hind project main copy

HIND ENGINEERING WORKS

PES&T’SBELGAUM INSTITUTE OF MANAGEMENT STUDIES

Degree CollegeNehru Nagar, Belgaum

Bachelor of Commerce (Corporate Secretaryship)

[B.Com (CS)] 5th Semester.

2007-2008

Belgaum Institute of Management Studies- Degree college


People’s Education Society & Trust.BELGAUM INSTITUTE OF MANAGEMENT STUDIES

Degree College.(Affiliated to Karnataka University, Dharwad)

A Project Report on:“Corporate Exposure and Learning”

Undertaken at:HIND ENGINEERING WORKS

Dharwad road, Belgaum-590 016A project report submitted in partial fulfillment of the requirement for

the award of‘Bachelor of Commerce (Corporate

Secretaryship)

Submitted by:Miss. Vinuta.G.Urolagin

BIMS, Belgaum-10.



INTERNAL GUIDE EXTERNAL GUIDE Mr. Arif Shaikh Mr. Wasim Todewale

CELL: 9886378897 CELL: 9986213320

DECLARATION

I do hereby state and declare that this project

entitled “Specialization in Finance” has

been prepared by me during the year 2007-2008

under the guidance of Mr. “Arif Shaikh”

Principal of BIMS degree college, Belgaum.

I also hereby declare that this project report

has not been submitted at any time to any other

university or Institute for the award of any degree.

Miss.Vinuta.G.Urolagin.

Date: 23-01-2008

Place: Belgaum



ACKNOWLEDGEMENT

Its human bond duty to acknowledge all those personalities who contributed immensively to their effort and guided us in right direction.

I owe my deep sense of gratitude to Mr. Arif Shaikh

(Principal) of Belgaum Institute Of Management Studies

Degree College for his kind support.

I take immense pleasure in acknowledging the

intellectual and administrative guidance to me by Mr.Arif

Shaikh. I express my gratitude and sincere thanks for his

constant helpful and encouraging attitude during the report

preparation.

I am very much obliged and would like to thank Mr.

Ulhas Kakatkar Managing Director for giving me an

opportunity to undergo training in this class organization.

I owe my sincere gratitude to Mr.Wasim Todewale

and Mr.S.R .Kulkarni for giving me a golden opportunity to

serve the organization and for their respective help without

which the project would not have been a successful one.



I also express thanks to all the faculty members for

their valuable suggestions, encouragement, guidance and

support. I would also like to thank all the respondents for

extending the required timely help.

I would like to thank my family who were a constant

source of encouragement and provided me with the

necessary resources.

I would lastly thank all my friends and persons who

were directly and indirectly involved with their help and

guidance in successful completion of my study.

EXECUTIVE SUMMARYThe project work is a requirement as a part of the

curriculum of the Fifth Semester B.Com (CS). This report is

the result of the project work undertaken at the HIND

ENGINEERING WORKS. It is well known throughout India. It is

pioneer in the field of manufacturing Crankshafts since its

inception. It has well planned and adequately equipped

manufacturing set up where every infrastructure is available, to

design, develop and to produce a mega range of equipments. It

has very good in house product design and development

capabilities to meet the requirements of the customers.



The area of the study is Finance. In finance particularly I

have selected topic of this project report as “A Study on Working

Capital Management of Hind Engineering Works”. This project

report contains all the facts and figures given by the finance

manager of Hind Engineering Works. Hence, this project is not

applicable to other branches.

TABLE OF CONTENTS .

Industry Overview

Evolution/Introduction

SWOT Analysis

Company Overview

Evolution / Introduction

Plants profile.

Company profile



Vision, Achievements, Awards.

SWOT Analysis

Departments

Functional Area Analysis

Analysis based on 7-S model

Design of the study

Objective

Scope

Limitations

Research design and Methodology

Findings and suggestions

Conclusion

Annexure



INDUSTRY

OVERVIEW.



AN OVER VEIW OFMANUFACTURING INDUSTRIES

MEANING:

Manufacturing industries refers to the activities concerned with the creation of form

utility. That is their activities concerned with the conversion of raw material or semi-finished

goods into finished goods. Conversion of raw jute into jute manufactures, conversion of cotton

into cotton textiles, production of sugar from sugar cane, production iron and steel from iron

ore etc. are examples of manufacturing industries. The products of extractive industries are the

raw material of manufacturing industries.

Manufacturing industries may be sub divided into four types, which are as follows:

Analytical industries.

Synthetic industries.

Processing industries.

Assembly-line industries.

1) ANALYTICAL INDUSTRIES:

Analytical industries refer to those manufacturing industries, which produces many

types of products by analyzing and separating the same basic raw material into different

products. For example oil refining is an analytical industry. In oil refining the same crude oil is

analyzed and separated into different products like diesel, oil, kerosene, lubricant oil etc.

2) SYNTHETIC INDUSTRIES:

Synthetic industries refers to all those manufacturing industries where various materials

are combined together in the manufacturing process to manufacture a new product, for

instance, cement industry is a synthetic industry, in the sense that cement is produced by a

cement industry by combining many materials, such as concrete, gypsum, coal, etc.



3) PROCESSING INDUSTRIES:

Processing industries refers to those manufacturing industries where the raw materials

are processed through different processes (i.e. stages of manufacturing) into finished product.

Textile industry, paper industry etc are examples of processing industries.

4) ASSEMBLY-LINE INDUSTRY:

Assembly line industries refer to those manufacturing industries where different

components parts already manufactured are assembled into final products. Automobile

industry, television industry, etc are examples of assembly line industries.



SWOT ANALYSIS

The scan of the external & internal environment is an important part of the strategic

planning process. Environmental factor internal to the usually can be classified as strength

(s) or weaknesses (w) & those external to the firm can be classified as opportunities (o) or

the threat (t) such an analysis of the strategic environment is referred to as SWOT Analysis.

The SWOT Analysis provides information on that is help for iv matching the firms

resources & capabilities to the competitive environmental in which it operates .As such it is

instrument in strategy formulation.

STRENGTHS

Cheap and excess labour force.

Globalization.

Raw material availability

Standard economic condition

WEAKNESSES

High cost of Production.

High Tax regime.

Decentralization of Raw materials

OPPORTUNITIES

Large demand from auto sector.

High demand both at domestic and Global level.

THREATS

Stiff competition from other foundries

Environmental policy and restrictions

Globalization.



COMPANY

OVERVIEW.



HISTORY

M/s HIND ENGINEERING WORKS, the mother industry of HIND GROUP OF

INDUSTRIES was established in the year 1963, which manufactures Crankshafts. The

Founder of Hind Engineering Works was Mr.M.N.Kakatkar.

In the year 1950, Mr. M.N. Kakatkar was working in Arun Engineering as a Manager.

In the year 1957, his brother Mr. S.N. Kakatkar started Auto electrical repair works at Fort

road Belagum under the name of ‘Belgaum Electrical Works’, as an electrical wireman.Mr.

M.N. Kakatkar resigned from Arun Engineering and joined his brother at Belgaum electrical

Works.

Mr. M.N. Kakatkar was ambitious in starting his own Engineering Works Unit. With

the help of his friends and well wishers, he took some loans and purchased a Kirloskar made

‘Lathe’ machine on second hand. In the year 1962, they took a land at Dharwad road to start

engineering workshop on rental basis, Rs. 200 per month.



In the year 1963, they started the firm under the name “Hind Engineering Works”,

undertaking jobs from various firms. They approached State Bank of India in 1964 for

Financial Assistance. State Bank of India sanctioned a cash credit limit of Rs.5, 000.Belgaum

is well known for manufacture of crankshaft for automobiles, tractors, compressors.

The demand for crankshaft from all over India increased day by day. In the beginning the firm

was undertaking job work of crankshaft for M/s Arun Engineering Works.

In the year 1969, State Bank of India started Small Industries Business Scheme to

provide loan for the purchase of machinery. The lack of Customer satisfaction due to the set up

of existing machineries was felt by the founders and hence they obtained term loan from SBI

and purchased the required machinery set up and are supplying crankshafts till today to the

most reputed customers.

In the year 1972, M/s Copper Engineering Ltd. Satara, who is the manufacturer of

diesel engines, inserted their jobs to Hind Engineering Works independently and from then

Onwards many companies like M/s Voltas Ltd. (MUMBAI) and many other companies

approached Hind Engineering Works.

The machinery purchased were Crankshaft grinders, Milling machineries and

Balancing machine and other required machinery. With this setup they were able to meet the

requirements of the customers. The prominent manufacturers of automobiles like Mahindra

and Mahindra, Tata Motors Ltd., Bharath Earth Movers are in the list of major customers. One

more operation required for completing the crankshaft was induction hardening. The partners

of the firm established a new firm named Hi-Tech Induction Pvt Ltd. at Shinolli.

As per the modern technology, due to the quality demand from the customers, Hind

Engineering Works installed modern technical equipments, highly skilled labor, educated

technicians and other testing equipments. It is proud to say no strikes from the date of

establishment till today. The firm has taken the expansion program for addition of imported

machinery from Germany and constructed new factory Premises at Udyambag Belgaum.



INTRODUCTION

HIND Group has very long experience of making crankshaft. This company has started

machining crankshaft since 1968. It has a good blend of technical staff of experience & youth to meet

modern days requirements of quality and in time delivery. The company has all the in-house facilities,

well equipped with standard room & inspection facilities. Company has over 12 years experience of

meeting requirements of following O.E. manufacturers,

1. Mahindra & Mahindra. 2. Tata Motors. 3. Voltas Ltd. 4. VST Tractors. 5. Greaves Cotton Ltd.

HIGHLIGHTS OF HIND GROUP

Since, last 10years Hind group has supplied over 2.25 lakhs crankshafts to above customers and out of 2.25 lakhs it has supplied 1.25 lakhs to Mahindra. Their Expectations from Mahindra for achieving future challenges are as follows:

1. Capacity Utilization:

After Mahindra agrees certain volume, they expect from M&M to compensate by giving different products to absorb any down fall of particular item and give more opportunity to utilize increased capacity.

