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1.1 Importance
Kapbros engineering Industries Limited is an engineering group, supplying a range of high-precision fully machined aluminums and ferrous components and assemblies to original equipment manufacturers (OEMs) worldwide. Its integrated services include design, development, tooling, casting, machining, assembly, and research and development across aluminums and ferrous products. The internship was done in Kapbros engineering industries ltd and the project was Operation carried by Finance Department and also prepare Cost Sheet on assembling product of Oil Pump and Case differential. The range of products includes Oil Pump and Case differential assembly for BMW and Maruti Suzuki. It was good to observe the manufacturing company culture, the discipline and team spirit. Learning as an internee helped to gain knowledge. It will help to get adaptive to the corporate culture. The experience of internship will be useful while working in a company. Assembling processes of Oil Pump and BMW differential Case Assembly pass through various unique stages. All the workers and executives maintain absolute discipline and decorum in the company. The systematic and sequential flow of work minimizes the chances of errors. Whole plant runs through SAP. It helps to learn real work environment which is more effective than bookish knowledge. Observing the manufacturing process along with preparing the cost sheet has been the interesting work. It would be beneficial while working in a company.

Working with such a big concern is worthwhile. It has been very beneficial for attaining knowledge regarding the corporate culture and the pattern of their working. The experience with finance department is valuable. Understanding the work at the real workplace is very crucial. Fortunately the opportunity of working with departments has been very significant. It has been useful in getting acquainted with the working pattern of the company and observing the costs involved with each stage of involved in transformation of raw material in to finished product.

Gaining academic knowledge is necessary. But the internship program is essential. For it bridges the gap between the books and the reality. It enriches the aspirant with experience of practical application of knowledge obtained in academic life. Reading books is different from working with people. For in real field, an aspirant reads people. Inciting people to work with willingness is a tough job and this is what a management trainee requires. In this way it is crystallized that this internship program will help in making a bright future. This is a preparation for being acclimatized of the corporate world. The aspirant gets the opportunity to learn and understand the methods and work patterns of the corporate world.

1.2 OBJECTIVES
The internship program was carried out having focus on the following objectives: 1.2.1 1.2.2 1.2.3 To study various cost components To study of the function of various department To study the application of SAP software in manufacturing company

1.3 SCOPE
The internship program was of 60 days. It started from date: 01/06/2012 and ended on date 31/07/2012 in Kapbros Engineering Industries Ltd (Rico Auto Group Company) Bhiwadi (Rajasthan)

1.4 Data Collection

The internship report is based on the secondary data. The data are collected from the Mentor Mr. V.S.Chauhan and other plant staffs.

1.5 Limitation
The company was reluctant to give information

1.6 Chapter Scheme

Introduction Review of literature Analysis and interpretation Findings

2.1Company Profile
Rico Auto Industries Limited is an engineering group, supplying a range of high-precision fully machined aluminums and ferrous components and assemblies to original equipment manufacturers (OEMs) worldwide. Its integrated services include design, development, tooling, casting, machining, assembly, and research and development across aluminums and ferrous products. Its products include oil pump assembly, fuel system parts, exhaust manifolds, turbine housings, center housings, oil filter adaptor, drums and steering knuckles. In December 2011, it sold KRP Auto Industries Limited. In March 2012, it announced that it divested its entire 50% interest in Continental Rico Hydraulic Brakes India Private Limited, its joint venture with Continental AG, Germany, by way of sale of its entire interest to Continental Automotive Holding Netherlands BV, a Continental Group Company. As a result of the divesture Continental Rico Hydraulic Brakes India Private Limited is a Continental Group held company Rico Auto Industries (RAI), incorporated in Mar.'83, was converted into a public limited company in Apr.'85. RAI manufactures auto components for two-wheelers rear and front wheel hubs, clutches, brake systems, engine housings, crank housings, etc. It has also diversified into the production of gears and oil pumps for Maruti and gear shift drums for two-wheelers and installed pressure die casting machines to manufacture diesel generating sets, engine frames and housings. RAI came out with a public issue of equity shares and NCDs with warrants and had financed the same for manufacturing and machining facilities for graded/spheroidal graphite machines, iron castings with automatic disamatic mould line with CNC machining facilities, and an installed capacity of 12,000 t.p.a for such castings in 1993. The subsidiaries of RAI are Rico Auto Industries (UK) Ltd and Rico Auto Industries Inc., USA. RAI is moving towards QS 9000 accreditation. Company has entered into JV agreement with Daewoo Precision Industries (DPL), Korea, for OE supplies. Company has another joint venture with FCC Co. Ltd the largest manufacturers of clutches in Japan. The company has proposed to form an independent project to manufacture Dies & Moulds under name of Rico Dies & Moulds Pvt. Ltd, the proposal has twin objective of

becoming self-dependent for quality dies and moulds and to reduce the development time for new components. Rico Agroils Ltd (RAL) was merged with the company from Jan.'99. In 1999-2000, production capacities both at Dharuhera and Gurgaon plants were expanded by investment of Rs. 2800 lacs. The Company plans to amalgamate Rico Softech Ltd, a wholly owned subsidiary of RAL with itself on approval of Shreholders, creditors and other statutory authorities. The company has merged Rico Softech Ltd a wholly owned subsidiary with itself with effect from 1st April 2004.Further it is also decided to sell its Agro Division at Bundi Rajasthan on Jan 14, 2004. The company has also disposed off its Agro unit at Silor Road, Bundi Rajasthan to M/s Adani Wilmer Ltd during 2004-05 for a consideration of Rs. 783 lacs. Further the company has sold its 605000 equity shares of Hankook Motors Ltd which were entirely written off during the 2004-05 and received a full consideration amount of Rs. 60500/-. In March 2005 the company has sub-divided its equity share face value from Rs. 10/- per share to Re.1/- per share. During 2004-05 the company has planned to set up two new plants one each at Bangalore (Karnataka) and at Manesar (Haryana) to cater the needs of domestic and international OEMs.

