J&k bank presentation

A
PROJECT REPORT
WORKING CAPITAL MANAGEMENT
OF
J&K BANK
Developed For
J&K Bank Ltd.
Shimla
By
ChetnaArya
(B.B.A.)
For the Partial Fulfillment of the award of
Bachelor of Business Administrator
Submitted to Branch Head
J&K Bank, Shimla
[2017]

ACKNOWLEDGEMENT
I take great pleasure in submitting this project report on “Finance Management J&K
Bank Ltd. Shimla (H.P) as a part of the requirements for the Bachelor of Business
Administration Degree. It is always a difficult task to acknowledge all those who have been of
tremendous help in industrial Project of this nature. At the very outset I take this opportunity
to express my deep sense of gratitude to Head of Department, Prof. Rajiv Khosla , for his
valuable guidance and interest throughout the period of our Graduation study in every
possible way.
I am very much thankful to the teaching and non-teaching staff members of my college
for the extra support provided by them whenever needed. Sincere thanks are due to MR.
Rakesh Raman Thappa (Branch Head) of J&K Bank Ltd. for giving me an opportunity to
do this project and their valuable Co- operation and guidance in the development of this
project, with the continuous encouragement and support for sharing their knowledge withme.
I feel obliged for my project guide Mr. Rajinder Singh (Credit In-charge) who has
taken lot of efforts to make this project possible and taught me various things from the day
zero of project.
I am grateful to my project Manager Mr. Rakesh Raman Thappa and all the staff
members of J&K Bank Ltd. for helping me for the project and colleagues for their support in
this project. And to My Parents who have inspired me time to time in the present
achievements also to my Sister who had throughout supported me.
Thanking You,
Miss. Chetna Arya
(B.B.A) Department of Management,
Chandigarh University, Mohali-140413

EXECUTIVE SUMMARY
In few years JAMMU & KASHMIR BANK financial services has emerged as a tool for
ensuring one’s financial well-being. P.O.S machines, CREDIT cards, DEBIT cards etc. have
helped families tap into the success of Indian industries. As information and awareness is
rising more and more people are enjoying the benefits of investing in mutual funds and using
various services. The trick for converting a person with no knowledge of services to a
profitable customer is to understand which of the potential customers are more likely to buy
credit card, POS machine, debit card and to use the right argument in the sales process that
customers will accept as important and relevant to their decision.
This project gave me a great learning experience and at the same time it gave me enough
scope to implement my marketing ability in the sale of the services offered by the bank. This
report will help to know about the various financial services offered by the J&K bank and the
people response to them. The report throws some light on some factors that lead to the
preference of J&K bank services over other banks. I hope the research findings and
conclusions will be of use.
INTRODUCTION TO THE INDIAN BANKING SYSTEM
The Indian Banking system has a large geographic and functional coverage. Presently the
total asset size of the Indian banking sector is US$ 270 billion with a branch network
exceeding 66,000 branches across the country. Revenues of the banking sector have grown at
6 per cent CAGR over the past few years to reach a size of US$ 15 billion. While commercial
banks cater to short and medium term financing requirements, national level and state level
financial institutions meet longer-term requirements. This distinction is getting blurred with
commercial banks extending project finance. The total disbursements of the financial
institutions in 2001 were US$ 14 billion.

BANKING
Banks are the institutions where those who have some savings can keep their money in the
form of deposits & those who need money borrow money on payment of interest with certain
conditions that assure recovery of the borrowed money. The rate of interest charged by the
bank from its borrower is usually higher than what it pays to the depositor.
In addition to the safe money keeping of depositor and money lending to the borrower a bank
also helps people in many kinds of money transactions. In brief the main functions of bank
are:-
❖ Receiving money from the depositors
❖ Lending money on demand
❖ Transferring money from one place toanother
❖ Receiving payment for public utility services such as telephone bills, house tax etc.
❖ Renting safe deposits locker for safe custody of valuables
❖ Helping travelers and tourist by providing travelers cheques and foreign currency
etc.
The various types of account provided by the bank are as follows:-
❖ Saving account
❖ Current account
❖ Term or fixed deposits
❖ Recurring deposits
❖ NRI account
PROFILE
❖ Incorporated in 1938 as a limited company.
❖ Governed by the Companies Act and Banking Regulation Act of India.
Regulated by the Reserve Bank of India and SEBI.
❖ Listed on the National Stock Exchange (NSE) and Bombay Stock Exchange
(BSE)
❖ 53 percent owned by the Government of J&K.
❖ Rated "P1+" by Standard and Poor- CRISIL connoting highest degree of safety.
❖ Four decades of uninterrupted profitability and dividends.

HISTORY OF J&K BANK
Jammu & Kashmir bank was founded on October 1, 1938 and it commenced
business from July 4, 1939. The Jammu and Kashmir bank limited has been the first of its
nature and composition as a state owned bank in the country. The bank was established as a
semi state bank with participation in capital by state and the public under the control of state
government.
The bank had to face serious problems at the time of independence when out of its total of
ten branches two branches of Muzaffarabad and Mirpur fell to the other side of the line of
control ( now Pak occupied Kashmir) along with cash and other assets.
Following the extension of central laws to the state of Jammu & Kashmir, the bank was
defined as a government company as per the provisions of Indian Companies Act, 1956.
Today J&K bank is one of the fast growing banks in India with the network of more than 539
branches/ offices spread across the country offering world class banking products/ services to
its customers. The bank recently bagged three very prestigious awards for following fair
business practices and commitment to social obligations.
MISSION OF THE BANK
Mission have been set to remain financially strong, sound, growth oriented and profitable
bank with main focus towards providing convenient, reliable, cost-effective and
personalized services to all its customers and to become globally competitive and foray
into new sectors compatible with the business of banking. The key objective of the bank
shall be to provide “Value Maximization” to all its shareholders that are customers and
employees. The bank shall also further strive to strengthen its national presence and adopt
developmental role in the country with a particular emphasis on J&K Bank.
VISION OF THE BANK
The vision of the bank is to be financially sound, profitable, growth and technology
oriented bank committed to buildings and maximizing sustainable value for all its
shareholders, customers and employees. In its endeavor to attain the goal visualized, the
bank is laying maximum emphasis on the effective system of corporate governance, with
the view to improve company’s image, efficiency, effectiveness, and satisfying the public
expectations of fairness and ethical conduct. The new identity of J&K Bank is a visual
representation of the bank’s philosophy and business strategy. The three colored squares
represent the regions of Jammu, Kashmir & Ladakh. The counter form is created by the
interactions of the squares is a falcon with outstretched wings-a symbol of power and
empowerment .The synergy between the three regions propels the bank towards new
horizons. Green signifies growth and the renewal, Blue represents stability and unity and
Red represents energy and power. All these attributes are integrated and assimilated in the
white counter form.

