
ABC analysis underlines a very important principle Vital few: trivial many. Statistics reveal that just a handful of items account for bulk of the annual expenditure on materials. These few items, called An items, therefore, hold the key to business. The other items, known as B and C items, are numerous in number but their contribution is less significant. ABC analysis thus tends to segregate all items into three categories: A, B, and C on the basis of their annual usage. The categorization so made enables one to pay the right amount of attention as merited by attention as merited by the items.

2. High, medium and low (HML) analysis


HML analysis is similar to ABC analysis except for the difference that instead of usage value, price criterion is used. The items under this analysis are classified into three groups that are called high, medium and low. To classify, the items are listed in the descending order of their unit price.

3. Vital, essential and designable (VED) analysis


V stand for vital, E for essential, D for desirable. This classification is usually applied for spare parts to be stocked for maintenance of machines and equipments based on the criticality of the spare parts. The stocking policy is based on the criticality of the items. The vital spare parts are known
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as capital or insurance spares. The inventory policy is to keep at least one number of the vital spare part irrespective of the long lead-time required for procurement. Essential spare parts are those whose non-availability may not adversely affect production. Such spare parts may be available from many sources within the country and the procurement lead time many not be long. Hence, a low inventory of essential spare parts is held. The desirable spare parts are those, which, if not available, can be manufactured by the maintenance department or may be procured from local suppliers and hence no stock is held usually.

4. Scarce, difficult and easy to obtain (SDE)


SDE analysis is based on the problems of procurement namely:Non-availability Scarcity Longer lead time Geographical location of suppliers, and Reliability of suppliers, etc SDE analysis classifies the items into three groups called scarce, difficult and easy. The information so developed is then used to decide purchasing strategies.

5. Fast moving, slow moving and non-moving (FSN)


FSN stand for fast moving, slow moving and non-moving. Here classification is based on the pattern of issues from stores and is useful in controlling obsolescence. To carry out FSN analysis the date of receipt or the last date of issue, whichever is later, is taken to determine the number of months which have lapsed since the last transaction. The items are usually grouped in periods of 12 months. FSN analysis is helpful in identifying active items which need to be reviewed regularly and surplus items which have to be examined further. Non-moving items may be examined further and their disposal can be considered.

6. Seasonal-off seasonal (S-OS) Analysis


S-OS analysis is based on the nature of supplies wherein S stands for seasonal items and OS stands for the off-seasonal items. This classification of items is done with the objective of determining proper procurement strategies. Agri based industries need to design their procurement policies in
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such a way that they procure their raw material during the harvesting season so that they get the best quality in the reasonable price. They need to have proper storing facilities in order to pressure the items till such time they are consumed.

7. XYZ analysis for finished goods inventory


XYZ analysis is based on the closing inventory vale of different items. Items whose inventory values are high are classified as X items while those with low investment in them are termed as Z items. Other items are the Y items whose inventory value is neither too high nor too low. Read made garments industry can effectively use this analysis to determine their investments in finished goods inventory.

8. Government, ordinary local and foreign (GOLF) supplies


GOLF analysis is used to identify the stock interms of government supplies, ordinary supplies, local supplies and foreign supplies. This analysis can be effectively used by industries in designing their procurement strategies.

9. Economic order quantity (EOQ)


Economic order quantity refers to that level of inventory at which the total cost of inventory is minimum. The total inventory cost comprising ordering and carrying costs. Shortage costs are excluded in adding total cost of inventory due to the difficulty in computation of shortage cost.EOQ also known as Economic Lot Size (ELS). EOQ FORMUL

Where A = Annual usage, O =Ordering cost per order, CC= Carrying cost per unit and CC= price per unit Carrying cost per unit in percentage.

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10. Max-minimum system


The maximum-minimum system is often used in connection with manual inventory control systems. The minimum quantity is established in the same way as any reorder point. The maximum is the minimum quantity plus the optimum lot size. In practice, a requisition is initiated when a withdrawal reduces the inventory below the minimum level; the order quantity is the maximum minus the inventory status after the withdrawal. If the final withdrawal reduces the stock level substantially below the minimum level, the order quantity will be longer than the calculated EOQ. The effectiveness of a minimum-maximum system is determined by the method and precision with which the minimum and maximum parameters are established. If these parameters are based upon arbitrary judgments with a limited factual basis, the system will be limited in its effectiveness. If the minimum are based on an objective rational basis, the system can be very effective.

11.Two bin system


It is mainly adapted to control o group inventories. In the two-bin system, stock of each item is separated into two bins. One bin contains stock to last till the date of placing a new order. The other bin contains a certain quantity of stock that will be sufficient to satisfy probable demand during the period of replenishment stock first issued from the 1st bin. When the 1st bin is empty, an order of replenishment is made and the stock in the 2 nd bin is utilized until the order material is received.

12.Materials requirement planning (MRP)


MRP is a new solution to an old problem: having stock of materials always on hand when needed without carrying excess inventory. Highly dependent upon computer technology, MRP is most helpful to firms with finished goods or end products which are made from a number of components and which are also subject to uneven or lumpy demand. The technique separates the various components and co-ordinates purchasing and delivery with production. This result in materials arriving exactly when needed for production and, at the same time, reduces the length of time materials are held in stock. MRP plans and controls goods on order and

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generates data for determining when and what specific materials will be needed to meet previously planned production schedule.

13.Just-in-time (JIT)
Just in time is highly discussed in materials management circles these days. The concept is alternatively known as ZIPS (Zero inventory production system), MAN (Materials as needed), NOT (Nick of time), or ZIN (Zero inventories). As a concept, JIT means that virtually no inventories are held at any stage of production and that exact number of units is brought to each successive stages of production at the right time.

Objectives of inventories
Inventory is as old as man. The primitive man's inventory consisted of a few tools; as a shepherd, man had to tend his flocks and herds; later, he had his granaries and warehouses; today, with industrialization, his inventories cover a very wide range. As man has progressed and his needs and activities have multiplied, the range of inventory has become larger and more diversified. As of today inventories include, among others, raw materials, part finished goods, finished goods and operating supplies. Each of these serves specific purposes. The following are the objectives of inventory management:1. 2. 3. 4. To facilitate smooth operation of the manufacturing process. To minimize investment in inventory. To reduce material handling costs. Reasonable utilization of people.

INVENTORY COSTS
Inventories cost money. The cost factor must be considered while taking any decision regarding inventories. Inventory cost includes ordering cost, carrying cost, out of stock or shortage cost, and capacity cost. Each of these comprises several elements as shown below:18

1. Ordering costs A. Cost of placing an order with a vendor of materials: Preparing a purchase order. Processing payments. Receiving and inspecting the material. B. Ordering from the plant: Machine set-up. Start-up scrap generated from getting a production run started 2. Carrying costs A. Costs connected directly with materials: Obsolescence Deterioration pilferage B. Financial costs:Taxes Insurance Storage Interest (As the cost of capital borrowed to acquire and maintain the inventories) C. Alien elaborates the carrying costs in greater details as follows: Capital costs Interest on money invested in inventory. Interest on money invested in land and building to hold inventory. Interest on money invested in inventory holding and control equipment. Storage space costs Rent on building. Taxes and insurance on building. Depreciation on building. Depreciation on warehouse installation. Cost of maintenance and repairs. Utility charges, including heat, light and water.
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Salaries of security and maintenance personnel. Inventory service cost Taxes on inventory. Labor costs in handling and maintaining stocks. Clerical expenses in keeping records. Employee benefits for warehouse and administrative personnel. Handling-equipment costs Taxes and insurance on equipment. Depreciation on equipment. Fuel expense. Cost of maintenance and repairs. Inventory risk costs Obsolescence of inventory. Insurance on inventory. Physical deterioration of inventory. Losses from pilferage. 3. Out-of-stock costs A. Back ordering. B. Lost sales. 4. Capacity costs A. Over time payments when capacity is too small. B. Layoffs and idle time when capacity is too large. Some of the components of inventory costs are conflicting, ordering costs and carrying costs, for example. If ordering costs are more carrying costs are less and vice versa.

