Professional Documents
Culture Documents
SELVAKUMAR.N
Register Number: 1391038
in partial fulfilment for the award of the degree of
AUGUST 2014
SELVAKUMAR.N
Register Number: 1391038
Department of Management Studies during the year 2013-2015
__________________
Project Guide
__________________________
Director, Management Studies
______________
_______________
________________
Internal Examiner
External Examiner
ii
DECLARATION
I affirm that the Summer Project work titled A STUDY ON THE BUSINESS PRACTICES IN
ROOTS INDUSTRIES INDIA LIMITED being submitted in partial fulfilment for the award of
MBA, is the original work carried out by me. It has not formed the part of any other project work
submitted for award of any degree or diploma, either in this or any other university.
SELVAKUMAR.N
1391038
iii
ACKNOWLEDGEMENT
I also thank all who have helped me directly and indirectly in completing this project
work.
iv
CONTENTS
S.No
Title
Page
Numbers
Organisation Profile
1.1
Introduction
1.2
History
1.3
Members of Management
1.4
Products
1.5
Vision
1.6
Mission
1.7
Organization Structure
1.8
Organization Chart
1.9
Ownership Pattern
1.10
1.11
Roots Family
1.12
10
1.13
11
2.1
13
2.2
SWOT Analysis
14
Functional Areas
3.1
15
3.2
Department of Marketing
19
3.3
22
3.4
24
3.5
25
3.6
Department of Production
27
3.7
30
Learnings
42
References
42
vi
EXECUTIVE SUMMARY
The Automobile industry in India is the seventh largest in the world with an annual
production of over 2.6 million units in 2013. In 2013, India emerged as Asia's fourth largest
exporter of automobiles, behind Japan, South Korea and Thailand. By 2050, the country is
expected to top the world in car volumes with approximately 611 million vehicles on the
nation's roads.
Embryonic automotive industry emerged in India in the 1940s. Following the
independence, in 1947, the Government of India and the private sector launched efforts to
create an automotive component manufacturing industry to supply to the automobile industry.
However, the growth was relatively slow in the 1950s and 1960s due to nationalization and
the license raj which hampered the Indian private sector. After 1970, the automotive industry
started to grow, but the growth was mainly driven by tractors, commercial vehicles and
scooters. Cars were still a major luxury. Japanese manufacturers entered the Indian market
ultimately leading to the establishment of Maruti Udyog. A number of foreign firms initiated
joint ventures with Indian companies.
Learnt the functions of marketing department, finance department, human resource
department, production department.How to maintain the records, bills, analysis of balance
sheet and other aspects of finance department.Understood the how to filing the employee
records.The training that I have under gone have helped me in fetching practical knowledge
about
overall
functioning
of
vii
the
organization.
CHAPTER-I
ORGANISATION PROFILE
1.1 Introduction
The Automobile industry in India is the seventh largest in the world with an annual production of
over 2.6 million units in 2013. In 2013, India emerged as Asia's fourth largest exporter of automobiles,
behind Japan, South Korea and Thailand. By 2050, the country is expected to top the world in car
volumes with approximately 611 million vehicles on the nation's roads.
The economic liberalization in India in 1991, the Indian automotive industry has demonstrated
sustained growth as a result of increased competitiveness and relaxed restrictions. Several Indian
automobile manufacturers such as Tata Motors, Maruti Suzuki and Mahindra and Mahindra, expanded
their domestic and international operations. India's robust economic growth led to the further expansion
of its domestic automobile market which attracted significant India-specific investment by multinational
automobile manufacturers. In February 2013, monthly sales of passenger cars in India exceeded 100,000
units.
Embryonic automotive industry emerged in India in the 1940s. Following the independence, in
1947, the Government of India and the private sector launched efforts to create an automotive component
manufacturing industry to supply to the automobile industry. However, the growth was relatively slow in
the 1950s and 1960s due to nationalization and the license raj which hampered the Indian private sector.
