inernship project at bhagyarekha

8/7/2019 Inernship Project at Bhagyarekha

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A

PROJECT REPORT

ON

BUSINESS MODEL

AT

BHAGYAREKHA ENGINEERS PVT. LTD.

SUBMITTED BY

PRIYANK PATEL

IN PARTIAL FULFILLMENT OF

Post Graduate Program (PGP)

(2009-2010)

PROTON business school - Indore



PROTON business school | Project report 2

ACKNOWLEDGEMENT

I take immense pleasure in completing this project and submitting the final project report.

This project has been a platform in my learning about the Manufacturing sector and gave the

platform to acquire knowledge in this area. I am deeply indebted to my institution PROTON

business school, Indore to provide me an opportunity to undergo such a project, which gave me

thorough insights and experience of the corporate culture that will always milestone in the path

of my successful career.

The last 2 month with BHAGYAREKHA ENGINEERS PVT. LTD. has been full of learning

and sense of contribution toward the organization. I would like to thank BHAGYAREKHA

ENGINEERS PVT. LTD. for giving me an opportunity of learning and contributing through this

project. I also take this opportunity to thank all those people that made this experience a

memorable one.

A successful project can never be prepared by the single effort of the person to whom project is

assigned, but it also demand the help and guardianship of some conversant person who helped

the undersigned actively or passively in the completion of successful project.

In this context as a student of PROTON business school, I would first of all like to express my

gratitude to Mr. Amitbhai Naik Ignatius (Project Guide) for assigning me such a worthwhiletopic ³Study of Business Model´ to work upon in BHAGYAREKHA ENGINEERS PVT. LTD.

The project couldn¶t have been completed without timely and vital help of other office staff.

Special thanks to Mr. Rakeshbhai Naik, Mr. Dhirubhai Patel, Mr. Devdas Manon, Mr.

Satishbhai Patel, Mr. Hitesh Agnihotri, Mr. Yogeshbhai Mistry, Mr. Kiritbhai Patel, Mr.

Piyushbhai Chahan, Mr. Hitesh Patel & Mr. Bhavin Naik for their invaluable guidance, keen

interest cooperation inspiration, and of course moral support through my project session.

- Priyank Patel




INDEX

Executive summary«««««««««««««««««««««««««««««......4

Company profile5

1. Production department: ........................................................................................................ 7

2. Marketing Department: ...................................................................................................... 16

3. Human resource department:.............................................................................................. 26

4. Finance department: ........................................................................................................... 31

5. SWOT Analysis: ................................................................................................................ 36

6. Recommendations: ............................................................................................................ 37

7. Bibliography ...................................................................................................................... 38




EXECUTIVE SUMMARY

The project titled ³Business model´ being carried out for Bhagyarekha Engineers Pvt. Ltd.

Company operates in manufacturing sector & producing textile dyeing machines with high

quality, less payback period & cleaner technology.

The evaluation of textile sector has been increased through decades, which is best seen in

customer rise. Now a day¶s cultural trends is changing rapidly & created a challenge to cope up

with demand.

According to the study of the textile markets, it is being observed that there are lot of different

type of dyeing machine are available in the markets and some of them are really doing well . In

near future a cleaner technology is required to reduce Global warming & to save the planet. So

there is a good potential market to develop cleaner & efficient technology machine through

innovations.

In this project the great emphasis is given to the Business model with respect to optimize profit

& maximum utilization of available resources through various marketing, financial & production

strategies. The prime focus is to maximize customer satisfaction.

I hope Bhagyarekha Engineers Pvt. Ltd., Surat will recognize this as well as take more references

from this project report.

The main objective of this project is to know more about different aspects to increase demand &

market share in perfect competition.

Marketing strategy & financial position of the company has been given more emphasis to run

company at full capacity with lowest cost.

After analyzing the feedback the conclusion has been made that the National & International

textile market has lots of potential customer, only thing is to more systematic & channelize effort

is required.




Company Profile:

Name of organization : Devrekha (Bhagyarekha) Engineers Pvt. Ltd.

Address : Sachin, Surat- 394230, Gujarat, India Year of establishment : 1982

Type of business : Manufacturing of textile machine

Capital structure : Partner¶s own capital Involved

Area : 1100sq. Meters

Turnover : 15 to 17 corers / annum

Objectives : Saving energy

Reduce pollution

Build safe environment

Eco friendly

Timely supply of products Reduce rejections

Missions : Saving energy, increases year profit & reduce

pollution worldwide

Core value : be a leader in dying technology in world through

continuous research & development

Owner : Mr. Devendra Naik

Directors : Rakesh R. Shah

: Amit J. Naik

: Dhirubhai B. Patel

: Rakesh T. Naik

: Hitesh Agnihotri

: Devdas Manon

: Lallubhai P. Patel

: Nareshbhai M. Patel

: Yogesh Mistry: Satishbhai H. Patel

: Rahematali M. Shaikh

: Arunkumar R. Pandey

: Madhukar Nair




PRODUCTION DEPARTMENT




1. Production department:

1.1 How production plan is prepare from sales plan:

As Bhagyarekha Pvt. Ltd. is a small scale company, so the long term sales plan or 6 to 8

month sales plan is not prepare. They basically make sales plan revealed by the

marketing department for next 15 to 30 days.

