ECHJAY INDUSTRIES PVT.LTD.

SUMMER INTERNSHIP PROJECT

A STUDY ON FINANCIAL PERFORMANCE ANALYSIS

PREPARED BY

(JITENDRA K. VISHVKARMA)
(Enrollment Number: 167590592092)
MBA Batch 2016-18

UNDER THE GUIDANCE OF

(Asst. Prof. Jay Goswami)

ACADEMIC YEAR

2016-2017

SUBMITTED TO

H.N. SHUKLA GROUP OF MANAGEMENT COLLAGE.

RAJKOT (GUJARAT)-360003.

AFFILIATED TO
GUJARAT TECHNOLOGICAL UNIVERSITY
AHMEDABAD
 STUDENT DECLARATION

I, the undersigned VISHVAKARMA JITENDRA K.A student of M.B.A. SEM -3. Hereby
declare that the project work which is presented in this report, is my own work. I have prepared
this project report under the supervision and guidance of ASST. PROF. JAY GOSWAMI OF
H.N. SHUKLA GROUP OF MANAGEMENT, Rajkot. (Gujarat)-360003.

I feel very good to prepare this project report. This project report was submitted to GUJARAT
TECHNOLOGICAL UNIVERSITY- AHEMDABAD by preparing this project report, I got
an opportunity of practical study.

NAME OF STUDENT : JITENDRA K. VISHWAKARMA

ENROLLMENT NO : 167590592092
SIGNATURE :

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 ACKNOWLEDGEMENT

It is a great experience for me to prepare a project report. I feel happiness that I present this
report before you. I thanked all those persons who are involved in the making of project.

Firstly, I would like to thank my college H.N. SHUKLA GROUP OF MANAGEMENT

COLLAGE. And my teacher ASST. PROF. JAY GOSWAMI. Who have given us complete
information regarding the project report. I prepared this project under their guidance.

I am very happy that I have chosen MBA course because, by choosing this course one become
aware of practical studies.

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 PREFACE

The practical study is more important than theatrical study. Practical studies are the part of
M.B.A. course; M.B.A. is a special professional course regarding business. Practical study
implied by Gujarat technological University in M.B.A. under this subject, the student requires to
visit one large-scale industry.

The visit is very helpful to the students because students get the practical knowledge about the
working of industry and seeing the atmosphere of business units. With the help of industrial visit,
student develop his awareness about industrial field.

As a M.B.A. student, I had got an opportunity to visit, an industry. That industry was ECHJAY
INDUSTRIES PVT.LTD. It was a great experience for me. I have tried my level best to get as
possible as information about industry. I thanked all members who helped me to get information.

- VISHVAKARMA JITENDRA K.

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 TABLE OF CONTENT

Sr.No Particular Page

No
1 INDUSTRY OVERVIEW: -
Basic overview of industry
2 COMPANY OVERVIEW: -
History
Mission
Visions
Organizational chart
Product
Achievement
OVERVIEW OF DIFFERENT DEPARTMENT
3
Production department
Marketing department
Finance department
Human resource department
4 FINANCIAL STATEMENT ANALYSIS: -
Ration Analysis
Comparative balance sheet
5 Management of cash
6 Profitability & dividend
7 RESEACH METHODOLOGY: -
Rational for the study
Statement of problem
Research objective
Scope of study
Limitation of the research

RESEARCH DESIGN: -
Primary data analysis

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 Secondary data analysis

8 SWOT analysis
9 Finding
10 Suggestion
11 Conclusion
12 Bibliography
13 ANNEXURE: -
Annexure questionnaires

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 INDUSTRY OVERVIEW

Echjay Industries Private Limited is a pioneer and global leader in manufacturing a variety of
Quality Forgings meeting to the requirement of International Standards and specification.

Since its inception, Echjay has systematically grown into a large-scale manufacturer of steel
forgings. Using state-of the Art equipment and advanced technology, the craftsmanship of
forging metal is a tradition at Echjay where each customer's specification is carefully
transformed into a cost-efficient reality.

in our drive to become globally recognized as a dependable and preferred supplier, we offer a
complete range of Hot, Cold and Ring Rolling forging technologies along with machining
capabilities and a complete engineering infrastructure under one roof. Echjay produces a variety
of forgings and machined components that fully meet with the customer specifications for the
automotive industries in India and overseas. Additionally, Echjay products also cater to the need
of various other industries such as Oil and Natural Gas, Petrochemical, heavy and general
Engineering, Earth Moving, Railways and Defense.

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Echjay has built up a reputation of excellence in total customer satisfaction and quality all over
India and Internationally. Through continual improvements and quality assurance discipline,
Echjay is certified to ISO 9001 and TS 16949 Standards, besides being approved by
internationally recognized Inspection Authorities such as Lioyds, Udhe, TUV and Bureau
Veritas and other eminent Indian Agencies such as IBR, EIL, RDSO etc. Echjay has been
exporting its products for more than 3 decades to various countries including USA, Canada and
Europe.

Today, Echjay has emerged as a Global player with World class manufacturing facilities and a
dedicated workforce of over 1250 people. With investment of over Rs. 3.2 Billion in Plant and
Machinery, Echjay has a built in Capacity to produce 70,000 Tonnes of Forgings per annum in
its Rajkot and Thane factories. Under the watchful supervision of our Engineers and Experts, the
company continues to expand its market and grow.

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 COMPANY JOURNEY

1970 Establishment of Echjay industries PVT.LTD.

1976 Installation of 1st Ring Rolling Line in India
1980 First Machine Shop Commissioned
1987 Inauguration of Hospital
H. J. DOSHI CHARITABLE HOSPITAL AND MEDICAL RESEARCH
CENTRE
1991 Established Gear Shop
1994 First Axial Close Die Rolling Line installed in India
Fully Automatic transfer line for manufacturing of Rings & Crown
Wheels.
2001 Crossed Turnover of 1 Billion
2003 Undertaking of Wind Mill Project: A Green CSR Initiative
Today ECHJAY has 1000 Wind Mills all over India.
2006 Formal Merging of Subsidiary Company
Thane Subsidary merged into Parent Company.
2007 Installation of COLD FORGING Technology
Installation of, first of its kind COLD FORGING Technology For
manufacturing of Pinions & Shafts.
2008 Set up of Hot Rolling Line
An additional Line for manufacturing of Rings & Crown Wheels.
2013 Installation of 7th Machine Shop
Fully Automated with Robotic Technology.
2014 Crossed Turnover of 5 Billion
2015 Installation of 800 MT Screw Press from Enomoto Japan

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 KEY MANAGEMENT

Vinod Doshi (Chairman managing director)

Deven Doshi (Director)

Paras Doshi (Director)

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 HISORY &DEVELOPMENT

This industry is start 18TH, December.1970 by HARILAL (H) Jaychand (J) Doshi of Amreli
district. ECHJAY INDUSTRY was started with the work force of 100 workers at Rajkot
(Gujarat) mainly for manufacturing steel spare parts, when steel product was not produce in
Gujarat.

When it was established, government also gave favorable response to this firm by granting loan
and subsidies. Echjay steel is one of the steel company who are advance automatic technology
equipment. Echjay having many important machine they have carrying cost about 50 to 60 crores
and imported from foreign country like Germany, Japan etc.
Echjay steel produced wide range of steel product ranging from simple forging to highly critical
super forged product for the purpose of expansion and Echjay also undertakes training and
development plan for workers.
Now Echjay steel has valuable customers like in India are BHEL Reliance GNFC, IPCL, ONGC,
GAIL, Mahindra & Mahindra, Telco, and IOCL, RAILWAY BOARD, VSSC and in the foreign
Clibo Industries (USA) etc.
Now a day Echjay has upgrade produced steel even also they can be manufacturing all the types
of forging product they having lost of customer for the forging product.
Echjay are cover 70 % of forging product to market share. They can provide quality products and
Also value deliver to customers.

