DECLARATION

I hereby declare that this project titled Internship Report on Entrepreneurship

submitted to the Department of Commerce (Shift II) Loyola College, is a record of the
original work by me under the guidance of Prof.Charles Jail Singh M.Com.,M.Phil and this
project is submitted in the partial fulfilment of the requirements for the award of the degree of
Bachelor of Commerce. This project is not from part of any previous Certificate / Diploma /
Degree.

I further state that the information contained in the project does not bear resemblance to any
other previous project done by any other student and all the information supplied is true and

DATE: SIGNATURE

PLACE: OF THE CANDIDATE

NAME: PRAVEEN RAJA R

14-CO-367
LOYOLA COLLEGE (AUTONOMOUS), CHENNAI-34.
Department of Commerce
(Shift II)

Internship Training Report

At
BALAJI AUTOMOTIVE

Name : R.PRAVEEN RAJA

Department No : 14-CO-367
Year : 2014-2017
Specialization : ENTREPRENEUR
A REPORT ON THE INTERNSHIP
PROGRAMME

AT

BALAJI AUTOMOTIVE

Submitted to Loyola College (Autonomous), Chennai impartial fulfilment of the

requirements for the Skill Based Course for the award of the Degree of

BACHELOR OF COMMERCE

By

R. PRAVEEN RAJA

Department of Commerce (Shift II)

Loyola College
Chennai 600 034
 ABSTRACT

My project work is to study about entrepreneurial activities and

to get trained in the same. The internship was done at BALAJI
AUTOMOTIVE PVT.LTD.
This report has all heads like business formation, business
model, operations of the organization in which I got trained. It
also has the skills and knowledge acquired by me during the
course of internship.
It also includes the functional areas of BALAJI Honda such as
finance, marketing, human resource management and also
other activities involved in the organization.
 Acknowledgement

The internship opportunity I had with BALAJI Honda was a

great chance for learning and professional development.
Therefore, I consider myself as a very lucky individual as I was
provided with an opportunity to be a part of it. I am also grateful
for having a chance to meet so many wonderful people and
professionals who led me though this internship period.
I express my deepest thanks to Mr.Sridar, sales manager for
taking part in useful decision & giving necessary advices and
guidance and arranged all facilities to make internship easier. I
choose this moment to acknowledge his/her contribution
gratefully.
I express my profound gratitude to my project guide Mr. S. Charles
Jail Singh M.Com, M.Phil and Coordinator of Commerce department,
Loyola College Mr. K.T. Manivanan M.Com, M.Phil, B.Ed, MBA for
their constant guidance and encouragement and support in completing
this project report. I express my deep sense of gratitude, ineptness and
regard to my Professor Ms. Roseline for their involvement in this
project.

At this moment I also thank almighty, my parents and God for the
blessings showed upon me and also my friends for their valuable
suggestions.

(R.Praveen Raja)
S.NO CONTENTS P.G

1 FORMATION OF THE COMPANY

2 BUSINESS MODEL

3 BUSINESS COMPANYANALYSIS

4 FUNCTIONAL AREAS

5 OPERATIONS
Definition of Internship

Internships offer students a period of practical experience in the industry relating to

their field of study. This experience is valuable to students as a means of allowing
them to experience how their studies are applied in the "real world", and as work
experience that can be highly attractive to potential employers on a candidate's.

Scope of an Internship in General

An internship adds a great value to your resume it shows your willingness to learn
and work in a professional environment. The letter of accomplishment is a sign that
you can adapt yourself to a much more rigorous schedule.

Entrepreneurship

Entrepreneurship is ubiquitous and is reflected in all the major dimensions of

civilization viz. social, political and economic. It involves creativity that is consistent
with the healthy edge required to change the basis of competition.

Entrepreneurship is a creative human act involving the mobilization of resources

from one level of productive use to a higher level of use. "It is the process by which
the individual pursue opportunities without regard to resources currently controlled."

Entrepreneurship involves a willingness to take responsibility and ability to put mind

to a task and see it through from inception to completion. Another ingredient of
entrepreneurship is sensing opportunities, while others see chaos, contradiction, and
confusion. Essence of Entrepreneurship is going against time with maturity and
serving as a change agent.

Entrepreneurship is more than simply starting a business. The definition of

entrepreneurship is, a process through which individuals identify opportunities,
allocate resources, and create value. This creation of value is often through the
identification of unmet needs or through the identification of opportunities for change.

It is the entire process a person under goes to set up a business.

Entrepreneurship also includes the successful running of the business.

There are two major aspects to Entrepreneurship. They are the

entrepreneur and the enterprise. Thus we can say:

Entrepreneur + Enterprise= Entrepreneurship

a) Enterprise

An enterprise is a business.

It is an activity whereby individuals organize capital, land and labour in order to

create a good or provide a service and generate profits.

b) Entrepreneur

Jean-Baptiste Say, a French economist, is believed to have coined the word

"entrepreneur" in the 19th century.
 He defined an entrepreneur as "one who undertakes an enterprise,
especially a contractor, acting as intermediary between capital and
labour"

A broader definition by Say: "The entrepreneur shifts economic

resources out of lower and into higher productivity and greater yield."

Entrepreneur in English is a term applied to a person who is willing to help launch a

new venture or enterprise and accept full responsibility for the outcome.

An entrepreneur is a person who has possession of a new enterprise, venture or

idea and is accountable for the inherent risks and the outcome of a product.

The term was originally a loanword from French and was first defined by the Irish-
French economist Richard Cantillon.

An Entrepreneur is someone who:

Wishes to take a risk in business.

Brings resources together in order to make a profit.

Recognises an opportunity and is willing to use time, managerial and other

skills and money to add to that opportunity and at the same time handle
the uncertainties/risks of running a business.

FEATURES OF ENTREPRENEURSHIP

The entrepreneur as an organizer of the process of production is the forerunner of

economic development of a country. Entrepreneurship is a wider concept which
comprise the following,
1. Scarce Human Resource

Entrepreneurship is a very scarce human factor as it involves specific talent,

organizational capacity, innovative sprit and boldness to bear risk which is not found
in every person. In developing countries like India lack of entrepreneurship is a major
impediment to development.

2. Heterogeneous Factor

Entrepreneurship is a heterogeneous factor of production because efficiency, talents,

organizing skills, ability to bear risk, foresights and innovating capacities, etc. vary
from entrepreneur to entrepreneur. The nature of enterprise varies with various forms
of business organizations like sole trading, partnership, co-operatives, Joint Stock
Company and public undertakings. In a small business, the same person may work
as an entrepreneur, manager and capitalist.

3. Indispensable Factor

In modern business entrepreneur is a very important factor of production as he

organizes production of goods & services by coordinating the other factors in an
optimum way. He is an organizer & owner of the firm. Production is impossible in his
absence.
4. Intangible factor

Entrepreneurship is an abstract phenomenon. It is intangible. Entrepreneurial efforts

cannot be measured in quantitative terms while we can measure in terms of hours of

work and number of days. We can calculate the number of individual workers and
their contribution to the firm but it is not possible to measure entrepreneurship as the
firm itself is the enterprise.

5. Highly Mobile

Of all factors entrepreneur possess a higher degree of mobility as he can easily

move from one industry to another or from one region to another. An entrepreneur's
ability to move from one industry to another depends upon his knowledge,
experience and specialization.

6. Cannot Be Bought & Sold

Land, labour and capital can be bought and sold in factor markets but it is not
possible to deal with entrepreneurs in a factor market. Since enterprise is an
intangible factor, it cannot be bought and sold. Hence, like land, labour and capital
market there is no entrepreneurial market where entrepreneurship can be bought
and sold. Transaction is not possible in case of enterprise. We cannot derive the
demand and supply curves in case of entrepreneur. Hence, the Demand and Supply
Theory of value cannot be applied to the factor enterprise or organization to
determine its price.

7. Residual reward

Entrepreneurship is a reward in terms of profit which is a residual reward, i.e. an

income which is left after meeting all business expenses from the total sales
revenue.

Other characteristics include:

CREATIVE ACTIVITY: it involves innovation of products and techniques by

keeping in mind the market.

DYNAMIC PROCESS: keeps in mind changing external environment.

PURPOSEFUL ACTIVITY: purposed to earn profits or bring a difference to

the market

INVOLVES RISK: entrepreneurial decisions are vast and cannot be reverted

easily and involve great deal of investments.
 ENTREPRENEURSHIP IN INDIA

a) Current perspective
b) Scope
c) Promoting Entrepreneurship
d) Encouragement at attitudinal level
e) Encouragement at physical level
f) Qualities needed

Current Perspective

In a country like India, social (value system) and cultural issues hold their importance
besides issues related to infrastructure. Any innovation to succeed in our society
needs to be accepted by our value systems and cultural issues. It will not be wrong
to say that Dot.com (or any innovation) will not succeed until and unless a high level
of awareness is achieved and the idea is taken to the common people. An
acceptance by the mass in itself is a kind of social innovation. Further, in our country,
where the population is more concerned about making both ends meet,
entrepreneurial activity will achieve sustainability only when support is provided both
at the societal and governmental levels.

Scope of Entrepreneurship development in India

We are a very young nation just over 64 years since independence setting out on
a path of sustained economic growth, for decades to come.