Inventory management and control


The management of inventory is given such an importance that it is often treated synonymous with materials management. Literature wise, there are more number of books and articles written on inventory management than on materials management.

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Inventory management involves the development and administration of policies, systems, and procedures which will minimize total costs relative to inventory decisions and related functions such as customer service requirements, production scheduling purchasing, traffic, etc. Viewed in that perspective, inventory management is broad in scope and affects a great number of activities in a company's organization. Because of these numerous interrelationships, inventory management stresses the need for integrated information flow and decision making, as it relates to inventory policies and overall systems. Inventory control, on the other hand, is defined in a narrower sense than inventory management and pertains primarily to the administration of established policies, systems and procedures. For example, the actual steps taken to maintain the stock levels or stock records refer to inventory control.

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CHAPTER-2 RESEARCH DESIGN

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Research design

Research means a search of facts, answers to questions and solutions to problems. It is a purposive investigation; it is an organized inquiry. It seeks to find explanations to unexplained phenomenon to clarify the doubtful facts and to correct the misconceived facts.

Research design stands for collecting the relevant data and techniques to be used in their analysis keeping in view the objectives of the research and the availability of staff, time and money. Research study in fact, has a great bearing on the reliability of the results aimed at and such constitutes the firm foundation of the entire research.

Research design is needed because it facilitates the smooth sailing of the various research operations, thereby making research as efficient as possible, yielding maximum information with minimum expenditure of effort, time and money.

The type of research undertaken is PURE RESEARCH i.e., it is done for the sake of knowledge without any intention to apply it in practice. It is a basic or fundamental research. This research is not problem oriented.

RESEARCH METHODOLOGY

DESIGN OF THE STUDY:


Title of the study Statement of the problem Objectives of the problem Scope of study
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Limitations of the study Methodology of the study Research instruments

Title of the study


A study on inventory management of (KSDL) Karnataka soaps & Detergent limited at Bangalore.

Statement of the problem


Every business firm big or small has to maintain inventory and it constitute an integral part of the working capital. It has been estimated that inventory in Indian industries constitute a significant portion of current asset inventories require a significant investment not only to acquire them but also hold them investment in inventory is said to be idle but it is unavoidable in any organization manufacturing or trading so inventory cost has become necessary.

Objectives of the study


To analyze the inventory requirements of the firm to fix various inventory levels. To compare the inventory levels of last three years to know the improvements. To classify the inventories according to various inventory techniques. To offer findings, suggestions and recommendations to the firm. To keep a track on the materials cost in the company. To study present system of inventory management.

Scope of the study


Study was limited only to last three years of inventory requirements Study aims at giving a clear picture of various levels of inventory in the current year.
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Study also aims at giving a clear picture of improvement in the levels from three years. Study aims at classification of inventory according to its techniques. The study covers all the areas of cost accounting that can be used by the stores department of the firm.

Limitations of the study


Study restricted to three years of inventory requirements. The overall performance of inventory is analyzed not the particular model. Limited tools were used to analyze the inventory transactions. The collection of data for the analysis is restricted to KS&DL only at Bangalore. Time was major limiting factor to study.

METHODOLOGY OF THE STUDY:Mainly data is obtained from the annual reports of the company, and websites. Further data is collected through interviews with the personnel and concerned staff of Karnataka soaps & Detergent limited, Bangalore. A questionnaire is also appended. Sampling techniques are not applicable to the study as it pertains to the study of a single company.

RESEARCH INSTRUMENTS:
The study period covered in this case study is 3 financial years i.e., from , 20072008, 2008-2009,2009-2010,2010-2011

Overview of chapter scheme


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CHAPTER-1 INTRODUCTION
It gives an introduction to the topics relating to finance.

CHAPTER-2 RESEARCH DESIGN It deals with the research methodology to be adopted.

CHAPTER-3 COMPANY PROFILE It focuses on profile of industry and company.

CHAPTER-4 ANALYSIS OF DATA Analysis and management. interpretation of inventory

CHAPTER-5 FINDINGS AND CONCLUSIONS Consist of findings, suggestion and conclusion.

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CHAPTER-3 COMPANY PROFILE

KARNATAKA SOAPS AND DETERGENTS LIMITED


HISTORY OF KS&DL
Karnataka soaps & Detergents Limited, a successor to the government soap factory, which is one of the premier factories among the Indian soap industries.
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After World War 1, there was a slump in the sandal wood export to the west. It dropped a blanket of gloom over business & trading in India. The Maharaja of Mysore turned this threat in to an opportunity, by sowing the budding seeds of KS & DL on the out skirts of Koti forest, near Bangalore in 1918. The project took shape with the engineering skill and expertise of a top-level team with the inspection of the Diwan of Mysore Late Sir. M. Visvesvaraya & with the service of scientists late Sir S.G. Shastry, Professor Watson & Dr. Sub rough. The entire credit goes to Sir. S.G.Shastry, who improved & made the process perfect of manufacturing of sandalwood oil & world famous Mysore Sandal Soap. The factory was started a very small unit near K.R.Circle, Bangalore with the capacity of 100 tons p.a in 1918. Then, the factory shifted its operations to Rajajinagar industrial area, Bangalore in July 1957. The plant occupies an area of 42 acres (covering soap, detergent & fatty acid divisions) on the Bangalore-Pune Highway easily accessible by transport services and communication. In November 1918, the Mysore Sandal Soap was put in to the market after sincere effort & experiments were undertaken to evolve a soap perfume blend using sandalwood oil as the main base to manufacture toilet soap.

RENAMING OF COMPANY
On Oct 1st 1980, the Government Soap Factory was renamed as KARNATAKA SOAPS AND DETERGENTS LIMITED. The company was registered as a Public Limited company. Today the company produces varieties of products in toilet Soaps, Detergents, Agarbathis and Talcum powder. KS&DL has been built up with rich tradition for the quality of its products. Mysore Sandal Soap is the No: 1 anywhere in the world. The Karnataka state is the original home of the Sandal oil, which uses Original perfume sandalwood in the manufacturing of Mysore Sandal Soaps. It is also known as the FRAGRANT AMBASSADOR OF INDIA.

TRADEMARK OF MYSORE SANDAL SOAP


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The SHARABHA

SLOGAN

NATURAL PRODUCTS WITH EXOTIC FRAGRANCES

KS & DL has a long tradition of maintaining the highest quality standard, right from the selection of raw materials to processing and packing of the end product. The reasons why its products are much in demand globally and are exported regularly to UAE, Beharen, Saudi-Arabia, Kuwait, Qatar, South America. The entire toilet soaps of KS & DL are made from raw materials of vegetable origin and are totally free from animal fats.

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

OBJECTIVES OF KS&DL:
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I. II. III. IV. V. VI. VII. VIII.

To serve the National economy. To attain self-reliance. To promote purity & quality products To maintain the Brand loyalty of its customers. To build upon the reputation of Mysore sandal soap based on pure sandal oil. To promote and uphold its image as symbol of traditional products To maintain the brand loyalty of its customer. To supply the products mentioned above at most reasonable and competitive price.

BIRDS EYE VIEW OF KS&DL


1918 Government Soap Factory was started by Maharaja of Maharaja and the Mysore Sandal Soap was introduced into the market for the first time 1950 The factory output rose to 500 M.Tons with the following modifications. 1. Renovating the whole premises. 2. Installing new boiler soap building plant and drying Chamber. 1954 Received license from Government to manufacture 1500 to soap and 75 tons of glycerin per year. 1957 1974 Factory shifted its operation to Rajajinagar Industrial Area. Mysore sales international limited was appointed as the sole selling agent, for marketing its products 1975 Rs.4 Crores synthetic detergent plant was installed based on Italian technology by Ballestra SPA. 1980 On 1st October 1980, the Government Soap Factory was converted into a public sector enterprise and renamed as Karnataka Soaps & Detergents

30

Limited. 1981 1984 1985 Production capacity increased Rs. 5 Crores Fatty Acid Plant was installed

Manufacturing of premium quality of Agarbathies at Mysore Division Production capacity was raised to 26000 M.Tons Per Annum. A large variety of toilet soaps at attractive shapes, colors and fragrances introduced to meet the varieties & tastes consumers

1992

The company was registered with the Board for Industries and Financial Reconstruction(BIFR), New Delhi in December for rehabilitation, as the company suffered losses continuously since 1980 as it net worth fully eroded

1996

The BIFR approved the rehabilitation scheme in September & the Company stated making Profits.

