Quantitative Methods ISBM LATEST EXAM ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558

Three numbers, whose sum is 12, are in AP. If 1,2 and 6 are added to them, the resultin g
numbers are in GP. Find the numbers
CONTACT FOR ANSWER
DR. PRASANTH MBA PH.D. DME MOBILE / WHATSAPP: +91 9924764558 OR +91 9447965521 EMAIL: prasanththampi1975@gmail.com WEBSITE: www.casestudyandprojectreports.com

Quantitative Methods
Page 1 Out of 1
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
1. Three numbers, whose sum is 12, are in AP. If 1,2 and 6 are added to them, the resultin g
numbers are in GP. Find the numbers
2. Average rainfall on a city from Monday to Saturday is 0.3 inch. Due to heavy rainfall on
Sunday, the average rainfall for the week increased to 0.5 inch. What was the rainfall on
Sunday?
3. Calculate median from the following data
Marks 10-25 25-40 40-55 50-70 70-85 85-100
Frequency 6 20 44 26 3 1
4. Given the following results of the height and weight of 1000 students. The mean height is 170
cm, the mean weight is 75 kg. the standard deviation of the height and weight are 6 cm and 6
kg respectively r = 0.6. amit weighs 50 kg, sumeet is 1.5 m tall. Estimate the height of Amit
from his weight and the weight of sumeet from his height
5. In a sample of 500 people from a village in rajasthan, 280 are found to be rice eaters and rest
wheat eaters. Can we assume that both the food articles are equally popular?
6. In a binomial distribution 31% of the items are under 45 and 8% are over 64. Find the mean
and variance of the distribution
7. In a large number of group of children 55% are under 60 cm heighty nd 40% are between 60
and 65 cm. Assuming a normal distribution, find the mean and SD of height
8. Construct index number form the data by applying Marshall edge worthmethod
Commodity Price 2004 Quantity Price 2006 quantity
A 2 8 4 6
B 5 10 6 5
C 4 14 5 10
D 2 19 2 13


Management Control Systems
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks 10 Marks
1. Consider a Retail Outlet. What should be the objectives of Management
Control system for the retail outlet? Examples would strengthen your views.
2. Explain the Just-in-time and total quality management techniques of control.
Also, elaborate the implication of these techniques for management control.
3. Describe the need for MIS in a business organization focusing on Management
Control System. Also explain the important considerations in designing
Management Information System (M l S) for the purpose of Management
Control
4. Explain how by designing an appropriate Management Control System , the
different types of risks faced by the banks can be tackled.
5. Describe and illustrate significance of human behavior patterns in management
control.
6. Define Transfer pricing. Describe the various transfer pricing methods in detail
7. Differences and similarities between Management Control and Task Control
8. Give impact of Internet on Management Control.

BPO MANAGEMENT ISBM EXAM ANSWER SHEETS PROVIDED WHATSAPP OR MOBILE +91 9924764558 OR +91 9447965521

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BPO Management
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
Case 1 (20 Marks)
Two G iants Take the Offshore UPO Lead
GE Capital’s International Services unit, which provides everything from risk calculation to IT services and
actuarial analysis for GE worldwide, has grown from 634 employees to 17,000 during the past five years.
More than half of those workers are in India, and they are not being used for mindless data entry—in India
every employee has a college degree, and more than 1,200 have Master’s degrees in Business Administration
(MBAs). Microsoft has about 200 employees developing software in Bangalore, where it opened its first non-
U.S.-based product development center five years ago. In July 2003, the company announced it will be
shifting more currently U.S.-based jobs to India as it seeks to lower technical support and development costs.
Microsoft will increase its staff in India in the coming years, as the country continues to turn out tens of
thousands of English-speaking engineers each year.
1.) Summarize and Analyze the Case and give your Commnets
Case 2 (20 Marks)
AT&T Uses Team Approach to Outsource Its HR Function
When AT&T opted to outsource human resources, the telecommunications company signed a seven-year
comprehensive outsourcing agreement with Aon Consulting. A team of functional experts in AT&T’s human
resource (HR) and finance departments orchestrated the outsourcing initiative. Each department challenged
the other to prove the merits of the outsourcing strategy, resulting in a well-thought-out, appropriate, and costeffective
out- sourcing initiative. AT&T’s finance and HR departments also developed an atypical process for
determining which HR activities would be best served by out- sourcing. Rather than ask respective managers
to prove why their activity should be outsourced, the team asked them to provide evidence that their activity
should continue to be retained in-house. In doing this, managers became more cognizant of the benefits of
outsourcing, less adversarial and threatened by the strategy, and potential champions of it to the employee
population. Ultimately, managers designated virtually every HR function for outsourcing. Aon Consulting
now provides AT&T with HR administrative, transaction, and payroll services, including the oversight of
existing benefit plan providers, for AT&T’s 70,000 U.S.-based employees.
1.) Summarize and Analyze the Case and give your Comments
Case 3 (20 Marks)
GE Real Estate Understands Total BPO Costs
Realizing cost savings from offshore outsourcing often takes years of effort and a huge up-front investment.
For many companies, it simply may not be worth it. “Someone working for $10,000 a year in Hyderabad can
end up costing an American company four to eight times that amount,” says Hank Zupnick, CIO of GE Real
Estate. Yet, all too often, companies do not make the outlays required to make offshore outsourcing work.
“You have to bring people to America to learn your applications, and that takes time, particularly if you’re
doing it with a new vendor for the first time,” explains Zupnick, who maintains a handful of three-year
contracts with offshore vendors. In GE Real Estate’s case, the transition time for each vendor was up to a year
in some cases, in addition to the moneydraining vendor selection period of several months. Zupnick, who has
seven years of offshore experience, says most of his peers do not appreciate the time and money it takes to get
a relationship up and running. “The vendors say you can throw it over the wall and start saving money right
away. As a result, I have heard of CIOs who have tried to go the India or China route, and nine months later
they pulled the plug because they were not saving money,” Zupnick says. “You have to build in up to a year
for knowledge transfer and ironing out cultural differences.” At GE Real Estate, managing the offshore
vendor is such a big task that Zupnick assigned someone to handle it on a half-time basis at a $50,000 salary.
The individual makes sure projects move forward and develops and analyzes vendor proposals against the
RFPs when it comes time to bid out new work.
1.) Summarize and Analyze the Case and give your Comments
Case 4 (20 Marks)
Informal Vendor Selection Leads to Disaster
A large and well-respected company had a vision in the early 1990s of becoming one of the leanest and most
profitable manufacturers in the industry. The company’s CFO felt that the company could be much more
efficient if it focused on what it was good at, as opposed to managing some of the larger support functions.
After looking into its HR organization, the CFO determined that outsourcing this function would reduce a
great deal of overhead and could fix several of the problems the company continually faced. The CFO started
the project by assigning himself to be the company’s BPO champion. (This was mistake number one.) Next,
he contacted the ClO and explained how this new outsourcing effort would allow the company to make its
numbers in the next year and that he should be excited about assuming the role of change agent. Recognizing
that he had no experience in BPO, the ClO decided to go outside the organization for assistance. The first
problem he faced was who to call. The C1O had a relationship with a local consulting group that specialized
in outsourcing wide area networks. The firm was invited to a meeting to ask if they were interested in
handling the BPO project.The consulting group explained how outsourcing was one of its service offerings.
However, as understood by the consultant, the project could not be completed quickly or inexpensively.
Nonetheless, the CFO accepted the consulting group’s statements and
agreed to move forward.The following Monday morning, a three-hour kickoff meeting began between the
ClO, CFO,and the eager consulting company. The consulting presentation covered outsourcing at a high
level and the financial impact it could have on a company. This presentation certainly reaffirmed the CFO’s
vision by capitalizing on the savings a company could anticipate. The unfortunate point was that no one in the
room had any idea how complex this project was going to be. The CFO created a project team by assigning
several subject matter experts to the team on a part-time basis. With everyone working part-time one really
took responsibility for the project and simply assumed that t consulting group would handle it. The consulting
group did not really understand the HR department functions and, therefore, could not structure the new
process flow. Because the consulting group was not set up to handle the HR back-office functions, it found
itself trying to outsource the process to another consulting group This BPO project grew out of control within
weeks. After wasting seven months and spending $800,000, the CFO became furious about the lack of
progress. The ClO was fired for selecting the wrong consulting group, which apparently provided no added
value, and the consulting group was released only to face a lawsuit. This experience was a disappointment for
the CFO, and he decided to revert back to the old way of operating the HR department. To this day the
organization’s HR function is as ineffective as it was before the BPO project debacle.
1.) Summarize and Analyze the Case and give your Commnets

Explain 7 phases of negotiating tactics

Explain 7 phases of negotiating tactics
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Business Communication
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks 10 Marks
1. Define Public Speaking & Determine the purpose of topic Selection
2. What is media of mass Communication & Explain the modes of Communication
3. Explain the methods of Oral Communication in Terms of
a) Among Individuals b)Among Group
4. List the different Electronic modes of Communication & Explain the mode of
Communication
5. Explain 7 phases of negotiating tactics
6. What is group discussion? How is it Evaluated? And what is the techniques of GD
7. What are the techniques for writing Successful job application
8. Explain the relationship of non-verbal message with verbal message?


 Business Environment
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks 10 Marks
1. Give a block diagram in establishing the design and quality standards of technology recipient site?
2. Business decision making and the impact of the macro-environment, Discuss?
3. Give the constitution of SEBI Board and explain SEBI functions?
4. Write a note on socio-cultural environment of Business Write a note on socio-cultural environment of Business?
5. Discuss how the environment acts does as a stimulant to business. Analyze why business often does little for the preservation of physical environment despite the fact that it is significant for business activity?
6. Evaluate the advantages and disadvantages of FDI. What is your opinion on the role of FDI in the Retail Sector? Justify your views with India's experience in this sector?
7. Discuss the Third plan (1961-66)?
8. Give any three critical elements of economic environment of Business?

