PROJECT REPORT

on

(A STUDY ON INVENTORY MANAGEMENT)

BY

THRIPTHI M

1NH18MBA84

Submitted to

DEPARTMENT OF MANAGEMENT STUDIES

NEW HORIZON COLLEGE OF

ENGINEERING, OUTER RING ROAD,

MARATHALLI, BENGALURU
In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

Ms. JAYASHREE N

ASSISTANT PROFESSOR

2018 - 2020
 CERTIFICATE

This is to certify that THRIPTHI M bearing USN 1NH18MBA84, is a

bonafide student of Master of Business Administration course of the
Institute 2018-2020, autonomous program, affiliated to Visvesvaraya
Technological University, Belgaum. Project report “A STUDY ON
INVENTORY MANAGEMENT” on is prepared by her under the
guidance of Ms. JAYASHREE N, in partial fulfillment of requirements
for the award of the degree of Master of Business Administration of
Visvesvaraya Technological University, Belgaum Karnataka.

Signature of Internal Guide Signature of HOD Principal

Name of the Examiners with affiliation Signature with date

1. External Examiner

2. Internal Examiner
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 DECLARATION

I, THRIPTHI M, hereby declare that the project report on “A STUDY ON INVENTORY

MANAGEMENT” with reference to “EXIDE INDUSTRIES LIMITED” prepared by me under the
guidance of Ms. JAYASHREE N, faculty of M.B.A Department, New Horizon College of
Engineering.

I also declare that this project report is towards the partial fulfilment of the university regulations for
the award of the degree of Master of Business Administration by Visvesvaraya Technological
University, Belgaum.

I have undergone an industry project for a period of Eight weeks. I further declare that this report is
based on the original study undertaken by me and has not been submitted for the award of a
degree/diploma from any other University / Institution.

Signature of Student
Place:
Date:

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 ACKNOWLEDGEMENT

The successful completion of the project would not have been possible without the
guidance and support of many people. I express my sincere gratitude to
MANJUNATH, Assistant ACCOUNTANT, EXIDE, Bengaluru, for allowing to do my
project at EXIDE INDUSTRIES LIMITED.

I thank the staff of EXIDE INDUSTRIES LIMITED, Bengaluru for their support and
guidance and helping me in completion of the report.

I am thankful to my internal guide Ms. JAYASHREE N, for her constant support and
inspiration throughout the project and invaluable suggestions, guidance and also for
providing valuable information.

Finally, I express my gratitude towards my parents and family for their continuous
support during the study.

THRIPTHI M
1NH18MBA84

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 TABLE OF CONTENTS

SL. NUMBER CONTENTS PAGE NUMBERS

1 Executive Summary 7

2 Theoretical Background Of The Study 8-20

3 Industry Profile &Company Profile 21-57

4 Application Of Theoretical Framework 58-560

Analysis And Interpretation Of Financial

5 61-81
Statements And Reports
Learning Experience- Findings,
6 82-85
Suggestions And Conclusion

7 Bibliography 86

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EXECUTIVE SUMMARY
An internship on inventory management has been a very good experience. Every manufacturing
company faces the problem of inventory management in their day to day business. An organization’s
cost reduces and the profits increased only if it is able to manage it’s inventory management
efficiently. At the same time, the company can provide customer satisfaction and hence can improve
their overall productivity and profitability.

This internship is sincere effort to study and analyze the inventory management of EXIDE
INDUSTRIES LTD. The project focused on making a financial overview of the company by
conducting a inventory analysis of EXIDE INDUSTRIES LTD. for the years 2014-15 to 2018-19.

Inventory is a central process in manufacturing unit. This Inventory is concerns to all departments
i.e., from planning department to selling department in which it passes through production
department, HR department, finance department, costing department. So managing of inventory is
having wide scope in manufacturing company. In recent times, the sourcing of low cost become an
essential competitive strategy in many manufacturing sectors.

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 CHAPTER-1

THEORITICAL BACKGROUND

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 Inventory management refers to the raw materials, work in progress finished goods
which are maintained in the organization to have continuous production and sales.

It is one of the components of working capital more than 60% of the working capital
will be invested in inventory. An efficient inventory management system directly contributes to the
growth of profitability of the business concern. In some companies it may go higher either having too
much or too low inventory will results a lot of problems. The scientific process of implementing
inventory management provides inventory at right time, from right source and at right price and also
involves the steps that are to be taken with regard to storage and supervision of these materials. The
main objective of inventory management is to reduce order placing, receiving and inventory carrying
cost and wastages.

The inadequate supply of raw materials directly disturbs the normal functioning of the
business unit whereas, the excess inventory leas to idle investments high inventory carrying cost and
wastages. Inadequate inventory directly affect on the production process. Therefore scientific
principles and techniques are to be adopted to manage the inventory system. To avoid all these
problems, in Japan, JIT Concept (Just in Time) has been introduced. It refers to the supply of raw
materials to the production department directly by the suppliers. The agreement will normally made
with supplier of materials on such terms. So, that the supply of raw materials must be made without
any interruption to the normal productive activities.

The success of the arrangements mainly depends on the sound infrastructure facility
viz., communication system, transportation system and availability of raw materials.

Inventory management has defined as the development and administration of policies

system procedures which will result to be cost relative inventory decision and related function.

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FACTORS INFLUCENING INVENTORY

Suppliers:

Suppliers can have huge influence on inventory control. Successful businesses requires
reliable suppliers in order to plan spending arranging production.

It can be a good idea to ensure you have a reliable back up supplier to prevent product shortages or
delays in the manufacturing process

Lead Time:

It is the time it takes from the moment an item is ordered to the moment it arrives.
Lead time will vary widely depending on the product type and the various manufacturing process
involved and therefore changes in these factors can require changes to inventory management.

Consumer Demand:

Maintaining the right stock levels accordance with the consumer demand is a key factor
directly affect inventory management flow.To always have the items in the right amount in stocks,
the firm can use the data collected from sales to identify user behaviours and patterns so you can
predict future consumer demands.

Financials:

Getting your financials is crucial when it comes to inventory management as every step of the
process involves great deal of financial risk. Spending too much on inventory can cause money
problems and spending too little can create unhappy customer reviews online.

Managing tools and technology:

Introducing modern technology to your inventory can save you both time and money while
improving the efficiency and effectiveness of inventory management processes. With the right tools
and systems in place.

The smoothness of the Supply chain process:

Inventory management is a part of the supply chain process of a company. Therefore any issue or
delay in the supply chain management process will affect your inventory management.

Material Planning:

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 Production plans have to be converted in to materials plan so that the quality and
items schedule or requirements may be defined to have successful material planning it would be
necessary for an organization to adopt the definite methodology which would take case of internal

Quality Discounts:

The vendor’s offer quality discount to the purchaser in order to induce purchaser
supplier often offers a price reduction for bulk order.

Cost Holding Inventory:

Inventories are tied up funds they also expose a firm to a number of risks and costs
the inventory problem is one of the balancing the various costs so, that the total cost is minimized.
The different costs are: material or holding cost, ordering cost, carrying cost, stock out cost, over
stock cost.

Stock:

In inventory control different terms are used such as safety stock, Reserve stock, buffer
stock so on …..

OBJECTIVE OF INVENTORY MANAGEMENT:-

 To keep inventory at sufficiently high level to perform production and sales activities smoothly.
 To make arrangement for sale of slow moving items.
 To reduce wastages and to avoid pilferage, breakage and deterioration.
 To exploit opportunities available and reduce of cost of purchase.
 To introduce scientific management system.
 To provide right materials at right time from right source at right place.
 To avoid excess and inadequate storing of materials.
 To protect quality of raw materials.
 To reduce order placing and receiving costs to the minimum.
 To ensure affective utilization of floor space.
 To meet the demands for goods of ultimate consumers on time.
 To maintain a minimum of investment in inventory to maximize profitability.

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TOOLS OF INVENTORY MANAGEMENT

1. FIXATION OF LEVELS:
It is a tool through which the inventories are maintained by fixing different levels.
Fixing stocks in different levels in order to avoid over stocking of any materials, at the same
time to ensure follow-up sufficient materials to production process. The main purpose of
finding levels is to control investing in inventories. This tools made by considering different
factors i.e., nature of raw materials, cost availability lead time, storage space and cost etc.,

 Maximum Level:
It is a level set for materials beyond which it should not be stored. If materials stored
beyond the maximum level creates several financial and managerial problems to the firm.
Maximum level = reorder quantity – [minimum consumption x minimum Reorder Period]

 Re-order level:
It is a level fixed for the materials to indicate the urgency of processing them from the
market. This level fixed by considering the rate of consumptions of raw materials, lead
time and availability of raw materials. Once the material reaches this level the store
controller place his request to purchase the materials so that he can maintain storage of
such items to maximum levels.
Reorder level = maximum consumption x maximum reorder period
 Minimum level:
It is also known as safety stock below which the storing of materials leads to severe
consequences. It is a level at which stores controller takes immediate action in procuring the
materials.
Minimum level = reorder level – average consumption x reorder period

 Danger level:
It is a level beyond which storage of materials should not fall. It also indicates
necessity to arrange for quick purchase of materials otherwise business firms has to sto the
products of major plants.

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 Danger level = minimum consumption x reorder period

 Average stock level:

It is a stock level between minimum level and maximum level of stock.
Average stock level = maximum level + minimum level
2

2. ABC ANALYSIS : [Always Better Control]:

Under this method the materials are managed by giving importance to its value
classification are being made by grading the materials as ABC.

GRADE A: Materials are costly high in value but less in number and are supervise and
controlled close. It comprises of 15% - 20% (terms of value)

GRADE B: Materials are moderated in value and in moderate number of items are
maintained with moderate control. It could account 60% of total cost of inventory.

GRADE C: Materials are cheap in value but more in quantity and least attention is given in
monitoring there items. It take care large number of items which relatively insignificant value.

3. EOQ ANALYISIS: (Economic Order Quantity) :

Economic order quantity is that quantity of materials to be ordered where it will have
least or minimum order placing and carrying cost. It is also called size of materials to be
purchased most economically this technique adopted in order to minimize ordering and
causing costs.

EOQ = 2AS
I
Ordering Cost – are the cost which are associated with the purchasing or ordering of materials.

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 Carrying Cost – There are the costs for holding the inventory there cost will not be incurred
of inventory are not carried.

4. PERCEPTUAL INVENTORY SYSTEM

It refers to continuous stock checking under this system different registers are
maintained for materials, entries are made and when the materials are received and issued,.
Hence it is identified as a costly technique of inventory control through it is costly technique,
but the benefits enjoyed by management are many.

