INTRODUCTION

Despite all the differences among companies, there are only a few sources of funds available to all firms.

1. They make profit by selling a product for more than it costs to produce. This is the most basic source of funds for any company and hopefully the method that brings in the most money.

2. Like individuals, companies can borrow money. This can be done privately through bank loans, or it can be done publicly through a debt issue. The drawback of borrowing money is the interest that must be paid to the lender.

3. A company can generate money by selling part of itself in the form of shares to investors, which is known as equity funding. The benefit of this is that investors do not require interest payments like bondholders do. The drawback is that further profits are divided among all shareholders.

In an ideal world, a company would bring in all of its cash simply by selling goods and services for a profit. But, as the old saying goes, "you have to spend money to make money," and just about every company has to raise funds at some point to develop products and expand into new markets.

When evaluating companies, it is most important to look at the balance of the major sources of funding. For example, too much debt can get a company into trouble. On the other hand, a company might be missing growth prospects if it doesn't use money that it can borrow

SOURCES OF FUNDS
Grants are made to non-profit organizations by development assistance agencies and foundations. Usually grants do not have to be repaid. Grant money is available to enhance country institutional capacity, to support governmental and non-governmental institutions and to finance project formulation, policy reform and sector management and development. Grants are provided by bilateral donors, multilateral grant aid institutions, United Nations organizations and specialized agencies, international financing institutions, international non-governmental organizations, the private sector, foundations and charity organizations. Loans, unlike grants, have to be repaid. Loans can be obtained from most banks, but development assistance agencies may provide loans for development priorities at preferential rates of interest, with an initial interest free period, repayable over the long term. To justify a loan a strong business case must be made. Loans are made to borrowing countries that are further up the development ladder and to the private sector and development groups in all countries. Loans are made at near-to-commercial conditions reflecting the cost of resource mobilization on capital markets plus a small fund administration margin to cover a donor's operational costs. Interest rates are generally variable. Loans are generally repayable over 15 to 20 years and often include up to a five-year grace period. There are some interest-free loans but these carry an annual service charge and a commitment fee is usually applied. These loans are repayable over 25 to 50 years with a maximum ten-year grace period. Equity investments enable persons and institutions to invest in shareholding of a company managing or implementing a sustainable forest management project. The investment may make an enterprise viable or enable it to expand, while the new shareholder will benefit through shareholder voting rights and dividends on profits. Co-funding is provided by some donor agencies to complement existing funding. Depending on the proposal, it may be possible to find an agency that provides the full cost of a project proposal. However, it is frequently the case that funding is only available

on the basis of shared cost. It may be necessary, therefore, to identify perhaps as much as 50% of the project cost from other sources of funding. If an agency requires co-funding, it is important to include a co-funding component in the project proposal. To secure cofunding it is necessary to identify existing matching funds. Complementary projects being formulated by other groups may provide possible sources of co-funding. Large corporations could not have grown to their present size without being able to find innovative ways to raise capital to finance expansion. Corporations have five primary methods for obtaining that money. Issuing Bonds. A bond is a written promise to pay back a specific amount of money at a certain date or dates in the future. In the interim, bondholders receive interest payments at fixed rates on specified dates. Holders can sell bonds to someone else before they are due. Corporations benefit by issuing bonds because the interest rates they must pay investors are generally lower than rates for most other types of borrowing and because interest paid on bonds is considered to be a tax-deductible business expense. However, corporations must make interest payments even when they are not showing profits. If investors doubt a company's ability to meet its interest obligations, they either will refuse to buy its bonds or will demand a higher rate of interest to compensate them for their increased risk. For this reason, smaller corporations can seldom raise much capital by issuing bonds. Issuing Preferred Stock. A company may choose to issue new "preferred" stock to raise capital. Buyers of these shares have special status in the event the underlying company encounters financial trouble. If profits are limited, preferred-stock owners will be paid their dividends after bondholders receive their guaranteed interest payments but before any common stock dividends are paid. Selling Common Stock. If a company is in good financial health, it can raise capital by issuing common stock. Typically, investment banks help companies issue stock, agreeing to buy any new shares issued at a set price if the public refuses to buy the stock at a

certain minimum price. Although common shareholders have the exclusive right to elect a corporation's board of directors, they rank behind holders of bonds and preferred stock when it comes to sharing profits. Investors are attracted to stocks in two ways. Some companies pay large dividends, offering investors a steady income. But others pay little or no dividends, hoping instead to attract shareholders by improving corporate profitability -- and hence, the value of the shares themselves. In general, the value of shares increases as investors come to expect corporate earnings to rise. Companies whose stock prices rise substantially often "split" the shares, paying each holder, say, one additional share for each share held. This does not raise any capital for the corporation, but it makes it easier for stockholders to sell shares on the open market. In a two-for-one split, for instance, the stock's price is initially cut in half, attracting investors. Borrowing. Companies can also raise short-term capital -- usually to finance inventories -- by getting loans from banks or other lenders. Using profits. As noted, companies also can finance their operations by retaining their earnings. Strategies concerning retained earnings vary. Some corporations, especially electric, gas, and other utilities, pay out most of their profits as dividends to their stockholders. Others distribute, say, 50 percent of earnings to shareholders in dividends, keeping the rest to pay for operations and expansion. Still other corporations, often the smaller ones, prefer to reinvest most or all of their net income in research and expansion, hoping to reward investors by rapidly increasing the value of their shares. Funds from operations: Funds from Operations (FFO) is a measure of cash generated by a real estate investment trust (REIT). It is important to note that FFO is not the same as Cash from Operations, which is a key component of the indirect-method cash flow statement. The formula for FFO is: Funds from Operations = Net Income + Depreciation + Amortization - Gains on Sales of Property

