A

SUMMER TRAINING PROJECT REPORT ON

Financial Analysis

AT DUSS LIMITED, MORADABAD

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR BBA DEGREE Submitted To, Submitted By. Mr. Syed Md. Faisal Ali khan Mudit Mittal
1

Faculty Management
Sem.

BBA 5th
(2008-2011)

SARASWATI INSTITUTE OF MANAGEMENT & TECHNOLOGY Affiliated to Kumaun University, Nanital

12 Km on Rudrapur- Gadarpur Road, P.O. Prem Nagar via Gadarpur (U.S. Nagar) Uttarakhand Website: www.simtrdr.org , E-mail: simt1@rediffmail.com

COLLEGE CERTIFICATE

COMPANYS LETTER

STUDENT DECLARATION
This project has been undertaken as a partial fulfilment of the requirements for the award of the Degree of Bachelor of Business Administration from Kumaun University, Nanital. This project was executed during the IVth semester under the supervision of Department. Further, I declare that this project is my original work and analysis and findings are for academic purpose only. This project has not been presented in any seminar or submitted elsewhere for the award of any degree or diploma.
4

Mr. Syed Faisal Ali Khan, Faculty Management

Supervisor Signature Student Signature MR. SYED MD. FAISAL AlI KHAN MITTAL Dept of Management IVth sem. MUDIT BBA

HOD Signature Mrs. PUJA JHORI

ACKNOWLEDGEMENT
It is a matter of great pride to my summer training in the prestigious Dugdh Utpadak Sahkari Sangh Limited (DUSS Ltd.) "PARAG" Dalpatpur, Distt. Moradabad, under its Finance Department. I have no word to express my gratitude towards General Manager Sri

Mr. PRASADI LAL, who allowed me to carry on my summer training at

"PARAG" Dalpatpur. There is a great sense of indebtness toward Finance In charge Mr. help.
5

SARVESH KUMAR SAXENA, Who has also

supervised my report and spared his valuable time for timely suggestion and

My reverenced teacher, Director Dr. MOHD. ALI, S.G.I. whose guidance is of great importance in the completion of this report. I am thankful to Mrs. PUJA JHORI (H.O.D.), of Management dept., for the help rendered by them time to time. I also express my sincere thanks to Mr. SYED MD. FAISAL

ALI KHAN my Project Guide, who had make the concepts of Finance so
clear that the project had become very easy to understand and make. My most sincere and greatest gratitude towards my parents who enabled me with all their resources, love and guidance. Last but not the least I want express my regards all the staff members of Parag, my teachers and my friends who helped me in every possible manner to present this treatise in this form.

Mudit Mittal

PREFACE

Table of Contents
Title College Certificate Company Letter Student Declaration Page no. (2) (3) (4)
7

Acknowledgement Preface Chapter No.

1.

(5) (6)

Introduction to topic

8 9 26 28 33

2. Introduction to company 3. Objective of study

4.

Scope and Importance

5. Research Methodology 6. Data analysis 7. Findings and Analysis 8. Conclusion 9. 10. Recommendations Limitations Bibliography Annexure

.. ..

INTRODUCTION TO TOPIC
My project is based on facts and survey conducted under the guidance of the people of Moradabad Dugdh Utpadak Sahkari Sangh Limited, who had been very helpful at all times.

INTRODUCTION TO COMPANY
Uttar Pradesh milk co-operatives are contributing immensely to the Indian dairy industry, the highest milk producer in the world. The impact of Uttar Pradesh milk co-operatives can be ascertained from their role in the private and cooperative systems. With the launch of innovative technologies Uttar Pradesh is
9

now being able to enhance their milk production acutely. The merging of the rural and the urban contribution to the dairy production in Uttar Pradesh forms the Uttar Pradesh milk co-operative union. This induces rapid growth and development in the dairy production. The Uttar Pradesh milk co-operatives are significantly engaged in the production, procurement, processing and marketing of milk. The Pradeshik Co-operative Dairy Federation in Lucknow facilitates the marketing and distribution of milk in Uttar Pradesh. Moradabad Sahkari Milk Board Ltd., Dalpatpur, was established in 1968 with the joint planning of INDIAN GOVERNMENT & UNICEF. The UNICEF with assistance from freedom from hunger campaign committee for the benefits of poor and malnourished population in India and it was a belief that this dairy may serve as a living monument of international co-operation. The main objective to set up the Moradabad Sahkari Milk Board is collecting the milk from the villages. Through co-operative societies and distribute pure, fresh milk and milk products after pasteurization in Moradabad on fair prices. This was the planning of state govt. which is now successfully running under the PRADESIK CO-OPERATIVE DAIRY FEDERATION. The dairy was started in 1968. The capacity of plant at that time is 50,000 liter per day. The organization was manufacturing its product under brand

PARAG but due to some reason in June 1993 again this organization
started working under two schemes. This aid was given by NATIONAL DAIRY DEVELOPMENT BOARD, NEW DELHI to PRADESHIK CO- OPERATIVE DAIRY FEDERATION LTD. In the year 1993 the name of organization changed and new name was assigned MORADABAD DUGDH UTPADAK SAHKARI SANGH LTD.

(DUSS Ltd.) DALPATPUR, MORADABAD and the brand name of

product is PARAG.
10

Parag the brand name of Pradeshik Co-operative Dairy Federation is given by the general public and accepted by Pradeshik Co-operative Dairy Federation. It is a symbol of PARAG which is found in the flowers on pollen grains.

Milk procurement by the Uttar Pradesh Milk co-operatives

In 1999-2000 Uttar Pradesh procured milk of 7.19 Lakh kg Per Day to 7.09 Lakh kg Per Day. According to an authentic source it procured 15, 943 tonne thousand milk in the year 2003-2004 as against 2.89 lakh tonnes in 2000-2001.

Estimates of Milk Production

State

97-98

98-99

99-00

00-01

01-02

02-03

03-04

04-05

05-06

06-07

07-08

08-09

Uttar Pradesh

12934

13618

14152

13857

14648

15288

15943

16512

17356

18095

18861

19537

*Production in lakh liters.

CORPORATE PROFILE
11

It is the project of Indian government established in 23 state of India from the name of state dairy cooperative federation. It is running is various 23 states in India from the name of state cooperative dairy federation under the supervision of central government running by state government dairy cooperative all over country are allowing the small dairy farmers to take initiative in moulding their own destiny. They serve more then 10 million former in over 80,000 villages. Here is a list of dairy co-operatives in India state wise. STATE COOPERATIVE DAIRY FEDERATIONS ANDAMAN & NICOBAR: Andaman & Nicobar Island Integrated Development Corporation Ltd. (ANIIDCO), Port Blair - 744101. ANDHRA PRADESH: Andhra Pradesh Dairy Development Cooperative Federation Ltd. Lalapet, Hyderabad - 500017 Brand name: Vijaya. BIHAR Bihar State Cooperative Milk Producers Federation Ltd. Dairy Development Complex, PO Bihar Veterinary College, Patna - 800014 Brand Name: Sudha. GOA:

12

Goa State Cooperative Milk Producers Union Ltd. Curti, Ponda - 403401, Goa Brand Name: Goadairy. GUJARAT: Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF) Amul Dairy Rd, Anand - 388001 Brand Names: Amul, Sagar. HARYANA: Haryana Dairy Development Cooperative Federation Ltd. SCO No 127-128, Sector 17-C, Chandigarh - 160017 Brand Name: Vita. HIMACHAL PRADESH: Himachal Pradesh State Cooperative Milk Producers Federation Ltd. Totu, shimla 171011 JAMMU & KASHMIR: Jammu Cooperative Milk Producers Federation Ltd. (JCMPF) Jammu cantt - 180003 Brand name: Jamfed. Kashmir Valley Milk Producers Cooperative Federation Ltd. Srinagar - 19001 KARNATAKA:
13

Karnataka Cooperative Milk Producers federation Ltd. Bangalore - 560029 Brand name: Nandini. KERALA: Kerala Cooperative Milk marketing federation Ltd. Thiruvananthapuram - 695004 Brand Name: Milma. MADHYA PRADESH: Madhya Pradesh State Cooperative Dairy federation Ltd. Bhopal - 462011 Brand Name: Sanchi, Shakti, Sneha. MAHARASTRA: Maharashtra Rajya Sahkari Dugdh Mahasangh Maryadit Mumbai - 400020 Brand Name: Mahanan. MANIPUR: Manipur State Cooperation Milk Processing & Marketing federation Ltd. Imphal 795001

NAGALAND:
14

Kohima Dist Cooperative Milk Producers Union Ltd. Dimapur - 797112 Brand Name: Kevi. ORISSA: Orissa state cooperative milk producers federation Ltd. Bhubaneswar - 751007 Brand Name: Omfed. PONDICHERRY: Pondicherry Cooperative Milk Producers Union Ltd. Pondicherry - 605009 Brand Name: Ponlait. PUNJAB: Punjab State Cooperative Milk Producers federation Ltd. Chandigarh - 160022 Brand Name: Verka. RAJASTHAN: Rajasthan Cooperative Dairy federation Ltd. Jaipur 302017 Brand Nam: Saras. SIKKIM:
15

Sikkim Cooperative Milk Producers Union Ltd. Gangtok - 737102 Brand Name: Sikkimilk. TAMIL NADU: Tamil Nadu Cooperative Milk Producers Federation Ltd. Chennai - 600051 Brand Name: Aavin. TRIPURA: Tripura Cooperative Milk Producers Union Ltd. Agartala - 799006 Brand Name: Gomati. UTTAR PRADESH: Pradeshik Cooperative Dairy Federation Ltd. Lucknow - 226001 Brand Name: Parag. WEST BENGAL: West Bengal Cooperative Milk Producers Federation Ltd. Calcutta - 700091 Brand Name: Benmilk.

PROFILE OF PARAG U.P.

16

Established in 3/Jan/1967 Pradesh Corporative Dairy Federation Ltd. (Parag) is the largest FMCG and manufacture enterprise of its kind in India today. The company is engaged in manufacture of wide variety of milk products and FMCG product, transmission and utilization of milk food product. Placed among the top 4 manufacture of milk product & milk, PARAG provides products, services for milk products, Ghee, Butter, Milk, Power, Ice Cream etc. In each of these sectors, PARAG offer total service to its customers on turnkey basis. The first plant of PARAG was set up in Lucknow, which signalled the dawn the milk food industry in India. It has 26 major plant were set up in U.P. & Uttarakhand. PARAG business broadly covers conversions, transmission, utilization and conservation of food products in core sectors of economy that fulfil vital infrastructure needs of the country. Its products have established and enviable reputation of high quality and reliability, which is largely due to emphasis placed all along on contemporary companies. Parag has consistently upgraded its design and manufacturing facilities to National standards acquiring and assimilating some of the best technologies of the India from the leading companies in all over India from its own R & D Centres. Headquarters at Lucknow, the company now has 26 manufacture divisions, more than 100 service centres and 4 regional centres besides project sites spread all over India and effective service to customers in India. PARAG has more than 30,000 employees comprising trained engineers, technicians & skilled artisans supporting technical staff and management staff. The company registered a turnover of Rs.100000 cr during the year 2006-2007.

17

MANUFACTURING UNITS OF PARAG PRADESHIK CO-OPERATION DAIRY FEDERATION LTD.

Agra Dugdh Utpadak Sahkari Sangh Ltd., Agra. Allahabad Dugdh Utpadak Sahkari Sangh Ltd, Allahabad. Soc: 360, Mems: 20,000. Av Milk Prod.: 30,000 Lpd. Almora Dugdh Utpadak Sahkari Sangh Ltd. Almora. Soc: 151, Mems: 7020. Av Milk Prod.: 4,5 61 Lpd. Azamgarh Dugdh Utpadak Sahkari Sangh Ltd, Azamgarh. Ballia Dugdh Utpadak Sahkari Sangh Ltd, Ballia. Soc: 177, Mems: 13290. Av Milk Prod.: 4,790 Lpd. Banda Dugdh Utpadak Sahkari Sangh, Banda. Barabanki Dugdh Utpadak Sahkari Sangh Ltd, Barabanki. Soc: 390, Mems: 25,370. Av Milk Prod.: 28271 Lpd. Bareilly Dugdh Utpadak Sahkari Sangh Ltd, Bareilly. Bijnore Dugdh Utpadak Sahkari Sangh Ltd, Bijnore. Soc: 212, Mems: 8,480. Av Milk Prod.: 9,935 Lpd. Bulandshahr Dugdh utpadak Sahkari Sangh Ltd, Bulandshahr. Soc: 514, Mems: 31,400.Av Milk Prod.: 70,668 Lpd. Deharadun Dugdh Utpadak Sahkari Sangh Ltd, Deharadun. Soc: 201, Mems: 9753. Av Milk Prod.: 7,100 Lpd. Etawah Dugdh Utpadak Sahkari Sangh Ltd, Etawah. Soc: 158, Mems: 10,000.Av Milk Prod.:6,440 Lpd. Farrukhabad Dugdh Utpadak Sahkari Sangh Ltd, Fatehgarh.
18

Soc: 147, Mems: 10,000. Av Milk Prod.: 7290 Lpd. Fatehpur Dugdh Utpadak Sahkari Sangh Ltd, Fatehpur. Soc: 304, Mems: 18,000.Av Milk Prod.: 24,000 Lpd. Firozabad Dugdh Utpadak Sahkari Sangh Ltd, Sheikhabad. Gangol Sahkari Dugdh Utpadak Sangh Ltd, Meerut. Soc: 449, Mems: 27,971.Av Milk Prod.: 48,066lpd. Ghaziabad Dugdh Utpadak Sahkari Sangh Ltd, Hapur. Ghazipur Dugdh Utpadak Sahkari Sangh Ltd, Ghazipur. Gonda Dugdh Utpadak Sahkari Sangh Ltd, Gonda. Soc: 146, Mems: 5,451.Av Milk Prod.: 4,100 Lpd. Gorakhpur Dugdh Utpadak Sahkari Sangh Ltd, Gorakhpur. Soc: 211, Mems: 12975.Av Milk Prod.: 4,331 Lpd. Hamirpur Dugdh Utpadak Sahkari Sangh Ltd. Hamirpur. Hardoi Dugdh Utpadak Sahkari Sangh Ltd, Hardoi. Av Milk Prod.: 17,000.Lpd. Jalaun Dugdh Utpadak Sahkari Sangh Ltd, Hardoi. Av Milk Prod.: 11,381 Lpd. Jaunpur Dugdh Utpadak Sahkari Sangh Ltd, Jaunpur. Soc: 102, Mems: 4,700. Av Milk Prod.: 2,700 Lpd. Kanpur Dugdh Utpadak Sahkari Sangdh Ltd, Kanpur. Soc: 397.Av Milk Prod.: 83,700 Lpd. Kotdwara Dugdh Utpadak Sahkari Sangh Ltd, Kotdwara. Lucknow Producers cooperative Milk Union Ltd, Lucknow. Manipuri Dugdh Utpadak Sahkari Sangh Ltd, Manipuri. Soc: 160, Mems: 8,000.Av Milk Prod: 13,000 Lpd. Mathura Dugdh Utpadak Sahkari Sangh Ltd, Mathura. Soc: 149, Mems: 10,080. Av Milk Prod.: 14500 Lpd.
19