5. VED ANALYSIS: (Vital Essential Desirable)

It is another tool adopted by inventory management. It is most suitable for automobile

industries specially to maintain spare parts, all parts are classified in to Vital Essential
Desirable.

VITAL: parts for the manufacturing of a product will be closely monitored in adequate
supply of these parts may substantially damage the productive activities.

ESSENTIAL: Essential are the type of the materials these are no doubt that they are essential
but its level of stocks are moderately low.

DESIRABLE: Desirable components may or may not maintained non availability of D type
of spares do not damage the normal functioning of industry.

6. FSN ANALYSIS: (Fast moving – Slow moving – Non moving):

Fast moving: are grouped according to the movement and close watches on the movement of
such items are kept.

Slow moving: items are frequently needed by the production department accordingly the
moderate quantity and moderated supervision will be maintained.

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 Non moving: items are rarely required for production department hence a small number of a
materials kept in stock and lesser importance is given.

7. PERIODICAL INVENTORY VALUATION:

Under this system inventory valuation with checking will be carried out at different
intervals generally twice/thrice in a year during the period of stock checking normal
functioning of the organization will be closed for one or two days and complete stock
verification and valuation will be done accordingly.

8. BUDGETARY CONTROL SYSTEMS:

It is an important technique of inventory control under this system inventory budgeting
are prepared and then the budgeting figures are compared with actual consumption figures and
necessary corrective steps are taken if there are significant verification between the budgetary
figures and actual inventory consumption figures.

METHODS OF RAISING MATERIAL ISSUES:-

1. FIRST IN FIRST OUT METHOD (FIFO]:
Here the earliest acquired stock is assumed to be used first. The stock, which is
bought, first is issued first. In other words the principle is that the materials are issued in this
order and at the price of their original purchase. This method assumes that the order in which
materials are received in the stores in the order in which material are issued from the stores.
Hence the material which is issued first is priced on the basis of the cost of materials received
earliest, soon and so forth.
ADVANTAGES:
 The pricing of material is perhaps consistent with the practice of issuing oldest materal
first followed in many manufacturing organization.
 The value of material in stocks is fairly close to current cost.

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 DISADVANTAGES:

 The issues of materials at different prices complicates stores accounting.

 Comparisons of job costs become difficultly when similar jobs may be charged with
different prices for the same materials.
 In a period of rising prices the charge of production is low, this tends to inflate reported
profile, increase tax burden and push up dividends as a consequence the firm is sapped
financially.

2. LAST IN FIRST OUT [LIFO]:

This method is opposite of the FIFO METHOD. It assumes that the material, which is
acquired, last is issued first. Hence material issues are prices on the basis of the cost of the
recent purchases.

ADVANTAGES:

 The cost of production reflects the current cost of material better.

 In the period of rising prices, reported profile are depressed is conserved.

DISADVANTAGES:

 The issue of material at different prices complicates sotre account.

 Pricing of material is not consistent with the material first.
 Comparison of job becomes when similar jobs may be for the same material at different
price.

3. WEIGHTED COST AVERAGE METHOD

Under this method issues are priced at the weighted average cost of material in stock [
the weight being proportional to quantities]. To get an up to date weighted average cost figures, a
new weighted average cost is calculated each time delivery is received.

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 ADVANTAGES:
 Leads to smooth out price fluctuations.
 It provides a fairly acceptable figure for stock value.
LIMITATIONS:
The limitation of this method may be medium involved in calculating the weighted average cost
each time a new delivery is obtained.

4. STANDARD PRICE [COST] METHOD:-

Under this method a standard price is predetermined when materials are purchased
the stock account is debited with the standard price. The difference between the actual price and
standard price is carried to a variance account. Material issued is charged as per standard price.

ADVANTAGES
 All material issue price identically. The possibility of jobs using the same material being
charged with different costs, a problem with the FIFO or LIFO method does not exists.
 Stock accounting is fairly amplified. There is no need for specific price attribute to
specific issue of materials.

DISADVANTAGES

 Determining the standard price may be somewhat difficult; particularly when price tend to
increase somewhat unpredictable are characters by wide fluctuation.
 The issue of how variance should be treated may be thorny.

5. CURRENT PRICE METHOD:-

According to this method issue are priced replacements or realizable price at their time
of issue
.

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 ADVANTAGE
 It is easy to calculate the price at which the issues are to be made.
 A particular purchase at a higher or lower rate does not disturb the price to a great extent
because in the price it is averaged out.
 Simplicity is the greatest advantage of this method.

DISADVANTAGE

 Material cost does not represent actual cost price.

 When prices fluctuate considerably, this method will give very incorrect result.
 This method does not give regard to quantities of material held at each price.

INVENTORY CONTROL HAS CERTAIN OBJECTIVES THEY ARE AS

FOLLOWS:

 To ensure adequate maintenance of supplier of raw material, stores, and spares and finished
goods and as to maintain the production level and to meet the varying requirement of
customers.
 To keep the investment in inventory as low as possible.
 To ensure effective utilization of storage capacity of space.
 To have effective control over purchase, storage and use of materials.
 To avoid both overstocking and under stocking of inventory.
 To eliminate duplication in ordering or replacement.
 To avoid losses through deterioration stock.
 To ensure perceptual inventory control so the materials shown in stock ledger should be lying
in the store.
 To facilitate furnishing of data for short term and long term planning and control of inventory.

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TYPES OF INVENTORY

RAW MATERIALS:

To hold stock of raw materials an organization deploys its primary production section
of processes to obtain raw material from manufacturing and stock list.

WORK IN PROGRESS:

The holding of raw material and stock of finished goods is generally a planned
activity in process stocks, however are likely to exist in any manufacturing organization.

FINISHED GOODS:

The stock of finished goods provides a buffer between customers and denmand and
manufacturing suppliers. The purpose of maintaining inventory is to ensure proper supply of goods to
customers.

IMPORTANCE OF HOLDING INVENTORY:

 To protect firm from unexpected changes in customer demand.

 The significance of uncertainly in the quality and quantity of supply, supply cost and delivery
items.
 Economies of scale offered by transportation companies, which encourages firm to transport
large quantity of items offered.
 To enable the firm to avoid scarcity of goods meant for either production/sales.

EFFECTS OF HOLDING LOW INVENTORY:

 No Service: often customer demand cannot satisfied leads to immediate losses to business
 Increases production control cost
 Increases replacement cost

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EFFECTS OF HOLDING HIGH INVENTORY:

 High inventory increases capital investment which reduces the capital available for other
activities and project
 Increase the risk of obsolescence
 Increase the storage cost
 It leads to reduction in replenishment order cost
 It leads to high level service

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 CHAPTER-2

INDUSTRY PROFILE AND

COMPANY PROFILE

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MANUGACTURING INDUSTRY OVERVIEW

Manufacturing industry refers to those industries which involve in the manufacturing

and processing of items and indulge in either creation of new commodities or in value addition. The
manufacturing industry accounts for a significant share of the industrial sector in developed countries.
The final products can either serves as a finished good for sale to customers or as intermediate goods
used in the production process.

EVOLUTION OF MANUFACTURING INDUSTRY

Manufacturing industries came into being with the occurrence of technological and
socio-economic transformations in the Western countries in the 18th-19th century. This was widely
known as industrial revolution. It began in Britain and replaced the labor intensive textile production
with mechanization and use of fuels.

Working of manufacturing industry:

Manufacturing industries are the chief wealth producing sectors of an economy.

These industries use various technologies and methods widely known as manufacturing process
management. Manufacturing industries are broadly categorized into engineering industries,
construction industries, electronics industries, chemical industries, energy industries, textile
industries, food and beverage industries, metalworking industries, plastic industries, transport and
telecommunication industries.

Manufacturing industries are important for an economy as they employ a huge share
of the labor force and produce materials required by sectors of strategic importance such as national
infrastructure and defense. However, not all manufacturing industries are beneficial to the nation as
some of them generate negative externalities with huge social costs. The cost of letting such
industries flourish may even exceed the benefits generated by them.

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ANALYSIS OF MANUFACTURING INDUSTRY

It suggests that the manufacturing industry has served as the pivotal factor in the
economic development of a country. The same applies for the United States Of America, whose
economy has been growing rapidly owing to the successful manufacturing industry. Manufacturing
industry analysis also indicates that the manufacturing industry provides employment to many
thereby contributing to the gross domestic product and per capita income of the country.
Approximately 75% of the engineers as well as the scientists get employed in the manufacturing
industry as recorded by a manufacturing industry analysis. The Census bureau categorizes a particular
manufactured product depending on the primary goods produced by the manufacturing industry.

BATTERY MANUFACTURING INDUSTRY PROFILE

The Indian storage batteries market is approximately estimated at US$ 500 million
with the automotive batteries segment 60 to 70 percent of the overall market value. In terms of
volumes, the overall consumption of the automotive batteries could be around 6.3 million units
with the 40 QE segment comprising around 1.2 to 1.3 million units per annum, Various batteries
(clockwise from bottom left): two 9-volt, two AA, one D, a handheld ham radio battery, a cordless
phone battery, a camcorder battery, one C, and three AAA.

A battery is one or more electrochemical cells, which store chemical energy and
make it available as electric current. There are many types of electrochemical cells, including
galvanic J' cells, electrolytic cells, fuel cells, flow cells, and voltaic cells. Strictly, an electrical
"battery" is two or more cells connected together, but often a single cell is called a battery. A
battery's characteristics may vary due to many factors including internal chemistry, current drain,
and temperature.

There are two types of batteries, primary (disposable) and secondary (rechargeable),
both of which convert chemical energy to electrical energy. Primary batteries can only be used once
because they use up their chemicals in an irreversible reaction. Secondary batteries can be
recharged because the chemical reactions they use are reversible; they are recharged by running a

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charging current through the battery, but in the opposite direction of the discharge current.
Secondary, also called rechargeable batteries can be charged and discharged many times before
wearing out. After weaning out some of the batteries can be recycled.

ABOUT BATTERY
A battery is perhaps the only gift of science where electric is stored by means of
elector chemical potentials guided by electro comical reaction. Chemical reaction initiated by
electricity. Which take place with the means of electron exchange between the reactions, as and
when required the stored energy can be counted back to electro chemical reaction. In certain cases
the electrical chemical reactions guiding the energy transformation is not reversible. Such batteries
are called ordinary cells. Where the electro chemical reaction guiding energy transformation is
reversible hence they can be reused through only after outing a required amount of electric energy
once it gets exhausted. These batteries are called secondary batteries.