Now, we will see how practically it works in Bhagyarekha Pvt. Ltd. company.

Marketing department reveal plan to the directors of the company i.e. 15 to 30

days. Suppose 15 machines.

Directors of company will make master production sales i.e. detail of machines

to be produce in next 7 days in order to execute the order on a promised date.

Thus production plan is prepared from the sales plan by Bhagyarekha Pvt. Ltd.

1.2 How production plan is converted into MRP and ultimately in Purchase plan:

Now, they made production plan for making of 15 machines. Material requirementdepartment just kicks of its process. Material requirement department head Satishbhai

Naik will made the bill of material report for 15 machines and send it to store

department. Store department will show the deficit or excess of material available in

store and asked to purchase department for deficit material to purchase as per the

pending order.

As they are working since 1982 they have an experience which product can be

delay and how much to order in excess. For e.g. nuts and bolts they generally order more

then required. After the material requirement plan, purchase department will make

purchase plan considering the following equation.

Material requirement

Pending order

Less stock available

Net requirement

1.3 Plant location:

Proper selection of plant location enables the enterprise to operate smoothly, efficiently

and with minimum cost. Manufacturing and distribution cost may vary to an extent 10

%.Benefits of plant location for Bhagyarekha Pvt. Ltd.:

Company is located in the prime industrial area Sachin (GIDC). It is just 2-3

Kms away from vast market of Surat dyeing houses and even good market in

Sachin itself.




Company is located on the main road so heavy vehicles can easily move and

work can be done easily and quickly. Because of on the main road so

advertisement can be done automatically up to some extent.

Sachin is nearer to railway station and Highway no. 8. So transportation facilities

available all the time. So we can say very good connectivity.

Hospitals and other various organizations are also running in Sachin and very

near to the company.

Skilled labor is available at economical cost for company as it is near to sub

urban area like Navsari, Bardoli etc.

Various banks are available in sachin. So Good banking facilities for company

Sachin is situated near coastal area so there is always pleasant climate through

out the year.

Various other services like drinking water, communications etc. are easily

available for the company employee.

1.4 Types and classes of material handling equipments:

Trolley

Chain & pulley

Iron rod

Crain

Truck

Out of state delivery through transport

Out of country delivery through container under inspection of excise department

1.5 Inventory control systems:As we all know the firm, which better manage its inventory (it may be finished goods or

raw material or work in progress goods) can reduce its expenses significantly and

ultimately get an edge over its rival firms.

If we see how Bhagyarkha Pvt. Ltd. is managing its inventory they are following

properly the guidelines of ISO ± 9001 & maintain Max - min inventory control system.

As Bhagyarekha Pvt. Ltd. is an engineering firm so it is obvious they have to

maintain nearly 1800 parts and it is really a crucial issue.

This max ± min inventory control system is very easy. So we shall understand

how it works. Basically they are maintaining stock card, bin tag and monthly stock

report to maintain inventory.

They maintain stock card for each & every parts and the card lies in the rack. On

the top of the card Max-min amount of stock is written. As stocks diminish to its

minimum level, they ask purchase department to fulfill the requirement. As they have a

vast experience so never occur access or shortage of stock as order is put in advance

before minimum level is reach.




Bin tag is used for those product or parts, which are prepared in the company or

the brought out products for which specific rack can not be allotted. E.g. motors for

chemical pushing etc. For these products, which become finish through lath department

are stocked with bin tag. These also written with max-min number, which should be

maintain.

1.6 Classification of inventories on the basis of analysis:

ABC analysis is a very important method used to control the inventory in most of the

organizations. Through ABC analyses, an organization can have a control on its 80%

value of inventory by just controlling 10-15% items. Main advantage is that it helps to

reduce cost of carrying inventory, interest and money block.

Basically, all items of inventory are divided into three types A, B, and C, where A

is the 5-10% item with the consumption value of 60-70%. B is the 15-20% items with

the consumption value of 15-20%. C is the 70-80% item with the consumption value of

10-20% of total inventory. This can vary according to organizations and its inventoryrequirement. Bhagyarekha Pvt. Ltd. maintains its inventory on the basis of ABC

analysis. It is not possible for company to control its more then 1800 items without

planning.