1999

ISO-9002 Certificate for quality assurance in production, installation and servicing.

2000 2003

ISO-14001 certificate pertaining to environmental management system The entire carried forward loss of Rs. 98 Crores wiped out and in May BIFR, declared the company to be out of its Purview. The Company is making profit continuously: It is only State Public Sector unit that has come out of BIFR.

2004 2005

The ISO-9002 was upgraded to ISO-9001-2004, Quality Systems. Launched new herbal care soap of 100 gms contains 19 herbs & leaves extracted perfumes. Geographical indication registry for

31

Mysore Sandal soap Mysore Sandalwood Oil 2006 2007 2008 Award for the outstanding export performance of Cosmetics & Toiletries ICWAI National award national for excellence KSDL prime products, Mysore Sandal Wood Soap and Oil are accredited

with Geographical Indications as the Intellectual property of India as per the Geographical Indication of goods Act 1999. The ISO-9001 was upgraded to ISO-9001-2008 Quality accreditations & ISO 14001 2004, EMS accreditation 2009 KSDL upgraded the ISO 9001-2008 policy for Quality Management System and ISO-14001-2004 Environmental Management System 2010 Won Karnataka Chief company Ministry Ratna Award for profited government

KS&DL AT GLANCE
Incorporated Name Address Karnataka Soaps and Detergents Limited Karnataka Soaps & Detergents Limited

32

Bangalore Pune Highway Post Box No. 5531, Rajajinagar, Bangalore-560055 PH: 0803377691/ 3370469/23371103 to 06/ 22376922to24 Email: Mysoresandal@vsnl.com Website: www.mysorsandal.com Year Of Establishment Constitution Management 1918 Wholly owned by Govt. of Karnataka Undertaking Govt. Of Karnataka nominates/ appoints Board of Directors Chairman & MD Renamed Trademark 1980 The trademark is Sharabha. It is the Body is the head of an elephant means blending the intelligence of lion with strength of an elephant Production range Toilet soaps, bar soaps, detergents cakes, powders, agarbhathies, cosmetics, baby products, Sandalwood Oil Process know how The facility is a pioneer in the Manufactures of various soaps and technology imported from Italy. Capacity of the Unit Licensed capacity is 26000 metric tons of Soaps & 10000 metric tons of detergents per annum Plants At Bangalore: Soap Plant, Detergent Plant, Fatty Acid Plant At Mysore : Sandalwood Oil, Agarbathies At Shimago: Duty Paid Godown

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Bankers

1. Co operation Bank, Bangalore 2. State Bank of Mysore, Bangalore 3. Syndicate Bank, Bangalore 4. Canara Bank, Bangalore 5. Vijaya Bank, Bangalore

VISION, MISSION AND QUALITY POLICY:

VISSION:
I. II. Keeping pace with globalization, global trends & the States policy for using technology in every aspect of governance. Ensuring global presence of Mysore Sandal products while leveraging its unique strengths to take advantage of the current Tech scenario by intelligent & selective diversification. Secure all assistance & prime status from Government India all Tech alliances. Further, ensure Karnatakas pre-eminent status as a proponent & provider of Tech services to the world, nation, & private sectors.

III.

MISSION:
I. II. III. IV. To serve the National economy. To attain self-reliance. To promote purity & quality products To maintain the Brand loyalty of its customers.

34

V.

To build upon the reputation of Mysore sandal soap based on pure sandal oil.

OBJECTIVES OF KS&DL:
I. II. III. IV. V. VI. VII. VIII. To serve the National economy. To attain self-reliance. To promote purity & quality products To maintain the Brand loyalty of its customers. To build upon the reputation of Mysore sandal soap based on pure sandal oil. To promote and uphold its image as symbol of traditional products To maintain the brand loyalty of its customer. To supply the products mentioned above at most reasonable and competitive price.

ISO 9002 QUALITY POLICY:


KS&DL commits to customer delight through Total Quality Management & continues improvement by involvement of all its employees.

ISO 14001 ENVIRONMENTAL POLICIES OF KS&DL:


I. II. III. Is committed to preserve the natural environment in the production of its quality products to the satisfaction of its customer. Will comply with all statutory & regulatory requirements pertaining to environment stipulated by both state & central authorities. Would invite & implement action to reduce all impacts that are likely to be a source of concern to the environment.
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IV. V. VI. VII.

Would strive & set an example in protection & promotion of an eco-friendly environment. Is committed to prevent & minimize risks to the environment & conserve natural resources by waging a war against wastes. Will motivate every employee of the company in preserving the environment by providing appropriate training. Will make available a copy of environment policy, under environment Management system on a written request to its manager (Environment & Policy)

AN ISO-9002 COMPANY
KS & DL with a tradition of excellence of over eight decades is committed to customer delight, through total quality management and continuous improvement through the involvement of all employees. KS&DL has got ISO 9002 certificate. To improve the quality management system and to facilitate TQM in the process of soap and detergent, the management took decision to obtain ISO-9002 by end of March 1999. Accordingly action plan was drawn and a committee was set up for the purpose during October 1998 with a mission statement. The company gives initial training including conducting employees awareness programme, document quality manual and quality system procurement. In this direction company obtained the guidance from Consultancies, Bangalore and Bureau of Indian Standards, Bangalore. Accordingly, company standards registered for ISO 9002 by the end of March to the Bureau of Indian Standards. Obtained the certificate by the end of March 1999 itself. This is to project in the national and international market and also to improve quality of products offered to the consumers with the assurance of quality in the message. The Company got itself upgraded to ISO-9001-2004, Quality Systems in the year 2004-05.

ISO-14001

36

The company is located in the heart of the Bangalore city. The management of the company took a decision to get the ISO-14001 and become model to other public sector for the techniques used and also to other Government units to spread the message of maintenance of environment. ISO-14001 and ISO-9001 will facilitate to improve the corporate brands in the global market and it will help the company to improve the profits, year after Year on long-term basis. The environment management system adopted in the company through this motive as follows: I. II. III. Conservation of energy Conservation of Surrounding Conservation of resources.

Equipped with latest technology and backed by full-fledged quality control and R&D support, KS&DL is marching confidentially ahead in the new millennium. The Company is developing new products to meet the changing preferences of its customers.

