Inventory management

INTRODUCTION 1.1 EXCEUTIVE SUMMARY The problem of competition is increasing in global market place. It has forced the firms to consider ways of improving the inventory control system. Severe competition makes it necessary to continuously introduce new products and new designs of products. Now a day every company will face the competition, because of that every company maintains a flexible inventory system. It will depend on how the company will respond to the fast changing market needs, customer expectation and technological advancement. The company will focus on improvements on the following measures: - The Inventory Level and work-in-progress Quality of the Product and technological advancement Flexibility and responsiveness of the production process. To meet the increased demand of the product, it is necessary to increase the capacity of existing construction facility. INVENTORY CONTROL SYSTEM The necessity of effective inventory management is being increasingly realized in industrial and non-industrial organization both in India and abroad. This realization has come about because of increasing complexity of the task of managers and administrators. In most organization, the problem of effective inventory control is now viewed as the most critical problem with changes in social climate. While these can be great assets to the organizations, they become problems if the organization is not able to manage inventory properly. Liquidity and profitability are the two vital aspects of corporate business. Any business cannot run without these two. A firm may run without profits for sometime; but with no liquidity, the firm cannot run their business. That is why management of inventory is an integral part of corporate planning in business life. The proper inventory control system leads to an optimum utilization of resources. Idle materials are of a financial burden to the organization. Thus proper, inventory management directly assists in efficient functioning of the company. S.L. Goel says “take care of the forest, the tree will take care of itself”, it should be the main motto of an inventory controller. In inventory management, various methods and techniques can be adopted to control the inventory like, prompt maintenance of registrars, proper raw material arrangement, and fixation of various control levels and application of inventory control techniques and bin card system etc, which are relevant for inventory control in stores department. Inventory management will help an organization in dealing with the supply of the raw materials and other activity in order to achieve the maximum co-ordination and optimum expenditure on materials to increase the profits of the firm. CLA’s inventory control system is chosen for the study; by the investigator is no expectation in view of growing significance of the efficient control of inventories. Hence, the researcher was prompted to take up this topic. 1.2 PROBLEM STATEMENT The problem selected to the analysis is “to study the effectiveness of inventory control system” at Capital Land Assets Pvt Ltd., The effectiveness of the prevailed inventory system is analyzing simultaneously. The variation of the prices of raw materials are also analyzing with their effects on the overall working of the unit. The literary meaning of the word “Inventory” is stock of goods. Every enterprise needs inventory for smooth running of its activities. It serves as a link between production and distribution process. The unforeseen fluctuation in demand and supply of goods also necessitates the need for inventory. It also provides a cushion for future price fluctuations. The purpose of inventory management is to ensure availability of materials in sufficient quality and quantity as and when required and also to minimize investment in inventories. Thus it is very essential to have proper control and management of inventory. Inventories play a vital role in operation of real estate’s industry. The inventory ensures operational smoothness. In almost all the organizations the substantial part of capital is invested in inventories. Inventory refers to stock of products a firm that is for sale and also the components that make up the product. Usually, inventories constitute a major portion, about 60% of total current assets. Hence, management of inventory becomes crucial to the successful management of overall working capital of a business enterprise. The management of inventory is necessary for prevention of leakage, spoilage, deterioration, obsolescence, wastage of materials. It aims at improving material handling, saving in material cost, increased production and large profits. The inventory management is a part of planning budget, which often falls within financial area. The financial manager is playing an important role in determining the nature performance of inventories. 1.3 OBJECTIVES OF THE STUDY The main objectives of inventory management are operational and financial. Listed below are some of the main objectives of inventory management. To have stock available as and when required. To maintain adequate accounting and understanding of inventory. To avoid both overstocking and under stocking of inventory. To ensure right quality goods at reasonable price. To design proper organization for inventory management. To bring down the inventory carrying cost. To facilitate furnishing of data for short term and long term planning and control of inventory. To minimize losses through deterioration, pilferage, wastes and damages. To avoid duplication in ordering or replenishing stocks. To facilitate purchasing economies. To decide which item to stock and which item to procure on demand. OBJECTIVES OF THE STUDY The project study is aimed to evaluate the inventory control system of Capital Land Assets Pvt ltd. This objective of the project is to analyze the existing practice of the inventory management, to ascertain the inventory control methods adopted by the company and to identify the problems in managing inventory. To know the efficiency of Inventory Management in Capital Land Assets Pvt Ltd., To carry out ABC analysis this is carried in the company. 1.4 SCOPE OF THE STUDY The scope of the study is extended to materials department in particular and purchases and stores department, in general further the study confiner to the Capital Land Assets Company. This study was mainly concentrated on inventory management adopted by the company. The mode of selecting of the vendors, managing the orders and further actions for satisfying the requirement are analyzed. The company’s purchase procedure will influence more on the level of inventory of the company. So the study of purchase has vital role to understand the efficient system of the company. BENEFITS OF SOLVING PROBLEMS If the problems stated in the above are solved, then the company will have effective inventory control system, which will reduce cost of holding inventory. The company will get resistance against frequent changes in price levels of raw materials. The company can develop effective purchase procedure mode, which reduces time and can have good system of supplier selection to have good quality of materials at reduced cost. 1.5 METHODOLOGY The methodology resorted to data collection is in both Primary data Secondary data Primary data collected by interacting with the Accounts Manager, Divisional General Manager. The data regarding the present systems of controlling inventory were collected. The secondary data was obtained from the past records and files of the organization and also from financial statements and books, journals, magazines, newspaper and Internet. LOCATION OF THE STUDY: Present study was conducted at the Capital Land Assets Company. SAMPLING DESIGN: Operationally the following sampling design has been used in the sample planning: Type of Sample: - Simple random method is adopted. Sampling Unit: - The sampling unit that has formed on the basis of the actual