Final Project

Ratio analysis of sis limited

INTRODUCTION TO PROJECTSavings form an important part of the economy of any nation. With the savings invested in various options available to the people, the money acts as the driver for growth of the country. Indian financial scene too presents a plethora of avenues to the investors. Though certainly not the best or deepest of markets in the world, it has reasonable options for an ordinary man to invest his savings.

Investment benefits both economy and the society. It is an outgrowth of economic development and the maturation of modern capitalism. For the economy as a whole, aggregate investment sanctioned in the current period is a major factor in determining aggregate demand and, hence, the level of employment. In the long term, current investment determines the economys future productive capacity and, ultimately, a growth in the standard of living. By increasing personal wealth, investing can contribute to higher overall economic growth and prosperity. The process of investing helps to create financial markets where companies can raise capital. This too, contributes to greater economic growth and prosperity. Specific types of investments provide other benefits to society as well.

INVESTMENTS

The dictionary meaning of investment is to commit money in order to earn a financial return or to make use of the money for future benefits or advantages. People commit money to investments with an expectation to increase their future wealth by investing money to spend in future years. For example, if you invest Rs. 1000 today and earn 10 %over the next year, you will have Rs.1100 one year from today.An investment can be described as perfect if it satisfies all the needs of all investors. So, the starting point in searching for the perfect investment would be to examine investor needs. If all those needs are met by the investment, then that investment can be termed the perfect investment. Most investors and advisors spend a great deal of time understanding the merits of the thousands of investments available in India. Little time, however, is spent understanding the needs of the investor and ensuring that the most appropriate investments are selected for him.

The Investment Needs of an Investor

By and large, most investors have eight common needs from their investments:

1. Security of Original Capital;

2. Wealth Accumulation;

3. Comfort Factor;

4. Tax Efficiency;

5. Life Cover;

6. Income;

7. Simplicity;

8. Ease of Withdrawal;

9. Communication.

Security of original capital: The chance of losing some capital has been a primary need. This is perhaps the strongest need among investors in India, who have suffered regularly due to failures of the financial system.

Wealth accumulation: This is largely a factor of investment performance, including both short-term performance of an investment and long-term performance of a portfolio. Wealth accumulation is the ultimate measure of the success of an investment decision.

Comfort factor: This refers to the peace of mind associated with an investment. Avoiding discomfort is probably a greater need than receiving comfort. Reputation plays an important part in delivering the comfort factor.

Tax efficiency: Legitimate reduction in the amount of tax payable is an important part of the Indian psyche. Every rupee saved in taxes goes towards wealth accumulation.

Life Cover: Many investors look for investments that offer good return with adequate life cover to manage the situations in case of any eventualities.

Income: This refers to money distributed at intervals by an investment, which are usually used by the investor for meeting regular expenses. Income needs tend to be fairly constant because they are related to lifestyle and are well understood by investors.

Simplicity: Investment instruments are complex, but investors need to understand what is being done with their money. A planner should also deliver simplicity to investors.

Ease of withdrawal: This refers to the ability to invest long term but withdraw funds when desired. This is strongly linked to a sense of ownership. It is normally triggered by a need to spend capital, change investments or cater to changes in other needs. Access to a long-term investment at short notice can only be had at a substantial cost.

Communication: This refers to informing and educating investors about the purpose and progress of their investments. The need to communicate increases when investments are threatened.

Security of original capital is more important when performance falls.

Performance is more important when investments are performing well.

Failures engender a desire for an increase in the comfort factor.

Perfect investment would have been achieved if all the above-mentioned needs had been met to satisfaction. But there is always a trade-off involved in making investments. As long as the investment strategy matches the needs of investor according to the priority assigned to them, he should be happy.

The Ideal Investment strategy should be a customized one for each investor depending on his risk-return profile, his satisfaction level, his income, and his expectations. Accurate planning gives accurate results. And for that there must be an efficient and trustworthy roadmap to achieve the ultimate goal of wealth maximization.

Choosing the Right Investment Options

After understanding the concept of investment, the investors would like to know how to go about the task of investment, how much to invest at any moment and when to buy or sell the securities, This depends on investment process as investment policy, investment analysis, valuation of securities, portfolio construction and portfolio evaluation and revision. Every investor tries to derive maximum economic advantage from his investment activity.

For evaluating an investment avenues are based upon the rate of return, risk and uncertainty, capital appreciation, marketability, tax advantage and convenience of investment. The following Table should give the clear picture relating to the investors investment decisions in various financial market instruments. The choice of the best investment options will depend on personal circumstances as well as general market conditions. For example, a good investment for a long-term retirement plan may not be a good investment for higher education expenses. In most cases, the right investment is a balance of three things: Liquidity, Safety and Return.

Investment Options in India

CORPORATE PROFILE The group is called the Saraswati Industrial Syndicate Limited (SIS). It was started in 1933 with the establishment of Saraswati Sugar Mills. This incidentally now happens to be one of the biggest industries in the country with the cane crushing capacity of above 1,20,000 quintals PD. Over the years, three more units namely the INDIAN SUGAR & GENERAL ENGINEERING CORPORATION (ISGEC), ISGEC JOHN THOMPSON (IJT) and UP STEELS (UPS) were added.

Today the annul turnover of ISGEC for each year exceeds us $ 24 million & group turnover of saraswati industrial syndicate limited exceeds us $ 100 million.

The group includes over 5000 people, which include engineers, technicians & skilled craftsmen. Many of the have undertaken advanced training in the UK, USA, ITALY, CANADA, AUSTRALIA, GERMANY & RUSSIA.

The etiqirieefinning group was launched in 1946 with the establishment of the Indian sugar & general engineering corporation (ISGEC). It manufactures a variety of heavy engineering goods for varied application.

ISGEC John Thompson (IJT) located at Noida supplies boilers & associated equipment on turnkey basis.

In 1960, ISGEC collaborated with John Thompson from a joint company by the name of ISGEC JOHN THOMPSON.

UP steels (UPS) was acquired in 1981 & merged later the parent company. As a foundry established in 1966 with the technical know-how from the Japans Kobe steels, UP steels has its main plant in Muzaffarnagar (UP) about 100 km. from north of DELHI. it manufactures sophisticated Alloy/Steel castings both, hand & machine molded as well as Alloy iron & Steel ingots.

The company was promoted by late Sh. D.D. puri and presently being chaired by Mr. Ranjit Puri (chairman & managing director). The company is a public limited company.BOARD OF DIRECTORS:

MR.RANJIT PURI MANAGING DIRECTOR

MR. ADITYA PURI MANAGING DIRECTOR

MR. C.R. THOMPSON DIRECTOR

MR. TAHIR HASAN DIRECTOR

MR. SUJATA VARADARAJAN DIRECTOR

MR. VINOD K. NAGPAL DIRECTOR

Audit Committee: MR. TAHIR HASAN- MEMBER MR. VINOD K. NAGPAL -CHAIRMAN MR..ADITYA PURI-MEMBERPresident & Company Secretary:

MR. S.K. KHORANA

Bankers:

STATE BANK OF PATIALA

STANDARD CHARTERED BANK

STATE BANK OF TRAVANCORE

STATE BANK OF INDORE

STATE BANK OF HYDERABAD

PUNJAB NATOINAL BANK

CORPORATION BANK

INDIAN OVERSEAS BANK

EXIM BANK

HBSE BANK

ICICI BANK

STATE BANK OF MYSORE

ABN AMRO BANK

Register Office:

YAMUNANAGAR, HARYANA

Units: INDIAN SUGAR & GENERAL ENGINEERING CORPORATIO

ISGEC JOHN THOMPSON

UTTAR PRADESH STEELS

INDIAN SUGAR AND GENERAL ENGINEERING CORPORATION

THE COMPANY

ISGEC is the heavy engineering unit of Saraswati industrial syndicate limited. It was established in 1946 & is located at Yamunanagar, Haryana, about 198 km. from Delhi.

ISGEC is famous worldwide for the manufacture of Pressure Vessels, Gas Containers and Heat Exchangers & Presses.OUR MISSION

TO BE MARKET LEADER THROUGH QUALITY, TECHNOLOGY AND EMPLOYEE INVOLVEMENT

APPROVAL

ISGEC has been approved by Lloyds register of quality assurance as an ISO-9001 company.

