surat glass india limited

FUNDAMENTAL ANALYSIS OF GLASS BOTTLE MANUFACTURING SECTOR

S R LUTHRA INSTITUTE OF MANAGEMENT

1

A

SUMMER INTERNSHIP REPORT

ON

FUNDAMENTAL ANALYSIS OF

GLASS BOTTLE MFG. SECTOR

SUBMITTED IN THE PARTIAL FULFILLMENT OF THE

REQUIREMENT FOR THE DEGREE OF MASTER OF BUSINESS

ADMINISTRATION

SUBMITTED ON

29TH JULY 2011

SUBMITTED BY

NEMIK SHAH (107500592032)

SUBMITTED TO

S. R. LUTHRA INSTITUTE OF MANAGEMENT

BATCH-2010-12

UNIVERSITY

GUJARAT TECHNOLOGICAL UNIVERSITY, AHMEDABAD

CERTIFICATE



2

This is to certify that this summer internship project report titled “Fundamental

Analysis of Glass Bottle Manufacturing Sector” has been completed by Mr.

Nemik C. Shah, student of S. R. Luthra Institute of Management, Surat. This project

report incorporates the result of their study and analysis. The project is forwarded for

further evaluation to Gujarat Technological University.

Place: Surat

Date: 29/07/2011

Project Guide

(Prof. Rupal Khambhati)

Director

(Dr. A. S. Charan)



3



4

STUDENT DECLARATION

I hereby declare that the whole Project work on ―Fundamental Analysis of Glass Bottle

Manufacturing Sector‖ is done by me by taking the training at Surat Glass India Limited. All

the work right from the data collection, editing and analysis is done by me. No data is taken

from any other previous submitted report or any other secondary sources. The report is

prepared on the basis of my training experience of various departments at Surat Glass India

Limited and the information provided by the employees of Surat Glass India Limited. I am not

responsible for copying of this project in future by any students.

Date: 29th July 2011 Signature

Place: Surat

NEMIK SHAH



5

ACKNOWLEDGEMENT

I take this great opportunity to express my sincere to Dr. A.S.Charan, The Director of

S.R.Luthra Institute of Management for providing me an opportunity for undergoing training

at Surat Glass India Limited. I also express my special thanks to Miss. Rupal Khambhati for

guiding me to prepare the project.

I am glad to take opportunity to express my sincere thanks to Mr. D.K.Patel, Managing

Director of Surat Glass India Limited for allowing me for training at Surat Glass India Limited,

Kim.

It was only with the active support of Mr. Rajani Italiya, Marketing Manager and coordinator

who provide me all valuable information at every state of my training. I am also thankful to

Mt. Sureshbhai for providing me all financial data of the organization. I am sincerely thankful

to the managers and officers of the unit for providing me necessary information, which I have

incorporated in this report.

Last but not least I would like to express my deep sense of gratitude to all who guided me

with their valuable suggestions.

Thanking You,



6

EXECUTIVE SUMMARY

I here at the completion of my SIP at Surat Glass India Limited have got a good

knowledge in the different areas of management under good conditions and I have

acquired information from very experienced and skilled managers of Surat glass

India Limited. It was an experience which will be useful to me through my career.

Despite the present slowdown in the economy, the Indian glass container industry

has reported a double digit growth. The industry, presently dominated by 10 big

players, is likely to close the fiscal with a turnover of Rs 4,500 crore and registered

growth of 12 per cent growth. Fundamental analysis is very helpful to the investor,

which is reflected in the investment purpose. Any investors who go to systematic

investment, he/she would like to know, the complete scenario of the industry. It is

interesting to know the how the fundamental analysis helps to forecast the price of

equity.

The fundamental analysis consists of three parts; they are economic, industry and

company. All the factors are involved in this analysis were identified and studied

carefully to identify the factors in the existing environment. The data or information

collected was based on the personal interaction with the guide of the company.

Economic analysis was a task to be studied as it affected the company‘s tax, and it

will effect on the revenue of the industry. Also other factors are considered in the

economic analysis. And it will interpret for the fundamental analysis.

Industry analysis was a challenging factor for the research of the fundamental

analysis. All the sub-factors of the industry analysis were taken up from the

secondary source to analyses the each factor with the industry. And was related

those factors with the company. It also analyses the competitiveness of the each

company‘s strength, like. Quality, services, cost of R/m, etc. Company analysis is

last factors of the fundamental analysis and it is one of the most important parts of

the company. An approach was made to understand the existing company and its

impact on company‘s market share and its performance. Eventually this research

report will provide the guidelines for the investors what steps they should also take

into consideration before investing in any company for the long term purpose.



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INDEX

CHAPTER PARTICULAR PAGE NO.

1 INDUSTRY PROFILE 10

1.1 Overview of Packaging 11

1.2 Market of Packaging Industry 12

1.3 Packaging Industry in India 13

1.4 Classification of Packaging in India 14

1.5 Glass Bottle container Industry Overview 15

1.6 Glass Bottle Container Industry in India 16

1.7 Products of Glass Bottle Manufacturing Companies 17

1.8 Other Players 18

1.9 Future Outlook 18

1.10 Demand Drivers 18

2 COMPANY PROFILE 19

2.1 SURAT GLASS INDIA LIMITED 20

2.1.1 Introduction 20

2.1.2 Logo of Company 21

2.1.3 Goal & Mission 21

2.1.4 Values 21

2.1.5 Future Business Plan 21

2.1.6 Organization Structure 22

2.1.7 Major Clients 23

2.1.8 Organization Departments 24

2.2 HNG GLASS 61


2.2.2 Vision 62

2.2.3 New Development 62

2.3 PIRAMAL GLASS 63




8

2.3.2 Sales & Distribution Spread 63

2.3.3 Strong Manufacturing Presence 64

2.3.4 Significant Cost Advantages 64

2.3.5 US Presence 65

2.3.6 Quality Certified 65

3 RESEARCH METHODOLOGY 66

3.1 Introduction and Statement of Problem 67

3.2 Scope of the Project 67

3.3 Objective of study 68

3.4 Limitation of Study 68

3.5 Short Literature Review or Survey 69

3.6 Research Methodology 69

3.7 Data Sources 70

3.8 Beneficiaries 70

4 FUNDAMENTAL ANALYSIS 71

4.1 Introduction 71

4.2 Fundamentals: Quantitative and Qualitative 73

4.3 Strengths of Fundamental Analysis 73

4.4 Criticism of Fundamental Analysis 74

5 ECONOMIC ANALYSIS 76

5.1 World Economy Analysis 77

5.2 Introduction of Indian Economy 78

5.3 Growth of Indian GDP Rates 79

5.4 Economic Trends 81

5.5 Industrial Production 82

5.6 Inflation Scenario 82

5.7 Monetary Trends 83

5.8 Fiscal Trends 84

5.9 Foreign Trade 84

5.10 Foreign Exchange Reserve 85



9

5.11 Investment Decision 85

6 INDUSTRY ANALYSIS 86

6.1 Introduction 87

6.2 Industry Analysis 87

6.3 Future Demand Scope 88

7 COMPANY ANALYSIS 91

7.1 Introduction 92

7.2 Methods of Company Analysis 92

7.3 Theoretical Aspects of Ratio Analysis 94

7.4 Classification of Ratios 95

7.5 Ratios Analysis of Glass Bottle Manufacturing Sector 96

7.6 Common - Sized Analysis 106

7.7 Comparison of Common Size Statement 106

CONCLUSION 108

SUGGESTIONS 109

BIBLIOGRAPHY 110

ANNEXURE 111



10

INDUSTRY PROFILE



11

1.1 Overview of Packaging

The global packaging industry is approximately a $433 billion market. The domestic

packaging market, which is the major focus of this report, represents approximately

9%, or $124 billion of the global market. The industry consists of four general

segments classified by material type: paper and board, plastics, glass and metal.

The largest segments of the industry are paper and board and plastics, which

account for 36% and 35%, respectively, of the global packaging market. The

packaging industry is a large, fragmented market with thousands of competitors.

While packaging companies serve a variety of markets, the largest end markets for

packaging products are food and beverage. Food packaging accounts for

approximately 40% ($175 billion) of all packaging applications. Beverages represent

approximately 18% or $80 billion. These end markets are stable, non-cyclical,

steadily growing markets that are consequently attractive, regardless of the

economic climate.

The growth rate of the packaging industry is primarily driven by growth rates and

market trends within various end markets. Growth rates vary from a low of 3.2% for

beverages to a high of approximately 5% for health care products. The largest end

market, food, has historically grown at slightly less than 4% annually. It should be

noted that sub segments of an end market may grow at higher rates than the end

market itself. For example, while the beverage market has generally been a low

growth market, the bottled water sub segment of the beverage market has recently

achieved very strong growth.



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1.2 Market of Packaging Industry

One of the many reasons driving the consistent growth of the packaging industry is

the simultaneous growth in the industries that deal with packaging. As the market

needs and industries grow, alongside grow their packaging needs, therefore causing

a surge in the packaging industry. A quick snapshot of the growth trends for the

packaging industry for the past decade reveals an annual average growth of 3.5

percent per annum. The leading countries with maximum contribution to the global

package industry in terms of earning are Europe, Asian nations, North America &

Latin America.

Global Packaging Industry Figures - Top Contributors 2007-2008

The packaging industry is divided into a lot of sectors that contribute to a different set

of industries. The humongous list of packaging companies are together pooling in

earnings and revenues, from different parts of the world. Some of the biggies in the

packaging industry are companies like Crown Holdings, Ball, Owens-Illinois, and

MeadWestvaco & Smurfit Stone Container.

Packaging plays a very distinct role in today's modern consumerist economy with the

need for widespread adoption of branding and development of consumer

preferences. Any manufactured item, to gain market share, requires packaging to

ensure safety, convenience and attractiveness. Packaging is a key component for

consumption and consumer preferences in today's economy.



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1.3 Packaging Industry in India

Indian Packaging Industry Market: The Indian fascination for rigid packaging remains

intact. It is estimated that more than 80% of the total packaging in India constitutes

rigid packaging, which is the oldest and the most conventional form of packaging.

The remaining 20% comprises flexible packaging. The Indian packaging industry is

expected to grow to Rs. 82,500 Crore by 2015 from the current Rs. 65,000 Crore.

The global packaging industry is currently estimated at US$ 550 billion. Currently,

India stands at the 11th position in the world packaging industry.

With rising consumer demand and new technologies, the global packaging industry

is expected to grow at 18-20% from the current 15%. Among packaging sources,

currently plastic packaging is at 6.8 million tones and growing at 20-25% per annum,

whereas paper packaging is 7.6 million tones. Glass packaging contributes to 4-5%

and metal, 8%. 40% of the total paper production goes for packaging.

There are about 600-700 packaging machinery manufacturers, 95% of which are in

the small and medium sector located all over India. Indian packaging machinery

imports are USD 125 million. Indian packaging machinery exports are rapidly

growing. India's per capita packaging consumption is less than USD 15 against

worldwide average of nearly USD 100. The large growing middle class, liberalization

and organized retail sector are the catalysts to growth in packaging. Food and

Pharma packaging are the key driving segments.



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1.4 Classification of Packaging in India

Today, packaging is produced more quickly and efficiently. It is generally lighter in

weight, uses less material, is easier to open, dispense from, reseal, store, and

dispose.

Primary Packaging:-

'Primary' or 'Sales' packaging is packaging which forms a sales unit for the user or

final consumer, for example, a box containing soap powder.

Rigid Packaging

Rigid packaging accounts for the major packaging market in India. This is the oldest

and the most conventional form of packaging. Rigid packaging includes glass

bottles, metal cans, aerosol cans, battery cell cans, aluminum collapsible tubes,

injection molded plastic containers made of PVC, PET.

Packaging

Primary Converter

s

Rigid

Packagin

g

Flexible

Packagin

g

Woo

d Glass

Metal

Paper &

Paper

Board

Polyester

Film

Laminate

tubes

Convert the basic firm into

package grade film by

laminating, coating, printing

etc.

Plastic



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Flexible Packaging

Flexible packaging contains multi-layered laminated sheets of single or a

combination of substrates such as plastic, paper or aluminum. Flexible packaging

finds varied use because of its ability to provide strength, moisture resistance, aroma

retention, gloss, grease resistance, heat retention, seal ability, printability and low

odor.

Market Share of Packaging (By Value):-

1.5 Glass Bottle container Industry Overview

The container glass industry is highly capital intensive and needs refurbishment of

the furnaces in a cycle of every five years, on an average. Owing to this, the industry

is primarily restricted to large manufacturers in the organized sector, who account for

about 85% of the melting capacity. The industry is also sensitive to freight. The glass

manufacturing units generally cater to the markets in the radius of 300-350 km.

Thus, players with multi-location plants are at an advantageous position. This, along

with capital intensiveness, acts as entry barriers to new entrants.

The prospects of the container glass industry are linked to the derived demand from

its user industries. Major end-users, which together account for more than 90% of

the off-take are manufacturers of carbonated & alcoholic drinks, food processing,

pharmaceuticals and cosmetics. These industries are characterized by fragmented

capacities and dispersed locations.

Flexible Packaging

22%

Rigid Plastics18%

Printed Cartons

17%

Glass Bottles12%

Metal Cans8%

Caps & Closures

6%

Labels3%

Others14%



16

The container glass industry is facing threat from alternate forms of packaging like

flexible packaging laminates and plastic containers in applications like milk

packaging, intravenous fluids, blister packs for tablets and capsules. Besides, bottled

soft drinks are increasingly being sold in aluminum cans and PET bottles.

1.6 Glass Bottle Container Industry in India



players, is likely to close the fiscal with a turnover of Rs 4,500 crore. Industry

representatives said demand from liquor, beer, pharmaceuticals and, food and

beverages industries were driving growth. The industry is likely to close the current

fiscal with a turnover of around Rs 4,500 crore as compared to Rs 4,000 crore, a

year ago, registering a 12 per cent growth. The industry is bullish it would continue to

report double digit growth for the next few years.

Of the 10 major players, the three majors — Hindustan National Glass & Industries,

Gujarat Glass and Associated Glass Industries - alone has a market share of 80 per

cent of the market share. The liquor and beer industry uses around 65 per cent of

India‘s glass container production, followed by food at 20 per cent with soft drinks,

cosmetics and food contributing the rest. AGI expects its exposure to the liquor and

beer industry to rise substantially from the present.

Exports account for 10 per cent of total industry revenue of Rs 4,500 crore, he noted.

The industry caters to the US and Europe market and predominately food, cosmetics

and gherkin as finished goods. The glass-container industry in India has seen a

period of consolidation in recent years. Investment in new furnaces and improved

technology has been the prime focus.



17

This has resulted in glass container production and has more than doubled from

approximately 800,000 tons in 1997-98 to 0.14 million tons, an increase of over 80

per cent. This is despite the stiff competition faced from alternative packaging

materials. With increasing substitution by alternative packaging materials like plastic,

and paper and board, which are matching and improving the very characteristics that

used to distinguish and differentiate glass

1.7 Products of Glass Bottle Manufacturing Companies

(1) Pharmaceutical Products

(2) Beverages Products

(3) Liquor Products

(4) Beer Products

(5) Cosmetic Products

(6) Processed Food Products



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1.8 Other Players

1. Hindustan National Glass (HNG india)

2. Haldyn Glass

3. Gujarat Glass (Piramal Glass)

4. Victory Glass & Industries

5. Universal Glass

6. Mahalaxmi Gobind Glass

7. Mohan Crystal Glass

8. Alembic Glass Industries

9. Larsen & Toubro, etc.

1.9 Future Outlook

Shifts from glass bottles to PET, flexible packaging likely in most sectors

Certain segments like IMFL will continue to use glass bottles - aesthetically

more appealing

1.10 Demand Drivers

Glass bottle consumption dependent on user industry growth

o Fortunes of the liquor industry

o Soft drink market

Trend towards single use glass bottles, thin walled glass bottles

Demand also driven by the increasing trend towards packaging in user

segments



19

Company PROFILE



20

[2.1] SURAT GLASS INDIA LIMITED

2.1.1 Introduction

SURAT GLASS INDIA LTD is newly set up Glass Container Manufacturing

Company, with a project outlay of Rs 5600 lacks This company is incorporated as a

backward integration unit for the parent company M/s. Fusel Glass Decorators -

Surat, and for decades, whose core business is color printing the labels on glass

bottles and supplying to many reputed manufacturing companies of soft drinks, milk

products and pharmaceutical products in India. The parent company has attained

steady, sustainable and envious growth under the table and professional

management of its directors. Surat Glass has started the commercial production

from middle of December 2009.

