Ashu

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog
Samyukta Sangh, Hubli
INDUSTRY PROFILE
The Indian Textile industry is one of the largest in the world with a massive raw
material and textiles manufacturing base. Our economy is largely dependent on the
textile manufacturing and trade in addition to other major industries. About 27% of
the foreign exchange earnings are on account of export of textiles and clothing alone.
The textiles and clothing sector contributes about 14% to the industrial production and
3% to the gross domestic product of the country. Around 8% of the total excise
revenue collection is contributed by the textile industry. So much so, the textile
industry accounts for as large as 21% of the total employment generated in the
economy. Around 35 million people are directly employed in the textile
manufacturing activities. Indirect employment including the manpower engaged in the
agricultural based raw- material production like cotton related trade and handling
could be stated to be around another 60 million.
A textile is the largest single industry in India (and amongst the biggest in the world),
accounting for about 20% of the total industrial production. It provides direct
employment to around 20 million people. Textile and clothing exports account for
one-third of total value of exports from the country. There are 1,227 textile mills with
a spinning capacity of about 29 million spindles. While yarn is mostly produced in the
mills, fabrics are produced in the mills, fabrics are produced in the power loom and
handloom sectors as well. The Indian textile industry continues to be predominantly
based on cotton, with about 65% of raw materials consumed being cotton. The yearly
output of cotton cloth was about 12.8 billion ( about 42 billion ft). The manufacture of
jute products (1.1 million metric tons) ranks next in importance to cotton weaving.
Textile is one of Indias oldest industries and has a formidable presence in the national
economy as much as it contributes to about 14 percent of manufacturing valueaddition, accounts for around one- third of our gross export earnings and provides
gainful employment to millions of people. They include cotton and jute growers,
artisans and weavers engaged in the organized as well as decentralized and household
sectors spread across the entire country.
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INDIAN TEXTILE INDUSTRY STRUCTURE AND GROWTH

Indias textile industry is one of the economies largest. In 2000/01, the textile and
garment industries accounted for about 4 percent of GDP, 14 percent of industrial
output, 18 percent of industrial employment, and 27 percent of export earnings
(Hashim) Indias textile industry is also significant in a global context, ranking second
to chaina in the production of both cotton yarn and fabric and fifth in the production
of synthetic fibres and yarns.
In contrast to other major textile- producing countries, mostly small scale non
integrated spinning, weaving, cloth finishing and appareal enterprises, many of which
use outdated technology, characterize Indias textile sector. Some, mostly larger, firms
operate in the organized sector which firms must comply with numerous
government labor and tax regulations. Most firms, however, operate in the small scale
unorganized sector where regulations are less stringent and more easily evaded.
The unique structure of the Indian textile industry is due to legacy of tax, labor, and
other regulatory policies that have favored small-scale, labor intensive enterprises,
while discriminating against larger scale, more capital-intensive operations. The
structure is also due to historical orientation towards meeting the needs of Indias
predominately low income domestic consumers, rather than the world market. Policy
reforms, which began in the 1980s and continued into the 1990s, have led to
significant gains in technical efficiency and international competitiveness, particularly
in the spinning sector. However, broad scope remains for additional reforms that
could enhance the efficiency and competitiveness of Indias weaving, fabric finishing,
and apparel sectors.
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Structure of Indias Textile Industry
Unlike other major textile- producing countries, Indias textile industry is comprised
mostly of small- scale, nonintegrated spinning, and weaving, finishing and apparelmaking enterprises. This unique industry structure is primarily legacy of government
policies that have promoted labor intensive, small-scale operations and discriminated
against larger scale firms.
Composite Mills Relatively large scale mills that integrate spinning, weaving and
sometimes, fabric finishing are common in other major textile producing countries. In
India, however these types of mills now account for about only 3 percent of output in
the textile sector. About 276 composite mills are now operating in India. Most owned
by the public sector and many deemed financially sick.
Spinning: - Spinning is the process of converting cotton or manmade fiber into yarn
to be used for weaving and knitting. Largely due to deregulation beginning in the mid
1980s spinning is the most consolidated and technically efficient sector in Indias
textile industry. Average plant size remains small, however, and technology outdated,
relative to other major producers. In 2002/03, Indias spinning sector consisted of
about 1,146 small-scale independent firms and 1,599 larger scale independent units.
Weaving and Knitting:-Weaving and knitting converts cotton, manmade, or

blended yarns into woven or Knitted fabrics. Indias Weaving and Knitting sector
remains highly fragmented, small-scale and labor intensive. This sector consists of
about 3.9 million handlooms, 3,80,000 Power loom are small firms with an average
loom capacity of four to five owned by independent entrepreneurs or weavers.
Modern shuttle less looms account for less than 1 percent of loom capacity.
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Fabric Finishing: - Fabric finishing (also referred to as processing), which

includes dyeing, printing and other cloth preparation prior to the manufacture of
clothing, is also dominated by a large no of independent small scale enterprises.
Overall about 2300 processors are operating in India including about 2100
independent units 200 units that are integrated with spinning, weaving, or knitting
units.
Clothing:-Apparel is produced by about 77,000 small-scale units classified as

Domestic manufacturers, Manufacturer exporters, and Fabricators (Subcontractors)
Growth of Textile Industry

India has completed more than 50 years of its independence. The analysis of the
growth pattern of different segment of the industry during the last five decades of post
independence era reveals that the growth of the industry during first two decades after
the independence had been gradual, though lower and growth had been considerably
slower during the third decade. The growth thereafter picked up significantly during
the fourth decade in each and every segment of the industry. The peak level of its
growth has however been reached during the fifth decade i.e., the last ten years and
more particularly in the 90s. The Textile Policy of 1985 and Economic Policy of 1991
focusing in the direction of liberalization of economy and trade had in fact accelerated
the growth in 1990s. The Spinning spearheaded the growth during this period and
man-made fiber industry in the organized sector and decentralized weaving sector.
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ROLE OF INDIAN TEXTILE INDUSTRY IN THE ECONOMY

Textile industry plays a significant role in the economy. The Indian textile industry is
one of the largest and most important sectors in the economy in terms of output,
foreign exchange earnings and employment in India. It contributes 20 percent of
industrial production, 9 percent of excise collections, 18 percent of employment in
industrial sector. The sector employs nearly 35 million people and is the second
highest employer in the country.
India has several advantages in the textile sector, including abundant availability of
raw material and labor. It is the second largest player in the world cotton trade. It has
the largest cotton acreage, of about nine million hectares and is the third largest
producer of cotton fiber in the world. It ranks fourth in terms of staple fiber
production and fourth in polyester yarn production. The textile industry is also labor
intensive, thus India has an advantage.
The Key advantages of the Indian industry are :
India is the third largest producer of cotton with the largest area under cotton
cultivation in the world. It has an edge in low cost cotton sourcing compared
to other countries.
Average wage rates in India are 50-60 percent lower than that in developed
countries, thus enabling India to benefit from global outsourcing trends in
labor intensive business such as garments and home textiles.

