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Prepared By: JATIN TRIVEDI (MBA III SEM) Guided By : Dr. HITESH SHUKLA SHRI R.D. GARDI DEPARTMENT OF BUSINESS MANAGEMENT SUBMITTED TO SAURASHTRA UNIVERSITY, RAJKOT
COMPANY CERTIFICATE
DECLARATION
Hereby, my self, Jatin H. Trivedi, a student of semester-III, MBA of Smt. R.D. Gardi Department of Business Management, declare that the project work presented in this report is my own work and has been carried out under the supervision of Dr. Hitesh Shukla, Associate Professor at Smt. R.D.Gardi Department of Business Management, Saurashtra University, Rajkot.
Date:Place :-
(Jatin H. Trivedi)
PREFACE
The basic aim of the 3rd sem. management training Is to let the student aware of the basic proceedings going on in any industry, and let them grasp the information about the basic departments procedures..rather the basic level is altogether different for different students, which is also a matter of consideration. However.. As management is the work which is solely practical, it is important for every student to be competitive and dynamic in place of just being studious and theoretical. When I was in 2nd sem.I was given a chance to have been trained at any good industry I like, similarly as my other batch-mates. Being a PRODUCTION ENGNIEERING GRADUATE I was more attracted towards Manufacturing industry and that was one of the reason I choose Atul Auto Ltd., for my 3rd sem. Industrial training. The training proved to be a real learning experience for me and I learnt a lot from it regarding various departments like production, marketing , finance, human resource, etc., I got a lot new things to be learnt during my industrial both theoretical as well as of the practical world, that was all my industrial training was for, and I gained its total advantage.
Jatin H. Trivedi
ACKNOWLEDGEMENT
I was unaware before about this type of excellent learning experience can be taken inside the industry. I am feeling completely grateful to God and the all relevant people who helped me for completion of this project report as well as for my learning. First I am heartily thankful to the Dr. Pratapsinh L. Chauhan [HOD MBA Department], Dr. Girish Bhimani, [Associate Professor] Dr. Sanjay Bhayani [Associate Professor],and Hitesh J. Shukla [Associate Professor] From the deep feelings of my heart I present my gratitude towards Hitesh J. Shukla [Project Guide] for his valuable guidance in the completion of this project. I am feeling also attached with the family of ATUL AUTO LTD. For their members and departmental heads strong support and special help, Lastly but not lastly I present the feeling of gratitude towards my parents, colleagues, friends and all those who have supported me in completion of this training and project report. THANKS
Jatin H. Trivedi
INDEX
INDEX
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PARTICULARS
EXECUTIVE SUMMARY INDUSTRY INFORMATION IN DETAIL HISTORY DEVELOPMENT PLAYERS ANALYSIS COMPANY INFORMATION HISTORY CURRENT POSITION PRODUCTS MARKET-COVERAGE FUNCTIONAL AREA INFORMATION PRODUCTION/OPERATIONS MARKETING FINANCE/ACCOUNTING HUMAN RESOURCE MANAGEMENT INCLUDING ORGANISATION STRUCTURE RESEARCH AND DEVELOPMENT GENERAL SUMMARY AND FINDINGS BIBLIOGRAPHY
PG.NO .
5 6
EXECUTIVE SUMMARY
Name of the Unit Registered Office Address Atul Auto Limited Survey # 86, Plot # 1 to 4 N.H. 8-B, SHAPAR (VERAVAL) Dist.:- RAJKOT Tel.:- (02827) 252996/98/99 Fax.:- (02827) 252254 Jimmy Tower, Gondal Road, Opp. Swaminarayan Gurukul, RAJKOT 360004. Tel.:- (0281) 2374991/92/93 Fax.:- (0281) 2374994 Public Limited Company Large Scale Unit State Bank of Inida Citizens Coporative Bank Ltd. Laxmi Vilas Co-operative Bank State Bank of Saurastre HDFC Bank Ltd. M/S. Maharshi & Co. Charted Accountants JAMNAGAR
Auditors
atulauto@yahoo.com www.atulautolimited.com Production of Three-Wheelers 98,91,29,942 Rs. In Year 20042005 1st May, 1992 5,oo,ooo sq. ft. 8:45 a.m. to 5:30 p.m. Lt. Mr. Jagjivanbhai Chandra ATUL SHAKTI
Year of Establishment Area Occupied Working Hours Founder of the Company Brand Name
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With such a higher growth rate of Indian automobile industry, presently India is becoming the larger three-wheeler market in the worlds, second largest two-wheeler in the world, fourth largest passer vehicle market in Asia, Fourth largest tractor market in the world, fifth largest commercial market in the world. Today, with a market capitalization of Rs. 15,665crores, the automobile industry stocks constitutes about 5,73 percent of the total market capital of the Bombay Stock Exchange (BSE) Sensitive Index (Sensed) and about 2.5 percent of the total market capital of the BSE. since 1991 opened me the Indian automobile market. The consumer is offered a letter range of choice to choose from as a result of the increased competitive environment in which the industry is operative. The entry of the major global players brought in to the country well-established manufacturing techniques and improved quality. This foreign competition and influx of manufacturing technology and techniques have helped the domestic auto industry players as they none not only successfully develop, manufacture and market vehicles in India but also are making roads into the global markets through exports. For e.g. TELCO exports its cars to Europe and also middle-east in the passenger car segment while Bajaj is also seeing increase in its exports of two- wheelers to the Middle East and the European countries.
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In the FY 2005-2006 the total sales (Domestic Exports) of all the categories of automobiles were 97,16,718 units which was 13.95% more than the sales of last year 2004-05 which was 85,27,173 units The sales of passenger cars &UVS(utility vehicles) grew at 7.40% rate in the year 2005-06. In the 2004-05 the sales of passengers cars & UVS was 12,27,974 which was increased unto 13,18,809 in the year 2005-06.
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In the year 2004-05 the sales of commercial vehicles was 3,48,370 units which was grew at 12.31% in the FY 2005-06 & increased unto 3,91,264 units. The sales of total two-wheelers in the FY 2005-06 was 75,69,573 units which is 15.11% more than the sales of 2004-05 which was 65,76,172 units. According to official data the value of domestic sales of automobile & export together was more than1,10,000 crore in the year 2004-05 and it was more than 1,30,000 crore in the year 2005-06. For readers convenience the shares allotted to various companies in 1998 and 2000 also shown in pie chart in next page (share of world market).
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TO DEVOTE OURSELVES FOR THE BETTERMENT AND COMFORT OF THE COMMON MAN THROUGH ADVANCED TECHNOLOGIES, PRODUCTS & SERVICES IN THE AUTOMOTIVE FIELD
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BOARD OF DIRECTORS
Sr. No.
1
Name
Mr. J.J. Chandra
Designation
Chairman& M.D.
