PROJECT ON LOGISTICS COMPANY SIMA

8/7/2019 PROJECT ON LOGISTICS COMPANY SIMA

1/54

Page | 1

INTRODUCTION TO INDIAN ECONOMY REVIEW:

India is one of the biggest countries with significant diversity. With a land area of 3,287,240square km and a population of 1,178,732,000, India has abundant natural resources and a

large labor pool to grow at a stupendous rate. Under the present Honorable Prime Minster of

India Dr. Manmohan Singhs leadership and the manifesting of the liberalization policy, the

Indian economy has picked up steam and has been registering around 7% real growth every

year. The economy was not severely impacted by the global recession of 2007-2009, as tight

fiscal regulations kept credit crisis at bay. The issues weighing down on the Indian economy

are its unemployment rate and a rather constant poverty rate. The unemployment rate grew in

2009 to 10.7% from 10.4% in 2008 and almost 25% of the population lives under the povertyline. In order to combat this, the Indian administration is keen on encouraging privatization

and improving the employment scenario. Privatization will also attract FDI that can help in

structural improvements and thus trigger growth. India and the Global Economy.

1.1 -India and the Global Economy

India, an emerging economy, has witnessed unprecedented levels of economic expansion,

along with countries such as China, Russia, Mexico and Brazil. India, being a cost effectiveand labor intensive economy, has benefited immensely from outsourcing of work from

developed countries, and a strong manufacturing and export oriented industrial framework.

As the economic pace is picking up, global commodity prices have staged a comeback from

their lows and global trade has also seen reasonably healthy growth over the last two years.

1.1.1-Economic Prospects for 2010

The global economy seems to be recovering after the recent economic shock. The Indian

economy, however, was hit in the latter part of the global recession and the real economic

growth has witnessed a sharp fall, followed by lower exports, lower capital outflow and

corporate restructuring. The global economies are expected to continue to sustain themselves

in the short-term, as the effect of stimulus programs is yet to bear fruit and tax cuts are

working their way through the system in 2010. Due to the strong position of liquidity in the

market, large corporations now have access to capital in the corporate credit markets.


2/54

Page | 2

Indias Economic Outlook Projection

2007 2008 2009 2010

GDP Growth 9.40% 7.30% 5.40% 7.20%

1.2-The Right Place For FDI:

Be it Foreign Institutional Investors (FII) or Foreign Direct Investment (FDI), ever since

India opened up its economy to the world, a plethora of investors have come up, in a bid to

tap the huge potential of the market. FDI has been flowing in at an exponential growth rate

and FII has been around $10 billion from April-September 2009-2010. These investments

have come from the primary market. The amount increased from $7.08 billion in 2006,according to the Securities and Exchange Board of India (SEBI).

1.3 - India Economic Development:

Economic development in India still depends on the various sectors that constitute the Indian

economy agriculture, services and manufacturing industries.

India is rated as one of the top economies in the world in terms of purchasing power parity

(PPP) of the gross domestic product (GDP) by leading financial entities of the world, such as

the International Monetary Fund, the World Bank, and the CIA (as referenced in the CIA

World Fact book).

As far as agriculture is concerned, India is the second largest in volume of output. Certain

related sectors of agriculture have played a major role in the development of the Indian

economy by providing employment to a number of people in the forestry, fishing and logging

industries. In 2009, the agricultural sector contributed 17.5% to the entire GDP, and more

than 50% of the total labor force working in India is employed in the agricultural sector.

Production volume has gone up in Indian agriculture at a consistent rate since the 1950s.

Much of this improvement can be attributed to the five-year plans that were established for

the development of Indian agriculture. Developments in irrigation processes, as well as

various modern technologies used have contributed to the overall advancement of agricultural

processes.


3/54

Page | 3

Substantial amounts of research and development have been carried out in the agricultural

space in India by organizations such as the Indian Agricultural Research Institute, the Indian

Agricultural Research Statistics Institute and the Indian Council of Agricultural Research.

In the industrial arena, India is 14th in terms of volume of factory output. Variousdevelopmental initiatives are also being carried out in the areas of gas, mining, electricity and

quarrying. All these sectors contribute significantly to the GDP, and provide jobs to Indias

citizens. India is regarded as the 15th best economy in terms of production in the services

sector. A sizeable amount of the Indian workforce is also employed by the service sector. In

the ten-year period between 1990 and 2000, the rate of growth has been 7.5%, up from 4.5%

during the 30-year period from 1951 to 1980.

1.3.1-Problems of Indian economy:

However, as of financial year 2008, situation of Indian economy is far from being rosy. A

number of economic crises have besieged Indian economy of late. Rates of inflation have

been high. Reserve Bank of India, which is apex economic body of India, has been trying its

best to limit rate of inflation to 4 percent but by middle phase of financial year 2008, rate of

inflation had reached 11 percent. This has been highest in last decade and one year.

There have been other problems like increase in expenses of important commodities like food

and oil. India is facing a boom in construction industry, but there are not enough resources.

Problems like these are only adding to India's woes. India has also been hit hard by ongoing

global recession and it is being assumed that it would take a bit of time for Indian economy to

come out of it.

1.4-India's Trade, Exports and Imports:

Having been an agro-based economy, Indian trade has always been devoid of manufactured

or industrial goods. Post liberalization, imports dominated the Indian trade scene in the form

of heavy machinery and information technology products and, thus, created an imbalance of

trade.


4/54

Page | 4

India Trade: Exports

Indian trade was impacted by the global recession of 2007-2009. Indian exports fell from

$200.9 billion in 2008 to $165 billion in 2009. India ranked 22 nd in the world in terms of

export volume.

India Trade: Imports

The Indian economy is headed towards becoming a developed economy and all its sectors are

in need of machinery and energy. Therefore, Indian imports are dominated by crude oil and

machines. In 2009, total imports amounted to $253.9 billion, down from the 2008 figure of

$322.3 billion. India ranked fifteenth in the world in terms of import volume. However, for

India to grow into a superpower, major infrastructural changes, along with socialisticprograms that address issues such as poverty and unemployment, need to be implemented.

The the export and import policy of the country has paved the way for importing and

exporting of need item within and outside the country. And the direct beneficiaries are the

logistic where they play as a middle men role and a liaison role in transports, without which

the survival of the foreign exchange would be in trouble. Since the entire world is hunting for

petroleum products, in future the logistics of any country would be in great trouble unless and

until we enter in to the alternate source of energy.


5/54

Page | 5

INTRODUCTION:

Logistics (according to C LM) is the process of planning, implementing and controlling the

efficient, cost-effective flow and storage of raw materials, in- process inventory, finished

goods and related information from point of origin to point of consumption for the purpose of

conforming to customer requirements .

Term "logistics" originates from the ancient Greek "logos" ratio, word, calculation, reason,

and speech, oration Logistics is considered to have originated in the military's need to supply

themselves with arms, ammunition and rations as they moved from their base to a forward

position.

Logistics is defined as a business planning framework for the management of material,

service, information and capital flows. Logistics systems have received considerable attention

in the last 10 years as they constitute one of the cornerstones in the design and control of

production systems and the modeling of supply chains.

the main service provided is the movement of goods. The forwarders experience will enable

the provision of advice on the best routing (cheapest, quickest, safest), the best mode of

transport (air, sea, road, rail), customers requirements, packing, insurance, security issues,

and the myriad of regulations that apply in both the country of destination and the country of

origin.