OBJECTIVE
To Know gross working capital of J&K
 To Know Net working capital of J&K
To analyze different ratio in capital management
INTRODUCTION TO BRANCH UNIT OF THE J&K BANK
BRANCH UNIT OF THE J&K BANK
The Branch Unit of G-39, The Connaught Place, Delhi 110001 has the responsibility of
coordinating between the branches – customers – head office (CHQ, SRINAGAR).The
Branch deals with all third party products and markets them through its respective branches.
The Branch deals with:
1. Insurance: (J&K bank ties up with METLIFE for life insurance)
2. Debit cards
3. Credit cards
4. POS machine
5. Loans
6. E-banking
7. Corporate Sector

WORKING CAPITAL
AN INTRODUCTION
Any industrial establishment requires broadly two kinds of funds. The first one is long-term
funds which are required for the purchase of fixed assets such as land, building, machineries,
electrical installations, start-up expenses, development expenses, purchase of goodwill,
purchase of furniture, purchase of vehicles and other items to bring the establishment into
operation. The second kind is Short-term funds. These are required to meet the needs of day-
to-day expenses such as raw-materials, stores, power and fuel, salaries, wages, administrative
expenses, interest, sales and distribution expenses and other expenses to produce the saleable
goods, up to the realization of the sale proceeds. Till the sale proceeds are realized, the
inventory is built up to facilitate smooth production and outstanding bills i.e. debtors are also
financed by the short-term funds. In due course the establishment also gets some credit from
their supplier which is indirect financing of the short-term funds. Funds employed in current
assets constitute working capital. It is in fact the ‘life-blood’ and ‘controlling-nerve’ of the
unit. The concept used for working capital may be gross working capital or net working
capital. Gross working capital constitute current assets, whereas net working capital means
current asset minus current liabilities.
Working capital, also known as net working capital, is a financial metric which represents
operating liquidity available to a business. Along with fixed assets such as plant and
equipment, working capital is considered a part of operating capital. It is calculated as current
assets minus current liabilities. If current assets are less than current liabilities, an entity has a
working capital deficiency, also called a working capital deficit. A company can be endowed
with assets and profitability but short of liquidity if its assets cannot readily be converted into
cash. Positive working capital is required to ensure that a firm is able to continue its
operations and that it has sufficient funds to satisfy both maturing short-term debt and
upcoming operational expenses. The management of working capital involves managing
inventories, accounts receivable and payable and cash. How much working capital will be
required by a particular industrial undertaking will depend upon the production cycle i.e.
from the time raw material is purchased to the time goods are sold and cash is realized
(operating cycle).Therefore, the working capital for a unit would mean the total current assets
it has to hold. Operating cycle depends upon the following actions:
❖ Seasonality
❖ Stock cut/safety

❖ Economy of purchases
❖ Bunched receipts
❖ Production process
❖ Disturbance in production process
❖ Disturbance in sales due to transport problems
❖ Disturbance in sales due to depression in market
❖ Terms of sale and
❖ Slow billing (slow collection etc.)
Many newly started units become sick or run into fatal problems due to defective
financial plan. The plan adopted may fail to provide adequate capital to meet the needs of
both fixed and working capital, particularly the later. There are instances where units
have been able to obtain sufficient funds to buy a plant but failed to equip the same and
conduct production operations successfully because of faulty assessment of working
capital needs.
As far as the requirement of purchase of fixed assets is concerned, it is almost certain
what items are to be purchased and how much amount will be involved and usually the
decision for this expenditure is taken in the very beginning. If a borrower approaches for
funds for this purpose, bankers examine the technical feasibility, economic validity and
managerial competency before deciding to sanction the loan. There is not much problem
to sanction it, provided the banker is satisfied about the earning capacity and there
payment schedule. Both the bankers as well as borrower have to decide about it only
once. On the other hand, amount of working capital required by the concerned unit may
vary from time to time, depending upon various factors such as cost of raw material,
utilization capacity, marketing arrangements etc. It is on account of this fact that
entrepreneurs usually spend most of their time to manage working capital requirements.
Prior to nationalization, banks largely financed medium and large-scale industries and
traders. There was inequitable distribution of credit amongst different sector and
geographical areas. The security oriented-approach of banks resulted in credit being
available only to the well-to-do, thus leading to concentration of economic power in their
hands. Even up to 1973, industries did not have to plan their credits since it was easily
available against collaterals. Banks on their part did not think of credit planning because
banks were flush with funds.
WORKING CAPITAL MANAGEMENT
Decisions relating to working capital and short term financing are referred to as working
capital management. These involve managing the relationship between a firm's short-term
assets and its short-term liabilities. The goal of working capital management is to ensure
that the firm is able to continue its operations and that it has sufficient cash flow to satisfy
both maturing short-term debt and upcoming operational expenses. By definition,
working capital management entails short term decisions - generally, relating to the next
one year periods, which are "reversible". These decisions are therefore not taken on the

MPBF METHOD
❖ As per Tandon Committee:
➢ First Method of Lending: Banks can work out the working capital gap, i.e. total
current assets less current liabilities other than bank borrowings (called Maximum
Permissible Bank Finance or MPBF) and finance a maximum of 75 per cent of the
gap; the balance to come out of long-term funds, i.e., owned funds and term
borrowings.
➢ Second Method of Lending: Under this method, it was thought that the borrower
should provide for a minimum of 25% of total current assets out of long-term funds
i.e., owned funds plus term borrowings. A certain level of credit for purchases and
other current liabilities will be available to fund the buildup of current assets and the
bank will provide the balance (MPBF). Consequently, total current liabilities inclusive
of bank borrowings could not exceed 75% of current assets.
➢ Third Method of Lending: Under this method, the borrower's contribution from long
term funds will be to the extent of the entire CORE CURRENT ASSETS, which has
been defined by the Study Group as representing the absolute minimum level of raw
materials, process stock, finished goods and stores which are in the pipeline to ensure
continuity of production and a minimum of 25% of the balance current assets should
be financed out of the long term funds plus term borrowings. (This method was not
accepted for implementation and hence is of only academic interest).
COMPUTATION MPBF METHOD
Example:
Current Liabilities Amount Current Assets Amount
Creditors for Purchases 100 Raw Materials 200
Other Current Liabilities 50 Stock-In-Process 20
Bank Borrowings including Bills
discounted with bankers
150 Finished Goods 90
Receivables including Bill
Discounted with bankers
50
Other Current Assets 10
Total Current Liabilities 300 Total Current Assets 370

COMPUTATION MPBF METHOD
(Rs. In Lakhs)
1st Method Amount 2nd Method Amount 3rd Method Amount
Total Current
Assets
370 Total Current
Assets
370 Total Current Assets 370
Less: Current
Liabilities other
than Bank
Borrowings
150 Less: 25% of
Current Assets
92 Less: Core Current
Assets
95
Working Capital
Gap
220 Working Capital
Gap
278 Total Real Current
assets
275
Less: 25% of
Working Capital
Gap
55 Less: Current
Liabilities other
than Bank
Borrowings
150 Less: Other Current
Liabilities
150
MPBF 165 MPBF 128 Working capital gap 125
MPBF-
Borrowings
15 Excess
Borrowings
22 Less: 25% of Real
Current Assets
69
Current Ratio 1.17:1 Current Ratio 1.33:1 Current Ratio 1.87