2 3 4 5 6
Mr. M.J. Patel Mr. B.J. Chandra Mr. R.S. Kukreja Mr. R.H. Dhruva Mr.S.T. Kaneria
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6. Atul Tele Services {Mobile and Tele Communication Services} 7. Atul Rachna Pvt. Ltd {Real Estate Developers & Builders} 8. Khushbu Auto Finance Ltd. { uto Finance Company} 9. Khushbu Auto Pvt. Ltd. {Centralized Marketing Organization} 10. New Chandra Motor Cycle House {Distributors of LML Vespa Scooter, Royal Enfield Motor Cycles, etc}
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A PROJECT REPORT ON ATUL AUTO LTD. market potential was so accurate that Atul Group is doubling the production and turnover constantly for last three years. Today, the combined turnover of Atul Group is approximately Rs. 1.5 Billion (US $ 30 Million). Atul Group has ambitious programmers for the future. In addition to increase the production capacity, Atul Group is engaged to keep a pace with changing environment. The group is planning to introduce in near future:1. Micro Commercial Vehicle to carry 750 Kg. Payload. 2. Petrol 3-Wheelers. 3. CNG operated vehicles. 4. Vehicles running on LPG. 5. Range of Electric Commercial Vehicles. 6. 4 Wheeled One Tonner LCV. 7. Multi Purpose Universal Rural Transport Vehicle (RTVL). The management with vision and foresight through active support of dedicate and committed professional executives, will certainly take Atul Group of the new heights in the business scenario of the India Automotive Industries.
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FUTURE PLANS
Three Wheelers
With ever increasing population in India (Presently over One Billion) cargo and passenger vehicles have an extensive market both in Urban and Rural Areas. There is shortage of public transport facilities and in spite of having major investment; the public transport cannot cope up with the transportation needs of urban, semi urban and even small township areas. Like nay other country the motor car taxies are expensive and beyond the reach of the common man. It is also not possible and economically feasible for every family or individual to own personal transport vehicle. On this background a three-wheeled vehicle which is popularly know in our country as Auto Rickshaw came to India during early 1960s. Initially there were two manufacturers. M/s. Bajaj Auto Limited who had a license of Piaggio and M/s. Automobile Products of India Limited (API) who were the licensee of Inocenti, both from Italy. These vehicles were extremely popular and used to command a premium as supply was always shorter than the demand. Subsequently, M/s. Automobile Products of India Limited due to management and financial problems closed down the operation. This left only Ms. Bajaj Auto Limited as sole manufacturers of the Auto Rickshaws. M/s. Bajaj Auto, manufacture around 1,50,000 petrol vehicles per year. In the recent past other manufacturers, like Scooters India Limited, Kerala Automobiles, Piaggio-Greaves Limited, Atul Auto Limited, etc. have started manufacturing Auto Rickshaws. In India diesel price is almost 60% that of petrol prices and therefore theses manufacturers considered to produce diesel vehicles. Another strong reason for diesel vehicles is the availability of Lombardini Diesel Engines in India through Greaves Limited. The total production of diesel vehicles by all manufacturers put together is around 75,000 vehicles per annum. Hence the total supply of vehicles in the Indian market is around 2,25,000 vehicles per annum.
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A PROJECT REPORT ON ATUL AUTO LTD. The present day demand is almost 3,00,000 vehicles per annum. Atul Auto are in process of expanding their activities. Still there is big gap between demand and supply. Therefore our next expansion would be to reach the manufacturing capacity of 30,000 vehicles per annum.
LPG/CNG Vehicles
India has already crossed the on billion mark for the population. Obviously, anything concerning basic needs of the people is viewed with national interest and greater depth. One of the most touchy subject is the pollution. It is a well accepted universal fact that major source of pollution is exhaust emission of the vehicles. Govt. of India has imposed stringent emission norms that all vehicles should meet eventually Euro-II standards. Small or big all vehicle manufacturers are struggling hard to meet these norms. Expensive R & D projects have been undertaken by the engine manufacturers to meet the Emission requirements. In the process it is identified that engines or vehicles using gas can pass through the emission norms without much of a difficulty. Hence Govt. Of India is encouraging for use of gaseous fuels on the vehicles. Govt. of India imposed use of CNG on Commercial vehicles in Indian Capital Delhi. The pollution levels, over a period have drastically reduced in Delhi. The extensive use of motorized 2-wheelers, Ever-increasing population of Motor Cars and heavy polluting public Transport Vehicles have raised the pollution levels in majority of Indian cities at an alarming level. With the encouragement from Delhi experience, Govt. of India has decided to impose use of CNG/LPG on commercial vehicles, in all the Indian cities. Distribution of Compressed Natural Gas (CNG) is controlled by govt. agencies. Whereas Liquefied Petroleum Gas (LPG) is fully liberalized by private sector. CNG is expected to be available in the cities having access through pipelines. All other places LPG is expected to be used. Many private sector companies have already commenced operation of import & distribution of LPG and therefore LPG dispensing stations will be a reality in immediate future. We at Atul Auto are there fore seriously working to develop and manufacturer CNG & LPG operated vehicles.
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with the help of other Atul Group Companies is poised to establish a strong business house wherein Atul Auto Limiteds manufacturing capacity and automobile experience reinforced and supported by other group companies financial and management strength, together with nation wide trading and servicing network would be a formidable force to venture for the products like Micro Commercial Vehicle to carry 750 kg. Payload. Petrol 3- Wheelers. CNG operated vehicles. Vehicles running on LPG. Range of Electric Commercial Vehicles. 4-Wheeled One Tonner LCV. Multi Purpose Universal Rural Transport Vehicle (RTVL).
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PRODUCTION DEPARTMENT
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INTRODUCTION
Production is fabrication of physical object through use of men, material and equipment. Production means creation of utilities and entails the procurement and utilization of factors of production, which includes manpower material guiding and equipment. Production must be operated in an economic and efficient manner because cost of production is vital factor in facing market competition and in ensuring normal profit or return on investment. Among all the functional areas of managements production is considered in any industrial organization as unique. production is the process by which, raw materials and other inputs are converted in to finish product. Nature of production can be better understood if we view the manufacturing function from the different angle as 1) Production as a system 2) Production as an organization function 3) Decision making in production.
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Atul Auto Ltd's production planning & control department takes such decision. And for such decisions PPC department co-ordinates with marketing department because marketing department inters how much quantity require. Inventory control in purchase order, schedule, follow up, in-house manufacturing, planning. All these are function of PPC department.
