“A STUDY ON WORKING CAPITAL MANAGEMENT OF

KSE LTD IRINJALAKUDA”

Project Report submitted to

UNIVERSITY OF CALICUT

In partial fulfillment of the requirement for the award of the degree of

BACHELOR OF COMMERCE

Submitted by

NIRMAL PAUL
(CCASBCM169)

Under the supervision of

Ms. JISHA C L

DEPARTMENT OF COMMERCE

CHRIST COLLEGE(AUTONOMOUS), IRINJALAKUDA

MARCH 2021
 CHRIST COLLEGE(AUTONOMOUS), IRINJALAKUDA

CALICUT UNIVERSITY

DEPARTMENT OF COMMERCE
CERTIFICATE

This is to certify that the project report entitled “A STUDY ON WORKING

CAPITAL MANAGEMENT OF KSE LTD IRINJALAKUDA” is a
bonafide record of project done by NIRMAL PAUL, Reg. No.
CCASBCM169, under my guidance and supervision in partial fulfillment of
the requirement for the award of the degree of BACHELOR OF COMMERCE
and it has not previously formed the basis for any Degree, Diploma and
Associateship or Fellowship.

Prof. K.J.JOSEPHMs. JISHA C L

Co-ordinator Project Guide
 DECLARATION

I, NIRMAL PAUL, hereby declare that the project work entitled “A

STUDY ON WORKING CAPITAL MANAGEMENT OF KSE LTD
IRINJALAKUDA” is a record of independent and bonafide project work
carried out by me under the supervision and guidance of Ms. Jisha C L,
Assistant Professor, Department of Commerce, Christ College, Irinjalakuda.

The information and data given in the report is authentic to the best of my
knowledge. The report has not been previously submitted for the award of any
Degree, Diploma, Associateship or other similar title of any other university or
institute.

Place: Irinjalakuda NIRMAL PAUL

Date: CCASBCM169
 ACKNOWLEDGEMENT

I would like to take the opportunity to express my sincere gratitude to all

people who have helped me with sound advice and able guidance.

Above all, I express my eternal gratitude to the Lord Almighty under whose
divine guidance; I have been able to complete this work successfully.

I would like to express my sincere obligation to Rev.Dr. Jolly Andrews,

Principal-in-Charge, Christ college Irinjalakuda for providing various facilities.

I am thankful to Prof. K.J.Joseph, Co-ordinator of B.Com (Finance), for

providing proper help and encouragement in the preparation of this report.

I am thankful to Ms.Smitha Antony, Class teacher for her cordial support,

valuable information and guidance, which helped me in completing this task
through various stages.

I express my sincere gratitude to Ms. Jisha C L, Assistant Professor, whose

guidance and support throughout the training period helped me to complete this
work successfully.

I would like to express my gratitude to all the faculties of the Department for
their interest and cooperation in this regard.

I extend my hearty gratitude to the librarian and other library staffs of my

college for their wholehearted cooperation.

I express my sincere thanks to my friends and family for their support in

completing this report successfully.
 TABLES OF CONTENTS

CHAPTER NO. CONTENTS PAGE NO:

LIST OF TABLES

LIST OF FIGURES

CHAPTER 1 INTRODUCTION 1-7

CHAPTER 2 REVIEW OF LITERATURE 8 – 12

INDUSTRY AND COMPANY

CHAPTER 3 13 – 28
PROFILE

DATA ANALYSIS AND

CHAPTER 4 29 – 44
INTERPRETATION

FINDINGS, SUGGESTIONS
CHAPTER 5 45 – 47
& CONCLUSION

BIBLOGRAPHY

ANNEXURE
 LIST OF TABLES

TABLE
TITLE PAGE NO:
NO:

4.1 Schedule of changes in working capital 2013-2014 29

4.2 Schedule of changes in working capital 2014-2015 30

4.3 Schedule of changes in working capital 2015-2016 31

4.4 Schedule of changes in working capital 2016-2017 32

4.5 Schedule of changes in working capital 2017-2018 33

4.6 Schedule of changes in working capital 2018-2019 34

4.7 Schedule of changes in working capital 2019-2020 35

4.8 Current Ratio 36

4.9 Liquidity Ratio 37

4.11 Working capital turnover ratio 39

4.12 Absolute Liquid Ratio 40

4.13 Inventory turnover ratio 41

4.14 Inventory holding period 42

4.15 Debtors Turnover ratio 43

4.16 Net Profit Ratio 44

 LIST OF CHARTS

FIGURE
TITLE PAGE NO:
NO:

4.1 Current Ratio 36

4.2 Liquidity Ratio 37

4.3 Absolute Liquid Ratio 38

4.4 Fixed asset turnover ratio 40

4.5 Net profit ratio 44

1.1 Introduction

Every business whether big, medium or small, needs finance to carry

on its operations and to achieve its target. In fact, finance is so indispensable
today that it rightly said to be life blood of an enterprise. In every business
needs fund for two purposes, for its establishment and to carry out its day today
operations. So this project deals with studying of working capital management
of that is necessary to carry out the day- today operations.

Thus in every simple words, working capital may be defined as “capital

invested in current assets” Here current assets which can be converted into cash
within a short period of time and the cash received is again invested into these
assets. Thus it is constantly or circulating capital. On the whole working capital
management performs a key function and top priority is given to this by every
finance managers

The overall success of the company depends upon its working

capital position working capital is required for the maintenance of day today
business operations. The present day competitive market environment calls for
an efficient management of working capital. The importance of working capital
in any industry needs no special emphasis. No business can run effectively
without sufficient amount of working capital it is one of the most important
function of corporate management.

Working capital management deals with most dynamic fields

in finance, which needs constant interaction between finance and other
functional managers. A business enterprise with ample working capital helps to
smooth running of business. Working capital management is highly important
to firms as it is used to generate further return to stock holders. If working
management is ineffective the management cannot recap the benefits of short
terminvestment.

1
1.2 Importance of study
Proper management of working capital is essential for smooth functioning of
business. The basic goal of working capital management is to manage the
current asset and current liabilities of company. Working capital ratios help to
measure the short term liquidity position and profitability of an organization. In
such a way that satisfactory level of working capital can be maintained. So this
study helps to analysis the effectiveness of working capital

1.3 Scope of study

The project is vital to me in significant way because this project will be a
learning device for finance student. The project is mainly concentrated on
working capital management of KSE ltd. The study aims to find out the
changes in current assets and current liabilities and analysis of the liquidity,
profitabilityandefficiencyofthecompanyduringtheperiod2013-14to2019-
20. Through this project the effectiveness of working capital management the
company can be estimated by using various statistical and mathematical tools.

1.4 Statement of problem

Every business concern should have adequate amount of working capital to run
its business operations. Both excessive and inadequate working capital is
unfavorable to the company. If there is excess working capital, it will lead to
blocking of business. Excess and inadequate working capital affects the overall
efficiency of the business and it is danger to the company. So it is necessary for
the company to maintain adequate amount of working capital. It is considering
all these aspects that a topic of this kind has been initiated.

2
1.5 Objectives of study
• To analyze the working capital position.
• To evaluate the liquidity position.
• To analyze the efficiency in management of working capital.
• To give suggestions for the improvement of working capital.
• To analyze the profitability of company.
1.6 Research methodology
Research methodology states how research study is undertaken and
what procedure were employed to carry out the research study.
1.6.1 Nature of study
The study is both descriptive and analytical in nature it is an attempt to
evaluate the working capital management of company.
1.6.2 Source of data
Secondary source of are the main source used for present study. The
major source of data was collected from annual report, profit and loss a/c of
KSE ltd.
1.7 Period of study
The present study analyze the working capital of KSE ltd over a period of
7 years from 2013-14to2019-20.
1.8 Limitations
• Mainly secondary source data used for this study.
• The period of analysis is limited to 7 years.
• Detailed study cannot be possible due to lack oftime.