We already have over a billion fellow Indians. Within the next 20 years, we will have
400 million people below the age of 35 years more than the entire population of the
United States! Each person, in this bold new generation, will be in the prime of his or
her life, striving for a better tomorrow creating, in the process, new growth
opportunities, for budding entrepreneurs!

On the most conservative basis, our domestic consumption, in virtually any sector,
has the potential to at least double, or treble, from current levels perhaps, just to
catch up with a country like China.

Then, there is the entire global opportunity, across diverse sectors internationally; the
"Made in India" tag is now an increasingly respected brand, valued for quality,
reliability, and competitiveness. Truly, with economic reforms in the country, and with
the virtual removal of all trade barriers, the world is now our market and our
opportunity.

The pursuit of these opportunities requires an indomitable spirit of entrepreneurship!

In India there is a dearth of quality people in industry, which demands high level of
entrepreneurship development programs throughout the country for the growth of
Indian economy.

The scope of entrepreneurship development in country like India is tremendous,

especially since there is a widespread concern that the acceleration in GDP growth
in the post reforms period has not been accompanied by a commensurate expansion
in employment. Results of the 57th round of the National Sample Survey
Organization (NSSO) show that unemployment figures in 2001-02 were as high as
8.9 million. Incidentally, one million more Indian joined the rank of the unemployed
between 2000-01 & 2001-02. The rising unemployment rate (9.2% 2004 est.) in India
has resulted in growing frustration among the youth. In addition there is always
problem of underemployment. As a result, increasing the entrepreneurial activities in
the country is the only solace. Incidentally, both the reports prepared by Planning
Commission to generate employment opportunities for 10 crore people over the next
ten years have strongly recommended self-employment as a way-out for teaming
unemployed youth.

At present, there are various organizations at the country level & state level offering
support to entrepreneurs in various ways. The Govt. of India & various State Govts.
have been implementing various schemes & programs aimed at nurturing
entrepreneurship over last four decades. For example, MCED in Maharashtra
provides systematic training, dissemination of the information & data regarding all
aspects of entrepreneurship & conducting research in entrepreneurship. Then there
are various Govt. sponsored scheme for the budding entrepreneurs.

Recognizing the importance of the entrepreneur development in economic growth &

employment generation, Maharashtra Economic Development Council (MEDC) has
identified entrepreneurial development as the one of the focus area for Council
activities two years ago.

Various Chambers of Commerce & apex institutions have started organizing

seminars & workshops to promote entrepreneurship. Incidentally, various
management colleges have incorporated entrepreneurship as part of their
curriculum. This is indeed a good development. This shows the commitment of the
Govt. & the various organizations towards developing entrepreneurial qualities in the
individuals.

Promoting Entrepreneurship

In India, where over 300 million people are living below the poverty line, it is simply
impossible for any government to provide means of livelihood to everyone. Such
situations surely demand for a continuous effort from the society, where the people
are encouraged to come up with their entrepreneurial initiative.
Encouragement at attitudinal and social level

In the future, innovation and entrepreneurship needs to be encouraged at Social

levels, Governmental levels and Managerial levels. There must be a social attitude
that views innovations with positive attitude and reject an innovation only when it is
not acceptable.

Encouragement at physical level

At this level the encouragement will refer to two aspects necessary for
entrepreneurship to thrive, one is the provision of venture capital and the other being
infrastructural support. A real example is Export Processing Zones which are
performing extremely well when given the support.

Qualities needed to succeed in this new world

First and foremost, we need the entrepreneurial spirit. Outside India, this spirit has
been very evident in the IT industry. 35% of the start-ups in Silicon Valley are by
Indians. We need to have similar risk-taking ability within the country as well.
Entrepreneurs need more than technical talent, more than business savvy. What
they need is the indefatigable energy and incurable optimism that enables them to
take the road less travelled and converts their dreams into reality. It is a force that
beckons an individual to pursue countless opportunities. Entrepreneurs must learn
how to overcome the risk of failure, or of vulnerability.
 CHAPTER-1

FORMATION OF THE
COMPANY
INTRODUCTION

COMPANY NAME : Honda

DEALER : Balaji Automotive

SALES : Two Wheelers (Bike)

DATE OF INCORPORATION : 2005

OFFICE ADDRESS : No 570 A, Thiruvottiyur High Road, Washermanpet, Chennai -

600021, Opposite Mahal Vaigai

SIZE OF SHOWROOM : 5000 sq.ft

CAPITAL INVESTED : 10 crores

NO OF EMPLOYEES : 1 Sales Manager

10 Mechanics

8 Marketing Employees

1 Accountant

1 Watchman

(21) Totally

NAME OF THE PROPRIETOR :-

Narrendaran

PVT LTD COMPANY

Private Limited Company is which are by share and by guarantee. Majority amount
of the trading companies are private companies limited by shares. There are over
one million such companies registered at Companies House and each company
must have the word 'Limited' or 'Ltd' at the end of its name. Many private companies
are very small and no minimum capital requirement in respect of a private limited
company Approximately 90% of private companies are small or medium sized
companies which mean that they can simplify accounts at Companies House, rather
than full accounts. A private company may not offer shares or debentures.
 Legal Formalities
Registration Requirements: -

Time to
No: Procedure Cost to complete:
complete:

Obtain director identification

number (DIN) online from the
1 1 day INR 100
Ministry of Corporate Affairs portal
(National)

Obtain digital signature certificate

online from private agency
2 3 days INR 1,500
authorized by the Ministry of
Corporate Affairs (National)

Reserve the company name

3 online with the Registrar of 2 days INR 500
Companies (ROC) (National)

INR 1,300 (INR 200 for MOA +

Stamp the company documents INR 1,000 for AOA for every INR
4 at the State Treasury (State) or 1 day 500,000 of share capital or part
authorized bank (Private) thereof + INR 100 for stamp paper
for declaration Form 1)

Get the Certificate of

Incorporation from the Registrar
5 5 days INR 14,133 (see comments)
of Companies, Ministry of
Corporate Affairs (National)

INR 350 (cost depends on the

6 Make a seal (Private) 1 day number of seals required and the
time period for delivery)

Obtain a Permanent Account

Number (PAN) from an authorized
franchise or agent appointed by
the National Securities Depository
7*
Ltd. (NSDL) or the Unit Trust of
India (UTI) Investors Services
Ltd., as outsourced by the Income
Tax Department (National)
INR 67 (INR 60 application fee +
12.36% service tax + INR 5 for
7 days
application form, if not
downloaded)

8* Obtain a Tax Account Number 7 days INR 57 (INR 50 application fee +

(TAN) for income taxes deducted 12.36% service tax)
at source from the Assessing
 Office in the Mumbai Income Tax
Department

Register with the Office of

INR 6,500 (INR 2000 + 3 times
Inspector, Shops, and
9* 2 days registration fee for trade refuse
Establishment Act
charges)
(State/Municipal)

Register for Value-Added Tax

INR 5,100 (registration fee INR
10* (VAT) at the Commercial Tax 12 days
5000 + stamp duty INR 100)
Office (State)

Register for Profession Tax at the

11* 2 days No cost
Profession Tax Office (State)

Register with Employees

12* Provident Fund Organization 12 days No cost
(National)

Register for medical insurance at

the regional office of the
13* 9 days No cost
Employees State Insurance
Corporation (National)

PROCEDURE FOR FORMING PRIVATE COMPANY:

1. Selection of the nature and type of company:
According to the objectives of the company, the scale of operations & activities,
capital involved, etc. the promoters have to decide exactly and precisely the type of
company as the private company, public company, non-profit making company, etc.

2. Selection of name for the proposed company:

An application in Form No. 1A needs to be filed with the Registrar of

Companies (ROC) of the state in which the Registered Office of the proposed
Company is to be situated. The application is required to be signed by one of
the promoters. The details to be state in the said application are as follows:
Four alternative names for the proposed company.(The name can be coined
names from the objects of the proposed company or the names of the
directors, etc. but should definitely be indicative of the main object of the
 company. Justification for the name needs to be specified along with the
application)
Names and addresses of the promoters (Minimum 7 for a public company
while 2 for private company).
Authorized Capital of the proposed company.
Main objects of the proposed company.
Names of other group companies. On submitting the application, the ROC
scrutinizes the same and sends the approval / objections in about 10 days to
the applicant. On fulfilling of the objections a formal letter of name approval is
issued.

3. Apply for the Directors Identification Number (DIN) and Digital

Signatures:
Before the submission of completed e-Form1A, the directors of the proposed
company must ensure that they have legitimate DIN. In case they do not have the
DIN, they are required to apply for the same as per the new section 266A of the
Companies (Amendment) Act, 2006. Again, every document prescribed under the
Companies Act, 1956, is required to be filed with the digital signature of the
managing director, or director, or manager, or secretary of the proposed company.

4. Drafting of Memorandum and Articles of Association:

Drafting of the Memorandum (M.O.A) and Articles of the Association (A.O.A), is the
very next step after getting confirmation of name by the Registrar. These two
documents are of the paramount importance as these contain ultimate objectives (as
also shown in the e-Form) and cherished & ideal rules & regulations of the company.
It should be noted that the main objects should match with the objects shown in e-
Form. The M.O.A and A.O.A must be drafted very scrupulously with great care and
concern, after a comprehensive and elegant counsel of the concerned experts.