KS&DL follows the following distribution Channel AREA OF OPERATION:

WORK MODEL:

FLOW

SILOS (Silos are closed chambers) Soaps Noodles


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Container Mixer

Simplex Plodder

It becomes NOODLES

Milling

It becomes soap ribbons

Duplex plodder

Cutting Machine Cakes are led to

Stamping Machine Wrapping machine

Led through the conveyor belt


ACHIEVEMENTS / AWARD: 1. Government of Karnataka

38

Dept of Industries and commerce State Export Promotion Advisory Board. EXPORT AWARD 1974-75 2. Detergent Plant M/s Chemical Bombay have given 1st price for the year 1980-81 3. Geographical Indication GI-2005 4. ISO 9001-2000 in the year 1999 5. ISO 14001-200

FUTURE GROWTH AND PROSPECTUS: 1. Introduction of anti-bacteria, herbal transparent soap, made out of 33 essential oil based perfume, Aloe Vera, Vitamin-E etc as additive and suitable for all types of skin and all seasons. 2. Improvement in existing products Mysore Sandal classic improved moisturizers & skin conditions. 3. Introduction of sandalwood powder in 50gms, 100gms to meet the growing demand for religious purpose. 4. Introduction of new higher powered detergent powder for institutional sales in bulk packaging. 5. To attain market leadership. 6. Introduction of new trade schemes to increase sales. 7. Aggressive advertisement and publicity as part of sales promotion. 8. Reduction in distribution expenses. 9. Cost-reduction in all areas.
39

10. Instant decision making in certain procurement activities. 11. Timely introduction and implementation of market driven decisions. 12. Ensuring effective internal control.4 in the year 2000

GLOBAL FAVOURITES FOR THEIR NATURAL GOODNESS


KS&DL has a long tradition of maintaining the highest quality standards, right from the selection of raw materials to processing and packaging of the end product. The reason why its products are much in demand globally & are exported regularly to UAE, Bahrain, /Saudi Arabia, Kuwait, Qatar, South East Asian countries as well as North America & South America. The sandalwood oil, of course, is much sought after by the leading perfume houses of the world. All the toilet soaps of KS&DL are made from oils & fats of vegetable origin & totally free from animal fat.

OWNERSHIP PATTERN:
Wholly owned by Government of Karnataka.

COMPETITORS SHARE:

INFORMATION

AND

THEIR

MARKET

HUL Godrej Procter and gamble KSDL

70% 04% 10% 11% 05%

STRENGTHS
1. 2. 3. 4.

Other

Only soap in India that contains pure sandal & almond oil. Certified by ISO Worlds largest production of sandal wood oil. Brand name from decades in soap market.
40

5. It has very good dealership network in south which ensures that the products reach every customer. 6. Diversified product range helps the company to maintain stability.

WEAKNESSES
1. 2. 3. 4. 5. Distribution network weak in north and east. Absence of television advertisement Neglecting freshness aspect. High oriented cost due to excessive labour force. Low turnover resulting in low profit.

OPPORTUNITIES
1. 2. 3. 4. Traditional benefits that sandal is good for skin. Skin care is just gaining importance among consumers. Government of being in the industry for a long time. Existence of vast market and huge demand.

THREATS
Other competitors products such as rexona, moti santoor etc. there is a need for renovation of plant and machinery. Government policy may reduce growth potential. Other sandal soaps in the market. Entry of new multinationals in soap business. SYSTEMS:

A. Accounting System:

41

Financial statements are prepared under the historical cost convention on an accrual basis and comply with the accounting standards refer to sec 211 (3c) of the companies Act 1956.

B. Costing System: Process costing. C. Inventory Control System


ABC analysis for stock control. FIFO method for issuing materials. Computerized accounting system for stores.

D. Remuneration System:
1. Time rate system is followed to employees. 2. Government fixes the remuneration to executives.

E. Performance Appraisal System:


Confidential report is prepared by heads of various departments for systematic judgment of the subordinate by authority to assess the standard of work & overall performance.

F. Inventory Control System: STAFF:


As any employer, KS&DL follow ethical employment standards wherever it operates with a goal in mind company guarantees. 1. To fulfill its entire legal obligation in terms of employment payments and benefits practices. 2. Adequate and timely training for every one for the job for which they are employed.
42

3. Career advancement related to performance and experience.


STAFF:

Benefits provided by KSDL:


Monetary benefits are basic wage allowances, employees contribution to PF. Employee state insurance, bonus, pension gravity etc. Fringe benefits like housing, food canteen, education to children, medical facility, holiday pay, recreation etc.

Allowances:
The gross salary includes basic pay and 1. DA 2. City compensatory allowance 5% of basic pay. 3. HRA 20% of B.P who resides in rented house. 4. Conveyance allowance, Rs.595/- per month for workers. Family Travel Allowance: Rs.1000/- per year for an employee. 5. Shift allowance: 3 shifts, 1st: 6-2p.m 2nd: 2-10p.m Rs.15/- per shift. 3rd: 10pm Security Rs.25/- per shift. Regularly the administrative is 9.30am to 5.30p 6. Leave allowance: 18 days privilege leave 7 days casual. Leave 15 days of sick leaves. 7. Canteen facility 8. Bonus: It is declared within 8 months after closing the accounts the management has declared 20% bonus for the current year. 9. Increments
43

10. P.F

Medical benefit: Workmen card: Domiciliary Rs, 400/- per month is given along with wages & group insurance policy for self & family. Office card: the co, gives actual cost over & above the entitlement for major diseases.

STYLE OF MANAGEMENT:
Decision-making is centralized with the head office. Authority is given to unit in-charge to take decision in day-to-day minor matters & other urgent matters. Decision-making depends on the authority & responsibility conferred on each individual & thus its distributed based on designation & position held. In important matters, meetings are held to seek opinions of top management & various department manager & the decisions are taken & implemented. Decision-making is co-ordinate & done with wide consultations of top management of department managers consultation which gives best possible gains.

STRATEGY:

44

Strategic planning is about asking questions, more than attempting to answer them. Strategy formulation entails a search for a different frame of reference. It is the quest for a new business paradigm. There are two types of paradigms that apply to management, namely the business and the organizational or managerial paradigms. The business paradigms define a companys position in the market place with respect to customers, technology and products. Strategy is a choice of direction and action; the company adopts to achieve its objectives in a competitive situation. Any statements on overall of functional strategy that the company may wish to share are:

Improvement in the existing products.


Their future plans include launching of new products. The cost control exercise is in consolidation. Introduction of cost effective substitutes without compromising on quality Development of new perfumes, soaps detergents, agarbathis, creams and shampoos.

Highlights for the year


1. The companies has set an ambition sales target of Rs 220 crores for the year 2009-10 & have plans to achieve the sales target. 2. The company introduced multi variants in the brand name of wave soap namely wave lime for the long run like Mysore sandal soap & wave lime soap in public distribution system through Karnataka food & civil suppliers new liquid body wash in the name of wave ,rose & Mysore sandal gold , in the liquid soap segment. Wave body spray etc., during the financial year.

Future prospects
1. Put up new plant & machinery with latest technology to improve the quality & also to reduce the cost of production. 2. The competition in the FMCG sector is raising day by day & almost all competitors are offering heavy consumer offers to capture market share, incentives & trade schemes to the traders & consumers.
45

3. Non supply of sandal wood by the Karnataka state forest department has necessitated sourcing sandal wood from public auction at very exorbitant rates. 4. Due to the non availability of sandal wood & also the exorbitant cost of sandal wood, the company is developing on promotion of popular soaps. 5. During the current year, the company launches wave talcum powder with cologne perfume, liquid soaps, herbal anti septic hand wash, to increase its sales column substantially in the days ahead.

FINANCE, ACCOUNTS, AUDITING DEPARTMENTS:ACCOUNTING


It is the life blood of every organization. It is concerned with managerial decision making. This department is concerned with proper utilization of cash. It identifies the source of finance where to borrow i.e. ICICI, IRBI, IDBI, Corporation bank etc. It has abundant of function which can be enumerated as follows: Effective funds management which is inverted in beneficial projects. Decision making regarding fixing of cash account. Obtaining trade credit. Profit Maximization. Wealth Maximization. Preparation of cash budgets. Systematic approach to working capital management. Pricing of raw materials & valuation of stores. To protect financial interest of the company

AUDIT DEPARTMENT:
46

KSDL audit wing is headed by internal auditor. Auditing is vital for the company as it facilitates verifying of all the books of a/c by trial balance, it also comply with requirements for central excise & income tax purposes. After the Auditors monitor everything they give report which is helpful to the company.

COSTING:
When a company does costing it ensures proper fixation of selling price of the product, cost control it also help in taking decision. KSDL use process costing as the production mechanism is systematic it involves addition of a lot of ingredient in the manufacturing.

