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project report on dhanhar exim by sunny gandhi and sunil ambolikar

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  • 1. 1 A Report On Summer Training at “Dhanhar Exim Pvt Ltd” From: 29th April, 2009 to 15th June,2009 In The Partial Fulfillment Of BBA Program. Submitted By: 36-Sani Gandhi 7- Sunil Ambolikar S.Y. BBA DIV – I Submitted To : BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT Academic Year-2012-13 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 2. 2 Declaration We hereby declare that the project report Entitled A Study on “Dhanhar Exim Pvt Ltd.” is result of our own training work carried out during AprilJune 2013 and has not been previously submitted to any other university or institution for any other examination and for any other purpose by any other person. We will not use this project report in future to use a submission to any other university or institution or any publisher without written permission of our guide. We also promise not to allow any other person to Copy or publish any part of this report in any form. If We are found/caught as defaulter of above declaration, I Know that my present or future submission may become in valid and college has the right to this thesis. Name of Student Sani B Gandhi Sunil R Ambolikar Date Place BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 3. 3 ACKNOWLEDGEMENT We would like to thanks to Veer Narmad South Gujarat University to include this summer training in the curricular of B.B.A. program that made us gain the practical knowledge in the corporate business world. We are honored to Mr.Jayesh Desai, the director of B.R.C.M. college of Business administration and our all faculty members who always offered us useful suggestions on the project. On the completion of our project, we would like to express my sincere thanks to all those who have guided, advised & supported us during my project work at Dhanhar Exim Pvt ltd. We take this opportunity to depict our sincere and hearty indebtedness to the management of Dhanhar Exim Pvt Ltd. for giving us an opportunity to serve in esteem organization. We thankful to Mr. Hitesh Vankawala & Mr. Sandip Vankawala(Head of Marketing Department and Finance department), Mr. Jignesh Vankawala and Mr. Nilesh Vankawala (Head of production and quality control department), Mr. Dhansukh Vankawala & mr. Jagdish Vankawala(Head of HR Department) for giving us the precious opportunity to work at Dhanhar Exim Pvt ltd. And for our project guide. They gave us the detailed information about their system and spend their valuable time for us. At last, we thank all our friends and members of Dhanhar Exim Pvt Ltd for their co-operation and passion and encouraged us to carry out the project and try our best. Your Sincerely Sani B. Gandhi Sunil R. Ambolikar Date Place BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 4. 4 No. Chapter Page No. 1 Introduction 08 2 Marketing & Sales functions 15 3 Production Management 49 4 Finance & Accounts 78 5 Human Resource Management 101 6 Experience and Conclusions 140 7 Bibliography 141 8 Annexure 142 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 5. 5 CHAPTER 1: INTRODUCTION 1) Industry Details 2) Company Details 3) History of organization 4) Location of offices, branches and factories 5) Detail of promoters & owners 6) Performance highlight of Dhanhar Exim Pvt ltd 7) Organization structure of the company 8) Future plans of organization CHAPTER 2: MARKETING & SALES FUNCTION 1) Detailed organization structure of marketing department 2) Types and classification of products & their sales volume 3) Details of competitors 4) Unique feature of various products of company 5) Customer segmentation & targets markets 6) Distribution net-work 7) Sales procedure 8) Study of how customer orders are processed 9) Documents related with sales 10) Comparison of 4Ps of various products of organization With competitors 11) Study of generic level competition 12) Pricing polices 13) Promotional and advertising polices 14) Taxes applicable on sale activity 15) Study of control system & reporting system designed for Sales employees working in field 16) Different reports generated in Marketing Management BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 6. 6 CHAPTER 3: PRODUCTION MANAGEMENT 1) Detailed organization structure of production department 2) How production plan is prepared from sales plan 3) How production plan is converted in material requirement Plan & ultimately in purchase plan 4) Analysis of plant location considering various factors 5) Plant lay-out of entire factory showing positions of various departments buildings 6) Internal plant lay-out of main production departments 7) Types & classes of material handling equipments 8) Inventory control system 9) Inventory valuation method 10) study of material codification system 11) Different records kept in store 12) Material receipt procedure 13) Material issue procedure 14) Documents related with material issue & receipt 15) Purchase procedure 16) Documents of purchasing 17) Maintenance planning system 18) Records related to production operations at different Machines & with different department 19) Quality control system 20) Quality control guidelines of raw materials & finished Products 21) In process quality control guidelines 22) Documents related to quality control 23) Different reports generated in production department BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 7. 7 CHAPTER 4: FINANCIAL MANAGEMENT & ACCOUNTS 1. Revenue budgeting 2. Capital budgeting 3. Costing method 4. Cost structure 5. Costing sheets & classification of costs in different Categories 6. Working capital management 7. Preparation & analysis of funds flow statement 8. Internal audit polices financial control system 9. Accounting polices 10. Methods to calculate depreciation 11. P&L account & balance sheet by ratio analysis, Common sized statement CHAPTER 5: HUMAN RESOURCE MANAGEMENT 1) Study of organization structure to decide what type of Organization structure is designed for company 2) Study of basis departmentation in each department 3) Human Resource planning process 4) Recruitment 5) Selection process 6) Documents related to recruitment & selection 7) Sources of recruitment 8) Job description & job specification for various positions 9) Performance appraisal process and documents 10) Promotion, demotion & increment policy 11) Different welfare activities 12) Employment records kept 13) Training & development 14) Induction training 15) How training needs are identified for existing employees? 16) Lab our relation & activities of trade union 17) Wage & salary administration &Incentive & motivation system BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 8. 8 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 9. 9 Industry details History of Masala industry  From time immemorial, India has been considered as the “spice bowl of the world”. The history of Indian spices is almost as old as the “human civilization of spices”  We all have read in school history books that voyagers from around the world have travelled to India in search for the spices. But the history of our spices more than what is recorded, more than 7000 years old. Even before Greece and Rome were discovered, the sea voyagers were sailing with Indian spices, perfumes and textiles to their homelands.  Ancient cultures and dynasties were spending major portion of their treasury on Indian spices, silks, brocades, Dhaka Muslin and cloth of gold, etc. It is believed that the Parthian wars were being fought by Rome largely to keep open the trade route to India.  Vasco Da Gama set sail southwards with four ships from Port of Lisbon in Portugal at the start of 14th century. His aim was to search for a new route to India and rest of Asia. The journey that lasted 2 long years, took Da Gama and his crew on 39000 kilometers round trip, around the continent of Africa to India and then back to Lisbon. Only 2 out of the 4 ships made it back home, but they brought a cargo of spices and other products worth 60 times the cost of the said voyage.  It is also said that Indian spices and her renowned products were the main temptations for crusades and expeditions to the East. The cost of the spices today is menial, but this was not always the story. Indian spices were once a royal luxury and that men were willing to risk their lives in quest of them. Though it were the Dark Ages, but there were rich people who had gold to exchange for pepper and cinnamon.  The spices of the East were valuable in those times, during these Middle Ages, a pound of ginger was worth a sheep, a pound of mace worth three sheep or half a cow. Pepper, the most valuable spice of all, was counted out in individual peppercorns, and a sack of pepper was said to be worth a man`s life.  By the year 1000 A.D. Arabians had conquered the Indus valley, what is now India. They brought the cumin and coriander that mixed with Indian pepper, ginger and turmeric make up the base of so many South Asian dishes. In India, Arabian traders got the rare and exotic spices of the Far East from local spice merchants. India had spent the previous BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 10. 10 two millennia spreading its culture to the Spice Islands of the east. Such was the importance of spices those days.  Broadly, there are two main subdivisions of spices one being the major spices and the other is minor spices. For example the spices like pepper, cardamom, ginger, turmeric, chilies etc., comes under major category. The important minor spices grown in India are ajwain, aniseed, caraway, celery, coriander, cumin, dill seed, fennel, fenugreek, garlic, onion, saffron, vanilla etc. Company details  DHANHAR MASALA BHANDAR Pvt. Ltd. introduces itself as a leading manufacturer and exporter of Indian particularly Masala‟s, Hing‟s and others. Established on 1966, the company has always followed the philosophy of providing quality products and services to our ever increasing clientele. Today DHANHAR has become a name synonymous to Indian spices, its tastes and aroma; and has become a name of repute in spices and hing industry.  The name “DHANAHAR” itself connotes “MASALA”  DHANHAR MASALA starting in the home place and its first product is “hing”. Meaning of the Dhanhar name: DHAN means “LAXMI” HAR means “MAHADEV”  DHANHAR name comes of the two dynamic people, first is DHANSUKHLAL and second is HARKISHANLAL.  DHAN comes of the DHANSUKHLAL &  HAR comes of the HARKISHNLAL History of the organization – an Overview  Thirty Eight year back, two dynamic entrepreneurs, Mr. Dhansukh Chhabildas Vankawala and Mr. Jagdishchandra Harkishandas Vankawala; pioneers in spices / hing industry and connoisseurs of Indian tastes, joined hands together to start Dhanhar Masala; supported by Mr. Bipinchand Chhabildas Vankawala; a mechanical engineer by BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 11. 11 profession. The firm started as a gruh udyog, manufacturing hing, graduated in terms of size and volume; obviously due to healthy response from the market. In the 1972, a manufacturing plant was established in Surat. The company started manufacturing spices in 1976 with a single product “Dal Shak Masala” and has consistently climbed up the growth ladder since. The company at present is manufacturing more than 30 different spices. For bulk orders, we can customize the products according to your requirements.  In 1990, a major milestone was achieved when the company got “AGMARK” certification for its Hing. In 1995, same certification was accorded to Spices. When Company started, it goes in the loss, but after some time loss converted in the big and big profit. In the 1977 the price of the “Dal Shak” masala was just 7 RS. In 5 Kilo. So, it‟s very chipper. In the 1988 Hing‟s packaging stared and published name of the “BHANDHANI HING” and also developed the brand name of Dhanhar Masala. All the production by manually, no machine work of this time. On this time means, 1988; the staff was just 10 people in Dhanhar Masala and now the staff is about 62 people in Dhanhar Masala. Manually work‟s time period is 1988 to 1996, means about 8 year. Location of its office, branch and factories Location of manufacturing unit 167,Ashwinikumar road, Nr, shamshan bhumi ,Fulpada, Surat, Gujarat, India Location of its administrative office 5/354 Dhanhar house, Bhajiwadi pole, Bhagal char rasta, Bhagal, Surat – 395003 Gujarat, India. Details of promoters and owners:  Under the able guidance of the promoters, the company has reached to a position, par excellence. Mr. Hitesh Vankawala (B.Com. L.L.B.) And Mr. Jignesh Vankawala (B.Com), able sons of Mr. Dhansukhbhai joined business in 1992 and 1998 respectively. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 12. 12 Also the able sons of Mr. Jagdishchandra, Mr. Sandip Vankawala (B.Com.) joined the company in 1992 and 1998 respectively. Mr. Hitesh and Mr. Sandip are looking after Sales Department whereas Mr. Jignesh and Mr. Nilesh are looking after Production and Quality Control Departments.  The new entrants are following their fathers‟ footsteps and have the enough dynamism and acumen to lead the company to new heights.  The company boasts of modern machinery and high technology to attain the quality without losing the traditional aroma of Indian spices. Our products are well known for their high purity.  The reliability, flexibility, competitive pricing and prompt service have been the pillars of the company‟s reputation and success. Performance highlight of Dhanhar Exim Pvt ltd:  Company has more success in Masala industries and has won many awards in this field.  The awards are listed as following Name of the award Year of winning 1. UDHYOG 2000 2. VYAPAR 2002 3. UDHYOG 2003 4. MERA BRAND 2004 5. GRAHAK SURAKSHA SAMITI CERTIFICATE  The company has created the image of a good supplier of Masala in south Gujarat market.  Dhanhar Masala is also known for its “chip rate and best quality. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 13. 13 Organizational structure of Dhanhar Dhanhar Exim Pvt Ltd. General manager Head of marketing department Head of production department Head of finance department Head of human resourcces department Mr. Jignesh Mr. Hitesh Mr. Hitesh Mr.Sandip production manager Agent Accountant assistant Assistant clerk cashier peon workers Peon clerk BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 14. 14 Organizational profile of Dhanhar Exim Pvt ltd Year of establishment 1964 Legal status of the firm Private Ltd. Registered under Indian companies act 1956 Income tax registration no. AADCD2614D Central sales tax no. 24720601590C Value added tax registration no. 24220601590V Import Export code 5210003132 Nature of Business Manufacturer, exporter, and wholesaler Major markets Indian subcontinent Turnover of finished goods 4 times/ year Future plans of the Dhanhar Exim Pvt ltd.  To establish a strong market place in the whole Gujarat market. To make reputation in market.  They are thinking to expand product line of flour which is including water chestnut flour and now thinking to make a flour for locha and khaman flour.  They are planning for installing new machines for packaging which will help them in cheaper packaging and faster.  They are about to make more Masala for example bikaneri papad Masala, chicken gravy Masala, Mamada Masala(non vegetarian category) BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 15. 15 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 16. 16 1. Organization Structure of marketing department Marketing Department Mr. Hitesh (Head 1) Mr. Sandeep (Head 2) Agent clerk peon o Here at Dhanhar marketing department is being managed by two heads Mr. Hitesh and Mr. sandeep respectively o Agent and sales person works under two heads o Clerk is at 3rd level in the hierarchy o Peon is working under the head of a clerk. 2. Types and classification of Products of Dhanhar o There are many Masala product of DHANHAR MASALA industry. o Here at Dhanhar they have mainly Three product line Which are below here: 1. Spices 2. Flour 3. Chick peaces o All the product categories are shown in the following table. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 17. 17 Products A. Spices Basic spices Value added spices 1. Asafetida Powder 2. Punjabi Gravy Masala 3. Kashmiri Chilli Powder 4. Pomegranate Powder 5. Black Pepper Powder 6. Rajwadi Garam Masala 7. White Pepper Powder 8. Biryani Pulav Masala 9. Coriander Powder 10. Sandwich Masala 11. Chili Powder 12. Tandoori Chicken Masala 13. Chiwada Masala 14. Tea Masala 15. Dry Ginger Powder 16. Chicken Masala 17. Dry Mango Powder 18. Undhiyu Masala 19. Red Chili Powder 20. Vada Pav Masala 21. Turmeric Powder 22. Pickle Masala 23. Ginger Powder 24. Patra Masala 25. Jeera Powder 26. Kesar Milk Masala 27. Hing Powder 28. Jaljira Powder 29. Kashmiri Chilli Masala 30. Kasuri Methi 31. Kitchen King Masala Value added spices 32. Chhole Chana Masala 33. Meat Masala 34. Dabeli Masala 35. Mutton Masala 36. Garam Masala Powder 37. Nimbu Soda Masala 38. Egg Curry Masala 39. Panipuri Masala 40. Fish Masala 41. Pav Bhaji Masala 42. Butter Milk Masala 43. Fruit Chaat Masala B. Water Chestnut flour C. Chick peas D. Mahendi Powders  Here company do not have sales volume for individual products BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 18. 18 3. Details of Major competitors of Dhanhar Exim Pvt ltd: 1. Ramdev Masala  India, the Queen of Spices, has always attracted the world with her exotic masalas. In fact, the connection goes back many centuries. Ramdev has preserved the Indian values in all its products ever since it started as a small unit in 1965, in Ahmadabad, India. A small step became a giant leap in no time. But there was a binding force, a commitment that helped Ramdev keep its promise of purity and freshness in its products for all these years. Ramdev‟s immense belief in the philosophy of „reaching a customer‟s heart through quality‟ has enabled it to spread the rich Indian heritage to millions of homes all over the globe. 2. M.D.H Masala  Mahashian Di Hatti Limited is an Indian manufacturer, distributor and exporter of ground spices and spice mixtures under the brand name MDH. It specializes in several unique traditional blends of spices suitable for different recipes. The company was founded in BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 19. 19 1919 by Mahashay Chuni Lal as a small shop in Sialkot. It has since grown in popularity all over India, and exports its products to several countries. It is associated with Mahashay Chuni Lal Charitable Trust. The MDH brand name is very well known throughout India 3. Everest Masala  Everest Spices is an Indian manufacturer, distributor and exporter of ground spices and spice mixtures under the brand name Everest. It is India‟s largest spices brand based in Mumbai. More than 20 million households use Everest spices regularly. The brand is stocked by 400,000 outlets in more than 1000 towns across India. Everest is a major exporter to the US, the Middle East, Singapore, Australia, New Zealand, East Africa and other countries. More than 3.705 billion packs of Everest sold each year. There more than 42 blends under the Everest brand name. 4. Catch Masala  Catch Spices is India‟s foremost spices brand known for its matchless product quality and innovative approach. Catch spices are ground using the unique state-of-the-art Low Temperature Grinding (LTG) technology, which prevents the evaporation of volatile & BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 20. 20 delicate oils from spices. Catch Spices thus retain the original aroma and wholesome flavor of authentic spices. The complete assortment comprises of a variety of salt and pepper sprinklers and a diverse range of whole, ground and blended spices. Catch Spices are packed in food grade metal-lined cartons, flexible laminates and convenient composite cans available in a variety of pack sizes 5. S.k. Masala  Founder Mrs. Kulusumben K. Panjwani has started the business 45 years ago in Surat city, Gujarat. Her elder son Mr. S. K. Panjwani having very good tasting skills has shouldered her responsibility on product development & came up with best blends. Few famous spices from the house of S.K. Masala are " Kashmiri Chilli powder “, " Garam Masala " , " Chicken Masala " , " Milk Masala " & " Pav Bhaji Masala ".Younger son Mr. B. K. Panjwani who is a Chairman of Retail Trade in Chamber of Commerce in South Gujarat from last 7 years & Member of Productivity Council of India got into retailing & expanded the business across Gujarat & Saurastra .Third generation is also emerging as back born of S. K. Masala. They have started atomization process at plant & expanded the business internationally in markets like UK & SA. 6. Nilon’s Masala BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 21. 21  Nilon‟s Enterprises Private Limited was founded way back in 1962 by Shri Suresh B. Sanghavi as a cottage industry. From a humble beginning, Nilon‟s has today become the largest producer of Pickles, Tooty-Fruity and Roasted Vermicelli in India. Managed by a professional and dynamic team, Nilon‟s is now among the fastest growing processed food company in India. 7. Badshah Masala  In the span of 4 decades, Jhaveri Industries has garnered international acceptance and its own brand equity in the world spice arena. Under its brand name Badshah, Jhaveri Industries has been formulating new flavours and aromas through its innovative research techniques.  Today, Badshah is synonymous with aromatic fervor and genuine quality. Winner of many prestigious awards, including the "Mera Brand Award", Badshah is the first choice of households across the Indian subcontinent and is fast emerging as a global player. With a third of our sales accounting in exports, Badshah has carved a niche of its own in the international spice market.  The manufacturing unit located at Umergaon, Gujarat has been mandibly supported by our administration office in Mumbai. Our unique research methodology helps us understand the latest food and spice preferences, keeping in mind the geographical location, religion and traditional cuisines of any particular region. 8. Gajanand Masala BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 22. 22  Gajanand Foods Pvt. Ltd., Ahmedabad, was founded and established by Shree Natvarbhai K. Patel, in the year 1982, with a small unit. At present our company has grown almost five times than we started with, that is only due to our quality, proper customer care and our efforts to reach the smallest customer in our city Ahmedabad, our State Gujarat, our Country India and now in across the globe! Our aim to reach millions of kitchen can be achieved through customer's love, trust and proper feedback for our products.  