EXECUTIVE SUMMARY

In todays rapidly changing business environment, organizations have to respond quickly to requirements for people. The Financial market has been witnessing growth which is manifold for last few years. Many private players have entered the economy thereby increasing the level of competition. In the competitive scenario it has become a challenge for each company to adopt practices that would help the organization stand out in the market. The competitiveness of a company of an organization is measured through the quality of products and services offered to customers that are unique from others. Thus the best services offered to the consumers are result of the genius brains working behind them. Human Resource in this regard has become an important function in any organization. All practices of marketing and finances can be easily emulated but the capability, the skills and talent of a person cannot be emulated. Hence, it is important to have a well-defined recruitment policy in place, which can be executed effectively to get the best fits for the vacant positions. Selecting the wrong candidate or rejecting the right candidate could turn out to be costly mistakes for the organization. Therefore a recruitment practice in an organization must be effective and efficient in attracting the best manpower.

About Hindustan Tyres Ltd. "Hindustan Cycles & Tubes Limited" is one of the most reliable name in the field of Tyres and Tubes. The company was established in 1968. Today, it has become one of the leading manufacturer of Bicycle/ Automobile Tyres & Tubes. During it's long existence it has created it's own niche both in the domestic arena as well as in the export market because of its commitment and adherence to high quality standards. Today the company, apart from having a marked presence in India is also exporting it's products to Latin America, Africa, Middle Eastern, South Asian & Arab countries. The company ensures high international quality of it's products by implementing hi-tech quality checks right from the sourcing of raw materials till the production and shipment of the finished products. The company has highly skilled and dedicated staff working under the guidance of our respected Chairman Mr. B.C. Maini. The Research & Development Department of the company has the most latest equipments that ensures only the best quality of raw material is to be used and the best quality of tyres and tubes are produced. We are one of the very few distinguished companies which are ISO 9001 certified in the Tyre Industry. Today Hindustan tyres has carved out a space in the highly competitive market through its thrust on providing quality products at

affordable prices. The testimony to this fact lies in supply of our tyres to corporate giants like Hero, Atlas, Avon and many other payers both in domestic as well as in International arena. The company made its foray into the Exports in the year 1991 which also saw policy of Liberalization & Globalization being adopted by our government. The company has a full fledged Export Department which is catering to the requirements of the global market. The companys mantra "Think Global Act Local" has yielded rich dividends in garnering a strong share in Bicycle/ Automobile Tyres in the International Market.

Country AFGHANISTAN ARGENTINA BANGLADESH BAHRAIN BOLIVIA BRAZIL BURKINA FASO CHILE COLOMBIA EGYPT FRANCE GHANA HONDURAS HUNGARY INDONESIA IRAN ITALY IVORY COAST JORDAN KENYA KUWAIT LEBANON MALAWI MALDIVES

Code AF AR BD BH BO BR BF GL GO EG FR GH HN HU ID IR IT GI JO KE KW LB MW MV

Country MALI MEXICO MOROCCO NIGERIA PAKISTAN PANAMA PARAGUAY PORTUGAL SAUDI ARABIA SENEGAL SOUTH AFRICA SPAIN SRI LANKA SWEDEN SYRIA TANZANIA TRINIDAD, TOBAGO TUNISIA TURKEY UAE UGANDA UNITED STATE VENEZUELA ZIMBABWE

Code ML MX MA NG PA PA PY PT SA SN LK SE SY TZ TT TN TR AE UG USVE ZW

AHMEDABAD 1949/2,First Floor, Opp. Purohit Hotel, Khadia Char Rasta Ahmedabad 380 001 Phone: 0792120898 PUNE 995, 2nd Floor, Raviwar Peth, Pune - 411002 Phone:020 4474983 LUCKNOW H-11-95,Sector-D L.D.A. Colony, Kanpur Road Lucknow 226012 Phone: 0522 432524 GUWAHATI A.k Azad Road Beside Lords English School Rehabari, Guwahati 781008 Phone 0361-513025

CHENNAI No.2 1st Floor Kendappa Chetty Street Phone No. 044-5244450

KOLKATA R.No. 11 A, 9/12, "E" Block, 11rd Floor, Lal Bazar Street, Mercantile Building, Kolkata 700001 Phone: 033 2435129, 2212129 New DELHI 7/3, Adarsh Nursery Shed No.16 Kirari Road, Near Railway Crossing Phone No. 011-5479251 ALLAHABAD 4/2 Bai-Ka-Bagh Near Post office Keyclganj Allahabad 211003 Phone: 0532 417086 RAIPUR 327-328,Ward No4, Purana Mangal Bazar, Gudhiyari,Raipur-492009 Phone: 0771 529735

AGRA 6/162, Pathak Surajbhan, Bellanganj Phone No. 0562-622786

RANCHI 1231-D, Sahu Colony, Jalan Road,Upper Bazar Ranchi 834001 Phone: 0651 315537

LUDHIANA Jaspal Building, G.T Road Miller Ganj, Near Vishawkarma Chowk ludhiana 141003 Phone 0161 534829

AMBALA CANTT GORAKHPUR 11-K, Guru Nanakpura C 127/10&c 127/15, Kuldeep Nagar, Dilezakpur,jatashnker Ambala Cantt 133001 Chowk,Gorakhpur 273001 Phone 0171 2612193 Phone 0551 340840

MEERUT 6 JAWALAPURI, Lord Krishna market, opp. Transport Nagar, delhi road Meerut-2 Phone 0121 401473 INDORE Plot No 21, Timber Scheme No 31, Navlakha,Indore 451001 Phone 0731 466284

ROHTAK Plot No. 51-52 I.D.C Hissar Road, Rohtak 124001 Phone 01262 78434

BANGALORE Municipal No. 126/07/02 5th Cross, Near Kalasipalyam Extn. Layout Bangalore 560002 Phone 080 2711446

MUZAFFARPUR B.B Ghosh Lane Motijheel, Muzaffrpur - 842001 Phone 0621 247416 Jaipur 645, 2ND Floor, kishore kunj, kishan Ploe Bazar, jaipur - 302001 Ph.no. 0141-2316909 CHANDIGARH 8,Industries Area, Phase-1 Near new Kholi Transport Co. Chandigarh - 160002 Phone: 0172-641703

SILIGURI C/o Nisidh Bhosh Rai, 607/1 Deshbandhupara Behind indoor stadium Ward No.29 Post Stadium MADURAI 2-F, Muthiah Chettiar Perulkar Layout Street, Sellur, Maduari Phone: 0452-653393 KANPUR 109/375, R.K Nagar, G.T Road, Kanpur- 208012 Phone 0512-54407,5417280

BAEREILLY 6.A Hajiapur Pilibhit Road Near Suhag Wedding Hall Baereilly - 243005 Phone 0361-531856 VARANASI C- 27/170, A-2, jagatgani, Varanasi- 221002 Phone : 0542 - 204381

NAGPUR C/O Dr. Mishra's House, Near St Xavier School, 6-Parulkar Layout, Near Ajni square Nagpur - 440015 Phone : 1712-240454 KASHIPUR Opp. Dr single nursing Home, C/O Vinay Kumar Vijay Kumar Mata mandhir Road, kashipur - 244713 Phone: 05947-72689

VIJAYWADA CUTTACK D. No. 7-3-10, Beside Plot No. 925, Jhanjir Marupilli Chitti School, Mangala, Raghava Ready Road (Bastiz Colony) Mahanthipuram, P.O Telanga Bazar Kothapet Cuttack - 753009 Vijayawada - 520001 Phone: 0671-617843 Phone : 0866-563729 PATNA New Area, Kadam Kuan, Anugrah Narian Road, Patna: 800003 Phone: 0612-685138 JABALPUR 1688/1 Behind Patel Ice Cream, Model Road, (L.B. Shastri Marg) Napier Town Phone No. 0761-564731

