CONTENTS OF REPORT 1. Introduction Company History Quality Practice ISO Approval Organizational Objectives Policies & Procedures Competitors Products Offered List of Key Persons Administration Structure and Functions of Finance Department 2. Research Methodology Objectives of Study Sample Size Data Source Technique 3. Financial Performance Analysis of FMI Limited Ratio Analysis Financial Statement Analysis 4. Summary & Conclusion 5. Recommendations 1
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CONTENTS OF REPORT
1. Introduction
Company History
Quality Practice
ISO Approval
Organizational Objectives
Policies & Procedures
Competitors
Products Offered
List of Key Persons
Administration
Structure and Functions of Finance Department
2. Research Methodology
Objectives of Study
Sample Size
Data Source
Technique
3. Financial Performance Analysis of FMI Limited
Ratio Analysis
Financial Statement Analysis
4. Summary & Conclusion
5. Recommendations
6. Limitations of Study
7. Bibliography
1
COMPANY HISTORY
Ludhiana is the one of the biggest centre for production of Hosiery and Cycle Parts. Large,
Medium and Small Scale Industry flourish here out of which FMI Limited is one of the
Medium Scale Industry. Mr.M.M.Nayar who is the Chairman and Managing Director of the
Company established this company in 1950. Mr.Nayar initiated the manufacture of Metal
Wired Tape in First time in the Country. The company continues its pursuit for innovation
with the introduction of product research, Spirit Level, Measuring Wheel, Telescope
Measures for the First time in the country. The company was previously partnership concern
but with the increasing scale and remarkable progress the company became a Public Limited
Company.
The Authorized Capital of the Company is 10 Lac Equity Shares of Rs.10\- each. FMI
Limited with their brand FREEMANS is the largest manufactures and Exporters of
Measuring Tapes. FREEMANS is the only Indian Company offering a comprehensive range
of comprising various model designs in steel tape measure, Tape Rules, Fiber Glass Tapes,
Metal Wired Measures, and FREEMANS also engaged in trading of Hand Tools.
In 1962 Fiberglass Tape was introduced and Steel Tape Measure and Tape Rule were
introduced in 1966 with American Technical know-how. Due to efficient marketing system
and increasing sales the company has achieved over 70% of Indian Market Shares. Its sale
for the Financial Year ending 31.03.2009 is Rs.2547 Lac.
FREEMANS have both Steel and Plastic Division. Establishing a steel division gave
Freemans an edge over competitors with better quality control over raw material. Freemans
also has a Plastic Division with over 15 injection moulding machines manufacturing plastic
components.
After entering into International Market EURO FREEMANS was established in Spain in
1988. Now it has export in over 60 countries like Spain, Germany, U.K., Australia, Iran,
Mexico, New Zealand, Dubai, South Africa, Argentina etc. which includes European
Companies to get ECC (European Economic Countries) which is a testimony to the fact that
its Products are the best comparable to the International Quality Standards.
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The exports are continuous increasing by past eight years and company achieved the Exports
Excellence Award by Engineering Export Promotion Council for very good performance
and contribution in Exports. But in the last financial year (2009-10) company’s export to
Total Sale ratio decreased a little bit due to International Market Slump. During recession
period by last three years, many Companies engaged in Exports lost their entity but due to
very efficient Goodwill of its products FMI Limited has a very low effect on their Exports
comparable to other companies of India.
FMI Limited is the one company which is approved by ISO 2001:2008 certified company.
Their Quality Control systems are being religiously followed to ensure Consumer
Satisfaction. Precision, quality and a firm belief in perfection resulted in constant up
gradation of technology.
3
QUALITY PRACTICE
Concept of Quality in Products:
According to the concept of quality in products, these are identified and traced properly. The
purpose of this is to provide the whole system for identification and traceality of products
through different stages of receipts, storage processing, verification, packaging and delivery.
The scope of identifying and tracing the product is at the stage of incoming, in process and at
the final stage when the goods are ready.