 Mirzapur Dugdh Utpadak Sahkari Sangh Ltd, Mirzapur. Moradabad Dugdh Utpadak Sahkari Sangh Ltd, Moradabad. Soc: 885, Mems: 45369.Av Milk Prod.: 85,000 Lpd. Muzaffarnagar Dugdh Utpadak Sahkari Sangh Ltd, Muzaffarnagar. Nanital Dugdh Utpadak Sahkari Sangh Ltd, Nanital. Soc: 340, Mems: 18470.Av Milk Prod.: 22,340 Lpd. Pithoragarh Zila Dugdh Utpadak Sahkari Sangh Ltd, Pithoragarh. Rae Bareilly Dugdh Utpadak Sahkari Sangh Ltd, Rae Bareilly. Soc: 126, Mems: 12,970.Av Milk Prod.: 5,930 Lpd. Saharanpur Dugdh Utpadak Sahkari Sangh Ltd, Saharanpur. Soc: 213, Mems: 11,310.Av Milk Prod.: 12,370 Lpd. Shahjahanpur Dugdh Utpadak Sahkari Sangh Ltd, Shahjahanpur. Soc: 104, Mems: 4,715. Av Milk Prod.: 3,255 Lpd. Sitapur Dugdh Utpadak Sahkari Sangh Ltd, Sitapur. Soc: 130, Mems: 6,490.Av Milk Prod.: 12,456 Lpd. Sultanpur Dugdh Utpadak Sahkari Sangh Ltd, Sitapur. Soc: 292, Mems: 14,720. Av Milk Prod.: 12,456 Lpd. Uttar Kashi Dugdh Utpadak Sahkari Sangh, Uttar Kashi. Varanasi Dugdh Utpadak Sahkari Sangh Ltd, Varanasi. Soc: 248, Mems: 11,495.Av Milk Prod.: 16,657 Lpd.

20

GROWTH AND DEVELOPMENT OF THE ORGANISATION

MORADABAD DUDGH SAHKARI SANGH LTD. Was started in Nov. 1968 with the capacity of 150000 lit. Per day. This aid was given by NATIONAL DAIRY DEVELOPMENT BOARD, NEW DELHI to PRADESIK CO-OPERATIVE DAIRY DEDERATION LTD. LUCKNOW in year 1983 organization starts selling of milk in Polly pack. At that time it was the only organization who sale the milk in Polly pack in Moradabad Mahanager. The table represents the growth rate of milk from the beginning of this organization in Polly pack.

Sales Report of Liquid Milk

21

Year

Sale/Lit. Day

Decline/Increase in%

1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009

16359 18838 17038 15479 12109 11040 12700 11005 10959 11162

------------15.153% 9.55% 9.15% 21.77% 8.8% 13.70% 13.34% .41% 1.85%

Above sales report presents fluctuation in the sale of Parag polypack milk. With the compare of 1997-98, in 2007-08 the sale of Parag has been declined 31.76%g downward due to coming of similar other companies in similar field. Present sale is concentrated on 9-10 thousand lit. /Day. Moradabad Dugdh Sangh has increased the capacity of its doing from 50,000 to 1,50,000 Liters. The efficiency of Akbarpur chilling center has been accelerated from 10,000 liter to 90,000 liter per day another chilling plant has been established at Bijnor. During 1992-93 the organization faced a loose of Rs. 3.31 Crores while in 93-94 organization earned a profit of Rs. 6.60 lakhs with all dedication & hard work of management and employees of organization and in 1994-95

22

organization earned a profit of Rs. 888.94 Lakhs, the company reaped a profit of Rs. 2 crore approximately in Year2003-2004.

SOCIETY AND THEIR PROCUREMENT REPORT

Society and their Procurement Report
Year No. of Society No. of member Procurement of Milk(Liters/Day) 2000-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 727 684 707 749 859 1054 1008 871 645 49390 43652 40956 41214 44470 4889 48975 43199 42675 46737 46552 67049 71617 67385 102060 65074 70652 40817
23

At present the company is making all possible effort for increasing the sale of liquid milk and milk products. About 1 milk bar is operating in Moradabad Mahanager and a large no. of agents involved in selling of milk and product. There are more than 200 commission agents of milk and milk product in Moradabad Mahanager. At present Moradabad Dugdh Sahkari Sangh Ltd. Deals in so many milk products as Pasteurized Standardised Milk, Double toned milk, Sterilized flavour milk, Simple Mattha, Salted Mattha, Milk cake, Parag kheer, pure ghee etc. Over all Parag is the market leader due to their quality, Brand image, operating efficiency and approachability from last thirty years.

PRESENT STATUS OF THE ORGANISATION

Moradabad Mahanagar Parag is the market leader in Polypack milk. Before two year percentage sale of Parag Polypack milk is near about 90% but due to coming of similar other companies their percentage came down by 26.6%. Now total percentage of consumption of milk in Moradabad is near about 56% in poly pack industry. At present Parag milk board sale is concentrates nine thousand liters/day. Over all Parag polypack milk is the market leader. The sale of their other products is also very good and captures large market of Moradabad Mahanagar. These data represent the annual sale of Parag products.

Products Name Table butter (20gram)

Weight (Kg.) 55000 24

Pure Ghee Kheer Milk Cake Flavoured Milk (liters) Mattha (Liter) White Butter

44500 14200 3950 94000 45000 29985

25

Till now, if we think about polypack milk than Parag poly pack milk firstly strike at our mind. Over all image of parag milk is best in Moradabad Mahanagar. Moradabad Dugdh Sahkari Sangh Ltd. Always tries to maintain their good image in the minds of consumers.

PRODUCT PROFILE

26

SERIAL NO.

NAME OF PRODUCTS

1.

PASTEURISED MILK

STANDARDISED

2.

PARAG DOUBLE TOONED MILK

3.

PASTEURISED SKIMMED MILK

4.

PURE MILK GHEE

5.

STERILIZED FLAVOUR MILK

6.

PLANE MATTHA

7.

MATTHA SALTED

8.

LASSE

9.

PARAG KHEER

10.