The company has installed modern, fully automatic glass furnace with capacity to

manufacture 155 MT/day glass bottles from 5 NOS imported, fully automatic, semi

electronic IS Machines. Company has installed adequate other plant and machinery

and utilities such as natural gas based captive electric power generating plant, fully

automatic batch mixing plant, PLC / SCADA based furnace and process control

systems. After meeting its captive requirements of Bottles, the company is having

excess capacity to cater to the requirement of industries such as Liquor, Soft Drinks,

Milk Products, Food Products, Pharmaceutical Products, and Cosmetic Products etc.

The Company has taken bold initiative to get best technology and production facility

and is in the process of bringing in complete product range of Glass Bottles. The

Company strongly believes that "Quality is to be produced and cannot be inspected

and sorted out."

The activity of the company involve in-house planning, designing, engineering,

manufacturing of glass containers, by adapting world class technology and technical

knowledge. The location of the company has many specific advantages as it is in

the heart of Glass Industry in India, and blessed with availability of Natural Gas, easy

availability of all glass raw materials and engineering items, proximity to experienced

&professional Managers, skilled employees and work force, etc.



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2.1.2 Logo of Company

2.1.3 Goal & Mission

Achieve Business Excellence by attaining overall high performance

Become one among the Leading Suppliers in our products

Manufacturing and Supplying Products with zero defects through continual

improvement

Adapt cost effective and environment friendly process

Total employee participation

Achieving total customer satisfaction

2.1.4 Values We strive to meet the higher expectancy levels of the markets, with uncomely

promising quality standards the latest technology advancement are used to

optionally upgrade our manufacturing facilities in our quest to be a world beater

innovation and improvised equipments & process are employed as and when

necessary to provide the best result. Coupled with advanced engineering skill & vast

experience the company marches ahead in its strive for excellence in all spheres.

2.1.5 Future Business Plan

The Company has acquired an additional 6 acres land , adjacent to the existing

plant, and is seriously considering to put up another 100 TPD Glass Furnace and 3

high speed IS machines to manufacture Green Bottle.



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2.1.6 Organization Structure

Board of Directors

Managing Directors

General Manager

(Mr.shirshad)

(

Marketing

Department

HR

Department

Production

Department

Accounts

Department

Purchase

Department

General

Accounts

Excise

Accounts

Marketing

(Mr.Rajani Italiya)

Distribution

(Mr.Prabhat

Sharma)

Stores Quality

Control

Batch House Maintenance Furnace

General

Maintenance

IS

Maintenance



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2.1.7 Major Clients

The Company understands the market and the customers thoroughly well and

values their contribution. The inspiration and continued strong support of valued

customers is success. The Directors and Employees are thankful to our customers

for their continued, generous support and confidence on our company.

Sr. No. Client Name City

1 Seagram Nasik

2 D J Distillery Daman

3 Jai Glass Traders Mumbai

4 T R Group Sattara

5 Fosbel Group Surat

6 Sreeji Bottling Ahmedabad

7 Mahavir Bottling Ahmedabad

8 Hajoori & Sons.(sosyo) Surat



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2.1.8 Organization Departments

Introduction

Production is the process of converting the raw materials or other inputs into the

products into the products for further production or the

finished goods or services so that the utility of inputs

is created or enhanced and the needs of consumer

are satisfied. e.g. consumer goods, services of

transport, medical treatment, education, banking, post

& telegraphs, insurance etc.

Surat glass company involve activity in-house planning, designing, Engineering,

manufacturing of glass containers, by adapting world class technology & technical

knowledge.

The company has installed modern, fully automatic glass furnace with capacity to

manufacture 155 MT/day glass bottles from Five imported, fully automatic, semi

electronic IS Machines. Company has installed adequate other plant and machinery

and utilities such as natural gas based captive electric power generating plant, fully

automatic batch mixing plant, PLC / SCADA based furnace and process control

systems.

In Surat Glass India Ltd, responsibility of production manager is given below.

Product selection and design

Location of plant and facilities

Material handling

Quality control

Work study



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Maintenance and replacement of machinery

Cost reduction and control

Reducing labour turnover

Facility Location Planning

surat glass India limited has manufacturing unit located in the block no. 212, karanj

industrial area, near Hariyal Patiya, Kim – Mandvi road, Taluka; Mandvi dist; Surat

[Gujarat]

The location of the company has many specific advantages as it is in the heart of

Glass Industry in India, and blessed with availability of Natural Gas , easy availability

of all glass raw materials and engineering items, proximity to experienced

&professional Managers, skilled employees and work force, etc.

Organization Structure of Production Department

Production

Manager

Stores Quality

Control

Batch House Maintenance Furnace

General

Maintenance

IS

Maintenance



26

Production Facilities

Plant & Machineries

Glass Furnace Capacity

Regenerative Furnace.

155 MT / Day, Natural Gas fired

No. of IS Machines

IS 8 DG 4 ¼ CC

IS 8 DG 4 ¼ CC

IS 6 SG 4 ¼CC

5 ( Semi Electronics Type ) from Emhart USA

1

C 3

1

Captive Power Plant 3 Mega watt

Batch plant Fully Automatic

Process Control Fully Automatic

Present Capacity

Utilization

88 %

Printing Unit

Company has in-house pad printing and screen printing facilities. Company also has

provision for coating, frosting and UV metalizing.

Production Planning

First of the entire production plan is prepared very formally but it is prepared on basis

of daily sales. Customer orders have given preference on the first come Fist serve

basis. And according to priority the production schedule have been prepared. This

includes the total number of items have been given to the customer and the

requirements as the safety stock. Because the production has been made on the

high amount So the small amount of unit required by the client can‘t be produce sop

that regular items have been prepared form stock purpose. So helpful for fulfill the

requirement. The supervisor then calculates and total number of bottle that are

required for fulfill the particular order then he gives that calculation to the plant

manager. Plant manager then look after it and prepared the production plan.



27

Plant Layout of Surat Glass India Limited

Plant layout is the arrangement of machinery, equipment and facilities so as to

ensure smooth and quick movement of materials, from raw material stage to finished

products stage, with minimum material handling, quality of operation, good

communication etc. at the lowest possible handling cost.



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Factor Affecting Plant Layout

As we know that the company does the production of Glass Bottle Manufacturing. So

the production is done on mass basis. As the production is done on mass basis it will

have product lay out. So the business requires certain minimum volume. Therefore it

is big lay-out. So the number of people required, machines required will be large. So

the factor which are affecting to production system is given below.

1) PRODUCT:

In Glass Bottle manufacturing, If the product has been damage due to more

transportation. So that the layout of the plant has been prepared such that the

transportation of the product has been avoid. In Surat glass Indian limited the

storage area of the product has been prepared such that nearer to manufacturing

area. So the product layout is very useful.

2) FLEXIBILITY:

Possibility of future expansion of unit decides the flexibility to be involved in

layout. In If company has decide the future Backward or Forward integration or

Type of change to be made in product because of change according to Industry

requirement. So the layout of the company has been flexible.

3) MATERIALS:

Some materials are such that the transportation of the material is very costly. So

the layout has been such that the material has been store where it has been

actually consume. Like Silicon, Lime-Stone.

4) TYPE OF PRODUCTION:

Continuous production in large volume and a few products requires

arrangements of machines and facilities as per the sequence of operation.

5) GOVERNMENT REGULATION:

As per the Government rules and Regulation the company has to prepared the

plant layout such that restrict the harm to the society. Such a rules like Factory

Act, Pollution Act.



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Manufacturing Process

Broadly, modern glass container factories are three-part operations: the batch

house, the hot end, and the cold end. The batch house

handles the raw materials; the hot end handles the

manufacture proper — the furnaces, annealing ovens,

and forming machines; and the cold end handle the

product-inspection and -packaging equipment.

Surat Glass India Limited has a very large production process. It is mainly divided six

stages stated below.

Batch House

Furnace

Distributer

Forming Stage

Annealing Stage

Inspection Stage

Printing Stage



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(1) Batch House

Batch house is generally use for raw materials (used in glass mfg process) control,

mix & cullet mix with ration of 70:30 (cullet: raw materials) & also dispatch it through

dog house.

Bills of Materials

*Chemicals are use as per the requirement. Chemicals are Sodium nitrate,

Potassium nitrate, Sodium sulphate, Sodium silica, florid, Cobalt, Borax, Lithium

carbonate etc.

Major (Physical)

One Batch

Cullet (70%) Raw Materials (30%)

))() (30%)

*Minor (Chemical)

Silicon (497kg)

Feldspar (54kg)

Soda-Ash (180kg)

Lime Stone (127kg)

Dolomite (25kg)

Broken Glass/

Inside cullet

Appr (2060kg)

Grinding

Mixture

Conveyer to Dog House



31

Grinding Mixture Batch Control Room

Above Pictures of Surat Glass Indian Limited Shows that the all the raw material

have been mixture in the grinding equipment and hole the process has been totally

automatic raw material are use throw computerized system and automatically the

door of the container has been closed when the raw material has been filled. Batch

house control room shows all the detail of the raw material have been used. And

also shows that which raw material has been filling in the grinding tank. Hole process

has been control here.

(2) Furnace

The glass is melted over here with help of natural gas (LPG) & air. The dog house

feeder feed the mix ingredient (Raw material & Cullet) in the furnace with the help of

charger. The temperature of furnace is about 1000-1500°C.T he temperature is

varies from bottom to top part of the furnace.



32

All the temperature is automatically measured through control panel in control room

as we placed thermo couple in every part. But we also cheek manually with the help

of Optical (pyrometer), Laser thermometer. With the help of optical thermometer, we

can cheek temperature of furnace, regenerator, and distributer running form 100

to1700o c.

Regenerator

It is very important part of furnace. It maintains temperature & pressure during

melting of glass. It provide cool air through secondary pass and the hot air through

other side The Co2 & So2gas that is evolved during melting are emitted through

regenerator It is likely reversible in each 30 min & the vice-verse process start. The

flow of melted glass is maintained through barrier. It‘s also hander the flow of iron.

(3) Distributer

Distributor is connected with furnace with throat. It provides melted glass to the

feeder of the machines. Distributor also

has lots of pencil burner to keep glass hot

& conditioned.

Distributor provided glass level indicator.

Glass level indicator maintain the flow of

glass & according it keep vibrant speed of

and flow of feeds that coming from dog

house.

(4) Forming Stage

The glass is first blown through a valve in the baffle, forcing it down into the three

piece "ring mould", which is held in the "necking arm" below the blanks, to form the

"finish", or top of the parison. The "rings" are sealed from below by a short plunger.

After the "settle blow" finishes, the plunger retracts slightly, to allow the skin that's

formed to soften, before counterblow" air blows up through the plunger, to create a

parison, or pre-container.



33

The baffle raises, the blanks open, and the parison is inverted in an arc to the

"mould side" by the "necking arm", which holds

the "parison" by the "finish". As the "necking

arm" reaches the end of its arc, two mould

halves close around the "parison", the "necking

arm" opens slightly to release the "finish" then

reverts to the blank side. Final blow applied

through the "blow head" blows the glass out, in

to the mould, to make the final container shape.

(5) Annealing Stage

As glass cools it shrinks and solidifies. Uneven

cooling causes weak glass due to stress. Even

cooling is achieved by annealing. An annealing

oven (known in the industry as a Lehr) heats

the container to about 580°C then cools it,

depending on the glass thickness, over a 20 –

6000 minute period.

(6) Inspection Stage

Glass containers are 100% inspected; automatic machines, or sometimes persons,

inspect every container for a variety of faults. Typical faults include small cracks in

the glass called checks and foreign inclusions called stones which are pieces of the

refractory brick lining of the melting furnace that break off and fall into the pool of

molten glass which subsequently are included in the final product. These are

especially important to select out due to the fact that they can impart a destructive

http://en.wikipedia.org/wiki/Annealing_%28glass%29

http://en.wikipedia.org/wiki/Lehr_%28glassmaking%29

http://en.wikipedia.org/wiki/Refractory



34

element to the final glass product. For example, since these materials can withstand

large amounts of thermal energy, they can cause the glass product to sustain

thermal shock.

(7) Printing Stage

First the Symbol has been printed on the plan glass bottle. The printed glass is

passed through a Lahr and fired at temperatures

between 590 to 650°C to fuse the enamel to the

glass. The glass is then annealed by slowly

cooling it to ambient. This can take several hours.

The process is expensive regarding energy

usage, the Lahr‘s capital cost and the fact it slows

the printing process. The Lahr can be 30m long,

not a proposition to be taken on lightly.

Sources of Raw Material

1) QUARTZ POWDER: Anand Minerals

Gajanand Mineral Grinding Mills

2) DOLOMITE POWDER: B. S. Minerals

J.K. Industries

3) FELDSPAR POWDER: Anand Minerals

Swastik Minerals

4) LIME STONE POWDER: B. S. Minerals

Mineral's Industry

5) SODA ASH: Arihant Trading Co.

GHCL Limited

6) SODIUM NITRATE: Jas International

Parimal Industries

7) SODIUM SILICO FLOURIDE: D.J.Fluorine

Jas International

8) SODIUM SULPHATE: Parimal Industries



35

9) COBALT OXIDE: Shree Prakash Agencies

10) LITHIUM CARBONATE: Parad Chem Corporation

11) POTASSIUM CARBONATE: Shree Prakash Agencies

12) SILICA SAND: Golden Min-Chem

Purchase Procedure

Purchase procedure begins with the preparation of purchase order. Production

manager prepares this purchase order. This purchase order is sent to the authorized

person for checking. After the authorized person signs the purchase order, order is

placed through mail, telephone, or by fax. After receiving purchase order from

company supplier checks it with the availability of material and sends the material

within a day or two and informs the company on sending the material.

After receiving all the material from the supplier then all the materials pas through

the process of quantity & quality check. After all the material is accepted by the

production manager then & then only the payment is done. Payment is done by

cash, cheques, RTGS or by demand draft. Some suppliers demand the payment

along with the purchased order. So, demand draft is sent along with the purchased

order to supplier.

Material Requirement Planning

The company has to keep large stock of raw material. The material requirement

planning is not very tedious process. So the company purchase material for very

long period of time because materials are take long lead time. And the plant capacity

has been huge and the production has been continues.

MRP requires some inputs like production plan and inventory status file. Once the

production plan is conveyed, then it is cleared that what is the current requirement of

material of material needed for specified number of bottles to be produced. The next

step is to check the inventory status that is to consider the quantities of various items

in stock.



36

Material Receipt Procedure

MATERIAL RECEIVED

QUANTITY & QUALITY CHECKING

ENTRY MADE IN REGESTER

MATERIAL SENT TO STORE

MATERIAL ACCEPTED MATERIAL REJECTED

Material receipt procedure begins when the purchased order is placed. The supplier

sends the material at predetermine date. Thereafter the material is received and the

production manager is informed. The material received is checked whether it is

according to the purchase order. Firstly the quantity checking is done. It has been

checked throw way-bridge of the company. Thereafter the quality control manager

checks the quality of the material received and gives confirmation.

Sometime there can be material which cannot be taken for production because of its

poor quality. After the confirmation is received from quality control manager, entries

for both accepted and rejected material is done in the register and thereafter all the

material is send to the store. Accepted and rejected material is stored separately. As

and when material is requires for production it is issued and according the entry is

done. Rejected material is sent back to the supplier and is replaced. then after the

material bills has been send to the accounts department. Bill is sign by store &

Production manager and after all the process gets completed.



37

Material Handling Equipment

The company uses different types of material equipments like conveyors, trolley,

light and heavy motor vehicles for transportation, and cartoons for finished goods

from one place to another. It can be further explained as below;

1) Conveyor:

The company has different types of conveyors uses for different purposes like. For

carrying Glass bottles, Glass wastages for reuse in the manufacturing process. Right

from the starting of production process the Raw material are moved to the next

process through conveyor. Company has two electronic motor driven conveyors.

2) Trolleys:

Trolleys are mainly used for transferring hot glass bottle wastages from the

manufacturing process for reuse age in the manufacturing process and finished

goods loading. Also when the cartoons are unloaded from trucks and moved from

one place to another trolley is used. For convenience trolleys are manually run by

workers to carry heavy loads.