2.2 History
YEAR EVENTS 1983 - The Company was Incorporated on 1st February, at Jalandhar. The Company was promoted by Arvind Kapur and Arun Kapur of the RICO Group of Companies. The Company's object is to manufacture of automotive parts, tractor parts and auto electrical parts.

1984 - 1,000 shares subscribed for by promoters etc. and 50 shares taken up by employees of the RICO group.

1985 - 12, 98,950 shares issued at par of which 4, 16,450 shares to promoters, directors, etc. and 1, 30,000 shares to HSIDC were reserved and allotted on a firm allotment basis.

Out of the remaining 7, 52,500 shares, the following shares were reserved and allotted on a preferential basis:

- (I) 65,000 shares to employees and - (ii) 15,050 shares to business associates of the Company. The balance 6, 72,450 shares were offered to the public in December. 3, 25,000 additional shares allotted to retain oversubscription (1, 99,518 shares to public, 1, 02,550 shares to promoters, directors, etc. and 22,932 shares to employees and business associates).

1986 - The Company undertook to set up a project for the manufacture of rear hub wheels and front hub wheels as an ancillary unit to Hero Honda Motors Ltd.

1987 - The Company commissioned its project for the manufacture of 50,000 nos. gear oil pump for Maruti Udyog Ltd., 32,000 sets of frames and housing for Shriram Honda portable generator sets and 1,20,000 rotor oil filters for Hero Honda.

- A letter of intent was received for the manufacture of valve rocker arm, case differential and Retainer input shaft.

1990 - With a view to further expanding its capacity, the Company acquired land for setting up Unit-II near Gurgaon for manufacture of components for Maruti Cars as well as to set up specialised facilities for export market.

- The Company proposed to undertake promotions of a new company RICO AGROILS LTD. (RAL) for setting up a solvent extraction unit of over 300 TPD cost of Rs.9.50 crores was to use soyabean as the main raw material.

1991 - In addition, the Company's project for the manufacture of clutch friction disc in collaboration with F.C.C. Ltd., Japan was expected to go on stream by

November/December. The product was to serve import substitution.

1992 - The Company had decided to promote Rico Agroils Ltd. (RAL) with our participation at 26% of the equity.

1993 - The Company reached a landmark by being the first automobile component manufacture to obtain the ISO 9002 certification from BIS.

- Significant progress has been achieved in the setting up of a `state-of-the-art' Spherical Graphite (SG)/Grey Iron Foundry at Gurgaon, Haryana with an installed capacity of 1200 TPA.

- During October-November, the Company issued 8, 12,500 - 17% non-convertible Debentures of Rs.75 each with a detachable warrant with each debenture on Rights basis in prop. 1 deb: 2 equity shares held (all were taken up). 50 debentures were kept in abeyance. Each warrant entitles the holder to apply for 1 equity share of Rs.10 each at a prem. of Rs.30 per share between 18 to 24 months from the date of allotment of debentures.

- During October-November, the Company issued 1, 80,000 No. of equity shares of Rs.10 each at a prem. of Rs.30 per share on preferential basis to members of the promoter group of company.

- 16,25,000 Rights equity shares of Rs.10 each issued (prop. 1:1 prem. Rs.30). 100 shares kept in abeyance. 1,80,000 shares of Rs.10 each allotted at a prem. of Rs.30 per share on private placement basis.

1994 - The overall working was excellent due to the additional capacities created in the expansion programme.

To cater to the stringent OE Standard and to develop intricate castings and components for present day generation automobiles, a development department was set up. - Hero Honda Ltd., would purchase 100% of their requirements from the company and the balance production would be supplied to other 2 and 3 wheeler industries.

The Company took up a project for the manufacture of 4, 00,000 nos. per annum of clutches in technical collaboration with Fuji Chemical Co. Ltd.

10,00,000 No. of equity shares of Rs.10 each issued to promoters, their relatives etc. (Rs.3 per share called up).

The Company's Rights Issue of 18,05,000 (including preferential offer of 1,80,000 Equity Shares to promoters) to Rs.10/- each at a premium of Rs.30/- per share and 8,12,500, 17% Secured Non Convertible Debentures (NCDs) of Rs.75/- each wth detachable warrants was overwhelming.

1995 - As a part of expansion cum diversification, the company proposed to set up a joint venture company with Daewoo Precesion Industries Ltd., Korea as a single source OE supplier for Daewoo in India and to emerge as an OE supplier to Daewoo Car manufacturing units in other countries as well. 812,450 No. of equity shares (prem. Rs.30) allotted against conversion of warrants. 1996 - The Company has entered into a JV agreement with Daewoo Precision Industries Ltd. (DPI), Korea, a leading auto component manufacturer within the Daewoo Group.

1997 - The Company also entered into a Joint Venture Agreement with FCC Co. Ltd. the largest manufacturers of clutches in Japan and OEM supplier to such well known names as Honda, Yamaha and Suzuki.

1998 - The Company is proposed to form an independent project to manufacture Dies & Moulds under the name of Rico Dies & Moulds Pvt. Ltd.

1999 - The Gurgaon Plant has been accredited with the QS 9000 Certification and Dharuhera Plant has been recommended for QS 9000 Registration as per 1998 Edition. The QS 9000 Certification is recognition of the march towards the globalization of the Company's quality system management.

2000 - The Company has signed the agreements for dematerialization of the shares with NSDL and CDSL and appointed MCS Ltd.

- Crisil has upgraded the BBB rating assigned to at Rs 6.09-crore non-convertible debenture (NCD) issue of Rico Auto Industries to BBB+.

