CHAPTER 1 1. INDUSTRY PROFILE
1.1 Dairy Industry-An overview
In 1965, National Dairy Development Board (NDDB) was set up with the object of meeting the demand of milk, especially in urban areas.as well as developing the rural economy through the enhancement of the milk production of the country. In 1970 national dairy development board took up operation flood program in order to organize milk producers co-operative in several places in India taking the Khera district (Anand)co-operative milk producers union limited (AMUL) of Anand, Gujarat as a model with the object in view.
1.2 HISTORY OF DAIRY CO-OPERATIVE IN INDIA:
The co-operative movement started in India in the last of the 19th century with two objects in view, i.e., to protect the farmers from the hands of the private money lenders and to improve their economic conditions.
The history of dairy development movement in India is a new one. The most notable of this venture was a Khera District to Co-operative Milk Producer Union Limited of Anand, Gujarat. But after Independence, the national government took great initiative in setting up new dairy co-operative in many parts of India. The National Dairy Development Board was setup to make ambitious project a success.
Dairy Industry is playing a vital role in providing quality and hygienic milk and other milk products at a competitive price to the consumer as well as it is offering / providing employment opportunities to rural folk.
In June 1974 an integrated project was launched in Karnataka to restructure and recognize the dairy industry to the co-operative principle and to lay foundation for a new direction in the dairy development project was initiated in 1975. Initially the project covered 8 southern districts of Karnataka. Dairy development co-operative was setup to implement the project.
The organization with total vertical integration of all dairy development activities was setup with co-operative societies at grass roots level, milk unions at the middle level and dairy development co-operative societies at stage level as an apex body vested with the responsibilities if implementing rupees 51crores project.
At the end of September 1984 the World Bank aided project ended and the dairy development activities continued under operation flood 2, the activities were extended to cover entire state except coastal taluks of Uttar Karnataka districts and the process of dairy development were continues in second phase from April 1984.
KMF came into existence in may-1984 as a successor to KDCC. The spills over works are finance by NDDB from 1-4-1996 under different terms and conditions.
After the closure of operation flood-2, the Dairy Development activities continue under the operative flood 3 on 31st march.
During the pre-independence period this movement was extended to few parts of India namely Bangalore, Madras and Calcutta. The operation flood was undertaken after the National Dairy Development Board formed in 1965. It was decided that milk co-operative formed in Anand would be followed across the country. The Anand pattern has been accepted as a model, launched by Dr V.V. Kurian regarded as the father of white revolution. The main objective of the white revolution was to provide quality milk to the nation and to upgrade the living standard of the rural people.

1.3 PEST ANALYSIS POLITICAL * Government term and change * Trading policies | ECONOMICAL * Interest Rate * Foreign Investment | SOCIAL * Life style trend * Demography | TECHNOLOGY * Industrialization * R&D Activity |

CHAPTER 2 2. COMPANY PROFILE
2.1 INTRODUCTION ABOUT KMF
Karnataka co-operative Milk Producers Federation Limited (KMF) is the Apex Body in Karnataka representing Dairy Farmers co-operatives. It is the second largest Dairy co-operative in the country. In south India it stands first in terms of procurement as well as sales.
One of the core functions of the Federation is marketing oh milk and milk products.
The brand “NANDINI” is the household name for Pure and Fresh milk and milk products. KMF has 13 milk unions throughout the states started Karnataka in which procures milk from Primary Dairy co-operative societies (DCS) and distribute milk to consumers in various Towns/cities/rural markets in Karnataka.

The first ever World Bank funded Dairy Development Program in the country with organisation of village level Dairy co-operatives in 1974.The AMUL pattern of dairy co-operatives in 1974. The AMUL pattern of dairy co-operatives started functioning in Karnataka from 1974-75 with the financial assistance from World Bank, operation flood 2 and 3. The dairy co-operatives were established under the Anand pattern in a three tier structure with the village level during co-operatives forming the base level, the district level milk unions at the middle level to take care of the procurement, processing and marketing of milk and the Karnataka Milk Federation as the Apex Body to co-ordinate the growth of the sector at the state level.
Coordination of activities among the unions and developing market for milk and milk products is the responsibility of KMF
Marketing in the respective jurisdiction is organised by the respective milk unions.
Surplus/deficit of liquid milk among the member milk unions is monitored by the Federation. While the marketing of all the milk product is organised by KMF, both within and outside the state, all the milk products are sold under a common brand name “NANDINI”.
2.2 KARNATAKA MILK FEDERATION
A harbinger of rural prospecting Karnataka Milk Federation is the largest co-operative dairy Federation in South India, owned and managed by milk producers of Karnataka state. KMF has over 2million milk producers in over 10500 dairy co-operative societies at village level, functioning fewer than 13 district co-operative milk unions in Karnataka state. The mission of the Federation is to enhance rural prosperity through Dairy Development. During the last 4 decades of co-operative dairy development by KMF, the dairy industry in Karnataka has progressed from a situation of milk scarcity to that of milk surplus.
The organization is three tiered on co-operative principles.
A) Dairy co-operative societies at grass root level.
B) District co-operative milk unions at single/multi district level.
C) Milk Federation at state level
All above 3 are governed by democratically elected board from among the milk producers. Under the direction of elected boards, KMF, various functional units and unions are performing the assigned tasks to ensure fulfilment of organization objectives.
2.3 MOTHER DAIRY, A UNIT OF KMF
Mother dairy, Bangalore, a flagship dairy of KMF having ISO22000;2005 certification was setup during the year 1984, primarily for dispensing liquid milk to consumers through Bulk Vending System. Today, the dairy stands expanded from 2lakh litres to 7 lakh litres milk processing per day. Also, it has facilitates to pack and distribute milk and curd in different pack formats in the most hygienic way.
Besides it has a state of the art facility to manufacture skim milk powder, dairy whitener as well as whole milk powder to the tune of 30MTs per day. It has established a facility to manufacture more than 20varieties of Ice-cream in the various pack formats to the tune of 15000litres per day.
Presently, it is undertaking manufacturing and co-packing of ‘AMUL’ brand of ice cream for GCMMF. Mother Dairy has a network of 616 retailers through whom milk is sold to the consumers. Further, it has satellite modern format joints to sell various varieties of milk and “NANDINI milk Shoppe”. Also , old chain network which is a prerequisite for sale of milk and milk products has been established in 4 strategic locations of Bangalore city as “ walk in cold store” to ensure un-interrupted and constant milk supply to our retailers/ consumers.
The Dairy is poised to add 4 more varieties of exotic ice-creams including probiotic, sugar free in the near future and also would undertake manufacturing of much impoverished quality of Pannier ,Yogurt as well as flavoured milk in bottles. Plan drawn up for putting in the market ready to eat foods “Restored “ and having appreciable content of milk and milk products. The same is planned to be introduced in the mid of 2011.
Units of KMF: Directly under its control are 1. Mother dairy, Yelahanka Bangalore. 2. Milk product plant, Channarayapattana 3. Nandini milk products, KMF complex Bangalore. 4. Cattle feed Plants at Rajaankunte/ Gubbi/ Dhār wad/ Hassan. 5. Nandini Sperm Station (formally known as Bull Breeding Farm and Frozen semen bank) at Hesaragatta. 6. Pouch Film Plant at Munnekolalu, Marathhalli. 7. Central Training Institute, Bangalore and Training Institute at Mysore/ Dhār wad 8. Sales Depots at Bangalore, Mysore, Mangalore, Hubli, Gulbarga, Tirupathi, and Kannur

2.4 VISION 1. To march forward with a missionary zeal which will make KMF a trailblazer of exemplary performance and achievements beckoning other Milk Federations in the country in pursuit of total emulation of its good deeds? 2. To ensure prosperity of the rural Milk producers who are ultimate owners of the Federation. 3. To promote producer oriented viable cooperative society to impart an impetus to the rural income, dairy productivity and rural employment. 4. To a bridge the gap between price of milk procurement and sale price. 5. To develop business acumen in marketing and trading disciplines so as to serve consumers with quality milk, give a fillip to the income of milk producers. To compete with MNCs and Private Dairies with better quality of milk and milk products and in the process sustain invincibility of cooperatives. 2.5 MISSION Heralding economic, social and cultural prosperity in the lives of our milk producer members by promoting vibrant, self-sustaining and holistic cooperative dairy development in Karnataka State

2.6 OBJECTIVES OF KMF
KMF is a cooperative Apex Body in the state of Karnataka representing organizations of milk producers and implementing all-round dairy development activities to achieve the following the objectives: 1. To ensure assured and remunerative market round the year for the milk produced by the farmer members. 2. To make available quality milk and other premier dairy products to urban consumers. 3. To build and Develop Village level institutions as cooperative model units to manage the Dairy activities. 4. To ensure provision of inputs for milk production, processing facilities and dissemination of know-how 5. To facilitate rural development by providing opportunities for self-employment at village level, preventing migration to urban areas, introducing cash economy and opportunity. 2.7 Background and Inception of the company:
In 3 June 1974, an integrated project was launched in Karnataka to restructure and reorganize the dairy industry on the cooperative principle and to lay foundation for a new direction in dairy development World Bank aided dairy development project which was initiated in 1975. Initially project covered 8 southern districts of Karnataka and Karnataka dairy development cooperative was setup to implement the project. The multilevel organization with total vertical integration of all dairy development activities was setup with dairy cooperative societies at grass root level, milk unions at the middle level and dairy development corporation at state level as an apex body, vested with responsibility of implementing rupees 51crore projects.
At the end of September 1984 the World Bank aided project ended and the dairy development activities were extended to cover the entire state except coastal taluks of Uttar Karnataka district and process of dairy development was continued in the second Phase from April 1984. KMF came into existence in May 1984 as a successor to KDDC. After the closure of the operation flood 3 in 31-3-1996 the post operation flood works are financed by NDDB from 1-4-1996 under different terms and conditions. 2.8 NATURE OF THE BUSSINESS CARRIED
Procurement
Mother Dairy has procured 4.76lakh litres of milk per day during 2008-09 from KOLAR milk unions chilling centres such as Chintamani, sadali, and Gowri Bidanur chilling centres of KOLAR milk union and dairy-cooperative societies which possess Bulk milk coolers and other milk unions through road milk tankers. The dairy is processing and distributing on an average 2.78lakh litres of milk and curds per day during 2008-09 to the consumers in Bangalore city. The remaining milk is converted into SMP.

