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.

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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

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DECLARATION

I hereby declare that this project report entitled “A PROJECT REPORT ON

ASCERTAINMENT OF WORKING CAPITAL REQUAIREMENT OF USHA MARTIN

LTD. FOR THE FINANCIAL YEAR 2012-13” have been prepared by me in partial

fulfilment of the requirement for the award of MBA.

I also declared that the best of my knowledge, 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)

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Certificate of Guide

This is to certify that Mr. Manoj Kumar Pramanik, Enrol No: CUJ/01/2009/MBA/14 , 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.

No portion of this project report is pu blished or submitted to any other University or organization. This study was done for the fulfilment of the requirements of Summer Training Project of the MBA Program.

The information in the report is genuine to the best of his knowledge and has been collected from reliable sources, the Internet, and the annual reports of the Usha Martin. The analysis and compilation was the original work of the student based on secondary data.

He has completed his project satisfactorily. This certificate is being issue d for academic purpose.

CA- Rajiv Singh

Deputy Manager (Accounts and

Commercial) Usha Martin Limited.

Tatisilwai, Ranchi

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ACKNOWLEDGEMENT

There are times when one feels a sense of accomplishment combined with a sense of gratitude. Writing the acknowledgement page in this project is one among them. This project would have been a distant dream without the grace of almighty. So, first and foremost, I, profusely thank god for his blessings and grace, without which my project would not have seen the light of the day.

I would like to say thankful to Mr. ARVIND KUMAR HR Department, Usha Martin who has given me opportunity to do my internship in this organization.

I would like to say thank to HOD sir, Prof. TAPOSH GHOSHAL, Dean of School of Management Sciences, Central University of Jharkhand, who provided me a golden chance for Summer Training and my especial thanks to Mr. RAJIV SINGH, Finance Department, Usha Martin Ltd., for his guidance and appreciative support in spite of busy schedule at UshaMartin Limited.

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PREFACE

Summer training is essential to get the practical orientation of theoretical knowledge and analysis of the business realities at the corporate level. This 1 month training procedure made us understand the working culture of the business organization.

The summer training in this reputed Company had been a challenging and exciting experience which brought us closer to the business organization.

My topic is Ascertainment of Working Capital Requirement of Usha Martin Limited for theFinancial Year 2012-13(Wire Ropes and Speciality Product Division) in USHA MARTIN LIMITED, TATISILWAI RANCHI, JHARKHAND.

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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. 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.

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 allocationof funds, therefore, is an important function of financial management.

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TABLE OF CONTENTS

CONTENTS PAGE NUMBER

1. Company Profile 9-112. Board of Directors 11

3. Organizational Structure 12

4. Products 135. Vision, Mission and Quality Policy 14

6. Milestone 15-17

7. Manufacturing Process 17

8. Best Practices at Usha Martin 18-219. Corporate Social Responsibility 21

10. SWOT Analysis 22-2411. Core Competence 24

12. Achievement 25-31

13. Financial Analysis- Shareholding Pattern- Cash Management- Debtors Management- Inventory Management

31-39

14. Ascertaining of Working Capital- About Working Capital- Objective of the Study- Research Methodology- Working Capital Cycle- Working Capital Management

39-47

15. P/L Account & Working Capital Analysis- Problem Formulation- Analysis of P/L Account- Ascertaining of Working Capital

48-72

16. Recommendation 7317. Conclusions and My Learning 74

18. Bibliography 75

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1. COMPANY PROFILE:-

Usha Martin Limited, together with its subsidiaries, engages in the manufacture and sale of steel products in India and internationally. The company offers steel wire rods, rolled products, billets, pig iron, and allied products; wire and wire ropes products, such as steel wires, strands, wire ropes, cords, and bright bars; and related accessories, including wire drawing and allied machines, as well as jelly filled telecommun ication cables. It provides coil and bar products for wire rods and straight length applications; ropes for aerial, crane, elevator, engineering, fishing, mining, titan oil field, shipping, structural, and flexi and fancy fence applications; and wire and s trands for power, construction, automobile, general engineering, and binding/stationary applications. The company also offers structural products for suspension bridges, cable stayed bridges, tower guy strands, suspended roof structure, boom pendants, and architectural applications, as well as track ropes for bulk material handling systems, and fine and conveyor cords. In addition, it provides general engineering slings, sugar slings, pendant lines, grommet slings, cable laid slings, structural slings, deco rative slings, mooring lines, multi legged slings, stainless slings, flemish eye slings, and hand spliced slings, as well as slings with mechanical splicing with ferrule and steel sleeves. The company was founded in 1961 and is based in Kolkata, India. Ush a Martin Limited is a part of the Usha Martin Group.

I n c ep t ion of bu sin ess

Started in 1961 in Ranchi, Jharkhand as a wire rope manufacturing company, today the Usha Martin Group is a USD 1 billion conglomerate with a global presence. The group has set new standards in the manufacture of wire rods, bright bars, steel wires, speciality wires, wire ropes, strand, conveyor cord, wire drawing and cable machinery. With continuous growth in both the domestic and international markets, Usha Martin,

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the Group’s flagship company has emerged as India’s largest and the world’s second largest steel wire rope manufacturer.

For Usha Martin, the path to sustainable growth was long; the management constantly tried out innovative business practices. With initiative to diversify the customer base by venturing into the international markets, moving up the value chain and fully integrating its business process to maximize stakeholder value.

Th in kin g gl oba l

In 1979, the company set up a steel plant with wire r od rolling mill at Jamshedpur, to benefit from business integration. This ensured a steady supply of steel for the manufacture of value added products. Today, the Jamshedpur unit has a truly integrated speciality steel manufacturing facility of 700,000 MT per annum. Out of which, about35% is consumed internally by its plant in Ranchi, Hoshiarpur & Bangkok, producingsteel wire, steel strand, steel cords, bright bar and steel wire ropes. 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, Japan.

Goin g Gl oba l

With local success come global aspirations. Currently, the company has overseas manufacturing operations in Thailand, 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 company exports over 60% of the wire rope output and about 20% of the total wire rods produced.

L ookin g F orw a rd

Usha Martin’s future plans are focused on its operation in Jharkhand – a state rich in mineral resources. Future priorities include product mix enrichment, cost reduction and infrastructural improvements. Already flourishing in its recent foray into mining operations, the company is planning to invest in its iron ore and coal mines, sinter plant, pellet plant, power plants, while also enhancing its steel making and value added products capacity with an investment of Rs 2,100 crore.

Bu ild in g Brid ges

But what set Usha Martin apart is its unwavering commitment to social responsibility. For over three decades the company has invested ample man -hours and capital on community development projects for integrated prosperity in rural Jharkhand, througha CSR arm, Krishi Gram Vikas Kendra (KGVK).

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This NGO undertakes various development initiatives, following a model of Total Village Management (TVM). Focusing on key areas like Watershed development, agricultural productivity, better health practices, education, empowering women and enco uraging micro enterprise. In recognition to its effort Usha Martin has been awarded the prestigious TERI Award for Corporate Social Responsibility in 2006.

2. BOARD OF DIRECTORS: -

1. Mr. Prashant jhawar (chairman)

2. B K jhawar (chairman-Emeritus)

3. Brij k jhawar (Director)

4. N J jhawar (Director)

5. A K choudhari (Director)

6. Mr Ashok basu (Director)

7. Mr Salil singhal (Director)

8. Mrs Ramni nirula (director)

9. G n bajpai (Director)

10. Mr Nripendra mishra (Director)

11. Rajiv Jhawar (MD)

12. P Bhattacharya (JT MD)

13. Dr Vijay sharma (Ex Director & CE,steel business)

14. P K Jain (Ex Director & CE, wire & Wire rope)

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3. ORGANIZATIONAL STRUCTURE: -

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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 and engineering application canters in Ranchi andBangalore;

• 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. Coils and Bars.2. Bright and Bars.3. Ropes.4. Wire and Strand.5. Structural.6. Silings.7. Cord.8. Machinery.9. Telecables.

Use of Ropes:-

1. Arial rope.2. Crane rope.3. Elevator rope.4. Engineering rope.5. Fishing rope.6. Mining rope.7. Structural rope.

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Use of Wire and Strand:-

1. Power.2. Construction.3. Automobile.4. General engineering.

PRODUCT QUALITY /TESTING FACILITIES:-

1. ISO-9001 ANAB.2. ISO-9001 UKAS.3. ISO-14001.4. TPM certificate.5. API-certificate.6. ABS-manufacturing Assessment.7. ABS-API9A.8. DNV -certificate.9. Lloyd’s-certificate.10. 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.

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Compliance to all applicable statutory and regulatory.

Fostering the professional development of our employee.

Our suppliers and customers are our partner in progress.

6. MILESTONES:-

The Company is a part of the Usha Martin Group, which was formed in India in the early1960s with the establishment of Usha Martin Industries Limited (UMIL), engaged in the manufacture of steel wires, wire ropes and other related products. The group was promoted by Mr. B. K. Jhawar, who is the Chairman of the Company. Usha Beltron Limited was incorporated on 21 May, 1986 as a joint venture between Usha Martin Industries Limited, Bihar State Electronics Development Corporation Limited, AEG Kabel, Germany (now Kabelrhydt and a member of the Alcatel group) and DEG, Germany, to manufacture Jelly Filled Telephone Cables (JFTC). 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, 1998. Thereafter the registered office was shifted from Tatisilwai, Ranchi, Jharkhand to Kolkata in the State of West Bengal in the year 2000. The name of Usha Beltron Limited was changed to Usha Martin Limited with effect from 1st May, 2003.

Grou p Compa n ies

USSILUsha Siam Steel Industries (“USSIL") was incorporated in1980 as a joint venture between Usha Martin Industries, India and Leading Industrialists in Thailand - Promoted by Board of Investment ("BOI") for production of Steel Wires and Ropes.

USSIL became a Public Company Limited in 1997 and subsequently become a wholly owned subsidiary of the Usha Martin Limited, India.

USSIL is among the largest integrated Steel Wires, Industrial Strands, Control Cables and Wire ropes Plants based in the ASEAN region with an annual manufacturing capacity of36,000 MT.

UM SingaporeEstablished in 2000, is a wholly owned subsidiary of Usha Martin Limited, India. 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

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distribution set up in Australia, Vietnam & Indonesia.

BWWREstablished in 2003, Brunton Wolf Wire Ropes FZCO is a joint venture between Usha Martin Limited of India and Gustav Wolf of Germany.

BWWR is the first wire rope factory set up in the middle east, situated in Jebel Ali Free Zone Enterprise (FZE) with an annual capacity of 12,000 MT. The product range includes general engineering rope, elevator rope, crane rope, off -shore application rope, etc.