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 SIZE OF ORGANISATION

The classification based on the size of unit can be categorized in terms of capital investment in
fixed assets & scale of operation.

TYPES OF ORGANISATION: -

Large scale
Medium scale
Small scale

Under types of organization Echjay Industries PVT.LTD. Is category large-scale organization.

TYPES OF FORMS OF ORGANISATION:

Sole proprietorship
Partnership
Joint stock company

Echjay industries under the category of sole proprietorship.

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 COMPANY PROFILE

Name of Company Echjay Industries PVT.LTD

Address Echjay steel division Lalpari Lake,

Dudhsagar Road Rajkot (Gujarat) -360003.
Registered office 83, Bajaj Bhavan, 8th floor, Nariman point,
Mumbai (India) 400021.
Promoter MR. HARILAL JAYCHAND DOSHI.

Establishment year 18th December 1970.

Contact +91-281-2387482 / 83 / 84 / 85 / 86

+91-281-2387847
Fax
Website www.echjayindutries.com

Email id Echjay@echjayindutries.com

No of Employees 1359 Employees

324815 square feet
Total area (7.45672635 Acre)

Nature of industry Large scale Industries

Today investment 1000 crores or more.
More customer satisfaction and maximized
Objective & Profit

Weekly off Saturday and additional National holiday.

And festival day.

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 8:00 am to 4:00 pm
Shift time 4:00 pm to 12:00 pm
12:00 pm to 8:00 am
9:00 am to 6:00 pm (General shift)

Accounting Year 1st April to 31st March

Accounting System Double entry system

Bankers Bank of India

Axis Bank
HDFC Bank

Managing directors Mr. Vinod Doshi

Executive directors Mr. Deven Doshi

G.M (Production) E.P Castelino

G.M (Marketing) N.D. George

G.M (Finance) Mr. Bharat Gandhi

G.M (H.R.M) Mr. J.R.Kikani, V.H. Doshi

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MISSION

MISSION IS TO EVERY INDUSTRY HAS TO SOMETHING THEY HAVE WANT TO

ACHIEVE TO SET THE GOAL FOR A LONG TERM PERIOD TO EVERY INDUSTRIES.
ECHJAY INDUSTRY HAVE SOME MISSION WHICH THEY WANT TO ACHIEVE FOR
THE LONG TERM PERIOD. ECHJAY WORLD CLASS SUPPLIER OF FORGED AND
MACHINE COMPONENTS TO AUTO GENERAL ENGINEERING SECTOR ADDING
VALUE TO CUSTOMER BY USING STATE OF THE ART TECHNOLOGY WITH
RELENTLESS FOCUS ON QUALITY STANDARD.

REDEFINING GLOBAL COMPETITIVENESS THROUGH CONTINUAL

TECHNOLOGY UP GRADATION & IMPROVE OPERATIONAL EFFICIENCY.

TOTAL CUSTOMER SATISFACTION THROUGH QUALITY. DELIVERY AND

COST.

EXCEEDING QUALITY NORMS FOR PRODUCT AND PROCESSES.

ACHIEVE CONTINUAL GROWTH BY COMMITTED TEAM WORK AND

MEETING BUSINESS GOAL.

VISION (2020)

ECHJAY INDUSTRY COMMITTED TO CUSTOMER DELIGHT BY EXCELLING

QUALITY DELIVERY AND VALUE FOR MONEY. ACHIEVING CONTINUAL
BUSINESS GROWTH BY DOUBLING TURNOVER 1020 BY 2020 THROUGH.

FOSTERING INNOVATION

STRENGTHENING EMPLOYEES ENGAGEMENT

BUILDING CAPACITY

NEW PRODUCT AND PROCESS DEVELOPMENT

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CORE VALUE

CUSTOMER FIRST.

ETHICAL AND TRANSPARENT BUSINESS PRATICES.

QUALITY AS WAY OF LIFE.

ADDRESSING ENERGY CONVERSATION & CONCERN IN ENVIROMENT

AND SOCIAL WELFARE.

ENCOURAGE EMPOWERED TEAM WORKING.

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 FUTURE PLAN

ECHJAY has good reputation in the market today and so, it gets good rapid growth. This is very
beneficial for its future therefore; companys future is very bright. As regard the production of
company has undertaking large-scale production. In present there are six department of
production like forge shop, machine shop, die shop, heat treatment plant and ultra-modern
metallurgical and meter logical laboratory under one roof. Now ECHJAY working under new
plant which is known as cold forge in which there is no need to heat the raw material to convert
in finished product. Under this unit direct raw material is converted into finished product. The
machinery of this cold forge is imported from Germany, at this time this plant is under
construction. This Cold forge firstly used by ECHJAY in Gujarat. In future when this unit started
they can produced more production of goods. By this way they can earn more profit from it.

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 ORGANIZATIONAL CHART

Managing Director

General Manager

Marketing Production Finance Human

Department Department Department Resource
M
a
Ma Supervisor Admin
r
Department
k
e
t
Workers i
n
g
M
a
r
k
e
t
i
n
g
M 18 | P a g e
a
r
 PRODUCT

Echjay industries has so many varieties of product. They have near about 2800 product currently
manufacturing. They have core foreign product & Gear.
At ECHJAY, committed to providing superior forging Products tailored to meet each clients
needs, values, and preferences, while also tenaciously protecting the best interests of each client.

CROW WHEEL

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 ACHIEVEMENT OF ECHJAY INDUSTRES

TATA MOTORS
(PERFORMANCE QUALITY ACHIEVEMENT
ACHIEVEMENT AWARD) AWARD.

NASA POLAR SETELLITE LUNCH VEHICLE MAHINDRA & MAHINDRA

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 VARIOUS DEPARTMENT OVERVIEWS

PRODUCTION DEPARTMENT

Production plays a vital role in organization. Any organization which is doing its business in
manufacturing of any product requires production department. Production is the basic activity at
all industrial units. The 70% cost of product is the production cost.
So, what is production? Is the main question. The production is the process of converting input
as raw material into output as finished product. The input is raw material as steel, then after
process is done, one or more processes if required and finally finished product comes.
For ECHJAY production doesnt mean to provide goods to its customers but it more emphasis
on the quality of its finished products.
As a raw material ECHJAY uses billet and blooms. Billet is the part of steel for which thickness
is below 175 mm and bloom is the part of steel for which thickness is above 175 mm to 1000
mm. In other words it can be said that billet is thin and bloom is fat.
The company is producing original steel equipment by forging. So now the question arises, what
is forging? Forging is the new method for making the steel equipment by making the raw
material soft. In traditional method, the steel was melted at 1600 degree because steel converts
into liquid at 1600 degree Celsius then after the liquid transformed into whatever shape
required. But in forging the steel was heated max-to-max 1300 or 1400 degree calicoes so that
it becomes soft but not transformed into liquid. Then after by hammering and pressing the soft
steel, finished product is made.

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PRODUCTION PROCESS

Raw Material
Input

Cutting

Forging

Heat Treatment

Machining
Process

Finishing Gear

Final Inspection

Dispatch

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 PLANT LOCATION

Site selection is an important activity which decides the fate of the business. A good location
may reduce the cost of production and distribution to a considerable extent. Location of the unit
is the most important factor to be considered for successful working of any organization. It is
also very important for the development of the unit.
There are many factors which affect the location of the unit.

