A STUDY ON WORKING CAPITAL1.1 Introduction about the Internship One of the most important areas in the day to day management of the firm is the management of working capital. Working capital management is the functional area of the finance that covers all the current accounts of the firm. It is concerned with management of the level of individual of current assets as well as the management of total working capital. Financial management means procurement of funds and effective utilization of these procured funds. Procurement of funds is firstly concerned for financing working capital requirement of the firm and secondary for financing fixed assets. 1.2 Study of working capital Ordinary, there term “working capital” stands for that part of the capital, which is required for the financing of working or current needs of the company. Working capital is the lifetime of every concern. Whether it is manufacturing or non- manufacturing one without adequate working capital, there can be no progress in the industry. Inadequate working capital means shortage of raw material, labour etc., resulting in partial current assets less current liabilities-has no economic meaning in the sense of implying some type of normative behavior. According to this line of reasoning, it is largely an accounting artifact. Working capital management, them, is a misnomer The working capital of the firm is not managed. The term describes a category of management decisions affects specific types of current assets and current liabilities. In turn, those decisions should be rooted in the overall valuation of the firm. 1.3Need for the study The pipes production serves as the index of the economic development of any country. Thus PVC pipes production is very vital from country’s agriculture’s point of view. The demand would be grown with increasing technologies and is likely to reach a staggering level in the decades to come. BGS INSTITUTE OF TECHNOLOGY, BG NAGAR Page 1 A STUDY ON WORKING CAPITAL On the other hand the price of the pipes as remained stagnant, because prices are determined market forces and presently production levels are greater than supply. A number of industries for the past of few years have been finding it difficult to solve the increasing problems of adopting seriously the management of working capital. Business concerns intent on developing their business have to use to be at most, their available resources for the development of the business, thereby enabling them profits. Due to inflationary situations and restrictions imposed on borrowing facility, the commercial institutions and manufacturing industrial units have been confronting and difficulties in meeting day to day financial needs. Hence effective management of working capital becomes the problem for such organization and industries. The purpose of study is to examine analyze and evaluate working capital management and its components in KARNATAKA SOAPS AND DETERGENTS LTD. 1.4 Objectives of the study To study the statement of changes in working capital To analyze the profitability liquidity position of the company To examine and evaluate cash receivables and inventory management performances 1.5 Scope of the study 1.6 Methodology adopted 1.7 Review of the literature 1.8 Limitations At most of the financial information was considered confidential, the access to the information was restricted The results of the study are limited information BGS INSTITUTE OF TECHNOLOGY, BG NAGAR Page 2 A STUDY ON WORKING CAPITAL Due to frequent and work load of the staff in the sufficient organization much time could not be by them project The project is based mainly secondary sources of information 2.1 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, energy problems and increase in cost of raw materials 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 dynamic process of change. More and more soap manufacturers are trying to capture a commanding market share by introducing and maintaining acceptable products. The soap industry in India faces a cut throat competition while multinational companies dominate the market. They are also facing severe threat from dynamic and enterprising new entrance especially during 1991- 1992. If we look back into the history of soaps and detergents, mankind knew about Esoap, when roasted meat over flowed on the glow in ashes. The lump like product was soap and had foaming and cleansing character. In 1192 A.D. the first patent for making soap was taken in London. THE INDIAN SOAP INDUSTRY SCENARIO The Indian has soap industry been dominated by handful of companies such as 1. Hindustan levers limited. 2. Tata oil mills 3. Godrej soaps private limited. 4. Recent entrants include- colgate Palmolive limited -proctor and gamble limited BGS INSTITUTE OF TECHNOLOGY, BG NAGAR Page 3 A STUDY ON WORKING CAPITAL -Nirma soaps limited -Wipro limited The Indian soaps industry continued to flourish very well and until 1967-68 but began to Stagnate. Soon it started to recover and experienced a short upswing in 1974. This Increases in demand can be attributed to: 1. Growth of population 2. Income and consumption increase 3. Increase in urbanization 4. Growth in degree of personal hygiene In India, the first soap company was established by North West Soap Company in 1897 at Meerut following the Swadeshi movement. From 1905 onwards few more factories were setup. They are, Mysore soap factory at Bangalore. Godrej soap factory at Bombay. Bengal Chemicals. Tata Oil Mills. Lever Brothers Company. THE INDIAN SOAP INDUSTRY SCENARIO BGS INSTITUTE OF TECHNOLOGY, BG NAGAR Page 4 A STUDY ON WORKING CAPITAL The Indian soap industry has been dominated by long time with number of companies such as, Hindustan