3) Cartoons:

Cartoons are a very important material handling equipment as it is used to carry the

bottles. Cartoons are mainly used for safety purpose so as to prevent the breakage

of bottles. So when the bottles are to be taken from one place to another it is kept in

cartoons and then taken. It is also convenient to carry bottle in group.

4) Tractors:

Tractors can also be considered as the material handling equipment as it is used for

transporting glass culet. They carry culet from the waste bottle cleaning plant to the

batch house,



38

Inventory Management

As Surat Glass India Limited is a private sector company it is not engages in huge

amount of stock. As the company produce Glass Bottles its required huge pr in

process inventory. So the company has to maintain the stock of raw material, work-in

–process and finished goods. Here the inventory of raw material and finished goods

is controlled by the plant manager (production manager). The company used to

maintain the inventory for fewer periods as compare to competitors‘ greater extent

and also the sources of raw material has increased. Also the company has good

relation with supplier and abides to the condition of supplier. So there is regular

supply of material and is available easily and quickly.

Looking to this the company follow just in time inventory management system for

some raw material comes from local market. As stated in JIT inventory control

system there is very less stock of material. The company maintains the stock of

inventory for the period approximately 10 days to week. When the material is used

new order is placed and new material is purchased from the local distributor. So it is

available easily and quickly. The finished goods inventory is stored in the store room

and is issued as and when required.

Trough the company maintains very less stock of inventory but during the time of

crises some minimum stock is kept on a precautionary basis. Sometime there can be

delay in receipt of material, lead time increased because of internal and external

factors and also seasonal changes affect the inventory management. So these

factors are taken into consideration so that production process does not stop and

there is proper supply of finished to the marketing department.

Thus, in this way the inventory of raw material and finished goods are controlled.



39

VED Analysis

To remove the limitation of ABC analysis other classification based on qualification

criteria are designed. One such classification is VED analysis.

There are some items like ―C‖ class of items without which the production is not

possible e.g. water, crowns, assense etc. also there are some spare parts which are

used very rarely but it costs very high. So to overcome some of such limitation other

criteria are designed.

i) Vital Items:-

Vital items are those without production will stop instantly. So all the raw materials

i.e. Quartz powder, Dolomite powder, Feldspar powder, Soda ash, Lime stone

powder etc. are vital items. As the machines equipments are automatic they are also

consider as vital items because without it production can be done. Also the spare

part of these machines is visited item.

ii) Essential Items:-

These items are those which do not stop production instantly but there is slow down

in production. Here some material handling equipments like trolley, non-electronic

sloping conveyor and also the tube light in which inspection is one are consider as

essential items. If such items are not working properly then there is slow down in

production process.

iii) Desirable Items:-

These items are those without which production may not stop or slow down but it

generates inconvenience in manufacturing. Equipments needed for removal of waste

water, cloth pieces needed for cleaning floor etc. are desirable items. In this way all

the items can be divided into vital, essential and desirable item category and proper

degree of control can kept on all the items.



40

Quality Control

Our definition of customer includes every person who comes in the business with us.

We understand that our market and our industry are fast changing and we accept

that change brings the opportunity to grow and improve. That's why we are

proactive in realizing new ideas and encouraging innovation in everything we do.

―Quality control means an approach to prevent the defects rather than detecting the

defects.‖

Quality Policy

Eagle eyed quality control to satisfy customer requirements in

best manner.

Motto - Follow the System, Quality will follow

Quality Checking Criteria

There are the following criteria for the quality check of the product. On the basis of

the following criteria the quality of t6he product has been check.

Tamper

Correct fill

Fill level

Label position

Broken glass in bottle

Leakage after filling

Tamper

Cracks

Breakage

All the level has been predefined as per the customer requirements .on the basis of

some level of variation has been allow by the organization.



41

Company is having their own quality control department of glass bottle. Company

has one quality control laboratory and SQC department there are 65 labors working

in three batch including sorter & in charge. Good & undamaged bottles have been

passed through it and packing has been done. Company is having hot checkers who

check the bottle online at hot end at machine area. So, immediate problem can be

identified directly at machine. Random sample have been taken & checked at

laboratory for quality parameter. Total 6% bottle defects should allow to dispatch. It

is more than 6% then that total batch has been fail.

Standard of Weight and Nick size

Sr. No. BOTTLE NAME WEIGHT NECK SIZE

1 1000ML ROUND 540±20 30PP EX.DEEP

2 1000ML SQUARE 540±20 30PP EX.DEEP

3 100ML SALINE 95±10 32MM VIAL

4 180ML J.P.WHISKY 170±6 25PP STD.

5 180ML LIGHTWEIGHT 127±5 25PP STD.

6 180ML M.H.BRANDY 140±10 25PP STD.

7 180ML M.P.ABKARI 100±10 25PP STD.

8 180ML ROYAL STAG 195±10 NIP GUALA

9 180ML SPR DELUXE WHISKY 155±10 26PP NON STD.

10 1KG CHUTNEY JAR 520±18 45 R.O.PP

11 1KG TOMATOKETCHUP 480±10 SPECIAL

12 200ML AMUL MILK 150±10 STD.CROWN CORK

13 200ML ARTOS 350±10 ,,

14 200ML SOFTDRINK-1 350±10 ,,

15 200ML SOFTDRINK-2 350±10 ,,

16 250ML SOFTDRINK-1 375±10 ,,

17 250ML SOFTDRINK-2 375±10 ,,

18 300ML SHRINATHJI HAIROIL 320±10 ,,

19 300ML SOFTDRINK-1 400±10 ,,

20 300ML SOFTDRINK-2 400±10 ,,

21 375ML BOLS 290±10 28MM NIP GUALA

22 375ML GREENWINE 320±15 28PP EX.DEEP

23 375ML M.H.BRANDY (OVAL) 320±10 30PP EX.DEEP

24 375ML ROYAL M.H.B. 270±15 30PP EX.DEEP

25 375ML ROYAL STAG 300±15 28MM NIP GUALA

26 375ML T.R.OVEL 320±15 30PP EX.DEEP

27 375ML TDI - -

28 540ML SALINE 255±12 32MM VIAL

29 700ML PRIMO 430±15 31.5PP EX.DEEP



42

30 700ML SQUASH 438±15 31.5PP STD.

31 750ML C.S.D. 415±10 28PP STD.

32 750ML INDICA 525±15 30PP EX.DEEP

33 750ML PRIMO - -

34 750ML RIA 525±15 30PP EX.DEEP

35 750ML ROMANOV VODKA 520±15 30PP EX.DEEP

36 750ML ROYAL M.H.B. 470±20 GUALA NECK

37 750ML ROYAL STAG 500±18 GUALA NECK

38 750ML RRW 415±10 30PP EX.DEEP

39 750ML RUM LIGHTWEIGHT 480±20 STEEL CAP NECK

40 750ML T.R.BRAND 520 APPR STEEL CAP NECK

41 90ML BOSS 110±8 25PP STD.

42 90ML LIQUAR 85±10 25PP STD.

43 180ML BOSS 175±10 25PP STD.

44 180ML SONATA 175±10 28 ED/ S.C

45 750ML BOLS BRANDY 490±20 NIP GUALA

46 50ML CEMPBELL 85±10 25PP STD.

47 375ML PETER SCOT 380±10 NIP GUALA

48 180ML IMPERIAL BLUE 175±10 NIP GUALA

49 375ML RED KNIGHT 175±10 NIP GUALA

50 750ML MIDAS 480±10 NIP GUALA

51 750ML NEPOLIAN 480±10 30PP STD.

52 375ML V.S.O.P 250±10 28PP STD.

53 180ML V.S.O.P 140±10 25PP STD.

54 1 LITTER M.H.B 550±10 NIP GUALA

55 375ML HERCULERS 320±10

56 375ML IMPERIAL BLUE 270±10 28PP STD.

57 180L RED KINGHT 180±10 28PP STD.

58 180ML PETER SCOT 180±10 28PP STD.

59 180ML DIAMOND DEEJAY 185±5 25PP STD.

100ML SALINE 95±10 32MM VIAL

200ML AMUL MILK 150±10 STD.CROWN CORK

540ML SALINE 255±12 32MM VIAL

90ML BOSS 110±8 25PP STD.

90ML LIQUAR 85±10 25PP STD.

50ML CEMPBELL 85±10 25PP STD.



43

Maintenance Planning System

The maintenance planning system is divided into three categories as:

I) Routine maintenance:

It includes all the activities that are carried out daily for effective working of machines

and overall production process. It includes activities like filling the oil take, effective

working of IS Machine, Greasing of Conveyer belt, oiling of crimping machine and all

other activities needed for daily maintenance.

II) Preventive maintenance:

It includes activities that prevents the timely checking the IS machine. It includes the

filing the oil on the Node of the Machines, and washing waste glass bottle and

separating the plastic wastage from the wastages so to avoid the future breakdown.

III) Predictive maintenance:

It includes activities like changing Node of the IS machine, Changing belt of

conveyer, etc. such maintenance activities are carried out after particular time period

on regular basis.

The company has form two maintenance department for all the requirement of the

maintenance.

(1) General Maintenance Department

Responsibility of the general maintenance department is taking care of all the

maintenance activity of the company excluding the IS machines. Any breakdown

other than IS machines the GMD has to deal with them.

(2) IS Maintenance Department

Department has to taking care of all the activity related to the IS machines. Its blow

the glass bottles and making future improvements in the organization.



44

Introduction

Human being in Surat Glass India Limited is called as

the assets of the company. The authority structure of

Surat Glass India Limited is centralized. The top level

employees have the decision taking power for required

issues and problems. Regular human resource planning

in Surat Glass India Limited is done by the appointed

head of each department and related decisions are

taken by the owner and top management.

The company is proud of highly experienced, result oriented professional managers,

supported by competent, dedicated, qualified and experienced fleet of employees,

who are ready to take all Threats and Challenges, and their contributions are greatly

valued. The Company believes that

"Machine cannot perform wonders by itself unless human brain behind is

competent enough to do so."

To achieve our goal and vision we are always looking for capable, innovative and

learning peoples in industry. We provide our employees with an exciting work

environment, the freedom to implement innovative ideas and opportunities for cross-

functional learning.

Human resource planning helps the company in various ways. This gives the current

picture of the employee status that is current no. of employees and no. of employees

required in pictured in future. Human resource planning helps the company to



45

appoint right person at right place at right time. Human resource planning also helps

by giving solution to the problems like over and under level of staff, over and under

utilization of the employees. In Surat Glass India Limited, there are 400-500

employees working.

Employee Profile

No. of Employee At each level in Surat Glass India Limited

Operator 19 Assistant Operator 18

Oil man & Utility 36 Electition 06

Furnace 06 General Maintains Department 13

Batch House 04 Work Shop 24

Driver 05 House Keeping 08

Stores 02 Quality Control 06

Apprentice 03 Administrative Staff 72

Recruitment

Recruitment is the process of identifying that the organization needs to employ

someone up to the point at which application forms for the post have arrived at the

organization.

Sources Of Recruitment

In Surat Glass Indian Limited for rising man power, they uses mainly two types of

recruitment sources:

1) Internal Sources

In the internal recruitment the main sources are present employees, employee‘s

referrals. The executives, technicians, Supervisors, etc. are promoted internally so

they become internal sources of recruitment. Salesmen also bring their relatives,

friends, etc. as the need in the company. So it does not require much time and can

be done as and when required. The internal source is reliable as they are in direct

contact with the company from long time.



46

2) External Sources

External sources of recruitment are also equally used by the company. Here in the

company the main external source of recruitment consist of walk-ins, talk-ins,

advertisements and competitors. For the labor work force walk-ins and talk-ins is

used. Advertisements and competitor are also used as sources of recruitment. The

company gives advertisement on official website, Naukari.com website, news paper

in naukari.com advertisement for only managerial level has been given & two month

Salary Company has to pay.

Recruitment & Selection Process

Selection then consists of the processes involved in choosing from applicants a

suitable candidate to fill a post. Owner takes total responsibility of recruitment

process in Surat Glass India Limited for higher level recruitment.

Recruitment & selection process begins with the rise in the recruitment of manpower.

As there is rise in recruitment of manpower the company uses the internal and

external are used. Thereafter the selection is done. Various stages involved in the

recruitment & selection process in Surat Glass India Limited are:



47

APPLICATION FORM

SELECTION INTERVIEW

REFERENCE CHECK

FINAL APPROVAL

SELECTION

Application Form

After various sources are used then various application are received. An applicant is

required to give full bio-data with education qualification, experience. Thereafter all

the application are scrutinized and thereafter all the applicants are called for the

interview process.

Selection Interview

In the interview process the applicants are judged on different factors as their

communication skills, convincing power because the salesman is required to

convince the customer when they go for selling, also trustworthiness and honesty is

judged because it is mainly cash business etc.

Reference Check

Thereafter the reference check process follows. It is mainly carried out for the height

post i.e. for executives, manager, supervisors and technicians. For the labor work

force all the steps are not followed as they are sometimes required informally.

Final Approval

After the above steps are completed the selection committee then decides as whom

to appoint. The applicant to be appointed must meet the required standard then and

then only he can be appointed. The committee takes the decision and gives the final

approval.

Selection

The applicant is offered job and fulfilling some legal formality the employee joint the

job.



48

Training and Development

Now a day‘s mostly all the company imparts the training to the fresher although they

posses Specific knowledge because training provides

the practical knowledge and if the employee is not

fresher then also training helps to know the working of

the company, its employees and many other things

required for the efficient and effective working of the

company. Training is one of the best tools for

increasing the performance of the employees and overall performance of the

company.

In Surat Glass India Limited Company training is imparted to the employees but in a

particular department only. Most of the trainees are from the marketing department

also there are trainees from other department but small in numbers.

First of all the company identify whether the training is to be given to the employee or

not. Here training is provided mainly to the new comer. In the production department

when a new plant is installed or when a new technology is adapted then training is

given to the technicians, engineers and laborers. Even when there is constant

reduction in the production the company calls the experts from outside and arrange

for seminars and two- three days program. So mainly training is provide to the

employees of the production and marketing department.

After the training needs are identify then training is imparted. In the marketing

department newly appointed employee is sent with sales executive on the

company‘s vehicle. Here the main purpose is to make the employee aware about the

customers. Also they are trained as how to communicate with the customers, how to

behave, how to convince the customers. They are trained as how to response to the

customer‘s complain and their review from the customer about the company‘s as

well as competitors products. This also helps them to solve the problem easily and

conveniently.

In this way training and development program is carried out in Surat Glass

India Limited.



49

1) Induction Training

Induction, also called orientation, is designed to provide a new employee with the

information he or she needs to function comfortably and effectively in the

organization. The main purpose of the induction training is to make employees feel

at home in the new environment. Organizations are known to spend few days or

weeks for induction training. It is known that employees feel anxious on entering the

organization. The employees worry about their performance on the new jobs.

In Surat Glass India Limited, induction training is providing mainly to the employee of

the production and marketing department. Here the employees are made to work

with experienced employee for fifteen days and are provided with all the information

needed for efficient working in the organization. They are made to interact with

different employees with whom they are to work also with the other employees of the

company.

2) Promotion and Transfer Policy

Promotion:-

Promotion refers to the upward movement of an employee from one job to hire level

job with increase in salary status authority & responsibilities. Surat Glass India ltd

gives promotion for the employees competitive spirit is developed and also increases

their job satisfaction & sense of belongingness.

Transfer:-

Transfer means employee is shifting to one place to another and no change in

salary, responsibility & authority. Surat Glass India ltd gives transfer for the relief in

employee work load and multiple improvements of employees and also to punish

employees involve in undesirable activities in the organization.

Production transfer

Replacement

Versatility

Shift

Penalty

Remedial



50

Wages & Salary

The wage and salary structure of Surat Glass India limited is totally different from all

other companies. Some Employee has been work under the permanent basis and

some employee has work on the Contract Basis. At the time of appointment the

salary to be given is fixed and when actually paid if any deduction for his holidays is

to be done is done and then difference amount is paid. The wage and salary is given

to the all members in Surat Glass India Limited.:

Operator = 7500-11000 Rs/Month

Assistant Operator = 5500 Rs/Month

Helper =

Skill Employee= 150 Rs/Day

Unskilled Employee= 125 Rs/Day

Quality Control = 4500-5000 Rs/Month

SALARY STRUCTURE :

Actual basic salary

+Overtime Salary

+ Allowance

+ Bonus

+/- Advance

Salary is paid to all the employees and workers by cash and cheques. Wages are

paid by cash. In allowances for sales man according to his efforts

Welfare Activity

Employee welfare is also carried out in the different manner in Surat Glass India

Limited. Here the welfare activities are given equal importance as the company

believes that welfare of the employees is the responsibility of the company because

it is clearly affected to the thinking and behavior of the employees towards the

company. If the company carries out the welfare activities properly then the

employees also gives appropriate performance. The company work hard with a

philanthropic approach to be a good corporate citizen. Its commitment to people‘s

health, safety and careers is reflected in a wider responsibility to the communities, in



51

which it live and work. It‘s about living with our corporate values not just inside the

workplace but outside it too.