2002 -Board approves for the issue of Bonus Shares at the ratio of 1:1

-Board of Directors approve for the acquisition of Auto component Manufacturing Company in India and abroad.

2003 -Kapsons Associates Pvt Ltd acquires 40,399 shares amounting to 0.37% of the total paid up capital of the company.

-Ford Motor Company selects Rico Auto Industries to participate in its Global supplier Development programme.

-Board approves for the scheme of amalgamation of Rico softech.

2004 -Rico Auto Industries Board approves sale of Agro Division at Bundi

-Rico Auto Industries Ltd has informed that the equity shares of the Company have been delisted from The Delhi Stock Exchange Association Limited (DSE) wef January 23, 2004

2.3Current status of company

The company currently operates from four locations at Dharuhera, Haridwar, Sanand and Gurgaon. The plants at Bhiwadi and Chennai are under construction. The Haridwar plant is fully operational and has commenced supplies of components to Hero MotoCorp Limiteds

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plant located in the region. The Dharuhera plant manufactures high-pressure die castings and gravity die castings. The Sanand plant has commenced production in the last quarter of FY11 and caters to the requirements of Tata Motors for the Nano car plant. The civil work is in progress at the Orgadam, Chennai to cater to the South India market and increase export revenue. The site development work is also in progress for setting up an auto components manufacturing plant at industrial area, Pathredi, Bhiwadi.

2.4 Overview
Incorporated in 1983, Rico is engaged in manufacturing and supplying a wide range of high-precision fully-machined aluminum and ferrous components and assemblies to automotive OEMs across the globe. It is engaged in designing, developing, tooling, casting, machining, and assembling aluminum and ferrous products. The company currently operates from four locations at Dharuhera, Haridwar, Sanand and Gurgaon, manufacturing automotive components like wheel hubs, panels, clutch assemblies, cylinder covers, cylinder head, cylinder block, center housing, exhaust manifolds, fly wheels and brake drum, among others. The company operates through six subsidiaries and four JVs. The FCC Rico JV manufactures clutch assembly for two- and four-wheelers in India. This JV contributed about 23% of the consolidated revenue in FY11. The Continental Rico JV manufactures hydraulic brake systems and other sub products like brake calipers, drum brakes and master cylinders and the JV with JINFEI China is engaged in manufacturing and marketing of alloy wheels. The JV with Magna Power train is involved in manufacturing of oil and water pumps with aluminum housing for automotive engine applications. The subsidiary companies located in USA and UK is engaged in engineering and assembly, logistics management and warehousing Rico Auto Industries Ltd operates in the Motor vehicle parts and accessories sector. Rico Auto Industries Limited is an engineering group, supplying a range of high-precision fully machined aluminum and ferrous components and assemblies to original equipment manufacturers (OEMs) worldwide. Its integrated services include design, development, tooling, casting, machining, assembly, and research and development

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across aluminum and ferrous products. Its products include oil pump assembly, fuel system parts, exhaust manifolds, turbine housings, center housings, oil filter adaptor, drums and steering knuckles. In December 2011, it sold KRP Auto Industries Limited. In March 2012, it announced that it divested its entire 50% interest in Continental Rico Hydraulic Brakes India Private Limited, its joint venture with Continental AG, Germany, by way of sale of its entire interest to Continental Automotive Holding Netherlands BV, a Continental Group Company. As a result of the divesture Continental Rico Hydraulic Brakes India Private Limited is a Continental Group held company. Rico Auto Industries Limited (Rico) manufactures a range of high-precision fully-machined aluminum and ferrous components and assemblies to automotive original equipment manufacturers worldwide. Its integrated services include design, development, tooling, casting, machining and assembly across ferrous and aluminum products. The company's product portfolio consists of a range of components for two-wheelers, passenger cars, Light Commercial Vehicles (LCVs), Heavy Commercial Vehicles (HCVs) and system suppliers. Rico has entered into JVs with leading global automotive suppliers which are likely to provide benefits to the company over the long term with benefits through product diversification, access to technical knowhow in new product lines and broader customer base. Healthy outlook for the Auto Component sector. CARE Research believes the outlook continues to be healthy for the auto component sector on the back of stable growth in the Indian Automobile sector. However, the increasing competition in the auto component market coupled with the limited bargaining power in the OEM, replacement and the export segments for auto component manufactures pose a threat to the sector. Key concerns Volatility in raw material prices Increasing competition from unorganized players in the Original Equipment Manufacturing (OEM) segment Rico Autos Limited was incorporated in 1983 with a vision to emerge as a niche player in Auto Industry and has grown exponentially into truly diversified and globalised corporate entity since then. In the last Twenty- Seven years of its existence, the Rico Autos Group has created and executed projects that were a part to touch every walk of life and human

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endeavor, while setting new benchmarks in quality. Today the Group enjoys a Gross Turnover Rs. 974.95 crores, spanning its horizon and providing fulfilled management. The group enjoys huge reserves of goodwill that has led to some of the biggest names in the corporate world putting their trust in us and constantly strives to provide products and services that enhance the quality of life and work, and to address a gamut of human needs. All the manufacturing Plants are running on SAP.

2.5 Growth
The GDP of Rico auto continues to grow at a healthy rate of 8.5% for the year 2010-11 compared to 7.9% in the previous year, despite the global economic crisis. However the GDP growth of the current financial year 2011-12 is expected to be close to 8%, a little lower than the previous years. Inflation and high interest rates continue to dampen the overall sentiment in the economy. The Automotive Industry is sensitive to both these factors and has significantly impacted the double digit growth forecasted in the beginning of the year. The fiscal year 2010-11 saw the passenger car segment grow by 29.8% and two wheeler segments was also up by 27% over the previous year. On the back of this growth the auto component industry also experienced robust Growth. The Company crossed Rs.1000.00 crores sales for the first time since its inception and touched Rs.1096.00 crores on standalone basis, up by 31% from Rs.837.00 crores over the previous year 2009-10. Your Company earned Profit before Interest, Depreciation and Tax of Rs.126.65 crores during the year ended 31st March, 2011 compared to Rs.87.74 crores in the previous year. Profit after Tax of Rs.6.61 crores (excluding non-operational income of Rs.19.90 crores) recorded growth of 8.9% over last fiscal year. Keeping in view the financial performance and future growth prospects of the Company, the Board of Directors have recommended dividend @20% for the financial year 2010-11 on the enhanced share capital of Rs.13.53 crores, up by 33.33% over the previous years dividend of 15%.