Production
Mother Dairy has a unique nature of homogenizing the milk and selling it to the consumers through Bulk vending Booths and FRP tanks. In addition to production of Toned milk in Sachet (6.0% FAT and 9.0%SNF), Doubled Toned milk (1.6% FAT and 9.0%SNF) , Nandini light(0.5% FAT and 9.0%SNF), Skimmed milk (0.1 %FAT and 9.0%SNF), Homogenized cow milk ( 3.6% FAT and 9.0%SNF) and products like white butter, ghee, curds, Ice-cream, Dairy whitener, UHT flavoured milk (badam,mango,pista and strawberry flavours)
Ghee in 5litre per jar and containing 200gm and 400gm as well as Buttermilk in Sachets and Tetra packs. a) Nandini mango b) Nandini chocolate.
Available in 200ml, 500ml, 1000ml, 51t tins, 15kg tins
Shelf life of 6month at ambient temperatures

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2.9 AREA OF OPERATION NAME OF THE UNION | AREA OF OPERATION | Bangalore city, Bangalore rural, and Ramnagar district milk producers cooperative union Bangalore | Bangalore city, rural and Ramnagar District | Belgaum district co-operative milk producers union- Belgaum | Belgaum District | Raichur, Bellary, and Koppel District co-operative milk producers union limited Bellary | Raichur ,Bellary and Koppel District | Bijapur and Bagalkot District co-operative milk producers union limited, Bijapur | Bijapur and Bagalkot district | Gulbarga, Bidar District co-operative milk producers union limited, Gulbarga | Yadgir, Gulbarga, and Bidar district | Dakshina kannada District co-operative milk producers union limited, Mangalore | Dakshina kannada and Udupi district | Hassan District co-operative milk producers union limited, Hassan | Hassan, chikkamangalore and Kodagu district |

Kolar, Chickaballapur district co-operative milk producers union ltd, Kolar | Kolar, Chickaballapur district | Mandhya district co-operative milk producers union ltd, Mysore | Mandhya district | Mysore, Chamarajanagar milk producers union ltd, Mysore | Mysore, Chamarajanagar district | Shivamogga district co-operative milk producers union ltd, Shivamogga | Shivamogga, Davanagere, chithradurga district | Tumkur district co-operative milk producers union ltd, Tumkur | Tumkur district | Dhār wad district co-operative milk producers union ltd, Dhār wad | Dhār wad, Haveri, Uttarkannada & Gadag district |

Now the emphasis is given to extend entire marketing territory apart from the Karnataka.
2.10 OWNERSHIP PATTERN
Karnataka state government in association with national dairy development board funds the mother dairy, KMF. Mother dairy was commissioned under operation flood-2 with a processing capacity of 2 lakh per day on 7-12-1984, with an investment of Rs.6.97crores, Yelahanka, new town in a total area of 28.09 acres. It is expanded to 4lakh litres under operation flood3 during 1993-1994 with an additional cost of Rs.3.64crores total investment for this project is Rs.10.61crores.

2.11 INFRASTRUCTURE FACILITIES
Mother dairy provides so many infrastructure facilities for the workers a) Production block b) Administration block c) Security and time office d)Tanker parking e) Fuelling point f) Garage block g)Canteen h) Working amenities i)Hospital

2.12 AWARDS AND ACHEIVEMENT a. By June 2009, a network of 11,542 dairy cooperative societies (DCS) has been organized, in 13 milk Unions. Among them 9907 DCS are functioning with 95% of them are in profit. b. These DCS are spread over 170 taluks covering 20,064 villages, in all the 29 districts of Karnataka c. About 20.19 lakhs are members in these DCS, of which 7.51lakhs are, 5.08lakhs are, 3.61lakhs are landless labourers and 3.27 lakhs are. Out of these 2.12 & 1.14 of them are belong to SC & ST groups and 6.391lakhs are. d. The DCS carries out milk procurement activity on all the 365 days procuring an average procurement of 39.44lakhs kilograms per day at present (July 2009) in the state. The highest procurement was 40.41 lakh kilograms recorded on 24th June 2009 Karnataka milk federation stands in 2nd position in milk procurement at the National level and 1st position in South India. e. There are 22dairies, with total processing capacity of32.25lakh litres. Per day, 42milk chilling centres with chilling capacity 15.15lakh litres per day & 5milk powder plants with drying capacity of 92MT per day. f. An average 23.633lakh litres per day is sold as fluid milk, out of which an average of 13.21 litres (July 2009) is sold in Bangalore city. g. Mother dairy has received a nation level energy conversation award during the year 2006-07( merit certificate) and a state level energy conversation award during the year 2006-07( first prize) h. The Karnataka milk federation’s “NANDINI” brand has won “The most valuable brand” award mother dairy has received export licence for GHEE and SMP. 2.13 WORK FLOW MODEL Raw chilled milk reception from DCS & other units through installed tankers | Weighted at mother dairy weigh bridge |

Reception back (plat from test, chemical quality analysis) |

Filtered |

Re chilled through PHE 6 Deg Celsius to 8celsius | Stored in raw milk silos at 6 Celsius to 8celsius |

Pasteurization * Balance tank * Regeneration * Filter separation * Regeneration 2 * Heating & holding 72 Deg to 80 Deg * Regeneration 2 * Regeneration 2 * Chiller |

Stored & standardised in PM silos at 4 Deg to 6 Deg Celsius |

Pre pack: packed & stored in cold storage below 10 Deg C | Bulk issue for FRP & BVB’s |
Milk issue
Milk issue

Dispatch to customers |

2.14 FUTURE GROWTH AND PROSPECTS 1. Establishment of new mega dairy of 6lakh litres per day capacity expandable to 10lakh litres per day at an outlay of Rs.38.70crores at Bangalore dairy 2. Expansion of frozen semen bank Hesaragatta with an investment of 2.68crores 3. Expansion of Hassan cattle feed plant from 100MT-200MT 4. Modernisation of cattle feed plant, Rajaankunte at an outlay of Rs4.4crores 5. Establishment of 30MT milk powder plant a mother dairy Yelahanka, at an estimated cost of Rs2.2crores 6. A 30MT powder plant at mother dairy has been commissioned at a account of Rs 22.51crores, out of which KMF &National dairy development board on loan basis finances the remaining 50% meet50% 7. Expanding of ice-cream plant from 3000litres per day to10000litres per day and construction of packing material stores at mother dairy, Bangalore are taken up by National dairy development board. The work in under processing 8. The total cost for this project is Rs.369lakhs. The civil works are nearing to completion. The process of procuring plant & machinery is to be cleared by National dairy development board for which proposal has been send by KMF
2.15.PRODUCT PROFILE
Nandini milk 1. Nandini toned milk 2. Nandini homogenized milk 3. Nandini full creamed milk 4. Nandini doubled toned milk 5. Nandini light skimmed milk
Nandini milk products 1. Nandini curd 2. Nandini Ghee 3. Nandini Butter 4. Nandini flavoured milk 5. Nandini skimmed milk powder 6. Nandini processed cheese
Varieties of Nandini creams manufactured c) Nandini Vanilla d) Nandini Strawberry e) Nandini Pine apple f) Nandini mango g) Nandini chocolate.
NANDINI CURD
It made from pure milk. It’s thick and delicious. Giving you all the goodness of home curds.
Available in 200gms & 500gms sachets.
NANDINI BUTTER
Rich smooth & delicious NANDINI BUTTER is made out of fresh pasteurized cream. Rich taste, smooth texture & the purity of cow’s milk make any preparation a delicious treat.
Available in 10gms, 100gms, 500gms cartons both salted and unsalted.
NANDINI GHEE
A taste of purity NANDINI GHEE made from pure better & is fresh, pure with a delicious flavour. Hygienically manufactured and packed in a special pack to retain the goodness of pure ghee.
Available in 200ml, 500ml, 1000ml, 51t tins, 15kg tins
Shelf life of 6month at ambient temperatures

NANDINI MILK POWDER
Enjoy the task of pure milk skimmed milk powder from pure milk processed and packed hygienically.
Available in 50gms, 100gms, 500gms, & 1kg packs.
NANDINI CHEESE
Delicious cheese that’s NANDINI processed cheese. Made from pure cow’s milk taste & processed with at most care to ensure the smooth and rich taste of pure cheese. It is highly nutritious, an excellent sources of calcium.
Needs to be kept under refrigeration
Available in 100gms carton
NANDINI BADAM POWDER
A delicious beverage with hot or cold milk. It can be used for Khera, Khesari bath, deserts or ice-creams. It’s the goodness of the Badam mixed with Almonds, edible, starch, saffron, skimmed milk powder and cane sugar to give you the ideal Badam delight.
Available in 200gms, pp. boxes cover shrink wrapped to offer better quality and also to prevent pilferage.
Shelf life of 6months under room temperature.
NANDINI PEDA
No matter what you are celebrating. NANDINI PEDA is a delicious treat for the family made from pure milk.
Store at room temperature approximately 7 days.
Available in 250gms containing 10 peace’s each
NANDINI MYSORE PAK
Fresh and tasty, NANDINI MYSORE PAK is made from high quality Bengal gram, Nandini Ghee, & Cane sugar. It’s delicious way to realise a sweet moment.
Available in 250gms, pp. containing shrink packed to preserve freshness & cash be kept for 7days. Advised to consume fresh to enjoy excellent taste.