Taking forward the vision of their father, Mr. Jayesh Patel and Mr. Samir Patel have implemented new ideas and expanded the product range by introducing more and more innovative products. With the uncompromised motto of customer satisfaction, the company has defined its business ethics and has crafted its quality policies. This has eventually made the company a front-runner and a reliable source of quality in the national as well as global market. 9. Other : Gondal Masala, Vijay Masala, Suhana spices and other local Masala makers. 4. Unique feature of various products 1. Water Chestnut Flour  Dhanhar is the one of the most celebrated Water Chestnut Flour (Singoda Atta & Rajgara Atta) Manufacturers and Suppliers from Gujarat. Their Water Chestnut Flour is widely used to prepare different Indian dishes. The hygienic processing and tamper-proof packing of their Water Chestnut Flour has made it ultimate hit among our clients. The wide demand of their Water Chestnut Flour testifies our claims of being the prime Water Chestnut Flour manufacturers and suppliers from Surat, Gujarat. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 23. 23 Special feature  Made from natural ingredients  Made as per traditional standards which offer premium taste  Offers prefect flavor  Amazing aroma  Freshness assurance 2. Mahendi Powder o Mehendi Powder, manufactured by Dhanhar, is of the best quality that is used for hand decoration, for hair coloring and in various ceremonies. their Mehendi Powder is of the finest quality and has also gained appreciation in other countries. We manufacture pure Mehendi Powder without chemical and it is instantly used for hair coloring and conditioning. Uses  For body & hand decoration  For hair color &conditioning  For hand & body design use Special Features  100% pure form contains no herbs or chemical  Can be used for hair conditioning & hair color  Perfect choice for marriage and other festive occasion  Colour will last for several days 3. Chickpeas o The company is chiefly engaged in the manufacturing and supplying of Chickpeas all across the country. The Chickpeas, provided by them, are known for their excellent taste and high quality. Cleaned and processed by using the latest techniques, Dhanhar Chickpeas are highly demanded amidst the widespread clients. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 24. 24 Special features  Perfect flavor  Amazing aroma  Freshness assurance  Properly cleaned 4. All other spices o The company is a prime Spices Manufacturer and Supplier in India and Spices are provided in a wide variety, which is processed by using the premium ingredients. The assortment of Spices comprises of Asafetida Powder, Biryani Pulav Masala, Butter Milk Masala, Chhole Chana Masala, Chicken Masala, Chili Powder, Chiwada Masala, Coriander Powder, Dabeli Masala, Dry Ginger Powder, Dry Mango Powder, Egg Curry Masala and other 31 spices. Special features  available in many packaging like 50gm, 100gm, 200gm,500gm, 1 kg, Bulk Packing starting from 5 rupees.  Freshness is being assurance and properly cleaned.  Made from natural ingredients  Tamper proof packing  Hygienic processing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 25. 25 All other spices are being presented in the following with their special features Asafetida Biryani pulav Masala Special features Special features  Good taste  Unmatched Taste  Hygienic processing  100% natural ingredients  Tamperproof packaging  Hygienic processing  Pure natural ingredients  Tamper proof packagings  Good scent Butter milk Masala Praised For  Give health benefits  Appetizing taste  Made from safe and natural products  Tamper proof packing Chiwda Masala Benefits Fish Masala Acknowledged For Praised For :    Add flavor to food  Helps in digestion  Natural relief from gas  Stomach upset problem  Lower the cholesterol  Different sizes level  Tamper proof packing standards which offer  Hygienic processing premium taste Widely used in preparation of chivda Chili powder ingredients  Made as per traditional  Coriander powder Special features  Made from natural Made from handpicked Praised For Offers prefect flavor  Amazing aroma  Freshness assurance Fruit chaat Masala excellent quality chilies  Hygienically processed  Perfectly grinded  Matchless freshness  Made from natural Special feature ingredients Made as per traditional  Mouth watering taste standards which offer   Made from natural  Special feature ingredients premium taste Dry mango powder Offers prefect flavor   Amazing aroma Tamperproof packing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 26. 26  Freshness assurance  Completely fresh o slightly sour and tangy taste being used as an Garam Masala acid flavoring agent not loosing color and flavor for longtime bring used Ginger Masala Acknowledged For : Known For o for cooking and medical purposes Made as per the traditional art of spices  o o rich source of vitamin a,e and selenium protect Long shelf life o Safe and nutritious o Completely natural sponge puddings to give a ingredients warm sweet flavor against heart disease and other ailments high in iron high in cooking   Kashmiri chilly Masala carbohydrates helpful in Features decreasing acidity and   Have an Aromatic odor  Used in tandoori and other barbecue marinades Adds flavor to food  Long shelf life  Known For Essential ingredient in  Good soothing agent  Used in pickles Benefits  Ginger may also decrease joint pain from arthritis  Prevent against diarrhea  Prevent against nausea Folk remedy for cough and cold  Lower cholesterol Used in preparing ayurvedic medicines  Rich source of vitamin E Kesari milk Masala Rich source of vitamin A  Considered as stimulant your tea Prevent from rheumatic disorders  Medicinal Uses Add ginger powder to  Benefits  all mixed spices  Free from additive Taste enhancer Prepare a delightful with seasonal fruits Natural and fresh  Jeera powder   poor digestion. Add to cake, biscuits and ginger punch blending it antioxidant low in  Use the ginger powder in Special feature BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 27. 27  As Carminative  Stomach astringent  Hing Masala Useful in diarrhea and  Mainly used in  Hygienic processing  Tamper proof packaging ingredients in its 100% natural ingredients  natural products used as Unmatched Taste veterinary medicines preparation tamper proof packing  Meat Masala for skin. Kitchen king Masala made from natural ingredients made as per Nimbu soda Masala traditional standards Acknowledged For : premium taste offers prefect flavor amazing aroma freshness assurance  Unmatched taste  Praised For : completely fresh perfectly grinded Made from natural and rare herbs Made from natural Pomegranate Powder ingredients Made as per traditional standards which offer premium taste  Offers prefect flavor  Amazing aroma  Freshness assurance mesmerizing taste made from 100% natural spices health problems    Eases stomach related Mutton Masala  Special features Many medicinal qualities   Act as a coolant helps in improving appetite good Specialties  giving health benefits appetizing taste safe and Special feature dyspepsia problems   Benefits Pani puri Masala Appreciated For :  Mouth watering taste  Made from natural ingredients  High in vitamin C  High in potassium  Tamperproof packing  Good source of the B  Completely fresh vitamin  Contains pantothenic BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 28. 28 acid,potassium and Appreciated For :   Unmatched freshness  Tamper proof packing  Premium quality  Rich source of fiber and Reducing heart disease  Purity Assurance  Hygienic tamper proof packing risk factors   Perseverance of natural essence of turmeric Known For  Samnhar Masala Made from natural Made from complete natural ingredients pomegranate seeds Special features   Special features low in calories Mesmerizing taste  Turmeric powders antioxidant polyphones Rajwadi Masala Made as per traditional Tea Masala Acknowledged For : Made from natural standards which offer ingredients premium taste  Purity Assurance  Hygienic tamper proof Made as per traditional  Offers prefect flavor standards which offer  Amazing aroma premium taste   Freshness assurance  Amazing aroma  Freshness assurance  Offers prefect flavor  packing essence of turmeric White paper powder Vada pav Masala  Made from natural white pepper  Made from complete natural ingredients Known for  Appreciated For : Perseverance of natural Made as per traditional Undhiyu Masala Praised For :  Mouth watering taste standards which offer  Made from natural premium taste  Give health benefits ingredients  Offers perfect flavor  Appetizing taste  Tamperproof packing  Amazing aroma  Made from safe and  Completely fresh  Freshness assurance natural products  Tamper proof packing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 29. 29 5. Customer segmentation and target market Segments and respective target market 1. Vegetarian and non vegetarian food eaters  In this segment vegetarian and non vegetarian both segment are targeted.  For Non vegetarian , company needs fish Masala ,chicken Masala, Mutton Masala, Egg curry Masala, Meat Masala.  For Vegetarian they make near about 30 Masala which are Garam Masala ,kitchen king Masala, tea Masala,etc. Segment Target market Vegetarian Vegetarian Non vegetarian Non vegetarian 2. Segment based on income ( very poor, poor, average, higher middleclass and rich)  In this segment 3 segments are targeted which are poor , average, higher middleclass groups.  For poor and average customers they make small packages starting from 5 Rs onwards  For High Income middle class Groups they make Packages of big size and they also target high quality Basmati Rice Segment Target market  Very Poor  Poor Products offered  Poor Packages start from 5 to 10 Rs  Average  Average Packages of 50 grm,100 grm,200 gram, 500 gram and 1 kg  Higher Middle Class  Higher Middle All Masala Class  Rich BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 30. 30 3. Segment based on type of market a. Customer market ( direct customers) b. Industrial market ( hotels , restaurants, tea stoles. Food selling vendors)  Here Both segments are targeted  For customer market they target wholesalers, retailers, and Agents.  For Industrial Markets they target mainly Hotels, restaurants and food vendors because these customers are selling addible items which require large no. of Masala and company can gain a huge profit. 4. Segment based on habit of eating/ test and preferences in which spicy food eaters and people love to have Masala in drinks etc. 6. Channel of distribution for Dhanhar Meaning of Channels of distribution:  According to American Marketing Association, “A channel of distribution, or marketing channel, is the structure of intra – company organization units and extra – company agents and dealers, wholesale and retail through which a commodity, product or service is marketed.”  Marketing channel may be defined as, “A pathway composed of intermediaries, who perform such function as needed to ensure smooth flow of goods and services from the manufacturing ends to the consuming ends in order to achieve marketing of the produce of a company.” Channel of distribution in Dhanhar Masala  The producer and the final customer are part of every channel. We will use the number of intermediate levels to designate the length of channel. There are many type of distribution channel in industry. There are following: 1. Zero-level channel BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 31. 31 2. One level channel 3. Two level channel 4. Three level channel A. Three level of distribution channel (full distribution channel) Manufacturer (Dhanhar masala) CNF (Super Stockiest) Wholesaler/ Agent Retailer( small shops, departmental stores and hotels) Consumer  Dhanhar Masala Pvt. Ltd. Use three level of distribution channel in general cases where they sale from their outlet to the super stockiest which in turn sales products to the agents and agent sale it to the big and small wholesalers or retailers and it goes further to retailer and finally to the customers. B. Zero level of distribution channel (full distribution channel) Dhanhar masala's outlay at Bhagal customer purchasing directly BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 32. 32  Dhanhar Masala Pvt. Ltd. use to zero level channels in rare case here if known customer is asking for a small purchase then only they sale directly to the direct customer. C. One level of distribution channel (full distribution channel) retailer (small shops, departmental stores or some hotels) Dhanhar masala's outlay at Bhagal  customer purchasing directly Dhanhar Masala Pvt. Ltd. use to one level channels in case where the retailer or small shopkeeper or many department store in near around area or many hotels purchases Masala from Bhagal outlay and in turn retailers sale it to regular customers. D. Two level of distribution channel (full distribution channel)  In two level distribution channel company sales products to the super stockiest or wholesaler and they sale it to retailers like super store or departmental store and they sale it directly to the final customer.  This distribution channel can be shown as following. Manufacturer (Dhanhar) super stockiest (CNF) Retailer (small shops, departmental stores or some hotels) Final customer wholesaler Retailer (small shops, departmental stores or some hotels) Final customer BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 33. 33 7. Sales procedure & 8. study of how customers are processed  Sales procedure in Dhanhar Exim Pvt. Ltd. is a very systematic and easily processed. As soon as an inquiry by customer is received, whether through verbal, telephonic or written, or from the website and then the quotation with price and type of product is sent to the respected customer. If the customer will be satisfied, he will send reply for terms and condition and that time marketing manager or assistant of the company will go for finalization of the terms and conditions at the customer place and if customer satisfied will give order for product. Order given by the customer to the marketing manager will be issued to production planning department. After the delivery schedules, production planning done. It consists of Bill of Material and material requirement planning.  After preparing production planning, execution of production plan is done and when raw material is converted into finished good final quality checking is done and accepted products are dispatched to respective customers.  This process can be explained as following: inquiery from the customer (through verblely, written letters or telephonic or inquiry from website "Dhanharmasalas.com quatation including price and type of the product is sent to the customer order from the customer ( if customer is satisfied) Material requirnment planning and bill of material Production dispatch of order and sent to the customer BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 34. 34 9. Documents related with sales At Dhanhar Exim Pvt Ltd , Sales-related business transactions are recorded in the system as sales documents. There are as following  Sales queries: inquiries and quotations  Sales orders  Outline agreements, such as contracts and scheduling agreements  Customer problems and complaints, such as free of charge deliveries and credit memo requests  Cash memo 10.(a.) Composition of product, price, place and promotion for Dhanhar : Market mix At Dhanhar Product  Product ranging from spices( 41 item) for all people ( vegetarian , non vegetarian, spicy food eaters or people love to have some spice in their drinks like tea Masala or buttermilk Masala etc) and they make water chestnut flour and Basmati rice and chick peas in all available packaging.  Price So at Dhanhar they do have a good product mix.  Here Dhanhar set their price according to the competitors price so they follow the going rate pricing method but they use mark up pricing also for deciding the price for their product.  So here Dhanhar generally go with market price of other companies and they have the mark up for 50 to 70 % and hence they can satisfy intermediaries and customers both. Place  Here Dhanhar have good Distribution channel ranging from Zero, One, two and full levels of Distribution channel .  Here the company have a benefit that company can reach to every area of south Gujarat and middle Gujarat and hence BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 35. 35 company can get the benefit of a good and small and hence speedy distribution channel. Promotion  Company have promotion policy of giving a hand bag on the purchase of Rs.1000 and more and a travelling bag on the purchase of more than of Rs 2000.  Company do have an appropriate advertisement policy .  Here they will decide the advertisement budget according to overall budget prepared by finance department.  Here their budget is generally between 5, 00,000 to 8, 00,000 rupees.  They mainly give advertisement in Guajarati newspapers and on FM and they use Hoardings for advertisement purposes.  So we can say that company has an appropriate policy regarding promotion and advertisement. 10 (b.) Comparison of 4p’s of Dhanhar with competitors A. Product :  While comparing Dhanhar products with competitors , Dhanhar is quite ahead as Ramdev has 43 Masala varieties while Other competitors like Everest has 43 Masala and S.K and Gajanand and nilon etc company have products ranging from 30 to 40 products while Dhanhar has 47 Masala with lots of varieties targeting both Non vegetarian and vegetarian food eaters. B. Price:  On comparing pricing policy with competitors Dhanhar has always kept its price lower than competitors. For example 50 grm hing is available at Dhanhar in 18 rs and in 24 rs while other hing like Ramdev hing and others are available in 28 to 33 rs. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 36. 36 C. Place:  Dhanhar has all zero level, one level, two level and three level of channels. And on other side comparing to Ramdev, Everest and S.k Masala Dhanhar have poor distribution channel because Ramdev, everest, Catch Masala etc have distribution channel all over in India and generally these Masala are found in every general store or departmental store. So Dhanhar have all level of distribution channel but due to less number of distributors,other companies found to be superior than Dhanhar. D. Promotion:  As far as promotion or advertisement part is concerned Dhanhar do have an appropriate policy but Ramdev and everest have advertisements all over India and they do have good sales promotion schemes for intermediaries and customers and at local level S.K Masala and gajanand Masala also have good advertisements in newspapers and many hordings are found at many places but Dhanhar‟s target market is south Gujarat and they are able to attract the customers. 11. Study of generic level of competition  In the Masala industry in Gujarat region, mainly in south Gujarat, Dhanhar has to face a tough competition mainly with Ramdev Masala and Everest Masala and S.K Masala and Gajanand Masala also are good marketer in Masala industry but Dhanhar is able to survive in the competition due to following two reasons 1. providing natural products with very less usage of chemicals 2. Giving more commission to the intermediaries (minimum 20%)  So in this way Dhanhar is able to survive in tough Masala competition  While in Water chestnut flour market, Dhanhar has to face a little competition with small Atta maker flour mills who make Singoda flour on small scale basis.  Though in water chestnut flour competition Dhanhar is market leader due to following reasons 1. made from fresh singoda and no added chemicals 2. more commission to retailers BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 37. 37 3. 170 Rs per kilogram, and available in small packet of 100 gram also and hence cheaper also.  So it can be said that Dhanhar with good composition of marketing and products running their organization at a good pace. 12. Forecasting and sales plan preparation  Dhanhar systematically do forecasting and prepare sales plan on base of forecasting.  The sales forecast establishes the level of activity used in all the other forecasts and budgets for the business. If your sales forecast varies wildly from your actual results, your cash flow and profitability forecasts will similarly be inaccurate. Regularly updating forecasts ensures current market intelligence, buying signals from clients and the efforts behind the marketing strategy can be taken into account for the next forecast.  In Dhanhar Exim Pvt Ltd company use following sources to forecast to sale for future. 1. Sales Forecasting through Past sales method 2. Sales Forecasting through performance of Distributor 3. Sales Forecasting through Review the market Sales Forecasting through Past sales method  In this method Dhanhar Exim pvt Ltd use previous year sales for sale forecasting. Generally company takes last year sales as a base and adds some percentage to last year sales.  They here generally use trend percentage method for estimating future sales.  This can be seen as following……. Product Sales in Sales in Trend percentage Sales estimation 2011 2012 Garam Masala 300000 320000 106.6666667 341333.333 Tea Masala 150000 107000 71.33333333 76326.6667 Red chili powder 400000 470000 117.5 552250 water chestnut powder 700000 820000 117.1428571 960571.429 for 2013 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 38. 38 Sales Forecasting through Distributor  Company also use each Distributor‟s sales of last a year as a base for sales forecasting and give them target with adding some percentage in to sales, here they consider the average sales of past three year and add some percentage to average sales, and they accumulated sales of all Distributor. In that company accumulate sale of all distributor and give them target via adding some percentage in to accumulated sale or average sale of all distributor. This is only possible when company can forecast demand of each distributor.  Here if average performance is higher than last year sales then they give only 2% growth and if average performance is less than last year sales then they give 5% growth. Distributor’s Sales in Sales name 2010 in Sales in Average 2011 2012 Percentage Sales performance growth to estimation average for 2013 sales Distributor 1 8,92,000 10,00,875 11,00,000 9,97,625 5% 10,47,506 Distributor 2 4,00,000 2,30,000 1,70,000 2,66,667 2% 2,72,000 Distributor 3 5,00,000 4,00,000 4,70,000 4,66,667 5% 4,79,500 Distributor 4 5,60,000 7,00,000 8,20,000 6,93,333 5% 7,28,000 Sales Forecasting through Review the market  Through Review the market via industry experience and intelligence, company to know what is happening with the competition, and company can also look at their financial strength through Companies House filings. Are they growing or contracting? What are they doing with their pricing? Is this a sign of an aggressive sales strategy? What your competitors do will inevitably affect your sales. So that answering to these questions, it helps to sales forecasting. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 39. 