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2.6 Vision / Mission

Our Vision To be preferred supplier to Original Equipment manufacturers across the globe Our Goal To be billion dollar enterprise by 2011 , To be preferred supplier to Original Equipment manufacturers across the globe.

2.7 Core Values

Excellence Commitment Integrity Teamwork Entrepreneurship

2.8 Integrated Services

Design, Development & Engineering Services R&D, Testing & Validation Tooling & Prototyping Casting (Aluminum & Ferrous) Machining & Assembly Packaging & Logistics

Preferred Supplier

Customer Focused Enterprise Efficient Account, Program & Launch Management

People

Regular Training & Skill Building

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Empowerment & Leadership

Globalization

Global Presence & Scale Global Teams

Shareholder Value

Focus on Return on Capital Employed Consistent Dividend Distribution

ENGINEERING AND R & D

Engineering CAD CAM CAE

Rico has over 60 seats and all the required engineering CAD CAM CAE software's. CAD & CAM : Unigraphics, Pro Engineer, Catia, C3P, Ideas, Vericut, Solidedge, AutoCAD, Ansys CAE : Magma soft, FEA, CFD, Ansys, FCX, GT Suite, MSC Fatigue

R&D Capabilities

Design & analysis: Structural, Thermal, Fatigue, NVH (noise, vibration, harshness) Material research & development Testing & validation

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2.9 Turnover & Progress

Ricos consolidated group total turnover is over US$ 285 Million (Rs 1100 Crore) Rico: Capacity and utilization Actual Production (in Numbers) FY11 FY10 FY09

Auto Parts

64,444,325 53,811,025 46,750,931

Dies & Moulds

519

428

694

Trading Goods

265,329

96,668

Others

62,914,693 19,188,926 17,552,742

2.10 MILESTONE
1984-86

Rico Auto Incorporated (1984-85) and Commercial Production Started (1986) Aluminum HPDC Plant set up in Dharuhera (40 Kms from Delhi, India) TC with FCC Japan for manufacturing of Clutch Assembly

1990-92

Ferrous Casting & Machining Plant set up in Gurgaon (20 Kms from Delhi, India) Entered International Market as OEM Supplier to MEC Japan.

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1994-96

FCC RICO (50:50) JV formed Started supplying globally to USA & UK (Eaton, Cummins, GM etc.)

1998-00

Second Aluminum HPDC & Machining Plant set up in Gurgaon

2000-02

Set up full service Engineering, Design & Development function. Added Customers: Ford, Jaguar, Land Rover Certified TS 16949, ISO 140001, OHSAS 18001

2002-04

Enhanced Ferrous & Aluminum Capacity Added Customers: Caterpillar, Honeywell, Detroit Diesel, Volvo

2004-06

R&D Center started Added Customers: Nissan, Tata, Perkins

2007-2009

JV with CONTINENTAL Automotive Systems (Hydraulic Brakes) JV with JINFEI CHINA (Aluminum Alloy Wheels - 2 Wheelers) Acquired 25 acres land in Chennai. JV with CONTINENTAL Automotive Systems (Hydraulic Brakes)

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JV with MAGNA Powertrain (Oil Pump, Water Pump) JV with Jinfei China (Aluminum Alloy Wheels 2 Wheelers) Added Customers JATCO, Mann & Hummel, Magna, Renault, BMW

2010-11 Added new facilities/Plants At Bawal, Bhiwadi, Sanand, Chennai & Haridwar.

2.11 ALUMINUM CASTING

Rico has over 76 HPDC (High Pressure Die Casting Machines) from 135 tons to 1800 tons locking force.

Rico would be the largest high pressure die casting capacity in India. Rico is currently producing 45 million high pressure die cast components per annum.

Current HPDC machines are from Buhler, Toshiba, UBE etc. Alloys produced today : ADC 12,14, LM24, A 380, A 383 and ENAC46500

Future Plans

Gravity Process Low Pressure Process Aluminum Cylinder Block Aluminum Cylinder Hea

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2.12 FERROUS CASTING

4 Automatic Moulding Lines (2 Disamatic size 650 * 535) (2 Horizontal size 610 * 510)

Alloys Gray Iron (FC) , Ductile Iron (FCD), SiMo, SiMo Cr

Core making Rico has in house core making facility with over 17 machines(Cold box and Shell process)

Continuous Shot Blasting and Real time X Ray

2.13 MACHINING & ASSEMBLY

Rico has over 1000 machines (CNCs & SPMs). Rico is one of the largest machining facility in India. Rico has implemented a mix of state of art CNCs (Mazak, Kitamuras, Daewoos, Emags, Fanucs, Pitlers, Stama, Chiron etc) & low cost automation to meet its customer requirements.

Rico currently manages over 40 sub suppliers covering a vast range of parts e.g. Sintered, Rubber & Seals, Sheet metal, Friction Material, Precision Machined Components, Bearings, Springs and Fabricated Parts

DIES, PATTERNS AND TOOLING

Rico has in house dies and pattern design and manufacturing. Rico manufacture over 200 dies and patterns and 600 die inserts annually.