NANDINI GULAB JAMOON
Great way to those soft and juicy jamoon treats at home. NANDINI GULAB JAMOON mix is make fresh skimmed milk powder, Maida, & NANDINI special grade ghee.
Available in 100& 200gms pouch with a five lay lamination
Shelf life of 6months
2.16 COMPETITORS INFORMATION S.L.NO | NAME | AREA OF PROCUREMENT | 1 | Heritage | Chittur | 2 | Jersey | Tamilnadu | 3 | Dodal dairy farm ltd | Bangalore | 4 | Aroghya | Bangalore | 5 | Nilgiris dairy farm ltd | Erode | 6 | KCA-MILK Chennai Sara enterprises | Jolar pet Tamilnadu | 7 | Swastika dairy | Madanpally | 8 | Shivashakhti | Bangalore | 9 | Vamshi | Krishnagiri |

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CHAPTER 3
3. MCKINSEY 7S FRAMEWWORK OF MOTHER DAIRY:

This model still work when the focus is on product marketing. However most developed economies have moved on with an ever-increasing focus on service business & therefore service marketing is to better represent the challenges. McKinney’s developed a new frame work for analysing and improving organisation effectiveness.
The 7s model is better known as MCKINSEY 7s. This is because of two persons, who developed this model, Tom Peter and Robert Waterman, having been consultant at McKinney’s &company at the time, they published there 7s model in the article as structure is not organisation in the year 1980 there books ”The art of Japanese management” in the year 1981 & “In search of excellence “ in the year 1982.

1. STRUCTURE PRESIDENT PRESIDENT
The term structure in 7s framework model refers to the organizational structure of the company. The designs of the organisation structure is critical task to the management of an organisation, it is the skeleton of the whole organisation. Organisation structure refers to relatively more durable organisational arrangements and relationship. It prescribes the formal relationship among various positions and activities. Arrangement is about reporting how an organisation member is to communicate with other members, the various activities performed by members’ is all the part of organisational structure.

DIRECTOR (GOVT)
DIRECTOR (GOVT)
DIRECTOR (GOVT)
DIRECTOR (GOVT)
DIRECTOR (GOVT)

DIRECTOR (GOVT)

DIRECTOR (GOVT)
DIRECTOR (GOVT)
DIRECTOR (GOVT)
DIRECTOR (GOVT)

MANAGING DIRECTOR
MANAGING DIRECTOR

PRODUCTION (DEPT)

PRODUCTION (DEPT)

PRODUCTION (DEPT)

PRODUCTION (DEPT)

PRODUCTION (DEPT)
PRODUCTION (DEPT)
PRODUCTION (DEPT)

PRODUCTION (DEPT)

PRODUCTION (DEPT)

PRODUCTION (DEPT)

ACCOUNT & PURCHASE
ACCOUNT & PURCHASE
MIS
MIS
QUALITY CONTROL
QUALITY CONTROL
FGS & STORE
FGS & STORE
TRANSPORT

TRANSPORT

STAFF
STAFF
STAFF
STAFF

GENERAL MANAGER
GENERAL MANAGER
HIERARCHY OF PRODUCTION DEPARTMENT

MANAGER MOTHER DAIRY
MANAGER MOTHER DAIRY

ASSISTANT MANAGER IN PRODUCTION
ASSISTANT MANAGER IN PRODUCTION

SHIFT OFFICER
SHIFT OFFICER

OPERATOR DAIRY (6)
OPERATOR DAIRY (6)

HELPER
HELPER

Total employees (15)
Contract labours (13
Functional Departments
There are several functional departments in which are handling various operations. They are,
a. Production Department.
b. Administrative Department.
c. Stores Department.
d. Marketing Department.
e. Maintenance Department.
f. Accounts Department.
g. Security Department
A. Production Department
The production department is headed by a production manager. Under him, there are Supervisors to look after the production activities. The production activities are carried out in three shifts by rotation. The main function of this department is to achieve targeted production objectives. They are: To follow up daily production schedules as per the plan. To upgrade the technical efficiency of production. To maintain relationship with other department.
B. Administrative The administrative department looks after the day to day administration activities of the factory. At the top level, there is an Administrative Manager ( normally the General Manager is designated as Factory Manager, under the Factories act ). The General Manager carries on the day to day administrative activities in the factory. He is also assisted by the various departments in the factory. The General Managers are accountable to the Head of the Unit (ED).
C. Stores Department
The stores department is headed by Deputy General Manager and under him there are Supervisors. The store’s manager is responsible to provide the raw materials to required shops and stores the finished goods in the store. The store’s activities are carried out in shifts by rotation.

D. Marketing Department
The Marketing Division is headed by Deputy General Manager. He plans and prepares new marketing policies and it can be properly implemented. The main objective of marketing division is to fulfil the customer’s requirements and try to achieve customer delight and increase company’s sales and to contribute quality products in the market.
E. Maintenance Department
The maintenance department is headed by Assistant General Manager, under him there are maintenance assistants and engineers. They check the machines and are responsible for their working and maintenance.
F. Accounts Department/ Financial Department
The Mother dairy has an Accounts Department and headed by a Manager and under him there are other senior officers besides Accounts Assistants. Periodical reports are being sent to the Head Office about the day to day work and expenses incurred and the funds requirement for the same.
The functions of Accounts Department are: a. Handling day to day accounts of the factory b. Providing salaries to the staff. c. Maintaining accurate financial records. d. Giving information to the Head Office.
Having an effective control of the inventory holding

G. Security Department The security department is a vital department for each and every organisation. The various gates are controlled by security officers, who are expected to have adequate experience in the security related matters.
The duties and responsibilities of Security Department are: 1. Checking of incoming and outgoing personnel, vehicles, items etc........ 2. Maintenance of discipline inside the factory. 3. Prevention, detection of theft, etc..... 4. Security.
H. Material Department Materials are the basic resource for the company. It consists 60 to 70 percent of the sales of the product. It is concerned with the procurement maintaining inventory and supply of finished goods.

2. SKILL
The McKinsey’s 7-s framework considers skill as one of the important attributes or capabilities of an organisation. The term skill includes those characteristics which most people use to describe a company.
Factory includes skilled staff &workers in its operations and production, who are experts in their own field. Administrative & HR related officers are to have knowledge and skill in their particular areas of work, and persons proficient in their subject are the preferred choices.
Machine operators of different department have wide knowledge and skill about operation and handling of machines, manufacturing process etc. If the selection of skilled worker is done properly, then it will result in effective operation of the manufacturing process, administration, etc. Mother dairy also follows technical skills, innovative skills, communication skills. In Mother dairy, all new recruits are provided on the job-training or induction, before they are actually placed on the job, for which they are recruited. By this process, the individuals have the advantage of having first-hand knowledge & experience of the working condition.

As the milk and milk products are perishable in the nature so they handled carefully. So it required skilled manpower for handling, & skill in the sense testing of content, microorganism humidity and moisture. It needs training.
Training will be conducted at centre training institute, Bangalore Dairy newly recruited employees will be at central training for about a month. Training for junior technical officer about a month. Training for a technical officer about a month, they will be sent to Gujarat to know about various activities related to dairy.

It include distinctive competencies that reside in the organisation. These can be distinctive competencies people, management practice, systems and technology. What new capabilities the organisation need to unlearn to compete in future. This can be learnt through a SWOT Analysis. The competent skills of the people include good communication and presentation skills, strong academic record, consistent in the performance level etc.
Skill Matrix Levels | Skills required | Top level | Communication skills, professional skills, leadership skills, challenging skills, problem solving skills, decision making skills, conceptual and design skills. | Middle level | Communication skills, leadership skills, conceptual and interpersonal skill, presentation skills, decision making skills. | Low level | Communication skills, technical skills, behavioural skills, customer handling skills. |

3. STYLE
In the daily activities Mother Dairy is following the top down decision making method. The decision is taken at the top level management & it flows to the next level for its implementation. The suggestions are taken from across the levels from gross root level regarding the problem or issues pertaining to the day to day activities. By analysing the suggestions the senior level takes the decisions. The decision will pass to the head of different divisions. The divisional head will pass that to the senior managers of concerned departments for its implementation. In this type of decision making style the middle level can suggest but the decision making authority rest with top management.

