Murudeshwar Ceramics Ltd.-0461

A STUDY ON

THE ORGANISATIONAL STRUCTURE OF MCL CONDUCTED AT

Submitted in Partial Fulfillment of the requirement of Third Semester of the Post Graduate Program in MP Birla Institute of Management, Bangalore

UNDER THE GUIDANCE OF

EXTERNAL GUIDE Mr. Habib-ur-Rahaman AGM (Bangalore) MCL

INTERNAL GUIDE Dr.N.S.Vishwanath Faculty MPBIM SUBMITTED BY

ABHIJIT.SHETTY

Reg.No: 04XQCM6001

MP BIRLA INSTITUTE OF MANAGEMENT RACE COURSE ROAD, BANGALORE-560 001 2005-06

MPBIM

1

DECLARATION I here by declare that this Internship report entitled “ORGANISATION STRUCTURE OF MCL” is prepared during the academic year 2005-2006 under the guidance of Dr.N.S.Vishwanath (faculty, MP Birla Institute of Management). I also declare that this project report has not been submitted to any other University / Institute for

the award of any other degree, diploma, fellowship or other similar

title or prizes.

Date : Place- Bangalore

MPBIM

ABHIJIT.SHETTY (O4XQCM6001)

2

ACKNOWLEDGEMENT At the successful completion of my internship study I would like to extend my gratitude to all those without whose valuable guidance and support it would have not been possible. With all sincerity and respect, I would like to express my gratitude to Dr. N S Malavalli(Principal) for giving an opportunity to have Corporate Exposure and Learning at MURUDESHWAR CERAMICS LIMITED. I would like to express my sincere thanks to DR.N.S.Vishwanath(internal guide) for helping me in various aspects of the study. I am deeply indebted to M.R.Habib–Ur-Rahman (AGM, MCL) having given me an opportunity and guidance, invaluable help and cooperation to successfully complete the project. I am grateful to Harish Kumar Shetty (project executive, MCL) for his help and cooperation. I am very thankful to the management and staff of Murudeshwar Ceramics limited for their friendly nature and invaluable cooperation during my study.

MPBIM

3

EXECUTIVE SUMMARY The internship study is done at Murudeshwar ceramics limited Bangalore; the main objective behind the study is to know the functioning of various departments and a microscopic study in the finance department of the organization. MCL commenced its business in the year 1987 promoted by R.N.shetty a noted civil contractor in Karnataka. Its main branch is situated in Hubli(Karnataka state) and has several show rooms all over India. MCL is having four functional departments viz Finance, production, marketing, and R&D. All the departments are handled by qualified professionals who are answerable to the chair man; they work as per the mission of the company. All the departments work with great coordination with definite plans and policies laid down by the top management. I did my microscopic study in the finance department; here the main objective was to know the financial position of the company by way of ratio analysis. It revealed that MCL is a very sound company with a very effective utilization of its financial resources.

MPBIM

4

CONTENTS Sl.No

Particulars

Page no.

1.

Objectives of the study

1

2.

Product profile

2

3.

Industry profile

5

4.

Profile of R N Shetty

10

5.

Company profile

15

6.

Production Department

30

7.

Marketing Department

33

8.

Research & Development Department

37

9.

Finance Department

39

10.

SWOT Analysis

56

11.

Conclusion & Recommendations

57

12.

Bibliography

59

MPBIM

5

OBJECTIVES OF INTERNSHIP STUDY The internship study conducted at MCL was a small effort to have the much needed corporate exposure and to know the real applications of management principles. The following are the main objectives of the internship study: To gain first hand experience from the industry.


To integrate theoretical concepts with practical experience.


To make assessment of the organization in the industry.


To assimilate and understand the functions of each departments.


To do a microscopic study in the finance department.


To analyze the firms financial position.

MPBIM

6

1 PRODUCT PROFILE

What are vitrified tiles? Vitrified tiles are ceramic tiles with high percentage of vitrification and less amount of water absorption; vitrification is nothing but a development of glass phase inside the tile during firing process. This is mainly due to melting of some constituent in the body Difference between vitrified tiles and glazed tiles; In ceramic tiles percentage of vitrification is less compared to vitrified tiles and capacity of water absorption is more (4-6%). Due to higher heat, to avoid this water absorption top surface of glazed tiles is given a glossy coat. This glossy coat is also called glaze. Vitrified tile is homogeneous body, it does not have a separate coat of glass, and also water absorption is as less as 0.5% in case of vitrified tiles.

PROPERTIES OF VITRIFIED TILES: The following are some important properties of vitrified tiles: 1.

Hardness: it is the resistance of a material to an indentation by any other

material. vitrified tiles have hardness of 7-8 MOH(a standard tool-MOH hardness value) 2.

Strength: it is a measure of the load a material can bear without formation of

a crack or permanent deformation. Vitrified tiles have strengths greater than 300 kg/mm2 3.

Zero water absorption property: Since vitrified tiles have high percentage of

vitrification they are less porous and hence they have less percentage of water absorption. Water absorption test is conducted by soaking a tile in the water. The percentage increase of mass of tile is the percentage of water absorption. In case of vitrified tiles water absorption is less than 0.5 percent

MPBIM

7

4.

Abrasion resistance: since vitrified tiles have MOH’s hardness value of 7-8,

its very difficult to abrade it in normal condition. Although any harder material such as topaz or diamond can abrade it. 5.

Acid resistance: Vitrified tiles have got resistance against wide range

chemicals including acids and alkalis except hydro fluoric acid 6.

Stain resistance: since vitrified tiles are non porous they have a very good

resistance against stains. Stains may be formed on the surface due to micro pores but they can be removed using acids or alkalis, unless stains are of ink or marker which are hard top remove Uses of vitrified tiles: Vitrified tiles can be used for the following purposes: 1.

Residential

2.

Industrial

3.

Commercial

4.

Decorative

In practice vitrified tiles are mostly used in commercial complexes and offices. In case of residential complexes vitrified tiles are used at the entrances and passage ways, in case of commercial complexes vitrified tiles are used for the high traffic areas such as lobbies, passage ways etc. this also can be used as industrial flooring as they are acid resistant

DIAMOND TILE-A NEW EMERGING PRODUCT OF MCL The company started manufacturing synthetic granite in the brand name Naveen Diamond tile in the year 1994 Jan with the cost of Rs.14 crores. The manufacturing process of this new synthetic granite (vitrified porcelain tile) is the same as ceramic tiles. Calibrating the surface with diamond and carbide abrasive tools does the polishing. This operation removes the hard part, the surface of the tiles and opens the micro pores. MPBIM

8

This was done as a part of the diversification program.

Features of Naveen Diamontile: Hardness- Diamontile are fully vitrified porcelain tile, it has 8 MOH’s scale of hardness. (Even granites shows 6 MHO’s scale which seems to be soft) Look- Diamontile looks almost same as natural granite The different sizes available are: Naveen Diamontile are available in following sizes 16 x16 inches 20 x 20 inches 24 x 24 inches Technical specifications of Naveen Diamontile Tiles: Sl. No.