The responsibility for identifying and tracing the goods is of the Manager Production. The
method of identifying and tracing the goods is that all the raw material components, customer
supplied goods and bought out items are physically checked and identified by suitable means
during the stages of receipt, storage, processing, packing and delivery. Traceability of
products to the extent is possible and can be ensured through unique identification of critical
items or batch identification for general components, related parts etc. This is how concept of
quality of products is considered.
Concept of Quality in Processes
According to the concept of quality in process, it is done to carry out the processing
operations under controlled conditions so as to ensure quality product. The scope of checking
the process is during the manufacturing of all the products and also during the supply of
measuring instruments.
The responsibility of controlling the process is of Manager Production. The method of
controlling the process starts when the delivery of products is governed by periodic planning,
suitable plant machinery, support services and safe working environment. The process
control parameters and products characters are mentioned closely to assure quality of
deliverable goods.
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To provide facility to the workers during the manufacturing process quality plans, flow
sheets etc. are displayed and working instructions are provided for the process where in the
absences of same adversely affect the quality. Records of process control, periodic
maintenance and safety are properly maintained.
Concept of Quality in Management and Services
The purpose of quality in management and services is to identify the need for upgradation of
skills and knowledge of employee and to organize the training for imparting it. The scope of
training is that all employees who are directly contributing towards function are affecting the
quality. Training of personnel at various levels in the organization affects the quality in
management.
The responsibility of identifying the training needs and its recommendation is done by the
respective departmental heads. Planning, organizing and coordinating training programmers
and the maintenance of training records all is done by the Management Representative.
Training needs of the employee are identified by the concerned departmental heads based on
the need of the organization and function performed. Also it is organized on the basic of the
recommendation or approval given. A list of in house faculty members, training moulds is
maintained. Also the records of training programs are maintained. Evaluation of
effectiveness of training imparted may be through training certificates or on the basis on the
job performance. People carrying out specific assigned task like calibration internal quality
audits etc. shall be selected on the basis of training imparted to them.
5
ISO APPROVAL
FMI Ltd has got ISO-9001:2008 approval as their products are fulfilling al the causes to get
the ISO approval. They got the ISO approval on 14th July 1999.
The clauses to be fulfilled by an organization to get the ISO approval are:
1. Management Responsibility.
2. Quality system.
3. Contract review.
4. Design control.
5. Document control.
6. Purchasing
7. Control of customer supplied products.
8. Product identification and traceability.
9. Process control.
10. Inspection and testing.
11. Control of inspection measuring and test equipments.
12. Inspection and test status.
13. Control of non conforming products.
14. Corrective and preventive actions.
15. Handling, packing, storage, preservation and delivery.
16. Control of quality records like identification, collection, indexing, filing storage,
maintenance and disposition of goods.
17. Internal quality audits.
18. Training
19. Servicing
20. Statistical techniques.
6
Total Quality Management (TQM)
Total quality management means the programs designed to constantly improve the
quality of products, services and marketing process.
The TQM of FMI Limited covers all the following aspects:
Adequacy of resources.
Result of internal audits.
Corrective question and complaints.
Effectiveness of quality system.
The steering Committee periodically reviews the adequacy of the staffing and resources
for the various Quality Assurance Activities. The result of the internal quality audits, the
progress on corrective actions taken by the concerned section and failure if any are
communicated to the notice of Joint Managing Director or Executive Director by the
Management Representative. The progress report on the investigation carried out on the
customers complaint is furnished to the Steering Committee by the Management
Representative. Addition, deletion and modification if any in the various documents of
the Quality System results as the outcome of the Management Review Meeting is
recorded by Management Representative. Responsibility for the implementation of the
decision taken in the meeting rest with Steering Committee.
7
ORGANIZATIONAL OBJECTIVES
The organization I working on the following objectives laid down by it. These objectives
help in the working of the organization. The objectives of the organization are:
To manufacture, buy, sell and deal in all kinds of precision tools and implements.
To buy and sell raw material for machinery for the manufacture of precision tools
and machinery.
To acquire agencies for the sale of any article or commodities of local
manufacturer or imported goods.
