Usha Martin .

A PROJECT REPORT ON SUMMER TRAINING AT USHA MARTIN LTD. TATISILWAI, RANCHI, JHARKHAND.[Sub. –Ascertainment of Working Capital requirements for the Financial Year 2012-13] BY: MANOJ KUMAR PRAMANIK. REG. NO.:CUJ/1/2009/MBA/14. CENTRE FOR BUSINESS ADMINISTRATION. CENTRAL UNIVERSITY OF JHARKHAND. 1 A Report on ASCERTAINMENT OF WORKING CAPITAL REQUIREMENTS FOR THE YEAR 2012-13 OF USHA MARTIN LTD. - RANCHI UNIT By MANOJ KUMAR PRAMANIK CUJ/1/2009/MBA/14 A Report submitted in partial fulfilment of the requirements of MBA program of CUJ, Ranchi Submitted to CA Rajiv Singh Deputy Manager (Accounts and Commercial) Usha Martin Limited, Ranchi 2 DECLARATI ON I hereby REPORT declare that this project report entitled “A PROJECT ON ASCERTAINMENT OF WORKING CAPITAL REQUAIREMENT OF USHA MARTIN LTD. this project is a result of my own effort and it has not been submitted to any other university or institute for the award of any professional degree. Date : Place: (Signature) . I also declared that the best of my knowledge. FOR THE FINANCIAL YEAR 2012-13” have been prepared by me in partial fulfilment of the requirement for the award of MBA. 3 . Enrol No: CUJ/01/2009/MBA/14 . Ranchi . Tatisilwai. and the annual reports of the Usha Martin. . No portion of this project report is pu blished or submitted to any other University or organization. This certificate is being issue d for academic purpose. the Internet. student of the Central University of Jharkhand of MBA Program has undertaken the project titled “A Report on ASCERTAINMENT OF WORKING CAPITAL REQUIREMENTS FOR THE YEAR 2012-13 OF USHA MARTIN LTD.RANCHI UNIT” under my guidance. He has completed his project satisfactorily. This study was done for the fulfilment of the requirements of Summer Training Project of the MBA Program. The analysis and compilation was the original work of the student based on secondary data. CASingh Rajiv Deputy Manager (Accounts and Commercial) Usha Martin Limited. The information in the report is genuine to the best of his knowledge and has been collected from reliable sources. Manoj Kumar Pramanik.Certificate of Guide This is to certify that Mr. 4 . TAPOSH GHOSHAL. So. This project would have been a distant dream without the grace of almighty. Usha Martin who has given me opportunity to do my internship in this organization. first and foremost. RAJIV SINGH.ACKNOWLEDGEME NT There are times when one feels a sense of accomplishment combined with a sense of gratitude. Prof.. Dean of School of Management Sciences. Writing the acknowledgement page in this project is one among them. Finance Department. I would like to say thankful to Mr. who provided me a golden chance for Summer Training and my especial thanks to Mr. Usha Martin Ltd. . without which my project would not have seen the light of the day. I. profusely thank god for his blessings and grace. for his guidance and appreciative support in spite of busy schedule at Usha Martin Limited. ARVIND KUMAR HR Department. Central University of Jharkhand. I would like to say thank to HOD sir. 5 . This 1 month training procedure made us understand the working culture of the business organization.PREFAC E Summer training is essential to get the practical orientation of theoretical knowledge and analysis of the business realities at the corporate level. The summer training in this reputed Company had been a challenging and exciting experience which brought us closer to the business organization. . TATISILWAI RANCHI. JHARKHAND. My topic is Ascertainment of Working Capital Requirement of Usha Martin Limited for the Financial Year 2012-13(Wire Ropes and Speciality Product Division) in USHA MARTIN LIMITED. 6 . . therefore.EXECUTIVE SUMMARY The basic idea behind selection of this topic is mainly due to its nature and importance in overall financial management of any organization. One of the most important areas in the day to day manageme nt of the firm is the ascertainment of working capital. Primary function o f financial management is not only procurement of fund but also their effective use with the objective maximizing the owner’s wealth. The allocation of funds. is an important function of financial management. Working capital Ascertainment is the functional area of finance that covers all the current accounts of the firm. It is concerned with management of the level of individual current assets as well as the management of total working capital. 7 . Research Methodology . Bibliography 39-47 48-72 73 74 75 8 . 6.Shareholding Pattern . 4. P/L Account & Working Capital Analysis . SWOT Analysis 11. Company Profile Board of Directors Organizational Structure Products Vision. 9.Cash Management . 3. Financial Analysis .Ascertaining of Working Capital 16.Objective of the Study .Working Capital Management 15. Mission and Quality Policy Milestone Manufacturing Process Best Practices at Usha Martin Corporate Social Responsibility PAGE NUMBER 9-11 11 12 13 14 15-17 17 18-21 21 22-24 24 25-31 31-39 10. Core Competence 12. 2. 5.About Working Capital .Analysis of P/L Account . Recommendation 17. 7. Ascertaining of Working Capital .Problem Formulation . 8.TABLE OF CONTENTS CONTENTS 1. Achievement 13.Working Capital Cycle .Debtors Management . Conclusions and My Learning 18.Inventory Management 14. and flexi and fancy fence applications. The company was founded in 1961 and is based in Kolkata. and bright bars. including wire drawing and allied machines. COMPANY PROFILE:- Usha Martin Limited. today the Usha Martin Group is a USD 1 billion conglomerate with a global presence. automobile. and wire and s trands for power. suspended roof structure. wire ropes. In addition. pig iron. mooring lines. as well as slings with mechanical splicing with ferrule and steel sleeves. such as steel wires. cords. Ush a Martin Limited is a part of the Usha Martin Group. structural. Jharkhand as a wire rope manufacturing company. multi legged slings. tower guy strands. and fine and conveyor cords. wire and wire ropes products. titan oil field. The company offers steel wire rods. India. and binding/stationary applications. elevator. It provides coil and bar products for wire rods and straight length applications. as well as jelly filled telecommun ication cables. and allied products. and architectural applications. . crane. it provides general engineering slings. engineering. The group has set new standards in the manufacture of wire rods. steel wires. together with its subsidiaries. as well as track ropes for bulk material handling systems. stainless slings. strands. bright bars. cable laid slings. boom pendants. and hand spliced slings. deco rative slings.1. construction. structural slings. Inception bu siness of Started in 1961 in Ranchi. mining. pendant lines. general engineering. engages in the manufacture and sale of steel products in India and internationally. The company also offers structural products for suspension bridges. sugar slings. flemish eye slings. ropes for aerial. billets. cable stayed bridges. rolled products. grommet slings. shipping. speciality wires. and related accessories. fishing. conveyor cord. With continuous growth in both the domestic and international markets.wire ropes. strand. wire drawing and cable machinery. 9 . Usha Martin. Currently. to benefit from business integration. The company exports over 60% of the wire rope output and about 20% of the total wire rods produced. moving up the value chain and fully integrating its business process to maximize stakeholder value. the path to sustainable growth was long. the company is planning to invest in its iron ore and coal mines. the company has overseas manufacturing operations in Thailand. the Jamshedpur unit has a truly integrated speciality steel manufacturing facility of 700. sinter plant. Today. steel strand. Building Bridges . Looking Forward Usha Martin’s future plans are focused on its operation in Jharkhand – a state rich in mineral resources. the company set up a steel plant with wire r od rolling mill at Jamshedpur. With initiative to diversify the customer base by venturing into the international markets. Future priorities include product mix enrichment. power plants. pellet plant. producing steel wire. Out of which. Japan. Hoshiarpur & Bangkok. bright bar and steel wire ropes. while also enhancing its steel making and value added products capacity with an investment of Rs 2.000 MT per annum.the Group’s flagship company has emerged as India’s largest and the world’s second largest steel wire rope manufacturer. Th inking global In 1979. Going Global With local success come global aspirations.100 crore. cost reduction and infrastructural improvements. This ensured a steady supply of steel for the manufacture of value added products. about 35% is consumed internally by its plant in Ranchi. Already flourishing in its recent foray into mining operations. For Usha Martin. All its manufacturing facilities are ISO 9000 certified and the stee l plant was India’s first to receive the TPM Excellence Award from JIPM. steel cords. UK and Dubai. Besides a vast network of distribution centres and marketing offices spread across the globe to support an ever growing worldwide customer base. the management constantly tried out innovative business practices. For over three decades the company has invested ample man -hours and capital on community development projects for integrated prosperity in rural Jharkhand. Krishi Gram Vikas Kendra (KGVK). 1 0 . through a CSR arm.But what set Usha Martin apart is its unwavering commitment to social responsibility. B K jhawar 3. Mr Nripendra mishra (Director) 11. A K choudhari 6. N J jhawar 5. Dr Vijay sharma (Ex Director & CE. Mrs Ramni nirula (director) 9. G n bajpai (Director) 10. 2. BOARD OF DIRECTORS: 1. Mr. Rajiv Jhawar 12. In recognition to its effort Usha Martin has been awarded the prestigious TERI Award for Corporate Social Responsibility in 2006. Prashant jhawar 2. following a model of Total Village Management (TVM). P Bhattacharya (MD) (JT MD) 13. agricultural productivity. Mr Ashok basu 7.This NGO undertakes various development initiatives.steel business) 14. Brij k jhawar 4. empowering women and enco uraging micro enterprise. better health practices. Mr Salil singhal (chairman) (chairman-Emeritus) (Director) (Director) (Director) (Director) (Director) 8. P K Jain (Ex Director & CE. wire & Wire rope) 1 1 . Focusing on key areas like Watershed development. education. 3. ORGANIZATIONAL STRUCTURE: - 1 2 . PRESENCE: • Headquartered in Kolkata, India; • Iron ore mine (Barajamda) and captive coal mines (Daltonganj) in the state of Jharkhand, India; • • Steel manufacturing facilities located in Jamshedpur and Agra; Wire and wire rope manufacturing facilities located in Ranchi (Jharkhand) and Hoshiarpur (Punjab) in India, Bangkok (Thailand), Dubai (the UAE) and Nottinghamshire (the UK); • High–value wire and conveyor cord manufacturing facilities at Ranchi; • Machinery manufacturing Ranchi and Bangalore; • • and engineering application canters in Manufacturing units for bright bars in Ranchi and Sriperumbudur (Tamil Nadu); Rigging shops in the Netherlands and the UK. Telecommunication cables manufacture at Silvassa (India). Wide global network of marketing and distribution warehouses in Singap ore, 4. PRODUCTS: Following are the products manufactured by the company. 1. 2. 3. 4. 5. 6. 7. 8. 9. Coils and Bars. Bright and Bars. Ropes. Wire and Strand. Structural. Silings. Cord. Machinery. Telecables. Use of Ropes:1. 2. 3. 4. 5. 6. 7. Arial rope. Crane rope. Elevator rope. Engineering rope. Fishing rope. Mining rope. Structural rope. 1 3 Use of Wire and Strand:1. Power. 2. Construction. 3. Automobile. 4. General engineering. PRODUCT QUALITY /TESTING FACILITIES:1. 2. 3. 4. 5. 6. 7. 8. 9. 10. ISO-9001 ANAB. ISO-9001 UKAS. ISO-14001. TPM certificate. API-certificate. ABS-manufacturing Assessment. ABS-API9A. DNV -certificate. Lloyd’s-certificate. Inmetro-certificate. 5. VISION, MISSION AND QUALITY POLICY: Vision:To be a respected, world class & leadership in business, in quality, productivity, profitability & customer satisfaction. Mission:• To be a customer and shareholder observed factory. • • • To enhance value to shareholders and services to all stake holders. To develop highly motive team with a sense of satisfaction. To excel as a value driven organization. • To create the value in case of quality. • To expand its area of its operation& utilize the raw material efficiently. Quality policy:• Providing product & services that meet customer expectation. • Continual improvement to our quality management system and process. • Continues enrichment of the skills and knowledge through training and training. 1 4 . Bihar State Electronics Development Corporation Limited. Industrial Strands. India. Germany. Thereafter the registered office was shifted from Tatisilwai. USSIL is among the largest integrated Steel Wires. . Control Cables and Wire ropes Plants based in the ASEAN region with an annual manufacturing capacity of 36. AEG Kabel. 1986 as a joint venture between Usha Martin Industries Limited. B. Jhawar. Germany (now Kabelrhydt and a member of the Alcatel group) and DEG. The group was promoted by Mr. engaged in the manufacture of steel wires. Jharkhand to Kolkata in the State of West Bengal in the year 2000. K. Grou p Companies USSI L Usha Siam Steel Industries (“USSIL") was incorporated in 1980 as a joint venture between Usha Martin Industries.• • • Compliance to all applicable statutory and regulatory. 1998.Promoted by Board of Investment ("BOI") for production of Steel Wires and Ropes. The name of Usha Beltron Limited was changed to Usha Martin Limited with effect from 1st May. 6. which was formed in India in the early 1960s with the establishment of Usha Martin Industries Limited (UMIL). Our suppliers and customers are our partner in progress. USSIL became a Public Company Limited in 1997 and subsequently become a wholly owned subsidiary of the Usha Martin Limited. MILESTONES:The Company is a part of the Usha Martin Group. wire ropes and other related products. 