2. Pricing:

Today’s prices were agreed @ 10 years back by Hind, they expect from M&M to review prices whenever they are investing for M&M.

3. Technical support:

Since Hind group is small but growing organization. They expect technical support and guidance of modern concepts like 6SIGMA, TPM etc.



RELEVANT INFORMATION OF GROUP COMPANIES .

Company WorksFactory Area

(Sq.Mtrs.)Power (KVA)

LAND BLDG. CONN. GENR.


372, Dharwad Road,Belgaum - 590 016.Karnataka (INDIA)

2500 2000 450 300

98,99,100, Industrial Area,Udyambag-Belgaum - 590013Karnataka, (INDIA)

2500 1400 500 300

HIND AUTO CRANKS PVT.LTD

372/A, Dharwad Road,Belgaum - 590 016.Karnataka (INDIA)

1000 600 200 125

HIND INDUSTRIES

372, Dharwad Road,Belgaum - 590 016.Karnataka (INDIA)

2000 1425 150 -

C.C.B. M.No. 793/1,Plot No. 680/1, Khanapur Road,Belgaum - 590 008.Karnataka (INDIA)

6300 925 150 150

HI-TECH INDUCTION PVT. LTD.

111/1, Vengurla Road,Shinoli (BK) - 416 508Tal: Chandgad Dist: KolhapurMaharashtra (INDIA)

16200 600 500 -

NEW FOR EXPANSION UDYAMBAG 10000 - - -



COMPANY PROFILE

NAME OF THE COMPANY : HIND ENGINEERING WORKS

LOCATION : 372, Dharwad Road, Belgaum-590 016,

Karnataka, INDIA.

TELEPHONE No. : 91-831-4215909.

FAX No. : 91-831-248886

E-MAIL : hindengg [email protected]

YEAR OF ESTABLISHMENT : 1963

CORPORATE OFFICE : 372, Dharwad Road, Belgaum-590 016,

Karnataka, INDIA

TYPE OF INDUSTRY : Medium Scale

STATUS OF OWNERSHIP : Partnership.

NAME OF THE PARTNERS : Mr.U.M.Kakatkar (Managing Director)

Mr. P.N. Kakatkar (Executive Director)

Mr. S.N. Kakatkar (Director)

INDIRECT EXPORTS : United Kingdom, United States and Indonesia.

TOTAL LAND AREA : 4287.53 Sq.meter

BUILT UP AREA : 3795 Sq.meter

VACANT LAND : 492.53 Sq.metre

NO OF EMPLOYEES : 65

NO OF WORKERS : 280

NO OF SHIFTS : 8.30am to 3.30pm

3.30pm to 11.30pm

11.30pm to 8.30pm

WEEKLY HOLIDAY : Sunday



BASIC BUSINESS INFORMATION

BUSINESS ACTIVITY

MANUFACTURING CRANKSHAFTS FOR

AUTOMOBILES TRACTORS

COMPRESSORS OTHER VARIOUS APPLICATIONS

MANUFACTURING OF

ENGINEERING AND ALLIED COMPONENTS OUT OF CASTING AND

FORGING

INDUCTION HARDENING OF

CRANKSHAFTS CAMSHAFTS

AXCEL SHAFTS GEARS

CYLINDRICAL SHAFTS

CONTINUOUS BUSINESS GROWTH PLANS THROUGH:

PRODUCT MIX – WIDE RANGE OF PRODUCTS

GLOBAL CUSTOMER NETWORK

TECHNOLOGY UPGRADATION

MANUFACTURING TECHNIQUES STANDARDIZATION.

ZERO DELIVERY FAILURES.



MATERIAL FLOW CAHRT


SEMI FINISHAT

UDYAMBAG UNIT

INDUCTION HARDENING ATHI-TECH INDUCTION PVT. LTD.

SHINOLI

FINISH & DESPATCHLINE

HIND AUTOCRANKS PVT.LTD. DHARWAD ROAD, BELGAUM.

HIND AUTOCRANKS PVT. LTD HIND ENGINEERING WORKSDHARWAD ROAD, BELGAUM

HIND INDUSTRIESDHARWAD ROAD, BELAGUM


VISION AT "HIND GROUP"

"HIND GROUP OF INDUSTRIES” is committed to provide high quality products,

which will delight customers.

They shall involve all employees in quality improvement process and continuous

improvements in all functions.

They shall emphasize more on preventive measures rather than

rectification of errors.

They shall involve sub-contractors and guide them for achieving the required quality of

products and services

QUALITY POLICY

HIND Group manufacturers and suppliers are committed to:

Meet customer requirements and strive for excellence through continual

improvement of our products, processes and systems.

Involve all employees and other interested parties and work with team spirit in

achieving organizations objectives.

Take decisions and actions based on analysis of data and information to ensure

improvement and growth.



INDUSTRY FOCUS.

IC ENGINES.

FARM EQUIPMENTS.

AUTOMOBILE.

COMPRESSORS.

CUSTOMERS

TATA MOTORS LIMITED.

MAHINDRA AND MAHINDRA LIMITED

VOLTAS LIMITED, MUMBAI

VST TILLER AND TRACTORS, BANGALORE.

BHARATH EARTH MOVERS LIMITED.

GREAVES COTTON LIMITED.

Competitors

NETALKAR ENGINEERING WORKS, BELGAUM

JAI HIND ENGINEERING WORKS, BELGAUM



BOARD OF DIRECTORS .

U.M.Kakatka : Managing Director

P.N.Kakatkar : Executive director.

S.N.Kakatkar : Director.

A.D.Bidkar : Technical Director.

Bankers

STATE BANK OF INDIA,Commercial Branch,Hindwadi, Belgaum-590 011.

Auditors

D.B. Kulkarni and Company

Audit house, Ravivar Peth

Belgaum.

R.N. Bajaj, Chartered Accountant

Meerapur Galli, Shahpur

Belgaum.



ACHIEVEMENTS

1. Number of customers increased from 4 to 6.

2. New products developed- 8 nos.

3. Capacity increased by 133 %( 3000 to 7000 no. per month) for M&M.

4. In house rejection reduced from 1.25% to 0.68%.

5. Through put time reduced by 33% (21 to 14 days)

6. Process improvement- DRO on grinding machine, in process gauge change over from

Analogue to Digital.

7. Dedicated work forces, Negligible turn over.

8. Single piece flow.

Awards

1. ISO-9001-2000 Quality systems accredited by JOINT ACCREDIATION SYSTEMS of

AUSTRALIA and NEW ZEALAND.

2. Best Customer Award from State Bank of India-2002

3. Best vendor award from Voltas Ltd.-2005.



SWOT ANALYSIS

STRENGTHS: It has innovation in manufacturing process in terms of components produced.

No Trade Union, hence no strikes.

Cheap labor force is easily available.

Able to produce complicated products because of experience.

Systems are implemented for Quality assurance. The company has skilled top management and, team work and co ordination between the

employees. It has highly rated customer profile of Mahindra and Mahindra, Voltas Ltd., Tata Motors,

VST Tiller and Tractors, Bharath Earth Movers Limited., Greaves Cotton Limited.

WEAKNESS:

In spite of wide customer base, it is still substantially depended for orders on diesel engine/

Farm equipments industry which are more prone to recessionary trends.

There is no any-promotional activity in Foreign Countries as it aims at Globalization.

Increased cost of production.

OPPORTUNITIES:

Some of its major customers are having global presence. A larger export market opening up

may pave the way for a wider customer base.

High demand at Domestic and International market.

Develop new product in a very short time.

Many Foreign Customers are taking a re look at their supply chain to get the products at

lowest landed cost.

THREATS:

There exists a stiff competition in line. Due to rapid development in science and technology

the techniques and methods used become very obsolete.

Change in Government policies.



DEPARTMEN

TS



VARIOUS DEPARTMENTS AT HIND ENGINEERING

WORKS.

1. PERSONNEL DEPARTMENT.

2. PURCHASE DEPARTMENT.

3. PRODUCTION DEPARTMENT.

4. MARKETING AND SALES DEPARTMENT.

5. QUALITY ASSURANCE DEPARTMENT.

6. FINANCE / ACCOUNTS DEPARTMENT.



PERSONNEL DEPARTMENT

HIERARCHY:

MANAGING DIRECTOR

WORKS MANAGER

ADMINISTRATIVE OFFICER

HR EXECUTIVE

DEPARTMENT HEAD AND UNIT HEAD

HRD is an organization, functions to improve the attitude and culture of employees to

meet the productivity requirements and to achieve the customer satisfaction always.

FUNCTIONS:

1. MAN POWER PLANNING: It is the policy of the company to make all man power

allocation based on projections made through the approved annual manpower plan.

2. RECRUITMENT: It is the process of searching the prospective employees and

stimulation and encouraging them to apply for the jobs in an organization.

SOURCES OF RECRUITMENT:

Advertisement in local news papers.

Advertisements in colleges.



Recommendation and introduction from business, friends, relatives, employees

and other employees.

TRAINING AND DEVELOPMENT:

PURPOSE:

To provide guidelines for appointing competent personnel, identifying training needs,

prioritization for providing the training to employees, evaluation of effectiveness of

training and related corrective / preventive actions. To provide guidelines for

empowerment & motivation.

Training need may be identified in any of the following situations;

Based on skills assessment

Based on the customer requirements or complaints

In case of new processes or modifications in the existing process.

Based on the Appraisals, for areas, which needs improvements.

In case of the not achieving the objectives or goals.