Parameters

Specification

1

Water absorption

0.5% max

2

Abrasion resistance

Class IV (PET)

3

Chemical resistance

No visible alteration except hydrofluoric acid and it’s components

4

Crushing strength

> 350kg /cm2

5

Warpage

± 0.5%

6

Thickness

8.5mm ± 5%

7

Size

Uncut 292, cut 284

8

Size variation

Uncut ± 2mm, cut ± 1.0mm

MPBIM

9

2. INDUSTRY PROFILE

What is ceramic tile? The word ceramic originates from Greek word kermaic which means the art of pottery. In India pottery manufacturing was started in early 300 BC the second world war came as a boon for the ceramic tile industry in India, during the war period certain metal and metallic utensils were banned and hence the production of ceramic products was geared up to meet the demand of war hospitals. Clay is the general name for the earth that forms a paste when mixed with appropriate amount of water and that hardens when heated moist clay is composed of silica and alumina while kaolin’s are their purest forms pressing higher grades of clay after blending them with flint, feldspar and talk forms wall and floor tiles. Ceramic tiles are broadly classified into wall and floor tiles with sub classification of Glazed and Matt finish tiles. OVERVIEW: Tiles have been used as surfacing materials for thousands of years because of their beauty and durability. They have been produced in most of the countries in the world because of the abundance of raw materials and simplicity in the manufacturing technology. These two factors together with the employment generating capacity of this labour intensive industry have attracted the interest of developing countries.

ORIGIN IN INDIA: When the government of India banned the import of ceramic tiles in 1958 the production of glazed tile began on a small note in 1985 spartek ceramics limited stormed the market with the mat and semi-mat finished tiles which were manufactured using the single firing process. MPBIM

10

Two companies viz. H&RJOHNSON INDIA limited and SOMANI PILKINGTON limited had the lion share to them which was predominantly glazed tile.

Changing tastes and preferences of customers: Many market surveys have indicated that in case of wall and floor covering consumer preference are shifting away from textile, wood, stone etc to tiles. In any house the tiles have not only confined to kichens and bathroom but it has now moved into the halls corridor and in the balconies, floors once neglected are getting attention its utility as industrial flooring increasingly appreciated. The tile may be appear to be a costlier surfacing material initially but if the cost is spread over the full life cycle of the building it becomes cost competitive. Like other consumer products preferences and fashion on ceramics tiles also keeps slowly changing over a period of time presently the customer preferences have been changed in terms of colours, designs, shades, etc.. Present market scenario of Indian Tile Industry Ceramic industry in India is about 100 years old. It comprises ceramic tiles, sanitary wear and crockery items. Ceramic products are manufactured both in the large and small sectors with wide variation in type, size, quality and standard. India ranks 7th in the world in terms of production of ceramic tiles and produced 200 million square meters of ceramic tiles out of a global production of 6400 million square meters during 2003-2004. State of the art ceramic goods are being manufactured in the and the technology adopted by the Indian ceramic industry is of international standard.

MPBIM

11

CAPACITY AND PRODUCTION There are, at present, 16 units in the organized sector with an installed capacity of21 lakh MT. It accounts for about 2.5% of world ceramic tile production Ceramic tiles industry has been growing at about 12% per annum. In India, per capita consumption of ceramic tile is 0.15 sq. mt per annum compared with 2 sq. mt per annum in China and 5-6 sq mt Per annum in European countries. With the growth in the housing sector the demand of ceramic is expected to increase. Indian tiles are competitive in the international market. These are exported to East and West Asian countries. The exports during 2003-04 were about Rs. 180 crore. Sanitary ware is manufactured both in the large and small sector with variations in type, range, quality and standard. At present there are 7 units with capacity of 86,500 ton per anum and, there are about 200 plants with a capacity of 50,000 ton per annum in small scale sector. The industry has a turn over of Rs. 400-500 crore. This industry has been growing at the rate of about 5% per annum during the last 2 years. There is significant export potential for sanitary ware. These are presently being exported to East and West Asia, Africa, Europe and Canada. The exports were of the order of Rs.60 crore during 2003-04. Pottery ware signifying crockery and tableware are produced both in the large scale and small-scale sector. There are 16 units in the organized sector with a total installed capacity of 43,000 ton per annum. In the small-scale sector, there are about 1200 plants with a capacity of 3 lakh tonnes per annum. Majority of the production of ceramics tableware is of bone china and stoneware. This industry in India is highly labour intensive while in USA, UK, Japan and other countries there is full automation. Quality of finished products, design and shapes in India are still below international standards. The equipments are old and need to be updated to meet international standard. The export of pottery ware during 2003-04 was of the order of Rs. 85 crore. The industry is de-licensed and classified as high priority for industrial use. Tableware and allied items namely, dinner sets, tea sets, cups and saucers, jars, etc in stoneware, semi-vitreous ware and earthen ware are reserved for the SSI Sector. State of the art ceramic goods are being manufactured in the country and the MPBIM

12

technology adopted by the Indian Ceramic Industry is of international standard. The scope of modern ceramics is much wider today. During last two decades, there has been a phenomenal growth in the field of technical ceramics to meet specific demands of industry such as high alumina ceramics, cutting tools and other structural ceramics.

MAJOR PLAYERS IN THE INDUSTRY: The rupees 400 crore ceramic tiles market has 7 leading players with Hand R Johnson India limited having a dominant presence over 25 % of the market share. REGIONAL DISTRIBUTION: The companies with their major market presence are as follows: Companies

Dominant regional presence

H&R Johnson India limited

North, South and West

Somani pilkington limited

North, North-east and Mumbai

Kajaria ceramics limited

North and Mumbai

Murudeshwar ceramics limited

South and Mumbai

Bell ceramics limited

West

Spartex ceramics limited

South and Mumbai

Regency

South and Mumbai

MPBIM

13

Pie chart showing market share of different leading ceramic tile companies in the Indian market.

8%

3%

6% 25%

9%

10%

15% 10%

H.R.Johnson Bell SSI Units

MPBIM

14%

Murudeshwar Kajaria Regency

Spurtek SPL Others

14

3. PROFILE OF R N SHETTY IF you happen to travel on the National Highway No 17 from Mangalore to Karwar, about 30 kms from Bhatkal, a tall arch attracts your attention. About 2 kms from the arch you will find a picturesque island spread in 18 acres in the Arabian sea, which is home to lord Shiva’s ‘atmalinga’. The place is called Murudeshwar. The temple built in the Dravidian architectural style, which was not known to many till early 1980s, is today attracting large number of pilgrims and tourists from across the country, thanks to Mr R N Shetty, an industrialist from north Karnataka. It was this person who has given the island its present shape and responsible for making it the most desired pilgrim centre in coastal Karnataka. But Murudeshwar will no longer remain just another pilgrim centre for the people of this country, as it is emerging as a popular tourist and recreation centre in the days to come. It will soon get an international standard Golf course and a private beach to attract the tourists from abroad. R N Shetty, who celebrated his 75th birthday on August 15, 2003, is not just known for renovating this beautiful island temple, but also recognized as the visionary educationist, industrialist and philanthropist. He is among those who have the courage to believe in their dreams and translate them into reality. Humble beginning Rama Nagappa Shetty was born on August 15, 1928, at Murudeshwar in Uttara Kannada district in a family of agriculturists. His father was the administrator of Murudeshwara temple. After completing high school education, Mr Shetty started his career as a civil contractor in Sirsi. In 1961, he formed R N Shetty & Company, a partnership firm. During the next four years, the company took up construction of three major projects building bridges on Honnavar-Bangalore road. In 1966, he moved out of his native district and began operations from Hubli, a major city in northern Karnataka. In 1961, he formed R N Shetty & Company, a partnership firm. During the next four years, the company took up construction of three major projects building bridges on MPBIM