MILK CACK

27

28

OBJECTIVES
PARAGS VISION
VISION OF PARAG (DALPATPUR) MORADABAD: Word class, innovative, competitive, cost effective & Profitable productive enterprise committed to quality, learning, growth, stake-holders and customer enrichment CORPORATE VISION: Total Business Solutions. World class, Innovative, Competitive &Profitable Hygienic food products providing

COMPANYS BUSINESS MISSION

BUSINESS MISSION: To maintain a leading position as suppliers of quality products, and services in the field of conversion of milk, for application in the areas of food products. Utilize companys capabilities and resources to expand business into allied areas and other priority sectors of the economy. BUSINESS OBJECTIVES: 1. GROWTH:-

29

To ensure a steady growth by enhancing the competitive edge of PARAG in existing business, new areas and India leading operations so as to fulfil national expectation from PARAG. 2. PROFITABILITY:To provide a reasonable and adequate return on capital employed, primarily through improvements in operational efficiency, capacity utilization and productivity and generate adequate internal resources to finance the company growth. 3. CUSTOMER FOCUS:To build a high degree of customer confidence by providing increased value for his money through international standards of product quality, performance and superior service. 4. PEOPLE ORIENTATION:To enable each employee to archive his potential, improve his capabilities, perceive his role and responsibilities and participate and contribute positively to the growth and success of the company. To invest in human resources continuously and alive to their needs.

5. IMAGE:To fulfil the expectation which stake holders like Government as owner, employee, customer and the country at large have from PARAG.

30

RESEARCH METHODOLO GY
RESEARCH METHODOLOGY
31

After recession with my locality member. I choose the project of working capital management. I discussed the project with my instructor and coordinator Mr. Sarvesh Kumar, account of books & budget section at PARAG Moradabad. He approved the project. After that a simple course of action has been followed for working on this project. That entire information and data were gathered from the respective annual report of PARAG, Moradabad. All the figures are taken from their balance sheet, profit & loss account of the respective years and the other internal documents, which were personally shown by the members of company in our interest. A great help was provided by our instructor Sarvesh Kumar in understanding the facts and figures Mr. Sarvesh Kumar it possible to us to ask our quarry from that person who can answer it best than anybody else in the company. Although it has been a difficult task but the availability of proper data and timely guidance give by Mr. Sarvesh Kumar and my efforts made it a little simpler of completed this project.

32

SWOT ANALYSIS
Every organization is a part of an industry. All most all the organization faces competition either directly or indirectly. Thus the industry and competition are vital considerations in making of strategic choice. Business firms undertake S.W.O.T. analysis to understand the central and internal environment. S.W.O.T. analysis stands for strength, weakness, opportunity and threats. It is also known as WOTS- UP analysis. With the help of S.W.O.T. Analysis the strength and existing within an organization can be matched with the opportunities and threats operating in the environment so that an effective strategy is one that capitalizes on the opportunities through the use of strength and neutralizes the threats by minimizing the impact of weaknesses. S.W.O.T. analysis involves matching of internal capabilities with the environmental opportunity and threats matching strengths and weakness with opportunities and threats requires that a firm should direct its strength towards and threats requires that a firm should direct its strength towards exploiting opportunities and blacking threats white minimizing exposure of its weakness at the same time. S.W.O.T. analysis of PARAG is as:

STRENGTHS (S): 1. The company has a strong image and strong brand image. 2. PARAG has excellent distribution network. 3. The company has a competent sale force.

33

4. It has a long experience. 5. The company has a strong market reputation. 6. The visibility of Parag in Moradabad polypack market is very high as compare to the other brand. 7. Parag Sangh is a Semi-Government Sector.

WEAKNESSES (W): 1. Inability to provide project financing. 2. The promotional budget of the PARAG is less than their competitors. 3. Rate of PARAG polypack is higher than their competitors. 4. The company is somewhat over confident.

OPPORTUNITITIES (O): 1. High expected growth in food sector. 2. The polypack market is growing at a steady phase of 5 to 7%.
3.

The total market of polypack milk is near about 15000 liters per day.

4. Opportunity to promote by using various sales promotion methods.

THREATS (T):
1.

The threat to the PARAG Company is by the entry of competitors.

Namely by Gopalji, Amul, Nandan, Mother dairy. 2. Their promotional budget is very low in comparison to their other budget.

34

3. Total percentage of loose milk is near about 80-83% in Moradabad Mahanagar. 4. The market there of Parag polypack milk is declined by 25%.

NATURE AND SCOPE OF STUDY

The basic purpose of Financial Analysis of Parag milk factory and Comparison with two year Balance Sheet in Parag milk factory and Maintain equitable wages and salary structure. Wages and Salary Administration refers to the establishment and implementation of sound policies and practices of employee compensation. It includes such areas as job evaluation survey of wages and salary analysis or relevant organization problem development and maintenance of wage structure, establishing rules for administrating wages, wages payment, incentives, profit changing and adjustment, supplementary payments, control on compensation costs and other related items. The wages and salary administration is concerned with the financial aspect needs, motivation of needs, motivation and rewards of the organization, analysis and interpret the needs of their employee so that rewards can be individually designed to satisfy these needs.

35

FINANCIAL ANALYSIS
Meaning of Financial Analysis is to classify the data in simple form given in financial statements and to compare with each other to find out the strong points and weakness of the business and to take decisions for future. For instance, if all items relating to current assets are placed in one group while all items relating to current liabilities are placed in another group, the comparison between the two groups will provide useful information. Actually the figures given in financial statements do not speak anything themselves. The analysis of these figures helps the interested reader by giving tongue to these mute heaps of figures.

In the words of Finney and Miller: Financial analysis consists in separating facts according to some definite plan, arranging them in groups according to certain circumstances and then presenting them in a convenient and easily read and understandable form.

In the words of John N. Myres: Financial statement analysis is largely a study of relationships among the various financial factors in a business, as disclosed by a single set of statements and a study of the trends of these factors as shown in a series of statements.

36

OBJECTS OR PURPOSE OF FINANCIAL ANALYSIS The purpose of financial analysis depends on the needs of the person who is analyzing these statements. These varying needs may be : (i) (ii) (iii) (iv) (v) (vi) (vii) To know the Earning Capacity or Profitability. To know the Solvency. To know the Financial Strength. To make comparative study with other firms. To know the capability of payment of interest and dividend. To know the trend of the business. To know the efficiency of management.

(viii) To provide useful information's to the Management.

FINANCE FUNTIONS
37

COST SECTION: Cost-section of the company is divided into following two sections viz, PRODUCT COST & CENTRAL COST and these deals with the following functions: Determination of periodic profits including inventory valuation. Determination of pricing policy of the company. Work relates to capital expenditures of the company. Developing variance management information report for different parts of management for purpose of cost control and reduction. Valuation of work in progress and finished goods. Interaction with management of top management link for achieving cost control and cost reduction and thereby improving bottom line of the company. Preparation of cost sheet of different product and their analysis for future planning. SALES SECTION: Sales accounts section will deal mainly with the following: Scrutiny and vetting of estimates / quotation for sale of products / services, whenever financial concurrence is required. Scrutiny and vetting of agreements for sales of products and services. Invoicing for sale / advance or progressive payment / erection income and other. Maintenance of subsidiary records like sale journals / sales day book, sundry debtors ledgers advances from customer ledger etc.
38

 Payments, recovery and accounting of sale tax, excise duty. Accounting of claims on carries/ insurance companies for missing items / damages on outward consignments. Scrutiny, payments and accounting of bills of carriers and insurers and other miscellaneous claims relating to them outwards consignments. Review and in coordination Reconciliation as well as follow up of recovery of outstanding dues from the customers Calculation and scrutiny of data for payments of royalties to the collaborators.

