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A
SUMMER TRAINING REPORT
ON
FINANCIAL ANALYSIS AND RATIO ANALYSIS
FOR
ELECON ENGINEERING COMPANY LIMITED
SUBMITTED TO:
ANAND INSTITUTE OF MANAGEMENT
IN PARTIAL FULFILLMENT OF THE
REQUIREMENT OF THE AWARD FOR THE DEGREE OF
MASTER OF BUSINESS ADMINISTRATION
UNDER THE GUIDANCE OF
MS. KRISHNA GOR, MR. ROMESH PRAJAPATI
FACULTY, A.I.M. DY.C.C.E., ELECON.
SUBMITTED BY:
AARTI B. DALWADI
EXAM SEAT NO.: 107020592038
M.B.A. - SEMESTER II
ANAND INSTITUTE OF MANAGEMENTM.B.A PROGRAMME
OPP. TOWN HALL, NEAR GRID, ANANDJULY 2011
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PREFACE
The prime objective of doing this industrial training project work was to understandorganization as to how various departments within an organization works and to apply
the theoretical concepts to real life professional experience.
As the part of our academic curriculum we are supposed to undergo this assignment to
bridge the gap between theoretical knowledge and practical aspects.
After the semester 2, University Exams, We are supposed to undergo Summer Training
in the Company for 6 weeks. I have taken my Summer Training at ELECON
ENGINEERING COMPANY LIMITED. I have to select the specialization, under which
particular topic is selected and on which data is gathered and analyzed. And so I have
taken Finance specialization, and done FINANCIAL ANALYSIS AND RATIO
ANALYSIS as my Primary study for the ELECON. I also collected General Information,
of ELECON, i.e. related to Industry, Functional Departments etc.
This report includes study of various departmental role and functions within the
organizations. Further, study of this report will help readers to understand working of
various department of Elecon Company. Elecon is mainly dealing with the Material
Handling Equipments & Gears.
I am thankful to all those who have helped in one way or other in the preparation of the
manuscript. Valuable suggestions of readers for further improvement of the report shall
be highly appreciated.
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ACKNOWLEDGEMENT
At this gratifying moment of completion of my project, I feel obliged to record mygratitude to those who have helped me.
I begin by extending my thanks to Mr. Tusharbhai Vyas for his reference, which helped
me in getting the permission for this Summer Training at ELECON. My special thanks to
Elecon Engineering Company Limited, where I did the project. Than after my sincere
thanks goes to Mr. V.P. Gaekwad (H.R. Manager), who granted my permission to
undergo my Summer Training in ELECON. I am also thankful to Mr. H.C.Shah (CFO &
V.P [Commercial]) who was very co-operative and offered his help whenever required,
instead of his busy schedules. I had completed the project under the very special
guidance of Mr. Romesh Prajapati (DY.C.C.E., ELECON), I acknowledged his efforts
put in the project.
I feel immense pleasure in expressing my deep sense of respect and indebtedness to
my guide MS. KRISHNA GOR (Faculty), Anand institute of management for his
invaluable, talented and inspiring guidance, planning, constructive criticism and
constant encouragement throughout the course of investigation and preparation of this
dissertation.
I would also like to thank each and everyone working there, those who have contributed
directly or indirectly for my worthwhile experience I had while doing the project.
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DECLARATION
I, Aarti B. Dalwadi, hereby declare that the report on Summer Training entitled
FINANCIAL ANALYSIS AND RATIO ANALYSIS is a result of our own work and our
indebtedness to other work publications. Correction if any will be duly acknowledged.
Place: Anand [signature]
Date: (Aarti B. Dalwadi)
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EXECUTIVE SUMMARY
The project report based on summer internship training is as per the syllabus prescribedby the university and institute for student. Overall, the report deals with the functioning
of the company, its day to day way of administration & the financial management of the
company as a whole.
I have prepared my Summer Training Report on Elecon Eng. Co. Ltd., where the Report
contains 2 Parts, Part 1 being the General Information and Part 2 being the Primary
Study. The data of the company for the period from 2005 to 2010 used in this study
have been taken from the annual reports provided by the company
Under PART I GENERAL INFORMATION, Firstly I have given the Overview of Material
Handling Industry as; Elecon is engaged in Manufacturing Material Handling
Equipments, Gears, and Wind Turbine Generators. The World Market of M.H.E. is
projected to increase more than 5% per year through to the year 2012. The Demand for
Material Handling Equipments is also rising in India. It is the big Market in the 21st
Century. ELECONS heavy sale is generated from M.H.E. Division against Gear &
Alternate Energy Division (Wind Turbine Generators Division).
After that I have given Overview of the company, it is divided into five sections namely
about the company, general profile, mission & vision, history & development,
organizational structure & divisions. ELECONS foundation was laid back in the year
1960. Earlier Shri Ishwarbhai Patel had established Milling Trading Company at
Bombay. And Later the Elecon pioneered the manufacture of M.H.E. and shifted in V.V.
Nagar, Anand, (Gujarat). It has separate Divisions for Gear and WTG at V.V. Nagar
only. ELECON always remains conscious of Social obligations.