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2.14 Share Holding Pattern in (%)

DEC' 11 Promoter FII DII Others Total 50.10 0.04 0.00 49.86 100.00

SEP' 11 50.10 0.04 0.01 49.85 100.00

JUN' 11 50.10 0.04 1.00 48.86 100.00

MAR' 11 50.10 0.04 1.01 48.85 100.00

Shareholding belonging to the category: "Public and holding more than 1% of the Total No. of Shares" No. Name of the Shareholder 1 2 Ashish Dhawan Nemish S Shah Total Total held 7,273,092 2,901,900 10,174,992 Shares Shares as % of Total No. of Shares 5.38 2.15 7.52

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2.15 Key person of Rico Autos Ltd.

Amarjit Chopra Anup Singh Director Director CEO Arun Kapur Joint Managing Director Arun Kapur CEO Arvind Kapur VC & Mng.Director & CEO Arvind Kapur Director Ashok Seth Company Secretary B M Jhamb Chairman / Chair Person Chandra Mohan Director Kanwal Monga Chief Financial Officer O P Aggarwal Director Rakesh Kapur Director Satish Sekhri Director Vinod Kumar Bhalla

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2.15.1 Kapbros key person:1. Mr. Rakesh Kapoor (M.D) 2. Mr. R.Dharna (Plant Head) 3. Mr. Mohan Singh (DGM Operation) 4. Mr. Ravinder Maan (Production Manager) 5. Mr. M.K Raghav (A.G.M Finance & Accounts) 6. Mr. Nityanand Sharma (H.R) 7. Mr. V.S Chauhan (Officer Finance & Accounts)

2.16 Products
Oil Pump Assembly Fuel System Parts Lube Oil Filters Heads

Annual Volumes - 500,000

Annual Volumes - 400,000

Annual Volumes - 200,000

22 Exhaust Manifolds Turbine Housings Center Housings

Back Plates

Crank Cases & Covers

Cylinder Head Covers

Oil Pan

Intake Manifold Covers

Front Cover

23 Valve Cover Side Cover Balance Shafts Assembly

Gear Housing

Main Bearing Caps

Water, Air Connections and Pressure Plates

Flywheels

Timing Cases

Oil Filter Adaptor

24 Engine Brackets Cylinder Block (Ferrous) Cylinder Head (Aluminum)

Clutch Assembly

Automatic Transmission Bracket Assembly

Differential Case Housings

Gear Shifts Forks

Wheel Hubs Assembly

Brake Panel Assembly

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Brake Discs

Drums

Steering Knuckles

2.16.1 Kapbros Products

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2.17 Product Range

Enginee Cylinder block (Aluminum) Cylinder Head (Aluminum) Oil pump Assembly Fuel system parts Exhaust Manifolds Turbine Housings & Center Housing Compressor Housings Crank Cases & covers Cylinder head cover Oil pan & bed plates Front Cover, valve Cover, side cover Balance shaft Assembly Main Bearing Caps & Engine Brackets Water & Air Connection Timing Cases, Oil filter adaptor assembly Gear Housing

Transmission Clutch assembly Transmission Support assembly Differential Case Gear Shift forks Intermediate Plate, Pressure Plate Fear Case & Brackets Transmission Case

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Chasis & Braking System Wheel Hub Assembly Break panel Assembly Brake Disc & Drums Knuckles

2.18 Quality System

Rico is committed to continuous improvement in the quality of all our products, services and operations in order to exceed our customers expectations and achieve our vision of being a preferred supplier.

Rico is an ISO / TS 16949, ISO 14001 and OHSAS 18001 Certified Company. Rico has become FORD Q1 since July 2007 1. Quality Tools 5S & 5W KAIZEN TPM

RICO AUTOS LIMITED has established, documented, implemented and maintained a Integrated Management System in line with the requirement of ISO/TS 16949: 2002, ISO 14001:2004, OHSAS 18001:2007.

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2.19 JOINT VENTURE AND SUBSIDIERIES

FCC Rico

Products: Clutch Assembly for Two Wheelers & Four Wheelers in India
CONTINANTAL RICO

Products: Foundation Brakes: Brake Calipers & Drum Brakes, Actuation Brakes: Actuation Units (Brake Boosters, Master Tandem Cylinders) & LSPV Rico Jinfei

Products: Aluminum Alloy Wheels for Two Wheelers MAGNA Powertrain RICO JV Highlights

Products: Oil & Water Pump (with Aluminum Housings) for Automotive Engines India & Europe SUBSIDIARIES RICO AUTO USA AND UK Engineering and Assembly Logistics Management, Warehousing and JIT(just in time) Delivery Customer support and service USA : Near Detroit, Michigan UK : Near London

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2.20 COMPETITORS
Bosch Motherson Sumi Amtek Auto Automotive Axle Jamna Auto ind Lumax Inds Munjal Showa Minda Ind Sona Koyo Steel Munjal Auto Ind Hi-Tech Gears Lumax Auto Tech Denso India Jay Bharat Maruti Omax Autos JMT Auto JBM Auto Comp Clutch Auto

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2.21 Customers

CURRENT GLOBAL CUSTOMER BASE

Two Wheelers

Passenger Cars

Commercial Vehicles

System Suppliers

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3.1.1 Introduction of Cost Sheet

