DECLARATION

I, the undersigned Ankit Kiyada a student of S.Y.B.B.A. here by declare that

the project work presented in this reports is my own work and has been carried out under

the supervision of MR. HITESH BHATT of H.N.SHUKLA COLLEGE.

This work has not been previously submitted to any other university for any

examination.

DATE : SIGNATURE

PLACE : RAJKOT (Ankit H.Kiyada)

PREFACE

With the turn of century expert knowledge and specialized technologies will

become part of our day to day life, that will further increases the need of practical

knowledge in educational to enter into actual world.

B.B.A. is a two year full time professional degree course. It is interesting to not

that B.B.A. includes practical aspects of students as well as theoretical portion. This is what

makes it different then other routine courses.

In this course, we have special of practical training by SAURASHTRA

UNIVERSITY. The objective of practical training of B.B.A. is to develop among the student

the awareness about the industrial environment and business practices.

This project work undertaken is of KADVANI FORGE LTD. Situated in

G.I.D.C. Lodhika, Plot No. G/1326-27 & G/1319-20, Kalavad Road, Dist. Rajkot. Engaged in

manufacturing of forged products.

ACKNOWLEDGEMENT

I would to like to thanks MR. BHAVESH VEGDA (Director) who had given

permission to me, for preparing project report and also given information and extra guidance in their

field.

I would like to express my feeling of gratitude to principal of H.N.SHUKLA

COLLEGE MR. MEHUL RUPANI who had given me permission for preparing the report.

I am extremely very thankful to MR. HITESH BHATT for their extra guidance for

the whole training programmed and I also express thanks to my parents and my friends for providing

men necessary helps and deep encouragement.

At last but not least I was also thankful to all the person of KADVANI FORGE LTD.

And especially to MR. NAINESH PANDYA for their help and guidance for preparation of this

project report.

INTRODUCTION

Kadvani group was established as Kadvani Oil Mill before 20 years in 1980.

the company got existence as Kadvani Securities Ltd. In 1994 – 95. Huge potentials in the

field of forgings evinced great interests and established as a small scale industry and had

received its commencement certificate on 2nd August 1995. After that in the year 1996-97, it

has started its commercial production. All the operations are under the direct supervision of

the undersign, who has rich practical experience of over 21 years in the field of forging,

assisted by a qualified and experiences team thereby assuring you of quality and precision

products.

KADVANI FORGE LTD.. Was established as a Small Scale Industry and date

of its Incorporation iin August 1,1995 and had received its commencement certificate on

August 2,1995. After tat in the year 1996 – 97 it has started its commercial production.

KADVANI FORGE LTD. Plant situated in the outskirts of Rajkot, in the state of

Gujarat, incorporates a full fledge forge shop, die shop. Heat treatment plant and

metallurgical Lab all under one roof.

KADVANI FORGE LTD. with their skilled dedicated and experienced team of

personnel caters to the quality demands of customer with timely delivery as per their

requirements to diverse Industries viz. Automobiles, Tractor, Mining, Earthmoving, Electric

Transmission, and Machine tools etc.

PORTFOLIO

Name of company ~ KADVANI FORGE LIMITED

Address ~ GIDC Lodhika, Plot No. g/1324-27,

Kalavad Road, PO : Khirasara Dist.

RAJKOT – 364485

Tel. No. : (02827) 287264 - 70 - 71

Fax : 02827 - 287263

Register Office ~ Niraj Appartments, 22 New Jagnath,

Rajkot - 360 001, GUJARAT, INDIA.

Tel. No. 91-0281-2465416

Fax: 91-0281-2466762

Chairman ~ Shri Kishore L. Kadvani

Date of Incorporation ~ 01-08-1995

Date of Commencement ~ 02-08-1995

Bankers ~ Bank Of India

Auditors ~ Kalaria & Sampat

Telephones ~ (02827) 87263-70-71

(02827) 87264-70-71

E-mail ~ forge@kadvanigroup.com

Website ~ www.Kadvanigroup.com

Weekly off ~ Wednesday

Working Hours ~ 8 hours (One Shift)

Working Days ~ 300 days

Shifts ~ 8:00AM To 4:00PM

4:00 PM To 12:00PM

12:00PM To 6:00AM

Accounting Year ~ 1st April To 31st March

Forging Capacity ~ 12000 tons per annum.

Size of unit ~ Medium Scale

Objective ~ Customer Satisfaction & Earning Profit

SIZE OF THE UNIT

Generally units can be classified in three groups on the basis of the

investment in fixed assets.

Units having investment of Three crores of less than that in fixed assets is

called small scale industry.

Any unit having investment between Three crores to Five crores is called

medium scale industry.

Any unit having investment in fixed assets more than Five crores is called

large scale industry.

KADVANI FORGE LTD. is a medium scale industry as the investment in

machinery is of Four crores rupees.

FORMS OF THE ORGANIZATION

The following forms of organization carry on modern business.

Forms of business organization

Private Enterprise Co-operative sector Public Sector

Sole Trade Co-operative Sector Government Dept.Partnership Co operative Society Government CompanyCompany Organization Statutory Corporation Private Company Statutory BoardPublic Company

In India we have adopted the pattern of mixed economy where in we have two

distinct sector private enterprise and public enterprise. Public enterprise means ownership

and management of public and Government i.e. Government Department, Semi

Government etc. Private enterprise means ownership and management of control by

individual of group of individual.

PRIVATE ENTERPRISE

Sole Trader

Partnership

Company

Private Company

KADVANI FORGE LTD. is a Private company.

TIME KEEPING SYSTEM

1. Time keeping helps in keeping check over of obsentisium.

2. It also helps in calculating wages and salary on the basis of attendance

3. Time keeping system helps in creating a discipline atmosphere by making

employees regular at work.

KADVANI FORGE LTD. has a computerized punch card system. As the

workers come they have punch the card so that time is noted. The card has all the details of

the employee. He

For office employees

8:00 AM TO 1:00 PM

1:00 PM TO 2:00 PM (Recess)

2:00 PM TO 6:00 PM

For Workers

8:00 AM TO 4:00 PM ( First Shift )

4:00 PM TO 12:00 PM ( Second Shift )

12:00 PM TO 6:00 AM ( Third Shift )

On Thursday they are having a holiday what generally having in all industries.

On Thursday Shift changing in Rotation.

ORGANIZATIONAL STRUCTURE

The superior subordinate relationship are defined by organizational structure,

which are formal documents that indicated the chain of command and the title that have

been assigned to the managers and the other personnel. These structures indicate

people’s location of positions in the hierarchy and their relationships within the formal

organizations. They aid in determining which of the basic types of organizational authority

structure a particular enterprise has adopted.

Importance of organization can be related from few words said by

richest man of one time is much “Take away my factories, land and all what I have

but just leave my organization and in few years, I will be where I was”.

Andrew Carnegie

“Organization is the process of so combining the work which

individuals or groups have to perform with facilities necessary for its execution, that

the duties so performed provided the best channels for efficient, systematic, positive

and co ordination application of available efforts”.

With help of systematic organization company can work more efficiently .the

organization makes the delegation of work so that the work becomes easier. It also makes

the chain between the people. In this way everyone has to be responsible for the work.

According to my observation Line and Staff Organization is adopted. It means

authority is in the hand of top level and responsibility rests with medium and lowers level.

Authority flows from Top to bottom and responsibility flows from bottom to top.

ORGANIZATIONAL CHART

Managing Director

Commercial Director Technical Director

Finance Marketing Personnel Manager Manager Manager

Production Metallugist Quality Manager Manager Manager

PLANT LOCATION

Every entrepreneur of a business unit must give full consideration to suitable

location of this entrepreneur because location factors are crucial for profit maximization. An

entrepreneur has to choose such type of location, which minimizes the company of

production as well as distribution to a considerable extent. However actual choice of

location is governed by.

The location of unit is as under :-

KADVANI FORGE LTD.

G.I.D.C. Lodhika Estate,

Kalawad Road,

PO : Khirasra,

District : Rajkot – 360 003

GUJRAT, INDIA

LAND

The company has acquired 22500 sq. meters. Of land from G.D.I.C. and the

land is more than adequate for proposed project. As the proposed project is in G.I.D.C.

location area all the infrastructure facilities such as power, water, communication service,

roads etc. are easily available and also the project has also got relief from sales tax.

NEARNESS TO MARKET

Nearness to the market is important for supplying goods to customers in a

minimum period of time adjusting supply according to the changes in a demand and gaining

control over the market. Nearness to the changes to the market reduces the costs of

transportation finished goods to the market and enhances taking advantage of favorable

prices and demand in the market. The producers survival capacity increases when the

market is near the center of production. Rajkot city has many industries like Diesel Engines,

Machine Industries, etc which offer ready existing market for company’s products.

TRANSPORT FACILITIES

Transportation facilities with a good speed and capacity are needed for

transporting labourers and establishing contacts in the market and controlling supply

according to the changes in the demand. Rajkot is situated centrally in the Saurashtra

region. Rajkot is well connected with almost major industrial cities by roads. For exports,

Kandla port is nearest and Mumbai port is also easily accessible.

AVAILABILITY OF LABOUR

The importance of labour has not lessened in spite of mechanization. If the

supply of labourers is not regular man hours and machine hours are lost. Surroundings the

Rajkot region there are very large numbers of forging plants. So there is no depth of skilled

and semi skilled workers.

KADVANI’S manufacturing unit at G.I.D.C. Lodhika Dist. Rajkot. Gujarat (INDIA)

SISTER CONCERNS

Kadvani group have many industries and wide field,which is as follows .

1. KADVANI OIL MILLS

In 1965, The Kadvani Group was established. The patron Shri Lakhabhai

Vithal bhai Kadvani introduced Kadvani Oil Mill. Kadvani Chemicals followed this maiden

adventure in 1981, which in turn lead to Kadvani Securities in 1995. One more limited

company followed its trial mamely KADVANI FORGE LTD. in 1995. The year 2000, brought

with it Kadvani Itech. The latest venture of the group.

When Kadvani Chemicals was launched in 1981, it immediately became a

pioneer in the field of manufacturing Precipitated Silica in India. This being an import

substitute product helped to save lot of foreign currency. Again the rubber product market

was conquered when clients like Hoechst Limited, Elgi, Shri Hindustan Latex and many

others became the buyers of the product. A brand name Kad Sil was established in the

market. The plant was modernized, expanded and shifted to jamnagar on the banks of

Arabian Sea. In spite of huge demands High quality has never been compromised.

1. KADVANI SECURITITES LTD.

The formation of Kadvani Securities Ltd. was brought about when Mr. Kishore

L. Kadvani became the member of Saurashtra Kutch Stock Exchange. It is listed at the

Bombay Stock Exchange and the shares of the company are still actively traded.

2. KADVANI FORGE LTD.

Looking at the immense growth potential in the automobile industry. The

Kadvani group promoted one more limited company named KADVANI FORGE LTD. in a

couple of years its popularity surged in the forging market. The Railways, Defense, OEM

like Mahindra & Mahindra, Bharat Earth Movers Limited, Greaves Limited as well as large

auto part manufacturers of Rajkot like Amul Industries, SAR Auto products Limited, Kisan

Auto Parts Limited are its reputed clients. This manufacturing companies as also been

accredited and certified for ISO 9002, Quality System in the company by TUV

management, GMBH of Germany. 30% of its total production is exported to USA, Australia,

Morocco, France, and Dubai etc.

3. DEVHARI EXPORTS

This is Exporting Company, which is in transportation filed which also plays a

vital role in this field in Rajkot, which is given by a Kadvani Group.

4. KADVANI CHEMICALS

This is company, which is started earlier from KADVANI FORGE LTD., which

is chemical producing company, which is also very important company given by the

Kadvani Group.

5. KADVANI ITECH (A division Of Kadvani Securities Ltd.)

The introduction of Kadvani Itech gave a lot of diversification to this group.

