A PROJECT REPORT ON VARMORA VITRIFIED TILES

Sr. 1 2 3 4 5 6 7 8 9 10

Particulars General Information Production Department Personnel Department Marketing Department Finance Department SWOT Analysis Future Plans Suggestion Conclusion Bibliography

Page No. 7-16 17-28 29-47 48-62 63-78 79-80 81-82 83-84 85-86 87-88

Sr. 1 2 3 4 5 6 7

Particulars Bio Data of Company History & Development of Organisation Organisation Chart Size of the firm Form of Organisation Location and site preference Time Keeping System

Page No. 9 10 12 13 14 15 16

BIO DATA OF COMPANY

Name of the Firm Year of Establishment Form of Organisation Size of Organisation Location of Office Varmora Granite Pvt. Ltd. 2002 Private Limited Medium Scale Priya Darshini Complex, Office No. 415, Savsar Plot, Morbi 363 641 Varmora Granite Pvt. Ltd. 8/A, National Highway, Dhuva 02822 220213, 227171 08282 287500-700900 02822 287558 info@varmora.com www.varmora.com U26914GJ2002 PPC 43194 0922008001 99984063 AABCV7523MXM001 Vitrified Tiles 107 SBS Main Branch, Morbi
6

Location of Factory

Phone Number Office Phone Number Factory Fax Number E-Mail Web Site Registered Certificate No. Sales Tax No. CST No. Excise Registration No. Product No. of Employees Bankers

Auditors Name of Promoters

Board of Directors Investment Area Covered Market

SBS Main Branch, Morbi Shri Vallabhbhai J Patel Shri Jagjivanbhai G Patel Shri Pramodbhai P Patel Mr. V J Patel Mr. T J Patel Mr. P P Patel 15 Crores 17 Acres National and International

HISTORY & DEVELOPMENT OF ORGANISATION

The Sunshine group is a private company limited which produces different kinds of things. Each and every unit has got other industries of its town. It contained when the firm was incorporated, who were the raise, what way its purpose, what are the products manufactured by them, etc. This group all promoters which are mostly from the

Village

Sara,

comes

under

the

District

Surendranagar.

They incorporated to cultivation

7

and they have good business of cotton and other

products in Village Sara.

It is established in 1984.

They started a unit of manufacturing of roofing tiles under name and style M/s. Sunshine Tiles and potteries at Morbi. They have secured mill from SBS Main Branch, Morbi. In 1987, they have organised another roofing tiles unit at Lilapur Road, Morbi under the name and style of M/s. Jaystar Industries. The workers are very familiar to work in this industry. In 1991, they GIDC have under organised the another and unit style of of

manufacture of nuts and bolts of MS and SS at Vadhwan name Sunshine Fasteners. In 1994, they have started the other products. They under manufacture the name of and ceramic style glazed of M/s. wall tiles Sunshine

Ceramics. Ceramics Looking to

In 1998, they have also started another

industry, under the name and style of M/s. Jayson

the

demand

of

ceramic

floor

tiles

experience in this line is most important and the group has more than 60 dealers network, which is necessary to business. So, they have also started
8

another industry, under the name and style of M/s. Sunhill Ceramics Pvt. Ltd. In 2002, they have also started another industry, under the name and style of M/s. Varmora Granite Pvt. Ltd. This industrys product is to manufacture vitrified tiles only. It is good for them that they dont have to find another young team because it is already well equipped with the family members.

ORGANISATION CHART

Chairman Chairman Production Production Department Department Production Production Manager Manager Laboratory Laboratory Testing Testing Supervision Supervision Manager Manager Workers Workers Marketing Marketing Manager Manager Marketing Marketing Officer Officer Dispatch Dispatch Executive Executive Clerk Clerk Marketing Marketing Department Department State Marketing State Marketing Manager Manager Marketing Marketing Office Office Sales Sales Finance Finance Department Department Finance Finance Administrative Administrative Chief Chief Accountant Accountant Accountant Accountant Peon Peon

10

SIZE OF THE FIRM

According to the definition given by Government of India, the size of the industry can be divided into three main types. Small Scale Organisation Medium Scale Organisation Large Scale Organisation If companys investment in plant and machinery is more than 3 crores, it is called large scale organisation. The investment of Varmora Granito Pvt. Ltd. in fixed assets is of Rs. 140100000. coming under It the also category uses organisation. Therefore, it is of large scale electronic

manpower,

machinery and having more than 1700 workers.