39 13. Pricing policy  It is easy to decide the % of the profit, which are added to cost?  It is easy to set price according to the competition. So now we will see how Dhanhar Exim Pvt. Ltd. set their product price.  Price which the customers are required to pay for the goods. It should meet the expectation of customers and make customers satisfied which will ultimately increase the royalty towards the company.  Pricing is done by considering various factors such as pre-received value by customers, competitor‟s price, government policy, firm‟s objectives, etc.  Now we will see what pricing policy by Dhanhar Exim Pvt. Ltd its product considering various costs, which they have, incurred such as fixed cost, variable cost. Price = (fixed + variable+ overhead ) costs + % of profit  They will always keep a keen eye on the price of the raw material as almost 50% to 60% cost of product cost is covered by raw material cost.  They will also consider the price in the market. But here one should know that Dhanhar Exim Pvt. Ltd never compromised on the quality of product.  Here company have adopted going rate pricing where the Dhanhar Exim Pvt. Ltd charge the price on the bases on prices of Everest, Ramdev, M.D.H, and Gajanand Masala.  Here company follows going rate pricing but they also have some mark up on their cost for profit.  Here company does not set price by its competitors, here they set the mark up on the cost and then they decide the price.  For example if a Dhanhar water chestnut powder of 1kg packet has following cost structure then, Variable cost per unit= 45 rs, Fixed cost 42, 00,000 rs for all products Expected unit sales is 12, 00,000 units of all products aggregate sales BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 40. 40 Then unit cost= variable cost + (fixed cost/unit sales) =45 + (120, 00,000/16, 00,000) =61+ 7.5 =68.5 So here unit cost of water chestnut powder is 47.5 rs per 1kg And if company have mark up of 60% then Mark up price= unit cost/ (1-desired return on sales) = 68.5/ 0.40 =171 rs So according to mark up price, water chestnut powder can sale 1 kg packet at 170 rs. Pricelist of Dhanhar Exim Pvt Ltd Product RAJWADI GARAM MASALA weight 25 gm 50 gm 100 gm 200 gm 500 gm AGMARK HING 50 gm 17.50 100 gm 200 gm 500 gm 34.00 67.00 165.00 weight 15.g 50.g 100.g 200.g jar 500.g ar Price 5.00 22.00 40.00 75.00 155.00 50 gm 100 gm 200gm 500 gm 1kg 8 15 29 70 140 5.00 TEA 8.00 MASALA 15.00 29.00 70.00 15.g 50.g 100.gm 500 gm 500.g Jar 5 25 48 205 175.00 50.g 100.g 200.g 500.g 1.kg SUPER GARAM MASALA 12.00 PUN. 18.00 GREVI 34.00 MASALA 83.00 155.00 15.g 50.g 100.g 200.g 500.g 5.00 18.00 35.00 68.00 130.00 50.g 17.00 CHHOLE 15.g 5.00 15 gm 50 gm 100 gm 200 gm 500 gm NO.300 HING SUPER HING(DABBI) price 5.00 12.00 23.00 46.00 110.00 Product PAVBHAJI MASALA Special Garam Masala BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 41. 41 100.g DELUX HING (DABBI) 50.g 100.g 33.00 CHANA MASALA 35.00 65.00 KASHMIRI CHILLI POWDER 100.g 200.g 500.g 27.00 IDLE 50.00 SABHAR 120.00 MASALA CHILLI POWDER 50.g 100.g 200.g 500.g 1.kg 5.kg 5.kg 7.50 14.00 27.00 BIRIYANI 65.00 MASALA 125.00 525.00 600.00 RAJGARA LOT 50.g 100.g 200.g 500.g 1.kg 5.kg 7.50 14.00 27.00 65.00 KICKEN 125.00 KING 600.00 MASALA 50.g 100.g 200.g 500.g 1.kg 7.00 12.50 24.00 CHAT 57.00 MASALA 105.00 50.g 100.g 200.g 500.g 100.g 1.kg 8.00 15.00 28.00 PANIPURI 65.00 MASALA 20.00 190.00 FINE CLASSIC Turmeric powder Classic CORIANDER POWDER CORINDER CUMIN POWDER SHINGODA LOT ROCK SALT MILK MASALA TEA MASALA 40.g 100.g 20.g 50.g 100.g 50.g 2.00 5.00 JIRU POWDER 55.00 LILO MARKO HING 135.00 275.00 KALO MARKO HING 18.00 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT 50.g 100.g 200.g 500.g 18.00 35.00 68.00 130.00 15.g 50.g 100.g 200.g 500.g 5.00 18.00 35.00 68.00 130.00 15.g 50.g 100.g 5.00 17.00 33.00 100.g 200.g 500.g 16.00 32.00 80.00 15.g 50.g 100.g 200.g 500.g 5.00 17.00 33.00 65.00 135.00 15.g 50.g 100.g 200.g 500.g 5.00 13.00 24.00 45.00 110.00 15.g 50.g 100.g 200.g 500.g 5.00 13.00 24.00 45.00 110.00 1.kg 210.00 1.kg 370.00 1.kg 250.00
  • 42. 42 LAL MARKO HING 190.00 50.g 500.g 7.00 65.00 50.g 500.g 8.00 75.00 50.g 7.00 SP.G.MASALA 1.kg 175.00 SPECIAL GINGER POWDER 1.kg 1.kg CHEVDA MASALA SURTI MASALA 1 kg 210.00 200.g 500.g 29.00 70.00 200.g 500.g 34.00 80.00 105.00 LIMBU-SODA DELUX MASALA 500.g 140.00 SP.TEA MASALA 1.kg 214.00 CHHAS MASALA JINGER POWDER 1.kg 180.00 DALSHAKMASALA 250 g 70.00 MARI POWDER 500.g 204.00 FISH MASALA 50.g 100.g 200.gjar 500.gjar 100.g 200.g 500.g AACHAR MASALA 20.00 38.00 GUNDAKERI 74.00 MASALA 150.00 GOL-KERI 15.00 MASALA 29.00 70.00 14. Promotional and advertisement policies at Dhanhar Masala Meaning of promotion:  Promotion means a set of efforts made by the company for stimulating the demand for its product or products without making any alteration in product mix, price and channels of distribution. What is done for promotion?  Dhanhar Exim generally follows following promotional activity. o Customer purchasing Masala item above Rs 1000 to 1999, Dhanhar Masala gives one Shopping Beg having printed their name Dhanhar and address. o Customer purchasing Masala item above Rs 2000 up Dhanhar Masala gives one Traveling Beg, having printed their name Dhanhar and address. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 43. 43 o And special bags are given to regular customers at the time of Diwali. o Sometimes they carry the scheme on certain products like 20% extra on the packaging of 1 kg. Advertising policies  Here company does have an advertisement in newspapers but on the small scales.  Here they will first decide the communication and advertisement budget for the whole year and they will plan during which season they are going to give promote their product.  Here they will decide the advertisement budget according to overall budget prepared by finance department.  Here their budget is generally between 5, 00,000 to 8, 00,000 rupees.  They mainly give advertisement in Guajarati newspapers and on FM and they use Hoardings for advertisement purposes.  Advertisement photo in Gujarat Samachar newspaper is as following.  Here in advertisement they are mainly focusing on seasonal products for example in June and July they have advertisement regarding pickle Masala because it is the season of BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 44. 44 mango while in the month of august they have advertisement regarding Water chestnut flour as it is the month of many festivals.  Here they use various hoardings also which are given to distributors for the publicity purposes which can be shown as following.  Here for advertisement purposes they give advertisement in a magazine called yellow page which is a business magazine having details of suppliers, manufacturer and distributors.  Dhanhar is giving advertisement which can be seen as following.  Here dhanhar‟s Masala administrative and store department phone numbers can be seen.  Here this advertisement is given in Surat addition of Yellow pages magazine. 15. Taxes applicable on sales activity  In India, there are two types of taxes on sale of goods – one levied by the Central Government and the other levied by the State Governments. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 45. 45  What Dhanhar Exim has to pay is discussed as following. 1. Taxes applicable on sales activity within the Gujarat state (Intra-state Sale)  Sale or purchase of goods within a particular state is called Intra-state Sale. According to Gujarat Sales Tax Act (GST), 1969. Prescribed in the act, Dhanhar Exim Pvt Ltd charge 3% sales tax on their customer within Gujarat. According to Gujarat value added tax (GVAT), 2003 Dhanhar Exim Pvt Ltd charge extra 1% Vat Tax under section 7(1) is a charging section which is levied on sales of goods, listed in schedule II and schedule III after charging sales tax. 2. Tax on sales activity in inter-state Sale  A sale or purchase of goods between two states is called inter-state sale, is governed by the Central Sales Tax Act, 1956 (CST Act). According to Central Sales Tax Act (CST), 1956, prescribed in the act Dhanhar Exim Pvt Ltd charge 5% sales tax on their interstate customer on sale of goods. According to State VAT legislation Dhanhar Exim Pvt Ltd charge extra 2% Vat Tax after charging sales tax. So taxes applicable on sales activity can be viewed as following Sales Act Tax applicable Sales within Gujarat Sales Tax Act (GST) 3% + 1% according Vat Tax under Gujarat & Gujarat value added tax section 7(1) = total 4 % tax (GVAT) Sales outside Central Sales Tax Act (CST), 5% tax according CST + 2% additional Gujarat 1956 Tax = total 7%S 16. study of control system & reporting system for employees working in marketing department 1. Control regarding Dispatch of goods  The controlling system is very necessary for sales employees. At Dhanhar controlling system is very clear. No one can take the lot outside the factory before the signature of dispatching manager. Dispatching manager issues the bill for the goods which is send out BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 46. 46 of the factory. This bill would be collected by the security manager, and then they allowed any one to let the goods outside the factory. This system is also applicable for the purchased goods. No one can take the goods inside the factory, first security manager check the goods and then allowed to enter into the factory. 2. Control regarding target achievement for distributors  The controlling system regarding sales distributor is in terms of the sales target they have to achieve given by the marketing manager.  Company also use each Distributor‟s sales of last a year as a base for sales forecasting and give them target with adding some percentage in to sales, here they consider the average sales of past three year and add some percentage to average sales. Here if average performance is higher than last year sales then they give only 2% growth and if average performance is less than last year sales then they give 5% growth.  If a distributor is able to achieve his goal, he will be rewarded with extra % of sales commission mainly 2 %TO 3 % of his total sales.  If a distributor is failed to attain his goal for continuously for 3 times, he will be removed from their distribution channel. 17. Document Report generated in marketing department  The different reports generated in marketing department are as follows: 1. Customer feedback report 2. Customer complain report 3. Sales report 4. Profitability chart for various distributors 5. Conversion of samples into orders 6. Sample making time 7. Number of samples to be made to confirm an order BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 47. 47 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 48. 48 A. Structure of production department in Dhanhar Masala Mr.Jignesh (head 1) Production department production manager assistant workers Mr.Nilesh (head 2) o Here at Dhanhar production department is being managed by two heads Mr. Jignesh and Mr. Nilesh respectively. o Production manager works under two heads. o assistant is at 3rd level in the hierarchy o Workers are working under the head of a assistant. Meaning of Production:  “Production is the process of converting the raw material and for the other input the product for further production of the finished goods or services so that utility of input is created or enhanced and the need of customer are satisfied.” Example: - Consumer goods, Industrial goods, Services of transport, Medical treatment, Education, Insurance, Banking etc. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 49. 49 Definition of Management:  “Management means creating and maintaining an environment in which individual working together in group willingly contribute there best to achieve the predetermined goal and objective timely though the effective utilization of sources such as money, material, technology etc.” Production Management:  “Production Management means creating and maintaining environment in which individual working together in group willingly contribute their best to produce to satisfy the goods and services by optimum utilization of raw material and other input so as to timely satisfy the need of customers” B. How production plan is prepared from sales plan Sales plan prepared by Marketing Department and Sales order sequencing the activity ( important order or order having earlier delivery date are given prirority) deciding production planning quantity through checking quantity of current stock of finished goods , work in progress and expacted closing stock production plan quantity 1. First of all, Marketing Manager will forecast demand of customer and prepare sales plan according to their requirement or also estimate sales for future period on the BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 50. 50 basis of Market situation. Then marketing department gets sales order from customer. At Dhanhar Exim Pvt Ltd, one customer can order via online and direct communication through telephone or letter or personal talk. 2. Here in the second step marketing manager will send the demand data about each product of Dhanhar to the production department where they will sequence the activity of production where important products or products whose delivery date is earlier is given the priority by production department and upcoming season‟s product quantities are also managed, for eg in august month many Hindu festivals comes and many people have fast on such festivals and in fast people eat products made from water chestnut flour , so production department have to make water chestnut flour in the month of July so that it is available to marketing department in august. 3. In the third step they will do production planning so that they can have exact quantity. Here they will first check the current stock of finished product and if production is in progress then that quantity is also considered and they will subtract both current stock and WIP quantity from total marketing forecast and they will add expected closing stock at the end of planning period. Here Dhanhar considers the stock , they have to send to their selling outlet at Bhagal for sale in current period . So, production planning quantity = marketing sales forecast- current stockcurrent Work in progress (if any) + requirement of Finished product for sales in current period + expected closing stock Current period = July Planning period = August Production plan quantity for water chestnut flour for the month of August = Market forecast (2700 kg) - Current stock (715 kg) – current WIP (00) + current expected sales (280 kg) + closing stock Expected (600 kg) = 2865 kg So, Dhanhar have to make 2865 kg of Water chestnut flour in the month of August. 4. In such way production plan quantity for all products at Dhanhar. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 51. 51 C. How the production plan is converted in Material Requirement Plan & ultimately in purchase Plan production plan quantity Bill of Material for various products showing quantities of raw material Determining net quantity for Raw material through checking current stock of RM , pending order quantity, closing stock and safety stock of RM and current periods requirnment placing orders to the supplirs 1) First the production department gets an order from the buyers. After getting the confirm order production manager prepares production plan. They send this production plan to raw material and stock manager of the factory. 2) In the second step they will prepare Bill of Material for each product, BOM is the statement showing quantity of raw material and other inputs required to produce that product. 3) Here in the 3rd step production department have details of all raw material required to produce one product and from total quantity required, they will subtract current stock of raw material and quantity required to produce quantity for orders which are pending and they will add quantity they want as closing stock and as safety stock at the end of planning period. Net material requirement quantity = quantity needed for production - current stock of raw material – quantity needed to produce pending orders(if any) + requirement in current period + expected closing stock and safety stock BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 52. 52 Material requirement planning for Water chestnut Flour (from above production plan, we can see that production forecast is for water chest flour is 2865 kg) Current period = July Planning period = August Raw material singoda required for making water chestnut for the month of August = production plan quantity (2865 kg) - Current stock of singoda (630 kg) – quantity needed for pending orders (00) + closing stock Expected and for safety stock (600 kg) = 2835 kg So here Dhanhar Exim Pvt Ltd has to order for 2835 kg of Singoda for making 2865 kg of water chestnut. 4) The merchandiser place the order to the supplier of raw material as per the requirement. By this way they prepare purchase plan.  They do not believe in maintaining stock. So they have to prepare purchase plan every time. Normally they purchased raw material from Surat and Mumbai. D. Plant location of Dhanhar Exim Pvt ltd  Plant location is mainly selection on these areas where the business should well establish for maximum utilize of economy and effectiveness. It is an important decision in long term.  Location of plant is most important factor in a private sector. There are many factors are affected e.g. if the place was outside the city then they are free from paying octroi for their product, various taxes, labour transmission facilities, living home to the labour or employee like houses, cottages etc., for the raw material storage facility to the certain extent to run production smoothly. When plant or site is located in near or in the city they have no expense to rent for the employee or labour houses, available good infrastructure in compare to the far from the city area, less transportation cost, easy distribution of goods in less time. Dhanhar Masala Pvt. Ltd. plant is located at no far from the city BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 53. 53 and not near to the city. It is located in industrial zone of fulpada in this area they get benefits from the government and electricity, water, roads, communication channels. Production house Plant location of Dhanhar administrative office  Survey no. 167,Ashwini kumar road, Nr, shamshan bhumi,Fulpada, Surat,(Gujarat) India. Dhanhar house,Bhajiwadi pole,bhagal char rasta,Surat – 395003(Gujarat) India. Dhanhar Masala Pvt. Ltd. Chooses this area because there are available enough raw material with proper quality & quantity. Easy distribution of their product & profitable to the industry. They not thinking for the changing the site. They want to buy or take on the lease new site near the old plant.  The population is increasing day by day and residential area will come near to the industrial area so that Dhanhar Masala Pvt. Ltd. more concentrate on environment not harmful to the their citizen. The company will think to establish new plant far from to the residential area. Factors affected the selection of Dhanhar Exim pvt ltd locations and Benefits (evaluation) of plant location  Various factors which affected plant site selection and benefits from that location are as following. 1. Proximity ( nearer) to market 2. Proximity ( nearer) to raw material sources BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 54. 54 3. Type of business 4. Availability of manpower 5. Availability of infrastructure and other factors of production 6. Law & order 7. Political system and economical system of the country 8. Ideology of ruling political party and opposite parties 9. Cost of land and real estate 10. Other support system 11. Climate factors 12. Mindset of local society 13. Topography of soil 14. Nature of business 15. Tax incentives and other 16. Personal factors They are as following…….. 1. Proximity (nearer) to market  Dhanhar Exim Pvt. Ltd. is located in the prime area of surat. The benefit of this location is that they can serve to whole south Gujarat market where they have more number of customers compared to other parts means they can serve to places like Navsari, Valsad or vapi which are in southern part and to Bharuch, Ankleshwer and Narmada which in Northen part of Surat and hence surat is a central location and hence company can reach to the customers in easy way. 2. Proximity (nearer) to raw material sources  Adequate raw material is available for Dhanhar Masala Pvt. Ltd. The main reason for Choosing this area because there are available enough raw material with proper quality & quantity  Regular supply is possible as Surat is very near to N.H. 8. So transportation facilities are available all the time. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 55. 55 3. Other support system  There are various banks available around to the company like HDFC bank and sutex bank and Bank of Baroda etc.  As in some industry continuous supply of power is important factor. And here Torent Electricity Board provides continuous supply of power. 4. Availability of manpower  Important input of Unskilled or blue color workers is available at economical cost.  Regular & cheap supply employee is available in the area of Ashwini kumar.  Manpower availability with required skills. 5. Availability of infrastructure and other factors of production  Dhanhar Exim Pvt ltd has its own state of art infrastructure at manufacturing plant in Gujarat, India. Aimed with capable of producing more Masala per month.  Company does have separate buildings for administrative work and production work at Bhagal and at Ashwinikumar respectively. 6. Topography of soil  The soil of Ashwinikumar area is harder so that manufacturing process can be carried on without any further problems. And here company doesn‟t have very heavy manufacturing so production can be carried easily. 7. Type of business & Nature of business  The Dhanhar Exim Pvt ltd is running the business concerning with manufacturing of Masala and other edible products which can be manufactured in any area and also in prime area of city or village and hence Dhanhar Exim Pvt ltd have no requirement to be away from Surat city and hence Ashwinikumar is a proper place for them. 8. Political system and economical system of the country  Here as this company is only concerned with Manufacturing of Masala no political system affects the working and management of the company. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 56. 56 9. Ideology of ruling political party and opposite parties  Here the ruling party which is B.J.P have always supported industrialization and always promoted business against agriculture which always been an issue to the opposite party. But Ideology of ruling party is always positive that‟s why they are still in Masala industry since 1965. 