AMAR-143
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Transcript of AMAR-143
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Name :- AMAR C. CHUDASAMA
Faculty :- B.B.A (SEMESTER-4)
Subject :- An Industrial Training Report
Roll No :- 16
Firm Visited :-CHAM SYNTHETICS PVT. LTD
Institute :- K. H. Madhvani College, Porbandar
Centre :- Porbandar
University :- Saurashtra University
Year :- 2011-2012
Date Of Visit :-01/01/2012 TO 10/01/2012
Guided By :- Dr. A.B.Savjani
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SHRI K. H. M. ARTS & COMMERCE COLLEGE
PORBANDER
This is to certify that AMAR C. CHUDASAMA of
B.B.A (SEMESTER-4) has completed her industrial visit for 10
days, prepared report under my guidance and directions about
the following unit
“CHAM SYNTHETICS PVT.LTD.’’
BOKHIRA, PORBANDAR
PLACE: PORBANDAR
ACADEMIC YEAR : 2011-2012
SIGNATURE OF GUIDE BY.
(DR. A.B.SAVJANI)
SHREE
K.H.MADHVANI
ARTS & COMMERCE
COLLEGE
PORBANDAR.
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As per the syllabus prescribed by saurashtra University in
B.B.A. There is an industry training in S.Y. B.B.A (SEMESTER-IV).
For management course, the practical training is of vital
importance. The artificial knowledge and class-room discussion are
not enough for a person management course. He should know the
various angles of business. The industrial visit provides an insight to
develop practical viewpoint to student.
The training programme aims to prepare young minds for
taking challenges and managerial opportunities of business and
industry.
I have prepared a report on CHAM SYNTHETICS
PVT.LTD. This report is a reflection of what I observed and came to
know during my training to the industry.
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In reference with the practical training, I would like to
express my sense of gratitude to the management of “CHAM
SYNTHETICS PVT. LTD” for giving me this golden opportunity
of visiting the industry for 10 days in their company.
I am heartily grateful to the principle Mr. J. S. Ramdatti
and also deep appraisal to Mr. A.B. Savjani for allowing and giving
guidance concerning with project report.
I also thank to the respected officer of CHAM
SYNTHETICS PVT. LTD to give me such valuable information
about unit by which i have been able to prepare this report.
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NO. PARTICULARS PAGE
NO.
1. GENERAL INFORMATION 10
(a)
HISTORY & DEVELOPMENT
11
(b)
SIZE OF UNIT & FORM OF ORGANIZATION
12
(c)
PRODUCTS & MANUFACTURING PROCESS
13
(d)
ORGANIZATION STRUCTURE
16
(e)
TIME-KEEPING SYSTEM
17
(f)
EMPLOYER SERVICES
18
(g)
CONTRIBUTION OF THE UNIT TO THE INDUSTRY
19
2.
MARKETING DEPARTMENT
20
(a)
ORGANIZATION OF MARKETING DEPARTMENT
21
(b)
PRODUCT PLANNING
22
(c)
MARKET SEGMENTATION
23
(d)
PRICING POLICIES
24
(e)
CHANNEL OF DISTRIBUTION
25
(f)
SALES PROMOTION
26
(g)
ADVERTISING
27
(h)
MARKETING RESEARCH
28
(i)
INTERNATIONAL MARKET
29
3.
HUMAN RESOURCE DEPARTMENT
30
(a)
ORGANIZATION OF HRD
31
(b)
RECRUITMENT, SELECTION & INDUCTION
PROCEDURE
32
(c)
TRAINING & MANAGEMENT DEVELOPMENT
PROGRAMME
34
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(d) JOB DESCRIPTION (management level only) 36
(e)
PROMOTION & TRANSFER POLICY
37
(f)
WAGE & SALARY ADMINISTRATION
38
(g)
ESI SCHEME
39
(h)
PROVIDENT FUND SCHEME
40
(i)
GRIEVANCE HANDLING PROCEDURE
41
4.
FINANCE & ACCOUNTING DEPARTMENT
42
(a)
ORGANIZATION OF FINANCE & ACCOUNTING
DEPARTMENT
43
(b)
FINANCIAL PLANNING
44
(c)
CAPITALIZATION: (whether the unit is undercapitalized or
over capitalized )
49
(d)
CAPITAL STRUCTURE:-
(I)FINANCIAL LEVERAGE.
(II)CAPITAL GEARING.
50
(e)
MANAGEMENT OF FIXED ASSETS:-
(I.)CAPITAL BUDGETING
(II) REVIEW OF LAST CAPITAL PROJECT OF THE UNIT
WITH REFERENCE TO PROJECT COST, PROJECT
FINANCING AND IMPLEMENTATION
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(f)
MANAGEMENT OF WORKING CAPITAL:-
(I) MANAGEMENT OF INVENTORIES.
(II)MANAGEMENT OF RECEIVABLES
(III)MANAGEMENT OF CASH INCLUDING CASH
BUDGET
55
(g)
OPERATING LEVERAGE ANALYSIS 59
(h)
PROFITABILITY & DIVIDEND DISTRIBUTION:- A
TREND ANALYSIS OF PAST THREE YEARS
60
(i)
RIGHT ISSUE, BONUS ISSUE, CONVERTIBLE ISSUE,
FUND RAISING THROUGH PUBLIC DEPOSITS,ETC IF
ANY
70
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5. FUTURE PLAN 71
6. CONCLUSION 72
7. BIBLIOGRAPHY 73
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NO.
PARTICULARS
PAGE
NO.
(a)
HISTORY & DEVELOPMENT
11
(b)
SIZE OF UNIT & FORM OF ORGANIZATION
12
(c)
PRODUCTS & MANUFACTURING PROCESS
13
(d)
ORGANIZATION STRUCTURE
16
(e)
TIME-KEEPING SYSTEM
17
(f)
EMPLOYER SERVICES
18
(g)
CONTRIBUTION OF THE UNIT TO THE
INDUSTRY
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(a) HISTORY AND DEVELOPMENT:-
HISTORY:
The cham synthetics was established in December-1995 by cham family as it is
controlled by cham family. In the initial stage this unit made investment of Rs. 1 cror.
