INTRODUCTION

Financial management reIers to that part oI the management activity which is concerned with the
planning and controlling oI Iirms Iinancial resources .It deals with Iinding out various sources
Ior raising Iunds Ior the Iirm .The sources must be suitable and economical Ior the needs oI the
business the most appropriate use oI such Iunds also Iorms a part oI Iinancial management.
Working capital management is concerned with the management oI current asset .It is an integral
part oI Iinancial management as short term survival is a prerequisite Ior long term success .One
aspect oI working capital management is the tradeoII between proIitability and risk .II the Iirm
doesn`t have adequate working capital ,that is, it doesn`t invest suIIicient Iunds in current assets ;
it may become illiquid and consequently may not have the ability to meet its current obligation
.II the current assets are too large ,proIitability is adversely aIIected . The key strategies and
considerations in ensuring a tradeoII between proIitability and liquidity is one major dimension
oI working capital management.
The goal oI working capital management is to manage the Iirm`s current assets and liabilities in
such a way that a satisIactory level oI working capital is maintained. Working capital, in general
reIers to the excess oI current assets over current liabilities. Management oI working thereIore, is
concerned with the problems that arise in attempting to manage the current assets, current
liabilities and the inter-relationship that exist between them.








OB1ECTIVES OF THE STUDY

The main objective oI the study is to evaluate the overall analysis oI working capital oI KAMCO
Ltd. Other speciIic objectives are

1. To analyze the working capital management oI KAMCO
2. To ascertain the growth oI KAMCO Ltd in respect oI proIit
3. To ascertain the liquidity oI KAMCO Ltd
4. To ascertain the eIIiciency oI the Iirm
5. To understand general perIormance oI the KAMCO Ltd
6. To get acquainted with the practical side oI business

NATURE OF THE PROBLEM

The problem Ior which this study has been undertaken is to analysis the Iinancial statement and
to Iind out the components oI working capital.The problem oI working capital management
involves the problem oI decision making regarding investment in various current assets with an
objective oI maintaining the liquidity oI Iunds oI the Iirm to meets its obligation promptly and
eIIiciently. The study is done to have a general view oI the Iinancial management oI the
company .Major areas covered in the scope oI the study is Iinancing oI the company ,capital
employed and proIitability.














HYPOTHESIS
Hypothesis means a mere assumption or some supposition to be proved or disproved. But Ior a
researcher hypothesis is a Iormal question that he intends to resolve .Thus a hypothesis, may be
deIined as a proposition or a set oI preposition set Iorth as an explanation Ior the occurrence oI
some speciIied group oI phenomena either asserted merely as a provisional conjecture to guide
some investigation or as highly probable in the light oI established Iacts. A research hypothesis is
a predictive statement, capable oI being tested by scientiIic methods that relates an independent
variable to some dependent variable.
Characteristics oI hypothesis
O Hypothesis should be clear and precise.
O Hypothesis should be capable oI being tested.
O Hypothesis should be in limited in scope and must be speciIic.
O Hypothesis should be stated as Iar as possible in most simple terms so that the same is
easily understandable by all concerned.
O Hypothesis should be amenable to testing with a reasonable time.
O Hypothesis must explain the Iacts that gave rise to the need Ior explanation.
Basic concepts concerning testing oI hypothesis There are two types oI hypothesis,
1. Null hypothesis: II we are to compare method A with method B about its superiority and iI
we proceed on the assumption that both methods are equally good then this assumption is
termed as the null hypothesis. A Null hypothesis is generally symbolized as H
0
.