Levers Limited. Tata Oil Mills Limited. Godrej Soaps Private Limited. The Indian soap industry continued to flourish very well until 1967-1968, but began to stagnate and soon it started recovering. In 1974 it experienced a short upswing. This increase in demand is due to, Growth in population. Increase in Income and consumption. Urbanization. Growth in degree of personal hygiene. Soap manufacture has two classifications namely, Organized sectors. PRESENT STATUS: Market scenario: Indian is the ideal market for cleaning products. The countries per capita consumption Of detergent powders and bars stands at 1.6kg and soap at 543gms Hindustan lever, which heralds 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 al PROBLEMS OF SOAPS AND DETERGENTS INDUSTRY BGS INSTITUTE OF TECHNOLOGY, BG NAGAR Page 5 A STUDY ON WORKING CAPITAL Industry faces some problems due to increase in the cost of raw material. PROBLEMS OF KSDL Soap industry has some problems in case of raw materials. but even range emotions within that outlining framework. The major ingredients are soap ash. 2. benzene and sodium. In recent times.5 to 2 lakh tons and is met through imports. Mahendra Singh Dhoni. to ensure quality and also prevent piracy and unauthorized use by other manufacturers. The demand supply gap for vegetable oil is 1. HISTORY BGS INSTITUTE OF TECHNOLOGY. The demand and supply gap of vegetables oil is 1. The major ingredients like soda ash. linear alkyl. This soap has been manufactured since 1916 when Nalvadi Krishna raja Woodier. Mysore Sandal Soap is the only soap in the world made from 100% pure sandalwood oil. MARKET SCENARIO India is the ideal market for cleaning products. In 2006. the Indian cricketer was selected as the first brand ambassador of the Mysore Sandal Soap.5 to 2lakh and is met through imports.2 COMPANY PROFILE Mysore Sandal Soap is a brand of soap manufactured by the Karnataka Soaps and Detergents Limited [KS&DL]. The Indian soap market is pseudo in nature and it is amazingly complex being segmented not only on the basis of price benefits. BG NAGAR Page 6 . the king of Mysore set up the Government Soap Factory in Bangalore. a company owned by the Government of Karnataka in India. caustic soda and soap ashes in the cheaper varieties of soaps are quite high. The main motivation for setting up the factory was the excessive sandalwood reserves that the Mysore kingdom had which could not be exported to Europe because of the First World War. In 1980. linear alkyl benzene and sodium triply phosphate poses number of serious in terms of availability. KS&DL was incorporated as a company by merging the Government Soap Factory with sandal oil factories at Shivmoga and Mysore. Tripoly phosphate poses number of serious problems in terms of availability. KS&DL owns a proprietary geographical indication (GI) tag on the Mysore sandal soap which gives it intellectual property rights to use the brand name. large reserves of sandalwood were left over because they could not be exported due to the war. It was also one of the major exporters of the wood. In order to make good use of these reserves. which uses original perfume sandalwood in the manufacturing of Mysore Sandal Soaps. Detergents. Sir. Agarbathis and Talcum powder. started manufacturing soaps under the brand name Mysore Sandal Soap using sandalwood oil as the main ingredient.Visweshwaraiah and established the Government Soap Factory in Bangalore. BG NAGAR Page 7 . In 1980. these factories came under the jurisdiction of the Government of Karnataka. Nalvadi Krishnaraja Wodeyar.A STUDY ON WORKING CAPITAL In the early 20th century. Today the company produces varieties of products in toilet soaps. The company was registered as a Public Limited Company. Mysore Sandal Soap is the No. During the First World War.M. RENAMING OF THE COMPANY On October 1st 1980. most of which were exported to Europe. KS&DL has been built up with tradition for the quality of its products. the Mysore kingdom in India was one of the largest producers of sandalwood in the world. A factory to distill sandalwood oil from the wood was setup at Mysore in the same year. In 1944. After the unification of Karnataka.3 Promoters Sales department Production department Finance department Human resources management Research and development BGS INSTITUTE OF TECHNOLOGY. another sandalwood oil factory was setup in Shivmoga. the Government Soap Factory was renamed as “KARNATAKA SOAPS AND DETERGENTS LIMITED”. the Government decided to merge these factories and incorporate them under a company named Karnataka Soaps and Detergents Limited. The Karnataka state is the original home of the sandal oil. This factory which was set up in 1916. the king of Mysore took the advice of his diwan.1anywhere in the world. 2. BGS INSTITUTE OF TECHNOLOGY. To supply the products at most reasonable and competitive rate. TRANSPARENCY. This is reflected in the form of a well conceptualized and cogent blue print called VISION 2013.4 VISION. The Vision of the KS&DL is embodied in the following statement:"KARNATAKA SOAPS & DETERGENTS LIMITED WILL LEVERAGE LATEST SOAP MANUFACTURING TECHNOLOGY AND INFORMATION TECHNOLOGY BY IMBIBING PROFESSIONAL MANAGEMENT TECHNIQUES TO IMPROVE ITS FUNCTIONAL ACTIVITIES. To build upon the reputation of Mysore Sandal Soap based on pure sandal oil. BUSINESS AND TO TRANSFORM ITSELF INTO A MODERN. BG NAGAR Page 8 . To attain self reliance.A STUDY ON WORKING CAPITAL Re-engineering Marketing department 2. To build upon the reputation of Mysore Sandal Soap based on pure sandal oil. OBJECTIVES To promote and uphold its image as a symbol of traditional products. MISSION AND OBJECTIVES Vision Statement : Karnataka Soaps & Detergents Limited has a clear Vision for all round development of the Company. To promote purity and quality product To maintain the brand loyalty of its customers. The VISION 2013 sets the goals and suggests the strategies and plans necessary to achieve the Vision. PROFESSIONAL ORGANIZATION IN THE FMCG MARKET IN INDIA AND ALSO TO SPREAD ITS FRAGRANCE IN THE FMCG GLOBAL MARKET". MISSION STATEMENT To serve the national economy. It is continuing the tradition of excellence for over eight decades. 