Rapidly gradually it is developing very fastly. The history of his promoter late Shree
kanjibhai cham is very informative. He used to export net, due to which India gets huge
amount of foreign currency. During the history of two years the industry has developed
very well. The production & turnover of the unit is increasing day by day.
DEVELOPMENT:
Late shree Kanjibhai Cham started with the processing and export of frozen marine
products. His vision, ambition, uncompromising, hard work it possible to expand this
small venture into big empire of today. As an effective and efficiency way of providing
infrastructure support to the major activity of fishing community. In the beginning of
1984 Mr. Prem kanjibhai Cham started his career in their organization and purchase
important plant and machinery like
Toyo kogyo machine
Spovl winder machine
Stretching machine
Manual Bundline machine
For the manufacture of Nylons fishing Nets and HDPE fishing Nets and started to sell
the same in the local market of porbandar and surrounding area under the brand name of
„king fish‟. In this way that unit developed
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(b) SIZE OF UNIT AND FORM OF ORGANIZATION
SIZE OF UNIT:-
Indian government has divided industries in three types according to their investment
and it defined as under.
SMALL SCALE INDUSTRY (SSI)
MEDIUM SCALE INDUSTRY (MSI)
LARGE SCALE INDUSTRY (LSI)
We can state that the size of unit from the view point of investment.
SSI is that industry which invests up to Rs. 25 lakh. To Rs. 5 cror On plant and
machinery.
MSI is that industry which more than Rs. 5 cror and less than Rs. 10 cror on plant and
machinery.
LSI is that industry which invests more than Rs. 10 cror on plant and machinery.
The cham synthetics industry is of small scale industry(SSI) because of it has
investment appro. Rs. 1 cror in the unit.
FORM OF ORGANIZATION:
We can classify industry in five categories in the discussion of form of organization.
Sole proprietorship
Partnership firm
Privet Ltd.
Joint stock company
Public Ltd.
According to Rules & Regulation of the company act 1956, Cham synthetics is privet
limited form.
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(c) PRODUCT AND MANUFACTURING PROCESS :-
PRODUCT:-
“Product is anything that can offered to market for attention, aquvision, use or
consumption that can might satisfy a needs or wants of consumers”
The Cham synthetics manufacturing standard quantity and quality product i.e.
Nylon Fishing Nets.
HDPE Fishing Nets.
The all goods manufactured in different size and quantity.
MANUFACTURING PROCESS:
The manufacturing process of charm synthetics PVT. LTD. Is as under;
Chart:-
Purchasing Raw Material
↓
Checking of Raw Material
↓
Fill up and load the Spool in machine
↓
Knotting of Yarn
↓
Quality Control
↓
Sewing
↓
Heating & Ironing
↓
Checking and packing
↓
Final Net
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Let‟s discuss them in detail….
Purchase Raw-Material:-
Some Raw-materials are manufacturing in their own plant, whereas other
Raw-material are purchase from outside. The main Raw-material they are purchasing like
Poly propolin, HDPE and monophilament.
Checking of Raw- material:-
They are checking the Raw-materials by length stretching machine, in
this machine they check the strength of raw-material they are also checking the gage of
yarn.
Fill up and load the spool in machine:-
After checking raw-material they are filling the spool with help of
machine. After filling the spool with the yarn, We have to load that spool in the machine.
This machine has a technique of wraping, In this machine there are two types of huck
which are upper and lower.
Knoting of yarn:-
In the machine two hucks are attached with each other as a they are making
wrap between two yarn. The machine have a technique to convert the wrap in the knot,
we can obtain rudiment net.
Quality control:-
In there is any defect in the prepared yarn, than it is automatically
remove in the roller no. 3, here all the components are placed on the quality control
machine and are checked through.
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Heating & Ironing:-
When the net are prepared after sewing, it go for a new step
nets are heating 7 ironed by the machine, in the machine the temperature is kept 140 „c.
after completing this step, the net become very strong and smooth.
Checking & packing:-
After heating & ironing net go in the checking the nets weight & strongness
of the nets. After the completing of all process the nets go for a packing.
Final nets:-
In this step we can get final nets, which are ready for sale, as per the requirement of
the dealers company provide them nets.
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(d) ORGANIZATION STRUCTURE:-
Organization structure define the formal relationship and used to people in
organization.
DIRECTOR
(Mr. Prem K.cham)
↓
GENERAL MANAGER
(Mr. V.R. Bamaniya)
↓
↓ ↓ ↓ ↓
Finance Marketing Personnel Production
Head Head Head Head
↓ ↓ ↓ ↓
Supervisor Supervisor Supervisor Supervisor
↓ ↓ ↓ ↓
Clerk Salesman Workers Operator
↓ ↓
Worker Helper
↓
Worker
Cham synthetics PVT. LTD. Company adopts this type of organization structure
because authority & responsibility moves up-ward to down-ward and the company
running smoothly.
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(e) TIME KEEPING SYSTEM:-
Time is most valuable thing for every business. If the time discipline is loose,
the production becomes slow.
“TIME IS WHAT CLOCKS MEASURE”
In Cham synthetics PVT. LTD. Time can classify in three shift work area.
First shift – 07.am To 03.pm
Second shift – 03.pm to 11.pm
Third shift - 11.pm to 07.am
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(f) EMPLOYER SERVICES:-
Employees are provided salary in the reward for their work in the
organization. But for the better life and development company also provide some services
to their employer which are as under,
They provide medical services
They provide Bus services
They provide Bonus to the employer, in every year on Diwali festival occasion.
They provide job satisfaction to employees by offering good payment, good
working condition and suitable placement.
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(g) CONTRIBUTION OF THE UNIT TO THE
INDUSTRY:-
The contribution of the unit to the industry means the industry give particular
part of profit to the industry.