15

Honnavar-Bangalore road. In 1966, he moved out of his native district and began operations from Hubli, a major city in northern Karnataka. In 1967, he formed a joint venture company along with seven other civil contractors and named it Naveen Mechanized Construction Company Private Limited. The company bid for construction of Hidkal dam in Belgaum district. However, it did not live for long suffering huge financial losses. In order to keep it alive other stakeholders in the company offered Mr Shetty their share. Next year, he took over the company. In the next eight years, Mr Shetty undertook several projects that nursed the company back to good health. Major achievements Both these companies have executed several major irrigation works and hydropower projects including construction of dams, canals, tunnels, bridges and buildings. Major projects include the Hidkal, Tattihalla, Supa, Gerusoppa dams, Rajankollur, Gundalgera tunnels, 18 tunnels for the Konkan Railway Corporation Limited and canals for the Upper Krishna Project. It was during early 1970s that R N Shetty dreamt about making his entry into hotel business. In 1975, he made his dream debut into hospitality business, by forming Naveen Hotels Limited. A five-star hotel was constructed to mark the group's foray into hospitality business in Bangalore which was leased out to Taj Group. It is presently known as Taj Residency. Further, the hotels division constructed two more hotel properties in the State, one each at Hubli and a resort at Murudeshwar. Hotel Naveen is the star attraction in Hubli and RNS Yatrinivas and Naveen Beach Resort at Murudeshwar. Both these properties are managed by R N Shetty Group. While Mr Shetty made it big in construction he always had a desire to set up a manufacturing unit that will provide jobs to the local people. It began with the establishment of a 'Mangalore' tile unit. The year 1977 witnessed the birth of Murudeshwar Tiles Private Limited, a 'Mangalore' tile manufacturing unit. The unit with a capacity of 40,000 tiles per day is one of the largest Mangalore-tile units in the coastal region.

MPBIM

16

In 1981, Mr Shetty set up Naveen Structural and Engineering Co Pvt Ltd, which specializes in skilled fabrication works, specific to construction industry. Their workshop in Hubli is highly sophisticated, and contains state-of-the-art equipment and machinery. It manufactures shuttering silos, crest gates and many other specialized structures in the past. However, the group'smost prestigious industrial project took shape in 1987, when R N Shetty forayed into the manufacture of glazed ceramic tiles by setting up Murudeshwar Ceramics Limited (MCL), the only listed company in the group. Located at Hubli, MCL is one of the leading manufacturers of ceramic and vitrified porcelain floor and wall tiles in India. It also manufactures natural granites. MCL is now in the process of setting up its second plant at Karaikal near Pondichery at a cost of Rs 40 crore to expand its capacity. The company reported Rs 4 crore net profit on a turnover zof Rs 138 crore for the year 2002-03 and hopes to touch a total revenue of Rs 180 crore in t In 1993, R N Shetty ventured into power sector with the setting up Murudeshwar Power Corporation Limited. The company has successfully developed and commissioned a mini hydel power project of 11.6 MW at Narayanpur Left Bank Canal in Bijapur district in 1999. The group has also taken the dealership of Maruti Udyog Limited and has opened showrooms at Hubli, Bangalore (Yashwantpur and Hosur road) and Murudeshwar. One of its Bangalore showrooms is in fact the biggest in the country and has been rated as Maruti's No 1 dealer in India for the last three years. His company has recently been awarded the Belgaum Bypass and Dharwad-Belgaum roadworks projects by National Highways Authority of India and roadwork's at Maski in Raichur district by Karnataka State Highways Improvement Project. Attracting tourists With Murudeshwar attracting large number of pilgrims every day (around 1,000), the R N Shetty Group is now in the process of developing the place into an integrated centre for religious, tourist and sports centre. It has recently acquired 30 acres of land adjacent to its own 20 acre land and developing international standard Golf course at an investment of about Rs 5 crore, which will be ready by next year.It has also acquired land in Karwar for setting up of a 5-star hotel complex with an estimated investment of Rs 15 crore. The project was cleared during the Global MPBIM

17

Investors Meet by the State government and the environmental ministry clearance is currently awaited. Family and outside R N Shetty has seven children, four daughters and three sons. Each of three sons has been given the responsibility of running the group' s three main business divisions. Mr Shetty is the Chairman of the group. However, Mr Shetty does not share the group's total turnover. But money is not all for Mr Shetty. He works for the development of the society, a deeply religious person and a philanthropist by nature, he devotes a great deal of time and money for charity projects. His contributions have revived several temples, educational institutions and community service projects in Karnataka and elsewhere. According to Mr R N Shetty "Egoistic person won't achieve much in life. If you want to achieve something in life you need to be simple, low-profile and committed". The R N Shetty Trust, a non-profit institution has been set up to help the needy students and educational institutions. Several colleges including R N Shetty Rural Polytechnic, R N Shetty Pre-University College and Murudeshwar, and R N Shetty College of Hotel Management and Catering Technology at Hubli is being run by the Trust. In 2001, the Trust established RNS Institute of Technology in Bangalore. The institute offers bachelor's degree in Electronics & Communication, Computer Science & Engineering, Information Science & Engineering, and Instrumentation Technology. This year, MCA course has also been introduced. R N Shetty has also been instrumental in the rebirth of the Shri Mahatobar Murudeshwar Temple at Murudeshwar. A recent attraction is the Lord Shiva idol erected beside the temple, which is 123 feet tall and is the tallest Shiva idol in the world. This pilgrimage centre has a modern guest house, which is centrally

MPBIM

18

airconditioned. The temple administration has also made arrangements for boating around the island to attract tourists. The Trust has also built guest houses at Kollur, a famous pilgrimage centre and a 46room school for the Bunts' Sangha at Bangalore. He has also donated funds for the construction of a sports stadium at Dharwad and Kalyana Mantaps at Hubli, Murudeshwar, Kundapur and Belgaum. Under Rajiv Gandhi Rural Water Supply Scheme, R N Shetty has contributed 25 per cent of the project cost of Rs 4.5 crore to provide water to Murudeshwar.

The recent addition to his social service is the construction of a 100-bed charity hospital at Murudeshwar. Today, the group is representative of the man behind it. Strong roots, diverse pursuits and each one a success story in itself.

MPBIM

19

4. COMPANY PROFILE

ESTABLISHMENT OF MCL Muirudshwar Ceramics Ltd., (MCL) is a joint sector undertaking promoted by Karnataka State Industrial and investment development corporation (KSTIDC) and Mr. R.N.Shetty an industrialist and builder of repute in Karnataka. The project costing Rs.13.45 crores was funded by equity capital of Rs.4.5 crores and term loans of Rs.8.95 crores. Presently Mr. R.N.Shetty group holds 67% equity shares, 10% is held by financial institutions and about 3500 local resident shared holders hold balance 28%. MCL is one of the emerging companies in the field of tile manufacturing. It is always ahead in the race of competitors. The initial project was 12.5 crores of ceramic tiles at its plant located at krishnapur village near Hubli (Karnataka) having completed the project implementation work with in a record period of 14 months. The company is being led by R.N.Shetty first generation entrepreneur having other business interests in sector such as hotels, irrigations works, sea foods and civil constructing industry. The MCL is having good position in production of tiles. Almost an its machinery has been imported from SACMI-IMOLA, Italy with technical know-how. The company has recently received ISO-9002 certificate from TUV-CERT-GERMANY Ltd. With the strong will power of management, hard and dedicated work of over 2000 employees with latest know-how in the industry and with fast growing construction industry in flooring segment and aesthetic appeal of vitrified tile has placed the company as the major player in vitrified tile. Naveen diamontile of Murudeshwar ceramic ltd are manufactured utilizing state of the art technology and the finest quality raw materials. Each step in the process is continuously and minutely monitored, resulting in quality that speaks for itself with strong market share and bright future in coming days. MPBIM

20

Murudeshwar ceramics ltd manufactures ceramic glazed and unglazed floor tiles and vitrified porcelain tiles under the brand name NAVEEN CERAMICS TILES a popular brand both in domestic and international market. During the first year of operation itself MCL achieved a sales turnover of Rs.9.64 crores and batched up a net profit of Rs.42 lakhs. Naveen ceramics ltd are also established a separate identity along side the established names like spartek, Johnson, bell and euro. Encouraged by the good response from the market, the company looks an expansion project in 1990 costing Rs.8 crores to double the installed capacity. MCL started manufacturing tiles in plain flamed tiles in the beginning and has introduced newer shades and designs regularly in every six months. MCL was the first to introduce tines weave and whispering shades of tiles in 1988. Naveen ceramics tiles are today available in over 150 colors and shades and Naveen ceramic tiles offer widest choice to the customers. MCL has a full hedged research and development setup and is the only recognized in housed research and development setup, and is the only recognized R & D unit among the ceramic tiles plants in India.

