INDUSTRY PROFILE:

Hindustan Machine Tools is a public sector undertaking of the Government of India which was established after the threshold of Indias Independence. In 1953, the latter incorporated the machine tool manufacturing company by the name of Hindustan Machine Tools Limited. HMT as a brand is popular among the masses as a premium watch making company and also it has diversified itself by manufacturing watches, tractors, printing machinery, metal forming presses, die casting and plastic processing machinery and CNC systems and bearings. HMT has been successful in absorbing technology in all products group by through it collaboration with world renowned manufacturer and further strengthened by continuous in house of Research and Development. It has technical collaboration with over 30 leading International Engineering Companies for manufacture of various products. Today, HMT is a multi-product, multi-technology engineering complex with strengths comprising of.

16 Manufacturing units (22 Products Division) Assets worth over US $ 250 million Annual turnover of US $ 300 million ISO 9000 accreditation The widest range of machine tools, ranging from General purpose lathes to CNC turning/manufacturing centers. Source of qualified and experienced manpower and also today, HMT has six subsidiary companies under its supervision namely:

HMT Machine Tools Limited (HMT MTL): The machine tools business of HMT Ltd. was incorporated as a separate wholly owned subsidiary in the year 2000. HMT MTL is in the business of manufacturing and marketing of metal cutting and metal forming machine and caters to both domestic and export markets. The manufacturing units are situated in Bangalore, Pinjore, Hyderabad and Aimer. HMT Watches Limited (HMT WL): HMT Limited, the first company to start watch manufacturing in India incorporated HMT WL as a separate wholly owned subsidiary in the year 2000. HMT WL has watch manufacturing units located in Bangalore, Tumkur and Ranibagh and showrooms throughout the country. The product range includes both Mechanical and Quartz catering to varied segment of the market right from economy to premium models.

HMT Chinar Watches Limited (HMT CWL): Incorporated in the year 2000, has a watch manufacturing unit located in Srinagar and a watch assembly unit located in Jammu and manufactures hand-wound mechanical watches and assembly of Quartz watches. HMT Bearing Limited (HMT BL): Has its manufacturing unit located at Hyderabad manufactures a wide range of taper, roller and ball bearings for automobile and other applications. HMT BL became a subsidiary HMT Ltd. In the year 1988. HMT (International) Limited (HMT I): HMT (I) Ltd. regarded as one of the best export houses in the country, exports HMT products as well as engineering goods of other Indian Manufactures. Major thrust is given for implementation of turnkey projects in the area of Tool Rooms and Training Centres. The subsidiary was formed in the year 1974. PRAGA TOOLS LIMITED (PTL): Praga Tools Ltd. manufactures a wide range of CNC and NON-CNC machine tools. Praga Tools Ltd. Became a subsidiary of HMT Ltd. In the year 1988. SL.NO 1. 2. 3. 4. 5. 6. Name of Subsidiary HMT Machine Tools Limited HMT Watches Limited HMT Chinar Watches Limited HMT International Limited HMT Bearings Limited Praga Tools Limited %Holding 100% 100% 100% 100% 97.25% 51%

The Holding Company has its Corporate Head Quarter at Bangalore and forms the hub for the activities of the different subsidiaries. The Holding Company ensures good corporate governance and also pursues strategies such as; Creation of strategic alliances Development of brand equity Provision of strategic planning inputs Interface with regulatory agencies Creation and maintenance of data warehouse with suitable corporate informational data for the use of all subsidiaries.

COMPANY PROFILE:

1) BACKGROUND & INCEPTION OF THE COMPANY:

In order to expand the trade and also to commentate globally HMT Limited has established HMT (INTERNATIONAL) LTD as a wholly owned subsidiary in the year 1974. HMT (I) Limited was registered under the Indian Company act of 13 th December 1974 and it commenced its business operations on 1st April 1975. HMT (INTERNATIONAL) LTD handles international projects and export of products of its parent company and other Indian manufacturers. HMT (I) is headquarter at Bangalore and has a global network extending over 38 countries with 67 representations to services its clientele worldwide. The authorized share capital of the company is Rs800 Lakhs divided into 80 lakhs equity shares of Rs72 lakhs. HMT Ltd has taken up the fully paid up shares. HMT (I) has not yet offered any shares for subscription to the public. HMT (International) Ltd has a technological giant and a prime enterprise in Government sector which pioneered manufacture of Machine Tools in India and heralded the industrialisation. And also over the years, it has been recognized as are liable source for project expertise in a spectrum of engineering fields, covering manufacturing, and maintenance and training projects. It offers various engineering product and projects worldwide to nearly 80 countries. HMT (I) has sold over 12500 machines in more than 70 countries with efficient after sales services. HMT (I) also offers a comprehensive package of consultancy of technical and engineering services from concept to commissioning on turnkey basis. Its track record includes prestigious projects in Algeria, Indonesia, Kenya, Malaysia,

Mauritius, Tanzania, UAE, Maldives etc. HMT (I) Ltd is wholly owned subsidiary of HMT Limited, was established for carrying out International operations. The Company was incorporated under the Indian Company act on 13th December 1974 and commenced its business operations on 1.4.1975. HMT (I)S business portfolio include trading in: 1. Machine Tools and Industrial Machinery 2. Watches 3. Tractors & Agricultural Implementation 4. General Engineering Products 5. Industrial Commodities 6. Software and IT Services 7. Projects & Services. HMT (I) has also arrangement with reputed Associates in different disciplines/fields to offer technology as required in specific fields. HMT (I) has been recognized as MINIRATNA by Government of India for its continued excellence in export performance. HMT (I) has undertaken service on behalf of various international organisations like UNIDO, UNDP, ADB, AFDB & World Bank. HMT LTD was set up in 1953 is a multi-product, multi-technology engineering conglomerate, with state-of-the-art expertise acquired from world leader and harnessed with indigenous engineering excellence HMT today, can notes: 16 manufacturing units (22 products divisions) Professional and Trained Manpower Asset worth over US $ 250 Annual turnover of about US $300million Collaboration with over 30 leading international companies Sophisticated R&D and manufacturing Facilities Products to International Standards of Quality and Safety A large and diverse clientele base with machine tools sales grossing over 78000 machines with an export share of 18500 machines in 80 counties worldwide. Products spectrum spinning a rage of precision engineered products: Machine Tools, Horological Machinery, Dairy Machinery, Printing Machines, Agriculture Tractors, watches, Lamps, Bearings, CNC system, Electronics Gauging instruments and Miniature Batteries. Starting as a gateway for export of HMT products, HMT (I) grew into an international trading and engineering house for a diverse range of products & projects and consultancy and technical services. HMT(I) is one of the leading trading houses for marketing wide spectrum of products and service operating through an integrated world wide network of representative, HMT (I) exports HMTs wide range of product and products of other reputed Indian Manufacturers. HMT (I)S global network extends over 34 countries with 67 representations to service its clientele worldwide.

HMT (I) has posted its representative in UAE & USA and has a Branch for watches in Singapore.

1) NATURE OF BUSINESS CARRIED:

HMT (I) is a trading house which offers various products and projects. Trading Houses (TH) are independent companies staffed by international trade experts. They are business intermediaries between manufactures and foreign buyers or consumers of goods and services. Trading Houses exports, imports, and engage in third country trading of goods and services produced by other companies by acting as:

International traders who buy and sell products for their own account Export agents who act on behalf of another party and are paid on commission Export management companies which handle a portion of the parent companys exports, and can engage in counter-trade, if necessary;

HMT (I) has sold over 12500 machines in more than 67 countries with efficient after sale services. HMT (I) also offers a comprehensive package of consultancy of technical and engineering services from concept to commissioning on turnkey basis. I HMT (I) also works on behalf of Minister of External Affairs (MEA) Mainly in case of projects. India grants Aid to foreign countries mainly in the form of developing infrastructure in that country i.e. through building schools, vocational training sectors, Mechanical Training center, Entrepreneur and Technical Development Center and so on. Then government gives the project of infrastructure development to HMT (I) to study the needs of that country and then executing the needs. THE HMT (I) Ltd operates business in different key industry sector. The chart below illustrates what are the various sectors in which HMT (I) operates its Business are: SL.NO 1. 2. 3. 4. 5. 6. 7. Particulars Machine Tools & Industrial Machinery Tractors & Automobile Parts Watches movements and components Projects and Services Trading Imports IT Services

1) VISION, MISSION AND QUALITY POLICY:

VISION:
HMT (I) would become a major player in Trading, Project and Service through strategy initiatives on specific thrust areas covering core Competencies of HMT, Thrust on Project Consultancy Services and Trading.

