Galaxy Project 2

ANALYSIS OF IMPACT OF RECESSION IN GALAXY MACHINERY PVT LTD

ACKNOWLEDGEMT

I take this opportunity to express my deep sense of

obligation to the management of Galaxy Machinery Pvt Ltd.

It is a great pleasure that, I express my sense of gratitude to

all the officials of Galaxy Machinery, especially Mr.Shreenath

Deshpande (Fin Mgr) for their valuable guidance and constant

encouragement in the preparation and finalization of this project

Report.

I am very grateful to Mr.Sachchidanda Mekkalagi. My

Company’s guide who constantly guided me and inspired me in

completion of this work.

I would like to thank Mr.Ashwinkumar.B principal, SAHE

College, and Belgaum for giving the opportunity to undertake this

project.

I am also grateful to my guide Prof.Pradeep. Sangam for

helping me throughout my project.

Last but not the least, I thank one and all who directly or

indirectly helped me in the various other aspect of this project work.

SAHE, Institute of Management & IT Education, Belgaum1


INDEX

SAHE, Institute of Management & IT Education, Belgaum

Sr.no Chapters Page no.

1 Introduction 5

2 Company Profile 10

3 Recession Effects on

company

38

4 Analysis and

Interpretation of Data 51

5 Findings, Suggestions

and Conclusions 63

2


TABLE OF CONTENTS

SAHE, Institute of Management & IT Education, Belgaum

Sr. no Graph Titles Page

no

1.1 Sales for the year 2004-05 43



1.4 Sales Turnover 46

1.5 Product mix sales 47

1.6 Company Performance 49

1.7 Region wise Sales 2007-08 53

1.8 Region wise Sales 2008-09 55

1.9 Company Expenditures 57

3


EXECUTIVE SUMMARY

The term “recession” is often used during the times of wide

economic hardship regardless of how long it lasts. The year 2008-09

will have a great impact of the global downfall in Industrial activity.

Generally, the capital goods manufactures are the first, partly to be

affected when the recessionary trend commences, this drop in sales.

A Recession is a “difficult economic condition when an economy

shrinks. It is defined as “a period of general economic decline;

specifically, a decline in gross domestic product” GDP for two or

more consecutive quarters”.

Due to this recession effect on company there is a decline in overall

growth rate during the year and the company did not attempt to export

any machines to overseas customers for these reasons. And therefore

the amount of funds raised during the year is relatively less as

compared to previous year.

The future plan of the company is to develop the centers in company

and research & development activities of Bangalore will be

appropriately equipped to develop the prototype machineries, and

planned to be launch in the market.



CHAPTER-1

INTRODUCTION

1.1 ABOUT THE TOPIC:

A Recession is a “difficult economic condition when an

economy shrinks. It is defined as “a period of general economic

decline; specifically, a decline in gross domestic product” GDP for

two or more consecutive quarters”.

However the term “recession” is often used during the times of

wide economic hardship regardless of how long it lasts. Company

incorporated in 1991 with an object to design, develop and

manufactures of CNC turning machines in India.

The year 2008-09 will have a great impact of the global

downfall in Industrial activity. Generally, the capital goods

manufactures are the first, partly to be affected when the recessionary

trend commences, this drop in sales.

1.2 OBJECTIVES

1.2.1 A Comprehensive study of impact of recession towards

Galaxy Machinery.

1.2.2 To understand business cycle as they relate to all Company and

its customer and suppliers.

1.2.3 How to protect business during Recession.

1.2.4 Minimize the effects of a Recession on companies.

1.2.5 Suggest methods to make business recession proof.



1.3 PURPOSE OF STUDY

The study is analyzed to estimate trends in series.

1.3.1 How it is affected

1.3.2 What types of problems faced

1.3.3 To analyze the steps taken to overcome from upswing

1.3.4 To increase branch profit

Moreover, the report found that upswing has affected all

small, medium and large industries and 30% of industries still had

negative margins in the first quarter of the year.

1.4 SCOPE OF THE STUDY

“Makes the company and its location be innovative, exciting and

stimulating by producing brand products”.

The study was aimed to understand and analyze the

objectives of recession and maintaining the company delinquency

level.



1.5 METHODOLOGY:

1.5.1 Primary data will be collected through-

1. Personal interviews with the concerned departmental and

Utilizing the feedback data for the project report with

Previous years.

2. Questionnaire Method will be carried out

through out the project to understand the Company’s daily

transactions.

3. Observing figures of previous with current year.

1.5.2 Secondary data will be collected through-

1. Internet sources that is through Google Search and visiting

relevant Websites.

2. Books and articles on recession.

All employees are very committed to their work. It has

created its own brand name because of it's quality. The distribution

network is very strong. Quality is the hallmark of the organization.

They are succeeding in manufacturing it's standard of product as well

as satisfying their customer requirements.

They are conducting inspection in each and every process of

production. It is a zero lies, zero brides, and zero tax evasion

company.

Safety campaign is conducted regularly for employees. They

conducted highly ethical Business Standards right from the in a

production of the company to day today operations.