11

FORM OF ORGANISATION
According to the form of organisation, the

organisation can be divided as follows: Private sector unit Public sector unit Joint sector unit In this firm, it is a private limited firm.

12

LOCATION AND SITE PREFERENCE

The site of this unit is located at 8/A National Highway, at Dhuva, which is only 18 Kms. away from Morbi City. It is in ceramic zone with numbers of other ceramic units. and suitable location. location. Land In Dhuva at Morbi, land and labour are found very cheap, so Varmora Vitrified tiles started at this place. Labour In big city labour cost is very high, but in Dhuva at Morbi provide cheap and educated skilled labour because of the ceramic zone is situated. Transport In Dhuva at Morbi is situated in ceramic zone, so transportation facilities are also available. It is a main and most It plays a vital role for important part of industry has chosen very simple

13

TIME KEEPING SYSTEM

Time keeping system is very important as all the workers should arrive at reporting time and start their work immediately. will not be achieved. If they are irregular than Therefore, the workers are there would be less outcome and expected target given cards in which their arrival and departure time is written regularly and therefore punctuality is maintained. Industry This industry is running for continuous process i.e. 24 hours. It is working in 3 shifts. They are: 08:00 AM to 04:00 PM 04:00 PM to 12:00 Midnight 12:00 Midnight to 08:00 AM Office Office hours for industry are as under. 08:00 AM to 12:00 Noon 02:00 PM to 06:00 PM

14

15

Sr. 1 2 3 4 5 6 7 8

Particulars Introduction Raw Material Availability Raw Material Used Inspection of raw material Types of machines Process of production About products Quality Management

Page No. 19 20 21 22 23 25 27 28

16

INTRODUCTION
The production of a firm is concerned with the creation of a product or services required to satisfy customer needs. In any business, suppliers are needed for product or service, it is quite obvious that activities of production system must be related to the customer demand or reflected in the continuous flow of order. It is the most important department amongst the other departments of an organisation. department, department. finance department, Personnel marketing

department are very much depended on production

17

RAW MATERIAL AVAILABILITY

Raw materials are the basic requirement for any industry. Raw materials are converted into finished goods after various processes on it. Raw materials are available with help of roadways if purchased from the country. If the materials are purchased from other countries than it is available with help of railways.

18

RAW MATERIAL USED

List of raw materials used for production of vitrified tiles Raw Material Pots feldspar Soda feldspar Quartz Ball Clay Ashapura Clay Kadappa Clay China Clay Ukraine Clay STPP Body Stain Soluble Salts LPG Zircon Place where it is obtained Rajasthan Rajasthan Rajasthan Rajasthan Kutch Andhra Pradesh Gujarat Import from Europe Import from China Import from Italy Import from China Madhya Pradesh Gujarat Import from Australia

19

INSPECTION OF RAW MATERIAL

Raw materials are inspected and checked before they are sent to production department. 9002. Flow chart for inspection of raw material can be showed as follows. Sampling from truck MC% content Grinding Drying Powder preparation MC% addition Pressing Drying Firing Loss on ignition Fired colour Water absorption It is maintained in Varmora as per guidelines of ISO-

20

TYPES OF MACHINES
90% of machineries used in Varmora Vitrified Tiles are imported from Japan. List of Machineries Weighing hopper Conveyor Wader Ball mill Stirrer Blunger Spray drier Slip pump Silos Vibrator with magnet Elevator Hydraulic press (h600 mt) Chilling plant Loading machine Horizontal dryer cooler box Glaze line Unloading machine Screen printing machine
21

 Compensator Head polishing line Fast single layer roller kiln Chamfering line Souring line Plastic strapping machine Fork lift Air compressor Vertical drier Generators