1.9 Chapterisation

1. Introduction
2. Review of literature
3. Industry and company profile
4. Data analysis and interpretation
5. Findings, suggestions and conclusion

3
Conceptual review
While„conceptualframework‟meansaresearcher‟sownperceptionsaboutthescopea
ndstructureofaproblem,theliteraturereviewprovidesothers‟ideas and work in
areas close to that under study. With such a philosophy in
mind,thischapterfirstconstructstheauthor‟sownthinkingastohowtheproblem in
question has originated, disseminated, and evolved; and how it can be
resolved for sustainability if turned around. It also draws support from other
like-minded models proposed in the fields of sustainable development.

Working capital management

Definition
The term „working capital management‟ primarily refers to the efforts of the
management towards effective management of current assets and current
liabilities. Working capital is nothing but the difference between the current
assets and current liabilities. In other words, an efficient working capital
management means ensuring sufficient liquidity in the business to be able to
satisfy short-term expenses and debts.
In a broader view, “working capital management‟ includes working capital
financing apart from managing the current assets and liabilities. That adds the
responsibility for arranging the working capital at the lowest possible cost and
utilizing the capital cost-effectively.
Objectives of Working Capital Management
The primary objectives of working capital management include the following:
Smooth Operating Cycle: The key objective of working capital management
istoensureasmoothoperatingcycle.Itmeansthecycleshouldneverstopfor
the lack of liquidity whether it is for buying raw material, salaries, tax
payments etc.
Lowest Working Capital: For achieving the smooth operating cycle, it is also
important to keep the requirement of working capital at the lowest. This may

4
be achieved by favorable credit terms with accounts payable and receivables
both, faster production cycle, effective inventory management etc.
Minimize Rate of Interest or Cost of Capital: It is important to understand
that the interest cost of capital is one of the major costs in any firm. The
management of the firm should negotiate well with the financial institutions,
select the right mode of finance, maintain optimal capital structure etc.
Optimal Return on Current Asset Investment: In many businesses, you have
a liquidity crunch at one point of time and excess liquidity at another. This
happens mostly with seasonal industries. At the time of excess liquidity, the
management should have good short-term investment avenues to take benefit
of the idlefunds.

Importance of effective working capital management

Although the importance of working capital is unquestionable in any type of
business. Working capital management is a day to day activity, unlike capital
budgeting decisions. Most importantly, inefficiencies at any levels of
management have an impact on the working capital and its management.
Following are the main points that signify why it is important to take the
management of working capital seriously.

 Ensures Higher Return onCapital

 Improvement in Credit Profile &Solvency

 Increased Profitability

 Better Liquidity

 Business ValueAppreciation

 Most Suitable Financing Terms

 Interruption Free Production

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  Readiness for Shocks and Peak Demand

 Advantage over Competitors

Advantages of working capital management

 Working capital management ensures sufficient liquidity whenrequired.

 It evades interruptions inoperations.

 Profitability maximized.

 Achieves better financialhealth.

 Develops competitive advantage due to streamlined operations.

Disadvantages of working capital management

 It only considers monetary factors. There are non-monetary factors that
it ignores like customer and employee satisfaction, government policy,
market trend etc.

 Difficult to accommodate sudden economicchanges.

 Too high dependence on data is another downside. A smaller

organization may not have such datageneration.

 Too many variables to keep in mind say current ratios, quick ratios,
collection periods,etc.

Ratios used
 Current ratio

Current ratio =current asset /current liabilities

 Liquidratio

Liquid ratio = liquid assets/ current liabilities

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  Absolute liquidratio

Absolute liquid ratio = absolute liquid assets/ current liabilities

 Working capital turnover ratio

Working capital turnover ratio = net sale/net working capital

 Fixed asset turnover ratio

Fixed asset turnover ratio = net sales/net fixed assets

 Inventory turnover ratio

Inventory turnover ratio = cost of goods sold/average inventory

 Inventory holding period

Inventory holding period =inventory/cost of sales*365

 Debtors turnover ratio

Debtors turnover ratio = net credit sales/average accounts receivable

 Net profit ratio

Net profit ratio = net profit after tax/net sales

7
Review of literature
Different authors have conducted research work to analyze working capital
management in the said field. The findings of the prior research help in
identifying the gaps‟ and highlight the areas where further research can be
undertaken. Therefore, the present chapter deals with the review of literature
available in area of working capital management and its components.
Empirical research
Is research using empirical evidence. It is a way of gaining knowledge by
means of direct and indirect observation or experience. Empiricism values such
research more than other kinds. Empirical evidence (the record of one's direct
observations) can be analyzed quantitatively or qualitatively. Quantifying the
evidence or making sense of it in qualitative form, a researcher can answer
empirical questions, which should be clearly defined and answerable with the
evidence collected (usually called data). Research design varies by field and by
the question being investigated. Many researchers combine qualitative and
quantitative forms of analysis to better answer questions which cannot be
studied in laboratory settings, particularly in the social sciences and in education.

• S.Pramila and K.Kumar(2016): Working capital management refers to

the administration of all components of working capital-cash,
marketable securities, debtors, and stock and creditors. Working capital
is one of the powerful measurement of the financial position the goal of
working capital management is to manage the firms current assets and
current liabilities in such a way that a satisfactory level of working
capital is maintained in several units there is adequate working capital
but the mismanagement of working capital increases the post and
reduces the rate of returns. The efficient management of working capital
minimizes the cost and do much more for the success ofbusiness.

8
• Dr.Muthuswamy and M.SathishKumar(2018): The amount of profit
largely depends on the magnitude of sales. However sales do not
converted into cash instantaneously in to purchase raw materials,
payment of wages and other operating expenses that required for
manufacturing the goods that to be sold. It is a descriptive that capital
which is to consider the difference between book value of current assets
and liabilities. This study has to analysis the working capital
management in ancillary units ofBHEL.

• ZeeshanHasnain, ShahbazHussain, Waqar-ul-Hassan and

MohsinZubair(2017):The study aims to investigate the strength of
working capital management for measuring the financial performance of
listed stocks. The study incorporates descriptive statistics, Pearson
correlation, and multiple regression models for interpretation and
execution of data. Five years (2006-11) panel data of 125 listed
companies of Pakistan stock exchange (PSX) is selected in accordance
to sample selection criterion. Results of regression analysis supported an
inverse relationship this concern. There is always a time gap between
the sales of goods and receipt of cash. Working capital is required for
this period in order to sustain the conversation activity. In case of
adequate working capital is not availed for the period, the company will
not be in a position to sustain the sales since it may not be in position
between firm`s profitability and working capital management. Return on
asset and Gross operation income are taken as indicators of profitability.
Inventory turnover in days, Average age of A/R, Average payable
period and Cash conversion cycle are considered as independent
variables to measure firm‟s profitability. Firm size, Sales growth, and
financial debt ratio are favored as control variables. Overall Return on
asset models indicated poor values of Rsquare`s and Gross operating
income models showedrobustness

9
• Shiv Kumar S (2016): Working capital is regarded as the “lifeblood of
business”. Every business needs funds for two needs - long term funds
which are required to create production facilities though purchase of
fixed assets, like plant machinery, land, building etc. and short term
funds for the purchase of raw materials, payment of wages and other day
to day expense etc. These funds are also known as working capital or
circulating capital or short-term capital. Working capital needs are
generally financed through outside sources. The main objective of the
study is to analyze the various components of working capital of the
company and to assess the impact of working capital on profitability.
The main objectives of the study are to analyze and evaluate the
liquidity position of the company and to analyze the components of
working capital of the company also to determine the impact of working
capital on theprofitability.