If we analyze further, in A class of items, there are two class minimum and

maximum. In Bhagyarekha Pvt. Ltd. they do not late it more then minimum to safety,

because that may lead to block of money. For e.g. suppose for one item min. is 3 and

max. is 5 then they will keep only 3 such items. Such as S.S coil, stainless steel tubes,

control valve. Similarly for B class of items, they follow same procedure as mention

above. Items include in B class are Motor, S.S bar, S.S. circle. For C class also the

procedure is same. But Item of C class they maintain to maximum level as item does notcarry high amount of money. Such items are nuts, bolts, and other consumable items.

Thus, analysis of inventory in Bhagyarekha Pvt. Ltd. is done very systematically.

1.7 Material codification system:

It is a system in which each parts or product is given different codes for identifying the

particulars product. Alphanumeric codes, which are given to different part, are unique so

that computer will able to keep accurate information in it.

Now, we will see how Bhagyarekha Pvt. Ltd. is using this system in the store

department.

1.7.1. BO123: BO means bough out items

E.g. valves FRI, pressure gauge, Nuts and bolts, pressure switch

1.7.2. C12: C means consumable items

E.g. welding rod, grinder, buffing wheel

1.7.3. FG012: FG means finished goods which is made in factory from bought out items

into finished goods by lath department




1.7.4. JB022: JB means job prepairing items

E.g. SS bar, circle

1.7.5. RM045:RM means tools related item

E.g.SS bar circle

1.7.6. TD: T means tool item and D means any tool

E.g. Drill, Screwdriver

1.8 Material receipt procedure:

In order to know receipt procedure it is better to understand it step wise from material

received from QC (quality controller) to store department and after that to workers.

First of all store department will receive all required material from the QC

department after they got from purchase department.

It should be notice here that stock is kept according to the prior planning of

machines to be produce in near in future which is already revealed by the marketing

department.One should also know that store department reveals the information about the

max & min stock of parts to purchase department. So what to purchase & what not to

purchase or which stock should be delayed etc. is wholly depend on purchase

department as they are in close contact with marketing department.

Example:

1. 1.5 inch steam control valve require in 22-25 days.

2. 3/8 pressure gauge require in 15-30 days. (to be purchase from Baroda)

3.

Argon gas cylinder require in 1 day.

These are example we have given in order to show that store department give prior information to purchase department for proper planning of purchase & receiving of

material. If some goods for e.g. the item no.1 which require 22-25 days, it is necessary to

get that product at right time so that they don¶t have to purchase in rush. One point here

need to highlight is that if product get delayed then there are various cost incur.

They might have to purchase from local market i.e.at higher rate. (Note:

Bhagyarekha Pvt. Ltd. always purchase parts directly from factories so that cost can be

reduced and can achieve competitive edge.)

Goodwill may also get damage if delay in delivery of machines and cost may be

to lose customer.

So, from all this decision we can say that Bhagyarekha Pvt. Ltd. is managing

materials efficiently and doing brainstorming for each and every process.

Store department will get all require materials after it passed from QC department

and QC department gives QC materials passed card for which entry is made in the

register as well as in the integrated computer system.




1.10 Material issue procedure:

By taking example following are the step for material issue.

Suppose sells department get order of 5 jet dying machines. Then purchase

department will see current availability of stock and if any deficits of material

then place the purchase order.

After the store department is given required stock, production department will

approach the store department for getting required material for producing 5 jet

dying machines, so that store department will deliver adequate material to the

production department, which will reduce wastages and decease cost.

Now store department will approach to material requirement department which

will give them bill of material report of jet dying machines.

All above steps are required for receive parts which are used directly in production of

machines.

For the consumable items like welding rod, buffing wheel, etc. workers have to approach

store department with requisition slip for getting the required material.




1.11 Purchase procedure:

Marketing

Production &Material planning

Indent to purchase

Inquiry

Quotations

Comparison

statement

Approved supplier

Purchase order

Delivery

Quality control

Rejected

Supplier

AcceptedStore

department

Job worker

Quality control

Store

Assemble

Despatch

Rejected or send back

Inventory tostore




Marketing department: Marketing department will give the detail of the demand of the

various products in the market to directors of the company.

Production & Material department: As soon as marketing department gives the details of

the order received of a particular product of suppose x quantity the production & material

department prepare bill of material report and also check the current inventory report fromthe store department & pending order so the correct purchase order can be place.

Indent of purchase: As information received from marketing department suppose x

machines. Then material required head Mr. Rajesh Naik will prepare indent of purchase

according to the delivery date.

Procurement planning: In the procurement planning purchase department will buy more or

less material then information available from the bill of material & store department because

it may happen that some material gets wasted and some time may remain excess. So with

their vast experience & intellect they buy required material in the right quantity.