1.6 RECOMMENDATIONS

In order to maintain good quality in market, the company

needs to be very competitive and should adjust to the changing market

environment.

1.6.1 They should utilize the equipments to maximum extent.

1.6.2 Improvements regarding the price and service.

1.6.3 They should utilize the available resources into their full

extent.

1.6.4 Company website should be developed to provide

Information as well as to have better relations with outside.

1.6.5 They should attract new customers to acquire market share.

1.6.6 They should develop good infrastructure inside the

company.

1.7 LIMITATIONS OF THE PROJECT

1.7.1 The study was limited to a period of 30 days only, so the

Critical Information not collected.

1.7.2 Some information relation to topic is confidential, which

could

Not be disclosed to outside persons. Thus valuable

information



Could not be obtained.

1.8 CONCLUSIONS

After recommending certain suggestion and steps, it is clear

that machine tool industry is booming due to increase in automotive

industry and the dealers and customers are satisfied with the quality

and price of the product. The organization study was really good

learning experience and challenging its own way.

During the study, I come to know about the functions of

various departments in the organization, organization structure and

how everyone works as a team in order to achieve organization goal.

It helped me in analyzing as well as it was a great practical experience

that every management student is exposed to.



CHAPTER-2

COMPANY PROFILE

GALAXY MACHINERY PVT LTD:

2.1 BACKGROUNDS AND HISTORY

Company is incorporated in 1991 with an object to design,

develop and manufactures of CNC turning machines in India. Galaxy

Machinery Pvt Ltd having its Registered office at plot no 31, surveys

no 336/1, Udyambag Belgaum-590008, Karnataka state. This is the

first manufacture unit which set up at plot no 22, udyambag, belgaum

and with the dream of having product capacity of about 20 CNC Lathe

machines per month.

The company has started its First Export in 1997 and their

products are well spread in many countries USA, South Africa.

Government of Karnataka through the Meritorious Top Exporter

Award in its category had recognized the company for its export for

2000.Galaxy introduced new MIDAS series of CNC Turning Centers

which are precise and fastest in the country and when the prestigious

awards for the best design of the country successively in 1998 and



2001. It took nearly 3 years to come out of the teething trouble. It

launches its First product at the National level exhibition, IMTEX’ 95

at Delhi.

2.2 FEATURES

1. Manufacturing the product of required quality and quantity

2. Keeping a cheque on joint venture Support to service

3. Handling the man power in a systematically

4. Providing safe working atmosphere

There are 6 Board of directors of Galaxy Machinery Pvt

Ltd.

1. Elango .s

2. Shri Shreenath Deshpande

3. Shri R. Selviraj

4. R.G. Prabhakar

5. Ananth Huilgol

6. Sachin Shirgaokar

The Indian Machine Tools manufactures a range of products

such as Metal cutting and Metal forming machine tools, both

conventional and computer numerically controlled (CNC). IMTMA

believes that CNC will be the growth a driver for the machine tool

industry.



2.3 OBJECTIVES OF THE COMPANY

1. To develop the business to whole globe

2. To give better performance and develop healthy business

relations with the outsider.

3. To provide healthy benefits to all employer like incentives,

Medical facilities.

4. To maintain consistency in quality

5. To cater to the customer in an effective manner and to utilize

the facilitations and the convince of a bigger metropolitans

cities.

2.4 EXPORT

The company has started its First Export in 1997 and its

products are well spread in many countries USA, Europe, and South

Africa. The Galaxy Machinery had been recognized for its export by

govt of Karnataka through the Meritorious Top Exporter Award in its

category for 2000.



The company receives highest export orders for Turning Centers,

Electro discharge machines and Presses witness.

These 4 machines accounted for total export in 2006. In International

competitive field German Manufactures proved as WORLD

CHAMPION in exports in 2006.India ranks 19th in world machine

tools in production.

2.5 VISION STATEMENT:

To become the biggest machinery tool builder globally and to

maintain good relations with the customers by producing quality

machines and to provide better benefits to the employees.

2.6 MISSION STATEMENT:

To utilize leading edge technology and methods to improve

efficiency performance and productivity and to employ people of

integrity who poses senior skills and knowledge.



2.7 ORGANISATION DESIGN

Present organization structure

Board of Directors

Executive Director

(Shreenath Deshpande)

Senior Manager

Manager

Deputy Manager

Senior commercial officer

(Sachchidananda Mekkalagi)



2.8 MAJOR MARKETS

India rising demand for machine tools in the context of

currently low production domestic capacities, was not able to sustain

the domestic demand for machine tools.

Thus increased capacity reducing the heavy imports would meet

advantage of reducing low cost. India has a comparative advantage

over competing economies in terms of availability of engineering and

design skills that are either missing in competing countries or are

expensive.

India is rated higher in terms of manufacturing capacity and

availability of quality engineers. This design strength gives the Indian

Machine Tool industry a competitive advantage.

The Indian machine tools industry has had a heavy dependence on

imports over the years. The increasing imports imply that Indian's

domestic production has not kept pace with the growth in demand for

machine tools, indicating a potential for investment in domestic

capacity.