10. Cost of land and real estate  The Dhanhar Exim Pvt ltd was established in 1965 and at that time surat was a developing area Surat district and they got the Ashwinikumar area‟s land at some economical cost but at that time Bhagal was the main area of Surat city and hence they have to pay slightly more at that time. 11. Climate factors  As Dhanhar Exim Pvt ltd is of manufacturing company of Masala and hence do not require having a specific climate. For e.g. a pharmaceutical company requires clean air in their premises but for Masala making nothing more is required. 12. Mindset of local society  Here the local ladies are getting the job and as it is only a Masala making firm local people have no point for opposing the company manufacturing. 13. Law and order  As company‟s both working places are in prime area of surat city they don‟t have to pay after security of working place compared to rural area and hence Dhanhar got benefited. E. Plant layout of entire factory  Here different plant layout for each deprtment is not there because Dhanhar has its production unit at Ashwinikumar and administrative office is located at Bhagal BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 57. 57 where marketing and finance department works. While there storage department is near Bhagal Vegetable market.  Thus internal plant layout for each department is not possible.  This is Dhanhar‟s administrative area where marketing and finance department is located.  While their storage department named Dhanhar Masala Bhandar is located near Bhagal Vegetable Market. Which can be seen in following map. Dhanhar Exim Pvt ltd, Bhagal, suart. F. Internal plant layout of main production department  Plant of Production Department at Ground Floor area  Here According to production process of cleaning, grinding, Mixing, packing and labeling, various departments are made. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 58. 58  While Storage department for finished products are made on the 1st flour. G. Types and classes of Material Handling Equipment 1. Trolley:  Trolley is being used mostly in the material department for the movement of small article from one rack to another and also used in the movements‟ equipment and man oriented equipment. Trolley can be as following. . 2. Hand carts: hand cart has the same utility as Trolley but it is used outside of the plant for movement of shipping packages of finished products. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 59. 59 3. Convey belts:  Dhanhar uses conveyor to transport materials on conveying system. Conveyor utilizes a moving belt that slides along a flat steel bed with pulleys at both ends.  Here Dhanhar mainly uses it for movement of raw materials. 4. Elevators:  Elevators are used for the vertical movement at Dhanhar between two floors and for moving finished products from production department to underground flour which is the storage area. Elevators uses electricity for vertical upward movement while use gravity while downward movement. Lifts transport goods vertically to multiple heights (from the ground to a mezzanine for example) or horizontally for increased order picking throughput. 5. Crates and boxes:  Dhanhar provides the baskets, bins, boxes, pallets and other containers that are durable enough to handle the day-to-day rigors of your operations. 6. Pipelines  Pipeline is used for liquid form inventory movement and of water and wastage materials. 7. wooden pallets:  Wooden pallets are the most common type of pallet, which are also made of metal, plastic and paper. Flat transport support structures, wooden pallets give forklifts the ability to easily lift and place products and materials on pallet rack.  Wooden pallet cab be seen as below BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 60. 60 Classification of material Handling Equipments A. Classification on the Basis of Form of the Material 1. For solid Material  Hand Carts  Conveyer Belts  Elevators  Crates and Boxes 2. For Liquid material  Pipes  Canals(For waste material) B. Classification as per path of movement  Elevators  Pipeline  Conveyor belt  Hand cart C. Classification as per Direction of movements o Handling is required between two departments, between two locations within a department and also at one work-station or machine  Elevator and pipeline for vertical Movements BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 61. 61  Handcart and conveyor belt for horizontal movements D. Classification as per starting point and destination point  Crates and boxes for intra department Material handling  Handcart and trolley for Inter department Material Handling E. Classification as per sources of power 1. Manually powered: Handcart, trolley, crates and boxes 2. Online electronic Power Source: Elevators H. Inventory control system  Here at Dhanhar Masala, they have ABC inventory control system in which they record the transactions of inventory in computer and arrange them in descending order in the form of their monetary value.  Here benefit from this system is” It is able to record multiple units of measure, as they purchase in “bags, jars, kg, etc.”  In this system name of RM its batch and material code and Barcode is inserted.  The installation of Stockroom has improved their inventory accuracy, reduced rush orders, reduced over buying and in general streamlined the purchasing and inventory process for this small business. Format of ABC system at Dhanhar Raw material name RM code Money value cumulative % of total Class of RM consumption value (A, B, C) I. inventory valuation method o Materials are issued to the different jobs, works, and orders from the „store‟. The cost of finished product largely depends upon the price changed for raw-material issued to the BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 62. 62 jobs. Various methods are used for inventory valuation, which will solute with industry condition. The methods of inventory valuation are as follows: 1. FIFO method (first in first out) 2. LIFO method (last in first out) 3. HIFO method (highest in first out) 4. Average cost method 5. Market price method 6. Standard cost method 7. Base stock method o Dhanhar Exim Pvt Ltd is using FIFO (first in First out Method) for valuation of inventories, in this method Guidelines for inventory valuation method Raw material o Stock different ingredients are values as per the price of purchasing. So if dry water chestnuts are being purchased at 6 rupee per kilogram and suppose 25 paisa is inspection cost then 6.25 is the value of water chestnut. Work in progress o Top management has decided that Work in progress is valued as per the half cost of manufacturing multiply by quantity of WIP. Finished goods o Final Masala product is being valued as per manufacturing cost multiply by total stock of polished raw material. Tools and equipments BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 63. 63 o There is stock register of how many tools and equipments are used. According to this register tools or equipments used multiplied by cost or price of that tools and equipment. J. Classification of inventories according to ABC & VED analysis ABC analysis o Abc analysis is analysis according to the value of items. In Dhanhar, the inventory consists of hundreds of items and many employees are controlling them. In order to affect economy in controlling such large inventory Dhanhar uses a system known as ABC (Always Better Control) analysis. o It has been found from the experience that all items included in inventory are not of equal importance. A few items in the inventory represent a large proportion of total value of inventory. Hence, more attention must be devoted to the control of such items. All the items are divided into three categories. 1. A – Category  It includes those items which are very important and of high value but forms only a small proportion of total quantity of inventory.  At Dhanhar, there are 40 items which are comes in category A and they represents as much as 54% of value of inventories. Strict control over receipt, storage and issue should be exercised over these items such as Black Pepper, whole cardamom, red chili, turmeric, dry singoda, Cotton Seeds Oil, Nutmeg, Coriander, Ginger, Plastic Bag( for packing), Rajgara etc. 2. B – Category  Items included in category B are not as important as those in category A interms of money, but are important enough for its proper records to be maintained. They constitute 65 items of total number of items, but represent 28% of total value.  Here such items are Ajwain, Mint Leaves, Black Salt, Rock Salt , Cinnamon Leaves etc 3. C – Category  The remaining items must be placed in category C. they are not so important form the view point of maintaining control over the receipt and consumption such items constitute 50% of the total number of items but they represent 18% of total value. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 64. 64 ABC analysis of Dhanhar Category No. of items(in % of total Value of items ( in % of total number of items) value of inventory) A 40 items (21.05) 54 B 55 items(28.95) 28 C 95 items (50%) 18 This ABC analysis can be shown as following 100 80 60 40 20 0 0 21.05 50 100 VED analysis  The possible consequences of material stock outs when demand arises from the basis of VED analysis. The cost of shortage depends upon the seriousness of the situation. Items are grouped as V(Vital), E(Essential) and D(Desirable).  This classification of inventory is based on importance and application of different items in production process. According to this classification there are three categories of item VED.  Vital items are those items without which production will instantly stock all main raw materials are obviously vital items. Similarly, there can be some another low value items which are absolutely necessary for production process. As explained above, BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 65. 65 spar parts of machines like power generator or Quality control liquid becomes vital items. For example for making water chestnut flour dry singoda is vital product.  Essential items are those items without which efficiency of production process will reduce. Absence of these items may not cause total stoppage of production but rate of production may go down or wastage of material may increase.  For Example at Dhanhar elevator is most important because it is helpful for multi level movement of material and if it is not working then it will affect the efficiency.  Desirable items are those items, without which it will be inconvenient to do production operation. Without these items, production is not going to stop or slow down.  Example: weight measuring instruments, staplers small tool of safety devises are such desirable items. In Dhanhar, there is no system like VED analysis but by doing VED analysis those who are responsible for availability of various raw material and items may know which items are important for production process. K. Study of material codification system  Material codification system is a system in which each parts is given different codes for identifying particular product by giving alphanumeric codes. Alphanumeric codes, which are given to different parts, are unique so that computer will able to keep accurate information in it. Now we are going to study alphanumeric codes. 1. RM045: Here RM means material related items. For example red chillis, dry ginger may be given the code 0454 and 0567. 2. FG012: Here FG means finished goods which made in factory. For example Tea Masala may be given a code FG180 3. JB022: Here JB means job repairing items. Items which are used for repairing and maintenance. For example nuts, bolts, various machines spare parts etc. 4. C12: Here C means consumables items. Greece, oil etc. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 66. 66 L. Records keep in store: 1. Material Receipt Register 2. Material Issue Register 3. Stock Register 4. Store Register of Assort Department 5. Wastage goods Register 6. Reject goods Register 7. Finished goods Register M. (a) Material receipt procedure  At Dhanhar, there is systematic process for material receipt as follows. 1) The first step is purchase order given by company to suppliers. 2) When material comes it is not directly sent to store department but it is given for quality checking. In Dhanhar, there is one laboratory to check the quality of materials. They are checking the quality of goods and compare with quality of sample which is given by suppliers. 3) If there is any discrepancy, it should be immediately reported to the purchase department and that goods are sent to rejected goods department. 4) Rejected goods department take necessary action for the return of goods to suppliers. 5) If the goods are of quality, receiving section will prepare a “goods receive note”. Four copies of the note are prepared and three copies are sent to the store keeper along with the goods received and they attach green color “accept card” with materials. 6) Received material is store in various containers by store department and issue when they get order. (b)Material issue procedure As we done previously, we will see material procedure step wise. 1. Suppose the sales department gets the order of 100kg Pavbhaji Masala. Then purchase department will see current availability of stock and store department and by watching condition they are taking decisions. 2. After the store department is given required stock, production department approach the store department for getting required material for producing 100kg Pavbhaji BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 67. 67 Masala, so that the store department will send accurate and adequate material to production department, which will reduce the wastage cost. 3. Now store department will approach to material requirement department which will give them the bill of material report of 100kg Pavbhaji Masala.  One thing should be noticed that consumable items, workers have to approach the store department with requirement slip for getting the required material. N. Documents related to material issue and receipt 1) Material receipt register 2) Material issue register 3) Stock register Material Receipt Register Date Name of Dealer Challan no. Item Quantity Remark Material issue register Date Name of Dept Material Issue Form Item Quantity Remark Balance Remark No. Stock Register Date Receipt Of Quantity Price Date of Issue Issue Quantity Receipt BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 68. 68 O. Purchase procedure 1. First requirement for raw material is felt after making raw material purchase plan, so here which product in how much quantity to purchase etc are determined. 2. After that search for the supplier is done in which they write the letters for quotations from the suppliers. And here supplier sends the quotation for the specified material. 3. In the third step company selects the suppliers who are providing good quality of material at the reasonable rate. 4. Fourth step is about communication and negotiation between company and supplier regarding quantity to be sent and by what way payment is needed to be done and about the payment terms and condition and credit period. 5. In this step final price is decided 6. This step is about placing the order with certain quantity and delivery date. 7. Receipt of material is the last step of purchase procedure. requirenment of raw material is felt Inquiery about suppliers ( quatation) selecting one supplier which satisfies more Negotiation ( communication) Decide the final price Place the purchase order Receipt of material BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 69. 69 Documents related with purchasing a. Inquiry letter:  This is the letter which is send by the purchase manager to suppliers. If communication is written then the purchase manager can have the proof. But if the means of communication is telephonic then there can be no proof. And if the communication is done by e-mail then there will be definite proof. b. Response letter:  This letter is given by the supplier to purchase manager. This is the letter in response to the inquiry letter. This letter is in the form of quotation. Which contain the price of the goods that manager have asked and also other information. c. Comparison Statement:  This is the statement which is prepared by the purchase manager. After receiving the quotation from the supplier the manager will prepare this kind of comparison statement. This statement contains the comparison between all suppliers. And on the basis of this they will decide whether to select the particular supplier or not. Comparison statements Dhanhar Exim Pvt Ltd Bhagal, Surat Comparative statement of quotations Tender no……… Opened on………… Name of material……… Serial Name of no supplier Entered by………. quantity Price Duties and Terms of taxes Remarks delivery Checked by………. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 70. 70 Purchase order Dhanhar house, Bhajiwadi pole, bhagal char rasta, Surat – 395003 Phone no: (0261)225121224 PURCHASE ORDER Purchase Order No: Supplier Quotation: TO: No. & Date: Please supply the following items on the terms and condition mentioned below. Sl No Description Material size Qty. Price Amount Delivery code date Terms of delivery…….. For Dhanhar Exim Purchase Manager P. Maintenance planning system  Maintenance planning for various machines used production department necessary for continuous production. At time, break down of one machine can hamper whole process of the production and also leads to delay delivery. To avoid all this things, there is one master key and that is compulsory periodically maintenance.  At Dhanhar, maintenance of consumable machine is done on a fixed period and definitely at the time of breakdown of the machinery point. After breakdown experts for bigger faults immediately repair machinery. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 71. 71  At Dhanhar maintenance of different machines is done on the based on the limits given to each machines and also keep records for each machines with no. of breakdown in whole month and even for year. If any machinery shows more than expected breakdowns than it is inform by service man to top management for the replacement of machinery Q. Quality control system at Dhanhar Exim Pvt ltd Quality:  Quality refers to the sum of attributes or properties that describe a product. These are generally expressed in terms of specific product characteristics such as length, width, colour, etc. These characteristics must be quantitatively expressed in terms that can be objectively measured or observed. Quality Control: Quality Control refers to those activities used to refer to a specific organization within the Industrial enterprise which is assigned responsibility for many of the activities necessary to achieve quality objectives. Methods of Quality Control, which are uses in the Dhanhar Masala Pvt. Ltd There are three method uses, which are given below:1. Inspection: inspection is done by the worker on the job and improving the quality wherever he finds any fault. 2. Quality Circles: at Dhanhar group of many person are given various products for production and one with best individual performance is elected as a group leader and all group leaders meet frequently for quality improvement. 3. Statistical Quality Control (SQC): this method is followed by laboratory scientist for checking the quality of raw material and finished products.  Most of use Inspection and Statistical Quality Control by Dhanhar Masala Pvt. Ltd. in the Factory. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 72. 72 Quality control: Quality is the key thing the business of exports. Dhanhar is also paying more attention to the quality control. In this company there is quality control department directly under the quality control manager and production head.  The structure of the quality control department is as follows: production manager quality control manager line quality controller (for basmati rice , for spices) checkers General guidelines for quality control  They have to use hand gloves while production during grinding, mixing, and cleaning.  In every 5 hours the floor is cleaned by the house keeping members.  They use wet & dry dustbin to throw waste and to keep environment hygienic and eco-friendly. Plastic bag used in a dustbin are change twice in a day.  They use fresh herbs and ground nut spices and cleaned before grinding.  They never use expire product before getting it from general store they always check the manufacturing or expire date.  And they always clean the cleaning, mixing and grinding machine after making each spice. For example after making tea Masala they will clean each machine. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 73. 73 R. Quality control guidelines for raw material and finished products For raw material  For raw material quality control, first the company checks the quantity in which the order was being placed and is the product as per the order or not? And check list is being made.  In the 2nd stage company sends the raw material to the laboratory for the checking of quality.  At Dhanhar raw material samples are tested for multiple times, at every point of the supply chain to ensure the highest quality and product consistency. The Dhanhar Quality Assurance program consists of a fully-integrated QC lab which is complete with testing capabilities on chemical, micro/ macro-sanitary & microbiology parameters as well as Inspection standard.  Here Raw material is tested that if it of good quality or not and for how much time it is consumable. For finished goods  Before checking the quality of finished product it is checked that whether the weight of packging is proper or not.  Then after it is checked that for how much time product is consumable for example if Tea masala is consumable within 12 months of packaging and if the product made has expiry date before given then that production lot may be rejacted.  While checking the quality of Finished products, quality of packaging is also checked, here durability of packing and Labeling is checked. S. In process quality control guidelines  At Dhanhar in process quality control is checked in 3 steps which are as following 1. Quality control at cleaning stage: here in this stage company checks that whether raw material is properly cleaned or not. After Removing Dust & Stone it is checked that whether raw material is properly cleaned or not. Here this part is more important for ground nut spices. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 74. 74 2. Quality control at grinding stage: here in this stage company checks that whether raw material is properly grinded or not. For example red chili powder is to be made then in this stage it is checked whether it is perfectly grinded and is in completely powder form and here it is also checked whether chili seeds are not there in the powder. 