Inquiries: After procurement planning, inquiry is done to various suppliers through e-mail,

post, telephone etc. they may also contact the new suppliers and about their products and

company profile if they are interested to deal with Bhagyarekha Pvt. Ltd.

Quotation: Most of the time, they ask for quotation from the supplier for the items, which

prices fluctuate more. E.g. stainless steel coils which is one of the most significant raw

material of the company. So they always try to purchase the SS coil, when the prices are

lowest.

Comparison: As such as comparative statement is made thoroughly they make decision after taking into consideration all the important factors.

Approval of supplier: For each product there are 4-5 suppliers which are approved earlier

and then proper comparison is done.

Purchase order: Finally purchase order is placed to decide supplier with due date & delivery

date. E.g. due date 4/2/2010 & delivery date 1/2/2010. Delivery date is the date which if

delayed by supplier then it can be granted but due date is the dead line, if it crossed then 5%

penalty is been charged.

Important point in purchase procedure is the Negotiation: Price negotiation is done atBhagyarekha Pvt. Ltd. with supplier. As there is a thumb rule that those who want to sell has

to proceed to the customers.

Person who come to negotiate from the supplier will see how customer¶s company is

running and how will they get benefit if they establish relationship with this customer.

Concern for long term view they may reduce their price.




1.12 Quality control system:

Quality control is one of the core values for Bhagyarekha Pvt. Ltd. In this company they

never compromise in quality matter.

This can be seeing from milestone they have achieved

They obtain ISO 9001 certified company

They have client in 16 different countries

Since establishment in 1982, they are improving the quality by continuous R &

D.

They won 27 national & international awards.

Bhagyarekha Pvt. Ltd. in house R&D has been recognized by scientific &

industrial research, government of India.

Quality control system of company begins as soon as raw material enters into the gate till

customer satisfies by their product. They also provide best after sales services & also take

care of customer¶s grievances.

As soon as purchase department receives all the raw material they have ordered, quality

check (QC) is done by MR. Bhavin Naik. All raw material checked by two quality

checking measures i.e.

1. Minimoly detector

2. Chemical analysis reports

Now if the material is satisfactory then send to store department otherwise given back to

respective supplier.

Now, store department will receive 3 types of materials

1. Ready to use material: which is directly used for assembly of machines e.g.various nuts & bolts, meters etc.

2. Consumable items: which is directly been consumed in production department.

E.g. welding rod

3. In process materials: which are not directly used for assembly of machines but

are process further in lath department. E.g. flange

Now, for ready to use material & consumable item, they are not generally doing QC as

they rely on supplier¶s trustworthiness and certificates or guarantee they give.

Now for in process materials coming from lath department are checked by Mr.

Anilbhai and then passed on to store otherwise send back to lath department.Now passed material available in store department is been send to production

department and finally assembly of product. At this stage assemble product is again

checked by Mr. Naresh Patel and Mr. Viral Patel, if it is ok then go for dispatch otherwise

send back to production department.




MARKETING DEPARTMENT




2. Marketing Department:

2.1 Structure:

MarketingManager

MarketingAgent

AssitantManager




2.2 System of Marketing:

Inquiry by customer

Quotation

Finalizing of payment

Order confirmation

Delivery Scheduleof project

Production planning

Execution of production planning

Quality controldepartnement

Yes

Despatch

No

Productiondepartment




2.3 Types & classification of Product:

Bhagyarekha Pvt. Ltd. produces mostly all type of textile dying machines. They also

produce Long Jet dying machine, sealess pump, eco stenter machine etc. They produce

this entire product with varying capacities. E.g. Jet dying machine with capacity range

from 50kg to 400kg and also with different features

Features:

Multi-Nozzle soft flow economical Jet dyeing machines:

Ultra low liquor ration ± 1:1 (wet fabric)

No. of vary soft flow nozzles

No pilling effect

Dye 30-500g. / mt.sq. fabrics (woven & knitted fabrics) work as a jet dyeing machine for polyester, cotton & blend fabrics

special plaiting arrangement to reduce water consumption

counter flow as well as reverse flow

reduce pollution plant size

High temp. up to 140¶c

Capacity 10-600kg

User friendly economical Jet dyeing machines:

With basket:

Capacity ± 200-250kg (single tube)

Liquor ratio ± 1;1 (wet fabrics)

Dye 30-400g. / mt.sq.fabrics (woven & knitted fabrics)


Fabrics speed ± 300 Mts./min

With Teflon rod:

Capacity ± 300-400g. / mt.sq. fabrics

Liquor ration ± 1:1 (wet fabrics)

Dye 30-40g. /mt.sq. fabrics (woven & knitted fabrics)


Fabrics speed ± 300 Mts./ min

Loop length up to 3000 Mts.




