IRJMST Vol 10 Issue 9 [Year 2019] ISSN 2250 – 1959 (0nline) 2348 – 9367 (Print)

A PROJECT ON CAPITAL BUDGETING AT HYUNDAI MOTORS

Damera Suneelkumar
Internal guide: B.Sri Pavani
(Asst.professor), MBA

DEFINITIONS:
"Capital Budgeting is the process of generating, evaluating, selected from following an upon the
capital consumption options".
According to L.J.Gedman;
"Capital Budgeting is the long haul getting ready for making and account proced capital expenses ".
According to Charles.T.Hongra. "Capital planning for the most part alludes to accuring contribution
with long haul returns".
In any developing concern, capital planning is pretty much a nonstop procedure and it is done by
various practical zones of the board, for example, generation, promoting, designing, budgetary
administration and so forth. All the important utilitarian divisions assume an essential job in the
capital planning choice procedure of any association, yet for the present, just the budgetary parts of
capital planning choice are considered to examine.
The job of a fund supervisor in the capital planning essentially lies during the time spent
fundamentally and top to bottom examination and assessment of different elective recommendations
and after that to choose one out of these. As effectively expressed, the fundamental destinations of
money related administration is to amplify the abundance of the investors, in this manner the goals of
capital planning is to choose those long haul speculation extends that are relied upon to make top
level augmentation to the abundance of the investors over the long haul.
Significance of Capital Budgeting:
The significance of capital planning can be comprehended from the way that an unsound venture
choice may demonstrate to be deadly to the very presence of the association.
The significance of capital planning emerges basically because of the accompanying:
1. LARGE INVESTMENT:
Capital planning choice, by and large includes enormous venture of assets. Be that as it may, the
assets accessible with the firm are rare and the interest for assets are surpasses assets. Consequently,
it is significant for a firm to plan and control its capital consumption.
2. LONG TERM COMMITMENT OF FUNDS:
Capital consumption includes enormous measure of assets as well as assets for long haul or a lasting
premise. The long haul responsibility of assets expands the budgetary hazard engaged with the
venture choice.
3. IRREVERSIBLE NATURE:
The Capital consumption choices are of irreversible nature. Once, the choice for getting a lasting
resource is taken, it turns out to be hard to discard.

OBJECTIVES OF THE STUDY:

 To portray the association profile of HYUNDAI PVT.

 To talk about the significance of the board of capital planning.
 Determination of proposition and ventures inflows and our pursues.
 To assessing the venture recommendations by utilizing capital planning methods.
 To outline and recommend for the better venture recommendations.

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 IRJMST Vol 10 Issue 9 [Year 2019] ISSN 2250 – 1959 (0nline) 2348 – 9367 (Print)

LIMITATIONS of Capital Budgeting:

 As the data is very private, the data given by the administration is constrained. Thus a
portion of the ends depend on suspicions that are taken under the direction group of
HYUNDAI PVT.LTD
 For assessment of the undertaking I have pursued the rules given by the Project
Appraisal Division of the Planning, which are referenced here after.
 Time taken for this investigation is a month and a half, which is observed to be less,
as Capital Budgeting is a tremendous theme.
 Tool and Techniques of Capital Budgeting are executed uniquely under the
Construction phase of HYUNDAI MOTORS PVT Ltd.
Process of Capital Budgeting:

IDENTIFICATION OF INVESTMENT:
The capital planning procedure starts with the ID of speculation proposition.
The proposition or thought potential venture openings may start from the highest point of the
executives or from any officials of the association. Capital uses arranging council on account of
enormous association or the officials worried about the procedure of long haul speculation choice.

SCREENING THE PROPOSAL:

The uses arranging board of trustees screens the different proposition got from various
offices. The advisory group see these recommendations from different points to guarantee that these
are as per the corporate methodologies or choice rule of the firm and furthermore don't prompt the
office awkward nature.

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 IRJMST Vol 10 Issue 9 [Year 2019] ISSN 2250 – 1959 (0nline) 2348 – 9367 (Print)

EVALUATION OF VARIOUS PROPOSALS:

The following stage in the capital planning procedure is to assess the gainfulness of different
recommendations. Net present worth strategy, inward rate of return, and so on. It ought to be named
beneath. Free recommendations. Unexpected or subordinate recommendations and Mutually select
proposition.