125 Mysore Sandal Classic Soap 75 Mysore Sandal Gold Soap 75. 125 Mysore Sandal Baby Soap 75 Mysore Special Sandal Soap 75 Mysore Rose Soap 100 Mysore Sandal Herbal Care Soap 100.A STUDY ON WORKING CAPITAL To maintain the brand loyalty of its custom 2. BG NAGAR Page 9 . TOILET SOAPS NAME OF THE PRODUCT UNITS OF GRAMS Mysore Sandal Soap 75. Agarbathis and Sandalwood oil. using only the best East Indian grade Sandalwood oil & Sandalwood soaps in the world. The products produced at KS&DL are the Soaps. Detergents. 125 Mysore Jasmine Soap 100 Wave Soap 100 Mysore lavender Soap 150 Mysore Sandal bath tablet 150 Mysore Sandal Classic Bath Tablet 150 Mysore Jasmine Bath Tablet 150 Mysore Special Sandal Tablet 150 Mysore Sandal rose Tablet 150 Mysore Sandal Guest Tablet 17 Mysore Sandal Millennium 150 BGS INSTITUTE OF TECHNOLOGY.5 PRODUCT AND SERVICES PROFILE KS&DL is the true inheritor of golden legacy of India. A STUDY ON WORKING CAPITAL DETERGENT NAME OF THE PRODUCT UNITS IN GRAMS Mysore Detergent Powder 1000 Mysore Detergent Powder 500 Mysore Detergent Cake 125 Mysore Detergent Cake 2 TALCUM POWDER NAME OF THE PRODUCT UNITS IN GRAMS Mysore Sandal Talc 20.200. BG NAGAR Page 10 .400 AGARBATHIS BGS INSTITUTE OF TECHNOLOGY.100.300 Mysore Sandal Baby Talc 100.50. MYSORE SANDAL SOAP b. BG NAGAR (75gms. MYSORE SANDAL BATH TABLET c.125gm (150gms) (75gms) Page 11 . MYSORE SANDAL BABY SOAP BGS INSTITUTE OF TECHNOLOGY.A STUDY ON WORKING CAPITAL Paraijata Alif Laila Meditation PRODUCT RANGE FROM THE HOUSE OF MYSORE SANDAL SOAP a. THREE-IN-ONE GIFT PACK – (SJR) 3TABS (150gmseach) e.A STUDY ON WORKING CAPITAL d.125gms) Page 12 . BG NAGAR (100gms. MYSORE ROSE SOAP BGS INSTITUTE OF TECHNOLOGY. MYSORE SANDAL GOLD SOAP f. SIX-IN-ONE GIFT PACK 6TABS (125GMS EACH) (125GMEACH) MYSORE LAVENDER SOAP -150 GMS i. MYSORE SANDAL GOLD SIXER 6 TABS h. MYSORE HERBALCARE (75GMS) (15GMS. 75GMS.A STUDY ON WORKING CAPITAL g. BG NAGAR Page 13 . MYSORE SANDAL CLASSIC SOAP j. 100GMS) BGS INSTITUTE OF TECHNOLOGY. BG NAGAR (150GMS) Page 14 . MYSORE JASMINE SOAP (75GMS.A STUDY ON WORKING CAPITAL k. 100GMS) MYSORE SANDAL MILLENNIUM BGS INSTITUTE OF TECHNOLOGY. BGS INSTITUTE OF TECHNOLOGY. The product is available in variants like . while wearing. they provide the ultimate washing powder.busters for effective removal of toughest dirt on clothes and to give freshness with mild aroma all the day. BG NAGAR Page 15 .A STUDY ON WORKING CAPITAL DETERGENTS KSDL also manufacture high quality detergents applying the latest spray drying technology with well balanced formulation of active matters and other builder. Sensor Detergent Powder (1kg/2kg) Mysore Detergent Powder (1kg/500gms) Mysore Detergents Bar (250gms) Mysore Detergent Cake (125gms/250gms) MYSORE DETERGENT CAKE Mysore Detergent Cake is formulated with special dirt .150gms and 250gms under the brand name of MDC. JASMINE REGULAR b.A STUDY ON WORKING CAPITAL AGARBATHIS a. MEDITATION SANDAL c. NAGA CHAMPA BGS INSTITUTE OF TECHNOLOGY. BG NAGAR Page 16 . M. SIR. ROSE REGULAR e. BG NAGAR Page 17 .A STUDY ON WORKING CAPITAL d.V-100 f. JASMINE ROLLS SANDALWOOD OIL BGS INSTITUTE OF TECHNOLOGY. BG NAGAR Page 18 .A STUDY ON WORKING CAPITAL POWDERS a. MYSORE SANDAL BABY POWDER MYSORE SANDAL ROOM FRESHNER BGS INSTITUTE OF TECHNOLOGY. MYSORE SANDAL TALCUM POWDER b. BG NAGAR Page 19 .A STUDY ON WORKING CAPITAL MYSORE SANDAL DHOOP MYSORE SANDAL BILLETS BGS INSTITUTE OF TECHNOLOGY. BG NAGAR Page 20 .KLEENOL WAVE COLOGNE POWDER LIQUID SOAP BGS INSTITUTE OF TECHNOLOGY.A STUDY ON WORKING CAPITAL LIQUID DETERGENT . GEN. OFFICER OFFICER SR. D] ASST. JR.OFFICER SENIOR ASSTS JR. BGS INSTITUTE OF TECHNOLOGY.MGRS CANTEEN VMO ASS.A STUDY ON WORKING CAPITAL 2.OFFICER ASST.MGR JR.MGR [HRD] MGR [HRD] FIRST AID TIME OFFICE ASS.6 AREAS OF OPERATION HUMAN RESOURCE DEPARTMENT STRUCTURE OF HUMAN RESOURCE DEPARTMENT MANAGING DIRECTOR [M. BG NAGAR Page 21 . ASSTS Cooks ATTENDER Helpers 01 M.D Managing Director 02 ASST.MGR Assistant General Manager [HRD] 03 MGR [HRD] Manager [HRD] 04 ASST. reporting and budgeting is the part of human resource management. BGS INSTITUTE OF TECHNOLOGY.ASSTS ATTENDER SR. FUNCTIONS OF HUMAN RESOURCE DEPARTMENT Recruitment and Selection. OFFICER [HRD] Junior Officer [HRD] 09 SR.MGR Assistant Manager 05 LWO Labor Welfare Officer 06 VMO Visiting Medical Officer 07 OFFICER [HRD] Officer [HRD] 08 JR. BG NAGAR Page 22 . organizing. directing. staffing.A STUDY ON WORKING CAPITAL HELPER SR. coordinating.GEN. ASSTS Senior Assistants 10 ATTENDER Attender 11 COOKS Cooks 12 HELPERS Helpers Luther Gulick highlighted “PODSCORB” which stands for planning. Training and Development. Maintain of SC/ST roster. Compilation of periodical report to various statutory authorities. Study on absenteeism and suggesting measures. Industrial relations. Performance appraisal. Wage and Salary administration. Disciplinary action. Maintenance of manpower inventory. Coordinating dispute cases before conciliation labor court and other court. character and attitude. Grievance handling. BG NAGAR Page 23 . Study on labor turnover. Welfare measures. Maintain personnel records. Verification of cash certificate. MANPOWER DETAILS Group Bangalore Sandalwood oil Marketing division branches [Mysore] Duty paid Total gowdon [Shivmoga] Executives 78 08 53 02 141 Supervisors 49 08 15 _ 72 Workers 523 28 36 14 601 Total 650 44 104 16 814 BGS INSTITUTE OF TECHNOLOGY.A STUDY ON WORKING CAPITAL Promotion and Transfer. 