• Jota Mahato and Uday Kumar Jagannathan (): Management of

working capital is regarded as one of the most essential part of business
management. This paper studies the impact of working capital
management on the profitability of Telecom industry. The study period
of papers is of 5 years i.e. 2010-2015. Both dependent and independent
variables are used in this study. Variables used in this study include
Return on Assets (ROA) to measure the profitability, Average
Collection Period (ACP), Inventory Conversion Period (ICP), Average
Payment Period (ACP) and Cash Conversion Cycle (CCC) are used as
proxy for working capital management. Debt Ratio, Current Ratio,
Sales Growth and Firm Size are used as control variable. The data
analysis is carried out for eight telecom industry listed in National Stock
Exchange of India. This study is based on secondary data and data are
taken for a period of five years i.e. 2010- 2015in order to calculate all
these variables. The research methodology used in this study was
descriptive statistics, correlation analysis and ordinary squareleast

10
 regression analysis in order to know the impact of hese variables on
profitability. The result of correlation analysis shows the ROA has
negative relationship with ICP, ACP, CCC and Current ratio while ROA
has positive relationship with APP, Debt ratio and Firm size. Telecom
sector is one of the major sectors of India. So, the aim of this paper is to
provide some useful recommendation for the people responsible for the
management of this sector. This study also establishes the basis for
future research in this area ofbusiness.

• MelitaStephanouCharitou, Maria Elfani,Petros Lois(2010):In this

study, we empirically investigate the effect of working capital
management on firm‟s financial performance in an emerging market.
We hypothesize that working capital management leads to improved
profitability. Our data set consists of firms listed in the Cyprus Stock
Exchange for the period 1998-2007. Using multivariate regression
analysis, our results support our hypothesis. Specifically, results indicate
that the cash conversion cycle and all its major components; namely,
daysininventory,day‟ssalesoutstandingandcreditor‟spaymentperiod
- are associated with the firm‟s profitability. The results of this study
should be of great importance to managers and major stakeholders, such
as investors, creditors, and financial analysts, especially after the recent
global financial crisis and the latest collapses of giant organizations
worldwide.

• Dr.T.N.R.Kavitha and N.Manimuthu(): the analysis of working

capital management is the process of evaluating the relationship
between components parts of financial statement to gain better
understands the five financial statement. The primary objectives of the
study of analysis of working capital management for Birla Corporation
cement ltd. The research designed adopted in the study is exploratory
research. The sample size study is five years annual report ofBirla

11
 corporation cement ltd. The tools describe the working capital
management for ratio analysis. The overall performance of working
capital during 2009 to 2013. Birla corporation cement ltd has been
formed to be good according to information provided has high net profit
margin as the sales performance during the period was commendable.

The above study provides solid base and important aspects

regarding working capital management. They also provide results and
conclusions of researches done on working capital management.

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3.1 Industryprofile
Cattle feed industry play a vital role in economy in India cattle feed supplies
the motive power for almost agricultural operations such as slugging lighting,
water from wells and the transport reduced to market. They provide most of the
manure used by the farmer in India and enabled them to earn something during
this space time by carting for hire; they again yield valuable products such as
milk butter and gee. The unawareness of the farmer about the proper feeding
methods to the cows affect their productivity of milk in the lower areas. Due to
this reason, the importance of cattle feed industry has been increased in India.
The bulk of feed is been produced by an unorganized sector compressed of
home and custom mixers our human population is ever growing and the more
people are likely to consume more annual product. KSE with a capital base of
rupees 36 crores embarks on an expansion to double its solvent extraction and
add a most modern ecofriendly vegetable reefing plant. The company has
already identified six acres of land in the KINFRA small industry park, karate
for thisexpansion.

History
The manufacturing of feed in organized sector in India began around the mid-
sixties with the setting up of medium sized plant in northern and western part
of country. The early seventeen established six feed factory in country and
their number increased to over 400 by the end. The pale increases much faster
in seventies as compared to subsequent decades. The industrial decline in 1991
was a part of economic reform package in India that did not impact all
expansion of feedindustry.
Feed industry came into existence in India in 1961with establishment of feed
plant in Ludhiana, India. The animal feed industry has developed since the
beginning of the 20th century, supplying feed staff for ruminants and later
demand developed for pigs and poulrty. Many of the row materials were
imported including serials such as wheat, burley and maize, proteins from

13
ground nuts, cotton seed and fish meal. Cattle feed increased between 1974 and
1983. This increase was influenced by financier incentives for farmer. The
industry production modern computerized plant and latest manufacturing
technology. In India, for most research work an animal feed is a practical and
focuses on use of by products, the upgrading of ingredients and enhancing of
the productivity. Feed manufacturing on commercial and scientific basis started
around 1965 with the setting up of medium sized feed plants in northern and
western India. Feed was produced mainly to the need of cattle feeds.

Kerala scenario
Cattle feed industry is growing in Kerala. There are many cattle farmers as well
as laboratories, so cattle feed industry is growing. The major players in Kerala
are Kerala feeds, Milma feeds, Sunandhini feeds, Godrej feeds and prima feeds
The trend livestock population Kerala has been examined on the basis of
livestock census data. All type of livestock have been showing decline trend in
Kerala after 1996. This may be due to the preference of people for high
yielding crops breed varieties. In Kerala nearly 94% of the livestock population
is concentrated in rural areas, 80% of livestock population and marginal farmer
and agriculture laborers. Women constitute 60% of the work force in the
sector. As per 2003 figures, Kerala’s share in all India cattle population is
1.13% buffalo population accounts only for 0.07%, goats 1.01% and pigs
0.54%.
World scenario
The global animal feed market is growing at a steady pace and has a promising
future because of the globally increasing demand for meat and meat products.
Feed additivities are becoming and an important part of feed animal growth
and nutrition. Recently, disease outbreaks such as avian flu and foot-and mouth
diseases have also increased concern over the animal health across the world.
Environmental concern, such as reduction of phosphorus content in manure are
promoting feed additives consumption for animals. The Europe and the U.Sare

14
the largest markets for feed additives and Asia is emerging as a high growth
market.
Future scope of the industry
Digestive ingredients have been used a productivity enhancers in animal
husbandry system. Growing acceptance of new products such as prebiotics and
phytogenic within the market for more mature ingredients like enzymes and
prebiotics is providing momentum to European market for digestive
ingredients in animal feed. The potential of digestive ingredients in animal feed
functioning as cost effective productivity enhancers is set to support market
expansion. However, price pressure remain on most products in segments
across different target species. Manufactures can confront price sensitivity by
using various strategies to reduce production. In addition, strong distribution
partnership with other companies will enable manufacturer to retain market
share. Innovation in handling industrial compound in feed production will
propel the market

15
3.2 Company profile
It was in 1963 that Kerala solvent extraction limited now known as KSE ltd
entered the solvent extraction industry, setting up the very first solvent
extraction plant in kraal. Kerala produce 80% of total copra produced in the
country, large part of it was sold to other states as copra itself and they were
earning good profit when mills in Kerala wasn‟t able to get enough copra for
their daily needs. When oil industry in other part of country is thriving, in
Kerala it was struggling so they understood the need for mobilization of their
mills. At that time Dr.P.loganathan committee setup to study the feasibility of
staring anew industry in Kerala, recommended the establishment of three
solvent extraction plants. And one of them was in Thrissur district. The oil mill
owners in and around Irinjalakuda, who were thinking in similar lines saw the
opportunity and took the initiative to establish a solvent extraction unit. Thus
KSE was established. Thus in 1976 KSE LTD entered into cattle feed industry,
setting up new plant manufacturing ready mixed cattle feed.
The last 3 decade has been KSE LTD emerging as the leader in ready mixed
cattle feed in the country. Today KSE LTD commands the resources, expertise
and infrastructure of manufacture arrange of livestock feed in high volumes,
driven by a commitment to high quality. On the road to success, there were
many hurdles. Initially the mobilization of capital posed the greatest challenge.
The future looked grim. But the determination and optimism paid off. Thus on
25 September 1963 the Kerala solvent extraction limited was registered as
public limited company. The Kerala solvent extraction limited went on stream
in 1976 and in 1976 a new plant was set up to manufacture ready mixed cattle
feed, which was pioneering step. Since then there was no looking back. The
last decades have seen KSE emerging as the leader in solvent extraction and
ready mixed feed in the country. And though these years of consolidation and
diversification, KSE has created a niche foritself.
Today KSE command the resources, expertise and infrastructure to
manufacture a range of livestock feed, in high volumes, coconut oilfrom