ISGEC is authorized by American society of mechanical engineers for the use of ASME 'U' & 'S' code stamps.

Lloyds register as Class-1 manufacture of fusion welded Pressure Vessels up to 200mm thickness approves ISGEC.

Engineers India ltd approves ISGEC. For manufactured of heat exchangers up to maximum tube thickness of 300mm.

Engineers India ltd approves ISGEC. for manufactured of Vessels & columns in carbon & alloy steel up to 150 mm thickness & in Clad steel up to 132 mm thickness.

PRODUCT RANGE

Diversity of product range is the stimulus on which ISGEC thrives. They manufacture:

Process Plant Equipment including Pressure Vessels, columns, towers, reactors, regenerators, shell & tube heat exchangers, autoclaves, etc. for fertilizers, refineries, petrochemicals & other chemical industries in various material of construction including carbon steel, clad steel duplex stainless steel & non ferrous materials. Containers for chlorine & other liquefiable gases. ISGEC has manufactured more than 50000 containers & are the largest manufacturer of containers in the world. Boilers pressure parts for water tube boilers including boiler drums, super heaters, economizers, panel & manifolds, Heavy duty mechanical presses (up to 1000) & hydraulic presses (3000 tones) for sheet metal & other applications for automobile, railways & various other industries. Sheet plant equipment & sugar machinery. high quality grey iron & alloy casting (weight tones single piece) for the chemical industry, dye & intermediate dye industry & soda ash plants , pumps & compressors manufacture, machine tool manufactures.

PRESSURE VESSELS & HEAT EXCHANGERS

- Shell & Tube Heat Exchangers

- Pressure Vessels

- Boiler Drums

- Reactors

- Columns & Towers

- Boiler Pressure Parts

- Galvanizing Baths or Kettles

- Fume Hoods

PRESSES

- Straight Side Presses - Mechanical

- Straight Side Presses-Hydraulic

- 'C' Frame Presses - Mechanical

BOILERS

-Dump Grate Boilers

- Travelling Grate Boilers

- Atmospheric Fluidised Bed Combustion Boilers (AFBC)

- Circulating Fluidised Bed Combustion Boilers (CFBC)

- Oil / Gas Fired Boilers

- Waste Heat Recovery Boilers

- Deaerators

- Spares

STEEL CASTINGS

- Hydro Turbine Castings

- Gas Turbine Castings

- Steam Turbine Castings

- Valve Castings

- Mn Steel Castings

- Ni - Hard Castings

- Pump Castings

- General Castings

- Sugar Mill Castings

- Cement Mill Castings

- S.G. Iron Castings

SUGAR PLANTS AND MACHINERY

- Complete Cane Sugar Plants

- High Performance Cane Mills

- Process House Equipment

HYPERLINK "http://www.isgec.com/sugarprocesshouseequipment.htm"

- Bagasse Fired Boilers

- Spares

IRON CASTINGS

- Castings for Pump and Compressor Industry

- Castings for Chemical & Dye Stuff Industry

- Castings for Soda Ash Industry

- Castings for Tool & Dies Industry

- Castings for Machine Tools Industry

- Castings for Steel Plant Industry

- Castings for Sugar Industry

LIQUIFIED GAS CONTAINER

- Model 'A'

- Model 'B'

- Model 'C'

- Model 'D' (approved by DOT, USA)

CONTRACT MANUFACTURING

- Custom Job Work (Heavy Engineering Equipment as per Client's Designs and Drawings)

INFRASTRUCTURE

ISGEC has employed over 2000 people which includes about 500 qualified & experienced engineers/supervisors apart from skilled works men.

ISGEC has well equipped factory, covering an area of about 25 hectares including covered production area of more than 50000 square meters spread over 11 production bays.

There are overhead cranes in all the bays with maximum crane lifting capacity of 150 tons.

Extensive facilities for hot & cold working, welding, heat treatment & testing help to ensure that compliance to quality standards.

More than 150 sophisticated machines & machine tools are installed in various production bays.

More than 150 welding machines are under operation.

ISGEC COLLABORATIONS

Working continuously towards further excellence in technology, ISGEC entered into technical collaboration with internationally well-known companies.

Some of the companies are shown below:-

1955 A.F.CRAIG & CO., UK SUGAR MACHINERY

1960 JOHN THOMPSONS, UK INDUSTRIAL BOILERS & PRESSURE VESSELS1963 KAWASAKI, JAPAN CEMENT MACHINERY1964 FARRELL, USA SUGAR MILLS1966 JOHN SHAW & SONS HYDRAULIC PRESS1968 BRONX, UK PLATE BENDING &

LEVELING MACHINES1967 NE INTERNATIONAL PULVERIZED FUEL

COMBUSTION, UK

BOILER, ROD MILLS1980 ROVETTA, ITALY MECHANICAL PRESSSOME OF OUR INTERNATIONAL CLIENTS

PHUNG HIEP CANE SUGAR FACTORY, VIETNAM LAMSON SUGAR FACTORY, VIETNAM BINH DUONG SUGAR CORPORATION, VIETNAM BANGLADESH SUGAR & FOOD INDUSTRY CORPORATION, BANGLADESH BIEN HOA SUGAR JOINT STOCK COMPANY, VIETNAMGULA PADANG TERAP, MALAYSIA

SUGAR CORPORATION OF UGANDA LTD., UGANDA

SOUTH NYANZA SUGAR CO., KENYA

KHANH HOA CANE SUGAR FACTORY, VIETNAM

BISCOM, PHILIPPINES

DANAO DEVELOPMENT CORPORATION, PHILIPPINES

DON PEDRO SUGARS, PHILIPPINES

FLETCHER SMITH LTD., UK

FIRST FARMERS SUGARS, PHILIPPINES

GUYANA SUGAR CORPORATION, GUYANA

LOPEZ SUGAR CORPORATION, PHILIPPINES

PENA FRANCIA SUGARS, PHILIPPINES

FAUJI SUGAR MILLS, PAKISTAN

SARTAJ SUGAR MILLS, PAKISTAN

BIRGANJ SUGAR FACTORY, NEPAL

CARONI (1975) LTD., TRINIDAD

NILE SUGAR COMPANY, SUDAN ZAMBIA SUGAR, ZAMBIA MUMIAS SUGAR, KENYA LINDE, GERMANYSOME OF OUR INDIAN CLIENTSSARASWATI SUGAR MILLS, HARYANA, INDIA

MAWANA SUGAR WORKS, UTTAR PRADESH, INDIA

DAYA SUGARS, UTTAR PRADESH, INDIA

NAGAR TALUKA SSK LTD., MAHARASHTRA, INDIA

BABASAHEB AMBEDKAR SSK LTD., MAHARASHTRA, INDIA

BAPUJI RAO DESHMUKH SSK LTD., MAHARASHTRA, INDIA

KEDARESHWAR SSSK LTD., MAHARASHTRA, INDIA

CHOPDA SSSK LTD., MAHARASHTRA, INDIA

GAYATRI SUGAR COMPLEX, ANDHRA PRADESH, INDIA

RIGA SUGAR MILLS LTD., BIHAR, INDIA

RAMGARH CHINI MILLS LTD., UTTAR PRADESH, INDIA

TITAWI SUGAR COMPLEX, UTTAR PRADESH, INDIA

TIKAULA SUGAR MILLS LTD., UTTAR PRADESH, INDIA

PRABHULINGESHWAR SUGAR WORKS LTD., KARNATAKA, INDIA

GEM SUGARS LTD., KARNATAKA, INDIA

MAGNA AGRO INDUSTRIES LTD., LUCKNOW, INDIA

KOTHARI SUGARS & CHEMICALS LTD., TAMIL NADU, INDIA

ORGANISATIONAL STRUCTURE

The chart of the organization structure of ISGEC showed the various hierarchal levels of the organization. Organization is divided into various departments managed by different general manager of the concerned department.

