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ARTHNEETI

RULES

Round 1: Introduction Set up Stage

You all will be allocated an Industry randomly. So, basically you will be a company in that
industry. Each industry has two raw materials that are essential for it to start production. See
Table below. You need at least 1 unit of each Raw material for starting production.

Electronics Auto Steel Chemicals Silicon


Chemicals Steel Chemicals Auto Auto
RM
Silicon Electronics Electronics Silicon Steel

Once you complete your production you can sell to these two industries. See table below.

Electronics Auto Steel Chemicals Silicon


Auto Chemicals Auto Steel Electronics
Market
Steel Silicon Silicon Electronics Chemicals

Further, you will need Capital to meet your financial needs. You all have a capital of 1
Crore. But, this capital will come as a loan to you. You need to pay interest on this loan.
Interest rate shall be determined by a test of your accounting skills. Find a file named Round
1 in the zip folder. It is an excel workbook containing 3 sheets each for Profit & Loss A/c,
Balance Sheet and Cash Flow Statement. In total, there are 10 mistakes. You have to identify
these mistakes (highlight them) and give correct treatment as well. Some points to keep in
mind.

1. Time Limit: 20 minutes


2. The mistakes are related to accounting rules of recording. No mistake in amount.
3. Each sheet is independent of the other.
4. Dont worry if your balance sheet doesnt match.
Your interest rates shall be determined on the basis of your score in this round. Interest rates
shall be:

Interest Rate 8% 10% 12% 16% 18%

Simultaneously, your team needs to develop a logo and a tagline for your company that needs
to be submitted at the end of this round. (1 slide PPT)

Summary: At the end of this round, you know your industry, trading relationships, capital
and interest rates. Deliverables at the end: Logo + Tagline (1 slide PPT)

Round 2: Production House Setup

Buy the Production House. Since, all of you now have your capital. Now, invest it to build
your production facilities. You have a combination of machines to choose from. Each
machine has its own specifications. Choose wisely.
Land price is Rs. 20,000 /sq ft
Machinery Specifications:
Machinery Available Area Efficiency Cost Depreciation (SLM) Repair maintenance
no. (sq ft) (units per order) (in Rs) CLB IT (in Rs. per order)
A 5 30 140 1500000 10% 10% 10000
B 8 40 100 1200000 10% 6.67% 12000
C 5 60 180 2000000 12% 10% 6000
D 3 20 160 2100000 7% 10% 15000
E 4 50 200 2500000 10% 12% 8000
Total 25

Further, there are three types of labour required with different wage rates. And each
machinery requires a different combination of these labours to produce one unit of output.
See table below.

No. of labours required for 1 unit of production


Type of labour Wage (in Rs. p.u.)
A B C D E
L1 10 2 1 1 4 1
L2 8 1 3 2 2 1
L3 6 2 2 3 1 1
Also, you need to have a storage facility for your raw material as well as finished goods. And
you will have 150 units of raw material to begin with. And if you wont have the required
storage facility at any point during next round, your stock will go waste. Thus, buy land
wisely. Storage: 50 units/sq ft can be stored.

Please note, you have to simultaneously maintain excel sheets, Profit and loss and Balance
sheet (refer file final accounts in Zip folder) during every round. Moreover you need to
upload it as google sheets at the end of each round. (Or give it to us in pen drive). So record
all cash, machinery etc. in your balance sheet at Year 0.

Besides, you have to make an ad campaign for your company and prepare a 3 slide
PPT.

Summary: At the end of this round, you have built your production facilities and
advertisement campaign. Deliverables at the end: Ad Campaign (3 slide PPT)

Round 3: Production and Trading

One team member at all times is to be present at the team table.

To start with, you already have the raw materials in the following manner: ( to be bought
from Finesse team) at a cost of Rs. 50 p.u.

Electronics Auto Steel Chemicals Silicon


Chemicals (50) Steel (50) Chemicals (100) Auto (100) Auto (50)
RM
Silicon (100) Electronics (100) Electronics (50) Silicon (50) Steel (100)
No. of units in parenthesis.

Now the production mix is: 2:2.5

Production Mix
Input Qty
Raw Material 1 1
Raw Material 2 1 2
Output 2.5
Say for example if you are in electronics industry, you need 1 unit of chemical and 1 unit of
silicon to produce 2.5 units of final product.

Youll have 4 trading cycles of 20 minutes each. Each trading cycle is considered as one year.

Production and trading will work simultaneously. You have to put in a production request
with the production house (finesse team) for the no. of units you want to produce along with
the details of the raw material procured. Each production order would need 3 minutes of
processing time.

Note In every trading cycle, it is mandatory to produce at least 250 units.

Unprocessed raw material left at the end of each cycle will be shown in the balance sheet as
closing stock at cost. Any unsold finished goods will be taken at production cost.

At the end of this round you need to submit your excel sheets for evaluation. A ranking
would be done on the basis of the evaluation of the logo, tagline, advertisement and profits
made. Teams with low ranks will thus be eliminated.

Summary: At the end of this round, you have operated for 4 years. Deliverables at the end:
All excel sheets.

1 hour break

Round 4: Mergers and Acquisition

The teams that have qualified for the round 4 have an option to acquire the eliminated teams.
The financial statements will be shared with them and they can use valuation models to value
these firms and decide whether or not and which company they want to acquire.

Deliverables at the end: Valuation worksheets + 1 page executive summary of acquisition


decision and rational.

Round 5: 2 trading cycles

It will be a repetition of Round 3 again with 2 trading cycles.

Judgement Criteria
Logo and tagline (content and creativity) 50 marks
Advertisement 50 marks
Profit 100 marks
Mergers and acquisition 50 marks
Profit 100 marks