SUPPLY OF RAW MATERIAL

ECHJAY is getting its raw material from SAIL. Its go down in Gujarat is in Ahmadabad which
is 220 km North-East from Rajkot. So the supply of raw material is very good for ECHJAY.

AVAILABILITY OF POWER
ECHJAY has the power supply through Paschim Gujarat Vij Company LTD (PGVCL). Also the
company has its own power plant.

SUPPLY OF LABOUR
ECHJAY has good supply of labors. There are at about 1600 workers in the organization and the
supply of labor is available near by the unit.

NEARNESS TO MARKET
For ECHJAY nearness to market is not important because it supplies its products to its customers
who are outside of Gujarat and also to the customers who are outside India. So capturing the
market is not a big deal for ECHJAY. It covers its market all over the India as well as outside the
India.

GOVERNMENT SUBSIDIES AND FACILITIES

ECHJAY has also given the subsidies when it started but afterwards there is no subsidy or any
help from the government.

PERSONAL FACTORS
In the case of ECHJAY, there is a personal factor is affecting. Late Mr. Harilal Jaychand Doshi
started its small forging unit in Mumbai but afterwards when there was expansion of its unit then
he preferred Rajkot because it is a hub for the steel industry and the main city of Saurashtra
region. Also it is very near to his hometown, Amreli.

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 PLANT LAYOUT

TYPES OF PLANT LAYOUT:

PROCESS LAYOUT

PRODUCT LAYOUT

COMBINED LAYOUT

STATIC PRODUCT LAYOUT OR PROJECT LAYOUT

CELLULAR LAYOUT

JOB SHOP LAYOUT

Plant layouts are different for the different industry and sometimes-different plant layout are
combined to do the production completed.
ECHJAY is not following any particular plant layout because for forging industries plant layout
is not fixed. They have to change the layout according to the requirement of the product. Forging
industries are not producing same type of products. According to that ECHJAY is producing the
products according to the requirement of the customer. So for that plant layout is not fixed.
ECHJAY is making its plant layout after the fundamental study of future demand and
requirements of the customers. It has made its all plant layout to fulfill the long-term objectives
of the company. The plant location of ECHJAY is made in a way that the product passes from
one process to another process very frequently, thats why we can say that somehow ECHJAY is
following Product layout.

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LIST AND PURPOSE OF MACHINERY

HAMMER

PRESS AND RING ROLLING

THE AXIAL CLOSED DIE ROLLING

HOT ROLLING

COLD FORGING

CNC AND GEAR SHOP

MACHINE SHOP

CROWN WHEEL AND PINION GEAR CUTTER

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 MARKETING DEPARTMENT

MARKETING IN ANALYSIS, ORGANIZING, PLANNING AND CONTROLLING OF

FIRMS CUSTOMER IMPINGING RESOURCES, POLICIES, ACTIVITIES, WITH A
VIEW TO SATISFYING THE NEEDS AND WANTS CHOSEN CUSTOMER GROUPS AT
A PROFIT.
-PHILIP KOTLER

Marketing is a comprehensive term and it includes all resources and a set of activities necessary
to direct to consumer in the process of distribution. Businessman regards marketing as a
management function to plan, promote and deliver products to the clients of customers. Human
Efforts, finance and management constitute the resources in marketing.

We have twin activities, which are most significant in marketing.

Matching the product with demand i.e. customer needs and desire or target market.
The transfer of ownership and possession at every stage in the flow of goods from the primary
procedures to the ultimate consumer.
According to ECHJAY the marketing strategy depend upon utility of material evolution of utility
is necessary to proper advancement. They think that marketing is based upon the utility of the
products produced by them. They have to export their items should be maintained ECHJAY has
trade market for products. So according to them proper price quality delivery and reasonable
rates are the most important factors of marketing the products.

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ORGANISATIONAL CHART

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PRICING POLICY
Price is a matter of vital importance of both the seller and the buyer in the market place. Price
denotes the values of a product of services expressed in money. The consumers have number of
expectations such as accessories, after sales services part replacement, technical, guidance, extra
service and money other benefits. Price is also affected by government policy of the company.
In ECHJAY pricing is fixed with great concentration and core. The manufacturing cost is the
main department for fixing prices. Government of this concern. Demand is always greater than
their supply to promote sales there is the policy providing upon the nature of product.
Echjay Industries Pvt. Ltd. follows the price strategies are as under:
SETTING PRICE OBJECTIVES
First, the company decides what they want to acquire by selling the product. Echjay Industries
has many objectives like increase the market share, achieving target return etc.
ESTIMATING COST
Two types of cost are incurred, Fixed cost like wages & salaries etc, variable cost like raw
material repairs & maintenance etc.
Echjay Industries considers both the cost while setting the price. They cover entire cost of
production, distribution and etc. they also consider geographical area. They add up the cost of
transportation ware housing etc.
SETTING THE PRICE METHOD
Last step is fixing a method for setting the price after considering all the factors. There are
various methods like pricing based on discount, cost plus pricing method price line, policy
demand and supply approach.
Echjay Industries has adopted cost plus pricing method to set the price. This is the best method
as it is based on production cost per unit. Four items are considering in determining selling price.
They are cost of production, selling expense, interest & depreciation and profit margin.

PRICE DETERMINATION
COST OF PRODUCT + TAXES + PROFIT = TOTAL PRICE

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 MARKETING ACTIVITIES OF ECHJAY

Echjay is not doing any kind of marketing for their product because of the goodwill and image of
the company. The company has marketing department situated in the Mumbai. It has marketing
executive and different head of the different states.
The company is selling its product in international market also but they dont require any kind of
marketing for the products in different countries. The name, good image and quality of the
products withdraw the attention of the customers.
Every Company is selling its product but Echjay is selling its capacity. It has large market for its
product. It produces commodity as per the order. According to it the

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CUSTOMERS OF ECHJAY

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 COMPITITION AT RAJKOT

In Rajkot, no. of units is working in making of diesel engine, steel ring and forging parts. Almost
82 units one producing these things in market of Rajkot but separately different from other unit.
In the market Echjay covered 95% in the local market, 70% in regional market and 16% in
national level of market and 9% in export in foreign continent.

DISTRIBUTION CHANNEL
Every producer seeks to link together the set of marketing intermediaries that best fulfill the firm
objectives. This set of marketing is called the market channels as trade channel or channel
distribution.

-PHILIP KOTLER
TYPES OF DISTRIBUTION CHANNEL
ECHJAY follows Manufacturer to Customer, because it is a company of industrial goods.

NATIONAL AND INTERNATIONAL MARKET

NATIONAL MARKET

National market refers to the market within the boundaries. ECHJAY is producing such type of
product that it should be very much useful for many companies. ECHJAY has its national market
very wide and comparatively equal to international market. ECHJAY supplies goods in Mumbai,
Kolkata, Delhi, Chennai, and Hyderabad etc.

INTERNATIONAL MARKET
International market deals with the buyer and the seller from the different countries. The
business transactions take place at world level. International market refers to the market above
the boundaries of India. ECHJAY has been exporting flanges and other forgings even in well-
developed countries.

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 FINANCE DEPARTMENT

Financial management is concerned mainly with such matters as how a business unit its
raises its finance and how it makes use of it efficiently.
The finance department has to cover a long range of functions such as maintaining
adequate funds on hand to meet expenses of both revenue And capital nature. Smooth
availability for the expansion of the business as when needed, determine the success of
the financial management.
In ECHJAY industries Mr. Vinod bhai Doshi and the finance manager is Mr. Bharat bhai
Doshi who manages the finance department efficiently.