ISGEC JOHN THOMPSON (IJT)

IJT is located at Delhi. It supplies boiler & associated equipments on turnkey basis. In 1960 ISGEC collaborated with john Thompson, U.K., to from a joint company by the name of ISGEC JOHN THOMPSON.

U.P. STEELS (UPS)

This was acquired in 1981 & merged with parent company. As a foundry establishment in 1966 technical know-how from Japans Kobe steels, UPS has its main plant sit muzzafarnagar (U.P.). It manufactures sophisticated alloy steel/steel castings both hand & machine rounded as well as alloy iron castings steel ingots

U.P. steel has obtained the prestigious Lloyds certification & is now on the Lloyds register international list of class-1 founder for manufacture of casting in different grades of steel.

ISGEC

The etiqirieefinning group was launched with establishment of ISC-FC. It was founded in 1946 as a public limited company under the company act, 1956. It manufactures a variety of heavy engineering for varied applications.

I conducted my project study at ISGEC (works), Yamuna Nagar. So, here I am going to, describe the things in context of ISGEC (works), Yamuna Nagar only.

SARASWATI SUGAR MILL

It was the first unit being established in 1933. It introduced massive modernization program that leads to increase in the capacity from 8000 to 9600 tones-cane-crushed per day. It was undertaken at the cost of rs.30 crores. SSM secured a prestigious order of 10 lack tones of sugar, exports are expected to be substantially lower this year because world price are fallen. It is one of leading manufacturing sugar company in India.

SWOT ANALYSIS

STRENGTHS

Producing high quality products comparable with the international standards as awarded by ISO-9001.

Efficient labour is available at cheaper rate.

Services & cooperation of the staff & the workmen is really appreciating.

Their products are in use in 41 countries around the world.

Company is discharging their social obligations as well.

Administration is very strong.

WEAKNESS

Not linked with port or airport so freight is high.

Not & industrial belt.

Educated & skilled professional does not want to stay in this belt.

SEGMENT ANALYSIS AND REVIEW:

a) Manufacturing of heavy capital goods:These include Presses Vessels, Hydraulic and Mechanical Presses and Castings. The manufacturing facilities are located at Yamunanagar (Haryana) and Muzaffarnagar (U.P.).We have bought a land in Dahej (Gujarat) for another manufacturing unit and hope to get it operational by the end of calendar year 2007. The pressure vessels business grew because of a boom in Oil, Gas and Petroleum sectors.

During the period under review, we exported pressure vessels to KNPC Kuwait, Petrofac Sharjah, Petroleum development Oman, and Japan Gas Corporation Japan. Efforts are being made to get ourselves approved from more consultant and end users so as to increase our exports. The new facility at Dahej will manufacture Pressure vessels heavier than what we are manufacturing at present.

The Presses business equipment mainly to the automobile sector saw increased turnover because of the expansion of automobile sector.

a) Engineering, procurement and Construction Business:In this line of business, your company engineers, procures and setup boiler units and sugar plants. It also undertakes to commission these plants and take guarantees for their performance and efficiency.

This work is done out of its office in Noida (U.P.). The boiler business mainly supplies to process industries like Sugar, Cement, Paper etc. With the boom in economy, Division also saw increased sales. The Business for Circulating Fluidized Bed Combustion boiler with technology from foster Wheeler, our technology provider, saw a very significant increase. The sugar machinery business also boomed mainly because of a large number of sugar plant in U.P.

OUTLOOKS AND THREATS

The boom in the Indian economy should lead to a high demand for capital good. Moreover, company is making continuous effort to increase export. Therefore, an increase in the turnover in the coming year is expected. However we are facing increased competition from new suppliers. Indian as well as overseas (particularly Chinese), in all the segments mentioned above consequently margin are expected to be under pressure. Exports are becoming increasingly competitive and weakening of dollar may have an adverse effect on companys export. In certain areas for instance, presses and boiler, keeping abreast with oversea technology is a major concern. Raw material price continue to be very volatile and could lead to large fluctuation in the bottom line. Human resources continue to remain scarce and their costs are also rising significantly.

FUNCTIONS OF DIFFERENT DEPARTMENTS

FUNCTION OF PURCHASE DEPARTMENT

Receipt of purchase requisition issued by the indicator, giving details of specific material, quality required, delivery & test guarantee certificate duly signed by authorized person.

Dealing hand in the purchase department is to check the correctness of purchase requisition for followings:

Specification given in the purchase requisition.

Authorized person signs purchase requisition.

Proper sanction reference is given

To release the order if the item is under:

Rate contract

Price listed Repeat orders

Otherwise float the enquiry to various suppliers.

To receive the quotation if not receive by the due date then issue reminder for submission of quotation.

To prepare comparison of various quotation & to take up the suppliers in case of deviation in commercial terms.

To send quotation for technical comments to indenter.

To negotiate with various suppliers.

By calling them to discuss across the table in case of high value orders.

Through fax or over phone in case of value orders.

To prepare purchase order in terms or quotation/negotiation had with supplier.

To get order technically authenticated.

To get commercially cleared from audit department.

To post orders to suppliers & undue copies to:

Indenter for the information about clearance of indent.

Stores to check the material in terms of purchase order at the time or receipt of material.

Accounts department to release the payment as and when advised by the purchase department.

To check whether supplier had made the supply in time as specified in the purchase order. if not:

To issue reminders.

To take up over phones/through fax.

To repute expedite for expediting the material.

To continue follow up till the material is dispatched. in case supplier fails to supply the material & then take up other supplier.

To ensure dispatch of material.

To go through dispatch documents thoroughly & check in terms of purchase order commercially.

In case payment is to be made directly after receipt & approval of material by G.R. (good receipt) voucher is received along with the documents.

After receipt of material in stores the storekeeper checks it physically. In case of any storage/excess/breakage a report is sent to buying department for taking up with insurance authority or supplier suitably for getting replacement /claim for loss.

After inspection of material by the quality control department a report showing acceptance/rejection/rework by supplier in the works is issued & then the stores issue SRV.

In case material is accepted, SRV is send to the accounts department for checking. In case of rejection SRV is send to buying department for further take up with supplier for getting replacement.

To take up with supplier till the replacement is received or approved.

To issue payment advice to accounts for releasing the payment in case of direct payment.

In case of any advance/program payment is to be made in terms of purchase order, buying department issue buying advice to the accounts department for the same to release payment.

FUNCTIONS OF COMMERCIAL DEPARTMENT

INDIAN SUGAR AND GENERAL ENGINEERING CORPORATION has commercial department as separate department work-study of commercial department is done through interview method. Main functions of commercial department are:-

Bankers Guarantee

Indemnity Bond

MODVAT (modify value added)

Invoice & Credit Management

BANKERS GUARANTEE

Bankers guarantee is given for:-

Advance payment.

For contract performance.

Warranty- guarantees performance.

Against free issue of material supplied by the buyer.1. ADVANCE PAYMENT

Bankers guarantee is given for advance payment. In this:

Amount of guarantee is equal to advance received.

Security as per terms of order (generally it is 5% to 10%)

Performance guarantee as per terms of order (generally it is 10% to 20%)

Validity period as specified in the bank guarantee.

Banker guarantee will be discharged in case of advance payment after goods are being discharged.

2. FOR CONTRACT PERFORMANCE

Banker guarantee is given for contract performance also.

Security as per terms of order (generally it is 5% to 10%)

Performance guarantee as per terms of order (generally it is 10% to 15

Validity period as specified in the bank guarantee.

Banker guarantee will be discharged after performance of the contract.

3. WARRANTY - GUARANTEE PERFORMANCE

THIS GUARANTEE IS FOR PERFORMANCE OF THE EQUIPMENT supplied by the seller. Warranty- guarantee performance is valid till warranty period. Claim period will also be provided in certain guarantee which is approximately 1 to 6 months. The buyer also has right to lodge claim with seller's bank against bankers guarantee in case sellers is unable to fulfill the contractual obligation with in validity specified in the guarantee.

4. AGAINST FREE ISSUE OF MATERIALS SUPPLIED BY THE BUYER

In bankers guarantee three parties are involved:

Seller: seller is a person who gives guarantee.

Bank of seller: who stands security for the buyer?