22

PROCESS OF PRODUCTION
Production process is very important process as the product manufactured in the company should satisfy the need of the customer. The quality is

also to be maintained and the given target should be achieved in the given time period. The following are the main production stages. Processing of raw material The first and foremost step to manufacture vitrified tiles is batching i.e. feeding the box with different types of clay according to the percentage decided. Batching includes following types of clay. Ukraine Clay 16% Ball Clay 5% China Clay 20% Soda Feldspar 19% Potash Feldspar 35% Quartz 5% Formation of tile body and drying The powder is taken from the silos and after sieving on a vibrator fitted with a magnet, it is fed into hoppers of the hydraulic press where the powder is
23

pressed in the shape of a tile of specific size as per the cavity of the die. Green tiles coming out of the press are sent to the horizontal roller dryer where they are heated to a specified temperature to remove the moisture. Preparation of designs and screen printing of tiles In the glaze line and printing section, various types of designs are prepared and printed on the dried tiles by applying colours on the screen printing machine. Firing The tiles thereafter are fed into the fast single layer roller kiln in which the tiles are fired. to 1500 0 C in different zones. Polishing The baked tiles are subjected to polishing by using 32 head polishing line. chamfered. operation. Sorting and packing The polished tiles are subjected to quality checking and sorting, where an operation marks out tiles
24

The

kiln has different temperatures ranging from 500 0 C

The tiles are also side

Multi finish tiles do not need polishing

with defects and different grades quality. Different grades of finished tiles are then packed into different types of packing box which are marked accordingly.

25

ABOUT PRODUCTS
Varmora Vitrified Tiles are manufacturing vitrified tiles having various categories and sizes. Terry cotton Mushroom Ruby pink Jaisalmer Dove gray Ivory Jet black White Aqua marina, etc. In marble series, they are having following range. Vogue Venice Valerie Vixen Volcano Virgin Vital Allun
26

They

manufacture tiles of different plain colours like:

 Arktic,Venus, etc.

QUALITY MANAGEMENT
Quality control means checking the quality, size, shape, capacity and usefulness of some of the samples selected from lot of the finished product. If any variations are there than they are to be corrected or that useless product is send to scrap yard. A well defined quality management system ISO 9001-2000 quality standard and satisfying

continual improved.

27

28

Sr. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Particulars Introduction Organisation Chart Recruitment and Selection Human Resource Planning Placement & Induction Training of Employee Performance Appraisal System Wage & Salary Administration Trade Union Collective Bargaining Record Keeping System Employee Benefits Provident Fund Scheme Promotion & Transfer Grievance Handling System Industrial Relation

Page No. 31 32 33 35 36 37 38 39 40 41 42 43 44 45 46 47

29

INTRODUCTION
Personnel management has a vital importance in modern primarily industrial concerned organisation. with Personnel and department is the part of management, which is establishment maintenance of personnel relations. In this company, there is a separate personnel department, where all the decision regarding the personnels is taken by personnel manager. He has the final authority. The personnel manager of this firm is Shri Pramodkumar P. Patel.

30

ORGANISATION CHART

Board of Director

Managing Director

Executive Director

Personnel Director

In

Varmora

Vitrified

Tiles

Pvt.

Ltd.,

separate

department for personnel for the achievement of goals and the personnel manager has authority and higher status in the organisation in his own department.

31

RECRUITMENT AND SELECTION

Recruitment Every firm or company needs persons to perform different works. In this shifting process only manpower have been determined, recruitment is next logical step. It is a linking activity bringing together those with job and those seeking job. According to one author, Recruitment is the

process of finding and attracting capable applicants for employment. are submitted. The process begins when new The result is a pool of applicants results are sought and ends when their applications from which new employees are selected. Selection Selection is a process of carefully choosing the candidates who offer themselves for appointment. In selection many processes applies on raw material but unit wants few persons. This is one of the most important responsibilities. experience is selected.
32

In selection,

the person who is having knowledge as well as

According to one author, It is the process of differentiating in a job. Here in case of Varmora Granito, the co-selection process includes basic four main steps. Preliminary searching interview Checking of reference Comprehensive interview Final employment decision. between applicants in order to identify those with a greater livelihood of success