STORES SECTION: For the conveniences of performance of various functions it is divided in to further three sections which are as follows:a) Stores bills. b) Store review . i) ii) iii) They deal mainly with the following items of works:Payment of suppliers bill including bill for advances indigenous. Pricing of stores receipt vouchers including fixed assets vouchers and fixed assets receipt vouchers. Maintenance of accounts of advances to suppliers, claims recoverable, claims for short suppliers, rejections and rectifications to materials and sundry creditors. iv) Opening of letter of credit and arranging payment to suppliers under credit / deferred payment agreements.

39

v)

Payment of bills for ocean freight, port trust dues, custom duty, local agents commission and clearing agents bills, transit insurance bills, bills of contractors for transport / handling etc. and accounting of such payments are made at regional offices.

vi) vii)

Maintenance of account of accounts of material issued on loan and materials issued to subcontractors. Keeping account of earnest money and security deposits received from tender and suppliers.

viii) Adjustment of stores in transit to be made at the close of the year.

BOOKS AND BUDGET SECTION: i) ii) Preparation of operating budget for the company as a whole. Co-ordination with various function of organization with regard to generation and submission of important MIRs to corporate office. iii) iv) v) company. Preparation of annual accounts to the company. Coordination with company auditors with regard to company accounts. Maintenance and accounting of fixed assets accounts. Preparation of long term profit plans based on broad objectives of the

PAYROLL SECTION: This section deals mainly with the following functions:-

40

i) ii) iii) iv) v) vi)

Preparation of monthly wages bill. All account work related to personal payment and discloses profit and loss account of the company. Dealing with income tax authority with regard to personal taxation of employee. Dealing with other statutory authority such as P.F. Commissioner, ESI (Employee state insurance). To ensure correct payment of salary and wages and other benefits to employees in line with policies. Payments and accounting of all miscellaneous expenditures incurred on post and telegraph, telephone and miscellaneous payments.

CASH SECTION: The cash section shall responsible for banking of all money or moneys worth received by the company and the disbursement of all authorized payments on behalf of the company and also for the safe custody of all cash and other valuable as may be entrusted to that section. The broad functions are:

i)

Receipt of money in the form of cash, cheque, bank draft, and postal orders etc.on behalf of the company. Payment of money to the suppliers, contractors etc. on behalf of the company and disbursement of salaries, wages and other personal payments of employees.

ii)

Handling and custody of cash, cheque etc. till disbursement or deposit in bank and custody of other valuables like govt. and other paper securities, share certificates, bank guarantees etc.
41

iii)

Accounting of all receipt and payments on behalf of the company in cash / bank books, maintenance of registers and other record incidental to and for the efficient dispatch of the responsibilities of the section.

iv) v)

Arrangement / operation of cash credit facility with banks. Preparation of cash flow statement forecasts etc.

Note: - The function of arrangements of cash credit facility specified at item (IV) above is now discharged centrally by the cash management section of the corporate office. However the division concerned will also keep proper liaisons with all the local members, bank consortium to ensure the smooth functioning of the centralized cash credit system.

WORKS SECTION: Work section of the company is dealing with the following functions:i) ii) iii) iv) v) vi) Payments of contractors bill including bills for advance. Maintenance of accounts of contractors with regard to security deposits, earnest money, progressive payments. 215 maintenance of accounts of materials issued on loans to contractors. All accounting work related to capital expenditure in progress on erection of plant & machinery and building. All other miscellaneous. Work relating to hiring of various facilities. Payments and accounting of all expenditure related to revenue particularly with regard to expenditure related to revenue particularly with regard to expenditure incurred on repair and maintenance of plant machinery, building and roads.
42

Status of DUSS Ltd. Moradabad showing balance sheet Balance sheet of 2007-08
PARTICULARS AMOUNT AMOUNT

Sources of Funds:-

Capital account

3,69,71,020.61

Loans (Liability) secured loans unsecured loans 6,29,78,457.05 1,37,60,018.19 7,67,38,475.24

Branch / Divisions

4,02,98,483.91

GRAND TOTAL

15,40,07,979.76

Application of Fund:2,57,17,108.19 Fixed Assets

Investment

17,65,774.85

43

Working capital Current Assets stock-in-hand Deposits(assets) Loans & Advances (assets) Sundry Debtors cash-in-hand Bank Accounts Other Current Assets (-) 52,13,660.11 20,39,227.91 42,54,468.37 34,29,338.32 2,746.00 55,86,649.71 1,39,43,351.91 2,76,10,765.69

Less: current liabilities Duties& taxes Provisions sundry creditors 24,885.00 11,200.00 3,41,25,155.53 (-)7,85,47,877.6 other current liabilities 7,19,97,402.82 10,61,58,643.35 6

PROFIT& LOSS A/C Opening balance add: current year 18,38,45,971.01 1,89,46,081.86 20,27,92,052.87 adjustments during the year 22,80,921.51 20,50,72,974.38

GRAND TOTAL

15,40,07,979.76

MORADABAD D.U.S.S. LTD Dalpatpur, Moradabad

44

PROFIT & LOSS A/C

PARTICULARS AMOUNT AMOUNT

Trading Account:

sales account cost of goods sold consumption: opening stock purchase account 25,23,265.18 37,66,55,503.45 37,91,78,768.63 Less: closing stock 52,13,660.11 37,39,65,108.52

45,76,90,583.36

Expenses (Direct)

6,53,25,407.77

43,92,90,516.29

Gross profit

1,84,00,067.06

Income Statement :

income (Revenue)

6,01,545.79

Sub-total

1,90,01,612.85

Less : Expenses

Expenses ( indirect)

3,79,47,694.71

3,79,47,694.71

45

Net Profit

(-)1,89,46,081.86

PERFORMANCE ANALYSIS As at sat, 31 Mar 2008 OPERATING RESULT

For the month Sale Account Actual (February : Total) 1.3.2008to31.3.2008 11,29,163,915.60 2,45,33,288.04 For the year 1.4.2007to31.3.2008 45,76,90,583.35

Purchase Account Actual (February : Total) 9,54,02,454.77 4,56,69,888.86 37,66,55,503.45

46

Income (Revenue) Actual (February : Total) 48,168.54 11,605.00 6,01,545.79

Expenditure Account Actual (February : Total) 4,05,99,953.68 75,58,099.98 10,32,73,102.48

CASH MOVEMENT

Cash-in-hand opening Balance Receipts Paymennts Closing Balance 3,56,640.75 Dr 63,45,781.50 66,99,676.25 2,746.00 Dr 30,065.65 Dr 8,74,33,677.57 8,74,60,997.22 2,746.00 Dr

Bank Accounts opening Balance Receipts Paymennts Closing Balance

, 1,38,949.37 Dr 6,42,69,462.60 5,88,21,7662.26 55,86,649.71 Dr 74,11,905.80 Dr. 71,94,33,950.58 72,12,59,2066.67 55,86,649.71 Dr.