Issue of shares: Shares in Issue amount, is the current number of ordinary shares in issue and it is expressed in millions.
Issue of debenture:

A debenture is an instrument of debt executed by the company

acknowledging its obligation to repay the sum at a specified rate and also carrying an interest. It is only one of the methods of raising the loan capital of the company. A debenture is thus like a certificate of loan or a loan bond evidencing the fact that the company is liable to pay a specified amount with interest and although the money raised by the debentures becomes a part of the company's capital structure, it does not become share capital.

Internal Methods of Improving Cash Flow

If a business faces ongoing cash flow problems, then if the business is in other ways successful, it is good management to look for internal methods of solving or reducing the problem, some of the more successful methods are outlined below. 1. Stock management - Often cash flow problems arise because too much capital is tied up in stock. When we talk about stock we mean raw materials, work-in-progress and finished goods. Many firms are now implementing practices such as Just-in Time, and Kan Ban, which are designed to reduce capital tied up in stock and allow it to be used in more effective ways within the business. 2. Manpower management - Examining manpower costs can reduce outflows of cash. Is it necessary to have permanent contracts for all workers? Can some work be subcontracted, or can some work be transferred to temporarily contracted workers? Doing this can save expenditure on pensions, National Insurance, holiday pay etc. 3. Budgeting - Why base next years budgets on last year's budgets? Why not start with a clean slate and opt for Zero Budgeting? These methods can save on business costs and in larger organizations often prove the best long-term solution to cash flow and liquidity management problems.

UTILISATION OF FUNDS OR FINANCE MANAGEMENT

Finance is the science of funds management. The general areas of finance are business finance, personal finance, and public finance. Finance includes saving money and often includes lending money. The field of finance deals with the concepts of time, money and risk and how they are interrelated. It also deals with how money is spent and budgeted. Finance works most basically through individuals and business organizations depositing money in a bank. The bank then lends the money out to other individuals or corporations for consumption or investment, and charges interest on the loans. Loans have become increasingly packaged for resale, meaning that an investor buys the loan (debt) from a bank or directly from a corporation. Bonds are debt sold directly to investors from corporations, while that investor can then hold the debt and collect the interest or sell the debt on a secondary market. Banks are the main facilitators of funding through the provision of credit, although private equity, mutual funds, hedge funds, and other organizations have become important as they invest in various forms of debt. Financial assets, known as investments, are financially managed with careful attention to financial risk management to control financial risk. Financial instruments allow many forms of securitized assets to be traded on securities exchanges such as stock exchanges, including debt such as bonds as well as equity in publicly-traded corporations. Central banks act as lenders of last resort and control the money supply, which affects the interest rates charged. As money supply increases, interest rates decrease.

Loss from operations

Amount by which the cost of goods sold plus operating expenses exceeds operating revenues. The net loss from operations applies only to the normal business activities of the entity. Excluded are financial revenue and expense items and ancillary operations of the firm (i.e., extraordinary items). However, interest would be an includable expense in calculating Net Operating Loss for carryforward purposes.

Redemption of shares
The company may choose to repurchase if it has cash available, as an alternative to investing it in expanding the business. Or it may issue bonds to raise the money it needs to repurchase, which changes the company's debt-to-equity ratio.

Corporate finance
Managerial or corporate finance is the task of providing the funds for a corporation's activities. For small business, this is referred to as SME finance. It generally involves balancing risk and profitability, while attempting to maximize an entity's wealth and the value of its stock. Long term funds are provided by ownership equity and long-term credit, often in the form of bonds. The balance between these forms the company's capital structure. Shortterm funding or working capital is mostly provided by banks extending a line of credit. Another business decision concerning finance is investment, or fund management. An investment is an acquisition of an asset in the hope that it will maintain or increase its value. In investment management in choosing a portfolio one has to decide what, how much and when to invest. To do this, a company must:

Identify relevant objectives and constraints: institution or individual goals, time horizon, risk aversion and tax considerations; Identify the appropriate strategy: active v. passive hedging strategy Measure the portfolio performance

Financial management is duplicate with the financial function of the Accounting profession. However, financial accounting is more concerned with the reporting of historical financial information, while the financial decision is directed toward the future of the firm. Capital Capital, in the financial sense, is the money that gives the business the power to buy goods to be used in the production of other goods or the offering of a service.