ICICI Centralizes Applications CASE STUDY ANSWER WHATSAPP 91 9924764558

ICICI Centralizes Applications CASE STUDY ANSWER
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BANKING MANAGEMENT
SUBJECT : BANKING MANAGEMENT
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
CASE STUDY 1 (20 Marks)
ICICI Centralizes Applications
ICICI centralizes ap plications for 'anywhere'
When anytime, anywhere banking came to our country, ICICI Bank had to move away from the
branch-centric model and make its services available nationwide. The solution was to centralize its
applications. by Minu Sirsalewala
ICICI Bank, India's second-largest bank with a network of about 540 branches and offices and over
1,000 ATMs offers banking products and financial services to corporate and retail customers through
a variety of delivery channels. The legacy systems at ICICI group (now called ICICI Bank) were
stand-alone systems, networked only for basic e-mail and none of the core applications were linked
to the network. Around 1998 the company realized that to improve its operations and increase
efficiency it needed to centralize its core banking applications.
Legacy systems
The traditional systems at ICICI Bank were very centric to the branch. For example a server at New
Delhi was specific to the branch in that city; the ATMs were standalone catering only to the city
branch. The banking transactions were thus limited to the respective branch offices as customer data
was not available in other branches. This made banking a limited service and very branch specific.
ICICI realized the importance of offering nationwide banking but this would be possible only by
having a centralized data repository.
The shift
The basic network was set up for providing the e-mail facility, but none of the applications were
linked to the network. The network comprised of a mix of servers running different applications at
various branches of the bank. With growing business and rapidly increasing accounts, the company
found it extremely difficult to administer and manage the system.
This also resulted in duplication of backend services and procedures, as the systems were not
centralized for the core banking applications.
"There was a lot of additional cost being incurred due to the duplication of the backend procedures at
the branch offices," said Manoj Kunkalienkar, Joint President ICICI Infotech Services Limited.
The centralization procedure started around late 1999. ICICI Infotech (a company promoted by
ICICI) made the first network design for the group in 1999—it was a hub and spoke architecture.
Utmost care was taken to design a network with a strong backbone. According to Manoj, the key
strength of a network is its back-bone. The group's various centers are connected by 2 Mbps or 4
Mbps leased lines.
Manoj said the design considerations not only included high bandwidth availability but also the fact
that a single point of failure should not result in lines going down.
The group realized that it had to enter into the retail space, have local regional presence, and provide
alternate channels to the customer. They needed a solution whereby they could offer services across
the country.
"Centralizing the operations was not the solution, but centralization of data was. We had already
centralized some of the operations but we still had some branch applications running independently
which were not centralized and had ATMs which were stand-alones. Two major criteria considered
before designing were not only the network, but also the infrastructure available in our country," said
Manoj.
In the past, the infrastructure here was such that a company could not rely on leased lines completely.
So ICICI needed backups on ISDN and VSATs, along with the 64 Kbps leased lines. "The leased
lines were too expensive then, now the lines are better, more stable and offer good connectivity. The
cost has also come down by around 15 percent."
Manoj opined that what was really important was to have a world class data center and centralize
everything in one place, as that's where the network can be used at the maximum. To ensure 24x7
service access and connectivity to customers one needs to have reliable backups and a robust network
in place. From a business perspective, the main reason to go in for a network was centralization of
data, provide all channels of communication and at the same time provide anytime, anywhere
banking. "The problem we faced with our legacy systems was that they were stand-alone systems and
the data from one branch was not available with another branch."
These problems led us to the new design of the hub and spoke architecture.
The big solution
What ICICI was looking for was a robust network, which would enable it to offer services at the
retail level throughout the country. The in-house ICICI Infotech was the obvious choice for
consultation. The ICICI Infotech team designed the initial network topology in 1999. The team had
put forward a series of designs, not radically different from each other.
Eventually, a design with a mix of VSATs, leased-lines, radio-links and ISDN was selected. A mixed
design was selected because of the disparate locations of the group across the country. There were
different technical problems in different locations and the next best available solution had to be
included.
"The basic topology has withstood over the years. What we have today is still the basic architecture
with just new additions in terms of just more bandwidth," said Manoj.
The advantage in a hub and spoke architecture is that multiple nodes (spokes) are connected with a
hub location through a ring of single-mode fiber. Each hub-node connection can consist of single or
multiple wavelengths (lambdas), each carrying a full Gigabit Ethernet channel. Protection from fiber
cuts in the ring is achieved by connecting the hub and nodes through both directions of the optical
ring. Service provider Gigabit Ethernet metro access rings are the main applications for this
architecture. And another advantage is that nodes can be added to the network more easily.
Methodology
The most important aspect to setting up a network is to have a good relation between the technology
consultant (network integrator), the vendor and the client.
"The vendors in the market are more or less capable of giving the same results, like the same amount
of redundancy or strength of the network," said Manoj. "What really matters is the relation between
the three. If there is harmony amongst the three, then better results will be achieved."
The client plays the most important role as he has very low time to market, and delivery is required at
the earliest.
"A series of products are available in the market. As the time to market is so short, we (ICICI
Infotech) select the products available in the market and integrate them. This takes care of 98 percent
of the solution requirement and then we build the other two to three percent around it and deliver the
perfect solution to the client," explained Manoj.
The Network
As we said before, the network follows a hub and spoke architecture—a mix of VSATs, leased lines,
ISDN and radio links. It has around 800 leased lines, about 600 VSATs, approximately 800 ISDN
lines and multiple 34 Mbps lines.
The network supports the ICICI group offices, banks, branches, and over 1000 ATMs. There is a
primary site from where spokes go out to the regional branches and the other offices. The secondary
site has the disaster recovery system.
There are around eight hub locations, which have 3, 4 or 8 Mbps lines as per the requirements for
connecting to the branch and regional offices.
High-end Cisco routers and switches have been deployed for connectivity. The network is monitored
using HP OpenView and CiscoWorks. Over 30 portals are operating using a highly secure state-ofthe-
art security architecture, which consist of firewalls, intrusion detection systems, virus protection
and various other tools.
The main production site is at Mahalaxmi, Mumbai (the primary site), and has been built to
international standards.
The disaster recovery site (the secondary site) is located at ICICI towers in Bandra-Kurla complex,
Mumbai and is used for replication of data. A distance of 25-30 kms separates the two centers and
they are linked with two 34 Mbps leased lines. To ensure reliability and 24x7 availability, the leased
lines pass through separate exchanges.
Before the data moves on to the leased lines, it passes through two CNT storage directors that convert
this data into WAN-related traffic before it is sent on the leased line to the other data center. The
high-speed leased lines make it possible to synchronize data in real-time between the two centers.
Hardware at both these sites varies from low-end NT servers to the high-end SUN E 10K along with
12 terabytes of data storage at each end connected through a SAN. The group's facilities management
team manages over 9,500 desktops, 500 servers and works around the clock. CA Unicenter is used
for managing the helpdesk, desktops and servers, asset management, software delivery and remote
control.
Unix is the preferred OS for most of the hardware while most of the databases use Oracle with a few
on Sybase and MS SQL. Over 200 databases are supported with 24x7 processing. The state-of-the-art
technology architecture adopted by ICICI Bank needed robust security, and this was designed by
qualified experts from its Systems Security Cell. This security design includes preparation,
implementation and maintenance of the Systems Security policies and procedures across all systems,
ensuring general user awareness about these policies and enforcing the policies through systems
audits. The security cell has developed several tools, which are the first of its kind to address several
vulnerabilities on Unix, NT and MS-Exchange. The system security is audited by KPMG.
Challenges
Once the network was up, ICICI Infotech faced the challenge of ensuring smooth operation and
minimum downtime. Manoj agrees glitches cannot be avoided and while one has to try and prevent
these, one also has to think about the growth of the network, in line with business expansion.
"No walk is very smooth. Glitches are, and will always be there," said Manoj. "What was of prime
importance was to keep pace with the business and its expansions. Technical problems are not
difficult to handle—there is always a solution to them but other problems like the existing
infrastructure of the country, the individual business needs are very taxing."
According to Manoj, the real challenge came while designing and deploying the network, as the team
had to view business processes at a very micro level. They had to identify the exact areas where the
business needed to be expanded, a nd then find the best suitable option to connect to those locations.
The ICICI VSAT network is large, with almost a thousand nodes. Keeping it going turned out to be
an even bigger challenge for the group. The entire network is monitored from one center. Any error
in the network at any point is rectified in a short span of time and the system is up and running with
minimum downtime.
Another challenge was to keep pace with business growth. "The only technological challenges we
face are in terms of the quality of the lines, as they are not same all the time. Typically, the router and
switch software is written assuming a certain quality of the line. As a result, if the quality of the line
is not stable and fluctuates, the systems do not function efficiently. Ensuring the required line quality
is a major challenge. An obvious solution to this is to interact and talk with the vendors and get it
customized for an Indian client's requirements," explained Manoj.
Manoj reiterates that it's important for the vendor and the client to have a good rapport so that they do
not just provide the client with boxes but change the operating system (and other relevant software)
as and when needed.
The basic topology has not changed. "Initially we had started with connecting seven locations. Today
all the centers and offices are connected making virtual banking a reality," said a proud Manoj.
Benefits
With the centralization of data all applications are controlled, modified and administered from one
location. The network has enabled the bank to shift from traditional banking to virtual banking thus
offering modern banking services to its customers. All backend applications run from a centrally
located data center. This eliminates duplication of processes like backend operations, training of staff,
administration cost, and other system related costs at branch levels. Clients can avail of anytimeanywhere
banking on the Net and make use of their ATM cards at any of the ATM centers across the
country. Considerable amount of cost has been saved as the backend operations of regional offices
have been eliminated. The data for all the customers is centralized and processed from the centrally
located data center. Information for any ICICI client will be available at any of the ICICI branches.
Questions
1. What was the strategy adopted by the ICICI Bank for Development of
Banking ? How automation helps the Banking Services?
2. Cost factor has become important in banking services. Give your
comments. Lessons learned from the above case study.
CASE STUDY 2 (20 Marks)
Age Banking in Baharain
When a leading bank in Bahrain went shopping for a comprehensive banking solution, it chose
CMC's TC/4.
Using CMC's state-of-the-art total banking solution, a leading bank in Bahrain is providing its
customers the full range of e-age value-added banking services via the internet, mobile phones and
ATMs. TC/4 has given the bank a technological edge over the competition and streamlined its
operations across all branches.
Client
A leading bank in Bahrain providing retail and commercial banking services. It has several branches
and ATMs in Bahrain and operates an overseas branch in Abu Dhabi.
It offers its customers one-stop banking services, including personal and corporate banking, foreign
exchange and money market instruments, and fixed yields to variable returns investment.
The brief
The bank needed a robust system to deliver the latest value-added services to its customers to replace
its existing banking system/technology.
The broad requirements were:
Centralised banking solution
Interfaces to existing systems
Disaster recovery solution
Internet banking solution
The solution
CMC has successfully developed, customised, and implemented application software for a number of
Institutions in the financial sector in India and abroad. These include banks, mutual funds, stock
exchanges, and insurance companies. By virtue of its impressive track record and previous
implementation at the Bahrain bank, CMC was the natural choice for the enhancement of its existing
system.
Product
TC/4© is a highly secure, extensively parameterised, multi-currency, multi language system that
provides rich core banking functionality. The system has a fully integrated and highly flexible multicurrency
general ledger. The system can be interfaced to a multitude of new-age delivery channels
such as ATMs, remote terminals, kiosks, internet banking, tele-banking, e-cheques and other delivery
and payment systems. The open framework provides immense scalability and allows easy integration
with external systems such as treasury, trade finance dealing, asset liability management systems, etc.
TC/4 provided precisely what the bank was looking for. It was customised to suit the bank's
requirements and is being implemented at the bank in Bahrain by the CMC team.
Strengths
Provides anywhere, anytime banking 24 X 7
Interface possible at central level for various delivery mechanisms (internet banking,
tele-banking and ATM's)
All branches, although geographically spread out, yet connected to the central server.
Introduction of products and services online, real-time, based on market requirements,
enables the bank to have a cutting edge over its competitors
Multi-lingual support allows the user to have screens and reporting in any
language. Manages financial risks and identifies revenue opportunities
Gives the bank's position at a glance
Strengthens bank's market position through innovations using new delivery channels
Implementation of TC/4
CMC has been one of the leading system integrators in India since a very long time. It has perfected
the methodology for smooth implementation of large-scale financial systems. The implementation is
being done in the following sequence :
Gap Analysis - involved the study of additional functional requirements of the
bank Customisation of TC/4 based on gap analysis
Development of interfaces to external
system Pre-shipment acceptance test by the
bank Site acceptance test
Data conversion and
Migration Training to the bank
staff Pilot branch roll out
Transition to new system
Benefits
Any time, anywhere banking
Interface possible at central level for various delivery mechanisms like internet banking,
tele banking, ATM's etc.
On-line bank-wide MIS
Centralised control from the host site and enforcement of
procedures Ease of addition of new branches
Cost effective disaster recovery setup
Easy introduction of new products/services at the bank
level Automated inter-branch reconciliation
Data warehousing support
Requirement of technical expertise only at the central site
Questions
1. What were the requirements of bank ?
2. What is the message from the above case study?
CASE STUDY 3 (20 Marks)
Financial Risk Management at Union Bank of Switzerland
One of the largest investment managers in the world, UBS had four major segments. UBS Wealth
Management & Business Banking, UBS Global Asset Management, UBS Warburg (Investment
Banking) and UBS Paine Webber (wealth management for private clients. UBS served institutional
investors and high-net-worth individuals by offering a range of products and services including
mutual funds, asset management, corporate finance, and estate planning. UBS also provided
securities underwriting services, mergers & acquisitions advice and traded in fixed-income products,
and foreign exchange. The company also provided traditional banking services. To strengthen its
asset management capabilities, UBS had bought RT Capital Management (renamed Brinson Canada),
the institutional asset management business of RBC Financial Group, Canada. UBS also had plans to
expand its private banking services in Europe. UBS had more than 69,000 employees operating in
more than 50 countries. ....
Background Note
Businessmen in Winterthur, Switzerland, formed the Bank of Winterthur in 1862 for trading,
financing railroads, and operating a warehouse. In 1912, the bank merged with the Bank of
Toggenburg (formed in 1863) to create Schweizerische Bankgesellschaft -- Union Bank of
Switzerland (UBS).
UBS expanded in Switzerland, buying smaller banks and adding branches. Though it was hit hard by
the Depression, the bank benefited from Switzerland's neutrality in WWII, collecting deposits from
both Jews and Nazis. Expansion in Switzerland continued after the war with the purchase of
Eidgenossische Bank of Zurich. In 1946, the bank opened an office in New York.
UBS continued to grow by acquisitions in the 1950s. By 1962, it had 81 branches. In 1967 it opened a
full-service office in London. During the 1970s, UBS established several securities underwriting
subsidiaries abroad. But the firm's UK brokerage business was hit hard by the 1987 US stock market
crash. Over the next two years, losses continued, prompting an overhaul of the London operations.
Then the bank's US operations were badly affected by the collapse of the junk bond market in 1990.
Notwithstanding these setbacks, UBS set up offices in Paris, Singapore, and Hong Kong and took
over Chase Manhattan's (now J.P. Morgan Chase) New York money management unit in 1991. The
firm also continued to expand within Switzerland, buying five more banks to boost market share and
strengthen its branch network. But these acquisitions left UBS with overlapping operations and a
bloated infrastructure when recession hit. Falling real estate values left the bank with a heavy load of
nonperforming loans.
In 1994, as profits plummeted, stockholder Martin Ebner, tried to gain control of UBS. After failing
in his attempt to have president Robert Studer charged with criminal fraud, he almost thwarted
Studer's election to the chairmanship.
UBS launched a major reorganization in 1994 by consolidating its consumer credit operations. The
next year it joined with Swiss Life/Rentenanstalt to offer insurance products through its bank
network.In 1996, after rejecting Credit Suisse's merger bid, UBS began another major reorganization.
The bank reduced the number of domestic branches and wrote off billions of francs in bad loans,
leading to the bank's first loss ever.
In 1998 UBS merged with Swiss Bank Corp in one of the most celebrated mergers in banking
history. The bank lost $1.6 billion after the Long-Term Capital Management hedge fund went
bankrupt in October 1998. This prompted Chairman Mathis Cabiallavetta to resign.
As difficulties in integration of the pre-merger entities continued in 1999, UBS retreated from riskier
markets, selling some $2 billion in real estate, and its 25% stake in Swiss Life/Rentenanstalt. That
year, UBS bought Bank of America's European and Asian private banking operations and Allegis
Realty Investors, a US real estate investment management firm. In 2000, UBS reorganized yet again
and bought US broker Paine Webber (now UBS Paine Webber).
Questions
1. What do you understand by Financial Risk ?
2. How banks can tackle the risk in their business?
3. Is real estate management a risky sector in banking?
4. What is the message of the above case study?
CASE STUDY 4 (20 Marks)
END TO END RETAIL BANKING SOLUTIONS FOR A JAPANESE BANK
One of the top ten commercial banks in Japan with total asset base of US$ 120 billion.
The key challenges facing the Bank were to:
Streamline existing business processes and improve customer service to cater to surge
in business volumes.
Align business operations and technology in tune with its new vision. The Bank had
more than 40 disparate application packages that coexisted.
Some of them were interconnected while some were standalone. In addition, there were
around 20 interfaces to external systems or networks, on which the operations depended.
Achieve a reduction in overall operations processing and technology costs over a period
of time.
Leverage existing infrastructure with new components that addressed the demanding market
requirements and still enable reduction in overall operational costs. By virtue of being
fragmented, the current corporate systems, although functional, are not very efficient. Also,
these were legacy systems on older generation technology, with in-house development
taking place over several decades and therefore difficult and expensive to maintain.
Retain existing customers
Attract new customers
Reduce time-to-market for new products
Strengthen management information systems
Improve operations and processes
Reduce costs, improve bottom-line and stakeholder rewards
i-flex proposed FLEXCUBE to provide an integrated, scaleable and open platform solution
with multiple access points to:
Provide a Multi-currency General Ledger and a flexible, scalable and integrated end-to-end
Banking platform to support new, strategic and complex Japanese Retail Banking products.
Enable multiple new delivery channels (Internet Banking, 7 X 24 ATM, Mobile Banking,
Tele banking and Call centers and Point of Sale Terminals), allowing the Bank to reach out
to new target segments and customers in the quality conscious and complex Japanese market.
Provide Business intelligence and analytics to equip the Bank to access information
and analyze customer profitability, product profitability and credit risk management.
Customer Centric Front-end
The entire front-end has been made customer-centric. The retail customer, irrespective of transaction
or channel now has just one identifier, which enables access to all delivery channels. The browser
based front-shows the customer’s entire relationship with the bank in a summary screen. This shows
the customer’s total holdings at the moment in the bank, including DDA, TDA, loans, mutual funds
etc., at a level consolidated by the above account types. This can be drilled down multiple levels for a
detailed view of the customer relationship.
Support for the entire spectrum of delivery channels
Complete support for all delivery channels including branch, ATM, Telephone, Internet and
Mobile Phone.
Complex Network Interfaces
Interfaces with Zengin (interbank remittance network internal to Japan), RTGS systems, Bank of
Japan Net (BoJNet) for settlements, as well as a host of other networks for Debit Cards and ATMs.
Interbank connectivity enables the customers to transfer funds between accounts over a selection
Of banks.
Real Time FX rates to enable FX trading
Real time access to the customer for foreign exchange rates round-the-clock. This system takes rate
feed from standard market rate feed vendors
and creates the Retail Offer Rate for the customer. This offer rate is the exchange rate that the
customer gets at the time of doing FX transactions from any channel. This rate is computed real-time
24x7, using market feed, spread, positions, customer ratings and other parameters. The customer can
even leave orders to sell JPY when the exchange rate crosses a pre-set threshold.
Business Intelligence and Decision support capabilities
Provide analytical tools to the bank in the areas of Credit risk, Product and Customer profitability and
Financial Reporting. This is built into the data warehouse component of the FLEXCUBE suite. This
will take data from the systems, and apply pre-defined analytical models to them to provide a DSS to
the management.
I-flex acts as a one stop shop for the Bank. The phased implementation solution not only addresses
the application implementation but also comprises value added services such as:
Business process re-engineering strategy.
Deployment of multi-skilled project teams parallel working to address the different
components.
Training and consultancy to bring the users up the new technology learning curve.
Consultancy on data migration, Japanese language etc.; and joint project teams that
would undertake the translation efforts.
Complete one-stop solution for immediate and long-term needs.
Multiple delivery channels support.
National Language (Double byte) support.
Existing customers also get access to Internet delivery channels.
Comprehensive Business intelligence, Analytics and management information systems.
Modular architecture enables phased implementation in line with current priorities with
minimum operational dislocation.
Local support.
Platform independence.
Globally enriched products and best business practices.
According to the Bank’s spokesperson: We chose FLEXCUBE because it offered us a rich set of
features and a very flexible platform to build new product capabilities for our customers. It supports
customer service through branches and remote channels. As a partner, an i-flex solution has acquired
depth of knowledge and extensive experience in banking technology to help us customize
FLEXCUBE for the Japanese business environment and roll it out rapidly.
Questions
1. What was the plan of Japanese Bank for
Customers?
2. How customers were with the solution?
3. Was there any cost impact?
4. Important lessons from the above case study?