sampling procedure is chosen from Capital Land Assets Bangalore. Sampling size: - The sample size selected is 99 villas of Capital Land Assets Bangalore. Tools and techniques of data collection: Communication and Structured Questionnaire 1.6 LIMITATIONS The study is conducted at the Capital Land Assets Company Ltd., The findings may not be applicable throughout the financial year. The findings of the study are applicable exclusively to Capital Land Assets Pvt Ltd., in Bangalore. Further, in order to maintain the confidentiality of certain aspects a few alterations have been made without hampering the authenticity of the data. As the study is purely for academic purpose the inexperience of the author make the analysis less processed when compared with the professional analysis. PRODUCTIVITY THROUGH EFFECTIVE MATERIAL MANAGEMENT An inventory converts raw material and other inputs into finished goods with the help of MAN and MACHINE. The objective of industrial production is to manufacture quality products at competitive cost so as to earn some profit. This would naturally demand efficient use of manufacturing resources viz man, machine, money and material. Since it counts for more that 50% of total money spent, Material Management has assumed significant importance. It is known as effective measures such as close inventory control, checking wastage, skilful buying and cutting down costs at various stages can save a lot of money and contributes to productivity and to profit. 2.1 INVENTORY PLANNING AND CONTROL There is another reason why inventories rise. Sometimes material is issued on shop floor but not consumed. Thus, Material Management which treats issues as consumption, believes the item is being consumed, whereas is , in fact, not so. The production department needs to keep material management closely informed and whenever a material drawn from stores is not likely to be used for a month or more, it should be returned to stores so that stores stock levels accurately reflect the actual inventory position. The same applies raw materials, which have been converted to work-in-process inventory and not yet processed to the final product. IDLE INVENTORY A NATIONAL PROBLEM A major problem faced by most-rather all inventory holders, including the housewives, is that of the idle inventory. A part of this inventory, either small or large, always lies idle for long periods, and ultimately most of it has to be thrown as unusable or scrap. POOR INVENTORY CONTROL According to Walker, inventory control is not just a material management or warehouse department issue. The purchasing, receiving, engineering, manufacturing and accounting departments all contribute to the accuracy of the inventory methods and records. PRODUCTIVITY THROUGH MATERIALS BUDGET Materials budget should be prepared based on actual requirement as per consumptions norms. Control measures should be introduced to see that expenditure should match with the budget so prepared. This should be periodically checked for close control on inflow of material. The delivery should be phased. The inventory ratio as per norms would have to be maintained. 2.2 INVENTORY CONTROLS Inventory controls safeguard the assets of a firm, ensure the accuracy and reliability of records, promote efficiency within an organization, and encourage management to adhere to policies and procedures. The existence of good inventory controls reduces irregularities in an account balances and results in efficient audits. INVENTORY MANAGEMENT AND INVENTORY CONTROL The Inventory Management system and the Inventory Control Process provides information to efficiently manage the flow of materials, effectively utilize people and equipment, coordinate internal activities and communicate with customers. Inventory Management and the activities of Inventory Control do not make decisions or manage operations they provide the information to managers who make more accurate and timely decisions to manage their operations. 2.3 What are inventories? Every one, be it a firm, or an establishment, or an individual, is familiar with the word stock because each of these carry some items to meet their requirements. In trade and industry, the word stock, is called inventories. 2.4 Objectives of scientific inventory control system Service to the customers Continuity of productive operations Effective use of capital Economy in purchasing Reduction of risk of loss Reduction of administrative workload Administrative simplicity Why do we have inventories? To gain economy in purchasing To keep pace with changing market conditions To satisfy demand during period of replenishment To carry reserve stocks to avoid stock outs To stabilize production To prevent loss of sales To satisfy other business constraints 2.5 Historical Perspective of Inventory Management The management and control of Inventory is a challenge to all organization in any sector of the economy. The problem of Inventory does not confine them to profit making big firms. The same type of problem is encounter by social and non-profit organization too. Inventory problems have been encountered by every society, but it was not out until the 20th century that the analytical techniques were developed to study them. The initial impetus for analysis expectedly comes from manufacturing sector. It was until after World War II that a concerted effort an risk and uncertainly aspects of inventory was made. In theory, inventory is an area of organized operation that is well developed. Material is a very important factor of production. It includes physical commodities used to manufacture the final end product. It is the starting point from which the first operation starts. It is inventories and does not get waste & exhaust (unless it is deteriorated) with the passage of time as labour is wasted that it can be purchased on varying quantities according to the requirements of firm where as often Clements of cost like labour and other services cannot be easily varied once they are established. Materials account for nearly 60% of cost of production as it is clear from an analysis of the financial statements of a larger number of private and public sector organization. According to the Indian Association of material marketing 64 paise in a rupee is spent on material by Indian Industries, 16 paise on labour and the rest of one rupee is spent on overheads, thus the importance of material control lies in the fact that any savings made in the cost of materials will go a long way in reducing cost of the production and improving the profitability of a concern. Studies by experts in this field have highlighted the fact that if an organization can affect 5% saving in material cost, it would be as good as the increasing the production or sales by about 36%. Proper control of materials is necessary from the time orders for purchase of materials is placed with suppliers until they have been consumed. The object of material may be reduced in other words, efforts are to be made to reduce the cost material when it is purchased, stored and used. 2.6 Meaning and Definition Several authors have defined the term inventory. The more popular of them are, the term inventory includes Raw materials, work-in progress, finished packaging, spares and others in order to meet an unexpected demand or distribution in the future. It can be used to refer to the stock of raw materials unhand at particulars, goods in process of manufacturing, finished products, merchandise, purchased for relate and others like tangible assets measured and counted in connection with financial records and accounting records, the reference may be the stock of goods owned by an enterprise at a particular time. Yet another definition is that the term includes the following categories of times. Production inventories, MRO inventories, in process inventories and finished goods inventories. Additional: Investment in stock is a necessary feature of manufacture if there should be continuous