5. Stamping, digitally signing and e-filing of various documents

with the Registrar:
For the incorporation of company the documents submitted to the Registrar along
with the mandatory registration fees, may include Memorandum and Articles of the
Association, Declaration in e-Form1, Power of Attorney, e-Form 18, e-Form 32, and
copies of any other agreements.

6. Payment of Fees.
The registration fees vary depending upon the authorized capital of the proposed
company, which can be effortlessly calculated from the Ministry of Companies Affairs
portal.

7. Obtaining Certificate of Incorporation.

After the censorious observation of the required documents specified in sections
33(1) and 33(2) from the company side, the Registrar registers the memorandum
and articles of the association and issues a certificate of incorporation within a period
of 7 days of receipt of the documents, as per the section 34(1).

The following documents are mandatory for Indian

Nationals for incorporation of company in India:

PAN Card: PAN Card copy of the proposed Directors of the Company will be
required for Company Registration. PAN or Permanent Account Number is a unique
identification number issued by the Department of Income Tax in India. It is
mandatory for Directors who are Indian Nationals to submit PAN during the
incorporation process.

Address Proof: In addition to the PAN Card copy, the proposed Director must
submit an address proof. The address proof submitted must have the name of the
Director as mentioned in the PAN Card and the most current address of the Director.
Further, the document must also not be older than 2 months. The following
documents are acceptable address proof for Indian Nationals.

Passport

Election Card or Voter Identity Card

Ration Card

Driving License

Electricity Bill
 Telephone Bill

Aadhaar Card

Residential Proof: In addition to the address proof, a residential proof must be

submitted during the incorporation of the Company to validate the current address of
the Director. As applicable for address proof, the residential proof must also contain
the name of the Director as mentioned in the PAN Card and must not be older than
two months. The following documents are acceptable residential proof:

Bank Statement

Electricity Bill

Telephone Bill

Mobile Bill

Director: Foreign Nationals

The following documents are mandatory for Foreign Nationals for incorporation of
company in India:

Passport: In case of Foreign Nationals, Passport is a mandatorily required as a

proof of identity. The Passport must also be notarized or Apostilled in the country it
was issued. In case the document is in foreign language, then it must be translated
by an official translator to English and notarized or apostilled. Further, if the Passport
does not contain date of birth of the holder, then an additional document indicating
the date of birth of the Director must be provided, duly certified or attested or
notarized or apostilled.

Address Proof: In addition to the Notarized or Apostilled Passport copy, the

proposed Director must submit an address proof which is also notarized or
apostilled. The address proof submitted must have the name of the Director as
mentioned in the Passport and the most current address of the Director. Further, the
document must also not be older than 1 year for foreign nationals. The following
documents are acceptable address proof for Foreign Nationals.

Driving License
 Residence Card

Bank Statement

Government issued form of identity containing address.

In case the document is in a foreign language, then it must be translated by an

official translator and notarized or apostilled.

Residential Proof: In addition to the address proof, a residential proof must be

submitted during the incorporation of the Company to validate the current address of
the Director. As applicable for address proof, the residential proof must also contain
the name of the Director as mentioned in the Passport and must not be older than
one year. The following documents are acceptable residential proof:

Bank Statement

Electricity Bill

Telephone Bill

Mobile Bill

In case the document is in a foreign language, then it must be translated by an

official translator and notarized or apostilled.

Registered Office Proof

In addition to providing identity, address and residential address for the Directors,
proof must be provided to validate the registered office address of the Company. The
following documents must be submitted as proof of registered office during
the company registration process or within 30 days of incorporation of the company.

The registered document of the title of the premises of the registered office in
the name of the company; OR

The notarized copy of lease / rent agreement in the name of the company
along with a copy of rent paid receipt not older than one month;
In addition to the above, the following must also be provided as proof of registered
office:

The authorization from the Landlord (Name mentioned in the Electricity Bill or
Gas Bill or Water Bill or Property Tax Receipt or Sale Deed) to use the
premises by the company as its registered office. This is usually referred to as
NOC from Landlord; AND

Proof of evidence of any utility service like telephone, gas, electricity, etc.
depicting the address of the premises in the name of the owner or document,
which is not older than two months.

Advantages of Partnership

Capital Due to the nature of the business, the partners will fund the
business with start-up capital. This means that the more partners there are,
the more money they can put into the business, which will allow better
flexibility and more potential for growth. It also means more potential profit,
which will be equally shared between the partners.

Flexibility A partnership is generally easier to form, manage and run. They

are less strictly regulated than companies, in terms of the laws governing the
formation and because the partners have the only say in the way the business
is run (without interference by shareholders) they are far more flexible in
terms of management, as long as all the partners can agree

Shared Responsibility Partners can share the responsibility of the running

of the business. This will allow them to make the most of their abilities. Rather
than splitting the management and taking an equal share of each business
task, they might well split the work according to their skills. So if one partner is
 good with figures, they might deal with the book keeping and accounts

Decision Making Partners share the decision making and can help each
other out when they need to. More partners mean more brains that can be
picked for business ideas and for the solving of problems that the business
encounters.

Importance of Partnerships:-

Focus on Outcomes. It is important to know what you can, and are prepared
to deliver, and what you would like in return from your potential partner.
Approaching a partner without clear suggestions can cause them to lose
interest before real negotiations have begun.

Commitment. The level of commitment required from each party needs to be

considered. The nature of your business, and that of the partnership or
alliance will determine how much each party needs to give in order to keep
the partnership or alliance healthy.

Collaboration. The extent to which you will be happy to share resources with
partners will need to be considered. Generally, the more collaborative the
partnership or alliance, the more successful the endeavour is. However, it is
also important to keep in mind that you are not merging with the partner
organisation, rather you are forming an alliance and so total sharing of
resources is not necessary.

Communication. An emphasis on effective communication between partners

is essential. Open and effective channels of communication between
members of the partnership or alliance will ensure that there are no
misaligned expectations between the parties.
 Registration of a Partnership Firm in India

Partnerships in India are governed by the Indian Partnership Act, 1932. As per the
Partnership Act, Registration of Partnership Firms is optional and is entirely at the
discretion of the partners. The Partners may or may not register their Partnership
Agreement.

However, in case the partnership deed is not registered, they may not be able to
enjoy the benefits which a registered partnership firm enjoys. Registration of
Partnership Firm may be done before starting the business or anytime during the
continuance of partnership. However, where the firm intends to file a case in the
court to enforce rights arising from the contract, the registration should be done
before filing the case.

The procedure for Registration of Partnership Firms in India is fairly simple. An

application and the prescribed fees are required to be submitted to the Registrar of
Firms of the State in which the firm is situated. The following documents are also
required to be submitted along with the application:-

Application for Registration of Partnership in Form No. 1

Duly filled specimen of Affidavit

Certified True Copy of the Partnership Deed

Ownership proof of the principal place of business or rental/lease agreement

thereof.
The application or statement must be signed by all the partners, or by their agents
especially authorised in this behalf. When the registrar is satisfied with the points
stated in the partnership deed, he shall record an entry of the statement in a register
called the Register of Firms and issue a Certificate of Registration (Sec 59).

The Register of Firms maintained at the office of the Registrar contains complete
and up-to-date information about each registered firm. This Register of Firms is open
to inspection by any person on payment of the prescribed fees (Sec 66).

Any person interested in viewing the details of any firm can request the Registrar of
Firms for the same and on payment of the prescribed fees, a copy of all details of
with Firm registered with the Registrar would be given to the applicant

It should however be noted that registration with the Registrar of Firms is different
from Registration with the Income Tax Dept. It is mandatory for all firms to apply for
Registration with the Income Tax Department and have a PAN Card.

After obtaining a PAN Card, the Partnership Firm would be required to open a
Current Account in the name of the Partnership Firm and operate all its operations
through this Bank Account.

Partnerships

A partnership is the simplest form of partnership to set up. It requires at least two
individuals willing to share the burdens and benefits of their business. A partnership
provides the benefit of single taxation. This means that your percentage of the
businesses profit is your income for the year. The only downside of a partnership is
that the partners are not shielded from liability. This means that if your partnership is
held responsible for someones injury, then you are responsible for their entire
damages, even if it means paying out of you and your partners pockets. To avoid
losing personal assets, most partnerships will own liability insurance.
Limited Partnership

A limited partnership (LP) offers the same tax benefits as a standard partnership with
one exception. One or more of the partners are silent partners; this means that they
will assist by giving the partnership seed money and collect profits, but will not run
the business in any way. By remaining silent, these partners are shielded from
liability.

Limited Liability Partnership

A limited liability partnership (LLP) still offers the partnership tax benefits, but also
offers liability protection for its partners. Specifically, a limited liability partnership can
only be sued for the total amount of assets in the business. For example, if a
customer slipped on a pickle in your grocery store and is suing for their injuries, they
cannot receive more than the total value of your grocery store. This partnership is a
popular choice for law firms and medical practices to ensure that customers cannot
sue for assets such as the practitioners home.

Limited Liability Company

A limited liability company (LLC) offers both the most benefits and the most
protection for a business owner. The LLC provides for the same tax protection as a
partnership, but also gives the liability protection of a corporation. Under corporate
law, a corporation is only liable for the total start-up investment in the company. So, if
your company is currently worth $20 million, but you had a start-up of five million
dollars, you cannot be sued for more than five million dollars.