MPBIM

21

VISION AND MISSION OF MCL Vision statement of the company: “To be the largest producer and seller in the flooring market, with a wide product range by installing latest methods of product on for the only aim of customer satisfaction.”

Mission statement of the company: “To introduce all new flooring concepts in the market with more focus on R & D and meeting the customer requirement by expanding is the production capacity every year”.

MPBIM

22

R.N.SHETTY GROUP OF COMPANIES MCL is the flagship company of the R.N. Shetty Group. Other associated companies within the group are as follows:

SHRI MURUDESHWAR TILES PVT. LTD: The factory is located in Ivlurudeshwar based in North Canara District. It was set up in the year1977 it manufactures Mangalore Roofing Tiles. The present production capacity is 40,000 per day.

NAVEEN HOTELS Naveen Hotels was incorporated in the year 1975.It has constructed a fine star hotel in Bangalore, which is presently leased to the "Taj Group of Hotels". Its latest venture is 'Hotel Naveen' on the banks of the enchanting Unkal Lake in Hubli.

MURUDESHW AR POWER CORPORATION LIMITED The company was incorporated in 1993 and has constructed a 12MW capacity at the Narayanpur Dam Canal and has commenced from 1999 December. The bulb turbines are being supplied by BHEL

RNS MOTORS RNS Motor is the division of R.N. Shetty & Company. They are authorized dealers for Maruthi Udyog Limited at Hubli and Bangalore. The territories they cover are the districts of Belgaum, Bellary, Bidar, Bijapur, Chitradurga, Dharwad, Gulbarga, North Canara, Raichur and Shimoga.

MPBIM

23

R.N.S. TRUST The RNS Trust IS primarily responsible for the various amenities provided pilgrims and tourists at the Holy Town Murudeshwar. The Trust has constructed many Guest Houses, a dormitory and marriage hall and also contributed generously to several temples, educational community service projects in Karnataka.

NAVEEN STRUCTURAL AND ENGINEERING(P) LTD. This company was incorporated in 1981.They specialize in skilled fabrication work specific to the construction industry. The work shop in Hubli is highly sophisticated and contains state of the art equipment and machines. They have manufactured Crest Gates and many other specialized structures in the past

NAVEEN MACHINED CONSTRUCTION CO, PVT. L TD In the year 1967 when Mr. R.N. Shetty took over the Company, it was suffering huge losses. In the next eight years he turned it around by successfully executing several major works under the Malaprabha, Ghataprabha and Upper Krishna Project. In 1974, the Company diversified in to the civil works for the power projects. It has undertaken Karnataka Power Corporation. Projects and the intake structure and undersigned power house at Hosangadi for Varahi Hydel Scheme.

R.N. SHETTY & COMPANY The company was founded in 1961, on the partnership basis. The firm marketed the beginning of the R.N. Shetty Group. The civil projects have executed represent some of the finest in the country. The company is specialist in tunnels, irrigation projects, bridges, power projects, dams, roads, buildings and many more.

MPBIM

24

M.C.L.CLINTILE LIST

IT COMPANIES TECHNO PARK TRIVENDRUM 

INFORMATION TECHNOLOGY PARK LTD, BANGALORE 

WIPRO INFOTECH HYDERABAD 

SUVI INFORMATIONS SYSTEM INDORE 

WIPRO INFOTECH BANGALORE 

INFOSYS TECHNOLOGY LTD BANGALORE 

BANKS & INSTITUTIONS ICICI BANK COIMBATORE, HYDERABAD 

HDFC BANK, CHENNAI 

HDFC BANK, MUMBAI 

CORORATION BANK ALL OVER INDIA PROJECT 

ICICI ALL OVER INDIA PROJECTS 

VYSYA BANK ALL OVER INDIA PROJECT 

SYNDICATE BANK ALL OVER INDIA PROJECT 

CORPORATES LAXMI MACHINE WORKS, COIMBATORE 

TAFE LTD, CHENNAI 

IOC LTD - NOIDA (UP) -PANIPAT HARYANA 



FOR U SERVICES (P) LTD LUCKNOW

MPBIM

25

NAVEEN ORTHOPEDIC AND TRAUMA HOSPITAL SURATH 

ARABINDO PHARMA LTD 

TELEPHANTHI BHAWAN, SURATH 

PROCTOR AND GAMBLE, GOA 

JINDAL VIJAYANAGAR STEEL PLANT, BELLARY 

DYNAMIC DIARY LTD, BARAMATI (MAHARASTRA) 

INDIAN OIL CORPORATION NOIDA 

RELIANCE PROPERTIES LTD BOMBAY AND JAMNAGAR 

GANNON AND DUNCURLAY LTD BOMBAY 

LARSON AND TURBO LTD BOMBAY 

LARSON AND TURBO LTD HYDERABAD 

LARSON AND TURBO LTD BHOPAL 

LARSON AND TURBO LTD KANNUR -KERALA 

AUTOMOTIV E MANUFACTURE LTD MUMBAI 

LEADING EDGE SYSTEMS LTD MUMBAI 

COSME PHARMA LTD GOA 

HINDUSTAN LEVER LTD CALCUTTA, BOMBAY, B'LORE, DELHI 

MERLONI TERMO SANITARY INDIA LTD POONA 

IOC PANIPAT 

L AND T INFO CITY HYDERABAD 

BUILDERS & CONTRACTORS RAHEJA PROPERTIES DEVELOPERS BANGALORE 

TWIN CONSTRUCTIONS LTD BOMBAY 



VERDHAMAN CONSTRUCTION LIMITED, INDORE

MPBIM

26

VEDIOCON PROPERTIES, NEW DELHI 

EVERSHINE CIVIL WORKS PVT. LTD., NEW BOMBAY 

COURIEN BUILDERS, ERNAKULAM 

EXPRESS CONSTRUCTION LIMITED, ERNAKULAM 

URC CONSTRUCTION, BANGALORE 

JAI ARTS, MUMBAI 

KALASAGAR CONSTRUCTION, MUMBAI 

VANDIT DEVELOPERS INDIA PVT. LTD PUNE 

MS CONSTRUCTION MUMBAI 

AHMED NOORAHMED WASAIWALA & OTHERS, MUMBAI 

RAMESH BUILDERS, PUNE 

DEECAY CONSTRUCTION ENGGS. & CONTRACTORS, MUMBAI 

THE GREAT EASTERN SHIPPING CO. LTD., MUMBAI 

JESPAR INDUSTRIES, HYDERABAD 

BUILDWELL MUMBAI 

MAYANKA ENTERPRISES, MUMBAI 

SHIVOYA ASSOCIATES, MUMBAI 

LAXMI ENTERPRISES, PUNE 

R.C. CORPORATION, SURAT 

TECHNO ART INTERIORS, MUMBAI 

D K PATEL ENTERPISES, MUMBAI 

JAYESH BUILDERS, MUMBAI 

AR. A.S. P.V.P.V. , MUMBAI 

SANGI BROTHERS INDIA LIMITED, INDORE 



GODAVARI CAPITAL PVT. LTD. MUMBAI

MPBIM

27

VIJAYA BANK EMPLOYEES HOUSING CO.OP. SOCIETY, B'LORE 

SAMYS DREAMLAND PVT. LTD., BANGALORE 

SURESH JAGGAD & ASSOCIATES, MUMBAI 

INTELLIGENCE CITY - SALT LAKE, KOLKATA 

CORPORATE LAXMI MACHINE WORKS COIMBATORE 

TAFE LTD CHENNAI 

IOC LTD - NOIDA(UP) -PANIPAT HARYANA 

FOR U SERVICES (P) LTD LUCKNOW 

NAVEEN ORTHOPEDIC AND TRAUMA HOSPITAL SURATH 

ARABINDO PHARMA LTD 

TELEPHANTHI BHAWAN SURATH 

PROCTOR AND GAMBLE GOA 

JINDAL VIJAYANAGAR STEEL PLANT BELLARY 

DYNAMIC DIARY LTD, BARAMATI (MAHARASTRA) 