33

HUMAN RESOURCE PLANNING

Human resource planning is understood as the process of forecasting an organisations future demand for and supply of the right type of people in the right number. human resource and recruitment It is only after this that the can initiate a process. Human department selection

resource planning is a sub-system in the total organisational planning. includes the management Organisational planning activities for that set the those

companys objectives for the future and determine appropriate means achieving objectives. providing personnel. material facilitate Human resource planning facilitates the right Human type and right the number is type of of like and the

the capitalisation of the companys objectives by resource planning

planning the

that

estimate

annuity of the materials and supplies needed to manufacturing activities organisation. Human resource planning is variously called manpower planning or employment planning.

34

In case of this industry, human resource planning is done as per the need.

35

PLACEMENT & INDUCTION

An applicant who has cleared all the hurdles in the selection procedure is offered a job. some suitable job. selection The main problem after final selection is to place him on The out of offering the job to a comes with placement of finally selecting candidate is called placement. The procedure workers on the job. Induction is a technique by which a new employee is rehabituated into the changed surrounding and introduced to the practices, policies and purpose of the organisation. In other words, induction means introducing or orienting a new employee to the organisation and to follow up for his adjustment in the organisation. In this industry, when a new employee is selected, he is kept under the supervision of his superior where he is trained. The new employee is provided with the operational knowledge that is specific to the position and location.

36

TRAINING OF EMPLOYEE
Training refers to the imparting of specific skills abilities and knowledge to an employee. It is any attempt to improve current or future employees performance by increasing an employees ability to perform through learning, usually by changing the employees attitude or increasing his/her skills and knowledge. for training is determined by the performance deficiency. At present training of workers is necessary because many jobs have assumed highly technological character and under automation. We require highly skilled operatives. In Varmora Granito, the workers who need training are kept under their supervisors who give them training while training for staff members or managerial level is given on the job. The need employees

37

PERFORMANCE APPRAISAL SYSTEM

Performance appraisal is the assessment of an individuals performance in a systematic way. The performance being measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgement, versatility, health and like assessment should not be confined to past performance alone. Potentials of the be employee for assessed. In Varmora Granito, ability to the do supervisor work sees the and future performance must also

employees

properly

efficiently, whether he understand his responsibility or not, how is his behaviour towards his colleagues, etc.

38

WAGE & SALARY ADMINISTRATION

Wage and Salary Administration refers to the

establishment and implementation of sound policies and practices of employee compensation. Wages are the economic compensation paid to the workers for services derived by them. wage. It can be divided into two types i.e. piece wage and time In Varmora, there is time wage system and There wages are Salaries it is paid on monthly basis.

calculated as per monthly wage rate according to the minimum wages act of government. are paid on monthly basis and its amount is by the company according to working efficiency of the employee.

39

TRADE UNION
Trade union means the union of the workers who are permanent or temporary in the unit, where they are working. In Varmora Granito, there is no special trade union. The purpose to make these unions is maintaining the interest of workers and management. and interfere in routine work. maintain relations between management staff. These unions do not disturb without any special problem They always try to employees and

40

COLLECTIVE BARGAINING
Collective bargaining means the process in which conditions of employment are determined by agreement between representative of the union on one hand and those of the employer on the other hand. It is called collective because both the employer and employee act as a group rather than individuals. It is described as bargaining because the method of reaching an agreement involves proposals counter and offers. counter In proposals, highly offers and the industrialized

democratic societies of the west, more than 90% of the disputes are between labour and management which are settled through collective bargaining process. In Varmora Granito, management is having

agreement with the employees regarding wage, working conditions, promotion, transfer and other facilities like medical facility, etc.

41

RECORD KEEPING SYSTEM

It is very much necessary for an organisation to keep the reward of its workers and many other details related to it. The reward contains personnel as well as on the job efficiency information of an employers or workers. In Varmora Granito, to the do supervisor work sees the and employee ability properly

effectively whether he understand his responsibility or not, how is his behaviour towards his colleagues, etc.