UM CablesA wholly owned subsidiary of Usha Martin Limited, located at Silvassa, Western India, manufactures PIJF Copper Telecom cables and Optical Fibre Cables and has an annual capacity of2.9 MCKM and 35000 RKM respectively.

UMILEstablished in 1997, Usha Martin International Limited is a wholly owned subsidiary of Usha Martin Limited, formed to facilitate distribution & marketing of the group’s wire & wire rope products in Europe. The company also acquired in 2001 a Nottinghamshire based Wire Rope manufacturing c ompany “Brunton Shaw UK” with an annual capacity of 6,000 MT. 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).

UM AmericaA wholly owned subsidiary of Usha Martin Limited, 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.

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7. MANUFACTURING PROCESS: -

(Wire & Strands)

a) The wire rod is sent for surface treatment for cleaning and then for drawing.After this it’s packed and despatched as direct drawn wire.

b) The drawn wire is patented and again drawn. Then it’s packed and despatched as

ungalvanised wire.

c) The drawn wire is galvanised and then it’s packed and despatched as galvanisedsteel wire.

d) The drawn wire is stranded & then packed and despatched as galvanised steel wire.

The drawn wire is again stranded and sent for induced heating and then it packed and despatched as P C Strand.

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(Ropes)

a) First the wire rod is sent for surface treatment for cleaning of the rod.

b) Then the cleaned rod is sent for drawing.

c) The drawn rod is sent for patenting and further for galvanisation.

d) After galvanisation the rod is again drawn and strands are

formed. e) The strands are coiled to form the “wire rope”.

8. BEST PRACTICES AT USHA MARTIN

A. Bu sin ess Drivers: - ( P QCDSM) .

1. Productivity.2. Quality.3. Cost-effective.4. Delivery.5. Safety.6. Moral.

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B. 5 S F r a m e w o r k : - 1. Sort. (To find out necessary as per value.)2. Set in order. (For reducing searching time.)3. Shine. (Remove dirt and dust.)4. Standardisation.5. Sustain.(Self -discipline).

TP M ( Tot a l P rodu c t ive M a in t en a n c e) p ol ic y:-

Productivity

5 SFramework

Speed

TPM pillars

Innovation.

Motivation

Cost Quality

Deliver

y

Mc K in sey 7’ S F ra mew ork

The model is most often used as a tool to assess and monitor changes in the internal situation of an organization.

The model is based on the theory that, for an organization to perform well, these seven elements need to be aligned and mutually reinforcing. So, the model can be used to help identify what needs to be realigned to improve performance, or to maintain alignment (and performance) during other types of change.

Whatever the type of change – restructuring, new processes, organizational merger, new systems, change of leadership, and so on – the model can be used to understand

1

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how the organizational elements are interrelated, and so ensure that the wider impact of changes made in one area is taken into consideration.

When it comes to asking the right questions, the website, Mind Tools (mindtools.com), has developed a checklist and a matrix to keep track of how the seven element s align with each other.

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

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WIRE AND WIRE ROPE DIVISION

The Usha Martin Ltd. is produce 100,000 MT / annum manufacturing facilities at Ranchi (Eastern India) is amongst the top four wire rope producers in the world. Since its inception, 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. Steel wire ropes manufactured by the division find wide applications in oil exploration, mining, elevators, Crane, fishing, construction, load transportation and general engineering sectors.

HOWRAH BRIDGE & INCHEON BRIDGE NEW SONGDO CITY, KOREA

9. CORPORATE SOCIAL RESPONSIBILITY:-

Usha Martin has strongly believed in its social responsibility being an

important part of business philosophy. The company has promoted Krishi

Gram Vikas Kendra (KGVK), as its’ social arms to take appropriate initiative in

various areas which affect health, social life and economic well being of people

for a period of over 35 years. Presently, 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.

KGVK has been taking on various activities in basic health, hygiene and

sanitation, education, women empowerment, community development,

agriculture, integrated watershed development, micro enterprise

development, capacity building and need based training to generate self

employment and

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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 has been getting active support from, and through alliance and

partnerships with, reputed national and international agencies such as US-

AID, CEDPA, FUTURE, CARE, CAPART, ICICI Bank, NFI, IRH, Georgetown

University, IFC Washington, World Bank funded SWA-Shakti, CINI,

JTDS, 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 250km respectively from downstream consuming centres, saving logistic

costs.

3. Geographic mix: The Company’s revenues are drawn from India (76%) and therest of the world (24%). Global revenues are drawn from 14 countries.

4. Product mix: The Company’s product portfolio comprises rolled products, steelwire 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 9000- certified. 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 31st 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.

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9. Engineering skills: The Company’s decades of engineering knowledge related to the manufacture of wire and cable–making machines helped optimise plant, equipment and production facilities.

10. Technology: The Company invested in cutting-edge technologies across its manufacturing units; it deployed an advanced ERP solution for operational support.

11. Social responsibility: The Company’s social initiative arm, an NGO namely Krishi Gram Vikas Kendra (KGVK) earned trust and respect for undertaking activities like education, natural resource management, health, trade facilitation, dairy, farming and livelihood, among others, across 350 villages Technology:

Weakness:

1. Machine & tools have become old & obsolete2. Over looked small customer.3. Semi – Automatic planned4. High production cost5. Demand of elevator ropes has increased due to global infrastructure

development6. Non effective advertising image

Opportunity:

1. UML can develop device for measuring breaking load2. Fishing is developing in the southern coastal cities3. Mushrooming of apartment in India & Abroad UMI can increase its profit,

its fives more emphasis on direct marketing with customer4. Now present condition reliance has found crude oil resources in Krishna

Godavari basin in south, new opportunities present for UML to produce rope5. UML can develop device for measuring brea king load6. Competition are not much strong in secondary market

Threat:

1. Low price of the rivals product are a great threat for UML2. High production cost3. Local political instability

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Comp et it ors:-

These are the main competitors of the company in this sector.1. E l a ng o I n dus t r i e s L t d . 2. I n du c t o S t ee l L t d . 3. J i n d a l S t a i n l e s s L t d . 4. M ah i n d r a U g i n e S t ee l C o m p a n y L t d . 5. M u k a n d L t d . 6. P a n c h m a h a l S t ee l L t d . 7. S h a h A ll o y s L t d .

11. Core Competence: -

Cost control: The vertical integration – from natural resources to wire rope – facilitatesthe adequate availability of key inputs at a significantly low cost compared with purchases from the open market and provides a near -complete control over the entire value chain, strengthening the Company’s competitive edge.

1. Quality products: The Company manufactures products where product quality is of paramount importance (namely wire ropes for critical applications). 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 Company’s wire ropes, earned the confidence of global customers and authorities of repute including OTIS, JIPM, ABS, API, LLOYDS and ISO, a recognition of its high quality.

2. Delivery speed. 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. Besides, a complete control on the value chain allows the Company

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to meet urgent client deliveries (when necessary), strengthening business relationships

3. Product basket Integration allows the Company to create a product range which caters to diverse applications across multiple sectors. For example, the Company’s wire rope product basket is one of the largest globally. This enables it to capitalise on most of the emerging opportunities in its business space. Besides, the Company’s presence across the value chain created multiple revenue verticals – pig iron, billets, structurals, bars, wire rods, wires, strands, cords and wire ropes –providing diverse growth drivers.

4. Customisation. Integrated operations help customise products to suit specialised applications for key customer requirements, enhancing customer loyalty.

5. Profit maximisation. A footprint across the value chain allows the Company to provide an optimum sales mix in line with the external environment helping maximise profitability. Besides, this business model enables the Company to protect its business profitability in adverse market conditions.

6. Capacity increase Complete control of the back-end of the value chain, namely iron ore and coal reserves, allows the Company to expand downstream capacities to capitalise on emerging stabilising cost opportunities

7. Cyclicality protection The Company is protected from the vagaries of price fluctuations in key inputs, namely iron ore and coal, stabilising costs. It also enables the Company to capture the upside in the marketplace when prices rise (without a commensurate increase in costs).

12. ACHIEVEMENTS:-

- The company was incorporated on 22nd May, and obtained the Certificate of Commencement of Business on 17th July, 1986. It was promoted jointly by Usha Martin Industries Ltd. (UMI) and Bihar State Electronic Development Corporation Ltd. (BSEDC).

- The Company undertook to set up a project for the manufacture of 5,00,000 conductor kilometres (CKM) per annum of jelly filled cables.

- 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.

1988

- 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

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skin type cable of size 1800 x 0.4 for the first time in India.

- 70 shares subscribed for by the signatories to the Memorandum of Association.70,99,930 shares were then issued at par out of which the following shares were reserved and allotted on a firm basis:

- (i) 16,96,930 shares to Usha Martin Industries Ltd., its directors, their friends, etc.;

- (ii) 18,46,000 shares to BSEDC;

- (iii) 10,72,000 shares to AEG - Kabel of West Germany and

- (iv) 7,10,000 shares to DEG of West Bermany. Out of the remaining 17,75 ,000 shares,3,55,000 shares were reserved for preferential allotment to employees, etc., but only14,800 shares taken up. The balance 14,20,000 shares along with 3,40,200 shares not taken up by employees, were offered for public subscription during April 1988 (All were taken up).

1989

- During May/June 1989, the company offered 14,20,000 rights equity shares in the prop. 1:5 (All were taken up). Simultaneously, 71,000 No. of equity shares were also offered to the employees on an equitable basis. Only 5,2 00 shares taken up. Balance65,800 shares allowed to lapse.

1994- The Company issued 10,00,000 No. of equity shares of Rs 10 each at a premium of Rs169 per share on preferential basis to promoters.

- During October, the Company issued 32,71,028 GDRs an d these representing32,71,028 No. of equity shares were issued at a price of Rs 335.66 per share.

- Usha Martin Telekom Ltd., a joint venture along with Usha Martin Industries Ltd. & Telekom, Malaysia have been providing cellular phone services in Calcutta under the brand name "COMMAND". 1996

- The Company was closely monitoring the development in power sector and was evaluating various options.

- Summit Usha Martin Finance Corporation Ltd. (Formerly Usha Martin FinanceCorporation Ltd.) became a 50:50 joint venture between Usha Martin Group ofIndustries & Sumitomo Corporation of Japan.

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- Other joint ventures of the company are Usha Siam Steel Industries Ltd., Usha MartinEurope Ltd. and Usha Martin Americas Inc. 1997

- The Company decided to spin-off the Software Division into one of the subsidiaries of the company.

- Usha Martin Industries Ltd. was merged with the company. After amalgamation company has become a multi-divisional company, covering the manufacture of pig iron, steel wires and wire ro ds, wire ropes and jelly-filed cables.