Key Players In The Machine Tool Industry:

Product categories Players

CNC Lathe Ace Designers

Ltd

Lakshmi Machinery

Ltd

HMT Machinery

Works Ltd

Grinding

Machines

Perished

Machinery

Ltd

Micrometric Grinding

Technology Ltd

Micrometric

Grinding

Technology

Ltd

Grinding

Machines

Parishudh

Machinery

Ltd

Micrometric Grinding

Technology Ltd

Micrometric

Grinding

Technology

Ltd

Matching Canters Bharat Forge Ltd Ace

Manufacturing Ltd

Vertical Turning

Boring

HMT Machinery

Works Ltd

Premier Automobiles

Ltd

HMT Machinery

Works Ltd

Gear Cutting Premier HMT Machinery



Automobiles Ltd Works Ltd

MARKET SHARE ANALYSIS

Major

Products

Companies Market Share %

Machine

Tools

Kennametal Widia India

HMT Machines Tools

Motor Industries Company

HMT Machine Tools

Automatic

Kobic Extrusion Technique

IFBI Industries

Premier Automobile

Laxmi Machinery Ltd

6.00%

2.11%

1.41%

1.22%

1.22%

0.15%

57%



Some of the International Players in Machine Tool Industry Are:

1. Yamazaki Mojak Corporation (JAPAN)

2. Unova Incorporation (USA)

3. Trump Group (Germany)

4. Komtsu Automation Incorporation (USA)

2.9 A REVIEW OF CHOICES IN DESIGN

The present organization structure is vertical in shape. It is

used in many companies. Here each Commercial officer should

receive order and submit the report to their respective senior officers.

Then all the Department heads will report to one-person i.e. executive

director.

2.10 CRITICAL REVIEW OF THE STRUCTURE

1 Smooth flow of policies and procedures

2 Higher flow of control over the subordinates



2.11 BUSINESS LEVEL FUNCTIONS AND PROCESS :

2.11.1 MARKETING DEPARTMENT

The marketing department is under Mr.Elango.S. He is also the

director of the marketing department.

The following is the structure of the marketing department.

EXECUTIVE DIRECTOR

(Elengo. s)

MANAGERS

DEPT. MANAGERS

SENIOR MANAGERS

ENGINEERS

CO-ORDINATORS



What Do They Market?

They market CNC Machines and other machine

Tools.

4P’S:

1. Product:

Machine tool products.

E.g.: CNC lathe machines, Electro discharge machines, CNC

Turning machines.

2. Price:

Depends upon the cost incurred during manufacturing

Process.

3. Place:

According to the customers demand.

4. Promotion:

Participating in exhibitions.



2.11.2 DISTRIBUTION CHANNEL

They have their own firm indicating dealers in Aurangabad,

Jameshedpur and Delhi to distribute the product.

I) MAJOR CUSTOMERS:

1. Bharat Forge Ltd

2. Kirloskar Toyoda

3. Polyhedron

4. Hitech Enterprises

II) MAJOR SUPPLIERS:

1. Finance India Ltd

2. Quality Engineers

3. Shanti Iron and Steel

4. Financial Technology

III) TARGET MARKETS:

1. Automobile sector

2. Aerospace

3. Instrumentation



4. Defense sector

5 Other engineering industries

The esteemed vendors of the company are-

1 Bharat forge ltd

2 Kirloskar

3 Hi-Tech Gears

4 Up asana Engineers

2.12 GALAXY MACHINERY PVT LTD

1. Rate of growth 21% in April- June 2007quarter (1881.00)

sales over Jan - March 2007 quarter (1400.00 sales).

2. This plant to go into 2nd shift production to step up

production volumes and reduce customer waiting period.

The company has achieved a total sales turnover of Rs.

1881.00 lakhs in the year 2005-06 which is 21% more than the

previous year's sales turnover. The company manufactured 83 CNC

Lathe machines during 2005- 06 .The unit has shown a growth of

29.68% over the numbers manufactured in the year 2004-05.During

the year the company has registered an Export sales turnover of Rs.98

lakhs, which is 20% less than previous year.

The reason for this is that U.S.A distributor was passing through some

kind of bad, whether which ultimately resulted in his relinquishing the

distributorship of products in U.S.A. This year company has ventured



in to a new overseas market by exporting CNC Lathe machines to

Italy.

The foreign exchange earnings of the company are shown below.

* Exports to U.S.A US $ 0.68 lakhs

* Exports to Italy 1. 59 lakhs

2.13 FUNCTIONAL AREA ANALYSIS

The company includes manufacturing process, utilities

and departments, which are controlled by respective heads having

well experience and dynamic persons. The company has established

systems for its smooth operation in all departments.

2.13.1 MANUFACTURING PROCESS AND

UTILITIES:

1) Raw materials and consumables components:

Various components are necessary to make sub

assemblies, which are assembled or fitted for making a machine safe

of the company are bought out which are with special specifications

designs. Most of the components are with special specifications

designs according to the design of the machine.



2) MANUFACTURING PROCESS:

2.1) Machine tools manufacturing unit mainly Comprises of

Following activities.

