SHRIRAM RAGHAVENDRA MACS

CHAPTER 1 INTRODCUTION INTRODUCTION ABOUT FINANCIAL MANAGEMENT

Financial management means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise. It means applying general management principles to financial resources of the enterprise.

Financial management is that specialized activity which is responsible of the business and, therefore, it includes financial planning, financial administration and financial control.

Business concern needs finance to meet their requirements in the economic world. Any kind of business activity depends on the finance. Hence, it is called as lifeblood of business organization. Whether the business concerns are big or small, they need finance to fulfil their business activities.In the modern world, all the activities are concerned with the economic activities and very particular to earning profit through any venture or activities. The entire business activities are directly related with making profit. (According to the economics concept of factors of production, rent given to landlord, wage given to labour, interest given to capital and profit given to shareholders or proprietors), a business concern needs finance to meet all the requirements. Hence finance may be called as capital, investment, fund etc., but each term is having different meanings and unique characters. Increasing the profit is the main aim of any kind of economic activity.MEANING OF FINANCEFinance may be defined as the art and science of managing money. It includes financial service and financial instruments. Finance also is referred as the provision of money at the time when it is needed. Finance function is the procurement of funds and their effective utilization in business concerns.The concept of finance includes capital, funds, money, and amount. But each word is having unique meaning. Studying and understanding the concept of finance become an important part of the business concern.

DEFINITION OF FINANCEAccording to Khan and Jain, Finance is the art and science of managing moneyAccording to Oxford dictionary, the word finance connotes management of money.Websters Ninth New Collegiate Dictionary defines finance as the Science on study of the management of funds and the management of fund as the system that includes the circulation of money, the granting of credit, the making of investments, and the provision of banking facilities.

DEFINITION OF BUSINESS FINANCEAccording to the Wheeler, Business finance is that business activity which concerns with the acquisition and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise. According to the Guthumann and Dougall, Business finance can broadly be defined as the activity concerned with planning, raising, controlling, administering of the funds used in the business.In the words of Parhter and Wert, Business finance deals primarily with raising, administering and disbursing funds by privately owned business units operating in nonfinancial fields of industry.Corporate finance is concerned with budgeting, financial forecasting, cash management, credit administration, investment analysis and fund procurement of the business concern and the business concern needs to adopt modern technology and application suitable to the global environment.According to the Encyclopedia of Social Sciences, Corporation finance deals with the financial problems of corporate enterprises. These problems include the financial aspects of the promotion of new enterprises and their administration during early development, the accounting problems connected with the distinction between capital and income, the administrative questions created by growth and expansion, and finally, the financial adjustments required for the bolstering up or rehabilitation of a corporation which has come into financial difficulties.

TYPES OF FINANCEFinance is one of the important and integral part of business concerns, hence, it plays a major role in every part of the business activities. It is used in all the area of the activities under the different names.Finance can be classified into two major parts:

Types of Finance

Private Finance, which includes the Individual, Firms, Business or Corporate Financial activities to meet the requirements. Public Finance which concerns with revenue and disbursement of Government such as Central Government, State Government and Semi-Government Financial matters.

DEFINITION OF FINANCIAL MANAGEMENTFinancial management is an integral part of overall management. It is concerned with the duties of the financial managers in the business firm.The term financial management has been defined by Solomon, It is concerned with the efficient use of an important economic resource namely, capital funds. The most popular and acceptable definition of financial management as given by S.C. Kuchal is that Financial Management deals with procurement of funds and their effective utilization in the business.Howard and Upton : Financial management as an application of general managerial principles to the area of financial decision-making.Weston and Brigham : Financial management is an area of financial decision-making, harmonizing individual motives and enterprise goals.Joshep and Massie : Financial management is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.Thus, Financial Management is mainly concerned with the effective funds management in the business. In simple words, Financial Management as practiced by business firms can be called as Corporation Finance or Business Finance.

OBJECTIVES OF FINANCIAL MANAGEMENTEffective procurement and efficient use of finance lead to proper utilization of the finance by the business concern. It is the essential part of the financial manager. Hence, the financial manager must determine the basic objectives of the financial management. Objectives of Financial Management may be broadly divided into two parts such as: 1. Profit maximization2. Wealth maximization.

Objectives of Financial Management

Profit MaximizationMain aim of any kind of economic activity is earning profit. A business concern is also functioning mainly for the purpose of earning profit. Profit is the measuring techniques to understand the business efficiency of the concern. Profit maximization is also the traditional and narrow approach, which aims at, maximizes the profit of the concern. Profit maximization consists of the following important features.1. Profit maximization is also called as cashing per share maximization. It leads to maximize the business operation for profit maximization. 2. Ultimate aim of the business concern is earning profit, hence, it considers all the possible ways to increase the profitability of the concern.3. Profit is the parameter of measuring the efficiency of the business concern. So it shows the entire position of the business concern.4. Profit maximization objectives help to reduce the risk of the business.