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 FINANCIAL PLANNING

In ECHJAYs finance manager is responsible for financial planning. The general manager is a
person who takes the decision about new investment and looks in to the problem etc they use
both types of financial planning.

Long term planning

Short term planning

The prime function of financial manager is to plan firms financial resources in a manner that the
firm can received long term benefits from it. Financial planning is concerned with economic
procurement and profitable use of fund. A proper financial planning in present avoids difficulties
in future.
They plans for 5 years in advance. The 5 years budget proposal are then dividend on the per year,
per month. The working capital is decided on the yearly budget planning so, it is consider as
short term planning. Thus, in ECHJAY there are both planning like short term and long term
financial planning? And it indicates the very powerful and strong financial planning.

CAPITALIZATION

The term capitalization refers to the valuation of terms capital at a point of time. It may also
mean the total accounting value of capital stock, surplus in whatever firm it may appear and the
refunded long-term debt. Capitalization is used in its quantitative aspect and refers to the amount
at which a companys business can be valued. The sum total of the par value of shares. In legal
term it refers to the total par value of the authorized capital of the company. In business it refers
to either of the following views.

The total par value of the securities i.e. shares & debentures outstanding at a given time.
The total par value of all securities at a given time plus valuation of all other long-term
obligation.

CAPITALIZATION MEANS THE TOTAL ACCOUNTING VALUE OF THE CAPITAL

STOCK, SURPLUS IN WHATEVER FORM IT MAY APPEAR AND FUNDED LONG TERM
DEBT

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 CAPITAL STRUCTURE

Capital structure is the permanent financing of the firm represented by long-term debt, preferred
stock and net worth. It refers to the make-up of the companys organization.
There are two types of the capital in the company

Owners capital
Debt capital

Owners capital consists of long term funds provided by the companys owner. While debt
capital includes any type of long term funds obtained through borrowing. The main essence of
capital structure is to determine the ratio of equity and debt capital.

A proper balance must be maintained by a company between debt and equity capital. By doing
such a balance on optimum capital structure is developed. A sound capital structure should have
the following features.

Profitability
Solvency
Feasibility
Conservation and control
ECHJAY has maintained a proper balance between debt and ownership capital. This firm have
optimum and sound capital structure.

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 MANAGEMENT OF FIXED ASSETS

ECHJAY steel is managing its fixed assets efficiently and also prepares the budget relating to
capital and investment periodically.
The financial manager of the company is responsible for maintaining proper management of
fixed assets. The investment decisions of the firm are generally known as budgeting decisions. It
can be defended as the firms to invest current funds most efficiently in long-term activities in
anticipation of an expected flow of future benefits over a series of years.

CAPITAL
ECHJAY is PVT LTD. So, there is only equity shares are in the unit for the member of the
industry.
It is compulsory for the directors of all company to hold a minimum of 5 % shares of the
company to become the director. The following information is available regarding the share.

Subscribed by the directors of the company.

DIRECTOR NAME NO OF SHARE PERCENTAGE %

DR.MAGANLAL DOSHI 14000 9.65
DR. MANHARILAL DOSHI 16000 11.03
DR.HASMUKH DOSHI 14000 9.65
DR.VINOD DOSHI 15000 10.35

The following shares are allocated to the relatives of the directors of ECHJAY.
NAME NO OF SHARE PERCENTAGE %
Mrs. USHABEN DOSHI 14500 10
Mrs. PUSPABEN DOSHI 14500 10
Mrs. RANJNBEN DOSHI 14500 10
Mrs. JYOTIBEN DOSHI 14500 10

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 HUMAN RESOURCE DEPARTMENT

Human Resource Department is the heart of the organization. All other departments are
connected with the Human Resource Department. HRD is the not only concerned with the
people working in organization but also making its efforts to put an organization at the highest
level The management of man is a very important and challenging job. Important because it is a
job, not maintain men but of administering a social system. No two persons are similar in
mental abilities, traditions, sentiments, and behavior, they differ widely also as groups, and
subject to many and varied influences. People are responsive; they feel, thin, and act; this why
they need a tactful handling by management personnel.

MANJOR AREA OF HUMAN RESOURCE MANAGEMENT

HUMAN RESOURCE PLANNING

HRP is the process of forecasting, developing & controlling by which a firm ensures that it has
the right number of people and the right kind of people at the right place, at the right time, doing
right work for which they are economically most useful. HRP is the first step for any
organization. It refers to planning about everything then moves to future.
In ECHJAY, they give lots of importance to HRP. They first checks out the requirement of the
employee with the help of the heads of the other department then after they acquire the people
according to their skill and knowledge.

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RECRUITMENT AND SELECTION
Recruitment means search of prospective employees to suit the job requirements. After the
prospective applicants, right type of persons to match the job is selected. The success of an
organization depends largely upon the team of skilled and qualified workers who are chosen out
of a number of applicants for the job.

OBJECTIVES OF HR
Hire the right person.
Conduct a wide and extensive search of the potential position candidates.
Recruit staff members who are compatible with the college or university environment and
culture.
Hire individuals by using a model that focuses on student learning and education of the
whole person.
Place individuals in positions with responsibilities that will enhance their personal
development.
In ECHJAY requirement is done as per requirements. For this purpose the respective
head of the departments uniforms the upper level that a vacancy is created. The
management thereafter uniforms the general public by advertisement that such a vacancy
is created and interested candidates may apply. ECHJAY, selection process in bottom
level is very simple but for upper level it is descriptive. They are following the steps
given below.

o APPLICATION
o SCREENING APPLICATION FORMS
o EMPLOYMENT TEST
o INTERVIEW
o REFERENCE CHECKS
o PHYSICAL EXAMINATION
o FINAL SELECTION

38 | P a g e
 INDUCTION, TRAINING & DEVELOPMENT

INDUCTION
ECHJAY steel also follow the process of induction. This work is done by head of department. A
Selected person is then goes through the process of induction. Induction means the introduction
of employees to the organization and the job by giving him all possible information about the
organization. New employees feel nervous in the organization, so to make them feel home,
induction has to be is done. It should be planned and in advance. Induction is for shorter period
of time like for half an hour and Orientation is for longer period of time like for two to three
days. ECHJAY is following the below process for Induction.

The time keeping is being informed, so time record is maintained.

The computer department is informed so that it can maintain personnel record by
handling information.
The account department for wages and salaries administration is informed.
The name of candidate is registered in the attendance register.
All the schemes start from the day of joining.

TRAINING

Training is systematic & short-term process utilizing organizational procedure by which non-
managerial personnel mean about technical knowledge & skills for definite purpose.
Training is a systematic program of organization aims at increasing the attitudes, skills and
abilities of workers to perform specific job. By training the employees will acquire new
manipulating skills, technical knowledge etc.

There are two methods of training.

On the job Training

Off the job Training

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WAGE AND SALARY ADMINISATION:-

Wages and salary are given to the employees as reward for their contribution to the production
process. Wages and salary administration refers to the establishment and implementation of
sound policies and practices of employee compensation. Various wage acts and labors acts used
in order determine the wage of the employees. In ECHJAY, salary is divided into two categories:

CONSOLIDATED SALARY
GRADE SALARY

Persons who have not completed 2 years of their job are given consolidate salary and these
personals do not get other benefits like PF, HRA, UDRA, TA, LTC etc. A person who had
completed 2 years of job is bounded to get grade salary and the also gets all benefits like PF,
HRA, TA, LTC, ATENDANCE BONUS, FDRA and VDRA etc. Persons having 3000 salaries
are eligible for ESI scheme. Payment made to labors is generally said as wages. In ECHJAY,
labor or workers are paid wages on the 7th of every month. Salary means money paid
periodically to persons whose output cannot be easily measured such as clerical staff as well as
supervisory and management staff. In ECHJAY, employees are paid salary on the 3rd of every
month. Personnel department manages payment of wages and salary.

