Power Looms Summer Training Project

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Introduction
BRCM College of Business Administration
Industry Details
India textile industry largely depends upon the textile manufacturing and export. It also plays a major role in the economy of the country. India earns about 27% of its total foreign exchange through textile exports. Further, the textile industry of India also contributes nearly 14% of the total industrial production of the country. It also contributes around 3% to the GDP of the country. India textile industry is also the largest in the country in terms of employment generation. It not only generates jobs in its own industry, but also opens up scopes for the other ancillary sectors. India textile industry currently generates employment to more than 35 million people. It is also estimated that, the industry will generate 12 million new jobs by the year 2010. Surat, an emerging city in the state of Gujarat, is known as the textile city of Gujarat. And, the epithet is perfectly suited to the city. The textile industry is one of the oldest and the most widespread industries in Surat. A major part of the city population is associated with the textile industry. The textile industry in Surat is mainly engaged in the activities of yarn production, weaving, processing as well as embroidery. Surat is well known for its synthetic products market. It is mainly engaged in the production and trading of synthetic textile products. Nearly 30 million metres of raw fabric and 25 million metres of processed fabric are produced in Surat daily. The city has several textile markets that exist since times immemorial. Zampa Bazaar, Bombay Market, JJ Textile Market and Jash Market are among them. Katat Gam, Magdalla and Udhana are the areas of Surat where manufacturing is mainly concentrated. In the course of time, people from various other places like Rajasthan and Kolkata settled in Surat in order to carry out their textile business. Generally, the pattern which is followed in the textile industry is the text risers manufacture yarn and sell it to the waivers, they manufactures gray cloth and sell it to the whole sellers, the whole sellers give the job work to the mills and/or embroidery and sell it to the retailers within the city or outside the city or export it to the foreign countries. And then the retailers sell to the final customer. BRCM College of Business Administration
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Current Facts on India Textile Industry
India retained its position as worlds second highest cotton producer. Acreage under cotton reduced about 1% during 2008-09. The productivity of cotton which was growing up over the years has decreased in 2008-09. Substantial increase of Minimum Support Prices (MSPs). Cotton exports couldn't pick up owing to disparity in domestic and international cotton prices. Imports of cotton were limited to shortage in supply of Extra Long staple cottons.
Various Categories
Indian textile industry can be divided into several segments, some of which can be listed as below: Cotton Textiles Silk Textiles Woollen Textiles Readymade Garments Hand-crafted Textiles Jute and Coir
Company Details
Chanchapra Textiles is located at 96/97, Mahatma Industrial Estate, Varachha Road, Kapodra, Surat. Is engaged in manufacturing of gray cloth with a constant production capacity of 4000 meters/day of gray cloth and actual annual average production of 3345 meters/day. The total electricity requirement is 500000 units/year; the natural gas consumed by the Chanchapra Textiles is of 45000 per year. The total industrial process is continuous.
Company Profile
Name of Company:
CHANCHAPRA TEXTILES 96/97, Mahatma Industrial Estate, Varachha Road, Surat-395006 2005 6th February 2005 Vinubhai Lallubhai Bhikadiya
Location:
Year of Establishment: Production Starts from:
Promoters: Jayeshbhai Tulsibhai Chanchapra Capacity: 4000 meters/day
History of Company
Chanchapra Textiles is located at 96/97, Mahatma Industrial Estate, Varachha Road, Kapodra, Surat. Chanchapra Textiles started on 15th January 2005 by Mr. Vinubhai Lallubhai Bhikadiya. Then he retired and give the seat to Mr. Jayeshbhai Tulsibhai Chanchapra, who is well known person in Surat. Company is engaged in manufacturing of gray cloth with a constant production capacity of 4000 meters/day of gray cloth and actual annual average production of 3345 meters/day. The total electricity requirement is 500000 units/year; the natural gas consumed by the Chanchapra Textiles is of 45000 per year. The total industrial process is continuous.
Marketing Department
7 Introduction
The term marketing has changed and evolved over a period of time, today marketing is based around providing continual benefits to the customer, these benefits will be provided and a transactional exchange will take place. Traditionally, marketing analysis was structured into three areas: customer analysis, company analysis, and competitor analysis (so-called "3 Cs" analysis). More recently, it has become fashionable in some marketing circles to divide these further into certain five "Cs": customer analysis, company analysis, collaborator analysis, competitor analysis, and analysis of the industry context. The Chartered Institute of Marketing define marketing as 'The management process responsible for identifying, anticipating and satisfying customer requirements profitably'. If we look at this definition in more detail Marketing is a management responsibility and should not be solely left to junior members of staff. Marketing requires co-ordination, planning, implementation of campaigns and a competent manager(s) with the appropriate skills to ensure success. Marketing objectives, goals and targets have to be monitored and met, competitor strategies analysed, anticipated and exceeded. Through effective use of market and marketing research an organisation should be able to identify the needs and wants of the customer and try to delivers benefits that will enhance or add to the customers lifestyle, while at the same time ensuring that the satisfaction of these needs results in a healthy turnover for the organisation. Philip Kotler defines marketing as Satisfying needs and wants through an exchange process. Within this exchange transaction customers will only exchange what they value (money) if they feel that their needs are being fully satisfied; clearly the greater the benefit provided the higher transactional value an organisation can charge.
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P.Tailor suggests that Marketing is not about providing products or services it is essentially about providing changing benefits to the changing needs and demands of the customer. Marketing is the process of planning & executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals Marketing management is the practical application of marketing techniques. It is the analysis, planning, implementation, and control of programs designed to create, build, and maintain mutually beneficial exchanges with target market. The marketing manager has the task of influencing the level, timing, and composition of demand in way that will achieve organizational objectives.
9 Organisational Structure of Marketing Department
Chairman
General Manager
Marketing Manager
Sales Executive
10 Types and Classification of Product

We can divide product into two types like; 1) Consumer Products, 2) Business Products. We can also classify products into various other category describe as follow;
Convenience Product Customer Products Shipping Products Speciality Products Raw Material Classification of Products Major Equipments Accessory Equipment Business Products Components Part Process Material Supply Business Services
Let us, describe types and classification in brief.
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1. Consumer Products:
A product bought to satisfy personal and family needs. There are three categories of consumer products. These groupings are based primarily on characteristics of buyers purchasing behavior. i. Convenience Products: Is a relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort. The buyer spends little time in planning the purchase of a convenience item or in comparing available brands or sellers. Example: Bread, Gasoline, Newspaper, Chewing gum, soft drinks. ii. Shopping Products: Is an item for which buyers are willing to expend considerable effort on planning and making the purchase. Buyers allocate ample time for comparing stores and brands with respect to prices, product features, qualities, services, and warranties. These products are expected to last for a fairly long time and thus are purchased less frequently than convenience items Example: Appliances, Furniture, Mens Sites, Bicycle, Cellular Phones. iii. Speciality Products: It possesses one or more unique qualities for which a buyer is willing to expend considerable purchasing effort. Buyers actually know what they want and will not accept a substitute. In searching for specialty products, purchasers do not compare alternatives. Example: Unique sports car, Rare imported wine, specific type of antique china, Special handcrafted furniture.
2. Business Products
A product bought for resale, for making other products, or for use in a firms operation. i. Raw Material: Raw material is a basic material that actually becomes part of a physical product. It usually comes from mines, forest, oceans, or recycled solid wastes. Raw material usually are bought and sold according to grades or specification. For Chanchapra Textile this raw material is: Yarn, Aluminium, etc.
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ii. Major Equipment: Major Equipment includes large tools and machines used for production purpose. Some major equipment is custom made for a particular organisation, but other items are standardised products that perform one or several tasks for many types of organisations. In Chanchapra Textile there is major equipment is: Looms Machine, Hand trucks, Dump truck. iii. Accessory Equipment: Accessory Equipment is standardized equipment used in a firms production or office activities. Compared with major equipment, accessory items are usually much less expensive and are purchased routinely with less thought. Examples: Hand tools, Computers, Calculators. iv. Component Part: Component part is part of a physical product and is either a finished item ready for assembly or a product that needs little processing before assembly. Examples: Looms machines part, Computers part, and other more. v. Process Material: is used directly in the production of another product. Unlike a component part, a process material is not readily identified in a finished product. Like component parts, process material is purchased according to industry standards. Examples: Food preservatives, Industrial Glue. vi. Supply: Facilitates production and operations, but it does not become part of the finished products. Examples: Paper, Pencil, Oil, Cleaning Agents. vii. Business Service: An intangible product that an organisation uses in its operations. Purchases must decide if they want to do their own services or to hire them from outside the organisation. Examples: Financial, Marketing / advertising, Janitorial, Legal.
13 Details of Competitors
Our organization, Chanchapra Textiles, has etched a resounding name for itself as traders, wholesalers and suppliers of varied kinds of Yarns and Fabrics. These products are known for their fine weave, different patterns, great finish, smooth texture and colour fastness. All the products are procured from veritable vendors of the market, who have proved their worth time and again. Located in Mahatma Estate (Varachha, surat), our hi-tech warehousing unit is designed to store fabrics in a safe and secure manner. Our procurement officials use this building as a central point to conduct business. They scour the market and source fabrics from well-known vendors, who utilize the best quality raw material to make the products. Later, these are quality tested by our experts, who determine the colour fastness and long lasting nature of the products. Our products can be used for varied purposes like making dresses, curtains, pillow cases and bed sheets. Based on our hard work and consistency, we have managed to accumulate a vast clientele that spans across a vast area. Our team comprises the best officials in the industry. The team plays a major role in maintaining the quality standards of the products by testing all the products & processes related to the enterprise strictly. Our professionals also stay in touch with the developments in the market based on extensive research and incorporate these into the day to day processes of the firm. The team comprises following members: Procurement professionals, Quality testers Sales and Marketing professionals, Administrative staff Logistics staff
14 Product Profile
We are a formidable trader, wholesaler and supplier of varied kinds of Yarns and Fabrics. Our range includes Cotton Fabrics, Twill Fabrics, Woven Fabrics, Palin Fabrics and Satin Fabrics. Moreover, we provide Drill Fabrics and Grey Fabrics. These products are imported and procured from the best vendors in the industry. The vendors make use of high quality raw material in the form synthetic, natural and blended fibres, which are inclusive of lycra, cotton and polyester. Our vendors manufacture these using hi-tech production facilities, which are equipped with sophisticated machinery meant to facilitate bulk production of quality fabrics. Some of the specific features of our products are as follows: Fine finish Tear resistant Colour fast Superior spun High elasticity Skin friendly
15 Segmentation & Targeting