BATTERY HISTORY

A battery, which is actually an electric cell, is a device that produces electricity

from a chemical reaction. Strictly speaking, a battery consists of two or more cells connected in
series or parallel, but the term is generally used for a single cell. A cell consists of a negative
electrode; an electrolyte, which conducts ions; a separator, also an ion conductor; and a positive
electrode.

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COMPANY PROFILE:
INTRODUCTION:

 Incorporated in January 1947.

 EXIDE is Asia’s largest exporter of batteries.
 A veteran with 52 years of experience.
 It has seven manufacturing units in India and five units apart from India.
 It has corporate alumni of chloride group PLC, UK.
 It provides 4.2 million SLI automotive batteries and 3 million industrial batteries with 300Ah
capacity.
 Collaborated with shin- Kobe electric machinery ltd (part of Hitachi group), Japan and
Furukawa batteries, Japan.
 It is a leader of South Africa traction batteries with 25% market shares.
 EXIDE captured international market and got costumers like Hyundai, Mitsubishi, TATA,
Toyota, Hero, Honda, FIAT etc.
 The company has subsidiaries in UK, Singapore and Srilanka.
 It’s export span to eighteen countries across five continents in growing list of overseas
costumers.
 The types of batteries manufactured by EXIDE are:
 Automotive Batteries
 Industrial Batteries
 Submarine batteries
 The two main manufacturing units of EXIDE which are present in all its manufacturing plants
are:
 Automotive
 VRLA (industrial)
 It has products which has capacity ranging from 2.5Ah to 10,000Ah and more.
 EXIDE also acquired the industrial/ manufacturing units of standard batteries ltd located at
Taloja & kanchurmarg (Maharashtra), Guindy (Tamil Nadu), and plant at Ahmednagar
(Maharashtra) from Cosepa Fiscal industries ltd as a going concern.

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  The manufacturing plants of EXIDE in India are:
 Shamnagar (West Bengal)
 Chinchwad (Pune)
 Haldia (West Bengal)
 Hosur (Tamil Nadu)
 Taloja (Maharashtra)
 Ahmednagar (Maharashtra)
 Bawal (Haryana)
 The company’s Submarine batteries is mainly manufactured in the Pune manufacturing plant
 It is the first company to design battery powered electrical boat and maintenance free
batteries, traction batteries for wheel chairs and flat plate batteries for automated guided
vehicles.
 EXIDE today is a Rs 3606 crores power storage company.

HISTORY:

 1916- Chloride Electric Storage Co. (CESCO) UK sets up trading operations in India as an
import house.
 1946- First factory set up in Shamnagar, West Bengal.
 1947- Incorporated as Associated Battery Makers (Eastern) Limited on 31 January 1947 under
the Companies Act.
 1947- Incorporated Chloride International Limited (previously Exide Products Limited)
 1969- Second factory at Chinchwad, Pune
 1972- The name of the Company was changed to Chloride India Limited
 1976- R&D Centre established at Calcutta
 1981- Third factory at Haldia, West Bengal
 1988- The name of the Company was changed to Chloride Industries Limited
 1994- Technical collaboration with Shin Kobe Electric Machinery Co. Ltd. of Japan, a
subsidiary of the Hitachi Group.
 1995- Chloride Industries Limited renamed Exide Industries Limited
 1997- Fourth factory at Hosur, Tamil Nadu

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  1998- Acquisition of industrial/ manufacturing units of Standard Batteries Ltd located at
Taloja & Kanjurmarg (Maharashtra), Guindy (Tamil Nadu) and plant at Ahmednagar
(Maharashtra) from Cosepa Fiscal Industries Limited as a going concern.
 1999- Acquired 51% Shareholding in Caldyne Automatics Ltd
 2000- Acquisition of 100% stake in Chloride Batteries S E Asia Pvt Ltd., Singapore and 49%
stake in Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka.
 2003- Commissioned plant at Bawal, Haryana
 2003- New joint venture in UK, ESPEX, with 51% holding.
 2004- Associated Battery Manufacturers (Ceylon) Limited, Sri Lanka became a subsidiary
consequent to acquiring further 12.50% Equity holding.
 2005- Investment in 50% shareholding of ING VYSYA Life Insurance Company Limited
 2007- Caldyne Automatics Ltd becomes 100% subsidiary consequent to acquiring the balance
49% shareholding.
 2007- Investment with 26% shareholding in CEIL Motive Power Pty Ltd. A Joint Venture in
Australia.
 2007- Acquired 100% stake in Tandon Metals Ltd.
 2008- Acquired 51% stake in Lead Age Alloys India Ltd.
 2009- Divestment of shareholding in CEIL Motive Power Pty Ltd.
 2012- Acquisition of Inverter manufacturing facility at Roorkee, Uttarakhand
 2012- Technical Collaboration with East Penn Manufacturing Co., USA
 2012- Acquisition of second Inverter manufacturing facility at Haridwar, Uttarakhand.
 2012- Acquisition of balance 49% shares in ESPEX Batteries Limited, UK.
 2013- Acquisition of remaining 26% shares of ING VYSYA Life Insurance Company adding
a total of 100% stake.
 2014- ING VYSYA renamed as “EXIDE LIFE INSURANCE COMPANY LTD.

PRESENT STATUS

 Largest manufacturers and exporter of batteries in Asia.

 Developed vast range of batteries through research and developments and has number of
patents to its name

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  Manufacturing specific batteries for specific applications that tough the daily lives of millions
of people and costumers of India
 Thus justifies the slogan “India moves on EXIDE”

WHY EXIDE INDIA?

1) CLAIM LEADERSHIP

EXIDE is a dominant player in the industrial battery segment. The company exports
batteries which have captured niches in south East Asian and European markets.

2) GLOBAL QUALITY
 Developed and produced accordingly to international standards and ISO9001, 14001
and ISO/ TS- 16949.
 Longer warranty time.
 Lower total cost of ownership.
3) MANUFACTURING STRENGTH

The only company with multi locational manufacturing units spread across country
and equipped with words largest and most advanced machineries.

4) OFFER WIDE RANGE OF BATTERIES

Products range cowering capacities from 2.5Ah to10,000Ah and more. Using the
latest technological input, we manufacture industrial batteries for the power, telecom,
infrastructure projects computer industries as well as the railways, mining and defense
sectors.

5) SOLUTION PROVIDER

EXIDE offers complete solution regarding equipment selection, battery sizing,

optimum room layout, installation, operation and maintenance. We offer lead acid batteries
from 2.5Ah to10,000Ah which no other companies in India offer wide range of capacity.

6) EXPERIENCE
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 Over 52 years accumulated experience of research and development, manufacturing
field operations

7) R&D CENTER

Our R&D center, set up in 1976, is counted among the premier battery research
facilities in the world and is recognized by the department of scientific and industrial.
Research under ministry of science and technology, government of India.

8) SAFETY CONSCIOUS

Underwriters laboratories Inc. USA certifications for the products and available on
request.

MANUFACTURING PLANTS OF EXIDE

MANUFACTURING STATE ESTABLISHED YEAR

PLANTS

Shamnagar West Bengal 1946

Chinchwad Pune 1969

Haldia West Bengal 1981

Hosur Tamil Nadu 1997

Taloja Maharashtra 1998

Ahmednagar Maharashtra 1998

Bawal Haryana 2003

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FACTORY PROFILE

 Fourth factory
 Established in 20th may, 1996
 It manufactures two type of batteries
 Automotive batteries
 Industrial batteries (VRLA)
 Manufacturing and operation started on june 1997
 Floor space: 50,000 sq.
 Industrial plant
 VRLA plant inauguration- april 1997
 VRLA commercial production- june 1997
 ISO 9001 certification- October 1998
 UL certification- December 2000
 Automotive plant
 Auto project commenced- October 1997
 Auto plant inauguration- July 1998
 Auto new plant project started- February 2000
 New plant inauguration- December 2000

NATURE OF BUSINESS CARRIED

Exide HOSUR plant is the fourth factory for Exide industry with a turnover of 6900
crores in the year 2015-16. It is found in 1997.It has total land area of 74.5 of which 42% is green
zone. HOSUR Exide plant is the more productive unit. It has been the two productive plants like Auto
and VRLA type batteries.

 Auto plant batteries are used for car, truck, and tractor.
 VRLA plant batteries are used for railways, ship.

Exide uses latest world class manufacturing technology to produce batteries for the
above applications. Its factories have all the modern equipment necessary to manufacture world class

36 | P a g e
products. It also sources its components from the best battery component in the world. The various
batteries are

 Automotive Batteries

In the domestic market, the Company sells its products under EXIDE, SF, SONIC
and Standard Furukawa Brands. ‘EXIDE’ and ‘SF” are its flagship brands. In the
international market the products are sold mainly under DYNEX, INDEX & SONIC brands.
The Company supplies batteries to almost all the car and two-wheeler manufacturers in the
country.

The Company has a distribution network comprising over 4000 dealer outlets. These
outlets are supported by 4 regional offices and 28 branch offices. The Company also exports
batteries to the Middle East, Japan and CIS countries.

The Company has a market share of 72% in case of Automotive OEM and 70% in
case of Organized Retail. The Company also manufactures submarine batteries

 Industrial Batteries

The Company designs and manufacture its industrial batteries in a wide range from
2.5 Ah to 20,600 Ah in conventional flooded and Valve Regulated Lead Acid (VRLA)
design. In domestic market, the Company sell its products mainly under EXIDE, INDEX, SF,
CEIL & POWER SAFE brands and in the international markets mainly under CEIL,
CHLORIDE and INDEX brands. Lead acid and Nickel-Cadmium batteries.

Industrial batteries are of three types, Conventional lead acid batteries, VRLA (Valve
regulated both organized and unorganized players compete in the OEM and retail industrial
battery markets. Industrial batteries cater mostly to the infrastructure sector such as railways,
telecom, power plants, solar cells and other industrial segments such as uninterrupted power
supply, inverters and traction batteries.

Exide’s Inva tubular batteries for Inverter applications were introduced in 2000 and
Tele tubular for Telecom Sector introduced in the year 2007 has created volume growth. The
Company also manufacture industrial batteries for niche segments such as miners’ cap lamp
batteries and submarine batteries.
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38 | P a g e
  Submarine Batteries

The Company also manufactures high-end submarine batteries (Type 1, 2 & 3). The
Company manufactures two to three submarine batteries a year to meet the country’s defense
requirements. The Company is one of the five companies in the World which has the
capability to make submarine batteries for both Russian and German types. With the
government’s permission, in recent years, the Company has exported to Algeria

EXIDE HOSUR- DREAM

To become a formidable global enterprise through manufacturing excellence.