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PRODUCTION PROCESS
ATUL AUTO LTD. Has separate manufacturing department. The company producing generally diesel vehicles. So its demand very lengthy and accurate process and it is also time consuming process. Manufacturing process. Following are the main parts which are combined in the manufacturing. 1) Body and front show 2) Chassis 3) Internal Parts and Accessories The production process of three wheeler in Atual Auto Ltd can be summarized as follows. PURCHASE OF RAW MATERIAL: The main raw material, which is used by the company, is iron. Company purchases different varieties of iron like, iron angles, iron sheets, iron pipes, etc. This raw material imports from Shaper, Rajkot and Ahmedabad by the company. The raw material is stored in storeroom. CUTTING OF RAW MATERIAL: After receiving raw material, the process of cutting as per requirement is done by the workers. Iron angles sheets and pipes are cut as per need in cutting department CHASSIS SECTION Where the chassis is manufactured according to size, shape and standards. Main row material for chassis is iron and steel. SHAPING: The raw materials, which were out, are given shape on shaping machine. Iron pipes angles and sheets are given shapes as per its place in vehicles. FLEXING OF COMPONENTS: The Raw materials, which were out, are given shape on shaping machine. Iron pipes angles and sheets are given shapes as per its place in vehicle.
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A PROJECT REPORT ON ATUL AUTO LTD. Different components, which were fixed by joining different parts of irons are assemble in assembling department and after completion of this process, half of the process is finished here. FABRICATION & BODYBUILDING SHOP Where the body of three wheelers is built over here from mild steel through mounting, cutting, pressing and welding processes. BODING: In this part of the production process the vehicles is given heat, so that color word not depart from iron. Painting is done in similar way after a component is done in electric over at suitable temperature. PAINTING: After boding process the painting process is carried out. HEATING: After paintings process the vehicles is given heat, so that color word not depart from iron. Painting is done in similar way after a component is done in electric oven at suitable temperature. PRE-DELIVERY INSPECTION: The products are being checked before delivery, so that if any can be removes from vehicles. So that customers would not get dissatisfaction after purchasing companys product.
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PLANT LOCATION
Plant Location:
A good location may reduce the cost of production and distribution to a considerable extent. ATUL AUTO LTD. Includes a large relatively, permanent investment. Rajkot region was very much backward in terms of industrial activities, shapers people are also backward for economically and socially. So government decided to develop the area with the establishment of the factory. The government of India provided the electricity land by low cost, water , supply line other facility to Atul Auto Limited Company. FACTOR AFFECTING THE PLANT LOCATION: Industrial organization means the combination and coordination of capital, labor, machinery and raw materials. The main basic goal is minimize the cost of production and also required throught out business policy. ATUL AUTO LTD. Industry is determined by taking into consideration the following factors: (a) Primary factors - supply of raw material - nearness to market - transport facilities - labour supply - availability of power - supply of capital (b) Secondary Factors: Facilities Natural factors Political factors Government subsidies and facilities Historical and religious factors Goodwill Personal factors Miscellaneous factors
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PLANT LAYOUT
Plant layout means arrangement of material, machine and equipment, so that it provides the best kind of cooperation for the path of production. In result the production process will provide maximum of best quality at minimum possible cost. There are three types of plant layout (1) Process layout (2) Product layout (3) Fixed or static layout In Atul Auto Ltd. There are various sub-departments under the production department as follows. (1) Machines shop department (2) Fabrication & Body Blinding shop (3) Paint shop (4) Assembly & Testing Department
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Material which is produced in the plant its self is check as per drawings & standards in in-house quality control department. 2) Vendor Purchase quality control department
The material which is received from out side the plant is checked as per Goods Receipt Not (GRN) There are various modern machine in quality control department to me sure the quality as per standards and drawings. There are, 1. Profile Projector 2. Hardness Tester 3. Gear Rolling Tester etc..
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QUALITY ASSURANCE
Quality Assurance covers all activities from design, development, production, installation, servicing and documentation. This introduced the rules: "fit for purpose" and "do it right the first time". It includes the regulation of the quality of raw materials, assemblies, products and components; services related to production; and management, production, and inspection processes. One of the most widely used paradigms for QA management is the PDCA (Plan-Do- Check-Act) approach, also known as the Shewhart cycle.
Failure testing
A valuable process to perform on a whole consumer product is failure testing, the operation of a product until it fails, often under stresses such as increasing vibration, temperature and humidity. This exposes many unanticipated weaknesses in a product, and the data is used to drive engineering and manufacturing process improvements. Often quite simple changes can dramatically improve product service, such as changing to mould-resistant paint or adding lock-washer placement to the training for new assembly personnel.
Statistical control
Many organizations use statistical process control to bring the organization to Six Sigma levels of quality, in other words, so that the likelihood of an unexpected failure is confined to six standard deviations on the normal distribution. This probability is less than four one-millionths. Items controlled often include clerical tasks such as order-entry as well as conventional manufacturing tasks. Traditional statistical process controls in manufacturing operations usually proceed by randomly sampling and testing a fraction of the output. Variances of critical tolerances are continuously tracked, and manufacturing processes are corrected before bad parts can be produced.
Company quality
During the 1980s, the concept of company quality with the focus on management and people came to the fore. It was realized that, if all departments approached quality with an open mind, success was possible if the management led the quality improvement process.
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A PROJECT REPORT ON ATUL AUTO LTD. The company-wide quality approach places an emphasis on three aspects :1. Elements such as controls, job management, adequate processes, performance and integrity criteria and identification of records 2. Competence such as knowledge, skills, experience, qualifications 3. Soft elements, such as personnel integrity, confidence, organizational culture, motivation, team spirit and quality relationships. The quality of the outputs is at risk if any of these three aspects are deficient in any way. The approach to quality management given here is therefore not limited to the manufacturing theatre only but can be applied to any business activity:
Design work Administrative services Consulting Banking Insurance Computer software Retailing Transportation
It comprises a quality improvement process, which is generic in the sense it can be applied to any of these activities and it establishes a behavior pattern, which supports the achievement of quality. This in turn is supported by quality management practices which can include a number of business systems and which are usually specific to the activities of the business unit concerned. In manufacturing and construction activities, these business practices can be equated to the models for quality assurance defined by the International Standards contained in the ISO 9000 series and the specified Specifications for quality systems. Still, in the system of Company Quality, the work being carried out was shop floor inspection which did not control the major quality problems. This led to quality assurance or total quality control, which has come into being recently.
