BRS Final

A SUMMER TRAINING REPORT ON FINANCIAL PERFORMANCE REVIEW AT
RUBAMIN LIMITED
Submitted By: BHUMIT SHAH MBA- II
Guided By: MRS. KOMAL PATEL ASST. PROFESSOR
ACADEMIC YEAR 2010-2012
SUBMITTED TO:
K.N.V. INSTITUTE OF BUSINESS MANAGEMENT

RAJKOT
AFFILIATED TO: GUJARAT TECHNOLOGICAL UNIVERSITY AHMEDABAD
PREPARED BY: BHUMIT SHAH
Page 1
K.N.V INSTITUTE OF BUSINESS MANAGEMENT B/H KHIRASARA POLICE STATION KALAVAD ROAD, METODA RAJKOT
CERTIFICATE
I hereby certify that Mr/Ms BHUMIT SHAH student of MBA Sem - III has completed project work entitled at RUBAMIN LIMITED under my guidance.
As per my knowledge this is his original work based on available data and for partial fulfilment of MBA programme.
Date: -
Name: -
MRS. KOMAL PATEL (Project Guide Name)
Signature: -
Page 2
DECLARATION
I undersigned BHUMIT SHAH a student of MBA 3rd semester declare that I have prepared this project report on FINANCIAL PERFORMANCE REVIEW" at RUBAMIN LIMITED under Mr/Ms (Name of person who guided you at company) and by Mr (Name of faculty) of KNV Institute of Business Management - Rajkot
I also declare that this project report is my own preparation and not copied from anywhere else.
This is in accordance with syllabus & guidelines of GTU.
(Signature) ___________ Student's Name: BHUMIT SHAH Roll No.:2053 Date:
Page 3
ACKNOWLEDGEMENT:
Now, a days getting a practical knowledge is an important thing but more important is the support, guidance and motivation provided by the different persons of different status and section. The successful completion of any task would be incomplete without acknowledging people who helped me make it possible. I take this opportunity to express my appreciation and gratitude to all these who helped me in completing this project. I would like to heartily thankful Our Dean Mr. M. K Sharma Sir who has providing opportunity and constant encouragement to prepare this project report. I would like to thankful Mrs. Komal Patel for providing guidance to prepare this project report. I would like to thankful Mr. Rajesh Palkar Sir (Head of HR Department) for permitting me for Sumer Internship Programme. I would like to thankful Mr. Nilesh Mistry (Head of Finance Department) and Mr. Ajay Upadhaya, for helping in the field work. I would like to thankful Mr. Milind Thakkar (Head of Taxation Dept.), Mr. Sanjay Shah and Mr. Kamlesh Ajmeri for giving us the Knowledge for the Company Profile. Lastly, I would like to thankful Mr. Ruchir Patel for providing constant support and guidance for making this report successful.
BHUMIT SHAH MBA II
Page 4
INDEX
SR NO. 1 2 PARTICULARS Executive Summary Introduction (a) Overview of Industry (b) Company Details Organizational Study Marketing Department study Purchase Department Operations Department Study Human Resource Department Study Finance department Chapter Based on Topic Ratio Analysis House Property Working Capital Recommendation / Suggestion Conclusion Bibliography Certificate PAGE
5 6 7 8
Page 5
Page 6
EXECUTIVE SUMMARY:
The Summary includes concise but complete description of the market, market need how we propose to satisfy that need and the projected financial rewards. Mission statement:
The Enterprise:
The Rubamin is a closely held Private limited company the company commenced operation in 1988 with manufacture of Zinc Oxide and has over the years, diversified in cobalt and copper metals in 1988.we have been profitable in each of our first two years of operation and have established a strong relationship with numerous distributors throughout the south and India. We have established work ethic and pride in providing high quality product at very competitive price. We have been quite successful at this by concentrating on a relatively small number of components type. Financial result of the last two years is as follows:
Financial History Revenue Profit Before Tax PBT % Net Profit
2010 22197.31 85.26 0.38% 85.26
2011 27623.89 902.10 3.27% 756.35
Rubamin is one of the Leading Producers of Zinc Oxide and Cobalt compounds in the country with its product having wide application across varied user industries. The company's management is well qualified and experienced and has developed strong research and development team to continuously improve its process efficiency. Despite established track record in the business, rubamin has little control on realization due to commoditized nature of products. Rubamin Limited has a two decade old successful track record of producing metallurgical product. It has successfully serviced customers in India and across the globe over this long period of time. A key success of the organisation has been its ability to anticipate market needs and invest accordingly. At all times the quality and delivery of the company has been continuously good, earning it the loyalty of large and important customer. PREPARED BY: BHUMIT SHAH Page 7
Inter National Operation: (UAE and Democratic republic of Congo):
Rubaco SPRL, DR Congo and Rubamin SPRL are the wholly owned subsidiaries of Rubamin FZC, UAE (trading unit) which in turn is a subsidiary of Rubamin Limited. Rubaco SPRL, DR Congo, Rubamin SPRL are head quarter in Lubumbashi, which is the capital of the Katanga province.
Rubaco SPRL formed in the year 2004 is involved in Mineral exploration and Mining of Minerals.
Rubamin SPRL is the manufacturing company primarily focused on the manufacturing operation based on pyrometallurgy technique.
The group has strength of over 150 employees in DR Congo including Geologist, Mining / Mechanical / Civil Engineers, Metallurgists, Scientist, Chemicals, Surveyors, Accountants and others.
Share Holding Pattern as on 31.01.2011:

Name of the Share holder Shri Atul Dalmioa and Relatives Shri Anil R Patel and Relatives India Advantage Fund (ICICI Venture) Employees and others Associates companies TOTAL % holding 50.09% 33.42% 15.40% 0.73% 0.36% 100.00%
Page 8
Page 9
NAME OF THE COMPANY:

Rubamin Private Limited
TYPE OF THE BUSINESS:

Manufacturing/Exporter
CORPORATE OFFICE:
2nd Floor Synergy House, N/R, Genda Circle, Subhanpura, Baroda-390 023 GUJARAT (INDIA) PHONE: 91 265 22 82 078 / 079 / 080 / 081 / 082 FAX: 91 265 22 82 077 E-MAIL: info@rubamin.com BOARD OF DIRECTOR: Mr. Atul Dalmia....... Chairman Mr. Anil Patel.......... Managing Director Mr. Ajit Kapadia...... Independent Director Dr. Radhanath Prasad...Independent Director Mr. Naren Aneja....... Independent Director
Page 10
BANKERS: HDFC Bank State Bank of India Bank of Baroda Standard Charted Bank AUDITORS: Deloitte Haskins and sells, Chartered Accountant, 31, Nutan Bharat Society, Alkapuri, Vadodara 390007 MISION: We shall strive to become a global player in our chosen fields of operations and shall aim at total customer satisfaction. VISION: To be internationally Competitive in Cobalt, select non-ferrous metals & compounds. OBJECTIVE: To manufacture World class Tyre Industry. POLICY: To meet customer expectations of high quality products, in the stipulated time frame and as per their satisfaction.
Page 11
HISTORY
Rubamin is a rapidly growing organization having operations in India and D. R. Congo. Its operations include Mineral Exploration, Metal Extraction as well as Metal Compounds manufacturing. Going into the year 2008-2009, Rubamin will foray into Recycling of Spent Catalyst to produce non-ferrous metals such as Copper, Cobalt, Nickel, Molybdenum, Manganese, Vanadium and Tungsten as well as Recycling of Zinc bearing secondary material. The businesses are grouped as under: Rubamin Limited: Cobalt Metal & salts Zinc Oxide Recycling Mineral Exploration Copper Manufacturing It has 5 manufacturing sites in India and over 5000 Sq. Kms of different mineral concessions in D. R. Congo, most of which are located in mineral rich Katanga province. Rubamin has commenced the commercial production of Copper Blister at its Greenfield manufacturing facility at Likasi, D. R. Congo in May 2008. It is the largest manufacturer of Zinc Oxide in India and is one of the only two manufacturers of Cobalt metal in India. Rubamin has appointed Chemlock Metals Corp. as its global distributor for Cobalt Metal and compounds, Zinc Oxide and Zinc compounds, Molybdenum compounds, and Cadmium compound. The three businesses of Rubamin group are run as separate Strategic Business Units and Profit centres. These are supported by centralised corporate functions like H.R., Projects, MIS as well as Finance & Accounts. PREPARED BY: BHUMIT SHAH Page 12
ICICI Ventures, one of the leading Private Equity companies in India has taken a strategic stake in Rubamin in July 2007.
Rubamin is committed to excellence in all its endeavours, with an unwavering focus on Customer Delight.
EHS:
Rubamin is committed to excellence in Environment, Health and Safety (EHS) through continual improvement of our awareness, understanding and performance. Our goal is to protect the environment and the health & safety of all employees and community where we operate. It is our endeavour that there should be no adverse environmental impact from our operations and business practices and that we strictly control work related injuries & illness. All employees are imparted safety training at induction as well as periodically thereafter. Regular medical checkups for employees are also carried out. A system of work permits, job safety analysis, and independent third-party safety audits ensures that we employ the best practices available for conducting our operations safely.
CORE PURPOSE AND CORE VALUES:

Core Purpose: The Joy of Creating an Institution
Core Values:
Growth, Dynamism and Speed Learning Organization that Supports Individual Growth.
Winning - Never Giving Up
Page 13
COBALT OPERATION:
We are the leading producer of Cobalt metal and Cobalt salts in India. Our core activity comprises of processing and recovery of Cobalt Metal, Cobalt salts, Nickel Metal, Nickel Salts, Copper Metal and Copper Sulphate from Cobalt bearing ores, concentrates and other Cobalt-Nickel-Copper containing recyclable materials.
QUALITY ASSURANCE:
We are an ISO 9001 (2000) accredited manufacture of zinc Oxide, Cobalt, Nickel
and copper. We have well defined and stringent checks for raw material, work in process and
finished goods.
We have a world class Quality Assurance Laboratory with competent staff equipped
with latest Analytical Instruments, some of them are:
1. 2. 3. 4. 5. 6. 7.
Inductive Coupled Plasma (ICP) Atomic Absorption Spectrophotometers Flame Photometer UV-Visible Spectrophotometer Surface Area Analyzer Auto Titrator
Page 14
RESEARCH AND DEVELOPMENT:

The corporate technology centre of the company - has a modern laboratory, and a team of well qualified personnel. It develops new processes and new products, carries out process engineering, and trouble shoots various technical problems of the company. As a part of its responsibility, the centre also examines various environmental issues, and recommends solution.
The centre focuses on unit operations and processes for leaching, purification, solid - liquid separation, solvent extraction, electro-winning and environmental remediation in the field of hydrometallurgy. It has also started activities in the area of pyrometallurgy and geology, catering to the need of the company in India and in Democratic Republic of Congo.
The centre is recognized by Department of Scientific & Industrial Research, Ministry of Science & Technology, Government of India, New Delhi. It is also recognized by MS University, Vadodara, India as centre of Excellence for students working for doctorate degree.
We also have a pilot plant replicating with the processing plant to conduct trial runs before implementing them on a commercial scale. PREPARED BY: BHUMIT SHAH Page 15
ZINC OXIDE OPERATION:

Rubamin Limited is the leading manufacturer and exporter of Zinc Oxide in India. We have five manufacturing facilities offering almost all grades of Zinc Oxide.
HALOL: This facility uses Calcinations Process for manufacturing Zinc Oxide. It is situated at Halol, an industrial town in Gujarat, located 32 km north-east of Vadodara. DAMAN UNIT I AND II: We have two separate French Process units in the Union Territory of Daman & Diu. Situated on the west coast of India, they are three hours drive from Mumbai and 13 Kms from the nearest Railway Station of Vapi. NANDESARI UNIT I: This unique chemical process zinc oxide unit has been commissioned at Nandesari, Gujarat in January 2009. The unit is an extension of Rubamin's Hydrometallurgy capabilities and delivers value added products through finer process controls. The complete process know-how and technology has been developed in-house at Rubamin. . NANDESARI UNIT II: This unit has been recently commissioned in February 2009 at Nandesari Gujarat for production of zinc oxide for use as Nutritional Additive in Feed Premixes.
Page 16
GRADE AND APPLICATIONS:

Rubamin is the largest Zinc Oxide producer in India. We make over 20,000 tons annually and continue to expand rapidly. We also produce other zinc based chemicals such as Zinc Carbonate and Zinc Sulphate.
We are also one of the most versatile Zinc Oxide manufacturers in the world and make almost all the grades commonly used, which are as follows:
Zinc Oxide 99.5% or 99.7% - White Seal Also known as Red Seal, French Process, Rubber Grade, etc. White Seal is produced by using Zinc Dross in a process known as the French process. It is widely used in the rubber industry especially the tyre industry. Our products are used by Global Majors such as Bridgestone and almost or major tyre manufactures. Zinc Oxide 99.9% - Gold Seal Also known as Pharma Grade, Metal Grade, IP/USP/BP Grade Gold Seal is the purest form of Zinc Oxide made from pure Zinc Metal. Unlike many other manufacturers we make our Zinc Oxide from Special High Grade Zinc Metal. This ensures very low impurities. This grade is widely used in the Pharma industry and all other applications where you need the best quality of Zinc Oxide. PREPARED BY: BHUMIT SHAH Page 17
Zinc Oxide 99% - Yellow Seal Also known as Calcined Grade, Hydroxide Grade, Wet Process, etc. Yellow Seal Zinc Oxide is made from Calcining Zinc Hydroxide. This provides low heavy metal content and is widely used in the tyre, rubber and ceramic industry. Zinc Oxide Active Also known as High Surface Area (HSA) Zinc Oxide Zinc Oxide Active has a fine particle size, good dispersion characteristics and a slow settling rate. It is used in Latex compounding, for goods manufactured with translucent and transparent rubber. Zinc Carbonate (Precipitation Route) Made from chemical precipitation our zinc carbonate is superior due to product morphology, uniform precipitates and finer particle size. Our Zinc Carbonate finds usage in Catalyst and Rubber applications. Zinc Oxide 72% / 75% - Feed Grade This is used as Nutritional Additive in Feed Premixes and for our European customers; we can certify the product in line with the various European Commission Directives. We shall be pleased to furnish detailed specifications of various Grades upon receiving request from our valued customers.
Page 18
RUBAMIN AT GLOBAL LEVEL:
CONGO OPERATION:
To be an Indo-Congolese company, that plays an important role in the development of the Congolese economy by creating wealth for all its stake holders. Rubaco SPRL, D.R. Congo and Rubamin SPRL, D.R. Congo are the wholly owned subsidiaries of Rubamin FZC, U.A.E., which in turn is a subsidiary of Rubamin Limited, India. Rubaco SPRL, D.R. Congo and Rubamin SPRL, D.R. Congo is headquartered in Lubumbashi, which is the Capital of the Katanga province. Rubaco SPRL, formed in the year 2004, is involved in mineral exploration and mining of minerals. Rubamin SPRL is the manufacturing company, primarily focused on the manufacturing operations based on Pyrometallurgy technique.
The group has strength of over 150 employees in D. R. Congo including Geologists, Mining / Mechanical / Civil Engineers, Metallurgists, Scientists, Chemists, Surveyors, Accountants and others.
Page 19
MANUFACTURING:
Rubamin SPRL is the manufacturing company in Likasi, Katanga Province, D.R. Congo, primarily focused on the manufacturing operations based on Pyrometallurgy.
Products:
Cobalt Concentrate 1000MT per annum on 100% cobalt basis.
Copper Blister 7500MT per annum on 90% copper basis. A state-of-the-art green field manufacturing facility has been commissioned at Likasi, Katanga Province. The first phase commercial production has commenced from May 2008. The company is planning a phase-wise capacity expansion of upto 20,000MT of copper and 2,000MT of cobalt.
MINERAL EXPLORATION AND MINING:

Rubaco SPRL has 20 exploration mineral concessions. Rubaco SPRL, formed in the year 2004, is involved in mineral exploration and mining of minerals. The company has Permissions for Research (PRs) for over 2500 sq kms of mineral concessions most of which are in Katanga Province of D.R. Congo. These mining concessions are rich in copper, cobalt, gold, diamond, iron and other minerals. Please see attached file for details of 20 PRs. Rubaco SPRL has charted an aggressive exploration program on these concessions in next three years. We are looking for Joint Venture partners having expertise in exploration and mining for joint exploration and mining of select concessions. PREPARED BY: BHUMIT SHAH Page 20
OUR BUSINESS INTEREST:

Strategic partnership for mineral concessions in D.R. Congo
Private
equity
funding
for
exploration,
exploitation
and
manufacturing
activities at D.R. Congo
Supply of mining equipments and machineries for our operations in D.R. Congo
Orders for execution of excavation, over burden removal and mining work on contract basis
Buying Copper Blister
Supplying Copper Ore in D.R. Congo (Malachite with min. 20 % Cu)
Supplying Cobalt Ore in D.R. Congo (Heterogeneity with min. 3 % Co)
Page 21
OVERALL ORGANIZATION CHART:
Page 22
SWOT ANALYSIS:
A SWOT analysis generates information that is helpful in matching an organizations or a groups goals, programs, and capacities to the social environment in which they operate. It is an instrument within strategic planning. When combined with a dialogue, it is a participatory process.
Page 23
Strength:
Largest presence in Congo. Powerful leader in India in Zinc Oxide and Cobalt. Strong Entries Barriers. Use of Latest Technology. Availability of Trained Man Power. Zinc Oxide is itself a specific Brand name. We make all grades of Zinc using all kind of Raw Material.
Weakness:
Location not Ideal for Chemical Plant. India is not right place for this type Product. The size of the Market is not large. Sometimes there is difficult to collect the raw material.
Opportunity:
We have Exploration area in Cobalt and copper in Congo. Our Product are move into Value Added Product e.g. Battery Material. Indian Market is not matured.
Threats:
Availability of Cobalt is biggest Threat for our Company. Availability of Skilled Man Power and Attribution The growth of China is also great threat Price of Copper and Cobalt are sometimes creating threat for us. Environmental issues are also creating threat for us.
Page 24
Page 25
ORGANISATION CHART OF MARKETING DEPARTMENT:
Chief Operating Officer (COO)
Manager (Sourcing)
Manager (Export)
Business Development Manager
Commercial Sourcing Officer
Sr. Officer (Export)
Commercial Officer
Page 26
PRODUCT AND APPLICATION:

We offer a number of Cobalt, Copper, Nickel, Manganese and Molybdenum Products with wide applications. We can also offer customized products to meet the specific requirements of our customers.
No. Products Specification Applications Dyes 1 Ammonium Molybdate Min 56% Mo Pigments Catalysts Smoke Suppresant Animal Feed 2 Cobalt Carbonate Min 46% Co Ceramics Pigments Super 3 Cobalt Cathode Min. 99.8% Co HSS Investment Casting Paints as drier Cobalt Salts Catalyst Magnets Pigments 4 Cobalt Oxide Min 71% Co Colours Glass Battery Animal Feed as 5 Cobalt Sulphate Min. 21% Co Heptahydrate micronutrient Dyes Anodising Copper Electrowinning Paint Drier & Alloys, &
Page 27
Copper Metal
99.95% purity
Electrical Chemical Alloys Animal Feed
Copper Sulphate Min. 24.5% Cu
Fertilizers Dyes Paint Drier Fine Chemicals Animal Feed
Manganese Sulphate
min 31% Mn
Paint Driers Micro Nutrients Agrochemcials
Manganese Sulphate Solution
Min.27% MnSO4 + B83
Agreochemicals Intermediate
Steel 10 Nickel Metal 99.8% purity Casting Catalysts Chemicals Electroplating Paper 11 Sodium Sulphate 98.5% purity Dyes Detergents Glass
Page 28
Competitors List:
The Rubamin Limited Manufacturing Industry in India is fragmented and has many small Players. Most of the incumbents do not have facilities approved by stable long term customers. High working capital requirement is a barrier to entry in this business. The main competitors of the Rubamin Limited are as Follows: Sr. No. Competitor s Name (Zinc Oxide) 1 2 3 4 5 6 7 8 Nav Bharat Metalic Oxide Transpek Pondy Oxide And Chemicals Upper India Chemicals Mittal Pigments Pvt. Ltd. Liuzhou Zinc (Chinese Player) Umicore Group (Europe) U.S. Zinc (U.S. Market) Approximate Capacity (MTp.a) 6000 6000 4800 4800 3600 5000 5000 5200
Sr. No.
Competitor s Name (Cobalt and copper)
Approximate Capacity (MTp.a) 8170 5021 4748 3648 3391 4798 5000 5000 15000 4900 5000 4897 4500
1 2 3 4 5 6 7 8 9 10 11 12 13
OM Group Falconbridge Norilsk Chambishi International Cobalt Compant Inc. OM Group (Finland) Sherritt International Corporation (Canada) BHP Billiton (Australia) Jinchuan (China) Sterlite Copper Industry Hindalco SWIL Hindustan Copper
Page 29
Customers Profile:
About the 40% of the product of Rubamin Limited is used for the Production of the Tyres and Rubber Industries and the balance is consumed by Ceramics, Paints and other Industries. For Rubamin Automobiles, Tyres and the Rubber Industry account for about 30% of its production at Daman and around 90% of its production at Halol. The main customers of Rubamin Limited are as follows: Sr. No. Customers Name (Zinc Oxide) 1 2 3 4 5 6 7 8 9 10 MRF Limited Bridgestone India Pvt. Ltd. Apollo Tyres Limited CEAT Limited Videocon Glass Industries Limited Explorer SRL (Italy) RAK Ceramics (Dubai) Star Chemicals (Australia) CEAT (Sri Lanka) Jasol (New Zealand) Tyre Manufacturing Tyre Manufacturing Tyre Manufacturing Tyre Manufacturing Glass Manufacturing Minerals and Compounds (Ceramics) Ceramics Manufacturing Chemicals Manufacturing Tyre Manufacturing Plastic Manufacturing Industry
Sr. No.
Customers Name (Cobalt and Copper)
Industry
1 2 3 4 5 6 7 8 9 10
Sandvik Group Lona Industries Laxminarayan Traders Narayan Industries Parswanath Industries Codelco (Chile) Phelps Dodge (USA) LA Chemicals Patcham Ltd. Kosheri
Tolling Pigments and Dye stuff Trading Dyes and Intermediaries Dyes and Intermediaries Copper Manufacturing Copper Manufacturing Chemicals Paints and Adhesives Trader catering to Batteries, Alloy & Chemicals industries
Page 30
Mode of Entry:
Different modes are used by Rubamin Limited which are as follows: Meeting Customer Launching New Products Advertisements Trade Fare Attending Floating information to trade organization By Phone calling to customer for the Interview Fax, E-mail and Internet
Customer Relationship System:

Customers are the key and one of the most important factors of any business because without the Customer the business cannot run successfully. Thats why the Customer is called KING of the Market. The various aspects covered under the customer relationship system by Rubamin Limited for Example: Price Quality Packaging Delivery on time Attending Complains
Pricing:
There are mainly two method of pricing which the Rubamin Limited basically used. They are Formula Based and Spot Based. Formula based pricing used for the regular customer (repeated order). In this method the price for domestic product are charged according to HZL (Hindustan Zinc Limited). Price for international product are charged according to LME (London Metal Exchange). Spot based pricing used for the small customer who gives ordered frequently. Here the prices are charged on the bases of the current price which are available in the market.
Page 31
Distribution Channel:
Distribution Channel is the thing through which the product is available for their users and customers. The Distribution Channel of the Rubamin Limited is as follows:
Manufacturer -------------------> Agent ----------------------> Customer.
Distribution Network:
The Distribution Network is the network where the Agent are distribute the products to their customer directly. Rubamin Limited has Distribution Network in the Places like Bombay, Banglore, Delhi, Daman, and Puna.
Page 32
Page 33
ORGANIZATION CHART OF PURCHASE DEPARTMENT:
Page 34
BASIC OVERVIEW FOR PURCHASE:
There are Five Categories of Purchases being handled by Purchase dept. The same are as follows: Project Purchases Capital Purchases Revenue Purchases Job Work Service orders
Present Purchase Procedure: Purchase Order:

In case of Raw Material, CSP and Packing Material items are covered under Approved suppliers List. Appproved Supplier list for process Chemicals, packing materials and major CSP items is updated periodically. Purchase orders are authorized as per authorization level defined in system. Manager level DGM Level G.M-Commercial Managing Director CFO & MD - Upto Rs. 10,000/- Up to Rs. 100,000/- , - Upto Rs. 5 Lacs > 5 Lac to Rs.10 Lac More than Rs. 10 Lacs
Purchase Order and Amendment:

Once purchase order is prepared and authorized in the system, purchase order amendment is possible in the system. Purchase order amendment can be carried out by the generator of the purchase order. In case of purchase order amendment approval, level wise financial limit of authorization is inbuilt in the SAP System which is same as that of P.O authorization.
Page 35
Purchase Procedure:
Company has a centralized purchase department at Baroda. All the purchases are made from the Baroda for other locations. The following system is adopted for inviting quotations: - Basic value upto Rs.1000 - Basic value Rs.1001 to Rs.5000 - Basic value Rs.5001 to Rs.30,000 - Basic value >Rs.30,000 : Cash Purchase or P.O : One quotation : Two quotations : Three quotations
Exceptions to above system: Public sector undertaking suppliers like oil companies etc. OEM suppliers of spares Authorised Dealer Proprietory item Single source due to scarcity of material/ Emergency Purchases Office equipment
Purchase of process Chemicals:

Chemicals are purchased from the approved suppliers normally. Considering the requirement of the chemicals company is entering into periodic Rate Contract wherever feasible. Orders are placed on the basis of material availability and rates.
Purchase of Packing Material:

Packing material is purchased from the regular suppliers at the same rates or different rate based on fluctuation in raw material prices.
Purchase of CSP Material:

CSP materials are procured by preparing purchase order based on Auto Purchase Requisition generated in the system or individual P.RS. Considering the value of the purchase of CSP material, decision is taken whether to float the enquiries or to purchase it on repeat order basis .
Page 36
Purchase of Material for CONGO:

Material purchased for CONGO is based on the purchase requisitions provided to the purchase department from CONGO. On the basis of the PR, inquiries are floated to the various suppliers. Cost comparative statement is prepared on the basis of quotations received. Further negotiations are made for the discounts or other terms. Purchase orders are prepared on the basis of the final negotiated terms. Direct purchase orders are also prepared on the basis of previous purchase. All the purchases are treated as revenue purchase.
Purchase System encompasses the following functions: Purchase Requisition Generation (PR):
Purchase Requisition is an internal document raised by the different users / departments to the Purchase Department. It specifies their needs and the Schedule Dates by which they require the materials. Purchase Requisition can be either entered by the user, or automatically generated on the basis of the re-order level of an item.
User Initiated Purchase Requisitions

User initiated Purchase Requisition is based on the user needs. User can raise the Purchase Requisitions for an item at any time.
Automatic Generation of Purchase Requisition

Purchase Requisition will be generated automatically based on the stock available in the inventory. Whenever the stock goes below re-order level for an item, List Purchase Requisition will be generated for that item. User can select items to generate Purchase Requisition.
Page 37
Closing of Purchase Requisition

Closing of Purchase Requisition will be done in two cases. In the first case, Purchase Requisition will be treated as closed when total quantity in Purchase Requisition has been ordered. Such closing will be done automatically by the system. Second case will be of short closing of the Purchase Requisition. Short closing will be required when the total quantity has not been order and the user does not require the remaining quantity to be ordered. Short closing has to be done by the user.
Service Contract:
Service Contract is the agreement between Contractor and Buyer. It contains the Item Definition and Rate, Taxes, Transportation and other charges and all the commercial terms and conditions. Rate Contract can be for the quantity and / or for a period of time. Rate Contract can be renewed after the expiry of the contract.
Renewal of Service Contract

The Service Contract can be renewed after the expiry date. In this case based on the original Service Contract new contract will be prepared.
Termination of Service Contract

Service Contract can be terminated. No further Order can be raised against the contract after the termination. Service Contract Amendment In case, a Service Contract with a Vendor requires any changes due to any reasons like change in taxes or terms and conditions, then a new Service Contract is required to be prepared. This type of amendments can be handled through this option, which provides previous Service Contract information to relate with amended Service Contract.
Page 38
Purchase Order (PO):

Purchase Order is the most important document of the Purchase System. It is generated by the Purchase Department and sent to the vendor. Purchase Order basically provides the information about the quantity of goods required to be supplied according to specifications and specified terms and conditions. Modification of Purchase Order will be allowed. However, modification can not be done after the Purchase Order has been authorized.
Preparation of Purchase Order:

Following types of Purchase Order can be prepared:
Purchase Order through Purchase Requisition

This is used to prepare Purchase Order based on the Purchase Requisitions. This is useful to keep track of the Purchases made against the requirements raised by the user. Modification of Purchase Order will be allowed. However, modification can not be done after the Purchase Order has been authorized. Direct Purchase Order This order can be made without a Purchase Requisition
Service Order
This facility is provided to keep account and record of services.
Closing of Purchase Order

This Process will take place automatically when it is completely satisfied i.e. for all items of the Purchase Order is received. Order can be short closed if total quantity is not received because of any dispute or the pending quantity is not required.
Cancellation of Purchase Order

Purchase Order can be cancelled if no material has been received against that Purchase Order. Cancelled Purchase Order can be reopened.
Page 39
VENDOR REGISTRATION AND SELECTION

1. Scope: Vendors of raw materials, consumables and service contractors. 2. Responsibility Chief Business Manager - Main Raw Material DGM Commercial - Process Chemicals, Packing Material, Spares, Consumables and Others. 3. Description: 1.1 Vendors shall be evaluated on their competency primarily by way of correspondence, references, company profile and personal discussions if required. Initially, 2-3 trial orders are placed to assess the suppliers competency and reliability. If found suitable then a vendor registration form (as per enclosed format) is sent for registration of vendor. 1.2 Vendor Registration: Following information is sought from the vendor for registration. a) Facilities like Plant & Machinery, Quality Control Systems, Storage & Delivery Systems, Tool room facilities, Material handling systems. b) Product & Service offered. c) Professional and Technical skills available. d) Commercial and Credit Terms. 1.3 If the vendor is approved, he is included in the approved vendor list. The approved vendor list is updated as and when new vendor is added.
Page 40
4. Records: Vendor Registration Records Approved Vendor List
Selecting capable vendors is one of the most important responsibilities of the purchase department. If a right supplier is selected, then competitive pricing reliable quality, on time delivery, good technical service and other goals of purchasing are easily achieved. All potential vendors are required to apply on the specified Vendor Registration Application be prepared category wise. After careful scrutiny of the details submitted by Vendors, a visit to the premises of the details submitted by vendors, a visit to the premises of the vendor if felt necessary is made. The trial orders can be placed with prior approval of the section Head/HOD (Purchase).
Page 41
Page 42
ORGANIZATION CHART OF PRODUCTION DEPARTMENT:
Page 43
COBALT PROCESS:
Page 44
The process is based on hydrometallurgy having the following process steps: Reduction Leaching. Filtration to separate insolubles from dissolved metallics. Solvent extraction to separate associated metallic (Nickel & Copper) from Cobalt. Electro winning of pure Cobalt sulphate solution to produce electrolytic grade Cobalt metal of min. 99.80 % purity. Electro winning of pure Nickel sulphate solution to produce electrolytic grade Nickel Metal of 99.8% purity. Evaporation / precipitation of pure Cobalt sulphate solution to produce Cobalt salts.
Tolls Used for Material Handling:

Rubamin Limited Used Following tools for the transferring the material from one place to another place for their production purpose they are as follows: Hand Pallet Truck Crain Hoist Lifts Forclip
Storage of Material:
Whenever the material are coming from outside, first of all the person who ordered the material will take the gate pass and then after the material are store in the factory at storage room. After that the material are goes for the inspection and then after they are registered in the GRN (Goods Received Note). Finally the material are goes in the custody of the users.
Page 45
Page 46
ORGANISATION CHART OF HR DEPARTMENT:

VP
AGM (P & A)
DGM (HR)
Admin Officer Corporate (Payroll) Assistant Manager
Nandesari Plant N1, N2
Executive
Officer
Assistant
DGM (HR)
Halol Manager
Daman Executive
HR (P & A)
Officer
Executive Officer
Assistant
Page 47
HUMAN RESOURCE DEPARTMENT: Auto Attendance System:

P & A Department shall issue punching card to new joining employees. All the Employees required flashing their identity card at the time of Entry and Exit. Employees are required to show his Identity card once to installed machine. It will take your attendance in system and will give beep sound and employees name and card no. will appear on screen of equipment for individual employees attendance. In case of lost of card, new card will provided by company on chargeable basis.
Lunch and Tiffin Facilities:

On chargeable basis employees can get their Tiffin/Lunch through Receptionist. Company is providing Lunch/Dinner through main security gate in case of when employees perform over time duty in 1st shift or 2nd shift. In such cases individual employees has to book their Tiffin at Receptionist.
Festivals and Holidays:

The Festivals and Holidays declared by the company shall be made applicable to all class of employees including staff, workman and Executive. The trainees appointed by the company weather in terms of management trainee under statutory provision of Apprentice Act 1961 shall also be entitled to avail benefit of festival holiday.
Late Coming Norms:

Late Coming of more than 10 minutes after schedule duty hours will be treated as Half Leave. Maximum 10 minutes late coming in thrice in a month is allowed.
Page 48
Early Going Norms: Employees are allowed two and Half hours early going once in a month. More than one time early going shall be considered as a half day leave for each early going. For claiming short leave employees need to fill up personal Gate Pass (Green Card) and it should be signed by recommending Authority.
In case of early going for official work outside the factory premises, employees need
to fill up official Gate Pass (Yellow Card) and it should be signed by recommending Authority.
Overtime:
If employees performs their minimum 2 hours duty after their schedule working hours for any productive purpose he shall be eligible for claiming overtime payment as per company prescribed guideline.
Leave Without Pay:

When an employee exhaust his leave or is not entitled to enjoy any leave for whatever reason, he can apply for LWP which the management can absolute grant.
Labour Relation:
The company possesses various labour relation activities. It doesnt have any union, it also possesses harmony, and the company gives all statutory payments scale and other benefits.
Labour Welfare:
Insurance Policy for labour, personal Accident, Mediclaim and Life Insurance. Group Gratuity Policy. Statutory Payments like PF, ESI, Bonus, and LTA. Uniform and Safety related items. Transport related facility from plant to head office and same as, in also shift. Loan policy is allotted, but only for genuine reason. Gift for a self marriage Rupees 2500.
Page 49
Recruitment Process:
There are basically three types of process through which the company recruits the employees. They are as follows: Walking Interview Campus Interview Employment Exchange
Other process for the recruitment is through Directors approval for new Position. (Fresh Requirement) For Replacement no Director approval is required. Only Vice President, Chief Business Manager has authority for replacement. Medical fitness is must required before joining. Cross reference checking if required. After completion of interview offer letter to be issued. At the time of joining Appointment letter is to be issued.
Recruitment Sources:
There are mainly three types of recruitment sources which the Rubamin Limited used are as follows: Internal Sources External Sources Modern Sources
Promotion:
In Rubamin Limited the Promotion is based on the retirement of employees or the vacant position is available in the organization. But the main criteria of promotion are: Retirement of Employees Depends on Working ability Growth of the Company
Page 50
Safety Measures:
There are many safety measures which the company possesses during work:
Personal protective Equipments Work Permit Suitable Fire Extenuation Assembly Point to main Gate Centre safety committee meetings, Research and action Safety Shoes Helmet Glows Mask Glass for Eyes
Applicability of Laws:
Factories Act 1948 Employment State Insurance Act 1948 Minimum Wages Act 1948 Payment of wages Act 1936 Employees Provision Fund Act 1952 Payment of Bonus Act 1956 Employment Exchange Act 1959 Apprentice Act 1961 Payment of Gratuity Act 1972 Equal Remuneration Act 1976
Page 51
Page 52
ORGANIZATION CHART OF FINANCE DEPARTMENT:
Page 53
FINANCE DEPARTMENT:
When it comes to the overall scope and duties of a finance department, there are many functions to be fulfilled. For the most part, the duties include all things related to budgeting. From appropriations to control of expenditure and auditing duties, the finance department of any given company has an array of duties.
Evolution of the Finance Department:

With each passing year a finance company evolves into an entity that is responsible for increasing the company (and shareholders value). This is done by the implementation of strategy. If you are looking for additional information on the roles and responsibilities of a finance department then you might consider doing an Internet search on a specific companys finance department or do a simple Internet search on the traditional versus the modern duties of a finance department. You can also go to your local community college and speak with a business professor.
Functions of a Finance Department:

A finance department basically has three main functions:
To provide strategic financial support regarding operational and general business planning
To provide daily financial services functions To meet and surpass the internal and external needs and financial reporting requirements of the company at large
The finance department generally focuses on providing relevant information necessary for upper level management. Such information is crucial in determining how a company can make better financial decisions. When it comes to reviewing a companys overall practices and efforts, the finance department is key. A finance department will work cohesively with the company to build a corporate environment that will be able to use the financial resources of the company in order to ensure that the desired level of customer satisfaction is met.
Page 54
MAIN FUNCTION OF FINANCE DEPARTMENT:

Preparation of budget, appropriation of accounts, re-appropriations, surrender and savings. Control of expenditure and ways & means position. Audit Treasury administration Administration of Taxes i.e. Sales Tax, Entertainment Tax, Luxury Tax and Entry Tax etc. Service Conditions including Freedom Fighters Pensions. Resource mobilization through loans, Institutional Finance, Small Savings, Credit and Investment and public debt. Financial concurrence and advice. Compilation of Codes, Rules and procedures concerning financial transactions and having bearing on State finance and their implementation. Safety and investment of funds from consolidated funds, contingency fund and public account. Contract, recovery and refund of revenue etc.
Page 55
RATIO ANALYSIS: Meaning:

Relationship between various related items in the financial statements are established, they can provide useful clue to gauge accurately the financial health and ability of business to make profit. This relationship between the two related items of financial statement is known as ratios. It is a mathematical yardstick that measures the relationship between two figures.
Ratio analysis is process of comparison of one figure with another and the interpretation of the ratios to know the strengths and weakness if the firms operations and of its financial position. Ratio analysis helps various interested parties like prospective investors, creditors, banks, and employees etc. to draw useful classification of accounting ratio.
Utility of the ratio analysis:

The use of the ratio was started by banks for ascertaining the liquidity and profitability of companies business for the purpose of advancing loans to them. It gradually became popular and other creditors began to use them profitably. Now even the investors calculate ratios from the published accounts of the company in order to have an idea about the solvency and profitability of the company before investing their savings. The ratio analysis provides useful data to the management, which would help them in taking important policy decisions. Diverse groups of people make use or ratios, to determine a p\particular aspect of the financial position of the company, in which they are interested.
(1) profitability:
Useful information about the trend of profitability is available from profitability ratios. The gross profit ratio, net profit ratio and ratio of return on investment give a good idea of the profitability of business. On the basis of these ratios, investors get an idea about the overall efficiency of business, the management gets an idea about the efficiency of managers and bank as well as other creditors draw useful conclusions about repaying capacity if the borrowers.
Page 56
(2) Liquidity:
In fact, the use of ratios was made initially to ascertain the liquidity of business. The current ratio, liquid ratio, and acid test ratio will tell whether the business will be able to meet its current liability as and when they mature. Bank and other lenders will be able to conclude from these ratios whether the firm will be able to pay regularly the interest and loan instalments.
(3) Efficiency:
The turnover ratios are excellent guides to measure the efficiency of managers. E.g. the stock turnover will indicate how efficiently the sale is being made, the debtors turnover will indicate the efficiency of collection department and assets turnover shows the efficiency with which the assets are used in business. All such ratios related to sales present a good picture of the success or otherwise of the business.
(4) Inter-firm comparison:

The absolute ratio of the firm is not of much use, unless they are compared with similar ratios of other firms belonging to the same industry. This is inter-firm comparison, which shows the strength and weakness of the firm as compared to other firms and will indicate corrective measures.
(5) Indicate trend:

The ratio of the last three to five years will indicate the trend in the respective fields. For example, the current ratio of a firm is lower than the industry average, but if the ratios of last five years show an improving trend, it is an encouraging trade. Reverse may also be true. A particular ratio of a company for one year may compare favourably with industry average but, if its trend shows a deteriorating position, it is not desirable. Only ratio analysis will provide this information.
(6) Useful for budgetary control:

Regular budgetary reports are prepared in a business where the system of budgetary control is in use. If various ratios are presented in these reports, it will give a fairly good idea about various aspects of financial position.
Page 57
(7) Useful for decision making:

Ratio guides the management in making some of the important decisions. Suppose the liquidity ratios show liquid funds. Even for capital expenditure decisions, the ratio of return on investment will guide the management. The efficiency of various departments can be judged on the basis of their profitability ratios and efficiency of each department can thus be determined.
Advantages of Ratio Analysis:

Ratio analysis is very important and useful tool for financial analysis. It serves many purposes and is helpful not only for internal management but also for prospective investors, creditors, and other outsiders. The following are the important uses of Ratio Analysis:
It is an important and useful tool to check upon the efficiency with which the working capital is being used in a business enterprise. Efficient Management of Working Capital.
It helps the management of business concern in evaluating its financial position and efficiency of performance.
It serves as assort of health test of a business firm, because with the help of this analysis financial managers can determine weather the firm is financially healthy or not.
A ratio analysis covering a number of past accounting periods clearly has shown the trend of changes in the business position. The progress or downfall of a business concern is clearly indicated by this analysis. Use to measure the trend of the business.
It helps in making financial estimate for the future. It helps the task of managerial control to a great extent.
It helps the credit suppliers and investors in evaluating a business firm as a desirable debtor or as a potential investment outlet.
It serves as an instrument for testing management efficiency. It provides a useful tool for decision on certain policy matters.
Page 58
Limitations of Ratio Analysis:
Single years ratios have limited utility because the utility of ratios computed from the financial statements of one year only is obviously limited. They must be compared with the past results of the company as also with the results of other business firms in the same industry.
The use of one ratio misleading because one ratio used without reference to other ratios may be misleading. If some conclusions are to be drawn, then the combined effect of a few related ratios must be considered.
There is a practically no standard ratio against which the actual performance can be compared. The satisfactory level of various ratios may differ from one industry to another only because circumstances differ from industry to industry and even from firm to firm.
In ratio analysis other numbers of factors such as general economic conditions and competition, local factors and the policy adopted by the management are also important. Hence, before giving any opinion all factors must be kept in mind.
It must be remembered that accounting ratios are only a preliminary step in investigation. Hence, before taking any action on the basis of accounting ratios based on these figures would give misleading results.
If in the use of ratios, the manager remains rigid and stocks to them, it will lead to dangerous situation.
Page 59
TYPES OF RATIO: [A] Profitability Ratios:
Gross Profit Ratio
Net Profit Ratio
[B] Liquidity Ratios:

Current Ratio
Quick Ratio
[C] Activity Ratios:

Assets Turnover Ratio
1. net asset turnover ratio
2. total asset turnover ratio 3. fixed asset turnover ratio
Inventory Turnover Ratio
Debtors Turnover Ratio
Page 60
SU0MMARY OF RATIO:
Sr. No 1 2 3 4 5 6 7 8 9 Ratio Gross Profit Ratio Net Profit Ratio Current Ratio Quick Ratio Inventory Ratio Interest Coverage (Expenses) Ratio Fixed Asset Turnover Ratio Debt Equity Ratio Debtor turnover Ratio 2011 12.47 2.74 1.41 1.03 5.41 2.48 4.6 1.39 5.13 (70 Days) 2010 10.10 0.39 1.59 1.18 4.11 1.69 3.21 1.65 5.38 (67 Days)
Page 61
[A] Gross Profit Ratio:

It is a ratio expressing relationship between Gross Profits earned to Net Sales. It is a useful indication of the profitability of business. i.e., If Net sales are Rs.4, 00,000 and Gross Profit is Rs. 1, 00,000 then the Gross Profit ratio is 25%.
GPR = GROSS PROFIT SALES
x 100
This ratio is usually expressed as a percentage. A ratio of 25% shows that for sales of every Rs.100, a margin of 25 rupees is available from which operating expenses of business are to be recovered. The ratio shows whether the mark-up obtained on cost of production is sufficient. There is no standard showing reasonableness of gross profit ratio. However, it must be enough to cover its operating expenses. In many industries, there are more or less recognized gross profit ratios and the business should strive to maintain this standard.
If this ratio is low, it is indicates that the cost of sales is high or that the purchasing is inefficient. Alternatively, it may also mean that due to depression, the selling price is reduced but there may be no corresponding reduction in cost of sales. In such a case, the management must investigate the causes and try to bring up this ratio. YEAR 2010-11 2009-10 G.P / SALES *100 3443.78 / 27623.89 *100 2206 / 21839.71 *100 GPR 12.47% 10.10%
Page 62
Interpretation:
The Gross Profit ratio reflects the efficiency with the firms produces or purchases the goods. Given the constant level of selling price, cost price & raw material the gross profit is generally increasing it means the selling price is high as compare to the cost price. In year 2010-11 gross profit ratio is 12.47% which is nearly same as in previous year, so this high ratio of gross profit to sales is a sign of good management as it implies that the cost of production.
[B] Net Profit Ratio:

The ratio is valuable for the purpose of ascertaining the over-all profitability of business and shows the efficiency or otherwise of operating the business. It is the reverse of the operating ratio. It is calculated as follows.
NPR = NET PROFIT SLAES
x 100
Suppose the net profit of the business after taxes is Rs.80, 000 and sales are Rs. 5, 00,000 then the Net Profit Ratio will be: Net Profit Ratio =80,000/500,000*100=16%
Page 63
Generally, the ratio is computed on the basis of net profit earned from operation of business and non-operating expenses and incomes are excluded. i.e. income from investment of surplus funds of business is non-operating income and so it is to be excluded. Loss on sale of asset (furniture) is non-trading loss and it is not taken into account. Generally, tax is deducted from profit while calculating this ratio.
This ratio indicates what portion of sales revenue is left to the proprietors after all operating expenses are met. The higher this ratio, the better will be the profitability. In order to have a better idea of profitability, the gross profit ratio and net profit ratio may be simultaneously considered. If the Gross Profit is increasing over last five years, but the net profit is declining, it indicates that administrative expenses are slowly rising. YEAR 2010-11 NET PROFIT / SALES *100 756.35 / 27623.89 *100 NPR 2.74%
2009-10
85.25 / 21839.71 *100
0.39%
Interpretation:
This ratio shows that the valuable for the purpose of ascertaining the overall profitability of the firm & business. But in the year 2010-11 the Net Profit is high as compare to last year because variable & fixed expenses is less as compared of the other income. In year net profit ratio is 2.74:1 which is high as compared to last year ratio which was 0.39. So this shows result that this year net profit margin got increased. PREPARED BY: BHUMIT SHAH Page 64
[C] Current Ratio:

This most widely used ratio shows the proportion of current assets to current liabilities. It is also known as Working Capital Ratio as it is a measure of working capital available at a particular time. The ratio is obtained by dividing current assets by the current liabilities. It is a measure of short-term financial strength of the business and shows whether the business will be able to meet its current liabilities, as and when they mature. A liability which will mature within a period of 12 months is a current liability. It is generally belief that 2:1 ratio shows a comfortable working capital position.
CURRENT RATIO = CURRENT ASSET CURRENT LIABILITY

Suppose, the current assets are worth Rs.2,00,000 and current liabilities are Rs.1,00,000,then the current ratio will be as under: Current Ratio = 2, 00,000 / 1, 00,000 = 2 or 2:1 It means that for every Rs.1 of current liability, there is available Rs. 2 in current assets to meet the current liabilities. Current Assets =Cash &Bank balance + Stock + Debtors + Expenses +Investments+ readily convertible into cash+ Loan B/R + Prepaid & Advances.
Current assets are in the form of cash or can be readily converted into cash within a short time. Current Liabilities =Creditors + B/P + Bank O/D + Unclaimed dividend + Outstanding expenses + Provision for taxation + Proposed dividend. YEAR 2010-11 2009-10 CA / CL 18961.17 / 13415.96 20543.93 / 12923.82 C.R 1.41 1.59
Page 65
Interpretation:
As in year 2010-11 Curent Ratio Is 1.41 wich Is considre satisfactory but as compare to last year i.e., 2009-10 It has 1.59. So 2010-11 Curent ratio Is showing slight less ability to met its Curent obligation as compare to last year. This ratio is increasing last year but it is not ideal. But is able to meet its obligation on time.
[D] Quick Ratio or Acid-Test Ratio:

The measure of absolute liquidity may be obtained by comparing only cash and bank Balance as well as readily marketable securities with liquid liabilities. This is a very Exacting standard of liquidity and it is satisfactory if the ratio is 0.5: 1.It is computed By dividing the value of quick assets by liquid liabilities. Quick assets do not include Both stock and debtors, because payments from debtors would not generally be Received Immediately when liquid liabilities are to be paid. Thus the quick assets Comprise only Cash balance, bank balance & readily marketable securities only. Some Writers call this ratio as Absolute Liquidity Ratio, (or Absolute Cash Ratio) . QUICK RATIO = CURRENT ASSETS STOCK -------------------------------------------------------------------CURRENT LIABILITIES OR ACID TEST RATIO = QUICK ASSETS LIQUID LIABILITY PREPARED BY: BHUMIT SHAH Page 66
Suppose the company has cash on hand Rs.10,000,Bank balance Rs.45,000 and readily marketable securities Rs.25,000.It means that its quick assets are worth Rs.80,000.If the liquid liabilities are Rs.1,20,000 then the acid-test ratio will be: Acid-test Ratio = 80,000/1, 20,000 =2/3 =0.67:1 It means that quick Assets are 2/3rd of Quick Liabilities.
YEAR 2010-11 2009-10
CA STOCK / CL 18961.17 5105.80 / 13415.96 20543.93 5310.86 / 12923.82
Q. R 1.03 1.18
Interpretation: Quick ratio of year 2010-11 is 1.03:1, which is less than quick ratio of last year i.e., 1.18:1. Which represent that company having less liquidity and cant pay out their current liabilities and also not paying debt. Quick Ratio of 1.03:1 is not considered to be a satisfactory ratio. However, this traditional rule should not be used Bindley since the firm having quick ratio is more than 1. So, It means to quick ratio is very near to the ideal one.
Page 67
[E] Fixed Asset Turnover Ratio: Fixed Assets turnover indicates the efficiency with which firm uses all its assets to generate sales.
CURRENT ASSETS STOCK FIXED ASEET TURNOVER RATIO = -------------------------------------------------------------CURRENT LIABILITIES
YEAR 2010-11 2009-10
Sales / NFA 27623 / 6806 21839 / 6793.22
FAR 4.06 3.21
Interpretation:
In Assets Turnover Ratio of 09-10 is 4.06 indicates that is producing of rupees of sales for one rupee of capital employed in Net Assets & this ratio is generally increase which a good sign for the company.
Page 68
[F] Inventory (Stock) Turnover Ratio:

The number of times the average stock is turned over during the year is known as Stock Turnover or Inventory Turnover. It is computed by dividing the cost of goods sold by the average stock in the business. Average Stock is the average of opening and closing stock of the year. If however, the monthly figures of the stocks are available, the average monthly stock will give a better turnover ratio. SALES INVENTORY TURNOVER RATIO = -------------------------------------INVENTORY Suppose, Opening stock is Rs.70,000 and Closing Stock is Rs.80,000,Cost of Sales Rs.3,00,000,Sales Rs.5,00,000 and Gross Profit Rs.2,00,000. Then this ratio will be computed as under.
Therefore, Average Stock =70,000+80,000/2 = 1, 50,000/2 = 7500 and Cost of Goods Sold =5, 00,000(Sales) 2, 00,000(G.P) = 3, 00,000 Stock Turnover Ratio = 3, 00,000 / 75,000 = 4 times. This ratio signifies that the average stock is turned over four times during the year. If figures for cost of goods sold are not available, then the ratio may be calculated on the basis of the sales. The ratio is very important in judging the ability of management with which it can move the stock. The higher the turnover ratio, the more profitable the business would be. The firm in such a case will be able to trade on a smaller margin of gross profit. A low turnover indicates accumulation of by dividing the cost of goods sold slow-moving, absolute and
low-quality goods, which is a danger signal to the management. Turnover is computed
by the average inventory. The cost of goods sold means sales minus gross profit. The ratio indicates how fast inventory is sold.
Page 69
YEAR 2010-11 2009-10
SALES / INVENTORY 27623.89 / 5105.80 21839.71 / 5310
ITR. 5.41 4.11
Interprtation :
In year 2010-11 the ratio is 5.41:1 which is more as compared to last year which is 4.11:1. So it is considered that this time company has high inventories in store which signify that inventory of this year sells slight frequently and efficiently as compared to last year.
[G] Debtor Turnover Ratio:

Debtor turnover ratio the analysais of This ratio supplments the information Regarding the liquidity of one item of Current assets of the firm. The ratios masures How rapidly recevables are collected. The ratio shows the number of days taken to collect the dues of credit sales. The firm sells goods for cash & credit. Debtors are convertible into cash over long periods which include current assets.
Page 70
The debtors turnover suggests the number of times the amount of credit sale is collected during the year, while debtors ratio indicates the number of days during which the dues for credit sales are collected. Suppose the debtors ratio is 60 days, it means that debtors pay their dues for credit sales after 60 days of making the sales. It means that during the year the collection for credit sales is made 6 times during the year (360 days /60 days) = 6. SALES DEBTOR TURNOVER RATIO = -------------------------------------DEBTOR Where Average Debtors = Opening Debtors + Closing Debtors / 2.
YEAR 2010-11
SALES / CD * DAYS 29190.75 / 5688.45 * 360
DTR 70 Days
2009-10
21839.71 / 4057.31 * 360
67 Days
Page 71
Interpretation:
In this ratio indicates the quality of debtors & the credit collection effort or the experience. It indicates the speed which the debtors are converted into cash in a each year. In the ratio is decrease so collection of money for debtors easily. In 2010-11 Debtor turnover ratio Is 70 Days per year which Is High as Compare to last year i.e., 67 Days per year. So Current year Debtor Turnover Is indicative of shorter time-lag between credit sales and cash collection as compared to last year.
Page 72
INCOME FROM HOUSE PROPERTY:

From this we can understand the income which falls under the head Income from the house Property. The scope of the income charged under this head is defined by the section 22 of the Income tax Act and the computation of income falling under this head is governed by section 23 to 27.
Three conditions are to be satisfied for the property income to be taxable under this head. The property should consist of building or land appurtenant thereto. The assesses should be the owner of the company. The property should not be used by the owner for the purpose of any business or profession carried on by him, the profits of which are chargeable to income tax.
PROPERTY INCOME EXEMPT FROM TAX:

Some income form house properties are exempt tax. They are neither taxable nor included in the total income of the assesses for the rate purpose. These are:
Income from a farm house [ section 2(1A ) (C) and section 10 (1) ] Annual value of the place in the occupation of an ex-ruler [ section 10 (19 A) Property income of the local authority. [ section 10 (20) ] Property income of an approved scientific research association [ section 10 (21) ] Property income of an education institution and hospital [ section 10 (23 C) ] Property income of registered trade union. [ section 10 (24) ] Income from property held for charitable purpose. [ section 11 ] Property income of political party. [ section 13 A ] Income from property used for own business profession. [section 22 ] Annual value of self occupied property.
Page 73
1. Statement of Income from Let-out Property for any purpose.

Amount Particular Rs. (Rs.)
Step-1 Expected rent Whichever is higher > Standard rent (i) Municipal Value (ii) Fair rent xxx xxx xxxx
Step-2 Actual rent received Annual rent received Less: (i) Unrealized rent (ii) Vacancy loss xxx xxx xxx xxxx
Note: 1 Note: 2
If step-2 > step-1 Gross Annual value - Step-2 If step-2 < step-1 Step No 3 is applicable
Step-3 Expected rent Less: Vacancy loss Gross annual value Less: Municipal tax paid by owner Net Annual value Less: Deduction under section 24 (i) Standard Deduction ( 30% of NAV ) (ii) Interest on Housing Loan [ No Limit ] Income from Let-out Property [ Answer nil, (-)ve, (+)ve. ] xxxx xxxx xxxx xxx xxx xxxx xxxx xxxx xxxx
Page 74
2. Statement of Income from Self Occupied Property for Own Residence. Amount Particular (Rs.)
Net Annual value Less: Less: Deduction Under section 24 Interest on Housing loan Income from Self Occupied Property [ Answer nil, or Negative ]
Nil
xxx xxx
INTEREST ON HOUSING LOAN:

If Loan is taken before 1-04-99, Maximum Deduction = 30000 If Loan is taken on or after 1-0499 o If loan is taken for purchase, Maximum Deduction =150000
o If Loan is taken for Repair, Renewal or Reconstruction, Maximum Deduction = 30000
o If Loan is taken for construction and construction is completed within 3 years from the date of Borrowing, Maximum Deduction = 150000 but if construction is not completed within 3 years, Maximum deduction is 30000.
Page 75
3. Income from Deemed to be Let-out Property.

When assesses has more than one house for own Residence, one house is to be considered as a Self Occupied and remaining house considered as deemed to be Let out property. Rs. Particular Amount (Rs.)
Expected rent Whichever is Higher > Standard rent (i) Municipal Value (ii) fair rent Gross Annual Value Less: Municipal tax paid by Owner Net Annual Value Less: Deduction under section 24 (i) standard Deduction [ 30% of NAV ] (ii) interest on Housing Loan [ No Limit ] Income from Deemed to be Let Out Property. xxx xxx
xxxx
xxxx xxx xxxx Xxx
Xxx
xxxx
Page 76
4. Statement of income from partly let-out and partly self occupied property.
( one house is self occupied for few month and let-out for remaining period )
Rs Particular
Amount (Rs)
Step 1 Expected Rent Whichever is Higher > Standard rent (i) Municipal value (ii) fair rent xxx xxx xxxx xxxx
Step-2 Actual rent Received Rent receivable excluding SOP Less: (i) Unrealized rent (ii) Vacancy Loss Note: 1 Note: 2 If Step-2 > Step-1 Gross Annual value is Step-2 If step-2 < Step-1 Step No 3 is applicable. Step-3 Expected rent Less: Vacancy Loss Gross Annual Value Less: Municipal Tax paid by Owner Net Annual Value Less: Deduction under section 24 (i) Standard Deduction [ 30% of NAV ] (ii) Interest on Housing Loan [ No Limit ] Income from Partly LOP and Partly SOP xxxx xxx xxx xxx xxx xxx xxxx xxx xxxx xxx xxx xxx xxxx
Page 77
Interest on loan: Interest for pre-Construction Period: [A] Interest for Current year:
If Loan is repaid in Last year Current year Interest is not applicable. If Loan is repaid in next year full current year interest is Applicable. If Loan is repaid in current previous year Interest for current year from 1-04-2008 to date of repayment. If Loan is still outstanding full current year Interest is Applicable.
[B] Interest for Pre-Construction period:

When date of Borrowing, Amount of Borrowing, Rate of Interest and loan is taken for construction of House.
Date of Borrowing Date of Repayment Date of completion of construction 31-03 Prior
Pre-Construction period:
Date of Borrowing to Date of Repayment Or 31-03 Prior [Whichever is earlier] Note: Deduction will be available in 5 year from the previous year in which Construction is completed. PREPARED BY: BHUMIT SHAH Page 78
EXAMPLE:
During the financial year 2011-2012 Mrs. Dalmia received sum of Rs. 25000 per month by letting out the Premises at 29, Charotar Society, Office: Old Padra road Baroda. CALCULATION OF INCOME FROM HOUSE PROPERTY:
Particular Rent received @25000 p.m Less: House Tax Annual Value Less: Deduction under section 24 Net Taxable Property
Amount (Rs.) 300000 4808 295192 88558 206634
EXAMPLE:
Vishnu has two houses both of which are Self occupied Property. The particulars of the house for the P.Y 2010-11 are as under.
Particular M.V Per Annum F.R Per Annum S.R Per Annum Date of Completion Municipal tax paid Interest on borrowed money
House-I 400000 300000 360000 31-03-05 10% 175000
House-II 600000 700000 740000 31-03-08 9% 250000
Compute Vishnus income from House Property for A.Y 2011-12 and suggest which house should be opted by Vishnu to be assessed as SOP so that his tax liability is minimum.
Page 79
ANSWER:
Computation of Income from House Property of Vishnu for the A.Y 2011-12
Let us first calculate the income from each house property assuming that they are deemed to be let out.
Particular Step-1. M.V or F.R Whichever is Higher Step-2. I or S.R Whichever is Lower Step-3. II is GAV Less: Municipal Tax Paid by Owner Net Annual Value Deduction: 30% of NAV Int. on Borrowed Money Income from House Property 96000 175000 49000 193800 250000 202200 House-I 400000 360000 360000 40000 320000 House-II 700000 700000 700000 54000 646000
Option-I (House-I is SOP and House-II is DLOP):

If House-I is opted as SOP, the income from House Property should be:
Particulars House-I SOP (Loss representing interest on
Amounts in Rs. (150000)
borrowed capital restricted to 150000) House-II DLOP Income from House Property 202200 52200
Option-II (House-I is DLOP and House-II is SOP):