Relax rotary drum machine:

High Temp. up to 140¶c

Working pressure ± 4kg/cm

Capacity -200-400kg

Main vessel & basket SS316L

Motor 10 hp with A.C. drive

Planetary gear box

Also can drumming without bags/with bags

HT. HP. Soft flow dyeing machine:

Ultra low liquor ration 1:1

Dye 30-450g. /mt.sq. fabrics (woven & knitted fabrics)

No. of very soft flow nozzles & jet nozzles

No pilling effect

special plaiting arrangement to reduce water consumption

work as a jet dyeing machine for polyester, blend fabric & as a soft flow for cotton

fabric

stream dyeing process to save thermic energy & overcome uneven dyeing reduce pollution

no color inlet pump

dummy to reduce liquor ratio

High temp. 140¶c

Capacity- 50-1000kg




Fabric weight reduction machine:

low tension volumetric soft flow nozzle

flow table square pipe

excellent & even reduction with low tension & perfect rising system

moderate & auto control liquor ratio

plc base automation with graphical display & PID control

digital level controlling system for accurate controlling dozing

fully automatic & semi automatic version

easily removable filter heat exchanger

Low temp. 90¶c (max)

Vessel made by ss 316 L

2.4 Market segmentation:Bhagyarekha Pvt. Ltd. is much focused firm, towards it target market for dyeing house of

India & abroad. They are basically serving customer with mass marketing policy , but with

their world class R & D department they have produce various products according to need

& necessity of customers. They try hard to satisfy their customers by producing efficient

machine.

They are also very much conscious about quality of product. They sell same

product in the international market what they are selling in the local market. So we can say

that they serve all customers with same quality product.

So they have basically segmented customers, who are quality conscious & need advanced

product for good future.

They also segmented international market according to the business environment,

government policy & rules; customers want & desire etc. company exporting machines to

16 countries which shows that they adjust their product in different environment by

making it more advanced & less costly machines through continuous R & D.




2.5 Distribution Network:

Distribution network encompassed various question such as how to fill supply network,

which will intermediaries, what will be the market channel, etc. these distribution decision

are critical in nature as they affect the viability of the firm & product. These decisions

affect the market share of the firm & hence great care has to be taken in selection of

distribution channel.

As Bhagyarekha pvt. Ltd. produces industrial products, it doesn¶t require big,

long & costly network. They are basically operating at zero level marketing channel for

local market such as Surat, Kadodara, Amroli etc. They have recruited marketing manager

& many assistants, who are doing direct marketing and for regional and national market

they are operating one level marketing in which they recruited an individual agent for

each potential cities and countries. Regional market include Delhi, Mumbai, Amritsar, etc.

and international market include Indonesia, Nigeria, south Africa, Kenya, Canada, UAE,

china, UK etc.

In this way the distribution network of Bhagyarekha Pvt. Ltd. seems very clear and more systematic in terms of recruiting city or country wise marketing agents. Till date

they have installed more then 2000 machines domestically & internationally.

2.6 Sales procedure & study of how customer orders are processed:

As soon as an inquiry received from customer whether through verbal or telephonic or

written, quotation with price & type of product is send to the respective customers. If

customer is satisfy with proposed quotation along with terms & condition then marketing

manager or assistant of the company will go for finalize the deal. Order given by the

customer to the marketing manager will be issued to production planning department.

After that confirmation is done with material department, delivery schedule.After preparing production planning, execution of production plan is done & when raw

material is converted into finished goods, quality checking is done & accepted products are

dispatched to the respected customers.

2.7 Forecasting & sales preparation:

For the sales forecast marketing people of the company consider 3 factors:

Past data:

As far as forecast is concerned one can not forecast demand 100% accurately, but

Bhagyarekha Pvt. Ltd. with their previous experience, prevailing market condition &

expert inside to see future demand make the sales forecast 80-90% accurate. They heavily

rely on last few year sales of the company.

Forecast on the basis of seasons:

As they are market leader in the product of textile dying machines since 1982.

They have a vast experience & according to that they forecast the sales. They also consider

seasons & festival times in forecasting. E.g. In monsoon their sale goes to minimum.




Order received from customers:

This factor basically not considers in forecast but as future is uncertain. At this

stage marketing employee & sales agents both in local area & international market takes

order from their client & give forecast for coming 30-40 days. This forecast is normally

99% accurate as order from clients are mostly probably confirmed.

Now moving to the other stage sales planning preparation, they do undue

consideration to material requirement planning, capacity requirement planning and

delivery date accordingly. After all these hard work, they prepare sales plan generally for

coming 30-40 days.

2.11. Pricing Policy:

Is it easy to decide % of profit which is added to the cost? Is it easy to price according to

market competition? Now we will see how Bhagyarekha Pvt. Ltd decides their pricing.

Price which customer is ready to buy and seller is ready to sell at this price

customer get satisfies and increases his loyalty towards the company. Various factors needto be considering such as perceived value of customer, competitors price, government

polices, firm objectives etc.