The basic welfare services include the following:

Canteen

Wash room

Water

Rest room

Travelling arrangement

Medical Facilities

Labor Relation & Trade Union

Labor relation means the relation between the company and the employees. All the

company maintains good relation with the

employees and laborer which increases the

laborer‘s efficiency. Good relation helps to develop

and maintain harmonious relation between the

management and labor. Also all the forms of the

industrial conflicts are avoided and to ensure

industrial peace by providing better working and living standards to workers.

In Surat Glass India Limited good labour relation are maintained with all the

employees in all the departments. Good labour relation includes satisfying the

employees with the occasional needs. The employee must have job satisfaction of

what he does and also from what is being provided by the company. The employees

are provided with the occasional leave, also urgent cash withdrawal of small amount.

All these points also matter as they develop and maintain the labour relation.

There is no trade union as it is a small scale private company. As there is no labour

union all the decision regarding the employees are taken by the company directly

interacting with the employees. All the decisions are taken in confirmation with

employees.



52

Information System

Employment Records:

At the time of joining the organization he or she has to fill up a form and submit in the

organization. This form contains the information regarding his personal life, which is

stored in computers and is maintained by establishment sectors. The name, birth

date, age, height, weight, power classes, marks of identification, permanent address,

nationality, father‘s name, materials status etc. of the application is there.

The academic data, percentage obtained in S.S.C., other vocational qualification,

past and present employment data, language known, hobbies, interest, information

regarding accomplishment, achievement, reference etc. Attach certificate Xerox copy

of certificate in support of age, academic qualification, experience etc.



53

Introduction

Marketing is a societal process by which individuals and groups obtain what they

need and want through creating, offering and freely

exchanging products and services of value with others. For a

managerial definition, marketing has often been described

as “the art of selling products”, but people are surprised

when they hear that the most important part of marketing is

not selling! Selling is not only the tip of the marketing

iceberg.

The marketing concept holds that the key to achieving its organizational goals

consists of the company being more effective than competitors in creating,

delivering, and communicating superior customer value to its chosen target markets.

In Surat Glass India Limited, responsibility of marketing manager is given

below.

Promote sales

Development of new products

Maintaining the industrial relationship

Getting knowledge about new competitors

In Surat glass India Ltd. Mostly, there is the product is to be produce as per

consumer demand and order in bulk. Marketing management has the task of

regulation of level, timing and character of demand in a way that will help the

organization to achieve its objectives. The aim of produces is totally depends on

marketing, without marketing not a single unit can run.



54

Product Profile of the Company

(1) Soft Drinks Bottles

200 ml Soft Drink 250 ml Soft Drink 300 Soft Drink

(2) Liquor Glass Bottles

90 ml Flat 375 ml Troval (FS) 375 ml Green Whine 750 Roman Vodka

(3) Other Glass Bottles

540 ml Saline 700 ml Primo 1Kg Chanty Jar

Pharmaceuticals Foods and Beverages



55

Pricing Policy

Deciding the pricing policy is an important decision in any organization. As usual

every firm sets the price for it‘s whether it is manufacturing or service firm. Financial

managers with the help of the production and other department set up the price.

Generally, pricing policy is deciding after considering several factors. Surat Glass

has believed that at the price of the product the company fulfills all the requirement

of the clients.

Company decides per unit price of product by following formula.

Per unit price = Variable cost + Fixed cost

Unit sales

Here, variable cost is

i) Raw materials cost

ii) Administration cost

iii) Packing cost

iv) Distribution cost

Here, fixed cost is

i) Processing cost

ii) Machinery cost

III) Specific Mode Cost

Prices are set by input valuation, considering production activity cost, cost of raw

material, buffer margin, other cost and profit margin. Sometimes because of increase

in Price of Raw Material, transportation cost also increases. To avoid such situation,

the company keeps a margin on its product prices before adding profit margin.

A lot of research regarding prevailing price of the product in market is done before

setting the price. For, fill up the quotation of the particular product. Competitor‘s

prices and offers are also considered.



56

Distribution Network

Channel of distribution is the chain through which the product of the company

passes from factory to final consumers. For reaching target market various

companies uses various kinds of channel of distribution shows how faster, easier,

cheaply and with minimum risk the product reaches to the final consumer. Effective

and efficient channel of distribution will time. The company should have flexible

channel of distribution so that in future it can be changed easily according to

requirement. Company uses three particular channels to reach their target market.

(1) Communication channel

(2) Distribution channel

(1) Communication Channel:

In communication channel they deliver and receive message from their buyers. If any

party order that occur then it received through telephone and fax also. They also

receive their suggestion and follow if any important needed.

(2) Distribution Channel:

Company uses distribution to display sell or deliver the physical product or service to

the buyer or user. They include distributors, retailers and franchises. Thus, it records

the whole concept of distribution and is important for the company‘s point of view.

There are mainly zero levels or one level of distribution channels in surat Glass India

Limited.

O – Level 1 – Level

MANUFACTURE

CONSUMER

MANUFACTURE

RETAILER

CONSUMER



57

i) O-Level channel:-

This is also called direct marketing channel. It consists of a manufacturer selling

directly to the customer. Here company selling their product Company that uses the

Glass Bottles. Here no intermediaries between the manufacturer and Customer. Bulk

orders and party orders are following under 0-level channel.

ii) 1-Level channel:-

A 1-level contains one intermediary such as printing firms who sales the product to

small firm. Here company gives their product to retailers and through retailers it goes

to final consumers.

Promotion Activity

In Surat Glass India Limited the importance is given to the personal selling through

the company‘s sales force. Sales people act more as consultants and technical

problem solvers, utilizing in-depth product knowledge and

technical understanding of the buyers‘ needs, the primary

means of reaching the market is through business

magazines, traditional trade journals, and direct mail.

Sales promotion activities done throw trade shows, trade

fairs, and e-business websites,

Green Marketing

In this day and age of promoting greener Earth, it is important to take into account

environment consideration has been also taking under

consideration. The glass bottle has been manufacture has

been made from the wastage of the glass .and the bottle has

been manufacture has been also recyclable. Production

process of the company has been also environment friendly

so it affects less damage to the environment. So it‘s helpful

for the company to promoting green marketing



58

Sales Procedure

Selling of the Glass bottle has been generally following the following procedure in the

industry because the each client has required the specific product as per the

requirement. So that the following pro0cedure has been follow

Drawing

Sampling

Approval of sample bottle

Consignment

Commercial production

Dispatch the goods



59

Introduction

It is said ―finance is the arms and legs of business‘‘. A potential and capable

management can run the department very

effectively. In finance department each & every

decision should be taken in such way that every

pie of money should be utilized in adequate

manner.

Financial management is the concern with the

managerial decision that results in the acquisition

and financing of long term and short term credit of

the firm. Financial management is a managerial

activity, which is concern with planning and controlling of the firm financial resources.

In ―SURAT GLASS INDIA LTD‖, there is a separate department of finance, which

handles different financial transactions and keeps on the revenues and expenses of

the company. The finance departments manage by top-level management. It

consists of more than 25 executives. The head of this department is Mr. Suresh

Patel, Mr. Suresh Patel is also internal auditor who checks the bill and invoices. Also

he takes most of the important financial decisions and some policies.

Activities of Finance Department

Planning & budgeting of financial resources.

When financial resources is not that time taken loans. Issuing shares.

Issuing financial resources to different department. Working capital managing

Balance sheet & Annual general prepared. Accounting management.

Cash management



60

Cost Structure

Cost structure consists of mainly direct and indirect cost. Direct cost is the cost which

is directly occurred in the production and selling of the goods and indirect cost are

those that are not directly occurred for production and marketing. The cost structure

is as below;

1) Direct cost

Basic Raw material cost

+ Process cost

+ Administration cost

+ Packing cost

+ Distribution cost

In the direct cost the processing cost includes the power supply, salary of employees

in production department, maintenance of machineries. Administration cost includes

stationery expense, telephone bill, salary of employees related to that department.

Packing cost includes all the expense related to the material and also the salary of

employees. Distribution cost includes fuel cost, maintenance of vehicles, salary, etc.

all the direct and indirect cost constitutes the cost structure.

2) Indirect cost

Sales tax

+ Excise duty

+ Depreciation



61

[2.2] HNG GLASS

2.2.1 Introduction

HNG is the largest manufacturer in the organized segment of the domestic glass

container industry with a market share of around 68%. It manufactures wide varieties

of glass containers for industrial customers. HNG uses state-of-the-art technology for

glass manufacturing. Its wholly-owned subsidiary company, Glass Equipment (India)

Ltd., the largest glass machine manufacturer in the country, provides complete

engineering & technical support to the company. Further, Rishikesh and Pondicherry

units were set up by Owens- Illunois Inc (OI), USA, the technology leader worldwide

in the area of container glass manufacturing, and hence, the level of technology

employed at those two units are quite superior.

Gross sales witnessed a significant growth of about 93% in FY08 over FY07, driven

by about 8% increase in AGSPR and about 79% increase in tonnage sold. The

significant increase in tonnage sold was due to higher production arising out of

increased demand from the beer & liquor segments and increase in capacity due to

merger of erstwhile AGCL, while the AGSPR increased due to both buoyant market

condition and passing on of the increase in the raw material prices to the customers.

Annual turnover of Rs. 1500 Cr. Ranked 299th among top 1,000 companies by

Business Standard (January 2010), HNG manufactures 15 million containers daily in

5ml - 3200 ml capacity with downstream applications

HNG has a well diversified customer base which minimizes its business risks. In

FY08, beer & liquor (61.4% of gross sales) and pharmaceutical sectors (16.0%)

continued to be the dominant end-users; while food & dairy products witnessed a

marginal decline. Share of beverages & aerated water however, increased

marginally. HNG has good clientele comprising United Breweries, SAB Miller, Radico



62

Khaitan, Bacardi, Pepsi, Coca-Cola, Nestle, Hindustan Unilever, Glaxo Smithkline,

Dabur, and Reckitt Benckiser and so on.

2.2.2 Vision

2.2.3 New Development

NNPB is a revolutionary process that not only controls the distribution of glass inside

the container, but also reduces the weight of glass by 33% without having any

adverse effects on the performance of the glass containers. HNG is the first to

introduce and commercialize this technology in India.HNG introduced the narrow

neck press and blow (NNPB) technology in 2007-08, which lead to the reduction in

the consumption of molten glass per bottle without compromising on product

strength. Facilitating superior glass distribution, this technology reinforces the bottle's

resistance to pressure on the filling line. It also leads to a decrease in logistics cost

and increase in consumer acceptability of the bottles

HNG invested a capital of Rs. 100 Cr. to introduce this technology in India. On one

hand, this technology enabled the company to reduce production costs and

wastages; and on the other, it strengthened capacity utilization. Through NNPB,

HNG strives to remain competitive with other packing alternatives and continue to be

the market leader in India



63

[2.3] PIRAMAL GLASS

2.3.1 Introduction

Piramal Glass is a global leader in delivering world-class packaging solutions for the

perfumery and pharmaceuticals businesses. We offer an entire gamut of flacconage

solutions under one umbrella, making us a one-stop-shop for all the needs of our

customers. Our end-to-end flacconage solutions include full bottle design

capabilities, in-house mould design, CNC machines for mould manufacturing, high

quality glass manufacturing and dedicated ancillaries for decoration and accessories

like caps, cartons and brushes.

Piramal Glass offers several competitive advantages over other suppliers of

flacconage. These include:

Strong manufacturing presence

Wide sales and distribution spread

Significant cost advantages

Strong presence in the key US market

Decoration services and accessories

2.3.2 Sales & Distribution Spread

Piramal Glass has a large geographic footprint, with a sales and distribution

presence in most major markets across the globe. Our significant marketing

presence in Europe, USA and South America enables us to build more intimate

relationships with customers, and respond to their needs quickly and efficiently.



64

2.3.3 Strong Manufacturing Presence

Piramal Glass is one of the largest manufacturers of flacconage glass for the

pharmaceuticals and perfumery businesses today, with an installed capacity of 1,115

tonnes per day, and sales of more than $200 million worldwide. We also

manufacture glass bottles for specialty food and beverages. Piramal Glass has

invested more than $110 million in creation of significant new capacity, and is among

the top five manufacturers of perfumery bottles in the world.

2.3.4 Significant Cost Advantages

Flacconage is a labour and skill intensive industry. Though the manufacturing of

glass itself is highly automated, critical functions such as quality control need large

teams of skilled professionals. Not surprisingly, the total cost of production in India,

where manpower is among the cheapest in the world, is less than half of that in

France and almost half of that in the US (Source: Mckinsey). With manufacturing

facilities in India and Sri Lanka, Piramal Glass is able to produce glass at

significantly lower costs than its competitors in other parts of the world and deliver a

sustainable cost advantage to customers.



65

2.3.5 US Presence

Piramal Glass has a significant presence in the US, the largest perfume market in

the world. In 2005, we acquired the Glass Group in the US (formerly Wheaton

Glass). The acquisition, combined with our strong marketing presence, has brought

several tangible benefits.

Strategic access to the key US market (we are one of just two glass

manufacturers in the US)

Access to the latest technology and innovations

Cultural diversity as a result of movement of people and teams from and to

the US and India.

2.3.6 Quality Certified



66

RESEARCH METHDOLOGY



67

3.1 Introduction and Statement of Problem

“Fundamental Analysis OF Glass Bottle Manufacturing Sector”

The country‘s manufacturing sector is enjoying a stronger pace in earnings growth

post war, a top stock broker said last week. December aggregate earnings of

manufacturing sector listed companies grew by 175.9% YoY on back of a 19.7%

revenue growth. ―Now with sharper revenue growth thanks to the current resurgent

economy, the sector has started increasing earnings at a stronger pace than its

historical averages with companies starting to improve utilization of their capacity,‖

said John Keells Stock Brokers in an earnings update on the manufacturing sector.



players, is likely to close the fiscal with a turnover of Rs 4,500 crore. Industry

representatives said demand from liquor, beer, pharmaceuticals and, food and

beverages industries were driving growth. The industry is likely to close the current

fiscal with a turnover of around Rs 4,500 crore as compared to Rs 4,000 crore, a

year ago, registering a 12 per cent growth. The industry is bullish it would continue to

report double digit growth for the next few years. This has resulted in glass container

production and has more than doubled from approximately 800,000 tons in 1997-98

to 0.14 million tons, an increase of over 80 per cent.

3.2 Scope of the Project

1. The Study is based on the fundamental analyze the Glass Bottle Manufacturing

companies having the Large Market Capitalization.

2. This study is beneficial for investors who want to invest their funds in Glass Bottle

Manufacturing industry.



68

3.3 Objective of study

To know about the Glass Bottle manufacturing sector and its contribution towards

its overall India economy and Equity market.

To study the emerging trend of Glass Bottle manufacturing sector

To know the emerging technologies in the Glass Bottle manufacturing sector

To analyze the ratio there by to know the company‗s respective position in the

market and sustainability.

To guide the investors for the selected industry so they can invest in the best

companies who in turn can give them maximum return.

3.4 Limitation of Study

The research study and the preparation of the project report where through proved

and excellent opportunity. Every work has own its limitations and advantages, which

are to be kept in mind and faced, while its completion.

Certain limitations that were face during the study and preparation of project work

are listed:

The study will be based on the research of last two years, which is small

period to predict the future moves of the stocks.

There is some inadequacy of data for the preparation of project.

Many required details were not made available.

Finding and suggestion might be influenced by subjective judgment

The time period granted for the project work to be insufficient and the project was to

be completed in very hurry.