The exchange rate and forward rate of rupee against US dollar on 3 rd November

The exchange rate and forward rate of rupee against US dollar on 3 rd November

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BANKING MANAGEMENT
Total Marks: 80
Note : All Questions are Compulsory
Each Question Carries Equal Marks
Q.1) The exchange rate and forward rate of rupee against US dollar on 3
rd
November, 2008 is given below:
(20 marks)
Spot rate 1 US dollar Rs 45.36
One month forward 3.72%
Three months forward 3.27%
Six months forward 2.76%
Twelve months forward 2.26%
Calculate the forward rate, forward premium rate and swap rate from the given data.
Q.2) In May beginning you decide that shares in X Ltd. will rise over the next month or so. The current price
is Rs 100 and you hope that the shares will be at Rs. 150 by the end of July. Give your comments if the
Option is traded and if the option is not traded. Make assumptions.
(20 marks)
Q.3) (15 marks)
A) The unit price of TSS scheme of a mutual fund is Rs 10. The public offer price (POP) of the unit is Rs
10.204 and the redemption price is Rs 9.80.
Calculate
i) Front-end load and
ii) Back-end load.
B) Mr. A can earn a return of 16% by investing in equity shares on his own. Now he is considering a recently
announced equity based mutual fund scheme in which initial expenses are 5.5 percent and annual recurring
expenses are 1.5 percent. How much should the mutual fund earn to provide Mr. A a return of 16%
(5 Marks)
Q.4) The closing price of the stock of Veryfine Ltd. at the stock exchange for 20 successive days was as
follows: (20 Marks)
Day 1 2 3 4 5 6 7 8 9 10
Closing
25
26
25
24 26 26
28
26
25
27
Price(Rs.)
Day 11 12 13 14 15 16 17 18 19 20
Closing
27 25 26
28
26
26 24 25 26 25
price(Rs)
You are required to calculate a 7 day moving average of stock price of the company and comment on its short-term
trend

Describe the Delphi method of sales forecasting whatsapp 91 9924764558

Describe the Delphi method of sales forecasting


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1. Discuss the objectives of Production Planning and Control.

