PROJECT_REPORT ON working capital management.doc

8/13/2019 PROJECT_REPORT ON working capital management.doc

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SUMMER TRAINING REPORT SUBMITTED TOWARDS THEPARTIAL FULFILLMENT OF POST GRADUATE DEGREE IN

INTERNATIONAL BUSINESS

WORKING CAPITALMANAGEMENT

OnKotak Mahindra Group

INDUSTRY GUIDE FACULTY GUIDE

AMITY INTERNATIONAL BUSINESS SCHOOL,

NOIDAAMITY UNIVERSITY UTTAR

PRADESH

AMITY INTERNATIONAL BUSINESS SCHOOL 1
http://www.oldmutual.com/userimages/Kotak-Life-250.jpg


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TABLE OF CONTENTS

Chapter No S!"#e$t Pa%e No

Ch No.1 Executi e !u""ar#$$$$$$$. %Ch No.& Re'earch Methodo(o)#$$$$$$ * &.1 Pri"ar# O+,ecti e-' $$$$. &.& /#pothe'i'$$$$$$$$ &.0 Re'earch e'i)n$$$$$$ &.2 !a"p(e e'i)n$$$$$$.. &.3 !cope o4 the !tud#$$$$$. &.% Li"itation'$$$$$$$$.Ch No.0 Critica( Re ie5 o4 Literature$$$.. 6Ch No.2 Co"pan# Pro4i(e $$$$$$$$. 17Ch No.3 Indu'tr# Pro4i(e$$$$$$.. &1Ch No.% !WOT Ana(#'i'$$$$$$$. 23

Ch No.* ata$$$$$$$$$$$$$.. 2% *.1 Co((ection$$$$$$$$$ *.& Pri"ar# ata$$$$$$$$ *.0 !econdar# ata$.$$$$$..Ch No.7 Workin) Capita(8 O era(( 9ie5$$$ 30Ch No.6 :indin)' ; Ana(#'i'$$$$$$$. 1


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CH NO &' E(ECUTIVE SUMMARY

The Indian Li4e In'urance Co"pan# ha' 'een a re"arka+(e 'hi4t 'ince the ti"e o4

e'ta+(i'h"ent o4 the 4ir't co"pan#> Orienta( Li4e In'urance Co"pan# in 17&0. At the

ti"e o4 Independence and therea4ter> there 5ere "ore than & in e'tor a5arene'' and di er'it# o4 product' and the extent o4 u'e o4

ri'k "ana)e"ent techni ue'. :urther co"pari'on re ea(' that the attitude o4 re)u(atorto5ard' in e'tor protection and the )o ernance o4 "utua( 4und' are at par 5ith )(o+a('tandard'. The paper then ana(#'i' the 4uture expectation' 4ro" the "utua( 4und indu'tr#in ter"' o4 increa'ed in e'tor a5arene''> product di er'it# and i"pro e"ent in

penetration and di'tri+ution. In the end I reco""end certain 'tep' that !E=I and AMC''hou(d take in order to +ui(d in e'tor con4idence and tru't.



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CH NO )' RESEARCH METHODOLOGY

Pr*+ar O"#e$t*-e./0The =a'ic o+,ecti e o4 ca'h "ana)e"ent i' t5o 4o(dD

To "eet the ca'h di'+ur'e"ent need' -pa#"ent 'chedu(e To "ini"i?e 4und' co""itted to ca'h +a(ance'.

The'e are con4(ictin) and "utua((# contradictor# and the ta'k o4 ca'h "ana)e"ent i'to reconci(e the".

H pothe/*/'1. Cu'to"er' ha e +a'i' o4 pre4erence in 'e(ection o4 the 4ina( Kotak Mahindra O(d

Mutua( Li4e In'urance&. The choice o4 the Kotak Mahindra O(d Mutua( Li4e In'urance "i)ht ha e an

e44ect either o4 the per'ona( pre4erence or the countr# o4 ori)in0. The 4ina( deci'ion i' +a'ed on prior experience

Sa+p1e S*2e'

The 'i?e o4 the 'a"p(e 5a' around *< peop(e con'iderin) the ti"e con'traint.

Re/ear$h De/*%3'Data Co11e$t*o3' ata ha' +een co((ected throu)h +oth pri"ar# and 'econdar# approach.

Data So!r$e/

The re'earch in o( ed )atherin) !econdar# data a' 5e(( a' Pri"ar# data. :or the purpo'et5o t#pe' o4 'ur e# 5a' conducted +# "e to co((ect the data 8 Cu'to"er 'ur e# and Con'u"er 'ur e#

Pr*+ar Data

Con'u"er 'ur e# 5a' done to kno5 their purcha'in) +eha iour +ecau'e the# are the one5ho con'titute the "arket and are the tar)et o4 the +u'ine'' . In In'urance Indu'tr# unti((and un(e'' 5e ha e the kno5(ed)e o4 the con'u"er +eha iour and 4actor 5hich



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in4(uence the" to +u# a paticu(ar +rand >co"panie' cannot 4ocu' upon the tar)et "arket./ence a con'u"er 'ur e# 5a' done to kno5 their 5ant'> purcha'in) po5er> and +u#in)ha+it' in order to 'e)"ent the "arket > and +a'ed on thi' con'u"er pro4i(e 5a'

identi4ied.Se$o34ar Data

!econdar# data re)ardin) 'a(e' 4i)ure'> pro"otiona( expen'e' and other re(ated expen'e'5a' co((ected 4ro" the co"pan#F' o5n record to ana(#'e the i"pact on 'a(e' due to therunnin) 'che"e' and "ake co't +ene4it ana(#'i'.

S$ope o5 the St!4=oth pri"ar# and !econdar# data ha' +een +e u'ed 4or the 'tud#. Pri"ar# data 5a'co((ected throu)h direct interaction 5ith the co"pan#F' 4inance and account'depart"ent. I4 needed 'chedu(e ue'tionnaire' 5ou(d +e de i'ed to )et the in4or"ationon a(( the re(e ant area' o4 the 'tud# 'uch a' recei a+(e "ana)e"ent> in entor#"ana)e"ent> "ana)e"ent o4 ca'h etc.And I co((ected the data 4ro" the 'econdar# 'ource' co"pri'in) Annua( Report' o4 the4ir"> other ,ourna(' and peridocia('.Apart 4ro" the conductin) thi' re'earch 5ork on the +a'i' o4 the'e in4or"ation'> ariou'techni ue' o4 4inancia( "ana)e"ent e.).> co"parati e 'tate"ent> trend ana(#'i' and ratioana(#'i' etc. 5ere u'ed in the pre'ent 'tud#. To pre'ent a +road ie5 'o 4ar the purpo'e

o4 the ana(#'i' and to "ake it ea'# to under'tand the pro+(e" concept o4 a 4e5 )raph'and ta+(e' 'ha(( a('o +e pre'ented. In each chapter> the ana(#'i' ha' +een co"pared 5ithactua( "ana)e"ent practice' o4 the co"pan# under 'tud#.

L*+*tat*o3 o5 the St!4The pre'ent 'tud# i' (i"ited to one Co.> i.e. Kotak Mahindra Li4e In'urance Ltd.> andco er' a period 4ro" &


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CH NO 6' CRITICAL REVIEW OF LITERATURE

WOR7ING CAPITAL 8 OVERALL VIEW

Workin) Capita( "ana)e"ent i' the "ana)e"ent o4 a''et' that are current in nature.Current a''et'> +# accountin) de4inition are the a''et' nor"a((# con erted in to ca'h in a

period o4 one #ear. /ence 5orkin) capita( "ana)e"ent can +e con'idered a' the"ana)e"ent o4 ca'h> "arket 'ecuritie' recei a+(e> in entorie' and current (ia+i(itie'. In4act> the "ana)e"ent o4 current a''et' i' 'i"i(ar to that o4 4ixed a''et' the 'en'e that i'

+oth in ca'e' the 4ir" ana(#'e' their e44ect on it' pro4ita+i(it# and ri'k 4actor'> hence the#di44er on three "a,or a'pect'D1. In "ana)in) 4ixed a''et'> ti"e i' an i"portant 4actor di'countin) and

co"poundin) a'pect' o4 ti"e p(a# an i"portant ro(e in capita( +ud)etin) and a"inor part in the "ana)e"ent o4 current a''et'.

&. The (ar)e ho(din)' o4 current a''et'> e'pecia((# ca'h> "a# 'tren)then the 4ir"F'(i uidit# po'ition> +ut i' +ound to reduce pro4ita+i(it# o4 the 4ir" a' idea( car#ie(d nothin).

0. The (e e( o4 4ixed a''et' a' 5e(( a' current a''et' depend' upon the expected'a(e'> +ut it i' on(# current a''et' that add 4(uctuation in the 'hort run to a

+u'ine''.

To under'tand 5orkin) capita( +etter 5e 'hou(d ha e +a'ic kno5(ed)e a+out the ariou'a'pect' o4 5orkin) capita(. To 'tart 5ith> there are t5o concept' o4 5orkin) capita(D

Gro'' Workin) Capita( Net 5orkin) Capita(

Gro// Wor9*3% Cap*ta1' Gro'' 5orkin) capita(> 5hich i' a('o 'i"p(# kno5n a'5orkin) capita(> re4er' to the 4ir"F' in e't"ent in current a''et'D Another a'pect o4 )ro''5orkin) capita( point' out the need o4 arran)in) 4und' to 4inance the current a''et'. The)ro'' 5orkin) capita( concept 4ocu'e' attention on t5o a'pect' o4 current a''et'"ana)e"ent> 4ir't(# opti"u" in e't"ent in current a''et' and 'econd(# in 4inancin) thecurrent a''et'. The'e t5o a'pect' 5i(( he(p in re"ainin) a5a# 4ro" the t5o dan)er

point' o4 exce''i e or inade uate in e't"ent in current a''et'. Whene er a need o45orkin) capita( 4und' ari'e' due to increa'e in (e e( o4 +u'ine'' acti it# or 4or an# otherrea'on the arran)e"ent 'hou(d +e "ade uick(#> and 'i"i(ar(# i4 'o"e 'urp(u'e' are

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a ai(a+(e> the# 'hou(d not +e a((o5ed to (ie idea( +ut 'hou(d +e put to 'o"e e44ecti e u'e.

Net Wor9*3% Cap*ta1' The ter" net 5orkin) capita( re4er' to the di44erence +et5een thecurrent a''et' and current (ia+i(itie'. Net 5orkin) capita( can +e po'iti e a' 5e(( a'

ne)ati e. Po'iti e 5orkin) capita( re4er' to the 'ituation 5here current a''et' exceedcurrent (ia+i(itie' and ne)ati e 5orkin) capita( re4er' to the 'ituation 5here current(ia+i(itie' exceed current a''et'. The net 5orkin) capita( he(p' in co"parin) the (i uidit#o4 the 'a"e 4ir" o er ti"e. :or purpo'e' o4 the 5orkin) capita( "ana)e"ent> there4oreWorkin) Capita( can +e 'aid to "ea'ure the (i uidit# o4 the 4ir". In other 5ord'> the )oa(o4 5orkin) capita( "ana)e"ent i' to "ana)e the current a''et' and (ia+i(itie' in 'uch a5a# that a accepta+(e (e e( o4 net 5orkin) capita( i' "aintained.

I+porta3$e o5 :or9*3% $ap*ta1 +a3a%e+e3t'

Mana)e"ent o4 5orkin) capita( i' er# "uch i"portant 4or the 'ucce'' o4 the +u'ine''.It ha' +een e"pha'i?ed that a +u'ine'' 'hou(d "aintain 'ound 5orkin) capita( po'itionand a('o that there 'hou(d not +e an exce''i e (e e( o4 in e't"ent in the 5orkin) capita(co"ponent'. A' pointed out +# Ra(ph Kenned# and !te5art MC Mu((er> @theinade uac# or "i'8"ana)e"ent o4 5orkin) capita( i' one o4 a 4e5 (eadin) cau'e' o4

+u'ine'' 4ai(ure.Current a''et'> in 4act> account 4or a er# (ar)e portion o4 the tota( in e't"ent o4 the4ir".

Ta"1e /ho:*3% C!rre3t a//et/ a/ per$e3ta%e o5 Tota1 a//et/

Year Per$e3 ta%e

&


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It can +e i'ua(i?ed 4ro" the ta+(e that in the 4ir't #ear o4 our 'tud# i.e. &


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'i"i(ar production po(ic# in a(( re'pect' +ecau'e it depend' upon thecircu"'tance' o4 an indi idua( co"pan#.

3. F*r+;/ Cre4*t Po1*$ ' The credit po(ic# o4 a 4ir" a44ect' 5orkin) capita( +#in4(uencin) the (e e( o4 +ook de+t'. The credit ter" i' 4air(# con'tant in anindu'tr# +ut indi idua(' a('o ha e their ro(e in 4ra"in) their credit po(ic#. A(i+era( credit po(ic# 5i(( (ead to "ore a"ount +ein) co""itted to 5orkin) capita(re uire"ent' 5herea' a 'tern credit po(ic# "a# decrea'e the a"ount o4 5orkin)capita( re uire"ent apprecia+(# +ut the repercu''ion' o4 the t5o are not 'i"p(e./ence a 4ir" 'hou(d a(5a#' 4ra"e a rationa( credit po(ic# +a'ed on the credit5orthine'' o4 the cu'to"er.