PRODUCTS

Bicycle Tyres

Automobile Tyers

Agriculture Tyres

Bicycle Tubes & Tubes Bicycle Components Valves

Bicycle Tubes Box & Packing & Tubes Valves

A REVIEW Hindustan Tyres Pvt. Ltd. vs Collector Of Central Excise

1. Hindustan Tyres Pvt. Ltd., Bombay has filed an appeal being aggrieved from order-in-appeal No. M-1350/B-I/381/85, dated 18.7.1975 passed by the Collector of Central Excise (Appeals), Bombay. 2. Briefly the facts of the case are that the appellant is holding L-4 licence in respect of Tariff Item 68 and are manufacturing Camel Back falling under T.I. 16A(ii) [Should read T.I. 16A(2)]. The appellant is not selling camel back but utilising for the retreading of old tyres and have been paying duty on the said item on the assessable value on the basis of costing. Accordingly, price list filed by them in proforma VIB as laid down under Rule 6 of Central Excise Valuation Rules, 1975. Alongwith the price list the appellant was furnishing the details of costing, duly certified by their auditor. However, since the company's balance sheet for the year was not ready at the time of filing of price lists, the company had been showing a notional margin of profit of 5% or 10% as the case may be, over and above the cost of production. The said price lists had been approved provisionally under Rule 9B of Central Excise Rules pending verification of the costing details furnished by the company as also verification of the company's gross profit as reflected in their balance sheet for the relevant period. The learned Assistant Collector had observed that the value of camel back included the following expenses :

(1) expenses incurred on strip cutting; (2) staff salaries; (3) all other overhead expenses as shown in Annexures A, B and C to the adjudication order apart from the expenses already taken into consideration by the company. The appellant was accordingly directed to include such expenses while working out the cost of production of camel back and file revised price lists. The price lists Nos. 37/82, 306/82, 1A/83-84 and 339/84-85 were also approved accordingly. The appellant had contended that expenses incurred towards labour for cutting camel back into strips, rent payable on the premises used for the manufacturing of sheets and expenses incurred towards administration were not included in the price list under reference submitted from time to time and approved provisionally under Rule 9B and the duty was paid on camel back removed for captive consumption in sheet form and not after they were cut into strips. Camel back in strip form after debiting duty is cut into strip to match the size of tyre to be treated. The appellant had contended that the expenses incurred by the appellant were not to be added back. The learned Assistant Collector did not accept the defence of the appellants and had held that expenses incurred on (1) strip cutting; (2) staff salaries; and (3) all other overhead expenses as shown in Annexures A, B and C to the adjudication order apart from the expenses already taken into consideration by the company had to be added back for working out the cost of production of camel back

and file revised price list accordingly. Being aggrieved from the aforesaid order the appellant had filed an appeal to the Collector of Central Excise (Appeals). Before the Ld. Collector of Central Excise (Appeals) the appellant had contended that the cost of production is to be restricted to the following elements/ ingredients related to the manufacturing excisable goods under costing: (a) Cost of raw materials; (b) Conversion cost upto the stage of excisability of the product; (c) Manufacturing overheads based on conversion cost; (d) Administration overheads based on manufacturing overheads. The learned Collector of Central Excise (Appeals) had observed that the Assistant Collector had rightly included the expenses incurred for cutting sheets of Camel Back into strips, the rent payable for the area occupied for such cutting, etc., in the cost of production of camel back. He had also confirmed the findings of the Assistant Collector as to the addition of administrative expenses. He had confirmed the findings of the Assistant Collector and had rejected the appeal. Being aggrieved from the aforesaid order the appellant has come in appeal before the Tribunal. 3. Shri V. Lakshmikumaran, the learned Advocate, has appeared on behalf of the appellant. He has reiterated the contentions made before the lower authorities. He has stated that the cutting charges from

sheet to strip and labour charges are not to be included in the assessable value. He states that the appellant had duly furnished the details as to the cost of production of camel back duly certified by their auditor and arriving at assessable value after adding the cost of production by a notional profit of 5 to 7% as the case may be. The learned Assistant Collector had raised the cost of production to a higher figure. Shri Lakshmikumaran has referred to a judgment of the Hon'ble Supreme Court in the case of P.C. Cheriyan v. Mst. Barfi Devi reported in 1979 ELT (J-593) where the Hon'ble Supreme Court had held that retreading of old tyres does not bring into existence a commercially distinct or different entity as the old tyre retains its original character or identity as a tyre. Nor does it completely transform it into another commercial article although it improves its performance and serviceability as a tyre. So from retreading no new or commericaily distinct article emerges and, therefore, 'retreading is not process of manufacture'. Shri Lakshmikumaran further states that cutting expenses from sheet to strip are not to be added for computing the cost of camel back. The value of the waste of the cutting sheet has to be excluded from the manufacturing cost. Shri Lakshmikumaran has pleaded for the acceptance of the appeal. 4. Shri P.K. Ajwani, Ld. S.D.R., who has appeared on behalf of the respondent, states that the appellant did not take this plea earlier on account of deduction of the cost of waste of cutting sheets. It is a new issue and the same should not be permitted to be raised at this stage and in the price list the appellant has only mentioned the price of the

camel back. Shri Ajwani has referred to the order-in-original and Rule 6(b) of the Central Excise (Valuation) Rules, 1975 where it is provided that where excisable goods are not sold by the assessee but are used or consumed by him or on his behalf in the production or manufacture of other articles, the value shall be based :(i) on the value of the comparable goods produced or manufactured by the assessee or by any other assessee: Provided that in determining the value under this sub-clause the proper officer shall make such adjustments as appear to him reasonable, taking into consideration all relevant factors and, in particular, the difference, if any, in the material characteristics of the goods to be assessed and of the comparable goods; (ii) If the value cannot be determined under the Sub-clause (i), on the cost of production or manufacture, including profits, if any, which the assessee would have normally earned on the sale of such goods. 5. Shri Lakshmikumaran in reply states that the overhead expenses are not to be added in the cost of production and has reiterated his earlier arguments. He has pleaded for the acceptance of the appeal. 6. We have heard both the sides and have gone through the facts and circumstances of the case. It is admitted fact that the appellant manufactures camel back which is used for retreading of tyres. Came, back so manufactured by the appellant is captively consumed by the

appellant and the valuation for the purpose of assessment has to be done on the basis of provisions of Section 4 of the Central Excises and Salt Act, 1944 read with Rule 6(b) of the Central Excise (Valuation) Rules, 1975. For proper appreciation of the legal position Section 4(l)(b) of Central Excises and Salt Act, 1944 and Rule 6(b) of the Central Excise (Valuation) Rules, 1975 are reproduced below :"Section 4(1 )(b) 4(1)(b) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to value, such value shall, subject to the other provisions of this section, be deemed to be - XXX XXX XXX (b) where the normal price of such goods is not ascertainable for the reason that such goods are not sold or for any other reason, the nearest ascertainable equivalent thereof determined in such manner as may be prescribed. Rule 6(b) Where the excisable goods are not sold by the assessee but are used or consumed by him or on his behalf in the production or manufacture of other articles, the values shall be based (i) On the value of the comparable goods produced or manufactured by the assessee or by any other assessee :