2. Alternative Hypothesis: As against this we may think that the method A is superior or the
method B is inIerior we are then stating what is termed as alternative hypothesis. Alternative
hypothesis as H
1
.
H
o
is the non eIIective working capital
H
1
is the eIIective working capital


INTRODUCTION TO THE INDUSTRY
Agriculture is a very important sector oI the Indian companies .It contributes sizably to the
domestic product as also to exports .More than two-third oI the workIorce work in agriculture
and large may depend upon it, being engaged in agricultural products, agro based industries etc.
HISTORY TO THE INDUSTRY
India being an agricultural based economy provides livelihood to more than 75 oI the
population .Major portion oI our income that is., about 70 is earned Irom agricultural activities
.In spite oI the very dominant place oI agriculture, it is a depressed industry because oI low
productivity ,in agriculture ,small size oI Iarms ,Iinance and deIective equipments .Once
government believed that only large land holdings were the most eIIicient and they could use the
latest techniques in cultivation .how ever in recent years the emphasis has been shiIted Irom
large land holdings to small land holdings.
AIter achieving her independence in 1947,India Iound herselI to be badly lacking the means to
meet the Iood demands Ior her vast population .The existing agricultural scenario presented a
dismal picture traditional Iarming methods ,low yielding seeds and primitive implements
wholly unsuited to large scale cultivation .The only solution lay in mechanized Iarming which
could turn around the virtual Iortune oI India .In order to achieve this objective, indigenous agro-
machinery units were to be set up, without resorting to imports which undoubtedly passed a
heavy burden on the nation`s need.
Agricultural is way oI liIe ,tradition that Ior centuries has shaped the thought ,the outlook, the
culture and economic liIe oI the people oI India, agriculture is considered to be the major activity
oI most oI the people .Mover over 200million Iarmers and Iarm workers have been the backbone
oI Indian`s agriculture .In the beginning, then Iarmers adopted ancient method. The entire
process that is Irom the sowing the seed till harvesting were all done by the Iarmers itselI .It was
a really time consuming one, which required a lot labor work. The cost oI production was very
high and the beneIits are not promising

PRESENT STATUS OF THE INDUSTRY
In the view oI the spectacular success in the production and productivity achieved in developed
countries through mechanization oI agriculture, it was being agreed that India also should Iall in
line with these countries. Though India was backward in the use oI machines Ior agricultural
operations, yet in the past Iew years there has been an increase in the use oI modern implements.
The phase oI mechanizations oI Iarming in the country was slow during 1950`s.There aIter,
particularly since the middle oI 1960`s with the coming oI the new agricultural technology ,this
has increased .An associated eIIect oI the new technology is the change in the agricultural
practices .The preparation oI land the sowing oI seeds the watering oI land ,the control oI seeds
,the use oI pesticides ,the quick harvesting oI crops etc,are now done more scientiIically than
ever beIore












FUTURE SCOPE OF THE INDUSTRY
Agro-industry is looking proudly ahead into a more promising Iuture .Future will also see
diversiIication products in the Iarm mechanization Iield contributing signiIicantly to the
realization oI the Indian dream oI selI suIIiciency in Iood production and rededicating itselI to
the cause oI selI relevance and social responsiveness in the service oI people without respite.















PROFILE OF THE ORGANISATION
The Kerala Agro Machinery Corporation Ltd. Popularly known as KAMCO` was established in
the year 1973 as a subsidiary oI Kerala agro industries corporation Ltd .|KAIC|and subsequently
became a Iully owned Govt.oI Kerala undertaking at Athani, 25km north oI koachi .It all began
in 1958, when Dr.Rajendra Prasad, the president oI India was presented with a Kubota power
tiller by the Japanese |M/S.Kubota Ltd. Japan,the world`s leading manuIacturer oI power tiller
and other agriculture machinery|. The kerala agro industries corporation Ltd.|KAIC
Ltd.|Trivandrum,|Govt. oI kerala company|promoted the establishment oI KAMCO .The KAIC
Ltd. Entered in to a technical collaboration agreement with M/S Kubota Ltd.Japan in
February1972.On 15.11.1972 the kerala industrial and technical consultancy organization
Ltd.|KITCO|were entrusted with the worth oI Rs.2cores as asubsidiary oI M/S. KAIC Ltd.
Which held the entire paid up capital shares in KAMCO .Even though the company was Iormed
as a subsidiary oI KAIC Ltd. Subsiquently the company become a Iully owned Govt. company
by transIerringthe sheres held by KAIC Ltd.
KAMCO hascompleted its 37 years and is running on proIit Ior the last 26 years continuously
inceasing its production ,turnover and proIit year aIter year .