PROMOTION & TRANSFER POLICY :-

ECHJAY does not follow any particular policy for promotion. Here, they emphasis on perforce
of the person. They are very strict in the matter of discipline. At the time of promotion, they see
performance of personnel in terms of attendance. Regularity, skill, discipline etc. ECHJAY has
only branch in Rajkot. So for transfer the worker is sent to the department to another department.
PROVIDENT FUND Provident fund is asking of saving. Any company having more than 50
employees can join this scheme. This is a statutory scheme meant for welfare of the employees.
In India it was started in 1962 and applied in all the industry. It is necessary for every company
to provide PF scheme to it permanent employees. In order to get the benefits of those scheme
employee should have completed continuous at least 90 days services. Here, in ECHJAY, under
this scheme an employee has to contribute 3.67% is for provident fund while 8.33% is for
pension scheme. An employee gets 12% interest on the contribution of his provident fund.

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PERFORMANCE APPRISAL SYSTEM

A. TRADITIONAL METHODS

Straight ranking method

Grading
Graphic rating scales
Forced choice method
Check list
Critical incidents
Group appraisal

B. MODERN METHODS

Assessment center
Appraisal by result
Human asset
Accounting method

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 RATIO ANALYSIS

Ratio analysis is a widely used tool of financial analysis. The term ratio in it refers to the
relationship expressed in mathematical terms between two individual figures or group of figures
connected with each other in some logical manner and are selected from financial statements of
the concern. The ratio analysis is based on the fact that a single accounting figure by itself may
not communicate any meaningful information but when expressed as a relative to some other
figure, it may definitely provide some significant information the relationship between two or
more accounting figure/groups is called a financial ratio helps to express the relationship
between two accounting figures in such a way that users can draw conclusions about the
performance, strengths and weakness of a firm.

CLASSIFICATION OF RATIOS:

Liquidity ratios
Activity ratios
Profitability ratios

LIQUIDITY RATIOS:

These ratios portray the capacity of the business unit to meet its short-term obligation from its
short-term resources (e.g.) current ratio, quick ratio.

1) CURRENT RATIO:

Current ratio may be defined as the relationship between current assets and current liabilities it is
the most common ratio for measuring liquidity. It is calculated by dividing current assets and
current liabilities. Current assets are those, the amount of which can be realized with in a period
of one year. Current liabilities are those amounts which are payable with in a period of one year.

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 TABLE -1CURRENT RATIO

YEAR CURRENT ASSET CURRENT RATION

LIABILITIES
2011-2012 63,232,294 27,943,268 2.26
2012-2013 96,699,412 28,547,982 3.38
2013-2014 87,908,620 23,128,596 3.80
2014-2015 98,197,393 64,509,752 1.52
2015-2016 56,028,561 19,276,000 2.91

CURRENT RATIO
4
3.5
3
2.5
2
1.5
1
0.5
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

INTERPRETATION AND ANALYSIS:

The above table and diagram shows that the current ratio in the year 2003-04was 2.26 and then
in increases to 3.38 in the year 2004-05, further move upwards to 3.80 and in the year 2006-07 it
slashed down to 1.52 and finally in the year 2007-08 it again moved up to 2.91. The normal
current ratio is 2:1. The above table shows current ratio is more than 2% in all the first four
years. But in 2006-2007 the current ratio is lower than the normal. This shows that the company
is enjoying credit worthiness.

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2) LIQUID RATIO:

The term liquidity refers to the ability of a firm to pay its short-term obligation as and when
they become due. The term quick assets or liquid assets refers current assets, which can be
converted into cash immediately it comprises all current assets except stock, and prepaid
expenses it is determined by dividing quick assets by quick liabilities.

TABLE-2 LIQUID RATIO

YEAR LIQUID ASSET LIQUID RATION

LIABILITIES
2011-2012 47,782,491.51 20,073,088.54 2.38
2012-2013 55,809,100.59 25,805,580.98 2.16
2013-2014 54,831,547.34 20,615,801.31 2.65
2014-2015 76,488,121.13 29,645,904.71 2.58
2015-2016 18,362,128.30 18,784,066.35 0.97

LIQUID RATIO
3

2.5

1.5

0.5

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

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INTERPRETATION AND ANALYSIS:
The above table and diagram shows the liquid ratio during the study period except in the year
2007-2008 is more than the normal (i.e.) 1:1.It was 2.38 in the year 2003-04, reached the highest
in 2005-06 to 2.65, and then came down to .97 in the year 2007-08. Hence the firm is controlling
its stock position because their linear relationship between current ratio and liquid ratio.

3) ABSOLUTE LIQUIDITY RATIO:

Absolute liquid assets include cash, bank, and marketable securities. This ratio Obtained by
dividing cash, bank, and marketable securities by current liabilities.

TABLE-3 ABSOLUTE LIQUID RATIO

YEAR CASH & CURRENT RATION

SECURITIES LIABILITIES
2011-2012 1,002,474 27,943,268 0.03
2012-2013 1,496,467 28,547,982 0.05
2013-2014 332,231 23,128,596 0.01
2014-2015 3,225,488 64,509,752 0.05
2015-2016 260,094 19,276,000.47 0.01

ABSOLUTE LIQUID RATIO

0.06

0.05

0.04

0.03

0.02

0.01

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

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INTERPRETATION AND ANALYSIS:

The above table and diagram shows the absolute ratio for the study period of 2011-12 to 2015-16
continuously is fluctuation in some period of time absolute ration is some up and down. So there
is not to sustain at the one stages depends on time its may be up or down.

STOCK TURNOVER RATIO:

This ratio indicates whether investment is inventory is efficiently used or not it explains whether
investment in inventories in with in proper limits or not. It also measures the effectiveness of the
firms sales efforts the ratio is calculated as follows.

STOCK TURNOVER RATION

YEAR COST OF GOOD SOLD AVERAGE STOCK RATIO
2011-2012 147,163,123 4,186,860 35.14
2012-2013 141,793,483 2,142,590 66.17
2013-2014 154,284,918 4,065,741 39.08
2014-2015 195,951,080 13,599,668 14.40
2015-2016 105,517,193 15,166,139 6.95

STOCK TURNOVER RATIO

70

60

50

40

30

20

10

0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016
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INTERPRETATION AND ANALYSIS:

The above table and diagram shows the relationship between costs of goods sold and average
stock. During the year 2012-13, it is 66.17%, which shows higher position of cost of goods sold.
In the years of study, it is shown above that the cost of goods sold are almost 35-65 times of the
average stock. However, at the same time during 2015-16 it is only 6.95, which shows that more
stock was remaining in the company.

FIXED ASSETS TURNOVER RATIO:

The ratio indicates the extent to which the investments in fixed assets contribute towards sales. If
compared with a previous year. It indicates whether the investment in fixed assets has been judos
or not the ratio is calculated as follows.

