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Practical work experience is the integral part of individual learning. An individual who is learning managerial concepts has to undergo this practical experience for being a future executive.

Master of Business Administration is a two-year programme that inserts management knowledge in an individual to make that individual completely professional for which practical experience is must.

HMT offered me a project on Working Capital Management to understand the current position through dates provided by them.



I take the opportunity to express my gratitude to Mr. Alok Gaur (Assistant General Manager, HMT, Ajmer) who have directly or indirectly contributed towards completion of this project. I extend my sincere gratitude towards Genus for providing the opportunity and resources to work on this project.

I am extremely grateful to my faculty guide Mr. Vikas Shrotriya whose insight encouraged me to go beyond the scope of the project and this broadened me learning on this project.

I also want to show my gratitude to all whose insight helped me to complete this Project.




Theoretical knowledge without practical knowledge is of little value. In order to achieve concrete and positive result along with theoretical concept the exposure of real life situation existing in corporate is very much needed.

To fulfill this need the management course has a provision for the practical study program. I thank my institute to provide us such opportunity having training period in our course so that students can have real felling of industrial life.

My project study is based on Studying the HMT machine Tools Ltd. The objective of my study is to know the Consumer Preferences, its Loyalty towards the company, to know the market awareness of consumers.

It was my fortune to get training in very healthy atmosphere. I got ample opportunity to views the overall working of the evaluation of marketing program of HMT Machine Tools Ltd.


S.NO. 1 2 3 4 5 6 Title Preface Acknowledgement Executive summary Introduction to the industry Introduction to the organization Research Methodology Title of the Study Duration of the project Objective of Study Sample Size and method of selecting sample 7 8 9 10 11 12 Scope of Study Limitation of study

Page no. 2 3 4 6 17 23

Data Analysis & Interpretation SWOT Finding Conclusion Recommendation Bibliography

34 72 74 75 76 79

Hindustan Machine Tools


Hindustan Machine Tools is a public sector undertaking of the Government of India. In 1953, the latter incorporated the machine tool manufacturing company by the name of Hindustan Machine Tools Limited. HMT as a brand is popular among the masses as a premium watch making company. However, since its very inception, HMT Limited is into a lot of other things as well. Over the years HMT, (as Hindustan Machine Tools is popularly known) has diversified into watches, tractors , printing machinery, metal forming presses, die casting & plastic processing machinery, CNC systems and bearings. HMT has also been successful in absorbing technology in all product groups by collaborating with recognized manufacturers from all over the world. Moreover, Hindustan Machine Tools has also evolved through continuous inhouse Research and Development (R & D). Today, HMT has six subsidiary companies under its supervision namely:

, HMT Ltd. manages the tractors business directly and entirely as it does with the 1st four companies of the following list. In case of the last two, HMT enjoys a holding percentage of 97.25 and 51 respectively.


Besides, Hindustan Machine Tools Limited has 18 manufacturing units. HMTs tractor business commenced its operations in 1971 in technical collaboration with M/s Motokov of Czechoslovakia. HMT started the operation with the manufacture of 25 horse-power tractor at the manufacturing plant in Pinjore,Haryana. HMT Limited, the pioneer in Machine Tools Industry in India and manufacturers of a diversified range of products has incorporated HMT MACHINE TOOLS LIMITED as its fully owned subsidiary on 9th August 1999 . HMT MACHINE TOOLS LIMITED (HMT-MTL) is a Multi unit, Multi location, Multi technology Company manufacturing a wide variety of STATE-OF-THEART Machine Tools. HMT-MTL has its manufacturing units at Five locations with each unit specialized in a particular family of Machines. The Sales and Service network is spread across the length and breadth of the country. As leading manufacturer of Machine Tools in India HMT-MTL provides

best of products in terms of technology, productivity and cost


Customer Support services including Application

Engineering, Customer Training and After sales service.

HMT Machine Tools Ltd.


Today, HMTs machine tool expertise has been developed to such an extent that HMT Machine Tools Ltd. can design & develop any kind of machine, from simple lathes to multi station transfer lines, from stand alone CNC machines to flexible manufacturing systems, leading to factory automation. HMTs broad range of machine tools covers General Purpose Machines and CNC Machines to meet the application needs of every engineering industry. Pioneering the concept of CNC technology in India, HMT has the distinction of being the very first company to successfully manufacture its own CNC systems, in association with Siemens of Germany. Today, HMT is well positioned at forefront of the precision engineering field. Its manufacturing plant employs a high skilled work force. Strongly supported by excellent in house R&D base, HMT contributes to the technological advancement of Machine tools. To date, over 80,000 machine tools on par with international standards in quality and performance, manufactured by HMT, are in use all over India. HMT is the largest unit in the industry with around 40% market share. It employees over 4236 workers in total. HMT have its manufacturing units at five locations with each unit specializing in a particular family of machines/services. The Sales and Service network is spread across the length and breadth of the country.



While HMT Machine Tools builds robust machines to extracting specifications, HMTs sophisticated quality assurance facilities ensure products that are highly reliable and dependable. All the HMT machine tools manufacturing units are ISO 9001 accredited and are on a way of upgrading to ISO 9001-2000 accreditation.

HMT's Milestones


1953 1961 1962 1963 1965 1967 1971 1971 1972 1972 1973 1975 1975 1975 1978

Machine Tools I Machine Tools II Watch Factory I Machine Tools III Machine Tools IV Machine Tools V Tractor Division Die Casting Division Printing Machinery Division Watch Factory II Precision Machinery Division Machine Tools VI HMT (International) Ltd. Watch Factory III Watch Factory IV

Bangalore Bangalore Bangalore Pinjore Kalamassery Hyderabad Pinjore Bangalore Kalamassery Bangalore Bangalore Ajmer Bangalore Srinagar Tumkur

Karnataka KarnatakaKarnataka Haryana Kerala Andhra Pradesh Haryana Karnataka Kerala Karnataka Karnataka Rajasthan Karnataka Jammu & Kashmir Karnataka


1981 1981 1982 1982 1983 1985 1986 1991

HMT Bearings Limited Quartz Analog Watches Watch Factory V Specialised Watch Case Division Stepper Motor Division Ball Screw Division CNC Systems Division Central Re-conditioning Division

Hyderabad Bangalore Ranibagh Bangalore Tumkur Bangalore Bangalore Bangalore

Andhra Pradesh Karnataka Uttar Pradesh Karnataka Karnataka Karnataka Karnataka Karnataka


Vision and Mission

To establish as one of the worlds premier companies in the engineering field having strong international competitiveness To achieve market leadership in India through ensuring customer satisfaction by supplying internationally competitive products and services To achieve sustained growth in the earnings of the group on behalf of shareholders

Corporate Objectives & Goals


To encourage the modernization of Indian Industry through the supply of engineering goods and services of world class excellence

To maintain technological leadership through continuous efforts to update product technology and manufacturing methods

To globalize our operations by developing a mix of international markets and businesses

To ensure a satisfactory return on capital employed, to meet the growth needs and the aspirations of our stakeholders

To present an active, pleasant and productive working environment

Corporate Vision:
To be a leading GLOBAL ENGINEERING CONGLOMERATE focused on CUSTOMER DELIGHT in our fields of Endeavour.