16
coconut oil cake and refined edible oil. KSE has computerized its operations
way back. In the year 1999, KSE went on to grade its EDP set up further.
Custom made ERP software was developed for its unit and head office through
R.R software private ltd, Cochin and online computerization was fully
implemented at all its plants. Being custom made for KSE this ERP software,
with SOLRDBMS, front end on visual basic and windows NTOS, seamlessly
had integrated all functions of the organization. KSE caters to a vast belt
stretching across south India.

History
In1963,KSELTDwasestablishedaccordingtoIndiancompanies‟act1956.It was
registered as a public ltd company on 25th September 1963.its first production
was started in 1972 with capacity of 40 tons per day. In 1980 the capacity of
plant was raised to 60 tons per day.
In 1983, a fully automatic cattle feed plant was added with capacity of tons per
day capacity. By 1992 the capacity of solvent extraction of plant was further
increased to 100 tons per day. In 1987, the plant capacity was increased to 180
tons over day.

Thecompany‟ssecondproductionunitwithacapacity150tonsperdaysolvent
extraction commenced operation at swaminathpuram. Didigul district of Tamil
Nadu in 1988 and 1989 respectively. The cattle feed capacity was subsequently
increased to 180 tons per day.
The third cattle feed plant of the company started operation at Vedagiri in
Kottayam district of Kerala in 1995. This plant has basic installed capacity to
go up 240 tons per day. At Irinjalakuda and vedagiri are fully automatic and
key manufacturing operations are controllers by microprocessors. Vedagiri
project costing around RS six crore was fully financed out of internal sources
of company. Company put up vegetable oil refining plant at irinjalakuda at
accost of RS 1 corer in 1995. This projectwas fully financed from internal
accruals.

17
The company is remaining solvent extracted coconut oil and expeller sunflower
oil in the refinery plant
Oil millers of Thrissur are the promoters of the company it was the registered in
1995 and incorporate as public ltd company in 1963 as per Indian companies
act. Kerala solvent extraction limited was registered ass public limited
company on 25th September 1963. The company was later renamed as KSE
LTD. The company is listed in three stock exchanges Mumbai, Chennai,
Cochin. The company started production in 1972 with a solvent extraction
capacity of 40 MTS per day. On 1976 the company is modernized to cattle feed
industry with capacity of 50 tons perday.
KSE ltd is product oriented company. Cattle feed is the main product of the
company the other products are oil-cake, de-oiled cakes, milk, ice creams
etc.…now they are trying to expand their milk products
In the early stages company face financial difficulties, but was assisted by
K.S.I.D.C (Kerala state industrial development corporation) by subscribing to
its 25 percent equity capital and I.F.C.I (industrial finance corporation of India)
The head office at Irinjalakuda has two servers and 40 nodes running the
application other units, in all have about 8 servers and about 50 nodes. Their
plant at vedagiri, Kottayam has a computerized control room for monitoring,
homogenization, size reduction, batching pollicisation, pellet cooling aspiring
system.
The manufacturing process used in the company is
• Woodencanes
• Oil mills
• Expeller mills
• Solventextraction
Now days the first three process are out of use. Irinjalakuda unit of the
company is mainly concentrated on solvent extraction process. Irinjalakuda
units of the company consist of cattle feed plant and refiningplant.

18
Share capital of the company
The authorized share capital of the company is Rs.4 crore and subscribed
capital is Rs.32 crores. The part at value of one equity share capital is Rs.10.
The company issued 6000, 35% redeemable cumulative preference shares of
Rs.100 each. The redemption of these shares at par after 10 years but before 15
years from the date of their allotment. The company has made 2 bonus issues
and one rightissue.
The company went in for public issue of shares in 1994. Company shares are
listed at the stock exchange at Cochin, Chennai, and Mumbai, the present
market value of the company‟s share is Rs.480 as on 25-02-2016.

Environment and safety

The company is maintaining safety standards and ensuring pollution free
environment. The working environment has been made pollution free,
noiseless, conductive atmosphere. The plant was erected in such way to
monitor and maintain the dust free environment. The safety measures are
strictlyfollowed.

Quality policy
Companies quality policy is to produce and distribute good quality
compounded cattle feed in pellet from mineral mixture and other fodder
materials through a quality system, which registers continual improvement by
setting and reviewing functional quality objectives aimed to create enhanced
customer satisfaction. The quality policy will be communicated to all and will
be reviewed periodically for continued suitability. The management and staff
are determined and committed to achieve this quality policy and to make
dairying.
Quality management principles:
• Customer focus
• Leadership

19
 • Involvement approach
• Processapproach
• System approach tomanagement
• Continual improvements
• Mutually beneficial supplier relationships
The finance and accounts department tries to improve the effectiveness and
efficiency of the quality management systems by providing positively the
financial results to the concerned and suggest them for suitable improvement
actions in the concerned and suggest them for suitable improvement actions in
the monthly performance review meeting.

Vision
KSE ltd. Shall endeavor to maintain leadership through quality products
explore new avenues in product development and marketing create stronger
bond between the management, workforce dealers and customs , contribute to
social development and constantly strive for excellence in all spheres of our
activities.

Mission
• To become a market driving company from a market drivencompany.
• Educate and train the livestock farmers to practice scientific feeding to
optimizing livestockproductivity.
• To support the development of knowledge based network on the feed
relatedactivities.
• To promote a culture of innovation and creativity amongst the
employees.
• To be an active partner in the community development programme.
• To add more ice cream production units across Kerala in comingyears.

20
Objectives
• To promote research and development.
• To educate the farmers about the scientific needs.
• To provide quality feeds at fair rate.
• To maintain productquality.
• To become marketleader.
• To minimize the cost incurring in productionprocess.
• To maintain top position I in the industry.

Milestones
• 1972 solvent plant commencesoperations.
• 1976 mixed cattle feed productionbegins
• 1987 Cattle feed production reaches 180 tones. Introduction of computer
in the factory and office.
• 1988 A new mixedcattle feed plant starts operations at
Swaminathapuram, in Tamil Nadu with daily production capacity of 180
tones.
• 1989 A solvent unit with a capacity of 120 tons per day commences
operations at Tamil Naduplant.
• 1990 Introduction of KS supreme Pellets, a bypass protein cattle feed in
the market.
• 1991 Open its peakedbranch.
• 1992 Cattle feed manufacturing begins in third partyunits.
• 1993 Enters exportmarket.
• 1994 Introduction of feed supplements of KS forte, public issue and
listing of shares.
• 1995 Vegetable oil refining plant commissioned. KS Supreme –
Sunflower refined oil launched. Calicut branchesopens.
• 1996 240 TDP cattle feed commences at Vedagiri, Kottayam dist.,
Kerala.