%. A-a*1a"*1*t o5 Cre4*t' The ter"' on 5hich a co"pan# i' a+(e to a ai( credit4ro" it' 'upp(ier' o4 )ood' and de ice' credit a('o a44ect' the 5orkin) capita(re uire"ent. I4 a co"pan# in a po'ition to )et credit on (i+era( ter"' and in a'hort 'pan o4 ti"e then it 5i(( +e in a po'ition to 5ork 5ith (e'' a"ount o45orkin) capita(. /ence the a"ount o4 5orkin) capita( needed 5i(( depend uponthe ter"' a 4ir" i' )ranted credit +# it' creditor'.

*. Gro:th a34 E


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CIRCULATION SYSTEM OF WOR7ING CAPITAL

In the +e)innin) the 4und' are o+tained +# i''uin) 'hare'> o4ten 'upp(e"ented +# (on)ter" +orro5in)'. Much o4 the'e co((ected 4und' are u'ed in purcha'in) 4ixed a''et' andre"ainin) 4und' are u'ed 4or da# to da# operation a' pa# 4or ra5 "ateria(> 5a)e'o erhead expen'e'. A4ter thi' 4ini'hed )ood' are read# 4or 'a(e and +# 'e((in) the4ini'hed )ood' either account recei a+(e are created and ca'h i' recei ed. In thi' proce''

pro4it i' earned. Thi' account o4 pro4it i' u'ed 4or pa#in) taxe'> di idend and the +a(ancei' p(ou)hed in the +u'ine''.Workin) capita( i' con'idered to e44icient(# circu(ate 5hen it turn' o er uick(#. A'circu(ation increa'e'> the in e't"ent in current a''et' 5i(( decrea'e. Current a''et'turno er ratio 'peak' a+out the e44icienc# o4 Kotak Mahindra in the uti(i'ation o4 currenta''et'. :a't turno er current a''et' re'u(t' in a +etter rate on in e't"ent.

Ta"1e /ho:*3% C!rre3t A//et/ T!r3o-er Rat*o

Year Rat* o .*3 t*+e/0

&


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The ratio a era)e i' &.&2 ti"e' in the 'tud# period o4 0 #ear'. In &


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I3terpretat*o3 .Rat*o A3a1 /*/0

The uti(i?ation rate o4 net 5orkin) capita( a' depicted +# 5orkin) capita(turno er ratio i' 4(uctuatin) durin) the period. It 'ho5' that 5orkin) capita( ha'not +een e44ecti e(# u'ed o er the period o4 #ear' except in the #ear &


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a''et' to tota( a''et' ha' +een appropriate durin) thi' period.!uch a hi)her proportion o4 current a''et in the a''et' port4o(io o4 KotakMahindra Li4e In'urance Ltd. i' uite accepta+(e.

Our ana(#'i' a+o e indicate' the area' o4 concern to "ana)e"ent in "akin) +e't po''i+(e u'e o4 re'ource'. ecrea'in) e44icienc# in the u'e o4 current a''et' hint' o4 the po''i+i(it# o4 pro+(e"' in 5orkin) capita( "ana)e"ent.

On 4urther ana(#'i'> in entor# con'titute' a "a,or proportion o4 tota( current a''et'.A"on) it' ariou' co"ponent'> ra5 "ateria('> 'tock'> 'pared and 4ini'hed )ood' in

particu(ar need 4urther ana(#'i' a' here 'tand out to the pro+(e" area'.

Ca/h F1o: State+e3t .)>>?8>@0

So!r$e/ A+o!3t A

. *3 La$/0

App1*$at*o3 A+o!3t B

.*3 La$/0

Proceed' 4ro" +orro5i n)'

1%&.0* Lo'' 4ro" operation 173.&*

!a(e o4 a''et' &*.02 Chan)e in ca'h 3. ) & > )

S!++ar o5 Ca/h F1o: A3a1 /*/a Ca'h 4ro" operation to tota( ca'h a ai(a+(e

173.01 16


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C!rre3t A//et/

In entorie' 60.7* 12%.0% 3&.27 8

!undr# e+tor' 1&0.&& 112.*1 8 7.31

Ca'h and =ank +a(ance'

1>?8>@0

So!r$e/ A+o!3t A

.*3 1a$/0

App1*$at*o3 A+o!3t B

.*3 La$/0

Increa'e in (oan 1%&.0* Increa'e in 5orkin) capita( %1.22

!a(e o4 a''et &&.62 Lo'' 4ro" operation 1&0.7*

Tota( 173.01 173.01

S!++ar o5 F!34 F1o: A3a1 /*/1. Increa'e in net 5orkin) capita( J %1.22&. :und' 4ro" operation' to 4inance per"anent addre'' -1&0.7*0. Ratio o4 4und 4(o5 4ro" operation' to tota( 4und' in the +u'ine'' -8 1&0.7* 73.01

-%%.73



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I3terpretat*o3 .F!34 F1o: State+e3t0

1. Net5orkin) capita( ha' +een increa'ed o er the #ear'> 5hich ha' increa'ed(i uidit#

&. Co"pan# 'hou(d take correcti e action' to co ert (o'' 4ro" operation to 4und'4ro" operation.



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CH NO =' COMPANY PROFILE

CREATING BAN7ING HISTORY

E'ta+(i'hed in 1673> The Kotak Mahindra )roup ha' (on) +een one o4 India ' "o'treputed 4inancia( or)ani?ation'. In :e+ruar# & the)roup ' 4(a)'hip co"pan# 5a' )i en the (icen'e to carr# on +ankin) +u'ine'' +# theRe'er e =ank o4 India -R=I . Thi' appro a( create' +ankin) hi'tor# 'ince KotakMahindra :inance Ltd. i' the 4ir't co"pan# in India to con ert to a +ank.

The Co+p1ete Ba39

At Kotak Mahindra =ank> 5e addre'' the entire 'pectru" o4 4inancia( need' 4orindi idua(' and corporate'. We ha e the product'> the experience> the in4ra'tructure and"o't i"portant(# the co""it"ent to de(i er pra)"atic> end8to8end 'o(ution' that rea((#5ork. A (icen'e authori?in) the +ank to carr# on +ankin) +u'ine'' ha' +een o+tained 4ro"the Re'er e =ank o4 India in ter"' o4 !ection && i4 the =ankin) Re)u(ation Act> 1626. It"u't +e di'tinct(# under'tood> ho5e er> that in i''uin) the (icen'e> the Re'er e =ank o4India doe' not undertake an# re'pon'i+i(it# 4or the 4inancia( 'oundne'' o4 the +ank or thecorrectne'' o4 an# o4 the 'tate"ent' "ade or opinion expre''ed in thi' connection.

The 7ota9 Mah*34ra Gro!p

Kotak Mahindra i' one o4 India ' (eadin) 4inancia( con)(o"erate'> o44erin) co"p(ete4inancia( 'o(ution' that enco"pa'' e er# 'phere o4 (i4e. :ro" co""ercia( +ankin)> to'tock +rokin)> to "utua( 4und'> to (i4e in'urance> to in e't"ent +ankin)> the )roup cater'to the 4inancia( need' o4 indi idua(' and corporate'.The )roup ha' a net 5orth o4 o er R'. 0>& e"p(o#' around 17 London> u+ai> Mauritiu' and !in)apore. The Group 'er ice'around &.% "i((ion cu'to"er account'.

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O!r Stor

The Kotak Mahindra Group 5a' +orn in 1673 a' Kotak Capita( Mana)e"ent :inance

Li"ited. Thi' co"pan# 5a' pro"oted +# da# Kotak> !idne# A. A. Pinto and Kotak ;Co"pan#. Indu'tria(i't' /ari'h Mahindra and Anand Mahindra took a 'take in 167%> andthat ' 5hen the co"pan# chan)ed it' na"e to Kotak Mahindra :inance Li"ited.!ince then it ' +een a 'tead# and con4ident ,ourne# to )ro5th and 'ucce''.

167% Kotak Mahindra :inance Li"ited 'tart' the acti it# o4 =i(( i'countin)

167* Kotak Mahindra :inance Li"ited enter' the Lea'e and /ire Purcha'e "arket

166< The Auto :inance di i'ion i' 'tarted

1661The In e't"ent =ankin) i i'ion i' 'tarted. Take' o er :ICOM> one o4 India '(ar)e't 4inancia( retai( "arketin) net5ork'

166& Enter' the :und' !#ndication 'ector

1663=rokera)e and i'tri+ution +u'ine''e' incorporated into a 'eparate co"pan# 8Kotak !ecuritie'. In e't"ent =ankin) di i'ion incorporated into a 'eparateco"pan# 8 Kotak Mahindra Capita( Co"pan#

166%

The Auto :inance =u'ine'' i' hi ed o44 into a 'eparate co"pan# 8 KotakMahindra Pri"e Li"ited -4or"er(# kno5n a' Kotak Mahindra Pri"u' Li"ited .Kotak Mahindra take' a 'i)ni4icant 'take in :ord Credit Kotak MahindraLi"ited> 4or 4inancin) :ord ehic(e'. The (aunch o4 Matrix In4or"ation !er ice'Li"ited "ark' the Group ' entr# into in4or"ation di'tri+ution.

1667Enter' the "utua( 4und "arket 5ith the (aunch o4 Kotak Mahindra A''etMana)e"ent Co"pan#.

&


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&


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CH NO ?' INDUSTRY PROFILE

O!r Corporate I4e3t*t

7ota9 Mah*34ra Ba39 At Kotak Mahindra =ank> 5e addre'' the entire 'pectru" o4 4inancia( need' 4orindi idua(' and corporate'. We ha e the product'> the experience> the in4ra'tructure and"o't i"portant(# the co""it"ent to de(i er pra)"atic> end8to8end 'o(ution' that rea((#5ork.

7ota9 Mah*34ra O14 M!t!a1 L*5e I3/!ra3$e Lt4Kotak Mahindra O(d Mutua( Li4e In'urance i' a *%D&2 ,oint enture +et5een KotakMahindra =ank Ltd. and O(d Mutua( p(c. Kotak Mahindra O(d Mutua( Li4e In'urance i'one o4 the 4a'te't )ro5in) in'urance co"panie' in India and ha' 'ho5n re"arka+(e)ro5th 'ince it' inception in &


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HEADSTART CHILD PLANSA 'pecia((# tai(ored> co't8e44ecti e p(an> ai"' to )i e #our chi(dren the 4inancia( "ean'

to pur'ue hi' or her drea"' and (i e the".

The Headstart Advantage: Choice o4 & p(an ariant'

o :uture Protecto A''ure Wea(th

Maxi"i?e' 5ea(th 5hi(e pro idin) protection oint (i4e option !a e 4or & chi(dren 5ith one p(an Additiona( +onu' unit' :(exi+(e Withdra5a(

Li4e i' unpredicta+(e> +ut the ear(ier #ou 'tart p(annin) 4or #our 4uture> the "ore (ike(#are #ou and #our 4a"i(# to reap the re5ard'.

SU7HI EEVANIt i' a (on)8ter" 'a in)' and protection p(an that keep' pace 5ith #our chan)in) need' ate er# 'tep o4 (i4e 8 +e it 'a in) 4or #our kid'F 4uture> or #our retire"ent. Thi' p(an he(p'

#ou prepare 4or i"portant "i(e'tone' in #our (i4e. And> "o't i"portant(#> it en'ure' #our4a"i(# i' 'ecure 5hen (i4e di'he' up har'h "i'4ortune'.

Be3e5*t/ :u(4i(( #our chi(drenF' drea"' or p(an #our retire"ent !"a(( 'a in)' to "eet #our ar#in) need' Re)u(ar +onu'e' Ea'# app(icationD

o !i"p(e docu"entationo No "edica( te't'o /a''(eQ4ree 'i)n8up

Pre"iu" pa#"ent option'D #ear(#> ha(48#ear(# or "onth(# -throu)h EC! on(#

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7OTA7 PRIVILEGED ASSURANCE PLAN@In thi' po(ic#> the in e't"ent ri'k in the in e't"ent port4o(io i' +orne +# the

po(ic#ho(der.B

Kotak Pri i(e)ed A''urance P(an i' exc(u'i e(# cra4ted to en'ure that 5hi(e #our "one#i' protected> it "u(tip(ie'. Concoctin) the +e't "ix o4 'tead# and 'ta+(e )ro5th 5ithd#na"ic and 4(exi+(e "ana)e"ent o4 #our 4und'> the p(an 'tri e' to )i e #ou that extra

+it o4 return> protection and 4(exi+i(it#> in a 'in)(e p(an "ade 'pecia((# 4or di'cernin)cu'to"er' (ike #ou. The p(an o44er' #ou acce'' to t5o 4und' to pro ide #ou a enue 4or)ro5th 5hi(e o44erin) #ou Capita( Guarantee.P(ea'e note that in thi' po(ic#> the in e't"ent ri'k in the in e't"ent port4o(io i' to +e

+orne +# the po(ic#ho(der. /o5e er> Kotak Li4e In'urance o44er' #ou a capita( )uaranteeon thi' p(an to 'a4e)uard a)ain't the do5n'ide ri'k o4 4a((in) "arket'."Why should you invest in the Kotak Privileged Assurance Plan?"

Thi' p(an i' idea( i4 #ou 5ant Lo5 co't 'tructure on an in e't"ent p(u' in'urance packa)e A 'hort in e't"ent hori?on :(exi+i(it# o4 in e't"ent a"ount' Protection o4 #our hard earned "one# A))re''i e )ro5th 5ith ca(cu(ated ri'k' !"art protection 4or #our 4a"i(#

7OTA7 TERM PLANKotak Ter" P(an i' a pure ri'k product that ai"' to co er #our (i4e at a no"ina( co't.ou "a# 5ant to take thi' p(an to co er #our out'tandin) de+t' (ike a "ort)a)e> a ho"e(oan etc. !ince thi' i' a pure ri'k co er product> there i' no "aturit# +ene4it' pa#a+(e on'ur i a(. Thi' i' a non8participatin) p(an.