69

3.5 Short Literature Review or Survey

Fundamental analysts that they are able to identify firms that are successfully

masking operational problems with aggressive accounting (Scott Whisenant &

Patricia M. Fairfield, 2000)

Firm‘s fundamental or intrinsic value is well determined by information reflected in

financial statements. Sometimes, stock prices do not reflect in a timely basis and/ or

correctly all this information and thus deviate from fundamental values. The

predictive approach relies on discovering accounting data that are not reflected in

stock prices and thus predicts future stock price adjustments as market values

gravitate later to fundamental values.( International Research Journal of Finance and

Economics ISSN 1450-2887 Issue 30 by Jaouida Elleuch )

3.6 Research Methodology

Study and analysis of the external environment that is Macro environment like

economy as whole.

Selecting a sector which is most promising. i.e. here Glass Bottle

Manufacturing Sector is selected.

Studying various company, their Balance sheet, Profit and loss account,

Annual account etc, in all depth manners by means of ratio analysis to find out

the sustainability and profitability of specific company.

Study through various tools like Ratio analysis, Trend analysis of the leading

selected company to get complete idea of fundamental analysis of Glass

Bottle Manufacturing Sector

Data is taken from secondary source like company‗s website, internet etc.

Sample Size

The sample size of the research study is 3 Glass Bottle manufacturing companies

selected on the basis of market capitalization.

Sampling Method

Non Probability Judgmental Sampling



70

3.7 Data Sources

Secondary Data

Secondary data are those that are already collected by someone else for some

purpose and are available for the present study. For instance the data collected

during Sources of secondary data are mainly Internet and Books/Magazines‘.

Information is not available about the company from magazines or other sources

because it is direct marketing company and does not use any sort of advertisement.

In this research project, secondary data has been collected through Literature in

books, Articles from Magazines and as well from the Internet.

3.8 Beneficiaries

This project report will help to those students for literature review who would like

to work on the same topic in the future date.

Glass Bottle Manufacturing industry would be benefited from the project report.

It provided idea to new entrepreneurs for finding the business opportunity.



71

FUNDAMENTAL ANALYSIS



72

4.1 Introduction

The most important factor in fundamental analysis is information about the economy,

the industry and the company itself – any information that can affect the growth and

profitability of the company. And because of this fundamental analysis is broken into

three distinct parts:

Fundamental analysis is the examination of the underlying forces that affect the well

being of the economy industry groups and companies. As with most analysis, the

goal is to derive a forecast and profit from future price movements. At the company

level, fundamental analysis may involve examination of financial data, management,

business concept and competition. At the industry level, there might be an

examination of supply and demand forces for the product offered. For the national

economy, fundamental analysis might focus on economic data to assess the present

future growth of the economy.

To forecast future stock prices, fundamental analysis combines economic, industry

and company analysis to derive a stock‘s current fair value and future value. If fair

value is not equal to the current stock price, fundamental analysts believe that the

stock is either over or under valued and the market price will ultimately gravitate

towards fair value. The biggest part of fundamental analysis involves delving into the

financial statements.

Also known as quantitative analysis, this involves looking at revenue, expenses,

assets, liabilities and all the other financial aspects of a company. Fundamental

analysts look at this information to gain insight on a company‘s future performance.

Economic Analysis

Industry Analysis

Company Analysis



73

4.2 Fundamentals: Quantitative and Qualitative

Fundamental analysis can be defined as ―researching the fundamentals‖ but that

doesn‘t tell a whole lot unless an investor knows what fundamentals are. The big

problem with defining fundamentals is that it can include anything related to the

economic well-being of a company. Obvious items include things like revenue and

profit, but fundamentals also include everything from a company‘s market share to

the quality of its management. The various fundamental factors can be grouped into

two categories:

Quantitative

It‘s capable of being measured or expressed in numerical terms.

Qualitative

It‘s related to or based on the quality or character of something, often as opposed

to its size or quantity.

Quantitative fundamentals are numeric, measurable characteristics about a

business. It is easy to see how the biggest source of quantitative data is the financial

statements. Investor can measure revenue, profit, assets and more with great

precision. Turning to qualitative fundamentals, these are the less tangible factors

surrounding a business – things such as the quality of a company‘s board members

and key executives, its Brand name recognition, patents or proprietary technology.

4.3 Strengths of Fundamental Analysis

Long-term Trends

Fundamental analysis is good for long term investments based on long term trends.

The ability to identify and predict long term economic, demographic, technological or

consumer trends can benefit patient investors who pick the right industry or

companies.

Value Spotting

Sound fundamental analysis will help identify companies that represent a good

value. Some of the most legendary investors think long term and value. Fundamental

analysis can help uncover companies with valuable assets, a strong balance sheet,

stable earnings, and staying power.



74

Business Acumen

One of the most obvious, but less tangible, rewards of fundamental analysis is the

development of a thorough understanding of the business. Earnings and earnings

expectations can be potent drivers of equity prices. A good understanding can help

investors avoid companies that are prone to shortfalls and identify those that

continue to deliver.

4.4 Criticism of Fundamental Analysis

Time Constraints

Fundamental analysis may offer excellent insights, but it can be extraordinarily time

consuming. Time consuming models often produce valuations that are contradictory

to the current price prevailing on Stock Exchange. When this happens, the analyst

basically claims that the whole street has got it wrong.

Industry/Company Specific

Valuation techniques vary depending on the industry group and specifies of each

company. For this reason, a different technique and model is required for different

industries and different companies.

Subjectivity

Fair value is based on assumptions. Any changes to growth or multiplier

assumptions can greatly alter the ultimate valuation. Fundamental analysts are

generally aware of this and use sensitivity analysis to present a base-case valuation,

a best-case valuation and a 12 worst-case valuation. Even on a worst-case

valuation, most models are almost always bullish.

Analyst Bias

The majority of the information that goes into the analysis comes from the company

itself. When it comes to messaging the data or spinning the announcement, CFOs

and investor relations managers are professionals. Only buy-side analysts tend to

venture past the company statistics. Buy-side analysts work for mutual funds and

money managers. They read the reports written by the sell-side analysts who work

for the big brokers. These brokers are also involved in underwriting and investment

banking for the companies. Even though there are restrictions in place to prevent a



75

conflict of interest, brokers have an ongoing relationship with the company under

analysis. When reading these reports, it is important to take into consideration any

biases a sell-side analyst ay have. The buy-side analyst, on the other hand, is

analyzing the company purely from an investment standpoint for a portfolio manager.

Definition of Fair Value

When market valuations extend beyond historical norms, there is pressure to adjust

growth and multiplier assumptions to compensate. If stock exchange values a stock

at 50times earning and the current assumption is 30 times, the analyst would be

pressured to revise this assumption higher. There is an old stock exchange adage:

the value of any asset (stock) is only what someone is willing to pay or it(current

price). Just as stock prices fluctuate, so too do growth and multiplier assumptions.

Putting All Together

The final step of the fundamental analysis process is to synthesize all data, analysis

and understanding into actual picks. If you are reading research written by a sell-side

analyst, it is important to be familiar with the analyst behind the report. We all have

personal biases, and every analyst has some sort of bias. There is nothing wrong

with this, and the research can still be of great value. Press releases don‘t happen by

accident; they are an important PR tool for companies. Investors should become

skilled readers to wed out the important information and ignore the hype.



76

Economic Analysis



77

5.1 World Economy Analysis

Global economic analysis reveals that in 2009 output of global economy increased

by 3.8 percent in 2008, which was lower than 5.2 percent, which has been estimated

in 2007. Global economic analysis shows that China (9.8 percent), Russia (7.4

percent) and India (7.3 percent) have shown growth. As per economic analysis in

world in recent years, growth rate has declined in nations based mainly on

industries. It is because of uncertainties in financial markets that growth rates got

lowered in most of developing nations. Confidence of consumers has also

depreciated to a significant extent.

World economic analysis also points out that each year more than 80 million people

are added to population of world. This accelerates economic problems in global

arena. This rise in population has led to severe problems like pollution,

desertification, epidemics, underemployment and famine. There are numerous

poorer areas in world, which are becoming even more marginalized from an

economic point of view.

Global economic condition also talks about making of Euro as common currency

of most of countries of Western Europe from January 1999 as being a significant

economic move. Contribution to world economy GDP is different for different sectors.

In fiscal year 2008, agriculture sector added 4 percent, industrial sector contributed

32 percent and 64 percent was put in by service sector to world GDP.

Unemployment rate, as was found by global economic analysis, was found to be 30

percent, which combines unemployment and underemployment. In developed

countries unemployment rate ranged from 4 percent -12 percent. Major export

commodities in world include electrical machinery, mineral fuels, nuclear reactors,

boilers, and parts, cars, trucks, and buses, scientific and precision instruments,

plastics, iron and steel, organic chemicals, pharmaceutical products, diamonds,

pearls, and precious stones.



78

5.2 Introduction of Indian Economy

The economy of India is the twelfth largest economy in the world by nominal value

and the fourth largest by purchasing power parity (PPP). In the 1990s, following

economic reform from the socialist-inspired economy of post-independence India,

the country began to experience rapid economic growth, as markets opened for

international competition and investment. In the 21st century, India is an emerging

economic power with vast human and natural resources, and a huge knowledge

base. Economists predict that by 2020, India will be among the leading economies of

the world.

India was under social democratic-based policies from 1947 to 1991. The economy

was characterized by extensive regulation, protectionism, and public ownership,

leading to pervasive corruption and slow growth. Since 1991, continuing economic

liberalization has moved the economy towards a market-based system. A revival of

economic reforms and better economic policy in 2000s accelerated India's economic

growth rate. By 2008, India had established itself as the world's second-fastest

growing major economy. However, the year 2009 saw a significant slowdown in

India's official GDP growth rate to 6.1% as well as the return of a large projected

fiscal deficit of 10.3% of GDP which would be among the highest in the world.

India's large service industry accounts for 62.6% of the country's GDP while the

industrial and agricultural sector contribute 20% and 17.5% respectively. Agriculture

is the predominant occupation in India, accounting for about 52% of employment.

The service sector makes up a further 34% and industrial sector around 14%. The

labor force totals half a billion workers. Major agricultural products include rice,

wheat, oilseed, cotton, jute, tea, sugarcane, potatoes, cattle, water buffalo, sheep,

goats, poultry and fish. Major industries include telecommunications, textiles,

chemicals, food processing, steel, transportation equipment, cement, mining,

petroleum, machinery, information technology enabled services and software.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28PPP%29

http://en.wikipedia.org/wiki/Economy

http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Social_democratic

http://en.wikipedia.org/wiki/License_Raj

http://en.wikipedia.org/wiki/Protectionism

http://en.wikipedia.org/wiki/Corruption_in_India

http://en.wikipedia.org/wiki/Hindu_rate_of_growth

http://en.wikipedia.org/wiki/Economic_liberalisation_in_India



http://en.wikipedia.org/wiki/Market_economy

http://en.wikipedia.org/wiki/Economic_development_in_India



http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28real%29_growth_rate

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28real%29_growth_rate

http://en.wikipedia.org/wiki/Agriculture_in_India

http://en.wikipedia.org/wiki/Service_%28economics%29

http://en.wikipedia.org/wiki/Industrial_sector

http://en.wikipedia.org/wiki/Labour_in_India

http://en.wikipedia.org/wiki/Product_%28business%29

http://en.wikipedia.org/wiki/Rice

http://en.wikipedia.org/wiki/Wheat

http://en.wikipedia.org/wiki/Oilseed

http://en.wikipedia.org/wiki/Cotton

http://en.wikipedia.org/wiki/Jute

http://en.wikipedia.org/wiki/Tea

http://en.wikipedia.org/wiki/Sugarcane

http://en.wikipedia.org/wiki/Potato

http://en.wikipedia.org/wiki/Cattle

http://en.wikipedia.org/wiki/Water_buffalo

http://en.wikipedia.org/wiki/Sheep

http://en.wikipedia.org/wiki/Goats

http://en.wikipedia.org/wiki/Poultry

http://en.wikipedia.org/wiki/Fish

http://en.wikipedia.org/wiki/Computer_software



79

5.3 Growth of Indian GDP Rates

The Gross Domestic Product (GDP) in India expanded 7.8 percent in the first quarter

of 2011 over the same quarter, previous year. From 2004 until 2010, India's average

quarterly GDP Growth was 8.40 percent reaching an historical high of 9.60 percent

in September of 2006. India's diverse economy encompasses traditional village

farming, modern agriculture, handicrafts, a wide range of modern industries, and a

multitude of services. Services are the major source of economic growth, accounting

for more than half of India's output with less than one third of its labor force. The

economy has posted an average growth rate of more than 7% in the decade since

1997, reducing poverty by about 10 percentage points. This page includes: India

GDP Growth Rate chart, historical data and news.

India's economy rose 7.8 percent in the three months ended March 31 from a year

earlier, after a revised 8 percent gain in the previous quarter, the Central Statistical

Office said in a statement in New Delhi on May 31. That‘s the slowest pace in five

quarters. Manufacturing rose 5.5 percent in the three months through March from a

year earlier, compared with a 6 percent gain in the previous quarter. Finance and

insurance services grew 9 percent after a 10.8 percent jump in the previous quarter.

5.8

3.8

8.5

7.5

9.5 9.6 9.3

6.8

8

0

2

4

6

8

10

12

Growth Of India GDP Rate

GDP Rate

Source:-Economic Survey-2011e



80

Farm output rose 7.5 percent while mining advanced 1.7 percent, according to the

report. The sectors which registered significant growth rates are agriculture, forestry

and fishing at 7.5 percent, electricity, gas and water supply at 7.8 percent,

construction at 8.2 percent, trade, hotels, transport and communication at 9.3

percent, and financing, insurance, real estate and business services at 9.0 percent.

Contribution of Different Sectors in GDP

The service sector contributes more than half of India‘s GDP. Earlier agriculture was

the main contributor to the GDP. To improve the GDP and boost the economy, the

government has taken various steps like implementation of FDI policies, SEZ‘s and

NRI investments. In 2006, the country‘s trade contributed to around 24% of the GDP

from 6% in 1985. According to Goldman Sachs, India‘s GDP in current prices may

overtake France and Italy by 2020, Russia, Germany and UK by 2025 and Japan by

2035. It is also predicted that Indian economy will be the third largest after US and

China by 2035. In 2007, agriculture contributed around 16.6% of the GDP. Even

though its share has been declining, agriculture plays a major role in the India‘s

socio economic development. Industry contributes around 27.6% of the GDP (2007

EST.). The services sector contributed to 54% of the GDP in 2007. The IT industry

contributed around 7% of the GDP in 2008 which was 4.8% in 2005-06. Remittances

from overseas Indian migrants were around $27 billion or around 3% of the GDP of

India‘s economy in 2006.

32%20% 17%

27%

26% 29%

41%54% 54%

0%

20%

40%

60%

80%

100%

120%

For 1990-1991

For 2005-2006

For 2007-2008

Service Sector

Industry

Agriculture

Contribution of Sectors in GDP



81

Growth in the industrial sector was buoyant during the first two quarters (April-June,

July-September) of the current financial year. The manufacturing sector, in particular,

showed a remarkable robustness, growing at rates of 12.6 percent and 9.9 percent

respectively, during these two quarters. Thereafter industrial output growth has

begun to moderate. This compares with global trends as global manufacturing

continued to rebound post crisis till the first half of 2010 and has thereafter

moderated. India‘s post recovery industrial output growth has been largely driven by

a few sectors such as the automotive sector along with a revival in cotton textiles,

leather, food products, and metal products. Some sectors have shown extreme

month-on-month output volatility.

5.4 Economic Trends

In the revised 2010 figures, based on increased and sustaining growth, more inflows

into foreign direct investment, Goldman Sachs predicts that "from 2007 to 2020,

India‘s GDP per capita in US$ terms will quadruple", and that the Indian economy

will surpass the United States (in US$) by 2043. In spite of the high growth rate, the

report stated that India would continue to remain a low-income country for decades

to come but could be a "motor for the world economy" if it fulfills its growth potential.

Goldman Sachs has outlined 10 things that it needs to do in order to achieve its

potential and grow 40 times by 2050. These are

Improve governance

Raise educational achievement

Increase quality and quantity of universities

Control inflation

Introduce a credible fiscal policy

Liberalize financial markets

Increase trade with neighbors

Increase agricultural productivity

Improve infrastructure and

Improve environmental quality.

http://en.wikipedia.org/wiki/United_States



82

5.5 Industrial Production

Growth in the industrial sector was buoyant during the first two quarters (April-June,

July-September) of the current financial year. The

manufacturing sector, in particular, showed a remarkable

robustness, growing at rates of 12.6 percent and 9.9

percent respectively, during these two quarters. Thereafter

industrial output growth has begun to moderate. This

compares with global trends as global manufacturing

continued to rebound post crisis till the first half of 2010 and has thereafter

moderated.