LLCs are limited by state law to only certain types of practices. Some states, such
as Arizona, have created an even greater hybrid called a Professional LLC, where
professionals such as doctors and dentists can obtain the LLC protection, but with
greater limitation than a regular business.
 CHAPTER-2

BUSINESS MODEL
Balaji Automotive

Balaji Honda Motorcycle and Scooter

Balaji Honda is, Recognized the symbol of Honda two wheelers, the Wings arrived
in India as Honda Motorcycle and Scooter India Pvt. Ltd., a 100% subsidiary of
Honda Motor Company Ltd., Balaji Honda has become the largest two wheeler
dealer as well as the second largest two-wheelers company in Chennai.

Balaji Honda is also the fastest growing company. With a host of facilities under its
wings, the first factory of HMSI is spread over 52 acres including a covered area of
about 100,000 sq. meters in Manesar, District Gurgaon, Haryana with an annual
capacity of 1.65 million units. To meet the ever increasing demands of the products,
Balaji Honda has started operations of its second plant in Tapukara, District Alwar,
Rajasthan. Expanding to full operations , Honda production capacity has jumped
30% year on year to 2.8 million per annum in FY 12- 13.

Hondas third plant at Narsapura Industrial Area near Bengaluru, Karnataka is

equipped to manufacture 1.2 million units. Utilizing production technologies refined at
Manesar & Tapukara plants as starting point, the 3rd plant is employed with state-of-
the-art manufacturing, automation and environment friendly technologies to deliver
quality products.

On February 17 2016, Honda emigrated the Worlds largest only scooter plant at
Vithalapur Gujarat with annual capacity of 1.2 million units. The new plant will employ
approximately 3000 people within first 2 years of commercial production.
 BALAJI HONDA SERVICE CENTRE

These are the equipments they use to do service for the bikes

Service department:

There are totally 8 employees in service departments they deals with services of
bikes and assemble the bikes fully and make ready for delivery.

Designations:

Technician
Supervisor
Workshop Manager
Service Advisor
Service Manager

Spare store:

There are totally 3 employees in spare store they deals regarding the need of spare
for bikes and for customer need for retail price.

Designations:

Stores In-charger
Stores Manager
Admin & Housekeeping staff etc.
 Gravity Die Casting & Low Pressure Die Casting

Gravity Die-Casting & Low pressure Die Casting Sections are for manufacturing
critical engine parts.
 Welding Robot

Weld Shop has spot welding, seam welding and MIG welding machines to weld
various sheet metal parts to form the basic frame and other scooter panels.
 Paint Shop Robot

Paint Shop has a conveyor system, which is unique amongst all Honda Factories in
the world. The conveyor car carrying the parts is rotated and dipped so as to enable
good paint adhesion, high gloss and superior paint finish. Robots are used in
painting for improved paint finish.

Engine Assembly

Engine Assembly is done in an enclosed air pressurized area to protect the engine
from dirt and dust. Each of the engines is then inspected for various parameters.
 Frame Assembly

Frame Assembly is done at the slat conveyor. After the Frame Assembly line is the
roller tester to check the final scooter quality before handing over to dispatch.
 Vehicle Quality

To ensure product Quality, Each vehicle is being inspected for Function, Noise,
Electrical, Fit & Finish as per Honda Quality Standards.

Honda Technology

Honda Eco Technology

In keeping with its strategic approach for maximizing customer satisfaction, Honda

launched the all new Honda Eco technology in 2013, making the Most Fuel Efficient

2W in India!

The new Honda Eco Technology boosts fuel efficiency of Hondas products resulting

in a Dream Mileage (Mileage based on internal Honda test ride mode that is close to

actual city riding conditions). This revolutionary mileage benchmark is yet another

milestone from Honda.

Forming the crux of the revolutionary Honda Eco Technology is the trio of improved

combustion, significantly reduced friction and optimized transmission in Honda

engine:

Reduced friction by offset crank, significant weight reduction of reciprocating

parts, low tension piston ring and improved bearing oil seal.

Improved combustion with highly ignitable nickel spark plug and optimized

inlet port.

By optimizing Pulley converter ratio & driving force, the power has been

maintained & mileage has been increased.

 Combi Brake System

Generally, it is not easy to control a 2-wheeler while braking during emergencies and

bad road conditions. This system not only allows easy & simultaneous operation of

the front & rear brake but also provides optimal braking performance. Once the left

side brake lever is pressed, the system distributes the appropriate braking power

between the front and rear wheels, which assures complete safety for the rider.
 Honda Matic Transmission

The compact, efficient & oil pressure controlled Honda matic Transmission is the
world's first fully automatic transmission system, which delivers a dynamic
combination of torque & excellent accelerator response for a constant and superior
driving experience. The transmission is being used in Honda's all-terrain vehicles.
Honda is working hard to introduce this Honda matic in two-wheelers.
 Fuel Injection System

Honda's fuel injection technology is designed to realise ideal combustion, which

results in delivering maximum power output, greatly improved fuel efficiency and yet
be environment-friendly.
 Idle Stop System

Honda has created an advanced Idle Stop System (see image below) that reduces
fuel consumption while totally blocking out toxic exhaust gas and unwanted noise. It
enables the engine to stop automatically for 3 seconds after the vehicle stops
moving. And when the throttle is opened, the vehicle engine restarts and takes off
smoothly.

Introduction to the Future

ASIMO is a symbol of Honda's advanced technology, and a member of Honda's

fourth line of mobility creations, after motorcycles, automobiles and general power
products. ASIMO is an achievement in the evolution of 'Human Walk' technology.
This technology, called I-Walk*, enables ASIMO to move back and forth, vary its
pace, step right and left and walk along an '8' shape path. ASIMO can also move in
more complex ways, such as waving its hands while walking. This humanoid robot
has put Honda at the front of cutting edge technology that promises to improve the
quality of our lives.
 Honda Airbag Technology

The Honda Airbag System is designed to function in a frontal collision in which the
rider is likely to be thrown forward, helping to lessen the severity of the riders
injuries. Honda developed an oversized, V-shaped airbag that offers increased
stability as the rider comes into contact with it. Honda unveiled its production
motorcycle airbag technology in 2005, followed by the release in 2006 of the Gold
Wing Airbag, a production bike equipped with the worlds first motorcycle airbag.

DEVELOP A MARKETING STRATEGY

Effective marketing starts with a considered, well-informed marketing strategy. A

good marketing strategy helps you define your vision, mission and business goals,
and outlines the steps you need to take to achieve these goals.

Your marketing strategy affects the way you run your entire business, so it should be
planned and developed in consultation with your team. It is a wide-reaching and
comprehensive strategic planning tool that:

describes your business and its products and services

explains the position and role of your products and services in the market
 profiles your customers and your competition
identifies the marketing tactics you will use

Allows you to build a marketing plan and measure its effectiveness.

A marketing strategy sets the overall direction and goals for your marketing, and is
therefore different from a marketing plan, which outlines the specific actions you will
take to implement your marketing strategy. Your marketing strategy could be
developed for the next few years, while your marketing plan usually describes tactics
to be achieved in the current year.

SUCCESSFUL MARKETING STRATEGY

Your well-developed marketing strategy will help you realise your business's goals
and build a strong reputation for your products. A good marketing strategy helps you
target your products and services to the people most likely to buy them. It usually
involves you creating one or two powerful ideas to raise awareness and sell your
products.

Developing a marketing strategy that includes the components listed below will help
you make the most of your marketing investment, keep your marketing focused, and
measure and improve your sales results.

IDENTIFY YOUR BUSINESS GOALS

To develop your marketing strategy, identify your overarching business goals, so that
you can then define a set of marketing goals to support them. Your business goals
might include:

Increasing awareness of your products and services

Selling more products from a certain supplier

Reaching a new customer segment.
When setting goals it's critical to be as targeted as possible so you can effectively
measure the outcomes against what you set out to achieve. A simple criteria for goal-
setting is the SMART method:
 Specific - state clearly what you want to achieve
Measurable - set tangible measures so you can measure your results

Achievable - set objectives that are within your capacity and budget
Relevant - set objectives that will help you improve particular aspects of your
business
Time-bound - set objectives you can achieve within the time you need them.

STATE YOUR MARKETING GOALS

Define a set of specific marketing goals based on the business goals you listed
above. These goals will motivate you and your team and help you benchmark your
success.

Examples of marketing goals include increased market penetration (selling more

existing products to existing customers) or market development (selling existing
products to new target markets). These marketing goals could be long-term and
might take a few years to successfully achieve. However, they should be clear and
measurable and have time frames for achievement.

Make sure your overall strategies are also practical and measurable. A good
marketing strategy will not be changed every year, but revised when your strategies
have been achieved or your marketing goals have been met. Also, you may need to
amend your strategy if your external market changes due to a new competitor or new
technology, or if your products substantially change.

Research your market

Research is an essential part of your marketing strategy. You need to gather
information about your market, such as its size, growth, social trends and
demographics (population statistics such as age, gender and family type). It is
important to keep an eye on your market so you are aware of any changes over
time, so your strategy remains relevant and targeted.

Profile your potential customers

Use your market research to develop a profile of the customers you are targeting
and identify their needs.
The profile will reveal their buying patterns, including how they buy, where they buy
and what they buy. Again, regularly review trends so you don't miss out on new
opportunities or become irrelevant with your marketing message.