21
 • 1997 company renamed as KSEltd.
• 1998 Fourth feed production unit at Palakkad. Launches dairy project.
• 1999 A modern children‟s park and information Centre completed at
Irinjalakuda for the benefit of the public. Company introduces KS
Deluxe plus the pelleted feed in HDPE. Bags for the benefit of
Keralamarket.
• 2000 Company starts production and distribution of milk and milk
products from Konikkara and Thalayathudairy.
• 2002 Vesta ice cream launched.
• 2003 started production of cattle feed in lease plant at Edayar,
Kalamassery.
• 2004 acquired land from Kinfra for starting a new project at Kinfrapark
at Koratty, ISO 9001:2000 accreditation for Irinjalakuda unit and
ISO14001:1996 & HACCP registration, KPMG qualityregister.
• 2005 cattle feed production capacity at Irinjalakuda unit increased to
210
MT‟s per day, started producing cattle feed in a leased unit in Erode,
ISO 9001-2000 accreditation for Vedagiri and Swaminathapuram.
• 2006 10th consecutive national productivityaward.
• 2007 cattle feed production increased to 295MTS.

Achievements/Recognitions
• Kerala‟s first solvent extraction plant.
• No.1 in processing coconut oil cake through solvent extraction inIndia.
• Winner of S.E.A. National awards and state productivity and safety
Awards for manyyears
• Front-ranker in mixed cattle feed production inIndia.
• Recognition from Animal Nutrition society for contributions in cattle
feedmanufacturing.

• Kerala‟s first export mixed cattlefeed.

22
 • First in south India to manufacture and distribute bypass protein cattle
feed.
• The names trusted by millions ofpeople.
• SEA AWARD -2005-2006-received for 16 yearsconsecutively.

Social services and responsibility

Apart from profit making, a business organization should be also entitled
should be also entitled to fulfill certain social obligations. Social responsibility
is a desire to satisfy the need of the society. A healthy for is growth should try
for upliftment of society as the healthy business cannot exist in a sicksociety.
Some of the important activities done by them are:
1. They are providing employment directly and indirectly to thousand
people.
2. They have built a modern public park and providing computer education
to smallchildren.
3. They donate a large amount of money for charity purpose for
example:amount RS 10 lakh for the tsunami relief fund, an amount of
RS 5 lakh for Cargill fund and RS 3 lakh for Gujarat earth quake relief
fund.
4. They impart valuable advice to farmers through the seminars, cattle
shoes and educate them about advantage of cattlefeed

Industrial relations
Healthy industrial relations are the key factor in the progress of any company.
KSE Ltd has the distinction of having a continued peace. In state like, Kerala,
where industrial, unrest is reported to be order of the day, KSE Ltd continuous
to be singular exception to the adverse labor conditions side to prevail in
Kerala. During its working of thirty two years, the company had seldom lost
man days due to labor unrest, except a strike for three months in Vedagiri unit
fromSeptember,2003toDecember2003inconnectionwithwagesettlement,

23
which had minimal effect on the working of the company as the management
has made alternate arrangements for ensuring steady production and regular
marketing. The management continuous to maintain excellent cordial relation
with its employees in all units attending to the grievances of its employees with
open mind. There are recognized unions in the company there are frequent
interactions between management and unions. There is a permanent sub –
committee of board of directors to discuss problems related to labor.

Expansion and diversification

The company was started with the limited objective of extracting oil from the
coconut cake. Cattle feed production and marketing immediately followed this.
Newer and better products were introduced and product mix was expanded by
pass protein feed.
Feed supplement for dairy cattle was the new products introduced by the
company. While the company opened edible oil division for the production of
reining edible oil, it was the beginning of new setup toward new
diversification. Directors are exploring the possibility of establishing a dairy
project as a part of diversification/expansion.
In the light of above growth, the name Kerala Solvent Extraction has been
changed to KSE Ltd with effect from 20 November 1996.

ISO Accreditation
KPMG Quality register both the dairy units at Konikara and Thalayath has been
accredited with ISO 14001: 19996, by the same quality register has accredited
Irinjalakuda unit of the company with ISO 9000:2000 registration. For the said
dairy units‟ registration under ISO 9000:2000 and HACCP is at final stages.

It’s implementation in KSE LTD

KSE has computerized its department‟s way back. Personal computers with
UNIX as the operating system were used in the late 1980‟s. But the computers
24
of various department were not networked then. In the year 1999, KSE went to
upgrade its EDP setup further. Customer made ERP software was developed
for its units and head office. The installation of ERP software made the work of
the department of KSE easier. Being custom made for KSE this ERP software,
SQL, RDBMS, front end on visual basic, Windows NT, 2000 and XP
seamlessly had integrated all functions of theorganizations
The head office at Irinjalakuda has 3 servers and 40 nodes running in the
application. One server is networked, other is kept as backup and the third one
is used ass internet server. In all other units they have about 8 servers and 50
nodes. Their latest plant has a computerized control room for monitoring,
homogenization, size reduction, batching pelletisation, pellet cooling and
aspires system.
In addition with the ERP system, KSE also had implemented an electronic
messagingsystemintheorganization,whichisenteredoncompany‟swebsite.This
messaging system reduced the communication bottlenecks of the company. The
new computerization project was initiated by Mr. R. Sankaranarayanan who is
the chief finance manager and company secretary of KSELtd.

Growth and the development of the organization

The company came into existence with a very modest objective; to help the
solvent extraction millers through solvent extraction process. Achieving the
same with remarkable success, KSE over the years expanded considerably,
having ventured into other growth area as well. The company is leading
manufacturer of cattle feed more than 600 exclusive dealers throughout Kerala
and Tami Nadu in all potential area. Again there are sub dealers like private
dealers and corporative milk societies, who are always touch with the
customers.
The company mainly distributes their products in Kerala and Tamil Nadu.

25
The company now manufactures cattle feed in the name of:-
And also refined oil in the name of:-
• KSSUPER
• KSDELUX
• KSSPECIAL

And also refined oil in the name of:-

• KS SUPREME
The above mentioned are the main products which have been produced in the
KSE Ltd Irinjalakuda. The cattle feeds are different in their own names i.e.
each ones contents are different and to add more nutrition‟s in each pack so
they are different in their quality and also the price may vary. Another product
is refined oil. These will also very popular in the market.

26
3.3 product profile
In the beginning stage of KSE Ltd had only solvent unit. After sometime the
company started to produce Jersey copra cakes, compound cattle feed and
refined sunflower oil. Jersey copra cake, the coconut cake which comes out
Solvent Extraction process is made pure by de-solvent sing and named as
“Jersey Brand Copra Cake”. At present it is marketed in Kerala, Tamil Nadu
and Gujarat Company started to produce ready mix compound cattle feed
because it was not able to fulfill the demand of “Jersey Copra Cake”. The
company was also producing food supplement for cattle feed.

Cattle feed products

• JERSEY COPRA CAKE
• K SSUPER
• K S ORDINARY
• K S DELUXPELLET
• K S DELUX PLUS PELLET
• K S SUPREME PELLET
• K S PREMIUM PELLET
• K SFORTE
• SOLVENT EXTRACTED COCONUTOIL

Dairy products
• K SMILK
• K SGHEE
• K SCURD
• K S BUTTERMILK
• ICE CREAM(VESTA)