FOCUS OF EXIDE- HOSUR

 Quality
 Productivity
 Cost
 Delivery
 Safety and cleaner environment
 Highly motivated team
 Fast response (before and after sales)
 Long lasting term costumer relationship

VISION

Providing credible value addition to customers, employees and shareholders while

simultaneously being recognized by society as a responsible corporate citizen. In addition, achieving
operational excellence while addressing and taking steps towards environmental protection.

MISSION

Strive to carefully balance the interest of all stakeholders; to fulfill aspirations of the
employees and to passionately pursue excellence without deviating from our core values.

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CORE VALUES

 Customer Orientation
 Personal Integrity and Commitment
 Teamwork and Mutual Support
 Employee Development and Involvement
 Striving for Excellence
 Management by Processes and Facts
 Responsible Corporate Citizenship

OBJECTIVES AND GOALS OF THE COMPANY

 To modernize , upgrade and improve facilities or higher production and productivity

 To achieve better Quality in Products.
 To Strengthen the Marketing Organization to effectively Compete in National and
international markets.
 To get ISO certifications
 To maintain and developed highly motivated human Resources to achieve Professional
competence and ensure career development of its work force.
 To maintain Market Shares in Industry.

AWARDS/ CERTIFICATES AND RECOGNITION

 Exide wins CFO of the year award in automotive and auto-ancillary category from CNBC-
TV18

 CII Productivity Award -1ST Prize in category “A” for Significant Improvement in Productivity

 Company’s Plant at Hosur, Tamilnadu is an ISO-9001, ISO / TS-6949 and ISO-14001

certified by TUV-NORD of Germany.
 Delivery and quality certificate from Toyota in 2002

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 Developing and improving quality of batteries by reducing lead time of suppliers from TVS in
2002
 100 PPM quality commitment award from APC 2003
 100 PPM award from Hyundai in 2003

 100 PPM award from OEM customer American Power Corporation –January 2003

 Quality award from OEM customer Toyota - April 2003 & April 2004

 Safety award from Government of Tamilnadu - April’03

 100 PPM award from OEM customer Hyundai - June’03

 Zero PPM Award from OEM customer Toyota – April’04

 Zero PPM award from Toyota in 2004

 Green award from OEM customer Toyota - April’04

 Best Quality supplier award from OEM customer Toyota – April’05

 Zero PPM award from OEM customer Toyota- April’05

 Quality Delivery Award from OEM customer Toyota - April’05

 First Prize in Best Garden Competition (Industrial Category) awarded by Mysore Horticulture
Society – 2005

 Leadership and Excellence Award in Safety , Health & Environment by CII –2006

 Indian Manufacturing Excellence – “Gold” Award –for Automotive Ancillary Category from
Frost & Sullivan in 2006

 CII-EXIM Bank Award for Strong Commitment to Excel by CII in 2006

 Best quality award from Toyota in 2007
 Teri corporate environmental award in 2007(second best)
 CII business excellence award in 2007
 "Exide, Haldia factory gets TPM award for Category A, 2008, from Japan Institute of Plant
Maintenance"

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 CII Quality Award – Certificate of Appreciation for Commendable effort in the area of Total
Quality at the CII(ER) Quality Award 2008-09

 At the CII (Eastern Region) awards ceremony in Kolkata for 08-09 Exide won
 Zero PPM & best Kaizen trophy from M/s Toyota in 2009
 Good IR award from ministry of labor, Tamilnadu in 2009
 Best support award from m/s Hyundai and m/s Renault Nissan in 2010
 Safety award from chief inspector of factories, Tamilnadu in 2010
 JIIPM TPM award in 2010 (category A)
 Quality circle award from M/s Toyota in 2011-12
 Par- excellence & excellence award from CCQC & NCQC in 2012-13
 1st prize in quality Kaizen competition from M/s JCB & M/s M&M in 2013
 Winner of EFY award in the category SMF batteries in 2005-13
 Central Excise award “top tax payer” in 2013-14
 Green tech environment award in 2014
 Quality improvement award from Hyundai in 2004

 CII-ITC Award 2016 for Commendable Achievement in SCM Sustainability

 Golden Peacock Award for Excellence in Corporate Governance 2016

 Manufacturing Today Award 2016

 Greentech Safety Award 2016

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WORK FLOW MODEL

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PRODUCTION DEPARTMENT PRINCIPLE

“TO ACHIEVE ZERO DEFECTS”

In production area they are using many process to produce a battery, some process are
grid casting, small parts casting, assembling the parts, acid filling, heat sealing, pole bearing, air
leakage testing & charging and testing.

BRIEF OUTLINE OF THE PROCESS OF MANUFACTURE OF VALUE

REGULATED LEAD ACID BATTERIES AND AUTOMOTIVE BATTERIES.

The basic raw material for manufacturing a lead acid battery & automotive battery (a
captive rechargeable source of energy) is lead. The essential steps for manufacture are as follows.

1) Alloy Blending

Lead or lead base alloys are mixed in the molten state with controlled amounts of
metallic additives. The blended alloys are used for a variety of components in the battery (at
Hosur) blended alloys are procured from external source and partly from in house.

2) Grid costing & Ageing

Blended alloys of specified composite are machine cost by gravity flow into grids
(structured lattices). These serve as conductive pathway for the current to and from the active
material. There also act as supporting framework. Grids cost are aged before subsequent
processing to reach sufficient hardness levels.

3) Oxide Manufacturing

Lead is partly oxidized to form grey oxide a finely divided admixture of the metal
and its monoxide. This is carried out through attrition in ball mills, super micron mills for
industry and lishan ball mail for auto.

4) Paste Mixing, Pasting and Curing

Grey oxide is mixed with specified quantities of additives, acid and water to form a
pliable paste. Positive and negative plates are made by machine pasting the paste onto the
grids.
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 The pasted plates are quick dried (for better handling) and stored in worm and humid cubicles
to convert the paste largely to tri-basic lead sulphate, which enhances adhesive and cohesive
properties and facilities the next step of formation.

5) Forming

Cured positive and negative plates are arranged alternatively in tanks containing
dilute sulphuric acid and subjected to the passage of a specified duration, When the positive
materials is converted largely to lead dioxide and the negative to spongy lead.

6) Drying

The formed plates are dried at elevated temperature in a stream of hot air.

7) Plate parting and Lug Brushing (Plate Cleaning or Plate Finishing)

Plates, if processed in multiple configuration, are separated into individual ones, their
lugs (top protrusions for connections) are brushed clean.

8) Assembly

The finished plates of each type positive and negative are assembled into groups by
fusing their lugs top a common group bar and vertical strap. This process is carried out
manually using a Jig positive and negative groups are interleaved separated by separators in
the form of glass fiber mats. The elements so formed are inserted in to individual cell boxes or
cell compartment of battery. The cell/battery is finally by the correct sequence of inter cell
connector terminal burning and lid sealing operations.

9) Charging

After lid sealing operation, each battery is filled with dilute sulphuric acid and then
battery charging process is carried out as per the process specification for a specific duration.
At the end of charging schedule only passed batteries go to successive operation.

10) Final Assembly

The passed charged batteries are sent to final assembly after fixing the safety value
tests for internal resistance and high rate discharge and ultrasonic welding process take
place.

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 Cosmetics are also checked at the point. After screen printing, all batteries go to dispatch
yard: batteries are packed and shipped to customers.

QUALITY POLICY OF THE COMPANY

 The aim of the company is to always provide satisfaction to customers.

 The company will develop design, produce and market products and services that cater
continuously to the needs and expectation of customer and succeed in gaining/retaining a
competitive edge.

 A quality system meeting international standards will be implemented and maintained.

 Procedures and processes shall be standardized and effective control systems instituted to
eliminate variability due to non-conformance.

 The standards and system shall be continually reviews and up graded audits and management
reviews shall be carried out.

 Human resources will be developed through planned and structured training and development
Programmes to be conducted on a reader basis.

 T P M POLICY

The members of Exide Industrial Limited in our pursuit of excellence and customer
satisfaction are committed to achieve optimum utilization of all available resources by
implementation of total productive maintenance

 AIM OF ORGANIZATION

1. Improve the overall equipment efficiency by eliminating all losses.

Strive for zero break downs, zero defects and zero accidents.

2. Train, involve and empower people.

3. Create a safe and clean working environment.

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  ENVIRONMENT POLICY

We, the member of Exide Industries Limited., in the pursuit of core value of
responsible corporate citizenship are committed to the issues addressed in the policy at all
our locations during the marketing, design, manufacture sales and after sales support of lead
– acid batteries.

It is the policy of the company to:

1. Minimize the adverse impact of our activities, products and service by implementing an
environmental management system.

2. Prevent pollution through waste minimization at source, recovery / treatment of emission and
releases conservation of energy, recycling & optimum use of resources.

3. Continuously improve our environmental performance through setting and reviewing and
associate objectives and targets and periodic evaluation.

4. Comply with applicable legal requirements and other requirements related to our
environmental aspects.

5. Communicated all interested practice and all people working for or on behalf of our
organization.

PRODUCTS AND SERVICE PROFILE

Lead acid storage for automobile, motorcycle, genets, trawlers, VLRA, industrial
stand by, motive power, submarines (2.5 Ah to 12600 Ah)

SPECIAL FEATURES

 Maintenance free

 Easy handling easy installation

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  Ready to use

 Long service life

 Excellent charge retention and recovery ability

 High reliability

PRODUCT PROFILE

For cars, Jeeps and commercial vehicles,

1. Automotive batteries
Passenger cars, two wheelers to tractors,

2. Heavy duty batteries For trucks and tractors

3. Light weight batteries For wireless transmission batteries

4. Transaction batteries For material handling equipment

5. Train lighting cells For railway coaches

For telecommunications, telephone,

6. Stationary batteries
Emergency lighting

For defense Requirements Company

Manufacturers, two or three submarine
7. Submarine batteries
batteries a year, for new generation
Submarine to the Indian navy

AREA OF OPERATION

Exide industrial limited manufacturing and distributing the batteries in globally, It has
National and regional customers where the activities takes place according to the order given by
customers that to the legal right. The distribution net work is as follows

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COMPETITORS INFORMATION

The company faces competition on two fronts. It faces competition from new player
in the organized sector who is focusing on advertising and publicity for promoting their brands. The
company also faces competition from low cost products from the unorganized sector. There are many
firms or agencies dealing with batteries. They produces, markets the product. EXIDE industries ltd
facing a huge competition from companies like:

 For automotive batteries

 PANASONIC
 AMARON
 WIPRO
 MICROTEX
 AMCO-YUASA
 PRESTOLITE
 OKAYA
 VARTA

 For industrial batteries

 AMRAJA
 HBL
 STAR
 NED ENERGY SYSTEM
 KIRL OSKAR
 PANASONIC
 BB-CHINA
 ROCKET-KOREA

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MAJOR CUSTOMERS

 AUTOMOTIVE BATTERIES
 HYUNDAI
 HMT LTD.
 MARUTI
 TATA
 TOYOTA
 BAJAJ AUTO
 FIAT
 HERO
 HONDA
 PIAGGO
 ESCORTS
 MAHINDRA
 ASHOK LEYLAND
 GENERAL MOTORS
 SWARAJ MAZADA
 MITSUBISHI MOTORS
 JOHN DERE
 EICHER
 MNC’S
 INDUSTRIAL BATTERIES
 MOTOROLA
 ERICSSON
 EMERSON
 SIEMENS
 DUBAS
 BHEL
 BSNL

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  VSNL
 BEL
 NTPC
 GAIL
 ABB
 GODREJ
 KPCL
 INDIAL RAILWAYS
 LUCENT TECHNOLOGY
 TVS ELECTRONICS

BRANDS OF EXIDE

 CHLORIDE

 INDEX

 DYNEX

 Standard Furukawa(sf sonic)

 JUPITER

 CONREX

 CHAMPION

 LITTLE CHAMP

 BOSS

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INFRASTRECTURAL FACILITIES

The Exide has eight manufacturing plants producing world class products. Exide
factories are located strategically around the country to provide logistic support for its production of
over five million batteries per annum.