Provided that in determining the value under this sub-clause the proper officer shall make 'such adjustments as appear to him reasonable taking into consideration all relevant factors and, in particular, the difference, if any, in the material characteristics of the goods to be assessed and of the comparable goods; (ii) If the value cannot be determined under the Sub-clause (i), on the cost of production or manufacture, including profits, if any, which the assessee would have normally earned on the sale of such goods"; A simple perusal of Section 4 and Rule 6(b) of the Central Excise Rules clearly indicates that the normal profits have to be added to the cost of production or manufacture. Hon'ble Supreme Court in the case of Assistant Collector of Central Excise and Ors. v. Madras Rubber Factory Ltd. and Ors. reported in 1987 (27) ELT 553 (SC) had held that interest on finished goods until they are sold and delivered at the factory gate is not deductible. The Hon'ble Supreme Court had based the judgment on "an earlier judgment in the case of Union of India and Ors. v. Bombay Tyre International Ltd. and Ors. etc. reported in 1983 (14) ELT 1896. Paras 4 and 14 from the judgment of. the Hon'ble Supreme Court in the case of Assistant Collector of Central Excise and Ors. v. Madras Rubber Factory Ltd. and Ors. reported in 1987 (27) ELT 553 (SC) are reproduced below :Para 4

"The appeals further also raise the issue of whether the price to the Defence Department Ex-factory gate (ex-factory is to be considered as the wholesale cash price under old Section 4 as this was disallowed by the Assistant Collector, and further the issue as to the method of computation of assessable value where the selling price is a cu-duty price. This issue involves the considerations as to how Excise Duty has to be deducted, whether after deducting permissible deductions or otherwise. We propose to deal with the issues as follows. For the purpose of this judgment we are not repeating and setting out the text of the unarnended Section 4 and the amended Section 4 as the same are exensively quoted in our judgment in Union of India v. Bombay Tyres International Ltd. [1983 (l4) ELT 1896]. Recapitulating our judgment in Union of India & Ors v. Bombay Tyres International Ltd. (Supra) we held that "broadly speaking both the old Section 4(a) and the new Section 4(l)(a) speak of the price for sale in the course of wholesale trade of an article for delivery at the time and place of removal, namely, the factory gate. Where the price contemplated under old Section 4(a) or under the new Section 4(l)(a) is not ascertainable, the price is determined under the old Section 4(b) or the new Section 4(l)(b). Now, the price of an article is related to its value (using this term in a general sense), and into that value are poured several components, including those which have enriched its value and given to the article its marketability in the trade. Therefore, the expenses incurred on account of the several factors which have contributed to its value upto

the, date of sale, which apparently would be the date of delivery, are liable to be included. Consequently, where the sale is effected at the factory gate, expenses incurred by the assessee upto the date of delivery on account of storage charges, outward handling charges, interest on inventories (stocks carried by the manufacturer after clearance), charges for other services after delivery to the buyer, namely after sales service and marketing and selling organisations expenses including advertisement expenses cannot be deducted. It will be noted that advertisement expenses, marketing and selling organisation expenses and after sales service promote the marketability of the whole and enter its value in the trade. Where the sale in the course of wholesale trade is effected by the assessee through its sales organisation at a place or places outside the factory gate, the expenses incurred by the assessee up to the date of delivery under the aforesaid heads cannot, on the same grounds, be deducted. But the assessee will be entitled to a deduction on account of the cost of transportation of the excisable article from the factory gate to the places where it is sold. The cost of transportation will include the cost of insurance on the freight for transportation of the goods from the factory gate to the place or places of delivery." Interest on finished goods from the date of the stocks are cleared till the date of the sale was disallowed by the Assistant Collector, Kottayarn. This head has again been urged for our consideration as a proper deduction for determination of the assessable value. As quoted in our judgment in Union of India and Ors. v. Bombay Tyres

International Ltd. (supra), we have held that expenses incurred on account of several factors which have contributed to its value upto the date of sale which apparently would be the date of delivery at the factory gate are liable to be included. The interest on the finished goods until the goods are sold and delivered at the factory gate would therefore necessarily according to the judgment in Bombay Tyres International case (supra) have to be included but interest on finished goods from the date of delivery at the factory gate upto the date of delivery ' from the sales depot would be an expense incurred after the date of removal from the factory gate and it would therefore, according to the judgment in Bombay Tyre International case (supra) not be liable to be included since it would add to the value of the goods after the date of removal from the factory gate. We would, therefore, have to allow the claim of MRF Ltd. as above." In the present matter before us, the appellant has captively consumed the camel back and the expenses incurred for the manufacture of the same with reasonable profit have to be added. The Learned advocate had argued that there were some wastes while cutting the sheet into strips and Shri Ajwani, SDR, had objected to the raising of this plea for the first time before the Tribunal. Undoubtedly, a fresh plea can always be taken before the Tribunal provided there is material already on record. We do not find any force in the argument of the learned SDR that this plea cannot be raised at this stage. The Hon'ble Kerala High Court in the case of CAT v. India Sea Foods reported in 168 ITR 721 had held that the Tribunal was right in Law in allowing to raise for

the first time before it, the ground pertaining to the correct previous year in so far as the assessment of capital gains was concerned. Accordingly we overrule the objection of the learned S.D.R. On coming to the merits of the matter we would like to observe that the gross profit of 9.0294% added to the cost of manufacture already includes salaries and administrative expenses. Administrative overheads clearly allocable to other two activities (manufacture of solid tyres and retreading of old tyres) cannot go into the costing of camel back. Since the assessment was at sheet stage, post-assessment costs on cutting strips out of sheets cannot be included. If the revenue want to shift the assessment stage to strips, then logically the cutting wastage should also be taken into account. Clearance of camel back from other factories is generally in sheet form, however, Item 16A(2) covers both sheets and strips whereas in the appellants' case the excise duty is levied on the manufacture of camel back. As such we hold that there is no justification for adding the cutting expenses from sheet to strip for computing the cost of camel back. Accordingly we hold that the administrative overhead expenses which are not connected with the manufacture of camel back sheets cannot be included in computing the cost of production. In the result the appeal is allowed in these terms. Revenue authorities are directed to give consequential effect to this order.

Data Used There were mainly two sources of data collection Primary data: Survey method Personal interview with candidates In depth conversation with the placement agency

Secondary data: Study of recruitment policy Websites Published articles

Research methodology used Study of recruitment and selection at Hindustan Tyre Ltd. by the manual provided by the HR department;

Web sites Journals Magazines Books

Findings

Huge investment of time; Huge recruitment cost;

To pursue these, I would be going through the recruitment policies of the company. By active participation in the recruitment process, the areas where improvement can be bought about can be identified. Thus the whole research would be done under the guidance of external guide. It will also involve recruitment and selection processes, reading the material provide internally by the organization, information from the new employees.

Recruitment & Selection Process

Every workplace is unique. It is important for you to understand and define the values, goals, policies, and practices that describe your organization. If you can clearly express who you are and what youre looking for, your recruitment efforts will be more successful because prospective applicants can assess their fit with your needs. Use the unique characteristics of your organization to your advantage and promote them as a selling point in your recruitment efforts. A solid recruitment plan, careful attention to selection and ongoing commitment to retention mean that you will need to spend less time, energy and money replacing staff. Good recruitment begins with good planning. Before you get started, ask yourself some important questions. Take the time to find out the answers before you place that ad or post the help wanted sign. The following graphic highlights some of the important topics you need to consider before moving ahead

Know your organization

What is your organizational culture (norms, values, traditions) ? What is your organizations vision ? Why would someone want to work in your organization?

Know your hiring needs

Whats coming up that might create the need to hire new workers? For example, increased sales or new product lines, new technology, anticipated turnover.

Who or what can provide you with this information? For example, strategic plans, sales reports, records of past hiring patterns, line managers and others in the know.

Know what you already have

What skills and abilities do your current employees. What members of your organization might be able to meet future skills need.

Know the work

What are the main tasks ? What are the key responsibilities ? What knowledge attitude & skills are required ? What experience, special skills & qualification ?

Know the labor market

What skills are in short supply ? What competitive salary for this kind of work

Know your talent sources

As you plan your talent search, be creative. Rather than targeting the same workers and using the same strategies as everyone else, consider your options. All of the following populations face barriers to employment and may have a lot to offer your organization.