Segmenting is the process of dividing the market into segments based on customer characteristics and needs. The main activity segmenting consists of four sub activities. These are: 1. Determining who the actual and potential customers are 2. Identifying segments 3. Analysing the intensity of competitors in the market 4. Selecting the attractive customer segments. Customer segmentation can be identified by examining demographic, psychographics, and behavioural differences & geographic. The marketers then decide which segment presents the greatest opportunities that are its target market. For each chosen target market the firm develops a market offering. Target Marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments. Chanchapra Textile sells its product only to one segment of textile industry that is printing and dying mills so that they have not to be worry about this strategy (segmentation and targeting).
16 Distribution Network
Distribution means to distribute or spread out in the field of marketing. Channels of distribution indicate routes or pathways through such goods and services flows, or move from producers to consumers. The line or channel includes the manufactures and the consumer as well as intermediates. Product distribution (or place) is one of the four elements of the marketing mix. Distribution is the process of making a product or service available for use or consumption by a consumer or business user, using direct means, or using indirect means with intermediaries. The most common routes used for bringing the products in the market from producer to the consumer are as follows.
Producer----------Consumer. Producer----------Retailer----------Consumer. Producer----------Wholesaler----------Retailer----------Consumer. Producer----------Agent---------Wholesaler---------Retailer----------Consumer. Producer----------Wholesale----------Consumer. Producer----------Dealers-----------Consumers.
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Chanchapra Textile uses only one Distribution Channel in each time to reach the consumers. The most common channel of the distribution in the Chanchapra Textile is given below.
Producer Distributor Warehouse Distributor Printing & Dying Mills (Customer)
Producer
Distributer
Warehouse
Distributor
Printing & Dying Mills
18 How Customer Orders Are Proceed?

Sale procedure does not mean only dispatching the product. But this procedure starts from inquiry about the products to the dispatching of the product to the customers. It contains following activities. Buyers make inquiry about different supplier who manufactures grey cloth and fabrics and company give the quotation of the products. Quotation contains some basic information like price of the product, taxes (excises duty, sales taxes) VAT / CST, freight, payment terms, etc. Customer analysis the quotation of supplier (C.T.). Then customer places the order as per negotiated terms. Buyer has defined the last date of the delivery, required quality, required quantity, ratio of the quantity in different size, they also denote the. After getting order, marketing department send requirement of the customer to Production department as to manufacture the sample product. First the photo of the product send to the buyer and then one piece of all sizes will send to the buyers. If the buyer agreed with the sample then Chanchapra Textile will give the final approval and if they want any change in product or colour of the fabric then they give notes of the alteration. Chanchapra Textile gives two month of credit period to buyer for payment.
19 4 Ps of Marketing
The marketing mix is a business tool used in marketing products. The marketing mix is often crucial when determining a product or brand's unique selling point (the unique quality that differentiates a product from its competitors), and is often synonymous with the four Ps: price, product, promotion, and place. Marketing decision variables are those variables under the firm's control that can affect the level of demand for the firm's products. They are distinguished from environmental and competitive action variables that are not totally and directly under the firm's control.
Product
Promotion
4 Ps of Marketing
Price
Place
Let us define all these four terms like; Product, Price, Place and Promotion.
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1. Product:
The first thing you need, if you want to start a business, is a product. Therefore Product is also the first variable in the marketing mix. Product decisions are the first decisions you need to take before making any marketing plan. A product can be divided into three parts. The core product, the augmented product and the tertiary product. Before deciding on the product component there are some questions which you need to ask yourself. What product are you selling? What would be the quality of your product? Which features are different from the market? what is the function of product
2. Price:
Pricing of a product depends on a lot of different variables and hence it is constantly updated. Major consideration in pricing is the costing of the product, the advertising and marketing expenses, any price fluctuations in the market, distribution costs etc. Many of these factors can change separately. Thus the pricing has to be such that it can bear the brunt of changes for a certain period of time. However, if all these variables change, then the pricing of a product has to be increased and decreased accordingly. This decision includes: Suggested retail price Volume discounts and wholesale pricing Cash and early payment discounts Bulk Purchase
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3. Place:
Place refers to the distribution channel of a product. If a product is a consumer product, it needs to be available as far and wide as possible. On the other hand, if the product is a Premium consumer product, it will be available only in select stores. Similarly, if the product is a business product, you need a team who interacts with businesses and makes the product available to them. Thus the place where the product is distributed depends on the product and pricing decisions, as well as any STP decisions taken by a firm. This decision includes: Distribution channels Pricing strategy (Skim, Penetration) Warehousing Distribution centers Order processing Transportation
4. Promotion:
Promotions also decide the segmentation targeting and positioning of the product. The right kind of promotions affects all the other three variables the product, price and place. If the promotions are effective, you might have to increase distribution points, you might get to increase the price because of the rising brand equity of the product, and the profitability might support you in launching even more products. However, the budget required for extensive promotions is also high. Promotions are considered as marketing expenses and the same needs to be taken in consideration while deciding the costing of the product.
22 Generic Level Competition

Generic Level Competition is the Competition among products that are different, but solve the same problem or provide the same benefit or utility, such as audio cassettes and CDs, adhesive tape and glue-sticks, carpets and tiles. Business-level strategy is concerned with a company's position in an industry, relative to competitors and to the five forces of competition described earlier. Companies are challenged to select business-level strategies to position themselves favourably (in terms of the five competitive forces) and to establish a competitive advantage over industry rivals.
GENERIC BUSINESS LEVEL MODEL OF PORTER
Cost Leadership
Differentiation
Cost Focus
Differentiation Focus
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Companies can choose one of four strategies from the generic strategy matrix based on the source of competitive advantage--uniqueness or cost--and breadth of competitive scope--broad or narrow. A company choosing to compete across a broad market determines that it should compete in a number of customer segments. Competitive advantage is achieved either by offering unique products--a differentiation strategy--or by establishing a low-cost position and providing standardised products at the lowest competitive price--a cost leadership strategy. Companies that choose to compete in narrow customer segments select a focus strategy, which may be either a focused differentiation strategy (few segments, unique products) or a focused cost leadership strategy (narrow segment, standardised products at the lowest competitive price).
24 Pricing Policy
Pricing is a very crucial matter for the marketing manager because it affects the demand, sales promotion, competitive strength of the business unit, ego satisfaction of the customer and ultimately the profit. In any business unit pricing policy can play an important role without a good pricing policies profit cannot be managed by the any business unit. 1. Determination of cost per unit: First, in a bulk quantity raw material is taken. Cost of this raw material is calculated Now, Labour hours are calculated to manufacture the product and total labour cost is also calculate Total time used to manufacture that product is calculated and on basis of that other total cost are calculated, like electricity used, fuel, oil, land, tools etc. which are used to manufacture that product. Costs of inspection of quality, plant maintenance, transportation cost are also calculated. Now, calculation of total of above cost id done. Total number of items manufactured is counted. Total cost per unit is calculated by dividing the total cost by number of items manufactured. 2. Determination of price per unit: After determining the cost, a profit percentage which the firm wants to incur will be added which can provide a profit to firm. The price must be equal to or more than the cost per unit. The firm must earn profit by which it can survive in the competition.
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3. Price Discrimination: Pricing policy where a seller sets different incremental margins on various units of the same or similar product. To earn a higher incremental margin from buyers with higher benefit, and a smaller margin from buyers with lower benefit. 4. Complete Price discrimination: The pricing policy where a seller prices each unit of output at the buyers benefited and sells a quantity where the marginal benefit equals the marginal cost. a. The entire buyer surplus is extracted. Every buyer is charged the maximum she is willing for pay for each unit. b. Economically efficient quantity: all the opportunity for additional profit through changes in sales is exploited. c. Extracts a higher price for units that would be sold under uniform pricing and extends sales by selling additional units that would not be sold.
Promotional and Advertising Policy

