HARDIK THAKAR.doc

7/28/2019 HARDIK THAKAR.doc

1/81

- 1 -


2/81

INTRODUCTION

India is characterized by all over expanding population; this growth coupled

with rapid Industrialization has created huge demand for cargo vehicles, also for

passenger vehicles. Diesel vehicles have been gaining more popularity on account of

price advantage enjoyed by diesel cost as compare at petrol cost.

A listed Large Scale Public Ltd. Company ATUL AUTO Ltd. is located at

Shapar Industrial Zone, which is a notified backward area by State Government

eligible for several benefits. It is 18 km. away from Rajkot city, on National

Highway 8-B, having Land of 5,00,000 sq.ft. ATUL AUTO Ltd. has so far invested

more than Rs. 300 million in manufacturing unit with capacity of 10,000 vehicles

per annum. About 300 workers are employed in factory which is equipped with most

modern plant & machinery. The manufacturing units are fully equipped with CNC

machine shop, test house etc. Most of components are produced in-house to maintain

strict quality control.

Promoted by Mr. Jayantibhai Chandra who is Chairman and Managing

Director of ATUL AUTO Ltd. It has become professionally managed organized

sector company with highly qualified and experienced team of managers and staff to

further the growth of companys business.ATUL AUTO Ltd. manufactures and market ATUL SHAKTI Diesel 3-

wheeler vehicles are very popular among farmers and rickshaw owners in Gujarat on

account of invariably high standards of quality, expert workmanship and high re-sale

value. ATUL SHAKTI diesel 3-wheeler vehicles are available in different models

and variants like Load carrier, Pick-up van, Delivery van, Bottle Carrier etc. The

different models are ideal to meet the urban and rural market demand.

As on today approximately 1,30,000 vehicles are on Indian roadsmanufactured by ATUL AUTO Ltd.

ATUL AUTO Ltd. is presently marketing its product in Gujarat, Andhra

Pradesh, Rajasthan, Maharashtra, Haryana through its existing dealer-network of 70

plus. The company plans to introduce its vehicles to other states like Punjab, Uttar

Pradesh etc. ATUL AUTO Ltd. has exported its product to number of Asian and

African countries in the past.

- 2 -


3/81

ATUL SHAKTI diesel 3-wheeler vehicles have unique features like floor

gear-shift, electrical starter, powerful engine, differential, two head light etc. These

vehicles are ideal to carry a load up to 1 tone at a cost of 40 paisa per kilometer

(approximately). The vehicle owners of 600 net per day, and thus these vehicleshave proved themselves to be the best means of self employment.

ATUL SHAKTI

Super Earner,

Everyday Winner

- 3 -


4/81

Company Profile

(a) Name of Company: ATUL AUTO LTD.

(b) Corporate Office Address : Jimmy Tower,

Opp. Swaminarayan Gurukul,

Gondal Road,

RAJKOT 360 002.(c) Registered Office Address : Survey No. 86,

Plot No. 1 to 4, N. H. 8-B,

Tal.: Kotda Sangani,

Shapar (Veraval),

RAJKOT 360 004.(d) Year of Establishment : 1 st May 1992(e) Year of Commencement : 1 st May 1992(f) Main Products : Automobiles (Three Wheelers)(g) Production Capacity : 1800 Units (Monthly)(h) Form of Organization : Joint Stock Company(i) Size of Unit : Large Scale Unit

(j) Names of Promoters : Shri J. J. ChandraShri Atul J. Chandra

Shri Mahendra Patel.(k) Board of Directors

Shri J. J. Chandra

Shri N. J. Chandra

Shri M. J. Patel

Shri R. H. Druva

Shri R. S. Kukreja

Shri S. T. Kaneria

:

:

:

:

:

:

:

Chairman & Managing Director

Whole Time Director

Joint Managing Director

Director

Director

Director (l) Auditors : M/s. Maharishi & Co. Chartered

Accountants JAMNAGAR.(m) Total Area Covered : 10 acres.(n) Bankers : State Bank of India(o) Brand Name : ATUL SHAKTI

HISTORY AND DEVELOPMENT

- 4 -


5/81

Each and every empire or business has its own story to tell history of unit is a

mirror of its image building. Thats why I am drawing a verbal picture of these units

past in following lines:

The company originally started activities in Jamnagar way back in 1960 as a partnership firm, producing small rural Vehicles. In the year 1986 a simple man but

having superb knowledge, skill and experience of automobile had started this

company, he is Mr. Jayantibhai J. Chandra. Shri Chandras dream of 1960s and the

maiden venture became a successful reality. The birth of this company was taken

place at Jamnagar with the name of ATUL AUTO JAM. Pvt. Ltd. After its

establishment within short period of time the management of the company found that

Jamnagar is not a proper market. Afterwards they started new plant in Pune

(Maharashtra) but again same kind of problem arose.

By analyzing the market segment and after potential thinking over it, in 1991

company set up new plant at Shapar (Veraval), in industrial colony located near

Rajkot, for manufacturing new range of Diesel 3-wheelers, i.e. Passenger Rickshaws

of six persons capacity and pickup van of 750 k.g. pay load useful in urban area.

The company had made rapid development in producing and marketing of

Diesel Auto Rickshaw. In the beginning stage, they produce only one product that is

Khushboo Road Master, but there after they produced many type of Diesel Vehicle.

At present this unit is at No. 1 Diesel Rickshaw company in whole Gujarat Today

the Atul-Shakti brand of Diesel 3-Wheeler are market leaders, a recognized force in

Kutch, Saurashtra and Gujarat. The companys vehicles have also found excellent

response from the African countries of Kenya, Uganda, Tanzania, Sudan and Egypt.

ATUL AUTO Ltd. was a private limited company when it was established

in 1991. But after 1994 it was converted into a public limited company according to

companys Act 1956. This proves its great financial position.

As on today approximately 1,30,000 vehicles are on Indian roads

manufactured by ATUL AUTO LIMITED.

It was ATUL AUTO Ltd. who introduced Diesel Carrier Auto Rickshaw for

the first time in Gujarat.

SIZE OF ORGANISATION

- 5 -


6/81

The business Organization may be small size, medium size or big size. Size

of Industrial unit can be fixed on the basis of workers, capital investment, quality of

production, sales turnover etc.

If the capital invested by the company is less than 3 crores it is known asSmall Scale Industry and if the capital invested by the company is between 3 to 5

crores it is known as Medium Scale Industry and if the Capital Invested is more than

5 crores it is known as Large Scale Industry.

Investment in ATUL AUTO Ltd. is more than 5 crores, so it is a Large

Scale Industry.

- 6 -


7/81

FORM OF ORGANIZATION

INTRODUCTION:

There are many forms of organization varying from Sole Proprietorship,

Partnership, Private Limited Company, Public Limited Company, Joint Sector, Co-

operative Societies etc. ATUL AUTO Ltd. is a Public Limited Company.

PUBLIC LIMITED COMPANY:

According to Companys Act, 1956, A Company in which there areminimum 7 members and having no limits for maximum numbers is called a public

Limited Company.

ATUL AUTO LIMITED AS A PUBLIC LIMITED COMPANY

(1) Voluntary Association:-

When people join the group with the objective of earning of profit or anyspecific objective without any pressure is termed as voluntary association.

(2) Artificial Person:-

A company is a creation of law. A separate legal entity or personality is a

unique feature of a company which distinguishes it from a sole trader or a firm. It

has no body, no soul, and no conscience, still it is in a position to exist. ATUL

AUTO Ltd. was promoted by Mr. J.J. Chandra.

(3) Common Seal:-

A company not being a natural person cannot sign documents for itself. So it

has a device in the form of common seal on which its name is engraved and this

common seal works as a signature. When it is affixed by a board on any documents,

it has to be witnessed by two directors. ATUL AUTO Ltd. has its common seal.

- 7 -


8/81

(4) Limited Liability:-

The privilege of limited liability bestowed on all registered trading

companies is a born to the Joint Stock enterprise. A members liability is usually

limited by face value of shares and if he owns a fully paid share, he shall not haveany future liability at all. In ATUL AUTO Ltd. shareholders have limited liability.

(5) Perpetual Existence:-

As company is an artificial person enjoying individually. It is not terminable

by death of any of its shareholders or directors. Once a company is formed it cannot

be dissolved until law recognizes it and till it is wound up. As per the Act. ATUL

AUTO Ltd. is also enjoying same thing. If any of its shareholders or directors will

pass away company shall not come to a stand still it will work

INFRASTRUCTURE AVAILABLE WITH ATUL AUTO LTD.