and co-ordinate flow of work, towards which production planning is directed. The extent to which stock investment is prudent must bear relationship to prevailing economic conditions. So far affect the availability of the supply and price trends it is also dependent to a large extent on the nature of the product concerned. It is often useful to express the investment in stock in terms of its rate of annual turnover and this can vary between wide extremes quite obviously it is impossible to down a yard stick against which stock investment should be measured. The importance of stock control arises from the demand which investment in stock places upon the available liquid capital. It is of far wide significance from the point of cost of reduction by virtue of the fact that stock can give rise to the following sources of cost. Storage. Handling. Stock taking. Physical determination & its prevention. Pilfering. Insurance. Obsolescence. Customer taste. Price fluctuations. Product design and variety are major influence upon stocks determining as they do the number of different items which is necessary to hold the solution to this aspects of the problem may lie in a greater degree of standardization and simplification in product design, the advantage of which come readily apparent not only in this condition, but also throughout production. Stock investment and the costs, which can be associated with it, May also; be reduced as a result of: Improved production planning. Negotiation of forward contracts and scheduled delivery dates with suppliers. The establishment of realistic maximum and minimum stock kevels for each item. Reduced manufacturing cost. Negotiation of preferential terms with suppliers. Efficient stock records, regular stock keeping a perpetual or other bases and check upon slow moving or absolute items. The materials requirements can be classified as Raw materials. Components purchased from outside sources. Complete saleable products purchased from outside sources. The division between components products made by the business and those purchased outside is normally laid down on the budget, although such plans may be subject to amendment in respect of difficulties encounter when preparing the detailed schedules. 2.7 INVENTORY MANAGEMENT AND CONTROL TECHNIQUES The literary meaning of the word “Inventory” is stock of goods. Every enterprise needs inventory for smooth running of its activities. It serves as a link between production and distribution process. The unforeseen fluctuation in demand and supply of goods also necessitates the need for inventory. It also provides a cushion for future price fluctuations. The purpose of inventory management is to ensure availability of materials in sufficient quality and quantity as and when required and also to minimize investment in inventories. Thus it is very essential to have proper control and management of inventory Meaning and Nature of Inventory The literary meaning of the word “Inventory” is stock of goods. Inventory constitutes the most significant part of current assets of a large majority of companies in India. To understand the exact meaning of the word “Inventory” we must study it from the usage side of the operations. Inventory includes the following things: 2.8 Types of Inventories Raw materials Work-in-process Finished goods Safety Normal Excessive Spares Factors Influencing Inventory Lead time Cost of holding inventory Reorder Point Stock Variety Reduction Materials Planning Service Level Obsolete inventory and stock Quantity discount Criteria for judging the inventory system While the overall objective of the inventory system is to minimize the cost to the firm at the risk level acceptable to management, the more proximate criteria for judging the inventory system are: Comprehensibility Inventory systems range from the utterly simple to the weirdly complex. Irrespective of how simple or complex a system is, regardless of whether it is automated or manual; it should be clearly understood by all affected parties. The system must be properly explained to all concerned so that its purpose, logic and rationale are transparent. This generates enthusiasm for the system and enhances its credibility. Otherwise it is likely to be perceived as a mysterious ‘Black Box’ of dubious value. Adaptability The questions raised in this context are: Is the system responsive to change? Can new products, new situations, and new requirements be handled by the system? A certain degree of flexibility and adaptability must be designed into the system to make it versatile. Of course this cannot be and this should not be carried too far. The system must not provide for every possible and imaginable contingency. If it is developed with this ideal, it is likely to be a complex monstrosity. Remember the caveat that the design of any system should ordinarily take care of about 90 percent of the cases, leaving the balance 10 percent to be handled by hand. Timeliness Inventories may suffer loss in value on account of variety of factors. The more common sources of value decline are: Obsolescence caused by changes in technology and shifts in consumer taste. Physical deterioration with the passage of time. Price fluctuation because of inherent volatility of certain commodities. The inventory system should be capable of inducing timely action. It should provide adequate forewarning, which triggers appropriate corrective steps. Tools and Techniques of Inventory Management Effective inventory management requires an effective control system for inventories. A proper inventory control solves the acute problem of liquidity but also increase profit and causes substantial reduction in working capital of the concern. The following are the important tools and techniques of inventory management and control. Determination of stock level. Determination of safety stocks. Selecting a proper system of ordering for inventory. Determination of Economic Order Quantity. ABC analysis. VED analysis. Inventory turnover ratio. Ageing schedule of inventories. Classification and codification of inventories. Preparation of inventory reports. ABC ANALYSIS ABC analysis is a method of classifying items, events or activities according to their relative importance. It is frequently used in inventory management where it is used to classify stock items into groups based on the total annual expenditure for or total stockholding cost of each item. Organizations can concentrate more detailed attention on the high value / important items. Pareto analysis is used to arrive at this prioritization. Taking inventory as an example, the first step in the analysis is to identify those criteria, which make a significant level of control important for any item. Two possible factors are the usage rate for an item and its unit value. Close control is more important for fast moving items with a high unit value. Conversely, for slow moving, low unit value items the cost of the stock control system may exceed the benefits to be gained and simple methods of control should be substituted. In most inventories a small proportion of items accounts for a very substantial usage (in terms of monetary value of annual consumption) and a large proportion of items accounts for a very small usage (in terms of monetary value of annual consumption). ABC analysis, based on this empirical reality, advocates in essence a selective approach to inventory control, which calls for a greater concentration of effort on inventory items accounting for the bulk of usage value. This approach calls for classifying inventories into three broad categories, A, B, and C. Category A, representing the most important items, generally consists of 15 to 25 percent of inventory items and accounts for 60 to 75 percent of annual usage value. Category B, representing items of moderate importance, generally consists of 20 to 30 percent of inventory items and accounts 20 to 30 percent of annual usage value. Category C, representing