CASES OF WORKING CAPITAL
Balance Sheet ------------------- in Rs. lacs. -------------------
FORM II : OPERATING STATEMENT
Sr. No. Particulars
Actuals as
per audited
accounts
Following years Projected
31-Mar-
12
31-Mar-
13
31-Mar-
14
31-Mar-
15
31-Mar-
16
31-Mar-
17
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6
A Quantities:
i Raw Material Consumption - - - - - -
ii Sales - - - - - -
iii Rejects and Scraps - - - - - -
1 Gross Sales
a Sales (net of returns)
i Domestic Sales 232.39 260.00 300.00 325.00 332.00 360.00
ii Export Sales - - - - - -
T1 Sub-total [ a(i+ii)] 232.39 260.00 300.00 325.00 332.00 360.00
iii Less: Excise Duty - - - - - -
T2 Net Sales [ T1-iii ] 232.39 260.00 300.00 325.00 332.00 360.00
iv
% rise or fall in sales turnover [compared to
previous year]
{0.00%} {11.88%} {15.38%} {8.33%} {2.15%} {8.43%}
b Other Income
T3 Total Other income - - - - - -
T4 Total Gross Income [ T2+T3] 232.39 260.00 300.00 325.00 332.00 360.00
2 Cost of Production & Cost of Sales
a
Raw Materials [Including Stores
and other
items used in the process of
manufacture)
i Imported - - - - - -
ii Indigenous 187.10 205.35 233.00 245.00 245.00 265.00
T5 sub-total [ a(i+ii)] 187.10 205.35 233.00 245.00 245.00 265.00
b Other Consumable Spares
i Imported - - - - - -
ii Indigenous - - - - - -
T6 sub-total [ b(i+ii)] - - - - - -
c Direct Expenses
i Power & fuel 1.45 1.70 2.00 2.25 2.50 3.00
ii
Direct Labour (Factory wages &
Salaries)
37.83 42.00 47.00 52.00 56.00 61.00
iii Depreciation 0.63 1.68 1.68 1.68 1.68 1.68
T7 Total Direct Expenses [c(i to iii)] 39.91 45.38 50.68 55.93 60.18 65.68
T8 sub-total T5+T6+T7 227.01 250.73 283.68 300.93 305.18 330.68
d Add : Opening stock of W.I.P. - - - - - -
T9 Sub-total [T8+2(d)] 227.01 250.73 283.68 300.93 305.18 330.68

e Less : Closing Stock W.I.P. - - - - - -
T10 Total Cost of Production [ T9-2(e) ] 227.01 250.73 283.68 300.93 305.18 330.68
f
Add : Opening stock of Finished
Goods
- - - - - -
T11 sub-total
[T10+2(f)
] 227.01 250.73 283.68 300.93 305.18 330.68
g
Less : Closing Stock of Finished
Goods
- - - - - -
T12 Total Cost of Sales
[T11-2(g)
]
227.01 250.73 283.68 300.93 305.18 330.68
3 General, Administrative & Selling Expenses
I 1.65 2.25 3.00 5.00 6.00 7.00
T13
Total General,
Administrative &
Selling Expenses [ 3(i)] 1.65 2.25 3.00 5.00 6.00 7.00
4
Operating Profit before
Interest
[ T4-T12-
T13] 3.73 7.02 13.32 19.07 20.82 22.32
5 Finance Charges
I Intrust 2.82 3.50 4.35 4.08 3.39 3.45
T14 Total Finance Charges [ 5(i to v)] 2.82 3.50 4.35 4.08 3.39 3.45
6 Operating Profit after
Interest
[ 4-T14] 0.91 3.52 8.97 14.99 17.43 18.87
7 Non-Operating Income
T15
Total Non-Operating
Income
[ 7(i to iii)
] - - - - - -
8 Non-Operating Expenses
9 T16
Total Non-Operating
Expenses
[ 8(i to iii)
] - - - - - -
T17
Net Non-Operating
Income (+) /
Expenses (-)
[T15-T16
] - - - - - -
10
Net Profit before Tax /
(Loss) PBT
[6+/(-
)T17] 0.91 3.52 8.97 14.99 17.43 18.87
11 Provision for Taxes 0.27 1.10 2.75 4.50 5.20 5.75
12
Net Profit / Loss after
Tax PAT
[ 10-11] 0.64 2.42 6.22 10.49 12.23 13.12
PAT to Net Sales%
[ 12/T2]
%
{0.28%} {0.93%} {2.07%} {3.23%} {3.68%} {3.64%}
13 Equity Dividend & Dividend Tax - - - - - -
Dividend Rate % {0.00%} {0.00%} {0.00%} {0.00%} {0.00%} {0.00%}
Dividend Distribution Tax % {0.00%} {0.00%} {0.00%} {0.00%} {0.00%} {0.00%}
14 Retained Profit [ 12-13] 0.64 2.42 6.22 10.49 12.23 13.12
15 Retained Profit / PAT %
[ 14/12]
% {100.00%} {100.00%} {100.00%} {100.00%} {100.00%} {100.00%}
16 Additional Data:
Break-up of Total Gross Income
Domestic Sales:
T18 sub-total [i toiv] - - - - - -
T19 Export Sales - - - - - -
T20
Total [T18+T19] to agree with
T4]
- - - - - -

FORM III : ANALYSIS OF BALANCE SHEET
Sr. No. Particulars
Actuals
as per
audited
accounts
31-Mar-
12
31-
Mar-13 31-Mar-14
31-
Mar-15
31-
Mar-16
31-
Mar-17
Year 1 Year 2 Year 3 Year 4 Year5 Year6
Current Liabilities
1 Short term borrowings
a from Banks (including bills purchased, discounted
& excess borrowings placed on repayment basis)
I from Applicant Bank
22.51 25.00
25.00
25.00 25.00 25.00
Ii from Other Banks -
-
-
- - -
T1 sub-total
[ a(i + ii)
] 22.51 25.00 25.00 25.00 25.00 25.00
of which BP & BD
iii from Applicant Bank {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
Iv from Other Banks {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
T2 sub-total
[ b(iii+
iv)]
- - - - - -
T3 Total short term borrowings from banks T1 22.51 25.00 25.00 25.00 25.00 25.00
B from Others
I Sundry Trade Creditors
45.92 40.00
35.00
35.00 37.00 40.00
Ii Sundry Trade Creditors – Import -
-
-
- - -
iii Advance payments from Customers /
Deposits from Dealers / Stockists - - - - - -
Iv Provision for Taxation 10.35 1.10 2.75 4.50 5.20 5.75
V Dividend payable -
-
-
- - -
Vi Short term
38.59 38.59
38.59
38.59 38.59 38.59
vii Deposits / Debentures / Instalments of Term
Loans / DPGs etc. (due within 1 year) -
2.06
2.32
2.62 2.95 2.17
T4 Total short term borrowings from others
[ b(ito
vii)] 94.86 81.75 78.66 80.71 83.74 86.51
2 Other Current Liabilities and Provisions
(due within one year-specify major items)
I 1.82 2.00 3.00 3.50 4.00 4.00
Ii -
-
-
- - -
iii -
-
-
- - -
Iv -
-
-
- - -
V - - - - - -
T5 sub-total
[ 2(ito
v)] 1.82 2.00 3.00 3.50 4.00 4.00
T6 Current Liabilities excl. bank borrowings
[T4+T5
] 96.68 83.75 81.66 84.21 87.74 90.51
T7 Total Current Liabilities
[T3+T6
] 119.19 108.75 106.66 109.21 112.74 115.51