MISSION:
To improve and offer competitive advantage to customer through cost reductions, quality up-gradations and product reliability with quick response and innovative approach.

QUALITY POLICIES:
To maintain Quality Leadership in all our Products and Services Total Customer Satisfaction through Quality Goods and Services Commitment of management to Quality To create a culture amongst all Employees towards Total Quality Concepts Total Quality through Performance Leadership Wide marketing network manned by qualified and trained sales and service engineers Customer Component manufactures to suit customers needs. Service outlet at customer doorsteps in major industrial locations. Critical spare parts available at Field Office. Customer training programs on Macaronis in addition to normal machine oriented training for machine tools.

1) PRODUCT AND SERVICE PROFILE:

Over the year Company product have covered many reputed Indian Manufacturer of machine tools & industrial Machinery and Engineering product beside HMT product. The profile of these products is as follows;

Machine Tools & Industrial Machinery:

HMT started manufacturing machine tools in 1953 in technical collaboration with Oerlikon of Switzerland. Starting with Speed lathe H22 today has probably the widest range of machine tools in the world spanning centre lathes to sophisticated CNC Turning & Machine canters and flexible manufacturing systems. HMT Ltd has incorporated HMT MACHINE TOOLS LIMITED as its fully owned subsidiary. HMTMTL has its ISO 9000 certified manufacturing units at five locations with each unit specialised in a particular family of machines. The sales and service network is spread across the length and breadth of the counter. Examples of machine tools are; Broach Drill Hone Grinder Milling machine

TRACTORS & AGRICULTURAL IMPLEMENTS:

HMT (I) exports tractors and agricultural equipments of its parent company HMT. THE GREEN REVOLUTION in India led to the manufacturing of tractors by HMT in collaboration with Zetor of erstwhile Czechoslovakia. HMT has the range 20-75 HP at its plants at Pinjore, mohali, and Hyderabad.

The tractors have; Powerful fuel efficient engines with low emissions Power steering. Spark Arrestors. Hydraulic Brakes. Dual Clutch for travel and PTO operation. Lower noise levels Roll over Protective Structure for safety

WATCHES

HMT Limited, the first company to start watch manufacturing in India, today has HMT WATCHES LIMITED as its fully owned subsidiary. It manufactures Eco Friendly Mechanical (Hand wound & Automatic) and Quartz Analog watches. The manufacture of wristwatches started as part of diversification strategy of HMT in the year 1962, under Technical collaboration with CITIZEN watch Company of Japan with a manufacturing unit at Bangalore. HMT WATCHES LIMITED comprises of three manufacturing units at Bangalore. All its manufacturing units have obtained the ISO 9001 certification. The product range of HMT WATCHES LIMITED includes more than 1500 models. It includes HMT Lalith, HMT Sona, HMT Swarna, HMT Chandana, HMT Roman etc. PROJECTS AND SERVICES:

Project is an endeavour undertaken to create a unique product or service. Backed up by HMTs strong technological base and formidable resource, HMT (International) Limited, over the years, has come to be recognized as a reliable source for project expertise in a spectrum of engineering field, covering manufacturing, maintenance and training projects. HMT (I) also offers Technical & management & consultancy

Service covering Market research, Demand Studies, Project Formulation & Appraisal Studies, Project Design & Engineering, Project Management etc. Include Modernisation/Rehabilitation studies for the various types of Engineering projects Service Package. Market research and product surveys Project identification, formulation & appraisal Project design and engineering services Technology transfer and collaboration services Turnkey project engineering & execution Machine Tool Reconditioning service ENGINEERING COMPONENTS:

Engineering component consists of the following Ferrous & Non Ferrous Castings & Die Cast Parts Forgings Machined components Pressed components Sheet Metal Parts Raw Material Bearings Pumps, Flanges & Fittings Generating Sets, Transformers & Motors.

1) AREA OF OPERATION:
HMT (I) operates its operations globally in different areas like Product and services. Industrial Machinery tools, tractors and Agriculture implements, watches, Trading, Imports and Exports. It has a wild network in over 38 countries and supplies its product and services AFRICA-Algeria, Djibouti, Egypt, Ethiopia, Ghana, Kenya, Mauritius, Morocco, Nigeria, Tanzania, Zimbabwe, Senegal EUROPE-UK, Switzerland, Czech Republic, Croatia, Russia, Italy, Germany, France and other West European countries. USA, Canada, Chile, Columbia, Ecuador, Haiti, Mexico, Paraguay, Latin America, Australia, Fiji, Tonga and Indian Neighbouring countries. HMT (I) head office is located in Bangalore and connection with ports of Chennai and Goa within 400-500kms, by road and rail.

2) OWNERSHIP PATTERN:
HMT (I) is a fully owned subsidiary of HMT Limited which was conceived by the Government of India in 1949 and was incorporated in 1953. The authorized share capital of the company is Rs.800 lakh divided into 80, 00, 000 Equity shares of Rs 10each. The paid up portion of the Equity Share Capital today is Rs 72, 00,000.HMT Limited has taken up the fully paid up shares. HMT (I) has not yet offered any shares for subscription to the public Competitors Information It faces competition from both public sector companies and private sector companies. It mainly faces the saviour Competition in the sector of Tractor and Watches but it faces less competition in other sectors. In case of Tractor competitors are Mahindra & Mahindra, John Deer, Sonalika, Swaraj, Escorts and so on. In case of Watches HMT (I) has been washed by its competitors, it faces completion from Titan, Orpat and Timex and so on.

3) COMPETITORS INFORMATION:
WATCHES: Titan Orpat Timex Sonata TRACTORS: Mahindra & Mahindra John Deer Sonalika Swaraj

1) INFRASTRUCTURE FACILITIES:
The office is located at the most strategic point around the city, which could derive the maximum profit and utilization of its position. The branches are in the multi stored building and well distributed according to the distribution and operational needs and this has its individual areas of operation.

The branches are well spaced covering an area of 40000-50000 sq fit of minimum working space excluding the cafeterias and rest rooms which are well furnished regarding the conveniences and work requirement. The office space is divided into various cabins (for the higher officials) and cabinets (for the sub-ordinate executive and team leads). Also there are spaces for the office equipments like the computers, printers, Xerox machine, cupboards for storing the documents and stationeries. The work place is also facilitated with high securities and spaces like waiting lounges for then people who come for their respective official and personal purposes

2) ACHEIVEMENT /AWARDS:
YEAR 1960-61 1961-62 1970-71 1971-72 1971-72 1975-76 1978-79 1981-82 1982-83 1982-83 1983 AWARD Outstanding performance Excellence Performance in exports Outstanding performance Outstanding performance National Award for Outstanding Export performance Best Product at IMTEX - 79 Best Export Performance Export excellence INSTITUTED BY President of India President of India Govt of Mysore Govt of Mysore EEPC Ministry of commerce PMT & FIE FIE Foundation

Meritorious Performance in the field of EEPC export Best Corporate Performance Most Effective Organisation MinistryofCommerce Harvard Business School Association of India & Economic Times Foundation for Organisation Research Organisation Research EEPC

1983-84

Best Productivity

1983-84 1983-84

Export Excellence Best Productivity

1984-85 1984-85 1984-85 1985-86 1985-86 1985-86 1985-86 1986-87 1986-87 1986-87 1987-88 1987-88 1988-89 1988-89 1988-89 1988-89 1988-89 1988-89