Nett cash flow Inflow of cash Outflow of cash 4,65,71,484.41 4,14,77,678.82 47,06,23,140.99 47,24,75,716.73

47

(net inflow of cash)

50,93,805.59

(-)18,52,575.74

RATIO ANALYSIS OF DUSS Ltd. Moradabad ON THE YEAR OF 2008

for the month 1.3.2008 to 31.3.2008 PROFITABILITY RATIOS

for the year 1.4.2007 to 31.3.2008

Sales Account

11,29,13,915.60

45,76,90,593.35

Gross Profit Gross Profit %

(-)1,20,64,020.96 (-)10.68%

1,84,00,067.06 4.02%

Net Profit Net Profit % Operating Cost %

(-)3,11,38,397.36 (-)27.58% 127.58%

(-)1,89,46,081.86 (-)4.14% 104.14%

Current Ratio A. Current Assets B. Current Liabilities A:B ( at the end of February) 2,76,765.69 10,61,586,43.35 0.26:1 0.77:1

48

Quick Ratio (without stock-in-hand) A. Liquid Assets B. Current Liabilities A:B (at the end of February) 2,23,97,105.58 10,61,58,643.35 0.21:1 0.61:1

Debt / Equity Ratio A. Loans (Liability) B. Net Capital Account A:B 7,67,38,475.24 (-)16,81,01,953.77 (not calculable)

Working Capital Turnover A. Sales Account B. Working Capital A/B 45,76,90,583.35 (-)7,85,47,877.66 (not calculable)

Receivables Turnover (avg. credit on sales) A. Sundry Debtors B. Sales Account (A / B) * no. of wkg days (-)34,29,338.32 45,76,90,583.35 (not calculable)

Present Status of DUSS Ltd. Moradabad showing balance sheet Balance sheet of 2008-09
49

PARTICULARS

AMOUNT

AMOUNT

Sources of Funds:-

capital account

3,69,79,745.61

Loans (Liability) secured loans unsecured loans 6,31,86,202.05 1,37,60,018.19 769,46,220.24

Branch / Divisions

6,85,60,178.06

GRAND TOTAL

18,24,86,143.91

Application of Fund:-

Fixed Assets

2,31,84,266.30

Investment working capital Current Assets stock-in-hand Deposits(assets) Loans & Advances (assets) Sundry Debtors cash-in-hand Bank Accounts Other Current Assets (-) 10,97,881.13 20,39,227.91 12,79,449.55 30,40,668.25 22,886.75 3,20,13,258.85 1,27,58,957.22 4,61,70,993.1666

13,89,196.85

Less: current liabilities Provisions 11,200.00

50

Duties& taxes sundry creditors other current liabilities

18,343.00 4,60,19,234.89 7,91,09,037.02 12,51,57,823.91 (-)7,89,86,830.75

PROFIT& LOSS A/C opening balance add: current year 20,50,72,974.38 3,20,45,623.98 23,71,18,598.36 adjustments during the year (-)2,19,086.85 23,68,99,511.51

GRAND TOTAL

18,24,86,143.91

MORADABAD D.U.S.S. LTD Dalpatpur, Moradabad PROFIT & LOSS A/C

PARTICULARS AMOUNT AMOUNT

Trading Account:

sales account cost of goods sold consumption: opening stock purchase account 52,13,660.11 25,40,69,501.48

31,34,97,133.21

51

25,92,83,161.59 Less: closing stock 10,97,881.13 25,81,85,280.46

Expenses (Direct)

5,63,10,031.57

31,44,95,312.03

Gross profit

(-)9,98,178.82

Income Statement :

income (Revenue)

5,52,662.43

sub-total

(-)4,45,516.39

Less : Expenses

Expenses ( indirect) Other revenue accounts

3,16,00,107.59 3,16,00,107.59

Net Profit

(-)3,20,45,623.98

52

PERFORMANCE ANALYSIS As at sat, 31 Mar 2009 OPERATING RESULT

For the month Sale Account Actual (February : Total) 1.3.2009 to 31.3.2009 1,98,88,622.72 2,90,86,929.77 For the year 1.4.2008 to 31.3.2009 31,34,97,133.21

Purchase Account Actual (February : Total) 1,05,77,829.51 1,55,23,711.61 25,40,69,501.48

Income (Revenue) Actual (February : Total) 2,43,541.20 1,33,228.00 5,52,662.43

Expenditure Account Actual (February : Total) 3,43,52,271.97 30,97,126.11 8,79,10,139.16

53

CASH MOVEMENT

Cash-in-hand opening Balance Receipts Payments Closing Balance 35,351.05 Dr 63,45,781.50 66,99,676.25 22,886.75 Dr 2,748.00 Dr 9,21,78,543.97 9,21,58,403.22 22,886.75 Dr

Bank Accounts opening Balance Receipts Payments Closing Balance 2,36,24,857.45 Dr 1,91,78,807.00 5,88,21,7662.26 55,86,649.71 Dr 55,86,649.71 Dr. 50,02,82,511.00 47,38,55,901.86 3,20,13,258.85 Dr.

Net cash flow Inflow of cash Outflow of cash (net inflow of cash) 2,15,62,113.25 1,31,86,176.15 83,75,937.10 37,12,14,707.01 34,47,67,957.12 2,64,46,749.89

RATIO ANALYSIS OF DUSS Ltd. Moradabad ON THE YEAR OF 2009

54

for the month 1.3.2008 to 31.3.2008 PROFITABILITY RATIOS

for the year

1.4.2007to31.3.2008

Sales Account

1,98,88,622.72

31,34,97,133.21

Gross Profit Gross Profit %

(-)1,58,69,732.01 (-)79.79%

(-)9,98,178.82 (-)0.32%

Net Profit Net Profit % Operating Cost %

(-)2,70,17,247.67 (-)135.84% 235.84%

(-)3,20,45,623.98 (-)10.22% 110.22%

Current Ratio A. Current Assets B. Current Liabilities A:B ( at the end of February) 4,61,70,993.16 12,51,57,823.91 0.37:1 0.47:1

Quick Ratio (without stock-in-hand) A. Liquid Assets B. Current Liabilities A:B (at the end of February) 4,50,73,112.03 12,51,57,823.91 0.36:1 0.43:1

Debt / Equity Ratio A. Loans (Liability) B. Net Capital Account A:B 7,69,46,220.24 (-)19,99,19,765.90 (not calculable)

55

Working Capital Turnover A. Sales Account B. Working Capital A/B 31,34,97,133.21 (-)7,89,86,830.75 (not calculable)

Receivables Turnover (avg. credit on sales) A. Sundry Debtors B. Sales Account (A / B) * no. of wkg days (-)30,40,668.25 31,34,97,133.21 (not calculable)

WAGES & SALARY ADMINISRATION The basic purpose of wages and salary administration is to establish and maintain an equitable wages and salary. It is not so simple to developed or maintain the wages and salary structure in an structure in an organization. So wages and administration should be controlled by some proper agency. This responsibility may be entrusted to the personnel department or general company organization, or to some job executive. Since the problem of wages salary is very dedicated and complicated. I usually entrusted to a committee of high ranking executives representing major line organization. The major functions of much committee are:1. Approval and / or recommendation to management on the job evaluation methods and finding.
56

2. Review and recommendation of basic wages and salary structure. 3. Help in the formulation of wages policies. 4. Co-ordination and review of departmental rates to ensure conformity. 5. Review of budget estimates for wages and salary adjustments and increase.