Design and Fashion capabilities are key strengths that will enable Indian
players to strengthen their relationships with global retailers and score over
their Chinese competitiors

Production facilities are available across the textile value chain, from spinning
to garments manufacturing. The industry is investing in technology and
increasing its capabilities which should prove a major asset in the years to
come.
India has gathered experience in terms of working with global brands and this
should benefit Indian vendors.
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HANDLOOM INDUSTRY
Handlooms have been known to India right from the historic ages. The use of fabrics,
techniques created to make designer art pieces and expressing ethnicity through them
has been an integral part of Indias base. Its power is such that handloom industry
constitutes around 14 percent of preindustrial production and 30 percent of the total
export business. It is also the second largest industry in India with important
segments, such as independent power looms, modern textile mills, handlooms and
garments.
And in return to this, handloom industry became one of the most important factor for
the countrys economic growth. It is well-known that every state of India has the gift
of handloom to offer, which lends them their individuality. Even, the texture and style
of fabrics has been fascinating foreigners and increasing their knowledge about
Indias cultural heritage. In fact, our handloom industry in India is its technology of
getting out beauty from the most intricate designs of all and exemplifying richness of
the country.
From using hand spun machines to mechanical advances, the handloom industry has
travelled a lot. With the help of mechanical looms and technology, the weavers and
embroiders are able to manage tedious tasks with great efficiency. In order to boost
this industry, Indian Government has also introduced various schemes for the benefit
of weavers, farmers and fabric printers. On overall basis, handloom industry of India
has sense of unity in diversity that makes it capable of capturing hearts and senses.
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HISTORY OF HANDLOOMS
The handloom industry rolls its carpet back to the ancient time. The very first
fragment of Indian handloom was excavated from the part of Egypt. After that, finely
woven and dyed cotton fabrics were found in Mohenjo Daro.
There were some more excavations that speak of the golden history of Indian
handloom. In fact, traditional handloom style has been one of the oldest forms.
Indian handloom created special place for itself in India and abroad too. With so many
varieties of handloom from different states, India has collected a precious wealth of
innovation. After all has led to the emergence of India as most richly cultured country.
Indian handloom created a special place for in India and abroad too. With so many
varieties of handloom from different states, India has collected a precious wealth of
innovation. After all, this has led to the emergence of India most rich cultured country.
Handlooms Boards in India
It is the promotional concern and for establishing foreign market that the Indian
Government has set up various boards. The main task of such boards is to look after
the production level, export and import facet, making schemes effective and providing
necessary funds for the growth of handloom industry. Along with this, their work
process also includes providing advice to the government on the matters of
implementing new technologies of trends. All this helps in making the backbone of
handloom industry ever more strong.
All India Handloom Board
This handloom board has been formed under the leadership of Ministry of Textiles
and is responsible for advising government on the growth prospects of handloom
industry. It also tends to create various methods in enhancing the strength of
handloom sector
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All India Power loom Board

This board was also formed under the leadership of Ministry of Textiles. Its
responsibility is to advise the central ministry of the growth of power loom scheme
making for the growth of this sector.
Cotton Advisory Board
It is the representative body of Government, industries and traders, which is
constituted for advising Government on the matter of production, consumption and
marketing of cotton. Along with this, it is also responsible for maintaining liaison
between cotton textile industry, cotton growers, trade and the government.
Central Wool Development Board
This board has been formed for overlooking the production and growth of wool and
woolen industry as a whole. With the help of central Government, it is also tends to
implement various schemes and plans for the development of this industry. Its
headquarters are in Jodhpur and the board has 19 member
Jute Advisory Board
The main task of Jute Advisory Board is to advise the government on the production
and growth of jute and mesta.This board is reconstituted after every two years and
presently has a membership of 20 people.
Central Silk Board
It has been constituted for promoting the growth and development of sericulture in
India. The programs meant for the development of sericulture are initially, organized
by state government and this central board extends all kinds of facilities and help for
promoting it. Apart from this, it also helps in the research and development process of
this field.
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COMPANY PROFILE
Name:
Karnataka
khadi
Gramodyog
Samyukta
Sangh
Year of Establishment:
1975
Brand Name:
Priyadarshini Handloom
Business Type:
Manufacturing
Products/ Services:
Cotton, Home furnishings, Cotton Bed, Silk

Furnishing, Curtains, Cushion Covers etc
Competitors:
Power looms
Basis of salary:
Piece rate system
Customers:
Medium and High income people
Total show rooms:
60
Places of Showrooms:
Delhi, Kolkatta, Bangalore, Hubli, GadagBetgeri, Chennai,Hospet, Belgaum, Bellary,

Chitradurga, Banahati, Ramdurg, Davangere Etc
Bankers :
State Bank of India

State Bank of Hyderbad
The Federal Bank Limited
Canara Bank
Corporation Bank
Vijaya Bank
Syndicate Bank.
Registered Office:
Bengeri, Hubli-580031
Phone No: 08362277505
Regional Office:
No.1, Tank road,

Priyadarshini Commercial Complex
Halasuru, Bangalore-560042
Phone No: 080-25575421-425
Fax: 080-25575426
Table no: 1.1
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Board of Directors
Chairman
Sri Baburao Chinchansur
Managing Director
Smt.Seema Garg
Directors
Dr. N. Nagambikadevi
Sri S.R. Umashankar
Sri Anurag Tewari
Sri G.S. Shivswamy
Sri Amaranarayan
Sri Mohammad Mohsin
Sri Tushar Girinath
Smt Deepti Aditya Kanade
Sri N. J. Malawade
Sri Manohar G Shirol
Company Secretary
Satya Prasad
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INTRODUCTION OF THE COMPANY

The KKGSS established in the year 1975 to boost the development of handloom
industry in Karnataka and to uplift the socio-economic conditions of 13000 handloom
weavers of Karnataka.
Today KKGSS Ltd produces a wide range of handloom products so as to cater various
industries and lifestyles from high quality linen items for hospitals to fashion
statement in saris, chudidhar materials and shirts to school uniforms, home furnishing,
rugs, kitchen, table linen and the list is endless.
The KKGSS Ltd was incorporated on 3rd October 1975, under the companies Act
1956. With certificate of incorporation, No.2883 registered under the registrar of
Companies, Karnataka.
The objective of KKGSS is to promote handloom industry and to provide
employment and facilitate economic self-reliance of weavers. KKGSS has been in the
services directly with the weavers and provides raw materials and technical support to
them. KKGSS works ceaselessly to encourage and support hundreds of thousand
weavers.
The main objectives perceived on incorporation of the company mentioned in
Memorandum of Association:
To promote aid assist the rehabilitation growth and development of the
handloom industry in general and in particular of that sector of handloom
industry which is outside the co-operative sector in the state of Karnataka.
To provide financial assistance to handloom industry and all allied, ancillary,
preparatory, processing, finishing industries.
To provide assistance referred to clause 1 and 2 mentioned in the
memorandum.
To undertake manufacturing, procurement, processing, stock piling,
distribution and sale of key raw materials and stores needed by the handloom
and allied industry.
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HISTORY OF THE COMPANY
The history of Khadi almost begins from the day Mahatma Gandhi came to know
about the Charakha for the first time in 1908 when he was in London as the head of
a delegation from South Africa. He decided then and there the course he was to take
and the goal he was to pursue in his future life --devoting himself to the service of
India and freeing it from the shackles of British rule.
On his return to India from South Africa, Gandhiji chose to espouse two causes to
secure freedom for India from the of British rule, and redeem its people from the
clutches of poverty. in this great battle of his, Charakha and Khadi were to be the
wheels of his chariot and truth and non-violence his weapons. Khadi also
symbolised Indias return to its traditional occupation and revival of its once glorious
past.
Gandhijis perception of Khadi and its role in Indias freedom movement was broadbased. It was to be the instrument for realization of his dream of wiping every tear
from every eye, which, in effect, meant providing means of livelihood to every
family, and help it lead a respectable life. Though agriculture was, and even now is,
mainstay of Indian economy, it could not employ all the people in the country, given
the fact that 27 per cent of the population lived in urban areas and 73 per cent in
villages.
Having played its due role during independence movement, Khadi gradually receded
to background, perhaps, owing to the failure of the people and the governments that
followed to realize its significant role in the countrys economy. Now, Khadi forms
only one per cent of the total cloth produced in India.
Even in whatever condition Khadi is, it has shown that it is a mass employer with
least investment. The one per cent of Khadi has employed 15 lakh people in the
country.
Now, it is for the people of this country, to decide whether or not his great Institution
called Khadi should be revived and made an important part of the countrys ethos and
economy. If all of us decide to wear Khadi alone, there is a prospect of atleast 15
crore people getting employment and our country returning to that glorious period of
Indian history when our people lived happily and comfortably, with self-respect and
without being bothered by thieves, robbers and dacoits.
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MISSION
The prosperity of the weaver and the prosperity of the corporation. Its our aim to
improve economic and social status of the weaver by achieving and maintaining
quality at all levels of production which will then ensure the well being of
corporation.
Providing employment to the handloom weavers outside co-operative sector round the
year which includes supply of raw materials, technical guidance training facilities and
marketing support.
Implementing welfare schemes sponsored by Government of Karnataka and
Government of India for the benefit of the weaver. Repositioning the company from
Market Follower to Market Leader.
VISION:
To provide more and more employments to Rural Unemployed
youths under Khadi and Village Industries sector.
To Popularize Khadi and Village products world-wide.
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Figure 1.2
PRODUCTS OF THE COMPANY
Traditional Silk Saree
Silk home furnishing
Printed Silk Saree
Cotton home furnishing
Soham Shirts
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Pride Shirts
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Handloom Export Promotion council
Handloom Export promotion Council is a statutory body constituted under The
Ministry of Textiles. Government of India promoted the export of all handloom
products like fabrics, home furnishing, carpets, floor covering etc.
Features:
The saris include Suit saris (Pillow cover, quite cover), silk carpet, pillow
saris etc.
Materials: 100% pure silk, soyabean fiber
Different kinds of printed scarves are available.
Production and Marketing Centers