A. There is no differentiation, but the superiors & the subordinates with the various degree of responsibility B. To achieve the common goals so called has to make collaboration with in and across organization boundaries. Example: Amul C. By talking new ideas and views on procurement of milk from different source and decision making. D. Try to solve and balance conflicts between the employees & milk unions E. Share the information in decentralized manner F. Involvement of managers with their associative by sharing the views and ideas. G. Take initiative to support various functional strategies

4. STRATEGY
The major areas of strategic goals of Mother dairy are: Major | Description | a. Marketing standing | New markets, including areas in which new products are needed and service goals aimed at building customer loyalty. | b. Innovation | Innovation in products services as well as innovation in skill and activities required to supply them. | c. Human resources | Supply, development and performance of manager’s employee attitudes. | d. Financial resources | Sources of capital supply and how it will be utilised. | e. Physical resources | Physical facilities and how they will be utilised in providing services. | f. Productivity | Efficient use of resources to out of resources relatives to outcomes. | g. Social responsibility | Responsibilities in such area as concern for community and ethical behaviour. |

Strategy is the set of decision and action plans aimed at gaining a substantial competitive advantage. Today, most of the enterprises are engaged in strategic planning. The degree of the sophistication and the formative vary considerably from organisation to organisation. Strategy includes objectives, purpose & policies, action plans & tactics. 1. To maintain a dominant position in development, manufacture and marketing of defences, earth moving and construction and rail, metro equipment. 2. To provide total engineering solutions to its customers. 3. To diversify and grow. 4. To maintain state of the art technology for all products. 5. Re-orientation of the business operations to match present scenario. 6. To be competitive, expansive and to continuously improve service to achieve customer satisfaction. 7. To improve profitability.
PURPOSE:
To supply milk and milk product in India & overseas.
POLICIES:
It is guided by the State Government, to a limited extent.

a) Development of intermediates and bulk milk products order using a variety of procurement technologies of milk. b) Providing assured & remunerative market for the milk produced by the farmers c) Improving the quality status of milk & their derivatives to urban consumers d) Milk &milk products should undergo various test conducted by the quality control department e) Development of cattle field plants of 100TPD capacities each & one plant of 200TDP capacities with mineral mixture production facility in one unit.
Quality control:
It will be done 3 times
1) Before packing
2) While production
3) Incoming milk will be checked properly
Some test conducted by the quality control department 1) Alcohol test 2) COB test(clot on boiling) 3) Detection of adulterant 4) Detection of preservation 5) Detection of acidity 6) Determination of solid non fat 7) Analysis of pasteurized milk 8) Analysis of chemical test 9) Determination of carbonate and bicarbonate 10) Determination of coil from in skim milk

5. SYSTEM
Systems in the 7-s framework refer to all the rules, regulations, methods and procedures that complement the organisational structure. Mother dairy is a fully mechanized plant. The function of production control department in Mother dairy factory is that it provides the parts for the production shops, products of required quality and quantity at the required time and also provides the parts for the production shops, products of required quality and quantity at the required time and also provides feedback to the production department and allocates or optimizes the resources available to achieve the objectives. The production planning is valid factor in the designing of products that determines the equipment, capacity etc. This helps the company to take necessary steps in their daily transaction

Online computer transaction system at Mother Dairy
Presently mother dairy is having a system of all major being carried on through its online computer system. The major areas covered are 1. All milk distributers to retailers/ factories/institutions. 2. All incoming milk weightiest billing and its accounting 3. All financial accounts, books maintenance, employees pay roll, sales transactions 4. Maintaining database of all above said transaction 5. Create constancy of purpose and improve services for long range needs rather than short term profitability. 6. Search continually problems in the system and improve process. 7. Encourage effective two way communication and other means to drive fear throughout the organisation and help people to work more productively.

Benefit of the MIS 1. Shift wise receipt & issue statement 2. Material balance between any period ( weekly, monthly. Daily) 3. Milk processing butter ghee register 4. Milk conversion statement, quality reports of film, packing material et

6STAFF
Total staff strength, permanent, contract labour and security SL NO | TYPES | NUMBERS | SALARY PER MONTH | 1 | Permanent | 324 | 2525876 | 2 | Contract labourers | 350 | 1575000 | 3 | Security | 41 | 106371 |
Labour Welfare Measures Mother dairy provides good financial benefits to its employees, such as regular in the Dearness Allowance based on the increase in the All India Consumer Price Index, Provident Fund, Gratuity, Annual increment, Medical benefits, besides other welfare measures, etc.......
Provident Fund
In Mother dairy provident fund is contributed as follows: 12% of month basis salary + dearness allowance, which is matching contributed by the Managements contribution
Medical Benefits
Mother dairy also extends medical support to its officers & employees under two categories: i. For outpatient treatment against a fixed sum, reimbursements are made for self & dependent family members, in respect of officers. For Employees, the entitled medical allowances are given in 2 instalments in April & in September each year. ii. For inpatient treatment direct payment of hospitalization charges for self & dependent family members at company recognised hospitals is provided, normally without any ceiling.

Retirement
Type of ownership of Mother dairy is state govt. So the workers get retired at the age of 60yrs. After the retirement Mother dairy gives gratuity to their employees but no pension. In order to have eligibility for gratuity benefit the employees of dairy has to complete minimum 5 years of service. In each year he should have perfect attendances. The person who retires or resigns is eligible to get gratuity at the rate of 26 days salary multiplied by number of years of service.
Insurance Coverage
All the vehicles belonging to Mother dairy minority in all the branches, all the buildings & go downs have been bought under suitable insurance coverage, as could be seen from the records of Mother dairy. And the fixed assets registered are maintained and posted up to date.

Welfare Measures in Mother dairy
The following are some of the welfare measure providing to the workers of Mother dairy. These measures are classified as statutory measures and non-statutory measures.
Statutory Measures: I. Canteen Facilities. II. Cold water facilities. III. Medical benefit.
Non-Statutory Measures: a. Uniforms b. Safety shoes are provided.
The employees state insurance facilities
Leave Provision
In Mother dairy workmen gets 7 days casual leave per year & officers gets 12 days per year.
Duration of Work
In the Mother dairy, there are three shifts. The normal hours of work are 8 hours. The timings of 1 shift are as follows. SHIFT TIMINGS 1st shift 9a.m to 5p.m
Duties and responsibility a) To report him or her to duty to place to which he/she posted b) Employees not to seek outside employment c) To obey and abide the rule, regulation, service conditions and standing orders which the KMF may adopt, prescribe, frame time to time to govern its employee
Training will be known about catlefield plant, insemination.
This expertise enables the group to provide high quality end& cost effective milk products to domestic markets.
Both Bangalore dairy and mother dairy operates with different product lines in the areas of routine use of milk product like ghee, butter, ice-cream in mother dairy and sweet product like kova, Nandini, Mysore pak, burfi, Nandini peda’s, curds in Bangalore dairy A typical job in the manufacturing industry would require the following skills:

7SHARED VALUE Shared values are what engender trust. Values are identified by which a company is known through its business areas, these values must be explicit stated as both corporate and individual states
The value of organisations is:
Honesty & discipline
Paying reasonable prices to farmers
Quality
Mutual trust and belief
Transparency, co-operation & team work
The member works today towards the growth and success of the unit. The employees responsibility and protect the company’s name and integrity. There is no sharing of confidential/ importance information with the outsiders. There is collective responsibility and account ability on the part of its members. This can be said as the shared values of the employees of the organisation

CHAPTER 4
4. SWOT ANALYSIS OF THE COMPANY STRENGTH 1. It is located in a place where good infrastructure is available. 2. Certificate like ISO9002 and IS 15000 (HACCP) 3. Since it is a government organisation there is no any strikes, lockouts, or any other labour union problems. 4. The company is concentrated towards the quality of the products. 5. The co-operative principle, which has laid the foundation of the company 6. Co-ordination in each department is good

WEAKNESS 1. The company has to focus more on sales, marketing 2. Employee productivity is less as with any other government organisation 3. The promotion procedure in the organisation is too rigid 4. Consumer oriented services are not time bound of satisfaction
OPPORTUNITIES
1. It has got enough infrastructure to expand production capacity 2. As NANDINI is well known brand, it has an opportunity to diversify into some other business. 3. MOTHER DAIRY is concerning with only local market can enter into other markets. 4. MOTHER DAIRY is recruiting its labour on both permanent and contract basis. It has opportunity to meet production as per fluctuating demand.

THREATS I. Threat due to entrance of the new private firms into milk processing and stiff competition between brands like Aroghya, Heritage, Good life ,Nestle and other brands II. As mother dairy is owned by Karnataka government change in policies of the government affects the mother dairy.

5.1 ANALYSIS OF THE FINANCIAL STATEMENT
From the above financial statement source of MOTHER DAIRY were fluctuated year after year from 2008-12. It is due to maintenance of reserve fund & loans and advances were increased & decreased. These things totally related to the company requirements. If dairy makes heavy profit they maintain heavy reserves & surplus. Applications of funds of MOTHER DAIRY were steadily increased year after year. It is due to inventory, sundry debtors & bank balance, loans and advances all these fluctuating year after year from 2008-12. It implies further change increase or decrease of production price, paid to the suppliers& its depending on credit limit given to sundry debtors. Sales of the company increasing year after y

CHAPTER 5
5.1 LITERATURE REVIEW
EXAMPLE:
1) PAULO S. F. BARBOSA* and PRISCILLA R. PIMENTEL (18 January 2001) volume number CEP13081-970, Campinas, SP, Brazil conducted study on “A linear programming model for cash flow management in the Brazilian construction industry”. The study focus on a linear programming model has been developed for optimal cash flow management addressing specific cash flow issues related to the construction industry.
These include typical financial transactions, possible delays on payments, use of available credit lines, effect of changing interest rates, and budget constraints that often occur in the construction industry. A linear programming model is presented aiming at providing cash flow management for projects in the construction industry. The model assumes cash flow management on monthly basis with compound interest rates from one month to the next.