Need based training

Training on Job - On the Job training will be arranged by respective Senior

Manager & Process owner in coordination with HR executive in any new or modified job

affecting the product quality, process, new Technology for personnel including contract

labour. The records will be maintained in on the job Training report

Employee Motivation & Empowerment

Empowerment:

a. Empowerment is ensured through training

b. Delegation of responsibilities & authorities for the key personnel’s for taking

appropriate decisions,

c. Providing necessary safe & healthy work environment



d. Providing the necessary resources for executing his/ her work in order to achieve the

organizational goals & Objectives, & carry out continual improvement projects.

e. The suggestion schemes have been introduced to ensure their involvement & make

them feel that they are part of the organization.

Motivation:

a. Following are the motivation Guidelines established to achieve the Organizational

goals/ objectives;

i. Monthly attendance incentive

ii. Monthly production incentive (for producing more then standard norms)

iii. Yearly – Gunvatta Kamgar Award (Attitude, habits, behavior)

iv. Yearly – Gunvatta Award (Quality of work)

v. Yearly – Vishesh Gunvatta award (Attitude, habits, behavior + Quality of work)

vi. Yearly – Attendance award

vii. Yearly – Meritorious Award (for employee’s children who score above 70% in

academics)

3. WELFARE MEASURES:

The company has provided the welfare facilities like First aid appliances, rest rooms,

production incentives, ESI dispensary. It is giving bonus to its employees every year apart

from regular ESI, Provident fund contribution and Insurance group gratuity. Regular health

camps are being organized by the industry.



PURCHASE DEPARTMENT

HIERARCHY:

MANAGING DIRECTOR

WORKS MANAGER

PURCHASE MANAGER

ASSISTANT

PURPOSE:

To provide guidelines to ensure that the purchased product conforms to specified requirement.

SCOPE:

Consumables, tooling, packaging material, Forgings, Castings, & maintenance spares.

RESPONSIBILITY Managing Director & Works Manager: Approval / Deletion of supplier as per this

procedure, approval of Purchase Orders, P.O. amendments, Procurement schedule.

Purchase Manager: Obtaining information about Supplier, Informing supplier about requirements, Procurement schedule, Schedule amendment, Schedule amendment / cancellation released on suppliers as per this procedure, keeping follow-up with supplier for timely delivery & monitoring supplier performance.



FUNCTIONS:● Receipt of purchase requisition from various departments.

● Sending or doing enquires of required materials.

● Getting the quotation from the supplier.

● Reviewing the quotations.

● Negotiations to the supplier.

● Price settlement.

● Releasing the purchase orders.

● Follow up with the suppliers for getting materials on time.

PROCEDURE

Definition of Specified Requirements:

Requirements of product or materials to be purchased and Incoming Inspection of Purchased Product / Service are as specified & documented in terms of Purchase Order, Drawings, Specifications / Standards, Control Plan etc.

Selection of Suppliers (Evaluation):

Suppliers’ selection is done on the basis of one or more of the following methods:

a) Past performance of supplying similar product.b) ISO 9000 certificationsc) Market reputation & Brand recognition.d) Customer recommendation / preference.e) Based on evaluation of trial / sample supplies.f) Based on assessment findings from onsite visit.

Approval of Supplier

The approval of supplier is done on following basis; Customer Approved Source Onsite inspection report in cases where onsite inspection is required. In other cases the suppliers are approved on the basis of either past performance of

supplying similar products or Market reputation and Brand recognition On the information received from customer by Purchase Manager.



The supplier may be approved based on evaluation of trial / sample supplies. How ever the numbers of trial supplies are limited to three trials.

Re-evaluation of Supplier’s (Supplier’s Performance Measurement)

Performance of supplier supplying Raw material, consumables & such other materials directly affecting quality of product are assessed. The assessment is based on Quality of product & Timely Delivery of material

Purchasing Data

Purchase Manager will maintain list of Material for Production, this list is prepared considering type of crankshaft-the consumables (material) required along with specification & suppliers/ sources available.

Based on the customer requirements communicated by the production department purchase manager prepares the procurement plan for the material.

Scheduling of Suppliers

Based on the requirement, approved suppliers are given material requirement information by Purchase Manager through Purchase Order/ verbal order. Purchase Orders are reviewed and approved for completeness and correctness of information by Managing Director.

Based on amended schedule received from customer, Managing Director verifies any changes required in the released Purchase Orders. In case of amendment, Purchase Manager informs the respective Supplier.

Conditional Stock Verification:

Purchase Manager carries out the conditional stock verification of material kept in stock on Quarterly basis. The conditional Stock verification is done to verify the physical stock V/s book stock is tallying & whether the material is in good condition (not getting rusty, leaked, damaged etc.). After carrying out the conditional stock verification activity the Purchase Manager Stamps on the stock register.The material in stores is issued on First Inn First Out basis (FIFO). Accordingly the material is stacked or stored in the rack to ensure FIFO.

Organization’s Verification at Suppliers End:

Under specific circumstances, if material is to be verified at the supplier’s premises, it is mentioned clearly in the purchase order.

Customer verification at Supplier’s End:



If agreed contractually with the customer, the customer is given the right to inspect / verify the product at supplier’s premises. This aspect will be mentioned in purchase order clearly.

Arrangements are made for such inspection / verification.

PRODUCTION DEPARTMENT

HIERARCHY:MANAGING DIRECTOR –TECHNICAL DIRECTOR

WORKS MANAGER

SENIOR MANAGER PRODUCTION AND PLANNING

SENIOR MANAGER FOR SEMIFINISHED, SENIOR AMANGER INDUCTION HARDENING

LINE MANAGERS

SHIFT INCHARGE

PURPOSE

To provide guidelines to ensure that the production processes are planned and are carried out under controlled conditions to ensure compliance of the product to specified requirement.

SCOPE

All production processes / all stages of manufacturing carried out at the plant.

RESPONSIBILITY:

Works Manager: For approving process controls & product characteristics, ensuring safe & healthy working conditions, providing manufacturing



infrastructure & timely allocation of resources for achieving timely delivery

Sr.Mgr. Production: For Defining & implementing production controls, Production Planning adhering to production schedules.

Line Manager: Job Set-up approval & QA Inspector: In process patrol inspection

PROCEDURE:

Production Planning Customer Orders / schedules are received by marketing department & is communicated to MD, Works Manager & Sr. Mgr. Prod. The requirements are reviewed for the following:

a) The requirements are adequately defined for Product Description and specifications, Quantity and delivery requirements.

b) Capability to deliver the product on schedule depending on material availability with respect to Stock of Finished crankshafts, WIP Stock of crankshafts and forging/ casting stock crankshafts, back-log of previous month and material procurement lead-times.

Sr. Mgr. Prod. Based on the review findings prepares the Production Plan for the month in Monthly & weekly Production plan HG-PRD-F-01 and communicates the Production Plan to the concerned Line Managers & Shift In charge. The Monthly Production Plan gives details of weekly requirement, Item-wise Production Quantity.

Sr. Mgr. Prod prepares the Machine Loading Chart HG-PRD-F-02 & communicates the daily production target per line per day per shift.

Marketing receives the amendment/ change to customer requirement, which is communicated to the MD or Work Manager. The Works Manager reviews the amendment/ change for acceptability in consultation with Sr. Mgr. Prod.

If the changes are acceptable, the Production Plan HG-PRD-F-01 is up-dated and communicated to all departments concerned

Process Flow Charts, Control Plans, Process Drawings, SOP etc. giving the sequence for processing and machine are documented for the components manufactured at the plant.

Machines, Equipment and allied facilities carrying out the processes are installed and maintained.

Tooling Management (Control of Tooling)

The Tooling required for Manufacturing of crankshafts are designed and provided by Tool Room.



The Tool Room is provided with original Product Drawing. The Tool Room manufactures the required tooling die. The Tooling is accepted / approved after confirming sample production acceptance.

Machinery Maintenance

Line Manager/ Shift In charge to ensure that machinery maintenance is carried out as per the SOP.

Machine/ Utility Break-down to be communicated to the Maintenance department through Maintenance work Order, stating the Machine Problem.

Facility Management: Sr. Mgr. Prod. / Line Manager to evaluate the Facility utility & overall equipment Efficiency as per the Procedure for Facility Management.




RECEIPT OF RAW MAT (FORGING CASTING)

STORAGE OF RAW MAT AT RECEIPT STAGE

INCOMING INSPECTION & TESTING (DIMENSIONAL & METALLURGICAL)

IF NOT OK (DISPOSITON DECIDED)

INDUCTION HARDENING

GRINDING

DYNAMIC BALANCING

PACKING

IF NOT OK (SEND BACK TO SUPPLIER / CUSTOMER)

TURNING

STAGE INSPECTION

STORAGE

CENTERINGJOURNAL TURNINGCRANK PIN TURNING

RECENTERINGDEBURINGOIL GALLARIES DRILLING / CHAMFERING

STAGE INSPECTION


MAGNAFLUX CRACK DETECTIONHARDENINGSTRESS RELIEVING

STAGE INSPECTION


JR. GRINDINGCONN. GRINDINGFLANGE GRINDINGSTEM GRINDINGFLANGE FACE GRINDINGSTAGE INSPECTION


FLY WHEEL MTG. HOLE DRILLING / TAPPING)STEM DRILLING / TAPPINGKEYWAY MILLINGOIL SEAL GROOVE

STAGE INSPECTION


OIL HOLE BUFFINGSUPERFINISHINGCLEANING/RUST PREVENTIVE APPLICATION

FINAL INSPECTION & TESTING


DESPATCH

IF OK(NEXT OPERATION)







UNI-DIRECTIONAL PROCESS FLOW DIAGRAM

SCOPE: RAW MATL RECEIPT TO FINISHED STAGE

OPERATION

INSPECTION

STORAGE

MOVEMENT

DECISION BOX

DOCUMENTATION


MARKETING AND SALES DEPARTMENT

HIERARCHY:MANAGING DIRECTOR

WORKS MANAGER

MARKETING MANAGER

ASSISTANTPURPOSE:

This procedure ensures that all contracts / orders are reviewed and resolved before acceptance.