42

EMPLOYEE BENEFITS
Now a day, most of the firms provide the provident fund scheme or other facilities to their workers. worker. Varmora Granito provides various monitory and non monitory benefits and services like: Bonus 10% extra bonus is paid to workers. Allowances Various types of allowances are given to workers. Varmora provides two wheeler facilities (Honda & Splendor) and 100% expense of petrol. Statutory Welfare Measures Under this, the company provides first aid facility, cold water facility, company distributes sweets and other eatables on the festivals like Dashera, Diwali, etc. Loan Facility Loan is provided to employees when in need. They are not charging any type of interest on the loan. It is repaid in installments. It is important as it is one kind of security of a

43

PROVIDENT FUND SCHEME

Provident fund scheme is facility provided to every employee may be at high post or low post. In this scheme, a certain percent of employees salary is oriented by the firm and on that 12% of interest is paid and employee adds very certain fixed percent to it, the interest is paid on both employee and employers amount. This industry has adopted this scheme. They are

putting 12% salary as Provident Fund, which is refundable after the retirement of employee or when he is going abroad for permanent settlement or when he is going for another job.

44

PROMOTION & TRANSFER

Promotion The promotion means to do upliftment within the organisation. At this stage employees wage and salary status, prestige moves towards the top level. Their thinking is also increasing up in his duties and responsibilities. Therefore, a promotion is a vertical upward

movement in rank & responsibility. Transfer The transfer is a process of planning the employees in the position where they are likely to be more effective, or where they are likely to get more job satisfaction or it is movement of an employee from one job to another without involving any substantial changes in his duties, responsibility, status, etc. Therefore, transfer is exchange in job where new job is substantially equal to old in terms of pay, status and responsibilities.

45

This company is only 2 years old, so there is no such policy and programs formulated for promotion as well as transfer.

46

GRIEVANCE HANDLING SYSTEM

Grievance arising out is any of discount or dissatisfaction, with the

whether expressed or not, whether valid or not, anything connected company, which an employee thinks or believes or even feels to be unfair, unjust or inequitable. In case of Varmora Granito, most of employees are satisfied and management always tries to satisfy needs of employees as quickly as possible. solve it. If any problem arises than related manager will try to

47

INDUSTRIAL RELATION
Industrial relation refers to the relation of

management with the employees. industry. smoothly. Internal Relation

This is one

important factor, which affects the success of any The relation between management and workers should be namely so as to run the industry

Varmora Granito Industry is concerned with the management relations. and workers share breathing They are united and consider their unit

as a second family. External Relation External relation means the relation of unit members of external society like other industries, government, customers, etc. good external relations. Varmora Granito has

48

49

Sr. 1 2 3 4 5 6 7 8 9 10 11 12 13

Particulars Introduction Organisation Chart Market Size Market Segmentation Pricing Advertisement Channel of Distribution Market Research Credit Facility Sales Promotion Export potential Competitors Consumer problem handling

Page No. 50 51 52 53 54 55 56 57 58 59 60 61 62

50

INTRODUCTION
Market is the place where buying and selling is carried out by buyers and sellers i.e. trading activity are carried out. Marketing is a social and management process that involves identifying unsatisfied needs or wants of the consumers, producing goods or services to satisfy those needs or wants, determining appropriate price, promotion and distributing and maintaining relation with the market. In todays modern area each and every firm gives priority to have a different marketing department. Marketing advertising, involves the activities market such as publishing, research,

distribution aspect, sales promotion, etc.

51

ORGANISATION CHART

Board of Director

Chairman

Managing Director

Marketing Manager

Assistant Manager

Regional Manager

District Manager

Area Manager

Salesman

52

MARKET SIZE
As per SAKET INDUSTRIAL DIGEST, JUNE 1996, size of Vitrified tiles is as under. The vitrified tiles market size is established at Rs. 525 Crores, where as floor tiles segment is Rs. 300 Crores. The demand for this tile is growing at pace of 30%. The production capacity is expected to bulge by nearly 5.35 Lacs tones by 1997-98.