India‘s post recovery industrial output growth has been largely driven by a few

sectors such as the automotive sector along with a revival in cotton textiles, leather,

food products, and metal products. Some sectors have shown extreme month-on-

month output volatility.

5.6 Inflation Scenario

Government‘s apparent failure to curb runaway inflation, as they try to sidle up to the

aam aadmi who has been worst hit by skyrocketing prices. Food inflation is hovering

near 20 per cent. Everyone is facing the brunt of rising prices. Food prices are

soaring. All essential items like vegetables, oil, milk, sugar are getting costlier.

Rentals and real estate rates have almost doubled in just a few months in most

cities. The real estate prices are at record highs making life miserable, especially for

people who have migrated to cities for jobs. Inflation hits you badly as prices keep

rising. As prices rise, the purchasing power of money goes down too. Inflation hits

retired folk and people with fixed incomes very badly. Inflation destabilizes the

economy as consumers and investors change their spending habits

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2010 16.22 14.86 14.86 13.33 13.91 13.73 11.25 9.88 9.82 8.58 - -

2009 10.45 9.63 8.03 8.7 8.63 9.29 11.89 11.72 11.64 11.49 13.51 14.97

2008 5.51 5.47 7.87 7.81 7.75 7.69 8.33 9.02 9.77 10.45 10.45 9.7



83

5.7 Monetary Trends

The current monetary policy stance, as indicated in the Bank‘s Second Quarter

Review (November 2010) was as follows:

Contain inflation and anchor inflationary expectations while being prepared to

respond to any further build-up of inflationary pressures.

Maintain an interest rate regime consistent with price, output, and financial

stability.

Actively manage liquidity to ensure that it remains broadly in balance, with

neither a surplus diluting monetary transmission nor a deficit choking off fund

flows.

In the same document the RBI observed that ‗based purely on current growth and

inflation trends, the Reserve Bank believes that the likelihood of further rate actions

in the immediate future is relatively low‘. This indication of pause will not deter it from

taking further policy actions if required and, accordingly, it also indicated that

‗however, in an uncertain world, we need to be prepared to respond appropriately to

shocks that may emanate from either the global or domestic environment‘. In

continuation of that announced policy, and renewed inflationary pressures, especially

in food prices, the RBI raised policy rates again in January 2010 by 25 bps in their

Third Quarter Review.



84

5.8 Fiscal Trends

The difference between total revenue and total expenditure of the government is

termed as fiscal deficit. The Budget for 2010-11 had estimated the level of fiscal

deficit at Rs. 3, 81,408 crore and revenue deficit at Rs.2, 76,512 crore. At the time of

presentation of the Budget for 2010-11 it was envisaged that nominal GDP (GDP at

current market prices) would grow by 12.5 per cent and was estimated at

Rs.69,34,700 crore. As proportions of the nominal GDP, fiscal and revenue deficits

were estimated at 5.5 per cent and 4.0 per cent respectively.

As per the advance estimates (AE) released by the Central Statistics Office (CSO)

on 7 February 2011, the nominal GDP for 2010-11 was placed at Rs.78,77,947

crore, which represents a year-on-year growth of 20.3 per cent, and was 7.8

percentage points higher than envisaged at the time of Budget formulation.

5.9 Foreign Trade

India‘s trade growth (in US dollar terms) has been robust at 20 per cent plus since

2002-03. While India‘s trade growth has a strong correlation with world trade growth,

it has been significantly higher than world trade growth particularly in two time

periods, first just following the 1990 reforms and second after 2003.Unlike many

other countries, the global recession only slightly jolted the continued upward growth

in India‘s export sector with exports rising at a reasonable rate of 13.6 per cent in

2008-09. The compound annual growth rate (CAGR) for India‘s merchandise exports

for the five-year period 2004- 05 to 2008-09 increased to 22 per cent from the 14 per

cent of the preceding five-year period. However, in 2009-10 export growth was

negative at (-) 3.5 per cent, partly reflecting the effect of global recession and partly

the higher base effect due to lagged export data of 2008-09. Despite this negative

growth, India‘s ranking in the leading exporters in merchandise trade

Fiscal Deficit (*estimated)

Year 2008-09 2009-10 2010-11

Percentage Of

GDP

6.0 6.3 4.8*



85

5.10 Foreign Exchange Reserve

Beginning from a low level of US$ 5.8 billion at the end of March 1991, India‘s

foreign exchange reserves gradually increased to US$ 25.2 billion by end-March

1995, US$ 38.0 billion by end-March 2000, US$ 113.0 billion by end-March 2004

and US$ 199.2 billion by end-March 2007. The reserves reached their peak at US$

314.6 billion at end-May 2008, before declining to US$ 252.0 billion at the end of

March 2009. The decline in reserves in 2008-09 was inter alia a fallout of the global

crisis and strengthening of the US dollar vis-à-vis other international currencies.

During 2009-10, the level of foreign exchange reserves again increased to US$

279.1 billion at the end of March 2010,

5.11 Investment Decision

Investors should attempt to determine the stage of the economic cycle of the

country. They should invest at the end of a depression when the economy begins to

recover. Investors should disinvest either just before or during the boom, or, at the

worst, just after the boom. Investment and is investments made at these times will

earn the investor greater benefits. Here, as the economy is in steady stage, investors

should disinvest their holdings in cyclical industries and switch to growth or

evergreen industries.



86

Industry Analysis



87

6.1 Introduction

The glass industry comprises four key segments: hollow glass (mostly containers),

flat glass, fibers and special glass. Container glass is the largest, dedicated to the

growing demand coming out of the food, drinks, perfume and pharmaceutical

sectors. The global glass industry is estimated to grow from USD 465 billion in 2007

to USD 597 billion in 2014 (Source: SPG Media). Among the various segments, the

largest are the food and beer segments. The Indian packaging industry size is

estimated at USD 16.7 billion. India constitutes 3% of the global packaging industry,

out of which the share of glass packaging is just 7%.

The Indian glass packaging industry is growing at around 7% and is expected to

grow at 12-15% over the next 10 years following increased consumption. India‘s

large growing middle-class and organized retail sector are the primary catalysts of

packaging industry growth. India‘s Rs775b packaging industry has been growing at a

CAGR of 15%, which is likely to increase to 20%. The container glass industry

constitutes 6-7% of the total packaging industry and has been growing at 7-8%

CAGR. We believe that the container glass industry offers huge growth potential,

given the expected acceleration in growth rate of user industries and low threat from

substitutes.

6.2 Industry Analysis

―Industry analysis is a market strategy tool used by businesses to determine if they

want to enter a product or service market. Company

management must carefully analyze several aspects of the

industry to determine if they can make a profit selling goods

and services in the market.‖With the help of the Industry

analysis investor also able to know future scope of success of

the industry,



88

6.3 Future Demand Scope

The demand for glass containers is driven by a growth in end-user segments like

liquor, beer, pharmaceuticals, and food processing and carbonated drinks. The liquor

and beer industries are the biggest users of glass containers (65% share), followed

by pharmaceuticals (11%), food (13%), carbonated drinks (7%), cosmetics and

others (4%).

At US$ 14 billion, Indian packaging industry has been growing at ~ 15% over the last

few years Expected to accelerate further with increasing urbanization, growing

middle class and expansion of modern retail Indian glass container market stood at

US$ 1 bn plus in FY10 with a growth of ~ 12% Entry barrier owing to capital

intensive nature Top 3 players are HNG, Piramal Glass and AGI Glaspac Low per

capita glass container consumption of 1.4 kg in India as compared to 27.5 kg. in US

and 10.2 kg. In Japan, Strong economic drivers for end-user segments (liquor and

beer, pharmaceuticals, food, cosmetics, etc.)



89

From Customer Segments

(1) From Alcohol & Beverage Industry:

The alcohol and beverage industry, especially IMFL, is expected

to sustain 12% CAGR on account of changing lifestyles and rise

in disposable incomes. However per capita alcohol consumption

(in India) is a mere 1.8 litres per adult while in Russia it is around

10 liters per adult.

Growth Drivers

Increase consumption among urban women. Expected to increase from 10%

of all consumers in the 2005-2015 periods to 25%

Rising disposable incomes and changing lifestyles

Higher penetration of international brands like SAB Miller and, Diageo

resulting in the introduction of premium brands.

(2) From Pharmaceuticals Industry:

India's Pharmaceutical Industry is the 3rd largest in the world in volume terms

and14th in value terms. The Indian domestic

market is currently ~USD 12.3bn and is growing at

CAGR of 12-15% as against a global average of

4-7%. It is projected to grow to USD 20bn by

2015.

Growth Drivers

Increased health awareness

Expansion of healthcare facilities in the rural and far-flung areas to further

boost demand

increasing penetration of customized insurance plans would drive afford ability

of healthcare services



90

(3) From Food Processing Industry:

The retail food sector of India is expected to double from USD 70 bn in 2008 to USD

150 bn by 2025 (Source: McKinsey) on account of a growing health consciousness

resulting in the increased use of glass packaging. In India, 10-12% of all food and

beverages are packed in glass containers as against 40-50% in developed

economies (Source: CRISIL).

Growth Drivers

Increasing health consciousness with shift from traditional unpackaged

formats to packaged, branded products

Increase in penetration of glass containers – currently10- 12% of all food and

beverages are packed in glass containers in India as compared to 40-50% in

developed markets



91

Company Analysis



92

7.1 Introduction

Company analysis, or corporate analysis, refers to actions undertaken for an in-

depth evaluation and to gain an understanding of a particular company's past

performance and future prospects. A thorough

company analysis will focus on all aspects of the

corporate entity, including management structure

and expertise, finances, growth prospects,

profitability, market share and intangible factors

such as goodwill in the market and brand image.

Results of the analysis are used in reaching business decisions by external parties,

such as whether or not to invest in or go into a partnership with the analyzed

company.

A company analysis includes basic information about the company such as the

mission statement and vision as well as the values and goals. During a company

analysis, an investor also looks at the history of the company, focusing on events

that have shaped the company.

A company analysis looks into what goods or services the company sells. If the

company is a manufacturing company, an analysis studies what products the

company makes, and analyzes the quality and the demand of these products. If it's a

service business, the investor studies the services offered.Financial information is

analyzed by reviewing financial statements and calculating financial ratios.

Information from this company is compared to other companies in the same industry.

7.2 Methods of Company Analysis

Internal Analysis

When analysis is conducted internally by a business's management, the results can

help in identifying problems and in remedying a situation. Even if a business seems

to be performing well, a company analysis sometimes identifies practices and

processes that may be tweaked to enhance performance. When performance is

more efficient, its associated costs go down and the profit margins go up. In large

companies with completely separated departments, a company analysis may prove

that processes currently practiced in one department may work equally well in another

department. A timely conducted analysis may also inspire innovation to gain market share.



93

External Analysis

When used by external parties, a company analysis answers the questions that an

investor may have about the company. Investors may make use of a SWOT

(strength, weakness, opportunity, threat) analysis to better understand the

company's current position in its industry, probable position in the near and long-term

future and to make educated decisions about engaging in business with the

company. SWOT analysis may be particularly helpful when reviewing businesses

operating in markets that are demographically, culturally and economically different.

Ratio Analysis

Ratio analysis, also known as fundamental analysis, is an evaluation of a company's

financial statements and is an indicator of the company's past performance and

future direction. Analysts may use several different ratios to form a comprehensive

picture of the corporation's financial situation; different groups of ratios aim to

evaluate different aspects of a company's finances, including liquidity, profitability

and balance sheet items. Financial ratios may be formed using information for the

same company over a number of years for an indication of trend and direction, or

using financial data from different companies for a comparison with competitors.

Frequency

Well-managed companies tend to conduct an internal company analysis on a regular

basis, to keep abreast of changes affecting the business's performance. Managers

may present reports of the analysis to shareholders annually, or to attract business

prospects. Companies that tend to conduct routine analysis tend to be more in touch

with the different contextual factors affecting the business and are more dynamic and

responsive to market forces.

Here, we use the Ratio analysis for analysis of all the three companies. And making

comparison of them



94

7.3 Theoretical Aspects of Ratio Analysis

Ratio analysis is one of the techniques of financial analysis to evaluate the financial

condition and performance of a business concern. Simply, ratio means the

comparison of one figure to other relevant figure or figures.

According to Myers, ―Ratio analysis of financial statements is a

study of relationship among various financial factors in a business as

disclosed by a single set of statements and a study of trend of these

factors as shown in a series of statements."

Ratio Analysis is a relative and more focused analysis of financial statements. That

does not mean that it can be used independently of other tools and techniques. It

leads to an expansion and further analysis of the finding recorded through other

tools. Ratio analysis is of particular significance in the following cases:

Inter-firm comparison, because absolute figure comparison will lead to

nowhere.

Inter-firm comparison for the same reason.

Comparison against industry benchmarks.

Analysis of chronological performance over a long period.

Accounting ratios are very useful as they briefly summaries the result of detailed and

complicated computations. Absolute figures are useful but they do not convey much

meaning. In terms of accounting ratios, comparison of these related figures makes

them meaningful. For example, profit shown by two-business concern is Rs. 50,000

and Rs. 1, 00,000. It is difficult to say which business concern is more efficient

unless figures of capital investment or sales are also available. Analysis and

interpretation of various accounting ratio gives a better understanding of the financial

condition and performance of a business concern.



95

7.4 Classification of Ratios

Ratios are classified according to their functions and objective. Despite the purpose

behind them being normally the same, there is no standard clarification of ratio.

Different authors classify them differently. Categories of Ratio are:

Important Aspects about Ratio:

First, a ratio is a "flag" indicating areas of strength or weakness. One or even

several ratios might be misleading, but when combined with other knowledge of a

company's management and economic circumstances, financial analysis can tell

much about a corporation.

Second, there is no single correct value for a ratio. The observation that the value

of a particular ratio is too high, too low, or just right depends on the perspective of

the analyst and on the company's competitive strategy.

Third, financial ratios are meaningful only when compared with some standard,

such as an industry trend, ratio trend, a trend for the specific company being

analyzed, or a stated management objective.



96

7.5 Ratios Analysis of Glass Bottle Manufacturing Sector

(1) Return on Net worth (%):

The Ratio measures the net profit earned on the shareholders‘ funds. It is the

measure overall profitability of a company after discharging cost of borrowed capital

and income tax payable to the government. It is also known as return on Equity or

ROE ratio.

PAT- Preference Dividend Return on Net Worth = ---------------------------------------------- X 100 Equity Share Holder‘s Fund or Net Worth

Year HNG India Piramal Glass Surat Glass India Limited

2009-10 14.88% 3.83% 1.47%

2010-11 7.30% 14.60% 30.66%

Here, by analyzing the data of retune on net worth of the glass bottle manufacturing

sector it shows that in financial year 2009-10,Hng India gave highest retune on the

Equity shareholders funds about 14.88%.it shows the company has optimum

utilization of the resources. And Piramal glass and Surat glass India provide just

3.83% and 1.47% respectively Because the company has passing throw the

establishment phase and the production facility has been not fully occupied.HNG

Indian get advantage of the this and getting high market. In year 2010-11, HNG India

retune on net worth ration has been drop down to the 7.30% .it shows 7.58%

decrease in the retune of the company. And piramal glass RONW ratio has been

reach to the 14.60%, it shows the 10.87% increment in then retune of the company.

Because of the production has been fully established. Surat glass has gave highest

retune in the financial year about 30.66%.Surat glass has increase in the retune

about 29.19%

14.88%

3.83%1.47%

7.30%

14.60%

30.66%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

HNG India Piramal Glass Surat Glass India Limited

2009-10

2010-11

RETURN ON NET WORTH



97

(2) Debt Equity (Times):

The ratio measures the proportion of debt and capital – both equity and preference,

in the capital structure of a company. In other word, it measures the extent of assets

financed through long-term borrowings.

Long Term Debt Debt Equity Ratio = ---------------------------------

Total Net Worth


2009-10 0.54 1.39 2.03

2010-11 0.53 1.23 1.75

From HNG India‘s capital Structure It‘s shows that the company 54% debt against

the 100% equity. In financial year 2009-10, company,‘s Debt-Equity ratio has been

0.54,So it shows that the company has preferred less long term Debt and more

preferred to have Equity financing. Piramal Glass has Debt-Equity ratio has been

1.39.so the company has preferred to have long term debt financing in capital

structure. So the companies have low weighted average cost of capital and in

inflationary situation the company have get advantages of the low interest rates. In

Surat Glass has 2.03 Times Debt-Equity ratio in its capital Structure. And in Financial

year 2010-11, The Debt equity ratio of the company has been slightly decreased to

0.53 times. Piramal glass debt equity ratio has been drop down to the 1.23 Times.