Know your options

What recruitment strategies can you consider ? What resources (time, value & money ) do you have to support for your organization.

Measure & evaluate

This step might be as simple as adding the question. How do you hear about us? record keeping using a chart like the following template will help you to evaluate the strategies you choose. Having the flowchart ready at the onset of your recruitment campaign will help you track costs and results from dayone

Rules and Regulations of Recruitment & Selection Process in Organization :

To provide clarification and detail of the core commitments laid down in the organization code of Practice for Recruitment and Selection.

To offer step by step support to all those involved in the recruitment and selection of organisation;

To ensure that there is a consistent and unbiased procedure for the recruitment and selection in the organization.

To act as the basis of an informal contract between recruiters and organization administration to make the recruitment process as speedy and efficient as possible.

Recruitment Process Recruitment process of defining a job and attracting applicants for the vacant post. It is the process of finding and attracting capable applicants for employment. the process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new applicants are selected. Selection Process : Selection is the process of choosing the most appropriate candidate to fill the post from among all those who apply. Selection is the pivot point between recruitment and retention. Hopefully your efforts have gained you several qualified candidates. Now you have to decide who

is the best fit for the job. You need to plan a process that is fair and objective and results in choosing the best person for the job. Taking some time to plan ahead will help you to find an individual whose skills and talents will be an asset to your organization, a person who will want to keep you as an employer as well The recruitment and selection process below are designed to withstand scrutiny and to fulfill the legal obligations placed on all recruiters. Adherence to the guidelines will provide protection for individuals involved in selection. Recruiters represent the organisation and the organisation is liable for the actions of recruiters.

OBJECTIVES OF THE PROJECT

Every task is undertaken with an objective. Without any objective a task is rendered meaningless. The main objectives for undertaking this project are: To understand the internal Recruitment process at Hindustan Tyres Ltd. To identify areas where there can be scope for improvement To give suitable recommendation to streamline the hiring process

SWOT ANALYSIS
Strengths

1. Wide product offering at different interest rates. 2. Large distribution network

Weakness
1. Lack of advertisement activities, 2. Focus only on middle class. 3. Limited products

Opportunity

1. Rise of Indian middle class and small cities. 2. A booming economy

Threats
1. Many players fighting for the same cake 2. Entry of new players

TYRE INDUSTRIES
The report elucidates facts about the Hindustan Tyre Industry, supplemented by latest statistical data and comprehensive analysis. Emphasis is laid on the following key subject matters to accomplish the report

The characteristics of the industry (raw material intensity, cyclicality, competition, wide distribution network, capital intensity, low bargaining power, branding, technology requirements, margins and duty structure) and its demand drivers (vehicle production & population, regulatory norms, retreading of tyres etc.).

Category-wise tyre production and market-wise tyre offtake analysis for the period FY 03-07.

Market competition and category-wise market share of players. Change in category-wise market share of players in FY07 vis-a vie FY06.

Cost Analysis (raw material, power & fuel, employee and selling expense) of the top players with specific focus on raw material costs.

Category-wise tonnage offtake growth projection for the tyre industry for a five year horizon (FY 07-12) along with SWOT analysis of the industry.

Financial profi le, international forays, expansion plans of the top fi ve players along with the details of corporate actions by other global and local players in India.

The Indian Tyre Industry produced 736 lakh units of tyres (11 lakh tonnes) garnering Rs. 19,000 crores in FY 07. MRF Ltd. was the market leader (22% market share) followed closely by Apollo Tyres Ltd. (21%). The other major

players were JK Tyre & Industries Ltd (18%) and Ceat Ltd. (13%). The industry tonnage production registered a 5 year CAGR of 9.69% between FY 02-07. Truck & Bus tyre category (accounting for 57% of the tonnage production) recorded a 5 year CAGR of 7.85% (a rate slower than that of the industry) while Light Commercial Vehicle (LCV), Motorcycle and Car tyre categories grew at 15%, 16% and 14% respectively (at rates faster than that of the industry). Off the road (OTR) tyres (customized tyres which fetch a higher margin compared to other tyres) category is growing at a fast pace. The OTR tyre category registered a 5 year CAGR of over 20% in the last five years. Most of the top players are increasing their capacity for the production of OTR tyres so as to improve their product mix, for e.g. CEAT Ltd. is increasing its OTR capacity at its Nasik plant from 60,000 to 1,00,000 tyres by end 2008, JK Tyre & Industries is expanding its OTR capacity from 25,000 tyres to 42,000 tyres by end 2008, even smaller player like Falcon tyres is making its foray into the OTR category. The exports from the country clocked a CAGR of 13% in unit terms and 18% in value terms in the period FY 0207. Most of these tyres that are exported are of cross ply design. With radialisation catching up in some of these markets, the manufacturers will need to graduate to radial tyres so as to protect their share in the export market. Radialisation of tyres is still minimal in India. Only the car tyre market has moved to radial tyres (95%) but in all other categories cross ply tyres are still preferred. Poor road conditions, overloading in trucks, higher initial cost of radial tyres and poor awareness levels in tyre users are the main reasons for the non transition of the domestic market to radial tyres. However, going ahead, radialisation in truck & bus tyres may increase due to governments focus on infrastructure development.

CARE Research expects the tyre industry to register a tonnage growth of 910% in the next five years (FY 0712). The truck & bus and LCV tyre category are expected to register a CAGR of 8% and 14% respectively (FY 0712). The report elucidates facts about the Indian Tyre Industry, supplemented by latest statistical data and comprehensive analysis.Emphasis is laid on the following key subject matters to accomplish the report.The characteristics of the industry (raw material intensity, cyclicality, competition, wide distribution network, capital intensity, low bargaining power, branding, technology requirements, margins and duty structure) and its demand drivers (vehicle production & population, regulatory norms, retreading of tyres etc.).Category-wise tyre production and market-wise tyre offtake analysis for the period FY 03-07.Market competition and categorywise market share of players. Change in category-wise market share of players in FY07 vis-a vie FY06.Cost Analysis (raw material, power & fuel, employee and selling expense) of the top players with specific focus on raw material costs.Category-wise tonnage offtake growth projection for the tyre industry for a fi ve year horizon (FY 07-12) along with SWOT analysis of the industry.Financial profi le, international forays, expansion plans of the top fi ve players along with the details of corporate actions by other global and local players in India. The Hindustan Tyre Industry produced 736 lakh units of tyres (11 lakh tonnes) garnering Rs. 19,000 crores in FY 07. MRF Ltd. was the market leader (22% market share) followed closely by Apollo Tyres Ltd. (21%). The other major players were JK Tyre & Industries Ltd (18%) and Ceat Ltd. (13%). The industry tonnage production registered a 5 year CAGR of 9.69% between FY 02-07.

Truck & Bus tyre category (accounting for 57% of the tonnage production) recorded a 5 year CAGR of 7.85% (a rate slower than that of the industry) while

Light Commercial Vehicle (LCV), Motorcycle and Car tyre categories grew at 15%, 16% and 14% respectively (at rates faster than that of the industry). Off the road (OTR) tyres (customized tyres which fetch a higher margin compared to other tyres) category is growing at a fast pace. The OTR tyre category registered a 5 year CAGR of over 20% in the last five years. Most of the top players are increasing their capacity for the production of OTR tyres so as to improve their product mix, for e.g. CEAT Ltd. is increasing its OTR capacity at its Nasik plant from 60,000 to 1,00,000 tyres by end 2008, JK Tyre & Industries is expanding its OTR capacity from 25,000 tyres to 42,000 tyres by end 2008, even smaller player like Falcon tyres is making its foray into the OTR category.