In 1984 the KKGSS started a production center at channapatna where artisans could
work on per piece basis. In 1980-81 this was converted to Rural Marketing service
center to impart financial and design assistance, supply of raw materials and procure
finished goods for seal in tourist handicraft showrooms. Around 1983-84, KKGSS
surveyed 900 artisan families living within 10 km radius of channapatna and identify
the poorest and most deserving artisans. KKGSS then collaborated with the Dutch
Government to build a production center in 1985-86, with common facility Center
which included 30 power lathes and housing for 126 artisan families. A standing
committee was established to allot the living quarters. Each craft persons family was
provide with a house in the complex for a rent of 40% month for 25 years. The
production center and power lathes are open to all weavers, whether they live in
compound or not, for a fee of rupees 30 per month i.e. Rs. 2/ day. Assistance is also
provide in arranging credit.
Since 1986, artisan have been living and working at the KKGSS center. KKGSS runs
a raw material depot at channapatna to supply raw material and also to serve as a
procurement agent.
In 1987, KKGSSs total procurement of lacquer ware for Karnataka Government
emporium was worth Rs.6, 42,200. This only represents 2.1% of the total estimated
lacquer ware production in the channapatna area.
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Product Diversification
Product diversification has been done and new designs/ pattern and color combination
in Woven furnishing, Bed sheets, Turkish towels, Carpets, Napkins and Chudidhar
were introduced with the design provide by NID.
a) Silk
Production has been continued in new varieties of tradition silk sarees and
around 35 new designs have been introduced for production replacing the old
design on traditional silk sarees. 50 new designs have been introduced for
printed silk sarees. Production for retail sales has been continued in varieties
of Brocade sarees, Tissue sarees, simple sarees of low cost, kanchi type
wedding sarees, embroidery, Kasuti and stone work sarees, silk and duping
fabrics in attractive colour for soham shirts.
b) Export
The corporation exportation cotton gray fabrics of 10*10s cotton variety to
M/S. Eurf Sebtex, Algeria worth of Rs. 28.29Lakh and corporation
participated in the Macef International Fare at Milan, Itlay.
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WELFARE SCHEMES
State Sponsored Schemes
Subsidized Saree Dhoti Scheme(SSDS)

The scheme was implemented in the year 1985 with the objective of providing
continuous employment to handloom weavers and to provide clothing to the
weaker section of the society at subsidized rate. The products produced and
supplied under the schemes are gray dhoti for men beneficiaries( BPL
Cardholders) and for women beneficiaries the products produced and supplied are
cotton sarees and polyester printed sarees.
Vidya Vikas Scheme(VVS)

KKGSS was entrusted with the responsibility of supplying uniforms to three
divisions (Bangalore, Mysore and Gulbarga) to the tune of Rs. 47 Crores. More
than 85% of weavers of cotton project are dependent on the scheme. More than
6000 weavers are weaving the fabrics used for the Vidya Vikas Scheme. KKGSS
is paying conversion charges of approx Rs.11 crores to weavers under the scheme.
Centrally Sponsored Scheme

House-cum-Workshed Scheme (HWS)
KKGSS is implementing the central Government Sponsored House cum Workshed
Scheme to the homeless weavers of the corporation since 1993-94, as per the
guidelines framed by the government of India. Out of sanction received from
Government of India for 444 urban and rural units, later modified to 453 units by
readjustment of urban and rural component as at the end of March 2003, 425units had
been completed.
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Third Fund Scheme (TFS)
The scheme is in operation from the year 1985. So far 5000 weavers have been
covered under the scheme. Under the scheme each weaver will contribute 8% of
his/her earning and Government will also contribute 8% as matching contribution.
Both the Contributions will be deposited in the Government treasuries of respective
places. 12% of interest is paid for deposit. The total operation of the scheme is
restricted to 15 years. After completion of 15 years, the deposited amount will be
refunded to the weavers along with interest. Apart from this weavers are also eligible
to withdraw 50% of their contribution to meet the expenses like hospitalization,
marriage of children etc.
Group Savings Linked Insurance Scheme (GSLI)
The scheme is in operation 1993-94. The scheme evisages payment of Annual
Premium of Rs.120/- per weaver out of which Rs.40/- each should be paid by
Government of India and Government of Karnataka. The balance of Rs.40/- has to be
paid by weavers. Out of 120 Annual Prremium, Rs.50/- will be treated as premium
and balance of Rs.70/- will be treated as savings. Weavers in the age group of 18-60
years are eligible.
On Expiry/ Death of weavers Rs.10,000 compensation will be awarded to the family
of the weavers.
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Chart no:2.1
ORGANISATION STRUCTURE
Chairman/Board
Managing Director
Production
Dept
Project
Inspector
Quality Control
Dept
Technical Officer
Marketing Dept
Sales Manager
Finance Dept
HRD Dept
Finance Controller Joint Director
Production Dept Production

Mang (Silk)
Production Dept
Hubli
Project
Administer
Assistance
Assistance Technical
Officer
Assistance Sales
Mang Grand-1
Project Inspector
Assistance Sales
Mang Grand-2
Purchase Dept
Account Manager
Senior A/c Manager
Weavers
Assistant Accounting
Officer
Personal Officer
Assistant (Clerk)
Assistant Personal
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Chart no:2.2
PROCESS CHART
RAW
MATERIALS
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WORK- IN
-PROGRESS
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FINISHED
GOODS