PRODUCT PROFILE:

KS&DL is the true inheritor of golden legacy of India. Continuing the tradition of excellence for over eight decades, using only the best East Indian grade Sandalwood oil & Sandalwood soaps in the world. The products produced at KS&DL are the Soaps, Detergents, Agarbathies and Sandalwood oil.
PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL SOAP PRODUCTS MANUFACTURED BY KSDL TOILET SOAPS nn NAME OF THE PRODUCTE PRODUCT MYSORE SANDAL SOAP MYSORE SANDALCLASSIC SOAP MYSORE SANDAL GOLD SOAP MYSORE SANDAL BABY SOAP MYSORE SPECIAL SANDAL SOAP UNITS OF GRAMS 75, 125 75 75, 125 75 75

47

MYSORE ROSE SOAP MYSORE SANDAL HERBAL CARE SOAP MYSORE JASMINE SOAP WAVE SOAP MYSORE LAVENDER SOAP MYSORE SANDAL BATH TABLET MYSORE SANDALCLASSIC BATH TABLET MYSORE JASMINE BATH TABLET MYSORE SPECIAL SANDAL TABLET MYSORE SANDAL ROSE TABLET MYSORE SANDAL GUEST TABLET

100 100, 125 100 100 150 150 150 150 150 150 75

DETERGENTS NAME OF THE PRODUCT MYSORE DETERGENT POWDER MYSORE DETERGENT POWDER MYSORE DETERGENT CAKE MYSORE DETERGENT CAKE UNITS IN GRAMS 1000 500 125 250

TALCUM POWDERS NAME OF THE PRODUCT MYSORE SANDAL TALC UNITS IN GRAMS 20, 50, 100, 300
48

MYSORE SANDAL BABY TALC

100, 200, 400

AGARBATHIES

NAME OF THE PRODUCT Mysore Sandal Premium Mysore Sandal Regular Mysore Rose Nagachampa Suprabhatha Mysore Jasmine Parijata Sir M.V.100

49

Bodhisattva Venkateshwara Durga Ayyappa Alif Laila Meditation

ABC ANALYSIS USED IN KSDL (ALWAYS BETTER CONTROL)


All inventory items are categorized as A, B & C items. The total consumption of item materials for the previous years will be arranged in descending order and items according by the values the first 10,00,000 and above of total consumption are taken as A class items. The items accounting for above 2,00,000 and above with n 10,00,000 value of total consumption are taken as B class items. The items accounting for below 2,00,000 value of total consumption are taken as C class items. Strict control for commitment, receipt and consumption would be exercised on A category items. The purchase budget for the budget year will be complied in detail for A category items and under major groups for B and C category. The internal audit department conduct their visit strictly attempt once in a year for A items once in two to three year for B & C items respectively.

Advantages of ABC
This approach helps the material manager to exercise selective control and focus his attention only on few items.
50

By concentrative on A class items the material manager is able to control inventories and show visible results in a short spare of time. It reduces the clerical cost and resulted in better planning and improved inventory.

Disadvantages of ABC
As ABC analysis is based on grades of different items, this gradation may include a lot of subjective elements. The result of ABC analysis should be received and updated which is not easy.

KARNATAKA SOAPS AND DETERGENTS LTD FOLLOWS THE ABC ANALYSIS TECHNIQUE OF INVENTORY MANAGEMENT ABC Analysis (Always Better Control) segregated on the basis of value in Rs.
A Class Items Consumption worth Rs. 10,00,000 & above p.a. Palms, fatty acid distillate Soap nobles Imported aromatic chemicals Indigenous items Rice bran acid oil B Class Items Consumption worth Rs. 2,00,000 below Rs.10,00,000 p.a. Solvents Items other than solvents Almond oil AB Red oil Blue colour paper C Class Items Consumption worth below Rs.2,00,000 p.a. Camphor Benzyl propionale Common salt Liquid paraffin Glycerin

51

Clove leaf oil Stemon Acid slurry Silicon Cellophane paper

Oil dark brown Oil green Soda ash Water soluble yellow Tactaric acid

White clay White oil Sandal wood oil bottle MS gold pouches Wrappers

CLASSIFICATION AND CODIFICATION OF INVENTORIES IN KS&DL


Classification of Inventory is done on group wise and codifications are directly identified. The inventories of a manufacturing concern may consist of raw materials, stores & spares; work in process, finished goods etc. The inventories are classified according to their nature/group.

VALUATION OF INVENTORIES IN KS&DL


Weighted average method is used in this factory the total cost of all the materials is divided by the total number of items in stock. The price calculated in this way will be used for issue of materials up to the time a fresh purchase has not been made. After a fresh purchase, the quality will be added to the earlier balance quality and material cost will be added to the earlier cost. A fresh price is calculated by the number of units of stock after the purchase.

DEPARTMENTAL ORGANISATIONAL STRUCTURE


52

Finance Department Chart


GENERAL MANAGER
(Finance)

AGM (Finance)

AGM (Costing) / AGM (Bills)

MGR A/Cs

MGR

MGR (PR&PF)

MGR (LS)

Supervisor

Supervisor

Junior Officer

Junior Officer

Junior Officer

Senior Assistant / Stenographer Junior Assistant

Senior Assistant / Stenographer Junior Assistant

Senior Assistant / Stenographer Junior Assistant

HR DEPARTMENT
53

MANAGING DIRECTOR MANAGINGDIRECTOR

ASST. GEN MANAGER [HRD]

MANAGER [HRD]

FIRST AID

TIME OFFICE

OFFICER [HRD]

CANTEEN

VMO

ASS MANAGER

MANAGER

MANAGER

JR OFFICER JR. OFFICERS JR ASST SR. ASSTS JUNIOR ASST HELPERS ASST MANAGER SR ASSTS

ATTENDER

PRODUCTION DEPARTMENT
54

General Manager

Deputy General Manager

Asst General Manager

Manager

Jr.Officer

Charge man

Employees

MARKETING DEPARTMENT
55

Managing Director

GEN.MGR

D.G.M (EXPORT)

BANGALORE babaBAB

HYDERABAD

MYSORE

DELHI

KOLKATA

CHENNAI

H.O

AGM

AGM

DGM

AGM

MANAGER

AGM

AGM

MANAGER

ASST.MANAG ER

STAFF

56

ACHIEVEMENTS / AWARD:
1. Government of Karnataka Dept of Industries and commerce State Export Promotion Advisory Board. EXPORT AWARD 1974-75 2. Detergent Plant M/s Chemical Bombay have given 1 st price for the year 1980-81
57

3. Geographical Indication GI-2005 4. ISO 9001-2000 in the year 1999 5. ISO 14001-2004 in the year 2000

58

CHAPTER-4 DATAANALYSIS AND INTERPRETATION

59

SIZE OF INVENTORY
Inventory means stock of goods. It covers the stock of raw materials, stores and spares, work in progress and finished goods.

Table No. 1
Table showing the progressive base year percentage growth of inventory for the period 2006-09 Rs. in Crores Year
2007-2008 2008-2009 2009-2010 2010-2011

Inventory
35.0855 29.6012 40.7452 51.7605

Growth of inventory
19.42% 16.39% 22.15% 32.92%

Percentage growth of total inventory =

Inventory Total Inventory

x 100

60

Growth of inventory
35.00% 32.92% 30.00% 25.00% 20.00% 15.00%
Growth of inventory

19.42% 16.39%

22.15%

10.00% 5.00% 0.00%


2007-2008 2008-2009 2009-2010

2010-2011

ANALYSIS The above table shows the percentage growth of total inventory. Year 20072008 is taken as base year. In year 2007-2008 there was growth in inventory and it decreased to 16.39% in 2008-2009 and there was growth of inventory in succeeding years,22.15% in 2009-2010and 32.92% in 2010-2011. INTERPRETATION The position of inventory and its percentage were decreasing from 20072009.inventory and percentage growth of inventory were in downward trend due to decrease in production resulting to decrease in sales during the year 2007-2008 and 2008-2009.but in succeeding years i.e.2009-2010 & 2010-2011 the position of inventory and its percentage has increased due to increase in production and sales.