3. Quality control at Mixing stage: here in this stage company checks that whether raw material is properly mixed or not. for example in Shambhar Masala rock salt, cumin seed, ginger, dry mango, ajwian, chili, black salt, dry mango ,mint leaves, compounded asafetida, Citric Acid is mixed in proper quantity or not and it is checked through chemical process in the laboratory. T. Documents related to quality control 1. Finished product report 2. Raw material report 3. Packing material report 4. In process report 5. Re-test report 6. R.M. order sample record 7. Suggestion record 8. Complain record ( outside) 9. Release order record 10. Date stock registered. U. Different reports generated in production department 1. Material issue and receipt record 2. Stock register 3. Maintenance record 4. Machinery hour records 5. Quality control reports 6. Purchase and inquiry report BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 75. 75 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 76. 76 1. Detailed organization structure of finance department General Manager Head of Finance department Accountant Clerk Cashier o Here at Dhanhar finance department is being managed by head Mr. Hitesh o Accountant has to work under Mr. Hitesh o Clerk is at 3rd level in the hierarchy o Cashier is working under the head of a clerk. 2. Revenue Budgeting o Revenue budgeting plays an important role in every financial procedure. o In this company also, revenue budgets are prepared on the requirement basis. o In the first stage, sales plan are prepared from the entire marketing process. o From sales plan, production plans are prepared as to fulfill the customer requirement. o In the next stage, with the help of production plan, raw materials requirement are planned i.e. how much raw-materials are to be purchased from different dealers. o Estimation of labour hours is also done and estimated working days are considered and hence total employment cost are determined. o Lastly revenue budgets are prepared to estimate the entire financial flow of the company. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 77. 77  The calculation of revenue budget is very easy to understand and calculate. We can simply calculate the revenue budget by deducting all the expenses of the company by all the incomes. If the revenues exceeds the expenses, that means company is in profit criteria and if the expenses exceeds the revenues, that means company is in loss criteria. The revenue budgeting process can be explained as following. sales plan by marketing department total expanses are estimeted total income is determined production plan estimeted cost of labour Incomeexpanses material requirnment planning purchase of raw material profit or loss 3. Costing methods  The methods to be used for the ascertainment of cost of production differ from industry to industry. It primarily depends upon the manufacturing process and also on the methods of measuring the departmental and finished products.  There are various methods of costing are as follows: 1. Unit costing 2. Job costing 3. Contract costing 4. Batch costing 5. Process costing 6. operation costing 7. Operating Costing BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 78. 78 8. Multiple operations costing  Dhanhar Exim Pvt Ltd use batch costing methods. Dhanhar Exim Pvt Ltd use this methods because in Batch Costing, products are produce in a lot ,say in 5000 units, product like Hing, so Batch is given as “05 JUN 13”, for this product ,it includes product name, product code month of Manufacturing, year. Thus Batch is used for ascertaining the cost of product. In Dhanhar Exim Pvt Ltd, All the Products are usually kept in stock for selling to customers on demand. Whenever a particular product is required, one unit of such product is not produced but a lot of say 500 or 1000 units of such product are produced. It is therefore also known as “Lot Costing”.  In Dhanhar Exim Pvt Ltd Separate Batch cost sheets are maintained for each batch of products. Each batch is allotted a number. Material requisitions are prepared batch wise, the direct labour is engaged batch wise and the overheads are also recovered batch wise. Cost per unit is ascertained by dividing the total cost of a batch by number of items produced in that batch. Production orders are issued only when the stock of finished goods reaches the ordering level. In case the batches are repetitive, the costing work is much simplified. Since in batch costing production is done in batches and each batch consists of a number of units Cost per unit in a batch = Total cost of a batch/ Number of Items produces Product name Batch Product name code Chilli powder & Kashmiri Chilli 01 Batch code Turmeric powder 02 Masala Water chest nut 03 Sour mango pickle Masala 04 Hing 05 Sweet mango pickle Masala 06 Coriander Powder 08 Raj wadi garam Masala and 07 super Garam Masala Dry Ginger Masala 09 Jeera Masala 10 Coriander cumin Powder 12 Black paper powder 11 White paper powder 13 Kitchen King Masala 14 Biryaani pulav Masala 15 Tea Masala 16 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 79. 79 Chhole Chana Masala 17 Sambhar Masala 18 Pav bhaji Masala 19 Mutton Masala 20 Chicken Masala 21 Egg Curry Masala 22 Fish Masala 23 Nimbu soda Masala 24 Meat Masala 25 Pomegranate Powder 26 Pani puri Masala 27 Dry mango Masala 28 Sandwich Masala 29 Jal jeera Masala 30 Kasuri methi 31 Patra masala 32 Undhiyu Masala 32 Chiwda Masala 33 Dabeli Masala 34 Asafetida powder 35 Fruit chaat Masala 36 Saffron 37 Ravaiya Masala 37 Surati dalshak Masala 38 Butter milk Masala 39 Curry Masala 40 Rajwadi milk Masala 41 For example batch of some products are shown in following images a. Sweet mango pickle Masala code = 06  Here 06 is the code of sweet mango pickle Masala, batch code is “06 JUN 13” b. Sour mango pickle Masala code = 04  Here sour mango pickle Masala code is 04 and batch code is “04 APR 13” BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 80. 80 c. Hing code =05  Here Hing code is 05 and batch code is “05 MAY 13” 4. Cost structure  Cost structure can be divided in three parts viz fixed cost, variable cost and semi variable cost. Total Cost Fixed Cost Variable Cost Semi-variable cost BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 81. 81 5. Costing sheets & classification of costs in different categories Cost Sheet Particular Amt for 2010-11 Amt for 2011-12 Consumptions of Raw materials 32083964 34400853 Direct Labour 673495 829740 Direct expenses 1121268 2312434 Prime Cost 33878727 37543027 Depreciation and repairs 725639 765163 Insurance 65000 690000 Electrcity expenses 990860 1000900 Works cost 35660226 39999090 Administrative overheads 1121268 2312434 Cost of production 36781494 42311524 Add: Opening Stock of Finished Goods 521755 1036536 less: Closing Stock of Finished Goods 1004820 1464109 Cost Of Goods sold 36298429 41883951 Selling and Distribution Exp. Advertisement Expences 690000 710000 Distribution Expences 102985 127890 packaging and labelling expences 426700 456700 Cost of Sales 37518114 43178541 Profit 8830827 11526258 Net Sales 46348941 54704799 Classification of Cost in Different category The cost are classified broadly classified into three category .they are classified as follow. 1) Factory cost Factory Cost for year 2010-11 and 2011-12 are as follow Factory cost 2010-11 Depreciation and repairs 725639 Insurance 65000 Electrcity expenses 990860 Direct Labour 673495 Direct expenses 1121268 Total 3576262 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT 2011-12 765163 690000 1000900 829740 2312434 5598237
  • 82. 82 2) Administration Cost Administration Cost for year 2010-11 and 2011-12 are as follow. Administration Cost 2010-11 Salary 750000 Depreciation of office furniture 26262 Telephone & postage 32556 Printing and stationary 31450 Audit fees 15000 Legal charges(including Tax) 124500 Office electricity 74354 Other Expenses 67146 Total 1121268 2011-12 1520000 64635 88832 77658 15000 243500 158468 144341 2312434 3) Selling and distribution Cost Selling and distribution Cost for year 2010-11 and 2011-12 are as follow. Selling and distribution Cost 2010-11 2011-12 Advertisement Expenses 690000 710000 Distribution Expenses 102985 127890 packaging and labeling expenses 426700 456700 Total 1219685 1294590 6. Working capital management at Dhanhar Exim Pvt Ltd Meaning of working capital  Working capital to a company is like the blood to human body. It is the most vital ingredient of a business. Working capital management if carried out effectively, efficiently and consistently will assure the health of an organization. Meaning: Working capital is defined as the excess of current assets over current liabilities.  Current assets are those assets which will be converted into cash within current accounting period or within the next year as a result of ordinary operation of the business. They are cash or near cash resources. At Dhanhar this includes: A. Cash and bank balance B. Receivables C. Inventory BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 83. 83 a. Raw materials, stores and spares b. Work in progress c. Finished goods D. Prepaid expenses E. Short term advances F. Temporary investment  The value represented by these assets circulates among several items. Cash is used to buy raw material, to pay wages and to meet other manufacturing expenses. Finished goods are produced. These are held as inventories. When these are sold account receivable brings cash into the firm. The cycle starts again. Circulation of current liabilities: Current liabilities are the debts of the firms that have to be paid during the current accounting period or within a year. These include: A. Creditors for goods and RM purchased B. Outstanding expenses C. Short term borrowings D. Advances received against sales E. Taxes and dividend payable F. Other liabilities maturing within a year Sources of fund 1. Taking loans  Dhanhar Masala Pvt. Ltd. requires and uses Short Term Capital for running the business. Short Term Capital to finance its working capital requirements.  Dhanhar Exim Pvt. Ltd. Takes loans from some industrial bank and co operative bank. 2. Retained earnings and depriciation  Dhanhar Masala Pvt. Ltd. use only Retained Earnings in the business firm. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 84. 84  Depreciation charged and retained earnings represent the internal sources of finance available to the company.  If the depreciation charges are used for replacing worn-out equipment, retained earnings are used as working capital souces.  Dhanhar Exim normally retains 30 to 40 percent of profit after tax for financing growth. Advantages of the Retained Earnings at Dhanhar Exim Pvt. Ltd. 1. Retained Earnings are readily available internally. They do not require taking to outsiders. 2. Retained Earnings effectively represent effect of additional equity in the firm. 3. There is no transfer of control when a firm relies on retained earnings. 4. Retained earnings have an advantage of lower Tax. 3. Bank overdraft  Company sometimes takes the bank overdraft facility for the payment to the creditors. Allocation of funds to Different Departments:  Dhanhar Masala Pvt. Ltd. industry providing funds to different departments in their budgeting program. Particulars marketing department wages and salary production employee welfare capital budgeting % of allocation 18 41 31 3 7 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 85. 85 allocation of finance employee welfare 3% capital budgeting 7% marketing department 18% production 31% wages and salary 41% Statement Showing Net Working Capital of Dhanhar Exim Pvt Ltd Particular 2011 (A)Estimation of current Assets Inventories Sundry Debtors Cash & Bank Balance Loans & Advances Total Less(-) (B)Estimation of current Liability Sundry creditors Provision Total Net Working Capital (A-B) 2012 1036536 901865 201629 569000 2709030 1464109 997917 370393 578600 3411019 1574795 159485 1734280 974750 1971952 171055 2143007 1268012 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 86. 86 7. Preparation and analysis of Fund flow statements Statement Showing Changes in working Capital of Dhanhar Exim Pvt Ltd Particular 2011 2012 increase in decrease W.C in W.C. (A)Estimation of current Assets Inventories 1036536 1464109 427573 Sundry Debtors 901865 997917 96052 Cash & Bank Balance 201629 370393 168764 Loans & Advances 569000 578600 9600 Total 2709030 3411019 Sundry creditors 1574795 1971952 397157 Provision 159485 171055 11570 Total 1734280 2143007 Net Working Capital (A-B) 974750 1268012 increase in working 293262 Less(-) (B)Estimation of current Liability 701989 408727 293262 capital total 1268012 1268012 701989 701989 Fund Flow Statement Sources of fund Amount Application of fund Amount Borrowing Loans 1254500 Purchase of fixed assets 1957665 Profit from operation 102459 Purchase of investments 25032 Increase in working capital 293262 Total 2275959 Total 2275959 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 87. 87 8. Internal audit policies & financial control system    Internal audit system is very important for any industry. By the audit, management can know where the company stands. This is the best way to control and remove deices. Management can also easily know whether they are earning profit or incurring loss. The balance sheet and profit and loss A/C of Dhanhar Masala Pvt. Ltd. is audited every year at the end of the march. An audit of Dhanhar Masala Pvt. Ltd. is conducted in accordance with auditing standards generally accepted in India. Audit is planned and performed to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on test basis evidence supporting the amount and disclosure in the financial statement. An audit above includes assessing the accounting principles used significant estimates made by the management as well as evaluating the overall financial statement presentation. Here auditing is done half yearly. Types of Payment to Auditor Amount (Rs.) Audit Fees 15000 Tax Audit Fees 5000 Other Matters 5000 Services Tax 1250 9. Accounting policies 1. Method of accounting:  The company follows mercantile systems of accounting as mentioned in the companies act, 1956. 2. Fixed assets:  All fixed assets are recorded at cost of acquisition including installation cost wherever applicable excluding motivate amount. 3. Depreciation: BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 88. 88  It is being provided according to the companies act 1956 considering written down value method using single shift working in respect of plant and machinery. In respect of other assets depreciation is provided according to rates prescribed in schedule IV of the company‟s act 1956 in case of addition during the year. Depreciation is provided of the prorate basis. 4. Inventories:  Inventories are valued at the cost or net realizable value whichever is lower. 5. Income and expenses recognition:  Income and expenses are accounted for an accrual basis. 6. Miscellaneous expenditure:  Miscellaneous expenses are amortized over a period of 10 years. 7. Doubtful debts / advances :  Provision is made in the accounts for debts / advances that in the opinion of the management are considered doubtful of recovery. 10. Methods to calculate Depreciation     Every company has to undertake a proper depreciation method for maintenance of depreciation provision. Each asset in the business has its own useful life. The main base of such useful life depends upon the period on which the assets can be used. Because of the usage of the asset its working capacity decreases and so does the utility price of it. This reduction in the value of an asset is known as depreciation. With the reference to above explanation, depreciation can be understood as the amount to be written off out of the cost price of that asset during its useful life. According to Carter, “gradual and permanent reduction in price of an asset is called depreciation” In Dhanhar Masala Pvt. Ltd., depreciation is being provided according to the companies act 1956 considering written down value method using single working in respect of plant and machineries. For other assets depreciation is provided according to rates prescribed in schedule VI of company‟s act 1956. In case of addition during the year depreciation is provided on prorate basis. For income tax purpose, depreciation is calculated as per the WDV method (Written down value) based on taxes involved. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 89. 89 11. Analysis of P & L Account & Balance sheet by ratio analysis A. Liquidity Ratio No. Name of Ratio 1. Current Ratio = Current Assets Current Liability 31st March 2010-11 2140030 1734280 =1.23:1 31st March 2011-12 2832419 2143007 =1.32:1 Comment: Generally 2:1 current ratio is recommended by Government. In 2011-12 Current ratio is Higher than previous year. It implies that for every 1 Rs of current liability, 1.32 Rs of current assets are available to meet them. It is satisfactory than last year. but which shows that company was not able to meet its current obligations as and when required. 2. Liquid Ratio = Liquid Assets Liquid Liability 1103494 1734280 =0.6362:1 1368310 2143007 =0.6385:1 Comment: The liquidity position of the company is also satisfactory than its previous year. The liquid ratio in the year 2010-11 was 0.6362:1, which was 0.6385:1 in the year 2011. Company should take immediate steps to increase quick assets. B. Solvency Ratio No. Name of Ratio 1. 31st March 2010-11 3580796 8302695 =0.43:1 31st March 2011-12 4602255 9557195 =0.48:1 Debt Equity Ratio Long Term Debt Share holders Fund Comment: the standard ratio is 2:1 . Dhanhar Exim Pvt Ltd debt equity ratio is under control as it is 0.43.which represents a satisfactory capital structure of business. 8302695 9557195 Proprietary Ratio Share-Holders Fund 13617771 16302457 Total real Assets =0.6:1 =0.58 Comment: In 2011-12,the ratio was gone down from 0.60 to 0.58. it is recommend 2. to increase owners fund. 3. Fixed Assets to proprietary Ratio Fixed Assets Share-Holders Fund 11426164 8302695 =1.38:1 13393429 9557195 =1.40:1 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 90. 90 Comment: The ratio of a firm is greater than 1. Which means creditors obligation has been used to acquired a part of the fixed assets. C. Profitability Ratio No. Name of Ratio 1. Gross Profit Ratio Gross profit Net Sales 31st March 2010-11 10187495 46348941 =21.97% 31st March 2011-12 14125699 54704799 =25.82% Comment: The GP ratio of company is higher than its precious year which shows both selling price and cost of goods sold have changed, the combined effect being increase in gross margin. 2. Net profit Ratio Net Profit after Tax Net sales 5919147 46348941 =12.77% 8255093.6 54704799 =15.09% Comment: The profitability is higher than last year hence it is very useful to proprietors is shows an index of efficiency and profitability. 3. Operating Ratio COGS + Operating Exp. Net Sale 41094376 46348941 =88.66% 48776778 54704799 =89.16% Comment: The ratio was 88.66% in year 2010-11 which is slightly increase by 0.5 % in year 20111-12.which shows company was more efficient in year 2010. 4. Operating profit Ratio Operating Profit Net Sale 10187495 46348941 =21.97% 14125699 54704799 =25.82% Comment: In 2010-11 the ratio was 21.97 % which is increased by 3.85% in year 201112.which shows company can say better position in year 2011-12. 5. Return on Capital employed Operating Profit Capital employed 10187495 11883491 =85.23% 14125699 14159450 =99.76% Comment: This ratio is higher than the last year. It implies that long term funds supplied by the creditors and owners of the company get higher return on their investments due to increase in operating profit. 6. Return on Shareholders Fund Net Profit After Tax Share Holders Fund 5919147 8302695 =71.29% 8255093.6 9557195 =86.37% Comment: In 2011-12 ,The ratio was higher than year 2010-11. So that Shareholder gets high return on their investment due higher net profit than year 2010-11. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 91. 91 Activity Ratio No. Name of Ratio 31st March 201012 31st March 2011-12 1. Capital Turnover Ratio Net Sales Capital Employed 46348941 11883491 =3.9 Times 54704799 14159450 =3.86 Times Comment: In 2010-11 , The ratio was 3.9 times which was decrease to 3.86 times in 201112. which indicates lower profitability position in year 2011-12. 2. Working Capital Ratio Cost of sale Net working capital 37518114 974750 =38.48 Times 43178541 1268012 = 34.05 Times Comment: In 2010-11,the ratio was satisfactory than year 2011-12. Because The ratio is decrease from 38.48 to 34.05 times which shows there was high investment in working capital and there was less profit. 3. Stock Turnover Ratio COGS Average Stock 36298429 779145.5 =46.58 Times 41883951 1250322.5 = 33.5Times Comment: The ratio was in year 2010-11 was 46.58 times decreased to 33.5 times. Which shows efficiency of the firm is decreased. So some steps should be taken to push sales up. 4. Fixed Assets Turnover Ratio Cost of sale Net Fixed Assets 37518114 11426164 =3.28 Times 43178541 13393429 =3.22 Times Comment: In 2010-11 the ratio was higher than year 2011-12 .so company have to required intensive utilization of fixed assets. 5. I. Debtors Turnover Ratio Net credit sale Average Debtors II. Debtors Ratio Months/Days in a year Debtors turnover Ratio 11587235 901865 12.85 Times 345 12.85 =27 Days 13676200 997917 =13.70 Times 345 13.70 25 days Comment: The debtors turnover ratio during the period 2010-11 was 12.85 times which increased to 13.70 times which shows company received early payments from customer. 6. I. Creditor Turnover Ratio Net credit Purchase Average Creditor II. Creditors Ratio Months/Days in a year Debtors turnover Ratio 8272196 1574795 5.25 Times 345 5.25 =65 Days 10733808 1971952 5.44Times 345 5.44 63 Days Comment: The creditor ratio during the period 2010-11 was 5.25times which increased to 5.44.which shows company was enjoy less credit period from supplier. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 92. 92 Highlights of Ratio 31st March2010-11 Name of Ratio Liquidity Ratio 1. Current ratio 2. Liquid Ratio Solvency Ratio 1. Debt Equity Ratio 2. Proprietary Ratio 3. Fixed Assets to proprietary Ratio Profitability Ratio 1. Gross Profit Ratio 2. Net profit Ratio 3. Operating Ratio 4. Operating profit Ratio 5. Return on Capital employed 6. Return on Shareholders Fund Activity Ratio 1. Capital Turnover Ratio 2. Working Capital Ratio 3. Stock Turnover Ratio 4. Fixed Assets Turnover Ratio 5. Debtors Turnover Ratio 6. Debtors Ratio 7. Creditor Turnover Ratio 8. Creditor Ratio 31st March 2011-12 1.23:1 0.6362:1 1.32:1 0.6385:1 0.43:1 0.6:1 1.38:1 0.48;1 0.58:1 1.40:1 21.97% 12.77% 88.66% 21.97% 85.23% 71.29% 25.82% 15.09% 89.61% 25.82% 99.76% 86.37% 3.9 Times 38.48 Times 46.58 Times 3.28 Times 12.85 Times 27 Days 5.20 Times 65 Days 3.86 Times 34.05Times 33.5 Times 3.22 Times 13.7 Times 25 Days 5.44 Times 63 Days 12. Trend Analysis And Comparative Statements Comparative Statement of Balance Sheet PARTICULARS SOURCES OF FUND SHAREHOLDERS' FUNDS:  Share capital  Reserves and Surplus  Loan funds 2010-11 2011-12 absolute Percentage 6856100 1446595 3580796 6856100 2701095 4602255 0 1254500 1021459 0 86.72088594 28.52603164 TOTAL APPLICATION OF FUNDS:  Fixed Assets  Investments 11883491 14159450 2275959 19.15227604 11426164 51577 13393429 76609 1967265 25032 17.21719555 48.53326095 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 93. 93 Current Assetes,Loans and Advances:  Inventories  Sundry Debtors  Cash and Bank Balances  Loans and advances Total Current Assets Less: Current liabilities and Provisions  Current Liabilities Creditors For Goods  Provisions Total Current Liability 1036536 901865 201629 1464109 997917 370393 427573 96052 168764 41.2501833 10.6503745 83.70026137 569000 2140030 578600 2832419 9600 692389 1.687170 32.35417261 1574795 1971952 397157 25.21960001 159485 1734280 171055 2143007 11570 408727 7.254600746 23.56753235 Trend Analysis of Balance sheet PARTICULARS SOURCES OF FUND SHAREHOLDERS' FUNDS:  Share capital  Reserves and Surplus  Loan funds 2010-11 2011-12 percentage 6856100 1446595 6856100 2701095 0 0 86.72088594 186.7208859 3580796 4602255 28.52603164 128.5260316 TOTAL APPLICATION OF FUNDS:  Fixed Assets  Investments Current Assetes,Loans and Advances:  Inventories  Sundry Debtors  Cash and Bank Balances  Loans and advances Total Current Assets Less: Current liabilities and Provisions  Current Liabilities Creditors For Goods 11883491 14159450 19.15227604 119.152276 11426164 51577 13393429 76609 17.21719555 48.53326095 117.2171956 148.5332609 1036536 901865 201629 1464109 997917 370393 41.2501833 10.6503745 83.70026137 141.2501833 110.6503745 183.7002614 569000 2140030 578600 2832419 32.35417261 132.3541726 1574795 1971952 25.21960001 125.2196 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT Trend