2) Amaia Lusa*, Carme Martı´nez-Costa and Marta Mas-Machuca (11 January 2011) Vol. 50, No. 6, conducted study on “An integral planning model that includes production, selling price, cash flow management and flexible capacity”. This study focus on in this paper, we discuss an aggregate planning problem that includes production, selling price, cash management and flexible capacity (by means of hiring and firing and with the possibility of unlimited production subcontracting.) In this paper, a planning model that integrates production, staff and marketing decisions is proposed. Demand is assumed to be a nonlinear function of the selling price, as are the incomes. The nonlinear functions are linearized by means of mixed integer linear programming tools. The model has a high number of binary variables, but is solved to optimality within a few seconds, using standard optimisation software (CPLEX 11.0) on a PC. Hence, the model could be the basis of a decision tool that could be used by many companies. 3) R A J I V D. B A N K E R ,∗ R O N G H U A N G ,† A N D R A M A C H A N D R A N NATAR AJAN (14 April 2006; accepted 3 January 2009.)(Vol. 47 No. 3 June 2009) conducted study on “Incentive Contracting and Value Relevance of Earnings and Cash Flows”. This study focus on Accounting performance measures such as earnings and cash flows are useful for both valuation and performance evaluation purposes. However, little evidence exists on whether there is any association between these two roles. In this study, we provide large sample empirical evidence that the value relevance of earnings explains a significant amount of the cross-section all variation in the pay-sensitivity of earnings and the incremental value relevance of cash flows explains variation in the marginal pay-sensitivity of cash flows.
Accounting performance measures such as earnings and cash flows seek to serve multiple purposes in organizations. Prior studies have investigated their usefulness for valuation and incentive contracting purposes separately. 4) YAIR E. ORGLER conducted study on “AN UNEQUAL-PERIOD MODEL FOR CASH MANAGEMENT Decision’s*(VoL 16, No 2,) The purpose of this study is to develop an applicable method for solving the meh management problem by deriving a linear programme^ model that is divided into unequal periods. The unequal time division maintains the day-to-day aspect of the problem while reducing the number of periods and variables to a manage^le side. Decision variables are divided into four groups: the payment schedule, securities transactions, short-term financing, and the cash balance. A brief discussion of the cash management problem and some current solutions was followed by a general description of the suggested approach and a detailed discussion of the unequal-period model. Inter- and intra-period relationship among all relevant decision variables were emphasised

CHAPTER 6

6.1 RESEARCH DESIGN
TITLE – “A STUDY ON CASH MANAGEMENT AT MOTHER DAIRY (A UNIT OF KMF) BANGALORE”

6.2 STATEMENT OF THE PROBLEM
Management of cash is one area, which attracts the immediate attention Management of the cash is the most important for the success of the any organisation which is capable of managing cash and related activities effectively. Hence this topic is selected to evaluate the financial soundness and the market standing of the company in order to give better scope to investors, creditors and management and to know whether the cash management is effective or not.

6.3 OBJECTIVE OF THE STUDY 1. To study the finance function of the organization and its nature 2. To establish reliable forecasting and reporting system 3. To know the company cash payment and minimum cash reserve 4. To know the cash position of the company

6.4 SCOPE OF THE STUDY
With the technology advent in all spheres it would only follow that organisations would use it as a platform to cut their operating cycles and to take advantage of all the available investment opportunities which may arise. This can be done only with the help of better cash management, which for long has been a neglected area, by Indian corporates. The project attempts to understand the tolls offered by institutions today that make this possible. Both sides of the services of collections as well as payments have sought to be examined with an emphasis on how these products have developed and offered by banks in India 1. This includes study of cash management of specific industry 2. The study is confirmed to analysing the components of cash flows and short term and long term funds 3. The findings and suggestions from this study will help the industry to frame a suitable financial strategy for the better operations of the organization
6.5 Methodology of data collection
Methodology depends on the nature of the project work. The use of proper methodology is an essential part of any research. The quality of the project work depends on upon the methodology adopted the study. Methodology is nothing but a plan or a strategy of investigation process that sets out to obtain solutions to the study.
Primary data
Primary data is mainly collected through observations,

Secondary data I. Collection of data through company annual reports, company profile II. By websites III. By journals and text books
6.6 LIMITATION 1. The study is confined to finance department 2. The study is limited to mother dairy 3. This may not applicable to other banks and financial institution. And the topic is not universal 4. The study has been purely for academic purpose
Being an academic study it suffers from time and cost consideration 7.7 GENARAL INTRODUCTION CASH MANAGEMENT
Effective cash management is technically challenging. Active management in particular needs a strong commercial sector infrastructure with efficient banking, settlement and clearing systems and adequate data transfer capacity. Within government, as well as skilled staff, it requires efficient information management systems and the associated analytical capabilities. Operational risk can be better managed if these systems are also integrated
Cash, the most liquid asset, is of vital importance to the daily operations of business firms. While the proportion of corporate assets held in the form of cash is very small, often between 1and 3%, its efficient management is crucial to the solvency of the business because in a very important sense cash is the focal point of fund flows in a business. In view of its importance, its generally referred to as the “life blood of business enterprise”.

Meaning of cash
Cash: Motives of handling cash. 1. Transaction: To meet cash needs that arises from doing business. 2. Precautionary: having cash on hand for unexpected needs 3. Speculative: To take advantage of potential profit-making situations 4. Trade-off: cash decreases risk of insolvency but earns no returns

Managing cash inflow:
Reducing float can speed up cash receipts

5. Mail float:
Length of time from the moment a customer mails a check until the firm begin to process it. 6. Processing float:
The time required by a firm to process a check before it can deposited in a bank. 7. Transit float:
Time required for a check to clear through the banking system and become usable funds. 8. Disbursing float:
It occurs because funds are available in a firm’s bank account until its payment check has cleared through the banking system

Pre-authorised check (PAC System):
Arrangement that allows firms to create checks to collect payments directly from customer accounts.
Benefits:
* Highly predictable cash inflow * Customer preferences- eliminates regular billing for customers * Increasing working cash-dramatically reduces mail float & processing float * Reduced expenses-eliminates billing &postage costs; reduces clerical processing costs.
Managing cash outflow:
Zero-Balance Account (ZBA’S): 1. Allows more control over cash outflows 2. Cash is transferred daily from the firms master account to restore the zero balances 3. Division accounts then have negative balances 4. Different division of a firm may write checks from may write checka from their own ZBA.
Why does firm need cash? As John Maynard Keynes put forth, there are three possible motives for holding cash.
Transaction motive
Firms need cash to meet their transaction needs. The collection of cash(from sale of goods and services, sale of assets, and additional financing) is not perfectly synchronised with the disbursement of cash(for purchase goods and services, acquisition of capital assets, and meeting other obligation. Hence, some cash balance is required as a buffer.
Speculative motive
Firms would like to tap profit making opportunities arising from fluctuations in commodity prices, security prices, interest rates, and foreign exchange rates. A cash-rich firm is better prepared to exploit such bargains. However, for most firms their reserve borrowing capacity and marketable securities would suffice to meet their speculative needs.
Precautionary motive
There may be some uncertainty about the magnitude and timing of cash inflows from sale of goods and services, sale of asset and insurance of securities. Likewise, there may be uncertainty about cash outflows on account of purchases and other obligations. To protect it against such uncertainties, a firm may require some cash.

CASH MANAGEMENT – BASIS STRATEGIES

The management should, after knowing the cash position by means of the cash budget, work out the basic strategies to be employed to manage its cash.

CASH CYCLE

The cash cycle refers to the process by which cash is used to purchase materials from which are produced goods, which are them sold to customers.
Cash cycle=Average age of firm’s inventory
+Days to collect its accounts receivables
-Days to pay its accounts payable.

The cash turnover means the numbers of times firm’s cash is used during each year.

CASH TURNOVER360CASH CYCLE

The higher the cash turnover, the less cash the firm requires. The firm should, therefore, try to maximize the cash turn.

MANAGING COLLECTIONS
a) Prompt Billing
By preparing and sending the bills promptly, without a time log between the dispatch of goods and sending the bills, a firm can ensure earlier remittance.

b) Expeditious collection of cheques
An important aspect of efficient cash management is to process the cheques receives very promptly.

c) Concentration Banking
Instead of a single collection center located at the company headquarters, multiple collection centers are established. The purpose is to shorten the period between the time customers mail in their payments and the time when the company has use of the funds are then to a concentration bank – usually a disbursement account.

d) Lock-Box System
With concentration banking, a collection center receives remittances, processes them and deposits them in a bank. The purpose is to lock-box system is to eliminate the time between the receipt of remittances by the company and their deposit in the bank. The company rents a local post office box and authorizes its bank in each of these cities to pick up remittances in the box. The bank picks up the mail several times a day and deposits the cheque in the company’s accounts. The cheques are recorded and cleared for collection. The company receives a deposits the cheque in the company’s accounts. The cheques are recorded and cleared for collation. The company receives a deposit slip and a lift of payments. This procedure frees the company from handling a depositing the cheques.

CONTROL OF DISBURSMENT

a) Stretching Accounts Payable
A firm should pay its accounts payables as late as possible without damaging its credit standing. It should, however, take advantages of the cash discount available on prompt payment.

b) Centralized Disbursement
One procedure for rightly controlling disbursements is to centralize payables in to a single account, presumably at the company’s headquarters. Such an arrangement would enable a firm to delay payments and can serve cash for several reasons. Firstly, it increases transit time. Secondly, if a firm has a centralized bank account, a relatively smaller total cash balances will be needed.

c) Bank Draft
Unlike ordinary cheques, the draft is not payable on demand. When it is presented to the issuer’s bank for collection, the bank must present it to the issuer for acceptance. The funds then are deposited by the issuing firm to cover payments of the draft. But suppliers prefer cheques. Also, bank imposes a higher service charge to process them since they require special attention, usually manual.

d) Playing the float
The amount of cheques issued by the firm but not paid for by the bank is referred to as the “payment float”. The differences between “payment float” and “collection float” are the net float. So, if a firm enjoys a positive “net float”, it may issue cheques even if it means having an ever drown account in its books. Such an action is referred to as “playing the float”, within limits a firm can play this game reasonably safely.
Thus management of cash becomes essential and it should be seen to, that neither excessive nor inadequate cash balances are maintained.
CASH FLOW ANALYSIS

The cash flow analysis is done with the help of cash flow statement. A cash flow statement is a statement depicting changes in cash position from one period to another. It is an important planning tool. Cash flow statement gives a clear picture of the source of cash, the uses of cash and the net changes in cash. The primary purpose of cash flow statement is to show that as to where from the cash to be acquired and where to use them.

UTILITY OF CASH FLOW ANALYSIS
A Cash flow analysis is an important financial tool for the management. Its chief advantages are as follows.