Who $a3 a-a*1 o5 th*/ p1a3 /OW OL O O /A9E TO =E TO A9AIL O: T/I! PLAN

Mini"u" a)e 8 17 #ear' Maxi"u" a)e 8 %< #ear'

:OR W/AT TERM CAN I A9AIL O: T/I! PLAN

1< 8 0< #ear' 4or re)u(ar pre"iu" 3 8 0< #ear' 4or 'in)(e pre"iu"

AMITY INTERNATIONAL BUSINESS SCHOOL &1


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W/AT I! T/E MINIM M PREMI M T/AT I NEE TO PA AN AT

W/AT INTER9AL! CAN I PA T/EMSuarter(# R'.32 or in ha(4 #ear(# or uarter(# in'ta(("ent'.2 our Kotak Ter" P(an can +e con erted into an# other p(an o44ered +# Kotak

Li4e In'urance -except 4or another Ter" p(an pro ided there are at (ea't 3 #ear' +e4ore co er cea'e' .

3 In ca'e #ou 4or)et to pa# #our pre"iu" +# the due date> #ou are entit(ed to a)race period o4 0< da#' 4ro" the date o4 unpaid pre"iu"'.

% In ca'e o4 a 4inancia( e"er)enc#> #ou ha e the option to 'urrender the po(ic# pro ided #ou ha e taken the 'in)(e pre"iu" pa#"ent option .

What -a1!e8a44/ $a3 o! opt 5or

ou "a# a ai( o4 the 4o((o5in) non8participatin) a(ue8add' 4or a no"ina( pre"iu" atthe ti"e o4 takin) #our po(ic#> 'u+,ect to a))re)ate pre"iu" on a(( a(ue8add' -exceptCritica( I((ne'' =ene4it not exceedin) 0


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Per+a3e3t D*/a"*1*t Be3e5*t' Thi' +ene4it can +e added to #our +a'ic (i4ein'urance po(ic# to pro ide 4inancia( 'upport in ca'e o4 di'a+i(it# due to anaccident. The a"ount pa#a+(e under thi' +ene4it 5ou(d +e paid out a' an annuit#.

The "axi"u" per"anent di'a+i(it# +ene4it that #ou can a ai( o4 i' e ua( to the +a'ic 'u" a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' .

Cr*t*$a1 I113e// Be3e5*t' Thi' +ene4it can +e added to #our +a'ic (i4e in'urance po(ic# to pro ide 4inancia( 'upport in the e ent o4 a "edica( e"er)enc#. On the4ir't occurrence o4 critica( i((ne'' durin) the ter" o4 the po(ic#> #ou 5ou(drecei e a portion o4 the 'u" a''ured to reduce #our 4inancia( +urden in thi'e"er)enc#.

What 4o o! re$e*-e o3 +at!r*t o5 the po1*$

!ince thi' i' a pure ri'k co er p(an> there are no "aturit# +ene4it'.

What happe3/ *3 the e-e3t o5 4eath o5 the 1*5e *3/!re4

In the e ent o4 death durin) the ter" o4 the po(ic#> the +ene4iciar# 5ou(d recei e the'u" a''ured.

Are there a3 Ta< Be3e5*t/

!ection 7 1 decide' to +u# the Kotak Ter" P(an 4or a 'u"a''ured o4 R'.1 'o"e +ene4it' are )uaranteed and 'o"e are aria+(e. GuaranteedReturn' are "arked U)uaranteedU in the i((u'tration. 9aria+(e return' are 'ho5n at t5odi44erent rate' o4 a''u"ed 4uture return'. The'e a''u"ed rate' o4 return are not)uaranteed and the# are not the upper or (o5er (i"it' o4 5hat #ou "i)ht )et +ack .Theactua( return "a# +e di44erent dependin) on a nu"+er o4 4actor' inc(udin) 4uturein e't"ent per4or"ance.



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What 4o o! 4o 3e in a'ion> huntin)> otherdan)erou' ho++ie' or acti itie'> or ha in) +een on dut# in "i(itar#> para8"i(itar#>'ecurit# or po(ice or)ani?ation.

A44*t*o3a1 E


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'ho5n on the po(ic#> nor 'ha(( an# per'on takin) out or rene5in) orcontinuin) a po(ic# accept an# re+ate> except 'uch re+ate a' "a# +e a((o5edin accordance 5ith the pu+(i'hed pro'pectu'e' or ta+(e' o4 the in'urer.

-& An# per'on "akin) de4au(t in co"p(#in) 5ith the pro i'ion o4 thi' 'ection'ha(( +e puni'ha+(e 5ith 4ine> 5hich "a# extend to 4i e hundred rupee'.The product (ea4(et )i e' on(# the 'a(ient 4eature' o4 the p(an. The po(ic#docu"ent i' the conc(u'i e docu"ent> and pro ide' in detai( a(( thecondition' re(atin) to the Kotak Ter" P(an.

7OTA7 PREFFERED TERM PLANThe Kotak Pre4erred Ter" P(an i' de'i)ned to pro ide #ou 5ith reduced pre"iu" rate'4or a 'u" a''ured o4 R'.1< (akh' and a+o e.

Who */ e1*%*"1e 5or 7ota9 Pre5erre4 Ter+ P1a3

1 Ma(e' o er the a)e o4 17 #ear'> 5ho do not u'e to+acco in an# 4or".& :e"a(e' o er the a)e o4 17 #ear'.

What are the a4-a3ta%e/ o5 th*/ p1a3 It i' a (o58co't in'urance p(an. ou can choo'e +et5een a re)u(ar pre"iu" pa#"ent option or a 'in)(e pre"iu"

pa#"ent option. In ca'e #ou opt 4or the re)u(ar pre"iu" pa#"ent option> #ou"a# pa# #our pre"iu"' either annua((#> or in ha(4 #ear(# or uarter(#in'ta(("ent'.

our Kotak Ter" P(an can +e con erted into an# other p(an o44ered +# Kotak

Li4e In'urance -except 4or another Ter" p(an pro ided there are at (ea't 3 #ear' +e4ore co er cea'e' .

In ca'e #ou 4or)et to pa# #our pre"iu" +# the due date> #ou are entit(ed to a

)race period o4 0< da#' 4ro" the date o4 unpaid pre"iu"'. In ca'e o4 a 4inancia( e"er)enc#> #ou ha e the option to 'urrender the po(ic#

pro ided #ou ha e taken the 'in)(e pre"iu" pa#"ent option .


ou "a# a ai( o4 the 4o((o5in) non8participatin) a(ue8add' 4or a no"ina( pre"iu" atthe ti"e o4 takin) #our po(ic#> 'u+,ect to a))re)ate pre"iu" on a(( a(ue8add' -exceptCritica( I((ne'' =ene4it not exceedin) 0


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A$$*4e3ta1 Death Be3e5*t' Thi' +ene4it pro ide' an additiona( a"ount -o er anda+o e the +a'ic 'u" a''ured to the +ene4iciar# in the e ent o4 the accidenta(

death o4 the (i4e in'ured. The "axi"u" co er a ai(a+(e under thi' rider i' e ua(to the +a'ic 'u" a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' .

Per+a3e3t D*/a"*1*t Be3e5*t' Thi' +ene4it can +e added to #our +a'ic (i4ein'urance po(ic# to pro ide 4inancia( 'upport in ca'e o4 di'a+i(it# due to anaccident. The a"ount pa#a+(e under thi' +ene4it 5ou(d +e paid out a' an annuit#.The "axi"u" per"anent di'a+i(it# +ene4it that #ou can a ai( o4 i' e ua( to the

+a'ic 'u" a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' . Permanent disability is defined as permanent and immediate inability to work or

permanent loss of use of two limbs or total and permanent loss of sight.

Cr*t*$a1 I113e// Be3e5*t' Thi' +ene4it can +e added to #our +a'ic (i4e in'urance po(ic# to pro ide 4inancia( 'upport in the e ent o4 a "edica( e"er)enc#. On the4ir't occurrence o4 critica( i((ne'' durin) the ter" o4 the po(ic#> #ou 5ou(drecei e a portion o4 the 'u" a''ured to reduce #our 4inancia( +urden in thi'e"er)enc#.

What 4o o! re$e*-e o3 +at!r*t o5 the po1*$

!ince thi' i' a pure ri'k co er p(an> there are no "aturit# +ene4it'.


In the e ent o4 death durin) the ter" o4 the po(ic#> the +ene4iciar# 5ou(d recei e the'u" a''ured.


!ection 7 1 0< #ear' o(d> i' e(i)i+(e 4or the Kotak Pre4erred Ter" P(an. /edecide' to take up thi' po(ic# 4or a 'u" a''ured o4 R'.1


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/i' annua( pre"iu" 5ou(d +e R'.&> %23. In ca'e o4 Mr. !har"aF' un4ortunate deathdurin) the next ten #ear'> hi' 4a"i(# 5ou(d recei e R'.1 in a'ion> huntin)>other dan)erou' ho++ie' or acti itie'> or ha in) +een on dut# in "i(itar#>

para8"i(itar#> 'ecurit# or po(ice or)ani?ation.

A44*t*o3a1 E


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Proh*"*t*o3 o5 Re"ate/

!ection 21 o4 the In'urance Act> 1607 'tate'D 8-1 No per'on 'ha(( a((o5 or o44er to a((o5> either direct(# or indirect(#> a' an

induce"ent to an# per'on to take out or rene5 or continue an in'urance inre'pect o4 an# kind o4 ri'k re(atin) to (i e' or propert# in India> an# re+ate o4the 5ho(e or part o4 the co""i''ion pa#a+(e or an# re+ate o4 the pre"iu"'ho5n on the po(ic#> nor 'ha(( an# per'on takin) out or rene5in) orcontinuin) a po(ic# accept an# re+ate> except 'uch re+ate a' "a# +e a((o5edin accordance 5ith the pu+(i'hed pro'pectu'e' or ta+(e' o4 the in'urer.

-& An# per'on "akin) de4au(t in co"p(#in) 5ith the pro i'ion o4 thi' 'ection'ha(( +e puni'ha+(e 5ith 4ine> 5hich "a# extend to 4i e hundred rupee'.

How to live for today and plan for an independent tomorrow

7OTA7 MONEY BAC7 PLANThe Kotak Mone# =ack P(an not on(# co er' #our (i4e> it a('o a''ure' #ou a certain

percent o4 the 'u" a''ured a' ca'h pa#"ent at re)u(ar inter a(' o4 e er# 3 #ear'. It i' a'a in)' p(an 5ith the added ad anta)e o4 (i4e co er and re)u(ar ca'h in4(o5. Thi' p(an i'

idea( 4or p(annin) 'pecia( "o"ent' (ike a 5eddin)> #our chi(d ' education or purcha'e o4an a''et etc. Thi' i' a participatin) p(an -5ith pro4it' .

Who $a3 a-a*1 o5 th*/ P1a3

/OW OL O O /A9E TO =E TO A9AIL O: T/I! PLAN

Mini"u" a)e8 17 #ear'Maxi"u" a)e8 %< #ear'

:OR W/AT TERM CAN I A9AIL O: T/I! PLAN

13> &< ; &3 #ear'

W/AT I! T/E MA IM M AGE T/AT T/E PLAN CAN CO9ER O

TILL*3 #ear'



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What are the a4-a3ta%e/ o5 th*/ p1a3

1. The p(an not on(# co er' #our (i4e +ut a('o pro ide' #ou 5ith a 'ur i a( +ene4it pa#out e er# 3 #ear'.

&. In the un4ortunate e ent o4 death o4 (i4e in'ured> the +ene4iciar# 5ou(d recei ethe death +ene4it. The death +ene4it keep' increa'e' +# *H o4 the 'u" a''urede er# #ear.

0. On "aturit#> #ou 5ou(d recei e the 'u" o4 the !ur i a( =ene4it> =onu' additionand Guaranteed addition .

JBo3!/ a44*t*o3 */ the a+o!3t *3 the A$$!+!1at*o3 A$$o!3t, *3 e 'u+,ect to the a))re)ate pre"iu" on a(( a(ue8add' not exceedin) 0


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Ter+ Be3e5*t Pre5erre4 Ter+ Be3e5*t' In the e ent o4 death durin) the ter"

o4 thi' +ene4it> the +ene4iciar# 5ou(d recei e an additiona( death +ene4it a"ount>5hich i' o er and a+o e the 'u" a''ured. The "axi"u" Ter" =ene4it #ou cana ai( o4 i' e ua( to the +a'ic 'u" a''ured. Where the ter" +ene4it co er app(ied4or i' "ore than R' 1< (akh'> +etter rate' "a# app(#> 'u+,ect to "eetin)e(i)i+i(it# re uire"ent'.

A$$*4e3ta1 Death Be3e5*t' Thi' +ene4it pro ide' an additiona( a"ount -o er anda+o e the 'u" a''ured to the +ene4iciar# in the e ent accidenta( death o4 the (i4ein'ured. The "axi"u" co er a ai(a+(e under thi' +ene4it i' e ua( to the +a'ic'u" a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' .

Per+a3e3t D*/a"*1*t Be3e5*t' Thi' +ene4it can +e added to the +a'ic (i4ein'urance p(an to pro ide 4inancia( 'upport in ca'e o4 per"anent di'a+i(it# due toan accident. The a"ount pa#a+(e under thi' +ene4it 5ou(d +e paid out a' anannuit#. The "axi"u" per"anent di'a+i(it# +ene4it that #ou can a ai( o4 i'e ua( to the +a'ic 'u" a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' .