The mission of logistics is to get the right goods or services to the right place, at the right

time, and in the desired condition and quantity in relation to customers order

Main logistics activities and decisions:

cooperate with marketing to set customer service levels,

facility location decisions

transportation activities (eg. transportation mode selection, vehicle scheduling, carrier routing),

inventory management (inventory short -term forecasting, planning and control,

cooperate with production to calculate EOQ, sequence and time production),

information collection and flows and order processing,

warehousing and materials handling,

Packaging and packing.


6/54

Page | 6

2.1-Logistics Management: -

Logistics management is that part of the supply chain which plans, Implements and controls

the efficient, effective forward and reverse flow and storage of goods, services and related

information between the point of origin and the point of consumption in order to meet

customer & legal requirements. A professional working in the field of logistics management

is called a logistician. A logistician is a professional logistics practitioner.

Logistics must make work effectively. This is required by your customers and, in turn, by

your company. For effective logistics, there are four key issues-

2.1.1-Time/service: -

Hours may decide customer service, competitiveness and value-added. Time/service is a

factor of competition, customer requirements, your company's position in the industry, your

corporate culture, how well everyone in the global supply chain works together, and how well

everyone works together in your company. Distance means time. Yet time delays are not

acceptable.

2.1.2-Cost: -

Cost is the key measure by which logistics effectiveness is often measured. Cost control,

containment, and management are important for corporate profitability. Cost has a relation to

service. As we define our service against our costs or costs against service, the give and takedevelops into our operating costs and budgets. Logistics cost measurement is a shortcoming

in the present accounting systems.

2.1.3-Inventory management:

Inventory requires to be maintained to take care of needs between the time of demand and

time of supply. Inventory management involved decisions concerning: Buffer stock, Lead

time, Replenishment of stocks.

2.1.4Warehouse Management and Control System : -

There is some functionality overlap, the differences between Warehouse Management

Systems (WMS) and Warehouse Control Systems (WCS) can be significant. To put it simply,

the WMS plans a weekly activity forecast, based on such factors as statistics, trends, and so

forth, whereas a WCS acts like a floor supervisor, working in real time to get the job done by

the most effective means.


7/54

Page | 7

2.2-Subdivisions of logistics management

2.2.1-Business Logistics:

Procuring, moving and storing of R/M and transporting, warehousing and distribution

of F/G. Facilitation of relevant manufacturing and marketing. Making finished goodsavailable to the customers in the market. Procuring, moving and storing of agricultural

products. Providing competitive edge in commodities market.

2.2.2- Event Logistics:-

The net work of activities, facilities and personnel required to organize, schedule and deploy

the resources for an event to take place and to efficiently withdraw after the event.

2.2.3-Service Logistics:-

The acquisition, scheduling and management\ of the facilities/assets, personnel and materials

to support and sustain a service operation

2.2.4-Military Logistics: -

Design and integration of all aspects of support for the operational capability of the military

forces [deployed or in garrison] and their equipment to ensure Readiness, reliability and

efficiency.

2.2.5-Third -party Logistics: -

Third-party logistics involves the Utilization of external organizations to execute logistics

activities that have traditionally been performed within an organization itself. According tothis definition, third party logistics includes any form of outsourcing of logistics activities

previously performed in-house.

Example: - A company with its own transport facilities decides to employ external

warehouse specialist, this would be an example of third party logistics.

2.2.6-Production Logistics: -

The term is used for describing logistic processes within an industry. The purpose of

production logistics is to ensure that each machine and workstation is being fed with the right

product in the right quantity and quality at the right point in time.

2.2.7-Based on the product

Distinguished four key decisions and activities areas in the integrated supply chains, such as:

configuration of product and network, which covers the decisions concerning the main

rules of cooperation,


8/54

Page | 8

formation of the production network, mainly the choice of production facility and

warehousing locations as well as their capabilities,

product design with involvement the research and development abilities of suppliers,

process optimization in order to reduce cycle times and inventory level in the cost-

effective way.

The traditional role and place of small firms within integrated supply chains was mostly

limited.

delivering raw - materials, parts or modules for the final goods producers,

delivering customer goods to wholesalers or selling small quantities of this goods to the

final customers,

providing transportation and forwarding services, manufacturing goods and providing other services for market niches which are

considered as not enough profitable for big companies (also as a subcontractor),

trading under well known brand name of large distribution networks (franchising).

2.3Need of the study :The basic need of the study of industry prospective, to have a complete idea about the

Logistics organization and financial statements analysis is depict the financial position of a

firm through following ways.

I. A proper analysis and interpretation of these statements enables a person to judge the

profitability and financial aspects of the business.

II. The Financial statement are helpful in assessing corporate expenses, judging credit

worthiness, forecasting bond rating, predicting bankrupt and assessing market risk.

III. The Financial statement provides a summary of accounts of a business enterprise and

to understand the financial performance and condition of a corporation its

stockholder and the application of fund statements.


9/54

Page | 9

INDUSTRY PROFILE

What is LOGISTICS?

Logistics is about moving materials, information and funds from one business to another or from a business to the consumer. It is a vital part of the business economic system and is a

major global economic activity. In fact 10-15 per cent of product costs are logistics related.

Worldwide, logistics constitutes about $2 trillion a year. For any country, the logistics cost is

estimated between 9 and 20 per cent of its GDP.

Every company dreams of achieving the seven R's - delivering the right product in the right

quantity and the right condition, at the right place, at the right time, for the right customer at

the right cost. Effective logistics management alone can make this possible.

Logistics is one of the oldest and also the newest activities of business management. Itinvolves combining diverse functions and service providers who may be culturally and

`objectively different.

In the past, quality of products and services was the key differentiating factor for companies

operating in the same market. In due course, quality and low cost became the winning

combination.

Today, responsiveness to the customers' needs is the determining factor. An enterprise that

caters instantly to the needs of the customer is the winner. Integrated logistics can serve as a

potent tool for success in today's competitive business environment.

Logistics is an organized process of managing the flow of merchandise from the source of

supply - the vendor, wholesaler or distributor - through internal processing functions like

warehousing and transportation, until the merchandise is sold and delivered to the end

customer.

Logistics management aims to reduce inventory-holding costs and improve

Profits, while enhancing customer satisfaction. Anything can be ordered online, but

receiving a tangible product is impossible. The difference between e-business success andfailure lies in a company's ability to manage the logistics.


10/54

Page | 10

2.1-History of Logistics :The Greeks defined logistics as "the science of correct reasoning by means of mathematics".

The first modern use of the term was in the military to identify the process of planning and

coordinating the movement of army and weapon support systems. Good logistics brings outthe ability to move faster and accurately to the battlefront. If one applies the same to the

business organization, it is one's ability to reach the product to the consumer at the right time,

right place, right quantity and at the lowest cost. On similar lines, supply chain management

will mean the network of organizations involved in the process by which goods are moved

from producer to consumer and the counter flow of information, to manage the supply chain

as a single entity. `

A prominent application of logistics was in World War II where weapon movements

were coordinated to ensure success. A recent instance of massive logistics initiatives is in theGulf war. With increasing competition in the market place, managements started focusing on

customer services in the early 1950s in developed markets such as Europe and the U.S. In late

1960s some of the logistics concepts were tested. Following the oil crisis of the 1970s and the

concept of just in time in manufacturing customer-servicing standards were given more

importance and new integrated logistics models and solutions were born. The emergence of

organized distribution system by department stores and super fast courier service

organizations gave a boost to logistics concepts and strategies. Today all businesses are

looking for seamless transaction systems to co-ordinate their information and materialrequirements along the value chain.