Buyer: in whose favour guarantee is given.INDEMNITY BOND In indemnity bond, only two parties are involves seller & buyer. It is a type of document which is prepared by seller & issued to buyer. There is no third party in indemnity bond. On indemnity bond document indemnity bond no. , indemnity bond value, validity date, date of issue is mentioned. It is generally for one to six months.MODVAT

MODVAT (modify value added) is basically a duty collecting procedure which at the same time aims at allowing relief to a manufacturer on the duty element borne by him in respect of the raw material used by him.

The administration of the MODVAT scheme is regulate under section AA (rule 57A to 57J)

& section AAA (rules 57K to 57P) of the central excise rules 1944.

INPUTS

WHAT ARE PRE REQUISITIES?

It should be use for manufacture of excisable goods.

It should be duty paid.

It should come to X-factory.

One should file a declaration with A.C. so that one can avail MODVAT.

WHAT ARE FORMALITIES?

Goods received must be entered RG 23 A part I register.

Central excise duty credit should be taken RG 23 A part II register.

ON WHAT DOCUMENTS ONE CAN TAKE MODVAT CREDIT?

Duplicate copy of invoice.

Triplicate copy of bill of entry for imported goods.

Duplicate copy of challan under rule 57(F) 4.

In case of loss of duplicate invoice in transit, one can avail MODVAT on original copy of invoice with the permission of A.C.

HOW TO USE INPUTS?

Inputs to use for manufacture of excise able goods.

Inputs can be sent for job work, processing etc.

Inputs can export without payment of duty as such.

Inputs can be used as such on payment of duty after intimation to A.C.

HOW TO USE CREDIT TAKEN ON INPUTS?

Credit is to be used for clearing of excisable goods.

Credit is to be used for clearing waste & by products.

Credit is to be used on amount lying in credit & it can be refunded in case it can not be utilized on account of export.

CAPITAL GOODS

WHAT ARE PRE-REQUISITIES?

Capital goods should be specified.

Declaration to A.C.

Goods must be used in the factory.

WHAT ARE FORMALITIES?

Intimation to superintendent for receipt of capital goods.

RG 23 C parts I & II to be maintained.

USE OF MODVATED CAPITAL GOODS.

For use in factory of manufacturer.

It can be sent for repair, testing & re-processing.

It can be sold as such.

USE OF CREDIT

For clearance of excisable goods.

INVOICE AND CREDIT MANAGEMENT

Under this two documents are prepared:

Dispatch Instructions

This document is prepared by engineering department. It is prepared before 15 days of dispatching goods. Three copies of dispatch instructions are prepared.

Original Copy - Dispatch Department

2nd Copy - Commercial Department

3rd Copy - Office Copy

Challan

This document is prepared at the time of dispatch of goods. It is prepared by dispatch department. 4 copies of challan are prepared.

Original Copy - Gate Keeper

2nd Copy - Clients Copy

3rd Copy - Accounts Copy

4th Copy - Dispatch Department

WORK STUDY OF FINANCE AND ACCOUNTS DEPARTMENT

STORE ACCOUNTING

1. Payment of suppliers

a) Receipt of SRV (store receipt voucher) from stores.

b) Checking of SRV with the terms of purchase order.

c) Checking of SRV is done by:

i) Account clerk

ii) Assistant accountant

iii) Final authority (accounts officers)

d) Feeding of SRV in computer.

e) Receipt of payment request from the buying department in case of direct payment.

f) Preparation of supplier other than direct payment.

g) Payments to supplier other than direct payment i.e. advance payment:

i) Against performer invoice

ii) Against delivery

iii.) Clean advance

iv.) From branch offices

v.) Against bank guarantee

2. Balance sheet work

a) Adjustment of supplier balances at the request of purchase department.

b) Reconciliation of MODVAT account maintained in financial accounts vis--vis excise records i.e. Rrg-23 a Part II & RG-23 C Part II

c) Preparation of list of suppliers along with outstanding amounts i.e.

Local Suppliers

Foreign Suppliers

d) Security of suppliers balances & adjustments thereof.

e) Tally of store ledger with financial ledgers.

ESTABLISHMENT ACCOUNTING

Routine Work

a) Checking & making payments of salaries to:

Staff

Workers

Casual labors

Trainees

Apprentices

Contract labour

b) Making payments under various schemes namely:

Conveyance reimbursement

Medical reimbursement

LTC (leave travel concession) reimbursement

Pension

Newspaper, magazines & professional books reimbursement

Leave encashment

c) Checking of bonds & making payment there of.

d) Checking & making payments of incentives to the employees along with salary.

e) Preparing & filling half yearly ESI return.

f) Preparing & filing monthly provident fund return.

g) Depositing ESI & provident fund to the govt a/c.

h) Maintaining records of investment made by the employees after considering these investments, deducting tax from the emoluments of the employees.

i) Feeding of all the earnings & investments into the computer & preparing TDS (tax deducted at source) certificate & then issue the employees.

j) Filing & preparing annual TDS (salaries) return.

Depositing TDS in respect of salary of employees.

k) Making loan payments under various schemes namely scooter loan, car loan, furniture loan, pension loan, cycle loan, special loan & ensuring the terms of the schemes.

l) Depositing the school fees of children of certain employees.

m) Depositing the life insurance premium in respect of certain employees.

n) Depositing installments of loans taken by employees from urban bank & yamuna syndicate Ltd.

Balance sheet work Preparing list relating to establishment section.

Security of amounts laying outstanding in various accounts of employees & making adjustments thereof.

OTHERS

Inter Unit Accounting

Preparing & passing of vouchers on the basis of advices received from/sent to other units & head office.

Preparing reconciliation statements of accounts with the other units.

Scrutinizing the outstanding entries & making adjustments thereof.

1. Checking of T.A. bills of employees monthly stock statement

2. liaison with banks regarding:

Filing & preparing monthly stock statement.

Filing & preparing of QIS (quarterly information system) reports & half yearly report under chore committee.

3. maintaining & controlling imprested accounts of the employees

4. passing of fixed assets voucher

5. Getting physical verification of fixed assets done & passing adjustment entries.

6. Preparation of details for sales tax assessment.

7. Preparing various MIS (management information system) reports which include projected cash flow statement as well as actual cash flow statement, investment reports, profitability reports & other reports as per various offices of the company.

8. Preparing bank reconciliation statement on monthly basis.

9. Preparation & finalization of balance sheet & profit & loss account.

QUALITY SHOP

ISGEC is an ISO-9001 company. The most basic question that comes to our mind is the concept of quality.

QUALITY

A product can be said to have good quality if the following abilities are balanced while designing and producing it.

Suitability

Durability

Dependability

Safe workability

Affordability

Appear ability

INSPECTION

When a product is manufactured it would be necessary to check the product for all specification requirements before releasing it to the market so that the product so released meets all requirements and the customer accepts it.

QUALITY CONTROL

Every manufacturing process has several stages. No product can be manufactured in a single stage. Each stage involves the manufacturing of a part or in part of the final product of the quality of all parts meets requirements of the product as a whole would meet the requirements. So a manufacturer should check quality of various parts of the Product before assembling them or making the product so that latter does not suffer from deficiencies. Checking the quality of raw material during each stage of production and taking immediate steps in case of deviations is quality control.

QUALITY PLANNING

Quality planning is done with the help of following documents.

Quality Assurance Plan (QAP)

Quality procedure for inspection

Manufacturing drawing

Customer purchase order

QAP describes the inspection checkpoints during the various stages of manufacturing. The reference documents and records for various check points and also the various Stages and the hold points.

Quality procedure for inspection at various stages describes the methodology of inspection and control of product quality at various stages. Manufacturing drawing describes the product quality requirements in terms of specification, dimensional visual performance, characteristics etc.

PURPOSE

To prepare the plan for the quality process for products, which are being manufacturing in the division?

SCOPE

Products manufacturing against orders received in the division.

IMPORTANT FEATURES OF ISO SERIES

ISO 9000 is a system of standard of quality management.

ISO 9001, quality management is a system is a series of standards developed by the

International Organization for Standards (ISO) in Geneva, Switzerland.