After 1970, the automotive industry started to grow, but the growth was mainly driven by tractors,
commercial vehicles and scooters. Cars were still a major luxury. Japanese manufacturers entered the
Indian market ultimately leading to the establishment of Maruti Udyog. A number of foreign firms
initiated joint ventures with Indian companies.
In the 1980s, a number of Japanese manufacturers launched joint-ventures for building motorcycles
and light commercial-vehicles. It was at this time that the Indian government choose Suzuki for its jointventure to manufacture small cars. Following the economic liberalization in 1991 and the gradual
weakening of the license raj, a number of Indian and multi-national car companies launched operations.
Since then, automotive component and automobile manufacturing growth has accelerated to meet
domestic and export demands.
1.2 History
Roots Industries India Ltd. is a leading manufacturer of HORNS in India and the 11th largest
Horn Manufacturing Company in the world. Headquartered in Coimbatore - India, ROOTS has been a
dominant player in the manufacture of Horns and other products like Castings and Industrial Cleaning
Machines. Since its establishment in 1970, ROOTS has had a vision and commitment to produce and
deliver quality products adhering to International Standards.
With a strong innovative base and commitment to Quality, Roots Industries India Limited has
occupied a key position in both international and domestic market as suppliers to leading OEMs and after
market. Similar to products, Roots has leading edge over competitors on strong quality system base.RIL
is the first Indian Company and first horn manufacturing company in the world to get ISO/TS 16949
certification based on effective implementation of QS 9000 and VDA 6.1 system requirement earlier. RIL
has entered into technical collaboration with Robert Bosch, SA to further enhance the technical
competence. Roots' vision is to become a world-class company manufacturing world-class product,
excelling in human relation.
Roots Industries India Ltd as ISO 9001:2000 firm and the parent company manufacture electric
horns currently holding 60% of the Indian Market Share. They are suppliers to leading automobile
manufacturers such as Hindustan Motors, Premier Automobiles, Telco, Bajaj, Mahindra and Mahindra,
Maruthi Suzuki, Unofiat, Hyundai, Hero Honda, LML Vespa etc., are also the exclusive suppliers of the
special type horns to defence. Their export market covers above 40 countries, which include United
States, Japan, Germany, Holland, far and Middle East, Latin American countries and South Africa, at
present the Roots has expended and concentrated on industrial cleaning machines.
DIVISION
1.4 Products
Field Mould
Headlight Relays
Horn Controller
Horn-Smartone
Horn-Spider
Horn-Vibromax
Horn-Windtone Super
Lever Switch-Lre
Lever Switch-Lrs
Pivot Housing
Ring Holder
Hiway Horn
Horn-Megasonic
Horn-Supersonic
Horn-Vibrosonic
1.5 Vision
Roots vision is to become a world leader in any field that we undertake.
1.6 Mission
To be valued as a company that understands quality and integrates if at every level to provide world
class product and too offer outstanding values to our customers.
Director Operations
Chief Marketing
Officer
Vice President
Horn Divisions
Electro Plating
Roots Industries
(Malaysia)
Director Operations
Mr.B. Bharathkumar
Roots Industries
India Limited
Roots Multiclean
Limited
Roots Cast
Private Limited
Director
Vice President
Mr.S. Kavidasan
Mr.K. Guhan
Managing
Director
Mr.O.A.
Balasubramaniam
Roots Polycraft
Chief Executive
Officer
Mr.O.A.
Balasubramaniam
Director Operations
Mr.K. Saravanasundaram
Mr.D. Sivaprakasam
Board of Directors
Chairman
Company Secretary
Manager
Assistant Manager
Associates
Roots Precision Products was established in 1987 to address the in-house tooling needs of the
diverse industries in Roots group. Owing to continuous improvement and investment into better
resources, the company has become self-sufficient. It is catering to the needs of various industries. RPP
acts as a one-stop solution for tooling and precision machining. Specialized in design and manufacture of:
Press tools
Injection moulds
Die-casting dies
and
Zinc components to the exacting needs of various customers in Automobile and Textile Industries with a
high degree of Quality and Perfection. RCPL at present has established itself as a major player in the die
cast component manufacturing thanks to the expertise built in the core activities like tool design, tool
making and pressure die cast component manufacturing. RCPL supplies machined castings and subassemblies as per customer requisitions.