SCOPE:

Customer Orders, schedules, order amendments.

RESPONSIBILITY:

Manager Marketing: Review and acceptance of Orders/ Schedules in consultation with Works Manager and Review new enquiry with Work Manager & MD.

PROCEDURE:Processing of Enquiries, Proposals, Purchase Orders and Amendment to Purchase Orders: The Marketing department maintains ‘Manufacturing Capacity Map’ which details the

existing manufacturing capacity, list of customer& products, List of machineries, etc.

Customers’ Inquiries, Proposals, Purchase Orders and Amendment to Purchase Orders are received by / directed to Manager Marketing. In case of new customer the Quality Management System requirements are determined & records are maintained in Contract review checklist. If customer has defined the specific requirements in a Manual (soft/ website) Manager Marketing will ensure that the same is made available for review.

The product technical requirements are determined & records are maintained in New crankshaft requirements & review report.

The Manager Marketing reviews the customer requirements, as well as their commercial feasibility and capacity availability. In case of order / amendment, commercial discrepancies if any, are resolved by the Manager Marketing and recorded in contract review checklist/ New crankshaft requirements & review report.

The Manager Marketing decides on initial feasibility of the inquiry / proposal / order / amendment. In case of rejection, regret letter is sent to customer.



On review of initial feasibility if accepted, the New crankshaft requirements & review report will be forwarded to Works manager for product technical feasibility review. Works manager will carry out the feasibility & communicate the feasibility report to the Manager Marketing.

Manager Marketing prepares the commercial proposal in consultant with MD, & communicates to customer.

Manager Marketing will follow-up with the customer for Purchase order. On receipt of customer PO, it is verified with the commercial proposal. If the PO is accepted, the customer’s development requirements will be communicated to the Works Manager.

MD is authorized to finally accept or reject orders and amendments. In his absence, the Manager Marketing is authorized. The P.O. / Amendment is retained by Marketing Department for records and copy is send to Production Department

Coordination of Delivery Activity: Based on the customer delivery schedules, the Marketing Department gets the goods

packed, prepares Challan & Invoice and arranges for dispatch. Marketing Department maintains records of dispatch. The records of crankshaft forgings receipts & dispatches are maintained in daily receipts & dispatches status.

Manager Marketing communicates the Crankshaft stock & dispatch details to customer (automotive customers) on daily basis through e-mail of receipt & dispatch status. Advanced shipment notification is done before dispatch to the automotive customers.

Stock verification: Every quarterly physical stock of crankshafts will be checked and confirmed with the register stock, and the confirmation of the same is also done with the customer. In case if any discrepancy observed, the marketing manager finds out the mistake (carries out analysis) & takes necessary action to resolve the discrepancy.

Customer Satisfaction: Manager Marketing will carry out the customer satisfaction survey once in year (preferably in March) by sending the survey form. Manager marketing reviews the survey form on receipt and identifies areas for improvement & customers expectations/ suggestions and forwards the survey form for further analysis & actions. Manager Marketing will monitor the performance of manufacturing processes twice in a year (preferably in Jan. & July) to demonstrate compliance with customer requirements for followings areas;

i) In-house rejections customer-wise & product wise.ii) Delivery performance customer-wise.iii) Customer end rejections.iv) Number of customer complaints.v) Process capability index customer wisevi) Capacity booking customer-wise.

The records of the above will be maintained in manufacturing performance with Customer requirements reports. Belgaum Institute of Management Studies- Degree college


QUALITY ASSURANC REPARTMENT

HIERARCHY:PRODUCTION MANAGER AND WORKS MANAGER

OUALITY ASSURANCE MANAGER

JOB AND LINE INSPECTORS.PURPOSE:

To provide guidelines for control of nonconforming Material / Product in order to prevent its unintended use & deciding appropriate disposition action.

SCOPE:Incoming Material: Incoming Crankshafts, Raw materials, & Job work items In-process Material& Final Product, In process rejection, Product ready for dispatch or product rejected by customer through Customer compliantAs well as, any material, component or product whose inspection and test status is unknown or whose identity is unknown is a ‘Suspect Product’.

RESPONSIBILITY:QA Manager : Incoming MaterialsProduction Line Manager: In-process MaterialQA Manager & Production line Manager: For Final Product including customer returned product

PROCEDURE:

Quality Assurance Manager identifies non-conformance of incoming materials. The non-conformance and disposition is conveyed to Sr. Production Manager & Works Manager.

Nonconforming incoming products are identified by visual identifications such as red color paint, red tags, or by storage in areas marked for rejects and segregation. The Stores in charge is informed about the rejection (in case of consumables).

The semi finish crankshafts Nonconformance’s are identified by Yellow paint.

QA Manager & Stores I/c dispose off Nonconforming Materials at incoming stage in accordance with disposition given by Works Manager. The supplier is informed about rejection.



In-Process Material: Non-conforming In-process Products are detected by Production Line Manager / QA

Manager through in-process inspection. QA Inspector records the details of rework able nonconformance in the In-process Inspection Report. The crankshaft rejections are recorded in the Product Non-conformance Control Register.

The QA Inspector & Production Line Manager ensures that non-conforming products are controlled and the same is not released unless the non-conformance is reviewed and a disposition is arrived at. Nonconforming products are identified as:

Rejection – Red Color paint, with tag, & written with permanent marker giving details of rejection.

In process crankshaft Rework – Identified by blue color permanent marker pen Concession / Deviation – Status identified by blue color permanent marker pen The rejected products are stored separately so as to avoid their mix-up with acceptable

goods. Reworked / rectified in-process products are re-inspected, prior to release for further processing. Production Manager maintains records for scrapped, reworked / rectified in-process products.

FINAL PRODUCT Final Products are inspected by QA Inspectors prior to dispatch. QA Inspector / QA

Manager detects non-conforming Final Products through final inspection. Also Final products that are stored beyond a period of six months are offered for re-inspection. Such re-inspection activity also detects products that have become non-conforming due to prolonged storage.

Nonconforming Final Products are identified. The Q.A Manager ensures that non-conforming final products are controlled and the same are not released unless the non-conformance is reviewed and a disposition is arrived at. The details of Nonconformance & further disposition action are recorded in Final Product Nonconformance Register.

Non-conforming final products are disposed off by QA Manager.

Customer End Rejections: Marketing Manager / Stores I/c would receive Customer returned Products. After

completing the Governmental Procedures, the returned products and details are handed-over to the QA Manager. Also if any Customer Compliant is received by Marketing Manager, it is also treated as Nonconformance and handed-over to Q.A. Manager to take required Corrective / Preventive Action.

The Works Manager & Q.A. Manager decides on the disposition of the returned product. Accordingly, the QA Manager arranges disposal of the returned products.

Trends in non-conformities are analyzed and actions are initiated for non-conformity reduction. The QA Manager and Works Manager monitor the progress and effectiveness. Complaints are closed after verifying that the actions are completed



effectively. MD reviews the trends of customer complaints and customer end rejections -in the Management Review Meeting.

FUNCTIONAL

AREA



ANALYSIS

FINANCE



DEPARTMENT

HIERARCHY

ACCOUNTS MANAGER

CASHIER

ASSISTANTS



PURPOSE:

To meet the day today requirements of the business and hence smooth flow of the business.

RESPONSIBILITIES:

1. To check whether the payment is received in time.

2. Furnishing as and when the required data to the department.

3. Updating the routine functions related to tax matters.

4. Co- coordinating with the statutory auditor for other works.

5. Checking and payment of salary, wages, OT and incentive as per norms.

6. To pay the creditors in time

7. Keep the bank account

8. Prepare balance sheet and profit and loss account

9. Maintain all the books of records

10. To carry out the smooth flow of the business.

“WORKING CAPITAL MANAGEMENT”

INTRODUCTIONFinancial Management is concerned mainly with procuring funds in most of the economical

and prudent manner, deploying these funds in the most profitable way in a risk situation,

planning future operations and controlling current and future performance and development

through different tools.



FUNCTIONS OF FINANCE MANAGER

The Finance manager has decisions carefully in respect of financing, investment,

dividend and current asset management.

Financing: To obtain funds from different sources. Funds for business are put to

different uses. The funds may be permanent source, long term source, and medium and

short term sources. These funds are to be utilized efficiently.

Investment: Investment in an existing plant needs for diversification or expansion of

existing capacity or establishment of new plant. In such areas risk-vs.-return factors are

to be considered by finance manager. Capital Budgeting techniques are to be applied

and an optimal decision is to be taken.

Working Capital Management: The Process is continuous; it requires a lot of

financial judgment and experience to handle. The aspects of working capital

management include making adequate fund for day today operations of the business.

Dividend decision: The main object of financial management is to maximize the

wealth of shareholders. In deciding the rate of dividend, emphasis should be made on

retained earnings (reserve) which will ultimately increase the book value of the

company along with equity capital.

WORKING CAPITAL

INTRODUCTION

Every business needs adequate liquid resources in order to maintain day-to-day cash flow. It

needs enough cash to pay wages and salaries as they fall due and to pay creditors if it is to keep

its workforce and ensure its supplies. Maintaining adequate working capital is not just

important in the short-term. Sufficient liquidity must be maintained in order to ensure the



survival of the business in the long-term as well. Even a profitable business may fail if it does

not have adequate cash flow to meet its liabilities as they fall due.

Therefore, when businesses make investment decisions they must not only consider the

financial outlay involved with acquiring the new machine or the new building, etc, but must

also take account of the additional current assets that are usually involved with any expansion

of activity. Increased production tends to engender a need to hold additional stocks of raw

materials and work in progress. Increased sales usually mean that the level of debtors will

increase. A general increase in the firm’s scale of operations tends to imply a need for greater

levels of cash.

MEANING:

Working Capital is a short term investment, which is concerned with the problems that

arise to manage current assets, the current liabilities and the inter relationship that exists

between them.

