A

PROJECT
ON
“ANALYSIS OF FINANCIAL STATEMENT & GLOBAL
AUTOMOTIVE CONPONENTS PRIVATE LIMIED”
Submitted to Dr. A.P.J. Abdul Kalam Technical University, Lucknow in the
partial fulfillment of the requirement for the award of the degree of
Master of Business Administration

Session: - 2018 – 2020

UNDER THE GUIDANCE OF SUBMITTED BY
Mr. Devesh Kumar Gupta Mr. Shagun Goel
(Faculty of MBA Department) Roll No.:- 1808570079

S.D. COLLEGE OF MANAGEMENT STUDIES, MUZAFFARNAGAR

(Affiliated to Dr. [Link] Kalam Technical University, Lucknow)
 PREFACE

Summer training is essential for the fulfillment of MBA curriculum. It provides an

opportunity to the student to understand the industry with special emphasis on the
development of skill in analyzing interoperating practical problem through application of
management.

The whole study has been divided into parts:-

The first part introduction, wherein I have presented the industry and company visited by
me.

The second part of the report is a project which contains title, objective, methodology,
scope and limitation of the study.

The third part of the report contains facts and information gathered by me in the course
of the study.

The fourth part of the study contains data analysis and interpretation.

The fifth part of the study includes finding and recommendation.

The last part of the study includes Annexure and Bibliography.

 ACKNOWLEDGEMENT

With immense please we are presenting “Analysis of Financial Statement” project report
as part of the curriculum of “Master of Business Administration”. We wish to thank all
the people who gave us unending support.

I express my profound thanks to Director Dr. Alok Kumar Gupta and my project guide
Mr. Devesh Gupta and those who have indirectly guided and helped us in preparation of
this project.

We also like to extend our gratitude to all staff and our colleagues of S.D. College of
Management Studies, who provided moral support, a conductive work environment and
the much-needed inspiration to conclude the project in the and a special thanks to my
parents who are integral part of the project.

Thanking you.

Shagun Goel
 DECLARATION
I am the undersigned hereby declare that the project report entitled “ Analysis of
Financial Statement” is an original work developed and submitted by me under the
guidance of Assistant Prof. Mr. Devesh Gupta. The project is submitted to the University of
Abdul Kalam Technical University, Lucknow. For the partial fulfillment of the Master of
Business Administration examination 2018-2019.

The empirical findings in this project report are not copied from any report and are true
and best of my knowledge.

DATE:

PLACE:

ROLL NO: Signature of Student

Shagun Goel
 CONTENTS

Page No.
 ACKNOWLEDGEMENT
 DECLARATION
 PREFACE
1. Introduction of Topic
2. Objective of Study
3. Company Profile
4. Research Methodology
5. Theoretical Frame Work
6. Data Analysis
7. Recommendation & Suggestion
8. Conclusion
9. Limitations
10. Bibliography
 Annexure
INTRODUCTION
Financial Statement Analysis is a method of reviewing and analyzing a company’s
accounting reports (financial statements) in order to gauge its pasT, present or projected
future performance. This process of reviewing the financial statements allows for better
economic decision making.

Globally, publicly listed companies are required by law to file their financial statements
with the relevant authorities. For example, publicly listed firms in America are required
to submit their financial statements to the Securities and Exchange Commission (SEC).
Firms are also obligated to provide their financial statements in the annual report that
they share with their stakeholders. As financial statements are prepared in order to meet
requirements, the second step in the process is to analyze them effectively so that future
profitability and cash flows can be forecasted.

Therefore, the main purpose of financial statement analysis is to utilize information about
the past performance of the company in order to predict how it will fare in the future.
Another important purpose of the analysis of financial statements is to identify potential
problem areas and troubleshoot those.

Save

USERS OF FINANCIAL STATEMENT ANALYSIS

There are different users of financial statement analysis. These can be classified into
internal and external users. Internal users refer to the management of the company who
analyzes financial statements in order to make decisions related to the operations of the
company. On the other hand, external users do not necessarily belong to the company
but still hold some sort of financial interest. These include owners, investors, creditors,
government, employees, customers, and the general public. These users are elaborated on
below:

1 Management
The managers of the company use their financial statement analysis to make intelligent
decisions about their performance. For instance, they may gauge cost per distribution
channel, or how much cash they have left, from their accounting reports and make
decisions from these analysis results.

2 Owners
Small business owners need financial information from their operations to determine
whether the business is profitable. It helps in making decisions like whether to continue
operating the business, whether to improve business strategies or whether to give up on
the business altogether.
3 Investors
People who have purchased stock or shares in a company need financial information to
analyze the way the company is performing. They use financial statement analysis to
determine what to do with their investments in the company. So depending on how the
company is doing, they will either hold onto their stock, sell it or buy more.

4 Creditors
Creditors are interested in knowing if a company will be able to honor its payments as
they become due. They use cash flow analysis of the company’s accounting records to
measure the company’s liquidity, or its ability to make short-term payments.

5 Government
Governing and regulating bodies of the state look at financial statement analysis to
determine how the economy is performing in general so they can plan their financial and
industrial policies. Tax authorities also analyze a company’s statements to calculate the
tax burden that the company has to pay.

6 Employees
Employees need to know if their employment is secure and if there is a possibility of a
pay raise. They want to be abreast of their company’s profitability and stability.
Employees may also be interested in knowing the company’s financial position to see
whether there may be plans for expansion and hence, career prospects for them.

7 Customers
Customers need to know about the ability of the company to service its clients into the
future. The need to know about the company’s stability of operations is heightened if
the customer (i.e. a distributor or procurer of specialized products) is dependent wholly
on the company for its supplies.

8 General Public
Anyone in the general public, like students, analysts and researchers, may be interested
in using a company’s financial statement analysis. They may wish to evaluate the effects
of the firm on the environment, or the economy or even the local community. For
instance, if the company is running corporate social responsibility programs for improving
the community, the public may want to be aware of the future operations of the
company.
NEEDS OF THE STUDY

(a) It helps us to know the reasons for relative changes—either in profitability or in the financial
position as a whole.`

(b) It also help to know both th`e short-term liquidity position vis-a-vis working capital position;
as also the long-term liquidity and solvency position of a firm.

(c) It also highlights the operating efficiency and the present profit-earning capacity of the firm
as a whole.

(d) High court, Supreme court, Arbitrators also require financial statements to settle various
disputed matters.

(e) Various financial journal (viz. R.B.I., Bulletins), newspaper, etc., also require financial
statements for analyzing and scrutinizing the financial position of a firm for the readers.
Tools of Financial Statement Analysis
i) Comparative Statement;

(ii) Common-Size Statement;

(iii) Trend Analysis;

(iv) Working Capital Analysis;

(v) Funds Flow Analysis;

(vi) Cash Flow Analysis;

(vii) Ratio Analysis;

(viii) Cost-Volume Profit (CVP)/Break-Even Analysis.

TOOLS AND TECHNIQUES USED:

To analyze and interpret the financial statements of the study unit the following tools are

used in the study.

1. Ratio Analysis.

2. Trend Analysis. (Least square Method)

3. Comparative statement Analysis

The interpretations are also printed graphically using trend line graphs and sub-dividing

bar diagram.

These are explained in bring as follows.

1. Ratio Analysis:

Ratio Analysis is widely used tool of financial analysis. It is defined as the systematic use of

ratio to interpret the financial statements so that the strength and weakness of a firm as well as its

historical performance and current financial condition can be determined. The term ratio refers to

the numerical or quantitative relationship between two items/ Variable. This relation can be

expressed as.

a. Percentages

b. Fractions

c. Proportion of numbers.

Accounting ratios showed the relationship in mathematical terms between two

interrelated accounting figures. This is the most important tool available to financial analysis for

their work.
 Ratio analysis is a process of identifying the financial strengths and weakness of the firm.

This may be accomplished either through a trend analysis of the firm’s ratios over a period of

time or through a comparison of the firm’s ratios with its nearest competitors and with the

industry averages. The four most important financial dimensions which a firm would like to

analyze are: liquidity, Leverage, Activity and Profitability.

Nature of Ratio Analysis:

A Financial ratio is a relationship between tow accounting numbers. ratios help to make a

qualitative judgment about the firm’s financial performance.

Financial Ratio:

Financial Ratio is a relationship between two financial variables. It helps to ascertain the

financial condition of a firm.

Types of financial Ratios:

 Liquidity ratios

 Leverages ratios

 Activity ratios

 Profitability ratios

Liquidity Ratio:

Liquidity Ratio measure the firm’s ability to meet current obligations, and are calculated

by establishing relationships between current assets and current liabilities.

Leverage ratio:

Leverage ratios measures the proportion of outsider’s capital in financing the firm’s

assets, and is calculated by establishing relationships between borrowed capital and equity

capital.

Activity Ratio:

Activity ratio reflects the firms efficiency in utilizing its assets in generating sales and is

calculated by establishing relationships between sales and assets.

Profitability Ratio:

Profitability ratios measure the overall performance of the firm by deterring the

effectiveness of the firm ingenerating profit, and are calculated by establishing relationships

between profit figures on the one hard, and sales and assets on the other.

Utility of Ratio Analysis

Assessment of the firm’s financial conditions and capabilities.

 Diagnosis of the firm’s problems, weakness and strengths.