Per+a3e3t 4*/a"*1*t */ 4e5*3e4 a/ per+a3e3t a34 *++e4*ate *3a"*1*t to

:or9 or per+a3e3t 1o// o5 !/e o5 t:o 1*+"/ or tota1 a34 per+a3e3t 1o// o5

/*%ht

Cr*t*$a1 I113e// Be3e5*t' Thi' +ene4it can +e added to the +a'ic (i4e in'urance p(an to pro ide 4inancia( 'upport in the e ent o4 "edica( e"er)encie'. On the4ir't occurrence o4 critica( i((ne'' durin) the ter" o4 the po(ic#> #ou 5ou(drecei e a portion o4 the 'u" a''ured to reduce #our 4inancia( +urden in thi'e"er)enc#.P(ea'e contact our Li4e Ad i'or 4or the (i't o4 critica( i((ne''e'

L*5e G!ar4*a3 Be3e5*t' Thi' +ene4it can +e a ai(ed o4> on(# in ca'e 5here the(i4e in'ured and the propo'er are t5o di44erent indi idua('. In ca'e o4 theun4ortunate death o4 the propo'er> thi' +ene4it keep' the po(ic# a(i e +# 5ai in)a(( 4uture pre"iu"' on the po(ic#.

A$$*4e3ta1 D*/a"*1*t G!ar4*a3 Be3e5*t' In ca'e the propo'er i' per"anent(#di'a+(ed a' a re'u(t o4 an accident> thi' +ene4it keep' the po(ic# a(i e +# 5ai in)a(( 4uture pre"iu"' on the po(ic#.

"What do you receive on maturity of this plan?"



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On "aturit#> #ou 5ou(d recei e the 'u" o4 the !ur i a( +ene4it> Guaranteed additionand =onu' addition. The ta+(e +e(o5 i((u'trate' the 'ur i a( +ene4it pa# out 4or e er#R'.1


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YEARS

1&7< 12&< 1%0< 167< &00< &07 1< and 13 a' "entioned a+o e. A''u"in) thatthe Accu"u(ation Account )ro5' at a rate o4 %H> the pa#out on "aturit# 5ou(d +eR'.316

=ALANCE ! M A!! RER'.& hi' 4a"i(# 5ou(d recei e a 'u" o4 R'.73


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actua( return "a# +e di44erent dependin) on a nu"+er o4 4actor' inc(udin) 4uturein e't"ent per4or"ance.

What 4o o! 4o 3e 'uicide> in'anit#> i""ora(it#> co""ittin) an# +reach o4(a5 or +ein) under the in4(uence o4 dru)'> (i uor etc.

+. When the (i4e in'ured i' en)a)ed in a iation or aeronautic' other than a' a

pa''en)er on a (icen'ed co""ercia( aircra4t operatin) on a 'chedu(ed route.c. ue to in,urie' 4ro" 5ar -5hether 5ar i' dec(ared or not > in a'ion> huntin)>

other dan)erou' ho++ie' or acti itie'> or ha in) +een on dut# in "i(itar#> para8"i(itar#> 'ecurit# or po(ice or)ani?ation.

A44*t*o3a1 E


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No c(ai" under the Kotak Accidenta( i'a+i(it# Guardian =ene4it 5ou(d +e ad"i''i+(ein the 4o((o5in) circu"'tance'D

a. The pre"iu" pa#er 'u44er' 4ro" 'e(48in4(icted in,urie'> 'uicide> in'anit#>i""ora(it#> co""ittin) an# +reach o4 (a5 or +ein) under the in4(uence o4 dru)'>(i uor etc.

+. Where the pre"iu" pa#er i' en)a)ed in a iation or aeronautic' other than a' a pa''en)er on a (icen'ed co""ercia( aircra4t operatin) on a 'chedu(ed route.

c. The pre"iu" pa#er 'u44er' in,urie' 4ro" 5ar -5hether 5ar i' dec(ared or not >in a'ion> huntin)> "ountaineerin)> "otor racin) o4 an# kind> other dan)erou'ho++ie' or acti itie'> or ha in) +een on dut# in "i(itar#> para8"i(itar#> 'ecurit# or

po(ice or)ani?ation.



induce"ent to an# per'on to take out or rene5 or continue an in'urance in

re'pect o4 an# kind o4 ri'k re(atin) to (i e' or propert# in India> an# re+ate o4the 5ho(e or part o4 the co""i''ion pa#a+(e or an# re+ate o4 the pre"iu"'ho5n on the po(ic#> nor 'ha(( an# per'on takin) out or rene5in) orcontinuin) a po(ic# accept an# re+ate> except 'uch re+ate a' "a# +e a((o5edin accordance 5ith the pu+(i'hed pro'pectu'e' or ta+(e' o4 the in'urer.


7OTA7 CHILD ADVNTAGE PLANThe Kotak Chi(d Ad anta)e P(an i' an in e't"ent p(an de'i)ned to "eet #our chi(d '4uture 4inancia( need'. It ' a p(an that )i e' #our chi(d the Ua?aadiU to rea(i?e hi' drea"'.The p(an i' a participatin) p(an 5ith a 138da# 4ree (ook period.

Who $a3 a-a*1 o5 th*/ p1a3 /OW OL OE! T/E C/IL /A9E TO =E TO A9AIL O: T/I! PLAN



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Mini"u" a)e 8 < #ear'Maxi"u" a)e 81* #ear'

:OR W/AT TERM CAN I A9AIL O: T/I! PLAN1< 8 0< #ear'

W/AT I! T/E MA IM M ! M A!! RE ALLOWE N ER T/I!

PLANR'.&3>



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thi' +ene4it keep' the po(ic# a(i e +# 5ai in) a(( 4uture pre"iu"' on the po(ic#.

A$$*4e3ta1 D*/a"*1*t G!ar4*a3 Be3e5*t' In ca'e the pre"iu" pa#er i' per"anent(# di'a+(ed a' a re'u(t o4 accident> thi' +ene4it keep' the po(ic# a(i e

+# 5ai in) a(( 4uture pre"iu"' on the po(ic#.


!ection 7 1 ter" o4 13 #ear'> 'o that 5hen the chi(d i' &1#ear' o(d> he ha' at (ea't R'.3 (akh to in e't in hi' education career etc.Mr. Gupta +u#' the Kotak Chi(d Ad anta)e P(an a(on) 5ith +oth the a(ue8add' o44ered5ith the +a'ic p(an.

De/$r*pt*o3

Pre+*!+

7ota9 $h*14 a4-a3ta%e p1a3 pre+*!+

R'.01>73* 8L*5e %!ar4*a3 "e3e5*t pre+*!+

R'.1>&&3 8

A$$*4e3ta1 4*/a"*1*t %!ar4*a3 "e3e5*t pre+*!+

R'.133 8

Tota1 A33!a1 Pre+*!+ Pa*4

R/ 66,)6 8

*0 What :o!14 "e the pa o!t o3 +at!r*t o5 the p1a3

A''u"in) that the Accu"u(ation Account )ro5' at %Hp.a.> the "aturit# a"ount 5ou(d +e R'.%> 02>7 7&>1


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Mr.Gupta ha' taken the +ene4it o4 5ai er o4 pre"iu" +# pa#in) a "ini"a( additiona(a"ount o4 R'.1> 07< 8 per #ear. In the e ent o4 Mr.GuptaF' death or accidenta( di'a+i(it#>4uture pre"iu"' pa#a+(e on hi' 'onF' po(ic# 5i(( +e 5ai ed and the po(ic# 5i(( continue

to +e in 4orce. On "aturit# the +ene4iciar# 5ou(d )et the 'u" a''ured o4 R'.3> the4o((o5in) 5ou(d +eco"e pa#a+(eD

I4 the po(ic# ha' +een in 4orce 4or 4i e #ear' or i4 the (i4e in'ured i' at (ea't 17

#ear' o(d> the +ene4iciar# 5i(( recei e either the !u" A''ured or Accu"u(ationAccount 5hiche er i' hi)her> a' on the date o4 death.

I4 the death occur' 5ithin 4i e #ear' 4ro" co""ence"ent o4 po(ic# and i4 the

in'ured i' (e'' than 17 #ear' o(d> the death +ene4it 5ou(d +e either the tota( o4 a((

pre"iu"' paid 'o 4ar or the 'urrender a(ue at that ti"e> 5hiche er i' hi)her.

What 4o o! 4o 3e

http://www.kotaklifeinsurance.com/omkm3/branchlocator.htmhttp://www.kotaklifeinsurance.com/omkm3/branchlocator.htmmailto:[email protected]://www.oldmutual.com/userimages/Kotak-Life-250.jpghttp://www.kotaklifeinsurance.com/omkm3/branchlocator.htmhttp://www.kotaklifeinsurance.com/omkm3/branchlocator.htmmailto:[email protected]


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i""ora(it#> co""ittin) an# +reach o4 (a5 or +ein) under the in4(uence o4 dru)'>(i uor etc.

-& Where the pre"iu" pa#er i' en)a)ed in a iation or aeronautic' other than a' a

pa''en)er on a (icen'ed co""ercia( aircra4t operatin) on a 'chedu(ed route.-0 The pre"iu" pa#er 'u44er' in,urie' 4ro" 5ar -5hether 5ar i' dec(ared or not >

in a'ion> huntin)> "ountaineerin)> "otor racin) o4 an# kind> other dan)erou'ho++ie' or acti itie'> or ha in) +een on dut# in "i(itar#> para8"i(itar#> 'ecurit# or

po(ice or)ani?ation.



induce"ent to an# per'on to take out or rene5 or continue an in'urance inre'pect o4 an# kind o4 ri'k re(atin) to (i e' or propert# in India> an# re+ate o4the 5ho(e or part o4 the co""i''ion pa#a+(e or an# re+ate o4 the pre"iu"'ho5n on the po(ic#> nor 'ha(( an# per'on takin) out or rene5in) orcontinuin) a po(ic# accept an# re+ate> except 'uch re+ate a' "a# +e a((o5edin accordance 5ith the pu+(i'hed pro'pectu'e' or ta+(e' o4 the in'urer.


7OTA7 ENDOWMENT PLAN

Kotak Endo5"ent P(an i' a protection p(an that co er' #our (i4e and at the 'a"e ti"een'ure' that #our "one# doe' not (ie id(e. It in e't' a portion o4 #our pre"iu" in4inancia( in'tru"ent' and en'ure' a con'idera+(e )ro5th in 'a in)'. Thi' i' a

participatin) p(an -5ith pro4it' .

Who $a3 a-a*1 o5 th*/ p1a3

/o5 o(d do #ou ha e to +e to a ai( o4 thi' p(an

Mini"u" a)e 8 17 #ear'Maxi"u" a)e 8 %3 #ear'

:or 5hat ter" can i a ai( o4 thi' p(an 1


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1. On "aturit#> #ou 5ou(d recei e the 'u" a''ured p(u' the +onu' addition. =onu'addition i' the a"ount in the Accu"u(ation Account > in exce'' o4 the 'u"a''ured. Accu"u(ation Account i' #our per'ona( account> in 5hich the pre"iu"'

that #ou pa# are depo'ited> the return dec(ared e er# #ear i' added and ri'k andexpen'e char)e' are deducted.

&. The a"ount a ai(a+(e in the Accu"u(ation Account i' in e'ted in ariou'4inancia( in'tru"ent' -a' per IR A re)u(ation' 'o #our "one# 5ork' harder 4or#ou.

0. The Auto"atic Co er Maintenance 4aci(it# en'ure' the po(ic# re"ain' in 4orcee en i4 #ou "i'' pre"iu" pa#"ent'. Thi' 4aci(it# i' a ai(a+(e a4ter the 4ir't three#ear' o4 the ter".

2. ou can take a (oan a)ain't #our po(ic#> a4ter the po(ic# ha' +een in 4orce 4or at(ea't three #ear'.

3. ou ha e the option o4 pa#in) pre"iu"' uarter(#> ha(4 #ear(# or #ear(#. oua('o ha e the 4(exi+i(it# to pa# pre"iu"' throu)h the 4u(( ter" o4 the po(ic# or

pa# it 4or a 4ixed ter" o4 0> 3> *> 1< or 13 #ear'.%. ou ha e the +ene4it o4 a 138da# 4ree (ook period.


ou "a# a ai( o4 the 4o((o5in) a(ue8ad ' 4or a no"ina( pre"iu" at the ti"e o4 takin)

the p(an> 'u+,ect to the a))re)ate pre"iu" on a(( a(ue8add' not exceedin) 05hich i' o er and a+o e the 'u" a''ured. The "axi"u" ter" +ene4it #ou cana ai( o4 i' e ua( to the +a'ic 'u" a''ured. Where the Ter" =ene4it co er app(ied4or i' "ore than R'.1< (akh'> +etter rate' "a# app(#> 'u+,ect to "eetin)e(i)i+i(it# re uire"ent'.

A$$*4e3ta1 Death Be3e5*t' Thi' +ene4it pro ide' an additiona( a"ount -o er anda+o e the +a'ic 'u" a''ured to the +ene4iciar# in the e ent o4 the accidenta(death o4 the (i4e in'ured. The "axi"u" co er a ai(a+(e under thi' +ene4it i'e ua( to the +a'ic 'u" a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' .

Per+a3e3t D*/a"*1*t Be3e5*t' Thi' +ene4it pro ide' 4inancia( 'upport in ca'e o4#our per"anent di'a+i(it# due to an accident. The a"ount pa#a+(e i' o er anda+o e the +a'ic 'u" a''ured and 5ou(d +e paid out a' an annuit#. The "axi"u"



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Per"anent i'a+i(it# =ene4it that #ou can a ai( o4 i' e ua( to the +a'ic 'u"a''ured -'u+,ect to a "axi"u" o4 R'.1< (akh' .