- 8 -


9/81

A) Land and Building:-

The companys main manufacturing unit is located at Shapar Industrial Zone,

which is a notified backward area by State Government eligible for several benefits.It is 18 kms. Away from Rajkot city, on National Highway 8-B, having land of 5,

00,000 sq. The existing constructed factory area is of 1, 45,000 sq. ft. Company can

also acquire more land as per the need of new project being identified.

B) Plant and Machinery:-

The manufacturing units and fully equipped with CNC machine shop,

fabrication shop, assembly line, paint shop, test house etc. with modern advancedequipment and machinery. All the critical components are being manufactured in-

house except Engines and Tyres. Manufacturing facilities are most versatile and can

undertake any precision job.

C) Inspection, Quality and P.D.I.:-

Company is having fully equipped quality assurance department with

sophisticated facilities. Company is in the process to acquire ISO 9001 in the near

future.

MANAGERIAL TEAM

- 9 -


10/81

Who are Promoters?

Person who had the idea to the establish company, those who make the pre-

preparations for it and take personal responsibility for it are called Promoters.Promoters, brings a company into existence on their own imagination, they find out

new business opportunities, examine their feasibility and if found practical, they

establish a company through proper co-ordination of the required capital, materials

and manpower.

Mr. J. J. Chandra having superb knowledge, skill and experience of

automobile is the Promoter of ATUL AUTO Ltd.

Board of Directors and Managing Team

BOARD OF DIRECTORS

- Mr. Chandra J.J. - Chairman & Managing Director - Mr. Jogalekar Shriharsh S. - Vice Chairman- Mr. Chandra Bharat J. - Whole time Director - Mr. Patel Mahendra J. - Executive Director - Mr. Dhruva Rajesh H. - Director - Mr. Kukreja Rajendra S. - Director

AUDITORS

M/s. PUROHIT & Co. Chartered Accountant

BANKERS State Bank of India (SBI)

Citizen Co-operative Bank Ltd.

Laxmi Vilas Bank Ltd. State Bank of Saurashtra (SBS)

- 10 -


11/81

ORGANISATIONAL STRUCTURE

An Organizational Structure is graphic means or a record depicting vividly

the formal organizational structure and shows the formal superior subordinaterelationships. An organizational structure is a blue print of company organizational,

its function, lines of authority and key positions. It shows who supervises and

controls whom and how the various units are interrelated.

- 11 -

MarketingHead

ProductionHead

QualityControlHead

HR Head

HR Executive

Line incharge

Lineinspector

TechnicalStaff

Chairman

Board of Director

Finance head

Operator

DevelopmentMarketing

Regular Marketing

AccountOfficer

FinanceOfficer


12/81

LOCATION

Location factors are crucial for profit maximization; therefore, it is inevitable

for every industrialist to give full consideration to the suitable location of theenterprise. An entrepreneur must choose and ideal plant location at the time of

launching the enterprise. Thus location determines to a great extent, the survival as

well as prosperity of a business unit in a free market company.

Optimum location factors are expected to give lowest unit cost of production

as well as of distribution.

MEANING:-

Location means Selection of sight for establishment of industries where thecost of production is the lowest at the time of their establishment.

FACTORS:-

To select SHAPAR only as a location there arose many questions. The

company was established in Jamnagar. The management of company found that

Jamnagar was not proper market, after words they started new plant in Pune

(Maharashtra) but again same kind of problem arose and at last by analyzing the

market segment, and after potential thinking over it they set up a new plant at

Shapar.

Following are the factors to select Shapar as a Location:

(1) Availability of Raw Materials:-

Raw materials are very important for an industry to manufacture different

products. They play very vital role in every industry entrepreneur try to establish or

locate industry where raw material is available freely or easily. Raw materials used

in ATUL AUTO Ltd. are cast steels, iron, engines, accessories, color etc.

(2) Nearness to Market:-

Quickness in marketing actions can be ensured by being close to the market.

Showing down of deliveries can be avoided when plant is located near the market.

Large number of products produced by ATUL AUTO Ltd. is sold in Saurashtra

region and in state of Gujarat, Rajasthan and Maharashtra.

- 12 -


13/81

(3) Availability of Labour:-

To start any industry, workers or laborers are needed, if laborers are available

than it would be good location otherwise it would be expensive. If cost of labor isless, cost of production will be less. ATUL AUTO Ltd. is located in Shapar near

Rajkot from where it gets labor at cheaper rate.

(4) Transportation:-

Transportation facility is the basic necessity for each and every industry to

bring in raw materials and to supply finished goods to market. Usually there are

main four modes to transportation i.e. Road, Sea-route, which connect to all parts of

Saurashtra region and State of Gujarat, Rajasthan and Maharashtra.

(5) Finance:-

Finance is major factor required by each and every organization, for

establishment, expansion and development. The availability of Capital at cheaper

rate of interest is a dominating factor influencing industrial production.

The ATUL AUTO Ltd. has not faced any difficulties due to lack of finance,

it has a separate Finance Department. It has raised its capital from various financial

institution and banks.

(6) Availability of Power Sources and Water:-

In modern age industry could not work without Power Factor. Power is

necessity for todays age industry. Electricity allows greater freedom of choice for

location. Adequate and regularity of power supply are important. Water resources

are required for processing, sanitary and drinking purpose.

(7) Site and Services:-

Selection of a site and services affects the location of an industry. To a

certain extent Government of India has declared some of the place all over India as

backward areas. Where they provide entrepreneur incentives like subsidies, grants,

loans with less interest, supply of power at cheaper rates etc. So some entrepreneurs

are attracted by such backward areas. ATUL AUTO Ltd. has set up its plant in

- 13 -


14/81

Shapar (Veraval) 18 kms. away by State Government eligible for several benefits.

(8) Latest Technology:-

In todays modern world to stand, cost should be less and production should be large and for that there should be latest technology. ATUL AUTO Ltd. has

adopted latest technology in production. All its machines are according to latest

trends.

ATUL AUTO Ltd. was set up after taking into consideration all above

location factors. None of the factor has been ignored. Equal importance has been

given to all factors right from the stage of procurement of raw material to the stage

of latest technology. ATUL AUTO Ltd. has been benefited due to its location.

- 14 -


15/81

TIME KEEPING SYSTEM

Man can work for some limited time, he cannot work for 24 hrs. but

industries are running round the clock. So there are some adjustments made between

the workers which are known as the shifts.

The time keeping system at ATUL AUTO Ltd. is situated at the entrance of

the factory premises.

At ATUL AUTO Ltd. the system is fully computerized which to makeswork very easy and comfortable. It has a set a punch-card system for maintaining

attendance of the employees at the entrance. Card is to be affixed in the punching

machine and the machine records time, date, shifts, months etc.

The Assistant of Personnel Department maintains the record of attendance on

the daily basis. These details of daily attendance are recorded in a register which is

sent to the Executive Director on a Regular basis for verification.

Time keeping system at ATUL AUTO Ltd.

Session TimeFirst Session 9:00 am to 1:00 pmLunch 1:00 pm to 1:30 pmSecond Session 1:30 pm to 5:30 pmIncentive Time 6:00 pm to 9:00 pm

For manufacturing department there is holiday on Wednesday and for

Administrative department there is holiday on Sunday.

- 15 -


16/81

CONTRIBUTION TO THE INDUSTRY

Contribution of the unit to the industry means what percentage of

contribution is given by the particular unit in the product.

The main product of ATUL AUTO Ltd. is diesel 3 wheeler vehicles. It has

applied modernized style and latest technology in its production process which

results into large production. ATUL AUTO Ltd. plays a vital role by contributing

80% of total diesel three wheelers vehicles in Saurashtra region. These products

have a very good potential in Gujarat and in Indian market.Ultimately we can say that ATUL AUTO Ltd. is occupying a significant

position among the industries producing diesel 3-wheeler vehicles not only in

Saurashtra but also in Gujarat, Maharashtra, Andhra Pradesh, Haryana, Rajasthan

and other states of India.

As on today approximately 1,30,000 vehicles are on India roads

manufactured by ATUL AUTO Ltd.

- 16 -


17/81

- 17 -


18/81

INTRODUCTION

Research study is a study of some specific problem of any individual or

group during his/her research period. Research problem in general refers to some

difficulty which researcher experience in the context of either theoretical or practicalsituation. The researcher may want to obtain the solution for same.