Favourable Arguments for Profit MaximizationThe following important points are in support of the profit maximization objectives of the business concern:(i) Main aim is earning profit.(ii) Profit is the parameter of the business operation.(iii) Profit reduces risk of the business concern.(iv) Profit is the main source of finance.(v) Profitability meets the social needs also.

Unfavorable Arguments for Profit MaximizationThe following important points are against the objectives of profit maximization:(i) Profit maximization leads to exploiting workers and consumers.(ii) Profit maximization creates immoral practices such as corrupt practice, unfair trade practice, etc.(iii) Profit maximization objectives leads to inequalities among the sake holders such as customers, suppliers, public shareholders, etc.

Drawbacks of Profit MaximizationProfit maximization objective consists of certain drawback also:(i) It is vague: In this objective, profit is not defined precisely or correctly. It creates some unnecessary opinion regarding earning habits of the business concern.(ii) It ignores the time value of money: Profit maximization does not consider the time value of money or the net present value of the cash inflow. It leads certain differences between the actual cash inflow and net present cash flow during a particular period.(iii) It ignores risk: Profit maximization does not consider risk of the business concern. Risks may be internal or external which will affect the overall operation of the business concern.

Wealth MaximizationWealth maximization is one of the modern approaches, which involves latest innovations and improvements in the field of the business concern. The term wealth means shareholder wealth or the wealth of the persons those who are involved in the business concern. Wealth maximization is also known as value maximization or net present worth maximization. This objective is an universally accepted concept in the field of business.

Favourable Arguments for Wealth Maximization(i) Wealth maximization is superior to the profit maximization because the main aim of the business concern under this concept is to improve the value or wealth of the shareholders.(ii) Wealth maximization considers the comparison of the value to cost associated with the business concern. Total value detected from the total cost incurred for the business operation. It provides extract value of the business concern.(iii) Wealth maximization considers both time and risk of the business concern. (iv) Wealth maximization provides efficient allocation of resources.(v) It ensures the economic interest of the society.

Unfavourable Arguments for Wealth Maximization(i) Wealth maximization leads to prescriptive idea of the business concern but it may not be suitable to present day business activities.(ii) Wealth maximization is nothing, it is also profit maximization, it is the indirect name of the profit maximization.(iii) Wealth maximization creates ownership-management controversy.(iv) Management alone enjoy certain benefits.(v) The ultimate aim of the wealth maximization objectives is to maximize the profit.(vi) Wealth maximization can be activated only with the help of the profitable position of the business concern.

APPROACHES TO FINANCIAL MANAGEMENTFinancial management approach measures the scope of the financial management in various fields, which include the essential part of the finance. Financial management is not a revolutionary concept but an evolutionary. The definition and scope of financial management has been changed from one period to another period and applied various innovations. Theoretical points of view, financial management approach may be broadly divided into two major parts.

Traditional ApproachTraditional approach is the initial stage of financial management, which was followed, in the early part of during the year 1920 to 1950. This approach is based on the past experience and the traditionally accepted methods. Main part of the traditional approach is rising of funds for the business concern. Traditional approach consists of the following important area. Arrangement of funds from lending body. Arrangement of funds through various financial instruments. Finding out the various sources of funds.

Objectives of financial management; The financial management is generally concerned with procurement, allocation and control of financial resources of a concern. The objectives can be-1) To ensure regular and adequate supply of funds to the concern.2) To ensure adequate returns to the shareholders which will depend upon the earning capacity, market price of the share, expectations of the shareholders?3) To ensure optimum funds utilization. Once the funds are procured, they should be utilized in maximum possible way at lest cost.4) To ensure safety on investment, i.e., funds should be invested in safe ventures so that adequate rate of return can e achieved.To plan a sound capital structure-There should e sound and fair composition of capital so that a balance is maintained between debt and equity capital.

FUNCTIONS OF FINANCE MANAGERFinance function is one of the major parts of business organization, which involves the permanent, and continuous process of the business concern. Finance is one of the interrelated functions which deal with personal function, marketing function, production function and research and development activities of the business concern. At present, every business concern concentrates more on the field of finance because, it is a very emerging part which reflects the entire operational and profit ability position of the concern. Deciding the proper financial function is the essential and ultimate goal of the business organization. Finance manager is one of the important role players in the field of finance function. He must have entire knowledge in the area of accounting, finance, economics and management. His position is highly critical and analytical to solve various problems related to finance. A person who deals finance related activities may be called finance manager. Finance manager performs the following major functions:1. Forecasting Financial RequirementsIt is the primary function of the Finance Manager. He is responsible to estimate the financial requirement of the business concern. He should estimate, how much finances required to acquire fixed assets and forecast the amount needed to meet the working capital requirements in future.2. Acquiring Necessary CapitalAfter deciding the financial requirement, the finance manager should concentrate how the finance is mobilized and where it will be available. It is also highly critical in nature.3. Investment DecisionThe finance manager must carefully select best investment alternatives and consider the reasonable and stable return from the investment. He must be well versedin the field of capital budgeting techniques to determine the effective utilization of investment. The finance manager must concentrate to principles of safety, liquidity and profitability while investing capital.4. Cash ManagementPresent days cash management plays a major role in the area of finance because proper cash management is not only essential for effective utilization of cash but it also helps to meet the short-term liquidity position of the concern.