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Thereafter, I have given Overview of Functional Departments of ELECON, namely
Production, H.R., Marketing and Finance. Production Department will clarify, Company
has the main raw material Iron & Steel, and it has different products manufactured as
per divisions. Company also takes various Quality assurance Measures, It has its own
quality policy of being committed to the goal of High quality. MHE and Gear Divisions
are also ISO 9001 Certified, which is a big assurance of quality.
H.R. Department of ELECON is very nicely managed by D.G.M (HR), Shri V.P.
Gaekwad. Workers come in 3 shifts, & there is one general shift for Administrative staff.
Company has its own Recruitment sources namely Adverting, Campus Interview etc. It
has In House and External Training & Development Programmes conducted for
enhancing the employees knowledge and skill.
Gear department is considered as Marketing Department of ELECON. The company
has segmented market on the basis of Geographical location; it undertakes its sales
promotion measures by the way of providing discounts, gift articles etc, company gives
advertisements in News Papers, Magazines etc. and also does Marketing Research for
getting customers opinion about its products.
Finance Department is managed by CFO, Shri H.C. Shah. I have discussed some
General share holder information and Dividend History of the company. And I found
Company has provided constant 75 % dividend from last 3 yearsUnder
PART II PRIMARY STUDY, I have discussed my topic FINANCIAL ANALYSIS. I have
included Analysis of financial statements by the way of Preparation of Multi Step Income
statement, Horizontal Analysis, & Common Sized Analysis, than I have done DuPont
Analysis and Ratio analysis for Last 5 Years.
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With the help of preparation of Multi Step Income statement, I found PBDIT and PBIT,
which is not directly given in Profit & Loss account. Overall from the Horizontal Analysis,
of Profit and Loss a/c, I found that, that Net sales of ELECON is increasing 9% over
2009, and PAT is increasing by 15%, and it is due to decrease in Expenditure, Tax and
increase in non operating income. For Balance Sheet, I found that Loans are
decreasing by 12% and Net deferred tax of company is increasing over 2009 and fixed
assets are increased but investment are sold out for obtaining higher profit in 2010.
Overall from the Common sized Analysis of Profit & loss a/c, I found that companys
expenditure. is decreased in 2010 against Net sales. Ultimately this decreases PBDIT in
2010 against 2009.Later PAT remains only 6.32% against net sales. For the Balance
sheet, I found that Company acquires 58% from the loans out of 100% sources and
applies 58.27% in Net current assets. And it also depicts that company has invested
only 0.6% in long term investment.
DuPont Analysis reveals ROE is decreasing in 2010, due to the increase in Net Worth.
Company also does not take the advantage of financial efficiency. Although the debt
capacity is more than 2 in 2010, but the operating efficiency (RONA) has fallen down in
2010.
Ratio Analysis reveals that ELECON has enough money invested in current assets
against current liabilities; Debt taken by company is more against equity. Company has
more money blocked in the Inventory, and has the strict collection policy in comparison
in 2009 against 20006 and 2007. Companys Margin is decreased in 2010 due to
decrease in stock.Net margin has also decreased due to more tax. Company provides
constant 75% dividend on face value of the share from the last three years (08, 09, and
10). And Company had also decreased Payout in 2010, although the PAT was
increased, but company made this effort to give the same amt. of dividend in 2010 as
2009 and the main reason behind it to compensate the loss of paying higher EPS in last
year though PAT was decreased in last
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TABLE OF CONTENTS
PrefaceAcknowledgement
DeclarationExecutive Summary
SR.NO. PARTICULARS PAGE NOS.
PART I GENERAL INFORMATION
1. About the Company 1
2.
Overview of the Functional Departments
Production Department Human Resource Department Marketing Department Finance Department
10
11152228
PART II PRIMARY STUDY [FINANCIAL ANALYSIS]
3. Introduction to Financial Analysis 30
4. Importance of Financial Analysis to ELECON 31
5. Methods of Financial Analysis
A. MultiStep Income StatementB. Horizontal AnalysisC. Common sized AnalysisD. DuPont AnalysisE. Ratio Analysis
Classification of Financial Ratios
A. Liquidity RatiosB. Turnover RatioC. Solvency RatioD. Equity related RatiosE. Profitability Ratios
32
3335424955
56
5763727883
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6. Results and Findings
7. Conclusion
LIST OF TABLES
SR.NO. TITLE TABLE NOS. PAGE NOS.
1. Dividend History 3.01 29
2. Multi Step Income Statement 6.01 34
3. Horizontal P & L 6.02 36
4. Horizontal B.L. Sheet 6.03 39
5. Common Sized P & L 6.04 43
6. Common Sized B.L. Sheet 6.05 46
7. DuPont Chart Data 6.06 50
8. Current Ratio 6.01 58
9. Quick Ratio 6.02 59
10 Net Working Capital Ratio 6.03 60
11. Inventory Turnover Ratio 6.04 62
12. Days of Holding Ratio 6.05 63
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13. Debtor Turnover Ratio 6.06 64
14. Average Collection Period 6.07 65
15. Net assets Turnover 6.08 66
16. Fixed Assets Turnover 6.09 67
17. Net Current Assets Turnover 6.10 68
18. Current Assets turnover 6.11 69
19. Debt Equity Raio 6.12 71
20. Debt Ratio 6.13 72
21. Interest Coverage Ratio 6.14 73
22. EPS 6.15 75
23. DPS 6.16 76
24. Payout Ratio 6.17 77
25. Gross Profit Margin 6.18 79
26. Net Profit Margin 6.19 80
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LIST OF GRAPHS
SR.NO. TITLE GRAPH NO. PAGE NO.