53

MARKET SEGMENTATION
Market segmentation is based upon the market oriented strategies and philosophy segmentation gives special emphasis on the demand size of the market. Market segmentation is a method of achieving maximum market response from limited marketing resources by the markets for to identify the target customer. Generally, there are two types of market segmentation. People oriented approach Consumer demand or product oriented approach. In case of Varmora, there is no need for market segmentation. Their market is fixed, so they think that there is no need of market segmentation. They produce the item according to orders they receive.

54

PRICING
Price is the amount charged for the product or service including any warranties or guarantees, delivery, discounts, services or other items that are paid of the conditions of sale and are not paid for separately. To the buyer price is a package or expectations and satisfactions. Pricing is an important decision that every company has to take high price or low price may create a bad reputation of company. The price of a product is a crucial decision. In Varmora Granito, pricing policy is cost + profit. Whatever too expenses have incurred price higher during are than the also their manufacturing of product is considered + profit is included. their Competitors prices are considered, competitors.

55

ADVERTISEMENT
Now a day, marketing plays an important role for the entire organisation. Marketing is very much necessary for all the products as without marketing the consumer will have lack of information about the products. Thus, to make the consumers aware of the product, marketing is done. Varmora advertise their products on very large scale. They advertise their products on television and also do wall paintings all over India. They also distribute pamphlets for the same.

56

CHANNEL OF DISTRIBUTION
The word Channel has its origin to the French word used for Canal. through another. place pathway of or which goods Thus, channel is route from one end to passes

In other words, the route through which consumption Channel route is of called distribution which Channel is the are goods

goods move from the place of production to the Distribution.

through

transferred from the hands of producer to the consumers or from the seller to the buyer. According to one author, A channel of distribution for a product is the route taken by the title to the goods as they move from the producer to ultimate consumer. In this industry, the distribution channel is

57

Manufacturing Of Company

Dealers

Consumers

There

are

about

300

dealers

in

all

states

of

country.

MARKET RESEARCH

Market research is the systematic and intelligent investigation or study of the who, what, where, when, why and how of actual and potential buyers. It is the systematic gathering rewarding and

analyzing of data about problems connected with the market place. It is the scientific and controlled process of gathering helping of non routine marketing to solve information management

marketing problems.

It acts as the investigative

aims of marketing manager and management tool in planning control cycle.

58

In

this

industry,

first

of

all

they

study

about

customers requirements.

They try to introduce

good facilities every time, they have a marketing research team which goes all over country.

59

CREDIT FACILITY
To run the business smoothly and regular cash flow, company gives some credit facility to the buyers. Varmora also does the same thing. They sell those products in the market on cash and credit basis. They give 3 crores credit facility to the buyers.

60

SALES PROMOTION
Sales promotion consists of short term incentives to encourage purchase or sales of a product or service. It is demand stimulating devices designed to supplement advertising and facilitate personal selling. It is a direct inducement which offers an extra value and incentive for the product to and sales force distributors to ultimate customers. In this industry, they do not adopt any technique because of potential marketing and potential customers.

61

EXPORT POTENTIAL
With major market operating up and gap of

technological advancement in the manufacturing being narrowed the market for products will grow. However, in mainly depend upon the conformity to develop countries strict standards shall determine growth. see the The increased production capacities shall companies moving towards developed Indian ceramic industry in spite of

export market.

advantages according out of low labour costs is wrought with the problem of quality and design companies are fortifying their R&D designs.

62

COMPETITORS
It is rightly said that, Without competitors market does not survive. Varmora is also starving in to sale its products in the competitive market by continuous development of a product finding new areas of consumption. Their competitors are Kajaria Bell H R Johnson, etc.

63

CONSUMER PROBLEM HANDLING

Customer is the king of the market, is a very attractive slogan. problem arises Consumers generally never face than following hierarchies of any problem for Varmora but in spite of this, if any problem handling is followed.