Each of these factories is equipped with state of the art equipment sourced from the
best battery making machinery manufacturers in the world. Exide, due to its strong roots with the
erstwhile chloride group has access to the best manufacturing practices in the field of lead Acid
Batteries.

A technology tie up with Shin Kobe the makers of world class Hitachi VRLA
batteries has given Exide the technological edge in maintenance free catteries. Other strategic
technology agreement with Furukawa, Japan and Oldham, U, K. has given Exide competitive edge in
proving the most reliable solutions for packaged power.

 Environmental policy
 Safety measures facilities
 Medical facilities
 Effluents training
 Transportation facilities
 Canteen facilities

Objectives and Goals of Company

 To modernize , upgrade and improve facilities or higher production and productivity

 To achieve better Quality in Products.
 To Strengthen the Marketing Organization to effectively Compete in National and
international markets.
 To get ISO certifications
 To maintain and developed highly motivated human Resources to achieve Professional
competence and ensure career development of its work force.
 To maintain Market Shares in Industry.

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 ORGANIZATIONAL STRUCTURE

EXECUTIVE CHAIRMAN

M D & CEO

DIRECTOR (INDUSTRIAL)

CHIEF OPERATING MANAGER

PRODUCTION PRODUCTION PERSONNEL ACCOUNTS MATERIAL CUSTOMER

AUTOMOTIVE INDUSTRIAL SUPPORT SERVICE

HEAD HEAD HEAD HEAD HEAD HEAD CUSTOMER

PRODUCTION AUTOMOTIVE
PRODUCTION INDUSTRIAL PERSONNEL ACCOUNTS MATERIAL SUPPORT SERVICE

MANAGER MANAGER ASSISTANT ASSISTANT ASSISTANT ASSISTANT

MANAGER MANAGER MANAGER MANAGER

ASSISTANT ASSISTANT
MANAGER MANAGER

Accounting procedure:

 Maintenance of record as per the accounting standards is maintained.

 Ensuring correct & proper material accounting in & out of the factory.
 Pay roll accounting.

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  Creditors bill passing &all payments.
 Stock transfer &direct sales invoicing.
 Budgeting & budgetary controls.
 Fixed assets accounting.

STYLE

 Democratic style of industry.

 Management style is vertical style.

Democratic style

Here leadership style is democratic because all the heads of departments will have
meeting daily so all takes decision. So it is called as democratic style and suggestion committee takes
suggestions

Management style
TOP LEVEL MANAGEMENT

MIDDLE LEVEL MANAGEMENT

LOW LEVEL MANAGEMENT

STAFF

The people in the enterprise and their socialization into the organization.

Roles & Responsibilities of Employees

 It is the responsibility of every employee’s to perform work in safe manner.

 Suggestion for improvement.
 Suggestion for poke – yoke techniques.
 Short & separate hazardous wastes.

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SHARED VALUE

Fundamental axioms that organization believes in and people respect and work
towards. Core values also set the tone of the organization culture the core value of our organization
are given bellows:

 Customer orientation.
 Personal integrity and commitment.
 Team work and mutual support.
 People development and involvement.
 Striving for excellence.
 Management by processes and facts.

SKILLS

 Technical skill requirement: ITI, Diploma, Mechanical engineers

 Nontechnical skill requirement: MBA at top management, BBM & B.com at operational level

CSR ACTIVITIES OF EXIDE

 eradicating hunger, poverty and malnutrition, (promoting health care including preventive
health care) and sanitation including contribution to the Swach Bharat Kosh set-up by the
Central Government for the promotion of sanitation and making available safe drinking water
 promoting education, including special education and employment enhancing vocation skills
especially among children, women, elderly, and the differently abled and livelihood
enhancement projects
 promoting gender equality, empowering women, setting up homes and hostels for women
and orphans; setting up old age homes, day care centers and such other facilities for senior
citizens and measures for reducing inequalities faced by socially and economically backward
groups
 enduring environmental sustainability, ecological balance, protection of flora and fauna,
animal, welfare, agro-forestry, conservation of natural resources and maintaining quality of
soil, air and water including contribution to the Clean Ganga Fund setup by the Central
Government for rejuvenation of river Ganga
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 protection of national heritage, art and culture including restoration of buildings and sites of
historical importance and works of art; setting up public libraries; promotion and development
of traditional arts and handicrafts
 Measures for the benefit of armed forces veterans, war widows and their dependants.
 Training to promote rural sport, nationally recognized sports, Paralympics sports and
Olympic sports
 Contribution to the Prime Minister’ National Relief Fund or any other fund set up by the
Central Government for socio - economic development and relief and welfare of the
Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women
 Contribution or funds provided to technology incubators located within academic institutions
which are approved by the Central Government
 Rural development projects
 Any other projects or activities as may be approved by the Central Government pursuant to
section 135 of the Companies Act, 2013, from time to time

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SWOT ANALYSIS

S-Strengths:

 EXIDE is a super brand

 It has wide distribution network

 Appropriate infrastructure for condition of training

 Partnership with various technical & management institution for providing a continuous
supply of fresh graduate

 Streamlined system of recruitment

 Providing the necessary welfare facilities for the employees in the comfort zone & increasing
the retention level of the employees

 IR/LR relation very conductive for the smooth functioning of the unit

W-Weakness:

 Difficult to change to an alternative line production with the existing machinery

 High employee turnover

 Lack of clarity and transparency in upward/down ward communication.

 Evaluation of effectiveness of training programmers being imparted.

 No clear job description for various levels resulting in dual reporting relationships.

 Performance appraisal system: its approach, effectiveness acceptability.

 Effectiveness of organization health study.

O-Opportunities:

 Opportunity to expand globally

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  To have in-house online dilution plant for sulphuric acid. This will not only reduce the cost of
acid procurement but also will help us to consume the recovered acidic water from plate
washing thereby achieving reduction in effluent generation.
 To convert the accumulated calcium sulphate solid sludge to useful products in construction
industry with the help of IISc Bangalore.
 Further reduction in tank formation by increasing the jar formation of VRLA batteries.
 To start using rain water in process after necessary treatment. At present we are this only for
the green belt development. Storage caexidity of rain water reservoir is 30000KL.
 To extend green belt in additional to hectares.

T-Threats:

 Fast changing consumer’s tastes & preferences

 Liberalization policy of the government of India
 Fast changing market conditions
 High costs price in view of overheads
 Importing components at the low cost from china
 Increasing competition (Nationality & Globally)

 Unfavorable duty structure

 Slow growth rate in profits expected.

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INVENTORY MANAGEMENT AT EXIDE
INTRODUCTION

Inventory plays a vital role in any manufacturing concern. A constant and continuous
supply of inventory helps in smooth running of production. As inventories are one of the factors of
production it has to be processed from the best source available in the market while making purchase
on has to plan to buy right quality at right time with the proper description of quantity to right vendor.

In any industry while making purchases also must consider funds that are available.
This means that the target is within the budged made are not. EXIDE INDUSTRIES Ltd is basically
manufacturing all kinds of batteries required for automotive as well as industries and thus need for
materials for production. The inventory management starts from inviting the quotations from various
vendors and make the purchase the based upon the production schedule. The company purchases
made from different sources and they do not depend upon only one source.

Types of Inventory at EXIDE

 Raw materials
 Work in progress
 Finished goods

Classification of Raw materials

Direct Materials:

These are the materials which are related to particular product design. Cost is that
which can be conveniently identified with and allocated to cost units direct material generally become
part of the finished goods.

Indirect Materials:

These are the materials like stationeries, accessories. Indirect materials are those
which cannot be conveniently identified with individual cost unit the minor importance such as small
and relatively expenses items which may become part of finest product.

Supplies:

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 Supplies are indirect material used in products which do not become part of finished
goods.

Bought out parts:

There are the types of inventory used in the company which are readily available in
the market for other industry used it as a same status.

 Consumables:
 Spares:
 Electrical goods: fuse, electrical switches.

Stores:

The term stores are a very wider term and include raw material, components part,
tools, maintenance and materials.

Work in Progress:

Work in progress are the inventory refers to parts are between to productions
operations.

Finished Goods:

All articles for with all production are finished which are ready to be delivered to the
customer as a product in assemble types of production like refrigerator, radio, TV, etc. components
part may be purchased or produced within organization.

PURCHASING PROCESS OF MATERIALS IN EXIDE

 Purchase Requiring (PR): The users department giving purchase requirement letter to the
materials department to process the materials.
 Quotations: The purchase department collection for the said materials purchase requiring
company sends required raw materials quotation to various companies.
 Supplier Quotas: Evaluate the quotation of suppliers and accept the best competitive supplies
after negotiation.

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  Purchase Order: After the negotiation purchase order release to the said vendor with specific
information.
 Delivery Challan: It is based on purchase order the vendor supplying materials against
Delivery challan with gate entry.
 Good Received Note (GRN): It contains supplier name, description of goods, quantity
received per invoice, quality received quantity accepted, quantity rejected (if rejected goods
will replace by supplier) against Delivery Challan the stores representatives prepare Good
Received Note.
 Issued to Stores: After entering to the Goods Received note raw material issue to stores
department.
 Material Requisition: The users department giving material requisition to the stores
department.
 Bin card Entry: It contains of supplier name, item name, items code opening stock, received
quantity with date, issued date and balance.
 Production Issue: Through bin card entry materials issued to production department.
 Accounts Check: Accounts check is done by account department after production processes
completeness.