Chart no:2.3
DEPARTMENTAL STUDY
Priyadarshini Handlooms
Production Department
Quality Control
Department
Finance Department
H.R Department
Marketing Department
Purchase Department
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1) PRODUCTION DEPARTMENT
In this department production process takes place. As its handloom industry the
process of coloring the tread and bleaching the tread will take place in the factoy. The
yarn is made in the factory. After the completion of yarn and coloring tread the warp
is given to wears to make cloth. Wavers may do it in home some cloths like blackest
towels are made in factory. Based on the quantity in numbers and meters the wages
are given to wavers.
The different type of yarn are used for weaving the different type of products
like
For bed sheets, towels 2/40 count of yarn is required.
Lungees 2/80 count of yarn is required.
Sari 2/100 of yarn is required
Chart no:2.4
STRUCTURE OF PRODUCTION DEPARTMENT
Manager of Production
Project
Administrator
Technical Officer
Project Transmitter
Unit Supervisors
Weavers
Helpers
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Functions of Production Department
Receiving the grey yarn
This is the raw material for weaving cloths. Generally the KKGSS Ltd provides
the raw material, after testing through quality control lab. If the yarn is good
quality then only it is accepted and sent to its all production units. The raw
material is purchased through offering the tenders that is look after by head office.
But in certain cases the production unit is ordered to selected mills. They send
message to mills that dispatch the raw materials to quality control lab. The lab
checks the quality of yarn and send to the yarn required production units. The
purchase department is made the payment to the mills through cheques
Dyeing according to required colors
Dyeing means the process of coloring the yarns. There are different types of
dyeing namely wet dyeing, menthol dyeing and reactive dyeing. For bed sheets
reactive dyeing is used. The color selection of dyeing made by the managers and
supervisors they decide according to the market demand for which color the
demand is more and sales are also more that color dyeing is ordered.
Drying the yarn
Drying the colored yarn is done by machines. Its a process of drying the yarn for
the further use. After coloring the yarn will be wet to make is softer and dry the
machines are used to dry the yarn.
Making Warp
After the yarn is colored and dry process the treads are arranged in warp for the
processing of work. Warp is used in machines to weave the loom.
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Supplying warp to the weavers
Weavers will collect the warp from the company on the bases of their capital
amount and requirement. Then they start weaving the cloths warp is made on the
bases of the cloth they wave.
Making the required cloth out of the yarn
The yarn will be in different size and width that will help to wave the cloth
according to the requirements. There will be different machines for different
cloths weaving.
Dispatching the ready product to warehouse
After weaving the cloths the wavers will give the ready cloth to company on the
bases of quality and length as well as weight of the cloth the wages will be given
to the wavers.
WAREHOUSES
There will be two types of warehouses in which the ready as well as raw materials are
maintained in the systematic manner
Grey warehouse
Here the raw material and uncolored warehouse are maintained. Based on the
requirement the raw material will be further proceeding to the finished goods
production.
Finished warehouse
In this he is ready to sale product. These products are maintained in the 2 bin
system. According to the order and requirement the products are dispatched to
the outlets.
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QUALITY CONTROL DEPARTMENT
This is the department where the quality of raw material is checked.
Generally the KKGSS Ltd provides the raw material, after testing through
quality control lab. If the yarn is good quality then only it is accepted and sent
to its all the production units. It also include the opinion of the unit supervisor
the quality of raw material is good. The raw material is purchased through
offering the tenders
2) FINANCE DEPARTMENT
Finance Department is an important function and activity of every organization. A
separate department is created to manage the finance such department called finance
department.
The officials involved for financial department of financial department of
Priyadarshini Handlooms are
Financial controller
Assistant Manager
Accounts(Clerks)
Audit Manager
The above employees maintain all necessary records of financial statements. That will
also involves wages given to weavers and employees. Ordering yarn and supply of
yarn.
The house loan is in the HDFC Bank and the working capital on employees re raised
in Syndicate Bank.
DVH IMSR, DHARWAD
Page 26

Duties and Responsibilities of Finance Department
Handling the cash and Bank transaction.
Recording all issued and received raw materials, finished goods.
Preparing budget and comparing the actual with the budget figures and bring
to notice of management major variances if any.
Periodical reconciliation of all subsidiary book balances in control accounts.
Maintaining the statutory records such as minutes of the boards and

shareholders meeting, register of chances created on the assets of the
company, director interested register, fixed assets register investment register
etc.
Preparing and predating financial and operating results on monthly basis.
Calling the audit committee meeting periodically and discuss the efficiency of
internal control system in different areas.
Getting the accounts audited.
4. HUMAN RESOURCE DEPARTMENT

This department is also known as personal and administration department. It involve
in the development of human resource of the organization. The productivity of the
organization is increased when the organization treats the employees as an important
assets but not the liability of the organization. The same way KKGSS Ltd is involved
in encourages the weavers, employees by offering many facilities.
There are 45 workers in Priyadarshini Handlooms.
There are 150 wavers houses in Nekar Bavan, Hubli.
Sub unit has 2 workers one is accountant and other is quality control manager.
There are 3 outlets.
Each outlet has one accountant and followed by 3-5 sales representatives.
DVH IMSR, DHARWAD
Page 27

There are 2 types of training
Advance Training
This is a training given to the weavers who are well worse with the basic
knowledge of weaving. This training is given to the weavers for future up
gradation of skills. When new variety of clothes are required to be produced. And
to increase the productivity, new production techniques are taught to the weavers.
Basic Training
This is a training given to those who are completely new to the field. Generally
they dont know anything about the basic knowledge of weaving. To those people
the training is given.
5. MARKETING DEPARTMENT
The KKGSS Ltd introducing and selling its products with the brand name of
PRIYSDARSHINI HANDLOOMS the original home of handlooms. Here the
marketing department involves the showrooms. The mainly showrooms are
established in Bangalore, Hubli and Shivamogga.
80% of sales made to government for the Vidya Vikas Yojana. In the form of drill
cloth. After weaving by the weavers it sends to grey ware house, where semi finished
clothes are stored. Drill cloth is send to grey warehouse for future production because
there is need to make the coloring of drill cloth as per needed/ ordered color by the
Karnataka Primary Education Board, for its government school childrens.
Marketing the remaining 20% of sales by the JANATA AND NON-JANATA
CLOTHES. Each showroom has marketing managers are control the showrooms.
Here there is a sales manager reported all the sales and marketing news to the
marketing manager.
The marketing manager has attended the warehouse and orders the products on the
basis of needs and demand of the market. The KKGSS Ltd which is being sold
through retail out-lets or in exhibition or in some times sold in bulk quantities to other
states. Hence the marketing officials if KKGSS ltd will steady the common test and
plan production accordingly marketing steady is the key role in KKGSS Ltd.
DVH IMSR, DHARWAD
Page 28

6.PURCHASE DEPARTMENT
This is a department which is involved in the purchasing the raw materials, that is
gray yarn. The purchasing of raw material is done by the Head Office by offering the
tenders. Which applicant quotes low rate that tender is selected for supply of raw
material.After purchasing of raw material it is send to quality control department for
the checking of the quality of raw material. If the quality is standard then only it is
accepted and sends to production department. Payment to suppliers is made only
through cheques but not in cash.
Constitution of subcommittee of purchase department is involves as below
Managing Director of the KKGSS Ltd, the director on the board representing
the department if sericulture Government of Karnataka.
The director on the board representing the department of finance of the
Government of Karnataka.
The director on the board representing the department of Handlooms and
Textiles of the Government of Karnataka.
DVH IMSR, DHARWAD
Page 29