2. What do you understand by Control phase? Explain the activities under this phase.

3. What are the different demand patterns on which the sales forecasting is based? Explain.

4. Describe the Delphi method of sales forecasting.

5. What is work study? Explain excess time.

6. Explain pre-production procedures with examples. 

7. What is inventory management? Explain the systems of inventory management.

8. What is E.R.P. ? Describe different uses and benefits of E.R.P.

9. What are production control techniques? Explain in detail.



Psychology


Marks: 80 Marks


SECTION A — (4 × 5 = 20 marks)
Answer any Four of the following.
1. Discuss the merits and limitations of naturalistic observation.
2. Discuss the functions of endocrine system.
3. Discuss the role of constancy in perception.
4. Explain the types of memory.
5. Explain the role of reward and punishment in learning.
6. Define stress and its reaction to stress.
7. What are the factors influencing the severity of stress?
8. Explain proactive and retroactive interference.


SECTION B — (4 × 15 = 60 marks)
Answer any FOUR questions.
9. Discuss about the various schools of psychology.
10. Explain the principles of classical conditioning in detail.
11. Evaluate the various techniques of assessing personality.
12. Explain the trait that characterizes a creative person.
13. Explain Fechner's law in detail.
14. Elucidate the historical development of intelligence testing.
15. Explain about meditative techniques.



Quantitative Techniques

Please attempt any one question out of section A and any 10 questions out of Section B. The section A is for 20 Marks and Section B is for 80 Marks (8 Marks X 10 Questions)
Total Marks - 100
Section A

1. Distinguish between decision making under certainty and decision making under uncertainty. Mention certain methods for solving decision problems under uncertainty. Discuss how these methods can be applied to solve decision problems.

2. Distinguish between probability and non-probability sampling. Elucidate the reasons for the use of non-probability sampling in many situations in spite of its theoretical weaknesses.


3. What are models? Discuss the role of models in decision-making. How can you classify models on the basis of behavior characteristics?


4. What are matrices? How are determinants different from matrices? Discuss few applications of matrices in business.


Section B
Write short notes on any ten of the following:
(a) Concept of Maxima and Minima
(b) Types of classification of data
(c) Pascal Distribution
(d) Multi-stage sampling & Multi-phase sampling
(e) Box-Jenkins Models for Time Series
           (f) Determinant of a Square Matrix
           (g) Primary and Secondary Data
           (h) Bernoulli Process
          (i) The Student's t Distribution
          (j) Use of Auto-correlations in identifying Time Series
          (K) Absolute value function
           (l) Quantiles
          (m) Criteria of pessimism in decision theory
          (n) Cluster vs. Stratum
          (o) Moving average models

          (p) Step function
          (q) More than type ogive
          (r) Subjectivist's criterion in decision making
          (s) Double sampling
          (t) Auto regressive models

Communicating in a Crisis CASE STUDY ANSWER WHATSAPP 91 9924764558

Communicating in a Crisis

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 As a manager how do you improve workers perception in the organization?




Organizational Behaviour

 Max. Marks:  80




Answer any 8 questions. All questions carry equal marks

1.      As a manager how do you improve workers perception in the organization?


2.      Explain the factors affecting individual differences.


3.     Write a short note on Hawthorne studies.


4.      Discuss the need for studying OB.


5.      Briefly explain defensive mechanisms.


6.      Explain the factors influencing individuals’ personality development.


7.      Explain two factor theory of motivation.




8. How do you create and sustain organizational culture.

9. Explain the Managerial grid leadership style of Blake and Mouton.



  10.  Explain the various sources of attitudes formation.


11.  What is self concept? How you defend yourself from various environment problems.

•••



 Principles and Practice of Management


Communicating in a Crisis

Overview Valley High School, situated in Kodaikanal, was established in 1980 and is owned by a well respected charitable trust. It overlooks a lake and is a modern building equipped with state-of-the-art facilities. The total student enrolment is 2000, out of which more than 50% are girls and the rest boys. The students are all from affluent, educated families. The school has established a good reputation for itself, thanks to the consistently good performance of students in the public examinations. The school is headed by a lady Principal and also has a couple of Supervisors and a team of 25 teachers. The teachers have had extensive experience, are well qualified and are known for their commitment to imparting quality education to students. Due to the recent heavy monsoons, the school was faced with the problem of flooding, with water entering the rooms on the ground floor and water seepage on the terrace. Since repair work had to be done, the school had to be closed for a couple of weeks. The work was carried out by reputed contractors, but the building still looks a little run down.
The crisis the school had just reopened after this two week break. The same morning, a fire suddenly broke out on the third floor and spread to other floors, blocking the stairways. There was widespread panic, as the children started jumping off the balconies, injuring themselves in the process. The Principal and staff had a tough time trying to calm down the children and take control of the situation. Fire engines were called and several of them arrived and began their fire fighting operations. In the meanwhile, many parents also arrived and tried to enter the building to speak to the Principal. The phones were ringing continuously. There was total chaos.

Question 1 :- How communication crises arise?
Question 2 :- What Principal should do to calm down the angry parents?
Question 3 :- How school will regain its reputation? What services school should provide in order to maintain its reputation?






Case Study 2

Case Study on The power of Non-Verbal Communication

The Power of Nonverbal Communication Soon after I graduated from engineering college, I accepted a position with the Sundaram Foundry, a medium-sized firm located in a small town in Tamil Nadu. It was a good position, since I was the assistant to Mr. Vishwanath, the General Manager and president of this family owned company, although there were many technical problems, the work was extremely interesting and I soon learnt all about the foundry business. The foundry workers were mostly older men and were a closely knit team. Many of them were related and had been in the foundry for several years. Therefore, they felt that they knew the business in and out and that a technical education had no value. In fact, Mr. Vishwanath had mentioned to me even at the time of my joining, that I was the only engineer ever to be employed in the foundry. He also let me know that the foundry workers, although a good group, were very clannish, since they had been working together for several years. Therefore, it would probably take them some time to accept me. I introduced myself to the group of foundry workers, a few days after my joining. As I went around in turn, I felt them eyeing me coldly. As I went down the main aisle of the foundry, I heard them talking to each other in low voices and laughing. I found their behavior to be very childish and felt that it was best to ignore these signs of hostility. I thought that if I ignored them, they would automatically stop these antics. A few weeks after this incident, I happened to visit the enamel shop. As I entered, I noticed a worker cleaning the floor with a hose, from which water flowed at high pressure. I was aware that it was the practice to clean the shop at least once a week. I turned my back on the worker and was busy near a dipping tank, when I suddenly felt the force of a stream of water hitting me. I was almost knocked down by the pressure and slipped on the wet floor. When I turned around, the worker looked away in the other direction, as if he had not noticed this happening. However, I was pretty sure that he had intentionally turned the hose on me.


Question 1 - What message did the foundry workers and the new engineer convey to each other through their non-verbal behavior?

Question 2 - Mr. Vishwanath, the General Manager and President, was not often present at the foundry. What could this non-verbal behavior mean to the workers and the new engineer?

Question 3. How could the engineer, the foundry workers and Mr. Vishwanath be more effective, both verbally and nonverbally?


Question 4. What do you suggest that the engineer should do, after the hosing incident?



Case Study 3

BS GETS A D-PLUS ON DIVERSITY FROM MULTIETHNIC COALITOIN

On February 3, 2000, President and CEO of CBS Leslie Moonves signed a pact with Kweisi Mfume, president and CEO of the national association for advancement of colored people (NAACP), who had joined forces with the Hispanic media coalition, and the American Indians in film and television to request the CBS help to increase Indians in film and television to request that CBS help to increase ethnic presence in the television industry. The agreement stipulated the CBS would increase minority participation both on and off screen by June 30.

In April 2000, CBS announced the appointment of Josie Thomas to the newly created position of senior vice president of Diversity at CBS Television. Her job was to improve outreach and recruitment, hiring, promotion, and monitoring practices in all divisions of CBS. That fall Moonves announced that 16 of the 21 CBS shows, including news magazines, would prominently feature minorities. “We think we are a leader in this area,” Moonves said “We think we are ahead of the curves”

Despite Mooves’s Statement that as “broadcasters, we believe strongly that it is our duty to reflect the public that makes up our viewing audience,” there were many who did not feel the company was sincere in its efforts to improve hiring practices. The national Hispanic Foundation for the Arts criticized CBS for not scheduling “American Family,” A pilot drama about middle – class Hispanic family. Moonves said “American Family” simply did not fit in CBS’s schedule, since there were already too many strong dramas planned. He said he took the unusual step of allowing the show’s producer to pitch the CBS-developed networks but no one picked it up. Meanwhile, the June 30 deadline had come and gone without much outward sign of change at CBS television.

Josie Thomas is committed to CBS’s new mandate for multicultural diversity. Twelve of CBS’ prime time series will have minorities in permanent roles and other series will have minority in recurring role. Fore of the network’s shows- C.S.I., the district, the fugitive and welcome to New York have minorities in leading roles.

Since signing the agreement, CBS has established a strong working relationship with national minority supplier council in order to help minority supplier council and women’s businesses. The company has bolstered its internship program to include paid internships on the west coast, pairing up interns with their areas of interest, Such as finance or entertainment. There are 10 minority interns in the program. Moreover, CBS has now made diversity a factor in employee job performance evaluation. “Each area of the network has developed a detailed plan for diversity,” said Thomas. “Manager will be reviewed with respect to their diversity efforts and that will be a factor in compensation decisions.” Ms. Thomas noted that Ghen Maynard, an Asian American Pacific Islander, had just been promoted form director to vice president of alternative programming for the entertainment division.