TABLE
FIXED ASSETS TURNOVER RATIO
YEAR NET SALES FIXED ASSET RATIO
2011-2012 169,056,118 39,262,748 4.30
2012-2013 173,896,782 50,550,585 3.41
2013-2014 179,231,321 41,772,389 4.29
2014-2015 225,250,870 64,982,465 3.47
2015-2016 113,095,288 54,908,412 2.06

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 FIXED ASSET TURNOVER RATIO
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

INTERPRETATION AND ANALYSIS:

The above table and diagram shows the relationship between the fixed assets and sales. The sale
is 4 times more than the fixed assets 2003-04 and 2005-06. It is more than 3 times during 2004-
05 and 2006-2007. It is more than 2 times during 2007-08. It can be observed that in the year
2006-07 the fixed assets value increased a lot and which shows that there is an additions made to
the fixed assets, similarly the sales was also increased from 179,231,321(2005-06) to
225,250,870 (2006-07). However, in the year 2007-08 it slashed to about 50% of the sales of
2006-07.

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PROFITABILITY RATIOS:

The profitability ratios of a business concern can be measured by the profitability ratios. These
ratios highlight the end result of business activities by which alone the overall efficiency of a
business unit can be judged, (E.g.) gross ratios, Net profit ratio.

GROSS PROFIT RATIO:

This ratio expresses the relationship between Gross profit and sales. It indicated the efficiency of
production or trading operation. A high gross profit ratio is a good management as it implies that
cost of production is relatively low.

PROFITABILITY RATIO TABLE

YEAR GROSS PROFIT NET SALES RATIO

2011-2012 21,892,995 169,056,118 12.95
2012-2013 16,162,083 173,896,783 9.29
2013-2014 24,946,403 179,231,321 13.92
2014-2015 29,299,790 225,250,870 13.01
2015-2016 35,895,008 245,095,288 14.64

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 GROSS PROFIT RATIO

16 14.64
13.92
14 12.95 13.01
12
10 9.29
8
6
4
2
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

INTERPRETATION AND ANALYSIS:

Above in this diagram the relationship between gross profit and Net sales in percentage. During
2011-2012,gross profit position was 12.95 % and the next year is slash down 9.29 %. In the year
again raised 2013-2014 13.92%. In the major criteria as per the time and according the company
performance to day-by-day to increased. In the next year 2014-2015 company gross profit ration
is 13.01% it is now the comparison of the above year the company gross profit is some gross
profit down. Now a company is continuously to increase his performance and they will trying to
better development and adding innovation idea. In order to 2015-16, the company can grow
14.64 %. Now a days company also cans increasing efficiency.

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NET PROFIT RATIO:

Net profit ratio establishes a relationship between net profit (after taxes) and sales. It is
determined by dividing the net income after tax to the net sales for the period and measures the
profit per rupee of sales.

PROFITABILITY RATIO TABLE

YEAR NET PROFIT NET SALES RATIO

2011-2012 10,699,894 169,056,118 6.33
2012-2013 49,042,358 173,896,783 28.20
2013-2014 71,231,044 179,231,321 39.74
2014-2015 60,621,487 225,250,870 26.91
2015-2016 217,946,568 245,095,288 88.92

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 NET PROFIT RATIO
100
90
80
70
60
50
RATIO
40
30
20
10
0
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Above the diagram in the initial stages in the year 2011-12 the net profit of the company
is grow up and then the next year 2012-13 company net profit margin is 28.20% in the
comparison of previous year the company total profit margin is low. Now company
continuously better performance to give up in the accordance of year. In year 2015-16 the
company net profit margin is 88.92% it is to better changes in performance.

ss

52 | P a g e
 COMMAN SIZE INCOME STATEMENT
(2011-12 & 2012-13)

PARTICULAR 2011-2012 % 2012-2013 %

Change
Income:
Sales 169,056,118 89.62 210,896,783 87.05
Other income 18,550,813 9.83 30,257,266 12.49
Closing stock 1,033,090 0.55 1,109,500 0.46
Total income (a) 188,640,021 100 242,263,549 100

Expenditure:
Opening stock 7,340,630 4.13 1,033,090 0.53
Purchase 90,966,622 51.12 110,670,457 57.28
Direct expenses 49,888,961 28.04 47,140,653 24.40
Administration exe. 15,776,297 8.87 18,864,268 9.76
Selling expenses 7,888,149 4.43 9,432,134 4.88
Depreciation 6,079,468 3.42 6,080,589 3.15
Total expenses. (b) 177,940,127 100 193,221,191 100
Net profit (a-b) 10,699,894 49,042,358

INFERENCE:-
The common size income statement for the year 2012 to 2013reveals the following. The sales
figure increasing year after year. It increased about Rs.41, 840,665. Administrative and other
expenses were fluctuating. The other income of the company was increased year by year.

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 COMMAN SIZE INCOME STATEMENT
(2012-13 & 2013-14)

PARTICULAR 2012-2013 % 2013-2014 % Change

Income:
Sales 210,896,783 87.05 250,231,321 90.27
Other income 30,257,266 12.49 19,961,865 7.20
Closing stock 1,109,500 0.46 7,021,983 2.53
Total income (a) 242,263,549 100 277,215,169 100

Expenditure:
Opening stock 1,033,090 0.53 1,109,500 0.54
Purchase 110,670,457 57.28 81,132,703 39.39
Direct expenses 47,140,653 24.40 79,064,698 38.38
Administration exe. 18,864,268 9.76 24,545,865 11.92
Selling expenses 9,432,134 4.88 12,272,932 5.96
Depreciation 6,080,589 3.15 7,858,427 3.82
Total expenses. (b) 193,221,191 100 205,984,125 100
Net profit (a-b) 49,042,358 71,231,044

INFERENCE:-
The common size income statement for the year 2013 to 2014 reveals the following. The sales
figure increasing year after year. In the year 2013-14, cost of sales is 38.38% of the total income.
Administrative and other expenses are fluctuating. Even though the sales increased but there is
heavy decrease in the net profit of the organization.

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 COMMAN SIZE INCOME STATEMENT
(2013-14 & 2014-15)

PARTICULAR 2013-2014 % 2014-2015 % Change

Income:
Sales 250,231,321 90.27 285,250,870 90.46
Other income 19,961,865 7.20 9,908,254 3.14
Closing stock 7,021,983 2.53 20,177,353 6.40
Total income (a) 277,215,169 100 315,336,477 100

Expenditure:
Opening stock 1,109,500 0.54 7,021,983 2.76
Purchase 81,132,703 39.39 105,677,583 14.49
Direct expenses 79,064,698 38.38 103,428,867 40.61
Administration exe. 24,545,865 11.92 22,308,545 8.76
Selling expenses 12,272,932 5.96 11,154,272 4.38
Depreciation 7,858,427 3.82 5,123,740 2.01
Total expenses. (b) 205,984,125 100 254,714,990 100
Net profit (a-b) 71,231,044 60,621,487

INFERENCE:-
The common size income statement for the year 2014 to 2015 reveals the following. The sales
figure increased from Rs.35, 019,549 to Rs.285, 250,870. In the year, 2014-15 cost of sales is
40.61%. In the year 2014-15, the company total profit margin is Rs. 60,621,487. In the year,
2013-2014 comparison of the total company profit margin is slash down and can after that year
to better profit to earn.