- 11,477,334 No. of equity shares issued to the shareholders of erstwhile Usha MartinIndustries Ltd. Pursuant to the Scheme of Amalgamation with the Company and13,56,200 No. of equity shares of Rs 10 each held by e rstwhile Usha Martin IndustriesLtd. were canacelled due to Amalgamation with the Company.

- Ubest a division of the Usha Beltron's Ltd. has signed an agreement with Swiss Telecom PTT to offer Indian cellular operators natel sim card application platform (sicap) software product for immediate implementation.

- 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, Germany to manufacture jelly filled tele-cables (JFTC).

- The company will have three major divisions -wire and wire ropes, software and telecom.

1998

- Crisil has downgraded the outstanding ratings of Usha Beltron Ltd. (UBL) and also removed them from rating watch.

- The Jhawars-promoted wire rope-to-jelly filed cables firm, Usha Beltron Ltd, is set to extend its activities into telecommunications in a big way.

- Usha Beltron's telecom foray will include extending activities to different fields of operating, maintaining and providing telecommunications services of all types and other value-added services and to design, instal and/or erect all types of telecommunication network systems and enter into joint venture agreement with Indian and foreign parties.

- Usha Beltron Ltd. of the Jhawars is all set to change its name to Usha Martin Ltd this fiscal, according to sources in the company. This is for the second time, in a span of justone year, that the company is going to change its name.

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- The company has initiated moves to r estructure its international marketing and distribution business.

- The Company embarked on creating a new cable manufacturing facility at Silvassa with a capacity of 27 lckm through UM Cables Ltd., a wholly owned subsidiary of the company.

1999

- The company has introduced a voluntary retirement scheme at its cable and wire rope factories in Ranchi from last month. 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.

- UM Cable Ltd, a wholly-owned subsidiary of Usha Beltron Ltd. belonging to the Rs.1,000-crore plus Usha Martin Group, is being launched in Silvassa, near Mumbai, to manufacture jelly-filled telecommunication cables.

- Usha Beltron Ltd. (UBL), the wire and wire ropes major of the Jhawar group, is setting up a holding company to streamline its overseas distribution network.

- Usha Communications Technology, a wholly-owned subsidiary of Usha Beltron Ltd, and Compaq Computer Corporation singed a comprehensive worldwide solution development marketing agreement on May 7 at Portland, Oregon, the US.

- UBL recently entered into an agreement with American Express Bank for funding worth $15 million. "The rest of the $10 million will be through equity expansion and bringing in a joint venture partner."

- Usha Beltron Limited, the flagship of the city-based Usha Martin Group, is setting up a joint venture with an Australian firm to produce leaded steels.

- 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 -- Usha Siam Limited.

- Umicor, UK, a joint venture between Usha Beltron Ltd. (UBL) and Exim Bank, has acquired EMMC UK, a firm specialising in providing services and solutio ns for the wire rope industry, for $3.5 million.

- While software companies are making a beeline for India, Usha Beltron Ltd. of theJhawars is setting up a holding company - Usha Communications Technology - for software development in the United Kingdom.

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- The new company is being set up in collaboration with Entryline Holdings Ltd, aPentire group company of the UK.

- Usha Beltron Limited (UBL), the city-based Jhawar group's flagship, 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, which is likely to be named UBEST America.

2000

- Usha Beltron is all set to joint the big league of corporates flourishing on growth opportunities inknowledge-based sectors such as infotech and telecom. The company has set up technical training centres.

- The Company has approved a Scheme of Arrangement proposed to be made between company and Usha Martin Infotech Ltd, (UMIL) and their respective shareholders.

- Usha Beltron Ltd, the flagship of the Calcutta-based Jhawars, will issue global depository receipts (GDRs) in a couple of months.

- Calcutta-based Usha Beltron has acquired the wire rope business of Brunton Shaw of the UK, a subsidiary of the 180-million Carclo, UK.

- The Company issued 35,00,000 Global Depository Receipts (each GDR represented by one equity share of Rs 10 each) at a price of US$3.25 per GDR.

2001

- Mr Pradip P. Shah, Director has resigned from the board effective from 24th January.

2002

-Ties up with Gustav Wolf of Germany to manufacture steel cords in India.

-Board approves in setting up of a Direct Reduced Iron (DRI) Plant with the capacity of100 KT per annum.

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-Usha Beltron Ltd announces the change in management as follows:

1. 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. Mr Dilip Mondal appointed as a nominee of Industrial Development Bank of India on the Board of the Company.

-Board approves for the issue and allotment of securites on preferential basis: 1)53,45,455 equity shares of Rs.5/- each of the company at a price of Rs.33/ - per share (inclusive of premium of Rs.28/- per share) being the price which is in accordance with chapter X111 of SEBI (Disclosure and Investor Protection) G uidelines to International Finance Corporation, Washington. 2) 53,45,455 equity shares of Rs.5/ - each of the company at a price of Rs.33/- per share (inclusive of premium of Rs.28/ - 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, Promoter Group, Directors, their relatives and associates. 3) The BOD have also decided toconvene an EGM on July 18, 2002 to consider the above matters.

-IFC signs agreement with UBL to invest Rs.120.5cr in the company.

-UMIL acquires 30,00,000 shares amounting to 9.45% voting rights on preferential allotment basis.

2003

- DEG financed Rs.50cr to UBL and the debt cost stands at Libor plus 275 basis points with 11 years time span.

-Purchases a wire rope plant in Dubai

-Acquisition of 49.55% stake in Usha Martin International Ltd, UK (UMIL)

-Ministry of coal alloted captive coal block in Jharkhand having a reserve of more than30 MN T and contains Grade A & B coal, which would be required by the company for itsSponge Iron (DRI Project) Plant expansion.

-Mr. T K Banerjee, Nominee of Life Insurance Corporation of India resigned from theBoard of Directors of the Company.

2005-Usha Martin executes a Business Transfer Agreement with JCT

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2007 - Usha Martin Ltd has appointed Mr. Suresh Neotia and Mr. Ashok Basu, as additional directors of the Company with effect from May 17, 2007.

- The Company has splits its face value from Rs5/ - to Rs1/-.2010

- Usha Martin Limited has appointed Dr. Vijay Sharma and Mr. P. K. Jain as executiveDirectors on the Board of the Company.

- Usha Martin Ltd has appointed (a) Mr. G N Bajpai as Additional Director [non - executive & independent] with effect from March 18, 201 0; and (b) Mr. Nripendra Misra as Additional Director [non-executive & independent] with effect from March 22, 2010.

- Usha Martin Ltd has appointed Mr. Jitender Balakrishnan as Additional Director (non - executive & independent) with effect from June 10, 2 010.

13. FINANCIAL ANALYSIS: -

Sh a reh ol d in g pa tt ern

Shareholding pattern - Usha Martin Ltd.

Holder's Name No ofShares

% ShareHolding

Promoters 88459017 29.03%

Foreign Institutions 52943476 17.37%

National Banks Mutual Funds 50900204 16.70%

Foreign Promoter 33336135 10.94%

General Public 31008972 10.18%

Financial Institutions 23206663 7.62%

Other Companies 20157943 6.61%

The shareholding pattern says that only around 10% of the total shares are open for the general public. The company’s shares had Face Value of INR 5.00 from 2003 to 2007;however the year ending ’08 it has been changed to INR 1.00 .

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% Share Holding

7.62%

6.61%

10.18%

10.94%

16.70%

29.03%

17.37%

Promoters

For eign Institutions

National Bank s Mutual Funds

For eign Pro

moter General

Public Financial

Institutions Other

Companies

CASH M AN AGEM EN T: -

M ea n in g a n d I mp ort a n c e of c a sh

Cash, 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. 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. Cash plays a very important role in the entire economic life of an organization. A firm needs cash to make payments to its suppliers, to incur day to day expenses and to pay salaries, wages, interest and dividend etc. C ash is money that is easily accessible either in the bank or any business.

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. This may be because:

Although huge profit have been earned yet cash may not have been received because of large credit sale was made.

Even if cash has been received, it may have drained out (used for someother purposes).

This movement of cash is of vital importance to the management, so propermanagement of cash is very important.

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Ca sh /fu n d ma n a gemen t

Cash/Fund, the most liquid assets is the vital importance to the daily operations of the business firms. The proportion of corporate assets held in the form of cash is very small, often between 1 and 3 percent, 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. It is generally referred to as the “life blood of a business enterprise”.

There are three possible motives for holding cash:

i. Transaction motiveii. Precautionary motive

iii. Speculative motiveThe need for holding cash arises from a variety of reasons which are briefly summarizedbelow.

Tra n sa c t ion mot ive

A company is always entering into transactions with other entities. While some of these transactions may not result in an immediate inflow/outflow of cash (e.g. credit purchases and sales), other transactions cause immediate cash inflow s and outflows. So firms always keep a certain amount as cash to deal with routine transactions where immediate cash payment is required.

P rec au t ion a ry mot ive

Contingencies have a habit of cropping up when least expected. A sudden fire may break out, accidents may happen, employees may go on strike, creditors may present bills earlier than expected or debtors may make payments later than warranted. 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.

Sp ec u l a t ive mot ive

Firms would like to tap profit making opportunities arising from fluctuation in commodity price, security price, interest rate, and foreign exchange rates. A cash rich firm is better prepared to exploit such bargains. Firms which have such speculative leanings may carry additional liquidity. Most firms their reserve borrowing capacity andmarketable securities would suffice to meet their speculative needs.

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Ca sh M a n a gemen t Cyc l e

Cash management is concerned with the managing of:

Cash flows into and out of the firm. Cash flows within the firm. Cash balances held by the firm at a point of time by financing deficit or

investing surplus cash.

It can be represented by a cash managemen t cycle as shown below. Sales generate cash which has to be disbursed out. The surplus cash has to be invested while deficit has to be borrowed. Cash management seeks to accomplish this cycle at a minimum cost. At the same time, it also seeks to achieve liquidity and control. The management of cash is important because it is difficult to predict cash flows accurately, particularly the inflows and there is no perfect coincidence between the inflows and outflows of cash. During some periods, cash outflows exceed cash inflow, because payment for taxes, dividends or seasonal inventory builds up. At other times, 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 management is also important because cash constitutes the smallest portion of the total current assets, yet management’s considerable time is devoted in managing it. 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 investmentopportunities.

Cash

Business

Operation

Collectio Deficit

Surplus

Information

Borrow

And control Cas

h

Payments

Invest

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DEBTOR S M AN AGEM EN T: -

The basic objectives of the debtor’s management are to optimize the return on investment on the assets. 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.

When a firm makes sale of goods and services and does not receive payment, it grants trade credit and creates Debtors accounts, which would be collected in the future. These represent the extension of credit on an open A/c by the firm to its customers, as the substantial amount is tied up in trade debtors; it needs careful analysis and proper management.