There are five standards in the ISO-series, ISO-9000 to 9004. ISO-9000, ISO-9001,

ISO-9002, ISO-9003 is applicable to contractual situations. ISO-9004 is for non-

Contractual cases and used for internal management purposes.

ISO-9000: it is the contour map, furnishing the guidelines for selection and use of

ISO standard series.

ISO-9001: models for quality assurance in design / development, production, installation and servicing.

ISO-9002: models for quality assurance in production and installation.

ISO-9003: models for quality assurance in final inspection.

ISO-9004: quality management and quality system element guides.

As per the parts of ISO 9000 commitments to continuous improvement of the standards are reviewing over a period of five years.

NEED FOR ISO 9000 CERTIFICATION

Customers all over the world like to confidence in manufacturers. Capability to design develops, produce and service. Industries are facing competition to get this certification.

ISO 9000 is the only credibility passport, which certifies that a company meets Informations standards in designing, developing, producing, installing and servicing the product it supplies.

ISO 9000 is based on the philosophy that an integrated, systematic and planned

Approach only can ensure quality.

ISGEC POLICIES TO GET ISO 9000 Adherence to quality policy i.e. material produced or sold must be of good

Quality

A person would be totally responsible for quality

Decision of main inspector can be cancelled by some deputed officer i.e.

Division manager.

There is an inspector at every shop in ISGEC.

The ways of formulas of quality are not supplied for the site work there

Should be planning for this type of work.

Quality should be posted for.

Adult.

Fix fighting.

Safety.

Factory act.

OBJECTIVES OF STUDY To study various investment alternatives provided by HDFC Bank

To study the reasons for preference of a particular alternative

To study whether the investors are satisfied by the investment they have made

SPECIFIC OBJECTIVE OF STUDY

To identify investor perception of various investment alternatives

The investors objective behind investment

The risk tolerance of the investors

The time horizon preferred by investors for investment

RESEARCH METHODOLOGY

Research Methodology

Research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps, the research process that are generally adopted to study the research problem and basic logics behind them. The basic steps in this research are shown in the chart below

The Research Process

The research consisted of two stages. In the first stage, a survey was conducted to collect the data about the people. The second stage involved analysis of the data collected in the first stage.

The methodology adopted in this study is basically analysis and interpretation. Analysis of investment and fixed deposits occur at ISGEC. The statement for fixed deposits has been collected from the finance department of the company. The data were arranged, that is various items of annual reports after appropriate reshuffling were arranged to represent the form suitable for analysis and interpretation. No definite procedure of step is followed for arranging data. Generally each case involves a different procedure. However, the items are rearranged in such a way that all items needed for calculating the total fixed deposits easily available in the company.

The structure of FDs measures the relationship between items in a set of financial statements at a particular date. Financial Analysis is basically concerned with interrelation of different items at a particular point of time that is the date of financial statement. Thus, for this project, structural FDs for successive period are calculated in order to see the trend in the relationship of different items during the period of study. Though, significant structural FDs can be calculated from various standpoints, the classification by functions has been taken up for the purpose of study. The FDs have been compared to the standards, norms of the FDs in the industry and secondly, a horizontal analysis has been carried out suitable conclusions have been drawn, but these views, ideas and opinions are based on the analysis, comparison and the study of the trend.

RESEARCH DESIGN

For analyzing the financial statement of SML ltd. Descriptive research design has been taken as the research has got very specific objective, clear-cut data requirements. The research design in this case is a comparative design throwing light on all points and prepared keeping in view objective of the study and the resources available. In this attention is on the following:

Formulating the objective of the study (what the study is about and why it is being made?).

Designing the methods of data collection.

Selecting the sample (here it is how much material will be needed). Collecting the data (where can the required data be found and with what time period data should be related?).DATA ANALYSIS AND INTERPRETATIONOnce the data has been collected it should be analyzed very carefully. Data should be converted in to the short form with the help of coding, tabulation, and drawing graphs.

PREPARATION OF REPORT

Finally the report will be prepared on the basis of the above research methodology.

METHODS OF DATA COLLECTION

Collection of data is the most important step in every investigation. It is basic for any analysis and source is chosen depending upon the time, resources, and purpose of investigation.

There are two types of data:

1. Primary data

2. Secondary data

Primary data collection

The data collected through primary means is based upon the personal discussion with the officers working under the finance department.

Secondary data collection

Secondary data collection is mainly based upon:

Annual reports of ISGEC

Websites:www.isgec.com Other documents and files of ISGEC.

LIMITATIONS OF THE STUDY The survey was conducted in Chandigarh and adjoining areas. The standard of living, per capita income of people, earning style, etc. of this region is different from other areas. Therefore, the inferences drawn from the survey cant be generalized.

Another major limitation was unwillingness of respondents to reveal information. Due to lack of sufficient time and hesitation to reveal information regarding their investments, it was a difficult task to extract information from them.

Time limit of six weeks were not enough .

Lack of support from the staff of reliance money.

FIXED DEPOSITS

A Fixed deposit is an investment account comprising a single deposit, for a fixed term at a guaranteed fixed rate of interest. It can he used for both short and long term investment purposes. A fixed deposit account allows depositing money for a set period of time, thereby earning you a higher rate of interest in return. Fixed deposits also give a higher rate of interest than a savings bank account.

NEED OF FIXED DEPOSITS

Fixed deposit is one of the oldest & most common methods of Investing. FDs look great because you get a decent risk-adjusted return and the principal is protected. Fixed deposits help to secure the hard earned money for a long duration. Fixed deposit is a financial instrument to deposit the money for a fixed duration ranging from 15 days to 5 years.

However we need to remember that FDs are safe only as long as they are parked in large bank. Now a day, the banks & financial market is becoming very competitive.

It is required to check up on the different types of FDs scheme available before making any fixed deposit investments, Banks offer various types of fixed deposits in India to their customers. Some banks offer a fixed deposit schemes which offer more savings & over draft facility

A regular fixed deposit can earn someone an interest: up to 8.75% and senior citizens who opt for such a fixed deposit scheme are eligible for an additional 0.5 % increase.

BENEFITS OF FIXED DEPOSITS

With fixed deposits or FDs as they are popularly known a person can invest an amount for a fixed duration. The banks provide interest rates depending on this loan amount and the tenure of deposit.

The option to withdraw the deposit at any time before maturity without any difficulty

Fixed deposit is secure form of investment that means your money would be 100% safe.

We can avail loans up to 85% of the principal

Variable deposit periods ranging from 6 months to 120 months

We get interest once in 6 months

A minimum opening deposit of Rs. 1000.00 is required. Deposit can he made in multiples of Rs.100/-

We can choose how frequently we want to receive our interest payments:

Maturity

Yearly

Half yearly

Quarterly

Monthly

The banks may not always tell you the full story. Therefore it is important for us to go deep into any fixed deposit Rate of .interest and make the right choice.

benefits

Safety:

FDs have conventionally been the premier choice for investors with a low risk appetite; assured returns is the key factor which attracts investors towards deposits. Stick to FDs of the highest credit rating i.e. those with a AAA rating even if their rates seem modest vis--vis those offered by company deposits. The fixed deposit of reputed banks and financial institutions regulated by RBI (Reserve hank of India) the banking regulator in India is very secure and considered as one of the safest investment methods. Regular Income:

Fixed deposits earn fixed interest rates for their entire tenure, which is usually compounded quarterly. So, those who want an income on a regular basis can invest into fixed deposits and use the interest rate as their income. This makes a fixed deposit very popular way of investing money for retirees

Saves Tax:

With the directives of the income tax department stating that investment in fixed deposits up to a maximum of Rs.l00000 for 5 years are eligible for tax deductions under section 80C of income tax act fixed deposit have again become popular. Fixed deposit save tax and give high returns on invested money.

Liquidity

Find out how your FD times on the pre-mature encashment front i.e. how easily can your investment be liquidated Also enquire about the penalty clauses, e.g. do you suffer a loss of interest and or principal amount. Compare how various fixed deposits rank on this parameter and pick the best deal: thereby try to minimize the impact of illiquidity which is typically associated with fixed deposits.