THEORETICAL BACKGROUND
RATIO ANALYSIS:
Ratio analysis is a powerful of financial analysis. A ratio is defined as the indicated
quotient of two mathematical expression and as the relationship between two or
more things. In financial analysis a ratio is used as a benchmark for evaluating the
financial positions and performances of a firm. The absolute accounting figures
respected in the financial statements do not provide a meaningful understanding of the
performance and position of a firm. An accounting figure conveys meaning when it is
related to some other relevant information. The relationship between two or more
accounting figures/groups is called financial ratio.Ratio helps to summarize large
quantities of financial data and to make quantitative judgment about the firms
financial performance.
INTRODUCTION:
Ratio analysis is a form of financial statement analysis that is used to obtain a quick
indication of a firms financial performance in several key areas. The ratios are
categorized as short-term solvency ratios, Debt management ratios assets management
ratios profitability ratios, & market value ratios.
Ratio Analysis as a tool possesses several importance feature. The data, which are
provided by financial statements, are readily available. The computation of ratios
facilitates the comparison of firms which differ in size. Ratio can be used in a font of
trend analysis to identify.
Areas where performance has improved or deteriorated over time. Because Ratio
analysis is based upon accounting information, its effectiveness is limited by the
distortions which arise in financial due to such things as Historical Cost Accounting
and inflation. Therefore, ratio analysis should only be used as a first step in financial
analysis, to obtain a quick indication of a firms performance and to identify areas
which need to be investigated further.
DVH IMSR, DHARWAD
Page 30

Objectives of the study:
The main object is to study the KKGSS the overall financial performance of KKGSS.
The sub objectives study are
To study the composition of sales
To study the composition of various segments of KKGSS.
To study the financial performance of KKGSS by using Liquidity Ratio,
profitability Ratio, Activity Ratio.
Need of the study:
Organization like KKGSS are usually not studied by research this study therefore
will be useful to understand the working of KKGSS sector.
The study was taken up the under the organization structure of KKGSS, working of
KKGSS and also evaluate the overall financial performance of KKGSS
DVH IMSR, DHARWAD
Page 31

METHODOLOGY:
I have undergone my in-plant training at KARNATAKA KHADI GRAMODYOG
SAMYUKTA SANGH (Federation) bengeri, Hubli. I have chosen the topic called
Evaluation of Financial Performance of Karnataka Khadi Gramodyog Samyukta
Sangh, Hubli as specialization in finance.
Data collection method:
Discussion and interviews with the human resources manager, purchase supervision
and other employee
Sources of data:
The data is collected from both the sources i.e.,
Primary data
Secondary data
Primary data:
Primary sources include discussion and interview with the human resources manager,
purchase supervisor and other employees
Secondary sources:
Secondary sources include the annual financial reports as well as monthly report of
the firm, routine work paper and books of the account also
DVH IMSR, DHARWAD
Page 32

The present study uses both primary and secondary data
LIMITATIONS OF THE STUDY:
The study was limited uses only ratio analysis for evaluation of financial
performance.
More in-depth analysis of financial performance was not possible due to
albescence of more data
MEANING:
Ratio analysis is powerful tool of the analysis .A ratio is defined as the indicated
quotient of two mathematical expression and as the relationship between two or
more things. In financial analysis a ratio is used as a benchmark for evaluating the
financial positions and performances of a firm. A relationship between various
accounting figures, which are connected with each other, expressed in mathematical
terms, is called accounting ratios. Ratio analysis is of the techniques of financial
analysis to evaluate the financial condition and performance of business concern.
Simply, ratio means the comparison of one figure to other relevant figure or figures.
DEFINITION:
Robert Anthony defines a ratio as simply one number expressed in terms of
anothers .
Accounting ratios are very useful as they briefly summarises the result of detailed and
complicated computerization absolute figures are useful but they do not convey much
meaning. In terms of accounting ratios , comparison of is related figures makes them
meaningful.
DVH IMSR, DHARWAD
Page 33

USES OF RATIO ANALYSIS:
There are various groups of people who are interested in analysis of financial
position of a country. They used ratio analysis to work out a particular financial
characterstics of the company in which they are interested. Ratio analysis helps
the various groups in the following manner :
1. TO WORKOUT THE PROFITABILITY : accounting ratio helps to major
the profitability of the business by calculating the various profitability ratios. It
helps the management to know about the earning capacity of the business
concern. In this way profitability ratio shows the actual performance of the
business .
2. TO WORKOUT THE SOLVENCY: with the help of solvency ratios
solvency of the company can we measured. These 5ratio shows the
relationship between the liabilities and assets. N case external liabilities are
more then that of assets of the company, it shows the unsold position of the
business in this case the business has to make its possible it repay its loans.
3. HELPFUL IN ANALYSIS OF FINANCIAL STATEMENT: ratio analysis
helps the outsider just like creditors, shareholders, debenture-holders, bankers
to know about the profitability and ability of the company to pay them interest
and dividend etc.
4. TO SIMPLY THE ACCOUNTING INFORMATION: Accounting ratios
are very useful as the briefly summaries the results of detailed and
complicated computerization.
5. HELPFUL IN COMPARATIVE ANALYSIS OF THE PERFORMANCE:
with the help of ratio analysis a company may have comparative study of its
performance to the previous years in this way the company comes true know
about its week point and be able to improve them.
DVH IMSR, DHARWAD
Page 34

LIMITATIONS OF RATIO ANALYSIS:
1. LIMITED COMPARABILIT
Different firms apply different accounting policies. Therefore the ratio of one firm
cannot always be compared with the ratio of other firm. Some firms may value the
closing stock on LIFO basis while some other firms may value FIFO basis. Similarly
there may be difference in providing depreciation of fixed assets or certain of
provisions for doubtful debts etc.
2. FALSE RESULTS:
Accounting ratio are based on data drawn from accounting records. In case that data is
correct, for ex: valuation of stock is based on very high price, the profits of the
concern will be inflated and it will indicate a wrong financial position. The data
therefore must be absolutely correct.
3. EFFECT OF PRICE LEVEL CHANGES :

Price level changes often make the comparison of figures difficult over a period of
time. Changes in price affect the cost of production, sales and also the value of assets.
Therefore, it is necessary to make proper adjustment for price-level changes before
any comparison.
4. QUALITATIVE FACTORS ARE IGNORED:

Ratio analysis is a technique of quantitative analysis and thus, ignored qualitative
analysis and which may be important in decision making. For example, average
collection period may be equal to standard credit period, but debtors may be in the of
doubt debts, which is not disclosed by ratio analysis.
DVH IMSR, DHARWAD
Page 35

HOW RATIOS ARE IS EXPRESSED?
As percentage: such as 25% or 50%. For example if net profit is Rs 25000/and the sales is Rs 100000/- then the net profit can be said to be 25% of the
sales.
As proportion: the above figures may be expressed in terms of the relationship
between net profits to sales as 1:4

As pure Number/ Times: the same can be expressed in an alternatively way
such as the sale is times of the net profit or profit is 1/4th of the sales.
DVH IMSR, DHARWAD
Page 36

DIFFERENT TYPES OF RATIOS MEANING:
1. GROSS PROFIT RATIO:
Definition
Gross profit ratio is the ratio of gross profit to net sales expressed as a percentage. It
expresses the relationship between gross profit and sales.
Components:
The basic components of the calculation of gross profits ratio are gross profit and net
sales. Net sales mean those minus sales returns.
Formula of gross profit ratio
GROSS PROFIT RATIO = ( GROSS PROFIT / NET SALES) X 100
DVH IMSR, DHARWAD
Page 37

2. NET PROFIT RATIO:
Definition:
Net profit ratio is the ratio of net profit (after taxes) to net sales. It is expressed as
percentage.
Components:
The two basic components of the net profit ratio are the net profit and sales. The net
profits are obtained after deducting income- tax and, generally, non- operating
expenses and incomes are excluded from the net profit for calculating this ratio. Thus,
income such as interest on investment outside the business, profit on sales of fixed
assets and losses on sales of fixed assets, etc are excluded.
Formula of Net Profit Ratio:
NET PROFIT RATIO= (NET PROFIT /NET SALES) X 100
DVH IMSR, DHARWAD
Page 38