  • 94. 94  Provisions Total Current Liability 159485 1734280 171055 2143007 7.254600746 23.56753235 107.2546007 123.5675323 Comment: here trend analysis of balance sheet shows that sources of fund will increase by 19.15% and application of fund will increase by 23.57% Common Sized Statement of Balance Sheet  Here percentage of total sources of fund are taken as basis PARTICULARS 2010-11 SOURCES OF FUND SHAREHOLDERS' FUNDS: 6856100  Share capital 1446595  Reserves and Surplus 3580796  Loan funds TOTAL APPLICATION OF FUNDS:  Fixed Assets  Investments Current Assetes,Loans and Advances:  Inventories  Sundry Debtors  Cash and Bank Balances  Loans And Advances Total Current Assets Less: Current liabilities and Provisions  Current Liabilities Creditors For Goods  Provisions Total Current Liability percentage 2011-12 percentage 57.69432568 40.39869906 30.13252587 6856100 2701095 4602255 48.42067 19.07627 32.50306 100 14159450 100 11426164 96.15157701 51577 0.434022292 13393429 76609 94.59004 0.541045 1036536 8.722487357 901865 7.589226095 201629 1.696715216 1464109 997917 370393 10.34015 7.04771 2.615871 569000 4.788155265 2140030 18.00842867 578600 2832419 4.0863017 20.00374 1574795 13.25195601 1971952 13.92676 159485 1.342071955 1734280 14.59402797 171055 2143007 1.208062 15.13482 11883491 Comment: here common sized statement of balance sheet shows that percentage of all sources of fund compared to total of sources of fund are decreasing in 2012 compared to 2011 % of all application of fund compared to total are almost same in both year with minor changes. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 95. 95 Comparative Statement of Profit & loss A/c PARTICULARS GROSS SALE/INCOME FROM OPERATION Closing Stock Net Sales/Income from operation short term loans Other income total of income Expenditure Consumption of raw materials Purchase of traded goods Employees cost electricity expanses Advertisement insurarnce exp Depreciation distribution expanses packaging and labling expanses Other expenditure Total Expenditure profit before interst & tax Interest & other charges(net) profit before tax current tax tax net profit after tax 2011 49823359 2012 58374139 absolute 8550780 Percentage 17.16219093 3474418 46348941 3669340 54704799 194922 8355858 5.610205796 18.02815301 569000 1154285 101370003 578600 1514490 118841368 9600 360205 17471365 1.687170475 31.20589802 17.23524167 32083964 34400853 2316889 7.221330257 1004820 673495 990860 690000 65000 725639 102985 426700 1378510 829740 1000900 710000 690000 765163 127890 456700 373690 156245 10040 20000 625000 39524 24905 30000 37.18974543 23.19913288 1.013261207 2.898550725 961.5384615 5.446785523 24.18313347 7.030700727 1121268 37884731 63485272 1081115 2312434 42672190 76169178 1425555 1191166 4787459 12683906 344440 106.2338353 12.63690905 19.97928905 31.8597004 62404157 74743623 12339466 21841454.95 26160268.05 4318813.1 40562702.05 48583354.95 8020652.9 19.77346798 19.77346798 19.77346798 Trend analysis of profit and loss account for year 2011-12 PARTICULARS GROSS SALE/INCOME FROM OPERATION (less) Closing Stock Net Sales/Income from operation short term loans Other income 2011 49823359 2012 58374139 percentage 17.16219093 Trend 117.1621909 3474418 46348941 3669340 54704799 5.610205796 18.02815301 105.6102058 118.028153 569000 1154285 578600 1514490 1.687170475 31.20589802 101.6871705 131.205898 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 96. 96 total of income Expenditure Consumption of raw materials Purchase of traded goods Employees cost electricity expanses Advertisement insurarnce exp Depreciation distribution expanses packaging and labling expanses Other expenditure Total Expenditure profit before interst & tax Interest & other charges(net) profit before tax current tax tax net profit after tax 48072226 56797889 18.34836017 118.3483602 32083964 34400853 7.221330257 107.2213303 1004820 673495 990860 690000 65000 725639 102985 426700 1378510 829740 1000900 710000 690000 765163 127890 456700 37.18974543 23.19913288 1.013261207 2.898550725 961.5384615 5.446785523 24.18313347 7.030700727 137.1897454 123.1991329 101.0132612 102.8985507 1061.538462 105.4467855 124.1831335 107.0307007 1121268 37884731 10187495 1081115 2312434 42672190 14125699 1425555 106.2338353 12.63690905 40.8442693 31.8597004 206.2338353 112.636909 140.8442693 131.8597004 9106380 3187233 5919147 12700144 4445050.4 8255093.6 41.98201322 41.98201322 41.98201322 141.9820132 141.9820132 141.9820132 Comment: here trend analysis of profit and loss account shows that total income shall increase by 18.35 and total expenditure will increase by 12.63% and net profit will increase by almost 42% and hence we can say that company has a good growth. Common sized statement of profit and loss for year 2011-12 PARTICULARS 2011 49823359 percentage 2012 of net sales 107.4962187 58374139 percentage of net sales 106.707529 GROSS SALE/INCOME FROM OPERATION Closing Stock Net Sales/Income from operation short term loans Other income total of income 3474418 46348941 7.496218738 3669340 100 54704799 6.70752853 100 569000 1154285 48072226 1.227644015 578600 2.490423675 1514490 103.7180677 56797889 1.05767686 2.76847741 103.826154 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 97. 97 Expenditure Consumption of raw materials Purchase of traded goods Employees cost electricity expanses Advertisement insurarnce exp Depreciation distribution expanses packaging and labling expanses Other expenditure Total Expenditure profit before interst & tax Interest & other charges(net) profit before tax current tax tax net profit after tax 32083964 69.2226474 34400853 1004820 2.167945973 1378510 2.51990689 673495 990860 690000 65000 725639 102985 426700 1.453096846 143.6028986 1.488707153 0.140240529 1.565599956 0.222194936 0.920625134 1.51675907 140.971831 1.29787516 1.2613153 1.39871275 0.23378205 0.83484449 1121268 37884731 10187495 2.419187959 2312434 81.73807251 42672190 21.97999518 14125699 4.2271136 78.0044727 25.8216816 1081115 2.332555991 1425555 2.60590483 9106380 3187233 5919147 19.64743919 12700144 6.876603718 4445050.4 12.77083548 8255093.6 23.2157767 8.12552186 15.0902549 829740 1000900 710000 690000 765163 127890 456700 62.884525 Comment: here common sized statement of profit and loss shows that percentage of expenditure to net sales is almost same in both years while expenditures are decreasing in 2012 compared to 2011 and net profit compared to net sales in percentage is increasing in 2012. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 98. 98 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 99. 99 Structure of Human resources department and Study of organization structure company wise and department wise ( function wise departmentation) Board of directors General manager Production manager Marketing manager Human resources department Head personnel officer Finance manager personnel manager supervisor clerk  If we study the human resources department in simplified way then structure for Human resources department can be as following. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 100. 100 HR Department Head Personal Manager Personal Officer Supervisor Worker Clerk Peon Study of basis for departmentation  The organization structure, which Dhanhar Exim Pvt. Ltd. has, is the functional organizational structure. Now, firstly we will see what basically a functional organizational structure is?  Functional organization structure is basically divided into several functional areas (Dhanhar Exim Pvt. Ltd. Have 11). And the functional experts in that area, manages each functional area.  Each functional area will serve the other entire department in the organization.  For example, purchase department will handle all the purchase of all department and the head of the particular function will issue orders throughout the organization with respect his function only. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 101. 101  Thus we can say that an individual in company will receive instruction from several function heads. And every functional expert enjoys functional authority over subordinates in any department.  Now, if you see the organization structure given in the chart, it has basic four (4) main functional areas:1) Marketing 2) Production 3) Human resource 4) Finance  Now, it is very clear that all the departments including all supporting functional area, Dhanhar is following functional organizational structure. Each and every department of the company is provided or has an expert of that function suppose if you will take R&D department, it is having the expert in mechanical technology, who will do R&D for innovative results. We will further see that R&D department head has authority to issue any of the subordinates (according to type of work) irrespective of which department he belongs to. For example, Mr. Dhirubhai of R&D can ask store department clerk to issue materials required for R&D purpose. He can ask the subordinates of production department to come along with him and help him to do R&D work when trials has to be conducted. In this way any functional areas head has authority over the subordinates of other departments of other department with respect to its function only.  Apart from these four functional areas Dhanhar has following departments 1. Storage department 2. Research and development department 3. Purchase department 4. Accounting department 5. dispatching department BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 102. 102 Human Resource Planning Definition of HRP:  “HRP includes the estimation of how many qualified people are necessary to carry out the assigned activities, how many people will be available, & what, if anything, must be done to ensure that personnel demand at the appropriate point in the future.”  HRP is the process of getting the right number of qualified people into the right job at the right time. It is the system matching supply & demand of manpower. Time duration of HRP in the Dhanhar Masala Pvt. Ltd. Short Term Plan: 1 year Process of Human Resources Planning Organization Objectives & Plans Demand for human resorces from caapacity requrinment planning HR Programming ( supply of human resources and filling gap of number of employees or skils or knowledge) actions are taken which can be interms of recruitment, promotion, transfer , demotion or training) & allocation and utilisation of human resources Evalution and control BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 103. 103 Human resource planning process is important to making effective planning for personnel. The steps taken by Dhanhar Masala Pvt. Ltd. is describing below: 1. Organization Objectives & Plans  First they analysis the organizational plan it means see deeply future plan of the various department or organization.  Here they will determine the future activity taking care of finance, marketing and mainly production department.  If they are about to increase the level of production then they will do HRP for recruiting more causal workers. 2. Organization Objectives & Plans  Then after they forecast demand of manpower required in future they think which type of manpower demand is required is arise & which department and how much personnel is required .then they find sources of manpower.  Capacity requirement planning is also used here, for example if a worker can produce 100 kg tea Masala and if company want to produce 10000 kg in a particular month and they have to make 25 type of Masala in that month then they will require ( 10000/ 100) = 100 employees per day.  Here they don‟t have a scientific method for judging the demand, they just forecast the future production on the basis of experience and productivity through performance appraisal system and they determine the demand of employee. 3. HR Programming  Once the demand is decided then they forecast the supply of the manpower it means best sources is available to recruit the employee. Then they match the demand and supply of manpower.  Here supply can be determined through internal sources viz. promotion transfer or from external sources like for causal workers they use consultants and contractors and some housewives belonging to poor families.  Here they will determine the gap is well which can be in quality also or quantity also. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 104. 104  Where Surplus of hours or employee will result in to Reduced hours or causal employee  Where Shortages of hours or employee will result in to : Recruitment of causal employee.  Where for managerial executives lack of skills are filled through training by current managers and induction training program.  Where for managerial executives surplus of skills and potential are filled through promotion to managerial positions. 4. Action plans  Actions are taken which can be in terms of recruitment, promotion, transfer, demotion or training) & allocation and utilization of human resources.  Here implementation of HR programming part takes place. 5. Evaluation & Control  Evaluation & Control is the final phase in the HRP process. The HR plan should include budgets, targets & standards. It should also clarify responsibilities implementation & Control which will enable achievements to be monitored against the plan.  In this planning following points they take into consideration for its HR planning:  When HR needs arises.  Which type of manpower is required in future?  Source of required manpower available for the organization in future.  Is any diversification is done in the organization in short term OR in long term. Recruitment Definition of Recruitment  “Recruitment is the process of finding & attracting capable applicants for employment. The process begins when new recruits are sought & ends when their applications are submitted. The result is a pool of applicants from which new employees are selected.” BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 105. 105 Process of the Recruitment for causal workers There are four steps for the Recruitment process of workers at the Dhanhar Masala Pvt. Ltd., which are below here Planning (number of employee and type of employee) sources for recruitment are found (internal or external) searching for the causal worker Evaluation & Control 1. Planning:  Planning is the first step of the Recruitment process. Planning‟s involves the translation of likely job vacancies & information about the nature of the job.  Dhanhar Masala, Recruitment planning deals with the type of the employee which is causal worker which can do day to day production and no special qualification is required.  Here number of workers which are needed are also determined which is the part of capacity requirement planning also.  Here according to production requirement and possibility of getting worker are taken care off. 2. Sources of recruitment  Here Dhanhar will find out causal workers from the various sources of recruitment which are explained in details in later part.  These sources are as following….. a. Internal source: reference of present employees and former causal workers BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 106. 106 b. External sources: walk ins and write ins, contractors, competitors, trade associations. 3. Searching  Here company searches for the causal workers from the above internal and external sources.  Here company searches the employee and they try to convey the employees to work in the organization for a long period. 4. Evolution and control  Evaluation & Control is necessary as considerable costs are incurred in the recruitment process. Statistical information on the time taken for the process, salaries for recruiters, time spent on preparing job description, job specifications, Recruitment overheads & administrative expenses. Process of the Recruitment for managerial vacancies Planning (number of employee and type of employee) strategic Development {sources for recruitment are found (internal or external) , make or buy decision and technological decision} searching and screening ( for managerial possitions) Evaluation & Control There are four steps for the Recruitment process of workers at the Dhanhar Masala Pvt. Ltd., which are below here BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 107. 107 1. Planning:  Planning is the first step of the Recruitment process. Planning‟s involves the translation of likely job vacancies & information about the nature of the job.  Dhanhar Masala, Recruitment planning deals with the type of the employee which is causal worker which can do day to day production and no special qualification is required.  Here number of workers which are needed are also determined which is the part of capacity requirement planning also.  Here according to production requirement and possibility of getting worker are taken care off. 2. Strategy Development: Once it is known how many & what type of recruits are required serious consideration needs to given to: i) “Make or Buy” decision  “Buy” means hired skilled workers & professionals. It employees has the advantage in the sense that the skilled professional & labour can be the work immediately & little training in terms of induction training may be needed.  Make decision means promoting the lower level employee to higher position and giving them training and making them capable for higher position.  At Dhanhar, they only Buy the employee for higher positions. ii) Where to and how to look ( Sources of recruitment)  Here Dhanhar will find out managerial workers from the various sources of recruitment which are explained in details in later part.  These sources are as following….. a. Internal source: reference of present employees and former causal workers b. External sources: walk ins and write ins, contractors, competitors, trade associations. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 108. 108 iii) Sequencing the activities in the recruitment process  Company also looks at what time they have to recruit besides knowing where and how to look for the job applicants. 3. Searching and Screening:  Here company searches for the managerial employees from the above internal and external sources .Here company searches the employee and they try to convey the employees to work in the organization for a long period.  Screening is to remove from the recruitment process, at an early stage, those applicants who are visibly unqualified for the job. It screening, clear job specifications are invaluable. Applicant qualification judged on the basis of their knowledge, skills, abilities & interests required to do the job. 4. Evaluation & Control:  Evaluation & Control is necessary as considerable costs are incurred in the recruitment process. Statistical information on the cost of advertisements, time taken for the process, salaries for recruiters, time spent on preparing job description, job specifications, Recruitment overheads & administrative expenses. SOURCES OF RECRUITMENT Dhanhar use both internal and external sources which are as follow in detail. A. Internal source  Dhanhar uses internal source when they need more employees in short period of time. 1. Relative of present employees or employees reference  It is important internal source of Dhanhar. Dhanhar use this source when it requires argent employees for production at low cost. A major concern with employee recommendation is that the referred individuals are likely to be similar in type to those who are already working for the company. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 109. 109 2. Promotion and transfer This Pharmacy often uses promotion and transfer for vacant sits. This is a good source of internal recruitment. Promotions to hire positions are advantigable for pharmacy by various kinds. Another way to recruit from preset employee is transfer without promotion. Pharmacy uses it when other branch has required skill and experienced employee. 3. Former employee Former employees are also an internal source of applicants. Some retired employees may be willing to come back to work on part time bases or may recommend someone would be interested in working for the pharmacy. B. External sources External sources far outnumber the internal methods. Specifically, sources external to a pharmacy are: 1) Advertisement  Advertisement is one of the important source of recruitment of Dhanhar Exim Pvt ltd. Company use newspaper and FM Radio as a tool of advertisement. 1. Newspaper ads are very useful because it give a brief outline of the job and this ads are used to recruit executive employee and These people are always read news paper so news paper is effective for recruit executive employee. 2. FM Radio is useful for recruiting causal employee and unskilled employee. Because it may be possible that, they may not read ads in newspaper so that‟s why company gives ads in FM radio for recruiting casual worker. 2) Consultants and Labour Union  In Company, labour unions are being used as source of recruitment for lower level job. Many such union leaders are cooperative and constructive can be promoted to supervisory role. Unions are asked to make recommendations for employment of people as a matter of goodwill and cooperation. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 110. 