1. Designing and Development

2. Components manufacturing from outside.

3 Making sub assemblies

4 Assembling the complete machine and testing to pass all

the

Standards specific tests.

5 Test as per customer's specific requirements if any

2.2) COMPONENTS MANUFACTURING:

The various components are procured from the outside

but the critical components need to be manufactured in house .The

unfinished materials is procured from outside and components of

requisite specifications are manufactured as per drawing and than

approved components are credited to store.

2.3) MANUFACTURING OF COST IRON

COMPONENTS:

First the wooden pattern is made for each component as

per the design and the mol-dias is prepared by using the patterns.

Then the costing is manufactured by pouring the molten metal in to



the mould .The raw costing is first roof machined and analyzed to the

requirement. Then they are finish machined completely to make them

ready for sub assemblies.

2.4) MANUFACTURING OF STEEL

COMPONENTS:

From the standard shapes of steel, the required bar

brocks are cut and machined as per design. Then the finish machined

are, hit and ground wherever necessary to suit the sub assembly.

2.5) MAKING OF SUB ASSEMBLIES:

The various components procured from the outside and

those manufactured in house are drawn from the stores as per the Bill

of Materials and Assembled, to make sub assemblies such as slides,

Headstocks, Tailstocks spade cartridges etc as per the sub assembly

drawings.

2.6) MAIN ASSEMBLING:

The assemblies and components are than assembled

and the electrical and other fittings including CNC panels are fitted on

the platform to make the machine.

2.7) TESTING:

The standard machines manufactured are than rigorously

tested for quality and smooth performance in the quality control

departments as per the in house standards set and machine built as per



customer specific requirements are tested as per in house standard as

well as for the specific tests based on the applications.

2.8) PACKING AND FORWARDING:

The machines are properly packed in transport worthy

packing and dispatching through transporters.

2.9) INSTALTATION:

The machines are installed at the customer's end under

supervision of company’s technician's and tested for smooth

functioning at the customers.

2.13.2 UTILITIES, REQUIRMENTS AND

AVAILABLE

1) POWER:

For the proposed project the connected load required is

65 HP and the maximum demand is 65 HP KNA. The company does

not force any difficult in obtaining the required power of connection.

Sufficiency power is available from Karnataka Power Transmission

Corporation Ltd (KPTCL).

2) WATER:



Water is not required in the process. However the water requirements

for house keeping cleaning and gardening are very merger and will be

available through in house well and City Corporation Water Supply.

2.14 DEPARTMENTS OF THE COMPANY

1. Sales Dept

2. Finance Dept

3. Store Dept

4. Workshop or Service

5. Spare parts Dept

6. Production Dept

The functions of these departments are as follows:

1) SALES:

After the loan process get over the customer makes the

payment to the dealer and collects the machine of his choice along

with all the documents .The machine is delivered to the customer after

detailed pre delivery inspection (PDI). Once the pre inspection is

finished than the machines are installed at the customer's place under

the supervision of company’s technician's and tested for smooth

functioning at the customers place.

2) Finance Department:



Company maintains mercantile system of bookkeeping and

loan facilities for the purpose of building renovation, machinery

procurement. Budgeting is conducted quarterly, half yearly and

yearly.

2.1) Finance Aspects:

The subordinates are required to report all financial audit

and account related to the account Manager .The Company maintains

mercantile system of book keeping .The General Manager has its

bank Dealings with Canara Bank, ICICI, SBI etc for loan facilities

for purpose like building, renovating, and Machinery procurement, if

any on loan term basis.

The various audit managed by the company is statutory Audit for

registered of company, Tax audit for Income Tax, and Excise audit

for Excise department, Vat audit For sales tax department, ESI

(Employee State Insurance) audit for ESI .The Company has one CA

and one accounts manager to maintain all the transactions and audit.

a) Books Of Accounts Maintain -

1. Purchase Register

2. Sales Register

3. Cash Book

4. Journal Register

5. General Ledger



b) Documents Maintained -

1. Debit Note

2. Credit Note

3. Purchase Voucher

4. Sales Voucher

5. Cash Voucher

6. Journal Voucher

3) STORES DEPT:

In storage dept separate rocks will be maintained and for

each port 1 bin will be maintained. After the material is received by

the storage department it will be sent to the quality department to

inspect and Check quality and if any damages are then it will be sent

back to the supplier otherwise it will be stored in the stores

department.

4) WORKSHOP OR SERVICE:

Work shop or service department is a place where the

service have been done for the CNC machines .The main function of

this department is to provide service to all models of CNC machines.



4.1 FUNCTIONS OF WORKSHOP –

4.1.1 FREE DELIVERY:

Every new machine before delivery is subjected to a

detailed check up. Important nuts and bolts are tightened again as per

the recommended torque. The entire electrical are checked and other

aggregated are also done as specified for CNC various models.

4.1.2 SERVICES AND WARRANTY ON MACHINE:

The company agrees to replace any item/aggregate

failed before its expected life due too material defect.