Working Capital is used for financing day today business operations. An organization

whether it is a manufacturing or trading requires adequate funds for acquiring the stock of

materials, marketable securities, stores, materials etc. The funds invested in current assets such

as stock of materials, bills receivables, Sundry debtors, and cash in hand, bank balance is

known as “Circulating or Revolving Capital” because the current assets are the nature of

circulation.

Working Capital thus refers to that part of total capital which is kept invested in current

assets that are required for regular business operations.

Concept:

The two concepts of Working Capital are:

Gross Working Capital

Net Working Capital.

Gross Working Capital:



The total capital employed in current assets or firms investment in current assets.

Current Assets:

The assets which can be converted into cash within an accounting year and includes

cash, short term securities, debtors, bills receivables, inventory. It focuses on two aspects of

current assets management:

Optimum investment in current assets: Avoid two danger points i.e.; excess and

inadequate in current assets.

Financing of current assets: Make necessary arrangement of working capital funds

whenever a firm needs due to increased level of business activities or for any other

reason.

Sl. No. CONSTITUENTS OF CURRENT ASSETS AMOUNT

1 Cash in hand XXX

2 Bills receivables XXX

3 Short term loans and advances XXX

4 Inventories of stock as

a) Raw materials xxx

b) Work in progress xxx

c) Stores and spares xxx

d) Finished goods xxx

XXX

5 Temporary investment of surplus funds XXX

Total Current assets(Gross working capital) XXX

Net Working capital:

It is the difference between current assets and current liabilities or excess

current assets over current liabilities.

Net working capital can be positive or negative. A positive working capital will

arise when Current Assets exceeds Current Liabilities. A negative working capital



occurs when Current Liabilities exceeds Current Assets. A firm should always posses a

positive working capital.

Net Working Capital = Current Assets – Current Liabilities.

Current Liabilities:

Current liabilities are the liabilities of a company due and payable within one year or

are those claims of outsiders which are expected to mature for payment within an accounting

year and include creditors, bills payable etc.

Net working capital is qualitative concept and it covers two concepts:

It indicates the liquidity position of the firm.

Suggests the extent to which working capital need may be financed by

permanent sources of funds and also it covers judicious mix of long term and

short term funds for financing current assets.

Sl. No. CONSTITUENTS OF CURRENT LIABILITIES AMOUNT

1 Bills Payable XXX

2 Sundry Creditors or Accounts Payable XXX

3 Accrued or outstanding expenses XXX

4 Short term loans and advances and deposits XXX

5 Bank Over Draft XXX

Total Current Liabilities XXX

NEED FOR WORKING CAPITAL

A FIRM MUST NEED WORKING CAPITAL FOR THE FOLLOWING REASONS:

1. To run the day today business activities.



2. To provide credit facilities to customers.

3. For the purchase of raw materials, components and spares.

4. To incur day today expenses and overhead costs such as fuel, power office expenses

etc.

5. To maintain the inventories of raw materials, work in progress, stores and spares and

finished stock.

6. To maximize the wealth of its shareholders.

7. To deal with the problem arising out of the lack of immediate realization of cash

against goods sold.

8. To maintain liquidity position of a firm.

9. To counterpart between cash inflow and cash outflow (because outflow of cash is

predicted, definite in nature but inflow of cash is indefinite.

10. To adopt smooth, uninterrupted functioning of firm activities.

DETERMINANTS OF WORKING CAPIATL

Working capital requirements vary from time to time and also from one kind of business to

another. There are no set of rules or principles determining the quantity of working capital



required for all concerns at any time. A large number of factors influence in the determination

of extent of working capital required for any enterprise.

1. Size of the firm:

The size of the firm in terms of its scale of operations is an important factor affecting

the working capital requirement. A firm carrying its business on a small scale requires less

amount of working capital as compared to a firm having large scale operations.

2. Nature of business:

A trading firm or a finance corporation requires a huge amount of working capital and

its investment on fixed assets is limited. Similarly a public utility concern like electricity, water

supply, railways etc require huge amount of fixed capital and just a nominal amount of

working capital.

3. Changes in technology:

Technological development relating to manufacturing process may influence the

working capital requirement. Use of modernized machines requires less quantity of raw

materials, speeding up of manufacturing process results in lower quantity of inventories to be

held, and hence reduces the working capital requirements.

4. Production cycle:

The time for converting raw materials into final [product is known as production cycle.

Longer the manufacturing cycle greater is the amount of working capital required. Therefore

shorter manufacturing cycle should be chosen so that accumulation of work in progress and

wastage of time can be minimized.

5. Business cycle:

Business increases during boom period and decreases during the period of depression.

During the boom period the sales increases rapidly and correspondingly investment in

Inventories also increase requiring more and more working capital. But when depression sets

in, the demand for the product declines reducing the level of inventories to be held and as a

result of which working capital requirement also declines.

6. Type of industry:



A capital intensive industry which is based only on machines requires more fixed

capital and less working capital. Whereas labor intensive industry based on manpower

resources requires more working capital for the payment of salaries, wages, allowance etc.

7. Rate of turn over:

A high rate of turn over requires less amount of working capital, whereas a low rate of

turn over requires increases the quantity of working capital requirement

8. Credit policy:

Liberal credit policies given to customers results in more working capital requirements.

When a firm sells goods on easy credit terms its funds get blocked up in book debts and

receivables, which in turn requires more amount of working capital. If the sales are made

strictly on cash basis business can be run with limited amount of working capital.

9. Growth and diversification of activities:

Need for working capital increases as the business grows in size and volume. Adequate

working capital has to be provided to meet the needs of growing business enterprise.

10. Profit planning:

Working capital requirements also depends upon the profit planning done by the

entrepreneur. Higher margin of profits helps in creating internal funds through the process of

ploughing back of profits, and thus contribute towards the working capital pool, whereas low

margin of profits leaves nothing for reinvestment.

11. Dividend policies:

Liberal dividend policies of a company restrict the creation of internal funds through the process of ploughing back of profits and hence increase the working capital requirements. But if a company does not like to pay any dividend or pays low arte of dividend its capital requirement will be less.

12. Government taxes:

Taxes imposed by the government have its own impact on working capital requirement.

Higher the tax rate more will be the working capital requirement.

TRADING AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 2006

AND 2007

PARTICUALRS 2005-06 2006-07



To opening stock 15,56,720.00 9,38,100.00

To raw materials 88,45,262.58 1,26,43,430.36

To operating expenses 2,71,06,010.17 2,70,43,113.01

To workers wages 30,98,323.00 34,64,814.00

To motive power 8,38,427.50 1,052,295.28

To Gross profit 1,75,06,374.38 2,03,95,204.83

TOTAL 5,89,51,117.63 6,55,36,957.48

To salary and provisions 17,11,872.00 22,37,352.00

To traveling expense 15,82,982.50 13,13,835.61

To interest on bank loans 10,12,366.59 28,56,666.71

To interest on deposits 9,08,493.00 10,09,788.00

To Bank charges 4,61,813.34 2,02,755.98

To postage and telephone 4,25,772.41 3,63,580.44

To printing and stationery 1,39,585.30 1,73,146.52

To welfare expenses 1,87,163.25 2,59,717.00

To repairs and maintenance 6,16,366.80 11,67,512.20

To general expenses 41,09,827.96 37,46,522.55

To depreciation 8,14,121.72 15,47,174.00

To Net profit 59,57,895.51 56,28,025.55

TOTAL 1,79,28,260.38 2,05,06,076.56



PARTICULARS 2005-06 2006-07

By sales

Within state 1,22,200.00 65,600.00

Interstate 23,59,140.00 25,03,427.01

By labour charges 5,50,32,063.63 6,09,94,895.47

By workshop building rent 2,40,000.00 2,40,000.00

By Machinery rent 2,59,614.00 2,34,181.00

By Closing stock 9,38,100.00 14,98,854.00

TOTAL 58,951,117.63 6,55,36,957.48

By Gross profit 1,75,06,374.38 2,03,95,204.83

By interest income 52,216.00 1,09,586.00

By commission and discount - 1285.73

By LIC Keyman Insurance Refund 3,69,670.00 -

TOTAL 17928260.38 20506076.56



BALANCE SHEET OF HIND ENGINEERING WORKS

FOR THE YEAR ENDING 2006 AND 2007.

CAPIAL AND LIABILITES 2005-06 2006-07

Partners Capital Accounts 1,68,07,492.56 1,26,94,749.41

Reserve and Surplus 24,10,100.00 24,10,100.00

Bank Loans 89,03,970.85 1,45,80,573.24

Deposits 71,06,240.00 1,28,58,702.00

Deferred Tax Liability _ 60,56,717.00

Current liabilities and Provisions:

State Bank Of India cash credit 94,29,439.24 1,06,68,856.42

Sundry Creditors:

Suppliers

Jobbers

3,918,152.91

2,73,95,868.60

72,94,232.43

51,54,870.60

Trade advances 17,44,956.45 4,07,863.45

Outstanding Liabilities 11,78,282.38 25,63,535.47

TOTAL 7,88,94,502.99 7,46,90,200.02



PROPERTIES AND ASSETS 2005-06 2006-07

Fixed Assets 1,78,41,218.00 3,59,84,281.73

Workshop Building Construction 37,54,581.95 50,18,577.95

Building Renovation ( Office interior) 17,73,974.63 3,77,098.00

Investment and Deposits 3,60,007.00 3,52,500.00

Current Assets

A] Closing Stock 9,38,100.00 14,98,854.00

B] Sundry Debtors:

Customers

Labor Charges

15,74,226.144,24,81,826.12

14,59,336.312,17,59,724.67

C] Receivables 11,09,235.16 13,08,843.16

D] Cash and Bank Balances:

Cash on hand

Cash at bank

1,41,858.5317,50,675.49

1,544.532,17,609.34

E] Advances 71,68,799.97 67,11,830.33

TOTAL 7,88,94,502.99 7,46,90,200.02



STATEMENT SHOWING NET WORKING CAPITAL OF HIND ENGINEERING WORKS

FOR THE YEAR ENDING 2006 AND 2007.