5. Interrelation with Other DepartmentsFinance manager deals with various functional departments such as marketing, production, personel, system, research, development, etc. Finance manager should have sound knowledge not only in finance related area but also well versed in other areas. He must maintain a good relationship with all the functional departments of the business organization..

Functions of financial management:

Estimation of capital requirements Determination of capital composition Choice of sources of funds Investment of funds Disposal of surplus Management of cash Financial controls

Scope/elements:

1. Investment decisions includes investment in fixed assets (called as capital budgeting). Investment in current assets is also a part of investment decisions called as working capital decisions.2. Financial decisions-they relate to the raising of finance from various resources which will depend upon decision on type of source, period of financing, cost of financing and the returns thereby...3. Dividend decision- The finance manager has to take decision with regards to the net profit distribution. Net profits are generally divided into two:a) Dividend for shareholders- Dividend and the rate of it has to e decided.Retained profits-Amount of retained profits has to be finalized which will depend upon expansion and diversification plans of the enterprise

OBJECTIVES OF THE STUDY

To understand about the cooperative society in the market

To study how does a cooperative society creates the risk or position

To study different sources of finance available with the firm for its operations

To know the total value of the firm

To compare one fund to another funds within the cooperative society of Shriram raghavendra MACS

To gain a practical experience in the industry and to understand their work culture

NEED FOR THE STUDY

Knowing the relationship between capital structure and value of a firm

To analyze the reason for low stock prices of the company

Studying relationship between Deposits and loans

To assess the impact of alternative plans on return on equity

It creates a large extent towards development economy of the nation

Interest paid is tax deductible, which lowers debts effective cost

RESEARCH DESIGNRESEARCH DESIGN Research was initiated by examining the secondary data to gain insight into the problem. By analyzing the secondary data the study aim is to explore the short comings of the present system and primary data will help to validate the analysis of secondary data besides on unrevealing the areas which calls for improvement.COLLECTION OF THE DATA PRIMARY DATAThe information gather from the organization is said to be as primary data in the study, which shows thatthey were the main source of Primary data.SECONDARY DATAIt was collected from internal sources. The secondary data was collected on the basis of organizational file, official records, manuals, newspapers, magazines, management books, preserved information from the company or its website.

RESEARCH METHODOLOGYThe study is based on primary and secondary data. The secondary data are those which have already been collected by someone else and which have already been passed through the statistical process

LIMITATIONS OF STUDY

Potential for increasing the vertical concentration in existing villages.

High level of client drop out leading to high average member promotion costs.

Lack of adequate levels of awareness amongst member on equity and saving withdrawal issue.

Marginally increasing tendency for absenteeism in group meeting

Low capital adequacy.

Secondary data collection from internet and magazines.

Cross-section data will be collected pertaining to previous accounting years.

Future trends may change. No forecasting is done due to non availability of data for time series analysis

CHAPTER 2INDUSTRY PROFILE

INDUSTRY PROFILE

INTRODUCTION:Co-operatives include non-profit community organization and business that are owned and managed by the people who use its services _a consumer cooperative) or by the people who work there (a worker cooperative) or by the people who live there (a housing cooperative), hybrids such as worker cooperatives that are also consumer cooperative or credit unions, multi-stakeholder cooperatives such as those that bring together civil society and local actors to deliver community needs, and second and third tier cooperatives whose members are other cooperatives.Cooperative is an autonomous association of persons who voluntarily cooperate for their mutual, social, economic, and cultural benefit.

Cooperation dates back as far as human beings have been organizing for mutual benefits and trading with the external communities.

In the final year of the 20th century, cooperatives banded together to establish a number of social enterprise agencies which have moved to adopt the multi-stakeholder cooperative modelCapital and the trap report that cooperatives tend to have a longer life then other types of enterprise, and thus a higher level of entrepreneurial sustainability.

For each Industrial cooperative have been organized with two objectives namely social and economic upliftment of the people below the poverty line. The most important social objective is to safeguard the interest of the poorest section against exploitative trends and to pave way for diffusions and dispersal of wealth. The economic objectives of these societies are to create employment opportunities for the people by increasing the production and productivity of the units and to inculcate capability and acceleration in the field of Trade and Industries.

Industrial Cooperatives, a wing of the Department of Industries and Commerce, plays a vital role

In providing gainful employment to the people in general and women in particular through production type Industrial Cooperative Societies. In eliminating the exploitation of workers by middlemen through labor contract cooperative societies. In arranging for market for the products of rural artisans through Handicrafts Cooperative Societies. In providing infrastructural facilities including developed industrial sites or sheds to the small scale and tiny sector entrepreneurs through Industrial Cooperative Estate.