items of least importance generally consists of 40 to 60 percent of inventory items and accounts for 10 to 15 percent of annual usage value. Procedure The following may be used for determining the three categories: Rank the items of inventory, in descending order, on the basis of their annual consumption value and number them 1 to n. Record the running cumulative totals of annual consumption values and express them as percentages of the total value of consumption. Express each number in the list, 1 through n, as a percentage of n (these percentages are actually cumulative percentages). The cumulative percentages of consumption value against the cumulative percentages of numbers and classify items into three broad categories: A, B and C. The nature of these categories has been described earlier. Factors Influencing Inventory Management & Control Several factors influence Inventory management and control. The principal effects of these factors are reflected most strongly in the levels of inventory and the degree of control planned in the inventory control system. The factors include type of product, type of manufacture, volume of output and others. Type of product Among the factors influencing inventory management & control the types of product is fundamental. If the materials used in the manufacture of the product have a high unit value when purchased, a much closer control is usually in order. If the material used in the product is in short supply or is rationed by the Government, this may influence the purchase of this material and its stock maintained. The manufacture of standard products as compared to custom made items will influence inventories, material needed to manufacture standard product is easy to obtain and a close on the stock is not necessary. Material required to product made to order item needs strict control to ensure to that. No item is lost in the process of manufacture such materials and tools are of special and expensive type and a loss of any small part will hold up the production. Need for Inventory Control Increased specialization and sophisticated technology have brought with a range of materials requirements the larger the range the greater the complexity & problems of inventory problems of investment, procurement including imports lead time storage, handling accounting shortages, stock outs deterioration & obsolescence. The sales department wants a good stock of furnished products for ensuring maximum customer service. The finance department may feel that inventories are locking up capital, which should be earning a return thus each department although conscious of its own cost, may be unable to see the total cost, it is therefore apparent than an integrated approach for control the inventories is essential without proper control the inventories have tendency to grow beyond economic limits, tie up funds and increase the cost of maintenance or the carrying cost. At the same time non-availability of inventories involves the cost of stock outs re-ordering cost and additional transit cost. The core of materials management is inventory control. 2.9 Benefits of Inventory Management & Control Proper management and control of inventories will result in the following benefits to an organization. Inventory control reinsures an adequate supply of materials, stores etc., Minimize stock outs and storage and avoids costly interruption in operations. It keeps down investment in inventories inventory carrying cost and obsolescence loses to the minimum. If facilities purchasing economics through the measurement of requirements on the basis of recorded experience. It eliminates duplications in ordering or in replenishing stocks by controlling the sources from which purchase requisition emanate. It provides a better utilization of available stocks by facilitating enter department transfer within a company. It provides a check against the loss of materials through carelessness or pilferage. It facilitates cost accounting activities by providing a means for allocating material costs to products, department or other operating accounts. It enables management to make cost and consumption comparison between operations and periods. It serves as a means for the locations & disposition of inactive and obsolete items of stores. Perpetual inventory values provide a constant and reliable basis for preparing financial statements Symptoms of Poor Management Weakness in the planning and control of inventories are usually indicated by or expressed in complaint about specific systems or conditions rather than as overall criticism of the inventory. Some Specific Frequently Encountered Symptoms Periodic, severe backorders inability to meet delivery promises. Continuously growing inventory quantities while the other backing is remaining constant or is also growing. High rate of customer turnover or order cancellations. Uneven productions with frequent layout & rehiring. Frequent need for uneconomical production runs to meet sales requirements. Excessive machines down time because of material shortage. Periodic lack of adequate storage spaces. Consistently large inventory writes down because of price decline distress scales, disposal of obsolete or slow moving stock. Widely varying rates of inventory loss of turnover among branch ware houses of among inventory items. Consistently large write down of times of physical inventory taking. 2.10 Techniques of Inventory Control Inventory control techniques are employed by the inventory control organization within the framework of one of the basis inventory models viz, fixed order quantity system or fixed order period system. Inventory control techniques represent the operational aspects of inventory management and help realize the objectives of inventory management and control. Several techniques of inventory control are in use and depend on the convenience of the firm to adopt any of the techniques what should be stressed, however is the needed to cover all items of inventory and all stages, i.e. from the stage of receipt from suppliers to the stage of their use the techniques most commonly used are the following: Always better, control (ABC) classification. High, medium and low (HTML) classification. Vital essential and designable (VED) classification. Scarce difficult and easy to obtain (SDE) Fast-moving, slow moving and non-moving (FSN) Economic order quantity (EOQ) Maximum minimum system. Two-bin system. Materials requirements planning (MRP) Just in time. (JIT) Inventory Catalogue Inventory catalogue is prepared after all inventory items have been described classified & coded properly maintained inventory directory pays two important dividends. An inventory catalogue serves, first as a medium of communication. It enables personnel located in many different departments to perform their jobs more effectively. A second benefit produced by an inventory catalogue accuses to the inventory control operation staff. This benefit takes the form of more complete and correct records through the reduction of duplicate records identical parts. 