2003.000 MT. who is the Chairman of the Company. Ranchi. Pursuant to the Orders of the Hon'ble High Court of Kolkata and Patna( Ranchi Bench) Usha Martin Industries Limited merged with Usha Beltron Limited with effect from 15th May. Usha Beltron Limited was incorporated on 21 May. Fostering the professional development of our employee. to manufacture Jelly Filled Telephone Cables (JFTC). India and Leading Industrialists in Thailand . It has been operational as a distribution center for Usha Martin Group’s core business of steel wire ropes and related products in South East Asia. It also has 1 5 . is a wholly owned subsidiary of Usha Martin Limited. India.UM Singapore Established in 2000. The company also acquired in 2001 a Nottinghamshire based Wire Rope manufacturing c ompany “Brunton Shaw UK” with an annual capacity of 6. formed to facilitate distribution & marketing of the group’s wire & wire rope products in Europe. BWWR is the first wire rope factory set up in the middle east. elevator rope. etc. The product range includes general engineering rope. UM Cables A wholly owned subsidiary of Usha Martin Limited.distribution set up in Australia. BWW R Established in 2003.9 MCKM and 35000 RKM respectively. crane rope.000 MT. Vietnam & Indonesia. . It also specialises in providing services to oil drilling and offshore exploration activities thru its arm European Management & Marine Corporation having offices in Aberdeen (UK). Brunton Wolf Wire Ropes FZCO is a joint venture between Usha Martin Limited of India and Gustav Wolf of Germany. UM America A wholly owned subsidiary of Usha Martin Limited. Western India. located at Silvassa.000 MT. manufactures PIJF Copper Telecom cables and Optical Fibre Cables and has an annual capacity of 2. Usha Martin International Limited is a wholly owned subsidiary of Usha Martin Limited. UMI L Established in 1997. situated in Jebel Ali Free Zone Enterprise (FZE) with an annual capacity of 12. off -shore application rope. 1 6 .India. It has been operational as a distribution center for Usha Martin Group’s core business of steel wire ropes and related products in United States of America. . Then it’s packed and despatched as ungalvanised wire. After this it’s packed and despatched as direct drawn wire. c) The drawn wire is galvanised and then it’s packed and despatched as galvanised steel wire. b) The drawn wire is patented and again drawn. d) The drawn wire is stranded & then packed and despatched as galvanised steel wire. MANUFACTURING PROCESS: (Wire & Strands) a) The wire rod is sent for surface treatment for cleaning and then for drawing. The drawn wire is again stranded and sent for induced heating and then it packed and despatched as P C Strand.7. 1 7 . Quality.(PQCDSM) . 3. b) Then the cleaned rod is sent for drawing. Moral. e) The strands are coiled to form the “wire rope”. Delivery. d) After galvanisation the rod is again drawn and strands are formed. 4. Productivity. Bu siness Drivers: . BEST PRACTICES AT USHA MARTIN A. c) The drawn rod is sent for patenting and further for galvanisation. Cost-effective. 5. Safety. 1. 8.(Ropes) a) First the wire rod is sent for surface treatment for cleaning of the rod. 1 . 2. 6. 8 . 4. Whatever the type of change – restructuring. organizational merger. B. or to maintain alignment (and performance) during other types of change.) Standardisation. 5. these seven elements need to be aligned and mutually reinforcing. 2. and so on – the model can be used to understand . Motivation Delive r y Mc Kinsey 7’ S Framework The model is most often used as a tool to assess and monitor changes in the internal situation of an organization. new processes. 3. for an organization to perform well. the model can be used to help identify what needs to be realigned to improve performance. 5 S Framework:Sort. So.(Self -discipline).1.) Shine.) Set in order. The model is based on the theory that. (For reducing searching time. new systems. (Remove dirt and dust. change of leadership. (To find out necessary as per value. TPM ( Total Produ ctive M aintenance) polic y:Productivit y 5S Framework Cost Speed TPM pillars Quality Innovation. Sustain. 1 9 . com).how the organizational elements are interrelated. OBJECTIVE OF THE MODEL (To analyze how well an organization is positioned to achieve its intended objective Usage • • • • Improve the performance of a company Examine the likely effects of future changes within a company Align departments and processes during a merger or acquisition Determine how best to implement a proposed strategy The Seven Interdependent Elements • The basic premise of the model is that there are seven internal aspects of an organization that need to be aligned if it is to be successful Hard Elements • • • Strategy Structure Systems Soft Elements • • • • Shared Values Skills Style Staff WORLD’S LARGEST ARCH BRIDGE IN DUBAI 20 . and so ensure that the wider impact of changes made in one area is taken into consideration. has developed a checklist and a matrix to keep track of how the seven element s align with each other. When it comes to asking the right questions. Mind Tools (mindtools. the website. is produce 100. KOREA 9. the division has continuously developed and expanded its range of product offerings and is considered a pioneer in certa in classes of products in India. empowerment. The company has promoted Krishi Gram Vikas Kendra (KGVK). elevators.000 MT / annum manufacturing facilities at Ranchi (Eastern India) is amongst the top four wire rope producers in the world. development. integrated watershed development. HOWRAH BRIDGE & INCHEON BRIDGE NEW SONGDO CITY. fishing. Presently. need based training to agriculture. capacity education. Crane. Since its inception. KGVK reaches out to about one lack household of tribal people and weaker sections of society in over 700 villages across 6 districts in the State of Jharkhand. Steel wire ropes manufactured by the division find wide applications in oil exploration. as its’ social arms to take appropriate initiative in various areas which affect health. load transportation and general engineering sectors. construction. community and women development. social life and economic well being of people for a period of over 35 years. hygiene and sanitation. • KGVK has been taking on various activities in basic health. mining. CORPORATE SOCIAL RESPONSIBILITY:• Usha Martin has strongly believed in its social responsibility being an important part of business philosophy.WIRE AND WIRE ROPE DIVISION The Usha Martin Ltd. micro enterprise building . generate self employment and 2 1 sustainable income for weaker section of society. It has successfully completed many projects and earned and earned recognition, appr eciation and accolades from wide section of NGOs, government and semi government agencies at state, national and international levels. • KGVK alliance has been getting active support from, and through and partnerships with, reputed national and international CAPART, ICICI CINI, JTDS, Washington, agencies such as US-AID, CEDPA, FUTURE, CARE, Bank, NFI, IRH, Georgetown University, IFC World Bank funded SWA-Shakti, National Foundation of Indian, Goal India, Partners in Change, BAU, ISRO, ICAR Palandu, NABARD, SIDBI, Lac Research Institute, Govt. of Indian, Govt. of Jharkhand and local NGO’s. 10. SWOT ANALYSIS:Strength: 1. Business model: The Company is extensively integrated from iron ore and coal block mines to captive power to the manufacture of steel, wires a nd wire ropes. 2. Proximity: The Company’s iron ore mines and coal mines are 160 km and 250 km respectively from downstream consuming centres, saving logistic costs. 3. Geographic mix: The Company’s revenues are drawn from India (76%) and the rest of the world (24%). Global revenues are drawn from 14 countries. 4. Product mix: The Company’s product portfolio comprises rolled products, steel wire rods, wires, strands, wire ropes, cords and cables, among others. 5. Presence: The Company enjoys an Indian and glo bal presence. Ten manufacturing units are located within India and three abroad. The Company’s customers are pan- India and pan-global, serviced by a large number of dealers, stock points and representatives. 6. Certifications: The Company’s manufacturing units are ISO 9000certified. The Company was accredited with TERI award and TPM Excellence award in 2006 and 2008 respectively. 7. Financials: The Company enjoyed a gearing of 1.02, a sub -7% average cost of debt as on 31 st March, 2010 and interest cover of 3.94 times for 2009 -10. 8. Customisation: The Company manufactures customised products resulting in value-addition, repeat business and enduring client relationships. 2 2 farming and livelihood. Machine & tools have become old & obsolete 2. 3. Technology: The Company invested in cutting-edge technologies across its manufacturing units. Semi – Automatic planned 4. dairy. its fives more emphasis on direct marketing with customer 4. among others. trade facilitation. an NGO namely Krishi Gram Vikas Kendra (KGVK) earned trust and respect for undertaking activities like education. UML can develop device for measuring breaking load Fishing is developing in the southern coastal cities Mushrooming of apartment in India & Abroad UMI can increase its profit. 2. Non effective advertising image Opportunity: 1. health. 11.9. across 350 villages Technology: Weakness: 1. Low price of the rivals product are a great threat for UML High production cost Local political instability . 2. Now present condition reliance has found crude oil resources in Krishna Godavari basin in south. new opportunities present for UML to produce rope 5. Demand of elevator ropes has increased due to global infrastructure development 6. natural resource management. 3. it deployed an advanced ERP solution for operational support. equipment and production facilities. 10. High production cost 5. 3. Social responsibility: The Company’s social initiative arm. Engineering skills: The Company’s decades of engineering knowledge related to the manufacture of wire and cable–making machines helped optimise plant. Over looked small customer. Competition are not much strong in secondary market Threat: 1. UML can develop device for measuring brea king load 6. 2 3 . 11. Mukand Ltd. Panchmahal Steel Ltd. Core Competence: - Cost control: The vertical integration – from natural resources to rope – facilitates the adequate availability of key inputs at a significantly low compared with purchases from the open market and provides a -complete control over the entire value chain. strengthening Company’s competitive edge. are the main competitors of the company in this sector. Jindal Stainless Ltd. Elango Industries Ltd. 1. 3. 4. 5. Shah Allo ys Ltd. 6. Besides. JIPM. Mahindra Ugine Steel Co mp any Ltd.Competitors:These 1. 2. Delivery speed. wire cost near the Quality products: The Company manufactures products where product quality is of paramount importance (namely wire ropes for critical applications). ABS. earned the confidence of global customers and authorities of repute including OTIS. 7. LLOYDS and ISO. Inducto Steel Ltd. a complete control on the value chain allows the 2. The vertically integrated model allows a stringent monitoring of product quality across every process and ensures consistent product quality across batches – a big competitive advantage. . The vertically-integrated business model facilitates red ucing cycle time (from indent to product delivery) and allows the Company to meet delivery schedules of clients owing to minimal dependence on external inputs and factors. The Company’s wire ropes. API. a recognition of its high quality. Company 2 4 . 5. Product basket Integration allows the Company to create a product range which caters to diverse applications across multiple sectors. ACHIEVEMENTS:. this business model enables the Company to protect its business profitability in adverse market conditions. Besides. (BSEDC). strands. . 7. cords and wire ropes – providing diverse growth drivers. It also enables the Company to capture the upside in the marketplace when prices rise (without a commensurate increase in costs). 4. Besides. 6. wires. It was promoted jointly by Usha Martin Industries Ltd. 1986. Integrated operations help customise products to suit specialised applications for key customer requirements. allows the Company to expand downstream capacities to capitalise on emerging stabilising cost opportunities Cyclicality protection The Company is protected from the vagaries of price fluctuations in key inputs. A footprint across the value chain allows the Company to provide an optimum sales mix in line with the external environment helping maximise profitability. namely iron ore and coal. namely iron ore and coal reserves. For example. wire rods. 1988 .The company was incorporated on 22nd May. strengthening business relationships 3. structurals. (UMI) and Bihar State Electronic Development Corporation Ltd. the Company’s wire rope product basket is one of the largest globally. stabilising costs. billets. enhancing customer loyalty.000 conductor kilometres (CKM) per annum of jelly filled cables. the Company’s presence across the value chain created multiple revenue verticals – pig iron. and obtained the Certificate of Commencement of Business on 17th July.The Company entered into a technical agreement with AEG Kabel of West Germany for technical know-how and training of Indian technicians at the collaborator'splant. 