Sl.No PARTICULARS 2005-2006

In Rs.

2006-2007

In Rs.

1 CURRENT ASSETS

Closing Stock 9,38,100.00 14,98,854.00

Sundry Debtors 4,40,56,052.26 2,32,19,060.98

Receivables 11,09,235.16 13,08,843.16

Cash And Bank Balances 18,92,534.02 2,19,153.87

Advances 71,68,799.97 6,711,830.33

TOTAL 5,51,64,721.41 3,29,57,742.34

2 CURRENT LIABILITIES AND

PROVISIONS

State Bank Of India Cash Credit 94,29,439.24 1,06,68,856.42

Sundry Creditors 3,13,14,021.51 1,24,49,103.03

Trade Advances 17,44,956.45 4,07,863.45

Outstanding Liabilities 11,78,282.38 25,63,535.47

TOTAL 4,36,66,699.58 2,60,89,358.37

3 NET WORKING CAPITAL

[Current Assets –Current

Liabilities]

1,14,98,021.83 68,68,383.97

NOTE:The Net Working Capital for the year 2006-07 decreased because of the purchase of

machinery from the existed working capital.



Comparative STATEMENT analysis

PARTICULARS 2005-2006

In Rs.

2006-2007

In Rs.

EFFECT ON WORKING

CAPITAL

CURRENT

ASSETS

INCREASE DECREASE

Closing Stock 9,38,100.00 14,98,854.00 560754.00

Sundry Debtors 4,40,56,052.26 2,32,19,060.98 20836991.28

Receivables 11,09,235.16 13,08,843.16 199608.00

Cash And Bank

Balances

18,92,534.02 2,19,153.87 1673380.15

Advances 71,68,799.97 6,711,830.33 456969.64

TOTAL 5,51,64,721.41 3,29,57,742.34

CURRENT LIABILITIES AND PROVISIONS

State Bank Of

India Cash Credit

94,29,439.24 1,06,68,856.42 1239417.18

Sundry Creditors 3,13,14,021.51 1,24,49,103.03 18864918.48

Trade Advances 17,44,956.45 4,07,863.45 1337093.00

Outstanding

Liabilities

11,78,282.38 25,63,535.47 1385253.09

TOTAL 4,36,66,699.58 2,60,89,358.37

NET WORKING

CAPITAL 1,14,98,021.83

68,68,383.97

4629637.86



OPERATING CYCLE

It is the time duration required to convert sales, after the conversion of resources into

inventories into cash. The operating cycle of a manufacturing company involves three phases:

Acquisition of resources such as raw materials, labor, power, fuel etc.

Manufacture of the product which includes conversion of raw materials in to work-in-

progress into finished goods.

Sale of the product either for cash or on credit. Credit sales create account receivables

for collection.

In simple words Operating Cycle is the time period required to convert cash into raw

materials, raw materials into work-in-progress into finished goods to bills receivables into

cash.

It can be explained through the following diagram:


DEBTORS(RECEIVABLES)

FINISHED GOODS

WORK-IN-PROCESSRAW MATERIALS

CASH


The length of Operating Cycle:

The sum of Inventory Conversion Period (ICP) and Debtors Conversion Period (DCP).

Operating Cycle Period = ICP + DCP.

Inventory Conversion Period:

The total time needed for producing and selling the product. Typically, it includes:

Raw Material Conversion Period (RMCP)

Work-In-Progress Conversion Period (WIPCP)

Finished Goods Conversion Period (FGCP)

ICP = RMCP + WIPCP + FGCP

Debtors Conversion Period:

The time required to collect the outstanding amount from the customers.

Gross Operating Cycle:

The total of Inventory conversion period and Debtors conversion period is referred to as

Gross Operating Cycle (GOC).

GOC = ICP + DCP.

Creditors Deferral Period:

The length of time the firm is able to defer payments on various resources purchased.

Net Operating Cycle:

It is the net difference between the Gross Operating Cycle and Creditors Deferral

Period.

NOC = GOC – CDP.

Finally, NOC is the difference between the total time period required for Inventory and

Debtors conversion period and the time period taken by the firm to postpone the payments.



COST SHEET FOR THE YEAR ENDING 2006 AND 2007

Sl.No. PARTICULARS 2005-06 2006-07

1. Raw Materials purchased 88,45,262.58 1,26,43,430.36

2. Opening Stock of raw materials 8,16,785.00 7,37,638.00

3. Closing Stock of raw materials 7,37,638.00 10,57,389.00

4. Raw materials consumed (1+2-3) 89,24,409.58 1,23,23,679.36

5. Direct Labor 30,98,323.00 34,64,814.00

6. Prime Cost (4+5) 1,20,22,732.58 1,57,88,493.36

7. Factory expenses 27,94,4,437.67 2,80,95,408.29

8. Opening Stock of Work in Progress 3,58,475.00 38,964.00

9. Closing Stock of Work in Progress 38,964.00 2,37,345.00

10. Works Cost (6+7+8-9) 4,02,86,681.25 4,36,85,520.65

11. Administrative Expenses 1,03,87,382.37 1,35,64,215.40

12. Cost of Production (10+11) 50,67,40,63.62 5,72,49,736.05

13. Opening Stock of Finished Goods 3,81,460.00 1,61,500.00

14. Closing stock of Finished Goods 1,61,500.00 2,04,120.00

15. Cost of Goods Sold (12+13-14) 5,08,94,023.62 5,72,07,116.05

16. Selling expenses 15,82,982.5 13,13,835.61

17. Cost of Sales (15+16) 5,24,77,006.12 5,85,20,921.66

18. Profit (19-17) 50,36,397.51 50,42,970.82

19. Sales 5,75,13,403.63 6,35,63,922.48



COMPUTATION OF OPERATING CYCLE

1. INVENTORY CONVERSION PERIOD:

a)Raw Materials Conversion Period = Raw Material Inventory____ X 360 Raw Material Consumption

Year 2006 = 73, 7638___ X 360 89, 24,409.58

= 28 days.

Year 2007 = 1, 05, 7389____ X360 1, 23, 23,679.36

= 31 days.

b) Work-In-Progress Conversion Period = Work In Process Inventory X 360

Cost of Production

Year 2006 = 38,964______X 360 5, 06, 74,063.62

= Negligible (0.27days).

Year 2007 = 23, 7345____ X 360 5, 72, 49,736.05 = 2 days.

c) Finished Goods conversion Period = Finished goods Inventory X 360 Cost of goods Sold

Year 2006 = 1, 61,500_____ X 360 5, 08, 94,023.62 = 1 day

Year 2007 = 2, 04,120____ X 360 5, 72, 07,116.05

= 1 day



2. DEBTORS CONVERSION PERIOD

Debtors Conversion Period = Debtors____ X 360 Credit Sales

Year 2006 = 4, 40, 56,052.26 X 360 5, 75, 13,403.63

= 276 days.

Year 2007 = 2, 32, 19,060.98 X 360 6, 35, 63,922.48

= 132 days.

3. CREDITORS DEFERRAL PERIOD

Creditors Deferral Period = Creditors_______ X 360 Credit Purchases

Year 2006 = 39, 18,152___ X 360 88, 45,262.58

= 159 days

Year 2007 = 72, 94,232.43____ X 360 1, 26, 43,430.36

= 208 days.

Operating cycle table

PARTICULARS 2005-06 2006-07Raw materials conversion period 28 31Work in progress conversion period Nil 2daysFinished goods conversion period 1 1Debtors conversion period 276 132Creditors conversion period 159 208Gross operating cycle 305 166



Net operating cycle [Gross operating cycle – creditors] 146 - 42



COMPUTATION OF DIFFERENT ACCOUNTING RATIOS

PARTICULARS 2005-06 2006-07a) Current Assets 55,16,4721.41 3,29,57,742.34b) Current Liabilities 4,36,66,699.58 2,60,89,358.37c) Quick assets 5,42,26,621.41 3,14,58,88,833d) Net working capital 1,14,98,021.83 68,68,383.97e) Net assets ( NWC+FA) 3,48,67,786.41 4,82,48,341.62f) Sales 5,75,13,403.63 6,35,63,922.48g) Total assets 55,16,4721.41 3,29,57,742.34h) Fixed assets 2,33,69,774.58 4,13,79,957.68i) Gross profit 1,75,06,374.38 2,03,95,204.83j) Net profit 59,57,895.51 56,28,025.55k) Current ratio(a/b) 1.2 1.2l) Quick ratio(c/b) 1.2 1.2m) Net working capital ratio(d/e) 0.32 0.14n) Net assets turnover ratio (f/e) 1.6 1.3n) Total assets turnover ratio(f/g) 1.04 1.92o) Fixed assets turnover ratio(f/h) 2.46 1.53p) Current Assets turnover ratio(f/a) 1.04 1.92q) Working Capital turnover ratio(f/d) 5.00 9.25r) Gross profit margin(i/f) 0.30 0.32s) Net profit margin(j/f) 0.10 0.08

LIQUIDITY RATIOS:The current ratio is a measure of the firm’s short term solvency. It gives a general view

of the adequacy of company’s ability to meet its day today payment obligations. Generally a

current ratio of 2:1 is considered to be satisfactory. In Hind Engineering Works, the current

ratio is lower than 2:1.For both the years it remained constant i.e., 1.2:1.This shows that there

is no sufficient Current Assets to meet the Current Liabilities.

Quick ratio judges the short term debt and repaying ability of the firm. When the quick

assets equal or exceeds the Current Liabilities, the financial position may be considered

satisfactory. The ratio 1:1 is considered as an acceptable form. Here the quick ratio is constant

for both the years. It is always above the acceptance rule. Thus, found to be better.