In the research study there is some individual, group or an organization

which has some difficulty or a problem. Research study cannot be made if anyone is

found out without having any problem. In the research study, there are some

objectives to be achieved on the part if researcher.

DEFINITION:- Redman & Mory defines research study as systemized efforts to

get new knowledge

According to Clifford Woody research study comprises defining &

redefining problems, formulation hypothesis or suggested solutions,

collecting, organizing & evaluating data, making deduction &

researching conclusion & at last carefully resting the conclusion todetermine whether they fit the formulating hypothesis.

Deslesinger & M.stephenson in the encyclopaedia of social defines

research as thee manipulation of things, concept or symbol for

generalizing to extend, correct or verify knowledge which aids in

construction of theory or the practice of an art.

- 18 -


19/81

RESEARCH PROBLEM

Research problem is a problem which researcher faces in advance when

he/she goes to research study. The study includes analysis of group, individual or

organization. The researcher will decide that which point he/she want to makeresearch because the particular individual, group or organization doesnt know

whether they are having any problem or not. When researcher make his/ her study

analysis the problem and defines the solution then & them we can know that the

particular problem was existing with the group, individual or organization.

We can here say that research problem exists if the following conditions are

made.

1) There must be a problem facing either by individual, group or nay firm.

2) There must be some objectives to be attained.

3) There must be doubt in the mind of researcher with regard to selection of

alternatives.

4) There must be two possible outcomes.

5) The course of action available should provide the chance of obtaining the

objectives.

6) The problem should neither be very general nor very specific.

7) The problem should be solvable.

My problem in this research study is financial performance of ATUL AUTO

LTD. On the basis of the ratio analysis. I want to study whether the company is

profitable in terms of ratio analysis or not.

- 19 -


20/81

RESEARCH OBJECTIVES

In every research study, there are some objectives to be achieved. Researcher

conducts research study to solve any specific problem & there by making conclusion

& getting the answer of that particular problem. Research objectives may be

different as per research study researcher.

In my research study, I have made my efforts to get out following objectives.

1) To know financial performance of ATUL AUTO LTD. On the basis of ratio

analysis

2) Company is having sound position or not in terms of all ratio

3) Return company provides to its share holders

4) Utilization of inventory and Borrowed fund for expansion activities

5) To know the profitability of company

6) The interest burden the company is having

- 20 -


21/81

IMPORTANCE RESEARCH STUDY

The relevance of the research study is as under.

(1) Research study is needed because it facilities smooth sailing of various

research operations. There by making research as efficient as possible

giving maximum information with minimum expenditure of time, efforts &

money.

(2) Research study stands for advance planning of the methods to be adopted

for collecting relevant data & techniques to be used in analysis keeping in

view that the objectives of research problem & availability of time, staff &

money.

(3) Research study is a foundation for solving out any specify problem the

group, individuals are having & reaching to appropriate conclusion.

(4) Research study helps the researcher to organize his/her ideas in a form

where by it will be possible for him/her to look for inadequacy.

(5) Research study provides a blue print for collection, measurement & analysis

of data. It includes what the researcher will do starting with the hypothesiswriting, its practical implication & the final analysis of data.

(6) A good research study helps the researcher in gathering maximum

information within a minimum time & provided tools & techniques to solve

the specific problem there by saving time, money & energy.

METHODS OF DATA COLLECTION

Data collection is an important source for researcher for getting out

information for the completion of research study. Every researcher when goes for the

research study needs some information to collect facts & figure to complete research

study. This information which researcher is going to collect should be of reliable &

accurate because without such kind of information research study cannot come to

conclusion.

Data should be properly arranged so that the researcher should get an idea to

solve out the specific problem of research study by using=such data. If data is not

- 21 -


22/81

reliable, accurate then it will not helps the researcher to accomplishing in the

research study & meaningful conclusion cannot be achieved.

For collecting the information there are mainly two methods of the datacollection which are as under.

1) Primary Methods.

2) Secondary methods.

This both the methods are of very important in its nature. They show the

different sources to researcher to get out needed information.

The both the methods are presented in the form of chart & also the sources

which they include for helping put researcher in getting information & reaching &

arriving at the meaningful conclusion.

1) Primary method:-

(A) questionnaire:-

In this method the questionnaire is prepared on the specific subject & the

respondent is asked to fill up questionnaire & on the basis of that meaningful

conclusion is made.

(B) face to face conversations:-

In this type of method researcher goes to the respondents & asked them

questions regarding the problem which he/she faces & going to solve it.

(C) Personal interviews:-

In this type of method, one export person is appointed who has a vast

knowledge of different sectors. Respondents are asked to come there & asked to give

answer of the questions which the export person asks to them.

(D) Panel interviews:-

In this method, two or more than two export persons are appointed &

respondents are asked to come & are asked to give answer of questions which those

people ask

(2) Secondary method:-

(A) internet:-

- 22 -


23/81

Internet in todays world is more powerful & useful tool for getting out

information from the corner of world. A researcher can search on any topic & can

get information from the world. Internet is a vital source of information for

researcher. Researcher can get information by using different search engines likeGoogle, Yahoo, my MSN search etc...

(B) Newspaper:-

Newspaper is a primary source of information. In every days life newspaper

can be considered as useful & easily accessible source of information. Even the poor

man can easily get access to the newspaper & come to know about daily incidents

happening around him/her.

(C) web-sites:-

Websites are also considered as important source of information. A

researcher can click on particular web-sites & search the topic & can get the

information needed by him/her.

(D) Magazines:-

Magazines are also important & accessible source like newspaper. There are

so many magazines published on various topics. A researcher can go the market &

buy the magazines & get the information needed by him/her.

(E) Company literature:-

Company literature can be considered as most useful tool to get information.

Every company annually or semi annually published various kinds of audit reports &

broachers. Researcher can easily get thee information by using such tool.

(1) Sampling design:-

It is a method of collection & organizing data in proper form.

(A) Probability/non probability sampling:-

Probability sampling is a method by which research used the probability to

derive the information. This method is also known as chance sampling. In non-

probability sampling each of the unit is weighted equally that means all units are

given equal chance.

(B) Sampling unit:-

Sampling unit is a group of any individuals, company or households. It is a

collection of information with the help of population.

Annual reports of 5 years and other financial information

- 23 -


24/81

(C) Sampling size:-

Sampling size is a no. of sample to be studied by the researcher in research

study.

Last 5 years

- 24 -


25/81

INTRODUCTION to

PRODUCTION DEPARTMENT

Production is the basic activity of the all-industrial units. All other activities

revolve around this activity. The end product of the production activities is the

creation of the goods and services for the satisfaction of human wants.Various persons have given definition of production importance definition

are as under;

Production is a process by which goods and services are created.

- E.S. Buffa.

Production is fabrication of physical object through use of men, material and

equipment.

Production means creation of utilities and entails the procurement and

utilization of factors of production, which includes manpower material guiding and

equipment.

Production must be operated in an economic and efficient manner because

cost of production is vital factor in facing market competition and in ensuring

normal profit or return on investment.

Among all the functional areas of managements production is considered in

any industrial organization as unique. Production is the process by which, raw

materials and other inputs are converted in to finish product. Nature of production

can be better understood if we view the manufacturing function from the different

angle as

1) Production as a system

2) Production as an organization function

3) Decision making in production.