At the micro level any manufacturing and marketing company spends 5 - 35 per cent of sales

on logistics. The major cost components are transportation, warehousing and inventory

carrying cost. Improvements in logistics get reflected in a reduction in inventory levels,

shorter delivery schedules, and improved servicing standards with significant savings in total

costs.


11/54

Page | 11

2.2-Logistics Management Process :

Michael Porter in his famous book "Competitive Advantage'' has spoken of the value chain

approach and emphasized logistics as one of the most important tools for competitive

advantage.

The various processes and elements that are part of logistics as a discipline are:

Inbound logistics:

Purchasing, Inbound transportation, Inventory Management. Manufacturing: Production

planning systems, Machine scheduling system.

Outbound logistics:

Order booking process, Distribution management, outbound Transportation and Warehouse

management systems. As customers started demanding improved servicing standards, fastcycle time has become the key factor for business success, whether it is custom made

tailoring service in Hong Kong or development of a new car in Detroit.

Before delving deep into logistics, a look at the current business scene will be great help.

2.3 -Scenario of Logistics in India : At present, companies specializing in logistics operations in India use traditional technologies

and cater to stand alone services like transportation, warehousing, clearing and forwarding.

There is tremendous scope to upgrade the technology, integrate the entire supply chain,

improve productivity levels and bring down operating costs. Any technology that can

improve productivity in transportation operations will be a great boom to the economy both

directly and indirectly with opportunities for 10-12 per cent reduction in costs. Besides the

savings on downstream users of transport will be much higher and the cost multiplier effect

on the economy will be reduced to that extent.

Given the emerging business and technological trends there are possibilities for

adoption of innovative logistics solutions specifically designed for India. In addition, there is

a requirement for an integrated strategy towards developing logistics and its related IT

infrastructure and also enhancing its industry base.

In recognition of the growing need for technology-enabled solutions in logistics in

India and abroad, many companies such as e- Logistics are taking shape. In fact, there are a

dozen multinational logistics companies such as Exel, Bax Global and Menlo which have

started operations in India during the last few years.


12/54

Page | 12

Today logistics management in India has become complex with about ten million

Related outlets to cater to the needs of 1000 million people.

The logistics market in India is estimated to be Rs. 260,000 crores and constitutes 13

per cent of the GDP. It is much higher than for the U.S. but lower when compared to

countries like China and Korea.

A reduction in logistics costs by one percentage point will mean a saving of $4.8 Billion or

Rs. 21,600 crores annually. Besides significant benefits can be reaped through the multiplier

effect of better Logistics on all economic sectors.

2.4-Government action to logistics industry in India:

Introducing policy measures to represent to the railways to endow a favoredpreferential treatment to cement on par with coal and petroleum products

Promoting cement specific inland waterways and encouraging development of inland

ports and handling facilities dedicated to cement

Identifying major / minor ports that would be able to support the requirements of

cement exports from major clusters

Removing the restrictions on constructing port based cement handling facilities

Proactively pursuing common service providers (experts) for logistics handling,

across multi-modal transport facilities of road, water and rail - in line with

Automotive Industry

2.5- Logistics Industry-Primary Growth Drivers:

Growth Drivers:

Investment in infrastructure sector amounting to US$ 500 bn.

Streamlining of the indirect tax structure i.e. introduction of (VAT & proposed

introduction of GST)

Robust trade growth and liberalization.

Globalization of manufacturing system resulting in manufacturers concentrating on

core competencies and availing cost saving potential of outsourcing.


13/54

Page | 13

Benefits:

Increased efficiency and productivity resulting in reduced transit times.

Reduces the no. of warehouses, manufacturers need to maintain and increases

demand for logistics service providers.

Increased demand for transportation, handling and warehousing .

Expected to increase need for integrated logistics solutions.

2.6-INDIAN TOP 10 LOGISTICS COMPANIES

1. TNT

2. AF L

3. DH L 4. BLUE DART

5. GATI

6. SAFEXPRESS

7. ASHOK LEYLAND

8. AGGRAWA L PACKERS AND MOVERS

9. DTDC

10. FIRST F LIGHT


14/54

Page | 14

COMPANY PROFILEA rapidly growing third-party logistics (3P L) firm, ARUN SE LVAN LOGISTICS provides

best-in-class outsourced product fulfillment, transportation and warehousing services for the

electronics industry, manufacturers and consumer goods industry, shipping to retail.Competitive Advantage

In todays economy, there obviously has to be a compelling reason to change providers, and

the company offers that reason with their core competencies and proven capabilities.

Competitive advantage is simply that the company executes the basics better and offers a

complete turnkey solution using a best industry practices at a competitive cost. The company

can effectively transition clients to ARUN SE LVAN LOGISTICS without disruption in their

business; this allows our clients to focus on their core competency of marketing and selling

and allows AS L to focus on our core competencies of distribution and fulfillment.

First and foremost a professional services firm, AS L provides exceptional 3P L services at a

competitive cost.

3.1-About ARUN SELVAN LOGISTICS:

ARUN SELVAN LOGISTICS is a third party logistics company providing comprehensive

supply chain management solutions with a national network. A privately owned company,

headquartered in Indias silicon city, Bangalore, AS L provides supply chain management

solutions that are flexible, scalable and offer visibility throughout the supply chain. AS L

operates with honesty and integrity.

Founder of the company Mr. Arun & Mr. Selvan two Brothers

Key Stats:

Founded 2005, Bangalore

Nature of Service Leading 3rd party Logistics Firm

Turn over IN excess of INR 250 core

Workforce Approximately 300

Infrastructure Over 200,000 sq. ft of Warehouse space

Presence 25 Branches in India


15/54

Page | 15

BRANCHES

EAST WEST NORTH SOUTH

Patna Ahmadabad Ludhiana Bangalore(4)

Bhubaneswar Mumbai New Delhi Chennai

Gunahati Baroda Ambala Pondicherry

Kolkata Pune Jaipur Cochin

Ranchi Indore Noida Hyderabad etc.

3.2-Clients:

ASLs focus is on improving the service level that companys clients are able to deliver to

their customers. Companys mission to exceed their customers expectations will lead them

to profitable growth. Company takes cost out of the pipeline by managing the flow of

products and information with a chain-wide view.

AND MANY MORE..


16/54

Page | 16

3.3- Basic philosophy:

ASL basic philosophy is that the distribution business is a simple business. At every

opportunity, we strive to simplify and take complexity out of the system. Our customized

solutions are very straightforward. We invest our resources in information systems and

training of our personnel. Both of these investments allow our people to perform to their

maximum capabilities.

3.4-Vision & Mission

Vision

Be the trusted partner to provide world class logistics and supply chain management services

to our customers and reach a market share of Rs. 100 crore by 2011

Mission

To be the most valuable link in our clients supply chain through positioning the right

products, at the right place, at the right price, at the right time, in right condition.

3.5-Quality Consciousness :

ASL Quality Policy

We are committed to provide excellent integrated logistics service to

customers duly meeting their quality and Delivery requirements with emphasis

on total customer satisfaction, long term relationship and also continual

improvement of the Quality Management System.


17/54

Page | 17

3.6-STRATEGIC O BJECTIVES

i. Sustained growth-optimising production potential in least possible time.

ii. Leadership in niche market and customer oriented marketing.

iii.

Internationalisation of business.iv.

Cost competitiveness with international bench-marking .

3.7-SAFETY AND HEALTH POLICYWe are committed to:

a. Adhere legislation and government regulations related to safety and health in

corporate activity.

b. Foster safety and health awareness among its employees through preventablemeasures, continuous development, awareness and improvement in the work

environment.