27
 Organization structure of KSE Ltd

BOARD OF DIRECTORS

CHAIRMAN

MANAGING DIRECTOR

EXECUTIVE DIRECTOR

CHIEFGENERAL CHIEF FINANCE

MANAGER OFFICER AND
COMPANY
SECRETARY

FINANCE PERSONEL MARKETING PRODUCTION QUALITY PURCCHASE

DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT DEPARTMENT

1. GENERALSTORE
EDP DEPARTMENT
2. BOILER DEPT
3. ELECTRICALDEPT
4. MAINTENANCE
5. GODOWNDEPT

28
4. Data analysis and interpretation
Working capital is the amount of fund used for financing the day to day
operation in a business concern such as for purchasing raw material, meeting
expenditure on salaries, wages, rates, advertisements etc. this chapter
considered to be the core part of this project work. It mainly indented to
examine the liquidity, profitability and financial leverage of the company for
last five years.
Table 4.1 schedule of changes in working capital 2013-2014
(In cores)
Increase in Decrease in
Particulars 2013 2014 working working
capital capital
Current asset
Inventories 41.48 47.37 5.89
Trade receivable 0.17 0.29 0.12
Cash and cash equivalents 5.83 3.76 2.07
Short term loans and advances 2.20 3.31 1.11
Other current asset 0.01 0.09 0.08
Total current asset(A) 49.69 54.82
Current liabilities
Short term borrowings 17.64 19.46 1.82
Trade payable 3.55 9.14 5.59
Other current liabilities 8.57 12.93 4.36
Short term provisions 7.63 4.22 3.41
Total current liabilities(B) 37.39 45.74

Working capital(A-B) 12.3 9.08

Decrease in working capital 3.22 3.22
12.3 12.3 13.83 13.83
(Source Annual report)
Interpretation
The table 4.1 shows decrease in working capital (3.22). Working capital in
2014 is decreased to 9.08 cores from working capital in 2013(12.3 cores). So
there is no adequate source of working capital to meet their working capital
requirements.

29
Table 4.2 schedule of changes in working capital 2014-2015
(In crores)
particulars 2014 2015 Increase in Decrease in
working working
capital capital

Current asset

Inventories 47.37 49.7 2.33

Trade receivables 0.29 0.17 0.12
Cash and cash equivalents 3.76 3.14 0.62
Short term loans and advances 3.31 4.84 1.53
Other current asset 0.09 0.09 - -
Total current asset(A) 54.82 57.94

Current liabilities

Short term borrowings 19.46 7.29 12.17

Trade payable 9.14 8.66 0.48

Other current liabilities 12.93 14.76 1.83

Short term provisions 4.22 7.78 3.56

Total current liabilities(B) 45.74 38.48

Working capital(A-B) 9.08 19.46

Increase in working capital 10.38

19.46 19.46 16.51 16.51

(Source- Annual report)

Interpretation
The table 4.2 shows increase in working capital (10.38). Working capital in
2015 is increased to 19.46 crores. So it indicates there is adequate source of
working capital to meet their working capital requirements.

30
Table 4.3 schedule of changes in working capital 2015-2016
(In crores)
Particular 2015 2016 Increase in Decrease in
working working
capital capital

Current asset

Inventories 49.70 66.01 16.31

Trade receivables 0.17 0.29 0.12

Cash and cash equivalents 3.14 37.78 34.64

Short term loans and advances 4.84 4.96 0.12

Other current assets 0.09 0.14 0.05

Total current assets(A) 57.94 109.81

Current liabilities

Short term borrowings 7.29 8.82 1.03

Trade payable 8.66 16.33 7.67

Other current liabilities 14.76 25.5 10.76

Short term provisions 7.78 10.24 2.46

Total current liabilities(B) 38.48 60.38

Working capital(A-B) 19.46 48.8

Increase in working capital 29.34

48.8 48.8
(Source – annual report)

Interpretation
Above table 4.3 shows increase in working capital by 29.34 crores. Working
capital in 2016 increased to 48.8crores from 19.46 crores (2015). So there is
adequate amount of working capital to meet their working capital requirements.

31
 Table 4.4 schedule of changes in working capital 2016-2017
(In crores)
Particulars 2016 2017 Increase in Decrease in
working working
capital capital

Current asset

Inventories 47.37 49.7 2.33

Trade receivables 0.29 0.17 0.12
Cash and cash equivalents 3.76 3.14 0.62
Short term loans and advances 3.31 4.84 1.53
Other current asset 0.09 0.09 - -
Total current asset(A) 54.82 57.94

Current liabilities

Short term borrowings 19.46 7.29 12.17

Trade payable 9.14 8.66 0.48

Other current liabilities 12.93 14.76 1.83

Short term provisions 4.22 7.78 3.56

Total current liabilities(B) 45.74 38.48

Working capital(A-B) 9.08 19.46

Increase in working capital 10.38
19.46 19.46 16.51 16.51
(Source annual report)

Interpretation
In this table 4.4 shows increase in working capital by 1.97 crores. The working
capital of the company is increased to 50.77 crores. It indicates there is
adequate amount of working capital to meet their working capital requirements.

32
 Table 4.5 schedule of changes in working capital 2017-2018
(In crores)
Particulars 2017 2018 Increase in Decrease in
working working
capital capital

Current asset

Current investment - 35 35
Inventories 73 74.32 1.32
Trade receivables 0.09 0.11 0.02
Cash and cash equivalents 10.44 11.4 0.96
Short term loans and advances 4.38 4.6 0.22
Other current assets 0.12 0.11 0.01
Total current assets(A) 88.02 125.54
Current liabilities

Short term borrowings 2.44 30.22 27.78

Trade payable 8.02 7.51 0.51

Other current liabilities 18.4 22.63 4.23

Short term provisions 8.39 1.79 6.6

Total current liabilities(B) 37.25 62.16

Working capital(A-B) 51.37 63.38

Increase in working capital 12.01 12.01

63.38 63.38
(Source- annual report)

Interpretation
In this table 4.5 shows increase in working capital by 12.01 crores. Working
capital of this company have sufficient amount of working capital to meet their
working capital needs.

33
Table 4.6 schedule of changes in working capital 2018-2019
(In crores)
Particulars 2018 2019 Increase in Decrease in
working working
capital capital

Current assets

Current investment 35 83.33 48.33

Inventories 74.32 90.52 16.2

Trade receivables 0.11 0.17 .06

Cash and cash equivalents 11.4 20.74 9.34

Short term loans and advances 4.6 1.39 3.21

Other current assets O.11 4.14 4.04

Total current assets (A) 125.54 200.30

Current liabilities

Short term borrowings 30.22 34.62 4.60

Trade payables 7.51 15.12 7.61

Other current liabilities 22.63 29.51 6.88

Short term provisions 1.79 - 1.79

Total current liabilities (B) 62.16 79.25

Working capital (A-B) 63.38 121.05

Increase in working capital 57.67

121.05 121.05
(Source annual report)

Interpretation
In this above table 4.6 shows an increase of 57.67 in working capital therefore
it says the company have adequate amount of working capital to meet the
working capital needs.

34
Table 4.7 schedule of changes in working capital 2019-2020
(In crores)
Particulars 2019 2020 Increase in Decrease in
working working
capital capital

Current assets

Current investment 83.33 42.61 40.72

Inventories 90.52 87.63 2.89

Trade receivables 0.17 0.17 - -

Cash and cash equivalents 20.74 25.60 4.86

Short term loans and advances 1.39 1.56 0.17

Other current assets 4.14 11.49 7.35

Total current assets 200.30 169.03

Current liabilities

Short term borrowings 34.62 32.99 1.63

Trade payables 15.12 8.00 7.12

Other current liabilities 29.51 19.35 10.16

Short term provisions - -

Total current liabilities 79.25 60.34

Working capital (A-B) 121.05 108.69

Decrease in working capital 12.36

121.05 121.05
(Source- annual report)

Interpretation
In this table 4.8 it shows a decrease in the amount of working capital by 12.36
as compared to last year. So this indicates that there is no adequate amount of
working capital to meet working capital needs.