3.1 INDUSTRY SCENARIO Indian economy is the third largest economy in the world. In terms of purchasing power, It is going to touch new heights in coming years. With a stable 7-8 per cent annual growth, rising foreign exchange reserves and rapidly increasing FDI inflows, India has emerged as the second fastest growing major economy in the world. The economy has been growing at an average growth rate of 8.8 per cent in the last four fiscal years (2003-04 to 2006-07), with the 2006-07 growth rate of a whopping 9.6 per cent. As predicted by Goldman Sachs, by 2035 India would be the third largest economy of the world just after US and China. It will grow to 60% US and China. It will grow to 60% of size of the US economy. CHANGING FACE OF NAMMA INDIA OLD INDIA CHANGING FACE OF NAMMA INDIA NEW INDIA Since 2005when the construction and real estate sector was permitted 100% FDI, a total of USD 30 billion came in. Last year, we saw the country’s largest ever IPO of Rs 9,168 crore by DLF. Even with the recent listings of several reailty firms like HDIL, AkrutiNirman, and Sobha Developers, the share of realty stocks in the total market capitalization is just about 4.2% which is far below the global norm of about 15%. Even as interest rates are headed north speculators fear a slowdown in 2008. Public Enterprises and foreign financial institutions remain positive on the reality Sector. In a nut shell the going is good for real estate industry. People in the higher income group – Movement towards quality living, life style, great communities: Luxury villas, rather than 1 single bed room, two bed room, apartments. People in the Low Income group – Budget housing – who can’t afford to pay EMI more than Rs 10,000 – 15,000 per month. It has been seen that majority of the builders who are trying to cater the premium Customers by making high cost houses who have actually a small percentage in Comparison to customers who are looking for low cost houses. . There are very few players/developers in low cost housing sector. Low margin of profits. Government should encourage more Public-Private Participation For example Low cost housing project ‘Shukhobrishti’ spread over 150 acres with 20,000 flats is being executed by West Bengal Government along with Real estate developers PallonjiShapoorji Shukhobrishti is one of the biggest housing projects being developed in South East Asia. A world class villa project in Bangalore 100 premium villas designed bySurbana. In 45 acres of lush greenery. This is designed by an International Architect Surbana from Singapoore. High class community living.International standard Club – House. Magnificent landscaped gardens. Professional construction management. 3.2 COMPANY PROFILE BACKGROUND AND INCEPTION OF THE COMPANY CLA is a fully-owned group Company of the 5000 Crore Alliance Group that has weaved its success story with residential and commercial projects across the country. CLA is geared to be a front-runner in the real estate sector with the objective of injecting a dose of professionalism, efficiency and transparency into the business, thereby propelling its growth. Currently on the anvil, are projects in Mysore, Bangalore and Chennai to build international standard townships.This will be followed by projects nationwide. All of CLA's efforts are geared to meet its 2025 vision of becoming India's leading infrastructure and township developer, with annual revenues of $ 2.5 billion NATURE OF THE BUSINESS CARRIED The company is selling land (plots) and quality houses (villas) to the high network income people. The nature of work is selling and in real estate sector. 3.3 VISION, MISSION AND QUALITY POLICY To be the No. 1 housing infrastructure and township developer in India by year 2025 with annual revenues of $ 2.5 billion. To offer true value to our customers through innovative and superior quality products. To offer healthy ROI and satisfaction to all our shareholders. To offer stability and a sense of belonging to our employees. Win-win attitude towards both employees and customers; practicing integrity; Commitment to quality and excellence; Encouraging creativity and innovation without any prejudice. To provide reliable, timely and quality townships and infrastructure for housing through professionally acceptable procedures and methods which are traceable to national / international standards ensuring confidentiality of customer information and satisfying customer requirements. 3.4 ORANISATION STRUCTURE WORK FLOW MODEL Top level: All the decisions are taken in this level. Middle level: All the Strategy is formed by this level. Lower level: All the strategy is executed by this level. CLA’s ORGANISATION STRUCUTURE M . D H . RSALES &MARKETING PROJECTS FINANCE FINANCE DEPARTMENT V . P FINANCE G .M FINANCE ACCOUNTING MANAGER ACCOUNTSEXECUTIVEACCOUNTSEXECUTIVE SALES& MARKETING DEPARTMENT V . P SALES & MARKETING A .G . MSALESA .G . MMARKETING CRMMARKETINGEXECUTIVEMARKETINGEXECUTIVESALESMANAGER EXECUTIVEEXECUTIVE HUMAN RESOURCE DEPARTMENT V .P HUMAN RESOURCE H . R PAY ROOL H . RADMINSTRATIVE H . REXECUTIVE PROJECT DEPARTMENT V . P PROJECTS PURCHASEMANAGERA .G . MPROJECTSSTORESMANAGER STORE KEEPERPURCHASEEXECUTIVEPROJECTMANAGER PROJECTENGINEERSPROJECTENGINEERS PRODUCTS / SERVICES Two projects are undertaken by us in Bangalore. They are:- PLAM SPRINGS. PALM COUNTY. PALM SPRINGS The environment is serene, with good landscape. The project will have a lot of palm trees, landscape gardens and some water bodies. Thus named “Palm Springs”. Palm spring, a first-of-its-kind international villa project in Bangalore. On 45 acres of serene greenery, under the blue sky, lie not many, but just a few luxury villas that make a fine statement of style. Over 99 international villas are been brought up. A villa cost around RS 1,20,00,000/- World-class amenities Barbecue area Tennis/basketball courts Children’s play areasRoyal palm tree-linked roads Grocery storeParty hall ATMClubhouse Jogging trackHuge landscape gardens -5080420370 PALM COUNTY Palm county offers 250 plots of size 2400sq.ft, 3000sq.ft, and 4000sq.ft.To choose a plot it may vary for Rs25,00,000 to Rs50,00,000. World-class amenities Round the clock water & electricityTennis/basketball courts Children’s play areasRoyal palm tree-linked roads 7 ft. high compound wallParty hall 24 hours securityClubhouse Jogging trackHuge landscape gardens ACHIEVEMENTS SL. NONAMEOCCUP-ATIONNO. OFDEPEN-DENTTOTALINCOME1MR. KOUSHIKWIPRO366,00,0002MRS. RANJINI RWIPRO248,00,0003MR. PAVAN KWIPRO454,00,0004MISS. NEELEMAWIPRO266,00,0005MRS. TREEZAWIPRO472,00,0007MRS. PRATHIMAINFOYSIS354,00,0008MR. SINCHANAINFOYSIS260,00,0009MR. AVININFOYSIS148,00,00010MR. HARSHAVARDANDOCTOR384,00,00011MR. SATISHDOCTOR478,00,00012MR. PUNITHDOCTOR384,00,00013MRS. SUNITHADOCTOR278,00,00014MR. SHENOYDOCTOR380,00,00015MR. RAMA MURTHYDOCTOR285,00,00016MR. ARVIND KHNI’S170,00,00017MR. PRAVEEN KHNI’S364,00,00018MISS. SONALI GHNI’S266,00,00019MR. RAMESHHNI’S272,00,00020MR.SANDEEPHNI’S288,00,00021MR. JONAENGINEER276,00,00022MRS. ILEEN EMANUELHNI’S380,00,00023MRS. GLORY DANIELDOCTOR272,00,00024MRS. UMA KRISHNANDOCTOR368,00,00025MR. ALFREDHNI’S155,00,00026MR. NAVEENHNI’S270,00,000 Table: 3.1 3.7 SWOT ANALYSIS STRENGTH Brand name.

International Standards.Good amenities. Better Environment. Good Infrastructure. Advance technology. Good experts. Proper secure WEAKNESS Fluctuations in market. Intangible assets. Competitor OPPORTUNITIES Focus on High Network Income people. Brand extension. Brand image. Expanding to new geographic area. Improving product line. Huge demand for plots or houses. Tax benefits. THREATS New companies entering into the field of Real Estate. Substitute products. No proper quality. New geographic changes. ( Bangalore , Mysore , Chennai ) Selective inventory control consists of the following types, which are shown, in table: Sl NoBasis of classificationMethods of selective inventory1Value of items consumedABC analysis (always better control) PPV (Proportional Parts Value)2The importance or criticalVED analysis (Vital, Essential and Desirable)3Consumption of materialsFSN analysis (Fast moving, Slow moving and Normal or Non moving)4Unit price of the materialsHML analysis (High, Medium, Low)5Value of items in storeXYZ analysis6AvailabilitySDE analysis (Scarce, Difficult, Easy golf analysis)SOS analysis (Seasonal, Off-seasonal) Table : 4.2 4.1 ABC Analysis One of the widely used techniques for control of inventories is ABC always better control and analysis the objectives of ABC analysis is to very the expenses associated with maintaining appropriate control to the potential savings associated with a proper level of such control. Logically we expect to maintain strong controls over the ‘H’ items taking whatever special actions needed to maintain availability of these items hold stocks at the lowest possible levels consistent with meeting