 Credit analysis

 Comparative analysis

 Time series analysis

Cautions in using ratio analysis

1. Standards of comparisons

2. Company differences

3. Prices level

4. Different definition

5. Changing situations

6. Past data

Standard of Comparison:

a. Time series analysis

b. Inter-firm analysis

c. Industry analysis

d. Preformed financial statement analysis

Advantages of Ratio Analysis:

1. It helps in analysis of the situation i.e. analysis on the financial situation and performance.

2. Inter-firm and Inra-firm comparison is both possible on the basis of accounting ratio

3. Accounting Ratio not only indicates the present position but they also indicate the cause

leading up to the position of a large extent

4. It helps in obtaining best result when ratios for a number of years are put in tabular form so

that the figure for one year can be easily compoared with those of other year

5. It indicates the trend of the change, which helps in preparation of estimates for the future.

6. They provide simplicity to the complex accounting information presented by the financial

statements
7. They are very helpful to outsiders as well as for internal management

8. It is very helpful to internal managements, discharge of the basic managerial functions.

9. It also helps in planning, policy making & controlling the activities.

10. They are helpful in establishing the standard casting system.

Limitations of ratio analysis

1. Ratio provides only guidelines to the management they are only the means. However They

scratch surfaces and raise question. The limitation of the ratio may force the management to

have detailed investigation of the situation under question.

2. single accounting ratio is not useful at all unless it is studied with other accounting ratios

3. They are based only on the quantitative information. Hence, qualitative information puts

limit on the ratios

4. Ratios are subject to arithmetical accuracy of the financial statements. Moreover financial

statement also include estimated date like provision for depreciation, bad and doubtful debts

etc. hence, result revealed by ratios are subject to such estimates.

5. Ratios are computed on the basis of financial statements which are historical in nature.

6. Knowledge of ratios only is meaningless unless it is also found how it is made up.

7. Lack of homogeneity of data, personal judgment lack of consistency etc. is the factors which

limit the conclusion to be derived on the basis of accounting ratios.

2. METHODS OF LEAST SQUARES (TREND VALUES)

By the method of lease square, a straight line trend can be fitted to the given time series of data.
It is a mathematical, as well as, analytical method. With its help, economic and business time
series data can be fitted and this helps in forecasting and predicting. The trend line is called the
line of best fit. The sum of deviations of the actual values of Y and the trend value (Yc) is 0
and sum of square of deviations of the actual value and the trend value is the least.

(Y-Yc) = 0 and (Y- Yc) = least. So this method is called the least squares method or the line of
best fit.

The method of least squares cab be used to explain the linear and non linear trend i.e. a
straight line trend or parabolic trend.

The straight line trend or the first degree parabola is represented by the mathematical
equation.

Yc = a + bx

Yc = require trend value

X = unit of time

Here a and b are constants or unknowns.

In the equation for the first – degree parabola Yc = a + bx, the values of the unknown or
constants can be calculated by the following two normal equations.

Y = Na +bx

xY = ax +bX2

N = the numbers or months for which data are given

When x = 0, the equation will take the form of

Y = Na

bx = 0

xY = bx2

bx2 = 0
by these equation we can know the values of a and b i.e

a = Y/N and

b = xY / x2

a = the mean value of Y values

b = rate of change

3. COMPARATIVE STATEMENT ANALYSIS :

Comparative statement is those statements, which have designed in a way, so as to

provide time perspective to the consideration of the various elements of financial position
embodied in such statements. In such statements figures for two or more periods are placed
side by side to facilitate comparison. The two statements are proposed for comparison. They are
comparative income statement and comparative Balance Sheet.
 Objective of the Study

1. To assess the earning capacity or profitability of the firm.

2. To assess the short term as well as long term solvency position of the company.

3. To provide a strong theoretical framework for analyzing financial statements.

4. To study the growth profile of the company during the study period.

5. To study the financial position of the company & operation of Global Automotive
Components Private Limited.

6. To appraise financial soundness of the company.

COMPANY’S PROFILE
Global Automotive Company Private Limited is privately incorporated on 29 march, 2001.
It is classified as non- government company and is registered at registrar of companies,
Delhi.

REGISTRATION NO - 34656

CIN (CORPORATE IDENTIFICATION NO) - U50300HR2001PT0C034656

ADDRESS - Plot No 95, Sector 24, Faridabad, India (121005)

COMPANY CATEGORY - Company Limited By Shares

COMPANY SUB CATEGORY - Non - Government Company

CLASS OF COMPANY - Private

WEBSITE - [Link]

E-MAIL - info@[Link]

TRADEMARK - Global Automotive

BUSINESS TYPE - Exporter/ Manufacturer/ Supplier

AUTHORISED CAPITAL - Rs. 3,00,00,000

PAID- UP CAPITAL - Rs. 37,71,600

DIRECTORS - Kamlesh Gumber , Ritesh Gumber , Subhash Chander Gumber

LAST ANNUAL GENERAL MEETING - 30 september, 2018 as per records of ministry

of corporate affairs.

WORK DESCRIPTION - It is involved in sale of motor vehicle parts and accessories

(includes wholesale and retail sale of all kinds of parts, components and accessories for
motor vehicles, when not combined with sale of such vehicle themselves).

It also provides services like packaging, complete solution, delivery and new product.
 MEMORANDUM OF ASSOCIATION
OF A
GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

1. The Name to the Company Is GLOBAL AUTOMOTIVE COMPONENTS PRIVATE

LIMITED.

2. The Registered Office of the Company will be situated In the State of Haryana.

3. The objects for which the Company Is established are:

A. THE MAIN OBJECTS TO BE PURSUED BY THE COMPANY ON ITS

INCORPORATION ARE :—-

1) To carry on the business of manufacturing, buying, selling, reselling, sub-

contracting, exchanging, hiring, altering, importing, exporting, improving,
assembling, distributing, servicing, repairing and dealing in as original
equipment manufacturers as also on a jobbing industry basis and in any other
capacity all and every kind of precision components, machineries, component
parts, replacement parts, spare parts, accessories, tools, implements and
fittings of all kinds inclusive of all types of axles, and all ‘relevant axle
assembly, components, parts and accessories, propeller, shafts and universal
joints, gaskets, ornamentation and decorative parts for motors, vehicles,
trucks, tractors, motor lorries, motor cycles, motors, cycle cars, cycles,
scooters, buses, omnibuses, locomotives, engines and other vehicle and
products of all descriptions whether propelled or used by means of petrol,
spirit, oil vapor gas, coal, electricity, petroleum, atoms or any other motive or
mechanical power, in India or elsewhere; and to carry on any other business of
manufacturing or otherwise, which is connected to the above.

2) To manufacture, construct, fabricate, assemble, sell, purchase, hire, let on hire,

import, export, service, alter, repair and deal in all kinds of vehicles including,
but not limited to motor cars, trucks, lorries, tractors and all other vehicles
used for the transport or conveyance of passengers, merchandise and goods of
every description or used for any other purpose and whether used on road,
underground, in air, space or water as also in plant, machinery, equipment,
accessories, spare parts, component parts, appliances, tools and apparatus
necessary or useful for or in connection with all kinds of vehicles.
A. OBJECTS INCIDENTAL OR ANCILLARY TO THE ATTAINMENT OF THE MAIN
OBJECTS ARE :-—

1) To buy all kinds of plant, equipment, machinery, apparatus, tools, utensils,

commodities, substances, article and things necessary or useful for carrying on
the main businesses of the Company.

2) To enter into agreements with any company or persons for obtaining by grant
of licence or on other terms formulae and other rights and benefits, technical
information, know-how and expert guidance and equipment and machinery
for the production and manufacture in India or the articles and things
mentioned above and to arrange facilities for training of technical personnel
by them.

3) To establish, provide, maintain and conduct or otherwise subsidise research

laboratories and experimental workshops for scientific and technical research
and experiments and to undertake and carry on with all scientific and technical
research, experiments and tests of all kinds and to promote studies and
research both scientific and technical investigation and invention by providing
subsidising, endowing or assisting laboratories, workshops, libraries, lectures,
meetings and conferences and by providing the remuneration to scientific and
technical professors and teachers and by providing for the award,
scholarships, prizes, grants and bursaries to students or independent students
or otherwise and to encourage, promote and award studies, researches,
investigations, experiments, tests and inventions of any kind that may be
considered likely to assist the main businesses of the Company.

4) To acquire by concession, grant, purchase, barter, lease, licence or otherwise

either absolutely or conditionally and either alone or jointly with others land,
buildings, machinery, plants, works, conveniences and other movable and
immovable properties of any description and any patents, trademarks,
concessions, privileges, brevets d’inventions, licences, protections and
concessions conferring any exclusive or limited rights to any inventions,
secrets or other information which may seem necessary for any of the
purposes of the Company and to construct, maintain and alter any building or
work, necessary or convenient for the purpose of the Company and to pay for
such land, buildings, work property or rights or any other property and rights
purchased or acquired by or for the Company by shares, debentures,
 debenture-stock bonds or other securities of the Company or otherwise and
manage, develop, let on lease or for hire or otherwise dispose of or turn to
account the same at such time or times and in such manner and for such
Consideration as may be deemed proper or expedient.

5) To act as consultants in items being dealt with by the company in the matter
of manufacturing, buying, selling, importing, and exporting of raw material in
their finished, semi4inished or in their raw form.

6) To enter into any arrangement, with any Government or Authorities,

Municipal, local or otherwise or any person or company, in India or abroad,
that may seem conducive to the objects of the Company or any of them and to
obtain from any such government, authority, persons or company any rights,
privileges, charters, contracts, licences and concessions including in particular
rights in respect of waterways, roads and highways, which the Company may
carry out, exercise and comply therewith.

7) To apply for and obtain any order or such other authority for enabling the
Company to carry any of its objects into effect or for effecting any
modifications of the Company’s constitution or for any other such purpose,
which may seem expedient and to make representations against any
proceedings or applications which may seem calculated directly or indirectly
to prejudice the Company’s interests.

8) To enter into partnership or into any arrangement for sharing profits, union of
interest, co-operation, joint-venture. reciprocal concessions or otherwise with
any person, firm or company carrying on or engaged in any business or
transactions which this Company is authorised to carry on and to amalgamate
with any other such Company having objects altogether in part similar to
those of this Company in India or abroad.