Chanchapra Textile does not use any promotional and advertisement policy for their product because they manufactured grey cloth which is sold to a particular printing and dying mills company so there is no need to make policy and expense on these two decisions.
26 Taxes Applicable
Direct taxes
Direct Taxes are those which are directly charged in the hands of the assesse. E.g. Income Tax. The Person who earns income pays tax. Corporate tax Personal income tax Wealth and Property Tax
Indirect taxes
Indirect taxes are those which are indirectly collected from assesse. E.g. Sales Tax. The person who sales collects tax from the buyer and hence the buyer ultimately pays the tax is called Indirect tax. Service tax Custom duty Excise duty Sales Tax
27 Study of Control System & Reporting System Design for Sales Employees Working In Field
The controlling system is very necessary for sales employees. In Chanchapra Textile as Industries controlling system is very clear. No one can take the lot outside the factory before the signature of dispatching manager and general manager. Dispatching manager issues the bill for the goods which is send out 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.
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Production Department
29 Organizational Structure of Production Department
Chairman
General Manager
Production Manager
Supervisor
Master
Pasariya
Workers
Worpers
TFO Workers
30 Production Plan
Production planning is the function of management, which decides about the resources that will be required for future manufacturing operations & allocating these resources to reduce desired output at right time, in right amount, of required quantity & at minimum cost. A production plan is that portion of your intermediate-range business plan that your manufacturing / operations department is responsible for developing. The plan states in general terms the total amount of output that the manufacturing department is responsible to produce for each period in the planning horizon. The output is usually expressed in terms of units of measurement (e.g. tons, litters, and kgs.) or units of the aggregate product (this refers to the weighted average of all the products in company). The production plan is the authorization of your manufacturing department to produce the items at a rate consistent with your company's overall corporate plan. This production plan needs to be translated into a master production schedule so as to schedule the items for completion promptly, according to promised delivery dates; to avoid the overloading or under loading of the production facility; and so that production capacity is efficiently utilized and low production costs result. Production planning is one of the planning functions that a firm needs to perform to meet the needs of its customers. It is a medium-range planning activity that follows long-range. Firms need to have an aggregate planning or production planning strategy to ensure that there is sufficient capacity to meet the demand forecast and to determine the best plan to meet this demand.
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A carefully developed production plan will allow your company to meet the following objectives: Minimize costs / maximize profits Maximize customer service Minimize inventory investment Minimize changes in production rates Minimize changes in work-force levels Maximize the utilization of plant and equipment
Inputs to the production planning process

To be able to perform the aggregate planning process, the following information should be available to this production planning team. These data include the following: Materials / purchasing Information Operations / manufacturing Information Engineering / process Designs Sales, marketing and distribution Information Financial and accounting information Human resources information
In Chanchapra Textiles, the Production Plan is made according to the orders placed by the customers. For each and every order, they make production planning directly or indirectly.
32 Analysis of Plant Location

1. Availability of Raw Materials The firm Chanchapra Textiles has its production unit in Mahatma Industrial Estate, from where they can get raw material very easily. Availability of raw material affects the selection of plant location. 2. Proximity to market It means that you have the potential market to sell your product in your area where you are producing. The market is also near to the Firm; actually it is in one city only. 3. Transportation Facility There is transportation facility is very much available there, because the firm is near to the main road of the city, so the transportation problem is less and therefore many peoples like to do business in this area. 4. Man Power Availability The workers are also easily available in that area so that they dont have to worry more about the labours. 5. Financial Facilities & Infrastructure Facilities There are also branches of some banks like, SBI, ICICI, and IDBI, and also some facilities like road, rail, airport, ports are also easily available. Thus, the location of Plant Site is very much conveniently, and it helps to earn money also.
33 Plant Location of Every Department
34 Internal Plant Location
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36 List of Machines
Power Looms Machine
Boiler
Yarn Twisting Machine (Spinning Machine)
Electronic Weighting Scale
37 List of Material Handling Equipment
Scissor & Spindle
Baskets
Folding Equipment
Material Lifting Machine
Goods Transportation Truck
Vacuum Cleaner
38 Inventory Valuation Method

An inventory valuation allows a company to provide a monetary value for items that make up their inventory. Inventories are usually the largest current asset of a business, and proper measurement of them is necessary to assure accurate financial statements. If inventory is not properly measured, expenses and revenues cannot be properly matched and a company could make poor business decisions. There are three basis approaches to valuing inventory that are allowed by GAAP (Generally Accepted Accounting Principles) First-in, First-out (FIFO): Under FIFO, the cost of goods sold is based upon the cost of material bought earliest in the period, while the cost of inventory is based upon the cost of material bought later in the year. This results in inventory being valued close to current replacement cost. During periods of inflation, the use of FIFO will result in the lowest estimate of cost of goods sold among the three approaches, and the highest net income. Last-in, First-out (LIFO): Under LIFO, the cost of goods sold is based upon the cost of material bought towards the end of the period, resulting in costs that closely approximate current costs. The inventory, however, is valued on the basis of the cost of materials bought earlier in the year. During periods of inflation, the use of LIFO will result in the highest estimate of cost of goods sold among the three approaches, and the lowest net income. Weighted Average: Under the weighted average approach, both inventory and the cost of goods sold are based upon the average cost of all units bought during the period. When inventory turns over rapidly this approach will more closely resemble FIFO than LIFO.
39 Manufacturing Process
The main operational process for production of towels and bed sheets in cluster units are:
Doubling
Yarn Dying
Winding
Warping
Weaving
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1. Doubling
In the Doubling process, thin single yarn is converted to double yarn for strengthening the yarn by using doubling machine.
2. Yarn dyeing
Initially, the yarn is soaked in soap water for 24 hours to remove the dirt and other foreign materials and after soaking, the yarn is taken for bleaching. Bleaching is carried out soaking the yarn in tanks mixed with bleaching agents and after completion of the process; The yarn is washed with normal water. The hang dyeing machine tanks are filled with required quantity of normal water and required chemicals and dyeing agents are added. The temperature of the water is raised by oil circulation or direct steam injection.
3. Winding
The yarn after drying is taken for winding in which the yarn is wounded to bobbins and cones. The winded yarn is taken for further process.
4. Warping
In warping, the winded yarn is wound to beams according to designed pattern (customized designs). Then the beams are taken for Weaving.
5. Weaving
The beams, which are wound with yarn are taken and placed in power looms where the designed pattern is already set. In power looms, the yarn is converted to final product by weaving. The product obtained from weaving is taken for stitching and packing.
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Finance Department
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Finance Management
The part of an organization that manages its money is called finance department. The business functions of a finance department typically include planning, organizing, auditing, accounting for and controlling its company's finances. The finance department also usually produces the company's financial statements. The management of the finances of a business / organisation in order to achieve financial objectives is called Finance Management. Taking a commercial business as the most common organisational structure, the key objectives of financial management would be to: Generate Funds Optimum utilisation of funds Efficient allocation of earnings
There are three key elements to the process of financial management: (1) Financial Planning Management need to ensure that enough funding is available at the right time to meet the needs of the business. In the short term, funding may be needed to invest in equipment and stocks, pay employees and fund sale made on credit. In the medium and long term, funding may be required for significant additions to the productive capacity of the business or to make acquisitions. (2) Financial Control Financial control is a critically important activity to help the business ensure that the business is meeting its objectives. Financial control addresses questions such as: Are assets being used efficiently? Are the businesses assets secure?
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Do management act in the best interest of shareholders and in accordance with business rules? (3) Financial Decision-making The key aspects of financial decision-making relate to investment, financing and dividends: Investments must be financed in some way however there are always financing alternatives that can be considered. For example it is possible to raise finance from selling new shares, borrowing from banks or taking credit from suppliers A key financing decision is whether profits earned by the business should be retained rather than distributed to shareholders via dividends. If dividends are too high, the business may be starved of funding to reinvest in growing revenues and profits further.
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Organizational Structure of Finance Department
Owner (Vinubhai Bhikadiya)
General Manager (Jitubhai Chanchapra)
Accountant (Rajeshbhai )
Payment Collector (Sajnu )
45 Budgeting and Planning
Budgeting is essential to the sustainability and growth of a business. Management must forecast business results, such as sales revenue, capital expenditures, expenses, investments and debt management. These projections are based on market analysis, research, growth targets and experience. Done properly, these budgets save time, effort and money in determining how to best allocate business resources.
Capital Budgeting
The term capital budgeting, means planning for capital asset. The capital budgeting decision means a decision as to whether or not money should be invested in long term projects. Such projects may include the setting up of a factory or installing a machinery or certain creating additional capacities to manufacturing a part which at present may be purchased from outside. It includes a financial analysis of the various proposals regarding capital expenditure to evaluate their impact on the financial condition of the company for the proposal to choose the best out of the various alternatives. In Chanchapra Textiles, capital budgeting is being done not every day but every 2 years. In last year, in capital budget, they have decided to purchase 20 new Water Jet Looms for better and efficient quality production.
Revenue Budgeting
A budget that projects future sales is called Revenue Budget. The amount of money allocated to the maintenance and growth of a business. A revenue budget is essential to management and is the result of a business's forecasts of sales revenue, expenses and capital expenditures. Revenue budgets help business save time and effort by the proper allocation of resources. Management team of Chanchapra Textiles do sales forecast and make revenue budget as per the data available of past years. And according to that, they make predictions of future revenue and sales. BRCM College of Business Administration
46 Final Accounts of Chanchapra Textiles
CHANCHAPRA TEXTILES
96/97, Mahatma Ind. Est., Kapodra, Varachha Road, Surat
TRADING ACCOUNT FOR THE YEAR 2009-10-11