The Information Technology business of the 21st Century Lured the third generation

Kadvani’s to explore and gain once again, Training, Development, Solutions and services

related to Information Technology cover a large part of present activity. Diversification to

Web Development, E Business and E Mail suit, Knowledge Management, Data

warehousing and mining, Networking and Telecommunications, Consultancy and Software

Development makes the Itech maestro a well equipped player in the IT arena.

INTRODUCTION

Production is the basic activity of all industrial units. Another activities revalue

around this activity. The end product of the production activity is the creation of goods and

services for the satisfaction of human wants. The production activity is nothing but the step-

by-step conversion of one form of materials into another either chemically or mechanically.

Production is considered as a heart of any company. Production involves the step-by-

step conversion of one form of materials into another through chemical or mechanical processing to

create or enhance the utility of the products.

“ Production is the process by which goods and services are created”

-E.S.BUFFA

MATERIALS PRODUCTS

LABOUR SERVICES

CAPITAL INFORMATION

ENERGY PRODUCT OR SERVICES

INFORMATION

RESOURCES

PRODUCTS

INPUTS OUTPUTSPRODUCTION FUNCTION

KADVANI FORGE LTD. is producing industrial product with a large variety. It

manufacture closed die steel forged products as per the specifications in carbon, alloy and

stainless steel and supply them in as treated, partially or fully machined condition.

The products is a thing which is offered to the customers to satisfy their needs

and wants product is most important and tangible component of marketing programmed

moreover the finished products of some company may raw materials for other company.

The forging items of KADVANI FORGE LTD. are raw material for auto manufacturing units.

The products of the company are as follows.

The important factor of each and every industry is production process. It is a

heart of any business in market. The manufacturing involves machineries as well as

manpower. The production is done on large scale.

The layout of the plant has been designed in such a way so that all the

manufacturing activities are under one roof. Such that the flow of material process at one

stage automatically flows to a next stage of processing thereby reducing manpower to

handle the material from one place to another and avoid waiting time for the next process.

“Maintaining the quality standards through constant evaluation inspection and

verification”.

The Production Department of KADVANI FORGE LTD. following the above

sentence and it producer forged products up to 50 kg weight.

KADVANI FORGE LTD. also supplying forged products to many other

companies with finished machining gears, pinions, crown wheels, connecting roads, cam

shafts etc in India and abroad.

PRODUCTION PROCESS

On the receipt of order and drawings die shop manager prepares dies with the

samples of Plaster Of Paris from dies are used for dimensional checks with customer

drawing. After that inspection is dined of that sample if fair results come the other

processes are preceded. After that the metal, which is in the billet form, is cut to the

required length as per cutting slip. The company is using electrical equipment for cutting the

raw materials. The cut metal piece is heated in the oil-fired furnace. On heating, the metal is

forged. The forging may be open forging or die forging. In open forging the heated material

is subject to blow under the pneumatic hammers while the skilled workers manipulate the

position and bring the metal to required size. Then die forging is done. In die forging a die is

prepared from other material and not from steel, which has the impression of hot

components to be manufactured, and that die is fixed in the top half manner. The heated

metal piece is kept on the bottom half of the die and the hammer with top half impacts on

the metal. This results in the metal attaining the shape of the die capacity.

After the forging process, the component is subjected to heat treatment, which

removes the residential stresses that are forging process and which give the requisites

metallurgical properties to the components.

Once the heated treatment is over, the component is rough machine after

which finish machining is done. If the component does not require machining then it is

subjected to shot blasting that removes scales formed during forging and heat treatment.

The process of giving shinning is done to the finished product of the company.

STAGES OF PRODUCTION / PROCESS LAYOUT

The layout of the plant has been designed in such a way so that all the

manufacturing activity is under one roof such that the flow of material processed at one

stage automatically flows to a next stage of processing thereby reducing manpower to

handle the material from one place to another and avoid waiting time for the next process. 

The production process shop is also equipped with EOT cranes to shift the

material from place to place.  

Stages Of Production Process:

1. LABORATORY

All the incoming raw materials & die blocks are tested here as per our Quality

Assurance plan, which is based on our customer's requirement.  

  

We are performing chemical analysis by

classical methods. Our chemical and metallurgical

laboratory is equipped with following

T.S

H.T

Microscope with camera

Macrostructure

We are planning a spectrophometer in the future.

Following tests are carried out in our laboratory:

1. Chemical analysis of Raw Material used to manufacture forged products an die

steels blocks.

2. Microstructure.

3. Grain Size.

4. Inclusion rating.

5. Step turn test.

6. Upset test.

7. Joining Harden ability test.

All the above tests are carried out under the supervision of qualified

metallurgist and experienced chemists supported by skilled workmen. 

Failure based evaluation and our experienced personnel in our laboratory also

do analysis.

2. STOCK YARD

It is used for storage of Raw Material. Each material is tested and color-coded

as per the procedures. The material is stored in such a way that the different grades and

heat of material are easily identified so there is no chance of mix up.

In order to meet customer production

schedules material up to 1000 tons is stored so as

to avoid any material crisis for production.

List of Raw Material Suppliers :

1. Mahindra Ugine Steels Company Limited

2. Rashtriya Ispat Nigam Limited

3. Ispat Profiles In DIA Limited

4. Mukand Ltd.

5. Indian Seamless Steel & Alloys Ltd.

6. Vardhman Special Steels

3. CUTTING

The cutting shop is used for Raw material

cutting. The band saw and hacksaws are used for

cutting the raw material free from burrs and within

the given weight tolerance limits so as to reduce

any problems during the forging process.

4. HEATING AND FORGE SHOP

We have three Polish make a double acting closed die

forging Pneumatic Hammers in Kadvani Forge Ltd OF 1

Ton, 3 Ton and 6 Ton capacity and all the hammers are

supported with oil fired furnaces and mechanical

trimming press of required capacity. We have 600 ton

hydraulic press for the cold coining operation.

The rejection level is the minimum in the

industry. Supervision is responsible for production and

engineer is responsible for maintenance of Quality per

shift. We are having a good team of Forgers,

inspectors, pressmen, airmen, furnace men etc.

F.S. Engineers take 5 readings at every hour. Engineers also first prepare first/final

sample inspection report and die status report (Twice in a shift) Statistical Process Chart

(SPC) is made at all level of process to control the quality of the product. Engineer is

responsible for SPC. Every hour 5 readings are taken form job and prepared SPC which is

marked on SPC chart at forge shop from which we know that how the process is working in

presence of metallurgists.

5. DIE SHOP

An ultramodern facility in our die shop is

our backbone to maintain our strict delivery schedules.

A highly qualified and technical staff and a

very good machinery helps us to develop dies just in

time so as to reduce the time lag in developing new

samples without hindering the normal production cycles.

Dies are prepared as per our customer

samples or drawing. The die material used is as per DIN

2714 and is thoroughly checked at the incoming stage

so as to reduce the failure during production.   

A predispatch plaster cast inspection report is prepared so as to access the

usefulness of the die before sending it to the forge shop.

Within four years 190 types of components like crankshaft, connecting rods,

gears, steering parts, earth drilling rigs parts etc. have been developed and their dies are

available at KADVANI FORGE LIMITED. 

List Of Machinery at used for Die Fabrication :

Type of Machine/

Facility Description

Make

and

Model

Machine Specification

Copy Milling Machine - Single

SpindleGerman 800 X 600 X 450 mm Work Area

Copy Milling Machine - Double

SpindleSwiss 1000 X 600 X 450 mm Work Area

Electric Discharge Machine

(EDM)Indian 600 X 500 X 400 mm Work Tank

Planner Machine Indian 4000 X 800 mm Table 

Lathes.  Indian 10 feet - 2 Nos.  &  8 feet - 2 Nos.

All the necessary inspection and layout instruments and gauges facilitate our die shop.

List Of Suppliers Of Die Blocks

PCK BUDERUS (INDIA) SPECIAL STEELS PVT LTD

(Suppliers of BUDERUS DELSTAHL, Wezlar [Germany])

6. FINAL INSPECTION AND DISPATCH

KADVANI FORGE LIMITED has its own inspection plan based on the

experience and reference dimensions in the drawing. 

1. Dimensional an All the forged products are

shot blasted to clean the surface of parts and

100% visual inspection is done to identify

any forging defects such as unfilling,

mismatch, scale pits, cracks, scabs, folds etc.

 

2. After completion of visual inspection critical dimensions which is used as reference

point of the 1st operation for machining are checked 100% with gauges and fixtures.

 

3. Certain percentage of the parts in a lot

complete layout of the job is also carried out

as per the instruction plan.

 

4. Magnetic Crack Detection of some of the

parts are also carried d visual inspection is

carried out in the following manner out (if

needed) as per the instruction of the customer.

 

5. One or two pieces from the lot are taken to the laboratory to confirm the grain size

and microstructure of the component as per the specification of the customer.

 

6. Hardness Testing (10 - 15% per batch) is

carried out for other than quenched and

tempered items and 100% hardness testing for

quenched and tempered items. Once the

material is approved then it is either stored or

packed and dispatched as per the schedule. 

7. SHOT BLASTING

All the forged components have to undergo the

shot blasting operation to clean the surface of the

components before 100% visual inspection.

Antirust coating is done before packing and

dispatch of the material to the customer

8. HEAT TREATMENT

In heat treatment shop we are having facilities for

normalizing, hardening, tempering, annealing,

isothermal annealing on oil fired semiautomatic

furnace. We are having two continuous furnaces one

of 400 Kg/Hr. and another 800 Kg/Hr. 

To meet the metallurgical requirements viz.

hardness and microstructure we have planned one heat treatment plan and work

instructions for each item with all the technical parameters.

All the heat-treated jobs are confirmed by hardness testing (minimum 5% of the lot)

and microstructure test of one piece from each lot is carried out to confirm the reliability. We

control hardness in a narrow range i.e. 15 to 20 BHN along with uniformity in

microstructure.

KADVANI FORGE LTD. are having a well educated personnel with rich experience

along with expertise in heat treatment activities under the guidance of metallurgists.

PRODUCTION CAPACITY Kadvani Forge Limited was

registered under the company registration act in

the year 1995. To supply quality forged products to

the OEM'S in this part of the country. we had

established the company with a mere one hammer

of 1 ton capacity and started the production in

1997 and capacity to produce 960 tonnes/year.

The positive response from our valued customer

gave us the strength to put one more hammer of 3 ton capacity in 1998 and production

capacity increased 4800 tons/year in the year 1999 and 2000. 

The advantage of quality products at right time to our customer can be seen

that company installed one more hammer of 6 ton capacity, there by the total production

capacity per month is 10800 tons/year now.

The qualified, experienced team of professionals at all levels of management

tried to abide by the policy of the company to achieve the to become an ISO 9002 certified

company in January 2000.

Referring to the production capacity company also installed all the supporting

infrastructure in Die Shop (for making dies), Cutting Shop, Heat Treatment and final

inspection purposes and company could develop 190 types of parts within a span of a

year (i.e. one new item / week.) Therefore, Kadvani Forge Limited has Various types of

components e.g.

Connecting Rods

Crank Shafts

Cam Shafts

Gear Blanks

Pinion

Crown Wheel

Gear Shifter Fork

Torque Converter Cover

Universal joint components

Bucket tooth etc.

For customers in the following sector

1. Automotive

2. Railways

3. Defense

4. Petrochemical

5. Farm equipments

6. Excavators or Earthmovers etc.

Timely delivery of the components as per technical requirements of the

customer has bagged many approval certificate for us from different OEM'S e.g.

1. Mahindra and Mahindra Ltd. (Tractor division), the largest Tractor Manufacture in

India.

2. Greaves Limited, Engine Manufacturer in India in Collaboration with Italian

company.

3. Ministry of Defense (Govt. of India) for their Aeronautical wing.

4. Ministry of Defense (Govt. of India) for parts of automotive vehicles for the Indian

Army

5. Bharat Earthmovers Ltd., the biggest Earthmovers manufacturer in India under

collaboration with KOMASTU, Japan

6. ISO 9002 Quality Systems Certification from TUV suddentechland, Germany

PRODUCTION PLANNINGThe basic objectives of hating the manufacturing organization are to make

products. Thus production is nucleus on the center of the entire business operations.