61

PERCENTAGE OF INVENTORY TO WORKING CAPITAL:Working capital is the amount of funds used in current operation of business, working capital need not be in cash, and it can be in form of asset that can be converted into cash within one year. Working capital = Current assets - Current liabilities

Table No. 2
Table showing the Percentage of Inventory to Working Capital for the period 2006-09 Years
2007-08 2008-09 2009-2010 2010-2011

Inventory
29.60 40.74 51.76 52.52

Working capital
40.62 63.98 67.80 63.76

Percentage
72.87% 63.67% 76.34 82.37

PERCENTAGE OF INVENTORY TO WORKING CAPITAL = Inventory X 100 Working Capital

As per standard or idle inventory to working capital, the inventory should not observe more than 75% of working capital.

ANALYSIS The above table shows the inventory to working capital, year 2007-2008 is taken as the base year.72.87% in 2007-08, 63.67% in 2008-09. it increased for the next succeeding years 76.34% in 2009-2010 and presently 82.37% in 2010-11.

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CHART SHOWING PERCENTAGE OF INVENTORY TO WORKING CAPITAL

PERCENTAGE OF INVENTORY TO WORKING CAPITAL


90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2007-2008 2008-2009 2009-2010 2010-2011 PERCENTAGE OF INVENTORY TO WORKING CAPITAL

INTERPRETATION Inventory to working capital, helps to measure the short term solvency of a company. It is 63.67% in 2008-09, 76.34% in 2009-2010 The inventory to working capital is sufficient but during 2010-11 it is above the standard 82%. This shows it is not good situation for the company. This may be due to much of inventories is locked up in working capital.

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PERCENTAGE OF INVENTORY IN CURRENT ASSETS


Inventory generally means stock of good involved in current assets. Current asset is those assets which change their form and substances and which are converted into cash during the normal operating cycle of business.

Table No. 3
Table showing the Percentage of Inventory in Current Assets for the period 2006-09

Years 2007-08 2008-09 2009-10 2010-11

Inventory 29.6012 40.7452 51.7605 52.5234

Current assets 88.1689 109.1372 118.956 112.114

Percentage 33.57% 37.33% 41.75% 46.84%

PERCENTAGE OF INVENTORY TO CURRENT ASSETS = Inventory x 100 Current Assets

ANALYSIS The above table shows the percentage of inventory in current asset. Year 2007-08 is taken as the base year. The above table shows the increasing trend, 33.57% in 2007-08, 37.33% in 2008-09,41.75% in 2009-10 and presently 46.84% in 2010-11

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Percentage of inventory in curent assets


50.00% 45.00% 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00%
2007-2008 2008-09 2009-10 2010-2011 Percentage of inventory in curent assets

46.84%

39.17% 41.75%
33.57%

INTERPRETATION

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INVENTORY TURN OVER RATIO OR STOCK TURN OVER RATIO It indicates the number of times the stock is turned over (sold) during the year. It is a ratio between net sales and average inventory.

Table No. 4
Table showing the percentage of Inventory Turnover Ratio for the period 2006-09 (Rs. In Crores) Years 2007-08 2008-09 2009-10 2010-11 Net sales 128.6462 153.3703 164.7774 164.9723 Avg. inventory Turnover times 29.6012 40.7452 51.7605 52.5234 4.34 3.34 3.183 3.76

Inventory Turnover Ratio ANALYSIS = Net Sales Average Inventory

ANALYSIS The above table shows the inventory turnover ratio year 2007-08 is taken as the base year ,4.34 times in 2007-08.there was a decrease in turnover times for the next three succeeding years i.e.3.76 in 2008-2009,3.18 in 2009-10 and presently 3.14 in 2010-11.

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CHART SHOWING INVENTORY TURN OVER RATIO

INVENTORY TURN OVER RATIO


4.5 4 3.5 3 2.5 2 1.5 1 0.5 0

4.34 3.76 3.183 3.14

INVENTORY TURN OVER RATIO

INTERPRETATION The above graph shows that the inventory turnover ratio is decreasing year by year from 2007-2011.This shows that there is improvement in control over the inventories from every year to year.

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RAWMATERIAL TURNOVER RATIO

Annual consumption It is the consumption of raw material inventory during the year Average raw material opening stock of raw material + closing stock of raw material Table no. 1.5 Table showing the percentage of raw material ratio for the period 2007-11

YEARS 2007-08 2008-09 2009-10 2010-11

ANNUAL CONSUMPTION 54.1433 80.1928 77.5383 81.8064

AVG.INVENTORY TURNOVER TIMES 5.3810 8.7290 13.9591 17.3447 10.06 9.19 5.554 4.7165

ANALYSIS
The above table shows the raw material turnover ratio. Year 2007-08 is taken as the base year. In 2007-08 the turnover times were 10.06 further there was decrease in turnover times in succeeding years. It was 9.19 times in 2008-09, 5.54 times in 2009-10and presently 4.716 in 2010-11.

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RAW MATERIAL TURNOVER RATIO


15 10 5 0 2007-2008 2008-2009 2009-2010 RAW MATERIAL TURNOVER RATIO RAW MATERIAL 2010-2011

INTERPRETATION
Raw material turnover ratio shows the number of times the raw material was replaced during the year. The raw material turnover ratio is decreasing year by year so, necessary steps should be taken for proper management of raw materials.

STORES AND SPARES TURNOVER RATIO


It is the value of stores and spares inventory consumed during the year TABLE 1.6

Table showing the turnover of stores and spares turnover inventory for the period 2007-2011 YEARS Value of stores and AVG. stores and TURNOVER
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spares consumption 2007-08 2008-09 2009-10 2010-11 1.0313 0.8691 1.3257 1.1733

spares 1.159 0.5439 0.9316 0.5077

TIMES 0.89 1.60 1.42 2.311

Stores and spares turnover ratio =annual consumption of stores and spares Average stores and spares

ANALYSIS
The above table shows the stores and spares turnover ratio. Year 2007-08 is taken as the base year, its 0.89 times in 2007-08, 1.60 times in 2008-09, 1.42 times in 2009-10 and presently 2.31 in 2010-11. Its fluctuating over the years.

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Stores and spares turnover ratio


2.5

2.311

1.6
1.5

1.42
Stores and spares turnover ratio

0.89

0.5

2007-2008 2008-2009 2009-2010 2010-2011

INTERPRETATION
Stores and spares turnover ratio is fluctuating over the years. This shows that there is inefficiency in managing the stores and spares. But in current year 2010-11 it has been increased when compared to that of previous year . so the company should see that it maximizes this ratio.

INVENTORY CONVERSION OF PEROID


This represents the number of days of which inventories remain before they are issued for production.

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Table No. 1.7


Table showing the Inventory turnover Conversion in number of days for the period 2006-09 Years No. of Days in a year 2007-08 2008-09 2009-2010 2010-2011 365 365 365 365 Inventory Turnover Ratio 4.34 3.76 3.183 3.14 No. of Days 84 97 114 116

Inventory Conversion period =

Number of Days

Inventory Turnover Ratio

ANALYSIS
The above table shows the inventory conversion period. Year 2007-08 is taken as the base year. 84 days in 2007-08, there is increase in succeeding years it was 97 days in 2008-2009, 144 days in 2009-10 and in the current year 2010-11 it is 116 days .

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Inventory conversion period


120

114 97

116

100

84
80 60 40 20 0

Inventory conversion period

INTERPRETATION The inventory turnover ratio shows the increasing trend which means that there is problem in proper inventory management. So necessary steps should be taken to correct it .

DURATION OF STORES AND SPARES CONVERSION PERIOD


This represents the number of days for which stores and spares remain in inventory before they are issued to production.