S i z e o f I n ve s t m e n t in D eb t o r s : Investment in debtors A/c is a major part of their assets in most of business enterprises. Debtors A/c is one of the major components of working capital. The financial executives should pay due attention to the management of debtors, so that each rupee invested in debtors may contribute to the net worth o f the organization.

T h e B a s ic P r o b l e m o f D eb t o r s M a n a g e m e n t : The basic problem of debtor’s management is the balancing of profitability & liquidity. 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.

The longer the period of credit the greater the risk, the greater the level of debt and greater the strain on the liquidity of the company.

I N VEN TOR Y M AN AGEM EN T: -

Inventory consists of raw material, semi-manufactured products and completely manufactured products. 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, (b) are in the process of production for such sales, or (c) are to be currently consumed in the production of goods or services to be available for sale”.

Every firm invests a huge amount to maintain a certain level of inventory, or say stocks. Thus a large portion of working capital is involved in stock. On an average, inventoriesare approximately 60% of the total current assets in public limited companies in India.

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The level of inventories for a firm depends upon the nature of its business. A manufacturing firm will have high level of all three types of inventories, while a retail or wholesale firm will have a very high level of finished goods, no raw material and no work in progress inventories.

Firm also maintain a fourth kind of inventory suppliers OR store s and spares. It includes office and plant cleaning materials like soap, brooms, oil, bulb etc. These materials do not directly enter in production but are necessary for production process.

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. Material is as much cash as cash as cash itself and any theft, waste and excessive use of materials leads to immediate and direct financial loss. The proces s of managing inventory is called INVENTORY MANAGEMENT.

P U R P OSE F OR H OL DN G I N VEN TOR Y

As we all know that huge fund is required to maintain a certain level of inventory, so the question is if it is expensive to maintain inventory, 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. Sometime it is not possible for the company to procure raw material whenever it is needed. Also there exists uncertainty i n procuring raw material in time in many occasions. The procurement of material may be delayed because of such factors as, transport, disruption, short supply, strike etc. Therefore, the firm should maintain sufficient stock of raw materials at a given ti me to streamline production.

Other factors which may necessitate purchasing and holding of raw material inventories are quantity discount and anticipate price increase. 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. At times the firm would like to accumulate raw material in anticipation of price rise.

Thus there are three general purposes for holding inventories:

Transaction motive

Precautionary motive

Speculative motive

1. TRANSACTIONS MOTIVE: It emphasizes the need to maintain inventories to facilitate smooth production and sales operation.

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2. PRECAUTIONARY MOTIVE: It necessitates holding of inventories to guard against the risk of unpredictable change in demand and supply forces and factors.

3. SPECULATIVE MOTIVE: It influences the decision to increase or deduce inventory level to take advantage of price fluctuations.

OBJECTI VES OF I N VEN TOR Y M AN AGEM EN T

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. Some other objectives are as below;

Ensure a continuous supply of raw material to facilitate uninterrup ted production.

Maintained sufficient stock of raw material in period of short supply and anticipate price changes.

Maintain sufficient finished goods inventory for smooth sales operation and efficient customer service.

Minimize the carrying cost and time and

Control investment in inventories and keep it at an optimum level.

I N VEN TORI ES M AN AGEM EN T TECH N I QU ES

Various techniques commonly used for inventory control are listed below:

ABC technique

Stock level – minimum, 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 N I QU E

ABC Technique is a value based system of material control. In this technique material are analyzed according to their value so that costly and more valuable materials are given greater attention and care. All items are classified according to their value ie, high, medium and low values, which are known as A, B and C items respectively.

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A i t e m s : High in value and low in quantity. These items engage 70% of funds and 10%of space in the inventory.

B i t e m s : Medium in value and medium in quantity. These items engage 20% of funds and 20% of space in the inventory.

C i t e m s : Low in value and high in quantity. These items engage only 10% of fund and70% of space in the inventory.

Thus the ratio between A, B and C is as follows:-

1. PRICE WISE – 7:2:1

2. QUANTITY WISE – 1:2:7

STOCK L EVEL S

In order to check under stocking and over stocking most of the large companies adopt a scientific approach of fixing stock levels.

These levels are:

Maximum level = Re – order level + Re – order quantity – (Max. consumption* Max. 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.

ECON OM I C OR DER QU AN TI TY ( 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. It is also called RE -ORDER QUANTITY.

EOQ=√ (2*O.C.*A.D./C.C)

Where,

O.C. = Ordering cost, the cost of placing an order.

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A.D. = Annual demand, annual consumption of material in units.

C.C. = Carrying cost, this is the cost of holding the stock in

storage.

I N VEN TOR Y TR U N OVER R ATI O TO R EVI EW SL OW AN D N ON -M OVI N G M ATERI AL

Inventory turnover ratio tells us how many times in a year stock are used up and replaced. The greater the stock turnover, the more efficient is the stock policy.

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, 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

P ER P ETU AL I N VEN TOR Y SY STEM

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 PR ICN IN G OF MATER IAL S

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. ASCERTAINING OF WORKING CAPITAL: -

A b o u t W o r k i n g C ap i t a l One of the most important areas in the day-to-day management of the firm deals with the management of Working Capital, which is defined as the short-term assets used in daily operation.

Funds are needed for short term purposes for the purchase of raw materials,payment of wages and other day to day expenses etc. These funds are known as

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WORKING CAPITAL. 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, marketable securities, debtors and inventories. Funds, 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. 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.

Long term funds are required to create production facilities through purch ase of fixed assets such as plant and machinery, land, building, furniture, etc. Investments in these assets represent that capital which is fixed.

Kinds ofWorking Capital

On the On the Basis of basis of Concept time

Gross Working Net Working Variable FixedCapital Capital working working

Capital Capital

Special Seasonal Reserve RegularWorking Working Working WorkingCapital Capital Capital Capital

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Cl a ssific a t ion of w orkin g c ap it a l :

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 CAPITALb) NET WORKING CAPITAL

a) G r o s s w o r k i n g c ap i t a l : 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:

CashShort term securitiesDebtorsBills receivableInventoryTemporary 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) N e t w o r k i n g c ap i t a l : Net working capital is the difference between current assets and current liabilities.According to this concept working capital refers to the difference betweencurrent assets and current liabilities. It is the excess of current assets over current liabilities. Current liabilities refers to the claims of outside which areexpected to the mature payment within an accounting year.

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It includes –

Creditors for goodsBills payableBank overdraftShort term bank loans and advancesPrepaid expenses

Net working capital can be “positive” or “negative”.

P o s i t i v e n e t w o r k i n g c a p i t a l : it arises when current assets exceed current liabilities.

N e g a t i v e n e t w o r k i n g c a p i t a l : it occurs when current liabilities are in excess ofcurrent assets.

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.

Thus gross working capital concept is financing or going concern concept whereas net working capital is an accounting concept of working capital. Both concepts have go t their own merit, but in general practice net working capital is given more priority.

On t h e ba sis of p eriod ic it y of requ iremen t -

F i x e d & p e r m a n e n t w o r k i n g c ap i t a l : 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. It increases as the size of the business expands. Such as investment required the maintenance of minimum quantity of raw material, work-in-progress, finished products e tc.

The permanent working capital can again be sub divided into two parts: Regular working capital Reserve margin working capital

R e g u l a r w o r k i n g c ap i t a l : 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.

R e s e r v e m a r g in o f w o r k i n g c ap i t a l : It is the excess capital over the need or regular working capital that should kept in reserve for contingencies that may arise at any time. These contingencies include rising price. Business depression,

strikes, special operations such as experiments with new product etc.

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V a r i a b l e w o r k i n g c ap i t a l : Variable working capital change with the increase or decrease in the value of business. It may also be sub divided into seasonal and special working capital.

o S e a s o n a l v a r i a b l e w o r k i n g c ap i t a l : The working capital to meet the seasonal liquidity of the business is seasonal variable working capital.

o S p e c i a l v a r i a b l e w o r k i n g c ap i t a l : It is the part of variable working capital which is required for financing special operations such as extensive marketing campaigns, experiments with product or model of production.

OBJECTI VES OF TH E STU DY

TO study and analyze the working capital policy of the USHA MARTIN LTD.

TO study the affairs of the company with refe rence to the working capital ascertainment and methods of its estimation used in the company.

To understand the general performance of the company.

To use quantities data for defining company’s financial performance.

To know the profitability, production and efficiency of the firm.

To study the methods of financing working capital.

To analyses the performance effectiveness of the company.

R ESEAR CH M ETH ODOL OGY

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.

Primary data:

1. Interview schedules with officers of account department.

2. Interview schedules with officers of inventory department.

3. Interview schedules with officers of cash department.

4. Interview schedules with officers of purchase department.

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Secondary Data:

1. Annual report of the company.

2. Company’s data records.

3. Company’s website.

WOR K I N G CAP I TAL CY CL E

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 dayscredit is extended to debtors.

DEBTORS CASH

SALES RAWMATERI ALS

FINISHEDGOODS

WORK I NPROGRESS

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 thesuppliers.

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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.

Workin g c ap it a l ma n a gemen t :

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 isconcerned 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.

D e f i n i t i o n : 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 policy2. Cash and liquidity management3. Credit management4. Inventory management5. Working capital financing6. Working capital management: extensions

1. W o r k i n g c ap i t a l p o l i c y : Working capital management is a significant fact of financial management its important stems policy is two reasons:

1. Investment is current assets represents substantial portion of total investment.

2. Investment is current assets and the level of current liabilities has to begeared quickly to changes in sales.

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Working capital policy is divided into seven heads, these are as follows:1. Characteristic of current assets2. Factors influencing working capital requirements3. Level of current assets4. Current assets financing policy5. 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.Current assets have a short life span. Cash balance may be held idle for a week or two; account receivable may have a life span of 30 to 60 days, and inventories may be held for 30 to 100 days. It depends upon the time requir ement.

(B)Factors influencing working capital requirements:The working capital need of a firm is influenced by numerous factors. The important ones are:

a) Nature of businessb) Seasonality of operation c) Production policyd) Market conditionse) Condition of supply

a) Nature of business: The working capital requirement of a firm is closely related to the nature of its business. A service firm, like electricity undertaking, it has a short operating cycle and its sales predominantly on cash basis, has a modest working cap ital requirement. On the other hand a manufacturing concern likes a machine tools unit, which has a long operating cycle and which sales largely on credit have a very substantial working capital requirement.

b) Seasonality of operation: Firms which have marked seasonality in their operations usually has highly fluctuating working capital requirements. To consider firm manufacturing ceiling fans, the sale of ceiling fan reaches a peak during the summer months and drop sharply during the winter period.

c) 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.

d) Market condition: The degree of competition prevailing in the market place has an important bearing on working capital need.