RESEARCH METHODOLOGY
Research Methodology refers to the framework or plan according to which the researcher has to carry out his activity. Research can be defined as a "systematized effort to gain new knowledge." Marketing Research is a systematic and objective process of identifying and formulates the marketing problems; Setting research objectives and methods for collecting, editing" coding, tabulating, evaluating, analyzing, interpreting and presenting the various information does it 985 data in order to find justified solutions for these problems. Research Methodology is the procedure for conducting the research. It is a way to systematically solve the problem. It may be understood as a science of studying how research is done scientifically. In it we study the various steps that are generally adopted by a researcher In studying his research problem along with the logic behind them. If the researcher wants to claim objectivity of His research and wishes to establish a truth and gain wide /* acceptability than lot of attention has to be devoted to the procedure and methodology of the research.

Market research involves the following steps:

Step 1: Define the problem and research objectives. Step 2: Developing the research plan Selection method Questionnaire method

 Sampling method Contact method Step 3: Collect the information Step 4: Analyze the information. Step 5: Present the findings.

Step 1: Define the research objective After discussing with the external project guide the topic for the project was selected as: Financial analysis of Hindustan Tyres ltd.

Step 2: Developing the research plan Questionnaire method

Marketing researchers have the best instrument in collecting primary data i.e. a questionnaire to collect the data and to establish the view of the people from all the sectors of the society. Questionnaires are designed to elicit information that meets the studies requirements.

Questions should be:

o o o

clear easy to understand directed towards meeting an objective.

Need to define objectives before designing the questionnaire. Must maintain impartiality and be very careful with personal data. Four basic types of questions are:
o o o o

Open ended Dichotomous Multiple choice. Scaled (lickert)

The questionnaire designed for this project contains open-ended questions. All the questions are clearly defined. The questions are framed keeping in mind the objective of research and kind of information required .Sampling method To select representative units from a total population.

A population "universe", all elements, units or individuals that are of interest to researchers for a specific study. IE all registered voters for an election. Sampling procedures are used in studying the likelihood of events based on assumptions about the future.
o o

Random sampling, equal chance for each member of the population Stratified sampling, population divided into groups re: a common characteristic, random sample each group

Area sampling, as above using areas

Quota sampling, judgmental, sampling error cannot be measured statistically, mainly used in exploratory studies to develop a hypotheses, non-probablistic.

Random sampling is selected as the sampling method for this project. Selection Method o Mail-wide area, limited funds, need incentive to return the questionnaire Mail panels, consumer purchase diaries. Must include a cover letter to explain survey!! o Telephone-speed, immediate reaction is negative, WATS, computer assisted telephone interviewing. o Personal interviews-flexibilty, increased information, non-response can be explored. Most favored method among those surveyed. Can be conducted in shopping malls. o In home (door-to-door) interview, get more information but it is costly and getting harder to accomplish. o Mall intercepts-interview a % of people passing a certain point. Almost half of major consumer goods and services orgs. use this technique as a major expenditure. Can use demonstration, gauge visual reactions. Regarding social behavior, mall surveys get a more honest response than telephone surveys. There is a bias toward those that spend a lot of time in malls. Need to weight for this. On site computer interviewing, respondents complete self administered questionnaires conducted in shopping malls. Questions can be adaptive depending on the responses. o Focus groups-observe group interaction when members are exposed to an idea or concept, informal, less structured. Consumer attitudes,

behaviors, lifestyles, needs and desires can be explored in a flexible and creative manner. Questions are open ended. Cadillac used this method to determine that they should be promoting safety features. A sample of 200 people was taken and judgement was done to select the right prospects to secure accurate information. The sample consisted of people like businessman, doctors, pvt. Company employees. Contact/Observation method Record overt behavior, note physical conditions and events. Can be combined with interviews, i.e. get demographic variables. Mechanical observation devices, IE cameras, eye movement recorders, scanner technology, Nielsen techniques for media. Observation avoids the central problem of survey methods, motivating respondents to state their true feelings or opinions. If this is the only method, then there is no data indicating the causal relationships. Step 3: Collection of information The information of the project was gathered in 2 forms: Primary data In primary data collection, you collect the data yourself using methods such as interviews and questionnaires. The key point here is that the data you collect is unique to you and your research and, until you publish, no one else has access to it. There are many methods of collecting primary data and the main methods include:

questionnaires interviews focus group interviews observation case-studies diaries critical incidents portfolios. Secondary data Secondary data - collected by others to be "re-used" by the researcher

What Form Does Secondary Data Take?

o o

Qualitative Sources Sources for Qualitative Research:

Biographies - subjective interpretation involved Diaries - more spontaneous, less distorted by memory lapses Memoirs - benefit/problem of hindsight Letters - reveal interactions Newspapers - public interest & opinion Novels & Literature In General Handbooks, Policy Statements, Planning Documents, Reports, Historical & Official Documents (Hansard, Royal Commission reports)

Quantitative Sources

Published Statistics:

National Government Sources Local Government Sources Other Sources Non-Published / Electronic Sources Data Archives eg the Data Archive At Essex On-Line Access To National Computing Centres International Sources on Internet & Web

For this project the secondary sources used are: Journals Company product brouchers Internet

Market Research Design

Research Data Source Research approach Research instrument Type of questions Sample sizes Mode of collecting data collection

: : : : : : : :

Descriptive type Primary & secondary Survey method Questionnaire Closed ended 100 samples Respondents to be chosen randomly.

RESEARCH DESIGN
A research design is simply a framework for the study that is used as a guide for collecting and analyzing the data. Decision regarding what, where when, how much, by what means concerning an inquiry or a research study constitutes a research design. This framework ensures collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. In fact, the research design is the conceptual structure within which research is conducted. It constitutes the blue print for collection, measurement analyses of data. Research design depends on the purpose of study. Research purpose may be grouped into four categories: a) EXPLORATORY RESEARCH: It is also termed as formulate research. The main purpose of such research is to gain familiarity with a phenomenon or discovery of ideas and insights. b) DESCRIPTIVE RESEARCH: These are studies, which are concerned with describing the characteristics of a particular individual, situation or a group. c) DIAGNOSTIC RESEARCH STUDIES: These studies determine the frequency with which something occurs or with which it is associated with something else. d) HYPOTHESIS TESTING RESEARCH STUDIES: These are concerned with testing a hypothesis of a causal relationship between variables.

TYPE OF RESEARCH
SAMPLE DESIGN All items in any field of study constitute the UNIVERSE. In any study it is almost impossible to examine the entire universe. The only alternative that is best, suitable and economical is to resort to sample. 'This is absolute for present study. The basic principle, which is followed is that the sample chosen should be representative of the entire universe to be studied.

A SAMPLE DESIGN is a definite plan for obtaining a sample from a given population. It refers to the technique or the procedure the researchers would adopt in selecting items for the sample. Sample design may as well lay down the number of items to be included in the sample i.e. the size of sample and also the sampling units. Sampling units implies the unit of sample considered and the unit of inquiry

There are different types of sample designs based on two factors viz., REPRES.ENTATION TECHNIQUE. BASIS and, the ELEMENT SELECTION

On the REPRESENTATION BASIS, the sample may be PROBABILITY SAMPLING or it may be NON PROBABILITY SAMPLING.

Probability sampling is based on random selection and in this every element in the universe has an equal chance of being selection in sample.

Non-Probability is non-random sampling and it does not afford any basis for estimating the probability that each item in the population has of being included in the sample.

 On ELEMENT SELECTION BASIS, the sample may be either RESTRICTED or UNRESTRICTED. Unrestricted sampling is based when each sample element is drawn individually from the population at large, then the sample so drawn is known as 'unrestricted sampling'. Restricted sampling includes all other forms of sampling like quota, judgmental, stratified sampling etc.