11
1.13 Milestones
1970
1972
1984
1988
1990
1992
1992
1994
1999
2000
Becomes the first horn manufacturer in Asia to obtain VDA 6.1 and the
first in the world to win ISO/TS 16949
2000
The first to introduce digitally controlled air horns and low frequency, low
decibel irritation free Jumbo Air Horns.
2003
2003
Roots Industries LTD., upgraded its ISO/TS 16949 from 1999 version to
2002 version
2004
2004
12
2004
2004
Roots
Cast
Private
Limited(RCPL)
inaugurates
its
Unit
II
at
Arugampalayam, Coimbatore
2004
2004
2004
2005
2005
2005
2005
13
CHAPTER-II
MACRO MICRO ANALYSIS
Political
Economic
Socio-cultural
14
STRENGTH
WEAKNESS
OPPORTUNITIES
THREADS
15
CHAPTER-III
FUNCTIONAL AREAS
16
AssociateSecurity
AssociateTransport &
PR
Associate Head
AssociateRecruitment
Associate Head
Training &
Development
Associate HRD
RIL-CD
AssociateStatutory
Compliance
Associate HRD
Associate HRD
Associate HRD
RCPL-I, RPP
RMCL
Associate House
Keeping
Associate HRD
Associate Front
Office &
Communication
RIL-HD
Associate Training
QS & Secretarial
Assistance
RCPL-II,
Associate
Communication
Duties & Responsibilities
Receptionist
17
Telephone
Operators
Recruitment
Employee recruitment forms a major part of an organization's overall resourcing strategies, which
identify and secure people needed for the organization to survive and succeed in the short to mediumterm. Recruitment activities need to be responsive to the ever-increasingly competitive market to secure
suitably qualified and capable recruits at all levels.
Application Blank
Paper Advertisement
Campus Interview
Internal and External Sources
Manpower Consultants
Selection
Age
Communication Skills
Physical Stamina
Leadership Skills
Social & Human Relation Skills
Formal Education
Technical Education
Practical/Previous Experience
Suitability to the post
18
Promotion
It is based on organisational needs
It is based on skills required
It is based on the Manpower Requirement
Performance Appraisal
In order to improve performance on-the-job training / off-the-job, performance improvement
trainings are given. They help to improve potentiality and resources, to meet future needs of the
organisation also. In order to know training needs, performance appraisal is done by reporting officer
manually and analysed. The analysis identifies the workers who need training then the training programs
are organised. After completion of training the concerned department head observes the worker, and gives
the feedback after 3 months and not less than 6 months. After the evaluation the Head-Corporate HRD
will initiate them for retaining if needed.
Performance Appraisal is done a all levels (Executives, Staff, Workers, Trainees and
Apprentices),
Periodical Appraisal
Reporting Officers
Head of Departments
HRD Intervention
Implementation
19
Marketing Manager
Assistant Manager
Associates
Assistants
Functions
Procuring orders & ensuring that we have the capability to do things as committed to the
customers.
Preparing requirement plan and forwarding to production planning and control department
20
Despatching the finished goods through the mode of transport as agreed in the contract
Follow up of the payment collection
Handling new methods for marketing our products
Exports
Roots Industries exports to more than 15 countries. Roots also supplies to Ford Motor Company,
North America. Original Equipment Manufacturers: - The horns manufactured by Roots Industries
Limited are employed as Original Equipment by a number of vehicle manufacturers. It has Roots
industries Malaysia it has a separate production unit over there. Roots Industries Exports to the following
countries.
1) North America,
2) Germany
3) UK
4) Trico
5) Zinser
6) South Africa
21
7) Canada
Market Segmentation
In Roots Industries the market is segmented as Industrial and Institutional. The following shows
the market segmentation of this industry.