demands, frequent ordering expenditure etc., because of the low amounts in this area, thus with the ‘C’ group we may maintain somewhat, higher safety sticks order more months of supply except lower levels of customer service. It is for this selective approach, ABC analysis is often called the selective inventory control. (SIM) ABC analysis enables to exercise selective control when the materials manager is confirmed with a large number of items. The significance of this analysis is that it spot light attention to be given in respect of the areas like: Loss. Wastage. Scrap. Quality. Price variance. Usage variance. Inventory turnover etc. It also helps to determine safety stocks frequently of ordering preparing of control statements sources from which material is to be procured etc., Hence ABC analysis is one of the best techniques of inventory control Table showing features of ABC analysis: NatureA(High Value)B(Moderate value)C(Low value)Extent of ControlVery strictModerate controlLoose controlSafety of stockNo safety stocksLow safety stocks High safety stocksFrequency ordersFrequency orderingOnce in 3 monthsBulk ordering in 6 monthsControl statementsWeekly control statementsMonthly control reportQuarterly control reportsFollow upMaximum PeriodicFollow up only in exceptional case Type of analysisRegards value analysisModerate value analysisMinimum value analysisForecastingAccurate forecasting in material planningEstimates based on past data on present plansRough estimates for planningPeriod of reviewMinimization of waste, obsolete and surplusQuarterly control over surplus and obsolete itemsAnnual review over surplus and obsolete materialCentralizationCentralized purchasing and storageCombination purchasingDecentralized purchasingLevel of managementMust be handled by senior officers Can be handled by middle managementCan be fully delegatedSources of suppliesAs many sources as possible for each itemTwo or more reliable sourceTwo reliable source for each item.Posting of ledgerIndividual postingSmall group postingGroup postingLead time Maximum efforts to reduce lead timeModerateMinimum clerical effortsValue analysisRigid Moderate Minimum Table : 4.3 ABC analysis is one of the tools for inventory control. ABC refers to always Better control. ABC analysis is done in MCL based on the following criteria. Value Consumption Criticality ABC control characteristics are: ‘A’ :- Very strict control. Very low safety stock. Frequent ordering. Maximum follow up. Weekly control statement. As many sources as possible. Centralized purchasing. ‘B’:- Moderate control. High safety stock. Once in two or three months ordering. Periodical follow up. Quality control. Two or more sources of supply. Combined purchasing. ‘C’ :- Moderate control High safety stock. Much ordering. Exceptional follow up. Quarterly control. Two or more sources of supply. Decentralized purchasing. ABC analysis is done for 50 important items. The calculated figure is shown in table .The ABC analysis in quantity is shown above, ABC analysis in value is shown and ABC Analysis in value and quantity is shown. Determination of safety stock This is extremely important the size of an order of an item which is most economical depends on the value of consumption of that item; its safety cushion depends on the variation in the time it takes to produce the item i.e. the lead time and degree of protection desired. ABC analysis applies to purchasing policy also in fact there should be the closest possible coordination b/w the policy and procedure for acquiring and holding the material the aim should be to reduce overall cost taking into account the actual prices, cost of purchasing ordering holding costs etc., and at the same time ensuing a continuous supply at minimum inventory cost thus the regular purchase should also be analyzed according to ABC analysis. Purchasing ABC analysis applies to purchasing policy also in fact there should be the closest possible coordination b/w the policy and procedure for acquiring and holding the material the aim should be to reduce overall cost taking into account the actual prices, cost of purchasing ordering holding costs etc., and at the same time ensuing a continuous supply at minimum inventory cost thus the regular purchase should also be analyzed according to ABC analysis. The ABC concept is also applicable to stock taking and stores accounting a items are subjected to frequent stock checks and each transitions is pasted on the stores account ears, on the other hand ‘B’ items are physically counted at infrequent intervals and transactions have even done away altogether with physical checks and maintenance of stores account for ‘O’ items. HML Classifications The high, medium and low classification follow the same procedures as ‘1’ adopted in ABC classification only difference is that in HML classification unit value is the criterion and not the annual consumptions value the items of inventory should be listed in descending order of unit value and it is up to the management to fix limits for the three categories. The HML analysis is useful for keeping control over consumptions at department levels, for deciding frequency of physical verification and for controlling purchases. VED classification While in ABC classification inventors are classified on the basis of their consumptions value and in HML analysis unit value is the basis critically of inventories is the basis for vital essential and desirable categorization. The VED analysis is done to determine the criticality of an item and its effect on production and other services it is especially used for classification of spare parts. 4.2 Interpretation of ABC Analysis From the ABC analysis of Capital Land Assets Ltd., (Here, taken major groups of raw materials for the analysis) it is clear that A Class i.e., High value , constitute for 67.96% of annual inventory consumption. It comprises only 23.53% of Total inventory. From this we can understand that only 23.53% of items are major importance because it constitutes 68% of the total value of annual inventory consumption. So control on this class should be more. B Class constitute 22.92% of total annual value and 29.41% of total items. This class is called as medium. This class inventory requires medium level of control of 30% of the items and only 23% of value of inventory. When compare to A Class this inventory require less control. C class constitute of 9.12% of total annual value and 47.06% of total items. This class is called low items. This class inventory requires no control because 47.06 items i.e., almost 50% of the items constitute only 9% of the total value of inventory. So control on this inventory does not require when compared to the A and B class. 4.3 FINANCIAL AND ACCOUNTING PRACTICES In this chapter accounting practice of CLA has been discussed and also financial position of the company has been analyzed through ratio analysis SIGNIFICANT ACCOUNTING POLICIES IN CLA Accounts are maintained on accrual basis. Claims/Refunds not ascertainable with reasonable certainty are accounted for on settlement basis. Fixed assets are stated at cost adjusted by revaluation of certain assets. Expenditure during construction / erection period is included under capital work in progress and is allocated to the respective fixed assets on completion of construction / erection a) Depreciation on fixed assets is calculated on straight-line method. b) Leasehold land is being amortized over the lease period. c) Depreciation on the increased amount of assets due to revaluation is computed on the basis of residual life of the assets as estimated by the value on straight-line method. Assets and liabilities related to foreign currency transactions are translated at exchange rate prevailing at the end of the year. Exchange difference in respect of fixed assets acquired from outside India is adjusted to the carrying cost of fixed assets and in respect of others is changed to profit and loss a/c. Non