Per+a3e3t 4*/a"*1*t */ 4e5*3e4 a/ a per+a3e3t a34 *++e4*ate *3a"*1*t to

:or9, the per+a3e3t 1o// o5 !/e o5 t:o 1*+"/ or a tota1 a34 per+a3e3t 1o//o5 /*%ht

Cr*t*$a1 I113e// Be3e5*t' Thi' +ene4it can +e taken 5ith the +a'ic (i4e in'urance po(ic# to pro ide 4inancia( 'upport in the e ent o4 "edica( e"er)encie'. On the4ir't occurrence o4 critica( i((ne'' durin) the ter" o4 the po(ic#> #ou 5ou(drecei e a portion o4 the 'u" a''ured to reduce #our 4inancia( +urden in thi'e"er)enc#.The "axi"u" Critica( I((ne'' =ene4it that #ou can a ai( o4 i' e ua( to ha(4 the

+a'ic 'u" a''ured 'u+,ect to "axi"u" o4 R'. &< (akh'.

L*5e G!ar4*a3 Be3e5*t' Thi' +ene4it can +e a ai(ed o4> on(# in a ca'e 5here the(i4e in'ured and the propo'er are t5o di44erent indi idua('. In ca'e o4 theun4ortunate death o4 the propo'er> thi' +ene4it keep' the po(ic# a(i e +# 5ai in)a(( 4uture pre"iu"' on the po(ic#.

A$$*4e3ta1 D*/a"*1*t G!ar4*a3 Be3e5*t' In ca'e the propo'er i' per"anent(#di'a+(ed a' a re'u(t o4 an accident> thi' +ene4it keep' the po(ic# a(i e +# 5ai in)a(( 4uture pre"iu"' on the po(ic#. Thi' +ene4it i' a ai(a+(e a('o 5here the (i4ein'ured i' the propo'er.


In the e ent o4 death o4 the (i4e in'ured durin) the ter" o4 the p(an> the +ene4iciar#5ou(d recei e the 'u" a''ured or the a"ount in the Accu"u(ation Account> 5hiche eri' hi)her.


!ection 7 1


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decide' to take the Li4e Guardian =ene4it a' a rider to the p(an. /e doe' thi' to pro ideenhanced 'ecurit# and protection to hi' 5i4e.

The a33!a1 pre+*!+/ pa*4 " Mr G!pta are a/ 5o11o:/

A"ount -R'.

KOTAK EN OWMENT PLAN PREMI M &&>33&

LI:E G AR IAN =ENE:IT PREMI M 1>160>7 a(( 4uture pre"iu"' on Mr'. GuptaF' po(ic# 5ou(d +e 5ai ed.Therea4ter the po(ic# 5i(( continue a' i4 the pre"iu"' are +ein) paid re)u(ar(#. On"aturit# o4 her po(ic# Mr'. Gupta 5ou(d recei e a"ount' a' di'cu''ed a+o e.

J A//!+*3% that the A$$!+!1at*o3 A$$o!3t %ro:/ at @ a34 &> re/pe$t*-e1 p a

In the i((u'tration> 'o"e +ene4it' are )uaranteed and 'o"e are aria+(e. GuaranteedReturn' are "arked U)uaranteedU in the i((u'tration. 9aria+(e return' are 'ho5n at t5odi44erent rate' o4 a''u"ed 4uture return'. The'e a''u"ed rate' o4 return are not

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)uaranteed and the# are not the upper or (o5er (i"it' o4 5hat #ou "i)ht )et +ack .Theactua( return "a# +e di44erent dependin) on a nu"+er o4 4actor' inc(udin) 4uturein e't"ent per4or"ance.

CH NO @' SWOT ANALYSIS

STRENGTHS Market po'ition i' 'tron) A))re''i e 4orei)n +ank !hareho(der' return ha' )ro5n "ore than * ti"e' Maintain' a po'ition a' a (eadin) A'ian Ca'h Mana)e"ent pro ider =rand Q Kotak =ank "odern and d#na"ic (ook appea(' to the )ro5in) "idd(e

inco"e earner' I"pro ed product propo'ition =etter )eo)raphic +a(ance'

WEA7NESS / :C> I =I> A=N8AM=RO> Citi+ank and ICICI =ank are do"inant p(a#er' /a' di'ad anta)e due to (a't entr# :e5er (ocation' a' co"pared to other MNC +ank' !er ice de(i er# perception i' 5eak

OPPORTUNITIES =ranch expan'ion 4or rapid )ro5th Increa'e 4ocu' on a(ue creation in 5ho(e +ankin) I"pro e 'hareho(der' return =ui(d "arket 'hare in con'u"er +ankin) a' con'u"er +ankin) continue' to o44er

hi)he't potentia( 4or )ro5th =roadenin) o4 the de"o)raphic +a'e Tie up' 5ith "a'ter card net5ork' Inte)rated 'a(e' and 'er ice approach Can o44er a co"p(ete corporate packa)e under propo'ed corporate re(ation'hip



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THREATS ICICI i' pitchin) in uite a))re''i e(# Citi+ank i' expandin) in ne5 "arket' Co"petiti e product' and o44er' 4ro" I =I and / :C Propo'ed net5orkin) o4 a(( +ranche' in next % "onth'



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CH NO ' DATA COLLECTIONDATA COLLECTION

A 'e"i8'tructured kind o4 ue'tionnaire 5a' de'i)ned 5hich contain +oth open8 ended

and "u(tip(e choice ue'tion'.The ue'tionnaire de'i)ned 5a' to pro ide dua( in4or"ation 'harin) t#pe> it i' 'eriou'(#undertaken that an#one 5ho in under)oin) the proce''> 'hou(d 4ind hi' intere't or e('e he"i)ht 'ho5 di'intere't to5ard' the pro)ra""e. Actua((#> I ha e +een dre''in) "#

pro,ect a' the a5arene'' pro)ra""e. Thi' a5arene'' pro)ra""e pro ided a(( tho'e4i((in) up o4 the ue'tionnaire 5ith enou)h in4or"ation a+out the 'er ice' o4 the KotakMahindra O(d Mutua( Li4e In'urance. Thu' the ue'tionnaire 5a' e ua((# i"portant +oth5a#' to the cu'to"er' a' 5e(( a' to the +ank to dra5 out it' pro'pect'.The ue'tionnaire de'i)ned to kno5 the potentia( o4 the cu'to"er and he(p a' a'ucce''4u( pro)ra""e i'itin) the o44ice' and '"a(( +u'ine'' enterpri'e' 5ithout pre8appoint"ent a('o pro ided "e 5ith in4or"ation a+out that the# de"and 4ro" a ne5

+ank 5here the# 5ou(d pre4er to open an account.:or tho'e a(read# ho(din) a re(ation'hip 5ith the Kotak Mahindra O(d Mutua( Li4eIn'urance> 'hared 5ith "e their opinion a+out the +ack and it' 'er ice' a' 5e(( a''u))e'tion' 5ere a('o o+tained 4ro" the" o4 ho5 to attract "ore potentia(it# 4or the

+ank.

SAMPLING PLANSAMPLING PLAN

I ha e +een a''i)ned to i'it the o44ice' and '"a(( +u'ine'' 4ir"' in e(hi. I 5a' 4ree tochoo'e "# area. /ence I choo'e area' near the =ank or p(ace' 5here I cou(d 4ee( )reater

pro'pect'> 'uch a p(ace' 5here '"a(( 'hoppin) "a((' or ne5 +u'ine'' 4ir"' ha e co"eout and o er the indu'tria( +e(t' 5here 'e era( o44ice' cou(d +e 4ound out.The 'a"p(e area' I choo'e 5a' the 4o((o5in)D

Noida Pun,a+i =a)h La5rence Road Gur)aon

I 5a' ad i'ed not to i'it the +i))er co"panie' +ecau'e the# 5ere not our tar)etcu'to"er'.



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FIELD WOR7 PLANFIELD WOR7 PLAN

The 4ie(d 5ork 5a' carried accordin) the 'a"p(in) p(an 4or"ed. I i'ited the o44ice' and'"a(( +u'ine'' enterpri'e' 4ir"' under "# o5n (i"itation' and ti"e con'traint at the4o((o5in) p(ace'.

-a Noida-+ Pun,a+i =a)h-c La5rence Road-d Gur)aon

At 'o"e o4 the o44ice' appoint"ent 5ere a(read# "ade 5hi(e at "an# p(ace' I i'ited>5ithout pre8appoint"ent'.The "ain "oti e 4or the'e i'it' 5a' to identi4# the potentia( cu'to"er' or the potentia("arket. A t5o85a# di'cu''ion 5a' done throu)h 5hich the cu'to"er' 5ere "ade a5areo4 the 'er ice' o4 Kotak Mahindra. The ue'tionnaire' are either direct(# 4i((ed up orindirect(# 4i((ed up +# the peop(e throu)h thi' a' 5e(( a' the pro'pect o4 the area' a' 'uch5ere the'e ca"pai)n' 5ere put up.



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FINANCIAL STATEMENTS

7ota9 Mah*34ra L*5e I3/!ra3$e Lt4Pro5*t Lo// A$$o!3t 5or the ear e34e4 6&St De$, )>>?

C!rre3t Year

6&/t De$ >?

.*3 1a9h/0

Pre-*o!/ Year

6&/t De$ >=

.*3 1a9h/0

I3$o+e

!a(e' 1>102.&& *73.%3

Other Inco"e &3.0& &1.00&&? ?= >@

E


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Ba1a3$e Sheet a/ at 6& De$ )>>?

A/ o3 6& /t De$ >?

.I3 La$/0

A/ o3 6& /t De$ >=

.I3 La$/0So!r$e o5 F!34/

!hareho(der' 4und'

!hare capita( *02.&< 702.& neither "ore nor (e''. Ca'h 'horta)e 5i((di'rupt the 4ir"F' operation' 5hi(e exce''i e ca'h 5i(( 'i"p(# re"ain id(e> 5ithoutcontri+utin) an#thin) to5ard' the 4ir"F' pro4ita+i(it#. Thu' a "a,or 4unction o4 the:inancia( Mana)er i' to "aintain a 'ound ca'h po'ition.Ca'h i' the "one# 5hich a 4ir" can di'+ur'e i""ediate(# 5ithout an# re'triction Theter" ca'h inc(ude' currenc# and che ue' he(d +# the 4ir" and +a(ance' in it' +ankaccount'. !o"eti"e' near ca'h ite"'> 'uch a' "arketa+(e 'ecuritie' or +ank ti"edepo'it' are a('o inc(uded in ca'h. The +a'ic characteri'tic' o4 near ca'h a''et' are thatthe# can readi(# +e con erted into ca'h. Ca'h "ana)e"ent i' concerned 5ith "ana)in)o4D

i Ca'h 4(o5' in and out o4 the 4ir"ii Ca'h 4(o5' 5ithin the 4ir"

iii Ca'h +a(ance' he(d +# the 4ir" at a point o4 ti"e +# 4inancin) de4icit or in ertin)'urp(u' ca'h.

!a(e' )enerate ca'h 5hich ha' to +e di'+ur'ed out. The 'urp(u' ca'h ha' to +e in e'ted5hi(e de4icit ca'h ha' to +e +orro5ed. Ca'h "ana)e"ent 'eek' to acco"p(i'h thi' c#c(eat a "ini"u" co't. At the 'a"e ti"e it a('o 'eek' to achie e (i uidit# and contro(.There4ore the ai" o4 Ca'h Mana)e"ent i' to "aintain ade uate contro( o er ca'h

po'ition to keep 4ir" 'u44icient(# (i uid and to u'e exce'' ca'h in 'o"e pro4ita+(e 5a#.The Ca'h Mana)e"ent i' a('o i"portant +ecau'e it i' di44icu(t to predict ca'h 4(o5'accurate(#. Particu(ar(# the in4(o5' and that there i' no per4ect coincidence +et5een thein4(o5' and out4(o5' o4 the ca'h. urin) 'o"e period' ca'h out4(o5' 5i(( exceed ca'hin4(o5' +ecau'e pa#"ent 4or taxe'> di idend' or 'ea'ona( in entor# +ui(d up etc. On theother hand ca'h in4(o5' 5i(( +e "ore than ca'h pa#"ent +ecau'e there "a# +e (ar)e ca'h'a(e' and "ore de+tor'F rea(i?ation at an# point o4 ti"e. Ca'h Mana)e"ent i' a('oi"portant +ecau'e ca'h con'titute' the '"a((e't portion o4 the current a''et'> #et

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"ana)e"entF' con'idera+(e ti"e i' de oted in "ana)in) it. An o+ iou' ai" o4 the 4ir"no58a8da#' i' to "ana)e it' ca'h a44air' in 'uch a 5a# a' to keep ca'h +a(ance at a"ini"u" (e e( and to in e't the 'urp(u' ca'h 4und' in pro4ita+(e opportunitie'. In order

to re'o( e the uncertaint# a+out ca'h 4(o5 prediction and (ack o4 '#nchroni?ation +et5een ca'h receipt' and pa#"ent'> the 4ir" 'hou(d de e(op appropriate 'trate)ie're)ardin) the 4o((o5in) 4our 4acet' o4 ca'h "ana)e"ent.

& Ca/h P1a33*3%' 8 Ca'h in4(o5' and ca'h out4(o5' 'hou(d +e p(anned to pro,ect ca'h'urp(u' or de4icit 4or each period o4 the p(annin) period. Ca'h +ud)et 'hou(d

prepared 4or thi' purpo'e.