1.Current Ratio 6.01 58
2. Quick Ratio 6.02 59
3. Net Working Capital Ratio 6.03 60
4. Inventory Turnover Ratio 6.04 62
5. Days of Holding Ratio 6.05 63
6. Debtor Turnover Ratio 6.06 64
7. Average Collection Period 6.07 65
8. Net assets Turnover 6.08 66
9. Fixed Assets Turnover 6.09 67
10 Net Current Assets Turnover 6.10 68
11. Current Assets turnover 6.11 69
12. Debt Equity Raio 6.12 71
13. Debt Ratio 6.13 72
14. Interest Coverage Ratio 6.14 73
15. EPS 6.15 75
16. DPS 6.16 76
17. Payout Ratio 6.17 77
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18. Gross Profit Margin 6.18 79
19. Net Profit Margin 6.19 80
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LIST OF DIAGRAMS
SR.NO. TITLE DIAGRAMS NO. PAGE NO.
1. Organization Chart[Overall]
2.01 7
2.Organization Chart[Human Resource Dep.]
3.01 16
3. DuPont Chart 6.01 51
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INTRODUCTION.
In order to convert the raw materials into finished products, it is essential that one of the
three basis elements of production i.e. Materials, Men or Machines should move. In
majority of industrial processes it is the material that moves from Raw material stage to
finished goods stage. Because Material is more widely moved rather than Men or
Machines, it is known as Material Handling. Materials handling in detail refer to the total
management of all materials and processes involved in the entire manufacturing
procedure. This includes sourcing, delivery, movement, protection and storage of
product.
It must be noted out of the total time spent for manufacturing a product, 20% of time is
utilized for actual processing on them and 80% is spent in moving from one place to
another. Therefore the material handling is considered as one of the most important
activities of the production function and it enjoys pivotal role in Production Engineering.
The overall management system in Material Handling is achieved through plant-wide
integration encompassing every step in the manufacturing process, where the flow of
information is essential for monitoring, coordinating and tracking each process - fromthe arrival of raw materials onto the plant floor through to dispatch of final product
awaiting shipment.
The world market for material handling equipment and systems is projected to increase
more than five per cent per year through to the year 2012. Generally, healthy economic
conditions will support gains in global material handling demand, especially in rapidly
developing areas such as China and India, where rising manufacturing output and fixed
investment will fuel growth. The advanced nations of North America, Western Europe
and the Asia/Pacific region (i.e., Australia and Japan) comprise relatively mature
markets for material handling.
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Material handling equipment manufacturing is a big market on the 21st century. It is a
big market with lots of collateral problems, which all have their own importance.
Managers of handling equipment are asked to improve automate processes, inventory
control efficiencies optimize storage and upgrade systems while concurrently being
obligated to manage environmentally responsible warehouse...
Most of the largest and most advanced materials handling industries are located in
advanced nations, particularly those that have large, well-developed home markets.
Technical expertise in manufacturing higher-value products and access to factors of
production such as capital and labor supplies.
India today has the capacity to manufacture most of the products that are classified
under the material handling equipment segment, the difference is one in the level of
sophistication. India tends to be lacking in infrastructure, a fact that makes its logistics
costs very high by international standards. Indian companies are outsourcing their
logistics functions to external providers who provide transport plus a range of services,
such as packaging, labeling, billing and tracking.
The consumption of material handling and logistics equipment and systems in the USA
exceeds US$ 156 billion per year, and the manufacturers of equipment alone employ in
excess of 700,000 workers. But things are now changing in India. Demand for industrial
trucks, forklifts, hoisting gear, cranes, software and materials handling and warehousing
systems is especially strong on the Indian logistics market. The market is enjoying
annual growth rates of 20 to 30 per cent.
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HISTORY
Shri Ishwarbhai Patel has established a Milling trading company pvt. ltd at Mumbai
which is said to be root cause for stemming a big and world famous Elecon engd. Co.
ltd. It must be noted, in the year 1951, Milling Trading Co. was incorporated on idea of
establishing an indigenous organization to manufacture Material Handling Equipments
in country and thus Elecon came into existence.
It pioneered the manufacture of material handling equipment. In more than 5 decades,
Elecon has designed and implemented several landmark projects in India as well as
abroad. On 11th January 1960, Elecon eng. Co .ltd. was incorporated as a Pvt. Ltd
company under the act to take over the business carried on by Sole Proprietor concern.
And after the formation of Gujarat State in May 1960, Elecon shifted its base to Vallabh
Vidhyanagar, Gujarat, in order to contribute towards the development of home-land.
And then later it was converted into Public ltd. Company.