3.8-CORE VALUES:i. Integrity

ii. Trust

iii. Caring for people

iv. Commitment to excellence

3.9-PROMOTION STRATEGY OF ASL:

1) Promotional tactics like advertisement and other promotional campaigning, but

for the brand building they follow Proper logos of AS L.

2) For Promotion Company launches a new services follow proper usage of AS L

logos on every vehicles, other resources.

3) For promotion company launches a new service which it campus to home by

them they target IIM students and build a strong brand name among them.


18/54

Pag e | 18

3.10-ORGANISA TIONA L STRUC TUR E

CM & MD

FINANCE HEADOPERATIONAL HEAD

REGIONAL MANAGER

BRANCH MANAGER BRANCH MANAGER

MARKETING HEAD

CLERK

DATA ENTRY OPERATOR

ACCOUNTS EXECUTIVE

CLERK

PEON/SECURITY


19/54

Pag e | 19

3.11-D E AR T E NT S AND IT S W ORKF L O W P ROC E SS

(E ND T O E ND)

Opera ti Accoun t Marke ting,

Work f low process for B TO B struc ture :

ORDERPLACEMENT

ORDERPROCESS

CLIENT

CONSIGNEER

VERIFICATION OF GOODS

INVOICE PREPARED

VEHICLE

SUPPORT

VENDER SVEHICLE(3rd pa rty)

ASL VEHICLE

ASL(HUB) WAREHOUSE

INVOICE PREPARED

POD COPY A/C COPYMENIFESTTHC SHEET (Truck hire contr act)

CONSIGNEECOPY

DATA ENTRY (ERP)

LOADED GOODS SENT TO BRANCHES

DOCUMENTGENERATION

GOODS DELIVERED TO CONSIGNEE


20/54

Pag e | 20

Accounts:

3.12-FUNC TIONA L OF DEP AR T E NTS:

3.12.1-OP ERA ON A DE P AR ME NT

y R espons i ilit to focus on s torage p lann ing and managemen t; y Warehouse proper t insurance company of a ll the work and is respons i le for the

timely process ing of c laims re lated to pos t Chux ian work ;

y At any time of ver if ica tion and con tro l inven tory throughou t the warehouse is

respons i le for ver if ication of inven tory da ily repor t , mon thly inven tory coun ts,

and s low-mov ing mach ine week ly repor t and o ther re levan t statemen ts of inven tory

of goods be tween the var ious warehouses a lloca tion procedures and the hand ling of

re lated documen ts;

y P osition is respons ible for overa ll managemen t of the total work ;

y Is respons ible for timely and correc tly hand le the warehous ing of emergency.

y Overa ll gu idance, mon itor ing, eva luation and coord ination of the work of the var ious

branches of the warehous ing d istr ibu tion in order to mee t the needs of the loca l

marke t sa les;

3.12.2- ACC OUNTS:

y To deve lop the companys annua l f inanc ial budge t, f ina l accoun ts aud it program.y The deve lopmen t compan ies to increase or decrease the reg istered cap ital program.

y I n accordance w ith re levan t state laws and regu lations and the company accoun ting

sys tem, true, accura te and timely ref lect the companys bus iness cond itions ;

y The Governors var ious econom ic ac tivities, ensure that the company a ll econom ic

activity in accordance w ith na tiona l laws and regu lations and the company opera ting

ACCOUNTS SECTION

POD MAINTANENCE MONEY RECEIPT BILLING


21/54

Page | 21

under the premise of the financial system and ensure the security integrity of the

companys assets;

y To fulfill the companys financial management responsibilities and carry out sound

financial budget, control, analysis and evaluation work , the effective use of resources

the company increase the companys cost-effectiveness;

y Head office logistics costs of the approved and audit work;

3.13 -SERVICES:

3.13.1- Logistics :

1. Outbound Logistics

Once produced, goods need to be delivered to customers in a cost-effective way that still meetsexpectations regarding service and availability. ARUN SE LVAN LOGISTICS puts its extensive

experience in warehousing and distribution of finished goods at the disposal of clients countrywide.

Throughout the network, we manage and operate warehouses on behalf of our customers with

combined space of more than 2 lakh square ft. In most of these warehouses AS L stores finished

products and spare parts. For straightforward storage or other regular warehousing requirements we

offer shared facilities, which will lead to lower cost for our customers. We can also design an

implement customized storage facilities with additional features, including:

y Dedicated warehousing

y Multi-user warehousing

We can organize and manage all inbound and outbound transportation among suppliers and

warehouses or production facilities. This can include transport by air, rail or road. We oversee the

transportation arrangement and manage the entire process directly.

2. Inbound Logistic:

Manufacturing and assembly plants need to get parts and raw materials in the right sequence, th

right quantity, the right quality and at the right time. In order to reduce inventory levels,

manufacturers need to streamline their supply chains and increase their visibility.

ASL is an expert in providing inbound logistics to, for example, the automotive industry, electronic

industry.

service extends beyond transportation and warehousing and includes:


22/54

Page | 22

3. Kitting

We manage the selection, packaging and delivery of unassembled parts prior to the assembly line,

with the goal of minimizing production and installation time. We integrate the kitting process intoour warehouse operations so that the process becomes a seamless part of the inbound supply chain.

4. Milk runs

we optimize transportation flows, called milk runs, by performing multiple collection or delivery

routes for customers in the same industry. Instead of arranging for transport from location A to

location B and back, we plan fixed routes with various loading/unloading points, combining the

required orders from different customers at the same time.

This ensures optimal use of vehicle capacity and lower transportation costs. Customers benefit frommore frequent deliveries at a lower cost.

5. Sequencing

Through our sequencing services, we arrange for items destined for a production line to be picked

(and packed) in a specific sequence. By doing this, time is saved and production-line efficiency is

improved.

6. Vendor Inventory Management (VIM)

We manage the inventory of several vendors in one warehouse, related to one or several plants.

Lead Logistics Provider:

After redesigning and optimizing a customer's supply chain, AS L will focus on managing the

information technology and information flows. The Lead Logistics Provider ( LLP) concept is based

on the total management of the supply chain. As a Lead Logistics Provider, we provide a wide range

of logistics services to the entire supply chain, sometimes by using carefully selected logistics

partners or transport companies.

Our customer benefits from having just one logistics operator that oversees the entire supply chain.

As LLP, we act as a seamless intermediary between our customer and the subcontracted providers,

thus acting as a single point of contact for our customer.


23/54

Page | 23

3.13.2- Warehouse

ASL's warehousing and distribution services are an excellent complement to your transportation

requirements. Goods will move through your supply chain at a high velocity. More importantly, you

will minimize order cycle times and maximize throughput, while reducing capital investment andinventory carrying costs Warehousing and Distribution services include:

y Shipment Consolidation/De-Consolidation

y Strategic Warehousing

y Pick N Pack

y Cross Docking

y FIFO/ LIFO

y

Bin managementy Reverse Logistics

Every customer has unique needs based upon their market requirements and manufacturing

constraints. AS L works to design a warehouse strategy with each client to optimize the overall

supply chain efficiency Our WMS System allows you to locate & store products in rack, bin, or bulk

storage configurations and ensures one hundred percent inventory accuracy, precise dat

management and full visibility The best part is, warehouse layouts can be customized to meet your

specialized order fulfillment and storage requirements At AS L, the benefits you'll receive from our

distribution services are simple: greater stock turns,

increased product availability, improved reporting, less inventory, reduced order times and more

profitability.

3.13.3- Technology

At A S Logistics we focus on refining and perfecting our customers' logistics business process and

on delivering supporting technology solutions. We have developed a range of supply chainmanagement, inventory control, transportation and warehousing software that optimizes materialand

information flows.