) Ma3a%*3% the $a/h 51o:/' 8 The 4(o5 o4 ca'h 'hou(d +e proper(# "ana)ed. The ca'hin4(o5' 'hou(d +e acce(erated 5hi(e> a' 4ar a' po''i+(e dece(eratin) the ca'hout4(o5'.

6 Opt*+!+ $a/h 1e-e1' 8 The 4ir" 'hou(d decide a+out the appropriate (e e( o4 ca'h +a(ance'. The co't o4 exce'' ca'h and dan)er o4 ca'h de4icienc# 'hou(d +e "atchedto deter"ine the opti"u" (e e( o4 ca'h +a(ance'.

= I3-e/t*3% /!rp1!/ $a/h' 8 The 'urp(u' ca'h +a(ance 'hou(d +e proper(# in e'ted toearn pro4it'. The 4ir" 'hou(d decide a+out the di i'ion o4 'uch ca'h +a(ance +et5een

+ank depo'it'> "arketa+(e 'ecuritie' and inter corporate (endin).

The idea( Ca'h Mana)e"ent '#'te" 5i(( depend on the 4ir"F' product'> or)ani'ation'tructure> co"petition> cu(ture and option' a ai(a+(e. The ta'k i' co"p(ex and deci'iontaken can e44ect i"portant area' o4 the 4ir".

F!3$t*o3/ o5 Ca/h Ma3a%e+e3t'

Ca'h Mana)e"ent 4unction' are inti"ate(#> interre(ated and intert5ined Linka)e a"on)di44erent Ca'h Mana)e"ent 4unction' ha e (ed to the adoption o4 the 4o((o5in) "ethod'4or e44icient Ca'h Mana)e"entD

'e o4 techni ue' o4 ca'h "o+i(i?ation to reduce operatin) re uire"ent o4 ca'hMa,or e44ort' to increa'e the preci'ion and re(ia+i(it# o4 ca'h 4oreca'tin).Maxi"u" e44ort to de4ine and uanti4# the (i uidit# re'er e need' o4 the 4ir".e e(op"ent o4 exp(icit a(ternati e 'ource' o4 (i uidit#A))re''i e 'earch 4or re(ati e(# "ore producti e u'e' 4or 'urp(u' "one# a''et'.



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The a+o e approache' in o( e the 4o((o5in) action' 5hich a 4inance "ana)er ha' to per4or".1. To 4oreca't ca'h in4(o5' and out4(o5'&. To p(an ca'h re uire"ent'0. To deter"ine the 'a4et# (e e( 4or ca'h.2. To "onitor 'a4et# (e e( 4or ca'h3. To (ocate the needed 4und'%. To re)u(ate ca'h in4(o5'*. To re)u(ate ca'h out4(o5'7. To deter"ine criteria 4or in e't"ent o4 exce'' ca'h6. To a ai( +ankin) 4aci(itie' and "aintain )ood re(ation' 5ith +anker'

Mot*-e/ 5or ho14*3% $a/h'

There are 5o!r pri"ar# "oti e' 4or "aintainin) ca'h +a(ance'D1. Tran'action "oti e& .Precautionar# "oti e0. !pecu(ati e "oti e

2. Co"pen'atin) "oti e

& Tra3/a$t*o3 +ot*-e' 8 The tran'action "oti e re4er' to the ho(din) o4 ca'h to"eet anticipated o+(i)ation' 5ho'e ti"in) i' not per4ect(# '#nchroni'ed 5ithca'h receipt'. I4 the receipt' o4 ca'h and it' di'+ur'e"ent' cou(d exact(# coincidein the nor"a( cour'e o4 operation'> a 4ir" 5ou(d not need ca'h 4or tran'action

purpo'e'. A(thou)h a "a,or part o4 tran'action +a(ance' are he(d in ca'h> a part"a# a('o +e in 'uch "arketa+(e 'ecuritie' 5ho'e "aturit# con4or"' to the ti"in)o4 the anticipated pa#"ent'.

) Pre$a!t*o3ar +ot*-e' 8 Precautionar# "oti e o4 ho(din) ca'h i"p(ie' the needto ho(d ca'h to "eet unpredicta+(e o+(i)ation' and the ca'h +a(ance he(d inre'er e 4or 'uch rando" and un4ore'een 4(uctuation' in ca'h 4(o5' are ca((ed a'

precautionar# +a(ance'. Thu'> precautionar# ca'h +a(ance 'er e' to pro ide acu'hion to "eet unexpected contin)encie'. The unexpected ca'h need' at 'hort



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notice "a# +e the re'u(t o4 ariou' rea'on' a' D unexpected '(o5do5n inco((ection o4 account' recei a+(e> cance((ation' o4 'o"e purcha'e order'> 'harpincrea'e in co't o4 ra5 "ateria(' etc. The "ore unpredicta+(e the ca'h 4(o5'> the

(ar)er the need 4or 'uch +a(ance'. Another 4actor 5hich ha' a +earin) on the (e e(o4 precautionar# +a(ance' i' the a ai(a+i(it# o4 'hort ter" credit. Precautionar#ca'h +a(ance' are u'ua((# he(d in the 4or" o4 "arketa+(e 'ecuritie' 'o that the#earn a return.

6 Spe$!1at*-e +ot*-e' 8 It re4er' to the de'ire o4 a 4ir" to take ad anta)e o4opportunitie' 5hich pre'ent the"'e( e' at unexpected "o e"ent' and 5hich aret#pica((# out'ide the nor"a( cour'e o4 +u'ine''. The 'pecu(ati e "oti erepre'ent' a po'iti e and a))re''i e approach. :ir"' ai" to exp(oit pro4ita+(eopportunitie' and keep ca'h in re'er e to do 'o. The 'pecu(ati e "oti e he(p' totake ad anta)e o4 DIn opportunit# to purcha'e ra5 "ateria(' at a reduced price on

pa#"ent o4 i""ediate ca'h A chance to 'pecu(ate on intere't rate "o e"ent' +# +u#in) 'ecuritie' 5hen intere't rate' are expected to dec(ine de(a# purcha'e' o4ra5 "ateria(' on the anticipation o4 dec(ine in price' etc.

= Co+pe3/at*o3 +ot*-e' 8 et another "oti e to ho(d ca'h +a(ance' i' toco"pen'ate +ank' 4or pro idin) certain 'er ice' and (oan'. =ank' pro ide a

ariet# o4 'er ice' to +u'ine'' 4ir"' > 'uch a' c(earance' o4 che ue'> 'upp(# o4credit in4or"ation> tran'4er o4 4und'> etc. Whi(e 4or 'o"e o4 the 'er ice' +ank'char)e a co""i''ion o4 4ee 4or other' the# 'eek indirect co"pen'ation. 'ua((#c(ient' are re uired to "aintain a "ini"u" +a(ance o4 ca'h at the +ank. !incethi' +a(ance can not +e uti(i'ed +# the 4ir"' 4or tran'action purpo'e'> the +ankthe"'e( e' can u'e the a"ount 4or 'er ice' rendered. To +e co"pen'ated 4ortheir 'er ice' indirect(# in thi' 4or"> the# re uire the c(ient' to a(5a#' keep a

+ank +a(ance 'u44icient to earn a return e ua( to the co't o4 'er ice'. !uch +a(ance' are co"pen'atin) +a(ance'. Co"pen'atin) +a(ance' are a('o re uired +#'o"e (oan a)ree"ent' +et5een a +ank and it' cu'to"er.



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CASH MANAGEMENT' OB ECTIVES

The =a'ic o+,ecti e o4 ca'h "ana)e"ent i' t5o 4o(dD

-a To "eet the ca'h di'+ur'e"ent need' -pa#"ent 'chedu(e-+ To "ini"i?e 4und' co""itted to ca'h +a(ance'. The'e are con4(ictin) and "utua((#contradictor# and the ta'k o4 ca'h "ana)e"ent i' to reconci(e the".

Meet*3% the pa +e3t/ /$he4!1e' 8 A +a'ic o+,ecti e o4 the ca'h "ana)e"ent i' to "eetthe pa#"ent 'chedu(e> i.e. to ha e 'u44icient ca'h to "eet the ca'h di'+ur'e"ent need' o4the 4ir". The i"portance o4 'u44icient ca'h to "eet the pa#"ent 'chedu(e can hard(# +eo er e"pha'i?ed. The ad anta)e' o4 ade uate ca'h are D -i it pre ent' in'o( enc# or

+ankruptc# ari'in) out o4 the ina+i(it# o4 the 4ir" to "eet it' o+(i)ation' -ii there(ation'hip 5ith the +ank i' not 'trained -iii it he(p' in 4o'terin) )ood re(ation' 5ithtrade creditor' and 'upp(ier' o4 ra5 "ateria('> a' pro"pt pa#"ent "a# a('o he(p theirca'h "ana)e"ent - it (ead' to a 'tron) credit ratin) 5hich ena+(e' the 4ir" to

purcha'e )ood' on 4a ora+(e ter"' and to "aintain it' (ine o4 credit 5ith +ank' and other

'ource' o4 credit - i to take ad anta)e o4 4a ora+(e +u'ine'' opportunitie' that "a# +ea ai(a+(e periodica((# and - i 4ina((# the 4ir" can "eet unanticipated ca'h expenditure5ith a "ini"u" o4 'train durin) e"er)encie'> 'uch a' 'trike' > 4ire' or a ne5 "arketin)ca"pai)n +# co"petitor'.

M*3*+*2*3% 5!34/ $o++*tte4 to $a/h "a1a3$e/' 8 The 'econd o+,ecti e o4 ca'h"ana)e"ent i' to "ini"i?e ca'h +a(ance'. In "ini"i?in) ca'h +a(ance' t5o con4(ictin)a'pect' ha e to +e reconci(ed. A hi)h (e e( o4 ca'h +a(ance 5i((> en'ure pro"pt pa#"entto)ether 5ith a(( the ad anta)e'> +ut it a('o i"p(ie' that (ar)e 4und' 5i(( re"ain id(eu(ti"ate(# re'u(t' (e'' to the expected. A (o5 (e e( o4 ca'h +a(ance'> on the other hand>"a# "ean 4ai(ure to "eet the pa#"ent 'chedu(e that ai" o4 ca'h "ana)e"ent 'hou(d +eto ha e an opti"a( a"ount o4 ca'h +a(ance'



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CASH MANAGEMENT TECHNI UES PROCESSES

The 4o((o5in) are the +a'ic ca'h "ana)e"ent techni ue' and proce'' 5hich are he(p4u(in +etter ca'h "ana)e"entD

Spee4 $a/h $o11e$t*o3' In "ana)in) ca'h e44icient(# the ca'h in 4(o5 proce'' can +eacce(erated throu)h '#'te"atic p(annin) and re4ined techni ue'. The'e are t5o +roadapproache' to do thi' 5hich are narrated a' underD

Pro+pt pa +e3t " $!/to+er' One 5a# to en'ure pro"pt pa#"ent +# cu'to"er i' pro"pt +i((in) 5ith c(ear(# de4ined credit po(ic#. Another and "ore i"portant techni ueto encoura)e pro"pt pa#"ent the +# cu'to"er i' the practice o4 o44erin) tradedi'count ca'h di'count.

Ear1 $o3-er/*o3 o5 pa +e3t *3to $a/h' Once the cu'to"er ha' "ake' the pa#"ent +#5ritin) it' che ue' in 4a or o4 the 4ir"> the co((ection can +e expedited +# pro"ptenca'h"ent o4 the che ue. It 5i(( +e reca((ed that there i' a (ack +et5een the ti"e andche ue i' prepared and "ai(ed +# the cu'to"er and the ti"e 4und' are inc(uded in theca'h re'er oir o4 the 4ir".

Co3$e3trat*o3 Ba39*3%' In thi' '#'te" o4 decentra(i'ed co((ection o4 account'

recei a+(e> (ar)e 4ir"' 5hich ha e a (ar)e no. o4 +ranche' at di44erent p(ace'> 'e(ect 'o"eo4 the'e 5hich are 'trate)ica((# (ocated a' co((ection center' 4or recei in) pa#"ent 4orcu'to"er'. In'tead o4 a(( the pa#"ent' +ein) co((ected at the head o44ice o4 the 4ir"> theche ue' 4or a certain )eo)raphica( area' are co((ected at a 'peci4ied (oca( co((ectioncenter'. nder thi' arran)e"ent the cu'to"er' are re uired to 'end their pa#"ent' at(oca( co((ection center co erin) the area in 5hich the# (i e and the'e are depo'ited in the(oca( account o4 concerned co((ection> a4ter "eetin) (oca( expen'e'> i4 an#. :und'

+e#ond a predeter"ined "ini"u" are tran'4erred dai(# to a centra( or di'+ur'in) orconcentration +ank or account. A concentration +ankin) i' one 5ith 5hich the 4ir" ha' a"a,or account u'ua((# a di'+ur'e"ent account. /ence thi' arran)e"ent i' re4erred to a'concentration +ankin).

Lo$98Bo< S /te+' The concentration +ankin) arran)e"ent i' in'tru"enta( in reducin)the ti"e in o( e in "ai(in) and co((ection. =ut 5ith thi' '#'te" o4 co((ection o4 account'recei a+(e> proce''in) 4or purpo'e' o4 interna( accountin) i' in o( ed i.e. 'o"eti"e ine(ap'e' +e4ore a che ue i' depo'ited +# the (oca( co((ection center in it' account. The

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(ock8+ox '#'te" take' care o4 the'e kind o4 pro+(e"> apart 4ro" e44ectin) econo"# in"ai(in) and c(earance ti"e'. nder thi' arran)e"ent> 4ir"' hire a po't o44ice +ox ati"portant co((ection center'. The cu'to"er' are re uired to re"it pa#"ent' to (ock8+ox.