There are various cost incurred such as fixed cost, variable cost, overhead cost &

definitely profit. Certain percentage is added to the return on capital employed, which

already decided,

Price = (fixed cost + variable cost +overhead cost) + % of Profit

They always keep a kin eye on up & down in steel prices which is very volatile (steel price

constitute 50% of machine cost)

They also consider the market price but they never compromise in the quality so their

prices are higher than their competitors. Their quality remains unchanged whether it is

national or international market.

2.12. Promotion & advertising:

Promotion is far more essential than developing a good product, pricing it attractively &

make it accessible etc. One should use integrated marketing communication, which is best

way of looking at the whole marketing process from the customer point of view. Five

major modes of marketing mix are as follows

Advertisement

Sales promotion

Public relation

Personal selling

Direct & interactive marketing




2.12.1. Advertising:

Company believes in ³best advertising can be done through satisfied customer´. So

they focus on to keep client satisfied by product, excellent after sale service, world

class quality, guarantee, warranty etc.

Printing & advertising: basically focus on print media such as business magazine like

Indian Textile Journal, China textile journal etc.

Audio-visual material: CD & its website on internet which is very comprehensive &

technically in detail so satisfy most of customer¶s query about company, product,

promoters, achievement etc.

Brochure & booklets: it is with full of detail which give the crux of the company to

the customer. It also provide comprehensive user manual with description of eachpart & its composition from which material.

2.12.2. Sale promotion:

Sale promotion consists of a diverse collection of tools, mostly short term designed

to stimulate quicker & greater purchase. So advertising offers reasons to buy & sales

promotion offers incentive to buy.

Trade Fair: they participate in most of these whether it is held in India or abroad

Discount & allowance: they also give discount & allowance according to marketcondition prevalent at that time.

Guarantee: they also provide guarantee on whole product for one year & replace it

immediately.

2.12.3. Public relation:

It is a group which has actual or potential interest or impact on a company¶s ability

to achieve its objective. So company is always keep on maintaining good relation

with people which boost company¶s goodwill in the market & indirectly sales.

2.12.4. Personal selling:




Sales meeting: sales representatives of organization go to each & every potential

buyer through contacting directly & meet them at their convenient time. This is

particularly for local market. They have agents in other countries.

2.12.5. Direct marketing:

They use email facilities for national & international market. In export they inform

potential buyers about product through sending catalogs. For local market agent meet

customer directly.

2.13. Sales tax on sales activity:

Following tax levied on sales activity

Excise duty

CST or GST

Surcharge

2.13.1. Excise duty:

All products are liable to 16 % excise duty. It is added to the cost of the machine

when ready to dispatch to particular customers.

2.13.2. CST or GST:

CST (central sales tax): it is levied on the products, which are sold out side the state.

It is beneficial for customer to purchase out side the state for that they have to send C

Form to Bhagyarekha pvt. Ltd. By doing this they get 4% exempt from sales tax

instead of 8% tax. It is central government tax so it goes to central government &used for whole nation development.

GST (Gujarat sales tax): it is levied on product sold in Guarat itself. For that

customer has to pay 8% tax. It goes to Gujarat government & use for development of

Gujarat. Now here reason for no exemption is that customer is going to use product

in Gujarat only so definitely he will use Gujarat roads, electricity, infrastructure etc.

all resources. So for that they have to pay 8% tax.

2.13.3. Octroi:

It is different in different cities. E.g. in Surat customer has to pay 2.5% octroi and if

outside state then they have to pay according to their city policy for octroi.




HUMAN RESOURCE DEPARTMENT




3. Human resource department:

Structure:

3.1 Introduction:

It is the most important area of any business organization. It is the art of getting things work

done through other people. Human resource department is an integral part of an organization.

It generally deals with planning, organizing, directing and controlling.

It is a micro and performing a role of protector & screener. It is mostly welfare or

merely a health & happiness department. Its function is independent. Its aim is to improve

the efficiency of people & administration.

Management of work force is very important in any organization. Enterprise run by

people as it is rightly says that manage your people & people will manage your work. It

includes different activity like recruiting, selection, manpower planning, performance

planning, employee grievance etc.

HRDIncharge

TrainingIncharge

TrainingRecorder Trainingleader

Clericalincharge

Computer Operator




3.2 Labor relation activities:

It is one of the most important & not forgettable activities in all type of organization. In

Bhagyarekha Pvt. Ltd. there is some activity which is in favor of employees.

Company provides bonus facility & accident policy. Company organized various

medical camps for employees. Company granted provided fund for employees. Confirmed

employee also given leave, incentives per machine for their good work. Company provides

uniforms, personal development class like saving, and children education.