12.to meet urgent client deliveries (when necessary).00. This enables it to capitalise on most of the emerging opportunities in its business space. bars. Capacity increase Complete control of the back-end of the value chain. . Customisation .The Company undertook to set up a project for the manufacture of 5. Profit maximisation . .The Company had developed PCM system cable used for transmission of digital signals and supplied higher size cables upto 1600 pairs. The Company had also developed foam 2 5 . 1:5 (All were taken up).96.028 GDRs an d these representing 32.71. a joint venture along with Usha Martin Industries Ltd. (Formerly Usha Martin . & Telekom.000 No. 1996 .200 shares not taken up by employees.20.During May/June 1989. Out of the remaining 17.000 shares along with 3. its directors. 1989 .99.Kabel of West Germany and .000 rights equity shares in the prop.71.000 shares. 71. of equity shares of Rs 10 each at a premium of Rs 169 per share on preferential basis to promoters.930 shares were then issued at par out of which the following shares were reserved and allotted on a firm basis: .(iii) 10.During October..4 for the first time in India.Usha Martin Telekom Ltd..skin type cable of size 1800 x 0.2 00 shares taken up.10. .40. . Balance 65. .75 .000 No. etc. were offered for public subscription during April 1988 (All were taken up). the company offered 14.20.028 No.The Company issued 10.000 shares to BSEDC. Malaysia have been providing cellular phone services in Calcutta under the brand name "COMMAND".66 per share.00. 1994 .800 shares allowed to lapse. .(iv) 7.(ii) 18. Simultaneously. .000 shares to AEG . Only 5.70 shares subscribed for by the signatories to the Memorandum of Association.000 shares to DEG of West Bermany.. of equity shares were issued at a price of Rs 335. The balance 14..(i) 16. 70.46.Summit Usha Martin Finance Corporation Ltd.55. 3.The Company was closely monitoring the development in power sector and was evaluating various options.800 shares taken up. .000 shares were reserved for preferential allotment to employees. their friends.72. but only 14. of equity shares were also offered to the employees on an equitable basis. etc. the Company issued 32.930 shares to Usha Martin Industries Ltd. ) became a 50:50 joint venture between Usha Martin Group of Industries & Sumitomo Corporation of Japan.Finance Corporation Ltd. 26 . The company will have three major divisions -wire and wire ropes. 1998 . were canacelled due to Amalgamation with the Company. of equity shares of Rs 10 each held by e rstwhile Usha Martin Industries Ltd.Usha Martin Industries Ltd. (UBL) and also removed them from rating watch. Usha Martin Europe Ltd.The Jhawars-promoted wire rope-to-jelly filed cables firm..Crisil has downgraded the outstanding ratings of Usha Beltron Ltd.56.Other joint ventures of the company are Usha Siam Steel Industries Ltd.477. . 1997 . instal and/or erect all types of telecommunication network systems and enter into joint venture . and Usha Martin Americas Inc. After amalgamation company has become a multi-divisional company.Usha Beltron's telecom foray will include extending activities to different fields of operating.200 No.Usha Beltron Ltd. (UBL) was promoted jointly in 1986 by Usha Martin Industries and Bihar State Electronic development Corporation in technical collaboration with AEG Kabel. . covering the manufacture of pig iron. steel wires and wire ro ds. .The Company decided to spin-off the Software Division into one of the subsidiaries of the company. software and telecom. . maintaining and providing telecommunications services of all types and other value-added services and to design. .. . . Usha Beltron Ltd.334 No.Ubest a division of the Usha Beltron's Ltd. is set to extend its activities into telecommunications in a big way. has signed an agreement with Swiss Telecom PTT to offer Indian cellular operators natel sim card application platform (sicap) software product for immediate implementation.11. of equity shares issued to the shareholders of erstwhile Usha Martin Industries Ltd. Germany to manufacture jelly filled tele-cables (JFTC). was merged with the company. Pursuant to the Scheme of Amalgamation with the Company and 13. wire ropes and jelly-filed cables. 2 7 . This is for the second time. in a span of just one year. .Usha Beltron Ltd. that the company is going to change its name. according to sources in the company. of the Jhawars is all set to change its name to Usha Martin Ltd this fiscal.agreement with Indian and foreign parties. 1. is setting up a holding company to streamline its overseas distribution network.The Company embarked on creating a new cable manufacturing facility at Silvassa with a capacity of 27 lckm through UM Cables Ltd. a firm specialising in providing services and solutio ns for the wire rope industry. .Usha Communications Technology. (UBL). . the wire and wire ropes major of the Jhawar group.Usha Siam Limited. the flagship of the city-based Usha Martin Group. .Umicor. belonging to the Rs.Usha Beltron Limited (UBL) of the Calcutta-based Jhawars have acquired 10 per cent equity control in its Thai ropes and wire making joint venture -. and Compaq Computer Corporation singed a comprehensive worldwide solution development marketing agreement on May 7 at Portland. is setting up a joint venture with an Australian firm to produce leaded steels. .UM Cable Ltd. "The rest of the $10 million will be through equity expansion and bringing in a joint venture partner.The company has initiated moves to r estructure its international marketing and distribution business. . has acquired EMMC UK.Usha Beltron Ltd. UK.. is being launched in Silvassa." .5 million. . Usha Beltron Ltd.The company has introduced a voluntary retirement scheme at its cable and wire rope factories in Ranchi from last month. a wholly-owned subsidiary of Usha Beltron Ltd. (UBL) and Exim Bank.Usha Beltron Limited.000-crore plus Usha Martin Group. the US. to manufacture jelly-filled telecommunication cables. a wholly-owned subsidiary of Usha Beltron Ltd. a joint venture between Usha Beltron Ltd. a wholly owned subsidiary of the company. . . 1999 . near Mumbai. for $3. The scheme has been offered to workers and officers who are of and over forty years of age and have completed 10 years of service. of the .While software companies are making a beeline for India.. Oregon.UBL recently entered into an agreement with American Express Bank for funding worth $15 million. Usha Communications Technology .Jhawars is setting up a holding company . 2 8 .for software development in the United Kingdom. .The new company is being set up in collaboration with Entryline Holdings Ltd.The Company has approved a Scheme of Arrangement proposed to be made between company and Usha Martin Infotech Ltd. (UMIL) and their respective shareholders. . will issue global depository receipts (GDRs) in a couple of months. 2001 . a subsidiary of the 180-million Carclo.Usha Beltron Ltd. -Board approves in setting up of a Direct Reduced Iron (DRI) Plant with the capacity of .25 per GDR. a Pentire group company of the UK. has decided to enter into a 50:50 joint venture with Martin Bright o f Australia to set up a Rs 40-crore special steel manufacturing facility in Jamshedpur.The Usha Beltron Group of the Jhawars has flagged off a major restructuring exercise for its global software activities by initiating the process to set up a new hol ding company in the United States by January 2000.Mr Pradip P. .Calcutta-based Usha Beltron has acquired the wire rope business of Brunton Shaw of the UK.Usha Beltron Limited (UBL). the flagship of the Calcutta-based Jhawars. which is likely to be named UBEST America. . Director has resigned from the board effective from 24th January. the city-based Jhawar group's flagship. .000 Global Depository Receipts (each GDR represented by one equity share of Rs 10 each) at a price of US$3. 2000 . Shah. . The company has set up technical training centres. 2002 -Ties up with Gustav Wolf of Germany to manufacture steel cords in India. UK.The Company issued 35.00..Usha Beltron is all set to joint the big league of corporates flourishing on growth opportunities inknowledge-based sectors such as infotech and telecom. 100 KT per annum. 2 9 . -Usha Beltron Ltd announces the change in management as follows: 1.45% voting rights on preferential allotment basis.per share) being the price which is in accordance with chapter X111 (Guide lines for preferential issues) of SEBI ( Disclosure and Investor Protection) Guidelines to Promoters.45.455 equity shares of Rs.55% stake in Usha Martin International Ltd.50cr to UBL and the debt cost stands at Libor plus 275 basis points with 11 years time span.120. T K Banerjee.00. UK (UMIL) -Ministry of coal alloted captive coal block in Jharkhand having a reserve of more than 30 MN T and contains Grade A & B coal. -UMIL acquires 30.33/. -Purchases a wire rope plant in Dubai -Acquisition of 49.per share (inclusive of premium of Rs.28/ . 3) The BOD have also decided to convene an EGM on July 18. -Mr. 2003 . -Board approves for the issue and allotment of securites on preferential basis: 1) 53.000 shares amounting to 9. Directors.28/. 2) 53. Nominee of Life Insurance Corporation of India resigned from the Board of Directors of the Company. their relatives and associates.each of the company at a price of Rs.5cr in the company.each of the company at a price of Rs. Promoter Group. Mr Biswajit Choudhuri appointed as a nominee of Unit Trust of India on the Board of the Company in place of Mr S K Saha 2.per share) being the price which is in accordance with chapter X111 of SEBI (Disclosure and Investor Protection) G uidelines to International Finance Corporation. 2005 . Mr Dilip Mondal appointed as a nominee of Industrial Development Bank of India on the Board of the Company. which would be required by the company for its Sponge Iron (DRI Project) Plant expansion. 2002 to consider the above matters.33/ .DEG financed Rs.5/ .455 equity shares of Rs. -IFC signs agreement with UBL to invest Rs.45.5/.per share (inclusive of premium of Rs. Washington. -Usha Martin executes a Business Transfer Agreement with JCT 30 . 13. FINANCIAL ANALYSIS: Sh areh olding pattern Shareholding pattern .70 % 10. Holder's Name Promoters Foreign Institutions National Banks Mutual Funds Foreign Promoter General Public Financial Institutions Other Companies No of 8845901 7 5294347 6 5090020 4 3333613 5 3100897 2 2320666 3 2015794 3 % Share 29. Vijay Sharma and Mr.62 % 6. .03 % 17. P. however the year ending ’08 it has been changed to INR 1. .18 % 7.executive & independent] with effect from March 18.The Company has splits its face value from Rs5/ . 2010. Nripendra Misra as Additional Director [non-executive & independent] with effect from March 22.37 % 16. 2 010.Usha Martin Ltd.94 % 10.Usha Martin Ltd has appointed Mr.executive & independent) with effect from June 10. .to Rs1/-.00 .Usha Martin Limited has appointed Dr. Jitender Balakrishnan as Additional Director (non . The company’s shares had Face Value of INR 5. Jain as executive Directors on the Board of the Company. .00 from 2003 to 2007. Suresh Neotia and Mr. as additional directors of the Company with effect from May 17. K. 201 0.Usha Martin Ltd has appointed (a) Mr.Usha Martin Ltd has appointed Mr. 2007. Ashok Basu.61 % The shareholding pattern says that only around 10% of the total shares are open for the general public. 2010 . and (b) Mr.2007 . G N Bajpai as Additional Director [non . 3 1 . • Even if cash has been received.18% CASH M ANAGEM ENT: Meaning and Importance of cash Cash. This may be because: • Although huge profit have been earned yet cash may not have been received because of large credit sale was made. interest and dividend etc. it may have drained out (used for some other purposes). so proper management of cash is very important. Its efficient management is crucial to the solvency of the business because cash is the focal po int of the funds flow in a business.37 % Institutions Other Companies 10. This movement of cash is of vital importance to the management. Cash plays a very important role in the entire economic life of an organization.03 % For eign Institutions National Bank s Mutual Funds For eign Pro moter 10. C ash is money that is easily accessible either in the bank or any business.94% General Public Financial 16.62% Promoters 29. the most liquid asset and also referred to as the life blood of a business enterprise is of vital importance to the daily operations of business firms.70 % 17.61% 7. A firm needs cash to make payments to its suppliers. to incur day to day expenses and to pay salaries. . It is very essential for a business to maintain an adequate balance of cash. But many a times a concern operates profitably and yet it becomes very difficult to pay taxes and dividends.% Share Holding 6. wages. 3 2 . accidents may happen. Precautionary motive iii. creditors may present bills earlier than expected or debtors may make payments later than warranted. Transaction motive ii. The proportion of corporate assets held in the form of cash is very small. While some of these transactions may not result in an immediate inflow/outflow of cash (e. interest rate. Transaction motive A company is always entering into transactions with other entities.g. Spec ulative motive Firms would like to tap profit making opportunities arising from fluctuation in commodity price. There are three holding cash: possible motives for i. It is generally referred to as the “life blood of a business enterprise”. security price. the most liquid assets is the vital importance to the daily operations of the business firms. Precau tionary motive Contingencies have a habit of cropping up when least expected. A sudden fire may break out. and foreign exchange rates. credit purchases and sales). employees may go on strike.Cash /fund management Cash/Fund. other transactions cause immediate cash inflow s and outflows. The company has to be prepared to meet these contingencies to minimize its losses. For this purpose companies generally maintain some amount in the form of cash. So firms always keep a certain amount as cash to deal with routine transactions where immediate cash payment is required. often between 1 and 3 percent. Speculative motive The need for holding cash arises from a variety of reasons which are briefly summarized below . A cash rich firm is better prepared to exploit such . its efficient management is crucial to the solvency of the business enterprise because in a very important sense cash is the focal point of fund flows in business. Firms which have such speculative leanings may carry additional liquidity. Most firms their reserve borrowing capacity and marketable securities would suffice to meet their speculative needs.bargains. 