Corporate Mission:
To establish as one of the worlds premier companies in the engineering field having strong international competitiveness To achieve market leadership in India through ensuring customer satisfaction by supplying internationally competitive products and services To achieve sustained growth in the earnings of the group on behalf of shareholders

Objectives & Goals


To encourage the modernization of Indian Industry through the supply of engineering goods and services of world class excellence To maintain technological leadership through continuous efforts to update product technology and manufacturing methods To globalize our operations by developing a mix of international markets and businesses To ensure a satisfactory return on capital employed, to meet the growth needs and the aspirations of our stakeholders To present an active, pleasant and productive working environment

Services Provided
Quality Products and Services. Cost effective solutions to the customer. Efficient after-sales-service through our Regional / Zonal offices. Supply of spares required within a reasonable time. Training to train the customer / his representatives on the utilization & maintenance of the product

Strive continuously to assure you of highest standard of service Strive to attain international standards to become globally competitive. Acknowledge all correspondence from you within a reasonable time of its receipt Adhere to the delivery schedules committed by us to you Strictly adhere to the standards, specifications stipulated in ISO-9001 Always maintain the highest ethical standards in all our endeavors, business and economic activities Always strive to achieve economy in all our products and services without compromising the quality standards


Always remain competitive through continuous improvement in our technology Always be honest and transparent and would like to be seen as honest.

Implement all the policies and directives of Central Vigilance Commission. Expectations from Customer
Be prompt and reasonable. Extend your cooperation in our entire endeavour. Be fair, honest and transparent in dealings. Provide detailed specifications. Comply with the Service / Maintenance instructions and regular preventive maintenance schedule. We shall work together to achieve the product to your satisfaction.

Business Strategy
In order to effectively compete in an increasingly open market, where each manufacturer of machine tools specializes in a particular family of machines, the Company has developed a comprehensive business strategy which aims to profitably grow the Companys market share in key growth segments and to maintain its leadership position in the Indian machine tools industry. The Company intends to pursue continued growth over the medium term by: Integrating production and increasing productivity through efficient use of existing capacity The Company has developed a plan to restructure its operations by consolidating the manufacture of certain products at certain locations based on the basic family of the machine and thus creating centers of excellence for a product. This will lead to greater synergy in production, planning and marketing.


Cost reduction measures

Based on the assessment of manpower required, HMT-MT had a voluntary separation package for its employees in 2000-01. 2,114 employees availed of the separation scheme in 2000-01. In 2001-02, 1,235 employees have availed of the scheme till December 31st, 2001. The Company proposes to continue rationalizing its manpower to bring it to optimal size, commensurate with the size of its operations. Increased research and development HMT-MT considers R & D as its significant strength. The R & D department provides in-house support to operations and development of new products with focus on technology absorption, improved designs, cost reduction in various plants, improvement of yield, quality of end products, reduction of wastes, etc. HMT-MT has been a leader in developing innovative solutions for the manufacturing sector for the past 5 decades.

Exploiting its large domestic sales and support network to increase market share HMT-MT believes that its extensive national marketing, sales and support network, with its focus on customer service, product quality, and reliability of supply, provides the Company with a significant competitive advantage over its competitors. The Company proposes to significantly increase the market penetration of its products by leveraging this extensive sales and support and distribution set-up.



HMT has three-tier structure of management. At the top is the council of Boards, which contains in addition to the Chairman and Managing director and full time functional Directors entrusted with finance and corporate planning, Personnel Director, Marketing , and also two senior Executive Director who are the Chief Executive of tools HMT plants in additions to these directors, the Corporate Board has three representatives of labor. Each unit also has separate Board of Management, chaired by its General Manager and staffed by the heads its functional departments. This board is the unit Board meets every month for reviewing decisions to fulfill the roles of the unit to achieve the corporate objectives. In between the two in the committee of management which may rightly be termed as the real working board of the enterprises. The internal members being the functional Directors and the Company Secretary . The Executive Committee of management is presided over by the Chairman and Managing Director. It meets every month to review the performance of each unit and to resolve the problems which are beyond the competence of the units.




Machine Tools
Product Range Turning Machines Grinding Machines Gear Manufacturing Machines Machining Centres Other Gpms Special Application Machines Diecasting Machines Presses Cnc Systems Precision Ballscrews




Marketing Network:
Wide marketing network manned by qualified & trained sales & service engineers Service outlet at customer doorsteps in major industrial locations. Customer training programs on Mechatronics in addition to regular machine-oriented training for machine tools. Manufacturing Units supplement customer support for tooled-up and high technology machine tools

Promotion Mix
Promotion Mix is the communication mix which deals with the personal and impersonal persuasive communication about the product or service of the manufacturer. Though companies communicate with their present and potential customers in wide variety of ways, the most distinguishable categories are two namely Personal and impersonal. HMT Machine Tools Ltd. uses Personal Selling way to communicate with there customers. Personal selling has an important role to play in communicating between a firm and its customers. The manager of HMT Machine Tools Ltd. himself goes in personal and meets the clientele. He gets to knows about the need of the customer and tells him the best product which will suit to him. All the queries of the customer are addressed by the sales representative. Negotiations, discounts etc. are also done in personal by the manager. HMT selling industrial products does not need to advertise or promote sales; it just needs a good sales representative to handle the sales department. Trade Fairs and Exhibitions are the only mean of promotion of the products by HMT. An Exhibition is the huge congregation of manufacturers and dealers under a single roof for displaying, demonstrating and selling their products. These


Exhibitions are mostly organized by organizations namely Chambers of Commerce and Indian Machine Tools Manufacturers Association (IMTMA).

Some upcoming Exhibitions are as follows:

IMTEX 2007 & TOOLtech 2007, The 13th Indian Machine Tool Exhibition with international participation rganised from 18-24 January 2007 at Bangalore International Exhibition Centre [BIEC], Bangalore.