If House-II is opted as SOP, the income from House Property should be:
Particulars House-I DLOP House-II SOP (Loss representing interest on
Amount in Rs. 49000 (150000) 101000
borrowed capital restricted to 150000) Income from House Property
Page 80
Since Option-II is more beneficial, Vishnu should opt to treat House-II as a SOP and House-I is DLOP. His Loss for house property would be Rs. 101000 for the A.Y 2011-12. This Loss can be carried to the next year for set off against income from house property for that year.
EXAMPLE:
Rajesh own a house in Hyderabad during the P.Y 2010-11. 3/4th portion of the property is SOP and 1/4th portion was LOP for residential purpose at a rent of Rs. 12000 p.m. the tenant vacated the property on February 28th, 2011. The property was vacant during March, 2011 could not be realized in spite of the owner effort. All the condition prescribed under the rule 4 is satisfied. Municipal value of the property is Rs. 400000 p.a. Fair rent is Rs. 440000 p.a. and standard rent is Rs. 480000. He paid Municipal tax @ 10% of M.V. during the year. A loan of Rs. 3000000 was taken by him during the year 2005 for acquiring the property. Interest on loan paid during the previous year 2010-111 was Rs. 148000. Compute Rajeshs income from House property for the A.Y 2011-12.
ANSWER:
There are two units of the house. Unit-1 with 3/4th area is used by Rajesh for SOP throughout the year and no benefit is derived from that unit. Hence it will be treated as SOP and its value is nil. Unit-2 with 1/4th area is LOP during the previous year and its annual value has to be determined as per section 23 (1).
Page 81
Computation of Income from house property of Mr. Rajesh for the A.Y 2011-12 Particular Unit-1 (3/4th) SOP Net annual Value Less: Deduction u/s 24 3/4th of 148000 Income from Unit-1 Particular Unit-II (1/4th) LOP Step-1 M.V and F.R Whichever is higher Step-2 1 and S.R Whichever is Lower Step-3 Actual rent received (12000 x 9) GAV: (Step-3 is lower than Step-2) Less: Municipal tax paid by owner 1/4th of (10% 400000) Net Annual Value Less: Deduction 30% of the NAV Interest on Loan Income from Unit-2 29400 3700 31600 98000 108000 10000 111000 (111000)
Amount in Rs. NIL
Amount in Rs. 110000 110000 108000
Page 82
WORKING CAPITAL: INTRODUCTION:

The term working capital is commonly used for the capital required for day-to-day working in a business concern, such as for purchasing raw material, for meeting day-to-day expenditure on salaries, wages, rents rates, advertising etc. But there is much disagreement among various financial authorities (Financiers, accountants, businessmen and economists) as to the exact meaning of the term working capital.
DEFINITION AND CLASSIFICATION OF WORKING CAPITAL:

Working capital refers to the circulating capital required to meet the day to day operations of a business firm. Working capital may be defined by various authors as follows:
According to Weston & Brigham - Working capital refers to a firms investment in short term assets, such as cash amounts receivables, inventories etc.
Working capital means current assets. Mead, Baker and Malott
The sum of the current assets is the working capital of the business J.S.Mill
Working capital is defined as the excess of current assets over current liabilities and provisions. But as per accounting terminology, it is difference between the inflow and outflow of funds. In the Annual Survey of Industries (1961), working capital is defined to include Stocks of materials, fuels, semi-finished goods including work-in-progress and finished goods and by-products; cash in hand and bank and the algebraic sum of sundry creditors as represented by (a) outstanding factory payments e.g. rent, wages, interest and dividend; b) purchase of goods and services; c) short-term loans and advances and sundry debtors comprising amounts due to the factory on account of sale of goods and services and advances towards tax payments.
Page 83
The term working capital is often referred to circulating capital which is frequently used to denote those assets which are changed with relative speed from one form to another i.e., starting from cash, changing to raw materials, converting into work-in-progress and finished products, sale of finished products and ending with realization of cash from debtors.
DETERMINANTS OF WORKING CAPITAL:

The factors influencing the working capital decisions of a firm may be classified as two groups, such as internal factors and external factors. The internal factors includes, nature of business size of business, firms product policy, credit policy, dividend policy, and access to money and capital markets, growth and expansion of business etc. The external factors include business fluctuations, changes in the technology, infrastructural facilities, import policy and the taxation policy etc. These factors are discussed in brief in the following lines.
I. Internal Factors: 1. Nature and size of the business:

The working capital requirements of a firm are basically influenced by the nature and size of the business. Size may be measured in terms of the scale of operations. A firm with larger scale of operations will need more working capital than a small firm. Similarly, the nature of the business - influence the working capital decisions. Trading and financial firms have less investment in fixed assets. But require a large sum of money to be invested in working capital. Retail stores, business units require larger amount of working capital, whereas, public utilities need less working capital and more funds to invest in fixed assets.
Page 84
2. Firms production policy:

The firms production policy (manufacturing cycle) is an important factor to decide the working capital requirement of a firm. The production cycle starts with the purchase and use of raw material and completes with the production of finished goods. On the other hand production policy is uniform production policy or seasonal production policy etc., also influences the working capital decisions. Larger the manufacturing cycle and uniform production policy larger will be the requirement of working capital. The working capital requirement will be higher with varying production schedules in accordance with the changing demand.
3. Firms credit policy:

The credit policy of a firm influences credit policy of working capital. A firm following liberal credit policy to all customers requires funds. On the other hand, the firm adopting strict credit policy and grant credit facilities to few potential customers will require less amount of working capital.
4. Availability of credit:
The working capital requirements of a firm are also affected by credit terms granted by its suppliers i.e. creditors. A firm will need less working capital if liberal credit terms are available to it. Similarly, the availability of credit from banks also influences the working capital needs of the firm. A firm, which can get bank credit easily on favourable conditions, will be operated with less working capital than a firm without such a facility.
5. Growth and expansion of business:

Working capital requirement of a business firm tend to increase in correspondence with growth in sales volume and fixed assets. A growing firm may need funds to invest in fixed assets in order to sustain its growing production and sales. This will, in turn, increase investment in current assets to support increased scale of operations. Thus, a growing firm needs additional funds continuously.
Page 85
6. Profit margin and dividend policy:

The magnitude of working capital in a firm is dependent upon its profit margin and dividend policy. A high net profit margin contributes towards the working capital pool. To the extent the net profit has been earned in cash, it becomes a source of working capital. This depends upon the dividend policy of the firm. Distribution of high proportion of profits in the form of cash dividends results in a drain on cash resources and thus reduces companys working capital to that extent. The working capital position of the firm is strengthened if the management follows conservative dividend policy and vice versa.
7. Operating efficiency of the firm:

Operating efficiency means the optimum utilization of a firms resources at minimum cost. If a firm successfully controls operating cost, it will be able to improve net profit margin which, will, in turn, release greater funds for working capital purposes.
8. Coordinating activities in firm:

The working capital requirements of a firm are depend upon the co-ordination between production and distribution activities. The greater and effective the co-ordinations, the pressure on the working capital will be minimized. In the absence of co-ordination, demand for working capital is reduced.
II. External Factors: 1. Business fluctuations:

Most firms experience fluctuations in demand for their products and services. These business variations affect the working capital requirements. When there is an upward swing in the economy, sales will increase, correspondingly, the firms investment in inventories and book debts will also increase. Under boom, additional investment in fixed assets may be made by some firms to increase their productive capacity. This act of the firm will require additional funds. On the other hand when, there is a decline in economy, sales will come down and consequently the conditions, the firm try to reduce their shortterm borrowings. Similarly the seasonal fluctuations may also affect the requirement of working capital of a firm.
Page 86
2. Changes in the technology:

The technological changes and developments in the area of production can have immediate effects on the need for working capital. If the firm wish to install a new machine in the place of old system, the new system can utilize less expensive raw materials, the inventory needs may be reduced there by working capital needs.
3. Import policy:
Import policy of the Government may also effect the levels of working capital of a firm since they have to arrange funds for importing goods at specified times.
4. Infrastructural facilities:
The firms may require additional funds to maintain the levels of inventory and other current assets, when there are good infrastructural facilities in the company like transportation and communications .
5. Taxation policy:
The tax policies of the Government will influence the working capital decisions. If the Government follows regressive taxation policy, i.e. imposing heavy tax burdens on business firms, they are left with very little profits for distribution and retention purpose. Consequently the firm has to borrow additional funds to meet their increased working capital needs. When there is a liberalized tax policy, the pressure on working capital requirement is minimized. Thus the working capital requirements of a firm are influenced by the internal and external factors.
Page 87
STATEMENT OF WORKING CAPITAL:

Rs PARTICULAR Amt. (In Lacs)
CURRENT ASSETS: Stock of Raw Material: (For months consumption) Stock of work-in-progress: (For months consumption) Raw material Wages Overhead Stock of Finished Goods: (For months consumption) Raw material Wages Overhead Debtors: (For months sales) Raw material Wages Overhead Prepaid Expenses Cash Other Current Assets TOTAL CURRENT ASSETS LESS CURRENT LIABILITIES: xx xx xx Xxx Xxx Xxx XXX xx xx xx Xxx xx xx xx Xxx Xxx Xxx
Creditors (For the purchase of raw material) Outstanding expenses Bills payable Bank Overdraft TOTAL CURRENT LIABILITIES NET WORKING CAPITAL
xx
xx xx xx XXX XXX
Page 88
STATEMENT SHOWING WORKING CAPITAL:

PARTICULAR 2010-11 (In Lacs) CURRENT ASSETS: Inventories Debtors Cash and Bank Loans and Advances TOTAL CURRENT ASSETS LESS CURRENT LIABILITIES: Current Liabilities TOTAL WORKING CAPITAL 2439.83 16521.32 2064.64 18479.29 5105.80 5688.44 1787.79 6379.12 18961.15 5310.86 4057.31 4488.46 6687.30 20543.93 2009-10 (In Lacs)
NOTES: INVENTORIES: PARTICULAR 2010-11 (In Lacs) Raw Material Work-In-Progress Finished Goods Consumables Stores TOTAL INVENTORY 1588.25 2396.89 833.96 286.70 5105.80 2009-10 (In Lacs) 1911.66 2152.02 1120.80 126.39 5310.86
2. CURRENT LIABILITIES: PARTICULAR 2010-11 (In Lacs) Due to MSMED Units Others Subsidiary Companies Advance from Customers Others Liabilities TOTAL CURRENT LIABILITIES 0.89 1584.74 NIL 351.47 502.74 2439.83 2009-10 (In Lacs) 1.89 1452.82 NIL 53.92 556.02 2064.64
Page 89
Comments on Working Capital: Raw Material:

The basic raw material required by RL are zinc Dross, Zinc Hydroxide and cobalt ore. The former is easily available in domestic as well as international market while the later is being completely imported by the company. Presently, RL procures Zinc Dross from Saan Scrap Trading Co. ltd., Indian Steel Corporation limited and Rahul Enterprise. As far as Cobalt Ore is concerned the company procures it from the International market mainly from its subsidiary rubamin FZC, UAE and Glencode Inds AG. The suppliers of the company are reliable and the company is dealing them for the past 4 to 5 years.
During F.Y10 the company maintained holding levels at 1.30 months for imported RM and 1.59 months for indigenously procured RM, which may be considered acceptable. During F.Y11, higher sales towards year end resulted into lower inventory levels.
For the year 2011- 12 with increased level of activity and for smooth functioning company is estimating to maintain holding levels for imported raw material at 1.50 months and for raw material procured indigenously at about 1.25.
Stock in Process:
The SIP level was at 1.00 months which is considered normal; the same is estimated / projected to continue at 1.00 month. Considering the stage of manufacturing the average SIP holding estimated at 1.00 month is considered reasonable and acceptable.
Finished Goods:
Finished goods level was at 0.34 month as on 31. 03. 2011 but for our assessment we has considered at level of 0.50 month as company is about to open their depots warehouse at chilli, Baltimore (USA) and Rotterdam. Thus the estimated levels are acceptable.
Page 90
Receivables:
The receivables level has been assumed 2.00 months for export receivables and 2.75 months for domestic receivables. The company proposed to give 2.50 months time to attract buyers for the same. Higher receivables level has become norm of the business, which is intended by the unit to stay in competition. In view of these receivables holding levels has been estimated at 2.00 months in lien with its business trends. During the year 2011-12 the company has estimated export and domestic receivables at 2.00 months and 2.75 months level respectively which is acceptable in consideration with past trends.
Sundry Creditors:
As per the past trends, the company gets 0.70 to 0.80 months time to make payment to its suppliers. Earlier the company was producing RM through usance LC. However, since 2008-09 it has started procuring raw material through sight LCs. It may be mentioned that approximately 50% of the total raw material requires is imported. Out of the imported RM portion, 85-90% is proposed to be procured under sight LC. As far as the domestic RM procurement is concerned the company either has to furnish advance payment or procure it on cash basis. Hence, the average sundry creditors holding level has been estimated projected at 0.75 month, which is considered reasonable.
Page 91
SIGNIFICANCE OF ACCONTING POLICY: Basis of Accounting:

The financial statement has been prepared under the historical cost convention on accrual basis of accounting and in accordance with Generally Accepted Accounting Principal in India (GAAP) and the provision of the Companies Act, 1956.
Revenue Recognition:
Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection. Gross Sales are inclusive of income from Job work and excise duty, net of trade discount and value added tax. Excise duty is presented as a reduction from Gross Sales in the Profit & Loss Account.
Fixed Asset:
Fixed asset are stated at cost net of CENVET credit if any after reducing accumulated depreciation until the date of the Balance Sheet. Direct cost are capitalized until the assets are ready for use and include financing costs relating to any borrowing attributable to acquisition. Capital work in progress include the cost of fixed asset that are not yet ready for the intended use, advances paid to acquire fixed assets and the cost of assets not put to use before the balance sheet date.
Inventories:
Inventories are valued at cost or net realizable value, whichever is lower. The basis of determining cost for various categories of inventories is as follows:
Page 92
1 2
Raw Material
At cost on Moving Average Price basis
Other Raw Material, Fuel At cost on Moving Average Price basis and Packing Material
3 4
Material in transit Work in Progress
Actual Cost At cost on Moving Average Price basis, Cost include material cost plus appropriate share of labor and manufacturing overheads
Finished Goods
At cost on Moving Average Price basis, Cost include material cost plus appropriate share of labor and manufacturing overheads and excise duty
Consumables, Store and At cost on Moving Average Price basis spares
Investments:
Investments are classified as long term or current in accordance with Accounting Standard 13 on Accounting for Investments. Long term Investments are shown at cost. However, when there is decline other than temporary in the value of a long term investments the carrying amounts is reduced to recognize the decline.
Borrowing Cost:
Borrowing cost that is the acquisition, construction or production of qualifying assets is capitalized as part of such assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use.
Foreign Exchange Transaction:

Transaction in foreign currencies is accounted at the prevailing rate of exchange on the date of the transaction. Monetary items denomination in foreign currencies is restated at the prevailing rate of exchange at the balance sheet date. All gain and Loss arising out of fluctuation in exchange rates are accounted for in the Profit and Loss Accounts.
Page 93
Employee Benefit:
Short term employee benefit (which are payable within twelve month) are measured at cost. Long term employee benefit (After the end of Twelve month) and post employment benefit (payable after the completion of the employment) are measured on a discounted basis by the Projected Unit Credit Method on the basis of annual third party actuarial valuation.
Contribution to the Provident Fund are made in accordance with the rule of the government Provident fund as required by statutes
Taxes on Income:
Income taxes are accounted for in accordance with Accounting Standard AS-22 on Accounting for taxes on income. Income taxes comprise both current and deferred tax . Current taxes is measured at the amount expected to be paid to/recovered from the revenue authorities, using applicable tax rates and laws. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax assets can be realized.
Provision and contingent Liabilities:

The company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources. Where there is possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
Government Grant:
Central and State Subsidy and Laboratory Subsidy received for setting up unit in the specified backward area is credited to Capital Reserve Account.
Page 94
Prior Period Adjustments:

All identifiable items of income and expenditure pertaining to prior period are accounted through Prior Period Adjustments Account.
Impairment of Assets:
The company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such indication exists, the company estimates the recoverable amount of the assets. If such recoverable amount of the assets or the recoverable amount of cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit and Loss Account. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amounts are reassessed and the assets is reflected at the recoverable amount.
Page 95
Page 96
RECOMMENDATIONS / SUGGETIONS:
The Major expenses of the company were manufacturing experiences which includes Consumption of raw material, freight and duties and repairs and Maintenance. Out of this costs Repair and Maintenance is one of the controllable cost which can be reduced by the company. By proper utilization of its Plant and Machineries it can not only reduce its cost but also avoid shutdowns. Many types of machinery were put down as an idle. They can be utilized by giving it to other companies on rent or other consideration. By this way company can earn some more amount of profit. Should try to reduce raw materials and finished goods period by reducing inventory level. Should try having to collect debtors quickly. Control the inventory level. It should increase CA and decreases the level of CL, because the quick ratio taking too much time. Organization should examine the quick ratio because it is more than 1:1. Should concentrate more on inventory or we can say that stock, because in the CA, inventory's demand has higher position.
Page 97
Page 98
CONCLUSION:
It was great experience for me to have training at the company like RUBAMIN LIMITED. I learned those skills, which are needed in any management student. Management of RUBAMIN LIMITED is good and having capable employees to make it number one Cobalt and Zinc oxide manufacturing company in India.
All the departments are doing their work in a professional manner and all the employees are of cooperative in nature. I have not faced any difficulties in getting any data. They are always ready to help you.
At this stage, now I am having clear picture of what are the activities of the different departments.
During my training period I have visited the Different Departments of the Company but the Survey Completed on Finance Department. Lastly, it was the great experience for me. I learned many things during this training period, which I might not learn if I was not at RUBAMIN LIMITED.
Page 99
Page 100
WEBSITE:
www.rubamin.com
OTHER SOURCES:
Company Broacher Annual Reports Past Reports
Page 101
Page 102
Page 103
Page 104

BRS Final

Загружено:

Сведения о документе

Исходное описание:

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

BRS Final

Загружено:

Авторское право:

Доступные форматы

A SUMMER TRAINING REPORT ON FINANCIAL PERFORMANCE REVIEW AT

Submitted By: BHUMIT SHAH MBA- II

Guided By: MRS. KOMAL PATEL ASST. PROFESSOR

ACADEMIC YEAR 2010-2012

K.N.V. INSTITUTE OF BUSINESS MANAGEMENT

AFFILIATED TO: GUJARAT TECHNOLOGICAL UNIVERSITY AHMEDABAD

PREPARED BY: BHUMIT SHAH

MRS. KOMAL PATEL (Project Guide Name)

PREPARED BY: BHUMIT SHAH

This is in accordance with syllabus & guidelines of GTU.

(Signature) ___________ Student's Name: BHUMIT SHAH Roll No.:2053 Date:

PREPARED BY: BHUMIT SHAH

BHUMIT SHAH MBA II

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

Financial History Revenue Profit Before Tax PBT % Net Profit

2010 22197.31 85.26 0.38% 85.26

2011 27623.89 902.10 3.27% 756.35

Inter National Operation: (UAE and Democratic republic of Congo):

Share Holding Pattern as on 31.01.2011:

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

NAME OF THE COMPANY:

TYPE OF THE BUSINESS:

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

CORE PURPOSE AND CORE VALUES:

Winning - Never Giving Up

PREPARED BY: BHUMIT SHAH

with latest Analytical Instruments, some of them are:

PREPARED BY: BHUMIT SHAH

RESEARCH AND DEVELOPMENT:

ZINC OXIDE OPERATION:

PREPARED BY: BHUMIT SHAH

GRADE AND APPLICATIONS:

PREPARED BY: BHUMIT SHAH

RUBAMIN AT GLOBAL LEVEL:

PREPARED BY: BHUMIT SHAH

MINERAL EXPLORATION AND MINING:

OUR BUSINESS INTEREST:

activities at D.R. Congo

Buying Copper Blister

Supplying Copper Ore in D.R. Congo (Malachite with min. 20 % Cu)

Supplying Cobalt Ore in D.R. Congo (Heterogeneity with min. 3 % Co)

PREPARED BY: BHUMIT SHAH

OVERALL ORGANIZATION CHART:

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

PREPARED BY: BHUMIT SHAH

ORGANISATION CHART OF MARKETING DEPARTMENT:

Chief Operating Officer (COO)

Business Development Manager

Commercial Sourcing Officer

Sr. Officer (Export)

PREPARED BY: BHUMIT SHAH

PRODUCT AND APPLICATION:

PREPARED BY: BHUMIT SHAH

Electrical Chemical Alloys Animal Feed

Copper Sulphate Min. 24.5% Cu

Fertilizers Dyes Paint Drier Fine Chemicals Animal Feed