3 3 . dividends or seasonal inventory builds up. cash inflow can be more than cash payment because there may be large cash sales and debtors may be realized in large sums promptly. cash outflows exceed cash inflow.  Cash flows within the firm. It can be represented by a cash managemen t cycle as shown below. The management of cash is important because it is difficult to predict cash flows accurately. The surplus cash has to be invested while deficit has to be borrowed. Cash Busines s Operatio n Collecti o Deficit Surplus Informatio n And control Borrow Invest Cash Payment s . Cash management is also important because cash constitutes the smallest portion of the total current assets. Sales generate cash which has to be disbursed out. Cash management seeks to accomplish this cycle at a minimum cost. During some periods. it also seeks to achieve liquidity and control.  Cash balances held by the firm at a point of time by financing deficit or investing surplus cash. particularly the inflows and there is no perfect coincidence between the inflows and outflows of cash. At the same time. because payment for taxes. yet management’s considerable time is devoted in managing it.Cash M anagement Cyc le Cash management is concerned with the managing of:  Cash flows into and out of the firm. At other times. An obvious aim of the firm now-a-days is to manage its cash affairs in such a way as to keep cash balance at a minimum level and to invest the surplus cash in profitable investment opportunitie s. 3 4 . INVENTORY M ANAGEM ENT: Inventory consists of raw material. so that each rupee invested in debtors may contribute to the net worth o f the organization.  Size of Investment in Debtors: Investment in debtors A/c is a major part of their assets in most of business enterprises. as the substantial amount is tied up in trade debtors. or (c) are to be currently consumed in the production of goods or services to be available for sale”. or say stocks.  Th e Basic Problem of Debtors M anagement: The basic problem of debtor’s management is the balancing of profitability & liquidity. Its main aim is to promote sales and profit until that point is reached where the return on investment is further funding of debtors is l ess than the cost of funds raised to finance that additional credit. Debtors A/c is one of the major components of working capital. which would be collected in the future. These represent the extension of credit on an open A/c by the firm to its customers. The longer the period of credit the greater the risk. (b) are in the process of production for such sales. it needs careful analysis and proper management.DEBTORS M ANAGEM ENT: The basic objectives of the debtor’s management are to optimize the return on investment on the assets. Every firm invests a huge amount to maintain a certain level of inventory. it grants trade credit and creates Debtors accounts. the greater the level of debt and greater the strain on the liquidity of the company. Thus a large portion of working capital is . When a firm makes sale of goods and services and does not receive payment. The financial executives should pay due attention to the management of debtors. semi-manufactured products and completely manufactured products. Soft credit terms attract sales and so the longer the time a company allows to pay to its customers the gr eater the sales and higher the profits. It has been defined by the Accounting Principles Board as “The aggregate of those items of tangible personal property which (a) are held for sale in the ordinary course of business. inventories are approximately 60% of the total current assets in public limited companies in India.involved in stock. On an average. 3 5 . Firm also maintain a fourth kind of inventory suppliers OR store s and spares. no raw material and no work in progress inventories. Therefore. while a retail or wholesale firm will have a very high level of finished goods. strike etc. Also there exists uncertainty i n procuring raw material in time in many occasions. Thus there are three general purposes for holding inventories:  Transaction motive  Precautionary motive . Because of the large size of inventory and the considerable fund engaged in Inventories it is become necessary to manage it in an effective and efficient manner. brooms. oil.The level of inventories for a firm depends upon the nature of its business. Material is as much cash as cash as cash itself and any theft. transport. why do firms hold invento ries? A company should maintain adequate stock of material for a continuous supply to the factory for an uninterrupted production. It includes office and plant cleaning materials like soap. so the question is if it is expensive to maintain inventory. The proces s of managing inventory is called INVENTORY MANAGEMENT. bulb etc. At times the firm would like to accumulate raw material in anticipation of price rise. disruption. A manufacturing firm will have high level of all three types of inventories. Other factors which may necessitate purchasing and holding of raw material inventories are quantity discount and anticipate price increase. waste and excessive use of materials leads to immediate and direct financial loss. The procurement of material may be delayed because of such factors as. These materials do not directly enter in production but are necessary for production process. short supply. the firm should maintain sufficient stock of raw materials at a given ti me to streamline production. PURPOSE FOR INVENTORY H OLDNG As we all know that huge fund is required to maintain a certain level of inventory. Sometime it is not possible for the company to procure raw material whenever it is needed. The firm may purchase large quantities of raw material than needed for the desired prod uction and sales levels to obtain quantity discount of bulk purchasing.  Speculative motive 1. 36 . TRANSACTIONS MOTIVE: It emphasizes the need to maintain inventories to facilitate smooth production and sales operation. 2. INVENTORIES M ANAGEM ENT TECH NIQUES Various techniques commonly used for inventory control are listed below: • ABC technique • Stock level – minimum. In this technique material are analyzed according to their value so that costly . maximum and re-order level • • • • Economic order quantity (EOQ) Inventory turnover ratio to review slow and non – moving material Perpetual inventory system Methods of pricing of material ABC TECH NIQUE ABC Technique is a value based system of material control. PRECAUTIONARY MOTIVE: It necessitates holding of inventories to guard against the risk of unpredictable change in demand and supply forces and factors. Minimize the carrying cost and time and • Control investment in inventories and keep it at an optimum level. Some other objectives are as below. Maintained sufficient stock of raw material in period of short supply and anticipate price changes. • • • • Ensure a continuous supply of raw material to facilitate uninterrup ted production. Maintain sufficient finished goods inventory for smooth sales operation and efficient customer service. SPECULATIVE MOTIVE: It influences the decision to increase or deduce inventory level to take advantage of price fluctuations. OBJECTIVES OF INVENTOR Y M ANAGEM ENT The objective of inventory management is to maintain sufficient inventory for the smooth production and sales operations and to avoid excessive and inadequate levels of inventory. 3. which are known as A. medium and low values. All items are classified according to their value ie. high. B and C items respectively.and more valuable materials are given greater attention and care. 3 7 . B and C is as follows:1. EOQ=√ (2*O. . consumption* Max. ECONOM IC ORDER QUANTITY ( EOQ) Economic order quantity is that size of order which gives maximum economy in purchasing any material and ultimate contribution towards maintaining the material at the optimum level and at minimum cost. These items engage only 10% of fund and 70% of space in the inventory.A items: High in value and low in quantity.C.D. 2. re-order period)  Minimum level = Re-order level-(Normal consumption * Maximum Re-order period)  Re-order level=Maximum consumption * Maximum re-order period  Average stock level = ½ (Maximum level + Minimum level)  Danger level = Normal consumption *Maximum re – order period under emergency condition. These levels are:  Maximum level = Re – order level + Re – order quantity – (Max. It is also called RE -ORDER QUANTITY. These items engage 70% of funds and 10% of space in the inventory. B items: Medium in value and medium in quantity. Thus the ratio between A. PRICE WISE – 7:2:1 QUANTITY WISE – 1:2:7 STOCK LEVELS In order to check under stocking and over stocking most of the large companies adopt a scientific approach of fixing stock levels. These items engage 20% of funds and 20% of space in the inventory./C.C) Where. C items: Low in value and high in quantity.*A. C. the cost of placing an order. 3 8 .O. = Ordering cost. the more efficient is the stock policy. ASCERTAINING OF WORKING CAPITAL: Abo u t Working Capital One of the most important areas in the day-to-day management of the firm deals with the management of Working Capital. = Carrying cost.  Stock turnover ratio= Cost of material consumed during the period/ Average stock of materials during the period  Stock turnover in terms of days= days of period / stock turnover rate In order to detect the slow and non-moving materials. which is defined as the short-term assets used in daily operation. annual consumption of material in units. this is the cost of holding the stock in storage. INVENTORY TRUNOVER RATIO TO REVIEW SLOW AND NON -MOVING M ATERIAL Inventory turnover ratio tells us how many times in a year stock are used up and replaced.A. The greater the stock turnover. C. a standard stock turnover rate should be computed for each item of material with the help of following formula: Turnover rate of an item = Budgeted consumption/Average stock level PER PETUAL INVENTORY SYSTEM A perpetual inventory system is defined as “The method of recording stores balance after each receipt and issue to facilitate regular check ing and obviate closing down for stock taking.” METHOD OF PRICNING OF MATERIALS Some important methods of pricing are as follows:  LIFO (Last in fast out)  FIFO (First in first out)  Simple Average Price  Weighted Average Price 14. .C.D. = Annual demand. These funds are known as 3 9 .Funds are needed for short term purposes for the purchase of raw materials. payment of wages and other day to day expenses etc. Kinds of Working Capital On the Basis of of Concept On the basis time Gross Working Capital Net Working Fixed Capital working Variable working Capital Capital Special Working Capital Seasonal Working Capital Reserve Working Capital Regular Working Capital . Funds. debtors and inventories. etc. land. Investments in these assets represent that capital which is fixed. thus invested in current assets keep revolving fast and are being constantly converted into cash and this cash flows out again in exchange for other current assets. building. marketable securities. In simple words working capital refers to that part of firm’s capital which is required for financing short term or current assets such as cash. Hence it is also known as revolving or circulating capital so working capital is the amount of funds necessary to cover the cost of operating the enterprise. furniture.WORKING CAPITAL. Long term funds are required to create production facilities through purch ase of fixed assets such as plant and machinery. 40 . According to this concept working capital refers to the difference between current assets and current liabilities. Current liabilities refers to the claims of outside which are expected to the mature payment within an accounting year.Classific ation of working capital:  On the basis of concept: • Gross working capital • Net working capital On the basis of periodicity of requirement: • Fixed and permanent working capital • Variable working capital   On the basis of concept There are two interpretations of working capital under basis of concept: a) GROSS WORKING CAPITAL b) NET WORKING CAPITAL a) Gross working capital: Gross working capital is the capital invested in total current assets of the enterprise. . Current assets are those assets which in the ordinary course of business can be converted into cash within a short period of normally one accounting year such as: Cash Short term securities Debtors Bills receivable Inventory Temporary investment of surplus funds The concept of gross working capital focuses attention on two aspects of current assets management: • Optimum investment in current assets • Financing of current assets b) Net working capital: Net working capital is the difference between current assets and current liabilities. It is the excess of current assets over current liabilities. 4 1 .  