Net working capital ratio is used as a measure of firm’s liquidity. It measures the

firm’s potential reservoir of funds. The greater the Net working capital ratio the greater ability

to meet its current obligations. The net working capital ratio has decreased from 0.32 to 0.14.

To conclude, liquidity of Hind Engineering Works is deteriorating. Liquidity ratio can

mislead since Current Assets and Current Liabilities can change quickly. Their utility becomes

more doubtful for the firm with seasonal business changes.

ASSETS TURNOVER RATIOS

Net assets turnover ratio is also known as capital employed turnover. A firm’s ability

to produce a large volume of sales for a given amount of net assets is the most important aspect

of its operating performance. Unutilized or underutilized assets increase the firm’s need for

costly financing as well as expenses for maintenance and upkeep. The net assets turnover ratio

has decreased from 1.6 to 1.3. This means that the industry is producing Rs. 1.3 of sales for one

rupee of capital employed in net assets.

Total assets turnover ratio shows the firm’s ability in generating sales from all

financial resources committed to total assets. This ratio has increased from 1.02 to 1.94. This

implies that the industry generates a sale of Rs.1.94 for one rupee investment in fixed and

Current Assets together.

Fixed and Current Assets turnover ratio indicates the efficiency of utilizing fixed

assets and Current Assets separately. The fixed assets turnover ratio has decreased from 2.46 to

1.43. The Current Assets turnover ratio has increased from 1.04 to 1.92. Interpreting the

reciprocal of these ratios for 2006-07, for generating a sale of one rupee, the company needs

Rs.0.65 investment in fixed assets and Rs.0.51 investment in Current Assets.

Working capital turnover ratio is also known as Net Current Assets turnover ratio.

The ratio has increased from 5.00 to 9.25. The reciprocal of the ratios is 0.19 and 0.10

respectively for 2005-06 and 2006-07.This means for one rupee of sales, the company needs

Rs.0.10 of net Current Assets.



To conclude, the overall assets turnover ratios show little improvement. The Current

Assets turnover ratio has improved while the fixed assets turnover ratio is declining.

PROFITABILITY RATIOS

Gross profit margin reflects the efficiency with which management produces each unit

of product. This ratio indicates the average speed between the cost of goods sold and the sales

revenue. A higher gross profit margin implies that the firm is able to produce at relatively

lower cost. This ratio has increased from 0.30 to 0.32.This is due to increase in cost of goods

sold and sales.

Net profit margin ratio indicates the management’s efficiency in manufacturing,

administering and selling the products. A firm with high net margin ratio would be in an

advantageous position to survive in the face of falling selling prices, rising cost of production

or declining demand for the product. There is a decrease in net profit margin ratio from 0.10 to

0.08 as the cost of goods sold and sales are increased.



COMPONENTS OF WORKING CAPITAL

CASH MANAGEMENT

Cash is the important Current Asset for the operations of the business. Cash is the basic

input needed to keep the business running on a continuous basis. It is also the ultimate output

expected to be realized by selling the service or product manufactured by the firm. The firm

should keep the sufficient cash not more or less. Cash shortage will disrupt the firm’s

manufacturing operations while excessive cash will simply remain idle, without contributing

anything towards the firm profitability. Thus, a major function of financial manger is to

maintain a sound cash position.

Cash is the money which a firm can disburse immediately without any restriction. The

term cash includes coins, currency and cheques held by the firm, and balances in its bank

accounts. Sometimes near cash items, such as marketable securities or bank term deposits are

also included in cash.

Cash management is concerned with the managing of:

Cash flows into and out of the firm.

Cash flows within the firm.

Cash balances held by the firm at point of time by financing deficit or investing surplus

cash.

Sales generate cash whish have to be disbursed out. The surplus cash has to be invested

while deficit has to be borrowed. Cash management seeks to accomplish this cycle at

minimum cost. At the same time it seeks to achieve liquidity to control.

EVALUATION OF CASH MANAGEMENT PERFORMANCE

The evaluation of cash management performance is made by analyzing the financial statement i.e., balance sheet.



The use of ratio analysis is made for the purpose of evaluation. Various conclusions

have been drawn by making comparison over a period of time.

The following ratios have been used to evaluate different aspects of cash management.

1. Cash to Current Assets ratio.

2. Cash turnover ratio.

3. Average age of cash.

CASH MANAGEMENT IN HIND ENGINEERING

WORKS

COMPONENTS 2005-06 2006-07

a) Cash and Bank balance 18,92,534.02 2,19,153.87

b) Total Current Assets 5,516,4721.41 3,29,57,742.33

c) Total Current Liabilities 4,36,66,699.58 2,60,89,358.37

Ratio %

d) Cash to Current Assets ratio (a/b x 100) 3.4% 0.66%

e) Cash ratio (a/c) 4.33% 0.84%

f) Average age of cash (days) (a/c x 365) 16 days 3 days

Cash to Current Assets ratio:

The cash to Current Assets ratio indicates the extent to which the Current Assets are

represented by cash and bank balances. Thus, the lower this ratio the greater is the profitability

of the concern.

The cash and bank balance reduced from Rs.1892534.20 in 2005-06 to 219153.87 in

2006-07. This is because the company had to pay some instalments.The cash to Current Assets

ratio decreased from 3.4% in 2005-06 to 0.66%in 2006-07.

Cash ratio:

The cash ratio decreased from 4.33% to 0.84%. The company for the year 2006-07

carries a small amount of cash.

Average age of cash: Belgaum Institute of Management Studies- Degree college


It indicates the period for which the cash remains unused. So the firm should try to

minimize this period in order to achieve optimum utilization of cash. The average age of cash

decreased from 16 days in the year 2005-06 to 3 days in the year 2006-07. From this fact it is

clear that the company is utilizing the cash effectively. A continuous check of all the cash and

bank balance is made and it is reported to the top management of very low or high cash

balances. Future forecasts of cash are made to meet the unexpected demand.

RECEIVABLES MANAGEMENT

Receivables management constitutes a substantial portion of Current Assets of several

firms. For example, trade debtors in India, after inventories, are the major components of

Current Assets. They form about one third of Current Assets in India. Granting credit and

creating debtors amount to the blocking of firm’s funds. The interval between the date of sales

and the date of payment has to be financed out of working capital. As substantial amount are

tied up in trade debtors, it needs careful analysis and proper management.

Establishing optimum credit policy.

A firm’s investment in accounts receivables depends on:

a) The volume of credit sales.

b) The collection period.

The volume of credit sales is a function of the firm’s total sales and the percentage of credit

sales to total sales. Total sales depends upon market size, firm’s market share, product quality,

intensity of competition, economic conditions etc. The finance manager hardly has any control

over these variables. The percentage of credit sales to total sales is mostly influenced by the

nature of business and industry norms.

The term credit policy is used to refer the combination of three decision variables:

I. Credit standards,

II. Credit terms.

III. Collection efforts.

On which the finance manager has influence. Credit Standards are criteria to decide the type

of customers to whom goods could be sold on credit. If a firm has more slow paying



customers, its investment in account receivables will increase. The firm will also be exposed to

higher risk of default.

Credit terms specify duration of credit and terms of payment by customers. Investment in

account receivables will be high if customers are allowed extended time period for making

payments.

Collection efforts determine the actual collection period. The lower the collection period, the

lower the investment in accounts receivables and vice- versa.

RECEIVABLES MANAGEMENT IN HIND

ENGINEERING WORKS

Debtors turn over = Credit sales Debtors

Year 2006 = 57513403.6344056052.26

= 1.30 times

Year 2007 = 63563922.48 23219060

= 2.73 times

Average collection period = 360___________ = Debtors X 360 Debtors’ turnover Sales

Year 2006 = 360 1.30 = 276 days

Year 2007 = 360 2.73 = 132 days



To conclude the Debtor’s Collection period has decreased from 276 days in the year

2005-06 to 132 days in the year 2006-07.This shows there is improvement in the debtor’s

collection period.



INVENTORY MANAGEMENT

Inventories constitute the most significant part of Current Assets of a large majority of

companies in India. On an average inventories are approximately 60 percent of Current Assets

in public limited companies in India. Because of the large size of inventories maintained by the

firms, a considerable amount of funds is required to be committed to them. It is, therefore,

absolutely imperative to manage inventories efficiently and effectively in order to avoid

unnecessary investment.

Nature of Inventories:

Inventories are stock of the product company is manufacturing for sale and the

components that make up the product. The various forms in which inventories exist in a

manufacturing company are:

Raw materials are those basic inputs that are converted into finished product through

the manufacturing process. Raw materials inventories are those units which have been

purchased and stored for future productions.

Work-In-Process inventories are semi manufactured products. They represent products

that need more work before they become finished products for sale.

Finished goods inventories are those completely manufactured products which are

ready for sale. Tocks of raw materials are work in process facilitate production, while

stock of finished goods is required for smooth marketing operations. Thus, inventories

serve as a link between the production and consumption of goods.

Need to hold inventories:

A company should maintain adequate stock of materials for a continuous supply to the

factory for an uninterrupted production. It is not possible for a company to procure raw

materials whenever needed. A time lag exists between demand for materials and its supply.

Also, there exists uncertainty in procuring raw materials in time on many occasions. The

procurement of raw materials may be delayed because of such factors as strike, transport



Disruption or short supply. Therefore, the firm should maintain sufficient stock of raw

materials at a given time to streamline production.

Work in process inventory builds up because of the production cycle. Production cycle

is the time span between introduction of raw materials into production and emergence of

finished product at the completion of production cycle. Till production cycle completes,

stock of work in process has to be maintained. Efficient firms constantly try to make

production cycle smaller by improving the production techniques.

Stock of finished goods has to be held because production and sales are not

instantaneous. A firm cannot produce immediately when goods are demanded by

customers. Therefore, to supply finished goods on a regular basis, their stock has to be

maintained.

Objectives of inventory management

To maintain a large size of inventory for efficient and smooth production and sales

operations.