This committee should be supported by the advise of the technical staff; such committee may be for job evaluation; job description meant rating wages salary survey in an industry and for a review of present wages rate procedure and policies. Alternative the overall plan is first presented by the personnel manager in consultation and discussions with senior members of other department. It is then committed for final approval of the top executives. Once he has given his approval for the wages and salary structure and the rules for administration its implementation becomes a joint effort of all heads of the departments. The actual appraisal of the performance of subordinates is carried out by the various managers, who is turn submit their recommendations to ensure compliance with established rules to administration in unusual cases of serious disagreement the president makes the final decision. (a) MEANING A wages (or pay) is the remuneration paid, for the service of labour in production to on employee/worker. Wages usually refers to the hourly rate paid to such groups as production and maintenance of employees (blue caller worker). On the other side, salary normally refers to the weekly or monthly rates paid to clerical administrative and professional employees (white caller worker).
57

Every organization has a unique wages and salary structure if its own, while framing the wages and salary police the top management ensure that the wages structure is attractive and the compensation package provides a reasonable standard of living for its employees. According to the plan, it first prepared by the personnel manager and discussion with senior members of other departments. After this it is submitted for final approval of the top executive organization, a sound wages policy is to adopt a job evaluation, depending upon the contents of the job. (b)PRINCIPAL The generally accepted principles governing the fixation of wages and salary are:i) ii) iii) The plan should carefully distinguish between jobs and employees. Equal pay for equal worker. There should be a well defined and clear cut procedure for hearing the wages complaint and redressed of these grievances. iv) All the wages and trade union members should be fully aware of the existing wages rates and grievances redressed procedure about wages complaints. v) vi) vii) The wages and salary structure should be flexible so that changing condition can be easily met. The wages and salary payment must fulfill a wide variety of human need for self actualization. For revision of wages

58

FACTORS: The factor usually taken into consideration for wages and salary administration. i) The firms capacity to pay The main factor of wages and salary administration is the capacity of firms to pay. Firms enjoying higher profits, higher rate of return over investment gives higher wages than those firmss which are running into losses are enjoying lesser profit.

ii)

Demand and supply of labour If the demand of labour is more than its

supply the labour wanted higher wages and if the demand of labour is less then its supply the labour wanted lesser wages.

iii)

Prevailing market rate To attract the sufficient and maintain the quality

and quantity of manpower, a firm gives the wages to its employee, according to the industry or other firms.

iv)

The cost of living When the cost of living increasing, the worker demand

increases for real wages.

59

v)

Job requirement Wages is also depending upon skills, responsibility and

job condition required. Those employees who have higher responsibility get more wages then the employees which have lower skill and responsibility. vi) Production of labour Productivity measures the contribution of all the resource factors men, method, material and management. vii) Managerial attitudes Job managements desire to maintain or enhance the companys prestige has been a major factor in the wages policy of number of firms. Desire to improve or maintain moral to attract high-caliber employees, to reduce turnover and to provide as possible wages policy decisions.

WAGES DETERMINATION PROCESS The element of these diagrams is explained below: a) Job Analysis The process is done, after the deciding that how many persons would be needed. It is a written document. It records the detail of training, skill, qualification, abilities, experience, responsibilities etc. Job Description and Specification

60

These are the structure of job analysis. Job description mean to describe the job that, whats responsibilities, authority given to the people where as, job specification tells that what kind of person to recruit and what qualities are present for doing the particular job.

c) Job Evaluation In these processes, there is a comparison between the different type of work and the workers which are doing this work. d) Wages Survey After the job evaluation the actual amount to be paid to worker must be determined. This is done by making wages or salary survey. Such surveys are given the answers the questions like, what are other firms paying? What is the level of pay offered by firms for similar occupation? etc. such wages survey provide may be kinds of useful information about differences in wages level for particular kinds of occupation. this can have a great influence on an organization compensation policy.

e) Wages Structure The next step is to determine the wages structure. For this several decisions need to taken such as:i) ii) Where the organization wishes or able pay amount above, below or equal to averages in the industry. Where wages range should be provide for merit increase or whether their should be single rate.

61

iii) iv)

The number and width of the payment grade and extent to overlap. Which jobs are to be placed in each of the pay grade. There are though no hard and fast rule for making such

decision and procedure.

f) Rules of Administration Wages & Salary administration should be controlled by some proper agency. This responsibility may be entrusted to personal department or, some job executive. For controlling the wages and salary administration a committee is formed for the formulation of wages policies. According to the rules of administration the wages and salary is paid to the worker / employees. g) Wages Payment Method of wages payment is different in different organization. Different industry applied different method for the payment of wages. But the three most common methods which have provide a basis for all these systems of wages are payment by time, by piece and debt. These systems are generally termed as:a) Time Wages Payment System As the name suggested under this system time is the basis of payment. Remuneration of is the directly calculated on the basis of time spent by him on the work. This system is simplest historical
62

and oldest method of wages payment. Under this system if a worker is paid 5 rupees per hour and work for 8 hours. They will get 5x8=40 rupee * Time wages=T x R

T = Time spent at the work place. R = Rate of wages per unit of time.] This system enjoys the following payoffs:1) This method is simple to operate and easy to understand. 2) worker. 3) It is accept by trade unions. 4) 5) Eliminated wastage. Illiterate worker also can not cheated by employees. Understand the method any sickness and lazy cannot cut the payment of

Pitfalls:1) Increase cost of production. 2) No distraction between good and bad workers. 3) Decline in efficiency.

63

b) Piece Wages Payment System This system is also very old, but it is only recently that it has begun to be windily used. Under this system workers are paid according to the quality of goods products not on the basis of payment. When the result or output is zero, then quite obviously the pay will be zero. Piece wages = N x R N = Number of pieces are produced by the workers. R = Rate per piece

This system enjoys the following payoffs:1) It provides greater incentive it the worker. 2) It distinguishes skilled and semiskilled work. 3) Easy estimation of labour cost.

Pitfalls:1) This method is harmful for worker. 2) Heavy wastage during the highly wages. 3) Under this system minimum wages are not fix.
64

c) Balance Method The methods also know as debt method. This is a combination of time and piece rates. The worker is guaranteed an hourly or a daily with an alternative piece rate. If the earning of a worker calculated at the piece rates, the worker is guaranteed an hourly or daily rate with an alternative piece rate. If the earning of a worker calculated at the piece rate exceeds the amount which he would have earned means, if the paid on the time basis he get credit for the balance, i.e. , if his price rate earning are equal to his time rate earnings the question of excess payment dose not arise. Where piece rate earning are less than time rate earning he is paid on the basis of the time rate; but the excess which he is paid is carried forward as a debt against him to recovered from any future balance of piece work earning over time work earning over time earnings. This system presupposes the fixation of time and piece rate on a scientific basis. All the wages payment system has discussed, but in PARAG time wages payment system is going on, because other wages payment system is impossible. ALLOWANCES AND DEDUCTIONS

I) ALLOWANCES:

1. DEARENESS ALLOWANCE (D.A.) The payment of these allowances will be regulated in accordance with the orders issued by the company from time to time. It will be regulated by Head Office of Government of U.P. in Lucknow.
65

Dearness allowance will be computed on the basis pay of each employee. Dearness allowance (DA) will be admissible during leave provided leave salary is payable. It will not be admissible during extra ordinary leave or leave without apply. - At present Dearness Allowance is 41.8% on Basic Pay.