Po sitive net wo rking capital: it arises when current assets exceed current liabilities. work-in-progress.It includes – Creditors for goods Bills payable Bank overdraft Short term bank loans and advances Prepaid expenses Net working capital can be “positive” or “negative”. Both concepts have go t their own merit. The net working capital concept indicates the liquidity position of the firm and suggests the extent to which working capital need may be financed by permanent sources of funds. The permanent working capital can again be sub divided into two parts:  Regular working capital  Reserve margin working capital • R egu lar working c apital: It is the minimum amount of liquid working capital required to keep up the circulation of the capita l from cash to inventories to receivable and again to cash. This includes minimum bank balance to discount all bills to maintain adequate supply of raw material etc. Thus gross working capital concept is financing or going concern concept whereas net working capital is an accounting concept of working capital. Such as investment required the maintenance of minimum quantity of raw material.  Negative net wo rking capital: it occurs when current liabilities are in excess of current assets. It increases as the size of the business expands. but in general practice net working capital is given more priority. finished products e tc. R eserve margin of working c apital: It is the excess capital over the need or regular working capital that should kept in • .  • On th e basis of periodic ity of requirement - Fixed & permanent working c apital: It represents the part of capital permanently locked up in the current assets to carry out the business smoothly this investment in current assets is of the permanent nature. strikes. These contingencies include rising price. 42 . special operations such as experiments with new product etc. Business depression.reserve for contingencies that may arise at any time. production and efficiency of the firm. To use quantities data for defining company’s financial performance. It may also be sub divided into seasonal and special working capital. . 2. • TO study the affairs of the company with refe rence to the working capital ascertainment and methods of its estimation used in the company. OBJECTIVES OF TH E STUDY o o • TO study and analyze the working capital policy of the USHA MARTIN LTD. Primary data: 1. Spec ial variable working capital: It is the part of variable working capital which is required for financing special operations such as extensive marketing campaigns. Interview schedules with officers of inventory department. experiments with product or model of production. To understand the general performance of the company.• Variable working capital: Variable working capital change with the increase or decrease in the value of business. Seasonal variable working c apital: The working capital to meet the seasonal liquidity of the business is seasonal variable working capital. To analyses the performance effectiveness of the company. Interview schedules with officers of account department. • • • • • R ESEARCH METH ODOLOGY Research Design: The study is based on descriptive and applied research. Data Source: Both primary and secondary data are used for the collection of the information required for the report. To know the profitability. To study the methods of financing working capital. 4.3. Interview schedules with officers of cash department. Interview schedules with officers of purchase department. 4 3 . Secondary Data: 1. 2. 3. Annual report of the company. Company’s data records. Company’s website. WORKING CAPITAL CYCLE The working capital cycle refers to the length of time between the firms paying cash for materials etc., entering into the production process/stock and the inflow of cash from debtors (sales). It indicates the length of time between a company’s paying for materials, entering into stock and receiving the cash from sale of finished goods. It can be determined by adding the number of days required for each stage in the cycle. For example, a company holds raw materials on an average for 60 days, it gets credit from the supplier for 15 days, production process needs 15 days, finished goods are held for 30 days and 30 days credit is extended to debtors. DEBTORS CASH SALES RAW MATERI ALS FINISHED GOODS WORK I N PROGRESS Fig. Operating cycle The totals of all these, 120 days is the total working capital cycle. The duration of the operating cycle for the purpose of estimating working capital is equal to the sum of the durations of each of the above said events, less the credit period allowed by the supplier s. 44 Thus there is a complete cycle from cash to cash wherein cash gets converted into raw materials, work in progress, finished goods, debtors and finally into cash again. Short term funds are required to meet the requirements of funds during this time period. This time period is dependent upon the length of time within which the original cash gets converted into cash again. This cycle is also known as operating cycle or cash cycle. Working management: capital A managerial accounting strategy maintaining efficient level of both components of working capital, current assets & current liabilities in respect to each other. Working capital management ensures a company has sufficient cash flow in order to meet its short term debt obligations and operating expenses. Working capital management or short term financial management which is concerned with decision relating to current assets & current liabilities; short term financial decision typically involve cash flow within a year or within the operating cycle of the firm. Definition: Working capital management is concerned with the problem that arises in attempting to manage the current assets & current liabilities and the interrelationship that exists between them. Working capital management refers to all aspects of the administration of both current assets & current liabilities. Working capital management is divided into six parts, these are as follows: 1. Working capital policy 2. Cash and liquidity management 3. Credit management 4. Inventory management 5. Working capital financing 6. Working capital management: extensions 1. Working capital policy: Working capital management is a significant fact management its important stems policy is two reasons: 1. of financial Investment is current assets represents substantial portion of total investment. 2. Investment is current assets and the level of current liabilities has to be geared quickly to changes in sales. 4 5 . Current assets have a short life span. The important ones are: a) Nature of business b) Seasonality of operation c) Production policy d) Market conditions e) Condition of supply a) Nature of business: The working capital requirement of a firm is closely related to the nature of its business.Working capital policy is divided into seven heads. To consider firm manufacturing ceiling fans. (B)Factors influencing working capital requirements: The working capital need of a firm is influenced by numerous factors. account receivable may have a life span of 30 to 60 days. which has a long operating cycle and which sales largely on credit have a very substantial working capital requirement. Characteristic of current assets 2. and inventories may be held for 30 to 100 days. the sale of ceiling fan reaches a peak during the summer months and drop sharply during the winter period. Production policy: A firm marked by pronounced seasonal fluctuation in its sales may pursue a production policy which may reduce the sharp variation in working capital requirements. b) Seasonality of operation: Firms which have marked seasonality in their operations usually has highly fluctuating working capital requirements. these are as follows: 1. c) d) Market condition: The degree of competition prevailing in the . it has a short operating cycle and its sales predominantly on cash basis. has a modest working cap ital requirement. Cash balance may be held idle for a week or two. On the other hand a manufacturing concern likes a machine tools unit. It depends upon the time requir ement. Current assets financing policy 5. like electricity undertaking. A service firm. Profit creation for working capital (A)Characteristic of current assets: In the management of working capital two characteristic of current assets must be borne in mind: (i) short life span and (ii) swift transformation in other assets form. Level of current assets 4. Factors influencing working capital requirements 3. market place has an important bearing on working capital need. 46 . If the supply is prompt and adequate. . surplus is invested in liquid assets. Under a flexible policy.  (E) Profit creation for working capital: Current assets can be easily liquidated and value realized on liquidation would be more or less equal to the amount invested initially put differently investment in current assets is reversible. (D) Current assets financing policy: After establishing the level of current assets. short term financing is used during seasonal down swing. the firm must deter mine how these should be financed and what mix of long term capital and short term debit should the firm employee to support its current assets. (C) Level of current assets: An important working capital policy decision is concerned with the level of investment in current assets. Strategy C: Long term financing is used to meet fixed assets requirement and permanent working capital requirement. Several strategies are available to a firm for financing its capital requirements. For reversible investment the certain of net profit per period is equivalent to the certain of net present value. permanent working capital requirement and a portion of fluctuating working capital requirement during seasonal up wings. Short term financing is used to meet fluctuating working capital requirement.  Strategy A: Long term financing is used to meet the fixed assets requirements as well as peak working capital requirement.e) Condition of supply: The inventory of raw material spares and stores depend on the condition of supply. A similar policy may have to be followed when the raw material is available only seasonally and operation is carried out around the year.  Strategy B: Long term financing is used to meet fixed assets requirement. the firm can manage with small inventory. the surplus is invested in liquid assets. When the working capital requirement is less than its peak level. the investment in current assets is high and under a restrictive policy the investment in current assets is low. 4 7 . 829 Rs. PROFIT & LOSS ACCOUNT AND WORKING CAPITAL ANALYSIS Working capital level The consideration of the level investment in current assets should avoid two danger points excessive and inadequate investment in current assets. Expected value of the P/L Account of the Ranchi unit. Investment in current assets should be just adequate.3 0 93 8. The management should be prompt to initiate an action and correct imbalance . Rs.15.2 40 4. 798 19./lacs Projected Profitability of Ranchi unit for FY 2012 -13 Q1 FY 2012-13 Q2 FY 2012-13 Q3 FY 2012-13 Q4 FY 2012-13 Total FY 201213 Produ c tions (M/ T) Wire Rope & Conve y er Cord Wire & Stran ds Brigh t Bars Usha Martin Limited 15. 327 16./ Qt lacs y 4. 732 65. as idle investment earns nothing. 65 8.0 00 4./ Qt lacs y Ra te Ra te Ra te Qty Ra te Wire Rope & C cord 8. 1. 975 15. 475 Rs. to the need of th e business firms.9 15 19. 1.8 00 1. 4 00 41. 0 35 . On the other hand inadequate amount of working capital can be threatened solvency of the firms because of it s inability to meet it s current obligation. It should be realized that the working capital need of the firms may be fluctuating with changing business activity. 623 Rs. This may cause excess or shortage o f working capital frequently.61. not more or less. 955 Rs. 1 50 39. 648 19. 881 17./ Qt lacs y 4. 898 19./l acs Particu N lars or m s Sales Dome s tic - Qt Rat y e 39. 2 50 41. 03 0 Rs. 898 79. Excessive investment in current assets should be avoided because it impairs the firms’ profitability. 0 30 5.7 47./ lac s 16. 1 45 8. 9 54 .0 8 52.5 43 8.7 10. 33. 00 8. 9 54 . 55 5 35 . 8 63 . 90 67. 80 10. 9 23 . 52. 37 2. 78 2. 78 4. 788 3.9 48 52. 7 11 . 9 46 . 83 6 16 . 37 2. 1. 0 42 5. 5 75 . 64 0 35.8 69. 8. 83 6 8. 768 8.0 5. 47 7 1.8 9 Wire & Stran d Brigh t 16 .9 48 3. 7 79 .5 . 80 67. 67 . 83 6 16 . 37 2.4 87 .7 26.6 43.7 98 16 . 9 54 . 78 4. 10 67. 51 8. 92 8. 9 2 49 8. 00 48 67 .6 6.9 48 52. 78 15 . 86 Lubri c ant 31 5 105 656 332 . 456.8 29 75 . 95 0 56.64 0 7. 21 6 32. 15 1. 50 11 9 44 8 8 4. 53 1.67 7 256 .4 6 2.51 31. 15 41 . 6 20 .16 87 650 .7 20 4. 893 . 863 .16. 990 . 83 5 32 7.92 1.37 4.Bars Expor t Wire Rope Wire & Stran ds Bright Bars ISMAL / M.2 21. 995 . 96 110 . 6 8. 320 25 0 55 .8 76. 62 6 2. 02 538 . 62 6 11 . 95 0 56.0 20.10 30.3 95.81 2.14 1. 96 138 .4 .62 1. 18 10 59 82 32 361 9 . 52 5 8 84. 4 65 . 9 55 71 .96 0 32 .0 30 77.15 E xp en s es Wire Rods 41 . 46 165 .7 268 . 25 5 8 84.2 70 56 1 386 43 Zinc 15. 32 0 1. 887 .Divi s ion Scrap 0 7. 87 6 2.3 38. 32 0 25 0 55. 045 .9 73. 02 566 . 6 70 .9 95.11 43 .58 2. 08 7 74 6. 63 1.30 0 8. 876 2.6 17. 2 97 65.7 32 58 6 38 70 1 11 60 00 16. 6 65 2. 3 27 .6 23 75. 445 29.59 2.09 1.6 8 2.61 41 .77 2.41 29. 0 03 . 6 70 .06 1. 52 Less : Excis e duty NET SALES 27.66 31 2 10 62 91 11 44 88 34 331 1 . 58 1.6 55.08 895 .78 39 . 419 . 6 1. 690 .68 9.36 23 11 5 44 8 8 10 61 03 349 .83 22 Fibre 22 4 114 488 Other Raw mate ri als Powe r 256 .24 116 000 1.4 75 78. 237 95 6. 5 99 . 537 . 29 9 540 . 20 970 .51 680 . 3 19 1.76 1.45 655 . 85 0 56. 439 . 6 20 .86 20 0 55.61 56 5 38 67 6 11 60 00 16.8 09. 46 138 .0 24. 71 9 1. 90 5 8 85.53 27.17 84.9 06 1. 20 1. 36 0 3 27. 09 558 . . 919 . 0 00 553.1 76 60 7 38 65 7 11 60 00 16. 