500 will be paid as memento to retiring employees. Death relief fund: Rs. Family travel allowance: This allowance is paid at the rate of Rs. Conveyance allowance: The conveyance allowance of Rs.00pm to 10.00am General Shift 9. BG NAGAR Page 24 .1.000 per employee which includes spouse and two children. Washing allowance: The company provides two sets of uniform once in a year. 000 will be paid to the nominee in case of death of an employee.00pm to 6.00am to 2.30pm.30pm The lunch time is from 12. 50. The shift timings are as follows.00pm to 12. With regards to hospitalization treatment the company has taken medical claim policy from insurance company for a sum of Rs.500 per employee per year who has put a minimum three years of service. Memento to retiring employee: Rs. BGS INSTITUTE OF TECHNOLOGY. A sum of Rs.30.680 per month per worker is extended.25 and Rs.00pm Second Shift 2.00pm Third Shift 10.2.A STUDY ON WORKING CAPITAL BENEFITS PAYABLE TO THE EMPLOYEES Shift allowance: There are three shifts and one general shift. Every Sunday is rest day for the employees. First Shift 6.500 per month will be paid per employee towards domiciliary treatment. Medical reimbursement: Benefit to non-ESI employees a sum of Rs.35 per day is paid to workers for second and third shift respectively.50 per month is paid to every worker. For this a washing allowance of Rs.30am to 5. No allowance is paid to the first shift workers. BG NAGAR Page 25 .NO GROUP REVISED PAY SCALE 01 I 5140-110-1690-140-6390-170-7240-200-8240 02 II 5250-110-5690-140-6360-170-7240-200-8240-240-9440 03 III 5690-140-6390-170-7240-200-8240-240-9440-280-10840 04 IV 5970-140-6390-170-7240-200-8240-240-9440-280-10840-33012490 05 V 6110-140-6390-170-7240-200-8240-240-9440-280-10840-33012490-400-14490 06 VI 6390-170-7240-200-8240-240-9440-280-10840-330-12490-40014490-500-15990 07 VII 7240-200-8240-240-9440-280-10840-330-12490-400-14490-50017990 08 VIII 8240-240-9440-280-10840-330-12490-400-14490-500-17990-60019190 BGS INSTITUTE OF TECHNOLOGY.A STUDY ON WORKING CAPITAL PAY SCALE OF UNIONISED EMPLOYEES SL. MANAGER 22125-525-22650-600-26250-675-30300 07 GEN. She sees that every employee is satisfied with the job. GEN.MANAGER 14050-350-14400-400-16800-450-19500525-22650-600-25050 04 MANAGER 18150-450-19500-525-22650-600-26250675-26925 05 ASST. RECRUITMENT Recruitment will be done by newspapers. BG NAGAR Page 26 . MANAGER 24450-600-26250-675-30300-750-31800 08 DIRECTOR 26250-675-30300-750-34800-850-36500 DUTIES OF A MANAGER Maintenance of attendance book of employees and various departments. internet and consultancy and through employees. For executives’ staffs.A STUDY ON WORKING CAPITAL PAY SCALE OF OFFICERS SL. recruitment will be done through newspapers.NO DESIGNATION REVISED PAY SCALE 01 JR. MANAGER 20025-525-22650-600-26250-675-28275 06 DY. BGS INSTITUTE OF TECHNOLOGY. Attending the problems faced by the workers while working. Promotion or demotion of labors according to their quality of their work. through employees for workers. GEN.OFFICER 10000-100-10500-300-12300-350-14400400-16800-450-18150 02 OFFICER 10800-300-12300-350-14400-400-16800450-19500-525-20025 03 ASST. S. TRAINING Training will be given to the new workers for 40 days.L. BG NAGAR Page 27 . then they will be placed for batches. FINANCE DEPARTMENT STRUCTURE OF FINANCE DEPARTMENT MANAGING DIRECTOR GENERAL MANAGER DEPUTY GENERAL MANAGER ASSITANT GENERAL MANAGER BGS INSTITUTE OF TECHNOLOGY. Workers should have to bring age proof like S.C marks card. if the worker is trained up well. For the executive staff the selection process will be done in the head office.A STUDY ON WORKING CAPITAL SELECTION Workers will be selected by daily according to the requirement for the company. IDBI. It identifies the source of finance where to borrow i. IRBI. It has abundant of function which can be enumerated as follows: Effective funds management which is inverted in beneficial projects. OFFICERS SR. This department is concerned with proper utilization of cash.e.ASSITAN T JR.A STUDY ON WORKING CAPITAL BILLS/COS TING JR. BGS INSTITUTE OF TECHNOLOGY. It is concerned with managerial decision making. Systematic approach to working capital management. Wealth maximization. Obtaining trade credit. Corporation bank etc. Preparation of cash budgets.OFFICE RS SR. BG NAGAR Page 28 . Profit maximization.ASSIT ANT SR.ASSITA NT OFFICER SUPER [COSTING] SR.ASSITANT Finance is the life blood of every organization.ASSITAN T JR. Decision making regarding fixing of cash account.ASSITAN T JR. ICICI.ASSITAN T CHIEF MANAGER A/CS AM PA TO GM SUPER [A/CS] JR. BG NAGAR Page 29 . cost control it also help in taking decision.A STUDY ON WORKING CAPITAL Pricing of raw materials and valuation of stores. Managing short and long term receivables and payables. COSTING When a company does costing it ensures proper fixation of selling price of the product. AUDIT DEPARTMENT KS&DL audit wing is headed by internal auditor. Issuance and redemption of ownership and creditor ship securities [shares and debentures] Safe custody of funds and securities. OBJECTIVES Planning for short term and long term financial requirements of the organization. Providing top management with information on current and prospective financial conditions of the business of the enterprise as a basis for policy maki PRODUCTION DEPARTMENT BGS INSTITUTE OF TECHNOLOGY. Cash planning and credit management. To protect financial interest of the company. After the auditor’s monitor everything they give report which is helpful to the company. it also comply with requirements for central excise and income tax purposes. Auditing is vital for the company as it facilitates verifying of all the books of account by trial balance. KS&DL use process costing as the production mechanism is systematic it involves addition of a lot of ingredient in the manufacturing. Managing capital both long term and short term. A STUDY ON WORKING CAPITAL STRUCTURE OF PRODUCTION DEPARTMENT GENERAL MANAGER SENIOR MANAGER MANAGER MANAGER MANAGER DEPUTY MANAGER WORK MANAGER SENIOR ENGINEER ENGINEER WORKERS KS&DL has three production plants. Fatty Acid Plant. BG NAGAR Page 30 . They are. BGS INSTITUTE OF TECHNOLOGY. 