Problem of Government Problem of Government

Agent Agent

Marketing People Marketing People

Experts of Company Experts of Company

Discussion Discussion

Solution Solution

64

65

Sr. 1 2 3 4 5 6 7 8 9 10 11 12

Particulars Introduction Organisation Chart Capital Structure Accounting Policy Means of Finance Working capital requirement Sources of funds Financial Planning Project cost Highlights of profitability Ratio Analysis Leverage Analysis

Page No. 65 66 67 68 69 70 71 72 73 74 75 77

66

INTRODUCTION
Finance plays a very important role in any type of the firm. From the initial stage awards money is Finance is needed for making needed for the information registration of the firms, listing of the firm. necessary documents. Finance consists of procuring funds, managing and utilizing them efficiently in order to maximize the profit, which is ultimate goal of any organisation. In Varmora Tiles, the capital is procured by issuing equity shares. deposits from The secured loan of this industry is relatives of directors i.e. of Rs. 94000000 and the unsecured loan of 2007-08 is 10000000.

67

ORGANISATION CHART

Finance Cum Account Department Finance Manager And Accountant

Assistant Account

Computer Section

68

CAPITAL STRUCTURE
Procurement of capital is the most important

process of an organisation. Ownership capital can be

Capital can be of two procured by issuing

types i.e. ownership capital and borrowed capital. equity shares and sometimes preference shares and borrowed capital can be procured by issuing debentures, bank loan, etc. The capital structure of Varmora is very simple as it has issued desirable equity debt ration of 1:2.

69

ACCOUNTING POLICY
Accounting policy of Varmora Granito as under: The company maintains its accounts on historical cost basis. The current assets, loans, of and value advances, liabilities are approximately

stated if realised in ordinary course of business. The company follows all the accrual method of and

accounting

and

claims,

receivables

liabilities are provided on that basis. Depreciation is provided during year at prevailing rates prescribed by companys act 1956.

70

MEANS OF FINANCE
The project is to be funded through promoters equity funds. Term loan as also working capital facilities form bank and unsecured loans from the relatives of promoters. Sr. 1 Particulars Directors equity Shareholders equity Total Equity Term Loan Unsecured Loan Total Amount (Lacs) 70 455 525 936 98 1559

2 3

It is proposed that unsecured loan will not be repaid till repayment period of term loan is not over.

71

WORKING CAPITAL REQUIREMENT

Working capital requirement means it is necessary to maintain stocks of raw materials and to finance the funds blocked in goods in process, finished goods, overheads, etc. Total working capital requirement for first year has been estimated at Rs. 458 Lacs. The working capital is proposed to be through Bank finance to the tune Rs. 2300 Lacs and promotions funds at Rs. 160 Lacs.

72

SOURCES OF FUNDS
A manufacturing company requires capital for these purposes. To achieve or create fixed assets Working capital for financing day to day manufacturing and marketing operations. Capital for expansion, modernization, etc. A company has two main sources of capital Internal sources External sources Varmora Granito Pvt. Ltd. is having internal source of finance. The company has its own share capital and have taken loan from the bank.

73

FINANCIAL PLANNING
Financial management also requires managing for effective management of finance as it is the part of management. Financial planning means decisions to be taken to achieve basic objectives of the firm. The basic objective of finance planning is to raise the necessary funds as and when needed. There are three types of financial planning. Short term planning Medium term planning Long term planning In Varmora Granito Pvt. Ltd. there is long term financial planning. At minimum cost cash should be controlled properly.

74

PROJECT COST
Sr . 1 2 3 4 5 6 7 8 9 1 0 1 1 1 2 1 3 1 4 1 5 1 6 Particulars Land Factory Building Imported Machinery New Indigenous Machineries Electrical Installations Tools Installations Bank Guarantee for EPG GEB Deposit Computers Furniture Other Miscellaneous Assets Preliminary and pre-operative expenses Provision for contingencies Total capital cost of project Margin money for working capital Total Project Cost Amount (Lacs) 1.00 248.00 559.00 438.00 54.00 4.00 3.00 7.00 40.00 3.00 4.00 2.00 20.00 20.00 1401.00 158.00 1559.00

75

HIGHLIGHTS OF PROFITABILITY
Sr Particulars . 1 Total Income 2 Raw material and packing cost 3 Power cost 4 Fuel cost 5 Gross profit 6 Total interest 7 Net profit before tax 8 Tax 9 Net profit after tax (net cash) 1 Accruals 0 Year 2007-08 2245 930 216 324 397 137 162 39 122 319