5) SPARE PARTS DEPARTMENT:

All the spare parts have a number. It is codified based on

models such as model 0, 0g, 8i, are grouped and located

systematically. The parts are stocked adequately based on

consumption. The reorder level is fixed for every item. The ABC

analysis, Fast, Slow and Non-moving (FSN) parts analysis is in



the system.

6) PRODUCTION DEPARTMENT:

The following is the organization chart of General

Manager’s production department.

Executive Director

Managers

Deputy Manager

Senior Engineers

Lead Technicians

Technicians

Trainee Technicians



Fabrication of machine base, metal guards and interface

cabinet.

M.S. Sheets are first cut in to shapes and prepared for

welding. After welding the pieces are cut in to required shape and

dimensions, they are stress relieved whenever necessary.

1) Manufacture Of Sub Assemblies:

The components are grouped and assembled to form the

sub assemblies during which Matching, seating and fitting are carried

out to have required accuracies and surface contracts.

2) Manufacture Of Interface Hardware:

After procurement of all electrical and electronics

components, they are mounted in to a Cabinet and wired for inter

connection with each other to form the interface hardware panel

which connects the machine and the CNC system.

3) Manufacture Of Final Assembly:

During this stage of machine building all the sub

assemblies, interface hardware cabinet hydraulic, Lubrication and

cater coolant units are put together to build the machine.

4) Job Try Outs:

After the above tests and trial run, the machining tests will

be conducted to confirm the specified metal removal rates, the

capabilities of machining and to the test prices.



2.15 Budgeting:

Quarterly, Half yearly and Yearly

Preparing BRS: Bank Reconciliation Statement is prepared

in the Tally software.

Accounts Department-

The accounts department at General Manager

maintains the accounts of different departments in a systematic

manner and on continuous basis.

The Department does the following activities,

1. Recording and monitoring

2. Submit report likely Profit and loss account, Balance

sheet

3 Calculation of production cost

4 Bank Dealings

5. Dealing with sales tax and income tax.

2.16 Customer Relation Management:

A separate register is maintained by the company in order



to solve the problem or any queries of the customer’s .If the problem

is with any specific department than department will hand over the

problem to that specific department. Once the department rectifies the

problem, they will handover to the customer support department and

than this department will take care of the problem.

NOTE 1:

Since the company is small it does not require ERP and

SCM facilities for the present but anyhow the coming year for its in

house use.

NOTE 2:

The following analysis not conducted by organization.

1. Six sigma

2. JIT (Just In Time)

3. Logistics

2.17 Awards And Recognisation:

1. Prestigious CMTI-PMT Award for the best design for

MIDAS 0.

2. Most innovative product display in the economic times in

IMTEX 98, New Delhi.

3. Best design of country Award for the MIDAS 4 in

IMTEX 01 New Delhi.



2.18 Evaluation of Management:

1. Market reputation on the promoter of company -

Satisfactory

2. Hands on experience of the management personnel

In the industry by qualified personnel

- Promoters is a qualified engineer with

More than 16-17 experiences

3. Ability of the management to bail out the company

In case of crisis - Satisfactory.

4. Organization structure / planning/Labor relations -

Satisfactory.

2.19 Evaluation of Industry:

1. Market situation - Good

2. Competitor of the industry – Hitech Gears

3. Cyclically / seasonality in the industry - NA

2.20 Evaluation of Business Risk:



1. Market share of the company's main products

2. Availability of Raw materials - company supply

Assured

3. Selling and Distribution arrangements - Good

Labor Force:

Every employee of the organization has to follow the rules

and regulations very strictly. There are 46 skilled and efficient

workers and staff. These are assets of the organization.

Workers in the organization are like--

Workshop - 35 workers

Official staff - 11 workers

Workers of the organization have to work for 8 hours

according

To rules.

Recruitment:

Advertisement as well as scrutinizing and interviewing the

candidate make recruitment. Recruitment also made experience of the

worker.

Training:

In this company on the job training method is adopted to train

the workers.



Wages and Salary Administration:

Basic wages given to workers are fixed on the basis of

minimum wages act 1948. And various types of allowances are

provided to the workers as well as to the office staff.

Strength of the company:

1 Sufficient place is there to keep around 72 machines.

2 Well-equipped workshop with all infrastructure facilities.

3 Workshop is well supported by an organized spare parts

division.

4 Established strong and transparent systems in all the

departments.

5 Their is good will in the possess trained, sincere and efficient

manpower to encounter present market condition.



CHAPTER-3

RECESSION EFFECT ON COMPANY

3.1 INTRODUCTION

A Recession is a difficult economic condition when an

economy shrinks. It is defined as -

“A period of general economic decline; specifically, a decline in

gross domestic product GDP for two or more consecutive quarters ".

The company is one amongst the worst hit capital goods

manufacture Industry due to the recession. The year 2007-08

witnessed a lesser growth in the sale of the products manufactured by

company, which probably was an indication of the difficult times to

come. Generally, the second half of the finance year is better as

compared to the first half of the year.

The global economy is going through a very rough weather at

that moment. As a result of decline in overall growth rate during the

accounting year 2007-08, the profit after tax of the year dropped to

20%.