“Will all believe there is a long way to go,” Thomas said. “What I have found is there are some things that already exist that are positive, such as news magazines having minority anchors. We think ‘city of angels’ renewal was an important step. The ratings were mediocre to low, and we did feel the program was a risk. It says a lot about our commitment”

In June 2001, the coalition gave the Big 4 Broadcast Networks (all of whom had signed an agreement) a report card for their efforts to diversity shows on – air and behind the scenes. CBS got a D-plus.

Mr. Nogales, of the National Hispanic Media Coalition, said he was disappointed “We expect progress; we signed for progress” “The numbers in comparison to last year actually look better” Nogales says. “There have been gains for people of color. There was movement. But it has to be movement across the board, not just for one group.”  He is referring to the fact that most of the gains have been made by black actors, writes and producers. Black actors appear as regular in at least 19 of the six major networks’30 new prime-time series. Hispanics shows up in only eight, Asians in five and Native Americans in one.

The pressure being put on the networks- including threats of “boycott” and legal action – is having results. At CBS the number of minority writers and producer has more than tripled, from four to fourteen, including six executive or co executive producer however, obstacles to a fully integrated future remain serious-particularly because of misconceptions about the nature of the television audience and about the way pop culture works. Network executive worry that “ghetto shows” might promote stereotypes. They wonder if shows like The cosby show are “black” enough. Then again, they think that casting too many minorities may drive white viewers away. Some network executives are afraid to cast minority actors in “negative” roles because they may be criticized for it minority writers, who have been getting more work lately, wonder if they are not just “tokens”; and despite some progress it is still almost impossible for Hispanic actor to get non- Hispanic roles.

Both the NAACP and the coalition have been battling discrimination for years. CBS is just finding out that a profound change toward pluralism can take place only with true insight on the part of management. CBS spokesperson Chris Ender says “We have made tremendous strides to increase diversity on screen, behind the camera and in the executive suites. However we certainly recognize that more can be done and more will be done.”

As far as Nogales is concerned. “It’s still a white guy’s world,” and the june 2001 statics for network television prove he is right.







Questions
Question 1:- What advantages would accrue to CBS if it becomes a more diverse workplace?

Question 2:- Where would you have placed CBS on the organizational diversity continuum and where would you place CBS now? Why?

Question 3:- Which approach (es) to pluralism best sums up the diversity policy that is being developed at CBS? Explain

Question 4:- How do the attitudes of management at CBS as depicted in your case study affect the company’s progress toward forming a more diverse workforce? Explain.






 Case Study 4

McDonald’s Listening Campaign

At the end of 2002, the world's largest quick service retailer made its first ever quarterly loss and faced a number of challenges. It responded by launching its Plan to Win program, part of a global strategy to modernize the business, followed by the Listening Campaign in the UK. Here, Ali Carruthers explains how the two initiatives were linked in the UK, and the impact The Listening Campaign has had on communication, culture, image and media perception.

 In 2003, things were looking bleak for McDonald's. Its share price was the lowest it had been in a decade and it faced a series of seemingly insurmountable problems: It was demonized by the UK media in the fierce debate raging over obesity; it faced huge competition on the high street; and it was suffering under a wave of Anti-Americanism in the wake of the wars in Afghanistan and Iraq.
Added to this was the fact that the restaurants themselves were beginning to look dated and UK health lobbyists were determined to push home the message that McDonald's food was bad for people.
Speaking earlier this year to the BBC, the UK CEO Peter Beresford said: "We had taken our eye off the customer, we were not customer focused, we were not customer driven. And so we reorganized and regrouped. We decided we had to stop and take stock of where we were. We had to be better, but we had to change the way we were running this business."
The Plan to Win
The senior management put their heads together and devised the Plan to Win program, which went public in the last quarter of 2003. A key part of its focus was a shift to more choice and variety foods, with salads appearing permanently on the menu for the first time in the organization's history. Key restaurants began to receive make over and a supporting advertising campaign with international stars was planned, all of which were intended to turn the food chain's image around.
But just as things were beginning to look up for the organization, trouble raised its head again in the shape of the documentary film "Supersize me," which in turn re-ignited the obesity debate in the media. It was then discovered that one of the salads McDonald's was marketing contained more calories than one of its hamburgers. The UK press reacted with predictable glee and once again McDonald's was in the spotlight for all the wrong reasons.
The Listening Campaign. The company responded promptly. Working with agency Blue Rubicon, the in-house communication and media relations team devised the Listening Campaign. It made the most of the arrival of new UK CEO Peter Beresford in July 2004, building on his personal credibility and that of McDonald's with the Listening Tour. Beresford spoke directly to customers in focus groups, met with franchise holders and with employees in 12 UK cities over the space of six weeks, starting at the end of October.
The key ingredient was listening to customers and staff and then showing the results of this. "Part of the reason [for doing it] was that we had to introduce Peter very quickly to employees, customers and stakeholders," says head of internal communications AIi Carruthers. "It was also signaling that he'd continue to work to change our culture and lead the drive for a real transparency of approach. We've been building on that work ever since."
Focus groups for stakeholders

The communication team made the most of Beresford's time by booking ahead so that local franchisees could meet him when he travelled to regional centers for customer focus groups. Next, Listening Groups were created for the company's regional offices with corporate rather than restaurant-based employees taking part. Initial meetings were centered around three classic focus group questions:
* What works?
* What would you change?
* How would you change it?
In each session, six to 10 employees took part and the sessions lasted around two hours. After the first session, an action plan was drawn up and fed back to the employees in a second round of focus groups. Then the agreed proposed changes were put in place by the organization.
Proposed changes put in place
A range of short, medium and long term actions have been instigated as a result of the focus groups. These include a firm commitment to hold monthly town-hall sessions to regularly address key issues within the organization. "We've agreed to use these sessions to feature various departmental heads," says Carruthers.
"That's so people can put names to faces, understand the organizational structure better and get an understanding of what goes on outside their own departments." The company has also committed itself to involving a new group of employees every six months, and to being more transparent about its promotion process and how people are assessed for promotion. It now holds regular Plan to Win meetings, which are related to the global strategy. "We're using the town-hall sessions to communicate the global strategy to thebroader office group rather than just senior management so there's a wider understanding of what we're doing," says Carruthers.
The company has also committed to a peer-nominated quarterly recognition scheme for the regional and head offices. It's planned that the town halls will also be used in the recognition scheme. "People need to say well done to each other and be acknowledged by the senior team," says Carruthers.
A change in company culture
According to Carruthers, the strategy has been recognized globally - a drive for greater face-to-face communication, more transparency, a growth in leadership behavior and accountability. "Basically we've been trying to make people feel they're able to ask questions," she says. "There's nothing wrong with challenging the status quo as long as it's done in a constructive and respectful way. If we can use some of those ideas we can probably make it a more enjoyable place for everyone to work."
There's no doubt that the Listening Campaign has had an impact on the senior team and general employees alike. Carruthers has had feedback from both groups and believes the exercise has been an eye-opener for the senior team: "They frequently mention experiences they've had in those groups. There's nothing quite like hearing issues for yourself; the good ones and the more awkward ones."
The feedback from focus-group participants has been very good; employees say they feel listened to and think their feedback is being taken on board. "They feel confident to ask questions or send e-mails directly to people they thought wouldn't have listened to their suggestions previously. It's changing the culture. Anything that builds trust and transparency is good. Now it's about delivering on the changes that we said we'd make."
A hotline to the CEO
A hotline to the CEO has made the company's drive for transparency and commitment to employees even more credible. The "Ask Peter" e-mail address was established when Beresford took up his post and has seen a fair amount of traffic. "It's word of mouth - people see that it's well responded to," says Carruthers. She sees it as important to be straight with employees about how e-mails are dealt with and who sees them. "We're very up-front about the fact that I see all e-mails as well as Peter, but if we forward them to other departments, they'll be anonymous."
A combination of high and low technology adds to the feeling of personal contact: Beresford will often answer e-mails with a hand-written reply. In one famous instance he replied to nearly 100 in one week. "It doesn't always happen that way, but it's these things that make a difference. People see it's coming from him and it's quite a personal touch."
Committing to communication, A new round of Listening focus groups with fresh employees is due to kick off in October. The whole cycle of questions, action-planning and feedback will be replayed. "We're working with a new group of employees because we want to keep changing and avoid having a formalized council of volunteers," says Carruthers. "They'll look at what they think has happened so far, whether anything could have been done differently and then we'll hold a review of the proposals."
It's a genuine commitment to keep the focus groups running on an ongoing basis. Carruthers is also expecting that the flexibility and fresh new faces will ensure that new topics arise: "They're things that inevitably come up along the way and get added to the agenda for change. We just need to follow them through and then tell people the results."
The results
Since Beresford's Listening Tour there's been a turnaround in the media coverage of McDonald's, which has been much more positive. The Listening Campaign is changing the internal culture of the company and its focus group cycles are becoming permanent two-way communication channels.
Results back in August this year from the last employee survey showed that internal communication is now ranked by employees as number four out of 25 departments. "The communications strategy has helped people become aware of who we are and what we do," says Carruthers. The Listening Campaign has also helped McDonald's raise its profile externally, as it was nominated in this year's UK Chartered Institute of Public Relations Excellence Awards and short-listed for Best Use of Media Relations in the PR Week Awards.





Questions

Question1. Based on this case, develop guidelines for improving communication with each of different stakeholders, through better listening.

Question 2:- What are the essentials for the effective communication?

Question 3:- Write about McDonald marketing plan which they have implemented for the success?

Question 4:- Do the SWOT analysis of following:-

• McDonald
• Food Industry

What are the needs for demand forecasting? ANS WHATSAPP 91 9924764558

What are the needs for demand forecasting?

ANSWER SHEETS PROVIDED WHATSAPP 91 9924764558 OR MOBILE 91 9447965521

Managerial Economics
Total Marks - 80
Answer any FIVE Questions. All Questions carry equal marks

1. Managerial Economics is the application of Economic Theory to business management. Discuss. [16]

2. What are the needs for demand forecasting? Explain the various steps involved in demand forecasting. [16]

3. Define production function. How is it helpful while taking output decisions? [16]

4. (a) ' The monopolist represents one man industry’? Comment and discuss how equilibrium position can be attained by the monopolist.
(b) Use appropriate diagrams to supplement your answer. [10+6]

5. (a) Define partnership and explain its salient features and limitations.
(b) What are the qualities of a good partner? [8+8]

6. What are the components of working capital? Explain each of them. [16]

7. Give a brief account on the important records of Accounting under Double entry system and discuss briefly the scope of each. [16]

8. (a) From the information (given with attachments), calculate [16]
i. Debt Equity ratio
ii. Current ratio
(b) Calculate Interest Coverage ratio from the information (given with attachments) .
A.



Marketing Management

Max. Marks : 80

Instructions :
(1) Attempt any five questions.
(2) All questions carry equal marks.