76

RATIO ANALYSIS
Ratio analysis is an audibly useful for financial analysis. It is defined as systematic use of ratio to interpret the financial statements, so that strength and weakness of a firm as well as its historical performance and current financial conditions can be determined. The following are ratio of Varmora Granito as follows. Current Ratio = Current Assets / Current Liabilities = 73642000 / 49670000 = 1.48% Gross Profit Ratio = Gross Profit / Net Sales x 100 = 11200000 / 49643000 x 100 = 22.56% Operating Ratio = (Cost of goods sold + Operating expenses) / Net Sales x 100 = (31500000 + 2500000) / 49643000 x 100 = 68.49%
77

Liquid Ratio = Liquid Assets / Liquid Liabilities = (Current Assets Stocks) / (Current Liabilities Bank BOD) = (73642000 19748000) / (49670000 960000) = 53894000 / 48710000 = 1.10% Debtors Ratio = Credit Sales / Average Debtors = 11300000 / 8100000 = 1.40% Fixed Assets Ratio = Sales / Fixed Assets = 49643000 / 85000000 = 0.58%

78

LEVERAGE ANALYSIS
Leverage means using fixed charge sources and getting returns by using sources efficiently and effectively. loan and It they is an important different aspect as the from organisation may need long term and short term have alternatives which organisation has to take the right decision. To take this design it takes the help of leverage. Operating Leverage Fixed operating assets are giving the most cost than the fixed in and variable Any assets, costs so the are called for operating investing leverage. fixed amount borrowed

leverage

associated with the investment activities is known as operating leverage. leverage is given by Degree of Operating Leverage = Sales Variable Cost / EBIT = 29972000 10908000 / 12100000 = 19064000 / 12100000 = 1.58% The degree of operating

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Financial Leverage Leverage is a criterion for determining operating profit or loss. and loss. Finance leverage is selected with finance position between EBIT and EBT. leverage is, Degree of Finance Leverage = EBIT / EBT = 12100000 / 9900000 = 1.22% Combined Leverage Operating leverage affects a firms operating leverage (EBIT), while financial leverage affects profit after tax or earning per share. The combined effect of two leverages can be quite significant for earnings available to the equity shareholders. Degree of Combined Leverage = DOL x DFL = 1.58 x 1.22 = 1.92 The degree of finance Financial leverage is a charge to magnify the effect on the charge or operating profit

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SWOT ANALYSIS
SWOT Analysis means the analysis of S Strength W Weakness O Opportunity T Threat Strength Varmora Granito Pvt. Ltd. is giving employment around 200 employees. Strong market presence Develop position. Weakness Irregularity in time cost. Varmora industry entered late in the market Opportunity Rapidly and continuous growth in the market, so company will th ink about expansion. rural area to reach at the global

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Threat Highly competitive market against imported vitrified tiles.

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FUTURE PLAN
Future world. They will be installing new latest machines for increasing production and various designs and Also, ranges to meet the upcoming market needs. them services. plan of Varmora Granito is to become

leading companies in the Vitrified tiles all over the

they wanted to try serving backward class by giving

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SUGGESTION
Actually, we are just students. It is not our

capacity to give suggestions. Varmora Granito Pvt. Ltd. is having smooth relation, nice organisation and sincere workers. There is no requirement to give any kind of

suggestion, but as a part of study it is necessary to give suggestions, which are as under: Having a wide market itself in India, only little is exported. Instead of if they increase their export and step into their wide international through market this to compete increases. quality, profit

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CONCLUSION
From this unit, I learn as many things, I am very much happy to visit the company. Varmora Granito Pvt. Ltd, I Deep study of to give my came

conclusion that its future is very bright and they will progress well. The co-operation of the employees is good. The

management is also effective and efficient. All the departments are also handled by authorised person who have great experience and it is one of the response of success of the firm. So, I wish the company makes more and more profit, fulfill the future plans and get good and global market.

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BIBLIOGRAPHY
Financial Management Khan & Jain Principles of Marketing Philip Kotler

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