41 948 .66 29. 60 0 6.30 0 8. 52 39 . 11 22 4 21 4. 67 5 . 34 0 53 7. 32 0 30 0 55.89 42 .57 703 . 85 0 56. 21 1 26 0 1 91 961 .32 3.0 15.72 2 1 0 2.75 82 0.2 65.04 8 0 996 . 6 8 3.20 20 0 Fue l 0 4.93 1.21 49 .94 .7 957 . 1. 30 57 1. 62 3. 3 14 . 10 3.7 15.4 25.4 25.97 480 .81 470 .9 49.2 9 29. 8 76 .9 53. 3 11 . 01 2. 3 11 . 8 76 . 10 3.0 0 0. 62 24. 74 1. 97 86.81 2.0 26.48 473 . 7 15 .76 577 .0 79.28 4.16 8.1 71. 97 0. . 97 3.76 1. 56 8.23 419 .0 0 0 Problem formulation: The company is trying to find out how much working capital is being required for smooth functioning and operations of wire and wire rope manufacturing during the financial year 2012-13.7 4 PBID T 3.3 14.4 55. 00 1. 86 2.4 55. 25 26.13 445 .3 14. 10 0. 00 24.9 63.23 Store s & Spare s Contr a ctor & Proce s sing charg es Freig ht & other sellin g expen se Other Expen s es P & A Expen s e total : 419 . 25 3. 25 3. 62 3.34 446 . 543 .79 2.05 473 .7 15. 683 .29 584 . 3 11 .99 3. 00 1.17 3. 147 .47 1.5 06.91 3. 00 1.17 1. 604 .561 .41 3.97 561 . 8 76 . According to that the marketing department does the market survey. According to that market survey the company estimate that how much working capital is needed to the production department for the production of wire and wire rope product. That survey report they submit to the company.Why? As per the business plan and sales forecasting of previous year the company has given the target to the marketing department for the future projection/forecasting of sales and how much working capital will be required for the manufacturing process of its products. 50 . then company has to incur additional capital and probably the chance of bad debt increases. used in production process.e. manufactured by its Usha Martin Ltd. Project Stages: Stage 1: First of all the Business Plan sheet (as a primary data) is given to me on behalf of the company where following are the things are mentioned: 1. These are the main products i. which is needed in production so that the production process does not stop. Company brings its main raw materials i. First of all company has given the estimated target to the marketing department that these much amount of products should be produced during the financial year 2012 13. P&L Overall Ranchi 7. The company Usha Martin basically produces wire and wire rope. Highlights of the Business Plan 2. because if the holding period increases. After the management of working capital the company procure s the raw materials i. that the company has to keep in advance any time. which is given by the marketing department. SPD Contribution 6.e. wire rode from its Jamshedpur Unit. Business Plan Norms 3. Ranchi unit.e.What? According to the forecasted figure. rope. Expenses Overall 8. the company execute that how much working capital is required and how much of raw materials should keep in hand for the operation of business. According to this company manages fund that keeps as inventory. Wire and Wire Rope Contribution 5. P&L WWR . Contribution Summery 4. strands and bright bars. For proper running of the machine different kind of fuels are being required. According to the estimation of marketing department the production department of the company is functioning that how much raw materials will be required for the production of these goods and what are the expenses that the company has to incur for manufacturing of wire. At last the most important thing is that to keep cash in hand for their day to day expenses and for running the production process conveniently. According to that we have to make P/L account and working capital of different department and consolidate it that what are the expenses that company incur in the p roduction and what types of working capital is required. The company also keep watch on holding period. conveyer cord. 10. 11. Expenses of WWR P/L Machinery Division Expenses of Machinery Division P/L ISMAL 5 1 .9. 12. 16.. Stage 3: After the carefully analyzing of Business Plan. I prepared a consolidated P/L account of 15. What are the consumption norms? 5. we carefully understand and analyzed that what is happening actually in the company. 15.Machinery Division . Ranchi unit. How much inventory is company maintaining for the uninterrupted production process? 6. How the funds are raising by the company? 3. 17. From where the company is getting raw materials for its production? 4. 14.623 .WWR .Power Project . Analysis of P/L acc ou nt qua rter wise of Ra nch i unit. Expenses of ISMAL P/L Power Project Expenses of Power Project Consumption Power Plant Working FC Data After getting the Business Plan we have analyzed all the data that are mentioned in the Business Plan and according to that we have prepared P/L account and Working Capital of the company Usha Martin Ltd. How much amount of money is expensing on any kind of project like. Stage 2: After getting the Business Plan Sheet. 1st Quarter of the FY 2012-13 Productions (M T) Wire Rope & Conveyer Cord Wire & Strands Bright Bars 4. 18.975 Ranchi 19. We analyzed on the following question: 1.648 unit.000 39.ISMAL etc.13. How the company is performing its day to day activities? 2. The total production of the Wire Rope & Conveyer Cord for the first quarter would be 15975 MT in the 1 st quarter of the FY 2012-13.Interpretation . Wire and Strands 5 2 .475 MT + 500 MT Conveyor Cord productions. Here it is calculated as Wire production 15. 52 27.893. DOMESTI C- in domestic market as market company sales and cord.Bright Bars ISMAL/M.237 56.648 MT. wire and each is calculated by Wire Ropes and Cord. These include Total Home Rope+ Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor Mooring Ropes+ Roof Stitching Wires.included total production of strand + LRPC strand + Ply strand +wire . [ 535+8400+1500+9213] MT. The sales figure for multiplying quantity sold to its rate.Wire & Strands .7 8 Qty Rate Rs.Bright Bars Export . Norms Particulars Sales Domestic .Wire & Strand .1236(12.300 16.Wire Rope & C cord .919.973. In each the three main product groupings.675 2. Division Scrap 8.800 7.g. The expected production is 4000 MT.747./lacs 39.the company sales its products well as in foreign market (i.wire ropes strand.620.850 200 105. that equals 19.e. exports). Calculates as 6975+365+340+120+0.53 Interpretation. The items included are from Wire and Wire Ropes sheet.06 1. Also.623 Less : Excise duty NET SALES 75. Methods which is usedWeighted average rate method = Quantity * Rate * Excise Duty/ Total Quantity e.36% .393 52768 84.0 8 538.320 8. and bright bars.Wire Rope . The third component is bright bars.876 55.798 3.6 4 970.2 0 1.6 5 8863.445 29.9 6 110.7 8 2. .465. as per the division total Conveyor Cord domestic sales of 500 is also added (all units in MT).the estimated sales of Wire Rope and C Cord would be total 8300 MT quantities at the rate of INR 105393 per MT.575.9 5 6.Weighted average rate = {(6975*89876)+(365*163699)+(340*140000)+( 120*82000)+(0)+(500*98000)}/8300 (total quantity) excise duty) *1. 3 93 The final sales amount = 8300* 105.393 5 3 .=105. the total sales of Bright Bar in the domestic market would be 3800 MT quantity at the rate of INR 67788.237.the company would export Wire Rope in foreign market is 7675 MT at the rate of Rs. The sales amount = 7. Wire and Strands.1900 (rounded off).the expected value of the products that company will export in the Rate method - . Quantity taken directly from the total sales provided= 3800 MT. There is just one item included in bright bars. EXPORT – Wire Ropes and Cord. 84237 per MT.1236(12. Rate calculation . in lacs Wire and Strand – the expected sales of these products would be 16798 MT in the first quarter of the FY 2012-13.237 = INR 6. 9415 + 7383 + 0 = 16798 MT.17 MT.20 in lacs.95 in lacs (rounded off).=INR 87476.78 in lacs Bright Bars. These are Total Domestic Strand + Wire + Fine Wire i.36% excise duty provided) Total Sales = INR 2575. Rate calculations = {(7675* 84237) + (0)} / 7675 = INR 84.36% excise duty) =52. The final sales amount = 16798* 52768 = INR 8863.= (3800* 61458) / 3800 * 1.675 * 84. Calculation by Weighted Average {(9415*44837)+(7383*51671)+(0)}/ 16798(total weights) * 1.1236(12.465.e.76 8. Here two items are included for quantity calculation. would be INR (120*64176) + (1800*60793) + 5 4 . The total quantity is taken as the summation of PC Strands + LRPC Strands + Galv. 900+120+1800+30= 2850. 56876 per MT. Strands + Fine Wire. Rate calculations = {(900*47397) + (30*77000)} / 2850 = INR 56.96 lacs.876 The total amount 1620.1st quarter of the financial year 2012-13 is 2850 MT at the rate of Rs. The amount is directly taken from the financial statement.Bright Bars.08 lacs Scrap= 539 lacs EXCISE DUTYThis is taken on the market sales.425.270 561 315 224 200 38643 15.53 lacs.383. 538. Expenses Wire Rods Zinc Lubricant Fibre Other Raw materials Power Fuel Stores & Spares Contractor & Processing charges Freight & other selling expenses Other Expenses .74 1.91 As earlier it is mentioned that the company so much amount of capital . Quantity -200 MT and rate as INR 55.92 (amount in lacs) = INR 970.P & A Expense total : 41.604. Total Gross Sales less Excise Duty (as it is the amount paid as per Government requirement on production) gives the Net Sales INR 27.13 445.11 957.919.320 Hence total sale would be the product = INR 110.78 lacs.948.97 1. = 29. Hence rate and quantity are directly taken as per the financial statements given. MACHINERY DIVISION AND SCRAPThe total sales value of the scrap would be Rs.00 24. The M.61 332. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales.893 – 539 -28.64 lacs.09 1.66 256. There is no increment in costs to be provided.16 116000 105656 114488 4.953.655.70 650.this has just one major product under it.23 419.21 561. expenses in the production process. As company produces different types of products so the capital 5 5 . The company expenses large amount of capital on its major Raw materials Wire Rods for the manufacturing of its products. 1. The company uses 561 MT quantities at the rate of Rs. So the total expenses on Fibre are Rs. 256.66+256. . So the total expense on Wire Rods is Rs.09 lacs in first quarter of the FY 2012-13.P & A are Rs. Company also expenses capital on Stores & Spares. 15948. Rs. 419. The company demands 41270 MT quantities of Wire rods at the rate of Rs. fuel.70 per MT. 38643 per MT. Company has other extra expenses (e.61 lacs. The company uses 315 MT Lubricant at the rate of Rs. 332. It expenses Rs. Fuel. Contractor & Processing charges. Lubricant.655. 561.21 lacs on power in the first quarter of the FY 2012-13. The company expenses some amount of capital on Stores & Spares. 114488 per MT. 116000 per MT.51+332.857+86-100(15948+650. Company uses 200 MT quantities at the rate of Rs. Fibre. 1655.Power. But here the expenses are the other things that are required in the production process for example . The company spend Rs. coal). The company uses Zinc as a raw material for the production of its products. 105656 per MT.which is needed for the production is also different. fibre. Freight & selling Expenses).11 Raw materials purchased . lubricant and zinc) = 18. So the total expenses on Lubricant in the first quarter of the FY 2012 -13 are Rs. 650. on Contractor & Processing charges.Wire Rode (raw materials).11 lacs on consumed + other Raw materials. 4. Fibre is another important raw material that company demands 224 MT quantities at the rate of Rs . Freight & other selling expenses and Other Expenses. Company expenses Rs. Zinc.16 lacs in the first quarter of the FY 2012 -13.23 lacs on Fuel. In the production of some product company expenses less amount of capital and in other products it is high.09) =INR lacs. and other Raw materials like .adjustments for loss – major raw materials Every plant requires power (electricity.13 lacs. So the total value expense in the Zinc is Rs. 957. This would include Raw materials identified (wire rods.66 lacs.g. 1953.91 lacs in the first quarter of the Financial Year 2012-13.Net Sales minus the Expenses gives the Total PBIDT for the quarter 1.74 lacs and Rs. PBIDT.00 lacs respectively.97 lacs. 1425. 56 . The total expenses of the company are Rs. Rs. 24604.445. 327. [ 535+8400+1500+9363] MT.314.5 1 8954.314.145 16.281 MT + 600 MT Conveyor Cord productions.62 3.Wire & Strand .52 27.53 – 24. In each market company sales the three main product groupings.525 39.= 27. Wire and Strands included total production of strand + LRPC strand + Ply strand +wire . PBIDT 3. exports). wire and strand.798 MT. The sales figure for each is calculated by multiplying quantity sold to its rate.62 1.995.Bright Bars ISMAL/M.9 52.829 75.314.299 29. The third component is bright bars.e.62 lacs.wire ropes and cord.356 106.Wire & Strands .Wire Rope . 604.900 67788 7.3 7 2. .Wire Rope & C cord .The total production of the Wire Rope & Conveyer Cord for the second quarter would be 15881 MT in the FY 2012 -13.620. and bright bars.10 Interpretation./lacs 8869.643.995.5 8 1.the company sales its products in domestic market as well as in foreign market (i.62 2ND QUARTER OF THE FY 2012-13 Productions (M T) Wire Rope & Conveyer Cord Wire & Strands Bright Bars Interpretation .7 4 6. The expected production is 4150 MT.948 Rs. total production would be 39829 MT.91 = INR 3. Particulars Sales Domestic . that equals 19.Bright Bars Export . Here it is calculated as Wire production 15.836 3.919. Division Scrap Less : Excise duty NET SALES Norms Qty Rate 8.990. 5 7 . Calculated as 7050+366+340+0+0. The market stood absolutely constant. 