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e) Condition of supply: The inventory of raw material spares and stores depend on the condition of supply. If the supply is prompt and adequate, the firm can manage with small inventory. A similar policy may have to be followed when the raw material is available only seasonally and operation is carried out around the year.

(C) Level of current assets:An important working capital policy decision is concerned with

the level of investment in current assets. Under a flexible policy, the investment in current assets is high and under a restrictive policy the investment in current assets is low.

(D) Current assets financing policy:After establishing the level of current assets, 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.

Several strategies are available to a firm for financing its capital requirements.

Strategy A: Long term financing is used to meet the fixed assets requirements as well as peak working capital requirement. When the working capital requirement is less than its peak level, the surplus is invested in liquid assets.

Strategy B: Long term financing is used to meet fixed assets requirement, permanent working capital requirement and a portion of fluctuating working capital requirement during seasonal up wings, short term financing is used during seasonal down swing, surplus is invested in liquid assets.

Strategy C: Long term financing is used to meet fixed assets requirement and permanent working capital requirement. Short term financing is used to meet fluctuating working capital requirement.

(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. For reversible investment the certain of net profit perperiod is equivalent to the certain of net present value.

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15. PROFIT & LOSS ACCOUNT AND WORKING CAPITAL ANALYSIS

Working capital levelThe consideration of the level investment in current assets should avoid twodanger points excessive and inadequate investment in current assets. Investment in current assets should be just adequate, not more or less, to the need of th e business firms. Excessive investment in current assets should be avoided because it impairs the firms’ profitability, as idle investment earns nothing. 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. This may cause excess or shortage o f working capital frequently. The management should be prompt to initiate an action and correct imbalance .

Expected value of the P/L Account of the Ranchi unit.Usha Martin Limited

Projected Profitability of Ranchi unit for FY 2012 -13

Rs./lacs

Pr o du c t i o n s ( M / T ) Wire

Q1 FY 2012-13 Q2 FY 2012-13 Q3 FY 2012-13 Q4 FY 2012-13 Total FY 2012-13

Rope & Conveyer Cord Wire & Strand sBright

15,975

19,648

15,881

19,798

17,327

19,898

16,732

19,898

65,915

79,240

Bars 4,000

4,150

4,250

4,400

16,800

Particu N lars or

ms

S ale s

Qt Rat y e

39,623Rs./ Qt lacs y

Rat e

39,829Rs./ Qt lacs y

Rat e

41,475Rs./ Qt lacs y

Rat e

41,030Rs./lacs

Qty Ra te

1,61,955Rs./l acs

Domes tic - Wire Rope & C cord

8, 1,030 5,30 93

8,747.65

8, 1,035 6,16 45

8,869.51

8, 1,042 5,92 49

8,923.00

8, 1,047 5,57 43

8,946.92

33,555

35,487.08

- Wire& Strand

16 52,,7 76898

8,863.78

16 52,,9 8348 6

8,954.37

16 52,,9 8348 6

8,954.37

16 52,,9 8348 6

8,954.37

67,640

35,726.89

- Bright

3, 67,80 788

2,575.

3, 67,90 78

2,6 4,43. 00

48

67,78

2,711.

4, 67,10 78

2,779.

15,80

10,710.5

Bars 0 .17 95 0 8 74 0 8 53 0 8 32 0 3

Export- WireRope

7, 84,67 2375

6,465.20

7, 84,52 085 7

6,327.58

8, 85,90 345 0

7,599.53

8, 84,25 835 5

7,003.15

32,360

27,395.46

- Wire& Strand s

2, 56,85 8760

1,620.96

2, 56,85 870 6

1,620.96

2, 56,95 620 6

1,670.46

2, 56,95 620 6

1,670.46

11,600

6,582.86

- Bright Bars ISMAL/ M.Divis ion

20 55,0 320

110 25.64 0

970.08

55,320

138.30

895.76

25 55,0 32

0

138.30

1,876.02

30 55,0 32

0

165.96

1,809.09

1,000

553.20

Scrap 538.78

540.41

566.61

558.51

Less : Excise duty

NET

39 75,,6 44523

29, 39893 ,8.06 29

1,973.52

75,299

29,990.62

1,995.52

41 78,,4 2175 6

32,439.81

2,020.15

41 77,,0 7130 9

31,887.77

2,024.63

1,61,955

71 1,16,,9 456.06 02

SALES 27,919.53

27,995.10

30,419.66

29,863.15

E x p e n s esWireRods 41

,270

Zinc561

386 3843 15, 41 67

948 ,4 6.16 87

116 11000 650 56 60

.61 5 00

16,045.45

655.11

3843 65,1 776

1160 607 00

16,690.57

703.89

3842 70,7 132

1158 606 00

16,537.51

680.24

1,68,665

2,319

65,221.68

2,689.86

Lubric ant

31 105 31 105 656 332 2 62

.66 91331.67

34 101 59

82361.36

32 109 61

03349.14

1,297

1,374.83

Fibre 224

Other Raw materi als Power

114 22488 256 4

.09

1,655.11

4.7 20

114488

4.7

256.92

1,617.18

23 115 44

88

21 4.7

268.59

2,338.50

22 119 44

88

20 4.7

261 91.72 1

2,265.57

1,043.32

Fuel

20 0 957 10 .21

0 961 2.94

0 1,0 815.30

0 996.75

820.68

3,931.21

49

Stores& Spares Contra ctor & Proces sing charge s Freight& other selling expens eOther Expens es - P& AExpens

561.23

419.13

445.97

1,953.74

1,425.00

561.23

419.34

446.29

1,963.86

1,425.00

584.97

480.48

473.76

2,171.01

1,455.00

577.05

473.81

470.81

2,079.56

1,455.00

2,284.47

1,792.76

8,168.17

e total : 24,604.91

24,683.99

26,543.41

26,147.17

86,506.29

PBIDT

3,314.62

3,311.10

3,876.25

3,715.97

29,949.74

3,314.62

3,311.10

3,876.25

3,715.97

3,314.62

3,311.10

3,876.25

3,715.97

0.00

- 0.00

0.00

P r o bl em fo r m ul ati o n: -

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.

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. According to that the marketing department does the market survey. That survey report they submit to the company. 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.

50

What? -According to the forecasted figure, which is given by the marketing department, 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 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.

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. 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, rope, conveyer cord, strands and bright bars.

According to this company manages fund that keeps as inventory, which is needed in production so that the production process does not stop. The company also keep watch on holding period, because if the holding period increases, then company has to incur additional capital and probably the chance of bad debt increases. 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.

After the management of working capital the company procure s the raw materials i.e. used in production process. Company brings its main raw materials i.e. wire rode from its Jamshedpur Unit. The company Usha Martin basically produces wire and wire rope. These are the main products i.e. manufactured by its Usha Martin Ltd. Ranchi unit. For proper running of the machine different kind of fuels are being required, that the company has to keep in advance any time.

Project Stages: -

Stage 1: -

First of all the Business Plan sheet (as a primary data) is given to me on behalf of thecompany where following are the things are mentioned: -

1. Highlights of the Business Plan2. Business Plan Norms3. Contribution Summery4. Wire and Wire Rope Contribution5. SPD Contribution6. P&L Overall Ranchi7. Expenses Overall8. P&L WWR9. Expenses of WWR10. P/L Machinery Division11. Expenses of Machinery Division12. P/L ISMAL

5

1

15,97519,648

4,00039,623

13. Expenses of ISMAL14. P/L Power Project15. Expenses of Power Project16. Consumption17. Power Plant Working18. 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., Ranchi unit.

Stage 2: -

After getting the Business Plan Sheet, we carefully understand and analyzed that what is happening actually in the company. We analyzed on the following question: -

1. How the company is performing its day to day activities?2. How the funds are raising by the company?3. From where the company is getting raw materials for its production?4. What are the consumption norms?5. How much inventory is company maintaining for the uninterrupted

production process?6. How much amount of money is expensing on any kind of project like-

- WWR- Machinery Division- Power Project- ISMAL etc.

Stage 3: -

After the carefully analyzing of Business Plan, I prepared a consolidated P/L account ofRanchi unit.

An a l ysis of P /L a cc ou n t qua rt er w ise of Ra n ch i u n it . -

1st Quarter of the FY 2012-13

P r o duc t i o n s ( M T) Wire Rope & Conveyer CordWire & StrandsBright Bars

Interpretation- The total production of the Wire Rope & Conveyer Cord for the first quarter would be 15975 MT in the 1st quarter of the FY 2012-13. Here it is calculated asWire production 15,475 MT + 500 MT Conveyor Cord productions. Wire and Strands

52

Norms Qty Rate Rs./lacs

8,300 105,393 8,747.6516,798 52768 8863.78

3,800 67788.17 2,575.957,675 84,237 6,465.20

2,850 56,876 1,620.96200 55,320 110.64

970.08538.78

39,623 75,445 29,893.06

1,973.5227,919.53

included total production of strand + LRPC strand + Ply strand +wire , [535+8400+1500+9213] MT, that equals 19,648 MT. The third component is bright bars. The expected production is 4000 MT.

Particulars

S a l es Domestic - Wire Rope & C cord

- Wire & Strand- Bright Bars

Export - Wire Rope- Wire & Strands- Bright Bars

ISMAL/M. Division Scrap

Less : Excise dutyNET SALES

Interpretation- the company sales its products in domestic market as well as in foreign market (i.e. exports). In each market company sales the three main product groupings- wire ropes and cord; wire and strand; and bright bars. The sales figure for each is calculated by multiplying quantity sold to its rate.

DOMESTIC-

Wire Ropes and Cord- the estimated sales of Wire Rope and C Cord would be total8300 MT quantities at the rate of INR 105393 per MT. The items included are from Wire and Wire Ropes sheet. These include Total Home Rope+ Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor Mooring Ropes+ Roof Stitching Wires. Calculates as6975+365+340+120+0. Also, as per the division total Conveyor Cord domestic sales of500 is also added (all units in

MT). Methods which is used-

Weighted average rate method = Quantity * Rate * Excise Duty/ Total Quantity

e.g. - Weighted average rate ={(6975*89876)+(365*163699)+(340*140000)+( 120*82000)+(0)+(500*98000)}/8300 (total quantity) *1.1236(12.36% excise duty)

=105,393

The final sales amount = 8300* 105,393

53

=INR 87476.1900 in lacs (rounded off).

Wire and Strand – the expected sales of these products would be 16798 MT in the first quarter of the FY 2012-13. Here two items are included for quantity calculation. These are Total Domestic Strand + Wire + Fine Wire i.e. 9415 + 7383 + 0 = 16798 MT.

Calculation by Weighted Average Rate method - {(9415*44837)+(7383*51671)+(0)}/16798(total weights) * 1.1236(12.36% excise duty)

=52,768.