3 Term Liabilities
A Debentures (maturing after 1 year) -
-
-
- - -
B Preference Shares (redeemable after 1 year) -
-
-
- - -
C Term loans (repayable after 1 year) -
10.08
7.75
5.13 2.17 -
D Deferred Payment Credits (repayable after 1 year) -
-
-
- - -
E Term deposits (repayable after 1 year) -
-
-
- - -
F Other term liabilities
i Unsecured Loans
0.30 -
-
- - -
ii -
-
-
- - -
T8 Total Term Liabilities
[ 3(ato
f)] 0.30 10.08 7.75 5.13 2.17 -
T9 Total Outside Liabilities
[T7+T8
] 119.49 118.83 114.41 114.34 114.91 115.51
4 Net Worth
A Capital
25.00 25.00
25.00
25.00 25.00 25.00
B General reserve - - - - - -
C Revaluation Reserve -
-
-
- - -
D Other reserves (excluding provisions) -
-
-
- - -
E Surplus (+) or deficit (-) in P & L A/c
(20.91) (18.50)
(12.28)
(1.08) 10.02 23.12
F Others
i Share Premium Account -
-
-
- - -
ii Capital Redemption Reserve -
-
-
- - -
iii -
-
-
- - -
iv -
-
-
- - -
v -
-
-
- - -
T10 Net Worth
[ 4(ato
f)] 4.09 6.50 12.72 23.92 35.02 48.12
T11 Total Liabilities
[
T9+T10
] 123.58 125.33
127.13
138.26 149.93 163.63

FORM III : ANALYSIS OF BALANCE SHEET
Sr. No. Particulars
Actuals
as per
audited
accounts
31-Mar-
12
31-Mar-
13 31-Mar-14
31-
Mar-15
31-
Mar-16
31-
Mar-17
Year 1 Year2 Year 3 Year 4 Year5 Year 6
Current Assets
5 Cash and bank balances
8.12 2.86
4.35
1.44 0.53 0.91
6 Investments [other than long term
Investments]
-
-
-
- - -
i Government & other trustee securities - - - - - -
ii Fixed deposits with Banks & Others -
-
-
- - -
T12 sub-total
[6(i+ii)
]
- - - - - -
7 i Receivables other than deferred & exports
73.42 70.00
70.00
80.00 80.00 85.00
[Including bills purchased & discounted
by bankers]
ii Export receivables (Including bills - - - - - -
purchased/discounted by bankers)
T13 sub-total
[7(i+ii)
] 73.42 70.00 70.00 80.00 80.00 85.00
8 Instalments under deferred receivables - - - - - -
(due within one year)
9 Inventory
a Raw Materials [Including Stores and other
items used in the process of manufacture)
i Imported -
-
-
- - -
ii Indigenous
23.35 28.00
30.00
35.00 40.00 45.00
b Work [ Stock ] in Process -
-
-
- - -
c Finished Goods -
-
-
- - -
d Goods in Transit -
-
-
- - -
e Other consumable spares
T14 sub-total
[ 9(a toe)
] 23.35 28.00 30.00 35.00 40.00 45.00
10 Advances to suppliers of of raw materials /
stores & spares -
-
-
- - -
11 Advance payment of taxes -
-
-
- - -
12 Other current assets [specify major items]
9.60 -
-
- 10.00 15.00
T15 sub-total
9.60 - - - 10.00 15.00
T16 Total Current Assets
[ 5 to12
] 114.49 100.86 104.35 116.44 130.53 145.91
13 Fixed Assets
i Gross Block
9.13 24.47
22.79
21.10 19.42 17.73

ii Depreciation to date -
-
-
- - -
T17 Net Block
[ 13(i-ii)
] 9.13 24.47 22.79 21.10 19.42 17.73
Other Non-Current Assets
14 Investments / book debts /advances /
deposits which are non-current
a Investments in subsidiary
companies / affiliates -
-
-
- - -
b Other investments - - - - - -
c Advances to suppliers of
capital goods and contractors - - - - - -
d Deferred receivables
[maturity exceeding one year] - - - - - -
e Security deposits / Tender Deposits - - - - - -
f Others
T18 sub-total - - - - - -
15 Obsolete Stocks - - - - - -
16 Non-consumable consumables & spares - - - - - -
17 Other non-current assets - - - - - -
(Including dues from directors)
T19 Total Other Non-Current Assets
[ 14 to17
] - - - - - -
18
Intangible assets (Patents, Goodwill,
Preliminary Expenses, Bad / Doubtful Debts
not provided for etc)
-
-
-
- - -
T20 Total Assets [ T16+T17+T19+18 ] 123.62 125.33 127.14 137.54 149.95 163.64
T21 Tangible Net Worth
[ T10-18
] 4.09 6.50
12.72
23.92 35.02 48.12
T22 Net Working Capital
[T16-T7
] (4.70) (7.89)
(2.31)
7.23 17.79 30.40
19 Current Ratio
[T14/T4
] 0.96 0.93 0.98 1.07 1.16 1.26
20 Total Outside Liabilities/
Tangible Net Worth
[T9/T21
] 29.22 18.28 8.99 4.78 3.28 2.40
21 Total Term Liabilities/
Tangible Net Worth
[T8/T21
] 0.07 1.55
0.61
0.21 0.06 -
22 Additional Information
a Arrears of depreciation - - - - - -
b Contingent Liabilities :
I Arrears of cumulative dividends -
-
-
- - -
ii Gratuity liability not provided for - - - - - -
iii Disputed excise/customs tax liabilities - - - - - -
iv Bills accepted / guarantees extended to
accommodate associate / sister concerns /
other third parties
-
-
-
- - -