Stores and spares consumed per day= Average stores and spares turnover Times of stores and spares ___________________________________ 365
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TABLE 1.8
TABLE SHOWING DURATION OF STORES AND SPARES CONVERSION PERIOD FOR THE PERIOD 2007-2009

Years

Average stores and spares 1.159 0.5439 0.9316 0.5077

Stores and spares consumed per day 0.0283 0.0238 0.0362 0.0321

No. of Days 41 23 26 16

2007-08 2008-09 2009-2010 2010-2011

Duration of stores and spares =

Average stock of stores and spares Average stores and spares consumed per day

Analysis
The above table shows the duration of stores and spares conversion period. Year 2007-08 is taken as the base year.41 days in 2007-08, 23 days in 2008-09, 26 days in 2009-10, 16 days in 2010-11.

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Duration os stores and spares conversion period


45 40 35 30 25 20 15 10 5 0

41

23

26 16 Duration os stores and spares conversion period

Interpretation
The stores and spares conversion period are fluctuating every year. During the period 2007-08 it had taken 41days where as in the current year it took 16 days. Its not better sign of inventory management.

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DURATION OF RAWMATERIAL CONVERSION PERIOD


This represents the number of days for which the raw material remain in inventory before they are issued for production

AVERAGE RAW MATERIALS CONSUMED = AVERAGE RAWMATERIALS TURNOVER TIMES OF PER DAY RAWMATERIALS 365

TABLE 1.9 Table showing duration of raw materials conversion period for the year 20072011

Years

Average raw materials 5.3810 8.7290 13.9591 17.3447

Raw materials consumed No. of per day Days 0.1483 0.2192 0.2124 0.2241 36 40 66 77

2007-08 2008-09 2009-2010 2010-2011

DURATION OF RAW MATERIALS=

AVERAGE STOCK OF RAWMATERILS

AVERGE RAW MATERIALS CONSUMED PER DAY

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Analysis
The above table shows the duration of raw materials conversion period. Year 2007-2008 is taken as the base year. It shows the increasing trend , 36 days during 2007-08, 40 days during 2008-2009,66 days during 2009-2010 and currently 77 days in 2010-2011.

Duration of raw materials conversion period


70 60 50

66

40
40 30 20 10 0

36 Duration of raw materials conversion period

16

INTERPRETATION
The raw material conversion period shows the increasing trend for the period 2007-2011. During the year 2007-08 raw material conversion period was comparatively less when compared to that of other years. It is increasing year by year. The increasing trend of raw material conversion period is not the good sign of inventory management.

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Operating expenses ratio Table No: 6 Table showing Operating expenses ratio for the period 2006-09

Years 2007-08 2008-09 2009-10 2010-11

Operating cost 1,15,85,36,413 1,54,03,40,291 1580165818 1551413073

Total income 1,28,09,80,587 1,66,47,01,541 1723349221 1649398091

Ratio (in %) 90.44 92.53 91.69 94.05

Source: Records of the KS&DL Annual Reports Operating cost OPERATING EXPENSES RATIO: Total Income x100

Analysis
The KS&DL has 90.44, 92.53, 91.69 & 94.05 as operating expenses ratio for the years 2007-08, 2008-09, 2009-10 & 2010-11 respectively. This shows KS&DL operating expenses position through over all income of the industry

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Operating expenses ratio


95.00% 94.00% 93.00% 92.00% 91.00% 90.00% 89.00% 88.00%

94.05% 92.53%
91.69% 90.44% Operating expenses ratio

INTERPRETATION The above graph represents the constant increase. In the operating expenses through total income the years 2007-2011

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CHAPTER-5 FINDINGS AND CONCLUSION

80

Findings
The study of Inventory management at KSDL Ltd. reveals the following findings. A material planning is done based on orders obtained from different customers. The material requirement plan processed is to give exact requirements of material to be produced. All material is stored in right condition at respective locations and the company has items which are slow moving and non-moving, which are disposed off at regular intervals. Verification of high value material in holding store is conducted in accordance with predetermined programmers. Vendors are related based on their performance with respect to delivery a quantity price standard. The received materials are inspected as per standard plan is finished products are tested on 100% basis material is released and handled properly. The inventory turnover ratio of the company is showing a decreasing trend from 3 years where as in current year there is a slight improvement in control over inventories. The raw material turnover ratio is fluctuating. These shows there should be necessary steps taken to manage the raw materials. Stores and spares turnover ratio is fluctuating. This show there is insufficiency in managing the stores and spares inventory. The scrap obtained in the process is comparatively very low. The entire department of KSDL is computerized.

CONCLUSION The following conclusion is drawn after analyzing the data collected from the company:-

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KS&DL will remain a household name to the people of India. Their ambition has always been and will continue, to make soaps for the family of all around the country. And bringing new brands extension to suit the need of traditional and modern scenario. The organization firmly believes that giving its people the right encouragement yield in comparable rewards. Emphasis is given to man, management and every opportunity so that people can grow with the organization. Its giant infrastructure and network people working toward a common goal to give the customer service and value that he deserve through relentless search for quality and pursuit of excellence looking toward the next century. The performance of KS&DL in the financial year 2008-2009 was satisfactory. The profits of the company have been increased in the financial year 2008-2009. Due to this there is an increase in the turnover of the company. But, during the financial year2009-2010 & 2010-2011 the profits of the company is decreasing. Due to this there is decrease in the turnover of the company. In KS&DL rate of inventory represents a very significant proportion of total assets. The size of the inventory is increasing year after which indicate inefficient inventory management in KS&DL The nutshell the KS&DL provides good quality of products & maintaining the good turnover and profitability position.

SUGGESTIONS After analyzing the overall performance of the present and past years working, a few short comings have been notice. Though the
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company is doing well overall, a little more care taken about same of the aspects of inventory management will add to the profitability of the company. Keeping this view, the following recommendations are put forth after a detailed study was made: The sales department should be effective to reduce the stocking in the finished goods component of inventory. New sales technique should be activated to increase the sales. Over stocking and under stocking of raw materials should be controlled by technical auditors, there should be coordination between production processes department and inventory handling department for efficient outcome. The company should follow EOQ to reduce over stocking of material, purchase at competitive prices, to reduce the cost of product. Concentrated effort will be needed to reduce stock of materials, which have not moved for years, insurance items should be monitored and made certain that they would meet their purpose when called upon to do so. The production department should sequence the cycle of operation and stick to the scheduled dates in all areas. Speed conversion of inventory will reduce the interest burden and improve the bottom line.

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APPENDICES AND ANNEXURES

KARNATAKA SOAPS AND DETERGENTS LIMITED BALANCE SHEET AS ON 31ST MARCH 2007

84

Amount as at 31-03-2007 PARTICULAR Rs SOURCES OF FUNDS 1. Share Holders Funds (a) Share Capital (b) Reserves & Surplus 2. Loan Funds (a)Secured Loan (b)Unsecured Loan TOTAL APPLICATION OF FUNDS 1. Fixed Assets (a)Gross Block Less Depreciation 2. Investments 3. Current Assets, Loans & Advances (a) Inventories (b) Sundry Debtors (c) Cash & Bank Balances (d) Loans & Advances TOTAL 350,855,723 80,873,641 312,345,581 72,546,525 816,621,470 292,406,486 233,475,517 58,930,969 100 16,629,120 129,995,436 318,221,000 15,070,293 Rs

Amount as at 31-03-2006 Rs Rs

318,221,000 -

146,624,556 199,911,435 199,911,435 479,915,849 518,132,435

302,808,002 242,447,847 60,360,155 100

341,214,224 68,837,157 195,715,651 94,458,527 700,225,559

85

LESS: Current Liabilities & Provision (i) Liabilities (ii) Provisions TOTAL Net Current Assets 4. (a) Miscellaneous Expenditure ( to the extent not written off {or adjusted]) (b) Profits & Loss A/c 5,326,504 12,931,061 21,166,046 292,624,243 115,943,508 408,567,751 408,053,719 170,706,357 98,239,572 268,945,929 431,279,630

TOTAL

479,915,849

518,132,435

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2007
PARTICULARS Amount for the Amount for the year ending 31-03- year ending 3186