Elecon set out its journey to sale new light of Technical excellence creating landmarks
from Elevators & Conveyors to high quality Material Handling Equipments and Gears.
Elecon started manufacture of Gear units in 1962 and started separate Gear division in
the year 1976. Gear division manufactures different types of Gears viz. Spiral gears,
Reduction gears etc. Elecon has expertise in providing the customized Gear boxes for
Steel mills, Sugar mills, High speed turbines, and also for the satellite in the Indian
Space Programm.
It is very interesting to note that the name of the company is derived from its two main
products named Elevator &Conveyor, and the company derives its corporate identity
viz, ELECON. It has been symbolizing the concept of Bulk Material Handling
Technology. Elecon has made its presence felt through consistent and satisfactory
performance of its equipment in such core sectors as
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fertilizer, Cement, Coal /Power generation, Chemical, Steel Plant etc. across the
country.
Elecon has played a pioneering role by way being first in design, Manufacturing and
supplying the above products in India, and thereby adhering the motto of ALWAYS A
STEP AHEAD IN TECHNOLOGY
Elecon set up its Alternate Energy Division in the year 1995 for manufacturing and
supply of Wind Turbine Generators- a non conventional source of producing ener
PROFILE
1. Divisions:
Material Handling Equipment Division
Gear Division
Alternate energy Division
2. Group Companies:
Eimco Elecon
Power Build Ltd.
EMTICI Eng. Ltd.
Ringspann Elecon (India) Ltd.
Prayas Eng. Ltd.
Elecon Information Technology Ltd.
3. Board of Directors:
Shri Prayasvin B. Patel
Shri Hasmukhlal S. Parikh
Dr. Amritlal C. Shah
Shri Pradip M. Patel
Shri Chirayu R. Amin
Shri Prashant Amin
Shri Upendra M. Patel
Shri Ashok J. Patel
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4. Chief Executive Officer:
U.V Phnikumar (MHE Division)
Vikas Kalyankar (Gear Division)
5. Chairman & M.D.:
Shri Prayasvin B. Patel
6. Chief Financial Officer:
Shri Hemendra C. Shah
7. Company Secretary:
Shri Paresh M. Shukla
8. Auditors:
Thacker Butala Desai
Chartered Accountants
Navsari
9. Bankers:
State Bank of India
Bank of Baroda
EXIM Bank
Axis Bank limited
Standard Chartered Bank
HDFC Bank Limited
IDBI
10. Registered Office:
Anand Sojitra Road
Vallabh Vidhyanagar 388120
Gujarat, India
11. Branch Offices:
Mumbai, Delhi, Kolkata, Chennai
Bangalore, Ahmedabad, Pune,
Nagpur, Jamshedpur, Bilaspur, Dhanbad.
12. International Branch Offices:
Dubai, South Africa, China,
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Singapore, Australia.
13. Website:
www.elecon.com
GROUP COMPANIES
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GROUP COMPANIES
Eimco Elecon (I) Ltd.
It was incorporated in the year 1974 and was promoted by Environtech Corporation, USA,
Elecon Engineering Co. Ltd. Vallabh Vidyanagar and its Chairman& Managing Director Shri B.I.
Patel
Eimco Group of Companies Subsidiaries of Environtech USA are the world leader in production
of underground mining machinery having plants in U.K., USA, Canada, France and Australia.
EEIL and Eimco Group of Companies entered into collaboration under which EEIL received
necessary technical know-how from Eimco Group of Companies for production of underground
mining machineries.
CHART 1
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In 1989, Eimco Group of companies were acquired by Tamrock OY., a world leader in
technology and manufacturing of rock excavation and breaking equipments for surface and
underground mines and civil engineering construction with production and assembly facilities in
various parts of the world backed by worldwide sales and distribution net work.
Internationally, Tamrock holds close to 40% market share in the mining machinery business. It
Is a leading supplier of drilling and loading equipments for hard rock applications.
The products:
Air Powered Rocker Shovels,
Electro hydraulic Side Dump
Underground Coal mines and Metalliferous mines.
Hydraulic Drilling and Roof bolting Hoists. Side Dump Loaders,
Mechanization system of underground coal mines.
The customers:
Eimco Elecon's major clients are,
Bharat Cooking Coal Limited. Eastern Coalfield Limited
Singanery Collieries Co. Ltd.,
Uranium Corporation of India.
Bharat Gold Mines
Hindustan Copper Limited
Hindustan Zinc Limited
Larsen & Toubro Ltd.Ferro Alloys Corporation Limited etc
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Power build ltd.Photo With a humble beginning in 1972 as one of the group Companies of Elecon group, Power
Build Limited, ventured into production of Geared Motors and gear boxes in technical
collaboration with M/s. Roudolf Muchna KG of West Germany. Since then the company never
looked back and forged ahead by addition of sophisticated and state of the art products as
enumerated here under:
Automatic weighing and Bag Filling Machines.
Electronic Belt weathers and weigh feeders
Metal Detectors
Inline Magnetic separators and suspension magnets with latest technology.
Electric Hoist using the latest techniques of conical rotor design motors
Automatic Wagon & Truck loaders
Beltway switches and pulls cord switches used for conveyors.