HISTORY OF THE ORGANISATION
Kerala agro machinery corporation Ltd was established in april 1973 as a subsidiary oI the
Kerala Agro Industries Corporation Ltd.speciIically Ior the manuIacture oI KUBOTA power
tiller in collaboration with M/S Kubota Ltd, Japan under industrial license already granded by
the Govt. the company has its registered oIIice at Athani in Ernakulam Dist. And the Iirst
manuIacturing unit was also established there.Initially,the components were being imported Irom
Japan in CKD condition,which were assembled and tested in the Iactory at Athani.The Company
started indigenizing the components in a phased manner and the process oI indigenization was
completed by the year 1986.By this time,KAMCO became an independent Organization and the
collaboration agreement with M/S Kubota also ceased to exist since Iull indigenization had been
attained and the product coming out was Iully Indian in all respects.The product was also
renamed as KAMCO Power Tiller.At Athani, in addition to the Assembly shop, the Company
also has got machine shop where most Iunctionally critical components oI the power tiller are
being processed.Rest oI the items is bought out Irom Small and Medium scale industries located
mainly in South India.
In 1992,KAMCO took over a sick unit oI state SIDCO in Kalamassery major industrial estate
and converted the same to a power tiller engine assembly plant.The unit was taken over along
with employees oI SIDCO and now the Company produces Engines needed Ior Power tiller.The
approximate investment in this unit is Rs1.2 Crores.
The company had procured 11acres oI land in the industrial development area at Kanjicode
,Plakked and as per the approval oI project report by the Govt. KAMCO`s third unit was
established there during the period 1994-95at a cost oI Rs.4.3 crores .This third unit went in to
production in March 1995where power tillers are being produced Kalamassery unit is supplying
engines needed Ior the power tiller assembled at Palakkad unit.
By 1991thecompany had taken up development oI a small harvesting machine which was
completed by 1996 aIter trial runs .The product was named KAMCO power reaper and initially
regular production commenced in Klamassery unit As the Iacilities available there had been
merger ,company established its Iorth unit at Mala in Thrissur Dist. In the year 2000at a cost oI
Rs.4.28crores and shiIted the production oI power reaper Irom Kalamassery to Mala .Production
oI power reaper is now regularly going on in this unit .All the investment had been met Irom
company`s own resours.
The company has established a dealership arrangement throughout the country consisting oI
more than 40 dealers in the Govt. and Pvt. Sector .Tiller is being sold
inKerala,Thamilnadu,Orrisa,WestBangal,Maharashtra,Bihar,Meghalaya,Tripura, Manipur
,Gujarat ,Karnataka ,Andhrapradesh ,and Pondicherry. In all the places except West Bengal the
product commends 45 to 50oI the market share whereas in West Bengal the product commends
about 85 .Company has procured 9647power tillers during 208-09Irom all units together which
are sold in the above states .Company is also taking eIIorts to make its presents Ielt in other
states also.
Power reaper is now being sold in kerala ,Thamilnadu Andhrapradesh and Orissa and to some in
Maharashtra also .In Andhrapradesh and Orrisa the product is very popular .During the year
2008-09 company produced1293 reapers and sold the entire quantity through the dealers .
Kerala Govt.have invested Rs.161.46 lakhs by way oI share capital in the company |161460
shares Rs100 each |the company is running on proIit since 1984-85and regularly paying
dividend to Govt.Divident at 30is being sold paid to Govt.Irom the year 2001-02 onwords .
Sales turn over Ior the year 2008-09has crossed 120crores oI Rupees Reserves and surplus oI the
company as on 31.03.2009 is Rs 8112.94 lakhs .Irom internally generated Iunds company
invested in shares worth Rs 150 lakhs in Kerala Ieeds Ltd and Rs 50lakhs in cochin international
airport.
Power tiller now equipped to conIirm to CMVR norms oI central Govt power tiller manuIactured
by the company is also covered under ISO certiIication Irom 1998 onwords.