While you try to find new customers, make sure your marketing strategy also allows
you to maintain relationships with your existing customers.

Profile your competitors

Similarly, as part of your marketing strategy you should develop a profile of your
competitors by identifying their products, supply chains, pricing and marketing
tactics.

Use this to identify your competitive advantage - what sets your business apart from
your competitors. You may also want to identify the strengths and weaknesses of
your own internal processes to help improve your performance compared with your
competition.

DEVELOP STRATEGIES TO SUPPORT YOUR MARKETING GOALS

List your target markets and devise a set of strategies to attract and retain them. An
example goal could be to increase young people's awareness of your products. Your
corresponding strategies could be to increase your online social media presence by
posting regular updates about your product on Twitter and Facebook; advertising in
local magazines targeted to young people; and offering discounts for students.

Marketing Mechanism Done By Balaji Honda

Promotion

Promotion concerns the message the firm sends out to potential consumers. It
provides information and persuades people, it creates awareness, stimulates
demand and differentiates the product and influences public behaviour. Promotion
wont make a bad product that no one wants a success; although the absence of
promotion might that a good product is not successful, promotion includes all the
activities or tools a company uses to communicate or promote its product in the
market.
Promotional tools or promotion mix

1. PERSONAL SELLING: It involves personal confrontation either by phone or face,

it is an expensive and time-consuming tool of promoting the product.

2. ADVERTISING: It is defined as a paid non-personal communication with a target

(usually mass) market. It is cost effective and can reach a large number of
people. It can also be used for long term or short term objectives.

There are various forms or mediums through which can advertise.

A. Broadcast Media:

Television
Radio
Cinema

B. Print media:

Newspapers
Magazines
Leaflets

C. Outdoor media:
 Posters and billboards.

3. PUBLIC RELATIONS AN PUBLICITY:

Public relations are an umbrella term and refer to the totality of the organizations
behaviour with respect to the society in which it operates. The maybe regarded as
good or bad and is reflected in the companys reputation and image.

4. SPONSORSHIP:

Sponsorship can be seen as a part of public relations and it is certainly the case
that some sponsorship goes on to generate positive publicity for the organization.

5. DIRECT MARKETING:
It is an interactive system of marketing which uses one or more advertising media
to affect a measurable response at any locations.

6. DIRECT MARKETING INCLUDES:

Direct mail.
Telemarketing.
Door to door selling.
Direct response advertising: phone now or fill in the coupon ads
Home shopping of various types.

Factors that guide a marketers decision in selecting a promotion mix:

a) Nature of product
b) Overall marketing strategy
c) Buyer readiness stage
 d) Product life cycle stage

7. SPONSORSHIPS:

The company has not left any stone untamed in sponsoring the major events
both globally and domestically. The biggest of all is the sponsorship of the WORLD
CUP for which Honda has the credit of being the only two-wheeler company in the
world to do so. Besides this, the company has also sponsored events like Master
Golf, television academy awards, etc.,

Thus the company has gained a lot of reputation by doing so.

8. DISCOUNTS/OFFERS:

The company has started giving discounts and other offers to the customers on
the purchase of a new bike, for instance, with the World Cup offer, in which the
consumer was to get a 1 gm gold coin with every purchase.

But after all these schemes and benefits may be because of cut-throat
competition in the segment with heavyweight competition such as Honda, kinetic,
Yamaha, and TVS the company (HONDA) officially says:

Our aim is to proactively and consistently deliver value to the customer. We are
giving back to the customer after becoming successful. Most companies give
discounts only when their products are not doing well in the market. There is lots of
competition in the segment, especially from Honda. But the reason for Hondas
success it that we are consumer-focused while other companies such as Honda
tends to be more competitor-focused.

PROMOTION POLICY:
 Company gives advertisement in different media vehicles time to time. Like in
TV. Magazines, newspaper, etc.
Honda also organizes free service camps every year.
Honda also takes art in trade fair.
Honda with the help of ICICI Bank provides loan to the customers & also
provide easy monthly instalment scheme to customers.
Honda gives huge commission to their dealers.

MARKETING MIX PLAN

Demographic Segmentation

Income: Our customer survey indicates that the segments available for
the Honda bike are the people with monthly income of Rs. 10,000 and
above.

Age: The main segmented group for the motorcycle are 18 years and
above.

Occupation: All kinds of people are taken into account. Students,

professionnels, Govt. Servants, etc.

Geographic Segmentation: The potential customers are basically from

every regions of India.

Psychographic segmentation: People purchasing bikes are very

stylish, brand conscious.

Behavioural segmentation: This segmentation is done considering user

status, benefit wise.

Targeting

The proposed targeting people in the age group of 18 years and above with
a monthly income of Rs. 10,000 and above, who are adventurous,
enthusiasts and socializing and who are either students or retired individuals
or may be employed as professionals, government servants or having their
own business, but mostly male.

Positioning

The image that Honda creates in the mind of the customers is the faith. The
add shown by it says Desh ka Dhadkan. That means its a member of the
Indian family. It represents the Indian culture and society.

The objectives can be achieved through the implementation of suitable marketing

strategy by the organization. It is the marketing logic that is formulated keeping in
mind the needs of the consumers and also strategies of the competitors.
The 4 factors affect it are:

Product - The tangible offer to the market, which includes the product quality,
design, features, branding and packaging. The product is perfectly designed and
all the switch are well placed, which provides a good riding condition

Price Pricing is an important component of marketing mix of firm.

Determining the prices of different products of a firm is a very difficult task of
the marketing manager. Price denotes money value of a product. It
represents the amount of money for which a product can be exchanged. In
other words, prices represent the money which the buyer pays to the seller
for a product price represents the exchange value of goods and services in
terms of money. Price is all around.

Price factor has very well been touched by the manufactures. The
manufactures (Honda) are charging very comparatively cheaper prices then
their competitors. The pricing strategy of the company is very set. They price
their product according to the cost of production and also by keeping an eye
on the price of the competitors of that segment & demand of the product in
the market.

The pricing strategies adopted by Honda Ltd.

The management of a firm decide to fix the price at the competitive level.
This method is adopted by Honda because the bike market is highly
competitive.

The amount of money that customer pays for the product. The price of the product
should commensurate with its perceived value. If does not, the buyers will turn to
competitors products.

Place Includes the various activities the company undertakes to make the product
accessible and available to a large number of target customers.
 There are about many regional offices located in major cities throughout
the country.

There are more than 10,000 dealers throughout the country.

For the product distribution the company distributes its products through
authorized dealers.

The variety products are easily available in showrooms.

Promotion The fourth marketing mix tool, includes all the activities the company
undertakes to communicate and promote its products to the target market. It consists
of advertising, sales promotion, public relations, and direct and online marketing.
Promotion represents all of the communications that a marketer may use in the
marketplace. Promotion has four distinct elements - advertising, public relations,
Personal selling and sales promotion. A certain amount of crossover occurs when
promotion uses the four principal elements together, which is common in any
promotion. Advertising covers any communication that is paid for, from television and
cinema commercials, radio and Internet adverts through print media and billboards.
One of the most notable means of promotion today is the Promotional Product, as in
useful items distributed to targeted audiences with no obligation attached. This
category has grown each year for the past decade while most other forms have
suffered. It is the only form of advertising that targets all five senses and has the
recipient thanking the giver. Public relations are where the communication is not
directly paid for and includes press releases, sponsorship deals, exhibitions,
conferences, seminars or trade fairs and events. Word of mouth is any apparently
informal communication about the product by ordinary individuals, satisfied
customers or people specifically engaged to create word of mouth momentum. Sales
staff often plays an important role in word of mouth and Public Relations.

The various promotional activities adopted by the Honda Company.

The company has 100crore rupees for its promotional activities out of which
75% is sponsored by the company and 25% from the dealers.

They may sign a celebrity for its promotional activities in recent futures.

The company provides six free services to its customers in comparison

to its competitors.

The company provides good services facilities to its customers through

dealers service station.

Dealers encourage its customers by giving discount, providing 0%

interest loan schemes, prices, coupons etc.

The various promotional activities adopted by Honda bikes are as

follows

Credit & finance schemes

Free services to the consumers

Advertisements on Televisions, Newspapers, Magazines

Road Shows

Free trials for the new consumers

RESULTS

Companies data shows that the company produces approximately 1,

11,000 vehicles per month. Out of which they sales 60,000 motor
cycles per month.

The company has more demand of its product in western region.

The company has 21 regional offices throughout India out of which 10

contains training centres.
 The main objective of these offices is to pay emphasis to human
resource development and provide good services to its customers.

Customer:

The results from customer survey are as follows:

1. Customers prefer because of their fuel efficiency.

2. Customers prefer because of their performance.

3. Customers prefer because they are value added product.

4. Customers also prefer because they are stylish.

SWOT Analysis for Honda

SWOT Analysis

STRENGTH WEAKNESS

Strong International Brand Name. Scope for Innovative, Hybrid Products.

Leadership Position in Motor Prop-Up Brands could be launched.
Cycles. Bridge the gap between 100cc and
Excellent Business Practices. 150cc segment..
Undiluted Focus on Urban Youth.
Technological Edge.
Zero Debt Company.
 WEAKNESS THREAT

Price Competition Hooting Up. Technology partnership with Honda ends

Relying too much on Two Brand in 2014.
Leaders Splendor and Passion. Hondas own 100% subsidiary
Zero Product in 125 cc. Strict emission norms, catalytic
Ageing Product Portfolio( CD 100-16 converter fitted models inflating
years, Sleek 12 years, Product Cost.
Splendour 8 years. Four Stroke Segment
getting crowded.