Market
Segmentation
Industrial
Institutional
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
Public Sector
Government Agencies
Civic Bodies
Defence Installation
Hotels
Hospital
Airports
Railways Station
Road Transport
Ports
Competitors
The Competitors for this company are in a world level.
Competitors
Local
International
Karcher- Germany
Santoni
Delstar, TPS,
RCM- Italy
Manager- IT
Manager- IT
(SAP)
(RIM)
Associates
Associates
Assistance
Assistance
Functions
The control of data in Electronic Media
Developing and Procuring new software to facilitate the user
Procuring Hardware according to requirement are part of their activities.
Day-to-day backups of the details regarding Sales, Purchase & Materials Inventory.
Backups will be taken daily, weekly, monthly, half yearly and annually to avoid the
corruption to the software.
Software Used
a) ERP
b) SAP- System Application Software
23
Before using SAP Software Roots Industries had used MRP 9000 Software. It is mostly used for
materials only so to rephrase it SAP have introduced.
SAP Software used in all the kind f the transactions. SAP is a German based Software Company
they developed the software and named it as SAP.
RIMS Software which is developed by the Roots Industries. And it is not interlinked between.
RIMS are used in Roots Multiclean, Roots Polycraft, Roots Cast and Roots Precision Industries.
For Employees
Employees in this department want to have certain skills. In this department they were using both
SAP and RIMS Soft wares. According to that the employees work also differentiated according to the
software.
24
Assistant Manager
Associate
Head
Associate
Head
Assistants
Assistants
25
c) Final Inspection
Quality Engineering Department Structure
Quality Department
Head
Manager- Quality
Engineering
Manager- Quality
Assurance
Associates
Associates
Assistance
Assistance
Functions
Preparing control plan for incoming material
Inspection for incoming material as per the control plan
Conducting setup/patrol inspection as per control plan
26
27
Horn Division
Roots Polycraft
Roots Cast
Coil Winding
Associates Head
Associates- Head
Press Shop
Assistance/
Operators
Assistance/
Operators
28
Inspection
29
30
31
Loans have become increasingly packaged for resale, meaning that an investor buys the loan
(debt) from a bank or directly from a corporation. Bonds are debt instruments sold to investors for
organizations such as companies, governments or charities. The investor can then hold the debt and
collect the interest or sell the debt on a secondary market. Banks are the main facilitators of funding
through the provision of credit, although private equity, mutual funds, hedge funds, and other
organizations have become important as they invest in various forms of debt. Financial assets, known as
investments, are financially managed with careful attention to financial risk management to control
financial risk. Financial instruments allow many forms of securitized assets to be traded on securities
exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly traded
corporations.
Central banks, such as the Federal Reserve System banks in the United States and Bank of
England in the United Kingdom are strong players in public finance, acting as lenders of last resort as
well as strong influences on monetary and credit conditions in the economy.
This department consists of Finance & Accounts Department of Roots Group of Companies.
Account Department takes care of the day-to-day accounts and preparing monthly, quarterly, half-yearly
and annual performance details. According to the monthly appraisal, the subsequent monthly sales,
purchases, inventory control, over expenses will be reviewed. The cash balance is controlled by the
Account Department.
Regarding to Finance and Monitoring funds inflow and outflow and required funds will be
arranged from the Bank of Payment. Data collection is the main part of the finance department to control
the Cash Out-Flow.
32
The investors, in both bonds and stock, may be institutional investors financial institutions such
as investment banks and pension funds - or private individuals, called private investors or retail
investors.
Finance Director
V.P. Finance
Associate Head
Finance
a)
b)
c)
d)
Associate -1
Associate-2
Associate-3
Associate-4
Associate Head
Finance
33
a)
b)
c)
d)
Associate-1
Associate-2
Associate-3
Associate-4
Functions
All Banking action like Letter of Credit, Money Transaction and Normal Banking activities are
controlled and functioned.
In case of Long Term Expansion the Finance Department helps the organisation in arranging a
Term Loan.