INDIAN OIL CORPORATION NOIDA 

RELIANCE PROPERTIES LTD BOMBAY AND JAMNAGAR 

GANNON AND DUNCURLAY LTD BOMBAY 

LARSON AND TURBO LTD BOMBAY 

LARSON AND TURBO LTD HYDERABAD 

LARSON AND TURBO LTD BHOPAL 

LARSON AND TURBO LTD KANNUR -KERALA 



AUTOMOTIV E MANUFACTURE LTD MUMBAI

MPBIM

28

LEADING EDGE SYSTEMS LTD MUMBAI 

COSME PHARMA LTD GOA 

HINDUSTAN LEVER LTD CALCUTTA,BOMBAY, B'LORE, DELHI 

MERLONI TERMO SANITARY INDIA LTD POONA 

IOC PANIPAT 

L &T INFO CITY HYDERABAD 

STATE&CENTRAL GOVT. DEPT,LOCAL BODIES & STATUTORY AUTHORITIES: NATIONAL SPORTS AUTHORITY OF INDIA, MUMBAI 

NAGARJUN CON. CO. LIMITED (INDIRAGANDHI INTERNATIONAL 

AIRPORT) DELHI FEDERATION GAMES STADIUM, CHENNAI 

NTPC PROJECTS PATNA 

PATNA AIRPORT PATNA 

NATIONAL ACADEMY OF CONSTRUCTION HYDERABAD 

NATIONAL GAMES STADIUM 

BUILDERS&CONTRACTORS

RAHEJA PROPERTIES DEVELOPERS BANGALORE 

TWIN CONSTRUCTIONS LTD BOMBAY 

VERDHAMAN CONSTRUCTION LIMITED, INDORE 

VEDIOCON PROPERTIES, NEW DELHI 

EVERSHINE CIVIL WORKS PVT. LTD., NEW BOMBAY 

COURIEN BUILDERS, ERNAKULAM 

EXPRESS CONSTRUCTION LIMITED, ERNAKULAM 

URC CONSTRUCTION, BANGALORE 



JAI ARTS, MUMBAI

MPBIM

29

KALASAGAR CONSTRUCTION, MUMBAI 

VANDIT DEVELOPERS INDIA PVT. LTD PUNE 

MS CONSTRUCTION MUMBAI 

AHMED NOORAHMED WASAIWALA & OTHERS, MUMBAI 

RAMESH BUILDERS, PUNE 

DEECAY CONSTRUCTION ENGGS. & CONTRACTORS, MUMBAI 

THE GREAT EASTERN SHIPPING CO. LTD., MUMBAI 

JESPAR INDUSTRIES, HYDERABAD 

BUILDWELL MUMBAI 

MAYANKA ENTERPRISES, MUMBAI 

SHIVOYA ASSOCIATES, MUMBAI 

LAXMI ENTERPRISES, PUNE 

R.C. CORPORATION, SURAT 

TECHNO ART INTERIORS, MUMBAI 

D K PATEL ENTERPISES, MUMBAI 

JAYESH BUILDERS, MUMBAI 

AR. A.S. P.V.P.V, MUMBAI 

SANGI BROTHERS INDIA LIMITED, INDORE 

GODAVARI CAPITAL PVT. LTD. MUMBAI 

VIJAYA BANK EMPLOYEES HOUSING CO.OP. SOCIETY, B'LORE 

SAMYS DREAMLAND PVT. LTD., BANGALORE 

SURESH JAGGAD & ASSOCIATES, MUMBAI 



INTELLIGENCE CITY - SALT LAKE, KOLKATA

MPBIM

30

AUTOMOBILE SHOWROOMS: SUNDARAM MOTORS (TVS), CHENNAI & MADURAI 

COMMERCIAL AUTOMOBILES, JABALPUR 

AUTO FLANGER (I) PVT. LIMITED, MUMBAI 

BAFNA MOTORS, MUMBAI 

PATWA CITY AUTOMOBILES PVT. LD., INDORE 

CARGO MOTORS LTD., AHMEDABAD 

V.V. PATEL AUTO LTD., 

KOYANKA MOTORS, CALICUT 

RUBY AUTO CENTRE, AHMEDABAD 

AUTO INDUSTRIES GOA PVT. LTD., MANGALORE 

U.N. AUTOMOBILES PVT. LTD., DELHI. 

MARUTI UDYOG LTD., DELHI 

LML LTD., BANGALORE, DELHI, LUCKNOW 

MARUTI UDYOG LTD., GURGAON 

MARUTI SHOWROOMS IN VARIOUS CITIES 

TELCO (INDICA) SHOWROOMS THROUGHOUT COUNTRY 

HERO HONDA LTD. ALL OVER INDIA 

HYUNDAI CITY LTD. 



SUBHAS MOTORS, LUCKNOW

MPBIM

31

RESORTS, HOTELS AND RESTAURANTS: NAVEEN HOTELS LTD, ALL OVER KARNATAKA

PIZZA HUT CHAINE STORES, CHENNAI

PRAKASH RESORTS LTD. RAIGADH, MAHARASHTRA

PANCHAVATI HOLIDAY RESORTS, GUWAHATI

ENJOY HOTELS PVT. LTD., MUMBAI

AISIAMAC HOTELS INDIA LTD. CHENNAI

SAYAJI HOTELS LTD. INDORE, BARODA

TAJ GROUPS OF HOTEL, MUMBAI, GOA

HOTEL LEELA KEMPENSKY, MUMBAI, BANGALORE

HOTEL PANCHAM LUCKNOW.