9) To purchase or otherwise acquire and undertake the ,whole or any part of the
business, property, rights and liabilities of any company or person carrying on
business which this Company is aüthorised to carry on or is possessed of
rights suitable for any of the business of this Company.

10) To take or otherwise acquire and hold shares or such other interests in or
securities of any other such companies having objects altogether or in part
similar to those of this Company.

11) To promote, form and register, aid in the promotion, formation and
registration of any company or companies, subsidiary or otherwise for the
 purpose of acquiring all or any of the properties, rights and liabilities of this
Company and to transfer to any such company any property of this Company
and to be interested in or take or otherwise acquire, hold, sell or otherwise
dispose of shares, stock, debentures and such other securities of all types in or
of any such company, subsidiary or otherwise for all or any of the objects
mentioned in this Memorandum and to assist any such company and to
undertake the management work, duties and business on such terms as may be
arranged.

12) To open accounts with any bank or financial Institutions and to draw, make,
accept endorse, discount, execute and issue promissory notes, bills of
exchange, hundies, bills of lading, warrants, debentures and other negotiable
or transferable instruments and to buy, sell and deal in the same.

13) Subject to Sections 58-A, 292, 293, 295 and 372A of the Companies Act,
1956 an the rules made therein and the directions issued by Reserve Bank of
India, to borrow, raise or secure the payment of money or to receive money as
loan at interest for any of the purposes of the Company and at such time or
times as may be expedient by promissory notes, bills of exchange, hundies,
bills of lading, warrants or other negotiable instruments or by taking credit in
or opening current accounts or over-draft accounts with any person, firm,
bank or company and whether with or without any security or by such other
means may deem expedient and in particular by the issue of debentures or
debenture stock, perpetual or otherwise and in security for any such money so
borrowed raised or received and of any such debentures or debenture stock so
issued, to mortgage, pledge or charge the whole or any part of the property
and assets of the Company, both present and future, including its uncalled
capital, by special assignment or otherwise or to transfer or convey the same
absolutely or in trust and to give the lenders power of sale and such other
powers as may seem expedient and to purchase, redeem or pay off such
securities, provided that the Company shall not carry on the business of
banking within the meaning of the Banking Regulations Act, 1949

14) Subject to Section 77 of the Companies Act, 1956, to invest in other than
investment in Company’s own shares and deal with money of this Company
not immediately required upon such shares or upon such securities or
investments and in such manner as may, from time to time, be determined.

15) To advance money not immediately requires by the Company or give credit
to such persons, firms or companies and on such terms with or without
security as may seem expedient and in particu1ar to customers of and others
 having dealings with the Company and to give guarantees or securities for any
such persons, firms or companies as may appear proper or reasonable to the
directors, provided that the Company shall not carry on the business of
banking, within the meaning of Banking Regulation Act, 1949.

16) To improve, alter, manage, develop, exchange, lease, mortgage, enfranchise,

dispose of, trun to account or otherwise deal with all or any part of the land,
properties, assets and rights and the resources and undertakings of the
Company, in such manner and on such terms as the Company may think fit,
subject to the provisions of the Act.

17) To remunerate any person or company for services rendered or to be rendered

in or about the formation or promotion of the Company or the conduct of its
main business, Subject to the provisions of Section 314 of the Act.

18) To create any depreciation fund, reserve fund, sinking fund, provident fund,
super-annuation fund or any special or other fund, whether for depreciation or
for repairing, improving, extending or maintaining any of the properties of the
Company or for redemption of debentures or redeemable preference shares,
worker’s welfare or for any other such purpose conducive to the interest of the
Company.

19) To provide for the welfare of employees or ex-employees (including Directors

and other officers) of the Company and the wives and families or the
dependents or connections of such persons, by building or contributing to the
building of houses, dwellings or chawls or by grants of money, pensions,
allowances, bonus or such other payments or by creating and from time to
time subscribing or contributing to provident fund and other associations,
institutions, funds or trusts and/or by providing or subscribing or contributing
towards places of instruction and recreation, hospitals and dispensaries,
medical and other such attendances and assistance as the Company shall think
fit.

20) To undertake and execute any trusts, the undertaking of which may seem
desirable, either gratuitously or otherwise for the attainment of the main
objects of the Company.

21) To procure the incorporation, registration or such other recognition of the

Company in the Country, State or place outside India and to establish and
maintain local, registered and branch places of the business in any part of the
world.
 22) To adopt such means of making known the business of the Company as may
seem expedient and in particular by advertising in the press, by circulars, by
purchase and exhibition of works of art or interest, by publication of books
and periodicals and by granting prizes, rewards and donations or holding
exhibitions.

23) To do all or any of the main objects as principals, agents, contractors, trustees
or otherwise and by or through trustees, agents or otherwise and either alone
or in conjunction with others and to do all such other things as are incidental
or as the Company may deem conducive to the attainment of the main objects
or any of them.

B. THE OTHER OBJECTS ARE:-

1) To assist any Company or such other enterprises in its dealings with any
Governmental, local, statutory and such other authority whether in India or
abroad in the legitimate pursuit of its activities and to procure capital for any
Company or enterprises.

2) To carry on the business of manufactures of and dealers in men’s, women’s

and children’s clothing and wearing apparel of every kind, nature and
description made from cotton, synthetic, wool and/or leather.

3) To carry on the business of manufacturers and dealers of hosiery goods of

every kind, nature and description for men, women and children.

4) To car on the business of manufactures of and dealers in all kinds of carpets,

duries, mats, rugs, blankets and similar articles of woollen and worsted
materials.

5) To carry on the business or businesses of manufactures, importers and

exporters of and dealers in forgings, press structural and rolling works of all
kinds, and in particular (i) bolts and nuts, rivets, washers, wires, nails, screws,
hinges, hooks, bolts, tower bolts, dogspikes and press work of all kinds; (ii)
rods, bars, wires, sheets and all kinds of ferrous and non-ferrous rolling
works; (iii) hand and machine tools; (iv) sanitary fittings and sanitary pipes;
(v) utensils and cutlery of steel or aluminium (vi) electrical appliances gadgets
and (vii) cycle parts.

6) To carry on the business or businesses of manufacturers, importers and

exporters of brushes of all kinds.
7) To carry on the business of manufactures of and dealers of all kinds of paper
and paper products

8) To guarantee the payment or performance of any contracts or obligations or

become surety for any person, firm or company for any purpose and to act as
agents for the collection, receipt or payment of money and to act as agents for
and render services to customers and others and to give guarantees and
indemnities.

9) To deal in shares and other securities in all its branches.

10) To carry on the business of steam and general laundry and to wash, clean,
purify, bleach, wring, dry, iron, colour, dye, disinfect, renovate, and prepare
for use all articles of wearing apparel household, domestic and other linen and
cotton and woollen goods and clothing and fabrics of all kinds and to buy,
sell, hire, manufacture, repair, let on hire, alter, improve, treat and deal in all
apparatus machines, material and articles related thereto.

11) To carry on the business of importers and exporters, of shipowners, ship

builders, charterers of ships and such other vessels of all types warehousemen,
ships and insurance brokers, forwarding agents and wharfingers.

12) To carry on the business as proprietors and publishers of newspapers,

periodicals, journals, books and such other literary works and undertakings of
all types.

13) To carry on the business as manufacturers of and dealers in all kinds of natural
and synthetic rubbers, elastomers, synthetic resin, latex and formulations
thereof and of all types of rubber products and goods.

14) To carry on the business as manufacturers of and dealers in leather and leather
goods of all descriptions and of leather dresses, tanners, hides, skins and all
things and material Connected therewith.

15) To carry on the business as manufactures of and dealers in all types of plastics
and plastic products, furniture, fancy goods, stationery, provisions drugs and
articles of household use and Consumption.

16) To carry on the business of canning and food preservation, tinning and
bottling of food stuffs, meat, meat products, potted meats, fruits, vegetables,
jam, pickles, sausages, table delicacies and preserved provisions of all kinds
and to establish, own, operate, acquire, run and manage canning and other
 factories for the purpose of packing, preserving and canning such articles and
products.

17) To carry on the business as manufactures, processors, producers of and

dealers in dairy, farm and garden produce of all kinds, such as milk, cream,
butter, ghee, cheese, condensed milk, milk powder, malt products, milkfoods
and milk products and milk preparations of all description, vegetables and
fruits of all kinds.

18) To carry on the business of manufactures of,and dealers in and sellers of all or
any types of electronic components, their raw materials and equipments, audio
products, electronic calculators, digital products, micro processor based
systems, mini computers, communication equipment and process control
equipment, instrumentation and industrial and professional grade electronic
equipments.

19) To carry on the business of mechanical engineers, iron founders,

manufacturers of surgical and scientific materials and apparatus of all kinds,
tool makers, assemblers, brass founders, metal workers, boiler makers, mill-
wrights, iron and steel converters, smiths, metallurgists tube makers,
galvanisers, electro-platers, water works engineers, gas generators, and to buy,
sell, manufacture, repair, convert, alter, let on hire and deal in machinery,
implements, rolling stock and hardware of all kinds.

20) To carry on the business of advisors on problems relating to the administration

and organisation of industry and business and to advise upon the means and
methods for extending, developing and improving all types of business or
industries and all systems and processes relating to the production, storage,
distribution, marketing and sale of goods and/or relating to the rendering of
the services.

21) To engage in research in all problems relating to industrial and business

management and distribution, marketing and selling and to collect, prepare
and distribute information and statistics relating to any type of business or
industry.

22) To carry on the business of manufacturers, buyers, sellers, importers,

exporters and dealers in textile such as man made fibres, cotton, silk, jute,
woollen and synthetics and their ready made garments.
 23) To carry on the business of manufacturing, rolling and processing of all kinds
of steel, ferrous and non-ferrous ingots, billets and of all articles and things
used in the manufacture, maintenance and working thereof.