At present Cham synthetics PVT. LTD. Contributes following point.
It provides employment to many people so it reduces the burden of employment to
some extent.
It sponsored Cham English Medium School to increase level of education.
It give training to the employment for the increasing the efficiency of skill of
employee.
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NO.
PARTICULARS
PAGE
NO.
(a) ORGANIZATION OF MARKETING DEPARTMENT 21
(b) PRODUCT PLANNING 22
(c) MARKET SEGMENTATION 23
(d) PRICING POLICIES 24
(e) CHANNEL OF DISTRIBUTION 25
(f) SALES PROMOTION 26
(g) ADVERTISING 27
(h) MARKETING RESEARCH 28
(i) INTERNATIONAL MARKET 29
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(a) ORGANIZATION OF MARKETING
DEPARTMENT:-
Marketing department has to perform various functions rightly from production
to sales to ultimate consumer. We can say that marketing department is an agent between
productions to ultimate consumer and therefore marketing department has various
functions like product planning marketing research, servicing for customer.
Chart:
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(b) PRODUCT PLANNING:-
“GOOD PRODUCT ARE KEY TO MARKET SUCCESS”
Product planning means the planning for the product that is in decide what type
of product that is to produce or what needs on requirement the product has to satisfy and
for whom the product is means. Product planning is an important concept for any
industry.
In cham synthetics first of all with help of marketing research new type and
designed which is passed by the directors. The product is planned properly with great
care, because if the product fails the reputation of company goes down, this is Cham
product is planned well.
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(c) MARKET SEGMENTATION:-
A market consists of buyers and sellers differ in one more aspect. They may
differ in their wants. Purchasing power, geographical location, buying attitudes
preference etc. so market segmentation means to differ group of customers on the basis of
age, location etc. so that needs of each group can be satisfied separately.
As far as Cham synthetics PVT. LTD is concerned; the market is divided in all
over India. Mostly they supply their goods in saurashtra, Maharashtra, goa and other
coastal areas.
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(d) PRICING POLICY:-
Price is a powerful marketing instrument as a marketing weapon, pricing is the
big gun. Pricing a product is one of the most important and critical areas in marketing
management. A price policy is the standing answer of the firm to recurring problem of
pricing.
Cham synthetics PVT. LTD. Is following penetration pricing policy i.e. the
company is adopt low price of product. The company has adopted penetration pricing
policy because of cut throat competition. So in order to capture and hold a share of
market position the company has adopted penetration pricing policy. It also discourages
competitors from entering the market.
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(e) CHANNEL OF DISTRIBUTION:-
“The channel of distribution for a product route taken by the title to the good as
they move from the producer to the ultimate consumer on industrial user”
To take decision relating to channel of distribution is critical work for decision
maker. Any wrong decision about it may make the product cost high and even product
may fail in the market.
In case of Cham synthetics PVT. LTD. Have adopt two type of distribution
channel system.
Direct distribution:-
Here the producer directly sells their product to ultimate consumer.
Manufacturer
Consumer
Indirect distribution:-
In case of indirect distribution there is always a middleman, in case of Cham
synthetics there is following channel of distribution.
Manufacturer
Dealers
Sub-dealer
consumer
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(f) SALES PROMOTION:-
“Sales promotion consist of diverse collection of incentives or tools mostly short turn
design to get quick response of consumers”
The meaning of sales promotion is clear from name, ist means to increase to
promote the sales. In these competitive market sales promotions is necessary from
boosting up the sales & contribute more in market share. In sales promotion customer is
attract by some incentive like advertising & publicity.
Cham synthetics PVT. LTD. Easily sold Nets product by them. So in specific
steps are taken for sales promotion in future there are trying to advertising & more
information about industry in internet.
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(g) ADVERTISING:-
Advertising is an important aspect in marketing. It is concerned with the
preparation of visual and oral message for making people aware of and favorable inclined
toward product, brand service quality and institution and so on.
“Advertising committed of all the activities involve in presenting to a group, on
person, cruel or visual, opening sponsored message regarding a product service or
an idea, this massage called an advertisement, is disseminated thought one or more
media and its paid for by a identified sponsor.”
In Cham synthetics PVT. LTD. Advertising is done through pamphlets,
newspaper, catalogues, magazine etc.
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(h) MARKETING RESEARCH:-
Marketing research is the systematic collection analysis and separating of data
reading relevant, marketing situation facing the company. It is hugely necessary in this
modern competitive age.
“Marketing research is a systematis problem analysis model building and fact
finding for the purpose of improve decision making and controlled in the marketing
of good and services.”
In case of Cham synthetics in useful in different types of fishing purpose and
this company don‟t adopt special marketing programmers but always try to expand their
market to make certain useful changes in itd product.
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(I) INTERNATIONAL MARKETING:-
In the present marketing situation, the market is not limited up to any particular
region, state or country. Today‟s era is the globalization and every company has scope for
expand in international market.
In this modern and competitive era has impelled the company to international
market through it is not easy due to certain export policy but due to high quality standard
they export beyond the bound arise.
Cham synthetics PVT. LTD. Easily sold out their product in coastal area of the
countries and also cham synthetics export the product to Dubai and other national level.
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NO.
PARTICULARS
PAGE
NO.
(a) ORGANIZATION OF HRD 31
(b) RECRUITMENT, SELECTION & INDUCTION
PROCEDURE
32
(c) TRAINING & MANAGEMENT DEVELOPMENT
PROGRAMME
34
(d) JOB DESCRIPTION (management level only) 36
(e) PROMOTION & TRANSFER POLICY 37
(f) WAGE & SALARY ADMINISTRATION 38
(g) ESI SCHEME 39
(h) PROVIDENT FUND SCHEME 40
(i) GRIEVANCE HANDLING PROCEDURE 41
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(a) ORGANIZATION OF HRD:-
In this company, a day to day affair is managers by the term of H.R manger
under the supervisor of the general manager.