Modern Machine Shop 2008, 25 - 29 April 2008, Pragati Maidan, New Delhi

TOOLtech 2008, 10th International Exhibition of Cutting Tools, Tooling Systems, Machine Tool Accessories, Metrology & CAD/CAM 15 18 February 2008 at Bangalore International Exhibition Centre [BIEC], Bangalore.









& 21 - 27 January 2010, Bangalore International Exhibition Centre [BIEC], Bangalore.


Primary Objective(s) The Basic objective of cash management is two fold: To meet the cash disbursement needs (payment schedule); To minimize funds committed to cash balances. These are conflicting and mutually contradictory and the task of cash management is to reconcile them.

Sample Size: The size of the sample was around 70 people considering the time constraint. Research Design: Data Collection: Data has been collected through both primary and secondary approach. Data Sources The research involved gathering Secondary data as well as Primary data. For the purpose two types of survey was conducted by me to collect the data Customer survey and


Consumer survey Primary Data Consumer survey was done to know their purchasing behaviour because they are the one who constitute the market and are the target of the business . In Insurance Industry untill and unless we have the knowledge of the consumer behaviour and factor which influence them to buy a paticular brand ,companies cannot focus upon the target market. Hence a consumer survey was done to know their wants, purchasing power, and buying habits in order to segment the market, and based on this consumer profile was identified. Secondary Data Secondary data regarding sales figures, promotional expenses and other related expenses was collected from the companys own record to analyse the impact on sales due to the running schemes and make cost benefit analysis.

Scope of the Study Both primary and Secondary data has been be used for the study. Primary data was collected through direct interaction with the companys finance and accounts department. If needed schedule/questionnaires would be devised to get the information on all the relevant areas of the study such as receivable management, inventory management, management of cash etc.

And I collected the data from the secondary sources comprising Annual Reports of the firm, other journals and periodicals.

Apart from the conducting this research works on the basis of this informations, various techniques of financial management e.g.,

comparative statement, trend analysis and ratio analysis etc. were used in the present study. To present a broad view so far the purpose of the analysis and to make it easy to understand the problem/concept of a few graphs and tables shall also be presented. In each chapter, the analysis has been compared with actual management practices of the company under study.

Limitation of the Study The authenticity of the suggestions and recommendations depend upon the rationality of the data provided to me. Have to rely upon the data supplied. Executives are not ready to part with the information beyond a limit.



Working Capital management is the management of assets that are current in nature. Current assets, by accounting definition are the assets normally converted in to cash in a period of one year. Hence working capital management can be considered as the management of cash, market securities receivable, inventories and current liabilities. In fact, the management of current assets is similar to that of fixed assets the sense that is both in cases the firm analyses their effect on its profitability and risk factors, hence they differ on three major aspects: 1. In managing fixed assets, time is an important factor discounting and

compounding aspects of time play an important role in capital budgeting and a minor part in the management of current assets. 2. The large holdings of current assets, especially cash, may strengthen

the firms liquidity position, but is bound to reduce profitability of the firm as ideal car yield nothing. 3. The level of fixed assets as well as current assets depends upon the

expected sales, but it is only current assets that add fluctuation in the short run to a business. To understand working capital better we should have basic knowledge about the various aspects of working capital. To start with, there are two concepts of working capital:


Gross Working Capital Net working Capital

Gross Working Capital: Gross working capital, which is also simply known as working capital, refers to the firms investment in current assets: Another aspect of gross working capital points out the need of arranging funds to finance the current assets. The gross working capital concept focuses attention on two aspects of current assets management, firstly optimum investment in current assets and secondly in financing the current assets. These two aspects will help in remaining away from the two danger points of excessive or inadequate investment in current assets. Net Working Capital: The term net working capital refers to the difference between the current assets and current liabilities. Net working capital can be positive as well as negative. Positive working capital refers to the situation where current assets exceed current liabilities and negative working capital refers to the situation where current liabilities exceed current assets. The net working capital helps in comparing the liquidity of the same firm over time. For purposes of the working capital management, therefore Working Capital can be said to measure the liquidity of the firm. In other words, the goal of working capital management is to manage the current assets and liabilities in such a way that a acceptable level of net working capital is maintained.


Importance of working capital management: Management of working capital is very much important for the success of the business. It has been emphasized that a business should maintain sound working capital position and also that there should not be an excessive level of investment in the working capital components.

As pointed out by Ralph Kennedy and Stewart MC Muller, the inadequacy or mis-management of working capital is one of a few leading causes of business failure. Current assets, in fact, account for a very large portion of the total investment of the firm.

Table showing Current assets as percentage of Total assets Year 2008 2009 2010 Percentage 31% 26% 35%


40 35 30 25 20 15 10 5 0 2008 2009 2010

It can be visualized from the table that in the first year of our study i.e. 2008 it was 31% which was reduced to 26% in the next year and in 2010 it is 35% shows fluctuating trend.

Determinants of Working Capital: There is no specific method to determine working capital requirement for a business. There are a number of factors affecting the working capital requirement. Some of the different factors are mentioned here below:-

Nature of business: Nature of business is an important factor in determining the working capital requirements. There are some businesses which require a very nominal amount to be invested in fixed assets but a


large chunk of the total investment is in the form of working capital. There businesses, for example, are of the trading and financing type... Size of business: It is another important factor in determining the working capital requirements of a business. Size is usually measured in terms of scale of operating cycle. The amount of working capital needed is directly proportional to the scale of operating cycle i.e. the larger the scale of operating cycle the large will be the amount working capital and vice versa. Business Fluctuations: Most business experience cyclical and seasonal fluctuations in demand for their goods and services. These fluctuations affect the business with respect to working capital because during the time of boom, due to an increase in business activity the amount of working capital requirement increases and the reverse is true in the case of recession. Production Policy: As stated above, every business has to cope with different types of fluctuations. Hence it is but obvious that production policy has to be planned well in advance with respect to fluctuation. No two companies can have similar production policy in all respects because it depends upon the circumstances of an individual company.