Cost represents the benefits given up to acquire goods or services. The benefits given up in terms of money may be called Cost. In other words cost represents a sacrifice of values, a

foregoing or a release of something of value. It is the price of economic resources used as a result of producing or doing the thing costed. It is the amount of expenditure incurred on a given thing. Cost has been defined as the amount measured in money or cash expended or other property transferred, capital stock issued, services performed or a liability incurred in consideration of goods or services received or to be received. By cost, we mean the actual cost i.e. historical cost. ICWA (UK) defines cost as the amount of expenditure (actual or notional) incurred on, or attributable to a specified thing or activity. The object for which the cost is to be determined can be a product or service 3.1.1.1 MEANING Cost sheet is a statement, which shows various components of total cost of a product. It classifies and analyses the components of cost of a product. Previous periods data is given in the cost sheet for comparative study. It is a statement which shows per unit cost in addition to Total Cost. Selling price is ascertained with the help of cost sheet. The details of total cost presented in the form of a statement are termed as Cost sheet. 3.1.1.2 DEFINITION Costing is the technique of ascertaining cost. A cost sheet is a statement of cost prepared at given interval of time showing various elements of cost of a product produced, or service rendered during a particular period. This statement gives details about total cost and cost per unit at different stages of production. Important components of cost are: a) Prime Cost = Direct material cost + Direct labour cost b) Works Cost = Prime cost + Factory overheads. c) Cost of production = Works cost + Office & Administrative overheads. d) Total Cost (Cost of sales) = Cost of production + Selling & Distribution overheads

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3.1.1.3 COST SHEET For determination of total cost of production a statement showing the various elements of cost is prepared. This statement is called as a statement of cost or cost sheet. Cost sheet is a statement, which provides for the assembly of the detailed cost of the total cost of job operation or order. It brings out the composition of total cost in a logical order, under proper classifications and sub-divisions. The period covered by the cost sheet may be a week, a month or so. Separate columns are provided to show the total cost and cost per unit. In case of multiple products a separate cost sheet may be prepared for each product. Alternatively, separate columns of total cost and unit cost may be provided for each product in the same cost sheet. A cost sheet is prepared under output or unit costing method. 3.1.2 Cost sheet is prepared on the basis of: . Historical Cost Estimated Cost a) Historical Cost Historical Cost sheet is prepared on the basis of actual cost incurred. A statement of cost prepared after incurring the actual cost is called Historical Cost Sheet. b) Estimated Cost Estimated cost sheet is prepared on the basis of estimated cost. The statement prepared before the commencement of production is called estimated cost sheet. 3.1.3 OBJECTIVE It states the meaning and type of Cost Sheet. It states the importance of Cost Sheet. It explains the components of total cost. It prepares the cost sheet as per format. It gives the breakup of total cost under different elements.

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It shows total cost as well as cost per unit It helps comparison with previous years. It facilitates preparation of tenders or quotations It enables the management to fix up selling price It controls cost.

3.1.4 Importance of Cost Sheet A. Cost ascertainment. B. Fixation of selling price. C. Help in cost control D. Facilitates managerial decisions The importance of cost sheet described as follows: A) Cost ascertainment The main objective of the cost sheet is to ascertain the cost of a product. Cost sheet helps in ascertainment of cost for the purpose of determining cost after they are incurred. It also helps to ascertain the actual cost or estimated cost of a Job. B) Fixation of selling price To fix the selling price of a product or service, it is essential to prepare the cost sheet. It helps in fixing selling price of a product or service by providing detailed information of the cost. C) Help in cost control For controlling the cost of a product it is necessary for every manufacturing unit to prepare a cost sheet. Estimated cost sheet helps in the control of material cost, labour cost and overheads cost at every point of production. D) Facilitates managerial decisions It helps in taking important decisions by the management such as: whether to produce or buy a component, what prices of goods are to be quoted in the tender, whether to retain or replace an existing machine etc.

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3.1.5 COMPONENTS OF COST SHEET 1. Prime Cost Prime Cost = Direct material + Direct Wages + Direct expenses Material Consumed = Material purchased + Opening stock of material Closing stock of material. 2. Factory Cost Factory Cost = Prime cost + Factory overheads 3. Total Cost Total Cost of production = Factory Cost + office and administration overheads 4. Cost of goods sold Cost of goods sold = Total cost of production + Opening stock of Finished goods Closing stock of finished goods 5. Cost of Sales Total Cost = Cost of Goods sold + Selling and distribution overheads. 6. Sales Sales = Total Cost + Profit

3.1.6 CLASSIFICATION OF COST Cost classification is the process of grouping costs according to their common features. Costs are to be classified in such a manner that they are identified with cost center or cost unit.

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On the basis of behavior of cost Behavior means change in cost due to change in output. On the basis of behavior cost is classified into the following categories: 1. Fixed Cost It is that portion of the total cost, which remains constant irrespective of output up to the capacity limit. It is called as a period cost as it is concerned with period It depends upon the passage of time. It is also referred to as non-variable cost or stand by cost or capacity cost or period cost. It tends to be unaffected by variations in output These costs provide conditions for production rather than costs of production. They are created by contractual obligations and managerial decisions. Rent of premises, taxes and insurance, staff salaries constitute fixed cost.

2.

Variable Cost This cost varies according to the output In other words, it is a cost which changes according to the changes in output. It tends of vary in direct proportion to output. If the output is decreased, variable cost also will decrease It is concerned with output or product. Therefore, it is called as a product cost. If the output is doubled, variable cost will also be doubled. For example, direct material; direct labour, direct expenses and variable overheads.

3.

Semi-variable Cost This is also referred to as semi-fixed or partly variable cost It remains constant up to a certain level and registers change afterwards. These costs vary in some degree with volume but not in direct or same proportion.

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Such costs are fixed only in relation to specified constant conditions,. For example, repairs and maintenance of machinery, telephone charges, maintenance of building, supervision, professional tax etc.

On the basis of elements of cost An element means nature of items. A cost is composed of three elements: material, labour and expenses, Each of these three elements cab be direct and indirect.

4.