Unsurpassed quality of the product is the company's prime motto and the factory is equipped
with the latest and the most modern machineries including (CNC) machines ensuring highest
quality of product and interchangeability. PBL has executed a large number of orders in the core
sector industries like Fertilizers, Cement, Coal, Power Generation, Chemicals, Steel Plants, etc.
Equipments supplied by PBL are rendering trouble free service for years at length.
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EMTICI engineering ltd.EMTIC Engineering Limited is a Sole Selling Agent of Elecon Engineering Co. Ltd., Eimco
Elecon (India) Ltd., Power Build Ltd., Vallabh Vidyanagar., and Gujarat.
Also carrying out fabrication & erection activity for Coal Handling Plants & other Material
Handling Equipment and providing post sale as well as during warranty services and post
warranty services for supplies of principals.
Company is having branch offices at Mumbai, Delhi, Chennai, Kolkata, Ahmadabad, Dhanbad,Asansol, Jamshedpur, Secundarabad, Nagpur, Pune, Bilaspur, Indore, Bangalore, Baroda and
overseas in Singapore, China, Dubai, Australia and South
Madhubhan Resort & Spa
A magnificent resort and spa covering 6,50.000 sq.ft. has been built in the picturesque green
belt of Charotar in Gujarat and promises its guests gifts of relaxation, family bonding and
rejuvenation. Located just 45 minutes from Vadodara which is a short flight from Mumbai or
New Delhi, the resort is amidst natural settings accented by meticulously landscaped open
spaces.
ELECON information technology ltd.
Elecon Information Technology Ltd (EITL) draws on the companys vast and varied
experience of more than 13 years in the field of hardware, software and networking solutions.
The companys mission is to provide comprehensive software and hardware solutions and
satisfy customers business and management needs.
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RADICON benzlers swift center
VISION
For close to half century, Elecon has contributed to nation building activities through
infrastructure development and Bulk Material Handling Solutions, thereby positively impacting
the livelihood of millions. Elecon promises to do so in future while keeping the interest of our
customer foremost in our minds.
Courageously they shall continue to improve and adapt to changes and be a market
leader by always remaining a step ahead in technology and quality while striving to widen their
horizons through globalization.
They shall meet the aspirations of our stakeholders and enhance their wealth & shall
continue to be a joyful and happy Elecon family of smiling faces through love, honesty and
respect for each other.
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ORGANIZATION STRUCTURE
The Organizational structure is there for every unit. This structure is one kind of Road
map, Pathway, for knowing easily the different designations and positions. It can be
easily known who is accountable to whom, whose has more authority.
Following is the Organization Chart forELECON:
(Diagram No. 2.01)
The above shown is the organization chart, but only the main designations of Elecon
are shown here because full chart is not possible to show. Above designations are of
those people who has the Management in hand.
On the Top is C.M &M.D, Shri Prayasvin Patel who has the prime authority. Shri
Prashant Amin is the Group Director who is accountable to him. Below Group Director
there are three people namely Shri G.S. Kalra, Shri Hemendra Shah, & Shri Vilas
Kalyankar, with the post of CEO (MHE), V.P. (commercial) &CFO, CEO (Gear)
respectively. These three are also accountable to Group Director and also inter-related
to each other.
Chairman &ManagingDirector
CEO(M.H.E. Division)
Vice- President(Commercial) &
CFO
CEO(Gear Division)
GroupDirector
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DIVISIONS
M.H.E. DIVISION
Elecon has modern, well equipped Material Handling Equipment manufacturing plant at
Vallabh Vidhyanagar. Material handling equipment is manufactured with sophisticated
NC and CNC machines tools, modern quality control and testing equipments.
Elecon has grown to become the single largest company having a composite range of
almost all types of Bulk Material Handling Equipment. It has supplied Hi-Tech Material
handling equipment to various Industrial Sectors such as Steel, Fertilizer, and Cement
etc.
Year Net sale of MHE % increase in sale
2005-06 2,106 -----
2006-07 4,096 94.49 %
2007-08 4,373 6.67 %
2008-09 5,607 28.22 %
2009-10 6,205 10.67 %
TABLE 1
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CHART 2
GEAR DIVISION
Elecon also has its own separate Gear division which stated manufacturing High quality
Gears. It must be noted that, Elecons Gear division is acknowledged in the industry as
the most modern in the country. More than 85% of machinery and testing equipment is
computer controlled, ensuring a high degree of precision in the manufacture and testing
of Gear components.
Apart from a large concentration of Computerized Numerically Controlled (CNC)
Machines, Elecon also has sophisticated gear profile testing machines.
(Rs in Mn)
Year Net sale of
division
% increase in sale
2005-06 2,318 -----
2006-07 3,110 37.17 %
2007-08 3,891 25.11 %
2008-09 3,944 1.36 %
2009-10 4,259 7.00 %
TABLE 2
2106
40964373
5607
6205
0
1000
2000
3000
4000
5000
6000
7000
2005-06 2006-07 2007-08 2008-09 2009-10
Sale of MHE
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CHART 3
ALTERNATE ENERGY DIVISION
Elecon take the opportunity to help the world in reducing the Global Warming by
providing the solution to generate the GREEN POWER by harnessing energy through
renewable source, mainly Wind.