EFFECTIVELY MANAGING RETAIL EMPLOYEES IN BALAJI

HONDA

Compliment in Public

Everyone likes to know they are doing a good job and an occasional Atta boy is fine,
but the best go further. To develop leaders in your store, take time during store
meetings to recognize associates for what they did well and tell why what they did
was so good. When you find more of what employees are doing right than wrong and
tell them specifically in front of others, you nurture a team environment.

Train in Private
Learning requires judging something is either right or wrong. For training to stick,
you have to get past bad behaviours, which require correction. No one ones to be
corrected in front of others or worsein front of customers. Schedule time to train
associates one-on-one off the floor, away from the demands of customers. Allowing
employees to explore and ask questions without interrupting them on the floor gives
them the space to learn.

Encourage Exploring the Merchandise

Three of the worst words for a customer to hear from an associate are, I dont know.
Make a point of everyone examining shipments for whats new. Make employees try
on, handle, or use new merchandise.

Pay Above Minimum Wage

A new employee agreed to start at minimum wage. She did a great job of pitching in,
yet when her check arrived two weeks later, she posted her disappointment all over
Facebook. She soon quit. If you want to attract and keep the best, youll need to pay
the best. Creating an exceptional experience takes thinking, acting, and maximum
talent. Those who can do that expect to be paid accordingly.

Hold Accountable
 If you train associates to do things correctly in your store, whether it is making a
display, selling your luxury items, or doing a refund, you must hold them accountable
for the expectations you have of them. Retail managers often only hold accountable
those people closest to them like Assistant Managers or shift leads. But part-timers
must especially be held to the same standards as they frequently are in more direct
contact with your customers.

Help Them Find a Friend

A managers job is to train, encourage, and challenge their crew. One of the key
components to making a great crew happens during on boarding. You want to help
the new employee find things in common with other crewmembers. This helps
remove the feelings of them vs me.

Ask Their Opinion

One of the most frequent comments about bad bosses is their inability to listen or
pay attention to others. If you hire Millennials, you must involve them and get them to
freely share their thoughts.

Thoughtfully Reward Them

When goals or large sales are made or they went over and above, reward with a gift
card, car wash, or something personal to their interests, not just money.
 Financial Management Definition

Financial management can be defined as the activity concerned with the planning,
raising, controlling and administering the funds used in the business. In
simple terms, it is an activity concerned with acquisition of funds use of funds
and distribution of profits by a business organization.

Functions of Finance Manager in Balaji Automotive

1. Estimating the Financial Needs

Financial manager has to estimate short-term and long-term financial requirements
of his business. F o r t h i s p u r p o s e h e w i l l p r e p a r e a f i n a n c i a l p l a n f o r
p r e s e n t a s w e l l a s f o r f u t u r e . T h e a m o u n t required for purchasing
fixed assets as well as needs of funds for working capital will have to be
ascertained. The estimation should be based on the sound financial principles so
that neither there are inadequate nor excess funds with the concern.
Inadequacy of funds will adversely affect the day-do day working of the
concern whereas excess funds may tempt management to spent on
speculative activities

2. Selection of Right Source of Funds

After ascertaining total amount needed for the organization, it is the responsibility of
the financial manager to select the right type of source of funds at right time at right
cost. Each source will have its own cost. Careful selection should made in the light
of duration, risk, cost and the purpose
3. Allocation of funds
After mobilizing funds, it is the responsibility of the finance manager to
distribute the funds to capital expenditure and revenue expenditure. Each
investment must yield fair amount of return, so that it should contribute to the goal of
wealth maximization.

4. Analysis and interpretation of financial performance

An efficient system of financial management necessitates the use of
various control devices to interpret the financial performance of various
operations. Financial control devices generally used are: 1) ROI 2) Budgetary control
3) Break Even analysis 4) Ratio analysis 5) cost and internal audit. ROI is the best
control device to evaluate the performance of various financial policies. The use
of various control techniques by the finance manager will help him in
evaluating the performance in various areas and take corrective measures
whenever needed.

5. Analysis of CVP
It is another important tool of the financial management that helps the
management to evaluate different proposals of investments. It will help the
management to know whether the organization is moving in the right direction or not.
Make or buy decision, continue or drop the product line are the important decisions
possible using CVP analysis.

6. Capital budgeting
It is the technique through which finance manager evaluates proposed investment
in fixed assets. In how many years the original investment can be recovered? At
what percentage of returns business should run. These are the issues answered by
capital budgeting technique. PBP, IRR, ARR, NPV are some of the modern
techniques of evaluating the proposals.2

7. Working capital management

Working capital is the financial lubricant which keeps business operations
going. Fate of large investments mainly depends upon relatively small amount of
working capital. Financial manager must assess various cash needs at different
times and then make arrangements for arranging cash. Cash may be needed for
1) purchase of raw materials 2) making payments to creditors 3) meet wage bills 4)
met day to day expenses. Usual sources of cash may be 1) cash sales and 2)
collections from debtors. Cash management should be such that neither
there is shortage nor it is idle. Any shortage of cash will damage the
creditworthiness.

Profit planning guides the management in attaining the corporate

goals. Profit can be earned either through sales or through reducing cost.
Cost reduction technique really helps in increasing profits. A judicial use of
profit is essential for expansion and diversification plans and also
in protecting the interests of shareholders. Ploughing back of profits is the
best policy of further financing. A balance should be maintained in using
funds for paying dividend and retaining earnings for
financing expensive plans.

8. Fair Return to the Investors

Organization should not ignore the interest of the shareholders. Equity holders
normally expects f a i r a m o u n t o f d i v i d e d a n d h e n c e c a p i t a l
a p p r e c i a t i o n o f t h e i r i n v e s t m e n t . I f t h i s i s n o t d o n e , confidence of
the investors will be lost. Hence it is advised the organization to maintain
regular dividend policy with growth.

9. Maintaining liquidity and wealth maximization

This is considered the prime objective of an organization. Liquidity
i n c r e a s e s t h e b o r r o w i n g capacity. Expansion and diversification can be
conducted conformably. Increased liquidity builds the firms ability to meet short term
obligations. Once the flow of funds is assured continuously, intern the overall
profitability of the firm can be maximized. This wealth maximization takes place in
the form of growth of capital over the years.
 Characteristic Features of a Good Financial Plan
1. Simplicity

It should be easily understandable by all concerned and free from complications and
suspicion. T h e r e m u s t b e n o c o n f u s i o n i n t h e m i n d s o f t h e i n v e s t o r s
a b o u t t h e n a t u r e o f t h e s e c u r i t i e s issued by the organization.

2. Foresight
The planners should always keep in mind not only the needs of today but
also the needs of tomorrow so that a sound capital structure may be formed.

3. Flexibility

The capital structure of a company should be flexible enough to meet the capital
requirements of the company. The financial plan should be chalked out in
such a way that both increase and decrease in capital may be feasible.

4. Intensive use
Every paisa should be used properly for the prosperity of the enterprise. Wasteful
use of capitalist as bad as inadequate capital. It must be seen that there is neither
over-capitalization nor under-capitalization.

5. Liquidity
Reasonable amount of current assets must be kept in the form of liquid
cash so that business operations may be carried on smoothly without any shocks
due to shortage of funds.

6. Economy
It means that cost of raising capital should be the minimum. Dividend or interest
should not be a burden to the company.

7. Provision for Anticipated Contingencies

A sound financial plan should provide for the future contingencies caused by
business cycles.

FINANCIAL MANAGEMENT IN BALAJI AUTOMOTIVE

Mr. Sridar is responsible for the financial management for BALAJI

AUTOMOTIVE. The day to day expenses are noted and recorded.
Expenses incurred such as petrol, wages, electricity, Service for bikes,
delivery charges, miscellaneous expenses etc. These are routine
expenses for the company. They have to be managed properly. All the
datas are recorded in a system so that they can try to cut down the
expenses where ever it is not necessary.
 CHAPTER-3

BUSINESS COMPANY
ANALYSIS
Introduction

For those of you who are looking forward to start the dealership or franchise of Hero
Moto Corp also known by its former name Honda Motors Limited; you have started
imploring the right place for information. Honda has the largest market of bikes in
India; taking the sales up to 6000 making the franchise of this company extremely
beneficial in terms of profit. This company has the largest service group within which
there are authorized dealerships, numerous service and spare part outlets and also
outlets with dealers to expand and enhance the business in the country. You will find
all the details regarding cost and investment and the application procedure below.

The dealers of Honda make a lot of profit making the franchise extremely beneficial.
It is the two-wheeler automobile giant, manufacturing the maximum number of two-
wheeler vehicles across the globe since 2001. It is now a brand name which is
recognized throughout the world and has also bagged various awards. It was
awarded the Business Leader of the Year award in 2013 by the Honourable
President of India, Mr. Pranab Mukherjee. The company has seen a substantial
growth of sales even in the remote parts of India.