Firms Credit Policy: The credit policy of a firm affects working capital by influencing the level of book debts. The credit term is fairly constant in an industry but individuals also have their role in framing their credit policy. A

liberal credit policy will lead to more amount being committed to working capital requirements whereas a stern credit policy may decrease the amount of working capital requirement appreciably but the repercussions of the two are not simple. Availability of Credit: The terms on which a company is able to avail credit from its suppliers of goods and devices credit/also affects the working capital requirement. If a company in a position to get credit on liberal terms and in a short span of time then it will be in a position to work with less amount of working capital. Hence the amount of working capital needed will depend upon the terms a firm is granted credit by its creditors. Growth and Expansion activities: The working capital needs of a firm increases as it grows in term of sale or fixed assets. There is no precise way to determine the relation between the amount of sales and working capital requirement but one thing is sure that an increase in sales never precedes the increase in working capital but it is always the other way round. So in case of growth or expansion the aspect of working capital needs to be planned in advance. Price Level Changes: Generally increase in price level makes the commodities dearer. Hence with increase in price level the working capital requirements also increases. The companies which are in a position to alter the price of these commodities in accordance with the price level changes will face fewer problems as compared to others. The changes in price level may not affect all the firms in same way.


CIRCULATION SYSTEM OF WORKING CAPITAL In the beginning the funds are obtained by issuing shares, often supplemented by long term borrowings. Much of these collected funds are used in purchasing fixed assets and remaining funds are used for day to day operation as pay for raw material, wages overhead expenses. After this finished goods are ready for sale and by selling the finished goods either account receivable are created and cash is received. In this process profit is earned. This account of profit is used for paying taxes, dividend and the balance is ploughed in the business. Table showing Current Assets Turnover Ratio Year 2008 2009 20010 Average: 2.24 Ratio (in times) 1.78 2.98 1.98

3 2.5 2 1.5 1 0.5 0 2008




The ratio average is 2.24 times in the study period of 3 years. In 2009 current assets turnover ratio is highest one i.e. 2.98 during the 3 year study. Reasons being during this year company has achieved sales growth 44.36% over the previous year and additional activity needs more funds.

Ratios useful to analyze working capital management

(A) Efficiency Ratios




Ideal Ratio

1. Working Capital Turnover (times) 2. Current Assets Turnover (times) 3. Inventory turnover (times)










(B) Liquidity Ratio 1. Current Ratio 2.AcidTestRatio 3. Cash Ratio 2.12 1.15 0.57 1.80 0.98 0.08 2.41 1.03 0.05 2.0 1.0 0.5


Interpretation (Ratio Analysis)

The utilization rate of net working capital as depicted by working capital (C) Structural Health of Working Capital Ratio/Year 1. CA 2. CL 3. Cash to CA 4. Receivables to CA 5. Loans and Advances to CA 6. Inventory to CA 7. RM to Inventory 8. Stock spares to inventory 9. WIP to inventory 2008 0.31 0.15 0.27 0.27 0.15 0.42 0.44 0.12 0.06 2009 0.26 0.14 .04 0.50 0.19 0.38 0.46 0.14 0.08 0.32 2010 0.35 0.14 0.02 0.40 0.15 0.50 0.30 0.11 0.03 0.56

10. Finished Goods to Inventory 0.38

turnover ratio is fluctuating during the period. It shows that working capital has not been effectively used over the period of years except in the year 2009. As shown by current assets turnover ratio, the utilization of current


assets in terms of sales has shown a decreasing trend which shows that current assets has been effectively used to achieve sales. Again if we look at the efficiency with which individual elements of working capital have been utilized, the picture of inventory turnover is not very bright. Receivables turnover also shows a declining trend. Generally such a situation does not suit the company. As we look at the extent of liquidity of working capital, we notice that the ratio shows an increasing trend. This indicates improvement on the liquidity front. If we analyze the structural health of working capital, the proportion of current assets to total assets has been appropriate during this period. Our analysis above indicates the areas of concern to management in making best possible use of resources. Decreasing efficiency in the use of current assets hints of the possibility of problems in working capital management.

On further analysis, inventory constitutes a major proportion of total current assets. Among its various components, raw materials, stocks, spared and finished goods in particular need further analysis as here stand out to the problem areas.


Cash Flow Statement (2009-10)


Amount A ( in Lacs)


Amount B (in Lacs)

Proceeds from borrowings Sale of assets Total


Loss from operation


27.34 190.28

Change in cash

5.01 190.28

Summary of Cash Flow Analysis a) Cash from operation to total cash available

= 185.31/190.28 = 97.38% b) Cash from long term sources to total cash available

= 162.37/190.28 = 85.33%


Proceeds from sale of non-current assets to total cash

= 17 14/19028 = 0.90%


Schedule of Changes in Working Capital Particulars Amount (in lacs) Dec2009 Dec2010 Changes in Working Capital Increase (Debit) Current Assets Inventories Sundry Debtors Cash and Balances Other current assets 20.14 247.87 Current Liabilities Working capital (CA-CL) Increase in Working Capital 172.29 172.29 74.96 74.96 137.02 110.85 61.44 21.66 288.36 116.07 172.29 61.44 20.95 1.52 Bank 93.87 123.22 10.64 146.36 114.71 5.63 52.48 8.51 5.01 Decrease (Credit)


Fund Flow Statement (2009-10)


Amount A (in lacs)


Amount B (in Lacs)

Increase in loan Sale of asset Total

162.37 22.94 185.31

Increase in working capital Loss from operation 185.31

61.44 123.87

Summary of Fund Flow Analysis 1. 2. 3. Increase in net working capital 61.44 Funds from operations to finance permanent address (123.87) Ratio of fund flow from operations to total funds in the business (-)

123.87/85.31 = (66.85)

Interpretation (Fund Flow Statement) 1. Networking capital has been increased over the years, which has

increased liquidity 2. Company should take corrective actions to covert loss from

operation to funds from operation.


A semi-structured kind of questionnaire was designed which contain both open- ended and multiple choice questions. The questionnaire designed to know the potential of the customer and help as a successful programme visiting the offices and small business enterprises without pre-appointment also provided me with information about that they demand from a new bank where they would prefer to open an account. Profit & Loss Account for the year ended 31St Dec, 2009 Current Year 31st Dec. 09 (in lakhs) Income Sales Other Income 1,134.22 25.32 1159.54 Expenditure Materials consumed Personnel Expenses 738.73 87.3 526.15 70.36 785.65 21.33 806.98 Previous Year 31st Dec 08 (in lakhs)


Depreciation Financial Charges Excise duty Misc. Expenditure

30.01 26.72 130.87 18.33 1198.26

29.93 55.68 101.14 19.87 953.49 (146.51)

Loss for the year before extra ordinary (38.72) items and prior period adjustments Extra-ordinary items - Expenses on abandoned projects Assets w\off Pension liability Prior period adjustments Expenses of extraordinary items Loss bought forward from previous years Balance carried to the B/S (368.39) (5.14) (0.30) 44.16 (324.23) -