Production planning comprises the planning. Routing, dispatching in the manufacturing

process so that the movements of materials, performance of machines and operations of

labour are directed and coordinated as to quality, quantity and time. Production planning is

pre operation activity. It aims to make all necessary arrangements so that the production

targets as set in the production budget and master schedules are reached.

According to Alford & Beatly, production planning is defined as “ The

techniques of forecasting of picturing ahead every step in along series of separate

operations each step to be taken in the right place, of the right degree and at the

right time and each operations to be done at the maximum efficiency”.

RAW MATERIALS & ITS SOURCES

The main raw materials for the manufacturing of forgings components

consists of EN-8D, EN-8, Mild Steel, EN-16, EN-19, Mild Carbon steel, SAE-8620, SAE-

18, EN-353, 20MN-CR5, 16MN-CRS.

The company procures above mentioned raw materials from the various steel

mills namely:

1. RINL ISPAT NIGAM LTD. – Situated at Vishakapatnam

2. MUSCO – Malindra Ugine Steel Co. Situated at Pune

3. TISCO – Tata Iron & Steel Co. Situated at Jamshedpur

4. MUKUND STEEL – Situated at Punjab

5. ARTI STEEL – situated at Punjab.

METHOD OF PURCHASING

There are some basic features of scientific purchasing of buying of raw

materials namely:

Right Quality

Right Time Of delivery

Right Place

Right Place of Delivery

Right Sources of Supply.

There are various methods of purchasing following by a trader like forward

purchasing in KADVANI FORGE LTD. it is done on credit basis. The raw materials are

mostly brought from outside the Gujarat.

STORAGE FACILITY

The storage of goods is connecting link between the shops of working places

and production, control departments materials parts work in progress etc. mover through

the store just as money mover in to and out of the commercial banks. Principals functions of

store is to act as a clearing house for goods being translated.

Storage facilities are available in the factories are available in the factory

remises itself. The total area covered by the storeroom is 1000 Sq. meters.

MACHINERY:

Machines in the factory are mainly obtained from and within India. Few

machinery is imported from abroad which is used for Die Fabrication. Such as milling

machine single spindle purchased from Russia in 2000 Cincinnati Copy milling machine

from USA in the year 2002.

MANAGEMENT OF RESIDUE:

The residue is managed to the best of the efforts that could have been done

by the KADVANI FORGE LTD. After the whole production process the wastage products

goes for remolded to the steel plants.

QUALITY CONTROLKadvani Forge Limited has it's own inspection plan for all the components and

it's processes at different stages of production.

 

1.    Incoming Material Inspection :-

All the material coming to the company from different sources has to undergo

the inspection and testing as per inspection plan before it goes to stores.

Raw material incoming from the approved steel mills are kept in the stock yard and 100%

visual examination and spark testing is done.

Chemical, metallurgical and physical testing is also carried out as per the plan or instruction

of the customer.

After approval of the material in the laboratory, color code given to each and every bar of

the same grade.

 Physical testing e.g. upset test, step turn test, tensile test, Impact test, macro etching is

also carried out.

Metallurgical testing of the material e.g. Inclusion rating, Grain Flow, Microstructure is also

carried out.

2.    Process Inspection: -

Inspection is carried out at every stage of

production at different stages e.g. Die Shop, Cutting Shop,

Forge Shop, Heat Treatment Shop.

Each shop or processing dept has it's own inspection plan to satisfy the customer's needs

depending upon the experience and expertise.

Die Shop :- Dies are checked thoroughly before dispatch for production and

reports are kept in file for reference.

Cutting Shop: - All the cut pieces are checked for the required cut weight as

needed to produce particular parts.

Forge Shop: - Temperature in furnace is controlled by the temperature

controlled provided with each and every furnace. 100% visual hot inspection is done for

forging defense, weight and at specified intervals, and SPC chart is made to assess the

effectiveness of the process. 

Heat Treatment: - Personals responsible for the process under direct

supervision of qualified metallurgies and experienced chemist and skilled workers are

working as per the work instruction and inspection plan.

Certain pieces are selected from each lot of components passing through the process of

heat treatment and are tested to confirm the hardness, microstructure, grain size of the lot

as per need of the customer.

Heat treatment furnaces are equipped with temperature indicator and controller.  

We can do normalizing, annealing, hardening, tempering, solution annealing, Isothermal

annealing of the steel forged components.

All care is taken to control the hardness within a navigation of hardness from piece to piece

up to 15 BHN.

3.    Final Inspection :-

All the forged parts coming this shop are shot blasted and following inspection carried out

as per plan.

1.Visual inspection for scale pit, folds, unfeeling etc.

2.Dimensional inspection :- critical dimensions like thickness and references points for 1st

operation at the customers end are checked 100%.

3.Layout :- Some of the piece/lot are fully laid out for dimension as per the drawing before

dispatch.

4.Packing :- Packing of the components and dispatches are made as per customer

requirement.

PRODUCTS MADE

CAFL is producing industrial products with a large variety. It manufactures

forgings as per customer’s drawings and specifications in carbon, alloy and stainless steel

and supply them in as forged treated partially or fully machined conditions. Name of

products are Crankshafts, Rocker Arms, Drop Arm, Steering Knuckle, Spinders, Shakles,

shafts, Hooks etc. the details of the few products are given below.

1. CONNECTING RODS –

Connecting rods form the heart of internal combustion engine, which is an integral part of

cars,tricks and ships etc. It transforms the circular motion or crankshafts into reciprocal

motion thereby moving the piston to create compressive strength to start an accelarate

engine. Material used for this component commonly is CK-45, EN-16 and EN-29 etc.

2. CRANKSHAFTS –

Crankshaft forms the part of the internal combustion engine, which gives motion to the

connecting rod to generate compressive strength of the engine. Materials used for this

component is CK-45, EN-16 and EN-29 etc.

3. GEARS –

Gears are an important part of most of the machines and engines. It is used to change the

speed of the rotating parts in a machine. It also controls the speed of an automotive vehicle.

Material used for this component is SAE 8620, EN 353, 20 MNCR5, SCM 415.

4. BUCKET TOOTH –

This is used as the part of the Bucket of an excavator which excavator in digging the soil

breaking rocks. It is made of a very hard material commonly known as Barren Steel.

5. FLANGES –

Flanges are used in join two pipes in petrochemicals industries. Pressure rating of flanges

is very critical and is dependent on the pressure exerted by the fluid flowing in the pipeline.

Material used for this component commonly is ASTM, ALO5, Carbon Steel and Stainless

Steel.

RESEARCH AND DEVELOPMENTResearch is an activity, which is carried on for the further progress of the

company. Due to research the new products are launched in the market. It is research

because of which the customers enjoy a variety of products.

In KADVANI FORGE LTD. research is done of the basis of drawing as per

specification and they send it to the customer, if the customers give positive response then

they produce or manufacture that type of product.

The industry is in continuous efforts to launch a new beneficial product for

their customer. Their main objective is to find out recent market trend. So the target

respondence for this research is retailed.

QUALITY POLICYKADVANI FORGE LTD. is committed to “Total Quality Management”. Main

Focus of the company is to satisfy the customer by meeting their requirements on the right

time through documented procedures, which is the responsibility of every individual of this

organization.

INTRODUCTIONThe success or failure of an organization depends not on materials, machines

and equipment but no the efficiency of the personnel to put their best efforts for an efficient

performance of their job.

To achieve the basic objective of an organization, efficient and effective use of

the people at work is essential. Personnel management is the general management of

people at work. Personnel management is a function of the general management with the

objective of ensuring that every employee makes his fullest contribution to the achievement

of the objectives of business.

The objective of personnel management is to achieve maximum individual

development, desirable work atmosphere and interpersonal relations. This essence of

personnel management is the understanding of people at work and or the basic of these

knowledge formulating personnel policies of the enterprise.

The management of men is challenging task because of the dynamic nature

of the people. No two people are similar in mental abilities, traditions, sentiments and

behavior.

“Personnel management in that part of the management which is

primarily concerned with the human relationships within an organization”.

- Institute of Personnel Management London

“The Personnel Function is concerned with the procurement,

development, compensation, integration and maintenance of the personnel for the

purpose of contributing towards accomplishment of that organizations major goals

of objectives”.

- Edwin B. Flippo

The success of the business depends on the brains i.e. Personnel in the

company. The company should have efficient and sufficient manpower that have the path

towards success.

ORGANIZATION OF PERSONNEL DEPARTMENTAn organization is a group of individuals who co-ordinate into different levels

of authority and segments of specifications for the purpose of achieving the goals and

objectives of the organization.

“The organization is the process of identifying and group the work to be

performed, defining and delegating responsibility and authority and establishing

relationship for the purpose of enabling people to work most effectively together in

establishing of objectives”.

- Allen

The internal organization structure of personnel department varies widely in

different, companies depending upon their size. E.g. in small companies personnel

functions are discharged but in large company where personnel activities are generally of a

complex nature, separate department is organized for the purpose.

FUNCTIONS OF PERSONNEL MANAGEMENT

Functions of Personnel Management

Managerial Functions Operational Functions

Planning Organizing Directing Controlling

Procurement of Personnel Development of Personnel Compensation to Personnel Employees Benefit Maintains Good Industrial Relation Record Keeping Personnel Planning Evaluation

MANPOWER PLANNING OR HUMAN RESOURCES PLANNING

Manpower planning means developing and determining objectives policies

and programmes to develop and utilize the existing manpower in the de-sired direction to

achieve organizational objectives i.e. appointing right man on the right job at the right time.

“An executive manpower planning programmed can be defined as an

appraisal of an organization’s ability to perpetuate itself with respect to its

management as a determination of measures necessary to provide the essential

executive talent”

- Filppo

There are generally two types of HRP in ECHJAY

SHORT TERM HUMAN RESOURCES PLANNING.

LONG TERM HUMAN RESOURCES PLANNING.

SHORT TERM HRP: - Short term HRP is made for short period, say for one

year. Short-term plans are concerned with specific projects and programmes Existing

personnel can hardly match completely the requirement of a job. Thus in short term

manpower planning, the basic problem is to match the existing individuals and filling current

vacancies as best one can do with available manpower.

LONG TERM HRP: - Long term HRP is made for long period, say for five to

six years. An organization has flexible of matching its human resources and jobs by taking

action which have long run inspect i.e. recruiting employee

Doing this thing does In KADVANI FORGE LTD. manpower planning in a very

systematic way they utilize human resources as max possible way i.e. arranging employee

on to her work when he is free on his work and.

RECRUITMENT

Once the manpower requirement has been determined recruitment is the next

logical step in staffing process. Recruitment is the process of identifying the sources for

prospective candidates and to stimulate them to apply for the jobs.

“Recruitment is the process of searching for prospective employees and

stimulating them to apply for jobs in the organization”.

-Edwin B. Flippo.

TWO SOURCES OF RECRUITMENT

Internal source: - Internal source include personnel already on the pay-roll of

the organization. Whenever any vacancy arises, somebody from within the organization

may be looked into.

External source: - External sources of recruitment refer to prospective

candidates outside the enterprise. They usually include new entrants to the labour force the

unemployed and people in other organization seeking a change.

KADVANI FORGE LTD. fills up its vacancies through promotion of people

available in the organization and through the selection of people from outside that is

through advertisement in newspaper, through personal relations of workers and managerial

staffs.

SELECTION

Selection is the second step in the process of procurement of people. It is the

process of choosing the individuals who possesses the necessary skills, abilities and

personality to successfully fill specific jobs in the organization. It is a negative process then

recruitment because a person either gets a job or not.

“Selection is the process of choosing best alternative out of number of

alternative”.

In KADVANI FORGE LTD. selection procedure is undertaken in following

way.

1. SCREEING APPLICANTS

First of all personnel manager will check all the information contained application

from the concern in order to ensure that whether it meets the standards or not. If it

meets then the suitable candidate is called for the further selection process that is

interview.