Company have release it Debt during the financial year. Surat glass debt equity ratio

has been decrease to the 1.75 times. Company invests more equity share holder‘s

capital in the capital structure. From entire analysis its shows HNG India has been

very stable capital structure.

0.54

1.39

2.03

0.53

1.23

1.75

0

0.5

1

1.5

2

2.5


2009-10

2010-11

DEBT-EQUITY RATIO



98

(3) Interest Coverage Ratio (Times):

The interest coverage ratio is a measure of the number of times a company could

make the interest payments on its debt with its earnings The lower the interest

coverage ratio, the higher the company's debt burden and the greater the possibility

of bankruptcy or default.

PAT + Interest on Long Term Debt Interest Coverage Ratio = --------------------------------------------------- Interest on Long Term Debt .


2009-10 4.29 1.25 1.18

2010-11 2.69 2.53 2.4

From above figure, in financial year 2009-10 HNG Indian have interest coverage

ratio has been 4.29 times. It‘s shows the good shine for the investors of the long

term debt holder. Piramal Glass has 1.25 times & Surat Glass have 1.18 times

interest coverage ratio. So it shows that companies have low interest coverage ratio.

As we show before that both the company have not occupied full facility in the

financial year 2009-10.Than after the HNG India‘s interest coverage ratio has been

drop down to the 2.69 times because of the law profit in the financial year. piramal

Glass & Surat Glass have increase in the ratio to 2.53 times & 2.4 Times

respectively. So it shows the good sign for the long term debt holder.

4.29

1.25 1.18

2.692.53 2.4

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5


2009-10

2010-11

Interest Coverage Ratio



99

(4) Current Ratio (Times):

The ratio measures the ability of a company to discharge its day-to-day bills, or

current liabilities, as and when they fall due, out of the cash or near cash, or current

assets that it possesses

Current Assets, Loans & Advances + Short term Investment Current Ratio = ----------------------------------------------------------------------------------------- Current Liabilities + Provision + Short term Debt


2009-10 2.41 3.92 2.66

2010-11 2.04 3.21 5.81

From the above figure, current ratio has been idea proportion is 2:1.But the Glass

bottle manufacturing sector have shows the more than 2:1 proportion. Because the

huge stock of inventory has been required inventory. In year 2009-10, HNG India

has been Current ratio is 2.41.it shows the company inventory management system

has been quite good. Piramal Glass shows current ratio has been 3.92 and Surat

Glass has Current ratio 2.66.But in financial year the current asset maintenance has

been become more efficient and the current ratio has become 2.04rechace to the

ideal ratio. And piramal Glass also decrease and reach to the 3.21. But the surat

glass current ratio has been increase and reach to the 5.66 times. It shows the weak

ratio of the company. And huge amount of working capital has been block.

2.41

3.92

2.66

2.04

3.21

5.81

0

1

2

3

4

5

6

7


2009-10

2010-11

CURRENT RATIO



100

(5) Quick Ratio or Acid-test Ratio (Times):

The ratio measures as to how quick is the ability of a company to discharge its

current liabilities net of working capital limits, as and when they fall due, out of cash

or current assets net or inventories that it possesses. Inventory takes the longest of

all the current assets to convert into cash. Working capital limits are sanctioned and

renewed on a yearly basis and not settled daily. Hence both are excluded. This is

also known as Acid-test ratio.

Current Assets, Loans & Advances –Inventories + Short term Investment = --------------------------------------------------------------------------------------------------

Current Liabilities + Provision + Short term Liabilities – Bank Overdraft


2009-10 1.76 3.01 1.68

2010-11 1.34 2.47 3.66

AS per above figure, Quick ratio of the HNG India has been shows 1.76 Times in

financial year 2009-10. Piramal Glass has shows the 3.01Times so it shows the

huge proportion has been block by liquid assets in the current assets. And Surat

Glass India Limited has 1.68 times. So in financial year 2009-10 Piramal Glass has

shows the very high Ratio so the huge amount of the current assets has been block

in the liquid Assets. In financial year2010-11, Quick ratio of the HNG India has

reducing by 25% and reach to the 1.34Times. it shows the company has release the

liquid assets. Quick ratio of Piramal glass has been also reduces and reaches to the

2.47 times in the financial year. Surat Glass has been release the inventories I the

financial year and the huge amount of the current assets has been acquired by the

liquid assets and reach to the 3.66Times.it shows the increment of 200%.

1.76

3.01

1.681.34

2.47

3.66

0

0.5

1

1.5

2

2.5

3

3.5

4


2009-10

2010-11

QUICK RATIO



101

(6) Inventory Holding Period (Days) :

This indicates how quickly a company is turning over its inventory. When deciding

the appropriate level of inventory, a company should strike a balance between the

cost of tying up capital and the demands from the customer.

Inventory Inventory Holding Period (Days) = --------------------------------------

Cost of Goods Sold


2009-10 56.3 Days 63 Days 80 Days

2010-11 54.1 Days 67 Days 43.74 Days

In Glass bottle manufacturing sector huge proportion of current assets has been

occupied by Inventories. In year 2009-10,HNG India has average inventory storage

period has been 56 days which shows the lowest time period between all the other

companies in financial year. Piramal Glass has inventory holding period has been 63

days. It‘s quite high than the other companies. Surat glass has weak inventory

management. And the plant has been not running on full capacity so that the high

inventory holding period. After that the inventory holding period of the HNG India has

been reduces by 2 days. Piramal Glass has Increment in the inventory by 4 days.

But the Surat Glass India limited inventory holding period has been reduce by 36

days. So the inventory management system of the company has been become more

efficient.

56.363

80

54.1

67

43.74

0

10

20

30

40

50

60

70

80

90


2009-10

2010-11

INVENTORY HOLDING PERIOD



102

(7) Collection Period Allowed to Customers (Days) :

The ratio measures the credit period allowed to the customers on credit sales or how

fast a company realizes its outstanding dues. It is also known as Days‘ Sales in

Receivables Ratio.

Receivable Collection Period Allowed to Customers (Days) = ----------------------- X 365

Total Sales


2009-10 47.1 Days 145 Days 90 Days

2010-11 46.5 Days 144 Days 38.6 Days

In Glass Bottle manufacturing sector the Credit period has been huge. So huge

amount of current assets has been block on the debtors. In financial year 2009-10

Average collection period of the HNG India limited has been 47.1 days Piramal

Glass has Average Collection period is very high. It‘s about 144 days. Major part of

the current assets has been block in the debtors. Surat Glass has 90 days allowable

period to the debtors. But in financial year 2010-11, Average collection period of the

HNG India & Piramal Glass has been slightly change about 1 day. But the Surat

Glass Indian limited has reduced the credit limit period and become

38.6days.somthat management efficiency has been work of the company.



103

(8) Fixed Assets Turnover Ratio (Times) :

The ratio measures the extent of turnover or volume of gross income generated by

the fixed assets of a company or in other words the efficiency in their utilization.

Net Sales Fixed Assets Turnover Ratio (Times) = ------------------------------ Net Block of Fixed Assets


2009-10 1.21 1.05 0.3

2010-11 1.26 1.21 1.49

All the companies of this sector has done huge investment in fixed assets, the

machine5ruies of the company has been more costly. In year 2009-10, fixed assets

turnover ratio has been 1.21 times, Piramal Glass has 1.05 Times it shows the good

for the company. But the Ratio of the Surat Glass has been just 0.3 Times. Because

of the production process has been not run properly established. In financial year

2010-11, fixed assets turnover ratio has been increase by 4 % and Piramal Glass

has been increase by 20 %.but the Surat glass has fully occupied plant and shows

the highest sales and ratio has been become 1.49 times.

1.21

1.05

0.3

1.26 1.21

1.49

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6


2009-10

2010-11

FIXED ASSETS TURNOVER RATIO



104

(9) Net Worth Turnover Ratio (Times) :

The ratio measures the extent of turnover or volume of gross income generated by

the Net Worth of a company. Throw this ratio we can measure that at wha5t extent

the equity share holder‘s capitals generate sales in the organization.

Net sales Net worth Turnover Ratio (Times): --------------------------------------------- Equity share Holder‘s Funds


2009-10 1.3 1.58 0.69

2010-11 1.3 1.69 3.5

From the above Figure, in financial year 2009-10,HNG India has net worth turnover

ratio has been 1.3 Times. It was not sufficient and the money has been not fully

occupied. In Piramal Glass the Net worth Turnover ratio has been 1.58.it‘s highest in

the financial year. Surat Glass has 0.69 Times the net worth turnover ratio .it was low

but Company has start doing production on the last three month of the financial year.

The company shows the hope better future results. in financial year 2010-11,HNG

India‘s Ratio remains unchanged. Piramal Glass has increase by 7%.Surat Glass

has shows the good turnover of 3.5 times. It shows the good shine for the equity

share holders

1.31.58

0.69

1.3

1.69

3.5

0

0.5

1

1.5

2

2.5

3

3.5

4


2009-10

2010-11

NET WORTH TURNOVER RATIO



105

(10) Gross Profit Ratio (%):

Gross profit ratio is the ratio of gross profit to net sales i.e. sales less sales returns.

The ratio thus reflects the margin of profit that a concern is able to earn on its trading

and manufacturing activity. It is the most commonly calculated ratio. It is employed

for inter-firm and inter-firm comparison of trading results.

Gross Profit GP Ratio (%) = ----------------------- X 100 Sales


2009-10 15.20% 12.58% 26.85%

2010-11 10.60% 18.43% 22.57%

Gross Profit ratio of the HNG India has been good in the financial year 2009-

10.Gross profit margin has been 15.20% of the sales .As compares to the HNG India

the Piramal Glass has 12.58% of the sales margin as gross profit. It quite good But

the Surat Glass has the Gross profit ratio has been 26.85% in the financial year

2010-11.it was higher than the both the companies .but reason behind the huge

change in the ratio is HNG & Piramal has producing the al the new bottle from the

fresh raw material. But the Surat glass has use the Cullet in the raw material. So the

company has law cost of the raw material. in year 2010-11,Hng India‘s gross profit

ratio has been reduce by 4.80% and reach to the 10.20%.Piramal glass GP ratio

increase by 7.15 %. It‘s good for the company because the all the other companies

facing the decrease I the Piramal has shows the increase in the ratio. Surat Glass

has also decrease in gross profit margin.

15.20%12.58%

26.85%

10.60%

18.43%

22.57%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%


2009-10

2010-11

GROSS PROFIT RATIO



106

7.6 Common - Sized Analysis

This tool is very useful in comparing the performance the financial position of two

companies, either in the same industry or in different industries. Since no two

balance sheets will have the same figures they cannot be compared and analyzed

based on absolute figures. They have therefore to be converted into what is known

as common-sized statements. The conversion process is very simple. In the case of

balance sheet, each item is restated taking the total of ‗sources of funds‘/‘application

of funds‘ as 100. Likewise, in the case of income statement ‗net sales‘ is taken as

100 and all other items are restated proportionately. Therefore, it is also known as

Vertical Analysis.

7.7 Comparison of Common Size Statement

Particular Piramal

Glass

HNG

Glass

Surat Glass

India Limited

Sales 96.25% 99.23% 100%

+ Other Operating Income 3.75% 0.77% -

Total Revenue 100% 100% 100%

(-) Total Expenditures 82.26% 89.41% 77.43%

Gross Profit 17.74% 10.59% 22.57%

(+) Other Income - 0.39% 0.14%

Earnings Before Interest And Tax 17.74% 10.98% 22.71%

(-) Interest 5.81% 3.28% 10.56%

(-) Deprecation - - 3.33%

Profit Before Tax 11.93% 7.70% 8.82%

(-) Tax 3.04% 2.14% 0.05%

Profit After Tax 8.89% 5.56% 8.77%



107

Interpretation

The common size statement of the Glass Bottle manufacturing Sector, It shows that

the Piramal Glass has 96.25% revenue comes from sales and 3.75% of revenue

comes from the other income.HNG India has 99.23 revenue comes for the Sales

and just 0.77% revenue comes from the other income. In Surat glass has only

revenue source form the sales. So from the above data it shows that Piramal has

generated revenue from the other operating income. Gross profit percentage of the

Piramal glass is 17.74%.HNG India has 10.59%and Surat glass has 22.57% as

Gross profit. So t shows that the Surat glass has good percentage of the Gross

profit.HNG India and Surat Glass has also generated revenue for the other income

from the investment activity. Statement also shows that Surat glass has pay 10.56%

income has been spend to the interests on the long term investment. Piramal Glass

has pay 5.81% and HNG India has pay 3.28% as interest. Tax saving stricter of the

Surat glass has been very good. Company has pay only 0.05% income as tax.

Piramal Glass has pay 3.04% and HNG India has paid 2.14% as tax. Profit after tax

of the Piramal glass has been highest 8.89% and HNG India has earn just 5.56% as

the profit after tax.



108

CONCLUSION

I hereby completion of summer training report. The glass bottle manufacturing sector

has been fast growing sector in India. Despite the present slowdown in the economy,

the Indian glass container industry has reported a double digit growth. The industry,

presently dominated by 10 big players, is likely to close the fiscal with a turnover of

Rs 4,500 crore registering growth of 12 per cent. The industry is bullish it would

continue to report double digit growth for the next few years.

India's economy rose 7.8 percent in the three months ended March 31 from a year

earlier, after a revised 8 percent gain in the previous quarter, the Central Statistical

Office said in a statement in New Delhi on May 31. That‘s the slowest pace in five

quarters. Manufacturing rose 5.5 percent in the three months through March from a

year earlier, compared with a 6 percent gain in the previous quarter. Indian

manufacturing sector has fast growing in the economy. Major share of the Indian

GDP has been copes from the manufacturing sector. There also mind set of the

population has been change towards the environment protection and the opportunity

has been created for the glass bottle manufacturing sector. Sector has been growing

so fast and new opportunity has been created for the sector.

Indian packaging industry has been growing at ~ 15% over the last few years

Expected to accelerate further with increasing urbanization, growing middle class

and expansion of modern retail Indian glass container market stood at US$ 1 bn plus

in FY10.the new technological up gradation on the manufacturing of Glass has been

innovated. There has been high standardize work of the technology has been

establish. From the ration analysis the Surat Glass India has been giving highest

retune on the equity share holder‘s net worth. As the listed company the Piramal

Glass has gave Good return to shareholders. HNG India has considered major part

of the capital Structure from the equity. Current ratio of the Surat Glass has been

very high. Piramal Glass has shows the very high Ratio so the huge amount of the

current assets has been block in the liquid Assets. Inventory holding period of

Piramal Glass has been high as compare to the other companies.

Credit limit of the customer has been very high in the industry. From the common

size statement analysis the Piramal Glass & Surat Glass has provide the good return

to the equity share holders. From the entire study the Glass container industry

showing good opportunity for the equity share holder‘s.



109

SUGGESTIONS

Glass bottle manufacturing sector companies have emerging phase. So the

new investors have chances diversify their portfolio in different sector to get

long term higher return.

Sector has face competition from PET bottles. if the government take decision

against PET bottles. So the investors have chances of getting good return.

Before investing we should undertake a deep study on the past sales. Net

worth turnover ratio helpful for finding the utilization of capital investment.

HNG India and Piramal Glass has looks the fundamentally strong company.

So the investor has opportunity for getting higher return.

Glass bottle manufacturing sector has required huge investment in fixed

assets and current assets. So new entrepreneurs required huge capital

investment.

Economic performance is greatly affected to the performance of the industry

of the country. So investors should know economic performance of country

while investing. Currently Indian economy‘s manufacturing sector has growing

fast.

Glass bottle manufacturing sector has only two company has listed in the

stock market. So the investor has to invest in the particular company before

knowing all the fact.

Sector has generally generated the finance from the debt. So the investor has

opportunity of investment throw debt.