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A PROJECT REPORT ON ATUL AUTO LTD. The major problem which leads to a decrease in sales was that the specifications did not include the most important factor, What the customer required. The major characteristics, ignored during the search to improve manufacture and overall business performance were:
As the most important factor had been ignored, a few refinements had to be introduced: 1. Marketing had to carry out their work properly and define the customers specifications. 2. Specifications had to be defined to conform to these requirements. 3. Conformance to specifications i.e. drawings, standards and other relevant documents, were introduced during manufacturing, planning and control. 4. Management had to confirm all operators are equal to the work imposed on them and holidays, celebrations and disputes did not affect any of the quality levels. 5. Inspections and tests were carried out, and all components and materials, bought in or otherwise, conformed to the specifications, and the measuring equipment was accurate, this is the responsibility of the QA/QC department. 6. Any complaints received from the customers were satisfactorily dealt with in a timely manner. 7. Feedback from the user/customer is used to review designs. 8. Consistent data recording and assessment and documentation integrity. 9. Product and/or process change management and notification. If the original specification does not reflect the correct quality requirements, quality cannot be inspected or manufactured into the product. For instance, all parameters for a pressure vessel should include not only the material and dimensions but operating, environmental, safety, reliability and maintainability requirements. To conclude, the above forms the basis from which the philosophy of Quality Assurance has evolved, and the achievement of quality or the fitness-for-purpose is Quality Awareness throughout the company. ATUL AUTO LTD. Is doing a quality assurance by these some steps like quality specification, quality standards inspection and testing, periodical evolution.
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STORES DEPARTMENT
In Atual Auto Ltd. There is separate stores department, in which different inventories, tools, spears, parts, equipments are being maintained. There are four sub stores department. 1. General Stores In which all the finished parts are kept at minimum level of items required regularly. 2. Receive Stores Where all the materials are being kept which is coming from out side. 3. Fabrication stores Where the materials and other items related to fabrication department is kept over here. 4. Machine Shop Stores Where the items repeated to machine shop is being kept. The all sub-stores department are interlinked with each other with computerized system and the whole stores department is connected with other department like purchase, quality control, finance etc..
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MARKETING DEPARTMENT
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INTRODUCTION
Marketing management is a business discipline focused on the practical application of marketing techniques and the management of a firm's marketing resources and activities. Marketing managers are often responsible for influencing the level, timing, and composition of customer demand in a manner that will achieve the company's Definition and scope There is no universally accepted definition of the term. In part, this is due to the fact that the role of a marketing manager can vary significantly based on a business' size, corporate culture, and industry context. For example, in a large consumer products company, the marketing manager may act as the overall general manager of his or her assigned product category or brand with full profit & loss responsibility. In contrast, a small law firm may have no marketing personnel at all, requiring the firm's partners to make marketing management decisions on a largely ad-hoc basis. In the widely used text Marketing Management (2006), Philip Kotler and Kevin Lane Keller define marketing management as "the art and science of choosing target markets and getting, keeping and growing customers through creating, delivering, and communicating superior customer value." [1] From this perspective, the scope of marketing management is quite broad. The implication of such a definition is that any activity or resource the firm uses to acquire customers and manage the company's relationships with them is within the purview of marketing management. Additionally, the Kotler and Keller definition encompasses both the development of new products and services and their delivery to customers. Noted marketing expert Regis McKenna expressed a similar viewpoint in his influential 1991 Harvard Business Review article "Marketing is Everything." McKenna argued that because marketing management encompasses all factors that influence a company's ability to deliver value to customers, it must be "all-pervasive, part of everyone's job description, from the receptionists to the Board of Directors." [2] This view is also consistent with the perspective of management guru Peter Drucker, who wrote: "Because the purpose of business is to create a customer, the business enterprise has two--and only these two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business."[3] But because many businesses operate with a much more limited definition of marketing, such statements can appear controversial, or even ludicrous to some business executives. This is especially true in those companies where the marketing department is responsible for little more than developing sales brochures and executing advertising campaigns.
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A PROJECT REPORT ON ATUL AUTO LTD. The broader, more sophisticated definitions of marketing management from Drucker, Kotler and other scholars are therefore juxtaposed against the narrower operating reality of many businesses. The source of confusion here is often that inside any given firm, the term marketing management may be interpreted to mean whatever the marketing department happens to do, rather than a term that encompasses all marketing activities -even those marketing activities that are actually performed by other departments, such as the sales, finance, or operations departments.[4] If, for example, the finance department of a given company makes pricing decisions (for deals, proposals, contracts, etc.), that finance department has responsibility for an important component of marketing management -- pricing.
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A PROJECT REPORT ON ATUL AUTO LTD. conduct periodic brand audits to assess the strength of its brands and sources of brand equity.[6] The firm's collaborators may also be profiled, which may include various suppliers, distributors and other channel partners, joint venture partners, and others. An analysis of complementary products may also be performed if such products exist. Marketing management employs various tools from economics and competitive strategy to analyze the industry context in which the firm operates. These include Porter's five forces, analysis of strategic groups of competitors, value chain analysis and others.[7] Depending on the industry, the regulatory context may also be important to examine in detail. In Competitor analysis, marketers build detailed profiles of each competitor in the market, focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. Marketing managers will examine each competitor's cost structure, sources of profits, resources and competencies, competitive positioning and product differentiation, degree of vertical integration, historical responses to industry developments, and other factors. Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. As such, they often conduct market research (alternately marketing research) to obtain this information. Marketers employ a variety of techniques to conduct market research, but some of the more common include:
Qualitative marketing research, such as focus groups Quantitative marketing research, such as statistical surveys Experimental techniques such as test markets Observational techniques such as ethnographic (on-site) observation
Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company's marketing analysis.
Marketing strategy
Main article: Marketing strategy Once the company has obtained an adequate understanding of the customer base and its own competitive position in the industry, marketing managers are able to make key strategic decisions and develop a marketing strategy designed to maximize the revenues and profits of the firm. The selected strategy may aim for any of a variety of specific objectives, including optimizing short-term unit margins, revenue growth, market share, long-term profitability, or other goals. To achieve the desired objectives, marketers typically identify one or more target customer segments which they intend to pursue. Customer segments are often selected as
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A PROJECT REPORT ON ATUL AUTO LTD. targets because they score highly on two dimensions: 1) The segment is attractive to serve because it is large, growing, makes frequent purchases, is not price sensitive (i.e. is willing to pay high prices), or other factors; and 2) The company has the resources and capabilities to compete for the segment's business, can meet their needs better than the competition, and can do so profitably.[5] In fact, a commonly cited definition of marketing is simply "meeting needs profitably." [1] The implication of selecting target segments is that the business will subsequently allocate more resources to acquire and retain customers in the target segment(s) than it will for other, non-targeted customers. In some cases, the firm may go so far as to turn away customers that are not in its target segment. The doorman at a swanky nightclub, for example, may deny entry to unfashionably dressed individuals because the business has made a strategic decision to target the "high fashion" segment of nightclub patrons. In conjunction with targeting decisions, marketing managers will identify the desired positioning they want the company, product, or brand to occupy in the target customer's mind. This positioning is often an encapsulation of a key benefit the company's product or service offers that is differentiated and superior to the benefits offered by competitive products.[8] For example, Volvo has traditionally positioned its products in the automobile market in North America in order to be perceived as the leader in "safety", whereas BMW has traditionally positioned its brand to be perceived as the leader in "performance." Ideally, a firm's positioning can be maintained over a long period of time because the company possesses, or can develop, some form of sustainable competitive advantage.[9] The positioning should also be sufficiently relevant to the target segment such that it will drive the purchasing behavior of target customers.[8]
Implementation planning
After the firm's strategic objectives have been identified, the target market selected, and the desired positioning for the company, product or brand has been determined, marketing managers focus on how to best implement the chosen strategy. Traditionally, this has involved implementation planning across the "4Ps" of marketing: Product management, Pricing, Place (i.e. sales and distribution channels), and Promotion. Taken together, the company's implementation choices across the 4Ps are often described as the marketing mix, meaning the mix of elements the business will employ to "go to market" and execute the marketing strategy. The overall goal for the marketing mix is to consistently deliver a compelling value proposition that reinforces the firm's chosen positioning, builds customer loyalty and brand equity among target customers, and achieves the firm's marketing and financial objectives.