2. INTERVIEW

Here an effort is made by the personnel manager to get overall information of thte

candidate like candidate work experience, candidates further planning etc.

3. APPROVAL

On the basis of above steps suitable candidate is selected and are asked to be

present on specified date.

Procedure for Personnel Selection

A. Scrutiny of Application form

B. Preliminary interview

C. Application Blank

D. Employment Tests

a. Trade test

b. Psychological test

i. Aptitude Test

ii. Intelligence Test

iii. Interest Test

iv. Knowledge Test

v. Projective Test

vi. Personality Test

E. Employment interview

F. Reference Check

G. Medical Examination

H. Final Selection

INDUCTION

This involves the introduction of an employee to the job and the organization.

The primary purpose is to sell the company to the new employee so that he can take pride

of his association with the company.

An employee has to operate with fellow employee and his supervisor. Hence he must

know them, their way of working and also the policies and practices of the organization.

The main objectives of the induction are that an employee become formalize

him with company and win confidence of new comers.

“Induction is a technique by which a new employee is rehabilitated into

the changes surroundings and introduced to the practices, policies and purposes of

the organization”.

-Billimorai.KADVANI FORGE LTD. also follows the induction process, which listed

below.

Firstly information given to a newly appointed person to whom he has to

report, which consists of other details

It gives overall information about the department in which he is designated

and makes the employee more familiar to the organization.

Thirdly, the respective manager of supervisor welcomes the employees.

TRAINING AND DEVELOPMENTTraining is short-term process utilizing a systematic and organized

procedure by which non-managerial personnel learn technical knowledge and skills

for definite purpose. Development is a long-term educational process utilizing a

systematic and organized procedure by which managerial personnel can learn

conceptual and theoretical knowledge for general purpose.

- STEINMETZ LAWRENCE L.

“Training is the act of increasing the knowledge and skills of an

employee for doing particular job”

- FLIPPO

By training the employees acquire new manipulating skills, technical

knowledge etc. Thus increasing the knowledge and skills of the employee for better

performance on job.

Training is short term process utilizing a systematic and organized procedure

by which non managerial personnel learn technical knowledge and skills for a definite

purpose.

In KADVANI FORGE LTD. Training is given in two ways, which are as under.

On the job training method

Off the job training method

In KADVANI FORGE LTD. training is given to every one including to

management i.e. Board of Directors because they understand that training is very

important. In the company training is must for the employees that in new or old.

For new employee on the job training is given for example engineer appointed

than director production and a immediate supervisor give training to the employee first of all

they make visits to all department than give in-depth idea of the production and it

components and process explain the whole technique of production and it process. And it

helps to make their knowledge in practice. Then they do all work which the employees have

to do and then make the employee understand the work.

To the current employee and to the top management also refreshment

training is given every year once that is by one day conference and seminars in which top

management and professionals takes a seminar and conference and give training to

employee which help full to refreshment and use as a remainder and revision.

Development is also done of the employee in the KADVANI FORGE LTD.

which a very good characteristics of the company in his objective only they says satisfied

employee. That is the based satisfied employees make an efficient organization. For the

Development they also give chance for the company who interested they can go for higher

education gives a higher education which expenses. Then for the development of the

employee they have meetings and conferences every month two times. In which new

technologies and the innovation that have taken place in the field is explained and

dissuasion about that new topic are includes in it. Training and development is done very

nicely in the KADVANI FORGE LTD.

JOB DISCRIPTIONJob Description is an important document, which provided organizational

information, and functional information like location, structure, and authority, what the work

is etc. job description is necessary of employee after the employment of one candidate.

A Job Description enables the manager to frame suitable questions to be

asked during an Interview. Job Descriptions also helps Top Executives especially when

they jointly discuss one another’s responsibilities over lapping and conclusion of the duty

and responsibility descriptions. A Job Description becomes a vehicle for organization to

change and improvement.

The information covers

a. Working conditions

b. Nature of Job

c. About superior when he get order and guidance

d. About subordinates to whom he has to control.

Job Description is present in KADVANI FORGE LTD. where by the heads of

various departments and the clerks are smart and intelligent enough to know and learn the

work and experience also.

PROMOTION

Promotion is the advancement of an employee to better job-better in terms of

responsibilities, more prestige or status, greater skill, higher grade and salary and

increased privileges also.

“Promotion involves a change from one job to another that is better in

terms of status and responsibilities”

-FLIPPO

THERE ARE TWO TYPES OF PROMOTIONTHERE ARE TWO TYPES OF PROMOTION

JOB PROMOTION: - In terms of placement at higher level.

PAY PROMOTION: - In terms of increase in salary.

THERE ARE TWO BASES ON WHICH PROMOTION IS GIVENTHERE ARE TWO BASES ON WHICH PROMOTION IS GIVEN

ON THE BASES ON SENIORITY.

ON THE BASES ON MERITS.

In KADVANI FORGE LTD. PROMOTION IS GIVEN ON THE BASIS OF THE

seniority cum merit basis. Company considers the both merit as well as seniority. The

Board of Directors takes all promotion decision. First ask for all reports of the employees

from the personnel department. After that they analyze that reports and make decision that

will be promoted and also fixation of authority and responsibilities. And than promotion letter

is send to the employee, departmental head and the personnel department.

TRANSFER POLICY

Transfer is a process placing employees in positions where they are likely to

be more effectively of where they are likely to get more job satisfaction. This transfer is a

process of employee’s adjustment with the work, time and place. In transfer there is change

in responsibility, designation and pay etc.

There are various types of transfer such as production, replacement, shift,

remented, versality transfer.

In KADVANI FORGE LTD. Transfer policy is decided by board of directors

and all decision of transfer is taken by directors the transfer is general done on the request

of the employee transfer is rare case in the company because company have selected

Right person on the Right Job.

WAGE AND SALARY ADMINISTRATION

“Wages are the payments made to the employees as compensation for

the services rendered by them to an enterprise”.

- Dale Yoder and Heinemann

Wage and Salary administration is essentially the application of a systematic

approach to the problem of ensuring those employees are paid in logical, equitable and fair

manner.

A Wage is the remuneration. It refers to the hourly paid for the service of

labour in production, periodically to an employee of workers. Salary refers top the weekly of

monthly rates paid to clerical administrative and professional employee.

Wage and Salary Administration refers to the establishment and

implementation of sound policies and practices of employees compensation. The basic

purpose of Wage and Salary administration is to establish and maintain and equitable

Wage and Salary structure.

In KADVANI FORGE LTD. organization managerial staff gets a monetary

Salary of more than Rs. 5000. Moreover the operative labourer also gets a monetary Salary

of Rs. 1850 per month. Workers do not get wages on Wednesday.

BENEFITS AND SERVICES

BENEFITS:

Generally the companies provide benefits in two terms that is monetary and

non-monetary.

“Those benefit which are supplied by an employer for the benefits of an

employee and which are not in the form of wages, salary and time rated payments”.

- Cockman

KADVANI FORGE LTD. is also providing benefit schemes to their employees,

which are listed below.

1. BONUS

According to the occasion, the company is giving bonus to their employees and generally it

is in cash form.

2. LOAN FACILITY

Loan facility is also given to the employees by this unit. Loans are given t

workers to purchase house, vehicles, telivision etc. on installment basis.

3. OVER TIME BENEFITS

If the employees do over tine that is he works for more hours then what are

his regular working hours, he is paid extra money for the work he has done.

4. PRODUCTION BENEFITS

If the employees produce more than the target production then they get extra

benefits.

5. TRAVELLING ALLOWANCE

If some of the workers do not use bus services provided by the organization

andif they come by their own vehicles, then the petrol expenses incurred are provided by

the organization. They also allow the employees to park their vehicles inside the factory

premises.

SERVICES:

KADVANI FORGE LTD. provides a wealth of services that employees find

desirable.

1. QUARTER FACILITY

There are few quarters behind the factory premises. In these quarters the employees live

with their family members at free of cost or at reasonable rates.

2. BUS SERVICES

The unit is located far behind the Rajkot city and mostly all the workers are coming from the

Rajkot city. Therefore the company is providing bus services so that employees do not face

any difficulty to reach the factory and their home.

3. UNIFORM FACILITY

The company is providing uniform facility to the employees who are at operative level that is

to the blue colored empl;oyees.

4. SAFETY MEASURES FACILITY

Company provides gloves, goggles, apron, industrial safety shoes, ear mask etc. to the

employees so that physically they are protected while working in the factory.

5. CANTEEN FACILITY

The company is providing various canteen facilities to all the employees at regular interval.

6. MEDICAL SERVICES

The company provides medical service like first aid to the employees. In serious cases they

are taken to the hospital.

PERFORMANCE APPRAISAL

Employee appraisal is an important to manpower development because it

reveals strengths and weaknesses of an employee and a development plant can be

prepared for each employee. Development of a person based on appraisal of his

performance leads to improved job performance. The appraised employee can qualify

himself for higher responsibilities, more rewarding assignment and promotion.

Performance appraisal is systematic evaluation of the individual with respect

to his performance on the job and his potential for development. The immediate superior in

charge of such performance appraisal. The managerial appraisal should measure both

performances in achieving goals and plan as well as performance as employee in all

managerial function such as planning, directing, controlling, organizing and leading.

The main purpose of performance appraisal is: -

Evaluation of performance of work assigned.

Determining suitability for promotion or transfer.

Make employee aware of their key performance area.

In KADVANI FORGE LTD. The performance appraisal is done on the base of

work and quality of the work and time taken for the work. KADVANI FORGE LTD. First

established the standards for the performance for example 10 unit produced per hours than

that is the standard and the appraisal is done how many unit is produced in how much time

and what is the quality is there. The performance appraisal method of KADVANI FORGE

LTD. is good.

CHART

Established Performance Standards

Communicate Performance Expectations to Employees

Measure Actual Performance

Compare Actual Performance with Standards

Discuss the Appraisal with Employee

If Necessary, Initiate Corrective Action.

GRIEVANCE HANDALING SYSTEM

Grievance or disputes arise in the company due to unsatisfaction between

employee and employers. There may be several reasons for arising such dispute like low

salary paid to worker, heavy involvement of the union and many more reason etc.

“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 of discontentment of dissatisfaction among workers

regarding anything concerned with the company that any party against the other party may

leave Grievance.

A well defined 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 KADVANI FORGE LTD. the relationship between employer and employees

is sound there are generally no disputes still it there are any problems, the workers are free

to talk to supervisors.

COLLECTIVE BARGAINING

Collective Bargaining is the steps taken for preventing Grievance Bargaining

is mad by the collective part of the employees.

“Collective Bargaining takes places when a number of people enter in to

a negotiation as bargaining with the object of reaching an agreement on the

condition of the employment of the people”.

In KADVANI FORGE LTD. since the company has good relations with the

workers there are rarely any problems still it there are problems they are solved it

representatives of both the parties.

TRADE UNIONSAccording to section 2B of the Trade Union act of 1926. A Trade Union is any

combination of permanent primarily for the purpose of regulating the relations between

workers and workers.

“ A Trade Union is organization at workers formed to promote protect and

improve through collective action for the social, economic and potential interests at its

members”.

KADVANI FORGE LTD. does not face problem of trade union, as there are no

conflicts between the workers and the management as all the employees are provided with

full facilities. So the management does not face any problem of Trade union.

PROVIDENT FUND SCHEMEPF scheme is a king of saving. Any company having more than 50 employees

can join this scheme. This is statutory scheme meant for welfare of the employees. In India

it was started in 1962 and applied in all the industry. It is necessary for every company to

give PF scheme to its permanent employees.

The company is providing Provident Fund Schemes to their employees. In

practice the company cuts 12% from their (employees) basic salary and they (owner) add

the same amount and the amount is credited to the respective employees account.

INTRODUCTIONFinance is lifeblood of business economy. It provides basis to all business

activities. Without finance neither any business can be started nor successfully run.

Provision of sufficient funds at the required time is the key success of a business.