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 COMMAN SIZE INCOME STATEMENT
(2014-15 & 2015-16)

PARTICULAR 2014-2015 % 2015-2016 % Change

Income:
Sales 285,250,870 90.46 303,095,288 89.33
Other income 9,908,254 3.14 26,032,716 7.67
Closing stock 20,177,353 6.40 10,154,926 2.99
Total income (a) 315,336,477 100 339,282,930 100

Expenditure:
Opening stock 7,021,983 2.76 20,177,353 16.63
Purchase 105,677,583 14.49 40,032,353 32.99
Direct expenses 103,428,867 40.61 40,462,413 33.35
Administration exe. 22,308,545 8.76 10,570,521 8.71
Selling expenses 11,154,272 4.38 5,785,260 4.77
Depreciation 5,123,740 2.01 4,308,462 3.55
Total expenses. (b) 254,714,990 100 121,336,362 100
Net profit (a-b) 60,621,487 217,946,568

INFERENCE:-

The common size income statement for the year 2015 to 2016 reveals the following. The sales
figure continually it change from Rs.254, 941,342 that is almost 94.11% of the previous year. In
the year, 2015-16 cost of sales is 33.35%. However, in Administrative and other expenses there
was a negligible change due to which organization attained a profit of which is previous year
comparison increase profit Rs.217, 946,568.

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 COMMON SIZE BALANCE SHEET
(2011-12 & 2012-13)

Particulars 2011-12 % 2012-13 % change

SOURCES OF FUNDS
Total capital 52,599,867 70.55 53,371,716 44.96
Reserves & surplus 731,825 0.98 10,204,403 8.60
Loan funds:
Secured loan 21,197,278 28.43 55,103,092 46.42
Unsecured loan 22,805 0.04 22,805 0.02
Total 74,551,775 100 118,702,016 100
APPLICATION OF FUNDS

Fixed assets 39,262,748 52.67 50,550,586 42.59

Current assets & loan and advances
Cash & bank 1,002,474 1.34 1,490,466 1.26
Sundry debtors 42,435,207 56.92 63,785,212 53.74
Advances and deposit 18,761,523 25.17 30,308,234 25.53
Investment 6,000 0.01
Other assets 1,033,090 1.39 1,109,500 0.93
Total 63,232,294 84.82 96,699,412 81.46
CURRENT LIABILITIES & PROVISION
Less: current liabilities 19,725,023 26.46 25,486,282 21.47
Expenses for provision 8,218,245 11.02 3,061,700 2.58
Net current assets 35,289,026 47.33 68,151,430 57.41
Total 74,551,775 100 118,702,016 100

INFERENCE:
The common size balance sheet for the year 2012-2013 is as follows: Share capital of the
company is decreasing in %age of the net worth. In 2011-2012 in 70.55% to 44.96%.Secured
loan for the company has decreasing trend. It increases 28.43 to 46.42% of the net worth of the
Company. Fixed asset of the company is decreasing in this year from 52.92% to 42.59%. Current
liability and provisions is decreasing 37.48% to 24.05 %.

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 COMMON SIZE BALANCE SHEET
(2012-13 & 2013-14)

Particulars 2012-13 % 2013-14 % change

SOURCES OF FUNDS
Total capital 53,371,716 44.96 55,375,152 51.97
Reserves & surplus 10,204,403 8.60 10,435,447 9.79
Loan funds:
Secured loan 55,103,092 46.42 40,741,814 38.24
Unsecured loan 22,805 0.02
Total 118,702,016 100 106,552,413 100
APPLICATION OF FUNDS

Fixed assets 50,550,586 42.59 41,772,389 39.20

Current assets & loan and advances
Cash & bank 1,490,466 1.26 326,232 0.31
Sundry debtors 63,785,212 53.74 58,873,736 55..25
Advances and deposit 30,308,234 25.53 21,680,669 20.35
Investment 6,000 0.01 6,000 0.01
Other assets 1,109,500 0.93 7,021,983 6.59
Total 96,699,412 81.46 78,204,998 82.50
CURRENT LIABILITIES & PROVISION
Less: current liabilities 25,486,282 21.47 19,777,355 18.56
Expenses for provision 3,061,700 2.58 3,351,241 3.15
Net current assets 68,151,430 57.41 64,780,024 60.80
Total 118,702,016 100 106,552,413 100

INFERENCE:-

The common size balance sheet for the year 2013 to 2014 is as follows: Share capital of the
company has increased from 44.96% to 51.97. Secured loan for the company has decreasing
trend. It increases 46.42% to 38.24%.Unsecured loan of the company has been paid off. Fixed
asset of the company is decreasing in this year of 42.59% to 39.20%. Current liability and a
provision is decreasing 24.05% to 21.71%.

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 COMMON SIZE BALANCE SHEET
(2013-14 & 2015-16)

Particulars 2013-14 % 2015-16 % change

SOURCES OF FUNDS
Total capital 55,375,152 51.97 55,375,152 56.12
Reserves & surplus 10,435,447 9.79 11,056,934 11.21
Loan funds:
Secured loan 40,741,814 38.24 32,212,520 32.65
Unsecured loan 25,500 0.02
Total 106,552,413 100 98,670,106 100
APPLICATION OF FUNDS

Fixed assets 41,772,389 39.20 64,982,465 65.86

Current assets & loan and advances
Cash & bank 326,232 0.31 1,573,364 1.59
Sundry debtors 58,873,736 55..25 67,142,698 68.05
Advances and deposit 21,680,669 20.35 9,297,978 9.42
Investment 6,000 0.01 6,000 0.01
Other assets 7,021,983 6.59 20,177,353 20.45
Total 78,204,998 82.50 98,197,393 99.52
CURRENT LIABILITIES & PROVISION
Less: current liabilities 19,777,355 18.56 54,707,520 55.44
Expenses for provision 3,351,241 3.15 9,802,232 9.93
Net current assets 64,780,024 60.80 33,687,641 34.14
Total 106,552,413 100 98,670,106 100

INFERENCE:

The common size balance sheet for the year 2006 to 2007 is as follows: Share capital figure
remained constant however their %age to net worth has increased from 51.97% to 56.12%. Some
amount of the secured loans has been paid off. Fixed asset of the company has been increased
and there share is 65.86% to the total assets in the year 2006-07. Current liability and a provision
is increasing 21.71% to 65.37%. It can be noticed that the fixed assets are purchased on credit
from the creditors and they both increased.

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 MANAGEMENT OF CASH

Successful cash management involves not only avoiding insolvency, but also reducing the length
of account receivables (AR), increasing collection rates, selecting appropriate short-
term investment vehicles, and increasing cash on hand to improve a company's cash position and
profitability.

Successfully managing cash is an essential skill for small business developers, because they
typically have less access to affordable credit and have a significant amount of upfront costs to
manage while waiting for receivables. Wisely managing cash enables a company to meet
unexpected expenses, and to handle regularly occurring events such as payroll distribution.

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PROFITABILITY & DIVIDEND

61 | P a g e
 RATIONAL FOR STUDY

Financial performance criteria are a part of a company's performance criteria, which are used for
measuring financial performance. Stakeholder groups such as the government, customers and
public should enter the scene and with taking advantage of various mechanisms should impose
their goals on these companies. The other perspective claims that for-profit companies,
considering the effort they make toward obtaining profit, are considered as the best tool for
demanding economic productivity and efficiency and that, it is not necessary for them to
consider any other goals other than the goals of capital owners (increasing the company's value).
This indicates to the importance of performance of companies and in order to obtain maximum
outcome in this regard, the effective factors on company performance should be studied
carefully.

On the other hand, free cash flow is a criterion for measuring value of companies and their
performance and incites to the cash level a company has at its disposal after making the
necessary expenses for maintaining or developing assets. Without having cash, development of
new products, payment of cash dividends to shareholders and reducing debts are not possible. On
the other hand, cash holdings should be kept at a certain level to create balance between the cost
of holding cash and the cost of insufficient cash.