Q.1) Define Marketing Management. Discuss its importance and scope in today's
dynamic Competitive Environment.

Q.2) What is 'Product Life Cycle' ? How Marketing Mix Decisions have to
be adjusted at different stages of PLC (Product Life Cycle) ?

Q.3) Explain various pricing strategies a firm can adopt.

Q.4) What is Product Mix ? Explain various Product Mix Strategies with suitable
examples.

Q.5) Discuss various cultural issues involved in International Marketing.

Q.6)
(A) What is Consumer Buying Behaviour ?
(B) Explain various steps involved in Buying Consumer Goods.

Q.7) Write short notes : (Any Two)
(a) Promotion through International Exhibitions and Trade Fares
(b) Use of Internet as a Marketing Tool
(c) Channel Conflicts




OPERATIONS MANAGEMENT

Maximum Marks: 100

Note: Attempt any five questions. All questions carry equal marks. Assume any missing data suitably.

1. (a) Draw a systems view diagram of any service organization of your choice. Identify its various components. Explain its interdisciplinary nature. 10
(b) What are the major characteristics of a Production system? Discuss some of its upcoming issues that provide economies in production and efficiency in the performance of the system. 10

2. (a) Explain with examples, how the TQM concept can integrate design engineering, manufacturing and service. 10
(b) What are process capability studies ? Explain the process capability index with applications to a real life example. 10

3. (a) Compare traditional process planning with Computer Aided Process Planning (CAPP). Also explain a generative CAPP system. 10
(b) Explain the objectives of Total Productive maintenance. Give its importance. Also comment on the concept of TPM promotion. 10

4. (a) Why is forecasting required in operations management ? Discuss the concept of forecast error as applied to different conditions. 10
(b) How are quantitative models of forecasting different from qualitative models ? Discuss in detail time-series model as used for forecasting. 10

5. (a) What is facility planning ? Explain with examples different types of layouts as used in manufacturing organisations. 10
(b) Discuss work measurement as a process to establish task time. Explain the various techniques for developing time standards. 10

6. (a) Explain just in time manufacturing with the help of examples. Discuss its advantages and disadvantages. 10
 (b) For an independent demand inventory model, derive the equation for Economic Order Quantity. List all assumptions. 10


7. Write short notes on any four of the following: 4x5=20
(a) OPT
(b) Break even analysis
(c) Lean manufacturing
(d) Kanban system
(e) Line of Balance for Production Control
(f) Purpose of aggregate plans.


 