110 3) Gate Hiring  Gate hiring is quite useful and convenient method in company when large number of such people may be required by the company. Company uses this source for unskilled and semiskilled worker. 4) Walk ins, talk ins and write ins  Many time Dhanhar gets Walk ins, talk ins and write ins for various jobs which can be through personal visit, telephonic transaction or letters and when company feels the need of employee they use these sources. Selection Meaning of selection:  Selection is the process of picking individuals (out of the pool of job applicants) with requisite qualification & competence to fill jobs in the organization.  The objective of selection process is to determine whether an applicant meets the qualifications for a specific job & to choose the applicant who is most likely to perform well in that job.  Selection is the most important process of the any Company and Industry. Selection is the base of choose best workers and employment for the Industry. Process of the selection at Dhanhar for managerial positions: There are five types of the Recruitment process uses in the Dhanhar Masala Pvt. Ltd., which are below here: BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 111. 111 Preliminary Interview application blank Selection Test ( situation and projective test) Employment Interview ( panel interview in mostly case) Reference Check physical examination( to avoid labour turn over and absentism) job offer for six months employement for permenant basis 1. Preliminary Interview:  Preliminary Interview is the first step of the selection process in Dhanhar Masala.  It helps in rejecting undesirable and unqualified candidates.  Here necessary information of employees about education, skills, experience and expected salaries etc. are taken.  It will help in determining whether it is worth wile for a candidate to fill up the application form or not.  Preliminary interview helps in rejecting misfits for the job, which did not appear in the application forms. 2. Application blank  When employees come for job or apply for the job, he has to fill one blank form which includes all basic details about him. This form is known as application blank. By this BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 112. 112 form company collect basic detail about applicant. H R Manager analyzes that form and selects some applicant for further process.  This form include following item: i. Name ii. Address (permanent residential address) iii. Address (native place address or address of person who gave the referance) iv. Contact no. of both addresses v. Educational qualification vi. Work experience vii. Physical features like height, weight etc viii. Where he worked last (address) ix. Expected salary 3. Selection test:  Generally test is used to determine the applicant‟s ability, aptitude and personality. Different type of tests is taken in Dhanhar Masala, which are as follow. a. Situation test: based on situation handed to candidate and rating them on the based on the performance. b. Objective test c. Behavior test: The attitude and behavior is also check along with work test. During the days of work test applicant‟s behavior is supervise by assistant manager (HR). How applicant is behave with other employee, Nature of applicant, Attitude, etc. are check during behavior test. 4. Employment Interview:  An interview test is conducted at the beginning and at the end of the selection process. The emphasis here is on the latter .Different types of interview in the Dhanhar Masala Pvt.Ltd Which are as follow. a. One to one interview b. Panel Interview which includes panel of members from top management. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 113. 113 5. Reference Check:  Reference check is the most important step in the selection process. Many employee request name, address and telephone No. of reference for purpose of verifying information and perhaps, gaining additional background information on an applicant. 6. Physical Examination:  In this step, Physical Examination of applicant is carried out to ascertain his physical fitness for the job .It will reduces the rates of absenteeism, accidents, & labor turnover. The result of medical fitness test is recorded in a statement preserved in the personnel records. 7. Job Offer for six months:  After Physical examination, a list of suitable applicants is prepared. The list is sent to the line manager who required the personnel. He offer right job to suitable applicants. An Applicants formally approved by the manager concerned are appointed by the issuing appointment letter.  Here job is offered for six months and are under the strict observation. 8. Job Offer for six months:  Here if performance of worker is found satisfying in 6 months and if employee is also ready for job then he is offered the job for permanent time. Selection procedure of causal Workers  From All the applications it receives, the personnel manager will screen out inappropriate candidate on the basic of criteria they have formed. Generally criteria for worker selection include as through which person, the candidate has come past jobs, past records, qualifications and experiences etc. From all applications after screening out, personnel manager will call the candidate to the company, may 4-5 persons a day but basically depends upon the circumstances. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 114. 114  Personnel manager and one of the directors will take informal interview with workers. But mainly selection of workers depend upon his practical knowledge and how efficient he is on the specific job so the candidate is required to do some job on particular machine after giving some instruction. If he will be able to give results as desired or according to criteria set by personal manager. So the candidate satisfies all the criteria, he will get the job, and afterward also up to one month they will see the performance of worker and if found satisfactory, he will continue on the job otherwise may reject the person.  So we can have general steps for selection process for non technical staff. general application recieved screening informal interview job offer for permenant basis job offer for 1 month practical testing of worker on a machine Documents Related to Recruitment and Selection Dhanhar have following kind of document for recruitment and selection:  Application blank  Wages structure  Appointment letter  Agreement between company and employee BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 115. 115 Job Description: Job Description is a written statement showing job title, tasks, duties and responsibilities involved in a job. It also prescribes the working conditions, hazards, stress that it can produce and the relationship with other jobs. Flippo has defined job description as follows.  “A job description is an organized, factual statement of duties and responsibilities of a specific job. In brief, it should tell what is to be done, how it is done and why. It is a standard of function, in that it defines the appropriate and authorized content of a job.”  At Dhanhar Masala, H R Manager is not prepared any kind of documents related to job description. He just gives as brief idea about tasks, responsibilities, working condition, and facility. A. Job description for Human resources manager 1. Job Title: Human Resources Manager 2. Reports to: General Counsel 3. Department: Legal/Human Resources 4. Division: Administration 5. Salary Grade: I 6. Package Plan plus: Yes 7. Salary : 400,000 per a.n.m 8. Working days: 6 days in a week 9. Working hours: 11.00 A.M. to 5 P.M. 10. Position summary:  The Human Resources (“HR”) Manager has overall responsibility for the HR function as it relates to all CA team members, including employee relations, compensation and benefits administration, development, implementation and administration. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 116. 116  Human resources programs and employment policies, personnel record-keeping, workers compensation and team member safety issues, training and workforce development, and compliance with HR laws and regulations.  Employment policies in the contexts of hiring, discipline, employment termination, training, compensation, benefits, leave, equal opportunity and other human resources issues. The HR Manager must be open and available to discuss human resources matters with the entire workforce. 11. JOB RESPONSIBILITIES:  Maintain knowledge of and ensure compliance with employment-related laws and regulations.  Manage actions and proceedings brought against Dhanhar arising in connection with employment, benefits and workers compensation issues.  Maintain all personnel files, ensure DHANHAR is in compliance with all laws and regulations and demonstrates “best practices” in regard to personnel information management.  Provide leadership in effective conflict resolution for all personnel.  Work with senior management to craft consistent, equitable and competitive compensation and incentives.  Serve as a resource for team leaders in handling employee issues and assist them in counseling employees, conducting evaluations, staff training, problem-solvingand consensus-building.  Serve as a resource for all team members by being available and accessible to discuss all human resources related issues.  Oversee the Organizational Development & Training function and develop employee training programs.  Maintain inter- and intradepartmental work flow by providing information to and Cooperating with co-workers.  Assist in hiring by providing job descriptions and advertisements.  Develop, implement and participate in employee recognition programs. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 117. 117  Enhance job performance by applying up-to-date professional and technical knowledge gained by attending seminars and conferences and reviewing professional publications. B. Job description for marketing manager 1. Job Title: Marketing Manager 2. Reports to: Department Head of Finance, HR and Production 3. Department: marketing/ sales 4. Division: Administration 5. Salary Grade: I 6. Package Plan plus: Yes 7. Salary : 370,000 per a.n.m 8. Working days: 6 days in a week 9. Working hours: 11.00 A.M. to 5 P.M. 10. Responsibility  Develop pricing strategies, balancing firm objectives and customer satisfaction.  Identify, develop, and evaluate marketing strategy, based on knowledge of establishment objectives, market characteristics, and cost and markup factors.  Evaluate the financial aspects of product development, such as budgets, expenditures, research and development appropriations, and return-on-investment and profit-loss projections  Formulate, direct and coordinate marketing activities and policies to promote products and services, working with advertising and promotion managers.  Direct the hiring, training, and performance evaluations of marketing and sales staff and oversee their daily activities  Negotiate contracts with vendors and distributors to manage product distribution, establishing distribution networks and developing distribution strategies  Consult with product development personnel on product specifications such as design, color, and packaging. And Compile lists describing product or service offerings. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 118. 118  Use sales forecasting and strategic planning to ensure the sale and profitability of products, lines, or services, analyzing business developments and monitoring market trends.  Initiate market research studies and analyze their findings.  Conduct economic and commercial surveys to identify potential markets for products and services. 11. Activities  Making Decisions and Solving Problems -- Analyzing information and evaluating results to choose the best solution and solve problems.  Selling or Influencing Others -- Convincing others to buy merchandise/goods or to otherwise change their minds or actions.  Communicating with Supervisors, Peers, or Subordinates -- Providing information to supervisors, co-workers, and subordinates by telephone, in written form, e-mail, or in person  Processing Information -- Compiling, coding, categorizing, calculating, tabulating, auditing, or verifying information or data. C. Job Description for Finance manager 1. Job Title : Finance Manager 2. Reporting To : Department head of Marketing, HR and production & purchase 3. Department : Finance & accounting 4. Division: Administration 5. Salary Grade: I 6. Package Plan plus: Yes 7. Salary: 390,000 per a.n.m 8. Working days: 6 days in a week 9. Working hours: 11.00 A.M. to 5 P.M. 10. Responsibility BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 119. 119  Develop and analyze information to assess the current and future financial status of firms.  Evaluate data pertaining to costs in order to plan budgets.  Oversee the flow of cash and financial instruments.  Prepare financial and regulatory reports required by laws, regulations, and boards of directors.  Communicate with stockholders and other investors to provide information, and to raise capital  Analyze and classify risks and investments to determine their potential impacts on companies.  Examine, evaluate, and process loan applications.  Review collection reports to determine the status of collections and the amounts of outstanding balances.  Review reports of securities transactions and price lists in order to analyze market conditions.  Submit delinquent accounts to attorneys or outside agencies for collection. 11. Activities to be performed  Prepare monthly management accounts for the organisation and individual depots, including variance analysis  Supervise bank reconciliations, petty cash, expenses  Supervise VAT quarterly returns,  Assist in preparing yearly budgeting and cash flow forecasts  Assist in preparing draft yearend financial accounts prior to audit  Maintain and develop sound accounting systems. D. Job Description for Accountant 1. Job Title : Accountant 2. Reporting To : Head of Finance department 3. Department : Finance BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 120. 120 4. Time : 10 A.M to 6 P.M 5. Working Days : 6 in Week and Holiday on Sunday 6. Salary : 10000 to 18000 per month 7. Salary Grade: II 8. Package Plan plus: No 9. Responsibility and Duties:  Prepares asset, liability, and capital account entries by compiling and analyzing account information.  Documents financial transactions by entering account information.  Recommends financial actions by analyzing accounting options.  Summarizes current financial status by collecting information; preparing balance sheet, profit and loss statement, and other reports.  Substantiates financial transactions by auditing documents.  Maintains accounting controls by preparing and recommending policies and procedures.  Guides accounting clerical staff by coordinating activities and answering questions.  Reconciles financial discrepancies by collecting and analyzing account information.  Secures financial information by completing data base backups.  Maintains financial security by following internal controls.  Prepares payments by verifying documentation, and requesting disbursements.  Answers accounting procedure questions by researching and interpreting accounting policy and regulations.  Complies with federal, state, and local financial legal requirements by studying existing and new legislation, enforcing adherence to requirements, and advising management on needed actions. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 121. 121  Prepares special financial reports by collecting, analyzing, and summarizing account information and trends.  Maintains customer confidence and protects operations by keeping financial information confidential.  Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; participating in professional societies.  Accomplishes the result by performing the duty.  Contributes to team effort by accomplishing related results as needed. E. Job description for Computer Operator 1. Job Title : Computer operator 2. Reporting To : Head of Finance department, Production department 3. Department : Finance and production 4. Time : 10 A.M to 6 P.M 5. Working Days : 6 in Week and Holiday on Sunday 6. Salary : 7000 to 12000 per month 7. Salary Grade: III 8. Package Plan plus: No 9. Responsibility and Duties:  Oversee maintenance and operation of computer hardware systems.  Control console of mainframe digital computer or set of minicomputers.  Set controls on computers and peripheral devices.  Maintain logbooks or records for job runs.  List malfunctions that occur during shift.  Perform maintenance tasks such as checking for viruses, backing up tape, upgrading software, and other basic maintenance.  Assist programmers and analysts with testing and debugging new programs. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 122. 122  Monitor systems remotely.  Locate and solve other malfunctions.  Load files onto storage media.  Help network administrators ensure network connections are in place.  Ensure network and servers are functioning properly.  Connect computer peripherals for users.  Help new employees get their computer running.  Clear equipment at end of operating run and review schedule.  Notify supervisor or computer maintenance technicians of equipment malfunctions.  Retrieve, separate and sort program output as needed, and send data to specified users. Job specification: Job specification is also known as man or employee specification, is a statement of minimum acceptable qualities required in a job incumbent for the effective performance of the job. In contrast to job description which provides various features of the job, job specification specifies various feature of the job holder.  Flippo has defined job specification as follow: “Job specification is a statement of minimum acceptable human qualities necessary to perform a job properly ….. It is a standard of personnel and designates the qualities required for acceptable performance.” A. Job specification for Human resources manager Educational qualification, experience  Master‟s degree in HR Management or related discipline required; Master‟s degree preferred.  At least 5 years of professional experience across all HR disciplines, including employment, benefits, compensation, employee relations, training and development, workers compensation and conflict resolution.  Experience working with a diverse workforce.  Fluency in English as a second language preferred. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 123. 123 B. specification for marketing manager Educational qualification, experience  Master‟s degree in Management specialized with marketing or related discipline required; Master‟s degree preferred.  At least 5 years of professional experience and Knowledge of principles and methods for showing, promoting, and selling products or services. This includes marketing strategy and tactics, product demonstration, sales techniques, and sales control systems.  Knowledge of administrative and clerical procedures and systems such as word processing, managing files and records, stenography and transcription, designing forms, and other office procedures and terminology.  Experience and knowledge of principles and processes for providing customer and personal services. This includes customer needs assessment, meeting quality standards for services, and evaluation of customer satisfaction C. specification for Finance manager Educational qualification, experience  Ideal candidates will have a formal accountancy qualification (full or part qualified) from a recognized accountancy body.  A minimum of five years experience in a similar role.  Excellent Excel, QuickBooks and MS office skills.  Knowledge of economic and accounting principles and practices, the financial markets, banking and the analysis and reporting of financial data. D. specification for computer operator Educational qualification, experience  Educational qualification includes any bachelor degree in management or commerce. for eg Bcom or BBA or Mcom.  Should know operating current version of Tally.  No experience are required, fresher‟s are also welcomed. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 124. 124 E. specification for Accountant Educational qualification, experience  A minimum of a Bachelor‟s Degree with an emphasis in accounting.  At least two years of experience in the area of financial statement preparation, budgeting, payroll, purchasing, accounts payable, and accounts receivable, or the equivalent.  Experience working with an automated financial management system. Performance Appraisal System  A failure in the life general and acceptable but not to correct the mistakes is a big mistake. So in this way performance appraisal is very necessary in order to find out the mistakes we have done i.e. we have to appraisal performance, and make it on the right path before it too late.  So shell we see what really performance appraisal is in the human resource system of company? Performance appraisal is basally a systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development.  Today Dhanhar have too much of competition and one mistake can make Dhanhar out of market.  Dhanhar has following system for performance appraisal. Process of the Performance Appraisal There are Six types of the Recruitment process uses in the Dhanhar Masala Pvt. Ltd., which are below here: BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 125. 125 Establishing Performance Standards ( which are different for sales person and production workers and executives) Communicating the Standards (informed to respective department and employees) Measuring Performance Comparing the Actual with the Standards ( comparision with other employees are also done) Reasons for deviations are found and discussion for the Appraisal Taking Corrective Actions are taken by improving standard or puting right placement or improving the situation 1. Establishing Performance Standards  Dhanhar Masala has determined the following performance standards…..  These process starts with setting performance criteria to be used for appraising the performance of employees. The criteria are specified with the help of job analysis which reveals the contents of a job. These criteria should be clear, objectives in writing.  The employee must have to come timely and employee has to follow the rules made by the company and government. Employee not goes outside the plant or site without the permission of his superior or authority. In the organization this rules touch every person who work in the firm. Performance appraisal criteria for Dhanhar employees PARAMETERS Points to be considered BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 126. 126 Quality of work Least number of errors identified. Attendance Time keeping: Shift timing (Dhanhar Masala Pvt. Ltd. has only one shift that is day shift and time is: 9 a.m. to 8 p.m.) Break(12.30 to 1.30 p.m. lunch break) Customer Focus 1. Subject knowledge/Knowledge of project 2. Aware of client requirement. 1) Behave in a professional manner at work place and Discipline follows company‟s policies. 2) Busy with own work and not leaving the chair. 3) Dress code. 4) Maintaining office discipline like putting off light and AC when not in use. Responsibility 1) Take responsibility of work execution. 2) Completion of targeted work in time. 3) Setting target. Take Initiative 1) Take initiative at work 2) Generation of new inquiry and getting new work order. Leadership skill 1) Inspires and motivates team member and juniors. 2) Work planning and organizing abilities. 3) Ability to develop team member/juniors 4) To create positive work environment Communication skill 1) Is able to understand and communicate in appropriately with all levels of the organization. 2) Talking politely. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 127. 127 3) Attempt to talk in English. 2. Communicating the standard  The parameter set by manager is communicated with employee and examiner. If there is any problem with parameters and need to improve than send back to H R Manager and improve it. Well communicated parameter is helpful to making performance appraisal process prefect. If the parameter is communicate than employees can know that how they have to behave. 3. Measuring the performance  Performance is measured according to the parameters set by specialist. Production manager note down the data received actually in the form in which the standard is already written. He put the original data in front of the standard.  Here performances are measured in such way that it can be measured with other employees also. For example kilograms of tea Masala produced by employee X. 4. Comparing actual performance with the standard  The data received actually is compare with the standard data. If it is less than standard than the performance is not good and vice versa.  Here performances are measured with other employees also. 5. Reasons and discussion  Here reason for deviation is found and whose mistake was it. For example break in machinery was problem or wrong methodology of worker etc can be a reason.  Here whatever reason is found then discussed with employees and if needed then it is discussed with top management is well for training purpose or purchase of new technology. 6. Correction BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 128. 128  When the result is achieved, the result is needed to communicate with employee. There is meeting between employee and examiner or H R Manager, he tell the result to employee. If the result is bad, than examiner give guidelines to improve the performance in positive manner.  Here if problem with standards are found then standards are improved. PERFORMANCE APPRAISAL FORM DHANHAR EXIM PVT LTD  Employee Name:  Department:  Designation:  Date and time:  Name of the appraiser: Sr.No. Parameters Excellent Very Good Average Good 1 Quality of work 2 Attendance 3 Customer Focus 4 Discipline 5 Responsibility 6 Take Initiative 7 Leadership BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT Poor Remarks if Any