There is a time gap between placing order and receiving material from the
suppliers:

For importer materials – 7 days

Local Materials – 2 days

STORES MANAGEMENT

The aim of any business activity is to increase the value of organizational resources
which are risked by the owners in a venture. The aim of the manufacturing operation which is an
important faced of business activity is the timely manufacturing of desired product and specified
quality at least possible cost resulting in the value of resources.

Stores Functions:

 Receipt
 Storage
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65 | P a g e
  Retrieval
 Issue
 Verification
 Co-ordination & Co-operation

1. Inward Entry – Raw material entry

2. Daily Issued note – Goods issued to production department
3. Good received cum inspection – Goods received and aim of scrap materials
4. Request for raw parts
5. Daily tapes the stock register

Product of Purchasing Process:

The purpose of this document is to establish a process for purchasing of products in
confining to specific purchase requirement of the organization and product requirement.

Store Keeping
Store keeping in respect of following types of inventory

RAW MATERIALS:
 Hand to mouth buying is not feasible due to the quantum and frequency use and distantly
located supply of source
 To reap the price advantage available on materials
 Safeguard against the stock out on available raw materials
 Large order placing avails certain economies like cost of order placing

WORK IN PROGRESS

 To balance production flow

 To eliminate the idle capacity of machinery labour
 To even out the imbalance in demand and supply

FINISHED GOODS

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  To reap the customer demand

CUSTOMERS OF THE COMPANY:

(Per month)

COMPANY PLACE AMOUNT OF PURCHASING

Hyundai Chennai 60000

Ashok Leyland Hennu / Hosur 18000

Maruti Pune 12000

Toyota Bididhi 4500

Renault Chennai 10000

TVS motors Ltd Chennai 2000

Stores Management

1. General Store – Only to keep spares parts

2. Raw materials stores:
a. Industries Division
b. Automotive Division

RAW MATERIALS AND PRICES

[per ton]

RAW SUPPLIER PLACE AMOUNT OF PRICES

MATERIAL PURCHASING

PPCP Tech comb Australia 350 mt 150000

LEAD Umicore China 4500 mt 400000

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 ABS Sri Varu Bangalore 350 mt 230000
Enterpricse

SEPARATORS HK China Huge meters 130000

ACID Ozo Chennai Depends upon vehicle 300000

capacity

Other units of EXIDE:

1. Hosur (Four Wheelers)

2. Chunchwada (Two Wheeler Batteries)
3. Taloja (Four Wheelers)
4. Ahmednagar (Four Wheelers)
5. Haldia (Four Wheelers)
6. Shamnagar (Four Wheelers)
7. Bawal (Two Wheelers)

Nature of Inventories:

Raw Materials:

Raw materials are those basic inputs that are converted in to finished products
through the manufacturing process raw materials inventories are there units have been purchased and
stored for future production.

Work In Progress:

Inventories are semi – manufactured products they represents products that need more
work before they become finished products for sale.

Finished Goods:

Inventories are there completely manufactured products which are ready for sale.

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 CHAPTER-3

RESEARCH METHODOLOGY

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TITLE OF THE STUDY:

Report on Inventory management System at EXIDE Industries Ltd.,

STATEMENT OF THE STUDY:

Inventory comprises of raw materials, work in progress, finished goods, maintained in

the organization to have continuous production and sales. It is the aggregate quantity of material
resources and goods that are idle at a given point of time. The resources may be of any type; for
example men, materials, machinery, money, when the resources involved in materials or goods in any
stage of completion, inventory referred to as stock.

OBJECTIVES OF THE STUDY:

 To Study the inventory management systems of the company

 To evaluate efficiency of the inventory management system
 To study various components of inventory
 To understand the policies and procedures followed by the EXIDE INDUSTRIES LTD.

STUDY METHODOLOGY:

Essential purpose of research methodology is to provide information that will

facilitate and identification of problem and opportunity to ensure the organization in carrying out best
possible decisions. This study is done using the balance sheet and inventory data for three years has
been analyzed.

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SOURCES DATA COLLECTION:

1. PRIMARY DATA:Primary data are those which are collected for the first time, and they
are original in nature. Primary data has been collected through personal interviews with
concerned officers of the company like finance department ,finance manager and staff.

2. SECONDARY DATA

a. Company Balance Sheet

b. Documents, records, files, manual

c. Magazines, journals

Sampling Design:

This study being comprehensive study of inventory management and control system
in EXIDE INDUSTRY Ltd using cases references materials and also used for inventory management
details.

Limitation of the study:

 Study limited at period of 5 years

 Research work is restricted to company only
 Based on data available and believed to be is true as if is provided by company personnel
 The inventory analysis based on the financial statements published by the company

Conclusion:

The inventory management should aim at ensuring the required raw materials as and
when the requirement arises in the most economical way. However there is still scope of
improvement in the function.

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 CHAPTER-4

DATA ANALYSIS AND

INTERPRETATION

72 | P a g e
1. STOCK TURNOVER RATIO/ INVENTORY TURNOVER RATIO:
The inventory turnover ratio is an efficiency ratio that shows how effectively
inventory is managed by comparing cost of goods sold with average inventory for a period.
This measures how many times average inventory is "turned" or sold during a period.

FORMULA:
𝐶𝑂𝑆𝑇 𝑂𝐹 𝐺𝑂𝑂𝐷𝑆 𝑆𝑂𝐿𝐷 (𝑁𝐸𝑇 𝑆𝐴𝐿𝐸𝑆)
𝑆𝑇𝑂𝐶𝐾 𝑇𝑈𝑅𝑁𝑂𝑉𝐸𝑅 𝑅𝐴𝑇𝐼𝑂 =
𝐴𝑉𝐸𝑅𝐴𝐺𝐸 𝑆𝑇𝑂𝐶𝐾(𝐼𝑁𝑉𝐸𝑁𝑇𝑂𝑅𝑌)

TABLE-1

YEAR NET SALES AVERAGE STOCK STOCK TURN

OVER RATIO

2014-15 5318.67 1160.71 4.58

2015-16 6365.89 1407.39 4.52

2016-17 8308.85 1302.86 6.38

2017-18 9534.95 1646.36 5.79

2018-19 9479.44 1245.88 7.61

73 | P a g e
 GRAPH-1

STOCK TURN OVER RATIO

8

4 STOCK TURN OVER RATIO

3

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 stock turnover ratio is 4.58, in the year 2015-16 is 4.52, in the year 2016-
17 is 6.38, in the year 2017-18 is 5.79 and in the year 2018-19 is 7.61.

INTERPRETATION:

From the analysis done in the previous step, it is interpreted that the stock turnover ratio has
decreased in the year 2015-16 compare to year 2014-15, again increased in the year 2016-17,
again decreased in the year 2017-18 and again increased in the year 2018-19.

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2. INVENTORY TO WORKING CAPITAL RATIO:

Inventory to working capital ratio, defined as a method to show what portion of a

company's inventories is financed from its available cash, is essential to businesses which
hold inventory and survive on cash supplies. In general, the lower the ratio, the higher the
liquidity of a company

FORMULA:

𝐼𝑁𝑉𝐸𝑁𝑇𝑂𝑅𝑌 𝑇𝑂 𝑊𝑂𝑅𝐾𝐼𝑁𝐺 𝐶𝐴𝑃𝐼𝑇𝐴𝐿 𝑅𝐴𝑇𝐼𝑂 = 𝐼𝑁𝑉𝐸𝑁𝑇𝑂𝑅𝑌

× 100
𝑊𝑂𝑅𝐾𝐼𝑁𝐺 𝐶𝐴𝑃𝐼𝑇𝐴𝐿

TABLE-2
YEAR INVENTORY WORKING INVENTORY TO
CAPITAL WORKING CAPITAL
RATIO

2014-15 1160.71 1355.21 0.86

2015-16 1407.39 1569.89 0.90

2016-17 1302.86 1846.04 0.71

2017-18 1646.36 2001.30 0.82

2018-19 1245.88 2148.91 0.58

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GRAPH-2:

INVENTORY TO WORKING CAPITAL

RATIO
1

0.8

0.6
INVENTORY TO
0.4 WORKING CAPITAL RATIO

0.2

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:
In the year 2014-15 inventory to working capital ratio is 0.86, in the year 2015-16 is 0.90, in
the year 2016-17 is 0.71, in the year 2017-18 is 0.82 and in the year 2018-19 is 0.58.

INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the inventory to working
capital ratio has increased in the year 2015-16 compare to year 2014-15, and decreased in the
year 2016-17, again increased in the year 2017-18 and again decreased in the year 2018-19

76 | P a g e
3. INVENTORY TO CURRENT ASSET RATIO:

This ratio is calculated by dividing the total of inventory by the amount of current assets.

FORMULA:

𝐼𝑁𝑉𝐸𝑁𝑇𝑂𝑅𝑌 𝑇𝑂 𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐴𝑆𝑆𝐸𝑇𝑆 𝑅𝐴𝑇𝐼𝑂 = 𝐼𝑁𝑉𝐸𝑁𝑇𝑂𝑅𝑌

𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐴𝑆𝑆𝐸𝑇𝑆

TABLE-3
YEAR INVENTORY CURRENT INVENTORY TO
ASSETS CURRENT ASSETS
RATIO

2014-15 1160.71 2430.16 0.48

2015-16 1407.39 3390.17 0.42

2016-17 1302.86 3529.44 0.37

2017-18 1646.36 3720.39 0.44

2018-19 1245.88 4177.26 0.30

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78 | P a g e
GRAPH-3:

INVENTORY TO CURRENT ASSETS

RATIO
0.6
0.5
0.4
0.3
0.2
INVENTORY TO CURRENT
ASSETS RATIO

0.1
0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:
In the year 2014-15 inventory to current asset ratio is 0.48, in the year 2015-16 is 0.42, in the
year 2016-17 is 0.37, in the year 2017-18 is 0.44 and in the year 2018-19 is 0.30.

INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the inventory to current asset
ratio has decreased in the year 2015-16 compare to year 2014-15, again decreased in the year
2016-17, again increased in the year 2017-18 and again decreased in the year 2018-19.

79 | P a g e
4. CURRENT ASSET TURNOVER RATIO:

The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets. In other words,
this ratio shows how efficiently a company can use its assets to generate sales.