- 25 -


26/81

Atul auto produce

60 Rickshaws Per Day

360 Rickshaws Per Week

1500 Rickshaws Per month18000 Rickshaws Per Year

ORGANIZATION STRUCTURE

- 26 -

BODBOD

MDMD

EDED

GM GM

Purchase Manager Purchase Manager Production Manager Production Manager

Planning EngineersPlanning Engineers

Sr. Eng .FabricationSr. Eng .Fabrication

Sr. Eng. TestingSr. Eng. Testing

Sr. Eng. QCSr. Eng. QC

Sr. Eng. DesignSr. Eng. Design

Sr. Eng. AssemblySr. Eng. Assembly

WorkersWorkers


27/81

PRODUCT PROFILE

- 27 -

Types of Product

Types of Product

Goods CarriesGoods CarriesPassenger

CarriesPassenger

CarriesSpecial CarriesSpecial Carries

Pickup VanStandard

Pickup VanStandard

Delivery VanDelivery Van

Pickup Van HighDeck

Pickup Van HighDeck

Pick Van StandardCNG

Pick Van StandardCNG

Pick Van HighDeck CNG

Pick Van HighDeck CNG

3+1 Passenger3+1 Passenger



CNG PassengerCNG Passenger

LPG Passenger LPG Passenger

Chicken CarrierChicken Carrier

TipperTipper

Water Tank Carrier

Water Tank Carrier

Soft Tank CarrierSoft Tank Carrier

Mobile ShopMobile Shop

HopperHopper

Bio - HazardBio - Hazard

Vegetable VendingVegetable Vending


28/81

PRODUCTION PROCESS

- 28 -


29/81

PRODUCTION PROCESS:

- 29 -

1. RawMaterial

6. Painting 2. ChassisFabrication

3. FinalChassis

4.Assembling

5. Bolting

7.ElectricalAssembly


30/81

The company ATUL AUTO LIMITED has very easy and simple production

procedure. The production procedure is divided in 7 important stages. This must be

followed chronically. The stages are as given below,

Raw Material:

The first stage in production procedure is acquisition of Raw Material. It is

the stage on which other stages of process depend. If there is any disturbance in

supply of Raw Material, the entire process gets disturbed. The main raw material,

which is used by the company, is iron. Company purchases different varieties of iron

like, iron angles, iron sheets, iron pipes, etc. This raw material imports from Shaper,

Rajkot and Ahmadabad by the company. The raw material is stored in storeroom.

There are 3 initial Raw Material,

1. Metal Pipes

2. Metal Sheets

3. Diesel Engine (Grieves India Ltd.)

There are some other raw materials also

Wires

Front Glass

Types

Batteries (Pestrolite Ltd.)

CUTTING OF RAW MATERIAL:

After receiving raw material, the process of cutting as per requirement is

done by the workers. Iron angles sheets and pipes are cut as per need in cutting

department.

- 30 -


31/81

Fabrication:

This is the second stage in process. It is divided into two parts_

Fabrication of chassis & front show:

It is 1 st part of fabrication. Here metal pipes and sheets bended with the help

of machines, as per the model, then after it is sent to the welding dept. there by

welding, from metal pipes chassis is made and also metal sheets are welded & front

show is prepared.

Fabrication of Gearbox :

This is another part of fabrication. Here fabrication of gearbox id done by CNC

(Computer Numerical Control) & NC (Numerical Control) machine.

Painting:

This is third stage in production procedure. Here this stage is again divided in three

sub stages.

1. PAINT:Here painting show is done there painting is done by spray machine. Many colours

are available.

2. VACCUME:After completing the painting stuff Vacuumed stage comes. Here with the help of a

Vacuumed machine the extra colour is removed from the chassis and front show.

3. HEAT:This is last sub stage of painting dept. here is provided to the chassis and front show.

Here the temperature of furnish is 100 o C.

Assembling:

This is the fourth stage. This is the stage where all the part is assembled with

chassis and front show except body. Here engine and gearbox are assembled and

fixed with chassis & front show. Then other things are also made. The performance

of engine and gearbox is measured before it is assembled.

- 31 -


32/81

This is the most important stage of the production procedure.

Body Fitting:

After assembling the engine, handle etc. the next stage comes Body Fitting.

Here body is fixed with the chassis and front who. But it depends on type of product.

If it is passenger van then seats and roof are fixed. If it is delivery van or pick-up

carrier then only metal sheet body is fixed as per the demand of customer. The driver

seat is also fixed here.

This is the stage where the vehicle is provided a definite look. It is the step

where it takes particular ship. After completion of this stage we can classify thatwhether it is a passenger van, delivery van or pick-up carrier.

Pre-delivery Inspection:

This is the sixth step in production procedure. In this stage pre-delivery

inspection is made. Here the performance of the vehicle is measured whether it is as

per the standard or not. You can say it is a formal stage because after selling it, if

there is any problem with the performance, it affects the reputation of company.

Total Inspection:

This is the seventh and last stage in production process. This stage is same as

6 th stage. But there is only one difference that, in sixth stage only performance

inspections made while here there the total inspection is made. Here every part of

vehicle passes through a keen and deep inspection. If any fault is found then it is sent

to technical dept. but if no-fault is fount then it is sent to the show room with OK

mark. With the completion of these even stages, the production procedure of ATUL

AUTO LIMITED completes

- 32 -


33/81

- 33 -


34/81

INTRODUCTION to MARKETING DEPARTMENT

Marketing management is a business discipline focused on the practical

application of marketing techniques and the management of a firm's marketingresources and activities. Marketing managers are often responsible for influencing

the level, timing, and composition of customer demand in a manner that will achieve

the company's Definition and scope.

There is no universally accepted definition of the term. In part, this is due to

the fact that the role of a marketing manager can vary significantly based on a

business' size, corporate culture, and industry context. For example, in a large

consumer products company, the marketing manager may act as the overall generalmanager of his or her assigned product category or brand with full profit & loss

responsibility. In contrast, a small law firm may have no marketing personnel at all,

requiring the firm's partners to make marketing management decisions on a largely

ad-hoc basis.

In the widely used text Marketing Management (2006), Philip Kotler and

Kevin Lane Keller define marketing management as "the art and science of choosing

target markets and getting, keeping and growing customers through creating,

delivering, and communicating superior customer value."

From this perspective, the scope of marketing management is quite broad.

The implication of such a definition is that any activity or resource the firm uses to

acquire customers and manage the company's relationships with them is within the

purview of marketing management. Additionally, the Kotler and Keller definition

encompasses both the development of new products and services and their delivery

to customers.

Noted marketing expert Regis McKenna expressed a similar viewpoint in his

influential 1991 Harvard Business Review article "Marketing is everything."

McKenna argued that because marketing management encompasses all factors that

influence a company's ability to deliver value to customers; it must be "all-pervasive,

part of everyone's job description, from the receptionists to the Board of Directors."

In Atul auto, the major work of marketing department is promoting product

and minor work of marketing department are after sales service & spares of product.

Marketing department work begins after complication of production because without

- 34 -


35/81

product marketing department cant do marketing once product establish after work

of marketing department are taken place.

Atul auto is doing marketing domestically not globally. The USP of Atul

auto is its PRODUCT. Atul auto has a phenomenal marketing department whichwork on consumer query and give favourable response to consumer.

Atul auto has a good marketing department which gives boosting to its

product with the help of campaign and advertisement. So, with the help of proper

marketing department product reach at zenith. So, with the help of above statement

we can make out that what is the significant of marketing department in the

organization.

Activities and functions:

Marketing management therefore encompasses a wide variety of functions

and activities, although the marketing department itself may be responsible for only

a subset of these. Regardless of the organizational unit of the firm responsible for

managing them, marketing management functions and activities include the

following:

Marketing Research and Analysis:

In order to make fact-based decisions regarding marketing strategy and

design effective, cost-efficient implementation programs, and firms must possess a

detailed, objective understanding of their own business and the market in which they

operate. In analyzing these issues, the discipline of marketing management often

overlaps with the related discipline of strategic planning.

Traditionally, marketing analysis was structured into three areas: Customer

analysis, Company analysis, and Competitor analysis (so-called "3Cs" analysis).

More recently, it has become fashionable in some marketing circles to divide these

further into five "Cs": Customer analysis, Company analysis, Collaborator analysis,

Competitor analysis, and analysis of the industry Context.

The focus of customer analysis is to develop a scheme for market

segmentation, breaking down the market into various constituent groups of customers, which are called customer segments or market segments. Marketing

- 35 -


36/81

managers work to develop detailed profiles of each segment, focusing on any

number of variables that may differ among the segments: demographic,

psychographic, geographic, behavioral, needs-benefit, and other factors may all be

examined. Marketers also attempt to track these segments' perceptions of the various products in the market using tools such as perceptual mapping.

In company analysis, marketers focus on understanding the company's cost

structure and cost position relative to competitors, as well as working to identify a

firm's core competencies and other competitively distinct company resources.

Marketing managers may also work with the accounting department to analyze the

profits the firm is generating from various product lines and customer accounts. The

company may also conduct periodic brand audits to assess the strength of its brands

and sources of brand equity.

The firm's collaborators may also be profiled, which may include various

suppliers, distributors and other channel partners, joint venture partners, and others.

An analysis of complementary products may also be performed if such products

exist.

Marketing management employs various tools from economics and

competitive strategy to analyze the industry context in which the firm operates.

These include Porter's five forces, analysis of strategic groups of competitors, value

chain analysis and others. [7] Depending on the industry, the regulatory context may

also be important to examine in detail.