“The term finance can be defined as the management of the flows of

money through an organization, whether it will be a corporation, school, bank or

government agency”.

- John J Hampton

“Finance may be defined as that administrative area or set of

administrative function in an which relate with the arrangement of cash and credit so

that the organization may have the means to carry out its objectives as satisfactory

as possible”.

- Howard and Upton

Finance department provides “Bass” for the company. No Company can run

without sufficient finance. Finance is the essence of any business, it is known as “A life

blood of a business”.

Finance is required not only at the time of establishment but also at the time

of expansion, modernization, diversification and replacement of assets. Every company

should be able to manage its finance efficiently and then only a company can prosper.

Financial Management includes the activities of raising funds proper utilization

of funds deciding up on the terms and conditions, period of borrowings.

Financial management is that managerial activity which is concerned with

planning and controlling of the firm’s financial resources. We cannot imagine a business

without finance because it is the control point of all activities.

FINANCIAL PLANNING

Finance is like lubricating oil to any firm and Planning is the key to the

success of financial manager. Financial planning is the act of deciding in advance the

quantity of capital required and its form. No business whether small or large, can be

successful until and unless it prepare sound financial plan. The planning process is an

integral part of the job of financial manager. If the planning is prepared carefully and

accurately than the company is found to get success in its field. In brief, to plan, judge and

provide for future cash inflow and cash outflow is the financial planning.

“Planning is deciding in advance what is to be done; that is, a plan is a

projected course of action”.

-W.H.Newman

“Financial planning pertains only to the function of finance and includes

the determination of the firms financial objectives financial policies and financial

procedures”.

-Walker & Baugh

Financial planning is necessary for the smooth running of the business.

KADVANI FORGE LTD. financial manages makes financial planning according to the target

of sale of requirement and divided in two ways.

Long term financial planning.

Short term financial planning.

Long term mainly concern with long term project purchase of machine,

building, land, and furniture etc. short term mainly concern to day to day functions etc i.e.

Working planning.

KADVANI FORGED LTD. has framed a very promising financial plan

prepared in light of future trends. KADVANI FORGE LTD. has considered following critical

elements.

1. Financial Pattern and Condition

2. Assets position and technological changes

3. Earning capacity and market condition

4. Policy for administration of capital

5. Advance programming for financial resources

6. Capacity to generate internal funds

7. position of financial control system

8. Capital market analysis

9. Prospects of growth and allocation for contingencies

CAPITALISATIONThe evaluation of the capital of the company is known as capitalization.

Capitalization of a co-operation comprised the ownership capital represented by long-term

undebtness. It may also mean the total accounting value of the capital stock; surplus in

whatever forms it may appear and refunded long term debt.

Ownership capital PLUS Long term loans PLUS Free reserves PLUS Debenture

THERE ARE THREE TYPES OF CAPITALIZATION ARE AS FOLLOWS

FAIR & PROPER CAPITALISATION: - If there is equal investment and equal

amount of returns is known as proper or fair capitalization.

OVER CAPITALISATION: - If there is more investment and not that much

amount of return is called over capitalization.

UNDER CAPITALISATION: - If there is less investment and return is more than

that of investment than it is known as under capitalization.

The details of KADVANI FORGE LTD. are as follows.

Authorized Capital 31-03-2003 31-03-2002

40,00,000 Equity Shares

of Rs. 10/- each

Issued Capital

30,00,000 Equity Shares

of Rs. 10/- each fully

paid up

Reserves & Surplus

Borrowed Capital

Secured Loans

Unsecured loans

4,00,00,000

3,00,00,000

1,00,000

4,62,10,864

4,58,21,939

4,00,00,000

3,00,00,000

-

4,56,29,247

4,10,04,654

CAPITAL BUDGETINGCapital budgeting decisions pertain to fixed long term assets which by

defination refer to assess which are in operation and yields a return, over a period of time

usually exceeding 1 year.

“The objective of capital budgeting is to rank various investments

opportunities according to the prospective earnings they will yields”.

- Haynes & Massie

The most important aspects of capital budgeting process are identification, evaluation,

authorization and control. The effect of investment decision extend in to the future and have

to be endured for a longer period than the consequences of the current operating

expenditure thus budgeting decisions are the most important decisions.

KADVANI FORGE LTD. would compare the expenses of the previous before

budgeting and then calculates capital budget.

MANAGEMENT OF FIXED ASSETSThe management of fixed assets retards to the purpose of managements of

fixed assets for more utilization. There are some fixed assets in the business. Fixed assets

are the permanent investment done by the company. There should be a systematic

utilization of this asset it depends up on the management how efficiently the fixed assets

are managed for the interest of a business. This assess cannot be converted in to cash

very easily.

There is a risk in value of fixed assets because of their long life.

Fixed assets can be divided into two parts that is: -

1. Tangible Assets – Buildings, Plants, Machineries etc

2. Intangible Assets – Goodwill, Patents etc.

Fixed assets ratio for the year 31-3-2003

Fixed Assets Ratio = Sales

Fixed assets

= 24,10,98,515

07,05,88,156

= 4.315 times

For The Last Year = Sales

Fixed assets

= 21,67,79,276

5,23,70,372

= 4.14 times

In the comparison of the previous years turnover ratio is increased in the

current year last year the ratio was 4.14 times, where as this year it is 4.315 times which is

good situation.

MANAGEMENT OF WORKING CAPITALWorking capital indicates circular flow of cash (cash flow cycle) i.e., a sort of

a revolving fund starting with cash used to pay for the raw materials, labour and operating

expenses and when finished products are ready for sale, the cash is recovered through

sale of these goods (on cash or on credit). Thus, we have a circular cash flow from cash to

inventories to receivables and back to cash. There are two concepts of working capital.

NET WORKING CAPITAL: - It represents the excess of total current assets

over total current liabilities. It is quantitative concept indicating the soundness of current

financial position.

GROSS WORKING CAPITAL: - It is equal to the sum of current assets only

and it may represent both owned capital as well as loan capital. The concept of gross

capital is a financial concept whereas that of net concepts is an accounting concept.

Working Capital Management is concerned with the problems the arise in

attempting to manage the current assets, the current liabilities and interrelationship that

exists between them. The goal of Working Capital Management is to manage the firms

current assets and liabilities in such a way that a satisfactory level of working capital is

maintained. The interaction between currents assets and current liabilities is the main

theme of Working Capital Management.

Net Working Capital = Current Assets – Current Liabilities

= 12,15,14,243 – 2,78,45,697

= 9,36,68,546

Working Capital Turnover Ration = Sales

Total Current Assets

= 24,10,98,515 12,15,14,243

= 1.98 times

PARTICULARS 31-3-2003 31-3-2004Inventories 4,11,05,273 4,73,98,795Sundry Debtors 3,16,24,454 6,19,09,105Cash & Bank 04,29,976 07,22,110

ACCOUNTING POLICIESThe accounts are prepared under the historical cost convention and materially comply

with mandatory accounting standards issued by the Institute of Chartered Accountant of India. The

significance accounting policies followed by the company are stated below.

1. FIXED ASSET

Capitalization at the acquisition cost including directly attribute cost of bringing the

assets to their working conditions for intended use.

2. DEPRICATION

The company has provided depreciation on the written down value basis as per the

rates provided in schedule XIV of the companies Act. 1956. Depreciation on the addition to fixed

assets is provided for as when the assets are put to use.

3. INVENTORIES

This method of valuation of various categories is as follows

Raw material and Stores are valued at cost

Finished goods are scrape are valued at cost or net realizable value whichever is lower

Year end inventory of finished goods has been valued inclusive of excise duty

amounting to the Rs. 78,36,607 in accordance with revised guidance note on

“Accounting Treatment of Excise Duty” issued by The Institute of Chartered

Accountant of India. This change is accounting policy has no impact on the profit for

the year.

4. REVENUE

Sales of alloy forgings are accounted at the point of dispatch

5. FORGINGS CURRENCY TRANSACTIONS

Any exchange difference on export sales arising from the transaction undertaken by

the company is deal with the profit and loss account.

MANAGEMENT OF RECEIVABLESThe term “Receivables” is destined as debt. Owned to the firm by customers

revising from sale of goods or services in the ordinary course of business. When firm sales

well on credit, it creates account receivables management is caused trade credit

management.

Receivables are considered as an essential marketing too, acting as a bridge

for the movement of goods through production and distribution stages to customers.

Receivables or book debt has two characteristics

It involves an element of risks

It is based on economic value i.e. goods and services passed on to buyer have

economic value and cash will be received in future by seller

The financial management, in managing the receivables is concerned with

maintaining the receivables at the optimum level and reviews the credit policy and

procedure accordingly.

Debtors Turnover Ratio = Total Sales

Debtors

= 24,10,98,515

6,19,09,105

= 3.894

RATIO ANALYSISA ratio is an arithmetical relationship between two figures Financial Ratio

analysis is a study of ratios between various items of group of items in Financial Statement.

Ratio are classified from different point of view as under

On the Basis of Financial Statement

1. P&L Account

2. Balance Sheet Ratio

3. Combine Ratio

View Point of Management

1. Profitability Ratio

2. Activity or Turnover Ratio

3. Financial Ratio

Liquidity Ratio

Position Ratio

Leverage Ratio

In KADVANI FORGE LTD. prepared ratio on basis of management view point.

GROSS PROFIT RATIO

The gross profit ratio reflects the efficiency with which management produces

both unit of product. This ratio indicates the average spread between the cost of goods sold

and revenue. It shows the percentage by which the selling price can fall and the percentage

by which costs of goods sold can increases before gross profits can be nullified. The ratio of

gross profit of KADVANI FORGE LTD. is as under.

Gross Profit Ratio = Gross Profit x 100

Sales

= 34,38,050 x 100

24,10,98,515

= 14.25

NET PROFIT RATIO

Net Profit Ratio established a relationship between Net profit and sales and it

indicates management efficiency in manufacturing administering and selling the product.

This is the over all measure of the firms ability to turn each rupee sales in to net profit. This

ratio indicates the firms capacity to which stands adverse economic conditions. The Net

Profit Ratio of KADVNI FORGE LTD. is as under.

Net Profit Ratio = Net Profit x 100

Sales

= 34,61,049 x 100

24,10,98,515

= 1.43

CURRENT RATIO

An important test by which the financial health of a company can with

reasonable reliability be judge in the concept of current ratio. The current ratio, a very

popular financial ratio, measures the ability of the firm to meet its current liabilities, current

assets get converted into cash in the operational cycles of the firm and provide the funds

needed to pay current liabilities. The ratio of the KADVANI FORGE LTD. is calculated as

under.

Current Ratio = Current Assets

Current Liabilities

= 12,15,14,243

2,78,45,697

= 4.36

LIQUID RATIO

The ratio is also known as Quick Ratio or Acid Test Ratio. This ratio

established a relationship between quick or liquid assets and current liabilities. An asset is

liquid if it can be converted in to cash immediately or reasonably soon of value. Cash is the

most liquid assets. This ratio indicates how for the company should have enough resources

to pay current obligation on demand. The KADVANI FORGE LTD. is as under.

Liquid Ratio = Liquid Assets

Liquid Liabilities

= 6,66,03,966

2,78,45,697

= 2.392

TREND IN LAST THREE YEARSPROFIT

YEAR PROFIT

2001-2002 79,286

2002-2003 3,48,758

2003-2004 4,61,049

SALES

YEAR SALES

2001-2002 13,50,43,541

2002-2003 21,67,79,276

2003-2004 24,10,98,515

CONTRIBUTION OF THE UNIT1. Employment Generation.

2. Earning foreign exchange through exports.

3. Substituting imports Original Equipments Manufacturers (OEM) through

domestic production.

ANALYSIS OF PRODUCTS FOR EXPORT

The exporter should ask himself a number of questions about the

nature of his product and determine how exportable it is.

The types of questions that should be asked are:

1. What are the features of our product that make it compare favorably with

competitive products?

In other words, why do our local customers like them?