The (oca( +ank' o4 the 4ir"> at re'pecti e p(ace'> are authori?ed to open the +ox and pickup the re"ittance recei ed 4ro" the cu'to"er'. 'ua((# the authori'ed +ank pick' up theche ue' 'e era( ti"e' a da# and depo'it' the" in the 4ir"F' account. A4ter creditin) theaccount o4 the 4ir" the +ank' 'end a depo'it 2epo '(ip a(on) 5ith the (i't o4 pa#"ent'and other enc(o'ure'> i4 an#> to the 4ir" +# 5a# o4 proo4 and record o4 the co((ection.

S1o:*3% 4*/"!r/e+e3t/' A +a'ic 'trate)# o4 ca'h "ana)e"ent i' to de(a# pa#"ent' a'(on) a' po''i+(e 5ithout i"pairin) the credit ratin) 'tandin) o4 the 4ir". In 4act> '(o5di'+ur'e"ent repre'ent' a 'ource o4 4und' re uirin) no intere't pa#"ent'. There are'e era( techni ue' to de(a# pa#"ent o4 account' pa#a+(e na"e(# -1 a oidance o4 ear(#

pa#"ent' -& centra(i?ed di'+ur'e"ent' -0 4(oat' -2 accrua('.

A-o*4a3$e o5 ear1 pa +e3t/' One 5a# to de(a# pa#"ent' i' to a oid ear(# pa#"ent'.Accordin) to the ter"' o4 credit> a 4ir" i' re uired to "ake a pa#"ent 5ithin a 'tipu(ated

period. It entit(e' a 4ir" to ca'h di'count'. I4 ho5e er pa#"ent' are de(a#ed +e#ond thedue date> the credit 'tandin) "a# +e ad er'e(# a44ected 'o that the 4ir"' 5ou(d 4ind itdi44icu(t to 'ecure trade credit (ater. =ut i4 the 4ir" pa#' it' account' pa#a+(e +e4ore thedue date it ha' no 'pecia( ad anta)e. Thu' a 4ir" 5ou(d +e 5e(( ad i'ed not to "ake

pa#"ent' ear(# i.e. +e4ore the due date.

Ce3tra1*2e4 4*/"!r/e+e3t/' Another "ethod to '(o5 do5n di'+ur'e"ent' i' to ha ecentra(i?ed di'+ur'e"ent'. A(( the pa#"ent' 'hou(d +e "ade +# the head o44ice 4ro" acentra(i?ed di'+ur'e"ent account. !uch an arran)e"ent 5ou(d ena+(e a 4ir" to de(a#

pa#"ent' and con'er e ca'h 4or 'e era( rea'on'. :ir't(# it in o( e' increa'e in the tran'itti"e. The re"ittance' 4ro" the head o44ice to the cu'to"er' in di'tant p(ace' 5ou(din o( e "ore "ai(in) ti"e than a decentra(i?ed pa#"ent +# a (oca( +ranch. The 'econdrea'on 4or reduction in operatin) ca'h re uire"ent i' that 'ince the 4ir" ha' a centra(i?ed

+ank account> a re(ati e(# '"a((er tota( ca'h +a(ance 5i(( +e needed. In the ca'e o4 adecentra(i?ed arran)e"ent> a "ini"u" ca'h +a(ance 5i(( ha e to +e "aintained at each

+ranch 5hich 5i(( add to a (ar)e operatin) ca'h +a(ance. :ina((#> 'chedu(e' can +e ti)ht(#contro((ed and di'+ur'e"ent' "ade exact(# on the ri)ht da#.

F1oat' A er# i"portant techni ue o4 '(o5 di'+ur'e"ent' i' 4(oat. The ter" 4(oat re4er'to a"ount o4 "one# tied up in the che ue that ha e +een 5ritten> +ut ha e #et to +eco((ected and enca'hed. A(ternati e(#> 4(oat repre'ent' the di44erence +et5een the +ank

+a(ance and +ook +a(ance o4 ca'h o4 a 4ir". The di44erence +et5een the +a(ance a'



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'ho5n in the 4ir"F' record and the actua( +ank +a(ance i' due to tran'it and proce''in)de(a#'. There i' ti"e (a) +et5een the i''ue o4 a che ue +# the 4ir" and it' pre'entationto it' +ank +# the cu'to"erF' +ank 4or pa#"ent. The i"p(ication i' that a(thou)h a

che ue ha' +een i''ued ca'h 5ou(d +e re uired (ater 5hen the che ue re'ented 4orenca'h"ent. There4ore> a 4ir" can 'end re"ittance a(thou)h it doe' not ha e ca'h in it'

+ank at the ti"e o4 i''uance o4 che ue. Mean5hi(e> 4und' can +e arran)ed to "ake pa#"ent' 5hen the che ue i' pre'ented 4or co((ection a4ter a 4e5 da#'. :(oat u'ed in thi''en'e i' ca((ed che ue kittin).

A$$r!a1/' :ina((#> a potentia( too( 4or 'tretchin) account' pa#a+(e i' accrua(' 5hich arede4ined a' current (ia+i(itie' that repre'ent a 'er ice or )ood' recei ed +# a 4ir" +ut not#et paid 4or. :or in'tance> pa#ro((> i.e. re"uneration to e"p(o#ee'> 5ho render 'er ice'in ad ance and recei e pa#"ent (ater. In a 5a# the# extend credit to the 4ir" 4or a periodat the end o4 5hich the# are paid> 'a#> a 5eek or "onth. The (on)er the period a4ter5hich pa#"ent i' "ade> the )reater the a"ount o4 4ree 4inancin) and the '"a((er thea"ount o4 ca'h +a(ance' re uired. Thu'> (e'' 4re uent pa#ro(('> i.e. "onth(# a' co"paredto 5eek(#> are i"portant 'ource' o4 accrua('. The# can +e "anipu(ated to '(o5 do5ndi'+ur'e"ent'.

DETERMINING THEOPTIMAL LEVEL OF CASH BALANCE'Ca'h +a(ance i' "aintained 4or the tran'action purpo'e' and additiona( a"ount "a# +e

"aintained a' a +u44er or 'a4et# 'tock.The :inance "ana)er 'hou(d deter"ine the appropriate a"ount o4 ca'h +a(ance. !uch adeci'ion i' in4(uenced +# trade8o44 +et5een ri'k and return. I4 the 4ir" "aintain' a '"a((ca'h +a(ance > it' (i uidit# po'ition +eco"e' 5eek and 'u44er' 4ro" a paucit# o4 ca'h to"ake pa#"ent'. =ut a hi)her pro4ita+i(it# can +e attained +# in e'tin) re(ea'ed 4und' in'o"e pro4ita+(e opportunitie'. When the 4ir" run' out o4 ca'h it "a# ha e to 'e(( it'"arketa+(e 'ecuritie'> i4 a ai(a+(e> or +orro5. Thi' in o( e' tran'action co't.On the other hand i4 the 4ir" "aintain' a hi)her (e e( o4 ca'h +a(ance> it 5i(( ha e a'ound (i uidit# po'ition +ut 4ore)o the opportunitie' to earn intere't'. The potentia(intere't (o't on ho(din) (ar)e ca'h +a(ance in o( e' opportunitie' co't to the 4ir".Thu' the 4ir" 'hou(d "aintain an opti"u" ca'h +a(ance> neither a (ar)e nor a '"a(( ca'h

+a(ance.To 4ind out the opti"u" ca'h +a(ance the tran'action co't and ri'k o4 too '"a(( +a(ance'hou(d +e "atched 5ith opportunit# co't' o4 too (ar)e a +a(ance 'hou(d +e "atched 5ithopportunit# co't o4 too (ar)e a +a(ance. :i)ure 'ho5' thi' trade8o44 )raphica((#. I4 the



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4ir" "aintain' (ar)er ca'h +a(ance' it' tran'action co't 5ou(d dec(ine> +ut theopportunit# co't 5ou(d increa'e. At point the 'u" o4 t5o co't' i' "ini"u". Thi' i'the point o4 opti"u" ca'h +a(ance. Receipt' and di'+ur'e"ent o4 ca'h are hard(# in

per4ect'#nchroni?ation.e'pite the a+'ence o4 '#nchroni?ation it i' not di44icu(t to deter"ine the opti"u" (e e(o4 ca'h +a(ance.I4 ca'h 4(o5' are predicta+(e it i' 'i"p(# a pro+(e" o4 "ini"i?in) the tota( co't' 8 thetran'action co't and the opportunit# co't.The deter"ination o4 opti"u" 5orkin) ca'h +a(ance under certaint# can thu' +e ie5eda' an in entor# pro+(e" in 5hich 5e +a(ance the co't o4 too (itt(e ca'h - tran'action co'ta)ain't the co't o4 too "uch ca'h- opportunit# ca'hCa'h 4(o5'> in practice> are not co"p(ete(# predicta+(e. At ti"e' the# "a# +e co"p(ete(#rando". nder 'uch a 'ituation> a di44erent "ode( +a'ed on the techni ue o4 contro(theor# i' needed to 'o( e the pro+(e" o4 appropriate (e e( o4 5orkin) ca'h +a(ance.With unpredicta+(e aria+i(it# o4 ca'h 4(o5'> 5e need in4or"ation on tran'action co't'>opportunit# co't' and de)ree o4 aria+i(it# o4 net ca'h 4(o5' to deter"ine the appropriateca'h +a(ance. Gi en 'uch data the "ini"u" and "axi"u" o4 ca'h +a(ance' 'hou(d +e'et. Greater the de)ree o4 aria+i(it#> hi)her the "ini"u" ca'h +a(ance. Whene er theca'h +a(ance reache' a "axi"u" (e e(> the di44erence' +et5een "axi"u" and "ini"u"

(e e(' 'hou(d +e in e'ted in "arketa+(e 'ecuritie'. When +a(ance i' 4a((' to ?ero>"arketa+(e 'ecuritie' 'hou(d +e 'o(d and proceed 'hou(d +e tran'4erred to the 5orkin)ca'h +a(ance'.

EVALUATION OF CASH MANAGEMENT PERFORMANCES

To a''e'' the ca'h "ana)e"ent per4or"ance thi' pha'e i' di ided a' 4o((o5'Da !i?e o4 Ca'h

+ Li uidit# and Ade uac# o4 ca'hc Contro( o4 ca'h

A0 S*2e o5 $a/h' The uantu" o4 ca'h he(d +# KOTAK MA/IN RA durin) the 'tud# period i' pre'ented in the ta+(e. The trend percenta)e a('o ca(cu(ated and 'ho5n inthe ta+(eD

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S*2e o5 $a/h "a1a3$e .R/ *3 Crore/0

Year Ca/h .I3 La$/0 Tre34

&


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S*2e o5 /a1e/ .R/ *3 La$/0

ear

!a(e' Trend

&


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.B0 L* !*4*t a34 A4e !a$ o5 Ca/h'

One o4 the "o't i"portant ,o+' o4 the :inance Mana)er i' to "aintain 'u44icient (i uidit#

to ena+(e the 4ir" to pa# o44 it' o+(i)ation' 5hen the# 4a(( due. To te't a 4ir"F' (i uidit#and 'o( enc# 5e co""on(# u'e current and uick ratio'. Traditiona((# &D1 current ratioand 1D1 uick ratio are taken a' 'ati'4actor# 'tandard' 4or the purpo'e. The 4or"erindicate' the extent o4 the 'oundne'' o4 the current 4inancia( po'ition o4 a 4ir" and thede)ree o4 'a4et# pro ided to the creditor'> the (ater 'i)ni4ie' the a+i(it# o4 a 4ir" to 'ett(ea(( it' current o+(i)ation' on a particu(ar date.

C!rre3t rat*o a34 !*$9 rat*o

Year C!rre3t rat*o !*$9 rat*o

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Our ana(#'i' c(ear(# 'ho5' that the co"pan# ha' er# 'ound po'ition re)ardin) (i uidit#and 'o( enc#. :urther> a(( the ratio' 4(uctuate throu)hout the period.

.C0 Co3tro1 o5 Ca/h'One o4 the "a,or o+,ecti e' o4 ca'h "ana)e"ent 4ro" the 'tand point o4 increa'in)return on in e't"ent i' to econo"i?e on the ca'h ho(din) 5ithout i"pairin) the o era(((i uidit# re uire"ent' o4 the 4ir"'. Thi' i' po''i+(e +# e44ectin) ti)hter contro(' o erca'h 4(o5'. The 4o((o5in) ratio ha' +een app(ied to a''e'' the e44icienc# o4 ca'h contro(D

Ca'h to Current A''et' ratioCa'h turno er ratioCa'h to current (ia+i(itie' ratio

Ca/h to C!rre3t a//et/ rat*o

Year Ca/h to CA Rat*o

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Co3$1!/*o3' It can +e in4erred 4ro" the a+o e ta+(e that ca'h to current a''et' ratio i'decrea'in) 5hich 'ho5' dark po'ition o4 (i uidit#> 5hich u(ti"ate(# a44ect the

operationa( e44icienc# o4 the 4ir".