In Cham synthetics, there is a separate Human Resource Department managed
by the HR manager of the company.
CHART:
Human resource department has to perform various functions rightly for
company, the HR manager has to final authority of Human resource department and
under him the personnel officer is appoint.
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(b) RECUIRTMENT, SELECTION AND INDUCTION
PROCEDURE :-
RECUIRTMENT PROCEDURE:
“Recruitment is the process of searching for prospective employee and stimulation
than to apply for jobs in the organization”
Recruitment is the process of discovering the potential application for actual of
anticipated organizational vacancies the selecting the ration by attracting a large no. of
applicants for the job. It helps management to select suitable employees for different job
opportunities.
Here Cham synthetics PVT. LTD., recruitment process of personnel department is
very simple. This organization directly recruiting as per the recruitment.
SELECTION PROCEDURE:
“Selection is the process in which candidates for employment are divided into two
classes those who are to be offered employment and those who are not.”
Selection is the process of selecting right the right person for right job. Here
employees‟ qualification and quality are checked with the job requirement. If they fit the
best they will be placed. Selection means making a choice of a performance.
In Cham synthetics PVT.LTD. First of all they decide whether they want skilled,
semi-skill or unskilled workers, if they require unskilled workers they are easily available
from local market. If they need semi-skilled workers they give performance to ITI
requirement of the job and finally if they give advertising in paper basis of their
performance in interviews selecting is done.
33
INDUCTION PROCDURE:-
Induction is a technique by which a new employee is made familiar with The
organization and its pretties policies and purposes.
Induction is a wel-coming process because the idea is to welcome a new
Employee in the organization and make him feel at home an generated good feeling
Towards the job and make him realized that his job is important.
As far as Cham synthetics PVT. LTD. Is provide induction to the new
Employees and give proper knowledge about his job and give necessary training to
increase his efficiency working skill.
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(c) TRAINING AND MANAGEMENT
DEVELOPMENT PROGRAMME:-
TRAINING PROGRAMME:-
“Training is the organized procedure by which people learn knowledge or skill for a
definite purpose.”
Training is an organized and systemically procedure for acquiring knowledge
Problem solving ability for the better performance on the job. It is duty of Management to
Train each employee properly to developed technical skills for the job which He has been
employed. Training provides awareness of rules & Regulation the Way of performing
given task effectively & prepared the employee‟s improves
The performance. There are mainly two types of training.
(i) ON THE JOB TRAINING.
(j) OFF THE JOB TRINING.
In case of Cham synthetics they give the training to their workers in their
Plant „on the job‟.
MANAGEMENT DEVELOPMENT PROGRAMME:-
Development means growth of an individual in all respects.In practice
The practice the team development is related to the executives or managers.
“Developed Managers are vital to the organized and to the economic
Development of country also”
-MR.J.R.D TATA.
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In case of Cham synthetics PVT. LTD. The skill of new employee is
Developed through training, guidance moreover the unit. Also invite experts from outside
to train them. Development helps in reduction of labour turnover , less to damage raw
materials and high employee‟s moral.so we can say that training and
Development is necessary task for every unit.
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(d) JOB DESCRIPTION:-
Job description is an important document, which is basically descriptive on
nature and contains statement of job analysis. It provides both organization function and
functional information.
Job identification
Proper job title
Job summary
Job location
Participates in corporate planning
Duties & responsibility
Job description is present in Cham synthetics PVT. LTD. Whereby the hade of
various departments and the smart & intelligent enough to know and learn the work
experience also.
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(e) PROMOTION & TRANSFER POLICY:-
PROMOTION POLICY:-
Employees are promoted to better jobs with higher stasus, greater responsibility
and increase salary. This changed is called promotion.
“Promotion is the advancement of an employee to a better job better in terms
or greater responsibility, more prestige or statue, greater skill and especially
increase rate of payment or salary”
In case of promotion a new position is attain which better than the present one.
Hence, promotion involves a change from one job to another that is better in terms of
status and responsibility.
Cham Synthetics PVT. LTD. Follows the merits and experiment policy for
promotion the staff members. Cham synthetics carry promotion function on the basis of
seniority and experience of work.
TRANSFER POLICY:-
Transfer policy is a horizontal movement of an employee from one job,
selection, department, shift, plant & position to another at the same or another place,
where his salary, statues and responsibility are the same.
“A transfer is a change in job where the new job is equal to the old job in term of
pay, statues and responsibility”
In case of the Cham Synthetics PVT. LTD. Is having a single unit in porbandar
so there employees are transfer to one section to another in the same unit.
38
(f) WAGE AND SALARY ADMINISTRATION:-
Money is one of the powerful motivations behind any work of activity. Money is
in the form of wage & salary means payment is done in the form of money.
Wages and salary administration is the act of establishing wage & salary
structure a maintain an optimum balancing of confliction personnel interest so that
satisfaction of employee & employer is maximized and conflicts can be minimized. Thus,
wage & salary administration is concerned with the financial aspects of needs, motivation
and reward.
“Wages are the compensation of wage earners the no. employees who used
the tools & equipment of their employees to produce goods and services that are
sold by their employers”
In Cham synthetics PVT. LTD. Wages and salary are paid time at the end of the
month as per time wage system. According to time wage system wages and salary are
given to work time spent by worker in the industry. Thus, after keep consideration of
other aspect wages and salaries paid.
39
(g) E.S.I SCHEME:-
Employees‟ State Insurance (E.S.I) act establish in 1948. Its main object is to
providing certain benefits to employees in case of sickness, maternity and employment
injury and also to make provision for certain other matter incidentally thereto. When any
unit has a more than 10 employees this scheme is applied. It is abbreviated from of
employee state insurance (E.S.I) and it is scheme from the protection of worker & their
family.
In Cham Synthetics PVT. LTD. Schema is not applicable.
40
(h) PROVIDENT FUND SCHEME:-
The act for provident fund was passing in 1952. Under this scheme all employee
have to contribute some percentage of his salary to his fund. Which accumulate in the
employee account and in against the company also deposit same amount to the employees
fund account.