2. How is the product used? Would it have the same use abroad?

3. What size, colors, design, etc. are preferred by the users?

Would foreign buyers have the same attitude?

4. What modifications, if any, would be necessary?.

To make the product more acceptable to foreign buyers?

5. Has the product been thoroughly tested and tried in the home market? Can

we be sure of consistence high product quality?

6. What are the branding, packaging, and labeling requirements to sell the

product abroad? How would the present branding, packaging and labeling be

changed for exporting?

7. What are the technical specifications of the product?

Would they be acceptable in the target country?

8. What after-sales service, if any, would be required?

How should it be provided?

9. Would the product meet foreign health and safety standard requirements?

How do we meets foreign required standard?

10.What if the technology is changing fast?

How can we maintain product superiority?

11.How do we keep ahead of the competition?

12.Can we produce the quantities of product that may be required?

13.Will we be able to maintain continuity of supply?

INTRODUCTIONExport comes from the Latin words ex and portare, meaning to carry out. A

country exports goods under the following conditions: if it is the world's sole supplier of a

certain product; if it produces the goods at a relatively lower cost than other countries; if its

goods are in demand because they are of outstanding quality; or if it can produce certain

goods at a season of the year when other countries need to import them.

Export management is that branch of management, which is related to the

Export function. For understanding meaning of export management let‘s explain two terms

i.e. Export and Management.

EXPORT

Export means outward movements of goods or services from one country to

another with the inward flow of valid international currency.

MANAGEMENT

Management deals with effective utilization of different resources like men,

machine, material information and money in order to achieve desired objectives with the

help of planning, organizing, directing, controlling.

THOUGHT OF EXPORT

The company can export a product if it has certain objectives in mind some of

the objectives are as under.

1. Increase sales and profits through new contacts (export sales may even exceed local

sales).

2. Create market diversification and help to offset sales fluctuations in the local market.

3. Contribute to increase production at optimum level and allow continue growth.

4. Provide new opportunities and challenges to management.

KADVANI FORGE LTD. had started exporting in 1998 with the objectives of

earning profit, increase in sales and ultimately to help the government to increase FOREX

of India. It forecasted the potentials of the forging articles and auto parts market beyond the

territory so it jumped in this industry and have achieved great success in this field and

became a role model for their quality for new industry.

EXPORT PRODUCTS

Products which are to be Exported is Export product. An Export product must

be delivered in specific time , in specific quantity, in specific Packing etc.

KADVANI FORGE LTD. had started exprting from 1998 and started to export

the following products.

Cover (auto parts)

Flanges

Crank Shafts

Asentrik Shafts

Drop arm

Fork

Nuts etc.

EXPORT IN COUNTRIES AND COMPANIES

As there is rapind development in auto industries in world there is also increse

in the demand of the auto parts from the world market. As we know that kadvani forge is

very much famous for its quality of a product soothe demand of its product is from every

corner of the world. So the company is exporting the product in many countries of the world

but more orders are getting from the countries like.

Germany

U.S.A.

African countries.

The leading importers of the product of KADVANI FORGE LTD. are

Unique Industrial Product (U.S.A)

Tourus India Limited

BASE OF EXPORT PRICING

Cost Plus Method of Calculation

A costing sheet enables the manufacturer to:

1. Check that every expense has been covered in arriving at the selling price.

2. Provide a detailed record of the terms that have been quoted to the foreign buyer.

The items covered by the export-costing sheet are:

1. Unit cost of Product

The starting point in export pricing is the production cost per unit of the product. This would

be the variable cost plus fixed cost or overhead.

2. Profit

Normally, profit will have already been included in the domestic price. However, if it is

insufficient for the risk involved in selling abroad, an extra allowance for profit can now be

added.

3. Agent's commission abroad

This is usually calculated on a percentage basis.

4. Packing

The cost of packing for overseas shipment will vary according to the product, destination,

and means of transportation. The manufacturer must include reasonable provision for it.

5. Labels

These may have to be printed in a foreign language, perhaps containing information not

included in the labels used within the exporter's country. Also, from the sales point of view,

they must be suitable to the foreign consumer. The selling price of the product must include

sufficient allowance for these extra labeling costs.

6.Marking

A small cost is involved in stenciling an identification mark on each package for export.

7.Strapping

Each carton may have to be wire-strapped to help prevent it from being accidentally opened

en route to its destination. Small packages must be wire-strapped together to discourage

pilferage and other loss.

8.Cartage

Allowance must be made for transporting the goods to be transported to the local railway

station or container depot.

9.Freight to seaboard

The cost of transporting the goods from the inland town or city to the seaport for shipment

abroad e.g. K.L. to Port Klang.

10.Unloading charge

There is a charge for unloading goods from railway cars or trucks. This cost will be incurred

when the goods arrive at the seaport.

11.Terminals

These are handling, wharfage and harbor dues that must be paid by the exporter to the

wharfage Company.

12.Long or heavy load charge

If the shipment is exceptionally long or heavy, an extra charge may be incurred.

13.Consular Documents

These documents can be quite expensive, particularly in the case of export to the Latin

American countries. Initially, the exporter may wish to quote to the foreign customer a price

of so many dollars plus the cost of consular documents. If not, it must make adequate

provision in the price to cover their cost.

14.Other charges

Here, space is left for the inclusion of unexpected additional expenses such as the cost of

overseas telegrams or telephone calls, extra storage charges etc.

15. Ocean freight

The cost of shipping the goods by sea to the foreign port. The cost may be quoted by the

ocean carrier in local currency or U.S. dollars.

16.Freight forwarder's fee

If the exporter uses the services of "Freight Forwarder" for documentation and book the

shipping space required, allowance must be made for the fee involved. The amount of

these fees can be obtained in advance from the forwarder or shipping agent.

17.Financing charges

Until payment is received, the export firm will have part of its working capital tied up in

export merchandise. Even if no credit is given, it will have to wait until the goods are

shipped or delivered before payment is made.

If credit are given to the foreign customer, it may have to wait an additional 60, 90, or 180

days for payment. The selling price should include an amount to cover the cost of this

working capital.

If the exporter intends to discount at its bank a time draft that has been accepted by the

foreign importer, so that the exporter can obtain its money sooner. Then allowance must be

made in the export price for bank discount charges.

18.Marine insurance

The exporter will want to insure itself against financial loss from all possible risks, including

damage to the goods or theft, while they are being shipped abroad. Usually, ocean ships

are insured for 110 percent of their total cost to cover anticipated profit and the interest cost

of working capital tied up in the shipment.

19. Conversion into Foreign Exchange

The foreign buyer will usually ask for a price quotation in U.S. dollars or perhaps in German

marks, Japanese yen, or some other currency. Therefore, the price in the exporter's local

currency must be converted to a price into the foreign currency.

Care must be taken to use the correct exchange rate. The exporter may wish to eliminate

the risk of an exchange loss by selling the foreign currency to a bank on a forward basis, in

exchange for local currency.

The cost of this bank service, which provides the exporter with a predetermined, fixed rate

of exchange for its foreign currency, should be included in the export price quoted to the

foreign importer.

KADVANI FORGED LTD. includes most of the above mentioned costs

incurred for exporting such as cost of Raw material, profit, credit period allowed to the

importers, agents or advertisement expense incurred, packing costs, forwarding costs,

insurance, Freights + INCOTERMS etc.

Table 4

Sample Cost-Plus Calculation of Product Cost

  Domestic Sale Export Sale

Factory price $7.50 $7.50

Domestic freight .70 .70

subtotal 8.20 8.20

Export documentation   .50

subtotal   8.70

Ocean freight and insurance   1.20

subtotal   9.90

Import duty (12 percent of landed cost)   1.19

subtotal   11.09

Wholesaler markup (15 percent) 1.23  

subtotal 9.43  

Importer/distributor markup   2.44

subtotal   13.53

Retail markup (50 percent) 4.72 6.77

Final consumer price $14.15 $20.30

EXPORT PRICING TERMS (INCOTERMS 2000)Special International Trade Terms

"...a situation in which everything is the responsibility of the seller and the extreme where

everything is the responsibility of the buyer..."

The first INCOTERMS - uniform rules for the interpretation of international

trade terms were published in 1936, by the International Chamber of Commerce (ICC) used in

buying and selling on a world wide scale. Since then, ICC has amended and modernized these

rules in 1953, 1967, 1980, 1990 and Incoterms 2000

Incoterms 2000 describe the responsibilities of seller and buyer in international

trade. The full and authoritative definition of each trade term is published in Incoterms 2000.

Publication 560

INCOTERMS 2000 (International Commercial Terms)

are to provide a set of rules to interpret the most commonly used trade terms in

international trade. This set of rules defines the precise obligations of buyer and seller to

reduce the possibility of misunderstanding between the exporter and importer.

The purpose of these terms is to clarify who are responsible (seller or buyer) for:

1. The cost of transporting the goods from one point to the other.

2. The risk of loss if the transportation cannot take place.

3. The risk of loss or damage to goods in transit.

Incoterms 2000 aims are to set out the rights and obligations of the seller and

the buyer when it comes to transporting the goods. Each term means a different division of

costs, risks, and responsibilities between the seller and the buyer.

INCOTERMS 2000

INCOTERMS 2000 provide a set of rules to interpret the most commonly used

trade terms in international trade. This set of rules defines the precise obligations of buyer

and seller to reduce the possibility of misunderstanding between the exporter and importer.

Each term means a different division of costs, risks, and responsibilities between the seller

and the buyer.

EXW EX WORKS

FCA FREE CARRIER

FAS FREE ALONGSIDE SHIP

FOB FREE ON BOARD

CFR COST AND FREIGHT

CIF COST, INSURANCE AND FREIGHT

CPT CARRIAGE PAID TO

DDP DELIVERED DUTY PAID

DAF DELIVERED AT FRONTIER

DES DELIVERED EX SHIP

DEQ DELIVERED EX QUAY

DDU DELIVERED DUTY UNPAID

CIP CARRIAGE AND INSURANCE PAID TO

KADVANI FORGE LTD. does international business by using only three

terms, which are as under.

FOB FREE ON BOARD (... named port of shipment) Under "F.O.B." the

goods are placed on board the ship by the seller at a port of shipment named in the sales

agreement. The risk of loss of or damage to the goods is transferred to the buyer when the

goods pass the ship's rail (i.e., off the dock and placed on the ship). The seller pays the

cost of loading the goods.

CFR COST AND FREIGHT (... named port of destination) CFR requires the

seller to pay the costs and freight necessary to bring the goods to the named destination,

but the risk of loss or damage to the goods, as well as any cost increases, are transferred

from the seller to the buyer when the goods pass the ship's rail at the port of shipment (i.e.

off the dock and placed on the ship). Insurance is the buyer's responsibility as well as

stevedore charges at the named port of destination.

CIF COST, INSURANCE AND FREIGHT (... named port of destination) CIF is

CFR with the additional requirement that the seller procure transport insurance against the

risk of loss or damage to goods. The seller must contract with the insurer and pay the

insurance premium. Insurance is generally more important in international shipping than

domestic shipping, because U.S. laws generally hold a common carrier to be liable for lost

or damaged goods.

MARKET RESEARCH STRATEGIES FOR EXPORT

The manufacturer should determine which foreign market to target first.

Malaysian firm, for example, automatically looks North of the border such as Thailand.

Therefore, exporters should always consider exporting Next Door.

In targeting likely foreign market, the exporter should use a "Checklist" of

factors. In practice, market research through the participation in a trade fair, government

sponsored export mission or personal visit to foreign countries.

Once a preliminary survey has suggested one or a few countries for closer

investigation, the exporter should find out:

1. The potential size of the market for its product

2. The types of customers, competitor's products and their prices

3. The most suitable channels of distribution

4. The best way of entering the market (agent, joint venture, etc)

5. The existence of any market opportunities that would provide a market "niche" and

"competitive edge"

Smaller exporter may wish to reduce the costs of any market survey by using

government services available.

"Trade Commissioners stationed at embassies abroad are only too willing to help the

exporter assess the foreign market and suggest likely distributors. So long as the export

firm provides adequate product literature, samples and other necessary information."