FORM - IV : COMPARATIVE STATEMENT OF CURRENT ASSETS AND CURRENT
LIABILITIES
Sr. No. Particulars
Actuals
as per
audited
accounts
31-Mar-
12
31-Mar-
13
31-Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
CURRENT ASSETS
1 Raw Materials [Including Stores and other
items used in the process of manufacture)
I Imported - - - - - -
[Months'Consumption] {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
ii Indigenous 23.35 28.00 30.00 35.00 40.00 45.00
[Months'consumption] {01.50} {01.64} {01.55} {01.71} {01.96} {02.04}
2 Stocks in Process - - - - - -
[Months' Cost of Production] {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
3 Finished Goods - - - - - -
[Months' Cost of Sales] {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
4 Other consumable spares
i Imported [Months' Consumption] {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
ii Indigenous - - - - - -
[Months'consumption] {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
5
Receivables other than export & deferred receivables
(including bills purchased & discounted by bankers) 73.42 70.00 70.00 80.00 80.00 85.00
[Months' domestic sales including deferred payment sales] {03.79} {03.23} {02.80} {02.95} {02.89} {02.83}
6 Export receivables [including bills purchased &discounted] - - - - - -
[Months' export sales] {00.00} {00.00} {00.00} {00.00} {00.00} {00.00}
7 Advances to suppliers of of raw materials / stores & spares
8
Other current assets incl .cash & bank balances & deferred
receivables due within 1 year [major items only]
i Cash & bank balances 8.12 2.86 4.35 1.44 0.53 0.91
v Other current assets as per T15 of Form-III 9.60 - - - 10.00 15.00
T1 Total Current Assets 114.49 100.86 104.35 116.44 130.53 145.91
CURRENT LIABILITIES
[Other than bank borrowings for working capital]
9
Sundry Trade Creditors [for raw materials, stores, spares &
consumables] 45.92 40.00 35.00 35.00 37.00 40.00
[Months'purchases] 2.95 2.34 1.80 1.71 1.81 1.81
10 Advances from customers / deposits from dealers - - - - - -
11 Statutory liabilities [Including Provision for Taxation] 48.94 39.69 41.34 43.09 43.79 44.34
12
Other current liabilities [specify major items] [Short Term
borrowings, unsecured loans, dividend payable, instalments
of TL, DPG, public deposits, debentures etc.]
i Deposits / Debentures / Instalments of Term
Loans / DPGs etc. (due within 1 year) - 2.06 2.32 2.62 2.95 2.17
ii
Other Current liability & Provisions(due within 1year)
1.82 2.00 3.00 3.50 4.00 4.00
sub-total [ 12(i to ii) ] 1.82 4.06 5.32 6.12 6.95 6.17
T2 Total Current Liabilities 96.68 83.75 81.66 84.21 87.74 90.51

FORM-V: COMPUTATION OF MAXIMUM PERMISSIBLE BANK FINANCE (MPBF)
FOR WORKING CAPITAL
Sr. No. Particulars
Actualsas
per
audited
accounts
31-Mar-
12
31-Mar-
13
31-Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
FIRST Method of Lending
1 Total Current Assets 114.49 100.86 104.35 116.44 130.53 145.91
[ T1 in Form-IV ]
2 Current Liabilities [Other than bank borrowing] 96.68 83.75 81.66 84.21 87.74 90.51
[ T2 in Form-IV ]
3 Working Capital Gap [WCG] 17.81 17.11 22.69 32.23 42.79 55.40
[ 1 - 2 ]
4 Minimum Stipulated Net Working Capital 4.45 4.28 5.67 8.06 10.70 13.85
[ 25% of WCG excluding export receivables]
[ (item 3 above - item no. 6 in Form - IV)*0.25 ]
5 Actual / Projected Net Working Capital [ NWC ] (4.70) (7.89) (2.31) 7.23 17.79 30.40
[ T22 in Form-III ]
6 Item no. 3 minus Item no. 4 13.36 12.83 17.02 24.17 32.09 41.55
8 Maximum permissible bank finance [MPBF] 13.36 12.83 17.02 24.17 25.00 25.00
[ least of item 6 or 7 above ]
9 Excess borrowings representing shortfall in NWC 9.15 12.17 7.98 0.83 - -
[ item 4 - item 5 ]
SECOND Method of Lending
1 Total Current Assets 114.49 100.86 104.35 116.44 130.53 145.91
[ T1 in Form-IV ]
2 Current Liabilities [other than bank borrowings] 96.68 83.75 81.66 84.21 87.74 90.51
[ T2 in Form-IV ]
3 Working Capital Gap (WCG) (1-2) 17.81 17.11 22.69 32.23 42.79 55.40
[ 1 - 2 ]
4 Minimum Stipulated Net Working Capital 28.62 25.22 26.09 29.11 32.63 36.48
[25% of total Current Assets excluding export receivables]
[ (1 above - item 6 in Form-IV)*0.25 ]
5 Actual / Projected net working capital (4.70) (7.89) (2.31) 7.23 17.79 30.40
[ T22 in Form-III ]
6 Item no. 3 minus Item no. 4 (10.81) (8.11) (3.40) 3.12 10.16 18.92
8 Maximum permissible bank finance [MPBF] (10.81) (8.11) (3.40) 3.12 10.16 18.92
[ least of item 6 or 7 above ]
9 Excess borrowings representing shortfall in NWC 33.32 33.11 28.40 21.88 14.84 6.08
[ item 4 - item 5 ]

FORM-V: FUNDS FLOW STATEMENT
Sr. No. Particulars
Actualsas
per
audited
accounts
31-Mar-
12
31-Mar-
13
31-Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
A SOURCES OF FUNDS
1 Net profit for the year after tax 2.42 6.22 10.49 12.23 13.12
2 Depreciation - - - - -
3 Increase in capital - - - - -
4 Increase in long-term funds / term liabilities 9.78 - - - -
5 Decrease in fixed assets - 1.68 1.69 1.68 1.69
6 Decrease in other non-current assets - - - - -
7 Others - 0.00 0.71 - -
T1 Total 12.20 7.90 12.89 13.91 14.81
B APPLICATION OF FUNDS
1 Net loss for the year - - - - -
2 Decrease in capital - - - - -
3 Decrease in long-term funds / term liabilities - 2.33 2.62 2.96 2.17
4 Increase in fixed assets 15.34 - - - -
5 Increase in other non-current assets - - - - -
6 Dividend payments - - - - -
7 Others 0.01 - - 1.13 0.02
T2 Total 15.35 2.33 2.62 4.09 2.19
a Long term surplus (+) / deficit (-) [ T1-T2 ] (3.15) 5.57 10.27 9.82 12.62
b Increase / (decrease) in current assets * (13.63) 3.49 12.09 14.09 15.38
* as per details given below at "h"
c Increase / (decrease) in current liabilities other
than bank borrowings (12.93) (2.09) 2.55 3.53 2.77
d Increase / (decrease) in working capital gap (0.70) 5.58 9.54 10.56 12.61
e Net surplus / (deficit) (2.45) (0.01) 0.73 (0.74) 0.01
f Increase / (decrease) bank borrowings 2.49 - - - -
g Increase / (decrease) net sales 27.61 40.00 25.00 7.00 28.00
h
Break-up of "b" above: Increase / (decrease) in
inventory of:
i Raw materials Increase / (decrease) in receivables 4.65 2.00 5.00 5.00 5.00
ii. Domestic (3.42) - 10.00 - 5.00
viii Increase / (decrease) in other current assets (14.86) 1.49 (2.91) 9.09 5.38
Net total of [ h(i to viii) ] (13.63) 3.49 12.09 14.09 15.38