Moreover, the company did not attempt to export any machines to



overseas customers for these reasons. Therefore the year 2007-08 and

2008-09 will have a great impact of the global downfall in industrial

activity.

3.2 Impact Of Recession On Company :

In the year 2006-07, the company has achieved total sales of

Rs.1880.00/- lakhs, which is 21% more than previous year. Unit has

shown a growth of 29.68% over the numbers manufactured in the year

2005-06. During the year the company has register an Export sales

turnover of Rs.90 lakhs, which is 20% less than previous year .The

reason for this, is that U.S.A distributor was passing through some

kind of bad weather, which ultimately resulted in his relinquishing the

distributorship of products in U.S.A.

In the year 2007-08 witnessed a lesser growth in the sale of the

products manufactured by company which probably was an indication

of the difficult times to come .The global economy is going through a

very rough weather at the moment .As this report is being panned

down the clouds of development and the effect of the downward

swing is being witnessed. This is a fact that generally. The capital

goods manufacturer is the first partly to be affected when the

recessionary trend commences. This drop in sales and from last 2-3

years there is no export due to recession.

As May-June 2007 when some of the orders placed by the customers

for supply of machines from its manufacture unit 2 at comibatore



were either canceled or dispatch got delayed. Therefore the year 2008-

09 will have a great impact of the global downfall in industrial

activity.

Generally, the capital goods manufactures are the first, partly to be

affected when the recessionary trend commences, this drop in sales.

For The Year 2008-09

The company is currently passing through a very difficult

period, as the flow of orders has reduced considerably .The total sales

recorded are at Rs. 900/-lakhs which is far below our estimated target.

At the same time the expenses related to employee emoluments have

been revised upwards from down of the current fiscal year .The

company putting all their efforts to achieve better results. Therefore

the company is one amongst the worst hit capital goods manufacture

industry due to the recession. Earlier the company was handling 2

shifts but due to upswing it cut down to1 shift. Generally the second

half of the finance year is better as compared to the first half of the

year. Every year the company provide bonus to all workers including

executive staff. But, in this year the company allowed only minimum

bonus to employees.

3.3 DIVIDEND:

The performance of a company has not grown to the extent

it was expected to grow. May be due to an onslaught of recessionary



trend wondering on the industrial sector. During the year directors

recommended Rs.15/- as the dividend in the year 2007-08. This will

be the full and final dividend payable for the year 2007-08.

3.4 GLOBAL SCENARIO OF RECESSION:

On a global scale, the Machine tool industry is currently in full

swing. The Indian Machine Tools are exported world wide nearly to

51 countries including to prominent ones such as Italy, Canada,

Germany and US. In 2007, company has exported CNC machines

about 60% of its total production.

Subsequently it has increased and at the end of March 2009 it has

reached to 65%. India currently ranks 19th in overall world machine

tool production, while Japan, Switzerland, Italy are ahead in

technology.

The company has 3 units: one (First Unit) in Belgaum manufacturing

CNC TURNING MACHINES, Second unit in Coimbatore for

manufacturing CNC VERTICAL TURRET LATHES, And Third

unit in Bangalore for manufacturing CNC MACHINES CENTRES.

In the international competitive field German Manufactures proved to

the division performers in all displines in 2006 as world champion in

exports.

The Indian Machine Tools are exported world wide nearly to 51

countries including to prominent ones such as Italy, Canada, Germany

and US.

The company puts on record with pride that in 2006 its transactions



crossed 1900.00 lakhs rupees.

The model wise product mix of CNC Lathe machines

manufactured during the year 2007-08 and 2008-09 are given

below –

2007-08 Type of Model 2008-09

12 Model 0 10

25 Model 0g 20

40 Model 8 32

57 Model 8i 45

68 Model 6 50



Sales for the Year 2004-05

Region % Of sales

North 7%

East 14%

West 7%

South 22%

Export 50%

Figure 1.1 sales for the year 2004-05



Interpretation:

In the year 2004-05, 50% of sales include export and 22% of

sales have done to south, 7% of sales to west, 14% of sales to east and

7% sales are done to north side.


Region % Of

sales

North 10%

East 20%

West 20%

South 30%

Export 20%


Interpretation:



In the year 2005-06, the export is decreased to 20% and the

sales to northern region is 10%, to east region is 20%, to west side

20%, and to south region it is 30%.


Region % of

sales

North 4%

East 6%

West 10%

South 50%

Export 30%


Interpretation:

For the year 2006-07, the north region sales has decreased



to 4%, and east region sales is 6%, west side sales is 10% and 50%

of sales has done to south region and export is 30%.

3.5 Sales Turnover

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Sales in Lacks

1 2 3 4 5Year 2004 to 2008

Sales Performance

Year

Figure 1.4 sales Turnover

Interpretation:

The above table shows that, the sales has increased up to 2005-06,



but after that it started to decrease and in the year 2007-08 it

decreased up to 50% due to upswing (recession).