24) To carry on the business of manufacturing and/or processing of oxygen and

other gases, chemicals industrial alcohols, graphite electrodes and petroleum
vegetables oils, alcoholic and non- alcoholic drinks and beverages of all kinds
and brewers and distillers.

25) To carry on the business of manufacturers, dealers and fabricators of

components, gadgets, accessories and ancillaries, instruments relating to
conversion of solar energy into heat and electricity and also relating to
conversion of all kinds of renewable sources of energy and also conservation
of energy.

26) To carry on the business of export or import agent, commission agent of any
other such item as required by foreign or Indians buyers.

4. The Liability of the members is Limited.

5. The Authorised Share Capital of the Company is Rs. 3,00,00,000!- (Rupees

Three Crore) divided in to 30,00,000 (Thirty Lakhs) EquIty Shares of Rs. 10!-
(RupeesTen)each.
We, the several persons, whose names and addresses are subscribed hereto, are desirous of being
formed into a Company in pursuance of this Memorandum of Association, and we, respectively
agree to take the number of shares in the capital of the Company, set opposite our respective
names-

Names, description, Number of and type Signature of Names, addresses

occupation and of Subscribed shares subscribers description,
addresses of each occupation and
subscribers signature of witness
or witnesses

Subhash Chander 10000 Sd/-

Gumber (Ten Thousands)
S/o L. Sh. B.L. Equity Shares
Gumber
151, Sector-16A I witness the
Faridabad (Business) signatures of all the
subscribers who have
signed at Faridabad in
my presence.
Ritesh Gumber 100 Sd/-
S/o Sh. S.C. Gumber (One Hundred)
151, Sector-16A Equity Shares Sd/-
Faridabad (Business)
(NARINDER K.
ARORA)
M. No. 87045
S/o Sh. M.R. Arora
Kamlesh Gumber 100 Sd/- Chartered Accountant
W/o Sh. S.C. Gumber (One Hundred) B-498, Nehru Ground
151, Sector-16A Equity Shares Faridabad
Faridabad (Business)

Total 10200
(Ten Thousand
and Two Hundred)
Equity Shares

Place: Faridabad Dated : 15th day of March, 2001

(THE COMPARES ACT, 1956)
(COMPANY LIMITED BY SHARES)
ARTICLES OF ASSOCIATION
OF
GLOBAL AUTOMOTIVE COMPONENTS
PRIVATE LIMITED

I. PRELIMINARY

1. The Regulation contained in Table ‘A’ in the Schedule I to the Companies Act, 1956 shall
apply to the Company except in so far as otherwise expressly incorporated hereinafter.
II. INTERPRETATION

2. (I) In these Regulations —

(a) “The Act” means the Companies Act, 1956,as amended, from time to time.
(b) “The Seal” means the Common Seal of the Company.
(ii) Unless the context otherwise requires, words or expressions contained in these
regulations shall bear the same meaning as in the Act or any statutory modifications thereof
in force.
Ill. PRIVATE COMPANY

3. This Company is a Private Company within the meaning [Link] 2(35) and 3 (1) (iii) of
the Companies Act, 1956 and accordingly: —

(a) No invitation shall be issued to the public to subscribe for any shares in or
debentures of the Company;

(b) The number of members of the Company (exclusive of persons who are in the
employment of the Company, and persons, who having been formerly in the
employment of the Company, were members of the Company while in that
employment and have continued to be members after the employment ceased)
is limited to fifty provided that for the purpose of this definition, where two or
more persons jointly hold one or more shares in the Company, they shall be
treated as a single member; and

(c) The right to transfer the shares in the Company is restricted in the manner and
to the extent hereinafter appearing.

(d) Prohibit any invitation or acceptance of deposits from persons other than its
members, directors or their relatives.
 IV. CAPITAL

4. The Authorised Share Capital of the Company shall be such as given in the Clause V of the
Memorandum of Association or altered, from time to time, thereat payable in the manner as
may be determined by the Directors, with power to increase, reduce, sub-divide or to repay
the same or to divide the same into several classes and to attach. thereto any rights and to
consolidate or sub-divide or re-organise the shares and subject to the provisions of the Act, to
vary such rights as may be determined in accordance with the regulations of the Company.
The company shall have minimum paid up capital of Rs. 1/- Lakh.

5. The shares shall be under the control and disposal of the Directors who may allot or
otherwise dispose of the same to such persons and on such terms as the Directors think fit
and to give any persons any shares whether at par or at a premium and for such consideration
as the Directors may think fit.

6. The Directors may allot and issue shares in the capital of the Company on full payment or
part payment or for any property, goods or machinery supplied, sold or transferred or for
services rendered to the Company.
V. TRANSFER AND TRANSMISSION OF SHARES

7. Any member desiring to sell any of his shares must notify in writing to the Board of
Directors of the number of shares, the fair value and the name of the proposed transferee and
the Board of Directors must offer to the other shareholders, the shares offered at the fair
value and if the offer is accepted, the shares shall be transferred to the acceptor and if the
shares or any of them are not so accepted within one month from the date of notice to the
Board, the members proposing transfer shall, at any time within three months afterwards, be
at liberty, subject to Articles 8 and 9 thereof, to sell and transfer the shares to’ any person at
the same or at higher price.
In case of any dispute, regarding the fair value of the share it shall be decided and fixed by
the Company’s Auditors whose decision shall be final.

8. (i) No transfer of shares shall be made or registered without the previous sanction of the
Directors, except when the transfer is made by any member of the Company to another
member or to a member’s spouse or child or children or his/her heirs and the Directors may
decline to give such sanction without assigning any reason, subject to Section 111 of the Act.
(ii) The Directors may also decline to register any transfer of shares if they are of the opinion
that it would not be desirable to allow the Proposed transferee tobecome a member of, or to
increase his holding in the Company.

9. The Directors may refuse to register any transfer of shares (1) where the Company has a lien
on the share or (2) where the share is not a fully paid-up shares, subject to Section 111 of the
 Companies Act, 1956.
VI. GENERAL MEETINGS

10. All General Meetings other than the Annual General Meeting shall be called Extra-ordinary
General Meetings.

11. (i) The Board of Directors may, whenever it thinks fit, call an Extra- ordinary General
Meeting,
(ii) If at any time there are not within India Directors capable of acting who are sufficient In
number to form a quorum, any Director or any two members of the Company may call an
Extra-ordinary General Meeting in the same manner, as nearly as possible, as that in which
such a meeting may be called by the Board,
(iii) Subject to Section 190 and 219 of the Act, any general meeting may be called by giving
to the members clear seven days notice or a shorter notice than of seven days if consent
thereto is given by members In accordance with the provisions of Section 171 of the
Companies Act, 1966.
VII. PFOCEEDINGS AT GENERAL MEETINGS

12. (1) No business shall be transacted at any General Meeting unless a quorum of members is
present at the time when the meeting proceeds to business.
(2) At least two members present In person shall be a quorum.

13. The Chairman if any, of the Board of Directors shall preside as Chairman of every General
Meeting of the Company.

14. If there is no such Chairman or if he is not present within fifteen minutes after the time
appointed for holding the meeting or is unwilling to act as Chairman of the meeting, the
Directors present shall elect one of their members to be Chairman of the meeting.

15. If at any meeting, no Director is willing to act as Chairman or if no Director is present within
15 (fifteen) minutes after the time appointed for holding the meeting, the members present
shall choose one of their members to be Chairman of the meeting.

16. (i) The Chairman may with the consent of any meeting at which a quorum is present
and shall, if so directed by the meeting, adjourn the meeting, from time to time, and from
place to place.
(ii) No business shall be transacted at any adjourned meeting other than the business left
unfinished at the meeting from which the adjournment took place.
(iii) When a meeting is adjourned for thirty days or more, notice of the adjourned meeting
shall be given as in the case of an original meeting.
(iv) Save as aforesaid, it shall not be necessary to give any notice of an adjournment or of the
business to be transacted at an adjourned meeting.
17. In the case of equality of votes, whether on a show of hands or on a poll, the Chairman of the
meeting at which the show of hands takes place or at which the poll is demanded, shall be
entitled to a second or casting vote.

18. Any business other than that upon which a poll has been demanded may be proceeded with,
pending the taking of the pool,
VIII. DIRECTORS

19. The business of the Company shall be managed by the Directors who may pay all expenses
incurred in setting up and registering the Company and may exercise all such powers of the
Company as are not restricted by the act or any statutory modificaton thereof for the time
being in force or by these Articles required to be exercised by the Company in general
meeting subject nevertheless, to any regulations of these Articles, to the provisions of the
Act, and to such regulations inconsistent with the aforesaid regulations or provisions as may
be prescribed by the Company in general meeting. Nothing shall invalidate any prior act of
the Directors which would have been valid if that regulation has not been made.

20. The following shall be the first Directors of the Company :—

1. SUGHASH CHANDER GUMBER
2. RITESH GIJMBER
3. KAMLESH GUMBER

21. The number of Directors shall not be less than two and not more than twelve.

22. No person shall be elected as a Director (except as a first Director or a Director appointed by
the Directors) unless seven days notice shall have been left at the Registered Office of the
Company of the intention to propose him together with a notice in writing signed by himself
signifying his willingness to be elected.

23. The Directors need not hold any qualification shares in the Company.

24. (a) Subject to the provisions of the Companies Act, 1956 and Rules framed thereunder, each
Director shall receive out of the funds of the Company by way of sitting fees a sum not
exceeding Rs. 250/- (Rupees Two Hundred Fifty) for every board meeting attended by him.
(b) The Directors shall also be paid travelling and other expenses for attending and returning
from meetings of Board of Directors (including hotel expenses) and any other expenses
properly incurred by them in connection with the business of the Company. The Directors
may also be remunerated for any extra services done by them outside their ordinary duties as
Directors, subject to the provisions of Section 314 of the Act.