In Competitor analysis, marketers build detailed profiles of each competitor

in the market, focusing especially on their relative competitive strengths andweaknesses using SWOT analysis. Marketing managers will examine each

competitor's cost structure, sources of profits, resources and competencies,

competitive positioning and product differentiation, degree of vertical integration,

historical responses to industry developments, and other factors.

Marketing management often finds it necessary to invest in research to

collect the data required to perform accurate marketing analysis. As such, they often

conduct market research (alternately marketing research) to obtain this information.

- 36 -


37/81

Marketers employ a variety of techniques to conduct market research, but some of

the more common include:

Qualitative marketing research, such as focus groups

Quantitative marketing research, such as statistical surveys

Experimental techniques such as test markets

Observational techniques such as ethnographic (on-site) observation

Marketing managers may also design and oversee various environmental

scanning and competitive intelligence processes to help identify trends and informthe company's marketing analysis.

- 37 -


38/81


- 38 -

GM

DGM

Sr. Manager

Manager

Zonal Manager

Regional Manager

Sr.Egineer Sr.Officer

Jr.Engineer Jr.officer

Assistance Assistance


39/81

MARKET SEGMENTATION

Market segmentation is an act of identifying and outlining the different group

of buyers. It is combination of two wards i.e. Market refers to the buyers or

customers and segmentation refers to the act of dividing them. The basic purpose

to segment market is to survey every customer effectively.

The company ATUL AUTO LIMITED has segmented their market in to two;

Urban Market.

Rural Market.

In urban market there is more demand for load currier that passenger van while

in rural market there is more demand for passenger van than load currier.

MARKETING STRATEGY

Once the company has obtained an adequate understanding of the customer

base and its own competitive position in the industry, marketing managers are able

to make key strategic decisions and develop a marketing strategy designed to

maximize the revenues and profits of the firm. The selected strategy may aim for any

of a variety of specific objectives, including optimizing short-term unit margins,

revenue growth, market share, long-term profitability, or other goals.

Marketing strategy of Atul auto is quite bizarre then the other private players

they are not only put emphasis on promotion but also spare and after sales service.

Atul auto marketing strategy is completely in boundary they are only doing

marketing in domestically area. So Atul auto is not following current trend of

marketing.

Atul auto put emphasis on good and maintenance less product. Its product

its USP and feature of Atul auto which is also bizarre then the other private players.

- 39 -


40/81

Atul auto product price is also less then the other private players. Atul auto also give

hard competition to their competitors with the help of their Product, Price, Features,

Spares and after sales service.

Marketing department of Atul auto is very brainchild. Marketing department

is also doing campaign as well as advertisement in Newspaper and magazine.

Marketing department is one of the most significant departments in Atul auto and

with the help of proper marketing strategy Atul auto product reach at zenith.

Marketing department has to develop a distinct marketing strategy which

give phenomenal success to companys product with in a desirable time period.

Marketing strategy put emphasis on not only excellent but also juxtaposes parts of

product.

- 40 -


41/81

- 41 -


42/81

INTRODUTION TO HRM

Human resource department is concerned with all aspect of managing of

human resources of an organization. Especially personnel management involves

determining the organization resources need and recruiting and selecting the best

available employees.

The company has taken effective steps for recruiting of key personnel

required by the provision of section-217 of the companys Act 1956 because without

the help of effective work force company cant progress.

The Human resource department is concerned with recruitment, selection,

training, job-description, promotion, transfer, time keeping system etc. this is the

functions of personnel department. The human resource department handles the area

of recruitment arranging a planning of manpower, training & development program,

job rotation and other activities. It is primarily concerned with men power resources

or inputs. It is planning, organization, staffing, directing and controlling manpower

in order to contribute individual and social goal to the business organization

Atul Auto Limited has given more and more importance to personneldepartment. As a result the personnel department of the company is efficient one. All

the employees are satisfied with the company. In Atul auto the work of HR

department is multi-tasking as because rest of department work is within the

boundary but the work of HR department is boundary less in Atul auto. All

department work is related to their department but the work of HR department is not

related to his department they have to handle many kind of things E.g. Wages,

Salary, Dispute, Grievances, HR planning, Manpower Search, Induction, Welfare,Training, Development, Selection etc.

If employees are not satisfied with employee welfare & development they

cannot give excellent result in terms of production, and the work of HR department

is to satisfy the company employees and handle the dispute and grievances in such

way that they can give superb output to company. So, from the above matter we

come to know that the work of HR department is versatile and we can surely says

that the HR department folks are bona fide backbone of any company.

- 42 -


43/81

1. Working Hours:

9:00 am to 1:00 pm

1:00 pm to 1:30 pm break

1:30 pm to 5:30 pm

Wednesday is off-day for production and personnel department. While

Sunday is off for Marketing and finance Department.

During my industrial training period at Atul Auto Limited, I found that there

are limited staffs and each person working in this unit is quite satisfied with their

work and with the company.

- 43 -


44/81


- 44 -

CMD

JMD

Manager (HR)

Sr. Officer

Jr. Officer

Bus & Car Driver

Time Keeper Receptionist Peon Guard Other Employees


45/81

- 45 -


46/81

INTRODUCTION

Financial management is that managerial activity which is concerned with

the planning and controlling of the firms financial resources. Through out it was

branch of economics till 1890. As a separate knowledge of its own and draws

heavily on economics for its theoretical concepts even today. Undoubtedly money

occupies a key position in the capitalistic economy of the modern age one of the

most important function of the top management is to raise finance at a right quantity

and also to use it most effectively in fact this function constitutes the care of

financial management.

Money is the like blood of modern business. Money is requires to purchaseexpansive machine and also for day to day expanses on raw-materials labour

operational and administrative needs of business execution of expansion and

modernization programs are not possible without adequate finance.

Financial management is concerned mainly with such matter as how of

business corporation raises its finance and how it market use of that.

-Hoagland

ATUL AUTO LIMITED understands the importance of financialmanagement and due affection is given to all financial activities and decisions

regarding financial matter are taken with almost care. Today the company enjoys

very sound financial position thanks to the directors of the company who has taken

right decision with proper forecasting. The industries have a separated department

which taken care of all the financial matters.

Nowadays, to finance business; company has to maintain the financial status

at the required level and also has to show financial stability of the company and toget finance company has to show cash-flow, important ratios, working capital

management etc.

In Atul Auto Limited finance department headed by single person and

authority passes from top to bottom, in a nutshell it is line organization and chief

financial officer hold the top position of the finance department. The chart given on

next page shows the line authority.

- 46 -


47/81

ORGANIZATION CHART

- 47 -

Board of Directors

General Manager

Dept. General Manager

Manager

Sr.Officer

Jr.Officer

Sr.Assistant

Jr.Officer

Clerk


48/81

SOURCES OF FINANCE

Finance is the life blood of business. Funds have to be procedure from

different sources such as rising of capital through new issues, bank borrowings, term

loans from finance institutions, sales of debentures and so on. Business house have

sell on credit and on the other hand it has to pay expenses of business in cash. There

are many different ways to procure shot term and long term loans.

Atul Auto Ltd. has adopted very simple way to procure both short and long

term funds.

LONG TERM FUNDS:

For long term funds, Atul Auto Ltd. depends on the retained profits, long

term loan from bank and mainly on the equity capital.

SHORT TERM FUNDS:

The objective behind procurement of short term fund is to meet day-to-day

business needs as working capital. Short term fund is more important as far as day-

to-day business in concern.

Atul Auto Ltd. satisfies its needs of short term funds through short term loans

from bank and other financial instruction .

CAPITAL BUDGETING

Capital budgeting is a process of making decision regarding loan term

investment infixed asset, such as land building, machinery or furniture, which is not

meant for sales. A capital expenditure involves a huge investment in fixed assets.

Capital budgeting decisions are to paramount importance in financial

decision making. The system of capital budgeting is likely to produce benefits over a

period of time longer than one year. These benefits may be either in the form of

increased revenues or reduces costs. There are various techniques or proposals, Atul

Auto Ltd. has chosen pay back method for capital budgeting purpose implementing

expansion loan. This expansion loan includes setting up additional capacity to

manufacture diesel three wheelers Auto rickshaw; pick up van and CNG auto

rickshaw.

- 48 -


49/81

MANAGEMENT OF WORKING CAPITAL

Working capital is defined as the excess of current assets over current

liabilities. Working capital is that part of capital which is required to meet the day-

to-day needs in running the business. It is also known as revolving or circulating

capital.