(2.15) (6.64) (1.50) 156.80 (167.43)



Balance Sheet as at 31 Dec 2009

As on 31st Dec 09(In Lacs) Source of Funds Shareholders funds Share capital Reserve and surplus 734.20 21.00 755.20 Loan Funds Secured loans Unsecured loans 198.09 0.04 198.13 953.33 Application of funds Fixed Asset Gross block Less: Depreciation 520.94 125.09

As on 31st Dec 08(In Lacs)



217.96 2.95 220.91 976.11

493.93 95.21


395.85 Capital W.I.P. Net book value Investments Current Assets, Loans and Advances Inventories Sundry Debtors Cash& Bank Balances Other current Assets Loans and advances 93.87 123.22 10.64 20.14 47.06 294.93 1.58 397.43 0.10

398.72 2.69 401.41 -

129.57 82.75 82.20 11.42 45.68 351.62


As at Dec 31 2009 Less: Current Liabilities Provisions Current Liabilities Provisions 137.02 15.73 152.75 Net current assets Miscellaneous Expenditure (Total extent not written off adjusted) Profit and loss 368.39 953.33 142.18 45.23

As at Dec 31.2008

143.68 8.56 152.24 199.38 51.09

324.23 1076.11


Profit & Loss Account for the year ended 31st Dec, 2010

Current Year 31 Dec 10 (In Lacs) Income Sales Other Income 903.92 34.09 987.04 Expenditure Materials Consumed Personnel Expenses Mfg Other expenses Dep / Amortisation Financial Charges Excise duty Mis Expenditure W/off 621.23 104.58 172.48 34.38 30.57 120.04 20.28 1224.32

Previous Year 31Dec 09 (In Lacs)

1134.22 25.32 1159.54

738.73 87.33 166.27 30.01 26.72 130.87 18.33 1198.26


Loss for the year before extra ordinary items and prior period adjustments Extra ordinary items: Expenses on abandoned project W/off Assets W/off Pension liability Prior period adjustments Loss after prior pd. Exp. & extra-ord. Items. Loss b/f from early years Less: Amt. Adjusted against Cap. Reduction300 Loss: c/f to B/S






-5.14 0.30 (44.16)

(368.39) (68.39)

(324.23) ---




Balance Sheet as at 31 Dec 2010

Sources Of Funds Shareholders Fund Capital Reserves & Surplus

31 Dec 10 (Lacs)

31 Dec 09 (Lacs)

434.20 21.00 455.20

734.20 21.00 755.20

Loan Funds Secured loans Unsecured loans Application of Funds Fixed Assets Gross Block Less: Dep. Net Block Capital work in progress inc. capital advances. 380.29 397.43 530.59 153.55 377.04 3.25 520.94 125.09 395.85 1.58 360.46 -198.09 0.04


Investments Current assets, Loans & Advances Inventories Sundry Debtors Cash & Bank Balances Other current Assets. Loans & Advances Less: Current liabilities & Provisions Liabilities Provisions Net Current Assets Misc. Expenditure (To the extent not w/off) Profit & Loss A/c Total:



146.36 114.71 5.63 21.66 44.39

93.87 123.22 10.64 20.14 47.06

116.07 14.11 130.18 47.43

137.02 15.73 152.75 45.23

185.27 815.66

368.39 953.33



CASH MANAGEMENT Cash is the important current asset for the operations of the business. Cash is the basic input needed to keep the business running on a continuous basis It is also the ultimate output expected to be realized by selling the service or product manufactured by the firm. The firm should keep sufficient cash, neither more nor less. Cash shortage will disrupt the firms operations while excessive cash will simply remain idle, without contributing anything towards the firms profitability. Thus a major function of the Financial Manager is to maintain a sound cash position. Cash is the money which a firm can disburse immediately without any restriction the term cash includes currency and cheques held by the firm and balances in its bank accounts. Sometimes near cash items, such as marketable securities or bank time deposits are also included in cash. The basic characteristics of near cash assets are that they can readily be converted into cash. Cash management is concerned with managing of:

i) ii) iii)

Cash flows in and out of the firm Cash flows within the firm Cash balances held by the firm at a point of time by financing deficit

or inverting surplus cash.


Sales generate cash which has to be disbursed out. The surplus cash has to be invested while deficit cash has to be borrowed. Cash management seeks to accomplish this cycle at a minimum cost. At the same time it also seeks to achieve liquidity and control. Therefore the aim of Cash Management is to maintain adequate control over cash position to keep firm sufficiently liquid and to use excess cash in some profitable way. The Cash Management is also important because it is difficult to predict cash flows accurately. Particularly the inflows and that there is no perfect coincidence between the inflows and outflows of the cash. During some periods cash outflows will exceed cash inflows because payment for taxes, dividends or seasonal inventory builds up etc. On the other hand cash inflows will be more than cash payment because there may be large cash sales and more debtors realization at any point of time. Cash Management is also important because cash constitutes the smallest portion of the current assets, yet managements considerable time is devoted in managing it. An obvious aim of the firm now-a-days is to manage its cash affairs in such a way as to keep cash balance at a minimum level and to invest the surplus cash funds in profitable opportunities. In order to resolve the uncertainty about cash flow prediction and lack of synchronization between cash receipts and payments, the firm should develop appropriate strategies regarding the following four facets of cash management.



Cash Planning: - Cash inflows and cash outflows should be planned

to project cash surplus or deficit for each period of the planning period. Cash budget should prepare for this purpose. 2. Managing the cash flows: - The flow of cash should be properly

managed. The cash inflows should be accelerated while, as far as possible decelerating the cash outflows. 3. Optimum cash level: - The firm should decide about the appropriate

level of cash balances. The cost of excess cash and danger of cash deficiency should be matched to determine the optimum level of cash balances. 4. Investing surplus cash: - The surplus cash balance should be properly

invested to earn profits. The firm should decide about the division of such cash balance between bank deposits, marketable securities and inter corporate lending.

The ideal Cash Management system will depend on the firms products, organization structure, competition, culture and options available. The task is complex and decision taken can affect important areas of the firm.


CASH MANAGEMENT TECHNIQUES & PROCESSES The following are the basic cash management techniques and process which are helpful in better cash management: Speedy cash collection: In managing cash efficiently the cash in flow process can be accelerated through systematic planning and refined techniques. These are two broad approaches to do this which are narrated as under: Prompt payment by customer: One way to ensure prompt payment by customer is prompt billing with clearly defined credit policy. Another and more important technique to encourage prompt payment the by customer is the practice of offering trade discount/cash discount.