2. HOUSE RENT ALLOWANCE (HRA) The payment of these allowances will be regulated to those employees who never uses the company quarters and they live in there own quarters. House Rent Allowance (HRA) is also payable in leave period. For these purpose leave means total leave of all kinds not exceeding 120 days of the leave period of holidays are combined with leave, the entire period of holidays and leave should be taken as one spell of leave. - At present House Rent Allowance is 10% on Basic Pay and Special Allowances. 3. OVERTIME ALLOWANCE (OT) When a worker, who comes in factories act, 1948, works beyond the prescribed hours on any day, he is entitled to payment of Overtime Allowance. This is worked out at a single rate i.e. (1/208 of pay, Basic Pay, Special Allowance, Dearness Allowance) for each hour on a working day. When a worker works more than 9 hours on a day or more than 48 hours a week. Overtime Allowance is calculated at double the rate mentioned above. OT = BP + SA + DA \ 208 X 1 Hr.

66

In the cause of staff not covered by factories Act, the overtime allowance will be claimed in accordance with rules and rates fixed by the Management. 4. CONVEYANCE ALLOWANCE Conveyance allowance / cycle allowance will be paid as per the rules framed by the company from time to time. 5. LATE NIGHT SNACK ALLOWANCE (LNSA) All employees who work in night shifts extending beyond midnight are paid LNSA. This allowance is also paid to temporary employees who working against regular employees. - At present LNSA is Rs. 30/- per night 6. WASHING ALLOWANCE Payment of washing allowance is to be regulated as per orders/circulars issued by personnel department in this regard from time to time. - At present Washing Allowance is Rs. 70/-per month

II) SUBSCRIPTOIN TO CONTRIBUTORY POVIDEND FUND: On receipt of office order of joining from personal dept., the data is sent to computer for deduction of CPF. The particulars are noted in the individual salary/wages record and further recoveries are affected every month at the rate prescribed from time to time. - At present the rate of recovery of subscription towards cpf is 12% wages/salary.

67

III) RECOVERY OF CYCLE/SCOTER/MOPED/CAR ADVANCE: When payment of cycle/motorcycle/scooter/moped/car advance is made, the particulars of the number of installment recoverable will be noted in the individual salary/wages record and the recovery effected every month accordingly. Just after the last installment of the principle amount is recovered, interest due will calculated be and also be noted for recovery.

IV) LIFE INSURANCE PREMUM: The concerned office of the life insurance Corporation intimates the rate of Premia and policy numbers in respect of employees covered by Life Insurance Corporations Salary savings scheme. This will be noted in the individual salary/wages record and recoveries affected every month accordingly. V) HOSPITAL AND DIET CHARGES: A statement of hospital and diet charges recoverable from various employees is received every month from the chief medical officer in charge of the hospital either directly or through the Revenue Accounts section. A note of the amount due for recovery will be kept in the individual wages/salary record and recoveries will be affected accordingly. - At present the rate of Hospital and Diet Charge is Rs.30/-per day. VI) CLUB SUBSCRIPTIONS: The list employees joining the clubs as well as those who have discontinued the subscription of the club are received from the
68

secretaries of the clubs every month. With reference to these advice recoveries will be affected by the establishment Accounts Section. - At present the rate of Club Subscription is Rs.50/-per month.

VII) INCOME TAX: At the beginning of the year, the total anticipated income assessable to income tax is worked out with reference to details available in the establishment. Accounts section and the installments of deductions are fixed accordingly. In the month of August or September a declaration is obtained from each employee assessable to income tax showing the detail of annual income, Life Insurance Premium paid, subscription to provident fund, Recurring Deposit Scheme and other relevant particulars for the calculation of income tax in terms of financial act of the year. A statement of deductions on account of income tax deduction at source will also be supplied to the employees concerned by 30 April every year. For the purpose of calculations of income tax recoverable from salaries of company employees, the salaries earned and paid from the period from April to March are taken into account. However, in case of deputations the basis adopted while in government service of namely, salaries earned during the period March to February, will be continued in the company so long as they continue on deputation with the company.

69

JOURNAL ENTRY OF EARNINGS AND DEDUCTIONS DESCRIPTION BASIC PAY DEARNESS ALLOWANCE HOUSE RENT ALLOWANCE OVERTIME ALLOWANCE LATE NIGHT SNACK ALLOWANCE WASHING ALLOWANCE SPECIAL ALLOWANCE OTHER ALLOWANCE RENT COMPANY QUARTERS ELECTRICITY CHARGES WATER AND GARDEN CHARGES DR xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx xxx CR

SUBSCRIPTION TO CONTRIBUTION PROVIDENT FUNDxxx RECOVERY OF CYCLE/MOTOR CYCLE/ CAR ADVANCExxx LIFE INSURANCE PREMIUM HOSPITAL AND DIET CHARGES CLUB SUBSCRIPTION OTHER RECOVERIES xxx xxx xxx xxx
70

FINDINGS

To find out the financial position of Parag will decrease day by day. After analyzing the ratio in two year balance sheet we found that the ratio has decreased in comparison to last year balance sheet. The existing pay structure should be regularly revised. This will make job evaluation program mere acceptable to employees. Wages and salary structure must be such that which help to maintain harmonious relation between employers and employees. Regional difference in wages should invariably be maintained. To find out satisfaction level of employees related to salary. To find out employees grade in parag milk factory.

71

Employees Grade

10% 20%

salary grade of officers salary grade class 2nd employee salary grade of class 3rd employee others

wages 8000 -16400 2750 -3050

40% 30%

4000 -5000

72

SUGGESTION
The company should create a system to evaluate the financial position of the company. Ensure that training contributes to competitive strategy of the firm. Different strategies need different financial skill for implementation. There should be making leaning one of the fundamental values of the company. Let this philosophy percolate down to all employees in the organization. There should be a comprehensible and systematic approach to training exits, and training and re-training are done at all levels on a continuous and ongoing basis. There should be a proper linkage among organizational and individual training needs.

73

CONCLUSION
1.

Pay fixation on age revision in PARAG is not point to point due to which pay annually arises.

2. There is no efficiency bar system in PARAG. 3. Both the inefficient and efficient persons get equal wages, hence efficient workers lose their enthusiasm for work.

BIBLIOGRAPHY
1. Understanding financial position of Parag. 2. Financial dept. of PARAG. 3. Establishment of Accounts in PARAG, Moradabad. 4. Intranet of PARAG, Moradabad.
5.

www.indiandairy.com
74

6. 7.

www.paragmilk.com E-mail: pcdf1@satyam.net.on webmaster@indiandairy.com

8. Finance is managed by Mr. Sarvesh Kumar

9.

75