Working capital management is significant in financial management due to

the fact that it plays a pivotal role in keeping the wheels of business enterpriserunning. Shortage of funds for working capital has caused many businesses to fail or

has retarded their growth. Lack of efficient and effective utilization of working

capital leads to earn low rate of return on capital employed or even compels to

sustain losses.

Working capital= current assets current liabilities

MANAGEMENT OF CASH

Cash management is one of the key areas of working capital management.Cash is the common denominator to which all current assets can be reduced because

the other major liquid assets, that is, receivables and inventory get eventually

converted into cash. This underlines the significance of cash management.

The term cash with reference to cash management is used in two senses. In a

narrow sense it is used broadly to cover and generally accepted equivalents of cash,

such as cheques, drafts and demand deposits in banks. The broad view of cash also

includes near cash assets, such as marketable securities and time deposits in banks.

FINANCIAL DEPARTMENT AT GLANCE

LONG TERM FUNDS

- State Bank of India

-HDFC Bank

- 49 -


50/81

- The Laxmivilas Bank Ltd.

- Citizens Co-Operative Bank Ltd.

AUDITORS: -

M/S Maharishi and Co. (C.A. Jamnagar)

ACCOUNTING SYSTEM:

-Double Entry System

ACCOUNTING PERIOD:-1 st April to 31 st March (financial year)

- 50 -


51/81

FINANCIAL ANALYSIS

Financial analysis is the process of identifying the financial strengths andweaknesses of the firm and establishing relationship between the items of the

balance sheet and profit & loss account.

Financial ratio analysis is the calculation and comparison of ratios, which

are derived from the information in a companys financial statements. The level and

historical trends of these ratios can be used to make inferences about a companys

financial condition, its operations and attractiveness as an investment. The

information in the statements is used by trade creditors, to identify the firmsability to meet their claims. I.e. Liquidity position of the company.

Investors, to know about the present and future profitability of the

company and its financial structure.

Management in every aspect of the f inancial analysis . I t is the

responsibility of the management to maintain sound financial condition in

the company.

RATIO ANALYSISThe term ratio refers to the numerical and quantitative relationship between

two or more variables. This relation can be exposed as

Percentages

Fractions

Proportion of numbers

Ratio analysis is defined as the systematic use of the ratio to interpret the financial

statements. So that the strengths and weaknesses of a firm, as well as its historical

performance and current financial condition can be determined. Ratio reflects a quantitative

relationship helps to form a quantitative judgment.

BASIS OR STANDARDS OF COMPARISON

Ratios are relative figures reflecting the relation between variables. They

enable analyst to draw conclusions regarding financial operations. They use of ratios

- 51 -


52/81

as a tool of financial analysis involves the comparison with related facts. This is the

basis of ratio analysis. The basis of ratio analysis is of four types.

Past ratios, calculated from past financial statements of the firm.Compe ti to rs r at io , o f t he some mos t p rogres sive and success fu l

competitor firm at the same point of time.

Industry ratio, the industry ratios to which the firm belongs to objected ratios,

ratios of the future developed from the projected or pro forma financial statements

- 52 -


53/81

INTERPRETATION OF THE RATIOS

The interpretation of ratios is an important factor. The inherent limitations of

ratio analysis should be kept in mind while interpreting them. The impact of factorssuch as price level changes, change in accounting policies, window dressing etc.,

should also be kept in mind when attempting to interpret ratios. The interpretation of

ratios can be made in the following ways.

Single absolute ratio

Group of ratios

Historical comparison

Projected ratios

Inter-firm comparison

GUIDELINES OR PRECAUTIONS FOR USE OF RATIOS

The calculation of ratios may not be a difficult task but their use is not easy.

Following guidelines or factors may be kept in mind while interpreting various ratios

is

Accuracy of financial statements

Objective or purpose of analysis

Selection of ratios

Use of standards

Caliber of the analysis

- 53 -


54/81

IMPORTANCE OF RATIO ANALYSIS LIMITATION OF RATIO ANALYSIS Aid to measure general efficiency

Aid to measure financial solvency Aid in forecasting and planning

Facilitate decision making

Aid in corrective action

Aid in intra-firm comparison

Act as a good communication

Evaluation of efficiency

Effective tool

Differences in definitions

Limitations of accounting records Lack of proper standards

No allowances for price level

changes

Changes in accounting procedures

Quantitative factors are ignored

Limited use of single ratio

Background is over looked

Limited use

Personal bias

CALCULATIONS OF RATIOS:-

(1) LIQUIDITY RATIOS

- 54 -


55/81

Liquidity refers to the ability of a concern to meet its current obligations as

&when there becomes due. The short term obligations of a firm can be met only

when there are sufficient liquid assets. The short term obligations are met by

realizing amounts from current, floating (or) circulating assets The current assets

should either be calculated liquid (or) near liquidity. They should be convertible into

cash for paying obligations of short term nature. The sufficiency (or) insufficiency of

current assets should be assessed by comparing them with short-term current

liabilities. If current assets can pay off current liabilities, then liquidity position

will be satisfactory.

To measure the liquidity of a firm the following ratios can be calculated

Current ratio

Quick (or) Acid-test (or) Liquid ratio

(1) CURRENT RATIO

Current ratio may be defines as the relation between current assets and

current liabilities, this ratio also known as working capital ratio is a measure of

general liquidity and is most widely used to make the analysis of a short term

financial position or liquidity of a firm Current assets

Current assetsCurrent ratio =Current liabilities

Current Ratio

- 55 -


56/81

Year Current Assets Current Liabilities Ratio2008 103426026 81625208 1.272009 307864931 112242318 2.742010 322448353 150933025 2.14

2011 457706038 235884643 1.942012 473641804 332259667 1.43

Interpretation

A high current ratio is considered to be a sign of Financial Strength.

Indian Bankers norm is 1.33. International norm is 2. From the above table it can be

referred that in 2008, ratio was 1.27 which is as per Indian bankers norm. So its

good sign of company. On the other side in 2009, ratio was 2.74 which is as per

international norm. So it shows more strength of the company. Thus company isdoing well as per its current ratio. But due to increase the liabilities the current ratio

is decreasing 1.43 in 2012 compare to 2009.

- 56 -


57/81

(2)Quick ratio:-

Quick ratio is a test of liquidity than the current ratio. The term liquidity

refers to the ability of a firm to pay its short-term obligation as & when they become

due. Quick ratio may be defined as the relationship between quick or liquid assetsand current liabilities. An asset is said to be liquid if it is converted into cash within a

short period without loss of value.

Quick or liquid assetsQuick ratio =

Current liabilities

Quick RatioYear Quick Assets Current Liabilities Ratio2008 119372802 81625208 1.462009 137069030 112242318 1.222010 136710143 150933025 0.912011 141300000 235884643 0.602012 247200000 332259667 0.74

- 57 -


58/81

Interpretation

Higher the ratio the better it is for business. Inventories are excluded from

this ratio as they are least liquid of all current assets. From the above table it can be

denoted that in the year of 2010, quick ratio was less than 1 i.e. 0.91. And before that

in 2008 it increased to 1.46. But in 2009, it decreased to 1.22. Because of increasing

in inventories and decreasing in total current asset. In 2008, quick ratio was 1.46

which shows good position of company and this ratio excludes inventories. It

increases because of decreasing in inventories, total current asset and total current

liabilities. In 2012 the companys position is

(2) ACTIVITY RATIO:-

Funds are invested in various assets in business to make sales and earn

profits. The efficiency with which assets are managed directly affects the volume of

sales. An activity ratio measures the efficiency (or) effectiveness with which a firm

manages its resources (or) assets. These ratios are also called turn over ratios

because they indicate the speed with which assets are converted or turned over into

sales.

Inventory turnover ratio

Debtor turnover ratio

Creditor Turnover Ratio

Average Collection Period

Total assets turnover ratio

Fixed assets turnover ratio

(A) Inventory turnover ratio:-

Inventory turnover ratio indicates the no. of times the stock has been turned

over the period and evaluates the efficiency with which a firm is able to manage its

inventory. It indicates whether the inventory is efficiently used or not. It is also

known as stock turnover ratio. This can be calculated by dividing the sales by

average inventory.

- 58 -


59/81

A ratio showing how many times a companys inventory is sold and replaced

over a period.