3. DEBTORS TURN OVER RATIO:
DEFINITION
A concern may sell goods on cash as well as on credit is one of the important
elements of sales promotions. The volume of sales can be increased by followed
liberal credit policy the effect of liberal credit policy may result in typing up
substantial funds of firm in form of trade debtors. Debtors turn over ratio indicates the
velocity of debt collection of a firm. In simple words it indicates the numbers of time
average debtors are turn over during a year.
Formula of debtors turn over ratio:
DEBTORS TURN OVER RATIO = (DEBTORS / SALES) X100
DVH IMSR, DHARWAD
Page 39

4. FIXED ASSETS TURN OVER RATIO:
DEFINITION:
The fixed assets turn over ratio measures sales per rupee of investments in fixed
assets. The ratio is as under.
Formula of fixed assets turn over ratio:
FIXED ASSETS TURN OVER RATIO= (SALES /FIXED ASSETS) X100
DVH IMSR, DHARWAD
Page 40

5. CURRENT RATIO:
DEFINITION
Current ratio may be defined as the relationship between current assets and current
liabilities of a concern. This ratio is also known as working capital ratio.
It is a measured of general liquidity and is most widely used to make the analysis for
short term finance position or liquidity of a firm. The two basic components of the
this ratio are current assets and current liabilities. The current assets includes cash and
those assets which can be easily converted in to cash within short period of time
generally, 1 year, such as marketable securities, bills receivables, sundry debtors,
inventories, work- in- progress etc.
Formula of current ratio
CURRENT RATIO= (CURRENT ASSETS / CURRENT LIABILITIES)
DVH IMSR, DHARWAD
Page 41

ANALYSIS FOR TRADING ACCOUNT TEXTILE

Table no: 3.1
2010-2011
particulars
Retail
2011-2012
% of
total
sales
Amount
Amount
46330127
66.02
Government
10370916.81
14.78
Wholes sale
1468304.25
2.09
Outside state
12008236.05
17.11
Rate different
sales
Total
2012-2013
% of
total
sales
25062477.4 56.53
265841
2013-2014
% of
total
sales
Amount
55532353.5
0.60 17586662.28
Amount
60.79 32339468.5
0.20
0.00 9346332.15
19.31
8116158.35 18.31 18229132.66
19.96 6625028.81
13.69
6856787.45 15.47
4031720.61
70177584.15
100 44332984.85
9.09
19.25
66.80
98369
100 91348148.42
100 48409198.46
Graph no:3.1
2010-2011
OUTSIDE STATE; 17%
WHOLESALE; 2%
GOVERNMENT; 15%
RETAIL; 66%
The major contributors of sales of KKGSS are Retail sales (66.02%), Government
Sales (14.78%), wholes Sale (2.04%), outside state (17.11%)
DVH IMSR, DHARWAD
% of
total
sales
Page 42
100

Graph no:3.1
2011-12
RATE DIFFERENT SALES; 9%
OUTSIDE STATE; 18%
WHOLESALE; 15%
GOVERNMENT; 1%
RETAIL; 57%
Sales (1%), wholes Sale (15.47%), outside sales (18.31%) and Rate different
sales(9.09%)
Graph no:3.1
2012-13
OUTSIDE STATE; 20%
GOVERNMENT; 19%
RETAIL; 61%
The major contributors of KKGSS are Retail sales (60.79%), Government Sales
(19.25%), wholes Sale (0%) and Outside state(19.96%)
DVH IMSR, DHARWAD
Page 43

Graph no:3.1
2013-2014
OUTSIDE STATE; 14%
WHOLESALE; 19%
GOVERNMENT; 0%
RETAIL; 67%
Sales (0.20%), wholes Sale (19.31%) and Outside state (13.69%)
INTERPRETATION:
If we analysis the Table no1 we can infer that the major contributor of sales to
KKGSS is Retail sales which contributes on an average (63%)of sales .The
Government Sales have dropped drastically in the recent years from (14.78%) of total
sales in 2010-2011 to (0.20%) of total sales in the year 2013-14. The outside sales
have remain study as a percentage of total sales and are about (14 to19%) of total
sales
DVH IMSR, DHARWAD
Page 44

ANALYSIS FOR TRADING ACCOUNT NON TEXTILE

Table no: 3.2
2010-2011
particulars
Retail
2011-2012
% of
total
sales
amount
2012-2013
%of
total
sales
amount
9967654 59.27 9803490.19 70.58
2013-2014
%of
total
sales
amount
% of
total
sales
amount
11543125 51.92 11245157.9 66.95
Government
5810485.7 34.55
2389801.1 17.20 7648358.81 34.40 2583866.25 15.38
Wholesale
1038757.8
1262960.6
9.09 3039070.36 13.67 2750742.05 16.38

3.13
6.18
Outside state
434335.28
Rate different
sales
16816898
100 13890587.2
Total
DVH IMSR, DHARWAD
Page 45
217382.55
1.29
0
100 22230554.1
100 16797148.7
100

Graph no:3.2
2010-11
WHOLESALE; 6%
GOVERNMENT; 35%
RETAIL; 59%
Sales (34.55%),wholes Sale (6.18%),
Graph no: 3.2
2011-12
OUTSIDE STATE; 3%
WHOLESALE; 9%
GOVERNMENT; 17%
RETAIL; 71%
The major contributors of sales of KKGSS are Retail sales (70.58%),Government

Sales (17.20%),wholes Sale(9.09%) and outside sales(3.13%)
DVH IMSR, DHARWAD
Page 46

Graph no 3.2
2012-13
14%
52%
34%
The major contributors of KKGSS are Retail sales (51.92%), Government Sales
(34.40%) and wholes Sale(13.67%)
Graph no 3.2
2013-14
OUTSIDE STATE; 1%
WHOLESALE; 16%
GOVERNMENT; 15%
RETAIL; 67%
Sales (15.38%), wholes Sale (16.38%) and Outside state (1.29%)
DVH IMSR, DHARWAD
Page 47

DVH IMSR, DHARWAD
Page 48

GROSS PROFIT ANALYSIS

Table no:3.3
2010-11
Amount
2011-12
% of
Gross
profit
Amount
2012-13
% of
Gross
profit
Amount
2013-14
% of Gross
profit
Amount
% of
Gross
profit
TEXTILE 7845263.2 71.47
11740263 78.39
15943055 77.81
14346164.1 78.12
NON
3131427.6 28.53
TEXTILE
3235541
4546727
4016931.64 21.88
10976691
14975804
21.61
20489782
22.19
18363095.7
Graph no:3.3
16000000
14000000
12000000
10000000
8000000
TEXTILE
6000000
NON TEXTILE
4000000
2000000
0
Interpretation: From the table no:3 we can infer that the major contributors of Gross
profit for KKGSS is Textile which contributes on an average of (76%) of sales and the
Non textile business contributors about 24% of sales. The proportion of profit across
textile and non textile business has remained steady over the 4 year period from 201011 to 2013-14
DVH IMSR, DHARWAD
Page 49

ANALYSIS FOR P/L ACCOUNT
Table no:3.4
2011-2012
Particular
Amount % of
2012-2013
2013-2014
Amount % of
Amount % of
Amount
% of
62115.00 0.35
22630.00 0.10
85144.00
0.38
Establishment expenses 5272209.99 40.06 6633750.49 37.86 7638375.49 33.12 10762599.40
48.32
Office expenses
30.54
Organization expenses
93223.00
0.71
4194301.87 31.87 4190901.64 23.92 3947239.44 17.12 6803185.02
Maintenance
696419.25
5.29
803605.14 3.48 1261001.43
5.66
Depreciation
905286.00
6.88 2055286.00 11.73 2605286.00 11.30 2494690.25
11.20
Reserve fund
979833.18 5.59
2000000.00 15.20 3600000.00 20.55 8043804.00 34.88