Export Excellence

National Productivity Council

Meritorious Performance in the field of EEPC export Best Product at IMTEX-86 Best Product at IMTEX-86 Best Productivity Export Excellence Export Excellence Excellence in Productivity Best Productivity Export Excellence Best Productivity Company Standards Best Product at IMTEX-89 Best Product at IMTEX-89 MinistryofCommerce CMTI-PMT Trust FIE Foundation National Productivity Council EEPC EEPC CEI National Productivity Council EEPC National Productivity Council Bureau of Standards India

CMTI-PMT Trust

Outstanding Performance in Industrial FIE Foundation Safety Best Productivity Best company for HRD Practices National productivity council National productivity council

National Award for R&D efforts in CEI industry-1990 in the Mechanical industrial Sector Valuable Contribution & Significant Dept. Of Scientific Encouragement to the cause of the and Industrial Industrial Engineering Profession in India Research Best Productivity H.N.THADANI

1990

1989-90 1990-91

Tech. Development for Machine Tools, National productivity

Bangalore 1990-91 Best Productivity

council Directorate General of Technical Development National productivity council in company National Council Safety

1991-92 1992 1994 1995 1995 1995-96

National Safety Best performance Standardisation Best Product at IMTEX-95 Best Product at IMTEX-95 Regional Top Exporters Shield

Sir Jahangir Ghandi Trophy CMTI-PMT Trust Award FIE Foundaion

Regional Top Exporters Shield-project Engineering Export Exporters Promotion Council, Chennai All India Trophy for Highest Exporters Engineering Export Promotion Council, Chennai Engineering Export Promotion Council, Kolkata Engineering Export Promotion Council, Chennai FIE Foundaion CMTI-PMT Award National Safety Trust

1996-97

1997-98

Best Product at IMTEX-98

1998-99

Best Product at IMTEX-2001

2001 2001 2002-03

Best Product at IMTEX-2001

National productivity council Engineering Export Promotion Council Government of India

2007-2008 Star performance 2009 National safety

3) FUTURE GROWTH AND PROSPECT:

Wholly owned subsidiary of HMT (I) Ltd Globally presence with supplies to over 80 countries and has Global Network in 40 countries. It is a MANIRATNA Company which continuously posting profit and paying divided. It has become a major player in export of Engineering Products, Project & Services and trading through strategic initiatives on specific thrust areas covering core competence of HMT Ltd. It has adopted a strategic approach, focuses on SECTOR, PRODUCT AND MARKETS to exploit short and medium term business opportunities and also has Embark on market development plan for the future. It emphasis on building on the core competency of the HMT Tool Ltd, HMT BearingLtd.

BUSINESS PROSPECT:
Company with order value Rs 30 crore available for execution is confident of achievement of Target Performance. Company intended to utilize the opportunity to aggressively Market during 2009 to 10 so that plan, Performance level for the future are achievable. The Company has the Order prospect of machineries and tools during 2009-2010 are around 1649 Lakhs, sales prospect 6223 Lakhs and project and services.

4) WORK FLOW MODEL

Identification & receipt of enquiry Contact with Customer Enquiry Generation

Follow up

Registration of Enquiry details Acknowledgment to customer Enquiry review Offer Submission

Supplier Identification of enquiry to supplier of offer Circulation Follow

Approval of offer

Negotiation with customer & Customer order supplier

Order realization Offer of customer

Order acceptance

Order execution Arrange HMT (I) inspection ecord sales R

Maintenance of file Conclusion of Document dispatch to custom contract

Work flow model is the graphical representation of step by step work i.e. end to end works how the company carries in order to achieve the objectives of any work they have undertaken. It helps the customers as well as the employees to know about how the work is progressed from on process to another process. Work flow model help the companies to minimize the time as well as the defects while doing the work.

MC-KINSEYS 7 S MODEL:
The 7 S Model is better known as Mc-Kinsey 7 S. This is because the two persons who developed this model, Tom Peters and Robert Waterman, have been consultants at Mc-Kinsey & Co at that time. They published their 7 S Model in their article Structure Is Not Organization (1980).

Structure Strategy Shared values Skills Staff

1. STRATEGY:
Alfred Chandler first pointed out that structure follows strategy, or more precisely, that a strategy of diversity forces a decentralized structure. Throughout the past decade, the corporate world has given close attention to the interplay between strategy and structure. By strategy we mean those actions that a company plans in response to or anticipation of changes in its external environment, its customer, and its competitors. Strategy is the way: A company aims to improve its position vis-a-vis competition, perhaps through low cost production or delivery, perhaps by providing better value to the customer, perhaps by achieving sales and services dominance etc HMT (I) is mainly an export Trading Company, its strategy is to attract more and more foreign customer so that its export may increase and also earnings. It strategy also includes identification of prime areas in the organisation and gaining competitive advantage over other units in the market. HMT (I) LTD is providing ample opportunities to the people at various levels to impart their skills and expertise in order to enhance growth by taking positive strategic decision.

System

Style

2. STRUCTURE:
HMT (I) LTD is a subsidiary of HMT LTD comprises board of directors and management team. Hierarchy & organisational structure. Chairman

Board of Directors

General Manager Joint General Manager Deputy General Manager

Assistant General Manager Manager Others

Organisational structure refers to formal hierarchical relationship & positional arrangement it deals with how members communicate with others, how information flows, what roles he performs, Rules & procedures existing to guide the activities of members as part of organisation. It refers to type of organisation-Autocratic, flat structured, democratic etc. With reference to HMT (I), it has good mentor, disciplined relationship, encouragement, help & guidance. The various departments includes: Marketing services Planning and services Product group Projects and service Finance Imports, Infrastructure, and shipping Administration Support service

ORGANIZATIONAL CHART:
JGM (PRODUCT)

JGM (MARKETING)) DGM (NC)

JGM (Associate prod

DGM (SQ)

DGM (SE)

DGM (ME)

DMM ( Tractor)0

AGM (IMP)

DMM

DMM (ME)

DMM (AP)

DMM (M)

ORGANISATION CHART OF PROJECT DEPARTMENT:

JGM (PG)

JGM (PM)

JGM (PI)

DGM (PE)

MAF (P)

DM (PP)

DM (PR)

MPJ

ORGANIZATION OF FINANCE DEPARTMENT: MD

MEN

DM (FA)

AS (C)

DM (F)

AOB

3. SKILLS:

DM (F)

AO (W)

Skill refers some special qualities within people which help them to perform distinctive activities. A strategic description of a company, for example, might typically cover markets to be penetrated or types of products to be sold. But how do people characterize companies. Not by their strategies or by their structure. People tend to characterize them by what they do best. People talk of IBMs orientation to market, its prodigious customer service capabilities, or its share market power. People talk of Du Points research process, Procter and Gambles product management capability, and ITCs financial controls. These dominating attributing attributes or capabilities are called skills. Export Expertise was estabilished in the year 1974 by HMT (I) which has emerged as an international conduit for various Indian products. The key proven areas are Machine Tools and other related products, Engineering Goods covering metal working sections, Tools Rooms, Foundry Agriculture, Food Processing, Technical Training Centres, Vocation Development, Industrial Estate Development and Technical Development. The people at the unit work as a team and put conscious effort toward the organisational activities which has paid them rich dividends. The management aims at developing the managers, adopting strategies, and promoting the products on a large scale.

HMT (I) consists of the personnel, having high technical and managerial skills. HMT (I) is having distinctive capabilities in comparison with competitors.