Expenditures OPENING STOCK Opening Stock PURCHASE Millgin Purchase Yarn Purchse Grey Purchse SALARY & WAGES G.E.B. Power Bill A/c Gujarat Gas Bill Exp Worker Salary A/c Worker Salary [Twi.] A/c GROSS PROFIT TOTAL Amount () 2009-10 2558881.00 522575.00 24938858.00 5345691.00 3687408.00 1883705.00 5386253.00 44323371.00 2010-11 SALES 3513580.00 Grey Sales CLOSING STOCK 545820.00 Closing Stock 19148252.00 94568.00 4885058.00 44452.00 3454288.00 1573924.00 4403734.00 37663676.00 TOTAL 44323371.00 37663676.00 Income Amount () 2009-10 2010-11
40809791.00 32446434.00 3513580.00 5217242.00
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CHANCHAPRA TEXTILES
PROFIT & LOSS ACCOUNT FOR THE YEAR 2009-10-11

Expenditures ADMINISTRATIVE EXP Account Fee Exp. Audit Fee Bank Charges Bank Interest Exp Conveyance Exp Depriciation A/c Electricity Exp Factory Rent A/c Gujarat Gas Bill Exp Gray Claim A/c Insurance Exp Interest Exp Mobile Phone Bill Machinery Repairs Manager Salary Exp Master Salary Exp Miscellenious Exp Machinery Rent Professional Tax Programming Charges SMC Tax Supervisior Salary Exp Stationary & Printing Security Exp Telephone Bill Exp Transport Exp Discount Exp Admin Staff Salary Exp NET PROFIT TOTAL Amount () 2009-10 144000.00 15000.00 3268.00 401431.00 40650.00 358514.00 31743.00 480000.00 46353.00 11099.00 15272.00 63130.00 20511.00 111270.00 234000.00 264000.00 89170.00 1224000.00 2000.00 60064.00 234000.00 10344.00 144000.00 7521.00 122439.00 35873.00 420000.00 816268.00 5405920.00 2010-11 Income GROSS PROFIT 144000.00 15000.00 ADMINISTRATIVE INCOME 1696.14 Sales of Wastages 4472214.00 Late Payment Interest 30600.00 347951.00 26435.00 480000.00 105349.00 15010.00 92148.00 27030.00 22239.00 144000.00 132000.00 31600.00 1224000.00 3920.00 2500.00 105950.00 108000.00 3215.00 5420.00 48771.00 91523.00 240000.00 677112.00 4572684.00 TOTAL 5405920.00 4572684.00 Amount () 2009-10 5386253.00 2010-11 4403734.00
19667.00
168950.00 -
48
CHANCHAPRA TEXTILES
BALANCE SHEET AS ON 31st March

Liabilities Amount () 2009-10 2010-11 29272963.43 300000.00 Income FIXED ASSETS Boiler A/C Computer A/C Gujarat Gas Co. Ltd. Machinery A/C Office Furniture A/C Printer A/C Television A/C Air-Conditioner A/C Motor Car A/C INVESTMENT Argine Jewels SPB Bank FD SPB Bank Shares INVENTORIES Closing Stock SUNDRY DEBTORS AAA Creations Shashi Prints I.G. Fashion Khushboo Creation Khushi Creation Marudhar Silk Mills Mansi Fashion Manan Fashion Naman Creation Nilkanth Silk Radheshyam Creation Shree Balaji Creation Shantinath Creation Shantinath Sarees S.B. Creation Sagar Exports Witness Creation Alfa Silk Mills Ashish Silk Mills Balaji Silk Mills Colour Range Dharma Creation Gopalji Textiles Amount () 2009-10 14138.00 53.00 29634.00 1896418.00 62501.00 2995.00 25875.00 32300.00 2010-11 12017.00 21.00 25189.00 1611955.00 56251.00 2546.00 23287.00 27455.00 527344.00
OWNER'S CAPITAL Jayeshbhai Chanchapra 1634081.00 UNSECURED LOAN Bipinbhai D. Chanchapra 300000.00 Tejuben B. Patel 300000.00 Dhanjibhai Chanchapra 290000.00 Jivanbhai Patel 232000.00 Kishan Textiles 200000.00 Nileshbhai Chanchapra 95000.00 Rambhaben Chanchapra 925000.00 Tulsibhai Chanchpra 480000.00 Vimlaben Chanchapra 160000.00 Vibhaben Chanchapra 300000.00 SUNDRY CREDITORS (Goods) GROUP 1 Shree RadheGovind Poly 369298.00 APL Corp. Pvt. Ltd. Fairdeal Filaments Ltd. Lotus Marketing Udai Yarn Twisters GROUP 2 Madhvanand Textile Maker Sizing Pvt. Ltd. Shree Nijanand Shree Gayatry Reed Mfg.. Siddharth Waves Yud Enterprise Shahlon Silk Mills SUNDRY CREDITORS (Others) Ashmita Fabrics 101358.00 J.B. Patel 125676.00 Kishan Textiles 152037.00 Mihir Twisters 101358.00 Nilesh Textiles 152037.00 Piyush Textiles 152037.00 Radhe Twister 185823.00 Rambhaben Chanchapra 167568.00 Shilpa Fabrics 152037.00 Vimlaben Patel 125676.00 Varsha Fabrics 152037.00
527452.00 14920107.00 222442.00 244338.00 100020.00 100020.00 3513580.00 371753.00 46202.00 45707.00 142760.00 234424.00 96350.00 94815.00 194470.00 91775.00 373715.00 389956.00 266923.00 93667.00 23944.00 230338.00 268658.00 40000.00 570987.00 5217242.00 310918.00 603402.00 36970.00 35540.00 24834.00 270013.00 59316.00 58464.00
278700.00 1003040.00 671379.00 354092.00 94568.00 12960.00 3850.00 100484.00 137258.00 278472.00 70190.00 105840.00 129600.00 158760.00 105840.00 158760.00 158760.00 194040.00 172800.00 158760.00 129600.00 158760.00
49
Amount () 2009-10 1535.00 3917.00 15000.00 432874.00 845.00 481149.00 170000.00 30000.00 3908890.00 2010-11 2843.00 3125.00 15000.00 398710.00 32000.00 Amount () 2009-10 856278.00 282291.00 119239.00 5912.00 16995.00 600000.00 12666.00 2010-11 1400.00 1528614.00 106415.00 170742.00 423540.00 126640.00 308138.00 657301.00 91654.00 55633.00 241086.00 124182.00 95456.00 175106.00 114449.00 266648.00 657276.43 16828.00 3000000.00 12666.00 6300000.00
Liabilities PROVISIONS Unpaid Mobile Bill Unpaid Gujarat Gas Bill Unpaid Audit Fees Unpaid G.E.B Bills Unpaid Telephone Bill Unpaid Worker Salaries Unpaid Staff Salaries Unpaid Admin Staff Salary CASH & BANK BALANCE SPB Co-operative Bank
Income
G.L. Sarees Harekrishna Textiles Gaurav Enterprise Heer Creation Laxmi Sarees Malishka Industries Nivesh Fashion Narayan Prints Nitisha Textiles Pinal Sarees 3979849.00 RatanRaj Creation Shivam Silks Sai Ganesh Textiles Shree Pinal Sarees Vidhatri Sports CASH & BANK BALANCE Cash A/C Axis Bank Bank Of Baroda LOAN & ADVANCES Alpeshbhai Chanchapra Prepaid Insurance Tulsibhai Chanchapra 38641003.43 TOTAL
TOTAL
11897233.00
11897233.00 38641003.43
50 Cost Sheet of Chanchapra Textiles