Direct Cost

It is the cost, which is directly chargeable to the product manufactured, it is easily identifiable. Direct cost consists of three elements, which are as follows: 5. Direct Material It is the cost of basic raw material used for manufacturing a product. It becomes a part of the product No finished product can be manufactured without basic raw materials It is easily identifiable and chargeable to the product For example, leather in leather wares, pulp in paper, steel in steel furniture, sugarcane for sugar etc What is raw material for one manufacturer might be finished product for another. Direct material includes the following:

a) All materials specially purchased for production or the process. b) All components purchased for production or the process. c) Material transferred from one cost center to another or one process to another. d) Primary packing materials, wrappings, cardboard boxes etc., necessary for preservation or protection of product. e) Some of the items like nails or thread in the store are part of finished product. They are not treated as direct materials in view of negligible cost.

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6.

Direct Labour or Direct Wages It is the amount of wages paid to those workers who are engaged on the manufacturing line of conversion of raw materials into finished goods. The amount of wages can be easily identified and directly charged to the product These workers directly handle raw material, wip and finished goods on the production line

Wages paid to workers operating lathers, drilling, cutting machines etc. are direct wages Direct wages are also known as productive labour, process labour or prime cost labour. Direct wages include the payment made to the following group of workers:

a) Labour engaged on the actual production of the product. b) labour engaged in aiding the operations viz. supervisor, Foreman, Shop clerks and worker on internal transport. c) Inspectors, Analysts needed for such production

7.

Direct Expenses or chargeable Expenses It is the amount of expenses which is directly chargeable to the product manufactured or which may be allocated to product directly It can be easily identified with the product. For example, hire charges of a special machine used for manufacturing a product, cost of designing the product, cost of patterns, architects fees/surveyors fees, or job cost of experimental work carried out especially for a job etc.

Cost of special drawings, cost of special layout designs, patents, patterns, cost of models, surveyors fees, Excise duty, Royalty on production cost of rectifying defective work. Utility of such expenses is exhausted on completion of the job

8.

Indirect Cost It is that portion of the total cost, which cannot be identified and charged direct to the product.

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It has to be allocated, apportioned and absorbed over the units manufactured on a suitable basis.

9.

Indirect Material

It is the cost of material other than direct material which cannot be charged to the product directly It cannot be treated as part of the product, It is also known as expenses materials It is the material which cannot be allocated to the product but which can be apportioned to the cost units. Examples are as follows: a) Lubricants, cotton waste, Grease, Oil, stationery etc. b) Small tools for general use. c) Some minor items which as thread in dressmaking, cost of nails in shoe making etc.

10. Indirect Labour It is the amount of wages paid to those workers who are not engaged on the manufacturing line, for example, wages of workers in administration department, watch and ward department, watch and ward department, sales department, general supervision.

11. Indirect Expenses It is the amount of expenses which is not chargeable to the product directly It is the cost of giving service to the production department It includes factory expenses, administrative expenses, selling and distribution expenses etc.

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3.1.7 Classification of Overheads A) Factory Overhead It is the aggregate of all the factory expenses incurred in connection with manufacture of a product These are incurred in connection with running of factory It includes the items of expenses viz., factory salary, work managers salary, factory repairs, rent of factory premises, factory lighting, lubricants, factory power, drawing office salary, haulage (cost of internal transport) depreciation of plant and machinery unproductive wages, estimation expenses, royalties loose tools w/off, material handling charges, time office salaries, counting house salaries etc.

B) Administrative Overheads or Office Overheads It is the aggregate of all the expenses as regards administration It is the cost of office service or decision making It consists of the following expenses: Staff salaries, office premises, office conveyance, printing and stationery and repairs and depreciation of office premises and furniture etc. C) Selling and Distribution Overheads It is the aggregate of all the expenses incurred in connection with sales and distribution of finished product and services It is the cost of sales and distribution services. Selling expenses are such expenses, which are incurred in acquiring and retaining customers. It includes the following expenses: a) Advertisement b) Show room expenses c) Traveling expenses d) Commission to agents e) Salaries of Sales office f) Cost of catalogues

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g) Discounts allowed h) Bad debts written off i) Commission on sales j) Rent of Sales Room D) Distribution expenses It includes all those expenses, which are incurred in connection with making the goods available to customers. These expenses include the following: a) Packing charges b) Loading charges c) Carriage on sales d) Rent of warehouse e) Insurance and lighting of warehouse f) Insurance of delivery van g) Expenses on delivery van h) Salaries of Godown keeper, drivers and packing staff.

3.1.8 NON-COST ITEMS Non-cost items are those items, which do not form part of cost of a product. Such items should not be considered while ascertaining cost of a product. These are items included in profit and loss A/c as per principles of Financial Accountancy but not related to product. For example, Income-tax paid, provision for Income-tax, interest on capital, interest on loan, profit on sale of fixed assets, loss on sale of fixed assets, transfer fees received, transfer to reserves, any other appropriation of profit, commission to Managing Director or Partners, capital loss, donations, capital expenditure, discount on shares and debentures. Goodwill written off, Preliminary expenses written off, brokerage, pure financial expenses or losses and expenses not related to th business, wealth tax, bonus to directors and employees, if it is based on profit, expenses of raising capital, penalties and fines.

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3.1.9 TREATMENT OF CERTAIN ITEMS A) Raw Materials For calculation of raw material consumed, following formula may be used: Stock of Raw Materials Add Purchases Less Closing Stock of Raw Materials Cost of Material Consumed B) Work in Progress It represents incomplete units at the end of a given period. The work in progress is valued at prime cost or at factory cost. At Prime Cost In such a case opening and closing work in progress is taken into consideration in cost sheet while calculating prime cost. Direct Materials Add Direct Wages Add Other Direct Expenses Add Opening Work in Progress Less Closing work in Progress Prime Cost At Factory Cost Direct Materials Direct Labour

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Other Direct Expense Prime Cost Add Factory Overheads Add Opening Work in Progress Less Closing Work in Progress Factory Cost C) Carriage Inward It is the carriage on purchase of materials, which should be added to the cost of materials purchased. D) Carriage Outward It is the carriage on sales, which should be treated as selling and distribution overhead. E) Defective Materials If defective material is returned to supplier, the cost of material consumed should be reduced by the value of such material. If it is sold, it should be reduced. F) Scrap If wastage or residual of material scrap or defective product is sold as scrap, the value realized should be deducted from factory overheads. G) By-Product Realizable value of by-product is deducted from factory overheads. H) Defective Product If defective product is rectified by incurring extra expenditure, it should be included in factory cost if it is caused by normal reasons. If it is caused by abnormal reasons, the rectifying cost is transferred to costing P & L A/c.