110

BIBLIOGRAPHY

BOOKS:

Stock Exchange and Portfolio Management

- Gorden & Nagrajan (Third Edition)

WEB LINKS:

http://www.business-standard.com/india/news/glass-container-sector-gallops-

ahead/353637/

www.hngindia.com

http://www.indiamarkets.com/imo/industry/packaging/GlassBottles/glassbot.asp?

display_content_link=0&search_link=0#Industry

http://www.gits4u.com/water/water16.htm#New%20development%20in%20bottle

d%20water%20industry

http://www.reuters.com/finance/stocks/companyOfficers?symbol=HNGI.BO&WT

modLOC=C4-Officers-5

http://www.insight.religaretechnova.com/Insight/DigitalDocs/Stamped/AR2003%2

0Stamped/AR012H7.PDF

http://www.google.co.in/#hl=en&source=hp&q=hngindia.com&oq=hngindia&aq=0

&aqi=g1gsv1&aql=&gs_sm=e&gs_upl=1513l8330l0l12l11l1l0l0l0l405l1575l1.0.3.

1.1&fp=9e8cb047d7394d49&biw=1037&bih=435

http://glass.piramal.com/corporate/who-we-are/vision-mission.html

http://glass.piramal.com/pdf/PGL%20Annual%20Report%202010%20%28printed

%20copy%29.pdf

http://glass.piramal.com/pdf/PGL_Consolidated_Results_%2031%20March%202

011.pdf

http://glass.piramal.com/pdf/LOF_NEW_18-08-2009_CTP.pdf

http://www.google.co.in/search?hl=en&q=global%20packaging%20industry%20o

verview&gs_sm=e&gs_upl=1816l13077l0l19l19l1l1l1l0l682l6287l0.3.5.5.0.4l17&b

av=on.2,or.r_gc.r_pw.&biw=1202&bih=474&um=1&ie=UTF-

8&tbm=isch&source=og&sa=N&tab=wi

http://www.google.co.in/search?um=1&hl=en&biw=1037&bih=435&tbm=isch&sa=

1&q=packaging+industry&oq=packaging+industry&aq=0&aqi=g2gm1gms1&aql=

&gs_sm=e&gs_upl=120457l124033l0l12l12l0l0l0l0l380l1983l0.1.3.3l7

http://www.hngindia.com/

http://www.indiamarkets.com/imo/industry/packaging/GlassBottles/glassbot.asp?display_content_link=0&search_link=0#Industry

http://www.indiamarkets.com/imo/industry/packaging/GlassBottles/glassbot.asp?display_content_link=0&search_link=0#Industry

http://www.gits4u.com/water/water16.htm#New%20development%20in%20bottled%20water%20industry

http://www.gits4u.com/water/water16.htm#New%20development%20in%20bottled%20water%20industry

http://www.reuters.com/finance/stocks/companyOfficers?symbol=HNGI.BO&WTmodLOC=C4-Officers-5

http://www.reuters.com/finance/stocks/companyOfficers?symbol=HNGI.BO&WTmodLOC=C4-Officers-5

http://www.insight.religaretechnova.com/Insight/DigitalDocs/Stamped/AR2003%20Stamped/AR012H7.PDF

http://www.insight.religaretechnova.com/Insight/DigitalDocs/Stamped/AR2003%20Stamped/AR012H7.PDF

http://www.google.co.in/#hl=en&source=hp&q=hngindia.com&oq=hngindia&aq=0&aqi=g1gsv1&aql=&gs_sm=e&gs_upl=1513l8330l0l12l11l1l0l0l0l405l1575l1.0.3.1.1&fp=9e8cb047d7394d49&biw=1037&bih=435



http://glass.piramal.com/corporate/who-we-are/vision-mission.html

http://glass.piramal.com/pdf/PGL%20Annual%20Report%202010%20%28printed%20copy%29.pdf

http://glass.piramal.com/pdf/PGL%20Annual%20Report%202010%20%28printed%20copy%29.pdf

http://glass.piramal.com/pdf/PGL_Consolidated_Results_%2031%20March%202011.pdf

http://glass.piramal.com/pdf/PGL_Consolidated_Results_%2031%20March%202011.pdf

http://glass.piramal.com/pdf/LOF_NEW_18-08-2009_CTP.pdf

http://www.google.co.in/search?hl=en&q=global%20packaging%20industry%20overview&gs_sm=e&gs_upl=1816l13077l0l19l19l1l1l1l0l682l6287l0.3.5.5.0.4l17&bav=on.2,or.r_gc.r_pw.&biw=1202&bih=474&um=1&ie=UTF-8&tbm=isch&source=og&sa=N&tab=wi




http://www.google.co.in/search?um=1&hl=en&biw=1037&bih=435&tbm=isch&sa=1&q=packaging+industry&oq=packaging+industry&aq=0&aqi=g2gm1gms1&aql=&gs_sm=e&gs_upl=120457l124033l0l12l12l0l0l0l0l380l1983l0.1.3.3l7





111

ANNEXURE



112

PROFIT AND LOSS A/C FOR THE YEAR ENDED ON 31ST MARCH, 2010

ON BOOKS OF SURAT GLASS INDIA LIMITED

BALANCE SHEET AS ON 31st MARCH, 2010 ON BOOKS OF

SURAT GLASS INDIA LIMITED

PARTICULAR SCHEDULE AMOUNT

Income:

Sales (Less: returns) K 90,101,027.00

Other Income L 340,664.00

Increase/(Decrease)in Stock M 35,405,885.88

Total Income 125,847,576.9

Expenses:

Trading & Operating Expenses N 101,707,998.08

Sales & Administration Expenses O 4,941,236.62

Financial Charges P 11,626,799.87

Depreciation for the year 5,130,362.00

Total Expenses 123,406,396.57

Profit / (LOSS) Before Taxation 2,441,180.31

Provision for Taxation 400,000.00

Profit After Taxation 2,041,180.31

Previous Year Balance Of Earlier Years (27,165)

Adjustment of earlier (21,463)

Balance Carried To Balance Sheet 1,992,552.31



113

PARTICULAR SCHEDULE AMOUNT

SOURCES OF FUNDS

[1] Share Holders Fund:

Share Capital & Share Premium A 142,262,000.00

Reserves & Surplus B 1,992,552.31

[2] Loans Fund:

Secured Loan C 268,651,217.63

Unsecured Loan D 20,637,249.00

Total Sources Of Funds

433,543,018.94

APPLICATION OF FUNDS:

[1] Fixed Assets

Opening Balance(GB) 108,771,408.88

Addition During The year 272,795,307.38

Capital Work-in-Progress 0

Gross Block 381,566,716.26

Less: Depreciation Expense 5,140,992.00

Net Block Of Fixed Assets E 376,425,724.26

[2] Deposits F 8,033,820.00

[3] Current Assets, Loans & Advance G 105,613,560.68

Less: Current Liabilities & Provision H 39,622,555.00

Net Current Assets 65,991,005.68

Less: Sundry Creditors for Capital Goods I (21,638,736.00)

Preliminary & Pre Operative Expenses J 4,731,205.00

Total Application Of Funds

433,543,018.94



114

TRADING A/C FOR THE YEAR ENDING 31ST MARCH, 2011


PARTICULAR AMOUNT

Sales (A)

487841679.2

Raw Material consume (B)

Op Stock 28324708.7

+ Purchase 347656480.8

- Closing Stock 45268545.24 330712644.3

Direct Expenses (C)

Salary 18885985.6

Diesel Fuel 1062396.8

Diesel Generator 126400

Electric Power Bill 179516.8

Gasbased Generator 757600

Kata Charges 50588

Labour Charges 7967537.6

Loading 1380999.2

Repair 233397.6

Tractor 23440

Transportations 271782.4

Transport Charge 12728321.6

VAT 3306566.4

Water 67462.4 47041994.4

Cost Of Sales (B + C=D)

377754638.7

Gross Profit (A - D)

110087040.4



115

PROFIT AND LOSS A/C FOR THE YEAR ENDIED ON 31st MARCH, 2011


PARTICULAR

AMOUNT

Gross Profit (Trading A/C) (A) 110087040.4

Indirect Income (B)

Interest Accord On Bank FD 255125

Interest Received On Bank FD 61685

Labor Job Works 233665

Labor Job Design Works 118838 669313

Total Income (A+B=C) 110756353.4

Indirect Expenses(Schedule-1) (D) 51502743.57

Administrative Expenses (E)

Depreciation 16234574.4

Income Tax (F) 240000

Total Expenses (D+E+F=G) 67977317.97

Net Profit (C-G) 42779034.49



116

BALANCE SHEET AS ON 31ST MARCH, 2011

PARTICULAR

AMOUNT

Capital A/c

Reserve & Surplus 102827040

Share Capital 18982560

Share App. Money 20524000 142333600

Loans

Bank O.D 217085441.4

Unsecured Loan 27141195.2 244226637

Current Liabilities

Duties & Taxes (23282117.21)

Provisions 2879282.328

Sundry Debtors 41120561.26

Professional Tax 310472 21028198.4

Suspense A/C 530460

Profit & Loss A/C

Opening 1594041.85

Current 42779034.49 44373076.3

Total Liabilities

452491971

Fixed Assets (Schedule - 2) 327309165

Current Assets

Closing Stock 45268545.23

Deposits 18179971.2

Loans & Advances 67091.2

Sundry Creditors 51708438.4

Cash In Hand 4423334.192

Bank 2696702.8 122344083

Preliminary Expenses 2838722.2

Total Assets

452491971



117

Schedule:-1 Indirect Expenses

Particular Amount Particular Amount

Financial Charges 30399018.21 License Fees 10560

A/C Consultancy Fees 192000 Miscellaneous Exp. 20294.4

Courier/Postage 76416.8 Office Exp. 68590.4

Auditors Remuneration 29574.4 Administration Exp. 9141.6

Bonus 138945.6 Employer Exp. 68156

Computer Expenses 351172 Preliminary Exp. W.O 946240.8

Consulting Fees 38368 Printing Stationary 194972.8

Conveyance Expenses 30793.6 Professional Fees 531200

P & F Charges 28204.96 ROC Exp. 12240

Director Remuneration 2880000 Round of Figure 64.08

Inspection Fees 4000 Salary Exp. 10134158.4

EPCG Exp. 8800 Sales Commission 1833508.8

Export Supervision Charges 1840 Sanatory Exp. 8471.2

Factory Exp. 25214.4 Security Service 427343.2

Fire Fighting Equipments 782.4 Service Tax 222912.8

Foreign Travelling Exp. 276062.4 Staff Welfare Exp. 67672.8

Garden Maintenances 1464 Telephone 141060

Guj Pollution Control Board 6720 Travelling 337816

GPCB Fees 74000 Discount(Kasar) 25874.4

Insurance Expenses 204157.92 VAT Retune Penalty 2240

Interest Exp 959796 Vehicle Diesel & Petrol 75765.6

Labor Welfare -679.2 Vehicle Expenses. 279072

Legal & Profession Charges 44656 Vehicle Repairing Exp. 235080.8

Primary Exp. 79000 - -

Total Indirect Expenses 51502743.57



118

Schedule:-2 Fixed Assets

Particular Amount Particular Amount

Batch House 11180857.6 Feed Conveyor 160764.072

Furnace 145576407.2 Gas Generator 18811583.2

Furniture 901708.8 Gas Pipeline 2757945.9

Land & Building 32048117.6 Indigenous Equipments 114244.8

Plant & Machinery 47629587.5 Telephone 71870.4

Printing Unit 6634813.6 IS Machine 27561162.42

Vehicle 2432759.2 Mobiles 18988

Air Condition 86104 Moulds 8733681.6

Air Compressor 11432974.82 Plastic Carat 229563.2

Diesel Based Generator 2152443.2 R.D. Plant 755141.6

Electrification 6967107.83 Tally Server 56820

Fabrication 994518.4

Total Fixed Assets 327309165



119

1. Piramal Glass

No. Name of Ratio Formula 2009-10 2010-11

1

Current Ratio

Current Asset

Current Liability

44493

11340

= 3.92 :1

50639

15748

= 3.21 :1

2

Liquid Ratio

Current Asset – Cl. Stk.

Current Liability

44493 - 10357

11340

= 3.01 Times

50639 - 11685

15748

= 2.47 Times

3

Return on Net Worth

Ratio

Profit after tax X 100

Total Assets

1577 X 100

41075

=3.83%

6860 X 100

46996

=14.60%

4

Debt –Equity Ratio

Long Term Liabilities

Owner’s Fund

57056

41075

=1.39:1

57734

46996

=1.23:1

5

Gross Profit

Gross Profit X 100

Sales

8207 X 100

65217

= 12.58 %

13691 X 100

74290

= 18.43 %

6

Collection Period

allow to Customers

Receivables X 365

Sales

23234 X 365

58182

= 145 Days

25814 X 365

65217

= 144 Days

7

Inventory Holding

Period

Inventory X 365

Cost of goods sold

13804 X 365

79920

= 63 days

11685 X 365

63467

= 67 Days

8

Interest coverage

Ratio

PAT + Interest on Long

term Debt

Total Assets

1577 + 6103

6103

=1.25 Times

6860 + 4483

4483

=2.53 Times

9

Fixed Assets

Turnover Ratio

Net sales

Fixed assets

65217

63590

= 1.05 Times

79290

65265

= 1.21 Times

10

Net worth Turnover

Ratio

Sales

Equity shareholder’s funds

65217

41075

=1.58 Times

79290

46996

= 1.69 Times



120

2. HNG India

No. Name of Ratio Formula 2009-10 2010-11

1

Current Ratio

Current Asset

Current Liability

66030

27300

= 2.41 :1

59930

29320

= 2.04 :1

2

Liquid Ratio


Current Liability

66030 - 17958

27300

= 1.76 Times

59930 - 20610

29320

= 1.34 Times

3

Return on Net Worth

Ratio


Total Assets

15520 X 100

104280

=14.88 %

8642 X 100

118190

=7.31 %

4



Owner’s Fund

56570

104280

=0.54 :1

62770

118190

=0.53 :1

5

Gross Profit

Gross Profit X 100

Sales

20689 X 100

135990

= 15.2 %

16476 X 100

154341

= 10.6 %

6

Collection Period

allow to Customers

Receivables X 365

Sales

= 59.1 days

= 53.4 Days

7

Inventory Holding

Period

Inventory X 365

Cost of goods sold

17958 X 365

116423

= 56.3 days

20610 X 365

139051

= 54.1 Days

8

Interest coverage

Ratio


term Debt

Total Assets

15520 + 4717

4717

=4.29 Times

8642 + 5106

5106

=2.69 Times

9

Fixed Assets

Turnover Ratio

Net sales

Fixed assets

135990

111630

= 1.21 Times

154341

122300

= 1.26 Times

10

Net worth Turnover

Ratio

Sales

Equity shareholder’s funds

135990

104280

=1.30 Times

154341

118190

= 1.30 Times



121

3. Surat Glass India Limited

N

o.

Name of Ratio Formula 2009-10 2010-11

1

Current Ratio

Current Asset

Current Liability

105613560.68

39622555.00

= 2.66 Times

122344083

21028198.4

= 5.81 :1

2

Liquid Ratio


Current Liability

10561356.68–39078083.15

39622555.00

= 1.68 Times

122344083-45268545.23

21028198.7

=3.66 :1

3

Return on Net

Worth Ratio


Total Assets

2041180.31 X 100

139523347.31

= 1.47 %

42779034.49 X 100

139494877.8

= 30.66 %

4



Owner’s Fund

263651217.63+20637249

139523347.31

=2.03

244226637

139494877.8

1.75 Times

5

Gross Profit

Gross Profit X 100

Sales

24139578.8 X 100

90101027

= 26.80 %

11087040.4 X 100

487846179.2

= 67 %

6

Collection Period

allow to Customers

Receivables X 365

Sales

22318662.8 X 365

90101027

= 90 Days

51708438.4 X 365

487841679.2

= 38.6 Days

7

Inventory Holding

Period

Inventory X 365

Cost of goods sold

19539041.5 X 365

90101027

= 80 Days

45268545.23 X 365

377754638.7

= 43.74 Days

8

Interest coverage

Ratio


term Debt

Total Assets

2041180.3+11626799.87

11626799.87

= 1.18 Times

42779034.49+ 30399018.21

30399018.21

= 2.4 Times

9

Fixed Assets

Turnover Ratio

Net sales

Fixed assets

90101027

376425724.26

0.30 Times

487841679.2

327309165

= 1.49 Times

10

Net worth Turnover

Ratio

Sales

Equity shareholder’s

funds

90101027

139523347.31

0.64 Times

487841679.2

142333600 -2838722.2

= 3.50 Times



122