The creditors payment are calculated and issued to them within the 60 days after the material
purchased.
The Collection from the Debtors are calculated and collected within the 60 days from the date
which material issued to them.
Duties like Central Excise, Sales & Income Tax and Insurance are calculated and issued to the
Government at the proper time and date.
Custody and safeguarding of Securities, Insurance Policies and other Valuable Papers.
Taking care of the mechanical details of new outside financing
Record keeping and reporting
operates within clearly defined guidelines that are approved by the Board and the Company Policy is not
engage in the speculative transactions.
The main area of financial risk faced by the company and the policy in respect of the major areas
of treasury activity are set out as follows,
b) Credit Risk
The credit risk is controlled by monitoring procedures and by internal credit review where credit
risk is material.
Accounting Policies
1) Basis of Accounting
The financial statements of the Company have been prepared under the historical cost convention,
unless otherwise indicated
2) Revenue Recognition
Revenue is recognised on invoiced sale of goods;
- 10%
Motor Vehicles
- 20%
Office Equipment
- 10%
- 10%
4) Inventories
Inventories comprising raw materials, work- in- progress and finished goods are stated at the
lower of cost and net realisable value.
Cost is determined on a First- in- First- Out basis. Cost of finished goods and work- in- progress
includes the cost of raw materials, direct labour and an appropriate proportion of production and other
overheads.
6) Trade Receivables
Trade receivables are carried at anticipated realisable value. Bad Debts are written off in the
period in which they are identified. An estimate is made for doubtful debts based on a review of all
outstanding amount at the period end.
7) Related Parties
Related parties refer to person connected to the directors and/or shareholders of the Company and
companies in which the directors and/or shareholders or persons connected to the said directors and/or
shareholders have substantial equity interest.
8) Provisions
36
Provisions are recognised when the company has a present legal and constructive obligation as a
result of past events, when it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and when a reliable estimate can be made of the amount of the
obligation.
9) Financial Instruments
Financial Instruments carried on the balance sheet include cash and bank balances, trade and
other receivables and payables and borrowings. The accounting policies on recognition and measurement
of these items are disclosed in the individual accounting policies with each item.
Financial Instruments are classified as liabilities or equity in accordance with the substance of the
respective contractual arrangements. Interest, Dividends, Gains and losses relating to a financial
instrument classified as a liability, are reported as expense or income. Distributions to holders of financial
instruments classified as equity are charged directly to equity. Financial instruments are offset when the
Company has a legally enforceable right to offset and intends to settle either on a net basis or to realise
the asset and settle the liability simultaneously.
10) Foreign Currency transactions and balances
Transactions in foreign currencies are recorded in Ringgit Malaysia at rates of exchange ruling at
the time of the transactions. Foreign Currency monetary assets and liabilities are translated at the
exchange rate ruling at the balance sheet date.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the assets are realised or the liabilities are settled. The carrying amount of a deferred tax
asset is reviewed at each balance sheet date and is reduced to the extent that it becomes probable that
sufficient future taxable profit will be available.
Deferred tax is recognised in the income statement, except when it arises from a transaction which
is recognised directly in equity. In his case the deferred tax is charged or credited directly in equity. When
the company deferred tax arises from a business combination that is an acquisition, t is included in the
resulting goodwill or negative goodwill.
12)Employee Benefits
Short Term Benefits
Wages, Salaries, Bonuses and Social Security contributions are recognised as an expense in the
year in which the associated services are rendered by employees of the Company. Short Term
accumulating compensated absences such as paid annual leave are recognised when services are rendered
by employees that increase their entitlement to future compensated absences, and shot term nonaccumulating compensated absences such as sick leave are recognised when the absences occur.
Other Employees
Working and subject Knowledge
38
Interpersonal Skills
a) Capital Structure
In finance, capital structure refers to the way a corporation finances its assets through some
combination of equity, debt, or hybrid securities. A firm's capital structure is then the composition or
'structure' of its liabilities. For example, a firm that sells $20 billion in equity and $80 billion in debt is
said to be 20% equity-financed and 80% debt-financed. The firm's ratio of debt to total financing, 80% in
this example is referred to as the firm's leverage. In reality, capital structure may be highly complex and
include tens of sources. Gearing Ratio is the proportion of the capital employed of the firm which come
from outside of the business finance, e.g. by taking a short term loan etc.