PRECAUTIONS

The precaution one should take while making such investments:

Company Fixed Deposits:

Company fixed deposits are not considered as safe as fixed deposits from leading banks and financial institutions regulated by the RBI. So, if a company runs into losses or goes bankrupt the money invested into its fixed deposit can be lost. To lure investors, such companies offer a fixed deposit sit interest rate which is much higher than those offered by banks. Before investing in any company fixed deposit it is advised to check the credentials of the company

Premature ending of Fixed Deposits:

Banks will impose a penalty if you break your fixed deposit before the maturity period. Make sure you get the facts right about this thing. How the bank calculates this penalty and whatll charge will it levy when you break a fixed deposit should he noted carefully.

Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on deposit earns a fixed rate of interest according to the terms and conditions that govern the account. The actual amount of the fixed rate can be influenced by such factors at the type of currency involved in the deposit, the duration set in place for the deposit and the location where the deposit is made.

The most unusual characteristic of a fixed deposit is that the funds cannot be withdrawn for a specified period of time. In most cases, fixed deposits carry duration of five years. During that time, the money remains in the account and cannot he withdrawn for any reason. Individuals, corporate entities, and even non-profit organizations that wish to set aside funds and limit their access to the funds or a period of time often find that fixed deposits are a simple way to accomplish this goal. As an added benefit, the monies in the account will earn a fixed rate of interest regardless of any fluctuation in interest rates that apply to other types of accounts.

However, both these benefits can also turn into disadvantages under certain circumstances. Because the money cannot he withdrawn until the duration is complete. The funds cannot be used ever in emergency situations. Changes in the going interest rate may also rise to a point above and beyond the interest rate applied to existing deposits. This means account holders are actually earning less interest with fixed deposits than with other types of loans and accounts.

While the interest rate on fixed deposits cannot be changed, there is sometimes a way to work around the issue obtaining use of funds in an emergency situation. At times, the lending institution where the fixed deposit is placed may be willing to extend a separate loan to the account holder, using the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch.

Fixed deposits are credible way to make a return on investment that is somewhat higher than a standard savings account. The use of fixed deposits can also be helpful when working with various types of currency. By establishing what is known as a Foreign Currency Fixed Deposit or FCFD. It is possible to choose the type of currency involved in the deposit and lock in a rate of interest. If the choice of currency is a good one, this means the investor can enjoy a healthy fixed deposit currency rate for the duration of the deposit and earn more than with a standard fixed deposit strategy. However, going with an FCFD does contain a slightly higher amount of risk, since the funds deposited must be converted to the currency of choice and then converted back when the deposit is fulfilled. If the currency did not fare well in the interim, there is some chance of obtaining a loss, due to the changes in the rate of exchange from the time the fixed deposit was activated until the time the deposit is considered complete.

ABOUT FIXED DEPOSIT INVESTMENTSTraditionally, bank deposits have been the favorite investment avenue for Indians. Close to 20 per cent of household savings are invested in bank deposits. And not without reason. Bank deposits continue to hold fort. Even today % total investment divided into two forms which are shown below:.Table 1: Percentage or savings as investment in India

BASIS

Investment in the form of fixed depositInvestment in the other form

Percentage of savings as investment in India20%80%

Source self constructed

Bank deposits do not have the excitement surrounding other investment avenues like equity shares or real estate investments. But bank deposits serve the purpose of preserving capital which is the most wanted at certain times.

Bank deposits are most sought after for this purpose. They give a stable and fixed return on the invested money. Traditionally, the interest rate is fixed during the tenure of the fixed deposit. Some banks now a day have gone for the reduction in existing bank deposits too, when the market interest rates come down.

The income comes to us the form of interest for the deposit amount; the principal (initial amount invested) is returned back to us at the time of maturity. There are options to receive the interest on a monthly/quarterly / half-yearly or yearly basis. In case we do not need the interest to come to us during the term of the deposit, we can opt for the cumulative deposit option, where the interest is credited to the deposit and earns additional interest. Interest is generally compounded on a quarterly basis.

The historical average return from fixed deposit in India is approximately 8% for long-term deposits (5 years). The high and lows have been in the range of 13% to 4%.

As regards Capital appreciation, it does not apply to bank fixed deposits. Only the principal invested is returned back at the time of maturity.

Talking about the risk involved, the main reason for investment in bank deposits is the safety of the principal. The capital (only up to Rs 1.00.000/- though) has the highest safety compared to any other investment as it is guaranteed by the Deposit Insurance & Credit Guarantee Scheme of India. All banks operating in India are covered under this scheme.

More than this guarantee, the close monitoring that RBI has on all banks in India is a big advantage to the safety of the investors in fixed deposits.

The risk faced when investing in bank deposits is the interest rate risk. This is associated with the lost opportunity to invest in an instrument that has a higher return. Getting out of a fixed deposit can be costly (up to 1% of the principal) when we exit prematurely. So we may have to forgo potential earnings when the interest rate has risen only by about 1%.

The highest risk faced with fixed deposits is the effect of inflation. The real return after adjusting for inflation is very less or sometimes negative for fixed deposits of banks. This is a big burden, particularly for retired people, who have invested their retirement proceeds to get regular income. Their income may be regular and steady but the moneys worth keeps going down during the tenure of the fixed deposit.

As per the liquidity factor is concerned, bank deposits have good liquidity. They can be closed and the principal got back within a few hours in some banks to a couple of days in others.

The other option is to take a loan on the fixed deposit. Banks lend up to 90% of the principal of the deposit. Interest charged for this is only about 1 to 2% and only for the period that we have used the cash (The feature works like an over-draft against the fixed deposit).

Talking about the tax treatment, bank fixed deposits are not tax efficient. The interest is taxed. Also there is no benefit from making the investment.

There are the 5 years bank deposits (tax saving) that give benefit under section 80C of the IT Act. But the benefits such as partial withdrawal or closure, and loan facility are not available. The deposit rates are also lower compared to the normal fixed deposits. This effectively negates the tax saved.

The bank deposit primarily serves us to preserve capital. Banks now-a-days have added a lot of additional benefits to the traditionally benign service. Retired people could make the best use of this avenue for securing a fixed and steady income.

REASONS AS TO WHY PEOPLE INVEST IN FIXED DEPOSITS:

Low riskBanks deposit come with very low default risk and offer security of your capital. The real risk to these products is in the form of inflation. This is because if interest rates are low, the post inflation returns on FDs may be negligible or even negative

Capital guaranteeYour deposit of up to 1 lakh in any bank is protected under RBIs Deposit Guarantee Scheme. This means if you place your deposit in a bank that defaults , you will get up to Rs 1 lakh of your money in the deposit

Fixed returnsInterest rate on banks deposits is fixed for the entire tenure of the deposit. FDs of different tenures carry different interest rates. Generally , higher the tenure , higher is the rate

LiquidityYou can invest in a FD for as little as a month too. Thus it provides ample liquidity as you can place yours surplus for the short term. Besides, banks deposits can be prematurely withdrawn. However, you will need to pay a penalty of 1 per cent of the interest rate.

With high interest rates at present, FD returns have become attractive. For a longer tenure deposit (two or three years), you can even get a rate of around eight to nine per cent per annum. How ever, rates vary from banks to banks

Choosing the right Fixed Deposit

Before going for a fixed deposit, we need to consider a few things. Different banks have different FD features as well as interest rates and tenure. Therefore, before investing in a FD, it is required to compare the features of the FDs offered by different banks. First, decide the amount that is intended to invest in FDs .The next thing that to decide is the deposit period. Once it is decided, then compare the rate of interest offered by various banks on the given deposit amount and period. However the rate of interest is not the only considering factor, there are other factors to consider before investing in fixed deposits. One can avail the option of premature withdrawal of the deposit amount. Different banks may have different rules on the premature withdrawal. So, we need to consider those too.