monetary foreign currency items are stated at cost. Premium in respect of forward contracts is recognized over the life of contract. Long-term investments are stated at cost. Provision for diminution in the value of long-term investments is made only if, such a decline is other than temporary. The current investments are stated at lower of cost or quoted / fair value computed category-wise. Inventories are valued at lower of cost and net realizable value. The cost is computed on weighted average basis. Finished goods and Process stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Revenue expenditure on Research and Development is charged to Profit and Loss Account and Capital Expenditure is added to fixed assets. Borrowing cost is charged to Profit and Loss Account except cost of borrowing for acquisition of qualifying assets that is capitalized till the date of commercial use of the asset. Gratuity and Leave encashment benefits are accounted for on the basis of actuarial valuation as at balance sheet date. Other retirement benefits are accounted on accrual basis. Export incentives and other benefits are recognized in the Profit and Loss Account. Project subsidy is credited to Capital Reserve. Current Tax is amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act 1961. Deferred Tax Assets and liabilities are recognized. Deferred Tax Asset is recognized on the basis of reasonable / virtual certainty that sufficient future taxable income will be available which the same can be realized. Auditing Internal Audit Statutory audit by: - Arora chartered Accountants Tax audit. Taxation Direct Tax: - Deduction of tax at source, tax deduction on salary Indirect Tax: - Excise, sales tax, professional tax, service tax. 4.4 RATIO ANALYSIS In order to analyze the financial position of a company there are various tools and techniques. Among them, one of the most popular way of analysis and interpretation of financial statement is “Ratio Analysis”. Ratio analysis is one of the techniques of analysis and interpretation of financial statement. These are point or indicators of financial strength, soundness, position and weakness of an enterprise and helps in concluding the exact financial position of concern. It is powerful tool of financial analysis used to diagnose the financial health of the firm. The primary objective of ratio analysis is to help management in analyzing the financial strength of the company. Mainly ratios are calculated in order to find out the following results. Liquidity of the firm Profitability of the firm Efficiency of the firm Solvency of the firm Here in this case summarization of annual report of CLA is made. The period 2008 – 2009 And it is composed with previous year 2007-2008. Liquidity of the Firm It is shown the ability of the firm in full time. The short-term creditors are interested in knowing it. Current Ratio It expresses the relationship between current assets and current liabilities. The company’s current ratio is 1.27:1 in the year 2008-2009 and it was 1.159:1 in the year 2007-2008 though the ideal current ratio is1.33: 1 but the company’s current ratio is moderate than that so it shows that the current position of the firm is good. Profitability of the Company Profitability is an indication of the efficiency with which the operation of the business is carried on. Activity Ratio of the Firm The activity ratio indicates the efficiency, which the capital is rotated in the business. This is also known as efficiency ratio. Working Capital Turnover Ratio This ratio indicates whether working capital has been effectively used in making sales or not. There is a high turnover of working capital in previous year 2007-2008 that is 20.49 times but in current year, the working capital turnover is 13.63 times. Fixed Asset Turnover Ratio This ratio indicates the extent, which the investment in fixed assets contribution was 2.03 times in the year 2007-2008. And it has increased to 2.41 times in the year 2008-2009. That means the fixed assets have been utilized to an optimum extent. Inventory Turnover Ratio This ratio indicates the relationship between sales to inventory. This ratio measures the velocity of conversion of stock into sales. A high inventory turnover velocity indicates efficient management of inventory because more frequently the socks are sold, the lesser amount of money is required to finance the inventory. It was 9.77 in 2007-2008 and it is decreased to 8.01 in 2008-2009 Raw Material Turnover Ratio This ratio indicates the relationship between the sales and raw materials. In the year 2007-2008 it was 18.34 and it is raised to 20.64 in the year 2008-2009. Stores & Spares Turnover Ratio This ratio indicates the relationship between the sales and stores and spares. In the year 2008-2009 it was 150.11 and it is raised to 173.48 in the year 2007-2008. Finished Goods Turnover Ratio This ratio indicates the relationship between the sales and finished goods. It was 30.65 in the previous year 2007-2008 but it is decreased to 15.59 in the year 2008-2009. Stock in Process Turnover Ratio This ratio shows the relationship between the sales and stock in process. It was 116.73 in the previous year 2007-2008 but it is increased to 154.18 in the year 2008-2009 Inventory to Working Capital Ratio This ratio determines the connection between inventories to working capital. It was 2.19 times in 2007-2008 but it is reduced to 1.70 times in2008-2009. Inventory Conversion Period It may also be of interest to see average time taken for clearing the stocks. This can be possible by calculating inventory conversion period. The conversion of stocks was 37.33 days in 2007-2008 but it is 45.56 days in 2008-2009. 4.5 Analysis and Interpretation SL NOAnnual UsageCumulative Annual UsageCumulative % of usageCumulative % of itemRank 11424088848142408885833.834839115.882352941 1 2638095745206218459348.9953165611.76470588 2 3415908360247809295358.8768576417.647058823 4382110688286020364167.9554019123.529411764 5315273060317547670175.4459550929.411764715 6200230065337570676680.2032088635.294117656 7169440264354514703084.2289296441.176470597 8151707008369685403887.2333270947.058823538 9128154096382500813490.8781323552.941176479 1082938735390794686992.8486686458.8235294110 1182657653399060452294.8125267264.7058823511 1260586197405119071996.2519904470.5882352912 1358765119410995583897.6481872876.4705882413 1446180793415613663198.7453938982.3529411814 1521969580417810621199.2673677988.2352941215 1615679419419378563099.6398941394.1176470616 1715156648420894227810010017 18************************************18 19************************************19 20************************************20 Table : 4.4 ABC Analysis of CAPITAL LAND ASSETS LTD CategoryCumulative total % value% value% itemA69.9554019167.9623.53B90.8781323522.9229.41C1009.1247.06100100 Table : 4.5 From the 20 inventories listed above the following are the observations made: First 4 inventories constitute 69.96% of the total value and they constitute 24% of total used. Since the first 4 inventories constitute 70% of total value they come under category A.

Next 5 inventories listed constitute to about 22.92% of the total value and they constitute 29.41% of total items used. Since they constitute 23% of total value they come under category B.