1. The plant has a capacity to process 10. KS&DL’s soap plant has its uniqueness that it has the capacity to process as many as ten different varieties of soap simultaneously. DETERGENT PLANT It has installed capacity of 10. WORK FLOW MODEL SILOS (Silos are closed chambers) Soaps noodles BGS INSTITUTE OF TECHNOLOGY. The high speed auto wrapper has the capability to handle the soaps of virtually all size and shape. The sophisticated plant from Italy has a wholly integrated straight line facility that links up process sequence for higher productivity. It is also obtained and used for soap making.000mt of oil and fats. BG NAGAR Page 31 . 3.000 tons per annum. FATTY ACID PLANT The basic raw materials. SOAP PLANT The soap plant is one of the largest production plants in the country with an installed capacity of 26. powder and a syntax plant for detergent cakes and bars. It produces industrial detergent which is used in the formulation of wet table pesticide powders for crop protection. It is a stream line flow through right from raw material preparation to wrapping stage the line collation with the built in facility for continuous fat bleaching and saponification. Detergent Plant. oils and fats undergo the splitting and refining process including hydrogenation at the fatty acid plant. To produce spray dried. Soap Plant.A STUDY ON WORKING CAPITAL 2.000 tons per annum. ASST Page 32 .ASST JR.MG R SR.MG ASST.ASST ASST.OFFIC JR.MG ASST. GENERAL MANAGER PRODUCT PRODUC MANAGE T BGS INSTITUTE OF TECHNOLOGY. GENERAL MANAGER MGR [MRIS] ASST. BG NAGAR R [DET] MANAGE R OFFICER SR.ASST JR.A STUDY ON WORKING CAPITAL Container mixer Simplex plodder It becomes noodles Millin It becomes soap ribbons Duplex plodder Cutting machine Cakes are led Stamping machine Wrapping machine Led through the conveyor belt MARKETING DEPARTMENT STRUCTURE OF MARKETING DEPARTMENT MANAGING DIRECTOR GENERAL MANAGER DEPUTY GENERAL MANAGER ASST. BG NAGAR Page 33 .ASST JR.OFFI CER MGR [SALES] ASST. BGS INSTITUTE OF TECHNOLOGY.OFFICE R SR.ASST The company main products are soaps and detergents which are sold in different parts of India. The role of each branch is to ensure that the sales activities are under their control.A STUDY ON WORKING CAPITAL JR. There are depots at various places of the country which are controlled by six branches.MGR OFFICER JR. Madurai. Ananthapur Mumbai Bhiwandi. Cochin Hyderabad Vijayawada. Pune Kolkata Cuttack.A STUDY ON WORKING CAPITAL BRANCH DEPOTS Bangalore Hubli. BG NAGAR Page 34 . Patna. Gauhati Delhi Jallander FUNCTIONS OF MARKETING DEPARTMENT Marketing mix: It is the policy adopted by the manufacturers to get success in the field of marketing. Chennai Salem. This all totally done by KS&DL both marketing and research and development department. Product policy: It includes both the development and improvement produced and existing products. Sales and Promotion: It takes necessary steps for promoting its products. Ahmedabad. Raichur. Distribution policy: The manufactured product of KS&DL is supplied to the various depots. EXPORTS BGS INSTITUTE OF TECHNOLOGY. Germany. Saudi Arabia. BG NAGAR Page 35 . Africa. Italy. USA. France. Srilanka. Japan. Malaysia.A STUDY ON WORKING CAPITAL KS&DL export their products to different parts of the world they are. BGS INSTITUTE OF TECHNOLOGY. Singapore. Berlin. Kenya. Canada. Australia. ASST OFFICER [CHE & OILS] SR. ASST [MISC] SR.A STUDY ON WORKING CAPITAL UK MATERIALS DEPARTMENTSTRUCTURE OF MATERIALS DEPARTMENT DEPUTY GENERAL MANAGER MGR [PACKING & ENGG] JR.MG R [ENGG] JR. Maintaining continuous flow of materials.ASS T JR.ASST [PERFUM E] ASST.ASST [OILS & CHEM] WORKER S FUNCTIONS OF MATERIALS DEPARTMENT 1.OFFI CER [PACKIN SR. BGS INSTITUTE OF TECHNOLOGY. BG NAGAR Page 36 . Again it is also not a simple relationship between strategy and structure. and shared values are called the “software”. Growth of the organization. Maintaining ethical organization. The complex relationship is diagrammatically presented below. SKILLS The term “skills” includes those characteristics. BG NAGAR Page 37 . style. The next four – style skills. staff. 3. the kind of people in the BGS INSTITUTE OF TECHNOLOGY. although strategy is also a critical aspect. Packing materials section. Effective control of inventories. which people use to describe a company. 5. These are developed over a period of time of the result of the interaction of a number of factors performing certain tasks successfully over a period of time. In their view effective organizational change may be understood to be a complex relationship between strategy. Organization have strengths in a number of area but their key strengths are dominant skills are few. Perfumery and aromatically section 3. Coordination. The first three elements-strategy. organization change is not simply a matter of structure. skills & shared values. 5. It has been divided into five sections as follows. Chemical section. According to Waterman. structure &system are considered the “hardware” of success. system.A STUDY ON WORKING CAPITAL 2. 