Net salesITR =

Inventory

Inventory Turnover RatioYear Net Sales Inventory Ratio2008 803977740 193604272 4.15

2009 1255754654 176759304 7.102010 1299362628 185738210 7.002011 2020370869 191738805 10.542012 2988220553 298249831 10.02

Interpretation

Inventory turnover ratio shows how efficiently inventory of the company use.

In above chart in 2008 and 2009 ratio was 4.15 and 7.10 respectively. And in 2010 it

was decreasing slightly and then after it was increasing. It indicates high efficient

use of inventory of the company.

- 59 -


60/81

(B) Debtors Turnover ratio:-

Debtors turnover ratio or accounts receivable turnover ratio indicates the

velocity of debt collection of a firm. In simple words it indicates the number of times

average debtors (receivable) are turned over during a year.

Net Credit SalesDebtors turnover ratio =

Average trade debtors

Debtors Turnover RatioYear Net Credit Sales Average Trade Debtors Ratio2008 812573360 60639803 13.402009 1175237690 37416036 31.412010 1170980832 39176341 29.892011 1633971788 40176341 40.672012 2980529376 57439379 51.89

Interpretation

Higher the Debtor Turnover Ratio higher the credit management efficiency

of the firm and the company is able to convert its receivables into cash. In 2008,

ratio was 13.40. And increase year by year except 2010 due to decrease in net sales.

- 60 -


61/81

Increasing in average debtors which show efficiency of the company to convert its

receivables into cash.

(C)Average Collection Period:-It represents the average no. of days during which debtors are recovered/ this

average collection period can be calculated by dividing months or days in a year by

debtors turnover ratio.

DaysAverage Collection Period=

Debtors Turnover Ratio

Average Collection PeriodYear Days Debtors Turnover Ratio Ratio2008 360 13.40 272009 360 31.41 112010 360 29.89 122011 360 40.67 92012 360 51.89 7

Interpretation

In 2008, collection period was 27 days while in 2012; it decreased to 7 days because

of increasing in debtors turnover ratio. Less collection period is good for company.

- 61 -


62/81

(D) Creditors Turnover Ratio:-This is also known as accounts payable or creditors velocity. This ratio

establishes a relationship between net credit purchases and average trade creditors.

The main purpose of computing this ratio is to determine the efficiency of the firm

with which the creditors are managed. The ratio is computed by dividing the net

credit purchase by average trade creditors. In bank net credit purchase is not

available it also includes creditors, interest payable, and bills payable. This ratio

formula may be as under:

Creditors Turnover RatioYear Credit Purchase Average Trade Creditors Ratio2008 597945593 49389388 12.102009 918555725 85507917 10.792010 884718293 88865933 9.962011 1510569270 109093204 13.972012 2374989215 155108561 15.31

Interpretation

Here the creditors turnover ratio is high in 2008 but, after than it wasdecrease in 2009 and 2010 ratio was 10.79 & 9.96 respectively. After than 2011 and

- 62 -


63/81

2012 there is continues improvement ratio was 13.97 and 15.31 respectively. It

shows good image of the company.

(E) Total Assets Turnover Ratio:-

A financial ratio of net sales to fixed assets. The fixed assets turnover ratio

measures a companys ability to generate net sales from fixed asset investments

specifically property, plant and equipment (PP&E) net of depreciation. A higher

fixed asset turnover ratio shows that the company has been more effective in using

the investment in fixed assets to generate revenues.

Net salesTotal assets turnover ratio =

Net Property

Total Assets Turnover RatioYear Net Sales Net Property Ratio2008 803977740 266700000 3.012009 1255754654 304800000 4.122010 1299362628 336500000 3.862011 2020370869 403600000 5.012012 2988220553 560900000 5.33

- 63 -


64/81

Interpretation

The ratio indicates the total assets in the form of profits. From the above

graph it can be interpreted that in 2008 and 2009, ratio was 3.01 and 4.12

respectively. and then decreased to 3.86 in 2010 because of increasing in total assets.

And then after increasing the ratio in 2011 and 2012, it was increasing 5.01 and 5.33

respectively. It shows the positive condition of the company.

(F)Fixed Assets Turnover Ratio:-

It is also known as sales to fixed assets ratio. This ratio measures the

efficiency and profit capacity of the firm. Higher the ratio, greater is the intensive

utilization of fixed assets. Lower ratio means under utilization of fixed assets.

Cost of SalesFixed assets turnover ratio =

Net fixed assets

Fixed Assets Turnover RatioYear Cost Of Sales Net Fixed Assets Ratio2008 791277740 398000000 1.982009 1251157654 447800000 2.792010 1253962628 428200000 2.93

- 64 -


65/81

2011 1926070869 424600000 4.542012 2832320553 415400000 6.82

Interpretation

High ratio means higher efficiency & vice versa. This ratio shows the firms

ability in generating sales from all financial resources committed to total assets. The

ratio indicates the account of one rupee investment in fixed assets.

As per above table, in 2008, fixed asset turnover ratio was 1.98 which

indicates high efficiency in asset utilization of company. After than it was increased

till 2012. It shows the high strength of the company.

3) PROFITABILITY RATIOS:-

The primary objectives of business undertaking are to earn profits. Because

profit is the engine, that drives the business enterprise.

Net Profit Ratio Gross Profit Ratio

Operating Profit Ratio

Return on capital employed or return on investment

EPS

(A) Net Profit Ratio:-

- 65 -


66/81

Net profit ratio establishes a relationship between net profit (after tax) and

sales and indicates the efficiency of the management in manufacturing, selling

administrative and other activities of the firm.

It also indicates the firms capacity to face adverse economic conditions suchas price competitors, low demand etc... Obviously higher the ratio, the better is the

profitability.

Net Profit after TaxNet Profit ratio =

Net Sales

Net Profit RatioYear Net Profit After Tax Net Sales Ratio2008 12700000 803977740 0.022009 46000000 1255754654 0.042010 45400000 1299362628 0.032011 94300000 2020370869 0.052012 155900000 2988220553 0.05

Interpretation

This ratio measures the overall efficiency of production, administration,

selling, financing, pricing & tax management. High net profit ratio will help the firm

service in the fall of net sales, rise in cost of production or declining demand. In year

- 66 -


67/81

of 2008 ratio was 0.02 and increases year by year except 2010 profit ratio was 0.03.

So company has to make positive net profit after tax so that profit ratio can be in

positive terms.

(B) Gross Profit Ratio:-

The basis components for the calculation of gross profit ratio are gross profit

and net sales. Net sales mean that sale minus sales return. Gross profit would be the

difference between net sales and cost of goods sold. Cost of goods sold in the case of

a trading concern would be equal to opening stock plus purchase, minus closing

stock plus all direct expenses relating to purchase. In the case of manufacturing

concern, it would be equal to the sum of the cost of raw materials, wages, direct

expanses and all manufacturing expanses. In other words, generally the expanses

charged to profit and loss account or operating expenses are excluded from the

calculation of cost of goods sold.

Gross ProfitGross Profit ratio =

Net Sales

Gross Profit RatioYear Gross Profit Net Sales Ratio2008 68600000 803977740 0.092009 52600000 1255754654 0.042010 138200000 1299362628 0.112011 358900000 2020370869 0.182012 499200000 2988220553 0.17

- 67 -


68/81

Interpretation

High gross profit ratio is indicates high efficiency of the company. In above

chart we show in 2008 gross profit ratio was 0.09. And then after in 2012 it is 0.17.

It indicates high profit ability of the company.

(C) OPERATING PROFIT RATIO:-

Operating ratio establishes the relationship between cost of goods sold and

other operating expenses on the one hand and the sales on the other.

Operating CostOperating Profit ratio =

Net Sales

Operating Profit RatioYear Operating Cost Net Sales Ratio2008 55328459 803977740 0.072009 56886941 1255754654 0.052010 142041367 1299362628 0.112011 200500000 2020370869 0.102012 281400000 2988220553 0.09

- 68 -


69/81

Interpretation

In 2008, operating ratio was 0.07. In 2009, it decreased to 0.05. And in 2010,

ratio was increase 0.11.but after than slightly decrease in2011 and 2012 ratio was

0.10 and 0.09 respectively. Overall performance of the company is good.

(D)EARNINGS PER SHARE

Earnings per share is a small verification of return of equity and is calculated

by dividing the net profits earned by the company and those profits after taxes and

preference dividend by total no. of equity shares.

Net profit after taxEarnings per share =

Number of Equity shares

- 69 -


70/81

The Earnings per share is a good measure of profitability when compared

with EPS of similar other components (or) companies, it gives a view of the

comparative earnings of a firm.