The final sales amount = 16798* 52768

= INR 8863.78 in lacs

Bright Bars- the total sales of Bright Bar in the domestic market would be 3800 MT quantity at the rate of INR 67788.17 MT. There is just one item included in bright bars. Quantity taken directly from the total sales provided= 3800 MT.

Rate calculation - = (3800* 61458) / 3800 * 1.1236(12.36% excise duty provided)

Total Sales = INR 2575.95 in lacs (rounded

off). EXPORT –

Wire Ropes and Cord- the company would export Wire Rope in foreign market is 7675MT at the rate of Rs. 84237 per MT.

Rate calculations -

= {(7675* 84237) + (0)} / 7675

= INR 84,237.

The sales amount = 7,675 * 84,237

= INR 6,465.20 in lacs.

Wire and Strands- the expected value of the products that company will export in the1st quarter of the financial year 2012-13 is 2850 MT at the rate of Rs. 56876 per MT. The total quantity is taken as the summation of PC Strands + LRPC Strands + Galv. Strands + Fine Wire. 900+120+1800+30= 2850.

Rate calculations -

= {(900*47397) + (120*64176) + (1800*60793) + (30*77000)} / 2850

= INR 56,876

The total amount would be INR 1620.96 lacs.

54

41,270 38643 15,948.16

561 116000 650.61

315 105656 332.66

224 114488 256.091,655.11

200 4.70 957.21561.23

419.13445.97

1,953.741,425.00

24,604.91

Bright Bars- this has just one major product under it. Hence rate and quantity are directly taken as per the financial statements given. Quantity -200 MT and rate as INR55,320 Hence total sale would be the product = INR 110.64 lacs. There is no incrementin costs to be provided.

MACHINERY DIVISION AND SCRAP-

The total sales value of the scrap would be Rs. 538.78 lacs. The M. Division amount

is ascertained as deduction of scrap and total sales (both domestic and export) from

the Total Gross Sales.

= 29,893 – 539 -28,383.92 (amount in lacs)

= INR 970.08 lacs

Scrap= 539 lacs

EXCISE DUTY-

This is taken on the market sales. The amount is directly taken from the financialstatement. Total Gross Sales less Excise Duty (as it is the amount paid as perGovernment requirement on production) gives the Net Sales INR 27,919.53 lacs.

E x pens es

Wire Rods

Zinc

Lubricant

FibreOther Raw materialsPowerFuel

Stores & SparesContractor & Processing chargesFreight & other selling expensesOther Expenses - P & A

Expense total :

As earlier it is mentioned that the company so much amount of capital expenses in the

production process. As company produces different types of products so the capital

55

which is needed for the production is also different. In the production of some

product company expenses less amount of capital and in other products it is high. But

here the expenses are the other things that are required in the production process for

example - Wire Rode (raw materials), Zinc, Lubricant, Fibre, and other Raw materials

like - Power, Fuel. Company also expenses capital on Stores & Spares, on Contractor

& Processing charges. Company has other extra expenses (e.g. Freight & selling

Expenses).

The company expenses large amount of capital on its major Raw materials

Wire Rods for the manufacturing of its products. The company demands 41270 MT

quantities of Wire rods at the rate of Rs. 38643 per MT. So the total expense on Wire

Rods is Rs.

15948.16 lacs in the first quarter of the FY 2012 -13. The company uses Zinc as a

raw material for the production of its products. The company uses 561 MT quantities

at the rate of Rs. 116000 per MT. So the total value expense in the Zinc is Rs. 650.61

lacs. The company uses 315 MT Lubricant at the rate of Rs. 105656 per MT. So the total

expenses on Lubricant in the first quarter of the FY 2012 -13 are Rs. 332.66 lacs. Fibre

is another important raw material that company demands 224 MT quantities at the

rate of Rs .

114488 per MT. So the total expenses on Fibre are Rs. 256.09 lacs in first quarter of

the FY 2012-13. Company expenses Rs. 1655.11 lacs on other Raw materials. This

would include Raw materials consumed + Raw materials purchased - adjustments

for loss – major raw materials identified (wire rods, fibre, lubricant and zinc)

= 18,857+86-100-(15948+650.51+332.66+256.09)

=INR 1,655.11 lacs.

Every plant requires power (electricity, coal), fuel. Company uses 200 MT quantities

at the rate of Rs. 4.70 per MT. The company spend Rs. 957.21 lacs on power in the

first quarter of the FY 2012-13. It expenses Rs. 561.23 lacs on Fuel. The company

expenses some amount of capital on Stores & Spares, Contractor & Processing charges,

Freight & other selling expenses and Other Expenses- P & A are Rs. 419.13 lacs, Rs.

445.97 lacs, Rs.

1953.74 lacs and Rs. 1425.00 lacs respectively.

The total expenses of the company are Rs. 24604.91 lacs in the first quarter

of the Financial Year 2012-13.

PBIDT- Net Sales minus the Expenses gives the Total PBIDT for the quarter 1.

56

Norms Qty Rate Rs./lacs

8,356 106,14516,948 52,836

3,900 677887,525 84,087

2,850 56,876250 55,320

8869.518954.372,643.746,327.581,620.96

138.30895.76540.41

39,829 75,299 29,990.62

1,995.5227,995.10

= 27,919.53 – 24, 604.91

= INR 3,314.62 lacs.

PBIDT 3,314.623,314.62

2ND QUARTER OF THE FY 2012-13

P r o duc t i o n s ( M T) Wire Rope & Conveyer CordWire & StrandsBright Bars

Interpretation- The total production of the Wire Rope & Conveyer Cord for the secondquarter would be 15881 MT in the FY 2012 -13. Here it is calculated as Wire production15,281 MT + 600 MT Conveyor Cord productions. Wire and Strands included total production of strand + LRPC strand + Ply strand +wire , [ 535+8400+1500+9363] MT, that equals 19,798 MT. The third component is bright bars. The expected production is4150 MT. total production would be 39829 MT.

Particulars

S a l es Domestic - Wire Rope & C cord

- Wire & Strand- Bright Bars

Export - Wire Rope- Wire & Strands- Bright Bars

ISMAL/M. DivisionScrap

Less : Excise dutyNET SALES

Interpretation- the company sales its products in domestic market as well as in foreign market (i.e. exports). In each market company sales the three main product groupings- wire ropes and cord; wire and strand; and bright bars. The sales figure for each iscalculated by multiplying quantity sold to its rate.

57

DOMESTIC-

Wire Ropes and Cord- the estimated sales of Wire Rope and C Cord would be total8356 MT quantities at the rate of Rs. 106145 per MT. The items included are from Wire and Wire Ropes sheet. These include Total Home Rope+ Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor Mooring Ropes+ R oof Stitching Wires. Calculated as7050+366+340+0+0. Also, as per the division total Conveyor Cord domestic sales of 600is also added (all units in MT).

Wire and Strand – the expected sales of these products would be 16948 MT in the second quarter of the FY 2012-13. Here two items are included for quantity calculation. These are Total Domestic Strand + Wire + Fine Wire i.e. 9415 + 7533 + 0 = 16948 MT.

Bright Bars- the total sales of Bright Bar in the domestic market would be 3900 MT quantity at the rate of Rs. 67788per MT. There is just one item included in bright bars. Quantity taken directly from the total sales provided= 3900 MT.

EXPORT –

Wire Ropes and Cord- the company would export Wire Rope in foreign market is 7525MT at the rate of Rs. 84087 per MT. The wire includes various types and on an average taking the weighted figures the rate has als o decreased. The total sales now stand at INR6,327.58 lacs.

Wire and Strands- the expected value of the products that company will export in the financial year 2012-13 is 2850 MT at the rate of Rs. 56876 per MT. The total quantity is taken as the summatio n of PC Strands + LRPC Strands + Galv. Strands + Fine Wire.900+120+1800+30= 2850. The total amount would be INR 1620.96 lacs. There is no change in the export of Fine Wire and Strands. The market stood absolutely constant.

Bright Bars- this has just one major product under it. Hence rate and quantity are directly taken as per the financial statements given. Quantity -250 MT and rate as INR55,320 Hence total sale would be the product = INR 138.30 lacs.

MACHINERY DIVISION AND SCRAP-

The total sales value of the scrap would be Rs. 540.41 lacs. The M. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales. On deduction of the domestic and export sales from the total sales mentioned in P&L the machinery division sale is ascertained as INR 513.49 lacs.

EXCISE DUTY-

This is taken on the market sales. The amount is directly taken from the financial statement. Total Gross Sales less Excise Duty (as it is the amount paid as perGovernment requirement on production) gives the Net Sales .

58

41,487 38676 16,045.45

565 116000 655.11

312 106291 331.67

224 114488 256.921,617.18

201 4.70 961.94561.23

419.34446.29

1,963.861,425.00

24,683.99

E x pens es

Wire Rods

Zinc

Lubricant

FibreOther Raw materialsPowerFuel

Stores & SparesContractor & Processing chargesFreight & other selling expensesOther Expenses - P & A

Expense total :

Interpretation- The expenses have been categorized into major heads which are easily traceable. The values of Wire Rods, Zinc, Lubricant, Power and Fuel are taken directly from the consumption as provided. Other raw materials include raw material purchased and consumed less already provided ones. The raw materials consumed have increased by a very slight amount and now stands at INR 18,930 lacs. Apart from this the contract and processing charges including repairs and

maintenance (45.17+341.53+35.50+24.10) comes to INR 446 lacs. Freight and Distribution expenses are very similar to the first quarters as commission and discount percentages etc. usually do not change over quarters. Thus, the total expenses are quite balanced to what we saw earlier.

PBIDT 3,311.103,311.10

The difference between the Net Sales and Expensed incurred gives the PBIDT. However, there is a slight decline in the profit value. This happened because the overall increase in the sale amount was less compared to the total expenses incurred. PBIT fell fr om INR3314 to 3311(in lacs).

59

Norms Qty Rate Rs./lacs

8,422 1,05,94916,948 52,836

4,000 67,7888,905 85,340

2,950 56,626250 55,320

8,923.008,954.372,711.537,599.531,670.46

138.301,876.02

566.6141,475 78,216 32,439.81

2,020.1530,419.66

3rd Quarter of the FY 2012-13

P r o duc t i o n s ( M /T ) Wire Rope & Conveyer CordWire & StrandsBright Bars

Q3 FY 2012-13

17,32719,898

4,25041,475

Interpretation- The total production of the Wire Rope & Conveyer Cord for the third quarter would be 17327 MT in the FY 2012 -13. Here it is calculated as Wire production16727 MT + 600 MT Conveyor Cord productions. Wire and Strands included total production of strand + LRPC strand + Ply strand +wire , [ 535+8400+1600+9363] MT, that equals 19,898 MT. The third component is bright bars. The expected production is4250 MT. total production would be 41475 MT.