If the market research required, is beyond the scope of the Trade

Commissioner, he will suggest the names of some suitable local market research firms.

Some manufacturer may decide not to export them, but employ a trading

house or export agent to act on its behalf in seeking market opportunities, promoting and

securing orders.

In KADVANI FORGE LTD. no market research is done at higher level only market

research is done primary level because the buyers are coming at the premises of

KADAVANI FORGE LTD. influenced by the quality of the product and services which is the

very big plus point of KADVANI FORGE LTD. which is very good potentials for the

company.

CHANNELS OF DISTRIBUTION IN THE FOREIGN COUNTRY

“ Channel of distribution for a product is the route take the title of the

goods as they move from producer to the ultimate customer or industrial user”

Channel of Distribution is the movement of goods and services from producer

to consumer. A manufacturer must establish a system that keeps products moving steadily

from the factory to the customer. Such a system is called a marketing channel or a channel

of distribution.

Before choosing a foreign agent or distributor, the exporter should check,

whether the foreign country imposes any legal requirements e.g. the agent must be a

national of that foreign country. The exporter should discuss with the agent or distributor the

channels of distribution that would be used to market the products.

The choice of such channels should take into account the buying habits of the

final customers, the types of channels available, their relative cost and efficiency, the nature

of the product itself (e.g. fragility, perishability)

The channel of distribution of KADVANI FORGE LTD. is not so complex

because they generally supply goods directly to consumers or through agent.

KADVANI FORGE LTD.

CONSUMERS

OR

KADVANI FORGE LTD.

AGENT

CONSUMERS

PROMOTIONAL STRATEGY

How to do Export Promotion?

What are the various ways to promote his products abroad? The exporter

must consider, if he plans to use agents or distributors to handle his product, his first task

will then be to promote the product and his company to them.

The next task is to consider, whether current brochures would be suitable for

use with foreign agents, distributors or buyers. Does the promotional material needs to be

translated into the local foreign language to make it acceptable.

Promotion blend, in promoting the export of its product or products, the

exporter will have to decide on an appropriate blend of advertising, selling and other sales

activities.

Promotion budget, in practice the amount of money available to be spent is

often an arbitrary figure set by top management, varying according to its keenness to get

into the export market. As a rule, the planned expenditure should be at a percentage of

expected sales.

As a guideline, the exporter could establish an initial export promotion budget

between 10% to 20% of expected sales. This budget could be divided in one of the

following suggested ways:

1. For consumer goods

         45% advertising

         35% selling

         10% other promotion

2. For industrial goods

         55% selling

         25% advertising

         10% other promotion (including trade fairs)

In the introduction stage of the exporter's product, emphasis must be on

informing consumers, making the product easily available, and encouraging the foreign

consumer to try it.

In the market growth stage, the firm should concentrate on promoting brand

loyalty.

Later, in the market maturity stage, promotion can be placed on product

differentiation - trying to make the product as unique and differential as possible from

competitive ones.

Sales decline stage, if and when sales begin to slip, special promotion efforts

will be required.

The type of customer’s -is the promotion aims at Industrial user or middlemen.

Advertising and samples are often the most efficient way of persuading middlemen to try a

new food product. Whereas, personal selling is essential in reaching wholesalers. Trade

fairs and trade journals is an excellent way of reaching industrial users.

Looking for sales leads, there should be some systematic way e.g. advertising

in trade journals, direct mail to prospective buyers, participation in trade shows, etc. or

aware of buyer's guides and trade directories for source of prospective agents, buyers, etc.

Finally, in this area of export promotion, you should consider a systematic way

to keep track of the company's promotional activities in that foreign market,

customers, other contacts made and decide how often to follow-up and visit to the foreign

market, to develop personal contacts.

KADVANI FORGE LTD. is doing promotional activities through attaining

international trade fairs, through websites and all other promotional activities at industrial

level.

COMPETITION

Competition among business firms affects the price and quality of

their goods and services. Firms must maintain reasonable prices and standards

to attract and keep customers. People are not likely to buy from a company if

they are dissatisfied with its product, or if they can purchase the product for less

money elsewhere. Business firms compete for sales by using such techniques

as advertising and by offering special discounts or bonuses.

As the market is open no customer will not be a regular customer

for one company because if he founds the other company provide goods at

cheaper rate and as per their needs specification than they will run on there

premises so in forging industries all the units are unique in itself so there is

every body in the forging are competitors and isolate in itself.

ADVERTISEMENT IN DOMESTIC AND IN INTERNATIONAL MARKET

“Advertisement is a paid form of non personal presentation of goods

services an idea by an identified sponsor.”

Advertising is a message designed to promote a product, a service, or an

idea. In many countries, people come into daily contact with many kinds of advertising.

Printed advertisements make up a large part of newspapers and magazines. Poster

advertisements appear in many buses, and in shops and other public buildings.

Commercials are advertisements, which interrupt TV and radio programmed. Other types

of advertisements are called adverts or ads.

The purpose of most advertising is to sell products or services.

Manufacturers advertise to try to persuade people to buy their products. Large business

firms also use advertising to create a favorable "image" of their company. They want the

company name to be known and respected for the products the firm makes or the services

it provides. Local businesses use advertising to gain new customers and increase sales.

Advertising thus plays a part in the competition among businesses for the consumer's

money. It is the cheapest and fastest way to inform large numbers of people about

products or services for sale and to persuade them to buy. In many businesses, the

volume of sales depends largely on the amount of advertising done.

KADVANI FORGE LTD. is doing any type of advertisement at domestic or

India level but if any trade fair is organized at international level then it can participate in it.

The company holds no other extra advertisement.

PRODUCT PACKAGE AND LABELING

The package used to enclose the product for local market may not be suitable

for export. Questions to be answered should include:

(a) Does the product need extra protection from rough handling, or climatic extremes?

(b) Is the product easily recognizable and appealing to the foreign customer?

(c) Does the label conform to local regulations?

(d) Does the label clearly indicate the contents, even to persons who may be illiterate?

(e) Does the label need to be in a foreign language?

(f) Does the logo or brand name have another, perhaps undesirable meaning in the local

language?

(g) Does the package need to be larger or smaller than the one sold locally? Perhaps local

consumers can only afford to buy smaller quantities of it.

(h) Have the brand name and trademark been registered in the foreign country?

As the packing of the product is depend on the type of transportation and

some times on the requirements of the buyers. The product of KADVANI FORGE LTD. is

having loose packing in domestic market but there is more protection needed in the product

which is to be exported, the product of KADVANI FORGE LTD. is very much heavy so it is

transported in ship so there is sea worthy packing is made of wooden cases which will

prevent the product from the damages.

DURATION OF CONTRACT

Duration of contract means the period upto, which the suppliers have to

supply the product to buyers. There are generally two types of contracts, which are as

under.

LONG TERM CONTRACT

SHORT TERM CONTRACT

From the above two, KADVANI FORGE LTD. is adopting the short term

contract all new contracts are made at every new order.

POLITICAL INTERFEARANCE

In the country like India there is more interference of the political in each and

every field. Sometimes political interference is proper due to the monopoly practices is done

by many industries so political interference of the government is proper and some times it

interrupt the working of the organization unnecessary.

There is no political interference is seen in KADVANI FORGE LTD. but the

government have reduced many benefits for export oriented units.

EFFECTS OF EXPORT ON FIRM

The modifications in the product is may be due to legal requirements, say:

product labeling regulations, weight and measures, language or may be dictated by the

local culture or climate.

The unit is exporting a product have to take many things into consideration

which he never taken in mind while selling in domestic market because it can create the

image and value of a product with countries image too at international level.

KADVANI FORGE LTD. got the requirement of foreign buyers so it had

changed the quality as per international standards, certification, lab equipment,

machineries, labor training, office infrastructure, vertical machine center, spectrometer,

microscope etc.

EXPORT FACILITY

Export facility means the facilities provided by the government for the firms

who are engaged in the exporting activities. Generally government is encouraging the

Indian export because it generates income for the country and also creates the vital position

of the country at international level. Export and Import is the only source by which we can

earn FOREX. Government is also providing benefits in tax to the export oriented units are

as under.

Duty Draw back

DEPB (Duty Entitlement Pass Back)

EPCG (Export Promotion Capital Goods)

KADVANI FORGE LTD. is not using duty draw Back. They are using DEPB in

this government will give the book and whatever the duty is paid it should be deducted from

tax. The KADVANI FORGE LTD. is also using EPCG it means government will allow to do

the import upto the amount of export done by the company and government will charge

very low duty for import.

INSURANCE

“Insurance is a means of providing protection against financial loss in a

great variety of situations”.

Insurance for Exporters

When goods have to be shipped to a foreign country, there is always the risk

that they may be damaged, destroyed, or stolen and may vary, according to the country of

destination, the route and method of shipment.

To be protected from financial loss as a result of this risk, either the firm that

sells the goods or the firm that buys them, arrange for insurance. It is to the exporter's

advantage to be responsible for placing the insurance on the shipment. Such insurance

cannot prevent accidental losses but can provide reimbursement for financial loss should

the exporter's shipment somehow fail to arrive or arrive intact.

Marine Insurance Defined

For shipments to countries overseas, the type of insurance that is arranged is

known variously as "marine insurance". It is also sometimes called "ocean marine

insurance" to distinguish it from "inland marine insurance".

Basically, "marine insurance" is a contract between one party (usually the

exporter) and another party (an insurance company). In return for the payment of a fee (the

insurance premium) by the insured (exporter), the insurance company agrees to reimburse

the insured in full or in part for any financial loss suffered from various specified risks.

The Need for Marine Insurance

The cost of marine insurance is quite small compared with the cost of the

goods shipped and the freight charges involved. Therefore, the benefit of the marine

insurance, in terms of financial reimbursement if disaster strikes, is usually well worth the

cost.

Not much help can be expected from the shipping company for the exporter, if

the goods are damaged or lost, even while in its care. Various statutes, plus the printed

clauses in ocean bills of lading -the contract between the shipper and the carrier, limit the

liability of the shipping company for such losses. In order to recover losses from the carrier,

the exporter must be able to prove "want of due diligence", in other words, the shipping

company was negligent.

It is difficult for an exporter to prove at what point damage or loss occurred.

However, a marine insurance policy is often arranged on a "warehouse-to-warehouse"

basis. In other words, the risk of financial loss from damage or loss occurring during inland

transit in the exporting country and abroad as well as during ocean shipment. Such a policy

relieves the exporter of the burden of proving when or where any loss actually occurred.

If, someone else's goods are damaged or destroyed during the voyage and in

order to save the ship, then the exporter may be called upon to pay part of the cost. This is

known as "general average". Here, the point that is being made is that the exporter's goods

may be held in the foreign port until such a claim is settled. By having marine insurance,

including general average coverage, the exporter avoids the risk of such a delay.

As we know that KADVANI FORGE LTD. is only do the transportation through

sea ways so the is the need for marine insurance only. The KADVANI FORGE LTD. is

taking Insurance from the two well-known insurance companies that are from Insurance of

India and Royal Sundaram.

TRANSPORTAION

Transportation is the act of moving people or goods from one place to

another. Transportation takes people where they need or want to go, and it brings them the

goods they need or want. Without transportation, there could be no trade. Without trade,

there could be no towns and cities. Towns and cities are traditionally the centers of

civilization. Therefore, transportation helps make civilization possible.

There are generally three types of transportation they are as under.

Land Transportation

Water Transportation

Air Transportation In shipping goods abroad, the exporter has various

alternative methods. These include ship, truck, rail, air and parcel post.

The choice will depend on the nature of the product (light or heavy, fragile or

sturdy, perishable or durable, high or low in value per cubic meter, etc); the distance to be

shipped; available means of transportation; and relative freight costs.

Goods having high weight or cubic capacity or value ratio, the usual method

of shipping overseas is by ocean cargo vessel. However, when speed is essential, air cargo

may be preferred, although more expensive.