These schemes said to be one of the compulsory saving scheme, which help to
employee in retire age.
In Cham Synthetics PVT. LTD. Deducted 8.33% of provident fund in the
employee‟s salary.
41
(i) GRIEVANCE HANDLING PROCEDURE:-
“Grievance is any dissatisfaction or feeling of injustice in connection with one’s
employment situation that is brought to the attention of management”
Grievance is the feeling a discontentment of dissatisfaction among workers
regarding anything concerned with the company. Grievance may be left by party against
the other party.
A well define grievance handling procedure is another element of sound
industrial relation it is said that prompt and effective disposal of workers grievance is
another key to individual peace.
In Cham Synthetics PVT.LTD. since the relationship between employer &
employees is sound there are generally no dispute still it there are any problems, the
worker are to talk to supervisor.
42
NO.
PARTICULARS
PAGE
NO.
(A) ORGANIZATION OF FINANCE &
ACCOUNTING DEPARTMENT
43
(B) FINANCIAL PLANNING 44
(C) CAPITALIZATION: (whether the unit is
undercapitalized or over capitalized )
49
(D) CAPITAL STRUCTURE:-
(1)FINANCIAL LEVERAGE.
(2)CAPITAL GEARING.
50
(E) MANAGEMENT OF FIXED ASSETS:-
(1)CAPITAL BUDGETING
(2) REVIEW OF LAST CAPITAL PROJECT OF
THE UNIT WITH REFERENCE TO PROJECT
COST, PROJECT FINANCING AND
IMPLEMENTATION
53
(F) MANAGEMENT OF WORKING CAPITAL:-
(1) MANAGEMENT OF INVENTORIES.
(2)MANAGEMENT OF RECEIVABLES
(3)MANAGEMENT OF CASH INCLUDING
CASH BUDGET
55
(G) OPERATING LEVERAGE ANALYSIS 59
(H) PROFITABILITY & DIVIDEND
DISTRIBUTION:- A TREND ANALYSIS OF
PAST THREE YEARS
60
(I) RIGHT ISSUE, BONUS ISSUE, CONVERTIBLE
ISSUE, FUND RAISING THROUGH PUBLIC
DEPOSITS,ETC IF ANY
70
43
(a) ORGANIZATION OF FINANCE &
ACCOUNTIONG DEPARTMENT:-
Because of the vital importance of the financial decision to a firm, it is essential
to set up a sound and efficiency organization of the finance.
“The term finance can be define as the management of the flow of money through
an organization whether it would be a corporation, school, Bank or government
agency”
Financial department provide “Bass” for the company. No companies run
without sufficient finance. Finance is the essence of any business; it is known as “LIFE
BLOOD” of business. Organization of finance department of Cham Synthetics PVT.
LTD. Is as under
CHART:
44
(b) FINANCIAL PLANNING:-
Financial planning is the task of determining how a business will afford to
achieve its strategic goals and objectives.
“Financial planning pertains only to be a function of finance and including the
determination of the firm’s financial objectives financial policy and financial
procedure”
The indicial financial planning is prepared keeping in view the following items
expenditure via cost of fixed assets, amount of working capital, promotional expenses,
priemary expenses and so on.
At present share capital of the Cham synthetics PVT. LTD. Is Rs. 10 lakh.
They also obtained secured loan from outside of Rs. 24,52,430 and whenever the need
arises they use cash credit (CC) which is granted by SBI, BOB is upto the limit of
whatever they need.
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(c) CPAPITALIZATION:-
The evaluation of the company is known as capitalization. The word
“capitalization” can be defined as sum total of all their value.
“Capitalization means the total accounting value of the capital stock, surplus in
whatever form it may appear and funded long term debt.”
Over capitalized(Real value <Book value)
When book value of company is more than real value there is a over capitalized. This is
not good position for the company, it tends to liquidation in future, depend upon how
much percentage the company is over capitalization.
Under capitalized(Real value>Book value)
Under book value of a company is less than the real value, there is an under capitalized.
This is good position of company.
It is interesting to see weather Cham Synathetics PVT. LTD. Is an over capitalizes or
under capitalized, for this purpose we need calculate book value and real value.
Book value = Net assets = 22,88,939.98 = Rs.228.89
No. of shares 10,000
Real value = Net profit after tax = 1,83,510.73 = Rs.18.35
No. of shares 10,000
Hence, we see that book value of Cham Synthetics PVT. LTD. Is higher than real value.
Hence, it is “over capitalized”.
Book value > Real value = over capitalized.
50
(d) CAPITAL STRUCTURE-FINANCIAL
LEVERAGE & CAPITAL GEARING:-
CAPITAL STRUCTURE:
Capital structure of a company refers to the make-up of its capitalization. A
company funds by issuing various types of securities that is ordinary share, preference
share, bonds and debentures.
“Capital structure is the combination of debt and equaty security that comprise a
firm a financing of its assets”
Now see capital structure of Cham Synthetics PVT. LTD.:-
PARTICULAR 31-3-2011 31-3-2010 31-3-2009
Authorized share capital 50,00,000 50,00,000 50,00,000
Issued share capital 10,00,000 10,00,000 10,00,000
Reserve & surplus 12,88,939.98 10,21,011 8,78,532
Secured loan 24,52,430 4,77,754 95,347
TOTAL 47,41,370.54 24,98,765 19,73,879
51
FINANCIAL LEVERAGE:-
Financial leverage results from the presence of fixed financial change in the
firm‟s income statement. It is used to describe the firm‟s ability to magnify the return to
its owners.
“Leverage as the tendency for profit to change at a faster rate than sales”
Let‟s find out financial leverage of Cham Synthetics PVT. LTD.