3.6 Graphical Presentation of Product Mix

Machine

model

2005 2006 2007 2008

Midas 0 60 69 40 30

Midas 0 49 70 45 35

Midas 0 80 60 40 30

Midas 0 70 60 40 20



0

10

20

30

40

50

60

70

80

Sales VolumeM

idas

0

Mid

as 0

Mid

as 0

Mid

as 0

Mid

as 0

g

Mid

as 0

g

Mid

as 0

g

Mid

as 0

g

Mid

as 6

Mid

as 6

Mid

as 6

Mid

as 6

Mid

as 8

i

Mid

as 8

i

Mid

as 8

i

Mid

as 8

i

2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008

Year

Product Mix Diagram

Sales

Figure 1.5 Product Mix sales

Interpretation:

The orders are getting cancelled and those customers who wish

to lift the machines can't do so on the stipulated date due to financial

crunch .As a result of this, cash flow of company is very badly hit. In

addition, very shortly taken the repayment of the term loan taken for

construction of factory shed at Belgaum will commence which will be

additional burden on the exchequer of company.



3.7 GROWTH WISE PERFORMANCE:

Following is the company’s performance during recession

period is shown in growth wise.

Year Growth in

%

2006 40%

2007 30%

2008 20%

2009 15%



Figure 1.6 Company Performances

Interpretation:

From the above table we conclude that in the year 2006,

the company’s growth was 40%. And in the year 2007 it decreased to

30% and to 20% in the year 2008. Finally it almost decreased to 15%

in the year 15%.



CHAPTER-4

ANALYSIS AND INTERPRETATION OF DATA

Today, every company is facing a competition in many

ways .In competitive market the consumer or industrial user is the

king and the purchaser who decide what to purchases and what not to

purchase as per his likings, advises from other and his personal

experience.

In case of industrial goods the attitudes of purchaser differ from

that of consumer goods because;

1. The purchased goods are durable



2. The purchased goods are re-used in manufacturing of other goods.

3. There must be benefit following on investment made.

4. In case of industrial equipment and machinery they should be free

From frequent troubles and should have expected life giving

Satisfactory services.

On the basis of data collected, following points obtained-

a) The main important is quality of the service is very good in Galaxy

Machinery Ltd Compared wit other dealers.

b) The labor charges are reasonable.

c) Facilities like delivery, Service and repairs will be provided very

Quickly and promptly.

4.1 Product Mix Sales For The Year 2007-08

QUESTIONS ASKED IN QUESTIONNAIR AND ANALYSIS

MADE ---

1. WHAT IS YOUR AVERAGE SALES OF MACHINES?

Year Models Sales

2005 Midas 0 60

2006 Midas 0 70

2007 Midas 0 45



2008 Midas 0 20

2. Is your sales dept got affected by Recession?

YES.

3. If Yes, than how it is affected?

The sales done during the year is relatively less as compared to

Last 2 years sales report.

Graphical Presentation:

Year Models Sales

2005 Midas 0 60

2006 Midas 0 70

2007 Midas 0 45

2008 Midas 0 20



0

10

20

30

40

50

60

70

80

Sales Volume

Mid

as 0

Mid

as 0

Mid

as 0

Mid

as 0

Mid

as 0

g

Mid

as 0

g

Mid

as 0

g

Mid

as 0

g

Mid

as 6

Mid

as 6

Mid

as 6

Mid

as 6

Mid

as 8

i

Mid

as 8

i

Mid

as 8

i

Mid

as 8

i

2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008 2005 2006 2007 2008

Year

Product Mix Diagram

Sales

Figure 1.7 Region wise sales for the year 2007-08

Interpretation:

In the year 2005-06, the company has sold to 60 to 70 machines.

But during the upswing from the year 2006 the company’s sales has

decreased to 20 machines.

4.2 Product Mix Sales For The Year 2008-09:

1. How you expanded your sales?

The company’s sales is not restricted to one side but it covered all

Four sides of the earth.



2. Did you able to do sales in all areas during recession?

YES, but we sold less machines.

Table:

Region % Of

sales

North 4%

East 6%

West 10%

South 50%

Export 30%

Graphical Presentation:



Figure 1.8 Region wise sales

Interpretation:

The company has sold its machines to all 4 regions of the earth. But

only during the period 2008-09 it has sold less no of machines.

4.3 SENSITIVITY ANALYSIS:



Based on the analysis of risk factors the company has

identified following factors, which may affect the profitability of the

projects under consideration.

Factors considered for sensitivity analysis are

1. Sales realization (less by 5%)

2. Manufacturing expenses, which mainly included cost of labor,

repairs and maintains may increase (more by 10%).

3. Raw material cost may increase without increase in sales

realization (more by 5%).

4. Sales quantity may reduce (less by 15%).

The sensitivity analysis statement is given below---

Profitability and cash flow:

The following performance analysis statement are

enclosed,

- Profitability analysis statement

- Balance-sheet analysis statement

- Cash flow analysis system

4.4 Company Expenditures:



1. Did the company is able to earn same profit from last 2 years?

NO,

2. Why the company is not earned it or more profit?

Because from last 3 years the company has got less orders

for manufacturing the machines. So there is less profit and

expenditures increased.