To purchase and acquire patents, trademarks, manufacturing formula and secret
information.
To maintain the implement ISO-9002 quality system approval.
To minimize rejection and work towards zero defect.
To promote team – work and participative culture.
To get the Higher Consumer Satisfaction by best products and services.
8
POLICIES AND PROCEDURES
Policies:
Organization basically works on their policy that:
“Commitment to perfection through quality and customer satisfaction.”
Organization policy includes objectives for quality and their commitment to quality. This
organization policy is relevant to the mission and goals and also to expectation to the
customers. Training is imparted continuously to understand, implement and maintain the
policy of the organization.
Procedures:
The procedures on which the organization works are:
Management Review Meeting shall be organized once in three months or earlier if
the need arises.
Management Review Meeting shall be convened by the Management
Representative Agenda for the meeting shall be given well in advance duly
approved by the Joint Managing Director or Executive Director.
I. The meeting shall be chaired by the Joint Managing Director or Executive Director
and attended by Steering Committee members and Management Representative.
II. The result of internal quality audit, the progress on the corrective actions taken by
the concerned section and the failures if any shall be communicated to the notice of
the Joint Managing Director or Executive Director by the Management
Representative periodically or as and when felt necessary without waiting for the
convening of the Management Review Meeting.
III. The progress report on the investigations carried out on the customers complaint
shall be furnished to the Steering Committee by the Management Representative.9
Management Representative shall maintain the records of the Management
Review Meeting.
Minutes of the meeting shall also be issued to all concerned.
Responsibilities for the implementation of the decision taken in the meeting shall
rest with the Steering Committee Members.
10
COMPETITORS
FMI Limited is the only industry in the country. As mentioned in the Company profile that
70% shares of the Indian market are with the company which is a proof that it does not have
any competitor. It is the only leading monopolistic company in the field. However, as per the
information revealed from the company office bearers that there is company in China who is
manufacturing products competing to it but till date their products are not as per ISO
standard.
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PRODUCTS OFFERED
The unit is the production house of Different type of measuring tapes. The company
currently is engaged in manufacturing of following three types of measuring tapes:
1. Metal Wired Tapes
2. Fiber Glass Tapes
3. Steel Tapes
A wide range of professional long tapes model especially designed for use in building,
surveying, civil engineering and allied industries.
1. Steel Tapes
Steel tapes are manufactured from tampered high quality carbon steel blade,
phosphated and coated with special enamel to withstand corrosion and rust. The
printing is protected with wear resistant lacquer for long life. These Long Steel Tapes
are available in different cases with different names and rates. The different types of
steel tape measures are:
(i) Steel Open Reel
It consists of tough heavy duty tapes for professional on – site measuring work. Its
open frame allows easy maintenance and cleaning of tapes. Its long sturdy winder
with easy grip knob facilitates quick rewinding.
(ii) Steel SN and SW Series
It consists of heavy duty viny leatherette covered steel case to withstand continual
usage in difficult conditions. It has designed winding handle for smooth winding
action. It is an ideal tape for high precision professional jobs. That’s why it has its
own impact on Market and eyes of the consumer.
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(iii) Steel ON and OW Series
It is an idle tape for contractors and surveyors where high accuracy is required. These
tapes are usually used by high professionals and in special cases.
(iv) Steel Dip Tapes
These are DC and DS series. These tapes are manufactured by two types of Blades
first is Carbon Steel Blade and other is Stainless Steel. Both are used for measuring
depth of oil-water or soil etc. These tapes are not often used, these are the tapes for
only depth measuring purpose and having very low demand in market.
2. Fibreglass Tapes:
These tapes measures are made of fibre Glass yarn coated with tough plastic PVC.
Unlike conventional woven or steel tape measures these are flexible yet strong and
durable. These tapes have heat sealed marketing which ensure long life. In the recent
few years it has observed that company is moving into Fibre glass tapes from Metal
Wired Tapes and demand of the same tapes is rising continuously. The different types
of glass tapes are:
(i) Fibre Glass FN and FW Series-
These tapes are made of tough viny leatherette covered steel case to withstand
difficult conditions. It is a durable tape with winding mechanism which
ensures long trouble free usage.