Cost sheet is a statement, which shows various components of total cost of a product. It classifies and analyses the components of cost of a product. Previous periods data is given in the cost sheet for comparative study. It is a statement which shows per unit cost in addition to Total Cost. Selling price is ascertained with the help of cost sheet. The details of total cost presented in the form of a statement are termed as Cost sheet. Cost sheet is prepared on the basis of: 1. Historical Cost 2. Estimated Cost 1. Historical Cost Historical Cost sheet is prepared on the basis of actual cost incurred. A statement of cost prepared after incurring the actual cost is called Historical cost sheet. 2. Estimated Cost Estimated cost sheet is prepared on the basis of estimated cost. The statement prepared before the commencement of production is called estimated cost sheet. Such cost sheet is useful in quoting the tender price of a job or a contract.
51
Cost Sheet for the period of 31st march 2010-11
Particulars Direct Materials Opening stock 3513580.00 +Purchases 19788640.00 -Closing stock 5217242.00 Direct Wages Direct Expenses Prime Cost Factory Overheads Indirect Wages 384000.00 Factory Rents 480000.00 Machinery Rent 1224000.00 Machinery Repairs 22239.00 Depriciation of plants 52192.65 Insurane Expense 107158.00 Work Cost Office and Admin. Overhead Account Fee Ex. 144000.00 Audit Fee 15000.00 Bank Charges 1696.00 Bank interest ex. 447214.00 Conveyance ex. 30600.00 Mobile Phone Bill ex. 32450.00 Misce. Ex. 31600.00 Programming Charges 2500.00 Stationary & Printing ex. 3215.00 Administrative staff salary 240000.00 Tax 109878.00 Cost Of Production Selling & Distribution Overhead Transport Ex. 48771.00 Vatav Kasar 91523.00 Cost Of Sales Profit Sales Amount () Per Unit Cost (Sales 1220925 meters)
18084978.00 5028212.00 4929510.00 28042700.00
14.81 4.117 4.038 22.965
2269589.65 30312289.65
1.859 24.824
1058153.00 31370442.65
0.8667 25.6907
140294.00 31510736.65 677112.86 32187849.51
0.115 25.809 0.5545 26.3634
52 Classification of Cost
Cost classification can be defined in three categories: 1. Direct Material Cost: The raw materials used in the creation of the final product. Direct material is a direct cost and includes any raw material that ends up as a part of the final product. For example, the cost of glass is a direct materials cost in light bulb manufacturing. The manufacture of products or goods required material as the prime element. In general, these materials are divided into two categories. These categories are direct materials and indirect materials. Direct materials are also called productive materials, raw materials, raw stock, stores and only materials without any descriptive title. 2. Direct Labour Cost: Direct labour cost is a part of wage-bill or payroll that can be specifically and consistently assigned to or associated with the manufacture of a product, a particular work order, or provision of a service also; we can say also it is the cost of the work done by those workers who actually make the product on the production line. 3. Overhead Cost: In business, overhead or overhead expense refers to an on-going expense of operating a business. The term overhead is usually used to group expenses that are necessary to the continued functioning of the business but cannot be immediately associated with the products/services being offered.
53 Working Capital Management

Working capital is a financial metric which represents operating liquidity available to a business, organization or other entity, including governmental entity. Working capital can be defined as the difference between current assets and current liabilities.
Working Capital (WC) = Current Assets (CA) Current Liabilities (CL)

Decisions relating to working capital and short term financing are referred to as working capital management. These involve managing the relationship between a firm's short-term assets and its short-term liabilities. The goal of working capital management is to ensure that the firm is able to continue its operations and that it has sufficient cash flow to satisfy both maturing short-term debt and upcoming operational expenses. Working capital management refers to the combined efforts of a small business owner or manager to balance or improve the cash situation of the business. It normally will include different reports and measures taken to evaluate cash flows in and out of the business, and often entails using a third party for obtaining additional cash resources. Working capital management is important because maintaining a desired balance of income to debt can be difficult. Owners must be diligent to assure that there is adequate working capital available or they may run into problems that could have catastrophic results. Even very profitable businesses can run into trouble if they lose the ability to meet their immediate obligations. Sometimes it takes a little assistance to maintain levels of liquidity or make major purchases.
54
Net Working Capital = Current Assets Current Liabilities
A. Estimation of Current assets: 1. Cost of Raw Material inventories 2. Cost of Work-in-progress inventories 3. Cost of Finish Goods inventories 4. Amount of Debtors 5. Minimum cash and bank balance B. Estimation of Current Liabilities: 1. Amount of Creditors 2. Outstanding Expenses Estimation of Working Capital = A B
Operating Cycle
Time length between payment of raw material purchase and collection of cash from the receivable is known as operating cycle or cash cycle. Process of Operating Cycle 1. Conversion of cash into raw materials 2. Conversion of raw materials into finish goods 3. Conversion of finish goods into receivables 4. Conversion of receivables into cash
55
Cash
Receicables
Raw Material
Finish Goods
O=R+F+D-C
Where, O = Operating Cycle Length R = Raw material storage period F = Finish Goods storage period D = Debtors collection period C = Creditors payment period
56 Fund Flow Statement

Fund flow statement is a statement which shows the inflow and out flow of funds between two dates of balance sheet. So, it is known as the statement of changes in financial position. We all know that balance sheet shows our financial position and inflow and outflow of fund affects it. So, in company level business, it is very necessary to prepare fund flow statement to know what the sources are and what are the applications of fund between two dates of balance sheet? Generally, it is prepare after getting two year balance sheet. According to Prof. Anthony, The funds flow statement describes the sources from which additional funds were derived and the use of which these funds were put. The first step for making Fund Flow Statement is to make Change in Working Capital Statement.
CHANCHAPRA TEXTILES
CHANGE IN WORKING CAPITAL STATEMENT Particular Increase Decrease CA Closing Stock Sundry Debtors Cash Loan & Advances CL Sundry Creditors Provision BOD Increase in WC 12861669.43 683642.00 70959.00 2699571.00 10162098.43 12861669.43 1703662.00 904800.00 798606.43 8700000.00 -
57
From making Change in Working Capital Statement, we can know the increase or decrease in Working Capital of the company. And the second step is to make Fund Flow Statement from Change in working Capital Statement and Balance Sheet.
CHANCHAPRA TEXTILES
FUND FLOW STATEMENT

Sources of Fund Raise Owner's Capital Sales of Boiler Sales of Computer Sales of Gujarat Gas Sales of Machinery Sales of Furniture Sales of Printer Sales of Television Sales of Air-Conditioner Amount Application of Funds Amount 10162098.43 2982000.00 527344.00 14392655.00 21896.00 27638882.43 Increase in WC 2121.00 Pay Unsecured Loans 32.00 Purchase of Motor Car 4445.00 Purchase of Argine Jewels 284463.00 Purchase of SPB FD 6250.00 449.00 2588.00 4845.00 27944075.43 27944075.43
58 Common size and Comparative Statement

Common size Financial Statement
A company financial statement that displays all items as percentages of a common base figure is called Common Size Financial Statement. This type of financial statement allows for easy analysis between companies or between time periods of a company.
CHANCHAPRA TEXTILES
96/97, Mahatma Ind. Est., Kapodra, Varachha Road, Surat COMMON SIZE INCOME STATEMENT Particulars Sales Less: Cost of sale Gross Profit Less: Admin. Expenses Balance Less: Selling Expenses Net Operating Profit Add: Other Income EBIT Less: Interest EBT Less: Tax Net Profit After Tax 2009-10 Amount 40809791.00 35423238.00 5386253.00 4295802.00 1090451.00 168656.00 921795.00 19667.00 941462.00 63130.00 878332.00 62064.00 816268.00 % 100 86.8 13.2 10.53 2.67 0.41 2.26 0.048 2.31 0.15 2.15 0.15 2 2010-11 Amount 32446434.00 28042700.00 4403734.00 3550044.14 853689.86 143509.00 710180.86 168950.00 879130.86 92148.00 786982.86 109870.00 677112.86 % 100 86.43 13.57 10.94 2.63 0.44 2.19 0.52 2.71 0.28 2.43 0.34 2.09
59
Comparative Financial Statement
A statement which compares financial data from different periods of time is called Comparative Financial Statement. The comparative statement lines up a section of the income statement, balance sheet or cash flow statement with its corresponding section from a previous period. It can also be used to compare financial data from different companies over time.
CHANCHAPRA TEXTILES
96/97, Mahatma Ind. Est., Kapodra, Varachha Road, Surat COMPARATIVE BALANCE SHEET Particulars Assets: Current Assets: Investment Inventories Debtors Advances Cash And Bank Balance Total Current Assts Fixed Assets Total Assets Liabilities & Capital: Current Liabilities: Sundry Creditors Provision Bank Overdraft Total Current Liabilities Loans Propritors Capital Total Liabilities & Capital 1936942.00 1135320 3908890.00 6981152.00 3282000.00 1634081.00 11897233.00 4636513.00 451678.00 3979849.57 9068040.57 2699571.00 -683642.00 70959.57 2086888.57 139.37 -60.22 1.82 29.89 -90.86 1691.40 224.79 849914.00 3513580.00 4715013.00 612666.00 142146.00 9833319.00 2063914.00 11897233.00 15264465.00 14414551.00 5217242.00 5619813.00 9312666.00 940752.43 1703662.00 904800.00 8700000.00 798606.43 1696.00 48.49 19.19 1420.02 561.82 269.71 10.76 224.79 Amount 2009-10 Amount 2010-11 Change in () Change in %
36354938.43 26521619.43 2286065.00 222151.00
38641003.43 26743770.43
300000.00 -2982000.00 29272962.86 27638881.86 38641003.43 26743770.43
60
Trend Analysis
Trend analysis is a form of comparative analysis that is often employed to identify current and future movements of an investment or group of investments. The process may involve comparing past and current financial ratios as they related to various institutions in order to project how long the current trend will continue. This type of information is extremely helpful to investors who wish to make the most from their investments.
CHANCHAPRA TEXTILES
TREND ANALYSIS (BASE YEAR: 2009-10)