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STATEMENT OF PROBLEM

The problem generally explains that, less attention has been paid to the area of short-term
finance, in particular that of working capital management. Such neglect might be acceptable
were working capital considerations of relatively little importance to the firm, but effective
working capital management has a crucial role to play in enhancing the profitability and growth
of the firm. Indeed, experience shows that inadequate planning and control of working capital is
one of the more common causes of business failure.

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 OBJECTIVES OF THE RESEARCH

The first and for most step of a research is to identify the research objectives. So this it can
become easy for the research to achieve the goal and might solve the research problem based on
the objectives.

To do analysis of financial statement of Echjay Industries.

To know the stability and profitability of Echjay.
To know liquidity position of the company
To know net present value of company
To know the overall growth of company.
To analyze the financial changes over a period of five years.
To evaluate the financial position of the company in terms of solvency, profitability,
activity and earnings ratios.
To suggest effective measures in the existing system of the company.

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 SCOPE OF THE STUDY:-

The study covers almost the entire area of financial operations covered by ECHJAY
INDUSTRIES PVT.LTD. the study has been conducted with the help of data obtained
from audited financial records. The audited financial records are the company annual
reports pertaining to past 5 years from 20011-12 to 2015-2016 and the audited financial
records are obtained from the companys annual report. The researcher tries to measure
the performance of the organization and its working capital management in terms of
financial wealth.

LIMITATIONS OF THE STUDY:

The study is restricted for a period of five years
Assumed that 5 years are a responsible period to get fault accurate picture policies
and practices of management of the company.
Due to the inadequate time, it is not possible to analyze all respects relevant to the
study.
The analysis is based on annual reports of the company.
Authorities were reluctant to reveal full information about the working of the
Company.

RESEARCH DESIGN

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 Research design can be divided into two groups: exploratory and conclusive. Exploratory
research, according to its name merely aims to explore specific aspects of the research
area and does not aim to provide final and conclusive answers to research questions. In
exploratory research the researcher may even change the direction of the study to a
certain extent, however not fundamentally, according to new evidences gained during the
research process.
The main feature of this method is that the researcher has no control over the variable.
The analytical research design is that analysis of the data.

DATA SOURCES

- Data collection is the selection of information and selection of method and producers for
gathering data needed for any research.
- There are two sources of data:

PRIMARY DATA

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 - Primary data is the information obtained originally by the researcher first time but and it
is personally developed to overcome the limitation of secondary.

SECONDARY DATA

- Secondary data is the data used that is combined by the someone else other than the
researcher. It is not personally developed by the researcher. It is already available for
further processing secondary data further classified in two parts.
- Research has been done by secondary data collection and secondary data has been
collected from Bank and internet.

TOOLS OF DATA ANALYSIS

STATEMENT OF COMMAN SIZE BALANCE SHEET

RATIO ANALYSIS
CHARTS & GRAPH

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 LIMITATION OF PROJECT

The study is based on the secondary data which is collected from the annual reports,
websites and various published reports and as such findings have depend entirely on the
accuracy of such data.
The present study is based on ratio analysis and it has its own limitation that applies to
this study also. In short, the tools of investigation have their own limitation, which could
not be avoided.
The different views have been applied in the calculation of different ratios.
There are different approaches to measure the working capital, liquidity, inventory,
receivables management, cash management and financial management of working
capital. In this regard, expert views differ from one other.
It is not possible to cover all the Indian banking Industry because of the time limitation of
study period. Thus, the size of sample has been restricted and the limitation of small
sample applies to this study.

SWOT ANALYSIS
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 This analysis is used to list down favorable and unfavorable factors that go against a
particular situation. SWOT analyzes strengths, weaknesses, opportunities and threats that
are associated with a situation by considering all the internal and external aspects of the
business and market. This way, business managers can understand whether a situation has
enough aspects in its favor and ultimately worth being pursued.

STRENGTH:

Focus and investment in equipment, manpower and Time for R & D and design. It has
fewer prices in comparison to other companies. 100% on time delivery and high
standards of service. ECHJAYs employees are very much loyal in nature. ECHJAY
INDUSTRY sets run at very low voltage.

WEAKNESS:

Because of less production capacity compare to the demand, ECHJAY INDUSTRY has
to reject big order as result it has to suffer opportunity loss. There is no any latest
inventory control system so, sometimes because of wrong estimation it has much or less
stock than requirement. ECHJAY INDUSTRY finance department is follow traditional
thinking so; there is chances of block of money or not proper use of financial resources.

OPPORTUNITIES:

Good opportunity for increase Exports. Good support of Government because of noble
cause done by ECHJAY INDUSTRY. Because of good effort of R&D department many
new items will come in the market which is in work in progress.

THREATS:

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 ECHJAY INDUSTRY network is good in India but out of India it is very
limited so, competition with global company is very tough for it. ECHJAY INDUSTRY
uses in production much human resource than machine as result it bear high production
cost than other multinational company.

FINDING

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 RATIO
ANALYSIS OF THE COMPANY THE TOTAL ASSETS AND LIABILITIES OF THE
IN THE RATIO OF 1.73 TO 2.73 IN BETWEEN THAT IS ALSO GOOD FINANCIAL
POSITION OF THE COMPANY.

STATEMENT OF COMMON SIZE BALANCE SHEET IN ALSO THAT TO KNOW THE

WHAT IF THE ACTUAL FINANCIAL PERFORMANCE OF THE COMPANY AND HOW
MUCH CHANGES IN PERFORMANCE

TO KNOW THE ACTUAL NET PROFIT AND ALL OVER EXPENSES.

SUGGESTIONS

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 After observing all four functional areas of company, I believe these
are the few suggestions, which help company for further
improvement:

A Non-operating expense of the company is high. Therefore, the management should

take necessary steps to reduce the non-operating expenses. The management should take
steps to reduce the borrowed capital.

The Management must find out the reasons for the decrease in sales and must take
appropriate measures.

The Management must also study the market position and it also find the demand
prevailing in the market for the products and thus this will guide them to enhance their
sales volume.

The management is to coordinate of each of every department.

Management should be also to put information transparency.

In Management to each and every personal can take responsibility they will complete
them.

Proper coordination to top level to lower and lower to top level of information delivers.

CONCLUSION

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 On studying the financial performance of ECHJAY INDUSTRIES PVT
LTD. for a period of five years from 2011-12 to 2015-16, the study reveals that
the financial performance is better. ECHJAY INDUSTRIES PVT.LTD. Has been able
to maintain optimal cost positioning. Despite price drops in various products, the
company has been able to maintain and grow its market share to make strong margins in
market, contributing to the strong financial position of the company. The company was
able to meet its entire requirements for capital expenditures and higher level of working
capital commitment with higher volume of operations and from its operating cash flows.

The export sales of ECHJAY INDUSTRIES PVT.LTD. Are only 70% of total sales
export. Present scenario of steel industry indicates the need for more steel even with the
cause of higher production facilities. The company should now give more importance to
exports because it provides good net sales realization but also export benefits.

BIBLIOGRAPHY

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 WWW.ECHJAYINDUSTRIES.COM

WWW.GOOGLE.COM

INFORMATION PROVIDE BY COMPNAY (ECHJAY INDUSTRIES PVT.LTD

DUDHSAGAR ROAD RAJKOT 360003.

COMPANY ANNUAL FINANCIAL REPORT

REFERANCE BOOK:-

IM .Pandey, Financial Management 8th Edition, Vikas Publishing house Pvt Ltd, 6th
Reprint -2006- New Delhi.

Research Methodology- C.R. KOTHARI

R.K. Sharma & S.K. Gupta, Financial Management

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