Recruitment and Seleciton (Hindustan Tyres Ltd.)

7/27/2019 Recruitment and Seleciton (Hindustan Tyres Ltd.)

1/74

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.


2/74

About Hindustan Tyres Ltd.

"Hindustan Cycles & Tubes Limited" is one of the most

reliable name in the field of Tyres and Tubes. The company wasestablished 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 areproduced. 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


3/74

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 Code Country CodeAFGHANISTAN

ARGENTINA

BANGLADESH

BAHRAIN

BOLIVIA

BRAZILBURKINA FASO

CHILE

COLOMBIA

EGYPT

FRANCE

GHANA

HONDURAS

HUNGARY

INDONESIA

IRAN

ITALY

IVORY COAST

JORDANKENYA

KUWAIT

LEBANON

MALAWI

MALDIVES

AF

AR

BDBHBO

BRBFGLGO

EGFRGH

HN

HUIDIR

ITGI

JOKEKWLB

MW

MV

MALI

MEXICO

MOROCCO

NIGERIA

PAKISTAN

PANAMAPARAGUAY

PORTUGAL

SAUDI ARABIA SENEGAL

SOUTH AFRICA SPAIN

SRI LANKA

SWEDEN

SYRIA

TANZANIA

TRINIDAD, TOBAGO

TUNISIA

TURKEY

UAE

UGANDAUNITED STATE

VENEZUELA ZIMBABWE

ML

MX

MANGPA

PAPYPTSA

SNLKSE

SY

TZTTTN

TRAE

UGUSVEZW


4/74

AHMEDABAD

1949/2,First Floor,Opp. Purohit Hotel,

Khadia Char RastaAhmedabad 380 001Phone: 0792120898

CHENNAI

No.2 1st FloorKendappa Chetty Street

Phone No. 044-5244450

KOLKATA

R.No. 11 A, 9/12, "E" Block,11rd Floor, Lal Bazar Street,

Mercantile Building,Kolkata 700001Phone: 033 2435129, 2212129

PUNE

995, 2nd Floor,Raviwar Peth,

Pune - 411002Phone:020 4474983

AGRA

6/162, Pathak Surajbhan,Bellanganj

Phone No. 0562-622786

New DELHI

7/3, Adarsh NurseryShed No.16 Kirari Road,

Near Railway CrossingPhone No. 011-5479251

LUCKNOW

H-11-95,Sector-DL.D.A. Colony, KanpurRoad

Lucknow 226012Phone: 0522 432524

RANCHI

1231-D, Sahu Colony,Jalan Road,Upper BazarRanchi 834001

Phone: 0651 315537

ALLAHABAD

4/2 Bai-Ka-BaghNear Post officeKeyclganj

Allahabad 211003Phone: 0532 417086

GUWAHATI

A.k Azad RoadBeside Lords EnglishSchoolRehabari,

Guwahati 781008Phone 0361-513025

LUDHIANA

Jaspal Building,G.T Road Miller Ganj,Near Vishawkarma Chowkludhiana 141003

Phone 0161 534829

RAIPUR

327-328,Ward No4,Purana Mangal Bazar,Gudhiyari,Raipur-492009Phone: 0771 529735

AMBALA CANTT

11-K, Guru NanakpuraKuldeep Nagar,Ambala Cantt 133001

Phone 0171 2612193

GORAKHPUR

C 127/10&c 127/15,Dilezakpur,jatashnkerChowk,Gorakhpur 273001

Phone 0551 340840

MEERUT

6 JAWALAPURI,Lord Krishna market,opp. Transport Nagar,

delhi road Meerut-2Phone 0121 401473

ROHTAK

Plot No. 51-52I.D.C Hissar Road,

Rohtak 124001Phone 01262 78434

BANGALORE

Municipal No. 126/07/025th

Cross, Near Kalasipalyam

Extn. LayoutBangalore 560002Phone 080 2711446

INDORE

Plot No 21,Timber Scheme No 31,

Navlakha,Indore 451001Phone 0731 466284


5/74

MUZAFFARPUR

B.B Ghosh LaneMotijheel,Muzaffrpur - 842001

Phone 0621 247416

SILIGURI

C/o Nisidh Bhosh Rai, 607/1Deshbandhupara Behindindoor stadium

Ward No.29 Post Stadium

BAEREILLY

6.A Hajiapur Pilibhit RoadNear Suhag Wedding HallBaereilly - 243005

Phone 0361-531856

Jaipur

645, 2ND Floor,kishore kunj,kishan Ploe Bazar,

jaipur - 302001Ph.no. 0141-2316909

MADURAI

2-F, Muthiah ChettiarPerulkar Layout Street,Sellur,

MaduariPhone: 0452-653393

VARANASI

C- 27/170, A-2, jagatgani,Varanasi- 221002Phone : 0542 - 204381

CHANDIGARH

8,Industries Area,Phase-1