AS Logistics OASIS (Online-Accurate-Supply chain-Information-System) is a centrally hosted,

integrated suite of supply chain technologies that enables us to manage complex supply chains.


24/54

Page | 24

OASIS connects with the partners and supports inbound just-in-time logistics, outbound logistics

and reverse logistics across multiple industry verticals. It integrates transportation, inventory

management, order fulfillment, financial settlement. By integrating all the processes in the supply

chain, each customer is given real-time visibility of inventory, order and shipment status. The

increased optimization of the distribution network leads to improved customer service and enhanced

cost savings.

Oasis is a suite of applications that allows the activities of the supply chain to be analyzed, re-

planned, executed and monitored. No matter how complex the customer's technology resources are,

Oasis can be integrated to optimize costs, functionality and flexibility.

OASIS automatically shares operating data among processes such as strategic planning

optimization, warehousing activities and back office functions, and creates significant supply chainefficiencies

The financial settlement module can manage the commercial billing of each movement and

associated ledger posting. A comprehensive integration environment can manage data exchang

with external systems and provide web access. The data warehouse stores all transportation data.

3.13.4- Careers

Employment Opportunities at ARUN SELVAN LOGISTICS

With over 12 crores in annual revenues, and rapidly growing nationwide with a vision o

100 crores by 2011, AS L provides many great opportunities for career growth. AS L i

family owned and operated. Company culture is rooted in strong values of integrity,

character, individual initiative and a commitment to teamwork.

Employment Opportunities in ASL include:

y Accounting/Finance

y Logistics


25/54

Page | 25

y Administrative

y Warehouse

y Operations

y Management

y Information Technology

y Sales

y Drivers

y Clerical

y Maintenance

y Human Resources

.


26/54

Page | 26

14-SWOT ANALYSIS:

Strength:

Distribution channel of AS L

Working 6 days a week

Next day delivery services for nearby location

Opportunity:

Rise in demand for courier services

Global business diversification Rise in manufacturing sector

Development in niche market

Weakness:

Less use of technology

Man power

Less of brand awareness among the people.

Threat:

Competitors (big brand companies and Unorganized sectors)

Risk in operational cost.

3.15-Market Analysis :

3.15.1-Market segmentation:

1.

On the basis of Income: - Company make segment on the basis of Income of organization and Size and capacity of

business given to company.

High income customers e.g. HI LTI, TATA Motors, Madura Garments, HONDA Motors

and SAMKRG.


27/54

Page | 27

Middle income customers- e.g. united color of, TnG Garments, Penguin Publication, Cipla

and Landmark.

Low income customers- e.g. Landmark Publication and students.

2.

On the basis of geographical:-

Company divides its market on the basis of size and location of the cities.

Tier1 Cities NCR resign, Mumbai, Kanpur, Kolkata, Pune, Bangalore and Hyderabad

Tier 2 Cities- Jaipur, Lucknow, Jalandhar, Udaipur

Tier 3 Cities- Varanasi, Rajgir, Karnal,

3 . Market Trend: -

Logistics industry trends indicate that in the years to come the following factors, which

guide the logistics industry is reckoned to strengthen further. The factors integration,

confederations, technology, legislation and globalization.3.15.2-PRICING STRATEGY:

ASL follows a unique pricing Strategy for its customer. It follows two kind of price segment

for customer according to extent of business given to them.

1. Credit Basis

2. Retail Basis

1.

CREDIT BASIS:

This service is for the organization who give huge amount of business to company and who

are the long term and regular customer.

There is no fix charges for the services company decide price on the basis of monthly billing

the price is totally negotiation based and payment form the companies is received at the end

of the month from the companies means it is totally credit based.

Importance of Credit Bases:

1. Reduce the cost for the company

2. Helps in building relationship with company

2. RETAIL BASIS:

The retail basis is the price for the customer who is not very heavy user of the services. The

price depends upon following charges

1. Rs 200 fixed charge per safe box

2. Fuel surcharges


28/54

Page | 28

3. FT L charge

4. Insurance charge

The freight of the goods depends upon on the medium by which they are carried

1. By Road

2. By Train

3. By Air

The rate is calculated on the basis of

1. By Weight

2. By Volume

By Weight Technique is used for heavy Weight Goods Such as Machine Engine, parts of

machine etc.

By Volume technique is used for light weight products such as T-shirt, shirts, medicines and

FMCG products.

3.16-MICHALE PORTERS FIVE PRINCIPLES APPLYING IN

ASL:

3.16.1 . Rivalry among competitors: -

Rivalry among competitors is often the strongest of the five competitive forces.

For AS L competition is from Unorganized transporters

International players like DH L

Domestic company GATI

3.16.2. Threat from New entrants: -

Company may have the market cornered with the product, but the success may inspire others

to enter the business and challenge your position.

For AS L

Threat is from various cargo companies which may enter in logistics business

Threat is also from entry of other international players like UPS

3.16.3. Bargaining power of Buyers:-

The power of buyers describe the effect that your customers have on the profitability of your

business the transaction between the seller and buyers create value for both parties

For AS L


29/54

Page | 29

y The bargaining power of buyers is medium because of sufficient number of

logistics companies

3.16.4- Bargaining power of suppliers:-

Any business requires inputs-labors, parts, raw material and service. The cost your inputs

have a significant effect on your companys profitability

For AS L

The bargaining power of suppliers depends on the

Price of fuel

Government polices

Taxes

Cost of land

Increase in rents

3.16.5. Threats of substitutes: -

Products or services from one business can be replaced by products or services from another

if you produce a commodity product that is undifferentiated, customer can switch from your

product.

For AS L Substitute may be the transporters who give services at cheaper rate.


30/54

Page | 30

KEY PARAMETERS FOR PROFITA BILITY

4.1- Customer Service :

Customer services are a process for providing significant value-added benefitsto the supply chain in cost-effective way. This definition illustrates the trend to think of

customer service as a process-focused orientation that includes supply chain management

concepts.

It is clear that excellent customer service performance seems to add value for all members of

the supply chain. Thus, a customer service program must identify and prioritize all activities

important to accomplish operating objectives. A customer service program also needs to

incorporate measures for evaluating performance. Performance needs to be measured in terms

of goal attainment and relevancy. The critical question in planning a customer servicestrategy remains, does the cost associated with achieving the specified service goals represent

a sound investment and, if so, for what customers? Finally, it is possible to offer key

customers something more than high-levels basic service. Extra service beyond the basics is

typically referred to as value- added. Value- added services, by definition, are unique to

specific customers and represent extensions over and above a firms basic service program.

y The three fundamental dimensions of customer service were: -

Availability.

Performance.

Reliability.

About Logistics & Customer Service

Logistics contributes to an organizations success by providing customers

with timely and accurate product delivery. The key question is who is the customer? For

logistics, the customer is any delivery destination. Typical destination range from consumers

homes to retail and wholesale businesses to the receiving docks of a firms manufacturing

plants and warehouses. In some cases the customer is a different organization or individual

who is taking ownership of the product or service being delivered. In many other situations

the customer is different facility of the same firm or a business partner at some other location

in the supply chain. Regardless of the motivation and delivery purpose, the customer being

serviced is the focal point and driving force in establishing logistical performance


31/54

Pag e | 31

requ iremen ts. I t is impor tan t to fu lly unders tand cus tomer serv ice de liverab les when

estab lish ing log istica l strategies.