FINANCIAL ACCOUNTANCY CASE STUDY ANSWER PROVIDED WHATSAPP 91 9924764558 OR MOBILE 91 9447965521

FINANCIAL ACCOUNTANCY CASE STUDY ANSWER PROVIDED WHATSAPP 91 9924764558 OR MOBILE 91 9447965521
FINANCIAL ACCOUNTANCY
Total Marks: 80
CASE 1
M/S EXCEL-TECH ELECTRONICS
M/s. Excel – tech Electronics, a consumer electronics outlet, was opened two years ago in Delhi. Hard work and personal attention shown by the proprietor, Mr. Sam, has brought success. However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bank credit cards. Mr. Sam is now considering a new policy of offering installment sales on terms of 25 per cent down payment and 25 per cent per month for three months as well as continuing to accept cash and bank credit cards.
Mr. Sam feels this policy will boost sales by 50 percent. All the increases in sales will be credit sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent. The sales projections for this year without the new policy are given in Exhibit 1.
Exhibit 1 Sales Projections and Fixed costs
Month
Projected sales without installment option
Projected sales with installment option
January
Rs. 8,00,000
Rs. 10,00,000
February
4,00,000
6,00,000
March
3,00,000
4,50,000
April
2,00,000
3,00,000
May
2,00,000
3,00,000
June
1,50,000
2,25,000
July
1,50,000
2,25,000
August
2,00,000
3,00,000
September
3,00,000
4,50,000
October
5,00,000
7,50,000
November
5,00,000
15,00,000
December
8,00,000
12,00,000
AN ISO 9001 : 2008 CERTIFIED INSTITUTE
Total Sales
48,00,000
72,00,000
Fixed cost
2,40,000
2,40,000
He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a 2 per cent fee is paid, and 33.33 per cent on installment sales. Also, for short term seasonal requirements, the film takes loan from chit fund to which Mr. Sam subscribes @ 1.8 per cent per month.
Their success has been due to their policy of selling at discount price. The purchase per unit is 90 per cent of selling price. The fixed costs are Rs. 20,000 per month. The proprietor believes that the new policy will increase miscellaneous cost by Rs. 25,000.
The business being cyclical in nature, the working capital finance is done on trade – off basis. The proprietor feels that the new policy will lead to bad debts of 1 per cent.
Questions
(1) As a financial consultant, advise the proprietor whether he should go for the extension of credit facilities.
(2) Also prepare cash budget for one year of operation of the firm, ignoring interest. The minimum desired cash balance & Rs. 30,000, which is also the amount the firm, has on January 1. Borrowings are possible which are made at the beginning of a month and repaid at the end when cash is available.
(3) Give your views about M/s. Excel’s situations.
(4) If you were Mr. Sam, what will you do?
CASE 2
SAFEDRIVE TYRE LTD
SAFEDRIVE Tyre Ltd manufacturer's tyres under the brand name “Super Tread‟ for the domestic car market. It is presently using 7 machines acquired 3 years ago at a cost of Rs. 15 lakhs each having a useful life of 7 years, with no salvage value.
After extensive research and development, SAFEDRIVE Tyre Ltd has recently developed a new tyre, the „Hyper Tread‟ and must decide whether to make the investments necessary to produce and market the Hyper Tread. The Hyper Tread would be ideal for drivers doing a large amount of wet weather and off road driving in addition to normal highway usage. The research and development costs so far total Rs. 1,00,00,000. The Hyper Tread would be put on the market beginning this year and SAFEDRIVE Tyres expects it to stay on the market for a total of three years. Test marketing costing Rs. 50,00,000, shows that there is significant market for a Hyper Tread type tyre.
As a financial analyst at SAFEDRIVE Tyre, Mr. Mani asked by the Chief Financial Officer (CFO), Mr. Tyrewala to evaluate the Hyper-Tread project and to provide a recommendation or whether or not to proceed with the investment. He has been informed that all previous investments in the Hyper Tread project are sunk costs are only future cash flows should be considered. Except for the initial investments, which occur immediately, assume all cash flows occur at the year-end.
Smoothedrive Tyre must initially invest Rs. 72,00,00,000 in production equipments to make the Hyper Tread. They would be depreciated at a rate of 25 per cent as per the written down value (WDV) method for tax purposes. The new production equipments will allow the company to follow flexible manufacturing technique, that is both the brands of tyres can be produced using the same equipments. The equipments is expected to have a 7-year useful life and can be sold for Rs. 10,00,000 during the fourth year. The company does not have any other machines in the block of 25 per cent depreciation. The existing machines can be sold off at Rs. 8 lakh per machine with an estimated removal cost of one machine for Rs. 50,000.
Operating Requirements
The operating requirements of the existing machines and the new equipment are detailed in Exhibits 11.1 and 11.2 respectively.
Exhibit 11.1 Existing Machines
 Labour costs (expected to increase 10 per cent annually to account for inflation) :
(a) 20 unskilled labour @ Rs. 4,000 per month
(b) 20 skilled personnel @ Rs. 6,000 per month.
(c) 2 supervising executives @ Rs. 7,000 per month.
(d) 2 maintenance personnel @ Rs. 5,000 per month.
 Maintenance cost :
Years 1-5 : Rs. 25 lakh
Years 6-7 : Rs. 65 lakh
 Operating expenses : Rs. 50 lakh expected to increase at 5 per cent annually.
 Insurance cost / premium :
Year 1 : 2 per cent of the original cost of machine
After year 1 : Discounted by 10 per cent.
Exhibit 11.2 New production Equipment
 Savings in cost of utilities : Rs. 2.5 lakh
 Maintenance costs :
Year 1 – 2 : Rs. 8 lakh
Year 3 – 4 : Rs. 30 lakh
 Labour costs :
9 skilled personnel @ Rs. 7,000 per month
1 maintenance personnel @ Rs. 7,000 per month.
 Cost of retrenchment of 34 personnel : (20 unskilled, 11 skilled, 2 supervisors and 1 maintenance personnel) : Rs. 9,90,000, that is equivalent to six months salary.
 Insurance premium
Year 1 : 2 per cent of the purchase cost of machine
After year 1 : Discounted by 10 per cent.
The opening expenses do not change to any considerable extent for the new equipment and the difference is negligible compared to the scale of operations.
SAFEDRIVE Tyre intends to sell Hyper Tread of two distinct markets:
1. The original equipment manufacturer (OEM) market: The OEM market consists primarily of the large automobile companies who buy tyres for new cars. In the OEM market, the Hyper Tread is expected to sell for Rs. 1,200 per tyre. The variable cost to produce each Hyper Tread is Rs. 600.
2. The replacement market: The replacement market consists of all tyres purchased after the automobile has left the factory. This markets allows higher margins and SAFEDRIVE Tyre expects to sell the Hyper Tread for Rs. 1.500 per tyre. The variable costs are the same as in the OEM market.
SAFEDRIVE Tyre expects to raise prices by 1 percent above the inflation rate.
The variable costs will also increase by 1 per cent above the inflation rate. In addition, the Hyper Tread project will incur Rs. 2,50,000 in marketing and general administration cost in the first year which are expected to increase at the inflation rate in subsequent years.
SAFEDRIVE Tyre‟s corporate tax rate is 35 per cent. Annual inflation is expected to remain constant at 3.25 per cent. SAFEDRIVE Tyre uses a 15 per cent discount rate to evaluate new product decisions.
The Tyre Market
Automotive industry analysts expect automobile manufacturers to have a production of 4,00,000 new cars this year and growth in production at 2.5 per year onwards. Each new car needs four new tyres (the spare tyres are undersized and fall in a different category) SAFEDRIVE Tyre expects the Hyper Tread to capture an 11 per cent share of the OEM market.
The industry analysts estimate that the replacement tyre market size will be one crore this year and that it would grow at 2 per cent annually. SAFEDRIVE Tyre expects the Hyper Tread to capture an 8 per cent market share.
You also decide to consider net working capital (NWC) requirements in this scenario. The net working capital requirement will be 15 per cent of sales. Assume that the level of working capital is adjusted at the beginning of the year in relation to the expected sales for the year. The working capital is to be liquidated at par, barring an estimated loss of Rs. 1.5 crore on account of bad debt. The bad debt will be tax-deductible expenses.
Questions
1) As a finance analyst, prepare a report for submission to the CFO and the Board of Directors, explaining to them the feasibility of the new investment.
2) If you are the CFO of this tyre company, what decision will you take?
3) What is your opinion about purchasing new production equipment?
4) Give your views about the situation of Safedrive Tyre Company.
CASE 3
COMPUTATION OF COST OF CAPITAL OF HALCO LTD
In October 2003, Sneha Kapoor, a recent MBA graduate and newly appointed assistant to the Financial Controller of HALCO Ltd, was given a list of six new investment projects proposed for the following year. It was her job to analyse these projects and to present her findings before the Board of Directors at its annual meeting to be held in 10 days. The new project would require an investment of Rs. 2.4 crore.
HALCO Ltd was founded in 1965 by Late Shri. A. V. Singh. It gained recognition as a leading producer of high quality aluminum, with the majority of its sales being made to Japan. During the rapid economic expansion of Japan in the 1970s, demand for aluminum boomed, and HALCO‟s sales grew rapidly. As a result of this rapid growth and recognition of new opportunities in the energy market, HALCO began to diversify its products line. While retaining its emphasis on aluminum production, it expanded operations to include uranium mining and the production of electric generators, and finally, it went into all phases of energy production. By 2003, HALCO‟s sales had reached Rs. 14 crore level, with net profit after taxes attaining a record of Rs. 67 lakh.
As HALCO expanded its products line in the early 1990s, it also formalized its caital budgeting procedure. Until 1992, capital investment projects were selected primarily on the basis of the average return on investment calculations, with individual departments submitting these calculations for projects falling within their division. In 1996, this procedure was replaced by one using present value as the decision making criterion. This change was made to incorporate cash flows rather than accounting profits into the decision making analysis, in addition to adjusting these flows for the time value of money. At the time, the cost of capital for HALCO was determined to be 12 per cent, which has been used as the discount rate for the past 5 years. This rate was determined by taking a weighted average cost HALCO had incurred in raising funds from the capital market over the previous 10 years.
It had originally been Sneha‟s assignment to update this rate over the most recent 10-year period and determine the net present value of all the proposed investment opportunities using this newly calculated figure. However, she objected to this procedure, stating that while this calculation gave a good estimate of “the past cost” of capital, changing interest rates and stock prices made this calculation of little value in the present. Sneha suggested that current cost of raising funds in the capital market be weighted by their percentage mark-up of the capital structure. This proposal was received enthusiastically by the Financial Controller of the HALCO, and Sneha was given the assignment of recalculating HALCO‟s cost of capital and providing a written report for the Board of Directors explaining and justifying this calculation.
To determine a weighted average cost of capital for HALCO, it was necessary for Sneha to examine the cost associated with each source of funding used. In the past, the largest sources of funding had been the issuance of new equity shares and internally generated funds. Through conversations with Financial Controller and other members of the Board of Directors, Sneha learnt that the firm, in fact, wished to maintain its current financial structure as shown in Exhibit 1.
Exhibit 1 HALCO Ltd Balance Sheet for Year Ending March 31, 2003
Assets
Liabilities and Equity
Cash
Accounts receivable
Inventories
Total current assets
Net fixed assets
Goodwill
Total assets
Rs. 90,00,000
3,10,00,000
1,20,00,000
5,20,00,000
19,30,00,000
70,00,000
25,20,00,000
Accounts payable
Short-term debt
Accrued taxes
Total current liabilities
Long-term debt
Preference shares
Retained earnings
Equity shares
Total liabilities and equity shareholders fund
Rs. 8,50,000
1,00,000
11,50,000
1,20,00,000
7,20,00,000
4,80,00,000
1,00,00,000
11,00,000
25,20,00,000
She further determined that the strong growth patterns that HALCO had exhibited over the last ten years were expected to continue indefinitely because of the dwindling supply of US and Japanese domestic oil and the growing importance of other alternative energy resources. Through further investigations, Sneha learnt that HALCO could issue additional equity share, which had a par value of Rs. 25 pre share and were selling at a current market price of Rs. 45. The expected dividend for the next period would be Rs. 4.4 per share, with expected growth at a rate of 8 percent per year for the foreseeable future. The flotation cost is expected to be on an average Rs. 2 per share.
Preference shares at 11 per cent with 10 years maturity could also be issued with the help of an investment banker with an investment banker with a per value of Rs. 100 per share to be redeemed at par. This issue would involve flotation cost of 5 per cent.
Finally, Sneha learnt that it would be possible for HALCO to raise an additional Rs. 20 lakh through a 7 – year loan from Punjab National Bank at 12 per cent. Any amount raised over Rs. 20 lakh would cost 14 per cent. Short-term debt has always been used by HALCO to meet working capital requirements and as HALCO grows, it is expected to maintain its proportion in the capital structure to support capital expansion. Also, Rs. 60 lakh could be raised through a bond issue with 10 years maturity with a 11 percent coupon at the face value. If it becomes necessary to raise more funds via long-term debt, Rs. 30 lakh more could be accumulated through the issuance of additional 10-year bonds sold at the face value, with the coupon rate raised to 12 per cent, while any additional funds raised via long-term debt would necessarily have a 10 – year maturity with a 14 per cent coupon yield. The flotation cost of issue is expected to be 5 per cent. The issue price of bond would be Rs. 100 to be redeemed at par.
In the past, HALCO had calculated a weighted average of these sources of funds to determine its cost of capital. In discussion with the current Financial Controller, the point was raised that while this served as an appropriate calculation for external funds, it did not take into account the cost of internally generated funds. The Financial Controller agreed that there should be some cost associated with retained earnings and need to be incorporated in the calculations but didn‟t have any clue as to what should be the cost.
HALCO Ltd is subjected to the corporate tax rate of 40 per cent.
Questions
1. From the facts outlined above, what report would Sneha submit to the Board of Directors of HALCO Ltd.?
2. Give your views as the financial controller of HALCO Ltd.
3. Write about the balance sheet of HALCO Ltd.
4. If you were Sneha, what suggestion you will present in front of the management.
CASE 4
ABC LTD