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3.1.10 Case Oil Pump Model for Maruti Suzuki

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3.1.11 Differential Case Model for BMW Model 452 & 204

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3.1.12 Cost sheet of oil Pump

COST SHEET OF CASE OIL PUMP FOR MARUTI SUZUKI

PARTICULARS
DirectMaterial Direct Labour Direct Expenses Prime Cost

AMOUNT
472.74 10.89 15.00 498.63

FactoryOverhead
WorksCost Administration Overhead Cost of Production Selling Expenses

48.70
547.33 45.00 592.33 40.80

Cost of Sale
Profit Selling Price

633.13
111.93 745.06

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3.1.13 COST SHEET OF DIFFERENTIAL CASE FOR BMW

PARTICULARS Direct Material Direct Labour Direct Expenses Prime Cost Factory Overhead Works Cost Administration Overhead Cost of Production Selling Expenses Cost of Sale Profit Selling Price

AMOUNT 198 2.28 1.50 201.78 15.22 217 8.73 225.73 5.00 230.73 19.27 250.00

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3.2 SAP All departments of company run through SAP software which is used by mostly manufacturing company. Work on SAP was a good experience, most of the work carried in this software. The following work was done through SAP in Finance and Accounts department. Maintain daily stock record in RG1 register Make an invoice bill of material/Goods sent to the consignee Pass the vendors(Purchase) bill in SAP Make a cash voucher of daily expenses in SAP Pass the excise bill in SAP Make an invoice bill of sale of machinery in SAP Pass the payment document in SAP

When goods sent to the consignee e.g.(Maruti Suzuki,BMW,Renault) documents was completed regarding the sale. When sale was done outside the state Vat 49 form was must to fill by the company. Two forms were filling at the time of sale of the products i.e. inward form and outward form, with the invoice bill of sale, outward form used for the consignor and inward form for the consignee. ST 38 form was also attached when sales made in Haryana state. Three copies of invoice bill were generated 2 copies for the consignee and 1 copy for the consignor gate pass. VAT (Value added Service) and CST (Central Sales Tax) forms were also filling by the accounts department. The company gives CST form for his vendor to submit the CST to the government. Department records CST and VAT form data in MS excel, at the time of goods sent to the consignee an invoice bill of goods was made by accounts department. Data regarding the VAT and CST forms was filling in the MS Excel to remember how many vendors we had sent CST form. Payment of the purchase bill were maintain in SAP, a MIRO code is given for the pass the purchase bill documents in SAP.A

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screen was appear for the documents than fill the details of purchase bill. Payments details were shown in the screen tally with purchase bill document and make the payment to the vendor. The screen show green light means have no more payments were made to the vendor. Check the criteria of purchase department to purchase a material to the vendor. When a department wants something to purchase first of all they make a PR (Purchase Requisition) and gives to the purchase department. The responsible person of purchase department finds the vendor for purchase of the material and after find the vendor he generate a PO (Purchase Order ) and gives to vendor. Purchase bill of including excise were passed in the SAP. Excise bill are different to the another bill of purchase and sale, its entry were different in SAP.(JTIEX-P) code are given in SAP when we put these code in sap a screen was generated with excise after that we fill all the excise details.SAP training is provided to staff employee and new comers also.

3.3 Interpretation:
The study comprises assembling process of Oil Pump and BMW differential Case. The assembling passes through several processes. Each process is carried out carefully. All the processes are unique. The processes do not match the process followed in any other company. Separate fixtures are set for each process. Company follows semi-auto working system i.e. combination of manual and machination. All work stations are arranged in a proper sequence. The output of one workstation is the input of next. There is always a one piece flow and the overlapping is strictly not allowed. The work environment is conducive. The plant is fully air conditioned, and properly neat and clean. The associates and members are in uniform having their batches. In plant the associates have to wear shoes. If anybody breaches the discipline he is fined. After accomplishment of assembling, each product is tested twice, at first through machines and second time manually. This ensures the accuracy of assembling. In case any defect found the assembly is sent for rework. A good quality inspection program is carried out in plant. The raw material is checked twice, at first at store and second time when it comes to the assembly line. All machines are checked every month. Every month inventory level is checked.

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As the company is an out source for the automobile companies, therefore the automobile companies like bmw and Maruti Suzuki visit Kapbros engineering ltd regularly. The quality improvement methods followed by the Rico is one of the best methods follows in MNCS like Kaizen, Poka-Yoke, TPM, TQM, Quality-Circle. Proper training is provided to each associate, member, group leader. On-the-job training is provided to the newcomer. And also time-to-time training is provided to everybody

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FINDINGS
4.1 4.2 4.3 All the assembling processes are unique. Separate fixtures are set for each process. Company follows semi-auto working system i.e. combination of manual and machination. 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 Company follow six components of cost sheet Every month inventory level is checked. Company record many data in ms excel. On-the-job training is provided to the newcomer. SAP training is provided to Staff members. Company achieved monthly production turnover easily. Every departments run through SAP. Documentation was maintained during the sales of the product. SAP software make easy to carrying data safe for future. Service tax and sales tax paid by monthly. Every computer was server based its easy to work on any computer in company.