The desirability of budgeting Budget is a document which documents the plan of the business. This may include the objective of business, targets set, and results in financial terms, e.g., the target set for sale, resulting cost, growth, required investment to achieve the planned sales, and financing source for the investment. Also budget may be long term or short term. Long term budgets have a time horizon of 510 years giving a vision to the company; short term is an annual budget which is drawn to control and operate in that particular year. Capital budget This concerns proposed fixed asset requirements and how these expenditures will be financed. Capital budgets are often adjusted annually and should be part of a longer-term Capital Improvements Plan. Cash budget Working capital requirements of a business should be monitored at all times to ensure that there are sufficient funds available to meet short-term expenses. The cash budget is basically a detailed plan that shows all expected sources and uses of cash. The cash budget has the following six main sections: 1. Beginning Cash Balance - contains the last period's closing cash balance. 2. Cash collections - includes all expected cash receipts (all sources of cash for the period considered, mainly sales) 3. Cash disbursements - lists all planned cash outflows for the period, excluding interest payments on short-term loans, which appear in the financing section. All expenses that do not affect cash flow are excluded from this list (e.g. depreciation, amortisation, etc) 4. Cash excess or deficiency - a function of the cash needs and cash available. Cash needs are determined by the total cash disbursements plus the minimum cash balance required by company policy. If total cash available is less than cash needs, a deficiency exists. 5. Financing - discloses the planned borrowings and repayments, including interest. 6. Ending Cash balance - simply reveals the planned ending cash balance.

Management of current assets Credit policy Credit gives the customer the opportunity to buy goods and services, and pay for them at a later date. Advantages of credit trade

Usually results in more customers than cash trade. Can charge more for goods to cover the risk of bad debt. Gain goodwill and loyalty of customers. People can buy goods and pay for them at a later date. Farmers can buy seeds and implements, and pay for them only after the harvest. Stimulates agricultural and industrial production and commerce. Can be used as a promotional tool. Increase the sales. Modest rates to be filled.

Disadvantages of credit trade

Risk of bad debt. High administration expenses. People can buy more than they can afford. More working capital needed. Risk of Bankruptcy. May lose peace of mind.

Forms of credit

Suppliers credit: Credit on ordinary open account Installment sales Bills of exchange Credit cards

Contractor's credit Factoring of debtors Cash credit Cpf credits Exchange of product

Factors which influence credit conditions

Nature of the business's activities Financial position Product durability Length of production process Competition and competitors' credit conditions Country's economic position Conditions at financial institutions Discount for early payment Debtor's type of business and financial positions

Credit collection Overdue accounts

Attach a notice of overdue account to statement. Send a letter asking for settlement of debt. Send a second or third letter if first is ineffectual. Threaten legal action. Effective credit control

Increases sales Reduces bad debts Increases profits Builds customer loyalty Builds confidence of financial industry

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increase company capitlisation Sources of information on creditworthiness

Business references Bank references credit agencies Chambers of commerce Employers Credit application forms Credit repair companies Duties of the credit department

Legal action Taking necessary steps to ensure settlement of account Knowing the credit policy and procedures for credit control Setting credit limits Ensuring that statements of account are sent out Ensuring that thorough checks are carried out on credit customers Keeping records of all amounts owing Ensuring that debts are settled promptly Timely reporting to the upper level of management for better management.

Stock Purpose of stock control

Ensures that enough stock is on hand to satisfy demand. Protects and monitors theft. Safeguards against having to stockpile. Allows for control over selling and cost price.

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Stockpiling This refers to the purchase of stock at the right time, at the right price and in the right quantities. There are several advantages to the stockpiling, the following are some of the examples:

Losses due to price fluctuations and stock loss kept to a minimum Ensures that goods reach customers timeously; better service Saves space and storage cost Investment of working capital kept to minimum No loss in production due to delays

There are several disadvantages to the stockpiling, the following are some of the examples:

Obsolescence Danger of fire and theft Initial working capital investment is very large Losses due to price fluctuation

Rate of stock turnover This refers to the number of times per year that the average level of stock is sold. It may be worked out by dividing the cost price of goods sold by the cost price of the average stock level. Determining optimum stock levels

Maximum stock level refers to the maximum stock level that may be maintained to ensure cost effectiveness.

Minimum stock level refers to the point below which the stock level may not go. Standard order refers to the amount of stock generally ordered. Order level refers to the stock level which calls for an order to be made.

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Cash Reasons for keeping cash

Cash is usually referred to as the "king" in finance, as it is the most liquid asset. The transaction motive refers to the money kept available to pay expenses. The precautionary motive refers to the money kept aside for unforeseen expenses.

The speculative motive refers to the money kept aside to take advantage of suddenly arising opportunities.

Advantages of sufficient cash

Current liabilties may be catered for. Cash discounts are given for cash payments. Production is kept moving Surplus cash may be invested on a short-term basis. The business is able to pay its accounts in a timely manner, allowing for easilyobtained credit.

Liquidity

Management of fixed assets Depreciation Depreciation is the allocation of the cost of an asset over its useful life as determined at the time of purchase. It is calculated yearly to enforce the matching principle. Insurance Insurance is the undertaking of one party to indemnify another, in exchange for a premium, against a certain eventuality. Uninsured risks

Bad debt Changes in fashion Time lapses between ordering and delivery

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New machinery or technology Different prices at different places

Requirements of an insurance contract

Insurable interest

The insured must derive a real financial gain from that which he is insuring, or stand to lose if it is destroyed or lost.

The item must belong to the insured. One person may take out insurance on the life of another if the second party owes the first money.