1. Helps in efficient cash management
Cash flow analysis helps in evaluating financial policies and cash position. Cash is the basis for all operation and hence a projected cash flow statement will enable the management to plan and co-ordinate the financial operations properly. The management can know how much cash is needed from which source it will be derived, how much can be generated, how much can be utilized.

2. Helps in internal financial management
Cash flow analysis information about funds, which will be available from operations. This will helps the management in repayment of long-term debt, dividend policies etc.,

3. Discloses the movements of Cash
Cash flow statement discloses the complete picture of cash movement. The increase in and decrease of cash and the reasons therefore can be known. It discloses the reasons for low cash balance in spite of heavy operation profits on for heavy cash balance in spite of low profits.

4. Discloses success or failure of cash planning
The extent of success or failure of cash planning be known by comparing the projected cash flow statement with the actual cash flow statement and necessary remedial measures can be taken.

DETERMINE THE OPTIMUM CASH BALANCE

One of the primary responsibilities of the financial manager is to maintain a sound liquidity position of the firm so that the dues are settled in time. The firm needs cash to purchase raw materials and pay wages and other expenses as well as for paying dividend, interest and taxes. The test of liquidity is the availability of cash to meet the firm’s obligations when they become due.
A firm maintains the operating cash balance for transaction purposes. It may also carry additional cash as a buffer or safety stock. The amount of cash balance will depend on the risk-return trade-off. If the firm maintains small cash balance, its liquidity position weakens, but its profitability improves as the released funds can be invested in profitable opportunities (marketable securities). When the firm needs cash, it can sell its keeps high cash balance, it will have a strong liquidity position
Optimum cash balance under certainty
BAUMOL’S MODEL
The Baumol model of cash management provides a formal approach for determining a firm’s optimum cash balance under certainty. It considers cash management similar to an inventory management problem. As such, the firm attempts to minimize the sum of the cost of holding cash (inventory of cash) and the cost of converting marketable securities to cash.
The baumol’s model makes the following assumptions: I. The firm is able to forecast its cash needs with certainty. II. The firm’s cash payments occur uniformly over a period of time. III. The opportunity cost of holding cash is known and it does not change over time. IV. The firm will incur the firm sells securities and starts with a converts securities to cash

Cash balance

C

C/2 Average

Time

0 T1 T2 T3 Cash balance

C

C/2 Average

Time

0 T1 T2 T3

Baumol’s model for cash balance

Cost trade-off: Baumol’s model
Optimum Cash Balance under uncertainty
The Miller-Orr Model
The limitation of the Baumol model is that it does not allow the cash flows to fluctuate. Firms in practice do not use their cash balance uniformly nor are they able to predict do not use their cash inflows and outflows. The Miller-Orr model overcomes this shortcoming and allows for daily cash flow variation. It assumes that net cash flows are normally distributed with a zero value of mean and a standard deviation. The MO model provides for two control limits-the upper control limit and the lower control limit as well as a return point. If the firm’s cash flows fluctuate randomly and hit the upper limit, then it buys sufficient marketable securities to come back to a normal level of cash balance (the return point). Similarly, when the firm’s cash flows wander and hit the lower limit, it sells sufficient marketable securities to bring the cash balance back to the normal level (the return point)

The Latest Trends in North American Cash Management
Steve Wilder, Senior Vice President and JPMorgan Chase Treasury Services Western Hemisphere Corporate and Financial Institutions Sales Executive
The Drive towards Efficiency, Transparency, Standardization and Integration
Fragmentation is a key driver of corporate inefficiency. This has long been the case in the movement of paper checks and related remittance documents within the U.S. payments system, and the flow of goods, trade-related documents and funds within the broader global supply chain. As corporate treasurers pursue end-to-end automation for treasury and supply-chain activities, they understand that to achieve straight-through processing — and the subsequent optimization of working capital globally — they must integrate the payment and information components of a transaction.
Based on this drive for efficiency, three interrelated trends are shaping North America’s cash management landscape today. First, corporate treasurers and their banks are driving the convergence towards electronic payments to better integrate money and information flows. Second, there is a parallel convergence in international trade towards open account, electronic payment and the automation of information flows, as treasury pushes to integrate the physical and financial supply chains. On both fronts, solutions are emerging to digitize paper wherever it persists. Third, as companies continue to expand globally — and information and money flows follow.

7. DATA ANALYSIS AND INTERPRETATION
TOOLS USED IN THE ANALYSIS 1. Trend analysis 2. Ratio analysis.
Period of study
The present study has taken into account Five years viz., 2008-2009 to 20012-2013.
7.1 TREND ANALYSIS
7.1(a) CURRENT ASSET
Table 1 YEAR | X | X2 | CURRENT ASSET(Y) | XY | 2008-09 | -2 | 4 | 14,15,67,220.97 | -28,31,34,441.9 | 2009-10 | -1 | 1 | 12,35,45,341.81 | -12,35,45,341.8 | 2010-11 | 0 | 0 | 19,53,14,082.09 | 0 | 2011-12 | 1 | 1 | 27,66,64,998.49 | 27,66,64,998.5 | 2012-13 | 2 | 4 | 22,95,76,831.5 | 45,91,53,663 | TOTAL | 0 | 10 | 96,66,68,474.9 | 32,91,38,904.8 |

Y = a + bX

a=YN ; b = ∑XY ∑X2 a=96, 66, 68,474.9/5
=19, 33, 33,695 b=32, 91, 38,904.8/10 = 3, 29, 13,890.48
Inference:
This table shows that the current asset of the company will be fluctuated. When compared to the beginning of the period of study its must be increased. Current Asset value in 2014 will be it must be more than 24crore

7.1(b) Inventories
Table 2 Year | X | x² | Y | Xy | 2008-09 | -2 | 4 | 11,51,03,287.80 | 46,04,13,151.2 | 2009-10 | -1 | 1 | 6,26,89,506.43 | 6,26,89,506.43 | 2010-11 | 0 | 0 | 14,60,31,762.31 | 0 | 2011-12 | 1 | 1 | 16,53,56,323.85 | 49,57,50,766 | 2012-13 | 2 | 4 | 12,39,37,691.48 | 1,18,42,09,747 | Total | 0 | 10 | 61,31,18,571.9 | 12,03,35,623.9 |

Y = a + bX a=61, 31, 18,571.9/5
=12, 26, 23,714.38 b= 12, 03, 35,623.9/10
=1, 20, 33,562.39
Inference
This table indicates that the volume of inventory has been fluctuating every year. Its must be decreased for the last year 41418632.37
7.1(c) SUNDRY DEBTORS
Table 3 Year | X | x² | Y | Xy | 2008-09 | -2 | 4 | 2,09,93,500.28 | -4,19,87,000.56 | 2009-10 | -1 | 1 | 2,17,95,075.25 | -21795075.25 | 2010-11 | 0 | 0 | 2,74,05,938.27 | 0 | 2011-12 | 1 | 1 | 3,78,89,155.45 | 3,78,89,155.45 | 2012-13 | 2 | 4 | 5,57,97,717.77 | 11,15,95,435.5 | Total | 0 | 10 | 27,49,05,938.3 | 8,57,02,515.18 |

Y = a + bX

a=27, 49, 05,938.3/5 b=8, 57, 02,515.18/10
=5, 49, 81,187.66 =85, 70,251.52

Inference: This table shows that the Sundry Debtors has been more every year. It must be increased more than 6 times from the beginning of the period of the study.

7.1(d) CASH &BANK BALANCE
Table 4 Year | X | x2 | Y | Xy | 2008-09 | -2 | 4 | 54,70,433.17 | -1,09,40,866.34 | 2009-10 | -1 | 1 | 3,90,60,760.13 | -3,90,60,760.13 | 2010-11 | 0 | 0 | 2,18,76,381.51 | 0 | 2011-12 | 1 | 1 | 7,34,19,519.19 | 7,34,19,519.19 | 2012-13 | 2 | 4 | 4,98,41,422.25 | 9,96,82,844.5 | Total | 0 | 10 | 1896,68,516.25 | 12,31,00,737.2 |
Y = a + bX a=18, 96, 68,516.25/5

=3, 79, 33,703.25 b=12, 31, 00,737.2/10
=1, 23, 10,073.72
Inference: The cash value of the Mother Dairy has been increased and the estimated it should be decreased for the previous year.

7.2 RATIO ANALYSIS
Ratio Analysis is a powerful tool of financial analysis. A Ratio is defined as “the indicated quotient of two mathematical expressions” and as “the relationship between two or more things”. In financial analysis, a ratio is used as a benchmark for evaluating the financial position and performance of a firm.
Ratio helps to summarize large quantities of financial data and to make qualitative judgment about the firm’s financial performance.
7.2(a) ABSOLUTE LIQUIDITY RATIO
=Cash in hand /bank+ short term marketable security/ current liability
Table 5 YEAR | CASH | CURRENT LIABILITY | RATIO | 2008-09 | 54,70,433.17 | 35,45,56,261.7 | 0.015 | 2009-10 | 390,60,760.13 | 30,08,30,221.93 | 0.129 | 2010-11 | 218,76,381.51 | 46,41,99,032.19 | 0.047 | 2011-12 | 7,34,19,519.19 | 59,35,33,806.6 | 0.123 | 2012-13 | 498,41,422 | 43,51,94,073.36 | 0.114 |

Analysis: From the above table we find that in 2008-09 54,70,433.17rs, 2009-10 390,60,760.13, 2010-11 218,76,381.51, 2011-12 7,34,19,519.19, in 2012-13 it is 498,41,422 rs. Current liabilities are from 2008 to 2013 is 35,45,56,261.7, 30,08,30,221, 4641,99,032.19,59,35,33,806.6,43,51,94,073

Graph 1

INFERENCE: The organization is maintaining a stable level of cash of 0.125 , for each rupee of current liability obligation. Even then it is far below the standard ratio i.e., 1:2. It has recorded a highest ratio of 0.129 in 2009-10 and lowest of 0.015 in 2008-09.
7.2(b) CASH TO CURRENT ASSET RATIO
Table 6 YEAR | CASH | CURRENT ASSET | RATIO | 2008-09 | 54,70,433.17 | 14,15,67,221 | 0.0386 | 2009-10 | 3,90,60,760.13 | 12,35,45,341.8 | 0.316 | 2010-11 | 2,18,76,381.51 | 19,53,14,082 | 0.112 | 2011-12 | 7,34,19,519.19 | 27,66,64,998.5 | 0.265 | 2012-13 | 4,98,41,422.25 | 22,95,76,831.5 | 0.217 |

ANALYSIS: From the above table we find that in 2008-09 54,70,433.17rs, 2009-10 390,60,760.13, 2010-11 218,76,381.51, 2011-12 7,34,19,519.19, in 2012-13 it is 498,41,422 rs. Current asset are from 2008 to 2013 is Rs14,15,67,221,12,35,45,341.8 ,19,53,14,082, 27,66,64,998.5 ,22,95,76,831.5
Graph2

Inference: The Company as a policy of maintaining cash position at 0.265 to 0.316 of current assets. As in all the years, it is maintaining cash position in and around the ideal level. We can say that organization if following effective cash management policy.