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A PROJECT REPORT ON ATUL AUTO LTD. In many cases, marketing management will develop a marketing plan to specify how the company will execute the chosen strategy and achieve the business' objectives. The content of marketing plans varies from firm to firm, but commonly includes:
An executive summary Situation analysis to summarize facts and insights gained from market research and marketing analysis The company's mission statement or long-term strategic vision A statement of the company's key objectives, often subdivided into marketing objectives and financial objectives The marketing strategy the business has chosen, specifying the target segments to be pursued and the competitive positioning to be achieved Implementation choices for each element of the marketing mix (the 4Ps) A summary of required investments (in people, programs, IT systems, etc.) Financial analysis, projections and forecasted results A timeline or high-level project plan Metrics, measurements and control processes A list of key risks and strategies for managing these risks
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A PROJECT REPORT ON ATUL AUTO LTD. interaction with the human resources department on issues such as recruiting, training, leadership development, performance appraisals, compensation, and other topics. Marketing management may spend a fair amount of time building or maintaining a marketing orientation for the business. Achieving a market orientation, also known as "customer focus" or the "marketing concept", requires building consensus at the senior management level and then driving customer focus down into the organization. Cultural barriers may exist in a given business unit or functional area that the marketing manager must address in order to achieve this goal. Additionally, marketing executives often act as a "brand champion" and work to enforce corporate identity standards across the enterprise. In larger organizations, especially those with multiple business units, top marketing managers may need to coordinate across several marketing departments and also resources from finance, R&D, engineering, operations, manufacturing, or other functional areas to implement the marketing plan. In order to effectively manage these resources, marketing executives may need to spend much of their time focused on political issues and inter-departmental negotiations. The effectiveness of a marketing manager may therefore depend on his or her ability to make the internal "sale" of various marketing programs equally as much as the external customer's reaction to such programs.[1]
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A PROJECT REPORT ON ATUL AUTO LTD. marketing communications (IMC), is a CRM database-driven approach that attempts to estimate the value of marketing mix executions based on the changes in customer behavior these executions generate.[10]
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PRODUCT
Product is anything that is capable of satisfying human need directly or indirectly. Product is what a seller has to sell and what a buyer has to buy. "A product is anything that can be offered to a market for attention, acquisition, use or consumption, that might satisfy a want or needy it includes physical , products, services, persons, places, organizations and ideas." Some prefer to use the word 'production' in place of product. In any case, a product is a bundle of utilities which enables the consumers to satisfy their needs. Its rightly said by someone that ,'it is utility, not product, which is sold and bought'
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CHARACTERISTICS OF PRODUCT
COMMODITY OR SERVICES A product is either material or immaterial, in other words, goods and services both are included in the definition of product. PROCESS Production is a process which is divided into various stages. The input has to pass from a number of stages before it turns into output. ADDITION OF VALUE When a raw-material is transformed into a final product, it becomes consumables. And enhance it commands a greater value than the raw-material. The factors of production like land, labour, capital and entrepreneurship can be easily rewarded for their services out of this positive difference of value. A product is a result of the transformation activity. Utility is created by changing the form of an article and it satisfies human needs. Thus, creation of utility is an important feature of a product. USE OF FACTORS OF PRODUCTION By the factors of production we mean inputs or resources which are used in making a final product. In economics, these factors are divided into four groups: (i) Land (ii) Labour (iii) Capital (iv) Entrepreneurship It is the entrepreneur who brings land, labour and capital under the same roof, combines them and produces a commodity.
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PRODUCT MIX
Product mix refers to the collection products produced and sold by a firm. Product-mix includes those products which satisfy the needs of different classes of buyers. And are complementary to each other, and not competitive. All individual items of passenger and loading auto rickshaws represent the product mix of ATUL AUTO LTD. PRODUCT MIX WITH WIDTH, DEPTH, LENGTH AND CONSISTENCY [A] PRODUCT WIDTH: The number of product lines offered by a firm is known as product-mix width. The width of ATUL AUTO LTD. Are two products. auto rickshaw of passenger. Auto rickshaw of loading [B] PRODUCT DEPTH: The average number of product items offered by a firm within a particular product line is known as depth. The depth of passenger auto rickshaw are: passenger deluxe atul shakti super deluxe. 4 passenger and one driver. 3 passenger and one driver. The depth of loading auto rickshaw are : delivery van pick-up van drive away chassis pick-up standard. Pick-up soft-drink carriers. Special purpose delivery van [c] PRODUCT LENGTH: A total products in the depth of the company is known as length The length of ATUL AUTO LTD. Is 10 in which there are 4 type of passenger auto rickshaw and 6 types of loading auto rickshaw. [D] PRODUCT CONSISTENCY: It says that how closely related the various product lines are in one way or another. At ATUL AUTO LTD. There is consistency in two product lines. JATIN TRIVEDI (MBA marketing), SAURASHTRA UNIVERSITY, RAJKOT. 49
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BRANDING
INTRODUCTION:
The branding strategy for a company reflects the number and nature of common and distinctive brand elements applied to the different product sold by the company. The company related with news paper and its brand name is business standard. In brands its have different components like logos. Brand names, symbols, package designs. BENEFITS OF BRAND: (1) Brand may expand average. (2) Brand provide protection (3) Brand extend an image. (4) Brand can minimize overlap and thus optimize the portfolio ATUL AUTO PRIVATE LIMITED chosen the brand name which is recognized in govt. office. The brand name of the company is known as international Brand. The symbol of companys trademarks brand is given below. Thus the trademark is essential legal terms protecting the manufacturers rights to use the brand name.
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METHODS OF PRICING
Price is the reward, revenue or income of the company which is paid by the customer on buying the product. It is the exchange value in terms of money to set a price of the product every company must follow certain steps. Such steps are: (1) (2) (3) (4) (5) setting price objectives. Determining demand Estimating cost Analyzing competitors cost, price and offers. Setting a price method.