07 INCOME Sales Less: Excise Duty Net Sales Other Income 1,195,803,294 151,428,824 1,044,374,470 19,004,300 19,004,300 Increase / (-) decrease in stock 47,309,343 1,110,688,113 EXPENDITURE Material consumed (including trading items) Other Expenditure Depreciation 507,094,583 551,982,974 3,605,016 1,062,682,573 Operating Profit Interest & Finance Charges 48,005,540 4,648,394

03-06

1,109,210,600 121,099,177 988,111,423 17,220,084 1,005,331,507 -116,807,421 888,524,086

367,238,387 488,735,280 3,482,932 859,456,599 29,067,487 5,388,868 23,678,619

PROFIT /(LOSS)BEFORE TAX 43,357,146 Provision for Taxation - Current Tax - Deferred Tax 5,200,000 2,301,452

3,180,000 2,619,805

87

PROFIT /(LOSS)AFTER TAX Prior Period Income / (-) Expenditure Tax of Earlier Years

35,855,694 6,640,866 22,099,763 20,396,797

17,878,814 2,367,245 20,246,059

Profit / (-) Loss brought forward from previous year Profit / (-) Loss carried to Balance Sheet -5,326,044 15,070,293 -25,572,563 -5,326,504

KARNATAKA SOAPS AND DETERGENTS LIMITED BALANCE SHEET AS ON 31ST MARCH 2008
Amount as at 31-03-2008 Amount as at 31-03-2007 Rs Rs Rs Rs
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SOURCES OF FUNDS 1. Share Holders Funds (a) Share Capital (b) Reserves & Surplus 2. Loan Funds (a)Secured Loan (b)Unsecured Loan TOTAL APPLICATION OF FUNDS 1. Fixed Assets (a)Gross Block Less Depreciation 2. Investments 3. Deferred Tax Asset 4. Current Assets, Loans & Advances (a) Inventories (b) Sundry Debtors (c) Cash & Bank Balances 296,012,822 146,346,670 334,385,423 350,855,723 80,873,641 312,345,581 296,106,154 237,050,829 59,055,325 30,000,100 32,146,548 292,406,486 233,475,517 58,930,969 100 10,365,536 89,995,436 16,629,120 100,360,972 129,995,436 146,624,556 555,408,013 479,915,849 318,221,000 136,826,041 318,221,000 15,070,293

(d) Loans & Advances TOTAL

104,944,640 881,689,555

72,546,525 816,621,470

89

LESS: Current Liabilities & Provision (i) Liabilities (ii) Provisions TOTAL Net Current Assets 5. (a) Miscellaneous Expenditure ( to the extent not written off {or adjusted]) (b) Profits & Loss A/c 28,039,490 12,931,061 308,752,365 166,770,640 475,523,005 406,166,550 292,624,243 115,943,508 408,567,751 408,053,719

TOTAL

555,408,013

479,915,849

90

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2008
PARTICULARS INCOME Sales Less: Excise Duty Net Sales Other Income 1,455,284,544 168,822,536 1,286,462,008 20,985,305 1,307,447,313 Increase / (-) decrease in stock -26,466,726 1,280,980,587 EXPENDITURE Material consumed (including trading items) Other Expenditure Depreciation 541,433,115 613,525,868 3,577,430 1,158,536,413 Operating Profit Interest & Finance Charges 122,444,174 4,508,734 507,094,583 551,982,974 3,605,016 1,062,682,573 48,005,540 4,648,394 43,357,146 1,195,803,294 151,428,824 1,044,374,470 19,004,300 19,004,300 47,309,343 1,110,688,113 Amount for the year ending 31-0308 Amount for the year ending 31-0307

PROFIT/(LOSS) BEFORE TAX 117,935,440 Provision for Taxation

91

- Current Tax - Defferred Tax - Dividend Tax PROFIT /(LOSS)AFTER TAX Perior Period Income / (-) Expenditure Deferred Tax Asset Proposed Dividend Tax of Earliar Years

18,000,000 7,098,690 4,596,941 88,239,809 14,687,533 32,146,548 -27,048,785 13,730,643 121,755,743

5,200,000 2,301,452

35,855,694 6,640,866

22,099,763 20,396,797

Profit / (-) Loss brought forward from previous year Profit / (-) Loss carried to Balance Sheet 15,070,293 136,826,041 -5,326,044 15,070,293

92

KARNATAKA SOAPS AND DETERGENTS LIMITED BALANCE SHEET AS ON 31ST MARCH 2009 Amount as at 31-03-2009 Rs SOURCES OF FUNDS 1. Share Holders Funds (a) Share Capital (b) Reserves & Surplus & exchange fluaction reserve 2. Loan Funds (a)Secured Loan (b)Unsecured Loan TOTAL APPLICATION OF FUNDS 1. Fixed Assets (a)Gross Block Less Depreciation 2. Investments 3. Deferred Tax Asset 4. Current Assets, Loans & Advances (a) Inventories (b) Sundry Debtors 407,452,487 163,529,618 296,012,822 146,346,670
93

Amount as at 31-03-2008 Rs Rs

Rs

318,221,000 269,488,487

318,221,000 136,826,041

107,204,608 83,506,504

10,365,536 190,711,112 89,995,436 778,420,599 100,360,972 555,408,013

309,623,620 239,847,860 69,775,760 50,000,100 52,504,866

296,106,154 237,050,829 59,055,325 30,000,100 32,146,548

(c) Cash & Bank Balances

255,132,909

334,385,423

(d) Loans & Advances TOTAL

215,257,572 1,041,372,587

104,944,640 881,689,555

LESS: Current Liabilities & Provision (i) Liabilities (ii) Provisions TOTAL Net Current Assets 5. (a) Miscellaneous Expenditure ( to the extent not written off {or adjusted]) (b) Profits & Loss A/c 16,374,640 28,039,490 246,650,794 204,956,560 451,607,354 589,765,233 308,752,365 166,770,640 475,523,005 406,166,550

TOTAL

778,420,599

555,408,013

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PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31ST MARCH 2009 PARTICULARS INCOME Sales Less: Excise Duty Net Sales Other Income 1,693,919,368 160,215,837 1,533,703,531 60,623,797 1,594,327,328 Increase / (-) decrease in stock 70,374,213 1,664,701,541 EXPENDITURE Material consumed (including trading items) Other Expenditure Depreciation 801,928,343 734,442,910 3,969,038 1,540,340,291 Operating Profit Interest & Finance Charges 124,361,250 7,276,261 541,433,115 613,525,868 3,577,430 1,158,536,413 122,444,174 4,508,734 117,935,440 1,455,284,544 168,822,536 1,286,462,008 20,985,305 1,307,447,313 (26,466,726) 1,280,980,587 Amount for the year ending 31-0309 Amount for the year ending 31-03-08

PROFIT/(LOSS) BEFORE TAX 117,084,988 Provision for Taxation

95

- Current Tax - fringe benefit tax - Dividend Tax PROFIT /(LOSS)AFTER TAX Perior Period Income / (-) Expenditure Deferred Tax Asset Proposed Dividend Tax of Earliar Years

18,500,000 2,128,828 --96,456,160 14,078,609 20,358,318 -----130,893,087

18,000,000 7,098,690 4,596,941 88,239,809 14,687,533 32,146,548 -27,048,785 13,730,643 121,755,743

Profit / (-) Loss brought forward from previous year Profit / (-) Loss carried to Balance Sheet 136,826,041 267,719,128 15,070,293 136,826,041

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Bibliography

NAME OF THE AUTHOR


Reddy Appannaiah Satyaprasad K.Aswathappa G.Sudarsana Reddy M.Krishna Reddy

TITLE & EDITION OF THE BOOK


Financial Management, Second revised edition Production and Operations Management

PUBLISHER & PLACE


Himalaya Publishing House, Mumbai Himalaya Publishing House, Mumbai

YEAR OF PUBLICATION

2009

2008

INTERNET SOURCES
WED ADDRESS

www.google.com www.mysoresandal.co.in/ www.scribd.com

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