(ii) Fibra FB Series-
It is a tape with tough yet light weight ABS case ribs for easy handling and
strong grip. It is used for heavy duty winding mechanism.
(iii) Topline FT Series
It is a tape with tough yet weight ABS case reinforced with metal for extra
strength. It is used for heavy duty winding mechanism.
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(iv) Fibre Glass Open Reel
This tape is of FO Series. It is an ideal deal tape for contractors and surveyors.
Its design allows an easy cleaning of tape. It is a long winder with easy grip
facilitates quick rewinding. Its protruding market at the bottom of the case
allows easy measurement of land.
(3) Metal Wired Tapes:
It is a general purpose tape woven to width with copper wires lengthwise for
additional strength coated with special paints for protection against moisture, wear
and tear. This tape needs most care and time to manufacture and need more
manpower than any others. It has also low demand in the market than of other
manufactured. Different types of metal wired tapes are:-
(i) Metal Wired
This tape is of MW Series. It has impact resistant viny leatherette covered
case for use in taxing condition. It needs very care while production.
(ii) Top Line
It is a tough yet weight ABS case reinforced with metal for extra strength. It is
used for heavy duty winding mechanism.
(4) Pocket Tapes
This tape is of Steel series but in the steel series but in this category tapes are
available into only 1 meter to 10 meters (1, 2, 3, 5, 10 meters). 3 Meter Pocket tapes
are manufactured in large quantity. These tapes are manufactured in various cases and
are given different names like Centigraff, Basik, Levo, Zeon, and recently introduced
IKON and STAREX, available with Lock and Clip. Lock works as stopper on the
tape and Clip is to hang it with the belt for convenience of the user. Pocket tapes have
more demand in the national market than of International.
The Company is also manufacturing the following items:
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1. Stainless Steel Rules
2. Cutters
3. Torpedo Levels
4. Trapezoidal Levels
5. Measuring Wheels
Besides this all above The Company is also trading of many kinds of Hand Tools.
These Hand Tools are also for the measuring instruments or components for the same.
Trading of tools is mainly done with the other countries.
The company is making continue efforts to improve the existing quality and to
introduce new products which are required in Global Market. In this connection this
is also worthy here to explain here that 2 types of Pocket tapes are also registered
under trade mark during this financial year.
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LIST OF KEY PERSONS
BOARD OF DIRECTORS:
Sr. Name of Director Designations No.
1. Mr. M.M.Nayar Chairman & Managing Director
2. Mr. Rakesh Nayar Joint Managing Director
3. Mr. Ajay Nayar Executive Director
4. Mrs. Ravinder Nayar Director
5. Mrs. Cherene Nayar Director
SHAREHOLDERS:
Sr. Name of Shareholder Percentage of No. Holdings
1. Mr.M.M.Nayar 29.91%
2. Mr.M.M.Nayar(HUF) 00.06%
3. Mr.Rakesh Nayar 25.90%
4. Mr.Ajay Nayar 30.89%
5. Mrs.Ravinder Nayar 00.13%
6. Mrs.Cherene Nayar 04.44%
7. Mrs.Gauri Nayar 03.20%
8. Mr.Sahil Nayar 04.27%
9. Mr.Shashi Pal Jain 01.21%
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LIST OF TOP EXECUTIVES:
Sr. Name of Executive Designation No.
1. Mr. Shashi Pal Jain General Manager
2. Mr. Jatinder Chugh Finance Manager
3. Mr. Shakti Raj Jain Production Manager
4. Mr. Shiv Jindal Export Manager
5. Mr. Yash Pal Marwaha Import Manager
6. Mr. Amar Singh Rana Quality Assurance /Control Manager
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HEADS OF DIFFERENT DEPARTMENTS:
Departments Name of H.O.D.