Whereas log istics is no t capab ility that con tr ibu tes to overa ll success, it is

fundamen tal to serv icing cus tomers. I n a typ ica l marke ting s itua tion, the des ired cus tomer

serv ice performance changes over time. To p lan marke ting s trategy in a dynam ic w ill serve to

illustra te how log istica l cus tomer serv ice requ iremen t re lated to a spec if ic produc t/segment

situation w ill change over time. The produc t life cyc le s truc ture offers a usefu l framework for

view ing the dynam ics assoc iated w ith cus tomer serv ice requ iremen ts p lann ing. I n terms of

overa ll log istica l performance, the bas ic cus tomer serv ice p latform or program shou ld be the

leve l of suppor t prov ided to a ll cus tomers.

Va lue Pr opos it ion:

4.2- Ope r a t ions eff icienc ies

4 .2.1- In t na l A it Suppor t

Benef its:

Enhanced Qua lity and cus tomer sa tisfac tion by a lign ing cross- func tiona l process

performance

R ecommenda tions based lead ing indus try prac tices.


32/54

Pag e | 32

4 .2.2- Po li i & Procedures

Benef its:

P olicies & P rocedures Framework a imed a t estab lishing accoun tab ility of your

bus iness processes.

Common unders tand ing of ro le & respons ibilities across func tions & loca tions.

Stream lining and s tandard i ation of process.


33/54

Pag e | 33

4 .2.3- C os t Reduc ti on & Performance Improvemen t :

A su ite of indus try-spec if ic Serv ices that P rov ide P rocess I mprovemen t and opera tiona l

P erformance recommenda tions. Our overa ll approach :

4 .2. 4 - Fraud Inves ti a ti on:

Benef its:

P roac tive Fraud Risk assessmen ts to ass ist in iden tifying m itigating con tro ls for po tentia l

areas of leakage.


34/54

Pag e | 34

4 .2.5- Appli ca ti on con t ro l Revi ew:

Benef its:

Assess the adequacy and effec tiveness of bus iness con tro ls imp lemen ted w ith in the

app lication.


35/54

Page | 35

5.1- MEANING OF FINANCIAL STATEMENT:

A FINANCIAL STATEMENT is a collection of data organized

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 a balance sheet, or may reveal a series of activities over a

given period of time as in the case of an income statement.

Thus, the term financial statement generally refers to the two statements:

1. The position statement or the balance sheet ,and

2. The income statement or profit and loss account.

These two statements are used to convey to management and other interested outsiders the

profitability and financial position of a firm. Financial statements are the outcome of

summarizing process of accounting.

F inancial statement analysis:

The term financial statement analysis also known as analysis and interpretation of financial

statements. It refers to the process of determining financial strength and weakness of the firm

by establishing strategic relationship between the items of a balance sheet, profit and loss

account and other operative data.

Financial statement analysis is the process of examining relationships among financial

statement elements and making comparisons with relevant information. It is a valuable tool

used by investors and creditors, financial analysts, and others in their decision-making

processes related to stocks, bonds, and other financial instruments.

The goal in analyzing financial statements is to assess past performance and current financial

position and to make predictions about the future performance of a company. Investors who

buy stock are primarily interested in a company's profitability and their prospects for earning

a return on their investment by receiving dividends and/or increasing the market value of

their stock holdings. Creditors and investors who buy debt securities, such as bonds, are more

interested in liquidity and solvency: the company's short-and long-run ability to pay its debts.

Financial analysts, who frequently specialize in following certain industries, routinely assess


36/54

Pag e | 36

the profitability, liquidity, and solvency of compan ies in order to make recommenda tions

abou t the purchase or sa le of secur ities, such as s tocks and bonds.

5.2- Object i es of F in a nc ia l St a tement An a l sis:

Financ ial statemen ts are the sources of informa tion on the bas is of wh ich conc lus ions are

drawn abou t the prof itab ility and f inanc ial pos ition of a concern. They are the ma jor means

emp loyed by f irms to presen t their f inanc ial pos ition. The pr imary ob jective of f inanc ial

statemen t ana lysis is to ass ist in dec ision mak ing. The fo llow ing are the ob jectives of the

study :

. To assess the f inanc ial performance by se lecting few parame ters such as liqu idity

ratios, so lvency ra tios and prof itab ility ra tios.

2. To prov ide o ther needed informa tion abou t changes in econom ica l resources and

causes.

3. To s tudy the f inanc ial pos ition by tak ing three measures a t a time, name ly:

a. iqu idity.

b. So lvency.

c. P rof itab ility.

4. To sugges t ways to make the bes t use of ava ilab le resources and increase prof itab ility.


37/54

Page | 37

5. To provide financial information that assists in estimating the earning potential of

business.

6.. To disclose, to the extent possible, other information related to the financial

statements that is relevant to the needs of the users of these statements.

5.3- Types of Financial Statement Analysis:

1. Horizontal Analysis: When an analyst compares financial information for two or more

years for a single company, the process is referred to as horizontal analysis ,

2. Vertical Analysis: When using vertical analysis, the analyst calculates each item on asingle financial statement as a percentage of a total. The term vertical analysis applies

because each year's figures are listed vertically on a financial statement.

3. Ratio Analysis: Ratio analysis enables the analyst to compare items on a single financial

statement or to examine the relationships between items on two financial statements. After

calculating ratios for each year's financial data, we can then examine trends for the company

across years. Since ratios adjust for size, using this analytical tool facilitates intercompany as

well as intercompany comparisons

Types f F nancialStateme nt

Analysis

H iz nt alAnalysis Ve tical Analysis Ra t i Analysis


38/54

Pag e | 38

1.

C urren t Ra ti o

Cu rr ent R a t io = Cu rr ent a sset / Cu rr ent Li a bilit ies

Inte r pr et a t ion

A h igh curren t ra tio is an ind ica tion that the f irm is liqu id and has the ab ility to pay its curren t

ob ligations in time as and when they become due. ow curren t ratio represen ts that the

liqu idity pos ition of the f irm is no t good and the f irm sha ll not be ab le to pay its curren t

liab ilities in time w ithou t fac ing d iff icu lties. The genera l ru le of thumb expresses that curren t

ratio shou ld be 2 : . As per the above char t it is found that in the year 2008-09 the curren t

ratio is h igher as compare to prev ious year. Because in 2008-09 curren t liab ilities is lesser

Then the curren t asse t, bu t in the year 09-10 aga in the Curren t ra tio dec lining , because the

curren t asse t is less than the CL, So over a ll the company liqu idity pos ition is fare enough to

mee t the deb t, and it is Sa tisfac tory.

0

2

3

4

2007-2008 2008-2009 2009-20 0

Current ratio

Current ra t io

Y ea r Cu rr ent a sset Cu rr ent lia b Cu rr ent r a t io

2007-2008 49417786 26243913 1.88

2008-2009 48733234 16453055 2.96

2009-2010 47669020 17541591 2.71


39/54

Pag e | 39

2) Cu rr ent a sset tu r nove r r a t io = T ot a l tu r nove r / Cu rr ent a sset


The asse t turnover ra tio s imp ly compares the turnover w ith the asse ts that the bus iness has

used to genera te that turnover. Here the above cha t show ing that in the year 08-09 the

percen tage of CAT R is lower as compared to prev ious year i.e 3.18% bu t aga init grows to

3.26.So it is a be tter indica ting where the company can u tili ing its asse t in be tter way

.There is a f luctuation in terms of turnover and its asse t base. However, the very h igh ne t

asse t turnover ra tio va lues came when the turnover and asse t va lues were low, so

ma thema tica lly this can of ten mean tha t the ra tio is very likely to be h igh. So, it s no t always

bad when a ra tio fa lls - it shou ld recover, though, as the add itiona l asse ts s tar t to genera te

more sa les and prof it in the com ing mon ths.