Elecon has prior experience in the field of Wind Power, installed around 50 Nos., Wind
Turbines of 300 KW rating 1995 to 1998.After 2001, Elecon is planning to expand its
Wind Turbine business all over the world with its expertise in the field of manufacturing
and strong infrastructure available at their plants at Vallabh Vidhyanagar, in Anand,
Gujarat.
2318
3110
3891 3944
4259
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2005-06 2006-07 2007-08 2008-09 2009-10
Sale of Gear division
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CORPORATE SOCIAL RENSPONSIBILITY
ELECON believe that its one of them core responsibility as a Corporate to give back to the
society in which we operate. Year on year we have been actively involved in upliftment
activities focusing majorly in the areas nearby apart from employees development activities.
ELECONs yearly commitments include developmental activities in Indiranagar (the village
that we have adopted) near Napad, maintenance of the Bhanubhai and Madhuben Patel
cardiac centre that was built by us at Shri Krishna Hospital along with other medical facilities,
we contribute in a positive way to 3 schools and 3 parks that we have built in and around
Vallabh Vidyanagar, Gujarat.
Through our social service wing ELCARE and ELF we try to reach out and offer help
wherever possible. Some of our community involvements this year were:
Mega Blood Donation camp:
India needs around 400 million units of blood each year out of which it is only able to collect
around 5 million units. This leads to a severe shortage of blood and in many cases deprives
people in acute need of it, causing fatalities. Elecon has organize blood donation camps with
the IRS (Indian Red Cross Society) on a regular basis for our employees and organized a
Super Mega Blood Donation Camp for everyone to come and donate for this cause. Elecon is
able to successfully collect 1067 Units of blood in a single day which is a record number for
collection in Anand and Kheda District.
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Scholarship to Students:
Elecon believe that right education is the foundation that the India of tomorrow will be built
upon. So, not letting money be a constraint for the deserving students to pursue higher
education, Elecon give scholarships to meritious students that cover their food, hostel and
tuition fees. The selection is made by considering the financial situation of the applicant
amongst other things. Last year we offered 45 scholarships with the number set to increase
to 60 students this year.
Apart from these, Elecon have also actively participated in various other small activities like
donation of computers to a school in a nearby village, organizing various sports events,
organizing various cultural events and creative activities, helping a school for the differently
able (visually impaired) children, providing training to students to help them develop a good
and thorough understanding of their fields of education and reaching out to other societal
causes through our social service wings EL CARE and ELF.
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3. Overview of the Functional Departments
[ELECON ENGINEERING COMPANY LIMITED]
There are mainly four department of the company.
1) Production Department2) Human Resource Department3) Marketing Department4) Finance Department
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PRODUCTION DEPARTMENT
As we know the Industry embraces all types of Human efforts leading to the generation
of human wants. Product gets generated through process of production. So first of all
Raw materials is achieved and their conversion process takes place. So clear meaning
which we get is, Production is concerned with the conversion of raw material and other
inputs into certain output required by consumers. This certain output is finished
products.
Production Department handles the function of conversion of Raw material in to finished
products. It consists of application of planning, organizing, staffing, directing and
controlling functions in the process of converting the inputs to the desired outputs,
efficiently and effectively.
In ELECON, the MHE division manufacture the Material Handling Equipments, Gear
Division manufactures high quality Gears, and Alternate Energy Division manufactures
Wind Turbine Generators, used to produce electricity.
TYPES OF PRODUCTS
MHE Division has the wide product range. There are about 30 products being
produced like Idler, Pulley, Side Arm Changer, Mobile Wagon etc.
Gear Division also has the wide product range. Products include N.V. warn Gears,
Helical Gears, Fluid Coupling, General Coupling, Flexible Coupling, Planetary Gearboxes, Bucket Gear boxes, Wheel Gear boxes etc.
MAIN RAW MATERIALS USED
Steel Plates, Round Bars, Iron & Steel, Seamless Pipes & Tubes etc
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MANUFACUTURING PROCESS
Elecon Eng. Co. Ltd. is engaged in manufacturing of more than 31 products, so it is very
difficult to mention the Manufacturing Process.
Following is General Manufacturing Process:
1. Raw Material:
Basic Raw Material is Iron & Steel. Therefore first of all purchase of Iron & steel is done
from TISCO and from Open market like Gujarat Steel Tubes Ltd., Ahmedabad Steel.
2. Steel Cutting:
In this Workshop the Raw materials is brought and are cut accordingly as per
requirement. This Department is provided with Machines like Band, Saw bending
Machines. In which different types of Material is cut.
3. Machine Shop:
In this workshop the drawing is necessary because all mechanical components are
manufactured here. All machines are CNC controlled. Such as Vertical and Horizontal
Gear tool cutting machine.
4. Fabrication:
Components manufactured in Steel cutting and Machine shop are fabricated and
assembled by welding, drilling and Grinding Machine.