The method being selected by ATUL AUTO PRIVATE LIMITED is cost + profit (%) which is most beneficial and useful for automobile industry. Some times they are also fixing the prices according to demand and supply of the product itself. In ATUL AUTO PRIVATE LIMITED pricing is set as follows: Basic price (Total raw-material used) Cost of production Excise duty Sales tax Local govt. tax Transportation and insurance Dealers commission Operating cost Profit
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PROMOTION MIX
INTRODUCTION: Essential purpose of promotion is to change the location and shape of demand of companys product through the use of promotion a company hopes to increase a products sales volume at any given price promotion is an excurses in information persuasion and influence. Determination of most effective promotion mix is one of the difficult task in marketing management. Several different promotional tools or combinations there of may be used. Following one some factor which influence management decision making with respect to promotion mix (1) (2) (3) (4) the amount of money available for promotion The nature of market The nature of product The stage of the product life cycle.
There are different means of promotion mix like advertisement sales promotions publicity and personal selling ADVERTISEMENTS: Advertisement consist of all the activities involved in p resenting to a group non personal oral or visual openly sponsored message reading a product service or idea this message caller advertisement. It helps to increase the sell of product and indirectly increase the product advertisement is generally for three purposes: (1) To inform (2) To remember (3) To encourage There are different types of media available in the market such as print media, audio visual media, exhibition etc. ATUL AUTO PRIVATE LIMITED prefers to give advertisement in news paper at regular interval of time and also distributing some pamphlets and brawlier at different centers.
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SALES PROMOTION
For increase the sales, some sales promotional activities are essential. It is a process of creating demand for the commodity. But it is totally different from advertising and publicity. Company gets the benefits of awareness of consumers towards the product. As mentioned above sales promotion is totally differed from advertising and publicity. There are such popular ways of sales promotions such as (1) Buy 3 get 1 free (2) Discount (3) Free trail (4) Exchange offer (5) Free gifts (6) Replacement etc. As far as ATUL AUTO PRIVATE LIMITED is concern they provide quantity as well as cash discount to their distributors as a part of sales promotion.
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CHANNEL MANAGEMENT
DEFINATION: It refers to flow or movement of goods from producer to ultimate consumer of the products. OBJECTIVES : (1) achievement of best possible coverage of target market. (2) Assuming that consumer incur in mini, execration producing the product. Ensuring the distribution is most effective. Once the product is ready for market the next step in a marketing process is to determine what methods and route will be used to bring the product to the market. This involves establishing distribution strategies including selecting channel of distribution and providing for a physical handling and distribution There are different type of channellike are in existence. (1) zero level channels (2) One level channel (3) Two level channel (4) Multi level channel ATUL AUTO PRIVATE LIMITED has very easy and simple distribution channel. There is only one middleman between company and consumer i.e. dealer the company sands product to dealer and there by the consumer directly contact with dealer the dealer performs the act of seller. MANUFACTURER DEALER (SHOWROOMS) CONSUMER.
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INTRODUTION
As one author has rightly said 1+1 makes an organization, i.e. where there are two or more persons there is in effect an organization. Some individuals prefer to work independently in isolation. But the vast majority of all work in todays environment takes place within the context of a structured organization a grouping of individuals in to a unified and common effort. An organization may be a manufacturing firm, a business concern, an insurance company, a government agency, social organization, a university, a religious trust and even a family. It may be small or large, simple or complex. An organization is a human grouping in which work is done for the accomplishment of some specific goals, or missions, For Example, the goal of a manufacturing concern might be to produce and supply the goods and services to satisfy the demand of the market. Organizational objectives are most likely to be modified over a period of time, as per the changing need and circumstances. Organizational objectives are most likely to be multiple, as the organizational tries to achieve several goals and to serve a number of different categories of people. In order to achieve the goals, a well-run organization works out a set of rules sometimes called policies, programmes , rules, regulations, procedures or guidelines and sanctions. These are designed not to restrict creativity but to assist its members in accomplishment of the organizational goals. Atul Auto Limited has given more and more importance to personnel department as a result the personnel department of the company is efficient one. All the employees are satisfied with the company. Company is having total staff of 462 people. We can categorize them into different level and that are: 1. Managers 28 2. Staff members 130 3. Workers 304 {i} skilled {ii} semi-skilled {iii} unskilled 90 100 114
working hours 9:00 am to 1:00 pm 1:00 pm to 1:30 pm break 1:30 pm to 5:30 pm Thursday is off-day for production and personnel department While Sunday is off for Marketing and finance Department
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A PROJECT REPORT ON ATUL AUTO LTD. During my industrial training period at Atul Auto Limited, I found that there is a limited staff and each person working in this unit is quite satisfied with their work and with the company.
EMPLOYEE WELFARE AND BENEFITS: Every worker is heart of the company. The production work is based on efficient and effective work force. Without good co-operation of workers no organization can run successfully and can not able to make its progress continuously. Each and every company tries to satisfy their worker by giving them different incentives. As far as Atul Auto Limited is concern, Company provides following facilities to their employees. 1. Accommodation facility The company provides free accommodation facility to their employees only and not to their family member. Accommodation is facility is given in factory premises itself, this facility is generally for those worker who are not able to afford the rent in the city or who comes from other place or state. And of course all care is taking that the worker gets all the basic facilities such as electricity and water. 2. Canteen Facility: The other facilityprovided to the employee is of canteen. There is huge canteen which provides Tes, coffee, Cold Drinks and of course food. Company is proving lunch without charging any cost. It provides food free of cost to their employee. 3. Transportation Facility: The company provides transport facility to their employee, which pick up the mployee from their home to the company and from company to their home. This facility is for all the employee of the company. As mostly all employee leave at Rajkot city, which is away from the factory. 4. Uniform facility: At the company all employee are provided with the uniform facility. There are different uniform for different people. All the workers are provided a shirt of navy blue and dark blue trouser and the staff member are allotted gray shirt and black trouser. 5. increments:
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A PROJECT REPORT ON ATUL AUTO LTD. The other facility or benefit give to the employee at the Atul Auto Limited is the increment in the salary. On every 1st of april the company makes some increment in the salary of the employee according to their performance and on which level the employee is.