Must be some person or item which can, legally, be insured. The insured must have a legal claim to that which he is insuring. Good faith Uberrimae fidei refers to absolute honesty and must characterise the dealings of both the insurer and the insured. Shared Services

There is currently a move towards converging and consolidating Finance provisions into shared services within an organization. Rather than an organization having a number of separate Finance departments performing the same tasks from different locations a more centralized version can be created. Finance of states Country, state, county, city or municipality finance is called public finance. It is concerned with

Identification of required expenditure of a public sector entity Source(s) of that entity's revenue The budgeting process Debt issuance (municipal bonds) for public works projects

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Financial Economics
Financial economics is the branch of economics studying the interrelation of financial variables, such as prices, interest rates and shares, as opposed to those concerning the real economy. Financial economics concentrates on influences of real economic variables on financial ones, in contrast to pure finance. It studies:

Valuation - Determination of the fair value of an asset

How risky is the asset? (identification of the asset appropriate discount rate)

What cash flows will it produce? (discounting of relevant cash flows) How does the market price compare to similar assets? (relative valuation) Are the cash flows dependent on some other asset or event? (derivatives, contingent claim valuation)

Financial markets and instruments

Commodities - topics Stocks - topics Bonds - topics Money market instruments- topics Derivatives - topics

Financial institutions and regulation

Financial Econometrics is the branch of Financial Economics that uses econometric techniques to parameterise the relationships.

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Financial mathematics
Financial mathematics is a main branch of applied mathematics concerned with the financial markets. Financial mathematics is the study of financial data with the tools of mathematics, mainly statistics. Such data can be movements of securitiesstocks and bonds etc.and their relations. Another large subfield is insurance mathematics.

Experimental finance Experimental finance aims to establish different market settings and environments to observe experimentally and provide a lens through which science can analyze agents' behavior and the resulting characteristics of trading flows, information diffusion and aggregation, price setting mechanisms, and returns processes. Researchers in experimental finance can study to what extent existing financial economics theory makes valid predictions, and attempt to discover new principles on which such theory can be extended. Research may proceed by conducting trading simulations or by establishing and studying the behaviour of people in artificial competitive market-like settings.

Behavioral finance Behavioral Finance studies how the psychology of investors or managers affects financial decisions and markets. Behavioral finance has grown over the last few decades to become central to finance. Behavioral finance includes such topics as: 1. Empirical studies that demonstrate significant deviations from classical theories. 2. Models of how psychology affects trading and prices 3. Forecasting based on these methods. 4. Studies of experimental asset markets and use of models to forecast experiments.

A strand of behavioral finance has been dubbed Quantitative Behavioral Finance, which uses mathematical and statistical methodology to understand behavioral biases in conjunction with valuation. Some of this endeavor has been lead by Gunduz Caginalp

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(Professor of Mathematics and Editor of Journal of Behavioral Finance during 20012004) and collaborators including Vernon Smith (2002 Nobel Laureate in Economics), David Porter, Don Balenovich, Vladimira Ilieva, Ahmet Duran, Huseyin Merdan). Studies by Jeff Madura, Ray Sturm and others have demonstrated significant behavioral effects in stocks and exchange traded funds. Among other topics, quantitative behavioral finance studies behavioral effects together with the non-classical assumption of the finiteness of assets.

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INDUSTRY PROFILE

MEANING OF FASTENERS AND TYPES

A fastener is a broad term for nut, bolds & screws. It is an alternate of welding and riveting. Fasteners can be classifying broadly in to two categories: 1. 2. Depending on their tensile Mild Steel (MS) & high tensile fasteners.

USES
Mile steel fasteners are used in general application & produced by the SSI & unorganized sector. On the other trend (HT) fasteners that are relatively technology advance, are manufactured by organized sector. In India fasteners are used in textiles, machine tools, pumps automobiles & general engineering largest consumer 50% HT fasteners.

MAJOR MANUFACTURES
In India there are 4 major players in fasteners industries:

1. Sundaram fasteners 2. Sterling tools 3. Precision fasteners 4. LPS

A Sundaram fastener Industries (SFI) is a leader of automotive fasteners. While, precision fasteners limited (PFL) leads in industrial fasteners. Both are trying to enter in the each other segment industry.

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IMPROVED INPUT FRONT

Until a few years ago producer of HT fasteners had to input as much as 60% of their Raw Material like careful steel & cold heading quality steel due to poor quality. But availability of good steels in India also has changed the scenario. Now days Bihar alloys, Shri SR alloys, Steel Authority of India Ltd, Salam Steel Corporation are producing the special steel for fasteners. The automobile boom is the major reason for continuous growth of fasteners industry because the total sale of automobile (passenger cars, 2& 3 wheelers, multiutility Vehicles, sport utility vehicles) has achieved the total figure of 10 lakhs figures and commercial vehicles sales has also earned a growth of continuous increase in total sale. The engineering segment has also registered 25 % growth, which is also a major consumer of fasteners.

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PRODUCTION
Near about 200000 metric ton of fasteners are being produced by various fasteners manufactures in organized and unorganized sector. Sundaram fastener is the largest manufacturer of HT fasteners. Which produces approximately 48000 metric tons of high quality HT fasteners and it crossed the sales figures of Rs. 800 crore in year 2000-2001. Precision fasteners also have done well. Its sales went up 32% to Rs. 251 Crore in 2000-2001. LPS has also come in a long way. It crossed the 4475 tones mark of production in 2000-2001 years and total sales of 8640 Lakh.