Year Particular In Rs. Sales Purchases Cost of Goods Sold Profit Before Tax 40809791.00 25461433.00 35423538.00 878332.00 2009-10 % 100 100 100 100 In Rs. 32446434.00 19788640.00 28042700.00 786982.00 2010-11 % 79.51 77.72 79.16 89.60
61 Ratio Analysis
Liquidity and Solvency Ratio:
1. Current Ratio = 2009-10 = = 1.41: 1
2010-11 =
= 4.01: 1
2. Quick Ratio
2009-10 =
= 1.86: 1
2010-11 =
= 4.29: 1
3. Net Working Capital Ratio = 2009-10 = =0.24: 1
2010-11 =
= 0.74: 1
4. Proprietary Ratio = 2009-10 = = 0.41: 1
2010-11 =
= 0.77: 1
62
5. Absolute Liquidity Ratio = 2009-10 =
= 0.02: 1
2010-11 =
= 0.10: 1
6. Fixed Assets To Proprietary Fund Ratio = 2009-10 =
= 042: 1
2010-11 =
= 0.08: 1
7. Current Assets To Proprietary Fund Ratio = 2009-10 =
= 2: 1
2010-11 =
= 1.23: 1
8. Capital Gearing Ratio = 2009-10 =
= 0.01: 1
2010-11 =
= 2.01: 1
63
9. Debt-Equity Ratio = 2009-10=
= 0.70: 1
2010-11=
= 3.26: 1
10.Solvency Ratio = 2009-10= = 0.86: 1
2010-11=
= 0.24: 1
64
Profitability Ratio:
1. Gross Profit Ratio = 2009-10=
100 = 86.80%
2010-11=
= 86.43%
2. Operating Ratio = 2009-10= 2010-11= = 86.80% = 86.43%
100
3. Net Profit Ratio = 2009-10= 2010-11=
100 = 2% = 2.01%
4. Return On Assets = 2009-10=
100 = 6.86%
2010-11=
= 1.75%
65
5. Return On Capital Employed = 2009-10= 100
= 15.34%
2010-11=
= 1.92%
6. Return On Shareholders Fund = 2009-10= = 49.97%
100
2010-11=
= 2.31%
66
Activity Ratio:
1. Inventory Turnover Ratio
2009-10
= 11.67 Times
2010-11
= 1.56 Times
2. Debtors Turnover Ratio =
2009-10=
= 17.31 Times
2010-11=
= 11.55 Times
3. Debtors Collection Period = 2009-10= = 22 Days
2010-11=
= 32 Days
4. Creditors Turnover Ratio
2009-10
= 26.29 Times
2010-11
= 8.54 Times
67
5. Creditors Payment Period 2009-10 = 15 Days
2010-11
= 43 Days
6. Working Capital Turnover Ratio
2009-10
= 12.42 Times
2010-11
= 1.03 Times
7. Fixed Assets Turnover Ratio = 2009-10= = 17.16 Times
2010-11
= 12.27 Times
8. Capital Turnover Ratio =
2009-10=
= 7.21 Times
2010-11=
= 0.95 Times
68
Internal Audit Policy
Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. Internal auditing is a catalyst for improving an organizations effectiveness and efficiency by providing insight and recommendations based on analyses and assessments of data and business processes. With commitment to integrity and accountability, internal auditing provides value to governing bodies and senior management as an objective source of independent advice. Professionals called internal auditors are employed by organizations to perform the internal auditing activity. The scope of internal auditing within an organization is broad and may involve topics such as the efficacy of operations, the reliability of financial reporting, deterring and investigating fraud, safeguarding assets, and compliance with laws and regulations.
69
Human Resource Department

70
Introduction
Definition:
HUMAN RESOURCE MANAGEMENT is a management process of procurement, development, compensation, integration and maintenance and reproduction of HUMAN RESOURCES in the organization so that the goals of an organization are achieved in an effective and efficient manner. In simple sense, HUMAN RESOURCE MANAGEMENT refers to a set of polices, practices and programmers, designed to maximize both employees as well as organizational goals. The Personnel Department provides support services to other departments so that they may focus on the services they provide to their customer. The Personnel Department is responsible for the successful administration of various employment related systems and programs including
employee recruitment, employee development, compensation and benefits management, employee relations and risk management. The Personnel department's activities both enhance community safety and Personnel management is a continuous process. It cannot stop. Personnel management is a never-ending process. It helps in achieving objectives of company. This is done by proper perform of personnel function like recruitment, selection, training & development, labour activity, motivation, welfare etc. it also helps to keep a smooth relationship between employers & employees. Promote the efficient and effective delivery of services to citizens.
71
Structure of Human Resource Department
Chairman
General Manager
Human Resource Manager
Co-Assistant
Worker
72
Activities of HR Department
Determines the requirements of those individuals who will work to hold and to further company mission, vision, and values and works to bring such individuals to the areas where needed. Creates and implements an orientation program that eases the adaptation of new employees to their jobs and to the company. Determines the requirements for in- and out-house training that will accelerate the worker's technical and personal development and actualizes these training programs. Prepares procedures and forms related to Human Resources to ensure that employees are made aware of company practices and processes. Counsels company employees. Offers support to promote implementation of the suggestion award system. Conducts total personnel/employee procedures. Prepares payrolls and manages insurance procedures. Prepares various statistical information reports relative to employees. Finds and organizes the work of high school and university interns, when such need arises. Organizes motivational activities and events. Carries out various HR projects.
73
Human Resource Planning Process

Human resource planning is understood as the process of forecasting an organizations future demand for, and supply of the right type of people in the right number. It is only after this that the Human resource planning department can the recruitment and selection process. Human resource planning is a sub-system in the total organizational planning. Organizational planning includes managerial activities that set the companys objectives for the future and determine the appropriate means for achieving that objective. Chanchapra Textile have design the human resource planning process in its own manner. The process is as under:
Objectives
How many needed
Sources of Employee
Selection Process
74
1. Objectives:
First of all, HR Manager decides the objective of the need of employee. We can say it as the reason behind need of new employee. The objectives are as follow: New machinery installed. Capacity increased. Current employee leaves the organization. New branch started.
2. How many needed?

There is no specific method used by Chanchapra Textile to decide number of employee. HR Manager takes decision about number in following manner. If the new machine will install than need raises according to capacity of machine. For example in this company one worker can handle approx. 6 machines so according to this data they will plan for recruitment of employee.
3. Source of employee:
After deciding number of employee, next step is to find out the best source from where the company can get good employees. The source of recruitments is as under: Internal Source: Family references (applicable) Casual callers Transfer (applicable) Promotion (applicable) Recall Past employees (applicable)
75
External Source: Advertisements Competitors
4. Selection process:
Mostly, selection will be done with regard to references i.e. when the company requires skilled or unskilled workers, a notice is put on the notice board so that they can see it and brings the workers to whom they know. Advertisement will be also given in the newspapers. Government Employment Exchange will be also one of the major sources of recruitment.
76 Recruiting & Selection

According to Flippo Recruitment is the process of searching prospective employees and stimulating and encouraging them to apply for jobs I the organisation. In other words we can say that Recruitment is a process to discover the sources of manpower to meet the requirements of the staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force. Chanchapra Textiles does not have any systematic recruitment procedure for recruiting shop floor worker, master sometime and sometime do not fall in procedure of recruitment and section. Only other manager and employees fall in the recruitment process, which is also done when Requirements will be done by recruiting people by referring to internal sources to organisation only. According to Chanchapra Textiles, Recruitment is needed for every organization, it is the process of hire employees from various sources to achieve desire goal of an organization. 1. 2. 3. 4. 5. Get the information about recruit employee from other department Find the source of manpower Selecting the employee whose character is match with require job Give them information about organization and job Encourage them to apply for job
77 Recruiting Process
1. Need Identification:
Generally, Recruitment process begins when the human resource department receives requisitions for recruitment from any department of the company. The human resource requisitions contains details about the positions to be filled, number of person to be recruited, the duties to be performed, qualifications required from the candidate, terms and conditions of the employment, and the time by which the person should be available for appointment, etc. 2. Locating and Developing Source:
Locating and developing the sources of required number and type of employee. 3. Identifying the Prospective Employee:
Identifying the prospective employees with required characteristics. 4. Communicating:
Communicating the information about the organisation, the job and the terms and conditions of service. 5. Encouraging:
Encouraging the identified candidates to apply for jobs in the organisation. 6. Evaluating:
Evaluating the effectiveness of recruitment process.
78 Sources of Recruiting
Sources of Recruitment
Internal Sources
1. Transfer 2. Promotion 3. Family References 4. Recall Past Employees
Advantages of internal resource of recruitment
1. Moral and motivation of employees improve when they are assumed that they would be preferred in filling up vacancies at higher levels. 2. Suitability of existing employees can be judged better as record of their qualifications and performance is already available in the organisation. 3. It promotes loyalty and commitment among employee due to sense of job security and opportunity for advancement. 4. The time and expenditure of recruitment are reduced as there is little need for advertising vacancies, or arranging rigorous tests and interviews.
External Sources
1. Competitor 2. Advertisement
79
Disadvantages of internal resource of recruitment
1. It may lead to inbreeding. 2. It discourages flow of new blood into the organisation. 3. All vacancies cannot be filled up from within the organisation. 4. The choice in selection is restricted. Chances of favouritism are higher.
Advantages of external resource of recruitment