7.2( c) SUNDRY DEBTORS TO CURRENT ASSET RATIO
Table 7

SUNDRY DEBTORS TO CURRENT ASSET RATIO | Year | S.DEBTOR | CURRENT ASSET | Ratio | Increase/decrease | 2008-09 | 2,09,93,500 | 14,15,67,221 | 0.15:1 | - | 2009-10 | 2,17,95,075 | 12,35,45,341.8 | 0.18:1 | 0.03 | 2010-11 | 2,74,05,938 | 19,53,14,082.1 | 0.14:1 | -0.04 | 2011-12 | 3,78,89,155 | 27,66,64,998.5 | 0.14:1 | 0 | 2012-13 | 5,57,97,718 | 22,95,76,831.5 | 0.24:1 | 0.1 |
The formula for the ratio is Sundry Debtors
Current Assets
ANALYSIS: From the above table sundry debtors 2008-09 to 2012-13 are 2,09,93,500 , 2,17,95,075, 5,57,97,718 It is increasing every year.
CURRENT ASSET from 2008-09 to 2012-13 14,15,67,221 , 22,95,76,831.5
In the starting days it is decreasing and later it is increasing and the end once again reduced

Graph 3

INTERPRETATION:
From the table the Sundry Debtors to Current Assets Ratio shows a fluctuating trend throughout the study period from 2008-09 to 2012-13
The average ratio is 0.17 times. Hence it implies the credit policy followed by MOTHER DAIRY is moderate.
7.2 (d) CASH TO SALE RATIO
Table 8

Year | CASH | SALE | Ratio | Increase /decrease | 2008-09 | 54,70,433 | 1,91,66,43,404 | 0.003:1 | - | 2009-10 | 3,90,60,760 | 2,07,08,38,139 | 0.019:1 | 0.016 | 2010-11 | 2,18,76,382 | 2,73,20,62,682 | 0.008:1 | -0.011 | 2011-12 | 7,34,19,519 | 3,41,61,97,301 | 0.021:1 | 0.013 | 2012-13 | 4,98,41,422 | 4,15,47,03,329 | 0.020:1 | -0.01 |

The formula for the ratio is Cash Sales

ANALYSIS:
From the above table sales another item of funds to the company, the above table shows the sales from 2008-09 to 2012-13. Are 1,91,66,43,404, 2,07,08,38,139, 2,73,20,62,682, 3,41,61,97,301, and 4,15,47,03,329 it is there in the increasing trend in every year. Cash are 54, 70,433 to 4, 98, 41,422 in the year 2008-09 and 2012-13 respectively

GRAPH 4

INFERENCE
This is one of the important ratios of controlling cash. A study of cash to sales ratio will provide a deep insight into the cash balances held in the concerns.
Evident from the table shows Cash to Sales registered a fluctuating trend throughout the study period.

7.2(e) CASH RATIO
Table 9

CASH TO CURRENT LIABILITIES | | Year | CASH | CURRENT LIABILITY | Ratio | Increase/decrease | 2008-09 | 54,70,433 | 35,45,56,261.7 | 0.015:1 | - | 2009-10 | 3,90,60,760 | 30,08,30,221.9 | 0.13:1 | 0.115 | 2010-11 | 2,18,76,382 | 46,41,99,032.2 | 0.05:1 | -0.08 | 2011-12 | 7,34,19,519 | 59,35,33,806.6 | 0.07:1 | 0.02 | 2012-13 | 4,98,41,422 | 43,51,94,073.4 | 0.05:1 | -0.02 |

The formula for the ratio is Cash\Current liabilities
ANALYSIS: From the above table shows that Current liability 2008-09 to 2012-13 are 354556261.7, 300830221.9, 464199032.2, 593533806.6, and 435194073.4 in the year 2010-11 & 2012-13 it is increased and 2012-13 once again decreased

Graph5

INTERPRETATION
From the table it is noted that the cash position of the MOTHER DAIRY is satisfactory.
It is found that the cash required to meet out the current liabilities is maintained at a MODERATE level.

7.2(f) DEBTORS TURNOVER RATIO
Table 10 DEBTORS TURNOVER RATIO | | Year | SALES | S.DEBTOR | Ratio | Increase/ decrease | 2008-09 | 1,91,66,43,404 | 2,09,93,500.28 | 91.21 | - | 2009-10 | 2,07,08,38,139 | 2,17,95,075.25 | 95.01 | 3.72 | 2010-11 | 2,73,20,62,682 | 2,74,05,938.27 | 99.6 | 4.59 | 2011-12 | 3,41,61,97,301 | 3,78,89,155.45 | 90.16 | -9.47 | 2012-13 | 4,15,47,03,329 | 5,57,97,717.77 | 74.46 | -15.7 |
The formula for the ratio is Sales Sundry Debtors
ANALYSIS: From the above table shows that from the year 2008-09 to 2012-13 sales increased every year Are 1916643404, 2070838139,2732062682,3416197301,4154703329 and sundry debtors in the last year increased compare to last year 37889155.45 to 55797717.77

Graph 6

INTERPRETATION:
This is one of the techniques employed by the company with regard to the collection of the receivables through effective management of collection policy with the help of factoring services.
From the table it shows that the Debtors’ turnover Ratio had satisfactory increase in the starting of the study period. However, in end of the study period it had slight fluctuations, the company was able to raise it in the next year.

7.2(g) LOANS & ADVANCES TO CURRENT ASSET RATIO

Table11 Year | LOANS | CURRENT ASSET | Ratio | Increase\decrease | 2008-09 | 9,33,77,255 | 14,15,67,221 | 0.65 | 0 | 2009-10 | 1,75,81,958 | 1,23,54,53,41.8 | 0.14 | -0.51 | 2010-11 | 1,33,31,484 | 19,53,14,082.1 | 0.06 | -0.06 | 2011-12 | 2,28,81,897 | 27,66,64,998.5 | 0.08 | 0.02 | 2012-13 | 1,89,64,261 | 22,95,76,831.5 | 0.08 | 0 |
The formula for the ratio is Loans and Advances Current Assets

ANALYSIS: From the above table 2008-09 to 2012-13 are Rs 9,33,77,255, 1,75,81,958, 1,33,31,484, 2,28,81,897, 1,89,64,261 respectively. Loan and advances increasing year by year

Graph 7

INTERPRETATION:
From the table it is noted that the Loans and Advances to Current Assets Ratio have registered a fluctuating trend.
It implies that a quarter positions of the Current Assets are kept in for Loans and Advances; thereby it is found that MOTHER DAIRY value of Loans and Advances is not satisfactory. At the end of the study period ratio is same. Increase in the loans and advances due to non-payment of loans

7.2(h) INVENTORIES CURRENT ASSET RATIO
Table 12

Year | inventory | current asset | Ratio | Increase/decrease | 2008-09 | 11,51,03,288 | 14,15,67,221 | 0.22:1 | - | 2009-10 | 6,26,89,506 | 12,35,45,341.8 | 0.19:1 | -0.03 | 2010-11 | 14,60,31,762 | 19,53,14,082.1 | 0.28:1 | 0.09 | 2011-12 | 16,53,56,324 | 27,66,64,998.5 | 0.35:1 | 0.07 | 2012-13 | 12,39,37,691 | 22,95,76,831.5 | .32:1 | -0.03 |

The formula for the ratio is Inventories Current Assets
ANALYSIS: from the above table shows that year 2008-09 to 2012-13 inventories are Rs 11,51,03,288, 6,26,89,506, 1,14,60,31,762, 16,53,56,324, 12,39,37,691.. in the year 2009-10 its decreased and later stage increasing trend and end of the study period once again it is decreased

Graph 8

INTERPRETATION
From the table it is known that the Inventories to Current Assets Ratio also register a fluctuating trend during the entire study period.
The average ratio is 0.27times and thus it is found that the investment in inventories (being one of the important Current Assets) is kept at the considerable level

7.2(i) INVENTORY TURNOVER RATIO
Table 13 Year | cogs | avg stock | Ratio | Increase\decrease | 2008-09 | 1,81,97,42,366 | 8,88,96,397.12 | 16.02 | | 2009-10 | 2482254783 | 1,04,43,60,634 | 20.47 | 4.45 | 2010-11 | 3,12,45,57,255 | 15,56,94,043 | 23.78 | 3.31 | 2011-12 | 3,74,21,71,315 | 14,46,47,007.6 | 20.06 | -3.64 | 2012-13 | 1,70,94,20,993 | 10,66,96,578.2 | 25.87 | 5.81 |
The formula for the ratio is Cost of Goods Sold Average Stock
ANALYSIS: From the above table cost of goods sold in the year 2008-09 to 2012-13 Rs 1,81,97,42,366, 2,48,22,54,783, 3,12,45,57,255, 3,74,21,71,315, and 1,70,94,20,993 respectively. Except last year all are in increasing trend. Average stock is Rs 8,88,96,397.12, 1,04,43,60,634, 15,56,94,043, 14,46,47,007.6, 10,66,96,578.2 respectively. It is fluctuating throughout the year

Graph 9

INTERPRETATION:
This ratio indicates whether investment in inventory is efficiently used or not and whether the investment is within proper limits.
From the table it is found that the Inventory turnover Ratio of MOTHER DAIRY had some fluctuations in the starting of the study period then it had a growth in it.
Hence the efficiency of inventory control in MOTHER DAIRY shows a considerable position.