SUMMARY OF FINANCIAL STATEMENTS FOR RATIO ANALYSIS
Sr. No. Particulars
Actualsas
per
audited
accounts
31-Mar-
12
31-Mar-
13
31-
Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
Year 1 Year 2 Year 3 Year 4 Year5 Year6
OPERATING STATEMENT
INCOME
Domestic sales 232.39 260.00
300.00 325.00 332.00 360.00
Export sales - - -
- - -
Gross Sales 232.39 260.00 300.00 325.00 332.00 360.00
Excise duty - - -
- - -
Net Sales 232.39 260.00 300.00 325.00 332.00 360.00
Other Income - - -
- - -
Gross Income 232.39 260.00
300.00 325.00 332.00 360.00
EXPENSES
Raw material[Imported] - - -
- - -
Raw material[Indigenous] 187.10 205.35
233.00 245.00 245.00 265.00
Consumables [Imported] - - -
- - -
Consumables [Indigenous] - - -
- - -
Total MaterialCost 187.10 205.35 233.00 245.00 245.00 265.00
Total ConsumablesCost - - -
- - -
Totalpurchases 187.10 205.35 233.00
245.00 245.00 265.00
Direct Labour 1.45 1.70 2.00
2.25 2.50 3.00
Depreciation 0.63 1.68 1.68 1.68 1.68 1.68
Other direct overheads 37.83 42.00
47.00 52.00 56.00 61.00
Total direct expenses 39.91 45.38
50.68 55.93 60.18 65.68
Total cost of production 227.01 250.73 283.68 300.93 305.18 330.68
Average inventory of finished goods - - - - - -
Total cost of sales 227.01 250.73 283.68 300.93 305.18 330.68
Gross Profit 5.38 9.27
16.32 24.07 26.82 29.32
Total indirect expenses 1.65 2.25
3.00 5.00 6.00 7.00
Operating profit before finance charges 3.73 7.02 13.32 19.07 20.82 22.32
Total finance charges [only interest element] 2.82 3.50
4.35 4.08 3.39 3.45
Operating profit after finance charges 0.91 3.52 8.97 14.99 17.43 18.87
Non-operating income - - -
- - -
Non-operating expenses - - - - - -
Profit before Tax / (Loss) PBT 0.91 3.52
8.97 14.99 17.43 18.87

Provision for Taxes 0.27 1.10
2.75 4.50 5.20 5.75
Net Profit / Loss after Tax PAT 0.64 2.42 6.22 10.49 12.23 13.12
Equity dividend pay-out - - -
- - -
Retained Profit 0.64 2.42 6.22 10.49 12.23 13.12
Net profit before depreciation, interest & tax
[PBDIT]
4.36 8.70
15.00 20.75 22.50 24.00
Net profit before interest & tax [PBIT] 3.73 7.02
13.32 19.07 20.82 22.32
BALANCE SHEET
Liabilities
Short-term borrowings from banks 22.51 25.00
25.00 25.00 25.00 25.00
Sundry creditors 45.92 40.00
35.00 35.00 37.00 40.00
Opening creditors for FIRST yearÆ - NA NA NA NA NA
Averagecreditors 22.96 42.96 37.50
35.00 36.00 38.50
Short-term borrowings from others 94.86 81.75
78.66 80.71 83.74 86.51
Other current liabilities 1.82 2.00
3.00 3.50 4.00 4.00
Total current liabilities 119.19 108.75 106.66 109.21 112.74 115.51
Total term liabilities 0.30 10.08 7.75 5.13 2.17 -
Total outside liabilities 119.49 118.83 114.41 114.34 114.91 115.51
Total liabilities 123.58 125.33 127.13 138.26 149.93 163.63
Assets
Cash, bank & investments 8.12 2.86
4.35 1.44 0.53 0.91
Receivables-other than export 73.42 70.00
70.00 80.00 80.00 85.00
TotalReceivables 73.42 70.00 70.00
80.00 80.00 85.00
Opening debtors for FIRSTyearÆ - NA NA NA NA NA
Averagereceivables 36.71 71.71 70.00
75.00 80.00 82.50
Inventory 23.35 28.00 30.00 35.00 40.00 45.00
Other current assets 9.60 - - - 10.00 15.00
Total current assets 114.49 100.86 104.35 116.44 130.53 145.91
Fixed assets
Gross block 9.13 24.47
22.79 21.10 19.42 17.73
Net block 9.13 24.47 22.79 21.10 19.42 17.73
Total assets 123.62 125.33 127.14 137.54 149.95 163.64
Total Tangible Assets 123.62 125.33
127.14 137.54 149.95 163.64
Net worth 4.09 6.50
12.72 23.92 35.02 48.12
Tangible net worth 4.09 6.50
12.72 23.92 35.02 48.12
Net working capital (4.70) (7.89)
(2.31) 7.23 17.79 30.40

RATIO ANALYSIS
Sr.
No. Particulars
Ideal
Levels
Actuals
as per
audited
accounts
31-Mar-
12
31-Mar-
13
31-
Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
A Long-term Solvency Ratios
1 Debt Equity Ratio 0.07 1.55 0.61 0.21 0.06 -
2 Net Worth to Total Assets Ratio 0.03 0.05 0.10 0.17 0.23 0.29
3 Debt to Net Worth Ratio 0.07 1.55 0.61 0.21 0.06 -
4 Capital Gearing Ratio 0.07 1.55 0.61 0.21 0.06 -
5 Fixed Assets to Long Term Funds 30.43 2.43 2.94 4.11 8.95 -
6 Propriety Ratio 0.03 0.05 0.10 0.17 0.23 0.29
7 Interest Coverage 1.55 2.49 3.45 5.09 6.64 6.96
8 Debt Service Coverage 12.43 0.70 1.72 3.72 9.59 -
B Short-term Solvency Ratios
1 Current Ratio 0.96 0.93 0.98 1.07 1.16 1.26
2 Quick Ratio or Liquid Ratio or Acid Test Ratio 0.76 0.67 0.70 0.75 0.80 0.87
3 Absolute Liquid Ratio 0.07 0.03 0.04 0.01 0.00 0.01
C Profitability Ratios
1 Return on Capital Employed or Return on
Investment 0.52% 1.93% 4.89% 7.63% 8.16% 8.02%
2 Gross Profit Margin 2.32% 3.57% 5.44% 7.41% 8.08% 8.14%
3 Net Profit Margin 0.28% 0.93% 2.07% 3.23% 3.68% 3.64%
4 Cash Profit Ratio 0.66% 2.00% 3.55% 5.13% 5.76% 5.71%
5 Return on Net Worth 15.65% 37.23% 48.90% 43.85% 34.92% 27.27%
6 Operating Profit (before interest) Margin 1.61% 2.70% 4.44% 5.87% 6.27% 6.20%
7 Operating Profit (after interest) Margin 0.39% 1.35% 2.99% 4.61% 5.25% 5.24%
D Activity Ratios
1 Inventory Turnover Ratio - - - - - -
[Based on closing inventory]
[Based on average inventory]
[Based on cost of sales / average inventory]
4 Inventory Turnover Period
5 Debtors Turnover Ratio 3.17 3.71 4.29 4.06 4.15 4.24
[Based on closing debtors]
6 Debtors Turnover Ratio 6.33 3.63 4.29 4.33 4.15 4.36
[Based on average debtors]
7 Debtors Turnover Period
i Based on net sales & closing debtors 115.32 98.27 85.17 89.85 87.95 86.18
ii Based on net sales & average debtors 57.66 100.67 85.17 84.23 87.95 83.65
8 Creditors Turnover Ratio 4.07 5.13 6.66 7.00 6.62 6.63
[Based on closing creditors]