4. STYLE:
This basically explains as to how the people in the unit spend their time. The people in the unit attend meeting in order to discuss some core issues relating to the organisation and Brain storming sessions are conducted from time to time with different teams which are cross functional in nature. It is remarkable how often writers, in characterizing a corporate for the business press, fall back on the word style. The trouble normally people have with style is not recognizing its importance, but in doing much about it. Personalities dont change, or so the conventional wisdom goes. LEADERSHIP STYLE: HMT (I) Ltd is very specific in procedural aspects laid down in various in the various policies and manuals. At the same time, they are very concerned about the welfare of employees. Further subordinates feel free to discuss and give suggestion about the strategic issues concerning to their work. The suggestion given by the down the line employees are taken in good spirit and implemented accordingly. Similarly the managers posses human concept of leadership, consciously cultivated for both personnel development and organization effectiveness. MOTIVATION: Management motivates the subordinates in getting the work done in time. They take timely decision during their day-to-day business. Management people duly recognize the good works of the employees, especially inside the plant, and such people are rewarded properly. Periodic job orientation programs are held to enhance the hidden strength of the employees. Training programs are conducted regularly apart from counselling the employees personally.

3. SYSTEMS:
It refers to all rules, regulation & procedures both formal & informal. It includes production plans, control system, capital budgeting systems, cost accounting procedures, budgetary systems, valuation methods, recruitment training & development plans. In HMT, every department has got their own Management Information system. Human resource information system: There is an HR package which stores all employee profile such as employee ID, code no, joining date, place of posting, place of posting, name, personal profile, bank

name, A/c no, grade, department, qualifications, designation, experience, pay scale, & history. On the basis of this data rating is done. It also gives information of overall employees structure like no of persons joined in a month, transfers, promoted, land giver category, loan taken employees etc. Performance appraisal system: The criteria used for appraisal is: Main: business & customer focus, result oriented & cost consciousness Other: Job knowledge, customer satisfaction, human relations, safety orientation, clarity in communication, taking initiative to get task done, innovations, quality & quantity consideration etc. Annual & periodical appraisal is done with to assess the performance, to decide rewards, promotions based on vacancy & potential. Quality system: Every production department has quality packages. They have their own targets & grades. HMT has R & D & testing facilities Finance & Accounting Information system:

4. STAFFING:
This function deals with the recruitment and the selection of people to various departments and also includes the socialization process also. The recruitment process is done by advertising in the National newspapers and the candidates are selected by following the formalities. The selected candidates are provided training by the organization which includes Seminars, Lectures and imparting of skills by experienced candidates of the organisation. The number of candidates in the HMT Ltd. Is 9500. In HMT (I) unit are 80 which consist of 2 schedule castes, 2 schedule tribes and 1 se Ex-Service Man. The company has organized Computer Awareness programs in order to train the candidates of the shipping and the Projects department in their work so as to update them with the latest business concepts and strategies.

5. SHARED VALUE:
Unlike the other six Ss, super ordinate goals dont seem to be present in all, or even most, organizations. They are however, evident in most of the superior performers. The value shared by the members of an enterprise is known as the shared values.

The different values system of subordinates is to be responsible to their departmental duties as delegated by the functional managers. The organization can work effectively and efficiently if there is proper coordination. The organization is having the value system and culture for developing the coordination between superior and subordinate. Given below are the highlights of the shared values which are practiced in this organization. COMPOSITION AND SEGREGATION: GRIEVANCE REDRESSAL COMMITTEE: WHISTLE BLOWERS POLICY: WORK ENVIRONMENT:

SWOT ANALYSIS:
Appraising companys strength & weaknesses & external opportunities & threats, known as SWOT Analysis. SWOT Analysis powerful tool for sizing up a companys resource capabilities & deficiencies, its market opportunities & the external threats to its future well being. It is an easy-to-use tool for developing an overview of a companys strategic situation. It forms a basis for matching the companys strategy to its situation. It provides an overview of the strategic situation & provides the raw material to do more extensive internal and external analysis.

Environment scan

Internal Analysis

External Analysis

STRENTGH

WEAKNESS

OPPORTUNI-TIES

THREATS

SWOT Matrix

STRENGTHS:
Strengths are attributes of the company that are helpful to achieving the objective. The strength of an LTD which helped it to achieve a great success is as follows Well established customer support service network all over the country to respond to user at the shortest notice. Significant international presence through technical tie-ups with internationally reputed manufacturers and exporters. Marketing network in 40 countries and exports to over 75 countries. Provides a comprehensive package through turnkey basis. Proven as a reliable source for project expertise in a spectrum of engineering fields Backed up by HMTs strong technological basis and formidable resource. Wide experience in exports of 36 years Backed by technical and skilled manpower from HMTs subsidiaries Core competence in the executions of the training and tool room Maintaining quality

WEAKNESS:
Weaknesses are attributes of the person or company that are harmful to achieving the objective.

Companys core strengthen are not known adequately in other countries The sickness of the main branch HMT is affecting the prosperity of HMTI Lack of competitive edge against low cost countries Access to international market directly by manufacturers and other traders are increasing competitive pressure

 OPPORTUNITIES:
An opportunity is a chance for firm growth or progress due to a favourable juncture of circumstances in the business environment. The important opportunity those are available for the HMT (I) Ltd in the external environment are as follows

Market demand within the country is around 3,00,000 tractors per annum New opportunities in the field of export market of BRAHMA 500 CNC Company can expand the market according to customers need New opportunities in the field of training projects and service packages New opportunities on account of free trade WTO regime Vast opportunity in Africa for medium technology and medium priced goods as alternatives to high end technology Increased stress on agriculture in Africa has opened the market for export of machinery, engineering and technical services.

THREATS:
A Threat is a factor in the companys external environment that poses a danger to its well-being. The important threatening factors to the company are The short fall in performance due to global recession coupled with the short fall in petroleum prices Delay in completion of counterpart obligation by the beneficiary countries Implementation of the project orders due to prevailing uncertainties secured from Zimbabwe and Mozambique Non-competitive prices and delivery slippage pose a threat retain customer abroad Cumbersome products which makes difficult y in decision making and time consuming process Multinationals like John Deers & New Holland have focus technology upgradations and capacity expansion. Indian players like Mahindra & Mahindra is also going for capacity expansion

FINANCIAL STAEMENT ANALYSIS

Financial statement analysis is the process of identifying financial strengths and weaknesses of the firm by properly establishing relationship between the items of the balance sheet and the profit and loss account. There are various methods or techniques that are used in analyzing financial statements, such as comparative statements, schedule of changes in working capital, common size percentages, funds analysis, trend analysis, and ratios analysis. Financial statements are prepared to meet external reporting obligations and also for decision making purposes. They play a dominant role in setting the framework of managerial decisions. But the information provided in the financial statements is not an end in itself as no meaningful conclusions can be drawn from these statements alone. However, the information provided in the financial statements is of immense use in making decisions through analysis and interpretation of financial statements. Tools and Techniques of Financial Statement Analysis: The following are the most important tools and techniques of financial statement analysis:
1. Horizontal and Vertical Analysis 2. Ratios Analysis

1. Horizontal and Vertical Analysis: Horizontal Analysis or Trend Analysis: Comparison of two or more year's financial data is known as horizontal analysis, or trend analysis. Horizontal analysis is facilitated by showing changes between years in both dollar and percentage form. Trend Percentage: Horizontal analysis of financial statements can also be carried out by computing trend percentages. Trend percentage states several years' financial data in terms of a base year. The base year equals 100%, with all other years stated in some percentage of this base. Vertical Analysis: Vertical analysis is the procedure of preparing and presenting common size statements. Common size statement is one that shows the items appearing on it in percentage form as well as in dollar form. Each item is stated as a percentage of

some total of which that item is a part. Key financial changes and trends can be highlighted by the use of common size statements. 2. Ratios Analysis: The ratios analysis is the most powerful tool of financial statement analysis. Ratios simply mean one number expressed in terms of another. A ratio is a statistical yardstick by means of which relationship between two or various figures can be compared or measured. Ratios can be found out by dividing one number by another number. Ratios show how one number is related to another. Profitability Ratios: Profitability ratios measure the results of business operations or overall performance and effectiveness of the firm. Some of the most popular profitability ratios are as under:

Gross profit ratio Net profit ratio Operating ratio Expense ratio Return on shareholders investment or net worth Return on equity capital Return on capital employed (ROCE) Ratio Dividend yield ratio Dividend payout ratio Earnings Per Share (EPS) Ratio Price earning ratio

Liquidity Ratios: Liquidity ratios measure the short term solvency of financial position of a firm. These ratios are calculated to comment upon the short term paying capacity of a concern or the firm's ability to meet its current obligations. Following are the most important liquidity ratios.