Particulars

S a l es Domestic - Wire Rope & C cord

- Wire & Strand- Bright Bars

Export - Wire Rope- Wire & Strands- Bright Bars

ISMAL/M. DivisionScrap

Less : Excise dutyNET SALES

Interpretation- the company sales its products in domestic market as well as in foreign market (i.e. exports). In each market company sales the three main product groupings- wire ropes and cord; wire and strand; and bright bars. The sales figure for each is calculated by multiplying quantity sold to its rate.

DOMESTIC-

Wire Ropes and Cord- the estimated sales of Wire Rope and C Cord would be total8422 MT quantities at the rate of Rs. 105949 per MT. The items included are from Wire and Wire Ropes sheet. These include Tota l Home Rope+ Total LCWR (Lock Coil WireRopes) +Slings +Anchor Mooring Ropes+ Roof Stitching Wires. Calculated as

60

7175+387+340+0+520. Also, as per the division total Conveyor Cord domestic sales of600 is also added (all units in MT).

Wire and Strand – the expected sales of these products would be 16948 MT in the third quarter of the FY 2012-13. Here two items are included for quantity calculation. These are Total Domestic Strand + Wire + Fine Wire i.e. 9415 + 7533 + 0 = 16948 MT.

Bright Bars- the total sales of Bright Bar in the domestic market would be 4000 MT quantity at the rate of Rs. 67788per MT. There is just one item included in bright bars. Quantity taken directly from the total sales provided= 4000 MT.

EXPORT –

Wire Ropes and Cord- the company would export Wire Rope in foreign market is 8905MT at the rate of Rs. 85340 per MT. The wire includes various types and on an average taking the weighted figures the rate has also decreased. The total sales now stand at INR7599.53 lacs.

Wire and Strands- the expected value of the products that company will export in the financial year 2012-13 is 2950 MT at the rate of Rs. 56626 per MT. The total quantity is taken as the summation of PC Strands + LRPC Strands + Galv. Strands + Fine Wire.1000+120+1800+30= 2850. The total amount would be INR 1620.96 lacs. There is no change in the export of Fine Wire and Strands. The market stood absolutely constant.

Bright Bars- this has just one major product under it. Hence rate and quantity are directly taken as per the financial statements given. Quantity-250 MT and rate as INR55,320 Hence total sale would be the product = INR 138.30 lacs.

MACHINERY DIVISION AND SCRAP-

The total sales value of the scrap would be Rs. 566.61 lacs. The M. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales. 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. Hence estimated value stands at INR 1876.02 lacs

EXCISE DUTY-

The estimated excise duty payable is INR 2020.15 lacs. A deduction of the duty from the total sales would give the value of projected Net Sales for the third quarter. It sees a positive growth more than the extent of the first quarter to INR 30,419.66 lacs. This was accounted for because of interdivisional sales and estimated increase in

export of WireRopes.

61

43,176 38657 16,690.57

607 116000 703.89

341 105982 361.36

235 114488 268.592,338.50

212 4.70 1,015.30584.97

480.48473.76

2,171.011,455.00

26,543.41

E x pens es

Wire Rods

Zinc

Lubricant

FibreOther Raw materialsPowerFuel

Stores & SparesContractor & Processing charges Freight & other selling expenses Other Expenses - P & A

Expense total :

Interpretation- The expenses have been categorized into major heads which are easily traceable. The values of Wire Rods, Zinc, Lubricant, Power and Fuel are taken directly from the consumption as provided. Other raw materials include raw material purchased and consumed less already provided ones. The raw materials consumed have increased by a very slight amount and now stands at INR 2338.50 lacs. It included raw material consumed+ raw material purchased subtracting the losses and raw materials already provided for.

= 101+20,362-100-18,024(sum of raw materials already provided for)

=INR 2,339 lacs Freight and Distribution expenses are very similar to the second quarters as commission and discount percentages etc. usually do not change over quarters. Thus, the total expenses are quite balanced to what we saw earlier.

PBIDT 3,876.253,876.25

PBIDT Will increase up to INR 3876.25 lacs in the third quarter of the FY 2012 -13. Thisaccounted for due to increase in sales.

62

16,73219,898

4,40041,030

8,477 1,05,54316,948 52,836

4,100 67,7888,255 84,835

2,950 56,626

8,946.928,954.372,779.327,003.151,670.46

300 55,320 165.961,809.09

558.5141,030 77,719 31,887.77

2,024.6329,863.15

4th Quarter of the FY 2012-13

P r o duc t i o n s ( M /T ) Wire Rope & Conveyer CordWire & StrandsBright Bars

Interpretation- The total production of the Wire Rope & Conveyer Cord for the fourth quarter would be 16732 MT in the FY 2012 -13. Here it is calculated as Wire production16132 MT + 600 MT Conveyor Cord productions. Wire and Strands included totalproduction of strand + LRPC strand + Ply strand +wire , [ 535+8400+1600+9 363] MT, that equals 19,898 MT. The third component is bright bars. The expected production is4400 MT. total production would be 41030 MT.

S a l es Domestic - Wire Rope & C cord

- Wire & Strand- Bright Bars

Export - Wire Rope- Wire & Strands- Bright Bars

ISMAL/M. Division Scrap

Less : Excise dutyNET SALES

Interpretation- the company sales its products in domestic market as well as in foreign market (i.e. exports). In each market company sales the three main product groupings- wire ropes and cord; wire and strand; and bright bars. The sales figure for each is calculated by multiplying quantity sold to its rate.

DOMESTIC-

Wire Ropes and Cord- the estimated sales of Wire Rope and C Cord would be total8477 MT quantities at the rate of Rs. 105543 per MT. The items included are from Wire and Wire Ropes sheet. These include Total Home Rope+ Total LCWR (Lock Coil Wire Ropes) +Slings +Anchor MooringRopes+ Roof Stitching Wires. Calculates as7175+387+340+55+520. Also, as per the division total Conveyor Cord domestic sales of600 is also added (all units in MT).

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Wire and Strand – the expected sales of these products would be 16948 MT in the fourth quarter of the FY 2012-13. Here two items are included for quantity calculation. These are Total Domestic Strand + Wire + Fine Wire i.e. 9415 + 7533 + 0 = 16948 MT.

Bright Bars- the total sales of Bright Bar in the domestic market would be 4100 MT quantity at the rate of Rs. 67788per MT. There is just one item included in bright bars. Quantity taken directly from the total sales provided= 4100 MT.

EXPORT –

Wire Ropes and Cord- the company would export Wire Rope in foreign market is 8255MT at the rate of Rs. 84835 per MT. The wire includes various types and on an average taking the weighted figures the rate has also decreased. The total sales now stand at INR7003.15 lacs.

Wire and Strands- the expected value of the products that company will export in the financial year 2012-13 is 2950 MT at the rate of Rs. 56626 per MT. The total quantity is taken as the summation of PC Strands + LRPC Strands + Galv. Strands + Fine Wire.1000+120+1800+30= 2950. The total amount would be INR 1670.46 lacs. There is nochange in the export of Fine Wire and Strands. The market stood absolutely constant.

Bright Bars- this has just one major product under it. Hence rate and quantity are directly taken as per the financial statements given. Quantity -250 MT and rate as INR55,320 Hence total sale would be the product = INR 165.96 lacs.

MACHINERY DIVISION AND SCRAP-

The total sales value of the scrap would be Rs. 558.51 lacs. The M. Division amount is ascertained as deduction of scrap and total sales (both domestic and export) from the Total Gross Sales. 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. Hence estimated value stands at INR 1809.09 lacs.

EXCISE DUTY-

The estimated excise duty payable is INR 2024.63 lacs. It sees a negative growth less than the extent of the fourth quarter to INR 29863.15 lacs. This was accounted for

because of interdivisional sales and estimated decrease in export of Wire Ropes.

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42,732 38701 16,537.51

586 116000 680.24

329 106103 349.14

229 114488 261.722,265.57

208 4.70 996.75577.05

473.81470.81

2,079.561,455.00

26,147.17

E x pe ns es

Wire Rods

Zinc

Lubricant

FibreOther Raw materialsPowerFuel

Stores & SparesContractor & Processing chargesFreight & other selling expensesOther Expenses - P & A

Expense total :

Interpretation- in this quarter overall expected expenses is showing a fall. As expenses are directly linked to sales and with a fall of the same raw materials consumed will come down and hence a decrease. The total expenses now stand at INR 26,147.17 lacs.

PBIDT 3,715.97

3,715.97

Interpretation- A deduction of the expected expenses from the Sales would give the projected PBIDT which is INR 3,715.97 lacs. Though there is a fall compared to third quarter owing to fall in sales yet the value denotes healthy financials.

ASCER TAI N I N G OF WOR K I N G CAP I TAL

Working capital level

The consideration of the level investment in current assets should avoid two danger points excessive and inadequate investment in current assets. Investment in current assets should be just adequate, not more or less, to the need of th e business firms. Excessive investment in current assets should be avoided because it impairs the firm s profitability, as idle investment earns nothing. 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 capitalneed of the firms may be fluctuating with changing business activity. This may cause

65

Holding Qty Rate Rs./lacs

Months

3.002.002.00

0.25

0.75

3.001.00

1.00

41270 38643 15948.16374 116000 433.74

392.50

419.13

2,326.63

5,234.91

8,196.817,052.49

738.78

40743.15

excess or shortage of working capital frequently. T he management should be prompt to initiate an action and correct imbalance.

Once the initial calculations were made based on the projected B Plan for 2012 -13, the next step involved was determining Working Capital. Working Capital is calculated as -

Net Working Capital= Current Assets - Current liabilities.

1ST Quarter of the FY 2012-13

G r o s s C urr ent A ss ets

Raw MaterialsWire RodsZincOthers

Stores & Spares

Stock in Process (Month's of net sales)

Finished Goods (month's of net sales) Wire RopesWires Bright Bars Others

Sundry Debtors (month's of gross sales) ExportDomestic

Other Expenses - Materials

Other Expenses - P & A

Gross Current Assets

Interpretation - The holding month’s data is directly taken from the Business Plan sheet as per company norms. The different holding month’s are -

Wire Rods- 3 month - primarily sourced from its own company Usha Martin ltd. Jamshedpur. Few grades of Wire Rods sourced from Jindal Steel which is situated at a distance of 45 km in Patratu, Ramgar h. Sometimes company purchases Imported Wire Rode in case of special customer requirement. 41270 MT quantities would be required at the rate of INR 38643 MT for the manufacturing process in first quarter of the FY2012-13.