9 Creditors Turnover Ratio 8.15 4.78 6.21 7.00 6.81 6.88
[Based on average creditors]
10 Creditors Turnover Period
i Based on purchases & closing creditors 89.58 71.10 54.83 52.14 55.12 55.09
ii Based on purchases & average creditors 44.79 76.36 58.74 52.14 53.63 53.03
11 Fixed Assets Turnover Ratio 25.45 10.63 13.16 15.40 17.10 20.30
12 Assets Turnover Ratio 1.88 2.07 2.36 2.36 2.21 2.20
13 Working Capital Turnover Ratio - - - 44.95 18.66 11.84
14 Sales to Capital Employed 56.82 40.00 23.58 13.59 9.48 7.48
E Operating Ratios
1 Domestic Sales Proportion 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
2 Export Sales Proportion 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3 Material Cost Ratio 80.51% 78.98% 77.67% 75.38% 73.80% 73.61%
4 Consumables Cost Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
5 Direct Labour Cost Ratio 0.62% 0.65% 0.67% 0.69% 0.75% 0.83%
6 Other Direct Cash Overheads Cost Ratio 16.28% 16.15% 15.67% 16.00% 16.87% 16.94%
7
Total Direct Cost Ratio [excl material &
consumables] 17.17% 17.45% 16.89% 17.21% 18.13% 18.24%
8
Total Direct Cost Ratio [incl material &
consumables] 97.68% 96.43% 94.56% 92.59% 91.92% 91.86%
9 Indirect Cost Ratio 0.71% 0.87% 1.00% 1.54% 1.81% 1.94%
10 Interest Cost Ratio 1.21% 1.35% 1.45% 1.26% 1.02% 0.96%
11 Operating Cost Ratio 99.61% 98.65% 97.01% 95.39% 94.75% 94.76%

STATEMENT OF CHANGES IN WORKING CAPITAL
Sr.
No. Particulars
Actualsas
per
audited
accounts
31-Mar-
12
31-Mar-
13
31-Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
Current Assets
Cash and bank balances 8.12 2.86 4.35
1.44 0.53 0.91
Investments
Investments [other than long term] - - - - - -
Government & other trustee securities - - - - - -
Fixed deposits with Banks & Others - - - - - -
Receivables
Receivables other than deferred & exports 73.42 70.00 70.00
80.00 80.00 85.00
Export receivables - - - - - -
Instalments under deferred receivables - - - - - -
Inventory
Raw Materials
Indigenous 23.35 28.00 30.00
35.00 40.00 45.00
Work [ Stock ] in Process - - - - - -
Finished Goods - - - - - -
Goods in Transit - - - - - -
Other consumable spares
9.60 - - - 10.00 15.00
Total Current Assets 114.49 100.86 104.35 116.44 130.53 145.91
Change in the current assets (13.63) 3.49 12.09 14.09 15.38
Current Liabilities
Short term borrowings from Banks
from Applicant Bank 22.51 25.00 25.00
25.00 25.00 25.00
from Other Banks - - - - - -
of which BP & BD
from Applicant Bank - - - - - -
from Other Banks - - - - - -
Short term borrowings from Others
Sundry Trade Creditors - Indigenous 45.92 40.00 35.00 35.00 37.00 40.00
Advance from Customers / deposits from dealers - - - - - -
Provision for Taxation 10.35 1.10 2.75
4.50 5.20 5.75
Dividend payable - - - - - -
Other Statutory Liabilities 38.59 38.59 38.59
38.59 38.59 38.59
Deposits / Debentures / Instalments of Term
Loans / DPGs etc. - 2.06 2.32
2.62 2.95 2.17
Other Current Liabilities and Provisions 1.82 2.00 3.00 3.50 4.00 4.00
Total Current Liabilities 119.19 108.75 106.66 109.21 112.74 115.51
Change in the current liabilities (10.44) (2.09) 2.55 3.53 2.77
Net Working Capital as calculated above (4.70) (7.89) (2.31) 7.23 17.79 30.40
Increase / (Decrease) in Net Working Capital - (3.19) 5.58 9.54 10.56 12.61

CROSS-CHECK
Particulars
Actuals as per audited
accounts
Current
Year
Estimated
31-Mar-
12
31-Mar-
13
31-Mar-
14
31-
Mar-15
31-
Mar-16
31-
Mar-17
Balance Sheet
Total Assets 123.62 125.33 127.14 137.54 149.95 163.64
Total Liablities 123.58 125.33 127.13 138.26 149.93 163.63
Difference 0.04 - 0.01 (0.72) 0.02 0.01
Comparative Statement of Current Assets & Current Liabilities
Total Current Assets as per statement 114.49 100.86 104.35 116.44 130.53 145.91
Total Current Assets as per balance sheet 114.49 100.86 104.35 116.44 130.53 145.91
Difference - - - - - -
Total Current Liabilities as per statement 96.68 83.75 81.66 84.21 87.74 90.51
Total Current Liabilities as per balance sheet 96.68 83.75 81.66 84.21 87.74 90.51
Statement of Changes in Working Capital
Total Current Assets as per statement 114.49 100.86 104.35 116.44 130.53 145.91
Total Current Assets as per balance sheet 114.49 100.86 104.35 116.44 130.53 145.91
Total Current Liabilities as per statement 119.19 108.75 106.66 109.21 112.74 115.51
Total Current Liabilities as per balance sheet 119.19 108.75 106.66 109.21 112.74 115.51
Net working capital as per statement (4.70) (7.89) (2.31) 7.23 17.79 30.40
Net working capital as per balance sheet (4.70) (7.89) (2.31) 7.23 17.79 30.40
Difference 0.00 - - - - -

Net Sales Total CostofSales
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
NetSales Net Profit / Loss after Tax PAT
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
CHARTS:
-
Net Sales 232.39 260.00 300.00 325.00 332.00 360.00
Total Cost of Sales 227.01 250.73 283.68 300.93 305.18 330.68
-
Net Sales 232.39 260.00 300.00 325.00 332.00 360.00
Net Profit / Loss after Tax PAT 0.64 2.42 6.22 10.49 12.23 13.12