Honda Moto Corps provides the customers with a wide variety of choices with its 19
models of two wheelers that are not only have great body features but are also fuel
efficient giving a good average over a large number of kilometres. All 19 models are
durable and have the latest technologies installed in them. This is what makes
Honda a renowned and profitable company and making all franchises and
dealerships very beneficial.
Investment and Cost The investment information to start a franchise of Honda Moto
Corps is yet known and has not been formally provided. There the exact profits are
also not known. But the total investments of starting a franchise of Honda Moto
Corps including the setup area and other expenses will be somewhere near the cost
of Honda Two wheeler dealership franchise i.e. 1.3 to 1.4 Crores including setup,
spare parts and the expected sale of around 200 vehicles.

Application Procedure It is advisable to ignore any kind of third party indulgence in

making your arrangement to get the dealership of Honda. It will be more suitable to
directly apply at the head office by providing all your necessary details and profile,
your investment budget and the availability of floor area and its location. The rest is
totally up to the company whether it wants to give the dealership or not.

PEST Analysis

A PESTEL analysis is a framework or tool used by marketers to analyse and monitor

the macro-environmental (external marketing environment) factors that have an
impact on an organisation. The result of which is used to identify threats and
weaknesses which is used in a SWOT analysis.

PESTEL stands for:

 P Political

E Economic

S Social

T Technological

E Environmental

L Legal

Political Factors

These are all about how and to what degree a government intervenes in the
economy. This can include government policy, political stability or instability in
overseas markets, foreign trade policy, tax policy, labour law, environmental law,
trade restrictions and so on.

It is clear from the list above that political factors often have an impact on
organisations and how they do business. Organisations need to be able to respond
to the current and anticipated future legislation, and adjust their marketing policy
accordingly.

Economic Factors

Economic factors have a significant impact on how an organisation does business

and also how profitable they are. Factors include economic growth, interest rates,
exchange rates, inflation, disposable income of consumers and businesses and so
on.
These factors can further be broken down into macro-economic and micro-economic
factors. Macro-economic factors deal with the management of demand in any given
economy. Governments use interest rate control, taxation policy and government
expenditure as their main mechanisms they use for this.

Micro-economic factors are all about the way people spend their incomes. This has a
large impact on B2C organisations in particular.

Social Factors

Also known as socio-cultural factors are the areas that involve the shared belief and
attitudes of the population. These factors include population growth, age
distribution, health consciousness, and career attitudes and so on. These factors are
of particular interest as they have a direct effect on how marketers understand
customers and what drives them.

Technological Factors

We all know how fast the technological landscape changes and how this impacts the
way we market our products. Technological factors affect marketing and the
management thereof in three distinct ways:

New ways of producing goods and services

New ways of distributing goods and services

New ways of communicating with target markets

Environmental Factors

These factors have only really come to the forefront in the last fifteen years or so.
They have become important due to the increasing scarcity of raw materials,
pollution targets, doing business as an ethical and sustainable company, carbon
footprint targets set by governments (this is a good example were one factor could
be classes as political and environmental at the same time). These are just some of
the issues marketers are facing within this factor. More and more consumers are
demanding that the products they buy are sourced ethically, and if possible from a
sustainable source.

Legal Factors

Legal factors include - health and safety, equal opportunities, advertising standards,
consumer rights and laws, product labelling and product safety. It is clear that
companies need to know what is and what is not legal in order to trade successfully.
If an organisation trades globally this becomes a very tricky area to get right as each
country has its own set of rules and regulations.

After you have completed a PESTEL analysis you should be able to use this to help
you identify the strengths and weaknesses for a SWOT analysis.

BUSINESS VALUATION
Quite simply, business valuation is a process and a set of procedures used to
determine what a business is worth. While this sounds easy enough, getting your
business valuation done right takes preparation and thought.

For one thing, there is no one way to establish what a business is worth. Thats
because business value means different things to different people.

A business owner may believe that the business connection to the community it
serves is worth a lot. An investor may think that the business value is entirely defined
by its historic income.

In addition, economic conditions affect what people believe a business is worth. For
instance, when jobs are scarce, more business buyers enter the market and
increased competition results in higher business selling prices.

The circumstances of a business sale also affect the business value. There is a big
difference between a business that is shown as part of a well-planned marketing
effort to attract many interested buyers and a quick sale of business assets at an
auction.

Expected selling price and business value

Business value is really an expected price the business would sell for. The real price
may vary quite a bit depending on who determines the business value. Compare a
buyer who wants the business now because it fits important lifestyle goals to a buyer
that purchases an income stream at the lowest price possible.

The selling price also depends on how the business sale is handled. Contrast a well-
conducted business marketing campaign and a fire sale.
Three business valuation approaches

That said, there are three fundamental ways to measure what a business is worth:

Asset Approach

Market Approach

Income Approach

Asset Approach
The asset approach views the business as a set of assets and liabilities that are
used as building blocks to construct the picture of business value. The asset
approach is based on the so-called economic principle of substitution.

Since every operating business has assets and liabilities, a natural way to address
this question is to determine the value of these assets and liabilities. The difference
is the business value.

Sounds simple enough, but the challenge is in the details: figuring out what assets
and liabilities to include in the valuation, choosing a standard of measuring their
value, and then actually determining what each asset and liability is worth.

For example, many business balance sheets may not include the most important
business assets such as internally developed products and proprietary ways of doing
business. If the business owner did not pay for them, they dont get recorded on the
cost-basis balance sheet!
But the real value of such assets may be far greater than all the recorded assets
combined. Imagine a business without its special products or services that make it
unique and bring customers in the door.

Market Approach
The market approach, as the name implies, relies on signs from the real market
place to determine what a business is worth. Here, the so-called economic principle
of competition.

No business operates in a vacuum. If what you do is really great then chances are
there are others doing the same or similar things. If you are looking to buy a
business, you decide what type of business you are interested in and then look
around to see what the going rate is for businesses of this type.

If you are planning to sell your business, you will check the market to see what
similar businesses sell for.

It is intuitive to think that the market will settle to some idea of business price
equilibrium - something that the buyers will be willing to pay and the sellers willing to
accept. Thats what is known as the fair market value.

Income approach
The income approach takes a look at the core reason for running a business
making money. Here the so-called economic principle of expectation

The future expectation of economic benefit in the above sentence. Since the money
is not in the bank yet, there is some measure of risk of not receiving all or part of it
when you expect it. So, in addition to figuring out what kind of money the business is
likely to bring, the income valuation approach also factors in the risk.
Since the business value must be established in the present, the expected income
and risk must be translated to today. The income approach uses two ways to do this
translation:

Capitalization
Discounting

VALUATION OF GOODWILL

INTRODUCTION

Goodwill means the reputation of a Business concern which enables

businessmen to earn extra profit, as compared to other concern. Goodwill
means various advantages of reputation and connections of a business.

Mr. Kohler defines goodwill as the current value of expected future

income in excess or normal return on the investment in net tangible assets:

NEED FOR VALUATION

The need for valuation of goodwill depends on the form of a business organization. The
circumstances in which the goodwill is valued are given below.
 Form of Business Need for valuation
Sole proprietor Sale of business
Partnership firm Conversion into partnership
Admission of partner Retirement
/ Death of partner Change in
profit sharing ratio Amalgamation
of firm
Dissolution on account of sale
of business.
Conversion into Private /
Company Public
Limited company.
Mergers / Acquisitions of
business

Transfer of controlling block

CHARACTERISTICS OF GOODWILL:

1. It is an intangible or invisible asset.

2. Its value is not fixed. It is subject to fluctuation due to internal as well as
external factors in value.
3. It cannot value in isolation.
4. Its valuation is attached to the total value of the business.
5. It is either created internally or purchased from outside.
6. Because off Goodwill a firm is able to earn excess profits than the other
firms in the same class of business.
7. Value of Goodwill may differ due to different method used. In certain
cases it is not transferable.
What Businesses have it?

Most operating businesses.

In service based businesses, almost all the value is.

They dont have many hard assets.

If a business does not have goodwill, that means they are not using their
assets wisely. Such a business is worth more dead than Alive

Even real estate entities have goodwill, although its rarely identified as such
Hint: Its the difference between replacement cost and the
income approach.
 CHAPTER-4
FUNCTIONAL AREAS
Finance According To the Entrepreneurs

"Finance is concerned with cash. It is so, since, every business transaction involves
cash directly or indirectly."

Features of Finance

1. Investment Opportunities

In Finance, Investment can be explained as a utilisation of money for profit or

returns.

Investment can be done by

1. Creating physical assets with the money (such as development of land,

acquiring commercial assets, etc.),

2. Carrying on business activities (like manufacturing, trading, etc.), and

3. Acquiring financial securities (such as shares, bonds, units of mutual funds,

etc.).

Investment opportunities are commitments of monetary resources at different times

with an expectation of economic returns in the future.
2. Profitable Opportunities

In Finance, Profitable opportunities are considered as an important aspiration (goal).

Profitable opportunities signify that the firm must utilize its available resources most
efficiently under the conditions of cut-throat competitive markets.

Profitable opportunities shall be a vision. It shall not result in short-term profits at the
expense of long-term gains.

For example, business carried on with non-compliance of law, unethical ways of

acquiring the business, etc., usually may result in huge short-term profits but may
also hinder the smooth possibility of long-term gains and survival of business in the
future.

3. Optimal Mix of Funds

Finance is concerned with the best optimal mix of funds in order to obtain the desired
and determined results respectively.

