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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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