67788per MT.327.e. There is no change in the export of Fine Wire and Strands.DOMESTI CWire Ropes and Cord. 900+120+1800+30= 2850.96 lacs. Bright Bars. Quantity taken directly from the total sales provided= 3900 MT. The total sales now stand at INR 6.58 lacs. Wire and Strands. Also.the company would export Wire Rope in foreign market is 7525 MT at the rate of Rs. There is just one item included in bright bars.this has just one major product under it.the expected value of the products that company will export in the financial year 2012-13 is 2850 MT at the rate of Rs. Quantity -250 MT and rate as INR 55. The total quantity is taken as the summatio n of PC Strands + LRPC Strands + Galv. 106145 per MT. Bright Bars. MACHINERY SCRAPDIVISION AND . Here two items are included for quantity calculation. These include Total Home Rope+ Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor Mooring Ropes+ R oof Stitching Wires.the estimated sales of Wire Rope and C Cord would be total 8356 MT quantities at the rate of Rs. The wire includes various types and on an average taking the weighted figures the rate has als o decreased. The items included are from Wire and Wire Ropes sheet. Wire and Strand – the expected sales of these products would be 16948 MT in the second quarter of the FY 2012-13. 84087 per MT.320 Hence total sale would be the product = INR 138. Strands + Fine Wire. as per the division total Conveyor Cord domestic sales of 600 is also added (all units in MT). These are Total Domestic Strand + Wire + Fine Wire i. The total amount would be INR 1620. EXPORT – Wire Ropes and Cord. 9415 + 7533 + 0 = 16948 MT.the total sales of Bright Bar in the domestic market would be 3900 MT quantity at the rate of Rs. Hence rate and quantity are directly taken as per the financial statements given.30 lacs. 56876 per MT. 41 lacs. On deduction of the domestic and export sales from the total sales mentioned in P&L the machinery division sale is ascertained as INR 513. 540. EXCISE DUTYThis is taken on the market sales. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales. Total Gross Sales less Excise Duty (as it is the amount paid as per Government requirement on production) gives the Net Sales . 5 8 . The M.The total sales value of the scrap would be Rs.49 lacs. The amount is directly taken from the financial statement. This happened because the overall increase in the sale amount was less compared to the total expenses incurred.487 565 312 224 201 38676 16.86 1.00 24. However.617. Zinc.683.045.11 331.29 1.53+35. Other raw materials include raw material purchased and consumed less already provided ones.10) comes to INR 446 lacs.99 Interpretation.70 655. Lubricant.94 561.10 The difference between the Net Sales and Expensed incurred gives the PBIDT.930 lacs.50+24.Expenses Wire Rods Zinc Lubricant Fibre Other Raw materials Power Fuel Stores & Spares Contractor & Processing charges Freight & other selling expenses Other Expenses .17+341.10 3. PBIT fell fr om INR 3314 to 3311(in lacs). Thus. .311. usually do not change over quarters.92 1.34 446. PBIDT 3. The raw materials consumed have increased by a very slight amount and now stands at INR 18.The expenses have been categorized into major heads which are easily traceable.P & A Expense total : 41.311.67 256. there is a slight decline in the profit value. Power and Fuel are taken directly from the consumption as provided. the total expenses are quite balanced to what we saw earlier. Apart from this the contract and processing charges including repairs and maintenance (45.425.23 419.18 961. The values of Wire Rods.45 116000 106291 114488 4.963. Freight and Distribution expenses are very similar to the first quarters as commission and discount percentages etc. 5 9 . 25 0 41. The items included are from Wire and Wire Ropes sheet.670.954.923./lacs 8.5 3 1.000 Rs. DOMESTI C- in domestic market as market company sales and cord. The expected production is 4250 MT.Wire Rope .599.the estimated sales of Wire Rope and C Cord would be total 8422 MT quantities at the rate of Rs. In each the three main product groupings.89 8 4.81 2. These include Tota l Home Rope+ . Wire and Strands included total production of strand + LRPC strand + Ply strand +wire .422 1.Wire Rope & C cord . Division Scrap Less : Excise duty NET SALES Norms Qty Rate 8.Wire & Strand .3rd Quarter of the FY 2012-13 Q3 FY 2012-13 Productions (M/T) Wire Rope & Conveyer Cord Wire & Strands Bright Bars 17.66 Interpretation. total production would be 41475 MT.419. Here it is calculated as Wire production 16727 MT + 600 MT Conveyor Cord productions. The sales figure for multiplying quantity sold to its rate. that equals 19.the company sales its products well as in foreign market (i.Bright Bars ISMAL/M.949 16. wire and each is calculated by Wire Ropes and Cord.05.711. and bright bars. 105949 per MT.Bright Bars Export .5 3 7.439.32 7 19. [ 535+8400+1600+9363] MT.898 MT.Wire & Strands .0 0 8.15 30.216 32.3 7 2.948 52.e.wire ropes strand.4 67.475 78.47 5 Interpretation . The third component is bright bars. exports).The total production of the Wire Rope & Conveyer Cord for the third quarter would be 17327 MT in the FY 2012 -13.788 41.836 4.020. Particulars Sales Domestic . .Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor Mooring Calculated as 60 Ropes+ Roof Stitching Wires. 320 Hence total sale would be the product = INR 138. Quantity taken directly from the total sales provided= 4000 MT. There is just one item included in bright bars.96 lacs. 9415 + 7533 + 0 = 16948 MT. The total quantity is taken as the summation of PC Strands + LRPC Strands + Galv.61 lacs. 67788per MT. Wire and Strand – the expected sales of these products would be 16948 MT in the third quarter of the FY 2012-13. The total sales now stand at INR 7599. EXPORT – Wire Ropes and Cord. Hence estimated value stands at INR 1876. There is no change in the export of Fine Wire and Strands. The wire includes various types and on an average taking the weighted figures the rate has also decreased.53 lacs. Hence rate and quantity are directly taken as per the financial statements given.this has just one major product under it. The M.the total sales of Bright Bar in the domestic market would be 4000 MT quantity at the rate of Rs. MACHINERY SCRAPDIVISION AND The total sales value of the scrap would be Rs. Bright Bars. 1000+120+1800+30= 2850. as per the division total Conveyor Cord domestic sales of 600 is also added (all units in MT). Bright Bars. The market stood absolutely constant. Also. Quantity-250 MT and rate as INR 55.the company would export Wire Rope in foreign market is 8905 MT at the rate of Rs.30 lacs. Wire and Strands. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales.the expected value of the products that company will export in the financial year 2012-13 is 2950 MT at the rate of Rs. 85340 per MT. These are Total Domestic Strand + Wire + Fine Wire i. 566. The total amount would be INR 1620. Here two items are included for quantity calculation. 56626 per MT.e.7175+387+340+0+520.02 lacs EXCISE . Strands + Fine Wire. On deduction of the domestic and export sales from the total sales mentioned in P&L the machinery division sale is ascertained as INR 791 lacs. It sees a positive growth more than the extent of the first quarter to INR 30. 6 1 .66 lacs. This was accounted for because of interdivisional sales and estimated increase in export of Wire Rope s.15 lacs. A deduction of the duty from the total sales would give the value of projected Net Sales for the third quarter.419.DUTYThe estimated excise duty payable is INR 2020. Expenses Wire Rods Zinc Lubricant Fibre Other Raw materials Power Fuel Stores & Spares Contractor & Processing charges Freight & other selling expenses Other Expenses .36 268.876. .01 1.171. = 101+20.362-100-18. The raw materials consumed have increased by a very slight amount and now stands at INR 2338.59 2. usually do not change over quarters. the total expenses are quite balanced to what we saw earlier.25 3.176 607 341 235 212 4. Thus.The expenses have been categorized into major heads which are easily traceable.339 lacs Freight and Distribution expenses are very similar to the second quarters as commission and discount percentages etc.4 1 Interpretation.89 361.338.876.25 PBIDT Will increase up to INR 3876.024(sum of raw materials already provided for) =INR 2.50 1. This accounted for due to increase in sales.97 480. PBIDT 3.015.25 lacs in the third quarter of the FY 2012 -13.76 2.70 38657 16. Power and Fuel are taken directly from the consumption as provided.5 7 703.543. Other raw materials include raw material purchased and consumed less already provided ones.690. Zinc.30 584.P & A 43.50 lacs.455.00 Expense total : 26. Lubricant. The values of Wire Rods.48 473. It included raw material consumed+ raw material purchased subtracting the losses and raw materials already provided for. 62 . that equals 19.Wire Rope . [ 535+8400+1600+9 363] MT.Wire & Strand .863.543 16. In each the three main product groupings.030 77. The sales figure for multiplying quantity sold to its rate. Sales Domestic .477 1.946. Division Scrap Less : Excise duty NET SALES 8.836 55. total production would be 41030 MT.4th Quarter of the FY 2012-13 Productions (M/T) Wire Rope & Conveyer Cord Wire & Strands Bright Bars 16. DOMESTI C- in domestic market as market company sales and cord.954.9 6 1.wire ropes strand.9 2 8. The third component is bright bars.0 9 Interpretation. Here it is calculated as Wire production 16132 MT + 600 MT Conveyor Cord productions. as per the division total Conveyor Cord . Also.320 41.3 7 2. and bright bars.Bright Bars Export . The expected production is 4400 MT.Wire & Strands .the estimated sales of Wire Rope and C Cord would be total 8477 MT quantities at the rate of Rs.779.73 2 19.024.15 8.898 MT.948 30052. Calculates as 7175+387+340+55+520.e.the company sales its products well as in foreign market (i.77 2.030 Interpretation . The items included are from Wire and Wire Ropes sheet.05.The total production of the Wire Rope & Conveyer Cord for the fourth quarter would be 16732 MT in the FY 2012 -13.3 2 165.719 31.Wire Rope & C cord .887. These include Total Home Rope+ Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor Mooring Ropes+ Roof Stitching Wires. Wire and Strands included total production of strand + LRPC strand + Ply strand +wire . 105543 per MT. exports).809.89 8 41.63 29. wire and each is calculated by Wire Ropes and Cord.Bright Bars ISMAL/M. domestic sales of 600 is also added (all units in MT). 6 3 . 1000+120+1800+30= 2950. There is just one item included in bright bars.96 lacs.46 lacs.the expected value of the products that company will export in the financial year 2012-13 is 2950 MT at the rate of Rs.15 lacs.09 lacs. On deduction of the domestic and export sales from the total sales mentioned in P&L the machinery division sale is ascertained as INR 724 lacs. The M. Wire and Strands. Hence rate and quantity are directly taken as per the financial statements given. The total amount would be INR 1670. Hence estimated value stands at INR 1809. MACHINERY SCRAP- DIVISION AND The total sales value of the scrap would be Rs. EXPORT – Wire Ropes and Cord. The market stood absolutely constant. 558. 84835 per MT. Quantity -250 MT and rate as INR 55. 9415 + 7533 + 0 = 16948 MT. 56626 per MT.e.this has just one major product under it. The total quantity is taken as the summation of PC Strands + LRPC Strands + Galv. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales. Strands + Fine Wire. Bright Bars. Bright Bars. . The wire includes various types and on an average taking the weighted figures the rate has also decreased.51 lacs. These are Total Domestic Strand + Wire + Fine Wire i.the total sales of Bright Bar in the domestic market would be 4100 MT quantity at the rate of Rs.Wire and Strand – the expected sales of these products would be 16948 MT in the fourth quarter of the FY 2012-13.the company would export Wire Rope in foreign market is 8255 MT at the rate of Rs. Quantity taken directly from the total sales provided= 4100 MT. There is no change in the export of Fine Wire and Strands. The total sales now stand at INR 7003. Here two items are included for quantity calculation.320 Hence total sale would be the product = INR 165. 67788per MT. EXCISE DUTYThe estimated excise duty payable is INR 2024.15 lacs. This was accounted for because of interdivisional sales and estimated decrease in export of Wire Ropes. 64 . It sees a negative growth less than the extent of the fourth quarter to INR 29863.63 lacs. 1 7 Interpretation.147.97 lacs. PBIDT 3.57 996.97 3. to the need of th e business firms.265.97 Interpretation. As expenses are directly linked to sales and with a fall of the same raw materials consumed will come down and hence a decrease. ASCERTAINING CAPITAL Working level OF WORKING capital The consideration of the level investment in current assets should avoid two danger points excessive and inadequate investment in current assets.05 473. On the other hand inadequate amount of working capital can be threatened solvency of the firms because of it s inability to meet it s current obligation.24 349.17 lacs.14 261. The total expenses now stand at INR 26.70 16.75 577.A deduction of the expected expenses from the Sales would give the projected PBIDT which is INR 3.00 26. It should be realized that the working capital .5 1 680.81 2.P & A Expense total : 42.147. not more or less. as idle investment earns nothing.715.715.455.732 586 329 229 208 38701 116000 106103 114488 4.56 1.in this quarter overall expected expenses is showing a fall.079. Excessive investment in current assets should be avoided because it impairs the firm s profitability.81 470.537.715. Investment in current assets should be just adequate. Though there is a fall compared to third quarter owing to fall in sales yet the value denotes healthy financials.72 2.Expenses Wire Rods Zinc Lubricant Fibre Other Raw materials Power Fuel Stores & Spares Contractor & Processing charges Freight & other selling expenses Other Expenses . need of the firms may be fluctuating with changing business activity. This may cause 6 5 . 