Near new Kholi

Transport Co.Chandigarh - 160002

Phone: 0172-641703

KANPUR

109/375, R.K Nagar,G.T Road, Kanpur- 208012

Phone 0512-54407,5417280

NAGPUR

C/O Dr. Mishra's House,Near St Xavier School,

6-Parulkar Layout,

Near Ajni squareNagpur - 440015

Phone : 1712-240454

VIJAYWADA

D. No. 7-3-10, Beside

Marupilli Chitti School,Raghava Ready RoadMahanthipuram,

KothapetVijayawada - 520001

Phone : 0866-563729

CUTTACK

Plot No. 925, Jhanjir

Mangala,(Bastiz Colony)P.O Telanga Bazar

Cuttack - 753009Phone: 0671-617843

KASHIPUR

Opp. Dr single nursing Home,

C/O Vinay Kumar Vijay KumarMata mandhir Road,kashipur - 244713

Phone: 05947-72689

PATNA

New Area, KadamKuan,Anugrah Narian Road,Patna: 800003

Phone: 0612-685138

JABALPUR

1688/1 Behind Patel IceCream, Model Road, (L.B.Shastri Marg) Napier TownPhone No. 0761-564731


6/74

PRODUCTS

Bicycle Tyres Automobile Tyers Agriculture Tyres

Bicycle Tubes & TubesValvesBicycle Components

Bicycle Tubes Box &

Packing & TubesValves
http://www.hindustantyres.com/tubes.htmhttp://www.hindustantyres.com/agriculturestyres.htmhttp://www.hindustantyres.com/four&twowheels.htmhttp://www.hindustantyres.com/bicyclestyres.htmhttp://www.hindustantyres.com/bicycles-tubes-box-pouch.htmhttp://www.hindustantyres.com/bicyclesparts.htmhttp://www.hindustantyres.com/tubes.htmhttp://www.hindustantyres.com/agriculturestyres.htmhttp://www.hindustantyres.com/four&twowheels.htmhttp://www.hindustantyres.com/bicyclestyres.htmhttp://www.hindustantyres.com/bicycles-tubes-box-pouch.htmhttp://www.hindustantyres.com/bicyclesparts.htmhttp://www.hindustantyres.com/tubes.htmhttp://www.hindustantyres.com/agriculturestyres.htmhttp://www.hindustantyres.com/four&twowheels.htmhttp://www.hindustantyres.com/bicyclestyres.htmhttp://www.hindustantyres.com/bicycles-tubes-box-pouch.htmhttp://www.hindustantyres.com/bicyclesparts.htmhttp://www.hindustantyres.com/tubes.htmhttp://www.hindustantyres.com/agriculturestyres.htmhttp://www.hindustantyres.com/four&twowheels.htmhttp://www.hindustantyres.com/bicyclestyres.htmhttp://www.hindustantyres.com/bicycles-tubes-box-pouch.htmhttp://www.hindustantyres.com/bicyclesparts.htmhttp://www.hindustantyres.com/tubes.htmhttp://www.hindustantyres.com/agriculturestyres.htmhttp://www.hindustantyres.com/four&twowheels.htmhttp://www.hindustantyres.com/bicyclestyres.htmhttp://www.hindustantyres.com/bicycles-tubes-box-pouch.htmhttp://www.hindustantyres.com/bicyclesparts.htmhttp://www.hindustantyres.com/tubes.htmhttp://www.hindustantyres.com/agriculturestyres.htmhttp://www.hindustantyres.com/four&twowheels.htmhttp://www.hindustantyres.com/bicyclestyres.htmhttp://www.hindustantyres.com/bicycles-tubes-box-pouch.htmhttp://www.hindustantyres.com/bicyclesparts.htm


7/74

A REVIEW

Hindustan Tyres Pvt. Ltd. vs Collector Of CentralExcise

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 isnot 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'sbalance 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 grossprofit 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 :


8/74

(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 339/84-85were 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 backremoved 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) stripcutting; (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