25. Subject to the provisions of the Companies Act, 1956, if any Director, being willing shall be
called upon to perform extra services for the purposes of the Company, the Company shall
 remunerate such Director by such fixed sum or percentage of profits or otherwise as be
determined by the Directors and such remuneration may be either in addition to or in
substitution for his remuneration as provided above.

26. Subject to the provisions of Section 314 of the Companies Act, 1956, the remuneration of
Directors may be a fixed sum or by a percentage of the net profits or otherwise.

27. Subject to Sections 297 and 299 of the Act, no Director shall be disqualified by his office
from contracting with the Company nor shall any such contract entered into by or on behalf
of the Company in which any Director shall be in any way interested be avoided, nor shall
any Director contracting or being so interested be liable to account to the Company for any
profit realised by any such contract by reason only of such Director holding that office or of
the fiduciary relations thereby established but it is declared that the nature of his/her interest
must be disclosed by him/her at the meeting of the Directors at which the contract is
determined, if his/her interest then exists or in any other case, at the first meeting of the
Directors after he/she acquires such interest.

28. The Directors may appoint any person to be an alternate Director to act for a Director
(hereinafter in this Article called the original Director) during his absence for a period not
less than three months from the State in which meetings of the Directors are ordinarily held,
but such alternate Director shall, ipso facto vacate office if and when the original Director
returns to the State in which the meetings of the Directors are ordinarily held, subject to
Section 313 of the Act.

29. The Directors shall not be liable to retire from the office by rotation.

30. The Company may, from time to time, by ordinary resolution increase or reduce the number
of Directors within the limits specified in Article 21.

31. The Directors shall have the power, at any time and from time to time, to appoint any person
as Additional Director in addition to the existing Directors but so that the total number of
Directors shall not at any time exceed the number fixed for Directors in these articles. Any
Director so appointed, shall hold office only until the next following annual general meeting,
but shall be eligible there at for election as Director.
32. The Company, may by special resolution, of which special notice has been given in
accordance with the provisions of the Section 190 of the Companies Act, 1956 remove any
director including the Managing Director, if any, before the expiration of the period of his
office, notwithstanding anything contained in these articles or in any agreement between the
Company and such Director, such removal shall be without prejudice to any contract of
service between him and the Company.

33. If the Director appointed by the Company in the general meeting, vacates office as a Director
before his term of office will expire in the normal course, the resulting casual vacancy may
be filled up by the Board of Directors at a meeting of the board, but any person so appointed
shall retain his office so long only as the vacating Director would have retained the same if
vacancy had not occurred, provided that the Board may not fill such a vacancy by appointing
thereto any person who has been removed from the office of Director under Article 32.

34. Subject to Sections 58-A and 292 of the Act, in the event of Company borrowing any money
from any financial corporation or institution or Government or any Government body or a
collaborator, bank, person or persons or from any other source, while any money remains due
to them or any of them, the lender concerned may in case loan agreement so provides
exercise the right and power to appoint from time to time, any person or persons to be a
Director or Directors of the Company and the Directors so appointed shall not be liable to
retire by rotation, subject, however, to the limits prescribed by the Companies Act, 1956.
Any person so appointed, may at any time be removed from the office by the appointing
authority who, may from the time of such removal or in case of death or resignation of
person, may appoint any other or others in his place. Any such appointment or removal shall
be in writing, signed by the appointer and served on the company. Such Director need not
hold any qualification shares.

35. Section 283 of the Companies Act, 1956, shall apply regarding vacation of office by director.
A Director shall also be entitled to resign from the office of Directors from such date as he
may specify while so resigning.
IX. MANAGING DIRECTOR OR WHOLE TIME DIRECTOR
36. The Directors may, from time to time, subject to the provisions of Sections 197 A and
314 of the Companies Act, 1956, appoint one or more of their body to the office of the
Managing Director or Whole Time Director for such period and on such remuneration and
other terms, as they think fit and subject to the terms of any agreement entered into in any
particular case, may revoke such appointment. His/her appointment will be automatically
terminated if he ceases to be a Director.

37. A Managing or Whole Time Director may be paid such remuneration (whether by way of
salary, commission, or participation in profits or partly in one way and partly in other) as the
Directors may determine.

38. The Directors, subject to Section 292 of the Companies Act, 1956, may entrust to and confer
upon a Managing or Whole Time Director any of the powers exercisable by them, upon such
terms and conditions and with such restrictions, as they may think fit and either collaterally
with or to the exclusion of their own powers and may from time to time revoke, withdraw or
alter or vary all or any of such powers.
X. PROCEEDINGS OF THE BOARD

39. The quorum necessary for the transaction of the business of Directors shall be minimum two
or one third of the total number of Directors whichever is higher subject to Section 287 of the
Companies Act, 1956.

40. Subject to the provisions of Section 285 of the Act, a meeting of the Board of Directors shall
be held at least once in every three calendar months and atleast four such meetings shall be
held in each calendar year. The Directors may meet together for the discharge of the
business, adjourn and otherwise regulate their meetings and proceedings as they think fit.

41. Notice of every meeting of the Board of Directors of the Company shall be given in writing
to every Director for the time being in India and at his usual address in India to every other
Director.
42. A meeting of the Directors for the time being, at which a quorum is present, shall be
competent to exercise all or any of the authorities, powers and discretions by law or under the
Articles and regulations for the time being vested in or exercisable by the Directors.

43. The Managing Director or a Director may at any time or secretary upon the requisition of
Director (s) shall convene a meeting of the Directors.

44. The questions arising at any meeting of the Directors shall be decided by a majority of votes
and in case of any equality of vote, the Chairman shall have second or casting vote.

45. The Directors may elect a Chairman of their meeting and determine a period for which he is
to hold office. If at any meeting the Chairman is not present within fifteen minutes of the
time appointed for holding the same or is unwilling to preside, the Directors present may
choose one of their numbers to be the Chairman of such a meeting.

46. Subject to the provisions of Section 58A and 292 of the Act, and Regulations made
thereunder and directions issued by the Reserve Bank of India, the Directors may delegate
any of their powers, other than the power to borrow and to make calls issue debentures and
any other powers which by reason of the provisions of the Act cannot be delegated, to
Committees consisting of such member or members of their body as they may think fit, and
they may from time to time revoke and discharge any such Committee either wholly or in
part and either as to person or persons. Every Committee so formed, in exercise of powers so
delegated, shall conform to any regulations that may, from time to time, be imposed on it by
the Directors and all acts done by any such Committee in conformity with such regulations
and in fulfilment of the purpose of their appointment but not otherwise, shall have the like
force and effect as it done by the Board.

47. A resolution not being a resolution required by the Act or by these Article to be passed at a
meeting of the Directors, may be passed without the meeting of the directors or a Committee
of Directors provided that the resolution has been circulated in draft together with necessary
papers. if any, to all the Directors or to all the members of the Committee, than in India (not
less than the quorum fixed for a meeting of the Board or Committee, as the case may be) and
 to all other Directors or members at their usual addresses in India, and has been approved by
such of the Directors as then in India or by a majority of such of them as are entitled to vote
on the resolution.

48. All acts done by a person shall be valid, notwithstanding that it may be afterwards discovered
that his appointment was invalid by reason of any defect or disqualification or had terminated
by virtue of any provisions contained in the Act or in these Articles. Provided that this
Article shall not give validity to acts done by a Director after his appointment has been
shown to the Company to be invalid or to have terminated.
Xl. POWERS OF THE DIRECTORS

49. Subject to Sections 292 of the Act, the Directors shall have the right to delegate any of their
powers to such managers, agents or other persons as they may deem fit and may at their own
discretion revoke such powers.

50. The Directors shall have powers for the engagement and dismissal of managers, engineers,
clerks and assistants and shall have power of general direction, management and
superintendence of the business of the Company with full powers to do all such acts, matters
and things deemed necessary, proper or expedient for carrying on the business of the
Company, and to make and sign all such contracts and to draw and accept on behalf of the
Company all such bills of exchange, hundies, cheques, drafts and other Government papers
and instruments that shall be necessary, proper or expedient, for the authority and direction
of the Company except only such of them as by the Act or by these present are expressly
directed to be exercised by shareholders in the general meetings.
XII. INSPECTION OF ACCOUNTS

51. (1) The Board of Directors cause proper books of account to be maintained under Section
209 of the Act.
(2) The Board of Directors shall also, from time to time, determine Whether and to what
extent and at what times and places and under what conditions or regulations account books
of the Company or any of them, shall be open to the inspection of members not being
Directors.
(3) No member (not being a Director) shall have any right of inspecting any account book or
 document of the company except as conferred by law or authorised by the Board or by the
Company in general meetings

XIII. SECRECY

52. Subject to the provisions of the Act, every manager, auditor, trustee, member
of committee, officer, servant, agent, accountant or other person employed in
the business of the Company shall, if so required by the Board of Directors,
before entering upon his duties, sign a declaration pledging himself to observe
strict secrecy respecting all transaction of the Company with its customers
and the state of accounts with individuals and in matters relating thereto and
shall by such declaration pledge himself not to reveal any of the matters
which may come to his knowledge in the discharge of his duties except when
required to do so by the Directors or by any general meeting or by the law of
country and except so far as may be necessary in order to comply with any of
the provisions of these presents and the provisions of the Companies Act,
1956.
XIV. BORROWING POWERS

53. Subject to the provisions of Section 58A and 292 of the Companies Act, 1956 and
Regulations made thereunder and directions issued by the Reserve Bank of India, the
Directors shall have the power, from time to time and at their discretion, to borrow, raise or
secure the payment of any sum of money for the purpose of the Company in such manner
and upon such terms and conditions in all respects as they think fit and in particular by the
issue of debentures or bonds of the Company or by mortgage or charge upon all or any of the
properties of the Company both present and future including its uncalled capital for the time
being.
XV. OPERATION OF BANK ACCOUNTS

54. The Directors shall have the power to open Bank Accounts, to sign cheques on behalf of the
Company and to operate all Banking accounts of the Company and to receive payments make
endorsements, draw, and accept negotiable instruments, hundies and bills or may authorise
any other person or persons to exercise such powers.
XVI. INDEMNITY

55. Subject to the provisions of Section 201 of the Companies Act, 1956, the Chairman,
Directors, Auditors, Managing Directors and other officers for the time being of the
Company and any trustees for the time being acting in relation to any of the affairs of the
Company and their heirs executors, administrator shall be indemnified out of the assets and
funds of the Company from or against all suits, proceedings, costs, charges, losses, damages
 and expenses which they or any of them shall or may incur or sustain by reason of any act
done or committed in or about the execution of their duties in their respective offices except
those done through their wilful neglect or default. Any such officer or trustee shall not be
answerable for acts, omissions, neglects or defaults of any other officer or trustee.
XVII. WINDING UP

56. (i) If the Company shall be wound-up, the liquidator may, with the sanction of a special
resolution of the Company and any other sanction required by the Act, divide amongst the
members in specie or in otherwise the whole or any part of the assets of the Company,
whether they consist of property of the same kind or not.