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EXPORT OPPORTUNITY

The concept of outsourcing fasteners is under going a sea change globally. Auto giants around the world have identified countries to buy a particular component depending upon technology and cost. Arun Sharma, president PFL explains India has very good scope in this of globalize purchase and many auto giants are looking at India as a sourcing lease. Quality is an important factor in export but not the only criterion; what is more important is timely deliveries and after sales service through there is a vast potential to export fasteners to DEMs abroad, it has not been exploited due to difficulties in setting up service points near each of the DEM manufacture. Hence the domestic producer foray abroad is limited to the replacement market. To the successful in exports, Indian companies dont require foreign technical collaboration, as a fastener is not a very hi-tech item. What is required is a foreign tie up for marketing and after sales service. This is evident from the fact that recently the market leader, Sundaram fastener tied up with kamax were Rudolf Kellies, Germany for marketing. As India prepares to join the international economic mainstream, there will be many such tie-ups.

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COMPANY PROFILE
LPS Limited was promoted by Late Sh. Bimal Parsad Jain. LPS was incorporated as a Pvt. Limited Company on 27th Dec., 1968. It was converted into a Public Limited Company in August 1971. At present it is operating as LPS Limited.

LPS Plant-II is another step forward in progress of the company. The company has started with only one machine 3/8 Bolt Maker. Now it has wide range of machine producing a wide range of products. Today the company is the leading manufacturer of High Tenslile Fasterners in India. The Quality of the product is well accepted in the market so demand is growing very fast and to meet the demands and expand its production range the company is adding more production facilities. Besides LPS the other leading companies are Sundram Fastners of TVC group, Un-Brako and Guest Keen Williams. Recently Pandatogon Screws and Fasteners Limited has also been introduced. The installed capacity at present is about 8795 mt and annual turnover of the company is 74 crores approximately. The number of employee are 2000 which only 20 at the time of installation. Company has covered 23500 sq. yards. The screws, nuts and bolts range from 3mm to 24mm in diameter. The products are marked under name and style of LPS.

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BOARD OF DIRECTORS

L.K.Jain

Chairman & Managing Director

D.K.Jain V.K.Jain R.K.Jain S.D.Jain J.R.Desai M.M.Lal S.R.Singh S.K.Aggarwal M.H.P.Byramji B.S.Aggarwal

Vice Chairman & Managing Director Whole Time Director

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OUTLINE

1) Name of the Company 2) Founded on 3) Head Office & Factory

: : :

LAKSHMI PRECISION SCREWS LTD. March 10, 1972 46/1, Mile Stone Rohtak - 124 001 Haryana (India) Lalit Kumar Jain 978 Mill. INR (March 2004) ($19 Million) 1123 Mill. INR (March 2004) ($24 Million)

4) Chairman & Managing Director: 5) Total Assets :

7) Annual Sales

8) Employees

Production 372 55%

Office 90 14%

QC 48 8%

R&D 60 10%

Others 54 9%

Total 624 100%

9. Factory (Unit : m x m) SECTION w.e.f. LAND BUILDING PLANT I 1972-73 19,000 16,000 PLANTS PLANT II 1993-94 44,000 23,000 TOTAL

63,000 39,000

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COMPANY ORGANISATION

Board of Directors

Chairman & Managing Director

Quality Management Corporate Strategy

Marketing

R&D

Planning

Production

QA

General

D E V E L O P M E N T

S A L E S

D E V E L O P M E N T

L A B O R A T O R Y

C P E R N O T D R U A C L T I O N

P L A N N I N G

P L A N T I

P L A N T II

P U R C H A S E

F I N A N C E

H R D

E D P

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CHRONOLOGICAL HISTORY OF LPS

1959 Established Nav Bharat Industries as small parts manufacturer.

1972

Established Lakshmi Precision Screws Pvt Ltd as Socket Manufacturer

Head Screws

1973

Technical tie-up with the German firm M/s Richard Bergner.

1977

Acknowledged quality source of fastener.

1978

Technical tie-up with M/s Richard Bergner expires.

1983

Secured self certification status from FORD.

1984

Declared Public Limited Company.

1986

Secured self certification status from M/s Lakshmi Machine Works.

1988

Established as manufacturer-exporter.

1991

Received Regional Export Award from Engineering Export Promotion Council, (EEPC) India.

1992

Received Regional Export Award from EEPC for the second Consecutive year.

1993

Received Regional Export Award from EEPC for the third consecutive year.

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1993 1994

Established Plant - II. Received Employment Generation Award from Director of Industries, Haryana State.

1995

Accredited in Mechanical & Chemical Testing by A2LA, USA to meet Fastener Quality Act of US.

1995

Accredited in Mechanical Measurement, Mechanical & Chemical Testing by National Accreditation Board for Calibration & Testing Laboratories (NABL). Government of India.

1996

Certified to ISO-9002.