9/74

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


10/74

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 ofP.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 therespondent, 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
http://www.indiankanoon.org/doc/1577075/http://www.indiankanoon.org/doc/1577075/http://www.indiankanoon.org/doc/1577075/


11/74

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 theassessee 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


12/74

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 :


13/74

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 ofAssistant 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
http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1230460/http://www.indiankanoon.org/doc/1230460/http://www.indiankanoon.org/doc/1230460/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1230460/http://www.indiankanoon.org/doc/1230460/http://www.indiankanoon.org/doc/1439553/http://www.indiankanoon.org/doc/1439553/


14/74

"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 Section4(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 ageneral 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


15/74

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 tillthe 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


16/74

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 consumedthe 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 alreadyon 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


17/74

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 re-

treading 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.


18/74

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


19/74

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.


20/74

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


21/74

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 hi r ing 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.


22/74

Know what you alr eady 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.


23/74

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


24/74

Rules and Regulations of Recrui tment & 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.

Recrui tment 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 postfrom 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


25/74

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.


26/74

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


27/74

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


28/74

TYREINDUSTRIES

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


29/74

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.


30/74

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 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 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


31/74

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.


32/74

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 claimobjectivity 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


33/74

Sampling method

Contact method

Step 3: Collect the information

Step 4: Analyze the information.

Step 5: Present the findings.


34/74

Step 1: Define the research objective

After discussing with the external project guide the topic for the project was

selected as:

Financial analysis ofHindustan 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.


35/74

Questions should be:

o clear

o easy to understand

o 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 Open ended

o Dichotomous

o Multiple choice.

o 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 Random sampling, equal chance for each member of the population

o Stratified sampling, population divided into groups re: a common

characteristic, random sample each group

o Area sampling, as above using areas


36/74

o 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,


37/74

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:


38/74

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 Qualitative Sources

o 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)


39/74

o 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 : Descriptive type

Data Source : Primary & secondary

Research approach : Survey method

Research instrument : Questionnaire

Type of questions : Closed ended

Sample sizes : 100 samples

Mode of collecting data : Respondents to be

collection : chosen randomly.


40/74

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.


41/74

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 BASIS and, the ELEMENT SELECTION

TECHNIQUE.

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.


42/74

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


43/74

FINANCIAL ANALYSIS

INTRODUCTION

o Financial analysis is the process of determining the significant operating andfinancial 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


44/74

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.

Al l the cases descri bed so far have involved suppl iers of capi tal. Therefore, the analysis has

taken an external point of view. Internall y, management also employs fi nancial analysis for

the purpose of i nternal control and to better provide what capital suppli ers seek in f inancial

conditi on and perf ormance fr om the fi rm. F rom an internal control standpoint, management

needs to undertake fi nancial 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 consistentaccounting 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


45/74


46/74

specific period of time, normally the same time period as the firms income statement. The

fi nancial manager makes decisions to ensure that the firm has suf fi cient funds to meet

f inancial obligations when they are due and to take advantage of f inancial opportuni ties. To

help the analyst appraise these decisions (made over a period of time), we need to study the

firms flow of funds.


47/74

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

analysishelps 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

relati vely easy and simple task but onl y the ski l led analyst can make the proper

analysis and interpretation of the ratios. Whil e in terpreting the financial

in formation, the analyst has to be careful in limi tations imposed by the

accounti ng concepts and methods of valuation. Information of non-f inancial

natur e wil l also be taken in to 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.


48/74

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


49/74

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.


50/74

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.


51/74

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.


52/74

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


53/74

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 incomeInterest 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 expensesDepreciation

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


54/74

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


55/74

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 unforeseeabledevelopments. 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


56/74

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)

= 50.13 x 100

718.43

= 6.97%

GP RATIP2011 (Previous Year)

= 40.85 x 100

320.67

= 12.73%

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


57/74

GP RATIO

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2010 2011

6.97%

12.73%

% change

Years


58/74

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 Profit2011 (Current Year)

= 131.90 X 1 00

718.43

= 18.35%

Net Profit2010 (Previous Year)

= 40.56 X 100

320.67

= 12.64%

Hence, Net profit of year 2010 is better then 2011


59/74

NET PROFIT RATIO

0.00%

5.00%

10.00%

15.00%

20.00%

2010 2011

18.35%

12.64%

%change

Years


60/74

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 X 100

1172.73

= 11.24%

ROA2010 (Previous Year)