(ii) For the purpose aforesaid, the liquidator may set such value as he deems fair upon any
property to be divided as aforesaid and may determine how such division shall be carried out
as between the members of different classes of members.

(iii) The liquidator may, with the like sanction, vest the whole or any part of such assets in
trustees upon such trusts for the benefit of the contributories as the liquidator shall think fit but
so that no member shall be compelled to accept any shares or other securities whereon there is
any liability.

57. (i) The Board of Directors shall provide a common seal for the purpose of the Company and
shall provide for the safe custody of the same.

(ii) The seal may not be affixed to any instrument except by the authority of resolution of the
Board or of a committee of the Board authorized by it in that behalf and except in the
presence of at least one director and that one director shall sign every instrument to which the
seal of the Company is so affixed in his presence. The share certificate will, however, be
signed and sealed in accordance with Rule 6 of the Companies (Issue of Share Certificates)
Rules, 1960,

XIX. BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

58. The Directors shall lay before each Annual General Meeting, the Profit and Loss Account for
the financial year of the Company and Balance Sheet made upto the end of the financial year
only and audited by a qualified auditor under the provisions of the Act.
XX. AUDIT
59. The first Auditors of the Company shall be appointed by the Board of Directors within one
month after its incorporation who shall hold office till the conclusion of first annual general
meeting.
60. The Directors may fill up any casual vacancy in the office of the Auditors.
61. The remuneration of the Auditors shall be fixed by the Company in the Annual General
Meeting except that remuneration of the first or any Auditors appointed by the Directors may
be fixed by the Directors.

Names, description, Signature of subscribers Names, addresses description,

occupation and addresses of occupation and signature of
each subscribers witness or witnesses

Subhash Chander Gumber Sd/-

S/o L. Sh. B.L. Gumber
151, Sector-16A
Faridabad (Business)
I witness the signatures of all
the subscribers who have
signed at Faridabad in my
Ritesh Gumber presence.
S/o Sh. S.C. Gumber
151, Sector-16A Sd/-
Faridabad (Business) Sd/-

(NARINDER K. ARORA)
M. No. 87045
S/o Sh. M.R. Arora
Kamlesh Gumber Chartered Accountant
W/o Sh. S.C. Gumber B-498, Nehru Ground
151, Sector-16A Sd/- Faridabad
Faridabad (Business)

Place: Faridabad Dated : 15th day of March, 2001

RESEARCH METHODOLGY

Methods of data collection;-

Secondary data

The secondary data is derived from the annual reports, Business line and finance

newspapers websites and the internal auditing books of Global Automotive.

PERIOD OF THE STUDY:

The study covers the time period of 3 years from the financial year 2015-16 and 2017-18.
 PRODUCT LINE

Global Automotive is the world leader in the design and production of complete exhaust
and silencer mounting components and catalytic converter components starting from the
engine manifolds to the exhaust tail.

They have more than 5000 kinds of exhaust components for all European, American and
Japanese vehicles. This includes exhaust flange gaskets, exhaust manifold gaskets,
wiremash and graphite rings, hangers, flanges, rubber hanger, pipe connector and
complete exhaust mounting kits.

All the material they use in their components qualify the euro norms and north
American standards.

COMPLETE EXHAUST MOUNTING COMPONENTS & KITS

 FLANGES

A flange is a plate or ring to form a rim at the end of a pipe when fastened to a pipe.
A blind flange is a plate for covering or closing the end of a pipe. A flange joint is
the connection of pipes where the connecting pieces have flanges by which the parts are
bolted together.
 WIREMASH

Wiremash is an electric fusion welded prefabricated joined grid consisting of a series of

parallel longitudinal wires with accurate spacing welded to cross wires at the required
spacing. It is a metal wire screen that is made up of low carbon steel wire or stainless
steel wire. It is available in various shapes and sizes. It is widely used in agricultural,
industrial, transportation, horticulture and food procuring sectors. It is also used in mines,
gardening, machine protection and other decorations.
 PIPE CONNECTORS

Pipe connectors, also known as pipe fittings, attach one pipe to another in order to
lengthen the run or change the flow direction in a plumbing system. These are used to
combine, divert or reduce the flow of water supply, and they come in a variety of sizes
to fit the pipe they will connect.

Pipe fittings dimensions are important and there are sizing standards to follow. While
most have openings of the same size on each end, some fittings are designed with
different- sized openings and serve as the transition from one size pipe to another.
 U-CLAMP

U-clamp is a bolt in the shape of then letter U with screw threads on both ends.

U-clamp have primarily been used to support pipework, pipes through which fluids and
gassas pass. As such, u-bolts were measured using pipe-work engineering speak. A u-bolt
would be described by the size of pipe it was supporting. U-bolts are also used to hold
ropes together.

These are used by a much wider audience to clamp any kind of tubing/ round bar, then
a more convenient measurement system needs to be used.
 SERVICES

Global Automotiveprovides various services to their customers an pays special attention

to its quality and [Link] of them are:

 They serve around the world with complete range. They provide the complete
solutions whether it is a very low volume part or a very high volume part.
 They have a professional network and wide experiences for distributing their products
worldwide. They keep enough stock at their end, so that they can cater to the
aftermarket anytime with immediate supply.
 They provide the customized packaging like single piece pouch packaging with
company logo, bar code label, etc. and the printed box. They also follow the below
mentioned guidelines for packaging
 They pad all sharp edges, corners, and burrs of parts such as sheet metal
and bare metal.
 They pad or cover precision machined areas of parts, such as threads and
fittings.
 They protect all parts that are susceptible to damage due to dents,
scratches, and scuffing by using an appropriate amount of cushioning
material and placing in a sturdy shipping container.
 They place documentation and shipping or routing labels on flat surfaces
that will allow for maximum adhesion. Avoid placing labels around curved
surfaces.
 Their aftermarket strength is further augmented by their ability to introduce new
product lines in quick time. Their in-house design facility is so fast in developing
new products that they can promptly cater to new requirements of their customers.
 PRODUCT DEVELOPMENT AND TECHNOLOGY

Global Automotive ensure that the company is in tandem with the latest technology, with
respect to the end product performance and needs.

Their product development department does the reverse engineering and make products
similar to the OE Quality and Performance. Before validating the product, they conduct
complete performance tests like load test, torque test, leakage test, endurance test and
aging test. They do the specific product test also as per customer requirement.
 ANALYSIS AND

INTERPRETATION OF DATA
 GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

BALANCE SHEET AS AT 31st MARCH 2016

PARTICULARS NOTES TO AS AT 31.03.16 AS AT 31.03.15

ACCOUNTS
EQUITY AND LIABILITIES
1) Shareholder’s Funds 1
Share capital
Reserves and Surplus 2
Money Received Against
Share warrants

2) Share Application Money

Pending Allotment

3) Non- Current Liabilities

Long Term Borrowings
3
Deferred Tax Liabilities (net) 4
Other Long Term Liabilities
Long Term Provisions

4) Current Liabilities 5
Short Term Borrowings 6
Trade Payables 7
Other Current Liabilities
Short Term Provisions 8
 TOTAL

ASSETS
1) Non Current Assets
Fixed Assets
Tangible Assets
Capital Work In Progress
Long Term Loans and
Advances
Other Non Current Assets
2) Current Assets
Current Investments
Inventories
Trade receivables
Cash and cash equivalents
Short term loans and
Advances
Other Current Assets

TOTAL
 GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED 31st MARCH, 2016

[Link]. PARTICULARS NOTES YEAR YEAR

ENDED ENDED
31.03.16 31.03.15
IN IN RUPEES
RUPEES
1. Revenue from operations
2. Other Income

3. Total Revenue

4. Expenses
Cost of Materials Purchased
Change in Inventories
Employee Benefits Expenses
Finance Cost
Depreciation Expenses
Other Expenses

Total Expenses

5. Profit before exceptional and

extraordinary items and tax

6. Exceptional items

7. Profit before extraordinary items and

tax

8. Extraordinary items

Profit before tax

9.
Tax expenses
10. Current tax liabilities
Deferred tax
 Profit for the year from continuing
11. operations

Profit for the year for discontinuing

12. operations

Tax expenses of discontinuing

13. operations

Profit from discontinuing operations

14. and tax

15. Profit for the year

Earning per equity share

16. Basic
Diluted
 GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

BALANCE SHEET AS AT 31st MARCH 2017

PARTICULARS NOTES TO AS AT 31.03.17 AS AT 31.03.16

ACCOUNTS
EQUITY AND LIABILITIES
5) Shareholder’s Funds
Share capital
Reserves and Surplus
Money Received Against
Share warrants