FORMULA:
𝑁𝐸𝑇 𝑆𝐴𝐿𝐸𝑆
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐴𝑆𝑆𝐸𝑇 𝑇𝑈𝑅𝑁𝑂𝑉𝐸𝑅 𝑅𝐴𝑇𝐼𝑂 =
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐴𝑆𝑆𝐸𝑇𝑆

TABLE-4

YEAR NET SALES CURRENT CURRENT ASSETS

ASSETS TURNOVER
RATIO

2014-15 5318.67 2430.16 2.19

2015-16 6365.89 3390.17 1.88

2016-17 8308.85 3529.44 2.35

2017-18 9534.95 3720.39 2.56

2018-19 9479.44 4177.26 2.27

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 GRAPH-4:

CURRENT ASSET TURNOVER RATIO

3

2.5

1.5
CURRENT ASSET
TURNOVER RATIO
1

0.5

0
2014-152015-162016-172017-182018-19

ANALYSIS:

In the year 2014-15 current asset turnover ratio is 2.19, in the year 2015-16 is 1.88, in
the year 2016-17 is 2.35, in the year 2017-18 is 2.56 and in the year 2018-19 is 2.27.

INTERPRETATION:

From the analysis done in the previous step, it is interpreted that the current asset
turnover ratio has decreased in the year 2015-16 compare to year 2014-15, again increased in
the year 2016-17, again increased in the year 2017-18 and again decreased in the year 2018-
19.

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82 | P a g e
5. CURRENT RATIO:

The current ratio is a liquidity ratio that measures a company's ability to pay short-
term and long-term obligations. To gauge this ability, the current ratio considers the current
total assets of a company (both liquid and illiquid) relative to that company's current total
liabilities.

FORMULA:
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐴𝑆S𝐸𝑇𝑆
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝑅𝐴𝑇𝐼𝑂 =
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐿𝐼𝐴𝐵𝐼𝐿𝐼𝑇𝐼𝐸𝑆

TABLE-5

YEAR CURRENT CURRENT CURRENT RATIO

ASSETS(RS) LIABILITIES(RS)

2014-15 2430.16 1074.91 2.26

2015-16 3390.17 1820.28 1.86

2016-17 3529.44 1683.40 2.10

2017-18 3720.39 1719.09 2.16

2018-19 4177.26 2028.35 2.06

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84 | P a g e
 GRAPH-5:

CURRENT RATIO
5
4.5
4
3.5
3
2.5
2

CURRENT RATIO

1.5
1
0.5
0

2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

The current ratio in the year 2014-15 is 2.26, in the year 2015-16 is 1.86, in the year
2016-17 is 2.10, in the year 2017-18 is 2.16 and in the year 2018-19 is 2.06.

INTERPRETATION:

From the analysis done in the previous step, it is interpreted that the current ratio has
decreased in 2015-16 compared to 2014-15, again increased in the year 2016-17, again
increased in 2017-18 and again decreased in the year 2018-19.

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6.QUICK / LIQUID RATIO:

The quick ratio is a measure of how well a company can meet its short-term financial
liabilities, also known as the acid-test ratio. It is used to supplement the information given by
the current ratio.

FORMULA:
𝑄𝑈𝐼𝐶𝐾 (𝑂𝑅) 𝐿𝐼𝑄𝑈𝐼𝐷 𝐴𝑆𝑆𝐸𝑇𝑆
𝑄𝑈𝐼𝐶𝐾 𝑅𝐴𝑇𝐼𝑂 =
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝐿𝐼𝐴𝐵𝐼𝐿𝐼𝑇𝐼𝐸𝑆

TABLE-6:

YEAR LIQUID ASSETS CURRENT LIABILITIES QUICK

ASSETS

2014-15 488.84 1074.91 0.45

2015-16 812.32 1820.28 0.44

2016-17 945.24 1683.40 0.56

2017-18 897.62 1719.09 0.52

2018-19 1016.15 2028.35 0.50

72 | P a g e
GRAPH-6:

QUICK ASSETS
0.6

0.5

0.4

0.3

0.2
quick assets

0.1

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:
The quick ratio in the year2014-15 is 0.45, in the year 2015-16 is 0.44, in the year
2016- 17 is 0.56, in the year 2017-18 is 0.52 and in the year 2018-19 is 0.50.

INTERPRETATION:
From the analysis done In the previous step, it is interpreted that the quick ratio has
decreased in the year 2015-16 compare to year 2014-15, again increased in the year 2016-17,
again decreased in the year 2017-18 and again decreased in the year 2018-19.

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7. FIXED ASSET TURNOVER RATIO:

Fixed-asset turnover is the ratio of sales (on the profit and loss account) to the value of fixed
assets (on the balance sheet). It indicates how well the business is using its fixed assets to
generate sales.

FORMULA:
𝑁𝐸𝑇 𝑆𝐴𝐿𝐸𝑆
𝐹𝐼𝑋𝐸𝐷 𝐴𝑆𝑆𝐸𝑇 𝑇𝑈𝑅𝑁𝑂𝑉𝐸𝑅 𝑅𝐴𝑇𝐼𝑂 =
𝑁𝐸𝑇 𝐹𝐼𝑋𝐸𝐷 𝐴𝑆𝑆𝐸𝑇𝑆

TABLE-7

YEAR NET SALES NET FIXED FIXED ASSET

ASSETS TURNOVER
RATIO

2014-15 5318.67 993.19 5.36

2015-16 6365.89 1053.18 6.04

2016-17 8308.85 1049 7.92

2017-18 9534.95 1190.33 8.01

2018-19 9479.44 1448.79 6.54

74 | P a g
GRAPH 7

FIXED ASSET TURNOVER RATIO

10

6
FIXED ASSET TURNOVER
4 RATIO

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 fixed asset turnover ratio is 5.36, in the year 2015-16 is 6.04, in the year
2016-17 is7.92, in the year 2017-18 is 8.01 and in the year 2018-19 is 6.54.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the fixed asset turnover ratio
has increased in the year 2015-16 compare to year 2014-15, again increased in the year 2016-
17, again increased in the year 2017-18 and again decreased in the year 2018-19.

75 | P a g
8.Return on total assets ratio

The return on total assets (ROTA) is a ratio that measures a company's earnings before
interest and taxes (EBIT) or net profit against its total net assets. The ratio is considered to be
an indicator of how effectively a company is using its assets to generate earnings before
contractual obligations must be paid.

FORMULA
𝑁𝐸𝑇 𝑃𝑅𝑂𝐹𝐼𝑇
𝑅𝐸𝑇𝑈𝑅𝑁 𝑂𝑁 𝑇𝑂𝑇𝐴𝐿 𝐴𝑆𝑆𝐸𝑇𝑆 = × 100
𝑇𝑂𝑇𝐴𝐿 𝐴𝑆𝑆𝐸𝑇𝑆

TABLE- 8
YEAR NET PROFIT TOTAL ASSETS RETURN ON TOTAL
ASSETS RATIO

2014-15 5107.04 3925.83 130.09

2015-16 6071.37 11308.71 53.69

2016-17 5964.24 12493.88 47.74

2017-18 6974.21 13887.35 50.22

2018-19 6809.18 15325.96 44.43

76 | P a g e
GRAPH-8

RETURN ON TOTAL ASSETS RATIO

140

120

100

80
RETURN ON TOTAL ASSETS
60
RATIO

40

20

0
2014-152015-162016-172017-182018-19

ANALYSIS:

In the year 2014-15 return on total assets ratio is 130.09, in the year 2015-16 is 53.69, in the
year 2016-17 is 47.74, in the year 2017-18 is 50.22 and in the year 2018-19 is 44.43.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the return on total assets ratio
has decreased in the year 2015-16 compare to year 2014-15, again decreased in the year 2016-
17, again increased in the year 2017-18 and again decreased in the year 2018-19.

77 | P a g e
9.GROSS PROFIT RATIO

Gross profit margin is a financial metric used to assess a company's financial health and
business model by revealing the proportion of money left over from revenues after accounting
for the cost of goods sold (COGS). Gross profit margin, also known as gross margin, is
calculated by dividing gross profit by revenues.

FORMULA
𝐺𝑅𝑂𝑆𝑆 𝑃𝑅𝑂𝐹𝐼𝑇
𝐺𝑅𝑂𝑆𝑆 𝑃𝑅𝑂𝐹𝐼𝑇 𝑅𝐴𝑇𝐼𝑂 = × 100
𝑁𝐸𝑇 𝑆𝐴𝐿𝐸𝑆

TABLE- 9
YEAR GROSS PROFIT NET SALES GROSS PROFIT
RATIO

2014-15 5668.52 5318.67 106.58

2015-16 6862.21 6365.89 107.80

2016-17 6754.77 9308.85 72.56

2017-18 7655.42 9534.95 80.29

2018-19 7727.35 9479.44 81.52

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GRAPH-9

GROSS PROFIT RATIO

120

100

80

60
GROSS PROFIT RATIO

40

20

0
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 gross profit ratio is 106.58, in the year 2015-16 is 107.8, in the year 2016-
17 is 72.56, in the year 2017-18 is 80.29 and in the year 2018-19 is 81.52.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the return on gross profit
ratio has increased in the year 2015-16 compare to year 2014-15, decreased in the year 2016-
17, again increased in the year 2017-18 and again increased in the year 2018-19.

79 | P a g e
10.NET PROFIT RATIO

The net profit percentage is the ratio of after-tax profits to net sales. It reveals the
remaining profit after all costs of production, administration, and financing have been
deducted from sales, and income taxes recognized.

FORMULA
𝑁𝐸𝑇 𝑃𝑅𝑂𝐹𝐼𝑇
𝑁𝐸𝑇 𝑃𝑅𝑂𝐹𝐼𝑇 𝑅𝐴𝑇𝐼𝑂 = × 100
𝑁𝐸𝑇 𝑆𝐴𝐿𝐸𝑆

TABLE-10

YEAR NET PROFIT NET SALES NET PROFIT RATIO

2014-15 5318.67 5318.67 100

2015-16 6361.13 6365.89 99.93

2016-17 8066.33 9308.85 86.65

2017-18 9160.01 9534.95 96.07

2018-19 9065.59 9479.44 95.63

80 | P a g e
GRAPH-10

NET PROFIT RATIO

105

100

95

90
NET PROFIT RATIO

85

80

75
2014-15 2015-16 2016-17 2017-18 2018-19

ANALYSIS:

In the year 2014-15 net profit ratio is 100, in the year 2015-16 is 99.93, in the year 2016-17 is
86.65, in the year 2017-18 is 96.07 and in the year 2018-19 is 95.63.