ABOUT COMPANY FIXED DEPOSIT

CompanyFixed Depositmarket in Indiahas an interesting phase of evolution. It basically grew out of the need of Corporate Sector for raising short term finance and requirements of small investors to earn superior returnsas compared toreturns offered by the Banks. The concept of company fixed deposits was started in India in 1964 by Bajaj Capital Ltd. by launching first ever CompanyFixed Depositof Oberoi Group - East India Hotels Ltd.(now EIH Ltd.).The success of East India Hotels prompted others private andpublic sector companieswhich started accepting deposits from public.

Since then company deposit market has grown byleaps and bounds. Today, company deposit market has grown to approximately Rs.25, 000 crores. Hundreds of top companies belonging to reputed industrial houses like Tata, Birla, Escorts, Godrej etc. and government companies like HUDCO are accepting deposits from public. The number of depositors has increased to around 5 million.The benefits of company deposit are numerous like superior returns from reputed companies, fixed and assured returns, premature encashment, simplicity of transactions, TDS benefits, wide choice, all these features have made company deposits a preferred instrument ofinvestment.

Features:

CompanyFixed Deposits are non transferable that means there is no fear of FD receipt being stolen. In case it falls into wrong hands, it cannot be misused. The FD holder in such a case should write to the company which shall issue duplicate deposit receipt upon execution of an indemnity and cancel the previous one.

No income tax is deducted at source if the interest income is up to Rs 5000/-in one financial year. One can spread hisinvestmentin more than one company, so that interest from one company does not exceed Rs. 5000/-

Further, advantage of investing in company fixed deposits is that one can analyze the company before investing in it because companies accepting deposits are old-established reputed companies with proven track records.

It is also important that companyfixed depositshould be made for short term, i.e., tenure should be for 1-3 years depending upon the rate of interest. This will help the investor to switch to other company if need be

Recently, nomination facility has been introduced in company fixed deposits.

Where Not To Invest Companies which pay a rate of interest higher than 14%

Companies which are not paying regular dividends to their shareholders. New companies belonging to first generation of promoters which have yet to prove their credit worthiness.

It is best to avoid private limited companies, and partnership firms and other un-incorporated bodies. Such companies are under no obligation to publish their balance sheets working results and it is, therefore, very difficult to judge their performance.

Companies whose balance sheets show accumulated losses.

Companies with a poor liquidity position and belowinvestmentgrade rating.

How to Choose A Company for Making Deposit

There are many companies operating in Company Deposit market. Investors, however, have to be careful while selecting a company for investing their hard earned money. Following is a checklist for selecting good companies:

Period of DepositIdeally theinvestmentshould be for 1 to 3 years depending upon the rate of interest.

Periodic Review of the CompaniesThe performance of the companies should be reviewed at maturity i.e., whether to renew or reshuffle the deposit. A watch should also be kept over the companies by checking their share prices, annual reports and other news reported in the commercial columns of daily papers.

Limits on raising Company DepositsManufacturing companiesare permitted to mobilize deposits as indicated below:

a. Up to 25% of their net worth from their public; and

b. Up to 10% of their net worth from the share-holders and others.

GUIDELINES TO INVEST IN FIXED DEPOSIT

1. Check the premature withdrawal penalty before investing.

Try and invest the money in a tenure within which you will not need the money. But definitely check on the charges applicable in case you need to withdraw in an emergency.

2. Check the frequency of compounding of the deposit, when comparing two deposit offerings.

A rate which might seem higher upfront might have a lower return if it is not compounded as frequently. For example; Bank X offers a one year deposit at the rate of 9% compounded half yearly which results in an yield of 9.2%. While Bank Y offers a one year deposit at the same rate of 9% but compounded quarterly which results in a yield of 9.3%? You will earn moreinterest on fixed depositsat Bank Y because your return is compounded annually.

3. Split your Fixed Deposit investments to avoid TDS deduction.

If the interest earned is more than Rs. 10,000 in a single branch in one calendar year then TDSwould be deducted. By splitting your deposits across various banks or branches you can avoid this deduction.

4. Always appoint a nominee.

When youopen afixed depositappoint a nominee. It is essential for a quick and hassle free transfer of accounts. The nomination facility enables the bank to release the deposit amount to the nominee without insistence on a succession certificate or probate of the will from your legal heirs.

5. Take interest payouts based on your requirements

Most banks have many interest payout options; choose the one which suits your requirements best for example if you are retired person you could go in for monthly payments of interest.FIXED DEPOSIT IN

ISGEC HEAVY ENGINEERING LIMITED

COMPARISON WITH DIFFERENT COMPANIES

INTEREST RATE

S NO.COMPANY NAMEMIN.AMT12M 24M36M

1APOLLO HOSPITAL ENTE. LTD25000 8.00 8.258.75

2JAI PRAKASH ASSO. LTD.2000010.50 10.5011.00

3ANSAL PROP. LTD & INFRA LTD.50000 11.50 12.0012.25

4FUTURE PLOYSETRS LTD20000 9.00 9.5010.00

5J.K.PAPER LTD10000 8.00 8.2508.50

6GATI LTD21000 9.50 9.5010.00

7JK LAKSHMI CEMENT LTD20000 8.00 8.508.50

8GUJRAT APPOLLO EQUIPMENT LTD10000009.00 09.5010.00

9FENNER INDIA LTD200008.00 08.2508.50

10ISGEC HEAVY ENGINEERING LTD500006.007.0009.00

COMPARISON WITH DIFFERENT BANKS

INTEREST RATE

S.No.Bank1 Year to < 2 years2 Years to < 3 years3 Years to < 5 yearsMore than 5

1Allahabad Bank8.75%8.50%8.50%8.00%

2SBI8.75%9.25%8.25%8.50%

3Axis Bank9.25%8.50%8.50%8.50%

4Bank of Baroda9.35%9.00%8.50%8.50%

5Bank of India9.25%8.25%8.25%7.00%

6ICICI9.25%9.25%8.75%8.75%

7Canara Bank9.10%9.25%8.75%8.75%

8Central Bank of India9.25%8.75%8.50%8.50%

9Dena Bank9.00%9.00%9.00%8.75%

10HDFC Bank8.50%9.25%8.25%8.25%

PROCEDURE TO MAKE A FIXED DEPOSIT RECEIPT

This can be divided into 2 parts i.e.:

Fresh deposit

Renewal deposits

SERVICES AT A FIXED DEPOSIT DEPARTMENT

1. Front office services Acceptance of applications / request forms

Verify completeness of the application

Provide receipt on submission of FD application form

Data capture

Deposit of Cheques / demand drafts

Query handling

FD information center

Postal return management

Communication to investors on FD maturity

Receipt for the closure/maturity payments

2. Back office services Quality checking of data entered at front office

Update FDR system

Generate FDR & register

Generate interest warrants monthly, quarterly, half-yearly arid annual

Generate interest warrant register

Printing of FDR /interest warrants/maturity payment

Affix revenue stamp on FDR and sign across the same

Data for interest / brokerage/maturity payment to be sent to bank

3. Query handling

Change in address & bank details

Change in status (minor to major)

Change in name of FD holder

Request for nomination / change in nomination

Request for duplicate FDR

Request for issue of duplicate interest warrant

Request for premature withdrawal of FD

Request for duplicate TDS certificate

Request for change in mode of interest payment

Request for remittance of interest

Request for renewal of FD

Receipt of corporate documents

Non receipt of interest on FDR

Non receipt of TDS certificate

Revalidation of interest warrant

Revalidation of brokerage incentive warrant

Loss of FDR issued before maturity

Loss of FD (already matured)

Transmission of FD

Receipt of interest / brokerage warrant for change in bank details

Receipt of Interest / brokerage warrant for change in Name

Receipt of form 15H / 150 / 15 AA for tax exemption

Receipt of copy of PAN / Form 60 /61

4. Banking / reconciliation

Debit reconciliations of FDs

Bank data and processed data are captured in reconciliation format

Segregating the information such as

Cheques issued but not encashed

Cheques issued and paid

Bank charges

Cross credits

Amount funded

Closing balance

Reconciliation of FDS accounts

Credit reconciliations of FDs

FD subscription reconciliations are done to ensure that the credit has come for each purchase processed

5. Analytical reports

Maturity statement for deposits

Notice of maturity letters for FDA

Existing FDR register

Analytical FD register

Interest accrued but not due (cumulative deposit)

Unclaimed depositors report

Existing 15H / 15G submitted report

No tax register for a period

Mailing list generation

Triggers to client to inform the interest payable

Other customized MIS as desired by Client

ANALYSIS OF THE FIXED DEPOSIT AT ISGEC

(AMOUNT RS LACS)

COMMENTS

These depict the fixed deposit at the month end , we can see an consistent trend over the period of time which is an excellent sign for the company that the deposits are consistent at a steady pace and it also shows the satisfacetion level of the investors with company.