6) Share Application Money

Pending Allotment

7) Non- Current Liabilities

Long Term Borrowings
Deferred Tax Liabilities (net)
Other Long Term Liabilities
Long Term Provisions

8) Current Liabilities
Short Term Borrowings
Trade Payables
Other Current Liabilities
Short Term Provisions
 TOTAL

ASSETS
3) Non Current Assets
Fixed Assets
Tangible Assets
Capital Work In Progress
Long Term Loans and
Advances
Other Non Current Assets
4) Current Assets
Current Investments
Inventories
Trade receivables
Cash and cash equivalents
Short term loans and
Advances
Other Current Assets

TOTAL
 GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED 31st MARCH, 2017

[Link]. PARTICULARS NOTES YEAR YEAR

ENDED ENDED
31.03.17 31.03.16
IN IN RUPEES
RUPEES
1. Revenue from operations
2. Other Income

3. Total Revenue

4. Expenses
Cost of Materials Purchased
Change in Inventories
Employee Benefits Expenses
Finance Cost
Depreciation Expenses
Other Expenses

Total Expenses

5. Profit before exceptional and

extraordinary items and tax

6. Exceptional items

7. Profit before extraordinary items and

tax

8. Extraordinary items

9. Profit before tax

10. Tax expenses

Current tax liabilities
Deferred tax
11. Profit for the year from continuing
operations

12. Profit for the year for discontinuing

operations

13. Tax expenses of discontinuing

operations

14. Profit from discontinuing operations

and tax

15. Profit for the year

Earning per equity share

16. Basic
Diluted
 GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

BALANCE SHEET AS AT 31st MARCH 2018

PARTICULARS NOTES TO AS AT 31.03.18 AS AT 31.03.17

ACCOUNTS
EQUITY AND LIABILITIES
9) Shareholder’s Funds
Share capital
Reserves and Surplus
Money Received Against
Share warrants

10) Share Application Money

Pending Allotment

11) Non- Current Liabilities

Long Term Borrowings
Deferred Tax Liabilities (net)
Other Long Term Liabilities
Long Term Provisions

12) Current Liabilities

Short Term Borrowings
Trade Payables
Other Current Liabilities
Short Term Provisions
 TOTAL

ASSETS
5) Non Current Assets
Fixed Assets
Tangible Assets
Capital Work In Progress
Long Term Loans and
Advances
Other Non Current Assets
6) Current Assets
Current Investments
Inventories
Trade receivables
Cash and cash equivalents
Short term loans and
Advances
Other Current Assets

TOTAL
 GLOBAL AUTOMOTIVE COMPONENTS PRIVATE LIMITED

STATEMENT OF PROFIT AND LOSS

FOR THE YEAR ENDED 31st MARCH, 2018

[Link]. PARTICULARS NOTES YEAR YEAR

ENDED ENDED
31.03.18 31.03.17
IN IN RUPEES
RUPEES
1. Revenue from operations
2. Other Income

3. Total Revenue

4. Expenses
Cost of Materials Purchased
Change in Inventories
Employee Benefits Expenses
Finance Cost
Depreciation Expenses
Other Expenses

Total Expenses

5. Profit before exceptional and

extraordinary items and tax

6. Exceptional items

7. Profit before extraordinary items and

tax

8. Extraordinary items

9. Profit before tax

10. Tax expenses

Current tax liabilities
Deferred tax
11. Profit for the year from continuing
operations

12. Profit for the year for discontinuing

operations

13. Tax expenses of discontinuing

operations

14. Profit from discontinuing operations

and tax

Profit for the year

15.

16. Earning per equity share

Basic
Diluted
In this chapter an attempt has been made to analysis how efficiently the analysis
of Financial statement is managed in Global automotive private limited.
Financial tools such as schedule of changes in ratio analysis, least squares,
comparative statements have been used for the purpose of analysis.

The financial statement involves recording classifying and summarizing of

various business transactions. It is prepared for the purpose of presenting a
periodical review or report of the progress made by the concern and deals with the
state of the investment, in the business and ‘result achieved’ during the accounting
period. Financial statement, income statement and position statement are the outcome of
accounting process.

Ratio analysis is a technique of analysis and interpretation of financial

statements. It is used as a device to analysis and interpret the financial health of a firm.
Analysis of a financial statement with the aid of ratio helps to arrangements in decision
making control.

1) Current Ratio

Current ratio may be defined as the relationships between current assets and
current liabilities. It is the most common ratio for measuring liquidity. It is calculated by
dividing current assets by current liabilities. Current assets are those, the amount of
which can be realized within a period of one year. Current liabilities are those
amounts which are payable within a period of one year. A current ratio of 2:1 is
considerable ideal.

Current Ratio = Current assets / Current liabilities

 TABLE – 4.1 Current Ratio

(in crores)

Year Current Assets Current liabilities Current Ratio

2015-2016 2176 1917 1.13

2016-2017 1642 1345 1.22

2017-2018 2300 2297 1.001

Source : secondary Data

Interpretation

Current ratio during the year 2015-16 is the 1.13. In the next year 2016-17 it was
maximum 1.22 and in the last year 2017-18 the current ratio decreased to 1.001.

The ideal value of current ratio is 2:1, but during the period of study, the current
ratio is lesser than the standard. This shows the current ratio to shows a do downward
which indicates the inefficiency of the company to meet its current obligations.
CHART NO.1/

2500

2000

1500
Current Assets
Current Liabilities
1000 Current Rartio

500

Current Rartio

0 Current Liabilities
2015-16 Current Assets
2016-17
2017-18
2) Liquid Ratio:-

The term ‘Liquidity’ refers to the ability of a firm to pay its short – term
obligations as and when they become due. The term quick assets or liquid assets refers
current assets, which can be converted into cash immediately. It comprises all current
assets except stock and prepaid expenses. It is determined by dividing quick assets by
quick liabilities.

Liquid Ratio = Liquid assets / Current liabilities

TABLE – 4.2 Liquid Ratio

(in crores)

Year Current Assets Current liabilities Current Ratio

2015-2016 2076 1917 1.08

2016-2017 1459 1345 1.08

2017-2018 1655 2297 0.72

Source : Secondary Data

Interpretation

Liquid ratio during the year 2015-2016 it attains the maximum value of 1.08. in
the year 2016-2017 is 1.08. In the next year, 2017-2018 it decreased to 0.78.
 During the period of study, the value of liquid ratio is higher than the ideal value
which indicates the efficiency of the company to meet is immediate requirements. The
overall trend of liquid ratio shows up and down ward trend.

CHART NO.2

2500

2000

1500
Liquid Assets
Current Liabilities
1000 Liquid Ratio

500

Liquid Ratio
0 Current Liabilities
2015-2016 Liquid Assets
2016-2017
2017-2018
3) Proprietory Ratio :

Proprietory ratio relates to the proprietors funds to total assets. It revels the

owners’ contribution to the total value of assets. This ratio shows the long – time

solvency of the business. It is calculated by dividing proprietor’s funds by the total

tangible assets.

Proprietory Ratio = Proprietor’s fund / Total tangible assets

TABLE – 4.3 Proprietory Ratio

(in crores)

Year Proprietary Fund Total Proprietary

Assets Ratio

2015-2016 637 1017 0.62

2016-2017 690 1025 0.67

2017-2018 837 1071 0.78

/
Source : Secondary Data

Interpretation

Proprietory ratio during the year 2015-2016 was 0.62. In the year 2016-2017 the
proprietory ratio was slightly increase to 0.67. In the last year, 2017-2018 It further
increase to 0.78.

CHART NO.3

100%

90%

80%

70%

60%
Proprietory's Ratio

50% Total Tangible Assets

Proprietor Fund
40%

30%

20%

10%

0%
2015-2016 2016-2017 2017-2018
4) Fixed Assets to Net Worth Ratio:

This ratio shows the relationship between fixed assets and proprietor’s funds.
The purpose of this ratio is to fend out the percentage of the owners fund invested in
fixed assets.

Fixed Assets to Net worth Ratio = Fixed assets / Proprietor’s funds

TABLE - 4.4 fixed assets to Net worth Ratio

(in crores)

Year Fixed asset Proprietory Fixed asset to Net

worth ratio
Fund

2015-2016 1021 637 1.60

2016-2017 1817 690 2.63

2017-2018 2168 837 2.59

Sources : Secondary Data

Interpretation

Fixed asset to Net worth Ratio during the year 2015-16 was1.60. it was slightly reduced
by 1.10 in the 2015-2016 year. In the next year 2016-17 the net worth ratio 2.63.
maximum of 0.20 in the year 2010-2011
CHART NO.4

Fixed Assets to Net Worth Ratio

37.97% 23.47%

2015-2016
2016-2017
2017-2018
38.56%
5) Net Profit Ratio

Net Profit Ratio establishes a relationship between net profit (after taxes) and
sales. It is determined by dividing the net income after tax to the net sales for the period
and measures the profit per rupees of sales.

Net Profit Ratio = Net profit / Sales x 100

TABLE- 4.5 Net Profit Ratio

(in crores)

Year Net Profit Sales Net Profit

Ratio

2015-2016 73 3274 2.23

2016-2017 52 3657 1.42

2017-2018 96 4382 2.19

Source : Secondary Data

Interpretation

From the table, it is found that the net profit has been fluctuating during the
study period. In the year 2015-2016 the net profit ratio was 2.23%. In the year 2016-
2017 the net profit ratio was 1.42%. During the year 2017-2018 the net profit ratio was
2.19%

CHART NO.5

Net Profit Ratio

Net Profit Sales Net Profit Ratio

4382

3657
3274

73
2.23 52
1.42 96
2.19
2015-2016 2016-2017 2017-2018
6) Debtors turnover ratio

The purpose of this ratio is to discuss the credit collector power and policy of the
firm. This ratio is established between account receivable and net credit sales of the
period. The debtors turnover ratio is calculated as follows.