In nutshell Industrial Cooperative Societies ensure marketing of the finished products of the members, advantages of large scale economics to the members and mutual help among the members with cardinal principal.

ORGANISATION CHART IN RESPECT OF INDUSTRIAL COOPERATIVE WING AT THE OFFICE OF THE INDUSTRIES COMMISSIONER AND DIRECTOR OF INDUTRIES AND COMMERCE

Industries commissioner & Director of industries & Commerce

Additional Commissioner of Industries and commerce;

Joint Director of Industries and Commerce (Coir & Industrial cooperatives) Deputy Director (IC) General ICE SectionDeputy Director (IC) MarketingAsst. Director (IC) (Coir)Asst. Director of ind & Commerce (Costing Cell)

Asst. director (IC) MarketingAsst. Director of Industries and Commerce (IC) (Matches)Asst. Director (IC) Marketing

ICSICB / ICAICM ICFICN ICC / ICH

C CELL

Organization chart in respect of Industrial Cooperative Wing at the Districts.

Joint Director (Tea) ConnorDeputy Director (Chennai/ virudhunagar)

Special Officers / Managing DirectorsSpecial Officer

To start an Industrial Cooperative society:

General ManagerDistrict Industrial Centre(In the Districts other than Chennai and Nilgiris)

In Nilgiris-The J.D. (IC) (Tea), Church Road,Coonoor.

In Chennai_The D.D. (IC)CTAL Building GuindyChennai-32

Procedures:

To present the scheme / project to the District Officer Any Indian, above 18 years of age with sound mind can become a member of the society There should be a minimum of 25 members to from a society with a common objective Fees for registering a primary IndI.Coop. society is Rs.200/- a central IndI.Coop.society is Rs.400/-

Apex IndI.Coop>society is Rs.800/-(G.O.Ms.No. 147 /Coop. Food and consumer protection Department dt.17.5.2002)

Period stipulated:

1) To register a society; Within a period of one hundred and twenty days from the date of receipt of application

2) To refuse registration ; Within a period of 120 days from the date of receipt of application

3) Admission as a member Within sixty days from the date of to a society receipt of application

4) Expulsion any member can be expelled with resolution of the G.B.after giving opportunity to the member

5) Period within witch a Within a period of three months from society shall commence working the date of its registration

6) Period within which to be registered Within 120 days amendment of bylaw

7) Preferring appeal u/s 152 (3) within 60 days from the date of communication of the order.

8) Preferring revision U/S 153(1) Within 90 days from the date of communication of the order

9) Winding up affairs of the society

a) if the society not commenced working within one year

b) Ceased to work, cessation of primary activity for at least 2 years.

History of the Cooperative movement

The history of the cooperative movement concerns the origins and history of cooperatives. Although cooperative arrangements, such as mutual insurance, and principles of cooperation existed long before, the cooperative movement began with the application of cooperative principles to business organization.

Beginnings

The cooperative society began in Europe in the 19th century, primarily in Britain and France, although The Shore Porters Society claims to be one of the worlds first cooperatives, being established in Aberdeen in 1498 (although it has since Demutualized to become a private partnership). The industrial revolution and the increasing mechanization of the economy transformed society and threatened the livelihoods of many workers. The concurrent labour and social movements and the issues they attempted to address describe the climate at the time.

The first document consumer cooperative was founded in 1769, in a barely furnished cottage in Fenwick, East Ayrshire, when local weavers manhandled a sack of oatmeal into john Walker`s whitewashed front room and began selling the contents at a discount, forming, the Fenwick Weaver` Society.

In the decades that followed, several cooperatives or cooperative societies formed including Lennox town Friendly Victualling Society, founded in 1812.

By 1830, there were several hundred co-operatives. Some were initially successful, but most cooperative founded in the early 19th century hah failed by 1840.However, Lockhurst lane

Industrial co-operative Society (founded in 1832 and now Heart of England Co-operative Society), and Galashiels and Hawick Co-operative Societies (1839 or earlier, merged with the Co-operative group) still trade today.

It was not until 1844 when the Rochdale Society of Equitable Pioneers established the `Rochdale Principles` on which they ran their cooperative, that the basis for development and growth of the modern cooperative movement was established.

Financially, credit unions were invented in Germany in the mid-19th century, first by Franz Hermann schulze-Delitzsch (1852, urban), then by Friedrich Wilhelm Raiffeisen (1864, rural). While Schulze-Delitzsch is chronologically earlier, Raiffeisen has proven more influential over time-see history of credit unions. In Britain, the friendly society, building society, and mutual saving bank were earlier forms of similar institutions.

CHAPTER 3ORGANIZATIONAL PROFILE

Organizational Background:

Shriram Raghavendra Thrift and Credit Mutually Aided Cooperative Society Limited (Shriram raghavendra MACS)-registered under the 1995 MACS act of Andhra Pradesh Government- was set up in April 2010 to provide timely and superior financial services and support to rural and poor promoters of a leading MFL in India-Society for Helping, A wakening of rural poor through Education (SHERE), kurnool-with the aim of promoting a financial institution totally owned and managed by employees.