3.3 Labor welfare measure:

3.3.1 Uniform:

Company provides particular uniform for worker and supervisors. They also provide

safety shoes.

3.3.2 Medical Assistance: If Employee get accident then medical facilities is given by company through

hospitals & medical camp

3.3.3 Children education:

Every year books are provided to children of employees.

3.3.4 Provident fund:

Company gives provident fund of 25% salary of employees.

3.3.5 Bonus:

Company gives bonus to all employees on Diwali

3.3.6

Workmen¶s compensation:

Company gives compensation to workers through bonus, overtime wages, incentiveper machine etc. If during office time or working time any accident occurs then

company give pay for injury. Provide money for dinner on night duty.

3.3.7 Insurance:

Company gives insurance to its employees & staff

3.3.8 Mobile facilities:

Company provide mobile facility to service department, marketing department,

purchase department

3.3.9 Vehicle facility:

Company provides vehicle facility for office staff personal car, for Clark &

supervisor two wheeler & for worker bus facility are given.

3.4 Training & development:

Training means increase knowledge & skills of an employee for doing a job. Training is

a short term, systematic & organized process in which non managerial personnel can

learn technical knowledge & skills.




In Bhagyarekha Pvt. Ltd. all employees are given On the Job training. They also

give ISO awareness training, safety training, learning organization training, effective

communication training, situational leadership training etc.

3.5 Employees record:

Company maintains their employee¶s records through file which contains complete Bio

data, educational qualification, appointment letter, joining report, curriculum vita, date

of birth, address of employee, type of work etc. they maintain all this in one book which

is called employee record book.

3.6 Payroll system ± wage & salary structure:

Company makes attendance sheet in which day to day attendance of each & every

employee is maintain. Salary is pay to worker according to their work experience,

performance etc. wage is cut on their absent. Salary pay to staff according to their

education, post, experience, etc. total staff salary is based on profit.

3.7 Compensation:

Company gives bonus to all employees & staff. Overtime wages paid who done

overtime according to their overtime hours. Company gives money for dinner during

night duty. Company also gives incentive per machine.

3.8 Personnel policy documentation:

Company gives some personnel policy document to its employee & officers like N.S.C.

(National Saving Certificate), K.V.P. (Kisan Vikas Patrak) etc.

3.9 Promotion:

Company promotes the employee on the basis of working performance, experience of

work, education, skills & knowledge, abilities & performance.

3.10 Transfer:

Company has no branch so division or branch transfer facility is not available. Only

department transfer is possible in company.

3.11 Recruitment & selection:

It is done through by giving advertisement in newspaper, magazine & mostly through

recommendation. Final selection is done through personal interview.

3.12 VRS scheme:

Voluntary retirement system at present there is no such scheme is available.




3.13 Performance appraisal:

For special performance company rewarded employee by cash & for overall

performance will be through increment in a year.

Staff members are included in profit sharing system. Profit share is give on the basis

of wages so better performance is converted into better profit of organization.

3.14 Safety measure:

Company gives safety measures to all employees

For welder: cloth apron, welding helmet, welding gloves, safety shoes.

For grander: safety gogals, safety gloves, safety shoes

Other workers: cloth apron, safety shoes, safety gloves

For staff: Uniform, safety shoes

3.15 Social security measures:Company gives social security for employees through cutting provident fund 25% of

salary, post recurring account, ESI (employee state insurance) 12.50% cut on salary and

company also give knowledge to worker for saving money.

3.16 Office time:

In company time for staff & employee is 9:00 am to 6:00 pm and lunch hours are from

12:30 pm to 1:00 pm.

3.17

Over time:

Normally overtime is done only when demand is very high & labor is very less. Workersare separately paid for overtime as per hours worked by them.




FINANCE DEPARTMENT




4. Finance department:

4.1 Structure:

ExecutiveAccountant

Account

clerk

Assistant




4.2 Balance Sheet for the year ended 31-3-2008

As at 31-3--2008

Amount in Rs.

Assets

Current assets

cash & bank balance 1526684

Debtors 39855306

Inventory 31065325

deposits, loans & advances 2464656

Total current assets 74911971

Investment 881500

Fix assets

Gross fixed assets 5772147

Depreciation 2059433

Net fixed assets 3712714

Total Assets 79506185

Liabilities

current liability

Creditors 71251454

tax provisions 1253776

Total current liability 72505230

Long term liability

secured loan 718855

Total long term liability 718855

Net worth

Share capital 950000Reserve & surplus 5219958

Total funds 6169958

Total liability 79394043




4.3 Profit & Loss Account:

Amount inRs.

