The executive Summary

Layering Reports – The executive summary 1- PurdueOnline

Should be written last, to save time and error.

State purpose Explain procedure Be direct Fairly short State Conclusion and recommendation

Emergence of Liquid Fund as a Prominent Option for

Treasury Management

Executive Summary

All organisations maintain current accounts in banks to ensure prompt deposit and withdrawal of

money, while the money in the current account does not fetch any return. With increase in

competition and squeezing of profit margins, measures were required to utilize the money lying idle

in the current account without hampering the prompt flow of money.

Liquid funds provide the solution for utilization of the idle money in a tax effective way along with

easy withdrawal and deposit of funds. An investor can invest money in this fund for any period of

time, minimum being a day. The money is invested in call money market where the liquidity is very

high along with a high safety of the principal.

The objective of the project was to find out the viability of the Liquid Funds as a substitute to current

account along with achieving of sales target.

Principal Mutual Funds is a subsidiary of Fortune 500 Company, Principal Financial Group of USA, it

started its operations in India in the year 2000 as an asset management company and it plans to

venture in pension funds as and when the industry is open to private sector by the regulatory

authorities.

Institutions having idle cash are the potential investors; hence software companies were the most

obvious prospects as they have a considerable time gap between the receipts and the payments.

Cooperative societies are also a source for investments, as they require a higher safety of their

principal amount and are also bound by the Cooperative Society Act. Companies from other fields

who were likely to have surplus cash flow were also chosen. High Net Worth individuals were also

considered as potential investors as they hold large amounts in liquid form before they invest it in a

long term scheme or any suitable venture. Financial decisions are taken mainly by the Chief

Financial Officer and sometimes the Chairman or the Chief Executive Officer of the organisation so

they were contacted for the project.

The treasury decisions are taken by all the companies at their head offices so the head offices of the

companies had to be contacted. The Database of Principal Mutual Funds, the website of NASSCOM,

Bangalore Yellow Pages, Bangalore Telephone Directory and personal contacts were used to find out

the companies having their head offices in and around Bangalore.

Almost hundred and fifty companies were contacted and meeting with officers of almost thirty

companies was done. Regarding investments, the outcome was mixed as people still perceive banks

to be safer than a mutual fund company; in some cases as per the company policies the investments

were restricted only to banks. Companies preferred to invest in those funds which had a higher

brand value along with a consistent high performance. As the representation was made to all the

companies for the first time on behalf of Principal Mutual Funds it was not possible to attract

investments from them in such a short period.

Brand awareness for Principal mutual funds needs to be done. Aggressive direct marketing should

be resorted to and cold calls should be made all around the year to compensate for low brand

awareness. Established financial advisors should be appointed as distributors to forward the

financial product.

Problem Statement

The objective of the project is to find out the viability of the Liquid Funds as a substitute to current

account along with achieving of sales target.

Institutions having idle cash are the potential investors; hence software companies were the most

obvious prospects as they have a considerable time gap between the receipts and the payments.

Cooperative societies are also a source for investments, as they require a higher safety of their

principal amount and are also bound by the Cooperative Society Act.