At present Shriram raghavendra MACS, which is focused only on microfinance activities, has a six-member board consisting of one woman members of the MACS and two other members shareholder members from each ranch on their board.

MICROFINANCE OPERATIONS:

Background of microfinance operationsShriram raghavendra MACS started its credit program with the investment of Rs 20.00.000 in 2010, with the clear objective of providing high quality financial services to the rural poor people.

It was presently working in 10 districts in Andhra Pradesh and has an outreach of 210 members in its microfinance program.

LONE FUNDS FLOW

1. Loans to Co-op Members2. Savings of Co-op Members

Shriram Raghavendra MACSLending Institutions

1. Loans to Members

Products:

1. Savings products:Shriram MACS groups start regular weekly savings from the day of formation, the amount being pre-decided y the S R MACS management. At present, each member savings Rs10 per week in all S R MACS centers these savings are compulsory and are deposited as personal savings that are used by S R MACS for its leading activities S R MACS pays an interest of 6% on the savings.

2. Lone products:S R MACS offers several loans products to its members. The loan products is the general lone that is provided soon after initiation of group activity. This lone varies in size from cycle starting with Rs 6000 and increasing y Rs 1000 with every subsequent cycle subject to a cap of Rs 9000. This lone is repayable in 50 weekly installments and carries an interest rate of Rs 20% flat for this period.

Managerial aspects:

S R MACS exhibits an excellent performance on managerial factors with a grade of +. This is the same as the previous assessment and reflects the consistently high levels of managerial and systemic strengths that the organization posses. Human resource quality and management Accounting and MIS Tracking system for overdues Financial planning and control systems Decision making Quality of clients/member groups InfrastructureFinancial performance:

Financial performance grade of S R MACS is good at -. This reflects a decline from the previous grade of +.The risk assessment of S R Macs on financial performance can increase significantly.

Credit performance and asset quality Mobilization of funds Asset, liability and equity composition Sustainability and profitability

As assets manager we believe:

Clearly defined products for every investment need. Managing investors money like we would our own. Backing product performance with on-time, committed investor service

We have institution two committees that have been charged with the responsibility of monitoring to fund policies, among other things.

The internal investment committee approves names for investment revising daily act portfolio and participating in setting objectives and strategies for funds

The investment policy committee sets investment restrictions and monitors periodical performance.

BOARD OF DIRECTORS:

Directors Names

ChairmanO.Prabhakar reddy

DirectorK.Muralidhar raoK.V.Ram Mohan reddyB.Venkata subba reddyM.Eswaaiah.E.Krishna veni

ManagerP.Vekatanatha reddy

Employees in marketingFour members

Employees in staffFive members

Other employeesThirteen members

Advantage of owning equity funds:

This substantially higher return for your money compared to other investment options.

Growth fund

Potential return index fund Balanced fundRisk

FUNCTIONAL DEPARTMENTSMARKETING DEPARTMENTTraditionally, insurance products have been promoted and sold principally through agency systems in most countries. With new developments in consumer behaviour, evolution of technology and deregulation, new distribution channels have been developed successfully and rapidly in recent years.Shriram Raghavendra make use of various distribution channels: Career Agents Advertisements Direct Response Internet The main characteristics of each of these channels are: Career Agents: Career Agents are full-time commissioned sales personnel holding an agency contract. They are generally considered to be independent contractors. Consequently an insurance company can exercise control only over the activities of the agent, which are specified in his contract. Despite this limitation on control, career agents with suitable training, supervision and motivation can be highly productive and cost effective. Moreover their level of customer service is usually very high due to the renewal commissions, policy persistency bonuses, or other customer service-related awards paid to them. Many insurance companies, however avoid this channel, believing that agents might oversell out of their interest in quantity and not quality. Such problems with career agents usually arise, not due to the nature of this channel, but rather due to the use of improperly designed remuneration and/or incentive packages. Direct Response: In this channel no salesperson visits the customer to induce a sale and no face-to-face contact between consumer and seller occurs. The consumer purchases products directly by responding to the company's advertisement, mailing or telephone offers. This channel can be used for simple packaged products, which can be easily understood by the consumer without explanation. Advertisements: This very popular medium among the entire medium any person can see this advertisement of the products and buy the product from nearest branch.

FINANCE DEPARTMENTSSomething must be direct the how of economic activity and facilities its smooth operation. Finance is the agent that produces this result. Nature of financial management refers to its functions, scope and objectives.Financial management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. In modern times finance is the life-blood of the business. No matter, whether the business is big or small financial is the equally important. The financial resources must proper planned and control in order to achieve the best out of available. So, financial resources should be very properlyGenerally, financial planning means deciding in advance, the financial activities are to be carried on to achieve the objective of the firm. In broader sance, in the words of Walker and Boughn as; financial planning includes the determination of firms financial objectives, formulating and promulgating financial polices and developing and procedures.Financial planning is necessary to achieve both long term and short term objectives. A sound financial planning includes how much need of funds for both the terms. Then from where they are to be received and utilized.Shriram life would evaluated different proposal placed before them and selects the best out of them. It estimates how much capital is going to be required for various proposals and how much is the return on the capital employed. The financial manager lays down the estimate on the capital of cash per week, per month and per year.