Ca/h to C!rre3t L*a"*1*t Rat*o . 0

Year Ca/h to CL rat*o

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MANAGEMENT OF INVENTORY

In entorie' are the 'tock o4 the product "ade 4or 'a(e +# the co"pan# or 'e"i 4ini'hed

)ood' or ra5 "ateria('. In entor# o4 4ini'hed )ood' 5hich are read# 4or 'a(e i' re uiredto "aintain '"ooth "arketin) operation. The in entor# o4 ra5 "ateria( and 5ork in

pro)re'' i' re uired in order to "aintain an uno+'tructed 4(o5 o4 "ateria( in the production (ine. The'e in entorie' 'er e a' a (ink +et5een the production andcon'u"ption o4 )ood'.The a'pect o4 "ana)e"ent o4 in entor# i' e'pecia((# i"portant in re'pect to the 4act thatin countr# (ike India> the capita( +(ock in ter"' o4 in entor# i' a+out * a+'o(ute(# i"perati e to "ana)e e44icient(# and e44ecti e(# in orderto a oid unnece''ar# in e't"ent in the". A(thou)h to "aintain (o5 in entorie' "a#

pro e to +e pro4ita+(e +ut to "aintain er# (o5 in entorie' "a# pro e ri'k# on thecontrar#.Thi' a'pect o4 "ana)e"ent i4 tack(ed in a proper 5a# "a# pro e to +e a +oon it'e44ecti e and e44icient "ana)e"ent 5ou(d re'u(t in the "aintainin) o4 opti"u" (e e( o4in entorie'. At thi' (e e( the pro4ita+i(it# o4 the or)ani'ation 5i(( not +e ,eopardi'ed atthe co't o4 in entor#.

No5 4ro" the a+o e 'tated 4act' it i' c(ear that "aintainin) o4 opti"u" (e e( o4in entor# in o( e' hu)e co't> 'o 5h# 'hou(d keep the in entorie' at a((. =a'ica((# there

are three "ain rea'on' 4or 5hich in entorie' are 'tocked and the# areD8

& Tra3/a$t*o3 Mot*-e' Thi' "oti e (a#' e"pha'i' on "aintainin) o4 in entorie'in order to "aintain a '"ooth and uno+'tructed 'upp(# o4 "ateria(' 4or the 'a(e'and production operation'.

) Pre$a!t*o3ar Mot*-e' Thi' "oti e e"pha'i?e' on the 'tockin) )ood' in orderto )uard a)ain't the uncertaintie' o4 4uture i.e. unpredicta+(e chan)e' in the4orce' o4 de"and> 'upp(# and other 4orce'.

6 Spe$!1at*-e Mot*-e' Thi' "oti e in4(uence' the deci'ion' re)ardin) the increa'eor decrea'e in the (e e( o4 in entor# in order to take ad anta)e o4 price4(uctuation'.

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A co"pan# 'hou(d "aintain ade uate 'tock o4 "ateria(' 4or a continuou' 'upp(# to the4actor# 4or an uninterrupted production. It i' not po''i+(e 4or a co"pan# to procure ra5

"ateria( in'tantaneou'(# 5hene er needed. A ti"e (a) exi't' +et5een de"and and'upp(# o4 "ateria(. A('o> there exi't' an uncertaint# in procurin) ra5 "ateria( in ti"e at"an# occa'ion'. The procure"ent o4 "ateria(' "a# +e de(a#ed +ecau'e o4 4actor'

+e#ond co"pan#F' contro( e.). tran'port di'ruption> 'trike etc. There4ore> the 4ir" 'hou(dkeep a 'u44icient 'tock o4 ra5 "ateria( at a ti"e to ha e 'trea"(ine Other 4actor' 5hich"a# incite u' to keep 'tock o4 in entorie' i' the uantit# di'count'> expected ri'e i'

price.The 5ork in proce'' in entor# +ui(d' up +ecau'e o4 the production c#c(e. Productionc#c(e i' the ti"e 'pan +et5een the introduction o4 ra5 "ateria( in to the production andthe e"er)ence o4 4ini'hed )ood' at the co"p(etion o4 production c#c(e. Ti(( the

production c#c(e co"p(ete'> the 'tock o4 5ork in proce'' ha' to +e "aintained.E44icient 4ir"' con'tant(# tr# to "ake the production c#c(e '"a((er +# i"pro in) their

production techni ue'.The 'tock o4 4ini'hed )ood' ha' to +e he(d +ecau'e production and 'a(e' are notin'tantaneou'. A 4ir" can not produce i""ediate(# 5hen )ood' are de"anded +#cu'to"er'. There4ore to 'upp(# 4ini'hed )ood' on re)u(ar +a'i'> their 'tock ha' to"aintain 4or 'udden de"and o4 cu'to"er'> in ca'e the 4ir" 'a(e' are 'ea'ona( in nature>

'u+'tantia( 4ini'hed )ood' in entor# 'hou(d +e kept to "eet the peak de"and. :ai(ure to'upp(# product' to cu'to"er> 5hen de"anded> 5ou(d "ean (o'' o4 the 4ir"F' 'a(e' to theco"petitor'.The +a'ic o+,ecti e in ho(din) ra5 "ateria( in entor# i' 'eparate purcha'e and

production acti itie' and in ho(din) 4ini'hed )ood' in entor# i' to 'eparate productionand 'a(e' acti itie'. I4 ra5 "ateria( in entor# i' not he(d> purcha'e 5ou(d ha e to +e"ade re)u(ar(# at the ti"e o4 u'a)e. Thi' 5ou(d "ean production intereption' and hi)hco't o4 orderin).A 'u44icient(# (ar)e in entor# ha' to +e "aintained o4 4ini'hed )ood' 'o a' to "eet the4(uctuatin) de"and'. I4 a c(o'e (ink i' "aintained +et5een the 'a(e' and the productiondepart"ent then an or)ani'ation can do 5ith a '"a(( in entor# a('o. In the proce''>in entor# i' a('o nece''ar# +ecau'e production can not +e in'tantaneou'. =ut it 'hou(d +e'een that the 'i?e o4 production c#c(e 'hou(d +e '"a((.

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En'ure continuou' 'upp(# o4 "ateria( to 4aci(itate uninterrupted production.To "aintain 'u44icient 'tock' o4 ra5 "ateria( in the period' o4 'hort 'upp(# ande ident price ri'e.To "aintain 'u44icient in entor# o4 4ini'hed )ood' 4or '"ooth 'a(e' operation.Mini"i?e carr#in) co't and ti"e.Contro( in e't"ent and keep it to the opti"u" (e e(.

=e4ore di'cu''in) the in entor# contro( techni ue> here i' the di'cu''ion o4 the ariou'ter"' 'uch a' econo"ic order uantit#> carr#in) co't etc.

& E$o3o+*$ Or4er !a3t*t ' It i' the in entor# (e e( 5hich "ini"i'e' the tota(o4 orderin) and carr#in) co't. eter"inin) econo"ic order uantit# in o( e' t5ot#pe' o4 co't' i.e. orderin) co't and carr#in) co't.

) Or4er*3% Co/t' Thi' i' u'ed e'pecia((# in the ca'e o4 ra5 "ateria(' and i'inc(uded in the co't incurred in ac uirin) the ra5 "ateria(. It i' proportiona( tothe nu"+er o4 order' and in er'e(# proportiona( to the 'i?e o4 in entor#. Apart4ro" the co't o4 ac uired ra5 "ateria( thi' a('o inc(ude' re ui'itionin)>

purcha'in) order> tran'portin) recei in)> in'pectin) and 'ortin) co't.

6 Carr *3% Co/t' Thi' i' u'ed in the ca'e o4 a(( t#pe' o4 in entorie'. there are theco't' 5hich are incurred 4or ho(din) a )i en a"ount o4 in entor#> the# inc(udeopportunit# co't o4 4und' in e'ted i' in entorie' in'urance> taxe'> 'tora)e co'tand the co't o4 deterioration and o+'o(e'cence. It i' direct(# proportiona( to the'i?e o4 in entor#.

= Reor4er Po*3t/' Reorder point i' the in entor# (e e( at 5hich an order "u't +e p(aced to rep(eni'h the in entor# and e ade the ri'k o4 runnin) out o4 ra5"ateria(. To deter"ine the reorder point under uncertaint# 5e 'hou(d kno5 the(ead ti"e> the a era)e u'a)e> econo"ic order uantit# etc.

? Sa5et Sto$9/' It i' di44icu(t to predict u'a)e and the (ead ti"e accurate(#. Thede"and 4or "ateria( i' ne er con'tant. !i"i(ar(# the actua( de(i er# ti"e "a# +edi44erent 4ir" the nor"a( (ead ti"e. In ca'e o4 increa'ed u'a)e or de(i er#de(a#ed> there i' +ound to +e pro+(e" o4 'tock out. !tockout can pro e to +eco't(# a44air 4or a co"pan#. There4ore in order to )uard a)ain't the 'tock out> theco"pan# "a# keep 'o"e +u44er 'tock a' a cu'hion a)ain't expected increa'ed

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and or de(a# in de(i er# .Thi' +u44er 'tock i' ca((ed a' 'a4et# 'tock.

The ariou' techni ue' or approache' u'ed in the "ana)e"ent o4 in entor# +# di44erent4ir"' to ca(cu(ate the econo"ic order uantit# are here )i en +e(o5D 8

&0 Tr*a1 a34 Error Approa$h' Thi' i' the techni ue to re'o( e the econo"ic orderuantit# pro+(e". In thi' techni ue 5e take the annua( re uire"ent> purcha'in)co't per unit> orderin) co't per order and carr#in) co't per unit 4or theco"putation o4 econo"ic order uantit#. We 'uppo'e a con'tant u'a)e and thencon'iderin) di44erent 'i?e' o4 order' and ca(cu(ate the di44erent tota( co't'. Theorder corre'pondin) to the "ini"u" tota( co't ha' the econo"ic order uantit#.

)0 EO Mo4e1' Thi' i' uite an ea'# approach to ca(cu(ate the econo"ic orderuantit# than the tria( and error approach. /ere 5e 4ind the econo"ic orderuantit# 5ith the he(p o4 the 4or"u(aES ! rt -&AO CWhere A 8X Tota( Annua( Re uire"entO 8X Orderin) co't order C 8X Carr#in) co't per unit

60 Graph*$ Approa$h' /ere the econo"ic order uantit# i' 4ound out 5ith the he(p

o4 a )raph. We take the order 'i?e on hori?onta( axi' and co't incurred on theertica( axi'. No5 5e p(ot the )raph re)ardin) the carr#in) co't and the orderin)co't'. No5 5ith the he(p o4 the'e t5o 5e dra5 a )raph o4 "ini"u" tota( co't.The econo"ic order point i' the point at the (o5e't a(ue o4 the tota( "ini"u"co't'.

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EVALUATION OF INVENTORY MANAGEMENT'In thi' 'ection o4 thi' chapter> a atte"pt ha' +een "ade to ,ud)e the e44icienc# o4in entor# "ana)e"ent in kotak "ahindra +# exa"ine co"po'ition "o e"ent and (e e(o4 in entor# he(d +# the 4ir".

Co+po/*t*o3 o5 I3-e3tor '

Co"po'ition o4 in entor# )enera((# depend' upon the nature o4 +u'ine''. The proportiono4 each co"ponent in the tota( in entor# arie' 4ro" indu'tr# to indu'tr#. In order toa''ure e44ecti e contro( on the tota( in e't"ent in in entorie' it i' de'ira+(e to "aintain a

proper +a(ance in a(( the co"ponent'. The 'tructure o4 in entor# 'ho5 u' that 5hich parto4 the in entor# i' "ore in the or)ani'ation. !uch kno5(ed)e he(p' u' in the e44icient"ana)e"ent o4 in entor#. Ta+(e 'ho5' the co"po'ition o4 in entor# in KOTAKMA/IN RA

Co+po/*t*o3 o5 I3-e3tor '

Year Ra:

Mater*a1

Se+*

Mater*a1

F*3*/he4

Goo4/

Store/

Spare/ S$arp

Tota1

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I3-e3tor T!r3o-er Rat*o

Year Rat*o I3 4a /

&

there4ore> the'e 'hou(d +e taken in to con'ideration 4or +etter producti it# and e44icienc#o4 operation.

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MANAGEMENT OF RECEIVABLES

Trade credit> the too( 5hich a' a +rid)e 4or "o e"ent o4 )ood' throu)h production and

di'tri+ution 'ta)e' to cu'to"er> i' a 4orce in the pre'ent da# +u'ine'' and a e''entia(de ice. Trade credit i' )ranted 5ith a "oti e o4 protectin) the 'a(e 4ro" one'>co"petitor' and attachin) "ore o4 the potentia( cu'to"er'. Trade credit i' 'aid to +eextended to a cu'to"er 5hen a 4ir" 'e(( it' 'er ice' or )ood' and doe' not recei e the

pa#"ent 4or the" i""ediate(#. Thu' trade credit create' recei a+(e 5hich re4er to thea"ount 5hich a 4ir" i' expected to co((ect in near 4uture.The +ook de+t or recei a+(e 5hich ari'e a re'u(t o4 trade credit ha e the 4o((o5in)4eature'D

It in o( e' a e(e"ent o4 ri'k and hence 'hou(d ne er to +e 4idd(ed 5ith. A' credit 'a(e(ea e a 'u" to +e reco ered in 4uture and 4uture can ne er +e the certaint#> hence it i'ri'k#.It i' +a'ed on econo"ic a(ue> 5hi(e 4or the +u#er> the econo"ic a(ue in )ood'

pa''e' i""ediate(# at the ti"e o4 purcha'e> 5hi(e the 'e((er expect' an e ui a(enta(ue to +e recei ed (ater on.It repre'ent' 4uturit#. The ca'h pa#"ent' 4or the )ood' or 'er ice' recei ed +# the

+u#er 5i(( +e "ade in 4uture.

The "ana)e"ent o4 recei a+(e )ain "ore i"portance in the ie5 o4 the 4act that "orethan one third o4 the tota( current a

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