The land Transportation is further divided in two categories that is as under

Rail Transportation

Truck Transportation

The product of KADVANI FORGE LTD. is very heavy so there is no chance of

Air transportation only Sea transportation is convenient for moving the goods for the

company and at domestic level the company uses the Truck transportation.

PARTY CONTACT AT INTERNATIONAL LEVEL

It is the most essential and pre determined part for the exporting companies.

To export a product is not an easy task. First of all it is essential to decide that whether to

export direct or indirect. It is advisable for a company to export the product indirect way for

new company jumped in exporting.

It is no good developing an export market if your production capacity cannot

meet the demands of the new foreign market.

Export information system should involve:

1. Seeking and analyzing information about the foreign market

2. Possible new contacts, trade fairs and competitive products

3. Trade barriers, statistical information and market surveys

4. Changes in import laws, trade agreements and trade statistics

KADVANI FORGE LTD. do not require to do party contacts because the

buyers come from different countries for purchasing the product of KADVANI FORGE LTD.,

but than also for expansion of the business the company is attaining fairs, advertisement,

Direct contact with the parties or on Internet etc. likewise the company do contacts with the

parties.

PRICING POLICY

There are generally two types of pricing policy i.e. Skimming Pricing and

Penetration Pricing which are followed by the company according to the suitability of

companies product.

SKIMMING PRICING

Under this policy, an export firm for its products at the very outset fixes a very

high price. This policy is adopted in case of specialty goods only, that too only when a new

product will not face any competition at this stage and the manufacturer wants to recover

the amount of capital invested by him quickly. This policy is also adopted in order to earn

maximum profits at the earliest because of the possibilities of competition at a latter stage.

This policy can be continued only till the competitors enter into the market. This policy is

particularly desirable in the following circumstances.

1. When it is felt that there will be very tough competition in the future and when the

exporter wants to skim the cream before competitors enter the market

2. In the very beginning of the product introduction when there is a complete lack of

competition

3. When entail cost of production is very high which has to be recovered as easily as

possible.

4. In case of the products, which are meant for the consumers who can pay high price,

such as fashion oriented specialty goods.

PENETRATION PRICING

This price policy is just opposite of skimming the cream pricing policy. Under

this policy, price of a product is kept low so that a new product may create demand in the

export market and the existing product may maintain its demand. This policy is based upon

the object of maximizing profits through making maximum sales with low margin of profit.

This policy also aims at discouraging competitors from entering into the market.

KADVANI FORGE LTD. is not at all influenced by both of the above pricing

policy and it has its own price structure it cannot charge so high prices because it is an

open market so the customer have many alternatives and choices. Some times it happens

that if the prices should be low that it signs for the poor quality product so pricing is the

essential factor and it should be determined very carefully. Price should be medium not so

high and also not so low. KADVANI FORGE LTD. also has very balanced price policy,

which can attract the customer.

DE FACTO

I case of exporters it is important to calculate the import related cost from the

view point of importers. In some countries such costs are generally high in some cases they

are so high that a simple calculation may indicate that there is de facto no were the product

can effectively compete with a locally made similar product.

For this problem KADVANI FORGE LTD. tries to minimize the cost. They tries

to reduce the cost by reducing wastages, unnessarary labour movements and as much as

possible by the.

CONTAINER LOADING

There are generally three types of container loading system. They are as

under.

LCL ~ Loose container Loading

It is the type of container loading there is no full container is made of goods it

is half container also.

FCL ~ Full Container Loading

In full container loading the loading is done fully there is no vacancy remains

without stuffing the goods in it is known as full container loading.

OL ~ Open Loading

In this type of loading system no container stuffing is done all the goods is

directly kept on the board of the ship.

KADVANI FORGE LTD. is using LCL & FCL. In FCL the stuffing of the goods

is done in factory then for the inspection of goods the local regional EXISE authority will

come and check the goods while stuffing.

FORCE MAJURE CLAUSE

We know that in each an every export there is fixation of prices is done

before. So no body knows that what happen tomorrow so to secure the seller any price rise

in raw material or any other event, which is not in the control of the exporter this Force

Majure Clause, is included. It is one type of section made by the exporter to importer

generally in all the type of export contract. The main reason behind this is that if any rapid

increase in the price of the raw material than there will be an increase in the price of the

final product for that increase importer has to pay.

In KADVANI FORGE LTD. no Force Majure Clause is included in any

contract.

THE

GENERAL INFORMATION

THE

PRODUCTION DEPARTMENT

THE

PERSONNEL DEPARTMENT

THE

FINANCE DEPARTMENT

THE

EXPORT DEPARTMENT

SUGGESIONS

FUTURE

PLANS

CONCLUSION

BIBLIOGRAPHY

PROFORMA

INVOICE

PACKING

LIST

FUTURE PLANS

Since the company has started its journey 20 years ago but still business

through modification, diversification and development.

Future plan is very much essentials for the success of business unit course of

action to achieve the specific goal.

The future plan of the company is to make expansion in machinery and to go

for the diversification in press forging which in turn reduces per production rate.

The company is trying to make continues expansion in international market

and to serve new innovative product to the world.

CONCLUSION

India is a developing country and it has adopting free economy. So, it is an

opportunity for every domestic company to upgrade its technology and other process in

order to stand in modern market, which has cut throat competition.

KADVANI FORGE LTD. has also taken the opportunities of free economy and

it has imported the hammer machine from Russia.

KADVANI FORGE LTD. was not started on very high basis but due to the

efforts of the executives and directors it has earned a good reputation in the industrial level.

It earns valuable foreign exchange for India through its exports and has

maintained food relation with outsiders and employees. Here the best and efficient

employees are appointed so that effective results can be achieved. I wish the company very

good luck for its future.

SUGGESTIONS

The production capacity should be utilized 100%

They should try to reduce their interest paid amount

They should try to get more export orders so that their profits increases and it is

good at national level

The company should increase its channel of distribution

They should advertise more, so that sales of the company can increases than

present

The production capacity should be absolutely exploited without unnecessary

wastage of time intervals. Local market coverage should also be given the priority

along with international market.

BIBLIOGRAPHY

Website of KADVANI FORGE LIMITED

Information of Export is taken from different web sites and from company

Personnel Department: - Dr. M.M. Verma & R.K. Agrawals

Production Department: - Dr. M.M. Verma & R.K. Agrawals

Finance Department: - Sherlekar & Sherlekar

INDEXNO. PARTICULARS

1. GENERAL INFORMATION

2. PRODUCTION DEPARTMENT

3. PERSONNEL DEPARTMENT

4. FINANCE DEPARTMENT

5. EXPORT DEPARTMENT

6. PROFORMA INVOICE

7. PACKING LIST

8. FUTURE PLANS

9. SUGGESTIONS

10. CONCLUSION

11. BIBLIOGRAPHY

GENERAL INFORMATION

NO. PARTICULARS

1. INTRODUCTION

2. PORTFOLIO

3. SIZE OF UNIT

4. FORMS OF ORGANISATION

5. TIME KEEPING SYSTEM

6. ORGANISATIONAL STRUCTURE

7. ORGANISATIONAL CHART

8. PLANT LOCATION

9. SISTER CONCERNS

PRODUCTION DEPARTMENT

NO. PARTICULARS

1. INTRODUCTION

2. PRODUCTS

3. PRODUCTION PROCESS

4. STAGES OF PRODUCTION

5. PRODUCTION CAPACITY

6. PRODUCTION PLANNING

7. RAW MATERIALS & ITS SOURCES

8. STORAGE FACILITY

9. QUALITY CONTROL

10. PRODUCTS MADE

11. RESERCH AND DEVELOPMENT

12. QUALITY POLICY

PERSONNEL DEPARTMENT

NO. PARTICULARS

1. INTRODUCTION

2. ORGANISATION OF PERSONNEL DEPT.

3. FUNCTIONS OF PERSONNEL MANG.

4. MANPOWER PLANNING

5. RECRUITMENT

6. SELECTION

7. INDUCTION

8. TRAINNING & DEVELOPMENT

9. JOB DISCRIPTION

10. PROMOTION

11. TRANSFFER POLICY

12. WAGE & SALARY ADMINISTRATION

13. BENEFITS & SERVICES

14. PERFORMANCE APPRAISAL

15. GRIVIANCE HANDALING SYSTEM

16. COLLECTIVE BARGAINING

17. TRADE UNIONS

18. PROVODENT FUND SCHEME

FINANCE DEPARTMENT

NO. PARTICULARS

1. INTRODUCTION

2. FINANCIAL PLANNING

3. CAPITALISATION

4. CAPITAL BUDGETING

5. MANAGEMENT OF FIXED ASSETS

6. MANAGEMENT OF WORKING CAPITAL

7. ACCOUNTING POLICIES

8. MANAGEMENT OF RECIVABLES

9. RATIO ANALYSIS

10. TREND IN LAST THREE YEARS

11. CONTRIBUTION OF UNIT

EXPORT DEPARTMENT

NO. PARTICULARS

1. ANALYSIS OF PRODUCT FOR EXPORT

2. INTRODUCTION

3. THOUGHT OF EXPORT

4. EXPORT PRODUCTS

5. EXPORT IN COUNTRIES & COMPANIES

6. BASE OF EXPORT PRICING

7. EXPORT PRICING TERMS

8. MARKET RESERCH STRATEGIES

9. CHANNEL OF DISTRIBUTION

10. PROMOTIONAL STRATEGIES

11. COMPETITION

12. ADVERTISEMENT

13. PRODUCT PACKAGE & LABELLING

14. DURATION OF CONTRACT

15. POLITICAL INTERFEARANCE

16. EFFECTS OF EXPORT ON FIRM

17. EXPORT FACILITY

18. INSURANCE

19. TRANSPORTATION

20. PARTY CONTACTS

21. PRICING POLICY

22. DE-FACTO

23. CONTAINER LOADING

24. FORCE MAJURE CLAUSE

25. PROFORMA OF EXPORT QUOTATION

EXPORT PROCEDURE

1. INITIAL STAGE

I. Receipt of export order

II. Processing of Export order

III. Issue of order acceptance

IV. Receipt of letter of credit

V. Purchase / manufacturer of Export goods

VI. Paking, stuffing into container

VII. Completion of export relates EXCISE formalities

VIII. Movement of goods for shipment purpose

2. INTERMIDIATE STAGE

I. Receipt of material from exporter

II. Warehousing of material

III. Booking of space with shipping company / Airlines

IV. Preparation of shipping documents

V. Await carting date

VI. Movement of cargo to port / Airport premises

3. EXPORT PRODUCT PROCESSING

I. Receipt of export consignment in the premises

II. Passing off shipping bill

i. Entry in general manifest

ii. Examination of consignment / EXCISE seal

iii. Obtaining of forwarding order

III. Placement of cargo under cooling period

IV. Loading of consignment

V. Receipt of Mate’s receipt / Air bill

4. FINAL STAGE

I. Exchange of Mate’s Receipt with bill of lading

II. Preparation of commercial invoice and completion of documents for

negotiation purpose.

III. Negotiation of documents through Bank for Realization of export proceeds

IV. Claiming of export incentives

NESSASITIES FOR EXPORTBank Account

IEC code is necessary

EXISE Registration

Customs application for container stuffing

Invoice, Packing list, ARE 1 form are sent to custom

Shipping bills are made and verified by customs

Goods are handover to the ship

Mate receipt will get from captain of ship

Shipping company will give bill of lading

Commercial bill, commercial invoice, pacing list, certificate of origin is issued to chamber of

commerce

Bill of lading sent to importer

If insurance than copy of insurance bill paid

For payment company fills form of APPENDIX 22a

ON

KADVANI FORGE LIMITEDRAJKOT

REPARED BY

LAKADAWALA ARIF A

College ~ SHRI H.N. SHUKLA

Academic Year ~ 2005 – 2006

Semester ~ T.Y.B.B.A

Roll No. ~

Seat No. ~

Submitted To ~ Saurashtra

University, Rajkot

Guided By ~ Mr. Hitesh Bhatt