Earnings Per ShareYear Net Profit after Tax Number of Equity Shares Ratio2008 12700000 5351520 2.372009 46000000 5851520 7.862010 45400000 5851520 7.762011 94300000 6084404 15.502012 155900000 7547285 20.66

Interpretation

Earnings per share ratio are used to find out the return that the shareholders

earn from their shares. After charging depreciation and after payment of tax, the

remaining amount will be distributed to all the shareholders. In 2008 and 2009, EPS

was 2.37 and 7.86 respectively, while in 2010, it was 7.76 because of decreasing in

net profit after tax. In the year of 2008 and 2009, so company should make positive

profit.

(E)RETURN ON INVESTMENTS

- 70 -


71/81

Return on share holders investment, popularly known as Return on

investments (or) return on share holders or proprietors funds is the relationship

between net profit (after interest and tax) and the proprietors funds.

Net profit (after interest andtax)Return on shareholders investment =

Shareholders fund

The ratio is generally calculated as percentages by multiplying the abovewith 100.

Return on Shareholders InvestmentYear Net Profit (after Interest

and Tax) Shareholders Funds Ratio

2008 12700000 334257486 0.042009 4600000 304772201 0.152010 45400000 336466179 0.132011 94300000 403576495 0.232012 155900000 560861149 0.28

Interpretation

- 71 -


72/81

Return on investment ratio was 0.04 in 2008. In 2009, ratio was 0.15. While

in 2010 it was decrease 0.13 then after it continues increase in year 2011 and 2012

was ratio 0.23 and 0.28 respectively. It is good for the company.

4) LEVERAGE RATIOS

The leverage or solvency ratio refers to the ability of a concern to meet its

long term obligations. Accordingly, long term solvency ratios indicate firms ability

to meet the fixed interest and costs and repayment schedules associated with its long

term borrowings.

The ratios indicate the degree to which the activities of a firm are supported

by creditors funds as opposed to owners. The relationship of owners equity to

borrowed funds is an important indicator of financial strength. The debt requires

fixed interest payments and repayment of the loan and legal action can be taken if

any amounts due are not paid at the appointed time. A relatively high proportion of

funds contributed by the owners indicate a cushion (surplus) which shields creditors

against possible losses from default in payment.

Debt-equity ratio

Debt-asset ratio

Proprietary ratio

(A)DEBT-EQUITY RATIO:

The relationship describing the lender contribution for each rupee of the

owners contribution is called DEBT-EQUITY RATIO.

This ratio indicates the extent to which debt is covered by shareholders

funds. It reflects the relative position of the equity holders and the lenders andindicates the companys policy on the mix of capital funds.

DebtDebt-Equity ratio =

Equity

Lower the debt-equity ratio higher the protection for company creditors

- 72 -


73/81

Debt-Equity RatioYear Debt Equity Ratio2008 39619066 53515200 0.742009 35213006 58515200 0.60

2010 45139676 58515200 0.772011 54070115 60844040 0.892012 60808643 75472850 0.81

Interpretation

Lower the debt-equity ratio higher the protection for company creditors. In

2008, Debt-Equity ratio was 0.74, which was good for company creditors. In 2009,

ratio was decreased so its good for creditors. After that year in 2010, it was

increased by 0.77 but it was still higher than 0.74. in 2011, ratio was goes up to 0.89which was not good sigh towards company creditors. Finally in 2012, ratio goes

down to 0.81 which was good towards company creditors. An even lower ratio

would have been better for the creditors.

(B)DEBT-ASSET RATIO:

It measures the extent to which borrowed funds support the assets of a

company.

- 73 -


74/81

DebtDebt-Asset ratio =

Asset

Debt-asset RatioYear Debt Asset Ratio2008 39619066 883700000 0.042009 35213006 778600000 0.052010 45139676 773600000 0.062011 54070115 746500000 0.072012 60808643 966200000 0.06

Interpretation

In 2008, Debt- Asset ratio was 0.04 which was increased to 0.05 in 2009

because of increased in total debt and total asset. In 2010, it was goes up to 0.06

because of increasing in total debt and it was not good strength of company. In 2011,

it was again goes up to 0.07 and it was not good strength of company. In 2012 it was

goes down to 0.06 and it was good strength of company. Here, less debt and high

asset shows better strength of the company.

(C)PROPRIETARY RATIO:

- 74 -


75/81

This ratio states relationship between share capital and total assets.

Proprietors equity represents equity share capital, preference share capital, reserves,

and surplus. The latter ratio is also called capital employed to total assets.

This ratio establishes relationship between share holders funds to total assets

of the firm.

Shareholders fundsProprietary ratio =

Total assets

Proprietary RatioYear Shareholders Fund Total Assets Ratio2008 334257486 883700000 0.382009 304772201 778600000 0.392010 336466179 773600000 0.432011 403576495 746500000 0.54

2012 560861149 966200000 0.58

Interpretation

- 75 -


76/81

The proprietary ratio establishes the relationship between shareholders funds

to total assets. It determines the long-term solvency of the firm. This ratio indicates

the extent to which the assets of the company can be lost without affecting the

interest of the company. Total assets, includes fixed and current assets. The fixedassets are reduced because of the depreciation and there are no major increments in

the fixed assets.

From the above table it can be referred that in 2008, ratio was declined and

then it increased year to year. In 2008, proprietary ratio was 0.38 which was good. In

2009, it was increase to 0.39 because of less increased in equity shareholders fund

and high increased in total asset. In 2010, proprietary ratio was 0.43 because of

increased in shareholders fund and decreased in total asset. In 2011, proprietary ratiowas 0.54 because of increase in equity share holders fund and decrease in total

assets. In 2012 ratio was 0.58 because of increase in equity share holders funds and

total assets.

FUTURE PLANS

Planning is in integral part of every organization. Planning means what to do,

when to do, how to-do, and who to do it. It is the estimation and forecasting of the

risk factors along with better development prospects in future. Thus each and every

company plans for its expansion and development in future

In the future, we will continue following the footsteps of our founder and

develop more innovative, environment-friendly and practical automobile vehicles

considering changes in market trends

Here are few vehicles which are under planning: Micro Commercial Vehicle to carry 750 Kg. payloads

Range of Electric Commercial Vehicles

4-Wheeler One Tonner LCV

- 76 -


77/81

FINDING

In all five year the current ratio is higher with compare to the standard ratio

but if we will compare the component with Inventory turnover ratio than we

can come to know that money is blocked in stock and finished goods whichis not converted into sale. So we are losing the opportunity cost.

If we will take the reference of quick ratio than we can come to know that the

much more money is blocked in Inventory rather than the cash, bank or

marketable security.

Debtors turnover ratio increasing it has given negative impact on stoketurnover ratio.

Current ratio is decrease compare to last 3 years due to liabilities increase.

The company has not issued debenture so the leverage benefit has not beenreceivable by the company.

- 77 -


78/81

All over the company has good financial position.

Most promising SME in Auto & engineering by CNBC-TV18-ICICI Bank

Emerging India Awards 2012, on March 22, 2012 at Mumbai.

Company incurred a capital expenditure of ` 846 lacs (` 425 lacs in the

previous year). The entire capital expenditure was funded out of internal

accruals.

Company had liquid assets of ` 4,926 lacs as against ` 2,888 lacs at the end of

previous year 2010-11. The funds have been invested in liquid mutual funds.

Equity share aggregating to an amount of ` 439 lacs on Right Basis in the

ratio of 1 Equity share for every 4 Equity shares on 25th October, 2011.

The declaration and payment of dividends on Equity shares is recommended

by the Board of Directors and approved by the shareholders of the company.

The amount paid as dividend in past is not indicative of companys dividend

policy in future.

Company proposes to transfer ` 156 lacs (10% of the net profit for the year)

to the general Reserve. An amount of ` 3,696 lacs are proposed to be retained

in the profit and loss account.

- 78 -


79/81

RECOMMENDATIONS

Atul Auto Ltd with the help of other Atul Group of companies has

established strong business house. The functioning and management of Atul Auto

Ltd. is very good

Being a student just standing on the threshold of studies of management asdiscipline. But considering this as an initiative give out my view mention some of the suggestion as per my knowledge

.Some of the suggestions is under:

The capital investment of Atul Auto Ltd. is less compared to its competitive

industries Atul Auto Ltd. can explore more my investing more and gettinghigh returns.

Atul Auto Ltd. must also increase its activiti

Documents

HARDIK THAKAR.doc