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MAIN PRODUCTS
Division Products Precision Cold Forming parts for Automobile Engine Parts ( Con Rod, Cylinder Studs, Counter Weights, Cylinder Head, Rocker Arm, Engine Mounting, Main Bearing etc.) Chasis Parts (Wheel Bolts, Wheel Hub Bolts & Nuts, Bolts & Nuts Axle Bolts/Pin, Flanged Bolts, Collar Bolt, Shock for Absorber Mounting Pins etc.) Automobiles Washer Assemblies Bolts The other critical & safety parts bolts Construction parts (Friction Grip) Bolts & Nuts for Agriculture Industry Bolts & Nuts for Industrial Machinery Cold formed parts for Automobile (Piston Pins, Switch Body, Ball Joints, Gear Blanks, Rocket Shaft, Ball Pins, Plunger etc.) Pins for Hydraulics & Pumps Bolt for Refrigeration Compressor Friction Grip Bolts & Nuts for Construction Industry Socket Head Cap Screw Low Head Socket Bolt Shoulder Bolt Button Head CSK Set Screws Standard Hex Wrench Keys Fasteners Hex Head Bolt Dovel Pin Nuts Friction Grip Bolts Track Shoe Bolts Stainless Steel Hex Head Stainless Steel Socket Head Cap Screws

FASTENERS

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MISSION OF LPS
To be a growth-oriented professional company promoting high standards of business ethics and producing best quality products thereby achieving international standards of excellence. To establish a strong R & D facility to fulfill the demands of the automotive industry as comprehensively as possible. To make each member of the company feel proud and empowered by fostering a culture of participation and innovation. To strive for reduction in defects and achieve 6 sigma and beyond so as to make quality a way of life in LPS. To reduce cycle time in all processes as a step towards over-all improvement. To provide prompt and excellent service to customers anywhere in the world. To maximize shareholders wealth.

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VISION OF LPS

Be recognized as the best and preferred supplier of national/international standard.

MOTTO: Total customer satisfaction and market leadership. TARGET: Annual growth rate of 30% out of which export should contribute up to 50% PLAN: Continuous up gradation of process and technology and development of new products.

FUNCTION: System oriented approach.

PEOPLE: The driving force behind it. IMAGE: To build up a high degree of customer confidence by sustaining international standards of excellence in product quality, performance and service. To fulfill the expectations which shareholders, employees, customers and country have from LPS.

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LPS PLANT II
Lakshmi precision screws ltd. is one of the leading manufacturers and suppliers of high tensile fasteners such as bolts, screws, nuts and similar parts for automobile and other industrial sectors. LPS ltd. was founded by shri Bimal Parsad Jain, in 1993, under the name of Nav Bharat industries. LPS plant 2 was established in 1993. The company has latest machines imported from abroad Japan, Germany and Taiwan. In addition, the company has heat treatment; automatic microprocessor controlled planting and phosphating plants. To update the both product and process requirements, the company has its own research and development cell which is well equipped with most modern chemical and psychical labs.

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OBJECTIVES OF LPS

BUSINESS MISSION: To achieve and maintain a leading position as supply of quality (precision) fasteners and to serve the national and international market in th3 field of fasteners.

GROWTH: To ensure a steady growth in business to as to fulfill national expectation and expand international operations.

PROFITABILITY: To provide a reasonable and adequate return on Capital employed primarily through improvements in operational efficiency, capacity utilization and producing & generating efficiency, capacity utilization and producing & generating adequate internal resource to finance the companys growth.

BUSINESS OF THE ORGANISATION Here the organization in a manufacturing concern. It deals in the domestic market and in the international market. The company produces the High quality products, which are well accepted in both domestic and foreign market. The Main market of LPS comprises of

1. DOMESTIC
Automotive Aviation Heavy & light machinery

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 Railways Machine tools, jigs& fixture Refrigerator & air conditioning

2.INTERNATIONAL

Australia Germany Hong Kong Japan Singapore Sweden U.K South Korea South Africa

Its elite list of customers include Telco, Eicher, Escorts, Hindustan motors, Kelvinator India Ltd., Voltas, Bajaj auto, Hero Honda, HMT, BHEL, Majestic auto, Bajaj tempo etc.

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MAIN MARKETS
A) DOMESTIC (USER INDUSTRIES) Automotive Aviation Heavy & Light Machinery Hydraulic/Pneumatic Pumps Machine Tools, Jigs & Fixtures Railways Refrigeration & Air Conditioning

B) INTERNATIONAL (COUNTRIES)

Australia Germany Holland Hongkong Japan Singapore South Africa South Korea Sweden Switzerland United Kingdom United States of America 34

CERTIFICATES

01. 02. 03. 04.

NABL ISO / TS 16949 ISO 14001 Volvo Global Supplier Certificate

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LAKSHMI PRECISION SCREWS LIMITED

HEAD OFFICE & FACTORY 46/1, MILE STONE, HISSAR ROAD, ROHTAK-124 001, HARYANA (INDIA) Tel.: +91-1262-248288/248289/249920/249921 Fax : +91-1262-248297/249922 Email.: corp_aff@lpsboi.com; mktg@lpsboi.com, BANGALORE OFFICE 305 A, Mittal Tower, 3rd floor, M G Road Bangalore - 560 001 (India) Phone : +91-80-25588587 Fax : +91-80-25597232 Email.: lpsbgl@bgl.vsnl..net.in MUMBAI OFFICE 153-A, Mittal Tower, Nariman Point Bombay - 400 021 (India) Phone : +91-22-22821918/22843864/22325061/22325062 Fax : +91-22-22834492 Email : Screws@bom2.vsnl.net. in KOLKATA OFFICE 8, Canning Street, 3rd floor, Room No.303, KOLKATA-700 001. Phone :+91-33-2210754 Fax : +91-33-4739087/ 2107269 / 2210754 Email: lpsl@cal3.vsnl.net.in NEW DELHI OFFICE 146, New Cycle Market, Jhandewalan Extn. New Delhi 110 055 (India) Phone : +91-11-23527642/23532135 Fax : +91-11-27532138 Email: lpsdel@ndb.vsnl.net.in