7.2(j) CURRENT RATIO

Table 14

Year | CURRENT ASSET | CURRENT LIABILITY | Ratio | Increase/decrease | 2008-09 | 14,15,67,221 | 35,45,56,261.7 | 0.399 | - | 2009-10 | 1,23,54,53,41.8 | 30,08,30,221.9 | 0.41 | 0.011 | 2010-11 | 19,53,14,082.1 | 4,64,11,99,033 | 0.04 | -0.37 | 2011-12 | 27,66,64,998.5 | 59,35,33,806.6 | 0.466 | 0.426 | 2012-13 | 22,95,76,831.5 | 43,51,94,073.4 | 0.53 | 0.064 |

The formula for the ratio is Current Assets Current liabilities
ANALYSIS: From the above table shows that Current liability 2008-09 to 2012-13 are 354556261.7, 300830221.9, 464199032.2, 593533806.6, and 435194073.4 in the year 2010-11 & 2012-13 it is increased and 2012-13 once again decreased. . In current asset in the year 2009-10 it is Rs12, 35, 45,341.8, 2010-11 Rs19, 53, 14,082. In 2011-12 it is 27, 66, 64,998.5 and end of the study it is decreasing to Rs 22, 95, 76,831

Graph 10

INTERPRETATION

This ratio is an indicator of the firm’s commitment to meet its short – term liabilities.
From the table it is clear that the Current Ratio of MOTHER DAIRY has been fluctuating from the starting of the study period, that is from 0.4 to 0.41 later it is decreased 0.04 for last year it has been increasing0.53 per cent hence the Current Ratio is quite satisfactory.
.

7.2(k) CURRENT ASSET TO TOTAL ASSET RATIO
Table 15

YEAR | CURRENT ASSET | TOTAL ASSET | RATIO | INCREASE\DECREASE | 2008-09 | 14,15,67,220 | 65,53,86,48,364 | 0.22:1 | - | 2009-10 | 12,35,45,342 | 65,16,17,674.4 | 0.19:1 | -0.03 | 2010-11 | 19,53,14,082 | 70,93,91,396.8 | 0.28:1 | 0.09 | 2011-12 | 27,66,64,998 | 79,70,27,329.8 | 0.35:1 | 0.07 | 2012-13 | 22,95,76,832 | 72,66,31,229.3 | 0.32:1 | -0.03 |

The formula for the ratio is Current Assets Total Assets
ANALYSIS: In current asset in the year 2009-10 it is Rs12, 35, 45,341.8, 2010-11 Rs19, 53, 14,082. In 2011-12 it is 27,66,64,998.5 and end of the study it is decreasing to Rs 22,95,76,831.5, in the total asset 2008-09 to 2012-13 Rs 65,53,86,48,364, 65,16,17,674.4, 70,93,91,396.8, 79,70,27,329.8, 72,66,31,229.3 it is increased study period.

Graph 11

INTERPRETATION:
The Table shows the Current Assets to Total Assets ratio of the company, which registered a fluctuating trend throughout the study period. This ratio varied from 0.19 to 0.28 times during the study. There is slight change for last year

7.2(l) CURRENT ASSET TO FIXED ASSET RATIO
Table 16 YEAR | FIXED ASSET | CURRENT ASSET | RATIO | INCREASE\DECREASE | 2008-09 | 42,04,42,008 | 14,15,67,221 | 0.34:1 | - | 2009-10 | 5,10,48,83,754 | 12,35,45,341.8 | 0.24:1 | -0.1 | 2010-11 | 50,07,45,831 | 19,53,14,082 | 0.39:1 | 0.15 | 2011-12 | 49,74,80,434 | 27,66,64,998.5 | 0.56:1 | 0.17 | 2012-13 | 47,80,90,136 | 22,95,76,831 | 0.48:1 | -0.08 |

The formula for the ratio is Current Assets Fixed Assets
ANALYSIS: From the above analysis current asset to fixed asset ratio has been fluctuating in the whole years. In that fixed asset from 2008-09 t0 2012-13 is Rs 42,04,42,008, Rs5,10,48,83,754, Rs 50,07,45,831, Rs 49,74,80,434, Rs 47,80,90,136.47.except 2009-10 all are in decrease trend. In current asset in the year 2009-10 it is Rs12, 35, 45,341.8, 2010-11 Rs19, 53, 14,082. In 2011-12 it is 27, 66, 64,998.5 and end of the study it is decreasing to Rs 22, 95, 76,831.5

Graph 12

| | | INTERPRETATION:The level of Current Assets can be measured by using this Current Asset to Fixed Assets Ratio. The level has been fluctuating every year | | | | | | | | | | | | | | |

CHAPTER 8
8.FINDINGS
1) The cash management of MOTHER DAIRY has been working well. 2) The company’s absolute liquidity ratio in all the years is far below the ideal level. So the firm should take steps to invest more in super quick assets. 3) Current Ratio shows that the company has sufficient funds to meet its short-term obligations The efficiency of inventory control in MOTHER DAIRY shows a satisfactory position.. 4) The Cash Ratio shows that the cash required to meet out the current liabilities is maintained at a normal level hence, it can lend that MOTHER DAIRY follows an average policy. 5) The Current Assets to Total Assets Ratio implies that is MOTHER DAIRY maintaining a considerable level of Current Assets in proportion to Total Assets. 6) The average Cash to Current Assets is maintained. Hence, it is found that the company had maintained a moderate level of cash in proportion to Current Assets. Cash & bank balance fluctuating to greater extent. It has been increased to 56%& 187%in the year 2010-11&2011-12respectively. 7) The average ratio of Sundry Debtors to Current Assets is maintained. Hence it implies that the credit policy followed by MOTHER DAIRY is moderate. Payable of sundry debtors increased every year, due to non-payment 8) The loans and Advances to Current Assets ratio of the company imply that a 25% of the Current Assets are kept in for loans and advances, which is considerable. Loans & advances are fluctuating year by year. 9) The company has maintain a good sales record compared to previous year & it enjoys the continues growth in the company. The average cash to sales ratio is 0.064times and which indicates that only 6.4% of sales has been maintained as cash with the business

8.2 SUGGESTION 1. MOTHER DAIRY need to try to match their Cash with the sales. In case of surplus Cash, it should be invested either in securities or should be used to repay borrowings. 2. The company may try to prepare a proper ageing schedule of debtors. This will help them to reduce the bad debts and speed up collection efforts. The company should be prompt in making payments so as to enjoy cash discount opportunities 3. The company can determine the optimum cash balance to be kept. The company followed an aggressive policy of financing working capital should try to finance 50% of their working capital using long term source and improve their status. 4. The current Ratio of 2:1 is considered normally satisfactory. MOTHER DAIRY can try to improve the current ratio. So it should invest large amount in current ratio, in order to maintain liquidity and solvency position of the concern. 5. The company needs to be following a matching policy for financing current Assets (i.e.) using both long term and short-term sources of finances. 6. It must draw the attention on the old machines accommodated on the floor as it incurs expenses to the company 7. It is recorded that there is increase in the direct staff expenses, so the company need to focus on controlling the cost or expenses incurred towards staff if it finds unnecessary

CONCLUSION

The Cash Management Analysis done on the financial position of the company has provided a clear view on the activities of the company. The use of the ratio analysis, trend analysis, other accounting and financial management helped in this study to find out the financial soundness of the company.
This project was very useful for the judgment of the financial status of the company from the management point of view. This evaluation proved a great deal to the management to make a decision on the regulation of the funds to increase the sales and bring profit to the company. The company is doing extremely well with regard to cash management in recent years. It has attracted more number of customer in the competitive business environment with it sound services.
Being a government sector undertaking , KMF has attached to more importance to welfare measure undertaken includes subsidized canteen, transport, hospital& other facilities on an average KMF spends for giving at most care & attention to the welfare of employees from rural places& self-employment at village level.
Before I conclude I wish to convey my thankfulness in regard to the training given to me in MOTHER DAIRY. It gave me extreme satisfaction and practical knowledge of the financial activities carried out in the company. The kindness, attention, and immense co-operation extended to me buy all the officials in the company made my project easy and comfortable. Really it was a very pleasant experience in MOTHER DAIRY.

LEARNING EXPERIENCE
The project training helped me in learning toward the corporate exposure as it is a practical way of learning about organization, to development and understands the organization system culture. Nature of production, strategies regarding their competitors, its future growth & prospectus etc. This study has given as insight in understand the various attributes of products as well as the order factors which influence the buying behavior of business markets for effective formulation of marketing strategies with product, promotion & placement because the advertisement & sales promotional strategies are very important for any product to become popular and push the sales up.

I. It helped me to feel the real business environment. II. To know the activities of the different staff. III. To know the various departments effectively contribute towards the organizational goal. IV. The project training helped us to know the various departments in details we can get the knowledge about the organization from different aspects and to study the function of different departments.