TYPE OF SAMPLE In the PRESENT STUDY non-probability sampling technique was applied, where samples are selected RANDOMLY BASED ON CONVENIENCE AND JUDGEMENTAL. SAMPLE SIZE A sample of 50 Dealers was selected. TECHNIQUES USED IN THE RESEARCH

Various techniques were used for making and studying the report. These are: Ratio analysis Profitability ratio Long-term solvency ratio Short-term solvency ratio Turnover ratio

FINANCIAL ANALYSIS
INTRODUCTION o Financial analysis is the process of determining the significant operating and financial characteristics of a firm from accounting data and financial statements o The goal of such analysis is to determine the efficiency and performance of the firms management, as reflected in the financial records and reports. o The analyst attempts to measure the firms liquidity, profitability and other indication that business is conducted in a rational and orderly way. o If a firm does not achieve financial norms for its industry or relationships among data that seem reasonable, the analysts note the deviations. The burden of explaining the apparent problems may then be placed upon management. Managers, shareholders, creditors, tax authorities and other interested groups seek answers to the following important questions about the firm:
# # What is the financial position of the firm at a given point of time? How did the firm perform financially over a given period of time?

The firm itself and outside providers of capital creditors and investors all undertake financial statement analysis. The type of analysis varies according to the specific interests of the party involved. Trade creditors (suppliers owed money for goods and services) are primarily interested in the liquidity of the firm. Their claims are short term, and the ability of the firm to quickly pay these claims is best judged by the analysis of the firms liquidity. The long term lenders on the other hand accordingly are more interested in the cash flow ability of the firm to service debt over a long period of time. They evaluate this ability by analyzing the capital

structure of the firm, the major sources and uses of funds, the firms profitability over the time, and projections of future profitability. Investors in a companys common stock are principally concerned with present and expected future earnings as well as with the stability of these earnings about a trend line. As a result, investors usually focus on analyzing the profitability of the firm. They would also be concerned with the firms financial condition insofar as it affects the ability of the firm to pay dividends continuously.
All the cases described so far have involved suppliers of capital. Therefore, the analysis has taken an external point of view. Internally, management also employs financial analysis for the purpose of internal control and to better provide what capital suppliers seek in financial condition and performance from the firm. From an internal control standpoint, management needs to undertake financial analysis in order to plan and control effectively

FINANCIAL STATEMENTS Financial analysis involves the use of various financial statements. A financial statement is a collection of data organised according to logical and consistent accounting procedures. Its purpose is to convey an understanding of some financial aspects of a business firm. It may show a position at a moment in time, as in the case of Balance Sheet (A summary of firms financial position on a given date that shows total assets = total liabilities + owners equity ), or may reveal a series of activities over a given period of time; as in the case of an Income Statement ( A summary of the firms revenues and expenses, over a specified period ending with net income or loss for the period ), or may show the sources and uses of funds, as in the case of Fund Flow Statement (A summary of a firms changes in financial position from one period to another).The Income statement, the statement or retained earnings and the statement of changes of financial position report what has

actually happened to earnings during a specified period. The balance sheet presents a summary of financial position of the company at a given point of time. The statement of retained earnings reconciles income earned during the year and any dividends distributed with the change in retained earnings between the start and end of financial year under study. The statement of changes in financial position provides a summary of funds flowing during the period of financial statements.

BALANCE SHEET The balance sheet is the first of the three major financial statements. The balance sheet shows the assets, liabilities and the equity for the firm as of the last day of the accounting period. In effect, it matches resources (assets) with sources (liabilities and equity). It is commonly presented in two columns that illustrate the relationship between assets and the sources of these assets. The assets or resources of the firm are displayed in the right hand column and the sources of these assets in the left hand column. INCOME STATEMENT The income statement, is a report of the firms activities during a given accounting period. Firms often publish income statements showing the results of each quarter, each half year and the full accounting year. It shows the revenues and expenses of the firm, the effect of interest and taxes, and the net income for the period. It may be called by other titles, such as the profitand-loss statement or the statement of earnings. It is an accounting device designed to show stockholders and creditors whether the firm is making money. It can also be used as a tool to identify the factors that affect the degree of profitability

FLOW OF FUNDS STATEMENTS A third important financial statement is the flow-of-funds or sources-of- funds statement. This statement shows the movement of funds into the forms current asset account from external sources such as stockholders, creditors and customers. It also shows the movement of funds to meet the firms obligations, retire stock or pay dividends. The movements are shown for a

specific period of time, normally the same time period as the firms income statement. The financial manager makes decisions to ensure that the firm has sufficient funds to meet financial obligations when they are due and to take advantage of financial opportunities. To help the analyst appraise these decisions (made over a period of time), we need to study the firms flow of funds.

RATIO ANALYSIS-A TOOL

Ratio analysis is a very powerful analytical tool for measuring performance of an organization. The ratio analysis concentrates on the inter-relationship among the figures appearing in the aforementioned four financial statements. The ratio analysis helps the management to analyze the past performance of the firm and to make further projections. Ratio analysis allows interested parties like shareholders, investors, creditors, Govt. and analyst to make an evaluation of certain aspects of a firms performance.

Ratio analysis is a process of comparison of one figure against another, which make a ratio, and the appraisal of the ratios to make proper analysis about the strengths and weaknesses of the firms operations. The calculation of ratios is a relatively easy and simple task but only the skilled analyst can make the proper analysis and interpretation of the ratios. While interpreting the financial information, the analyst has to be careful in limitations imposed by the accounting concepts and methods of valuation. Information of non-financial nature will also be taken into consideration before a meaningful analysis is made. Ratio analysis is extremely helpful in providing valuable insight into a companys financial picture. Ratios normally pinpoint a business strengths and weakness in two ways: 1. Ratios provide an easy way to compare todays performance with past. 2. Ratio depict the areas in which a particular business is competitively advantaged or disadvantaged through comparing ratios to those of other businesses of the same size within the same industry.

TYPES OF RATIOS

CLASSIFICATION OR TYPES OF RATIOS The following classification is based on the financial statements on which ratios are calculated. Thus these are: Balance Sheet Ratios. Current Ratio Liquid Ratio Proprietary Ratio Debt Equity Ratio Stock Working Capital Ratio Profit and loss A/C Ratios Gross Profit Ratio Operating Profit Ratio Net Profit Ratio Combined or balance sheet and profit and loss ratio Capital-turnover ratio Fixed-assets turnover ratio Net working capital-turnover ratio Stock-working capital ratio Return on investment Return on equity

However, the above basis of classification is found to be too crude and unsuitable because analysis of balance sheet and income statement cannot be done in isolation. Therefore they are studied together in order to determine profitability and solvency of the business. In order that ratio serves a tool of financial analysis, they are now classified into four important categories. Liquidity ratios Solvency/Financial/Leverage ratios Activity ratios Profitability ratios
LIQUIDITY RATIOS-AN ANALYSIS FOR SHORT TERM CREDITORS Liquidity ratios measures the firm abilty to meet current obligations. These are of 2 types:

1) CURRENT RATIO: The current ratio is calculated by dividing current assets by current liabilities.

CURRENT ASSETS= CURRENT ASSETS CURRENT LIABILITIES

In a business, a 2:1 ratio is treated a satisfactory relationships.

2)Acid test ratio or quick ratio or liquid ratio: Quick ratio establishes a relationship between quick, or liquid, assts and current liabilities.

Quick ratio= Total current assets-(stock in trade+prepaid expenses) Current Liabilites A ratio of 1:1 is considered favourable since for every rupee of current liabilities there is a rupee of quick assets.

SOLVENCY RATIO- AN ANALYSIS FOR LONG-TERM CREDITORS

Solvency ratios indicate ability of the company to meet its interest cost and repayment schedules associated with its long term indebtedness. 1)Debt-Equity Ratio: Debt equity ratio expresses the relationship of long term liability to net worth.