6. Bonus: The company also gives bonus to their employee every year. The rate of bonus is 20 percent. This bonus is distributed from the overall result of the company. 7. Insurance facility: The company is providing three types of the insurance to their employee and worker. The company had taken three types of insurance i.e., from life insurance corporation of India. The other one is related PF department and the third one is general insurance. In first two the life of the employee is no more than we will receive Rs. 62000 no matter of where he died. The third one is general insurance in which if a suffers any permanent disability then he will receive the money. 8. leave facility: The other good facility which company provides is of leave. The entire staff and worker related to production department get leave on Thursday and people related with marketing and finance receives leave on Sunday. Apart from the above leave, company provides 40 leave per year to the staff members and 25 leave per year to the workers. 9. Provident Fund: There is also the scheme of Provident Fund that is given to all the staff and workers of the company. The rate of the contribution is of 12%. That means the company will deduct 12percent of the salary from their employee and will deposit it with the provident fund department. Also the company will contribute 12 percent from its own side. The fund will be paid to the belonging whenever he leaves the company or when he gets retired. 10. pension scheme:
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A PROJECT REPORT ON ATUL AUTO LTD. Even company is running pension scheme for their all employee. It means the employee when gets retired will receive some amount every month as pension. Again this scheme is related with Provident fund Department. 11. Gratuity: The other facility provided by the Atul Auto Limited is of gratuity. Gratuity means a person who retires from the job will get a huge amount at one time.Thecompany gives the contribution for this gratuity and not a single rupee is taken from the employee as premium.
A PROJECT REPORT ON ATUL AUTO LTD. External source are those which are not from the internal sources, it includes, new entrants to the labour force, i.e. Young, mostly in experience potential employee the college students; The unemployment with wide range of kills and abilities; retired experienced persons such as mechanics, machinists, welders, accountants; other not in labour force, such as married women and persons from minority groups. The above were the sources of recruitment, which is adopted by the Atul Auto Limited. Now let us check out the method of the recruitment. There are three recruitment methods classified by the dunn and stephens, and they are direct method, indirect method and the third party methods. Atul Auto Limited has adopted the first two method recruitment i.e. direct method and the indirect method. Let us check both the method one by one. Direct method: These include sending, traveling recruiters to educational and professional institutions, employees contact with public and manned exhibits. One of the widely used direct methods is that of sending of recruiters to colleges and technical schools. Atul auto limited selects the technical person from ITI rajkot. And other persons such as engineer, supervisor from the pending applications. Indirect method: Indirect method involve mostly advertising in newspaper, on the radio, in trade and professional journals, technical magazines and brochures/advertising in newspapers and /or trade journals and magazines is the most frequently used method. When qualified or experienced personnel are not available from other sources. Senior posts are largely filled by such methods when they cant be filled by promotion from within. At Atul auto limited the vacancies for managers and officers are filled by the advertisement. Selection: The selection procedure is concerned with securing relevant information about an applicant. This information is secured in a number of steps or stages. The objectives of selection process are to determine whether an applicant meets the qualification for a specific job and to choose the applicant who is most likely to perform well in that job. Selection is the long process. Commercing from the preliminary interview of the applicants and ending with contact of employment. The following is the procedures adopeted by the Atul Auto Limited. For the selection process: 1. application bank After the advertisement the candidate are provided with the application blanks. In which they have to fill their information. The application ahs to mention name, address, qualification, work experience, signature and etc. This is also known as fact finder, which helps one in learning about an applicants background and life history.
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2. interview: after collecting applications from applicants analysis is being started by the company. Candidate who are found to be suitable and reasonable for the job are called for the interview. A well-conducted interview is taken to explore the facts and get at the attitude of the applicant and his family to the job. Also many other questions are selected for the further procedure. 3. physical Examination After the interview procedure the next step is to make the entire candidate pass through the physical examination. This is a person have to deal with the machines and of course sometimes have to also go through certain atmosphere, so it is necessary that a candidate should be physically strong. 4. psychological testing: After physical examination of candidate, if the candidate is found to be having physically strong enough then company moves to the next step of psychological test of candidate where the company estimates the efficiency of the candidate is tested to know that he would be able to work in different type of conditions or not. 5. reference check The other important matter in selection of candidate is about the different reference given by them. Company use to check out whether the candidate is a good person and have no criminal or bad recorded in past. The reference which company asks should not from the relatives of the candidate but other than it. 6. final selection: After passing through all the barriers the company selects the right candidate for the job. The candidate is informed by any means of communication. 7. Introduction into the company: The candidate when comes to the company for joining he is introduced regarding company is share to him. Even in initial period a buddy is provided assist him to make him know all the departments of the company very well.
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PROMOTION POLICY
Promotion means upward advancement of an employee in an organization to another job, which commands pay, better status and higher opportunity, responsibility and authority, better working environment and a higher rank. There are many purposes to promote employees such as increase an employees organizational effectiveness and to attract suitable workers for the work. At Atul Auto Limited promotion is not based on seniority but is based on the performance of the staff member as well as of workers. Filling up the form of performance appraisal does the promotion for the manager level and officer. The promotions are decided by the two of directors of the company and one HR consultants from outside of the company, Atul Auto Limited have prepared one form in which all the details such as communication skill, team work and leadership ability, ability to coordinate work, creativity and performance under stress and etc. are printed and are filled up the directors and the HR consultant by their continuous observations. And according promotions are given to the manager and officer level staff. For the promotions of worker there is a different approach of the company. Here a committee has been formed of different departments head for the purpose of promotion. All the department heads of the company observes the work of the worker, his performance and etc. on individual basis and there after promotions are decided and declared. The promotion, which are covered by the Atul Auto Limited in the personnel department, are Transfer Policy, performance appraisal system, wages and salary, grievance handling procedure.
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A PROJECT REPORT ON ATUL AUTO LTD. CL can be availed maximum for 3 days at a time with prier approval from department head. More than 3 days leave will be considered as EL. 4. GROUP INSURANCE SCHEME OF L.I.C: There is also provision act under the provident fund for group insurance Employees deposit linked insurance scheme EDLI. Under this scheme a sum up to Rs. 62000/- is paid as an insurance sum to the family of deceased member depending upon his balance amount in the P.F. 5. SOCIAL SECURITY SCHEME: There is also a provision of Insurance under the group gratuity scheme of L.I.C. under this scheme in case of death of an employee, his family (legal nominee gets a sum for the remaining years of service, as if he/she would have put in full service & (up to 58 years of age) alive up to the age of his retirement). The company has opted in the interest of its employees. The company pays premium under this scheme, every year. 6. BONUS: The Company is paying 20% actual bonus every year to all its employees at present. 7. FOOD: The Company provides lunch free of cost to all its employees at the plant. 8. TEA: The Company is providing tea to all its employees free of cost twice in a day. 9. STAFF BUS: The Company has been providing staff bus facilities between Rajkot Shapar factory free of cost to all its employees. 10. BACHELOR ACCOMMODATION: Company is providing bachelor accommodation to the employees who are coming from far and remote place/cities, free of cost. At present about 100 employees have been staying in the Companys rooms. 11. UNIFORM: To have an identical dress & impression of the company the Company is providing 2 sets of uniform every year to all its employees.