Current ratio Liquid / Acid test / Quick ratio

Activity Ratios: Activity ratios are calculated to measure the efficiency with which the resources of a firm have been employed. These ratios are also called turnover ratios because they

indicate the speed with which assets are being turned over into sales. Following are the most important activity ratios:

Inventory / Stock turnover ratio Debtors / Receivables turnover ratio Average collection period Creditors / Payable turnover ratio Working capital turnover ratio Fixed assets turnover ratio Over and under trading

Leverage Ratios: Long term solvency or leverage ratios convey a firm's ability to meet the interest costs and payment schedules of its long term obligations. Following are some of the most important long term solvency or leverage ratios.

Debt-to-equity ratio Proprietary or Equity ratio Ratio of fixed assets to shareholders funds Ratio of current assets to shareholders funds Interest coverage ratio Capital gearing ratio Over and under capitalization

LEARNING EXPERIENCE:

I have done my plant in training at HMT (I) Ltd.The learning experience which I had in HMT (I) Ltd was a wonderful experience. I came to know how theoretical aspects are applied practically in the organization. Whatever theoretical information learned in the classes had to be implemented in practice in plant training. But it was good learning experience for me to understand various departments and their style of functioning. During my in plant training, I was able to study various aspects of the organization practically. I acquired the knowledge of various strategies adopted by the company. I was able to understand the classification of various departments and the duties and responsibilities of each department. The company has different departments such as Marketing, Finance, Human Resource, Commercial and Product and Service etc. The communication in the company is highly through paper. It was the time for me to explore my knowledge and go much deeper into the subject. It was a second time experience for me to work in an organization culture where I interacted with different types of people. I could learn how to behave in an organizational environment, i.e, while interacting with the colleagues and other people. I could really see how the teams are formed and their benefits to the organization.

Discipline: The company believes in maintaining a very high level of organizational discipline by synergizing personal with technological discipline. Effective communication: The human resource department is handling communication at HMT (I) Ltd. communication is given a high and this is so because the management at HMT (I) considers it necessary to bring down business and increase intra-organization information flow as a major prerequisite for organization growth. The working environment acts as the primary motivation for all employees. HMT (I) Ltd organization has constantly tried to endeavour to achieve and provide an atmosphere of perpetual growth and shared learning to all their employees. They have tried to promote to team based culture and encourage a serve of innovation and positive thought. Finally, The Company aims to provide safe working conditions at HMT (I) Ltd. The safety and health of the employees is amused by maintaining safe processes, carrying out safe practices, providing a safe environment, importing adequate and

proper training, issuing detailed instructions as regards to the area of operation and including safety awareness among all employees. The company is known for its core values quality, safety, environmental care, culture and its customs. The value adopted by the company is to achieve its goals. I understood the motivating techniques followed by the human resources department to motivate the employees. I was able to identify the strengths and weakness of the company. And also the competition faced. I was able to study about aftermarket department and its orientation towards customer focus by creating value for customers. I thank whole heartedly to my college and the University for providing me such an opportunity which made me to relate the theoretical concepts to the practical application of management.

RATIO ANALYSIS

INTRODUCTION: The study of financial statement is prepared for the purpose of presenting a periodical review or report by the management of and deal with the state of investment in business and result achieved during the period under review. They reflect the financial position and operating strengths or weaknesses of the concern by properly establishing relationship between the items of the balance sheet and remove statements. Financial statement analysis can be under taken either by the management of the firm or by the outside parties. The nature of analysis defers depending upon the purpose of the analysis. The analyst is able to say how well the firm could utilize the resource of the society in generating goods and services. Turnover ratios are the best tools in deciding these aspects. Hence it is overall responsibility of the management to see that the resource of the firm is used most efficiently and effectively and that the firms financial position is good. Financial statement analysis does indicate what can be expected in future from the firm. Financial Ratio Analysis also referred to as 'Quantitative Analysis' is considered to be the most important step while analyzing a company from an investment perspective. It is a study of ratios between various items in financial statements. Ratios are classified as profitability ratios, liquidity ratios, asset utilization ratios, leverage ratios and valuation ratios based on the indications they provide. Balance sheet, Income Statement and Cash Flow Statements are the most important financial statements and if properly analyzed and interpreted can provide valuable insights into a company's business. Financial Ratios is commonly used by current and potential investors, creditors and financial institutions to evaluate a company's past performance to spot trends in a business and to compare its performance with the average industry performance. It also enables them to identify strengths and weaknesses of a business and to justify further investments in the business. Internally, managers use these ratios to monitor performance and to set specific goals, objectives, and policy initiatives.

CLASSIFICATION OF RATIOS: The use of ratio analysis is not confined to financial manager only. They are different parties interested in the ratio analysis for knowing the financial position of a firm for different purposes. In view of various users of ratios, there many types, which can be calculated from the information given in the financial statements. The particular purpose of the user determines the particular ratios that might be used for financial analysis. RATIO CAN BE CLASSIFIED AS FOLLOWS: Ratios

Traditional Classification

Functional classification

1. Balance Sheet

Ratio

2. Profit and loss A/C

Ratio 3. Composite/ Mixed Ratio

1. Liquidity ratios 2. Leverage ratios 3. Activity ratios 4. Profitability ratios

Traditional classifications: Balance sheet ratios: Balance sheet ratios deal with the relationship between two balances sheet items. Profit and loss account or Revenue/Income statements ratios: These ratios deal with the relationship between two profit and loss account items. The items should belong to the same profit and loss a/c. Composite or Mixed ratios: These ratios exhibit the relation between a profit and loss a/c or income statement item and a balance sheet item. Functional classification: Liquidity ratios: Liquidity ratios measure the firms ability to meet current obligations. In fact, analysis of liquidity needs the preparation of cash budgets and cash and fund flow statements but liquidity ratios, by establishing a relationship between cash and other current assets to current obligation provided quick measures of liquidity. A firm should ensure that it does not suffer from lack of liquidity, will result in a poor creditworthiness, loss of creditors confidence, or even in legal tangles resulting in the closure of the company. Leverage ratios: The short-term creditors like bankers and suppliers of raw material are more concerned with the firms current debt-paying ability. On the other, long-term creditors like debenture holders, financial institutions etc., are more concerned with the firms long-term financial strength. In fact, a firm should have strong short-term as well as long-term financial position. To judge the long term financial position of the firm, financial leverage, or capital structure, ratios are calculated. These indicate mix of funds provided by owners and lenders, as a rule, there should be an approximate mix of debt and owners equity in financing the firms assets. Activity ratios:

These ratios are calculated to measure the efficiency with which the resources of a firm have been employed. These ratios are also called turnover ratios, because they indicated the speed with which assets are being turned over into sales Profitability ratios: It is an indication of the efficiency with which the operation of the business is carried on poor operation at performance; many indicate poor sales and hence poor profits. A lower profitability may arise due to the lack of control over the expenses, bankers, financial institutions and other creditors.