CAPITALIZATIONAt the time of incorporation of any business, it is the first problem before the promoters to decide how much capitalization should be made in a business. The amount of capital of any time should not exceed nor less than the amount required. So, it is necessary to have proper capitalization for the success of the enterprise. But Gerstenberg defines it as;The total accounting value of all capital regularly employed in business, it includes owners capital, borrowed capital and any other sources.Thus term includes;1. The value of ordinary and preference shares2. The value of all surplus earned and capital3. The value of bonds and security still not redeemed4. The value of long term loansHowever the modern view includes short term funds or liabilities under the firm. It should be properly capitalized.Shriram Raghavendra issue shares. So, all these terms do apply.FUND OPTIONSThere are six funds having different proportional investment in equity, debt, market money and cash. The funds are Preserver, Defender, Balancer, Maximus, Accelerator, and Tyaseer.

CHAPTER 3THEORETICAL FRAME WORK

THEORETICAL FRAME WORK

A cooperative is a legal entity owned and democratically controlled by its members. Members often have a close association with the enterprise as producers or consumers of its products or services, or as its employees.

1. Some members to have a greater share of the control, or2. Some investors to have a return on their capital that exceeds fix interest,

Neither of which may e allowed under local laws for cooperatives. Cooperatives offen share their earning with the membership as dividends, which are divided among the members according to their participation in the enterprise, such as patronage, instead of according to the value of their capital shareholdings (as is done y a joint stock company).

Identity:

Cooperatives are typically based on the cooperative values of self-help, self-responsibility, democracy and equality, equity and solidarity and the seven cooperative principles:

Voluntary and open membership Democratic member control Economic participation by members Autonomy and independence Education, training and information Cooperation among cooperatives Concern for community

Types of cooperative governance:

Retailers cooperative:

A retailer cooperative (known as a secondary or marketing cooperative in some countries) is an organization which employs economies of scale on behalf of its members to receive discounts from manufacturers and to pool marketing.

Worker cooperative:

A worker cooperative or producer cooperative is a cooperative, that is owned and democratilly controlled y its worker=owners There is no outside owners in a pure workers` cooperative.

Volunteer cooperative:

A volunteer cooperative is a cooperative that is run y and for a network of volunteers, for the benefit of a defined membership or the general public, to achieve some goal, depending on the structure.

Social cooperative;

A particularly successful form of multi-stakeholder cooperative is the Italian social cooperative, of which some 7000 exist. type A social cooperative ring together providers and beneficiaries of a social service as members. Type social cooperatives ring together permanent workers and previously unemployed people who wish to integrate into the labor market.

Consumers` cooperative:

A consumers` cooperative is a business owned by its customers. Employees can also generally become members; Members vote on major decisions and elect the board of directors from amongst their own number.

Business and employment cooperative:

Business and employment cooperatives (BECs) are a subset of worker cooperatives that represent a new approach to providing support to the creation of new businesses.

New generation cooperative:

New generation cooperatives (NGCs) are an adoption of traditional cooperative structures to modern, capital intensive industries. They are sometimes described as a hybrid between traditional co-ops and limited liability companies.

Types and number of cooperatives:

Housing cooperative Utility cooperative Agriculture cooperative Credit unions and cooperative banking Federal or secondary cooperatives Cooperative union Cooperative wholesale society Cooperative political movements

Women in cooperatives:Since cooperatives are based on values like self-help, democracy, equality, equity, and solidarity, they can play a particularly strong role in empowering women, especially in developing countries. Cooperative allows women who might have been isolated and working individually to and together and create economies of scale as well as increase their own bargaining power in the market.

Advantages of investing in co-operative society: Professional management. Diversification Convenient administration Return potential Low cost Liquidity Transparency Flexibility Choice of schemes Tax benefits Well regulatedFlow chart of investment in Co-operative society:

Frequently used terms: Net asset value (NAV)Net asset value:Net asset value is the market value of the assets of the schemes minus its liabilities. The par unit net asset value is the number of units outstanding on the valuation data.

STRUCTURE OF COOPERATIVE SOCIETY

CHAPTER 4DATA ANALYSIS&INTERPRETATION

This table shows the deposits lent by shriram raghavendra MACS for the lest three years:

YEARSDEPOSITSLoans

2008-094.762.607.36

2009-085.803.409.2

2010-116.054.7310.78

2011-127.415.2212.63

2012-1310.076.2416.31

This tale shows the trend calculation of Shriram Raghavendra MACS of the last three years.