TotalCurrentAssets Total CurrentLiabilities Working CapitalGap[WCG]
160.00
140.00
120.00
100.00
80.00
60.00
40.00
20.00
Gross ProfitMargin Net ProfitMargin
9.00%
8.00%
7.00%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
-
Total Current Assets 114.49 100.86 104.35 116.44 130.53 145.91
Total Current Liabilities 96.68 83.75 81.66 84.21 87.74 90.51
Working Capital Gap [WCG] 17.81 17.11 22.69 32.23 42.79 55.40
0.00%
Gross Profit Margin 2.32% 3.57% 5.44% 7.41% 8.08% 8.14%
Net Profit Margin 0.28% 0.93% 2.07% 3.23% 3.68% 3.64%

Debtors Turnover Period Creditors Turnover Period
120.00
100.00
80.00
60.00
40.00
20.00
NetSales OperatingCost
400.00
350.00
300.00
250.00
200.00
150.00
100.00
50.00
-
Debtors Turnover Period 57.66 100.67 85.17 84.23 87.95 83.65
Creditors Turnover Period 44.79 76.36 58.74 52.14 53.63 53.03
-
Net Sales 232.39 260.00 300.00 325.00 332.00 360.00
Operating Cost 228.66 252.98 286.68 305.93 311.18 337.68

SUGGESTIONS
The following suggestions are made to resolve the various issues of Small Scale Sector.
❖ The industry promoting agencies should take care of the wellbeing of small scale sector
and they should initiate such measures which would result in the further promotion of
small scale units in the country.
❖ It is right time to adopt the idea of limited partnership with a view to boost up the
financial resources in small scale sector and to encourage small entrepreneurs to bear the
risk.
❖ Timely finance should be made available to the small units keeping in view their needs.
❖ The borrowings should be made cheaper by lowering the rate of interest on landings of
commercial banks.
❖ The re-orientation program, workshops and seminars should be organized at district level
to provide latest information about various schemes to the small entrepreneurs.
❖ Banks should also provide consultancy services and professional guidance at the time of
setting up for considering the long-term and short-term financial requirements of a small
unit for lending purposes.
❖ Small entrepreneurs should make feasibility studies before they finalize their projects.
They should undertake only such projects which are technically, operationally and
economically and financially viable.
❖ The process followed by the government in sanctioning the loan is cumber some; hence it
is suggested to make the process easier in sectioning the credit facilities to the SMES.
❖ The entrepreneurs are of the opinion that, the funding institutions are taking much time in
sanctioning the loan. Hence it is suggested that the funding institutions should make the
process easy required for offering credit to the entrepreneurs.
❖ The Entrepreneurs are of the opinion that they are not getting proper assistance from the
Government employees in documentation to obtain the loan from the funding institutions.
Hence it is suggested that the government employees should be very cooperative and help
the entrepreneurs in documentation for obtaining the credit.
❖ The laws in place to safeguard the delayed payments of SME’s are weak at the
implementation stage. A lot needs to be done to really make it effective. In fact it has
been found that the government undertakings are also on the list of large enterprises that
delay payments on a regular basis. So some corrective actions need to be taken by the
GOI in this regard.

CONCLUSIONS
CASE:-
The revised sets of forms have been separately prescribed for industrial borrowers and
traders/merchant exporters. The details of forms are as under: -
Form 1: - particulars of the existing/proposed limit from the banking system.
Form 2: -Operating statement.
It contains data relating to gross sales, net sales, cost of raw material, power and fuel, etc.
It gives the operating profit and the net profit figures.
Form 3: - Analysis of balance sheet.
It is complete analysis of various items of last year’s balance sheet; current years estimate
and following year’s projection are given in this form.
Form 4: - Comparative statement of current asset and liabilities.
Details of various items of current asset and current liabilities are given.
The figures in this form must tally with those in formIII.
Form 5: - Computation of maximum permissible bank finance for working capital.
The calculation of MPBF is done in this form to obtain the fund based credit limits to be
granted to the borrower.
Form 6: - Fund flow statement
It provides the details of fund flow from long term sources and uses to indicate whether they
are sufficient to meet the borrower’s long term requirements.
❖ The requirement of working capital finance is ever increasing.
❖ Loans and advances formed a major portion of the current assets of the firm because of
which the working capital gap is large.
❖ The bank prefers to use the second method of lending working capital under the MPBF
rather than evolving their own method.
❖ In most of the cases, hypothecation and/or mortgage are used to create securities for the
banks.
❖ Bank has their own internal credit rating procedure to rate the clients (Borrowers).
❖ After doing the assessment of the financial indicators it is up to the judgment of the top
management of the bank to sanction such loan.
❖ If the company is with bank from inception stage then they are given preference, as
credible and loyal party over their financial indicators.
REQUIRED DOCUMENTS:-
Last 2 years' audited accounts or certified financial statements (if applicable).
Last 6 months' bank statements.
Copy of NRIC (front and back) of owners/directors/partners/sole
proprietor/guarantor(s).
Latest personal Income Tax Notice of Assessment of owners/directors/partners/sole
proprietor/guarantor(s).

In the above case the company will get working capital as:-
❖ The net sales, total cost of sales are increasing every year.
❖ Net sales and net profit/loss after tax PAT is also increasing.
❖ Total assets, total current liabilities and working capital gap is also increasing.
❖ Debtor’s turnover period and creditor’s turnover period are also increasing it means
Company is in profit and it will pay the principle amount and interest to bank in
time.so, bank will provide working capital as there is no loss on providing working
capital to the company.
From the above major findings of the study the following conclusions are drawn:
❖ The growth of small and medium scale industries in the country has been significant in
the recent past.
❖ Various backward/remote areas are moving towards industrialization through Small and
medium Scale Sector.
❖ Industrial promoting agencies have made a mark in the development of state as well as
the district industrially.
❖ Capital base of small units is very poor and they are facing several financial crisis.
❖ Shortage of finance is the main problem responsible for a host of problems.
❖ The SMEs are not aware of the credit schemes offered by the commercial banks and
nodal agencies.
❖ The delays in sanctioning of the loan and the neglecting attitude of the bank officials are
the main causes behind the bad perception of SMEs towards the banks.
❖ The Central Government should take the initiative in propagating the credit facilities for
the SMEs through the channel of NGOs.
❖ Financial problems are the root cause for all the problems faced by the SMEs. The State
Government should encourage this segment through its Finance Corporation.
❖ The entrepreneurs should be motivated to run successfully of their units by taking the
advantage of various credit facilities

REFERENCES AND BIBLIOGRAPHY
During the completion of this project work I have taken references from various sources
which include:
❖ Annual report of The Jammu and Kashmir Bank ltd.
❖ Magazines such as Business Economics, Newspaper such as Greater Kashmir, Bank
Dairy, Bank Catalogue, Bank magazine etc.
❖ Yearly journals of the Jammu and Kashmir Bank Ltd.
❖ Website of the bank;
➢ www.jkbank.net
➢ www.jkbank.com
➢ www.rbi.org.in
❖ Circulars of J&K Bank

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