4. Miscellaneous and Engineering section. Oil and fats section. 4. 1. although structure is significant variable in the management of change. 2. structure. Authority is given to unit in-charge to take decision in day-to-day minor matters & other urgent matters. The business paradigms define a company’s position in the market place with respect to customers. technology and products. the external environmental influence etc. STYLE OF MANAGEMENT: Decision-making is centralized with the head office. the management systems. meetings are held to seek opinions of top management & various department manager & the decisions are taken & implemented. The employees of KS&DL have different skill. Decision-making is co-ordinate & done with wide consultations of top management of department manager’s consultation which gives best possible gains. Strategy formulation entails a search for a different frame of reference. As it is common in big organizations. There are two types of paradigms that apply to management. It is the quest for a new business paradigm. Decision-making depends on the authority & responsibility conferred on each individual & thus it’s distributed based on designation & position held. this may be due to their experience in the place of work. more than attempting to answer them.A STUDY ON WORKING CAPITAL organization. namely the business and the organizational or managerial paradigms. the top management style. This cannot be generalized skill among them. Employee’s skills in an organization will be unique. which are relevant for their work. he also controversies between departments which can be solved by discussions and by conducting some interactive programs. and the similarity may also due to influence of the similar culture. structure. BG NAGAR Page 38 . Hence when organization makes a strategic shift it becomes necessary to consciously build new skills. However every person according to his traits possesses his own talents and special characters. BGS INSTITUTE OF TECHNOLOGY. In important matters. STRATEGY: Strategic planning is about asking questions. creams and shampoos. Thus company has embraced an extended role of trusteeship that reaches beyond the assets reflected in the balance sheet to encompass societal assets. STAFF: As any employer. teamwork and abiding concern for stakeholders are at the heart of your company’s value system. and guide strategy formulation and purposive action. soaps detergents. Their future plans include launching of new products. Introduction of cost effective substitutes without compromising on quality Development of new perfumes. 2. the company adopts to achieve its objectives in a competitive situation. Career advancement related to performance and experien SHARED VALUES: Values: Values refer to the institutional standards of behavior that strengthen commitment to the vision. Agarbathies.A STUDY ON WORKING CAPITAL Strategy is a choice of direction and action. profit is a means rather than an end in itself a compensation to owners of capital linked to the effectiveness of contribution to society and the essential ingredient to sustain such enlarged societal contribution. The cost control exercise is in consolidation. BGS INSTITUTE OF TECHNOLOGY. An unwavering commitment to integrity. In terms of this belief. Any statements on overall of functional strategy that the company may wish to share are: Improvement in the existing products. BG NAGAR Page 39 . meritocracy. The core values are shaped around the belief that enterprises exist to serve society. KS&DL follow ethical employment standards wherever it operates with a goal in mind company guarantees. 1. Adequate and timely training for every one for the job for which they are employed. ethical conduct. 3. To fulfill its entire legal obligation in terms of employment payments and benefits practices. 2.8 COMPETITORS OF KS&DL PRODUCTS AND SERVICES KS&DL is facing cut throat competition in national and international market. Cost and time-consciousness. Proctor and Gamble. Some of its main competitors are.A STUDY ON WORKING CAPITAL Customer satisfaction Committed to total quality. Respect for individuals. Wipro. BG NAGAR Page 40 . Hindustan Unilever Limited. COMPETITORS INFORMATION AND MARKET SHARE IN SOAP INDUSTRY BGS INSTITUTE OF TECHNOLOGY. Integrity health and ethics. Nirma Soaps Private Limited. Innovation and creativity. Trust and team spirit. Godrej Soaps Private Limited. Jyothi Laboratories. HUL [Hindustan Unilever Limited] 64% 2. Godrej Soaps Private Limited 4% 5.4% TRADEMARK OF KS&DL The “SHARABHA” The carving on the cover is the Sharabha.A STUDY ON WORKING CAPITAL NO. PARTICULARS PERCENTAGES 1. The maharaja of Mysore as his official emblem adopted it. the trademark of KS&DL. The Sharabha is a mythological creation from the “puranas” which has a body of a lion and head of an elephant. Wipro 4. BG NAGAR Page 41 .6% 6. And soon took place as the symbol of the Government Soap Factory of quality that reflects a standard of excellence of Karnataka Soaps and Detergents Limited. It is adopted as an official emblem of KS&DL to symbolize a power that removes imperfections and impurities. KS&DL 11% 3. Others 6. which embodies the combined virtues of wisdom and strength. SLOGAN BGS INSTITUTE OF TECHNOLOGY. Proctor & Gamble 10% 4. Saudi Arabia.The factory output rose to 500M. The reasons why its products are much in demand globally and are exported regularly to UAE. Strive to design and develop products. BIRDS EYE VIEW OF KS&DL 1918. POLICY OF KS&DL Seek purchase of goods and services from environment responsible suppliers. 1954. 