66

Zinc- 2 months- It is the second most important material required for manufacturing purpose. Zinc is purchased from Hindustan Zinc limited (world’s second largest zinc producer). Zinc is supplied from the smelters situated in Rajasthan, namely Debari Udaipur & Chanderiya , Chittorgarh.

Other Raw Materials- 2 months – The other raw material primarily consists ofLubricants, fibres, lead , wire drawing soaps , chemicals etc.

Lubricants - lubricants purchased consists of WRL -55 and WRL-8 purchased from Usha lubes situated in Jamshedpur. N80-BA and Nuristan are imported lubricants purchased from Germany.

Fibres – It mainly consists of imported sisal fibre and indigenously purchased jute and polypropylene fibre.

Fuel – Butane and High speed diesel, kerosene oil are purchased indigenously fromEastern gases Pvt, ltd and Indian Oil Ltd respectively.

Stock in Progress- 0.25 months- 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, passing through furnace, wire drawing to stranding to closing of ropes etc. Resultantly a significant amount of funds are blocked in the process stock. So to take care of this aspect stock in progress has also been taken into account for working capital determination.

Finished goods- 0.75 months

Debtors (export) - 3 months –the company export its overseas products via ship. So it takes more time then in domestic products. Because Export of products involves a huge no. 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.

Debtors (domestic) - 1 month

Other Materials- 1 month

Calculation of value of Current Assets based on the Holding Period given: -

Wire Rode- it is determined that the projected need of the Wire Rode in the first quarter of the FY2012-13 would be 41270 MT. hence the value of this assets would be -

= 41270/3*3 where 3 is the holding period

Total Sales = 41270*38643 (Quantity

*Rate)

= INR 15947.96610lacs.

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13,290.132,894.47

1,297.10

17,481.71

23261.44

Zinc-

= 561/3*2

Total Sales = 374*116000

= INR 433.74 lacs.

Other raw material includes Fiber and Lubricant. As per holding period 2 months calculation it would come to INR 392.50lacs.

Stores and Spares are the next expense determined which has no holding period. The Stock in Progress determines the holding period of unfinished products which are under process. It is taken on the basis of Net Sales (0.25 months). Finished goods determine the company’s stock of goods that has not been yet sold. It is taken on the basis of Net Sales (0.75 months).

Sundry Debtors- this represents the debtors to whom goods have to sale while. The company has both, Domestic sales as well as Export sales. So the value determined is separated, for Export – 3 months and for Domestic – 1 month.

Other expenses include the other raw materials and miscellaneous expenses to be included. A sum of all the items gives the Gross Current Assets for the quarter. I t is expected to be INR 40743.15 lacs.

C u rr ent L i a b i l i t i es Credit from Jamshedpur 2.50Zinc and other RM credit 3.00

Credit for other Expenses 1.00

Total Current Liabilities

Net Current assets

Interpretation- Current Liabilities represent the value for that company has to make payments.

Wire Rode- It is proclaimed from the Jamshedpur branch, as Ranchi is very near to Jamshedpur, so it helps to save the transportation cost. The credit given is of 2.5 months.

Zinc and other materials- this includes Zinc, Lubricant, Fibre and other requirements. The credit given is of 3 months, this shows good terms of the company with its suppliersin terms of payments.

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41487 38676 16045.45376 116000 436.74

392.39

419.34

2,332.92

5,249.08

8,086.847,121.12

726.14

40810.03

Credit for all other Expenses- It includes power, Fuel, Spar es, Freight and Selling Expenses incurred. The credit given is of 1 month for all expenses. A summation of all the items gives the Total Current Liabilities. The projected value is INR 17,481.71 lacs

Working Capital = Current Assets – Current Liabilities

= 40743.15 – 17481.71

= INR 23261.44 Lacs.

Therefore, the estimated working capital requirement in the first quarter of the FY2012-13 would be INR 23261.44 lacs.

2nd Quarter of the FY 2012-13

G r o s s C u rr ent A ss e t s Raw Materials

Wire Rods 3.00Zinc 2.00Others 2.00

Stores & Spares

Stock in Process (Month's of net sales) 0.25

Finished Goods (month's of net sales) 0.75Wire Ropes Wires Bright Bars Others

Sundry Debtors (month's of gross sales)Export 3.00Domestic

Other Expenses - Materials

1.00

1.00

Other Expenses - P & A

Gross Current Assets

Interpretation- The overall Current Assets of this quarter is estimated to have an increase than the last one. Holding period would remain the same. The quantity requirement of Wire Rods has increased from 41270MT to 41487 MT. there would be little change of 2MT in Zinc. Stock in Progress and Finished Goods would also very small change. Sundry Debtors (Export) are expected to decline while in domestic sales therewould be some increment. The total Current Assets would be up to INR 40810.03

lacs.

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13,371.212,860.88

1,302.12

17,534.21

23275.82

43176 38657405 116000

16690.57469.26419.96

480.48

2,534.97

5,703.69

9,408.297,488.30

974.49

44170.01

C u rr ent L i a b i l i t i es Credit from Jamshedpur 2.50Zinc and other RM credit 3.00

Credit for other Expenses 1.00

Total Current Liabilities

Net Current assets

Interpretation- The supplier credit of Wire Rods is expected to rise to INR 13,371.21 lacs while other raw materials show a decline. The total liabilities would increase by a lesser amount than the extent of the increase in assets.

Working Capital = 40810.03 – 17,534.21

= INR 23275.82 Lacs.

The working capital requirements for the second quarter will be decrease up to 50.15 lacs.

3rd Quarter of the FY 2012-13

G r o s s C u rr ent A ss e t s Raw Materials

Wire Rods 3.00Zinc 2.00Others 2.00

Stores & Spares

Stock in Process (Month's of net sales) 0.25

Finished Goods (month's of net sales) 0.75Wire RopesWiresBright BarsOthers

Sundry Debtors (month's of gross sales)Export 3.00Domestic 1.00

Other Expenses

Other Expenses

- Materials

- P & A

1.00

Gross Current Assets

70

13,908.803,672.33

1,417.25

18,998.39

25171.63

Interpretation- As compared to the previous quarter this quarter is expected to see a good increase in sales. The consumption of Wire Rods would increase by a larger amount to 43176MT while Zinc also stands at 405mt. the stores consumption as projected in the B Plan came up to INR 480.48 lacs. Since the estimated sal es will be INR44170.01 lacs. The Stock in Progress and Finished Goods worth (calculated in terms ofNet Sales) will also increase. Debtors both domestic and exports would be rise . The extent of increase in exports is much more than domestic; however this even blocks a lot of funds as exports are realized in 3 months. Other expenses includ e other raw materials will also increase as per sales growth.

C u rr ent L i a b i l i t i es Credit from Jamshedpur 2.50Zinc and other RM credit 3.00

Credit for other Expenses 1.00

Total Current Liabilities

Net Current assets

Interpretation- The Current Liabilities have increased by a large amount. However, the extent is much lesser compared to the expected increase of Current Assets. This added to the increase in working capital requirements for the quarter. The credit for Zinc, Lubricant, Fibre and other raw materials is expected to increase.

Working Capital = 44170.01 – 18,998.39

= INR 25171.63 lacs.

Therefore, the estimated working capital requireme nt in the third quarter of the FY2012-13 would be INR 25171.63 lacs.

71

13,781.263,556.68

1,375.72

18,713.66

4th Quarter of the FY2012-13

G r o s s C u rr ent A ss e t s Raw Materials

Wire Rods 3.00 42732 38701 16537.51Zinc 2.00 391 116000 453.50Others 2.00 407.24

Stores & Spares 473.81

Stock in Process (Month's of net sales) 0.25 2,488.60

Finished Goods (month's of net sales) 0.75 5,599.34Wire Ropes Wires Bright Bars Others

Sundry Debtors (month's of gross sales)Export 3.00 8,839.58Domestic 1.00 7,496.56

Other Expenses - Materials 1.00 947.54

Other Expenses - P & A

Gross Current Assets 43243.67

Interpretation- The overall Current Assets of this quarter is estimated to have a decrease than the last quarter . Holding period would remain the same. The quantity requirement of Wire Rods would decrease from 43176 MT to 42732MT. The quantity requirement of Zinc will also decrease up to 14MT. There would be very small change in Stock in Progress and Finished Goods. Debtors (export) are exp ected to decline while there would be some increment in domestic sales. The total Current Assets adds up to INR 43243.67 lacs.

C u rr ent L i a b i l i t i es Credit from Jamshedpur 2.50Zinc and other RM credit 3.00

Credit for other Expenses 1.00

Total Current Liabilities

72

Net Current assets 24530.01

Interpretation- The Total Current Liabilities is estimated to decrease from INR 18,998 to INR 18,713.66 lacs. However, the decre ase in Current Assets would be INR 926.34 lacs and in Current Liabilities it would be INR 284.73 lacs, this will help to reduce the working capital requirements for the quarter.

Working Capital = 43243.67 – 18713.66

= INR 24530.01 lacs.

Thus, the expected requirement of the quarter will be decrease while that of the last quarter.

QUARTERS AT A GLANCE

PROJECTIONS QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4

CURRENT

ASSETS

40743.15 40810.03 44170.01 43243.67

CURRENT

LIABILITIES

17,481.71 17,534.21 18998.39 18713.66

WORKING

CAPITAL

23261.44 23275.82 25171.63 24530.01

16. RECOMMENDATIONS: -

A well designed and implemented Analysis of Financial statement is expected to contribute positively to the creation of a firm’s value. The analyzed in financial statement needs and profitability of firms are examined to id entify the causes for any significant differences between the industries. High investment in inventories and receivables is associated with lower profitability.

A firm is required to maintain a balance between liquidity and profitability while conducting its day to day operations. 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. The importance of cash as an indicator of continuing financial health should not net surprising in view of its crucial role within the business. This requires that business must be run both efficiently and profit ably. In the process, and asset-liability mismatch may insolvency. On the other hand, too muchfocus on liquidity will be at the expense of profitability.

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17. CONCLUSION (LEARN ING):-

The summer training was an endeavour to critically understand the practical implication of the Production process at an industry. Though the industry is a small one as compared to many others companies at Jamshedpur, Such as Tata Steel, Tata Motor, etc it was quite an interesting experience to interact with the industry environment. There are transparent and clear objectives which one has to achieve.

The industry is one of very unique in nature and the findings may be applied to similar type of industries only.

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. I hope this project will prove as a turning point in my Management Career.

Product:-

UMLs product has good demand in market

UMLs product are well tested and inspected by the world class testing authorities like ABS,IRS,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 , 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. They are well painted to give nice look

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18. BIBLIOGRAPHY: -

ww w . u s h a m a r t i n . c o m

www.s cr ib d .co m

www.s lidsh e r e .co m

www.wikip e d ia .co m

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