DEBT-EQUITY RATIO = Long term liabilities Equity (or net worth)

The normally accepated debt-equity ratio is 2:1.

2)Interest-coverage ratio The interest coverage ratio or debt services ratio indicate how much interest charges are covered by operating profits by operating profits available to pay its interest charges.

INTEREST COVERAGE RATIO= Net income before charging interest and income tax Periodic interest on long term debts

A higher ratio is desiarable.

3)Debt to total funds ratio This ratio compares the total liabilities to total assets.

DEBT TO TOTAL FUNDS RATIO=Total liabilites Total assets The ratio indicates the percentage of assets financed through borrowings.

ACTIVITY RATIOS-AN ANALYSIS FOR MEASURING THE MOVEMENT OF ASSETS. Activity ratio signifies the effective utilisation of a concern of its available resources. These are es follows:

1) CAPITAL TURNOVER RATIO

This ratio measures the effectiveness with which a firm uses financial resources at its disposal. CAPITAL TURNOVER RATIO=Net sales (or) cost of sales (or) cost of goods sold Capital employed or owners equity

A low ratio may signify that the capital is lying idle or there is a fall in sales revenue.A high ratio indicates that either the business firm is overtrading to an extent that its financial health is in risk or danger or there is manipulation in the figures.

2)FIXED ASSETS TURNOVER RATIO

This ratio indicates the firms efficiency of utilising fixed assets.

FIXED ASSETS TURNOVER RATIO=Net sales Fixed assets less depreciation

Higher the ratio, better it is because it indicates higher efficiency, i.e., every rupee invested in fixed assets generates higher sales.

3)NET WORKING CAPITAL TURNOVER RATIO

This ratio computes the requirement of working capital for an expected increase in sales. NET WORKING CAPITAL TURNOVER RATIO=Net credit sales Average debtors

A high ratio indicates efficient use of working capital and quick turnover of these current assets.

4)STOCK TURNOVER RATIO

This ratio signifies the number of times on an average,the inventory or stock turnover or sold during the period. It shows how the goods are kept in stores before being sold.

STOCK TURNOVER RATIO=Cost of goods sold Average stock held during the year

A higher stock turnover ratio is desirable because it leads to higher liquidity. It indicates efficient sales performance. A low stock turnover ratio indicates that goods are not sell quickly and remains in the godown for a long time. This will lead to excessive blocking up of working capital in inventories. Moreover, slower stock turnover will reduce liquidity.

4)DEBTORS TURNOVER RATIO This ratio establishes the relationshipof receivables to net credit sales. It indicates the number of times debtors turnover each year.

DEBTORS TURNOVER RATIO=Net credit sales Average debtors (Debtors + Bills Receivables) Generally higher the value of debtors, the more efficient is the management of credit.

PROFITABILITY RATIOS-THESE RATIOS ARE CALCULATED TO ANALYSE THE FINANCIAL RESULTS OF BUSINESS OPERATIONS FOR THE SAME FIRM OVER SEVERAL YEARSOR OF THE SIMILAR FIRMS FOR THE SAME FIRM OR SEVERAL YEARS. THESE ARE:

1) GROSS PROFIT RATIO

The gross profit ratio is also called the average markup ratio. This ratio expresses relationship between gross profit and net sales. This ratio indicates the degree to which income per unit may

decline without resulting in losses from operations to the firm. It also helps in ascertaining whether the average percentage of mark up on the funds is maintained. It is calculated by comparing the gross profit of the firm with the net sales as follows: GP Ratio= Gross profit x 100 Net sales Gross profit = Gross income Interest and other charges.

1)OPERATING PROFIT RATIO

The operating refers to the pure operating profit of the firm i.e. the profit generated by the operation of the firm and hence is calculated before considering any financial charge (such as interest payment), non operating income/ loss and tax liability etc. the operating profit is also termed as the Earning Before Interest and Tax (EBIT). The Operating Profit ratio may be calculated as follows:

Operating Profit Ratio = Operating cost x 100 . Net Sales

So, the Operating cost = Gross income Interest and other charges Staff expenses Other expenses Depreciation

3)NET PROFIT RATIO

The NP ratio establishes the relationship between the net profit (after tax) of the firm and the net sales. The NP ratio measures the efficiency of the management in generating additional revenue over and above the total cost of operations. The NP ratio shows the overall efficiency in manufacturing, administrative, selling and distributing the product. It may be calculated as follows:

NP ratio = Profit (after tax) x 100 Net sales

4)RETURN ON ASSETS (ROA)

The ROA measures the profitability of the firm in terms of assets employed in the firm. The ROA is calculated by establishing the relationship between the profits and the assets employed to earn that profit. Usually the profit of the firm is measured in terms of the net profit after tax and the assets are measured in terms of total assets or total tangible assets or total fixed assets. Conceptually, the ROA may be measured as follows:

ROA = Net profit after taxes x 100 Total assets

4)RETURN ON INVESTMENT (ROI)

The profitability of the firm can also be analyzed from the point of view of total funds employed in the firm. The term funds employed or the capital employed refers to the total long-term sources of funds. Capital employed = shareholders funds plus long-term debts. Alternatively, capital employed = fixed assets plus + working capital. The ROI may be calculated as follows:

ROI = Net profit before interest and taxes x 100 Capital employed

RETURN ON EQUITY (ROE)

The ROE examines profitability from the perspective of equity investors by relating profits available for the equity shareholders with the book value of equity investment. The return from

the point of view of equity shareholders may be calculated by comparing the net profit less preference dividend with their total contribution in the firm

ROE = Net Profit after tax x 100 Total shareholders fund

PROFITABILITY RATIO
In a business enterprise, profitability is the most important part for a financial institution notwithstanding it is pre eminently a service oriented industry. It is fundamental truth that revenue must exceed expenditure incurred in the process of earning that revenue. Profit provides cushion to the financial institution to support its credit risks and withstand any unforeseeable developments. A profitable financing organization has sufficient resources in its command to finance its growth and diversification programmes in future.

Profitability ratios are measured with reference to sales, capital employed, total assets employed, shareholders funds etc. the major profitability rates are as follows: Gross profit margin Operating profit ratio Net profit margin Return on assets Return on investment Return on equity Earning per share. Dividend per share Dividend payout ratio

FINDINGS
GROSS PROFIT RATIO

The gross profit ratio is also called the average markup ratio. This ratio expresses relationship between gross profit and net sales. This ratio indicates the degree to which income per unit may decline without resulting in losses from operations to the firm. It also helps in ascertaining whether the average percentage of mark up on the funds is maintained. It is calculated by comparing the gross profit of the firm with the net sales as follows: GP Ratio= Gross profit x 100 Net sales Gross profit = Gross income Interest and other charges.

GP RATIO - 2010 =

( Current Year) x 100

50.13 718.43

6.97%

GP RATIP 2011 =

(Previous Year)

40.85 x 100 320.67

12.73%

Hence, gross profit of year 2011 is better then 2010.

GP RATIO

14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2010

12.73%

% change

6.97%

2011 Years

NET PROFIT RATIO

The NP ratio establishes the relationship between the net profit (after tax) of the firm and the net sales. The NP ratio measures the efficiency of the management in generating additional revenue over and above the total cost of operations. The NP ratio shows the overall efficiency in manufacturing, administrative, selling and distributing the product. It may be calculated as follows:

NP ratio = Profit (after tax) x 100 Net sales Net Profit 2011 (Current Year) = 131.90 718.43 X 1 00

= 18.35% Net Profit 2010 (Previous Year) = 40.56 320.67 X 100

= 12.64%

Hence, Net profit of year 2010 is better then 2011

NET PROFIT RATIO

20.00% 15.00%

18.35%

12.64%

%change 10.00%

5.00% 0.00% 2010

Years

2011

RETURN ON ASSETS (ROA)

The ROA measures the profitability of the firm in terms of assets employed in the firm. The ROA is calculated by establishing the relationship between the profits and the assets employed to earn that profit. Usually the profit of the firm is measured in terms of the net profit after tax and the assets are measured in terms of total assets or total tangible assets or total fixed assets. Conceptually, the ROA may be measured as follows: ROA = Net profit after taxes x 100 Total assets

ROA 2011 (Current Year)

= 131.90 1172.73 11.24% X 100

ROA 2010 (Previous Year) = 40.56 241.79 16.77% X 100

Hence, ROA of the year 2011 is better then 2010.