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REVIEW OF LITERATURE
Special Study on INAC's Funding Arrangements A five-year program-funded Funding Agreement (2005-06 2009-10) is currently in place through which INAC transfers annual grants to MK for itself and for the participating communities in each of the fiscal years covered by the agreement. Under this agreement, Canada pays an annual grant, adjusted annually for price and volume in accordance with a formula set out and subject to annual Parliamentary appropriations, to MK on behalf of itself and the participating communities. Funding is disbursed on a quarterly basis. The base amount of the agreement (2005-06) was a shade over $29 million and the average annual increase has been 6% for volume and price. The service population targeted by the funding agreement includes: 1. Primary, elementary and secondary education for all members resident on reserves in the participating communities; 2. Post-secondary education for all members whether or not resident on reserves; and 3. Primary, elementary and secondary education for all non-members resident on reserves in the participating communities. The funding transferred to MK each year covers the following MK and participating communities' expenditures: 1. Primary, elementary and secondary education, post-secondary support, Indian Studies Program, education facilities, education-related band support and tribal council support and band employees benefits; 2. Capital funding for major repairs and replacement of existing education facilities; 3. Operations and maintenance funding and classroom equipment for education facilities; and 4. Governance funding for MK and the participating communities.

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OBJECTIVES OF THE STUDY

o To know the funds requirements of the company. o To study the sources of funds of the company. o To study the financial management process of the company. o To analyze the cost utilization for the business purposes.

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SCOPE OF THE STUDY

It become quite difficult rather impossible to make judgment about the position of any business by way of analyze the cost statements of one year. To get a view about the business happenings, the past data of some years relating to the problem are studied and is determined. The present study covers a period of two years from March 2006 to March 2008. A large period may prove inconvenient while a shorter period would not give

desired results. A period of four to six years is to be considered to be the optimum one.

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RESEARCH METHODOLOGY
The procedure adopted for conducting the research requires a lot of attention as it has direct bearing on the accuracy, reliability and adequacy of results obtained. It is due to this reason that research methodology, which we used at the time of conducting, the research needs to be elaborated upon. It provides the researcher criteria by which we can decide which techniques and procedures will be applicable to a given problem. At the same times it helps the researcher to clearly state what course of action he selects at the time of conducting the research and why he select then so that they can be evaluated by others also.

RESEARCH PROBLEM: In research process, the first and foremost step happens to be that of selecting and properly defining a research problem. A research problem, in general refer to some difficulty which a researcher experiences in the context of either a theoretical or practical situation and wants to obtain a solution for the same. The present project has been undertaken to analyse the various type of budget i.e. sale budget variable/semi variable expenses budget, depreciation budget. Also to see whether, there are deviation between budget and actual if yes, than what cause behind this.

RESEARCH DESIGN: A research design is the arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy in procedure. In fact research is the conceptual structure within which research is conducted; it constitutes the blueprint for the collection, measurement and analysis of data.

Different research designs can be categorized as: 40

 Research design in case of exploratory research studies Research design in case of descriptive research studies Research design in case of diagnostic research studies Research design in case of hypothesis-testing research studies

The present study is Descriptive in nature. Descriptive research studies are those studies, which are concerned with describing the characteristics of a particular individual, or of a group. Studies concerned with specific predictions, with narration of facts and characteristics concerning individual, group or situations are all examples of descriptive research studies. The design in such studies must be rigid and not flexible and must focus attention on the following: Formulating the objective of study Selecting the sample (how much material will be needed) Collecting the data (where can the required data be found) Analyzing the data Reporting the findings

SAMPLE DESIGN: A sample design is a definite plan determined before any data are actually collected for obtaining a sample from a given population. The amount of research work is always limited by shortage of time and resources. Due to these limitations information should be such that it may be representative of entire universe. So only alternative is of sampling. In present project a sample size of past two years (2010-2011 and 2011-2012) is taken to study the problem. It has been done due to the time constraint.

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DATA COLLECTION: In dealing with any real life problem it is often found that data at hand are inadequate, and hence, it becomes necessary to collect data that are appropriate. The task of data collection begins after a research problem has been defined and research design chalked out. While deciding about the method of data collection to be used for the study, the researcher should keep in mind two types of data viz., primary and secondary. In present study we have made use of secondary data collected from accounts of LPS.

DATA ANALYSIS AND INTERPRETATION 42

Q.1 Are you aware of the companys financial targets?

Yes 95%

No 5%

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No

INTERPRETATION: Most of the employees aware of the company financial targets. In the very beginning all the financial targets which are set by the Co. they are conveyed to the respective departments and the same are conveyed to the concerned lower grade employees so that the from the very beginning employees are motivated toward the achievement of the target of Co.

Q.2 How does it impact your company?

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Effect on manpower 40%

Effect on ongoing project 30%

Effect of turnover 30%

45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Effect on manpower Effect on ongoing project Effect of turnover

INTERPRETATION: Man power is the most effected object-: As the main asset of the Co. is its manpower so this is the most effective object toward completion of the work is literate and efficient man power because only if the man power is effective then all other resources can be utilized in efficient way otherwise if we put the technology at its best and inefficient man power then the machine can not be utilized at its best

Q.3 what are the main Resources of Finance?