Total 13161440.11
DVH IMSR, DHARWAD
17521886.31
Page 50
23060940.0
7
850595.75
22273344.06
3.82

Graph no:3.4
12000000.00
10000000.00
8000000.00
Organisation expenses
Establishment expenses
6000000.00
Office expenses
Maintainance
4000000.00
Depreciation
Reserve fund
2000000.00
0.00
INTERPRETATION:
Analysis for P/L reveals that the major expenses for the company are establishment
expenses which contributes an average of (40%), followed by office expenses (26%).
Maintenance expenses have remained steady at around 5% of total expenses, whereas,
depreciation has increased over the period from 6.88% in 2011-12 to around 11% in
the last year.
DVH IMSR, DHARWAD
Page 51

NET PROFIT ANALYSIS
Table no:3.5
2010-11
Particulars
Net profit
Total
2011-12
% of
Net
profit
Amount
19141.97
0.15
13180582.08
Amount
42641.36
2012-13
% of
Net
profit
Amount
38804.46
0.24
17564527.67
23099744.53
2013-14
% of Net
profit
0.17
Amount
16128.21
22273344.06
Graph no:3.5
Net profit
45000.00
40000.00
35000.00
30000.00
25000.00
20000.00
15000.00
10000.00
5000.00
0.00
2010-112011-122012-132013-14
INTERPRETATION:
Net profit increased from (0.15% to 0.24%) in the year 2011-12 and there after
decreased in the last 2 year (0.7%) in 2013-14.
DVH IMSR, DHARWAD
Page 52
% of Net
profit
0.07

ANALYSIS OF PURCHASE FOR TEXTILE
Table no:3.6
2010-11
Particulars
Production
Expenses
Process
Charges
Processed
Goods
Ready made
Goods
Trade
Expenses
Trade
Commission
Total
Amount
2011-12
% Of
purchase
Amount
2012-13
% Of
purchase
`20961913.26
36.92
34758024.2
42.59
3709796.74
6.53
3979317.58
4.88
13325657.89
2.34
18448158.4
7736819.27
13.62
1761905.45
Amount
2013-14
% Of
purchase
% Of
purchase
34028067.71
36.62
4.39
4233804.82
4.56
22.6
26617100.54 27.49
23633722.89
25.43
11529800.3
14.22
13641257 14.09
15424981.25
16.60
3.1
2197557.12
2.69
2.36
2216474.58
2.39
9275841.86
16.33
10689453.1
13.1
13734027.37 14.19
13386136.74
14.41
56771934.47
100
81602310.7
100
96817646.42
92923187.99
100
DVH IMSR, DHARWAD
36292232.29 37.49
Amount
4246832.99
2286196.23
Page 53
100

Graph no:3.5
40000000
35000000
30000000
25000000
Production Expenses
20000000
Process Charges
15000000
Ready made Goods
Processed Goods
Trade Expenses
Trade Commission
10000000
5000000
0
INTERPRETATION:
Analysis of purchase for Textile reveals that the major expenses are Production
Expenses which account for an average of (38.40%) followed by the expenses related
to Trade Commission which are average (15%) around followed by expenses related
to Ready made goods (16.60%) in the last 4years there Steep increased in expenses
related Process goods from (2.34% to 25.43%) in the year 2013-14.
DVH IMSR, DHARWAD
Page 54

ANALYSIS OF SALES FOR TEXTILE
Table no :3.7
2010-11
Particular
Amount
2011-12
% of
sales
Amount
2012-13
% of
sales
Income
from
4824184.55 21.48 5861756.55 21.46
Production
Trade
1035607.05 4.61 1214875.75 4.44
income
Trade
commissio 16594303.68 73.90 20230831.3 74.08
n & margin
22454095.28
100
27307463.6
100
2013-14
% of
sales
Amount
% of
sales
6898719.75
20.70
1014674.8
3.04
24950648.1
76.82 25403377.23
9
76.24
Amount
6321399.24 19.46
1206201.67
32478249.1
3.71
100
33316771.78
Graph no:3.7
30000000.00
25000000.00
20000000.00
Income from Production
15000000.00
Trade income
10000000.00
Trade
commission&margin
5000000.00
0.00
INTERPRETATION:
Analysis of sales for Textile reveals that major sources for sales KKGSS are trade
commission and margin with an average of (75.26%)followed by Income from
Production with an average of (21%)
DVH IMSR, DHARWAD
Page 55
100

ANALYSIS OF NATIONAL FLAG SALES
Table no:3.8
National flag sales
Amount
6444781.8
0
7251300.0
0
8051980.0
0
8724120.0
0
2010-11
2011-12
2012-13
2013-14
Total sales
% of National
Flag
13180582.08
48.89603328
17564527.70
41.28377446
23099744.50
34.85744182
22273344.00
39.1684338
Graph no:3.8
25000000.00
20000000.00
15000000.00
Amount
Total sales
% of National Flag
10000000.00
5000000.00
0.00
2010-11 2011-12 2012-13 2013-14
DVH IMSR, DHARWAD
Page 56

ANALYSIS OF PURCHASE FOR NON TEXTILE
Table no:3.9
2010-11
2011-12
2012-13
2013-14
Particular
Amount
% Of
purchase
Amount
% Of
purchase
Amount
% Of
purchase
Amount
% Of
purchase
Raw Materials
1080706.25
7.66
1056674.90
6.55
1207104.41
5.90
1212311.27
6.63
Production
Processing
Charges
7108220.92 50.36
227966.95
1.61
Processing goods 3400504.68 24.09

Trade Expenses
Trade
commission
421767.87
2.99
1876496.35 13.29
14115663
100
DVH IMSR, DHARWAD
7122334.95 44.18
233958.57
1.45
5389810.15 33.43
463272.10
2.87
9164890.24 44.81
335526.00
1.64
6564527.85 32.10
642376.16
3.14
8435294.90 46.13
329937.50
1.80
5164618.65 28.24
702659.25
3.84
1855326.13 11.51
2536909.46 12.40
2441316.08 13.35
16121376.8
20451334.1
18286137.7
100
Page 57
100
100

Graph no:3.9
10000000.00
9000000.00
8000000.00
7000000.00
6000000.00
Raw Materials
5000000.00
Production
4000000.00
Processing goods
Processing Charges
Trade Expenses
Trade commision
3000000.00
2000000.00
1000000.00
0.00
INTERPRETATION:
Analysis of purchase for Non Textile shows that the major items of purchase expenses
are Product expenses with an average (46.37%), Expenses related to processing goods
which an average around (29.46%) and Trade Commission which accounts on an
average around (13%) of purchase expense.
DVH IMSR, DHARWAD
Page 58

ANALYSIS OF SALES FOR NON TEXTILE
Table no:3.10
2010-11
Particular
Consumption
production
Consumption
processing
Trade income
Trade
Amount
2011-12
% Of
sales
Amount
2012-13
% Of
sales
Amount
2013-14
% Of
sales
2847177.69 26.37 4668030.29 35.96 5597087.64 34.36
4715587.29 30.75
commission & 4365321.46 40.42 4673038.84 36.00
5911629.74 36.30
profit
sales
3171500.02 20.68
555603.51 3.41
Charges
production
% Of
2698899.51 24.99 2705811.92 20.85 3585345.32 22.01
521453.80 4.02
margin
Processing
Amount
338256.44 3.13
504768.64
3.29
6310239.66 41.15
510422.95 4.73
411222.57 3.17
570085.00 3.50
534738.50
3.49
38850.71 0.36
0.00
67601.41 0.42
96614.41
0.63
10798928.76 100 12979557.42 100 16287352.62 100 15333448.52
100
DVH IMSR, DHARWAD
Page 59