00 41270 374 38643 116000 15948.excess or shortage of working capital frequently.75 Holding Months 3. 1ST Quarter of the FY 2012-13 Gross Current Assets Raw Materials Wire Rods Zinc Others Stores & Spares Stock in Process (Month's of net sales) Finished Goods (month's of net sales) Wire Ropes Wires Bright Bars Others Sundry Debtors (month's of gross sales) Export Domestic Other Expenses Other Expenses . Once the initial calculations were made based on the projected B Plan for 2012 -13.196. The different holding month’s are Wire Rods.74 392.234.13 2.00 8.25 0.326.81 7. Ramgar h.00 1.Materials -P&A 40743.Current liabilities./lacs 3.00 2. . Jamshedpur. Working Capital is calculated as Net Working Capital= Current Assets .49 738.00 1. T he management should be prompt to initiate an action and correct imbalance.91 Qt y Rate Rs.primarily sourced from its own company Usha Martin ltd.3 month .78 Gross Current Assets Interpretation . 41270 MT quantities would be required at the rate of INR 38643 MT for the manufacturing process in first quarter of the FY 201213.16 433. Sometimes company purchases Imported Wire Rode in case of special customer requirement. Few grades of Wire Rods sourced from Jindal Steel which is situated at a distance of 45 km in Patratu. the next step involved was determining Working Capital.052.50 419.The holding month’s data is directly taken from the Business Plan sheet as per company norms.00 2.15 0.63 5. 66 . Debtors (domestic) . Zinc is supplied from the smelters situated in Rajasthan. fibres.1 month Other Materialsmonth 1 Calculation of value of Current Assets based on the Holding Period given: Wire Rode. wire drawing to stranding to closing of ropes etc. Stock in Progress.it is determined that the projected need of the Wire Rode in the first quarter of the FY2012-13 would be 41270 MT. Zinc is purchased from Hindustan Zinc limited (world’s second largest zinc producer). Fibres – It mainly consists of imported sisal fibre and indigenously purchased jute and polypropylene fibre.Zinc. So to take care of this aspect stock in progress has also been taken into account for working capital determination.It is the second most important material required for manufacturing purpose. chemicals etc. lead . raw material Lubricants . ltd and Indian Oil Ltd respectively.Manufacturing of finished product takes a substantial amount of time as it has to undergo a number of processes stating from pickling of wire rods. So it takes more time then in domestic products.3 months –the company export its overseas products via ship. wire drawing soaps . Resultantly a significant amount of funds are blocked in the process stock. Because Export of products involves a huge no. hence the value of this assets would be - . Chittorgarh. N80-BA and Nuristan are imported lubricants purchased from Germany. Finished months goods0. of documentations and clearances at the loading and unloading ports hence time period for realization of export sales is 3 month s longer than the domestic debtors.2 months – The other primarily consists of Lubricants.2 months.lubricants purchased consists of WRL -55 and WRL-8 purchased from Usha lubes situated in Jamshedpur.25 months. kerosene oil are purchased indigenously from Eastern gases Pvt. passing through furnace.0. namely Debari Udaipur & Chanderiya . Fuel – Butane and High speed diesel. Other Raw Materials.75 Debtors (export) . = 41270/3*3 where 3 is the holding period Total Sales = 41270*38643 (Quantity *Rate) = INR 15947.96610lacs. 6 7 . 481. I t is expected to be INR 40743. Sundry Debtors.75 months).47 1. So the value determined is separated. Stores and Spares are the next expense determined which has no holding period.5 months.297. Lubricant.290.this represents the debtors to whom goods have to sale while. Zinc and other materials.7 1 23261.74 lacs.00 13. The Stock in Progress determines the holding period of unfinished products which are under process.4 Interpretation.00 1. Finished goods determine the company’s stock of goods that has not been yet sold.894. The credit given is of 2. for Export – 3 months and for Domestic – 1 month. The company has both.Zinc = 561/3*2 Total Sales 374*116000 = INR 433. The credit given is of 3 months. It is taken on the basis of Net Sales (0. Other expenses include the other raw materials and miscellaneous expenses to be included.15 lacs. = Current Liabilities Credit from Jamshedpur Zinc and other RM credit Credit for other Expenses Total Current Liabilities Net Current assets 2.50 3. as Ranchi is very near to Jamshedpur.this includes Zinc. It is taken on the basis of Net Sales (0.10 17. Other raw material includes Fiber and Lubricant.13 2. Domestic sales as well as Export sales. represent the value for that Wire Rode. this shows good terms of the company with its suppliers . so it helps to save the transportation cost.25 months).It is proclaimed from the Jamshedpur branch. As per holding period 2 months calculation it would come to INR 392.Current Liabilities company has to make payments. A sum of all the items gives the Gross Current Assets for the quarter. Fibre and other requirements.50lacs. in terms payments. of 68 . It includes power.The overall Current Assets of this quarter is estimated to have an increase than the last one.0 0 1. Fuel.12 726.39 419.15 – 17481.249.44 Lacs.71 = INR 23261. The projected value is INR 17.0 8.75 the first 3. Freight and Selling Expenses incurred.25 0.74 392.34 2. the estimated working capital requirement in quarter of the FY 2012-13 would be INR 23261. 2nd Quarter of the FY 2012-13 Gross Current Assets Raw Materials Wire Rods Zinc Others Stores & Spares Stock in Process (Month's of net sales) Finished Goods (month's of net sales) Wire Ropes Wires Bright Bars Others Sundry Debtors (month's of gross sales) Export Domesti c . Spar es.00 2.Materials Other Other Expenses -P&A 0. A summation of all the items gives the Total Current Liabilities.00 41487 376 38676 116000 16045.0 0 1.44 lacs. Holding period .14 40810.08 3.71 lacs Working Capital = Current Assets – Current Liabilities = 40743.92 5.45 436.Credit for all other Expenses. Therefore.00 2. The credit given is of 1 month for all expenses.03 Gross Current Assets Interpretation.086.481.332.84 7.121. 69 . Stock in Progress and Finished Goods would also very small change. The total Current Assets would be up to INR 40810.03 lacs. there would be little change of 2MT in Zinc. Sundry Debtors (Export) are expected to decline while in domestic sales there would be some increment.would remain the same. The quantity requirement of Wire Rods has increased from 41270MT to 41487 MT. Working Capital = 40810.21 lacs while other raw materials show a decline.25 3.Materials 1.408.97 5.0 Expenses 0 -P&A Other Gross Current Assets 9.50 3.371.00 2.82 Lacs.00 1.69 Finished Goods (month's of net sales) 0.21 = INR 23275. The total liabilities would increase by a lesser amount than the extent of the increase in assets.302.00 43176 38657 405 16690.534.30 974.Current Liabilities Credit from Jamshedpur Zinc and other RM credit Credit for other Expenses Total Current Liabilities Net Current assets 2. The working capital requirements for the second quarter will be decrease up to 50. 3rd Quarter of the FY 2012-13 Gross Current Assets Raw Materials Wire Rods Zinc Others Stores & Spares Stock in Process (Month's of net sales) 0.The supplier credit of Wire Rods is expected to rise to INR 13.75 Wire Ropes Wires Bright Bars Others Sundry Debtors (month's of gross sales) Export 3.48 2.49 44170.488.00 2.21 2.534.2 1 23275.00 13.8 Interpretation.860.0 0 Domestic 1.15 lacs.29 7.0 1 70 .371.534.703.0 0 Other .5 7 469.12 17.2 6 480.03 – 17.88 1. the extent is much lesser compared to the expected increase of Current Assets.80 3.998.63 lacs.908. Working Capital = 44170. The Stock in Progress and Finished Goods worth (calculated in terms of Net Sales) will also increase. Lubricant.48 lacs.6 3 Interpretation.417.3 9 25171.33 1.63 lacs. . The credit for Zinc.The Current Liabilities have increased by a large amount.00 1. however this even blocks a lot of funds as exports are realized in 3 months. Since the estimated sal es will be INR 44170. Therefore. The extent of increase in exports is much more than domestic.01 – 18.50 3. Other expenses includ e other raw materials will also increase as per sales growth.25 18.39 = INR 25171. This added to the increase in working capital requirements for the quarter.672. the estimated working capital requireme nt in the third quarter of the FY 2012-13 would be INR 25171. Current Liabilities Credit from Jamshedpur Zinc and other RM credit Credit for other Expenses Total Current Liabilities Net Current assets 2. Fibre and other raw materials is expected to increase. the stores consumption as projected in the B Plan came up to INR 480. The consumption of Wire Rods would increase by a larger amount to 43176MT while Zinc also stands at 405mt. However.01 lacs.00 13. Debtors both domestic and exports would be rise .Interpretation.As compared to the previous quarter this quarter is expected to see a good increase in sales.998. 7 1 . Debtors (export) are exp ected to decline while there would be some increment in domestic sales.60 5.556.24 473.75 Wire Ropes Wires Bright Bars Others Sundry Debtors (month's of gross sales) Export 3.Materials -P&A 1.496.68 Current Liabilities Credit from Jamshedpur Zinc and other RM credit Credit for other Expenses Total Current Liabilities 2.34 Finished Goods (month's of net sales) 0. There would be very small change in Stock in Progress and Finished Goods.713. 13.375. Holding period would remain the same.00 2.The overall Current Assets of this quarter is estimated to have a decrease than the last quarter .50 407.58 7.00 1.00 8.50 3.00 2.00 1. The quantity requirement of Zinc will also decrease up to 14MT.26 3.67 Interpretation.00 Domestic 1.56 947.72 18.00 Other Expenses Other Expenses . The total Current Assets adds up to INR 43243.599.488.67 lacs. The quantity requirement of Wire Rods would decrease from 43176 MT to 42732MT.51 453.54 Gross Current Assets 43243.781.4th Quarter of the FY2012-13 Gro ss C urrent Assets Raw Materials Wire Rods Zinc Others Stores & Spares Stock in Process (Month's of net sales) 0.00 42732 391 38701 116000 16537.6 6 .839.81 2.25 3. 7 2 . 01 PROJECTIONS CURRENT ASSETS CURRENT LIABILITIES WORKING CAPITAL 16.01 lacs. High investment in inventories and receivables is associated with lower profitability. Working Capital = 43243. Liquidity is a precondition to ensure that firms are able to meet its short-term obligations and its continued flow can be guaranteed from a profitable venture.01 Interpretation.481. The importance of cash as an indicator of continuing financial health should not net surprising in view of its crucial role within the business.15 17.713. and asset-liability mismatch may insolvency.82 QUARTER 3 44170.67 18713. this will help to reduce the working capital requirements for the quarter.66 = INR 24530.998 to INR 18.01 18998.66 24530. the decre ase in Current Assets would be INR 926. Thus. too much .03 17.66 lacs.34 lacs and in Current Liabilities it would be INR 284.21 23275. QUARTERS GLANCE AT A QUARTER 1 40743. However. This requires that business must be run both efficiently and profit ably.71 23261. The analyzed in financial statement needs and profitability of firms are examined to id entify the causes for any significant differences between the industries.67 – 18713. In the process.39 25171.44 QUARTER 2 40810.63 QUARTER 4 43243. the expected requirement of the quarter will be decrease while that of the last quarter. On the other hand.Net Current assets 24530.The Total Current Liabilities is estimated to decrease from INR 18. A firm is required to maintain a balance between liquidity and profitability while conducting its day to day operations. RECOMMENDATIONS: A well designed and implemented Analysis of Financial statement is expected to contribute positively to the creation of a firm’s value.73 lacs.534. focus on liquidity will be at the expense of profitability. 7 3 . Product: UMLs product has good demand in market  UMLs product are well tested and inspected by the world class testing authorities like ABS. etc it was quite an interesting experience to interact with the industry environment. Though the industry is a small one as compared to many others companies at Jamshedpur. I hope this project will prove as a turning point in my Management Career. Tata Motor. The industry is one of very unique in nature and the findings may be applied to similar type of industries only.IRS. They are well painted to give nice look . but there are certain problems like band & strikes & lack of infrastructural facilities Promotion: Promotion strategy such as participating in trade fairs are not enough to create awareness to customer  After sales service of UML is well appreciated Packaging: UML is at par with current packaging brands  The iron rods are used mostly these days. At this stage I strongly fell that the area of production is so vast that the Summer Training may be conducted again and again focusing on various aspect of the production in order to gain effectiveness and efficiencies. CONCLUSION (LEARN ING):The summer training was an endeavour to critically understand the practical implication of the Production process at an industry.LOYDS Price: Overheads are quite high as compare to other companies  From customer point of views due to high cost of UML product it loses certain prospective customer  From geographical point of view UML plant in Ranchi is well positioned . There are transparent and clear objectives which one has to achieve.17. Such as Tata Steel. 7 4 . co m 7 5 .com www.u shamartin.18.slidshere. BIBLIOGRAPHY: www.wikipedia.co m www.scribd.co m www.