Functional classification:

Liquidity ratio Current ratio Liquid ratio Debtors turnover Ratio Creditors turnover Ratio Inventory turnover Ratio

Leverage ratio Debt equity ratio Debt to total capital ratio Interest coverage ratio

Activity Ratio Fixed assets turnover ratio Debtors turnover ratio Inventory turnover ratio Working capital turnover ratio

Profitability ratio Gross profit ratio Net profit ratio Operating ratio Expenses ratio Return on investment Return on equity Earnings per share

Significance of Ratio Analysis:

The significance of Ratio Analysis lies in the fact that it presents facts on a comparative basis and enables the drawing of inferences regarding the performance of a firm. The use is not confined the finance managers alone. They are different parties interested in the ratio analysis for knowing the financial position of a firm for different purpose. The suppliers of goods on credit, banks, financial institutions,

investors, shareholders and the management all make use of ratio analysis as a tool of evaluating the financial position and the performance of a firm. Simplification of Accounting data Helpful in comparative study Focus on trends Setting standards Study of financial soundness NATURE OF RATIO ANALYSIS: Ratio analysis is a technique of analysis and interpretation of financial statements. It is the process of establishing and interpreting various ratios for helping in making certain decisions. It is only a means of understanding of financial strengths and weaknesses of a firm. There are a number of ratios which can be calculated from the information given in the financial statements, but the analyst has to select the appropriate data and calculate only a few appropriate ratios. The following are the four steps involved in the ratio analysis: Selection of relevant data from the financial statements depending upon the objective of the analysis. Calculation of appropriate ratios from the above data. Comparison of the calculated ratios with the ratios of the same firm in the past, or the ratios developed from projected financial statements or the ratios of some other firms or the comparison with ratios of the industry to which the firm belongs. Advantages:
1. To workout the profitability: Accounting ratio help to measure the profitability

of the business by calculating the various profitability ratios. It helps the management to know about the earning capacity of the business concern. In this way profitability ratios show the actual performance of the business. company can be measured. These ratios show the relationship between the liabilities and assets. In case external liabilities are more than that of the assets of the company, it shows the unsound position of the business. In this case the business has to make it possible to repay its loans.

2. To workout the solvency: With the help of solvency ratios, solvency of the

3. Helpful in analysis of financial statement: Ratio analysis help the outsiders

just like creditors, shareholders, debenture-holders, bankers to know about the profitability and ability of the company to pay them interest and dividend etc. analysis a company may have comparative study of its performance to the previous years. In this way company comes to know about its weak point and be able to improve them.

4. Helpful in comparative analysis of the performance: With the help of ratio

5. To simplify the accounting information: Accounting ratios are very useful as

they briefly summarise the result of detailed and complicated computations.

6. To workout the operating efficiency: Ratio analysis helps to workout the

operating efficiency of the company with the help of various turnover ratios. All turnover ratios are worked out to evaluate the performance of the business in utilising the resources.

7. To workout short-term financial position: Ratio analysis helps to workout

the short-term financial position of the company with the help of liquidity ratios. In case short-term financial position is not healthy efforts are made to improve it.

8. Helpful for forecasting purposes: Accounting ratios indicate the trend of the

business. The trend is useful for estimating future. With the help of previous years ratios, estimates for future can be made. In this way these ratios provide the basis for preparing budgets and also determine future line of action

OBJECTIVES OF THE STUDY:

To study the growth and development of HMT (International) Ltd. To evaluate the financial position of the HMT (International) Ltd. To study the financial strength and weakness of the company. To estimate the important financial ratios in HMT (International) Ltd. To know the future prospects of the company. To study the risk and efficiency of operations. To study the trends in finance and analyze various elements in financial analysis To make comparisons between the ratios during different periods. To get an overview on HMT (International) Ltd.

LIMITATION:

The company provides limited financial information. The study is limited to the five years review period from 2006-2010. Time is one of the important factors, the duration of the training is only 10 weeks which is too short to study the organization. Lack of accessibility. As the data are secondary data so the reliability of the result depends upon the reliability of the data published. Insufficient data on the site

SCOPE:

With the help of ratio analysis conclusion can be drawn regarding several aspects such as financial health, profitability and operational efficiency of the undertaking. It ensures a fair return to its owners and secures optimum utilization of firms assets.

Ratio analysis helps in inter-firm comparison by providing necessary data. An inter firm comparison indicates relative position. It provides the relevant data for the comparison of the performance of different departments. The ratio analysis is one of the tools in the hands of those who want to know something more from the financial statements in the simplified manner. Ratio analysis facilitates the management to know whether the firms financial position is improving or is constant over the years by setting a trend with the help of ratios. It may help the management in the task of planning, forecasting and controlling. It provides a reliable data, which can be compared, studied and analyzed. These ratios provide sound footing for future prospectus. The ratios can also serve as a basis for preparing budgeting future line of action. With help of ratio analysis conclusions can be drawn regarding the Liquidity position of a firm. The liquidity position of a firm would be satisfactory if it is able to meet its current obligation when they become due. The ability to meet short term liabilities is reflected in the liquidity ratio of a firm. Ratio analysis is equally for assessing the long term financial ability of the Firm. The long term solvency s measured by the leverage or capital structure and profitability ratio which shows the earning power and operating efficiency, Solvency ratio shows relationship between total liability and total assets. The another dimension of ratio analysis, relevant from the View point of management is that it throws light on the degree efficiency in the various activity ratios measures this kind of operational efficiency.

LIQUIDITY RATIO:

1. CURRENT RATIO:

Current ratio is the ratio which expresses relationship between the total current assets and current liability. And it can be expressed as follows.

.Current asset Current liability Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Current asset 261838 362361 301158 320090 392034 Current liability 96134 190998 122086 127890 175882 Ratio 2.72:1 1.88:1 2.47:1 2.50:1 2.23:1

INTERPRETATION: Current ratio is calculated by dividing current assets by current liabilities, as a conventional role current ratio of 2:1 or more is considered to be satisfactory The current ratio is 2:1 as the norm in the industry. However hmt (I) is not involved in any manufacturing activity and concerned with providing service in order to increase the imports and exports. Hence the ratio according for hmt (I) 2.72 to 2.23 is found satisfactory. When the current asset is more than the current liability indicates financial strength of the organisation and also the increase sundry debtor as resulted increase in the ratio, which is above the level of 2:1 which shows the comfortable position of the company.

CURRENT RATIO:

2. ACID TEST RATIO: This ratio establishes a relationship between quick or liquid assets and current liabilities. Quick assets Current liability

(000) Year 2005-2006 2006-2007 2007-2008 2008-2009 Quick Assets 260237 351399 297877 319966 Current liabilities 96134 190998 122086 127890 Ratio 2.71 1.84 2.44 2.50

2009-2010

386824

175882

2.20

INTERPRETATION: Quick ratio is the ratio of quick assets to current liabilities. A ratio of 1:1 for quick assets and current liabilities is considered as idle . It can be interpreted that the company has more liability and also current assets is increased in 2006-2007 due to increased in debtors, so it difficult for the company to meet current liability. It indicates the inefficient of management. In2005- 2006 the ratio is increased to 2.71 due to increased in assets and decreased in current liability. This ratio is most favourable to the company compare with other ratios. The company has enough assets to meet current liability in 2009-2010 i.e. the ratio is 2.20; it indicates a better short term financial position.

ACID TEST RATIO:

(000)

 PROFITABLILTY RATIO:

1. NET PROFIT RATIO: Net Profit Ratio shows the relationship between Net Profit of the concern and Its Net Sales.

Net profit Sales Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Net profit 5976 13673 8467 10566 26603 Sales 123198 193906 132658 117975 162291 (000) Ratio 4.7 7.05 6.38 8.96 16.39

INTERPRETATION: This ratio establishes relationship between sales and net profit and it indicates the management efficiency in export and imports of the products. From the above table it can be interpreted that the ratio has been increasing for the years2006- 2007 to2009-2010. In2005- 2006 the sale is decreased and earning also because the company made an investment. So the net profit of the company is reduced.

Finally, in2009- 2010 a huge increase in the ratio due to increased in the sale and earning. It indicates the earnings of the company increased compare to previous years. It indicates the growing stage of the company.

NET PROFIT RATIO

4. GROSS PROFIT RATIO: Gross Profit Ratio shows the relationship between Gross Profit of the concern and its Net Sales. Gross profit Net sales

(000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Gross Profit 10970 16500 11240 12830 40000 Net Sales 123198 193906 132658 117975 162291 Ratio 8.9 8.51 8.47 10.88 24.65

INTERPRETATION: It can be interpreted that the company has good management efficiency due to increase in the ratio. From above table the ratio has been increasing from 2005-2006 to 2009-2010. In 2007-08 the ratio has been decreased compare to previous year because the lower sales prices, cost of goods sold fluctuating, variation in sales prices. But in 2010 the gross profit ratio has been increasing compare to previous years due to effective utilization of assets resulting in lower cost of goods sold, the higher sales price and the turnover also increased to 162291. The overall the company has good financial stability due to this ratio has been increasing from 8.47 to 24.65. The above table shows the efficiency of the company and it indicates growth of the company.