1. Accounts Mr. Parveen KapoorMr. Rajesh Verma
2. Exports Mr. Jarnail SinghMr. Om Parkash Chaudhary
3. Store (Raw Material) Mr. Ashwani SharmaMr. Pawan
4. Store (Packing & Own Mr.MadanManufacture Components) Mr. Rashpal
5. Personnel Mr. Rakesh Nanda
6. Security Mr. Devi Ram
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FMI LIMITED
ADMINISTRATION DEPARTMENT
Chairman & Managing Director
Joint Managing Director
Executive Director
General Manager
Manager Manager Manager Manager ManagemnetFinance Production Exports Quality Representative
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FUNCTIONING OF ADMINISTRATIVE
Administration Department is controlled by the Chairman and Managing Director.
Authorities and responsibilities of all the heads of the different departments and
individual are made by this department. The authorities and responsibilities are as
follow:-
Chairman and Managing Director
1. Overall supervision and control of all operation of the company.
2. Implementation of the quality system.
3. To ensure availability of resources in terms of machines, manpower and capital.
4. Defining responsibilities and authorities of all directors.
5. Appointment of Management Representative.
6. Market development of the product.
7. To maintain discipline, reduce absenteeism, to ensure smooth and congenial
atmosphere in the organization as a whole.
8. Human resources development and general administration.
9. Decision making at Top Level.
Joint Managing Director
1. Implementation of Quality System.
2. To assist the CMD in production related activities.
3. Top level negotiation with Bank and financial institution.
4. To look after imports as well as exports.
5. To deal with all legal matters.
6. To assist the CMD in general administration.
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7. To approve quality manual and procedure manual.
8. To assist CMD in identifying further investment opportunity.
9. To maintain optimum inventory levels.
10. To take corrective and preventive action on non- conforming products.
11. Identifying training needs of personnel and organizing training of personnel I
consultation of Management Representative.
Executive Director
1. To look after International Markets and develop new markets globally.
2. To arrange and monitor review of contracts.
3. To ensure proper progress and completion of all projects.
4. To look into new products development.
5. To look after all purchase related activities.
6. To look after sales promotion.
7. Implementation of Quality System Standards.
8. Issuing authority for Quality Manual and Procedure Manual.
9. To ensure availability of raw material.
10. To ensure quality of finished products as per customer specifications.
11. Defining the responsibilities and authorities of all managers.
12. Ensuring implementation of corrective and preventive action decisions.
General Manager
1. To look after all taxation related matters.
2. To assist the CMD with regards to financing pattern and location of projects.
3. To look after all accounts related matters.
4. To assist the CMD in general administration.
5. To assist the Directors in overall operations.
6. Implementation of Quality System.
7. To maintain quality records in this area.
8. To look after legal matters with all legal departments.
9. To look after all banking transactions.
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Manager Finance
1. To arrange finance for the company.
2. To look after the accounting matters, income and excise matters.
3. To deal with bank, income tax, excise and sales tax department.
4. To assist Management Representative in implanting relating to ISO 9002 and
maintenance and updation of records.
Manager Production
1. To look after all the production related activities.
2. To ensure proper testing of raw material in process inspection at various stages of
production and final inspection.
3. To ensure quality of finished products as per customer satisfaction.
4. To ensure proper maintenance of all machines and equipments.
5. To assist the Executive Director in production planning.
6. To assist the JMD in maintaining optimum inventory levels.
7. To ensure maintenance of quality records.
8. To make continuous efforts for the betterment of production process.
Manager Export
1. To assist the Directors in export planning.
2. To assist the Directors in export promotion.
3. To maintain quality records in his area.
4. To assist the Directors in making export delivery schedules.
5. To maintain all export related documents.
Manager Quality Approval
22
1. To ensure proper inspection and testing of material at all stages.
2. To ensure proper maintenance of inspection records.
3. To approve deviation.
4. To make efforts to improve and maintain quality of products.
Management Representative
Executive director has been appointed as Management Representative. In addition to his
regular responsibilities the MR shall have to do as follows:
1. Initiate and implement Internal and External Audits.