(AMOUNT RS LACS)

COMMENTS

This graph again shows that over the period of 3 years from 2008-09 onwards to 2010-11 onwards there has been an increase in the average fixed deposits for the 3 years. In 2008-09 it stood at 4521 lacs while it increased drastically to 7446 lacs in 2010-11.

This again is an excellent sign for the company and shows about the goodwill of the company among its investors.

(AMOUNT RS LACS)

COMMENTS

This data is for the time period from may 11 to apr 12. This is to show the amount of deposits which the company have renewed in these month. There is varitaion in the renewal amounts, in some months its very high and in some months its very low. This is basically related to the past fixed deposit rates offered by the compan. In the month of greater renewal for example nov 11 we can say that all those fixed deposit which matured in this month we deposited at a very high rate at the time of deposit by the investor. Which is the reason why there is so much flucuations.

(AMOUNT RS LACS)

COMMENTS

Premature payments means the payment which the investor takes before the date of maturity. We see that the amount of premature payments is very less because very less premature payment is taken by the investor, often in case of emergency this is done so. Below is the graph which depits what are the reasons for the premature payments.

COMMENTS

If we see the reasons because of which premature payment takes place then they can be broadly be divided as for

Domestic needs

Plot purchase

Marriage

Medical treatment

From the above mentioned reasons the maximum reason due to which the premature payment takes place is due to the domestic needs of the family. The second main reason why people take premature payment is to purchase a plot and lastly due to marriage, very few people take it because of construction or medical treatment.

COMMENTS

Payment due is basically what amount that is due in that particular month as a whole and renewal as a % of payment due means that how much % is renewed in terms of the payment that is due. So when we see the above shown graph then it is clearly shown that a very high % of renewal takes place in realtion to the payment which is a very good sign for the company, that the investors have faith in the company and are ready to re invest there money in the company.

(AMOUNT RS LACS)

COMMENTS

This graph depits the fresh deposits that are made in comparision to the payments which are made to the investors, this graph is a true indicator to show the trust of old as well as new investors on the company. We see that the amount of fresh deposit that comes in is much greater than the amount of payment that is made to the investors. Which is a very good sign for the company as well. (AMOUNT RS LACS)

COMMENTS. When we see the trend over the past 3 years for the amount of fresh deposit that is coming in to the amount of payments that have been made then we will see that more and more investors prefer to find it safe to keep their money in the company and hence rather than taking payments they prefer to re invest the amount in the company. This is a favorable sign for the company that it gets to deal with the same old trusted investors as well.

FINDINGS OF STUDY

1. As we see last year 2011-12 the fixed deposits at the month end was in decreasing trend .This shows not pay a good return to the investors. 2. Over the period of 3 years from 2008-09 onwards to 2010-11 onwards there has been an increase in the average fixed deposits for the 3 years. In 2008-09 it stood at 4521 lacs while it increased drastically to 7446 lacs in 2010-11.

This again is an excellent sign for the company and shows about the goodwill of the company among its investors.

3. This data is for the time period from may 11 to apr 12. In the month of greater renewal for example nov 11 we can say that all those fixed deposit which matured in this month we deposited at a very high rate at the time of deposit by the investor. Which shows good sign of the company.

4. We see that the amount of premature payments is very less because very less premature payment is taken by the investor, often in case of emergency this is done so.

5. If we see the reasons because of which premature payment takes place then they can be broadly be divided as for

Domestic needs

Plot purchase

Marriage

Medical treatment

From the above mentioned reasons the maximum reason due to which the premature payment takes place is due to the domestic needs of the family. The second main reason why people take premature payment is to purchase a plot and lastly due to marriage, very few people take it because of construction or medical treatment.

6. Payment due is basically what amount that is due in that particular month as a whole and renewal as a % of payment due means that how much % is renewed in terms of the payment that is due. So when we see the above shown graph then it is clearly shown that a very high % of renewal takes place in realtion to the payment which is a very good sign for the company, that the investors have faith in the company and are ready to re invest there money in the company7. Wesee that the amount of fresh deposit that comes in is much greater than the amount of payment that is made to the investors. Which is a very good sign for the company as well8. When we see the trend over the past 3 years for the amount of fresh deposit that is coming in to the amount of payments that have been made then we will see that more and more investors prefer to find it safe to keep their money in the company and hence rather than taking payments they prefer to re invest the amount in the company. This is a favorable sign for the company that it gets to deal with the same old trusted investors as well.

9. If we compare with different companies presently ISGEC is lag behind in terms of giving returns to the investors.Head of FD department says that low return is not a bad position of a co. because co. have sufficient funds to pay the bebts and this is good for any company,At that time there is no need to receive money from investors.

10.In last if we compare returns with banks ICICI bank give 8.75%(more than 5 year time period) interest to the investors which is higher than other banks.On the other hand Bank Of Baroda pays 9.35% (for one to two year) to the investors which is higher than other banks.

CONCLUSION

ISGEC is a cash rich company

It has an immense base of investors

The investors have full faith in the company

The goodwill of the company is very strong

The company is able to pay back its investors on time

The interest rate offered by the company is reasonable compared to other companies and banks on the whole

The company has a good past record of offering a great rate of interest to the investors

The company takes care of its investors and makes sure that they never face any difficulty.

RECOMMENDATIONS

On the basis of my work in the fixed deposit department I have a few recommendations for the department.

There is huge amount of paper work that is involved in the department though the paper work is important but it should be minimized as possible

Certain pending work which pile on till the end must be completed on a day to day basis so that they do not become a burden on the month end

Rather than manual filling of the fixed deposit form there must be customized filling of form at the front desk, which makes the data processing even faster.

BIBLIOGRAPHY

Gupta shashi k. & Sharma R.K. Financial Management.

Khan M.Y. & Jain P.K. Financial Management

Maheshwari S.N. Management Accounting & Financial control

I.M. Pandey: Financial Management; New Delhi, Vikas Publications; Eighth Edition

Prasanna Chandra: Financial Management, Theory and Practices

Khan and Jain; Financial Management; New Delhi, Tata Mc Graw Hill Publications; 1993

R.K. Sharma; Management Accounting and Business Finance; New Delhi, Kalyani Publication; 1993

S.P. Gupta; Statistical Methods

JOURNALS

Journals of ISGEC

WEB SITES

www.google.co.in www.enwikipedia.org www.isgec.comQUESTIONNAIRE

1. How much FD is at present done at end of the month

a) 1000

b) 2000

c) 3000

d) more than 30002. In which the investment pattern customer like to invest ?a) F.D. b) Mutual fund c) Insurance d) Stock (shares) e) Any others3. What is the Average of the Fixed Deposit for the last years ?a) 2008-09

b) 2009-2010 c) 2010-2011

4. How much of FD are renewed for the years ?a) 2011

b) 20125. How much of FD are premature paid for the years ?a) 2011

b) 20126. What is the reasons for premature payment of FDRs ?a) Domestic needs

b) Marriage c) Plot purchase

d) Medical Treatment 7. What is the percentage of renewal for the current year ?________________________________________________8. What is the percentage of fresh deposit and payment for the last years?a) Fresh deposit

b) Payment 9. What is the average fresh deposit and payment monthwise for the last three years?a) 2008-2009

b) 2009-2010c)2010-2011

SARASWATI

INDUSTRIAL SYNDICATE LTD.

ISGEC

(YNR)

U.P.STEELS MUZZAFFARNAGAR

SARASWAI SUGAR MILL

(YNR)

IJT

NEW DELHI

Interpretation and report writing

Analysis of data

Collection of data survey

Research design including sample design

Review concepts and theories

Define the research problem and its objectives

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