GROSS PROFIT RATIO

5. RETURN ON CAPITAL EMPLOYED:

This ratio shows the relationship between the profit earned before interest and tax and the capital employed to earn such profit.

Net profit before tax Capital employed (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 EBIT 9788 16353 10220 12631 39589 Capital employed 213781 214244 221026 232085 254826 Ratios 4.5 7.63 4.62 5.44 15.54

INTERPRETATION: This ratio has a great importance to the shareholders and investors and also to management and also it expressed in percentage, the above table shows that the higher ratio indicates higher return to the shareholders and investor. In 2006 the capital employed is more but earnings is low due to increase in the expenditure, but in 2010 the investment is more and at the same time return also high i.e.15.54% and this ratio influences the market price of the shares. It is better than the previous years ratio.

RETURN ON CAPITAL EMPLOYED

6. RETURN ON EQUITY: Return on equity is also known as return on shareholders investment. The ratio establishes relationship between profits available to equity shareholders with equity shareholders funds.

Net profit after tax Shareholder fund

(000) Financial Year 2005- 2006 2006-2007 2007-2008 2008-2009 2009-2010 Net profit after tax 5976 13673 8467 10566 26603 Equity shareholder 208781 214244 221026 229907 254826 Ratio 2.86 6.38 3.83 4.55 10.44

INTREPRETATION: Return on Equity judges the profitability from the point of view of equity shareholders. From the above table it can be interpreted that the ratio has increased 2007 are 6.38, and in 2006-08 and 09 the ratio is decreased due to inefficiency in the organisation. But in 2010 the ratio is increased to 10.44, it is high return to the shareholder compare to the previous years. Its the sign for further investment by the shareholder and also indicates the growth of the company.

REATURN ON EQUITY

7. RETURN ON ASSET RATIO: Profitability can be measured in terms of relationship between net profit and assets. This ratio is also known as profit-to-assets ratio. EBIT Total Assets (000)

Year 2006 2007 2008 2009 2010

EBIT 9788 16353 10220 12631 39587

Total Assets 316961 415484 353788 370878 441797

Ratios 0.031 0.039 0.029 0.034 0.090

INTERPRETATION: The above table it can be interpreted that the ratio in the current year is increased to 0.090 because of the increment in the profit from sales due to the increase in Operations and fixed assets also increased, it indicates that the company is having efficiency to utilization assets. From2005- 2006 to 2008- 2009 the ratio is 0.029 to 0.034 is decreased because the fixed assets are reduced due to the depreciation and no major increments in fixed assets and also the turnover is decreased because the company is not having efficiency to utilization assets. We come to know that the company is having growth opportunity in future.

RETURN ON ASSET RATIO:

8. EARNING PER SHARE:

Net profit after tax Number of equity share (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Net profit after tax 5976 13673 8467 10566 26603 Number of equity share 4800 7200 7200 7200 7200 Ratio 12.45 18.99 11.76 14.68 36.95

INTERPRETATION:

Earnings per share ratio are used to find out the return that the shareholders earn from their shares. After charging depreciation and after payment of tax, the remaining amount will be distributed by all the shareholders. Net profit is increased due to the huge increase in the sales. In 2006, 2008 and 2009 the net profit is low so it is not much beneficial to the equity shareholder. But in 2007 the earning is little bit increased, but in 2010 there is a huge increase in net profit, so the earning per share to the shareholder is increased. It is a healthy for the company and favour to the equity shareholder.

EARNING PER SHARE RATIO:

ACTIVITY RATIO:

9. CAPITALTURNOVER RATIO: Capital turnover ratio establishes a relationship between net sales and capital employed. The ratio indicates the times by which the capital employed is used to generate sales.

Net sales Capital employed (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Net sales 123198 193906 132658 117975 162291 Capital employed 208781 214244 221026 229907 254826 Ratio 0.59 0.91 0.60 0.51 0.64

INTERPRETATION: This is another ratio to judge the efficiency and effectiveness of the company like profitability ratio. Due to huge increase in the net profit the capital employed is also increased along with income from sale. Both are affected in the increment of the ratio of current year. In 2007 there is huge income from the sale, so the capital turnover ratio is increased 0.91 compare to previous year.

In 2005-2006 &2007- 2008 constant in the ratio its stability for the organization. But in 2009-2010 increased in turnover and capital employed compared to previous years, so it indicate future growth of the company.

CAPITAL TURNOVER RATIO

10. DEBTORS TURNOVER RATIO: This ratio measures the average number of days credit given to debtors. It helps to assess the efficiency of the debt collection department. Debt collection period should be as low as possible, consistent with maintaining customer goodwill and market trend.

Credit sales Average account receivable (000)

Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Credit sales 123198 193906 132658 117975 162291

Average account receivable 40552 60555 62798 48982 78541

Ratio 3.04 3.20 2.11 2.41 2.07

INTERPRETATION: A high turnover indicates an efficient credit management system and the company is able to convert its receivables into cash. From the above table it can be interpreted that the ratio has been increased from 2005-2006 to 2006-2007. It shows the higher the turnover, the shorter the time between sales and cash collection. These ratios indicate the efficiency of the company to collect the amount due from debtors. It determines the efficiency of management and company. Due to high ratio the company can earn reasonable profit. But in 2007-2008 to 2009- 2010 the ratio has been decreased from 2.07 to 2.41, it indicates the company extending credit terms. So it indicates the inefficiency of management and company.

DEBTORS TURN OVER RATIO

11. FIXED ASSETS TURNOVER RATIO:

Sales Average fixed assets (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Sales 123198 193906 132658 117975 162291 Fixed assets 55123 53123 52630 50788 49763 Ratio 2.23 3.65 2.52 2.32 3.26

INTERPRETATION: The fixed assets turnover ratio indicates the number of times fixed assets has been fixed over. The highest the ratio the more efficient has been the utilization of fixed assets. On the other hand a low turnover ratio might be an indication of over capitalization or inefficient use of fixed assets.

From the above table it can be interpreted that the ratio has been decreasing from 2005-2006 to2008- 2009. It indicates that the company has inefficiency in utilization of fixed assets. But in 2009-2010 the company has high turnover and low fixed assets results in the increase in the ratios. When compare to previous years except in2006- 2007. So it indicates that the company is having more utilization of fixed assets. There is a possibility of increase in income to the company. It shows the good sign for the company.

FIXED ASSETS TURNOVER RATIO:

12. NET WORKING CAPITAL TURNOVER RATIO : Working capital turnover ratio establishes a relationship between net sales and working capital.

Sales Net Working capital (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Sales 123198 193906 132658 117975 162291 Net working capital 165704 171363 179072 192200 216152 Ratio 0.74 1.13 0.74 0.61 0.75

INTERPRETATION: Sale is greatly increased due to the extra invoice for Operations and the working capital is also increased greater due to the increase in sales because the huge increase in current assets. In2005- 2006 to 2006-2007 a high turnover 193,906,000 indicates a sign of overtrading and puts the firm in financial difficulties; it also indicates that the company requires additional funds to support its financial structure. In 2008-2009 to 2009- 2010 sale is raised and the current assets are also raised together resulted in the decrease, it indicates that the working capital has not been used efficiently compare to other ratios, so it adversely affect on the efficiency of the management and company.