Early conversion of payment into cash: Once the customer has makes the payment by writing its cheques in favor of the firm, the collection can be expedited by prompt encashment of the cheque. It will be recalled that there is a lack between the time and cheque is prepared and mailed by the customer and the time funds are included in the cash reservoir of the firm. Concentration Banking: In this system of decentralized collection of accounts receivable, large firms which have a large no. of branches at different places, select some of these which are strategically located as collection centers for receiving payment for customers. Instead of all the payments being collected at the head office of the firm, the cheques for a


certain geographical areas are collected at a specified local collection centers. Lock-Box System: The concentration banking arrangement is instrumental in reducing the time involved in mailing and collection. But with this system of collection of accounts receivable, processing for purposes of internal accounting is involved i.e. sometime in elapses before a cheque is deposited by the local collection center in its account. The lock-box system takes care of this kind of problem, apart from effecting economy in mailing and clearance times. Under this arrangement, firms hire a post office box at important collection centers. The customers are required to remit payments to lock-box. Slowing disbursements: A basic strategy of cash management is to delay payments as long as possible without impairing the credit rating/standing of the firm. In fact, slow disbursement represents a source of funds requiring no interest payments.

There are several techniques to delay payment of accounts payable namely (1) avoidance of early payments; (2) centralized disbursements; (3) floats. Avoidance of early payments: One way to delay payments is to avoid early payments. According to the terms of credit, a firm is required to make a payment within a stipulated period. It entitles a firm to cash discounts. If however payments are delayed beyond the due date, the credit standing may be adversely affected so that the firms would find it difficult to secure

trade credit later. But if the firm pays its accounts payable before the due date it has no special advantage. Thus a firm would be well advised not to make payments early i.e. before the due date. Centralized disbursements: Another method to slow down disbursements is to have centralized disbursements. All the payments should be made by the head office from a centralized disbursement account. Such an arrangement would enable a firm to delay payments and conserve cash for several reasons. It involves increase in the transit time. The remittances from the head office to the customers in distant places would involve more mailing time than a decentralized payment by a local branch. Float: A very important technique of slow disbursements is float. The term float refers to amount of money tied up in the cheque that have been written, but have yet to be collected and encashed. Alternatively, float represents the difference between the bank balance and book balance of cash of a firm. The difference between the balance as shown in the firms record and the actual bank balance is due to transit and processing delays. There is time lag between the issue of a cheque by the firm and its presentation to its bank by the customers bank for payment.

EVALUATION OF CASH MANAGEMENT PERFORMANCES To assess the cash management performance this phase is divided as follows: a) Size of Cash

b) Liquidity and Adequacy of cash c) Control of cash Size of cash balance (Rs. in Crores) Year 2008 2009 20010 Source: Annual report Cash (In Lacs) 82.20 10.64 5.63 Trend 100 -87.83 -93.15




Trend Cash

0 2008 -50






Size of sales (Rs. in Lacs) Sales Year 2008 2009 2010 Source Annual Reports 785.65 1134.23 903.92 100 44.36 15.05 Trend




Trend Sales




0 2008 2009 2010


(B) Liquidity and Adequacy of Cash:

One of the most important jobs of the Finance Manager is to maintain sufficient liquidity to enable the firm to pay off its obligations when they fall due. To test a firms liquidity and solvency we commonly use current and quick ratios. Traditionally 2:1 current ratio and 1:1 quick ratio are taken as satisfactory standards for the purpose. The former indicates the extent of the soundness of the current financial position of a firm and the degree of safety provided to the creditors, the later signifies the ability of a firm to settle all its current obligations on a particular date.

Current ratio and quick ratio

Year 2008 2009 2010

Current ratio 2.12 1.80 2.41

Quick ratio 1.51 0.97 1.03


Source: Annual Reports

3.5 3 2.5 2 1.5 1 0.5 0
2008 2009 2010
Quick Ratio Current Ratio

Our analysis clearly shows that the company has very sound position regarding liquidity and solvency. Further, all the ratios fluctuate throughout the period.

(C) Control of Cash: One of the major objectives of cash management from the stand point of increasing return on investment is to economize on the cash holding without impairing the overall liquidity requirements of the firms. This is


possible by effecting tighter controls over cash flows. The following ratio has been applied to assess the efficiency of cash control: Cash to Current Assets ratio Cash turnover ratio Cash to current liabilities ratio Cash to Current assets ratio Year 2008 2009 2010 Average: 9.43 Source: Annual Reports Cash to CA Ratio 26.89 4.29 1.95






0 2008 2009


Conclusion: It can be inferred from the above table that cash to current assets ratio is decreasing which shows dark position of liquidity, which ultimately affect the operational efficiency of the firm.

Cash to Current Liability Ratio (%) Year 2008 2009 2010 Average: 23.27 Source: Annual Reports Conclusion: Cash to current liability ratio shows the cash balance maintained by company at a certain point of time for meeting its current liabilities. The lesser the ratio, proves the efficiency of the company for maintaining liquidity at a minimum level of cash balance. It is reducing during the study period and is at the minimum level of 4.85% in the year 2010. Overall Conclusion: The analysis of financial data reveals that the company has very sound position regarding liquidity and solvency as shown by the current and quick ratios. The cash to current liabilities ratio is nearly on decreasing trend shows the efficiency of operations.

Cash to CL ratio 57.21 7.76 4.85

MANAGEMENT OF INVENTORY Inventories are the stock of the product made for sale by the company or semi finished goods or raw materials. Inventory of finished goods which are ready for sale is required to maintain smooth marketing operation. The inventory of raw material and work in progress is required in order to maintain an unobstructed flow of material in the production line. These inventories serve as a link between the production and consumption of goods. The aspect of management of inventory is especially important in respect to the fact that in country like India, the capital block in terms of inventory is about 70% of the current assets. It is therefore, absolutely imperative to manage efficiently and effectively in order to avoid unnecessary investment in them. Although to maintain low inventories may prove to be profitable but to maintain very low inventories may prove risky on the contrary. This aspect of management if tackled in a proper way may prove to be a boon its effective and efficient management would result in the maintaining of optimum level of inventories. At this level the profitability of the organization will not be jeopardised at the cost of inventory. Now from the above stated facts it is clear that maintaining of optimum level of inventory involves huge cost, so why should keep the inventories at all. Basically there are three main reasons for which inventories are stocked and they are:-



Transaction Motive: This motive lays emphasis on maintaining of

inventories in order to maintain a smooth and unobstructed supply of materials for the sales and production operations. 2. Precautionary Motive: This motive emphasizes on the stocking

goods in order to guard against the uncertainties of future i.e. unpredictable changes in the forces of demand, supply and other forces. 3. Speculative Motive: This motive influences the decisions

regarding the increase or decrease in the level of inventory in order to take advantage of price fluctuations.