Degree of financial leverage = EBIT
EBT
-where, EBIT= Earning Before Interest, Tax
EBT= Earning Before Tax
FOR-2009
FANACIAL LEVERAGE = EBIT = 2, 32,832.33 = 1.25 * 100 = 125 %
EBT 187000
FOR-2010
FANACIAL LEVERAGE = EBIT = 2, 56,962.93 = 1.12 * 100 = 112 %
EBT 2, 29,218.93
FOR-2011
FANACIAL LEVERAGE = EBIT = 41, 24, 96.56 = 1.91 * 100 = 191 %
EBT 2, 51,736.56
In Cham Synthetics PVT. LTD. Sales & EBIT are raising degree of financial
leverage. This is favorable to firm as it means maximization in dividend
52
CAPITAL GEARING:-
The term capital gearing normally refers to the proportion of relation between
equty share capital including reservr & surplus to preference share capital and other fixed
interest or dividend bearing funds and non-fixed interest or dividend bearing funds. Equty
share capital includes equty share capital and all reserve and surplus items that belong to
shareholders. Fixed interest bearing funds includes debenture, preference share capital
and other long term loans.
CAPITAL GEARING RATIO=
DEBTS+ PREFERENCE SHARE CAPITAL
NET WORTH – PREFERENCE SHARE CAPITAL
So far as Cham Synthetics PVT. LTD. Is concerned there are no debenture and
preference share capital issue during the years. Hence, this ratio cannot calculate here.
53
(e) MANAGEMENT OF FIXED ASSETS:-
In business there are two types of assets one is fixed assets and second is current
assets.
The assets which can be transferred into cash within short period, that are called
Current assets. And which assets cannot be transferred into cash within a short period that
are called fixed assets.
As the time passed the value of fixed assets is describe as the company
depreciates. The amount of fixed assets is very large so they must be investing with well
planning and great thinking. Fixed assets is generally consist Land, Building, Plant &
Machinery, Furniture etc.
The Cham Synthetics PVT. LTD. Maintain fixed assets which is as under;
PARTICULAR 31-3-1011 31-3-2010 31-3-2009
GROSS BLOCK 41,24,398 9,99,243 11,14,950
Less: DEPRICIATION 15,15,73 1,70,880 1,99,791
NET BLOCK 39,72,825 8,28,363 9,15,160
54
CAPITAL BUDGETING:-
A corporate word is constant in business there are two types of expenditure i.e.
REVENUE EXPENDITURE
CAPIYAL EXPENDITURE
“Capital budgeting means the firms of decision the invest its current funds more
efficient in long run activities in anticipation of an expected flow of feature benefits
over sales of year”
Cham synthetics PVT. LTD. Engaged with whatever business, it has to invest its
fund in fixed assets and current assets.
Capital budgeting means the budget of fund for long term investment, it is
prepared to make the investment in long term assets or any long term project. The
investments in fixed assets are called capital expenditure which is the most important to
the firm.
REVIEW OF LAST CAPITAL PROJECT OF THE UNIT
RFERENCE TO PROJECT COST,PROJECT FINANCING &
IMPLEMENTATION:-
During the year Cham Synthetics PVT.LTD. has invested money in purchasing
following assets.
Machinery = Rs.32, 76,565
Office equipment = Rs.14,000
Computer =Rs. 5,470
In order to increase efficiency and speed of production company has incurred
above capital expenditure.
55
(f) MANAGEMENT OF WORKING CAPITAL:-
Working capital indicates circular flow of cash i.e. a short of a revolving fund
starting with cash to pay for the raw-material, labour and operating expenses and when
finished product are ready for sales, the cash or recovered through sales of these goods on
cash or on credit.
“Working capital that portion of a firm’s current assets which is finance by long
term funds”
Also working capital is known as the excess of the current assets over the total
current liabilities.
As concerned to Cham Synthetics PVT. LTD. The balance of working capital
are as follow..
GROSS WORKING CAPITAL = TOTAL CURRENT ASSETS.
NET WORKING CAPITAL = TOTAL ASSETS – TOTAL LABILITY.
G.W.C. FOR 2009
G.W.C. = TOTAL CURRENT ASSETS. = 45, 21,223.99
G.W.C. FOR 2010
G.W.C. = TOTAL CURRENT ASSETS. = 47, 90,419.86
G.W.C. FOR 2011
G.W.C. = TOTAL CURRENT ASSETS. = 56, 20,303.14
N.W.C. FOR 2011
N.W.C. = T.A. – T.L. = 56, 20,303.14 – 50, 60,402.70 = 5, 59,900.44
N.W.C. FOR 2010
N.W.C. = T.A. – T.L. = 47, 90,419.86 – 33, 96,888.19 = 13, 93,531.67
N.W.C. FOR 2009
N.W.C. = T.A. – T.L. = 45, 21,223.99 – 37, 28,831.07 = 7, 92,392.92
56
MANAGEMENT OF INVENTORIES:-
Inventories are composed of assets that will be solved in future in the normal
course of business operations.
Inventory can involves the value of raw-materials, consumables, work in
progress and finish goods ans screp in which company‟s funds have been invest.
Inventory means tangible property held
I. For the sale in the ordinary course of business or
II. In the process of production for such sale or
III. For consumption in the production of goods or services of sale.
As concerned to Cham Synthetics PVT. LTD. The balance of inventory is as follow;
YEAR INVENTORY
FOR 2011 28, 04,430.00
FOR 2010 24, 23,288.00
FOR 2009 18, 03,844.00
MANAGEMENT OF RECEIVEBLES:-
When goods are sold on credit in business, the price of goods becomes
receivables. We know this amount has „debtors‟ or „receivable‟ or „account receivable‟.
This receivable is assets of the business.
“The term receivable is define as a debt owed to the firm by customers arising from
sales of goods or services in the ordinary course of business”
57
Receivable management of Cham Synthetics PVT. LTD. Is as under,
AVERAGE CREDIT PERIOD = DEBTORS * 365
SALES
FOR 2011
A.C.P. = DEBTORS * 365 = 13, 35,318.85 * 365 = 28.03 = 28 DAYS
SALES 1, 73, 88,453.65
FOR 2010
A.C.P. = DEBTORS * 365 = 15, 28,925.57 * 365 = 35.68 = 36 DAYS
SALES 1, 56, 41,680.76
FOR 2009
A.C.P. = DEBTORS * 365 = 13, 68,469.70 * 365 = 29.003 = 29 DAYS
SALES 1, 72, 21,558
Here average credit ratio is continuously decrease, hence it‟s satisfactory of the firm.