SCHOOLS, COLLEGES & EDUCATIONAL INSTITUTIONS SRIRAMACHANDRA MEDICAL COLLEGE & RESEARCH CENTRE,

CHENNAI D.Y. PATIL PRATISHTAN, PUNE

HOSPITALS: ALL INDIA INSTITUTE OF MEDICAL SCIENCES, DELHI

APPOLLO FOUNDATIONS PVT. LTD. PUNE

AMRUTA INST. OF MEDICAL SCIENCES, KOCHI

THE BANDRA HOLY FAMILY HOSPITAL, MUMBAI

SUCHITRA KRIPALANI HOSPITAL, DELHI

TEMPLES, MOSQUES, CHURCHES AND TRUST: ISKON TEMPLE, BANGALORE



SIDDIVINAYAK TEMPLE, MUMBAI

MPBIM

32

ORGANISATION STRUCTURE OF MCL The following is the organization structure of MCL CHAIRMAN

EXECUTIVE DIRECTOR

VP FINANCE

VP PRODUCTION

VP MARKETING

ASST. MANGR FINANCE

ASST. MANGR PRODUCTION

ASST. MANGR MARKETING

DEPUTY MANAGER

ACCOUNTANT

ASST. MANGR

AREA MANGR

ENGINEER

COLLECTION EXECUTIVES

SHIFT INCHARGE

SALES EXECUTIVE

SUPERVISOR

SALES REPRESENTATIVE

R&D MANAGER

SUPERVISOR

WORKERS

WORKERS

WORKERS

MPBIM

33

BOARD OF DIRECTORS Non Executive Directors 1)

Shri RN Shetty – Promoter and chairman

2)

Dr.K.Sandip Malli – Independent director

3)

Shri K.Jeevan Shetty– Independent director

4)

Dr.B.Suresh Hedge – Independent director

5)

Shri K.P.Surendranath – Independent director

6)

Shri I.M.Vittala Murthy – Independent director

7)

Dr.Sadanand V Nagid – Independent director

Executive Directors 8)

Shri Satish R Shetty : MD

9)

Shri Sunil R Shetty : Joint Managing director

10)

Shri Naveen R Shetty : Joint Managing director

MPBIM

34

5. PRODUCTION DEPARTMENT The production department is headed by the Vice President Production. The following is the departmental chart.

Production Department

Vice President Production

Asst. Manager

Shift Incharge

Supervisor

Worker Functions of the department: 1)

Producing quality products as per quality norms

2)

Deciding on how much to produce

3)

Inventory management

4)

Maintenance of machineries, equipments, etc

5)

Production planning and control

MPBIM

35

Quality Policy at MCL: “Murudeshwar Ceramics Ltd is a quality oriented company and will continuously strive to provide product as per national and international customer requirements by maintaining quality at stages and with the active participation of all employees”. Production process The following is the production process at MCL. Step 1: Naveen diamontile are created from the world renowned while burning clay imported from Ukraine unlike all commonly available clays this while burning clay is specially suited to the vitrification process during firing and it is vitrification that renders the very special qualities to Naveen diamontile compaction, hardness strength and ultra low water absorption. Step 2: The clay is then mixed with gradpure white burning minerals to form the body of the tile processed in the continuous process bull mill which is the first of its kind in India. Commitment to the quality is further emphasized by the fact that the minerals are pulverized in a company owned plant, so that quality checks and controls can be maximized. The tile is then pressed in jumbo 4600 t press. The largest in the Indian tile industry. Steps 3: The resultant tile body already unique in itself is then fixed at 12200oC in 111.3 mts. Kiln imported from ‘Sach1’ Italy world leader in the field. The firing yields a tile that conforms to all the stringent parameters of International standards.

MPBIM

36

Step 4: The fired tile will be polished and calibrated by state of art polishing machine, imported from M/s Breton SPA Italy, using MC-8 headed polishing technology for the first time in India. This technology leaves conventional polishing beside with a polishing line of 46 heads it is having highest individual polishing line capacity in India. Thus the Naveen diamontile that emerges from the combination of these processes is a technically superior product which reflects its leadership in the industry.

MPBIM

37

6. MARKETING DEPARTMENT The marketing department of MCL is headed by vice president (marketing) and the department chart is as follows

V P Marketing

Regional Manager

Area Manager

Sales Executive

Functions of the department 1)

To attract new customers and to retain the old one.

2)

Examining pricing policy

3)

Executing the orders

4)

Managing company owned showrooms

MPBIM

38

Execution of order There are some process which have to be followed while executing an order, the following are the stages of a sale 1)

Order form

A customer makes the enquiry either with the sales executive or with company head office if the price quality and conditions of sale are agreeable to the party then an order is placed. As soon as an order is placed an order form is filled. This order form consists of such details as the address of the party description of the product, insurance, delivery period mode of transport etc. The customer fills this form. 2)

Sales note

Using the order form sale note is prepared, four copies of sale note are issued two copies are retained with the HO, one is sent to the factory and the fourth one is given to the customer. However for a dealer or individual customer the process is slightly different. The sale note is prepared only for bulk order. For the small orders a programme note is prepared which contains information about the size number of boxes to be dispatched delivery date etc. 3)

Delivery of goods

Then the order form will be given to the factory for dispatching. 4)

Collection of dues

The dues (outstanding) will be collected thereafter by the respective sales executive.

MPBIM

39

Marketing mix Marketing mix can be defined as the blend of four ‘s of marketing Viz price, place, product, promotion. The proper and correct mix of these attributes leads to success in the marketing of a product. a)

Price

Price is the only element in the marketing mix that produces revenue, the other elements produce costs. In MCL cost plus and going rate strategy are adopted. b)

Place:

MCL’s head office is in Hubli (Karnataka state) and its plants in Hubli and Dharwad where raw materials are available in abundance. MCL outlets MCL has already opened 72 showrooms in various parts of the country and plans to open 50 new showrooms in future years. In these showrooms a complete catalogue and samples are provided. Customers examine sample and place down the orders, orders are checked and then sent to ware house for dispatch. In Bangalore city itself the company ha four outlets they are in the following places

" N R Road " Jayanagar " Yeshwanthpur " Bannerghatta road

MPBIM

40

c)

Product

MCL produces flooring tiles which are of two types 1

Ceramic tiles

2

Vitrified tiles

These tiles are made available in variety of deign and colours at a very competitive price. d)

Promotion:

MCL is having a very good promotional strategy to promote its product and to cater the intense competition in the market. The various promotional strategies at MCL are as follows 1)

Quantity discounts

2)

Advertising Magazine adds

Paper adds



Hoardings

Distribution channel of MCL SALES EXECUTIVES C O M P A N Y

DISTRIBUTORS

COMPANY SHOWROOM ONLINE (WEBSITE)

MPBIM

41

7. RESEARCH AND DEVELOPMENT DEPARTMENT R&D is a very important department in any organization as it always finds new ways or methods to improve the quality and bring out the best to suit the present requirements of customers. MCL gives at most importance to its R&D it invests a major part of its income towards R&D, the R&D wing of MCL is the recognized one and is having the best of technology and facility among all other tile manufacturing companies. The following is the departmental chart:

Research and development Manager Dy. Manager Engineer Supervisors Workers

Specific areas in which R&D carried out by the company 1)

Alternate source for screens and decorating materials

2)

Development of new product range in general and marble design in particular

3)

Implementation of in plant raw material processing unit

MPBIM

42

4)

More indigenization of input as well as in process raw materials and equipments.

5)

Introduction of new designs in every one year

Benefits derived as a result of R&D a

Cost reduction

b

Low inventory cost’s

c

Easy availability of raw material

d

Variety in product range.

Future plans of R&D 1)

Development of low cost tiles

2)

Implementation of ceramic glaze tile by using new dry grinding technology

3)

To increase utilization of waste water by recycling

Expenditure on R&D The following table depicts the expenditure incurred on R&D for the last four years Type of expenditure

2001-02

2002-03

2003-04

2004-05

Capital

5.29

14.82

8.25

8.25

Recurring

2.23

6.74

2.19

21.23

Total

7.52

21.56

10.44

29.48

0.17

0.07

0.16

Total R&D expenditure as a 0.08 percentage of total turnover

As we can see the investment in R &D wing in increasing year by year, it is very interesting to note that there is extensive capital investment year by year which indicates the growth of R & D wing in the organization.

MPBIM

43

8. FINANCE DEPARTMENT:

Finance is said to be the life blood of any business for proper allocation and management of the funds organization requires a finance department. MCL is having a separate finance department to take care of all these activities the following is the departmental chart of the same.

V.P. Finance Assistant Manager Finance Accountants Collection Executives Functions of the department: 1)

Maintaining proper books of accounts

2)

Reporting to the management issues relating to finance

3)

Obtaining of funds from various sources and using it efficiently.