FIXING PRIORITIES:
Subsequent to assessing different recommendations, the unrewarding proposition might be
dismissed straight away. In any case, it may not be feasible for the firm to put promptly in the all the
adequate proposition because of confinement of assets.
FINAL APPROVAL & PREPARATION OF CAPITAL EXPENDITURE BUDGET:

Recommendations meeting the assessment and other criteria are at long last endorsed to be
incorporated into the capital consumption spending plan. The capital uses a financial limit sets down
the measure of the estimation uses to be brought about on fixed resources during the spending time
frame.
Company Profile:
The Company is an approved Dealer of Hyundai Motor India Pvt Ltd (HMIL) Motors IndLimited
(HMIL) accepted to purchase large type of vehicles. It also accepted to support and fix of all
Hyundai Motor India Pvt Ltd (HMIL) vehicles and furthermore bargains in extra pieces of Hyundai
Motor India Pvt Ltd (HMIL) autos.
Lakshmi Hyundai Motor India Pvt Ltd (HMIL) was started it’s operations in the year 1998 at
Himayathnagar with the help of Hyundai Motor India Pvt Ltd (HMIL) 's Inaugural vehicle in India,
the most popular Santro car. The entire business operations is overseen under the supervision of the
dynamic Director Sri K.Ram Mohana Rao.
After starting a branch in Himayat nagar, It has also started it’s showrooms in Banjara hills,
Kukatpally and L.B nagar came up the 'condition of-craftsmanship administration offices at
Kukatpally, Banjarahills and L.B.Nagar. These are established with a view to serve all the required
customers. This is based on the research conducted by the organizational professionals like
conducting surveys, geographical research etc. In order to achieve high excellence in the business
growth administration officers conduct a lot of research to make sure the objectives of the
organization are met.
Grants:
The honors got for " Best in deals " in south district, "Best in account ", "Top entertainer " in 2005
and their specialists being granted with a Gold Medal for standing No.1 on the planet at World
aptitude Olympics held at Korea-stand declaration to the acknowledgment that got at the
international level.
As per the past view, the customer who is entering into the Hyundai Motor India Pvt Ltd (HMIL)
feel like he is getting an advantage. His/her requirements are observed in the Initial stage and the
customer is informed about all these like, specification of products, recently added features,
highlights of the mode, etc., sufficient time is given the user to think about all the need he/she
required.

FINDINGS:

 The measure of all out interest in resources as expanded altogether from 1,27,090 cr to
Rs.2,35,458 cr.
 The measure of offers has expanded from 3897.98 Cr to 5710.82Cr (2015-2016) this
expanded deals helped the association to improve its business turn over in various areas
 In perspective on the over the (complete resources turnover proportion of HYUNDAI
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 IRJMST Vol 10 Issue 9 [Year 2019] ISSN 2250 – 1959 (0nline) 2348 – 9367 (Print)

MOTORS recorded steady change running 0.26 (2011-2012) the most minimal proportion
recorded as 0.06 (2015-2016).
 The measure of interest in fixed resources has expanded structure Rs.1719.82Cr to
Rs.2729.15Cr. In this manner in a time of 5 years fixed resources have expanded by mid
36.67 %.
 The fixed resources turnover proportion has appearing fluctuating flow and increased from
1.04 occasions to - 0.69 occasions (2015-2016). This variance any be because of fixed
resources venture.
 During a similar period benefit before expense has diminished from Rs.404.47 to Rs.- 377.19
Cr.
 The proportion of fixed resources for long haul borrowings has not been appearing
predictable pattern. It has fluctuated from - 0.58 occasions to 0.83 (2014-2015).
 The introductory proportion's of the speculation are diminished from 127090 Cr to - 235458
cr(2015-2016) continually expanded time of 5 years.

SUGGESTIONS:

As huge whole of cash is included which impacts the productivity of the firm making capital
budgeting an significant undertaking.
 Long term venture once decided can not be revoked, because they involve huge amount of
investment, in case if the decision is revoked then the company may suffer significant losses.
It will impact the performance of the company and in turn leads to loss of customers.
 Identify new financial instruments which are less risky but can generate more returns.
Investments are always risky, So it’s all depends on the individual investor who wants to take
less risk or more risk and the portfolio is constructed accordingly. When the risk is more the
estimated returns are also high.
 The ramifications of long haul speculation choices are more broad than those of short run
choices as a result of time factor included, capital planning choices are liable to the higher
level of hazard and vulnerability than short run choice.
CONCLUSION:

 The planning exercise in HYUNDAI MOTORS likewise covers the long haul capital
spending plans, including yearly arranging and gives long haul plan to use of inward assets
and obligation adjusting made an interpretation of in to the corporate arrangement.
 The extent of capital planning likewise incorporates consumption on plant advancement, and
remodel, adjusting hardware, capital increases and authorizing costs on preliminary runs
creating units.
 To set up a nearby connection between physical advancement and monitory cost and to give
the premise to design allotment and budgetary help by the administration.
 The manual prescribes the calculation of NPV at an expense of capital/rebate rate determined
now and again.
 A single rebate rate ought not be utilized for all the limit planning ventures.
 The investigation of pertinent certainties and measurements of foreseen results and
advantages, chance variables assuming any, must be plainly brought out.
 Inducting at any rate three non - official executives the component of the Search Committee
ought to rebuild the Boards of these PSUs.
Source of Research:
Books:
 Financial Management – Prasanna Chandra

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