Next 8 inventories listed constitute to about 9.12% of the total value and they constitute 47.06% of total items used. Since they constitute only 9.12% of total value they come under category C.FINANCIAL POSITION REVIEW Summarization of Balance Sheet as on 10th February 2009: - The company is having authorized capital of Rs. 24,00,00,000 (2,40,00,000 equity shares of Rs. 10/- each) The company’s paid up equity share capital is Rs. 12,50,000,000 (12,50,00,000 Equity shares of Rs. 10 each) The company paid up preference share capital is Rs. 70,00,00,000 (7,00,000, 14% redeemable cumulative preference shares of Rs. 100 each) The company has got reserves and surplus of Rs. 5,60,93,00,000. The company net fixed asset of Rs. 2,55,22,20,957 The company has net current assets of Rs. 21,60,66,000 The company’s Balance Sheet as on 10th February 2009 is shown above. Balance Sheet as on 2008 - 2009 & 2009 - 2010 PARTICULARSScheduleAs at30/09/2006Rs. In CroresAs at30/09/2005Rs. In CroresSOURCES OF FUNDSSHARE HOLDERS FUNDS CapitalReserves and Surplus1230.79560.9337.46745014591.72782.60LOANS Secured Loans Unsecured Loans3724.77219.10671.28159.22943.87830.50 TOTAL1535.591613.10 APPLICATION OF FUNDS:FIXED ASSETSGross BlockLess: Depreciation42084.22860.031938.72764.74NET BLOCK1224.191173.98Add: Capital Work in Progress 22.5161.631246.701235.61INVESTMENTS:561.46250.04 Deferred Tax1.613.05CURRENT ASSETS, LOANS AND ADVANCES61013.52812.83Less: Current Liabilities and Provisions7796.86701.37NET CURRENT ASSETS216.66111.46Miscellaneous Expenditure (To the extent not written off or adjusted)9.1612.94TOTAL1535.591613.10 (Source: Finance Department) Table : 4.6 Profit and Loss Account for the Year Ended 2006 &2005 PARTICULARSSchedule2005-062004-05INCOMESalesLess: Excise DutyOther IncomeIncrease (+)/ Decrease (-) in Finished Goods892952.69343.482609.2117.6192.162383.82304.742079.0816.4422.322718.982117.84ExpenditureMaterial and ManufacturingEmployeesFright & TransportationOther Expenses1011122150.32155.7088.70155.381611.30142.6683.24149.102550.101986.30Operating Profit(Before Interest, Depreciation)Interest168.8876.15131.5464.45Profit Before DepreciationDepreciationTransfer from capital reserve92.7397.5026.5767.0990.2226.57Profit Before TaxProvision for current taxMAT Credit EntitlementDeferred TaxProvision for Fringe Benefit Tax21.800.47(0.47)1.443.313.44(14.52)1.20Profit After TaxAdditional Excise Duty Less: Transfer from general reserveTax provision for earlier yearsDebenture redemption reserve no longer requiredSurplus from previous year17.053.3541.5316.7636.7036.700.281.0140.3261.9357.81AppropriationsDebenture redemption reserveGeneral ReserveProposed DividendCorporate Dividend TaxSurplus carried to balance sheet5.2720.007.701.0827.885.991.757.491.0541.5361.9357.81Basic Earning Per Share (Rs)CashAfter Tax31.506.0117.514.40 (Source: Finance Department) Table : 4.7 Formulas for calculating ratio analysis : Current Ratio = Current Assets Current Liabilities Inventory turnover ratio = Total Sales Total Inventory Working Capital turnover ratio = Cost of sales Net working capital Fixed assets turnover ratio = Net Sales Fixed Assets Raw materials turnover ratio =Direct Materials Total Inventory Stock in progress ratio =Net sales Inventory RATIO ANALYSIS REVIEW Calculation of current ratio: YearCurrent AssetsCurrent LiabilitiesRatios2006786.36585.411.3432007776.30649.161.1962008812.83701.371.15920091,013.52796.861.272 Table : 4.8 Calculation of Inventory Turnover Ratio: YearSalesInventoryRatios20062077.34211.319.83120072257.87178.1712.67320082283.82244.039.35920092952.69368.598.011 Table : 4.9 Calculation of Inventory Conversion Period : YearDays in YearInventoryTurn Over RatioDays200636512.77728.56720073659.83137.127200836512.67328.80120093659.35939.000 Table : 4.10 Calculation of Fixed Asset Turnover Ratio: YearSalesFixed AssetRatios20062077.341264.831.64220072257.871207.111.87020082283.821173.981.94520092952.691224.192.412 YearNetworkingCapitalNet AssetRatios2006200.951264.830.1592007127.141207.110.1052008111.461173.980.0952009216.661224.190.177 Table : 4.11 Calculation of Debt-Equity Ratio: YearTotal DebtNet WorthRatios2006838.0637.4622.3722007750.6737.4620.0392008830.537.4622.1702009943.8730.7930.655 Table : 4.12 Calculation of Coverage Ratio: YearEBITInterestRatios2006196.8898.71.9952007156.0178.191.9952008131.5464.452.0412009168.8876.152.218 Table : 4.13 Calculation of EPS: YearPATNo of EquitySharesRs200622.093.7465.897200712.193.7463.254200816.763.7464.474200917.053.0795.538 Table : 4.14 Turn Over Ratios: Raw Material Turnover Ratio: YearSalesRaw MaterialsRatios20062077.3456.2536.93020072257.8792.9724.28620082283.82129.9517.57520092952.69143.0420.642 Table : 4.15 Stores Ratio: YearSalesStoresRatios20062077.3413.8150.53220072257.8715.86142.36320082283.8215.88143.81720092952.6917.02173.484 Table : 4.16 Finished Goods Ratio: YearSalesFinishedGoodsRatios20062077.34127.3316.31520072257.8754.9341.10420082283.8277.7829.36320092952.69189.3815.591 Table : 4.17 Stock in Progress Ratio: YearSalesStock inProgressRatios20062077.3413.93149.12720072257.8714.41156.68820082283.8220.42111.84220092952.6919.15154.187 Table : 4.18 Calculation of Correlation between Inventory Turnover Ratio and Return of Investment: YearInventory TurnOver RatioROI20069.8312.47200712.6731.4620089.3592.1420098.0112.8852.5111.15 Correlation is -0.813920785 Table : 4.19 There is negative correlation with respect to inventory turnover & Return on Investment. FINDINGS: The current ratio of the company shows reduced investment every year marginally. This is indicated that the company is recovering sales revenue in cash quickly &debtor’sturnover & inventory turnover is being good. Inventory Control System: As per the study raw materials has increased the efficiency of the inventory performance with less wastages and the has achieved significant reduction in the transportation cost and other costs. SUMMARY Inventory management at Capital Land Assets construction company, Bangalore, has contributed a lot for the efficient flow of work. It was found that the inventory management process and its practice of a higher degree and highly sophisticated manner. Efficient inventory management of inventory helps the owners, but also customers, suppliers, government and society. To increase the profits it is necessary to reduce the inventory cost. The study has been undertaken with the objectives such as inventory control system, ABC analysis; purchase procedure and evaluation of purchase procedure. By studying these objectives it is helpful know the inventory control system in Capital Land Assets. CONCLUSION To conclude that in Capital Land Assets, the stores department is concerned with the receiving of materials, storing and issuing to the production department. Regarding purchase department, it will purchase the raw materials from within the Karnataka state. The company is consuming various categories of materials there is balance between the procurement and consumption more often the company depends upon the just in time management principles which is very common in most of the foreign collaborated organizations. The purchase procedure of the company should move for localization, this should greatly influence on easy procurement of materials in time and also reduces ordering and carrying cost of the company, it will helps to increase the profits of the company. REFERENCES Anon, “Poor Inventory Control”, HYPERLINK http://www.industrialproducts.com www.industrialproducts.com I.M. Pandey, (1999), “Financial Management”, 8th Edition Vikas Publication House Pvt. Ltd. K. Ashwathappa and K. Shreedhar Bhat, 2004, “Production and Operation Management”, First Edition, Himalaya Publication. Prasanna Chandra, (2003), Financial Management, Fifth Edition Mc Graw Hill. K Shridhara Bhat, “Logistics Management”, First Edition 2005, Himalaya Publication House. Cincinnati, OH, February 25, 2007, manufacturing journalist Thomas R. Cutler. REDWOOD SHORES, Calif., Feb. 26 /PR News Oracle (NASDAQ: ORCL) Suanta Deb IAMM.Naresh K Malhotra, “Marketing Research” 3rd edition Pearson Education Asia. Philip Kotler “Marketing Management” 2004, 11th edition PHI Pvt. Ltd. New Delhi. Prasanna Chandra, (2003), Financial Management, Fifth Edition Mc Graw Hill. Role Norbom, Interlake Corporation, (1988) Sumter A system to achieve inventory in manufacturing, “Production & Inventory Management Journal” Third Quarter, (9-13) Roger c. Vergin, PhD, 1998, an examination of inventory turnover in the fortune 500 industrial companies) “Production & Inventory Management Journal” (First Quarter) (51-55)

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