A company should maintain adequate stock of materials for a continuous supply to the factory for an uninterrupted production. It is not possible for a company to procure raw material instantaneously whenever needed. A time lag exists between demand and supply of material. Also, there exists an uncertainty in procuring raw material in time at many occasions. The procurement of materials may be delayed because of factors beyond companys control e.g. transport disruption, strike etc. Therefore, the firm should keep a sufficient stock of raw material at a time to have streamline Other factors which may incite us to keep stock of inventories is the quantity discounts, expected rise is price. A sufficiently large inventory has to be maintained of finished goods so as to meet the fluctuating demands. If a close link is maintained between the sales and the production department then an organization can do with a

small inventory also. In the process, inventory is also necessary because production can not be instantaneous. But it should be seen that the size of production cycle should be small.

Composition of Inventory: Year Raw Material Semi Material Finished Goods Stores Spares & Scarp 2008 2009 2010 Average 44 46 30 40 6 8 3 5 38 32 56 42 12 14 11 12 100.00 100.00 100.00 100.00 Total

Conclusions: Table reveals the proportion of each component of inventory to total of inventory in percentage terms. On the opposite, the percentage share of finished goods in the total inventory has increased significantly during last 3 years of the study period. The percentage share of store/scrap/spares etc. is moving between 10-12%. The increasing share of finished goods is to be checked and controlled, that shows the blockage of goods at finished stage.


Inventory Turnover Ratio Year 2008 2009 2010 Average :74 days Inventory turnover ratio is generally regarded as indicator of inventory efficiencies. It establishes a relationship between the total sales during a period and average inventory hold to meet that quantum at 4.06 times, that signifies the slow moving of inventory. In other words, the stock held during 2010 is for 77 days as comparison of average at 74 days for the view of 3 years. Overall Conclusion: This can be concluded that overall composition includes the highest factor of finished goods and that is too on increasing trend. Moreover, the inventory level is maintained for 77 days for the year 2010 that is the highest during the study period. The to overall position of inventory is that adequate on following basis: The factor of finished goods in the composition of inventory in total is at higher level and also having an increasing trend. Ratio 4.06 6.61 4.76 In days 90 55 77


The stock is also very slow moving and the stock retention period is on fluctuating trend. The above two factors increases the cost of production and decreases the profitability, therefore, these should be taken in to consideration for better productivity and efficiency of operation.



Trade credit, the tool which as a bridge for movement of goods through production and distribution stages to customer, is a force in the present day business and a essential device. Trade credit is granted with a motive of protecting the sale from ones, competitors and attaching more of the potential customers. Trade credit is said to be extended to a customer when a firm sell its services or goods and does not receive the payment for them immediately. Thus trade credit creates receivable which refer to the amount which a firm is expected to collect in near future. The book debt or receivable which arise a result of trade credit have the following features: It involves a element of risk and hence should never to be fiddled with. As credit sale leave a sum to be recovered in future and future can never be the certainty, hence it is risky. It is based on economic value, while for the buyer, the economic value in goods passes immediately at the time of purchase, while the seller expects an equivalent value to be received later on. It represents futurity. The cash payments for the goods or services received by the buyer will be made in future. The management of receivable gain more importance in the view of the fact that more than one third of the total current assets is blocked in the

form of trade debtors. The interval between the date of sale and the date of payment is financed by working capital. Thus trade debtors represent the investment. As substantial amount are tied up as trade credit hence it requires careful analysis and proper management.

DEBTORS TURNOVER RATIO This ratio is calculated the effective utilization of funds involved in receivable. An effective credit management results in a higher turnover of accounts receivable.


Debtors Turnover Ratio Average collection period (in days)

2008 2009 2010

9.49 9.20 7.88

38 40 46


50 45 40 35 30 25 20 15 10 5 0 2008
Debtors Turnover Ratio



Average Collection Period (in days)


A substantial part of purchase of goods and services in business are on credit terms rather than against cash payment. While the supplier of goods and services tends to perceive credit as a lever for enhancing sales or as a form of non-price instrument of competition, the buyer tends to look upon it as a loaning of goods or inventory. The suppliers credit is referred to as Accounts payable, Trade Credit, Trade Bill, Trade Acceptance, commercial drafts of bills payable depending on the nature of the credit. The extent to which this buy-now, pay- later facility is provided will depend upon a


variety of factors such as the nature, quality and volumes of items to be purchased, the prevalent practices in the trade, the degree of competition and the financial status of the parties concerned. Trade credits or Payables constitutes a major segment of current liabilities in many business enterprises. And they primarily finance inventories which form major components of current assets in many cases.

TYPES OF TRADE CREDITS Trade credits or Payables could be of three types: Open Accounts, Promissory notes and Bills Payables. Open Account or open credit operates as an informal arrangement wherein the supplier, after satisfying himself about the credit-worthiness of the buyer, dispatches the goods as required by the buyer and sends the invoice with particulars of quantity dispatched, the rate and the total price payable and the payment terms. The buyer records his liability to the supplier in his books of accounts and this is shown as Payables on open account. the buyer is then expected to meet his obligations on the due date. The promissory notes are a formal document signed by the buyer promising to pay the amount to the seller at fixed or determinable future times. Where the client fails to meet his obligations as per open credit on the due date, the supplier may require a formal acknowledgment of debt and a


commitment of payment by a fixed date. The promissory note is thus an instrument of acknowledgment of debt and a promise to pay. Bills payable or commercial drafts are instrument drawn by the seller and accepted by the buyer for payment on the expiry of the specified duration. the bill or draft will indicate the banker to whom the amount is to be paid on the due date, and the goods will be delivered to the buyer against acceptance of the bill. The seller may either retain the bill present it for payment on the due date or may raise funs immediately thereon by discounting it with the banker. The buyer will then pay the amount of the bill to the banker on due date. DETERMINANTS OF TRADE CREDIT Size of the firm Industrial Credits Nature of Product Financial Position of Seller Financial position of the buyer Cash discounts Degree of risk Nature and Extent of competition


Evaluation of Payables Management: Creditors turnover ratio & Average Payment Period Year Creditors Turnover Ratio 2009 2010 Average: 80 days Source: Annual reports 3.95 5.33 Average Payment Period 92 68

Conclusion: Table shows that the minimum average creditor period is 68 days and maximum is 92 days. Table reveals the decreasing trend in average payment period which is not good for the company.