INTERPRETATION:

From the analysis done In the previous step, it is interpreted that the return on net profit ratio
has decreased in the year 2015-16 compare to year 2014-15, again decreased in the year 2016-
17, again increased in the year 2017-18 and again decreased in the year 2018-19.

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 CHAPTER-5

FINDINGS, SUGGESTION AND

CONCLUSION

82 | P a g
FINDINGS
1. The stock turnover ratio has decreased in the year 2015-16 compare to year 2014-15, again
increased in the year 2016-17, again decreased in the year 2017-18 and again increased in
the year 2018-19.
2. The inventory to working capital ratio has increased in the year 2015-16 compare to year
2014-15, again increased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.
3. The inventory to current asset ratio has decreased in the year 2015-16 compare to year
2014- 15, again decreased in the year 2016-17, again increased in the year 2017-18 and
again decreased in the year 2018-19.
4. The current asset turnover ratio has decreased in the year 2015-16 compare to year 2014-15,
again increased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.
5. The current ratio has decreased in 2015-16 compared to 2014-15, again increased in the
year 2016-17, again increased in 2017-18 and again decreased in the year 2018-19.
6. The quick ratio has decreased in the year 2015-16 compare to year 2014-15, again increased
in the year 2016-17, again decreased in the year 2017-18 and again decreased in the year
20158-19.
7. The fixed asset turnover ratio has increased in the year 2015-16 compare to year 2014-15,
again increased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.
8. The return on total assets ratio has decreased in the year 2015-16 compare to year 2014-15,
again decreased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.
9. The return on gross profit ratio has decreased in the year 2015-16 compare to year 2014-15,
again decreased in the year 2016-17, again increased in the year 2017-18 and again
increased in the year 2018-19.
10. The return on net profit ratio has decreased in the year 2015-16 compare to year 2014-15,
again decreased in the year 2016-17, again increased in the year 2017-18 and again
decreased in the year 2018-19.

83 | P a g
CONCLUSION

The inventory comprises raw materials, work in process ,finished goods , spares and
other stock in order to meet an unexpected demand distribution in the feature .

The study is conducted on inventory management at EXIDE INDUSTRIES ltd to find

out their existing inventory management system and their effectiveness. The main objective of the
study is to determine the efficiency of the inventory management and to study various components of
inventory at EXIDE .

With the help the ratio analysis to analyze the performance of the inventory
management at Exide industries Ltd over the period of five years and to determine the management of
the inventory, account receivables accounts payables ,accruals , and other means of short term
financing, It is found that the inventory turnover ratio of the company is fluctuating year by year .
The raw materials turnover ratio is also fluctuating year by year . The amount of inventory to current
assets ratio is sufficient and the inventory growth is fluctuating so that,

The company has to take necessary steps to control and to manage the inventory
efficiency and also to adopt new techniques in order to increase the production and scales .

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SUGGESTION
On the whole, the study reveals that the company is maintaining proper inventory
management system. However with a view to improve the performance and working result further
following suggestions:

 There should be frequent stock rectifications

 The turnover ratio can be improved by less stock accumulated and by higher sales

 The company can reduce conversion period

 The company has to be careful when selection of vendor that will result in better quality
output and cost

 Timely and correct estimation of raw materials is needs to be ensured

 The company need to improve the liquidity position

 The percentage of the inventory in current assets is good, it is suggested to the company to
maintain the same

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 BIBLIOGRAPHY:
CONSOLADATED BALANCE SHEET OF EXIDE COMPANY

Apr 18 - Apr 17- Apr 16- Apr15- Apr 14-

Mar 19 Mar 18 Mar 17 Mar 16 Mar 15

EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 85.00 85.00 85.00 85.00 85.00
Total Share Capital 85.00 85.00 85.00 85.00 85.00
Revaluation Reserves 50.40 36.61 38.68 40.37 42.22
Reserves and Surplus 4,194.99 3,719.43 3,335.98 2,954.32 2,560.13
Total Reserves and Surplus 4,245.39 3,756.04 3,374.66 2,994.69 2,602.35
Total Shareholders Funds 4,330.39 3,841.04 3,459.66 3,079.69 2,687.35
Minority Interest 14.61 12.78 11.68 11.16 12.50
Policy Holders Funds 8,634.83 8,040.89 7,149.73 6,257.44 0.00

NON-CURRENT LIABILITIES
Long Term Borrowings 1.90 2.62 4.30 2.38 2.58
Deferred Tax Liabilities [Net] 130.51 131.47 111.78 103.66 87.02
Other Long Term Liabilities 143.87 104.62 46.41 7.36 4.39
Long Term Provisions 41.50 34.84 26.92 26.74 57.08
Total Non-Current Liabilities 317.78 273.55 189.41 140.14 151.07

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CURRENT LIABILITIES
Short Term Borrowings 108.80 51.36 10.51 48.61 24.52
Trade Payables 1,132.14 1,045.63 1,120.86 995.39 689.82
Other Current Liabilities 501.94 365.07 352.91 593.04 244.75
Short Term Provisions 285.47 257.03 199.12 183.24 115.82
Total Current Liabilities 2,028.35 1,719.09 1,683.40 1,820.28 1,074.91
Total Capital And Liabilities 15,325.96 13,887.35 12,493.88 11,308.71 3,925.83

ASSETS
NON-CURRENT ASSETS
Tangible Assets 1,382.61 1,175.96 1,079.75 1,075.76 1,045.55
Intangible Assets 27.07 23.37 24.47 19.62 11.98
Capital Work-In-Progress 192.46 114.57 62.72 60.77 27.39
Fixed Assets 1,602.14 1,313.90 1,166.94 1,156.15 1,084.92
Non-Current Investments 6,992.36 5,869.18 4,794.30 3,696.64 344.38
Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00 0.15
Long Term Loans And Advances 128.76 199.05 131.68 105.59 18.41
Other Non-Current Assets 1,843.54 2,202.93 2,289.62 2,378.26 1.10
Total Non-Current Assets 11,148.70 10,166.96 8,964.44 7,918.54 1,495.67

CURRENT ASSETS
Current Investments 1,254.69 478.90 609.52 324.68 649.07
Inventories 1,245.88 1,646.36 1,302.86 1,407.39 1,160.71
Trade Receivables 722.16 690.15 658.42 591.81 426.05
Cash And Cash Equivalents 293.99 207.47 286.82 220.51 62.79
Short Term Loans And Advances 132.57 100.68 76.13 63.17 131.33
Other Current Assets 527.97 596.83 595.69 782.61 0.21

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Total Current Assets 4,177.26 3,720.39 3,529.44 3,390.17 2,430.16
Total Assets 15,325.96 13,887.35 12,493.88 11,308.71 3,925.83

OTHER ADDITIONAL INFORMATION

CONTINGENT LIABILITIES, COMMITMENTS
Contingent Liabilities 732.44 407.70 470.73 443.35 280.95
BONUS DETAILS
Bonus Equity Share Capital 54.15 54.15 54.15 54.15 54.15
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market
7,037.20 6,063.85 4,604.58 3,742.88 17.99
Value
Non-Current Investments Unquoted Book
176.72 85.81 8.21 8.72 318.16
Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value 322.19 332.59 229.91 140.43 100.00
Current Investments Unquoted Book Value 932.84 148.56 379.33 184.26 549.07

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 CONSOLADATED PROFIT AND LOSS A/C OF EXIDE COMPANY

Apr 17- Apr 16- Apr15- Apr 14-

Apr 18 -
Mar 18 Mar 17 Mar 16 Mar 15
Mar 19
PARTICULARS

Revenue From Operations [Gross] 9,986.42 9,946.12 8,859.71 7,154.71 5,882.31

Less: Excise/ Service Tax/Other Levies 920.83 786.11 793.38 793.58 563.64
Revenue From Operations [Net] 9,065.59 9,160.01 8,066.33 6,361.13 5,318.67
Other Operating Revenues 413.85 374.94 242.52 4.76 0.00
Total Operating Revenues 9,479.44 9,534.95 8,308.85 6,365.89 5,318.67
Other Income 135.09 95.15 70.80 56.05 41.46
Total Revenue 9,614.53 9,630.10 8,379.65 6,421.94 5,360.13

EXPENSES
Cost Of Materials Consumed 4,121.90 4,827.48 3,917.17 4,208.69 3,467.88
Purchase Of Stock-In Trade 66.83 113.14 100.37 74.03 49.85
Changes In Inventories Of FG,WIP And
240.11 -289.02 -11.69 -200.30 -56.89
Stock-In Trade
Employee Benefit Expenses 851.10 760.93 682.12 403.17 330.38
Finance Costs 1.65 3.21 7.61 9.06 14.91
Depreciation And Amortization
179.96 155.32 140.40 122.00 108.37
Expenses
Other Expenses 3,144.39 3,185.51 2,756.96 1,028.16 783.00
Total Expenses 8,605.94 8,756.57 7,592.94 5,644.81 4,697.50

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Profit/Loss Before Exceptional,
1,008.59 873.53 786.71 777.13 662.63
Extraordinary Items And Tax
Profit/Loss Before Tax 1,008.59 873.53 786.71 777.13 662.63
Tax Expenses-Continued Operations
Current Tax 293.27 235.83 232.94 220.61 182.04
Less: MAT Credit Entitlement 0.00 0.53 0.00 0.00 0.00
Deferred Tax -1.10 21.90 7.61 16.52 15.90
Total Tax Expenses 292.17 257.20 240.55 237.13 197.94
Profit/Loss After Tax And Before
716.42 616.33 546.16 540.00 464.69
Extra Ordinary Items
Profit/Loss From Continuing
716.42 616.33 546.16 540.00 464.69
Operations
Profit/Loss For The Period 716.42 616.33 546.16 540.00 464.69
Minority Interest -2.72 -1.78 -1.50 -1.87 -3.05
Share Of Profit/Loss Of Associates 0.00 0.00 0.00 11.22 -15.58
Consolidated Profit/Loss After MI
713.70 614.55 544.66 549.35 446.06
And Associates

OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) 8.00 7.00 6.00 6.00 5.00
Diluted EPS (Rs.) 8.00 7.00 6.00 6.00 5.00
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 204.00 187.00 153.00 136.00 127.50
Tax On Dividend 41.01 33.74 25.77 22.45 20.67

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BIBLIOGRAPHY

MANAGEMENT ACCOUNTING

FINANCIAL ACCOUNTING

REFERENCES

MR. MANJUNATH (ACCOUNTS DEPARTMENT)

WEBSITES

www.wikipedia.org

www.exideindustries.com

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