To maintain a minimum investment in inventories to maximize profitability.

Ensure a continuous supply of raw materials to facilitate uninterrupted production.

Maintain sufficient stocks of raw materials in periods of short supply and anticipate

price changes.

Maintain sufficient finished goods inventory for smooth sales operation, and

efficient customer service.

Minimize the carrying cost and time

Control investment in inventories and keep it at an optimum level.



INVENTORY MANAGEMENT IN HIND

ENGINEERING WORKS

PARICULARS 2005-06 2006-07

a) Average inventories 93,8100.00 14,98,854.00

b) Cost of goods sold 5,08,94,023.62 5,72,07,116.05

c) Inventory turnover ratio (b/a) 54.25 38.16

d) Inventory conversion period (days) (a/bx360) 7 9

Inventory turnover ratio

This ratio has been decrease from 54.25 in 2005-06 to 38.16 in 2006-07. Steps should

be taken to increase the inventory turnover ratio for better management of inventories and

reduce the cost of inventories.

Inventory conversion period

It refers to the period that manufacturing unit takes to clear a lot of stock. It has

increased from 7 days in 2005-06 to 9 days in 2006-07. It is desirable to have short conversion

period because it will help in reducing accumulation of inventories.

The efficiency in turning the inventories is deteriorating. The company’s utilization of

inventories in generating sales is poor



7S MODEL

OF



MC KINSEY

The Mc Kinsey 7 - S Framework

Mc Kinsey Company, a very well known management

consultancy firm, developed the 7-S framework. It aimed to diagnose the cause of the company

problem and to formulate program for improvement.

Following is the flow chart of 7-S model:


Staff

Structure

SuperOrdinat

eGoals


1) Super Ordinate Goal :

This may be considered to “company purposes”. According to

framework super ordinate goal refers to “…a set of values and aspirations, of them unwritten

that goes beyond the convectional formal statement of corporate objectives. Super ordinate

goals are the fundamental ideas around which a business is build. They are its main values.

They are the board notions of future directions that the top management team infuses

throughout the company. They are the way in which the team wants to express itself to live its

own mark.

VISION AT "HIND GROUP"

"HIND GROUP OF INDUSTRIES” is committed to provide high quality products,

which will delight customers.

They shall involve all employees in quality improvement process and continuous

improvements in all functions.


Systems

SkillsStyle

Strategy


They shall emphasize more on preventive measures rather than

rectification of errors.

They shall involve sub-contractors and guide them for achieving the required quality of

products and services

2) Structure:

It is the skeleton of the whole company edifice. Company structure refers to the

relatively more durable company arrangement and relationship. It prescribes the formal

relationship among various positions and activities. It includes arrangement about reporting

relationship, how the company member is to communicate with other members, what roles to

perform and what rule and procedure exist to guide the various activities performed by

company members, are all parts of company structure.

ORGANISATION CHART


U. M. KAKATKAR

MANAGING DIRECTOR

P.N.KAKATKAREXECUTIVE DIRECTOR

A.D.BIDKARDIRECTOR (HI-TECH)

S.T.SHINDE

WORKS MANAGER

MANAGER

MARKETING

MANAGERACCOUNTS

MANAGERPURCHASE

MANAGERAdmin. /Personnel

MANAGERHeat Treatment

MANAGERQuality Control

MANAGERQuality Control

Sr. MANAGERProdn. & Planning

Sr. MANAGERSemi-Finish Opn.

ENGINEERDevp. & Tooling

QC INCHARGELINE - I

QC INCHARGELINE - II

QC INCHARGELINE - III


3) System:

System refers to all the rules, regulation and procedure, both formal that compliment the

company structures. It includes production planning and control system, capital budgeting

system, training and development system.

The company adopts 5-S concept, Total Productive Maintenance policy, Safety policy,

Environment Policy, Quality assurance System, which contains the rules and regulations to be

followed. All the activities are explained in detail for training the new employees.

3)3) Style:-

Style is one of the seven levels, which top management can use to bring about company

change. Companies differ from each other in their style of working. The style of company

becomes evident through the pattern of action taken by member of the top management

scheme over a period of time. Belgaum Institute of Management Studies- Degree college

FINALQC

INSPECTORS.

ENGINEER

Maintenance (Elect. / Mech.)

PURCHASE OFFICER

LINE MANAGER

MAHINDRA & OTHERS PRODUCTS

LINE INSPECTORS.

SHIFT INCHARGES

STAGE QC

INSPECTORS.

LINE MANAGER FOR

TATA MOTORS LIMITED


The company emphasis on quality and maximum utilization of resources. The company

adopts “QUALITY POLICY” with help to increase efficiency and cost reduction. The

company is planning to produce more complicated products having additional value.

QUALITY POLICY

HIND Group manufacturers and suppliers are committed to:

Meet customer requirements and strive for excellence through continual

improvement of our products, processes and systems.

Involve all employees and other interested parties and work with team spirit in

achieving organizations objectives.

Take decisions and actions based on analysis of data and information to ensure

improvement and growth.

5) Staff

Staffing is the process of acquiring human resources for the company and ensuring that they

have the potential to contribute the achievement of the company’s goals. It is selecting people

for specific company position and developing in them the ability and skills that they would

need to be effective in these and subsequent assignments. The staffing function applies to the

whole company.

It is the policy of the company to make all man power allocation on the basis of

projections made through the approved annual manpower plan. The company believes that

ensuring optimum utilization of human resources can be achieved only by proper planning

considering production and development activities. It is therefore, essential that all personal

activities such as recruitment, Training, Transfers, career and succession planning should be

conformed to the approved annual plan. The company expects all departments to conform

strictly to the norms and procedures of the manpower plan lay down by management.

66) Skill



The skills refer to the Dominant attributes or capabilities that exist in the individuals. The

term skills include those characteristics, which most people use to describe the company.

Companies have strengths in number of areas. These are developed over a period of time. The

company 5-S System, which was first originated in some foreign countries, Quality assurance,

etc are some of the skills of the company.

The capabilities and competencies that exist within the company. They think in

advance and build infrastructure. Decision-making is fast as the partners are directly involved

in infrastructure, manpower planning etc.

7) Strategy:

The strategy refers to short term or long-term policies. It means the set of actions that you start

with and must maintain. The direction and scope of the company over the long term.

Longer-term prospects post deregulation suggests substantial ongoing growth potential.

Network expansion, product development, distribution efficiencies, and cost reduction all offer

considerable scope set against a continuing background of consistent demand growth. Produce

more critical components having additional value and concentrate more on exports.



DESIGN OF

THE STUDY



OBJECTIVES.

To expose to ourselves the working of organization and management.

The main object is, to estimate the working capital requirement of Hind Engineering

Works.

To study the inventory management.

To analyze the cash management.

To evaluate the profitability of the firm.

To understand the overall functioning of Hind Engineering Works.

SCOPE.

The project involves understanding of organizational study, which was carried out in HIND

ENGINEERING Works, Belgaum.

The CEL is a project pertaining to organizational study and working capital management at

Hind Engineering Works. This study covers the working of different departments, profile of

the company, product profile and other related aspects.

LIMITATIONS.

This study is limited to collect 2 years data.

The accuracy of the results depends upon the information present in the Balance sheet

and Profit and loss account of the company.

There may be some errors and mistakes in data interpretation

In plant training period is short.

Some data is collected from secondary source.

The results are based on the assumption that the information provided by the

respondent was correct.



RESEARCH DESIGN AND METHODOLOGY.

A design is the program that guides the investigation in the process of collecting, analyzing and

interpreting observation.

Methodology is the systematic approach to the given problem. In other words it is the way in

which we go for the collection of data.

Data is collected through;

Primary data.

Secondary data.

Primary data is the actual and very important data collected by investigator.

SOURCES:

i. Discussion with different managerial personnel.

ii. The financial records of the company

iii. By personal observation.

iv. By discussion with employees.

Secondary data is the data which is already collected by some one else and which is used

for our study purpose. It is the data, which gives relevant information in different fields

wherever we want.

SOURCES:

Internet.

Company manuals.

Text books



FINDINGS



AND

SUGGESTION

S



FINDINGS

It is a profit making concern

The operating cycle is negative for the current year, hence beneficial to the company. But,

too much reliance on trade creditors may be beneficial in short run but in the long run this is

bound to create trouble since it spoils the reputation of the firm. So the firm should try to

reduce the creditors.

The liquidity ratio and the net profit margin ratio are deteriorating. Whereas the assets

turnover ratio has shown a little improvement.

The cash management and receivables management shown a positive indication whereas the

management of inventories is deteriorating.

SUGGESTIONS

Working capital has to be increased.

Liquidity position is quite satisfactory. Working capital should be managed effectively

so that the liquidity position is not affected.

More attention should be given to inventory management.

Reduce the creditor’s period.

Affix management sayings in every department.

To provide proper rest rooms and canteen facilities.

To make the workers strictly follow the safety rules.

To go for direct exports.

To maintain cleanliness in purchase department.

To conduct management games/ cultural programs for workers so that they come into

contact with one another, this helps to keep a healthy relation and a healthy environment.

The Company should promote, expand, acquire more human resources, produce more,

and do more sales.

Conduct campus interview.



CONCLUSION

HIND ENGINEERING was established in the year 1963. Since 1963 it has been

successfully carrying out its business activities. In this unit there is a demand for experienced

and qualified people.

The industry is well equipped with computers and is controlled by competent persons.

There is a good labor management relationship maintained. Workers directly contact the

personnel department in case of difficulty. Thus, it has created a friendly atmosphere for the

employees and gives them freedom to work freely. The industry also gives benefits from its

various schemes. The overall working capital management in the company could be described

satisfactory.

This project have not only helped enhancing my knowledge but also have create lot of

interest in this area and also have helped me in knowing the present corporate working which

have generated lot of confidence and perfection.



ANNEXUR

E




GROUP ACHEIVEMENT

hind project main copy

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