HMT brand Value. Extensive dealership and service network. Fully integrated plant in Pinjore. Support of HMT in terms of deploying latest manufacturing technology, providing engineering solution and maintenance back up for trouble-free running of tractors. Wide product range. HMT has experienced staff. It has adequate infrastructure, qualified manpower, office space and computer network to support its activities. As a Govt. concern, it enjoys the full support of Govt. Efficiency of HMT Tractors and Machines is better then other competitors. Its brand has been well accepted in the market.

Turnover mainly coming from single product Tractor division. Morale of employees is not high. Present market share other then in machine tool is very less. Less usage of media for marketing. Product-image among customer is not good. Old plant requires substantial modernization Financial health of company is poor.


Since it is a Govt. enterprise, so change in Govt. policies may affect the profitability.

It is the biggest plant (in terms of area) among Indias manufacturers of Tractors. Availability of cheap and liberal finance to consumers. Multipurpose machines will offer new market for the company. Free service camps are organized for the customer satisfaction. It has huge network of dealership all over the country. Provides good after sales services. Continuous growth in Tractor Industry in the Country.

Being a govt. undertaking its business may be affected due to change in govt. policy. Competition from other manufacture of transport vehicle. Not a good image of company among consumers. Slow down of expected demand of some of its products. Increased completion from domestic market as well as from international market. Lack of dealership in some cities.


The current liabilities of the company are decreasing continuously from three after year. But when compared to these, current assets are also decreasing year after year. Current ratio was not constant during these three years. 2007-08 and in 2008-09 less and in 2009-10 it was high. Current ratio of the company is comfortable for the company although it showed a fluctuate during the year by year. The company seems to be piling up its inventory position which has resulted in decrease and increase sales during the three year period. The debtors position shows an downward trend. Although as stated above, the sales are improving, it is better to reduce the debtors position. The cash balance position of the company shows a huge drop indicating that its inability to maintain liquid assets. Loans and advances position shows an upward trend Indicating amounts locked up in small advances. The share capital of the company is decrease for the three year period indicating that the company seems not to have any major expansion plans. Since the loss for the three year period is almost the same it indicates flat market conditions. The company seems to be discharging its secured loans out of its liquid assets. At the same time the company seems to be borrowing more unsecured loans in place of secured loans. The company fixed assets indicating that had no any major expansion plans over the three year period.


CONCLUSION In the last, I would like to say that the market position of HMT is not so good. As the company started 55 years back, it is competeting with new companies and holds largest share of the Indian market which still it is running in losses it shows poor performance of HMT workers and Management . But the company has to do something extra to bring good image in the minds of customers. Not only for new customer but for old customer also However according to the survey the Machines are good. however Machines are not performing bad in the market but to get a good position in the market it has to give some extra ordinary performance The new HMT Machines are performing well but due to its image of high price machine it will take some to get a place in customer mind .Consumer service should be increased so more customer can be attracted. Instead of opening more dealerships the company should work on providing better after sales services. It needs good publicity and marketing activities at the moment the only need to run things in a proper and arranged manner which would increase the sale in a positive manner.


1. System of lending cash credit/loans/ bills

The study group found that there was a substantial gap between the sanctioned limit of cash credit and the extent of their utilization. They recommended that the bank should strictly ensure that a review of all borrowers accounts, enjoying working capital credit limits of Rs 10 Lac and over from the banking system is made at least once a year. A working capital limit will include all fund-based limits for working capital purposes. It will verify the continued viability of the borrowers and also assess the need-based character of their limit. 2. Bifurcation of credit limits

Bifurcation of cash credit limits into a demand loan portion and a fluctuating cash credit component has not found acceptance either on the part of the banks or the borrowers. Such bifurcation may not serve the purpose of better credit planning by narrowing gap between sanctioned limits and the extent of utilization thereof. 3. Reduction in over dependence on bank finances

The need for reducing the over dependence of the medium and large borrowers both in private and public sectors on bank finance for their production / trading purposes is recognized. The net surplus cash generation on established industrial unit should be utilized partly at least for reducing borrowing for working capital purposes.


Increase in owners contribution

In order to ensure that the borrowers do enhance their contributions working capital and to improve their current ratio, it is necessary to place them under the second method of sending recommended by hand on committee which would give a minimum current ration of 1.33:1. As many of the borrowers may not be immediately in a position to work under the second method of lending the excess borrowings should be segregated and treated as working capital term loan which should be made repayable loan, it should be charged at higher rate of interest. 5. Separation of Normal, Non-Peak Level & Peak Level

Requirements While assessing the credit requirement, the bank should appraise and the separate limits or the normal non-peak level as also or the peak level or requirement indicating also the periods during which the separate limits would be extended to all borrowers having working capital of Rs. 10 lacs and above. One of the imp. Criteria for deciding such limit should be the borrowers utilization of cr. Limits in the past. 6. Temporary Accommodation through loan

If any ad-hoc or temporary accommodation is req. in excess of the sanctioned limit to meet unproven contingencies the additional

finance should be given, where necessary, through a separate demand loan A/C or a separate non-operable cash Cr. A/C. There should be a stiff penalty for such demand loan or non-operable cash cr. Portion, ablest 2% above the normal rate unless the RBI exempts such penalty. 7. Info. Systems

The non-submission of the returns in time is partly due to certain features in the forms themselves. Simplified forms have been proposed to overcome this prob. As the quarterly info. System is part and parcel of the revised style of lending under the cash cr. System, if the borrower does not submit the return within the prescribed time, he should be penalized by charging the whole outstanding in the A/C at a penal rate of int., 1% p.a. more than the contracted date for the advance from the due date of the return till the date of its actual submission.


Khan M.Y. and Jam P.K., Financial Management, Vikas Publishing, 2009 Khan , Jain (2008) MANAGEMENT ACCOUNTING Tata McGrow-Hill Publishing Company Limited, Third Edition. Kulkarni P.V., Financial Management, Tata McGraw Hill Publishing Company Ltd, 2009 Pandey, Financial Management, Vikas Publishing House Ltd. Eighth Edition. Kothari C. R. (2008) RESEARCH METHODOLOGY New age international Ltd, fifth edition pp.1-2, 31, and 95.

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