= 40.56 X 100

241.79

= 16.77%

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


61/74

RETURN ON ASSETS

0

0.05

0.1

0.15

0.2

2010 2011

11.24%

16.77%

% Change

Years


62/74

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

ROI2011 (Current Year)

= 197.63 X 10017.25

= 1145.68%

ROI2010 (Previous Year)

= 58.17 X 100

7.30

= 7.96%

Hence, ROI of the year 2011 is better then 2010


63/74

RETURN ON INVESTMENT

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

2010 2011

11.45%

7.96%

%change

Years


64/74

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 100931.91

= 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


65/74

RETURN ON EQUITY

0

0.05

0.1

0.15

0.2

0.25

0.3

2010 2011

14.15%

28.57%

%change

Years


66/74

ANNEXURES

Profit & Loss A/C Of Hindustan Tyres Ltd

PARTICULARS 2011 2010

Sales Turnover 718.43 320.67

Other Income 47.72 34.51

Stock adjustments -6.59 3.73

Total Income 759.56 258.91

Raw Material 0.12 1.04

Excise Duty 0.00 0.00Power & Fuel Cost 0.49 0.29

Other manufacturing Expenses 469.46 241.86

Employee Cost 17.25 7.30

Selling & Administration Expenses 43.75 12.85

Miscellaneous Expenses 6.45 21.56

Less: Preoperative Expenditure

Capitalised

0.00 0.00

Profit before interest, Depreciation

& Tax

222.04 74.01

Interest & Financial Charges 21.30 13.71

Profit Befire Depreciation & Tax 200.74 60.30Depreciation 3.11 2.13

Profit before Tax 197.63 58.17

Tax 65.73 17.61

Profit after Tax 131.90 40.56

Adjustment below Net Profit 0.00 0.00

P & L Balance brought forward 23.46 16.89

Appropriations 86.49 33.99

P & L Balance carried down 68.87 23.46

Equity Dividend 9.93 3.50

Preference Dividend 0.00 0.00

Corporate Dividend Tax 1.56 0.49Equity Dividend (%) 25.00 20.00

Earning Per Share (Rs) 22.96 22.90

Book Value 163.31 78.11

Extraordinary Items 0.01 -10.14


67/74

Balance sheet of HINDUSTAN TYRES LTD.

PARTICULARS 2011 2010

Share Capital 28.38 17.50Reserve & Surplus 903.53 124.44

Total Shareholders Fund 931.91 141.94

Secured Loans 191.81 89.31

Unsecured Loans 49.01 10.54

Total Debt 240.82 99.85

Total Liabilities 1,172.73 241.79

Gross Block 50.13 40.85

Less: Accum Depreciation 19.86 15.81

Net Block 30.27 25.04

Capital Work In process 0.00 0.00

Investments 11.22 9.03

Inventories 494.61 306.39

Sundry debtors 132.07 60.40

Cash and Bank Balance 224.79 24.64

Loans and Advances 915.40 311.30

Current Liabilities 614.95 475.17

Provisions 20.68 19.84

Net Current Assets 1,131.24 207.72

Miscellaneous Expenses not w/o 0.00 0.00

Total Assets 1,172.73 241.79

Contigent Liabilities 196.47 110.48


68/74

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
http://www.wikipedia.com/http://www.wikipedia.com/http://www.yahoo.com/http://www.yahoo.com/http://www.google.com/http://www.google.com/http://www.google.com/http://www.yahoo.com/http://www.wikipedia.com/


69/74

SUMMER TRAINING REPORT

ON

SELECTION AND RECRUITMENTPROCESS & FINANCIAL ANALYSIS

OF

HINDUSTAN TYRES LTD.

Submitted to Panjab University, Chandigarh

In the partial fulfillment for the requirementof the degree of

MASTER OF COMMERCE

Submitted to: Submitted by:

Panjab University, Reetu JaggiChandigarh. M.Com

Enrol No.20989

UNIVERSITY SCHOOL OF OPEN LEARNING (USOL)

PANJAB UNIVERSITY, CHANDIGARH


70/74

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: Signature of Supervisor

Place:

Name ______________________

Designation_________________

Address ____________________


71/74

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


72/74

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 ofRecruitment & Selection Process

in Hindustan Tyre Ltd. and did a SWOT analysis of Hindustan Tyre Ltd. to


73/74


74/74

Recruitment and Seleciton (Hindustan Tyres Ltd.)

Documents

Transcript of Recruitment and Seleciton (Hindustan Tyres Ltd.)