The increase in expenditures is shown in table-

Year Exps in lakhs

2006 500

2007 800

2008 1200

2009 1500

Figure 1.9 Company Expenditures

Interpretation:

Here, It is observed that their is an increase in the

expenditure as compared with the previous year which too has added



to the burden on companies coffee resulting the bottom line, profit.

Major part of expenditure is due to increase in the costs of certain raw

material especially the items made of steel. The employee related

expenses were also more than previous year basically due to annual

revision in pay scale and more so because company had decided to

recruit large number of trainee employees so that they would be

available to be absorbed in the regular employees once the

construction of the building would be complete.

4.5 MANUFACTURING EXPENSES:

The manufacturing expenses includes

4.5.1. Employment cost of production staff, which is estimated

Considering the cost of labor prevailing in the Belgaum area

And based on the present labor cost of the company.

4.5.2. Labor welfare expenses - 5% of employment Cost.

4.5.3 Manufacturing consumables 1% of raw material Cost.

4.5.4 Machining charges 4, 25,000/- p.m

4.5.5 Freight Rs. 15,000/- per machine

4.5.6 Factory rent increase by 5% every year

4.5.7 Insurance 1% of cost of machines

4.6 ADMINISTRATIVE EXPENSES:

The administrative expenses mainly include administration



salaries and other administrative Expenses. These expenses are

estimated based on past expenses.

1.3 SELLING AND DISTRIBUTION EXPENSES:

1.3.2 Sales promotion expenses - 1.5% of sale

1.3.3 Freight - 0.05%

1.3.4 Packing and forwarding - 0.50%

Vendor Development:

Galaxy has developed a well-knit vendor family and

enjoys the best co-operation from its vendors. The company has more

than 100 dedicated vendors, who like Galaxy believe in quality of

international standards.

REPAYMENT OF TERM LOAN:

Repayment of term loan is proposed in 5 years with 10 half

yearly equal instaments with a moratorium of 6 months. Interest on

term loan is provided at 12% p.a on average outstanding.

4.8 Particulars of consumption of Raw materials and

Components:



Particulars of consumption of Raw materials :

Particulars In

lacks

2006-07 2007-08

CNC

systems

Others

250

400

150

120

100

280

Particulars of consumption of Raw materials ( Imported and

Indigenous ) :

Particulars % 2006 - 07 % 2005 – 06

Imported 300.00 480.00

Indigenous 65.00 90.00

Total 365.00 570.00

Capacities, Production and Turnover:



Product Production Quantity Turnover

Machine tools accessories 70 92,50,000

Metal cutting machines 30 54,00,000

Others 25 42,00,000

1.4 Sources of Funds:



Particulars 2003-04 2004-05 2005-06 2006-07 2007-08

Profit after tax 2000 2050 1900 1700 1000

Ad: Depreciation 500 700 600 450 300

Operational

Surplus

2500 2750 2500 2150 1300

Increase in current

liabilities

250 350 300 200 100

Increase In current

Assets

150 200 250 90 80

Increase in current

liabilies

420 300 280 100 75

Increase in creditors 420 380 420 400 450

Increase in capital

exps

500 550 640 400 320

Increase in working

capital

25 45 40 35 20

Short term capital 80 95 75 50 62

Total 4095 4670 4505 3425 2407

CHAPTER-5

Findings, Conclusions And Limitations



From this study it is clear that machine tool industry is

booming due to increase in automotive industry and the dealers and

customers are satisfied with the quality and price of the product. The

organization study was really good learning experience and

challenging it's own way.

During the study, I come to know about the functions of

various departments in the organization, organization structure and

how everyone works as a team in order to achive organization goal. It

helped me in analyzing as well as it was a great practical experience

that every management student is exposed to.

5.1 Findings:

1. The amount of funds raised during the year is relatively

less as compared to previous year

2. There is no export from last 3 years

3. It is found that there is an increase in the expenditure as

compared to last year

4. The company has taken nearly about 3 years to come

out off this difficulty

5. The company is one amongst the worst hit capital goods

manufacture industry due to recession

All employees are very committed to their work. It has created

it's own brand name because of it's quality. The distribution network

is very strong. Quality is the hallmark of the organization.



They are succeeding in manufacturing it's standard of product as well

as satisfying their customer requirements.

They are conducting inspection in each and every process of

production. It is a zero lies, zero brides, and zero tax evasion

company. Safety campaign is conducted regularly for employees.

They conducted highly ethical Business Standards right from the in a

production of the company to day today operations.

5.2 Suggestions:

In order to maintain good quality in market, the company needs

to be very competitive and should adjust to the changing market



environment.

1. They should utilize the equipments to maximum extent.

2. Improvements regarding the price and service.

3. They should utilize the available resources into their full extent.

4. Company website should be developed to provide

Information as well as to have better relations with outside.

5. They should attract new customers to acquire market share.

6. They should develop good infrastructure inside the company.

5.3 Limitations Of The Project:

1. The study was limited to a period of 30 days only, so the

critical

Information not collected.

2. Some information relation to topic is confidential, which

could not be disclosed to outside persons. Thus valuable

information could not be obtained.