1. People having the requisite skill, education and training can be obtained. 2. As recruitment is done from a wider market, best selection can be made irrespective of caste, sex or religion. 3. Expertise and experience from other organisation can be brought. 4. It helps to bring new blood and new ideas into the organisation. 5. This source of recruitment never dries up. 6. External source are best when suitable people from within are not available.
Disadvantages of internal resource of recruitment

1. It is more expensive and time consuming to recruit people from outside. Detailed screening is necessary as very little is known about the candidate 2. The employees being unfamiliar with the organisation, their orientation and training is necessary. 3. If higher level jobs are filled from outside, motivation and loyalty of existing staffs are affected.
80 Selection
Selection means choosing an eligible candidate from all the applicants. Selection is the process of differentiating between applicants in order to identify and tire those with a greater likely hood of success in a job. Excellence, innovation and creativity are the foundations on which we build our business, and our staffs comprise a handpicked team of the best possible people. To build this team, we undertake an extremely thorough and comprehensive recruitment process, and seek applicants who satisfy a broad range of criteria in terms of their ability to make a positive, on-going contribution to Macquarie. Generally, this process includes applications, initial interviews, further interviews, psychological assessments and reference checking before an offer is made. The Selection Process is concerned with determining whether an applicant meets with all the qualification need to perform a particular job. It is very important because if a wrong person is selected it will cost to the company. Procedure for selection is differing from organization to organization and from job to job. For Executives: Written Test, Aptitude test Subject test, Group test Interview Final selection
For Non-Executives: Written Test Final interview and selection
81 Selection Process 1. Scruitinising of Applicaions
2. Application Blanks
3. Selection Tests
4. Interview
5. Medical Examination
6. Reference Check
Primary Selection
7. Placement
8. Induction
This above diagram shows professional selection process. Chanchapra Textiles does not have any type of selection process.
82 Job Description
The data collected through job analysis provides the basis for preparing job descriptions and job specifications. Job description is a functional description of what the job entails. It is descriptive in nature and defines the purpose and scope of a job. Job description is a written record of the appropriate and authorized contents of a job. It is a factual and organized statement describing the job in terms of its title, location, tasks, and duties, responsibilities, working conditions, hazards and relationship with other jobs. Job description is an important document as it helps to identify the job and gives a clear idea of what the job is. 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 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 In Chanchapra Textile., HR Manager is not prepared any kind of documents related to job description. They just give as brief idea about tasks, responsibilities, working condition, and facility. So we prepared following table showing job description of the two jobs; Master, Supervisor, and lower level worker as example.
83 Job Description for Supervisor

Title Department Tasks Supervisor Production and finish goods Department To keep production record and check effectiveness of production Supervisor have to come in time and have to check the written record Responsibilities which sent by master for daily production or checking quality of raw material and finished goods. Noisy Working condition Come on time, late will be on the next day Proper dress, shocks and shoos is must A.C. Rooms Material handling is easy and fast Facility at workplace Mobile phone and vehicle will be provided Good and healthy environment CCTV camera Supervision is directly from the director. Supervision Supervision to production department and other finish goods department. Salary level 20,000 to 35,000 With equivalent levels of management in other departments Relationship Maintain social and official contacts with local officials
84 Job Description for Master

Title Department Tasks Master ( vice supervisor ) Mainly in production Department To keep production record and send it to main supervisor Come in time and have to keep written record for daily production Responsibilities or taking attendance and receive raw material and check it then send it to the supervisor. Noisy Working condition Proper dress, shocks and shoos is must A.C. Rooms Material handling is easy and fast Necessary tolls and equipments are provided Facility at workplace Mobile phone and vehicle will be provided Good and healthy environment CCTV camera Supervision is directly from the main supervisor Supervision Supervision on lower level worker and other finish goods department. Salary level 15,000 to 28,000 Finished goods department Relationship Market
85 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, 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. Chanchapra Textile is related with production of Grey Cloth. In this type of industry there is no need of such a high educational qualification for workers. There is need to handle machine properly and need to be physically strong and mentally stable. Job specification or position specification or employee specification is a statement of the minimum acceptable human qualities required for the proper performance of a job. It is a written record of the physical, mental, social, psychological, and behavioural characteristics which a person should possess in order to perform the job effectively. Physical characteristics include heights, weight, chest, vision, hearing, health, age, voice, poise, hand and foot coordination, etc. Mental characteristics includes of general intelligence, memory, judgment, ability to concentrate, foresight, etc. social and psychological characteristic comprises emotional stability, flexibility, personal appearance, pleasing manners, initiative drive, etc. personal characteristic includes sex, education, family background, job experience, extra-curricular activities, etc.
86 Job Specification for Supervisor

Position title Age Department Education* Job experience Supervisor Above 30 years Cover up production and finished goods department B.com, Minimum 5 years in the same positions No handicapped Mentally stable Have no any epidemic disease Ability to work for long hours Other attributes Good knowledge of computer Analytical and decision making skills Fluency in speaking and writing Judgment power will be good General intelligence
87 Job Specification for Master

Position title Age Department Education* Job experience Master ( vice supervisor ) Above 22 years Cover up production and finished goods department Minimum 12th pass , B.com Minimum 2 years in the same positions No handicapped Mentally stable Have no any epidemic disease Ability to work for long hours Other attributes Good knowledge of computer Analytical and decision making skills Fluency in speaking and writing Judgment power will be good General intelligence
88 Performance Appraisal
Performance appraisal is the systematic, periodic and an impartial rating of an employee excellence in matters pertaining to his present job and his potential for a better job. It is a systematic evaluation of the individual with respect to his or her performance on the job and his or her potential for development. According to HR Manager, Performance Appraisal is very important. By this we can take decision about particular employees productivity. The firm invest behind employee to provide good environment and facility, so it is necessary to check that whether firm get proper return of its investment or not. In Chanchapra Textile, every finished piece of grey cloth (LOT) is checked and if there is problem than it send back for improvement, so in other words performance is measured with every finished piece of grey cloth (LOT). Performance appraisal is done in very good manner. Performance appraisal is the process of systematic, periodic and impartial, estimating or judging the value, excellence, qualities or status and thereby evaluating the performance or qualification of a person, things or object in terms of requirement of the job for which he is employed. Performance appraisal is mainly based on number of policies sale by them and the targeted premium achieved by them. Whatever the target achieved by the person they are given the appraisal such as, Awards Promotion Incentives
89 Performance Appraisal Process

Chanchapra Textile does not follow any types of performance appraisal system but we have made performance appraisal process as an advice. The performance appraisal process is given as follow,
Establishment of Standards
Communicate Standards with Employee
Measuring the Actual Performance
Compare Standards and Actual Performance
Corrective Actions
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1. Establishment of Standards:
The parameter is set by proper discuss between experts and production manager. The parameter is decide with undertaking of average employee not so excellent, not so week. For different post, there are different parameters which we can take as performance measurement parameter. By checking and evaluating this parameter we can take decision about performance of employee. if work performance cannot be measured, the personal characteristics which contribute to employee performance must be determined. These characteristic include work quality, honesty, and reliability, cooperation, attendance, safety, job knowledge, learning ability, etc.
2. Communicate Standards with Employees:

The performance appraisal standards specified in the first step are communicated and explained to the employees so that they come to know what is expected from them. The reaction from employees to the standards should be obtained. If necessary the standards may be revised or modified in the light of feedback obtained from the employees and the evaluators. 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 HR 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 Actual Performance:

Once the performance appraisal standards are specified and accepted, next step is the measurement of actual performance. This requires choosing the right technique of measurement, identifying of actual the internal and external factors influencing performance and collecting information on the result achieved. Performance is measured according to the parameters set by
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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.
4. Compare Standards and Actual Performance:

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.
5. Corrective Action:
When the result is achieved, the result is needed to communicate with employee. There is meeting between employee and examiner or HR Manager, he tell the result to employee. If the result is bad, than examiner give guidelines to improve the performance in positive manner
92 Promotion, Demotion, Transfer