NET WORKING CAPITAL TURNOVER RATIO:

13. TOTAL ASSET TURNOVER RATIO:

Sales Total assets (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 Sales 123198 193906 132658 117975 Total assets 316961 415484 353788 370878 Ratio 0.39 0.47 0.37 0.32

2009-2010

162291

441797

0.37

INTERPRETATION: It can be interpreted that the company assets turnover ratio is low from2005- 2006 to 2009- 2010, it indicated that the company has too many unproductive assets like inventories for its current level of sales. The level of sales has not yet reached the amount appropriate for invested in total assets. The above ratios indicated that the assets has not been effectively utilized by the company and there is increased in total assets but gradually decreased in turnover, so it adversely affect on the income of the company.

TOTAL ASSET TURNOVER RATIO:

14. INVENTORY TURNOVER RATIO:

Stock turnover ratio is a ratio between cost of goods sold and average stock. This ratio is also known as stock velocity or inventory turnover ratio Annual Sales Average Inventory (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Annual Sales 124500 198019 133080 118784 163512 Average Inventory 3653 6282 7122 1703 2667 Ratio 34times 32times 19times 70times 61times

INTERPRETATION: From the above table it can be interpreted that the company has good inventory turnover ratio. In 2006-2007 to 2007-2008 the ratio has been decreasing to 19 times compare to other ratio due to ineffective utilization of inventory and turnover also decreased, so the inefficiency turnover makes the company to earn a low margin profit. In 2007-2008 to 2008-2009 the ratio has been increased to 70times it shows the effective utilization of inventory. The various factors affect the inventory level of the company such as product, demand pattern, fund availability and so on. A proper inventory turnover makes the business to earn a reasonable margin of profit.

The overall interpretation the company has average inventory turnover ratio from last two years i.e. 60 to 70times, it indicates the efficiency of the company and also growth rates.

INVENTORY TURNOVER RATIO:

15. AVEARGE DEBT COLLECTION PERIOD: Debt collection period is the period over which the debtors are collected on an average basis. 360 days Debtors turnover ratio (000)

Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Days 360 360 360 360 360

Debtors turnover ratio 3.04 3.2 2.11 2.41 2.07

Ratio 118 113 171 149 174

INTERPRETATION: The above table it can be interpreted that the ratio has been increasing from 20052006 to 2009-2010. In 2005-2006 to 2006-2007 the debt collection period is low 113 and 118 compare to other years, it indicates the efficiently the debts are collected. So the companys cash flow increases due to efficiency of the management and company. From 2007-2008 to 2009-2010 the debt collection period has been increasing from 149 to 174 due to companys liberal credit terms. It indicates the inefficiency of the management and company. So the company may earn low profit margin. The overall interpretation the ratio has been decreasing from 2005-2006 to 20092010 it indicates the net profit margin may be decreased to the company.

AVEARGE DEBT COLLECTION PERIOD:

SOLVENCY RATIO:

16. PROPRIETARY RATIO: The proprietary ratio establishes the relationship between shareholders funds to total assets. It determines the long-term solvency of the firm. This ratio indicates the extent to which the assets of the company can be lost without affecting the interest of the company. Proprietors funds Total assets (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Proprietors funds 208781 214244 221026 229907 254826 Total assets 316961 415484 353788 370878 441797 Ratio 0.66 0.52 0.62 0.62 0.58

INTERPRETATION: The above table interpreted that the ratio in HMT (International) is ranging from 0.52 to 0.62. It shows the stability of the company Total assets, includes fixed and current assets. The fixed assets are reduced because of the depreciation and there are no major increments in the fixed assets. The current assets are increased compared with the years. The proprietors funds and total assets are increased at the same time ratios also increased. A high proprietary ratio indicates the strong financial position of the organization. So it effective utilization of assets results in increase in the ratios.

PROPRIETARY RATIO:

17. CURRENT ASSET TO FFIXED ASSET:

Current assets Fixed assets (000) Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 Current assets 261838 362361 301158 320090 392034 Fixed assets 55123 53123 52630 50788 49763 Ratio 4.75 6.82 5.72 6.30 7.88

INTERPRETATION: It can be interpreted that the company is having much current assets due to increase in the sundry debtor and fixed assets of the company are decreased due to charge of depreciation. From2005-2006 to 2009- 2010 the current assets of the company are increased from 261838 to 392034 and fixed assets have been decreasing from 55123 to 49763 resulted increases in the ratios from 4.75 to 7.88.with corresponding increase in the profit. But especially in 2009-2010 there is huge increase in current assets due to increase in debtors i.e. 95786 at the same time fixed assets are decreased corresponding to huge profit when compare to previous year, it will show that the company is expanding.

CURRENT ASSET TO FFIXED ASSET:

18. FIXED ASSETS TO NET WORTH: Fixed assets to net worth ratio can be computed by dividing fixed assets by net worth

Fixed Assets Net worth (000)

Year 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010

Fixed Assets 55123 53123 52630 50788 49763

Net Worth 208781 214244 221026 229907 254826

Ratio 0.26:1 0.25:1 0.24:1 0.22:1 0.20:1

INTERPRETATION: From the above table it can be interpreted that the ratios has been decreasing from 2005-2006 to 2009-2010. The reasons for decrease in the ratio from 2005-2006 to 2009-2010 are due to the company investing the available surpluses in the current assets and meeting the past liabilities. When the fixed assets are more than the net worth, it adversely affect to the company because the depreciation will reduce the profit. The above ratio is favourable to the company because net worth is higher than the assets from 208781 to 254826. The company can make further investment.

FIXED ASSETS TO NET WORTH:

EXECUTIVE SUMMARY:
The project undertaken on the topic Evaluation of Ratio analysis while undertaking the project on HMT (INTERNATIONAL) LTD as a wholly owned subsidiary of hmt ltd and it handles international projects and export of products of its parent company and other Indian manufacturers and its effective operations and the objective and the policies of a public sectors enterprise and are different for any private organization. In plant Training (PART-A), we can notice the industry profile which contribution to the economy, company profile in respect of their vision, mission, management, area of operation, work flow of the company etc In this part it shows the strengths, weaknesses of the company & also the opportunities & threats from the external environment of the company. It also analyzes the financial position of the company . In Research study (PART-B), it notice that the role of financial factors while undertaking the HMT (I) project & also realize the importance of financial criterias while undertaking the HMT (I) project. From this it also shows that the fluctuation of risk, when company provides more weightage to any one criteria. It helps us to know how the financial factors have their impact on evaluating the project. Selection of a project plays a vital role in any company. It is one of the difficulty & risky task for a company to select the project because it includes number of factors to be analyzed before undertaking the project. On this basis, PART-B contains analysis & interpretation of the data which is given by the company;

After the analysis of Financial Statements, the company status is better, because the Net working capital of the company is more than the last years position. The company profits are huge in the current year; it is better to declare the dividend to shareholders. The company is utilising the fixed assets, which majorly help to the growth of the company. The company should maintain the fixed assets properly.

The companys capitals are effectively utilised and the sales turnover also increases. The inventory and other sources are effectively utilised by the company.

This indicates maximize their wealth & also brings some more profit to the company.

FINDINGS:
A ratio is a widely used tool of financial analysis. A ratio reflects the financial position of the company to the users such as management creditors and investors. The ratios which are calculated to evaluate the financial position of HMT (I) are broadly classified in to liquidity, leverage, and profitability and activity ratios.

The liquidity ratios of HMT (International) Ltd is satisfactory at 2005-2006 is satisfactory i.e.2.71 but after this period the company has average ratio i.e. 2.23, it indicates the stability performance of the company. The profitability ratio of HMT (International) Ltd had shown that the overall performance of the company is satisfactory i.e. 15.54 when compare to previous years ratio. The activity ratio had shown that the HMT (International) Ltd is having credit efficient management system and these ratios having average performance except inventory turnover ratio, it indicates the efficiency of the company. The earning also increased. The average collection period has been increased from 118 to 174 during 2005-2006 to 2009-2010. It shows the inefficient of the management and company. The solvency ratio of HMT (International) Ltd has been slightly decreasing , it indicates the average performance of the company during 2005-2006 to 20092010, it shows that the company earnings is slightly decreased compare to other ratio of the company. The overall ratio indicates the company performance is better. It results in earnings of the company increased.