Stock 889890Sales 83740984

less: cost of goods sold 72251738

gross profit 12379136

less: operating expense 11729274

operating profit 649862

add: Non operating income 530273

Net profit before tax &

depreciation 1180135

less: depreciation 414871

Net profit before tax 765264

less: tax 188579

Net profit after tax 576685

4.4 Ratio Analysis:

Profitability Ratios (in %):

Gross profit =

× 100

= 12379136 / 83740984 × 100

= 14.78 %

Net profit =

× 100

= 576685 / 83740984 × 100

= 0.68 %




Operation ratio =

× 100

=

× 100

= 72251738 / 83740984 × 100

= 86.3 %

Expense ratio =

× 100

= 11729274 / 83740984 × 100

= 14 %

Return on Investment (Capital employed) =

× 100

= 1180135 / 7000955 × 100

= 16.85 %

Capital employed =

= 79506185 ± 72505230

= 7000955

Liquidity Ratios (in 1):

Current ratio =

= 74911971 / 72505230

= 1.033

Liquid (Quick 0r Acid Test) ratio =

= 71557425 / 72505230

= 0.986

Liquid Assets = Current Assets ± Stock ± prepaid expenses

= 71557425




Turnover or Performance Ratios (in times):

Working Capital ratio =

= 0.863 / 2406741

= 0.00000036

Working capital = currant assets ± current liability

= 74911971 ± 72505230

= 2406741

Stock turnover ratio =

= 72251738 / 3114615

= 23.19

Average stock = (Opening Stock + closing stock) / 2

= (2669670 + 3559560) / 2

= 3114615

Inventory holding period (Stock velocity) = 360 / Stock turnover

= 360 / 23.19

= 15.52 days

Solvency ratios:

Debt / Equity ratio =

= 718855 / 79506185

= 0.009




5. SWOT Analysis:

Strength:

ISO 9001-2000 certified company

Fabric Dyeing quality : BEST

Running cost : Lowest in the world

Payback period : less then 1 year

Maintenance cost : Lowest

27 International & national awards, 3 R & D awards : for contributing to cleaner

technology

Installed technology world wide

Price : lowest compare to other International companies¶ product

Weakness:

Company is not running at Full capacity

Per unit cost is high

Lack in liquidity so financial position is not much strong Capital blockage is more than 3 months

Demand of product is less due to high competition

Production cycle is low as demand is less

Inventory management is complicated

Payment collection period is around 3 months

Terms & Conditions is not strong

Marketing is less aggressive

Opportunities:

Asia¶s largest textile market is Surat

Demand of Jet dyeing machines around 1500 per annum locally (Surat) &contribution is only 15 to16 %

Exploitation of Brand Image

Exporting in 22 countries so chances to expand market internationally

Availability of Other project work locally to reduce overhead cost (Stainless steel

work, fabrication etc from L & T, Essar etc)

Chances to expand vertical integration as relation is strong with supplier

Chances of Cost cutting through bulk purchase of steel in cash

Threat:

Competitors coming up with low price & low quality machines

In local market customers are demanding more credit period

Competitors damaging brand of company through rumor

Customers demanding even more low price machine & company now can not

compromise in quality

Per annum demand of company¶s product is saturate due to high competition




6. Recommendations:

Now highly recommend to raise demand to run company at full capacity & for

maximum utilization of resources

(Average production is 20 machines / months & capacity is 30 machines / months)

In local market machine requirement is 1500 machines / year & company

contributing only 250 machines / year in this way company¶s market share locally is

only 15 ± 16 %.

So need to be focus more in local market to increase market share.

Current ratio is 1.03 : 1 which shows that liquidity is not sufficient & ideally it should

be 2 : 1. So here safety margin for creditors is nearly zero. So here challenge to raise

finance.

Terms & condition of payment need to be revised. Right now advance payment is

only Rs. 1 lakh that should be minimum 50 % of Market price of machine

(approximately Rs.3-4 lakh if machine MRP is Rs. 8 lakh) To increase sales need to maintain customer relationship by taking continuous

feedback & after sales services.

To increase sales in International market, personal visit at regular interval is required

by Director of company.

Cost cutting through cash purchase of steel instead of credit purchase (3 tonne steel if

purchase on cash than Rs. 3 lakh saving is possible instead of on 3 months credit)

To make marketing aggressive need to arrange regular meeting with marketing agents

& required to set target monthly rather than year

Standardize of auxiliaries should be made to reduce complexity of inventory

management

Expose more while marketing about core value (High quality & less payback period)

to increase sales.

To reduce overhead cost need to take other S.S (stainless steel) work, fabrication etc

from L & T, Essar etc which could be available locally.

To reduce liquor ratio company have done modification in one of the part of machine

(7 piece autoclave to 5 piece). This part should be patented.



7. Bibliography

Internet:

www.devrekha.com www.wikipedia.com

Books:

Financial Management (Ninth Edition) ± By I M Pandey

Production & Operations Management ± By S N Chary

inernship project at bhagyarekha

Documents