1957. BGS INSTITUTE OF TECHNOLOGY. Set targets and monitor progress through internal and external audits. Qatar. South America.Factory shifted its operation to Rajajinagar industrial area.Government Soap Factory was started by Maharaja of Mysore and the Mysore Sandal Soap was introduced into the market for the first time.Received license from Government to manufacture 1500 tons of soaps and 75 tons of glycerin per year. right from the selection of raw materials to processing and packaging of the end product. The entire toilet soaps of KS&DL are made from raw materials of vegetable origin and are totally free from animal fats. Kuwait.Tons with the following modifications Renovating the whole premises. Communicate its environment policy and best practices to all its employees. BG NAGAR Page 42 . Installing new boiler soap building plant and drying chamber. Reuse and recycle materials wherever possible and minimize energy consumption and waste. 1950.A STUDY ON WORKING CAPITAL “NATURAL PRODUCTS WITH EXOTIC FRAGRANCES” KS&DL has a long tradition of maintaining the highest quality standard. which have friendly environmental impact during manufacturing. Quality systems. for marketing its products. 5 crores Fatty acid plant was installed.Company has introduced Hand wash liquids under the trade name of Herbal hand wash and Rose hand wash liquids.Production capacity was raised to 26.A STUDY ON WORKING CAPITAL 1974. 98 crores wiped out and in May BIFR.ISO-14001 Certificate pertaining to environmental management system.Rs. 2000. 4 crores synthetic detergent plant was installed based on Italian technology by Ballestra SPA. 1996. as the company suffered losses continuously since 1980 at its net worth eroded. 1980. colors and fragrances introduced to meet the varieties and tastes of consumers.Mysore sales international limited was appointed as the sole selling agent. 1984.On 1st October 1980 the Government Soap Factory was converted into a public sector enterprise and renamed as “Karnataka Soaps and Detergents Limited” 1981. 1999.000 tons B. 1992. 1985. Company has also introduced liquid Detergent under the trade BGS INSTITUTE OF TECHNOLOGY. declared the company to be out of its purview. 1975. installation and servicing. 2004.The entire carried forward loss of Rs.The ISO-9002 was upgraded to ISO-9001-2004.A.The company was registered with the Board for Industries and Financial Reconstruction (BIFR). The company is making profit continuously. 2003.tons per annum. Rs. New Delhi in December for rehabilitation.000M.Manufacturing of premium quality of Agarbathis at Mysore division. A large variety of toilet soaps at attractive shapes. Production capacity was increased to 6.The BIFR approved the rehabilitation scheme in September and the company started making profits.ISO-9002 Certificate for quality assurance in production. it is the only state public sector unit that has come out of BIFR. BG NAGAR Page 43 . 2008. ISO 9001-2000 in the year 1999. ISO 14001-2004 in the year 2000. 2012. 720 per soap. liquid wash. The company turnover has increased from 100 crores during the year 2003 to 200 crores during the year 2010. room fresheners. Export award for the year 2006-2007 for the excellence in Exports market. ACHIEVEMENTS Government of Karnataka Department of Industries and Commerce.The ISO certification was upgraded to ISO 9001:2008. 2013.They reached highest turnover and profit (322 crore) and Got National award for Excellence Manufacturing Cost in Medium organization category. liquid soap. 2010.A STUDY ON WORKING CAPITAL name of Kleenol liquid with different variants for floor wash. Company has re-introduced the Talcum powder variants with new outlook of containers.The Research and Development Department of the company is in the process of development of the “MILLENIUM SOAP” new products like super specialty body wash. Company is on progressive growth for the last 10 years by increasing its production and sales volumes. 2009. Dish wash and Automobile wash. body spray perfume and pure sandalwood powder in small pouches.Company has established In-House state of the Art manufacturing facilities for manufacturing Mysore Sandal Talcum powder. State Export Promotion Geographical Indication GI-2005. BGS INSTITUTE OF TECHNOLOGY. BG NAGAR Page 44 . 2011.India’s most expensive Mysore Sandal Millennium Soap was launched on January 25 th worth Rs. Two sandalwood oil factories in Shivmoga and Mysore. WEAKNESS Lack of understanding among the lower level employees. Diversified product range keeps the company stable. An ISO 14001 company which commits to reserve the natural environment in the production of its quality products to the satisfaction of its customers.A STUDY ON WORKING CAPITAL 2. BG NAGAR Page 45 . It has only 8% of the total detergent market share.9 Swot analysis STRENGTHS AND WEAKNESS STRENGTHS Only soap in India that contains pure sandal and almond oil. The factory is located in the heart of the city and has all infrastructure facilities. An ISO 9002 certified company has its own brand image. which produce 75% of world’s sandalwood oil. BGS INSTITUTE OF TECHNOLOGY. Lack of updated technology The large proportion of the target area is middle class and upper class people. Low turnover resulting in low profits. They have quick movement of raw materials and finished products. Due to its proximity. habitation movement of men and materials are easy. The company has brand loyalty of consumers and has 90% of sandal soap market. As company depends on forests for its main raw materials it makes the company to find chemical alternative to sandalwood. 