35
Table 4.8 Current ratio (Rs in crores)
Years Current assets Current Current ratio
liabilities
2013-2014 54.82 45.74 1.19
2014-2015 57.94 38.48 1.51
2015-2016 109.18 60.38 1.81
2016-2017 88.02 37.25 2.36
2017-2018 125.54 62.16 2.02
2018-2019 200.39 79.25 2.52
2019-2020 169.03 60.34 2.80
(Source-annual report)
Figure 4.1 shows currentratio

3
2.
8
2.5
2. 2.3 2
5 6
2.0
2 2
1.8
1
1.5
1. 1
5 1.1
9
1

0.
5

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2020-
2019

Interpretation
From the above table 4.8 shows the current ratio of KSE Ltd is good. It
satisfies the standard norm for current ratio 2:1. The current ratio from 2013-
2014 to 2017-2018 are 1.19,1.51,1.81,2.36 and 2.02. so the liquidity position of
the company is adequate to meet the current liabilities.

36
Table 4.9 Liquidity ratio
Year Liquid assets Current Liquid ratio
liabilities
2013-2014 7.45 45.74 0.16
2014-2015 8.24 38.48 0.21
2015-2016 43.17 60.38 0.71
2016-2017 15.02 37.25 0.4
2017-2018 51.22 62.16 0.82
2018-2019 109.87 79.25 1.39
2019-2020 81.4 60.34 1.35
(Source- annual report)
Figure 4.9 shows liquidity ratio

1.
6
1.3 1.3
1. 9
4 5
1.
2

1 0.8
0. 0.7 2
8 1
0.
6 0.
0. 4
4 0.2
0.1 1
0. 6
20
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2020-
2019

Interpretation
Table 4.9 shows liquidity ratios of KSE Ltd. But the company's liquidity
position is not satisfactory as the ratio is below the standard ratio of 1:1. It
denote the weak repaying capacity of the KSE Ltd up to 2017-2018 from there
they have better ratio in 2018-19 and 2019-20 that indicates a good repaying
capacity of KSE ltd.

37
Table 4.12 Absolute liquid ratio
Year Absolute liquid Absolute liquid Absolute liquid
assets liabilities ratio
2013-2014 7.16 45.74 0.16

2014-2015 8.07 38.38 0.21

2015-2016 42.88 60.38 0.71

2016-2017 14.94 37.25 0.40

2017-2018 16.11 62.16 0.46

2018-2019 50.21 79.25 0.63

2019-2020 44.32 60.34 0.73

(Source- annual report)

Figure 4.3 shows absolute liquid ratio

absolute liquid
0. ratio 0.7
8 0.7
1 3
0.
7 0.6
3
0.
6
0.4
0. 0. 6
5
0. 4
4

0. 0.2
3
0. 0.1 1
2 6
0.
1

0 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2020-

2019

Interpretation
From the above table 4.10 shows absolute liquid ratios of KSE Ltd. The
standard norm for absolute liquid ratio is 5:1. But the absolute ratios are 0.16,
0.21, 0.71, 0.40 and 0.26. So the absolute liquid ratio of the company is not
satisfactory.
38
Table 4.11 working capital turnover ratio
Year Net sale Net working Working capital
capital turnover ratio
2013-2014 697.18 9.08 76.78
2014-2015 806.30 19.46 41.43
2015-2016 899.70 48.8 18.44
2016-2017 924.93 50.77 18.42
2017-2018 1047.25 63.38 16.52
2018-2019 1034.17 121.14 8.54
2019-2020 1209.41 108.69 11.13
(Source- annual report)

Figure 4.4 shows working capital turnover ratio.

Interpretation
The above table 4.11 shows poor working capital turnover ratio. In 2013-2014
the turnover ratio was better. But after this year the working capital shows
decreasing trend. In 2017-2018 the ratio was very low (16.52). It indicate that
the over trading, that means working capital is not sufficient to meet the
increased volume of sales.

39
Table 4.12 Shows Fixed asset turnover ratio
Year Net sale Fixed asset Working capital
turnover ratio
2013-2014 697.18 39.44 17.68
2014-2015 806.30 36.54 22.07
2015-2016 899.70 27.45 32.78
2016-2017 924.93 25.27 36.60
2017-2018 1047.25 28.97 36.15
2018-2019 1034.17 27.44 37.69
2019-2020 1209.41 26.20 46.16
(Source- annual report)

Figure 4.5 shows fixed asset turnover ratio

50 46.1
45 6
40 36. 36.1 37.6
6 5 9
35 32.7
8
30
25 22.0
20 17.6 7
15 8
10
5
0

2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2020-

2019

Interpretation
Above table shows higher fixed asset turnover ratio. The turnover ratios are
17.68, 22.07, 32.78, 36.60, 36.15, 37.69 and 46.16 higher turnover ratios
indicate the better utilization of fixed assets in these years

40
Table4.13 shows Inventory turnover ratio
Years Net sale Inventories Inventory
turnover ratio
2013-2014 697.18 47.37 14.72
2014-2015 806.30 49.70 16.22
2015-2016 899.70 66.01 13.63
2016-2017 924.93 73 13.67
2017-2018 1047.25 74.32 14.10
2018-2019 1034.17 90.52 11.42
2019-2020 1209.41 87.63 13.80

Figure 4.6 shows inventory turnover ratio

Interpretation
Above table shows a good inventory turnover ratio of kse ltd. In 2015-2016 the
inventory turnover was high. Then in 2016-2017 it is decreased. It shows that
inventories are lying in stock for long time for that does not sell quickly. But
after this year company shows a good inventory management and that reflects
in this figure

41
Table 4.14 shows inventory holding period
Years Number of days Inventory Inventory
in a year turnover ratio holding period
2013-2014 365 14.72 24.81
2014-2015 365 16.22 22.50
2015-2016 365 13.63 26.78
2016-2017 365 13.67 28.81
2017-2018 365 14.10 25.89
2018-2019 365 11.42 31.96
32019-2020 365 13.80 26.45

Figure4.7 shows inventory holding period

Interpretation
Above table shows inventory holding period of kse ltd. In 2017-2018 the
inventory holding period is less that means shorter inventory period is better for
the company. So it indicate that inventory is sold fast

42
Table 4.15 shows debtors turnover ratio
Years Net sale Debtors Debtors
turnover ratio
2013-2014 697.18 0.29 2404.07
2014-2015 806.30 0.17 4742.94
2015-2016 899.70 0.29 3102.41
2016-2017 924.93 0.09 10277
2017-2018 1047.25 0.11 9520.45
2018-2019 1034.17 0.17 6083.35
2019-2020 1209.41 0.15 8062.73

1200
0
1027
1000 7 9520.4
0 5
8062.7
800 3
0
6083.3
600 5
0 4742.9
4
400
0 3102.4
2404.0 1
7
200
0

0
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020

Interpretation
Above table shows higher debtors turnover ratio in 2017-2018. The debt
collection policy of the company is very good in 2016-2017. But in 2017-18
debtors turnover ratio is decreased due inefficiency in debt collection from
debtors. Then it again decreased in2018-19 but it has increased in 2019-2020
that shows increase in the efficiency of debt collection of KSE ltd.

43
Table 4.16 shows net profit ratio
Years Net profit Net sale Net profit ratio

2013-2014 4.65 697.18 0.67

2014-2015 15.37 806.30 1.91
2015-2016 43.63 899.70 4.85
2016-2017 7.58 924.93 0.82
2017-2018 15.62 1047.25 1.50
2018-2019 69.63 1034.17 0.07
2019-2020 9.43 1209.41 7.80

Figure4.9 shows net profit ratio

9

8 7.
8
7

5 4.8
5
4

3
1.9
2 1 1.
5
0.6 0.8
1 2
7 0.0
0 7
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2020-
2019

Interpretation
The above shows net profit of the company. In 2017-2018 it shows an
increasing trend compare with the net profit in 2016-2017. So that it indicate
more return to shoulders compare with 2016-2017.then it shows very less net
profit ratio in 2018-19 and then it shows very high net profit in 2019-20.

44
5.1 Findings
The study as undertaking mainly to analyze the working capital management of
KSE ltd. The major findings of the study are the following.