  • 129. 129 8 Communication Skill 9 Dependability 10 Other curricular activities Total Rating Sign of the appraiser: Sign of the worker:  Note: Here for managers and employees same form is used and if some parameter is not related to that job it is kept blank. Employee Welfare activities  Welfare activities, before 20 years was never priorities for the companies. Their only aim was to earn maximum bucks and human talents are just more the source likes raw material, technology etc., which they exploit as much as they can and make fortune for their companies. They believe employee according to „x‟ theory.  But in 1990s, whole scenario was changing, global and the companies soon to realize the power of human assets and how motivated human assets can change their fortune for the company. So the companies stated investing more in building human assets by providing various incentives, welfare activities etc. because of employee is able to give its 100% output to company.  So, that is how welfare activities for employees marks fortunes for the company, what welfare activities its employee to retain its no-1 position at Dhanhar Masala Pvt. Ltd., which are as following 1. It is providing cold and fresh drinking water from the better, the production area for the workers and even they are purchasing 30 litters can of mineral water for its BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 130. 130 workers at AshwiniKumar layout and 10 litters for staff members and customers at Bhagal administrative office. 2. Proper ventilation space is providing in each department in the organization. 3. Group mediclaim has been taken by Dhanhar Exim Pvt. Ltd for uncertainties in the factory premises. Even they have taken ESI (employee state insurance) for in staff member. 4. PPF for its staff member is also given by the company. Who has the salary lees than Rs.7500. it cuts salary of these people by 12.5% and adds the same from their side? 5. For safety, the company has provided first aid kit for its workers in each department. 6. For the social upliftment of the worker‟s family, they even provide notebooks and stationary free of cost every year. 7. For sales persons they provide two wheelers for taking orders and receiving payments. 8. They have provided the reliance mobile to mostly all the staff members for internal talk. 9. Provide good condition of equipment and also provide better environment for work. 10. Company provides individual changing room and a common rest room. Employees records kept 1) Attendance records 2) Wage and salary register 3) Recruitment and selection related records 4) Training and development record 5) Compensation details Training and development  As we already know the basic difference between the training and development i.e. Training is given to employee for doing specific job by giving knowledge of specific skills and development on the other means overall increase in talent, so that employee BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 131. 131 can handle any future jobs, which marks its future bright. So, there is vast difference between training and development. Generally training is given at the workers level, where one just requires specific skill for completing a specific task. But development is needed at the executive level, where one has to live in dynamic and ever-changing environment, so today every company are investing heavily in training and development of employees as they have realized that what is needed to on the pinnacle of this world.  Now we will see how Dhanhar Exim Pvt. Ltd. is satisfying the training and development needs of its employees.  At the workers level, they are not recruiting any person from outside for the training of workers. They basically rely on existing workers. Which is the workers level from quite some years to give training to fresher workers, on in charge of that particular work will give training to the new worker. But for specific requirement they even higher professionals for the training of their workers. For e.g. they will hire the person to train the workers of Dhanhar Exim Pvt. Ltd .  If we talk about staff members‟ particularly technical side and management side fresher are given training by the senior members some time higher professionals, if they found necessary. Time period for training of new entrants is generally 7 to 10 days. How training needs are identified for existing employees?  Training: - the very important aspect for developing a specific skill mostly the worker for workers class but that is doesn‟t mean that staff member or management people don‟t required any training.  We will see now how Dhanhar Exim Pvt. Ltd. is identifying the training needs and how they will fulfill it. 1) When the wastages in some section increase than the prescribed limit them they identify the worker from the document they keep and if required, they offer training, mostly from senior people. 2) When the work of some document because slow then they will try to find out the reason behind it (reasons may faulty method of working, workers laziness, worker, inefficiency etc.) and give training properly. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 132. 132 3) Now coming on to the management employer, it management employer found that managerial worker is not working efficiently for e.g. the some head is not able to deal with the problem for task effectively. Then management try to solve this problem by giving required training and sometimes even that person will ask the management that he went such and such training for the development of his skills. For e.g., that if purchase manager of Dhanhar Exim Pvt. Ltd., is not able to negotiate price with the supplier effectively and purchasing products at higher prices. So the management will hire a professional for developing his negotiation skills or they will send him to search type of training programs or seminars etc. So this now training need are identified and solved by Dhanhar Pvt. Ltd. which can be summarized as following 1) When quality level will not maintained. 2) There is conflict between employees. 3) New technology is coming. 4) Install new machinery. 5) Need to increase the productivity. Induction Training  Induction or orientation program is held in the Dhanhar Exim Pvt Ltd whenever new employee has to undergo 2 to 3 days induction training. In case of worker joining the company, supervisor undertakes 3 to 4 days induction training. Worker is given guidelines about the company rules and regulation and also he is given training about how to operate the machine. Induction or orientation program, at officer level, is undertaken by the manager of concerned department. Manager gives guidelines about the policies of company and manager introduces employee to training to their subordinate.  The following step is followed by HR Manager during induction training. 1) Meet the new employee in his office personally 2) Give them necessary detail about the organization 3) Understand them the rules and regulation of the organization 4) Take him to his superior and subordinate and introduce him (employee) with them BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 133. 133 5) Provide him tools and other necessary item Following details are given to the new employee 1) History of Dhanhar Masala 2) Name and designation of managers 3) Employee‟s designation and responsibility 4) Layout of department 5) Production and other processes of Masala making. 6) Job duties, location, tasks, objectives etc 7) Safety steps 8) Employee benefits such as pays, holidays, welfare activities 9) Introduction to superiors, coworkers and other staff LABOUR RELATION  As know by every one employer are the most valuable assets of the company and they works in a group and where there is a group, these comes communication interaction and this creates relations, rather good or bed. Relation is every company needs to be very good and mature to make company reach at the acme of success.  As we already said earlier that Dhanhar Exim Pvt. Ltd. is small-scale unit, they have around 100 workers and 50 staff members, so they don‟t have any trade union or any such association in the organization.  Now, we quickly move on to the topic of labour relation, labour relation basically means the relation between the management (employer) and worker (employee). But if see it in broader aspect, state is also involved which protects and interests 5 of both employees and employers by making some rules and policies etc.  So, we will see, as usual, in the context of Dhanhar Exim Pvt. Ltd. seeing the fantastic relationship between the management and employees may flabbergast one. We think that it might not be true, so we will like o give you one e.g., which we have observed, in factory premises. There was water tank, and management person has just taken the glass of water and when worker from production department came, the first give a glass of water to the worker and put one‟s arm on his shoulder. This is the only one example we BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 134. 134 have discussed there are lots of such example of this kind. So we can say that from this discussion that management people are very cordial in dealing with workers.  Another reason for the excellent relationship can be attributed to the background of the workers. As being from some religion, there is very less conflict among them. Most of the workers at here are from „Patel‟ community and basically from same society so they better understand each other‟s need.  Thus, the entire staffs of this company are very co operative with each other like family member. Objective of industrial relationship at Dhanhar Exim o Develop a sense of co-operation. o Develop commitment and sense of belongingness. o To protect and safe guard the interest of labour as well as management. o To promote and maintain industrial peace and harmony. o To ensure and establish industrial democracy. o To increase production as well as productivity. o To improve living standard of workers by pay of fair wages, benefits and provision of better living and work condition. Promotion and demotion policy Promotion  Promotion refers to a higher post carrying greater responsibilities, higher status and best salary. It is the upward movement of an employee in the organization‟s hierarchy to another job commanding greater authority, higher status, and better working condition.  In Dhanhar Masala promotion is done on seniority plus work or merit basis. The worker who has worked minimum 5 years and who performs well, work efficiency is good will be promoted as motivation.  Promotion is mainly done as increase salary if the vacancy in higher post than employee will be promoted on higher post. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 135. 135 Promotion in Dhanhar Masala is as follow:  The decision of promotion is taken by every department manager.  For managerial post, decision is taken by top management.  There are mainly three ways of promotion: 1) Increase in salary 2) Send to higher post with increase in salary 3) 10 % bonus salary every year  If the employee is good, hard working and have more ability than he will be promoted but he must be 5 year senior.  If there is no vacancy in higher post than promotion will done as increase in salary.  Every employee gets 10% extra of salary every year as promotion.  Promotion will be done by proper analysis of annual data of employee, work record, behavior, etc. Demotion  Demotion is the downward movement of employee from up position to down position with decrease in salary. Demotion is done because of following reason: 1) If the quality of work done by employee is very poor after training also not improving. 2) If he will not regular, here Dhanhar allows 4 leave in a month and if a worker breaks the limit of 4 leave for 3 times in a year then he/ she will be demoted. Here Dhanhar has made demotion policy but they don‟t believe in demotion. Wage and Salary Administration  Wages represent hourly rates of pay & Salary means monthly rate of pay, irrespective of the number of hours put in by the employee. Wages and Salaries are subject to annual BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 136. 136 profit. They differ from employee & depend upon the job – nature, seniority & merit. Wages & Salary, both are part of Components of Remuneration. There are three policies of the Wages, Which are below here:  Minimum Wage  Fair Wage  Living Wage  A minimum wage should provide for workers family, for his efficiency, for the education of his family, their medical cure. Minimum Wage 3000 at the Dhanhar Exim Pvt. Ltd.  A fair wage should provide for productivity of labour, place of industry in the economy of a country, prevailing rates of wages. Fair Wage 4000 in the Dhanhar Exim Pvt. Ltd.  A living wage should provide for forms the basis for fixing minimum wage, capacity of the industry to pay. Living Wage 6000 in the Dhanhar Exim Pvt. Ltd. There are two methods of the Wage Payment, which are uses in Dhanhar Exim Pvt. Ltd.  The basic purpose of wage and salary administration is to establish and maintain an equitable wage and salary structure and an equitable labour cost structure.  At Dhanhar Exim Pvt. Ltd. The wage and salary administration according to both „Time Wage System‟ and „Piece Wage System‟. For the workers, it applies piece wage system and for the administration staff, it applies time wage system. Methods Depended Time Wage Depended on the time for Administration Executives Piece Wage Depended on the piece (unit) for Workers BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 137. 137 Wages and Salaries structure in the Dhanhar Exim Pvt. Ltd.:  Company‟s wages and salaries are paid by incentives and also called payment by result. Incentives are depend open the productivity of the employee.  Here a worker have to produce minimum 1000 pieces a day and 2000 pieces are the limit for the time wage system and number of pieces produced above 2000 units are paid 1 rupee for 1 unit. Productivity of workers Salaries 1000 to 2000 units 3000 2000 to 3000 units 4000 3000 to 3500 units 4500 3500 to 4000 units 5000 4000 to 5000 units 6000  This is a structure of paying salaries in the Dhanhar Masala Pvt. Ltd.  Fix grade salary system is applicable for the employees like managers,human resource and account department staff, security, peons and cleaning staff. Employees Salary Level* (Rs. Per Month) Departmental Manager 25,000 – 35,000 Computer Operator 6,000 – 9,000 Security Staff 4,000 – 6,000 Peons 4,000 – 6,000 Cleaning Staff 4,000 – 6,000 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 138. 138 Compensation packages  Compensation function is refers to providing & fair remuneration to employees for their contribution to the attainment of organizational objectives  At Dhanhar Exim Pvt Ltd, The pay package of executives and employees consist of several components of compensation are such as follow. 1. Basic Pay:  The primary part of pay package in Dhanhar Exim Pvt ltd is same for executives and for workers. That is Basic Salary for Administrative Executives.  Basic wage are provided on work done (piece wage system), for lower level and unskilled employees  For Administrative Executives and managers Basic pay is fixed salary based on time wage system.  Company pays basic salary and wage based on relative worth of job. 2. Bonus:  At Dhanhar Exim Pvt ltd , Every employee is paid with a minimum bonus of 8.33% of the basic salary of an employee and the bonus is to be paid within 6 months from the close of the accounting year.  Some bonus amount is also given at the time of Diwali 3. Allowances:  In Dhanhar Exim Pvt Ltd, mainly two types of allowances are paid in addition to Basic pay.  Conveyance Allowances: Dhanhar Exim Pvt ltd also pay conveyance allowances to those employees who go for out of city or in intra city for business purpose. 4. Incentive:  At Dhanhar Exim Pvt Ltd Incentive compensation system is performance linked remuneration paid with a view to inspire employees to work hard and do better. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 139. 139  In starting of shift, Company decide some target to employee, those employees are successes to achieve target, these employees are able to get incentive if not they are not able to get incentive. 5. Fringe benefit:  At Dhanhar Exim Pvt. Ltd. also provide fringe benefit for such top employee these benefits are as follow. 1) Provident fund 2) Gratuity 3) Medical care 4) Hospitalization 5) Accident relief 6) Health and group insurance Incentive system Concept of incentive  Incentives are given in this competitive world to retain the employ in the organization, which was not the trend in the past. Incentives are the reward received by a worker who is performing extra to what other is performing. It gives the motivation to the employees to more efficiently and effectively.  Incentives are depend open the productivity of the employee.  Here a worker have to produce minimum 1000 pieces a day and 2000 pieces are the limit for the time wage system and number of pieces produced above 2000 units are paid 1 rupee for 1 unit. Productivity of workers Salaries Productivity of workers Salaries 1000 to 2000 units 3000 3500 to 4000 units 5000 2000 to 3000 units 4000 4000 to 5000 units 6000 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 140. 140 3000 to 3500 units  4500 Here at Dhanhar 8.33 % bonus to the workers are also given on their basic salary. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 141. 141 Conclusion and summary Improvements and suggestions By this project we understand the perfect scenario of the Dhanhar Exim pvt ltd. So by our experience in the company we are giving some suggestions to the company for more improvement.  The standard of the salary paid to the employees would be increased. So that it becomes motivate for the employees. Specially for production and lower level employee.  The company is not having good knowledgeable people and not employees who have high degree and also not experienced person.  Company should try to focus at saurasta region for expansion.  The company should increase the advertisement to increase the sales volume.  Proper transportation should be provided to deliver raw material and finished products as they are mainly using manual equipments.  Packaging should be made very attractive.  One person is the head of two departments and there are two heads in each departments and hence confusing. The company has a strong vision and ability to stand properly in the time of recession. Their all managers are very experienced and familiar with the company. Company is also giving more importance to safety of the employees. They also provides the facilities of residence and transportation to their employees. They are also the followers of the government rules and regulations. It was a great and unforgettable experience for us to do our training in “Paras Dhanhar Exim Pvt Ltd.” The Managers and the administrative staffs gave a very good guidance in their field. BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 142. 142 Bibliography: The following are the list of books referred:  B.S.Shah –Management Accounting S.Y B.B.A  B.S.Shah – Financial Management S.Y.B.B.A  Production and Operation Management Notes of Mr. Ojas Desai  Marketing Management by Philip Kotler 13th edition.  Human Resource Management by Aswathappa 13th edition.  Human Resource Management by C.B Gupta  Annual reports of The Dhanhar Exim year 2009-2010, 2010-2011 and 2011-12 The following are the web sites and links: www.Dhanharmasala.com www.yellowpages.com www.Tradeindia.com BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 143. 143 Annexure BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 144. 144 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT
  • 145. 145 BRCM COLLEGE OF BUSINESS ADMINISTRATION, SURAT

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