Y ea r T ur nove r Cu rr ent a sset CA T R 2007-2008 172648068 49417786 3.49

2008-2009 155129663 48733234 3.18

2009-2010 155785948 47669020 3.26

33.13.23.3

3.43.53.6

2 -2 2 -2 2 -2 1

CATR

CATR


40/54

Pag e | 40

3) Retu r n on ca p ita l emp loyed: E BI T / C a pita l emp loyed x 100


The re turn on cap ital emp loyed is the pr ime ra tio wh ich measures the eff iciency of the

bus iness. I t is the pr ime test of the eff iciency of bus iness. I t no t on ly measures the overa ll

eff iciency of the bus iness bu t help in eva luating the overa ll performance of var ious func tiona l

area of bus iness. A h igher percen tage of re turn on cap ital emp loyed w ill satisfy the owners

that there money is prof itab ly u tili ed. As per the above char t it is found that in the year

2008-09 the R OCE percen tage is lower as compare to prev ious year. Because in 2008-09

there is no proper u tili ation by the f irm. But in the year 09-10 the R OCE percen tage is

increas ing to 6.69% so its good s ign for the inves tor. But the re turn percen tage is no t tha t much sa tisfac tory so for that company shou ld u tili e its inves tmen t proper ly.

0.00%

5.00%

0.00%

5.00%

20.00%

25.00%

2007-2008 2008-2009 2009-20 0

ROCE

ROCE

Y ea r EBI T C a pit a l emp loyed ROC E

2007-2008 7905858 41318797 19.13%

2008-2009 296413 45903895 0.64%

2009-2010 2946509 44002407 6.69%


41/54

Pag e | 41

4)Net Pr of it M a rg in: Net pr of it / Revenue

Y ea r Net Pr of it Revenue NPM

2007-2008 4657773 172648068 0.026

2008-2009 386356 155129663 0.002

2009-2010 1497701 155785948 0.009


When a company has a h igh prof it marg in, it usua lly means that it also has one or more

advan tages over its compe tition. Compan ies w ith h igh ne t prof it marg ins have a b igger cush ion to pro tect themse lves dur ing the hard times. Compan ies w ith low prof it margins can

get wiped ou t in a down turn. And compan ies w ith prof it marg ins ref lecting a compe titive

advan tage are ab le to improve their marke t share dur ing the hard times - leav ing them even

better pos itioned when things improve aga in. The above cha t ind ica tethat in the year 08-09

the prof it marg in in very low from the prev ious year 07-08. I t is no t a good s ign for the

company. Lower marg in ind ica te the the expenses of the company is more as compared to the

year 07-08. I n 09-10 the marg in s low ly increases to 7% from last year i.e(08-09). So it is the

company shou ld try to m inimi e its opera ting expenses.

0

0.005

0.01

0.015

0.0

0.0 5

0.03

007- 008 008- 009 009- 010

NPM

NPM


42/54

Pag e | 42

5) Ope r a t ing Pr of it m a rg in: EBI T / Sa les x 100


High opera ting prof its can mean the company has effec tive con tro l of cos ts, or that sa les are

increas ing fas ter than opera ting cos ts. The above cha t ind ica te there is decrease in O P M

percen tage i.e from 07-08 4.5% to 0.9%. Wh ich ind ica tes that the f irms opera ting cos t is

increased. On the o ther hand the percen tage leve l aga in increases in the year 09 -10 so here

its a good initiative taken by the company.

0 .00 %

1. 00 %

2. 00 %

3. 00 %

.00 %

5. 00 %

200 7-200 8 2 00 8-200 9 2 00 9-2 0 10

O PM

OPM

Y ea r EBI T Sa les O PM

2007-2008 7905858 172648068 4.5%

2008-2009 296413 155129663 0.9%

2009-2010 2946509 155705948 1.89%


43/54

Pag e | 43

6) Debto r s Tu r nove r R a t io: Net cr ed it a nnu a l Sa les / Ave r a ge t r a de Debto r s

I nterpre tation

Genera lly the h igher the va lue of deb tors turnover, the more eff icient is the managemen t of

deb tors /sa les or more liqu idity is the deb tors. S imilar ly low deb tors turnover imp lies

ineff icient managemen t of deb tors /sa les and less liqu idity deb tors. I n 2008-09 we have seen

that the DT R is lower i.e.3.76%. I t is no t good for the company. I f the average co llection

per iod is increased than deb t will be increased. I n the year 2009-10 deb tor turnover ra tio is

increase i.e 3.9% . From the above char t it is c lear that ASL has deb tors turnover ra tio is

below the performance.

3.5

3.6

3.7

3.8

3.9

4

4.1

4.

00 7- 00 8 00 8- 00 9 00 9- 0 10

D TR

DTR

Y ea r Sa les Av g.t r a de DRs DT R 2007-2008 172648068 42087553 4.102

2008-2009 155129663 41233979 3.76

2009-2010 155705948 39778517 3.916


44/54

Pag e | 44

7) Debt equ ity R a t io: Outs ide r s Fund / Sh a r e ho lde r s Fund


A h igh deb t-equ ity ra tio ind ica tes that the c laims of ou tsiders (cred itors) are grea ter than

those of owners. A very h igh ra tio ind ica tes that the f irm may no t be ab le to ge t cred it

withou t pay ing very h igh ra tes of interes t and cond itions of the cred itors. A very low ra tio is

no t good for the shareho lders because it ind ica tes that the f irm has no t been ab le to use low

cos t ou tsiders funds to magn ify their earn ings. A ra tio of 1 :1 may be usua lly cons idered to

be sa tisfac tory. From the above char t it is found that in 2009-10 deb t-equ ity ra tio is low as

compare to o ther years. Con tinuous ly it is decreas ing trend. I t is c lear that the AS L have been

ma intaining a sa tisfac tory ra tio. The f irm has been aggress ive in f inanc ing its grow th w ith

ou tsiders deb t.

ye a r Outs ide r s Fund Sh a r eho lde r s Fund DE R

2007-2008 33904376 20078157 1.68

2008-2009 38060991 24295959 1.56

2009-2010 34211029 27332969 1.25

00.20.40.60.8

11.21.4

1.61.8

200 -2008 2008-200 200 -2010

D ER

DER


45/54

Pag e | 45

8) Retu r n on Net wor th : Net p r of it a fte r inte r est a nd ta x / Sh a r e ho lde r s Fund x 100


From the above f igure the re turn on shareho lders inves tmen t has been increased in 2008-09. I n 2008-09 the ra tio was decreased to 1.59% because of heavy cap ital expend iture. Otherw ise

the re turn is ge tting be tter year af ter year. I n 2009-10 the ra tio was 5.47%. R OI is a very good

ind ica tor of judg ing the u tili ation of resources and cap ital of the concern. From the above

char t it is found that the AS L PV T LTD is u tili ing the resources in proper way.

0.00%

1.00%

2.00%

3.00%

4.00%

.00%

6.00%

2007-2008 2008-2009 2009-2010

R NW

RNW

Y ea r NPAT Sh a r eho lde r s Fund RN W

2007-2008 465773 20078157 2.31%

2008-2009 386357 24295959 1.59%

2009-2010 1497701 27332969 5.47%


46/54

Pag e | 46

9) G r oss Pr of it M a rg in: G r oss pr of it / T ot a l r evenue.