Debtors Turnover Ratio = Net credit sales / Average account receivables

Average account receivables = Total Debtors and B/R

TABLE No.4.7 Debtor Turn over (Rs in crores)

Year Sales Sundry debtors Debtors turn over ratio

Rs Rs

2015-2016 3440 966 3.56

2016-2017 3728 1006.5 3.70

2017-2018 4572 1126 4.06

Sources : Secondary Data

Interpretation

From the table, it is found that the Debtor Turnover ratio has been fluctuating
during the study period. In the year 2015-16 it was 3.56, It increases during the year
2016-17 was slightly to 3.70. In the year 2017-18 it was increased to 4.06.
CHART NO.6

6000

5000

4000
Debtors Turnover Ratio
3000 Average Sundry Debtors
Sales

2000

1000

0
2015-2016 2016-2017 2017-2018
7) Creditors turnover ratio:

It indicates the number of times on the average that the creditors turnover each
year. Creditors turnover ratio indicates the number of items the accounts payable
rotate in a year. It signifies credit period enjoyed by the firm in paying its creditors.
Account payable include traded creditors and bills payable.

. Creditors Turnover Ratio = Credit purchase / Average account payable

TABLE – 4.9 Creditor Turnover Ratio

(in crores)

Year Credit Purchase Average Account Creditor Turnover

payable ratio

2015-2016 1980 907.5 2.18

2016-2017 2110 796 2.65

2017-2018 3021 960.5 3.15

Source : Secondary Data

The creditor Turnover ratio during the year 2015-16 was 2.18. In the year 2016-
17 it was increased to 2.65. During the year 2010-2011 it was increased to 3.15.

From the above it in inferred that the creditors turnover ratio shows an upward
trend which indicates that the company is highly efficient in making. Speedy settlements
of debts to its creditors.
CHART NO.7

14

12

10
Series 3
8
Series 2
6 Series 1

0
Category 1 Category 2 Category 3 Category 4
8) Fixed assets turnover Ratio:

The ratio indicates that extent to which the investments in Fixed assets
contributes towards sales. If compared with a previous year, it indicates whether the
investment in Fixed assets has been judicious or not. The ratio is calculate as follows.

Fixed assets turnover ratio = Sales / Fixed assets

TABLE – 4.11 Fixed asset Turnover ratio

(in crores)

Year Sales Fixed asset Fixed asset

Turnover

2015-2016 3440 1021 3.37

2016-2017 3728 1816 2.05

2017-2018 4572 2167 2.11

Source : Secondary Data

Interpretation

The fixed asset turnover ratio during the year 2015-16 was 3.37. It is found that
the fixed asset turnover ration has been fluctuating during the study period. In the year
2016-17 it was 2.05. In the year 08-09 it was 14.51. During the year 2017-18 the fixed
asset turn over ratio was 2.11.
CHART NO.8

7000

6000

5000

Fixed Asset Turnover

4000
Fixed Asset
3000 Sales

2000

1000

0
2015-2016 2016-2017 2017-2018
9) Gross Profit Ratio:

Gross Profit ratio measures the relationship of gross profit to net sales and is
usually represented as a percentage. This ratio plays an important role in two
management areas. In the area of financial management, the ratio serves as a valuable
indicator of the firm’s ability to utilize effectively outside sources of fund. Secondly, this
ratio also serves as important tool in shipping the pricing policy of the firm. This ratio is
calculated by dividing gross profit by net sales.

Gross Profit Ratio = Gross profit / Net Sales x 100

Table – 4.16 Gross Profit ratio

(in crores)

Year Gross profit Sales Gross Profit Ratio

2015-2016 1161 3440 33.75%

2016-2017 1386 3728 37.18%

2017-2018 1472 4572 32.20%

Source : Secondary Data

The above table shaows that the Gross profit Ratio during the year 2015-16 was
33.75%. In the year 2016-17 it was increased to 37.18%. In the following year 2017-18
decreased to 32.20%.
CHART NO.9

100%

90%

80%

70%

60%
Gross Profit ratio
50%
Sales
40% Gross Profit
30%

20%

10%

0%
2015-2016 2016-2017 2017-2018
 TABLE – 4.10

Comparative Statement for the year

2015-16 to 2016-17

(in crores)

Particulars 2015-16 2016-17 Absolute % of change

change

Assets:

Fixed Asset 1021 1816 795 77.86%

Current asset 2176 1640 -536 24.63%

Total 3197 3456 259 8.10%

Liabilities :

Current 1916 1343 -573 29.91%

Liabilities

Others 1279 2112 833 65.13%

Total 3197 3456 259 8.10%

Sources : Secondary Data

Interpretation

From this table, it is found that the comparative statement for the year has been
fluctuating during the study period. In the year 2015-2016 to 2016-2017 having fixed
assets was 77.86% & current asset was increased to 24.63%. and in the year 2015-2016
to 2016-2017 current liabilities increased 29.91% and other liabilities it was 65.13%.

CHART NO.10

3500

3000

2500

2000
2015-2016
1500 2016-2017
Absolute Change
1000
% Change

500

0
Fixed Assets Current Total Current Others Total
Assets Liabilities
-500

-1000
TABLE – 4.11

Comparative Statement for the year

2016-17 to 2017-18

(in crores)

Particulars 2016-17 2017-18 Absolute % of change

change

Assets:

Fixed Asset 1816 2167 351 19.33%

Current asset 1640 2298 658 40.12%

Total 3456 4466 1010 29.22%

Liabilities :

Current 1343 2296 953 70.96%

Liabilities

Others 2112 2170 58 2.75%

Total 3456 4466 1010 29.22%

Sources : Secondary Data

Interpretation

From this, table was comparative statement for the year has been fluctuating
during the study period. In the year 2017-2018 Fixed assets was increased by 19.33% .
Current assets was 40.12%. and the current liabilities was 70.96% and other was 2.75%.

CHART NO.11

4500

4000

3500

3000

2500 2016-2017

2000 2017-2018
Absolute Change
1500

1000

500

0
Fixed Assets Current Assets Total Current
Liabilities
TABLE – 4.12

Method of Least square:

TABLE – 4.12

Fitting the straight Line Trend To sales

(Rs. In Crores)

Year Y (Sales) X (year X2 Xy Trend

codes) values Yc

2015-2016 3274 1 1 3274 3217

2016-2017 3657 2 4 7314 3771

2017-2018 4382 3 9 13146 4325

N=3 ∑y=11313 ∑x=6 ∑x2=14 ∑xy= 23734 ∑yc=11313

Interpretation

The equation of straight Line Trend is

yc = a+ bx

∑y = 11313 ∑xy=23734 N=3 ∑x2=14

Substituting the values, we get

∑y = na + b∑x

∑yx = a∑x + b∑x2

11313 = 3a + 6b - eq 1

23734 = 6a + 14b - eq 2
 Multiplication, of eq. 1 by 2

(11313 = 3a + 6b)*2

22626 = 6a + 12b

Subtract eq 2 from eq 1

23734 = 6a +14b

22626 = 6a + 12b

1108 = 2b

b = 554

a = 2663

The Linear trend for sales by the method of least squares is

For 2015-2016 x will be 1

Hence, 2015-2016 Y = 2663 + (554*1)

= 3217(in Crores)

For 2016-2017 x will be 2

Hence, 2016-2017 Y = 2663 + (554*2)

= 3771 (in Crores)

For 2017-2018 x will be 3

Hence, 2017-2018 Y = 2663 +(554*3)

= 4325 (in Crores)

Forecasted value

Year 2018-2019 2019-2020

Sales 4879 5433

(In Crores)
LIMITATION OF THE STUDY
Even though great support was provided by the organization and the staff to the intern
during the internship period to make the work environment conducive, they had to face
various difficulties during the internship period. Due to various unavoidable constraints,
the report could not do complete justice to the study. The interns in the organization are
more focused to assist their supervisors. It restricts the amount of information and the
level of complex work assigned to its interns owing to the confidentially and competency
issues. It is because of this interns get to learn mostly by observation and some amount
of discussion with supervisor only. The report is limited to the department in which the
intern is placed it might not be able to provide the comprehensive knowledge of the
overall functioning of the company.
CONCLUSION
Financial analysis determines a company’s health and stability, providing an
understanding of how the company conducts its business. But it is important to know
that financial statement analysis has its limitations as well. Different accounting methods
adopted by different firms’ changes the visible health and profit levels for either better or
worse. Different analysts may get different results from the same information. Hence,
we must conclude that financial statement analysis is only one of the tools (although a
major one) while taking an investment decision.
RECOMMENDATION AND

SUGGESTION
1. Company should stable their activities which help in measuring growth of the

Global Automotive Components Private Limited.

2. Debt taken by the company should be reduce to reduce the financial risk of the

Global Automotive Components Private Limited.

3. The profit of the company is not in a good position for that company has to take

Alternative Actions such as-

a. Increasing in procurement in material

b. Production and control in expenses like Administration,

selling, etc.

4. It should enhance its employee’s efficiency, more training needed to its

employees in order to increase its production capacity and minimize mistakes

while performing the tasks, also more safely precaution need to implement to the

employees who directly working on production process.

5. The company high inventory so I suggested that the firm must reduce the stock

by increase sales.

6. The firm should have proper check on the manufacturing process of the plant.
BIBLIOGRAPHY
Books:-

1. Financial Statement

2. Analysis of financial statement – T.S. Grewal’s

3. Financial statement and analysis – M.S. Narasimhan

4. Financial management – Dr. Y. Nagaraju, Dr. V. Rajesh Kumar

Websites:-

[Link]

[Link]

[Link]

[Link]