2. Good export market can tap foreign market vigorously. modernization are soap of the reasons that has increased the demand for soaps.3kgs over the years we have M\S HLL. spread of education. THREATS Government interference is more. Good raw material sources to enhance production. BG NAGAR Page 46 . Other sandal soaps in the market. M\S KS&DL leading the industry in the field of soap manufacturers.A STUDY ON WORKING CAPITAL OPPORTUNITIES AND THREATS OPPORTUNITIES Existence of vast market and huge demand. The toilet soaps and detergents market is an over expanding industry and a major company like KS&DL with its manufacturing expertise can call the shots if it reaches peak manufacturing capacity. Entry of new multinationals in soap business. BGS INSTITUTE OF TECHNOLOGY. Traditional benefits that sandal is good for skin. The growth population income and consumption expenditure increase in urbanization.10Future prospects of soap industry The soap prospect seems to be numerous considering the fact that per capital consumption in India is below 0. Mof \S Tom co. 102 05 Talcum Powder 127.65 lakhs as against Rs.A STUDY ON WORKING CAPITAL 2.290 Page 47 .265 1693.663 1.128 145. 20983.749 03 Sandal wood oil 2.97 lakhs Actual production in metric tons SI Class of Goods 2012 –13 No 01 Soaps 9786.544 BGS INSTITUTE OF TECHNOLOGY. 27497.11 Financial statement analysis ANNUAL REPORT OF KSDL Operational performance Production:Total – Rs. BG NAGAR 2011 – 12 8241.335 04 Agarbathies 440.616 347.112 02 Detergents 1673. 563 1229.91 BGS INSTITUTE OF TECHNOLOGY.72 lakhs as against Rs. 26117.505 648. 25571.A STUDY ON WORKING CAPITAL Sales (Rs. 21216.34 03 Sandal wood oil 0.725 762.882 728.171 20058.85 04 Agarbathies 451.033 24902.05 02 Detergents 1882.47 06 Coconut oil 295.81 142. In lakhs) SI Class of Goods 2012– 2013 2011 – 2012 Quantity in Value Quantity in Value M tons M tons No 01 Soaps 9303.059 106.70 Sales:Gross = Rs.72 05 Talcum Powder 167.933 900. 32280.72 331.91 8966.085 580.336 724.040 72.729 436.65 38.00 Net = Rs.42 1924.99 lakhs as against Rs. BG NAGAR Page 48 .91 0. 08.21.71.818 Less: Excise duty 30.00.752 stock 265.68.258 Other income 3.A STUDY ON WORKING CAPITAL PROFIT & LOSS ACCOUNT FOR THE YEARENDED 31ST MARCH 2013 PARTICULARS AMOUNT Rs.40.84.560 Net sales 255.39.78.33.704 258.99. INCOME Sales 286.05.32.962 Increase/(-) Decrease in 7.49. BG NAGAR Page 49 .714 BGS INSTITUTE OF TECHNOLOGY. Rs. 56.41.347 for Taxation (i) Current Tax 10.25.30.83.67.146 226.890 Deferred Tax Asset 3.60.83.591 Profit/(loss)after tax 21.25.00.11.74.78. BG NAGAR Page 50 .367 Operating Profit /Loss 398330347 Less: - Interest and Finance Charges PROFIT BEFORE TAX Less: Provision 39.83.A STUDY ON WORKING CAPITAL EXPENDITURE Materials Consumed 129.19.122 (ii) Fringe Benefit Tax 3.534 Depreciation 73.42.687 (include trading items) Other Expenditure 95.28.7 44 BGS INSTITUTE OF TECHNOLOGY. BG NAGAR Page 51 .A STUDY ON WORKING CAPITAL BGS INSTITUTE OF TECHNOLOGY. Types of working capital from the point of view of time. The total of investment in all current assets is known as gross working capital 2. It is the minimum level of investment in the current asset that is carried by the business at all times to carries hour minimum level of its activities Temporary working capital It refers to the part of total working capital which is required by a business over and about permanent working capital. Since the volume of the temporary working capital keeps on fluctuating from time to time according to the business activity it may be financed from short term resources. Net working capital The term net capital refers access of total current assets over total current liabilities. the term working capital can be divided in to two categories 1 permanent working capital 2 temporary working capital Permanent working capital It is also refers to the hardcore working capital. BGS INSTITUTE OF TECHNOLOGY. It is also called variable working capital. Gross working capital The gross working capital refers to investment in all the current asset taken together.A STUDY ON WORKING CAPITAL Concepts of working capital The term working capital can be used in to different ways they are 1. It may be noted that the current assets refers to this liabilities which are payable with in a period of one year. BG NAGAR Page 52 . A wide variety of considerations may affect the quantum of working capital required and these considerations may vary from time to time.public deposit General factors determining working capital requirement The working capital needs of a firm are determined and influenced by various factors. 8. 4. Following are some of the factors which BGS INSTITUTE OF TECHNOLOGY. 5. The determination of working capital requirements is a continuous process an be undertaken on and must be undertaken on a regular basis in the light of the changing situations. BG NAGAR Page 53 . The working capital needed at one point of may not be good enough for some other situation. Long term resources 2. Sale of share Sale of debenture Sale of idle fixed assets Long term loans Customers credit Loans from directors Security of employee Factoring Short term sources Internal 1. 7. 2. Bank credit 4 . Short term resources Long term sources 1. Provision of taxation 3. Depreciation funds 2. Trade credit 2. Credit papers 3. 6. 3. Accrued expenses External 1.A STUDY ON WORKING CAPITAL Sources of working capital 1. In some cases raw materials BGS INSTITUTE OF TECHNOLOGY. has great influence on the level of the inventories. Inventory policy 5. Dividend policy 12. Price level changes 13. Growth and expansion 10. Nature of the business 3.e. BG NAGAR Page 54 . the plan for production. Operating efficiency Production policy The size of business scheduled i. Production policy 2. Credit policy 4.A STUDY ON WORKING CAPITAL 1. Market conditions 7. Business cycle 9. Abnormal factors 6. Conditions of supply 8. Level of taxes 11.