ABC Ltd is an Indian company based in Greater Noida, which manufactures packaging materials for food items. The company maintains a present fleet of five fiat cars and two Contessa Classic cars for its chairman, general manager and five senior managers. The book value of the seven cars is Rs. 20,00,000 and their market value is estimated at Rs. 15,00,000. All the cars fall under the same block of depreciation @ 25 per cent.
A German multinational company (MNC) BYR Ltd, has acquired ABC Ltd in all cash deal. The merged company called BYR India Ltd is proposing to expand the manufacturing capacity by four folds and the organization structure is reorganized from top to bottom. The German MNC has the policy of providing transport facility to all senior executives (22) of the company because the manufacturing plant at Greater Noida was more than 10 kms outside Delhi where most of the executives were staying.
Prices of the cars to be provided to the Executives have been as follows :
Manager (10)
Santro King
Rs. 3,75,000
DGM and GM (5)
Honda City
6,75,000
Director (5)
Toyota Corolla
9,25,000
Managing Director (1)
Sonata Gold
13,50,000
Chairman (1)
Mercedes benz
23,50,000
The company is evaluating two options for providing these cars to executives
Option 1: The company will buy the cars and pay the executives fuel expenses, maintenance expenses, driver allowance and insurance (at the year – end). In such case, the ownership of the car will lie with the company. The details of the proposed allowances and expenditures to be paid are as follows:
a) Fuel expense and maintenance Allowances per month
Particulars
Fuel expenses
Maintenance allowance
Manager
DGM and GM
Director
Managing Director
Chairman
Rs. 2,500
5,000
7,500
12,000
18,000
Rs. 1,000
1,200
1,800
3,000
4,000
b) Driver Allowance: Rs. 4,000 per month (Only Chairman, Managing Director and Directors are eligible for driver allowance.)
c) Insurance cost: 1 per cent of the cost of the car.
The useful life for the cars is assumed to be five years after which they can be sold at 20 per cent salvage value. All the cars fall under the same block of depreciation @ 25 per cent using written down method of depreciation. The company will have to borrow to finance the purchase from a bank with interest at 14 per cent repayable in five annual equal installments payable at the end of the year.
Option 2 : ORIX, The fleet management company has offered the 22 cars of the same make at lease for the period of five years. The monthly lease rentals for the cars are as follows (assuming that the total of monthly lease rentals for the whole year are paid at the end of each year.
Santro Xing Rs. 9,125
Honda City 16,325
Toyota Corolla 27,175
Sonata Gold 39,250
Mercedes Benz 61,250
Under this lease agreement the leasing company, ORIX will pay for the fuel, maintenance and driver expenses for all the cars. The lessor will claim the depreciation on the cars and the lessee will claim the lease rentals against the taxable income. BYR India Ltd will have to hire fulltime supervisor (at monthly salary of Rs. 15,000 per month) to manage the fleet of cars hired on lease. The company will have to bear additional miscellaneous expense of Rs. 5,000 per month for providing him the PC, mobile phone and so on.
The company‟s effective tax rate is 40 per cent and its cost of capital is 15 per cent.
Questions
1. Analyse the financial viability of the two options. Which option would you recommend? Why?
2. Give your views about this situation
3. Which option is better as per current situation?
4. Write the advantage and disadvantage of Option 1 and Option 2.
CASE 5
SPIC LPG LTD
Introduction
SPIC LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domestic LPG for household consumption since 2013. The firm has a network of distributors in the districts of Gurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” and plans to expand its market to include the whole National Capital Region.
The production process of the plant consists of receipt of the bulk LPG through tank trucks, storage in tanks, bottling operations and distribution to dealers. During the bottling process, the cylinders are subjected to pressurized filling of LPG followed by quality control and safety checks such as weight, leakage and other defects. The cylinders passing through this process are sealed and dispatched to dealers through trucks. The supply and distribution section of the plant prepares the invoice which goes along with the truck to the distributor.
Statement of the Problem:
Mr. I. M. Smart, DGM (Finance) of the company, was analyzing the financial performance of the company during the current year. The various profitability ratios and parameters of the company indicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with the management of the working capital by the company. He could recall that during the past year, in spite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to non-availability of cash for making various payments. He is aware that such aberrations in the finances have a cost and adversely affects the performance of the company. However, he was unable to pinpoint the cause of the problem.
He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). After critically examining the details, Mr. Keenkumar realized that the working capital was hitherto estimated only as approximation by some rule of thumb without any proper computation based on sound financial policies and, therefore, suggested a reworking of the working capital (WC) requirement. Mr. Smart assigned the task of determination of WC to him.
Profile of SPIC LPG Ltd.
1) Purchases: The company purchases LPG in bulk from various importers ex-Mumbai and Kandla, @ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15 MT capacity tank trucks (called bullets), hired on annual contract basis. The average transportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day are received at the plant. The company make payments for bulk supplies once in a month, resulting in average time-lag of 15 days.
2) Storage and Bottling: The bulk storage capacity at the plant is 150 MT (2 x 75 MT storage tanks) and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operates for 25 days per month on an average. The desired level of inventory at various stages is as under.
 LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales.
 Filled Cylinders – 2 days average sales.
 Work-in Process inventory – zero.
3) Marketing: The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 per cylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs. 15 per cylinder is paid to the distributor on the invoice itself. The filled cylinders are delivered on company‟s expense at the distributor‟s godown, in exchange of equal number of empty cylinders. The deliveries are made in truck-loads only, the capacity of each truck being 250 cylinders. The distributors are required to pay for deliveries through bank draft. On receipt of the draft, the cylinders are normally dispatched on the same day. However, for every truck purchased on pre-paid basis, the company extends a credit of 7 days to the distributors on one truck-load.
4) Salaries and Wages: The following payments are made:
 Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month.
 Security agency – Rs. 30,000 per month paid on 10th of subsequent month.
 Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on the last working day.
5) Overheads:
 Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10th of subsequent month.
 Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month.
 Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paid at the beginning of the year.
 Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year.
 Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month.
 Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to the vendors. This includes expenditure on account of lubricants, spares and other stores.
 Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid on monthly basis on the 15th of the subsequent month.
 All transportation charges as per contracts – paid on the 10th subsequent month.
 Sales tax as per applicable rates is deposited on the 7th of the subsequent month.
6) Sales: Average sales are 2,500 cylinders per day during the year. However, during the winter months (December to February), there is an incremental demand of 20 per cent.
7) Average Inventories : The average stocks maintained by the company as per its policy guidelines :
 Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 days consumption.
 Maintenance spares – Rs. 1 lakh
 Lubricants – Rs. 20,000
 Diesel (for DG sets and fire engines) – Rs. 15,000
 Other stores (stationary, safety items) – Rs. 20,000
8) Minimum cash balance including bank balance required is Rs. 5 lakh.
9) Additional Information for Calculating Incremental Working Capital During Winter.
 No increase in any inventories take place except in the inventory of bulk LPG, which increases in the same proportion as the increase of the demand. The actual requirements of LPG for additional supplies are procured under the same terms and conditions from the suppliers.
 The labour cost for additional production is paid at double the rate during wintes.
 No changes in other administrative overheads.
 The expenditure on power consumption during winter increased by 10 per cent. However, during other months the power consumption remains the same as the decrease owing to reduced production is offset by increased consumption on account of compressors /Acs.
 Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter.
 No change in time schedules for any payables / receivables.
 The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due to statutory requirements.
Question:
1. Determine working capital of SPIC LPG Ltd.
2. Give your views about the working capital of SPIC LPG Ltd.
3. Write the real problem of this case.
4. Brief the profile of SPIC LPG Ltd.
CASE 6
GREAVES LIMITED
Started as trading firm in 2002, Greaves Limited has diversified into manufacturing and marketing of high technology engineering products and systems. The company‟s mission is “manufacture and market a wide range of high quality products, services and systems of world class technology to the total satisfaction of customers in domestic and overseas market.”
Over the years Greaves has brought to India state of the art technologies in various engineering fields by setting up manufacturing units and subsidiary and associate companies. The sales of Greaves Limited has increased from Rs 214 crore in 2006 to Rs 801 crore in 2013. The sales of Greaves Limited has increased from Rs 214 crore in to Rs 801 crore in 2013. Profits before interest and tax (PBIT) of the company increased from Rs 15 crore to Rs 83 crore in 2013. The market price of the company‟s share has shown ups and downs during 2006 to 2013. How has the company performed? The following question need answer to fully understand the performance of the company:
Exhibit 1
GREAVES LTD.
Profit and Loss Account ending on 31 March (Rupees in crore)
2006
2007
2008
2009
2010
2011
2012
2013
Sales
Raw Material and Stores
Wages and Salaries
Power and fuel
Other Mfg. Expenses
Other Expenses
Depreciation
Marketing and Distribution
Change in stock
214.38
170.67
13.54
0.52
0.61
11.85
1.85
4.86
1.18
253.10
202.84
15.60
0.70
0.49
15.48
1.72
5.67
3.10
287.81
230.81
18.03
1.11
0.88
16.35
1.52
5.14
4.93
311.14
213.79
37.04
3.80
2.37
25.54
4.62
5.17
0.48
354.25
245.63
37.96
4.43
2.36
31.60
5.99
9.67
- 1.13
521.56
379.83
48.24
6.66
3.57
41.40
8.53
10.81
5.63
728.15
543.56
60.48
7.70
4.84
45.74
9.30
12.44
11.86
801.11
564.35
69.66
9.23
5.49
48.64
11.53
16.98
- 5.87
Total Op Expenses
202.72
239.40
268.91
291.85
338.77
493.41
672.20
731.75
Operating Profit
Other Income
Non-recurring Income
11.61
2.14
1.30
13.70
3.69
2.28
18.90
4.97
0.10
19.29
4.24
10.98
15.48
7.72
16.44
28.15
14.35
0.46
55.95
11.35
0.52
69.36
13.08
1.75
PBIT
15.10
19.67
23.97
34.51
39.64
42.98
65.67
82.64
Interest
5.56
6.77
11.92
19.62
17.17
21.48
28.25
27.54
PBT
9.54
12.90
12.05
14.89
22.47
21.50
37.42
55.10
Tax
PAT
3.00
6.54
3.60
9.30
4.90
7.15
0.00
14.89
4.00
18.47
7.00
14.50
8.60
28.82
15.80
39.30
Dividend
Retained Earnings
1.80
4.74
2.00
7.30
2.30
4.85
4.06
10.83
7.29
11.18
8.58
5.92
12.85
15.97
14.18
25.12
Exhibit 2
GREAVES LTD.
Balance Sheet (Rupees in crore)
2006
2007
2008
2009
2010
2011
2012
2013
ASSETS
Land and Building
Plant and Machinery
Other Fixed Assets
Capital WIP
Gross Fixed Assets
Less: Accu. Depreciation
Net Tangible Fixed Assets
Intangible Fixed Assets
3.88
11.98
3.64
0.09
19.59
12.91
6.68
0.21
4.22
12.68
4.14
0.26
21.30
14.56
6.74
0.19
4.96
12.98
4.38
10.25
23.57
15.79
7.78
0.05
21.70
33.49
5.18
11.27
71.64
19.84
51.80
4.40
30.82
50.78
6.95
34.84
123.39
25.74
97.65
22.03
39.71
75.34
8.53
14.37
137.95
33.90
104.05
22.45
42.34
92.49
8.87
13.92
157.62
42.56
115.06
20.04
43.07
104.45
10.35
14.36
172.23
53.87
118.86
21.11
Net Fixed Assets
6.89
6.93
7.83
56.20
119.68
126.50
135.10
139.97
Raw Materials
Finished Goods
Inventory
Accounts Receivable
Other Receivable
Investments
Cash and Bank Balance
Current Assets
Total Assets
LIABILITIES AND CAPITAL
Equity Capital
Preference Capital
Reserves and Surplus
5.26
29.37
34.63
38.16
32.62
3.55
8.36
117.32
124.21
9.86
0.20
27.60
6.91
33.72
40.63
53.24
40.47
14.95
8.91
158.20
165.13
9.86
0.20
32.57
7.26
38.65
45.91
67.97
49.19
15.15
12.71
190.93
198.76
9.86
0.20
37.42
21.05
53.39
74.44
93.30
24.54
27.58
13.29
233.15
289.35
18.84
0.20
100.35
28.13
52.26
80.39
122.20
59.12
73.50
18.38
353.59
473.27
29.37
0.20
171.03
44.03
58.09
102.12
133.45
64.32
75.01
30.08
404.98
531.48
29.44
0.20
176.88
53.62
69.97
123.59
141.82
76.57
75.07
33.46
450.51
585.61
44.20
0.20
175.41
50.94
64.09
115.03
179.92
107.31
76.45
48.18
526.89
666.86
44.20
0.20
198.79
Net Worth
37.66
42.63
47.48
119.39
200.60
206.52
219.81
243.19
Bank Borrowings
Institutional Borrowings
Debentures
Fixed Deposits
Commercial Paper
Other Borrowings
Current Portion of LT Debt
14.81
4.13
4.77
12.31
0.00
2.33
0.00
19.45
3.43
16.57
14.45
0.00
3.22
0.00
26.51
9.17
19.99
15.03
0.00
3.10
0.08
24.82
38.09
4.56
14.08
0.00
3.18
0.12
55.12
38.76
4.37
15.57
15.00
17.08
15.08
64.97
69.69
4.37
17.75
0.00
1.97
0.02
70.08
89.26
2.92
20.81
0.00
2.36
1.49
118.28
63.60
1.49
19.29
0.00
2.57
1.57
Borrowings
38.35
57.12
73.72
84.61
130.82
158.73
183.94
203.66
Sundry Creditors
Other Liabilities
Provision for tax, etc.
Proposed Dividends
Current Portion of LT Dept
37.52
5.70
3.18
1.80
0.00
49.40
10.16
3.82
2.00
0.00
59.34
10.70
5.14
2.30
0.08
77.27
3.59
0.31
4.06
0.12
113.66
1.42
4.40
7.29
15.08
148.13
1.99
7.70
8.58
0.02
153.63
1.70
12.19
12.85
1.49
179.79
3.04
21.43
14.18
1.57
Current Liabilities
48.20
65.38
77.56
85.35
141.85
166.42
181.86
220.01
TOTAL LIABILITIES
Additional information:
Share premium reserve
Revaluation reserve
Bonus equity capital
124.21
8.51
165.13
8.51
198.76
8.51
289.35
47.69
8.91
8.51
473.27
107.40
8.70
8.51
531.67
107.91
8.50
8.51
585.61
93.35
8.31
23.25
666.86
93.35
8.15
23.25
Exhibit 3
GREAVES LTD.
Share Price Data
2006
2007
2008
2009
2010
2011
2012
2013
Closing share price (Rs)
Yearly high share price (Rs)
Yearly low share price (Rs)
Market capitalization (Rs crore
EPS (Rs)
Book value (Rs)
27.19
29.25
26.78
65.06
4.79
35.64
34.74
45.28
21.61
67.77
6.82
37.22
121.27
121.27
34.36
236.56
9.73
42.54
66.67
126.33
48.34
274.84
1.93
57.75
78.34
90.00
42.67
346.35
2.66
40.61
71.67
100.01
68.34
316.87
7.16
64.98
47.5
90.00
45.00
210.02
5.03
45.35
48.25
85.00
43.75
213.34
9.01
50.73
Questions
1. How profitable are its operations? What are the trends in it? How has growth affected the profitability of the company?
2. What factors have contributed to the operating performance of Greaves Limited? What is the role of profitability margin, asset utilization, and non-operating income?
3. How has Greaves performed in terms of return on equity? What is the contribution of return on investment, the way of the business has been financed over the period?
4. Give your view about the situation of Greaves Limited.

FINANCIAL ACCOUNTANCY CASE STUDY ANSWER PROVIDED