Leverage
In finance, leverage is a general term for any technique to multiply gains and losses. Common
ways to attain leverage are borrowing money, buying fixed assets and using derivatives. Important
examples are: A public corporation may leverage its equity by borrowing money. The more it borrows,
the less equity capital it needs, so any profits or losses are shared among a smaller base and are
proportionately larger as a result.
Operating leverage is an attempt to estimate the percentage change in operating income
(earnings before interest and taxes or EBIT) for a one percent change in revenue.
Financial leverage tries to estimate the percentage change in net income for a one percent
change in operating income.
The product of the two is called Total leverage, and estimates the percentage change in net
income for a one percent change in revenue.
This technique is mostly used at the time of annual report preparation. Capital Structure technique
is helps in calculating the leverage values and to calculate the Earnings per Share Amount it is used. In
Roots Industries they were using this technique for those purposes. It benefits the company to identify
their Share value in the market.
39
b) Capital Budgeting
Capital budgeting (or investment appraisal) is the planning process used to determine whether a
firm's long term investments such as new machinery, replacement machinery, new plants, new products,
and research development projects are worth pursuing. It is budget for major capital, or investment,
expenditures. Many formal methods are used in capital budgeting, including the techniques such as
Accounting rate of return
Net present value
Profitability index
Internal rate of return
Modified internal rate of return
Equivalent annuity
These methods use the incremental cash flows from each potential investment, or project
Techniques based on accounting earnings and accounting rules are sometimes used - though economists
consider this to be improper - such as the accounting rate of return, and "return on investment."
Simplified and hybrid methods are used as well, such as payback period and discounted payback period.
In Roots Industries the Capital Budgeting technique is used at the time of new project
development only. This technique helps them to identify the Payback Period, Rate of Return and to
calculate the Net Present Value this type of technique is mostly used.
c) Dividend Policy
Dividends are payments made by a corporation to its shareholder members. It is the portion of
corporate profits paid out to stockholders. When a corporation earns a profit or surplus, that money can be
put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to
the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder
as a dividend.
For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore, a
shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying
dividends is not an expense; rather, it is the division of after tax profits among shareholders. Retained
earnings (profits that have not been distributed as dividends) are shown in the shareholder equity section
in the companys balance sheet - the same as its issued share capital. Public companies usually pay
40
dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special
dividend to distinguish it from a regular one.
Cooperatives, on the other hand, allocate dividends according to members' activity, so their
dividends are often considered to be a pre-tax expense.
Dividends are usually settled on a cash basis, store credits (common among retail consumers'
cooperatives) and shares in the company (either newly-created shares or existing shares bought in the
market.) Further, many public companies offer dividend reinvestment plans, which automatically use the
cash dividend to purchase additional shares for the shareholder.
In Roots Industries the Dividend to the Share Holders is declared according to the Net Profit of
the company. If the company earns more profit, they will issue 15%-25% as the dividend to the
shareholders. In the year 2013 the company earned Rupees 665 Lakhs, so they issued 25% as a dividend
to the shareholders. If it earn less means then it will issue 5%-10% as a Dividend to the shareholders.
41
CHAPTER-IV
LEARNINGS
The following are the learning's from Summer Internship Project at Roots Industries India Limited.
Real time experience and learning's regarding corporate set up, the work culture in a
corporate office.
Time management
Employee responsibilities
How to maintain the records, bills, analysis of balance sheet and other aspects of finance
department.
The training that I have under gone have helped me in fetching practical knowledge
about overall functioning of the organization.
42
REFERENCES
WWW.ROOTS.CO.IN
WWW.ACHORNCO.COM
WWW.WOLO.COM
WWW.BOSCHINDIA.COM
43