4)

Tax planning

5)

Controlling (regular assessment of financial activities)

MPBIM

44

Capital structure of MCL: The following is the capital structure of MCL: Sl.

Sources

Amount (cr)

%

1

Equity shares

15,00,87,275

4.84

2

Preference shares

16,00,00,000

5.16

3

Reserves and surplus

146,25,04,505

47.19

4

Secured loans

119,12,73,615

38.44

5

Unsecured loans

13,54,67,211

4.37

3,09,93,32,606

100

No.

Total

We can see that the total share of equity share holders is more than 50% including reserves and surplus and the share of secured loans is also very big Equity share holding pattern: Equity share holders are the owners of the company as they have the right of voting and participating in the affairs of the company, the following is the equity share holding pattern as on 31.03.2005.

MPBIM

45

a)

Distribution of share holding as on 31.03.05

Nominal value of shares

No. holders

of Share amount In Rs.

Paid up capital

Up to 5000

5,352

1,01,05,370

6.74

5001 – 10000

654

55,35,340

3.69

10,001 – 20,000

298

47,05,080

3.14

20,001 – 30,000

112

28,98,280

1.93

30,001 – 40,000

38

13,64,620

0.91

40,001 – 50,000

51

25,03,490

1.67

50,001 – 1,00,000

64

48,33,370

3.32

1,00,001 and above

67

11,80,64,060

78.70

Total

6,636

1500,09,610

100.00

MPBIM

46

b) Sl. No. 1

Share holding pattern as on 31-03-2005 Share amount Category of shareholders No. of shares All

India

financial

institutions

and 7,98,938

% to capital 5.32

insurances 2

Mutual funds

1,700

0.01

3

Banks

5,79,739

3.86

4

Other bodies corporate

9,09,708

6.06

5

Non-resident foreign institutions

4,16,578

2.78

6

Associate companies

3,11,461

2.08

7

Trusts

42,25,337

28.17

8

Directors and their relatives

19,87,122

13.25

9

Others including resident individuals

57,70,378

38.47

1,50,00,961

100.00

Total

By looking at the Distribution of shareholding and pattern share holding, one can say that the equity shares of the company has been owned by various institutions and bodies, who have a great faith in the future of the company.

MPBIM

47

Market price data of M.C.L: The prices of equity shares of keep fluctuating all the time due to several reasons such as political situations, government decisions, confidence of people in the market. The following is the market price data of M.C.L.

Month

Highest Rs.

Lowest Rs.

Month

Highest Rs.

Lowest Rs.

April 2004

31.15

25.85

Oct 2004

41.00

32.85

May 2004

29.70

22.05

Nov 2004

57.00

35.00

June 2004

24.10

19.65

Dec 2004

49.90

38.55

July 2004

30.30

22.00

Jan 2005

47.25

35.55

Aug 2004

34.00

23.50

Feb 2005

45.25

37.00

Sept 2004

41.90

30.00

Mar 2005

46.80

36.40

Share transfer system and dematerialization: 1)

Arrangements with Alpha Systems Pvt Ltd. Bangalore to act as Share transfer agents of the company

2)

Members may also hold and/or trade equity shares of this company in dematerialized / electronic form members who are desirous to hold their shares in de-mat/electronic form may do so through their depository participants or may contact the company secretary for guidance.

3)

As on 31.03.2005 out of total of 1,50,00,961 shares 1,38,53,460 shares (92.35%) have been dematerialized.

MPBIM

48

Dividend declared by the company: Dividend is the reward to equity shareholders for their risk MCL which is growing day by day and who’s profit and turnover is inc reasing year by year has declared dividends for its shareholders at the rate of 10%, 10% and 15% for the year of 200203, 2003-04, 2004-05 respectively.

Company’s performance in recent years: An organization performance can be measured by the analysis and interpretation of its final accounts viz., profit and loss account and balance sheet whereas the balance sheet is said to be the mirror of the company. The following are the income statement and balance sheet of MCL for the last three years starting from 2002-03 to 2004-05.

MPBIM

49

INCOME STATEMENT FOR THE YEAR 2002-03 Particulars

Amount (Rs.)

Sales and other income

1,305,770,030

Less: operating expenses

718,504,905

Gross profit

587,265,125

Less: administration expenses

398,333,925

Profit before int and tax

188,931,200

Less: Interest

13,78,68,362

Profit before tax

51,062,838

Less: Tax

13,707,000

Profit after tax

37,355,838

Add: Balance of profit brought forward

33,945,320

Profit available for appropriation

71,301,158

Less: Preference dividends

-

Earning available for equity share holders

71,301,158

MPBIM

50

BALANCE SHEET AS AT 31-03-2003 Particulars

Schedule No.

SOURCES OF FUNDS Share holder’s fund a) Share capital b) Reserve’s surplus

1 2

Rs.

Rs.

15,00,87,275 137,62,12,519 152,62,99,794

Loan funds: Secured loans Unsecured loans

3 4

89,40,36,066 11,29,28,006

Total APPLICATION OF FUNDS Fixed assets Investments Current assets loans and advances 1) Inventories 2) Sundry debtors 3) Cash and bank balances 4) Loans and advances

100,69,64,072 253,32,63,866

5 6

7 8 9 10

5) Interest accrued on deposits

1,96,33,87,745 3,00,39,800

46,01,48,868 10,02,56,880 5,38,71,768 13,41,26,663 6,22,387 74,90,26,566

Less: Current liabilities & provisions a) Current liabilities 11 b) Provisions 12

19,24,41,079 2,09,68,772 21,33,50,051

Net current assets Miscellaneous expenditure Total

MPBIM

13

53,56,76,515 41,59,806 2,53,32,63,866

51

INCOME STATEMENT FOR THE YEAR 2003-04 Particulars

Amount (Rs.)

Sales and other income

153,92,61,900

Less: operating expenses

81,32,02,645

Gross profit

72,60,59,255

Less: administration expenses

48,99,34,972

Profit before int and tax

23,61,24,283

Less: Interest

10,49,51,971

Profit before tax

13,11,72,312

Less: Tax

2,10,16,678

Profit after tax

11,01,55,634

Add: Balance of profit brought forward

3,43,78,199

Profit available for appropriation

14,45,33,833

Less: Preference dividends

58,73,973

Earning available for equity share holders

13,86,59,860

MPBIM

52

BALANCE SHEET AS AT 31-03-2004

Particulars

Schedule No.

Rs.

Rs.

SOURCES OF FUNDS Share holder’s fund a) Share capital

1

i) Equity shares

15,00,87,275

ii) Preference shares

16,00,00,000

b) Reserve’s surplus

2

147,37,50,297 178,38,37,572

Loan funds: Secured loans

3

103,38,38,380

Unsecured loans

4

17,44,72,661

Total

120,83,11,041 299,24,48,613

APPLICATION OF FUNDS Fixed assets

5

2,36,38,76,183

Investments

6

3,00,52,300

Current assets loans and advances 1) Inventories

7

47,81,21,962

2) Sundry debtors

8

16,50,39,747

3) Cash and bank balances

9

4,04,91,944

4) Loans and advances

10

15,19,41,094

5) Interest accrued on deposits

8,41,050 83,64,35,797

MPBIM

53

Less: Current liabilities & provisions a) current liability b) Provisions

11

27,127,147

12

3,36,34,534 24,07,61,681

Net current assets

13

59,56,74,116

Miscellaneous expenditure

25,46,014

Total

299,21,48,613

MPBIM

54

INCOME STATEMENT FOR THE YEAR 2004-05

Particulars

Amount (Rs.)