YEARSXDEPOSITS(Y)XYX2

2008-09-24.76-9.524

2009-10-15.80-5.801

2010-1106.0500

2011-1217.417.411

2012-13210.0720.144

TOTALX=0Y=34.09XY=12.23X2=10

The two normal equations are:

y = Na + bx

xy = ax + bx2

The trend line equation is Y = a + bx (where origin is 0 & x units = 1)

Calculation of the trend line is:1. y = Na+bx34.09 = 5 (a) + b (0)34.09 = 5a5a = 34.09a = 34.09 / 5 a = 6.81

2. xy = a x +b x212.23 = a(0) + b (10)12.23 = 0 + 10b10b= 12.23b = 12.23/10b = 1.22

Calculation of the trend line:Y = a + bx (where origin is 0 & x units= 1year)2008-09=6.81+1.22(-2) = 6.81-2.44 = 4.372009-10= 6.81+1.22(-1)=6.81-1.22=5.592010-11 = 6.81+2.01(0) =6.812011-2012 =6.81+2.01(1) =8.822012-13 = 6.81+2.01(2) =10.82

Chart showing the deposits of Shriram Raghavendra MACS of last five years

Interpretation:

From the above tables and charts, it has been observed that there is a substantial increase in the deposits lent by Shriram Raghavendra MACS to the co-operative society in Kurnool in last FIVE years.The trend line shows that there is a positive trend of increase in the deposits of Shriram Raghavendra MACS.

This table shows the loans lent by Shriram Raghavendra MACS:

YEARSLOANS

2008-092.60

2009-103.40

2010-114.73

2011-125.22

2012-136.24

Table shows the trend calculation of the Shriram Raghavendra MACS

yearsxLoans(y)xyX2

2008-09-22.60-5.204

2009-10-13.40-3.401

2010-1104.7300

2011-1215.225.221

2012-1326.2412.484

Total022.199.110

The two normal equations are :

1. y=Na + b x

2. xy = a x + b x2 1. y = Na +b x22.19 = 5(a) + b (0) 22.19 = 5a 5a = 22.19 a = 22.19 / 5 a = 4.438

2. xy = a x + b x2 9.1 = a(0) + b (10) 9.1 = 10b 10b = 9.1b = 9.1 / 10b = 0.91

The trend line equation is:

Y = a + bx (where origin is 0& x units = 1 year) 2008 09 = 4.438 + 0.91 (-2) = 3.348200 9 -10 = 4.438 + 0.91 (-1) = 3.5282010-11 = 4.438 + 0.91 (0) = 4.4382011-12 = 4.438 + 0.91 (1) = 5.3482012-13 = 4.438 + 0.91 (2) = 6.258

Chart showing the loans by Shriram raghavendra MACS

Interpretation:

From the above tables and charts, it has been observed that there is a substantial increase in the loans lent by Shriram Raghavendra MACS to the co-operative society in Kurnool in last five years.The trend line shows that there is a positive trend of increase in the loans of Shriram Raghavendra MACS.

Table shows the total loans & deposits lent by Shriram RaghavendraMACS of the last five yearsYEARSLOANS&DEPOSITS

2008-097.36

2009-109.2

2010-1110.78

2011-1212.63

2012-1316.31

Table shows the trend calculation of Shriram Raghavendra for the last five years:YEARSXLoans depositsxyX2

2008-09-27.36-14.724

2009-10-19.2-9.21

2010-11010.7800

2011-12112.6312.631

2012-13216.3132.624

Total056.2821.3310

The two normal equations are:

y = Na + b x56.28 = 5(a) + b (0)56.28 = 5a5a = 56.28 a = 56.28 / 5a= 11.256

xy = ax + bx2

21.33 = a(0) + b(10)21.33 = 10b10b = 21.33b = 21.33/10b = 2.133

The trend line equation is:

Y = a + bx (where origin is 0& x units = 1)

Y = a + bx2008-09 = 11.256+2.133(-2) = 6.992009-10 = 11.256+2.133(-1) = 9.1232010-11=11.256+2.133 (0) = 11.2562011-12 = 11.256+2.133 (1) = 13.3892012-13 = 11.256+2.133 (2) = 15.522

This chart shows the loans & deposits of Shriram raghavendra MACS for the last 5 years:

Interpretation: From the above tables and charts, it has been observed that there is a substantial increase in the deposits and loans lent by Shriram Raghavendra MACS to the co-operative society in Kurnool in last five years.

The trend line shows that there is a positive trend of increase in the deposits and loans of Shriram Raghavendra MACS.

CHAPTER 5FINDINGSSUGGESTIONS CONCLUSION

FINDINGS

Ethical and transparent dealings

Efficient research practices

Shriram Raghavendra MACS has shown rapid as well as consistent growth in many of its schemes

Shriram Raghavendra MACS has expended its boundaries by its innovative approach towards research, efficient service quality and share dedication

Shriram Raghavendra MACS has reached this position due to the efforts of the marketing and sales team

Shriram Raghavendra MACS offers the clients with the best schemes which get them the maximum returns and help them y telling them when to invest in the right type of fund

Due to the outstanding performance Shriram Raghavendra MACS has been ranked in the top positions by the value research

SUGGESTIONS

It is a good way to get involved in this market is by putting your toes in water.. The participant has to keep higher margin of safety to ensure transaction happening without any losses.