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QUALITY ASSURANCE MEASURES
Quality PolicyIt is the policy of ELECON to attain standard of quality and Reliability in system
performance, which are the benchmarks in equipments and turnkey Bulk Material
Handling Systems which includes price, delivery & all interfaces between their
customers and Elecon.
All Employees are committed to the Goals of this quality policy under the overall
leadership of Managing Director [M.D.].
Quality Certifications
The International organization for Standard was founded in 1949 Geneva, Switzerland
where it is still headquarters. Recognizing the importance of Quality Standards the ISO
has developed the series of standards in Quality Management System, which is
adopted by all types of Organization belong to Government, Public, Private & Joint
Sectors. These standards are generic and not specify to any particular product. The
implementation of ISO 9000 is done in building quality into products or services, by
preventing deficiencies during the design, production, installation and in service, instead
of making expensive Cost of production, Inspection, Warranty Claims and Reworking.
In November 1994, Elecons Gear Quality Management System achieved
international recognition when it was conferred the ISO 9001. It was certified that
Elecons Gear Division Quality Management System confirms to the internationally
accepted ISO- 9001 standards.
In November 1999, Elecons MHE Division achieved International recognition by
receiving ISO 9001 Certificate for design, Manufacturing, Supply, Erection,
Commissioning, & servicing of Turnkey Material Handling system.
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As per Elecon, the ISO-9001 Certification gives six distinct advantages:
1. It increases access to the international market.
2. Enhances competitive edge.
3. It sharpens the clarity of role and responsibility.
4. Brings to them more customers confidence.
5. The documentation guarantees output is right first time and every time.
6. The fire fighting is not required.
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HUMAN RESOURCE DEPARTMENT
Human resource is of paramount importance in the success of any organization because
most of the problems in the organization setting are human, & social rather than Physical or
Economical. Men are the most crucial out of the other Ms viz Material, Machine, Money, and
Method.
Human resource Department has the task of handling the human problems of an organization
and it is devoted to acquiring, developing, utilizing and maintaining efficient workforce. The
Department undertakes the functions of Recruitment, Selection etc. H.R. manager discuss
the problems of employees, he is the advisor to the Top management and a counselor of
employees. He undertakes the functions which are related to Human Relations.
Following is the list of some activities of H.R. Department in ELECON:
1. To formulate the Human Resource Policy.2. To Recruit and Select Healthy and Wide spectrum of people.
3. To give the transfer to the employee if required.
4. Provide Welfare facilities to enhance occupational skills of employee.
5. To give training and Promotion opportunities to employee.
6. To maintain good relationship with the personnel for the smooth running of functions in
organization.
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ORAGNIZATION CHART
Following is the Organization Chart of H.R. Department in ELECON:
The above Chart reveals that the General Manager (H. R) is accountable to Chairman &
Managing Director, Shri Prayasvin Patel. And under the G.M. (H.R.) there are five people
having the designation of Manager (salary & wages), Manager (H.R.), Dy. Manager (payroll),
Ass. Manager (safety & training) and Ass. Medical Officer. And these five reports to G.M.
(H.R.).
Chairman
&
ManagingDirector
Manager(Salary &Wages)
Manager
(H.R.)
Dy. Manger
(Pay Roll)
Ass.Manager
(Safety &Training)
Ass.MedicalOfficer
GeneralManager
(H.R.)
CHART 4
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TIME KEEPING SYSTEM
ELECON has separate time office helped by Time Keeping Officer, who is responsible for the
function of Time keeping. In Elecon attendance is recorded with the help of punch cards. The
working Hours for workers and Staff is different. Workers work in 3 shifts and Administrative
Staff work in General shift.
Following is the timings for 3 shifts:
First Shift 7:45 am to 4:30 pm
Second Shift 4:30 pm to 1:00 am
Third Shift 1:00 am to 7:45 am
General Shift 8:30 am to 5:15 pm
The lunch break for general shift starts from 12:30 pm to 1:15 pm.
All the details of Employees for month are fulfilled in Master Roll. It contains all the
information like Name, Designation, Attendance, Leave balance, Type of leave.
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RECRUITMENT
Recruitment is understood as the process of searching for and obtaining applications for jobs,
from among who right people can be selected.
Following are the sources of recruitment for ELECON:
1. Advertisement
2. Employment exchange
3. Campus Interview.
4. Notice on the board
5. Internal promotion.
6. Relatives of employees
Following is the recruitment policy for ELECON:
There is no discrimination of cast, sex and creed.
Recruitment is carried for at least two bases (Preliminary and final)
All the interview dates are sent by H.R.D at least 10 days prior.
SELECTION
Selection is the process of picking individuals (out of the job applicants) with the requisite
qualifications and competence to fill job in the organization. We can say that Selection is the
problem of matching the men to the job.
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Following are the Steps of Selection Procedure for ELECON:
1. Scrutinizing of Application
2. Preliminary Interview
3. Physical Test
4. Physical check up
5. Reference Check
6. Preparation of final selection sheet
7. Issue of letter
8. Joining of Job by candidate
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TRAINING & DEVELOPMENT
Training is the systematic procedure to add and to improve skills, knowledge, and technical
know-how of personnel in the organization. It is given to the Non- Managerial Personnel and
its time period is also short. Development is not only an activity that is desirable but also an
activity that an organization must commit resources to, if it is to maintain the viable and
knowledgeable work force. To improve the quality of managers, company has to spend
money and introduce systematic development schemes for them.