RETURN ON ASSETS

0.2

16.77%

0.15
% Change 0.1 0.05

11.24%

0
2010 Years 2011

RETURN ON INVESTMENT (ROI)

The profitability of the firm can also be analyzed from the point of view of total funds employed in the firm. The term funds employed or the capital employed refers to the total long-term sources of funds. Capital employed = shareholders funds plus long-term debts. Alternatively, capital employed = fixed assets plus + working capital. The ROI may be calculated as follows:

ROI = Net profit before interest and taxes x 100 Capital employed ROI 2011 (Current Year) = 197.63 17.25 1145.68% X 100

ROI 2010 (Previous Year) = 58.17 7.30 7.96% X 100

Hence, ROI of the year 2011 is better then 2010

RETURN ON INVESTMENT

12.00% 10.00%

11.45%

7.96%

8.00% %change 6.00% 4.00% 2.00% 0.00% 2010 Years 2011

RETURN ON EQUITY (ROE)

The ROE examines profitability from the perspective of equity investors by relating profits available for the equity shareholders with the book value of equity investment. The return from the point of view of equity shareholders may be calculated by comparing the net profit less preference dividend with their total contribution in the firm

ROE = Net Profit after tax x 100 Total shareholders fund

ROE 2010 (Current Year)

= 131.90 x 100 931.91 = 14.15%

ROE 2011 (Previous Year)

= 40.56 X 100 141.94 28.57%

Hence, the ROE of year 2010 is better then Year 2011

RETURN ON EQUITY

0.3 0.25 0.2

14.15%

28.57%

%change 0.15 0.1

0.05 0

2010 Years

2011

ANNEXURES
Profit & Loss A/C Of Hindustan Tyres Ltd
PARTICULARS Sales Turnover Other Income Stock adjustments Total Income Raw Material Excise Duty Power & Fuel Cost Other manufacturing Expenses Employee Cost Selling & Administration Expenses Miscellaneous Expenses Less: Preoperative Expenditure Capitalised Profit before interest, Depreciation & Tax Interest & Financial Charges Profit Befire Depreciation & Tax Depreciation Profit before Tax Tax Profit after Tax Adjustment below Net Profit P & L Balance brought forward Appropriations P & L Balance carried down Equity Dividend Preference Dividend Corporate Dividend Tax Equity Dividend (%) Earning Per Share (Rs) Book Value Extraordinary Items 2011 718.43 47.72 -6.59 759.56 0.12 0.00 0.49 469.46 17.25 43.75 6.45 0.00 222.04 21.30 200.74 3.11 197.63 65.73 131.90 0.00 23.46 86.49 68.87 9.93 0.00 1.56 25.00 22.96 163.31 0.01 2010 320.67 34.51 3.73 258.91 1.04 0.00 0.29 241.86 7.30 12.85 21.56 0.00 74.01 13.71 60.30 2.13 58.17 17.61 40.56 0.00 16.89 33.99 23.46 3.50 0.00 0.49 20.00 22.90 78.11 -10.14

Balance sheet of HINDUSTAN TYRES LTD.

PARTICULARS Share Capital Reserve & Surplus Total Shareholders Fund Secured Loans Unsecured Loans Total Debt Total Liabilities Gross Block Less: Accum Depreciation Net Block Capital Work In process Investments Inventories Sundry debtors Cash and Bank Balance Loans and Advances Current Liabilities Provisions Net Current Assets Miscellaneous Expenses not w/o Total Assets Contigent Liabilities 2011 28.38 903.53 931.91 191.81 49.01 240.82 1,172.73 50.13 19.86 30.27 0.00 11.22 494.61 132.07 224.79 915.40 614.95 20.68 1,131.24 0.00 1,172.73 196.47 2010 17.50 124.44 141.94 89.31 10.54 99.85 241.79 40.85 15.81 25.04 0.00 9.03 306.39 60.40 24.64 311.30 475.17 19.84 207.72 0.00 241.79 110.48

BIBLOGRAPHY
WEBSITES: www.wikipedia.com www.yahoo.com www.google.com Hindustan Tyres Ltd.

BOOKS REFFERED: Financial Management by I.M.Pandey Cost accounting by S.N. Maheshwari

SUMMER TRAINING REPORT ON

SELECTION AND RECRUITMENT PROCESS & FINANCIAL ANALYSIS

OF

HINDUSTAN TYRES LTD.

Submitted to Panjab University, Chandigarh In the partial fulfillment for the requirement of the degree of

MASTER OF COMMERCE

Submitted to: Panjab University, Chandigarh.

Submitted by: Reetu Jaggi M.Com Enrol No.20989

UNIVERSITY SCHOOL OF OPEN LEARNING (USOL) PANJAB UNIVERSITY, CHANDIGARH

CERTIFICATE
Certified that Ms. Reetu Jaggi of class M.Com whose enrolment number is

20989 for the session 2011-12 has undertaken the Research/ Training under my
supervision. It is recommended that the report be placed before the examiner for evaluation.

Date: Place:

Signature of Supervisor

Name ______________________ Designation_________________ Address ____________________

ACKNOWLEDGEMENT
A project work is a combination of views, ideas, suggestions & contributions of many people. Thus, one of the pleasant part of writing the report is the opportunity to thank those who have contributed towards it fulfillment. I am thankful to Shri R.S. Walia Manager of Hindustan Tyres who has given me training under his great supervision. I would like to communicate a deep sense of gratitude to all these people without whom my project would have been such a great learning experience.

Reetu Jaggi

PREFACE

People are a companys most important assets. They can make or break the fortunes of a business. In todays highly competitive business environment placing the right people in the right position is very critical for the success of any organization The recruitment and selection decision is of prime importance as it is the vehicle for obtaining the best possible person-to-job fit that will, contribute significantly towards the Company's effectiveness. It is also becoming increasingly important, as the Company evolves and changes, that new recruits show a willingness to learn, adaptability and ability to work as part of a team. The Recruitment & Selection procedure ensures that these criteria are addressed In this project report I have studied Recruitment and Selection process of Hindustan Tyre Ltd. and attempted to provide some ways so as to make recruitment more effective and to reduce the cost of hiring an employee. I am privileged to be one of the students who got an opportunity to do my training with Hindustan Tyre Ltd. My involvement in the project has been very challenging and has provided me a platform to leverage my potential in the most constructive way. During the training period I have studied of Recruitment & Selection Process in Hindustan Tyre Ltd. and did a SWOT analysis of Hindustan Tyre Ltd. to

find out the existing shortcomings and potential threats and thereby recommended suggestions. This project however is an attempt to share as best as possible my experience in corporate world with all my colleagues and my faculty. I would be delighted to receive readers comments which maybe valuable lessons for my future projects.

CONTENTS
S. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Executive Summary Introduction to Hindustan Tyres Ltd. Review Recruitment &Selection Process Objective of the Project SWOT Analysis Tyre Industries Research Methodology Research Design Types of Research Financial Analysis Ratio analysis Findings Annexures Bibliography Topics Page No. 1 2-6 7-19 20-25 26 27 28-31 32-39 40 41-42 43-46 47-55 56-65 66-67 68