Inte r pr et a t ion-

Higher ra tios be tter the resu lt. A low gross prof it ratio ind ica tes h igh cos t of goods so ld due

to unfavorab le purchas ing po licies, lesser sa les, lower se lling pr ices e tc. from the above char t

the ra tio is no t very good. The managemen t shou ld m inimi e its expenses for be tter resu lts. I n

2007-08 the gross prof it ratio is h igh as compare to o ther years. I t is decreas ing in year 2008-

09 & 2009-10 due to h igh cos t of goods so ld. From the above 3 years in 2008 the gross prof it

ratio is very low.

0

0.01

0.02

0.03

0.0

0.0

2007-2008 2008-2009 2009-2010

G PM

GP

ye a r G r oss p r of it Tot a l r evenue G PM2007-2008 7905858 172648068 0.045

2008-2009 296413 155129663 0.019

2009-2010 2946509 155785948 0.189


47/54

Page | 47

FINDINGS:

y The current assets have gradually Fluctuating year by year but current liabilities have

increase to Rs. 1.8 crores in the year 2009-10 as compared to the previous year, higher

than 2007-08 .

y Even though current assets have increased in 09-10. It shows the cash position of AS L

Is low as compared to previous years.

Efficiency of ASL .

y There is a fluctuation in terms of turnover and its asset base. However, the very high net asset

turnover ratio values came when the turnover and asset values were low.

y It shows that AS Ls debtors turnover ratio is below the performance. This indicates

the inefficient management to collect the amount in time.

Profitability position of ASL:

I. The gross profit ratio for the year 2008-09 is very low i.e. .019% as compared to

previous years. It indicates, in this year the cost of goods sold is high due to

unfavorable purchasing policies.

II. By analyzing the net profit margin, we can say that profit after tax is not satisfactory

in 08-09 but there is a huge increase in net profit ratio in 09-10 which is a good sign

for the company. But overall the company net profit position is satisfactory.

III. Earnings per share of AS L in 08-09 are Rs 22.62 and in 09-10 it reduces to Rs22.00which is not a good signal for investment. It shows the investors less interest to

purchase the share of that company as it dives good returns to them.


48/54

Page | 48

Long-term position of ASL:

I. From the long term position point of view, the AS L has been aggressive in financing

its growth with outsiders debt. In the year 2008-09, the AS L has maintained a

satisfactory ratio i.e. 1.56 as it is not too high or too l

II. In the year 2009-10, the equity or shareholders fund is slightly increased in compare

to previous years i.e. 11.11% which is acceptable but not satisfactory.

III. The reserve and surplus are not utilizing for the payment of dividends in 09-10 .


49/54

Page | 49

SUGGESTIONS

I. The company should follow an effective system for the improvement or proper

utilization of resources for the better results.

II. The AS L should take an effective steps towards the collection if the amount in time.

By which the cash position of company can also be in good position.

III. To maintain the better working capital turnover ratio, the company should be efficient

in utilization of working capital. i.e. current assets and current liabilities.

IV. The AS L should maintain stable in cost of goods sold to have a good gross margin on

its goods delivered.

V. From net profit ratio point of view, the company has flotation in net margin. But the

company has to maintain uniformity in its net profit ratio.

VI. Higher the equity ratio better will be the solvency position. Even though, for the year

2009-10, the equity ratio of AS L is acceptable but it is not satisfactory. So the

company should try to improve its equity ratio.

VII. Organization can further strengthen the employee strength in the documentation

department. This can lead to further rapidity for operations.

VIII. Organization can initiate Human Resource Department to further enhance employee

motivation. This will have favorable impact for the operational as well as total

strengthening of organization.

IX. Operations with other logistical providers need to be enhanced further for operational

effectiveness, more focus should be given to customer delight and cost effectiveness

X. Client handling and service need to be followed in the same way and can be further

enhanced with more support. This can be achieved by proper guiding of employees

and other workers in the logistical area


50/54

Page | 50

LEARNING EXPERIENCE

I strongly believe Learning is an Experience and I had been a learning environment which

is truly inspiring and supportive, where I have the opportunity to experience the joy of

learning. The unmatched Learning Experience stimulates every individual to explore their

innate abilities.

I am dedicated to providing the best effort that delivers real benefits for my future and so

adopt the best teaching methodologies to bridge practices, and principles which enables

students to master the business management.

Working at ARUN SE LVAN LOGISTICS PRIVATE LIMITED was largely an goodexperience with gaining insights to a number of new things. The working environment in

ASL was very cooperative; I had given the work on different branch wise and vehicle wise

MIS report generation. I also worked each segment in an organization followed by the

members. I had also given the work on preparing the cost volume analysis of each vehicle

related to the consignment. I learnt how our theoretical aspects are different from practical

field in the industry I had to put in my own efforts and take initiative to learn and gain

maximum knowledge possible during this period.

.


51/54

Page | 51

BIBLOGRAPHY:

Reference Books:

y Sharma&Gupta, ManagementAccountanc, KalyaniPublisher, plasticote (India), Shahdara

Delhi 2006 Edition,

y Jain & Narang, Financial Accountancy, Kalyani Publisher, TimesPrintoGraphy, New

Delhi (2006 Edition) ,

y Sudhindra Bhat, Financial Management , Excel Book Publisher, excel printers (2008

Edition), New Delhi,

Reference magazine

i. Business Today

ii. Business India

Reference websites

i.

http: //www.aslindia.com

ii.

http: //www.google.com

iii. http: //www.wikipedia.com


52/54

Page | 52

ANNEXURE

y Companies Annual Report

y Balance Sheet

y Profit and Loss Account


53/54

Pag e | 53

ARUN SEL V AN LOGIS TICS PRI V ATE LIM ITE D

Ba la nce Sheet As a t 31st M a r ch 2010

(Amoun t in R s)

PAR T ICU L ARS As of 31.03.2010 As of 31.03.2009 As of 31.03.2008

Sources Of Fund:

E qu ity sh a r e ca pita l 20,000,000 20,000,000 14,500,000

Rese r ve a nd Su r p lus 7,332,9 69 4,29 5,959 5,578,1 57

Secu r ed L one 14,462,33 5 16,404,66 8 13, 580177

Unsecu r ed L one 2,207,103 5,203,2 68 7,616,578

Deffe r ed ta x a sset (646 ,809) 43,88 5

T ota l 44 ,002, 407 45 ,903,89 5 4 1,318,797

App li ca ti on Of Fund:

Fixed a sset

G r oss Block 21, 529,831 21,3 50,779 20,978,7 59

L ess: Pr ovision for Dep r ecia t ion 13,0 56 ,508 11,922,221 6,419, 699

---------------- ----------------- ----------------

8,473,323 9,428, 558 14,559,0 60

Investments Nil Nil Nil

Deffe r ed ta x Asset 27 5,343 646 ,810 Nil

Cu rr ent Asset, L one a nd a dv a nce

Cu rr ent Assets:

Sund r y debto r 39,17 6,628 40,380, 406 4 2,087, 553

C a sh in h a nd a nd b a nk 217, 539 1,616,64 2 624,001

Othe r cu rr ent a sset 8,27 4,853 6,73 6,18 6 6 ,70 6,232

L one And Adv a nces 5119180 3,534,100 3,564 ,492

L ess:

Cu rr ent Li a b ili ty a nd p r ovisions 17, 54 1,591 16,45 3,0 55 26,243,913

Net Cu rr ent Asset 35,246 ,617 35,81 4279 26,738,3 65

M isce lla neous E xpend itu r e 7,12 4 14,248 21,372

T O T AL 44 ,002, 407 45 ,903,89 5 41,318,797


54/54

Documents

PROJECT ON LOGISTICS COMPANY SIMA