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FINANCE DEPARTMENT
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INTRODUCTION
Financial management is that managerial activity which is concerned with the planning and controlling of the firms financial resources. Through out it was branch of economics till 1890. As a separate knowledge of its own and draws heavily on economics for its theoretical concepts even today. Finance is the lifeblood of the organization, this sentence shows the importance of the finance department and its working. Here we discuss the various policy of finance department of Atul Auto Limited and some financial policy adopted by the company and some financial analysis of the Atul Auto Limited. Nowadays, to finance business company has to maintain the financial status at the required level and also has to show financial stability of the company and to get fianance company has to show cash-flow, important ratios, working capital management etc. In Atul Auto Limited finance department headed by single person and authority passes from top to bottom, in a nutshell it is line organization and chief financial officer hold the top position of the finance department. The chart given on next page shows the line authority.
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The given chart clearly shows the responsibility and authority centralized in the single hand i.e. chief financial officer who is responsible for the decision taken by him regard to finance and he is the last who finalize the financial matter, of course with the approval of the chairman.
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ACCOUNTING POLLICY
FINANCIAL STATEMENT: Financial statement of Atul Auto limited has been prepared under historical costing convention in accordance with GAP and also follows the guidelines of the companies act 1956. Company generally recognizes significant items of income statement on accrual basis. Fixed assets: Fixed assets are carried at cost of acquisition or erection and relevant expenses are added and then deducting depreciation from that and last value put on statement. Depreciation: Depreciation is provided on fixed asset in accordance with the rates provided in schedule xiv of the companies act 1956 on straight line basis. Research and Development expenses: All the R&D expenses including designs, patterns, prototypes and product launching expenses treated as deferred revenue expenditure and it is written-off in five equal annual installments. Valuation of inventories: (1) raw material (2) Work in progress (3) Finished goods whichever is less. In valuation of raw material the taxes, paid and transportation cost is to be included. at cost or neet realizable value whichever is less at estimated cost at cost of net realizable value determined on the major ingredients fitted therein and expenses absorbed,
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A PROJECT REPORT ON ATUL AUTO LTD. Sales: Sales are recorded on dispatch of goods from factory and at net of all taxes paid. Post dated transaction of balance sheet: Material events occurring after the date of balalnce sheet are recognized and are dealt with appropriately in accordance with GAAP.
EXCISE DUTY: Excise duty has been accounted on the basis of payment made in respect of goods cleared and on basis of goods manufactured and lying in bound warehouse through no cleared in accordance with guidance note on accounting for excise duty issued by ICAI FINANCIAL PLANNING: Planning is an essential tool of management and it is referred as most valuable and important when the planning is of finance. Finance planning means to plan the future activities in accordance with financial planner has also responsibility to manage the finance to carry out the future plans and projects, which are designed to maximize the wealth of shareholders. Atul Auto Limited has implemented its expansion plans, this include setting up machinery in order to maximize the production capabilities of three wheelers diesel automobiles, and Atul Auto also carrying project of setting plant of CNG (compressed Natural Gas) driven vehicles and LPG(liquefied petroleum Gas) driven vehicle. This project is appraised by Gujarat Venture limited and Gujarat industrial corporation Limited.
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CAPITAL STRUCTURE
Capital structure of company refers to the items in the balance sheet and it is most significant part of financial analysis, capital structure shows us the type of capital invested, its proportion to total capital and the return of each type of capital, capital invested in business is called capitalization in commercial jargon, Capital structure can be of three types. (1) more debt and less equity (2) debt and equity in proportion i.e. 50 percent debt and 50 percent equity (3) More equity and less debt. Atul Auto Limited has third type of Capital structure and this is the trend which is now a days prevailing in the industry and big giants of corporate are going for zero debt company. Zero debt because it gives them highest returns in comparison with the other company of the same industry, moreover zero debt company easily gets finance whenever required. PARTICULARS Shareholders fund Share capital Reserves and surpluses Loan funds Secured loans Un-secured Loans MARCH 2005 55844050 144149373 112784313 57813 MARCH 2004 55844050 114024310 54158315 2089702
As we above said company is having third type of capital structure i.e. more equity and less debt, the figure in the above table represent the same, as on 31st march 2005 , in Atul Auto Limited the Proportion of the equity to capital was 64%
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Ratios are used as a yardstick for evaluating the financial condition and performance of a firm. Analysis and interpretation of various accounting ratios gives a skilled and experienced analyst, a better understanding of financial condition and performance of the firm than what he could have obtain only through a perusal of financial statements.
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The ratio indicates the efficiency of the company in managing the business affairs. An increase in this ratio over the period indicates improvement in the operational efficiency of the business. This ratio is a vital measure of profitability. In the previous year companys net profit ratio is higher than the this year so that we assume that companys operational efficiency decrease in this fiscal year. So management needs to increase the profitability of the company and also overall percentage is very less.
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PROFIT AFTER TAX AND PREFERENCE DIVIDEND NO. OF EQUITY SHARES YEAR 2003-04 13111389 5351520 =2.45 2004-05 30125062 5351520 =2.63
The earning per share (EPS) helps in determining the market price of the equity share of the company and in estimating companys capacity to pay the dividend. A comparison of EPS of two companies will also help in deciding whether the company is using capital effectively or not. In the previous year companys earning per share is less than the years so that we assume that companys owner have more assets than the previous year. So equity holders have better options to purchase the new share of the company. In this year EPS is increase more than 125%
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Return on capital employed measures the profit earns by a firm on investing a unit of capital. Company can survive only when the return on capital employed is more than the cost of capital employed in business. This ratio indicates that company is earning good percentage of the profit. The earning is higher than the current market interest rate.
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CURRENT RATIO
currnet assets current liabilities Year 2003-04 16914633 37070840 =4.56 year 2004-05 202827813 55061055 =3.68
An ideal current ration is 2 is considered as a safe margin of solvency due to the fact that if the current assets are reduced to half than also the creditors will be able to get their payments in full. A very high current ratio is also not desirable since it means less efficient use of fund. High current ratio means excessive dependence on long term resources. In Atul Auto Limited this ratio is 3.68, which is very high. This will result in considerably lowering down the profitability, as long term liabilities are very costly than current liabilities.
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DEBT-EQUITY RATIO
External equities Internal Equities Year 2003-04 93318857 169868360 = 0.55 2004-05 167903180 199993423 = 0.84
This ratio indicates the proportion of owners stake in the business and the extent to which the firm depends upon outsiders. Excessive liabilities tend to cause insolvency. The ratio provides a margin of safety to the creditors. The investor may take Debt-Equity ratio as quite satisfactory if shareholders Funds are equal to borrowed funds. Here, in atul Auto Limited case, it is near to 0.8. So, the creditors of the company are very safe. Also because of there is heavy investment in fixed assets and less on assured return on investment.
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