Following are the details of Training & Development in ELECON:
In ELECON, the needs of Training are identified and Plans is made and Training dates are
fixed. Film shows, Demonstration, Ship Flooring training (technical side) etc are the methods
of training for Workers. G.D., Case Study, Role playing etc. are the methods of development
for the managerial staff.
ELECONalso has
In-House Programs, it includes the following:
1. Seminars on E-Procurement
2. Programmes on few branches like Business ethics, Customer focus, Negotiation
Skills etc.
3. Guests Talk.
4. Seminars to enhance communication & Presentations Skills, Behavior with the Guest
External Programs of ELECON include the following:
1. Programmes on performance related matters.
2. Programmes on creating financial management.
3. A Programme on how to manage the Contract labor, Minimum Wages, Bonus etc
A Programme on how to Negotiate
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PROMOTION & TRANSFER POLICY
Promotion means an improvement in pay, prestige, position, and responsibility of an
employee within his organization. Transfers involve the change in job (accepted by the
change in place of the job) of an employee without the change in responsibility or
remuneration. A Transfer differs from the Promotion, latter involve the change in which the
significant increase in responsibility, status, and income occurs.
In ELECON, Promotion is given toemployee on the basis of following factors:
1. Qualification.
2. Efficiency
3. Experience
4. Performance
5. Merit Based
InELECON
,Transfer
is given due to following reasons:
1. Vacancy in other plant.
2. Capabilities of Individuals.
3. Interest
4. Productivity has declined due to the same work.
Unsuitable Climate
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MARKETING DEPARTMENT
Marketing is a comprehensive term and it includes all the resources and set of activities
necessary in facilitating the flow of goods and services from producers to consumers in the
process distribution. It is an ongoing and continuous process. Marketing has often been
described as art of selling products. The most important part of marketing is not selling.
Selling is the only tip of Marketing Iceberg.
Marketing Department is concerned with the performance of Marketing Functions. It has the
task of influencing level, timing, and composition of Demand in a way. Marketing manager is
the one who forms the marketing plans, Controls Marketing cost, Supervises sales,
Advertisement etc. He is the one searching the environment for the Marketing opportunities.
In ELECON ENG. CO. LTD, Gear Department is considered Marketing Department. This
Department Carries out all the functions of Marketing. Gears Sales Department has fourteen
different sections like Order Collecting, Dispatching, Billing, Accounts Section etc. The
EMTICI Eng. Ltd. is the sole selling Agent for Material Handling Equipment (M.H.E.) Division.
MAIN CUSTOMERS
M.H.E. DIVISION GEAR DIVISION
1. Mazgaon Dock Ltd. 1. West Bengal Power.
2. NEPC India Ltd. 2. Channel Port Trust
3. Jindal Steel & Power Ltd. 3. Birla Corp. Ltd.
4. National Heavy Engineering
Company.
4. Bharat Heavy Electrical Ltd..
5. G.E.B.
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COMPETITORS
MHE DIVISION GEAR DIVISION
1. TRF Ltd (Jamshedpur) 1. Shanti gear
2. Tecpro 2. F.L.Smith
3. L & T 3. Premium gear
4. Mcnally Bharat Eng. Co.Ltd. 5. NAW
. 6. Flender
MARKET SEGMENTATION
Market is collection of various Buyers and Sellers who transact over a particular product or
product class. Buyers differ in their wants, Purchasing power, geographical locations, buying
attitude, Habit. And therefore company has to practice segment marketing.
Market Segmentation is the sub-dividing of market into homogenous sub-sections of
customers where any sub- sections may be selected as a Market Target to be reached with
distinct marketing mix. The basic object of Market Segmentation is to identify the group of
Homogeneous Buyers and to device a marketing plan suitable to each of these groups.
For ELECON, Customers are not Individual companies, but are joint Individuals of Coresectors, these companies are wide spread all over the country and to cater requirements of
its customers, Elecon has segmented Market on the Geographical basis.
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SALES PROMOTION
Sales Promotion consists a wide variety of promotional tools designed to stimulate a strong
market response. Sales Promotion includes tools for consumer promotion (sample coupons,
cash refund offers, price off, premiums, prizes, point of purchase displays and
demonstration).
Sales Promotion is the key ingredient in marketing campaigns. Sales Promotion consists of
diverse collections of incentive tools, mostly short termed designed to stimulate quicker and
or greater purchase of particular products / services by customers.
Following are the Sales promotion strategies adopted by ELECON:
1. Provides Discounts.
2. Provides guarantee of 12 months from the date of manufacture of Equipment.
3. Provides after sales product services.
4. Provides Gift articles.
ADVERTISING
Advertising is the communicative activity conducted through mass educational media like
News papers, Magazines, Radio, and Television, to make the people aware and informed
about the product in the market and also encourage them to buy.
Advertising is a printed, written, oral and illustrated art of selling. Its objective is to create in
the minds of people individually or collectively an impression in favour of Advertisers Interest.
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