Graph no:3.10
7000000.00
6000000.00
5000000.00
Consumption production
4000000.00
Consumption processing
Trade income
Trade commision &
margin
3000000.00
Processing Charges
2000000.00
production profit
1000000.00
0.00
INTERPRETATION:
Analysis of sales for Non Textile reveals that major sources for sales KKGSS are
Consumption production with an average of (22.13%) followed by Consumption
processing with an average (31.86%) and followed by Trade commission and margin
with an average of( 38.46%)
DVH IMSR, DHARWAD
Page 60

DEBTORS TURN OVER RATIO
=Debtors / Sales
Table no:3.11
2010-11
particulars
Amount
Times
2011-12
Amount
2012-13
Times
Amount
Times
2013-14
Amount
Times
Debtors 11003289.8 0.834811 2416370.98 0.13757 2526380.89 0.1094 12833927.81 0.5762012

Sales
13180582.1
17564527.7
23099744.5
22273344
Graph no:3.11
25000000
20000000
15000000
Debtors
10000000
sales
5000000
INTERPRETATION:
Debtors Turn Over Ratio decreased during the period from 0.8348 times in 2010-11 to
0.1094 in 2012-13 and has increased in the last year 2013-14. This shows that
KKGSS has shown increased efficiency in managing its debtors in the last year
DVH IMSR, DHARWAD
Page 61

DVH IMSR, DHARWAD
Page 62

FIXED TURN OVER RATIO
= Sales / Fixed Assets
Table no:3.12
2010-11
particulars Amount
Sales
Times
13180582.1
Fixed
2011-12
Amount
Amount
17564527.7
0.278733
Assets
Times
2012-13
47287549.6
DVH IMSR, DHARWAD
Times Amount
23099744.5
0.36366
48299039.4
Times
22273344
0.7189
32130358.5
Page 63
2013-14
0.736506
30241903.9

Graph no:3.12
50000000
45000000
40000000
35000000
30000000
25000000
sales
Fixed Assets
20000000
15000000
10000000
5000000
0
INTERPRETATION:
Fixed Turn Over Ratio has shown increase in trend over the last 4 year and the Ratio
has increased from 0.2787 times in 2010-11 to 0.7365 in 2013-14 this shows that the
company is showing increased efficiency in the management of Fixed Asset
DVH IMSR, DHARWAD
Page 64

CURRENT RATIO
= Current Assets/ Current Liabilities
Table no:3.13
2012-13
particulars
Amount
Current Assets
75957120.5
Current liabilities
31587105.2
2013-14
Times
Amount
2.4047
Times
75031003.59
2.6359911
28464058.2
Graph no:3.13
80000000
70000000
60000000
50000000
particulars
40000000
Current Assets
Current liabilities
30000000
20000000
10000000
0
2012-13
2013-14
INTERPRETATION:
Current ratio has shown increase in trend over the last 2 year and ratio has increased
from 2.63599 times in 2013-14 so this showing increased efficiency in the
management.
DVH IMSR, DHARWAD
Page 65

FINDINGS
Gross profit ratio of firm establishes relationship between the gross profit of
firm and net sales. The gross profit of the firm is decreasing year by year
The major contributors of Gross profit for KKGSS is Textile which contributes
on an average of (76%) of sales and the Non textile business contributors
about 24% of sales. The proportion of profit across textile and non textile
business has remained steady over the 4 year period from 2010-11 to 2013-14
Net profit ratio measures the efficiency of firm in generating revenue over
total cost of operation. Net profit of the company remained the same in the
year 2010-11 as well as 2012-13 i,e at 0.17%. The companys profitability as
measured by the net profit ratio showed a steep decline in the year 2013-14 to
(0.07%)
Analysis of sales for Textile reveals that major sources for sales KKGSS are
trade commission and margin with an average of (75.26%)followed by Income
from Production with an average of (21%)
The major sources for sales KKGSS are consumption production with an
average of (22.13%) followed by consumption processing with an average
31.86% and followed by Trade commission and margin with an average of
38.46%
Debtors Turn Over Ratio decreased during the four year period from 0.8348
times in 2010-11 to 0.1094 in 2012-13 but has increased in the last year 2013-
DVH IMSR, DHARWAD
Page 66

14. This shows that KKGSS has shown increased efficiency in managing its
debtors in the last year
Fixed assets turnover ratio it indicates the efficiency of the company in using
fixed assets towards contribution towards sales. In the year 2013-14 the
companys fixed asset turnover ratio has shown an increase which indicates
that the companys efficiency in utilization of fixed assets has increased in the
year 2013-14
Current ratio of the company shows high variability over the five years. The
ratio shows improvement in liquidity position of the company over the last
year since the ratio has increased from 2.40 in the year 2012-13 to 2.63 in the
year 2013-14.
DVH IMSR, DHARWAD
Page 67

SUGGESTION
As the gross profit ratio showing decrease trend the firm has to look into the
reasons for the same and think in terms of changing the composition of sales
so as to increase the profitability of the firm.
As the current ratio is a showing a good indicators yearly which shows it has a
best liquidity position through which it can manage its working capital
effectively.
The firm is managing its fixed assets well but it could increase its management
of fixed assets by acquiring new machineries with the latest technology to
increase productivity.
The textile business of KKGSS is contributing 76% of sales which indicates a

good sign hence the company as to think for expansion of their business in
this segment
The company needs to take some measures to improve the debtor turnover
ratio which is decreasing in the last few years.
DVH IMSR, DHARWAD
Page 68

CONCLUSION:
It was a great opportunity to have undergone the Summer In-plant project at Karnatak
Khadi Gramodyog Samyukta Sangh, Hubli. This study helped me to know how the
Textile and Non textile sector work. The study on evaluation of financial performance
of KKGSS using ratio analysis reveals that the overall financial performance of the
company in terms of various ratios is satisfactory over the four year period (2010-14).
DVH IMSR, DHARWAD
Page 69

BIBILOGRAPHY
Websites
www.kkgss.com
www.karnatakahandloom.com
www.handicraftsindia.org/handloom
Books referred
DVH IMSR, DHARWAD
Page 70

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A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Samyukta Sangh, Hubli

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

INDIAN TEXTILE INDUSTRY STRUCTURE AND GROWTH

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Weaving and Knitting:-Weaving and knitting converts cotton, manmade, or

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Fabric Finishing: - Fabric finishing (also referred to as processing), which

Clothing:-Apparel is produced by about 77,000 small-scale units classified as

Growth of Textile Industry

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

ROLE OF INDIAN TEXTILE INDUSTRY IN THE ECONOMY

The Key advantages of the Indian industry are :

labor intensive business such as garments and home textiles.

their Chinese competitiors

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

All India Power loom Board

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Cotton, Home furnishings, Cotton Bed, Silk

Piece rate system

Medium and High income people

Total show rooms:

Delhi, Kolkatta, Bangalore, Hubli, GadagBetgeri, Chennai,Hospet, Belgaum, Bellary,

State Bank of India

No.1, Tank road,

Table no: 1.1

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Sri Baburao Chinchansur

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

INTRODUCTION OF THE COMPANY

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Silk home furnishing

Printed Silk Saree

Cotton home furnishing

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Production and Marketing Centers

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

DVH IMSR, DHARWAD

A Study on Evaluation of Financial Performance of Karnatak Khadi Gramodyog

Subsidized Saree Dhoti Scheme(SSDS)

Vidya Vikas Scheme(VVS)