Sales and other income

180,15,53,339

Less: operating expenses

92,70,74,457

Gross profit

87,44,78,882

Less: administration expenses

55,21,48,196

Profit before int and tax

32,23,30686

Less: Interest

12,99,66,714

Profit before tax

19,23,63,972

Less: Tax

2,80,83,270

Profit after tax

16,42,80,702

Add: Balance of profit brought forward

4,09,84,299

Profit available for appropriation

20,52,65,001

Less: Preference dividends

1,60,00,000

Earning available for equity share holders

18,92,65,000

MPBIM

55

BALANCE SHEET AS AT 31-03-2005

Particulars

Schedule No.

Rs.

Rs.

SOURCES OF FUNDS Share holder’s fund a) Share capital

1

i) Equity shares

15,00,87,275

ii) Preference shares

16,00,00,000

b) Reserve’s surplus

2

146,25,04,505

c) Deferred tax

3

14,44,35,430 191,70,27,210

Loan funds: Secured loans

4

119,12,73,615

Unsecured loans

5

13,54,67,211

Total

132,67,40,826 324,37,68,036

APPLICATION OF FUNDS Fixed assets

6

255,22,20,957

Investments

7

3,00,47,300

Current assets loans and advances 1) Inventories

8

50,94,96,605

2) Sundry debtors

9

20,79,44,276

3) Cash and bank balances

10

7,77,73,640

4) Loans and advances

11

13,27,50,162

5) Interest accured on deposits

10,55,152 92,90,19,8347

MPBIM

56

Less:

Current

liabilities

&

provisions a) Current liabilities

12

20,94,64,015

b) Provisions

13

5,89,88,270 26,84,52,285

Net current assets Miscellaneous expenditure Total

MPBIM

66,05,67,549 14

9,32,230 324,37,68,036

57

RAITO ANALYSIS OF MCL: The above financial performance can be analyzed with the help of some financial ratios so as to know the financial soundness of the firm: Sl.

Ratios

2002-03

2003-04

2004-05

1

Gross profit ratio

44.97%

47.17

48.54

2

Return on capital

7.46%

7.89

9.94

3

Return on share holders fund

2.45%

6.18

8.57

4

Return on total asset

1.36%

3.07

5.06

5

Earning per share

4.75%

9.24

12.62

6

Capital turnover ratio

51.55%

51.44

55.54

7

Current ratio

3.89

4.04

4.44

8

Liquid ratio

1.50

1.73

2.00

9

Debt ratio

0.59

0.68

0.69

10

Proprietary ratio

0.56

0.50

0.59

11

Debt ratio

0.40

0.40

0.41

No.

MPBIM

58

INTERPRETATION AND CONCLUSION OF RATIOS: 1. Gross profit ratio which indicates the operating efficiency in terms of net trading results can be calculated by dividing gross profit by net sales. In MCL the G.P ratio which was 44.97% in 2002-03 has been increasing at a very consisting rate i.e. 47.17% in 2003-04 and 48.54% in 2004-05.We can say that the operating efficiency of MCL is growing year by year and they are earning more margin by their trading activity.

2. Return on capital is the return on the total capital employed in terms of fixed assets and current assets is derived by dividing EBIT by total capital employed MCLs ROC was 7.46% in 2002-03, 7.89% in 2003-04 and 9.94% in 2004-05.It clearly indicates how well the firm is using its available resources and earning higher margins by reducing the cost.

3. Return on shareholders fund is the return obtained from shareholders funds which is calculated by dividing profits and share holders funds it is very interesting to note that MCLS shareholders return is increasing year by year, it is the result of increase in profits during the last three years.

4. The return on total assets ratio which was 1.36% in 2002-03 has increased to 5.06% it shows the efficient utilization of installed plant capacity of the firm.

5. Earning per share of share holders of the company is increasing year by year, in 2002-03 it was 4.75rs per share which has increased to 12.02rs per share in the year 2004-05.

6. Capital turn over ratio which indicates the number of times the capital employed is turned over in terms of sales; in MCL this ratio is increasing i.e. it was 51.55% in MPBIM

59

2002-03 and has increased to 55.54% in the year 2004-05. 7. MCLs liquidity position is excellent it is revealed in their current ratio and liquid ratios which are above the standard ratios. Current ratio of MCL is 3.89 in 2002-03 and 4.44 in the year 2004-05 and the liquid ratio which is 1.50 in 2002-03 and 2.00 in 2004-05.it shows the short term solvency of the firm i.e. the firm has a good cover to meet its short term liabilities.

8. The ownership ratios of the firm i.e. debt equity ratio, proprietary ratio and debt ratio which reveals firms dependence towards debt capital and equity shareholders share in the firm has revealed the following results:

Debt-equity ratio is the ratio between long term debts and share holders 

funds, it was 0.59 in the year 2002-03 and 0.69 in the year 2004-05 Proprietary ratio which indicates stake of share holders in the assets of the 

firm was 0.56 in the year 2002-03 & has increased to 0.59 in the year 200405. The debt ratio which is the share of debt in total capital as remained 

constant that is it was 0.40 in the year 2002-03 and in 2004-05 it is 0.41 

It shows that the equity share holders in the firms have larger share than creditors.

MPBIM

60

9. SWOT ANALYSIS OF MCL Any organization will be having its own strengths and weakness due to various internal factors, along with this it will have opportunities and threats that are the results of external environment and which are not in the hand s of the organization.

The following is the SWOT analysis of MCL:

STRENGHTHS: 1 Committed work force 2 Strong technology 3 Professional management 4 Research and development wing 5 Brand name

WEAKNESS:

OPPORTUNITIES:

THREATS:

1Growth in tile industry 2 Revival of production of ceramic tiles 3 More showrooms for wide reach

1.Lak of representation in north India 2.Gap in demand and supply

1Small and medium size industries mushrooming in various parts of the Country 2 Dumping of cheaper tiles from foreign Companies. 3 frequent increase in cost of power and fuel. 4 continuous falling in prices due to cut throat competition

MPBIM

61

10. CONCLUSIONS AND RECOMMENDATION The internship study conducted at MCL was a pleasant experience for me as it gave me the opportunity to know the various aspects of management, the basic structure of an organization and more than anything much needed corporate exposure. There is no other word that MCL is a very professionally managed company which aims at achieving higher standards in the market. the following are the conclusions of my study. 1. Good inter departmental relation: There is a good inter departmental relation in MCL i.e. all functional departments of the firm work towards the mission of the company. All the departments have their functional specification and work as per the standards. 2. Successful in brand building: MCL is a very successful brand despite of the fact that there is a huge competition in the present market thanks to the aggressive marketing strategy adopted by the company. Today MCL is the powerful brand in the market and moving towards becoming the market leader. 3. Very healthy financial position: MCL is very successful in managing its finance, it has managed all its financial resources to the optimum level and has achieved some good results as revealed by the financial statement analysis.

MPBIM

62

4. Future plans and expansion: MCL is having some dream projects in its hand, it is expanding its capacity to increase its production capacity to match the demand in the market. It is very interesting to know that MCL is planning to open new show rooms all over the country

The following are the recommendations which are based on the study: 1. More concentration towards North Indian market: MCL has not been able to explore the markets of northern part of India even though it is a very successful brand in south India. It is suggested that MCL should spend more resources towards these untapped markets. 2. More promotional activities Indian tile industry is witnessing a intense competition, there are many companies operating in this industry who are trying to get as much share as possible.MCL should spend a large part of their income towards promoting their product. 3. Dealers network policy Company should rethink of dealer network policy for better accessibility and reach of products to the end users.

MPBIM

63

BIBLIOGRAPHY 1

Company web site www.naveenceramics.com

2

Company’s annual reports.

MPBIM

64