Promotion refers to a higher post carrying greater responsibilities, higher status and best salary. It is the upward movement of an employee in the organizations hierarchy to another job commanding greater authority and better working condition. We can easily know that in textile industry there is nothing like Promotion, Demotion, and Transfer. Chanchapra Textile does not have any promotion, demotion, or Transfer policy. Demotion is just the opposite of promotion. It refers to the downward movement of an employee in the organizations hierarchy with lower status and salary. It is a downgrading process and a serious type of punishment. Demotion is done because of following reason: If the quality of work done by employee is very poor If he will not regular Behaviour is very poor
Transfer is the process of shifting the employees to another department or another branch. Increment In the absence of scales the grant of increment depends upon the discretion of the employer including past performance of the workmen and the prosperity of the industrial establish.
93 Welfare Activities
Welfare includes anything that is done for the comfort and improvement of employees and is provided over and above the wages. Welfare helps in keeping the morale and motivation of the employees high so as to retain the employees for longer duration. The welfare measures need not be in monetary terms only but in any kind/forms. Employee welfare includes monitoring of working conditions, creation of industrial through infrastructure for health, industrial relations and insurance against disease, accident and unemployment for the workers and their families. Labour welfare entails all those activities of employer which are directed towards providing the employees with certain facilities and services in addition to wages or salaries. The very logic behind providing welfare schemes is to create efficient, healthy, loyal and satisfied labour force for the organization. The purpose of providing such facilities is to make their work life better and also to raise their standard of living. The important benefits of welfare measures can be summarized as follows: They provide better physical and mental health to workers and thus promote a healthy work environment Facilities like housing schemes, medical benefits, and education and recreation facilities for workers families help in raising their standards of living. This makes workers to pay more attention towards work and thus increases their productivity.
94 Statutory Welfare Schemes

1. Drinking Water: At all the working places safe hygienic drinking water should be provided. 2. Facilities for sitting: In every organization, especially factories, suitable seating arrangements are to be provided. 3. Canteen facilities: Cafeteria or canteens are to be provided by the employer so as to provide hygienic and nutritious food to the employees. 4. Lighting: Proper and sufficient lights are to be provided for employees so that they can work safely during the night shifts. 5. Washing places: Adequate washing places such as bathrooms, wash basins with tap and tap on the stand pipe are provided in the port area in the vicinity of the work places. 6. Changing rooms: Adequate changing rooms are to be provided for workers to change their cloth in the factory area and office premises. Adequate lockers are also provided to the workers to keep their clothes and belongings. 7. Rest rooms: Adequate numbers of restrooms are provided to the workers with provisions of water supply, wash basins, toilets, bathrooms, etc.
Non Statutory Welfare Schemes

1. Personal Health Care (Regular medical check-ups) 2. Time Flexibility 3. Mediclaim Insurance Scheme
95 Training & Development

Training is bridge the gap between job requirement and present competence of employee. For improve the quality of work, reduce wastage, increase productivity, keep and maintain controlordination. If employee is well trained then it will lead to success of organization. There are mainly four type of training program given as follow: Induction training Technical training Work training Behavioural training
But, Chanchapra Textile use only induction training programme for new comers in the organization. Induction training Induction training is for new employee. Induction training is specially given when new employee join the organization. When new employee joins the organization, they doesnt know that who is the superior and subordinate, what are rules and regulation which they have to follow, what is the work environment, etc. too aware from all this thing to new employee induction training program is organize. There is not any separate department for organizing training programme in Chanchapra Textile. In Chanchapra Textile training is given by Master of production department to new comers.
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Technical training The main purpose behind work training is to improve the quality and increase the productivity. In this training special technician come to organization and explained the proper method of working. This training is held on every 4-5 month. This is very beneficial to the firm. The employee can learn how to produce material with minimum cost and maximum quality. In the diamond industry, quality has more important than quantity. When new technique and machinery installed at that time work training is very important. Work training The main purpose behind work training is to improve the quality and increase the productivity. In this training special technician come to organization and explained the proper method of working. This training is held on every 4-5 month. This is very beneficial to the firm. The employee can learn how to produce material with minimum cost and maximum quality. In the diamond industry, quality has more important than quantity. When new technique and machinery installed at that time work training is very important. Behavioural training In this training, the main point of teaching is that how to behave with other. This training is directly undertaken by H R Manager. He understands employees about moral of human life, good thinking, way to reach success, keep and maintain control-ordination with superiors and subordinates. For training sometime they called specialist of different knowledge like mind planner, religious person, psychologist, etc. when the complain about the behaviour of any particular employee is coming at that time, H R Manager organize meeting between this employee and himself and understand the employee about above thing. This training is especially helpful to resolve the conflict between employees. Chanchapra Textile does not use any programme for development of employee.
97 Wages and Salary Administration

Wages is the reward in monetary terms or in the forms which can be expressed or understood in the monetary terms or payable to or paid to employees for the services rendered by them to the organization. In Chanchapra Textile, there is only one kind of compensation system that is time wage rate system.
Time Wage System

Under this system, wages are paid on the basis of time spent on the job irrespective of the amount of work done. The unit of time may be a day, a week, a fortnight or a month. In the past, daily wages have been the most common basis and, therefore, it came to be known as the Day Wage System. Advantages of time wage system 1. It is the simplest and oldest method. It is easy to understand and workers can easily compute their own remuneration. 2. Earnings of workers are regular and fixed and they do not suffer from temporary loss of efficiency. This gives them a sense of economic security and self- confidence. 3. The plan is economical as no detailed records of output are required. Clerical work in the computation of wages is minimum 4. As there is no pressure to speed up production, the quality of work can be kept high.
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Disadvantage of time wage system 1. The method provides no incentives for better performance as reward is not proportionate to effort. 2. Guaranteed remuneration makes workers indifferent and complacent. 3. Calculation of labour cost per unit is difficult as the total wage bill does not change with the volume of production. 4. In the absence of an incentive to hard work, productivity of labour becomes low unless close supervision is used. 5. Control over labour cost becomes difficult and more payment may be made for the lesser amount of work. 6. There is no basis for finding the merit of different employees and promotions may have to be made on the basis of seniority. Time wage system is suitable under following condition: 1. Where units of output are non-measurable as in case of office work and mental work is involved as in policy working 2. When employees have little control over the quantity of output or there is no clear cut relation between effort and output as in some machine paced or assembly line jobs. 3. When delays in work are frequent and beyond the control of employees that is where output is uncertain and irregular. 4. Where machinery and materials used very sophisticated and expensive
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Components of compensation
Monetary compensation package of employees generally consist of the following components: 1. Basic pay: The primary part of pay package is basic pay. For blue-collar worker basic wage may be based on work done but for white collar employees, supervisory staff and manager, basic salary is generally time bound. 2. Allowances: Several allowances are paid in addition to basic pay. Some of these allowance are given below: a. Dearness Allowances: This allowance is given to protect real income against inflation. Generally, dearness allowance is paid as a percentage of basic pay. b. House rent Allowances: employers who do not provide living accommodation pay house rent allowances it employees. City Compensatory Allowances: This allowance is paid generally to employees in metro cities and other big cities where cost of living is comparatively high. /city compensatory allowances are generally a fixed amount per month. c. Transport Allowances / Conveyance Allowance: some employers pay transport allowances to their employees. In some cases, medical allowances, education allowance for children, tiffin allowance, etc. are also paid. 3. Incentives: Incentive compensation is performance linked remuneration paid with a view to inspire employees to work hard and do better. Both individual incentives and group incentives are used.
4. Fringe benefits: Several types of benefits are paid particularly to senior managers. Provident
funds, pension, gratuity, encashment of earned leave, company house, company car, leave concession, medical aid, interest free loan, holiday homes, entertainment, stock option, etc. are examples of such benefits.
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CONCLUSION
The Chanchapra Textiles completed 7 years. During these periods it achieves many progressive stages. From the study of last 2 years financial data, we can say that rate of progress of Chanchapra is very good. Chanchapra Textiless Sales and Profit is increase in current year to compare past years. For the duration of our training in Chanchapra Textiles, we found that the workers and managerial staff are good and the management of all departments is efficient. Workers are fully satisfied with their work. This Chanchapra Textiless aim is not only do profit but also work for employee welfare and societal welfare.

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BRCM College of Business Administration

BRCM College of Business Administration

Year of Establishment: Production Starts from:

Promoters: Jayeshbhai Tulsibhai Chanchapra Capacity: 4000 meters/day

BRCM College of Business Administration

BRCM College of Business Administration

BRCM College of Business Administration

BRCM College of Business Administration

BRCM College of Business Administration

9 Organisational Structure of Marketing Department

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10 Types and Classification of Product

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15 Segmentation & Targeting

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BRCM College of Business Administration

Producer Distributor Warehouse Distributor Printing & Dying Mills (Customer)

Printing & Dying Mills

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18 How Customer Orders Are Proceed?

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BRCM College of Business Administration

BRCM College of Business Administration

BRCM College of Business Administration

22 Generic Level Competition

GENERIC BUSINESS LEVEL MODEL OF PORTER

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BRCM College of Business Administration

BRCM College of Business Administration

Promotional and Advertising Policy

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BRCM College of Business Administration

BRCM College of Business Administration

BRCM College of Business Administration

29 Organizational Structure of Production Department

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BRCM College of Business Administration

Inputs to the production planning process

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32 Analysis of Plant Location

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33 Plant Location of Every Department

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34 Internal Plant Location

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BRCM College of Business Administration

Power Looms Machine

Yarn Twisting Machine (Spinning Machine)

Electronic Weighting Scale

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37 List of Material Handling Equipment

Scissor & Spindle

Material Lifting Machine

Goods Transportation Truck

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38 Inventory Valuation Method

BRCM College of Business Administration