Primarily, funds are of two types, namely,

1. Owned funds (Promoter Contribution, Equity shares, etc.), and

2. Borrowed funds (Bank Loan, Bank overdraft, Debentures, etc.).

The composition of funds should be such that it shall not result in loss of profits to
the Entrepreneurs (Promoters) and must recover the cost of business units
effectively and efficiently.
4. System of Internal Controls
Finance is concerned with internal controls maintained in the organisation or
workplace.

Internal controls are set of rules and regulations framed at the inception stage of the
organisation, and they are altered as per the requirement of its business.

However, these rules and regulations are monitored at various intervals to

accomplish the same which have been consistently followed.

5. Future Decision Making

Finance is concerned with the future decision of the organisation.

A "Good Finance is an indicator of growth and good returns. This is possible only
with the good analytical decision of the organisation. However, the decision shall be
framed by giving more emphasis on the present and future perspective (economic
conditions) respectively.

Capital

Capital refers to financial assets or the financial value of assets, such as cash and
funds held in deposit accounts, as well as the tangible machinery and production
equipment used in environments such as factories and other manufacturing facilities.
Additionally, capital includes facilities, such as the buildings used for the production
and storage of the manufactured goods. Materials used and consumed as part of the
manufacturing process do not qualify.
CAPITAL CAN BE CLASSIFIED INTO TWO TYPES. THEY ARE

1. FIXED CAPITAL
2. WORKING CAPITAL

Fixed Capital
Fixed capital includes the assets and capital investments that are needed to start up
and conduct business, even at a minimal stage. These assets are considered fixed
in that they are not consumed or destroyed during the actual production of a good or
service but have a reusable value. Fixed-capital investments are typically
depreciated on the company's accounting statements over a long period of time, up
to 20 years or more.

BREAKING DOWN 'Fixed Capital'

Serving as the mechanism upon which production activities take place, fixed capital
includes tangible items, such as equipment and facilities, which are needed for
business operations. Fixed capital does not include materials used in the actual
composition of the good being produced. Investments in fixed capital include the
addition of new tools and equipment, as well as real estate need to create and house
the goods being produced.
Fixed Capital Requirements
The amount of fixed capital needed to set up a business is quite variable, especially
from industry to industry. Some lines of business require high fixed-capital
investment. Common examples include industrial manufacturers,
telecommunications providers and oil exploration firms. Service-based industries,
such as accounting firms, may have more limited fixed capital. This can include office
buildings, computers and networking devices, and other standard office equipment .

Procurement Procedures
While production businesses often have easier access to the inventory necessary to
create the good being produced, the procurement of fixed capital can be lengthy. It
may take a business a significant amount of time to generate the funds necessary for
larger purchases, such as new production facilities, or external financing may be
required. This can increase the risk of financial losses associated with low production
if a company experiences an equipment failure and does not have redundancy built
into the fixed capital assets.

Actual Depreciation Rates

Fixed capital investments typically don't depreciate in the even way that is shown
on income statements. Some devalue quite quickly, while others have nearly infinite
usable lives. For example, a new vehicle loses significant value when it is officially
transferred from the dealership to the new owner. In contrast, company-owned
buildings may depreciate at a much lower rate.

The depreciation method allows investors to see a rough estimate of how much
value fixed-capital investments are contributing to the current performance of the
company.
Liquidity of Fixed Capital Assets
While fixed capital often maintains a level of value, these assets are not considered
very liquid in nature. This can be due to the limited market for certain items, such as
manufacturing equipment, or the high price involved, as with real estate. Additionally,
the time commitment required to sell fixed capital assets is often lengthy.

Working Capital

Working capital is a measure of both a company's efficiency and its short-

term financial health. Working capital is calculated as:

Working Capital = Current Assets - Current Liabilities

The working capital ratio (Current Assets/Current Liabilities) indicates whether a

company has enough short term assets to cover its short term debt. Anything below
1 indicates negative W/C (working capital). While anything over 2 means that the
company is not investing excess assets.

Characteristics of Working Capital

The features of working capital distinguishing it from the fixed capital are as follows:

(1) Short term Needs:

Working capital is used to acquire current assets which get converted into cash in a
short period. In this respect it differs from fixed capital which represents funds
locked in long term assets. The duration of the working capital depends on
the length of production process, the time that elapses in the sale and the waiting
period of the cash receipt.

(2) Circular Movement:

Working capital is constantly converted into cash which again turns into
working capital. This process of conversion goes on continuously. The cash is used
to purchase current assets and when the goods are produced and sold out; those
current assets are transformed into cash. Thus it moves in circular away.
That is why working capital is also described as circulating capital.

(3) An Element of Permanency:

Though working capital is a short term capital, it is required always and forever. As
stated before, working capital is necessary to continue the productive activity of the
enterprise. Hence so long as production continues,
the enterprise will constantly remain in need of working capital. Theworking capital
that is required permanently is called permanent or regular working capital.

(4) An Element of Fluctuation:

Though the requirement of working capital is felt permanently,

itsrequirement fluctuates more widely than that of fixed capital. Therequirement of
working capital varies directly with the level of production. It varies with the variation
of the purchase and sale policy; price level and the level of demand also. The portion
of working capital that changes with production, sale, price etc. is called variable
working capital.

(5) Liquidity:

Working capital is more liquid than fixed capital. If need arises,working capital can
be converted into cash within a short period and without much loss. A company in
need of cash can get it through the conversion of its working capital by insisting on
quick recovery of its bills receivable and by expediting sales of its product. It is due to
this trait of working
capitalthat the companies with a larger amount of working capital feel moresecure.

(6) Less Risky:

Funds invested in fixed assets get locked up for a long period of time and cannot be
recovered easily. There is also a danger of fixed assets
likemachinery getting obsolete due to technological innovations. Henceinvestment in
fixed capital is comparatively more risky. As against this, investment in current assets
is less risky as it is a short term investment. Working capital involves more of
physical risk only, and that too is limited. Working capital involves financial or
economic risk to a much less extent because the variations of product prices are less
severe generally. Moreover, working capital gets converted into cash again and
again; therefore, it is freeform the risk arising out of technological changes.

(7) Special Accounting System not needed:

Since fixed capital is invested in long term assets, it becomesnecessary to adopt

various systems of estimating depreciation. On the other hand working capital is
invested in short term assets which last for one year only. Hence it is not necessary
to adopt special accounting system for them.

CHAPTER - 5
OPERATIONS OF A
COMPANY
 OPERATIONS
The operations of the JSP automotive are done through these four departments:

1. Sales
2. Accounts
3. DMS
4. RTO

1. Sales Department:
The first department that directly deals with the customers is the
sales department. In this department, booking and selling of vehicles will be done on
a full swing. People working in the sales department will have the excellent
knowledge of complete information about Honda bikes such as specifications,
features, prices. In case of any discounts, the deciding authorities will be discusses
and get the confirmation from the sales department before making it available for the
customers.

Process in sale department:

1) Greeting customer.

2) Make customer comfortable, water/tea.

3) Show and explain product.

4) Test drive.

5) Give price list and explain.

6) Discuss finance and offers if available.

7) Find out buying period.

8) Next follow up date to be fixed.

9) Introduce customer to the Manager.

10) Log in customer details in DMS with next follow up date.

11) Tele caller/ receptionist to call customer after 3 days to ask about his visit to
the showroom/test drive/any other information or clarification needed.

12) Follow up to be done by SC according to next follow up dates entered in the

DMS.

13) Close the sale.

14) If lost to competition detailed analysis of loss of sale.

2. Accounts Department:
Once the customer orders a vehicle through the sales
department, the details of the ordered vehicle will be sent to the accounts
departments. Based on this, the people working in the accounts department will
make the payments including showroom price, tax etc. they also have information
about the valuation of the old vehicles in case of exchanges.

Process in accounts department:

1) Collect correct amount of money as authorized by the Manager in the
Order Form.

2) Deposit the amount by next working day in the Bank.

3) Keep tracking of cheque clearance and inform Sales Admin

coordinator accordingly.

3. DMS Departments:
After the price details are made by the accounts departments,
allotments of the vehicles for the respective customers will be done by the DMS
department. These people will also perform the quality check on the allotted vehicle.

4. RTO Department:
This is the final department where the documents required for
the RTO office will be processed. These people will have the customer proof
documents, vehicle information certificates that are needed to be verified. Once they
are submitted to the RTO office, they will be verified and will be provided a vehicle
registration number.

Process in RTO departments:

1) Fix RTO charges after checking.

2) Customers registration documents to be thoroughly checked by RTO person.

In case of discrepancy he should inform the SC /coordinator immediately, who in turn
should inform the customer.

3) Vehicle registration to be done as soon as amount is realized with no delays.

4) Registration papers to be delivered at agreed interval from the RTO person.

5. Delivery:
1) Vehicle to be ready in all aspects at agreed time and date.

2) Accessories if any to be fitted before handed over to customer.

3) Adequate fuel to be filled, at least till the nearest pump.

3) 2-3 Photographs to be taken, to be sent to customer later.

4) All customer details like birth date, Anniversary date etc to be

captured in Customer Information Record.

5) Introduce customer to person from Service department for further Co-

ordination.

6. Tele calling:
1) Follow up call and authenticating customer.

2) Calling existing customers on a schedule to ask how the vehicle is doing.

3) Asking for references.