MANAGEMENT OF CASH INCLUDING CASH
BUDGET:-
Cash is the medium of exchange which allows management to carry on the
various activities of the business on day to day basis, cash including coin, currency,
cheque held by the firm and the balance in its bank account. In a broder sense its also
includes „near cash assets‟ such as marketable securities and time deposites with bank.
As concerned Cham Synthetics PVT. LTD. Has sufficient amount of cash on
hands as well as banks,
YEAR RS.
2011 8,71,103.33
2010 2,06,240.33
2009 7,42,868.33
58
Cash budget is a statement showing the estimated cash inflows and cash flows
for particular period.
Cash budget occupies an important place in the financial management of a
modern business enterprise, particularly in an enterprise running on large scale. Cash
budget shows cash receipts from all sources and all payments and also the resultant cash
balance on a definite time. In short cash budget is a plan showing cash position of
business at different time intervals during the year.
59
(g) OPRATING LEVERAGE ANALYSIS:-
Operating leverage means “The firm’s ability to use fixed operating costs to
magnify the effects of changes is sales on its earnings before interest and taxes
{EBIT}.” The operating leverage takes place that a change in sales produces a greater
change in EBIT. Its fixed operating cost is zero for such a firm a gives percentage change
in the level of EBIT. On the other hand a firm will have a low operating leverage when it
incurs smaller amount of fixed cost and relatively higher amount of var4iable cost.
Operating leverage calculated by following formula….
FORMULA FOR OPERATING LEVERAGE
OPERATING LEVERAGE = CONTIBUTION
EBIT
FOR 2009
OPERATING LEVERAGE = 19, 87,142.33
2, 32,832.33
= 8.53 %
FOR 2010
OPERATING LEVERAGE = 10, 15,971.74
2, 56,962.93
= 3.95 %
FOR 2011
OPERATING LEVERAGE = 21, 72,634
4, 12,496.56
= 5.27 %
60
(h) PROFITABILITY AND DIVIDEND
DISSTRIBUTION- A TREND ANALYSIS OF PAST
THREE YEAR
RATION ANALYSIS:-
GROSS PROFIT RATIO
Gross profit ratio indicates firm‟s actual progress in gross profit by comparing sales
with gross profit.
GROSS PROFIT RATIO = GROSS PROFIT * 100
SALES
FOR 2009
GROSS PROFIT RATIO = 12, 02,244.33 *100
1, 72, 21,558
= 6.98 %
FOR 2010
GROSS PROFIT RATIO = 11, 37,042 *100
1, 56, 41,680
= 7.27 %
FOR 2011
GROSS PROFIT RATIO = 19, 95, 884 *100
1, 73, 88,453.65
= 11.48 %
61
0
5
10
15
YEAR 2009 YEAR 2010 YEAR 2011
GROSS PROFIT RATIO
G.P. ratio of Cham Company in 2009 was 6.98 %, than 2010 was 7.27 % and at present
the profit increase up to 11.48 % which is good for the company.
NET PROFIT RATIO
This ratio is advisable to calculate N.P. ratio in addition to gross profit to interpret firm is
actual financial performance.
NET PROFIT RATIO = NET PROFIT *100
SALES
FOR 2009
NET PROFIT RATIO = 89,340.33 *100 = 0.52 %
1, 72, 21,558
FOR 2010
NET PROFIT RATIO = 1, 42,478.94 *100 = 0.91 %
1, 56, 41,680
FOR 2011
NET PROFIT RATIO = 1, 83,510.73 *100 = 1.06 %
1, 73, 88,453.65
62
0
0.2
0.4
0.6
0.8
1
1.2
YEAR 2009 YEAR 2010 YEAR 2011
NET PROFIT RATIO
N.P. ratio of Cham Company in 2009 was 0.52 %, than 2010 was 0.91 % and at
present the profit increase up to 1.06 % which is good for the company.
CURRENT RATIO
Current ratio shows that relationship between current assets and current liability.
CURRENT RATIO = TOTAL CURRENT ASSETS
TOTAL CURRENT LIABILITY
FOR 2009
CURRENT RATIO = 45, 21,223.99 = 1.29:1
37, 28,831.07
FOR 2010
CURRENT RATIO = 47, 90,419.86 = 1.41:1
33, 96,888.19
FOR 2011
CURRENT RATIO = 56, 20,303.14 = 1.11:1
50, 60,402.70
63
0
0.5
1
1.5
YEAR 2009 YEAR 2010 YEAR 2011
CURRENT RATIO
Current ratio can said that sound position of the company to meets its current
obligation out of the current assets. It is good for this fir,
LIQUID RATIO
Liquid ratio shows relation between liquid assets and liquid liability. This ratio
shows liquidity of company to pay liquid liability.
LIQUID RATIO = LIQUID ASSETS
LIQUID LIABILITY
= CURRENT ASSETS – INVENTORIES
CURRENT LIABILITY - BOD
FOR 2009
LIQUID RATIO = 45, 21,223.99 - 1803844
37, 28,831.07 - 0
= 0.73:1
FOR 2010
LIQUID RATIO = 47, 90,419.86 - 2423288
33, 96,888.19 – 0
= 0.70:1
FOR 2011
LIQUID RATIO = 56, 20,303.14 - 2804930
50, 60,402.70 - 0
= 0.56:1
64
0
0.2
0.4
0.6
0.8
YEAR 2009 YEAR 2010 YEAR 2011
LIQUID RATIO
It has generally belied that in current assets are equal to or more than liquid
liabilities the condition may consider as satisfactory. Cham Synthetics PVT.LTD.