How ever these instrument acts as a powerful instrument for knowledge traders to expose them to the properly calculated and well understood risk in pursuit of reward i.e. profit.

To improve the awareness of the company various schemes to the investors with latest technological schemes.

The company should attract more professionals and businessmen as they are considered to be high net worth individuals.

Create value through customer care services

Make service encounter more informative as word of mouth plays a crucial role.

The fund should come up with more attractive scheme which would benefits the investor then just giving them high returns. The fund should also maintain their existing schemes performance even though it comes out with new schemes which create confidence to the existing customers.

CONCLUSION

Horizontal concentration in microfinance programme.Strong emphasis on credit disciplines Ability to draw on the experience of SHARE in terms of senior manager and also lessons from the field. Stable and qualified staff resources. Reasonably strong and disciplined groups. Strong internal, financial control and planning systems. Strong accounting system. Strong system for tracking overdoes. Good infrastructure base. Good savings mobilization. Strong performance on profitability. Excellent portfolio quality. Reasonably diversified portfolio.

The company is going on increasing there profit and decreases the risk to the costumer for their deposits and loans.

BIBLIOGRAPHY

BOOKS:

OUT LOOK MONEY

THE HINDU BUSINESS LINE

BUSINESS WORLD

MONEY TODEY

WBE SITES:

www.moneycontrol.com

www.co-operativesociety.com

www.indianco-operative.com

ANNEXUREBalance sheet as on 31.03.2009Shriram Raghavendra MACS Ltd., knl.Capital and Liabilities Amountpaid up share capital 4,260,900.00Add profit B/F from P&L a/c 340,100.00 4,601,000.00

OTHER LIABILITIESLoans from recurring deposits1,420,000.00Loans from fixed deposits 40,766,700.00Interest payable on FD`S 870,414.00Karnataka bank O D A/C 1,517,450_____________ Total 49,175,564.00 ____________

AssetsCash on hand 549,560.00Bank balance 2,065,600.00Fixed deposit in ing visya bank 540,780.00Fixed deposits in Karnataka Bank 2,400,000.00Chit investments 10,315,000.00Loans advances 26,075,450.00Furniture & fixtures 104,500.00Rent advanced 72,000.00Directors advances 50,000.00Computers 105,674.00Interest receivables on ING FD`S 37,000.00Member advance 860,000.00Advance for asset purchases 3,407,550.00Advance for chit investment SECAD.br. 2,592,450.00 ______________ TOTAL 49,175,564.00 _______________

Balance sheet as on 31.03.2010Shriram Raghavendra MACS Ltd., knl.Capital and Liabilities Amountpaid up share capital 4,575,000.00Add profit B/F from P&L a/c 425,000.00 5,000,000.00

OTHER LIABILITIESLoans from recurring deposits 1,645,000.00Loans from fixed deposits 50,807,350.00Interest payable on FD`S 1,085,650.00Karnataka bank O D A/C 1,285,690.00_____________ Total 59,823,690.00 ____________

AssetsCash on hand 694,690.00Bank balance 2,639,000.00Fixed deposit in ing visya bank 594,000.00Fixed deposits in Karnataka Bank 2,500,000.00Chit investments 10,460,000.00Loans advances 34,036,000.00Furniture & fixtures 104,500.00Rent advanced 72,000.00Directors advances 50,000.00Computers 118,000.00Interest receivables on ING FD`S 40,000.00Member advance 1,215,000.00Advance for asset purchases 4,600,500.00Advance for chit investment SECAD.br. 2,700,000.00 ______________ TOTAL 59,823,690.00 _______________

Shriram Raghavendra MACS Ltd., knl.Balance sheet as on 31.03.2011Capital and Liabilities Amountpaid up share capital 4,715,700.00Add profit B/F from P&L a/c (532,522.09)4,183,177.91OTHER LIABILITIESLoans from recurring deposits 1,831,100.00Loans from fixed deposits 60,557,695.00Interest payable on FD`S 1,142,314.00Karnataka bank O D A/C 2,216,525.00 ____________Total 69,912,811.91 ____________AssetsCash on hand 797,331.00Bank balance 2,861,601.05Fixed deposit in ing visya bank 600,000.00Fixed deposits in Karnataka Bank 2,500,000.00Chit investments 10,516,847.00Loans advances 47,315,242.00Advances for assets purchases 3,000,000.00Furniture & fixtures 104,500.00Rent advanced 72,000.00Directors advances 50,000.00Advance for chit investments SEC`BAD.br. 700,000.00Computers 118,000.00Members advance 1,235,173.00Interest receivables on ING FD`S 42,117.86 _____________ TOTAL 69,912,811.91

Sumourya institute of managmentPage 49