• Schedule of changes in working capital shows an increase in working

capital during the period 2014-15 to 2018-19. But it shows decreasing
working capital in 2013-14 and2019-20.

• Current ratio shows increasing trend during the period 2013-14 to 2019-
20. But in 2017-18 its shows decreasing. But satisfies the standard norm
of the current ratio 2:1. So company can pay their liabilities without
facing muchdifficulties.
• Working capital turnover ratio shows decreasing trend except in the year
2013-14 and the last year. Decreasing trend means, the company has no
proper utilization ofresources.
• Fixed asset turnover ratio shows increasing trend during the studyperiod
.this indicate the better utilization of fixed asset in these 7 years.
• Inventory turnover ratio was high in 2014-15. But afterwards it shows
decreasing trend. But 2017-18 it shows a better ratio compare with
2016-17 then it again decreasing and increase in the last year. It indicate
good inventory management in thecompany.
• Inventory holding period ratio shows less days in 2017-18 and 2019-20
compare with other years. Less inventory period is beneficial for the
company.

• Debtor‟s turnover ratio shows increasing trend in the 2019-20. Its show
that increasing in the efficiency in debt collection ofcompany.
• Net profit ratio shows a poor result in 2018-19. But in 2019-20 it show
high net profit ratio that means better return to shareholders.

45
5.2 suggestions
• The net working capital of the company fluctuating every year.so that
company take sufficient effort to maintain working capital by increasing
trend.

• The company can try to reduce its investment in inventory.

• Company can give more importance to their collection policy of the

company. It help to improve the management of debt collection.
• The company should reduce their direct and indirect expenses. So it will
help to increasing net profit of the company
• In future company can give more importance to cash transactions than
credit facilities. It may help to maintain liquidity position of the
company.
• Company can give importance to their credit collection policy of the
company. It help to improve the management of debt collection

46
5.3 conclusion
KSE ltd is one of the largest producers of cattle feed in India. The company
incorporated in 1963 and have an experience of more than 40 years in the cattle
feed industry. They have market leadership for their product. The main
competitor of KSE is Kerala feeds.

This project deals with the study of working capital management of KSE ltd. It
is concentered on the analysis of working capital management of the company
during the period 2013-2014 to 2019-2020. Ratio analysis and schedule of
changes in working capital were used for this analysis to find out the
management of working capital as well as they efficiency of the company. The
study reveals that the management of working capital has to improve and also
the liquidity position of the company.in total the financial position of the
company is sound.

47
 JOURNAL
• Kumar S, S., 2016.

• Hasnain, Z., Hussain, S., Hassan, W., & Zubair, M. (2017).

WEBSITES

• http://www.kselimited.com/index.aspx

• https://www.goodreturns.in/company/kse/history.html

• https://www.indiamart.com/kse-limited/aboutus.html

BOOKS

• Bhalla. V. K. (2004). Working capital management - Text and Cases. ANMOL Publication,
Sixth Revised Edition, New Delhi, ISBN: 81-261-1813 – X.

 Bhattacharya, H. (2003). Working Capital Management, Strategies and Techniques. Prentice

hall, New Delhi. [34] Hina Agha. (2014).

 Impact of Working Capital Management On Profitability. European Scientific Journal,

Edition. 10(1), Issn: 1857 – 7881 (Print) E - Issn 1857- 7431. [35]
KSE Standalone Profit & Loss account

March 2020 March 2019 March 2018 March 2017 March 2016
12 mths 12 mths 12 mths 12 mths 12 mths
Income
Sales Turnover 1,209.41 1,304.17 1,047.25 925.12 899.98
Excise Duty 0.00 0.00 0.00 0.18 0.28
Net Sales 1209.41 1,304.17 1,407.25 924.94 899.70
Other Income 5.66 5.19 2.10 2.30 12.09
Stock Adjustments 22.42 -2.67 3.53 1.70 0.58
Total Income 1,237.49 1,306.69 1,052.88 928.94 912.37

Expenditure
Raw Materials 1,110.25 1,100.05 938.25 833.69 770.01
Power & Fuel Cost 16.06 15.00 13.41 13.61 13.09
Employee Cost 48.87 46.77 41.30 36.96 33.83
Selling and Admin
Expenses 2.12 2.54 1.57 1.58 0.00
Miscellaneous Expenses 41.21 28.96 27.18 25.25 23.24
Total Expenses 1,218.51 1,193.32 1,021.69 911.09 840.17

March 2020 March 2019 March 2018 March 2017 March 2016
12 mths 12 mths 12 mths 12 mths 12 mths
Operating Profit 13.32 108.18 29.09 15.55 60.11
PBDIT 18.98 113.37 31.19 17.85 72.20
Interest 1.31 1.20 2.02 1.31 1.94
PBDT 17.67 112.17 29.17 16.54 70.26
Depreciation 3.34 3.52 3.28 4.27 6.36
Profit Before Tax 14.33 108.65 25.89 12.27 63.90
PBT(Post Extra-ord
Items) 14.33 108.65 25.89 12.27 63.90
Tax 5.20 39.02 9.52 4.68 20.26

Reported Net Profit 9.43 69.63 16.36 7.58 43.63

Total Value Addition 108.26 93.27 83.44 77.40 70.16
Equity Dividend 19.20 9.60 6.40 6.40 16.00
Corporate Dividend Tax 3.95 1.95 1.30 1.30 3.22

Per share data

(annualised)
Shares in issue 32.00 32.00 32.00 32.00 32.00

Earnings Per Share 29.46 217.58 51.13 23.69 136.36

Equity Dividend (%) 150.00 600.00 300.00 200.00 500.00
Book Value (Rs) 405.54 449.35 270.63 224.03 224.41
KSE Standalone Balance Sheet

March 2020 March 2019 March 2018 March 2017 March 2016
12 mths 12 mths 12 mths 12 mths 12 mths
Sources of Funds
Total Share Capital 3.20 3.20 3.20 3.20 3.20
Equity Share Capital 3.20 3.20 3.20 3.20 3.20
Reserves 126.57 140.59 83.40 68.49 68.61

Networth 129.77 143.79 86.60 71.69 71.81

Secured Loans 32.99 34.62 30.22 2.36 8.13
Unsecured Loans 6.99 5.62 6.70 6.25 5.47

Total Debt 39.98 40.24 36.92 8.61 13.60

Total Liabilities 169.75 184.03 123.52 80.30 85.41

March 2020 March 2019 March 2018 March 2017 March 2016
12 mths 12 mths 12 mths 12 mths 12 mths
Application of
Funds
Gross Block 35.34 33.95 32.17 79.78 79.10
Less: Accum.
Depreciation 9.60 6.67 3.26 54.79 51.76

New Block 25.74 27.28 28.91 24.99 27.34

Capital Work in
Progress 0.46 0.17 0.06 0.00 0.11

Investments 42.63 83.36 35.13 0.03 0.03

Inventories 87.63 90.52 74.32 73.00 66.01
Sundry Debtors 0.15 0.17 0.11 0.09 0.29
Cash and Bank
Balance 25.60 20.74 11.40 10.44 37.78
Total Current Assets 113.38 111.43 85.83 83.53 104.08
Loans and Advances 15.03 7.42 6.63 6.77 6.47
Total CA,Loans and
Advances 128.41 118.85 92.19 90.30 110.55
Current Liabilities 27.49 45.62 32.18 26.42 41.83
Provisions 0.00 0.00 0.58 8.87 10.78
Total CL &
Provisions 27.49 45.62 32.76 35.29 52.61

Net Current Assets 100.92 73.23 59.43 55.01 57.94

Total Assets 169.75 184.04 123.53 80.03 85.42

Contingent Liabilities 2.46 2.67 0.00 3.41 9.09

Book Value (Rs) 405.54 449.35 270.63 224.03 224.41