Company is not satisfactory liquid ratio.
PROPRIETARY RATIO
Proprietary ratio shows relationship between shareholders fund and total assets
of the company.
PROPRIETARY RATIO = PROPRIETARY FUND
TOTAL ASSETS
= SHARE CAPITAL + R.& S.
TOTAL ASSETS
FOR 2009
PROPRIETARY RATIO = 1000000 + 878532.66
5702711.20
= 0.33 times
FOR 2010
PROPRIETARY RATIO = 1000000 + 1021011.60
5895653.79
= 0.34 times
FOR 2011
PROPRIETARY RATIO = 1000000 + 1288939.98
9801773.24
= 0.23 times
65
0
0.1
0.2
0.3
0.4
YEAR 2009 YEAR 2010 YEAR 2011
PROPRIETARY RATIO
Proprietary ratio indicates sound financial position of the company here this
ratio was compare last year ratio it was decrease 0.11 times which is not satisfactory for
this company.
DEBT EQUITY RATIO
Debt equity ratio calculates by following formula.
DEBT EQUITY RATIO = LONG TERM DEBT
SHARE HOLDERS FUND
FOR 2009
DEBT EQUITY RATIO = 95347.47
1878532.66
= 0.05:1
FOR 2010
DEBT EQUITY RATIO = 477754
2021011.6
= 0.24:1
FOR 2011
DEBT EQUITY RATIO = 2452430.56
2288939.98
= 1.07:1
66
0
0.2
0.4
0.6
0.8
1
1.2
YEAR 2009 YEAR 2010 YEAR 2011
DEBT EQUITY RATIO
Here we can say that this ratio increase from 0.05 up to 0.24 then 1.07 as
compared to last year so we can say that it is not satisfactory in this company.
ASSETS TURNOVER RATIO
Assets turnover ratio calculate by following formula..
ASSETS TURNOVER RATIO = SALES
FIXED ASSETS
FOR 2009
ASSETS TURNOVER RATIO = 17221558
915160
= 18.82 times
FOR 2010
ASSETS TURNOVER RATIO = 15641680.76
828363
= 18.88 times
FOR 2011
ASSETS TURNOVER RATIO = 17388453.65
3972825
= 4.38 times
67
0
5
10
15
20
YEAR 2009 YEAR 2010 YEAR 2011
ASSETS TURNOVER RATIO
In this year this ratio is decrease 14.5 so way can say that company inefficient manner.
And this not good position for cham company.
STOCK TURNOVER RATIO
Stock turnover ratio calculates by following formula……
STOCK TURNOVER RATIO = COST OF GOOD SOLD
AVERAGE STOCK
WHERE,
COST OF GOOD SOLD = NET SALES – GROSS PROFIT
AVRAGE STOCK = OPENING STOCK + CLOSSING STOCK
2
FOR 2009
COST OF GOOD SOLD = 17221558 -1202244.33
= 16019313.67
AVRAGE STOCK = 1561697 + 776799
2
= 1169248
ASSETS TURNOVER RATIO = 16019313.67
1169248
= 13.7 times
68
FOR 2010
COST OF GOOD SOLD = 15641680.76 -1137042.74
= 14504638.02
AVRAGE STOCK = 776799 + 897870
2
= 837334.5
ASSETS TURNOVER RATIO = 145046380.02
837334.5
= 17.32 times
FOR 2011
COST OF GOOD SOLD = 17388453.65 -1995884
= 15392569.65
AVRAGE STOCK = 897870 + 721120
2
= 809495
ASSETS TURNOVER RATIO = 15392569.65
809495
= 19.02 times
69
Stock turnover ratio is increasing every year so we can say that which is
satisfactory for Cham Synthetics PVT.LTD. Company.
70
(I) RIGHT ISSUE, BONUS ISSUE, CONVERTIBLE
ISSUE, FUND RAISING THROUGH PUBLIC
DEPOSITS,ETC IF ANY
Companies obtain require additional funding for their working capital and
expansion plant. They raise funds some times by selling additional equity share on a
rights basis to its shareholders, these shares are called „ right shares‟ .
Bonus means premium or gift which is paid normally in cash. Bonus share is a
free share of stock given to current/existing shareholders in a company.
Convertible issue means that type of preference share or debenture that conver
after sometime in equity share.
These are term deposit made by the public with companies for 6 months, 1
years, 2 years and up to 3 years. Under this method public is invited to deposit their
saving with the company for varying periods as mentioned above at rates of interest
which are normally higher than those on term deposits by commercial banks.
As concerned Cham Synthetics PVT. LTD. Is not issued any right share, bonus
share, convertible issue, public deposit and so on. If company require capital they thake
secure loan for the banks.
71
It is necessary for each and every organization to made plan for it future, In
order to get success in future and to survive. For long time. It is almost must for every
company to decide its future plan.
At present Cham company is producing fishing nets, Ropes and also exporting
fish in our side the counties etc. They become popular in all their product market.
So for as Cham synthesize is concerned its basis future plan to reducing the cost
of production by reducing expenses and increase the production capacity with the use of
new machine important from Koria and to improve the satisfaction of the employees and
consequently increase their productivity.
72
I have visited the “Cham synthetics Pvt.Ltd, “of Porbandar, It is consigning its
production from many year‟s and due to quality maintained. In has created a very
good reparation in national level.
At last, I conclude that “Cham synthetics Pvt.Ltd.” is very well managed
company; it is expand their business with starting new unit, & increases their
capacity.
The relationship between employees & employer are very good. All the
department are Co-ordinate properly, and faunal way although it may create homely
environment.
I enjoy, every much with the staff of unit it is memorable experience for me.
73
I have referred many books for preparing this report following are the books,
have referred for preparing this report.
Marketing Department:
Marketing Management: Philip Kotler
Personnel Department:
Management of HRD : Dr. C.B.Memoria
Finance Department:
Finance Department: B.S.Shah
Books of Accounting:
Company Account: B. S. Shah