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Internal 35%

External 65%

70% 60% 50% 40% 30% 20% 10% 0% Internal External

INTERPRETATION: External sources are the main resources of the finance-: As working of the Co. is based on the external market so there is always a scope of fluctuation of the market based on the external forces so to avoid and to cater this fluctuation Co. has decided to keep external source as main source of finance such as financial instutions i.e. Banks

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Q.4 Techniques for cost measurement?

Standard costing 45%

Budgetary costing 25%

Marginal costing 30%

50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Standard costing Budgetary costing Marginal costing

INTERPRETATION: Standard costing is the main techniques used .In Co. for costing standard costing method is the main method for costing as Co. is well established so Co. is considering actual cost method for costing purpose in place of other techniques of costing i.e. budgetary or marginal costing

Q. 5 From which type of agency cost is incurred by the company?

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Government 60%

Private 40%

70% 60% 50% 40% 30% 20% 10% 0% Government Private

INTERPRETATION: Govt. agencies are the main sources of finance being a brand Co. in its segment Govt. have full confidence in Co. policy hence govt. financial institutions are main source of funds . in addition to that as co. is having overseas business then to keep confidence of overseas customer Co. is also preferring Govt. institutes. For funding

Q.6 what are the main sources of income of the company?

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Application development 60%

Product engineering

SAP consulting

Share point services

20%

10%

10%

70% 60% 50% 40% 30% 20% 10% 0% Application development Product engineering SAP consulting Share point services

INTERPRETATION: Application Development is the main sources of income, as Co. is already having long journey track of success so at present Co. is preferring application development as main line of action so that the complete solution can be given to customer in place of just supplying the items.

Q.7 Why do you prefer Govt. agencies to raise the funds?

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Low rate of interest 75%

Low processing charges 10%

Less time consuming 15%

80% 70% 60% 50% 40% 30% 20% 10% 0% Low rate of interest Low processing charges Less time consuming

INTERPRETATION: Low rate of interest is the main reason to adopt the govt. agencies.As compared to the private institutions which generally tries to take maximum margin in place of considering best co-operation to client Co. has decided to keep Govt institutions as main source of raising funds.

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Q.8 Are you satisfied with the current financial institution?

Yes 80%

No 20%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No

INTERPRETATION: Most of the people are satisfied with the current financial agencies.

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Q.9 Are you satisfied with the techniques used for cost measurement?

Yes 80%

No 20%

90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yes No

INTERPRETATION: Most of the people are satisfied with the cost measurement technique. Most of the techniques being followed for costing as relevant and satisfactory enough to meet the goal of Co.

FINDINGS OF THE STUDY 51

1. Companies raise the more of its funds from the Govt. Agencies. 2. Standard costing is the method used in the costing measurement. 3. More of the employees satisfied with the cost measurement techniques. 4. External sources are the main sources to raise the funds. 5. Manpower is the most affected by the costing.

SUGGESTIONS AND RECOMMENDATIONS 52

 Company should have control over the cost of sale. To do this Company should go through the cost effective management. They should control over the fixed expenses. Because in every year actual value founded more than budgeted value and there is high deviation between actual & budgeted. Motivation level of casual labour can be boosted up by offering them the better wages overtime and attractive and other facilities Low level management should be qualified and experienced Give the proper guide line to the Accountants Company should adopt the reliable sources to raise funds. Cost measurement techniques should be adopt carefully. Company should forecast the capital required and cost of goods to make the more profits.

LIMITATIONS OF THE STUDY 53

Although every effort has been made to collect the relevant information through the sources available, still relevant and adequate information could not be gathered. The reasons are as follows: Time factor: The time duration could not provide ample opportunities and study details. Sample size: Sample size (50 employees) may be small so that results may not be realistic. Co-operation: employees are not willing to share their views.

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BIBLIOGRAPHY
BOOKS: Kothari C.R., Research Methodology, New Age International Publication, New Delhi, 2nd Edition (2004). Finance Management Magazine. Management of Indian Financial Institution Prof. R.M. Srivastav

WEB SITE: www.financewikipedia.com www.whereincity.com/Aboutlps/Careers.aspx www.chetanasinterview.com/categories/funds/ www.whereincity.com/yellow-pages/38403.html SEARCH ENGINE: www.google.com

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QUESTIONNAIRE
Q.1 Are you aware of the companys financial targets? o YES o NO

Q.2 How does it impact your company? o EFFECT ON MANPOWER o EFFECT ON ONGOING PROJECT o EFFECT ON TURNOVER

Q.3 what are the main Resources of Finance? o INTERNAL o EXTERNAL

Q.4 Techniques for cost measurement? o STANDARD COSTING o BUDGETARY COSTING o MARGINAL COSTING

Q. 5 From which type of agency cost is incurred by the company? o GOVERNMENT o PRIVATE

Q.6 what are the main sources of income of the company? o APPLICATION DEVELOPMENT o PRODUCT ENGINEERING o SAP CONSULTING o SHARE POINT SERVICES

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Q.7 Why do you prefer Govt. agencies to raise the funds? o LOW RATE OF INTEREST o LOW PROCESSING CHARGES o LESS TIME CONSUMING Q.8 Are you satisfied with the current financial institution? o YES o NO Q.9 Are you satisfied with the techniques used for cost measurement? o YES o NO

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